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EARLY START

Major Russia Probe Developments Expected Today; Heather Nauert Set To Be Named U.N. Ambassador; Another County Under Scrutiny In North Carolina House Race; U.S.-China Turmoil Expands. Aired 5:30-6a ET

Aired December 7, 2018 - 05:30   ET

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


[05:30:00]

DAVE BRIGGS, CNN ANCHOR: Breaking overnight, two former Major League Baseball players killed in a car accident.

ROMANS: And a stunning announcement out of Hollywood. Kevin Hart says he is stepping down as host of the Oscars.

Welcome back to EARLY START this Friday morning.

BRIGGS: Yes.

ROMANS: I'm Christine Romans.

BRIGGS: Happy Friday, my friend.

ROMANS: You, too.

BRIGGS: I'm Dave Briggs. It is 5:30 Eastern time.

The president off to St. Louis today for a speech on law enforcement. We start, though, with a very busy day ahead for developments in the special counsel's Russia investigation.

Closed-door testimony from former FBI director James Comey, just the opening act. We're also expecting two major court filings by Robert Mueller's team involving former Trump campaign chairman Paul Manafort and former Trump lawyer Michael Cohen.

The filings may reveal significant new details about Mueller's probe of possible Russian collusion.

Here's Sara Murray in Washington.

(BEGIN VIDEOTAPE)

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Good morning, Christine and Dave. It's already been a wild week in the Russia investigation and that frenzied pace continues today.

To start this morning, we are going to see former FBI director James Comey up on Capitol Hill. He'll be providing testimony but he'll be doing it behind closed doors for House Republicans. He and the committee struck a deal that he would provide this testimony as long as they released the transcript soon after he does this deposition.

Now, that's just part one of the news. We are also expecting to get, from Mueller's team, a filing to explain what exactly happened with former Trump campaign chairman Paul Manafort.

Remember, the government dropped a bombshell. They said initially that Paul Manafort was agreeing to cooperate. Then, they alleged that he lied when he was supposed to be cooperating.

This filing should give us some more details about what went wrong, but we'll wait to see how much of it is actually revealed and how much remains redacted.

The other big filing we're going to be waiting on today is what is going on with Michael Cohen's sentencing. This is a filing that's going to be coming from special counsel Robert Mueller's team but also, from the Southern District of New York. They're working together on this.

Now, Michael Cohen has asked for no prison time so this is an opportunity for the government to respond to that request to say whether they think he should serve time in prison and also, potentially, to lay out the extent of Michael Cohen's cooperation.

So, plenty, plenty brewing on this Friday. Back to you guys.

(END VIDEOTAPE)

ROMANS: It sure is. All right, Sara, thank you.

Sometime today, President Trump is expected to name State Department spokeswoman Heather Nauert as his new ambassador to the United Nations. She is a former "FOX NEWS" host and relatively inexperienced at international diplomacy, setting the stage for a potentially tough Senate confirmation hearing.

She would replace the outspoken current ambassador Nikki Haley, who reportedly sparred with other administration officials.

Two other top officials, the Secretary of State Mike Pompeo and the National Security Adviser John Bolton -- you know, they're currently pushing to downgrade that U.N. ambassador job so that it is no longer a cabinet-level position.

BRIGGS: A CNN review of absentee ballot envelopes has revealed irregularities with witness signatures in a second North Carolina county. The discovery comes as Democrat Dan McCready withdraws his concession in a congressional race where investigators were already probing allegations of election fraud in another county.

CNN's Drew Griffin with the latest from Raleigh, North Carolina.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT REPORTER: Christine and Dave, major developments again in the validity of the election in the Congressional District nine here in North Carolina.

The loser in this race, the Democrat, Dan McCready, has now rescinded his concession. He no longer thinks he lost. He did lose by 905 votes. He's wondering if those 905 votes are now valid because of all the vote fraud allegations.

And the other big development is our own review -- CNN's review, which shows it's expanded now -- alleged vote fraud -- into two counties. A review of absentee mail-in ballot signatures in Robeson County and neighboring Bladen County shows dozens of these absentee ballots were witnessed by just four people -- all four people associated with the same ring that's involved in now, a criminal investigation in Bladen County.

The state of North Carolina and the Board of Elections here investigating whether or not hundreds of absentee ballots were illegally stuffed in favor of the Republican candidate and potentially, more than 1,000 absentee ballots potentially in favor of the Democrat were thrown out -- so suppress the vote of the Democrats.

All of this throwing the validity of this election in doubt and it looks more and more like this is heading toward a reelection -- Christine, Dave.

(END VIDEOTAPE)

ROMANS: And, Drew, we are so glad you are there investigating --

BRIGGS: Yes.

ROMANS: -- and following it for us.

Make that a plus-40 for House Democrats in the midterm elections. On Thursday, Republican Rep. David Valadao officially conceded to Democratic challenger T.J. Cox in California's 21st Congressional District. CNN and other news outlets had initially called the race for the incumbent.

So, right now, the balance of power in the House looks like this -- 235 seats for Democrats, 199 for Republicans. And, of course, that North Carolina remains to be called.

[05:35:00] BRIGGS: All right, let's talk about all of this with "POLITICO" congressional reporter Rachael Bade --

ROMANS: Hi, Rachael.

BRIGGS: -- a CNN political analyst. Good to see you, my friend.

RACHAEL BADE, CNN POLITICAL ANALYST, CONGRESSIONAL REPORTER, POLITICO: Good morning.

BRIGGS: She's in Washington this morning.

So let's talk about that North Carolina mess and how big a mess could this be for Nancy Pelosi and the Democratic House in the weeks ahead? BADE: Well, right now, it's definitely a problem for Republicans, right? It sounds like the congressman that was seated there -- this Congress -- Congressman Pittenger, who is running against Mark Harris, who just won this election that's being contested -- he actually brought this issue up to some Republicans in North Carolina and said that he felt that something was going on in the primary. And it sounds like they ignored him.

So that's going to be a problem, clearly. Trying to figure out how expansive this potential fraud could have been is a problem for Republicans there.

But say the state, in the next couple of days, decides to certify this election. Democrats on the Hill are already talking about what they can do to push back on this if they were to certify Mark Harris.

And this is going to be a huge spectacle on the Hill because that could require an investigation from the House Administration Committee. They could just not seat him, but if they just --

BRIGGS: Yes.

BADE: -- refuse to do that without an investigation that could have public pushback for them.

So I think this is going to be -- you know, this is far from over, either way. Either there's going to be a new election --

ROMANS: Right.

BADE: -- and they're going to have to throw this out or it's going to drag out in Congress and be really ugly.

ROMANS: The never-ending midterm election --

BRIGGS: I was just about to say those exact words, yes.

ROMANS: -- of 2018. Even as we get some --

BRIGGS: Well into 2019.

ROMANS: Even as we get some -- you know, Valadao defeating in California puts a little bit of resolution there behind California.

It was interesting. I was -- I was thinking over the last couple of days that the president was maybe going to be more introspective after the last -- after the events of the George H.W. Bush memorials and the like. Would he be more introspective himself or would he be --

BRIGGS: Tone down the rhetoric.

ROMANS: -- his own --

BRIGGS: Yes.

ROMANS: And then, last night we got the answer in a tweetstorm that --

BRIGGS: Yes.

ROMANS: "Does the fake news media ever mention the fact that Republicans, with the very important help of my campaign rallies, WON THE UNITED STATES SENATE, 53 to 47" -- (all caps)

"All I hear is that the open border Dems won the House. Senate alone approves judges and others. Big Republican win!"

The president does not want to hear about that blue wave in the House.

BADE: Yes. I mean, the president's strategy is never admit defeat, at least not publicly and even privately. People at the White House says he rarely would do something like that.

Look, the Senate might be something he wants to talk about but look at the reality here.

Republicans, at the beginning of 2017, had 52 Senate Republicans. Now they have 53, and this was after a map that was very favored to them. They were supposed to pick up a half-dozen, potentially -- Senate seats. So, focusing on the Senate is beside the point.

And the House, right now, a 40-seat romp. This is greater than a lot of us predicted in Washington, even some Democrats. People were talking 25 to 30 seats.

And, you know, the call last night for California.

BRIGGS: Yes.

BADE: This seat, in particular, is interesting to me because Republicans and even Democrats thought David Valadao, this congressman in California, was going to be fine. He works really hard. He does a lot of events in the district.

And a lot of people thought if anybody could pull it out in a Clinton- carried district in California it was going to be this guy and, you know, he's gone now.

So again, that just speaks to --

BRIGGS: Yes.

BADE: -- a victory for Democrats.

BRIGGS: And then, the definitive answer on if the president would find that grace and humility in the wake of 41's funeral. It came about 10:06 with this simple tweet. "FAKE NEWS -- THE ENEMY OF THE PEOPLE." Right about the same time we had a bomb threat called in here to the building, mind you.

I thought, also, an interesting answer from Rudy Giuliani to "The Atlantic" yesterday about those questions related to the Russia investigation. Rudy said, "Answering those questions was a nightmare. It took him about three weeks to do what would normally take two days."

So with that as the context, that today we find out how Paul Manafort violated that plea deal and what the sentencing recommendation is for Michael Cohen.

What do you expect to learn today and how do you expect the president to react to it?

BADE: I think one thing we're watching, in particular with Michael Cohen, is going to be what do they recommend in terms of sentencing.

BRIGGS: Yes.

BADE: If they say no prison time, just like they did for Michael Flynn, basically that tells us that he has been extremely cooperative, and that does seem to fall in line with a lot of the reporting that we've seen over the past few weeks.

And this is a big problem for the president because Michael Cohen -- we've heard it time and time again, he knows where the bodies are buried. He knew -- he was so close to the president. He knows a lot about what was going on during the 2016 election, not just regarding Russia and the Trump Tower-Moscow, but also potential hush payments to Stormy Daniels.

And so, he's someone I think we should really watch. I don't think we're going to learn today, obviously, exactly what he has shared --

BRIGGS: Yes.

BADE: -- but it will be a sign if they say no prison sentence recommended that he is a key witness for them.

BRIGGS: Yes, we'll see a lot more black bars -- highly redacted. But if there's no prison sentence recommended for Michael Cohen that's far more significant than Flynn. He only had a 6-month sentence as part of his crimes. Cohen, a much different deal. It should be interesting.

[05:40:06] Have a great weekend, Rachael. Thanks for being here.

ROMANS: Rachael Bade, thank you.

BADE: Thank you.

BRIGGS: All right, some breaking news overnight.

Two former Major League Baseball players killed in a car crash in Venezuela. Authorities say Luis Valbuena and Jose Castillo died in a car accident after a game Thursday in the Venezuelan Professional League. A third player in the vehicle survived the crash.

Valbuena played 11 seasons in the bigs with five teams, including his last two with the Angels who released him back in August. Castillo played from 2004 to 2008, the majority of that time with the Pittsburgh Pirates. ROMANS: All right.

Comedian Kevin Hart stepping down as host of the 2019 Oscars just two days after the Academy announced he was their choice. At issue are past anti-gay and homophobic comments made by Hart.

Listen to Kevin Hart on Instagram before his announcement.

(BEGIN VIDEO CLIP)

KEVIN HART, ACTOR-COMEDIAN: I got a call from the Academy and that call basically said Kevin, apologize for your tweets of old or we're going to have to move on and find another host. They're talking about the tweets in 2009 and 2010.

I chose to pass. I passed on the apology. The reason why I passed is because I've addressed this several times.

We feed in the Internet trolls and we reward them. I'm not going to do it, man. I'm going to be me. I'm going to stand my ground.

Regardless, to the Academy, I'm thankful and appreciative of the opportunity. If it goes away, no harm, no foul.

(END VIDEO CLIP)

ROMANS: About an hour later, Hart posted this on Twitter.

"I have made the choice to step down from hosting this year's Oscar's. This is because I do not want to be a distraction on a night that should be celebrated by so many amazing, talented artists.

I sincerely apologize to the LGBTQ community for my insensitive words from my past. I'm sorry that I hurt people. I am evolving and want to continue to do so. My goal is to bring people together not tear us apart.

Much love & appreciation to the Academy. I hope we can meet again."

So he does apologize, but he steps down from the --

BRIGGS: And now, a search is on because the rumor was no one wanted to host before -- a couple of months to go.

All right, a Chinese tech exec's arrest opens up a new front in President Trump's trade war. We are live in Beijing, next.

(COMMERCIAL BREAK)

[05:46:14] BRIGGS: The conflict between the United States and China over trade and technology is expanding. Beijing angered by the arrest of a top exec at Chinese tech giant Huawei at the request of the U.S. government and that has investors. Worldwide. rattled.

Matt Rivers live for us in Beijing with the latest -- Matt. MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Dave, we're going to get a lot more information, we hope and think, at around 1:00 p.m. Eastern time today. That's when Meng Wanzhou, the CFO of Huawei, at the center of all this, is going to make a bail appearance in Canada. We might get more information about that.

As of now, unspecified charges that the U.S. has levied against her. What we know is that they want to extradite her to the Eastern District of New York. And getting her back into the United States to face charges in a New York courtroom is a massive escalation, no matter which way you put it, for the United States to go that far and do that.

China is going to be very unhappy. They've already called for her release.

But, of course, this arrest is not happening in a bubble. There's this trade war between the U.S. and China that continues to go on.

And the big question that everybody has -- how is this going to play into the trade war moving forward? You have to imagine it will in some way. For now, though, China doesn't seem to be allowing this one arrest to scuttle the overall talks.

BRIGGS: It should be an interesting couple of days. Just about 7:00 p.m. there in Beijing. Thank you, Matt.

ROMANS: All right, let's talk to political economist Greg Valliere, live in our Washington bureau. He's a chief strategist for Horizon Investments. Good morning, Greg.

GREG VALLIERE, POLITICAL ECONOMIST, CHIEF GLOBAL STRATEGIST, HORIZON INVESTMENTS: Hi.

ROMANS: You know, look, it is clear that the United States is going after China on multiple fronts, not just tariffs. I think we've learned that there are multiple strategies at play here.

And at the core of this is this new hawkishness in this administration led by people like Peter Navarro, who advises the president on trade, that China's a bad actor. Listen to Peter.

(BEGIN VIDEO CLIP)

PETER NAVARRO, ASSISTANT TO THE PRESIDENT, DIRECTOR OF TRADE AND INDUSTRIAL POLICE, DIRECTOR, WHITE HOUSE NATIONAL TRADE COUNCIL: The president was unaware of it going into that dinner, as were all members of the team.

And look, I think what's interesting to observe here is that the fact of the matter is the reason why we're having such trouble with China is they do stuff like this all the time. They lie, they cheat, they steal, and they force technology transfer.

So on any given day, there have been actions taken against China over the course of the administration. (END VIDEO CLIP)

ROMANS: So, whether the president knew about it on Saturday when he was sitting down with President Xi, that might be a timing problem.

But what we do know Greg is that this administration has sort of weaponized itself on a variety of fronts --

VALLIERE: Right.

ROMANS: -- to combat the Chinese.

And this is something Peter Navarro gave me. You probably can't read it very well but it is a list of all the ways they say -- the U.S. says China lies, cheats, and steals. And stealing -- you know, stealing intellectual property and putting up barriers for the U.S.

I think it's pretty clear -- look at all of those categories. I think it's pretty --

BRIGGS: We're visual learners here, Greg.

VALLIERE: Yes, right.

ROMANS: I'm just saying this is -- this is what the president looks at in his office for all the ways they -- so, this trade war, can it be resolved in 90 days?

VALLIERE: No. First of all, I think that there is some truth that this company is a bad actor, whether it's espionage or the theft of technology or dealing with the Iranians. I mean, there is something -- and a lot of other countries -- Australia and New Zealand, Canada have the same attitude.

That said, I think the big problem for the financial markets is not necessarily this one arrest.

The big problem is that the Trump administration has been incoherent on trade policy. It changes every day. I don't know who's up and who's down. Is it Larry Kudlow, is it Navarro?

The markets like to see some predictability but on trade, it's utterly incoherent.

ROMANS: I think there's a lot of headline risk. I mean, seriously -- or a tweet-line risk. I mean, when the president called himself a "tariff man" the stock market went down 800 points.

VALLIERE: Yes.

BRIGGS: Well, speaking of those tariffs, a Nebraska Farm Bureau says they've lost a billion dollars because of these tariffs. So if the president could get minor wins on forced technology transfers or intellectual property theft --

VALLIERE: Yes. BRIGGS: -- where does it leave all those farmers?

[05:50:01] VALLIERE: Well, it's not just the farmers, David. It's them, of course, with soybeans.

But it's business leaders who have to plan a year or two ahead. They don't know if there's going to be new, even tougher tariffs. And, of course, it's the stock market, itself.

So you've got three important constituencies that are confused and can't plan ahead.

ROMANS: Quick -- just really quickly --

VALLIERE: Yes.

ROMANS: -- this idea this week that the bond market is telling us there's a recession around the corner, somewhere in the future. You buy that?

VALLIERE: Grossly exaggerated.

ROMANS: Good.

VALLIERE: We get a great jobs number at 8:30 east coast time. You look at real disposable income. It's going to do great because gasoline prices have dropped, interest rates have dropped.

The key story is the Fed. I think the Fed will relax. They're not going to tighten rates that much. That's a really good story for an economy that will grow moderately -- maybe not four percent, but we can grow it 2 1/2 percent.

ROMANS: All right, Greg Valliere. Nice to see you. Have a great weekend, Greg.

VALLIERE: All right, you bet.

ROMANS: Thank you, sir.

BRIGGS: Thanks, Greg.

ROMANS: Now, let's get a check on "CNN Business" this morning.

Global markets higher after falling -- yesterday's news of the arrest of Huawei CFO Meng Wanzhou on December first, the same day that President Trump and the Chinese president met at the G20.

In Asia, Asian markets mixed there, really. Hong Kong down but a little bit of a bounce back for the Nikkei and the Shanghai Composite.

And in Europe, all the markets are bouncing back here higher.

But on Wall Street, we're watching futures fall. And the Dow fell yesterday as much as 785 points before making a comeback, closing the day only down 79. I mean, whiplash Thursday. The Nasdaq eked out a small gain, just under half a percent, recovering from those trade war fears. The S&P 500 also rebounded, ending the day down just a little bit.

The main event today in business is the November jobs reports due out at 8:30 Eastern time. And we're expecting a strong -- another strong reading there.

Sears chairman Eddie Lampert wants to buy stores and assets to keep that company alive. His hedge fund, ESL Investment, is offering $4.6 billion for about 500 Sears and Kmart stores and some of the other assets of the company. ESL says its plan would save 50,000 jobs.

Sears employed 68,000 people when it filed for bankruptcy in October. Lampert gave up his role as CEO the day of the bankruptcy filing but he remains the chairman.

A federal bankruptcy court judge would have to approve the plan before Sears could be purchased by ESL. A spokesperson for Sears declined to comment on that bid.

All right, movie fans -- MoviePass wants to win back some angry customers. The movie subscription service announced a new pricing structure Thursday. It depends on where you live and the kind of movies you want to watch.

Starting in January, MoviePass will offer three plans. They are called select, all-access, and red carpet. Not every customer will be charged the same monthly fee for each plan. MoviePass says the price for each tier will vary by zone, with the highest level costing as much as $25 in some markets.

It's been a pretty rough year for MoviePass. They've upset many of its original members by tweaking and changing the terms of its service several times.

Not too long ago, I actually interviewed the CEO and he said well, we found our formula.

BRIGGS: It was kind of half-baked in the beginning, right? It took a while --

ROMANS: Now there's a -- now there's a new formula.

BRIGGS: -- to bake that cake.

All right, ahead, something we haven't seen in the NFL since the early 80s.

(BEGIN VIDEO CLIP)

ANNOUNCER, "MONDAY NIGHT FOOTBALL": Breathing room and they get that in -- 20 more. Derrick Henry still going.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[05:57:28] BRIGGS: Tennessee Titans running back Derrick Henry became just the second player in NFL history with a 99-yard touchdown run. Watch him run straight through the Jacksonville Jaguars defense with a couple of savage stiff arms. Henry ties Tony Dorsett's all- time record -- longest run in NFL history, 238 yards.

Also, they go with four touchdowns -- 30 to nine -- Titans roll the Jags.

ROMANS: All right. Los Angeles drenched by severe rains. Jimmy Kimmel managed to find humor in that situation. Here's your "Late- Night Laughs."

(BEGIN VIDEO CLIP)

JIMMY KIMMEL, ABC HOST, "JIMMY KIMMEL LIVE!": It's always funny here in L.A. It doesn't rain here much and when it does it's a big event.

It's -- and it's a big fashion event, too. This is how our four executive producers came into work this morning. I took this picture in my office. They were all wearing big waterproof boots as if they're getting on board a lobster boat or something.

This is good. This is from our local KCAL news team. They caught up with a woman last night who claimed that the rain is causing people to fight in the street.

UNIDENTIFIED FEMALE: Everybody's fighting -- everybody's fighting in the street, yes.

UNIDENTIFIED MALE: Because it's a rainy day. You can't really deal with it.

UNIDENTIFIED FEMALE: Yes, I know.

KIMMEL: Luckily -- fortunately, I was able to buy all the Lunchables in the store.

(END VIDEO CLIP)

BRIGGS: Everybody knows that. I didn't even know they still sold Lunchables.

ROMANS: Oh my gosh, are you kidding me?

BRIGGS: Stock me up on the preservatives.

ROMANS: I love Lunchables, yes.

Thanks for joining us. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. Have a great weekend, everybody. Here's "NEW DAY."

ROMANS: You don't have Lunchables at your house? (BEGIN VIDEO CLIP)

PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: We are anxiously awaiting what exactly the special counsel says. After President Trump fired Comey, top FBI officials viewed Trump as a leader who needed to be reined in.

UNIDENTIFIED MALE: The president's worst instincts continue to haunt him.

ROMANS: President Trump is expected to name Heather Nauert as his new ambassador to the United Nations.

JENNIFER GRANHOLM, FORMER GOVERNOR OF MICHIGAN: This would be the least experienced U.N. ambassador in the history of the United States.

MIKE SHIELDS, FORMER REPUBLICAN NATIONAL COMMITTEE CHIEF OF STAFF: It is commendable that the president could potentially nominate a second woman. We should give her a chance.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

JOHN BERMAN, CNN ANCHOR: Welcome to our viewers in the United States and all around the world. This is NEW DAY. It's Friday, December seventh, 6:00 here in New York.

Alisyn is off. Erica Hill joins me.

We are here, which is news in and of itself this morning. You may have heard this building was evacuated overnight after a bomb threat was called into our offices. Law enforcement came, checked things out, and we're back to work. Thanks so much to them, as always.

So one note on the timing.