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White House chief of staff John Kelly listens as Donald Trump speaks. Photo: Andrew Harrer-Pool / Getty Images

John Kelly acknowledged in an off-the-record session with reporters today that his boss, Donald Trump, is likely speculating about staff moves to people outside the White House and that reporters are then talking to those people. And that’s how a good deal of news is likely being made about all the possible replacements.

How we know this: Axios was not invited to the off-the-record session and is therefore not bound by the rules. We got our information from three sources familiar with the meeting, who paraphrased the discussion. 

What we're hearing:

Kelly acknowledged to the reporters it’s likely that Trump is talking to people outside the White House and that reporters are then talking to those people. Kelly cast Trump’s own conversations as a significant contributing factor to stories about the staff changes. (Kelly was making the point that he’s not around for a lot of Trump’s conversations so can’t be sure what he’s telling people over the phone.)

Kelly disputed the reports about H.R. McMaster imminently leaving the White House. He said there are no active plans to replace him, and added that it would be great if the Army gave McMaster a 4th star.

Kelly also defended HUD Sec. Ben Carson, who is under pressure for spending $31,000 on a furniture set. Kelly said $31,000 sounds like a lot of money, but to put it in context he asked a reporter how much they think the chair they’re sitting on costs. Kelly said it’s probably worth hundreds of dollars but it will last a long time. He rationalized Carson’s $31,000 outlay by saying the table could last for 80 or 100 years. Kelly was pressed on whether the President was going to fire Carson. He made a military analogy. He said whenever he makes a decision, he makes sure that it’s legally permissible and from that line he takes five paces back — to allow for optics, ethical and other considerations. Kelly said he wants all decision-making across government to be like that and the impression reporters were left with was that Carson is not going to be fired. 

Kelly said he has been telling Trump that Jeff Sessions is doing a good job. Kelly went above and beyond to defend Sessions, and told the president that the press only reports about 3% of what he does. 

He said Deputy A.G. Rod Rosenstein and FBI Director Chris Wray are also doing good jobs. 

Kelly also said that Larry Kudlow’s past cocaine habit won’t be a problem for his security clearance, as it is public knowledge. Kelly joked that the 1990s were “a crazy time.”

Get more stories like this by signing up for our weekly political lookahead newsletter, Axios Sneak Peek. 

Go deeper

Dems race to address, preempt stimulus fraud claims

Illustration: Aïda Amer/Axios

Biden officials are working to root out the systematic fraud in unemployment and Paycheck Protection Program claims that plagued the Trump administration’s efforts to boost the economy with coronavirus relief money, Gene Sperling told House committee chairmen privately this week.

Why it matters: President Biden just signed another $1.9 trillion of aid into law, with Sperling tapped to oversee its implementation. And the administration is asking Congress to approve another $2.2 trillion for the first phase of an infrastructure package.

7 hours ago - Politics & Policy

Scoop: Biden close to picking Nick Burns as China ambassador

Nicholas Burns. Photo: Alex Wong/Getty Images

Nicholas Burns, a career diplomat, is in the final stages of vetting to serve as President Biden’s ambassador to China, people familiar with the matter tell Axios.

Why it matters: Across the administration, there's a consensus the U.S. relationship with China will be the most critical — and consequential — of Biden's presidency. From trade to Taiwan, the stakes are high. Burns could be among the first batch of diplomatic nominees announced in the coming weeks.

Biden's Russian sanctions likely to achieve little

President Biden announces new sanctions against Russia. Photo: Chip Somodevilla/Getty Images

Despite bold talk from top administration officials, there's little reason to think the Russia sanctions package President Biden announced Thursday will do anything to alter Russian President Vladimir Putin's behavior or calculus.

Why it matters: While it's true some elements of the package — namely, the targeting of Russia's sovereign debt — represent significant punitive measures against Moscow, it leaves plenty of wiggle room for the Russian president.