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Trump Transition Team; Dems in Disarray?; Trump and Cyber Security - Part 1

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MARIA-02

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(COMMERCIAL BREAK)

MARIA BARTIROMO, FBN HOST: Good Friday morning everybody. Welcome back. Thanks so much for joining us. I'm Maria Bartiromo. And it is Friday, November 18.

Your top stories 7:00 a.m. on the East Coast. Good morning.

From critics to confidants -- President-Elect Donald Trump meeting with the likes of Mitt Romney and Senator Ted Cruz as he looks to put powerful Republicans in key roles in his new administration. As the administration takes shape Vice President-Elect Mike Pence takes a message to Capitol Hill.

(BEGIN VIDEO CLIP)

MIKE PENCE (R), VICE PRESIDENT-ELECT: We are excited about moving the Trump agenda forward in the coming Congress. And I'm just so grateful. I'm grateful for their warm hospitality and all of their determination to work with our incoming administration to make America great again.

(END VIDEO CLIP)

BARTIROMO: And despite a peaceful transition, President Obama refuses to tell anti-Trump protesters to knock it off. The mixed message he's delivering on his final international trip.

The first winter storm of the season causing a huge pile-up in Colorado. What you need to know as millions of people prepare to travel for the holidays next week.

And the fall-out of the Wells Fargo phony account scandal continues. The staggering decline the bank has seen in new accounts as a result of that.

McDonalds hoping you are loving its latest upgrades and hope you are loving it. The company's new plans to improve your dining experience coming up.

Market this morning pulling back fractionally. Look -- down 15 points on the Dow Industrials. We have a record-setting week, of course as the markets hit new records all week and the dollar is higher this morning. That's pressuring stocks a bit.

In Europe stocks are lower across the board. Take a look at the major indices there, down about half of a percent on the FT 100 in London, same with the CAC 40 in Paris.

In Asia overnight, the trading was mixed. The Nikkei average in Japan the top performer -- up almost two-thirds of 1 percent.

And a big victory for the Carolina Panthers but it came at a cost. The injury that left the team's pro-ball linebacker in tears. We'll bring it to you.

All those stories coming up this morning.

And joining me this morning: Maverick PAC national co-chair Morgan Ortagus is here; Rosecliff Ventures founder and CEO Mike Murphy is here; and "WALL STREET WEEK" host, Gary Kaminsky. Great to have everybody today.

GARY KAMINSKY, "WALL STREET WEEK": Good morning.

BARTIROMO: Good morning.

MIKE MURPHY, ROSECLIFF VENTURES: Happy to be here.

BARTIROMO: Lots to talk about. What do you think the top story is?

MURPHY: I think it is really Trump's business approach -- to President- Elect Donald Trump's business approach to his new position.

BARTIROMO: Yes, the Trump transition.

MORGAN ORTAGUS, MAVERICK PAC: It's really exciting. I've been in Washington for a long time as a career diplomat. And I have to say that among those of us who have always wanted to see business reform in Washington, I think this is the most excited I have ever been. This is a once-in-a-lifetime opportunity to get it right.

BARTIROMO: Wow.

KAMINSKY: And I'll take it to the markets. How many people came on air and said the markets wanted Hillary Clinton because they knew they would get continuity and they get certain things. Well, so much for those strategists.

BARTIROMO: Yes. I called it a buying opportunity when we were down 800.

KAMINSKY: Yes, you did.

BARTIROMO: I'm happy about that.

KAMINSKY: Yes, you did.

BARTIROMO: Joining the conversation this morning. Manhattan district attorney Cy Vance Jr. is here, live; economic adviser under President Reagan Art Laffer is here. President Obama's former chief of staff Bill Daley also joining us. We have a big hour coming up. You don't want to miss a moment of it.

We'll kick it off right now with a preview into the crucial role Vice President-Elect Mike Pence will play in the Trump administration. Yesterday Mr. Pence met with leaders on Capitol Hill to give an update on the presidential transition team which he chairs.

Joining us right now is Harvard Law professor emeritus and author of "Electile Dysfunction: A Guide for Unaroused Voters" Alan Dershowitz is with us. Alan -- good to see you.

ALAN DERSHOWITZ, HARVARD LAW PROFESSOR EMERITUS: Nice to see you. Thank you.

BARTIROMO: Thank you so much for joining us.

A lot of conversation about Mike Pence being a different kind of vice president than Joe Biden was. More like a Dick Cheney -- very much hands- on. What do you see?

DERSHOWITZ: Well I don't see much difference. I mean they both had great connections to Congress. They both were trusted advisers to the President. I don't see any enormous difference. I think we have to wait and see what role Pence actually plays.

MURPHY: I know you are not a Trump supporter.

DERSHOWITZ: No.

MURPHY: But now as you see a week and a half or two weeks into his presidency -- how do you feel about the team he's surrounding himself with? It seems to me that he's reaching across and trying to bring in the best people out there.

DERSHOWITZ: Well, I would hope that would happen. The Bannon appointment certainly didn't make a lot of people encouraged about that. He's meeting with Mitt Romney is terrific. I predicted that he would bring Romney in. Romney is a great guy, was a great governor. I think he was a great candidate, he lost.

And I do think reaching across the aisle I would love to see him reach out to Joe Lieberman. I would love to see him reach to some Democrats. I think so far it's a wait-and-see attitude for Democrats like me who are hoping to see an administration that heals and builds bridges and reaches across the aisle.

KAMINSKY: Alan, let's go back to Steve Bannon for a second because you were in the news earlier this week. You made some comments --

DERSHOWITZ: I did.

KAMINSKY: -- which I would say were defending Steve Bannon against some of the media reports that were saying things about him.

Give me your take in term terms of what happened.

DERSHOWITZ: Well, he's not an anti-Semite. And I think it's very important not to throw that term around.

KAMINSKY: Well, first of all, being Jewish I can also say I can come on out and say I know he's not anti-Semite because I know some of the people he surrounds himself with. How do you know that he is not anti-Semite despite the fact that you watch on the TV networks and they run it -- they run banners at the bottom of the screen that he is.

DERSHOWITZ: Well, I never believe what I see on the media without checking myself.

BARTIROMO: Oh, neither do I. No way.

KAMINSKY: Ok. But how --

(CROSSTALK)

DERSHOWITZ: I checked Joel Pollack was my former research assistant and student. He worked with him. Joel wears a kippah, married to a black woman from Africa. I saw no evidence of anti-Semitism. The Anti- Defamation League has now acknowledged that there were no anti-Semitic statements.

That doesn't mean that there are no other elements of bigotry within the Breitbart. I'm not happy about the way Breitbart treats women in its headlines, sometimes treats Muslims in its headlines. And so I didn't defend Bannon, I defended him against charges of anti-Semitism --

BARTIROMO: I don't agree. I don't agree. I think Breitbart is great.

DERSHOWITZ: Well, you have a right to that view.

KAMINSKY: It's very important though. It is very important because I don't think viewers are seeing that anywhere else. And so I think it's very important that you get that out there.

And by the way, Sheldon Adelson who became a major supporter of the campaign at the end of the campaign, would never and you know it, would never as pro-Israel as he is, give any money to anything if he felt that Bannon was having a bad influence as it's related to Israel or anything with the Jewish thing.

DERSHOWITZ: Well Sheldon is a good friend of mine.

KAMINSKY: Yes.

DERSHOWITZ: His wife Miriam is a good friend of mine. They're terrific people. They would never do anything.

But we all have to think carefully and study carefully records of people like Bannon and also people like Keith Ellison who we're now being proposed for head of the DNC. And I think we have to look very hard at this man's record. This man has a very, very mixed record. He's had to apologize over and over again for his connections with Farrakhan, with other extremists. Yes.

And so I think the Democrats have to look very hard at Ellison's record before they promote him to so high a position. I also think the Democrats are making a terrible mistake in how they reacted to this election.

BARTIROMO: Yes.

DERSHOWITZ: They are moving hard left -- that's not the way to win elections.

BARTIROMO: Why do they do that knowing that the country just voted in the center to right?

DERSHOWITZ: Not only that but the people who voted against Hillary Clinton and for Trump are kind of hard-working Middle Americans who want to see economic reform but they do not want to see a move towards a hard political left.

It's an invitation to disaster in the next election. The Democrats have to move more to the center. They have to pick up votes where they lost votes. But to move ideologically to the hard left and Ellison is a hard, hard left appointment is a serious, serious mistake.

BARTIROMO: Well there I agree with you 100 percent.

ORTAGUS: I just want to say Mr. Dershowitz, I couldn't agree with you more. I have an op-ed on Fox Business talking about how they the Democrats did not respect or listen to the voters, the same thing that the Republicans did in the primary.

So can you tell me -- you're saying that they should move to the center. But I think it's more about just having a message. I didn't really see compelling economic message save for what Bernie Sanders have in the primary in the general election by the Democrats. And I saw the kings and queens of the Democrat Party looking down upon the base and saying no you're taking Hillary Clinton, whether you like it or not.

So what's the mindset? Where is the next level of generational Democrat leaders? The bench looks really empty to me.

DERSHOWITZ: Well, I think the Democrats don't understand that there's a difference between the ideological left-left and addressing the serious economic concerns which is social welfare. I mean, you know, we need to have more Jackson Democrats -- Democrats who understand tough foreign policy, who understand an approach to our enemies but also want to create jobs and infrastructure.

And I have to tell you I think the one thing that Trump is doing a great job on is building infrastructure, building bridges. That employs people, that makes people in the center understand that we see progress. The Democrats have to be moving in that direction.

BARTIROMO: By the way, one thing that -- you know, when you talk about construction and housing, I don't think you -- there's one thing that I trust somebody to do it and that's Trump.

Construction -- yes, I think Trump is going to be an expert on that.

KAMINSKY: Alan put your legal hat on. What would you like to see President-Elect Trump do with the business interest when he goes to D.C. that would make you comfortable that the business interests are separated from the government?

DERSHOWITZ: Well, I like very much this idea of no lobbying after you've serve in office. I think we have to address pay for play. We have to address --

KAMINSKY: But specifically with the Trump organization.

BARTIROMO: His kids will run it.

KAMINSKY: What would you -- are you comfortable with that?

DERSHOWITZ: No, I think that he has to --

KAMINSKY: Would he have to --

DERSHOWITZ: -- totally disassociate (inaudible). I made the same proposal to Clinton if she had gotten elected -- total disassociation from the Clinton Foundation.

When you are president you have to be full-time 24/7 president and not even know whether your business interests are benefiting or losing. And he has to do that. I think he will.

BARTIROMO: It's harder though because he's got his kids running. And they work there. So it's different --

DERSHOWITZ: But he also wants his kids. He wants his son-in-law in the White House. His son-in-law was a student at Harvard. He's a very able guy. But he has to make some choices. You're either running business or you're running the government. You can't be doing both.

I think a lot of people voted against Hillary Clinton because they thought she was mixing together -- finance, business, foundation. Trump has to learn from that and create a complete wall of separation.

BARTIROMO: Yes. That's a fair point. You're right.

Alan Dershowitz -- great to see you.

DERSHOWITZ: Thank you.

BARTIROMO: Thank you so much, sir.

Coming up next -- customers are steering clear of Wells Fargo in the aftermath of the phony account scandal. We'll bring you the details next.

And you could get a side table of service with your next order at McDonalds. The fancy makeover coming to the fast food chain, next.

Stay with us.

(COMMERCIAL BREAK)

BARTIROMO: Welcome back.

The first major snowstorm of the year dumping up to a foot of snow in parts of Wyoming, Montana and Colorado. Fox News senior meteorologist, Janice Dean with all the details. Hey -- Janice.

JANICE DEAN, FOX NEWS SENIOR METEOROLOGIST: Hi -- Maria.

Look at the temperature change from this time yesterday. That's because we have an arctic front that is plunging southward and with that the potential for a winter storm including blizzard conditions. You can see on the map, those are current temperatures -- 16 in Denver, 25 in Rapid City, 48 in Minneapolis. The temperature is going to drop like a rock across Minneapolis over the next couple of hours.

Here's our storm system -- the first big winter storm of the season. Blizzard conditions, blizzard warnings in effect for the Dakotas, into Minnesota but we also have winter storm warnings as well from Nebraska all the way up towards Michigan.

So 12 to 18, maybe 24 inches plus of heavy snow and the problem with this is we're going to have wind gusts in excess of 35 miles per hour for a duration of time and that is why it is going to be dangerous if not impossible to travel across some of these areas. Those are your current wind gusts -- so 40-mile per hour winds in a lot of these areas affecting millions of folks.

Future radar -- what happens next? It goes across the Great Lakes, doesn't get into the northeast. Will we see snow this weekend? Maria -- there is a possibility depending on how much cold air sinks southward from Canada, whether or not we're going to see a wintry mix or will it all be snow. We're going to have to stay tuned for that.

Forecast snowfall, this is one of our reliable forecast models. Again in some cases 12 to 18 for the upper Midwest and then we're going to have to watch the northeast because it really depends on the timing of the storm and if we get that cold air into the northeast.

Travel trouble -- Tuesday, Wednesday almost the same type of event. However, I think it's going to be mainly a rain-wind event as opposed to a snow even. So this is Tuesday and Wednesday -- watching this area of low pressure move in to the Great Lakes and the upper Midwest into Wednesday and Thursday -- of course big travel day, one of the busiest travel days of the year. And then that's going to kind of linger across the Great Lakes into turkey days.

So here are your weather travel delays looking ahead to Wednesday. Northwest watching you, of course, watching the Midwest, the Ohio Valley, East Coast looks good but we will certainly keep you posted.

Back to you.

BARTIROMO: All right. Thank you so much -- Janice. Big news there.

Meanwhile the fake account scandal hitting Wells Fargo hard. Lauren Simonetti on that with the other headlines right now -- Lauren.

LAUREN SIMONETTI, FBN CORRESPONDENT: Hi -- Maria, good morning.

Wells Fargo says new account openings dropped about 45 percent last month from a year ago and applications for new credit cards, they plunge 50 percent. Now, the data includes the first full month since Wells Fargo agreed to a settlement with regulators over the creation of millions of unauthorized accounts. Now you know.

Well, McDonald's is installing kiosks where you can place your own order before you sit down to eat. And then when your food is ready, it will be brought to you at your table. The upgrade will take place at all 14,000 American McDonald's. The hope is the new technology will speed-up the service -- make it fast food for real.

And everyone's talking about this one this morning -- Maria. The Carolina Panthers were able to beat the New Orleans Saints last night but that win came with a big price. Linebacker Luke Kuechly was hit in the head as he tried to tackle Saints running back Tim Hightower.

Kuechly remained on the field for several minutes. He looked to be short of breath, visibly crying as trainers there attended to him. He stayed emotional as he was carted off and later evaluated for a concussion. Now Maria -- his teammates worry that they have seen this look before. If you recall last season he missed three games after a concussion.

We hope he's well.

BARTIROMO: Those pictures.

SIMONETTI: I know -- so emotional.

MURPHY: Yes -- scary.

BARTIROMO: Very scary. Lauren -- thank you very much. Lauren Simonetti

Coming up, impeding an investigation or protecting people's privacy. The growing battle over encryption that pit technology companies against law enforcement. We will speak with the Manhattan D.A., coming up next.

And then forget to fuel -- the new ways for Volvo owners to get gas delivered straight to their tank. Maybe even get a carwash while they're at it.

Back in a minute.

(COMMERCIAL BREAK)

BARTIROMO: Welcome back.

Technology giants like Facebook, Google and Twitter are calling on President-Elect Donald Trump to protect encryption, to avoid stifling privacy and innovation in the name of safety. During the primary you remember Trump called for a boycott of Apple products after the company refused an FBI order to unlock a phone belonging to the San Bernardino shooter. A similar fight now underway in New York.

Joining me right now this morning is Manhattan district attorney, Cy Vance. Good to see you, sir. Thank you so much for joining us.

CY VANCE, MANHATTAN DISTRICT ATTORNEY: Good morning -- Maria.

BARTIROMO: So your department has more than 400 uncrackable Apple devices in evidence. Is that right.

VANCE: Well, it's exactly right. We -- since 2014 when Apple re- engineered its devices so that it no longer could open its own devices in response to court orders. We now have 423 Apple devices, iPhones, iPads where a court has determined that there's probable cause, there is evidence on that device relevant to a criminal case, necessary and relevant. And we can't access it because Apple has created -- has recreated its device so it cannot respond to court orders.

BARTIROMO: It's just so extraordinary. Is this a 21st century problem and issue? Talk to our viewers about the difference. I mean they're worried about freedoms. They don't want their freedom of speech and their freedom of privacy to get impacted and yet, you have these phones sitting there at the Manhattan D.A.'s office and you know that there is evidence that can actually put away, you know, child pornographers or, you know, people who are doing really bad things.

VANCE: In fact 10 percent of those devices that are in our office are related to homicides. Another 10 percent related to sex crimes. Ironically, 35 percent of the devices related to individuals who we believe have committed cyber crime or identity theft. So the Apple encryption is actually protecting individuals who we believe are trying to hack into your computer and mine.

BARTIROMO: What do you do?

VANCE: Well, I think ultimately, first of all, we need to raise the level of awareness in the United States about what all this means.

We've always talked about encryption in the federal and national security context, Maria -- San Bernardino and cases like that. But in reality the biggest impact is going to be in state courts and offices like mine around the country where 95 percent of the criminal cases are handled.

So in cases involving rape, robbery, murder, child abuse, identity theft, financial crimes -- our inability to access these devices is going to affect thousands and thousands of victims of crime who want to seek justice. So the question is how do we find a balance?

BARTIROMO: Right.

VANCE: And I think the only -- what we need to have I believe his the U.S. Senate and the House of Representatives take on this issue seriously.

I am an advocate for privacy like I'm sure you are.

BARTIROMO: Yes, I am.

VANCE: But I do believe that we've never in America had a space where so much information was contained that was entirely inaccessible. The government has always based -- has the right based upon a judge's determination independently that if there's relevant evidence to detect the public we have to accommodate that societal need.

We're really asking nothing new from what has happened previously. Banks, for example, didn't want to provide currency transaction reports when people move cash in and out of the banks. But we knew that criminals were doing that. So the banks had to adjust.

When the telephone companies moved from copper wire to cable in 1994, they didn't want to provide an access point for law enforcement to tap into phone calls with a court ordered warrants but we know people were using the phones and doing drug deals and committed the crimes. So we accommodated it. A balance was struck.

Right now the problem is that there are no rules in the space Apple and Google control 96 percent of the world's smart phone market and they've decided that they know where to draw the line between public safety and privacy. And they know better than anywhere else and they've drawn it coincidentally at that point which happens to serve their economic interest.

BARTIROMO: Wow. You know, this is an extraordinary moment because it is impacting national security and yet we are not coming up with a middle ground, balance where when the phone and when the impact to privacy affects things like rape, murder victims, et cetera -- can't we come to a middle ground?

VANCE: I believe we can. And I believe with a strong presidential leadership we can. We've published a report today -- a second report. We published our first a year ago, which updates the public on the impact of encryption on public safety with specific examples in.

What we believe, Maria, there is a way to start looking at this. We believe that we should first -- there are two kinds of data that are relevant to this debate. One is the data that sits on your phone --

BARTIROMO: Right.

VANCE: -- pictures, text and the like. That's called data at rest.

BARTIROMO: And that's yours.

VANCE: That's what's in the phone itself.

BARTIROMO: Yes.

VANCE: And we believe a good place to start -- this is just like getting a warrant to a car or a house or to a safety deposit box that if we focus on data at rest this is where the bulk of information that's relevant to state prosecutors resides.

We then have to look at the issue of data in motion and how and if we can obtain --

BARTIROMO: Access to the Cloud.

VANCE: -- and in a way that both protects privacy but also we all have to understand that we have an obligation in this country to protect our citizens. And when we create a space which is intentionally designed to prevent government from protecting its citizens the government has to step in and find a reasonable balance -- I think we can. I regret that the last administration didn't really lead in this area. I think it's the result -- and the result was that the Senate and the House didn't have the administration backing to move forward.

I'm hoping moving forward that we will have a reasonable and rational discussion about this and that the tech and government have to find a solution to this or we're going to have continued incidents of crime where we can't access devices or another terrorism attack with information on the phone.

BARTIROMO: Donald Trump is very adamant about it.

VANCE: Yesterday John Miller, we had a conference bringing --

BARTIROMO: You hosted major financial clients in cyber security --

VANCE: We had seven countries and 350, 400 people come to talk about cyber crimes.

BARTIROMO: And Jeh Johnson.

Vance: And Jeh Johnson was our primary speaker. And John Miller told us something very important. The device, the phone that was on the second bomb that was recovered in Chelsea it was only because the age of the phone it was not a phone that had this default device encryption that they were able to access the phone, find out who had first purchased it, who had sold it and ultimately led them in part to the man who planted the bomb.

So it's an example right at home of how important it is to be able to access devices in order to protect our communities.

BARTIROMO: That is a really important analogy that you just made and the example that you used in terms of the bomb in Chelsea.

Let me switch gears and ask you about the Democratic backlash to President- Elect Donald Trump's platform in terms of sanctuary cities. I know that you've spoken with Bill de Blasio recently, Chicago Mayor Rahm Emanuel spoke. New York City Mayor Bill de Blasio met with President-Elect Trump earlier this week.

What is your take on this? How do we get our arms around illegals and still say that New York is a sanctuary city.

VANCE: Well, I do believe we have to have a really reasonable approach to the issue of undocumented aliens -- folks living in our communities because we have millions of folks with children and several generations. So we have to treat this both I think directly but compassionately.

It's very important in New York City, for example, for us to be able to have the confidence of the immigrant community, even the undocumented immigrant community because so much of our crime, unfortunately is committed in communities of color where undocumented individuals are living and working.

So if we create a fear in those individuals that if they approached police or our office to talk about a crime that they've seen that actually has a direct impact on protecting the public.

I'm not smart enough to know what the answer to this big problem is. But I do just want those who are deciding this in Washington, D.C. to know that this -- the decision on how we handle undocumented individuals in our country will affect our ability to protect not just those people at our communities but all of us.

BARTIROMO: So when we know that it's connected to a crime, you're saying that's different -- obviously.

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