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White House Struggles With One Crisis After Another; NYT: Kushner's Business Got $500M in Loans After White House Meetings; Dow Falls 500+ Points After Trump's Tariff Announcement. Aired 2-2:30p ET

Aired March 1, 2018 - 14:00   ET


[14:00:21] BRIANNA KEILAR, CNN HOST: I'm Brianna Keilar, in for Brooke Baldwin.

Soon, the White House will hold its briefing in front of cameras, but behind the walls, the West Wing seems to be falling apart, gripped with chaos and conflict.

Among the topics that Press Secretary Sarah Sanders is going to face here in just a moment, the sudden resignation of communications director Hope Hicks, the president's anger with Attorney General Jeff Sessions hitting back at him, the new revelations about meetings the president's son-in-law took in the White House and business he got after those, the president completely upending his party's agenda on guns. And that's right, one of his cabinet secretaries' apparent spending spree on furniture.

And one of the key figures at the center of this wild West Wing drama is Chief of Staff John Kelly who told his former staff at the Department of Homeland Security this today.


JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: I miss every one of you every day. Truly, six months, last thing I wanted to do was walk away from one of the great honors of my life, being secretary of homeland security, but I did something wrong and god punished me I guess.


KEILAR: A little humor, maybe a little reality there.

Let's begin at the White House now with CNN's Kaitlin Collins who is standing by for us.

Kaitlan, Hope Hicks announcing her resignation less than 24 hours ago, today, all eyes on Jared Kushner. Tell us about what's happening behind the scenes at the White House.

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Yes, that's right, it is a lot going on behind the scenes here, Brianna, especially with Hope Hicks, one of the president's top aides and closest confidants announcing that she is resigning from the White House after spending the last three years next to President Trump every single step of the way from the campaign until his time here inside the White House.

Certainly, a significant change coming for the West Wing and for the president himself because though there have been a rash of departures in this White House, Hope Hicks is so much more than that because she is so close to the president that she would rarely even leave the West Wing if the president was in the Oval Office because she knew that at any minute he could beckon her in there with hey, Hope, get in here to consult her on whatever was on his mind.

So, it's another member of the president's inner circle that is now leaving the White House. We've already seen that with Keith Schiller, the president's long term bodyguard who left earlier this year, and now Hope is leaving. Jared Kushner, Ivanka Trump's long term future here in the White House is up for the debate. And it looks like the only few aides left around the president, Dan Scavino, Kellyanne Conway, who have been around him for some time are dwindling by the day here, Brianna. So, certainly a lot on the president's plate here.

KEILAR: And not a great day on Wall Street. We've seen the stock market down about, there you see it now, down 500-plus points. This is because of an announcement that the president made this afternoon. Tell us what happened.

COLLINS: Yes, very last minute announcement to put it lightly, Brianna. The president announced he's going to impose these tariffs he says starting next week on aluminum and steel, 25 percent on steel, 10 percent on aluminum, something that certainly took a lot of people by surprise because, Brianna, as of last night leading up to that announcement today by the president, there was a lot of confusion over whether or not the president was actually going to announce it. Last night, they thought he was. This morning, it seemed like they were just going to have a listening session.

And then during the hastily arranged meeting where they brought reporters in, the president made that announcement and that was actually against the advice of some of his top advisers. Certainly something that caught Capitol Hill off guard. But the president says he's going to start instituting those tariffs next week, Brianna.

But just another scene in this very, very chaotic West Wing that we have going on behind me here at the White House.

KEILAR: And tell us about these questions today about ethical lines being blurred inside the Trump White House involving the president's son-in-law Jared Kushner. "The New York Times", of course, is reporting that Kushner's family received half -- his family business got about half a billion dollars in loans from two companies right after he met with the heads of those companies at the White House. What was supposed to be in an official capacity and then you're seeing some personal gain afterward. Kushner reportedly discussed giving the co-founder of those companies a job within the administration.

Is there anything else we know about this?

COLLINS: Yes, that's right, Brianna. Essentially, the story is that Jared Kushner's family real estate company is benefiting after he meets with the heads of these other companies here at the White House in his official capacity as a senior adviser and special assistant to the president. And one of those that you just mentioned that was up for a job is Joshua Harris, he is founder of the Apollo Global Management Group.

[14:05:03] And he was actually a contender for a White House job early last year, met several times with Jared Kushner and when that job didn't pan out later on in the year, his company Apollo Global Management lent to the Kushner family real estate company $184 million. So, quite a sizable loan. Much larger than what the company usually lends to people.

But it's just another story in a string of stories over the last few weeks that raise the questions of Jared Kushner's ability to continue to work in this White House, Brianna.

KEILAR: All right. Kaitlan Collins at the White House, thank you.

I want to bring in Jesse Drucker with "The New York Times". He actually broke that story that I was just discussing there with Kaitlan. Jesse is on the phone with us.

Sorry, Jesse, you broke this. He broke this. What more do we know about this and also just how problematic is this?

JESSE DRUCKER, REPORTER, THE NEW YORK TIMES (via telephone): Well, there are some serious questions obviously about what this might mean, what implications there might be for potential violations of the ethics regulations. I mean, basically, the regulations have language about federal employees if they have certain relationships, business relationships, they are then precluded from doing certain transactions and taking part in certain government decisions on particular matters involving people interacting with the government.

And, you know, one of the people we spoke to was former head of the Office of Government Ethics basically took the position that by virtue of Jared Kushner's company negotiating a loan with Apollo when Mr. Kushner owns a stake in a building that was going to receive that loan, but that essentially put Kushner in a position of having what's called a covered relationship with Josh Harris from Apollo. And his position was that we really don't know what was said in these meetings that he had with Harris at the White House and if Jared Kushner was his client, he would have advised him, you know, don't take the meeting because you are going to be in danger depending on the types of things that were discussed of potentially violating the regulations.

KEILAR: Were the different parties here, Jesse, aware that they were crossing potentially lines?

DRUCKER: I mean, we really don't know. I mean, you know, we asked the White House or we asked Mr. Kushner's lawyer whether he sought any ethics advice on having meetings with both Josh Harris and Apollo, and also Mike Corbat at Citigroup because Citigroup also gave Kushner Companies a loan last year after Mr. Mike Corbat met with Jared Kushner in the White House and they declined to respond to the question.

KEILAR: Really interesting. All right. They declined to respond to that question. Jesse Drucker with "The New York Times", thank you, sir, so much.

I want to discuss this more with CNN contributor and the former director of the Office of Government Ethics, Walter Shaub, with us now. He resigned from his post last year after clashing with the Trump White House.

So that's the question. Were they aware that there was some sort of ethical problem here? I guess the question especially with them not responding to the question as Jesse Drucker just told us, should there have been an awareness on the part of all of the parties, not just Jared Kushner, but those who were lending money to his family's business?

WALTER SHAUB, CNN CONTRIBUTOR: Well, to answer that, let's step back and look at it from the 10,000-foot level. You have an assistant to the president sitting across the table from bankers that his cash strapped family is pleading with for a gigantic loan. There is no situation in which that makes any common sense or is ethical in any sense of the word.

Is it strictly a violation? Well, I think we don't quite know all of the facts as Jesse Drucker pointed out. We certainly don't know what they discussed in the meeting. There has also been a lot of mystery and confuse surrounding Jared Kushner because he's had to revise his financial disclosure report, and his security insurance clearance firm so many times.

One of the revisions that he did to his financial disclosure report was to reveal that he forgot to quit some of the outside positions that he held with the Kushner families various companies until sometime in May 2017, which means while he is sitting across the table from these individuals, he is still an officer of some of these companies. Now, whether the companies were the ones that were specifically the parties to these loans, at least on the face of their names, it appears they may not have been.

But I have to admit, I don't fully understand all of the interlocking relationships between the various Kushner companies. And so, I can't say with any certainty that he wasn't involved in any of the companies that were getting the loans.

KEILAR: OK. So even just discussing this business inside of the White House, is that something that raises a red flag for you, that he's there -- supposed to be with Apollo Global Management, he was also supposed to be this advisory position that he was getting from one of the founders of Apollo.

[14:10:08] But that said, is it problematic ethically that this was a meeting happening inside the White House?

SHAUB: Oh, absolutely.

KEILAR: Or would it have mattered if it was outside the White House?

SHAUB: Well, it would have been bad either way if he was meeting in his official capacity. But the fact that it's in the White House just adds all of that much more weight to his authority as an assistant to the president who can influence their lives.

There are two different sets of rules. One is criminal, one is administrative. It is probably not criminal unless they were working on a matter that could actually affect his companies and which he still had a financial interest. But there are non-criminal ethics rules that matter. The standards of conduct that say you should recuse whenever participating in a matter like this can create an appearance that you have lost your impartiality.

And people can quibble over the technical reading of covered relationship and whether it applies or not. But there is a catch-all that certainly did apply here and in any other White House, they would certainly have had him recuse. It's not a rule that's easy to enforce. There's no vagaries in it, but a person can always say I was unaware, I didn't know.

But come on here, this is as common sense ethics as it gets. You don't do this.

KEILAR: Also this -- I mean, there are so many facets to this, one being that there was potentially a job on the table.

SHAUB: Yes. So, if there is a job on the table, there is a question of, oh, is this pay-to-play perhaps. What kind of red flags does it raise?

KEILAR: It's at a minimum, an optics problem. I mean, I don't want to go so far as to say that, because we have no evidence that he actually said, give me this loan and you'll get the business. I seriously doubt he did that.

But the optics are terrible. And if you care about government ethics and you understand that as a White House official you are setting an example for the other 2.7 million federal employees who work for the White House through the various agencies and the executive branch, you don't go and sit across from a meeting with a guy that you are potentially offering a position while your family's companies in which you still have an investment and maybe be or maybe not still have a position are trying to get massive hundred million dollar loans from.

KEILAR: It's really interesting to hear your perspective on this. Walter Shaub, thank you so much.

SHAUB: Thanks.

KEILAR: And coming up, are former Trump loyalists leaving the president more and more isolated? The latest, the president's ugly spat with Attorney General Jeff Sessions, who Trump has reportedly nicknamed Mr. Magoo. Sessions has now been seen dining out with the man overseeing the Russia investigation, Rod Rosenstein. We're going to discuss that next. And moments from now, the White House press briefing. You can see

we're ready for it. This is taking place here in just a few moments as the Dow has dropped over 500 points since the president's announcement on steel tariffs. We'll bring that briefing to you live.


[14:17:18] KEILAR: We do have some breaking news. As you can see there on the right side of the screen, the markets are taking a tumble, down more than 500 points because of an announcement the president made this afternoon.

Here with us now is Richard Quest, CNNMoney editor at large and host of "QUEST MEANS BUSINESS."

Richard, walk us through what's happening here.

RICHARD QUEST, CNNMONEY EDITOR AT LARGE: Just look at that chart because that tells the story of the day. Now, the market had been a little bit up and down, it really was not sure which way it wanted to go.

And then look at that, just around 12:30 as the president announced in a very casual way, not a formal announcement, he is in the White House, he is with the steel makers, and he just casually let slip that next week they will be introducing steels on aluminum and steel imports and the market literally goes sharply lower. And that has been the story of the whole afternoon.

And the reason is people are now seriously worried about the tit for tat. What is going to be the response of countries like India or China or those that are directly affected by those steel tariffs?

You see the problem we've got, Brianna, is that he announced tariffs with no details. He literally pulled the pin out of the grenade, but hasn't told us where it is going or how it's going to explode or who is going to be affected, or what the extent of it is going to be. And as a result the market is saying this is a protectionist move and they are seriously concerned.

KEILAR: Yes, as they worry maybe this leads to a trade war. We'll see if that tit for tat you are describing happens.

Richard Quest, as always, thank you, sir.

QUEST: Thank you.

KEILAR: Now, President Trump is now fuming after his Attorney General Jeff Sessions pushed back on the president's latest insult, calling Sessions' handling into an investigation into alleged surveillance abuses disgraceful. CNN captured this exclusive video of Sessions and the Deputy Attorney General Rod Rosenstein, that would be the man overseeing the special counsel Robert Mueller's team.

So, this video you can see they are leaving the Justice Department, they end up walking down the street. At one point, Sessions actually pumps his fist in the air and later, "Axios" snapped pictures of them ding at a fancy Washington restaurant. This right near the Trump International Hotel not too far from the DOJ.

It's significant to see them together because Rosenstein is overseeing the special counsel investigation into Russian election meddling now that Sessions months and months ago recused himself from doing so.

[14:20:06] And then the "Washington Post" reports that President Trump's public shaming of Sessions over that recusal is now part of special counsel Mueller's investigation.

Joining me now, Nia-Malika Henderson, CNN senior political reporter, as well as Joseph Moreno, he led national security prosecutions at the Justice Department. And Olivia Nuzzi, Washington correspondent for "New York Magazine".

OK, Nia, I mean, this is pretty -- it is so is interesting to see this happening. What's your reaction?

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: It is. And under a normal administration, right, this would be nothing. It would be the attorney general, deputy attorney general out having a meal. But under these circumstances, I mean, it feels like it is a little low key shade, right, of Sessions basically rebuking the president who has been so tough on him over the last many months because of his recusal from the Russia investigation. So, it seems to be a continuation of Sessions pushing back on that tweet that Trump released earlier this week and essentially saying, you know, the buck stops here and he is not going anywhere, right?

And so, that I think is the context. We're seeing that in. I mean, who would have thought that we would care about what seem to be undercover video of Sessions dining with staffers and the DAG. So, yes, that is the town we're in at this point.

KEILAR: I want to know what all of you think about this. Joe, what do you think?

JOSEPH MORENO, FORMER FEDERAL PROSECUTOR: Brianna, it is fascinating seeing this spat sort of uncovered in real time. I mean, from a -- I'll defer to you on the political ramifications, but from a legal perspective, Attorney General Sessions is absolutely correct in how he is handling this probe. I think most in the legal industry would agree that aside from your feel about Senator Sessions politics, as attorney general, he has taken his position seriously, he respects the rule of law, and the way he is referring the idea of if there are inquiries about how DOJ attorneys and FBI agents handled the FISA process, it should be looked at by the inspector general. That's exactly the way it is supposed to play out.

And in the case of this particular inspector general, Michael Horowitz, is a consummate professional. I worked with him for years. He was a partner at Cadwalader, Wickersham & Taft with me. He absolutely is a straight shooter. He is nonpartisan. And if anyone will handle this properly, it is Mr. Horowitz. KEILAR: I wonder what you think, Olivia, because we know that if you

are the attorney general, you can just have a meal in your office, you probable even have a nice area where you could have a private meal.

HENDERSON: A $31,000 dining room set maybe.

KEILAR: That is HUD and apparently Ben Carson is saying, no, he doesn't want that expensive dining set. Not having to do with this.

But when you think about that, do you think that this is a purposeful shade as Nia said?

OLIVIA NUZZI, WASHINGTON CORRESPONDENT, NEW YORK MAGAZINE: I would like to believe that it is a purposeful shade because it is so hilarious. And this is a tabloid president and you have to remember, Donald Trump I don't think is affected by traditional journalism the same way that most politicians in Washington are. But I think something that would really get to him would be seeing undercover photos as you said of a dinner that he was likely not invited to and probably wouldn't have attended if he was. We know that he only really eats at his own restaurant here when he leaves the White House.

But I think that this is something where if he turns on CNN or he looks at the paper tomorrow and he sees photos of this, I think it would really get to him and would further contribute to this whole idea that he is under attack for him.

KEILAR: If he had eaten at the Trump Hotel, we wouldn't even have to ask the question if it was shade, right? There would be no question. We have a lot more to talk about, a lot of chaos in the West Wing including the former comms directors, one of the former comms director talking about a culture of fear inside the White House. We'll be discussing that next.



[14:28:12] ANTHONY SCARAMUCCI, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR: I think it's the chief of staff. I think there is a culture of fear inside the White House. People are afraid to talk to each other.

Morale is terrible. And the reason why the morale is terrible is that the rule by fear and intimidation does not work in a civilian environment. So, here we are, it's messed up. It will be up to the president to figure out if he wants to fix it or not.

I predict more departures. I hold the White House chief staff accountable for that.

CHRIS CUOMO, CNN ANCHOR: Kelly you hold accountable.

SCARAMUCCI: No question, because he had the information related to Porter. And I don't understand why he would allow Hope to date Porter if he's got that information. CUOMO: How can he keep her from dating --


SCARAMUCCI: No, my point is, come on, he had the information. He tried to cover up the information. He tried to get other people inside the White House to cover up the information for him.

CUOMO: You believe Kelly covered up the information about (INAUDIBLE)



KEILAR: Well, that is the former communications director, I mean, he was only for 11 days, but still, Anthony Scaramucci talking about the chaos inside of the White House.

My panel back with me now on this.

OK, you're hear -- it's interesting to hear him describe that and I wonder if that sort of hues to what you have heard about what's going on inside of the West Wing right now.

HENDERSON: Yes. I mean, I think that is certainly one interpretation, right, that it is all Kelly's fault and Kelly has ruled with an iron fist, blocking some people like Jared Kushner, people like Ivanka access to the White House.

But listen, that is what a lot of people thought this White House needed, right, some sense of order, some sense of discipline. And this military guy some people thought was the way to get it. But the knives are clearly out for Kelly at this point. And this idea of, does he survive, right?

I mean, Kushner, obviously blocked him in terms of the downgrading of security clearance. And Jared Kushner has always sort of been the crown prince of this White House. And what happens? I don't think anybody knows how this plays out. Kelly seemed to be on thin ice in the wake of the Porter thing.