CNN "Wolf" - Transcript: Interview with Rep. John Garamendi

Interview

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BLITZER: President Trump may let a Chinese company accused of violating sanctions against North Korea and Iran off the hook. The U.S. banned smartphone maker ZTE from buying parts from American companies for seven years. But over the weekend, the president surprisingly tweeted this, quote, President Xi of China and I are working together to give massive Chinese phone company, ZTE, a way to get back into business fast. Too many jobs in China lost. Commerce Department has been instructed to get it done, closed quote.

Democratic Congressman John Garamendi of California is with us. He's been studying this issue now for quite a while. What's your -- I was surprised by the reversal from the president. He's anxious now to save jobs in China. What was your reaction?

REP. JOHN GARAMENDI (D), CALIFORNIA: Make China great again? Is that what this is all about? This makes no sense at all. This company is a very serious problem in several respects. First of all, it's breaking the sanctions against North Korea, Iran, Sudan, a couple of other countries. So it is a bad player out there cheating all along the way.

Secondly, there is reason to believe -- serious reason to believe that their phones, smartphones and other devices, are an espionage device.

BLITZER: Now, what do you mean by an espionage device?

GARAMENDI: I mean that the devices that they're selling are now banned, or will -- and should be banned on military bases and military personnel enlisted in civilian that have -- they have to get rid of them.

BLITZER: You mean U.S. military (INAUDIBLE).

GARAMENDI: Well, U.S. military, exactly, have to get rid of them because there's evidence that the Chinese can use their devices to gather information from our military or from anybody else for that matter. BLITZER: There was that moment when all the U.S. intelligence chiefs were testifying before the Senate, and Senator Tom Cotton asked them to raise their hands if they would ever use this kind of equipment from ATE. Nobody raised their hands.

GARAMENDI: That's right.

BLITZER: They were asked if they should raise their hands in their constituents should buy this kind of equipment from ZTE. Nobody raised their hands. So it's clearly the U.S. intelligence community concerned. So that raises the question, why is the president anxious now to lift the sanctions and let the jobs flow to ZTE?

GARAMENDI: Well, some people says it has to do with trade negotiations. I think it may have a lot to do with $500 million that the Chinese government invested in a project in which the Trump Organization is deeply involved in, in Indonesia. There's a new project going in. Some sort of a theme park. Trump Organization, the hotel, the golf courses, condominiums, all the rest, just got $500 million for that development. Not directly to Trump, but most definitely to the benefit of the Trump Organization.

BLITZER: Well, we do know that Chinese state enterprises will provide $500 million --

GARAMENDI: Exactly.

BLITZER: To help develop this project, this Trump Organization project in Indonesia.

The president had said earlier that he wasn't going to allow the Trump Organization, the business part of the president, to have foreign dealings, but clearly this is a major foreign dealing.

GARAMENDI: Oh, my, one more lie. One more lie out of this man. I mean there is no way you can tell where the truth is with this gentleman.

BLITZER: So you -- just to be precise, congressman. So you're saying this decision by the president to tweet about lifting the sanctions against ZTE may have been the result of the $500 million loan to this Trump Organization business in Indonesia?

GARAMENDI: Isn't it curious. Isn't it curious that the tweet comes out and then within a day or two we get an announcement that $500 million is going to an organization in which the Trump enterprises clearly benefit. They benefit with a hotel, they benefit with a golf course, they benefit with condominiums. Is there something curious about this?

BLITZER: Is Congress investigating this as far as you know?

GARAMENDI: The Republican Congress investigating Trump? You got to be kidding. That doesn't happen.

But this is clearly something that, in my view, is contrary to the U.S. Constitution, which is absolutely clear about emoluments. It says article one, section nine, no one, in the employment of the government, including the president and members of Congress, can take a -- something beneficial from a foreign government, king or prince.

[13:25:15] BLITZER: The deputy White House press secretary, Raj Shah, was asked about this $500 million loan to this Trump organization deal in Indonesia yesterday. He said go talk to the Trump Organization. He didn't want to discuss it from the White House.

The other argument I've heard -- and I'm anxious to get your response, congressman --

GARAMENDI: Yes.

BLITZER: Is that maybe the president is trying to improve relations with China and lift the sanctions on ZTE in order to get them more involved in setting the stage in a positive way for the summit he's going to have June 12th in Singapore with Kim Jong-un.

GARAMENDI: Well, we know this. We know that ZTE is a company -- a major company owned in various ways by the Chinese government. Kind of hidden, but nonetheless it's there. We know that that company was doing business with North Korea. That they were contrary to the American sanctions. Is there some sort of a deal here that's in the background that the Trump Organization -- that the president is giving a big, big prize to the Chinese government in exchange for their help? Perhaps. But there's many, many other things involved here that really concern me.

BLITZER: Because China does have -- President Xi does have some influence over North Korea.

GARAMENDI: Oh, absolutely. Without a doubt.

BLITZER: So to improve U.S. relations with China, that could be beneficial.

GARAMENDI: Well, let them make that argument. Let the White House, let the president say, oh, no, this deal, this $500 million, which directly benefits the president, has nothing to do with it. We've not heard them say anything about the North Korea thing yet. Maybe there's something there. Maybe there's something about trade negotiations back and forth.

But we do know this. We do know that this company is a bad actor. We do know that this company has broken American law, not just recently but in the past. We also know that this company is -- there equipment can be used for espionage.

BLITZER: We know that the national security community here, the intelligence community --

GARAMENDI: Absolutely.

BLITZER: Is deeply concerned about ZTE.

GARAMENDI: And in the National Defense Authorization Act, which is coming up on the floor soon, we'll see if the Republicans put forth an amendment to honor the president's commitment of Xi about removing ZTE.

BLITZER: And you're a key member of the Armed Services Committee, as we know.

GARAMENDI: Well, we're going to take it up.

BLITZER: All right, congressman, as usual, thanks very much.

GARAMENDI: Thank you.

BLITZER: Lots of unanswered questions that deserve to have some answers right now.

GARAMENDI: Absolutely. We need to get to the bottom of it.

BLITZER: Yes. All right, thanks very much.

GARAMENDI: Thank you.

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