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EARLY START

Mueller Recommends No Jail Time For Flynn; State Funeral Today for George H.W. Bush; Trade Concerns Send Stocks Plummeting; Senators Furious After CIA Khashoggi Briefing; Republican Party Under Fire in Michigan & Wisconsin. Aired 4:30-5a ET

Aired December 5, 2018 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:30:35] CHRISTINE ROMANS, CNN ANCHOR: Don't lock him up. Robert Mueller recommends no prison time for Michael Flynn because of substantial help with the special counsel.

DAVE BRIGGS, CNN ANCHOR: And a national day of mourning. A state funeral this morning for the late President George Herbert Walker Bush.

ROMANS: Stocks take a big tumble. Wall Street realizes the trade war with China is not over.

(BEGIN VIDEOI CLIP)

SEN. BOB CORKER (R), TENNESSEE: If he was in front of a jury, he would be convicted in 30 minutes.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: There's not a smoking gun, there's a smoking saw.

(END VIDEO CLIP)

BRIGGS: Republican senators furious after a CIA briefing on the Jamal Khashoggi murder. The relationship with the Saudis under renewed scrutiny. Some significant pushback from Republican senators to the president.

Welcome back to EARLY START. I'm Dave Briggs.

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

Special counsel Robert Mueller recommending no jail time for President Trump's former national security adviser, Michael Flynn, because of, quote, substantial help in the Russia probe. Much of what Flynn told the special counsel remains shrouded in secrecy. You can see the report there heavily redacted, but Mueller does say, Flynn's early cooperation convinced others to be forthcoming, the key line in those documents, and that Flynn's lies about his contacts with the Russian ambassador in late 2016 were repeated by senior Trump transition team members.

BRIGGS: Flynn's full account of events has been one of the best-kept secrets in Washington as Mueller puts together the final pieces of his case.

We get more now from CNN's Sara Murray in Washington.

(BEGIN VIDEOTAPE)

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Good morning, Christine and Dave.

President Trump's former national security adviser Michael Flynn has provided, quote, substantial assistance to the Russia investigation and should not get jail time. That's the big news from special counsel Robert Mueller's court filing on Tuesday night. Now the filing, a sentencing memo, comes after Flynn has cooperated with Mueller's team for more than a year, sitting for 19 interviews with the special counsel and other Justice Department offices.

The memo appears to show that Flynn help the Justice Department with at least three ongoing investigations. References to two of the investigations are almost completely redacted.

Now, Flynn also cooperated with the special counsel's investigation into links or coordination between the Russian government and members of the Trump campaign, as well as interactions between the Trump transition team and Russia. The Flynn revelations come amid this flurry of activity from the special counsel's team.

Last week, Trump's former personal attorney Michael Cohen pleaded guilty to lying to Congress. And prosecutors accuse former Trump campaign chairman Paul Manafort of lying to the special counsel and violating his cooperation agreement.

Now, as for Flynn, he was a fixture with Trump on the 2016 campaign trail, even leading a "lock her up" Hillary Clinton chant at the Republican National Convention. His stint as a national security adviser in the White House, though, that was brief. He was fired more than two weeks after then Acting Attorney General Sally Yates told the White House that Flynn lied about his communications with the Russian ambassador and could be blackmailed by the Russians.

Flynn is set to be sentenced on December 18th in D.C. federal court.

Back to you, guys.

(END VIDEOTAPE)

BRIGGS: Sara Murray, thank you.

Trump lawyer Rudolph Giuliani is apparently not concerned about whatever Michael Flynn shared with Mueller's team. Giuliani telling NBC News, quote, they don't have bupkis, he says, if Flynn had information that could hurt the president, you would know it by now.

ROMANS: President Trump's ally Roger Stone invoking his Fifth Amendment rights, refusing a request from the top Democrat on the Senate Judiciary Committee for documents and an interview in the Russia investigation. President Trump tweeted Monday that Stone had, quote, guts for saying he wouldn't testify against the president in the special counsel's Russia probe. But don't forget what the president said in the past about people who do take the Fifth.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Have you seen what's going on in front of Congress? Fifth Amendment, Fifth Amendment, Fifth Amendment. Horrible, horrible.

The mob takes the Fifth. If you're innocent, why are you taking the Fifth Amendment?

When you have your staff taking the Fifth Amendment, taking the Fifth so they're not prosecuted, I think it's disgraceful.

(END VIDEO CLIP)

ROMANS: Stone's attorney says the request from Senate Democrats for information are far too overreaching and far too wide ranging. Stone has already testified before the House Intelligence Committee.

BRIGGS: It's a national day of mourning here in the United States. Today, former President George Herbert Walker Bush will be honored with a state funeral at the National Cathedral.

[04:35:03] These are live pictures right now.

Thousands of friends, former colleagues, and everyday Americans have been lining up to pay their final respects at the capitol rotunda where Bush 41 has been lying in state. Last night, members of the Bush family returned to the rotunda. George W. Bush and his wife Laura pausing at the casket and later greeting members of the public.

ROMANS: Earlier in the day, a poignant moment. Former Senator Bob Dole helped out of his wheelchair for his final salute to the former president. Just a remarkable moment. And a moment that brought a smile to many people's faces. Sully, the president's loyal service dog, pausing before his casket.

Today, current and former presidents and world leaders will attend a service to commemorate the life of America's 41st president. On Tuesday, First Lady Melania Trump -- what an amazing photograph -- she hosted a White House tour for about 20 members of the Bush family. They got to spent time there, they've got to talk to people they used to work with in the residence.

Tonight, Mr. Bush's family will be taken back to his home state of Texas where he will lie in repose until he is buried tomorrow.

BRIGGS: Al Gore offering up fond memories of Bush 41. The former vice president was part of the ticket that beat Mr. Bush, then lost to his son Bush 43 in a hard-fought presidential bid eight years later. Gore remembers one of the first calls he received after that hotly contested 2000 race.

(BEGIN VIDEO CLIP) AL GORE, FORMER VICE PRESIDENT: It was after my second and final concession speech after the Supreme Court decision, and when I got in the Secret Service car to go back to the V.P. house at the naval observatory, I was surprised when the car telephone rang and it was President George H.W. Bush. He said such incredibly kind things. And what he said was rooted, again, in his love for our country.

(END VIDEO CLIP)

BRIGGS: He had another reminder -- yet another reminder of a different era in politics. Gore says Mr. Trump -- excuse me, Mr. Bush leaves behind a legacy of dignity and grace.

ROMANS: All right. U.S. financial markets will be closed today to honor the memory of the former president. It was a respite that will be welcome today. The Dow fell 799 points. That's 3.1 percent on Tuesday.

The worst day since October 10th this year when the Dow lost 832 points. The Nasdaq closed down 3.8 percent. The S&P 500 fell 3.2 percent.

Those are big one-day moves. And 799 points, that sounds really scary. In point terms, it was the fourth largest drop in history. In percentage terms, that's 3.1 percent. I mean, certainly, a bad day but ranks as the 329th worst day ever percentage-wise.

So, put that in perspective. We have seen far worse days. Two things took stocks down. First, the realization of the trade war with China is not over. There's a mountain of hard work to do.

And the president's boasts of progress, they weren't matched by the Chinese rhetoric. The Chinese haven't acknowledged there's a 90-day negotiation period underway. Stock market losses accelerated when Trump called himself tariff man in a tweet storm. Markets did not like that.

Second, there's a technical move in the bond market in the past signaled a slowing economy or recession, it's called an inverted yield curve. That scared the stock market, too.

Perspective here. Excuse me, stocks are still higher for the year. The Dow is up 3.5 percent. The S&P 500 up almost 3 percent. The Nasdaq composite up more than 6 percent for the year. So, still higher on a year, but it's been a volatile, volatile past couple of months.

BRIGGS: Republican senators outraged after a classified briefing from CIA Director Gina Haspel about the murder of Jamal Khashoggi. Bob Corker of Tennessee and Lindsey Graham of South Carolina leading the charge against Saudi Crown Prince Mohammed bin Salman. They want him held accountable for his involvement in the killing of the "Washington Post" journalist.

(BEGIN VIDEO CLIP) CORKER: I have zero question in my mind that the crown prince, MBS, ordered the killing, monitored the killing, knew exactly what was happening, planned it in advance. If he was in front of a jury, he would be convicted in 30 minutes.

GRAHAM: There's not a smoking gun, there's a smoking saw. You have to be willfully blind not to come to the conclusion that this was orchestrated and organized by people under the command of MBS, and that he was integrally involved in the demise of Mr. Jamal Khashoggi.

(END VIDEO CLIP)

BRIGGS: Senator Graham went on to say he can no longer do business with Saudi Arabia if the, quote, crazy crown prince is still running the country.

Let's go live to Abu Dhabi and bring in CNN's Sam Kiley.

Sam, any international reaction here?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, there has been, whether directly to this, it's difficult to say, but the Turks announced that they would like -- they are going to issue arrest warrants for the former deputy head of intelligence, General Asiri and Mohammed bin Salman's right-hand man in the palace, particularly when it comes to media issues, Saud Qahtani, both relieved of their positions but neither of whom in the Saudi investigation have been accused or charged. Unlike a number of others who have been and, indeed, the Saudi prosecutor has said that they could face the death penalty for the alleged murder of Jamal Khashoggi.

On top of that, the Turks are also saying why not extradite all of the accused to turkey to face the music there, face an open trial, and have this whole saga put to bed. Of course, that does not and would not solve the riddle, which certainly as far as those senators are concerned, the CIA, has satisfied them. The riddle of who gave the order. And that order as far as they're concerned for the murder of Jamal Khashoggi has been given by none other than the crown prince, coming at a very difficult time for Saudi Arabia as they embark on peace talks over the Yemen.

BRIGGS: Significant pushback from the senators. You can't help but wonder if more calls for investigation from house Democrats once they take over.

Sam Kiley live for us in Abu Dhabi, thanks.

ROMANS: All right. But not every lawmaker is concerned about an American ally orchestrating the murder of a U.S.-based journalist. Congressman Chris Stewart is defending President Trump's America First response to the gruesome killing of the "Washington Post" journalist, Jamal Khashoggi, in the Saudi consulate in Istanbul.

Here's what he told CNN on Tuesday.

(BEGIN VIDEO CLIP) REP. CHRIS STEWART (R), UTAH: We have to have a relationship with some players that we don't agree with. Journalists disappear all over the country. Twenty journalists have been killed in Mexico. You don't think it's happened in Turkey and China? Of course, it does. Yet, we have to have a relationship with these individuals or countries.

(END VIDEO CLIP)

ROMANS: Stewart claims it is a difficult challenge, holding the Saudis accountable, while at the same time protecting U.S. interests.

BRIGGS: Wow.

The former mayor of New York City, Michael Bloomberg, has a message for Democrats, now that you've been the House, do something. Bloomberg spent more than $110 million to help Democrats take control of the House in the midterm elections.

He spoke exclusively to CNN on Tuesday.

(BEGIN VIDEO CLIP)

MICHAEL BLOOMBERG, FORMER NEW YORK CITY MAYOR: Now, this new Congress has to do something. If they sit back and do the same thing that the people they ousted did, then I'm not going to be happy. And I've told Nancy Pelosi that.

(END VIDEO CLIP)

ROMANS: Bloomberg also had harsh words for President Trump, contrasting him with the late Bush 41.

(BEGIN VIDEO CLIP)

BLOOMBERG: The current president doesn't seem to have any feeling of sacrifice for the good of the country. And maybe that's one of the real differences. It's not policy, it's how you purport yourself.

(END VIDEO CLIP)

ROMANS: Bloomberg is considering a run for president in 2020. He was in Iowa promoting his new documentary on climate change. He says he will not decide on a 2020 run until early next year.

BRIGGS: Ahead, they didn't complain when they were in power. But now, Republicans in Wisconsin and Michigan are trying to strip power from incoming Democratic leaders.

(COMMERCIAL BREAK)

[04:47:27] BRIGGS: Republicans in the key swing states of Michigan and Wisconsin under fire for trying to strip away the power of incoming Democratic leaders.

In Wisconsin, Republicans are conducting an extraordinary session to limit the power of incoming Democratic Governor Tony Evers and Attorney General Josh Kaul. They are trying to acquire legislative approval for decisions traditionally made by the governor and attorney general, including a promise to withdraw the state from a federal lawsuit against Obamacare.

ROMANS: Republicans defending their power grab, even though the issue was never raised when they won statewide offices.

(BEGIN VIDEO CLIP)

ROBIN VOS (R), SPEAKER, WISCONSIN STATE ASSEMBLY: The number-one priority for us is to make sure we restore the balance of powers between the two co-equal branches of the government.

SEN. SCOTT FITZGERALD (R), WISCONSIN SENATE MAJORITY LEADER: I'm concerned. I think that Governor-elect Evers is going to bring a liberal agenda to Wisconsin. And that --

(CROSSTALK)

(END VIDEO CLIP)

ROMANS: Republicans in Michigan are also using a lame duck session to rewrite the rules. They could step in to defend a law allowing religious groups to refuse to place children up for adoption with same-sex calms. Incoming Democratic attorney general Dana Nessel has suggested she might not back that law in court.

BRIGGS: Emails of top officials at the National Republican Congressional Committee hacked during the 2018 midterm elections. GOP sources tell CNN it was the work of an unknown entity. The breach was discovered by a vendor in April after emails from four senior committee aides had been surveilled for months. Our source says the hacker obtained passwords but did not access other NRCC systems as a result of the breach.

ROMANS: All right. A first for the ride-hailing industry. Uber and Lyft drivers will soon get a minimum wage. We'll get a check on CNN Business, next.

(COMMERCIAL BREAK)

[04:54:11] ROMANS: "The New York Times" reports ex-CBS chief Leslie Moonves destroyed evidence and interfered with an investigation into sexual misconduct allegations. A draft report from lawyers hired by CBS says Moonves was evasive and deliberately lied. The report said to alleged multiple acts of nonconsensual sex in and outside of the workplace. If that proves true, it could cost Moonves a $120 million payout. Moonves has denied more than a dozen accusations of sexual misconduct.

BRIGGS: A dispute between the NFL and Cleveland police over when the league asked to see surveillance video of Kareem Hunt's altercation with a woman at a hotel back in February. Police say the NFL did not make a formal request until November 30th, the same date TMZ posted the video on its website. But a league spokesman claims there were multiple conversations with Cleveland police officers and a request for the video back in February.

[04:55:03] Hunt was cut by the Kansas City Chiefs when the video was made public. He's cleared waivers and has apologized, insisting he deserves another chance.

ROMANS: Princeton's all-male a cappella group has dropped the classic Little Mermaid song "Kiss the Girl" from its act over concerns about consent.

The Princeton cut the tone because some students complained not only about the lyrics, "I don't take a word, not a single word, go on and kiss the girl," that lyric in particular, but the performance itself. It includes picking a man and woman randomly and encouraging them to kiss. The group's president said they won't perform until they come up with a performance that's enjoyable and comfortable for every audience member.

BRIGGS: Ohio State University head football coach Urban Meyer is calling it quits because of health problems. Meyer plans to step down after the Buckeyes Rose Bowl game against Washington. The 54-year-old Meyer had surgery in 2014 on a brain cyst that was causing severe headaches. In an interview Tuesday, Meyer said he doesn't believe he will coach again.

Ohio State went 12-1 this season. Meyer was suspended for the first three games of 2018, stemming from his handling of domestic violence allegations against a former assistant.

It is a longtime dream come true for comedian Kevin Hart. He's been chosen to host the 2019 Academy Awards. Hart succeeds Jimmy Kimmel who hosted the last two Oscar ceremonies. He's previously hosted the BET Awards in 2011 and the 2012 MTV Video and Music Awards.

Hart says in an Instagram post that he was blown away by the opportunity adding now it's time to rise to the occasion. The 91st Oscars will air live on ABC on February 24th.

ROMANS: All right. Let's get a check CNN Business this morning.

Global markets lower after the Dow lost nearly 800 points Tuesday. In Asia, the Nikkei down just about half a percent. The Shanghai fell a little, about half a percent as well, and the Hang Seng is down 1.6 percent.

The decline carrying over to European markets as they opened about an hour or an hour and a half ago. The DAX in Germany, FTSE in London, the Paris index, all down a little more than 1 percent in early trading there.

U.S. financial markets will be closed today to honor former President George H.W. Bush, a welcome respite after Tuesday's close. The Dow fell 799 points, 3.1 percent. The Nasdaq closed down almost 4 percent. The S&P fell 3.2 percent.

Some perspective here: 799 points down for the Dow sounds scary but ranks only the 329th worst day ever percentage-wise. The Treasury Department released a proposal for overhauling the Postal

Service Tuesday and stopped short of full privatization. An idea the White House floated over the summer. President Trump ordered the report in April after he repeatedly attacked the U.S. Postal Service deal with Amazon.

Back in December, the president tweeted the deal was, quote, making Amazon richer and the post office dumber and poorer. So, the treasury-led task force found little appetite for fully privatizing the agency, which could have undermined its current mission to serve rural America. The report concluded the post office should act more like a private beings, including having the authority to charge market-based prices for both mail and package items. Currently, the agency is limited in how quickly it can raise rates.

Drivers for Uber and Lyft will soon get a minimum wage in New York City. On Tuesday, the limitation commission voted on a minimum-pay formula to protect drivers from being underpaid by companies. A minimum wage will be $17.22 an hour.

It's a first for the U.S. ride-hail industry. It could mean rides in New York City will cost more. The move goes into effect in 30 days.

BRIGGS: You would think that would be passed on to the consumer.

ROMANS: I would think so, yes.

BRIGGS: I've heard from Uber drivers that many make a couple bucks an hour at time.

ROMANS: A real complaint there.

BRIGGS: That could be substantial.

OK. EARLY START continues right now with the latest on this court filing from the special counsel.

(MUSIC)

ROMANS: Don't lock him up. Robert Mueller recommends no prison time for Michael Flynn because of substantial help with the special counsel.

BRIGGS: It is a National Day of Mourning. A state funeral this morning for the late President George Herbert Walker Bush.

ROMANS: The stocks take a big tumble. Wall Street realizes the trade war with China is far from over.

(BEGIN VIDEO CLIP)

CORKER: If he was in front of a jury, he would be convicted in 30 minutes.

GRAHAM: There's not a smoking gun, there's a smoking saw.

(END VIDEO CLIP)

BRIGGS: Republican senators furious after a CIA briefing on the Jamal Khashoggi murder. The relationship now with the Saudis under renewed scrutiny.

Good morning and welcome to EARLY START. I'm Dave Briggs.

ROMANS: Good morning. I'm Christine Romans. It is Wednesday, December 5th. It is exactly 5:00 a.m. in the East.

And we begin with special counsel Robert Mueller recommending no jail time for President Trump's former national security adviser Michael Flynn.