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Interview With Sen. Chris Coons (D-DE); Trump Touts Beautiful Conclusion Of Mueller Report, Demands Rep. Adam Schiff (D-CA) Resign; Trump Calls For Funding Of The Special Olympics After His Education Secretary Spends Third Day Defending Cuts; Trump Blasts "Absolute Embarrassment" of Smollett Case; Sources: U.S. Legal Residents Held in Chinese Labor Camps; Shadowy Group Seeking to Oust Kim Jong-un. Aired 6-7p ET

Aired March 28, 2019 - 18:00   ET

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

[18:00:10]

WOLF BLITZER, CNN ANCHOR: Happening now, breaking news: Court order. As Democrats fight to see the entire Mueller report, they are asking the attorney general to remove a primary obstacle. Will a judge agree to release grand jury testimony?

Calls to resign. The House Intelligence Committee chairman under fire, as President Trump tries to turn the tables on his investigators. Democrat Adam Schiff and Republicans on Republicans his important committee, they are now in open warfare.

Trump's net worth. A report documents Mr. Trump's efforts to convince lenders and investors that he is richer than he really is. Was it stretching the truth or outright fraud?

And Smollett payback. The city of Chicago is sending the "Empire" actor a six-figure bill for the cost of his investigation. The president says the feds are reviewing the decision to drop the charges against Jussie Smollett. Mr. Trump is weighing in on the case again tonight.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

We're following breaking news on the fight by Democrats to see all of the Mueller report. CNN has learned that the House Judiciary Committee chairman has asked the attorney general to get a court order to release confidential information from the Mueller grand jury.

That would remove a primary obstacle to accessing the special counsel's full and extensive report. CNN has learned it's more than 300 pages' long. Tonight, President Trump says he hasn't seen the report yet, but he is touting what he calls its beautiful conclusion based on the attorney general's four-page summary.

At the same time, Mr. Trump is focusing his lingering rage over the Russia probe on one of the top Democrats still investigating him. The president demanding that House Intelligence Committee Chairman Adam Schiff resign, not just from the committee, but from Congress.

This hour, I will talk with Senate Judiciary Committee member Chris Coons. And our correspondents and analysts are also standing by.

First, let's go to our White House correspondent, Abby Phillip.

Abby, the president is heading to a rally in Michigan right now. We heard him just a little while ago before he left the White House.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf.

President Trump left the White House a few minutes ago, seeming to be in a combative mood. He's both celebrating the Mueller report that he says vindicates him, but he's also going on the attack.

(BEGIN VIDEOTAPE)

PHILLIP (voice-over): Tonight, ahead of his first campaign rally following the release of Attorney General Bill Barr's letter to Congress summarizing the Mueller report, President Trump previewing his message to his supporters.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, look, I have been going through that from almost two years, but it's really much more than that, because, if you look back, you could probably look at the insurance policy area in terms of timing. It's a disgrace what happened. This was a terrible thing that was put onto our country. Nobody has seen anything like this. Probably never happened before.

Beautiful conclusion. I haven't seen the report. Beautiful conclusion. And there was no collusion at all. There never was. Everybody knew it. I wish it could have gone in one week, instead of taking almost two years. But the result was great. No obstruction. No collusion. No anything.

PHILLIP: All this as President Trump joins nine members of the House Intelligence Committee demanding the committee chairman, Adam Schiff, resigned as chairman in the wake of the Barr letter.

TRUMP: Well, Schiff is a bad guy, because he knew he was lying. I mean, he's not a dummy. And he knew he was lying.

PHILLIP: Republicans accusing Schiff of pushing a narrative of collusion that they say has been disproven by Mueller.

REP. MIKE CONAWAY (R), TEXAS: The findings of the special counsel conclusively refute your past and present assertions, and have exposed you as having abused your position.

PHILLIP: Chairman Schiff firing back in a heated exchange.

REP. ADAM SCHIFF (D), CALIFORNIA: My colleagues may think it's OK that the Russians offered dirt on a Democratic candidate for president as part of what was described as the Russian government's effort to help the Trump campaign. You might think that's OK. But I don't think it's OK. I think it's immoral. I think it's

unethical. I think it's unpatriotic. And, yes, I think it's corrupt and evidence of collusion.

PHILLIP: Barr's letter quotes the Mueller report saying: "The investigation did not establish that members of the Trump campaign conspired or coordinated with the Russian government in its election interference activities."

All this after the president tweeted today: "Congressman Adam Schiff, who spent two years knowingly and unlawfully lying and leaking, should be forced to resign from Congress."

[18:05:02]

But in the face of all this, House Speaker Nancy Pelosi was unmoved.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I'm so proud of the work of Chairman Adam Schiff, in stark contrast to the irresponsible, almost criminal behavior of the previous chair of the committee.

So, what is the president afraid of? Is he afraid of the truth? I think they're just scaredy-cats. They just don't know what to do.

PHILLIP: Meantime, Attorney General Bill Barr has refused to give House Judiciary Committee Chairman Jerry Nadler assurances that he will release the full Mueller report, which sources say is more than 300 pages' long.

Pelosi had this to say about that:

PELOSI: How can I just say this more clearly? Show us the report.

PHILLIP: The dramatic escalation comes as President Trump and his allies seek to turn the tables on the investigators.

TRUMP: We can never allow this treasonous -- these treasonous acts to happen to another president. This was an attempted takeover of our government, of our country, an illegal takeover.

PHILLIP: After claiming he was completely and totally exonerated by Mueller, Trump is now accusing Schiff of unspecified crimes.

TRUMP: They knew it was a lie, and, therefore, in one way, you could say it's a crime, what he did, because he was making horrible statements that he knew were false. He should be forced out of office. He is a disgrace to our country.

(END VIDEOTAPE)

PHILLIP: While it's still not clear what exactly President Trump will actually do to address these what he's calling treasonous acts that prompted this investigation, it's worth noting that he's heading to Michigan this afternoon with two of his outside advisers, David Bossie and Corey Lewandowski, who have urged him to investigate the investigators -- Wolf. BLITZER: Abby Phillip at the White House, thank you.

Let's go to Capitol Hill right now, where Democrats are trying to remove a primary obstacle to getting full access to the Mueller report.

Our senior congressional correspondent, Manu Raju, has that breaking story for us.

Manu, what are you learning?

MANU RAJU, CNN SENIOR POLITICAL CORRESPONDENT: Yes, a Democratic staffer read knowledge of the call between the House judiciary chairman and Bill Barr that happened Wednesday night over what's happening with the Mueller report says that a primary obstacle to getting the Mueller report is the presence of grand jury information.

Now, this sort of said that Nadler and Barr discussed the prospect of obtaining a court order in order to get this information. Now, Barr, according to the source, did not commit, was open to the argument, but did not commit, not enough for Jerry Nadler.

Democrats are open to notion of going to court themselves and demanding this information. Now, also on that same call, Democrats did not come away with a clear understanding of how the administration plans to get around the executive privilege issue if the White House tries to move to block any information from going forward, although Barr said he had no plans to give the information to the White House first.

And also Barr did not give any indication of why Bob Mueller did not make a decision about whether or not to charge the president with obstruction of justice. That's a decision, of course, that he left up to the attorney general and the deputy attorney general.

And according to the source, that Barr did not answer the question when asked by Nadler -- Wolf.

BLITZER: Interesting.

Meanwhile, the House Intelligence Committee chairman, Adam Schiff, he's fighting back, fighting back very hard after President Trump and Republicans in Congress called on him to resign. What's the latest on that front?

RAJU: An explosive hearing today, Wolf, at the House Intelligence Committee, after Adam Schiff faced calls from Republicans to resign in the aftermath of him saying that he still believes there's collusion between the Trump campaign and the Russians, despite what Bob Mueller apparently found regarding that Mueller did not establish that members of the Trump campaign conspired or coordinated with the Russian government.

But Adam Schiff made clear he was not going to take the Republican punches lying down. (BEGIN VIDEO CLIP)

CONAWAY: Your willingness to continue to promote a demonstrably false narrative is alarming. The findings of the special counsel conclusively refute your past and present assertions and have exposed you as having abused your position to knowingly promote false information.

Having damaged the integrity of this committee and undermined the faith in the United States government and its institutions, we have no faith in your ability to discharge your duties in a manner consistent with your constitutional responsibility and urge your immediate resignation as chairman of the committee.

SCHIFF: My colleagues may think it's OK that the Russians offered dirt on a Democratic candidate for president as part of what was described as the Russian government's effort to help the Trump campaign. You might think that's OK.

But I don't think it's OK. I think it's immoral. I think it's unethical. I think it's unpatriotic. And, yes, I think it's corrupt and evidence of collusion.

And the day we do think that's OK is the day we will look back and say, that is the day America lost its way.

(CROSSTALK)

SCHIFF: I will not yield.

(CROSSTALK)

REP. MICHAEL TURNER (R), OHIO: We think you ought to allow us to speak of what we think.

SCHIFF: You can use your five minutes to speak. You attacked me in your opening statement.

[18:10:04]

TURNER: I have not had an opportunity respond at all, especially to your statements of what we think, because no one over here thinks that.

(END VIDEO CLIP)

RAJU: Wolf, also today, the Senate Intelligence Committee had an unexpected visitor, as Jared Kushner, the president's son-in-law and senior adviser, interviewed by senators on the committee after he was interviewed by staff of that same committee back in 2017.

So least that committee at the moment operating on a bipartisan basis, unlike what we saw today at the House Intelligence Committee -- Wolf.

BLITZER: Collegiality on the Senate Intelligence Committee, certainly not on the House Intelligence Committee, where it's all-out warfare right now.

Manu Raju, thank you very much.

Now to questions about the president's personal finances and business practices. "The Washington Post" reports that President Trump repeatedly inflated his net worth to lenders and investors, based on a review of some unusual documents spanning multiple years.

Investigators are studying those documents right now to determine if the exaggeration amounted to fraud.

CNN's Kara Scannell is here in THE SITUATION ROOM to tell us more about this report.

What are you learning?

KARA SCANNELL, CNN CORRESPONDENT: That's right, Wolf.

So, this all stems from Michael Cohen's testimony on Capitol Hill. When he was there, he had alleged that Donald Trump had inflated his net worth in some documents that he gave to banks. And at the time, Cohen had just one sheet of paper for each year.

Now we have got 20 pages that he has supplied. And through them, there's a lot of gray areas in accounting, but "The Washington Post" dug into this and found some pretty black and white areas. Specifically, in 2011, they identify that in this financial document, that Donald Trump said that the Trump Tower in New York City was 68 stories.

"The Washington Post" found it's actually 58 stories. The Trump National Golf Course in Los Angeles in this financial document it says that as of June 30, 2011, there were 55 homes for sale. In reality, according to "The Washington Post," there were only 31 homes for sale.

And in Trump's statement of financial condition from 2012, they reference a vineyard that Donald Trump owns. They said it was 2,000 acres in Charlottesville, Virginia. "The Washington Post" found, citing public records, that the vineyard is about 1,200 acres long.

And then the summary of Trump's net worth, in 2013, out of nowhere appears this item that he's got $4 billion in brand value. That has never been referenced in any of the prior documents that we have seen from 2011 and 2012. So it raises a lot of questions now, Wolf, about where Donald Trump was getting these numbers from and what information is contained in here, which Michael Cohen says has gone to banks.

BLITZER: Could these financial claims now be subject to some sort of new audit?

SCANNELL: Well, it's interesting.

It's something that the House Oversight Committee is interested in. They have asked the auditing firm to provide 10 years of documents about communications that they have had with Donald Trump and the Trump Organization. But in the report itself, the accounting firm raises the number of red

flags. They say that this has not been audited, that these numbers come from Donald Trump. It's not numbers that they have devised. They also say there were a number of departures from regular accounting rules, and because of the significance and pervasiveness of those of departures from accounting rules, they say that users of this financial statement should recognize that they might reach different conclusions about the financial condition of Donald J. Trump if they had access to a revised statement of financial condition.

So, essentially saying you might come up with a different valuation if you had underlying documents to support this, which the auditors don't. The auditor has declined to comment, citing their client confidentiality, and the Trump Organization has also declined to comment.

BLITZER: All right, we will continue to monitor this story as well.

Kara, thank you very much, Kara Scannell reporting.

Joining us now, Senator Chris Coons. He's a Democrat. He serves on both the Judiciary and the Foreign Relations Committees.

Senator, thanks so much for joining us.

As you know, the attorney general, Bill Barr, he briefed the chairman of your Senate Judiciary Committee, Senator Lindsey Graham, on the Mueller report, before he briefed the House Judiciary Committee chairman, Jerry Nadler. One is a Republican. The other one is a Democrat.

Do you believe that was appropriate?

SEN. CHRIS COONS (D), DELAWARE: Well, what I think is most appropriate, Wolf, is that we get access to the full Mueller report as soon as part.

Press accounts that suggests it's 300 pages reinforce my concern about the attorney general having provided us with just a four-page summary, having provided a preview, as you just suggested, to the Republican chairman of the Judiciary Committee in the Senate before briefing anyone else in Senate leadership.

And, frankly, my main concern about Attorney General Mueller (sic) when he was nominated was the unsolicited 18-page memo that he had submitted to senior White House officials, Department of Justice officials, making an argument against obstruction of justice, making an argument that Robert Mueller's likely theory of obstruction of justice was ungrounded, unfounded.

So I'm concerned about Attorney General Mueller's (sic) independence in terms of his view of the arguments made to him by Robert Mueller on obstruction.

I, frankly, though, Wolf, also think we in the Senate need to move forward and need to deal with some of the other issues on the table, like health care.

[18:15:00]

President Trump announcing this week that he's directing the Department of Justice, under Attorney General Barr's leadership, to change position and now actively try to sink what's left of the Affordable Care Act through legal action.

BLITZER: And we will get to that.

But, very quickly, is Congress entitled to see the grand jury material in the Mueller report?

COONS: You know, typically, that is not something that's released. It requires a court order for grand jury material to be released.

I think we should first see the entire body of the Mueller report, and then reach our own conclusions about whether there is strong enough evidence that we should then pursue a court order to release the grand jury materials further to the members of the Judiciary Committee and, through us, ultimately to the public.

BLITZER: The president says the report reached what he described as a beautiful conclusion. Those are the words of the president.

So why has the Senate majority leader, Mitch McConnell, blocked efforts to release the full report, allow a formal roll call on the floor of the Senate?

COONS: That's a great question.

I'm not sure what he's hiding, but it should concern all of us, particularly given that both President Trump himself and the chairman of the Judiciary Committee, Republican Lindsey Graham, both were saying last week that this report should be fully released.

I don't see any reason, other than his concern about what might ultimately be in the 300-page Mueller report, for why Majority Leader McConnell is blocking its release on the floor of the Senate.

BLITZER: At what point would you be willing to support a subpoena to get the entire report and , if necessary, the underlying documents?

COONS: I think, if we don't have this report, a clear pathway towards getting the full report by the end of the month, we should proceed with a subpoena.

Obviously, in the Republican-controlled Senate, we're not likely to see a subpoena. It would be coming from the House Democratic majority on the House Judiciary Committee.

BLITZER: What did you think of that exchange that the chairman of the House Intelligence Committee had -- we're talking about Adam Schiff -- with the Republican minority members of the committee, because it's getting -- it's getting wild, and the president tweeting this morning that Schiff should simply resign from Congress? COONS: You know, it's a pretty striking exchange, Wolf.

At the end of the day, I think what Chairman Schiff has done during the time where he was serving as the ranking member on House Intelligence was in the best interest of the country. Making sure that the Mueller investigation was able to begin and proceed, investigate and reach its conclusions without interference, without interruption, I think was in the best interest of the rule of law.

Now, let me be clear. I do think it is a good thing that Robert Mueller ultimately concluded our president did not explicitly conspire with a hostile foreign power to influence the outcome of the 2016 election.

But President Trump keeps saying he's fully exonerated, he's completely cleared. The Mueller report did not say that either. It did not reach a conclusion that exonerates him of obstruction.

And it's important to keep in mind that several senior figures in the Trump campaign and the Trump team have pled guilty or been convicted of significant crimes. If there was nothing going on, it's really striking how many of the most senior folks on the Trump campaign team were having meetings with Russians and then lying about their meetings with Russians.

I still think there is unfinished work to do here in terms of making sure we understand what happened, so that we can secure our 2020 elections, and making sure that, in the interest of transparency, the public gets the full Mueller report.

BLITZER: Well, let's see what's in the Mueller report on that issue.

On the issue of health care, which you obviously want to raise right now, the president says his administration will succeed in striking down Obamacare, the Affordable Care Act. He says he's created a group of your Republican Senate colleagues to come up with a replacement health care plan.

Now, what's your reaction to that?

COONS: They have had nine years to come up with a replacement plan.

One of the reasons that Senator John McCain ultimately voted against repealing the Affordable Care Act on the floor of the Senate was the absence of any credible replacement plan. Just -- forgive me for speaking for him. That was my conclusion from his comments on the floor just before that significant vote.

The absence of any credible plan means that what the president is threatening to do is to remove preexisting condition protections that currently prevent 120 million Americans who have preexisting conditions, ranging from asthma and Alzheimer's to diabetes and pregnancy, from being exposed to the way that health insurance worked before the Affordable Care Act.

The vast majority of Americans get their health insurance through their employer. The Affordable Care Act made big advances in giving people access to health insurance who don't get it through their employer.

But there's about 150 million Americans, Wolf, who get their insurance through their employer and were, before the Affordable Care Act, those of us who have preexisting conditions -- and that's a very sizable number of Americans -- were at risk of discovering, when we most needed our health insurance, it wasn't there to protect us.

[18:20:11]

This was a central issue in the 2018 elections. And I'm really struck that President Trump is putting his own party's reputation at risk. He should be working with us to reduce the cost of prescription drugs, to make health insurance more accessible and more affordable, rather than in court trying to throw more chaos into the health insurance markets by invalidating what's left of the Affordable Care Act, these critical protections.

BLITZER: Senator Coons, thanks so much for joining us.

COONS: Thank you, Wolf.

BLITZER: Just ahead: Chicago officials now want the actor Jussie Smollett to reimburse the city with $130,000, as President Trump calls the case an absolute embarrassment to the country.

(COMMERCIAL BREAK)

[18:25:25]

BLITZER: We're covering multiple breaking stories, including new efforts by the House Judiciary Committee chairman to get full access to the Mueller report.

We have learned that Congressman Jerry Nadler has asked the attorney general, William Barr, to get a court order that would allow the release of sensitive and confidential information from the Mueller grand jury.

Let's bring in our analysts and our experts to discuss

David Chalian, Jerry Nadler, the chairman of the House Judiciary Committee, he's obviously upset to learn that Bill Barr, the attorney general, actually briefed the chairman of the Senate Judiciary Committee, Lindsey Graham, a Republican, before he briefed him.

How contentious is this entire process getting?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Well, I think it's been pretty contentious, and I think it shows promise to continue to be so.

Here's what it seems to me. The Democrats are settling in on where they think their safe political space is post Donald Trump being cleared, according to Barr's description of the Mueller report on collusion, and by Barr and Rosenstein on obstruction in that letter. It seems that the Democrats are keenly aware, I think, as we all are,

overwhelmingly, Wolf, the public wants this report released, Democrats, Republicans, independents. Polls have shown that for months. So this is a very safe political space to be in.

And even though the president may have had a political victory over the weekend, this is where the Democrats think they have the strongest ground to stand and fight on.

BLITZER: Laura Jarrett, you're over at the Justice Department right now. Tell us what you're learning about the Mueller report.

LAURA JARRETT, CNN JUSTICE CORRESPONDENT: Well, Wolf, we now know that it runs over 300 pages, which up until a couple days ago, even that one deal tale was shrouded in secrecy.

I have to tell you, just getting that page length, that page count was like pulling teeth out of the Justice Department. An official confirmed it today. A second source confirmed to my colleague Jeremy Herb that the report is somewhere between 300 and 400 pages if you don't include exhibits.

So it's clearly lengthy. And as you already mentioned, Barr has signal to Nadler the sticking point here is the grand jury material. We know a small team is scrubbing it. But the real issue, I wonder, is whether Nadler is going to be willing to push this.

If it drags on, will he subpoena for it. Will he try to get Mueller up to Capitol Hill? They have been sort of going through an incremental approach right now. But you just have to think at some point they're going to have to really call the question on this.

BLITZER: Some publishers already thinking about getting that 300-page report and publishing it maybe in paperback down the road.

David Swerdlick, the president says the House Intelligence Committee chairman, Adam Schiff, and the president has really gone after him in big ways over these past several months, should be forced, in the president's words, to resign from Congress.

Republicans on the committee, they're also really angry at him. Watch the House minority leader, Kevin McCarthy.

(BEGIN VIDEO CLIP)

REP. KEVIN MCCARTHY (R-CA), HOUSE MINORITY LEADER: Does America truly believe or does Adam Schiff truly believe he knows something more than Mueller, that 40 FBI agents, 19 attorneys, 2,800 subpoenas, 500 witnesses, looking into 13 different countries and saying no collusion at all?

He needs to resign from the committee.

(END VIDEO CLIP)

BLITZER: So the chairman, Adam Schiff, he's responding big time.

DAVID SWERDLICK, CNN COMMENTATOR: Right. And I think Chairman Schiff has good grounds to respond big time.

There, you saw Majority Leader McCarthy asking kind of the wrong question. Chairman Schiff has said before and said today in committee that lowercase-C collusion is still his position, even if the Mueller report and the Barr summary don't find a criminal conspiracy.

He listed off the Trump Tower Moscow dates from Michael Cohen's testimony, the Trump Tower meeting in summer of 2016, Paul Manafort. He talked about some of the other things that have been reported out, whether or not we actually have this report, and sort of re-upped his position.

Even in today's partisan environment, it's pretty stark the way Republicans came after him today. And I think he concluded that the only way to respond was to fight fire with fire.

BLITZER: By the way, the president has now just arrived in Grand Rapids, Michigan. He's getting ready to go to a rally, a big rally there.

We will be hearing from him at that rally. We will see what he has to say. I don't think anybody should be surprised he's on the offensive right now, going after the Democrats, going after the entire Mueller investigation. We will watch that closely.

Jackie Alemany, our new CNN poll asked this question. What should Congress do with the Mueller report findings? Fifty-seven percent said hold hearings; 43 percent said end the investigation.

Looks like there's some majority support for Adam Schiff to continue to hold hearings and continue the investigation.

[18:30:04]

JACKIE ALEMANY, ANCHOR, THE WASHINGTON POST POWER UP: That's exactly right. And what we've seen come out of these public hearings has actually been really fruitful for these investigations. And we've seen, in partial, apolitical investigators move forward, whether that's launching investigations into bank fraud in New York or insurance fraud on the Hill.

And I think that the more and more these tidbits that are rolling out about the way that Attorney General Barr has handled the proceedings since Mueller filed this report and doing things, like briefing Senator Graham before he briefed Chairman Jerry Nadler, that politicizes this even further and undercuts the purpose of why Special Counsel was created to begin with. And so I think the more that happens, the more the public is going to be clamoring for a public hearing to hear things for themselves, to hear Mueller and Barr testify themselves and talk about their findings.

BLITZER: And we're going to have a lot more to discuss on this. We're going to take a quick break. When we come back, you are about to hear the President of the United States reversing what his Education Secretary Betsy DeVos had to say about federal funding for the Special Olympics.

(COMMERCIAL BREAK)

[18:35:00]

[18:36:50] BLITZER: We're back with our analysts. As the President heads to a rally in Michigan, Grand Rapids right now, David Chalian, a real embarrassment for the Trump administration, the Education Secretary, Betsy DeVos, has now spent three days defending her decision, her department's decision to cut federal funding for the Special Olympics. The President heard about it and this is what he said as he was leaving the White House just a little while ago.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: The Special Olympics will be funded. I just told my people, I want to fund the Special Olympics. And I just authorized a funding of the Special Olympics. I have been to the Special Olympics. I think it's incredible. And I just authorized a funding. I heard about it this morning. I have overridden my people refunding the Special Olympics.

(END VIDEO CLIP)

BLITZER: What an unforced error on the part of the Education Secretary.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Well, no doubt about that. She was defending the indefensible. But it's the President's budget. This is not -- there shouldn't have been a secret plan to him. And so he acts almost as if he has no responsibility for what DeVos was trying to defend. And I think she also wanted to try and push back on her boss a little bit with her statement, which bizarrely stated, the President and I, I'm so glad, are completely on the same page. They weren't on the same page. He was defending something that he just completely overturned.

But then she went on to say that she's been fighting for Special Olympics, funding behind the scenes for the last several years as if I think to suggest that the President had been on the other side of this debate.

BLITZER: In the scheme of things, given the enormity of the federal budget, it was $18 million that was going to the Special Olympics by the federal government.

DAVID SWERDLICK, ASSISTANT EDITOR, THE WASHINGTON POST: Right. Republicans have signaled that they're going to make budget cuts. But why you would go so early to cutting something that has such bipartisan support. There's not that many things left in America that everybody agrees on. But Ii think, by far, people think that the Special Olympics is a worthy cause that this was quickly put on chopping block, even if it was overturned, was, as you said, Wolf, an unforced error.

ALEMANY: I'm sorry. I just have to say, I mean, the President responding to intense public blow back does not undo the fact that there's been three years of cuts and skepticism from the Trump administration towards policies that help people with disabilities from the Special Olympics obviously catches everyone's attention because it's a fabulous program that a lot of people participate in.

But there are other programs, like social security disability insurance, there are smaller programs within the Department of Education that help kids with autism, they have proposed cuts to these consistently over the past three years. And I know we cannot always say that this budget will never get enacted, that people on the Hill won't allow this to go through, but a budget is a reflection of your values.

And it's clear that the Trump administration is skeptical of people with disabilities. Mick Mulvaney has said that himself. Last year, he was briefing reporters at the White House about why he was making cuts to social security disability insurance. And said that it was because he didn't believe that the amount of people who receiving it were actually eligible for it.

BLITZER: And the President has promised during the campaign, he always promised, David Chalian, that there will be no cuts to social security, no cuts to Medicare, no cuts to Medicaid, not exactly happening.

CHALIAN: Well, not exactly how the administration is putting together its budget proposal. There's no doubt about that. He actually did that in a way to try to break out of what had been a republican problem politically. And he really tried to differentiate himself in some way. But he is not fully backing it up with what he puts forward, as you said, in a statement of values and morals [ph].

BLITZER: Let me get Laura to update on something going on at the Justice Department. I understand the President's choice for the number three job over at the Justice Department is now withdrawing her name from consideration. What are you learning?

LAURA JARRETT, CNN JUSTICE REPORTER: That's right, Wolf. It's sort of an interesting story here about Jessie Liu, who's the U.S. attorney, a well respected lawyer, a U.S. attorney in D.C., I should say, and she was set to be nominated to be the number three here over at the Justice Department, the Associate Attorney General, Barr. Her nomination was thrown, but of a wrench into it, given opposition from Senator Mike Lee among others.

[18:39:58]

And we're learning that one of the issues that came up was her previous affiliation with a woman's organization that had penned a letter in opposition to the nomination of Justice Alito to the Supreme Court. Now, to be clear, Jessie Liu was on the board of that organization. She was the V.P. But she didn't sign on the actual letter. In fact, she had actually supported Justice Alito's nomination. Nonetheless, senators, conservatives found this issue problematic and also considering that this group had also signed on to legal briefs supporting a woman's right to choose.

And so now, she is forced to withdraw the nomination saying that it would be a distraction. An official telling me that she's doing this. Bill Barr, the Attorney General, has been supportive of her and her nomination and is keeping her on, obviously, as a D.C. U.S. attorney. And she's going to keep her on as a committee and advisory role. But it just shows sort of the unforced errors that have come apart in this administration. Someone who was clearly well qualified couldn't get through, Wolf.

BLITZER: Interesting development indeed. Everybody stick around, there's more news we're following, including the charges against Jussie Smollett have been dropped. But Chicago officials are refusing to let him get off without paying a significant price. Will the actor now agree to write the city a $130,000 check?

(COMMERCIAL BREAK)

[18:45:56] WOLF BLITZER, CNN HOST: Breaking news on the Jussie Smollett case. President Trump is taking another swipe at the "Empire" actor tonight, calling the decision to drop the charges against him an absolute embarrassment. This as we're learning that officials in Chicago want Smollett to reimburse the city for $130,000.

Our national correspondent Sara Sidner is joining us from Chicago right now.

Sara, what else are you learning?

SARA SIDNER, CNN NATIONAL CORRESPONDENT: Look, this has been an extraordinary response by the Democratic mayor of Chicago and the president of the United States to what has been an extraordinary turn of events in the Jussie Smollett case.

(BEGIN VIDEOTAPE)

SIDNER (voice-over): Tonight, Chicago Mayor Rahm Emanuel is demanding Jussie Smollett pay up. The city demanding more than $130,000 to help pay for the Smollett investigation.

MAYOR RAHM EMANUEL (D), CHICAGO: Given that he doesn't feel any sense of contrition and remorse, my recommendation is when he writes a check in the memo section, he can put the word, I'm accountable for the hoax.

SIDNER: All 16 charges have been dropped against Smollett, who arrived back in L.A. He has maintained his innocence saying he was the victim of a homophobic and racially motivated attack in Chicago in January. His attorney responding to the mayor saying, it is the mayor and the police chief who owe Jussie, owe him an apology for dragging the innocent man's character through the mud. Jussie has paid enough.

As questions mount over the decision to dismiss the charges against Smollett, media outlets went to court today to request sealed documents in the case not be destroyed in the case is expunged. The presiding judge responding, the county does not physically destroy case documents.

And then this twist.

NATALIE SPEARS, MEDIA ATTORNEY: Based on what defense counsel represented to us outside of court that Mr. Smollett will not be filing a petition for expungement.

SIDNER: Smollett's attorneys confirm they are not going to file to expunge his case -- a case that has gotten the attention of President Trump.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think that case is an absolute embarrassment to our country. Somebody has to at least take a very good, hard look at it.

SIDNER: This morning, the president suddenly announced a federal review of Smollett's case via twitter saying, FBI and DOJ to review the outrageous Jussie Smollett case in Chicago. It's an embarrassment to our nation.

So far, the FBI nor Department of Justice has said whether they will look into the case. Smollett's attorney is maintaining the case was handled properly.

TINA GLANDIAN, SMOLLETT ATTORNEY: We have nothing to be concerned about because there was nothing on our end to request this, to do anything improper. To my knowledge, nothing improper was done.

SIDNER: State Attorney Kim Foxx, who is also facing scrutiny for her decision to recuse herself from the case, has defended her office's decision. But said the sealing of the entire case was a mistake she was trying to rectify.

KIM FOXX, COOK COUNTY STATE'S ATTORNEY: We did not advocate, do not believe that the court file should be sealed. We believe in transparency, even on difficult situations. We will answer the questions. We did not ask for that file to be sealed.

UNIDENTIFIED FEMALE: So, let's unseal it.

FOXX: I believe that is in the process now.

SIDNER: But tonight, CNN has learned Foxx's office will not be able to unseal the charges. Her office spokesman telling CNN: In accordance with state law, all information contained in Smollett's criminal case court file, including police records, has been sealed by order of the circuit court. The Cook County state's attorney's office has no authority to unseal court records.

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SIDNER: By the way, if Smollett's camp asks for his case to be expunged, it would mean that the court record would have to be unsealed. So, By not asking for an expungement, it means that court record remains closed and out of the public view -- Wolf.

BLITZER: With the latest, Sara Sidner in Chicago, thank you very much.

Just ahead, we're getting new details about a mysterious raid at a North Korean embassy as Kim Jong-un's enemies claim responsibility.

(COMMERCIAL BREAK)

[18:54:37] BLITZER: More breaking news now on the fate of some U.S. residents in China.

Let's go to our senior diplomatic correspondent, Michelle Kosinski. She's over at the State Department.

What are you learning, Michelle?

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Hi, Wolf.

Official sources are telling us that they believe multiple Americans are being held in these large scale Chinese detainment camps. I asked, are there many? And they said, no, a few. When I pressed, are these American citizens, they didn't want to give too many details because at this time, there are privacy concerns.

[18:55:07] They said at the very least they have legal status in the United States.

So, the U.S. believes that China has been operating in secret, now not so secret, these large scale camps and they've been cracking down on ethnic minorities, especially in the last year. The U.S. believe this is a could be holding up to 2 million people in these camps, mostly Uyghur Muslims but others as well.

In fact, today, the State Department's ambassador for international religious freedom, Sam Brownback, detailed one as of yet unconfirmed case that he just heard of, of a man who has legal status in the U.S. He's 75 years old. He has a son in California.

He recently went over to China in this province where they have these camps and he has not been heard from since. So, it's hard to confirm these cases because Brownback says he's raised these questions to the Chinese and they have admitted to the existence of camps, but they insist they are vocational training facilities -- Wolf.

BLITZER: Sounds pretty awful to me.

All right. Michelle Kosinski at the State Department, thank you.

Also tonight, a new claim of responsibility for a brazen raid on an important diplomatic outpost for Kim Jong-un. A shadowy group seeking to topple the North Korean dictator says it's behind the embassy break-in.

Brian Todd has been looking into this for us.

Brian, this raid has been shrouded in secrecy, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we have new information tonight on the tactics this group used to get in the embassy and some crucial intelligence that they may have stolen in the raid. Now, this group, Cheollima Civil Defense, acknowledges that they carried out this operation but they dispute the accounts of Spanish authorities who say they got violent.

(BEGN VIDEOTAPE)

TODD (voice-over): A mysterious group of Kim Jong-un's enemies is tonight claiming responsibility for a daring bold daylight raid at one of Kim's most important embassies. The Trump calling itself Cheollima Civil Defense says it carried out the information last month at North Korea's embassy in Madrid. Spanish authorities say 10 people gained entry to the embassy by posing as businessman, tied up the staff and beat them.

ROBERT BAER, FORMER CIA OFFICER: You don't tie people up and don't beat them up and make a public statement after. So, this is a completely unprofessional break-in.

TODD: When Spanish police arrived, the assailants pretended to be North Korean officials and told police nothing was going on. But Spanish officials say the group later got away in embassy vehicles with a stash of thumb drives, hard drives, computers and phones.

ADRIAN HONG CHANG, HUMAN RIGHTS ACTIVIST: It is a brutal totalitarian regime.

TODD: Spanish authorities say the ring leader was this man, human rights activist, Adrian Hong Chang, a Mexican living in the U.S. who they say caught a flight to the U.S. shortly after the raid.

Cheollima Civil Defense disputes Spanish officials' accounts of the operation, saying they never beat or tied anyone up and the group says it didn't work with any government.

Cheollima did post a video possibly from the raid, showing someone's smashing the revered pictures of Kim ong-un's father and grandfather, with the words, for our people, we rise up.

TARA O, PACIFIC FORUM: Their stated goal is to overthrow the regime and bring in human rights and other freedom to North Korea.

TODD: A former top North Korean embassy official in London who defected says the raid could have netted decryption computers that the regime uses to communicate with its embassies around the world.

Veteran spies say given the operations North Korea runs out of its embassies, those decryption computers could be a treasure trove for Western intelligence agencies.

BAER: They're running drugs, all sorts of black market stuff. They're running agents in the Korean community, and, you know, getting the names of those agents and getting what they're doing from the exiles would be a counterintelligence breakthrough.

TODD: Tonight, Cheollima Civil Defense says it's suspending operations because its members have been exposed. Analysts believe their lives are in danger.

TARA O: Kim regime can retaliate in various ways. They could try to kidnap them. They could try to assassinate, kill them. They can also try to ruin their reputation by doing some sort of smear campaign.

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TODD: Both Spanish authorities and the Cheollima Civil Defense group itself say the group shared information on the raid with the FBI, and Cheollima says it did that at the FBI's request. The FBI is not commenting on the case. We reached out to U.S. intelligence and got no comment from them.

A State Department spokesman said no state department agency had any part what so ever in this raid -- Wolf.

BLITZER: It sounds like there's a lot more information, Brian, that we're working on to get this rather mysterious development.

Brian Todd reporting for us, thank you very much.

And to our viewers, thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. You can always follow me on Twitter and Instagram @WolfBlitzer. You can always tweet the show @CNNsitroom.

Once again, thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.