Return to Transcripts main page

CNN Newsroom

Donald Trump's October Surprise; NYT Receives Some of Trump's Old Tax Documents; "Saturday Night Live" Takes on the Presidential Debate; Bernie Sanders Supports Clinton's Statements on Millennials; Hurricane Matthew Targeting Haiti and Jamaica. Aired 3-4p ET

Aired October 02, 2016 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(COMMERCIAL BREAK)

[15:00:21] FREDRICKA WHITFIELD, CNN ANCHOR: Hello again, everyone and thank you so much for joining me. I'm Fredricka Whitfield.

There we're just two days into the month and we already have what could be the first October surprise of the presidential campaign. The "New York Times" saying it received some of Donald Trump's decades old tax documents in the mail. CNN has not been able to independently corroborate the documents' authenticity but here are some of the takeaways.

The report shows Trump declared a nearly $1 billion loss in 1995. Tax experts who the "New York Times" talked to say that kind of loss could allow him to legally avoid paying taxes for almost two decades. Both campaigns are responding and we'll get to that in a moment.

First, let's break down what is in the report. We have correspondents covering all of the angles with CNNMoney Correspondent Cristina Alesci and CNN Correspondent Chris Frates.

So, Cristina, let's begin with you. What's in this report?

CRISTINA ALECSI, CNNMONEY CORRESPONDENT: What's in this report is one really big, really headline grabbing number. And what this is doing is that we have this number and we have a whole lot of questions about this number to set off a frenzy with reporters trying to figure out what all this means and now tax experts are beginning to weigh in on what this potentially can mean for Donald Trump. In the meantime, we are focusing on this $916 million. Take a listen.

(BEGIN VIDEO CLIP)

ALECSI: Here's what the "New York Times" is reporting. Trump declared a loss of $916 million in 1995. And that loss could be used to cancel taxable income for potentially up to 18 years, according to tax experts the paper hired. Key details are still missing because the "New York Times" doesn't have Trump's complete tax returns. And CNN can't confirm the authenticity of the documents the paper does have. But the report means even if Trump made $916 million in the years after 1995, he could potentially have paid little or no taxes on that income. How is that that possible? It all comes down to something called net operating loss. According to the "Times," when a business has more tax deductible expenses than income, you end up with what the IRS calls a net operating loss. Now, people might be asking, if Trump could write off such a large loss over so many years, why can't I do this?

Most people are familiar with the different type of deduction, capital losses. Typically, these are tied to stocks, bonds and other investments and there are different rules for those and limits on how you can use them. With Trump, we're most likely talking about a loss from operating a business, which according to the IRS is the most common reason for a net operating loss. If Trump had much of his wealth tied up in businesses, any losses in those businesses might flow directly to him so he could use them to reduce his own tax bill in future years. It's important to keep in mind that the tax code allows you to do this.

The Trump campaign responded saying the candidate paid hundreds of millions of dollars in other taxes, including property and real estate taxes. But it didn't directly denied the "Times" reporting on the federal income tax. And Trump himself responded to the report with this tweet. "I know our complex tax laws better than anyone who has ever run for president and I'm the only one who can fix them," #failingatNewYorkTimes.

I spoke to the accounting side in the "Times" story. He took issue with the story because Trump's income in subsequent years isn't public.

So does this tell us that Trump lost all of this money only in 1995? The answer is no. Almost $1 billion is a lot of money to lose. We don't know exactly what happened and when it happened. We do know that his businesses were hurting in the early 1990s, Taj Mahal in Atlantic City, the Plaza Hotel in New York, for example. Operating losses from those businesses could have been listed on his tax returns earlier in the 1990s. And then, he could have carried them over to 1995. But we actually don't even know if he used these losses to offset income in later years. The tax law says he could have but without the returns from those later years, we can't know for sure.

The big question is, do these documents help us understand how much Donald Trump is really worth? Again, the answer is no.

(END VIDEO CLIP)

ALESCI: So on this question, on what Donald Trump is really worth, the campaign puts out a figure of $10 billion, Forbes analysts puts his net worth closer to $3.7 billion, Bloomberg says $3 billion. And it's unlikely that any additional tax information that's either released or leaked will give us a very clear picture of his net worth. What it will give us is an idea of how much he makes a year, his charitable donations and possibly shed some light on how he does business. Fredricka? [15:05:23] WHITFIELD: All right, Cristina Alecsi, thanks so much. We'll talk again on the next hour. All right, let's bring in Chris Frates now in Washington.

So, Chris, we saw Trump's tweet. Has there been another formal response from the campaign?

CHRIS FRATES, CNN CORRESPONDENT: Yeah, Fred, there has. And as Cristina pointed out, you know, the Trump campaign is not disputing the accuracy or the facts in that "New York Times" story. But they did put out a statement today calling the "New York Times" and the media generally, an extension of the Clinton campaign. That statement went on to attacked Clinton before. You know, finally arguing that Trump had a fiduciary responsibility as a businessman to pay no more tax than he's legally required to.

Now remember, during the debate last week, Trump made a similar kind of argument essentially saying that, you know, he was smart not to pay taxes. And in a statement today, the campaign said this, "Mr. Trump knows the tax code far better than anyone who has ever run for president and he is the only one that knows how to fix it. The incredible skills Mr. Trump has shown in business are the skills we need to rebuild this country."

Now, it's a version of an answer we've heard before from Trump, namely that he knows how to work the system so much better than everybody else, that he's the only one that can fix it. And he used that same explanation during the primaries when reporters and his opponents asked, you know, why did you give money to a Democratic politician and politicians if you're a Republican. And he said look, I was just playing the game and I'm the only one who can fix this rigged system.

So, we've heard this kind of explanation before, Fred. So, he kind of played it again today with the tax question.

WHITFIELD: And then what's the response from Hillary Clinton's camp?

FRATES: Yeah, well not surprisingly here, right, Fred, the Clinton campaign jumped all over this. They've been pressuring Trump for months to release these tax returns so they jumped on this story.

And in a statement we heard from Clinton campaign manager Robby Mook and he said, "This bombshell report reveals the colossal nature of Donald Trump's past business failures and how long he may have avoided paying any federal income taxes whatsoever. In one year Donald Trump lost nearly $1 billion. He stiffed small businesses, laid off workers, and walked away from hardworking communities. He apparently got to avoid paying taxes for nearly two decades while tens of millions of working families paid theirs."

And he ends on that statement calling on tax -- calling on Trump once again to release his taxes. So I don't expect that this is a storyline that the campaign is going to let go any time soon, Fred, especially as we start to see these debates in just another week.

WHITFIELD: Yeah, that's right. All right, thank you so much, Chris. And of course the vice presidential debate just about two days away.

All right, so this morning, the "New York Times" reporter who broke this story spoke with CNN's Brian Stelter. Here's a part of the interview with reporter Susanne Craig.

(BEGIN VIDEO CLIP)

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: So you received this envelope in the mail. What were the three pages inside and what do they tell us about Trump's records of taxes?

SUSANNE CRAIG, N.Y.TIMES GOVERNMENT AND POLITICS REPORTER: There was three pages and they tell us in short there was a very large number with a negative in front of it and it was his net operating loss and that number told us in short that he had racked up enough losses over the years to essentially move that forward into future years and be able to reduce his taxable income to zero so he wouldn't have to pay taxes potentially. We haven't obviously seen the future returns to see what he did with it but it gave him almost $1 billion of leeway in which he could have income but he wouldn't have to pay taxes on.

STELTER: Or you have to -- you have to make a lot of assumptions to get to this point where you can say he may not have paid federal income taxes for many years.

CRAIG: Well, you could say that he had this thing, this number that he could carry forward and unless he didn't use it pretty safe to say for at least several of the years he did enough to $1billion in taxable income. It's extraordinary.

STELTER: And at first you weren't sure these documents were real, what did you do to verify them?

CRAIG: We got a group of people together. I went over and talked to a colleague of mine who have been working on tax reporting with David Barstow. And we got a group of reporters together. And we -- first of all we sort of had two tracks, one is let's try and verify them and two, let's just see what they are in trying to dissect it. You know, obviously there was large concern that they weren't real. We just -- we had no sort of solid where did they come from ...

STELTER: So you thought someone might be trying to trick you, dope you?

CRAIG: They could have been very much so, and that's why we wanted to verify it and just do some good old fashioned reporting.

STELTER: I've been asking -- and so eventually you reached out to his former accountant basically, right?

CRAIG: Tax returns are hard to verify.

STELTER: Yeah.

CRAIG: There's only a few people who could verify them. The signatories on it were Marla Maples, Donald Trump and Jack Mitnick, who is his former accountant. And David Barstow, my colleague who one of the reporters that I worked with on the story went down to see Jack and had a long discussion with Jack about the taxes. And Jack Mitnick said they are legitimate.

[15:10:12] STELTER: In other words, when you see a story like this on the front page of the "Times," weeks of work had to go into checking this out. Let me show you what Fox news said about this early this morning and then get your reaction.

UNIDENTIFIED FEMALE: A bold move from the "New York Times" trying to take down Donald Trump with a front page story claiming that he has not paid taxes in years. But the evidence and how they got it raising a lot of questions this morning.

STELTER: Raising a lot of questions. So Fox had some doubts about your sourcing but they also said you're trying to take down Donald Trump. Is that what you're doing?

CRAIG: I think that his taxes, his running for president and whether or not he's paid taxes or not, it's an incredibly important issue. There's pressure on him to release his tax returns. I think it's called reporting, I mean, it's simple as that.

STELTER: Do you think Fox doesn't understand that?

CRAIG: I think that, I guess they have an opinion. I mean, we think that we're doing our jobs and part of that is to look for things like Donald Trump's taxes and to find indications whether he's paid taxes or not. I mean, this was -- it's an important issue and I think that that's sort of what we do.

STELTER: There was a legal threat from the Trump organization before you all published the story. I've been asking the Trump campaign this morning if they are going to follow through. They haven't replied to those questions. Are you expecting legal action?

CRAIG: I don't know. I don't think it's a crime to check your mailbox. And that's what we did and then we did some reporting. So, but, we definitely -- they told us that they may sue and we are comfortable with the story and went ahead with it.

STELTER: Are you sitting on more documents?

CRAIG: We're doing a lot of reporting around this, so we're going to keep going.

STELTER: That's a yes. You have more documents besides the three.

CRAIG: That may be a no comment.

STELTER: A no comment. And who do you think sent the documents? The return address was Trump Tower, that doesn't mean they definitely came from Trump Tower does it?

CRAIG: No, it doesn't, obviously, because they could have come from any number of sources. STELTER: Do you know who?

CRAIG: Again, a no comment.

(END VIDEO CLIP)

WHITFIELD: All right, that was Susanne Craig with the "New York Times" talking with our Brian Stelter. We'll have much more on Donald Trump and the report of these taxes straight ahead.

Also, "Saturday Night Live" is back. Could a political satire have an impact on the presidential race?

(BEGIN VIDEO CLIP)

KATE MCKINNON, AMERICAN COMEDIAN, AS HILLARY CLINTON: Listen, America, I get it, you hate me. You hate my voice and you hate my face. Well, here is a tip, if you never want to see my face again, elect me president and I swear to God I will lock myself in the Oval Office and not come out for four years. But if you don't elect me, I will continue to run for president until the day I die. And will never die.

(COMMERCIAL BREAK)

[15:15:53] MCKINNON: I mean, this man is clearly unfit to be commander-in-chief.

ALEC BALDWIN, AMERICAN COMEDIAN, AS DONALD TRUMP: Wrong.

MCKINNON: He is a bully.

BALDWIN: Shut up.

MCKINNON: He started the Birther Movement.

BALDWIN: You did.

MCKINNON: He says climate change is a hoax invented by China.

BALDWIN: It's pronounced "gina."

(END VIDEO CLIP)

WHITFIELD: OK, that was the match that so many people have been waiting for, Kate McKinnon as Hillary Clinton, Alec Baldwin as Donald Trump.

So, how did all go down? Here's CNN's Jessica Schneider with a look at last night's season premiere of "Saturday Night Live."

(BEGIN VIDEO CLIP)

BALDWIN: My microphone is broken.

JESSICA SCHNEIDER, CNN CORRESPONDENT: Alec Baldwin posing with a pout and flaunting on a toupee to channel Trump.

BALDWIN: Can you hear that? I'm speaking up. Somebody's sniffing here. I think it's her sniff. She's been sniffing all night. Testing. Testing.

SCHNEIDER: The 16-time record holding SNL host taking over Trump to the new season, Baldwin bringing up Trump's Twitter tirades.

BALDWIN: I'm going to set me alarm for 3:20 a.m. I'll go sit on my golden toilet bowl and tweet about it until completion.

SCHNEIDER: And his off-color remarks from last week's debate.

BALDWIN: We should be talking about the important issues like Rosie O'Donnell and how she's a fat loser.

SCHNEIDER: The election cycle long providing SNL with plenty of fodder for its comedy, from Tina Fey as Sarah Palin ...

TINA FEY, AMERICAN COMEDIAN, AS SARAH PALIN: And I can see Russia from my house.

SCHNEIDER: ... to Will Ferrell as George W. Bush.

WILL FERRELL, AMERICAN COMEDIAN, AS GEORGE W. BUSH: Strategery.

MCKINNON: Hey, bartender, keep them coming.

SCHNEIDER: This season Kate McKinnon will reprise her role as Hillary Clinton to battle Baldwin's Trump.

MCKINNON: He hasn't released his tax returns which means he's either not that rich ...

BALDWIN: Wrong.

MCKINNON: ... not that charitable ...

BALDWIN: Wrong.

MCKINNON: ... or never paid taxes in his life.

BALDWIN: Warmer.

KENAN THOMPSON, AMERICAN COMEDIAN, AS STEVE HARVEY: Secretary Clinton, what do you think about that?

MCKINNON: I think I'm going to be president.

SCHNEIDER: But it wasn't just Baldwin bearing the brunt of the ridicule, McKinnon mocked Clinton's relentless debate prep and ruthless presidential ambition.

MCKINNON: Listen, America, I get it, you hate me. And you hate my voice and you hate my face. Well, here is a tip, if you never want to see my face again, elect me president and I swear to God I will lock myself in the Oval Office and not come out for four years. But if you don't elect me, I will continue to run for president until the day I die. And I will never die.

SCHNEIDER: And McKinnon showcased Clinton's now signature shimmy.

MCKINNON: Not a response, more of a request. Can America vote right now?

SCHNEIDER: It wasn't just the candidate's lampoons.

DARRELL HAMMOND, AMERICAN COMEDIAN, AS BILL CLINTON: We're just getting acquainted.

SCHNEIDER: Just about everyone in the political realm this season took a hit, including Trump's three oldest children.

MARGOT ROBBIE, AUSTRALIAN ACTRESS, AS IVANKA TRUMP: What an interesting and wonderful question, Steve. May I ask my brothers for help?

THOMPSON: They're not here.

UNIDENTIFIED SPEAKERS: Yes, we are.

THOMPSON: Who is this?

MIKEY DAY, AMERICAN COMEDIAN, AS DONALD TRUMP JR.: I'm Donald Jr., the brains.

ROBBIE: I'm Ivanka, the beauty.

ALEX MOFFAT, AMERICAN COMEDIAN, AS ERIC TRUMP: And I'm Eric.

SCHNEIDER: An unprecedented election cycle.

BALDWIN: It is over. Good night, Hofstra.

SCHNEIDER: Sure to continue providing plenty of comedy on Saturday nights.

Jessica Schneider, CNN, New York.

(END VIDEO CLIP)

WHITFIELD: All right, let's talk more about this with CNN Entertainment Analyst Chris Witherspoon.

Good to see you, Chris. So, did they nail it?

CHRIS WITHERSPOON, CNN ENTERTAINMENT ANALYST: I think they definitely nailed it. I mean, the numbers don't lie. NBC put out a press release said this is the highest rated premiere in the past eight years, since eight years ago ...

WHITFIELD: Wow. WITHERSPOON: ... when Sarah Palin was on -- I mean, when Tina Fey was on as Sarah Palin. I think that the show is this -- it has an all- star cast right now, this young cast, very fresh, and it's very poignant and very topical. The debate was highly watched but I think a lot of eyeballs were -- a lot of folks were waiting for this debate to happen on SNL.

[15:20:10] I called Alec Baldwin the most talented non SNL cast member ever. He's so brilliant. He's hosted 16 times but he's so comfortable doing this. And you can watch him, you can see him as Donald Trump but he's done his homework.

WHITFIELD: Yeah.

WITHERSPOON: He told Lorne Michaels he didn't think he had a Trump in him but he clearly does.

WHITFIELD: OK but isn't the genesis of this that somehow it came from a conversation that Alec Baldwin and Tina Fey had. I mean ...

WITHERSPOON: Yes.

WHITFIELD: OK, do you know -- have any insight scoop as to whose idea this was?

WITHERSPOON: Yes, so Tina Fey and Alec Baldwin are friends. They've, you know, collaborated several times. But Tina Fey did say she thought he could do it. She was talking to Lorne Michaels this summer at an event and told Lorne Michaels, I think Alec Baldwin should play, you know, Donald Trump. And clearly he had it in him. He told, you know, Lorne Michaels he couldn't do it but he was brilliant at it.

And I think that we've seen Tina Fey, you know, as the genius, you know, embodying Sarah Palin. Who can forget that clip the first time, "I can see my -- I can see Russia from my house."

WHITFIELD: Right.

WITHERSPOON: You know, that -- some people say that actually changed the election eight years ago. Sarah Palin never ever would have said that. But again, it's one of those moments where SNL was kind of able to catch this moment in political culture and make it something that everybody talks about.

WHITFIELD: So we know it has a powerful punch as it pertains to, you know, entertainment.

WITHERSPOON: Yes.

WHITFIELD: But the real question, you know, very important question in the world of politics is, is this powerful enough of a shtick to actually influence who ends up in the White House?

WITHERSPOON: Well look at like this, we still have about four more episodes of SNL left. We had 5.8 million viewers watched last night. And this demographic that watches the show might not be the folks who are tuning in to watch the 24-hour news cycle of cable news kind of, you know, dissecting what's sill in the campaign trail.

So it does have this audience that does watch these clips. They're watching the viral footage that they create. And who knows what we're going to see in the next four weeks, you know. So I definitely think that over the past history of SNL, they've made impacts on the election cycle and it will happen again this year for sure.

WHITFIELD: OK, and SNL's weekend update also got into the act this way.

(BEGIN VIDEO CLIP)

COLIN JOST, AMERICAN COMEDIAN: Well, the first presidential debate is over and it's official, we still have to choose between Hillary Clinton and Donald Trump. It's like choosing a phone right now. There's really only two options. We don't want the iPhone 7 because it feels like it's kind of being forced on us. Also, it's not necessarily an improvement. But we also don't want the Samsung Galaxy that's going to explode at any minute.

(END VIDEO CLIP)

WHITFIELD: OK so now if you're Hillary Clinton or Donald Trump, you want to take any guesses as to what they're feeling like today after seeing all these clips? And maybe they stayed up and lock ...

WITHERSPOON: I don't know, I've been staying glued to my Twitter feed waiting for Donald Trump to say something or Hillary Clinton, they said nothing. But I mean, they have to be, you know, kind of in awe. I mean, it was a great show. I don't think that, you know, Alec Baldwin went as hard as he could or as deep as he could. I saw "Washington Post" that he didn't dive too deep into Trump. So I think that they'll be watching in weeks to come as we all will.

WHITFIELD: Yeah. Maybe they're gauging the audience ...

WITHERSPOON: Yeah, totally.

WHITFIELD: ... in order to see what to do next, like you said four more weekends potentially of new material.

WITHERSPOON: Yes, I'll be watching.

WHITFIELD: All right, Chris -- yeah, I know you will. Chris Witherspoon, thank you so much. We'll all be watching. Appreciate it.

All right, meantime, Trump's surrogates are defending his business practices after that "New York Times" report that Trump may not have paid federal taxes for decades. We'll hear from Rudy Giuliani next.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, SENIOR ADVISER TO TRUMP: The reality is he's a genius. What he did was he took advantage of something that could save his enterprise and he did something we admire here in America. He came back.

(COMMERCIAL BREAK)

[15:27:32] WHITFIELD: Donald Trump's surrogates are defending their candidate, reacting to the "New York Times" report on Trump's taxes. The article says he lost nearly $1 billion in 1995 and could have avoided paying federal income taxes for nearly two decades. Here's what Rudy Giuliani, a senior adviser, told CNN's Jake Tapper on State of the Union.

(BEGIN VIDEO CLIP)

GIULIANI: I mean the reality is that most Americans take advantage of every deduction available to them.

JAKE TAPPER, CNN ANCHOR: Most Americans pay federal income taxes though, sir. And Donald Trump apparently did not.

GIULIANI: No. Just a little bit over most Americans pay federal income taxes.

TAPPER: Yeah, a majority of the American people pay federal income taxes.

GIULIANI: And very large businesses very often take advantage of these kinds of losses.

TAPPER: Do you pay federal income taxes?

GIULIANI: Jake, Jake?

TAPPER: You're a successful businessman, do you pay federal income taxes?

GIULIANI: Well that's between me and my accountant and the IRS. And the reality is, I pay my lawful tax. And he paid his lawful tax.

TAPPER: Well let me ask you another question sir, Donald Trump is ...

GIULIANI: And, Jake -- no, no, no, Jake, wait a second. This is really very unfair. If he didn't take advantage of those tax deductions or tax advantages that he had, he could be sued because he is -- his obligation as a businessman is to make money for his enterprise and to save money for his enterprise. It would have been insane ...

TAPPER: Sued by whom?

GIULIANI: ... for him not to take the advantage of it.

TAPPER: Who would sue him for his own personal income taxes?

GIULIANI: Investors in his business, people who loan money to his business.

TAPPER: But let me ask you, sir, he's selling himself as a brilliant businessman, he lost almost $1 billion in 1995.

GIULIANI: Correct.

TAPPER: That doesn't sound particularly brilliant to me.

GIULIANI: Well yes, it does since he came back and he came all the way back, and isn't that the history of America? I mean, people like Steve Jobs were fired -- was fired by Apple and came all the way -- then came all the way back. Churchill was thrown out of office twice and came all the way back. It shows what a genius he is. It shows he was able to preserve his enterprise and then he was able to build it. And the idea that he can carry it forward for 18 years means that in no time in 18 years did he make $916 million. And of course, we know last year he made $685 million. We know that from his financial disclosure ...

TAPPER: And he hasn't released his tax returns. The only reason we know anything about this is because somebody released this to the New York -- somebody's leaked this information.

GIULIANI: No, we know that he made $680 million last year from his 104 page financial disclosure form ...

TAPPER: All right, Mr. Mayor ...

GIULIANI: ... which describes considerably more about his finances than the tax return. And the reason ...

[15:30:08] TAPPER: He's the first major party nominee since 1976 to not release his tax returns. If you're proud of that that's great, but it -- I don't think you should be.

(END VIDEO CLIP)

WHITFIELD: All right, coming up, Hillary Clinton describing young voters as people living in their parents' basements, Sanders weighing in and agrees. His full response, next.

(COMMERCIAL BREAK)

WHITFIELD: All right, hello again. Thank you so much for joining, I'm Fredricka Whitfield.

So newly leaked audio of Hillary Clinton speaking to supporters at a fundraiser during the primary season and describing the economic state of affairs for some young Bernie Sanders supporters, and in the audio clip, Clinton addresses a type of cynicism that some millennials feel toward government. Let's listen to what was said.

(BEGIN AUDIO CLIP)

HILLARY CLINTON, (D) PRESIDENTIALCANDIDATE: Some are new to politics completely. They're children of the great recession. And they are living in their parents' basement, they feel that they got their education, and the jobs that are available to them are not at all what they envisioned for themselves. And they don't see much of a future. I think we all should be really understanding of that and we should try to do the best we can. Not to be, you know, a wet blanket on idealism, you want people to be idealistic, you want them to set big goals but to take what we can achieve now and try to present them as bigger goals.

(END AUDIO CLIP)

WHITFIELD: So earlier today on State of the Union with Jake Tapper, former Democratic presidential candidate, Bernie Sanders, who is now an advocate for Hillary Clinton responded to these remarks.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I-VT), FORMER PRESIDENTIAL CANDIDATE: Well, I agree with her. What she is saying is what I suggested a moment ago. There are young people who went deeply into debt, worked very hard to get a good education and yet they're getting out of school and can't find decent paying jobs. And that is a major problem. They are living in their parents' basements, and that's the point there. So I personally do believe we do need a political revolution.

(END VIDEO CLIP)

[15:35:13] WHITFIELD: And so the audio recordings were released by the Washington Free Beacon, a conservative website. They say that they obtained the recording from hackers who breached the e-mail account of a campaign staffer. So, let's talk more about this with Brian Morgenstern, a Republican strategist and Ellis Henican is a political analyst.

All right, good to see both you of.

ELLIS HENICAN, POLITICAL ANALYST: Hey, Fred.

WHITFIELD: So Brian, you first, you know, the conservative website releasing these hacked audio recordings, but you heard from Bernie Sanders there who doesn't necessarily take offense to it?

BRIAN MORGENSTERN, REPUBLICAN STRATEGIST: Yeah, I mean it's in fact, you know, this is weird to say but she kind of sounds like a little bit like a Republican because we heard a lot of comments like this during the Republic primary debates about how the education system is so darned expensive and has this debt bubble that's affecting so many millennials but the job opportunities that once were there are just not. And so -- but the solution seems to be very different because in the Republican primary debates it was all about making the education system more reflective of the market and better aimed towards job training and things like that. Whereas, now, you have Hillary Clinton and Bernie Sanders joining forces to say the government should just bail out all that debt and make college free. Well, and which, you know, most people on the right, the response is if you think it's expensive now, just wait till it's "free," probably not the best solution. But it's odd to see Hillary and Bernie agreeing in such a cynical way that the core supporters of Bernie which really drove his campaign are just a bunch of basement dwellers who are sad about the state of the affairs and now they're pushing for the status quo to continue with a Hillary presidency. Not a strong argument.

WHITFIELD: So, Ellis, perhaps the release of that audio, there were some hope that it would become a real political issue and that it wouldn't bode well for Hillary Clinton. But when you have Bernie Sanders who says, well, it's kind of a little bit of what I've been saying and we're in step to a certain degree. Is this a non issue?

HENICAN: No. And you might have noticed, Fred, there's another big leaked story out there today that's taking some of the media energy ...

WHITFIELD: We're about to get to that one.

HENICAN: ... if you know what I mean.

WHITFIELD: Yeah.

HENICAN: So no, it's inconsequential. And in fact, Brian, you know who also agrees, are all those Justins and Jasons and Jennifers living in mama's basement, right? They want some kind of relief. I mean, make sure that those 1 percenters are paying their taxes, at least a little share of them, so we all have a fair share getting a piece of this American dream, not just folks over the top.

WHITFIELD: OK. Bernie Sanders also did weigh in on that "New York Times" report that you're referencing. Ellis, about Donald Trump perhaps being able to avoid paying federal taxes for the last two decades because of that loophole. Listen.

(BEGIN VIDEO CLIP)

SANDERS: This is exactly why so many millions of Americans are frustrated, they're angry, they are disgusted and what they see is a corrupt political system in this country. So what you have at a time of massive income and wealth inequality. In the last 16 years we have seen a 10-fold increase in the number of billionaires. And at the same time, many of these billionaires have loopholes that their lobbyists and their friends on Capitol Hill provide to them, which enable them to avoid taxes in some cases not paying a nickel in taxes.

So you got the middle class people working longer hours for low wages. They pay their taxes, they support their schools, they support their infrastructure, they support the military but the billionaires, no, they don't have to do that because they have their friends on Capitol Hill. They pay zero in taxes.

So Trump goes around and says, hey I'm worth billions, I'm a successful businessman but I don't pay any taxes, but you, you make 15 bucks an hour, you pay the taxes, not me. That is why people are angry and want real change in this country.

(END VIDEO CLIP)

WHITFIELD: So, Brian, will this compel Donald Trump, this "New York Times" report and even the words of a Bernie Sanders there, will that compel him to release more of an explanation and perhaps potentially release more -- or release tax returns period, not even more, but just release some.

MORGENSTERN: Yeah, you know, I am as in the dark as anybody on this as to why he's not doing what most candidates do, which is just, you know, let it all hang out there and then take whatever hits are going to come in that sort of, you know, whatever the normal length of a press cycle is for that kind of a release. He's obviously made the calculation that the ongoing sort of simmer of why isn't he doing it, why isn't he doing it, is, you know, not as bad or equal to whatever blowback he get from releasing it.

In terms of the net operating losses that he's been carrying forward apparently, I mean, that -- I don't understand why that offends people. If you spend a million people getting a business off the ground, one year, and then the next year, you make 100 grand, you're still 900 grand in the hole. So it's not like, you know, you should be taxed on that. I mean, net operating losses don't offend me. But whatever else is in those tax returns has me as curious as everybody else.

[15:40:17] WHITFIELD: Is it because he has called the system crooked and rigged and then now low and behold if the reporting is correct if the assessment from those tax experts that "New York Times" turned to, that in fact he benefited from the very thing he claims is part of a rigged system?

HENICAN: Exactly. Come on, guys, let me shed some light on this if you need some help, Brian. I mean, this is outrageous, right? All these hardworking people paying taxes and then we spin some kind of soft history about why some super technical things allows him to go, probably, years it seems without paying a nickel. I mean, people are offended by that. You know frankly, Brian, even if it's legal, even if it's legal, it's outrageous that the hardworking folks have to do it and these Trumps in the world flying around on their gold jets aren't paying anything. That ought to outrage people, especially those kids in the basement with no job opportunities.

WHITFIELD: All right, so you -- OK, go ahead, real quick. You are going to come back, but go ahead real quick, make any feedback.

MORGANSTERN: If you lose money and then you don't make as much money, you don't pay taxes.

HENICAN: Poor baby.

MORGANSTER: Ellis, it's not ideology, it's math.

HENICAN: Oh, you should feel terrible, terrible.

WHITFIELD: OK we'll have a part two. All right, Brian, Ellis, thank you so much. See you again next hour.

All right, be sure to watch CNN's coverage of the vice presidential debate at Longwood University Virginia, two days away now. Trump's running mate, Governor Mike Pence and Clinton's running mate, Senator Tim Kaine facing off Tuesday. Our coverage starts 4:00 pm eastern right here on CNN. And we'll be right back. (COMMERCIAL BREAK)

[15:45:24] WHITFIELD: A minutes ago, Hillary Clinton boarding her campaign plane and departing North Carolina after a day spend with community leaders in Charlotte, a city still reeling from the fatal police shooting of a black man, Keith Lamont Scott. This morning, Clinton spoke at the church service where she made this appeal to the African-American community there.

(BEGIN VIDEO CLIP)

CLINTON: I'm a grandmother. And like every grandmother, I worry about the safety and security of my grandchildren. But my worries are not the same as black grandmothers who have different and deeper fears about the world that their grandchildren face.

(END VIDEO CLIP)

WHITFIELD: CNN's Senior Washington Correspondent Joe Johns is live for us in Charlotte.

So, Joe, what are you hearing in terms of how people received her message there?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: I think pretty good, Fred. This was an unusual situation for a presidential candidate. You know, no matter what party you're in, if you're running for president, and you're coming to a community which has been affected by one discreet news even event, you run the risk of criticism. I think we saw that a week ago when Hillary Clinton and Donald Trump were both talking about coming here to Charlotte in the midst of all the uproar and the mayor said, not a good time.

So, Hillary Clinton sort of walking a line as she arrived here in Charlotte today. And look, this is very important for her, Charlotte is, dealing with an issue that has affected the African-American community that she's trying to reach out to and the largest city in a key battleground state. And she's talked again, and again, and again on the campaign trail about police use of force and related issues.

So, she really had to walk a line here in this situation so as not to be criticized. How did they do that? For one thing, they made sure that this was a very down low key event. They didn't announce where it was going to be held. She surprised parishioners when she walked into the room. Although of course, the pastor knew Hillary Clinton was expected to come here.

Also, it was about the message, a very personal message she gave to this group. She didn't talk a lot about some of the national politics issues in her stump speech. She focused very narrowly, very squarely on the issues that this community might most be interested in. And, in a variety of different ways, talking about grandmothers, talking about how children view the issues affecting Charlotte, North Carolina right now, and even bringing one 9-year-old child, a little girl, up to the podium with her at the end of her remarks. So, Hillary Clinton, the campaign, trying to be careful with this issue nonetheless, wanting to connect with Charlotte because it's so an important in the scheme of things as we approach the November Election, Fred.

WHITFIELD: And Joe, this was a follow through because it was last weekend that Hillary Clinton wanted to be there but the community said it was just too soon. Same goes for Donald Trump. I know you're covering Hillary Clinton but any word as to whether Donald Trump is going to follow through and also reschedule what was to be an engagement last week?

JOHNS: And I think that's what everybody is wondering as well. Donald Trump's campaign had indicated that he was interested in coming here to Charlotte also. And he's talked a lot about law and order being the solution to some of the problems you see in places like Charlotte. Hillary Clinton also talked about that today but never by never mentioned Donald Trump by name.

WHITFIELD: All right, Joe Johns in Charlotte, North Carolina, thank you so much.

All right, Hurricane Matthew barreling through the Caribbean. We'll take you live to Jamaica, one of the island nations that could be hit hard.

(COMMERCIAL BREAK)

[15:52:57] WHITFIELD: All right, welcome back. Hurricane Matthew is gaining strength with its first effects to be felt tonight in Haiti and Jamaica. The category four storm is threatening devastating blows throughout the Caribbean. Several U.S. airlines are already warning passengers to expect delays and possible cancellations for flights heading to the region.

CNN's Michael Holmes is on the ground there, live in Kingston, Jamaica. So, what are conditions like?

MICHAEL HOLMES, CNN ANCHOR AND CORRESPONDENT: Yes, since we spoke in the last hour, Fred, we had a big storm come through here. A lot of lightning and thunders rolled through now, but it just shows how this is going to be building up in the hours ahead. The impacts of what is a formidable storm.

We are expecting the main impact to be Monday night into Tuesday. That's when things are going to get a bit hairy around here. We're told that the track at the moment is quite possible. It's going to actually suit the needle. It's going to spread it's wide between Jamaica and Haiti. Now, because of the circulation, the wide network, Haiti could get more winds, more rain. And were told even up to 40 inches of rain. That's nearly the entire year's rainfall in the passage of this storm.

And let's remember, Haiti had that earthquake back in 2010. A lot of people are still living in tents, believe it or not. And it's had a big issue with deforestation. There could be landslides, a lot to worry about in Haiti here that that means down the hatches. Fred?

WHITFIELD: And then what about evacuations, Michael?

HOLMES: Yeah, a lot of preparations going on including evacuations. It's interesting, there are shelters set up around town, many number of them and people being urged to go there tomorrow. But we were down in a port town called Port Royal, which is a fishing village really, a very humble fishing village. And we spoke to a lot of people there, and all but one or two said they are staying put. Have a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Well, I just feel I should stay here. I think I'm safer here. I'm from here, so I will die here.

UNIDENTIFIED FEMALE: I'm not afraid. I'm not going. I just can't go there.

HOLMES: Are you staying here as well?

UNIDENTIFIED MALE: Yeah.

HOLMES: You're not going to evacuate?

UNIDENTIFIED MALE: No. I'm staying here. I'm not afraid.

(END VIDEO CLIP)

[15:55:11] HOLMES: Yeah, stoic but the storm hasn't hit yet. They say they're going to hunker down in the local church, which is made out of concrete. But they are pretty humble homes. And I think there's a little overconfidence going on there. It is a evacuation order. They're choosing to ignore it, Fred.

WHITFIELD: All right, Michael Holmes, keep us posted there from Kingston, Jamaica. Appreciate it.

All right, coming up, a stunning "New York Times" report revealing Donald Trump may not have paid taxes for nearly two decades. More from CNN NEWSROOM right after this.

(COMMERCIAL BREAK)