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EARLY START

Trump Aides Were in Constant Touch with Russia; Flynn Fallout; Mattis in Brussels to Meet with NATO Allies. Aired 4:30-5a ET

Aired February 15, 2017 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:31:45] ALISON KOSIK, CNN ANCHOR: Breaking overnight, new controversy for president of the United States Trump dating back to his time as candidate Trump. Top advisers to his campaign were in frequent contact with Russian officials. So, what were they talking about?

JOHN BERMAN, CNN ANCHOR: And new questions over Michael Flynn's departure from the White House. Why was the vice president kept in the dark about the probe into Flynn's conversation with Russia about sanctions?

Welcome back to EARLY START, everyone. I'm John Berman.

KOSIK: Good morning. I'm Alison Kosik. It's 30 minutes past the hour.

And breaking overnight, sources tell CNN there was constant communication during the 2016 campaign between Russian operatives and top aides to Donald Trump when he was a candidate.

The extensive contact was picked up as part of routine U.S. surveillance of Russian officials and others. Our sources are telling us it drew the attention of U.S. intelligence and law enforcement, partly because it came as Russia was known to be hacking mostly Democratic organizations. New revelations are coming in as the White House tries to limit the damage following the resignation of National Security Adviser Michael Flynn after he misled the White House about his own contacts with Russia during the transition.

For the latest on all of this, let's bring in CNN's Pamela Brown in Washington.

(BEGIN VIDEOTAPE)

PAMELA BROWN, CNN JOHN CORRESPONDENT: Well, good morning, John and Alison. High-level advisers close to then-presidential nominee Donald Trump were in constant communication during the campaign with Russians known to U.S. intelligence. Multiple current and former intelligence, law enforcement and administration officials tell CNN, President-elect Trump and then President Obama were both briefed on the details of the existence of communications between suspected Russian operatives and people associated with the Trump campaign and the Trump business, according to U.S. officials familiar with this matter.

And both the frequency of the communications and proximity to Trump of those involved raised a red flag with U.S. intelligence and law enforcement. And according to these officials, the communications were intercepted during routine intelligence collection targeting Russian officials and other Russian nationals known to U.S. intelligence.

Among several senior Trump advisers regularly communicating with Russian nationals were then campaign manager Paul Manafort and the adviser Michael Flynn, according to our sources.

Now, officials emphasized that communications between campaign staff and representatives of foreign governments are not unusual. However, these communications sent out to investigators due to the frequency and the level of the Trump advisers involved. Investigators have not reached a judgment on the intent of those conversations.

But adding to U.S. investigators' concern were intercepted communications between Russian officials before and after the election, discussing their belief that they had special access to Trump. Now, two law enforcement officials tell CNN these officials cautioned the Russians could have been exaggerating their access -- John and Alison.

(END VIDEOTAPE)

BERMAN: All right, Pamela.

The new revelations came just hours after the White House face a barrage of new questions about the forced resignation of Michael Flynn as national security adviser. Flynn was, now, we are told, asked to resign. Initially, we're told he resigned on his own choice, but he was asked to resign over his contacts with Russians during the transition.

Actually, no, they say he was asked to resign because of a loss of trust overtime because of what he said about those contexts.

[04:35:01] At Tuesday's press briefing, Press Secretary Sean Spicer was asked to confirm that no one on the Trump team spoke with Russia before Election Day.

(BEGIN VIDEO CLIP)

REPORTER: Back in January, the president said that nobody in hi campaign had been in touch with the Russians. Now, today, can you still say definitively that nobody on the Trump campaign, not even General Flynn, had any contact with the Russians before the election?

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: My understanding is what General Flynn has now expressed is that during the transition period, well, we were very clear that during the transition period, he did -- he did speak with the ambassador --

REPORTER: I'm talking about during the campaign. SPICER: I don't have any -- there there's nothing that would conclude

that anything different has changed with respect to that time period.

(END VIDEO CLIP)

BERMAN: So, Sean Spicer denying that question. And then there is this. Then the Vice President-elect Mike Pence, he was asked directly, this was January 15th, he was asked directly whether any officials had contact with Russia during the campaign.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS ANCHOR: Was there any contact in any way between Trump and his associates and the Kremlin or cutouts?

MIKE PENCE, THEN-VICE PRESIDENT-ELECT: Well, of course, not. Why would there be any contacts between the campaign? Chris, the -- this is all a distraction, it's all part of a narrative to delegitimize the election and question the legitimacy of this presidency.

(END VIDEO CLIP)

BERMAN: So, "Of course not", says Mike Pence. Of course, the reporting from CNN and "The New York Times" this morning is that there were contacts between campaign officials, Mike Flynn, also Paul Manafort, with some Russians during the campaign.

Now, we should note the same day of the interview, January 15th, he was also on another Sunday show. That was the day that he denied that Mike Flynn had spoken with the Russian ambassador about sanctions and we now know that turned out to be false.

KOSIK: OK. And former Clinton campaign staffers are expressing deep frustration with these developments coming, as they do, too late to help their candidate.

Clinton campaign press secretary Brian Fallon telling CNN's Don Lemon overnight that red flags over contacts between Trump aides and Russia were raised and ignored.

(BEGIN VIDEO CLIP)

BRIAN FALLON, CLINTON CAMPAIGN PRESS SECRETARY: It's nothing short of a bombshell. And it corroborates a lot of what those of us that worked on the campaign suspected all along during those months, where we had a lot of trouble quite frankly getting people to pay attention to it because it seemed so surreal. But the more reporting coming up since the election, more and more of it is being confirmed as true.

(END VIDEO CLIP)

KOSIK: Clinton campaign manager Robby Mook wrote, "I'd like the FBI to explain why they sent a letter about Clinton but not about this."

Many on Clinton's team believe the letter from James Comey saying the FBI was investigating more e-mails connected to Hillary Clinton 11 days before the election cost her the presidency.

BERMAN: Through every twist and turn of this, Moscow has denied again and again that it did anything to influence the U.S. election. Although there's now plenty of evidence to the contrary, including that report to U.S. intelligence agencies. So what does the Kremlin have to say now?

CNN's Clare Sebastian joins us now live from Moscow with the latest.

Now, Clare, Paul Manafort and Michael Flynn with contact during the campaign with Russian officials. And the Russians now say -- what?

CLARE SEBASTIAN, CNN CORRESPONDENT: Well, it's interesting, John, because the fact -- the fact that there were contacts between Russian officials and the Trump campaign is really not anything new here in Russia. We actually had just a few days after the election from Russia deputy foreign minister in an interview with the Russian new agency Interfax, saying there were contacts, didn't elaborate on the frequency of them, but certainly there was no suggestion that there was anything unusual there.

But it is interesting because this takes place as a time, suddenly in the last 24 hours or so, this relationship which many had high hopes for improving under the new U.S. administration has been very strained, reports of three separate military incidents coming out of Washington. First, that the Russians have deployed a cruise missile that violates a 1987 treaty. The Kremlin spokesman, according to Russian agency saying that Russia is in full compliance with that treaty, and there have been no official accusations.

It's actually a Russian spy ship according to CNN is now in international waters off the coast of Delaware. That has happened before but it's suddenly very unusual. And the third incident, the buzzing of Russian planes of a U.S. naval ship in the Black Sea. The Russian defense ministry has denied that there were any incidents. It said it was frankly surprised that the Pentagon was concerned about this, but this certainly raises tensions within that relationship.

And for Russia, a real cause of concern at this point is the suggestion we heard from Sean Spicer yesterday that President Trump wants Crimea to be returned to Ukraine. We heard just now from its foreign ministry spokesman relationship. For Russia, a real cause of concern at this point is the suggestion we heard from Sean Spicer yesterday that president Trump wants Crimea to be returned to Ukraine. We heard just now from its foreign ministry spokesman to journalists that this would not happen, Crimea is part of Russia and they will not give it back.

[04:40:07] So, certainly, a lot of tensions there, John.

BERMAN: All right. Clare Sebastian for us in Moscow -- thanks so much, Clare.

KOSIK: OK. Putting it mildly, there's turmoil at the White House. Sources tell CNN the White House is in chaos, as it tries to move past the Michael Flynn controversy. And we're told that top officials aren't speaking to each other because they're too busy trying to take each other down.

Our source described it as a "Game of Thrones", and we're finding out more about the lead-up to Flynn's resignation. The White House says the level of trust between the president and General Flynn had deteriorated forcing a change.

BERMAN: And now, we are told the Vice President was one of the last to find out about the investigation into General Flynn, even though he is the one that Flynn allegedly mislead about his talks with the Russian ambassador. The White House claims the president knew about the Justice Department probe into those calls two weeks before the vice president, but apparently kept him out of the loop.

Flynn was questioned by the FBI before the Justice Department warned White House about his contacts with Russia. That happened January 26th. Sources say he was cooperative with those he tried to misled the bureau.

Now, all of this is a very unusual warning or comment from the head of U.S. Special Operations Command, General Raymond Thomas. He says, "Our government continues to be in unbelievable turmoil. I hope they sort it out soon because we're a nation at war." You really never almost hear comments from an acting serving commander.

General Thomas oversees operations of the Navy SEALs and Army Green Beret.

KOSIK: And keeping the theme of turmoil, the government's ethics watchdog says president adviser Kellyanne Conway should be disciplined for promoting Ivanka Trump's fashion line on live TV. The director of the government ethics office says there's a strong reason to believe Conway violated standard, suggesting the White House conducted investigations. He likened what she did to appearing in a TV commercial and has requested a response from the administration by the end of the month.

The White House is looking for anything to change the conversation at this point. Will a visit from the Israeli prime minister do the trick? We're live in Jerusalem with a preview.

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[04:46:26] KOSIK: Welcome back.

A major exit from Obamacare. Humana saying next year, it's going to drop coverage in the 11 states where it sells individual policies both on the Obamacare exchange and outside of it. It covers 152,000 policyholders in those states. They will be covered through the end of the year, though. It expects to lose $45 million.

Humana says costs are too high. It's already seeing sicker, more expensive patients.

And the president tweeted on this news saying this, "Obamacare continues to fail. Humana to pull out in 2018. Will repeal and replace and save health care for all Americans." But insurers are getting more and more jittery about where health care stands in this country. Many have warned they're going to drop coverage unless lawmakers provide more clarity about their plans to replace Obamacare. Humana's exit also comes on the same day that ended a merger agreement with Aetna, which will play Humana, $1 billion, that's a breakup fee. Cigna and Anthem also broke off their merger plans within hours of that announcement. Anthem is on the hook for a $1.8 billion payment to Cigna.

BERMAN: With everything else going on and all the questions about White House and the turmoil there, and Russian contacts, President Trump hosts Israeli Prime Minister Benjamin Netanyahu at the White House today. They're meeting comes on the heels of the disclosure that a two-state solution to the Israeli-Palestinian conflict is now not something the president will insist on.

The White House sources tell CNN the administration's policy on Israel is still a work in progress.

We want to go live to Jerusalem and bring in CNN's Oren Liebermann.

The idea that a two-state solution is now not something that the White House will insist on, that's the language we're being told. That's a significant development, Oren.

OREN LIEBERMANN, CNN CORRESPONDENT: It absolutely is. It's a major break with some five decades of U.S. foreign policy. The White House saying it won't insist on it, but they'll open to any peace agreement that both Israelis and Palestinians agreed to.

Palestinian leaders have already made it clear. It's a two-state solution, or it's nothing. And they say that's the international consensus and it very much is an Israeli state next to a Palestinian state.

One Palestinian leader even said, if Trump has some different idea on a one-state solution, then give details about it. Is it a state where Israelis and Palestinians have full rights, or is it --

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[04:54:41] BERMAN: All right. U.S. Defense Secretary James Mattis is in Brussels this morning to meet with NATO allies for the first time. Topping the agenda, NATO's strained relations with Russia and also fighting extremism. Secretary Mattis is also expected to address the sudden resignation of National Security Adviser Michael Flynn.

CNN's Erin McLaughlin live in Brussels with the very latest.

[04:55:02] The swirl of questions here in the United States, Erin, that Secretary Mattis will not be able to avoid there.

ERIN MCLAUGHLIN, CNN INTERNATIONAL CORRESPONDENT: That's right, John. And this ministerial meeting is seen as one of the most important in recent years. There, officials really making great efforts to try and impress Secretary Mattis. In the words of one senior NATO diplomat, they have sort of over-prepared, kind of like, quote, "a good school student."

Secretary Mattis for his part saying that he's going to be listening to what NATO officials have to say, but also talking about transformation, especially considering what President Trump has said that he wants to see more in terms of defense spending from the allies. He also wants to see a greater focus on counterterrorism. NATO officials here say they want to know precisely what he means in terms of contrite proposals.

Michael Flynn's resignation also weighing heavily on this meeting as well. In the words of one senior diplomat we've spoken to, his resignation, quote, "far from reassuring." Secretary Mattis already asked about the resignation on the flight over to Brussels.

Take a listen to what he has to say.

(BEGIN VIDEO CLIP)

JAMES MATTIS, DEFENSE SECRETARY: Frankly, it has no impact. Obviously, I haven't changed what I'm heading there for. It doesn't change my message at all. And who's on the president's staff is who I will work with. And, so, it's -- you know, full speed ahead.

(END VIDEO CLIP)

MCLAUGHLIN: Now, that senior NATO diplomat saying that they recognize for the Trump administration, there is a learning curve when it comes to Russia. But that they hope that very quickly, the United States will recognize Russia as a dangerous player that needs to be taken seriously -- John.

BERMAN: Erin McLaughlin for us in Brussels. Big meeting there today. Thanks so much, Erin.

KOSIK: Finally, some closure for the family of a boy kidnapped and murdered in New York City in 1959. A jury has convicted 56-year-old Pedro Hernandez of killing and kidnapping Etan Patz on his way to a bus stop. Prosecutors called it one of the city's oldest and most painful unsolved crimes.

It's been an agonizing wait for the Patz family. But Etan's father Stanley says there is final some measure of justice for his son.

BERMAN: Nearly 200,000 people have the green light to return to their homes. This in the shadow of the Oroville Dam in northern California. Authorities lifted the mandatory evacuation order on Tuesday, with the lake water dropping. Crews scrambled to repair the damage of the spillway before new storms hit starting tonight.

ROMANS: Those are amazing pictures.

BERMAN: President Trump has approved emergency aid for the area while the evacuation order was lifted, an evacuation order staying in effect.

Rumor has it there's a best in show. Rumor is the name of the winner of the top prize of the 141st Westminster Dog Show.

KOSIK: Now, that's a dog.

BERMAN: It's a dog, it's like not a cat.

KOSIK: No, that's not just any dog.

BERMAN: It's not a big cat. A German shepherd is a dog, as opposed to a big cat.

This dog beat out nearly 3,000 competitors from nearly 200 breeds.

KOSIK: Look at him.

BERMAN: German shepherd, Rumor. It's a she. She was the runner-up last year in 2016. She is not going to be going to Disneyworld. After the win, the handler said we're going to go home, relax and find her a husband.

KOSIK: It might be a nice ball to play with. Just be a dog.

BERMAN: I'm not sure she'll get that chance. She's got some work to do, I think, for those.

KOSIK: All right.

Let's go ahead and check on CNN Money Stream this morning. Record run. It's been a record run for stocks set now to roll in to date five this morning.

Dow futures are higher. S&P 500 futures up slightly. And both have hit four straight record highs. It's amazing. Stock markets in Europe and Asia are climbing as well.

And two wildly held stockings also at all-time highs. Goldman Sachs hitting its first record close since the recession. Investors are loving bank stocks in 2017. That's thanks to President Trump's promises of lower taxes and less regulation.

Apple also closing at an all-time high. Shareholders are optimistic about the next iPhone, that's after a sales rebound.

BERMAN: How do they know. They don't even know what the new iPhone is?

KOSIK: It's the anticipation. The expectation.

BERMAN: It's the rumors. Wireless rumors.

KOSIK: Well, then, if they're disappointed, you'll see it in stocks, right? How about that?

BERMAN: That's probably true. KOSIK: OK, the CEOs of seven major retailers heading to Washington to take on a proposed border tax. Sources telling CNN money that the chief executives of Target, JCPenney, Best Guy and Gap are going to be meeting with president Trump plus leaders of Tractor Supply Company, AutoZone and Jo-Ann Fabrics.

Now, it's the president's threats to tax Mexican exports that's got them all worried. They're going to be lobbying against the plan unveiled last year by congressional Republicans for a broad border adjustment tax.