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THE LEAD WITH JAKE TAPPER

New VA Secretary; Judge Rules Against Stormy Daniels; Russia Retaliates; Cohen's Lawyer: Stormy's Ex-Lawyer Approached Trump Attorney First With Hush Money Deal. Aired 4-4:30p ET

Aired March 29, 2018 - 16:00   ET

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


[16:00:05]

JIM SCIUTTO, CNN HOST: Want to be in President Trump's Cabinet? Just tell him he's super fit.

THE LEAD starts right now.

President Trump said, "I, alone, can fix it." Soon, he may have no choice. The president now being told he can run the West Wing all by himself as he taps his personal doctor to care for every single American veteran.

Russia strikes back. Vladimir Putin matches President Trump, throwing out dozens of American diplomats. Just how chilly will this confrontation get?

Plus, breaking news in the Stormy Daniels scandal, a judge, for now at least, denying the motion to get the president under oath, as Michael Cohen's attorney makes a claim that could change everything. I will ask him if he stands by it live.

Welcome to THE LEAD. I'm Jim Sciutto, in for Jake Tapper.

We begin with the politics lead. Turmoil and turnover at the White House. Now some advisers are telling the president, it might be better not to have staff to lose in the first place. On the day Communications Director Hope Hicks officially leaves the White House, CNN has learned President Trump is being told he doesn't need a replacement for that role, nor a chief of staff, an idea the president apparently has not rejected, according to a source.

Hicks' resignation was announced last month, and her departure is just one of eight in just the last month or so. The most recent? Veteran Affairs Secretary David Shulkin, with the president's White House doctor named as his replacement.

And we heard this afternoon from the president for the first time in days as he just wrapped up a speech on infrastructure in Ohio.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I was always very good at building. It was always my best thing. I think, better than being president, I was maybe good at building. (END VIDEO CLIP)

SCIUTTO: CNN's Kaitlan Collins is in West Palm Beach, Florida, for us today, where the president is arriving shortly for the long holiday weekend at Mar-a-Lago.

Kaitlan, during that speech in Ohio, the president also commented about his shakeup at the VA.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: He did, Jim.

It was the first time that we have heard from the president on the ousting of David Shulkin since he announced he was replacing him yesterday on Twitter, and the president said he made a change at Veterans Affairs because he wants to speed up the way that veterans are taking care of.

And fixing the VA was certainly a campaign promise that the president ran on, but his next choice to run the VA is certainly raising a few eyebrow eyebrows.

(BEGIN VIDEOTAPE)

TRUMP: I'm thrilled to be back in Ohio.

COLLINS (voice-over): President Trump stepping into public view today for the first time this week.

TRUMP: We're going to have real choice. That's why I made some changes because I wasn't happy with the speed with which our veterans were taken care of. I was not happy with it.

COLLINS: But back at the White House, it's another firing and surprise hiring that is shaking up the Trump administration once again.

QUESTION: Mr. President, can Ronny Jackson get confirmed?

COLLINS: After weeks of twisting in the wind, Veterans Affairs Secretary David Shulkin is the latest Cabinet member to go. The president hoping to replace him with the own White House physician, Dr. Ronny Jackson.

Unlike others who have been fired in recent weeks, including the secretary of state and the national security adviser, Shulkin is not going quietly. He was at odds with some over the privatization of the VA and had been engulfed in scandal over using taxpayer dollars on a European trip with his wife.

DAVID SHULKIN, FORMER U.S. SECRETARY OF VETERANS AFFAIRS: There was nothing improper about the trip. I think that this was just really being used in a political context to try to make sure that I wasn't as effective as a leader moving forward.

COLLINS: Writing an op-ed in "The New York Times" today, saying: "As I prepare to leave government, I'm struck by a thought. It should not be this hard to serve your country."

Trump nominating Dr. Jackson, who served in Iraq and has worked as the top White House doctor since 2013, tapped by President Obama, but Jackson won Mr. Trump over after telling reporters the 71-year-old president was in -- quote -- "excellent health."

DR. RONNY JACKSON, PRESIDENTIAL PHYSICIAN: Some people have just great genes. I told the president that if he had a healthier diet over 20 years, he might live to be 200 years old. I don't know.

COLLINS: CNN has learned that even some of the president's closest allies didn't take him seriously when he suggested picking the presidential physician with no management experience as the new head of the second largest agency in the federal government, one that has suffered from chronic mismanagement.

REP. MIKE COFFMAN (R), COLORADO: This is an organization that is over half the size of the United States Army. And unless he's going to be tough, nothing's going to change.

COLLINS: Shulkin's firing is the latest in a string of high-profile Cabinet departures in recent weeks. One-fourth of the president's original Cabinet has left the job or changed roles within the five administration.

Another high-profile departure, Hope Hicks, one of the president's top aides and closest confidants, is officially left the West Wing after announcing she was throwing in the towel last month. The president bidding her goodbye today as questions swirl about how he will handle her departure.

(END VIDEOTAPE)

[16:05:05]

COLLINS: Now, Jim, White House staffers are actually worried about what a post-Hicks era is going to look like in the West Wing.

And my sources inside the White House have told me that, over these last few weeks, Hope has not been there at much, and, at times, the president has yelled her name from the Oval Office trying to summon her in there, only to find that she's not there.

Now, the president is going to spend the weekend away from the West Wing and away from most of his staff, as he has a long Easter weekend down here in West Palm Beach, Florida, Jim.

SCIUTTO: Kaitlan Collins, thanks very much.

My political panel here now to discuss this with me.

So, a White House without a communications director or chief of staff. Would that work?

SUSAN PAGE, WASHINGTON BUREAU CHIEF, "USA TODAY": The last time this got tried was when Jimmy Carter first took office. I actually interviewed Jimmy Carter this week and asked him if he

thought this system would work. And he said no. He decided -- he moved to a more traditional system with a more powerful chief of staff, because there's a lot to do as president, and you need somebody who is like coordinating it all for you.

SCIUTTO: Is it possible, though, in a Trump administration, where he clearly makes the decisions himself, sometimes without consulting his senior-most staff, that maybe, if it's not entirely workable, maybe it's just a reality?

AMANDA CARPENTER, CNN POLITICAL COMMENTATOR: Yes. Yes.

I was going to say I think that this staff really should make the case to him, you must have these positions filled. But the campaign is starting very soon. Whatever you want to do on the campaign, President Trump, you don't need a communications director, you don't need a chief of staff, do what you want to do there. On the campaign trail, let Trump be Trump, but here in Washington, if you don't have these positions filled and members of Congress don't have a place to go, your administration will grind to a halt.

And you will give up those years of progress you could potentially have.

SCIUTTO: It seems like the president here, and we hear this from our White House reporters speaking to sources who speak to the president, that the president is feeling kind of emboldened now, feeling he's got control. He's getting the Cabinet he wants. He's always been a gut player. He's going to follow his gut now. This is what his gut is telling him.

Do you sense that from him on these decisions?

KIRSTEN POWERS, CNN COMMENTATOR: Yes. I think that that's probably right.

And I think -- you know, you can't really blame him for that, I guess, if he feels like this is what made him successful and he had a campaign, obviously, that's was very scattershot, and not very organized, and didn't have clear lines of communication, and he became president.

You can see how he would sort of reach that conclusion. I think with Hope Hicks, she's much more than a communications director, and so this is going to be something I think he's going to definitely feel in a way that he has not felt with other people is that she's somebody who just really knows how to manage him and was really running interference all the time, and so it's going to be hard for him and it's going to be hard on the staff also because I think they are not going to have this person around who knows how to manage him.

SCIUTTO: And we're hearing that from the staff the post-Hope Hicks era is being viewed as this kind of huge unknown territory, right?

PAGE: The post-Hope era, we're calling it now. (LAUGHTER)

PAGE: I think the organization makes less difference than having some voices around him who feel free to tell him when he's making a mistake or when they he is going in the wrong direction.

And the question is with some of these other replacements around him for national security adviser, for secretary of state, is the president going to be in a situation where he's not hearing alternative voices when he's going to make a big decision?

SCIUTTO: Yes, and particularly when you need debates on issues like, I don't know, military action against North Korea, for instance.

White House officials telling CNN that the Ronny Jackson's sort of secret to success was how he handled himself when he was talking about the president's health profile briefing about his health back in January.

Let's have listen, so we can be reminded of this.

(BEGIN VIDEO CLIP)

JACKSON: He has a lot of energy, a lot of energy, and a lot of stamina. It's called genetics. I don't know. It's -- some people have, you know, just great genes, but the president's health is excellent, because his overall health is excellent. He has incredible genes, I just assume. And I think he will remain fit for duet for the remainder of this term and even for the remainder of another term if he's elected.

(END VIDEO CLIP)

(LAUGHTER)

SCIUTTO: Amanda, is that how he got the job?

CARPENTER: Maybe.

Listen, he's smooth, he's good-looking. I can see why Trump would want him to the face of this particular agency, but if he wants to be taken seriously, he should go forward and give a speech about the serious things he hopes to do. How will you finally address the backlog at the VA?

How do you plan to get veterans treatment for PTSD that they need? How will you make sure that veterans are not denied benefits just to get them off the rolls and save taxpayers' money? These are big things that I think everyone is looking for answers on.

They were brought up in the Obama administration, but they should be things that Trump fixes, and he better darn sure get someone in there who can.

SCIUTTO: Right. And that's the issue, because it's been, has it not, it's been an enormous bureaucratic issue, and a whole host of folks have tried to fix these problems with very real consequences, veterans dying in their hospital beds.

You need more to be the central casting candidate, which is another way we've heard the president has described Ronny Jackson, to solve those problems.

POWERS: Right.

So Trump people would say, but we have always had the bureaucrats, we've always had the people who know how to run big organizations. And that's why we voted for Trump, we wanted somebody different. I think it's this mentality that goes into it.

And I would say maybe there's a middle ground, right? Maybe there's somebody that can come in that can shake things up, but actually has some administrative experience.

[16:10:03]

And this idea of choosing people from central casting, this is also how he chose -- let's remember, as much as he's sort of saying these other people were forced on him, a lot of these other people he chose for the first round were people he thought were out of central casting or sort of fit his idea of the generals and those kinds of things.

So, you know, is his gut really that reliable, I guess, is the question.

SCIUTTO: Yes, fair question.

Well, it's interesting. David Shulkin, who Ronny Jackson is replacing, he didn't go out quietly. He had quite a strongly worded op-ed in "The New York Times" he wrote.

And this is a portion of it in this: "I have fought to stand up for this great department and all that it embodies. In recent months, though, the environment in Washington has turned so toxic, so toxic, chaotic, disrespectful, and subversive, that it became impossible for me to accomplish the important work that our veterans need and deserve. As I prepare to leave government, I'm struck by a thought. It should not be this hard to serve your country."

Now, we should note, Susan, he did not mention Trump in this. Was he taking a shot at the administration or was it more at the just sort of general dysfunction of Washington?

PAGE: He did talk about a toxic atmosphere. That's something that started before Donald Trump was on the scene.

He also talked about proposals to privatize some of the medical services in the Veterans Administration. And one question is, why was he fired? Was the debate over privatization one of the reasons he was fired? Because, if so, that would a stark change in policy for the agency that serves nine million vets.

CARPENTER: But on that point, one of the reasons he ran into controversy is because he falsified documents and stuck taxpayers with the bill for a trip to Wimbledon and a European cruise.

Somehow, that was left out of his "New York Times" op-ed and he wants to make himself a martyr because supposedly he opposes privatization.

There may be a push for privatization maybe to give veterans vouchers that they can use with the doctors of their choice. Maybe that's happening. But let's not ignore the ethics violations that he had. And I think Trump should have terminated him for that in a very public way, and also send a signal to the other members of the Cabinet that have that problem.

SCIUTTO: And this has been, I don't want to say an epidemic, but it's certainly not an isolated case.

Amanda, Kirsten, Susan, thanks very much.

A new chapter coming in the Stormy Daniels vs. Donald Trump saga. Did both sides just damage their own cases?

(COMMERCIAL BREAK)

[16:16:26] JIM SCIUTTO, CNN HOST: Welcome back.

A ruling today clears President Trump of answering questions under oath about the alleged affair with the adult film actress Stormy Daniels, but just for the time being. A federal judge denied her legal team's motion for an expedited trial, saying the request to also speed up the discovery phase of this case was premature.

Meanwhile, a major twist in this entire ordeal. Michael Cohen, the president's personal attorney, has his own attorney who says that, in fact, it was Stormy Daniels' legal team who approached Cohen with the idea of hush money, not the other way around.

David Schwartz, Cohen's lawyer and spokesman, he joins me now.

Mr. Schwartz, thanks very much for taking the time.

DAVID SCHWARTZ, MICHAEL COHEN'S LAWYER AND SPOKESMAN: Thank you.

SCIUTTO: So, first of all, can I get your reaction to the judge's ruling for the time being not to -- dismissing the motion to depose President Trump, your reaction?

SCHWARTZ: Well, I'm not surprised in the least bit. I said from the moment that the motion was filed that it was frivolous. It was untimely. The judge decided properly. We're not celebrating. It's -- I see it's a nonissue completely because it made no sense at the point in time in which the motion was filed.

SCIUTTO: But I have to ask you this because we spoke to a number of -- I'm not a lawyer. You are. We've spoken to a number of lawyers who understand what the judge said in the decision.

SCHWARTZ: Right.

SCIUTTO: And the motion, the decision rather makes no ruling on the underlying merits of this demand to have the president --

SCHWARTZ: Right.

SCIUTTO: -- testify, so in a later date, the judge could then say, yes, president should be deposed.

SCHWARTZ: That's why I premised the answer by saying it's a nonissue at this point. I just don't understand why the motion was filed. Well, I do understand, because Mr. Avenatti files a motion, and everybody jumps on it. For two days, everybody talks about the president is going to be deposed, he's going to be deposed, and I'm standing up here saying it's a frivolous motion. It's untimely, and that's exactly what the judge decided. So, it took him 36 hours, by the way.

SCIUTTO: Fair enough, clear, but granted for now, could make a different judgment in a different time.

You mentioned Daniels' attorney, Michael Avenatti, he says that you are helping the case by saying that Cohen never told the president about this nondisclosure. Just for the sake of the viewers, I'm going to play his comment and you could react to.

SCHWARTZ: OK.

(BEGIN VIDEO CLIP)

MICHAEL AVENATTI, STORMY DANIELS' ATTORNEY: David Schwartz's claim that the president knew nothing about this, had no involvement in this, and if that's true, the agreement is going to be thrown out because the president and only the president could bind himself to various provisions of that agreement.

(END VIDEO CLIP)

SCHWARTZ: It's --

SCIUTTO: Does that make sense to you?

SCHWARTZ: First of all, it's no make sense, but that's with everything that he says. So, first of all, the president is a third party beneficiary to this agreement. It's been said all along, Mike, this wasn't new news. Michael Cohen said from the very beginning that he did this on his own, and did not tell the president.

So, the fact that I came out and said that, it's not new news. So, now, he's coming out --

SCIUTTO: Whether it's new or not, the -- from a legal perspective, I'm not a lawyer, I grant that, but I spoken to smarter people than me on this issue, and they've explained to me that with an agreement like this which purports to be between the president and this person, even if the president did not sign it, it purports to bind this person, the agreement, between the president and Stormy Daniels, if the president did not know about it, why is the agreement valid?

SCHWARTZ: I don't know who you spoke to, but the bottom line is, the agreement was between EC, LLC, and Stormy Daniels.

[16:20:00] The agreement was between an entity and Stormy Daniels. There was consideration. There was an attorney -- there were attorneys on both sides. OK? And she was paid the $130,000.

This agreement is rock solid. In the agreement, it says, and/or, so either party on that side could have signed the agreement. It was signed. It's valid. And it's going to be found to be valid by the court or what I think is really going to happen is the court will take it down to arbitration.

So, his theory is completely off. And let me -- even taking --

SCIUTTO: Let me if I can, and you made your point on that, and there's a lot to get through here.

SCHWARTZ: Right.

SCIUTTO: Because I appreciate the opportunity with me. So, let me get to this other topic, you also now say that the former lawyer for Stormy Daniels, Keith Davidson, that, in fact, he was the one who approached Cohen, not the other way around.

SCHWARTZ: A hundred percent.

SCIUTTO: Walk us through how that happened. Was it an email? Was it a phone call, text message?

SCHWARTZ: I'm not going to get into the methodology of communication, but I will say it's pretty well-known that she was shopping her story around, and, in fact, she admitted on "60 Minutes" that she was shopping her story around, and it was this attorney that reached out to Michael Cohen to basically say that $130,000, you can makes this deal or he would shop it around to someone else. That's pretty well- known by now.

SCIUTTO: Let me ask you though because Avenatti who is Stormy Daniels', of course, current lawyer says that Cohen approached her when he found out she was talking to ABC News at the time about an interview, of course, days before presidential election, and, therefore, had a desire to kill that interview. You're saying that's not true?

SCHWARTZ: Well, Stormy Daniels said it's not true. Stormy Daniels admitted that Michael Cohen never communicated with her whatsoever, never, never communicate with her. The only communications were between Michael Cohen --

SCIUTTO: He arranged $130,000 payment.

SCHWARTZ: With an attorney.

SCIUTTO: They were in touch in some way.

SCHWARTZ: They were not because that's the very crucial point in the case. SCIUTTO: Why did he set up an LLC in Delaware to get $130,000 to her

pocket?

SCHWARTZ: He was speaking with the other attorney. So, he wasn't speaking with Stormy Daniels directly.

SCIUTTO: For folks at home, it doesn't matter so much there was an intermediary. I mean, folks at home have a reasonable question to say, then, if there was no, you know, damaging information that she might be able to offer, why the need to pay the money?

SCHWARTZ: It matters a lot because the accusation is Michael Cohen was threatening her, meanwhile, they never met each other or spoke to each other.

SCIUTTO: That's a separate issue. On the payment, can you explain --

SCHWARTZ: Let me answer the question.

SCIUTTO: Why was the payment made then?

SCHWARTZ: So, payment is made pursuant to a nondisclosure agreement. The payment is made to protect family. It's to protect business. It's to protect reputation.

SCIUTTO: Nondisclosure is what?

SCHWARTZ: Nondisclosure of whatever Stormy Daniels was going to say, heard what she said on "60 Minutes".

SCIUTTO: Of an affair, paid money to --

SCHWARTZ: I don't know if that's an affair. I mean, she basically said they had sex one time, 12 years ago, if you want to believe her. The president denies that. I'm not here to get into the substance of anyone's arguments. I'm here to talk about the substance of a contract and nondisclosure agreements. These agreements are signed every single time.

SCIUTTO: Are you saying sex one time would not be material or of interest to the president not getting out there three days before the election?

SCHWARTZ: I didn't say that. I said the sex one time she said 12 years ago is immaterial to any of my arguments because I'm here to talk about a nondisclosure agreement and a contract. I don't care what they did 12 years ago and I don't think most people don't care what the president did 12 years ago. It's only the media that cares about what the president did.

SCIUTTO: Oh, that's a judgment for people at home to make.

SCHWARTZ: That's my opinion. I'm on for my opinions, right? So, that's my opinion.

SCIUTTO: No, fair enough, that's why we have you on. But just on that issue, are you saying that this idea that stormy was

about to do a public interview with ABC News days before the presidential election was something her -- that Michael Cohen did not know about?

SCHWARTZ: Michael was approached by the other attorney, and he -- the other attorney communicated that she was going to do an interview or he could pay the $130,000. So, Michael Cohen made an executive decision, made a business decision, and they paid the $130,000. Now, that may seem abnormal to some people, but if you're in business --

SCIUTTO: Probably to most people. I don't know, $130,000 to cover an affair.

SCHWARTZ: If you want to avoid litigation and you want to protect someone's reputation, and you want to protect their business, you pay the $130,000, and, by the way, unfortunately, it happens every single day. Politicians --

SCIUTTO: Not to most people I know. But --

[16:25:01] SCHWARTZ: -- news personalities, CEOs, they enter into nondisclosure agreements. In fact, we know elected officials do it because we heard about it. Guess what? That money comes from our pockets, the taxpayers' pockets. This money came --

SCIUTTO: There's a question here whether it was from the campaign coffers. That's another issue.

SCHWARTZ: IT came from my Michael's pockets. Speculate here until tomorrow. You can say, oh, it's the campaign --

SCIUTTO: It's a fair question.

SCHWARTZ: When I say "you," I say people in general. You can speculate anything you want, but the facts are what the facts are.

SCIUTTO: David Schwartz, I appreciate you taking hard questions.

SCHWARTZ: Thank you very much.

SCIUTTO: Russia is giving the United States a little tat-for-tat in a diplomatic chess game. Are we building up to a modern day Cold War?

(COMMERCIAL BREAK)

SCIUTTO: A bold act of retaliation by Russia today, now shutting down the U.S. consulate in St. Petersburg, Russia, giving 60 U.S. State Department employees working in Russia one week to get out.