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EARLY START

Trump's HHS Pick Under Fire For Stock Buy; 14 Cabinet Picks Still Await Hearings; Kerry Speaks Out; Istanbul Nightclub Shooting Suspect Caught; Top Russian Diplomat Sends Message to Trump; Global Leaders Descend on Davos. Aired 4:30-5a ET

Aired January 17, 2017 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:30:19] JOHN BERMAN, CNN ANCHOR: All right. New overnight, the man tapped to lead the overhaul of Obamacare facing ethics questions. Did Tom Price use his political influence to help a company in which he is an investor? Results of the CNN investigation moments away.

CHRISTINE ROMANS, CNN ANCHOR: Several of Trump's nominees get ready for their confirmation hearings. But could unfinished ethics reviews slow them down and keep the president-elect's cabinet all but empty when he takes office?

BERMAN: And a number of house Democrats skipping inauguration is climbing. How high will it go? Will the president-elect reach out to stop it?

Welcome back to EARLY START, everyone. I'm John Berman.

ROMANS: Hello, John Berman.

BERMAN: Hello, Christine Romans.

ROMANS: I'm Christine Romans. It's 31 minutes past the hour.

Nice to see you all this morning.

On inauguration week, new trouble for a Trump cabinet nominee this morning. As CNN report has Democrats calling for ethics investigation of Congressman Tom Price. The president-elect's pick to be secretary of Health and Human Services.

The question here this morning, did he use his congressional influence for personal profit? Our review of House records shows Price bought as much as $15,000 of a stock in a hip and knee implant maker, company named Zimmer Biomet. And just days later, he introduced legislation that would have directly benefited the company. The Hip Act would have delayed a change in Medicare and Medicaid reimbursement. A change that would have seriously hurt Zimmer Biomet.

Then, not long after Price filed that bill, Zimmer Biomet's political action committee donated $1,000 to Price's re-election fund. After first keeping silent, Price is now responding. A Price aide

saying after CNN aired the story, that the stock was purchased by a broker without Price's knowledge. The aide said in a statement, "Any effort to connect the introduction of Dr. Price's legislation co- sponsored with Democrats, to a campaign contribution is demonstrably false. Dr. Price is fully complying with the recommendations put forth by the Office of Government Ethics."

A spokesperson for Zimmer Biomet did not respond for a request for comment.

BERMAN: All this has Senate Democratic Leader Chuck Schumer renewing calls for an ethics probe of Price, saying in a statement, "This new report makes clear that isn't just a couple of questionable trades, but rather a clear and troubling pattern of Congressman Price trading stock and using his office to benefit the companies in which he is investing. This report and his previous trades cast serious doubt on whether Congressman Price is fit to hold the office of Secretary for Health and Human Services."

Congressman Price has promised to divest from 43 companies, including Zimmer Biomet. If he is confirmed as health and human services secretary, Price would be a key player in the effort to repeal and replace Obamacare. He proposed plans four years ago. The president says he will unveil his replacement for Obamacare after Price is confirmed. That could be the real impact here. Perhaps further delaying or complicating that process.

ROMANS: He is an orthopedic surgeon. He knows that world. He knows the world of the knee implant and hip implant and the like. And for many years, there were no restrictions on Congress members trading stocks.

BERMAN: Correct, but that changed over the last few years.

ROMANS: That has changed recently.

All right. Tom Price is just one of many nominees facing confirmation hearings this week. Time is running out for them to complete the review process. Fourteen cabinet picks must sit for Senate hearings. Five have finalized the paper work.

Our Jeff Zeleny previews who is on the Senate hot seat this week and what to expect.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: John and Christine, three days to go before Donald Trump takes office and another round of confirmation hearings here on Capitol Hill. Up today, Interior and Education. Congressman Ryan Zinke from Montana is the candidate for Interior. Betsy DeVos, a long time education reformer from Michigan is the candidate for secretary of education. Now, both of these nominees, like others of Donald Trump, are expected to eventually be confirmed. But there are some specific questions about some of their policies. But one thing that some Republicans are concerned about this week.

There simply will not be as many cabinet members who are likely to be confirmed by the time Donald Trump takes office on Friday.

Up also this week, the treasury secretary nominee, perhaps one of the most controversial, as well as Tom Price. So, this week is setting up to be as contentious as last week. And one thing that we are seeing, some of these cabinet nominees simply have different views than Donald Trump on a number of issues. So, look for senators to exploit those differences or simply find out more about those differences here.

But regardless, three days from now, Donald Trump takes office whether or not all his cabinet secretaries are in place -- John and Christine.

(END VIDEOTAPE)

BERMAN: All right. Jeff Zeleny, thanks so much.

Word this morning that the president-elect's nominee for labor secretary might be having second thoughts about taking the job.

[04:35:05] A business ally and Republican sources tell CNN that fast food executive Andrew Puzder is unhappy about the barrage of criticism unloaded by Democrats and unions and some liberal groups. One Republican told CNN, quote, "He may be bailing. He is not into the pounding he is taking and the paperwork."

After CNN first reported word of Puzder's doubts, he tweeted, "I'm looking forward to my hearing." That hearing was initially scheduled for this week, but now probably will not happen until next month.

ROMANS: All right. With just three days until the inauguration, President-elect Trump is not backing away from various controversies, stoking concerns around the world. In the last few days alone, he has given new reason for concern to NATO, China, the European Union, and to the Germans when he went after Chancellor Angela Merkel's immigration policy, calling it catastrophic. And many people on the other side of the Atlantic said he was weighing in to their domestic policy, telling another head of state what to do, a faux pas.

Now, outgoing Secretary of State John Kerry is weighing on Trump's willingness to inject his opinions.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: Well, I thought frankly, it was inappropriate for a president-elect of the United States to be stepping into the politics about the countries in a quite direct manner. And he'll have to speak to that as of Friday. You know, he's responsible for that relationship.

(END VIDEO CLIP)

ROMANS: As for Merkel, she said she'll wait until after Trump's inauguration to engage with him. BERMAN: Outgoing CIA Director John Brennan taking a parting shot at

President-elect Trump. Brennan insists he is not responsible for leaking details of an unsubstantiated dossier on Trump, as the Donald Trump suggested on Sunday.

Brennan called the president-elect's comments comparing the U.S. intelligence community to Nazi Germany offensive. Brennan told "The Wall Street Journal", "It's when there are allegations about leaking or about dishonesty, or a lack of integrity, that's where I think the line is crossed. Tell the families of those 117 CIA officers who are forever memorialized on our wall of honor that their loved ones who gave their lives were akin to Nazis, I found that very repugnant."

ROMANS: President-elect Donald Trump and Vice President-elect Pence head to Washington today ahead of Friday's inauguration. No details have been released about their schedules. Right now, the Trump transition team trying to soothe tensions with the African-American community over the president-elect's feud with the civil rights icon John Lewis.

Listen to spokeswoman Kellyanne Conway suggests that Georgia congressman is to blame for questioning legitimacy of Trump's victory.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, INCOMING COUNSELOR TO THE PRESIDENT: Donald Trump calls himself a counter-puncher. He does not draw first blood. That was the case here too. You can respect Congressman Lewis' vaunted place in our history and still defend yourself. I wonder why, in a week that starts -- starting off the week where you end being the president of the United States, he has to say that about your election.

(END VIDEO CLIP)

ROMANS: The president-elect met with the son of Martin Luther King Jr. at Trump Tower, and Martin Luther King III, sounded a lot like his father, offering a message of reconciliation.

(BEGIN VIDEO CLIP)

MARTIN LUTHER KING III, SON OF DR. MARTIN LUTHER KING JR.: Things get said on both sides in the heat of emotion. And at some point, this nation, we've got to move forward. We can't stay -- I mean, people are literally probably dying. We need to be talking about how do we feed people, how do we clothe people, how do we create the best education system? That's what we need to be focused on.

(END VIDEO CLIP)

ROMANS: The list of Democratic representatives not attending the inauguration is now up to 41. The vast majority of them are boycotting. And I think in every inauguration, there are some who don't go, can't go, won't go, don't want to go.

BERMAN: Yes, it's cold. And it's a hassle -- I'm dead serious. It's cold and it's a hassle getting through security. So, you have some of the 535 members of Congress who are like, yes, I have been to one, I've been to a bunch. What's different this time you have people literally saying they are not going for cause.

ROMANS: All right.

BERMAN: What they considered a cause.

ROMANS: Right, exactly.

Donald Trump has top business leaders freaking out of trade. Nearly six in 10 global CEOs are worried about protectionism and rising trade barriers. That's up from 40 percent in 2012.

Now despite concerns, 52 percent of the bosses plan to increase hiring this year. The process, though, makes them nervous, 78 percent are worried the applicants will not have the right skills. I hear that more than anything fro CEOs.

One company that is unapologetically adding workers at a plant in Mexico is BMW. Despite being called out by Donald Trump over the weekend, BMW says it is staying put in Mexico. The company tells CNN Money it has not shifted any jobs from the U.S. to its Mexican plant, that it will sell the cars it makes there all over the world, including into the United States, regardless of Trump's threat to impose a tariff.

The automaker also says its largest factory in the world is in South Carolina. That plant built 400,000 vehicles last year, more than it sold in all of the U.S. So, it ships them elsewhere.

BMW is the largest U.S. exporter of cars. It is the largest U.S. -- it's such a great analogy for globalization, right? It's a German company that's building cars here. More cars it can sell in the United States and it's expanding in Mexico.

[04:40:02] Donald Trump is saying, hey, if those cars you build in Mexico, I'm going to tax them. BMW is saying, go right ahead.

BERMAN: None of this is easy. None of this as simple as some politicians like to make it sound.

All right. Breaking overnight: the three-year underwater search for missing Malaysia Airlines Flight 370 has been suspended. In a joint statement, Australia, China and Malaysia, who led the search, they said despite the best science and cutting edge technology, they have been unable to locate the aircraft. MH-370 vanished in March of 2014 over the Indian Ocean on route from Kuala Lumpur to Beijing, with 239 people onboard.

In response, the MH370 family support group Voice 370 issued its own statement saying, "In our view, extending the search to the area defined by the experts is an inescapable duty owed to the flying public in the interest of aviation safety. Commercial planes cannot just be allowed to disappear without a trace." ROMANS: All right. Breaking details overnight, after police find the man they say opened fire in a Turkish nightclub on New Year's Eve. Where he is tracked down, and what he is telling investigators, next.

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BERMAN: The suspected gunman who opened fire inside an Istanbul nightclub on New Year's Eve is in police custody this morning. He and four others were arrested during a police operation late Monday. Now, he is speaking to investigators who have learned new details.

I want to go live to Istanbul and get the very latest from CNN's Ian Lee.

[04:45:02] New details, Ian.

IAN LEE, CNN REPORTER: That's right, John. We are learning who this person is. They named him as Abdulkadir Masharipov. This is an Uzbek national who was educated in Afghanistan. Came to Istanbul or to Turkey about a year ago. They're saying he was captured in the Esenyurt neighborhood in the operation late last night. Four other people were also detained. A man from Iraq, a woman from Egyptian and they say two other women from Africa.

They say that gunman has confessed to the crime. They say his fingerprints also match the fingerprints that were found on the gun. He was discovered just only 20 miles away from the Reina Nightclub shooting where that took place.

This was a massive operation all over the country. Thousands of police officers were involved. They raided 152 different locations. 50 people were also arrested with, they say, alleged ISIS supporters who had links to this man or to this attack.

So, that noose was slowly tightening around him, to find him. And then late last night, two weeks after this attack had taken place, they were able to nab him. The owner of the nightclub saying that this is a huge relief, that a weight has been lifted off the shoulders of the victims and the families, just knowing that this man is no longer walking free.

I think one of the key things here, John, is that they were able to take him alive. So, there will be a treasure trove of information, hopefully, that he can give Turkish authorities.

BERMAN: We'll be following a lot of leads through him no doubt. Ian Lee, thanks so much.

ROMANS: All right. America lost another space pioneer. Former astronaut Gene Cernan has died. He was one of a dozen astronauts to walk on the moon, and the last man to do it. As commander of the Apollo 17 mission in December 1972.

(BEGIN VIDEO CLIP)

GENE CERNAN, U.S. ASTRONAUT: I would like let what I believe history will record that America's challenge of today has forged man's destiny of tomorrow.

(END VIDEO CLIP)

ROMANS: Gene Cernan was also one of just three astronaut who went to the moon twice. His family says he died following ongoing health issues. They say his passion for space exploration never waned. Cernan was 82. It is hard to believe 44 years ago last time he set foot on the moon.

BERMAN: He was a phenomenal pilot, too. Swashbuckling aviator.

ROMANS: All right. The ultra rich making their way to Davos, Switzerland, this week.

BERMAN: I say it like you. If you are ultra rich, you say, hello, everyone.

ROMANS: Right. I say Davos, they say Davos.

We'll take you there where CNN's Richard Quest is talking to the top financial minds in the world. Find out why he says business leaders should get real and close up shop. That's next.

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[04:51:11] BERMAN: Breaking overnight: Russia's top diplomat delivered what seemed to be a final parting shot at the Obama administration. Sergei Lavrov suggested that the incoming Trump administration taking a more pragmatic approach to problem solving.

Joining us now, global fellow at the Woodrow Wilson Foundation, Jill Dougherty, live from Moscow.

Jill, Sergey Lavrov with a lot to say about the outgoing and incoming administrations.

JILL DOUGHERTY, WOODROW WILSON FOUNDATION: Yes, lots of digs against the Obama administration which have basically Russia believes ruined the world, upset everything, broke the pots and they are ready to work with the Trump administration.

They did say, however, Minister Lavrov, they're not quite sure I think exactly what Donald Trump is going to do. In fact, Minister Lavrov referred to the world as Donald Trump sees it. But that said, what they do want to do is have a more pragmatic relationship.

In essence, what this foreign minister was saying is, let's do a deal. Let's be pragmatic. Let's forget about all of those values which he, you know, would argue led to revolution and fighting on the streets, Ukraine, Arab spring, et cetera. Let's work together. And we want to work on fighting terrorism.

He also got back to that issue just that we heard yesterday on Donald Trump supposedly saying that if Russia were to give -- that the U.S. could give up sanctions if Russia were to work towards some type of nuclear deal. And the minister said, I don't see that linkage, but that said, if we can work on strategic stability, that would be very good for Russia. And he argues it is the Obama administration that destroyed strategic stability -- John.

BERMAN: All right. Jill Dougherty for us in Moscow this morning -- thanks so much, Jill.

ROMANS: All right. At this very moment, there's this little tiny mountain town in Switzerland where there's a huge meeting of influential minds. It's called the World Economic Forum. It happens every year in Davos.

You've seen the pictures of the ultra wealthy mixing with the politically powerful. High minded economists rubbed elbows with global financiers. But this year, the mood is different.

CNNMoney editor at large, Richard Quest, is there for us as he is every year in Davos, Switzerland. He is also the host of "QUEST MEANS BUSINESS" on CNN International. He wrote this fascinating article that's up right now on CNNMoney.

And you say the global elites meeting their need to get real or close up shop. There is a global revolt of the working class against globalization and the people where you are have been proponents of globalization for the past 20 years. You say they've got to change their thinking.

RICHARD QUEST, CNNMONEY EDITOR AT LARGE: It is as if they have been told that the world is flat after all, because Christine, for the last 30 or 40 years, the western consensus has been that globalization is good. And therefore, the more globalization, the more export of Western capital, the more values of large corporations that would be to the benefit. And what Trump's victory and not to forget Brexit and the Italian referendum on constitutional reform, that is an awakening.

But the reality is they are not sure first of all what it means and they are certainly not sure what they can do about it, because it is challenging the very core of their beliefs here, Christine.

BERMAN: You know, Richard Quest, one of the few things probably not in abundance at Davos is humility. Do you get the sense that any of these high flyers admit they got it wrong or are getting it wrong and begun to be introspective about the why?

[04:55:03] QUEST: Not a bit of it. There are 400 panels and there isn't one panel -- not one -- with the title how we got it wrong or why we were so out of touch. There's lots of panels about restoring the middle class, making global economy work, the future of wealth -- all those sort of things.

I'm going to show you a graph, a little chart. As Trump prepares to take office, we are asking everybody with Brexit and Trump, what do they make on the scale of uncertainty? How uncertain is the world at the moment?

And look where they all are. They are all over here, the level of uncertainty, the global economy heading towards ten. These are the issues -- Donald Trump, jobs, Brexit, trade, populism, protectionism. Now, by the way, if you want to join our chart @richardquest, and we'll add as to where you think you should be on the chart of uncertainty.

The reality is, here, they're not sailing on majestically, irrelevant to what's happening. But they are having a fundamental introspection of what they need to do to get on top once again.

ROMANS: You know, Richard, I would argue this. I would argue that they always knew there could be big losers in globalization. They always knew it.

They knew that the benefits would be to consumers to be able to buy cheaper goods in the United States. It would be to low wage workers in developing markets, but it would mostly be to shareholders and investors. I would argue they knew that and they just never followed through on the kinds of reforms to match skills and labor, to do education, to do the kinds of things you need to do to lift everybody up.

QUEST: Absolutely. But when Klaus Schwab, the head of WEC, he says to me, Richard, you talk about being against people, against globalization. What about the hundreds of millions of people in India, in Africa, in Southeast Asia that are being lifted out of poverty as a result of globalization.

Now, that is a powerful argument in favor of globalization. Unfortunately, they are not the people that actually voted for Donald Trump or for the Britain to leave the European Union.

ROMANS: In some cases, the rough edges of globalization have hurt those people too when you look at labor standards around the world in some cases. I mean, I'm thinking of -- in Bangladesh, the factory that collapsed that killed the young women making cheap goods for American consumers and big American multinationals.

I mean, there have been rough edges of globalization. That is the theme of these elections.

QUEST: One other point. Last night, I was talking to Philip Jennings, who's head of UNI, which is the global trade union organization. On the question of American jobs, he basically says Donald Trump has fooled those American workers who believe firstly that jobs are coming back. Secondly, that they will be well-paid jobs with benefits. And thirdly, he has fooled them into believing that the U.S. economy can be recreated in a model of 4 percent growth.

He is of the opinion, the global trade unionists here believe that Trump has effectively performed a con on the American voter. I put it to him, that's way too soon to say. But he says, wait and see. It will be proven to be true.

BERMAN: Inauguration in three he days. Not much more time to wait.

Richard, Xi Jinping, the leader of China, due in Davos. What are we expecting from him? QUEST: Fascinating. As America appears to be disengaging from the

world so that the Chinese have roared in. That is how President Xi's visit here is being seen. How he is going to capitalize not on globalization, but on the perceived withdrawal by the U.S. of global leadership.

The president-elect has made it clear that the U.S., under his leadership, does not want to be the global policeman. Well, guess what? China is waiting in the wings on trade, on jobs, on investments, on exports.

China is waiting in the wings and will start today. And today is the first time you're going to hear China say we are ready to move in.

ROMANS: I'm told they have a pretty big delegation. So, it's going to be so interesting.

Richard Quest, we know you're there for us --

QUEST: Huge.

ROMANS: Huge.

All right. Richard Quest, nice to see you this morning --

QUEST: Huge.

ROMANS: -- in Davos. Thanks, Richard.

BERMAN: No, no, no.

All right. EARLY START continues right now.

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BERMAN: New overnight: questions facing the man tapped to lead the overhaul of Obamacare. A CNN investigation into Congressman Tom Price, the results just moments away.