This is a rush transcript from "Special Report," January 3, 2018. This copy may not be in its final form and may be updated.
SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: I think curious, disgusted would probably certainly fit when you make such outrageous claims and completely false claims against the president, his administration, and his family.
I know that the book has a lot of things so far of what we've seen that are completely untrue. You have many people that have quotes that are sourced to them that are now coming out publicly and saying that those things are not true.
(END VIDEO CLIP)
BAIER: This was quite a day in Washington, talking there about President Trump and his former White House chief strategist Steve Bannon, close at one time. Today the president issuing this statement, "Steve Bannon has nothing to do with me or my presidency. When he was fired he not only lost his job, he lost his mind. Steve was a staffer who worked for me after I had already won the nomination by defeating 17 candidates. Now that he's on his own, Steve is learning that winning isn't as easy as I make it look. Steve had very little to do with our historic victory. Yet Steve had everything to do with the loss of a Senate seat in Alabama, held for more than 30 years by Republicans. Steve doesn't represent my base. He's only in it for himself. Steve pretends to be at war with the media which he calls the opposition party, yet he spent his time at the White House leaking false information to the media to make himself seem far more important than he was. It is the only thing he does well. Steve was rarely in a one on one meeting with me and only pretends to have had influence to fool a few people with no access and no clue whom he helped write phony books."
OK, that's all in response to this book that came out, is coming out, but excerpts from it came out today. Michael Wolff's book "Fire and Fury, Inside the Trump White House" in which Bannon among other things is quoted about the Mueller probe, this is all about money laundering. Mueller choose senior prosecutor Andrew Weissmann first and he is a money laundering guy. Their path to Trump goes right through Paul Manafort, Don Jr., and Jared Kushner, it's as plain as a hair on your face." There is a lot of other things in this book. We will talk about some of them.
Let's bring in our expanded panel, Jonathan Swan, national political reporter for "Axios," Byron York, chief political correspondent of "Washington Examiner," Amy Walter, national editor for "The Cook Political Report," and Guy Benson, political editor at Townhall.com.
OK, Jonathan, first of all, have we heard from Steve Bannon in response to this?
JONATHAN SWAN, NATIONAL POLITICAL REPORTER, "AXIOS": I have been texting with him all day but it's all off the record so I don't want to say anything about it.
BAIER: How about how Washington is digesting all of this?
SWAN: It was very clear straight away that Bannon had touched a third rail of Trump world with his comments. He said a lot of stuff about Kared Kushner in the past, but he went after Don Jr., a blood relative, the president's eldest son, insinuated that he was part of potentially a money laundering scheme, insinuating that he was stupid, would be, as he said, cracked like an egg on live television, all sorts of things, described him as treasonous. It's pretty extraordinary.
So immediately, it was very interesting because normally when Bannon does something foolish, his allies quickly create an echo chamber of no, everything is great, et cetera, et cetera. We heard none of that today. It was complete silence, and the reason was they didn't think it was brilliant strategic thinking from the former chief strategist.
BAIER: Here is Sarah Sanders's statement on the book overall. "The book is filled with false and misleading accounts from individuals who have no access or influence with the White House participating in a book that can only be described as trashy tabloid fiction exposes their sad, desperate attempts at relevancy."
Byron, the problem is that Wolff says that it came because he was granted access to the White House and did over 200 interviews with early days of Trump White House officials.
BYRON YORK, CHIEF POLITICAL CORRESPONDENT, WASHINGTON EXAMINER: This was in the wild west days of the Trump White House when there was all sorts of crazy access being gotten. And Bannon has said a lot of things in different interviews. He said a lot of stuff in a recent Vanity Fair interview.
I think one of the keywords in the president's statement was the word "staffer," which is the president's way of downplaying Steve Bannon's role. In every campaign or White House or even an office, there is some staffer who thinks he is the smartest guy in the room and who is the one who is truly responsible for the success of the candidate or the president even just the boss, and Bannon has now added to that rule, the role of disgruntled former employee.
And there are a lot of people after the Alabama disaster who are hoping that Steve Bannon has finally stepped in it big time, has gone too far, and will hurt himself. And we are seeing I think some of the effects even now at some of the races where some candidates like Kelli Ward in Arizona are now saying, they are not quite saying who is Steve Bannon, but they are distancing themselves from him.
BAIER: What was amazing was when the statement came out from the president, which President Obama was essentially a blowtorch, there was one tweet from the Senate majority's office, one tweet, and here it is. It was a .gif in which is shows Mitch McConnell just on a loop smiling. Didn't say one thing. Didn't have any text, doesn't have to say anything. Why is he smiling, Amy Walter?
AMY WALTER, NATIONAL EDITOR, "COOK POLITICAL REPORT": For exactly the reason that Byron brought up is all of these insurgent candidates that Bannon is supposedly responsible for, encouraging this movement now to get in and challenge the establishment, to disrupt the wing of the party built by people like the Senate majority leader, well, now that has become somewhat toxic.
And we have people who have been endorsed by him saying, well, you know, he's fine, everything, but I like getting endorsements from a lot of different people. In a war between Bannon and Trump, all those candidates are going to pick Trump's side. This is not like the divorce where they really feel like they have to be equal to both partners in this thing.
The real question though in my mind though is whether or not this will continue beyond a few news cycles, and when we get into these primaries, the issue of the antiestablishment versus establishment, Senate majority leader and his troubles with the base and the base itself has always been -- excuse me, started before Steve Bannon. It's always been about something bigger than Steve Bannon or Donald Trump. It's been about this frustration from the base with what they see as an establishment pushing an agenda that does not align with their own agenda.
So I don't know that that part goes away. Maybe Bannon isn't the person who's encouraging these people to run, but let's also remember it's not like Bannon was bankrolling these people. He didn't have money. He didn't have an organization. It is the other folks with the money and the organizations that I'm going to be watching.
SWAN: There is also sort of a delicious irony here because Bannon's people have been asking every candidate, are you going to support Mitch McConnell. Or now the reverse is going to happen, these candidates are being asked do you speak with Steve Bannon?
GUY BENSON, POLITICAL EDITOR, TOWNHALL.COM: That's what struck me today. The White House puts out this blistering statement that sounds very much like it was dictated by the man himself, just the verbiage of it. And you get this thing that comes out, and then over the course of a few hours, into in my inbox comes an "in case you missed it" email from the Republican National Committee and from the Senate Leadership Fund which is Mitch McConnell's group. So you've got the entire Republican Party at war with Steve Bannon, led by the president himself.
And I think the trouble for Bannon here is his entire persona is that of a kingmaker. That's how he fancied himself after the Trump victory. And he tried to crown Roy Moore, which was a total disaster for the party, losing an un-losable seat, and how he has tried to shiv the king, thinking that maybe people will be loyal to him. No, in this analogy they are loyal to the king, who is President Trump.
BAIER: Byron, let me ask about the substance of this. We talked about the charge from Bannon about that meeting in Trump Tower in 2016. Here's the quote. "Even if you thought that this was not treasonous or unpatriotic or bad, and I happen to think it is all of that, you should have called the FBI immediately. The chance that Don Jr. did not walk these Jumos up to his father's office on the 26th floor is zero. They are going to crack Don Jr. like an egg on national TV." Is that problematic, and does that somehow become part of the Mueller investigation or Congressional investigations on Capitol Hill?
YORK: He gets points for "Jumos." That was good. But I think this buys him a lot of trouble on Capitol Hill because we have heard today already lawmakers who are leading the Congressional investigations, there are basically three fairly big ones, two intelligence committees and House and Senate plus the Senate Judiciary Committee, and they are going to want to hear him say why he has characterized Don Trump Jr.'s behavior as treasonous. He wasn't in the campaign at that time the meeting took place, but he joined in August. Did he learn something during his time in the campaign from the inside that gave him an insight into what was going on with these Russians who had come in teasing explosive information about Hillary Clinton? This is going to earn Bannon a lot of trouble. He has said several times he doesn't have a lawyer, he has no interest in all this stuff. He has an interest in it now.
BAIER: Here is Newt Gingrich today from the White House.
(BEGIN VIDEO CLIP)
NEWT GINGRICH, R-FORMER SPEAKER OF THE HOUSE: Bannon has an exaggerated sense of self-importance in the news media of course builds it up because it is experience in the age of the Kardashians the kind of nonsense that they love to fill time and space with. It's noise. It has nothing to do with the things that matter to America and the things that matter to the American people have no relationship to the kind of noise that we are going to spend all day today with.
(END VIDEO CLIP)
SWAN: He makes a pretty good point. Again, I think we do need to pay attention to the people that are around the president because they are important in the information he receives, the council he receives, the way he makes decisions. And they have been a pretty interesting bunch of people.
BAIER: This is going to be, Amy, it's going to suck up a lot of oxygen, this book.
WALTER: Because we are on one excerpt. We have an entire book.
BAIER: -- of on the record staff characterizing the new president, characterizing how they get in, that they were surprised to win, et cetera, et cetera. Some of this we have reported anecdotally but some of it is pretty stunning.
WALTER: And then we are going to also have folks who are going to be asked on the record, did you say actually this, people who aren't Steve Bannon but other folks, who are either going to deny or maybe issue a non-denial denial. There will be a whole story about --
BAIER: Tom Barrack and others.
WALTER: That's right. And I think one of the RNC folks came out already and said that those weren't her quotes. She never said this. So there is going to be a lot of back and forth about that. But this is going to be, again, part of the oxygen sucking out. Remember when this was supposed to be these next couple weeks are about, is the government going to stay open? And the president's number one priority has to be selling this tax bill, their big accomplishment. They got done and the end of the year, they still need to go out and make the case and sell it.
BENSON: The last point for me. The excerpt you read from what Bannon said, that was not just taking shots at Jared Kushner and Paul Manafort and the president's son. He implicated the president in that quote, saying there is a zero percent chance that that Russia quote-unquote collusion meeting did not make it to Trump's office. To me that is the most oxygen that has provided to the Democratic narrative on the Russia story maybe ever, and it comes from Steve Bannon. That's like Maxine Waters level stuff with treason. It's coming from Steve Bannon, you catch your breath. Never a dull moment here.
BAIER: I will say that on a number of channels that lambasted Steve Bannon for weeks and weeks and weeks, he is now a respected figure. He might be able to on a couple channels.
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