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National Security Adviser McMaster Could Leave This Month; Putin Taunts U.S. Military Tries To Sway Public Opinion; Russian Sex Guru Offers Alleged Trump-Russia Secrets For Help In Getting Out Of Jail In Thailand; Kelly: White House Lapses in 'Handling of Classified Material'; White House Misses Deadline to Turn Over Info on Security Clearances. Aired 5-6p ET

Aired March 02, 2018 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. Not backing down. White House chief of staff John Kelly is not backing down over his role in the scandal over a key aide who was forced out over domestic abuse allegations. Kelly says he has nothing to even consider resigning over, even amid a growing controversy over White House security clearances.

[17:00:28] Trade wars. A day after announcing punishing tariffs on key imports and sending world markets into a tail spin, President Trump says trade wars are good. Will American products now be targeted for retaliation?

Angering his allies. The president's position on trade, guns, and even his own attorney general are angering his allies. Does he risk losing key advisers and powerful supporters in Congress?

And Russian seductress. A self-described Russian seductress and sex guru says that, with her ties to Russian oligarchs, she can provide what she describes as "the missing puzzle pieces" to an alleged Russia-Trump connection, in exchange for help in getting out of a prison in Thailand.

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

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news, President Trump has arrived at his Florida retreat. But he can't escape the chaos he's been creating here in Washington. White House chief of staff John Kelly is caught up in the controversy but says he won't be joining the growing number of advisers leaving the White House, even as he acknowledges deficiencies there in the handling of security clearances and classified materials.

I'll speak with retired general Michael Hayden, the former director of the CIA and the NSA. And our correspondents and specialists, they're all standing by with full coverage.

First, let's go straight to our chief White House correspondent, Jim Acosta. Jim, the president in Florida right now, in Palm Beach. But he seemingly can't get away from all the problems over at the White House. JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: That's right, Wolf.

Trade wars, staff wars, they go on and on.

Chief of staff John Kelly, Wolf, left White House staffers puzzled today when he tried to relitigate the mistakes that were made here at the White House in the Rob Porter scandal.

One official told us the timing was, quote, "odd" for Kelly to resurrect the controversy. And there's more chaos on the policy side as President Trump is doubling down on his call for new tariffs, inviting a trade war that even some administration officials are acknowledging will cost Americans more money to buy the products they need.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): When President Trump stepped away from the White House, he left behind an administration that's, by many accounts, in utter turmoil. His embattled chief of staff, John Kelly, reignited the firestorm over former staff secretary Rob Porter, who was ousted last month in response to allegations of domestic abuse.

While Kelly said he is not quitting over the controversy, telling reporters, quote, "I have absolutely nothing to even consider resigning over," he admitted to reporters that glowing statements from the White House praising Porter, just as the staff secretary was stepping down, were a mistake.

Kelly said, quote, "We didn't cover ourselves in glory in terms of how we handled that on Wednesday morning. It was confusing."

Kelly also tried to clean up the time line of the staff saga, insisting he only learned of red flags in Porter's background February 6. But sources tell CNN a different story: that Kelly and other White House officials were becoming aware of the allegations last November. Kelly attempted to explain that, saying, quote, "The first accusation had to do with a messy divorce but no mention of physical abuse."

Porter's second wife blasted Kelly's explanation in a statement, saying, "That is insulting to anyone suffering in an abusive situation now. Emotional and psychological abuse is abuse. Not to mention punching in windows and dragging someone out of a shower is physical."

The president is also facing growing criticism over his sudden announcement of new tariffs on steel and aluminum coming into the U.S., moves that are almost certain to start a trade war.

Mr. Trump's response: "Trade wars are good and easy to win. We win big. It's easy."

The "Wall Street Journal" is not buying it, warning, "Donald Trump made the biggest policy blunder of his presidency."

When asked about predictions from economists that consumer costs will go up, Commerce Secretary Wilbur Ross pulled out a can of soup. WILBUR ROSS, U.S. COMMERCE SECRETARY: Let's put in it perspective. I

just bought can of Campbell's soup today at the 7-Eleven. It was $1.99 for the can. There's about 3 cents worth of tin plate steel in this can. So if it goes up 25 percent, that's a tiny fraction of 1 penny.

ACOSTA: But the president's view on tariffs have been known for decades, like his colorful warning to China on trade in 2011.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Listen, you mother (EXPLETIVE DELETED). We're going to tax you at 25 percent.

ACOSTA: Democrats say this is exactly the kind of chaotic presidency both parties warned about.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: I've served under six administrations. I have never seen such chaos. Who knows what he'll do on trade tomorrow morning?

[17:05:03] ACOSTA: Adding to the chaos, sources tell CNN that national security adviser H.R. McMaster could leave the White House in the near future.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Look, General McMaster is not going anywhere.

If this is chaos, I think the American people are glad for it.

If they want to call it chaos, fine. But we call it success.

ACOSTA: Not to mention the president's ever-changing position on gun control. After indicating he would back several gun measures, the president met with the NRA and tweeted, "Good, great meeting in the Oval Office tonight with the NRA," raising questions about whether the president still supports confiscating guns from the mentally ill without due process, as he said earlier in the week.

SANDERS: He is looking for ways THAT we can improve the mental health system so that we can take guns away from people that shouldn't have them.

ACOSTA: But the president still made time before 6 a.m. to take on actor Alec Baldwin, who recently said he was unhappy playing Mr. Trump on "Saturday Night Live."

ALEC BALDWIN, ACTOR (AS DONALD TRUMP): And he has the nerve to call me a moron. Talk about the pot calling the kettle Mexican.

ACOSTA: "Alec Baldwin, who's dying, mediocre career was saved by his terrible impersonation of me on 'SNL,' now says playing me was agony. Alec, it was agony for those who were forced to watch."

There were, however, no tweets from the president on Vladimir Putin, who was boasting to NBC that he has new high-tech weapons ready for the battlefield. VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): As a matter

of fact, every single weapons system discussed today easily surpasses and avoids an anti-missile defense system.

(END VIDEOTAPE)

ACOSTA: Now, as for John Kelly, he did reveal to reporters earlier today that his eyes were opened last September by the large number of staffers here at the White House who were still working with interim security clearances like Rob Porter. Kelly admitted that that was more people than he was comfortable with.

In another remarkable moment, Wolf, Kelly conceded that the handling of classified material was not up to the standards that he had been used to when he came on board here at the White House last summer. Wolf, that is a remarkable and stunning statement, given what that Mr. Trump slammed Hillary Clinton over her handling of classified material during the campaign.

Wolf, that is part of the reason why we have heard from one White House official earlier today that it was just odd timing for John Kelly to dredge all of this back up, especially after such a turbulent week -- Wolf.

BLITZER: Certainly was. All right. Thanks very much, Jim Acosta over at the White House.

The powerful Oversight Committee chairman has demanded that the White House provide information on security clearances for senior staffers. The deadline he set has now passed.

Let's go to our senior congressional correspondent, Manu Raju.

Manu, what are you learning?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, Wolf, there's been scrutiny from not just Democrats over the White House's handling of the Rob Porter scandal and the interim security clearances given to White House staff like Jared Kushner. But also some powerful Republicans want some answers, too. They are troubled by this practice.

On the House side, the Oversight Committee led by Republican Trey Gowdy has issued a very detailed letter to the White House, asking for a wide range of information, including over the procedures for issuing the security clearances.

Now Gowdy and the committee's top Democrat, Elijah Cummings, also want to know exactly when White House employees became aware of potentially disqualifying information involving Rob Porter with a detailed time line of the background investigation into Porter.

But Wolf, despite setting a Wednesday deadline for this information, I'm told that the White House has not yet provided this information to the committee. Now, Gowdy's office did tell me that, quote, "consistent talks" with

the White House over this document request, and they do hope that they get this information soon.

But this week at the press briefing, Sanders was asked whether she would -- the White House would provide this information to the panel, and she made no commitments.

And Wolf, there's also significant scrutiny on the Senate side. And that's where the Judiciary Committee, Chairman Chuck Grassley, has joined the Democrat, Dick Blumenthal, in asking the FBI and the White House to provide similarly detailed information about Porter and how the White House has handled security clearances. They want all of that information by March 13.

So Wolf, just as this controversy -- Kelly has reopened this controversy, it's a sign that it's not dying down on Capitol Hill. And it's also a sign that the White House is going to have a very hard time ignoring these requests for records when these requests are being made by Republican chairmen who do have subpoena powers if the White House chooses to ignore them, Wolf.

BLITZER: Yes, they do. They're the majority, and they hold the key on so many of these issues. Thanks very much, Manu Raju, joining us.

And joining us right now, the retired U.S. general Michael Hayden. He's the former CIA director, the former NSA director, as well. He's a CNN national security analyst.

General Hayden, thanks so much for joining us. First of all, just remind our viewers why this whole issue of security clearances for senior officials is so important.

GEN. MICHAEL HAYDEN (RET.), CNN NATIONAL SECURITY ANALYST: Yes. We need decide, we use a bureaucracy to decide -- and we'll use the bureaucracy, and we use processes to decide -- whether or not this individual should have access to and possession of classified information.

And we look at a couple of things here, and I think it's important to make the distinction. One thing we look at is character. All right? Does this person have the right stuff to be able to protect this information to the desired degree?

[17:15:09] And the other lane, it's not character. It's circumstance. All right? And there are some people of good character who, because of their circumstances, would choose not to entrust with classified information. That -- that could be too many family members in the old country. That could be excessive debt. That could be complex international financial arrangements.

So I think it's important to point out here, we're not looking for guilt here. All right? We're just looking as to whether or not this person should or should not have access to information.

BLITZER: Would Jared -- Jared Kushner's family real-estate business raise red flags?

HAYDEN: That's why I brought up the second category. Because again, no sense of guilt here, all right? No sense of any character flaws on the part of the young man.

But there could be circumstances -- in fact, I've been party to this, where we've denied clearances to people we knew were good, but based just upon the totality of their circumstances, there were vulnerabilities there, at least at the theoretical level that we just didn't want to embrace. And so yes, indeed, that could be part of this.

BLITZER: So he had what were interim top-secret security clearances. But that's been significantly downgraded now to interim secret security clearances, a vast difference from your top secret SCI and secret. And the question is, can he do his job in the Middle East, China, Mexico sensitive national security subjects on the agenda with these restricted security clearances?

HAYDEN: In my view, if secret means secret, all right, and we're not allowing some, you know, "Wink, wink, nudge, nudge, here take a look at this." If secret does mean secret, and he only has access to that level of classification, which, Wolf, about 5 million Americans have. So you can kind of get a sense as to how sensitive or not this information is. I frankly don't think he would have the right kind of information to do the things the president expects him to do.

BLITZER: So you think he should step away from that?

HAYDEN: If he cannot get to the full-up T.S. SCI, yes.

BLITZER: General Kelly, John Kelly, the White House chief of staff, retired four-star general, he says that he was pretty surprised -- he said it today -- that the security clearance operation at the White House was certainly not up to the standards he had been used to as a U.S. military officer.

HAYDEN: Yes, and he made it even a bit more broad. It was kind of the handling of classified information, as well.

You know what? That's refreshing. That's someone going in there and assessing a situation, embracing the fact it's not where it should be. Not being embarrassed to say, "We didn't do as well as you should expect us to do, and we're going to go fix it." So in that sense I'm happy that John said that.

BLITZER: But it's pretty startling to hear that the standards were not in place when this new administration came into being. And they didn't have those standards; and as a result, you have dozens and dozens of officials who couldn't get those top-secret security clearances.

HAYDEN: So that's a reflecting, on I think, the style of the administration, which John, I think, is trying to rein in a bit.

This was an administration, a team, an incoming team, Wolf, that really didn't -- not have a great deal of regard for norms.

You know, and there are norms out there not because we're arbitrary. There are norms out there because, through lessons learned, through history, we understand if you don't do it that way, you're really increasing the odds things are going to end up unhappy.

In the case of Mr. Kushner, we kind of jumped over norms with regard to nepotism. We jumped over norms with regard to divestment of interest. We jumped over norms with regard to his security clearance, and look where we are now.

BLITZER: General McMaster, he's still an active-duty three-star general, the president's national security advisor. And a lot of reports, including our own reporting, that he could leave as early as later this month. He would be the second national security advisor out. Michael Flynn, retired three-star general was the first. We all know what has happened to Michael Flynn.

But this turnover, how does it impact national security?

HAYDEN: Yes. It can't be good. And what we're seeing here, Wolf, is we're seeing this story appear on about a 30-day sine wave as we moved through the administration this year. And I think that's a reflection to the fact that H.R. and the president are not a good fit. I'm not talking about personality, although I do think that might be a problem.

The problem is process. Unless your national security adviser is Henry Kissinger or Brent Scowcroft, national security advisor is your process guy. He's the one who tees things up. He's the one who imposes order and discipline and sequence. And this is a president who dislikes all of those virtues.

So I think we see this story recurring every three to four weeks, and it will recur even if H.R. leaves and someone else comes in. Because this is all about the president's style.

BLITZER: The -- the president's style also, usually, when somebody attacks him, he goes after them, with the exception of Vladimir Putin, who this week, he delivered a major speech and showed a lot of video of what he described as invincible nuclear weapons, blowing up a chunk of Florida in one of those videos.

The president's got plenty of time to criticize others, but he stays silent when it comes to Putin, thunderously silent, even though his aides criticize Putin: the State Department, White House press secretary does that. But he doesn't. Why?

HAYDEN: I don't know why. I think they're -- well, I'll suggest one reason. I think, no matter what the circumstances are now, this has become a thing for him.

You and I and others have talked about this now for almost two years, going back through the campaign. And this is a stubborn man. I think he may not want to finally admit that he should have been criticizing Vladimir for quite a while. Now on the actual substance here, Putin was taunting him. The correct

response for an American president when someone like Putin, a lesser actor in a lesser, state, taunts the American president, is to be quiet. So that was the right answer. I just wish he had answer for some of the other taunting that we've seen.

BLITZER: General Hayden, thanks so much for coming in.

HAYDEN: Thank you.

BLITZER: Up next, more on Vladimir Putin's taunting of the United States military. And maybe trying to frighten Americans with his new boasts of invincible new nuclear missiles. Is this all a public relations ploy just the start of a major new arms race?

And a self-described "Russian seductress" says she can provide what she describes as "the missing puzzle pieces" to an alleged Russia- Trump connection in exchange, she says, for helping in getting out of a prison in Thailand.

(COMMERCIAL BREAK)

[17:21:05] BLITZER: President Trump, he's now in Florida in Palm Beach, Mar-a-Lago. In about an hour or so, he'll host a roundtable for leaders of the Republican Party.

For now, he's left behind the chaos, the intrigue, the infighting that's certainly back over at the White House.

Let's bring in our analysts and our experts to assess. And Jeffrey Toobin, you've seen this report in "The New York Times." The president has actually, behind the scenes, been urging his White House chief of staff, John Kelly, to usher Jared Kushner, his son-in-law and senior advisor, Ivanka Trump, his daughter and senior advisor, quietly out the door. What do you make of that?

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Can we just pause and just say again what this story says? The president of the United States is asking his chief of staff to fire his daughter and son-in-law. Is this weird enough? Is this like the strangest story?

I mean, it just illustrates the problem of nepotism. You can't treat your relatives like they are regular employees. And this crazy roundabout way of trying to get rid of them, I mean, it's just, you know, in keeping with the surreal nature of this whole White House.

BLITZER: Yes, this -- and this is pretty much linked to the investigations, Chris, that are going on right now, including the security clearances controversy that has erupted over at the White House.

TOOBIN: Well, why -- why are they working there at all without security clearances?

CHRIS CILLIZZA, CNN POLITICS CORRESPONDENT AND EDITOR AT LARGE: This is -- Jeff is right. I mean, there's two things going on. There's the nepotism piece, and then there's the fact that you have people who are operating under interim security clearance.

I know we focused on, with Rob Porter, the now former White House staff secretary, we focused on the allegations of domestic abuse and rightly so. But there's another giant story there, which is this is the person who was literally, like, "Here you go, Mr. President." I mean, he was -- he was handling top-secret classified information on an interim security clearance, and they knew that there were issues with him getting a permanent security clearance.

So you have -- you have that with Rob Porter, now gone, although not because of his security clearance issues. You have that with Ivanka Trump now, and you have it with Jared Kushner. And I've said this before, but if you ask anyone, name the five people that Donald Trump who is closest to and his listens to the most, Ivanka Trump and Jared Kushner are in everyone's top five.

BLITZER: They're family. And you just heard General Hayden. He's the former CIA director, former director of the National Security Agency. He said, Jared Kushner dealing with these sensitive issues in the Middle East or China or Mexico, he has no business if he can't get top-secret SCI security clearances. Just having a secret clearance is not going to do it.

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY AND LEGAL ANALYST: I cannot remember a single National Security Council meeting or meeting in the situation room, for that matter, that was at a secret level.

So we have Jared Kushner handling highly-classified portfolios, like Israel. The Israelis are coming into town this weekend. When he's either going to go in with information at a secret level, meaning he definitely doesn't have the whole picture or he's going to abuse the system, and President Trump is going to give him access to more classified information.

And also, he has a bias. One thing we didn't talk about: there are major conflicts of interest with the Qataris. He has a bias whenever he's working on any of these countries, and it's not a bias towards American national security.

BLITZER: He's got a family business that's -- whether there is or there isn't, it looks like an appearance of impropriety, if you will. But we don't know that. The whole notion, though, of these security clearances, so significant right now, especially when the president, as we know, he's relied on his family -- family members, his close friends for so much assistance.

JUANA SUMMERS, CNN POLITICS SENIOR WRITER: He has. And because of these issues, you see a president -- and this is someone that we know, from what we've seen in the White House, and during the campaign, you know, he values loyalty to a fault. And that's why he's surrounded himself with his family members, with people like Hope Hicks, his longtime aide, that came to the White House with him and is now leaving, too. And I think that's why you see this president, increasingly, he's more and more alone now than he's ever been. And even the very people he relies on the most, as Chris said, they could be on their way out of the White House, too, because of the security clearance.

[17:25:09] CILLIZZA: Right, it's a perfect -- in some ways it's a perfect storm. His White House operates in a regular sense of sort of chaos and turmoil. That chaos and turmoil has gone up, of late. Now, it's incremental. Not exponential. But it's gone up at the same time that the number of people that he can trust and rely on and who he can focus on -- even if he can rely Jared Kushner and Ivanka, which now may be an open question, but even if he can rely on them, they're distracted by their own things at this point. They can't focus full- time on what President Trump considers most important, which is of course, Donald Trump.

BLITZER: Yes, there's a lot going on. Everybody, stick around. There's a lot more we need to discuss. We'll take quick break. We'll be right back.

(COMMERCIAL BREAK)

[17:30:00] BLITZER: We're back with our analyst and our experts. And Sam, General H.R. McMaster is an Active Duty Three-Star General, apparently, he's leaving as National Security Adviser before the end of this month. Is it at all concerning to you, this turnover continues over on sensitive national security issues?

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: It's concerning on a national security level. When you think about the fact that the Russians want to undermine the credibility of our institutions, all of these personnel rumors are golden tickets for Vladimir Putin. But Wolf, I think the real question is why would H.R. McMaster want to stay? National security policy is not being made in the situation room, he and his team are working. It's being made from Trump's bedroom when he goes on a Twitter storm over the weekend. So, I think the incentives for staying at the National Security Council, working long hours, not getting paid a whole lot or much lower now.

BLITZER: As you know, the president is under enormous fire, not just, let's say, from Democrats, but from fellow Republicans from big business, from the editorial page of the Wall Street Journal for his sudden decision yesterday to announce tariffs on steel and aluminum imports. So, without going through a full-scale process. Now, this has been a cause of, potentially, a lot of grief.

JUANA SUMMERS, CNN POLITICS SENIOR WRITER: Absolutely, as people are scared that he's going to cause a trade war, and that's what we've been talking about. But if you listen to the president himself today, he says those are a good thing. Finally, enough though, that doesn't match what a lot of economists say. They're worried that if President Trump keeps going along this path, and it blanches a broader trade war, that that would undermine the economic expansion of the country has seen for that matter that the president likes to take credit for.

CHRIS CILLIZZA, CNN POLITICS EDITOR AT LARGE: If you want to talk about whether a trade war is a good thing or not, look at Smooth Hallie in the 1930s and how that worked out? I mean, you know, like, the idea that tweeted, first of all, I'm not sure we should make trade policy on Twitter. But the idea that he tweeted -- trade wars can be good and can be easily won. The thing that you forget in the calculation is, there are two sides to this. If we have tariffs, don't think that the countries that are impacted by this are not -- are going to say, well, that's fair. We won't do anything. That's what -- that's the Donald Trump calculation. That's not the calculation any other country in the world makes. The will retaliate.

BLITZER: They're going to retaliate, Jeffrey, as you well know.

JEFFREY TOOBIN, CNN LEGAL ANALYST AND FORMER FEDERAL PROSECUTOR: Well, perhaps they are. But you know, I have to say, I'm pretty skeptical of all this, you know, complaining from these Republican Senators and Congressmen. You know, they're very good about, oh, we're very concerned. How many Republicans have voted against Donald Trump? Very few. How many have voted against any of these judicial nominees?

How many of them voted against the tax cut? How many of them voted against Obamacare? A couple, and that was a big difference. But, you know, all these Republicans, you know, Ben Sass gets all indignant about, you know, about gun control. Ben Sass is a rubber stamp for Donald Trump legislatively. And so are most of these Republicans. So, all this sort of complain about, about these tariffs, you know, raise a little hallow when, you know, they wind up following along no matter what.

CILLIZZA: Just to Jeff's point quickly. I do think he is right that this Republican Party is Donald Trump's Republican Party. Look, if you ever needed evidence of it, go look at the tax cut. You're talking about a massive increase in the debt. That would not happen in 2010. There has been a capitulation. Donald Trump had a hostile takeover of the Republican Party.

Well, the 2016 primary and then through election. They've given over to it. So, you will hear the voices like Ben Sass crap up, but no one in the Republican Party should be surprised when Donald Trump does things that are not tradition Republican Orthodoxy, because he want an Republican before two years ago.

BLITZER: During the campaign, since the campaign, he often spoke about trade wars and how the U.S. suffering as a result, why now. But on this specific issue, you had a Secretary of State Rex Tillerson opposed. Gary Cohn, is chief economic advisor and co-Secretary Mattis, he was opposed this national security. They were all opposed saying, this is a Defense Secretary suffering as a result.

He was opposed, they were all opposed saying this is a bad idea. It is going to hurt the U.S. economically in a national security format, diplomatically. Don't do it. Especially, you're punishing America's closest allies. Forget about China or Russia; America's closest allies are the countries that export aluminum and steel to the United States.

SUMMERS: Absolutely, Wolf, but this is a pattern of what we've seen from this White House. It's not just on trade, it's very familiar what we see -- we have all the top intelligence chiefs, all the national security leaders, and administration saying, you know, Russia is meddling in the election and -- or they're encouraging and imploring the president to do something to give them more power.

You heard Admiral Rogers say just that, and the president still refuses to acknowledge this. Or two very different policy issue but it's normally the same thing. The president is the smartest guy in the room. He follows his -- goes with his gut. The FISA advice of those around him, who maybe have the subject matter...

[17:05:08] CILLIZZA: Which is the same point by the way of why it's not -- why H.R. McMaster might not want to stick around.

VINOGRAD: And to be clear, President Trump has to listen to international security teams. I remember President Obama not listening to the team on Syria, for example. President Obama, President Bush, they did listen. At this point, it's clear that the process is not maybe function. The president isn't listening and he's just going with his gut on...

BLITZER: Jeffrey, our Gloria Borger, out colleague wrote a column on CNN. Saying, something is very wrong right now over at the White House. I just want you to elaborate.

TOOBIN: Well, you know, the level of chaos this week does seem bigger and more extensive than it's been in the past. But it's worth remembering, there have been many weeks like this during the Trump administration. Remember infrastructure week? I mean, you know, these, these weeks where the news from Russia dominates. Where the president can't get out of his own way where he's tweeting his way into trouble.

There have been a lot of weeks like this, and that's why he is a significantly unpopular president at this moment. But he is far from dead, politically. You know, I think, you know, we can overstay how bad things are because he's still the leader of the Republican Party, the economy is doing pretty well, and you know, having learned if 2016 to write him off, I'm not doing it again.

BLITZER: Yes, a lot people have -- I agree with you. All right, guys. Everybody, stick around. There's more news, Vladimir Putin makes a new bid to influence U.S. public opinion, taking his claims of Russian military superiority directly into Americans' living rooms. And later, a self-proclaimed Russian seductress claims she can fill in what she calls the missing puzzle pieces about President Trump and the Russians, but there's a catch.

(COMMERCIAL BREAK)

BLITZER: We're following new signs of the deteriorating relationship between the United States and Russia. Once again, the Russian Leader, Vladimir Putin, appears to be taunting the Trump administration and the U.S. Military. Let's go straight to our own Brian Todd. So, Brian, what is Putin now saying?

BRIAN TODD, CNN CORRESPONDENT: Wolf, Putin says some of those spectacular new weapons systems he just unveiled are "battle ready". He's full of swagger over these weapons, even if some of them aren't close to being ready for deployment, and he's taking joy in tweaking an American audience in a network interview.

(BEGIN VIDEOTAPE)

TODD: Full of bravado, following his unveiling of dangerous new missile systems, Vladimir Putin delivered his threat straight to American living rooms. Putin said, the money American taxpayers have spent on missile defense "has been thrown into the wind because his new missiles are so good, they can evade those defenses." Speaking with NBC's Megyn Kelly, Putin was asked whether nuclear-powered intercontinental ballistic missiles he just boasted about have actually been tested successfully.

VLADIMIR PUTIN, PRESIDENT OF RUSSIA (through translator): All of those tests were successful. It's just each of those weapons systems is at a different stage of readiness. One of them is already on combat duty; it's with troops.

TODD: Do you believe him? Could any of these new missiles actually be on combat duty? Where would they be?

STEPHEN BANK, AMERICAN FOREIGN POLICY COUNCIL: Well, it's possible. And if they are on combat duty, most likely, I think they would be in the western military district opposite the Baltic States -- that's where they have now moved the esconder -- nuclear-capable missile into Kaliningrad.

TODD: If Putin's got some of his new missiles at Kaliningrad, they're right at the doorstep of America's NATO allies. Kaliningrad is a Russia enclave wedged between Poland and Lithuania where Putin has a massive naval base and tens of thousands of troops. But the Russian leader promised his American interviewer, he'd never use his new weapons unless provoked.

PUTIN: We have two reasons that would force us to respond using our nuclear weapons. The first is a nuclear attack against us, or an attack against the Russian federation using conventional weapons.

TODD: The new weapons Putin claims to be developing include a low- flying nuclear-powered cruise missile that he says has unlimited range and an unmanned underwater drone that could carry a nuclear warhead to an enemy city. In one of Russia's animations, the target is Florida.

BANK: The purpose of that was to terrify you -- that's exactly what he achieved. U.S. officials downplayed the Russian show of force calling it "cheesy". But at the same time, there are reports that the Trump administration is ramping up America's missile defense to counter Putin's threat. Analysts say, Putin has cleverly maneuvered this stand-off to box in President Trump.

KEITH DARDEN, PROFESSOR AT AMERICAN UNIVERSITY: If we don't respond in kind, in some way, to show that we're capable of responding and deterring an attack like that, we look weak. And I think that Putin has forced Trump into a position where he either looks soft on Russia, which might be because of election related activities, which he's already vulnerable on or he has to take a harder line.

(END VIDEOTAPE)

TODD: What it all points to tonight, is what many analysts see as a new arms race, which some are warning could be a new cold war between the U.S. and Russia. Putin, for his part, refuses to take the blame for that. He says, if there's an arms race, America started it by getting out of the anti-ballistic missile treaty 16 years ago. Wolf.

BLITZER: Brian, what are our U.S. officials and other experts are saying about America's defenses against these new Russian missiles?

[17:45:05] TODD: Wolf, experts say, the U.S. missile defenses have not been developed to counter each of those new Russian weapons, but these defenses don't necessarily have to. The most effective defense they say is America's conventional and nuclear deterrent. America's own capability to hit Russia hard, really, blow Russian cities out of the -- just off the surface of the earth, if Russia fires any of these new weapons at the U.S., and they say that Putin is well aware of that capability, that's what's going to stop him from attacking.

BLITZER: Brian Todd reporting for us, thank you. Coming up, a very bizarre claim by a woman who says she has what she describes as the missing puzzle pieces about President Trump and the Russians. But she can't talk now, because she's in jail in Thailand. Is there any truth behind her?

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[17:50:30] BLITZER: A Russian woman who describes herself as a seductress and has bragged about her connections with the Russian oligarchs says she can provide the missing links to a Russian-Trump connection to anyone who can help her get out of a prison in Thailand. Let's go live to our Senior International Correspondent, Matthew Chance. He's joining us from Moscow right now. Matthew, what is this all about?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Wolf, this is an extraordinary story, which offers us a very rare glimpse into the very secretive world of politics and business in Russia. It also happens to involve a young Russian woman who describes herself as a sex coach and who is now promising to reveal secrets of information that may be relevant, she says, to the Mueller inquiry. Take a listen.

(BEGIN VIDEOTAPE)

CHANCE: She promotes herself endlessly on social media as Nastya Rybka, a kind of self-styled Russian sex guru who supposedly teach you the arts of seduction for a fee, of course.

NASTYA RYBKA, RUSSIAN SELF-STYLED GURU (through translator): Even if we're interacting with men who are famous actors, lawmakers, oligarchs, scientists, very few of these men that may interact with the woman, discuss high-brow topics with them. If you want to seduce a man like that, he needs to be hooked by his basic sexual instinct. CHANCE: Amid snaps and titillating videos of her frolicking on yacht

on exotic beaches, she brags of liaisons with billionaires and one billionaire in particular. These are the images that have thrust Nastya Rybka into the kind of spotlight she didn't expect. It shows her relaxing on a boat with two men -- one of them is Oleg Deripaska -- one of Russia's richest men. The other, a senior Russian official, Deputy Prime Minister Sergey Prikhodko.

Russia's main opposition leader seized on the images as evidence of official corruption, also suggesting the two men can be heard discussing U.S.-Russia relations may have served as a link between the Kremlin and Trump campaign. Prikhodko has refused to comment on the allegation. Deripaska has dismissed it as a story far from any truth. In a statement to CNN, his spokesperson said he's suing Rybka and her business partner because they "maliciously made his private photos and personal information public".

It's not the first time the Russian oligarch, known to be close to the Kremlin has fended off allegations of collusion. CNN confronted him last year after it was revealed Trump's Former Campaign Manager, Paul Manafort, who once worked for Deripaska, offered him private briefings. Deripaska told CNN, he never received any communication about.

UNIDENTIFIED MALE: Did he owe you millions of dollars?

OLEG DERIPASKA, RUSSIAN BUSINESSMAN: It's news for idiots.

CHANCE: But it was after the promise of more detail, more information from Nastya Rybka, she was holding one of sex and seduction classes on this beach in Thailand that this extraordinary story appears to have taken a spy novel turn.

(CHANTING SEX ON THE BEACH)

CHANCE: She was arrested by Thai police for violating the terms of her tourist visa, managing to record this quick tantalizing message aimed at the America media, but she was driven away.

RYBKA: I'm ready to give you all the missing pieces of the puzzle, support them with videos and audio regarding the connections of our respective lawmakers with Trump, Manafort, and the rest. I know a lot. I'm waiting for your offers in a Thai prison.

CHANCE: They're possibly just the words of a desperate woman hoping to avoid deportation to Russia, but her promise with no evidence so far to unlock the mysteries of the Trump/Russia scandal. But certainly got Nastya Rybka, the attention she so often craved.

(END VIDEOTAPE)

CHANCE: As she awaits her fate in Thailand, CNN has managed to make contact with her and she tells us that she's got 18 hours of audio recordings that she says, quite interesting, could be thrust (ph) into the Mueller investigation. She also says she has a photograph of an unnamed American businessman who met with Deripaska, who asked her to delete the image but she didn't. So, nothing conclusive, but, you know, this is generating a lot of interest, the surprising amount of interest in Russia, and so we're going to be keeping a very close eye on this story as it develops.

BLITZER: So, what do you suspect, Matthew, could happen next?

[17:55:16] CHANCE: Well, I think we're waiting to see whether she will emerge into the public again and when that will happen. She's expected to be deported from Thailand at some point over the next few days, or possibly the next few weeks, it depends on the Thai authorities. If she is deported, she'll come back to Russia where she's got a passport here. And then, perhaps we might be able to get clarity about what exactly she has that she could offer in terms of clarity.

BLITZER: All right. Matthew, thank you very much. Matthew Chance, in Moscow for us.

[17:55:44] So, coming up, the White House Chief of Staff John Kelly has caught up in controversy, but says he won't be joining the growing number advisors leaving the White House even as he admits deficiencies there on the handling security clearances and classified materials.

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