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ERIN BURNETT OUTFRONT

Giuliani: Mueller Told Trump Team President Can't Be Indicted; Trump's Personal Attorney Solicited $1 Million From Qatari Government; Donald Trump Jr.'s Trump Tower Meeting Testimony; Trump Discloses Payment to Michael Cohen In Financial Report; Sources: Top Trump Aide Navarro Blew Up at Mnuchin Over Being Left Out of Talks in China; Interview with Health and Human Services Secretary Alex Azar. Aired 7- 8pm ET

Aired May 16, 2018 - 19:00   ET

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


[19:00:12] ERIN BURNETT, CNN ANCHOR: "OUTFRONT" next, breaking news. Trump's attorney Rudy Giuliani says Bob Mueller's team has concluded they cannot indict a sitting president. If that's true, is Trump in the clear? Also breaking, Michael Cohen reportedly trying to sell access to the President -- for the President to the government of Qatar and wait until you hear the price tag on this one, your jaw s going to drop. We have the breaking details.

And blow up on Trump's team tonight, his top trade adviser going after the treasury secretary Expletive-Laden. Let's go OUTFRONT.

And good evening, I'm Erin Burnett. OUTFRONT this evening, the breaking news, a surprising claim by the President's attorney, Rudy Giuliani. Giuliani is telling CNN TONIGHT that he has been told by the special counsel, by Bob Mueller's team that they cannot indict a sitting president. Giuliani saying, quote, "all they get to do is write a report. They can't indict. At least they acknowledged that to us after some battling. They acknowledged that to us."

Now, that's a pretty stunning thing to say, right? It's a conclusion that is likely based on Justice Department guidelines. It doesn't though that the President is in the clear and I want to go to Dana Bash OUTFRONT live in Washington.

Dana, you spoke to Giuliani. So, you know, explain first of all, why this is such a big deal?

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: The reason, Erin, is because as you said, it has been Justice Department guideline. It has been precedent since the Nixon years. It was a guideline written by the Office of Legal Counsel inside the Justice Department. Stating that a sitting U.S. president cannot, should not be indicted because the president has, you know, things of national security, other pressing issues that he has to deal with and he is in a unique position. That was reaffirmed by the Clinton administration, their Justice Department.

But, Erin, that has never been challenged. It has never been challenged in court and it has never been attempted. Therefore, that's why it hasn't been challenged. So it was an open question. Whether Mueller, depending on what he found, whether even finds anything worthy of indicting the president of the United States, would try to challenge that.

What Giuliani told me is that, the Mueller team informed them, you know what, there has been a debate, but we have decided we are going stick with the existing Justice Department guidelines and that means no indictment for a sitting president.

WILLIAMS: All right. So if Giuliani is giving the full story here, does this mean the president is off the hook or not, Dana?

BASH: Not necessarily because for a few reasons. First and foremost, Robert Mueller is expected to issue a pretty lengthy report and depending on what he finds, this is obviously just about the president we're talking about right now. He could refer in that report or recommend I should say, to the House of Representatives, you know, some charges. And what that means in real terms is articles of impeachment.

Now, those are big ifs but that is the way the process would go. And even not, look, depending on what Robert Mueller finds, we saw this with Hillary Clinton and James Comey. What he says in his report could be politically damming as well.

And there's one more thing, Erin, we don't though whether or not the president is going to be forced to sit down for an interview. And if he is, who knows what he says. If he's forced to say things, forced to answer questions and he doesn't tell the truth or he purges himself. That could be another issue.

And one last thing, Gloria Borger talked to a source familiar with this legal strategy who said the reason this whole question of indictment came up is because Trump's legal team wanted to hear it from Mueller. And the reason for that is because they're also preparing for a potential subpoena if the President refuses to do an interview. And so they wanted to get it on the record that the Mueller team will not indict the President because that has ramifications for a potential subpoena.

BURNETT: All right. Thank you very much, Dana. And obviously, I put the significance of this claim from Giuliani, also breaking though, this new headline. Michael Cohen trying to score million dollars, a million dollars from the government of the Middle Eastern and he said, "Hey, if you give me is a million bucks, I'll, you know, give you insight access to the President Trump's administration." This is according to the Washington Post, which is just breaking this story.

Now, Qatar said no. This development is the first time that we understand Cohen, you know, is believed to have pitched his influence directly to a foreign government, right? We know about Novartis and AT&T, Korea aerospace, but this is the first foreign government.

[19:05:06] Washington Post reporter Rosalind Helderman just broke the story and joins me now on the phone, all right. Rosalind, you know, this is pretty incredible, a million dollars. He solicited, did he wanted it according to your reporting upfront and, you know, made it after sort of meeting someone pretty casually it sounds like. Tell me what you know?

ROSALIND HELDERMAN, REPORTER, WASHINGTON POST: Yes. We understand that he met Qatari official at a breakfast during the transition, and the official who was the head of an investment authority run by the Qatari government, it's Qatar Money, informed him that they were interested in making a big investment in infrastructure in the U.S. Cohen got very excited. And in a series of subsequent meetings, started suggesting he could help the Qatar government with this investment project if they pay him $1 million up front.

BURNETT: And so, he literally has breakfast with this guy, and that this infrastructure fund comes up and he says, "hey, give me a million dollars right now and I'll give you access to the president." I mean, it sounds so absurd on the face of it, but it sounds like that's what he wanted, up front, million bucks.

HELDERMAN: That's essentially right. And it's a really interesting intermingling of government and private business. The guy who was not officially in the Qatari government accompanied the foreign minister of the country to a Trump Tower meeting. The foreign minister goes off and talks to Michael Flynn, the new national security adviser. This guy goes off and talks to Cohen about the possibility of this $1 million payment.

BURNETT: All right. Rosalind, thank you very much. And again, just to make the final point. Qatar said no. Do you know why they said no?

HELDERMAN: They didn't think this was a good idea and they declined.

BURNETT: Well, they were smarter than AT&T and Novartis. Thank you very much. I appreciate it. And OUFRONT now, former Virginia Attorney General Ken Cuccinelli and former Obama White House Ethics, our Ambassador Norman Eisen.

I want to talk to both of you about this big, this big headlines. The personal attorney for the President asking for a million dollars from a foreign government, up front, to influence the President and this news from Rudy Giuliani, so let's start with that.

Ken, if Rudy Giuliani is telling the truth and Bob Mueller's team said we will not, we cannot indict you, how significant is this news for the President?

KEN CUCCINELLI, FORMER VIRGINIA ATTORNEY GENERAL: Well, it's significant, but not shocking. As you noted, Erin, this goes back to the Nixon era. Reaffirmed in Clinton administration, so Republican and Democrat administrations have come to the same legal conclusion. So it isn't related directly to this case. It's an acknowledgment by the Mueller team that the previous assessments by the Department of Justice predecessors were correct. It's just a constitutional issue and it really leaves us today right where a lot of people thought we started in terms of what their authority was with respect to the president specifically --

BURNETT: Also, Norm -- CUCCINELLI: -- but can't tell Michael Flynn that.

BURNETT: Although, Norman, as Dana pointed out, this has not been tested in court, right? There's been an assumption, you know, as Ken points out, but it has not been tested. This has been a matter of legal debate. So if they're coming out and admitting it, we wouldn't do that. That would appear to be very significant, yes.

NORMAN EISEN, FORMER WHITE HOUSE SPECIAL COUNSEL: Well, Erin, it is consistent with DOJ policy. I think it's wrong as a matter of constitutional law and many institution scholars agree with me. The constitution does not prohibit an indictment.

However, having worked both with and against Bob Mueller, I could tell you, he is a straight shooter. DOJ policy binds him. He undoubtedly views himself, whether he personally agrees with it or not as being bound under the special counsel regulations. So he's going to follow that precedent, however wrong minded it may be.

BURNETT: Right. So you're saying you couldn't -- and he could indict. He's going to choose not to. Again, assuming that what Giuliani is representing is, indeed, how they represented it. But, norm, then what? They represent what Dana was saying if they do conclude that there's been something that happened that was wrong, they would go to the House of Representatives and recommend some sort of impeachment proceedings. That would be the furthest they would go. Does that go anywhere?

EISEN: Well, there's a lot of different ways for Bob to cut that cake, Erin. He could do a report to the House of Representatives. Ken Starr and others have done those reports in which he says. But for DOJ policy, I would have indicted him. He may find that there's alternatively. He could also go the route of treating the president as an unindicted conspirator, has Nixon was treated. That would be devastating also.

[19:10:00] So there's a lot of different ways for him to make the point. And, look, in the final analysis, it's been -- we've always known that the House of Representatives is going to have a critical role to play.

BURNETT: And, Ken, I saw you nodding when --

EISEN: Praise to him to make the point. And look, in the final analysis, it's going to -- we've always known that the House of Representatives is going to have a critical role to play.

BURNETT: And, Ken, I saw you nodding when.

CUCCINELLI: Yes. One other point if I could. Yes, one other point, thought, this could also indicate that Mueller doesn't think there's enough here worth fighting over to break with the past policies. And, you know, that's another way to look at this and Mueller's team, of course, is very tight lipped. So we don't know all those motivations and we probably won't until the end of this process. BURNETT: All right. Now, what about this headline, Norm, that's breaking here. Michael Cohen, Trump's personal attorney, when -- during the transition, government of Qatar comes in and he asked them for a million dollars up front for access and influence. They turn it down. I said and smiled and probably shouldn't have been, they were much smarter than AT&T and Novartis as seemed to be as well as other companies. But nonetheless, this is very significant. It would be the first foreign government we know off, that he solicited directly. He asked for a million dollars up front, your take.

EISEN: Well, we know Michael trouble, Michael Cohen is in a lot of trouble because in order for DOJ to have got those search warrants for an attorney, they had to meet such high internal standards there, and then persuade a judge also. So -- and now, the reasons for the trouble are coming up. This shakedown is consistent with what we've seen of the others, you're right. There's ex-executives at AT&T and Novartis who wish they had been as strong as Qatar in turning this down.

But what it shows is a pattern of corruption on the part of Mr. Cohen. And, Erin, the important thing is, it's not limited to Michael Cohen because the President is taking unconstitutional foreign government cash and benefits. He set a tone of benefitting himself and his family in the presidency and it spread like cancer. No wonder Michael Cohen was doing the same thing. The tone at the top is grab all you can.

BURNETT: Ken, is that true? And how much trouble is Michael Cohen in?

CUCCINELLI: You know, Norm, who I, whose perspective I usually respect, even if I don't agree with it. I think that was a wild reverse speculation. And, you know, we're talking about a headline that relates back to the transition period.

And I heard Rosalind Helderman, somebody I know as a reported, tell us that he went to Qatar and tried to get them to pay him a million bucks and to share his perspective on the President. And I think you were right, Erin, to say AT&T and Novartis wish they would done what Qatar did. I think this was more slimy work by Michael Cohen, attempted that and in this case, failed, but I don't think agree with Norm's reverse assessment related to the President.

Michael Cohen has demonstrated that he is his own personal slime machine. And this just fits right in that model.

BURNETT: Right. That I suppose you both agree with. Thank you very much.

And next, never before seen details of the Trump Tower meeting with the Russian lawyer and the Trump team's surprising reaction at the time revealed for the first time tonight. Plus, President Trump admitting on paper and we have the papers right here, he repaid Michael Cohen. Does this mean the president always knew about Stormy Daniels' hush payment? And the clash on Team Trump, the president's top trade adviser lashing out at the treasury secretary. (COMMERCIAL BREAK)

[19:17:09] BURNETT: Breaking news revealed, Donald Trump Jr.'s much anticipated testimony about that infamous Trump Tower meeting with the Russian lawyer who have promised dirt on Hillary Clinton. The big question is whether Donald Trump himself, not Jr., himself, the now president, knew about that meeting.

Trump Jr. says he didn't tell his father, but there was a mysterious phone call that Trump Jr. made to a blocked number, right after he learned more about the meeting and, you know, right before the meeting. When he thought that he was going to get this dirt. And it raises a lot of questions tonight. Sarah Murray is OUTFRONT.

(BEGIN VIDEOTAPE)

SARAH MURRAY, CNN CORRESPONDENT (voice over): The Senate Judiciary Committee releasing approximately 2,000 pages of interviews, shedding light on the June 2016 Trump Tower meeting between Trump campaign officials and a Russian lawyer. In his testimony, Donald Trump Jr. says he was interested in listening to information, but claimed he didn't know it came from the Russian government. Saying, "I had no way of assessing where it came from, but I was willing to listen."

He testified he told Campaign Chairman Paul Manafort and Trump's son- in-law, Jared Kushner, about the meeting, but says he didn't tell his father about it or the offer of incriminating information on Clinton. "I wouldn't bring him anything that's unsubstantiated, especially from a guy like Rob before I knew what it was about myself," Trump Jr. testified. Rob Goldstone, the British music publicist who arranged the meeting, testifies that he expected something big. Perhaps a smoking gun.

"I'm setting up a meeting for someone that is going to bring you damaging information about somebody who was running to become the president of the United States. I thought that was worthy of the words smoking gun." Instead, the Russian lawyer, Natalia Veselnitskaya, begun talking about Russian adoptions. After the meeting, Goldstone says he immediately called Emin Agalarov, the Russian pop star who would ask Goldstone to set a meeting.

Goldstone's message, "This was the most thing you've ever asked me to do. I've just sat in a meeting about adoption." Trump Jr. testified that Goldstone apologized to him for wasting our time. Trump Jr. says he never told his father about the meeting. But on June 6th, shortly after the meeting was arranged, Trump Jr. made an 11-minute phone call to a blocked number.

The former Trump campaign manager Corey Lewandowski testified that to House members that the President's primary residence has a blocked number. When the meeting first came to light more than a year later in a July 2017 New York Times story, the Trump team was left flailing for a response. Ultimately, they crafted a misleading one. Aboard Air Force One as the President returned from the G20 Summit in Germany, saying the meeting focused primarily on adoptions. There was no mention of dirt on Clinton. The reason Trump Jr. accepted the meeting. As the special counsel probes the meeting and the statement that followed, it's still unclear how involved the President was in crafting it. Trump Jr. testified his father may have commented through Hope Hicks, the former White House communications director, casting it as a collaborative effort with attorneys.

[19:20:12] He said he did not request his father's assistance, saying, "Hicks asked if I wanted to actually speak to him and I chose not to because I didn't want to bring him into something that he had nothing to do with."

Now, in a statement released today, Donald Trump Jr. described his testimony as candid and forthright, but there are some Senate Democrats who do not agree and say they have more questions for Donald Trump Jr. Erin?

BURNETT: All right. Thank you very much, Sarah. And OUTFRONT now, former Assistant U.S. Attorney for the Southern District of New York, Harry Sandick, and former Federal Prosecutor Laura Coates, thanks to both.

Harry, you're here, let me start with you. Donald Trump Jr. says he didn't tell his father about the meeting, OK, he's been adamant about that. Three days before the meeting, this is June 6th. He gets off a phone call. That phone call is about the meeting, right? This is when the meeting is. We've got dirt on Hillary Clinton, great, bring it on. I want to hear what you've got, right. This is where we are at that moment.

Then, after this phone call in which he talks about meeting, he makes a second phone call immediately. It's 11 minutes and to a blocked number. He says he doesn't remember who that call was with. We know Trump's residence has a blocked number. How important could this call be?

HARRY SANDICK, FORMER ASSISTANT U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: I think it could be very important to demonstrate if it was in fact to the president. Whether he knew about this meeting and the subject matter of it, it's a little bit of pretend play that we keep calling it a blocked number because if the Mueller investigation wants to find out who that is, they can get a subpoena to the phone company.

It wasn't blocked from the phone company. The phone company put the call through. So this is knowable. And it may already be know by the Mueller team.

BURNETT: Which is significant, Laura, that what Harry saying. That this is knowable.

LAURA COATES, FORMER FEDERAL PROSECUTOR: Absolutely. Because remember, we are in a little bit of a reactive mode, trying to uncover what it is the Mueller team already knows. And this jigsaw puzzle piecing together, that we have from the trend that was allowing us to get a clearer picture, but what you're seeing and really is not what we do not know of what we can't discover. What you're seeing is, you've gain the clear picture of why things were done.

We know what Donald Trump Jr. anticipated. We know what happened as a result. We're getting a clearer version of what his motivation would be. The last question we have to fill in here is, who else knew about it. And even if Donald Trump was not directly told, remember, you've got Paul Manafort, the chairman of this campaign in the room, you've got Jared Kushner, his son-in-law and his own son in the room. It's almost implausible to suggest that this would not, you know, the president of the united states would have known something about.

BURNETT: Right, which is, you know, the point, Laura makes, I mean, Harry, it does impossible. And it also seems impossible if he gets off the phone call about the upcoming meeting, and we know that's what it's about. And immediately after makes an 11-minute call to a blocked number, and now he saying gosh, I don't recall that one. That also seems like too much to swallow.

SANDICK: Yes. There was a lot of, if you look through the transcript, there were a lot of I don't recall what happened. And., you know, look, if you really don't recall that's an honest answer. But if you say I don't recall and you do recall, that's a false statement to Congress. So you're not allowed to do that, obviously.

BURNETT: And, Laura, there's also, you know, as we know, been so much discussion, right, about the misleading statement, right, that came after the trip from Air Force One and the President's involvement in it, right? There was a statement about the meeting which was misleading. And President Trump himself, you know, involved with that, apparently. Trump Jr. said his father, quote, "We are learning here in the transcript", quote, "may have commented through Hope Hicks," who was then also on Air Force One and involved in crafting that statement. What do you make of that and Don Jr., Laura, saying I didn't ask for his help, but he may have been involved?

COATES: This is such a sloppy job of trying to have plausible deniability that is completely laughable, Erin. The idea that well, he may have been told by the person who is his right hand woman, who was a direct contact and in charge of this sort of thing, he may have talked to her. And I can give you one person removed, perhaps then, we can have plausible deniability. It's not how it works.

It all says, there was a convoluted attempt by Donald Trump Jr., they comments like, well, counsel may have been involved. Remember, there was lot of backlash at that time of his testimony that he was trying to assert an attorney client privilege in a laughable way. He did not apply the circumstances here. So yet again, you have Trump Jr. floundering, almost contorting himself trying to hedge in a way that's only going raise suspicion.

BURNETT: And, Harry, before we go, Bob Mueller today we're learning had another subpoena. The former Social Media Adviser to Roger Stone, his name is Jason Sullivan. But Roger Stone, obviously, of Guccifer 2.0 and close adviser to the President. Roger Stone, not yet such that we know, has not been questioned by Mueller. But getting to a social media adviser, significant? SANDICK: I think it is significant. We know he had this tweet about Podesta being in the barrel soon, that came just before Podesta's e- mails were release. This is the kind of thing you do if you want to show that the tweet actually came from Stone and not from another person off to the side who's just kind of managing an account.

[19:25:10] So you want someone who can say, Stone has his phone. He puts his tweets on. If that was on his Twitter account, it's because it's something he said. And then, you can use that as evidence against stone. If it was done by someone else, who wasn't working for Stone, you couldn't necessarily use it against Stone. It will be much harder.

BURNETT: All right. Thank you both. And next, the President admits to repaying Michael Cohen, a payment that was originally admitted from the President's financial disclosure form. Could this lead to more legal trouble for the President and for Cohen? Plus, a blow up on Trump's team of advisers, who was involved and what was this blow up about?

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

BURNETT: Breaking news, the President officially admitting his payment to Michael Cohen. The White House today releasing 92 pages, sorry, I've got them ready here, 92 pages of financial disclosures. This is a disclosure for 2017, as you can see signed right here by the President. And tucked away at the bottom of page 45, sort of a footnote, the formal admission that the President paid Michael Cohen back for the $130,000, quote, "in the interest of transparency while not required to be disclosed as reportable liabilities on part 8 in 2016, expenses were incurred by one of Donald J. Trump's attorneys, Michael Cohen.

Mr. Cohen, sought reimbursement of these expenses and Mr. Trump fully reimbursed Mr. Cohen in 2017. The category of value would be $100,001 to $250,000 and the interest rate would be zero.

[19:30:00]

And, of course, expenses were incurred in 2016 when Stormy Daniels was actually paid and the, of course, the President did not include them in his 2016 financial disclosure report.

No mention of the Stormy Daniels debt to Michael Cohen, when you're required to report debt, not just payments, right? So, why is this?

Well, for the second straight day, there has not been a White House press briefing and president himself today refused to answer questions.

(BEGIN VIDEO CLIP)

REPORTER: Mr. President, why did you amend your financial report today? UNIDENTIFIED FEMALE: Let's go! Let's go! Let's go!

(END VIDEO CLIP)

BURNETT: It's not just the American people who deserve answers to that question. The government's top ethics watchdog wants them, too. The acting director firing off a letter to Rod Rosenstein suggesting Rosenstein may want to look into the Cohen payments, basically saying the Department of Justice may want to look into this.

It's a significant thing and it's in part because honesty does matter.

OUTFRONT tonight, Walter Shaub, former director for the Office of Government Ethics, Gloria Borger, our chief political analyst, and Larry Noble, former FEC general counsel and ethics official.

Walter, obviously, this disclosure, 92 pages and there's a lot in here, let's talk those specifically about what you see in here about Trump paying Michael Cohen for Stormy Daniels. We have that disclosure on page 45.

WALTER SHAUB, FORMER DIRECTOR FOR THE OFFICE OF GOVERNMENT ETHICS: That's right and last year, it was admitted. I signed last year's report and I can tell you right now, if I had known that he omitted this, I would have said the same thing that the OGE's current acting director did, which is that this is reportable and it's material to the decision to certify it. So, I would have refused to certify it.

There was no getting around certificating it and I'm another person at the Campaign Legal Center, (INAUDIBLE) wrote an op-ed that came out Monday, warning the president that he's out of loopholes. He had to disclose this thing.

And so, he did, but it's terrible that talking about a terrible message, the tone from the top for the other 25,000 people who have to file financial disclosure reports, that he's saying, I didn't have to report this. Yet on the front cover page, yes, you did. He knew for a while that the position was reportable and still wrote a note, it's not reportable, but here you go.

BURNETT: Yes, completely flaunting what they're saying, Larry. I mean, when you look at this, if they're able to determine, hey, he lied, knew about this last year and it wasn't included. Could he face charges?

LARRY NOBLE, FORMER FEC GENERAL COUNSEL AND ETHICS OFFICIAL: He could. And we get back in that discussion of whether the president is indictable. He could face charges. There could be civil penalties associated with this.

But I think it really just fits into a larger narrative, about what's been going on with this administration that you have to drag each fact out of them. I don't think we actually know all the facts behind us at this point.

BURNETT: Right. NOBLE: But yes. It is a violation to falsify a report. So if he had to report it in 2016, it looks like he should have, then he has a problem.

You know, there's also a campaign finance problem with this. Now, he's now admitted that he paid Michael Cohen back for an expense that was campaign-related. And that also been reported on Trump's campaign reports. It was also an excessive contribution by Michael Cohen.

So, they're in a position that each step they take, they're causing themselves problems, because they've created this web around them that any way out is going to cause them legal problems.

BURNETT: And, Gloria, you know, I mean, again, the president's note, I read, right, in summary, in the interest of transparency, while not required, right, this is a he doth protest too much, right? Transparency not required. You know, we're going to put this stuff in here about Michael Cohen and then today, the Office of Government Ethics today, OGE's concluded the information related to the payment made by Mr. Cohen is required.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, why didn't president's attorneys describe why they believe it's not required? Well, we still haven't gotten an answer to that question. I'm sitting with two experts here. Maybe you folks can tell me.

Maybe they would make the argument that the president did not know that payments were made last year. I mean, we -- the president's been all over the lot on this, as you know. On April 5th, the president denied knowing about any payment, as we know, and then Rudy Giuliani changed that story, so maybe they can make that argument.

But I want to know what's the reasoning they say that they are not required to disclose like everybody else in the world is.

BURNETT: Right, and as Gloria mentioned this, so, Walter, let me go there. Back on April 6th, the president was asked, did you know about this payment, right? He was asked by the American people, by reporters, and here's how he answered the question. He was very definitive.

(BEGIN VIDEO CLIP)

REPORTER: Mr. President, did you know about the $130,000 payment to Stormy Daniels?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No.

(END VIDEO CLIP)

BURNETT: Obviously, Rudy Giuliani, then 27 days later on May 2nd came out and said that was not true to Sean Hannity.

[19:35:04] Here he is.

(BEGIN VIDEO CLIP) RUDY GIULIANI, PRESIDENT TRUMP'S ATTORNEY: The president repaid it.

SEAN HANNITY, FOX NEWS HOST: Oh, I didn't know -- he did?

GIULIANI: Yes.

(END VIDEO CLIP)

BURNETT: All right.

So, it seemed Giuliani made a gaffe, right, Walter, but, you know, he's telling our Dana Bash tonight it wasn't a gaffe. He did it because he knew that that was going to be disclosed in this financial disclosure report. He was trying to get ahead of it.

"The New York Times" reports that the president knew about the payment months before he went on Air Force One, and according to their reporting, lied to the American people. So, we still don't know exactly when he knew, but we knew he knew when he said he didn't.

SHAUB: Yes, we know he knew when he said he didn't. So, that tells us how much he's to be believed on this topic. And let's remember, he didn't file last year's financial disclosure report until June 14th 2017.

And on that same show you just run a clip from, Rudy Giuliani said that he started repaying Cohen in early 2017, in the first couple of months. So, we're to be expected to believe that Trump was repaying a debt he didn't know he had. That just doesn't make any sense logically at all.

BORGER: And Giuliani described it as sort of a payment plan, right? That Trump was paying what was -- retainer, $35,000 a month. And that was what he paid Cohen and the money came out of that. That's kind of not what's on this form.

There's another question. How did he pay for this and how much was it part of something else or was it just a check for $130,000. We don't know.

BURNETT: Right. I mean, they're not even -- they don't disclose exactly how it was paid, you know? And hey, in the interest of transparency, we're not required to do it. Well, then, hey, you got nothing to hide. Why not tell us? They don't.

All right. Thank you all.

And next, a blow up between two key members of Trump's team. New information on what it was about, plus the president lashing out at reports he's caving to China. The reporter at the center of Trump's fury tonight, OUTFRONT next.

(COMMERCIAL BREAK)

[19:40:41] BURNETT: Breaking news blow up, a source confirming to CNN tonight that White House trade adviser, Peter Navarro, who was central to the China negotiations erupted at the Treasury Secretary Steve Mnuchin on the sidelines of trade talks earlier this month with China.

White House reporter, Jeremy Diamond, is OUTFRONT.

And, Jeremy, you're learning more about this blow up, which was sounds like it was pretty incredible and it could have a whole lot of implications.

JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: Yes, that's absolutely right, Erin. We know that Peter Navarro and Steve Mnuchin have been off and on again opposite ends of the trade debates within the White House. They were on opposite ends, for example, of that steel and aluminum tariff decision, with Peter Navarro, a nationalist, supporting it, with Mnuchin opposing.

But two sources are now telling us that those tensions hit a new peak during these trade negotiations in Beijing earlier this month. Apparently, there was shouting. There was cursing when Navarro approached Steve Mnuchin on the sidelines of these talks to express his frustrations with the direction of the talks and the fact he was having more of these one-on-one meetings with the Chinese Vice Premier Liu He rather than these broader team meetings.

And one source does stress this took place outside of the view of Chinese officials, outside of a building where these negotiations were taking place. But it's important to note the timing of this, Erin, of course. This takes place on the eve of the next round of trade negotiations with China, with the Vice Premier Liu He coming to Washington tomorrow to pursue those discussions.

As of now, Peter Navarro is not listed on the official delegation to meet Lie He. A senior White House tells us he will take part in the discussions however, but we will have to wait and see whether he's actually part of those direct face-to-face negotiations -- Erin.

BURNETT: All right. Thank you very much, Jeremy.

And I want to go straight now to "Washington Post" columnist Josh Rogin who's also been working on this story. And, Josh, what have you learned from your sources about this, you heard Jeremy talking about curse words, this blow up?

JOSH ROGIN, COLUMNIST, WASHINGTON POST: Well, it's not the first or the last time that Steve Mnuchin and Peter Navarro have had words. And let me assure you, they have both had words with each other. I mean, let's face it here, these debates can get pretty heated and by the way, if you flew all the way to Beijing for the meetings with the Chinese and then weren't allowed into the meetings with the Chinese, wouldn't you be upset? I know I would, right?

So, you've got this situation where this guy, Peter Navarro, who's done nothing for 20 years but warn and think and write about the economic confrontation with China, that we're in right now. And all Steve Mnuchin is doing is trying to keep him out of the meetings, right? So, what's all that about?

You've got two wars going on. The economic war between the United States and the people who probably of China and the war inside the Trump administration about how to fight the first war, all right?

BURNETT: Yes.

ROGIN: And the president stuck in the middle. It's kind of a mess.

BURNETT: When you have all these internal fights, I mean, we just keep hearing about it, this chaos and fighting. You know, Josh, you've also been reporting today about the trade talks. That China's given the U.S. a list of demands for the talks and one of them pertains to the technology firm ZTE that Marco Rubio said is an espionage throw to the United States. You know, you say, look, that China wants breaks for ZTE and the United States, where, you know, they have sold 55 million phones, right?

The president fired back today on Twitter at you saying "The Washington Post" and CNN have typically written false stories about our trade negotiations with China. Nothing's happened with ZTE except as it pertains to the larger trade deal, as he continued on to defend himself.

So, is he mistaken or is he lying?

ROGIN: Yes. I mean, right, he's either mistaken or he's lying, right?

BURNETT: Yes.

ROGIN: I'm not sure which is worse to be honest with you. Do you want a president who doesn't know what's going on in his own trade negotiations?

BURNETT: About a company that tweeted explicitly about to be clear, right?

ROGIN: And he's not just say that "The Washington Post" is wrong. Commerce Secretary Wilbur Ross said to the National Press Club yesterday, we received a list of Chinese demands. They're totally different than our demands, right? He said that on the record in front of a lot of people. There were cameras there and everything.

So, somebody's not talking to somebody, right? And so that gets to the basic point here, which is that you have this guy, Mnuchin, who wants to cut a deal. He looks at this battle with China, he's like, oh, let's not fight this. Let's back down now and you've got guys like Peter Navarro who's like, no, no, we have no choice but to fight this.

[19:45:00] And like Marco Rubio who says this is our national security, we've got to do it. Not only that, we should probably win.

BURNETT: All right. Thank you very much, Josh Rogin.

And OUTFRONT next, President Trump says he's fighting the drug industry over skyrocketing prices, but is he? Health and Human Services Secretary Alex Azar is OUTFRONT next. And the White House now insisting it wasn't caught off-guard by North

Korea's threat to cancel the summit with President Trump. That happens to be the polar opposite of what they said 24 hours ago. Why an alternative fact op this one?

(COMMERCIAL BREAK)

BURNETT: Tonight, the White House talking tough on drug prices. The administration revealing its plan to cut the high cost prescription drugs. And the plan has a few strategies to try to cut cost. They say they're going to have more competition, better negotiating, lower the list prices of drugs with incentives.

OUTFRONT now to talk about the plan, Health and Human Services Secretary Alex Azar.

Secretary Azar, thanks so much for your time tonight.

I know you had a chance to talk a little bit about this. I want to get straight to some of the criticism of your plan. You and the president spoke about it and an analyst from RNC then said the speeches were quote largely benign and that the actual content was limited, which went with some of the headlines we've seen about your proposal. One saying Trump's plan to lower drug prices spares pharma industry. Another, Trump's plan leaves industry relieved.

Why is all of this wrong?

ALEX AZAR, HEALTH AND HUMAN SERVICES SECRETARY: Well, Erin, first, great to see you again and in terms of those critiques, let me just say, they can't read they can't listen and they're not understanding. This is the most far reaching comprehensive plan to get at drug price reduction in American history.

The president is bringing as he promised, the power of Medicare to negotiate on behalf of seniors. We're going fix negotiation in our retail drug program Part D and unleash the drug plans that we have working for us to get better rebates where right now, they're hamstrung by the government and we're going to introduce negotiation in part B. Those with the drugs you get at your doctor's office where the doctor actually infuses you.

We're going to be introducing competition there where right now, there is none and no discounting. So, they ought to be paying very close attention and I think over this week, as I've made clear, the force and vigor with which we're going to be approaching this, I think it has gotten their attentions.

[19:50:04] BURNETT: So, are you committed to Medicare Part D. You're going to have all of that negotiated?

AZAR: So, Medicare Part D, right now, we have what are called six protected classes which are very important classes of drugs where unfortunately, the drug plans really have been disabled from negotiating against big pharma and getting rebates. We're going to unleash them so they can stop getting zero to six percent rebate and start getting 20 percent, 30 percent, 40 percent rebate, they get on the rest of the plan and that the commercial markets get.

BURNETT: So, how much are prices going to come down?

AZAR: Well, we think within Part D, that's $30 billion spent in Part D that's currently getting average of six percent discount. It ought to get 20 percent to 30 percent discount there. And then in Medicare Part B, which is those physician administered drugs, that's about $30 billion to spend also, getting zero rebate. That ought to also be getting into that 20 percent to 40 percent range.

BURNETT: So, but -- for part D alone, the government spent, what, $130 billion, $140 billion in one year. But you're only mentioning $30 billion of that. So, it's not all going to get cut?

AZAR: Well, it's not all going to get cut. We are still going to be paying for drugs, that $30 billion spent that has a rebating increase from 6 percent up to over 30 percent. That is a significant percentage reduction.

BURNETT: It is. But what about the other hundred billion dollars in drug cost out of Medicare Part D. I'm just saying, are you going to fight for those costs to come down too? You're not putting --

(CROSSTALK)

AZAR: Well, across the board, Erin, the tools that we are giving these part drug plans will enable them to negotiate harder.

One of the things that we're going to do right now, we approved formularies. This is how the drug plans hit big pharma and negotiate it. They say, you've got to do this drug and this drug and this drug, for instance.

BURNETT: Yes.

AZAR: What happens right now under the existing rules is if a patient gets any of that overturned with a medical exception, the plan gets dunged, the star rating for Medicare gets hit, and they can get sanctioned by us. We're going to say, if you are following -- we're working and saying, if you are following the formulary that we have approved, you are not going to get dunged. So, you can negotiate hard, you can hold firm your formulary and you can demand big rebates.

BURNETT: One of the things that is not in your proposal is to allow drug imports from Canada. We all know of a lot of Americans who had to go across the border to get drugs. A Harvard study recently found, Secretary Azar, that a popular asthma drug, Advair, many of our viewers have heard of it. After discounts, you pay $155 a month in the United States, you only $74 in Canada.

Why not allow those imports to come in?

AZAR: Well, you know, the challenge is that this is a canard. This idea of importing drugs from, quote, Canada, it's neither safe nor effective. When people talk about buying their drugs over the Internet from Canada, these drugs are not coming from Canada. They're coming through Canada from China, and other places.

BURNETT: Really, all of them?

AZAR: And these are -- yes, these are counterfeit drugs. These are not people -- these are not the drugs that Canadians are getting in a brick and mortar pharmacy in Canada.

BURNETT: But even in their brick and mortar pharmacy, that's what I'm trying to say, they pay $74 and we pay $155. So, even the drugs that you're saying are high quality, they're paying half the price.

AZAR: Erin, here's the thing. What you are talking about is a cheap gimmick, because even if we could wire up the system so that you could get from their brick and mortar pharmacies and our brick and mortar pharmacies, that takes the cooperation of Health Canada to do that. They are using socialized pricing, rationing of drugs and access to their citizens. If America were to wire that up, that drug supply, there are not enough drugs in Canada to get here. We would take all the drugs from Canada. Canada is not going to let that happen, and the pharma companies aren't going to supply Canada or Europe with those drugs.

So, this is a facially appealing on day one, but a gimmicky approach that doesn't deliver results. And President Trump and I are working to deliver real results, real savings, effective, safe for our people.

BURNETT: Secretary Azar, thank you for your time tonight. I appreciate it.

AZAR: Thanks, Erin.

BURNETT: And next, is President Trump's historic summit with North Korea about to fall apart?

(BEGIN VIDEO CLIP)

REPORTER: Mr. President, do you think the North Korean meeting will still happen?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We'll have to see.

REPORTER: We'll have to see?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BURNETT: New tonight, the White House scrambling to save the summit with North Korea. Kim Jong-un, of course, threatening to walk away. National security adviser John Bolton said he called his South Korean counterpart today. He believes the summit will still happen. Trump says only time will tell if Kim Jong-un is bluffing or not.

(BEGIN VIDEO CLIP)

REPORTER: Mr. President, do you think the North Korean meeting will still happen?

TRUMP: We'll have to see.

REPORTER: We'll have to see?

TRUMP: We'll have to see.

REPORTER: Is Kim bluffing?

TRUMP: We'll see what happens. We'll see. Time will tell.

(END VIDEO CLIP)

BURNETT: OUTFRONT now, former CIA operative Bob Baer.

And, Bob, you know, today, the White House said, oh, it fully expected Kim Jong-un to make this threat. Last night, there was a totally different story. You all need to look at their statement to know that wasn't true. They sort of like -- we've got to look into what -- this is a North Korean media report. We got to look into it. CNN reported they were completely blindsided.

You know, do you think -- why would they change their story on this?

ROBERT BAER, FORMER CIA OPERATIVE: Well, I mean, look, he is shooting from the hip, I'm talking about Trump.

BURNETT: Yes.

BAER: This was not prepared by the State Department. It was not prepared by the CIA.

Kim Jong-un is not going to give up this nuclear weapons as of today. And, you know, what is going to come out of the summit would be a publicity stunt, mainly. I mean, but right now, the terms of the agreement are not in place. I have never seen a summit ever succeed if the agreement was not made in advance.

And we also have John Bolton saying, look, it's going to be like Libya in 2003. But look what happened to Gadhafi. It's not very reassuring to the North Koreans.

BURNETT: Yes.

BAER: So, there may be a summit, but if anything comes to this, I'd be very surprise.

BURNETT: And, you know, so, look, Kim Jong-un said we're not going to do the meeting if you demand that we immediately dismantle our nuclear problem, which of course is exactly what the president of the United States has said he's demanded, right? In fact, today, he said that's what he's demanding. Here he is.

(BEGIN VIDEO CLIP)

REPORTER: Will you still insist on the denuclearization of the Korean Peninsula?

TRUMP: Yes.

(END VIDEO CLIP)

BURNETT: Now, Bob, we've got satellite images of their big nuclear test site. And they are dismantling. We know they had seismic issues, so whatever their motive may be, it looks they are dismantling there.

Is this proof at all that they're actually going to dismantle, denuclearize or not?

BAER: No, that site, Erin, collapsed. And they have no reason to keep it up. And they have a lot of sites. You know, I go back to the inspections, North Korea opening that country for inspections, to see if they move the stuff out of the site to somewhere else? I don't see it happening right now.

I'm just very negative about this whole thing and I think the president is going to be embarrassed at the end of the day if he goes to Singapore and this whole thing blows up.

BURNETT: Because the bottom line is, they could move the stuff or they're going to keep the documents, like obviously, Israel is saying Iran, right? They have nuclear -- they are nuclear power unlike Iran. They are not going to give it up.

BAER: No, they never -- I guarantee you. I will never talk about North Korea again if it turns out that they give up their nuclear weapons as a precondition. I just don't see it happening.

BURNETT: All right. Bob Baer, thank you.

And thanks to all of you.

Anderson is next.