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EARLY START

U.S. Intel Chief Dan Coats Taken by Surprise Over White House Invitation to Putin; Deputy AG Rod Rosenstein Says 2016 Cyber Attack Not a One-time Event; Montenegro Pushes Back Against Trump. Aired 4:30-5a ET

Aired July 20, 2018 - 04:30   ET

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


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[04:30:58] UNIDENTIFIED FEMALE: Oh, gosh.

UNIDENTIFIED MALE: What's going on?

UNIDENTIFIED FEMALE: No. Those poor people.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: Breaking overnight. A summer adventure turns deadly in Missouri. 11 people are dead, others are missing after a duck boat sinks in stormy weather.

(BEGIN VIDEO CLIP)

ANDREA MITCHELL, MSNBC HOST: Vladimir Putin is coming to the White House in the fall.

DAN COATS, DIRECTOR OF NATIONAL INTELLIGENCE: Say that again?

(LAUGHTER)

COATS: That's going to be special.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: Even the director of National Intelligence surprised by the president's invitation to Vladimir Putin. Discussions with Moscow now under way, but there is very little support in Washington.

Welcome back to EARLY START. I'm Christine Romans.

BRIGGS: Breaking news to the DNI. I'm Dave Briggs. 4:31 Eastern Time. 3:30 in Missouri. That's where we begin with that breaking news. At least 11 people confirmed dead near Branson, Missouri, after their duck boat sank in rough waters at Table Rock Lake. The final moments of the tragedy caught on video. A warning, you might find these images disturbing. You can see the boat being rocked in all directions as the wind picks

up. The area was under a severe thunderstorm warning at the time with winds reaching over 60 miles an hour. There were 31 people on board including two crew members when the boat capsized. There are children, among the fatalities.

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DOUG RADER, STONE COUNTY SHERIFF: At this time, we have 11 confirmed fatalities. Of the seven that was transported, only one of them had serious injuries. There was some heavy wind and it was having problems due to -- due to the wind.

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ROMANS: Six people remain missing. The search will resume in the morning. 14 people survived, seven of them are being treated at a local hospital. Now there were life jackets aboard. It's unclear if people were wearing them. A spokeswoman for Ripley Entertainment, parent company of Ride the Ducks Branson, said it is in contact with its employees who were at the scene. Other boats on the lake did return to dock safely. The NTSB is launching a go-team to investigate.

BRIGGS: In Washington, a new stunner capping off a week where one surprise simply tops the last. President Trump hoping to welcome Russian President Vladimir Putin to the White House this fall. The announcement via Twitter. The latest sign the president is sticking by his strategy of rebuilding relations with Russia. That's in the face of bipartisan criticism over the Helsinki summit and questions about what he agreed to at that private meeting with Putin.

Director of National Intelligence Dan Coats at a security conference in Aspen said he still has no idea.

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COATS: I don't know what happened in that meeting. I think as time goes by and the president has already mentioned some things that happened in that meeting, I think we will learn more. But that is the president's prerogative. If he had asked me how that ought to be conducted, I would have suggested a different way. But that's not my role, that's not my job. So it is what it is.

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ROMANS: A visit to the U.S. this fall would be Putin's first since 2005. In another extraordinary twist, it turns out even Coats was not aware the invitation was being extended.

More on that from senior White House correspondent Jeff Zeleny.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, the White House clearly doubling down on a meeting earlier this week with Vladimir Putin scheduling another meeting this fall. National Security adviser John Bolton extended an invitation to Vladimir Putin to come here to Washington.

Now it was clear that this was an attempt from the White House talking to a variety of officials here that the president making the case he did not make a mistake earlier this week in Helsinki. Never mind the fact that they've been correcting and cleaning up reversals all week long here.

But one person at least was surprised by the announcement. That was the top spy chief, the director of National Intelligence, Dan Coats. Watch his reaction when he was told yesterday about this second invitation.

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[04:35:02] MITCHELL: The White House has announced on Twitter that Vladimir Putin is coming to the White House in the fall.

COATS: Say that again?

(LAUGHTER)

MITCHELL: Vladimir Putin coming to the White House.

COATS: Did I hear you? Did I hear you --

MITCHELL: Yes. Yes.

COATS: OK.

MITCHELL: Yes.

(LAUGHTER)

COATS: That's going to be special.

(END VIDEO CLIP)

ZELENY: He also was asked if he has any plans to resign. He said as long as he can speak the truth and seek the truth he will stay in his position -- Dave and Christine.

BRIGGS: All right, Jeff Zeleny, thanks.

White House aides are concerned President Trump will view the comments by Director Coats as a personal betrayal. That is according to the "Washington Post." One senior White House official says Coats has, quote, "gone rouge." And aides worry the president is likely to be infuriated. If Vladimir Putin does visit Washington in the fall, don't expect him to visit Capitol Hill. A spokesman for Senate leader Mitch McConnell saying there is no invitation from Congress.

ROMANS: Right before news of the Putin invitation -- the invitation to Putin broke the Senate took bipartisan action against Russia voting 98-0 to oppose Putin's proposal to interrogate U.S. officials. President Trump said yesterday he now opposes Putin's suggestion. Remember earlier he called it an incredible offer earlier in the week. White House said they were looking into the offer, now no, the president -- the president opposes it, too. The president yesterday had this reminder who he blames for the trouble with Russia.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Look at the sanctions I put on. Look at the diplomats I threw out. Look at all of the things that I have done. Obama didn't do it. Obama was a patsy for Russia. He was a total patsy.

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BRIGGS: Secretary of State Mike Pompeo rejecting critics' claim President Trump showed any weakness at his summit with Putin. On FOX News last night, Pompeo called the idea absurd.

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MIKE POMPEO, SECRETARY OF STATE: This administration has been relentless in its efforts to deter Russia from its bad behavior. We inherited a situation where Russia was running all over the United States. The president has been very resolute. He understands precisely who it is we're dealing with in Russia. He gets it. He is trying to take opportunities, places where we find we can work together, and put American position to do the things he wants to do on behalf of the American people.

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BRIGGS: Earlier Pompeo told the Christian Broadcasting Network that Russia has been trying to undermine Western democracy for years. He said, quote, "I don't expect that will stop."

ROMANS: Deputy Attorney General Rod Rosenstein also making news in Aspen announcing a new Justice Department policy that would alert the public to foreign operations targeting American democracy. It will inform U.S. companies, private organizations and individuals that they are being covertly attacked by foreign actors. Rosenstein also offered a stark warning about Russia's ongoing efforts to interfere in U.S. elections.

We get more from CNN's Evan Perez.

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Christine and Dave, Rod Rosenstein, the deputy attorney general, the top official overseeing the Russia investigation says the Russians are still trying to interfere in American elections. He says that the 2016 election was not a one-time event. Take a listen to what he had to say.

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ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL: Russian effort to influence the 2016 presidential campaign is just one tree in a growing forest. Focusing nearly on a single election misses the point.

(END VIDEO CLIP) PEREZ: And the deputy attorney general announced the findings from a Justice Department cyber digital task force. He says the Russian activity this year takes many form including attacks on the election infrastructure systems, ballot fraud attempts essentially, and targeting political organizations and campaigns -- Christine and Dave.

BRIGGS: Evan, thanks.

The Trump administration has less than a week to meet a federal judge's deadline for reuniting hundreds of migrant families. The White House says it has located 1,606 parents who are potentially eligible for reunification with their children but there may be issues with more than 900 of them, most require further evaluation. Others have waived reunification or have criminal records.

ROMANS: According to the government's latest estimate more than 2500 children between 5 and 17 years old were separated from their parents at the border. So far just 364 of those children have been reunited. Last month, the judge ordered all children 5 and older to be reunited by July 26th with their parents. The administration as you know missed last week's deadline for children under 5.

BRIGGS: OK. Major cleanup after a string of tornadoes hits the heartland. Parts of Iowa left reeling with buildings literally torn apart.

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[04:44:09] BRIGGS: Cleanup is just beginning after a series of tornadoes pummeled parts of Iowa. It was part of the same weather system that sank a duck boat in Missouri. A large chunk of this roof of an industrial and agriculture equipment company ripped off. 400 people were inside at the time. Seven taken to local hospital in central Iowa. A state of emergency has been declared in Marshall Town. That's a city of about 27,000.

In the distance there, you can see the very roof of that courthouse just blown right off. Trees also toppled over on to roads. As you can see, at least 10 people were treated at the hospital. Many customers are still without power this morning.

Let's look ahead at what's in store for Iowa and the rest of the country with meteorologist Derek Van Dam.

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, Christine and Dave.

Yesterday's severe weather threat was focused in on the Central Plains.

[04:45:03] Today that same threat of storms moves to the south and east. The Storm Prediction Center has indicated a moderate risk of severe storms today from southern Indiana, western Kentucky, and northwestern Tennessee. But that severe threat extends all the way from Mississippi and Alabama into the Great Lakes. Look at the storms firing up later this afternoon and evening, once we get the daytime heating from the sun. The other big story that we're monitoring is extreme heat from Texas

all the way to the West Coast. Look how it builds through the course of the weekend and into early next week. Triple-digit heat from Los Angeles right to Dallas. In fact, the National Weather Service has issued extreme heat warnings from Dallas all the way to Shreveport and that includes parts of southern Oklahoma and southern Arkansas.

Temperatures today easily breaking triple-digit heat from Oklahoma City to Little Rock. More comfortable though along the East Coast. Daytime highs today for New York City, 82, cooling off with chances of rain through the course of the weekend.

Back to you.

ROMANS: All right. Derek, thank you for that.

Terrible, terrible story out of Texas. Police there say a 3-year-old boy died after he being left in the back of a sweltering daycare bus for more than three hours following a field trip. The child was found unresponsive inside the vehicle when his father came to pick him up at the Discovering Me Academy in northwest Houston. The temperature inside the bus was measured at 113 degrees. Deputies are interviewing the driver and a chaperon on the field trip. Records show the 3-year- old little boy had been listed as accounted for when that group returned to the daycare facility.

Randi Zuckerberg denouncing her brother Mark's controversial comments about holocaust deniers. The Facebook CEO was widely criticized for saying some holocaust deniers, quote, "aren't intentionally getting it wrong," and that Facebook would not remove their posts.

In a statement provided exclusively to CNN, Randi Zuckerberg forcefully calls holocaust deniers and their rhetoric hateful and disgusting. She says her brother could have chosen his words more carefully, but that banning such people from social media will not make them go away.

BRIGGS: She says, quote, "While it can be appalling to see what some people say, I don't think living in a sterile Stepford-like online community where we simply press the delete button on the ugly reality of how people feel is helpful either." She emphasized the importance of a healthy debate over the role tech companies should play in policing content.

The condemnation of Mark Zuckerberg's comments about holocaust deniers prompted him to walk back his statement just hours later.

ROMANS: All right. Time for an EARLY START on your money this morning. Stock index futures are down right now after a lower close yesterday. The Dow snapping a five-day win streak. Following 135 points.

Merck is joining fellow drug companies Novartis and Pfizer pledging to limit drug price increases in the United States. Merck says it is cutting the price of a Hepatitis C medication by 60 percent. It's reducing the price of six other drugs by 10 percent each. The company said it will not raise the average price of the drugs it sells beyond the annual rate of inflation in the U.S.

This comes amid criticism of the drug industry because of rising drug prices. Pfizer was slammed by President Trump after announcing price hikes for nearly three dozen drugs. The public pressure led the company to reverse course. Trump has promised to pressure to industry into lowering drug prices. His administration didn't do much until this May when it rolled out a blueprint for increasing competition, reducing regulations and changing incentives for industry players.

But the presidential bully pulpit appears to be working here at least in these three instances where companies had plans to raise prices. Pressure from the president caused them to stop that.

BRIGGS: Speaking of pressure from the president looming large over the NFL. The NFL and the players union slamming the brakes on the league's new national anthem policy. The measure requires teams to make sure all personnel stand for the anthem or stay in the locker room or off the field until it ends. The league and the union released a joint statement last night saying they have reached a standstill agreement. That means they will reevaluate the policy.

This week Jurrell Casey of the Tennessee Titans revealed his plans to protest during the anthem and there are media reports the Miami Dolphins could suspend players who protest on the field during the anthem for up to four games. NFL preseason games begin in two weeks.

ROMANS: All right. Target is offering a back-to-school special just for teachers. The retailer is giving educators a 15 percent discount on school supplies until tomorrow. This is to help teachers who often stock their classrooms using their own money. Federal data shows nearly all public school teachers dip into their own pockets for supplies. They spend nearly $500 a year. Education advocates say the discount shows the systemic problem inside the classroom and why the push to pay teachers more has sparked walkouts across the country.

All right. So we looked into it and teachers still do qualify for that $250 tax credit when they buy their own supplies. That credit survived the chopping block in last year's tax reform bill. So teachers get their $250 tax credit.

BRIGGS: OK.

ROMANS: And at least until tomorrow at Target, 15 percent discount.

[04:50:05] You know, look, I usually don't like to weigh into editorial stuff like this, but I think every retailer should give teachers a break on back-to-school. I really do.

BRIGGS: It's a great idea. I know a lot of parents like to pitch in that after it as well.

ROMANS: Yes.

BRIGGS: And the communities to help buy some of those teachers' supplies.

Well, if you want your French Fry fix, McDonald's is helping you out. Free fries for the rest of the year. But there is a catch.

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[04:55:13] BRIGGS: Montenegro is pushing back days after President Trump suggested the U.S. may not honor its commitment to step in and defend the NATO ally. He even called the country very aggressive.

CNN's Nick Paton Walsh live in Montenegro with more.

Nick, good morning.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Dave, we've been here for a day now. And there's not much aggression frankly to be soaked up. But an awful lot of confusion a bit in some ways to try and take President Trump's comments with a laugh. But it's a very serious issue with the heart of all this. And while we spoke to the Foreign Minister Srdjan Darmanovic yesterday.

He said, you know, people are still trying to kind of laugh this off. They still believe that Article 5, that collective security element of the NATO treaty is unconditional, is fully in force for them here and he also accepted really what Donald Trump said kind of plays as music to Russia's ears. Why? Because this is a place that Russia has tried to exert influence over, over the past four years, fomenting a nationalist opposition party here, and say investigators in October of 2016 tried to organize a coup.

(INAUDIBLE) officers and Serbian nationalist to potentially take over parliament, cause unrest and stop this country from joining NATO. Well, that failed and they did join NATO in June of last year, and you may remember the fact actually Donald Trump pushed Dusko Markovic, the prime minister, out of the way in a summit in Brussels of that particular time. But still, they thought, they had collective security by being part of NATO. They're sending troops to NATO exercise in the Baltics and Afghanistan, too. But now Trump's comments have left people thinking, is it that simple and a degree of uncertainty. Back to you.

BRIGGS: Important context from Nick Paton Walsh this morning. Thank you, sir.

ROMANS: All right. Let's get a check of CNN Money this morning. Right now U.S. futures are down after a lower close yesterday. The Dow sank 135 points, stopping a five-day win streak. The Nasdaq and S&P 500 closed lower as well. Though Nasdaq still very close to record highs.

The slip came after President Trump criticized the Federal Reserve for raising interest rates. That is a rare move for a U.S. president. The Fed is designed to be independent from political influence. The tradition here is that presidents don't weigh in on the Fed and interest rates. Tesla is finally making enough Model 3s, but guess what? Customers

are tired of waiting for them. That's according to an analyst who says that 1 in 4 Model 3 orders is cancelled citing extended wait times for the car. The expiration of that tax credit that's going to expire and the fact that Tesla has not made the $35,000 base model available for purchase yet.

A Tesla spokesperson denied that Model 3 cancellations are exceeding new orders and said the analyst was using outdated wait times. Still Tesla has been struggling with the Model 3 for several months. Yesterday the stock down 3 percent.

McDonald's is offering you free fries every Friday for the rest of the year. But there is a catch. You get the fries as long as you spend $1 on the company's mobile app. McDonald's has staged a comeback in recent years after seeing a slump. Its customers demanded healthier food. Now the company has focused on growing engagement on its app in an effort to boost declining sales and appeal to younger customers and drive down labor costs. When customers place an order digitally, the order goes right to the kitchen so there's no need for an employee to take the order.

We recently talked to the Chipotle CEO, too. All of these fast food places, the fast casual places, it's all about engagement on the app. You know, digital orders so that's that.

BRIGGS: You can't get fries until after 11:00. Right? You know what I'm thinking. I'm hungry. I think it's 11:00 a.m.?

ROMANS: We got hours to wait.

BRIGGS: Probably. OK. President Trump's invitation for Vladimir Putin to visit Washington didn't just shock the director of National Intelligence, it also surprised late-night comedians.

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STEPHEN COLBERT, HOST, "LATE SHOW WITH STEPHEN COLBERT": Everybody around Trump has spent this entire week trying to put distance between Trump and Putin. So this whole sordid thing can be behind us and the administration can go back to the people's business of caging toddlers.

"I look forward to our second meeting." It's just like the exciting sequel coming out this summer. "Titanic 2: Here We Go Again."

SETH MEYERS, HOST, "LATE NIGHT WITH SETH MEYERS": President Trump said that he told Russian president Vladimir Putin not to meddle in any future U.S. elections. So good news. Apparently there are going to be future U.S. elections.

The White House announced today that President Trump plans to invite Russian president Vladimir Putin to Washington this fall in what is sure to be the worst ever episode of "Undercover Boss."

(END VIDEO CLIP) BRIGGS: Well done by Seth Meyers.

EARLY START continues right now with the reaction from that director of National Intelligence and breaking news from Missouri.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Oh, gosh.

UNIDENTIFIED MALE: What's going on?

UNIDENTIFIED FEMALE: No. Those poor people.

(END VIDEO CLIP)

BRIGGS: Breaking overnight --