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EARLY START

Trump, His Lawyer, And Prosecutor Wrangle In Court As Sean Hannity Is Revealed As Cohen's Third Client; Trump Upset With Russia Sanctions; U.S. And U.K. Warning About Russian Hackers; Trump And Abe To Meet At Mar-A-Lago. Aired 5:30-6a ET

Aired April 17, 2018 - 05:30   ET

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


(COMMERCIAL BREAK)

[05:30:44] DAVE BRIGGS, CNN ANCHOR: Fox star Sean Hannity is forced to explain after a court case reveals he is the mystery third client of Trump lawyer Michael Cohen.

CHRISTINE ROMANS, CNN ANCHOR: Jim Comey's revenge tell-all now on sale as the fired FBI director speaks out in a brand new interview this morning.

BRIGGS: And the president reportedly holding back on Russian sanctions, even with the Russians now accused of helping block chemical weapons inspectors in Syria. Interesting, given what Nikki Haley --

ROMANS: It sure is.

BRIGGS: -- said on Sunday.

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

ROMANS: And I'm Christine Romans. It is Tuesday -- tax day. If you haven't filed them, please do --

BRIGGS: Yes.

ROMANS: -- or file an extension. It is --

BRIGGS: Thanks for the reminder.

ROMANS: -- 31 minutes past the hour, everybody.

And the battle over evidence seized in raids on Michael Cohen's home, office, and hotel room -- that battle has moved to a New York federal courtroom. Lawyers for the president, his personal attorney -- that's Cohen -- and a federal prosecutor argued over how to handle material covered by attorney-client privilege.

BRIGGS: The prosecutor wants a walled-off internal tank team to go through the material, Cohen wants an independent arbiter -- a special master to do it, and the president's lawyers want to make the decisions themselves. The judge rendered a split decision offering something for all three parties. Her rulings and what the prosecutor is calling a fast-moving case also

triggered a big courtroom surprise.

The latest now from CNN's Brynn Gingras in New York.

(BEGIN VIDEOTAPE)

BRYNN GINGRAS, CNN CORRESPONDENT: Dave and Christine, a lot unfolding in court. Essentially, the U.S. Attorney is now going to hand over all of those seized documents to Michael Cohen.

And the judge told those attorneys that they need to filter through them and see how much material -- the volume -- is really needed to be protected by the attorney-client privilege. Then, some of those materials can also be handed over to the Trump administration.

Prosecutors are also going to do their own filtering. And then, all three parties are going to reconvene in the courtroom again and that's when the judge is really going to make a final ruling on whether or not a special taint team is going to filter through the documents again before the DOJ continues their investigation.

So a lot of things need to happen before this investigation can continue -- somewhat of a stall in this criminal investigation that really set forward all these things in motion.

But, of course, this didn't all happen without a little bit of drama. If Michael Cohen and Stormy Daniels in the courtroom wasn't enough, we learned today that Michael Cohen was actually representing multiple people throughout the years, but in the last three years three people in particular.

We know about Trump, we know about the RNC head, and then we learned today that he has represented -- or he has given legal advice, rather, to Sean Hannity and that brought a little bit more drama into the courtroom.

Certainly, they talked about whether or not he had dealings with Sean Hannity, what kinds of dealings those were. Sean Hannity says that he only sought legal advice from Michael Cohen and he had nothing to do with the case that is going on at this point.

Christine and Dave, back to you.

(END VIDEOTAPE)

ROMANS: All right, Brynn. Thank you for that. A very busy day yesterday.

Sean Hannity gave his version on his Fox News program last night. Hannity downplaying his attorney-client relationship with Michael Cohen but also saying he expected their communications would be covered by attorney-client privilege.

(BEGIN VIDEO CLIP)

SEAN HANNITY, HOST, FOX NEWS "THE SEAN HANNITY SHOW": Let me set the record straight. Here's the truth.

Michael Cohen never represented me in any legal matter. I never retained his services, I never received an invoice, I never paid Michael Cohen for legal fees.

I did have occasional brief conversations with Michael Cohen -- he's a great attorney -- about legal questions I had or I was looking for input and perspective. My discussions with Michael Cohen never rose to any level that I needed to tell anyone that I was asking him questions.

(END VIDEO CLIP)

ROMANS: One of Hannity's guests, law professor Alan Dershowitz, gently scolded him for failing to disclose his relationship with Cohen.

(BEGIN VIDEO CLIP)

ALAN DERSHOWITZ, PROFESSOR, HARVARD LAW SCHOOL: I really think that you should have disclosed your relationship with Cohen when you talked about him on this show. You could have said just that you had asked him for advice or whatever, but I think it would have been much, much better had you disclosed that relationship. You are in a difficult situation now.

HANNITY: Do you understand the nature of it, Professor?

DERSHOWITZ: Yes.

HANNITY: I'm going to deal with this later in the show.

DERSHOWITZ: Yes, I understand.

HANNITY: It was minimal but I was candid about it.

[05:35:00] DERSHOWITZ: I understand. Then you should have said that.

(END VIDEO CLIP)

ROMANS: Minimal but he expected to be covered by attorney-client privilege.

Hannity made clear during the show and Twitter afterward that his questions to Cohen were almost exclusively about real estate. He said Cohen never represented him on any matter involving a third party.

Cohen's other two clients in the last year were ultra-wealthy men who allegedly had affairs with women Cohen paid hush money to.

BRIGGS: James Comey's new book now on sale in bookstores nationwide. Some customers headed out to Kramerbooks in D.C. at midnight last night to get their copies.

The former FBI director's new interview with NPR set to air this morning.

Comey says he's concerned about the president interfering with the special counsel's Russia investigation, telling NPR he thinks it's very important deputy attorney general Rod Rosenstein stays in his job "because I do think he has conducted himself honorably with respect to his appointment of a special counsel and his assertion of that special counsel's work to the rule of law. And so I really do think it would be an attack on the rule of law for him to be fired or for the special counsel to be fired."

ROMANS: Regarding President Trump's weekend tweet calling for Comey to be incarcerated, the ex-FBI director says "The President of the United States just tweeted that a private citizen should be jailed. And I think the reaction of most of us was meh, it's another one of those things.

This is not normal. This is not OK. There is a danger that we will become numb to it and we will stop noticing the threats to our norms."

The president continued his attacks on Monday, tweeting "Comey drafted the Crooked Hillary exoneration long before he talked to her, lied in Congress to Sen. Grassley, then based his decisions on her poll numbers. Disgruntled, he, McCabe, and the others committed many crimes."

President Trump has ordered a hold on new sanctions against Russia that were just announced Sunday by his U.N. ambassador Nikki Haley.

Here's what she said.

(BEGIN VIDEO CLIP)

NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: So you will see that Russian sanctions will be coming down. Secretary Mnuchin will be announcing those on Monday if he hasn't already, and they will go directly to any sort of companies that were dealing with equipment related to Assad and chemical weapons used.

(END VIDEO CLIP)

ROMANS: "The Washington Post" reports the president was upset about the sanctions rollout and the plan is now in a holding pattern.

White House press secretary Sarah Sanders tamping down expectations, telling reporters the administration is only considering new sanctions. A decision will be made in the near future.

BRIGGS: Joining us, CNN political analyst Julian Zelizer. He's historian and professor at Princeton University. Good to see you, sir.

ROMANS: Good morning, again.

JULIAN ZELIZER, CNN POLITICAL ANALYST, HISTORIAN AND PROFESSOR, PRINCETON UNIVERSITY, AUTHOR, "THE FIERCE URGENCY OF NOW": Good morning. BRIGGS: Nikki Haley has been maybe a little more hawkish than the president on some cases but in terms of policy they have been lockstep with one another.

How significant is the fact that she said sanctions are coming on Monday, Steve Mnuchin will announce it, and then the president walks them back the next day?

ZELIZER: It's very important because by doing that he basically undercuts her stature and that's harmful to him, not just to her because she has been one of the more respected voices in the administration.

But once again, the president is very resistant to do anything punitive against Russia. He's been consistent on that.

ROMANS: What is America's Russia policy at this point? I mean, I'm looking at this and hearing about sanctions and a president who has been slow to admit that the Russians were meddling in the U.S. election.

What is America's Russia policy?

ZELIZER: Well, it's a divided policy. I think there's many Republicans and many members of the administration that do want tougher sanctions. They've been trying to do this. They even supported legislation earlier to overcome the president, but the president's policy is not to do that.

I think it's pretty clear. He does not want to take a tough stand toward Russia. We don't know why -- if it's strategic, if there's another reason, but he has been pretty consistent.

BRIGGS: All right, let's circle back to our top story as the "Daily News" calls it "Oh, for Fox Sake!" The third mystery client of Trump's personal lawyer Michael Cohen is Fox host Sean Hannity. He says they're not clients, Cohen says they are clients.

What do you make of all this? How important is that development?

ROMANS: We're not clients but still covered by attorney-client privilege. How can you not really be a --

BRIGGS: That is true.

ROMANS: -- client but you're still covered by privilege?

ZELIZER: It's important because the relationship has always been troubling between Fox News and the administration -- between Sean Hannity in particular. He's been a big advocate and ally of the president.

BRIGGS: And cheerleader, in fact, yes.

ZELIZER: A cheerleader. And it's a show that basically promotes a lot of what the president has to say. And now, there's this added element that they share this person who helps fix problems and this was not revealed.

And so, it just creates more of a problematic nexus between the conservative media and the administration now to --

ROMANS: But is Sean Hannity a reporter or he is an entertainer? And --

ZELIZER: He's an entertainer. I think -- yes.

ROMANS: And so does that mean he doesn't have to disclose that he has a conflict with someone he is talking about -- not reporting about but talking about and opining about?

ZELIZER: No, because that's entertainment that presents itself as news and many people watch it and they do assume it's a news show. And he doesn't sing songs and he's not out there juggling. He's out there presenting hard-hitting news.

[05:40:09] ROMANS: The mental image though is really --

ZELIZER: Right, so -- but there's a danger because many people watch and they believe that is what's going on. And so it can undercut the credibility of the whole institution of the news, but it also has political effects.

BRIGGS: Well, and he says the media is hyperventilating and is about -- imagine the reversal if Anderson Cooper, if someone at MSNBC --

ZELIZER: Absolutely.

BRIGGS: -- was connected to a Hillary Clinton lawyer. It would be wall-to-wall scandal over there on that network.

But how significant is this federal court case involving Michael Cohen and the president's lawyers? How big a danger could it present?

ZELIZER: Well, from the way the administration's acting it is a danger. They are clearly upset about this. They're unnerved but not knowing what information is there.

And it seems just from watching that they believe there's potentially damaging information. We don't know what kind of information or what it involves but he has been at the center of a lot of Donald Trump's life -- his personal life, his business operations, and this is an area that President Trump doesn't want people looking at.

ROMANS: Once you start looking under every rock you have no idea what's going to come up.

BRIGGS: Yes.

ROMANS: I mean, Monica Lewinsky came out of an Arkansas land deal.

BRIGGS: Right.

ROMANS: I mean, that's just a reminder that once you start poking around you never know where it's going to lead.

ZELIZER: Even with Nixon, the break-in of the Watergate led to all kinds of revelations, not simply obstruction of justice --

ROMANS: Right.

ZELIZER: -- but the way he handled campaign finance and he intimidated opponents.

So that's how investigations work. You never know where they're going to go and you pick up one rock and you might discover a lot of other --

ROMANS: Yes.

ZELIZER: -- uglier things under it.

ROMANS: Julian, nice to see you. Thank you.

ZELIZER: Thank you.

ROMANS: All right.

Cyberspies from the Kremlin could be trying to hack into your home office router -- that's terrifying. We go live to London for the warning, next.

BRIGGS: And just ahead, even a price hike can't slow Netflix down. The streaming service now has 125 million subscribers, blowing away expectations. We'll tell you why, next.

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[05:46:16] BRIGGS: A joint warning this morning from the U.S. and the U.K. Russian hackers are targeting routers and other devices that control the flow of Internet traffic.

Let's go live to London and bring in CNN's Erin McLaughlin for the latest developments. Erin, good morning. What are we learning here?

ERIN MCLAUGHLIN, CNN INTERNATIONAL CORRESPONDENT: Good morning, Dave.

Well, this is really an unprecedented joint warning from both the United States and to the United Kingdom. The purpose of the warning, according to officials, is two-fold -- to warn industry that they need to step up their cybersecurity and to call out the Kremlin.

The statement reading in part, "The U.S. and U.K. governments have high confidence that Russian state-sponsored cyber actors were behind this malicious cyber activity that aimed to exploit network infrastructure devices. This activity threatens the safety, security, and economic well-being of the U.S., U.K., and international allies."

Now, network infrastructure devices which, of course, includes routers, are seen as crucial nexus points for vast amounts of Internet traffic. And according to an alert, what hackers have been doing is scanning

the Internet, finding these devices, and in some cases tricking the devices to hand over critical login details. Once they have that they control the device. In the words of one U.S. official, saying that it's a tremendous weapon, in his words, in the hands of an adversary.

Now, it's unclear how many devices have been compromised but millions thought to have been targeted. Russia denies any involvement in those cyberattacks, Dave.

BRIGGS: Terrifying news. Erin McLaughlin, live for us. Thanks.

New developments this morning in one of many controversies surrounding embattled EPA administrator Scott Pruitt. The Government Accountability Office says a $43,000 soundproof booth for Pruitt's office violated federal spending laws.

That booth, also known as the "Cone of Silence" allows Pruitt to make confidential calls without prying ears listening in. Yes, folks, this is the EPA, not CIA.

A congressional spending watchdog says Pruitt's staff failed to notify Congress before spending more than $5,000 on office improvements. The EPA rejects that interpretation, saying the law only applies to aesthetic improvements.

ROMANS: All right, 48 minutes past the hour.

Let's get a check on "CNN Money" right now.

Global stocks rising overnight as the Syria fears fade here. Wall Street closed higher after some big U.S. companies reported strong earnings. The Dow rose more than 200 points. The S&P, the Nasdaq gained nearly one percent.

Expectations for this earnings season are really high -- look at those numbers. S&P 500 profit growth expected to be 17 percent, the best since 2011. That means companies are making a boatload of money.

Pharmacy stocks jumped on news Amazon won't sell prescription drugs. There have been rumors swirling that Amazon was going to disrupt this business -- break into the pharmacy business -- but CNBC reports that it is putting those plans on hold. That sent shares of Rite Aid, Walgreens, and CVS soaring.

Domino's ramping up the food delivery war. It is expanding to the great outdoors. Domino's will now deliver pizza to 150,000 outdoor locations including beaches, parks -- even places like Central Park and the Gateway Arch in St. Louis.

Over the past decade, a growing number of delivery services have forced Domino's to innovate, including experimenting with a drone delivery and self-driving cars.

All right, even a price hike can't stop Netflix. The streaming service added more than 7.4 million subscribers in the first month of 2018, a 50 percent jump from last year -- 125 million users now, total. This is blowing away all expectations, especially after Netflix raised prices at the end of last year.

It credits its success to a blitz of original programming, including a reboot of "QUEER EYE" and the launch of a new talk show from David Letterman.

[05:50:05] Have you watched that?

BRIGGS: Not yet.

ROMANS: I watched a couple. There's a really good Clooney episode. It kicked off with an interview with former President Barack Obama.

All told, Netflix introduced 32 original series and movies during the first quarter. It doesn't come cheap. Netflix plans to spend $8 billion on content this year alone -- $8 billion on content.

BRIGGS: That is hard to grasp and they've shot original content in 17 countries. It's that growth area, international subscribers, that's just exploding 50 percent.

ROMANS: The golden age of T.V. I don't know if it's a stain (ph) but it's a golden age of T.V.

BRIGGS: Yes, that you shall see.

Ahead, the Japanese prime minister on his way right now for a meeting with President Trump. We go live to Tokyo, next.

ROMANS: Plus, Jimmy Kimmel can't resist tweaking his rival, Sean Hannity. You'll hear, next.

(COMMERCIAL BREAK)

[05:55:26] BRIGGS: President Trump preparing to welcome Japanese Prime Minister Shinzo Abe to Mar-a-Lago today. The two leaders gearing up for some heavy lifting as they tackle North Korea and trade during two days of meetings.

CNN's Anna Stewart live in Tokyo with more. Anna, good morning to you. Far more than golf on the agenda this time.

ANNA STEWART, CNN JOURNALIST: Yes, some really meaty topics on the table, as you said there. And you know what? Shinzo Abe, Japan's prime minister, has a lot more to lose at this summit than President Trump.

Politically, he's quite weak at the moment in Japan. He's embroiled in scandal. His approval rating is very low and there were lots of protests here in Tokyo over the weekend for that.

So he needs to bring home a political win, but what does that look like? First of all, making sure Japan isn't sidelined in any discussion between U.S. President Donald Trump and North Korea. Making sure the interests of Japan are like shorter-range missiles. Not just ICBMs but shorter-range missiles that threaten Japan.

Also, the issue of abductees. Lots of Japanese abductees held by North Korea for decades. That would be a good one if he can get any kind of comment or promise on that.

And then, there's the trade issue. Currently, Japan is left off Donald Trump's exemption list on steel and aluminum tariffs. He will want to somehow sidestep the issue of a bilateral deal, which is what Trump has been pushing for, and help Donald Trump get to the table to TPP without making any major changes.

And on top of all of that, it's the optics, Dave. It's making sure that he looks like a strong leader with Trump. They play golf, they have some good pictures, and at the end of the day, Donald Trump tweets something saying that Shinzo Abe is a great guy -- my friend.

BRIGGS: All right, all eyes on Mar-a-Lago today. Anna Stewart live for us. Thanks.

ROMANS: All right, 57 minutes past the hour.

Actor Harry Anderson has died, found dead yesterday in his North Carolina home. No cause of death was disclosed but a police spokeswoman says no foul play is suspected.

The 65-year-old comedian best known for playing the eccentric Judge Harry Stone on "NIGHT COURT." The show lasted nine seasons, starting in 1984.

Anderson's "NIGHT COURT" co-stars remembered him on Twitter last night. Markie Post writing she will talk about him later. But for now, she said, I'm devastated.

BRIGGS: Kendrick Lamar will have to move all those Grammy awards aside to make room for his Pulitzer Prize. Lamar's album "DAMN" capturing the prestigious award on Monday, a historic first for a rap artist. The Pulitzer award is typically given to classical or jazz artists.

Congratulations to Kendrick Lamar -- well deserved.

ROMANS: Absolutely.

All right. Late-night comedians having fun with the revelation that Fox host Sean Hannity is Michael Cohen's mystery client, especially Hannity's Twitter war rival, Jimmy Kimmel.

(BEGIN VIDEO CLIP)

JIMMY KIMMEL, HOST, ABC "JIMMY KIMMEL LIVE!": Hannity was tweeting furiously this afternoon to distance himself. As you might imagine, he wants to distance himself from a lawyer who pays -- seems -- his only job seems to be paying women out.

He wrote, "I assumed those conversations were confidential but to be absolutely clear they never involved any matter between me and a third party."

What kind of legal advice doesn't involve a third party unless maybe Sean Hannity was thinking about suing himself?

STEPHEN COLBERT, HOST, CBS, "THE LATE SHOW WITH STEPHEN COLBERT": I've got to agree with Sean on this one. The media is spinning out of control. Did you hear about this guy on Fox News who was defending Cohen without revealing that it's his lawyer, too? That's crazy.

Cohen was in court today because last week, the FBI raided his home and office and seized a bunch of files, which is trouble because the documents could shed light on some of Mr. Trump's "thorniest personal and business problems."

Thorniest? Jim, I think we've got an extra "t".

(END VIDEO CLIP)

BRIGGS: Well-played by Stephen Colbert.

ROMANS: Thanks for joining us. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. "NEW DAY" starts right now. We'll see you tomorrow.

(BEGIN VIDEO CLIP)

HANNITY: I did have occasional brief conservations with Michael Cohen.

UNIDENTIFIED FEMALE: The U.S. attorney is now going to hand over all of those -- these documents to Michael Cohen.

STORMY DANIELS, PORN STAR: He has never thought women like me matter. That ends now.

JAMES COMEY, FORMER DIRECTOR, FBI: At least in my experience, he won't criticize Vladimir Putin and that struck me.

HOGAN GIDLEY, WHITE HOUSE DEPUTY SPOKESMAN: James Comey is a disgruntled, discredited, disgraced individual.

UNIDENTIFIED FEMALE: It's going to be pretty challenging for them to keep a lid on a president who is overflowing with anger toward Comey.

UNIDENTIFIED FEMALE: There was no yelling, there was no aggression.