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THE LEAD WITH JAKE TAPPER

Interview With Former U.S. Secretary of Defense Leon Panetta; Did Former Trump National Security Adviser Break the Law?; Source: GOP Proposal Doesn't Include Wall Money. Aired 4-4:30p ET

Aired April 25, 2017 - 16:00   ET

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


ANNOUNCER: This is CNN breaking news.

JAKE TAPPER, CNN ANCHOR: Hello, and welcome to THE LEAD. I'm Jake Tapper.

We're beginning today with breaking news in our money lead, because you're about to look at live pictures of the New York Stock Exchange as we await the closing bell today, the Dow up more than 240 points in anticipation of President Trump releasing elements of his tax plan either this evening or tomorrow.

Over the last two days, the Dow has surged more than 400 points.

CNN money correspondent Cristina Alesci joins me now live.

And, Cristina, what does Wall Street see here, and what does it like?

CRISTINA ALESCI, CNN CORRESPONDENT: Well, listen, you hit the nail on the head.

There's several reasons for the rally, but the first one is investors are applauding a possible reduction in corporate taxes. Investors are excited to see the details of the plan tomorrow. I'm hearing they will come probably in the afternoon.

Look, Jake, slashing corporate taxes from 35 percent to 15 percent would be an immediate boost of the bottom line for many companies on the Dow and other indexes. Also, solid corporate earnings are boosting prices, and finally investors feel more confident that the French will elect more moderate pro-business Emmanuel Macron over the populist Marine Le Pen.

[16:00:12]

Now, we have seen the Dow, as you mentioned, rally 400-plus points over the past two days. It's up about 14 percent since the election alone. A lot of excitement is also showing up in the tech-heavy Nasdaq. It crossed 6000 for the first time ever just today.

Bigger picture here, Jake, with markets hitting record after record, there is a big risk for investors. Some are concerned that there's too much optimism out there, and, for example, if tax cuts take longer, markets can reverse course. You can bet Wall Street will be watching tomorrow's announcement on

taxes very carefully. If there's any disappointment that we could see it take longer for -- actually to get this tax reform done, this big two-day rally could be reversed -- Jake.

TAPPER: All right, Cristina Alesci, thank you so much.

Now let's turn to the politics lead and more clouds over the head of the man who was briefly President Trump's national security adviser. A top House Republican suggesting today that former Lieutenant General Michael Flynn broke the law when accepting payments from Russia and Turkey and not disclosing them.

House Oversight Committee Chairman Jason Chaffetz of Utah saying today he's seen no evidence that Flynn complied with disclosure requirements regarding engagements and appearances in Russia, as well as lobbying Flynn's consulting group did for company to the Turkish government.

Let start with CNN's Pamela Brown.

Pamela, the White House sent a letter to the committee in which basically there was no information provided. The White House seems to be making two arguments. One, if Flynn signed any documents, they don't have them and that might be, of course, because they don't exist, and, two, the White House just refusing to provide any information about contacts that Flynn had with foreign officials when he was in the National Security Agency and when he was in the transition.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: That's right.

And we saw this play out during the White House briefing today where White House spokesman Sean Spicer said, look, the White House doesn't have these documents. The Department of Defense does, and he also argued that the administration should not be expected to know what Flynn did before President Trump assumed office on January 20 and before he became the national security adviser.

Now this comes as a top House Republican says Michael Flynn likely broke the law after failing to disclose payments he received from foreign governments.

(BEGIN VIDEOTAPE)

BROWN (voice-over): Tonight, President Trump's former national security adviser under fire as questions swirl about whether he broke the law over payments he received from Russia and Turkey.

MANU RAJU, CNN SENIOR POLITICAL CORRESPONDENT: Do you believe that Michael Flynn broke the law?

REP. JASON CHAFFETZ (R), UTAH: I see no information or no data to support the notion that General Flynn complied with the law.

BROWN: The revelation comes after leaders of the House Oversight Committee reviewed classified documents in a private briefing. Speaking to reporters on Capitol Hill today, they revealed they have seen no proof showing Flynn, a former top military intelligence official, received permission from the Pentagon or the State Department for the foreign government payments he received.

REP. ELIJAH CUMMINGS (D), MARYLAND: He was supposed to get permission and he was supposed to report it, and he didn't, period.

BROWN: And they say he didn't fully disclose the more than half- million dollars his firm was given for lobbying activities on behalf of Turkey when he applied to reinstate his security clearance, or the $45,000 he received from Russia for an R.T. TV speaking engagement, money Chaffetz says Flynn might have to pay back.

CHAFFETZ: As a former military officer, you simply cannot take money from Russia, Turkey or anybody else. And it appears as if he did take that money, it was inappropriate, and there are repercussions for a violation of law.

BROWN: Flynn's attorney general said in a statement he did comply with the law, saying -- quote -- "General Flynn briefed the Defense Intelligence Agency, a component agency of DOD, extensively regarding the R.T. speaking event trip both before and after the trip."

At the same time, the White House is refusing to turn over necessary paperwork on Flynn, saying it doesn't have the relevant documents.

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: Right now, to ask the White House to produce documents that were not in the possession of the White House is ridiculous.

BROWN: The embattled former national security adviser left amid controversy in February after he lied about discussing sanctions with Russian Ambassador Sergey Kislyak Now the former acting Attorney General Sally Yates, who alerted the White House about Flynn's conversation with Kislyak, will soon testify before the Senate Judiciary Committee on Russia's interference in the election.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: We will ask her all questions about Russia, what she knew about Trump ties. Was there any administration effort to unmask people for political purposes? We are going to get to all things Russia in terms of what the administration did and what Russia did.

(END VIDEOTAPE)

BROWN: And the Judiciary Committee's hearing adds to this crowded field of investigations into Russia's meddling in the election and any ties to the Trump campaign associates, including the FBI, the Intelligence Committees and the House Oversight Committee.

[16:05:07]

Meantime, tonight, the Senate is poised to confirm the new DOJ head of the Russia probe, so a lot going on, on this front.

TAPPER: It's an odd argument that the White House has no bearing and no relationship with the transition team. It was headed by the vice president.

BROWN: Right. Exactly.

And you heard many reporters during the briefing continuing to press Sean Spicer on that point.

TAPPER: Very good.

Pamela Brown, thank you so much.

Let's bring in my guest, former Defense Secretary and CIA Director Leon Panetta, who served under President Obama.

Secretary Panetta, great to see you. Thanks for joining us.

LEON PANETTA, FORMER U.S. SECRETARY OF DEFENSE: Nice to be with you.

TAPPER: As a former head of the CIA, do you find it surprising that a fellow former intelligence professional like Mike Flynn took money from Putin's government and lobbied for a company with ties to Erdogan and then did not disclose those payments?

PANETTA: Well, Jake, it certainly seems as if the rules were not adhered to here.

And, obviously, it will be investigated by both the House and Senate Intelligence Committees, but, more importantly, it's probably being investigated by the FBI. And I think the FBI clearly have a lot more leverage here, because they can actually prosecute for any crimes that have been committed.

So, I suspect that one of these investigations is going to turn up just exactly what took place here.

TAPPER: Chairman Chaffetz said today that the White House refused to provide any material related to Flynn's vetting or when he was fired. The White House deferred to the Pentagon for some of that material.

You were a White House chief of staff. If you were advising President Trump, what would you suggest he do when it comes to sharing information about General Flynn?

PANETTA: I think the best policy is for the White House to fully cooperate in these investigations.

When the White House decides that it's going to stonewall on one issue or another, then the White House becomes the target for concern as to what they're trying to hide. So, I think, in this instance, it makes a great deal of sense for the White House to fully cooperate with all of the investigations that are going on, on this matter.

TAPPER: We learned today that several Obama administration officials are going to be testifying before Congress about this investigation into how much Russia interfered in the U.S. election and also how much Trump advisers may have cooperated and coordinated with members of the Russian government or officials known to U.S. intelligence. Based on what you know, based on what's out there publicly, how

concerned are you about possible collusion?

PANETTA: Well, that's the -- that's the key issue here, because there's no question that the Russians clearly tried to influence our election.

Eighteen intelligence agencies came to that conclusion, and I think everybody pretty much sees that Russia deliberately tried to do that. So the fundamental issue here is, was there any collusion between the Russians and members of the Trump campaign?

And, obviously, there's there's been a lot of meetings, as we have seen with Mr. Flynn. There's been a lot of money exchanged. Ultimately, that all has to be investigated in order to determine whether there was any kind of deliberate collusion or whether these were a bunch of people operating on their own. We don't know the answer to that. It's up to the investigation.

TAPPER: Secretary Leon Panetta, we have much more to talk to you about, including fake news being peddled to influence the French presidential election and questions about whether Russia is behind that.

Please stick around. We will be right back.

(COMMERCIAL BREAK)

[16:12:42]

TAPPER: Welcome back to THE LEAD.

Let's stick with politics.

I'm back with former Defense Secretary and CIA Director Leon Panetta.

Secretary Panetta, hackers and fake news peddlers are currently targeting French presidential candidate Emmanuel Macron before the run-off election next month. Do you suspect Russia might be behind it?

PANETTA: I would be very surprised if they weren't behind it.

The problem, Jake, is that cyber is the battlefield of the future. And we're seeing it now with what Russia tried to do in using cyber- attacks to influence our election. They have learned how effective that can be,. And now they are using the same tactics in France, and they will use it in Germany. They will use it in other elections.

They have found a weapon that they think can be very effective at trying to influence what voters do.

TAPPER: And what can be done to combat it? I mean, in a lot of these countries, it's free speech. They are using our own freedoms against us.

PANETTA: No, absolutely.

By using fake news, by using these kinds of cyber-attacks, hacking, what they are trying to do is, with false news, try to influence how people react to certain candidates and how they cast their vote. It's very disruptive, and, frankly it's tough to be able to pinpoint.

That's why it's really important that we conduct our investigations into what Russia did, because there is no question in my mind that, given the opportunity, they will try to do it again, not only in this country, but in other countries as well.

TAPPER: Speaking of Russian meddling, I want to ask you about reports of Russia arming the Taliban in Afghanistan. Russia denies it, but U.S. military officials aren't holding back in making these claims.

How much does that complicate not only the war in Afghanistan, but any kind of relationship that the Trump administration wanted to have with Russia?

PANETTA: Well, it only confirms that Russia is an adversary and that we have to treat Russia as an adversary.

They are continuing not only to -- to hack, to involve themselves in our elections. They are continuing to be aggressive, not only in the Ukraine, but in Syria.

[16:15:10] They are continuing to try to disrupt our relations in other countries. And now, they are arming the Taliban which is our enemy in Afghanistan. And the Taliban is what is trying to essentially disrupt the ability of Afghanistan to be able to secure and defend itself.

So, I think -- I think a very clear message needs to be sent to Russia that this is not acceptable and that they ought to work with us rather than against us to try to find efforts at peace in the world.

TAPPER: Secretary Leon Panetta, thank you so much for joining us. We really appreciate it.

PANETTA: Thank you. Nice to be here.

TAPPER: New information just in about the money for that border wall. Will the president get what he wants? Stay with us.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD.

Sticking with politics. As we tick closer to the president's 100th day in office and to a possible government shutdown, there is new information now in our politics lead.

[16:20:00] A source close to efforts to avoid a shutdown tell CNN that the GOP proposal will not include money for President Trump's border wall, but will have funding for border security which they say could satisfy President Trump, at least for now. CNN's Jason Carroll is live for us at the White House.

And, Jason, what else are you learning about this Republican proposal?

JASON CARROLL, CNN NATIONAL CORRESPONDENT: Well, it seems as if at this point the president is saying that his position, Jake, has not changed and that the proposal that has been put forward does not change his position. He is going to eventually, he says, get funding for the border wall, perhaps not this week. He says once again that his position has not changed and that the wall will get built with plenty of time to spare.

(BEGIN VIDEOTAPE)

CARROLL (voice-over): President Trump finds himself stuck between a campaign promise to build a wall and a battle over funding the government.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The wall is going to get built, folks. In case anybody has any questions, the wall is going to get built.

CARROLL: Hours after White House officials indicated that the president wouldn't insist on funding for the border wall as part of negotiations over a spending plan to avoid a government shutdown, the president took to Twitter this morning, writing, "Don't let the fake media tell you that I have changed my position on the wall. It will get built and help stop drugs, human trafficking, et cetera."

A senior administration official telling CNN the president was upset by news reports that suggested he was backing off his campaign pledge on the wall, a move initially cheered by Democrats.

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: It's really good news that the president seems to be taking the wall off the table in the negotiations we're having on an appropriations bill this week.

CARROLL: The shift puts back on the table the prospect for a government shutdown, though the president is unlikely to allow one over wall funding and would accept money for border security instead, according to a senior administration official. While the path forward remains uncertain, lawmakers on both sides seem confident a deal will get done.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I'm for a wall where it makes sense, but a 2,200-mile wall doesn't make a whole lot of sense. There's not a big appetite for that.

TRUMP: So help me God.

CARROLL: The spending fight comes as the president looks to make progress ahead of his 100-day mark in office. With the status of health care reform still up in the air, the president is preparing to unveil details of his tax reform proposal tomorrow which is expected to include a cut in the corporate tax rate from 35 percent to 15 percent. SEAN SPICER, WHITE HOUSE PRESS SECRETARY: If you look at the

corporate side in particular, we have become largely uncompetitive because of our rates.

CARROLL: The administration dispatching Treasury Secretary Steven Mnuchin and Gary Cohn, the director of the National Economic Council, to Capitol Hill, to meet with Republican leaders tonight. But the plan is already being met with some skepticism from GOP lawmakers concerned it could increase the deficit and make it more difficult to pass with a simple majority in the Senate.

UNIDENTIFIED MALE: I'm not sure we can go down to 15 percent. I certainly want to see corporate taxes decreased.

CARROLL: The president spent much of his 96th day in office at the Capitol, himself taking part in a Holocaust remembrance event.

TRUMP: Those who deny the Holocaust are an accomplice to this horrible evil. And we'll never be silent. We just won't. We will never ever be silent in the face of evil again.

(END VIDEOTAPE)

CARROLL: And, Jake, just want to update you and some information that we're getting and some breaking news, which is going to be another blow to the Trump administration. A federal judge in California has issued a preliminary injunction against his executive order to withhold money from sanctuary cities. You'll remember the president had called out cities such as New York City saying they were basically soft on crime. New York City, one of those cities, saying that without this federal money, it would be nearly impossible for the NYPD to actually fight crime.

Now, again, this federal judge in California is saying, issuing this preliminary injunction once again against the enforcement of this executive order basically saying that the executive order is unconstitutional. Another blow to the Trump administration on this one -- Jake.

TAPPER: That's right. Sanctuary cities, cities that don't enforce federal immigration laws in a number of respects.

Jason Carroll, thank you so much.

As the United States conducts a show of force on the Korean peninsula, Kim Jong-un is flexing his own military muscle. Is the U.S. in danger of taking the bait from North Korea?

Stay with us.

(COMMERCIAL BREAK)

[16:29:03] TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

Shifting gears now to our world lead, a new level of threats and provocations from North Korea. Just hours ago, the regime carried out a large-scale artillery drill just 100 miles from Seoul, South Korea. Experts say that Kim Jong-un seems to be sending a message to South Korea which is holding joint naval drills with the U.S. and Japan right now.

Let's bring in CNN correspondent Will Ripley who is live from us from Pyongyang, North Korea. He's the only American journalist reporting from inside North Korea right now.

Will, you've been speaking to the people there. Are they sensing that the tensions are escalating?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Well, before we get to that, Jake, you know what that means -- 5:00 a.m. here in Pyongyang. That's the morning wake-up alarm to get everybody out of bed and people say they are up and ready to fight the United States if need be. That is the tone that we hear on the streets here in North Korea.

I was actually speaking with a soldier in front of the USS Pueblo, it's the navy ship that North Korea captured back in 1968, the spy ship. They held the crew hostage for a while back then, and the soldier said that this time around, North Korea has a weapon that could sink the USS Carl Vinson carrier strike group.