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Dow Suffers Another Huge Loss, Plunges 1,000+ Points; White House Faces Questions Over Handling of Rob Porter Abuse Allegations; Leaders Scrambling for Budget Votes as Shutdown Looms. Aired 5-6p ET

Aired February 8, 2018 - 17:00   ET


WOLF BLITZER, CNN HOST: Happening now, breaking news. Wild ride. Another dizzying day on Wall Street with stocks nose diving more than 1,000 points for the second time this week. Has the market finally corrected itself, or will we see more dramatic losses tomorrow?

[17:00:17] Midnight deadline. Congress is scrambling to avert another government shutdown just hours from now. Tonight, one Republican senator is holding up the Senate vote while sources say the House vote may come down to the wire. Will the bipartisan deal hailed by Senate leaders yesterday make it across the finish line?

Abuse coverup? The White House concedes it didn't handle allegations of domestic abuse against a top Trump aide as well as it could have. CNN has learned chief of staff John Kelly knew about it for months. Why is the White House saying he only became fully aware of the allegations yesterday?

And weapons display. As President Trump talks about having a military parade in the United States, North Korea puts on its own display of military might hours before the opening of the Winter Olympics. What message is Kim Jong-un trying to send?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following two major breaking stories, including another huge loss on Wall Street. For the second time this week, the Dow has plunged more than 1,000 points.

Also, the White House is defending itself as it faces a barrage of questions about efforts to protect top Trump aide Rob Porter, accused of abuse by two ex-wives. The White House spokesman just said that White House chief of staff John Kelly only became fully aware, quote, "fully aware" of the allegations against Porter yesterday, although sources tell CNN Kelly had known for months.

We're going to talk to the top Democrat on the House Judiciary Committee, Congressman Jerry Nadler. And our correspondents and specialists, they are also standing by.

We'll get to the growing White House scandal in just a minute. Let's quickly begin with a breaking news on Wall Street. Our business correspondent, Richard Quest, is working the story for us. Richard, another very disturbing day for the Dow.

RICHARD QUEST, CNN BUSINESS CORRESPONDENT: Absolutely. The two largest point falls happened in the same week, Monday and today. So off over 1,000 points, Wolf, a 4 percent drop in the Dow. What it means is that the Dow and the S&P have now fallen more than 10 percent since their recent highs. That, we can pretty much say, defines a correction.

What we don't know, of course, is what happens next. We can draw some strands. We're not totally helpless here. We know the reasons why this is happening. Bond yields edging up towards 3 percent. Worries about inflation. Concerns about debt and deficits, raising up interest rates even more.

So, Wolf, the key message from today, as I think you and I have spoken earlier in the week, this isn't over yet. The market is going to continue to test where it believes true fair value lies, and that's on the downside.

BLITZER: Yes. Two weeks ago, the Dow closed a record high, 26,600. Since then, it's dropping 2,700 points in two weeks alone, closing today at 23,800. Very, very disturbing developments, but we'll watch it closely with you, Richard.

Thanks very, very much.

Also breaking, the White House now admits they could have better handled the controversy over staff secretary Rob Porter, who resigned yesterday after abuse allegations by two ex-wives went public. Our chief White House correspondent Jim Acosta is working the story for us.

Jim, what is the very latest?

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: Wolf, the White House tried to dig itself out of a very big hole today, explaining how outgoing aide Rob Porter was able to serve so close to the president despite having severe problems in his background.

But the White House did something pretty incredible today, a spokesman over here offered a rare admission: that staffers here at the White House could have done a better job handling these questions swirling around Rob Porter.

But at the same time, there are still many questions about what the chief of staff here, John Kelly, knew about the Porter matter and when he knew about it.


ACOSTA (voice-over): Just 24 hours after the White House defended top aide Rob Porter amid allegations of domestic abuse from two ex-wives, a spokesman for the president tried a different response, admitting mistakes were made. (on camera): How can the White House chief of staff, how can the

press secretary, how can this White House still be standing behind him when Mr. Porter appeared to be acknowledging that he had this past?

RAJ SHAH, WHITE HOUSE DEPUTY PRESS SECRETARY: I think -- I think it's fair to say that, you know, we all could have done better over the last few hours or last few days in dealing with this situation.

ACOSTA (voice-over): It was only yesterday when the White House released a statement from chief of staff John Kelly, first praising Porter as a man of true integrity and honor. White House communications director Hope Hicks, who has been romantically involved with Porter, helped draft that supportive statement when the reports of abuse first emerged.

[17:05:05] But CNN was told that was before the release of photos of one of Porter's ex-wives with a black eye. Then late last night, a walk-back from Kelly. In a new statement, Kelly said he "was shocked by the new allegations," that "there is no place for domestic violence in our society," and he believes "every individual deserves the right to defend their reputation," but that he accepted Porter's resignation.

But the problem, sources say, is that Kelly and other White House staffers have known for months that Porter's background check dredged up allegations of abuse from his past. That is raising questions of what did Kelly know, and when did he know it? But the White House wouldn't specify.

SHAH: I think we all became aware of the news reports that emerged on Wednesday morning on some of the graphic images.

UNIDENTIFIED MALE: But did he know any of this back in November?

SHAH: Again, I'm not going to get into the specifics.

ACOSTA: But the White House is not alone in reassessing its past praise of Porter. GOP Senator Orrin Hatch, who once worked with Porter and initially defended him, is dialing back his support, as well.

MANU RAJU, CNN SENIOR CONGRESSIONAL ALLEGATIONS: Do you believe these allegations against him? Do you believe the women?

HATCH: I don't believe them all, but I think there's enough there that you have to take it very seriously.

ACOSTA: Democratic congressman Sean Maloney, who once served as staff secretary under former president Bill Clinton, said the current White House chief of staff has some explaining to do.

SEAN MALONEY (D), FORMER CLINTON WHITE HOUSE STAFF SECRETARY: The staff secretary sees literally everything the president sees, and to have someone in that job for 14 months with no national security clearance is outrageous, and John Kelly owns that, and has some very tough questions to answer. ACOSTA: The top officials in the administration have been seeking

cover from the story, like Vice President Mike Pence, who dodged the question during his trip overseas.

UNIDENTIFIED FEMALE: But can you comment on why you often seem a little bit out of the loop on some of this major news?

MIKE PENCE (R), VICE PRESIDENT OF THE UNITED STATES: You know, it's a great honor to serve as vice president, but we'll leave those White House staffing matters for when we get back to Washington.

ACOSTA: The latest melodrama only adds to the reality TV atmosphere in the West Wing, turmoil still churning despite other recent departures like that of Omarosa, who will now star on CBS's "Big Brother" program.

ROSS MATTHEWS, COMEDIAN: From the outside, can I tell you as a voter, a citizen, I never got it. Why you went to the White House with him?

OMAROSA MANIGAULT-NEWMAN, FORMER WHITE HOUSE AIDE: I felt like it was, like, a call of duty. I felt like I was serving my country, and I'd serve again. Whenever I was accepting a political appointment, it was always about the country. Like, I was haunted by tweets every single day, like, what is he going to tweet next?

SHAH: Omarosa was fired three times on "The Apprentice," and this is the fourth time we let her go. She had limited contact with the president while here. She has no contact now.


ACOSTA: Now, as for whether the White House handled those accusations against Porter appropriately, White House spokesman Raj Shah, who you saw there, said the West Wing took both the allegations and the denials seriously. The White House said the president was saddened by the news about Porter.

But when it came down to the future of White House chief of staff John Kelly; the communications director here, Hope Hicks; and the White House counsel, Don McGahn, their jobs appear to be safe for now. Raj Shah said during the briefing today, Wolf, that the president continues to have confidence in all three of them. But, Wolf, as you probably noticed throughout that briefing, time and again, Raj Shah was pressed on when they became aware of these allegations. He was clinging to this term "fully aware," not really explaining what they knew months ago, when we know through our sources that they did know about these allegations months ago and really did nothing about it -- Wolf.

BLITZER: Very interesting indeed. A significant development.

All right, Jim Acosta at the White House, thank you very much.

Let's get some more on all of this. Joining us now, the top Democrat of the House Judiciary Committee, Congressman Jerry Nadler of New York. Congressman, thanks so much for joining us. REP. JERRY NADLER (D), NEW YORK: It's a pleasure.

BLITZER: I want to get your reaction to our top story. How concerning is it that the White House allowed the staff secretary, Rob Porter, to continue in this position, a very sensitive position, working with the president for more than a year, despite allegations of abuse from two ex-wives, allegations that potentially could have opened him up to blackmail?

NADLER: Well, it's very concerning for exactly the reason you stated: potentially could have opened him up to blackmail. And he has been working all these months without a security clearance. But this just reminds us we have the same problem as Jared Kushner, who is working in the White House in the most sensitive positions without a security clearance.

BLITZER: We're told they have temporary security clearances, but not full permitted security clearances.

NADLER: What that means is they're told to get a temporary clearance without being properly vetted, without the information that you need for a full security clearance. Now, maybe if the is person necessary and key to the president, that might work for a week or two, but not a year.

BLITZER: So why do you think it continued as long as it did?

NADLER: Because I think this White House doesn't really -- they're authoritarian. They want to do what they'll do, and they don't don't really care about security. They don't really care about procedures.

BLITZER: Because it looks like they just -- the whole story, as far as the White House is concerned, exploded and accepted his resignation and demanded, probably, his resignation, only after the photographs of his ex-wife -- there you can see it right there -- emerged.

NADLER: So they don't -- so they don't really care about security. They don't really care about domestic violence. They do it for show. They got caught, and they're trying to minimize the damage now. But they clearly didn't care for a year.

BLITZER: Now, he denies, Rob Porter, the allegations, and we don't know what he said during his FBI interviews, during the questionnaire, the process of getting security clearances. But if he did lie to the FBI on this very sensitive issue, could he be, potentially, under criminal investigation?

NADLER: Well, if he lied to the FBI on any issue, sensitive or not, that's a criminal offense. Yes.

BLITZER: Do you have any indication that the FBI would open up an investigation along those lines?

NADLER: I have no indications.

BLITZER: All right. Let's talk about the Russia probe while I have you. I know you're working very hard. You and other Democratic members of your committee, The House Judiciary Committee, you sent a letter to Bob Goodlatte, the chairman, calling for a immediate hearings on U.S. election security in light of these reports that Russian hackers were able to penetrate voter registration rolls back in 2016 during the presidential election. Tell us more about this.

NADLER: Well, we have known for quite a while, everybody except the president has admitted -- secretary Tillerson, the director of the CIA, Pompeo, the chief cybersecurity person yesterday -- that the Russians attacked our elections. And now we are told that they actually -- we knew that they tried to penetrate 21 election systems in 21 states. Now we're told they succeeded in doing so in six states.

The CIA and others tell us that they're continuing. All our intelligence agencies tell us they're continuing their attacks. And we have to anticipate they're going to -- they're going to try to subvert and attack our next election.

Now, this is of the utmost seriousness, because if this country is about anything, it's about two things: personal liberty, No. 1, and No. 2, self-government. We vote, we choose who our governors are, who our presidents are, who makes the laws for us that we're bound to obey. We govern ourselves.

We can't govern ourselves if our votes aren't secure, if a foreign power can penetrate and change the voting rolls or maybe even change the votes. And we ought to be -- we have seen no evidence that the administration is doing anything to protect us, and, in fact, that's why we asked for hearings on this on an emergency basis from the chairman, and, in fact...

BLITZER: What did he say, the chairman?

NADLER: We haven't gotten a reply yet.

BLITZER: Because only yesterday the head of cyber security over at the Department of Homeland Security, a woman by the name of Jeanette Manfra, she told NBC News, quote, "We saw a targeting of 21 states, and an exceptionally small number of them were actually successfully penetrated."

NADLER: That's right.

BLITZER: So as a result of that, what are they doing?

NADLER: As far as we know, nothing. And the problem seems to be that the president, alone in this administration -- Attorney General Sessions admits the Russians attacked our elections, almost everybody does except the president. He refuses to admit that there was, in fact, an attempt to penetrate the election.

Obviously, we have investigations going on as to whether his campaign -- we know his campaign attempted to collude with the Russians on this. Whether he had anything to do with that, we don't know yet. But we know there was attempt at collusion by his campaign. They participated in meetings. They asked for -- they asked for records, you know, for dirt on Hillary Clinton from the Russian government. They were told the Russian government would supply it.

So we know there was collusion with an attempt to interfere with our election.

BLITZER: Why do you think the president -- why do you think the president is silent?

NADLER: The president is worse than silent. The president actively denies that this occurs. The president, in all things Russian, maybe -- I don't know, maybe they have something on him. He denies that they attempted to affect the election. He refuses to impose the sanctions that Congress mandated that he impose, in punishment for this, and he refuses to lift a finger to...

BLITZER: Because that's an incredibly charge that maybe the Russians have something on the president the United States, and as a result, he's silent.

NADLER: It's not a charge; it's speculation. I don't know that, but you asked why. I don't know why. That's one possibility. There may be others.

But the fact of the matter is that he has denied the obvious, and he's refused to do anything to protect our -- to protect country from a very fundamental threat to our democratic system that everybody, even in his administration, admits is an ongoing threat, but he won't -- he won't lift a finger to protect us, and he refuses to impose sanctions that congressman mandated that he impose. And he never says a nasty thing about Putin either.

BLITZER: Overwhelmingly passed in the House and the Senate, signed into law by the president -- because he didn't want to, but he knew he couldn't override a veto.

NADLER: That's right. Because it had, like 80 or 90 percent of the votes in both houses.

Now, this is all a pattern of not only refusing to criticize the Russians, not only refusing to protect us, not only refusing to admit that they attacked us, but actively trying to sabotage any investigation, attacking all the government agencies -- the FBI, the Department of Justice -- that are in charge of protecting us in instances like this. He's sabotaging our own government.

[17:15:26] BLITZER: I want to ask you an unrelated, a totally different question. You and some of your colleagues just have just written a letter to the attorney general of the United States, Jeff Sessions, about the merger, the pending merger between AT&T and our parent company, Time Warner. You say in this letter that you want documents about the Department of Justice's decision to block the merger. You say you're deeply concerned about reports of interference.

Are you aware, Congressman, of examples of interference by the White House in the decision by the Department of Justice to block this merger?

NADLER: No, we're not aware -- I'm not aware, at any rate, of any specific instances by the White House of attempting to block the merger, but we know the president has publicly criticized CNN all the time. CNN is very much involved in this. And given the president's general attitude toward the press, his attacking the press as an enemy of the people, a nice Stalinist phrase, we wonder, and we're interested in information which could lead to our looking into this, as to whether this is an attempt to intimidate a news outlet like CNN.

Now, it may be perfectly innocent in -- in opposing a large merger, although we haven't seen the administration oppose other large mergers like this. It's sort of uncharacteristic. But it may be an attempt to intimidate the press, and that's what we want to find out.

BLITZER: But so you're concerned this could be a political?

NADLER: Could be. I don't know that it is, but that's why we want the information.

BLITZER: Let us know what you get once you get that information. We'll follow up with you.

Congressman Nadler, thanks so much for joining us.

NADLER: Thank you.

BLITZER: We'll have more breaking news coming up. We're just hours away from yet another potential government shutdown. Can congressional leaders round up the votes they need to pass a bipartisan spending bill and keep the government running?

Plus, Kim Jong-un puts his military might on display while his sister talks diplomacy at the Winter Olympics. What so North Korea's mixed messages really mean?


[17:32:39] BLITZER: More breaking news this hour, a scramble for votes is underway as Congress faces a midnight deadline to pass a bipartisan two-year spending plan or face another government shutdown.

Our congressional correspondent, Sunlen Serfaty, is working the story for us. Sunlen, once again, disagreements over DACA, the DREAMers, that could potentially undo the deal. What's the latest?

SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. Well, a lot needs to get done up here in Capitol Hill in a very short amount of time.

That said, leaders still believe that they are on track to avoid a shutdown before midnight tonight. Here is where this stands procedurally at the moment. They still have not voted on this massive two-year budget bill. As of now, there has not been a vote scheduled, and there has been a hiccup, a procedural hold-up from Senator Rand Paul. He's demanding a vote on another amendment. And as of now, Senate leaders are trying to work that through.

When they do, the Senate will votes. It will likely pass through, and then gets sent over to the House. And that's where these votes will become very, very close.

You have this dynamic that we've been talking about over the last 24 hours, that Republican leaders cannot rely on passing this through with only Republican votes. They know they are going to lose some Republicans over concerns of the deficit.

For that reason, this hinges on the backs of House Democrats. And that's why we've seen in the last hour up here on Capitol Hill, a real flurry of activity among House Democrats.

Right now, at this hour, the House Democratic Caucus, they're meeting behind closed doors, trying to really get a temperature of where the caucus is at this hour, trying to gauge, essentially, how many votes are there, if there are going to be the votes to get this passed through and give Republicans the votes they need.

Of course, a lot of unhappiness about the bill amongst House Democrats that it doesn't address DACA, that there haven't been more insurances from that Republican leadership to address immigration going forward, and that's why we saw Nancy Pelosi come out and say she's not voting for this bill.

That said, she's not actively whipping votes against it. That's important distinction to be made. She's not specifically telling her members to vote no.

Republican leadership in the House, Wolf, they still remain confident that they will be able to get this passed. That said, emphasizing again, a lot needs to happen in a very, very short amount of time before midnight.

BLITZER: Only a hours left. All right, Sunlen. Thank you. Sunlen Serfaty. We'll stay in close touch with you.

Coming up, Kim Jong-un puts on a huge show of force as his sister begins a high-level diplomatic mission to South Korea.

Plus, more on the White House defense of its handling of former top Trump aide, Rob Porter, who abruptly resigned after his ex-wives alleged he assaulted them.


SHAH: You know, I think you've got to take allegations seriously. You've got to take denial seriously, and, again, the statements reflected our experience with Rob Porter.



[17:29:06] BLITZER: We're following multiple breaking stories, including the unanswered questions about the resignation of top White House aide Rob Porter after allegations of domestic assault by two of his ex-wives.

This afternoon, a White House spokesman told reporters, and I'm quoting now, We all could have done better over the last few hours, the last few

days," close quote.

Let's bring in our specialists. And Josh Campbell, you're one of our law enforcement analysts, former -- formally until recently FBI supervisor -- supervisory special agent. You heard the deputy press secretary, Raj Shah, say -- he leaned heavily on the security clearance process to deflect questions of responsibility. Walk us through this process. Why does the FBI dig so deeply into the personal lives of individuals?

JOSH CAMPBELL, CNN LAW ENFORCEMENT ANALYST: Good question, Wolf. First of all, let's start with the question, what is the purpose? The purpose of a security clearance, a background investigation is to determine, does this person's behavior and judgment in the past warrant or at least not preclude access to classified information?

The FBI wants to know if this -- if this person is provided some of the most secret material that we have in the United States government, can they be trusted with that? And the only way to predict whether someone is going to be trustworthy is to look at their past.

WOLF BLITZER, CNN HOST: Because one deep concern in going through top security clearances is that some past behavior could make that potential federal employee vulnerable to blackmail from U.S. enemies or others. Shouldn't John Kelly, a retired U.S. Marine Corps. General, have been very sensitive to that?

CAMPBELL: I think our leaders would be sensitive to that and will remember the FBI is not only looking at your criminal history, but as you mentioned, the idea of susceptibility. If you've done something in your past that is so bad that you don't want to admit it, even to the FBI, your willingness to keep that secret, is a potential gold mine for foreign intelligence service.

BLITZER: You know, Gloria, you heard Shah acknowledged that the White House could have handled this better over the past few hours, the past 24 hours, which would seem to point specifically toward the White House Chief of Staff, John Kelly, who knew about this, we are now told months ago, can he ride this out?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, we've been asking that question all day, Wolf, and I think the answer is, for now, yes. I spoke with a source who's close to the President who says that the President has been told that, you know, you can't fire anybody right now. This is a difficult time for him, and I think that while the President was upset he didn't know about this, I'm not sure -- you know, I'm not sure whether that translates to Kelly, although one would presume it does. He and Kelly have -- you know, had their moments, and kind of a rocky relationship here, and so, you know, you never rule anything out with this President. We all thought he was going to fire Rod Rosenstein, that hasn't happened. So, you know, I would -- I would have to say that this was not handled well, and that falls into General Kelly's lap, but it wouldn't be the first thing that wasn't handled well with this White House.

BLITZER: Yes. The White House acknowledged that was something they don't often -- they don't often do --

BORGER: I'm not -- you'd think the President was happy about that? Yes.

BLITZER: They don't often do acknowledge that maybe mistakes were made. Juana, do you of any reasonable explanation offered at least so far from the White House about why they decided to keep him on as staff secretary despite these allegations?

JUANA SUMMERS, CNN POLITICS SENIOR WRITER: Well, Wolf, we didn't really get that answered today. We heard Raj Shah say that the White House didn't want to comment on how much John Kelly knew and when he knew it. We also heard him say when he was asked about these -- some of the denials that Rob Porter made, you have to take allegations seriously, you've got to take denials seriously.

But the takeaway I had here from listening to what Raj Shah said and the reporting that our team has been doing is the fact that these are people whose first instinct were to protect Rob Porter. You know, you heard even Raj Shah say today that the glowing statements that we heard yesterday came out because this behavior that these allegations that are so horrified didn't reflect their experiences with him, so no answer yet as so why he was allowed to stay despite these allegations. I think that's something we're still trying to figure out why this unacceptable behavior to remain in one of the most senior offices in the White House with access to the President on a daily basis.

BORGER: And we're still trying to figure out all the reporting on this, is exactly what General Kelly knew when. I mean, and you know, how much -- when he first knew about this in the fall, how -- what exactly did he know? Did he just know, you know, about the general stories of abuse? Did -- you know, did he -- you know, how much detail did he -- did he get to --

BLITZER: Whether he knew for a year, which is clear that the FBI was not giving him top secret permanent security clearances.


BORGER: Right. That's right, but Jared doesn't have it either, right?

BLITZER: Well, he knew that, about Jared Kushner.


BLITZER: He knows that as well, and yet, with Jared Kushner, clearly, he's still there, and now -- you know, the --

BORGER: And when did he know that there was a restraining order against Porter?

CHRIS CILLIZZA, CNN POLITICS EDITOR-AT-LARGE: Well, I defer. But it seems to me that he's the Chief of Staff who said, I'm going to focus not on managing Donald Trump, really, I'm going to focus on streamlining communications with him and the staff. I'm the Chief of Staff. I don't understand how, according to our reporting, he knew -- even if he knew a little bit about it, just a little -- hey, just so you know, there's these accusations from his former wives, not wife, wives, that are very similar. I would think that you, protecting the President, protecting the staff, this is someone as Juana noted, don't ignore the titles. Staff said, people -- oh, well, he's probably -- no, this is somebody who's with the President every single day, this is someone who's one of the few gatekeepers to the President. I don't understand why John Kelly would not be curious because it's his job to be curious about how the staff, who are around Donald Trump, what their behavior is.

And one other quick thing, the explanation that Raj Shah gave -- well, and these incidents occurred before he was in the White House. That's not the point. The point is that -- the point is that this is this person's life that has led him to this, but you don't start the clock when they enter the White House to see if they're a good or bad person. Sorry.

[17:35:10] CAMPBELL: No, I'll just point out, Wolf, two quick points. First of all, if you look at the role of my former employer, the FBI, we simply -- the FBI simply collects information, conducts investigation, hands that over to the White House to make the final determination whether or not to grant the security clearance. Secondly, I think this case has shown that if a client agency, in this case, the White House, determines that they're going to grant an interim clearance before the investigation is complete, they're assuming great risks.

BLITZER: Our correspondent MJ Lee is now getting new information, Josh, I want you to weigh in, Rob Porter's ex-wife, Colbie Holderness, confirmed she told the FBI in January of 2017 about when Porter punched her. She shared with the FBI the photos. This was during the clearance interview, and once you apply for a job, a national security-related job, the FBI goes and interviews relatives, friends. And during this interview, MJ Lee is now reporting that she told -- this is one of the ex-wives, she told the FBI, he punched her and shared the photograph.

CAMPBELL: And that would be part of the packet of information that would be sent over to the White House, so what did the FBI find in the course of the investigation? And then, secondly, the SF86, the form that the applicant actually fills out regarding their own history, that would be something that we would then turn over to that client agency and say, this is what the FBI found, it's up to you to determine whether this person is suitable for access to classified information.

BORGER: So you make no recommendations?

CAMPBELL: Correct. The FBI would make no recommendation, they simply provide the information.

BORGER: So, who would decide? The White House counsel would decide?

CAMPBELL: I don't -- I don't know who in the White House, but them being the client agency, it would be the White House that make that determination.

BLITZER: At that time, the White House Chief of Staff was Reince Priebus, it wasn't John Kelly when Rob Porter's ex-wife Colbie Holderness confirmed that she had told the FBI about the beating and also about the photographs.

CILLIZZA: So, that's January 2017. We're in February 2018, and I'll remind people on the timeline, Tuesday night, which was not 48 hours ago, John Kelly was issuing a statement that Hope Hicks, according to our reporting, who is romantically linked to Rob Porter, was helping to craft, in and of itself, to me, is mindboggling, but was issuing a statement that was a -- as wholesome a defense of Rob Porter which you could find, which is, I know him, that this is not true. Now, did they walk that back? Sure. Raj said it seemed to indicate that the photo had something to do with that, but the point is, I mean, this January to Tuesday night. This is not --

BLITZER: How quickly would that information that the FBI gathered from the ex-wife about the photograph and the beating, January of last year be forwarded to someone at the White House, and who is that someone who normally would get that kind of sensitive information?

CAMPBELL: Well, that's a good question. I don't know if there's a particular timeline on any given case. I think that you will look at information and determine if this is something as egregious as we've seen with the photos, that is something you want to share it quickly, but, again, it depends on how long it would take the investigation. Was it already completed at that time and then handed over or was there additional information that was awarded in this 130-page document that the applicant would have filled out?

BLITZER: I'm told Don McGahn, the White House counsel, normally would get that kind of information, be the liaison with the FBI. Everybody, standby, there's more breaking news we're following, lots of it. We'll be right back.


BLITZER: We're back with our specialists. You know, Juana, the whole question of Hope Hicks, 29-year-old White House Communications Director, her role in this scandal right now. Talk a little bit about that. How much trouble is she in because there are other issues plaguing her at the same time?

SUMMERS: Absolutely. The fact of the matter is we don't know quite yet. She's the Communications Director that we don't see or hear a lot of, but she plays a very influential role within the Trump White House. She's a long-time aide. And right now, for someone tends to be a little under the radar, she's embroiled into one the biggest things doggedness administration. She is -- we've reported has been in a romantic relationship with Rob Porter and she's also embroiled in some of the Russian investigation scandal as well.

One of the big things that we have learned today Raj Shah, the White House spokesman, is that Hope Hicks, who we know from our previous reporting, had you know, some role in drafting those initial glowing statements that were supportive of Rob Porter. She has rescued herself from some of these activities. We don't know to what extent she was involved and what she is now stepping away from, but I think, as we're asking, as Gloria noted, what John Kelly knew and what he didn't knew when, Hope Hicks is one of the most senior people in this White House as well. What did she know about this man who's not only her co-worker but a romantic partner, too. And if she did know about these allegations, these accusations from his ex-spouses, did she come forward and say anything to anyone?

BLITZER: And, you know, John Kelly, this isn't the only issue that's plaguing him right now, it comes on the heels of several blunders.

CILLIZZA: Well, let's remember, I mean, a week feels like a month in the Trump administration. But earlier this week, he was -- he came out in which he was saying that people who didn't sign up for DACA were lazy, at least some of them were lazy, some of them may have been scared but they may have been lazy. She reiterated again -- I think John Kelly came in at a time in which the White House was so chaotic and Trump had clearly lost faith with Reince Priebus that he was cast as, OK, this is a military guy, there are a lot of rave reviews with him in the military, and I think we glossed over and sort of the narrative of him, glossed over in some ways of his ideological viewpoint.

[17:45:01] He was chosen to be the head of the Department of Homeland Security which oversees immigration for a reason by Donald Trump. If there was any issue that associates with Donald Trump during the campaign, we're going to build a wall, and we got to enforce our borders. He was then chosen as Chief of Staff. Again, these are not things that Donald Trump did willy-nilly. He did it, I think, because he saw -- well, he likes military men, we know that -- but he saw a common partner ideologically at least as it relates to the immigration issue. So, I think John Kelly benefitted from the fact that he was cast as a military guy, going to restore order, but there's a much broader picture of him that this week has helped filled in.

BORGER: You know, in the picture we're getting as we do all our reporting about this is that Rob Porter was a very important person inside this White House. Rob Porter was the President's shadow. He was -- he had John Kelly's back. He was very important to Kelly as Kelly was trying to organize this White House and organize the President in many ways. The President liked Porter, and trusted him, and I think that, you know, maybe if Kelly looks back on this one day, he will take a look at himself and say, you know, I was too willing to believe him because we all liked him and we all thought he was a great guy, and I think the lesson in life that you take away from this in many ways is that these men can be great colleagues and go home and hit their wives.

CILLIZZA: That's the Orrin Hatch -- the Orrin Hatch who you -- Porter was Chief of Staff Orrin Hatch prior to his work in the White House. His -- he put out two statements. The first one was similar to the Kelly statement in that it was hugely praiseworthy, but even -- it's the shock and surprise that someone acts differently at work than they do at home. It's like, well, yes. I mean, that is -- that is something we know about people, particularly domestic abusers, they don't go around taking a swing at everyone in the office. This is sometimes a behavior that is very isolated. So, while I understand that, you only know what you interact with on a day-to-day basis, you can never, to Gloria's point, assume that that's the whole picture of a person.

BLITZER: You know, Josh, I want to get your sense, because you recently left the FBI, you're now our CNN Law Enforcement Analyst, that Rob Porter potentially could have more problems if -- and we don't know if he did -- if he lied to the FBI during the course of interviews for this background check, or in the form of questionnaire, and I've gone through the standard questionnaire for national security positions, if he lied at all to the FBI, even if you're not under oath, that's a crime, and potentially if the FBI now concludes, yes, he did lie, especially now that we know that a year ago, plus, they got a photograph of the ex-wife badly abused, he could face some serious charges.

CAMPBELL: It's a good point. It's a good point. Though, remember that we're not just talking politics here. There is illegal --

BLITZER: Josh, I'm going to interrupt for a moment. Mitch McConnell, the Majority Leader, is on the floor talking about the potential shutdown. I want to quickly listen.

SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: -- agreement before us funds our troops at the level requested by the Pentagon, addresses the opioid crisis, which is extremely big in the State of Kentucky and around the country, funds our veterans, and many other shared priorities. The Speaker of the House supports the bill, is waiting for it to pass the Senate. The President of the United States supports the bill, and is waiting to sign it into law. I understand my friend and colleague from Kentucky does not join the President in supporting the bill, and it's his right, of course, to vote against the bill, but I would argue that it's time to vote.

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: If I might and I very much appreciate my good friend, the Junior Senator from Kentucky, his fidelity to spending, something we don't agree with, his fidelity to trying to get his amendments on the floor debated, something we do agree with, and we -- I recently supported that right when the FISA bill came up, which I know was very important to him. The difficulty we have here is that the government will shut down, we still have the House that has to vote, and, frankly, there are lots of amendments on my side, and it's hard to make an argument that if one person gets an amendment, that everybody else will want an amendment, and then we'll be here for a very long time, so I would plead with my colleague, given the exigencies that it may be a budget point of order, which would make the same point, that is he believes the spending is too high, might work, and we could move forward and get a bill done and not risk a government shutdown. We're in risky territory here, as the -- my both friends from Kentucky know. [17:50:15] So, if that would be -- that would accomplish the same

thing, not hold us up here, let the House do its will and then maybe get the bill to the President because we would want to move things forward. And I yield the floor.

MCCONNELL: I'm going to propose a unanimous consent that would give the Senator from Kentucky an opportunity to make a budget point of order, which would give him a vote on the substance of the matter he's concerned about. Therefore, I ask unanimous consent that notwithstanding rule 22 at 6:00 p.m. today the Senate vote on the motion to invoke cloture on the motion to concur in the House amendment to the Senate amendment to H.R. 1892 with a further amendment. Further, that if cloture is invoked, all post-cloture time be yielded back and Senator Paul be recognized to make a budget point of order that the Majority Leader or his designee be recognized to make a motion to waive and that following the disposition of the motion to waive the Senate vote on the motion to concur with further amendment with no intervening action or debate.

UNIDENTIFIED FEMALE: Is there objection?

SEN. RAND PAUL (R), KENTUCKY: Madam President.

UNIDENTIFIED FEMALE: Senator from Kentucky?

PAUL: Reserving the right to object, I ran for office because I was very critical of President Obama's trillion-dollar deficits. Now, we have Republicans hand in hand with Democrats offering us trillion- dollar deficits. I can't, in all good honesty and all good faith, just look the other way because my party is now complicit in the deficits. But really, who's to blame? Both parties. We have a 700- page bill that no one has read that was printed at midnight. No one will read this bill, nothing will be reformed, the waste will continue.

And government will keep taking your money, irresponsibly and adding to a $20-trillion debt. There are no amendments being allowed. This is the most important debate we will have in the year over spending, and no amendments are allowed. We should have a full amendment process. We've been open for business 10 hours today. You can do four amendments an hour, we could have done 40 amendments. So, it's a canard to say we can't have one amendment and can't spend 15 minutes debating whether or not it's good for the country to add a trillion dollars in debt. So, Madam President, I object.

UNIDENTIFIED FEMALE: Objection is heard.

BLITZER: All right. So, there you have it. Senator Rand Paul, the Junior Senator from Kentucky, complicating matters as far as the Majority Leader is concerned, the Minority Leader is concerned. There is going to be a delay in the final vote in the U.S. Senate on this compromise, this bipartisan two-year spending bill. Chris Cillizza, not surprising the position Rand Paul has taken, but he clearly is angry because of the spending that's going to go forward.

CILLIZZA: Here's the thing, he's not wrong. I mean, his point is well made. You have a 700-page bill on which there will be no amendments that is two years of funding. Now, the reason that people want to push it through is because there's a bunch of defense spending, there's a bunch of domestic spending that both parties want. But he's not wrong. The issue is timing. And you heard Chuck Schumer say that. Look, I don't disagree with you, Senator Paul, but the government is going to close in six hours and we need to do something about it. I'm interested to -- most Senators, I would say, well, he'll give in. I don't -- I don't know. And the longer he waits, remember, the logistics process of this, it's hard to get it --

BORGER: Well, but --

BLITZER: Hold on one second. Phil Mattingly, our congressional correspondent, is up On Capitol Hill. Phil, what happens now?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, let me just kind of lay out the back story about what's actually happening. Senator Rand Paul obviously has made very clear, he wants an amendment vote, he wants a vote that would allow the budget caps to be maintained. That is something -- the reason why you saw Senate Majority Leader Mitch McConnell and Senate Democratic Leader Chuck Schumer on the floor together was because Senator Schumer wanted to make clear we have folks who want amendments, too. You can't open this up for just a single amendment. Because of that, there will be no opening up of the deal. Now, here's what that actually means. Senator Rand Paul, if he chooses to, can push this beyond the midnight deadline. If that's his desire -- if that's what he wants to do --

BLITZER: All right. Hold on a second, Phil. Rand Paul speaking once again. Let's listen.

PAUL: This is in addition to what we were already running debt of, of nearly a trillion dollars. So, we're adding a couple hundred extra billion dollars a year to a budget and a country and a Congress that had already recklessly let spending get out of control. The bill is nearly 700 pages. It was given to us at midnight last night, and I would venture to say no one has read the bill. No one can thoroughly digest a 700-page bill overnight, and I do think that it does things that we really, really ought to talk about and how we should pay for them.

One of the things this bill does is it's going to add $500 billion in spending over a two-year period. This bill increases spending 21 percent. Does that sound like a large amount? Anyone at home getting a bonus or increase in your pay check of 21 percent? And yet your government's going to spend 21 percent more without really having a full debate, without having amendments. The exchange you just watched was me asking to have a 15-minute vote. I've been asking all day. I've been asking all week for it. We could have literally had dozens of votes today, but we squabble because people don't want to be put on the spot.

So, the reason I'm here tonight, is to put people on the spot. I want people to feel uncomfortable. I want them to have to answer people at home who said, how come you were against President Obama's deficits and then, how come you're for Republican deficits? Isn't that the very definition of intellectual dishonesty? If you were against President Obama's deficits and now, you're for the Republican deficits, isn't that the very definition of hypocrisy?

People need to be made aware. Your Senators need to answer a few from when they need to answer this debate. We should have a full-throated debate. My amendment says this simply. We should obey the budget caps. What are budget caps? These are limits we placed on spending, both military and non-military. We placed them in 2011, and guess what? For a year or two government actually shrunk. But now, government's taking off and this new stimulus of deficit spending will be as big as President Obama's stimulus.

Don't you remember when Republicans howled to high heaven that President Obama was spending us into the gutter, spending us into oblivion, and now Republicans are doing the same thing? And so I ask the question, whose fault is it, Republicans? Yes. Whose fault is it, Democrats? Yes, it's both parties' fault. You realize that this is the secret of Washington. The dirty little secret is the Republicans are loudly clamouring for more military spending but they can't get it unless they give the Democrats welfare spending. So, they raise all the spending. It's a compromise in the wrong direction. We should be compromising in the direction of going toward spending only what comes in. And yet this goes on and on and on. You will hear people say, well, the military is hollowed out. We have not enough money for our military. And yet, we doubled the amount of money we spend on the military since 9/11, 2001.

Look, I have family members in the military. I have retired members of the military in my family and I care very deeply about our soldiers. In fact, you know what I would do? I'd bring them all home from Afghanistan. The war is won. People talk about making a parade. Declare victory in Afghanistan, bring them home and have a parade and give them all a raise. And yet, we go on and on and on finding new wars to fight that make no sense where we have no idea who the good guys are and who the bad guys are that are so murky that halfway through the war we sometimes change sides or the people we support change sides.

So, we're at war in Afghanistan after 16 years. Costs $50 billion a year. So, they need more money for the military because we're in too many places for too long. We have no exact mission of why we're there and it is not a militarily winnable situation in Afghanistan. There will never be a victory in Afghanistan. There may be a negotiated settlement and they may flee when we come, but as soon as we leave, they come back. Are we to be there forever?

For the umpteenth time, Congress is going to exceed their budget caps. We had something passed back in 2010. It was called "PAYGO." It was supposed to say if you're going to pay new money, you had to go find an offset somewhere else. You can only pay as you go. It was sort of like a family would think about it. If you've got to spend some more money, you've got to raise your income or you've got to save some money. You know how many times we've evaded it since 2010? 30-some odd times. When I try to get them to pay attention to their own rules, like three or four people will vote to pay attention to the rules. We are in a terrible state as a country. $20 trillion in debt is bigger than our entire economy. You wonder why the stock market is jittery? Well, one of the reasons is we do not have the capacity to continue to fund a government like this. We've been funding it with phony interest rates that are concocted and given to us by the Federal Reserve but they aren't real.