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Dow's Worst Week Since Trump Took Office; Impact of Release of Nunes Memo on FBI; White House Responds on Allowing Release of Nunes Memo; Democrats React to Release of Nunes Memo. Aired 2:30-3p ET

Aired February 2, 2018 - 14:30   ET

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


[14:30:00] WOLF BLITZER, CNN HOST: Let's go to CNN's Alison Kosik, in New York for us.

Alison, what's behind this? It looks like it will be the worst week for the Dow since the president took office.

ALISON KOSIK, CNN CORRESPONDENT: It looks like the Dow is on track to have its worst point loss since June of 2016, when we saw the Dow drop about 600 points when Brexit was happening. You are kind of seeing a continuation of what began earlier this week. We saw these jitters begin Monday, Tuesday. We saw between the two days the Dow drop 500 points. It has recovered a bit. Now you're seeing the Dow down 548 points because those jitters have been amplified with the jobs report that came out this morning. The January jobs report came out good, 200,000 jobs were created in the month of January, unemployment holding steady.

What has got Wall Street in the tizzy is the fact that wages, wage growth jumped the most since the recession, 2.9 percent. That was a jump from 2.5 percent. That is making investors worry about inflationary pressures. If you've got a lot of inflation in the economy, the worry, according to Wall Street, is that you're going to see the Fed try to control that inflation by raising interest rates much faster and at a quicker pace than they promised in the past, to try to get control of that inflation. And that's what Wall Street is worried about. If you start raising rates faster, it becomes more expensive to borrow money, and eventually you see people pulling back on how much they're going to be spending. That, in turn, affects companies that are listed on the stock market exchanges -- Wolf?

BLITZER: Worst day for the markets since President Trump took office. We'll stay on top of that.

Alison, thank you very much.

More on breaking news, the release of this very controversial Republican majority memo from the House Intelligence Committee, alleging all sorts of wrongdoing on the part of the FBI and Justice Department officials as well as the FISA, Foreign Intelligence Surveillance Court.

Let's bring in to discuss, Ana Navarro, joining us, and she's our CNN political commentator, our CNN legal commentator, Ken Cuccinelli, a former attorney general for the Commonwealth of Virginia, and Tim Weiner, who wrote the book, "Enemies: History of the FBI."

Tim, let me start with you.

What's going to be the impact for the FBI as the FBI.

TIM WEINER, AUTHOR: Rank-and-file are full square behind Chris Wray. They must live in fear that the president is going to use this memo as a weapon to decapitate the leadership of the FBI and the Justice Department. If so, we're one tweet away from a constitutional crisis.

BLITZER: Talk a little about what you mean. Is he going to fire Christopher Wray, fire others, fire the deputy attorney general, Rod Rosenstein? What's your suggestion?

REINER: It's in his power to do that. That's the only way he gets to Mueller. If he finds a stooge in the Justice Department to take the post of deputy attorney general, that is the only person who can fire Mueller. If he does that, we have a constitutional crisis unlike any we've seen since the Saturday Night Massacre of 1973.

BLITZER: The Watergate crisis, as a lot of us, of course, remember.

Ken Cuccinelli, go ahead and respond. What do you think of those fears?

KEN CUCCINELLI, CNN LEGAL COMMENTATOR: Well, I just don't see them in the memo. I think this memo points up most critically that Andrew McCabe testified that without the dossier, the questionable dossier, they would not have gotten the initial FISA warrant. That's the bottom line, I think, in this memo in terms of real-world impacts looking backwards. And the memo says that the FBI relied on Steele's previous reputation with them, despite the fact that the FBI didn't have some information or didn't use it in September, the month before they got the FISA warrant, when Steele was clearly, in the view of this memo, discredited it and shouldn't have been relied upon. And, again, McCabe's testimony in December does indicate that that factor would have been critical to them not pursuing the warrant in the FISC in the first place.

BLITZER: Ken, the Democrats on the House Intelligence Committee, they're disputing that. They're saying, if you take a look at the transcript of what Andrew McCabe told the House Intelligence Committee -- they would like the transcript to be released -- they're suggesting that the Republican majority are cherry picking, they're not putting it in context, there was other information beyond the Steele dossier, which resulted in the FISA courts going forward with these warrants. I assume you want to see all of the background information, not just the Republican majority version.

CUCCINELLI: Right. Yes. Yes.

(CROSSTALK)

[14:35:00] CUCCINELLI: Yes, you are absolutely right about that. Look, I've litigated in the FISC. And I know the level of secrecy there is quite extraordinary. I think this is an opportunity for America and its policymakers to step back and decide, does this operate the way we think it should? And, if not, what should we do to reign it in? I think this is a real opportunity to really bring our surveillance of Americans under the scrutiny of policymakers in a way that begins to further protect our constitutional rights.

BLITZER: Ana, let's bring you in.

What did you think when you read the memo? You've gotten some of the reaction. What's your analysis?

ANA NAVARRO, CNN POLITICAL COMMENTATOR: I think it's disgusting. I think it's pathetic. I wish I was shocked to see how low my party shall the Republican Party, the used to be law enforcement party has gone. I align myself with the words of Senator John McCain that thinks this is an attack that only helps Vladimir Putin. I am thankful for voices like John McCain in the Republican Party that are letting the FBI know we stand with them, not with the Russian president. This is a fabricated, manufactured, hack, partisan sideshow, circus act in order to discredit the FBI, to discredit the leaders at the FBI and get to Mueller. And I am beyond disappointed with Republicans who choose to be complicitly silent while this goes on. First it was Comey. Then it was McCabe. Next, it's going to be Wray, then Mueller. What are Republicans doing? How could they possibly be staying silent when they know -- when they know that Russia interfered in our elections? I am beyond disappointed.

BLITZER: Let me have Ken respond to that.

Go ahead.

CUCCINELLI: I think one of the points counter to what you just heard from Ana, and I don't doubt her passion, but is that it was McCabe. I agree with you, Wolf, It would be nice to see more of the transcript. But it was McCabe who said that the dossier was critical. He is not someone who would line up as someone who would be feeding ammunition into some sort of Mueller attack as you've heard described here. That's part of the value of his role in this analysis, is that it does provide some objectivity. It does provide a perspective.

And, remember, this is in a court that we get almost no oversight over. And they approve almost every single request that comes through the FBI and national security apparatus. It's something like 99.5 percent. It's a huge proportion of approval. So, when the system is used this way -- Ana is totally wrong that it isn't appropriate to question this and to see if we ought to change how this operates. Let me cast it forward a little bit, Wolf. In 2020, do the Democrats now in Congress want the Trump administration, during the next presidential election, to be able to do this under their umbrella without anybody being able to see it, and without serious filtering by the judges on the FISC? I doubt they do.

BLITZER: I want to bring Tim --

(CROSSTALK)

BLITZER: Go ahead and respond. NAVARRO: Let me just say if this was an objective effort we would be

seeing the Democrat side. If this was an objective effort we would be seeing the underlying evidence. If this was an objective effort, they would have listened to the FBI's request, who called this a reckless disregard for the FBI and classified information. This is a partisan issue and it is trying to cover for Donald Trump and, frankly -- let me just say something else. If Democrats have been doing this, if this was happening under a Democrat president, law and order Republicans would be setting their hair on fire today.

BLITZER: Let me bring Tim back into this conversation.

Tim, you studied the FBI. You reported on the FBI, law enforcement and the intelligence community for a long time. You're fearful there could be a constitutional crisis right now. How does the president of the United States stop that from unfolding?

WEINER: He will create it. He won't stop it. He will create a crisis. If he takes this memo, uses it as a sword to cut off the heads of Chris Wray and Rod Rosenstein on accepting this conspiracy theory put forth in this memo that Wray, Rosenstein, Jim Comey sat down in the room and said I going to a good idea. Let's defraud a federal judge in order to destroy Donald Trump. That's nuts.

Yet the president takes it, uses it as a weapon to take out the people who are investigating his White House, that is not only obstruction of justice to add on what he has already done, it puts the White House at loggerheads with the law enforcement community of this nation.

[14:40:22] CUCCINELLI: Wolf?

(CROSSTALK)

BLITZER: Hold on one second. Let me give Tim one more question.

(CROSSTALK)

BLITZER: Tim, you see that unfolding?

WEINER: We may see the second saturday night massacre tomorrow if the president decides hey, McCabe's against me. He was already gone. Comey was against me. I got rid of him. I can do that to Wray and Rosenstein and find somebody who can take out Mueller. Then I'll be great. He is capable of doing that.

Ken Cuccinelli, how does Rod Rosenstein stay as attorney deputy general after the president clearly hit him, big time, today? He was asked, do you have confidence in Rosenstein, and he said -- the exact words were, "You figure that out." That's quite a vote of no confidence.

CUCCINELLI: Well -- well, true. We had the same conversion about Jeff Sessions in the April/May timeframe if you remember last year, and Jeff Sessions is still there as well. The bigger problem that may move Rosenstein out of this Mueller situation is if Mueller himself goes to Rosenstein as a witness, and then the authority over the investigation will move to the associate attorney general from Rosenstein. So Mueller actually is the one who, oddly enough, has the greatest control at the moment as a real-life matter -- not the conspiracy theories you just heard spun -- of the real-life matter as to whether or not Rosenstein stays in charge of this effort all the way through to the end.

BLITZER: Everybody, stand by.

There's more reaction coming in, including a statement now that we're just getting in from the White House.

Our special coverage continues right after this.

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[14:46:37] ANNOUNCER: This is CNN breaking news.

BLITZER: Quickly want to get to the breaking news. There's reaction coming in from the White House.

Let's go to our senior White House correspondent, Jeff Zeleny.

A new statement on this Republican memo just released by the House Intelligence Committee. Tell us what the White House is saying.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESWPONDENT: Wolf, there is, indeed. The president left the White House a short time ago. He did not answer our questions about his decision or the deputy attorney general, which he left that question hanging.

The White House press secretary, Sarah Sanders, has released a statement, giving more of a window into the president's rationale for releasing this. Let's look at part of that statement, Wolf. It says, "This decision was made with input from the president's national security team, including law enforcement officials and members of the intelligence community, for whom the president has great respect. He is especially grateful to the hardworking rank-and-file public servants, again, rank-and-file public servants who work every day to keep America safe and uphold our laws and protect the rights of Americans."

She goes on to acknowledge that there is word of a minority report here from the Democrats on this committee, which has not yet been released, which may give a fuller picture.

But she does not answer the central question here, Wolf, what is the fate of the deputy attorney general, Rod Rosenstein. We saw the president in the Oval Office a couple of hours ago, and he said, "You figure that out," when asked about the fate of the deputy attorney general.

The reason that's center here, of course, Wolf, is that he supervises special counsel's investigation, Robert Mueller's investigation here. So still no word on what he believes is the fate of Rod Rosenstein, even as the White House explains some rationale behind the president's decision to declassify this memo -- Wolf? BLITZER: From Virginia, the president heads back to Florida to Mar-a-

Lago and Palm Beach for the weekend. Right?

ZELENY: He does, indeed. He's visiting a Border Patrol center in Sterling, Virginia. He will be there a couple of hours or so and then will fly down to Mar-a-Lago for the rest of the weekend. Unclear if we will hear from him again.

Certainly, this hangs over the White House and, indeed, the Justice Department and the FBI, in fact, all of Washington, what the president's plans are for the deputy attorney general. And indeed, the FBI director. Those questions simply not answered here, Wolf. There is no White House briefing today. So at this point, we are going into a weekend here with unusual confrontation between these separate agencies here and the White House -- Wolf?

BLITZER: We'll see if Rod Rosenstein, deputy attorney general, stays or goes. You can clearly see on his face, the president, that deep irritation with the deputy attorney general when he was asked, do you have confidence in him, he said, "You figure that one out."

Stand by.

I want to go to Capitol Hill right now. Democrats are reacting as well.

Manu Raju is joining us right now.

The Democrats reacting and saying this Republican majority report is distorted.

MANU RAJU, CNN SENIOR CONGRESSIOINAL CORRESPONDENT: That's right. In fact, I just got off a conference call with Adam Schiff, ranking Democrat on the House Intelligence Committee, who laid out a number of concerns with some of the allegations in this memo.

I'll tick through some of them. One of the big allegations in the Republican memo is what the deputy director of the FBI, Andrew McCabe, told the House Intelligence Committee in December. In the Republican memo, it alleges that McCabe said that no surveillance warrant of Carter Page would have been sought from that secret court without the Steele dossier information. When Schiff was just asked that, he said the statement does not represent fully what McCabe told the House Intelligence Committee. He also said that the panel was told by Andrew McCabe that the, quote, "Genesis of the investigation into Russia did not begin with the dossier."

In addition to that, Wolf, Schiff also said it's, quote, "Not accurate," that the court was not aware of that former British Agent Christopher Steele's potential political motivations. In fact, he said the court was aware that there were, quote, "likely political motivations for Christopher Steele." The Republicans criticized that memo by saying it did not lay out Fusion GPS' role, that office and research firm that funded Christopher Steele's dossier work was, in fact, funded by the Clinton campaign and DNC. He said it's not uncommon for FISA applications to name individual sources of information but said they were well aware he may have had political motivations.

And he also criticized how the memo, the Republican memo, talked about Peter Strzok, that FBI agent, who has been under a lot of scrutiny when those text messages of his were revealed. He actually led and initiated that counterintelligence investigation into Trump and Russia in July 2016. Schiff said that's just not right. There were a team of investigators involved in this, and somehow to suggest it was Peter Strzok and his political motivations are behind this investigation, Schiff said that's not accurate.

He largely criticized the memo's suggestion that there was a troubling breakdown in the legal process. According to Schiff, Wolf, he said that's a grand and sweeping statement of a single court FISA application had and does not apply the full process here. He said it's really inaccurate on several fronts, according to Schiff. That's his take -- Wolf?

[14:52:10] BLITZER: Did you get any word from Schiff when the Democratic rebuttal would be released?

RAJU: We don't know that yet, Wolf. The full House has action toes read it in a classified setting. Whether the House Intelligence Committee then votes to send it to the president who, of course, would have five days to object or allow for its release. We don't know if the president is going to do that, when the House Intelligence Committee will have a vote. That's up to Devin Nunes to ask for that vote. No word from his office yet about when that would happen -- Wolf?

BLITZER: All right, thanks very much.

In the White House statement from the White House press secretary, Sarah Sanders, she says, "Minority members of the committee have reportedly drafted a separate memorandum. The administration stands ready to work with Congress to accommodate oversight requests consistent with applicable standards, including the need to protect intelligence methods."

LAURA COATES, CNN LEGAL ANALYST: We'll see if that ever sees the light of day. Manu said the full House has to look at it. It's got to be voted out of this committee. Obviously, Republicans control that committee. And then the president, would he actually want this to be out there in the public if it contradicts this memo, which he very much wanted out because it supports this idea that folks are out to get him. So we'll see if that memo from Democrats ever sees the light of day.

BLITZER: Do you think it will?

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: I don't know but I think they're going to drag this out as long as they can. We're spending a lot of time talking about this three-and-a-half-page memo and not the actual Russia investigation. My sense is that they'll drag this out as long as possible. There will be another media storm around what is or isn't in that memo and we'll not talk about the core issue of Russia's attack on our country as we inch closer to 2018, as Vladimir Putin goes through another election in a couple of weeks, and nothing has changed.

BLITZER: What's happens, a big chunk of the country right now, Bob, believes that there's a deep state threat to the president, this whole Russia investigation is simply a hoax. That's what the president has told them.

BOB BAER, CNN SECURITY & INTELLIGENCE ANALYST: And also, it's a distraction. Pompeo, the CIA director, has come out and said the Russians are going to be in the electrics in 2018, in 2020, and this president has done nothing about it. He has done nothing to counter it. He hasn't even applied new sanctions on Russia, so the Russians have -- it's an open field for them.

BLITZER: Where do you see this going next from a legal point of view, Kim?

KIM WEHLE, FORMER ASSISTANT U.S. ATTORNEY: It's important for viewers to understand what's at stake here. That has to do with fairness within our judicial system and within our justice system. That is, we want prosecutors to make decisions based on the law and the facts. You know, you're waiting in line for a busy restaurant. You want to be seated when you're next in line. Likewise, you don't want people picking and choosing who they go after based on whether the political people in power are going to disfavor you or blow you up publicly and challenge your integrity.

We have to remember, what does the FBI do? Counterterrorism, foreign espionage, cybercrime, violent crime, white collar crime. As Americans, we want to have a safe country. We want this stuff done. But if career public servants are now worried about the political implications of the exercise of their discretion this, to me, is a straight up, we made a judgment call as professionals, and to second guess this and claim that, somehow, it's distortion and illegal is really, really a scam, I think, on the American public. That's my concern.

And as far as Mr. Rosenstein being fired, as I said, I think that that is full-blown constitutional crisis. We should all hope that does not happen because, in my mind, the career public servants right now are the linchpin of the survival in our democracy.

[14:55:52] BLITZER: I wonder if he's not going to be fired necessarily, but resigns in protest, which he clearly could do.

Everybody, stand by.

CNN's special coverage of this important day here in the United States continues right after this.

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