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House Judiciary Set to Hold Bill Barr in Contempt Tomorrow; Deadline for Don McGahn to Give Russia Probe Docs Nears; Treasury Secretary Refuses to Turn Over Trump's Tax Returns; Trump Reverses Course, Says Mueller Should not Testify. Aired 9-9:30a ET

Aired May 7, 2019 - 09:00   ET

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

[09:00:34] JIM SCIUTTO, CNN ANCHOR: A very good morning to you, I'm Jim Sciutto. Poppy is off today.

Does Congress have the power to check and question the president? That is the pressing question because right now the White House is fighting virtually every congressional request for documents or witness testimony, and today is another deadline.

Former White House counsel Don McGahn has one more hour to hand over notes and files related to potential acts of obstruction by President Trump and if he complies that will be a first for any probe launched so far by any House committee. If he does not, he could risk being held in contempt of Congress alongside the attorney general of the United States, Bill Barr.

Just a day ago Barr ignored his latest deadline to give lawmakers the unfiltered Mueller report along with the underlying evidence. Contempt proceedings are set for this time tomorrow. Absent some sort of compromise and last ditch talks among staff members going on today. But

when it comes to checks and balances and consequences, the biggest showdown of all may be over the president's tax returns. The Treasury secretary has given the House Ways and Means Committee what he says is his final answer -- no. Now Ways and Means is weighing its options.

Let's dig into all of this with CNN's Sunlen Serfaty on Capitol Hill.

So first let's start with Barr. Can he realistically avoid being held in contempt when this meeting happens tomorrow? Are there any meaningful negotiations going on today to avoid that?

SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT: Well, today, Jim, is something of a last ditch effort to try to avoid that, but there's no expectation that they can and will avoid holding him in contempt given that the two sides have just been going back and forth for weeks over the details of what can be released and what Democrats want.

It is, however, very significant that the two sides are sitting down for the first time today. The staff from Jerry Nadler, the chairman of the committee, as well as staff from the DOJ sitting down later today to try to broker some sort of compromise. And as you said, Democrats have been very clear that they want the full unredacted report. They also want the underlying evidence.

They've shown some give in recent days by saying they're willing to prioritize some of the witness interviews, some of the investigative materials here, but the chairman going into these meetings today very clear, he said he's willing to put on hold the contempt proceedings if they negotiate in good faith today, but one thing is for certain, Jim, is that contempt proceeding is still on the schedule for tomorrow, Wednesday, if these negotiations don't yield anything today.

SCIUTTO: OK. So that's item number one, that is for the full Mueller report. Item number two, Don McGahn, the White House counsel, former White House counsel, testified very broadly over a number of hours to the special counsel and his testimony the basis for some of this evidence of obstruction. What's going to happen with him?

SERFATY: Yes, I don't think Democrats are going to hold their breath that they'll get their hands on these documents today. They have a 10:00 a.m. deadline. He has a 10:00 a.m. deadline to provide those subpoenaed materials not only discussions relating to the firing of Robert Mueller, of course a big -- potential firing of Robert Mueller, the big area of interest that a came out of the Mueller report.

Also you have documents relating to Michael Flynn, James Comey, Jeff Sessions. So Democrats want to get their hands on a whole boat load of documents and they are not really holding their breath that they'll get their hands on these, discussing the next steps up here on Capitol Hill for that 10:00 a.m. deadline, potentially holding him in contempt, potentially, you know, trying to see what else they can do to get those documents, get him up here on Capitol Hill.

SCIUTTO: Congress has the power to call people to testify. OK. So you've got the Mueller report, you've got McGahn's testimony, that's item number two. Item number three, the president's tax returns. There is a law that says the Ways and Means Committee can demand anybody's tax returns, pretty darn clear.

What does Ways and Means do now that the Treasury secretary is refusing on behalf of the president?

SERFATY: That's the big question and at this point we still do not have a firm answer. The chairman of that committee Richard Neal, House Ways and Means, he has made it clear that after Treasury Secretary Mnuchin turned down their request again that he is going to -- he's just essentially weighing his next steps. He said I will consult with counsel and determine the appropriate response.

He could, of course, subpoena, he could, of course, hold him in contempt of Congress. Those next steps clearly being looked into right now. This is the second missed deadline and Mnuchin as you just saw there when he said that they would not turn over the six years of tax returns says that he determined that the committee request lacks a legitimate legislative purpose, of course, that not going to fly with Democrats up here on the hill -- Jim.

SCIUTTO: Yes. Does the law matter? It's the overriding question with so many of these things. Sunlen Serfaty on the hill, thanks very much.

Also on that topic, at last check more than 600 former federal prosecutors signed an online rebuttal to the attorney general's decision against charging the president with obstruction of justice. The signatories served under presidents -- we should be clear -- of both parties in all levels of the Department of Justice in all parts of this country. They write in this letter in part, quote, "To look at these facts and say that a prosecutor could not probably sustain a conviction for obstruction of justice, the standard set out in principles of federal prosecution runs counter to logic and our experience."

Our next guest is one of those former feds, Renato Mariotti. He joins me now from Chicago.

I mean, this is quite a list here. We should be clear again to reiterate these are people who served both Republican and Democratic administrations. You know, it will be very easy for the president's defenders to say oh, these are just angry Democrats here, but in fact it's folks who have served both parties.

Tell us why you signed on to this letter.

RENATO MARIOTTI, CNN LEGAL ANALYST: Well, there frankly has been a little bit of confusion. It's not clear when you read the report if you are a layperson, I'm sure, what is clear to me, which is when you look at this document Mueller goes through each of the elements of the crime, each of the things that a prosecutor would have to prove, and he concludes that he has substantial evidence to prove each one of those elements.

To me as a prosecutor what he's essentially saying here is he has a case he could charge. Now I think he went out of his way to try to not put his thumb on the scale one way or the other and I appreciate that, but there's been an effort like as you mentioned by Barr and Rosenstein to suggest that somehow Mueller said something he didn't and I thought it was important to let the public know exactly what Robert Mueller set forth in that report.

SCIUTTO: David Kendall who, as you know, represented Bill Clinton in the impeachment proceedings then when one of the articles of course was also obstruction of justice, he lays into Robert Mueller for not making a more definitive binary judgment whether to prosecute or not prosecute, in effect to say we can't decide. I mean, his language is pretty rough.

"The failure to draw any conclusion on whether the president constructed justice was a massive dereliction of the special counsel's duty. And the report's explanation of this failure is both incoherent and illogical.

I wonder if you agree with that criticism focused on Bob Mueller here.

MARIOTTI: Well, it's certainly fair to criticize Mueller for that, but I personally do not and the reason why is that I believe that prosecutors should show restraint, a sense of fair play, humility, those are the qualities that Robert Mueller showed there. He had essentially the weight of the world on his shoulders, he was looking at a decision that he knew whatever way he decided or whatever he said about it was going to be heavily scrutinized and he thought the right thing to do was to leave that to the public and the American people, to the Congress.

I'm never going to criticize a prosecutor for showing humility and restraint. I think we need more of that in prosecutors, not less.

SCIUTTO: Final question here because as you know, as we led off this program again, the White House basically making a blanket decision to refuse every congressional request, whether for testimony, Don McGahn, whether for the full special counsel's report or the president's tax returns. I mean, in each case there is law. Where does the law stand?

MARIOTTI: Well, I think on tax returns the law is pretty clearly in Congress' favor. I think that they are not even putting their best foot forward in terms of legislative purpose, the current purpose that they are seeking them for is to look at presidential audits. I think a better argument for them would be conflicts of interest, potential foreign ties, things like that.

But regardless, I think the law will go their way, similarly with these issues you mentioned a moment ago, Jim, the Mueller report and the underlying evidence. I don't think there's any way in which the executive branch can keep the results of a criminal investigation of the president from the House, which has impeachment power, but what the administration is counting on is the fact that it takes a long time to enforce this in court. They clearly believe that time is on their side and that's the reality of the situation.

SCIUTTO: It's a long time Trump strategy when dealing with any legal issue, court issue, drag it out. May succeed here.

MARIOTTI: Exactly.

SCIUTTO: Renato Mariotti, thanks very much.

Now to the other big question today, will the White House let the Special Counsel Bob Mueller testify? Joe Johns is standing by.

Joe, the president of course just a few days ago was saying he has no problem as was the attorney general, that's turned now. The president tweeting Mueller should not testify. What's happening? Why the opposition now and has the White House decided finally they're going to stand in the way?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, there's some indication it's turned again.

[09:10:02] Kellyanne Conway, the presidential adviser, was just out here on the driveway a few minutes ago and she gave all the reasons why the president thinks Mueller should not testify but she didn't say the president has said Mueller won't testify. This sort of dove tails with the reporting from my colleague Jim Acosta here who talked to a source, who said the president in his tweet very recently saying Mueller shouldn't testify was simply issuing an opinion and not an order.

That's important because the attorney general has said he thinks it's OK for Mueller to testify. Also very important to note that Mueller does need the approval of the Justice Department regardless of whether he is working there or not. We know Mueller is expected to leave the special counsel's office very soon. He has to have approval even if he is a former employee according to DOJ regulations.

Other important thing, Republicans on Capitol Hill have said they'd like to see Mueller testify as well. They want to talk to him about the origins of the Russian investigation and that allegation by the attorney general of spying on the Trump campaign.

Jim, back to you.

SCIUTTO: Joe Johns at the White House, thanks very much.

Joining me now, David Gergen, former presidential adviser to four U.S. presidents.

David, always good to have you on.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Good to see you, Jim.

SCIUTTO: All right. So Mitch McConnell in a few moments is going to say that the Mueller probe is over. You heard that from Lindsey Graham, the president is certainly pushing that thought now. Tell me what Mueller's testimony would mean, to hear directly from the special counsel but also crucially to hear him challenged about his decision on obstruction of justice, for instance, How important would that be?

GERGEN: I think it's very important politically, and not legally, and that is -- you know, there has been a sense that Barr spun the report in such a way as to make it much more favorable to the president than the facts suggested and that's why we have over 600, you know, former Justice Department people saying at the end of the day were it not for the Justice Department ruling that a president can't be indicted that this president would be subject to multiple felony charges.

And so we have differences of opinion about sort of where Mueller came down at the end of the day, how much evidence he really thinks is there and that sort of thing. And I think it's going to be significant which way he goes on that. Does he in effect minimize his objections or does he say they're quite serious and quite large? I think the larger they are the more they are going to be seized upon by the Democrats and vice versa.

SCIUTTO: You mentioned the politics, of course, here.

GERGEN: Yes.

SCIUTTO: And we took note of this new Gallup poll today which has the president's approval rating at the highest at least in the Gallup survey of his presidency, 46 percent.

GERGEN: Yes.

SCIUTTO: Rising in the midst of the end of the Mueller report, et cetera. Tell us what this means. Does it indicate to you that Americans have had enough of investigations?

GERGEN: I don't think it says that. I think it says rather that Americans are very positively inclined -- more positively inclined toward Trump because of the economy. I mean, this president has a roaring economy going, high growth rate, much higher than economists expected. This Gallup survey, as you know, Jim, actually concluded before we had these new unemployment numbers which were very promising, and, you know, I think everything now in Washington is being judged by what impact does this have on the elections in 2020.

And I must tell you that there is a sense now that the president has a rising chance to win. I don't think it's over 50 percent yet, but we know he is very good at campaigning, he's better at campaigning than governing, frankly, and that the Democrats still have a long way to go to sort themselves out. So the possibility of this president winning and winning reelection is a much higher than it was, I think, six months ago or a year ago.

All that said, mainstream economists who have been wrong now about how big this recovery would be, mainstream economists do believe that we're going to crest very soon. The economy will crest and the numbers will start coming down. That means the president may be fading -- you know, have a lower tide, not a higher tide as we go forward.

SCIUTTO: Let me ask you this because this number stuck out to me, breakdown among party approval of this president. Republicans have always been high, stays there, slight tick up on independents, doubling of support for this president's approval rather among Democrats. What does that tell you?

GERGEN: Yes. That's from a very low base. He's gone from, like, five to 10 or something like that. I don't think Democrats --

SCIUTTO: Six to 12. Yes. Six to 12. Still low, though.

GERGEN: Yes. But I think the Democrats are not the -- if he can pick up 12 percent of the Democrats that would obviously be helpful. I think probably that number is going to go down again. The real fight is over can he bring in more independents and keep his base and we don't know what. What we do know is all this stonewalling that's going on is very much based on the election day two, whether they can push all of this off, yes, and put it into the courts where they don't get resolution, the elections, that's what the Trump P (ph) team is ultimately doing.

SCUITTO: David Gergen, always good to have you.

GERGEN: OK Jim, take care. SCUITTO: This is a big story. It's a critical week in the U.S.-China

trade battle. This is putting investors on edge, businesses, as well, freaking out. A major tariff hike on Chinese goods just days away. We are watching the markets as they open in just minutes here, set to fall.

And Jill Biden on why now is the time for Joe to run.

(BEGIN VIDEO CLIP)

JILL BIDEN, WIFE OF JOE BIDEN: For the past two years, everywhere I've traveled across this country people are coming up to me saying, he's got to run, he's got to run, Joe has to run. And I've really taken to hear and thought about it, and Joe is such a unifier, he brings people together.

(END VIDEO CLIP)

SCUITTO: Dana Bash will be here with me more -- on more -- with more on her personal sit down interview with the vice president's wife. Plus, minutes from now, Georgia's governor set to sign one of the most restrictive anti-abortion bills in the country and the ACLU is gearing up for a legal showdown over what's know as the heartbeat bill.

[09:20:00]

(COMMERCIAL BREAK)

SCIUTTO: An abrupt change in plans for the Secretary of State Mike Pompeo hours before he was due to arrive in Berlin for meetings with German Chancellor Angela Merkel.

The State Department cancelled the visit, citing, quote, "pressing issues". CNN Senior Diplomatic Correspondent Michelle Kosinski joins me now. So Michelle, a cancellation of a visit but also a mystery next stop on this ongoing overseas tour.

Do we know what's happening and why?

MICHELLE KOSINSKI, SENIOR DIPLOMATIC CORRESPONDENT, CNN NEWS: Yes, the State Department was going for drama on this trip. They definitely got it. So all of a sudden the secretary's next stop to Berlin is cancelled, the pool that is traveling with them is told well we can't tell you where we're going right now, you're just going to have to come along and then you might not be able to report from where we're going, maybe not until after we leave.

So we don't know the location at this point. We don't know exactly when we will know the location. The State Department has only said that this abrupt change was because of pressing issues and they look forward to rescheduling that Berlin stop.

So there's obviously something urgent, you look at all the things going on in the world right now, we know that the State Department only acts this way about travel when there's travel to say a war zone. So you look at the very few places where this could be and you can draw some conclusions from there. But again, we don't have any detail as of yet from State.

SCIUTTO: This happens of course as the U.S. has deployed an additional carrier group to the Middle East. This is enormous - enormous piece of fire power here. We're learning more about the decision to move the group. What do we know?

KOSINSKI: Right, so this was based on credible, specific intelligence that the U.S. got that Iran or its proxy groups could be targeting U.S. interests or interests of U.S. allies in the Gulf in places like Iraq.

So because of this movement of a carrier group now to the Middle East and the threats surrounding that, secretary - the National Security Advisor John Bolton said that any attempt by Iran to threaten U.S. assets would be met with unrelenting force.

There's lots of speculation that this trip has something to do with that threat, could it be that the secretary is traveling to Iraq? We're just going to have to wait and see on that. But we have gotten a very typical response from Iran, from the foreign minister on this saying that the B team as he describes U.S. officials is at it again, from announcements of naval movements that actually occurred last month to dire warnings about so called Iranian threats. If the U.S. and clients don't feel safe, it's because they're despised by the people of the region, blaming Iran won't reverse that.

So some mystery there on the part of the U.S. and a very typical response from Iran, Jim.

SCIUTTO: Michelle Kosinski at the State Department, thanks very much. We are just moments away from the opening bell on Wall Street. The DOW is set to drop again as trade tensions are rising with China, all this just days before a tariff hike now promised by the president on $200 billion of Chinese goods.

It's about to kick in. You and I pay those tariffs, we'll keep on top of this.

[09:25:00]

(COMMERCIAL BREAK)

SCIUTTO: This is now the most critical week yet in the U.S. versus China trade war, and investors are getting raddled because the Trump administration threatens more tariffs and China's top negotiator arrives in Washington this week. We're now just minutes away from the opening bell on Wall Street, and this morning for the second day in a row, markets are threatening to open with the triple-digit loss. Joining me now Business Correspondent Alison Kosik. She is live at the New York Stock Exchange. And Chief Business Correspondent, Christine Romans. Christine Romans, if I can begin with you -

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Sure. SCUITTO: - Dow went down far yesterday -

ROMANS: Almost 500 points.

SCUITTO: - but then it rebound - rebounded at the end. Are the markets predicting that there's a settlement coming here, or -

ROMANS: Well look, they are unnerved that this is the most critical week so far in what has been a year-long trade war. They think the president really is going to put those tariffs on. That's going to - that's going to hurt U.S. businesses. I mean, that's going to be a big change that they're going to - in five days, they're going to pay a lot more for the stuff they import than they do today. But I think bottom line, investors aren't sure what's going to happen here next. And a deal has been priced into the 17 percent rally for the S&P this year, so they want to get a deal, but I think you can see unnerved markets for the rest of the week really until we know what happens Friday.

SCUITTO: Well Alison, if a deal's been priced into a 17 percent rise and you don't get a deal or there are genuine worries about getting a deal -

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes.

SCUITTO: - what are traders on the floor saying there about the market?

KOSIK: Yes, I mean, we got a taste - just a little bit of a taste, Jim, of what could happen if a deal between China and the U.S. falls through. Now, we did see by the end of the day yesterday a sudden reversal for the Dow clawing back almost all of the 471 points that it lost, but here we go

[09:30:00]