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Trump's Poll Numbers Dropping; Questions Raised Over Clinton Foundation; Clinton State Dept Chief of Staff Involved with Foundation; Trump "Fine" with Illegal Trials for U.S. Terror Suspects. Aired 6-7p ET

Aired August 12, 2016 - 18:00   ET



JIM SCIUTTO, CNN ANCHOR: Happening now: Trump change. Donald Trump now says he was being sarcastic when he claimed that President Obama founded ISIS. Why is he backtracking now after repeating that attack for two days? We're standing by a for a Trump rally live in Pennsylvania. Will he address that controversy?

Very dicey. Down-ballot concerns are growing as Trump struggles in the polls. The Senate majority leader is now warning that Republican chances of keeping control of the Senate are -- quote -- "very dicey." Will Mitch McConnell be calling the shots next year?

And under scrutiny, a hot spotlight on the Clinton Foundation. A CNN investigation finds that Hillary Clinton's top aide was involved with the foundation while she was working full-time as chief of staff to the secretary of state. Was there a conflict of interests?

We want to welcome our viewers in the United States and around the world. Wolf Blitzer, he's off today. Jim Sciutto. You're in THE SITUATION ROOM.

Republican presidential candidate Donald Trump is giving mixed messages as he tries to explain his claim that President Obama founded ISIS. Despite repeatedly using the attack line against the president over the last two days, he later tweeted that it was clearly sarcasm. Then he went to say today that it was -- quote -- "not that sarcastic."

Tonight, Trump's poll numbers are falling with new surveys showing him trailing Hillary Clinton in the critical battleground states of Virginia, North Carolina, Florida, and Colorado. Fearing fallout from a Trump loss, Majority Leader Mitch McConnell is now saying that the chances of Republicans keeping control of the Senate are "very dicey."

Clinton also upping the pressure on Trump to release his tax returns, making her most recent filing public today. In response, the Trump campaign has just a released statement of accusing Clinton of hiding and deleting the only records that he says what people want to see.

We're covering all of that and many more things with our guests, including Trump supporter and Arkansas Attorney General Leslie Rutledge. Our correspondents and expert analyst are also standing by. But let's begin with the Trump campaign.

CNN's Jim Acosta is in Erie, Pennsylvania, where Trump held a rally earlier today.

Jim, it looks like all these controversies taking a toll in those polls.


It's getting hard to tell whether or not Donald Trump is joking when he says President Obama is the founder of IS. But what's not a laughing matter is the state of the Trump campaign if you look at the latest poll numbers.


ACOSTA (voice-over): Have you heard one about the presidential candidate who called President Obama the founder of ISIS?

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: So, I said the founder of ISIS. Obviously, I'm being sarcastic. Then -- then -- but not that sarcastic, to be honest with you.

ACOSTA: Donald Trump says that one-liner is more stand-up than stump speech.

TRUMP: Barack Obama is the founder. He got everybody out, and he let them know when, and we're leaving. He is the founder, in a true sense.

ACOSTA: Just kidding, says Trump, who asked a certain television network in a tweet: "They don't get sarcasm?"

That explanation follows ample opportunities to clear up what he meant.

HUGH HEWITT, RADIO TALK SHOW HOST: I know what you meant. You meant that he created the vacuum, he lost the peace.

TRUMP: No, I think he's the founder of ISIS. I do.

ACOSTA: But it is more of a head-scratcher than a knee-slapper to even his own top surrogates.

NEWT GINGRICH (R), FORMER SPEAKER OF THE HOUSE: His candidacy is the imprecise language. He sometimes uses three words when he needs 10. I know what Trump has in his mind, but that is not what people hear. And I think that's a -- he has got to learn to use language that has thought through and that is clear to everybody.

ACOSTA: The GOP nominee's attacks on the president come as reminders surface that Trump also wanted a quick exit from the war in Iraq.

PIERS MORGAN, CNN: If you were president, would you take all American troops out of Afghanistan and Iraq now? (CROSSTALK)

TRUMP: Well, Iraq, we should not have been there. I would get them out real fast. Afghanistan is not the bigger problem. The bigger problem is Pakistan.

ACOSTA: Trump's steep drop in key battleground states is no joke. He trails by double digits in Colorado, North Carolina, and Virginia, but he is hanging on in Florida. The slide follows days of damaging moments like this one in Florida, when he asked Russia to hack into Hillary Clinton's e-mail server.

TRUMP: Russia, if you're listening, I hope you're able to find the 30,000 e-mails that are missing.

ACOSTA: Trump said that was sarcasm, too.

TRUMP: I obviously was being sarcastic. In fact, the people in the room were laughing. They found it very funny. Everybody knew that.

ACOSTA: But it is a pattern that makes it hard to determine when Trump is playing it straight on important policy issues, like whether U.S. citizens could be tried for terrorism at the detention center at Guantanamo. Trump says they should, even though that's a departure from current U.S. laws.


TRUMP: I know that they want to try them in our regular court systems. And I don't like that at all. I don't like at all. I would say they could be tried there. That would be fine.


ACOSTA: Now, Donald Trump did get a strong show of support today from RNC chair Reince Priebus, who made surprise appearance at this rally today here in Erie, Pennsylvania.

Priebus at one point told the crowd don't believe the garbage that you're hearing in the news. That was in response to reports of tensions behind the scenes between the Trump campaign and the RNC. There was another moment here at the rally where Donald Trump said to one of the protesters, here , go back home to your mama, and, by the way, your mother is voting for Donald Trump.

Jim, we expect Donald Trump to take a more serious tone on Monday. He is scheduled to give a speech in Ohio then on what his plans are for dealing with terrorism -- Jim.

SCIUTTO: Well, we will see. Jim Acosta, thanks very much.

The impact of Trump on other GOP candidates has top Republicans increasingly anxious, with Majority leader Mitch McConnell warning his party could lose control of the Senate.

CNN chief political correspondent Dana Bash here. It's unusual, is it not, for the Republican majority leader to put that out there, say that he's in danger of losing that position?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It is, because in some ways, you usually hear leaders like Mitch McConnell talking about how great things are and how -- trying to kind of play up the chances of victory.

In this case, he's being shrewd politically because he's being really realistic. It is very difficult for Republicans to keep control of the Senate. This is the point that McConnell was making when he was speaking back home in Kentucky. Take Donald Trump out of the equation. The Republicans are defending 24 seats this election cycle.

And the Democrats are only defending 10. That just gives you a sense of how hard it's going to be. And if you look at the map right now -- let me just also back up and tell you that Democrats, in order to take control, need five seats. That's all they need to gain is five seats, four if Hillary Clinton wins.

If do you look at the map right now, Jim, two Republican seats look like they're pretty much gone. Republicans will tell you that.

SCIUTTO: They're halfway there.

BASH: Exactly. There are six tossup seats. Not just that, they're also many of these in presidential battleground states, where at this point many of these states are showing Donald Trump is trailing.

The map is very difficult, and then add on top of that the important layer that we're seeing, the dynamic of Donald Trump not really being helpful to a lot of these Senate candidates.

SCIUTTO: Let me ask you this. When Mitch McConnell makes a statement like this in public, is he trying to send a message to Donald Trump or has he given up on him?

BASH: I'm not so sure that he thinks Donald Trump is going to take a message from him.

The way I read it was that he's trying to send a message to party leaders around the country, to donors especially. He was speaking to the Chamber of Commerce. We need your help. Bring in the cavalry here.

You can't ignore the fact that there are discussions, even though the RNC is saying we're not going there right now, that there are discussions and pressure on the Republican National Committee at some point to say, if Donald Trump is still not doing well in the polls, the White House is a lost cause, we got to do the checks and balances and try to save the Senate.

SCIUTTO: Focus on the winnable races.

Dana Bash, thanks very much.

BASH: Thank you.

SCIUTTO: I want to get more now on all of this with Trump supporter and Arkansas Attorney General Leslie Rutledge.

Thanks for joining us tonight.


SCIUTTO: You heard Donald Trump this morning seeming to walk back his truly remarkable statement that President Obama is the founder of ISIS. But then later today at his rally, he said in fact he wasn't being sarcastic. You're a Trump supporter. Which is it?

RUTLEDGE: Well, Jim, no one in America believes that Donald Trump actually thinks that Barack Obama is the founder of ISIS.

What Donald Trump is saying is that the policies of Barack Obama, the same policies that Hillary Clinton has, the same old, same old, so no one believes that Donald Trump means that, anymore than they believe that he wanted Russia to actually hack into those e-mails or wanted violence...


SCIUTTO: I have to take issue with that.

RUTLEDGE: What Americans know...


RUTLEDGE: ... that actions speak louder that words.

SCIUTTO: Let's listen to the candidate's words himself, not just in a rally, because he had the opportunity to clarify, in fact multiple opportunities to clarify on the Hugh Hewitt Show. I just want to play, for your sake again, how he handled those questions.



HUGH HEWITT, RADIO TALK SHOW HOST: Last night, you said the president was the founder of ISIS. I know what you meant. You meant that he created the vacuum, he lost the peace.

TRUMP: No, I think he's the founder of ISIS. I do. He's the most valuable player. I give him the most valuable player award.

I give her too, by the way.

HEWITT: But he is not sympathetic to them. He hates them. He is trying to kill them.

TRUMP: I don't care. He was the founder.


SCIUTTO: So, you heard Hugh Hewitt there making exactly the argument you made, that really he was talking about policy decisions, strategic decisions that allowed ISIS to expand.


Donald Trump said, no, that's not what I meant. I mean that he's the founder of ISIS.

How do you rectify those two?

RUTLEDGE: It's about policies and it's about the media and liberal left parsing words.

But Americans know that actions speak louder than words. And they know that Hillary Clinton has lied. They know that Hillary Clinton has kept a server in her basement, putting American security at risk, and that she has the same old, same old policies of Barack Obama. That's what Americans know.

And so when it comes to Donald Trump's words and the media and the liberal left and Hillary Clinton's campaign wanting to parse his words, Americans aren't foolish. They're not falling for that.


SCIUTTO: Leslie Rutledge, Hugh Hewitt is a conservative commentator. He is a conservative commentator. You say parsing the words. I'm reading off the transcript here.

Donald Trump said: "He was the founder." Given the opportunity by Hugh Hewitt to say, you're really making a point about policy, those -- I'm not parsing the words. I'm quoting those words.

RUTLEDGE: Right. Right.

And certainly Donald Trump missed the opportunity to remind is a Hugh Hewitt, who knows that Donald Trump was being sarcastic, to remind the American public exactly how dangerous Hillary Clinton is and that the same old policies of Barack Obama are what -- essentially why we have the dangers of ISIS and that we must have a strong national security and that we must grow jobs in America.

Hillary Clinton is dangerous. Her actions speak louder to Americans than Donald Trump's words ever will, because Americans know that time and again she's proven that she will lie and that she will put a server in her basement, putting our security at risk.

SCIUTTO: On this issue, he's running for president. He's running for commander in chief of forces, U.S. forces currently fighting ISIS.

For the sake of people back home, which statement should they believe from this candidate for the presidency of the United States, that he believes Obama was the founder of ISIS or that he was being sarcastic?

RUTLEDGE: Americans know that ISIS is dangerous and that we have seen more danger come to America and threats around the world because of ISIS under the failed policies of Barack Obama and Hillary Clinton as secretary of state, and that we don't need more of the same from Hillary Clinton and these failed policies.

SCIUTTO: Let me ask you this, because, like you, I take the issue of ISIS very seriously. I have covered attacks carried out by ISIS. I have seen the deadly consequences of that and people back home are aware of the deadly seriousness of ISIS.

You're a public servant. Do you believe that ISIS is a topic that should be joked about or have sarcastic comments about, if we take those words at face value from Donald Trump? Is this the kind of topic that should be a joking matter?

RUTLEDGE: It's not a joking matter, and neither is putting our national security at risk when you're secretary of state.

And that's exactly what Hillary Clinton did, putting each and every one of us at risk when she had all of that information in the server in her basement, putting every single person in the United States at risk. That's what Hillary Clinton did. And that's what we need to be focused on and that's what Americans know.

SCIUTTO: Donald Trump, in an interview with "The Miami Herald," he said that he believes that U.S. citizens accused of terrorism should be tried at Guantanamo Bay military tribunals.

Would Donald Trump, in your view, take action on this, which would, in effect, revoke the constitutional rights of trials here in the U.S. of American citizens?

RUTLEDGE: Well, I think that would certainly be a policy shift and something that would be taken up, and over a long period of time these individuals are dangerous and they must be taken seriously.

Certainly, as the chief law enforcement officer of the state of Arkansas, I understand the dangers of individuals, but we must not trample upon anyone's constitutional right. And so I think that that would be a shift from where we are now. And it would have to be carried -- looked at in the court system and whether or not that's the direction that America wants to go.

SCIUTTO: You're an attorney general.

RUTLEDGE: But, again, it's about these individuals being dangerous.


SCIUTTO: You're attorney general. You know the law very well. You're saying there that, to do this, as Donald Trump said he supported, would trample on the rights of American citizens?

RUTLEDGE: That's not what I said.

What I said was that this would be significant shift and it would be something that we would be seeing over time whether or not that's the direction that the courts, that the president, those leaders in the United States Congress and Senate would want to do.

SCIUTTO: Would you support that shift?

RUTLEDGE: That is not a question for attorney general of Arkansas.

SCIUTTO: OK. But you do support the presidential candidate who has just made that position clear?

RUTLEDGE: Well, I support a -- well, let me be clear, Jim.

I support a presidential candidate who respects the Constitution and who will uphold the rule of law. And that individual is Donald Trump. Hillary Clinton has shown us time and again that, although she's a smart lawyer, she does not respect the rule of law. She does not respect the Constitution.

And that, my friend, is what Americans are sick and tired of the same old power brokers in Washington, D.C., trampling over the Constitution, upsetting the rule of law.


We want a candidate, a president who respects the rule of law. And that person is Donald Trump.

SCIUTTO: Leslie Rutledge, please stand by. We have a lot more questions.

We are going to be right back after this short break.


SCIUTTO: Welcome back.

New poll numbers out today show Hillary Clinton leading Donald Trump in critical states.

We're back with Trump supporter and Arkansas Attorney General Leslie Rutledge.

I want to ask you, because, as I'm sure you're aware, Secretary Clinton released her 2015 tax returns today. Those show that she paid about 30 percent in federal taxes.

Do you believe that voters have a right to know what Donald Trump has been paying in taxes?


RUTLEDGE: Well, Jim, I think more important than her tax returns are those 33,000 e-mails that are missing and are deleted that Americans would like to know where all those e-mails are that were on Hillary Clinton's private server in her basement while she was secretary of state.

(CROSSTALK) SCIUTTO: To be fair, that's a separate topic, which I'm happy to ask you about.

But the question I asked was about Donald Trump's tax returns. Do you believe -- you're a public servant. Do you believe that voters have a right to know, if he paid taxes, what tax rate he paid, et cetera?

RUTLEDGE: Well, as Mr. Trump has said, his taxes are under audit, and that he will be addressing that issue when they're no longer under audit.

But Hillary Clinton has absolutely lied and refused to hand over e- mails, had that private server in her basement. We can't say this enough. She was a public servant when she chose to lie to the American people, when she chose to put us at risk by having that server in her basement.


SCIUTTO: On the question of taxes, because that's what we're talking about now.


SCIUTTO: The IRS does not prevent anybody from releasing their tax returns when they're under audit. And the fact is that there's other information that this candidate for president of the United States could release, his tax rate, details about percentage of money or amount of money he gave to charitable -- charitable donations, without releasing the full returns.

Why doesn't he do at least that?

RUTLEDGE: Well, again, I think Mr. Trump has said time and again that his taxes are being audited and that he's not going to release them during this time that they're being audited.

Why aren't we talking about the different tax plans that Donald Trump has about lowering taxes for Americans vs. Hillary Clinton that is increasing taxes, what sort of job growth that we will see on Donald Trump's economic plan that we will not see under the same old failed policies that Hillary Clinton is wanting to have?

That is what Americans care about. Americans care about having a job for themselves and being able to pay their own taxes. They don't care about whether or not Donald Trump or Hillary Clinton paid X-amount of dollars.


RUTLEDGE: What they care about is being able to have a job and support their own families. And they cannot do that under Hillary Clinton's failed policies.

SCIUTTO: You're a public servant in Arkansas. I'm sure you talk to a lot of voters there who work very hard and who pay state and federal taxes themselves.

Why wouldn't they then have a right to know if their public servants are doing it, particularly someone running for president who is doing the same thing that they're doing? It's hard to do. It's hard to pay your taxes.


RUTLEDGE: It is. And it's hard to have a job in this economy of Barack Obama.

And so that's what Americans, that's Arkansans care about, is whether or not they will be able to have a job, to be able to fill out that W- 2 form. That's what everyday Arkansans and Americans care about.

They want to be able to have a job. And they know, under these failed policies of Barack Obama and Hillary Clinton, that jobs are hard to come by, that we need to update our resumes and get back to work. And those are the sort of policies that we see out of Donald Trump. His economic plan that he unveiled was tremendous compared to what we saw by Hillary Clinton wanting to raise taxes, hurting job growth across our great country.

SCIUTTO: Leslie Rutledge, thanks very much for taking the time and for taking the hard questions.

RUTLEDGE: Thank you.

SCIUTTO: Just ahead tonight, more on Donald Trump's mixed messages and a pattern of explaining some of his most controversial comments.


TRUMP: So, I said the founder of ISIS. Obviously, I'm being sarcastic. Then -- then -- but not that sarcastic, to be honest with you.

So I said, the founder of ISIS. Obviously, a bit sarcastic. Then, but not that sarcastic, to be honest with you.




SCIUTTO: Donald Trump is holding rally tonight in Altoona, Pennsylvania, his second campaign stop in the Keystone State today.

Earlier in Erie, he was joined on stage by a surprise guest.

Joining us now, CNN politics editor Juana Summers, CNN chief political analyst Gloria Borger, and CNN senior political analyst Ron Brownstein. He's also senior editor at "The Atlantic."

So, Gloria, we have been following Donald Trump's evolving, shall we say, comments on calling President Obama the founder of ISIS. As you know, he doubled down on founder of ISIS. We woke up this morning to him saying, tweeting that he was being sarcastic. Then he doubled back and said, actually, I wasn't being that sarcastic.

Literally, seconds ago, at a campaign rally, he said, well, I was being somewhat sarcastic on that.

Is there -- do you know what he's saying? That's the simplest question.


SCIUTTO: And does it matter?


And, look, I think it's never -- we don't know what he's -- what he means. At a certain point, you have to stop parsing words. It's never a good idea when you're a presidential candidate for people to have to speculate about what it is you meant to say.

SCIUTTO: On a life-or-death issue.

BORGER: On that kind of an issue, or any issue, for that matter. When you're a presidential candidate, your words matter.

And you have to be clear about what you mean, because people are making decisions about whether they want to vote for you or not.

Now, this may not mean anything to people who are really committed to Donald Trump. And they may blame the media and they may blame everybody else, but, at a certain point, either he's sarcastic or he's not sarcastic.

This has become a pattern over and over again. And, at a certain point, you say, OK, that's Donald Trump. Next question. Right?

[18:30:01] SCIUTTO: Ron Brownstein, I have to ask you, because this is connected to other things here, him saying, using Barack Obama's full name, Barack Hussein Obama, in this context yesterday, going back to the birtherism before. These are connected messages, are they not, to delegitimize President Obama and I suppose by association, Hillary Clinton?

RON BROWNSTEIN, CNN SENIOR POLITICAL CORRESPONDENT: I think there's a very consistent pattern here. It does require you to think about whether there is in Donald Trump's mind a method to what seems like madness in the sense that, you know, most conventional political analysts in both parties would say, the voters that are in the way from where Donald Trump is to where he has to be, tend to be white collar, white voters in the suburbs who polls say their biggest concern about Donald Trump is they don't think he's qualified, they think he's erratic and they think he's racially biased.

And rather than try to reassure those voters, Donald Trump consistently for months, whether it was with David Duke comments, the Judge Curial comments, his comments, original comments about Obama and ISIS, there's something going on here, the Second Amendment comments, he constantly puts out something that is the most inflammatory, divisive that reflects the darkest conspiracy theories and the most conservative vanguard of the Republican coalition and then he backs off.

And, you know, it does suggest to me, after a certain point, you have to say, this is pattern on purpose and he is trying to activate voters who he thinks will respond to that message and kind of bring in these disaffected voters who don't usually vote and he's willing to take the cost of alienating what most analysts in both party would say are the actual swing voters who are preventing him from getting where he needs to be.

SCIUTTO: Juana, we have a tape from just moments ago, Donald Trump at this. Let's play it and I want to get your reaction.


DONALD TRUMP (R), PRESIDENTIAL NOMINEE: So I say, so I've been saying, and I'll keep saying because it's true, but somewhat sarcastically, I've been saying he's the founder of ISIS and I say she's a close second.


SCIUTTO: Are you worried, Juana, about the atmosphere that that collection, really, because this is one in a series of accusations in effect, that collection of statements and accusations makes?

JUANA SUMMERS, CNN POLITICS EDITOR: Yes, Jim, I think that's what's really troubling about this to so many people, is that it's a pattern. If you think back to late July, sarcasm is the crutch that Donald Trump fell on when he said, you know, Russians should hack Hillary Clinton's e-mail, there's an uproar, and then he says, oh, I was being sarcastic, I didn't really mean it.

I think that's what's troubling is this shows, to Gloria's point, that Donald Trump has trouble, many Republicans fear, and being able to talk to the American people. If he's elected president and commander in chief, I think on issues such as these, like terrorism, like ISIS that can be particularly troubling.

SCIUTTO: So, on this issue, because -- and Juana mentions this -- concern in his own party about this. We see today, Reince Priebus, now at two rallies, appearing on stage with him, a very visible hug, repeated. How -- was that a successful attempt do you think to show party unity?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Look, I think it's been an open secret that Reince Priebus, who runs the Republican National Committee, has been privately upset and people knew about it with the fact that Donald Trump did not come out right away and endorse his good friend, Paul Ryan. The Second Amendment issue was very troubling to a lot of Republicans and they made no bones about it. He's hearing from a lot of Republicans. You have this letter with 75 people signing it. You have the national

security people signing another letter.

And so, what Reince Priebus, as the chairman of the party has to do, go out there and say, OK, we are on the same team. Make no mistake about it, because back to Ron's point about mobilizing voters, this is about making sure that your voters get out there, and there cannot be any confusion if you're a Republican about who you vote for and, by the way, what Reince Priebus is also doing is helping the down ballot right now, because people don't split tickets very often. We'll see if that happens in this election. But he's saying to them, you know what, vote Republican all the way down the ballot because we're trying to save --

SCIUTTO: Trying to save some ground.

BORGER: Exactly.

SCIUTTO: But, Ron, I want to ask you about that, because clearly, it's a concern because you have the Senate majority leader, Mitch McConnell, say as much. He said chances of him holding his seat, quote, "very dicey".

BROWNSTEIN: Yes. Well, look, in fact, they are, because we know we have four decades in which split ticket balloting has been declining really consistently since the 1970s. And Republicans have to reverse that this year. And to some extent, they have already cut loose Donald Trump, because when you talk to Senate candidates, it's clear that Republican Senate candidates around the country, when they identify voters who are anti-Trump but pro the Senate candidate, pro- Ayotte, pro-Toomey, pro-Portman, pro-Ron Johnson, they are going to turn out those voters, even knowing that they are voting against Donald Trump at the top of the ticket.

So, he's already kind of on his own in the way. And just one other point, in my column this week, I went back and looked at in quite detail, the level of Republican defection over Barry Goldwater, when he was the nominee, to compare it to now, which is I think the previous example of the biggest fissures within the party once the nominee had been chosen.

[18:35:09] And there's no question there's more open dissension today than there was even then.

If you go back to 1964, Dwight Eisenhower and Richard Nixon, for example, privately may have had their doubts about Barry Goldwater, but they campaigned for him. And Eisenhower cut an ad for him.

It's in stark contrast from what you're seeing from the other Republican former nominees and it was nothing quite as pointed as that letter this week from 50 national security officials saying they -- you know, basically not that they disagree with the quality but he doesn't have the personal qualifications to be president is exactly those sort of concerns that he's exacerbating with this kind of very inflammatory language. And yet, he keeps doing it, which again I think you have to go past the point of saying this is just random or impulse control. There may be something he's trying to do here.

SCIUTTO: OK, Ron, Juana, Gloria, stay right there. We have a lot more questions to address. We'll be back right after this short break.


[18:40:41] TAPPER: Well, pressure is growing on Republican presidential nominee Donald Trump to make his tax returns public. His Democratic rival has just released hers. They showed that Hillary and Bill Clinton made more than $10 million last year, much of it from speaking engagements.

Meanwhile, there are growing concerns about Clinton's chief of staff while she was secretary of state.

CNN senior investigative correspondent Drew Griffin, he's been working the story for us.

Drew, as you look at this, is there evidence of conflicts of interest?

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Well, there's not evidence of conflict of interest but certainly the appearance, Jim. And that's the problem here.

The pledge from Hillary Clinton upon entering the secretary of the state's office at that time was that she would keep State Department and Clinton Foundation business completely separate. The reason was simple. The foundation raises money from across the world, from governments and from many, many companies that have businesses across the world. A lot of those companies and foreign entities also paid and pay her husband Bill Clinton to give speeches.

So, the Obama administration wanted to avoid any possible conflicts of interest.

Now, we're learning that Hillary Clinton's top aide at State, Cheryl Mills, in 2012, was taking part in Clinton Foundation business while still working there at the secretary of state's office. She was volunteering her time to interview two potential candidates for the position of the director for the Clinton Foundation. On top of that, earlier this week, we've seen newly released e-mails that also show intermingling between Hillary Clinton's State Department staff and the Clinton Foundation.

All of this raising the appearance of what the Obama administration wanted to avoid, which is that conflict of interest. The Clinton campaign, Jim, we should say, they had a pretty strong response saying Cheryl Mills was just volunteering her time and the idea there was a conflict of interest, quoting here now, "is absurd" -- Jim.

SCIUTTO: Well, Drew, CNN also learned that the FBI and Justice Department officials, they met to discuss opening a possible corruption case into the Clinton Foundation.

How serious was that potential effort? GRIFFIN: Well, this appeared to be pretty serious at the time. It

took place months ago. We're finding about it from a government official. And it appears the FBI was looking into a case involving a foreigner. And he had given money to the Clinton Foundation. A bank thought it was suspicious and reported this.

We're told now that at least three different Justice Department field offices all came to the conclusion that there should be an investigation launched. But higher up of the Justice Department took a look at the evidence, decided it was not enough and came to the conclusion the case was more political in nature than substantive, so there was no investigation -- Jim.

SCIUTTO: Those always judgment calls. Drew, thanks very much for looking into that.

I want to bring back our panel now.

Juana, another likely e-mail server, self-inflicted wound here you can say on the Clinton Foundation. But you did have the DOJ looking into the investigation, they pulled back from it. But what's the potential that this could percolate again in the last than three months we have before the general?

SUMMERS: I think that's exactly the worry a lot of Democrats have, that if there's something new that comes out, even if there's no wrongdoing found, just the specter of these controversies hanging over Clinton's campaign, and this issue around emails, as you know, they've been several that has dogged her campaign for the last 18 months. I think this could be toxic to her perception among voters.

Hillary Clinton, much like Donald Trump, has deeply low unfavorabilities. Majority of voters say that they don't view her as honest and trustworthy. This can't help.

SCIUTTO: This, Gloria, as you know was Trump's campaign response in effect to the releasing of the tax returns today, saying what people really want to know, they want know about pay for play, et cetera. That's a strategy he will stick with.

BORGER: Well, look -- and that's what Donald Trump should be talking about, honestly. You know, he needs, look, he doesn't have great trust numbers. She doesn't have great trust numbers. He has to convince people that he's not risky and that they trust him more than they trust her.

How do you do that? You talk about the Hillary Clinton e-mails.

You know, the problem with all of these stories is, very often, and we all know this as journalists, when you cover these conflict of interest stories, it's as much about the perception of a conflict of interest as it is about a conflict of interest. Just -- you know, this is something the Clintons should have known about. It adds to the narrative that they play by a different set of rules and on and on and on. So, I think what a lot of Republicans are pulling their hair out about

is that they don't want to be talking about anything other than this. So, him responding to the taxes are e-mail, fine. You know, fair game.

But they want to focus on Hillary Clinton. But they want focus on that narrative. They don't want to really move off of it and the problem with Donald Trump is that he keeps getting off that central message. And, by the way, he ought to be talking about jobs and the economy and everything else.

SCIUTTO: So, Ron, perhaps sensing an opportunity here, Hillary Clinton is just tweeted the following. "Many people are saying", the tweet says, "Trump won't release his tax returns because he's hiding something. What do you think it is?" Of course, "many people are saying" is they favorite expression of Donald Trump when he's putting sometimes specious information out there.

Workable response?

BROWNSTEIN: Well, look, I mean, I think Clinton clearly has major vulnerabilities on all of these issues around ethics and trust. I mean, the overwhelming message of the past year and a half has been that Clinton world with all of the complex solar system of Clinton world, with all these institutions and all of these allies and friends and hangers on simply did not have a clear enough sense of the guardrails or enough respect for the rules. And that is something that will have to be substantially operate, substantially different that it has, you know, in the last six years.

But I do think -- I mean, I disagree a little with some of the analysis before, because I don't think that Donald Trump can overcome Hillary Clinton's lead solely by creating more doubts about Hillary Clinton. Most electorate already is unfavorable to her. Most in the electorate says they can't trust her.

The problem he's got is that voters do see her as qualified to be president, and 60 percent of voters don't see him as qualified to be president, and also, about 60 percent say he's biased against women and minorities. I think as long as those twin perceptions are there, particularly among these white college educated voters who usually vote Republican but are leaning toward her, I don't think raising more doubts about Hillary Clinton solves that problem.

He ultimately has to resolve the doubts about himself. And, you know, he's had 14 months to do it. Whether you can undo it in 12 or 14 weeks is another question.

BORGER: You know, I don't disagree with you, you know, Ron, at all, but I think that she's going to try and use -- talk about him as a risk and he doesn't have the temperament and what he is doing with everything he's done over the last week or so, is not make his case any better for he fact that he's temperamentally to be suited to be commander in chief when people are parsing his words, right? I'm not sure he can overcome his own negatives. I'm not sure she can overcome her own negatives. So, they have to take it to a different turf that appeals with --

SCIUTTO: We're going to have to leave it there tonight, Ron.

Gloria Borger, Juana Summers, Ron Brownstein, thanks very much.

Just ahead, would Donald Trump issue an illegal order and put Americans on trial at Guantanamo Bay?


UNIDENTIFIED FEMALE: Would you try to get the military commissions to trial court there to try U.S. citizens?

TRUMP: Well, I know they want to try him in our regular court systems. I don't like that at all. I don't like that at all. I would say they could be tried there. That would be fine.



[18:52:42] SCIUTTO: He's called for waterboarding terror suspects and killing relatives of terrorists, now Donald Trump is saying that he is fine with another action specifically prohibited by U.S. law. That is trying American citizens at Guantanamo Bay.

CNN's Pentagon correspondent Barbara Starr, she's been working the story for us.

Barbara, to be clear, all these actions that he's proposing, they would be against the law.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: They currently are very much against the law, Jim.

You know, there's been talk in the past about bringing Guantanamo detainees to the U.S. for trial. Donald Trump now talking about sending American citizens to Guantanamo Bay, when they are charged with terrorism. As you say, just one problem -- it's not legal.


STARR (voice-over): Donald Trump has new thoughts on how, if elected, he might send U.S. citizens accused of terrorism to the military prison at Guantanamo Bay.

INTERVIEWER: Would you try to get the military commissions, the trial court there, to try U.S. citizens?

TRUMP: Well, I know that they want to try to him in our regular court systems and I don't like that at all. I don't like that at all. I would say, they can be tried there. That would be fine.

STARR: The law that created military commissions specifically exempts U.S. citizens from being tried at Gitmo, military experts say.

RACHEL VANLANDINGHAM, SOUTHWESTERN LAW SCHOOL: So, Mr. Trump would have to work with Congress to establish different laws.

STARR: Would that work?

VANLANDINGHAM: That would be constitutionally suspect. Why? Why would it be a suspect? It's because current U.S. courts are fully capable and open and available to provide the full panoply of U.S. constitutional guarantees.

STARR: Some of Trump's ideas, including the possibility of bringing back waterboarding are raising critical questions about the authority of the president to order troops to carry out actions which violate U.S. law.

Simply put: the U.S. military has a duty to disobey illegal orders even when they come from the president.

VANLANDINGHAM: The military adherence to civilian command and control is a bedrock principle of the U.S. military. However, the U.S. military swears to protect and defend the U.S. Constitution, first and foremost.

STARR: But Trump says he expects to be obeyed by the troops even on waterboarding.

TRUMP: They won't refuse. They're not going to refuse me. Believe me.

STARR: A former military lawyer says Trump should be refused.

VANLANDINGHAM: There is no moral dilemma of a military member to think, well, maybe this is actually lawful.

[18:55:04] No, it's illegal.

STARR: General Joseph Dunford, the chairman of the Joint Chiefs, has stayed out of the political fray. But even he has made clear some ideas are out of bounds.

GEN. JOSEPH DUNFORD, JOINT CHIEFS CHAIRMAN: One of the things that makes me proud to wear this uniform is that we represent the values of the American people. That is what we have done historically. That's what we expect to do in the future. Again, that's what makes me proud to wear this uniform.


STARR: Military experts say if U.S. troops were to obey illegal orders, it could open them up to criminal prosecution, even to international tribunals. So, what are their options? Disobey the order and try and get their new boss to change his mind or even top commanders contemplate resignation -- Jim.

SCIUTTO: Barbara Starr at the Pentagon.

I want to dig deeper now. CNN national security analyst Mike Rogers, he's the former chairman of the House Intelligence Committee. He is also, I should say, a volunteer adviser to the Trump transition team.

So, this is a remarkable hypothetical here, right? If he's elected, he follows through on these proposals which are currently against U.S. law. You've been in the middle of this. Would these proposals create a crisis in command?

MIKE ROGERS, VOLUNTEER ADVISR TO TRUMP TRANSITION TEAM: It's a little shocking to me at the certainty that it's illegal. First of all, the Padilla versus Bush case showed very clearly that the United States can declare a United States citizen an enemy combatant. That's up to the president of the United States. The court gives huge leeway.

Now, if I were in the room I would aren't recommend he do that, but to say this is illegal is factually inaccurate. You might want to change that roll.

SCIUTTO: What about on other issues? I mean, killing the relatives of terrorists and bringing back waterboarding, would commanders openly defy the commander-in-chief with this?

ROGERS: And you all know how this is going to happen, and they're going to walk in his team of advisers, including his military and say, here are your options. Here are your legal options. These are your choices.

And that's why this gets so fuzzy and hazy. Even Barack Obama kept a list of enhanced interrogation techniques that he could use as an option. He didn't take them off the table. Now, he didn't decide to use them. I think that was full and appropriate. I'm a FBI guy, and I'm a big rapport building and interviewer, but at the same time, that's why this is so hazy, this mad rush to this is illegal and he's going to be crazy as president, I think probably very effective for the other campaign.

I will tell you that's not the way it's going to work, and it is not blatantly illegal. If the president said that these five people are enemy combatants, they can then be handled under the law of war. One of the options could be and remember, Padilla -- this happened about 2002, Bush actually had him detained under the laws of war as an enemy combatant. That's what created the court case.

The court case said the president has a right to do it, but they have the right to fight it. That was -- it was really a fascinating case. So, it's not illegal, I don't -- and I cannot imagine any military officer walking into the office of the president, I don't care who it is, saying, "I'm recommending you do these three illegal things." Not going to happen.

SCIUTTO: On another topic. Your continuing series, "Declassified", we've got another new episode coming up, I want to play our viewers a quick clip of that and then I want to get your thoughts on that. Have a listen.


UNIDENTIFIED MALE: When an undercover is doing his or her job properly, they're operating on different levels simultaneously. The first level is we're being cognizant of the cameras and microphones so that the right people are facing the right camera at the right time.

UNIDENTIFIED MALE: Would you gentleman like to drink tea or coffee or whatever you want to?

UNIDENTIFIED MALE: Another level where you see is working is performing for the primary audience. That's the suspect.

UNIDENTIFIED MALE: Whatever you want to drink, we'll have the people downstairs make it.

UNIDENTIFIED MALE: It is consistent with my role to be as charming as possible. Every case might be very different. I have, on occasion done the exact opposite and tried to raise someone's anxiety level when it served a purpose.

UNIDENTIFIED MALE: The work of an undercover is similar to that of a high-priced call girl. I am what you want me to be.


SCIUTTO: So, an Iranian plot to buy American military weapons.

ROGERS: Yes. It's pretty exciting case. So, lots of international intrigue, lots of cloak and dagger. The homeland security agent had to set up a company overseas that was interested in selling this Iranian who had already expressed trying to purchase this stuff and it had to move around and it was multinational, trying to catch the Iranians buying very sophisticated U.S. military hardware that they can take back and deploy against U.S. troops. Pretty story.

SCIUTTO: It sounds like Abscam, and clearly a great one.

Well, be sure to join Mike Rogers this Sunday. He's going to look at the undercover sting of a international arms dealer threatening American troops and a mission that's been secret until now.

"DECLASSIFIED: UNTOLD STORIES OF AMERICAN SPIES", that airs on Sunday night at 10:00 Eastern, only here on CNN. I'm Jim Sciutto. Thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.