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AT THIS HOUR WITH BERMAN AND MICHAELA

Iran: Will Continue Missile Tests, Despite Trump's "Notice"; Schwarzenegger Responds To Trump's Call For Prayer; Trump, Australian Prime Minister Butt Heads In Heated Call; Graham: Bipartisan Effort To Pass New Russian Sanctions. Aired 11-11:30a ET

Aired February 2, 2017 - 11:00   ET

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


COY WIRE: -- fly here in Houston.

CAROL COSTELLO, CNN ANCHOR: Whatever. Cory Wire, thanks so much. Go falcons. Thank you for joining me today. I'm Carol Costello. "AT THIS HOUR WITH BERMAN AND BOLDUAN" starts now.

JOHN BERMAN, CNN ANCHOR: Hello, everyone, I'm John Berman, for now.

KATE BOLDUAN, CNN ANCHOR: I'm Kate Bolduan, everybody. I'm still here, for now. Breaking news from everywhere right now, the standoff with Iran escalating moments ago. Tehran vowing to continue firing missiles despite Trump saying the Iranians are, quote, "officially on notice."

On top of this, tension rising with allies Australia and Mexico after reports of heated phone calls between President Trump and the leaders of those countries.

BERMAN: All this as his brand-new secretary of state, Rex Tillerson, just addressed his department for the first time. It is now his job to address not just the conflicts with these allies and adversaries, but also the conflicts within his own department, where a remarkable 900 workers just submitted a letter of dissent over that controversial travel ban. Even if he's able to do all that, there is now the issue of escalating tensions with Arnold Schwarzenegger.

BOLDUAN: He's not kidding. Let's begin with Iran, on notice, it's not going unnoticed, but apparently it is going unheeded. Just a day after the White House put Iran on notice for its weekend ballistic missile test, Iran says it will, quote, "vigorously continue" with its missile activity.

BERMAN: It is just the kind of activity that national security adviser, Michael Flynn, called a provocative breach of a U.N. resolution. CNN Pentagon reporter, Ryan Browne, is live with the very latest. Also with us is Retired Brigadier General Mark Kimmitt. He was the assistant secretary of state for political military affairs under George W. Bush. Ryan, bring us up to speed on the back and forth here.

RYAN BROWNE, CNN PENTAGON REPORTER: That's right. So you know, we saw the missile test that Iran conducted, medium range missile test. Now the Pentagon considered that test to be a failure, but it's still raised, you know, tensions within the relationship.

That along with what Mike Flynn said was Iranian-backed rebels targeting a Saudi warship in the Red Sea, and causing severe damage to that ship as kind of escalated tensions and we are seeing the diplomatic back and forth with the Iranians vowing to continue missile tests.

Because they say it doesn't fall within the technical restrictions of the deals and the U.N. resolutions because in their words the missiles are not nuclear capable.

BOLDUAN: All right, Ryan, thank you for that. Bringing us up to speed on where we are in this moment. So General, when you hear this back and forth, you see what both sides are saying, on notice, Iran is being put on notice, that coming from first Michael Flynn, his national security adviser, and then from Donald Trump in a tweet. What does that threat mean?

BRIGADIER GENERAL MARK KIMMITT, U.S. ARMY (RETIRED): Well, I think what it means is that this administration is setting boundaries very early in the administration, as to the behavior of the Iranians. And what they're saying is, we are not going to put our cards on the table, what we're prepared to do, that's strategic ambiguity, they believe that's worthwhile.

Donald Trump had complained about the fact that we showed all our cards all the time. And what they're just trying to do at this point is say, we're going to do what is necessary, but we're not going to tell what you we're going to do ahead of time.

BERMAN: What does strategic ambiguity mean here, though, General? Because it's not like the Obama administration condoned these missile tests, they were against them, they just didn't really do anything about them. If President Trump is in fact going to do something about it other than put them on notice or double secret probation, what would that mean, what would doing something about it mean?

KIMMITT: Look, there are an entire range of actions that the United States can take, from diplomatic to special operations, observance. They can do reconnaissance. There's an entire range of options that I have no doubt the military planners and the diplomatic planners are working on right now.

We could sit here for a half hour and talk about those different options. But I believe that Mike Flynn and the president want the Iranians to keep guessing on what could happen here and understand the consequences of what could happen if they continue these provocative strikes.

BOLDUAN: I mean, General, for folks who don't know, me included, what do these ballistic missile tests signal to you?

KIMMITT: Well, again, what it signals to me is that the Iranians are testing President Trump and his administration from the outset. They want to see where their boundaries are, how far they can go, and how prepared the United States is to respond. BERMAN: And the timing no accident, by the way. The Iranians what they say, General, and I think it's a term of diplomatic art, they say, well, this doesn't violate the U.N. resolution because these missiles don't carry nuclear warheads because we don't have a nuclear program. But in fact, the ballistic missile for all intents and purposes, it could carry nuclear weapons if they existed, correct?

KIMMITT: It certainly could. I think what they're trying to do is find a loophole in the U.N. resolution and the only people they're convincing of that loophole is themselves.

BOLDUAN: General, thank you so much. Great to have you as always.

KIMMITT: Thank you.

BERMAN: All right, there is hitting the ground running and then there is the agenda of the new secretary of state, Rex Tillerson, the one that he is facing this morning in his first hours as America's top diplomat in addition to the new tensions with Iran, we were just talking about.

[11:05:07]Some long time U.S. allies, we are talking about some of the country's very best friends, are getting their first taste of diplomacy Donald Trump style and they may not like it very much.

We're learning that the president's first calls to the leaders of Australia and Mexico took a pretty contentious turn. This is how President Trump addressed the issue a short time ago when speaking at the National Prayer Breakfast.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: When you hear about the tough phone calls I'm having, don't worry about it. Just don't worry about it. They're tough. We have to be tough. It's time we're going to be a little tough, folks. We're taken advantage of by every nation in the world, virtually. It's not going to happen anymore. It's not going to happen anymore.

(END VIDEO CLIP)

BOLDUAN: For more on this, let's bring in right now CNN's senior White House correspondent, Jeff Zeleny. So Jeff, it seems like you're hearing one thing from the White House on this and then a different story is leaking out after.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, essentially the president confirming those tough phone calls that we've been talking about all morning that really have certainly have rankled the diplomacy at least the normal course of diplomacy. But nothing seems normal these days.

And particularly these courtesy phone calls, it's very common for leaders of different countries to have their first phone calls. But we are learning, as "The Washington Post" first reported that these courtesy calls became confrontational.

But there you saw the president addressing it directly, he says he is going to do that type of straight talk to these foreign leaders, but it certainly makes the new job for the new secretary of state much more difficult here.

This all came out of last Saturday's round robin of phone calls. The president talked to five different foreign leaders, but that Australian phone call, we're told, was the most confrontational of all. Australia, after all, is an ally of ours, but it's a different moment for tough talk here in Washington.

BERMAN: Yes, not just an ally, I mean, a really, really close ally.

BOLDUAN: Like an ally, not just an ally.

BERMAN: Capital "a." Not just for Australia, but for ally, and you know, there is not just tensions with these friends and adversaries, Jeff. But of course, there is the very contentious issue of how the president is getting along with Arnold Schwarzenegger, who he discussed at the national prayer breakfast this morning. There's already been this response.

ZELENY: So interesting, so important that he called for divine intervention actually on the ratings of "The Apprentice" under Arnold Schwarzenegger at the prayer breakfast, at the very beginning of it, trying to use a bit of humor but certainly asking for God's blessing for the ratings. Let's listen.

(BEGIN VIDEO CLIP)

PRESIDENT TRUMP: It's been a total disaster and Mark will ever, ever bet against Trump again. And I want to just pray for Arnold, if we can, for those ratings, OK?

ARNOLD SCHWARZENEGGER, FORMER GOVERNOR OF CALIFORNIA: Donald, I have a great idea. Why don't we switch jobs? You take over TV, because since you're such an expert in ratings, and I'll take over your job. Then people can finally sleep comfortably again?

(END VIDEO CLIP)

ZELENY: So that was a realtime response then from Arnold Schwarzenegger responding within minutes, saying, that he would be happy to become president. There is one problem with that, the U.S. Constitution would not allow that, only American-born people can be president, which Governor Schwarzenegger is not. But certainly an interesting moment of back and forth that I did not think we would be talking about here today.

BERMAN: No, and of course, President Trump, though, has never been a source of concern for him, over where someone was born whether or not they could become president. Jeff Zeleny at the White House. Governor Schwarzenegger had rapid response, the ball is in your court, Mr. President.

BOLDUAN: Again, that was at the National Prayer Breakfast. BERMAN: Let's go back to international relations. We're going to talk about the heated phone call between the president and the Australian prime minister.

CNN international diplomatic editor, Nic Robertson, joins us right now. Australia one of the five I's, U.S.'s closest allies all around the world. It's clear that this discussion did not go as either had planned.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It certainly didn't. I mean, this came on the back of President Trump's announcement that there were going to be restrictions allowing refugees and restrictions on those seven Muslim majority countries coming into the United States.

What the Australian prime minister wanted to get a handle on and wanted to get President Trump to agree on was something that the Australians had agreed with President Obama that 1,250 refugees, mostly from those seven Muslim majority nations, on an island off the coast of Australia, would be taken in by the United States.

That was the agreement with President Obama and Malcolm Turnbull, the Australian prime minister, pushed that point with president Trump. That's where things seemed to go wrong. President Trump later tweeted that it was a dumb deal. But it did seem to end the phone call early, by all accounts.

[11:10:03]Now, the Australian prime minister says he doesn't want to talk publicly about what goes on in those phone calls. He says he thinks they're better off being frank and kept private between the two. However, he did say that the phone call didn't end contentiously. This is how he put it.

(BEGIN VIDEO CLIP)

MALCOLM TURNBULL, AUSTRALIAN PRIME MINISTER (via telephone): The report that the president hung up is not correct. The call ended courteously. And as far as the nature of the discussion, it was very frankly and forthright. I stand up for Australia's interests. I make Australia's case as powerfully and persuasively as I can, wherever I am.

(END VIDEO CLIP)

ROBERTSON: So interestingly, out of this, for this important U.S. ally, Malcolm Turnbull, he now has gone up in the popularity ratings in Australia. Over the weekend, the country thought he was being too weak in his phone call. They wanted to see someone who was tougher on this new travel policy and now they see they've got just that.

BOLDUAN: Pretty interesting. They say they've got just that. You know what I also say, we don't often hear such clear reports of what happens in these phone calls, you just get those "frank and friendly" readouts. A new world we do live in. Nic, great to see you. Thank you so much. With breaking news from many places around the globe right now,

what's the response from Capitol Hill? Earlier I spoke with Republican Senator Lindsey Graham, who as you may remember has never hesitated to take on President Trump. Here is his take on Trump's butting heads with the Australian prime minister.

(BEGIN VIDEOTAPE)

SENATOR LINDSEY GRAHAM (R), SOUTH CAROLINA: The relationship is strong and can withstand a phone call. We'll be fine with Australia. The 1,250 refugees, if they're well-vetted, we can absorb them too. He's been on the job two weeks now, the Australian prime minister seems OK with the way it ended.

Well, you know, the relationship is strong. My dad was stationed in Australia in World War II and I served with an Australian unit in Iraq and Afghanistan so (inaudible).

BOLDUAN: Trump tweeted about that deal that the Obama administration struck with Australia, he called it a dumb deal on Twitter. Dumb deal or not, is that the way to handle it?

GRAHAM: You know, I wish he would sleep more and tweet less, but that's up to him. Whatever he's doing has worked for him. You know, you're still president of the United States, and there's probably better ways to handle this instead of talking about this, we should be talking about Judge Gorsuch.

BOLDUAN: He does like to talk about that. That is in the win column for him, I know you're very supportive of Judge Gorsuch. But let's go to another part of the world because there is a lot going on today. The president and his national security adviser are saying they're formally putting Iran on notice. Those are their words, after its ballistic missile test over the weekend. That sounds like a threat. Senator, from your view, what is the president threatening?

GRAHAM: You know, I don't know. Here is what I would suggest we do, that we impose sanctions on the regime for their violation of the U.N. missile test ban, for what they've done in the region, for capturing our sailors, new sanctions on the Iranian regime for their behavior throughout the region apart from the nuclear program. That's what I would do. I wouldn't put them on notice. I would go to the Congress and say it's now time to punish Iran for all the things they're doing in the region including trying to test a new missile.

BOLDUAN: You know, a senior adviser to the ayatollah put out a statement saying among other things that they're going to vigorously continue their missile activity and also saying that President Trump shouldn't make a toy out of himself, I think is how he put it. Where does this go if here, do you believe?

GRAHAM: The U.N. Security Council passed a resolution telling the Iranians, stop developing missiles, long range and short range missiles that can disrupt the balance of power in the region. Iran has been a bad actor. They've basically toppled four Arab capitals. It's not just

Trump, it's the U.N. itself, their credibility at risk. So here's what I would do. I've had it with the Iranians toppling pro-American governments throughout the region, being the largest state sponsored terrorism, capturing our sailors, flaunting the missile test ban.

It is now time for them to pay a price. They have a pair of twos. We have a full house. I don't want a war with Iran, but we want to make them stop.

BOLDUAN: Right along that line, you want them to stop, but what do you think Trump will do if Iran fires another missile?

GRAHAM: Well, I think the world should not only condemn Iran, but we should have multinational sanctions against the regime for their continued violation of the U.N. Security Council resolutions regarding their missile program.

And I would -- here's what I would tell the president to do. The deal we have with Iran regarding their nuclear program is a bad deal. In 15 years, they can enrich and reprocess and make a bomb without even cheating.

What I would like to see is peaceful nuclear power throughout the Mid-East. This is a chance for Russia, China, the United States, maybe France, to build power plants throughout the entire Mid-East for the Arabs and the Iranians, and we just control the fuel cycle so no one can turn it into a bomb.

[11:15:04]That would be the offer I would make the Iranians. If you want a peaceful nuclear power program, you can have it, but we're not going to give you the ability to enrich and reprocess uranium because you can turn it into a bomb.

BOLDUAN: You've spoken out about the travel ban and called it a self- inflicted wound in the fight against terrorism. The White House right now doesn't even want to call it a ban anymore, after some awkward back and forth. Why not, do you believe? What are they concerned about with regard to it being called a ban?

GRAHAM: Well, I think the enemy has seized upon this. We're treating people all the same. The interpreter helped us in Iraq, and he's a hero in my mind. We've got a young lady from Clemson who is from Iran who graduated from Clemson, works in a startup company in Clemson, South Carolina, beloved by her colleagues and the entire Clemson University community. She was taken off a plane in Dubai. She had a legal visa.

So what I would suggest is that people like her and the interpreter, people who have already been vetted with a visa, they not be treated as if they're terrorists, because they're not. I do support a time out in terms of future refugee flows from these countries until we get better vetting. We sort of screwed this up in the rollout.

BOLDUAN: President Trump had a few choice words for you, not surprisingly, after you spoke out. He called you weak on immigration and that you're always looking to start World War III. What strikes me about the president's response on this one, though, Senator, is that there were a lot of Republicans that were critical of the president's executive order, but he singles out you and John McCain. Why do you think you get under his skin so much?

GRAHAM: I don't know. I look forward to helping the president where we can. It's not being weak on immigration to have a system that can tell the difference between the young lady in Clemson who is a value added product to our country, the interpreter from Iraq, who helped us, and a real terrorist. That's just being logical and having good common sense.

I'm not trying to start World War III. I'm trying to win the war against radical Islam. The worst thing you can do is declare war on the faith itself. The way we've rolled out this executive order, we're catching people in the web that clearly are not terrorists, and that helps the enemy.

So I would try to reform this executive order to focus on the problem, which is future flow coming from unstable failed states, which makes sense to me.

BOLDUAN: But the president isn't acknowledging any fault in the rollout.

GRAHAM: Right.

BOLDUAN: He's still calling it a success. There's no problem with the rollout that they've seen so far. I mean, the president's not going to acknowledge that there was a problem in how they rolled it out. It sure doesn't seem they've shown any openness to reforming what they've put in place so far.

GRAHAM: Well, I think General Kelly and Secretary Tillerson are on the case now. They're actually working with us to try to restore this young lady's visa. She went back --

BOLDUAN: Doesn't the buck stop with the president on this?

GRAHAM: Totally. Here's what I would say. I would say that the rollout was flawed. The idea makes sense. A time out in terms of future flow. But we've got to have a system that can tell the difference between this young lady, and an interpreter, and a potential terrorist. It was screwed up and that happens.

The rollout with Gorsuch was terrific, well done, Mr. President. There's a lot of things he's doing I support. But at the end of the day, when something happens on your watch as president, you're responsible for it. It's his responsibility to fix this system in a way that we can all appreciate. I think he can and I hope he will.

BOLDUAN: Speaking of things that happened on his watch, there are new details out this morning, Senator, about that covert operation in Yemen where one Navy SEAL, Ryan Owens, was killed and a number of civilians were killed as well. You get these briefings, what have you heard about the operation, do you think it was approved with sufficient intelligence and planning?

GRAHAM: Yes. And unfortunately in war these things happen. I really appreciate the fact that President Trump went to Dover, Delaware to be there when the body came home, to show respect for the fallen SEAL, to comfort his family.

I think that goes a long way to our military members, to show that our commander-in-chief cares that much. But yes, I think the operation was authorized properly. These things happen in war.

And I think overall we're going to have more of these operations, not less, because ISIL and al Qaeda are getting stronger, not weaker, in certain parts of the world.

(END VIDEOTAPE)

BOLDUAN: Coming up next, we'll have more with Lindsey Graham, more to this conversation, why he says Russia should be punished, why the senator, though is hopeful about the Trump presidency.

BERMAN: And in just a few minutes, we are going to hear from House Speaker Paul Ryan, this as the Senate continues to try to push through President Trump's cabinet nominees. We will bring you Paul Ryan's remarks live.

Plus violence erupts on a college campus, protesters throwing fireworks, rocks, and more, and then President Trump threatens the university where this all took place.

(COMMERCIAL BREAK)

[11:23:57]

BOLDUAN: One thing the Trump White House has said they want to move on from, investigating Russia's hacks during the election. One person who is definitely not moving on, Senator Lindsey Graham. He's now pushing for a new investigation. I asked him what more he wants to know.

(BEGIN VIDEOTAPE)

GRAHAM: I will never be satisfied until the Congress and the White House work together to punish Russia for trying to interfere with our election. I don't think they changed the outcome, but they clearly tried to manipulate the outcome.

So the current sanctions are in place based on their taking of Crimea. There needs to be new sanctions imposed against Russia for interfering in our election. So I'm working with Democrats and Republicans to pass new sanctions.

I hope the president will embrace them because Russia needs to be punished. I am in charge of the Crime and Terrorism Subcommittee on Judiciary, along with my ranking member, Senator Whitehouse.

We're going to have an oversight hearing regarding the FBI and try to learn from the FBI what Russia actually did, to see if we can validate the intel community's findings and tell the FBI to go after all things Russian and try to figure out how to prevent this in the future.

[11:25:10]BOLDUAN: That's news, that you're going to be pushing this, and I assume in classified briefings, classified hearings --

GRAHAM: Mostly.

BOLDUAN: Are you going to have any open hearings on this maybe?

GRAHAM: Yes. What I want to do is try to get people to come forward and explain what Russia is doing all over the world, not just in our backyard.

BOLDUAN: But even touching on what they're doing in our backyard, do you fear at all that this sets you on a collision course with the White House? Because they want to move on, in their words, from these hacks.

GRAHAM: I promise you this. I will not forgive and forget regarding what Russia did regarding our election. As a matter of fact I have a resolution I'm drafting now, to be offered soon, that says an attack on one party by a foreign entity is an attack on all parties in the United States.

Kind of an Article 5 compact, that we're in this together, that when one party is compromised by a foreign entity, the whole process is compromised. So working with Senator Whitehouse, I want to find out what the Russians did in totality, go wherever the evidence takes us, try to prevent this in the future, and work with my colleagues and the Congress to deter Russian behavior.

If Donald Trump, President Trump, forgives Putin for what he tried to do in the election, then that will scream weakness and the world will get a lot more unstable.

BOLDUAN: What will happens if you send him a sanctions bill and he doesn't sign it?

GRAHAM: Then we'll override his veto. I believe --

BOLDUAN: Do you think you can?

GRAHAM: I don't know. I believe that most Americans are offended by the fact that the Russians did hack into the DNC and Podesta's e-mail. They did leaked this to Wikileaks. It was an effort to compromise and put doubt in our election and they're doing it all over the world.

BOLDUAN: So tomorrow will be the two-week mark for President Trump's presidency. For you right now, are you more or less hopeful about this president since inauguration day, Senator?

GRAHAM: I see a trend that's somewhat hopeful. I think the rollout of Gorsuch was well done. The pick of Judge Gorsuch was a home run. I actually recommended this man to be picked. So I thought the rollout, the pick was great. I think some of the executive orders are long overdue about deregulating the government.

If we can repair the damage done with the executive order and get back on track and have a time out to failed states in the future, then better days lie ahead. The infrastructure bill, I hope that comes soon.

So things are trending a little bit better. I want to help the president where I can. But I'm very intent on being Senator Graham. And Senator Graham would push back against Russia no matter who was president, and I intend to do that.

BOLDUAN: That might be the major bone of contention between you and President Trump. Senator Graham, hopeful though on this presidency, that's the headline. Great to see you, Senator. Thank you as always.

GRAHAM: Thank you.

(END VIDEOTAPE)

BOLDUAN: You can see, if he wants to work with President Trump where he can, but he's still going to be pushing for more investigations into Russia. You can also imagine the amount of pressure that he's under and the fine line that he's trying to walk.

BERMAN: He is one of President Trump's favorite punching bags, there is no question about it. Every time he says something he does risk reaction from the president on Twitter or even out loud. So it will be interesting to see.

BOLDUAN: Yes, what happens to that relationship for sure.

BERMAN: All right, the president says it is time to be a little tough, but he also asked for prayers, not for world leaders, but for Arnold Schwarzenegger and his "Apprentice" ratings.

(COMMERCIAL BREAK)