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Trump Blasts 'Phony Book,' Author Says Pres 'Has Lost It'; Source: Trump White House Counsel Tried to Stop Sessions' Recusal; Source: Feds Investigating Clinton Foundation; Trump White House Counsel Tried To Stop Sessions' Recusal; Tillerson Talks North Korea, Iran In Exclusive T.V. Interview; The Trump-Russia Investigation. Aired 5-6p ET

Aired January 05, 2018 - 17:00   ET

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

[17:00:10] WOLF BLITZER, CNN HOST: Happening now, he's lost it. The author of a damning book about President Trump defends his claim that the commander in chief is mentally unfit for office, but the president calls the book phony and denies giving the author any access. Is the president actually boosting the book's sales?

Pressure Sessions. CNN has confirmed that the White House counsel tried to stop Attorney General Jeff Sessions from recusing himself from the Russia investigation. And now a report says special prosecutor Robert Mueller knows about it. Is it evidence of obstruction of justice?

Investigating Clinton. Sources tell CNN that the FBI and federal prosecutors are now actively investigating Bill and Hillary Clinton's charitable foundation. Is it a legitimate criminal probe or political payback?

And putting up his nukes. In an exclusive interview with CNN, Secretary of State Rex Tillerson talks candidly about North Korea's nuclear program and what it would take to open talks between the Kim Jong-un regime and the Trump administration. Did President Trump's troubling tweet about his nuclear button complicate the situation?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

President Trump is lashing out at an explosive new book and its author, who not only claims the president is mentally unfit for office but also says everyone around the president agrees. The journalist, Michael Wolff, is strongly defending his work, which he says was based on extensive time spent inside the White House with the president and his team. But Mr. Trump denies that, saying Wolff has zero access to him and calling the book -- and I'm quoting him now -- "full of lies, misrepresentations and sources that don't exist," closed quote.

Also, a source is now telling CNN the White House counsel pressured Attorney General Jeff Sessions not to recuse himself from the Russia investigation. "The New York Times" is reporting that special prosecutor Robert Mueller knows about Mr. Trump's effort to influence Sessions, raising new questions about possible obstruction of justice. CNN has also confirmed that a federal criminal probe is now looking

into the Clinton Foundation, the charity run by Bill and Hillary Clinton. A source says the FBI and federal prosecutors are actively investigating whether donations were solicited with the promise of policy favors or special access to the then secretary of state Hillary Clinton in return.

And there's breaking news. In an exclusive interview with CNN, Secretary of State Rex Tillerson calls for the complete denuclearization of North Korea, saying it must be verifiable and irreversible. Tillerson is cautious about talks between North and South Korea, saying the U.S. needs to wait and see what the outcome is.

We're covering all of that and much more this hour with our guests, including Congressman Andre Carson of the House Intelligence Committee. And our correspondents and specialists are also standing by.

But first, let's go right to our senior White House correspondent, Jim Acosta. Jim, the president has left town, but the uproar over this explosive new book rages on.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. And when President Trump left town, he briefly talked to reporters today, but he steered clear of the book that has unleashed fire and fury on this White House all week long. It was a rare moment for the president, who passed up a chance to punch back in person after taking a few hits earlier this morning.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): It was perhaps the only on-message moment of the week for the president, touting his economic record as he was leaving for Camp David.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: The tax cuts are really kicking in, far beyond what anyone thought. The market is good. The jobs reports were very good, and we think they're going to get really good over the next couple of months.

ACOSTA: The president, who boasts he always punches back, made it clear there would be no on-camera comments today about the book "Fire and Fury," written by author Michael Wolff and starring his former chief strategist and sudden Trump critic Steve Bannon.

(on camera): Mr. President, have you read the book "Fire and Fury"?

(voice-over): Mr. Trump saved his fury for his Twitter feed, tweeting, "I authorized zero access to White House. Actually, turned him down many times for author of phony book. I never spoke to him for a book. Full of lies, misrepresentations and sources that don't exist. Look at this guy's past and watch what happens to him and Sloppy Steve," a new nickname for Bannon.

Appearing on NBC, the book's author did not hold back, hammering the president's mental fitness for the job.

UNIDENTIFIED FEMALE: According to your reporting, everyone around the president -- senior advisers, family members, every single one of them -- questions his intelligence and fitness for office.

MICHAEL WOLFF, AUTHOR, "FIRE AND FURY": Let me put a -- put a marker in the -- in the sand here, 100 percent of the people around him.

ACOSTA: And Wolff thanked the president for driving up interest in his book, which was released early due to the heightened demand.

WOLFF: What I say is -- is where do I send the box of chocolates?

[17:05:07] UNIDENTIFIED FEMALE: You think he's helping you sell books?

WOLFF: Absolutely. I mean, and not only is he helping me sell books, but he's helping me prove the point of the book. I mean, this is extraordinary, that a president of the United States would try to stop the publication of a book. This doesn't happen -- has not happened from other presidents, would not even happen from a CEO of a midsized company.

ACOSTA: As for the attacks on his book, Wolff was ready for that one.

WOLFF: My credibility is being questioned by a man who has less credibility than perhaps anyone who has ever walked on earth at this point.

I will quote Steve Bannon: "He's lost it."

ACOSTA: but the White House and the president's friends have fanned out across the airwaves to condemn the book.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Look, we said they spoke once by the phone for a few minutes but it wasn't about the book. They had a very short conversation. But he never interviewed the president about the book. He repeatedly begged to speak with the president and was denied access.

ACOSTA: Slamming Wolff's key takeaway that the president is not mentally fit for office.

CHRIS RUDDY, NEWSMAX CEO: This is just, like, so absurd. It's so ridiculous. So 100 percent, I'm around the president. I've been around him quite a bit through the past year. I met him 20 years ago. He is not psychologically unfit. He's not lost it, as he claimed.

ACOSTA: Secretary of State Rex Tillerson told CNN's Elise Labott he's never raised the issue of the president's mental state.

REX TILLERSON, U.S. SECRETARY OF STATE: I've never questioned his mental fitness. I have no reason to question his mental fitness.

(END VIDEOTAPE) ACOSTA: Now, the president will spend the weekend meeting with Republican congressional leaders and his cabinet up at Camp David to go over the party's agenda over the weekend for 2018. And, Wolf, let's just put this up on screen just to give you a sense as to who is going to be attending all of this. This is quite the sleepover. As you can see, many members of the president's cabinet, almost all the Republican congressional leaders, and almost a dozen members of the president's staff. That is a lot of people, including the vice president, as well.

One person who has not been invited this weekend, the Attorney General, Jeff Sessions, who has been in the headlines, has frequently been the subject of the president's fury. The White House says there is no message behind that being sent to Sessions. An official here at the White House says to our Abby Phillip that the White House stands firmly behind Jeff Sessions -- Wolf.

BLITZER: Jim Acosta at the White House, for us, thank you very much.

We're also learning more tonight about President Trump's alleged effort to stop the attorney general, Jeff Sessions, from recusing himself from the Russia investigation.

Let's go to our chief national security correspondent, Jim Sciutto. He's been working his sources on this story for us. Jim, lots of new questions about possible obstruction of justice.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, in that vein, a source tells CNN that it is indeed true that Don McGahn, the White House counsel, reached out to Jeff Sessions early last year and attempted to get him, to urge him to not recuse himself from the Russia investigation, despite the fact that there were some potential conflicts of interest for the attorney general there.

"The New York Times" went on to report that that was, in fact, an order from President Trump himself, and that Robert Mueller is now aware of that conversation, that outreach; and it's become part of his investigation.

CNN has previously reported that obstruction of justice is a focus of Robert Mueller's investigation, not a conclusion certainly yet, but it is a focus of the investigation principally, to this point, based on the president's firing of the FBI director, James Comey.

BLITZER: There's also some additional new evidence of potential obstruction of justice that Robert Mueller is looking into, we're told, surrounding specifically the firing of the then-FBI director James Comey.

SCIUTTO: Well, this goes to a letter that "The New York Times" says the president wrote in the days leading up to that, calling the Russia investigation, the Russia probe fabricated and politically motivated. That, in fact, was in the first line of that letter.

Now, the president did not send that letter in the end, but it is something that the special counsel has his hands on and part of this bigger picture. With for instance, McGahn's outreach to Sessions to get him to not recuse himself, with the firing of James Comey, the motivation for firing of James Comey because, remember, the initial explanation, Wolf, that the White House stuck by was that it was because of Comey's handling of the Clinton e-mail investigation when, in fact, the president himself contradicted that soon after in an interview with NBC, saying that it was actually his handling of the Russia investigation.

This is part of the big picture that the special counsel is looking at now. Granted, though, it is a high bar to establish obstruction of justice, and you would also need to prove, as I understand from talking to our many legal analysts, you would have to improve the intention -- nefarious intentions or corrupt intentions by the president, as well.

Still the subject of investigation but not clear that this is something that the special counsel will eventually be able to conclude, Wolf.

BLITZER: Yes. We all remember that meeting that the president had in the Oval Office with the Russian foreign minister Lavrov, the then- Russian ambassador to the United States, Kislyak, in which he similarly suggested he was getting rid of Comey because he was pressing on this Russia investigation, right?

[17:10:12] SCIUTTO: Absolutely. Listen, the president, despite all the efforts of his spokespeople to present different explanations for this firing, the president himself many times has made it very clear that it was his handling of the Russia investigation.

Now, the president has a right to fire his FBI director. It's all these other pieces that this special counsel is looking at now to see if he can build a case for actual obstruction of justice.

BLITZER: Jim Sciutto reporting for us. Jim, thanks very much.

Let's get some more on all of this with Democratic Congressman Andre Carson of Indiana. He's a key member of the House Intelligence Committee.

Congressman, thanks so much for coming in.

REP. ANDRE CARSON (D), INDIANA: Thank you, Wolf.

BLITZER: Let me get your reaction to these reports now that CNN has confirmed that the White House counsel, Don McGahn actually reached out to Sessions at the request of the president to try to convince him not to recuse himself from the Russia probe. In your view, does that act also qualify, does that act qualify, potentially, as obstruction of justice?

CARSON: It looks, smells and feels like it for certain.

BLITZER: Tell me why.

CARSON: Well, I think, in a very real sense, you know, we do have a separation of powers. I think that Director Mueller is accomplished. He's well-established. He's following his approach. We're following our approach. It's a three-pronged approach, including the Senate. And for President Trump to express this kind of anxiety, to try to reach out to Jeff Sessions and really thwart this effort, it's very suspicious, Wolf.

BLITZER: So what do you think the special counsel, Robert Mueller, is going to do about this?

CARSON: That remains to be seen. I think, look, he's been in this game for a long time. Next to J. Edgar Hoover, he's the longest serving director of the FBI. He's an accomplished investigator. He's respected in the law enforcement community, the intel community. He knows what he's doing. So President Trump should let him do his job and get to the bottom of this if he doesn't have any concerns.

BLITZER: According to "The New York Times" -- and I'm sure you read the story -- the president got very angry when Sessions refused to -- to step down, when Sessions refused to go against the recommendation of recusal. As we know, he recused himself. But the president got very angry because the president told White House officials, according to this report, that he needs an attorney general who would be willing to protect him.

What does that say to you about the president's understanding of what the attorney general of the United States and the Justice Department of the United States are all about?

CARSON: Well, I think that we can look at the great example of President Obama. He and Director holder had -- A.G. Holder had a friendship, but they understood that they had to be separate regarding those matters. And I think Trump should take a cue from President Obama and his relationship with Attorney General Holder.

BLITZER: He told "The New York Times" in that interview a couple of weeks ago that he has an absolute right, his words, absolute right -- this is President Trump -- to do what he wants with the Justice Department. Does it look now like he's trying to exercise what he considers to be his absolute right?

CARSON: Those are the impulses of a tyrant. The impulses of a dictator. No, look, the Founding Fathers, as complicated as they were, and they were very complicated, they were at least visionary enough to establish separate branches of government. And I think the investigatory arm has to be able to do its job and the president, if he hasn't done any wrongdoing, should have a clear conscience and still lead our country.

BLITZER: But the Justice Department is part of the executive branch.

CARSON: They are part.

BLITZER: Not part of the legislative branch or the judicial branch.

CARSON: This is true, but the president does not have the right to issue directives to the Justice Department to protect his personal interests.

BLITZER: Because that would be, you believe, obstruction?

CARSON: Clear -- clear obstruction of justice.

BLITZER: Let's talk about another item in "The New York Times," the attorney general, Jeff Sessions, according to "The New York Times," asked a congressional staffer to get dirt or damaging information about James Comey, the FBI director, before he -- before he was fired. A spokeswoman for the Justice Department flatly is denying that part of "The New York Times" report. But if it's true that Sessions was trying to do this, what does that say to you?

CARSON: I think that we are in the midst of a corrupt government. I think we're in the midst of an attorney general and a president who have serious issues involving integrity.

BLITZER: Some Republicans in the House of Representatives, and you're in the House, including the chair of the influential House Freedom Caucus, Mark Meadow, Jim Jordan, among others, they're now calling on Sessions to step down. Some Democrats, ironically, now want to protect Sessions. They want him -- don't want him to step down, because that would be an opening for the president to get a new attorney general...

CARSON: Absolutely.

BLITZER: ... who could do -- who would not be recused from the Russia investigation. Do you agree with the Senate minority leader, Chuck Schumer, who says Sessions now must be protected at all costs?

CARSON: Well, I think Schumer's impulses are right. Listen, Sessions is a seasoned politician. I don't see him risking his career all for Donald Trump. I hope not. But if he were to step down, Trump's going to keep removing A.G.s until he gets it right.

[17:15:08] BLITZER: Stand by, Congressman. There's more we need to discuss, including word now that the Clinton Foundation is under investigation by the FBI and the Justice Department. We'll update you on that. A lot more right after a quick break.

(COMMERCIAL BREAK)

BLITZER: We're back with Democratic Congressman Andre Carson of Indiana. He's a key member of the House Intelligence Committee. I want to talk to him about a newly revealed investigation of the Clinton Foundation by the FBI and federal prosecutors. Congressman, stand by.

I want to get the latest information that we're learning from our justice reporter Laura Jarrett. Laura, what are you learning about this federal criminal investigation?

LAURA JARRETT, CNN JUSTICE CORRESPONDENT: Well, Wolf, at the core of this, it's a potential public corruption case. A U.S. official tells me that the FBI and federal prosecutors in Little Rock, Arkansas, are digging into whether donations to the Clinton Foundation were made in exchange for political favors. So a pay-to-play while Clinton was secretary of state and whether any tax laws were properly followed here.

Now you'll remember back in 2016, CNN reports that FBI agents in different field offices, including Arkansas, had opened preliminary inquiries into whether there had been any improper dealings with some donors but that agents didn't get very far. The inquiries fizzled out before the election, but the Justice Department agreed that FBI agents could come back and move forward with more evidence emerged.

[17:20:20] Well, something's clearly changed and now the Clinton camp is pushing back hard, calling this a politically-motivated sham. A spokesperson for the foundation telling us "From time to time the Clinton Foundation has been subjected to politically-motivated allegations, and time after time these allegations have been proven false," Wolf.

BLITZER: Laura, President Trump has been using Twitter, as you know, to openly lobby the Justice Department to go after what he calls Crooked Hillary, Hillary Clinton. Is that a factor here?

JARRETT: So this is a tricky, tricky issue for Attorney General Sessions. He's in a difficult spot, right? The Justice Department does not confirm ongoing investigations. They don't even confirm whether they exist.

But you also have a president who is constantly demanding on Twitter and elsewhere that Clinton be investigated by the Justice Department and, at least clearly some federal authorities think that there's actually legitimate inquiry here, and that's an investigation that, at the end of the day, Sessions oversees, Wolf.

BLITZER: All right, Laura, thanks very much.

Let's get back to Congressman Andre Carson. What's your reaction when you hear about this, that the FBI, federal prosecutors, federal investigators are now looking into the Clinton Foundation, the possibility there could be pay for play, that money was donated to the Clinton Foundation in exchange for policy favors from then-Secretary of State Hillary Clinton?

CARSON: Well, if an investigation has to take place, it should take place. However, I think it's very suspicious that the closer and closer we get to President Trump or his inner circle, we see all of these distractions. I think this is yet another distraction, Wolf.

BLITZER: But do you think that the FBI and the federal prosecutors, Justice Department investigators would be doing this simply because of pressure from the president or from the attorney general on down?

CARSON: I can't say nor will I say definitively, but I think the timing is questionable, but I think an investigation has to take place, and there hasn't been any wrongdoing. Let the investigation take place.

BLITZER: But these are career professionals.

CARSON: Absolutely.

BLITZER: And you have a background in law enforcement. You understand that the FBI doesn't necessarily get involved in a full- scale investigation unless there's some evidence there that would justify it.

CARSON: That's why I say let the investigation take place. If nothing happened that's illegal, then everything is fine. If it has happened, then justice will take course, but I think the timing is still suspicious.

BLITZER: All right. Put on your hat as a member of the Intelligence Committee for a moment. Where -- do you guys have any hearings scheduled? Are you moving forward? Because all of these reports of dissension between Democrats and Republicans in your committee and elsewhere seem to be suggesting at least -- Adam Schiff, the ranking Democrat on the committee, that you guys have a problem.

CARSON: Adam Schiff is a remarkable leader. He's a good friend of mine. He's trying to get access to information. The Republicans are really being difficult in that regard. My hope is that, as we move into the new year, 2018, an election year, by the way, my Republican colleagues will be more transparent with the American people.

They're so concerned about taxpayer dollars. Well, put American people's taxpayer dollars to use by being transparent, calling in the appropriate witnesses so we can get to the bottom of this Russia deal.

BLITZER: Congressman Andre Carson, thanks, as usual.

CARSON: Always an honor. Thank you.

BLITZER: Appreciate it very much.

Coming up, we'll have more on the bombshell report of President Trump's firing of the FBI director, James Comey. Will the new latest revelations help the special counsel, Robert Mueller, make a case for obstruction of justice?

Plus, in a new rare interview, the Secretary of State Rex Tillerson has a warning for North Korea and talks about his relationship with President Trump.

(COMMERCIAL BREAK)

[17:27:43] BLITZER: We're following the reaction to the new revelations about possible evidence for an obstruction of justice case that could be brought by the special counsel, Robert Mueller. CNN has confirmed part of a story first revealed in the "New York Times." A source close to the Attorney General Jeff Sessions confirms the White House counsel, Don McGahn, reached out to Sessions to try to dissuade him from recusing himself from the Russia investigation.

Let's bring in our specialists to assess and discuss. Susan Hennessy, do these new revelations substantially bolster the possible case for obstruction of justice?

SUSAN HENNESSY, CNN NATIONAL SECURITY AND LEGAL ANALYST: Well, they sort of add to the body of evidence. They aren't necessarily sort of game changing. One thing that it does do is sort of eviscerate those early White House claims that the reason why they fired FBI Director Jim Comey was because the bureau and public had lost confidence in him. Now, we hear actually they were actively working at the time to undermine Comey's public confidence.

Now President Trump has already said on camera that the reason why he fired Comey was because of the Russia investigation. So is that really a new revelation?

The other thing that I do think it illustrates is that the obstruction question isn't limited just to the president. It isn't limited just to Jim Comey's firing. It's a lot of people might be implicated here in a lot of different conduct. And so this might be more legally significant, actually, for the president's sort of senior advisers, the other people involved, more than for Trump himself.

BLITZER: Could that potentially include the attorney general himself, Jeff Sessions?

HENNESSY: Well, so we heard that Don McGahn, White House counsel, was sort of dispatched in order to dissuade Jeff Sessions from recusing. Now ultimately, Jeff Sessions does -- does decide to recuse. You know, there's sort of this tidbit in there that is not hugely developed about Sessions trying to dig up dirt on Comey. That's certainly a story that a lot of reporters in Washington, D.C., right now are picking up the phone to talk to their sources, because it seems that's the kind of things that is a red flag for other really, really inappropriate conduct that might have significant ramifications for Attorney General Sessions.

BLITZER: A lot of questions about Don McGahn, whether as White House counsel, as opposed to being the president's personal attorney, was authorized to actually go to Sessions and try to convince Sessions on behalf of the president not to recuse himself.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: And what about keeping information from the president? Which was also in this piece about the legality of firing -- firing Comey.

[17:30:00] You know, Don McGahn and the president have had a very rocky relationship going back months. I don't think this is going to endear McGahn to the president anymore if, in fact, and he's the only one in the hierarchy there who would have been able to say, hey, keep this information from the president. If, in fact, that occurred, and McGahn did that, you know, I can tell you that the president would not be happy about that.

BLITZER: What does the Special Counsel, Phil Mudd, Robert Mueller doing with all of this?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Thank God, I'm not a lawyer. Let me give you a practitioner's perspective. I don't know what the lawyers would say. I can tell you what might come up at the table, and that is: where are the facts? The facts aren't technically whether or not somebody told the attorney general whether to recuse himself. The facts I would be interested in, and I think an investigator would be interested in is: did anybody impede the special counsel from interviews? Did that stop anybody from interviewing with the council? Did they tell anybody what to say when they went into an interview?

Did they tell the special counsel that he couldn't have access to the document? Did they limit -- and there are stories about what's in the White House says what Don McGahn has revealed to the special counsel. Did they hold back documents? There is a technical question about whether or not it's appropriate for the president to tell somebody to press the attorney general to recuse himself. I think that's a judgment question. Judgement is not federal law. I think the real question is: did anybody tell anybody doesn't give him documents, don't give him information, don't interview? I think those are the real questions here. I don't see it yet.

BLITZER: I want to get Mark in a second, but does the -- Don McGahn who's the White House Counsel, not the president's private attorney, if he is asked to come and testify before Robert Mueller's investigators or members of Congress, can he cite attorney-client privilege or would he have to go?

HENNESSEY: Well, so he could certainly attempt to assert executive privilege over his communications with the president. He might have more difficult time serving that executive privilege over his communications with the attorney general. Look, it's appropriate for the White House counsel to have some conversations with the attorney general. That's actually -- he's supposed to be the only person in the White House that's having those communications. But the notion that he actually might have helped the president execute what was either, you know, sort of inappropriate at best, potentially illegal at worse, that raises really, really difficult questions.

BLITZER: We all know, Mark, that this whole Russia investigation weighed very heavily on the president's mind just as he was getting ready to fire Comey. That's what he told Lester Holt of NBC News. That's what he told the Russian visitors over to the White House. But it seems to be entering an even higher level right now.

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: You know, in many ways when we look at this book, a lot of this we kind of knew, at least in the abstract, right? Or we had heard -- we all knew about the chaos, for instance. We all knew or we had been told anyway by our sources within the White House that Donald Trump was not someone who could focus in on an issue for very long, somebody who's kind of like, you know, get up and go, get up and go, get up and go. But I do think what we're seeing, though -- and again, we don't know if the book is true. But, I mean, if we just were to go by the quotes that are on the record that haven't been disputed, we do know this, we know that Donald Trump demands loyalty out of everybody. So much to the point where the loyalty supersedes to him, supersedes the oath of office that everybody in the administration took on their first day. And I think that is incredibly troublesome. BLITZER: This book, you know, Gloria, there's -- the author, Michael

Wolff, he was on T.V. today, the book "Fire and Fury," obviously a best-seller on day one of its publication. When he was asked, Michael Wolff, about his claim that all of the president's advisers he was speaking to believed that the president is unfit for office. Wolff said today, quote, "I will quote Steve Bannon, 'he's lost it'". Your reaction?

BORGER: Well, look, I'm not in any position to make a judgment on the president's mental acuity or whatever. And I spoke with a source today who is close with the president and said, look, this isn't a question of that, this is a question of competence, which is he said, that's terra firma to talk about. You can't talk about competency, you want to talk about the way the White House is run, you want to talk about the chaos, you want to talk about the president's incuriosity, attention span, anything else? That's fine. So, And I think that that is, you know, that's a question that we have been discussing for a very long time here.

And Steve Bannon's judgment may be one thing, and, again, he knows the president very well. He's operated with him. But he also went on T.V. the other day and said the president's a great man and bowed down to him again. So, paying homage at one point, saying he's lost it at another. So, you know, I think that, that what we ought to focus on is talking about how the administration is being run, how the White House is being run, how policy is being implemented, how it's not being implemented at this point. I really do.

BLITZER: Because it's hovering over everything right now, this Russia investigation. Your reaction to this book.

[17:05:02] MUDD: It is. The question, though, and I think Gloria is dead-on, we're missing the real question. It's not the -- it's not the sort of phycological preparedness of the president to be president, it is looking at the facts. He comes into the office and directs his press secretary to lie about how many people showed up. He lied about the former president's citizenship. He lied about whether Trump Tower was tapped. He lied about whether Susan Rice had the right to look to -- as we say unmask national security agency communications. He lied when he said he'd tear up the Iran nuclear deal. It's not about phycological preparedness, it's about the temperament and judgment of a man who's responsible for the nuclear button. That's the story here.

PRESTON: And let me just give a word for that, narcissism. There is a level of narcissism that Donald Trump has acceded to that is in itself very troubling, and I think it goes to everything that Phil and Gloria have said. How do they run the country? How do they interact with other people? How are they deal with foreign leaders? And everything we've seen so far has been very sporadic, but very narcissistic.

BLITZER: Everybody, stand by. There's more news coming up here in THE SITUATION ROOM, including the Secretary of State Rex Tillerson; he sits down for an exclusive television interview. He's opening up about his relationship with President Trump, and he's sending a direct warning to North Korea.

(COMMERCIAL BREAK)

[17:40:12] BLITZER: We are following the breaking news at an exclusive television interview with CNN. Secretary of State Rex Tillerson talks about the challenges posed by two the United States' most dangerous adversaries: North Korea and Iran. The secretary of state sat down with CNN's Global Affairs Correspondent, Elise Labott.

(BEGIN VIDEOTAPE)

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: There was big news last night about the north and south arranging talks for next week. North Korea now coming to the table. Is that an opening may be for talks with the U.S. or nuclear talks?

REX TILLERSON, U.S. SECRETARY OF STATE: Well, I think it's too early to tell. We need to wait and see what the outcome of their talks are. President Trump had a good call with President Moon yesterday morning, which I participated in, and their intent is to talk about the Olympics -- obviously a very important upcoming event for South Korea and the potential participation of North Korea in those Olympics. So, our understanding is that's the content of the meeting. So, I think it's a little early to draw any conclusions at this point.

LABOTT: But it could be a positive sign maybe that North Korea wants to engage a little bit.

TILLERSON: Well, we'll see. We'll see, perhaps. I know some are speculating that this may be their first effort to open a channel. But as you know, we've had channels open to North Korea for some time. And so, they do know how to reach us if and when they're ready to engage with us as well.

LABOTT: If you can explain a little bit about what the U.S. policy is on North Korea because I think Americans are a little bit confused. Do the North Koreans have to give up their nuclear program before committing to talks?

TILLERSON: Our policy is the complete, verifiable, irreversible denuclearization of the Korean Peninsula. That is a policy that is commonly held by everyone in the region as well.

LABOTT: Right.

TILLERSON: The Chinese have that as a stated policy, Russia has it as a stated policy. So, regionally, all of the countries in the neighboring area as well as the international community are well- aligned on the policy. How we achieve the ultimate endpoint, the final full denuclearization, the verification of that, and irreversibility of it, clearly that's going to take some time. So how we begin the talks are yet to be determined, but we clearly need a signal from North Korea that they understand these talks must lead to that conclusion. The pathway of how you get there, that is the nature of a negotiation. There'll be some give and take to achieve those objectives. So, that objective has never changed. LABOTT: Do you think -- you know, a lot's been made about the

president's tweet on the nuclear button, but, you know, now North Korea's talking with South Korea. Do you think that tough rhetoric has worked here?

TILLERSON: I think the rhetoric that North Korea understands is, well, it is our objective and the president's been very clear to achieve a denuclearization through diplomatic efforts. Those diplomatic efforts are backed by a strong military option, if necessary. That is not the first choice. And the president's been clear that's not his first choice. But it is important that North Koreans, as well as other regional players, understand how high the stakes are. In an effort to ensure our diplomatic efforts are fully supported. And I think to date, the diplomatic efforts have been supported very well in the international community.

LABOTT: So it sounds like this kind of good cop-bad cop, if you will, you know. Holds out the prospect of talks, but if talks don't work, military action, that might be the formula that you and the president will continue.

TILLERSON: I'm going to let you characterize it that way. I'm not going to necessarily show all of our cards.

LABOTT: Let's go to Iran. You said that you want to support "elements in the country that will lead to a peaceful transition of government." That sounds like regime change.

TILLERSON: Well, I think the Iranian people have suffered under this regime. They have suffered under economic sanctions because of this regime's destabilizing activities in the region. At some point, people will decide this is not how they want to live any longer. We do not support violent transitions of power but we do support peaceful transitions of power, and we've seen those expressions in years past with the large demonstrations at the elections in 2009. The demonstrations that we see in the streets today. We're supportive of the Iran people achieving their aspirations for a better quality of life for greater freedom. We believe they deserve that, but it will be up to the Iranian people to manage that peaceful transition.

LABOTT: How do you help them facilitate that?

TILLERSON: I think by amplifying their voices. That's what the president has done. The White House, the vice president, myself here at the State Department, through statements we've made, is to give their voice amplification. We know the regime listens to the world. And that's why we've been working diligently with others in the world to say to the regime you must address these concerns of these people. And you should address it by beginning a process of reform.

[17:45:10] LABOTT: How does that factor into your decision on sanctions? Do you support waving sanctions at this next certification?

TILLERSON: Well, we've been very clear on our policy in Iran. We look at the totality of Iran's actions and behaviors. So, the decisions around waving sanctions relative to the nuclear agreement and decisions to take in terms of imposing additional sanctions on Iran that are unrelated to the nuclear agreement are -- there's a broad array when you talk about sanctions.

LABOTT: So, non-nuclear sanctions, you're talking about?

TILLERSON: Well, I think some people get confused sometimes and it's understandable. But Iran's support for the Houthis in Yemen, their support for destabilization efforts in Syria, the funding of militias, the sending of foreign fighters, arming terrorist organizations in the region, Lebanese, Hezbollah, that has to be dealt with. And our sanctions are targeted at Iran's destabilizing activities within the region while still maintaining our efforts to ensuring Iran never acquires nuclear weapons. What the president has done with his policies is he's now looked at Iran in its totality and said Iran has to be held to account in both of these areas.

LABOTT: So, it sounds like maybe, you know, even if you certify on the nuclear issue, more non-nuclear sanctions could be coming?

TILLERSON: They will be coming. There were non-nuclear sanctions announced yesterday by the Treasury Department in response to Iran's missile -- ballistic missile development programs which are in violation of earlier agreements.

LABOTT: And more to come?

TILLERSON: In all likelihood. Unless Iran alters its behavior.

(END VIDEOTAPE)

BLITZER: Our Global Affairs Correspondent Elise Labott joins us right now. So, what are you hearing is the real U.S. strategy right now toward Iran?

LABOTT: Well, there are a couple of things. I mean, President Trump has a lot of deadlines coming up this month on the nuclear sanctions. Whether he waves sanctions that President Obama waived to comply with the nuclear deal, he can reimpose them. But I think what they're looking at is this non-nuclear behavior, as the secretary said. And I think looking at the Iranian Revolutionary Guards Corps, the IRGC, their grip on the economy, and I think they're looking at the clerics, the mullahs, the religious part of the regime, and trying to divide these fissures between the government and the regime, the revolutionary guards.

And I think that they're trying to, you know, show the Iranian people how much the IRGC is draining the economy. So, I think they're trying to make this distinction. And I don't necessarily think that they think that these protests are revolutionary, but they do think that it fits in with U.S. national interests and they're going to continue to try to push away at these fissures between the Iranian government, President Rouhani, Iranian Foreign Minister Zarif and these clerics and the revolutionary guard that they say are the real damage to the country.

BLITZER: We're going to have more of your interview coming up here in THE SITUATION ROOM in the next hour, Elise, stand by for that.

Still ahead this hour, more fallout from the revelations about President Trump's actions leading up to the firing of the FBI Director James Comey.

Plus, more from the secretary of state's exclusive interview, once again, with CNN. We'll be right back.

(COMMERCIAL BREAK)

[17:52:17] BLITZER: Tonight, CNN is airing a special documentary, the Trump Russia investigation. Our Justice Correspondent Pamela Brown looks into among other things, the sudden and shocking firing of the FBI Director James Comey in action which caught everyone, including Comey himself, by surprise.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Comey wasn't even in the city. He was all the way across the country.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: He actually found out by looking up and seeing it on the television.

ANDERSON COOPER, CNN HOST: Just -- I just got to stop it. He was talking to FBI agents in Los Angeles and he looks up and he sees that he's fired from television.

BROWN: That is what we are told.

UNIDENTIFIED FEMALE: That just gives you a sense of how impulsive this firing was and it really did backfire.

UNIDENTIFIED MALE: The underlying facts are not in dispute. The President fired James Comey. The issue is why.

UNIDENTIFIED FEMALE: Did something specific happen? Was there a moment?

UNIDENTIFIED FEMALE: The White House Comms Department didn't know about this.

BROWN: The media team was scrambling to answer reporters' questions.

UNIDENTIFIED FEMALE: They couldn't come up with some talking points, a statement, an explanation, like the basic facts.

BROWN: And Sean Spicer was left standing by the bushes.

UNIDENTIFIED FEMALE: Just no cameras --

SEAN SPICER, FORMER WHITE HOUSE PRESS SECRETARY: OK. Hold on, just turn the -- turn the lights off.

UNIDENTIFIED FEMALE: No cameras at the moment, but you'll do one on one -- OK. SPICER: Relax, enjoy the night, have a glass of wine.

MAGGIE HABERMAN, WHITE HOUSE CORRESPONDENT, THE NEW YORK TIMES: They deliberately didn't tell the press office, because they thought the press office would leak it. And it was at that moment when he was hugely mistrustful of his own staff.

(END VIDEOTAPE)

BLITZER: I remember that day vividly. Pamela Brown is with us. That was a huge, huge moment in this first year of the Trump presidency. What else are we going to learn in this amazing documentary later tonight?

BROWN: Well, Wolf, you know, this has been going on for the better part of the year. And so, basically, we're bringing it all together in one place, bringing all of the threads, because it's easy to lose track of all of the different Russia investigation threads. So, we have different chapters. You saw the one there on the firing of James Comey, we also have a chapter focusing on the infamous dossier, which continues to be the center of controversy even today, the Trump Tower meeting with the president's own son -- Don Jr. meeting with Russians -- we explore that.

And we also follow the money. We look at the president's past business dealings with Russians. We go back several years, decades looking at that. So, basically, this is an opportunity to bring it all together in one place to make sense of it all, and also get rid of the speculation; there has been so much of that surrounding this over the past year. We just focus on the facts, focus on what we know, and put all these different pieces together so you can have a better understanding of where things stand and how they all tie in together. But the bottom line is, we still don't know what this all means, Wolf. We don't know where it will lead. But Robert Mueller's investigation continues. He continues to look at a possible obstruction of justice, possible coordination between the Trump campaign and the Russians. And it appears, Wolf, that this story is far from over.

[17:55:06] BLITZER: And they're clearly also looking at what's called money laundering, or as they used to say follow the money, right?

BROWN: That's right. In fact, in Michael Wolff's book, Steve Bannon is quoted on the record, saying if you want to get to Trump, look at money laundering. Of course, Trump himself has denied anything like that; he's denied that he's committed any crimes. But certainly, we do; we spend an entire chapter in this special report looking at the money, following the money, and looking at his past business dealings with Russians.

BLITZER: Can't wait to see it, Pamela. Thanks very much. What I've seen so far is really amazing. And to our viewers, be sure to watch our "SPECIAL REPORT: THE TRUMP RUSSIA INVESTIGATION" that airs later tonight, 10:00 p.m. Eastern.

Coming up, new developments in the Russia investigation; the new questions about potential obstruction of justice in the White House. (COMMERCIAL BREAK)

BLITZER: Happening now, like a child, the president's temperament and state of mind under more scrutiny than ever as the author of a new book claims that everyone close to the president questions his fitness for office.

[18:00:00] Tonight, new warnings that Mr. Trump is quote, "losing it". Evidence of obstruction; we're learning about the focus of the special counsel's Russia probe, including attempts to dig up dirt on James Comey and stop Jeff Sessions' recusal.