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U.S. Stocks Falling Sharply on Trade Truce Doubts; Bob Corker Says bin Salman Would Be Convicted In 30 Minutes If on Trial; Mueller to Reveal

December 5, 2018

xfdci HALA-GORANI-TONIGHT-01

<Show: HALA GORANI TONIGHT>

<Date: December 4, 2018>

<Time: 15:00:00>

<Tran: 120401cb.k40>

<Type: SHOW>

<Head: U.S. Stocks Falling Sharply on Trade Truce Doubts; Bob Corker Says

bin Salman Would Be Convicted In 30 Minutes If on Trial; Mueller to Reveal

How Flynn Cooperated in Probe; UK Parliament Begins Debate on Brexit Plan.

Aired 2-3p ET - Part 1>

<Sect: News; Domestic>

<Byline: Hala Gorani, Alex Marquardt, Claire Sebastian, Shimon Prokupescz,

Stephen Collinson, Elie Honig, Erin McLaughlin>

<High: Lindsey Graham says, “There’s not a smoking gun. There’s a smoking

saw.”>

<Spec: Stock Market; Trade: China; Mohammad bin Salman; Murder; Michael

Flynn; Justice; Brexit; UK>

<Time: 14:00>

<End: 14:59>

[14:00:00] HALA GORANI, CNN HOST: Hello, everyone. Live from CNN London, I’m Hala Gorani. Tonight, stunning sound from U.S. senators as they hear from the CIA director on the murder of Jamal Khashoggi. We are live in Washington.

Also, tonight, a court filing that could have major implications for the U.S. President. Any time now, Robert Mueller will provide details on just what Donald Trump’s former national security adviser told his team and it could be explosive.

Also, a horrible day for Britain’s Theresa May. Her government loses a series of key votes over Brexit. We are live in Westminster to ask can she survive?

First, though, want to bring you turbulence on Wall Street. It’s -- we are seeing severe losses for the Dow Jones industrial average. And other main indices. Here’s a live look at the big board for you. We are down about 800 points a few minutes ago. We are off session lows and a down day across the board and throughout the day. Off 680 points and some change. Still above 25,000. Now, what is behind these losses is quite simply fears over that trade truce between the U.S. and China. Initially there was some optimism that perhaps that truce would morph into something more significant down the line but then cold water was poured on the idea that this was in any way meaningful. Still a lot of work needs to be done between the U.S. and China on trade and as a result some of the companies that could suffer from a trade war are losing ground, pulling the Dow Jones industrial and other indices down with them. We’ll get a live update in moment.

I want to bring you the latest on Khashoggi and Washington and the outrage and claims of absolute certainty from two American Republican senators that Saudi Arabia’s crown prince himself ordered the murder of Khashoggi. Lindsay Graham and Bob Corker delivered startling comments on Khashoggi’s death after a long-awaited briefing from the CIA director. Here’s what they both told reporters about it.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: MBS, the crown prince is a wrecking ball. I think he is complicit in the murder of Mr. Khashoggi to the highest level possible. I think the behavior before the Khashoggi murder was beyond disturbing. You have to be willfully blind to not come to the conclusion it was orchestrated and organized by people under the command of MBS.

SEN. BOB CORKER (R) TENNESSEE: I have zero question in my mind that the Crown Prince MBS ordered the killing, monitored the killing, knew exactly what was happening, planned it in advance. If he was in front of a jury, he would be convicted in 30 minutes.

GRAHAM: I think Secretary Pompeo and Mattis are following the lead of the President. There’s not a smoking gun. There’s a smoking saw.

(END VIDEO CLIP)

GORANI: A smoking saw. That’s been making the rounds, as well. Alex joins with me now with the latest. These are top level Republicans on Capitol Hill at odds with the President. What’s behind this? Why are they breaking with the President on this particular issue?

ALEX MARQUARDT, CNN SENIOR NATIONAL CORRESPONDENT: This is fascinating to watch, Hala, because this is something where Republicans, Democrats have been operating and working in lockstep and incredible to watch the Republicans, particularly people like Graham who’s been such an ally of the White House, split off from the White House. And really, simply because they find it’s something so egregious that they really feel like they need to act. What we have heard from Corker and Graham in the past is very strong language. They were convinced already that MBS was behind the killing and at the same time they were irate last week that the head of the CIA did not join secretaries Mattis and Pompeo on the hill to brief. Remember, this is the person who probably here in the states knows more about the Khashoggi murder than anybody else, senior-most official who heard the tape that the Turks gave to the CIA of the murder of Khashoggi. So, they really wanted the hear from her and one by one, not just Republicans but Democrats, as well, they came out of that classified briefing room known as a SCIF, more convinced than ever that Mohammad bin Salman is behind this. The next question --

GORANI: Would they have -- sorry. I was just -- a quick one. Would they have heard the tape, as well, the senators? How much of the evidence were they able to read and hear for themselves or is it they just rely on the briefing?

[14:05:00] MARQUARDT: That’s not clear and the tape thing is interesting, as well, because the President has said that he didn’t listen to it. John Bolton, the head of the NSA, said he didn’t listen to it. Pompeo said he didn’t listen to it. For various reasons. The President said he just didn’t -- wasn’t a nice tape and didn’t want to listen to it. Haspel has. We do know is that despite the mountain of evidence that was already out there and had been presented to these senators who are all in leadership positions that Haspel did offer more information today. They have each said that. So then, how do you respond --

GORANI: We don’t know what specific information?

Reporter: No.

GORANI: OK. So, the big question now becomes, what will these Republican senators do with regards to arm sales to Saudi.

MARQUARDT: Not just arms sales but it’s complicated. You have a number of options. You have arms sales. You have sanctions. You have the war in yes, Yemen that the U.S. is supporting Saudi Arabia on and that’s where it’s complicated. How do you go after someone like MBS, essentially running the kingdom day-to-day? Freeze his assets here in the U.S.? There’s some senators on both sides of the aisle to stop all U.S. support for the war in Yemen. Lindsay Graham definitely wants to stop arms sales. The bottom line is the President has an enormous amount of power here, as well, and they have come out threatening to veto anything that’s going to - - that’s going to upset that relationship. That the President has made it clear that the interest, the str interests of the U.S. are more important than the life of Jamal Khashoggi.

GORANI: Thousand. Top Republicans and senators from the Democrats briefed by the CIA director. Lindsay Graham and senator Corker, two of those with strong language as we said. Graham saying in particular it’s not a smoking gun. He said there’s a smoking saw. We’ll keep our eye on that and the potential impact of this on the relationship between the U.S. and Saudi Arabia.

Let’s get you back to what’s happening on Wall Street. U.S. stocks are falling this hour. Also related in some ways to what the President has said. We are off sessions lows, though. Off 2.5 percent for the Dow Jones. What’s behind the selloff and, Claire Sebastian joining me now, renewed fears that the trade war of U.S. and China really has not been resolved by the President in his meeting with the Chinese leader in Buenos Aires.

CLAIRE SEBASTIAN, CNN MONEY CORRESPONDENT: Absolutely, Hala. Now that the dust settled, it is clear that the two sides are not really aligned in communicating about this. We have very little -- next to nothing on China on the commitments of the U.S. said they made, like purchasing an extra $1.2 trillion in U.S. goods and the President’s tweet today if there’s no deal reached in the 90-day deadline he still is a tariff man and puts failure back on the table. Escalation back on the table. That is making the markets jittery an no jittery and not just trade but a slowdown in the economy triggered by a signal of the bond market. Shorted today bonds yields moving higher. That is a historically a signal that can portend an economic slowdown and taken together are rocking this fragile market but we have to remember, Hala, the markets are closed tomorrow for the funeral of former President Bush and leads to more volatility. People don’t want the leave money on the table ahead of a break.

GORANI: I wanted to show our -- I don’t know if we have the graphic representation of it. It doesn’t really matter but we are seeing big losses. Not just today. Tell me, I don’t have it in front of me, about 1,000 points off just in the last 4 or 5 sessions, I believe?

SEBASTIAN: Certainly, been seeing a lot of volatility in the market, Hala. Extremely fragile time and the two headlines rocking the markets are in play today, trade and the economy generally. Rising interest rates is a big one. We saw some relief last week when we heard from the chairman of the federal reserve he might -- that’s up for debate a little bit and might be willing to slow the path of interest rates in the U.S. a look at the data leading to relief and I think the concerns still remain and you can see just by the move today how fragile the market is around the headlines.

GORANI: You sure can. Thank you very much. We, of course, will keep our eye on what stocks and the markets are doing throughout the hour.

[14:10:00] Court filings are not always riveting reads but a sentencing memo due soon in Washington could unveil some of the biggest revelations yet about the Russia investigation. After a full year of silence, we could finally learn what Donald Trump’s former National Security Adviser Michael Flynn has been telling investigators after he pleaded guilty to lying about his contacts with Russia. Flynn has been cooperating with revelations yet about the Russia investigation.

Flynn has been cooperating with the special counsel’s office for quite a while and Robert Mueller could reveal some crucial information when he recommends a sentence for Flynn today. Flynn became the first person to serve in the Trump administration to cooperate with the special counsel and he could have a lot to tell. You may remember this video during the Presidential campaign. Flynn took a paid trip to Russia for a state dinner in 2015. At one point he sat right next to Vladimir Putin. A week earlier, he attended a dinner at the private home of Russia’s ambassador in Washington. Flynn served as national security adviser for 24 days. He was fired because he reportedly failed to tell vice President Mike Pence that he had, in fact, discussed sanctions with that Russian ambassador after the election so that he lied to the FBI about that meeting. As you can see, Flynn is a key figure in the investigation. So, there’s a lot of anticipation for the court filings. We are joined by Shimon Prokupecz and White House reporter Stephen Collinson. Explain to our viewers what this filing is exactly, Shimon, and how to reveal what potentially, what Flynn has told the Mueller probe.

SHIMON PROKUPESCZ, CNN CRIME AND JUSTICE REPORTER: I think you said it right there. There’s a lot of anticipation for this filing because it’s going to be the very first piece of document or several pieces of document, perhaps, which really detail hopefully, you know, we are all hoping on the edge of the seats here that Mueller investigation and how Michael Flynn cooperated, where he cooperated, the impact of his cooperation, how helpful he was to the investigation. And that’s going to be the key thing here is was his cooperation an important one? Does the government view it in a way where they call it substantial. That is he offered substantial assistance. If that’s the case then it’s likely that Michael Flynn will not face any jail time because that’s really what he is hoping here for is and why he chose to cooperate so we’re going to learn some details about how he cooperated, we’re going to also learn very important in this investigation is what he did, how he communicated with the former Russian ambassador, who else he communicated with in Russia, perhaps we’ll learn more details about how that rt dinner came about, information like that that the special counsel, Mueller and the team has been investigating and looking at. We also may learn who if anyone in the White House knew about what was going on with Michael Flynn. Did he communicate what he was doing to anyone at the White House? We know that he lied to the FBI. He lied to people at the White House. Perhaps he’s going to give a reason in these documents. We’ll see. As to why he lied. This is all in an effort really for the special counsel to have their opportunity to lay out where Michael Flynn has been helpful, how he’s been helpful and in hopes of reducing the amount of jail time he’s facing.

GORANI: And, Stephen, politically speaking, it’s a long list of very close aides who have lied about their contacts with Russia or about their knowledge of deals or discussions happening with Russian operatives and officials. What impact is this having on the President himself in Washington with his own party? We saw them break over Khashoggi. Will we start seeing opposition over this?

STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER: Well, Hala, so far there’s been no sign that the crucial Republican support of the President in the Senate is fraying over this. Senators generally try and walk away from reporters when they ask these kind of questions but there’s no doubt that this development and the developments over the last week involving the President’s personal lawyer have been playing on the President’s mind. We have had a series of especially angry tweets from the President attacking Mueller, attacking Cohen. I think where this particular development today, the Flynn filing, is really interesting is because we have not heard anything from Flynn since he pled guilty to lying to the FBI a year ago. Every time that his sentencing came up on the calendar in the court it was put off because the Mueller team said he was still helping with their investigation. That’s one of the reasons why the investigation and why there’s so much anticipation about this.

[14:15:00] All along, the President’s defenders said, look, all of the charges have been made, the people have been sent to jail, the plea deals have nothing to do with the question of cooperation between the Trump campaign and Russia. If there is anything in this filing today that suggests that there was that kind of cooperation, this could be a very big development in the investigation, indeed.

GORANI: OK. And, Shimon, Michael Flynn’s sentencing has been postponed several times, I believe four times. What does that tell us about -- what does that tell us about the investigation itself and his role in it?

PROKUPESCZ: Right. It means that he’s been providing information for well over a year now to the special counsel. He signed his cooperation deal on November 30th of 2017. Last year. And since then, he’s been providing information. Each time the case would come up for sentencing the special counsel could ask for it to be postponed because they weren’t ready to move ahead with the sentencing. And the purpose of that so that folks understand is to keep leverage over Michael Flynn because he was still cooperating and they didn’t want to sentence him too soon and then get out of the cooperation. You have to keep in mind that one of the reasons -- there’s several reasons why Flynn cooperated in this case. One of them has to do with financially. It was becoming too much of a burden on his financially and the second thing is he was afraid of going to jail. And so, he was hoping by this cooperation that the government, that the special counsel, will say, you know, you have been so helpful to us, we’ll tell the judge that you should not face any substantial jail time. That’s going to be the key here. Whether or not he gets what they call 5k letter the U.S. government that says you have provided substantial assistance explaining to the judge that assistance and therefore the judge will then look at this and say, OK, you know what? You did good here. You did well. I’m going to give you either two weeks in jail, not going to give you any jail time. Look. He is facing up to five years but the range in these kinds of cases where you’re accused of lying to the FBI usually you get up to six months in jail. Whether or not that happens here, we’ll see. There’s a good chance, if he -- if the key here, if the cooperation is substantial it is a pretty big deal today when this comes out.

GORANI: All right. We’ll of course follow that very, very carefully and closely. Shimon and Stephen, thank you very much.

Our next guest said we’ll soon know more about the strength of Robert Mueller’s hand and the threat his investigation poses to Donald Trump. CNN legal analyst Elie Honig is live in New York. What are your expectations?

ELIE HONIG, CNN LEGAL ANALYST: I think we’ll learn much about Michael Flynn. He pled guilty a year ago. He is a highly placed person in the campaign and in the administration briefly. When I saw he pled as a cooperator, I thought Mueller will make all kinds of use out of this information and year we are a year later an nothing obviously came from the cooperation. There are some clues as Shimon referenced. Four adjournments. If you are done with a cooperator, you are done with him and get him sentenced. We have to remember what he pled guilty to, serious conduct. He lied about the conversations with the Russian ambassador, about potentially lifting or easing election-related sanctions. And so, I’m going to be reading to see was there any connection to the President? Did he have conversations about lifting the sanctions with the President? Did he have any conversations about his false testimony to the FBI with anyone in the inner circle?

GORANI: And could you explain why in a sentencing brief or filing we would learn more new details about what was -- what he told investigators? How does that work exactly?

HONIG: Yes. So, this is what prosecutors call a 5k letter after section 5k 1.1 of the sentencing guidelines and try to lay out all the good and bad. All the good, here’s all the cooperation that this person gave us. He gave all the following pieces of useful information and led to these charges against these individuals. Or helped us gain intelligence. And all the bad, here’s the crimes, the bad conduct. You owe it to the defendant to give the judge a full accounting so that that person can get a full and fair sentence from the judge.

GORANI: Yes. And there are more interesting filings coming up, right? Related to Paul Manafort, for instance. Yes. Tell us about that.

HONIG: Manafort’s going to be fascinating. We had big news last week, surprising to everybody. I was stunned. Saying that Manafort’s cooperation has fallen apart. He has lied to us, the Mueller prosecutors, repeatedly.

[14:20:00] Judge, we’ll explain how he lied and prove he lied in our next filing and that’s coming up Friday. That is going to be riveting because in my experience when I have dealt with dozens of cooperating witnesses and sometimes, they go bad and when they do most commonly because they’re protecting somebody or something, they’re holding back information and so my big question is, who is Paul Manafort trying to protect? He is a 69- year-old man Now that he’s messed up the cooperation, likely looking at a potential sentence that will keep him in for the rest of his life. Who was he protecting at the potential cost of the rest of his life behind bars and I do believe that Mueller will lay out chapter and verse on how he, Mueller, knows that Manafort was lying so I think we could learn a lot from that filing.

GORANI: Sure. Last one. Yet again, reaction to a Presidential tweet. It happens on a daily basis, several times a day. But some have said essentially that the President is tweeting out sort of, you know, witness tampering, evidence of witness tampering in some of the tweets referencing Roger Stone, for instance. This is a series of tweets for the viewers. What do you make of that? I mean, because if this were -- I can’t remember which legal commentators, people said I’ve got him. People have perhaps become numb to it. What is your reaction?

HONIG: That was me.

GORANI: That was you. OK. There you go.

HONIG: I stand by -- look. The bar for witness tampering --

GORANI: Quoting you back to you.

HONIG: I have arrived. The bar for witness tampering and obstruction of justice is really low. I have prosecuted cases for witness tampering and obstruction of justice and as long as you can show that somebody intends to corrupt delay testimony of any person then you’re there. Look at yesterday’s tweets. Roger Stone, he is clearly encouraging, influencing stone to hold the line, remain silent. You are a hero. You have guts. Lashing out at Cohen. And the other thing is it’s part of a long pattern that we have seen from the President. He’s very thematic and looking at the tweets that are fair gain in the court of law in the United States you can see he’s trying to send a pretty clear message. Stay quiet. Don’t talk to Mueller.

GORANI: Elie, thank you so much. Appreciate it.

HONIG: Thank you.

GORANI: A lot more to come this evening. The French government is hoping a new proposal will stop all the angry protests. Will it be enough to satisfy the yellow vest movement? We’ll take you live to Paris.

Also, ahead, it’s a bruising day for Theresa May. We’ll have the details.

(COMMERCIAL BREAK)

[14:25:00] GORANI: A stinging defeat in parliament, a serious blow from the EU and crunch time for her deal. All in a day’s work for the prime minister Theresa May. It’s big deal for her Brexit plan as parliament begins to deliberate and debate the agreement for five days. Take a look at live pictures from the house of commons. There’s the leader of the opposition, Jeremy Corbyn. They’re scheduled to vote about a week from today. In fact, in the last few hours, the government lost another critical vote. Lawmakers found the government in contempt of parliament over the refusal to publish legal advice on Brexit and means in plain English that parliament is compelling the government to publish the legal advice they got from their lawyers when they were formulating the deal with the EU so they’re forced to make that public so anything bad in there, anything that the lawyers said would perhaps be detrimental to the U.K. will be out there. The prime minister, meanwhile, suffered yet another blow and was forced to say she will not stop Brexit after the European court of justice opened the door to halting the process by saying the U.K. government has the power to do so by -- let me say this in plain English, as well. The court of justice essentially told the U.K. if you want to pull the plug on Brexit, you can do it. You can revoke article 50 unilaterally. You don’t need consent of the EU. All this is bad news for Theresa May. If she argues now she has no power to stop Brexit when the European court of justice clearly said she does that’s not an argument she is likely to win anymore. Erin McLaughlin is outside the houses of parliament tonight for us with more. Can she survive all of this?

ERIN MCLAUGHLIN, CNN INTERNATIONAL CORRESPONDENT, LONDON BUREAU: We’ll have to see what happens. This certainly was, Hala, a humiliating day for the British prime minister. She lost not one vote but three votes in a row. Her government today. Including, for the first time in history, being held in contempt of parliament. Over not publishing or the government’s denial of publishing that legal advice. The government lost that vote. 311-to 293. That includes two torii rebels and the Democratic unionist party which, of course, holds the keys to her minority government. That defeat was followed shortly after by the so-called grieve amendments, a defeat there giving parliament more of a say over what happens to plan “b” in the event that Theresa May does not push the plan through and she opened the series of historic Brexit debates and laid it out in stark terms for the members of parliament saying that without this withdrawal agreement, without the North Ireland backstop included within that withdrawal agreement there will be a no deal Brexit. Take a listen to what she had to say.

GORANI: The only way to absolutely guarantee no hard border on the island of Ireland at the end of the implementation period is to have a backstop in the withdrawal agreement as a last resort insurance policy. Any future relationship will need to be negotiated and will need an insurance policy if that negotiation cannot be completed in time. Put simply, there is no possible withdrawal agreement without a legally operative backstop, no backstop means no deal.

MCLAUGHLIN: And that, of course, is the outcome that really no one at this point wants to see. That was at the opening of eight hours of debates tonight. Seven days away from that critical Brexit vote next week and things certainly aren’t boding well for the prime minister, Hala.

GORANI: All right. Erin McLaughlin, thank you for the latest on that.

A lot more to come this evening. A nation mourns the latest on the memorials for late U.S. President George H.W. Bush. We will be live in Washington.

(COMMERCIAL BREAK)

[14:30:09] HALA GORANI, CNN INTERNATIONAL HOST: Welcome back. A quick check on the Dow. We’re still down just about 600, 700 points. About almost 700 points lower. There are fears that that trade war between the United States and China is far from resolved after some initially comforting tweets by the U.S. president. Those doubts are fueling some selling on Wall Street and so as a result the Dow Jones is losing ground. About two and two thirds percent. Over other indices are also losing ground, as well.

But over the last few sessions, we’ve seen some softness in the markets because there are concerns not just about the trade war between the U.S. and China, but also, concerns about the U.S. economy, about consumers pending, about -- in other cases tech results not meeting the very high standards of investors.

So overall, it hasn’t been a fantastic environment for the stock market. We’ll keep our eye on that. And “QUEST MEANS BUSINESS” at the top of the hour will have more coverage for you as well.

France is suspending plans to raise prices on fuel after those violent protests in France over the last few days. Protesters with the Yellow Vest Movement blocked roads and schools today. Unsatisfied with the proposal. But it is a major concession from the government which had vowed to push through these tax hikes on fuel. The rising cost of gas ignited protests that have since evolved into wider demonstrations against the ruling class and the elite as the demonstrators see it.

France’s prime minister says he understands their anger and is trying to calm things down.

(BEGIN VIDEO CLIP)

EDOUARD PHILIPPE, FRENCH PRIME MINISTER (through translator): For more than three weeks, tens of thousands of French people have been expressing their anger on roundabouts, the toll gates, near shopping areas or in the streets of many French towns. This anger has deep roots. It’s been brooding for a while. It often stayed quiet out of reticence or pride.

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