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EARLY START

Intel Chiefs Presented Trump with Claims; Russia Calls New Report "Pulp Fiction"; Trump & Nominees Face A Grilling; Beginning of the End: President Obama's Farewell. Aired 5-5:30a ET

Aired January 11, 2017 - 05:00   ET

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


CHRISTINE ROMANS, CNN ANCHOR: Developing overnight -- classified documents presented to President-elect Donald Trump include allegations operatives of Russia claim to have compromising information about the incoming commander-in-chief, both personal information and financial. We have exclusive details.

JOHN BERMAN, CNN ANCHOR: Just minutes ago, the Russians weighed in.

All of this ahead of a very big day for Donald Trump, his first news conference in more than six months. He will face questions on this report about Russian intelligence. Also about Obamacare. Also, about his own personal finances. That as more nominees face hearings on Capitol Hill.

ROMANS: And President Obama says farewell in a speech that was both forceful and nostalgic.

[05:00:00] He urged a renewed effort at cooperation and shared emotional words for his family.

Good morning. Welcome to EARLY START, everybody. I'm Christine Romans.

BERMAN: Very nice to see you this morning. I'm John Berman. Wednesday, January 11, huge day, 5:00 a.m. in the east.

We have new developments on the big story you heard first on CNN. CNN has learned that the nation's top intelligence officials provided information to President-elect Trump and President Obama last week on claims of Russian efforts to compromise President-elect Trump.

CNN's Jim Sciutto, part of the CNN team that first reported the story, he gives us the latest.

(BEGIN VIDEOTAPE)

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: John and Christine, multiple U.S. officials with direct knowledge of the briefings tell CNN that classified documents presented on Russian interference in the 2016 U.S. election presented last week to President Obama and to President-elect Trump included allegations that Russian operatives claim to have compromising personal and financial information about Mr. Trump. The allegations were part of a two-page synopsis based on memos

compiled by a former British intelligence operative whose past work U.S. intelligence officials consider credible. The FBI is investigating the credibility and accuracy of the allegations which are based primarily on information from Russian sources. But the FBI has not confirmed many essential details in the memos about Mr. Trump.

The classified briefings last week were presented by four of the most senior intelligence chiefs, Director of National Intelligence James Clapper, the FBI Director James Comey, CIA Director John Brennan, and NSA director, Admiral Michael Rogers.

The two-page synopsis included allegations that will was a continuing exchange of information during the campaign between Trump surrogates and intermediaries for the Russian government, this according to two national security officials.

CNN has confirmed that the synopsis was included in the documents that were presented to Mr. Trump but it cannot confirm if it was discussed in his meeting with those intelligence chiefs.

Now, the transition team for Trump has declined to comment formally to CNN as did the Office of the Director of National Intelligence and the FBI, but we do have Donald Trump tweeting apparently in response to the story, calling it fake news -- John and Christine.

(END VIDEOTAPE)

ROMANS: Neither intelligence officials nor the Trump transition team has offered any kind of formal statements, formal response about these revelations.

But Trump senior adviser and former campaign manager Kellyanne Conway, she was on "Late Night with Seth Meyers" overnight and she offered this immediate reaction.

(BEGIN VIDEO CLIP)

SETH MEYERS, LATE NIGHT WITH SETH MEYERS: CNN had a report that the intelligence community briefed both the president and president-elect with allegations that the Russian government has compromising information on President-elect Trump, both business information and personal information. I know this just happened. Can you confirm or comment the fact that the intelligence community has presented this to Donald Trump?

KELLYANNE CONWAY, INCOMING WHITE HOUSE COUNSELOR: Well, guess what hasn't happened, Seth? Nobody has sourced it. They're all unnamed, unspoken sources in the story. And it says it was based on a Russian investigator to begin with. So, where are we?

MEYERS: I think it was based on an MI-6 British investigation.

CONWAY: Right. Well, one of those and then it says it also may have originated with a Russian investigator. It also says Hillary Clinton -- groups that wanted Hillary Clinton to win may have been behind the investigations itself.

And most importantly, it says that the FBI is trying to confirm it. So, nothing has been confirmed.

And I have to say as an American citizen regardless of your party, or if you don't like politics at all, which are many Americans, we should be concerned that intelligence officials leaked to the press and won't go and tell the president-elect or the president of the United States of United States himself now, Mr. Obama, what the information is. They would rather go tell the press --

MEYERS: But the report was -- the press report was about them going to the president.

CONWAY: And it says that they never briefed him on it. That they appended to two pages on the bottom of his intelligence report.

MEYERS: I believe it said that they did brief him on it.

CONWAY: Well, he has said that he is not aware of that.

MEYERS: OK, that concerns me.

(LAUGHTER)

CONWAY: No, no --

MEYERS: I'm concerned. But in general, I just want to --

CONWAY: (INAUDIBLE)

MEYERS: No, I understand --

CONWAY: And it's not true.

MEYERS: What is not true? That I'm concerned?

CONWAY: No, that I see --

MEYERS: OK, I assure you that I am.

(LAUGHTER)

(END VIDEO CLIP)

ROMANS: Here's what we know, as Jim Sciutto mentioned, as he reported really, CNN has confirmed the synopsis of the claims was included in the documents presented to Mr. Trump. . We cannot confirm if the information was actually discussed in the president-elect's meeting with those intelligence chiefs.

BERMAN: It was a really good discussion on both fronts, Seth Meyers and Kellyanne Conway yesterday. Two people at the top of their game right there.

ROMANS: And more breaking news, reaction from Russia to the latest reporting. A spokesman for Vladimir Putin saying the claims that Donald Trump was compromised by Russian intelligence are, quote, "pulp fiction".

The spokesman, Dmitry Peskov, telling reporters, "Clearly there are those who are creating hysteria, who are trying to support this witch hunt, and President-elect Trump himself described it like this."

[05:05:03] Meaning as a witch hunt. So, the Russian spokesman quoting Donald Trump in his response.

BERMAN: And two things to know here. That is one big one right here. And this is not the first time that the Russian government, the Kremlin has used the same language as the president-elect or the Trump transition to describe the same thing.

By the way, not surprising that the Russians denied it -- I'm not saying it's true or it may not be true. We don't know. But they've also denied hacking into the U.S. election season at all. We also had denials from Russia on this, despite what U.S. intelligence says.

ROMANS: The Kremlin officials saying they do not collect kompromat, there's even a Russian word for this sort of thing. And they say they did not do it.

BERMAN: By the end of the day, everyone in America will know what kompromat means.

ROMANS: Kompromat.

BERMAN: And certainly inside Trump Tower.

This is all but certain to come up on Capitol Hill this morning, in a very major way, and a very crucial hearing. The Senate Foreign Relations Committee is taking up the confirmation of President-elect Trump's nominee for secretary of state, Rex Tillerson.

As CEO of ExxonMobil, Tillerson did extensive business with Russia and Vladimir Putin. This morning, though, he is scheduled to give an opening statement that says "Russia poses a danger", that's in quotation marks. And also in quotation marks, "Russia must be held to account for its actions." He's going to say that.

Also in the spotlight, the second day for confirmation hearings for Attorney General nominee, Jeff Sessions. Today, the committee will hear a pretty unprecedented testimony from a fellow senator against Jeff Sessions, Cory Booker will be part of this hearing.

Joining us now with the latest on the schedule, CNN national security reporter Ryan Browne live in Washington.

And I think the tenor of today's hearings may be very different, based on this new CNN reporting overnight.

RYA N BROWNE, CNN NATIONAL SECURITY REPORTER: Well, that's right. I mean, John, Russia was going to be a big topic today with Rex Tillerson, especially, you know, as you mentioned, he's done a lot of business in Russia. He was awarded an Order of Friendship by president Putin.

And his business deal in Russia kind of fell through when Russia militarily intervened in Ukraine and Crimea. And he actually expressed a little bit doubt how effective sanctions were. And bipartisan group of senators are moving to place new sanctions on Russia for its interference in the U.S. elections.

So, Russia is going to be a hot topic from both Republicans and Democrats and we can expect a lot of questions on that issue today, and I think Tillerson tried to get a little ahead of that with that statement.

But we also heard yesterday from Jeff Sessions who endured hours and hours of testimony, and covered a lot of different topics, everything from same-sex marriage to legalization of marijuana. He defended himself against past accusation of racism.

But there was one exchange with Senator Patrick Leahy which drew a lot of attention.

(BEGIN VIDEO CLIP)

SEN. PATRICK LEAHY (D), VERMONT: Is grabbing a woman by her genitals without her consent, that sexual assault?

SEN. JEFF SESSIONS (R-AL), ATTORNEY GENERAL NOMINEE: Clearly, it would be.

LEAHY: If a sitting president or any other high federal official is accused of committing what the president-elect described in a context in which it could be federally prosecuted, would you be able to prosecute and investigate?

SESSIONS: The president is subject to certain lawful restrictions, and they would be required to be applied by the appropriate law enforcement official.

(END VIDEO CLIP)

BROWNE: Now, the second round of hearings today will not feature Sessions himself but witnesses as you mentioned Senator Booker but also those in favor of Sessions' appointment.

Also yesterday was Marine General John Kelly, Trump's pick for homeland security secretary. And he actually kind of went away from Trump a little bit on the issues of waterboarding and targeting Muslims with surveillance and question the effectiveness of the wall by itself for securing the southern border. And actually, Democrats including the ranking member, Senator McCaskill expressed their support for General Kelly in that role. So, we can expect his confirmation soon.

BERMAN: A busy, busy day. Ryan, thanks so much for being with us. Appreciate it.

ROMANS: All right. Another busy day for Donald Trump. This is probably the busiest day yet of this incoming administration. No question, absolutely.

Donald Trump will host a news conference today. You can watch it right here on CNN at 11:00 a.m. Eastern.

BERMAN: You should watch it right here on CNN.

ROMANS: It was originally scheduled for December 15th. It was postponed, you'll recall.

The big question, how will Trump separate himself from his sprawling businesses?

Trump has said he will not sell his assets. He's going to therefore them to his sons. That's going to be a tall order. Trump owns some or all of 554 companies. This is all according to his most recent disclosure filed last near, 144 of those do business in 25 foreign countries.

Trump also has full or partial ownership of 52 pieces of real estate worth at least $1.2 billion. That includes hotels, golf courses, homes, commercial buildings, a value of everything from $1,200 on one of these entities to upwards of tens of millions.

There's a growing course of ethics experts who say the complexity and the nature of these businesses require a full separation.

[05:10:06] Trump said he will not go that far. Will he go far enough, though, to ensure lawmakers that he will not be acting for the good of his businesses while in the White House?

Trump spokesman Sean Spicer said the president-elect will give a statement and then take statements. A traditional Q&A.

I'll tell you something about why these kinds of businesses are so different. You know, we've had very rich people run for president or run for office before. They've put all of their assets in a blind trust. Meaning they don't know what they own. They don't know what they hold.

Maybe they know the parameters of it. Maybe they know it's all in treasury. Maybe they know it's in blind stock market funds. But Donald Trump -- these things have his name on them. So, the actions he makes with -- it will enrich his businesses things that he does.

BERMAN: We should not expect a blind trust. I think that much is clear.

ROMANS: No.

BERMAN: What he will say and how much depth he will provide one of the things scheduled to come up on the news conference today.

Also, the CNN reporting on the synopsis, this Russian intelligence that perhaps Russian officials and delegations wanted to find compromising information on him.

And then Obamacare. What does he want to do and when the president- elect with Obamacare.

ROMANS: So much right now, very important day.

Let's discuss all of this and the president's farewell address. We haven't even got into that yet. We're going to bring in our political panel, next.

(COMMERCIAL BREAK)

BERMAN: Christine Romans has called this the most important day of the transition for President-elect Trump.

ROMANS: So far.

BERMAN: So far. And she's always right, and these particularly right about this. We have this news conference today with so many questions about his business ties about what he wants to do with Obamacare and about this explosive report that first aired on CNN about these allegations that maybe the Russians wants to collect compromising information on President-elect Trump. All of that is happening with more hearings on Capitol Hill.

Joining us to talk about all it, CNN politics digital managing editor Zachary Wolf and political economist Greg Valliere, chief strategist for Horizon Investments.

[05:15:07] And let me set the stage for you, which kind of brings it altogether. It gives us a sense of the question that Donald Trump might be asked today and also, what these nominees might be faced with on Capitol Hill. And we saw a taste of it yesterday when independent Senator Angus King from Maine was talking to James Comey, the FBI director, asking him if the FBI is investigating alleged ties between the Trump campaign and Russia.

Listen to this.

(BEGIN VIDEO CLIP)

SEN. ANGUS KING (I), MAINE: Mr. Comey, did you answer Senator Wyden's question that there is an investigation underway as to connections between either the political campaigns and the Russian -- Russians?

JAMES COMEY, FBI DIRECTOR: I didn't say one way or another.

KING: You didn't say --

COMEY: That was my intention at least.

KING: You didn't say one way or another whether even there's an investigation under way?

COMEY: Correct, I don't -- especially in a public forum, we never confirm or deny a pending investigation. I'm not saying --

KING: The irony of you're making that statement there, I cannot avoid. But I'll move on. COMEY: But we sometimes think differently about closed investigations.

(END VIDEO CLIP)

BERMAN: So, Greg Valliere, what you see there, not just the questions, which are important, not just the outrage from Democrats on the left which I think we'll see across the board today in some cases, you know? But also the non-answers, which are where we are right now on this story.

GREG VALLIERE, CHIEF STRATEGIST, HORIZON INVESTMENTS: Where to start this morning? There's so much stuff as Christine says will make this a very important day.

I think, you know, there's rumors, it may be fake news about what the Russians may have on Trump. I think the bigger more troubling allegation is that Trump surrogates may have had contacts with Russian officials before the election. That's a really troubling story.

And I have a hunch that's what Comey is looking at.

ROMANS: To be clear, all of that is going to need to be reported, Zach Wolf. So many reporting angles, and investigating angles to follow here.

The question is what dominates the day in your view? I mean, is this a Donald Trump conference that maybe overshadows a Rex Tillerson confirmation hearing? Is Donald Trump talking about his businesses are reporters only asking him about Russia?

ZACHARY WOLF, CNN POLITICS DIGITAL, MANAGING EDITOR: Well, this is his first press conference something in the order of six months. I mean, he's done plenty of speeches. He's done a couple interviews here and there. But this is the first time the press has had chance to ask him questions. I think that that, despite the importance of Rex Tillerson, people are going to be looking at that hearing for some days to come. In hindsight, perhaps, but as far as the daily grind news, whatever Trump has to say especially in response to these new reports I think is going to dominate things.

ROMANS: We should say that Rex Tillerson, he's released -- you know, the transition team rather has released sort of his opening statement. We know sort of what he's going to say at least at the outset today. And, you know, he says Russia must be held to account for its actions on the global stage.

ROMANS: And the questions he may face may be different right now because of the reporting overnight.

You now, Greg, Obamacare, I'm fascinated to hear President-elect Trump answer what may be tougher questions than he's faced in a news conference. I'm wondering if we're going to get more specificity from him on a range of subjects, but specifically the timing on Obamacare, because now his team and the president-elect himself is suggesting that he wants a replacement very close to the repeal. What are you looking for?

VALLIERE: Well, I'll tell you, in the financial market where I do most of my work and talking to investors, there's a growing uneasiness that they don't have their act together, that -- you know, do they really want to replace it with something immediately? Can they? Is there an option, you can have to replace it immediately?

There's a cacophony of differing opinions among Republicans. So, people on Wall Street is starting to say, if they're that un-together on Obamacare, what does this say about tax reform, infrastructure, all of stuff that lies ahead?

ROMANS: You know, Zach, I mean, there are some Democrats who privately have said they knew there were problems with Obamacare and they hope they're able to fix them. But if Republicans want to take this and not have something to repeal it with, it's almost as if you break it, you buy it, then it becomes the Republicans' problems.

WOLF: That's right. You know, and they weren't saying it privately. Bill Clinton said that during the president campaign. So, it's no secret exactly. But, you know, it's also no secret that Republicans have no viable alternative, they have no real way to replace it, at least that I've seen in the near term and it's this piecemeal approach that they cold take, it could really upend things. They're going to have to be extremely careful with the actual policy implications of the political votes that they take.

BERMAN: By the way, the president-elect doesn't have to be on the same page as Congress about this. This could be an area where Congress acts slowly. But a President Trump pressures them and turns up the political heat for them to act more quickly, so he could win some political points there, you know, even if he's not finding solutions.

Greg Valliere, last point here, this news conference is sort of like the one we thought we were getting December 15th where the President- elect Trump promised to tell us how he's going to disentangle his business interests from the government business.

[05:20:09] How much, again, specificity do you think we really will hear today?

VALLIERE: Probably not a lot. And one other thing that I'll be looking for is really big differences between Trump and his key people. I mean, yesterday, you heard Sessions say, you know, he doesn't believe in waterboarding. He doesn't want to have bans on Muslims coming into the country.

I get the concept of a team of rivals. You know, Abraham Lincoln had a cabinet that was all rivals. But if this Trump inner circle is all in disagreement, is it intellectually stimulating or is it chaotic?

ROMANS: Well, it's an interesting point, because you look at the money team in particular guys and I see sort of some of the globalization, you know, forces, free traders who are in there, but then also the protectionists, but also the budget hawk, but also somebody who wants a big infrastructure. So, all of those things are kind of odds with one another. It's fascinating to see how that works out.

BERMAN: Look, his homeland security guy isn't giving full-throated support of the wall. And the wall was pretty important to Donald Trump.

ROMANS: All right, guys. Come back in a few minutes, let's talk soon, OK? Thanks.

With all of that going on, President Obama delivered his farewell address last night -- an emotional farewell with the president urging citizens to stay vigilant in the protection of basic American values. He also teared up when he thanks the first lady for taking the journey with him, taking on a job that she didn't -- that she didn't campaign for. He's making a strong push also to avoid fake institution and other divisive topics in the spirit of progress.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And we should reject the first dawning of every attempt to alienate any portion of our country from the rest. Or to enfeeble the sacred ties that make us one.

America, we weaken those ties when we allow our political dialogue to become so corrosive that people of good character aren't even willing to enter into public service. We weaken those ties when we define some of us as more American than others, when we write off the whole system as inevitably corrupt.

(APPLAUSE)

(END VIDEO CLIP)

ROMANS: There were a few tears in McCormick Place last night. He had shed a tear at one moment, I think talking about his wife.

BERMAN: He did, when he cited Michelle Obama.

That message about no American being more American than another, I think that's important. I think, often time, we talk about, you know, which part of America is the heartland, or which part of America -- you know, it's interesting to hear that.

ROMANS: So, I'm not more American than you are?

BERMAN: Because you're from Iowa, and I'm coastal?

ROMANS: Yes, I'm flyover country. You're the --

BERMAN: We're all American.

ROMANS: All right. Twenty-two minutes past the hour.

Dylann Roof sentenced to death for the murders of nine people in a racially driven massacre in a church. Reaction from one victim's family next.

(COMMERCIAL BREAK)

[05:26:06] BERMAN: This morning, the man who gunned nine people inside a black church in Charleston will be sentenced to the death penalty. Dylann Roof murdered nine people at the Emanuel AME Church in Charleston in 2015. Roof defended himself during the sentencing phase of the trial and said he had no choice but to kill and that he feels no remorse.

A brother of one of the victims says he feels conflicted about the punishment.

(BEGIN VIDEO CLIP)

MELVIN GRAHAM, BROTHER OF CHARLESTON SHOOTING VICTIM: It's a hard thing knowing that someone's going to lose their life. But when you look at the totality of what happened, it's hard to say that this person deserves to live, when the nine others don't. How do you justify saving one life, and he took nine? And in such a brutal fashion, with no remorse. He just took them away from us.

(END VIDEO CLIP)

BERMAN: Roof is the first person convicted of a federal hate crime that will be sentenced to the death penalty.

ROMANS: A $100,000 reward is now being offered for information leading to the arrest of suspected police officer killer Markeith Lloyd. He is wanted for the shooting death of an Orlando sergeant on Monday, as well as the murder of his own pregnant ex-girlfriend last month. There was a candlelight vigil for that officer, Master Sergeant Debra Clayton, in the Walmart parking lot where she was shot and killed. Her funeral is scheduled for Saturday.

All right. The Russian operatives have their hands on compromising information about President-elect Trump. CNN has exclusive details from U.S. officials and now we have the Russian response. You want to hear that, next.

(COMMERCIAL BREAK)