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Trump's Tariff Rush; Trump Upset With Sanders; Kelly Warns Trump; Trump Associate on Secret Meeting; Russia Back Channel; Kushner Visits Mexico. Aired 1-1:30p ET

Aired March 8, 2018 - 13:00   ET

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


WOLF BLITZER, CNN HOST: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 8:00 p.m. in Damascus, 9:00 p.m. in Moscow. Wherever you're watching from around the world, thanks very much for joining us.

The president and the porn star. Why the president is upset with his press secretary over her explanation for the payoff, this as accusations now surface. The president's team is threatening Stormy Daniels to stay quiet.

Plus, a new policy, more confusion. White House staff scrambling to come up with something for the president to sign on tariffs.

But there are new concerns about his plan. And the president reportedly asking at least two witnesses about their interview with the special counsel, Robert Mueller. Does this cross a legal line?

All that coming up. But let's start with the confusion, the controversy over at the White House right now, with a storm cloud hanging over the west wing in the rollout of the president's promised tariffs plan.

The president is, apparently, very upset with his press secretary, Sarah Sanders, over her response to the Stormy Daniels story, and the $130,000 in hush money to the porn star.

But, today, the President tried to get his White House back on track while meeting with his cabinet.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This is Gary Cohn's last meeting in the cabinet and of the cabinet. And he's been terrific. He may be a globalist, but I still like him. He is seriously a globalist, there's no question.

But you know what? In his own way, he's a nationalist, because he loves our country. And where is Gary? You love our country.

And he's going to go out and make another couple hundred million and then he's going to maybe come back. He might come back, right? We'll be here. GARY COHN, WHITE HOUSE CHIEF ECONOMIC ADVISOR: Absolutely.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Another seven years, hopefully. That's a long time. But I have a feeling you will be back.

(END VIDEO CLIP)

BLITZER: Let's go to our Chief White House Correspondent Jim Acosta.

Jim, there's no White House press briefing today, so we won't hear directly from Sarah Sanders, at least from the podium there.

But what more are you learning about how the president has been reacting to her comments on the Stormy Daniels scandal?

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, there certainly is something to report on that.

But just to get back to the tariff issue very quickly, Wolf. We do think the president will be signing some sort of proclamation later on this afternoon to put these tariffs into action. We are told by sources that is likely to happen later on this afternoon.

But as you heard the president say, during that press availability, that there will probably be some carve-outs here, some exemptions for certain countries. And so, we're looking to see the finer details of that later on this afternoon.

But, meanwhile, Wolf, yes, you're right. I did talk to a source close to the White House earlier this morning who said the president is quite unhappy with the press secretary, Sarah Sanders, over her handling of Stormy Daniels and those questions today.

Specifically, about her acknowledgment that the president is involved in arbitration or was involved in arbitration with Stormy Daniels. And that she claimed that the president won that arbitration. That is, obviously, a claim that Stormy Daniels' attorney is pushing back on.

And, according to this source close to the White House, the feeling is that, by the president -- the feeling by the president is that Sarah Sanders injected steroids into the story line.

I will tell you, Wolf, that since we've reported that, and this is no surprise, officials here at the White House have been pushing back on that and saying that the president thinks Sarah Sanders did a wonderful job yesterday.

BLITZER: We're also hearing, Jim, about a warning on the Russia investigation for President Trump from his White House chief of staff John Kelly.

Tell us what you've learned on that front.

ACOSTA: That's right, Wolf. And some of this is in response to "The New York Times" story, that said that the president was attempting to speak to people who have been speaking with the Mueller team. People like the former chief of staff, Reince Priebus.

And also talking to aides about whether Don McGahn should, essentially, change and alter what he has been talking about.

And I talked to a White House official, just a short while ago, who revealed, and I think this is very interesting, that officials inside the west wing -- top officials inside the west wing, including the chief of staff John Kelly, have warned the president to be very careful about talking to witnesses in the Russia investigation. That that could put him in a legally precarious situation.

And that it also just makes people uncomfortable to have the president talking to people about this Russia investigation. And that there is one in particular quote I wanted to read to you. And this is from a White House official.

And it's pretty clear that Kelly, and this is the chief of staff, John Kelly, admonishes him constantly about this, and he's not the only one. This is according to a White House official.

Of course, Wolf, this was outlined in "The New York Times" story. And we're hearing this from a White House official. To have the president of the United States engaging in conversations about all of this is, obviously, something that any lawyer would advise him not to do.

[13:05:01] Now, I will tell you that this White House official I spoke with said, there is probably nothing wrong with the president having a conversation, for example, with Reince Priebus. And just generally saying, well, how did it go? I hope they didn't beat up on you too much.

But there seems to be a concern if the president goes too far and wants to talk about the finer details of what witnesses are saying to Mueller's team. That that could be a problem to the president -- Wolf.

BLITZER: It certainly could be.

All right. Jim Acosta at the White House. Thanks very much.

For now, Stormy Daniels is keeping her story to herself. Her attorney says it's because of ongoing threats from the other side. Listen.

(BEGIN VIDEO CLIP)

MICHAEL AVENATTI, ATTORNEY: These threats continued until only a few hours ago when Mr. Rosen, Lawrence Rosen, the attorney who now purports to represent Mr. Cohen and the entity E.C. LLC. Sent e-mail correspondence to me, threatening that if Ms. Daniels continues to talk, she may be subjected to significant additional damages.

(END VIDEO CLIP)

BLITZER: All right, let's bring in CNN Legal Analyst Laura Coates who is closely studying all of this.

What are the biggest, Laura, unanswered questions from Stormy Daniels' side?

LAURA COATES, CNN LEGAL ANALYST: Well, first of all, if you hear someone say that there's been threats or intimidation that's been used to silence a witness, you think about things like witness tampering and trying to be acting on duress.

Well, one of the questions you have to ask is, has Michael Cohen specifically intimidated or threatened her? Has he done something physical? Is it simply verbal? Or is it what is in the contract, if it's valid, to be able to look at arbitration and use that as a means to silence you as you agreed upon back in October of 2016?

If that's all it is, that's not really intimidation, in a legal sense. That's somebody trying to enforce a contract.

BLITZER: There's more questions you have for her side as well.

COATES: I do. You know, the next question I have is, why did you wait a year to question the validity of the contract?

Remember, there's, really, three things that important in any contract, Wolf. There is either an offer, acceptance and consideration. How that plays out here would be, I'm going to offer you some money to not talk about the alleged sexual encounter with then-private citizen Donald Trump.

OK, I accept your offer. What are you going to give me for it? Here's the consideration. I'm going to give you $130,000. You put it in the account. It's been cashed. And we both operate as if this is a valid contract.

Now, she was aware, back in October of 2016, 11 days before the election, that, Wolf, it wasn't signed by David Denison or purported with the aka Donald Trump.

So, why did you wait a year and a half, act as if it was valid, accept the funds, only to come forward now? A court of law and a court of equity, which the civil courts do, will say, what's the deal?

And the actual question would be that, well, is there any evidence that Donald Trump, or the campaign aide, intended to silence you?

Why is that important? Because we're talking about campaign finance laws. Remember, it's illegal to make a campaign contribution or expenditure that you haven't disclosed, if it's intended to aid the campaign.

And they said in their complaint, Wolf, that, well, it's very clear he knew about it and they were trying to help the campaign. If that's the case, you have a campaign finance issue.

So, what do you actually have to prove that?

BLITZER: And the agreement that she originally made, if she violates it, there is a $1 million penalty she has to pay?

COATES: Yes, a $1 million penalty. Now, that could be per instance of disclosure or it could be more generally treated that it's going to nullify the agreement and here is your one-time fine.

But there's a big question in that because it seems to me people are accusing her of being quite opportunistic. It's waiting for the limelight. It's capitalizing on this moment in time.

So, have you received some other lucrative offers that exceed that penalty, where you're saying, well, I stand to lose a million if I violate this. But I stand to gain millions by disclosing my story to tabloids, perhaps to films, to book deals.

That may be what she's undergone here, if it turns out it's a one-time fee, one-time penalty.

BLITZER: All right, Laura, thank you very much. Laura Coates with that analysis.

Right at the heart of this debate is whether the president knew his attorney paid $130,000 to a porn star. The White House press secretary, Sarah Sanders, was pressed on this by CNN's Jeff Zeleny.

(BEGIN VIDEO CLIP)

JEFF ZELENEY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Did the president approve of the payment that was made in October of 2016 by his long- time lawyer and adviser Michael Cohen?

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: Look, the president has addressed these directly and made very well clear that none of these allegations are true. This case has already been won in arbitration and anything beyond that, I would refer to you the president's outside counsel.

UNIDENTIFIED MALE: You said that there's arbitration that's already been won? By whom and when?

SANDERS: By the president's personal attorneys. And for details on that, I would refer you to them.

UNIDENTIFIED MALE: But you're aware of them, so what can -- more can you share with us?

SANDERS: I can share that the arbitration was won in the president's favor. And I would refer you to the president's outside counsel on any details beyond that.

(END VIDEO CLIP)

BLITZER: All right, let's bring in our panel. Political reporter for "The Washington Post" blog "The Fix" Amber Phillips is with us, reporter for "The Boston Globe" is Astead Herndon, and associate editor and columnist for "RealClearPolitics" A.B. Stoddard. Her answers seem to continue this whole story because, you know, she was basically confirming, in one way or another, that the president was aware of what was going on.

[13:10:04] A.B. STODDARD, ASSOCIATE EDITOR AND COLUMNIST, "REALCLEARPOLITICS": Right, which he's not too pleased about, according to the reporting.

It really was, until yesterday, something that the spokesman for the president were just shutting down. Nothing to see here. He's denied this. We've told you our feelings about this in the past.

She said, yesterday morning before the briefing, you know, this really -- we -- he's denied the allegations. And this was a way to keep it out of the conversation.

What she did yesterday, intentionally or mistakenly, did light a fire. She should have stuck up for the president and said, this has been arbitrated and he won, as if he prevailed and been successful.

Of course, giving way for his lawyer to say -- I mean, I'm sorry, Stormy Daniels' lawyer to say, that's ridiculous. Like he won the popular vote. And make it a much bigger story than it needed to be.

BLITZER: Because the suggestion, instead, is that when she said, yes, he won that arbitration agreement, that he was involved in it. He knew all about it. He knew about the $130,000 payoff and the agreement, the nondisclosure agreement, she signed.

ASTEAD HERNDON, REPORTER, "THE BOSTON GLOBE": Exactly. This is a different playbook than what the White House has usually done, when it's come to these numerous sexual harassment or consensual sexual encounter that have come against the president.

When people have said these claims previously, they have, kind of, shrugged them off. Saying, you know, these issues were litigated during the election or that, in other cases, these women are just baseless allegations. We've seen Vice President Pence call the Stormy Daniels' accusations baseless.

Yesterday was a departure from that. Yesterday was a sense of -- that gave air of legitimacy around them. And even though they were saying that the president won in arbitration, it does raise additional questions of what he knew, what he was involved in. And it a White House official behind that in a way that changes the shape of the conversation.

BLITZER: Because the alleged affair what, what, a decade ago, back in 2006. But the payoff, $130,000 payment to keep her quiet, that occurred only a couple weeks or so before the November 2016 election. And that's raising all the concerns right now.

AMBER PHILLIPS, POLITICAL REPORTER, "THE WASHINGTON POST": Yes. This may be a case where, if Stormy Daniels is somehow able to prove that there was an affair, where the coverup is worse than the crime. To use a law enforcement metaphor. I mean, Republicans, right now in Congress, let me use an example, are, more or less, successfully able to ignore this or duck reporters in the hallways about it.

But if it turns out that the president was involved in either covering up some kind of affair or delivering some kind of hush money or OK-ing his lawyer to do that, that carries with it legal consequences with regard to campaign finance, as Laura explained.

And it also allows Democrats to give an opening, you know, in this election year, to argue that Republicans are hypocrites. Because, of course, they're able to point to an event two decades ago, where Republicans led impeachment proceedings over a president allegedly lying about an affair.

BLITZER: You know, the other story that we're following is, apparently, the White House chief of staff, John Kelly, telling the president, you know, don't ask these witnesses, who go before Robert Mueller and his investigators, how it went. What they asked. That would be totally inappropriate. You've seen these reports.

STODDARD: Right. And in Jim Acosta's reporting, you know, he made the point that just catching up with Reince Priebus briefly and saying, were they nice to you, is fine. Right? That's after the fact. He's already spoken to special counsel. They're, you know, talking about other things and he brings it up.

But this idea that perhaps he was coaching Don McGahn, White House Counsel, to change or alter his story about the prospect of the president firing Robert Mueller or even Jeff Sessions. That really could put him in serious legal jeopardy.

BLITZER: Of course, "The New York Times" suggesting that the president was telling Don McGahn, in effect, to lie. The president did want to fire Robert Mueller. And McGahn said, that's a bad idea. And then, the whole issue of lying comes to the fore right now.

HERNDON: Right. We've seen this numerous times with the president. Is that he is often his own worst legal enemy. When we've had situations, even I think back to the travel ban previously, when he has said one thing, and then contradicted himself later. And that comes up in legal arguments.

And we've had, now, advisors seeing that susceptibility for this president, trying to insulate him from his own mistakes. Saying, don't talk about the Russia investigation with people you are speaking with who may be going in front of House committees or to special counsel.

And the president needs constant reminders for the reporting for that. But, still, to the idea that he would then go above and beyond, above and beyond those warnings. To then talk to his lawyer and tell him to maybe massage or change his statement? That goes beyond some of the white lies that maybe Hope Hicks was talking about that she was a -- was saying about the president. That would be a serious legal consequence. BLITZER: That would not be a white lie.

HERNDON: Right.

BLITZER: If McGahn went out and directly lied under instructions from the president which McGahn obviously did not do.

[13:15:02] And so, where do you see this heading right now?

PHILLIPS: Well, the next big development in this is to see whether Robert Mueller can get the president to sit down with him and talk. It's been reported, and some of Trump's lawyers have gone on TV and said publicly, or his advisers, that they're very nervous about that idea because if you have a president who, as you point out has said -- shades the truth and really struggles with when to be upfront about something and when to give a misleading statement, and doesn't really seem to understand the consequences of the latter, he's sitting down with lawyers that we know have peace together, you know, in key moments hour by hour at some point who was there, who was e-mailing so and so, who was on the call with so and so.

I'm referencing the -- his decision to fire the FBI director, his decision to relay a misleading statement about the Trump Tower meeting with a Russian lawyer. You have just a -- you have a president who is (INAUDIBLE) you know, (INAUDIBLE) very, very capable of piecing together every little thing. That's got to be, I think, the next big struggle for the president if he does sit down with him.

BLITZER: It would be a major, major decision on his part. That's coming up, there's no doubt.

Amber, thanks very much.

Astead, A.B., good discussion.

New details emerging right now on that secret meeting in the Seychelles where the Trump administration and the Kremlin were reportedly -- reportedly trying to set up some sort of back-channel. Senator Jack Reed, the Intelligence and Armed Services Committees, there you see him up on Capitol Hill, he's standing by live.

And right now South Korean officials, they are on their way here to Washington, to the White House, with a message from Kim Jong-un, a direct message to President Trump.

(COMMERCIAL BREAK)

[13:20:52] BLITZER: President Trump's former campaign chairman is in court right now. Paul Manafort is being arraigned outside Washington, D.C., in Alexandria, Virginia -- you're looking at live pictures right now -- on charges stemming from the Russia investigation. Manafort is accused of bank fraud and tax related crimes allegedly involving his political lobbying work in Ukraine. The indictment in Virginia is in addition to the charges filed against Manafort in a Washington, D.C., federal court. He has pleaded not guilty to those charges. Did a Trump associate, meanwhile, lie about a secret meeting that's

now under scrutiny in the overall Russia investigation? Democrats on the House Intelligence Committee say Erik Prince may have misled lawmakers in his testimony before the panel. Prince was grilled about a January 2017 meeting in the Seychelles and whether it was an effort to set up some sort of back channel communications between the incoming Trump administration and the Russians. This occurred during the transition. Prince denied that but may not necessarily have been forthcoming about who was involved in the meeting.

Let's go to our senior congressional correspondent, Manu Raju, who is joining us right now.

Manu, what more have you learned?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, when Prince came before this committee in late November, he was asked extensively about that meeting in the Seychelles Islands, asked about whether or not this was part of a back-channel effort to create this discussion between the incoming Trump administration and the Kremlin. Something he denied furiously over several hours.

And he was told -- he told the committee that he had two separate meetings there, one with United Air Emirates officials, as well as one with a Russian banker who the USA officials suggested that he meet with. He said it was just a business meeting. There was no talk of policy. No talk about a back-channel and the like.

But one thing he did not disclose, Wolf, was there was another person who attended at least one of those meetings. That's George Nader, who is a Lebanese-American businessman, someone with tied to the Trump administration and a Middle East expert.

We are learning from our sources that Nader, in fact, was at one of those meetings. Now, when he was asked about who participated, he did not reveal this. And Democrats now are raising concerns saying, if it's true that Nader was there, and that this was part of an effort to set up a back-channel, perhaps Erik Prince was lying to this committee.

This is what Adam Schiff said just moments ago.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D), RANKING MEMBER, INTELLIGENCE COMMITTEE: It would be my hope that we could have Mr. Nader, special counsel permitting, come before our committee at the appropriate time and that we also have Erik Prince come back before the Intelligence Committee so we can determine which account is accurate.

RAJU: Do you think Erik Prince lied to the committee about the Seychelles meeting?

SCHIFF: I don't know whether the public reports of what Mr. Nader may be saying are accurate or not. All I can say is, if those reports are accurate, there is clearly a significant discrepancy between that version and what we heard in Erik Prince's testimony.

(END VIDEO CLIP)

RAJU: And, Wolf, Schiff also called for Prince to return to this committee, provide more records, answer more questions. And that's something the Republicans are not committing to yet. Mike Conaway, the Republican leading this investigation, declined to comment about Schiff's remarks. And there's a lot of expectation that after Corey Lewandowski finishes his testimony today that this committee investigation will start to wind down. So it's uncertain whether they will -- that Prince will come back or whether Nader will meet with this committee, as Schiff also called for Nader himself cooperating with special counsel Robert Mueller's investigation but Schiff wants to talk to him as well before this committee, Wolf.

BLITZER: Yes, still plenty of unanswered questions.

Manu, thank you very much.

Manu Raju up on Capitol Hill.

Let's stay on Capitol Hill. Democratic Senator Jack Reed of Rhode Island is joining us. He's a member of the Senate Intelligence Committee, the Armed Services Committee.

Senator, thanks so much for joining us.

SEN. JACK REED (D), RHODE ISLAND: Thanks, Wolf.

BLITZER: Let's start with the questions about that meeting in the Seychelles Islands in January, 2017, during that transition, whether it was some sort of effort to set up back-channel communications with Russia. What's the significance, from your perspective, of that?

REED: Well, first of all, it's been confirmed by all of our intelligence agencies that there was active engagement by the Russians in our election in 2016. The question is, was there a direct relationship or a prominent relationship with the Trump campaign and the Russians? And this meeting sort of sticks out because it's in the transition period, and it's a dialogue between someone who was involved with the campaign, the Trump campaign, and a Russian. And, again, now the discovery of this -- Mr. Nader's participation too.

[13:25:31] So this is all sort of -- seems to be leading to the question of -- which Mr. Mueller is considering is, was there any involvement directly with the Russians in the campaign by the Trump top operation?

BLITZER: Because as you heard, the Blackwater founder, Erik Prince, denies that was the purpose of the meeting. But why would the incoming Trump administration need some sort of back-channel communication during the transition before the inauguration?

REED: Well, I don't think that they would have necessarily needed it. And again, this might not be sort of a -- trying to start a back- channel, but just continuing a channel that had already been established. That's the real issue, I think, here.

There are appropriate ways in which you transition. A president-elect can conduct relationships. But the norm typically is you don't really engage particularly through unofficial sources until you're sworn in. That's my general sense of the way the procedure should work.

BLITZER: Let's get to another sensitive issue. A White House official now says John Kelly, the White House chief of staff, has warned the president about talking to witnesses in the Russia investigation. This follows a "New York Times" report that President Trump asked two witnesses about their conversations with Robert Mueller's team. Does that cross a line?

REED: Well, it does get very, very close to a line because it's not just trying to find out information, it's -- as they would say in the Army, it might be, you know, undue command influence, i.e. sending the message, not just to those that may have been questioned, but those that would be questioned in the future that what they say would be commented upon or they be queried by the president. That's not a good practice. I think John Kelly's advice is sound advice.

BLITZER: The White House senior adviser, the president's son-in-law Jared Kushner, as you know, he's been in Mexico City. He met with the president of Mexico. Despite having his security clearance downgraded from top secret to secret on an interim basis. An outgoing career diplomat with 30 years' experience in the region was not on the trip. The outgoing U.S. ambassador to Mexico was not in that meeting. There's some confusion, at the same time, exactly about what the president's going to do about tariffs involving Mexico and Canada.

Here's -- a lot of people are asking, where is the secretary of state, Rex Tillerson, in all of this right now? He seems to be, on these sensitive issues, MIA.

REED: Well, I think it's not just the secretary, it's the entire State Department. And it seems that this is not just accidental. There's so many vacancies, diplomats.

I was in Jordan a few weeks ago. There's no ambassador in Jordan. In fact, Mr. Kushner showed up there, apparently went to the -- see the, King Abdullah, without any real support from the embassy.

And this ad hoc diplomacy is not good at all and it's not just one place or one issue. It seems to be consistent. We don't have an ambassador in Somalia. I was visiting there. That's a place where we have troops in contact. We don't have an ambassador in Libya. We don't have an ambassador to Turkey.

So this is not just a, you know, one issue. This is a department that I think has been deliberately undercut. And that will not help us. We can't conduct the business of diplomacy in the United States on a one- off basis, ad hoc meetings by people who, frankly, may be well- intentioned but are not well-informed or experts in the area.

BLITZER: Yes, there's still no U.S. ambassador to South Korea either and we know how sensitive the Korean peninsula is right now. But, you know, you're a former U.S. Army Ranger. You know a lot about classified information. Can a special U.S. envoy, like Jared Kushner, really go into meetings with a leader like the president of Mexico or King Abdullah of Jordan or go to China, deal with Israeli-Palestinian peace process without access to top secret information?

REED: I think it's very difficult.

First of all, he can't be briefed at a level that will allow him to make a very good judgment about what people are telling him. When he's sitting down with a foreign leader, he has to be able to have the whole context, he has to know more, hopefully, than the individual knows so that he can make a real judgment. He -- his contribution can be, you know, focused. So, without this, he can have a conversation, but it does not have the effect of someone who is fully briefed and fully vetted to know everything we know about the situation.