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THE SITUATION ROOM

Trump Praises Labor Secretary Alex Acosta But Says He'll Look At Epstein Plea Deal; Interview With Rep. John Garamendi (D-CA) On Calls For Acosta Resignation; House Judiciary Committee Moves To Subpoena Trump Officials On Immigration And Potential Obstruction Of Justice; Sen. Amy Klobuchar (D-MN), Presidential Candidate, Is Interviewed On Calls For Acosta Resignation; Trump On Acosta: He's Been "Really Great" But Will Look "Closely" At His Role In Epstein Plea Deal; Federal Judge Says DOJ Can't Switch Legal Team In Census Citizenship Question Case; Freed Australian Denies North Korean Claims Of Spying, Avoids Fatal Outcome Of Otto Warmbier. Aired 5-6p ET

Aired July 9, 2019 - 17:00   ET

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


[17:00:00]

JAKE TAPPER, CNN HOST: Rest in peace, Ross Perot.

You can follow me on Facebook and Twitter @JakeTapper. You can tweet the show @TheLeadCNN. Our coverage on CNN continues right now. Thanks so much for watching.

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WOLF BLITZER, CNN HOST (voice-over): Happening now, standing by him: President Trump defends Labor Secretary Alex Acosta, who's under fire for overseeing a secret plea deal as a U.S. attorney a decade ago. That deal gave multi-millionaire Jeffrey Epstein a lenient sentence for sex charges with Epstein now facing new charges and that is continuing.

And Joe Biden is the latest top Democrat to demand that Acosta resign.

Health care hearing: an appeals court wraps up a major hearing on the future of Obamacare. Two out of three judges raise serious doubts about the very foundation of the law.

Could their ultimate decision cause millions of Americans to lose health care coverage?

Subpoena dump: the House Judiciary Committee is about to raise the stakes for a number of current and former Trump aides, preparing to issue subpoenas to presidential son-in-law Jared Kushner and former attorney general Jeff Sessions and others.

Will they comply?

And unleashing on the U.K.: President Trump attacks Britain's ambassador to the United States, calling him "a very stupid guy," after leaked diplomatic communiques revealed critical remarks by the ambassador. And now Britain's foreign secretary jumps in, calling the president's attacks unacceptable and wrong.

I'm Wolf Blitzer and you're in THE SITUATION ROOM.

UNIDENTIFIED MALE (voice-over): This is CNN breaking news.

BLITZER: Breaking news: a federal appeals court wraps up a hearing on a Trump administration-backed challenge to Obamacare and two of the three judges suggest they may favor striking down the entire health care law. That could be millions of Americans who could lose coverage.

Also tonight, President Trump is defending Labor Secretary Alex Acosta who's facing the demands that he step down. Acosta was a U.S. attorney a decade ago when he cut a secret plea deal for multi- millionaire Jeffrey Epstein, who faced sex charges.

And now with Epstein facing new charges for allegedly running a sex trafficking network and abusing underage girls, presidential candidate Joe Biden is the latest to demand that Acosta resign.

President Trump says Acosta is doing a great and fantastic job but said the matter must be looked at closely. I'll speak with Democratic presidential candidate Senator Amy Klobuchar and Congressman John Garamendi. And our correspondents and analysts will have full coverage of the day's top stories.

Let's begin with our Chief White House Correspondent, Jim Acosta.

Jim, a member of the Trump cabinet is under fire for his controversial actions in a previous job.

What is the latest?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: He certainly is, Wolf. President Trump is stepping up to defend his Labor Secretary, who is facing calls to resign over his handling of the Jeffrey Epstein case. The president said Secretary Alex Acosta is doing a fantastic job.

Mr. Trump also tried to distance himself from Epstein in the Oval Office earlier today after once describing him as a terrific guy.

(BEGIN VIDEOTAPE)

TRUMP: Thank you very much --

ACOSTA (voice-over): Tonight President Trump appears to be standing by his embattled Labor Secretary Alex Acosta, at least for now.

TRUMP: I can tell you that for two and a half years he's been just an excellent Secretary of Labor. He's done a fantastic job.

ACOSTA (voice-over): The president appeared to diminish Acosta's role as a federal prosecutor in 2008 plea agreement for multimillionaire Jeffrey Epstein, who is facing new charges of running a child sex ring in Florida that includes accusations of abusing teenage girls. TRUMP: I do hear that there were a lot of people involved in that decision, not just him. I can only say this, from what I know and what I do know is that he's been a great -- really great Secretary of Labor. The rest of it we will have to look at, we'll have to look at it very carefully.

ACOSTA (voice-over): And the president downplayed his relationship with Epstein.

TRUMP: Well, I knew him like everybody in Palm Beach knew him. People in Palm Beach knew him. He was a fixture in Palm Beach. I had a falling out with him a long time ago. I haven't spoken to him in 15 years. I wasn't a fan.

I feel very badly for Secretary Acosta because I've known him as being somebody that works so hard and has done such a good job. I feel very badly about that whole situation.

ACOSTA (voice-over): But that is not the whole story. Back in 2002, the president told "New York" magazine, "I've known Jeff for 15 years, terrific guy. He's a lot of fun to be with. It is even said that he likes beautiful women as much as I do. And many of them are on the younger side. No doubt about it, Jeffrey enjoys his social life."

Democrats are accusing the secretary of shielding Epstein from a --

[17:05:00]

ACOSTA (voice-over): -- tougher sentence.

SEN. CHUCK SCHUMER (D-NY): I'm calling on Secretary Acosta to resign. It is now impossible for anyone to have confidence in Secretary Acosta's ability to lead the Department of Labor. If he refuses to resign, President Trump should fire him.

REP. NANCY PELOSI (D-CA): No surprised; he knew about this when he nominated him for the cabinet. It just goes to show you.

ACOSTA (voice-over): Secretary Acosta tweeted in his own defense, saying, the crimes committed by Epstein are horrific and I'm pleased that New York prosecutors are moving forward with a case based on new evidence.

Republicans say they are awaiting more information.

SEN. JOHN CORNYN (R-TX): There is nothing new that we didn't know before he was confirmed by the Senate.

SEN. MITCH MCCONNELL (R-KY): As to Secretary Acosta's continued service, he serves at the pleasure of the president and I'm inclined to defer to the president to make that decision.

REP. KEVIN MCCARTHY (R-CA): I don't know enough about it to say.

ACOSTA (voice-over): The president is continuing to lash out at Britain's ambassador to the U.S., Kim Darroch, over his recently exposed sharp criticism of Mr. Trump, who is still railing against Prime Minister Theresa May's handling of Brexit.

The president tweeted, "The wacky ambassador that the U.K. foisted upon the United States is not someone we are thrilled with. A very stupid guy. I told Theresa May how to do that deal but she went her own foolish way. Was unable to get it done. A disaster."

KELLYANNE CONWAY, TRUMP SENIOR ADVISER: Many people accused the president of meddling and it's none of his business but it turns out he was right.

(END VIDEOTAPE)

ACOSTA: Away from the controversies regarding Secretary Acosta and the British ambassador, a crucial debate played out at an appeals court over the day over the future of Obamacare.

The Republican appointed judges on that appeals court suggested that Obamacare, which protects people with pre-existing conditions, may no longer be constitutional after President Trump and GOP lawmakers stripped out the individual mandate from that law.

All that means, another critical Obamacare case could be heading back to the Supreme Court just in time for the 2020 election -- Wolf.

BLITZER: That could be rather explosive. Jim Acosta, at the White House. Thank you.

The House Judiciary Committee meanwhile is planning to launch a wave of subpoenas for current and former Trump administration officials. Let's go live to our Congressional Correspondent, Phil Mattingly on Capitol Hill.

What are you learning?

PHIL MATTINGLY, CNN U.S. CONGRESSIONAL CORRESPONDENT: House Democrats are laying the groundwork to escalate investigations on two fronts.

First, on immigration policy, the House Judiciary Committee will vote on Thursday to allow for subpoenas related to the Trump administration's border policies, including the very controversial, very problematic, in Democratic eyes, family separation policy.

And they are asking and giving the authority to the chairman Jerry Nadler to subpoena documents and witness testimony related to internal deliberations as to how that policy came to be and what the president's role and his top administration officials' roles were in the formulation of that policy.

The second issue is on the long-running Judiciary Committee investigation into potential obstruction by President Trump. Now you'll remember, Wolf, the beginning of this Congress, the House Judiciary Committee, requested documents from 81 individuals related to that investigation.

They've sent out a handful of subpoenas and now they will authorize at least subpoenas on at least 12 more former Trump administration officials or people in the Trump orbit. That will include for the first time someone in the family orbit of President Trump. Jared Kushner, his son-in-law as well as former chief of staff John Kelly and former attorney general Jeff Sessions and others.

What is also notable here, Wolf, is they will also be targeting potential subpoenas for people who were not in the White House, including American Media Inc. chairman David Pecker; Corey Lewandowski, the former Trump campaign manager.

Why that is important is this: the White House has obviously been very firm on not allowing anything that might run into executive privilege be allowed during testimony, be allowed to be turned over to the committee. Those individuals never served in the White House. That may open the door to Democrats actually getting some of the information that, up to this point, they have been stonewalled on.

Again it is up to the committee chairman Jerry Nadler in terms of when he'll actually issue those subpoenas. But on Thursday House Democrats will certainly lay the groundwork for that to occur.

And again, it is an escalation on two more fronts, the myriad of investigations going on, on Capitol Hill, immigration and obstruction, the Judiciary Committee is targeting both again on Thursday.

BLITZER: Yes, a clear escalation. You're right. Phil Mattingly up on Capitol Hill. Thank you.

Joining us now, Democratic congressman John Garamendi of California. He's a member of the House Armed Services Committee.

Congressman, thanks for coming in.

REP. JOHN GARAMENDI (D-CA): Good to be here.

BLITZER: On Alex Acosta, the Labor Secretary, do you believe he should resign because of what he did or didn't do more than a decade ago, when he was the U.S. attorney in South Florida?

GARAMENDI: Never should have been appointed. He had a bad record even before he was confirmed. We knew much of this and now we know more. He ought to be fired.

BLITZER: What if he doesn't resign and what if the president decides not to fire him, lets him stay on the job? What happens then?

[17:10:00]

GARAMENDI: I think there's grounds for impeachment. He can be impeached along with any other federal employee. It's happened before. Not very often. But his record is terrible. What he did in that case is unconscionable.

And why did he do it?

That question has not been answered. But it'd be great to have the answer. Why did he allow this guy to get away with what is just a horrible crime?

BLITZER: There were about eight Democratic senators, who voted to confirm him as Secretary of Labor.

You think they made a major blunder?

GARAMENDI: They made a mistake. He never should have been nominated in the first place and never should have been confirmed. There was enough information to really question what was going on. And he adds to a very, very long list of corrupted and incompetent individuals in the president's cabinet.

BLITZER: During his confirmation hearings, Democrats and Republicans could ask as many questions as they wanted. Only one senator, Democrat Tim Kaine of Virginia, asked any question at all about Jeffrey Epstein in the case that Acosta handled more than a decade ago.

GARAMENDI: Every senator --

BLITZER: Where was the vetting on the part of the U.S. Senate?

GARAMENDI: Obviously it wasn't good enough. Obviously there are senators who will have to answer that question. As a member of the House of Representatives, it is not for me to answer it, it is for those senators to answer, Democrat and Republican alike.

BLITZER: But I want to be precise.

If the president doesn't fire him or he doesn't resign you want the House of Representatives to launch impeachment proceedings against Acosta?

GARAMENDI: I think there is grounds for that. Yes.

BLITZER: So the answer is yes. All right. We'll move on and talk about another growing rift between the president and the United Kingdom over the leaked diplomatic cables sent by the British ambassador to the United States.

The president says in those cables that -- the ambassador says the Trump administration was clumsy and inept and the president this morning responded that the ambassador is a very stupid guy, a pompous fool. And he went -- he called him wacky at one point.

What is your analysis about this dispute going on?

GARAMENDI: Well, the president has always had trouble with the truth. Saying the truth himself and when the truth is told, he doesn't like it. The fact of the matter is, the ambassador did exactly what the ambassador is supposed to do; he's supposed to give honest evaluation, forthright evaluation to his superiors in the foreign office in London. And he did. Now the fact that those memos, honest as they are, correct as they

are, were leaked, well, that is an embarrassment to the president, not to the foreign office and not to the ambassador, who did what he is supposed to do.

BLITZER: Ambassador Kim Darroch has been in Washington for three and a half years, almost four years. He's very well known in Washington. I don't know if you know him, have you met him?

GARAMENDI: I have met him and I don't know him well but I've met him in various opportunities that occur here.

BLITZER: Would you call him very stupid and a pompous fool?

GARAMENDI: He's none of those things. The president is.

BLITZER: Because he's very well known in Washington, very well plugged in and if you go to any diplomatic receptions or dinners or events at the British embassy here in Washington up on Massachusetts Avenue, not only is there -- are Democrats and Republicans but very often there are representatives from the White House and the Trump administration, who were more than happy to attend.

GARAMENDI: As I said a moment ago, the president has a problem with the truth. He can not speak the truth himself and he cannot handle anybody that speaks the truth to him. That is a well-known fact.

And the ambassador spoke the truth. This administration is incompetent, this administration is in chaos, this administration has all kinds of troubles. And the ambassador simply told the foreign office in London the truth.

BLITZER: So how do you repair the strain that has developed in U.S.- British relations right now?

GARAMENDI: Change the prime minister, change the president.

BLITZER: Well, the prime minister is being changed in the United Kingdom. The president still has a while to go. And as you know, there is a very strong possibility he could get re-elected.

GARDNER: We'll make sure that doesn't happen. This man cannot lead this nation any longer. He has totally destroyed our diplomatic relations around the world and he's taken on our allies and NATO. And he's done his darndest to destroy those relationships.

Those are critical allies and you just can not disrespect our allies over and over again and expect to be able to accomplish anything in this world. But that is what the president has done. And it is time for him to leave. And the election is probably the way in which that will happen.

BLITZER: And so you don't see a serious impeachment process beginning for the president in this first term?

GARAMENDI: We don't know. There is a lot of smoke. There is smoke everywhere. Mostly coming out of his family and every which direction.

Is there a fire beneath it?

There is evidence that there is.

Does that lead to impeachment?

Who knows who will happen in the next several months?

But there is a growing conflagration going on with this administration. It may very well happen. But at the moment, we're not there.

BLITZER: But even if he's impeached in the House of Representatives, you don't have the two-thirds vote in the Senate to convict and --

[17:15:00]

BLITZER: -- actually remove him from office so he'll run for re- election.

GARAMENDI: Probably so. But then we don't know, do we?

We thought Richard Nixon would run for re-election and it didn't happen.

Why?

Because it turned out there was a raging fire in the administration. My guess is there is a raging fire in the administration. My

Will this president survive that?

Impeachment, not likely.

BLITZER: Among all the 23 or 24 Democratic presidential candidates, who is best, from your perspective right now, Congressman, to lead that fight against the president?

GARAMENDI: The fight for impeachment or...?

BLITZER: No, the fight to get elected President of the United States and defeat Donald Trump in November 2020.

GARAMENDI: Well, at the moment it is the leader in the polls, Mr. Biden.

BLITZER: Is that someone you are supporting?

GARAMENDI: I am not yet supporting one or another but he clearly is leading. He clearly has the experience. And at the moment he is best positioned.

BLITZER: What do you think about the House Judiciary Committee going ahead and subpoenaing maybe about a dozen or so current and former Trump administration officials? You can see the names over there. They want to come over and testify.

What is that all about?

It is all about this administration stonewalling and totally ignoring the constitutional authority that the House of Representatives and the Senate has to oversee and to have oversight over the administration.

They are stonewalling not only within the White House but now within most every one of the departments. That is simply wrong. That is not the way this nation was set up.

BLITZER: But the administration is succeeding in that stonewalling, at least for now.

GARAMENDI: One more reason the president has to go. This is a constitutional democracy; this is not an autocracy and this is not a nation run by a single person who is going to demand that it be his way. Even now he's disrespecting the Supreme Court.

So our democracy, our way of governing here is at risk, given the authority and the way in which the president wants to literally set himself up as king.

BLITZER: Congressman Garamendi, thank you for coming in.

GARAMENDI: Thank you.

BLITZER: Up next, top Democrats are demanding the resignation of the Labor Secretary Alex Acosta, who as a U.S. attorney oversaw a plea deal for alleged sexual predator multimillionaire Jeffrey Epstein more than a decade ago. I'll speak with presidential candidate Amy Klobuchar next.

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BLITZER: Tonight in the wake of the latest sex trafficking charges against the wealthy business man, Jeffrey Epstein, prominent Democrats are calling for the resignation of the Labor Secretary Alex Acosta, who as a federal prosecutor negotiated a very lenient plea deal with Epstein back in 2008. One of those Democrats is senator and presidential candidate Amy Klobuchar, who's joining us right now.

Senator, thanks so much for joining us.

SEN. AMY KLOBUCHAR (D-MN), PRESIDENTIAL CANDIDATE: Thanks, Wolf.

BLITZER: So you released a statement earlier today calling on Secretary Acosta to resign in light of Epstein's arrest but the details of Acosta's involvement in this plea deal, they were revealed by the "Miami Herald," basically part of a long journalistic investigation.

It was all published late last year.

Why did you and so many others wait for Epstein's arrest this week before deciding to push for his resignation?

KLOBUCHAR: You know, I didn't vote for Secretary Acosta to begin with. So I think that was part of it. A number of us had opposed him from the very beginning as this being one of the reasons.

As you know Senator Kaine asked him about this at the hearing. But I think there has been many new developments even since that hearing. The first thing was a federal district court came out and said that that agreement that he had made with Epstein's lawyer violated the law.

I know as a former prosecutor that you consult with victims, sometimes you have plea agreements but the law, both state and federal, say that you need to consult with victims. And that didn't happen in this case so that was a violation.

The other thing that has happened was just the gruesome details and the gory details that we all learned yesterday, where they actually still found photos, according to news reports, of young women.

And when we step back and look at this, Wolf, we have to remember, through all of the political discussions about this, these were young girls. These were 14-year olds. These aren't prostitutes; these are actually victims. They're victims of a sex trafficking ring.

He was trying to get them -- Epstein was -- to get others. And that is why the major concern over the Labor Secretary, who has some jurisdiction over human trafficking, would be involved in making a deal like this.

BLITZER: At least for now, it looks like President Trump is sticking with Secretary Acosta. The president saying he's doing a great, great job as Labor Secretary.

If the president refuses to fire him and if Acosta refuses to resign, what should lawmakers do next?

KLOBUCHAR: Well, there are several alternatives. We could have a hearing and force him to come, subpoena him to come. I would hope that the -- I would hope that the Judiciary Committee would do that in the Senate, not just the Democratic committee in the House.

But I would hope that we would have a hearing if he would refuse to leave.

And then you go from there as you get more evidence. There is also an investigation going on of a --

[17:25:00]

KLOBUCHAR: -- looking at the ethical background here and if there was a violation with the Justice Department rules.

BLITZER: You mentioned the Judiciary Committee. The chairman, Lindsey Graham, says he wants to wait until the Justice Department issues a full-scale report on Acosta's handling of the case before he makes a decision.

I take it you disagree with Senator Graham?

KLOBUCHAR: I do simply because the evidence here is clear out of a federal district court already as well as what we've seen from the indictment in the last few days. But again, I would hope that Senator Graham would have such a hearing, if it goes that far, if he is still in place and we get the investigation but I think he could do it before we complete the investigation.

BLITZER: Do you trust the Justice Department to investigate this plea deal that Acosta helped negotiate for Jeffrey Epstein a decade or so ago?

KLOBUCHAR: Not completely. I just hope they would have career people looking at this. They have a reason to want to uphold the highest standards for the Justice Department, given that it is a U.S. attorney that works for this Justice Department here out of New York state that actually brought these charges.

These are federal charges. And so the hope is that the Justice Department does the right thing. But given what we've seen with attorney general Barr even this week where he's backpedaling on Director Mueller's need to testify, we just never know what they will do.

BLITZER: Barr, the attorney general, he suggested yesterday, at least he would recuse himself from part of this Jeffrey Epstein case because the law firm that he used to work for was involved. He had no directive involvement but the law firm that he worked at one point before becoming attorney general was involved.

Should he recuse himself from all aspects of this?

KLOBUCHAR: Yes. I think that he should, given his involvement in that he -- their law firm had represented him in the past. But my point was a bigger one, is that you have a Justice Department that has often done things that I think are inconsistent with the law, including how they handled the Mueller report. It is not just Barr.

BLITZER: Eight of your Democratic colleagues in the Senate voted to confirm Alex Acosta as Labor Secretary for the most part. They're standing by their decision, at least for now.

What is your message to your Democratic colleagues who still support Secretary Acosta?

KLOBUCHAR: I think this is a matter of timing. I think that some people would allow this investigation and then others just believe it is very clear what went on here and this secret deal made behind closed doors. For me, as someone who was one of the leaders on the human trafficking

legislation and as a former prosecutor, I just think these kinds of deals have gone on for too long, where victims don't know about it and where you think the victims don't matter because they're 14-year olds that no one will ever meet.

Well, now the whole country is meeting these victims.

BLITZER: And very quickly, if he doesn't resign, if he's not fired, should the House Judiciary Committee, the House of Representatives, begin impeachment procedures against the Labor Secretary?

KLOBUCHAR: That is something that is going to be up to Speaker Pelosi and the House. And you've seen them take actions before when it comes to subpoenas. They pushed to have Director Mueller testify; they got that and so that is something that they could consider. But I hope right now that he does the right thing and steps down.

BLITZER: Senator Klobuchar, thank you so much for joining us.

KLOBUCHAR: Great to be on Wolf, thank you.

BLITZER: Still ahead, an Australian student speaking out after he was detained by North Korea, accused of being a spy and then abruptly deported.

[17:30:00] (COMMERCIAL BREAK)

BLITZER: Just a short while ago, former Vice President Joe Biden joined the list of prominent Democrats calling for the resignation of Alex Acosta, the Labor Secretary.

Back in 2008, Acosta was a federal prosecutor who negotiated a lenient plea deal with sex offender Jeffrey Epstein and now faces new sex trafficking charges involving teenage girls. Let's ask our political and legal experts to discuss this and more.

And, Gloria Borger, in the Oval Office today, the President tried to distance himself from Epstein despite his past praise --

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes.

BLITZER: -- many, many years ago for him. He also defended Alex Acosta. Listen to this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I feel very badly, actually, for Secretary Acosta because I've known him as being somebody that works so hard and has done such a good job. I feel very badly about that whole situation.

(END VIDEO CLIP)

BLITZER: What do you make of the President's comments? BORGER: Well, he didn't come out and say, I feel very badly about the

whole situation and I don't want him to go anywhere and I think he should remain in my cabinet. He did not do that. What he said was I kind of feel bad for the guy.

And distancing himself from Epstein is no surprise. He always distances himself from people who are in trouble. He did it with Paul Manafort, he did it with Michael Cohen, and the list goes -- the list goes on and on. So I think it was kind of a half-hearted endorsement of Acosta but not a full one.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Yes. I think that's --

BLITZER: What do you think? Because you cover the White House for us.

PHILLIP: I think that when we hear President Trump say I feel badly for him and you hear Kellyanne Conway, the counselor to the President, say President Trump only met Alex Acosta 2-1/2 years ago for the very first time, it seems to strike the ear as the President doesn't know exactly where he's going to go with this, so he's going to keep a safe distance for now.

[17:34:58] And I think that's where they are. White House aides believe that this is going to be President Trump's call once he gets a feel for where the media narrative is about Alex Acosta.

And he seemed to give credence to the idea that this was bad for him. I feel -- he said I feel bad for him. He thinks that this is a bad scandal for Alex Acosta even as he tried to diminish the seriousness of it by saying, oh, it was 15 years ago, it was 20 years ago. Neither of those things are true, it was 11 years ago.

And I think that the seriousness of what Acosta did is pretty well known, that the plea deal was something that is being widely criticized. So, you know, President Trump is doing both things at the same time, but partly because he's trying to buy time for himself to figure out what to do.

BLITZER: A lot of these details that were contained in the U.S. Attorney for the Southern District of New York and the charges filed against Acosta yesterday, they were known late last year thanks to the "Miami Herald's" investigative reporting.

RYAN LIZZA, CHIEF POLITICAL CORRESPONDENT, ESQUIRE: Yes, so there is a lot of hypocrisy going around here, right? I mean, this was litigated to a certain extent during his hearing, but the fact that there are new federal charges has just brought everything back. A lot of the uglier details are -- and some of the details are new from what the -- from the raid on his home.

So, you know, it's not just Trump. It's Democrats, too, who decided to, you know, knowing -- a lot of these details who -- eight Democrats in the Senate who voted to make that confirmation -- to confirm him. So they're going to have to answer questions as well as Trump. BLITZER: And they certainly will. And the U.S. Attorney in the

Southern District of New York, Susan, cited some of the investigative reporting by the "Miami Herald" in these charges in this indictment against Epstein. It's -- tell me if it's unusual, though, that the corruption unit in the Southern District of New York, the Public Corruption Unit, is handling this case as opposed to a sex crimes unit.

SUSAN HENNESSEY, CNN NATIONAL SECURITY AND LEGAL ANALYST: Well, so it is unusual to see the Public Corruption Unit involved. Federal officials have warned people to not read too much into it, so we don't yet have an explanation. But the Public Corruption Unit investigates allegations against public officials, elected officials, or allegations of official misconduct, so --

BLITZER: Because Epstein is not a public official.

HENNESSEY: He's not a public official so one possibility -- and we're speculating -- is that there might be an unindicted co-conspirator that falls within the category.

We also know because there are questions about the nature of this plea deal by Alex Acosta when he was a federal prosecutor. If the Southern District of New York was looking into allegations related to the handling of that plea agreement, that might be something that would fall within sort of that unit's jurisdiction.

LIZZA: That's right.

BORGER: And you know, to Abby's point, it's that the White House doesn't know what the Southern District has or what they're looking into or who they're looking into, so they have no choice right now but to kind of hold back and see how this plays out a little bit. Unless the President is not happy with him anyway and could just say sorry.

PHILLIP: Right. And that's kind of maybe the X factor here, is that there is not a sense that Alex Acosta has a ton of support in the White House, people who are bolstering him in the face of all of this. So if the coverage turns south, it could get really bad for him pretty quickly.

And the White House has been giving lip service to some kind of review of Acosta's behavior. There's not really much evidence that that's happening. What is being reviewed is President Trump is watching the news coverage, and he's trying to make sure that this is something that is worth weathering for him.

BLITZER: I suspect there are a bunch of nervous people out there who are worried about additional indictments coming down the road.

BORGER: Sure.

BLITZER: Everybody, stand by. Lots more right after this.

[17:38:29] (COMMERCIAL BREAK)

BLITZER: We're back with our political and legal experts. We got some breaking news. And, Susan, let me get your reaction.

A federal judge in New York has just said the Justice Department cannot, repeat, cannot swap out its legal team in the census citizenship question case. The judge writing, the defendants provide no reasons, let alone satisfactory reasons, for the substitution of counsel. Potentially, this is a significant development.

HENNESSEY: It is potentially significant. We saw DOJ making this very rare move of attempting to sort of completely change their legal team at the last minute. The ACLU which is litigating against them objected and said, no, under the rules, you have to provide an actual reason for changing counsel. And that's exactly what this judge is saying.

Now, the interesting thing will be if DOJ now goes back and attempts to offer justification. One of the sort of speculations was the reason why they had to switch legal teams was because the career prosecutor said we don't believe you have a legally defensible strategy moving forward, and we're not willing to litigate this anymore.

Now, if they do submit that reason, it will have to be -- you know, you can't lie to the court. And so if he they decide to move forward and make this change, we're going to see the real reason for it.

LIZZA: Right.

BORGER: I mean, it could also be that these lawyers who made this argument before the court cannot go back and say never mind.

LIZZA: So they got to swap them out, yes.

BORGER: And Justice Roberts already said that their argument was contrived, but they can't go back and say, what I told you, about the deadline and everything, is not true. How can you have the same lawyers?

LIZZA: And potentially a new team could.

BORGER: Yes.

HENNESSEY: But it is a demonstration of the fact that by insisting on pushing this forward, despite the fact that the -- other members of his administration did not want to --

BORGER: Yes.

HENNESSEY: -- you know, President Trump is really harming the institutional credibility of DOJ.

BLITZER: Well, there were public statements, Abby, by the Attorney General of the United States, Bill Barr, by the Commerce Secretary Wilbur --

PHILLIP: Ross.

(CROSSTALK)

HENNESSEY: Wilbur Ross.

BLITZER: Wilbur Ross, excuse me.

(LAUGHTER)

BLITZER: Wilbur Ross. They made public statements the day before, saying they were accepting the Supreme Court decision and were not going to include on the questionnaire -- the census questionnaire the question about citizenship.

PHILLIP: Right, and the change of strategy was entirely because President Trump decided he wanted that question put on there. And so it's actually left the Justice Department trying to come up with a legally justifiable strategy in order to get the question on there.

[17:45:07] And those lawyers who, now, might be forced to go back on to this case had to go to a judge the very next day and say we really don't know what's going on here. We're going to try to find out as quickly as we can, but, apparently, we're moving forward with adding the citizenship question.

It just puts everyone in a really difficult position here. And I think that as they go forward, they're going to even struggle to provide that reasoning to the lawyers, which is, basically, they changed their mind entirely because of the whims of President Trump.

BLITZER: Another setback, at least for now, for the President of the United States who really wants that citizenship question asked as part of the 2020 census. Stand by, we're going to have a lot more on this. All the breaking news right after a quick break.

(COMMERCIAL BREAK)

[17:50:26] BLITZER: An Australian student freed from North Korean custody is hotly denying claims that he was engaged in espionage. Brian Todd has been looking into this for us.

Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight, that young man, Alek Sigley, is calling the situation sad, saying he was only a student in North Korea, not a spy. A key question tonight, did the fatal case of American student Otto Warmbier spook the North Koreans into letting the young Australian go?

(BEGIN VIDEOTAPE)

TODD (voice-over): Alek Sigley was in the grip of Kim Jong-un's regime, detained for about a week, then deported and accused of being a spy. Tonight, the 29-year-old Australian student denies the accusation, tweeting that the charge is, quote, pretty obviously false.

GREG SCARLATOIU, EXECUTIVE DIRECTOR, COMMITTEE FOR HUMAN RIGHTS IN NORTH KOREA: Alek Sigley is very lucky to have come out unharmed and alive.

TODD (voice-over): Sigley had been a student at Pyongyang's Kim Il- sung University, studying literature. He ran a tour company in Pyongyang. He was a voracious blogger, posting pictures of his experience seeing sites and visiting restaurants in North Korea. And he wrote six columns about food and fashion for the publication N.K. News, which the regime cited.

Alek Sigley was spared the final outcome of Otto Warmbier, the American student convicted of stealing a propaganda sign from a hotel in Pyongyang. Warmbier was put on trial, detained for a year-and-a- half, and ended up in a vegetative state.

SCARLATOIU: Of course, the last thing, perhaps, that the regime wants under the current circumstances is another tragedy on par with what happened to Otto Warmbier. Another Otto Warmbier case could deal a deadly blow to the regime's attempts to sanitize its own image in the eyes of the international public opinion.

TODD (voice-over): President Trump has said Kim Jong-un told him he felt very bad about the Warmbier case.

TRUMP: He tells me that he didn't know about it, and I will take him at his word.

TODD (voice-over): Another possible difference between the Warmbier and Sigley cases, experts say, Sigley's spying charge is actually less serious in the eyes of Kim's regime than what Warmbier was accused of doing.

SCARLATOIU: Otto was accused of having committed the ultimate crime, an affront to the very honor and dignity of the supreme and dear leader. He attempted to take away, to steal a poster, allegedly inscribed with the words of the great and the (ph) leader.

TODD (on camera): That's worse than spying?

SCARLATOIU: Absolutely.

TODD (on camera): Really?

SCARLATOIU: That is worse than spying.

TODD (voice-over): Warmbier's parents have kept his case in the headlines by trying to collect on a $500 million judgment against North Korea for their son's death. Their target? North Korea's second largest ship, the Wise Honest, now in U.S. custody on allegations of evading sanctions.

The Warmbiers have filed a claim on the vessel. Analysts say it's possible the Wise Honest could be awarded to the Warmbiers then sold. But they say it would only fetch a fraction of that $500 million. Will Kim Jong-un ever pay a price that would really hurt for Otto Warmbier's death?

ELIZABETH ROSENBERG, DIRECTOR OF THE ENERGY, ECONOMICS, AND SECURITY PROGRAM, CENTER FOR A NEW AMERICAN SECURITY: It's hard to see how there will be any major financial payout they would agree or be compelled to pay in the future. I think the most likely scenario that will occur is North Korea's price, the price that will be paid will be reputational.

(END VIDEOTAPE)

TODD: Analysts say that by filing this claim on the cargo ship, whether they win any money or not, what the Warmbiers could also be after here is to send a message, a message to people like Alek Sigley, to people like their own son, that whatever romantic ideas they have about visiting North Korea, whatever diplomatic overtures are going on right now, that this regime is still very, very dangerous to deal with -- Wolf.

BLITZER: All right, Brian, thank you. Brian Todd reporting.

TODD: Coming up, we'll have more on the breaking news. A federal judge in new York has just ruled the Justice Department here in Washington can't switch its legal team in the court fight over adding a citizenship question on next year's U.S. census form.

[17:54:16] (COMMERCIAL BREAK)

BLITZER: Happening now, breaking news. Census setback. A federal judge just refused to allow the Trump administration to hire new lawyers to argue for adding a question on citizenship in the 2020 census form. So what does that mean for the controversial case?

Defending his Secretary. President Trump stands by his Labor chief while more top Democrats demand Alex Acosta's resignation. They're accusing him of seeking leniency for an alleged sexual predator of young girls. Can Acosta hang on as the Jeffrey Epstein case plays out?

Obamacare at risk. The Republican-appointed Appeals Court judges signal they may decide to throw out the entire Affordable Care Act. This as the 2020 Democrats spar over health care and Joe Biden warns against committing a sin.

[17:59:58] And on the outs. The President insults the British Ambassador to the United States once again, still smarting after learning that the diplomat called him incompetent.