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EARLY START

Facebook Sheds $37 Billion Over Data Controversy; Trump And Mueller Attorneys Meet Face to Face; U.S.-South Korea Military Drills Begin April 1st; Twenty-Three Expelled Russian Diplomats To Depart London. Aired 5:30-6a ET

Aired March 20, 2018 - 05:30   ET

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


[05:30:40] (BEGIN VIDEO CLIP)

CHRISTOPHER WYLIE, WHISTLEBLOWER AND CO-FOUNDER, CAMBRIDGE ANALYTICA: I'm probably the only gay guy in London that had a membership card to a strip club. It will do whatever it takes to get -- to get a contract.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: Sex workers, entrapment, and global propaganda. An undercover report shows Cambridge Analytica execs outlining dirty election tactics.

When will Mark Zuckerberg go public about Cambridge sharing Facebook data of some 50 million users?

CHRISTINE ROMANS, CNN ANCHOR: The president's legal team sitting down for the first time with the special counsel's lawyers. Now, the president bringing in a flamethrower attorney who publicly declares the DOJ is framing this president.

BRIGGS: And overnight, Harvey Weinstein. The company lifting all non-disclosure agreements with Harvey Weinstein. So the question is how many more women are ready to come forward with abuse allegations?

Welcome back to EARLY START, everybody. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It's 31 past minutes past the hour this Tuesday morning and the crisis at Facebook is intensifying after it failed to protect user data.

CEO Mark Zuckerberg is still missing in action. It has been days since news broke that a firm tied to President Trump's campaign, Cambridge Analytica, accessed data to 50 million users. So far, Zuckerberg has been silent.

The story has cost him dearly, about $5 billion so far. That's because Facebook shares fell sharply yesterday, down seven percent, shaving $37 billion off Facebook's market value, sparking both the S&P 500 and the Nasdaq's worst day since February.

Investors think stricter regulations for Facebook have got to be more likely now. It faces tough questions on how it protects user data from being exploited.

"The Washington Post" reports thousands of developers siphon data every day. It's a business model, right? Everything from games like Farmville to the dating app Tinder. But unlike those firms, Cambridge Analytica broke Facebook's rules by claiming the data was for academic use. Now, Cambridge Analytica says it has deleted all the user data, agreed to a forensic audit.

But this latest crisis is a new threat to Facebook's reputation, already tarnished for allowing Russia to manipulate its platform during the 2016 election. And the whistleblower from Cambridge Analytica told CNN's Don Lemon he's worried they contributed to that.

(BEGIN VIDEO CLIP)

WYLIE: I am concerned that we made Russia aware of the programs that we were working on and that might have sparked an idea that eventually led to some of the disinformation programs that we've seen and the interference that we've seen from Russia in American elections.

DON LEMON, CNN ANCHOR, "CNN NEWSROOM": Yes.

WYLIE: So for me, I'm concerned about that, and if I played some kind of role in that I feel like it is my duty to tell people about it.

(END VIDEO CLIP)

ROMANS: Meanwhile, an advocate for a strong approach to Russia plans to leave Facebook. That is Facebook's head of security, a guy named Alex Stamos. In a tweet, Stamos did not deny leaving but promised he is still fully-engaged with his work at Facebook.

BRIGGS: Further adding to the intrigue here, an undercover report by Channel 4 in Britain. A hidden camera showing senior Cambridge Analytica execs talking about how they could use bribery and entrapment to dig up compromising material on their client's political opponents.

For more, let's join CNN's Isa Soares live in London this morning. Good morning, Isa.

ISA SOARES, CNN INTERNATIONAL CORRESPONDENT: Good morning to you, Dave.

An extraordinary undercover expose by Channel 4 which aired late last night here in the U.K. A channel 4 reporter went undercover posing as a potential Sri Lankan client seeking the services of Cambridge Analytica -- the offices just behind me here -- in terms of trying to win upcoming elections.

Then in over a series of meetings with senior executives from Cambridge Analytica, including its CEO Alexander Nix, they went on to really outline some of those services they could provide. Let's call it dirty tricks that they had in order to win -- in order to swing elections, and some of the services they said they were willing to provide including using honey traps sending in beautiful Ukrainian women, they said, to operate a sex sting.

Also, bribing officials to discredit politicians. They said they could send in someone who is a property developer to offer money to a politician in exchange for land. They would film that and use that to discredit the politician.

[05:35:00] But also, they talked about promoting fake news. It doesn't have to be true, it says, it just has to be believed.

For its part, Cambridge Analytica said that this whole Channel 4 report was edited and wholly misleading -- Dave.

BRIGGS: More questions than answers at this point. Isa Soares, thanks so much for that report.

Meanwhile, attorneys for President Trump meeting face-to-face for the first time with special counsel Robert Mueller's team. The two sides sitting down last week to hash out which topics investigators could cover with the president.

Now according to sources, Mueller's team added specifics to the topics already discussed, like the firing of former FBI director James Comey.

ROMANS: The meeting makes it clear the investigation is nowhere near ending. President Trump hiring a new personal attorney who has claimed the president is being framed by a group of FBI and Justice Department officials.

(BEGIN VIDEO CLIP)

JOSEPH DIGENOVA, NEW PERSONAL ATTORNEY FOR PRESIDENT DONALD TRUMP: A brazen plot to illegally exonerate Hillary Clinton and if she didn't win the election to then frame Donald Trump with a falsely created crime.

(END VIDEO CLIP)

BRIGGS: Wow.

Trump attorney Jay Sekulow confirms Joe diGenova is joining the legal team. It's expected he'll engage with the media and actively defend the president in the Russia investigation.

Overnight, "The New York Times" reported the president has discussed dismissing White House lawyer Ty Cobb and that the president's lead personal attorney John Dowd has considered leaving because he can't control Mr. Trump's behavior.

Fellow Republicans warning the president not to fire the special counsel. It's been largely Republicans, of course, that are not running for reelection. You talk about Orrin Hatch, you talk about Bob Corker, you talk about Jeff Flake.

Lindsey Graham really the strongest voice warning the president not to do this, that's not running for reelection. Maybe the sole. ROMANS: All right. Joining us this morning, CNN political analyst David Drucker, senior congressional correspondent for the "Washington Examiner." Good morning.

What does this new attorney -- personal attorney with very deep state inclinations -- what does it signal to you about the president's response here?

DAVID DRUCKER, CNN POLITICAL ANALYST, SENIOR CONGRESSIONAL CORRESPONDENT, "WASHINGTON EXAMINER": Well, the interesting thing here is whether or not President Trump is going to deploy Mr. diGenova out into the media to make his case and allow him to do that for him rather than spend so much of his time constantly berating the Russia investigation and as we saw over this past weekend, going after Mr. Mueller personally.

There's nothing wrong necessarily with defending himself. I think it's the manner in which the president goes about that could be politically problematic, at least for Republicans who are running for reelection this year.

BRIGGS: You write about that in the "Washington Examiner" David, and you say the president confirming House Republicans' worst fears about the depth of their midterm woes. How so and why?

DRUCKER: Well look, for Republicans to beat what are historical -- what are traditional midterm headwinds when the -- you know, when the party -- when you -- when your party is in control of the White House and you're running in Congress, you're just going to have some headwinds. That's usually how this thing works.

I think the president has exacerbated that by his -- you know, what many voters feel is his polarizing leadership. And even though he might be helpful to Republicans in the Senate because of the map and the kind of states that are up, for the House it's a 23-seat majority. Most of it runs through suburban battlegrounds where you have a lot of voters inclined to vote Republican but they're not inclined to support Trump.

And when he spends so much time talking about the Russia investigation and kind of doing what he does on Twitter it really rubs them the wrong way.

What Republicans were hoping for to counteract that is that the president and them, in unison, would be focused on the economic indicators that are looking so much better.

BRIGGS: Right.

DRUCKER: That they would tie it all to the tax bill and say look, you may not like Mr. Trump all that much but look at what he's delivering. Look at what we're delivering together and then they can -- they could use that dynamic --

BRIGGS: Right. DRUCKER: -- to hold onto their majority. And that's why what they've seen from the president in recent days is going to be very, very problematic.

ROMANS: I wonder about the tariffs.

BRIGGS: Right. That's the other --

ROMANS: We're hearing reports the president wants -- you know, they're preparing $30 billion in tariffs for China and the president said no, double that. You know, that's -- there's some of the reporting out there.

BRIGGS: To $60 billion, yes.

ROMANS: And I wonder if they undermine some of the goodwill that the tax cuts by going after China like that. And I also -- I also wonder about just the idea that tax cuts are going to resonate with regular voters because it didn't in Pennsylvania 18.

DRUCKER: Well, it's complicated. So I think you're correct to look at the tariffs and talk about whether or not that's going to confuse the economic message.

I don't think it's so much targeting China. I think most Americans believe that China doesn't always play fair and if -- and if President Trump's -- the whole of his proposal was to crack down on China, I think that might work.

I think the problem is that when he introduced, a couple of weeks ago, his plans to slap tariffs on all countries on steel and aluminum he introduced it as a necessity because we're still hemorrhaging jobs and we're being taken advantage of.

[05:40:08] And in messaging it's either going to be one or the other. Either things are looking up and everything's great because of the tax bill --

ROMANS: Right.

DRUCKER: -- or our economy is still being weighed down --

ROMANS: You can't have it both ways.

DRUCKER: -- and not creating enough jobs and people are still hurting. I mean, so it's pick one.

So if you want to target China, I think you could talk about that as a part of a sort of geopolitical positioning for the United States. But if the economy is doing so poorly that you need to talk about tariffs, then you're not talking about how great it is because of the tax bill.

And look, then underneath all of that is, is the tax bill resonating? What we saw --

BRIGGS: Right. DRUCKER: -- in January and February was that people were feeling a lot better about the tax bill. I mean it was reaching over --

ROMANS: Yes.

DRUCKER: -- 50 percent in terms of its positive image. It's unclear if that's going to continue, especially when you have the Democrats that are going to criticize it.

BRIGGS: That wasn't the case in Pennsylvania 18 and we're hearing whispers of tax cut part two.

ROMANS: Yes.

BRIGGS: Maybe that was an --

ROMANS: Corporate welfare is how it resonated in Pennsylvania.

BRIGGS: I don't think there's any appetite for the tax cut.

David Drucker from the "Examiner." Good to see you, my friend.

DRUCKER: Thanks a lot.

BRIGGS: All right, winter going out like a lion. Reported tornadoes in the south. Another nor'easter with nearly a foot of snow perhaps in store for New York City. The forecast, next.

(COMMERCIAL BREAK)

[05:46:07] BRIGGS: Five forty-six eastern time.

A possible tornado touching down in Jacksonville, Alabama injuring at least one person and trapping others. At Jacksonville State University, campus police spent the night going room-to-room as resident halls checking on students. The storm damaged roofs as well as the campus sports coliseum.

ROMANS: Power outages reported in Alabama and Georgia. The storm part of a larger system moving north, due to turn into another nor'easter tonight into tomorrow. Spring starts today, not that you can tell.

Here's meteorologist Pedram Javaheri.

(BEGIN VIDEOTAPE)

PEDRAM JAVAHERI, AMS METEOROLOGIST: Good morning, guys.

Yes, the severe weather concern is going to be absolutely in place here across parts of the south today. And, you know, this is the time of year you begin to see activity really ramp up as far as tornadoes are concerned.

And frankly, it has been very quiet so far, really since the beginning of January. Only 75 reports of tornadoes. It should about 145 which is roughly 50 percent or so of average.

But you take a look. The activity -- the disturbance begins shifting off towards the east and parts of the Carolinas through late this morning could see a severe weather concern. But really, much of the threat beginning to fall apart and the higher risk now shifted and the energy really towards portions of northern and central Florida where we could see large hail and certainly damaging winds, and maybe a few tornadoes out of this as well.

And reports of at least three tornadoes in the past 24 hours across parts of Alabama on into Georgia.

But here's the storm system. There's the track as it pushes in over the Carolinas by this afternoon and tonight. Upwards of 70 million people underneath winter weather alerts across the areas of the Ohio Valley and the northeast.

And as we transition towards later on tonight as the sun sets, expect Philadelphia to begin to see some of this snowfall come down. You could see some heavy stuff all across that region into the overnight hours.

And Washington also gets into the snow by early tomorrow morning. Depending on the track of the system if you push this closer to the coastline, we could see New York City pick up as much as 10 inches if everything plays out as we expect -- guys.

(END VIDEOTAPE)

BRIGGS: Just what the kids need, more snow days. Thank you, Pedram.

Meanwhile, the Harvey Weinstein Company filing for bankruptcy protection hoping for an organized sale process to a private equity firm.

At the same time, the Weinstein board says it's ending all non- disclosure agreements related to sexual misconduct by Harvey Weinstein effective immediately, which could mean more victims coming forward. The company calls it an important step toward justice for any victims who have been silenced, adding no one should be afraid to speak out.

ROMANS: Let's get a check on "CNN Money" this morning.

Facebook's worst day in four years dragging down stocks. Facebook, along with Amazon, Netflix, and Alphabet shed more than $100 billion in value -- a tough day.

And how big tech goes, so goes the market. The Dow, Nasdaq, and S&P 500 fell at least 1.4 percent. The Dow has now turned negative again for the year.

Wall Street was already concerned about higher interest rates and a possible trade war, especially with reports that tariffs on $60 billion on Chinese goods are imminent.

Right now, global stocks and U.S. futures are lower again. AT&T's antitrust trial just began and it's already sparring with the Department of Justice over e-mails and PowerPoints. The DOJ lawsuit will block AT&T's $85 billion purchase of Time Warner, a parent of CNN.

And attorneys for AT&T want to throw out several pieces of evidence, including thousands of e-mails sent by AT&T employees, arguing that many are not major decision-makers. But the government says it proves the merger will harm consumers by raising prices. AT&T disputes that, adding that the deal is necessary to compete in the new media landscape.

Another nostalgic brand files for bankruptcy. Teen jewelry chain Claire's filing for bankruptcy protection Monday. It plans to use the filing to reduce most of its $2 billion in debt.

It promised its 1,600 stores will stay open. It is a mall staple. It says it's pierced more than 100 million ears around the world.

And it is just the latest retailer to succumb to a huge pile of debt, like Toys R Us last week. The iconic toy store said it will close or sell all its U.S. stores.

Existential, what's going on in these retailers, especially specialty retailers.

[05:50:02] BRIGGS: The Amazonification of the country.

OK. Military drills between the U.S. and South Korea set to resume soon but overnight, word they won't last as long as usual. We're live in Seoul with what that means.

(COMMERCIAL BREAK)

BRIGGS: The Pentagon says annual military exercises between the United States and South Korea will begin April first. The announcement comes as President Trump prepares for a face-to-face summit with North Korean leader Kim Jong Un. But this new round of drills with South Korea will not be the same as usual.

CNN's David McKenzie live in Seoul to tell us how. Good morning, David.

[05:55:04] DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Good morning, Dave.

Yes, it is seeming like these are curtailed somewhat despite the Pentagon telling CNN that these are the same scope, duration, and scale as previous years. South Korea is saying that they are around half as long, lasting just about a month, whereas before they would have been substantially longer.

Now, these are annual drills that often angers the North Koreans, leads to heightened tensions, and results in missile deployments of the North Koreans -- or missile tests. They will be a combined drill of the South Koreans and thousands of U.S. servicemen and women and there will also be a virtual war games. That's pretty typical.

But it's already being delayed because of the Olympics, I think, giving space to the South Koreans to have those initial talks with the North Koreans. And it seems like, Dave, they want to have them over and done with before that proposed meeting between Kim Jong Un and Trump because it would be kind of awkward if they were talking while war games were ongoing.

Also another development today. There's a sense that they'll be sending a whole host of pop stars -- K-pop stars over to the North, so things really have changed in terms of the atmosphere here on the Korean Peninsula -- Dave.

BRIGGS: That is an interesting development there, indeed. David McKenzie live for us in Seoul. Thank you.

ROMANS: All right.

Twenty-three Russian diplomats expelled by the U.K. set to depart London today. The action comes one day after chemical weapons experts traveled to Britain. They will test samples of the substance used to poison a former Russian double-agent and his daughter.

CNN's Melissa Bell live in Salisbury, England with the very latest -- Melissa.

MELISSA BELL, CNN INTERNATIONAL CORRESPONDENT: Christine, that investigation now underway not terribly far from here. A facility known as Porton Down, just on the outskirts of Salisbury has been holding those samples now for more than two weeks. The samples collected in various locations here in Salisbury -- all the ones that were visited by Sergei and Yulia Skripal on the day that they were found poisoned on that park bench in the town center just behind me.

They are now being examined by investigators from the Organization for the Prohibition of Chemical Weapons. And really, the conclusions that they come to will be closely scrutinized not just by the British, of course, but by the entire world because Britain has been so forthright in its accusations against Russia in identifying the substance as Novichok and as laying the blame not just on the feet of Russia, Christine, but squarely at the feet of Vladimir Putin himself.

And so, the results that the OPCW investigators come up with are going to be crucial to getting Britain to make its case.

For the time being, it's taking its measures of retaliation alone, including as you say, that expulsion of 23 diplomats that we're expecting later today.

ROMANS: All right. Melissa Bell for us in Salisbury, England. Thank you, Melissa.

Women in Mississippi can no longer get abortions after 15 weeks of pregnancy. Governor Phil Bryant signing the new law tightening what were already the most restrictive abortion laws in the nation.

The measure only makes exceptions for medical emergencies or severe fetal abnormality. There are no exceptions for rape or incest.

Mississippi's Planned Parenthood director calls the ban unconstitutional and says it endangers women's health.

BRIGGS: Uber suspending tests of its self-driving cars after what's believed to be the first fatal crash of a fully-autonomous vehicle. The self-driving Uber SUV struck and killed 49-year-old Elaine Herzberg Sunday as she walked her bike across the street in Tempe, Arizona. A test driver from Uber was behind the wheel but not in control.

ROMANS: Preliminary data shows the car going about 40 miles an hour in a 35 zone. Police say there are no significant signs the SUV slowed down before impact.

Uber says it is fully cooperating with local officials and that quote "our hearts go out to the victim's family."

Last year, Uber briefly pulled its self-driving test vehicles after one landed on its side in an accident, also in Tempe.

All right, thanks for joining us this morning. That's it for us this morning, at least. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. "NEW DAY" starts right now. We're back 9:00 to 11:00 a.m. We'll see you then.

(BEGIN VIDEO CLIP)

JOHN DEAN, FORMER WHITE HOUSE COUNSEL FOR PRESIDENT RICHARD NIXON: We're witnessing a very public obstruction of justice. Trump is Nixon on steroids.

UNIDENTIFIED FEMALE: The president's side and the special counsel's side had a meeting last week.

UNIDENTIFIED MALE: At 14 months into this presidency there isn't evidence of collusion. Let's wrap this up and move on.

SEN. JEFF FLAKE (R), ARIZONA: Firing the special prosecutor, that's a red line you cannot cross.

DIGENOVA: They plotted to destroy him as a president.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: The president clearly wants to start punching.

ROMANS: A whistleblower says a data firm linked to the Trump campaign tried to brainwash the American electorate.

UNIDENTIFIED MALE: Facebook made no effort to go out and tell people.

LEMON: Do you think the information influenced the 2016 election?

WYLIE: I think absolutely it played a role.

(END VIDEO CLIP)