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Sanctions Target Putin Allies; Sanctions on Putin's Inner Circle; Russian Businessman Sanctioned; Dow Tumbles over China Tariffs; Weak March Jobs Report; Trump Supports Pruitt. Aired 1-1:30p ET

Aired April 6, 2018 - 13:00   ET



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

Up first, the flurry of activity in a growing list of scandals surrounding President Trump and his administration. The president is standing by beleaguered Environmental Protection Agency Administration Scott Pruitt, even as new scandals emerge. Sources tell CNN that multiple senior officials who disagreed with or questioned Pruitt's actions were sidelined, demoted or resigned in frustration.

Also, President Trump breaking his silence on the Stormy Daniels saga And an attorney for the adult film star says the president's words will help their case against him. In his first public comment, the president says he did not know about the $130,000 in hush money paid to Daniels.

Fears of a trade war with China rising again. President Trump says he's considering tariffs on another $100 billion worth of Chinese goods. Will this lead to negotiations or escalation?

And the U.S. takes aim at wealthy Russians with ties to Vladimir Putin. The Trump administration imposing sanctions against seven Russian oligarchs, a dozen companies they own or control and 17 senior Russian government officials.

And that's where we begin. CNN has team coverage of those sweeping Russian sanctions. Our justice correspondent, Evan Perez, will connect the dots to the Russia investigation of the special counsel, Robert Mueller. Our national security analyst Samantha Vinograd will explain how it all came together. But first, let's go to our senior diplomatic correspondent, Michelle Kosinski. She's here with details of who is on this list.


MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Hey, Wolf. Yes, this is a handful of people and companies, but a very heavy

handful. When you look at some of the big fish that this encompasses, we have the head of state-run energy giant Gazprom. Putin's son-in-law is on the list. The head of the Russian national guard. A guy named Andrea Kostin (ph), head of the state bank, sometimes called Putin's piggy bank.

And some of the other more interesting characters here. Alexander Torshin. The FBI looking into whether he illegally put money into the NRA. And he's a life-long NRA member. And that whether that money might have gone towards now-President Trump. He also allegedly tried to set up a Trump-Putin meeting.

Then there's Oleg Deripaska, with alleged ties to Trump's former campaign chairman.

Viktor Vekselberg, the head of -- the American division of his company made a large donation to Trump's inauguration. That's also Vekselberg's cousin. And reportedly Vekselberg attended Trump's inauguration. Plus, his company has ties allegedly to current Commerce Secretary Wilbur Ross.

So clearly the administration has chosen a few of the original more than 200 people that they put on a list for potential sanctions, but they're not shying away from some of Putin's real inner circle, as well as some of the shadier characters that U.S. intelligence has been looking into.

Questions to be asked, though, why so few of the original 200 that were designated? Why did it take so long for these sanctions to come down? And why is it still so hard for members of this administration at times to spell out that this is, in part, because of Russian meddling in the U.S. election, Wolf?

BLITZER: A very significant list nonetheless. Indeed a major step as far as the U.S. trying to punish the Russians.

Michelle Kosinski, thanks very much.

The sanctions are some of the most aggressive action taken by the Trump administration against Moscow to date.

Here now to break it down for us, CNN national security analyst, former senior adviser to the National Security Council under President Obama, Samantha Vinograd.

Samantha, tell us how this all came together.

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: Well, Wolf, this is a really good day for U.S. national security. And kudos to the national security team. I don't take that -- say that a lot.

These sanctions are a step toward implementing the kind of real deterrence that John Bolton, who starts on Monday, has said that we need as part of our Russian strategy. So it's definitely a step in the right direction. The sanctions target a range of Russia malign activity, including

actions in Ukraine, support for the Syrian regime. And I think that this shows that we're tracking the full Russian threat matrix here. We're going to counter them on their activities in Syria and Ukraine. We're also going to look at their election meddling, cyber-attacks and that sort of thing.

And remember back in March, the administration did designate individuals and entities for election interference and cyber-attacks. We just kicked out diplomats because of the nerve agent attack in the U.K. So I think the administration is signaling to Putin, finally, that we see everything that he's doing and we're going to impose penalties across the board.

[13:05:00] And as Michelle mentioned, seven oligarchs were designated today because they benefit from Putin. He's their patron. He keeps them afloat.

But there's a quid pro quo here. They do his dirty work for him. And, you know, the word "oligarch" is thrown around quite a lot these days. In the Russian context it really means a very rich Russian business leader with a lot of political influence. They have an ongoing and direct relationship with Vladimir Putin. That's why he's targeting them and that's why this all matters. They're moving his money, his goods and his services around the world and doing other dirty work for him.

BLITZER: Give us a little bit more specific information on these oligarchs, seven oligarchs who were mentioned in these new sanctions.

VINOGRAD: Well, this is like Putin's friends and family list. It has his son-in-law, as Michelle mentioned. And on the oligarch side, they're designated for various things other than the Ukraine and Syria activities that I mentioned. They're designated for that.

But they've also been involved in a lot of other really shady behavior. They work in Russia's energy sector and -- which is now illegal in the U.S. They're representatives of the Russian government.

But in addition, they have been accused of money laundering, bribery, extortion, all those other kinds of activities. These are not the kind of guys that you want to invite to your dinner table.

BLITZER: You know, what -- usually, Samantha, whenever the U.S. does something like this to the Russians, whether expelling diplomats, shutting down a Russian diplomatic mission, the Russians immediately respond in kind. So I assume U.S. officials are now bracing for a list of American business tycoons, government officials, big corporations that are about to be sanctioned by the Russians, right?

VINOGRAD: I expect that, Wolf. I don't think that Vladimir Putin is going to take any of this lying down, again, because these guys are so important to him.

And the money question, Wolf, here is, whether any other countries are going to follow suit and issue similar designations, where these oligarchs, for example, have real assets, like Greece, like Cyprus, and investments like in the U.K.

BLITZER: Since Putin's son-in-law was on this list by the U.S., should we anticipate that the president's son-in-law, Jared Kushner, will be on the Russia list once they respond?

VINOGRAD: I think it's possible, but Jared Kushner has had a series of engagements with representatives of the Russian government, like Ambassador Kislyak. So I don't know that it's a sure thing in this case.

BLITZER: Yes, we'll all brace to see how the Russians respond. I don't think it's a matter of if, but when they respond. We'll be anxious to see who is on their list of their -- for their sanctions. We'll see what they decide to do.

Samantha Vinograd, good explanation. Thank you very much.

As we mentioned earlier, one of those individuals sanctioned, one of the Russian oligarchs, is Oleg Deripaska. You may have heard his name before today because he's tied to the president's former campaign chairman Paul Manafort and deputy campaign chairman Rick Gates. Manafort, as you know, has been indicted by the special counsel, Robert Mueller. Rick Gates, he was indicted. He pleaded guilty. He's reached an agreement with the special counsel.

I want to bring in our justice correspondent Evan Perez, who's been closely following the Mueller investigation, of course.

Evan, Deripaska isn't the only oligarch sanctioned today with some sort of connection to the president of the United States.


And I think the thing that think we've got to keep in mind, as far as it relates to the Mueller investigation, is that what Mueller is now homing in on is the question of whether or not anybody might have legally provided money, donated money to the Trump campaign, whether through shell corporations, whether through Americans that were essentially straw donors. And so that's the big question for the Mueller investigation is whether anybody was part of this influence operation by the Russian government, and whether these people who are very close to Vladimir Putin were part of that.

And so the three names that you just put up there, Oleg Deripaska, Viktor Vekselberg and Alexander Torshin are three big names that have come up in this investigation. Oleg Deripaska obviously for being in business with Paul Manafort. In July of 2016, Manafort had sent him an e-mail actually ask -- (INAUDIBLE) an intermediary, offering to provide Deripaska some private briefings. This is at a time that Manafort was in the campaign. Obviously we now know that Gates is cooperating with the Mueller investigation, so he is going to be able to shed light on exactly what that relationship was, whether there was any money that needs to be tracked as part of that relationship.

Viktor Vekselberg, you know, he not only -- we've been told he attended the inauguration. But he was also at that dinner where Michael Flynn was. You've seen pictures where Michael Flynn is sitting with the -- with Vladimir Putin. And we I know that Viktor Vekselberg's cousin donated money to the Trump inauguration, something that he had never done before in his life. He had never been a donor to anything like this.

[13:10:01] So that's something that the Mueller investigators are going to want to take a look at. Vekselberg is somebody who is very wealthy. He's -- owns an energy company and he travels to the United States. He was here in February. So that's somebody that -- his name is definitely -- figures largely in this investigation.

And then, of course, Alexander Torshin. He's got these ties, longstanding ties, with the NRA. He actually posed a meeting between the Russians and Trump. And we know -- we've seen reports from McClatchy and others that the FBI is looking into whether or not he was somebody -- perhaps a conduit for money that may have gone into the campaign.

All of these people, obviously, again, the unifying factor here is whether or not the money -- and they're all wealthy, they have access to a lot of money -- whether any of that money made its way illegally into the campaign and whether that was part of the Russia influence operation.

BLITZER: But, very quickly, one complicating factor for Robert Mueller and his team is they presumably would have liked to have interviewed these individuals, especially the three that you mentioned. If they had come to the United States, they could have stopped them at an international airport here in the United States, questioned them, had a search warrant for their documents, their cell phones, stuff like that. Now these individuals, they're not coming to the United States and there's going to be no chance for Mueller to interview them.

PEREZ: Right. I think the element of surprise is definitely lost here for some of these individuals. Certainly I think, as our -- my colleagues, Shimon Prokupecz and Karis Kanal (ph) reported earlier this week, the Mueller investigators are being very aggressive, and they're doing exactly what you just said, stopping people when their private planes land. And you had states (ph) looking through their electronics, making sure they can give them a subpoena to bring them before the grand jury. And so we'll see whether or not this changes any of that -- any of the patterns of behavior of their travel patterns into the United States.

BLITZER: Evan, thank you very much. A good explanation from you as well.

Let's get some more right now on these developments. Mike Rogers is joining us. He's CNN's national security commentator, a former chairman of the House Intelligence Committee.

So how though are these sanctions, Mike?

MIKE ROGERS, CNN NATIONAL SECURITY COMMENTATOR: This is good. This is going to pinch Putin where it hurts him the most, mainly his pocketbook. So the people around him, you don't because an oligarch in Russia because of your great business prowess. You become because you're connected to the government and the governmental allows you to take over large segments in the economy in Russia. And these folks are very close to him.

And what I found interesting about this set of sanctions is, it hits them in banking, it hits them in manufacturing, it hits them in commodities, like aluminum. It also hits them in their weapon sales. And we know that all of those things have contributed to bad activities in places like Syria.

So I do think that this is an important step. It's going to make their lives a little bit more difficult to operate and then to promote Russian interests overseas through these economic interests that they have and Putin is tied to, by the way.

BLITZER: Yes. It's certainly going to be a very, very serious slap.

The sanctions, though, do come in the same week that President Trump said getting along with Russia is a good thing. Two week after he actually called Vladimir Putin to congratulate him on his election win, to suggest the two of them get together, maybe even at the White House. So there seems to be some conflicting messages going out there.

ROGERS: Yes, there is. And it would be much better if the president would say, we're just going to keep ramping this up until we get some change in your behavior, Vladimir Putin. That would be very, very helpful. And I think you'd see that if next week or within the next two weeks they ramp it up again and then they keep ramping it up until you see a change in behavior. And what most people will tell you, Wolf, is without that continued pressure, Vladimir Putin isn't going to change. He's not going to walk away from trying to interfere with the 2018 elections.

So this cant' be in and of itself. It has to be a part of a broader plan to continue to ramp up this pressure to change Vladimir Putin's behavior.

BLITZER: And, very quickly, Mike, what happens when the Russian retaliate against American business leaders, government officials and major corporations?

ROGERS: It's -- it's likely to come. They're going to try to find some way to do it. They'll try to find the thing that pinches most. They'll probably try to get as close to Trump as they can. But when is the last time you saw anything that said "made in Russia" that you've purchased, right? They don't have a lot of oomph in that department. And that's why this hurts them more than they're going to be able to hurt us.

It will hurt some American interests, especially in the energy sector and other places, but I do believe that this, again, right step. We're going to pay a little bit of a price on the other side. But, again, this is all about ramping up pressure, which I'm finally glad the administration decided to do. It's getting close to 2018 elections and we need to send this message early. And I wouldn't stop if I were the Trump administration. BLITZER: Yes, they do sell some vodka here in the United States.


BLITZER: That's one -- one export that they have. I'll be curious to see if the president's son-in-law, Jared Kushner, is on the sanctions list that the Russian's put out because Putin's son-in-law was on the U.S. sanctions list. But we'll find out soon enough.

Mike Rogers --

ROGERS: Drink Titoes (ph), Wolf. Drink Titoes. I think that's made here.

BLITZER: Yes, thanks. All right, thanks very much for that.

[13:15:05] Also happening now, U.S. stock market taking a pretty heavy hit as China fires a new salvo in the escalating trade war and a disappointing jobs report adds insult to injury. We're taking the pulse on the trading floor with Richard Quest. He's standing by live.


BLITZER: Traders are hitting the sell button hard this hour in New York after a disappointing March jobs report and threats from President Trump that are stoking fears of a trade war with China. The Dow down 392 points right now.

The president, earlier, defending plans to slap China with $100 billion in new tariffs, tweeting, quote, China, which is a great economic power, is considered a developing nation within the World Trade Organization. They therefore get tremendous perks and advantages, especially over the U.S. Does anybody think this is fair? We were badly represented. The World Trade Organization, the WTO, is unfair to U.S.

[13:20:06] Let's go live to CNN Money editor at large, Richard Quest. He's live on the floor of the New York Stock Exchange.

Richard, if you can, give us a little fact check on the president's tweet, but also tell us what you're seeing and hearing on the floor right now.

RICHARD QUEST, CNN MONEY EDITOR AT LARGE: There are so many undercurrents, strands, difficulties concerning this trade story that it beggers (ph) belief.

I'll give you just one example, Wolf. You've got that tweet from the president, which was at about 10:30, when the market was trying to rally. That took the market lower. Larry Kudlow, the national economic director, he came out and tried to soothe the markets, saying things -- there would be unlikely to be a trade war and that the negotiations, there was no deadline. And then Steve Mnuchin, the Treasury secretary, speaking on another network a few moments ago says, there is a potential of a trade war with China. The U.S. is willing to enter negotiations, doesn't want a trade war, but there's a potential.

My point, Wolf, is that, this market, you know very well, they hate uncertainty. And the one thing that has been put on the table yesterday by the president with his $100 billion more and the Chinese saying we'll retaliate, and this morning's tweets is uncertainty. Nobody knows whether this is a negotiating strategy, whether there's a likelihood, a possibility, a remoteness of trade sanction on tariffs.

BLITZER: Yes, but it certainly could escalate into a real trade war that could be devastating not just for the U.S. and China but for so many other countries around the world.


BLITZER: The global economy could be at risk certainly as well.

The March jobs report here in the United States, Richard, also a bit weaker than expected, just over 100,000 new jobs compared to almost 200,000 that were expected. The president's top economic adviser reacting by saying the jobs are, in his words, a little sloppy right now. Walk us through these latest numbers.

QUEST: Yes, I'd say ignore them for the moment, 103,000 versus 175,000 expected. When you get that sort of disparity between the expectation and the reality, that usually means some (INAUDIBLE) event. And, in this case, it's the weather. Look at construction.

Instead, focus on the revisions of January and February. And when you see those, you see that the U.S. is still creating jobs, roughly 200,000 a month. That's exceptional job growth. Nineteen months of continuous job growth and an employment rate at record lows. It cannot continue. There simply are not the people to fill the jobs at this sort of rate. But for the time being, it's good going.

BLITZER: Yes, the unemployment rate remains at 4.1 percent, which is good.

Richard Quest, thanks very much for that.

QUEST: Thank you.

BLITZER: When we come back, standing by his man. The president backs the environmental chief, Scott Pruitt, as he takes even more heat to ties to an influential lobbyist. And sources now telling CNN that senior staff were sidelined or demoed at the EPA after sounding the alarm on Pruitt's pricy travel on the taxpayer's dime.


[13:27:25] BLITZER: President Trump is stand big his man. In this case, it's his beleaguered EPA Administrator Scott Pruitt. The president says he thinks Pruitt has done a fantastic job. As CNN has been reporting since yesterday, the White House Chief of Staff John Kelly actually would like to fire Pruitt, but the headlines keep getting worse. And the president, today, tried to shoot down reports by CNN and

others that as recently as earlier this week the president considered replacing the attorney general, Jeff Sessions, with Scott Pruitt.

CNN politics reporter and editor at large, Chris Lizza, is joining us now.

Chris, other cabinet members have been fired for less. Why not Pruitt?

CHRIS CILLIZZA, CNN POLITICS REPORTER: You know, it's a really good question, Wolf. And, remember, it's only 1:30 on Friday. So it's uniquely possible we'll get some news on that.

But let's run through -- you mentioned John Kelly being concerned that Pruitt's headlines could get worse. I don't know that that can happen. We're going to -- let's go rapid fire through a bunch of headlines about Scott Pruitt that have happened just in the last few weeks.

OK, let's start here. "The New York Post." Scott Pruitt gets more security than any EPA head ever. Why does that matter? Security costs money.

Let's go to the next one. Senators, Pruitt security included Disneyland and Rose Bowl trips. Now, maybe you need to go to the Disneyland or the Rose Bowl if you're the EPA administrator, but it seems a little odd.

OK, this one, EPA Chief Scott Pruitt took first class military charter flights. This is essentially Scott Pruitt, when he could have flown commercial, took military jets or private jets. Breaking news, that costs a lot of money.

Pruitt had a $50 a day condo linked to lobbyists. This is an amazing story and probably the most damaging for him, Wolf. An energy lobbyist house Pruitt rented a room in, paid $50 a day, but only on nights that he stayed there.

This one from "Time." Trump administration's reviewing Scott Pruitt's conduct. Yes.

Let's go to the next one. Pruitt's security detail asked to use lights and sirens through D.C. Wolf, I was driving through Washington last night. Cherry Blossom tourists everywhere. I wish I could do that. You probably shouldn't abuse that when you're an official with the Trump administration.

And then EPA officials sidelined after questioning Scott Pruitt. This is the newest one from "The New York Times." Really damaging. Essentially saying when people raise -- within the EPA raise questions about everything that we just went through, whether it's security detail, whether it's cost of his travel, those people were either removed or sidelined, which is really not the way that you should be running any administration.

[13:29:49] Now, despite all -- oh, let me do one more. Scott Pruitt under fire for giving aides raises. Sorry, I forgot about this one. This is a story that came out also this week, Wolf, in which we saw Scott Pruitt saying, I didn't do this, but that two of his aides, allegedly unbeknownst to him, got -- asked for $80,000 in pay raises that the White House did not want. So, that's a lot.