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EARLY START

Attorney General Ordered To Open Formal Investigation; Pompeo To Meet With The King and Prince in Jamal Khashoggi Disappearance. Aired 5-5:30a ET

Aired October 16, 2018 - 5:00   ET

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


[05:00:00]

ROMANS: And call it the results of an unsanctioned interrogation gone awry.

Senior International Correspondent, Sam Kiley, is in Riyadh for us. And Sam, while we're waiting to hear from the Secretary of State and to hear from the Saudi King, a shifting -- a shifting explanation here from the Saudi's looks like it's underway.

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, radical shifting in explanation. I should say though, that this has emerged from CNN's digging and private confidential sources.

The official line is that still that Mr. Khashoggi disappeared, but the Attorney General has been ordered to open a formal investigation here in Riyadh into his disappearance.

And we are hearing from several sources that there has been, since about Saturday night, and efforts been put in to preparing a statement that would, in part, admit first of all that "The Washington Post" columnist is dead and secondly, but he is dead of as a consequence of something that went wrong rather than a policy decision to murder him and I think that's a crucial distinction.

On top of that, Mike Pompeo, is due to see, not only the King, but the Crown Prince later on today and, indeed, to have dinner with them. And it was the Crown Prince who really was the author, certainly of the hard line denials that came out of Saudi Arabia, right up until the King himself reached out to the U.S. and Turkish presidents and then began to get a grip on the situation and offer a degree of conciliation.

But the family have asked for an international investigative process to go on whatever finally we learn from the Saudi's. I think that's unlikely, frankly, to be met with. The Saudi's are very keen to preserve their own sovereignty, but nonetheless, I think we're going to get a lot of revelations over the course of the next 24 hours.

ROMANS: Yes, I would say so. You know and we've also learned, CNN has learned, Sam, that the Kingdom of Saudi Arabia has considered delaying the Saudi Investment Conference, this Davos in the Desert, until after the investigation. There's certainly a lot of pressure for executives to drop out. Many

have. What do we know about the plans for the Treasury Secretary, Steven Mnuchin? He said he was still going. There were terrorists financing talks that would be underway on the sidelines of this conference. You think he still goes?

KILEY: Well, I -- there are two things going on there. There is the relationship between the United States and Saudi Arabia, which is absolutely crucial, not just commercially, but as you had suggested there in terms of tracing the terrorist funding and financing, intelligence, in general, they're very tightly knitted together, as the are with the United Kingdom.

So, there is -- that is a relationship that Mr. Pompeo needs and wants to and will preserve and then you have the public face of Davos in the Desert, I think it really depends, from the American Administration, what emerges over the next 24 hours, in terms of the narrative.

They have, as Donald Trump said, until Friday to decide whether or not to enter -- to publically endorse the investment conference, but that relationship, I think, is absolutely critical to both sides.

ROMANS: So fascinating. The optics of the shaking hands and doing business at a big deal making summit when you've got an international incident and a murder of a journalist. That's hard to square those optics. All right, Sam, thank you.

BRIGGS: The White House still plotting it's next move in response to Khashoggi's apparent murder. President Trump telling reporters, he spoke to the Saudi King Salman for 40 minutes on Monday and seems to be accepting his denials.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The King firmly denied any knowledge of it. He didn't really know, maybe, I don't want to get into his mind, but it sounded to me like maybe these could have been rogue killers, who knows.

All I can do is report what he told me and he told me a very firm way that they had no knowledge of it. He said it very strongly and it sounded like he, and also the Crown Prince, had no knowledge.

(END VIDEO CLIP)

ROMANS: "The Washington Post," where Khashoggi was a contributing writer has published an op-ed entitled, "Who Needs Saudi Arabia." The newspaper's editorial board argues the president is overvaluing his relationship with the kingdom.

They write, the reality is that Saudi Arabia has everything to loose from a break in relations, while the United States no longer needs the kingdom as much as it once did. Whatever the outcome of the Khashoggi case, a fundamental reshaping of the relationship mandated by Congress, if necessary, is imperative. BRIGGS: Secretary of Defense, James Mattis, making it clear overnight he has never talked to President Trump about leaving this Administration. It comes after a bruising "60 Minutes" interview, where the president said Mattis was "sort of a Democrat." And he claims he knew more about NATO than his Defense Secretary, who, by the way, was once a top NATO commander.

But on a plane to Vietnam overnight, Mattis said this.

(BEGIN VIDEO CLIP)

JAMES MATTIS, SECRETARY OF DEFENSE: I'm on his team. We have never talked about me leaving and as you can see right here we're on our way. We just continue doing our job.

(END VIDEO CLIP)

[05:05:00]

ROMANS: Mattis later told reporters, he and the president spoke, each saying, they're 100 percent with the other. CNN reported in June on differences between Mr. Trump and Mattis that were leading to the friction in the Pentagon.

Or it could be we'd be witnessing a preview of the 2020 election. President Trump and Elizabeth Warren duking it out over a DNA test that confirms the Senator's distant Native American ties, dating back six to 10 generations. If you do the math that means she's between 1/64th and 1/1024th Native American.

When asked if he owes the Senator an apology for all his Pocahontas insults and cracks, President Trump turned the tables.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No, I don't absolutely. I owe her (ph).

UNIDENTIFIED FEMALE: What about the money that ...

TRUMP: She owes the country an apology. What's her percentage, 1/1000?

(END VIDEO CLIP)

BRIGGS: All right, some breaking news now, we have some live pictures of the meeting we discussed, just moments ago, regarding Jamal Khashoggi, "The Washington Post" journalist who disappeared. There is Secretary of State, Mike Pompeo.

Again, he is meeting with Saudi Kings Salman, later expected to meet with the Crown Prince and hopefully, Christine, get some answers as to what happened to Khashoggi two weeks ago today when he entered the Saudi consulate in Turkey.

ROMANS: This is really a high stakes performance here for both the Saudi's and the Americans because there is international outrage and big questions about what happened to a Saudi citizen who has U.S. residency, a journalist for "The Washington Post," who went in to get a marriage license in Istanbul at the Saudi consulate and never came out, never came out. And they story from the Saudi's has shifted.

BRIGGS: Yes, and the Administration clearly wants this to blow over, wants it to go away. Now, a few Congressmen have said, they won't let that happen. Lindsey Graham has said there will be hell to pay if the Saudi's were responsible for killing Khashoggi and Marco Rubio has said Congress will, indeed, act.

That remains to be seen what they can do if the president doesn't want to do anything.

ROMANS: After a 40 minute conversation between the President of the United States and the Saudi King, the president actually seemed to float the trial balloon for the new excuse from the Saudi authorities. They seem to be preparing a statement that there was some sort of rendition and interrogation that went wrong and it was an accidental murder, if there is such a thing.

BRIGGS: Accused by Democratic Senator, Chris Murphy of Connecticut, of being the Saudi P.R. man, we'll stay on this story for you.

But right now, officials say, nearly 250 immigrant children remain in U.S. custody, separated from their families. Court documents show most of the children have parents who were removed from the United States. Of those, just 18 are currently in the pipeline to be reunited with their parents in their home countries.

The filing, part of the ACLU's class action suit against the separation comes as the Trump Administration considers a new pilot program, this one could result in more family separations. The plan would allow migrant families to either remain together while their case moves through the system, or have just the children released while their parents remain behind bars.

ROMANS: All right, a Federal judge throwing out Stormy Daniels defamation lawsuit against President Trump. The adult film star sued in April when the president accused her of a "total con job," in a tweet, after she claimed a man had threatened here to stay silent about her alleged affair with Mr. Trump.

District Judge, James Otero ruling the tweet in question constitutes rhetorical hyperbole normally associate with politics, in other words, free speech. Judge Otero also ruled the president is entitled to attorney's fees. Stormy Daniels lawyer, Michael Avenatti, has already filed a notice of appeal.

BRIGGS: Tributes are pouring in this morning for Paul Allen, the billionaire co-founder of Microsoft. The investor, entrepreneur and philanthropist died Monday at 65 of complications from non-Hodgkins lymphoma.

Allen launched Microsoft with Bill Gates in 1975, a few years after the met at a Seattle private school. Al left the company back in 1982, after he was diagnosed with Hodgkins disease.

Gates remembering Allen as a true partner and dear friend. Personal computing would not have existed without him.

ROMANS: Allen remained on the Microsoft board as he launched his own foundation and a successful investment firm and he bought two sports teams. The NBA's Portland Trailblazers and the NFL's Seattle Seahawks.

Quarterback, Russell Wilson, honored his boss in a tweet, we've lost a friend and a giant. Mr. Allen, thank you for your extraordinary vision, your abundant generosity and for believing in all of us. By your example, you made us all better, kinder, may you rest in peace. Go Hawks.

Actually, you know, you've got to just say he's one of the 20th and the 21st century, but, you know, what Microsoft -- how Microsoft and I would say Steve Jobs and Bill Gates ...

BRIGGS; Yes, I was just going to say, right up there with Steve Jobs and how he changed our lives everyday.

ROMANS: Paul Allen. Yes.

BRIGGS: Ahead, the economy is thriving, but the deficit, meanwhile, is at a six year high.

[05:10:00]

Why the trend shows no signs of slowing.

(COMMERCIAL BREAK)

ROMANS: President Trump and the first lady see first hand the devastation left by Hurricane Michael. They handed out water to storm victims in the Florida panhandle, visited a Red Cross center and met with hard hit farmers in Georgia.

The president praising the storm response and seemingly in awe of Michael's power.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: To see this personally is very tough, very, very tough. Total - total devastation.

(END VIDEO CLIP)

BRIGGS: The death toll from Hurricane Michael now stands at 19 in four states. A body was found Monday in Mexico Beach. The number of missing people there though dropped from more than 30 to just three.

Crews are finishing their third and final sweep of the area using cadaver dogs.

[05:15:00] ROMANS: Mexico Beach residents can return tomorrow but they can't stay there and an 8:00 p.m. curfew is in place until further notice. Schools are still closed in Washington, Liberty, Jackson, Gulf, Gadsden, Franklin, Calhoun and Bay County.

BRIGGS: While much of Mexico Beach was obliterated by Hurricane Michael, one structure is still standing high above the debris. Take a look at the Sand Palace, a three story four bedroom vacation rental on stilts.

Its roof, windows and doors are largely in tact after the storm, although the home will need some repairs. The New York Times reports the Sand Palace was built to handle the big one, able to withstand 250 mile an hour winds.

The co-owners of the new home will be on "New Day" later this morning.

ROMANS: All right, the federal government is racking up the bills, spending so much more than it takes in, it is running the largest budget deficit in six years. It's a sign that tax cuts are curbing how much money the U.S. collects into the treasury coffers.

The Treasury Department says the U.S. deficit rose 17 percent this year to $779 billion. That's the highest since 2012 when the country was spending big to stimulate a struggling economy.

But 2018 is very different. It's not struggling. The economy is strong and growing. Typically deficits shrink during boom times. Government collects more from taxpayers, but because of tax reform, tax cuts, the U.S. is spending more than it takes in, a lot more.

Spending rose three percent, that's because of higher interest payments on debt and increases in defense spending. But tax revenue failed to keep because of tax cuts, government revenue is flat with corporate tax collection down 22 percent, or $76 billion.

The White House defended the tax cuts, they say it's boosting economic growth which will eventually increase tax revenue. The Treasury Secretary Steven Mnuchin said the White House will eventually cut wasteful spending to make up the difference.

And when progressives hear that, they hear oh god, watch out for entitlement.

BRIGGS: Right.

ROMANS: You know?

BRIGGS: Can't help but wonder will the Republicans ever return to deficit concerns as an issue. Let us know what you think @EarlyStart on Twitter. Ahead, imagine this happening to your plane.

Renewed concern about drones after tests show that bigger aircraft may not always win. And who'd win this? Bottom of the ninth, bases loaded, two outs, Coy Wire has the Brewers Dodgers drama next on The Bleacher Report. (COMMERCIAL BREAK)

[05:20:00]

BRIGGS: New impact tests prove large aircraft won't always win in a collision with small drones. A test designed to mimic a midair collision at 238 miles per hour shows that bigger may not always be better. In that test, the drone did not shatter on impact but tore open a M-20 aircraft's wing. A lead researcher says as the number of hobby drones in the air dramatically increases, so too does the risk of a catastrophic event.

ROMANS: If science and the possible end of civilization don't get you interested in climate change, maybe beer will?

BRIGGS: Yes.

ROMANS: A new study published in the journal Nature Plants finds climate change will cause a global beer shortage. That's because it's main ingredient, barley, is sensitive to extreme drought and heat, which would lead to substantial decreases in barley crop yields. The study finds the price of beer around the world would double on average. All right, time for an office pool, everybody. Tonight's mega millions drawing is now $654 million bucks. If you choose the lump sum, that's $372 million. That's all right.

This is now the second largest in the game's history. And by the drawing tonight, it could eclipse the record of $656 million set in 2012. I'll put $5 bucks in. I'll put $5 bucks in.

BRIGGS: OK. You will.

ROMANS: Well, I'm not going to go get the (ph) (inaudible).

BRIGGS: That deserves a breaking news banner if I've ever heard it.

ROMANS: (Inaudible).

BRIGGS: But the breaking news we have for you this morning is this. Mike Pompeo, the secretary of state, in Saudi Arabia meeting with the crown prince, MBS, to discuss what happened to Jamal Khashoggi, the U.S. resident Washington Post journalist who disappeared two weeks ago today when he entered the Saudi consulate in Turkey. We have not yet heard from -- from Pompeo or MBS but we expect to shortly. This is a high stakes meeting, Christine.

ROMANS: And the smiles on their faces, the look. This is a very serious, serious test -- should be a serious test of the alliance between the United States and Saudi Arabia, but is it? Has the president shown that he wants to be tough here on the Saudis for this? And the Saudi story has been shifting. (Inaudible) the meeting's over here (ph).

BRIGGS: Still have not heard from Pompeo but yes, the shifting excuses from the Saudis. We will see what the president is prepared to do. It does not appear that that weapons purchase deal is on the table. We'll talk more about that in just a bit.

ROMANS: Yes.

BRIGGS: But we (ph) talk a little sports now. Cheesehead nation might be a little sleepy this morning. Teams from Wisconsin kept their fans up very late. Coy Wire here with the bleacher report. Good morning, buddy.

(SPORTS)

[05:25:00]

(SPORTS)

BRIGGS: The power of sports. My son would reject my daughter.

(CROSSTALK)

BRIGGS: -- into the garage. Sorry, buddy.

ROMANS: That's not true. All right, Coy.

(CROSSTALK)

ROMANS: Thank you so much.

BRIGGS: Thank you, Coy.

ROMANS: All right. Right now the Secretary of State Mike Pompeo in Riyadh meeting with the Saudi king and crown prince. The Saudi explanation for the presumed death of a journalist is shifting. We are live in Saudi Arabia.

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