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Mueller's Team Asking Questions About Trump's Business Dealings; Paul Manafort in Court for Arraignment; Hope Hicks Admits to Telling "White Lies" for Trump; Jared Kushner Loses Top Secret Security Clearance; Stoneman Douglas Students Make Emotional Return To School; Dick's Sporting Goods Will Stop Selling Assault-Style Rifles; Jared Kushner Loses Top Secret Security Clearance. Aired 9-9:30a ET

Aired February 28, 2018 - 09:00   ET


[09:00:24] JOHN BERMAN, CNN ANCHOR: Good morning, everyone. John Berman here.

Serious surprising questions of credibility emerging overnight about two of the people closest to the president. Serious surprising questions being asked about some of the issues most sensitive to the president.

Executive time might be a bit awkward this morning. The president's communications director admits she sometimes lies. His son-in-law and senior adviser has been barred from top secret intelligence and four countries reportedly believed him to be so compromised that they thought they could play him.

The special counsel now asking questions about the president's business and finances from before he announced his candidacy. The president has declared this a no-go area. But Robert Mueller not just crossing into the red zone but maybe now jumping up and down on it.

And this morning the president's former campaign chair will be in federal court on a new slate of charges from the special counsel. He arrived moments ago. News breaking out all over the place. And we are all over it.

Let's begin with CNN's Abby Phillip live for us at the White House this morning with the special counsel firmly now, Abby, in that no-go zone.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right, John. It appears that the special counsel is now looking at information that extends beyond the 2016 campaign. He's asking questions of witnesses about the president's business dealings as it relates to Russia around the time, years before he was even running for president.

Some of these questions involved the 2013 Miss Universe Pageant that was held in Moscow and also the plans for a potential Trump Tower in Moscow that ended up not going through. All these questions seem to indicate that Robert Mueller is wanting to find out whether Russians might have tried to influence Trump at a time that he was trying to do these business deals and also considering a run for president. Now we also know that President Trump has made it very clear that if

Robert Mueller looked into his personal finances and also the finances of his family, that might be a red line. He said that in an interview with "The New York Times" last year.

But it seems very clear, John, that Robert Mueller is going there and asking these questions of witnesses and trying to flush out whether there were any attempts at that time in his life, as early as 2014 or even before that, that the Russians might have sought to influence Trump before even the 2016 campaign began.

BERMAN: All right. And there are also new questions this morning about the no longer cleared for top secret intelligence, Jared Kushner, the president's son-in-law and senior adviser -- Abby.

PHILLIP: That's right. Jared Kushner now has been downgraded from a top security clearance to one that is lower that does not allow him access to very sensitive information. This is as a result of these new rules changes that Chief of Staff John Kelly put in place last week.

Now all of this is coming as Jared Kushner is under a lot of scrutiny for his contacts with foreign officials. "The Washington Post" reported overnight that Kushner was seen as someone who could be potentially influenced as a result of the fact that his personal finances and his business entanglements were so complex.

Foreign governments, Israel, Mexico, the United Arab Emirates, and others, talked openly about the potential that Kushner could be influenced as a result of these complex entanglements. Now the question is, can Kushner continue to do his job even though he does not have the kind of sensitive security clearance that he needs, that he enjoyed before this moment.

Right now his portfolio includes Middle East peace. And there are some open questions about whether these new restraints will restrict exactly how much he's able to do in his current role.

BERMAN: All right. Abby Phillip, we'll be watching that very, very closely. Thank you so much.

Major developments all over the place. Want to go now to the D.C. federal courthouse. We expect to see actually the former campaign chair for the president, Paul Manafort, arrived just moments ago.

Our Jessica Schneider is there right now. What's the latest, Jessica? What do we expect?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Well, John, this hearing slated to start at 9:30 this morning. You know, this is the first time that Paul Manafort will face a judge alone. Of course his co-defendant in this case, Rick Gates, pleaded guilty on Friday to two counts. So now Paul Manafort is all alone in this particular case brought by the special counsel.

Paul Manafort this morning faces this new superseding indictment that actually streamlined some of these charges. But they are just as serious of course. They include counts of money laundering and false statements. Now in just the past week or so Paul Manafort has faced increasing and substantial pressure.

[09:05:04] That's of course because Rick Gates pleaded guilty on Friday. And then just a few days before that it was the guilty plea of that lawyer, Alex van der Zwaan, who had worked with Paul Manafort. So perhaps the guilty pleas of those two increasing the pressure on Paul Manafort.

You know, Paul Manafort has remained steadfast over the past few days. It was on Friday after that guilty play from Rick Gates that Paul Manafort released that statement, maintaining his innocence and putting it this way. He said that Rick Gates' guilty plea does not alter his commitment to defend himself against what he calls untrue piled-up charges.

So Paul Manafort now in court. He'll be facing the judge at 9:30 alone on that new superseding indictment with several charges including money laundering and false statements. And we understand that at this hearing as well Paul Manafort's lawyers will continue to press for modified bail terms because of course Paul Manafort still under house arrest -- John.

BERMAN: All right. Jessica Schneider at the D.C. Federal Courthouse. Keep us posted as the news emerges from there.

But wait, there's more. White House communications director Hope Hicks admitted to the House Intelligence Committee that she tells white lies for the president.

Our Evan Perez live in Washington with what's going on here -- Evan.

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: John, I think you call them big little lies when it comes from the communications director at the White House. Certainly at the House Intelligence Committee, Hope Hicks declined to answer questions about her time at the White House. But she was able to answer some questions about the transition. And of course one of the big questions that they had from her was when did she learn about that now famous June 2016 Trump Tower meeting where Russians were meeting with Donald Trump Jr. and others trying to allegedly provide dirt on Hillary Clinton.

She said she didn't know about that meeting until reporters started calling. And that would have been me in June of 2017. A few weeks later "The New York Times" reported the story. And she said that she didn't have much of a role in that misleading statement that was issued to "The New York Times" and to the public.

So the question now is, what are the little lies that she says she had now told on behalf of the president. She said there are nothing -- there's nothing substantive, there's nothing related to Russia. But she wouldn't qualify exactly what exactly those types of big little lies, as I call them, that she has told on behalf of the president -- John.

BERMAN: All right. Evan Perez in Washington, a very unusual admission to say the least. Thanks, Evan.

Joining me now is CNN military and diplomatic analyst, Rear Admiral John Kirby, along with legal analyst and former federal prosecutor Laura Coates.

Admiral, I want to start with you because among your many, many jobs, you served as a press secretary in both the Pentagon and State Department. Was part of your job to tell white lies for your bosses?

REAR ADM. JOHN KIRBY, CNN MILITARY AND DIPLOMATIC ANALYST: No, John, not at all. In fact, if I had and anybody had found out that I did, I'd have been fired by the secretary of Defense and-or the secretary of State. When you take an oath for the American people to serve in public office, one of those oaths is that you're going to protect and defend the Constitution. And that means telling the truth. That means being honest both off screen and on screen.

And think about this, John. This is the communications director of the White House. This isn't just some staffer. A communications director. So where is that line between a white lie and something she considers, quote-unquote, "substantive. I think the American people need to know that and we deserve to know that.

BERMAN: Laura Coates, legally speaking, you know, is there a case precedent for white lies? Is there a difference between a white lie and a big lie?

LAURA COATES, CNN LEGAL ANALYST: Well, not if you're Robert Mueller. You've already seen at least two to three people, who've already history tells you if you're lying generally, then you're going to get prosecuted for it, you're going to have a guilty plea. So there's no real semantics-based nuanced argument you can make. It sounds like in her private life as a citizen for Donald Trump's organization, she was the spin doctor perhaps.

That role changes when you're the communications director of the White House and it especially changes if you're talking to the FBI, a chief investigator or even congressmen.

BERMAN: As part of this testimony, apparently she did then say after consulting with her lawyer she has never lied about anything to do with the Russia investigation or having anything to do that. We'll find out. I mean, that's really a crazy admission.

You brought up the special counsel, Laura. I want to stay on that for a minute right now. CNN reporting overnight that Robert Mueller's investigation now focusing on finances and business deals from before the time that President Trump declared his candidacy.

You know, Donald Trump the president has said this will cross a red line. That's his red line, though. It's clearly not Robert Mueller's. What's the significance?

COATES: No. And nor should it be. He is in no position to establish these red lines. It's not herald in the purple crayon, John. He is somebody who is being investigated, his campaign members. And the reason that Mueller is looking into it is because you don't decide to run for president in a vacuum. There are things that predate that decision.

And what Mueller's team is doing is looking back to figure out, is there anything about your decision or about the campaign itself that would have rendered you highly susceptible to undue influence. You can't start that the day that he comes down the escalator with Melania in tow.

[09:10:05] You have to do that before the decision is made, to figure out where are all the pieces here? Was he vulnerable? Was he susceptible? Is there a money trail that make him somebody who would be immune to commonsense rationale with regard to Russia? It's all part of the investigation.

BERMAN: We're waiting to see how the White House and the president responds to this news developing overnight.


BERMAN: All right. Admiral, there is one other giant bombshell, this "Washington Post" story about Jared Kushner. Yes, we know he's had his security clearance reduced, he's no longer clear for top secret information. But "The Post" reports that four countries felt him so compromised that they could play him essentially, play this key senior adviser.

And "The Post" story has three key details I want to read for you right here that H.R. McMaster, the National Security adviser, learned that Kushner had contacts he did not coordinate through the NSC, that the perception of Kushner's vulnerabilities were raised in McMaster's daily intelligence briefing and that McMaster was taken aback by some of Kushner's foreign contacts. Those details, what do they tell you?

KIRBY: Yes. I'm not -- not surprised at all that McMaster would be perplexed and perhaps angry about this. This tells me that he is all -- he, Kushner, is all the more vulnerable to potential counterintelligence moves by other countries. Now they know, John, that his security clearance has been downgraded. So that makes him even more vulnerable to manipulation by them because they can use that to try to feed him -- spoon-feed him information that he might -- can him he's not getting through his own intelligence briefings.

But look, the National Security staff exists for one -- well, for a lot of reasons. But one of them is to help Cabinet officials and senior officials engage on the foreign stage in a measured, deliberate, informed and contextual way. And it sounds to me like Kushner was having those engagements without letting the National Security staff know what he was doing, which means he wasn't as effective and was even more vulnerable because he wasn't being informed by National Security professionals, more vulnerable to manipulation by foreign countries.

BERMAN: The fact that it was raised during McMaster's daily intelligence briefing, does that tell you something about the level of concern inside the National Security community? KIRBY: Absolutely it does. This is the National Security adviser who

is getting I'm sure a very fulsome, comprehensive intelligence brief every morning, and if they're raising it to him, that tells you, A, that they've got a fidelity of information out there, but B, that it is of that concern, so concerning that -- so serious that they have to raise it to the level of H.R. McMaster. And this is very troubling.

BERMAN: And Laura Coates, it's interesting because one of the people speaking most for Jared Kushner right now is his lawyer. Right? He had his security clearance reduced inside the White House. And some of the only statements we've received over the last 10 days had been from the lawyer who's handling his relationship with the special counsel. I just find that very odd. He's now involved in these two, you know, what should be very different roles here. But you can see how one thing is affecting the other.

COATES: You know when your lawyer becomes your spokesman, that you're in a lot of trouble. Because the idea that there's going to be somebody who's going to channel a particular narrative, and the reason is because Mueller is quite powerful in Washington, D.C. He's powerful enough to be the person to say, I'm investigating a whole host of people. I haven't revealed who they are. You may very well be one of them, Jared Kushner.

And so if there are instances where people are concerned about your foreign contacts, your failure to disclose them, and that it may have compromised you in some way, where there's a bulls-eye on your back and a microscope above your head, and that's why his lawyer is involved.

But remember, John, it's extremely important to note, the government and security clearances, they care about credit card debt. That's an issue for people get in national security interest. Your shoe collection may be a problem, let alone the failure to disclose foreign contacts and other things that may be seen as a little bit sinewy.

BERMAN: Laura Coates, Admiral Kirby, thanks so much for being with us. Covered a lot of ground there. I appreciate it.

Two weeks after the massacre, Stoneman Douglas students make an emotional return to their school. Back in class this morning. We're live in Florida.

Plus, minutes ago, a major move by one of the nation's largest sports retailers. Dick's Sporting Goods, the company stopping sales of all assault style rifles in stores.

We're following all the breaking news this morning as major revelations rock the White House. The president's former campaign chair arraigned as we speak in D.C. federal court. Live pictures. We'll have the very latest ahead.


[09:18:21] BERMAN: All right. Happening now, students and teachers who survived the Florida school massacre exactly two weeks ago today, they are now inside their school. Classes are under way.

CNN's Dianne Gallagher is there. Dianne, it has to be a very emotional morning there.

DIANNE GALLAGHER, CNN NATIONAL CORRESPONDENT: John, that's an understatement. The parents of children who were killed were walking to school this morning, hugging students. The police officers from dozens of neighboring departments were here.

As the principal said, it was going to be the highest security they had ever seen. Undoubtedly, that is exactly what happened. They were escorting the kids in. John, I've been texting with some of the kids who were inside the school now, some of the kids I rode up on the bus with last week to Tallahassee.

They said that they started the day off with a 17-second moment of silence. One second for each life lost two weeks ago today in that freshmen building and around the campus during that massacre.

They've kind of described it, John, as weird. That's a word I'm getting the most from these texts. It's strange being back. It's emotional. It's tough for them. When we talked to the kids right before they went in, they told us they were apprehensive about going back to school.


SAMANTHA GRADY, INJURED STUDENT RETURNING TO SCHOOL: I'm hesitant to walk into the building, but I know I have to, to start -- I have to face it head on. At least that's my approach.

CANDY NOVELL, STUDENT RETURNING TO SCHOOL: I'm nervous. I feel the same as her. I'm really scared to go in.

STEPHANIE HOROWITZ, STUDENT RETURNING TO SCHOOL: I'm still in shock from everything that has happened. Going back in to school, I just -- I'm just worried that it's going to happen again.

SAMANTHA FUENTES, INJURED STUDENT NOT RETURNING TO STONEMAN DOUGLAS: I want to be a part of Stoneman Douglas, and I want to live out the rest of my high school career normally, but there's no such thing as normal anymore.


[09:20:08] GALLAGHER: That's it, John. What is normal for these kids anymore? They don't really know. The teachers have told me they don't know what normal is anymore, john. The idea today is not curriculum. It's compassion. The principal -- they're going to all eight of their periods, going to these 20-minute periods. Today, they started school off in the same classes as they did when the shooting happened two weeks ago -- John. BERMAN: Every student is different. Some of the students that I've spoken with, they need to get back to class. Others are just not ready yet. I think the school will be sensitive to everyone's needs. Appreciate you being there, Dianne, thanks so much.

New this morning, the CEO of Dick's Sporting Goods, one of the country's largest sporting goods retailer says the company will stop selling assault-style rifles like the one used in the Parkland shooting.

CNN's Alison Kosik joins me now with the details on this. What have we learned?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You know, this is a prime example of how the kids' voices and its corporate America that you're going to see change happen before I think you see anything happen with Congress.

So, this morning, we're hearing from Dick's saying that no longer will you be able to buy assault-style rifles at its stores. It's taking those weapons off the shelves. Just to be clear, it's the Dick's Sporting Goods stores that actually took the weapons off the shelves years ago after Sandy Hook.

It's the field and stream stores that continue to sell these kinds of weapons, you will no longer be able to buy them there. Also, Dick's announced that you will no longer be able to buy high-capacity magazines and at Dick's stores all around, you have to be 21 or older to buy any gun.

Why is this happening? CEO Ed Stack spoke to Chris Cuomo this morning on "NEW DAY." Let's listen.


EDWARD STACK, CHAIRMAN AND CEO, DICK'S SPORTING GOODS: When you look at those kids and their parents and the grief that everyone is going through, we don't want to be a part of this story any longer. We actually sold the shooter a shotgun in November of last year.

We looked at that and found out that we did this -- we had a pit in our stomach and said we need to -- we don't want to be a part of this story. We need a responsibility to these kids and we decided we are not going to sell these any longer.


KOSIK: It's pretty stunning that Dick's sold a weapon to the shooter at the high school, at Stoneman Douglas High School back in November. This wasn't the gun that he used. It wasn't the type of gun that he used. It was kind of a wake-up call for Dick's to say, listen, we don't want to become part of this story. Let's go ahead and take these off and let's begin being part of the national conversation about how to start to control this.

BERMAN: Dick's saying they're hearing the kids, they're doing this for the kids. Alison Kosik, thanks so much. Appreciate you being here.

Later today, the president will meet with Republican, Democratic lawmakers to talk about the way forward on gun control and school safety. According to the White House, the president still supports raising the age limit to 21 for the purchase of certain firearms. A source close to the White House tells CNN that the president seemed to back off that idea to consider other things that would have a more dramatic effect.

Former Trump campaign chair, Paul Manafort, in court at this moment answering the criminal charges from the special counsel. He is inside. What is emerging from this hearing? We're on top of all the breaking news. Stay with us.



BERMAN: This morning, major developments involving Jared Kushner and the Russia investigation. Here now to discuss, CNN political analyst, Alex Burns, CNN contributor, Salena Zito, and staff writer for "The Atlantic," Natasha Bertrand.

Alex, I want to start with you. You know, we learned overnight from the "Washington Post" not only has Jared Kushner had his security clearance level been reduced, but now there are these countries that think they can play him.

And you know, White house officials are telling "Axios," to quote, "Javanka," that means Jared and Ivanka, "and John Kelly, the chief of staff, are locked in a death match. Two enter, only one survives." A nice thunderdome reference right there. What's the actual implication for how this White House is working right now.

ALEX BURNS, CNN POLITICAL ANALYST: Look, I think it's a very, very sort of colorful thunderdome reference, but we've been hearing this about this White House for a really long time that person x and person y are locked in a death match. Only one can survive.

What we have seen over and over is that actually in this White House, you can have an endless death match in which everybody survives while they're tearing each other apart, right. I think that's what we've seen with the cast of characters you just mentioned.

I think it's what we're likely to continue seeing. You know, a couple of weeks ago, the conversation was about whether John Kelly could even hang on in his job. You know, I'll tell you that talking to Republicans in Washington, the overwhelming expectation right now is that Kelly will hang on in his job and that the move yesterday against Jared Kushner really reflects that Kelly is in a pretty strong position here.

At the same time, he's not a member of the president's family. Getting rid of members of the president's family is something that nobody in this administration has accomplished. BERMAN: John Kelly is a lot of things, but he will never be the president's son-in-law. Natasha, "The Washington Post" also reports that Robert Mueller, the special counsel, has begun asking people about the protocols that Kushner used when he set up conversations with foreign leaders. So, now there's overlap with the Mueller investigation here. Do you think that is an area that will be of hot pursuit for the special counsel?

NATASHA BERTRAND, STAFF WRITER, "THE ATLANTIC": Absolutely. Especially when you look back and think about how Jared Kushner was involved in trying to set up this back channel with the Russian ambassador during the transition period. If you'll recall, he proposed setting up a diplomatic kind of back channel at the Russian Embassy with the Russian ambassador, Sergey Kislyak.

So, these all kind of fit together now. What we're going to be seeing is Mueller is going to be examining whether or not he followed protocol when he was in communication with these foreign officials.