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THE LEAD WITH JAKE TAPPER
Interview With California Congressman Adam Schiff; Dow Dives. Aired 4-4:30p ET
Aired February 5, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JIM SCIUTTO, CNN ANCHOR: That's the bell at the New York Stock Exchange there, as the market comes to a close, plunging, at latest count, more than 1,100 points. At the worst during the day, it was down some 1,500 points, the Dow's worst week in more than two years.
I want to bring CNN's Clare Sebastian. She is at the New York Stock Exchange.
Clare, what led to this market meltdown?
CLARE SEBASTIAN, CNN CORRESPONDENT: Well, Jim, it was really a variety of factors, a perfect storm, if you will.
The bell has just rung, ending one of the wildest days that we have seen on Wall Street in frankly more than a year. The measure of volatility, the VIX, has more than doubled today. That really shows that we're entering a new chapter here.
But it really started from the early part of the trading session. The Dow dipped more than 350 points. Then at lunchtime, it almost came back into the positive. And now we see what has happened at the close of the day.
The jobs report was out on Friday. That was one of the factors, perversely, because it was very good -- 200,000 jobs were added in January and wage growth was at its highest since 2009. But that has led traders to really start to worry about inflation and whether the Fed might move in and start to hike interest rates faster than they had originally expected.
That could eat into corporate earnings. The other big unknown here is what is going on in the bond market. Ten-year bond yields on U.S. Treasury are at up at four-year highs right now. That is leading some to be concerned as we edge towards the 3 percent mark, that critical point, that people might start to move out of stocks and into bonds.
But the bottom line here, Jim, is that this market has run so far for so long. Still, even with the losses of the last few days, the Dow is up around 20 percent in the last 12 months and many feel a correction was simply long overdue.
SCIUTTO: Clare Sebastian there at the stock market for us.
For more now, I'm joined by CNN global economic analyst Rana Foroohar.
Rana, you heard the talk there. The interest rates rising. It makes money more expensive. Never good for a stock market. Is it as simple as that?
RANA FOROOHAR, CNN ANALYST: In some ways, yes.
The crazy thing for everybody listening at home is that we got some really good economic news on Friday. Wages are finally going up after many years of that not happening. But, ironically, markets don't like wage hikes, because that also makes interest rates go up.
And when interest rates go up, the markets go down. That is typically what came down. The big question is, how long is this going to last? How big is it going to be? There's a lot of people -- I'm one of them -- that have been saying, hey, Wall Street and Main Street have been disconnected for a number of years now. We need a correction. It's natural.
The underlying economy, it's still pretty strong. The question is, is this going to turn into more of a panic? Are people going to, as they see their 401(k)s potentially going way, down, are they going to start to say oh, my gosh, we're going to pull back from spending?
Is it going to become a behavioral shift that then has bigger fallout on the rest of the economy?
SCIUTTO: We have just confirmed there that, in terms of points, threat today, the largest point drop in history. But just to be clear here, percentage wise, 4.6 percent, that' a big percent. But there have been many a days where bigger -- 1987, 25 percent of the market dropped, so points can be somewhat misleading.
You have heard the president, Rana, as I have, tout the better business climate here in the U.S. since he took office. The Republicans' tax reform plan. Fewer regulations, et cetera.
That's not enough to hold off issues like interest rates, et cetera, or a correction?
FOROOHAR: Well, what is ironic is the two things are connected.
A lot of Democrats were actually very critical of the tax cut and of the fact you're getting the stimulation into the economy at the end of a recovery cycle. It doesn't feel like it, but we've been in a recovery since 2009. It's actually kind of natural at this point that the economy should be slowing.
But, of course, the president came in. He made a lot of promises. He wanted to bolster that economy. He of course wants the economy and the markets to be strong through the midterm elections so the Republicans can hold Congress. All that meant the Republicans, through their tax cut, have thrown a little bit of kerosene on to the fire of the economy.
Some people are worried that that is now backfiring, that maybe growth is happening too fast. Interest rates could get hiked and that makes the party start going the opposite direction.
It's a very tricky calculus.
SCIUTTO: These are nervous times for anybody who has a retirement account.
As they watch a market like this, people at home, I'm not telling you to recommend them economic or rather investment advice here, but how should folks at home read this?
FOROOHAR: I will give a little advice.
And that's don't make any sudden moves. If you don't need your money soon, leave it where it is. People really often make the worst possible move, which is, when is a sell, to get involved in the panic and say, oh, my gosh, I have got to move my portfolio around.
Now is not the time to do that.
SCIUTTO: Rana Foroohar, thank you for the sage advice.
From Wall Street to another wild political day here in Washington. Our politics lead now.
President Trump declaring the release of the Nunes memo, that it totally vindicates him in the Russia, which is a view not shared even by some members of his own party on Capitol Hill.
And now, after the White House said that President Trump wanted all information about the Russia probe available to the American public, he is likely going to have to decide whether to declassify a memo written by the other side, Democrats, that does not draw the same conclusions, in fact, contradicts the conclusions in the Nunes memo.
If the president's attacks this morning on the top Democrat on the House Intelligence Committee, Adam Schiff, are any indication, the president may have changed his mind on full transparency.
CNN White House correspondent Pamela Brown joins me now for more.
Pamela, House Intelligence Committee likely we are told to approve releasing the Democratic memo in the next hour. But that leaves it in the president's hands. Does he agree necessarily?
PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, this is certainly going to be a big transparency test for the president.
The White House is saying the Democrats' memo will be evaluated the same way that the Republicans' memo was, with House had lawyers looking over it and so forth, but stopped short of saying the president would declassify it, saying it needs to be reviewed first.
But, as you know, Jim, with the Republicans' memo, it seemed that the president had already made up his mind even before that review, when he was caught on a hot mic the night of the State of the Union saying it would be released 100 percent.
And just today, he is going after on Twitter the ranking Democrat on the House Intelligence Committee, saying that Adam Schiff is one of the biggest liars and leakers in Washington.
Schiff fired back over Twitter and said that, "Instead of tweeting false smear, American people would appreciate if the president turned off the TV and focused on the funding crisis, as well as the dreamer situation."
So really a back and forth there between the president and the ranking Democrat, not really inspiring confidence among Democrats today on Capitol Hill that the president will sign off on their memo to be released to the public.
And also, Jim, the president claims the memo on Friday vindicates him and undermines the Russia probe. The Republicans ever since have been backing away from that, Paul Ryan, Trey Gowdy, a couple of Republicans who have come out and said, no, that it doesn't undermine the Russia probe.
So we will have to wait and see if when the Democrats' memo comes to the president's desk, what he will do. It's a big test.
SCIUTTO: Pamela Brown there, thank you at the White House.
Joining me for his first interview since President Trump's attacks on Congressman Adam Schiff, the top Democrat on the House Intelligence Committee.
Congressman, thanks very much for being here with us.
REP. ADAM SCHIFF (D), CALIFORNIA: Good to be with you.
SCIUTTO: As you're very familiar, the president attacks you directly today on Twitter.
He said the following -- quote -- "Little Adam Schiff, who is desperate to run for higher office, is one of the biggest liars and leakers in Washington," adding -- quote -- "Adam leaves closed community hearings to illegally leak confidential information. Must be stopped!"
I want to ask you on that final phrase there in particular, how do you interpret "must be stopped"?
SCHIFF: I don't know.
It is often hard to understand the president's tweets. But, as all the press that have dealt with me know, I am very careful to not disclose classified information or even things that happen in closed session. So, it's a baseless attack.
But, look, first, he attacked me some months ago, calling me sleazy Adam Schiff. Now it is little Adam Schiff, which, I don't know, seems better. It is also confusing. But bottom line is, I think it may be time for General Kelly to give
the president a time-out. I think the country would certainly benefit from that anyway.
SCIUTTO: You know that, oftentimes, with the president's tweets, you won't hear backup, in effect, from the White House, but in this one we did.
You had the White House deputy press secretary, Raj Shah, he claims as welcome that you have been involved in -- quote -- "a pattern of leaking and using confidential information for political purposes," again, in his words.
Have you or your staff ever leaked anything from the Intelligence Committee that should not have been leaked?
SCHIFF: No, we haven't.
But I think what the Trump administration is so concerned about and what they're really pointing to is when the president's son testified in our committee and refused to answer questions about the conversation he had with his father on the subject of the fabrication, that false statement that they produced about the meeting in Trump Tower, we called them out on it.
In our committee, when witnesses refuse to answer questions, we do make that public. And indeed the majority has as well, when the majority did when Steve Bannon refused to answer questions.
So they were embarrassed by the fact that the president's son claimed some attorney-client privilege, when neither he nor his father is attorney nor client. That's really when this started, when the president's son and the president son starting attacking me as a supposed leaker.
But we refuse to allow witnesses to come before our committee and say publicly they're fully cooperating and then invoke bogus privileges to conceal important communications.
And this is, I think, what really upsets the president. And, obviously, the work on that false statement goes directly to the issue of potential obstruction of justice.
SCIUTTO: This of course is not the only attack that the president has made against individuals, yourself included, but institutions, the FBI, et cetera.
Do you see at the root of this part of a more coordinated attack by the president and his allies on the entire Russia investigation?
This president, like Nixon, has his own enemies list. And anyone who is involved in the Russia investigation is basically on that list. So, of course, it includes people like Brennan and Clapper and Comey, myself, and Warner, all those of who were the subject of this tweet, but also McCabe and Rosenstein and any of the others folks at the FBI, frankly, who were corroborative witnesses when Comey came back from those meetings with the president.
Anyone who is either working credibly on the investigation or may be a witness on the obstruction issue seems to merit the most fulsome attack by the president.
SCIUTTO: Now, following those tweets this morning, the president attacking again this afternoon, this time in a speech, going after Democrats for not reacting positively to his comments at the State of the Union last week.
Listen to what he had to say.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They were like death and un-American, un-American. Somebody said treasonous. I mean, yes, I guess. Why not?
(END VIDEO CLIP)
SCIUTTO: That is a sitting president of the United States. Sometimes, we know he has a tendency to be flip perhaps. But he used the word treasonous to describe Democrats.
How do you respond?
SCHIFF: Well, this is the kind of demagoguery that we have come to expect from this president.
To accuse those who oppose him of treason, it is the new and only the lowest step that this president has descended to. But, of course, that is a long catalogue of descending steps.
So, what can you say? The only two people who have used that word have been now the president and Steve Bannon using it to describe the president's son and others in that Trump Tower meeting. I don't think that's at all appropriate for the president to engage in that.
But it is part and parcel for how this president conducts himself.
SCIUTTO: Let's turn now to question of memos relating to FBI surveillance.
Of course, there's the Republican memo that came out on Friday put together by Devin Nunes. There's a competing Democratic memo. The president claims that the Republican version vindicates him, in his words, and demonstrates that the Russia investigation is a witch-hunt.
And yet a Republican colleague of yours on the Intelligence Committee, Trey Gowdy, in fact, the only Republican to see all the underlying intelligence to the memo, he said the following:
(BEGIN VIDEO CLIP)
REP. TREY GOWDY (R), SOUTH CAROLINA: There is a Russia investigation without a dossier. So, to the extent the memo deals with the dossier and the FISA process, the dossier has nothing to do with the meeting in Trump Tower. The dossier has nothing to do with an e-mail sent by Cambridge Analytica. The dossier really has nothing to did with George Papadopoulos' meeting in Great Britain.
It also doesn't have anything to do with obstruction of justice. So, there is going to be a Russia probe even without a dossier.
(END VIDEO CLIP)
SCIUTTO: He of course there was ticking off all the pieces of evidence that you and some Republicans like himself claim that back up this investigation.
But, interestingly, of course, Trey Gowdy is an outgoing Republican. He's not running for reelection. Does it trouble you that more Republicans who are sitting Republicans that are sticking around, in effect, are not criticizing the president's comments?
SCHIFF: It does.
And, look, there's not a lot I agree with Trey Gowdy on. I spent two years on that ill-fated select committee he ran chasing Benghazi conspiracy theories. But I do agree with him here.
And it is clear that this spin memo doesn't discredit Mueller's office at all or investigation, although that is the intention. So, while I appreciate these comments, I would appreciate more, frankly, if had we voted not to release such a distorted memo.
At the same time, the chairman has made it clear this is just part one of an effort to interfere with the Mueller investigation. He intends other chapters as well. So, we may go through this exercise repeatedly, where the Republicans on our committee, as well as on other committees, attempt to do everything they can to get in the way of this probe, which has already resulted in two guilty pleas, two other significant indictments, and that only in a matter of months that Bob Mueller has been working on this investigation.
SCIUTTO: Now, the president wasn't the only one, only Republican, to take a shot at you today.
Listen to what the chairman, your colleague on the House Intelligence Committee, the chairman, Devin Nunes, said this morning about your suggestion that he coordinated that memo with the White House.
Have a listen.
(BEGIN VIDEO CLIP)
REP. DEVIN NUNES (R), CALIFORNIA: Mr. Schiff knows that he is spreading a false narrative there, but that's not new for him. He's spread false narrative the entire time. So, the Democrats were
well aware that I did not leak information. However, for a year, they stayed quiet. They continued. They -- they advocated for my removal from the committee.
[16:15:10] And why is that? It's because we've been successful at getting to the bottom of a lot of real problems with the institutions in our government. So, there's no question they want me gone.
(END VIDEO CLIP)
JIM SCIUTTO, CNN HOST: He is alleging as the president has alleged, that there is a crisis in effect inside U.S. institutions including the FBI. How do you respond?
REP. ADAM SCHIFF (D-CA), RANKING MEMBER, INTELLIGENCE COMMITTEE: Well, look, this is the same chairman who went to the White House to present what he said he obtained evidence from a confidential source of terrible impropriety, unmasking a conspiracy in the Obama administration only to have it revealed that he gotten that information he was presenting to the White House from the White House. So, gee, I wonder why we would think that this is history repeating himself when he refused to answer the answer the question when he was asked in committee about whether again his staff is working in concert with the White House.
But we have seen little interest unfortunately of late. Certainly from the chairman who hasn't displayed an interest in the beginning, but others as well to getting to the bottom of what the Russians did. To looking and investigating the issue of what the Trump campaign did in light of the fact we now know that an approach was made to George Papadopoulos in April of the election year by the Russians who had thousands of Hillary Clinton e-mails. And what Mr. Papadopoulos said about that approach by the Russians, as well as the Trump Tower meeting, the WikiLeaks disclosure, the direct communications between Don Jr., WikiLeaks, between other people associated with the Trump campaign and WikiLeaks.
All of that merits the most serious investigation and instead, what are they doing? They're launching these broad signs against the hard working men and women of the FBI and the Department of Justice.
SCIUTTO: And all those points are points that Trey Gowdy, the Republican, ticked off as well.
Congressmen, please stay there.
A big vote coming up where the House Intelligence Committee will decide whether to release the Democratic version of the memo. We're going to dig in and that's right after this break.
[16:21:26] SCIUTTO: Back with me now, the ranking member of the House Intelligence Committee, Democratic Congressman Adam Schiff of California. Congressman Schiff, in the next hour, in fact, the House Intelligence Committee will vote on whether to release the Democratic rebuttal to the Nunes memo. If it is sent to the House, the White House, rather, the White House refuses to approve declassification, which he has to do, do Democrats have options remaining to make it public?
SCHIFF: We do have other options in which we can seek to make it public. But I would think the White House would be very hard-pressed after saying they wanted the Republican memo to come out in the interests of full transparency, to then censor the Democratic memo. That seems to be unsupportable.
Now, that doesn't mean the White House won't could it. This president seems capable of anything. But I would think the pressure would be absolutely too great. And indeed, when you look at what happened in the House, the Republicans didn't want to release our response but they've been frankly so shamed that now they recognize they have to, even the speaker says it has to be done.
I think that would be the case with the White House. They would look even more like they're trying to interfere with the public getting truthful information. So, I fully expect they're going to have to release it. The concern I do have is they have the power to redact it in a way that takes out information that they feel would be hurtful to their argument, either that there is no collusion or that the Justice Department is engaged in some maligned conspiracy against them.
So, I do worry about the White House censoring this information with a heavy redaction.
SCIUTTO: Let me ask you, because I do remember and this was just a few days ago. There were Democrats as well as the Justice Department and the FBI who were opposed to the Republican memo being released, citing a risk to national security. There would be risked revealed, hints about sources and methods, of gathering intelligence.
Do you or your Democratic colleagues have any of the same concerns about the Democratic rebuttal in effect to the Nunes memo?
SCHIFF: Well, one of the thing that we're doing which the Republicans didn't do, and we had urged them to, is when we send this to the White House, we're going to ask the Department of Justice and FBI to vet this and make sure that there is nothing in our memo would compromise the investigation, or sources and methods.
So, we're taking a responsible path that the majority didn't. Indeed, we gave our memo to the department and the FBI days ago so they could begin the process of vetting the information. In that way, I think we can be assured what we have written won't compromised anything beyond what the majority did through their action.
SCIUTTO: Two of the central -- really the two central allegations of the Nunes memo, one was that the Russia investigation, the Carter Page warrant, based entirely on the dossier, we've heard you contest that. But we just heard Republican Trey Gowdy in effect rebut that as well. But the other was that the Democrats, when the Justice Department and the FBI considered this, the judge, this warrant, the judge was not told that this dossier was the product of Democratic funding. It had, the Steele dossier had the backing of the Democratic Party, et cetera.
I understand you contest that argument as well. Tell us why.
SCHIFF: Well, as you'll see in our response, and I can't go into the details until they're made public, the FBI and Department of Justice did disclose the FISA court that this was likely supported by a political act with political motivation. So that information is contained in the application and I think it is very misleading to suggest the FISA court had no idea. There might be a political motivation at work. That's just one of I think the many misleading aspects of the majority memo that we point out in our response to us so that we can give the public a proper context.
[16:25:06] SCIUTTO: But did the judge know that this dossier was specifically backed up by Clinton campaign money? That the DNC was involved? Or did they just know -- did the judges know generally that there was a political source to this document or political backing, rather?
SCHIFF: You know, I can't get into the specifics until they're declassified by the committee. But I think that the FBI certainly gave important information about bias to the FISA court. There are a lot of reasons why the names -- the specific names of U.S. persons, or U.S. organizations, are not used. And we had testimony about this in the committee.
The majority members know about this. The same people that are complaining about the unmasking of names are complaining now that things weren't unmasked. So, this also going to be in our response memo which we expect the majority is going to have to vote to make public.
SCIUTTO: Congressman Adam Schiff, thanks very much for joining us today.
SCHIFF: Thank you very much.
SCIUTTO: A special agent quits saying that President Trump's attacks could destroy the FBI. I'll ask two former FBI agents about the dangers lurking in the president's language. That's right after this.