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The Situation Room
Trump Designates North Korea as State Sponsor of Terror; Kushner's Attorney: Senate Panel is Playing 'Gotcha Games'; Justice Department Sues to Block AT&T Merger with Time Warner. Aired 5-5:30p ET
Aired November 20, 2017 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SCIUTTO: I turn you over now to Jim Acosta, who is in for Wolf Blitzer in THE SITUATION ROOM.
[17:00:11] JIM ACOSTA, CNN CORRESPONDENT/ANCHOR: Happening now. Sponsor of terror. President Trump puts the squeeze on North Korea by putting it back on the list of nations that sponsor terrorism. The move comes with additional sanctions, but are they largely symbolic?
Closing in. As the Russia investigations draw closer to the president's inner circle, a Senate panel accuses the president's senior adviser and son-in-law, Jared Kushner, of not disclosing key documents. Kushner's lawyer accuses the senators of playing "gotcha" games.
Antitrust suit. The Justice Department is set to file a lawsuit to block AT&T's takeover of Time Warner, the parent company of CNN. AT&T says it's preparing a response to the rare legal challenge. Is the $85 billion merger in jeopardy?
And speaking out. As an accuser goes public with her allegation that Republican Senate candidate Roy Moore sexually abused her as a teenager, the White House says the president wants senators who support his agenda. What's the administration's message?
Wolf Blitzer is off. I'm Jim Acosta. You're in THE SITUATION ROOM.
ANNOUNCER: This is CNN breaking news.
ACOSTA: Breaking news. The Justice Department is set to sue to block AT&T's takeover of Time Warner, the parent company of CNN. The lawsuit is an unusual challenge to the $85 billion merger, which was announced a year ago. AT&T calls it, quote, "a radical and inexplicable departure from decades of antitrust precedent." We're standing by for a news conference by the two companies.
Meanwhile, another major headline tonight. President Trump steps up the pressure on North Korea, putting it back on the U.S. list of countries that sponsor terrorism. The president says the U.S. will boost sanctions against Kim Jong-un's regime to their highest level, accusing North Korea of repeatedly sponsoring terrorism, including assassinations on foreign soil. President George W. Bush removed North Korea from the list a decade ago in a bid to keep a nuclear deal going. And as the Russia investigations approach the president's inner
circle, the Senate Judiciary Committee is accusing presidential son- in-law and senior adviser Jared Kushner of not disclosing key documents, including information about WikiLeaks. Kushner's lawyer accuses the panel of playing "gotcha" games.
I'll speak with Democratic Congressman Chris Himes of the Intelligence Committee. And our correspondents, specialists and guests are standing by with full coverage.
We begin with CNN's senior White House correspondent Jeff Zeleny. There's a new move to turn up the pressure on North Korea, isn't that right, Jeff?
JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good evening, Jim. There is. President Trump is putting North Korea back on the state sponsor of terror list. Now, it will join Syria, Sudan and Iran.
Now Secretary of State Rex Tillerson came to the White House briefing today to call it a peaceful pressure campaign. He said the president calls it a massive pressure campaign. Either way, though, important to point out this is a diplomatic move, not a military one, designed to rein in North Korea's nuclear ambitions.
(BEGIN VIDEOTAPE)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Today, the United States is designating North Korea as a state sponsor of terrorism. Should have happened a long time ago.
ZELENY: President Trump trying to tighten the noose on North Korea, putting the regime back on the list as a state sponsor of terrorism.
TRUMP: This designation will impose further sanctions and penalties on North Korea and related persons and supports our maximum pressure campaign to isolate the murderous regime.
ZELENY: During a cabinet meeting at the White House today, the president unveiling the latest punitive action against Kim Jong-un. Later in the White House briefing room, Secretary of State Rex Tillerson said the symbolism of the move outweighed the practical effects.
REX TILLERSON, U.S. SECRETARY OF STATE: It is very symbolic on the one hand, because it just points out, again, what -- what a rogue regime this is and how brutal this regime is and how little they care for the value of human life.
ZELENY: The president's announcement reversed a 2008 decision by President George W. Bush, who removed North Korea from the terror list as part of negotiations for a nuclear deal that ultimately fell through.
GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: And my hope is that the axis of evil list no longer exists.
ZELENY: With time running out this year, Mr. Trump also rallying support for the Republican tax plan.
TRUMP: We're going to give the American people a huge tax cut for Christmas.
ZELENY: After sailing through the House last week, the legislation faces far steeper hurdles in the Senate.
TRUMP: It's up to the Senate, and if they approve it, the House and the Senate will get together. I'll be there right in the middle of it.
ZELENY: Several Republicans are still undecided, including Senator Jeff Flake of Arizona, who the president went after once again on Twitter.
"Senator Jeff Flake, who is unelectable in the great state of Arizona, was caught on mike saying bad things about your favorite president. He'll be a no on tax cuts because his political career anyway is toast."
The president was referring to a moment over the weekend where Flake was recorded saying this.
[17:05:03] SEN. JEFF FLAKE (R), ARIZONA: If we become the party of Roy Moore and Donald Trump, we are toast.
ZELENY: A spokesman for Flake said he has yet to decide whether he'll support the tax plan, despite the president's claim otherwise.
Tonight, the controversy over Moore, Alabama's politically radioactive GOP Senate nominee, is still hanging over the White House. Republican leaders have distanced themselves from Moore amid sexual misconduct, including the alleged sexual abuse decades ago of Leigh Corfman, who was only 14. She told her story on NBC's "Today Show."
LEIGH CORFMAN, ROY MOORE ACCUSER: He basically laid out some blankets on the floor of his living room and proceeded to seduce me, I guess you would say.
ZELENY: The White House sending conflicting signals on Moore. Senior adviser Kellyanne Conway said it was critical to have enough Republican votes for tax reform.
KELLYANNE CONWAY, COUNSELOR TO DONALD TRUMP: I'm telling you that we want the votes in the Senate to get this tax -- this tax bill through.
ZELENY: When asked whether the White House would be pleased with Moore in the Senate, press secretary Sarah Sanders said this.
SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Obviously the president wants people both in the House and the Senate that support his agenda, but as I've said and as the Hatch Act prohibits me from going any further, we certainly think that this is something that the people of Alabama should decide.
ZELENY: As the president ignored questions about Moore -- he did make time to fire back at the father of a UCLA basketball player, who overlooked Mr. Trump's help in securing their release from jail in China for allegedly stealing sunglasses.
On Twitter, the president making an extraordinary statement, saying, "I should have left them in jail."
Now, in the White House briefing today, Jim, Sarah Sanders went on to say the president was happy and thankful they were released from jail, but when pressed why the president would have said that he was -- would have preferred three U.S. citizens to be better off in jail, she said he was simply being rhetorical, Jim.
ACOSTA: Well, we're all thankful they're back home. Jeff Zeleny, thank you very much.
The Russia investigations are getting closer to President Trump's inner circle, and a Senate committee is accusing the president's son- in-law and senior advisor, Jared Kushner, of not disclosing key documents. That's drawn a hot response from Kushner's lawyer.
Let's bring in CNN justice correspondent Evan Perez. Evan, interesting interview. What are you hearing?
EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Well, you know, Jim, over the past year, Jared Kushner's been forgetful. He's been slow to acknowledge contacts related to Russia in the 2016 campaign. You'll remember, it took him months to tell the FBI about more than 100 foreign contacts on his -- on his security clearance application earlier this year.
And in this past week, as you mentioned, the Senate Judiciary Committee sent him a bipartisan and a public letter, saying he hadn't turned over documents that the committee knew about.
The documents we're talking about include Kushner's communications with the fired national security adviser Michael Flynn, campaign contacts with WikiLeaks and a Russian backdoor proposal to connect the president of Russia with the campaign. An idea that, by the way, Kushner rejected. Kushner's attorney, Abbe Lowell, told me in an interview that these accusations are all wrong.
(BEGIN VIDEO CLIP)
PEREZ: So what I hear you saying is that you don't believe that there's any missing documents, and you don't really plan to provide any additional documents?
ABBE LOWELL, ATTORNEY FOR JARED KUSHNER: Now, let me be clear, that what we told the Judiciary Committee is that we'd send them what we had already sent the Intelligence Committees, and then we'd work with them if there was anything else that was relevant. And then what they decided to do is to create a media event. That undermines the seriousness of their endeavor.
They jumped the gun to make a media event. And any perception that Mr. Kushner has been anything but not only cooperative, but if you look at the contents of these e-mails, he's the hero. He's the one who's saying there shouldn't be any contacts with foreign officials or foreign entities. That's what the Senate Judiciary Committee should pay attention to and not create some sort of partisan "gotcha" game.
(END VIDEO CLIP)
PEREZ: And by the way, again, that letter was a bipartisan letter. The bottom line here, Jim, is that Kushner's now promising to provide an interview to the Senate Judiciary Committee. He's also not really promising to provide any additional documents.
By the way, these documents were documents that were requested of everybody who was involved and connected with the campaign. A lot of them turned over much more documents than Kushner has turned over.
ZELENY: All right. I guess we'll find out who the heroes are at the end of this investigation.
PEREZ: Exactly.
ZELENY: Evan Perez, thank you very much.
Joining me now, Democratic Congressman Jim Himes of Connecticut, a member of the Intelligence Committee.
Congressman, thanks very much for joining us.
REP. JIM HIMES (D), CONNECTICUT: Good evening.
ZELENY: Does it look like, to you, that Jared Kushner has something to hide?
HIMES: Well, that's kind of the key question. You know, I was listening to what his attorney just said, which was not true. When a congressional committee makes a request for documents, they're very specific in the documents that they want to see. So there was no agreement to say, "We'll give you what the Intelligence Committee got and then talk about it." There was a very specific list of documents requested by the Senate committee.
And of course, as you pointed out, it was a bipartisan letter. It came from a Republican senator and a Democratic senator. So that part is just plain wrong.
Now what may be true, and this gets to the answer of your question, it may be true that this is an honest mistake, but -- but, you know, it may even make Jared Kushner look good if, in fact, these documents suggest that he was waving off contacts with the Russians.
[17:10:09] But this is probably, you know, we're in now two or three dozen episodes of forms being poorly and inaccurately filled out, people forgetting what contacts they did have with Russians, and people not providing information that has been -- has been asked for. And you can't jump to conclusions for that, but that's a pretty bad fact pattern. ACOSTA: And would you agree with his lawyer's conclusion there that
his actions, Jared Kushner's actions have been heroic? Is he the hero in all of this?
HIMES: Well, look, when we get the documents, it may, in fact, show that Jared Kushner was saying, "Don't meet with the Russians." I'm not sure that that qualifies you as a hero. It may qualify you -- qualify you as having sort of a basic level of common sense. But when you don't provide documents...
ACOSTA: Isn't that what he should have done? That's what any good American should do, correct? It doesn't make you a hero.
HIMES: Yes, yes, and when you -- exactly. It suggests that you've got some basic rudimentary level of common sense.
But, again, when you're being asked to provide documents to an investigation, whether it's congressional or the FBI, boy, do you ever pay close attention and make sure that you answer those questions. Because -- and I'm not saying this is going to happen, but incomplete answers or false answers, as George Papadopoulos now knows, can get you into a heck of a lot of trouble.
ACOSTA: And according to a report in "The Washington Post," Ty Cobb, with the president's legal team, handling the Russia probe, seems to believe that Mueller is wrapping up his investigation and that much of this will be weighing in on Michael Flynn and his activities.
What do you think when you look at this? Do you think we'll be looking at this wrapping up soon? And how much of this will be focusing on Michael Flynn and his actions?
HIMES: Well, fortunately, as a member of the body conducting the congressional investigation, I don't actually know much about what Mueller and the FBI are doing. And that's as it should be.
You know, obviously the investigations happening in the Congress are of a political nature, and that can't be true and is not true of Mueller's investigation.
So I don't know the answer, but I will make the observation that a story broke yesterday, suggesting that Mueller had requisition documents from the Department of Justice. We know that there are some sealed indictments that have yet to be unsealed that may be associated with this case, and we know that he continues to interview people. That is not the sign of investigation -- of an investigation that is wrapping up, but obviously, that's somewhat speculative on my part, because he's not talking to the Congress about what's happening in this investigation.
ACOSTA: And you sit on the House Intelligence Committee. What more do you need? What more do you want to see before the end does come to these investigations?
HIMES: Well, you know, one big thing, we now know, thank you to Don Jr. and to us coming to understand the conversations that Michael Flynn had with Russians, that Jared Kushner may or may not have had with Russians, we now know there were lots conversations. That, of course, was totally denied in January of this year by everybody in the administration.
The big question is, were those conversations innocent, perhaps ill- advised, or did they lead to follow-up? The Don Jr. meeting, what happened after that? Was there an attempt to actually get information? Was information given? Either through WikiLeaks or directly or in any other way, was information given by the Russians to the campaign? We don't know the answer to the question. It may be yes. It may be no. But we need to get to an answer to that question next.
ACOSTA: OK. Congressman, stand by. We have more news to talk about, including the Department of Justice's action in terms of this AT&T/Time Warner merger. There's some big news on that. More on that coming up in just a few moments.
(COMMERCIAL BREAK)
[17:18:07] ACOSTA: Our breaking news. The Justice Department is suing to block AT&T's takeover of Time Warner, the parent company of CNN. The lawsuit is an unusual challenge to the $85 billion merger, which was announced a year ago. AT&T calls it, quote, "a radical and inexplicable departure from decades of antitrust precedent."
We're standing by for a press conference by the two companies. We'll be talking with Congressman Jim Himes about this shortly, but first, let's turn to CNN's senior media correspondent Brian Stelter. What are you learning about this, Brian?
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: This is setting up an incredible antitrust legal battle, something that "The New York Times" has said could be the antitrust case of the decade. This is a court battle that is also going to affect other messages, other acquisitions, but let's start here, Jim, with AT&T and Time Warner.
A year ago, this merger was announced, AT&T buying Time Warner, including CNN, HBO, Warner Brothers. At the time, there was a belief the deal would be approved by the government with the usual conditions that are attached to a deal of this size, but instead the government is suing to block the deal.
In district court in just the last few minutes, the case has been filed. The document -- I read through the lawsuit. It says this deal would allow AT&T to use its control of, say, CNN and HBO as a weapon in order to harm consumers by trying to raise prices over at AT&T's rivals like Verizon.
Now AT&T is denying the claims in the suit, saying that this is a very unusual decision. The company says it's confident it will prevail in court.
And one of the big questions in court, Jim, is going to be about the Trump administration and the Trump factor. Was President Trump's disdain for CNN, his animosity towards this channel a factor in the decision? Did he or his White House aides influence the government, the Justice Department officials that actually went ahead and sued?
Right now the DOJ denies that, says that is untrue, says this was a normal decision made by career officials in the DOJ. But that question about Trump's influence or perceived influence may be a factor in court.
[17:20:06] ACOSTA: And presumably, Brian, if this does go to court and questions are asked of the Justice Department and its motivations behind all of this, they'll have to say in court that the president was not involved.
STELTER: That's right.
ACOSTA: That will have to go into the record.
STELTER: That's right. We've heard denials. In fact, Jeff Sessions, the attorney general, was asked this question up on Capitol Hill last week. And his answer was a non-answer. He punted and said he couldn't comment.
But we've heard denials from other DOJ officials about Trump meddling. The reason why it's a question at all is because, on the campaign trail, Donald Trump vowed to block this deal. Normally that's how a Democratic candidate would talk. It's normally the Republicans who are pro-business, pro-merger, pro-deal in this case.
But this is a very unusual case for a lot of reasons, and it's setting up to be a blockbuster legal battle. Like you mentioned, there's going to be a press conference in a few minutes. AT&T and Time Warner executives, legal representatives will be speaking at that press conference, laying out their argument for why this case is meritless and why they believe they'll prevail. But this is going to be a fascinating court fight to watch unfold.
ACOSTA: Absolutely. Brian Stelter. And that's right. We will be taking some of that press conference live in just a few moments. AT&T/Time Warner representatives talking about their position in all of this. Brian Stelter, thank you very much. Stand by.
We're back with Democratic Congressman Jim Himes of the Intelligence Committee. And Congressman Himes, do you believe that the Department of Justice is blocking this deal, essentially in order to go after CNN?
HIMES: I have no way of knowing that, Jim. You know, obviously, that's going to come out in the trial. They will get all sorts of documentation, but what's really interesting about this case and regardless of outcome, I'm glad the discussion is going to happen, because like so many members of Congress, I spend a lot of time with my constituents. And almost without exception, they say, "Wait, look at the commercial universe out there: airlines consolidating, drug companies consolidating, media companies consolidating, banks consolidating. And quite often, that is related to less competition, less good service and conceivably higher prices."
And so really pulling this apart to understand not just whether prices will go up for consumers but whether innovation will be stifled because content will be suppressed. However this comes out, this is a really important discussion.
You know, congressional Democrats have been focusing hard through something called a "Better Deal," where we're trying to explain to Americans how we can have more competition and lower prices. That we really do need to keep an eye on the increasing number of monopolies and oligopolies that are characterizing our economy.
ACOSTA: And Congressman, setting aside some of those media conglomeration arguments, that understood. Last year when he was candidate Trump, he said he would oppose this -- this merger, and it was essentially a part of the conversation about how he didn't like what CNN was saying and reporting on him.
Is there a danger here of the president politicizing the Justice Department? Obviously, the Justice Department is saying that has not happened in this case. But is that specter there? And are you concerned about it?
HIMES: Of course that specter is there and, again, we'll sort of let the process work out to see if whether, in fact, this was driven by something the president said or did. But I mean, come on. It's not just a specter; it's a weekly occurrence with this president. Firing Jim Comey to relieve pressure on the Russia investigation. Weighing in on what sort of punishment the New York terrorist should get. You know, criticizing his attorney general, urging his attorney general to investigate his political opponent.
I mean, politicizing the Justice Department is what this president does before breakfast.
ACOSTA: All right. Congressman Himes, thank you very much. We appreciate that.
HIMES: Thank you, Jim.
ACOSTA: Coming up, we're standing by for that news conference we mentioned from AT&T and Time Warner.
Also, doctors examining a defector to find a shocking revelation, appalling health conditions in North Korea. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
[17:28:37] ACOSTA: This hour's breaking news, the Justice Department filing suit to block AT&T's Time Warner takeover. Time Warner, of course, the parent company of CNN. And as we stand by for a news conference by those two companies, let's bring in our top media and legal analysts.
Jeffrey Toobin, let's go to you first. As you -- as you're sorting through what the government's case is going to be here, what do you make of it? Is this, as Time Warner and AT&T are saying, a very unusual objection to this merger? JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: It is unusual, because this
is what's known as a vertical merger. A horizontal merger is companies that compete with each other, and that's what antitrust enforcement is usually focused on. When two companies that are in the same markets compete -- who usually compete against each other decide to merge.
This is a vertical merger, which means AT&T is a company that does business with Time Warner. Time Warner supplies programming to some of the AT&T subsidiaries, but they don't compete. And at least in recent years, the Justice Department has not sued to stop vertical mergers.
So what's striking about this is that it is a departure from both the more liberal antitrust policies of the Obama administration and it's a really big departure from Republican administrations which tend to be more hands-off when it comes to antitrust enforcement.
ACOSTA: And Brian Stelter, who's back with us, at one point this was a relatively uncontroversial merger. Let's listen to what the head of the Justice Department's antitrust division said about the merger. This was last year, October of 2016.
(BEGIN VIDEO CLIP)
MAKAN DELRAHIM, PEPPERDINE UNIVERSITY LAW PROFESSOR: This is more of what we would call a vertical merger, a content with distribution rather than two competitors merging. So I anticipate that the FCC will have little, if any, role, and it will be a pure antitrust. It shouldn't be, you know, just the sheer size of it and the fact that it's media, I think will get a lot of attention. However, I don't see this as a major antitrust problem.
(END VIDEO CLIP)
ACOSTA: And so, Brian, what changed do you think? It sounded like it was not a problem, according to him last year.
STELTER: Yes, that's Makim Delrahim. He's the newly-installed DOJ antitrust chief. Back when this deal was announced, he was a lawyer and lobbyist outside the government. So he was asked for his view on this possible deal. And you heard him there say he doesn't think it was going to be a big antitrust matter.
Now, he now feels he has taken out of context and that elsewhere in the interview he said there will be some questions for antitrust officials to review. But in his own words there, he says he didn't think it was going to be a major case when it was first announced.
The difference here, of course, is that it wasn't Hillary Clinton who was elected, as many expected in October of 2016. It was Donald Trump. I remember the day after the election I wrote a story for CNN.com that said fresh questions now, new questions about what's going to happen to the AT&T/Time Warner deal. And that's because on the campaign trail, Trump vowed to block this deal. You know, we're in such an unusual situation here. A president of the
United States that calls journalists the enemy and tweets out criticisms of CNN and other networks on a regular basis. So that's why there's this cloud of uncertainty. This speculation about whether any Trump officials have somehow meddled in the Justice Department in order to cause this lawsuit to happen. To be clear, Delrahim and his colleagues have denied that.
ACOSTA: And it's not just -- and Brian, it's not just about us. Remember during the campaign, then-candidate Trump talked about changing the libel laws in this country so it could be easier to sue journalists. He also talked about threatening -- and he's talked about this as president -- threatening the tax status of Amazon, the parent company of "The Washington Post," in addition to calling journalists the enemy of the people and fake news.
OK. We'll be standing by for that press conference coming up in just a few moments.
But let's bring in our political specialists here. David Axelrod, when you hear all of this, what do you make of the Department of Justice's contention that this is -- there's nothing political here, nothing to see here; the president hasn't been involved; this has nothing to do with President Trump?
DAVID AXELROD, CNN POLITICAL COMMENTATOR: Yes. You also left, Jim, as I heard your litany, you left out the threat to urge the FCC to withdraw NBC's broadcast license.
ACOSTA: That's right.
AXELROD: So, you know, this has been a pattern of behavior.
Look, one of the great concerns about this administration -- I fully accept that when administrations change, policies change, but our institutions need to endure. And one of the things that concerns me is that there is a cloud hanging over not just this deal but the administration generally, because there's a suspicion that the institutions could be manipulated and used for political purposes, for retribution. The recent suggestion that the Justice Department may go after Hillary Clinton now after the president tweeted and so on.
You need to keep the Justice Department pristine and isolated from those kind of pressures, and the president doesn't seem to understand where those lines are.
Now I don't know if this is motivated by his -- his antipathy towards CNN or any of it. But -- and I think we'll find out through this process, because AT&T seems poised to fight it.
But the fact that we are even having this discussion, the fact that these kinds of questions come up is deeply disturbing, and it is fundamentally flowing from this president's approach to politics and his seeming blindness to the role -- the proper role of institutions in a democracy and the rule of law. ACOSTA: And Jeffrey Toobin, make no mistake, President Trump took us
to this place, as David Axelrod was saying. Let's listen to this back in October of 2016, when he was talking about this merger out on the campaign trail. Here's what he had to say.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration, because it's too much concentration of power in the hands of too few.
(END VIDEO CLIP)
ACOSTA: Now, you heard Donald Trump, then-candidate Trump at the time, mentioning CNN in that same breath as he was talking about the merger of these two companies. We did hear Congressman Himes earlier say, well, there is this concern -- and you do hear Democrats, you hear Bernie Sanders talking about this, those kinds of folks on the left talking about this -- that there is a danger in this conglomeration of too many of these big media companies.
[17:35:15] Is there a legal argument to be made there? Is it enough to -- for the Justice Department to prevail in all of this?
TOOBIN: Well, one of the curiosities here is that there have not been many court cases about these kinds of mergers in recent years, because they are almost always settled through negotiation rather than litigation.
Jim, I think we have a slide of the part of the complaint that the Justice Department has filed against AT&T. Are we going to call that up, or is the press conference about to start?
ACOSTA: Hang on, Jeffrey. Yes, the press conference is about to start here. AT&T's Randall Stephenson. You can hear the house music playing there in the room. But these are executives from AT&T.
In case folks aren't aware of these officials that they're looking at, Randall Stephenson with AT&T. The Time Warner chairman, I believe, is there, Jeff -- is that Jeff Bewkes, I believe?
TOOBIN: No. No that's...
ACOSTA: You're going to see...
TOOBIN: That's Dan Petrocelli on the...
ACOSTA: Dan Petrocelli, is that right?
STELTER: Who, Jeffrey?
TOOBIN: Yes, he's the lawyer.
ACOSTA: Tell us who we're looking at, Jeffrey. You might know these folks. TOOBIN: Well, I don't -- I don't know the person on the -- that is
certainly Randall Stephenson on the middle and on the right is Dan Petrocelli.
Now, sorry for my provincial perspective. But many people may remember Dan Petrocelli, because he was the lawyer for the Goldman family in the civil lawsuit against O.J. Simpson, which they were awarded more than $20 million. He's obviously a person who can do a lot of different kinds of lawsuits. This is an antitrust case, and I trust they will be introducing themselves shortly.
ACOSTA: Yes. And I believe we have the AT&T general counsel on the left there, as well.
TOOBIN: Right.
ACOSTA: So I think you're right, Jeffrey, they are going to be introducing themselves shortly.
TOOBIN: And just, Jim, just so people know that, you know, we're talking about the company that is our parent company. This press conference is taking place about 20 feet from where I'm sitting in the Time Warner Center in New York.
ACOSTA: Interesting.
TOOBIN: So, you know, people should consider that as we talk about -- as we talk about this case, because obviously, we're just talking about the company that we all work for.
ACOSTA: Absolutely. And absolutely. And Brian Stelter, I mean, this is part of the conversation that, yes, here we are at CNN talking about the company that owns CNN. Let's listen in.
UNIDENTIFIED MALE: We'll have prepared remarks from our speakers and then we'll open it up to questions. So if you're here in the room, just raise your hand. We'll get you a microphone so everyone else can hear you.
If you're listening on the conference bridge, just press star, then 1, and we'll get you in queue for questions. And if you're listening or watching on the web cast, click the "submit question" button in the upper right hand.
So with us this evening, our speakers are Randall Stephenson, chairman and CEO of AT&T; David McAtee, AT&T's general counsel; and Dan Petrocelli, partner at O'Melveny and Myers and our lead trial counsel for both AT&T and Time Warner -- Randall.
RANDALL STEPHENSON, CHAIRMAN AND CEO, AT&T: OK. Thank you, Larry. And good evening. I do appreciate everybody coming on this short notice.
What you're going to hear in a moment are some comments from our legal team, but first I want to make just a few points. Obviously, we're supposed to be here, and candidly, I'm a bit troubled
by it. Jeff Bewkes and I entered into this deal with, really, decades of clear legal precedent demonstrating how this merger would ultimately be evaluated. When we announced this deal, the best legal minds in the country agreed this transaction would be approved since our companies don't even compete with each other.
But here we are. The government has filed a lawsuit, and it stretches the very reach of antitrust law beyond the breaking point. All of this in an effort to stop this combination.
This comes at a time when the communications and media industries are undergoing some rather radical change. Massive large-scale Internet companies with market caps in the hundreds of billions of dollars are creating tons of original content, and they're distributing it directly to the consumer. This is disrupting both industries, the media, as well as communications industry; and it's being done at a level and a pace that most of us could not even have conceived of five years ago.
For example, Netflix, they distribute their content to over 100 million customers. Amazon distributes its content to its prime members. That's estimated to be in excess of 60 million. Google and Facebook, they reach and distribute content to literally billions of customers.
[17:40:00] And the government contends that AT&T, with 25 million TV customers and Turner, with a single-digit share of all media watched, will have unlawful market power. This defies logic, and it is unprecedented.
I've done a lot of deals in my career, but I've never done one where we have disagreed with the Department of Justice so much on even the most basic of facts. But despite our disagreements, we have offered concrete and substantial solutions, and as we head to court, we will continue to offer solutions that will allow this transaction to close.
It cannot be lost in the noise that combining these two companies will create significant and tangible consumer benefits, and every day we spend litigating this deal is a day we're wasting in bringing those benefits to the customers.
But we do not intend to settle this matter out of simple expediency, because the rule of law is at issue here. Consistency in the application of the law is critical in a free market economy. And it's equally important for preserving confidence in our government. Confidence that they will fairly adjudicate the matters brought before them.
When the government suddenly, and without notice or any due process, discards decades of legal precedent, businesses large and small are left with no guide posts. Every business combination or significant investment becomes subject to the whim of a regulator. As we're seeing here, that tends to be a roll of the dice.
We have no intention of proposing a solution that is beyond what the rule of law would require and, if there are legitimate concerns, there are solutions within the precedent as well as within the DOJ's own guidelines; and we'll continue to propose those types of solutions to the government.
So before I hand this over to the legal teams, I do want to address the elephant in the room here. There's been a lot of reporting and speculation whether this is all about CNN. And, frankly, I don't know. But nobody should be surprised that the question keeps coming up, because we've witnessed such an abrupt change in the application of antitrust law here.
But the bottom line is that we cannot and we will not be party to any agreement that would even give the perception of compromising the First Amendment protections of the press. So any agreement that results in us forfeiting control of CNN, whether directly or indirectly, is a nonstarter.
We believe quite strongly that any divestiture of AT&T assets or Time Warner assets is not required by the law, and we have no intention of backing down from the government's lawsuit. We are in this to win. And have sent a reasonable compromise that doesn't violate our principles, expect to do just that. So I'm going to turn it over to David.
DAVID MCATEE II, AT&T'S GENERAL COUNSEL: Sure. Just to underscore Randall's point on the rule of law, I should stress that the last time the Department of Justice actually tried a vertical merger case was in the Carter administration, and it lost that case.
Before that, you have to go back to the Nixon administration to find the last time a court has blocked a vertical merger. In the nearly 50 years since then, mergers like ours have been approved again and again, because they benefit consumers without removing any competitors from the marketplace. That is the legal precedent upon which the parties relied when we entered into this transaction, and under that precedent we see no reason for this deal to be treated any differently.
For more on the DOJ's lawsuit in particular, I turn it over to Dan Petrocelli, our lead counsel.
DAN PETROCELLI, LEAD COUNSEL: Thank you, David.
Today's suit by the Department of Justice to block this merger represents the serious and very troubling departure...
ACOSTA: All right. There you have it. There's a bit of that press conference taking place at the Time Warner building in New York City. The AT&T chairman and CEO, Randall Stephenson, joined by the general counsel for AT&T, as well as another attorney working on the case on behalf of AT&T and Time Warner, Daniel Petrocelli, holding a news conference there talking about the Department of Justice's decision to try to block this merger.
Brian Stelter, let me bring you in. Pretty interesting comment from Randall Stephenson. He said, "Let me address the elephant in the room, whether CNN is at issue here." And he said, "Frankly, I don't know." That's a pretty stunning statement.
STELTER: It is, and he's acknowledging what has been whispered about, what has been rumored for many months. You know, just take our viewers kind of behind the scenes here a little bit. As Jeffrey Toobin said, we're talking about our own network here, CNN, the channel you're watching at home right now. But what's interesting about this, given President Trump's animosity towards CNN, is that there have been concerns -- there have been speculation that maybe somehow the government would try to force a spin-off of CNN, basically say to AT&T, "You've got to sell CNN to get this deal through."
There was concern, there have been speculation, that maybe, somehow, the government would try to force a spin-off of CNN, basically say to AT&T, you've got to sell CNN to get this deal through.
There was a concern that the government would try to force a change in leadership here at CNN. None of that based in evidence that was actually written down anywhere on paper. No smoking gun e-mails or anything, but definitely a lot of concern.
And now, we hear AT&T's CEO, Randall Stephenson, for the first time, acknowledging that concern and saying he doesn't know if that is the case or not. That he doesn't know if political pressure has been applied, and that that's really why the government is going to court today to block the AT&T/Time Warner deal.
To be clear, Jim, the DOJ denies that. Officials held a background briefing about an hour ago where they made clear they resent the suggestion that political pressure has been applied.
But that is going to be a key part of this legal fight. If this does end up before a judge in the coming months, AT&T is going to seek evidence, going to seek e-mails from the government, trying to see if there was any improper influence or interference.
We're definitely in uncharted territory when it comes to these media mega-deals. Viewers might remember the Comcast/NBC deal about seven years ago. It was the last kind of media deal on this scale in the United States. And the Obama administration went ahead and approved it with some conditions, meaning the typical kind of things you attach to a deal of that scope.
But in this case, that didn't happen. The Trump administration is going a different direction. Not just attaching conditions to a deal, saying you've got to make sure you play fair in the marketplace, instead the government actually going to court today. Something that would have been unbelievable a year ago but now is inevitable.
And this is something that is going to play out at least for several months, Jim. Could take even longer than that.
JIM ACOSTA, CNN ANCHOR: And, Jeffrey Toobin, Randall Stephenson talked about the elephant in the room. How much will President Trump be the elephant in the courtroom, do you think, in this case?
JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: I don't think it's out of question that the President of the United States may be deposed in this lawsuit. I mean, his role in this is obviously critical.
I mean, let's be blunt here. The President of the United States hates CNN. He's been tweeting, you know, about trains hitting people wearing CNN signs. I mean, actual violence against CNN.
So, I mean, this is not some, like, speculation on my part. The President has said it over and over again that he despises the place where we work. So that's relevant.
The other thing is, during the campaign, as you just played the tape -- the video, he said he was going to stop the deal. I mean, that's -- again, that's not speculation. That's not innuendo. That's just quoting what candidate Trump said.
Now, what's important here is that it is not legal for the Justice Department to stop a merger because the President or any member of the executive branch doesn't like the companies involved.
These -- there are laws about antitrust. They can only be stopped if they are anti-competitive. You know, there are rules that apply that have nothing to do with the personal animosity of the President or anyone else.
And the challenge here for the court is going to be determine -- to determine whether these laws prevent the merger, or this whole thing was just cooked up because the President of the United States and the people around him can't stand the company that we work for.
ACOSTA: And, David Axelrod, doesn't it bother you, all these media companies joining forcing and conglomerating and becoming bigger and larger companies? Hasn't that been a complaint of the Democratic Party for years now --
DAVID AXELROD, CNN SENIOR POLITICAL COMMENTATOR: And not just them.
ACOSTA: -- that the more you see these companies coming together, the fewer voices you see out on the airwaves and so on?
AXELROD: Not just the Democratic Party. I think that there has been real concern about consolidation, not just in the media but in many realms. It will be interesting to see if this new spirit of populism and anti-merger philosophy infuses all the decisions that the Justice Department is going to make, coming down the line.
For example, Sinclair Media is trying to buy Tribune Broadcasting. That deal has been announced. That's under review. The FCC just loosened up its own rules to enable that.
Sinclair happens to be a media outlet that is very sympathetic to the President. It will be interesting to see -- the Justice Department is supposed to be reviewing that deal -- how they handle that.
I will say this, though, Jeffrey Toobin's characterization of the President's feelings about CNN is probably one assertion on CNN that the President won't dispute. I think that he -- I think he will well acknowledge his feelings about CNN. ACOSTA: Yes.
AXELROD: And as I said earlier, the real question that the -- that we face today about all of our institutions, all of these administrative and legal proceedings is, are they on the up and up, or are they being tainted by political interference?
[17:50:08] That is the situation that we have been delivered to by the President's loose talk, his use of Twitter, his statements at campaign rallies, and even as President. And it's bad for the country.
ACOSTA: And, Brian Stelter, you know, David Axelrod brings up a good point, and just to tie this over the bow. I mean, Sinclair Broadcasting has been expanding its reach across the country. And they make -- they -- make no mistake, they make no bones about it. In many ways, that outfit is there to support President Trump.
STELTER: Yes, they got --
ACOSTA: I mean, it is in their content.
STELTER: Yes, there's a lot of objective news reporters at local stations owned by Sinclair, but the company's owner has injected conservative politics into some of those newscasts, into the programming.
So Sinclair is trying to get bigger by buying lots of other local stations. And David is right that the government has made it easier to do that. The Trump administration has made it easier to do that.
At the same time, another part of the Trump administration, the DOJ, is suing to block AT&T and Time Warner. It could be completely unrelated, but it looks odd to a lot of people.
Look, we're going to see this litigated in the months to come. The government has a case they've laid out in their lawsuit this evening. It says this deal would harm consumers by raising prices across the board because AT&T would use content to make more expensive for AT&T's rivals like Verizon.
But you can hear it from the AT&T CEO. He seems to think there could be something fishy going on here, something political. So now, the battle lines are drawn, Jim.
ACOSTA: The battle lines are drawn, and we'll find out what fishy when this goes to court, if this goes to court.
Brian Stelter, everybody, thank you very much for your comments on this. We'll have more on this in just a little while.
Also today, President Trump announced he is designating North Korea as state sponsored terrorism. The move puts Kim Jong-un's regime in line for what President Trump calls the highest level of U.S. sanctions.
This comes just as we're getting unexpected proof of how difficult life is in North Korea, even for its elites. Let's bring in CNN's Brian Todd.
Brian, what are we learning?
BRIAN TODD, CNN CORRESPONDENT: Jim -- excuse me. Jim, we have new information tonight on the condition of a North Korean soldier who defected in recent days. He was severely wounded when his own comrades opened fire on him as he scrambled across the DMZ.
South Korea's semi-official news agency, Yonhap, is reporting that the soldier still has not regained consciousness, but it's what was discovered inside this soldier's body that is revealing new information to intelligence agencies tonight about North Korea's army.
Now, we have to warn viewers, some may find images in this story disturbing.
(BEGIN VIDEOTAPE)
TODD (voice-over): A young North Korean staff sergeant, fighting for his life tonight after making a desperate scramble across the DMZ to South Korea.
He was shot several times by his own comrades as he made his dash. Hit in the shoulder, arms, knees, and abdomen. Tonight, disturbing new information.
South Korean doctors say, as they worked furiously to repair his almost fatal bullet wounds, they made a grotesque discovery in his intestines. Several large parasitic worms, one nearly a foot long.
DR. LEE COOK-JONG, NORTH KOREAN DEFECTOR'S SURGEON (through translator): In my over 20-year long career as a surgeon, I have only seen something like this in a textbook.
TODD (voice-over): Surgeons removed the worms and are treating the soldier for infections, along with everything else. How could a young conscript believed to be in his mid-20s have been ravaged by full- grown parasites?
NICHOLAS EBERSTADT, HENRY WENDT CHAIR IN POLITICAL ECONOMY, AMERICAN ENTERPRISE INSTITUTE: North Korea doesn't use chemical fertilizer anymore because it can't. It's too expensive. The North Korean regime has been using animal and human manure as fertilizer. If you don't sanitize this first, bad things happen to your population.
TODD (voice-over): Reuters reports that North Korea's merciless young dictator, Kim Jong-un, in recent years, personally ordered farmers to use human and animal feces to fertilize their crops.
Former U.S. commanders in the region tell CNN tonight, this soldier's case is revealing new intelligence on the rest of North Korea's million-man army. The defector had been stationed on North Korea's side of the so-called joint security area, a heavily guarded portion of the DMZ where North and South Korean soldiers stare each other down just yards apart. LT. COL. ANTHONY SHAFFER (RET.), FORMER INTELLIGENCE OPERATIVE, UNITED
STATES ARMY: He's the very top. Anybody who is assigned to the joint security area is considered elite. Now, think about this, if this guy had all these problems, all these parasites, just think about what the normal conscript has regarding his health.
TODD (voice-over): Experts say Kim Jong-un and his top echelon military officers are fed well, but even soldiers in North Korea's elite military units have to do things that other nation's troops can't imagine.
EBERSTADT: If you are a conscript and you're not an officer, you have to go out and forage and hunt and gather. And part of the foraging and the hunting and gathering may be growing your own food in patches near where you're stationed. Part of it may be pilfering from the local farmers and villagers, and part of it is going to be cadging from your family.
(END VIDEOTAPE)
[17:55:06 TODD: A military analyst say U.S. and South Korean forces are going to use this soldier's condition to their advantage. They'll figure out ways to cut food and supply lines in the event of combat operations.
And they may even use this case for so-called PSYOPS, sending messages to the North Korean commanders and their conscripts that they know just how bad their conditions are -- Jim.
ACOSTA: More disturbing information coming out of North Korea.
Brian Todd, thank you very much.
Coming up President Trump puts North Korea back on the list of nations that sponsor terrorism. The move comes with additional sanctions, but are they mostly symbolic?
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