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THE LEAD WITH JAKE TAPPER

Giuliani to CNN: I Am Preparing a Rebuttal to Mueller; Trump: It's Fine If We Don't Make A Deal With Canada; Trump May Impose Tariff If No Trade Deal With Canada; A Star-Studded Funeral For The Queen Of Soul. Aired 4:30-5p ET

Aired August 31, 2018 - 16:30   ET

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


JIM SCIUTTO, CNN HOST: But I want to turn now to our breaking news in the politics lead. President Trump's attorney Rudy Giuliani telling CNN that he is already preparing a rebuttal to the potential findings of the special counsel Robert Mueller. Giuliani says the document will focus on suspected collusion by members of the Trump campaign with Russia, the firing of national security adviser Michael Flynn as well as obstruction of justice allegations.

[16:30:10] Trump's legal team maintains it's still considering a presidential interview with Mueller but say they have yet to receive a response to their most recent proposal for such an interview. This comes as we learn that the former British spy behind the Trump dossier said that Russian intelligence officials believe they had then candidate Trump, quote, over a barrel during the campaign.

Let's get right to CNN's Sara Murray.

Sara, Giuliani has said that he wants Mueller to wrap up his investigation by tomorrow. That's clearly not going to happen so he is making other plans now.

SARA MURRAY, CNN POLITICAL CORRESPONDENT: That's right. It seems like Giuliani has made this calculation that if Mueller is not going to wrap up things up by the beginning of September, that he is getting out in front of it, a strategy that seems at least as much of a PR and political strategy as a legal one.

(BEGIN VIDEOTAPE)

MURRAY (voice-over): With little sign the Russia probe is wrapping up, Rudy Giuliani is hatching a backup plan. The president's lawyer telling CNN's Dana Bash the legal team is already halfway through preparing a report to rebut a number of possible findings from special counsel Robert Mueller. It's slated to include sections on everything from collusion with Russia in the 2016 election to fired national security adviser Michael Flynn, to obstruction of justice.

The report all part of Giuliani's strategy to dull the blow of whatever Mueller makes public.

RUDY GIULIANI, ATTORNEY FOR THE PRESIDENT: I'll be here with my version of the report and they'll have their version of the report. And the American people essentially are going to decide it. MURRAY: Once adamant that Mueller must wrap up his investigation well

before the 2018 midterms.

GIULIANI: If it isn't over by September, then we have a very, very serious violation of the Justice Department rules that you shouldn't be conducting one of these investigations in the 60-day period.

MURRAY: Giuliani now admitting to CNN he has no idea what Mueller's timeline is. It's customary for the Justice Department the prosecutors to go quiet for 60 days before the election.

But it's up to the U.S. attorneys to ensure they don't take overt investigative steps that could impact an election. As the investigation stretches on, Trump continuing to rail against the Justice Department.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: People are angry. People are angry.

MURRAY: Especially one of his favorite new targets.

TRUMP: I think Bruce Ohr is a disgrace.

MURRAY: Bruce Ohr is the career Justice Department official who met with Christopher Steele, the former British spy who compiled the now infamous dossier.

Ohr testifying to a congressional committee this week that Steele told him at a July 2016 breakfast that Russian intelligence believed they had candidate Trump over a barrel according to a source familiar with the testimony. A claim that's in line with allegations Steele included in his dossier. But it's broad assertion that Russia aimed to interfere in the 2016 election has been accepted as fact by the U.S. intelligence community.

(END VIDEOTAPE)

MURRAY: Now the U.S. intelligence community may have concluded that the Russia meddled in the election but the one person who questions that conclusion, of course, is President Trump -- Jim.

JIM SCIUTTO, CNN HOST: Often. Yes indeed. Sara Murray, thanks very much.

Let's go to our panel now.

Adolfo, if I could begin with you, Rudy Giuliani apparently drafting his own report to rebut Mueller. Part of the thinking here is that Mueller will not diet a sitting president based on Justice Department guidelines.

ADOLFO FRANCO, REPUBLICAN STRATEGIST: Right.

SCIUTTO: And really this is always a political question, a matter for Congress more than a legal one.

FRANCO: Correct.

SCIUTTO: Does a counter-report, in your view, work here?

FRANCO: I think it does. I absolutely think it does in this case.

One of the things just to add to the report is I don't think the president and his -- I know it's been a lot of commentary on this -- the president doesn't contest there was Russian or some type of interference in the 2016 election. The president contends that there was no collusion between the Trump campaign and the president to affect the results of the election. And that's what I think the White House is preparing a rebuttal to.

Obviously, this has been expanded to include potentially other areas well beyond that initial mandate. So I think the White House is very clearly sticking to what had -- everyone understood to be the purpose and the focus of the investigation. And in fact, Jim, to date, despite all the sources we have heard back and forth. We've heard Lanny Davis speak incorrectly previously this week and so forth, these are not corroborated including the dossier that was prepared for the Clinton campaign.

SCIUTTO: It has nothing to do with the Mueller investigation -- Mueller is not interviewing Lanny Davis.

FRANCO: No, I'm saying, these unconfirmed, these so-called sources, we haven't seen any facts to suggest that the president is --

SCIUTTO: I'm sorry, Adolfo, you're mixing two things here. The president who often serves as an unnamed source, by the way, that's an attack on journalism. It seems you're equating that with the Mueller investigation?

FRANCO: No, what I'm simply saying is that we have had so many different not corroborated sources and, frankly, stories that have come out -- now, I used the Lanny Davis thing which you're right, doesn't have to do precisely -- nothing to do with the Russia investigation.

[16:35:14] SCIUTTO: No.

FRANCO: As an example of the things are not factual at this time. And that's what I think they're going to stick to at the White House is, was there collusion between the president and the campaign and Russia? Yes or no.

SCIUTTO: Jen, is that a fair way to go about this?

JEN PSAKI, WHITE HOUSE COMMUNICATIONS DIRECTOR TO PRESIDENT OBAMA: This is the favorite talking point of all defenders of Trump, and God bless you I don't know what else you would say. I mean the fact is Mueller's investigation is ongoing. Nobody knows what he is up to or what he has aside from Mueller and his team.

This may be Russia collusion. It may be obstruction of justice. We don't know. I do agree this is a political document. FRANCO: Yes.

PSAKI: That may work with some people.

But I think you're underestimating or people are underestimating, I should say, the intelligence, I hope, of Republican members of Congress and certainly their constituents, because what Mueller will probably have is something a lot more comprehensive. What Giuliani is talking about is probably a flimsy political talking points document. Yes, it could be effective with the base. But you know he is going to be combating something Mueller comes out which we don't know what it is.

FRANCO: I hope it is.

SCIUTTO: Karine, we're coming up to the point really two months before the midterm elections here. Of course, Democrats were upset with James Comey for reopening in effect the Clinton email investigation within days of the 2006 presidential election. In your view, in fairness, are we entering a window where it would be unfair, undue, for the special counsel to release a report in that window before the election?

KARINE JEAN-PIERRE, SENIOR ADVISER, MOVEON.ORG: So I think the difference here is that on election day, when people were going out to vote, what voters had on their mind was that Hillary Clinton was either -- had been investigated or was under investigation and we didn't know the Trump Organization was being investigated. It was a very one-sided information that we were getting. And that is I think one of the biggest problems we saw in 2016.

I think what we see here from Rudy Giuliani is that -- is the Rudy show, honestly as successful as Trump university. I mean we see that in polls last week in Fox News poll show that majority -- majority of Americans are not stupid. They believe the Mueller investigation I think they should move forward. They do not believe what's happening with Rudy Giuliani who is muddying the waters and you have Donald Trump who is tweeting in the middle of the night at the break of dawn.

And you have Mueller dealing with facts. There is overwhelming evidence that they see for themselves, indictments. Plea deals. And they know that is not a witch hunt.

SCIUTTO: Sara, there is a poll from ABC News and "Washington Post" which speaks to Karine's point that support for Robert Mueller and his investigation, in fact, is rising, it is growing as the president has amped up his attacks on the special counsel. You cover this White House. You've covered this White House for some time.

Do numbers like that concern the White House, or compel -- compel them to change strategy? I'm guessing the answer is no.

MURRAY: Well, I think it has to be a little bit concerning because it is sort of a double blow. I mean, we saw the president's favorability numbers slip at the same time we saw the numbers saying most people most Americans believe that the Mueller probe is legitimate and that it should continue. Now, those numbers are very split on party lines. Republicans for the most part are not buying the Mueller probe whereas Democrats are and independents for the most part. The majority are likely to think it's a legitimate probe.

But if what the president is worried about is protecting his base, he has still got enemy on the issue of the legitimacy of the Mueller probe. The problem, of course, is you need more than just the base if you're going to win re-election. I think that the numbers for Mueller as well as the president's favorability slipping a little bit, that has got to be a concern to people in the White House right now.

SCIUTTO: Adolfo, CNN has learned that the president's lawyers now believe the hush payments paid both to Stormy Daniels and Karen McDougal which Michael Cohen, of course, implicated the president in as part of his guilty plea could be part of Mueller's eventual findings. And again in that poll, 61 percent of respondents in the "Washington Post"/ABC News poll said if the president ordered Michael Cohen to pay off these women, Stormy Daniels and Karen McDougal, that that amounts to a crime.

Do you think this president should be more concerned about the political implications of Michael Cohen's cooperation?

FRANCO: I don't for this reason. And I go back to what I had said earlier. I think the narrative which is the right narrative from the White House is going to be focused on -- and you mentioned Mueller at this time -- is what was the purpose of the Mueller investigation? It has nothing to do with Stormy Daniels or any of these other -- these other matters that have been raised in the --

SCIUTTO: Well, you know as well -- just fact check here, you know as well as me as me that the remit for the investigation says that -- you know, the Russia probe -- I forget the exact language but any other relevant matters that may come up.

[16:40:03] FRANCO: Sure.

SCIUTTO: You know, based on the Whitewater investigation, Ken Starr, Whitewater went to Monica Lewinsky, so that, by the law, if other crimes are uncovered, that's fair game for the special counsel.

FRANCO: Yes. And why there has been a lot of criticism of the independent investigators and why there was a lot of criticism of Ken Starr 20 years ago and why there's been a reluctance to do that.

So, I think that is going to be a political question. It's going to be a question of, do we really -- does it mean all -- anything that the special investigator or the special counsel I should say wants to investigate. So I think that will be a political discussion point.

But I think the more we get away from the Russian collusion, and in fact, we do -- and you're right we don't know what the Mueller report is going to be -- if it deviates from that substantially and it now goes to the matters regarding Michael Cohen, I think politically it favors the president.

SCIUTTO: Fair point.

Adolfo, Jen, Sara, Karine, thanks very much.

FRANCO: Thank you.

SCIUTTO: There's a lot more to talk about.

Back to Aretha Franklin, from former Bill Clinton to Ariana Grande, moving tributes often musical to the Queen of Soul, Aretha Franklin, in Detroit.

Coming up, performances by Jennifer Hudson and Stevie Wonder as well.

Please stay with us.

(COMMERCIAL BREAK)

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Welcome back and we were back with breaking news in our "POLITICS LEAD" President Trump just moments ago talking very tough on Canada saying he will not budge on negotiations for a new trade agreement with a longtime U.S. ally, a new agreement to replace NAFTA. CNN's Abby Phillip is at the White House for us. Abby, what did the President say?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, Jim, the President started this week announcing a new trade deal with Mexico. But of course, Mexico is only one part of the three parts of NAFTA. The other part is Canada and so far there is no deal there. Meanwhile, President Trump though continues to issue what are so -- what are not so veiled threats toward our northern neighbor. Listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You don't make a deal with Canada, it's just fine but we'll see how it all works out. I say affectionately we'll just have to tariffs those cars coming in. That's a lot of money coming into the coffers of the United States.

(END VIDEO CLIP)

PHILLIP: Now this is either a threat or perhaps a negotiating tactic aimed at getting Canada to the table and getting them there fast. We won't know for a little while now but this is the President often saying that he might prefer tariffs to getting a 3-part deal on a new NAFTA.

SCIUTTO: Yes, the President said now a few times that he will not compromise. Abby Phillip, thanks very much. Back with our panel now. Actually, Abby, just a quick follow on that because there was talk that this negotiation would be done by today, a self-imposed deadline for the administration. Does missing that deadline mean a lot? Does that mean the talks have broken down?

PHILLIP: Well today, Jim, the administration has said that they are going forward with that deadline. They issued this statement. I've notified Congress of my intention to enter into a trade agreement with Mexico and with Canada if it's willing in a timely manner to meet the standard that high standards for free fair and reciprocal trade contained therein.

What that means is that they're telling Congress they're willing to get a deal with Canada within this 90 days if Canada is on board. But there's a possibility that Canada might not get on board. They're meeting again next Wednesday with Canadian officials about a trade deal but there's a reason why there's such urgency. They're trying to get this in in the current administration the current Mexican administration which they've reached a deal with.

On December 1st Mexico's government will turn over and the administration is trying to get this in before that happens. Jim?

SCIUTTO: Abby Phillip at the White House, thanks very much. Back with our panel now. Adolfo, suppose one of the dangers here politically for the President is that tariffs like this will exact a cost on the President's own voter base. Is this President Trump's negotiating strategy for the United States dangerous for his voters?

ADOLFO FRANCO, REPUBLICAN STRATEGIST: Not at all because it's going to bear fruit. You -- the same language -- the President used the same language regarding Mexico. You could have been assertive Mexico some months ago and we made, of course, significant, have made significant progress. You know, Canadian foreign minister cut a trip short from Europe and returned because of this situation of the urgency involved. I really firmly believe if you look at the President's words careful he says a right or no well, it will end. He didn't say this was this necessarily going to be the end of the negotiation.

I think at the end the President wants fair trade, better trade, understands and a support -- supported a free trade on the fixes that are necessary. I will say this quickly, Jim, I worked on these trade agreements in the Bush Administration and have been around them for a very long period of time, nobody was talking about these fixes and now everybody agrees they're necessary until Donald Trump was elected president. So I think his negotiation -- negotiating tactics are legitimate and will bear fruit.

SCIUTTO: Jen, there was quite a remarkable moment today. The Toronto Star reported remarks that the President said he wanted off the record. According to the Star source, Trump told Bloomberg that he is not making any compromises at all with Canada in these trade talks. He suggested he was scaring Canadians by threatening them. President Trump reported saying "off the record Canada is working their ass off -- the president's words -- and every time we have a problem with a point I just put up a picture of a Chevrolet Impala here."

Now, the President is now complaining that these off-the-record comments came out. He said the following just a short time ago.

(BEGIN VIDEO CLIP)

[16:50:26] TRUMP: It said off the record and I said something strong but it's my belief. In the end it's OK because at least Canada knows how I feel so it's fine. It's fine. It's true.

(END VIDEO CLIP)

SCIUTTO: Now, there is some question as to who actually leaked those off-the-record comments there but you've worked in a White House before, when a -- when a President speaks about a close ally that way and basically says I'm not going to -- I'm not going to you know, do any talking with them. I'm just going to kind of beat them over the head. Does that work in your view?

JEN PSAKI, FORMER COMMUNICATIONS DIRECTOR, WHITE HOUSE: Not typically and I think if we are suggesting this is a you know, chess game of strategy from Trump and his team, I think we're giving him a little too much credit. I mean what we saw announced on NAFTA a couple of -- earlier this month was just a small sliver of what needs to happen. I've been involved in trade agreements and trade negotiations as well and there's a lot more that would need to happen in order for it to be finalized.

In this particular case, I think it's also important to note I worked with those Bloomberg reporters for eight years in the White House, never once did they violate anything. I said off the record anything President Obama said off the record. There's no way it comes from them and that's what he accused them of. So there's a question as to whether this was somebody in the White House, the transcripts typically go around broadly who wanted this information out for strategic reasons, for other reasons or even whether it was Trump himself because we're in bizarre land so that's possible.

SCIUTTO: Karine, despite missteps like this in your view, is it possible that the President is overall a big picture winning this argument here because the fact is that many of his voters, many working Americans do feel that they got the short end of the stick on these trade deals, jobs leaving the country etcetera.

KARINE JEAN-PIERRE, SENIOR ADVISER, MOVEON.ORG: But, Jim, there is no art of the deal. I mean, Donald Trump is very good at tearing things apart, the Iran deal, NAFTA, Paris climate deal, and he can't seem to fix them, he doesn't know how to fix them and remember he used to say he alone can fix it but you don't see that. There's a reason why the Washington Post and ABC poll today showed him it's 36 percent because people are tired of the chaos, tired of the lies, you know, tired of the racism. They're tired of it all. And that's a -- that's a terrible number for Republicans two months away from midterms to be at 36 approval rating for Donald Trump.

SCIUTTO: Quick thought if you if you want Adolfo because those numbers are hard, 60 percent disapproval, 36 percent approval. Disapproval is a high in the ABC Washington Post poll.

FRANCO: Well, that's one poll. If you took Real Clear Politics it's at 43 or 44 percent. But I won't --

SCIUTTO: It's below 43 percent out there, 42 which is not. Well, to be frank, a great number for a President -- FRANCO: Right. But it's been where he's been generally in the 40s.

But aside from the numbers, I have to respectfully disagree with my friends here on the set is. The President is doing precisely what he said he would do when he ran for president. He was against the Iran deal. I think had he backed away from that then he'd be talking about how he was a hypocrite. He was talking about these trade deals need to be torn up and they need to be renegotiated and they have been -- we have been making progress and I think the voters are recognizing that.

So when I -- when you look at Donald Trump's record, Donald Trump is doing precisely what he said he would do. And I really do believe -- I do -- I do really believe it's good to be from with -- even with friends because results are going to be seen very -- in very short order.

SCIUTTO: Well, there'll be a big test coming up in the midterms.

FRANCO: Yes.

SCIUTTO: Thanks very much to all of you. Detroit's Greater Grace Temple packed with family, friends, and luminaries honoring Aretha Franklin. Coming up, Jennifer Hudson and Stevie Wonder will perform.

(COMMERCIAL BREAK)

[16:55:00] SCIUTTO: Celebration truly fit for the queen. Thousands gathering today for an emotional goodbye to Aretha Franklin. Let's get CNN's Fredricka Whitfield, she's been in that service. She's outside the service now. Really remarkable list of tributes here, Bill Clinton, to Faith Hill, to Cicely Tyson.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: It's been extraordinary. I mean, the luminaries, the list is long and you're hearing from friends as well. And many of the luminaries were touched by Aretha Franklin in such varied ways, everything from getting a phone call from her and she inviting them over, you know, to have a meal, or how about travel with me.

And among these people, you talked about former Bill -- former President Bill Clinton who said he has been an admirer from afar for so long. In fact, calling himself an Aretha groupie. And when he was elected president, he reached out and she was part of his inaugural ceremonies as she was for three presidents over a 30-year span. So, Jim, there are still more eulogies and performances to happen this evening including Jennifer Hudson and Stevie Wonder.

SCIUTTO: Thanks so much Fredricka. Our coverage continues now on CNN with my colleague Wolf Blitzer, he's in "THE SITUATION ROOM."

WOLF BLITZER, CNN HOST: Happening now, breaking news --