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Flynn Sentencing Postponed After Dramatic Hearing; Trump Foundation Agrees to Dissolve Under Court Supervision; Senate GOP Drafting Short-Term Deal to Prevent Shutdown. Aired 6-6:30a ET

Aired December 19, 2018 - 06:00   ET

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


(BEGIN VIDEOTAPE)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: The FBI broke standard protocol in the way that they came in and ambushed General Flynn.

[06:00:05] JAMES COMEY, FORMER FBI DIRECTOR: I'm very proud of the way the FBI conducted itself.

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: This judge repeatedly went back to Flynn to make him say that he was indeed guilty.

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Judge Sullivan said, "Wait a second. This guy should not get away with lying to the FBI."

UNIDENTIFIED MALE: He stopped in front of a judge and said, "No, I lied, and I intended to." None of this stuff makes sense to me.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

JOHN BERMAN, CNN ANCHOR: Welcome to our viewers in the United States and all around the world. This is NEW DAY. It's Wednesday, December 19, 6 a.m. here in New York. Alisyn is off. Erica Hill joins me.

December 19, by my count, that's like six days until Christmas? I'm not good at math, but I am good at presents.

ERICA HILL, CNN ANCHOR: I drove by the Santa countdown clock in my town last night with my kids. Six days.

BERMAN: Good. Second source. Thank you for that.

This morning, Michael Flynn has been ordered to stay within 50 miles of Washington, D.C., and surrender his passport. This is not at all what he expected when he walked into a federal court to be sentenced for lying to the FBI about contacts with Russia during the transition. Not at all.

Everyone thought he would get no jail time as part of his plea deal. What he got instead was a blistering rebuke from the judge, who said he could not contain his disgust. What the White House got was a blistering rebuke of their made-up claims that Flynn was somehow entrapped by the FBI. It wasn't just the judge who did that. It was Michael Flynn, who admitted he wasn't trapped. His lawyers admitted he wasn't trapped. The documents prove he wasn't trapped. Still, the White House press secretary stood by the made-up claim. We're waiting to hear from the president himself on this matter this morning.

Meantime, CNN has obtained a document that shows during his campaign, Donald Trump signed a letter of intent to move forward with negotiations to build a Trump Tower Moscow. The letter is dated October 28, 2015, and bears Mr. Trump's signature. Asked on Sunday about the letter, President Trump's lawyer, Rudy Giuliani, incorrectly told our Dana Bash it had not been signed.

HILL: All of this as the nation barrels toward a partial government shutdown Friday at midnight. Senate Republicans are drafting a short- term spending bill to keep the government funded through February 8, which of course, would not only push the fight over funding for the president's border wall into the new year; it also pushes it into the new Congress. It's not clear whether President Trump is willing to go along with that plan.

Overnight, though, a rare moment of bipartisanship on Capitol Hill. A criminal justice reform bill designed to reduce the population of the nation's federal prisons passing easily in the Senate. The House is expected to pass it, as well, meaning that measure could be on the president's desk by the end of the week.

Joining us now, former special assistant to FBI Director Comey, Josh Campbell; former Clinton White House press secretary, Joe Lockhart; and former U.S. attorney Harry Litman -- Litman.

There is never a dull moment, even in the days before Christmas, when there are supposed to be dull moments. We don't get them with the 12 days of Mueller, as John Berman has said.

When we look at what happened yesterday, what was remarkable and what you laid out so well was just the judge really just going after, as we saw, Michael Flynn and these points that have come up, Josh, about how this was handled by the FBI, how Michael Flynn felt about it all.

JOSH CAMPBELL, CNN LAW ENFORCEMENT ANALYST: It was a very dramatic day. As John mentioned, not as all what we expected, not what Michael Flynn expected, not what prosecutors likely expected going into, you know, this hearing that we've been waiting for, the sentencing.

But obviously, the judge had some issues, and Michael Flynn's lawyer finally realized that the judge was hinting that there was jail time coming your way. There's more work to be done. And so that's what we saw. It is troubling, as you mentioned, the way that the White House responded to this, and you know, Sarah Sanders went out and lied to the American people. Shocker.

I use that term advisedly, because I think that, although she spreads falsehoods from the White House podium, oftentimes. I kind of chalk it up to probably someone lying to her and she just kind of parrots that information. So I think it's important to distinguish. But here's it was a lie, because Flynn's attorney stood in court and

told a judge that, you know, Flynn was not entrapped. He wasn't deceived into not getting a lawyer. He knew what was going on. He didn't feel like, you know, the FBI was doing anything wrong; and then Sarah Sanders went out in front of the White House at the podium and lied and said, "No, he was trapped. He was ambushed," which shows again, this pattern of the attacks on law enforcement, on the FBI.

And again, you know, she went out yesterday and lied, but I guess we call that Tuesday now.

BERMAN: Let's just very quickly -- it was, in fact, Tuesday. That is the one thing there that was true. Let's just play Sarah Sanders and then -- and juxtapose that to what happened under oath inside the courtroom.

Here's Sarah.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Very quickly, about Michael Flynn. He has cooperated with the special counsel's office and met with them 19 times. Is there a particular reason why the president has not said that he is a rat the way that he has said that Michael Cohen is a rat for cooperating with prosecutors?

SANDERS: We know Michael Cohen to be a liar.

We're arguing that he was certainly ambushed, that the FBI, that we know had clear political bias.

UNIDENTIFIED MALE: Flynn said that he knew that it was illegal to lie to the FBI, and he was ready to accept responsibility before agreeing to a delay in sentencing. Given that, are you in a position now or would you like to revisit your comments earlier today that the FBI ambushed Flynn?

SANDERS: No, we still firmly believe -- we don't have any reason to want to walk that back.

(END VIDEO CLIP)

BERMAN: All right. A dramatic reading now from inside the courtroom. Judge Emmett Sullivan asked Michael Flynn, "Were you not aware that lying to FBI investigators was a crime?"

Michael Flynn responded, "I was aware."

Judge Sullivan, to Flynn's attorney said, "Was Flynn entrapped by the FBI?"

Flynn attorney: "No, your honor."

Judge Sullivan: "Are you continuing to accept responsibility for your false statements?"

Michael Flynn said, "I am, your honor."

So Michael mFlynn and his attorneys refuting the White House there.

And I think this morning, as we look at what happened, Harry, yesterday, the judge wasn't just making a statement to Michael Flynn, wasn't just making a statement to Michael Flynn's attorneys.

But it seemed he was making a statement to the White House, one that he wants to last, perhaps, going on from today into the future, which is to say "Your argument's not working. It doesn't sit well with me, and it doesn't sit well with the facts. And I might punish Michael Flynn and his attorneys for saying what you've been saying publicly for the last few weeks."

HARRY LITMAN, FORMER U.S. ATTORNEY: "And I'm in a position to do it." There is no reason to walk it back except the facts and the truth.

You enter into the courtroom, and now you have the crucible of you're under oath, something the president has steadfastly avoided being. And it comes out one fact at a time.

And I think you're very right. He was not only talking to the White House but maybe the American people. We have this sort of political hubbub and a kind of debased debate, where you can have these outlandish claims advanced by Rudy Giuliani or Donald Trump. And then you come to court. And in some ways, it's heartening. The facts will out. And this came up also in the foundation case yesterday. It's come up in Manafort. The court is where things like this can be settled. And it really blinkers reality that they have now doubled down on this fantasy vision that's simply a false talking point.

HILL: And it is remarkable, too, when you hear that coming from the podium. And Josh, you set it up well. That oftentimes you look at it, and Sarah Sanders is doing her job, right? She is going out there and telling us what she's been told she's supposed to do. But when she is directly refuting, the main players involved have said, is there credibility left?

JOE LOCKHART, CNN POLITICAL COMMENTATOR: I don't think so. I don't think this is new news, though. And I'd quibble with she's doing her job. She's not doing her job. I mean, I did that job. I did the job during an impeachment. So you know, kind of the toughest moments. And that's what makes the job hard.

But you have to adhere to truth, and she has stopped doing this. This is kind of the equivalence of Sean Spicer saying that was the biggest inaugural crowd ever. And you looked at the crowd, and there was hardly anybody there.

And it -- and it has an impact, you know. The U.S. government and the spokespeople for it have traditionally been the thing that the rest of the world counts on. You know, we didn't -- we don't send out Baghdad Bob or, you know, Tokyo Rose. We send out people who we -- the rest of the world can count on. And right now we've abdicated that across the board, and in many ways.

But, you know, specifically, you know, the rest of the world does not tune in and believe what the U.S. government says any more.

CAMPBELL: And what's so interesting, and Joe and I have talked about this at length, is, you know, there are similarities to history here, where you've had an administration that was squaring off with the FBI. You go back to President Clinton. He and Louis Freeh, the FBI director, hated each other. There was no love lost between the two. And obviously, the president was under investigation.

He did not try to burn down the institution and try to completely undermine our system of justice for a political end. Obviously, there was back and forth and, you know, both sides were defending themselves, but this is wholly different. We're seeing the systematic continual campaign to discredit law enforcement and every single day we have a new example.

So I'm glad that we're calling this out. It's exhausting, but it's important work, because otherwise, the viewers are manipulated.

LOCKHART: But I think just to echo what Harry and what Josh said, the judge was basically standing up for institutions yesterday, and not just with the president and Sarah Sanders. I think that the conservative right wing, you know, media environment. You know this -- they all work together and, you know, the FOX News people and the White House fuel these sort of rumors and misstatements. And I think what the judge was saying is, you know, "It's OK for people to go on and say they are lying, but in my courtroom facts matter."

BERMAN: That's exactly right. What he was saying is if you bring those arguments --

LOCKHART: Yes.

BERMAN: If you bring what is being said from the Oval Office and the White House press room in here, you're going to jail.

LOCKHART: Yes.

BERMAN: Which is really extraordinary to see that.

A lot of other news -- oh, did you want to jump in?

LITMAN: He was standing up for two things. The truth but also the gravity of the offense, because part of the White House attack is, "Oh, well, this was just a silly little lie." I think he actually went back and said look how -- he was running a rogue foreign policy, was Flynn, from the transition office. That's -- that's no child's play.

BERMAN: All right. Also no child's play, the Trump Foundation, which has been ordered to be shut down as part of this deal with the New York state attorney's office, even as it still will be sued in this case. And this is really interesting to me.

So the foundation has to shut down and disperse the money; and it might very well be that President Trump and his family are shunned. They will not be able to sit on charity boards. So, as people have noted, among Jeffrey Toobin among others, you know, he has power to launch nuclear weapons but he can't sit on a charity board?

LITMAN: That's -- and look, it's a similar dynamic. Remember when this suit was brought, the president crowed about how political it was. He would never settle, et cetera. And then here comes the process of the law and facts and discovery and deposition.

And lo and behold, he's 100 percent wrong. Barbara Underwood in New York is right. It's outrageous what they were using the charitable foundation for. And now the legal process which he has so tried to elude really wins. It's a heartening day in that sense.

CAMPBELL: And he can fire Bob Mueller, right? I mean, he can interfere with the U.S. Justice Department. He can't interfere with the New York state attorney general.

So states' rights advocates around the country should be celebrating the power of the New York attorney general to go after the facts wherever they lead. And here, I think this is yet another example that she's onto something. There's something here that they're looking at or they wouldn't be as aggressive. You look at her statement yesterday basically calling this a personal pocketbook for the Trump family. Stay tuned, because this is going to get very interesting.

LOCKHART: And I think some of this stuff is beyond -- people don't want to pay attention to it, but every once in a while, you get something that people gets. And I think they get the term "foundation." The little tidbit that caught my eye yesterday, was that he dispersed $7 to pay for his son's boy Boy Scout fees.

I think people -- even if you're a Trump lover, you say that doesn't work. I mean, you're a billionaire, and you can't spring for $7. And you've got to use your charity?

So I think this one we haven't heard the end of. And this will be an ongoing embarrassment for Trump as we move forward.

LITMAN: There's a change at the top coming at the New York A.G.'s office, from Barbara Underwood, a civil servant, to the elected official, and although she just appears to be wanting to go more aggressively at the entire Trump empire.

CUOMO: Yes, well, it won't make it easier for Donald Trump. That's to be sure.

Very quickly, two last points here. No. 1, the signed letter of intent and the real-estate document, you know, Cuomo had -- Christ Cuomo has that last night. Rudy Giuliani just the other day said the president hadn't signed it. He has. Rudy Giuliani was wrong. I'm not sure he knew.

LITMAN: Tuesday, yes.

CUOMO: Again, it's Tuesday there. But the impact of that document, Harry, very quickly? LITMAN: OK. It's political synergy, as they say. It's another

example of the -- of a kind of outrage of the president's -- and possible criminal conduct in the president's conducting commercial enterprise, mixing them with his -- with his political ambitions and keeping it from the American people.

BERMAN: And was doing it, that's a signed document in 2015. And we know from Michael Cohen and others that he was having conversations well into the campaign. Rudy Giuliani even allowing all the way to election day 2016.

And then finally, this last mystery point. A judge ruled yesterday that Robert Mueller can bring in, for questioning before a grand jury, this mystery corporation, which we now know is a foreign-owned corporation, but we don't know anything else.

CAMPBELL: That's right. It's a mystery. We're getting additional information, you know, with each passing day. But I think the large point here is that there are so many threads that Robert Mueller is looking at here, that he's pulling, he's you know, testing, trying to determine, OK, what kind of illegality are we dealing with?

And I know as a former investigator, you may go into a case looking for one set of facts. But as soon as we start learning other things, and we know that's within his mandate, that he can not only, you know, look at Russian collusion, but also any other additional crimes that he discovers in that pursuit, he's going to go after them. So if we're learning about this now, he's probably -- this is part of some strategy. I'm sure that investigators have been whiteboarding, attempting to determine how do you go after this information?

But again, it's going to be the finances. We're starting to see that now.

BERMAN: Gentlemen, thanks very much.

I will note, as we end this week or get towards Christmas, what's happening is the facts are catching up here.

HILL: Yes.

BERMAN: And they're catching up in a federal courtroom. They're catching up with this case, with the Trump Foundation. I don't know where the facts are going to lead. I don't think any of us know where the facts are going to lead. But as they are revealed, they become a real problem for this White House, and they're having a hard time dealing with it.

All right. The Senate passed sweeping changes to the federal criminal justice system. This was a remarkable bipartisan moment. It's faced an uphill climb. It took a lot of people working to make this happen. We'll tell you about it next.

HILL: Plus, an unbelievable rescue is captured on video. Officers pull a man out of a burning car. We'll show you more of this ahead.

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[06:18:36] HILL: Criminal justice reform is now closer to becoming a reality. The Senate overwhelmingly approving a landmark bill that eases prison sentences for nonviolent offenders, among other measures. It will now go to the House, where it is expected to pass.

Joining us now, "New York Times" op-ed columnist Frank Bruni; CNN White House correspondent Abby Phillip; and CNN senior political analyst John Avlon.

As we look at this, this is a lovely win in many ways, for Republicans to go out and say, "Oh, look at this beautiful piece of bipartisan legislation," that's obviously been in the works for some time, John. And they might want to ride that for a little bit, because this is big positive.

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: This is a big deal. I mean, to see bipartisan legislation out of Washington these days is the force of revelation. Who knew it could happen?

And this is something that President Trump fought hard for. Mitch McConnell was trying to slow-roll it, and (UNINTELLIGIBLE) has for many years. And also, it should be said, Jared Kushner worked very hard on this; but this was a genuine bipartisan effort.

And I think, because Trump was able to pull a Nixon in China, being a tough law-and-order guy, allegedly, but backing this kind of reforms with the support of a lot of governors who have implemented this in different southern states. It was able to get this kind of bipartisan margin. So it's a big win to show that the possibility of doing something constructive on controversial ground is not utterly dead in Washington, D.C.

BERMAN: Yes, I think you can go even further on President Trump. It's only because of him that this passed or will pass, the House now, as opposed to before.

[06:20:00] It was only his pressure on Mitch McConnell that even got it to the floor. This was dead a week and a half ago. We were hearing from McConnell's people, this wasn't ever going to come to the floor. Tom Cotton's people were very confident they'd mucked it up.

AVLON: Yes.

BERMAN: And 87 to 12 was the final vote, because the president pressed for it. So that's the politics of it. And bipartisanship is wonderful.

The policy here, it's fascinating, Frank. I mean, look, I'm old enough to remember the '90s, when everything was about making sentencing tougher, you know. Three strikes and you're out.

LOCKHART: Let's not forget super predators.

BERMAN: You know, and this really, the pendulum has swung back. And this is a law that will make a big difference to a lot of peoples' lives.

FRANK BRUNI, OP-ED COLUMNIST, "THE NEW YORK TIMES": It will make an enormous difference. And crime is down, and that's what paved the way for this.

But there was also -- what this did is it eliminated or began to eliminate some things that were in place that really affected people disproportionately based on race. And what I think, and what's interesting is not just Democrats but Republicans saw that.

Now before we overstate what's happened here, policy-wise and the effect it's going to have on people, I think it's important to remember that it's a minority of inmates who are in federal prisons. And this only affects them. But the hope is that states that haven't done some of these reforms already -- and some of them have -- will see the federal government take this position, take this lead, and follow suit.

HILL: And it will be fascinating to see what does, ultimately, come out of it. The president has said, obviously, he will sign it. As we're at this point, Abby, we want to bring you in now.

We see all this happening and, yet, we still don't know what's going to happen in terms of a government shutdown.

BERMAN: Right.

HILL: We hear Republicans are drafting a continuing resolution to fund the government through February 8. But the president's position is, at least as of 6:21, as far as I know, Abby, still a bit of a mystery.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Yes, that's exactly right. To connect the two conversations, I think it is such a contrast to see how the White House operated with this criminal defense bill, criminal justice reform bill, and how they are operating when it comes to funding the government.

There are -- there are almost no parallels in a lot of ways. The president is kind of on the back burner her. Republicans on the Hill are waiting to see what exactly he wants, waiting to watch him articulate his desires when it comes to funding the government and also when it comes to the border wall.

And beyond that, the president in that -- you know, in that reform bill demonstrated a willingness to push back against some of the hardline elements of his party in order to do something that he thought was right, that he thought was necessary.

And frankly, he has not been willing to do that when it comes to immigration, when it comes to the border. There has not been a willingness to strike down the middle and to create some kind of grand bargain that he can then go and tout as a political win, beyond it just being something that is necessary to continue the operations of the government. So I think this week has really demonstrated the White House really

being back on its heels, waiting to kind of see where the political wins are going, and not really sure how to resolve this problem.

The president knows, I think, at this point that they have to cave on the wall. They have to cave on at least what the definition of the wall is and how they're going to fund it. And -- but the problem is they don't know exactly where that cave is going to go.

And what they're going to end up doing, probably, is relying on Hill Republicans, on McConnell's office, to basically strike some kind of short-term deal to get them just into the new year, basically leaving the president, probably, without a wall permanently. He's probably not going to get it at this point, because once Democrats take control, there's no way they're going to let anything resembling a wall through that chamber.

BERMAN: Last night, Abby, didn't he basically tweet that he would accept some kind of steel Venetian blinds? Maybe --

AVLON: Vertical Venetian blinds.

(CROSSTALK)

PHILLIP: The wall is a rhetorical concept, but it's not a real thing.

BERMAN: The continuing resolution, have they given any sense? Because it was even after I went to sleep that it became clear that that's what Mitch McConnell may push for, you know, kicking this down the road until February. Will the White House accept that? Do we have any notion of that, Abby?

PHILLIP: It's not clear whether they will. But again, this is one of those things where it's -- I think a lot of Republicans on the Hill, what you're hearing from them is, well, we'll see if he signs it.

I think the president is going to be -- his back is up against the wall here. On Friday, he is scheduled to leave for his winter vacation in Mar-a-Lago, Florida. The question is, is he going to hold up a funding bill, if it reaches his desk, and say, "I'm not signing this, leaving the government closed, and then going to Florida?" Or is he going to stay here?

I think it's just -- it seems that everybody thinks that what is going to end up happening is he's going to take the out and push this into the new year and -- and keep going.

Again, I think the political fight for him is for his base at this point. It's not necessarily because he thinks he's actually going to win this one.

AVLON: It's just remarkable. A week ago, President Trump was in the Oval Office declaring he'd be proud to shut down the government, taking that really hard line. And it shows the dangers of that kind of zero-sum approach to politics. If he'd actually tried to do the art of the deal, this is a point of actual maximum leverage where Republicans still control Washington. Kick the can with a C.R., continuing resolution into February. You lose a lot of that leverage. And so, you know, does he really want the optics of sitting in Mar-a- Lago and munching on a crab claw and shutting down the government. Probably not going to happen.

[06:25:06] HILL: The other thing that's remarkable is the -- is the lack of understanding -- and maybe it's a lack of a desire to understand, I don't know -- of how things actually get funded in government, period. And what we're hearing from even Sarah Sanders, about, well, here are all the ways we can pay for it, which at the end of the day, keeps coming back to taxpayer money.

BRUNI: Yes, and I'm not sure how they're going to pay for it. And the big picture here is Donald Trump has enormous egg on his face.

If we remember one thing from his campaign and history, we will remember "Build the wall, build the wall. Mexico will pay for it." Right?

Here he is, two years into his presidency. That wall isn't being built, despite all of those lies that he told in the Oval Office with Chuck and Nancy. And come February, come late January when Democrats have control, this wall is not going to get built. It's just not going to get built. And this was his fundamental foundational campaign promise, and he has kept having to back away, back away, and surrender.

BERMAN: So it went from a big wall that Mexico was going to pay for to "artistically designed steel slats, so that you can see easily through it" that will be paid for by shifting money from one department to another, is not as catchy, as a slogan.

HILL: It's a mouthful, too.

BRUNI: Are we going from -- we're going from an iron curtain to the steel venetian blinds?

BERMAN: Blinds. Abby -- Abby, do we know -- while we have you at the White House, do we know if the president is going to weigh in on Michael Flynn? That was a remarkable press conference yesterday with Sarah Sanders where she refused to back down there. We haven't heard from the president yet on this today.

It's hard to imagine he'll resist. He comments on everything else.

PHILLIP: Yes, that's such a great point. I mean, it is hard to imagine that he will resist.

But in some ways, the president was so repudiated in that hearing yesterday. He started the day by saying, "Good luck, Michael Flynn. Can't wait to what you have to say in this hearing."

And then several hours later, he had the judge basically saying -- taking the president's own words, that he implied that the FBI had tricked Flynn, and asking Flynn directly, "Do you believe that you were tricked? Do you believe that you were trapped? Do you actually plead guilty to this? Do you take fault for what you did?"

And Flynn said yes to every single one of -- Flynn said yes, he takes the fault and that no, he was not trapped, that he knows what -- knew what he was doing then. He knows what he's doing now. And that was a message to President Trump.

But it's a matter of time in a lot of ways before the president weighs in on this, because I think, in some ways, he -- he can't help but do it, can't help but punching back, especially at a moment like this when he has been so directly contradicted in a court of law.

I -- you know, the one thing, though, is if you were the president's lawyers or even if you're Michael Flynn's lawyers, you want the president to stay really quiet right now. Because it seemed very much that all of this talk of entrapment came back to bite Michael Flynn in that courtroom.

He could have walked out of there with zero jail time, and he was staring prison time in the face when that -- that judge was carrying down this really harsh repudiation of him.

So I think a lot of his supporters probably want to step back a little bit, because they're clearly not helping him. The judge is not living in a bubble. He's aware of everything that is going on out in the world, and it is not lost on him, what is being said about this case.

BERMAN: All right. Abby, John, Frank, thank you very much. Merry Christmas, if we don't see you again before them.

All right. A bombshell "New York Times" report revealing a new massive privacy scandal for Facebook. Their data sharing appears to be bigger than previous disclosed, and it includes granting outside companies the ability to read private messages. Do they not get the "private" part of the private messages thing?

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