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EARLY START

Flap Over White House "Alternative Facts"; Conway Walks Back Trump Tax Claim; Ethics Lawsuit Against Trump To Be Filed Today; Patriots & Falcons Advance To Super Bowl. Aired 5:30-6a ET

Aired January 23, 2017 - 05:30   ET

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


(COMMERCIAL BREAK)

[05:30:45] CHRISTINE ROMANS, CNN ANCHOR: A stunning admission during the first weekend of the Trump administration. One of the president's top counselors admitting the White House is using its own set of facts to make its own set of points.

JOHN BERMAN, CNN ANCHOR: The first lawsuit set to be filed against the new president. It targets money paid to his hotels and businesses from overseas.

ROMANS: And get ready for two weeks of the insufferable John Berman. The Patriots are heading back to the Super Bowl. Can the Falcons deny them another Lombardi trophy and put us all out of our Berman misery?

Welcome back to EARLY START. I'm Christine Romans.

BERMAN: I'll give you perfectly insufferable, even when it's not football season --

ROMANS: This is true, this is true.

BERMAN: -- just so you know. All right, I'm John Berman. Thirty-one minutes past the hour right now. When I say it's Monday, you could call that a fact. If I called it Tuesday, well, you could say that is untrue. Or, if you're the White House you might call it an alternative fact.

New questions this morning about the Trump administration's relationship with veracity and, apparently, the president was none too happy after a "New York Times" reporter tweeted a photo from this inauguration, showing the crowd was smaller than 2009. He sent the White House press secretary -- the president did -- Sean Spicer to the briefing room to complain.

(BEGIN VIDEO CLIP)

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: Photographs of the inaugural proceedings were intentionally framed in a way, in one particular tweet, to minimize the enormous support that had gathered on the National Mall. This was the largest audience to ever witness an inauguration, period, both in person and around the globe.

(END VIDEO CLIP) BERMAN: Now, several of Spicer's claims were false but White House Counselor Kellyanne Conway has a different way of describing them.

(BEGIN VIDEO CLIP)

CHUCK TODD, nbc HOST, "MEET THE PRESS": You did not answer the question of why the president asked the White House press secretary to come out in front of the podium for the first time and utter a falsehood. Why did he do that? It undermines the credibility of entire White House press office --

KELLYANNE CONWAY, COUNSELOR TO THE PRESIDENT: No, it doesn't.

TODD: -- on day one.

CONWAY: Don't be so -- don't be so overly dramatic about it, Chuck. What is -- you're saying it's a falsehood and they're giving Sean Spicer -- our press secretary gave alternative facts to that. But the point really is --

TODD: Wait a minute, alternative facts?

CONWAY: -- that there is --

TODD: Alternative facts are not facts, they're falsehoods.

(END VIDEO CLIP)

BERMAN: A lot of people watched the inauguration, that's for sure. What's also for sure is this is probably not something that matters to the American people right now. Sean Spicer is set to give his first official White House press briefing at 1:30 this afternoon. He will, we think, take questions today. He did not on Saturday.

ROMANS: Kellyanne Conway made more news overnight when she walked back earlier remarks about Donald Trump's tax returns. On Sunday morning, Conway said that President Trump will never release his tax documents. Conway told "ABC NEWS" the issue was "litigated all through the election." She said, "People didn't care." But last night she revised that. She returned to the campaign's earlier position that President Trump is under audit and has been advised by accountants and lawyers not to release the tax returns. What she did not say is whether he will release the tax information once the audit is finished.

BERMAN: And, in just a few hours, the president will be hit with a lawsuit. The group, Citizens for Ethics and Responsibility in Washington or CREW, for short, is filing a suit today. The group claims that the president began violating the Constitution the moment he was sworn in because his businesses accept money from foreign governments. For the latest, we turn to CNN justice reporter Laura Jarrett in Washington. Good morning, Laura.

LAURA JARRETT, CNN JUSTICE REPORTER: Good morning, John. So the foreign emoluments clause is a provision in the Constitution that you don't hear about very often, but essentially, it prohibits the president from accepting items of value from a foreign official without congressional approval.

As we know, President Trump has a stake in hundreds of businesses and partnerships all over the world. And so, in the months leading up to Inauguration Day, ethics experts came forward and asked him to divest himself from all of these holdings to avoid an emoluments problem, but he refused and opted to keep an ownership stake in The Trump Organization. But now that Trump is president, the plaintiffs in this case will say that he illegally receiving cash and other favors from foreign officials by virtue of keeping that ownership stake.

So when a foreign diplomat stays in his D.C. hotel or the Bank of China makes a lease payment for its spot in Trump Tower, that violates the Constitution. And we haven't heard anything from the White House on this yet but Eric Trump spoke out yesterday saying, "This is purely harassment for political gain and, frankly, I find it very, very sad."

[05:35:11] BERMAN: You know, what about the legal possibilities here? Do you think a judge is likely to let this go forward?

JARRETT: Well, the emoluments clause isn't something you hear in federal court every day and so there is a bit of a debate going on right now among legal experts on how it's going to apply in this context. Some say that paying your hotel bill doesn't violate the Constitution. Others say no, this is exactly what the framers were getting at because they were trying to -- they were worried about foreign influence or corruption infiltrating the U.S. government.

But the main hurdle here will be whether the plaintiffs have something called "legal standing" to come into federal court. You have to show that you've been harmed or injured in some way, so that could be a challenge for the plaintiffs in this case. It also appears one of the main goals may be for the plaintiffs to get the tax return, something we've heard a lot about, so that will be something to watch.

BERMAN: Yes, it will be interesting to see over the coming days and weeks to be sure. Laura Jarrett, thanks so much.

JARRETT: Thanks.

ROMANS: All right. All this caps a tumultuous first weekend in office for President Trump. He started on Saturday with a visit to CIA headquarters in Virginia, giving remarks that focused at least as much on scoring political points as they did on intelligence.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I have a running war with the media. They are among the most dishonest human beings on earth and they sort of made it sound like I had a feud with the Intelligence Community. And I just want to let you know the reason you're the number one stop is exactly the opposite. I get up this morning and I turn on one of the networks and they show an empty field. I said wait a minute, I made a speech, I looked out. The field was -- it looked like a million, million and one-half people. They showed a field where there were practically nobody standing there. (END VIDEO CLIP)

ROMANS: All right. The president denying a feud with the Intelligence Community. He denies that there's a -- he says that the media has created this feud with the Intelligence Community but he is on the record with harsh words during and, especially, after the campaign. Just a few weeks ago he accused intelligence officials of acting like Nazis, claiming they were behind a smear campaign against him.

The president's remarks Saturday about the media and the inauguration crowds spoken in front of the wall of stars honoring CIA officers killed in the line of duty, that drew a furious response from the recently-departed CIA director John Brennan.

BERMAN: Brennan's spokesman said in a statement that he, "deeply saddened and angered at Donald Trump's despicable display of self- aggrandizement in front of the CIA's Memorial Wall of Agency heroes." The statement says, "Trump should be ashamed of himself."

Back at the White House the president, he's talking about policy this week starting with the central promise of his campaign. He wants to renegotiate parts of the North America Free Trade Agreement, NAFTA. He has meetings planned with the leaders of Canada and Mexico, and this morning the president is scheduled to sign some executive orders. We don't know exactly what they are yet but that could be very, very interesting. And the later today he meets with congressional leaders at the White House.

Let's talk about what we saw this weekend and what we will see today. We're joined by "CNN POLITICS" reporter Eugene Scott here with us in New York.

ROMANS: Good morning.

BERMAN: And, Eugene --

EUGENE SCOTT, CNN POLITICS REPORTER: Good morning, guys.

BERMAN: -- you know, a lot of people were wondering why would Sean Spicer come out this weekend and say the things he said -- things that weren't true about the crowd size there -- a day after the inauguration? Reince Priebus, the White House chief of staff, he was pressed on this over the weekend and I think what he says provides some light on this. Let's watch.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX HOST, "FOX NEWS SUNDAY": On the left, you've got the Obama inaugural crowd. On the right, you've got the Trump inaugural crowd. Which one is bigger?

REINCE PRIEBUS, WHITE HOUSE CHIEF OF STAFF: Listen, that -- you're also not saying that that picture was taken before he was even speaking. I mean, you can -- you could --

WALLACE: I was there.

PRIEBUS: I can take a picture of the Mall right now --

WALLACE: I was there in the Mall. I mean, let me say first of all --

PRIEBUS: I was there too, Chris.

WALLACE: -- I think this is a ridiculous conversation --

PRIEBUS: Right.

WALLACE: -- but there -- but there were huge areas. He said that there were crowds all the way to the Washington Monument.

PRIEBUS: There was. I was sitting there looking. Yes, there was. There's an obsession by the media to delegitimize this president and we are not going to sit around and let it happen.

(END VIDEO CLIP)

BERMAN: So that, at the end, is the key part. The White House feels there's an effort to delegitimize the president. They're not going to sit around, they say, and let it happen. So what they do is they, you know, fight every little thing and they create a benchmark that is not necessarily where the facts always are.

SCOTT: That's true. You're not going to delegitimize the media by telling things that aren't true. When you put out statements that say this is what happened when that's not actually what happened you're not helping your argument.

The reality is ever since it became clear that more Americans voted against Donald Trump, it became clear that perhaps Russia was involved in the 2016 election, there's been some great sensitivity from the Trump administration about them being in the White House. The fact is they are there now. The American people want to hear what they're going to do moving forward and this was an interesting take to take in your first weekend in the White House.

[05:40:11] ROMANS: But it got in the way of the things that are the policy things. It got in the way of sort of acting presidential, honestly, when you're fighting over crowd sizes --

SCOTT: Yes.

ROMANS: -- you know. And that -- by the way, a tweet or 20 seconds on television in a sea of coverage of his speech and his first day in office and what's he wanted to do, and the fact that his confirmation hearings may be slow-walked by the Democrats, you know. I mean, focusing on that one small thing just derailed so many of the other things they wanted to be talking about. There are critical confirmation votes later today.

SCOTT: Yes.

ROMANS: Mike Pompeo for CIA. Also Rex Tillerson. BERMAN: And committee -- committee vote for Rex Tillerson.

ROMANS: A committee vote for Rex Tillerson, and he's looking more likely to get through so there is some progress on the confirmations today.

SCOTT: There is. We've seen McCain and Graham both come around. They were both two major critics of Tillerson because they were concerned about his relationship with the Russian government and about Vladimir Putin, considering that he received the Order of Friendship, I believe. But I think they just want to get this person through, not cause any more trouble for the Trump administration, and just move forward with the developing policy that they think will put American first, as Trump would say.

BERMAN: And he has an opportunity this week to show that he is getting things done.

SCOTT: Sure.

BERMAN: He's going to sign some executive actions this morning. We're not sure what they are. And then every day this week we imagine we will see something -- some form of action which, presumably, is what Americans want to see.

SCOTT: Absolutely. Now, we know when he campaigned he said on day one -- and technically, this is not day one -- he would sign an executive order deporting undocumented immigrants. He also said he would sign an executive order ending the resettlement programs for refugees from Syria. I don't think many people are expecting him to actually follow through with those campaign promises today, but I do think some people want to know why you did not do what you said you would do.

ROMANS: I think the first things are really going to be -- these meetings are really important with Theresa May, the prime minister.

SCOTT: Right.

ROMANS: And I also think that the meetings these guys scheduled between Canada and Mexico are going to be very clear. That realigning America's trade interest is going to be a real big part of these beginning days of his administration. All right, Eugene Scott --

SCOTT: Yes.

ROMANS: -- so nice to see.

SCOTT: You all, as well.

ROMANS: Take it easy. All right, time for an early start on your money. President Trump has called the North American Free Trade Agreement (NAFTA) the worst deal in trade history. When he meets with the leaders of Mexico and Canada this week, how exactly will he try to revamp it? One promise is tariffs on imports, including a 35 percent border tax,

as he has said, on companies that manufacture in Mexico and send the goods here to the United States. President Trump claims cheap imports are killing millions of U.S. manufacturing jobs but trade experts warn stiff tariffs could risk jobs on both sides of the border. An estimated six million U.S. jobs depend on trade with Mexico. And while both Canada and Mexico say they're open to modernizing NAFTA, Mexico said it would retaliate if hit with a border tax.

The president may face opposition closer to home. A majority of Republicans support free trade. A Senate bill introduced Friday would require the president to get congressional approval to withdraw from trade deals. He can also expect pushback from the U.S. automotive and agriculture industries, two sectors that many say have done very, very well under NAFTA.

BERMAN: All right. This week, a big week of meetings and a big week of firsts for the president, including his first meeting with a foreign leader and some other key conversations to tell you about. We'll give you the diplomatic agenda next.

(COMMERCIAL BREAK)

[05:47:10] ROMANS: Donald Trump -- President Donald Trump plays host to the first world leader of his presidency when British Prime Minister Theresa May visits the White House Friday. She swept into office on the heels of the Brexit movement. The prime minister says she wants to build on the special relationship between the U.S. and the U.K., focusing on trade and the importance of NATO. But can she and President Trump keep things stable?

Let's go live to London and bring in CNN's Nic Robertson. Good morning, Nic.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, good morning, Christine. Well, certainly for Theresa May, a hugely important moment. She really wants to improve relations with the United States so that she can look forward to getting a better trade deal with the United States when Britain leaves the European Union.

And if she can get some sense of that from President Trump, then she can at least send her negotiators into the negotiations to leave the European Union with something in their pocket, if you will. She's told European leaders that no deal is better than a bad deal. That she'll turn Britain into some kind of tax haven. Very strong language so, obviously, getting on with President Trump on this will be important.

There'll be issues that they don't see eye-to-eye on, on NATO. She believes that NATO is important to the security of the United States, Europe, Britain, et cetera. Donald Trump has said that he thinks NATO is obsolete. She'll, perhaps, try to persuade him otherwise and that the -- that the NATO nations can all pay their way, which seems to be one of his principal concerns.

The people here are talking about, you know, this special relationship they talk about. Ronald Reagan's relationship with Margaret Thatcher at that time and now, perhaps, a similar relationship between Trump and May -- Christine.

ROMANS: A couple of exciting (INAUDIBLE) at the very beginning right now. All right. Thanks so much for that Nic Robertson.

BERMAN: All right. President Trump also invited the Israeli Prime Minister Benjamin Netanyahu to the White House next month. The two leaders spoke by phone over the weekend. The president called their conversation "very nice." The new administration has restated its commitment to relocating the U.S. Embassy from Tel Aviv to Jerusalem, although White House Press Secretary Sean Spicer seemed to suggest that might not happen anytime soon, exactly.

Let's get the latest from CNN's Ian Lee, live in Jerusalem. And this embassy discussion, Ian, is one that everyone will be watching very, very closely.

IAN LEE, CNN REPORTER: That's right, John, and if you look at Israeli newspapers today, it's on all the front pages, the discussions about this. We also heard from the mayor of Jerusalem, Nir Barkat, saying that he would help smooth the transition of transferring the embassy from Tel Aviv to Jerusalem. But, Sean Spicer pumping the brakes a bit, said that they're only in the beginning stages of even discussing this subject.

The Palestinians obviously against this. They have threatened to revoke their recognition of Israel and all agreements with Israel. President Mahmoud Abbas was in Jordan to talk to King Abdullah. King Abdullah said he's going to rally regional leaders and international leaders to help prevent this. They believe that the status of Jerusalem should be determined in negotiations.

[05:50:14] This could also have negative consequences for Donald Trump. He is riding a wave of popularity right now with many Arab leaders who thought the Obama administration neglected them. This could translate very badly on the Arab street, which then would go the leaders if this move goes forward. And we need to remember, many presidents have made this promise before, none of them have done it. We'll see if Donald Trump can change that or will change that.

BERMAN: He made his -- he made his position very, very clear, though, before, during and after the campaign. All right, Ian Lee, thanks so much.

ROMANS: All right. Time to take a look at what's coming up on "NEW DAY" in just a few minutes. Alisyn Camerota joins us this morning. Hi, there.

ALISYN CAMEROTA, CNN ANCHOR, "NEW DAY": Hey, guys, great to see you. We have a lot to talk about on "NEW DAY" including President Trump's ambitious plans for his first week in office. Those include Israel. Also, there's a group of former White House ethics lawyers that, today, are suing President Trump because they say -- they accuse him and his businesses of taking money from foreign interests. We will have one of those ethics lawyers on. Also, of course, we'll be bringing you all of the developments about

what's happened since that contentious exchange between the press secretary, Sean Spicer, and journalists and what alternate facts mean. It's hard for me to talk over Chris' munching on his breakfast here. You're having your pomegranates?

CHRIS CUOMO, CNN ANCHOR, "NEW DAY": Pomegranate seeds.

CAMEROTA: Chris is very into antioxidants because he knows the energy it's going to take to cover all of this today.

BERMAN: We saw his fleshy arm inside your shot so now we get to see the rest of him, which is delightful.

CAMEROTA: Fleshy?

CUOMO: Fleshy? That's not nice, John. That hurts my feelings when you say things like that. I know you're feeling good about yourself because your Patriots won yesterday.

CAMEROTA: Oh, you're right. It is a little fleshy.

CUOMO: It's not fleshy.

BERMAN: Go back to your seeds.

CUOMO: That means that it's like a grandma arm.

BERMAN: Go back to your seeds. All right, guys, we'll see you in a little bit.

ROMANS: All right. Remember those smoking Samsung phones? Well, the company has finally figured out what caused the flames. We're going to get a check on CNN Money, next.

(COMMERCIAL BREAK)

[05:55:20] BERMAN: Super Bowl LI is set and this looks like a good one. The New England Patriots, they will be in the Super Bowl for a ninth time. That is a record. The problem is they're playing the Atlanta Falcons, who look just unreal. This will be their second trip to the big show. Tom Brady, he was really good last night. He threw for 384 yards, three touchdowns, 36-17 win over the Pittsburgh Steelers.

That throw to Chris Hogan -- one of two touchdowns to Chris Hogan -- he looked pretty darn good, himself. He set a Patriots' record for receiving. This was my favorite play. This pitch back right there for a touchdown pass. Thirty-nine-year-old Tom Brady looking for his fifth Super Bowl ring. That would be a record. And don't forget, Brady was suspended for the first four games this season. NFL Commissioner Roger Goodell, he didn't seem to think it was necessary to go to Foxborough to see this happen this weekend. He was jeered there.

Now, the Patriots, they played the Falcons, who took the NFC crown in convincing fashion. They just annihilated the Green Bay Packers 44- 21. It wasn't even that close. I mean, this was a blowout. MVP frontrunner Matt Ryan, he threw four touchdown passes. He ran for a fifth. He could have had eight touchdown passes the way he was playing. This is Atlanta's first Super Bowl appearance in 18 years. That game will be February 5th in Houston.

ROMANS: All right, let's get an early start on your money this Monday morning. The global markets mostly lower. Investors -- honestly, they're awaiting the first week of President Trump in office and what the priorities will be on trade, and on pro-growth policies, and on taxes. Wall Street was optimistic Friday. The markets closed higher after President Trump's speech.

Also this week, a slew of big-name earnings, including AT&T, Microsoft, Starbucks, Ford. McDonald's, I think, is today. Friday we'll see how healthy the U.S. economy was during the final last few months of President Obama. We'll get the fourth reading of GDP. Right now in the U.S. futures are lower.

Samsung now knows the cause of those Galaxy Note 7 fires -- batteries. The company blames poorly designed and manufactured batteries for overheating the phone. You know, the announcement Monday is the result of a months' long investigation. Samsung initially blamed one of its battery suppliers but a recall failed to stop the phones from burning and eventually the company killed the product entirely. The ordeal was a disaster for Samsung, wiping out billions of dollars of profit around the world.

More bad news this morning for Yahoo. The company facing a government probe over its data breaches. That's according to "The Wall Street Journal." The SEC investigating whether the company's two big hacks should have been reported sooner. You know, last year they announced -- Yahoo announced 500 million users were compromised in 2014, but the company still has not explained why it waited two years to make that new public. We will see if the affects earnings, which come out after the market closes today.

BERMAN: You know, it's really interesting. "The Wall Street Journal" had a piece saying that the uncertainty that you normally would think of in a transition, that hasn't seemed to affect the markets at all. But now, what the markets want to see is actually what happens.

ROMANS: I know. The "show me the money" phase, I keep calling it. You know, we know that the markets have been very enthusiastic about what a President Trump will be for the economy and now they wait to see the policies as they go. Thanks for watching us this morning. I'm Christine Romans.

BERMAN: I'm John Berman and that's all for EARLY START. "NEW DAY" starts now.

(BEGIN VIDEO CLIP)

TRUMP: I have a running war with the media.

SPICER: This was the largest audience to ever witness an inauguration, period.

UNIDENTIFIED MALE: That's certainly not the case. This was not the biggest attendance at an inauguration in U.S. presidential history.

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: I'm optimistic we'll get everything with the cabinet.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Beware of the teddy bear, Mr. Trump. Putin will change his tone.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: We have never had a CIA director confirmed on the first day.

TRUMP: You will be getting a total star, a total gem.

CONWAY: There are plenty of people -- you saw the march yesterday -- trying to delegitimize this president.

GLORIA STEINEM, AMERICAN FEMINIST: The Constitution does not begin with I, the president. It begins with we, the people.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CAMEROTA: We want to welcome our viewers in the United States and around the world. This is NEW DAY. It's Monday, January 23rd, 6:00 here in New York.

Up first, today, President Trump plans to focus on his ambitious agenda as he begins his first week in office. This, after the president's top advisers had contentious exchanges with the press over the size of inauguration crowds and trying to pass off false claims as "alternative facts."

CUOMO: Come on, let's start simply. Here is a fact. The president is going to get his first legal challenge, an ethics lawsuit claiming he's violating the Constitution over his business conflicts. Remember, a big part of this quest for information is because the president refuses to release his taxes. And now, there's a question about whether that promise to release them eventually was just a sham.

We have it all covered. Let's begin with Athena Jones live in Washington with the latest -- Athena.

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Good morning, Chris.