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EARLY START

Attorney General Met Twice with Russian Ambassador; Trump Hits the Road; Skepticism Over Trump's Immigration Compromise; Snapchat Valued at $24B Ahead of IPO. Aired 4-4:30a ET

Aired March 2, 2017 - 04:00   ET

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


[04:00:09] DAVE BRIGGS, CNN ANCHOR: Breaking overnight. Did President Trump's attorney general mislead Congress about talks with the Russians during the campaign? His testimony raising big questions. Now, some top Democrats calling for him to step down.

CHRISTINE ROMANS, CNN ANCHOR: A lot of developments on that front overnight. Wow.

BRIGGS: So much for the goodwill over the joint session speech.

ROMANS: Yes.

BRIGGS: Good morning, everybody. Thanks for getting an EARLY START with us. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It is Thursday, March 2nd. It is 4:00 a.m. in the East.

Here's what is not in question this morning, Attorney Jeff Sessions met with the Russian ambassador to the U.S. twice last year. What is in question is whether he did so in capacity as a Trump campaign surrogate or as a member of the Senate Armed Services Committee.

Now, Sessions is facing accusations he misled Congress about those meetings. With all of this making for a potentially devastating blow to the new attorney general, the Justice Department now confirming that twice last year, Sessions met with the top Russian diplomat in Washington. Once on the sidelines of the Republican Convention in July, and the second time in September in Sessions' Senate offices.

Sessions was a prominent surrogate for the Trump campaign at the time, the very time of the meetings with the Russian ambassador, Sergey Kislyak, who is considered by U.S. intelligence to be one of Russia's top spies and spy recruiters.

Now, listen carefully to what Sessions said or what he didn't say at his confirmation hearing when Senator Al Franken asked about contacts between the Trump campaign and Russian officials.

(BEGIN VIDEO CLIP)

SEN. AL FRANKEN (D), MINNESOTA: And if there is any evidence that any one affiliated with the Trump campaign communicated with the Russian government in the course of the campaign, what will you do?

JEFF SESSIONS, THEN-ATTORNEY GENERAL NOMINEE: Senator Franken, I'm not aware of any of those activities. I have been called a surrogate at a time or two in that campaign and I did not have communications with the Russians.

(END VIDEO CLIP)

BRIGGS: So despite failing to disclose the meeting, the attorney general and administration pushing back at the accusation he misled Congress. Sessions saying in the statement, "I never met with any Russian officials to discuss issues of the campaign. I have no idea what this allegation is about. It is false."

A spokesperson for Sessions says there was absolutely misleading about his answer that he was meeting in his capacity as a member of the Senate Armed Services Committee. Not the Trump campaign. That distinction will be critical in efforts to absolve Sessions of wrongdoing.

The White House is dismissing the story as a partisan attack intended to blunt momentum of the speech to Congress.

ROMANS: Reaction overnight to the late-breaking news was swift, with the top Democrat in the House calling for the attorney general to resign. Nancy Pelosi issuing this statement, "Attorney General Sessions has never had credibility to oversee the FBI investigation of senior Trump officials ties to the Russians. Now after lying under oath to Congress about his own communications with the Russians, the attorney general must resign."

Another leading Democrat, Sessions former Senate colleague, Elizabeth Warren, also calling for him to step down.

The top Democrat on the House Oversight Committee, Elijah Cummings, at first called for Sessions' resignation and then later told CNN he should at least recuse himself from the investigation into ties between Russia and the Trump campaign.

(BEGIN VIDEO CLIP)

REP. ELIJAH CUMMINGS (D), MARYLAND (via telephone): This man has been the U.S. attorney for a state. I mean -- and he knows the law. He's probably prosecuted people for telling untrue statements to the FBI and others. At some point, people have to ask the question, where is the integrity? Where is the rule of law? Where is the obedience of law? All of these excuses over and over.

(END VIDEO CLIP)

BRIGGS: Even some top Republicans are voicing concern. At a CNN town hall, Senator Lindsey Graham suggesting it may be time for an independent investigation into this Trump-Russia allegation has become necessary.

(BEGIN VIDEO CLIP) SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: If there is anything there and it goes up the chain of investigation, it is clear to me that Jeff Sessions, who is my dear friend, cannot make this decision about Trump. So, there may be not -- there may be nothing there, but if there is something there that the FBI believes is criminal in nature, then, for sure, you need a special prosecutor. If that day ever comes, I'll be the first to say, it needs somebody other than Jeff.

(END VIDEO CLIP)

BRIGGS: As for Senator Franken, he says that the attorney general's response to his question was at best misleading. Franken stopped short though of calling for Sessions' resignation this, but does say this, "It's clearer than ever that the attorney general cannot in good faith oversee an investigation at the Department of Justice and the FBI of the Trump-Russia connection, and he must recuse himself immediately."

[04:05:02] ROMANS: So, even if Senator Jeff Sessions met with the Russian ambassador as a member of the Senate, rather than as a Trump surrogate, such encounters are no small matter. Ambassador Kislyak is the same official who's interactions with former Trump national security adviser Michael Flynn ultimately led to Flynn's firing.

For more, I want to bring in senior international correspondent Matthew Chance. He is live in Moscow.

Pull back the curtain for us here about who is this ambassador and what kinds of dealings he is having with all levels of the American government as part of his job.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. Well, I mean, he's obviously the man now at the center of this political storm in the United States about the contacts appropriate or otherwise, between Trump administration officials and the Russian government. And, obviously, he's a relatively high profile figure in the sense that he's the Russian ambassador to the United States. He's been in that job since 2008. So, he's been serving in Washington for a long time.

He's had two previous posts in the United States as well back in the 1980s. He was a political secretary at United Nations as part of the USSR delegation. And he was a political secretary at USSR's embassy in the '80s as well back then. He's also been ambassador to Belgium. He's been the Russian ambassador to NATO.

And so, he is a career diplomat who is I think, you know, from the standings we've taken, broadly respected by his counterparts in the United States as well. For instance, he was instrumental in achieving arms control treaty, arms reduction treaty with the United States at the beginning of the Obama administration. And so, this is somebody who is very well-known in diplomatic circles and he's somebody who's had longstanding contacts with the United States.

ROMANS: What about the suggestion that, you know, he is a spy recruiter? He's a spy? That there's no overlap between these diplomatic positions, or there is overlap between these diplomatic positions and the intelligence community?

CHANCE: Yes, I mean, that allegation has gone down like a lead balloon here in Russia. Already, the foreign ministry has issued rebuke saying, I got them down here, saying, "The media has hit rock bottom. Has it got further to go?" That comes from Maria Zakharova, who's the spokesperson for the Russian foreign ministry. They said they're going to say more about that issue in the coming hours.

But, look, I mean, from his curriculum vitae, from his resume, Sergey Kislyak looks like he is a career diplomat and there's no suggestion on it that he has anything to do with the intelligence services or military intelligence. And so, that's what we've got to go on at the moment. We've seen those reports, obviously. But again, the Russian government is pushing back on them.

ROMANS: OK. I'm sure they are.

All right. Matthew Chance, stay on it for us. We'll talk to you again very, very soon. Thank you.

BRIGGS: The Obama administration took steps to make sure information about Russia's meddling in the investigation would be preserved after Mr. Obama left office. That according to "The New York Times" which cites official saying the effort was to ensure there was a trail of information for government investigators after Obama left office. Eric Schultz, the spokesman for the former president, tells CNN, quote, "The situation was serious, prompting President Obama to call for a review by U.S. intelligence."

And now, the White House staff members have been instructed by administration lawyers to save all records related to potential Russian interference in the election. Those instructions coming after Senate Democrats asked the White House and other agencies to preserve those materials.

The White House working to keep up momentum from the president's speech Tuesday night, even as the news about Jeff Sessions starts to dominate the news cycle. The president back on the road today, selling his vision for America. His first stop comes in a state he failed to win in November, but one where he could find support as he pushes a big boost for the military.

CNN's Jeff Zeleny at the White House with more on what's on the agenda today for the president.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, President Trump traveling today to Virginia, to Newport News, Virginia, delivering a speech on the deck of the USS Gerald Ford. He'll be making his case in a blue state, one of the few states he did not win during last year's election that he's actually visiting. Normally, he visits red states, but he'll be targeting this, talking about his build up of military spending. He wants to increase the military budget. Now, of course, there is not much resistance among Republicans on Capitol Hill to this, but there is questions to his overall agenda on health care, on tax reform, on infrastructure. So, the president taking the first of the speeches out to the country trying to rally his supporters against some of these potential Republican congressmen who may be reluctant to adding on to the deficit.

Now, the question here at the White House is what the president will do to urge these Republicans to come along with him? Will he try and rally directly in their districts to get these physical conservatives with him or will he try and just build a bigger case here?

[04:10:05] But his speech today in Newport News, Virginia, is the first of many across the country, we're told, that will make the case to build his agenda. So, the president starting today making his case out to the country. It's not the campaign trail, but will be going back to sell his message to the people -- Christine and Dave.

(END VIDEOTAPE)

ROMANS: All right. Jeff Zeleny at the White House for us -- thanks, Jeff.

President Trump is not expected to rollout his new travel ban today. But it is still expected this week. And at least one major change from the original version is under discussion now. Three of the president's top advisors, the Secretary of State Rex Tillerson, Defense Secretary James Mattis and Homeland Security Chief H.R. McMaster, the all three, are urging Mr. Trump to remove Iraq from the list of seven banned countries.

Now, the revised ban was supposed to be unveiled yesterday with the White House delayed it to keep the signing on the positive buzz, the reaction to the president's address to Congress Tuesday night. Critics are slamming the delay because the president has been making the argument that the national security emergency requires quick passage of the measure.

There are some suggestions this morning, this is what happens when you get your cabinet in place, right? You get more nuanced to the decision-making. But we have such a presence in Iraq with the national security infrastructure that some are saying that that is the least worry from -- they know, those people are vetted more than anybody else.

BRIGGS: Right. And that's the timeliness of this. It isn't interesting argument that he needed to keep this country safe, that's why they rush this out. That's why it came on a Friday night so hastily and now, we can delay it a day because of good press.

Well, both sides of Capitol Hill pushing back against compromise on immigration. Now even the White House gets the idea with something of a head fake.

(COMMERCIAL BREAK) [04:15:49] BRIGGS: Lawmakers on both sides of the aisle skeptical about President Trump's talk of a big immigration compromise during his speech to Congress. On the right, Republicans want to see immigration laws toughened before even addressing the estimated 11 million people already living in the U.S. illegally. Meanwhile, Democrats can't forget Trump's past rhetoric and actions on immigration.

Now, even the White House admits it used a compromise as a way to generate good press ahead of Trump's address. Senior administration official calling it a, quote, "misdirection play", before Trump pivoted to what the hard liners want in his speech.

CNN senior congressional correspondent Manu Raju has more on immigration debate from Capitol Hill.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Good morning, Christine and Dave.

Now, there was some pushback on Capitol Hill yesterday to the idea of doing a compromise immigration bill that could provide some legal status to undocumented immigrants. Of course, this was an idea that was suddenly proposed by the White House in a meeting with journalists just moments before the State of the Union. But when Republicans caught wind of this, they were surprised, they didn't know what to think and some frankly pushed back pretty aggressively, thinking that they cannot move on this first without moving on issues like securing the border.

Now, one of those conservatives was Ted Cruz of Texas, who I talked with him yesterday about this issue and about the White House floating this idea which he discounted. Take a listen.

SEN. TED CRUZ (R), TEXAS: You know, I don't make it a habit to respond to rumors passed on by reporters.

RAJU: It wasn't a rumor. It was the president of the United States.

CRUZ: Well, you are welcome to testify and give your own views. I'm going to wait until I see specific legislative proposals to comment on them and not chase down every press rumor of people reporting --

RAJU: What about just the idea of giving legal status on undocumented immigrants? Are you open to that idea?

CRUZ: My view is we need to secure the border.

RAJU: Now, after the pushback, the White House actually pulled back from those remarks, saying that, you know, perhaps immigration is not the top priority of this administration, at least passing a compromise bill dealing with legal status and so, instead, focusing on some of the things that Donald Trump has been talking about along -- on the campaign trail -- Christine and Dave.

(END VIDEOTAPE)

ROMANS: Manu Raju, misdirection play. That's a new one in the playbook. Misdirection play.

BRIGGS: Well, Senator Chris Murphy told CNN that's a lie. That's what we call a lie. I mean, that is unbelievable to just throw out the shiny object and say look over here.

ROMANS: Immigration reform. If it came to my desk, and then that gets progressives excited about something happening on that front, but then going to the speech and taking the hard line.

BRIGGS: But it worked, right?

ROMANS: Right. Interesting. Really -- misdirection play.

All right. The Pentagon looking for more authority to approve counterterrorism operations. U.S. defense officials say the goal is to speed up the process by allowing defense officials and even field commanders to decide when to launch missions without the blessing of the White House.

Now, a senior official says this does not mean the president would be left out of the loop. What it means is that when they have identified someone as someone that has already been approved by the president to go after and they see that person pop up somewhere else, they would be able to move quickly without presidential approval on a case by case basis.

All right. To money now, 19 minutes past the hour.

The biggest tech IPO since Facebook set to start trading on the New York Stock Exchange today. We'll tell you how much investors are paying for a share of Snapchat. We're going to show you the stunning valuation and we're going to show you just how smart the founders look for holding out when they wanted to be bought two years ago.

(COMMERCIAL BREAK)

[04:23:43] ROMANS: I've been covering money for a long time and I have never seen 21,115, folks. The Dow jumping 300 points, about 1 1/2 percent, closing above 21K for the first time ever. NASDAQ and S&P also at record highs.

Since the election, the U.S. stock market has gained $2.7 trillion in value. The president's presidential tone encouraged investors to tax reform and infrastructure will happen.

Second, right up there, the chances of a rate hike. The American economy is humming so strongly, the Fed will hike interest rates this month. That's what the markets are telling us. The odds now 66 percent chance of a rate hike in March. That's triple what it was just on Monday.

This is particularly good for the banks. You saw bank stocks zoom ahead. They make money when interest rates rise and it may encourage them to lend more, which could help the broader economy.

Today, the focus shifts to tech and the company that owns Snapchat goes public. Snap pricing its shares at $17 a piece, higher than the initial range. That would give Snap a value of reportedly roughly $24 billion, making it the biggest tech IPO since Facebook. That's a big deal.

Ironically, Facebook offered to buy Snapchat for $3 billion back in 2013.

[04:25:00] That offer was turned down. The founders, the owners of Snapchat look like geniuses. They turned down $3 billion and now, I guess Evan Spiegel's personal stake will be way more than that.

The company, though, is struggling to make money, suffering from losses of more than $500 million last year. Recently loss the line of glasses that shoot video called Spectacles. Online sales of those started last week. It's not unknown to see a company go public with a lot of buzz with an interesting business model that doesn't make money yet. But there's a lot --

BRIGGS: Do you Snap?

ROMANS: I have Snapped before. I stopped Snapping. But I got to tell you, everyone who I know who is younger than 20 years old Snaps, right?

BRIGGS: Do you know there is a filter right now for corn?

ROMANS: Are you kidding me.

BRIGGS: Can you see this? That's me. There is a corn filter just for you.

ROMANS: You can bring me into the 20th century -- 21st century, actually, when we go to the break.

BRIGGS: I'll show you at the break.

But, first, was he speaking as a surrogate or as a senator? That distinction is pivotal as Attorney General Jeff Sessions comes under fire for failing to disclose talks with the Russian ambassador. Details next.

(COMMERCIAL BREAK)