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House Oversight Investigating Porter Scandal; John Kelly's Job in Jeopardy?; Trump Lawyer Claims He Paid $130K Of Own Money To Porn Star; Soon: Senate Kicks Off Debate On Immigration; Markets Open Amid Inflation Concerns. Aired 9-9:30a ET

Aired February 14, 2018 - 09:00   ET


[09:00:16] JOHN BERMAN, CNN ANCHOR: All right. We do have breaking news this morning. What could be a major development surrounding the controversy over Rob Porter, the key White House aide who was either fired or resigned after domestic abuse allegations surfaced. What did the White House know? When did they know it?

This morning we just learned that Congress is investigating. CNN in this exclusive interview just heard from the chairman of the House Oversight Committee, Trey Gowdy. Listen to this.


REP. TREY GOWDY (R), CHAIRMAN, OVERSIGHT AND GOVERNMENT REFORM COMMITTEE: Who knew what when and to what extent? And if you knew it in 2017, and the bureau briefed them three times, then how in the hell was he still employed?

ALISYN CAMEROTA, CNN ANCHOR: Will the Oversight Committee be launching an investigation into this?

GOWDY: We did last night.


BERMAN: "We did last night." Congress now investigating. Add that to the swirling rumors and reporting overnight, Abby Phillip, that the chief of staff could be in jeopardy. Talks about replacing General John Kelly now heating up.

Abby Phillip at the White House.

Abby, what are you learning?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Good morning, John. Well, the pressure is certainly building on White House Chief of Staff John Kelly who has been at the center of this controversy, in part because of his decision to allow Rob Porter to stay on in his role despite these allegations.

Now we have heard from sources that there is chatter building around this White House about possible replacements. Some of these names are people who are fairly familiar, people who the president talks about in private conversations. They include folks who are in this White House right now.

National Economic Council chairman Gary Cohn is one name that has been floated around as is Office of Management and Budget director Mick Mulvaney, another person who already has multiple hats being worn right now. He also is the acting director of the Consumer Financial Protection Bureau.

And then there is the possibility that the House Majority Leader Kevin McCarthy might be tapped to fill that role. But all of this happening even while the White House says -- Sarah Huckabee Sanders told CNN this morning that the president still has confidence in John Kelly.

Now the John Kelly rumors are not going away, in part because there is an expanding dispute over whether or not the White House told the truth about the timeline here. This all came to a head yesterday when the FBI director Christopher Wray was on the Hill. He testified under oath and he said that he actually briefed the White House three separate times in 2017 about Rob Porter's file.

We're going to put up a quick timeline here to show you how these accounts differ from the White House. The White House claimed that a lot of this came to a head in the last week, that they heard about it when the "Daily Mail" was about to publish the reports. But according to Christopher Wray the FBI submitted a partial report on Porter in March of 2017. They finished their investigation, submitted a final report in July of 2017.

They were asked for more information so they came back to the White House in November of 2017, and finally closed their file in January of 2018. Meanwhile, in the last week John Kelly has been telling people inside and outside of the White House that within 40 minutes of seeing these images of a battered ex-wife of Porter's, he moved to remove Porter from his role.

We know, however, that that was simply not the case. The White House continued to defend Porter publicly and privately. And also sources tell us that John Kelly was aware of these abuse allegations for months before he acted.

BERMAN: All right. Abby Phillip for us at the White House.

Abby, thanks so much.

Joining me now CNN political analyst April Ryan and Bianna Golodryga, CNN contributor.

Bianna, you know, just this morning we got the news from the House Oversight chair Trey Gowdy, Congress is investigating. This is Trey Gowdy, you know, conservative Republican ally at times of the White House, he will now be looking into this. This does raise the stakes.

BIANNA GOLODRYGA, CNN CONTRIBUTOR: It does. A lot of pressure, though, on this committee. Remember Elijah Cummings last week said that I had been trying to get this committee, specifically Trey Gowdy, to give us more information on security clearances and how that process works. He said that they had been stonewalling. So clearly Trey Gowdy under pressure and that committee under pressure as the country continues to raise questions as to how this type of information was allowed to be delivered to people who did not have security clearances, people who are very close to the president.

And the president, meantime, we're not hearing from him. A lot of people speculating that it's because it's not only Rob Porter who didn't have a security clearance to this sensitive information. Obviously it's Jared Kushner as well. So if the president is going to be speaking out about Rob Porter, what does that say about Jared Kushner?

[09:05:01] BERMAN: And April, when you hear Trey Gowdy say he wants to find out who knew what, when, those are the questions that have tripped this White House up for eight days now. They can't get their story straight. And when they do give a story, it's directly contradicted by the FBI.

APRIL RYAN, CNN POLITICAL COMMENTATOR: This is a major movement. You know, you hear Congressman Elijah Cummings who is a Democrat say things. But for Trey Gowdy, a Republican -- conservative Republican, say this, and not only that, remember he was the one who was out front when it came to those classified e-mails of Hillary Clinton. So once again, you're dealing with this time, this administration, dealing with someone who had an interim clearance that gives you limited access.

From what I'm hearing from my sources, that interim security clearances are for limited access. You're not supposed to be able to see classified or top secret information. Now this has been going on for months. And again, my sources have been telling me if indeed this position, this post that Rob Porter was in was a priority for the president, he would have been one of the top people who could have gotten his clearance earlier. So he did not.

Sometimes when it comes to those top priority -- prioritized persons, it happens in a matter of weeks, maybe a few months, not this long. And, you know, right now they're using General Kelly as a scapegoat. But this happened during Reince Priebus. So this started during Reince Priebus. He should have had -- if things were clear, he should have had his security clearance just within the few months, the first two or three months if he was a priority.

It should not have gone this long. And to be able to touch these documents, these top secret and classified documents with that limited security clearance, and it's not just Jared Kushner. There are other people who have this.

BERMAN: Right.

RYAN: And they are touching things possibly. So this is not just -- this doesn't stop here. There's a domino effect.

BERMAN: Well, I think it's clear this morning it doesn't stop here because we now know three key things. Number one, the House Oversight Committee, Trey Gowdy, says it is investigating. Number two, the FBI director Christopher Wray seems quite willing to lay down a clear marker of what the FBI did and didn't do. He did that in testimony, sworn testimony yesterday. And number three, Molly Ball, and this gets very interesting, the White House clearly -- the White House staff clearly is incompetent with the story that they're telling right now. The people speaking publicly are making clear that they're just not sure which end is up.

Our friend, Maggie Haberman, has this stunning quote. She says several White House officials are now prefacing or concluding their sentences in convos with reporters by making clear they can't swear by the information that they have just given. That's extraordinary if White House officials are telling reporters, you know, I can't be certain if I'm telling you the truth.

MOLLY BALL, CNN POLITICAL ANALYST: Absolutely. I mean, it's a welcome caveat after so long of them pretending that they knew things, that we knew were either not true or that they had no basis for. But look, this has just been a symphony of buck passing. Right? Everybody in this situation is trying to cover their ass. Nobody really I think knows the truth. A few people know the truth. But that's not their primary concern. Their primary concern is saving themselves or making themselves look good.

Rob Porter is already out. So now we're just trying to figure out who to blame and that's the concern of everybody in the White House. But as April is saying, there are bigger implications to this. And the implications that are going to last after the departure of Rob Porter are this situation about clearances and about paperwork, all the stuff that we have known for months, that the White House, you know, ran rough shot over these rules about vetting and filling out forms that they thought were dry and boring bureaucratic nonsense, and didn't seem like that sexy a story.

These are the consequences. The consequences are situations like Porter. The consequences are situations where privileged national security information is in all kinds of hands of people who are not necessarily qualified to see that information.

BERMAN: You say there are questions about paperwork and security clearances. All those questions have a name, right? It's Jared Kushner. I mean, honest to God, I mean, that seems to be the overarching looming giant issue hanging over this. You know, if you address this head on, how does it affect the president's son-in-law? It can get very uncomfortable, very quickly.

Bianna, I guess I want to bring up another thing. We were talking about the top-down issue with the president and General Kelly. We don't know if he'll fire John Kelly or not. He always calls friends and asked about replacing people. But we do know from the bottom-up there is serious concern about John Kelly right now.

If you look at "The Washington Post" there are these quotes from White House officials. Let me read just one here. "Kelly is a big fat liar," said one White House official who spoke on the condition of anonymity to share a candid opinion. "To put it in terms the general would understand, his handling of the Porter scandal amounts to dereliction of duty." If that's what people under you are saying, can you effectively do

your job?

GOLODRYGA: Look, you can argue that this is an opportune time for those who are against General Kelly and who wanted to see him out, to come out and speak the way they are right now because remember, he was able to come in and sort of isolate a lot of people from the president and to keep the president focused on speaking to those that he only needed to speak to as opposed to everyone else.

[09:10:15] There's sort of an open door policy in the White House. But on the flip side, I mean, going back to the number of sources, that's not new that we're seeing from reporters, the number of sources coming out and leaking. What is unique is what we saw even from Sarah Sanders yesterday, herself seeming to distance herself from General Kelly and saying, listen, I'm only telling you what I know and the information I've been given. I'm not even sure -- you know, given all of the information. But what I'm giving you is the truth.

So that was something that we heard for the first time but it's also interesting, I mean, the buck stops with the president. We have not heard from him on this issue in over a week now. I mean, there's been a lot of criticism about General Kelly --

BERMAN: Except to defend Rob Porter.

GOLODRYGA: Except to defend Rob Porter. But when it comes to the president who was so quick to fire people on a reality show, it's seemingly difficult for him to do so while he's in the White House.

BERMAN: Look, we hear from him twice today. One of the events is this afternoon, an event that deals with sexual abuse. We will see if he chooses to speak then.

April, Bianna and Molly, stand by for a moment here because we have some breaking news we need to get to.

The FBI as well as local police are investigating a shooting at Ft. Meade in Maryland. This is where the National Security Agency is headquartered. You can see live pictures there. Authorities say it happened at a vehicle gate. There were bullet holes in the front window of a black SUV that appears to have crashed into that concrete barrier.

Our affiliate WJLA reports that three people were shot. The NSA released a statement saying the situation is now under control and there is no ongoing threat. The White House says the president has been briefed on the situation and thoughts and prayers are with everyone affected.

We will bring you more information on this as it comes in.

In the meantime, the president's attorney, any other day this might be a lead. The president's attorney admits he paid off a porn star six figures from his own pocket. Why might he do that? That's a very legitimate question you might ask today. Plus, Shaun White wins Olympic gold for the first time. This time the

moment tarnished by sexual harassment allegations.


SHAUN WHITE, OLYMPIC GOLD MEDALIST: You know, honestly, I'm here to talk about the Olympics, not, you know, gossip.


BERMAN: We're going to speak to one of the reporters, one of the female reporters at that press conference. Spoiler alert, she was not called on.



BERMAN: Breaking overnight, President Trump's personal lawyer, Michael Cohen says he paid $130,000 out of his own pocket, he says, to adult film actress, Stormy Daniels, just weeks before the 2016 election.

Daniels once claimed she had an affair with Donald Trump. Cohen says he made the payment totally on his own, was not reimbursed by the Trump campaign, or the Trump organization.

Let's get to our M.J. Lee in Washington. Michael Cohen says there was no affair between Donald Trump and Stormy Daniels. So why make the payoff?

M.J. LEE, CNN NATIONAL POLITICS REPORTER: Yes. This, John, remains one of the strangest stories out of the 2016 campaign. Just to very quickly recap what we have been reporting on this story is it's that Trump and Stormy Daniels had some kind of affair back in 2006.

And that in 2016, Michael Cohen, his lawyer, set up an LLC and paid using that LLC $130,000 to Stormy Daniels to keep her quiet about this affair. Now, both Cohen and Stormy Daniels have denied that such an affair took place, but they have been less forthcoming when it comes to the issue of this payment.

But now Michael Cohen is saying that he did make this payment of $130,000 and that it was his own money. He says in a statement to CNN that the Trump Organization was not involved, the Trump campaign was not involved and that neither paid him back for this money. He suggests that this was not any kind of a campaign contribution.

Now, on the question of why if there was no affair he would have made this payment, here is that statement, he says, "Just because something isn't true doesn't mean that it can't cause you harm or damage. I will always protect Mr. Trump."

So, essentially, John, Cohen is making the point that out of loyalty to his client, to President Trump, he used $130,000 of his own money to pay this woman. But again, unclear why he had to make this payment if he insists that there was no affair.

BERMAN: Is it clear whether or not the president or the then Candidate Donald Trump knew about this?

LEE: Well, our friend, Maggie at "The New York Times," who broke this story, she notes in her story that she asked several questions to Cohen that he didn't answer. One of those questions is was Trump aware of this payment?

And I think it's important to obviously keep in mind that for Trump's allies, the incentives are many, to try to make it seem as though Trump has very little knowledge to no knowledge about this payment.

BERMAN: M.J. Lee, thanks very, very much.

I want to discuss the legal side of this. Joining me now CNN legal analyst, former New York City prosecutor, Paul Callan. Counselor, thank you so much for being with us. Let me read you the statement from Michael Cohen.

"Just because something isn't true doesn't mean it can't cause you harm or damage. I will always protect Mr. Trump." Is it normal for a lawyer, Paul Callan, out of the goodness of his own heart, out of his own pocket to pay more than $100,000 to protect his client?

PAUL CALLAN, CNN LEGAL ANALYST: I've heard of Secret Service agents offering to take a bullet for the president, but I've never seen a lawyer willing to do that. No, it's not usual for a lawyer to do something like this. I would go so far as to say it's completely unheard of, to make such a $130,000 payment.

[09:20:08] Now, of course, we don't have all the facts in the case. Maybe Michael Cohen had some reason to pay Stormy Daniels $130,000, but certainly it looks like a contribution being made on the president's behalf.

BERMAN: We don't have all of the facts, but we have one hell of a fact, which is that now that Michael Cohen admits he paid Stormy Daniels, this adult film actress $130,000. Another fact is it was right before election day. You said you think he broke a campaign finance law.

There is some case law now that deals with something not completely dissimilar here, it has to do with John Edwards and whatnot. John Edwards was not found guilty.

CALLAN: That's right. John Edwards is a good example of how this has been handled in the past. He was indicted, in fact, for payments that were made to a mistress who later bore a child for him, went to trial, and he was acquitted by a jury because the jury found that the prosecutors couldn't prove it was a political contribution as opposed to a personal contribution.

But Cohen's situation here is different in that Cohen works for the Trump Organization. He's been a Trump loyalist for a very, very long time. So, you would have to look to see were taxes paid on it, was some kind of a deduction made? Even if it was a gift by Cohen to Stormy Daniels, there would be a gift tax that would be payable. As I say, there are a lot of facts that we don't have.

BERMAN: We just got a statement from Stormy Daniels' attorney. The attorney who represented Stormy Daniels, Stephanie Clifford, that's her real name in the transaction with Donald Trump's attorney, Michael Cohen tells CNN, he was informed the $130,000 payment to his client came from Cohen's own personal funds.

Attorney Keith Davidson tells CNN's Chris Cuomo via e-mail that the assertion of the source of $130,000 payment was from Cohen's personal fund is in complete harmony with what he informed me at the time of the transaction. I'm not even sure that matters at this point.

So, it came from Cohen's personal account. One question Cohen hasn't answered directly. He said he wasn't reimbursed by the Trump Foundation or the Trump campaign. It doesn't say whether Donald Trump handed him a wad of cash out of his own wallet. We don't know that.

CALLAN: Well, we also don't know if Michael Cohen will get a $130,000 bonus next year for extraordinary work he does for the president or the Trump Organization. So, there are a lot of ways that Cohen could be compensated without there being a provable path back to the president.

But what's fascinating about this is, it's a crime to lie under oath. It's a crime to lie to the FBI, but it's not a crime to lie to the press. If Cohen is being untruthful about this, as long as it's not under oath or to the FBI, he may not be committing a crime of any sort.

BERMAN: Paul Callan, thank you very, very much.

All right. We are watching the opening bell very closely. It's just moments away. Futures are down triple digits. Some inflation news out just this morning that will not make investors happy.



BERMAN: You're looking at live pictures right now of stock futures. Investors discuss some unsettling news about inflation. We will bring you the market open when it happens. It could be especially rocky today.

In the meantime, in one hour, the immigration debate kicks off in the Senate. The status of some 11 million undocumented immigrants and the future of legal immigration hangs in the balance.

Here to discuss, Democratic Congressman John Yarmuth of Kentucky. Congressman, thank you so much for being with us. An early apology to break away when the market opens, but I think we're in for a heck of a morning here.

Congressman, on the immigration debate, it's day three now of a week where there was supposed to be this open discussion of immigration in the Senate. It hasn't even started yet. Are you confident in the process over there?

REPRESENTATIVE JOHN YARMUTH (D-KY), RANKING MEMBER, BUDGET COMMITTEE: Well, I'm not confident. As a matter of fact, I commuted with Mitch McConnell on Monday and we were talking about it. Mitch said he had no idea what was actually going to come out of it. It's a very, very important precedent to set.

I think it's a good process and an open process. I think it will test both sides as to how much motivation there really is to solve this problem. I was on the Gang of Eight that dealt with immigration reform in 2013.

I know there's a bipartisan solution out there because we actually reached one that never crossed the finish line. I think both sides negotiating in good faith can get it done.

BERMAN: Good faith is the key here. You say --

YARMUTH: Exactly.

BERMAN: I believe you're Mitch McConnell's congressman among other things. A week is now down to two days. Do you trust Mitch McConnell to keep his word on this?

YARMUTH: Well, I trust Mitch to keep his word. For all I know he is -- he needs to be very much engaged in talking with these various people proposing different approaches and see if they can get to one or two that can actually get to the floor and garner 60 votes. I'm sure there's a deal out there. I'm totally convinced there is.

BERMAN: All right. Congressman, if you will, stand by for just a moment. I want to pick up this discussion in a couple minutes. In the meantime, I want to bring in CNN's chief business correspondent, Christine Romans, to join me for the opening bell. Less than 30 seconds away. Romans, the reason why it could be a rocky morning is some inflation news that just came out.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Look, we heard from the government, the consumer price inflation in January rose 2.1 percent compared with a year ago. That's a little hotter than economists had thought. People paying more for things like clothes, auto insurance, health care, rent, gas. These are things you pay every day, and the prices going up a little bit more than economists had expected.