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ERIN BURNETT OUTFRONT

Candidates Making Final Pitch to Iowa Voters; Trump: Cruz is an Anchor Baby in Canada; Cruz Holding Iowa Rally in Final Push For Support; Awaiting Start of Marco Rubio Rally in Iowa; State Dept. Won't Release 22 "Top Secret" Clinton Emails; Trump Claims Victory Over FOX News. Aired 7-8p ET

Aired January 29, 2016 - 19:00   ET

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


[19:00:03] CLARISSA WARD, CNN CORRESPONDENT: This town was liberated nearly two months ago, but when ISIS fled, so did all of the Arab residents and the streets here are still completely deserted.

(voice-over): Kurdish fighters just told us one of the 3,000 inhabitants remains. The rest weary of life under Kurdish control simply vanished leaving behind shuttered shops and empty schools. An ominous sign of the deep distrust that haunts every corner of this country.

Clarissa Ward, CNN, Al Hal, Syria.

BLITZER: Erin Burnett OUTFRONT starts right now.

ERIN BURNETT, CNN ANCHOR: And next, down to the wire. Seventy two hours before the first votes are cast. Is Donald Trump unstoppable?

Plus, breaking news. The State Department just announcing it will not release 22 Hillary Clinton e-mails because they contain top secret information. Our live report on the breaking news tonight. And the Trump-FOX News battle. Was the network outfoxed? Let's go OUTFRONT.

Good evening. I'm Erin Burnett. OUTFRONT tonight, the war of words. Seventy two hours to go and then the first votes of 2016 will be cast. The campaign neck and neck between Donald Trump and Ted Cruz and it is getting even nastier.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Ted Cruz may not be a U.S. citizen, right? But he's an anchor baby. No, he's an anchor baby. Ted Cruz is an anchor baby in Canada.

(END VIDEO CLIP)

BURNETT: Ted Cruz fighting back with a statement saying, the only anchor here is the one being dragged behind the SS New York values, causing Donald Trump's campaign to stall out as voters learn about his affinity for Hillary Clinton and his previous statements supporting abortion. As I said, it's getting nasty. And it comes a day after Donald Trump's colossal gamble snubbing the final debate before Iowa with his own rally to honor veterans and it appears that it may paid off. He says his rally held directly opposite the debate, raised $6 million for 22 veterans groups. Called the elephant not in the room.

His absence hung over his rivals on the debate stage all night. And after charging that he was keeping the debate because FOX News threated him badly, tonight, he's claiming victory. Our correspondents are fanned out across Iowa covering the candidates in this final hours as we countdown to the vote.

I want to begin with Sara Murray. She is OUTFRONT in Des Moines. And Sara, is there any sign that skipping the debate is going to stall Trump's momentum in these final hours?

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Erin, today Donald Trump seemed almost gleeful about his decision to skip this last GOP debate before Iowa. And while voters here weren't exactly thrilled with that decision, even they don't think it's going to hurt him.

(BEGIN VIDEOTAPE)

TRUMP: What happened last night that was amazing because I wasn't treated right. I did something that was very risky and I think it turned out great because I'm on the front page of every paper getting more publicity than if I --

MURRAY (voice-over): Today, Donald Trump showing no signs of regret after skipping last night's debate.

TRUMP: He got really pummeled last night. Actually I'm glad I wasn't there because I guess all of that, he got pommeled.

MURRAY: Instead, piling on Ted Cruz.

TRUMP: Ted Cruz may not be a U.S. citizen, right? But he's an anchor baby. No, he's an anchor baby. Ted Cruz is an anchor baby in Canada.

MURRAY: After the Des Moines register's front page declared the debate a rough night for Cruz. Trump's absence met a target on Cruz's back.

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: Chris, I would note that the last four questions have been Rand, please attack Ted, Marco, please attack Ted, Chris, please attack Ted, Jeb, please attack Ted. Let me just say this.

(AUDIENCE BOOING)

CHRIS WALLACE, CNN CORRESPONDENT: It is a debate, sir.

CRUZ: Well, no, no, a debate actually is a policy issue. But I will say this, gosh, if you guys ask one more mean question, I may have to leave the stage.

(CHEERS AND APPLAUSE)

MURRAY: But today Cruz is shrugging off the critical coverage.

CRUZ: At the end of the day, I don't worry about the approval of disapproval of the media.

MURRAY: And with just three days until the caucuses, insisting he's put in the time to come out on top in Iowa.

CRUZ: I think every candidate who is running for president owes it to the men and women of Iowa to show them the respect, to come in front of them and answer their questions about their record, and to ask for their vote.

MURRAY: So, what do Iowa voters think of Trump's risky move?

UNIDENTIFIED MALE: I think he should have been at the debate. Did it hurt him? I don't think so.

MURRAY: Several said Trump should have debated, but most of them still predicted it wouldn't hurt him in Iowa.

UNIDENTIFIED MALE: It gave all the attention to Cruz. You know, he's kind of in that center podium. I don't know if he handled it as well as he could have.

(END VIDEOTAPE)

MURRAY: Now, today Ted Cruz is trying to move past this whole debate debacle. He says it really matters if it turned out on caucus night. That's why you're going to see both him and Donald Trump here in Iowa all weekend barnstorming in these last few days before the caucuses -- Erin.

[19:05:08] BURNETT: All right, Sara. Thank you from Des Moines.

And now let's go to our national political reporter Maeve Reston on the ground in Iowa where she spent time with both the Trump and Cruz campaigns. So, you know, Maeve, this is going to come down to, can they get turnout especially with Donald Trump, right? So many of his supporters are fans. Will they actually go and register and vote? How do the ground games of Trump versus Cruz stack up?

MAEVE RESTON, CNN NATIONAL POLITICAL REPORTER: Well, it's been really fascinating here, Erin, because we've been trying to get a better sense of Trump's ground game over the last week. His campaign has not been talking about it. They're very tight lipped about the details, and so that's the big question here is whether Ted Cruz, who has a very sophisticate ground game, will really that will pay off for him in the end. Donald Trump obviously has some five million Twitter followers. He's been tweeting out the app that he has for caucus finder on his website for people to find out where they should caucus.

But we know that Cruz has a very traditional ground game that's always mattered here. He's got 12,000 volunteers from across the state and another 1,000 that he's brought in. They say that they have precinct captains in some 1500 precincts across the state who are going to make sure that those people show up. So, it's really this big question about whether Donald Trump's social media footprint and the phone calls that his campaign has been making can turn people out. As particularly those voters who have never caucus before. I will say at Trump rallies over the last couple of days, I did talk to a lot of voters who said that they had already been on Trump's website, found their caucus location, had figured things out, and were really passionate and excited about turning out for him on Monday night.

BURNETT: That's going to be amazing to see. All right, Maeve, thank you very much.

I mean, it is. It's sort of the social media. Will that Trump 50 years of traditional politics in Iowa?

OUTFRONT tonight, national co-chair of Ted Cruz's campaign, Congressman Steve King and Trump's supporter Jeffrey Lord who was political director for President Ronald Reagan. Congressman King, let me start with you. The front-page of the Des Moines register you just saw there in Sara's piece. Of course, you saw it today in Iowa. It read rough night for Cruz all the way across the top. Only one headline. That was it. Does Donald Trump has the momentum now as we have 72 hours to go?

REP. STEVE KING, NATIONAL CO-CHAIR, TED CRUZ CAMPAIGN: Well, I don't know that he does, but you're seeing the Des Moines register, I actually saw it the first time right here this morning. It's not the first time I've been to an event, observed it and then it was news to me when I saw the headline. It didn't seem to match whatever I saw last night. You know, I don't know how I can characterize it in that fashion. But I thought that Ted Cruz started out strong early. There was a spot in the middle not as great. And he closed through the middle of it, and the end very strong, and especially on the immigration issue and especially on the ethanol issue. I think that he -- loud and clear to Iowans that he wants it to compete in the marketplace. He is pro-renewable fuels, rule of law, restore the border.

BURNETT: So, you're OK with him changing his view on something like ethanol? It's not flip-flopping to you. It's evolution. Or are you OK with being political expediency for votes?

KING: We should remember that the Governor's son and others collected hundreds of thousands of dollars, some say millions, and they've been pouring this negative misinformation out since November. And so that is where this comes from. No, he has not flip-flopped on this. They have misrepresented the actual fact that he authored and introduced legislation to phase down the RFS. He's been with that position since March 27th, 2014. So, no, I don't think there's any flip-flop on that. He's just developed a policy that's good for the industry and he's done so with Dave Vander Griend who is the number one ethanol plant production fellow in Iowa and probably in the country.

BURNETT: So, we'll see if that pays off with voters. I mean, Jeff, you know, certainly Donald Trump out today declaring victory. You know, there were plenty of critics who seem to think look, you know what, balance goes to Trump in terms of the battle with FOX News and whether this pays off, but you heard voters in Sara's piece. One said he should have been at the debate. Rand Paul saying, Trump showed disdain and arrogance that could turn off Iowa voters in this final 72 hours. So, even if Donald Trump can say, look, millions of people watched me on TV, I won, FOX lost viewers. Even if he can say that, is it possible that he lost?

KING: Well, I think --

JEFFREY LORD, DONALD TRUMP'S SUPPORTER: Well, anything -- anything is possible.

BURNETT: Sorry, go ahead, Jeff.

LORD: As we get closer to this, I'm always reminded of the old sports adage that the opera isn't over until the fat lady sings. And the fat lady in this case are all those caucus goers who have to get out, who have to do their job, who have to get in there and do the kind of thing that Congressman King is long familiar with. I would just suggest here that we've got, I think, a three-way race here. We've got Donald Trump, we have Senator Cruz, and I think Marco Rubio. And I think we're also going to see some people ending their campaigns, were getting close to ending their campaigns when Monday night is over.

[19:10:08] BURNETT: So, Congressman King, Ted Cruz relies on you a lot. You're really important to him. Let me just explain why, he mentioned you several times. I think four or five times at the debate. Here's a couple of the mentions.

(BEGIN VIDEO CLIP)

CRUZ: The endorsements that I am proud of are leading conservatives like Iowa's own Congressman Steve King who is a national co-chairman of my campaign. There is a reason that Iowa's Congressman Steve King, perhaps the fiercest defender of farmers in this state, is chairing my campaign.

(END VIDEO CLIP)

BURNETT: And you just made your case, Congressman for why you believe that. But when it comes to Cruz's fellow senators, there are none who are defending him like you are none, I mean, why is that? Why are you such a lonely crusader on behalf of him?

KING: Well, I can only hear just part of what you're saying, but here's what I can say. Is that the people that show up on caucus on Monday night are about two-thirds of them are more or full spectrum constitutional Christian conservatives. And that will be the bulk of the Cruz supporters. And they have gone to caucus before. They don't have to be trained to go. There are three generations that have been going and training their children to go as well. That's the stability of the foundation of this. And I know the caucus goers. They're pro- life. They're pro-marriage. They're pro-religious liberty. They're pro-Second Amendment.

They have right to keeping bare arms. And they're also free enterprise and strong national security. And they like the consistency and stability of Ted Cruz himself, his history, his record, and his campaign. And they don't know what Donald Trump is going to do next. And that's the biggest question out there. When he pulled out of the debate, it was an insult to Iowans. And in fact he criticized Michelle Bachmann four years ago for pulling out of the debate where he was a moderator. So, we're going to find out on Monday night whether that 39 percent of the undecideds are going to feel that insult and decide their support goes behind Ted Cruz but this is a binary decision now, it sounded two I think not three and that is where Jeff and I see a different light.

BURNETT: Right. Of course he sees Marco Rubio as part of this. Jeff, you heard Cruz --

LORD: I would say --

BURNETT: Go ahead.

LORD: Yes. I would say this was certainly not an insult to Iowans. What this was is Donald Trump showing that you have to fight, you have to stand up and fight. And that frankly is an issue that's going to go long beyond Iowa here. That's going to carry over into the November election in how the United States of America is run and whether we stand up for ourselves in the world.

BURNETT: All right. Thank you both very much. We shall see the final hours.

LORD: Thanks.

BURNETT: And next, Rubio, you heard him there. Is he on the rise? John King next on whether Marco Rubio has a path at this moment all the way to the nomination.

And the breaking news tonight, the State Department refusing to release e-mails from Hillary Clinton. Why? Because they are top secret. Top secret e-mails. How will this affect the campaign in these final hours?

And Sarah Palin's daughter weighs in on this.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER VICE PRESIDENTIAL NOMINEE: You rock and rollers and holy rollers pushing stroller pro-bowler with an abscess molar.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[19:16:45] BURNETT: All right. This is a live picture of Wilton, Iowa. You see Senator Chuck Grassley there speaking. He's going to introduce Ted Cruz holding a campaign rally there with just 71 hours until the caucuses. Cruz under attack from almost everyone on stage on last night's debate. A top issue was immigration.

And Sunlen Serfaty is OUTFRONT.

(BEGIN VIDEOTAPE)

SUNLEN SERFATY, CNN CORRESPONDENT (voice-over): Marco Rubio and Ted Cruz --

SEN. MARCO RUBIO (R-FL), PRESIDENTIAL CANDIDATE: This is the lie that Ted's campaign is built on.

SERFATY: -- bringing new heat to old fights.

CRUZ: Marco made the choice to go in the direction of the major donors to support amnesty because he thought it was politically advantageous.

SERFATY: The two first term senators fighting for the upper hand over each of the rules in the 2013th battle over immigration reform. Cruz slamming Rubio for co-authoring a bipartisan compromised bill. The so-called gang of eight plan.

CRUZ: The facts are very, very simple. When that battle was waged, my friend, Senator Rubio, chose to stand with Barack Obama and Harry Reid and Chuck Schumer and support amnesty.

SERFATY: That legislation which ultimately failed did include a pathway to citizenship for many who came to the U.S. illegally.

RUBIO: We have an obligation and the need to address the reality of the situation that we faced.

SERFATY: Rubio trying to turn a vulnerability into a liability for Cruz, charging that his rival has part of that effort once supported granting legal status to undocumented immigrants.

RUBIO: And then when you got to the Senate, you did an interview with CBS News, I wasn't even part of the video where you said on the issue of people that are here illegally, we can reach a compromise. And then on the committee, you said, I want to bring people out of the shadows.

SERFATY: Cruz did offer an amendment to the bill that would grant legal status.

CRUZ: The proponents of this bill repeatedly point to as their principle objective to provide a legal status for those who are here illegally to be out of the shadows. This amendment would allow that to happen.

SERFATY: But standing by his defense now that it was all designed to be a poison pill to kill the legislation.

CRUZ: The bill was a thousand pages. I introduced a series of amendments each designed to fix problems in the bill. The fact that each amendment didn't fix every problem, didn't mean that I supported the rest of the bill.

SERFATY: Rand Paul calling them both out.

SEN. RAND PAUL (R), PRESIDENTIAL CANDIDATE: I just don't think Marco could have it both ways. I was there and I saw the debate. I saw Ted Cruz say, we'll take citizen off the table and then the bill will pass and I'm for the bill.

(END VIDEOTAPE)

SERFATY: And Senator Cruz on the campaign trail today recalibrated a bit and sharpened his attack on Rubio's record on immigration. The Cruz campaign also redirecting funds on negative TV ads from Trump and now putting those funds towards Marco Rubio. They are out with a new ad tonight calling Rubio the Republican Obama on immigration. All of this combined really does speak to the growing anxiety within the Cruz campaign about a late surge from Rubio here in Iowa -- Erin.

BURNETT: Thank you so much, Sunlen. And now, Dubuque, Iowa, Marco Rubio there live about to hold a campaign rally. Now, here's the thing, you're hearing about a Rubio surge. And this is why, the latest poll out of Iowa shows Rubio in third place behind Trump and Ted Cruz. Rubio has 18 percent, that's his highest total so far in the state and it is moved up relatively quickly in recent days, so with 72 hours until the caucuses. Talk is growing that Rubio could be the one surging at just the right time. Could he be the big surprise?

Our senior political reporter Manu Raju is OUTFRONT from that rally in Dubuque. And Manu, you're there with the campaign. Obviously they want to act like expectations are low, but do you think they think that they could come in at number two, say, in Iowa?

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Well, I think their campaign officials here are telling me that they would be very happy with a third place finish here, Erin. But they'll be even happier if Ted Cruz does not emerge victorious in Iowa. Their paths on the nomination starts with knocking Ted Cruz out of the way which is why as we saw in Sunlen's piece, this fight is getting increasingly nasty. Once in the view of the Rubio campaign, if Cruz falls off in Iowa, does not win here, he may not win another state until Super Tuesday. And then Rubio can start to consolidate support and become that alternative to Donald Trump.

And after all, that is what we're talking about right now. Who will emerge as the alternative to Donald Trump? The Rubio campaign believes here, if they have a strong third place finish, they can take that into New Hampshire. It starts making the case that they are the candidate who can unite the party and go after Donald Trump. So, as I was talking to campaign officials here for several campaigns here on the ground, it almost seems certain they feel that Donald Trump is going to win on Monday night, which is why you're seeing Ted Cruz redirect those attacks against Marco Rubio to prevent him from getting to second place so he can solidify his second place finish here, Erin. A lot of late maneuvering here. But the bottom-line is that, the question is who will be that person to take on Donald Trump. We may not know right away, but this race could last for weeks on end.

[19:21:36] BURNETT: It's going to be so exciting. Thank you, Manu. And let's go now to our chief national correspondent, the host of "INSIDE POLITICS" John King.

I mean, John, this is an incredible moment to be an American and part of this process. Ted Cruz, Marco Rubio last night just going to war on a lot of things, including their views on immigration. Who got more banged up? Who was worse for the wear?

JOHN KING, CNN HOST, "INSIDE POLITICS": That's a tough call, Erin. We'll know more when we see the entrance polls and talked to voters on Monday night, but it's no question that this issue of immigration used to be a Republican primaries, were about, who is going to cut taxes more? Who is going to shrink government more? In Iowa right now immigration is one of the biggest flash issues. So, what was at play there? If you talk to people back in the immigration reform debate, they would make clear, the advocates of comprehensive reform, they remember Marco Rubio as an ally and Ted Cruz as an enemy.

Yes, Ted Cruz said all those things that were played in the videos in the debate last night, but most of the people pushing for a path to status or past the citizenship, he didn't really mean that he was trying to kill the bill. But he did say them and that's why they were powerful in the debate last night. And as Manu said, you can sense the Cruz campaign is a bit worried because they came back with that very aggressive attack ads today. Why? Because Marco Rubio is the only ones in the mainstream candidate Erin, who is trying to get some of Ted Cruz's votes. Jeb Bush doesn't play much with the evangelicals.

BURNETT: Right.

KING: Chris Christie doesn't play much. But Marco Rubio does try -- he is trying to get a little slice of the evangelicals to go with what you might call the Romney vote in Iowa. We'll see. Immigration is the big issue.

BURNETT: All right. So, the caucus night is coming. Right? You've been on the ground. You've spent a lot of time in Iowa in recent days and weeks. What are you going to be looking at early in the night to decide who is going to have a good night?

KING: As these builds in, here's our 2016 map. And you can see, we don't have any results yet so we're waiting. But we'll call this one 50 shades of red. You see Ted Cruz, Marco Rubio, Donald Trump, all our different candidates. As the counties fill in Monday night, we want to look at where people are winning. I want to go back to 2012 to make the point I'm talking about. It circles over here. In the eastern part of the state, see all this darker red? With the light orange color with pinkish is Ron Paul. But the rest of this is Mitt Romney. In here, is Mitt Romney.

This is where Marco Rubio into a degree, Jeb Bush are fighting it out for the establishment Republican vote. If you see Rubio winning in these places, then he's doing what he needs to do. Getting suburban Republicans to come for. The big test for Ted Cruz is see all this gold? That's Rick Santorum. Rick Santorum remember surprised us on caucus night, caught up to Mitt Romney. If Ted Cruz can fill out the small little counties, that means he's getting those evangelicals. For Donald Trump, Donald Trump tries to get a little bit of everything. He has evangelical support, he has the establishment support.

So, if you see Donald Trump's color popping up in the cities near Cedar Rapids, Dubuque and Davenport, and over by Des Moines and if you see Donald Trump popping up in these rural areas, that means he's on his way to a strong night. That is what's fascinating here. Cruz, Tea Party, evangelicals. Rubio, mostly establishment, a little bit of evangelicals. Trump goes across the board. His supporters across the board. The big question of course is, do the new voters come out? They're the difference.

BURNETT: And like I said, Trump just wants a little bit of everything. Or maybe the right way to say is, he just wants all of everything. All right. Marco Rubio, you know, he's making this bet. Right? I mean, maybe he could surge to number two in Iowa. I know they don't want to play up that expectation. But that could be a game changer for him. Does a path exist for Marco Rubio still to be the nominee for the GOP?

KING: Yes, but it's not easy. And a whole bunch of third place finishes won't get it after win somewhere. So, let's clear the map a little bit. I looked at some private polling by the way in Iowa. This shows Marco Rubio still going up. Trump and Cruz at a flat line. Marco Rubio is coming up. That's why Cruz is hitting him. Because he does seem he is closing the gap right now. So, let's just assume Marco Rubio gets a third place finish in Iowa. Then of course we move on to New Hampshire. We're looking at the 2012 map here. That's why it is filled in.

You know, Mitt Romney won the state with nearly 40 percent. Right now, again in this specially -- in the public polls, in this new private polling, I looked out with a huge sample, so I really thrust it. You have Trump and John Kasich sneaking into second place. What Rubio is hoping for is to get a big enough bounce out of Iowa that he can contest with second place are at worst third place in the state of New Hampshire.

BURNETT: Hmm.

KING: Still though Erin, there's no win there, right? So, you've got to win at some point. So, then where do you go? Well, for Republicans, you go down to South Carolina. Newt Gingrich won it last time. Usually a decisive state, it will not be this time. This Republican race is going to go on longer. You know, Jeb Bush says he is staying in at least through here and he's very well organized. So, right now Trump is way ahead here. Can Rubio get a win there? It doesn't look that way. And then we would go out to Nevada for the Republicans. So, somewhere what he's hoping for is what George H.W. Bush called big moe out of Iowa to shake things up. Because if you look now, it's hard to find Rubio when. But I will tell you this, this will be a different conversation next Tuesday night after Iowa if Rubio has a strong showing.

[19:26:05] BURNETT: All right. It sure will. And of course, as some drop out, where those numbers go. John King, thank you so much.

KING: Thank you.

BURNETT: And don't miss a special hour edition of "INSIDE POLITICS" hosted by John King. That is Sunday morning at 8:00 in that final day before the votes.

And next, the breaking news. A bombshell. Hillary Clinton's top secret e-mails. Turns out the State Department tonight comes out and says, they're not going to release them.

And Jane Sanders and Bill Clinton worlds apart, yet both crucial to their spouses' campaigns. Our special report coming up.

(COMMERCIAL BREAK)

[19:30:26] ERIN BURNETT, CNN ANCHOR: Breaking news tonight that could shake up the Democratic race for president with just 72 hours to go until the first votes are cast in Iowa. Just hours ago, the State Department said nearly two dozen e-mails from Hillary Clinton's e-mail server as classified as top secret. That is the highest level of government classification for e-mails. They're not going to release them because they are this highest level.

There have been other e-mails that he come out that have been deemed on classified at some level. This is the first with the top secret. And as we said, nearly two dozen of them. It's a major announcement.

And our security correspondent Jim Sciutto is OUTFRONT to help us make sense of the significance here.

Jim, we've now got 1,300 emails from her as classified. But these -- these are top secret, as I said, the highest possible level of government classification. This is obviously a significant headline.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: It is.

And this is the first time that you've had that top secret classification. There have been other lower classifications that have been at issue before today. Now, it's top secret.

Now, the State Department says this was the intelligence community that upgraded these e-mails to the top secret classification. State Department also says that they were not marked as such.

But this is still the open question, Erin. Was the information retroactively made classified or was it already classified at the time those e-mails were sent? That is still an open question. State Department says it is investigating that separately. It has not reached an answer on that, so that gets to that excuse that you heard from the Clinton camp which is all this happened retroactively. It's possible some of the information was in fact classified at the time that it was shared.

BURNETT: Which obviously would be crucial. As you said, State Department officials, they have a whole branch looking into whether the information was classified at the time of transmission, which as you said would go to the whole heart of what she said, was categorically not the case.

You know, they've said, she didn't know at the time, this is what we've said. She has no responsibility here. Does she? I mean -- SCIUTTO: The fact is State Department employees do. Government

employees do when you deal with classified information. You are told, you were instructed to treat it very carefully.

We asked the State Department today this very question. Even if the information was not marked as such, would there still be a positive responsibility to look out for it? And Hillary Clinton spokesman, the State Department spokesman said, yes, we as government employees are trained to treat this information carefully. If we see something even if it is not marked, hey, wait a second, that's in a category of information I think might be classified. We have an obligation to say that.

The Clinton campaign says she gets zillions of e-mails, you know, some of this stuff was pretty low level stuff. You know, she wouldn't have automatically known, but that's something that still has to be decided.

BURNETT: But this obviously is top secret. So, you can't have a higher classification. So, if it appeared low level to her, it would seem something was off in their assessment of it or in their classification system. I mean, what would be the kinds of information that could have been in a top secret e-mail?

SCIUTTO: Well, what could have been when you typically have top secret, you're talking about things like a drone program for instance, that is very secret or intercepted communications. This goes to what the intelligence community calls sources and methods. So, very secret ways of gaining information.

Now, it doesn't necessarily means top secret information includes that stuff, but it could. To be fair here, the Clinton administration has said one of these e-mails that has come up referred to a "New York Times" article that was already in the public domain. But the question is, do all of these fall into that category? That's still an unanswered question.

BURNETT: All right. Jim Sciutto, thank you.

I want to go straight to Brianna Keilar, senior political correspondent.

Brianna, this is coming just 72 hours before the Iowa caucuses. You are on the ground, with the Clinton campaign. How are they responding to this bombshell announcement?

BRIANNA KEILAR, CNN SENIOR POLITICAL CORRESPONDENT: We've heard this is over-classification run amuck. Of course they're saying she did nothing wrong, but there's certainly a concern on the part of the campaign how this looks here just a few days before the Iowa caucuses.

The White House had to answer for this today. Obviously, President Obama has not endorsed a candidate, but it's pretty well know that he sees Hillary Clinton as really the best candidate to continue his work in the White House. Press Secretary John Earnest today pointing out this DOJ, this Justice Department inquiry into her e-mails, they're saying she's not the subject of this. She would have received e- mails, not just sent them, when it comes to her account.

[19: 35:00] Hillary Clinton telling NBC News she did nothing wrong.

(BEGIN VIDEO CLIP)

LESTER HOLT, NBC NEWS: Anything could happen. Indictments could happen. Why shouldn't people, as they weigh the electability question, worry about this hanging over your head as you march forward?

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Because the facts have remained the same. There was never any information sent or received that was marked classified to me.

(END VIDEO CLIP)

KEILAR: But that also is one of the issues that you heard Jim describing right there. Just because something was not marked classified doesn't mean that it was not indeed classified. It still could be a violation certainly.

So, this argument that you're hearing, Erin, coming from the Clinton campaign one of legality. On the ground talking to supporters or people who are still making up their mind here in Iowa, you know, there's this -- they don't necessarily discern between legality and propriety. And we've heard from a lot of people, epically some -- I've been hearing from young people who tend to go more towards Bernie Sanders, is it's not just about whether Hillary Clinton would be indicted or not. Their concern is about her trustworthiness. We've seen her be hit in the polls over this email situation, and it is something that is on the minds of voters in Iowa and beyond.

BURNETT: Brianna, thank you very much.

I want to go to now to our chief political analyst, Gloria Borger.

I mean, Gloria, let's get to the heart of this, right? So, you come out. You've got these e-mails that are now top secret, first time, highest level of classification. So, that's a significant development.

And then, they say, all right, maybe the emails weren't classified at the time, but the information within may have been. So, at the least, is this something that people should be asking about her judgment? Why would she not have noticed that? You heard Jim report the State Department says it would be incumbent on a State Department employee to have that judgment.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, you know, one of her greatest defenders in the Senate, Senator Dianne Feinstein, ranking member of the Senate intelligence committee came out and defended her just a few moments ago and said, none of these e-mail chains were talking about actually originated with Hillary Clinton. So, how can you hold her responsible when she may just have been a recipient of this? We have no idea. I spoke with a Clinton adviser about whether she responded or whether

it was labeled. But stepping back a moment here, the political problem for Hillary Clinton right now is not within the Democratic Party and those primary voters. She has more than a 70 percent trust rating with Democrats. OK? Democrats trust her. They trust Bernie Sanders maybe a little bit more, but they trust Hillary Clinton an awful lot.

Her problem would be if she we were to become the nominee and she were to move into the general election mode and then you have those independent voters and those Republican voters who don't trust her. And so, she would have to convince them that she is trustworthy. What she's trying to do right now through all her spokesmen is say, I'm into the middle of a bureaucratic mess, the State Department, and these, you know, intelligence agencies can't decide what's classified and what's unclassified.

But at the very base of it is a mistake she made and that she's admitted that she shouldn't have had a private e-mail server, period, for official State Department business.

BURNETT: You heard Brianna say she's been talking to voters. Is it legally OK versus what's the right thing to do? They don't care about that distinction. They want somebody who is going to do the right thing.

And, of course, Donald Trump has just weighed in to this. Let me read the tweet to you.

BORGER: Shock.

BURNETT: He has and here's tweet. The new e-mail release is a disaster for Hillary Clinton. At a minimum, how can someone with such bad judgment be our next president? This is something that it sounds like Brianna saying voters on the ground, actually, it's a question they share.

BORGER: Sure, I think it is a question. I think part of it is Clinton fatigue. The Clintons have been around for decades. This is an issue that's kind of hung over their heads for an awfully long time and this doesn't really help at all. The campaign had a call this evening with surrogates giving them talking points about how to address this issue because they're clearly worried about it.

If I were a Republican candidate, I would do what Donald Trump is doing. I would say this is a matter of judgment. Should she have had this private server? It's a question she's answered in the past and she's said she's made a mistake. She's going to clearly have to answer it for a very long time.

BURNETT: All right. Gloria Borger, thank you very much --

BORGER: Sure.

BURNETT: -- on that breaking news. And OUTFRONT next, Jane Sanders and Bill Clinton, they are out in full force until Iowa. Our special report on two very different political spouses.

And Donald Trump takes on FOX News. What's the bottom line? Who won?

(COMMERCIAL BREAK)

[19:43:54] BURNETT: All right. It's just three days before the Iowa caucuses. The candidates are across the statement, stumping for final votes.

It is not just the candidates. Their spouses are getting in on the game as well. Everyone recognizes the guy on the right. Former President Bill Clinton.

Bernie sanders' spouse, his wife Jane, is having a major effect on the campaign trail.

Kyung Lah is OUTFRONT with America's choice 2016.

(BEGIN VIDEOTAPE)

BILL CLINTON, FORMER PRESIDENT: I'm glad to be back.

UNIDENTIFIED MALE: We're glad you're here.

(APPLAUSE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): Back this time as the spouse.

President Bill Clinton joking to a packed hall of admirers this weekend that he can't predict if his wife will win.

CLINTON: It's a weird time out there. I have no idea what's going to happen.

LAH: Just this month, the campaign unleashed the former president on the trail solo for candidate Clinton. He's goliath. She's not, at least not outwardly.

Jane Sanders, down to earth wife of Democratic candidate Bernie Sanders, admits the other spouse might have a leg up.

JANE SANDERS, WIFE OF BERNIE SANDERS: I think he has a little more experience than me in this area.

LAH: That may be purposeful downplay. She met her husband in 1981. He, the new mayor of Burlington, Vermont. She, his campaign worker.

J. SANDERS: I worked with him seven years before we got married. So, I've always been very interested in policy.

LAH: She remains that trusted policy adviser and sounding board.

SEN. BERNIE SANDERS (I-VT), PRESIDENTIAL CANDIDATE: Jane and I have been married for 27 years. All right. I don't know how she did it.

LAH: Through those years and now her defense of him, visible as Black Lives Matter protesters took over a sanders campaign event this summer. Jane Sanders rushing to her husband to advise him.

But perhaps her most potent power is helping Sanders connect on a human level with people packing his events as she told CNN's Gloria Borger.

B. SANDERS: Am I grumpy? I suppose. I have to concede.

BORGER: Is he grumpy?

J. SANDERS: He does doom and gloom speeches. I tell him all the time. You have to bring it back to the hope at the end.

LAH: Jane Sanders doesn't carry Bill Clinton's star power or his baggage.

Earlier this month, a Republican New Hampshire lawmaker heckled Hillary Clinton about her husband's sexual history.

HILLARY CLINTON: You are very rude. I'm not ever going to call on you. Thank you.

LAH: Two spouses, worlds apart, fighting to get into one house.

Kyung Lah, CNN, Los Angeles.

(END VIDEOTAPE)

BURNETT: Fascinating.

All right. OUTFRONT next, Donald Trump who brings in viewers, did his rally win the night against FOX News or not?

(COMMERCIAL BREAK)

[19:50:28] BURNETT: OUTFRONT tonight, Donald Trump claiming victory over FOX News, talking about viewership tweeting, quote, "They say if I would have participated in last night's FOX debate, they would have had 12 million more viewers and would have broken the all-time record."

Well, no one will ever know that's the truth. But here's the fact, there are more people would have watched. That's just a fact.

Brian Stelter is OUTFRONT.

All right, Brian, the numbers are in. What do they say to someone like you who looks at this and knows this bettered than anybody?

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Yes, certainly, nobody in the TV news industry expected Trump to be able to double the ratings. There was no way this debate was going to get 25 million viewers. But there is also no doubt it would have had a bigger audience.

This debate only had 12.5 million viewers, which by GOP debate standards, it's pretty low, that's because Trump has raised the bar. It's very interesting to see all the spinning today about these numbers.

You know who has been quiet about it? Trump. The only thing he said was that one tweet. I think there might be a detente of sorts between him and FOX brewing right now. But, clearly, there are still there's signs of bitterness.

(BEGIN VIDEOTAPE)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Feels like the academy awards.

STELTER (voice-over): Donald Trump declaring victory after taking a big gamble, taking on FOX News, skipping its debate.

TRUMP: I did something that was very risky, and I think it turned out great. I'm on the front page of every paper. I'm getting more publicity than if I --

STELTER: Trump did the unthinkable, tangling with the GOP's favorite news source. After a network spokesperson sarcastically suggested the leaders of Iran and Russia would treat the billionaire unfairly if he was president.

Even on debate day, he was ticking off FOX by retweeting attacks against FOX star Megyn Kelly. One of Trump's fans asking, and this is the bimbo that's going to be asking presidential questions?

Kelly, a respected broadcaster, continues to stay above the pray.

MEGYN KELLY, FOX NEWS MODERATOR: Let's address the elephant not in the room tonight.

STELTER: Trump was negotiating with FOX up until game time.

TRUMP: But I said give $5 million. Make a donation of $5 million to the vets and I'll come and do your debate. And they were really unable psychologically to do that. And I said that's OK. We went out and raised $6 million, which is really good.

STELTER: But FOX is disputing Trump's claims the network pleaded with him.

KEILAR: On the phone apologized? Is that what the phone call was about? Did you get --

TRUMP: Yes, FOX could not have been nicer.

KEILAR: You got an apology?

TRUMP: Yes, and they could not have been nicer. STELTER: When FOX News chief Roger Ailes heard that, the network said it acknowledged his concerns about the satirical observation but did not apologize.

The whole fight now becoming a proxy for how tough Trump would be as president. But his campaign did set expectations too high.

COREY LEWANDOWSKI, DONALD TRUMP CAMPAIGN MANAGER: I think we'll have a much better viewership than what you'll see on the FOX News debate tomorrow night.

STELTER: FOX's Trump-free zone attracted 12.5 million viewers. That's low by Trump debate ratings standards, but still a bit higher than the GOP debate two weeks ago and also higher than the most recent Democratic debate.

C-Span which covered Trump's rally in full doesn't get ratings, but other channels covering the counterprogramming were not nearly as high rated as the debate was.

That's a reason why FOX can feel victorious, too.

(END VIDEOTAPE)

STELTER: And tonight, Erin, there are signs there may be a tenuous truce between these two sides. There's still some bitterness. In the past, they've put aside because there are mutually beneficial reasons for FOX and Trump to get along. After all, he does need to reach out to their conservative viewers.

BURNETT: He sure does.

All right. Thank you very much, Brian.

And now, the executive editor for CNN Politics, Mark Preston. All right. Trump versus FOX. Who won? Your verdict.

MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: What a showdown. Can you have two winners when you have one game? In this case, I think you can.

Look, let's look at FOX News. They stood by their anchor Megyn Kelly. They did not back down when he said he wanted her removed. And you got to give them credit for that. Look, we would do that here at CNN.

At the same time, Megyn Kelly went into this debate strong. She came out stronger.

FOX put on a good debate last night. They should be proud of that. They still got 12.5 million people. Historically, that is amazing if you want to go back to past election cycles.

However, Erin, Donald Trump won as well. He did not stand on stage. He did not take any hits from any of those rivals that would be there. Instead, those hits went to Ted Cruz who is his chief rival in Iowa. So, in many ways, Marco Rubio, Rand Paul did Trump's dirty work last night.

BURNETT: And a lot of the people who support Trump and listening to what he's saying, and say, look, you are standing up against being treated unfairly. They are buying into him framing this as a fight against the establishment. Is that a fair hit? Has FOX News become an establishment player and perhaps out of touch with quite a bit of the Republican base?

[19:55:02] PRESTON: Listen, as Brian said. FOX News is still beloved by conservatives. You'll always have some kind of angst and anger from the grassroots, from folks who don't look at the media and don't look at Washington politicians or Washington Republicans as someone who is in their court.

So, people are still going to be angry at them but it's silly to call them the establishment or call us the establishment for that matter.

BURNETT: And I guess the bottom line then is, if Donald Trump wins Iowa, what does that say about FOX News? The debate didn't ruin him.

PRESTON: No, look. What does it say? It says at this moment in time, Donald Trump has defied expectations. He skipped a debate before the crucial Iowa caucuses. And if he wins, he will declare victory and go in.

But moving forward, though, Erin, he can no longer skip debates. He got away with it this time. It worked out well to his advantage. But going forward into New Hampshire, South Carolina, Nevada, Florida, where these debates are going to take place, that is when he has to debate. He cannot skip out again.

BURNETT: All right. Mark Preston, thank you very much. Live from Des Moines.

And we'll be right back.

(COMMERCIAL BREAK)

BURNETT: Thanks for joining us. Be sure to set your DVR to record OUTFRONT so you can watch us any time. And it is only 72 hours, actually 71 now, I think, until the caucuses. So, Sunday night, 7:00 Eastern, there will be a special edition of OUTFRONT live from Iowa. I look forward to see you then.

"AC360" starts now.