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AT THIS HOUR WITH BERMAN AND MICHAELA

Both Trump Sons Involved In Cabinet Searches; As Dow Nears 20K, Fed To Reveal Interest Rate Hike; Trump Team: Person Behind Name Hunt "Counseled"; Dems: Agency Says Trump Must Sell Stake In Hotel; Obama, White House Slow To Respond To Russia Hack; Democrat Asks Electoral College To Block Trump. Aired 11-11:30a ET

Aired December 14, 2016 - 11:00   ET

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


CAROL COSTELLO, CNN ANCHOR: -- I'm Carol Costello. "AT THIS HOUR" with Berman and Bolduan starts now.

KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. John Berman is off today. This morning, Trump Tower will go from gold to Silicon. Its leaders from nearly a dozen top technology companies including Apple, Google, Microsoft, and Facebook set to sit down with the president-elect to discuss bringing tech jobs back to America.

This amid grumblings that some long-time Trump loyalists are getting iced out from key positions in the administration. But one new position has been announced, Congressman Ryan Zinke of Montana, a former Navy SEAL, chosen as secretary of the interior. About that, new details this morning on the role one of Donald Trump's sons has played in that very selection process.

Let's go to Sunlen Serfaty live in Washington watching all of this. Sunlen, what are we hearing about this interior selection? Not really the person, but the person who did the interviews?

SUNLEN SERFATY, CNN CORRESPONENT: That's right. It seems that Donald Trump's son, Don Jr., was heavily involved in kind of getting Donald Trump to make this decision when he's considering potential cabinet secretaries, most notably for interior secretary.

We know according to a source that Donald Jr. personally held and conducted some interviews for this very important cabinet post. Add to that we also know, according to a source, that Eric Trump, his other son, sat in recently on meetings that Donald Trump had with Mitt Romney as the two were going through this very public audition for potentially secretary of state.

All this of course, the fact that you have the involvement of two sons in these top decision-making meetings really speaks not only to the closeness they continue to have with their father, but the fact they are advising him in some informal capacity during the transition.

And that notably is one of the main reasons all these red flags have been raised and big questions over what their role will be going forward once their father takes the White House come January.

As you know, there was a press conference that was scheduled for New York tomorrow. That has been postponed. But Trump was set to address some of these conflicts of interest, especially since he is set to hand over control of his businesses to his two adult sons.

BOLDUAN: That press conference has not yet been rescheduled. Real quick, what are you hearing, House Democrats say that they are hearing from a federal agency that handles federal leases. That Trump is going to be in breach of his lease on his new hotel in D.C. the moment he's sworn in. What is going on there?

SERFATY: That's right. This centers around the fact that Trump's D.C. hotel just steps away from the White House sits on property that he leases from the government. So the GSA, General Services Administration, says he would be in breach of the contract the day he becomes president.

Because according to the lease, the exact language is no member or delegate of Congress or elected official of the government of the United States shall be admitted to any share or part of this lease.

So Trump, as president, oversees the GSA, he would essentially become the landlord and the tenant in this sort of situation. We know according to transition officials that they have no word yet on what the move is.

They will just address this in a conference call and said that they would not comment on it yet, and that would be addressed in this forthcoming press conference potentially in January.

BOLDUAN: OK. The questions continue, then. Thank you so much, Sunlen. Appreciate it.

Arty, let's go from Trump Tower now to Wall Street, and a potential -- the potential of a historic milestone. CNN's chief business correspondent, Christine Romans, host of "EARLY START." The magic number is 20,000. Why is everyone watching this? Why is it so important?

CHRISTINE ROMANS, CNN HOST, "EARLY START": Can I tell you, 19 days ago the Dow crossed 19,000 for the first time, 19 days ago. Now here we are so close to 20,000. The reason is -- the reason it's not there quite yet is because they are waiting to hear what the fed says later today about interest rates.

But in general, you have a big stock market rally under way here. You have CEOs who say overall they are confident about sales and hiring next year. You have an economy that's been moving forward and so you have the Dow Jones Industrial Average coming up here on 20,000.

When you look at the data here overall, jobless rate 4.6 percent, economic growth averaging 180,000 a month this year, GDP, the strongest in two and a half years, and inflation getting a little bit, not much, but a little bit more, all of these reasons why the market is doing well and why the fed might move.

BOLDUAN: But why now? Why would the fed move today? ROMANS: Because the fed was not convinced. We had Brexit earlier this year, we had some softness in the U.S. economy, remember, in the beginning of the winter and the spring time. The fed wasn't convinced. So it raised interest rates last December. We thought there would be three or four more hikes this year and we didn't get it.

Now you have a new president who will be coming in. You have the prospect of new pro-growth policies, but you also have all this on the docket that is telling the fed it doesn't want to be behind the curve. It wants to make sure the economy doesn't overheat and the economy is heating up.

[11:05:06]BOLDUAN: But what does this mean for everybody? Like I hear inflation, we all hear inflation, but what does it mean?

ROMANS: Higher interest rates, if the fed raises interest rates, we will know in three hours if the fed will raise interest rates and I expect they will. Almost everyone expects they will. It means you will spend more on a new mortgage, new car loan, and on the debt that you already have sitting on a credit card.

So interest rates make borrowing costs higher. Let me give you a real world example, say you have a mortgage of 4.2 percent, $250,000 mortgage. This is what you are paying every month. The total cost of that loan is $440,000.

Flash forward, the fed raises interest rates, mortgage rates continue to rise and you have a 4.5 percent mortgage. Now your monthly payment is $1,267. You have the total cost of a loan that is considerably more, $16,000 more.

So with the fed hiking interest rates, it's a sign of strength in the economy, a sign the fed expects inflation to grow. They are going to put the brakes on a little bit. I would say that they have pedal to the metal for so long trying to support the economy, but now they are taking their foot off the pedal a little bit. That will raise borrowing costs for businesses and consumers.

If you are a saver, though, this is great news. All the people who have been complaining about a bubble in the stock market and savers have been screwed for the past five years, now people who save money, savings will be more attractive.

It might put a little, take a little shine off the stock market but overall, the forecast for the stock market to continue to rise at least in the very near term and for interest rates to slowly start to creep up.

BOLDUAN: That's going to act and everyone's looking at 20,000 in the Dow. All right. There we go. Big headlines. Great to see you, Christine. Thank you so much.

All right. So one Democratic congressman is calling it a political witch hunt. The Department of Energy rejecting a request by Trump's transition team to hand over the names of employees who have worked on climate change initiatives. There are late developments on this as well.

CNN's Athena Jones is live at the White House watching all this. The White House reacted, Athena. They were not mincing words with this one, but there are some new details about what exactly happened with that questionnaire going to the Energy Department. What are you picking up?

ATHENA JONES, CNN CORRESPONDENT: Right. A few developments this morning. We have heard from Press Secretary Josh Earnest saying look, this looks like an attempt to maybe target career civil servants just for doing the job that they are supposed to do. We have heard from the Energy Department, a union representative there talking about employees being concerned about keeping their jobs, and being able to pursue the science with he said in independence and integrity.

And we have a letter from two members of Congress, I have it right here, they is in a letter to Vice President-elect Mike Pence, who of course is heading up or leading the Trump transition team, asking for a lot of information about this memo, this questionnaire.

They are saying that they are concerned that this is creating an ideological litmus test for civil servants to keep their jobs even if they have -- there may be concern about keeping their jobs if they differ in their views on things like climate change.

Differ from the views of the incoming Trump administration. That letter, they said any effort to retaliate against, undermine, demote or marginalize civil servants on the basis of their scientific analysis would be an abuse of authority.

These congressmen want more information. The Trump transition team has responded to all of this saying that the questionnaire was not authorized or part of our standard protocol. The person who sent it has been properly counseled. We will wait to see what develops there -- Kate.

BOLDUAN: Absolutely. Athena, great to see you. Thank you so much.

So joining me now, Steve Cortes, is a former campaign adviser for Donald Trump. He is joining us. Patti Solis-Doyle, CNN political commentator and campaign manager for Hillary Clinton's 2008 presidential bid. Ari Fleisher is here, former White House press secretary under President George W. Bush, and of course, Sara Murray, CNN rock star political reporter is here as well.

Ari, we were just listening to Athena Jones talk about this questionnaire that went to the Energy Department. The White House saying flat out that it could end up -- could lead to targeting of civil servants.

The transition now says it was not an authorized, it was an unauthorized questionnaire that was sent over. You have been involved in a transition. How does that happen? How does an unauthorized questionnaire get to the Energy Department?

ARI FLEISHER, FORMER GEORGE W. BUSH WHITE HOUSE PRESS SECRETARY: Because you are drinking from so many fire hoses at one time and a lot of people are new to it, thrown into a transition, don't have supervisory roles set up yet. I had a feeling that's what it was. It was a mistake, shouldn't be done. Civil service needs to be protected from this. Political employees can have a political --

BOLDUAN: That's the difference there.

FLEISHER: Civil servants should be protected. I'm glad to see the Trump presidential election came out and said wrong, it shouldn't have happened. He's been counseled.

BOLDUAN: Patti, the White House did not mince words on this and Ari kind of feels the same way that it absolutely should not have happened. I do wonder, though, if the Energy Department kind of feels spooked right now, that this questionnaire even made it over there. Don't look at me like that.

STEVE CORTES, FORMER CAMPAIGN ADVISER TO DONALD TRUMP: Look, it's a mistake. If this is the worst mistake that we make --

BOLDUAN: Don't pretend I'm blowing this out of proportion. I'm asking questions.

[11:10:07]CORTES: OK, but if this is the worst mistake we make, the Trump transition team makes then I think that would be justified. This was a low level mistake. When I look at the leadership of the Energy Department, by the way, my good friend, Rick Perry I think will be an amazing secretary of energy coming from our most successful energy state and the leader of that state for 14 years. It was the only job creation mecca during the worst times of the economy nationally. I'm very confident we will have fabulous leadership in energy. This was a very minor stumble along the way.

BOLDUAN: A minor stumble, Patti. OK. Fine. Sara, let's talk about a different department, the Interior Department, which by the way, doesn't get a lot of attention most of the time, but it's going to get a lot more right now.

I'm from the Midwest. We don't talk about the Interior Department very much. Out there, what do you think the Interior Department does? You are from a hunting state. You would know.

OK, what -- Interior Department, Don Jr. sitting down interviewing candidates to be secretary of the interior --

SARA MURRAY, CNN POLITICAL REPORTER: One of the people who does care a lot about the Interior Department is Don Jr. He is an avid outdoorsman, a hunter. (Inaudible) who knew about him during the presidential campaign, and he was involved in interviewing potential candidates for interior secretary.

We are also learning that Eric Trump was in at least one of the meetings where they met with Mitt Romney for secretary of state. The Trump transition effort was actually very dismissive about this when they were asked about it this morning. They basically said both the kids are on the transition team. It shouldn't be a surprise to anyone to see that they are involved in some of these decisions and maybe in some of these hires, but I think the concern here is of course that both Eric Trump and Don Jr. are still running the business or still making day-to-day decisions.

And the belief is that even if Donald Trump steps back from the business, his sons will still be taking the lead at the same time as they are involved in these meetings and making decisions about very high level cabinet picks.

Now, while there may not be conflict of interest rules for Donald Trump, that doesn't necessarily extend to his kids. I think one of the things that we are sort of waiting to see how hard Donald Trump's advisers impress upon him is look, if you don't draw clearer, brighter lines on this, this is a story that's going to continue to follow you.

When you are in the White House and when you would rather be talking about things like tax reform plan or an infrastructure bill instead there will be questions about whether your kid was in a meeting that then, you know, led to a contract that then benefited a Trump Organization company.

BOLDUAN: One of the many reasons why the questions continue to mount rather than go away is that Donald Trump has not made this long- awaited announcement on what he will do and how he will separate his business. Even though we can infer something from what we see on Twitter.

PATTI SOLIS-DOYLE, CNN POLITICAL COMMENTATOR: I think it makes sense that he looks to his children for advice. We saw that throughout the campaign. They played significant roles in the campaign for him and it was a successful campaign so again, why fix something that ain't broke.

BOLDUAN: There are laws against that.

SOLIS-DOYLE: The overall theme of this transition has been conflict of interest, whether it's the Trump children or Trump himself or even the nominee for secretary of state with his ties to Russia. ExxonMobil stands to make billions and billions of dollars if the sanctions on Russia are lifted. So it seems like this whole transition is just common theme is conflict of interest. That's a problem.

BOLDUAN: If you know that you are up against common theme conflict of interest, is there no one else to sit down with candidates for secretary of the interior? No one else to conduct these interviews? Steve, I'm sure you're available.

CORTES: Of course. They are sitting down with other people, but Patti's right, he clearly very much values the counsel of his children. He has for decades in his business and he certainly did during the campaign. I think he will as president. He shouldn't be deprived of that. Regarding conflict of interest -- BOLDUAN: Except there are laws. Sorry. There is a statute, I'm

saying this for all of you, there's a statute, if they're running the biz, even if they're not running the biz they can't be advising him formally or informally.

CORTES: Kate, look, this is a unique situation. We have never elected a citizen president, somebody who wasn't already in government or the military. So having an entrepreneur and a businessman take over as president presents a lot of unique challenges, lot of opportunities, too.

But that's why President-elect Trump was very clear that he postponed the press conference not because he wants to delay the issue, but because he wants to make sure he gets it exactly right. How he's going to delineate between what's in the best interest of the Trump Organization and what's in the best interest of the country.

BOLDUAN: You do think it is necessary that he's very clear to the country how he's going to make that delineation?

CORTES: Yes. Absolutely.

BOLDUAN: Ari, one of the problems that is arising right now with this unique president-elect is that the day he gets sworn in, he may very well be in breach of a lease on his new hotel. General Services Administration saying it is part of the lease, I was reading it. What would you advise they do about this?

FLEISHER: I would advise everybody, take a deep breath and let's figure this out over a period of months. I think what's important here is people don't rush to too many conclusions that this is unethical or wrong because you really don't want to send a signal that if you have been in private business and own a privately held company, there's no place in government for you.

[11:15:06]We need to figure this out. I think it will take time that's why there are so many tangles and complications. One thing that has to be true is if I'm Donald Trump, I don't want neutral people, people who aren't for or against me to question whether I'm ever making a decision on the basis of whether it's good for the country or for my bottom line.

He always needs people to say, he did it because it's good for the country. To the degree these things are nagging at him it's going to be a distraction, he should get rid of. People should also not jump to conclusions that it's wrong, unethical. They need to take time to unwind and figure it out.

Take GSA, does it really present a huge conflict of interest if there are heads on beds who pay $300 a night and that for a guy worth $10 billion will change a decision? No. It might influence the people who run the General Services Administration that holds the lease to think is my boss the president going to differ if I do something.

You have to have ethical lines. You have to get it right. It's going to take time. I love the fact there are private sector people in government. It is healthy, it's a change from career politicians and lawyers that have much easier time getting in.

BOLDUAN: What are you hearing within the transition, how seriously they take kind of the tangled web that they are up against right now about conflict of interest on several different levels?

MURRAY: I think the indication on the one hand, we would like to know sooner rather than later what Donald Trump is going to do, but on the other hand, the fact that they have now pushed this press conference to January is an indication I think that they have realized this is maybe more serious, more complicated than they initially realized.

I do think they saw the onslaught of stories saying look, if Donald Trump just says I'm going to take myself out of day to day operations and puts his two kids in charge and they are sitting in cabinet meetings, that's probably not going to go far enough.

I know that there are advisers who are talking to him and trying to explain that and trying to say while you may be within the bounds of the law, do you really want to spend the first one or two years of your presidency, the peak time to get things done in Congress, answering questions about how something you did may relate to your business decisions.

Because if you want to be an effective president that's probably not how you want to be spending your time. I think those are the discussions that are ongoing right now. Certainly, as Ari said, this will not be a super-easy thing for lawyers to unwind.

BOLDUAN: It will be a super-interesting press conference when we do get it. Tell you that much. Guys, great to see you. Thank you so much.

Coming up next, a movement for a bit of an end run to block Donald Trump on the Electoral College -- when members of the Electoral College meet next week. What's the plan? Is there any chance that it will work?

Plus, breaking news, a ceasefire in Aleppo broken. Tens of thousands of families and children trapped as bombs go off once again. We'll be right back.

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[11:21:01]

BOLDUAN: New details this morning on what and when the Obama administration knew about Russian hacks during the election and why officials didn't respond publicly sooner. One reason is according to our reporting, they didn't want to give Donald Trump a reason to cry foul after what they were certain would be a Hillary Clinton victory in the election.

Of course, after Donald Trump's win, the tables have turned. Democrats are suggesting Russian hackers helped Trump win the election. Let's bring in CNN justice correspondent, Evan Perez, for much more on this. Evan, you have some fascinating reporting on exactly what they knew, when and why there was a delay.

EVAN PEREZ, CNN JUSTICE REPORTER: That's right, Kate. It's one of those hindsight questions that Democrats are asking these days, why didn't President Obama respond more forcefully to the Russian hacks targeting Democrats. Six months ago, in July, law enforcement intelligence agencies were sure that the Russian government was behind these hacks that were targeting the Democratic National Committee.

But over the next three months, the White House and other government agencies debated over exactly how to respond. Some officials in the intelligence agencies warned that the U.S. risked starting a wider cyber conflict with Russia in which the U.S. had a lot more to lose.

The State Department was also worried about keeping Russia at the negotiating table over the war in Syria. As the months went by and Wikileaks kept releasing documents only on Democrats, Obama administration officials also were confident that the Russians were actually trying to hurt Hillary Clinton's campaign and therefore, trying to get Donald Trump elected.

Now White House officials were also worried that publicly outing Russia would appear to be an effort to help Hillary Clinton. The fact is, administration officials were sure that Donald Trump was going to lose and they were worried about giving him any reason to call the election results into question.

The irony now, Kate, is that Democrats are the ones that are angry about what exactly, what they think was a Russian operation that cost them the election and some blame the White House for not doing something earlier.

BOLDUAN: Fascinating. Evan, great reporting. Thank you so much.>

Let's continue to talk about the election and the election result. One Democratic congressman has a message for members of the Electoral College. He is asking, begging, and pleading them to rethink voting for Donald Trump when they meet to make that selection next week. It's basically a last ditch effort possibly to change the outcome of the election.

Let's talk right now with Democratic Congressman Jim Himes. He is joining me. Congressman, it's always good to see you. Thank you for coming in. You are calling for members of the Electoral College when they meet next week to overturn the election, basically overturn the will of the people. How is that OK, Congressman?

REPRESENTATIVE JIM HIMES (D), CONNECTICUT: I'm not asking them necessarily to overturn the will of the people but to consider why they exist and to consider the question of whether in Alexander Hamilton's phase and Hamilton is one of the reasons we have an Electoral College, Donald Trump is temperamentally suited to be president.

Make no mistake, this is not a partisan thing. Yes, I supported Hillary Clinton, but all of Donald Trump's partisan ideas, repealing the ACA, building the wall, that stuff is inbounds. What is not inbounds, what is way out of bounds, is running an international business empire, not doing what you need to do to avoid conflict of interest.

What is not inbounds is criticizing the CIA and the intelligence community in a dangerous world and standing up for the kremlin. It's not inbound to tweet lies about two to three million fraudulent votes. All of these things raise questions about whether this man is temperamentally fit to be president of the United States.

BOLDUAN: But Congressman --

HIMES: I don't think there's a high probability of success thing, but that's why the Electoral College exists.

BOLDUAN: I want to get to that probability in just one second. You call him temperamentally unsuited to be president. That was the line of the campaign for Hillary Clinton. That was decided on November 8th. Elections have consequences. How is this not a partisan issue?

HIMES: As a legal matter, it was not decided on November 8th. A president by law is made in this country by the Electoral College coming together next week to cast their ballots and then the Electoral College results are ratified in the Congress of the United States. That's how this country elects presidents.

[11:25:10]Now by the way, I'm happy to have the conversation if that's a good way to elect presidents. It's a little uncomfortable when you elect presidents who don't have a majority of the popular vote as has happened three times.

But no, what happened on November 8th was an election in which the majority of Americans said they did not want Donald Trump as president. Forget about that. That's not the important thing. The important thing is we have something called an Electoral College and --

BOLDUAN: This is the system we work with. Tell me what you think, what is the percentage chance you think this is going to work?

HIMES: I think it's a very, very low probability.

BOLDUAN: How about zero? How about zero?

HIMES: Well, I can't tell you if it's zero or 5 percent, but it's a low probability thing. I think there's a pretty significant chance that a year from now, we look back and say, oh, my God, how did we get to this place and was there anything we could have done to avoiding it.

BOLDUAN: Well, because people, this is the system we work within and the country elected Donald Trump as president.

HIMES: Mind you, what I'm proposing is exactly the system as it is set up by the Constitution. I'm not proposing anything here that is extralegal. We have an Electoral College. The Electoral College is made up of people who have judgment. I'm just saying the Electoral College should exercise its judgment.

BOLDUAN: Congressman, you sit on the House Intel Committee. We were just hearing from Evan Perez talking about a lot of new reporting out about how much and when the White House knew about Russian hacks and Russian attempts to interfere in our election.

The reasons why according to the reporter the White House didn't respond publicly sooner are the following. Fear of starting a cyber- war. Fear that it would hurt talks between the U.S. and Russia with regard to Syria. And fear it would give Donald Trump ammunition in his argument of a rigged election. Is that good enough reason for you? Do you think the White House messed up here?

HIMES: First of all, I heard your reporter say something or you say something, there aren't a lot of Democrats running around who say the Russian cyber-hacking which did occur and the Russians did it, that it had a clear effect on the election. That's not been established.

While it is incontrovertible true that the Russians hacked into the DNC and a whole bunch of other people and institutions, it's not 100 percent clear, I sit on the committee and heard the testimony, it's not 100 percent clear what the motives of the Russians were.

It's not clear although some people in the intelligence community think that it is, that they were there to help Donald Trump. That needs to be established. Yes, it's been frustrating to see the White House not respond against Russia. They had their reasons for doing so.

They said if we get into an accelerating tit for tat with the Russians that could be destabilizing going into an election. I don't know if that's right or wrong. What I do know is the Russian hacking occurred. Fortunately, Republicans and Democrats are coming together on Capitol Hill to form a group that will investigate exactly what happened there.

BOLDUAN: Congressman Jim Himes, thank you so much for coming in. Always appreciate it.

HIMES: Thanks, Kate.

BOLDUAN: Thank you. Coming up for us, as families suffer and send out their final messages as we speak, the ceasefire in Aleppo has now collapsed. The new onslaught of bombings under way happening right now. We will get you the latest from there.

Plus as this happens, the U.S. says the coalition has killed 75 percent of ISIS fighters. What does this mean when Donald Trump takes over as commander-in-chief? We'll discuss.

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