Trump shuffles transition team, eyes loyalists for Cabinet

[November 16, 2016]  By Emily Stephenson and Steve Holland

NEW YORK/WASHINGTON (Reuters) - President-elect Donald Trump shuffled his transition team again on Tuesday, jettisoning a national security expert and lobbyists from his inner circle as he closed in on naming two loyal Wall Street backers to key economic positions.

Trump, a Republican outsider who won a surprise election victory last week, also cleared a paperwork snag that had temporarily stalled his transition after he put his Vice President-elect Mike Pence in charge of the process.

"Very organized process taking place as I decide on Cabinet and many other positions," Trump said on Twitter after taking his family to dinner at 21 Club, a Manhattan restaurant, his motorcade slipping away from reporters gathered at his apartment building.

"I am the only one who knows who the finalists are!" Trump said.

At the top of his list for senior economic positions are campaign finance chair and Wall Street veteran Steve Mnuchin as treasury secretary, and long-time backer and billionaire investor Wilbur Ross for commerce secretary, according to Trump ally and activist investor Carl Icahn.

However, a well-known Republican moderate was pushed out of transition planning. Mike Rogers, a former U.S. representative from Michigan who had been mentioned as a possible pick for CIA director, suddenly left the transition team.

Rogers had worked with New Jersey Governor Chris Christie, who on Friday was abruptly replaced by Pence as head of the transition team.

That overhaul had put the brakes on transition talks with the White House. Pence needed to sign a memorandum of understanding, which the White House received on Tuesday evening.

The Trump team still needs to provide more paperwork before detailed agency-by-agency briefings can take place, a White House spokeswoman said. The team will need to provide a code of conduct and certify that its transition team members do not have conflicts of interest.

"HUGE IMPLICATIONS"

Additional changes are likely. Pence and Rick Dearborn, the executive director of the transition team, are "removing any lobbyists," a transition aide said.

"This is to ensure President-elect Trump's commitment to ban lobbyist involvement is being upheld at all levels of the transition," the aide said.

Trump, who had pilloried opponents for being beholden to industry interests during his campaign, came under fire from his frequent sparring partner, Democratic Senator Elizabeth Warren, for including lobbyists on his transition team.

"Based on public reports, your transition team and your potential cabinet include over twenty Wall Street elites, industry insiders, and lobbyists making decisions that could have huge implications for their clients or employers," Warren wrote in a letter.

Trump has fewer than 70 days until his Jan. 20 inauguration to settle on Cabinet members and other senior appointees. He will eventually need to fill roughly 4,000 open positions.

Wall Street is closely watching who Trump picks for treasury chief because Republicans have majorities in both chambers of Congress, giving Trump a clearer shot at tax and financial regulatory reforms.

Mnuchin declined to comment to reporters at Trump Tower about Cabinet picks, but said the team was "making sure we get the biggest tax bill passed, the biggest tax changes since Reagan."

A parade of advisers had been seen going in and out of Trump's building on Tuesday, including U.S. Senator Jeff Sessions of Alabama, touted as a possible secretary of defense or attorney general.

U.S. Senator Ted Cruz of Texas, who ran against Trump for the Republican presidential nomination, also dropped by for a meeting, telling reporters he was "looking forward to fighting hard to actually accomplish and deliver the promises we made" during the election.

Bloomberg later reported that Trump was considering nominating Cruz as attorney general.

NATIONAL SECURITY HARDLINERS?

Rogers was pushed off the team in part because Trump's advisers believed he did not pursue Democratic presidential candidate Hillary Clinton aggressively enough when he headed the House of Representatives Intelligence Committee, a source familiar with the decision said.

Republican presidential nominee Donald Trump appears at a campaign roundtable event in Manchester, New Hampshire, U.S., October 28, 2016. REUTERS/Carlo Allegri/File Photo

Rogers led an investigation into the Sept. 11, 2012, attacks by militants on U.S. facilities in Benghazi, Libya. The probe dismissed many of the conspiracy theories that had been circulated by critics of Clinton, who was then secretary of state.

Trump's team viewed the investigation as a whitewash, according to one source familiar with the operation.

Some current U.S. intelligence officials worried that Rogers' departure would mean Trump was leaning toward more confrontational hardliners to lead his foreign policy team.

Two national security officials said Trump's operation had been slow to get up to speed and had not yet engaged deeply with security and intelligence agency personnel who were ready to start helping them.

Loyalists such as former New York City Mayor Rudy Giuliani and former U.N. Ambassador John Bolton were being considered for secretary of state, according to sources close to Trump.

Giuliani, New York's mayor at the time of the Sept. 11, 2001, attacks by Islamist al Qaeda militants, is known as a hardliner on national security matters. Bolton is also a foreign policy hawk who said last year the United States should bomb Iran to halt its nuclear program.

Retired Lieutenant General Mike Flynn, a leading candidate for Trump's national security adviser, has called for the United States to pull back from protecting long-time allies such as South Korea and Japan.

Trump has filled two positions so far. His choice of Republican Party insider Reince Priebus to be White House chief of staff was heralded by Republican leaders as an indication he wanted to work with Congress. Republicans maintained their majority in both the Senate and House in the election, but a number of Republicans in Congress opposed Trump's candidacy.

However, Trump's appointment of Steve Bannon as chief strategist was criticized by Democrats, civil rights organizations and some Republicans.

They denounced the former Breitbart News chief, whose website is a forum for the "alt-right," a loose grouping of neo-Nazis, white supremacists and anti-Semites.

Neither Priebus nor Bannon need Senate confirmation for their posts, but Cabinet posts do, and some of Trump's possible picks could face a difficult time winning approval.

Republican U.S. Senator Rand Paul of Kentucky said on CNN he could not vote to confirm Bolton unless he repudiated his support for the Iraq war and bombing of Iran. Paul, who also ran for the 2016 Republican presidential nomination, said he was concerned by Giuliani's work on behalf of foreign governments.

One loyalist who will not be playing a role in Trump's Cabinet is retired neurosurgeon Ben Carson, who advised Trump after dropping his own presidential bid earlier this year.

"His life has not prepared him to be a Cabinet secretary," said Armstrong Williams, Carson's business manager.

(Additional reporting by John Walcott, Mark Hosenball, Ayesha Rascoe, Patricia Zengerle and Warren Strobel; Writing by Andy Sullivan and Roberta Rampton; Editing by Will Dunham, Peter Cooney and Paul Tait)

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