Michael Caputo on his House Intel testimony, Russia hysteria

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This is a rush transcript from "The Story," July 17, 2017. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, HOST: Tonight, you are looking live at the White House this evening, where the president is meeting, right this minute, over dinner, with some senators and a bit of arm-twisting, no doubt. He has been criticized for not getting more involved in the vote wrangling over health care, so we will see if he is successful tonight. All this while a new poll says that Americans look at the meeting with Russians and Donald Trump Jr., and they see a mistake but no real collusion yet and the President, no surprise, agreed with that.

Here's a tweet from him today: "Most politicians would have gone into a meeting like the one Don Jr. attended in order to get info on an opponent. That's politics!" He says. Michael Caputo just testified before the House Intel Committee as a former Top Trump Campaign Aide and someone with longstanding ties to Russia. They wanted to speak with him, and so do we, so he is here in just a moment. But first, Chief National Correspondent, Ed Henry, live at the White House with more on this beautiful summer evening. Hello, Ed!

ED HENRY, CHANNEL CHIEF NATIONAL CORRESPONDENT: Good to see you, Martha. It's been a brutal week or so for President Trump after that revelation about his son, Donald Trump Jr., attending a meeting with a Russian lawyer who was offering up dirt on Hillary Clinton. But a glimmer of hope for the President tonight, in that poll you mentioned from the Washington Post/ABC News. It found on the question of collusion, a majority of Americans do not believe the Trump campaign worked with actual Russian government officials to defeat Clinton.

Here's the key: only 40 percent believe the Trump campaign helped the Russians in that effort to impact the election. Roughly the same percentage that believed there was some sort of collusion back in April in the same poll. Significant, because, think about all the screaming headlines; a whole pile of them in the last three months over everything from that Donald Trump Jr. meeting to the firing of James Comey. And yet, the numbers haven't moved at all.

There's been virtually no change in the public perception of whether or not there was collusion. But The Washington Post/ABC News poll has other signs of real trouble for the President. Only 26 percent believed the meeting with the Russian lawyer was appropriate, 63 percent declared it was actually inappropriate. And the White House may not have been helped by Jay Sekulow, one of the President's outside lawyers appearing on five Sunday talk shows yesterday, and offering a new defense of the Trump Tower meeting that simply didn't hold up.


JAY SEKULOW, ATTORNEY TO PRESIDENT TRUMP: Well, I wondered why the Secret Service -- if this was nefarious, why the Secret Service allowed these people in? The President had had Secret Service protection at that point. That raised a question with me.


HENRY: Except a Spokesman for the Secret Service quickly told us that, in fact, in June of 2016, Donald Trump Jr., did not have Secret Service protection back then. So, they had nothing to do with screening that meeting, yet another sort of example where the story hasn't held up and that's why Democrats like Mark Warner tonight are suggesting the White House has a credibility problem. Martha.

MACCALLUM: Very interesting. Ed, thank you so much.

HENRY: Thank you.

MACCALLUM: So, Michael Caputo, one of President Trump's former Senior Advisors to his campaign has found himself front and center in the Russia story. On Friday, he testified before a closed session of the House Intel Committee. Michael Caputo joins us now. Good to have you with us, sir, welcome, good evening to you.


MACCALLUM: Absolutely. So, how would you characterize your interrogation by the House Intel Committee on Friday?

CAPUTO: Well, I'd say thorough. I also think it sounded a lot like a fishing expedition, but I also think it feels a little bit fair. I mean, to me, I expected to go in there and be treated very poorly by the Democrats; I watched the same public hearing everybody else did, and that public hearing, Representative Jackie Spear called out my wife for some reason, which is supposed to be off limits. And, you know, everything since then has been really negative, but you know, I expected to have Representative Schiff, for example, be rude or whatever, but you know, he was a gentleman, they treated me, you know, very strongly, and they were very direct in their questioning. What I felt, ultimately, it's fair.

MACCALLUM: Do you think they believed you when you said, you know, you never heard any discussion about Russia, or working with Russia towards any end in the campaign, did they believe you?

CAPUTO: I don't know. Representative Schiff has a poker face for sure. And he was very directed in his questioning, as I said. But don't I think they're looking that much to, believe me, I think they're looking reasons to extend this as long as they can. I mean, we know from "Shattered," the book that was published after the election about Hillary Clinton's campaign that here the top team met the day after her failure on Election Day, and decided that the Russia collusion delusion was going to be a way that they tied Donald Trump's hands. And they've been pretty successful with that. I expect they want that success to stay -- you know, to keep going as long as possible. So, I think they want this investigation to last all -- you know, forever, years.

MACCALLUM: I mean one of the things that certainly help to fuel that was this e-mail chain that was found with Donald Trump Jr. And you have said, Corey Lewandowski, we all know you're not a huge fan of, you guys were sort of opposite sides during the campaign. But both of you, you know, very strongly came out and said there was never any discussion. Spent a lot of time in the campaign, a lot of time near the President, nobody brought up, you know, this idea of this being a good way to sort of help win the election. Until everybody saw this e-mail and Donald Jr. himself had said, you know, I never had any conversations with the Russians. So, now it undermines the credibility of that statement, and now they wonder, well, who else hasn't told us everything they know and who was in the room? It does fuel this, no?

CAPUTO: It does. And you know, each one of us is kind of a frog in the water, and this kind of thing turns up the heat on all of us; those of us who find ourselves in the jackpot of this investigation. And you know, sure, I guess it extends the life of it, perhaps, it makes it more complicated for us, but I'm satisfied with Donald Trump Jr.'s candor when he kind of took the blame for it and said he would have done things differently.

I've always respected Donald Trump Jr. and all of the kids. I have to tell you if this makes it tougher for us, it's OK because here's the thing: Donald Trump Sr. would not be President today without the hard work of Donald Jr., and his siblings. And if he made a few mistakes here or there, I think the country, and myself, I can forgive him for it.

MACCALLUM: Interesting. So, one of the people that I find very interesting in all of this is Rob Goldstone. And I heard an interesting documentary on his background. I mean, it's kind of weird that he would send this e-mail, and say they're going to give you the goods, right? And who knows what Donald Trump Jr.'s, you know, intonation e-mails can be, kind of, deceiving. When you look at the words on the paper, he said, oh, well, if that's what they have, I love it. If it is what you say, right? So, do you think -- what do you know about Rob Goldstone? Does he have credibility?

CAPUTO: Not much, but I'd like to have a beer with him sometime, he seems like a pretty interesting character.

MACCALLUM: You mean he's in character, right?

CAPUTO: Absolutely. And the Trump family and the Trump organization was surrounded by characters. It was that kind of business development in Hollywood, and branding and people like Goldstone weave themselves in and out of this kind of world all the time. I mean, he's a promoter and that is certainly -- I don't know much about him, I think he was close to the family in some way. And so, when an intermediary that was familiar to him sent him an e-mail, I think that helped Donald Trump along the path of making that mistake.

But I've to agree with the President on this. When we had opposition research offers coming across the transom, a flow of it coming in at a rate I've never seen in the 30 years of my campaign career. I've never seen anything like it; they were coming across -- a transom across every platform. Everybody was getting this stuff. So, you have to understand why all of us were looking for a way to, you know, to defeat Hillary Clinton. And you've got to understand why Donald Trump Jr., who doesn't have a lot of experience in campaigns, can fall into this kind of a situation.

MACCALLUM: I understand what you're saying. Do you think there's anything more here? I mean, that once again becomes the question: is there a connection? The only thing that anyone has ever boiled down in this Russian hacking, potentially to -- and I know that you say you do think that they were involved to some extent. Are these e-mails, the embarrassing e-mails from John Podesta, and that's what, as you pointed out, Hillary Clinton's campaign believes was integral to them losing at, you know, sort of in the last leg of this campaign. Is there an e-mail out there that shows any connection between anyone in the Trump campaign that you know of, and any discussion about e-mails or releasing those e-mails?

CAPUTO: Certainly none that I know of, none of my e-mails will show this. I know I had nothing to do with colluding with the Russians; nobody ever said the word Russia to me in the entire time I worked on that campaign. I never heard it discussed by other people; I can imagine that Roger Stone or Paul Manafort did. I've known these guys for 30 years. I'm a bit surprised to find out about Donald Trump Jr.'s e-mails, and I think that it's important for the investigators to get to the bottom of this.

MACCALLUM: Michael Caputo.

CAPUTO: Because we want American people to understand that there's nothing to it.

MACCALLUM: Thank you very much, sir. Good to see you tonight, thanks for coming in.

CAPUTO: Thank you.

MACCALLUM: So, here now with more: Charles Hurt, Political Columnist at the Washington Times; and Mo Elleithee, Founder of the Georgetown University's Institute of Politics and Public Service, both are Fox News Contributors. Gentlemen, welcome, good to have both of you here. Mo, let me start with you. You know, you listen to Mr. Caputo and I'm curious to think and ask you, you know, how credible you think he is?

And it goes through the fact that, you know, Carter Page, and Roger Stone, and all these people who were the initial names that the investigators were so fired up in this about. Now, they don't even really need to talk to, they're saying. So, they're moving on down the chain. How strong is the case that there's anything there beyond what we know so far, which is the latest news from last week?

MO ELLEITHEE, FOX NEWS CONTRIBUTOR AND FOUNDER OF THE GEORGETOWN UNIVERSITY'S INSTITUTE OF POLITICS AND PUBLIC SERVICE: I mean, look, I don't know how strong the case is; I'm not part of the investigation, I'm not privy to everything they have at the investigation. I do -- what's becoming increasingly apparent is that every day there seems to be more information coming to light that is at least of interest to the investigation. You asked about Mr. Caputo and his credibility -- I mean, this is a guy who did work for a while in the P.R. firm that had Mr. Putin as a client, right? Or pro-Putin forces as a client.

MACCALLUM: He claims very strongly that he was never working on in proving Vladimir Putin's image. So, that's what he claims and he says what you say.

ELLEITHEE: No, he has set on the record that Mr. Putin was not a bad guy. So, you know, look, put Caputo aside for a moment. What we know is that high-ranking officials in the Trump campaign met with an agent of the Russian government who was going -- who were at least portended to give them information about the Clinton campaign. It turns out that this person may not have had that information, but they went into this meeting expecting that. They went to this meeting expecting to receive something and they wanted to see if it would pan out. That is a problem and the President is wrong. Not everybody would do that. I don't know a single campaign on either side of the aisle, most Republican campaigns I know would walk away from that meeting.

MACCALLUM: All right. Except for Ted Kennedy, trying to dig up some stuff through the Russians on Ronald Reagan, and perhaps, this Ukrainian connection with the DNC Strategist. You know, it's interesting to me, Charlie, because, you know, everybody seems to be very sort of talking along the lines that Mo is here. And yet, when anyone who's covered a campaign as we all have, notice that the disgusting dirt that people try to dig up on each other is part of the daily, you know, suddenly everybody's, we would never do that, right?


MACCALLUM: I don't know. Am I wrong, Charlie?

CHARLES HURT, FOX NEWS CONTRIBUTOR AND POLITICAL COLUMNIST AT THE WASHINGTON TIMES: They're shocked; shocked on gambling going on in this establishment. And you know, Mo, if you say that you wouldn't have taken this meeting, I trust you, I take you with your word, but I have to call bull when you say that other people wouldn't. I mean, there's not a single person in Washington who's run a Presidential campaign in the past 40 years who wouldn't have taken any meeting with anyone in order to get dirt on their opponent.

ELLEITHEE: This is where you're wrong, Charlie. This is where you're wrong.

HURT: No, I am not -- you know, I'm not. I know these people just as you do.

ELLEITHEE: I was one of those people!

HURT: No, I'm not -- And I said, I take you at your word that you say wouldn't do it.

ELLEITHEE: I did say opposition research many, many times but not from a foreign government. Not from a foreign government or someone that pretended to be part of the --

HURT: OK. But if something came out of it that was nefarious or was illegal --

MACCALLUM: All right. Hold on.

HURT: I do believe that there are plenty of people who are upstanding enough that they would report it at that time.

MACCALLUM: And that has happened, we should point out.

HURT: I don't see how they wouldn't have at least taken the meeting to see what the heck is going on here. And the other thing is I don't -- you know, it's clear, Donald Trump Jr. had never been part of a campaign before, and as evidenced by those e-mails and the fact that he would have stumbled into a whole mess like this that he himself says --

MACCALLUM: And he said himself that should've been handled differently.

HURT: Right.

MACCALLUM: And you know, but it's interesting to me when you look at the poll, Mo, that the American people -- it looks like by and large are looking at this whole thing, they're saying OK, I get it, that was inappropriate, that's according to those polls, but I still don't see the connection.

ELLEITHEE: We're still in the early stages of the investigation. And if you go back and look at public opinion during the Watergate-era, you would see that early on at this point in the Watergate investigation and we were still very polarized. Republicans thought this was all much ado about nothing, and Democrats were all up in arms about it. And that's very similar to what we are seeing now, right? We're waiting to see how this all turns out.

MACCALLUM: All right. I've got to leave it.

HURT: But there was a crime in Watergate! There is no crime here!

ELLEITHEE: We don't know that yet, Charlie.

MACCALLUM: Got to go. Charlie, thank you. Mo, thank you. To be continued. So, we now know who was in the room as we wait for the details from a last-minute meeting at the White House on the stalled effort to repeal and replace Obamacare. The President is very focused on it; he's invited them over to dinner to try to hash this out.

And new developments into who, in the Obama administration, unmasked Trump campaign officials. Tonight, our own Catherine Herridge, learning the issue could go well beyond what we previously thought. Judge Napolitano is right here in the studio for the story, and he's coming over to the table in a moment.

And a growing outrage tonight after a terrorist who admittedly killed an American gets a huge payday from Canada. How was this allowed? Why isn't the widow of this soldier getting a dime? This is a maddening story, and we'll lay it out for you, moments away.


UNIDENTIFIED MALE: I really hope that the talk about the settlement or apologies does not cause people pain.


MACCALLUM: We are back and breaking tonight, we now know who was in the room during a last-minute closed-door White House meeting on health care this evening. So, we're going to get you up to speed on that as soon as that gets underway. But we want to go to Catherine Herridge. Do we have Catherine Herridge with us tonight? She's seated and ready to go? OK. Good. A little hesitation there as we figure that out. But she has been looking into the alleged unmasking of the Trump officials by the Obama administration. So, just how many Obama officials could find themselves testifying in front of Congress? That list may be growing a little bit. Chief Intelligence Correspondent, Catherine Herridge, joins us live from Washington with the very latest. Hi, Catherine!

CATHERINE HERRIDGE, CHIEF INTELLIGENCE CORRESPONDENT: Thanks, Martha. This is really shaping up to be a heavy week for testimony from former Obama administration officials with Fox News confirming tonight that former National Security Advisor, Susan Rice, is scheduled to appear before the Senate Intelligence Committee behind closed doors as part of the Russian investigation, though it's not clear yet on the timing this week. Former White House Chief of Staff, Denis McDonough, is excepted before the same Senate panel as early as tomorrow or Thursday with the former Director of National Intelligence, James Clapper, appearing today before both the House and Senate Intelligence Committees. The central line of questioning is expected to be who requested the identification of Americans in intelligence reporting. This process is called "unmasking." And in April, Rice defended her actions.


SUSAN RICE, FORMER ADVISER, U.S. NATIONAL SECURITY: This is not anything political has been alleged. The allegation is that somehow the Obama administration officials utilized intelligence for political purposes. That's absolutely false.


HERRIDGE: After the Republican Chairman of the House Intelligence, Devin Nunes, issued subpoenas in May as part of a separate investigation, Fox News is told that the FBI, CIA, and National Security Agency or NSA have fully complied with the reference request. The source who acknowledged of the review set the record suggests the unmasking goes beyond key officials like Rice, as well the as former CIA Director, John Brennan, and former U.S. Ambassador to the U.N., Samantha Power.

The source said more than a half dozen former Senior Obama administration officials are now of interest to House Committee Investigators. Though, it's important to note the Congressional scrutiny at this point does not mean investigators have concluded that any laws or internal regulations were broken. Martha.

MACCALLUM: All right. Catherine, thank you so much.

HERRIDGE: You're welcome.

MACCALLUM: So, here now tonight: Judge Andrew Napolitano, Fox News Senior Judicial Analyst. Judge, good to have you back.


MACCALLUM: What do you think about what Catherine just reported there?

NAPOLITANO: Well, it's very, very disconcerting, but I think Catherine, as usual, has her thumb on this, and it's probably the tip of the iceberg. So, there are two kinds of unmasking. In the ordinary course of intelligence work, the White House will receive a transcript of the conversation or some communication between an American and a foreign agent. And it might be necessary for the White House fully to appreciate the content that they know the American's so that American is unmasked. That is a lawful unmasking.

MACCALLUM: If there's a compelling National Security reason to do so.

NAPOLITANO: Correct. But if the unmasking was done for political reasons or to embarrass the American or to embarrass a person of affiliated with the American, like the President-elect of the United States, that's a felony. So, if these two committees: the House Intelligence Committee and the Senate Intelligence Committee discover that other than Susan Rice, people in the Obama administration unmasked potential persons in the Trump administration in order to embarrass, humiliate, frustrate then-President- elect --

MACCALLUM: If this is going to be a fine line to figure out. Because here -- you know, we all go back to The New York Times' story, which basically said that there was a big effort in the Obama White House toward the end of their administration before President Trump became President to get all the little tea leaves they could and leave all the breadcrumbs they could on the Russia investigation out there, because they were very concerned about connections between the administration and the Russians. So, they wanted to do that, they wanted to unmask those names, they got Michael Flynn's name out there, which we know, right?

NAPOLITANO: And somehow a portion of Michael -- General Flynn's conversation with Ambassador Kislyak --

MACCALLUM: Ends up in the newspaper.

NAPOLITANO: Correct. And that portion humiliated him. Started the FBI investigation; the FBI interrogated him about it, but apparently, this led them --

MACCALLUM: All right. But is it -- so, when they talked to these committees, and they say, look, we were concerned about their interactions with Russia, and so we need to know whose names were on those. OK, just assuming that for a moment. Then, they can't explain how it got to the newspaper, then they're covered, right? They'll say it was a National Security issue, we had every reason to do it, and we have no idea. And if they can't nail it down, who leaked it, then, they have nobody.

NAPOLITANO: Correct. However, there's somebody else out there by the name of Robert Mueller who's currently the independent counsel, whose job it is to investigate everything rationally related to the allegations about Russia. So, as an effort to humiliate the incoming Trump administration, a last-minute change in the rules -- what's everybody in the Intelligence Community share everything, was this done in order to frustrate the new President, in order to paint a false picture of him, and is there any criminal activity there like unmasking for political purposes, which is akin to hacking.

MACCALLUM: Do you think Mueller's investigation is spending a lot of time on this part of the equation?

NAPOLITANO: No, but I think it will after we find out what the testimony is about. Which is why I'm angry that these testimonies are in secret because the American public is entitled to know what Susan Rice and the Obama people did, and the American public is entitled to know what the Congress knows and the Congress will do about it.

MACCALLUM: Great point.

NAPOLITANO: When the government operates in secrecy like this, Democracy dies. We're at their mercy, rather than them being stepping to our will.

MACCALLUM: Thank you, Judge.

NAPOLITANO: You're welcome.

MACCALLUM: All fired up, Judge Napolitano. You're speculating like crazy.


MACCALLUM: Good to see you, Judge. All right, still ahead tonight, an admitted terrorist who killed an American soldier then ended up suing the country of Canada and getting a huge payout courtesy of Prime Minister Justin Trudeau. So, that story straight ahead. The outrage that comes along with it, no doubt, we will discuss as well.

Also, we are watching the White House tonight. We have our cameras trained on that because Senators are in there discussing the health care bill. The President is dining with them, cordially, but of course trying to get them to move on this, no doubt. We're standing by as they come out.

We will take you to the mics and let you know what they have to say. Anthony Scaramucci and Michael Starr Hopkins joins us to react to the latest effort that is going on as we speak at the White House.


MACCALLUM: Breaking tonight, we now know who is in that room. During the last minute closed-door White House meeting on health care, the President huddled with these Senators trying to push the Obamacare repeal and replace bill over the finish line. Two Republicans have come out against the bill; the President needs every single other GOP lawmakers to be on board and there some discussion and concern about Ron Johnson this evening. So, earlier today, the President said he remains optimistic that this can happen.


PRESIDENT DONALD TRUMP: The Republican Senators are great people, but they have a lot of different states. Some states need this, some states need that. But we're getting it together and it's going to happen.


MACCALLUM: Anthony Scaramucci, former Member of the President's transition team and Senior Vice President of the Export-Import Bank now; and Michael Starr Hopkins, is a Democratic Strategist. Good to have you both here with us tonight. So, Anthony, you're sort of chuckling as you watch that.

ANTHONY SCARAMUCCI, FORMER MEMBER OF THE PRESIDENT TRUMP'S TRANSITION TEAM AND SENIOR VICE PRESIDENT OF THE EXPORT/IMPORT BANK: I love the guy. I mean, the hands moving and -- I mean, you know that's him. That's why it's going to get done. You see the way he talks, and the way he thinks. H recognizes there are a lot of vagaries in the states, but he knows the people are people; he's going to get them in the room, he's going to close a deal. That's what he's great at.

[MACCALLUM: All right. So, the people that were in the room tonight are not necessarily the people he needs to be that worried about, though. I mean, Rand Paul, Susan Collins, it looks like they're both gone. So, maybe they're just crossed off the list. Alexander Wood, Blunt, John Cornyn, was in that room. Steve Daines, you've got John Thune, Richard Shelby, Jim Lankford. I mean, is he reaching out to these people to get them to corral the rest of the troops?

ANTHONY SCARAMUCCI, SKYBRIDGE CAPITAL FOUNDER: I think that that's the strategy. I mean, if you look at those guys they're obvious the leaders in the senate. They're supporting the president. They recognize that the promise was made to the voters and the constituents that they need to repeal and replace this bill. Whatever you think of the bill, it's moving us in the right direction, you'll have a freer market in health care, which will lead to more innovation, which will lead to lower prices over the long haul. And it will be interesting to debate this, but I think the current configuration of Obamacare is going to implode on itself, even Rand Paul who's not voting for the bill is telling people that over the Sunday shows. So it's got to get fixed.

MICHAEL STARR HOPKINS, DEMOCRATIC STRATEGIST: I think that Obamacare definitely has some things that need to be fixed about it. I think Democrats will be open to it. I think the idea that any bill right now is going to make its way through the senate and then through the house seems kind of foolish at this point because Republicans are seeing the same kind of problems that Democrats had to deal with when we put together a bill. That there's a lot of groups that you have to bring together, and trying to bring together the liberal wings of your party, and the conservative wings of your party is always problematic.

MACCALLUM: So nothing can ever get done?

HOPKINS: I don't know if nothing can ever get done.


HOPKINS: . but I believe that there are ways that we can fix this bill. I think if we talk about doing reinsurance programs like Maine and Alaska have done. I think when we talk about offering -- insurers to bring them back into the state market, that's certainly something that can work. I think that there are plans that Republicans have issued. I think there're plans that Democrats have issued.

MACCALLUM: That's interesting because you look at this whole thing and basically we have now -- we have Obamacare. We have an entitlement agency that is part of the federal government that ensures that one way or another, Anthony, everybody is going to get some money towards their health insurance whether it comes to a tax credit. We've also got, as Rand Paul is constantly talking about, we're bailing out the insurance companies. So you had to bail out somebody, either the hospitals and the doctor fix, now we're switching over to the insurance companies. So that ship has sailed, it appears.

SCARAMUCCI: First, I want to agree with Michael on a couple things. It's very hard to put these things together. It took 22 months to get the Obamacare legislation put together. We're in the six months of the Trump presidency. So if he gets it done, and I predict that he will, it will be historic in terms of what's he's capable of doing. Your point about the insurance companies and the hospitals, I said this on you show, I'll maintain this, until we disrupt that duopoly between the patient care, the hospital and the doctor, and the insurance company, and disrupt it the way we disrupt.

MACCALLUM: That's not happening though in this bill.

SCARAMUCCI: It isn't. But at least it's a step forward towards a freer market. Remember, we deregulated airlines and telecommunications 30 years ago now. You had S-curve transformation of lower prices and better efficiency in those markets. That has to happen here, the president knows that. We have to move towards a freer market standard, and this is a step in that direction.

MACCALLUM: All right. The president today at the White House talking about made in America, pushing for more things to be made in America. I remember when I was a kid and I think he was referring to this, sort of, made in the USA, it's like a little jingle that went along with it.

SCARAMUCCI: Absolutely.

MACCALLUM: So, you know, can he achieve that? And every week there's another label for the week, right? We have economy week, infrastructure week, you know -- I don't know, agriculture week, but they do seem to get lost in the shuffle of everything else that going on out there. How he's doing of pulling the focus back to his agenda?

HOPKINS: I think he's failed in the last couple weeks of being able to bring things back and focus. And I will say that I hope that we do get to a point where we make things in America, because that's what we need to do, we need to bring manufacturing back, I think that's not a Democrat or Republican thing, I think that's just an American thing. But when you talk about the president and messaging, he keeps distracting every morning when he gets on twitter and starts talking about Russia, and starts talking about the mainstream media, attacking those. That's not really the focus.


SCARAMUCCI: It's hard to believe that I see it differently than Michael.

MACCALLUM: I know. But he has to drive it.


MACCALLUM: They say, oh, so, Mr. President, made in America today, right? And they wake up and they go, oh, my God.

HOPKINS: I know you love to talk about infrastructure.

SCARAMUCCI: Well, I want to talk about infrastructure, made in America, but I think that whatever the distractions are, it's a phenomenal undercurrent of progress that the president is making.

MACCALLUM: Thirty six percent is the approval rating right now.

SCARAMUCCI: Yeah. And I think that that's temporary. You know going into the historical context of Ronald Reagan lost the midterm election in '82, people predicted he's going to lose in ‘84. He won 49 states. President is making progress and incrementally moving his policies. One of the great things we know about the presidency and its power, as he starts to move this up -- just look at the manufacturing jobs in the last five or six months, 50,000 new manufacturing jobs. So he's going to get there, Martha.

MACCALLUM: All right. We will see. Thank you very much you guys. Good to see you tonight.

HOPKINS: Thanks so much.

MACCALLUM: So tonight, a story that you have to hear to believe. The dean of the University of Southern California, USC medical school, making over $1 million a year, all while hosting drug and prostitute-filled parties off campus and there is a video of all of this, OK? Wild expose straight ahead. Plus, terrorist Omar Khadr confessed to killing army medic Christopher Speer, so why would he be getting a multimillion dollar settlement from the government of Canada, and the soldier on the right's family gets nothing. This story has divided Canada and it has sparked outrage here at home. We're going to talk to a man who's trying to change that right after this.


MACCALLUM: Canada's prime minister, Justin Trudeau, facing a barrage of criticism tonight after a big payout to the convicted terrorist who killed this U.S. army medic, U.S. army sergeant first class Christopher Speer. Trace Gallagher takes us inside the shocking turn of events in our west coast newsroom tonight. Trace?

TRACE GALLAGHER, FOX NEWS: Martha, Omar Khadr is a Canadian citizen who as a child went with his father to Afghanistan to train with al-Qaeda. Then in 2002, just shy of his 16th birthday, Khadr tossed a hand grenade at U.S. soldiers in Afghanistan, killing sergeant first class Christopher Speer, and blinding sergeant first class Layne Morris. Khadr was captured and sent to Guantanamo Bay where he confessed to the war crimes and was sentenced to 40 years in prison, but a plea deal reduced the sentence to eight years. Omar Khadr later claimed he was tortured at Gitmo by Canadian forces. Here's part of his interrogation video. Watch.




GALLAGHER: In 2010, the Canadian Supreme Court ruled the interrogation violated Canadian standards. The court left the remedy up to then Prime Minister Stephen Harper, a conservative. Harper decided to bring Omar Khadr back to Canada to serve the remainder of the sentence. Khadr then sue the Canadian government for $16 million, but Sergeant Layne Morris, who was blinded by Khadr, and the family of Sergeant Christopher Speer had already sued and won a judgment against Omar Khadr for $134 million. Then last week, liberal Canadian prime minister, Justin Trudeau, not only issued a former apology to Omar Khadr, he paid him a reported $8.5 million even though no court had ordered him to pay a dime. And the Canadian press wire service says Prime Minister Trudeau knew there was an outstanding judgment against Khadr in the U.S., so he rushed the payment allowing Khadr to dodge complying with U.S. court. Today, Peter Kent, a conservative member of the Canadian parliament wrote in the Wall Street Journal that the prime minister's actions are not only an affront to Omar Khadr victims, but to our, quote, U.S. allies and all men and women in uniform. Martha.

MACCALLUM: Trace, thank you. Joining me now, Brian Lilley is a rebel media radio host in Canada and he's raising money for the children of sergeant first class Christopher Speer. He and his wife Tabitha had two children, and as you just heard, they have received no money despite the fact that the person who took their father's life has received an estimated $10.5 million. Brian, thank you for being here. Is this a cautionary tale about what happens when someone is released from Gitmo and goes back home to sort of be subjected to their own country's laws?

BRIAN LILLEY, RADIO HOST: Well, this is the sort of thing that outrageous Canadians coast-to-coast. I just want your audience to realize that. There's a poll out showing that even the overwhelming majority of Justin Trudeau's liberal party voters don't like this. So voters on the left don't like it, voters on the right, across the country, the supported, it never goes below 68 percent in opposition to this cash payment. So people are furious at this. And I would say that it's more a tale of what happens when you have a naive politician who was elected for his good looks, his hair, and the socks that he talks about when he goes on with Kelly and Ryan, then it is what happens with the justice system. Because as Trace Gallagher said in his introductory piece there, no court order this payment to happen. Justin Trudeau decided to make it happen. So Khadr sued for 20 million Canadian, or about 16 million U.S., before a word of testimony was heard, before a single piece of evidence was presented, he caved. He gave him the decision.

MACCALLUM: It's inexplicable. What can the U.S. government do to force him to use some of that money, at least, or all of it, according to the settlement that this family received in the United States, to pay them off?

LILLEY: There is a way -- you can sue somebody in the United States if they live in Canada or vice versa. You sue where you reside. And then, once you a judgment, if you get a judgment in your favor, then you go to, in this case, the Speer and the Morris families got a judgement in the Utah court, they're now in a Toronto courtroom in Ontario, trying to get that enforced, but it takes time. They sought an injunction last week to freeze Khadr's assets, and the court said no, there's no reason to believe that we have to do this, there's a process in place. We'll get to that. I think that's going to happen later this summer, but that attempt to gain access to all his money will go through. But, in the meantime, this money could go anywhere. Omar Khadr's father was one of the financiers of 9/11.

MACCALLUM: Well, you watched, you know, Justin Trudeau at the White House, and they're talking about the deep relationship between Canada and the United States, and the fact that one of our soldiers is killed by this young man who talked himself about pulling the pin out of the grenade and throwing at these guys is shocking. And I thank you for bringing some attention to it, Brian.

LILLEY: And I know that you're from the border area, Martha, and I know that you understand there's a deep relationship. So we've raised almost $200,000, and I'd love your audience to consider donating at speerkids.com, almost $200,000 from Canadians to an American family. Just know that the country doesn't back what Trudeau is doing.

MACCALLUM: Thank you. That's a good message, Brian Lilley, and we hope people will do that. Thank you so much, good to have you here tonight.

LILLEY: Thank you.

MACCALLUM: So still ahead, is a cure for cancer getting closer? Up next, meet the little girl who doctors say is now cured of leukemia after she received a groundbreaking treatment. She and her dad are here with us coming up. And a college dean's secret double life filled with drugs and prostitutes. Could we see, also, in the next story after that -- there we go, potentially Senator Caitlyn Jenner, thinking about running for the senate as well. And the return of Mattress girl, remember this story from Colombia University? A shocker today when we come back.


MACCALLUM: Short stories making news tonight, a secret life of drugs, parties and prostitutes, those are the stunning claims from a new report about former USC med school dean, Dr. Carmen Puliafito. New videos show him partying in hotel rooms, taking ecstasy, all while he's out of the school. As dean, he oversaw hundreds of medical students and professors, earned a cool $1 million a year in salary. It should be noted that he still represents USC, doing so as recently as this past Saturday.

Well, you'll never know, baby. That was the response from Caitlyn Jenner when asked if she is running for congress. She recently sparked chatter about a career in politics after saying that she may, quote, look for a senatorial run. Jenner is a lifelong Republican who voted for President Trump.

And finally, victory for a former Columbia University student who was falsely accused of rape, the school has now settled with Paul Nungesser, accused of assaulting fellow student, Emma Sulkowicz. An investigation cleared him of wrongdoing. And then, after that, in protest she carried a mattress around campus, a move that garnered national attention and praise for her. Nungesser said Columbia failed to protect him from his or from her harassment and defamation. The amount of the settlement is confidential.

Here's tonight's back story, a little girl who was dying of leukemia is now healthy and has no signs of the disease after a groundbreaking treatment that could change everything we know about the fight against cancer. In 2012, Emily Whitehead, just six-years-old at the time, battled an advanced form of leukemia. After she was out of options after a two year battle, doctors told her family it was time to prepare for the worst. But in the lifesaving turn, the family took part in a cutting edge medical trial that uses a disable form of the HIV virus to reprogram the immune system to kill cancer cells. It is astonishing. Five years later, she has been told and her dad has been told she has no cancer, it's gone. She's cured. She and her family are joining the fight for FDA approval of T-cell immunotherapy, testifying before the agency to advocate for what they call a miracle cure. Joining me know Emily Whitehead and her dad, Tom, welcome to both of you. It's wonderful to have both of you here, so hi, Emily, and hi, dad.



MACCALLUM: Hi, there. Let me start with you, Tom. Why is T-cell treatment so different from chemotherapy? Why is it so revolutionary?

TOM WHITEHEAD: Well, they took Emily's T-cells out of her body and use the HIV in the lab only to train her immune system, and then when they put them back in her, her cells were able to recognize and then kill her cancer.

Marha: Which is amazing. Tom, let me stay with you for just a moment. I know some of that was very difficult. There's a lot of very dramatic side effects, how rough was that, and how worried were you that you might have made the wrong decision at that point?

TOM WHITEHEAD: We never thought we made the wrong decision because the alternative was to go home on hospice, but it was brutal in the beginning, and she ended up in a coma for 14 days. It's very hard to watch. But the doctors worked around the clock and figured out a way to reverse the storm that was causing her to be so sick. And when she woke up on her seventh birthday, came back to us, and 23 days after her first dose of T-cells she was cancer free and remains that way five years later.

MACCALLUM: Emily, I know you testified before the panel, Emily. How are you feeling today and what do you look forward to in your future, what you like doing these days, and what do you want to do in the future?

EMILY WHITEHEAD: Well, right now, I'm feeling pretty good. And in the future, I don't really know what I want to do yet.

MACCALLUM: What do you like to do? I heard you like to play the ukulele and that you're quite the musician.

EMILY WHITEHEAD: I do. I've been taking piano lessons for a couple of years now, and I just recently got my own ukulele and I'm planning on going to teach myself.

MACCALLUM: Oh, that's great. What you tell other kids who are going through what you have gone through? How do you give them some hope?

EMILY WHITEHEAD: Well, I always tell them to always keep fighting and never give up and always keep believing.

MACCALLUM: And that's what you did, right? And I know your dad told you from day one this only happens to the strong kids, so you're going to be OK. And we are so glad that you are, and what a wonderful story. And so much hope for so many other people who have cancer out there. Tom and Emily, thank you so much for being with us tonight.


TOM WHITEHEAD: Yeah, thank you very much.

MACCALLUM: Thank you, guys. All right. Coming up next, we'll take a moment to remember the life and legacy of actor Martin Landau, so stay with us for that. We'll be right back.


MACCALLUM: So this weekend, the world lost a great actor, Martin Landau was born in Brooklyn, but he made his name in Hollywood. He started in scores of movie and television shows, winning Emmy's and an Academy Award for the movie Ed Wood in 1994. He was also nominated for one of my favorite movies, Crimes and Misdemeanors, in 1989. He played a successful ophthalmologist who wants to murder his mistress.


MARTIN LANDAU, ACTOR: I fool around with her for your pleasure, and then when you think it's enough you want to sweep her under the rug. There's no other solution but Jack's Ben. I push one button and I can sleep again at nights.

UNINDENTIFIED MALE: Could you sleep with that? Is that who you really are?

LANDAU: I will not be destroyed by this neurotic woman.


MACCALLUM: If you haven't seen that one, I recommend it. Martin Landau was still acting and teaching at the Actors Studio in Los Angeles until recently. He died at Ronald Reagans Hospital after a short illness, he was 89 years old. So The Story continues and that is the story for tonight, but tomorrow we will be live in D.C., so we will see you there. Tucker Carlson is straight ahead right after this. Have a good night.

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