Former 'Dreamer' slams Trump over immigration proposals

This is a rush transcript from "The Story," April 2, 2018. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, FOX NEWS CHANNEL HOST: Hello there, Bret. Thank you very much. Coming up tonight on 'The Story' our interview with Ron Kestler about his controversial new book on the Trump White House. But first, tonight, the president comes out of Easter weekend swinging.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The Democrats have really let them down, it's a shame. And now, people are taking advantage of DACA, and that's a shame.


MACCALLUM: Saying DACA is essentially dead in the water. So, does he mean it? We're going to talk to an Angel mom, who says she hopes that he does, and a DACA recipient who said he went back on his word. Also, tonight, the president continues to hammer away at Amazon. The stocks took a dive, but Trump's numbers continue go up. And what about the approval numbers for the GOP on the hill? As they indicate, they may be done with major legislation for the year. Remember this, the day after the election?


REP. PAUL RYAN, R-WISC., SPEAKER OF THE HOUSE OF REPRESENTATIVES: The opportunity is now here and the opportunity is to go big, to go bold, and to get things done for the people of this country.


MACCALLUM: So now word is that they are likely done in terms of work for the year on major legislation. Keep in mind today is April 2nd, the beginning of the fourth month of the year; it's hardly late in the game. So, what is going on? Chief National Correspondent, Ed Henry, live with that whole mess of news that's coming out of the Washington tonight with the big story for us. Hi, Ed.

ED HENRY, FOX NEWS CHANNEL CHIEF NATIONAL CORRESPONDENT: Good to see you, Martha. You're expecting them to actually work hard on Capitol Hill that is kind of a new concept sometimes. The good news for President Trump is that his approval ratings are climbing and when it comes to the generic ballot question of whether you're going to vote for a Democrat or Republican in the midterms, Republicans have now narrowed the gap to just five points in the latest Fox News poll. That's a big deal, because they had a double-digit deficit late last year, and now, it's narrowing. But the bad news for the president, as you just mentioned, is that both Roll Call and Axios -- two websites that trace Congress pretty closely -- are declaring that House and Senate Republican leaders were all but done for the year when it comes to major legislations, that they're mostly just going to do executive branch and judicial nominations until after the election. Despite the fact that, as you noted, Speaker Ryan and Senator Majority Leader Mitch McConnell had those high hopes after the 2016 election about immigration reform.

Now, it appears: maybe no DACA deal, no wall either, at least for now, no major infrastructure deal they talked about. They also promised a full repeal of ObamaCare over and over. They succeed, we should note, in eliminating the individual mandate from ObamaCare, as well as that major win on tax cuts late last year. But look at all the Republican loses, and that $1.3 trillion omnibus spending deal, the president said he was reluctantly signing last month. The White House requested a 24 percent cut in agriculture, wound up with a 10 percent increase; wanted a 15 percent cut, in labor health, and education spending got a 10 percent increase pending as you see Axios listing there. The president wanted a 23 percent cut in the State Department and Foreign Ops, got a nearly two percent hike. This may explain why the president stressed GOP unity back in October in the rose garden when he had that news conference with Mitch McConnell. Then, the president stressed obstructionism from Senator Chuck Schumer and other Democrats. Well, last month, when he called that 2,000-paged omnibus ridiculous, he was clearly pointing the finger at both Congressional Democrats and Republicans.


TRUMP: Just so you understand the Republican Party is very, very unified. When we get things approved, we have to go through hell because we have no Democrat support, we have nobody, we don't have a vote from the Democrats.

There are a lot of things that we shouldn't have had in this bill, but we were, in a sense, forced if we want to build our military, we were forced to have. There are some things that we should have in the bill. But I say to Congress, I will never sign another bill like this again.


HENRY: Now, that giant omnibus keeps funding the government and those inflated levels should be end of September, which is an important point. You heard the president say, I'll never sign it again. Another omnibus will be needed at the beginning of October to keep the government open -- that's right before the midterms. So, the president vowing to veto the next omnibus if it's giant and inflated like that again, presents him with the great political opportunity to maybe veto it and separate himself from both Congressional Democrat and Republicans. But how that plays out in the midterms is anyone's guess tonight, Martha.

MACCALLUM: That'll be interesting. Ed, thank you very much. Joining us now, Karl Rove, Former Deputy Chief of Staff to President George W. Bush and a Fox News Contributor. Karl, good evening to you. You know, you think back to that moment where people who voted for President Trump and for Republicans in the election, we're told, look, we finally have the opportunity that we have been asking for, for year. And promising that if you give us the House, the Senate, the White House, we are going to get so much reform done. And now, it kind of looks like they're kind of leaning back on tax reform and saying that's the big achievement that's going to get us through the midterms.


MACCALLUM: Absolutely!

ROVE: And it took 30 years to get it done. Now, I have a slightly different view: talking to leadership and talking to members, I think we're going to have a very active time in both the House and the Senate. The question: when are they going to be talking about the same thing? For example, in the house, there's probably going to be a vote on the balance budget amendment, there's going to be a vote on making the individual tax cuts permanent. They've got some infrastructure reforms that they're going to move forward on with the FAA and reforming how we do water resources -- such as dams and reclamation project. There's a whole bunch of stuff there doing on Dodd- Frank. The House and Senate have both got different bills, the House has a more robust bill that they're going to try to push through. They're going to likely move on a bunch of workforce training thing; how to get people out of poverty, how do you give people skills to get the jobs that exist today when they had skills for jobs that have gone away. A farm bill itself, and then the right to try. In fact, if you look at it, the House has been really active: they passed 451 pieces of legislation that are stuck over in the Senate. Now, the Senate has got a bigger problem.

MACCALLUM: Karl, I know what you're saying. And I think some of those would fall into the categories that I'm going to mention, but when you think about draining the swamp you look at that omnibus bill, and you hear that what's likely to happen, as Ed just laid out, we may get a C.R. on October and then probably an omnibus in December. The president said, that will never happen again. But you know, we've seen this movie before, and it happens over and over; there's nothing but increases in spending. And this president promised that we were going to see something different. I think some voters, come midterms, are going to look for those results.

ROVE: I agree with you. In fact -- but here's the weird thing that goes on: the Axios study that Ed Henry mentioned refers to what the president's budget laid down and then what was done in the omnibus bill. There's roughly 70, nearly $80 billion in additional defense spending, offset was 50 some odd, low 50s -- $52 billion in nondefense spending. You know what the biggest chunk of that was, Martha? $21 billion of additional Infrastructure spending. Now, here's the president talking about wanting to spending $200 billion on infrastructure in its own proposal, and the biggest chunk of that $52 billion was to be found of domestic spending in the omnibus bill, the additional spending on the domestic side was to be found in infrastructure. Another big increase, I think it's like the third increase, largest increase, was on Homeland Security. Now, it only included $1.6 billion for the wall, but the rest of it gave him some of the things that he's been talking in terms of personnel and technology and infrastructure. So, it is not always as clear when these things get battled around, because I think the president probably want a little bit more than he might've left the impression on domestic side.

MACCALLUM: Yes, it's just a question of whether or not those opportunity, whether or not that door is going shut rapidly come, you know, come during the midterms. And those opportunities might be closed down for another four years, potentially maybe even longer.

ROVE: Yes, particularly, he says, look, really quickly. The Senate is going to be taken up with three nominations. You think that they're going to be able to approve a Secretary of State, a CIA director, and Veterans Administration secretary quickly? No, Democrats are going to use that to make the administration blue.

MACCALLUM: Thank you, Karl. Great to see you tonight.

ROVE: You bet. Thank you, Martha.

MACCALLUM: Let's bring in Tammy Bruce, Washington Times columnist; and Jessica Tarlov, author of 'America in The Age of Trump', both are Fox News contributors. You know, I think a lot of Americans who supported the president give him a lot of credit, and Paul Ryan a lot of credit for what they saw with tax reform, and what is seen on a number of fronts. But when it comes to, you know, the voter, Tammy, who said, look, I think he's going to really shake things up, and if he can get the House and the Senate going to, then we're going to see some real draining of the swamp. It's very tough to move in that town. There's no doubt about it. But have you seen enough?

TAMMY BRUCE, FOX NEWS CONTRIBUTOR AND COLUMNIST FOR THE WASHINGTON TIMES: I think what we've seen is that President Trump is determined to keep his promises, and the American people are seeing that. It's been referenced, I think, before -- Rasmussen today. He's at 50 percent, higher than where Barack Obama was at the same equivalent part of his --


BRUCE: Just a minute, Jessica. Just a minute. I'll interrupt you when you're going to then.

TARLOV: I look forward to it.


BRUCE: Congress, of course, has a 15 percent approval rating. So, there's a difference there. And I think what you're looking at is the American people -- see what the tax cuts and everything else that they want action, they want demand, they want action in the government, they want things to happen. The world is at war. We see all of these other frameworks here at home. And at the same time, 40 -- as of last month, 43 percent of his nominees have not been confirmed for offices, including ambassadorships like Rick Grenell.

MACCALLUM: I think no matter what side of the political fence you're on, that is something that infuriates Americans. They can see what's going on, and to have Congress who doesn't -- as you pointed out, I think they're going to work 75 days for the rest of the year, right?

BRUCE: 75 days of work schedule.

MACCALLUM: It's insane.

BRUCE: And yet, they don't want to of course do anything now because they've vulnerable members, they want to take scary votes.

MACCALLUM: Yes, but that may not work. You know what I mean, they might be the scary votes that actually work.

BRUCE: Exactly.


TARLOV: Yes, I think it would make a difference, and you have to remember that there was actually a bill sponsored by former representative David Jolly to force Congress to work a 40-hour work week.

MACCALLUM: That's horrible.

TARLOV: It's so offensive. When you think that the average American is working upwards of 60 hours a week to just get by, to put food on the table for their families. That's what's going on there that is the swamp problem. I would not just interrupt you because I actually agree with your with that, I agree with your point about what President Trump is doing, and people can see he is trying, he's out there saying, calling out Republican and Democrats alike. That may not be enough save to his party come midterms. But I think that majority of this is actually just cyclical. This is what happens in the midterms --

MACCALLUM: No, it is what happens. But, you know, they have to hold 24 seats. If they don't hold 24 seats, they're going to end up with -- you know, they're going to end up in some sort of impeachment process.

BRUCE: The GOP itself -- the GOP classically always grabs defeat out of the jaws of victory. They'll -- they'll maybe do it again. Now, we know Don Jr. is going to be on the campaign trail. I would expect the president to be so. They're still going to be -- every day Americans, whenever they get their paycheck.

TARLOV: Retirement, and you look at how many seats just in Pennsylvania alone are now vulnerable.

BRICE: All right. My point is, is that every week, people see the benefits of the tax reform. Every day, they see the president on television arguing for his agenda, and they don't like what Congress is doing, but this is where each race is local. And they've got to embrace the president and the president's agenda, and we will be better off, I'm sure.

MACCALLUM: Jessica, I read today that the Democrat's plan in terms of the tax reform is to say: I know it feels good now, but it's not going to be offset by your rising health care costs. And if that's the plan, I would suggest they might need something more than that.

TARLOV: Well, it's better than crumbs. So, I think that that is a smart messaging strategy. I think health care is really a winning issue here. That's something that happens on both the Democrat and Republican side to focus on that what the repeal of the individual mandate will do. How we can improve upon Obamacare to make sure than each American have more affordable health care, I think, is the smart place to start. But to Tammy's point about them using the Trumps doesn't work, that didn't help anyone in Pennsylvania's 18th Congressional district. And when you look at how many seats are in California that Hillary Clinton took, I don't think that Don Jr. coming out there to say, you know, Maga and lock her up is going to win them seats there. It's 24 seats, which is not much when you think how many are vulnerable.

MACCALLUM: We will see. Thank you.

TARLOV: Thank you.

MACCALLUM: It's good work if you can get it.


MACCALLUM: All right. So, nearly five decades after the scandal that ended a young woman's life and Ted Kennedy's dream of winning the White House. A brand-new scandal appears to brewing, involving some 'powerful people' who didn't want that movie to be made. And President Trump saying that DACA is officially dead. He says DREAMERS can blame the Democrats. So, what happens now? When we come back, two true stories from people whose lives were changed forever is this bitter battle over immigration. A once illegal immigrant who says, the president lied; and a mother, who said that Trump has its way, her son could've still been alive.


TRUMP: I have a love for these people, and hopefully, will be able to help them and do it properly.



UNIDENTIFIED MALE: Mr. President, what about the DACA kids? Are you warned about what's going to happen to them?

TRUMP: The Democrats have really let them down, they've really let them down. They had this great opportunity. The Democrats have really let them down and it's a shame, and now people are taking advantage of DACA and that's a shame.


MACCALLUM: So, the White House is saying that DACA is dead for now, and that the Democrats are to blame. President Trump pulling no punches, saying President Obama's plan to shield so-called Dreamers had some chance for survivals but Democrats 'didn't care or act'. The president's hard line stance on immigration falling on deaf ears in California, where Democratic Governor Jerry Brown just pardoned five illegal immigrants who were all facing deportation and were accused of crimes -- robbery, theft, all kinds of pretty rough criminals in the bunch. That didn't sit well with the president who tweeted in part: 'Is this really what the great people of California what?' In moments, we'll hear from Mary Ann Mendoza, whose son was killed by an illegal immigrant.

But first, Julissa Arce, is a former Dreamer, she came to the United States from Mexico as a young girl, despite being undocumented, she climbed the ladder at Goldman Sachs using falsified documents and she is now a legal American citizen. Julissa, good to have you with us. You know, I guess, the biggest question is, you know, the president offered 1.8 million Dreamers to be able to stay here, a fix for even more than the number that we know exist in the country in return for some funding from the wall. And Democrats, they backed away from that deal, they won't take that deal. So, doesn't it make it kind of difficult to pin this on the president at this point?

JULISSA ARCE, FORMER DREAMER AND GOLDMAN SACHS EXECUTIVE: Yes. Well, you know, I think that it's important to sort of set a timeline here. The president rescinded DACA in September 5th of 2007. So, the reason why we're even in these discussions making a DACA deal is because the president himself ended the DACA program.

MACCALLUM: But that's a little bit disingenuous, I have to jump in. Because the truth of the matter is -- let's play President Obama on this in 2012 when the program came in to be.


BARACK OBAMA, 44TH PRESIDENT OF THE UNITED STATES: This is not amnesty, this is not immunity. This is not a path to citizenship. It's not a permanent fix. This is a temporary stop gap measure that lets us focus our resource wisely while giving a degree or relief and hope to talented, driven, patriotic young people.


MACCALLUM: It was always intended to be temporary, Julissa.

ARCE: Yes, it was only intended to be temporary. He is right that it wasn't -- that it was not amnesty, that it didn't give people a path to citizenship which was unfortunate. But fortunately, President Obama did act and then allowed 800,000 people to have a life in the United States.

MACCALLUM: Exactly, so now the president is offering 1.8 million people and also a path to citizenship, as part of that. And he's offering even more than what President Obama had in the original deal. So, why won't Democrats, who say they want this, that want to protect Dreamers and, you know, children as part of the DACA program, why won't Democrats get on board with that?

ARCE: Well, I think it's important to also highlight the fact that President Trump struck down deals that were presented to, bipartisan deals that were presented in January and February, and even earlier this month that where in toxic plans that he put forward.

MACCALLUM: So, you blame him but you don't blame Democrats for turning down the offer? Or are you equally angry with both sides?

ARCE: I am disappointed with Democrats for not holding the line when they could have. There could have been a deal made when they had leverage; we were trying to pass spending bills, and they didn't do that, which is unfortunate. However, they were put in a really difficult position, because, yes, we're giving 1.8 million undocumented DREAMERS a path to citizenship and we were giving money for the wall, however, we would also going to slash legal immigration by 50 percent under the president's plan.

MACCALLUM: I mean, we've slashed immigration many times in the country. You know, it's fascinating because I was just Bret Baier a little while ago, he was interview the ambassador from Mexico and he was talking about the hundreds of thousands of people that they do not allow to stay in their country that they repatriate to Honduras because they have to control their borders. He said, I want to work with the United States to make sure that we control our borders. So, why is it such an alien concept to you that, you know, people would want there to be protection for the border and that it's not OK to be here and over stay your visa or to come here illegally.

ARCE: Yes, I don't think -- it's definitely not foreign to me to want to have a secure board. And I've lived in the United States since I was 11- years-old, so I've dealt with immigration issues personally and professional. So, it's not something that's foreign to me, but I do think that sometimes we conflate issues. So, we're trying to conflate the issue of illegal immigration with how people are able to come to the country illegally. And if we slash legal immigration -- so we're slashing -- we're telling people, come here legally, do it the right way, but by the way, we're slashing by 50 percent to legally to come here the right way.

MACCALLUM: Yes, as a country you're allowed to regulate what that number is going to be. You don't have to have an open-ended number; you are allowed as a country to say, you know what, this year we're going to take this many and next year that many. I can't understand why you would have a problem with that?

ARCE: It is not that -- I don't have a problem with that.

MACCALLUM: It should be open-ended discussion.

ARCE: It should be an open-ended discussion that is correct. What you just said that it should be an ended discussion is exactly how it should work.

MACCALLUM: No, I'm saying is -- what I meant is it's not an open-ended question. You can't just assume that as many people who want to come in comes in. That's not the way it works.

ARCE: Absolutely. I don't think that that's the way it works that way, either. I can tell you from personal experience that, you know, it took me 20 years to be able to become an American citizen, and it's a very difficult process --

MACCALLUM: I understand that, yes.

ARCE: But we're also then blaming people and saying, you know, you should become legal. We often ask people, why don't you become legal, why were you undocumented for 15 years without understanding the fact that the line that we often talk about doesn't exist. And so, we're telling people, get legal, don't come here illegally, and at the same time --

MACCALLUM: 1.8 million people are offered a pathway to citizenship with the ability to stay here legally. So, but that was -- it was rejected. So, all right, thanks. I'm out of time, but thanks for being here, Julissa, good to see you.

ARCE: Thank you for having men.

MACCALLUM: So, my next guest has been deeply impacted by the issue of illegal immigration. Her son, Sergeant Brandon Mendoza, was on his way home from his shift as a police officer in Mesa, Arizona four years ago, when he was killed in a head-on collision by someone who turned out to be an illegal immigrant who was driving drunk. That's a beautiful picture of Mary Ann and her son. Joining me now, they're known as angel parents, so angel mom, Mary Ann Mendoza. Mary Ann, your thoughts on the fact that the president has now said, you know, I'm kind of done negotiating on this. I made an offer, it was not accepted. So, DACA is dead.

MARY ANN MENDOZA, MOTHER OF SERGEANT BRANDON MENDOZA: Our politicians don't have to negotiate or offer anything in exchange for doing their job which is protecting American citizens. The left and the media have given illegal aliens a voice in our country, in politics, and in our news that they have no being in and these people are illegal aliens who've entered our country illegally, and that's the end of the argument. The DACA program is not an easy yes or no fix, because it's wrote with fraud, there are people who are not contributing members of society who are DACA participants. They are on welfare, they are on food stamps, they are getting assistance in housing, they get free health care, and these are the types of things in this program that need to be looked at and weed out all of these people, and especially the ones who commit crimes for a DACA participants, because believe it or not, folks, it happens.

There are many, many people who are DACA participants who have committed crime. They're allowed to commit up to two misdemeanors within the DACA program; some of them commit felonies, they go before a judge, their defense attorney fights so that their felony is reduced to a misdemeanor, so they stay within the guidelines of the DACA program. So, our politicians need to be looking deep and hard if they're going to even be talking about this DACA program. As to how to reform it, not just to vote: yes, it stays or no it doesn't. That isn't what needs to happen.

MACCALLUM: And what about cutting legal immigration?

MENDOZA: Listen, our country is overburdened with illegal aliens who are in our country. And so, it makes sense to cut legal immigration at this time. We have to figure out how we're going to close our borders, protect our citizen, and keep the United States the great country that it was. Because -- look at California and what it's become. That is truly what's going to happening within the United States and every state. Because a lot of the governor and these mayors, and these elected officials want to create sanctuary cities for them, sanctuary state, they want to take taxpayer money and create legal, you know, funds for them to be able fight deportation.

It's insanity, what is happening. And our border patrol has a job to do and they were hired for a job, and they need to be able to do their job, protect us, secure our borders, and our congress and senators need to get off their desk and do the job that they were elected to do -- and that is to protect, and they doing far from it when all I hear out of their voices: how they are wanting to protect illegal aliens in our country who are committing crimes.

MACCALLUM: Mary Ann, thank you. Well put. As always, good to see you tonight, Mary Ann Mendoza.

MENDOZA: Thank you, Martha.

MACCALLUM: So, Kellyanne Conway, firing back against a claim made over the weekend that she's the number one leaker in the White House, which raises a lot of questions for the author who made the accusation -- Ronald Kestler, who will join me live.

And he's the Saudi prince who locked up his own cousin and corrupt politicians in a Ritz Carlton in Riyadh. He also, as of today, said that Israel should be an independent state. He is now headed to Hollywood to discuss things with the folks there.


TRUMP: We really have a great friendship a great relationship. I would really have to say, the relationship was, to put it mildly, very, very strained during in the Obama administration.



MACCALLUM: Developing tonight. Big changes are coming as John Bolton and Mike Pompeo prepare to move in to very powerful positions in the Trump administration. So could this, potentially, mean the end of the Iran deal, which both men had spoken out against? That is clearly the hope of Saudi Arabia's new 32-year-old crown prince. Who, after his recent White House visit, now seeks to woo the Hollywood crowd many of whom backed the deal under President Obama. This, as the Saudi crown prince makes headlines tonight, saying in a new interview that Israelis are entitled to live peacefully on their own land, and saying that Iran's supreme leader, quote, makes Hitler look good. Trace Gallagher, live in our west coast newsroom with a look at this rapidly changing dynamic in the Middle East, and the man who hopes to redraw the line of power in the Middle East. Trace?

TRACE GALLAGHER, FOX NEWS CORRESPONDENT: Martha, in the 9th months since crown prince, Mohammed bin Salman, or MBS as he's commonly referred to, is name heir to the Saudi throne. He has appointed himself minister of defense and first deputy prime minister. So, even though he's not yet king, the 32-year-old crown prince appears to be the kingdom's de facto leader, which has sparked concerns of a power grab inside the kingdom, and it also prompted questions about his regional ambitions. Bin Salman has taken a very hard line against Iran, and it remain unclear what if any restraints will be placed on him by the nomination of Mike Pompeo as secretary of state, and the selection of John Bolton as national security advisor.

The crown prince has already leading a military effort in Yemen against the Iran-backed Shia Houthi rebel. And during his current trip to the U.S., bin Salman reportedly secured a deal with Boeing to become the Saudi military sole provider of maintenance for the kingdom's war planes. Overall, the crown prince's two and a half week tour of the U.S. is less about buying and more about selling, specifically selling the U.S. of rebranded image of Saudi Arabia. The prince's P.R. campaign went from D.C. to Hollywood to Silicon Valley, with an exclusive pitch stop on 60 Minutes to expand of how the kingdom is loosening its adherence to fundamentalist Sunni laws and allowing women more freedom like driving and attending mixed-gender events like soccer.

Saudi Arabia has also lifted a 35-year-old ban on movie theaters and it's actively wooing Hollywood with the hope of generating a billion dollars a year in movie ticket sales. But entertainment is only part of the kingdoms effort to diversify away from oil. During his visit, the crown prince met with Bill Gates, Jeff Bezos, Michael Bloomberg, gathering advice and ideas on how to achieve his goal of becoming a global investment powerhouse. Though, human rights group say the glitter can't hide the gore, and that Saudi Arabia brutal crackdown on dissent and minority rights remains active and painfully real. Martha.

MACCALLUM: Trace, thank you. Here now, Ari Fleisher, former White House press secretary under President George W. Bush, he's now Fox News contributor, and Michael Waltz, a former Green Beret commander, and former counter terrorism advisor to Vice President Dick Cheney. Fascinating to see the shift that is happening here, because under the Obama administration there was a lot of dialogue happening with the Shia side of the Middle East with Iran, with -- you know, obviously, they're involve with Syria, and a little-bit of back turning against Saudi Arabia and the Sunni side of our typical alliances. You know, Colonel Waltz, let me start with you on this. Do you believe what you're seeing here? And do you think it's wise for us to have this strong alliance with Saudi Arabia.

MICHAEL WALTZ, FORMER GREEN BERET COMMANDER: Well, the fundamental question here is Mohammed bin Salman, is he genuine about expelling and mitigating extremism in the kingdom, and therefore across the Middle East. Or is this just a power grab. And I would argue both. He had to grab power in a very forceful way in order to break the last several decades of this deal with the old guard Saudis and the extremist in Saudi Arabia, where one, essentially, turned the back on the other. The administration has put their chips on Mohammed bin Salman at the advice of our allies in Jordan and the UAE. I think that is a huge gamble, but so far, the right when -- look, Martha, they've had three priorities coming in. One, annihilate ISIS. Two, move the Gulf States away from extremism. And three, roll back Iran who has made more gains in the last eight years under Obama than they had in the last thousand. And the first two are -- we're moving along and we'll see what happens with Iran over this next year.

MACCALLUM: We will see. Very strong statement, Ari, in terms of Israel's right to their own land. That is not a popular idea in Iran or Hezbollah, Hamas, that is not an idea that they would ever be OK with.

ARI FLEISCHER, FOX NEW CONTRIBUTOR: There's a remarkable shift underway in the Middle East. And, frankly, the president deserves credit, because the president has been one of the people leading this shift. What you saw is the previous administration was aligned with Iran and they had their allies with Qatar and Hezbollah and Syria. And this administration is working much more with moderate Sunni Arabs, Egypt, Bahrain, Saudi Arabia and, of course, Israel. Israel, amazingly, has been part of this shift. The Arab nation, including Saudi Arabia, has been working behind the scenes with Israel. And much case -- many cases is because of the animosity aimed at Iran, and protecting themselves with Iran. And Israel and Saudi Arabia have a common enemy there. But I think this is legit. I think it's real. I hope it's successful. You know, the Arab-Middle East, unlike the Asian-Muslim world, has been moving backwards. It's been moving in an extremist direction for decades. And if this is a real attempt by Saudi Arabia to marginalize the extremist and step in the 21st century, it's still a long way to go in a political reform that are necessary, but this is an encouraging development.

MACCALLUM: When you look back in the history of Saudi Arabia, they, in some ways, you know, their understanding is that they appease their own terrorist in some ways. They wanted to maintain power as royal family of Saudi Arabia. We all know that 11 of the hijackers in 9/11 came from Saudi Arabia. And they had this, sort of, delicate balance in their own country in order to stay in power and to keep things moving. This is a person who's putting himself out there in a way that they are going to be very unhappy with. Women driving, people going to the movie theaters, this is exactly what they've been trying to keep the lid on. How secure is this guy, I guess, is really the question, because he's got a lot of people who'd love to see him gone.

WALTZ: Well, you know, in fairness, the Saudi move toward, you know, Sunni extremisms was in response to the Iranian revolution, when the ayatollahs took charge. And we've seen, you know, essentially, the genie out of the bottle now with al-Qaeda, and ISIS, and all types of groups. But, you know, again, Ari is right, the Trump administration deserves credit here. Where was the president first trip overseas? To Saudi Arabia, to Riyadh, where he very rightly put his finger in the moderate Arab government's chest and said you have to solve this from within. The United States can only do so much, and we can only do so much across all of these battlefields from Afghanistan to Syria, and that we have to undermine the ideology. And then, his next trip was where? To Israel. And that has been the pillar of his Middle East strategy.

MACCALLUM: Remarkable changes. Gentlemen, thank you so much, great to see you both.

WALTZ: Thank you.

MACCALLUM: So coming up, we will take a look at a story that has gotten a lot of attention today. Kellyanne Conway firing back at the author of a bombshell new book, claims a lot of things, among them that she was the leaker in the White House. Will he stand by those claims tonight? Ron Kessler, exclusively here on 'The Story', next.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: We're going to find the leakers. We're going to find the leakers. They're going to pay a big price for leaking.




KELLYANNE CONWAY, COUNSELOR TO THE PRESIDENT: He knows that he had said publicly and privately his leakers and the liars are always had been. Very happy that there's a lot less leaking in the White House now. Leakers gets great press, and one day, Abby, I will have my say.


MACCALLUM: Kellyanne Conway denying accusation in a bombshell new book that she is the worst leaker in the White House. The book, The Trump White House, changing the rules of the game, is based on, according to Ron Kessler interviews that he did with the president and with his staff. Here now exclusively, Ron Kessler, the book's author, former Wall Street Journal and Washington Post reporter. Good to see you.


MACCALLUM: Thank you for being here and congratulations on your new book. So, what would you say is leaking really -- maybe, you know, how would you describe it? What do you mean the worst leaker?

RON KESSLER, THE TRUMP WHITE HOUSE AUTHOR: Well, when I interviewed her at the White House and it's recorded, she apparently forgot that she was on the record and she started lambasted other colleagues. She said these nasty, obviously, untrue things about Reince Priebus. So nasty and cutting that I don't include in the book.

MACCALLUM: But that strikes me as, you know, even if that was the case, and you say you have a recording. But you didn't put those details in the book because you say you didn't.


MACCALLUM: Think it was nice or right. But that sounds like gossipy stuff. To me it leaks, like, just to say someone who is the worst leaker in the White House, I'm thinking about national security issue, policy issues, those are the things that we've seen coming out of the White House. You're not suggesting that she's behind those, are you?

KESSLER: Not behind that.

MACCALLUM: So that would be the worst leaker, right?

KESSLER: Yeah. In addition, I've interviewed aides who say that they had seen text from her to reporters in which they are -- and she is leaking. Not national security, but.

MACCALLUM: Right. But when you agreed -- I know you're a long-time reporter, that the real problem would be somebody who is leaking things about a conversation with foreign leaders, those are the things that we've seen landing on the front pages of papers. So I would reserve, perhaps, the worst leaker or number one, for something that jeopardize national security, something of weight and substance, wouldn't you agreement? Because there are people who are doing that, do you know that?

KESSLER: Oh, yeah. But in terms of volume.

MACCALLUM: Who are they? Who's doing that?

KESSLER: We don't know that yet. But in terms of, you know, just volume, this is someone who constantly castigates her colleagues. And that is big problem in the White House.

MACCALLUM: Yeah, that is a matter of, you know, opinion, I guess. In terms of the -- when did you do the exclusive interview -- when did you do your sit down exclusive interview with President Trump for this book?

KESSLER: This was the night before New Year's Eve. We went to the New Year's Eve party at Mar-a-Lago as we've had been for -- doing for two decades and...

MACCALLUM: So, this past New Year's Eve?

KESSLER: Yeah. And I'll be for about 10:30 at night at Mar-a-Lago, he agreed to this interview and.

MACCALLUM: So, did you sit down alone, the two of you in a room?

KESSLER: We were in the living room at Mar-a-Lago. Melania had supported the idea that she pushed doing it right away or at least arrange it right away. My wife, Pam, a former Washington Post reporter was there.

MACCALLUM: So, just the four of you were in that room at that time?

KESSLER: There were others in the room. We were off in a corner, Trump, and also his body aide, as they call him, John McEntee was there.

MACCALLUM: So, you actually say -- you are going to book that Melania Trump sits in on cabinet meetings, is that true?

KESSLER: Yeah. I was just talking to Shulkin at another network and he said that they've had discussion, the three of them, in which she contributes her thoughts. Sometimes she disagrees with Trump. And just on a regular basis, on the record and on the book, I had people like Reince Priebus describing how she helps to shape the meetings and sums up what other people are saying, and then comes up with her own solutions.

MACCALLUM: Would you say more so, because I know you wrote a book on Laura Bush, you know, we all, you know, think of the first lady then, obviously, every wife has a lot of influence. It's a partnership that you share with your husband. When he's in this position there's no doubt you're going to share your -- would you say more so that Laura Bush? Or more so than Roselyn Carter who is definitely sitting in on cabinet meeting?

KESSLER: I don't know about that part. But definitely more than Laura, because Laura, of course, would give her opinion to her husband. But she didn't sit in on meetings, didn't discuss things with aides. This is quite different. Basically, Melania acts as another powerful aide.

MACCALLUM: And that came from Shulkin.

KESSLER: Well, no. It came from Reince Priebus, Sean Spicer, a few others on the record. And, by the way, this book is the book that Trump fans have been waiting for. There really has not been a book that looks at the positive side. But, at the same time, reveals negative items, just like the Kellyanne items, and also juicy tidbit and how he makes decisions. The behind the scenes of why he select or didn't select Romney, Giuliani, Sessions, Bolton, reason he didn't take him the first time was he was -- that he thought he was too hawkish.

MACCALLUM: And he didn't like the mustache.


KESSLER: Yeah. He's very big on appearances.

MACCALLUM: Thank you very much, Ron. Good luck. Good to see you tonight.

KESSLER: Thank you.

MACCALLUM: So this story coming up next, for decades we knew very little about what really happened that night in Chappaquiddick. But now a new movie that is opening this week sheds light on the tragedy. Up next, Howie Carr, on the very powerful people that he said tried to keep this movie from ever seeing the light of day, next.


MACCALLUM: In this breaking story just moment ago, in a new op-ed posted to the Washington Post website, Jill McCabe, who you see on the left, the wife of the fired FBI director, now lashing out at President Trump herself, defending the hundreds of thousands of dollars donations that she got, as you may remember, when she ran for office in Virginia, from Terry McCaul PAC. The op-ed read this in part, to have my reputation and integrity and those of my family attacked in this way is beyond horrible. I feel awful every day. It keeps me up nights. Now that I can speak on my own behalf, I want people to know that the whole story that everything is based on is just false and utterly absurd, she writes. We'll have more on that as we get it.


UNINDENTIFIED MALE: This country has a deep connection to the Kennedy name, and that is a valuable thing, gentlemen. We can't just let that go to waste. We need to remind the American people what this family has been through, and how more we are left to achieve.


MACCALLUM: That is a clip from the very good upcoming movie, Chappaquiddick, which hits theaters on Friday. The movie centers around the night that Ted Kennedy drove off a bridge leading to the death of 28-year-old Mary Jo Kopechne, who had worked on Bobby Kennedy's campaign. Tonight, there is new drama surrounding this movie after one of the producers suggested that powerful people have been trying to stop it from ever being released. My next guest has a hunch about who that could be. Howie Carr is a Boston Herald columnist and author of what really happened in the 2016 election. Howie, good evening, good to see you. Good to have you on the show tonight. So, when I interviewed one of the producers of the show, not the person that you've spoke with. And he suggested as well to me that there, you know, there was some push back, it's kind of difficult getting this made, but we really tried to be respectful to both sides. You think it was stronger than that.

HOWIE CARR, BOSTON HERALD COLUMNIST: Right. Byron Allen, the executive producer, he just bought the Weather Channel last week for $300 million. Very successful guy. He told Variety that, quote, unquote, very powerful people had tried to stop it. But I have to say, Martha, the most obvious suspect would be Christopher Dodd, he was a former senator from Connecticut, a good big, long-time drinking buddy and pal of Ted Kennedy. They were involved in many numerous escapades in D.C. And he later became the president of the Motion Picture Association of America, the MPAA, until last December. And I think he would be the one who would make the overture to Byron Allen to stop it. And Byron Allen refuses to say publicly. And I wrote a column about this from my newspaper, the Boston Herald, on Sunday. And I reached out to the MPAA and I say can we get a statement from Senator Dodd, one way or the other. Did he try to strong arm Byron Allen, the producer of Chappaquiddick, in to killing the movie? They did not respond to my inquiry. When you guys call me this afternoon, I called again. And I emailed again, still no response. So the -- Chris Dodd is remaining silent about whether or not he tried to kill this film.

MACCALLUM: It's a very interesting theory. It's well down and it comes out this week. Howie, thank you very much. Good to see you tonight.

CARR: Thank you, Martha.

MACCALLUM: Quick break, we'll be right back with more stories.


MACCALLUM: So we're now hours away from tonight's college basketball championship. Michigan takes on my favorite villain over Wildcats. Go Cats. And wow to the women of Notre Dame winning it last night, getting it done, amazing. We will see you back here tomorrow night at 7 PM. Tucker Carlson, coming up. He's a big Wildcats fan, too. See you tomorrow.

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