Sarah Sanders set to resign as White House press secretary

This is a rush transcript from "Your World," June 13, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Thank you, Shepard.

We're taking you live to the East Room of the White House right now. We're moments away from the president of the United States talking about prison reform and second chance hiring. He will have a number of people with him, including those with criminal records who want a second chance.

But, more interestingly, he will be having Kim Kardashian with him, who has been working with the president on this very issue. Once there, we will go there.

In the meantime, we're also following developments from half-a-world away, with the ongoing pressure right now led by the secretary of state to get to the bottom of those tanker attacks.

Now to Rich Edson at the White House.

They seem, Rich, to have fingered Iran. They don't have any doubts about it. What next?

RICH EDSON, CORRESPONDENT: Neil, Secretary of State Mike Pompeo says this is the work of Iran. He says intelligence points to that.

He says this is all part of Iran's reaction to the United States restoring heavy economic sanctions against them, part of the U.S. withdrawal from that 2015 Iran nuclear agreement. And there Secretary Pompeo says: "Iran is lashing out because the regime wants our successful maximum pressure campaign lifted and that no economic sanctions entitle the Islamic Republic of Iran to attack innocent civilians, disrupt global oil markets and engage in nuclear blackmail."

Iran has denied involvement on all of this. The Iranian foreign minister, Javad Zarif, suggested that the attacks were designed to thwart ongoing discussions between the Japanese prime minister and the Iranian government.

Zarif tweeted -- quote -- "Reported attacks on Japan-related tankers occurred while Prime Minister Shinzo Abe was meeting with the Ayatollah Khamenei for extensive and friendly talks. Suspicious doesn't begin to describe what likely transpired this morning."

Abe met with the supreme leader. The supreme leader says that he is rejecting a communication from President Trump because he doesn't consider the president worthy of even exchanging messages.

To that, President Trump tweeted quote: "While I very much appreciate Prime Minister Abe going to Iran to meet with the ayatollah, I personally feel that it is too soon to even think about making a deal. They are not ready, and neither are we."

Iran has also threatened to continue producing highly enriched uranium next month if the European governments don't help them circumvent American sanctions -- Neil.

CAVUTO: All right, Rich, thank you very, very much, Rich Edson at the White House.

Now, what seems to be fingering the Iranians right now is a very familiar mine that exploded there and the evidence that points to prior such weapons that the Iranians have used.

Jennifer Griffin at the Pentagon with more on that.

Hey, Jennifer.

JENNIFER GRIFFIN, NATIONAL SECURITY CORRESPONDENT: Hi, Neil.

Well, we have just learned the USS Mason, a U.S. Navy destroyer, is being sent to help the USS Bainbridge, which was involved in rescue efforts earlier today.

A senior U.S. defense official confirms that the U.S. Navy saw an unexploded mine attached to the hull of the Panama flagship that was attacked this morning. Official say mines were involved in both attacks, not torpedoes.

(BEGIN VIDEO CLIP)

JONATHAN COHEN, ACTING U.S. AMBASSADOR TO THE UNITED NATIONS: It's deployed many of its resources to perpetuate its revolutionary ideology and malign activities in the region. It should be countered by a strong, unified front.

(END VIDEO CLIP)

GRIFFIN: Japan's prime minister visited Tehran for a high-stakes diplomatic mission and warned about a potential accidental war. Both oil tankers were carrying Japanese petroleum products. One tanker was on fire, but didn't sink -- 44 sailors had to be rescued at sea.

Secretary of State Mike Pompeo and National Security Adviser John Bolton were here at the Pentagon this morning for a pre-scheduled meeting with the acting defense secretary and chairman of the Joint Chiefs in the secure war planning room known as the Tank.

The tankers had just left ports in Saudi Arabia and the United Arab Emirates en route to Asia. Last month, four oil tankers were damaged by mines not far from where today's incident occurred. Today, the distress calls came eight minutes apart, according to the U.S. Navy's Fifth Fleet.

Central Command says USS Bainbridge, a guided missile destroyer, part of the Abraham Lincoln strike group, rescued 21 sailors. That aircraft carrier rushed to the region early last month amidst rising tensions with Iran. Just days ago, the head of American forces in the region, General Frank McKenzie, warned of an unspecified imminent threat from Iran and its proxies during a trip to the Middle East -- Neil.

CAVUTO: Jennifer, thank you very, very much.

So if Iran is the one behind this, then how do we respond?

Former USS Cole Commander Kirk Lippold.

Commander, good to have you.

What do you think?

KIRK LIPPOLD, FORMER COMMANDER, USS COLE: Well, good afternoon, Neil.

I think that right, at this point, we need to get irrefutable proof presented at the U.N., make sure the international community understands what has happened, that it in fact is the result of Iranian actions or their proxies, and then we hold them accountable.

CAVUTO: So, obviously, we want to do this in the auspices of the U.N.

We don't seem, it seems, at this point, Commander, to want to do this alone. But what would it ultimately be that we do?

LIPPOLD: Well, Neil, I would hearken back to the days in the late 1980s, when the tanker wars were going on. You had Iran and Iraq were at war with each other.

And the U.S. took it upon itself, along with the international community, to escort these oil tankers in and out of the Gulf. At that time, we needed proof that Iran, in fact, was mining the waterways there, that they were conducting some of the attacks that were going on.

I think we need that same level of proof here, because if we're going to act in a manner that is going to hold the Iranian government and the mullahs responsible for what's happened, we have to have that level of irrefutable proof.

We don't want to do anything less, because we want to not be the lead in this thing, but be the ones that put together this international coalition. Iran is attacking the world's oil supply, not just U.S.

CAVUTO: Why would Iran do something so foolish, though, if you think about it, even working through its agents, whether the Houthi rebels or these other groups, knowing full well we have got an armada already there, and we can just wipe them out at a moment's notice if it ever came to that?

Why would they risk that wrath? They don't have too many friends in the region supporting them.

LIPPOLD: Well, two things.

One, I think they want to just ratchet it up, and it's going to raise the price of oil, which means they're going to get more money in their coffers for the little bit of oil that they are getting out of their country and being used around the world.

But the second thing is, it's very bizarre that they would pull something like this off...

CAVUTO: Right.

LIPPOLD: ... while Prime Minister Abe is there visiting with the supreme leader, Khamenei. I mean, it just doesn't make sense.

So there may be a little bit of internal machinations going on within the Iranian government itself between hard-liners and others.

CAVUTO: But what about someone trying to set them up, Commander? That's what I'm getting at here. I'm not saying that's the case.

But if you want to trigger a battle with Iran, that's a good way to do it.

LIPPOLD: I think that right now trying to figure out if we have got a false flag, I don't believe it.

CAVUTO: OK.

LIPPOLD: I think the Iranians in fact are behind this. We probably have the intelligence to back that. Clearly, Secretary Pompeo, as well as acting Secretary of Defense Shanahan, believe it.

And, at this point, we need to get that intelligence to a point where we can declassify it, share it with the American people first, then with the world, so they can understand the threat that Iran represents to the world's oil supply and the energy flow that comes in and out of that region.

CAVUTO: Thank you, Commander. Good catching up with you, even under these weird circumstances, Kirk Lippold, the former USS Cole commander.

Oil prices were spiking on word of these attacks. They gave back some of the gains. But you know the drill. When people are getting concerned about some conflagration in the Middle East, this is what happens.

To market watcher Scott Martin of what he makes of this.

Scott, what next?

SCOTT MARTIN, KINGSVIEW ASSET MANAGEMENT: Probably higher prices, Neil, until you discussed, as it was, about figuring out what really happened here and what Iran or let's say whoever's behind this is after and what they're doing, because, let's face it, Neil, we saw markets bid up oil prices pretty precipitously today.

They came off a bit towards the end of the day, of course, but that's going to influence prices at the pump, because demand, let's face it, with the economy doing so well, is up since Memorial Day weekend year over year.

We have a lot of folks flying this summer as well. That's going to drive up cost, of course. And seeing as how we have things unsettled, let's say, in the Strait of Hormuz, that's probably going to push up price too.

CAVUTO: You know, we also have the ongoing escalation of protests in Hong Kong. If you're looking for stuff that will rattle markets, typically, the commodity markets, like oil and all that, you have plenty of ammunition, don't you?

MARTIN: You do.

And you also have the fact that we have seasonality at play here, my friend. And we have got this very tasty summer blend now of gasoline out there for the summer driving season, just in time for us to spend a little bit more on the pump.

So, to me, it's one of those things that are many factors going on. You mentioned Hong Kong. Also, we have G20 coming up.

CAVUTO: Sure.

MARTIN: A lot of uncertainty out there that's pushing around the commodity prices right behind me.

CAVUTO: You know, there's always been a tug of war on oil and all of that, because the supply and demand equation still looks kind of iffy for oil advancing much further, because of fears of a global slowdown, trade getting in the way, the Federal Reserve being accommodative, I guess, if things hit the fan, that it's going to put a lid on energy prices.

What do you think?

MARTIN: There's probably a lid, but the lid is probably higher. I mean, we're probably only, say, three- quarters of the way up in the glass, so to speak, of the container, because, as we have seen, it's gone up before, Neil, on these fears.

CAVUTO: Yes.

MARTIN: And, yes, I agree with you. The good news is the Permian Basin is now, yes, my friends, the world's largest oil producer. So that's good.

But we still have millions of barrels of oil per day tied to the Strait of Hormuz. So if there's any instability there, instability there, that obviously is pushing up price. And you know as well as I do markets act first, act -- react first and ask questions later.

And that's what we're seeing happen right now.

CAVUTO: All right, interest rates are still surprisingly low in this environment. It's not getting people overly rattled. I guess that depends on if there's an escalation, right?

MARTIN: Yes, it does.

But I will tell you, interest rates being this low for so long and continue to go lower is a little bit of a concern. The bond market, in my opinion, still, even though they may be a little bit wrong this time, is still the smartest money out there.

They're telling us something. And it's not just rates here also, my friends. It's rates overseas, where we have negative rates in many developed countries. Now, we may be heading that way as well, at least towards lower levels.

CAVUTO: All right, thank you, my friend, very, very much, Scott Martin, following these developments.

Also want to give you a quick look at what's happening in the East Room of the White House. This is an unusual event, to say the least, not that the president is going to make a statement, but he's talking about giving a second chance to those out of jail who want to get a second chance.

And he has with him in that audience some who have just come out of prison and want that opportunity. But he also has Kim Kardashian with him to say that this is the ideal time to push for it.

The president and Kim Kardashian -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, showing you the East Room of the White House. We're going to hear from the president, among others, Kim Kardashian, talking about prison reform, a bipartisan issue when it comes to parties.

Of course, you wouldn't know that today on a host of separate issues.

But we're also learning simultaneously that Sarah Sanders is leaving the White House as press secretary.

The president tweeting out moments ago: "After three-and-a-half years" -- I assume he means two-and-a- half, but it might go back longer during the campaign -- "our wonderful Sarah Huckabee Sanders will be leaving the White House at the end of the month, and going home to the great state of Arkansas. She's a very special person with extraordinary talents, who has done an incredible job. I hope she decides to run for governor of Arkansas."

As you know, her father was.

"She would be fantastic. Sarah, thank you for a job well done."

Quick reaction to all these developments with The Washington Examiner's Hugo Gurdon, the District Media's Beverly Hallberg, and Democratic strategist David Tafuri.

David, I end it with you.

I hate to hit all of you with these breaking news developments that you haven't had a chance to digest, but is your sense, David, that this was inevitable? What do you think?

DAVID TAFURI, FORMER STATE DEPARTMENT OFFICIAL: Well, this is -- I mean, I'm surprised. I think anyone who joins the Trump administration and works in the cauldron of the White House, this Trump administration, the Trump -- President Trump -- working with President Trump is not easy.

He's very demanding. He changes his mind frequently. He -- people who are very close to him end up becoming separated from him. So she actually survived much longer than many of her colleagues, many of her cohorts.

But, anyway, it is not fully unexpected, because nobody lasts too long in this White House.

CAVUTO: Yes, that's a long run, if you think about it.

But, Hugo, over at The Washington Examiner, the timing of this is odd, only just after the George Stephanopoulos interview with the president in which this hypothetical came up about, would you accept intelligence from a foreign source.

HUGO GURDON, THE WASHINGTON EXAMINER: Right.

CAVUTO: And the president, of course, reacted the way he did. He said, yes, I would be open to it. And maybe he's pointing the finger: Why did you get into this, Sarah Sanders?

GURDON: Well, I mean, that's an interesting theory.

And I have to say that I don't know that that is the case. I suspect that they wouldn't have been quite such a fulsome farewell if there had been some friction between them. But I think that I would agree with David that Sarah Sanders was working at the interface between the White House and -- on the one hand and the press on the other.

And there's a fantastic sort of clash between the two, and it's been going on. She's the one who, perhaps more than anything -- anybody else, has been dealing with that immensely tense and difficult relationship.

And having to speak on behalf of the president and the administration and the White House every day, day in, day out -- and I'm sure that that's extremely wearing. She has been the president's sort of wingman, or wingwoman in this case, for a long time and has done a job which I'm not surprised he's praising.

CAVUTO: Beverly, if you think about it, it is a long run to be in essentially that same job since the beginning of this administration.

Many have expressed frustration in the media that the president doesn't hold as many press conferences, that there aren't these daily briefings to the extent that there were. And that's not her call. That's the president's call.

And that is what has got the media wincing when it always happens. They can't put that on her. But what do you think of this?

BEVERLY HALLBERG, DISTRICT MEDIA: Oh, well, first of all, I agree with my other panelists.

This is one of the toughest jobs in Washington, D.C., I think, especially in this role with one of the presidents that would be toughest to be the press secretary for. He's had one of the most contentious relationships with the media.

And so for her to go out there, and I think do an amazing job in how she's handled this, I do think there have been a few controversies. But I wouldn't be surprised if just the rigor of this job, combined with her being a mother, is one of the reasons why she's saying, right now, I definitely want to take a step back and do something different.

But I also wouldn't be surprised to find out if the president was unhappy that he had this interview with George Stephanopoulos, because of all of the controversy surrounding that. Who knows if that was her call? We probably won't find out. But I agree that was probably an interview he should have taken.

CAVUTO: All right.

In the meantime, guys, we are watching this. We got this news that Sarah Sanders at the end of the month will be leaving the White House, that there's going to be this push for a second chance reform for those who leave prison, that second chance that's been led by the likes of Kim Kardashian.

She will be at the White House, along with those who want that second chance, those just released from prison. The president is going to do something that both the left and the right support.

David, this was bipartisan support that this measure had, with Democrats or Republicans. It's an interesting day, timing-wise, because you have gotten the predictable responses from the left and right at what the president had to say about getting and hearing out dirt on a potential opponent. That got a blast across the board from the left, a shrug from the right.

What do you think?

TAFURI: Well, it's an interesting time for him to be doing this, because, as you mentioned, this is really his signature political issue, legislative issue, which is criminal justice reform, which has bipartisan support.

He's been successful in pushing this forward. Many Democrats support it. Many Republicans support it. It's nice for the country that they're able to agree on this.

And so this event should be commemorating that and celebrating moving that forward in other ways. Unfortunately, we have all of these other news events, Sarah Huckabee Sanders. We have the breaking news about him basically inviting more help from foreign governments, which he should have learned from the special counsel and from the Mueller report is illegal.

It's a campaign finance violation to receive anything of value from a foreign power. His son almost was prosecuted for campaign finance violations for having that Trump Tower meeting with Russians. And he's basically saying, we would do it all over again. So he's learned nothing from it.

And then, in terms of second chances, you have Kellyanne Conway and the news about her today that the special counsel, another special counsel, has recommended that should be fired because of Hatch Act violations.

But President Trump keeps giving her more chances to keep doing the same, apparently violating the Hatch Act, but stay in her position.

CAVUTO: We should stress that other incidents have come up with other administration officials who might have technically violated that. I don't know what the truth is.

But, Hugo, what I'm looking at it, as Kim Kardashian, others take a seat, is the pressure on the president for this day to show where that unification is.

Let's go right now to the East Room. I want to give you guys a chance to respond to this, now the president of the United States talking prison reform, talking about the kinds of things that unite the parties.

(TRUMP PRESSER)

CAVUTO: You have been watching a little bit of bipartisanship, so rare on Capitol Hill today and so feisty and fiery today, where the president outlined, with support from Democrats, overwhelmingly on both sides, a criminal justice reform measures that would, among other things, allow former prisoners to get back into the work force, to dramatically pare that down to single digits from five times that amount today.

The president's optimistic he can do that, all of this when we're learning that Sarah Sanders, the White House press secretary, will be leaving at the end of the month. They say timing is everything here.

But The Wall Street Journal's James Freeman on the significance of that.

Talk about taking enemy fire all the time and the back and forth she had to endure, James, and the press was hard on her. She was hard on the press. Now the question is, who follows her?

JAMES FREEMAN, CONTRIBUTOR: Yes, it is a good question.

I think she's served the president honorably and well, and you could argue this is the -- she had the toughest -- or that job was toughest under the Trump administration than it's ever been, in terms of the hostility of the press, eventually ended up kind of cutting down those daily briefings.

But I think there are definitely some -- some big shoes to fill there. she's done a tough job and done it well.

CAVUTO: She's going home to Arkansas, we're told. And the president had raised the hope that she might run for governor.

I mean, how likely you think that is?

FREEMAN: Well, I think she's got a lot of the ingredients. She is unflappable. She's been in the line of fire. She knows how to deal with the media. She is now very well-known, thanks to her role in the White House.

So I think whether she wants to go the political end, get into the arena and run herself, or whether she wants to have a media career, perhaps, I would say those are two opportunities that would be very available to her.

CAVUTO: Yes.

What do you think of the timing of all this, James? I was musing about this Stephanopoulos interview the president had on ABC, that he was asked a hypothetical, what would you do if someone had dirt, a foreign entity had dirt on an opponent? Would you -- would you hear it out? The president said yes.

Do you think anything has to do with, that the president maybe felt ill at ease being put in a position like that? What do you think?

FREEMAN: I suppose it's possible.

But I -- sometimes, I think we can overanalyze these departures. These White House jobs, as you know, are real grinds.

CAVUTO: That's true.

FREEMAN: Very, very few people are able to do them over the whole course of an administration.

It's very long hours. She's got three kids and a husband that she probably doesn't see too much of right now. So, while the "I want to spend more time with my family" can be something of a cliche, I think, for these White House jobs, I think it's very true that you finally get to return, in a sense, to civilian life.

CAVUTO: Yes.

I think someone put it, you work at a famous building. It's historic. It's an honor. But, after a while, it also gets to be a grind.

FREEMAN: True.

CAVUTO: James Freeman, thank you very much of The Wall Street Journal.

So, just bring you up to date. Sarah Sanders is leaving as White House press secretary at the end of the month. We have no idea who will succeed her.

We do know that, right now, there is still a cauldron of ills the president has to address, not the least of which is these comments he made to George Stephanopoulos, and now Democrats piling on to say that that should simply be forbidden and legislation should be provided to make sure no president even entertains the idea.

And the back and forth goes on.

Here's "The Five."

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