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Trump May Have Paid No Federal Income Tax for Nearly Two Decades; CEO of Wells Fargo Slapped with $185 Million Fine; Updates from New Jersey Train Crash Investigation. Aired 5-6p ET
Aired October 02, 2016 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
POPPY HARLOW, CNN ANCHOR: Top of the hour. I'm Poppy Harlow in New York. We begin tonight with breaking new revelations about Donald Trump's taxes. The candidate who says he would run the U.S. Government like his business. The New York Times reporting it obtained summaries of Trump's 1995 tax returns and they show in a single year, Trump claimed that he lost nearly $1 billion. The result of some bad real estate buys, a failing airline and casinos that were losing money.
The other big headlines here, the tax experts consulted by the Times said such a big loss in the way that Trump took advantage of legal loopholes and credits could have allowed him to avoid paying federal income taxes entirely for nearly two decades.
[17:00:00] CNN, I should note, has not independently verified those documents that were mailed to the New York Times.
Hillary Clinton, you'll remember, made quite an issue of Trump's tax returns in the first debate. Here's a look back at that moment and what Trump said in response.
(BEGIN VIDEO CLIP)
HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Maybe he doesn't want the American people, all of you watching tonight, to know that he's paid nothing in federal taxes, because the only years that anybody has ever seen were a couple of years when he had to turn them over to state authorities when he was trying to get a casino license, and they showed he didn't pay any federal income tax. So ...
(CROSSTALK)
DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: That makes me smart.
CLINTON: It sounds like you admitted that you hadn't paid federal taxes, and that that was smart. Is that what you meant to say?
TRUMP: No, I didn't say that at all. I mean, if they say I didn't, it doesn't matter. I will say this, I hate the way our government spends our taxes.
(END VIDEO CLIP)
HARLOW: Today, the Trump campaign is accusing the "New York Times" of illegally obtaining his documents. Trump playing defense early this morning on Twitter, saying, "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 want to be clear, the way Trump could have avoided paying taxes is completely legal. Our Cristina Alesci explains how it is possible.
(BEGIN VIDEO CLIP)
CRISTINA ALESCI, CNN MONEY CORRESPONDENT: 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 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 a 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 deny 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 accountant cited 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 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)
HARLOW: Cristina Alesci is with me. Thank you. It's a fascinating reporting and hard to break this all down. Additionally, they don't show us any of his charitable contributions. We don't have that as well and that's been a big topic of discussion, but let's stick into the $916 million number, the significance there.
ALESCI: Well, the sheer size of it is what is significant. So we have this one number, and all of these questions that it's creating because the tax experts are now beginning to poke around and say, OK, what is he deducting to get to $916 million?
(CROSSTALK)
HARLOW: In one year?
[17:05:00] ALESCI: On one year, right. And are these deductions personal, are they business related? Obviously, they have to be business related, right? But there has to be an audit in order for the IRS to know exactly, according to some tax experts, exactly what he deducted. So it is raising questions about that.
Journalists are starting to say, that is a big number. Did we miss anything in his business track record that we didn't know about? So it is a number. We don't know if he actually used that amount to offset the same amount of income in years going forward, as the "New York Times" suggested. But now, it's raising all these set of questions that are going to have to be answered, or at least reporters are going to try to answer them.
HARLOW: Right. And one way he could answer them all is to release all his tax returns.
ALESCI: You got it.
HARLOW: I don't know if it's going to happen. Cristina, thank you very much. Great reporting.
The Clinton campaign calls this a bombshell. They've released a statement saying Trump apparently got to avoid paying taxes for nearly two decades while tens of millions of working families paid theirs.
He calls that smart. Now, that the gig is up, why doesn't he go ahead and release his returns to show us all how smart he really is? And you want to note here, there is a little bit of a -- something maybe mischaracterized in that statement because as Cristina rightly pointed out, we don't know if he carried it forward and actually used it to write-off losses and income in the 20 years ahead.
Joining me now is -- to respond is former Congressman Jack Kingston, he's a senior adviser to the Trump campaign. Thank you for being with me, sir.
JACK KINGSTON, TRUMP CAMPAIGN SENIOR ADVISER: Thank you Poppy. Great to be here.
HARLOW: The Trump camp is not denying that these are 1995 tax returns of his and that they're authentic. And if you look back to what Trump tweeted in 2012, here's one thing he tweeted, "Half of Americans don't pay income tax despite crippling government debt."
So, here's how some voters waking up this morning, opening up the "New York Times," seeing this headline, saw it, "Billionaire businessman gets to lose a billion bucks, still live a billion-dollar life, while complaining that our roads and our airports are falling apart. How do you square the two?
KINGSTON: Couple of things I want to say, Poppy. First of all, let's remember, this is the "New York Times." They're acting like a Hillary Clinton super pack. If suddenly ...
(CROSSTALK)
HARLOW: So Congressman, I'm just going to stop you there because they're a widely respected news organization. You can criticize them, but let's first answer my question.
(CROSSTALK)
KINGSTON: But, Poppy ...
HARLOW: How do you ...
KINGSTON: ... if you ...
(CROSSTALK)
HARLOW: ... square ...
(CROSSTALK)
KINGSTON: ... if you can ...
(CROSSTALK)
HARLOW: ... how do you square ...
(CROSSTALK)
KINGSTON: ... if you're conservative, you don't have that much to expect for (ph), I can tell you that. If they got the 36,000 ...
(CROSSTALK)
HARLOW: You know what ...
(CROSSTALK)
KINGSTON: ... missing e-mails, they would ignore them. But let me ...
(CROSSTALK)
HARLOW: I'm independent ...
(CROSSTALK)
KINGSTON: ... let me ...
(CROSSTALK)
HARLOW: They absolutely would not. So, let's get to the question. He tweets in 2012 ...
(CROSSTALK)
KINGSTON: I just want to make sure ...
(CROSSTALK)
HARLOW: ... half of the Americans are paying taxes and the government is facing crippling debt and he complains about our roads and our airports, and now, we see this. How do you square the two?
(CROSSTALK)
KINGSTON: Poppy, let me say this. He has paid millions of dollars in taxes. He's paid state, local and federal taxes. If he did not, he would be in jail. And I know the "New York Times" always is looking for a right-winger who did something wrong. But the reality is, he has paid taxes. He has abided by the law.
And by the way, he has made his millions or billions of dollars by creating jobs, by building bricks and mortar projects, by injecting economic developments into communities that needed them. Hillary and Bill Clinton have made millions upon millions of dollars by giving speeches to foreign governments, the "Wall Street" ...
(CROSSTALK)
HARLOW: They paid a 31 ...
(CROSSTALK)
KINGSTON: ... and no jobs were created.
(CROSSTALK)
HARLOW: ... federal income tax rate last year. KINGSTON: No jobs were created with the Clinton efforts. But what I'm saying is the Donald Trump businesses have created lots of jobs and they have paid lots of taxes.
(CROSSTALK)
HARLOW: OK.
(CROSSTALK)
KINGSTON: Now ...
HARLOW: Let me just jump in here also. Since you attack the "New York Times," the "New York Times" is the publication that broke the Hillary Clinton private e-mail server story.
KINGSTON: Well, every now and then, a blind pig finds an acorn, as we might say in my part of the country. But the reality is, "New York Times" has not been known to be a friend of any conservative candidate running for any office. You know, we just have our suspicion. If this is a real document, how can they use it? Is that not a violation of the law?
(CROSSTALK)
HARLOW: But it was mailed to them.
KINGSTON: I still don't think that they can use a real document like this.
(CROSSTALK)
HARLOW: Do you ...
KINGSTON: I'm not a lawyer though, Poppy. I'm asking that question. IN the previous hour, you just interviewed one of the reporters and said, do you think you'll be sued? And she just kind of smirked and said, we might be. I mean that's a real cavalier attitude.
(CROSSTALK)
HARLOW: Just so you know, I just started my show nine minutes ago. That wasn't me.
KINGSTON: No. in the last hour ...
(CROSSTALK)
HARLOW: That wasn't me in the previous ...
KINGSTON: CNN.
HARLOW: OK. How much did Donald Trump pay in federal income taxes last year? You're one of his advisers. We don't have the public ...
(CROSSTALK)
HARLOW: ... for every other presidential candidate going back to 1976.
KINGSTON: But Poppy, you know, I understand that sedition, but I actually, on my own, called a tax attorney, a well-respected tax attorney, in Atlanta and said, if one of your clients were being audited, what would you advise them, if they were running for office? And he said, absolutely, you should not don't put your taxes out there during an audit because if you do, then whatever the IRS comes up from it, there is going to be a million other back-seat drivers who say what about this, what about that?
[17:10:00] HARLOW: That's what you get when you're running for president. But let's move on.
KINGSTON: But Poppy, remember ...
HARLOW: Trump is running on the platform that his business acumen is the one that makes him most equipped to make America great again. What we see in this reporting is that he lost almost a billion dollars in one year, in 1995. And the Trump camp is not quibbling with that number.
So, my question is, his defenders will point out, yes, but he made it all back. But is that what the country wants, is a money manager who has good years and bad years with this country's finances?
KINGSTON: Actually, I think the American people are a lot smarter than you might think. And I'm not saying that you're suggesting they're not, but the reality is ...
(CROSSTALK)
HARLOW: Yeah, I'm not.
KINGSTON: ... they know that people who are in real estate, they've had their good years and they've had their bad years and as you pointed out, this is 1995.
If he lost that much money, he would be out of business and he would be gone if he wasn't a really smart businessman. So he has come back and he has been paying taxes all along. Again, he would be in jail if he had not paid taxes.
HARLOW: You know, we're not suggesting any illegality here. But because he won't release his tax returns, this is all the public has to go off.
KINGSTON: Well, no, actually, in May, and it's up online, he disclosed 105 pages worth of financial disclosure, which gives you a much better picture of somebody's finances ...
(CROSSTALK)
HARLOW: This is not ... KINGSTON: ... than their tax returns. It does show you what his financial picture is. And one thing ...
(CROSSTALK)
HARLOW: I know. It doesn't.
(CROSSTALK)
KINGSTON: ... that is really important ...
(CROSSTALK)
HARLOW: ... it doesn't show us his tax rate.
KINGSTON: It shows what his financial situation is though, and that, to me, is a more important indicator. One hundred and five pages long. That is required by law, by the way. The tax returns are tradition.
HARLOW: So you're saying it matters more that the public sees how much money he made in one year and not how much money he contributed to American society, either charitable giving or what it takes to fix our roads and bridges?
KINGSTON: I think the financial disclosure is the superior document, ad that's what he filed in May. Remember, 105 pages, and it's up for anybody to look at online if they want to.
But you know, one of the big things that are a difference between Hillary Clinton and Donald Trump is Donald Trump does want to reform the tax system and he wants to go from seven different tax rates down to three.
He wants to cut taxes for small businesses. He wants to bring overseas income back to America so that we can, in fact, put it into infrastructure. So ...
(CROSSTALK)
HARLOW: Congressman ...
(CROSSTALK)
KINGSTON: ... that is part of his platform.
HARLOW: Independent economists who have reviewed tax planning compared to Hillary Clinton's, overwhelmingly say that his tax plan benefit the rich more that anyone else.
(CROSSTALK)
HARLOW: But we ask you about a 2012 tweet, in which Trump tweeted about the president. He said, Now, Barack Obama wants to raise all our taxes and only pays 20.5 percent on $790,000 in salary. Do as I say, not as I do. That's his tweet. If this is indeed what Trump does potentially saying no federal income tax for almost two decades, should other Americans do what he does?
KINGSTON: Poppy, I want to go back to one saying, I have a degree in economics ...
(CROSSTALK)
HARLOW: No. Can you answer that question? Can you answer that question because you're an adviser to his camp.
KINGSTON: I say under tax simplification -- under tax simplification, the tax code will be clearer. There will be more certainty to it. It will be fairer and it will be better for all Americans. And that's why he is running. But I want to tell you ...
(CROSSTALK)
KINGSTON: ... I have a degree ...
(CROSSTALK)
HARLOW: I don't think anyone ...
(CROSSTALK)
KINGSTON: ... in economics ...
(CROSSTALK)
HARLOW: ... disagrees with me ...
(CROSSTALK)
KINGSTON: ... and I have looked at his ...
(CROSSTALK)
HARLOW: ... don't need tax reform in this country.
(CROSSTALK)
KINGSTON: But Poppy, let me tell you this, I have a degree in economics. I have studied his plan, I've studied Hillary Clinton's plan. Yes, you can only find economists who disagree, and there is plenty in the democrat camp, plenty in the establishments, Washington, D.C. economists. But the reality is, the Donald Trump plan will give a boom to America. It reduces regulations, unleashes American energy while Hillary Clinton really wants to shut American energy off. She takes pride in closing down coal-related jobs. It's a big difference.
(CROSSTALK)
HARLOW: Congressman, we're getting little bit off-topic here. I'd love to have you back and talk about their jobs plans but I do want you to answer my question. That is, why did Donald Trump in 2012 in that tweet criticize the President for not paying what he deems to be enough taxes, and then we see this? Is there a hypocrisy there? KINGSTON: Well, I don't want to -- I can't go back on a 2012 twitter. There are so many twitters out there, so I don't know the content of what he was saying. But let me ...
(CROSSTALK)
KINGSTON: ... let me say this ...
(CROSSTALK)
HARLOW: I just -- I just pulled it up, I'll pull it up for you again. "Now, Barack Obama who wants to raise all our taxes, only pays 20.5 percent on $790,000 in salary. Do as I say, not as I do."
KINGSTON: Poppy, he has paid taxes. He's not released his taxes because he's under an audit. I bet you, his taxes ...
(CROSSTALK)
[17:15:00] HARLOW: So what did you think, was his tax rate in 2012 when he attacked the President?
KINGSTON: Well let's take a step back. If there's a problem with the tax code, who is the one who has been in officer for 30 years? It's Hillary Clinton. She's been part of that ...
(CROSSTALK)
HARLOW: I'm not arguing. There's not a problem with the tax code. What I'm arguing is that your candidate came out and attacked other people for not paying enough taxes. Now, he's running for president, won't show the American people what he's paid. Isn't there a problem there?
KINGSTON: Well, no. Poppy, I really think the people back in America, the mainstream that Hillary Clinton calls deplorable and super predators and basement dwellers, they are more worried about their own income, which they've seen fall from $57,000to $53,000.
We have 43 million people on food stamps right now, 94 million people are underemployed or unemployed. They know the economy is not working for them right now. They want change. They want an outsider.
The tax code, which is absolutely complicated, we do need to change it, Hillary Clinton has been part of the architect of it because she's been a U.S. senator. Before that, she was working on for eight years (ph) with her husband.
HARLOW: I'm out of time. I want you to come back. And I would say that the current tax code that we live by now is largely written in 1984 and hasn't been reformed since then. I think everyone ...
(CROSSTALK)
KINGSTON: But Hillary ...
(CROSSTALK)
HARLOW: ... probably has ...
(CROSSTALK)
KINGSTON: ... could have changed it, Poppy.
(CROSSTALK)
HARLOW: WE need comprehensive - I hear you. And guess what, her representative is on with me, next. We'll talk to them about it. Former Congressman Jack Kingston, thank you.
KINGSTON: Thank you, Poppy.
HARLOW: Coming up, the Trump tax revelations could not have come at a better time for Hillary Clinton. Some say she is dealing with fallout from her own controversies with this leaked audio, for questioning millennial's commitment to Bernie Sanders.
Up next, we will dive into that and Trump's taxes with senior spokeswoman for the Clinton campaign, Karen Finney. Stay with us.
(COMMERCIAL BREAK)
[17:20:00] HARLOW: Welcome back. The "New York Times" today revealing Donald Trump may not have paid federal income taxes for up to 18 years. What it does also show is he lost about a billion dollars in a single year of doing business. That was back in 1995.
CNN has not independently verified the authenticity of the documents published by the "Times," and that the paper is not alleging that Donald Trump did anything illegal. Today, his big name surrogates (ph) are out. Some of them using the word "genius" to describe this.
(BEGIN VIDEO CLIP)
GOV. CHRIS CHRISTIE (R), NEW JERSEY: There is no one who has shown more genius in their way to maneuver around the tax code, as he rightfully used the laws to do that.
RUDY GIULIANI, FORMER MAYOR OF NEW YORK CITY: I mean, 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 in America. He came back. I'd rather have a genius like Donald Trump running this country than someone like Hillary Clinton that all she seems to do is to produce jobs for the FBI.
(END VIDEO CLIP)
HARLOW: Karen Finney is with me, she is a senior spokeswoman for the Hillary Clinton campaign and the senior adviser for communications and political outreach. Thank you for being with me.
KAREN FINNEY, HILLARY FOR AMERICA SENIOR SPOKESWOMAN: Great to be with you. HARLOW: Even if you don't agree with Donald Trump's surrogates, it does matter - it actually only matters what the voters think. We're 37 days out from the election.
I was in Pennsylvania, a key state you guys want to win, a swing state this week, and listen to what a Trump supporter told me who lives just on the outskirts of Philadelphia.
I want to note, she said this to me about Trump's taxes, obviously, before this "New York Times" report was released.
(BEGIN VIDEO CLIP)
BETH HAMILTON, PENNSYLVANIA TRUMP SUPPORTER: Donald Trump didn't write the tax code; politicians wrote the tax code. So, you know, you'd like to think that the man who made that much money paid some taxes, but if he gets away with not paying taxes, I don't know that I'd hold it against him. It's the tax code.
(END VIDEO CLIP)
HARLOW: She says that politicians who were in charge basically should have written a smarter tax code, and a tax code that helps more people. Secretary Clinton was a senator from New York. You heard Trump surrogate say it just before the break.
FINNEY: Sure.
HARLOW: Is she partially responsible for a system that allows loopholes like this and makes them perfectly legal?
FINNEY: Well, I think as you well pointed out, the tax code hasn't really changed in a number of years, and certainly she is someone who very much supports reforming the tax code and certainly in the context of this presidential campaign, I think what we're talking about is here you have a man -- there are two things about Donald Trump's taxes.
(CROSSTALK)
HARLOW: But she could have taken it ...
(CROSSTALK)
HARLOW: ... let's be fair, she could have taken it on as senator.
FINNEY: But I guess my point is, so she is one person out of 99 other senators. Then you have the House of Representatives and you have, you know, President Bush as our president.
And remember, it was the Bush tax cuts (ph) that partially got us into trouble because one of the things that we know is that trickle down economics does not work. And as you yourself pointed out, Poppy, in your interview with Jack Kingston, what we're seeing with Donald Trump is a return to trickle down economics. And we know that doesn't work.
(CROSSTALK)
HARLOW: But how does she not bear some responsibility for the system? It's not just Beth from Pennsylvania who told me that. A lot of folks tell me that and they say they're voting for Trump because politicians have kept the status quo for too long. Does she not bear some responsibility?
(CROSSTALK)
FINNEY: I would say that as an elected senator from the State of New York, she did what was within her power to do to try to improve the system and make it more fair in any number of ways, not just the tax system.
But, unfortunately, part of the reality, when you are 1 of 100, when you are part of -- this is the way our branches of government work. But Poppy, I want to just say here is what is really important, I think, about these revelations.
Number one, it tells us a lot about why it is that Donald Trump, who promised in 2014 that if he ran for president, he would make his taxes public, he would release his taxes, has (inaudible) on that promise. There have been a lot of speculations because there are those two years that we previously knew that he had not paid any taxes.
Now, we know that it could be -- it certainly may be far more number of years and we're talking about up to a billion dollars. I would bet ...
(CROSSTALK)
HARLOW: Karen ...
(CROSSTALK)
FINNEY: ... hold on, Poppy, I would bet you that the small businesses that were put out of business because of the way Donald Trump scammed them would have loved to have been able to take advantage of various, you know, tax breaks to save their businesses. I don't think you can say a person is a genius who took a billion dollars in losses ...
(CROSSTALK)
HARLOW: Karen, let me ...
(CROSSTALK)
FINNEY: ... and failed his business.
HARLOW: I want to get to some other topics, as well.
FINNEY: Sure.
HARLOW: Let's listen to some audio from this Hillary Clinton fundraiser back in February, released by the "Washington Free Beacon", a conservative website. She was at the time running in this heated primary with Bernie Sanders. Here is a small clip of what she said.
(BEGIN AUDIO CLIP)
CLINTON: There is a deep desire to believe that, you know, we can have free college, free healthcare. It is a false promise. But I don't think you tell idealistic people, particularly young people, that they bought into a false promise. His ideas are indefensible.
(END AUDIO CLIP)
[17:25:00] HARLOW: She then did go on in the full audio to talk about how we can't write-off these people that have these hopes, and we have to embrace them and embrace their idealism.
She has now embraced part of Bernie Sanders' platform, to push for free college tuition for some specific ...
(CROSSTALK)
FINNEY: Debt-free college.
HARLOW: Right. For every student from a family making $85,000 a year, to be able to go to an in-state public school or university.
(CROSSTALK)
FINNEY: Community college.
HARLOW: Correct. So my question is, she's embraced part of now what she then called a false promise. How do you square the two?
FINNEY: I think that that's a little bit of a mischaracterization. But here is what I would say. If you listen to all of what she said, I mean, I remember that part in the campaign very well. You had donors and people -- supporters who were very frustrated with what was going on.
And Hillary, in that instance, was really telling a room of her supporters, look, this is what these young people -- they're frustrated. They're disappointed. They're right to be feeling what they're feeling and you have to be patient with them and you and we have to understand why they are concerned about the issues they're concerned about.
They are supporting Bernie Sanders. And she would say this publicly, frankly. I mean, she was very public about the idea that she believed that some of the things that he promised, she just did not believe were doable. I mean, when we had this long conversation throughout the primary, for example, about the affordable care act.
I find it very interesting though that just this morning on one of the morning talk shows, Bernie Sanders himself said he completely agreed with Hillary. That he did have a number of very young, idealistic people who wanted to -- who were frustrated and that it is important that we pay attention to that.
(CROSSTALK)
HARLOW: She called some of those -- I hear you, Karen, but she called some of those ideas indispensible and now she is wrapping her arms around them. She called some of them false promises for the voters ...
(CROSSTALK)
FINNEY: But Poppy ...
(CROSSTALK)
HARLOW: ... that are idealistic.
(CROSSTALK)
FINNEY: ... I think you're absolutely mischaracterizing -- I think you're absolutely mischaracterizing what we're talking about. I mean, Bernie Sanders talked about free college. That is not what Hillary is talking a about.
Hillary Clinton is talking about debt-free college. She's talking about, how do we help people refinance their existing debt, how do we make sure that for certain people living within certain income levels, how do we make sure that they can go for free?
So it's not an across the board free college for everybody. She continues to believe that we, as taxpayers, for example, should not be paying for Donald Trump's kids to go to college.
So, I take issue with your characterization. And what I would say to you is, what is part of this process, there were a number of ideas that Senator Sanders was campaigning on that our campaign looked at and said, OK, how do -- this is a part of our platform process. But how do we bring these ideas together?
But I think the more important point here is that she was very bluntly speaking to the frustration that a lot of people were feeling. I think she was being very honest with her own supporters and a lot of what she said there, she also talked about publicly.
And I want to say, last thing -- one last thing on the issue of the taxes, because I do think that at the end of the day, this election is going to be about two very different visions of our country. And you're going to see that on Tuesday night in a debate between Tim Kaine and Governor Pence. And what you're going to see in large measure when we talk about taxes is someone who has a plan to make our tax system more fair. To lower taxes on the middle class. To make it easier for small businesses and really ...
(CROSSTALK)
HARLOW: Karen ...
(CROSSTALK)
FINNEY: ... lower taxes on small businesses, not trickle down economics, which is what Donald Trump is peddling (ph).
HARLOW: Right. I'm getting the wrap. I appreciate you taking the time.
FINNEY: You bet.
HARLOW: I didn't get through half of my questions, so please come back.
FINNEY: You got it.
HARLOW: Thank you very much.
Coming up, a criminal enterprise with gutless leadership on par with Enron, not my words, the words of lawmakers taking on the CEO of Wells Fargo this week after the company created millions of fake account with real people's information and then fired 5,300 people for doing it.
Ohio Senator Sherrod Brown joins me live on what congress is going to do about it.
[17:30:00] (COMMERCIAL BREAK)
HARLOW: One of this country's largest banks did something almost unheard of in American politics these days. It put lawmakers from both parties in the House and the Senate in almost unanimous agreement. They're furious at Wells Fargo, which got slapped with $185 million fine for creating millions of fake customer accounts. This man was in the line of fire at two separate Capitol Hill hearings -- Wells Fargo CEO John Stumpf.
Democratic and Republican finance committee members hammered him on his bank's allegedly fraudulent sales tactics. Some called Wells Fargo a, quote, "criminal enterprise." Others said the bank is too big to manage and should be broken up. The ranking member of the Senate banking committee says Wells Fargo would have continued profiting for the sham accounts perhaps had it not been uncovered by the media.
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SEN. SHERROD BROWN (D), OHIO: Wells Fargo's reaction has been remarkable. It did not treat this as a big problem until it appeared in the newspapers. It did not begin to make customers haul (ph) until this year. And we don't know whether the bank chose to do so or was told they had to do so.
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HARLOW: Senator Sherrod Brown joins me live from Cleveland. Thank you for being with me.
BROWN: Good to be with you. Thanks, Poppy.
HARLOW: When you and your fellow committee members grilled Stumpf on September 20th, since then, some members of the House committee called for Wells to be broken up. They say this bank is too big to manage, to oversee, it should be broken up. Do you think that is the remedy here?
BROWN: Well, that's one of the remedies. I was the -- Senator Kaufman of Delaware and I had legislation back in 2010 trying to amend Dodd- Frank to break up the six largest banks. So I supported that idea for a better part of a decade. I mean, this bank clearly is too big to manage. It's too big to fail and it's probably too big to regulate.
You know, you look at all the things that were going on that the CEO for three years, four years, five years, six years, he said he didn't even know about. And either he didn't tell the truth or give him the benefit of the doubt, its management structure with a lot of problems, or the bank is just too big to really run. I think it could be all three of those.
HARLOW: You also said in those remarks to Stumpf -- you called Wells Fargo, "downright hostile to aggrieved customers." And you pointed out something that may not have gone a lot of headlines but it's really important. It's the facts that Wells Fargo customers are bound by something known as mandatory arbitration clauses. And that means they can't sue the bank. They can't take them to court. You find that outrageous.
[17:35:00] BROWN: Well, it's outrageous. First of all, the mandatory arbitration clauses generally the fine print, credit card agreements sometimes when you open any kind of account, you sign your name to a bunch of things -- I'm not a lawyer -- if you're not a lawyer, you typically don't see that, maybe don't read it. And if you do, you may not understand it. That was bad enough. But the second thing, they created these fraudulent accounts, signing your name, and they're enforcing the mandatory arbitration clause on those accounts you didn't even sign.
So, I don't know that that stands up in a court of law but it's particularly egregious, not to mention arrogant, for a bank to say you can't sue when they committed that fraudulent behavior against you -- towards 2 million accounts. We don't know how many customers that they inflicted this on, but we know it was 2 million accounts and I assume hundreds of thousands of customers, for sure.
HARLOW: Several Republican and Democratic lawmakers have alleged that Wells sales practices may have actually gone as far as violating federal law, potentially federal racketeering laws -- those are just allegations. But if that is the case, that would constitute a criminal offense. I wonder if you think that John Stumpf should be criminally charged here.
BROWN: Well, I don't know enough to know that and I don't make judgments like that. I do though encourage the Justice Department to look into criminal activities not just for the whole management structure. And what in fact they knew and what they continued to do. And you know, fundamentally, it's also this, you have 5,300 employees fired over a five-year period and top management didn't seem to know that.
You also had probably thousands, certainly hundreds of people fired because they didn't meet the sales quotas which the company has acknowledge were too aggressive. Then you have hundreds, maybe thousands of people who quit because of that pressure. And these are people making $12, $13, $14 an hour. The average teller in this country makes $12.50 to $13 an hour.
HAROW: Right.
BROWN: They all did that in service to the top management getting tens of millions dollars in bonuses. So, these low-income workers were pressured, some fired, some quit in disgust, some did things they shouldn't...
HARLOW: So what should happen to them?
BROWN: ...all in service to millions of hours a year.
HARLOW: I mean, what should happen to them if you think about their families and they were relying on the salary?
BROWN: Well, I think first of all, the bank needs to make the customers whole whose credit ratings may have been affected...
HARLOW: Right.
BROWN: ...which means they're paying $20 a month more on a mortgage for the next 30 years -- 7,000 or $8,000 more. The employees, they need to make some of those employees (inaudible). The employees engaged in wrongdoing, and that's pretty much it. They should not be rewarded, of course.
But the ones they put pressure on that might have quit because of that or they fired -- this is like -- there's a lot here that we don't yet know about and these hearings need to continue. And I want to see other Wells Fargo executives come and talk to us on the record and talk to us under oath.
HARLOW: Yeah, not to mention the woman who ran that division left with a $77 million golden parachute.
BROWN: Yeah.
HARLOW: Stay with me. We're going to get a break in. You're going to join me next. We're going to talk about politics and the vice presidential debate coming up on Tuesday. Stay with me.
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HARLOW: Senator Sherrod Brown is back with me, live from Cleveland. All right, let's talk a little politics and a little debate because the VP debate, obviously, is on Tuesday night, and a lot of people thought you we're on the short list to be Clinton's vice presidential running mate. If you were Tim Kaine or you were giving him advice in this debate, what would your advice be?
BROWN: Well, I think he continues to make the contrast between Donald Trump and Hillary Clinton. That Hillary Clinton is the most qualified person to be commander-in-chief to run for president perhaps since Dwight Eisenhower or maybe my whole lifetime and Donald Trump is agreed by so many analysts and commentator and the Republican leaders and others the least qualified to be president.
And I think there are so many examples of that. You saw that last week in the debate between Trump and Clinton. And I think you'll see it as Tim Kaine points it out.
HARLOW: You did -- you did but I would push you on that a little bit because the post-debate polls show them neck and neck. I mean, they show them within the margin of error by a three-point spread at the most so, that's the argument that's been made and it's not widening the gap.
BROWN: Well, it's true. I think it's true.
HARLOW: It's true. I'm just saying what do you do that's going to work?
BROWN: Well, I think since the debate, you've seen movement here. I mean, people, you know, I'm not making this about the media but this sort of false equivalency, you know, they're both dishonest and both unpopular. I mean there's no comparison. Look at something like PolitiFact that checks on candidates statements. Donald Trump at the rate of like four times or five times the number of false statements that Hillary Clinton makes or whatever the numbers are, they're overwhelmingly different.
HARLOW: I guess when I was agreeing with you and...
BROWN: I mean, that sort of false equivalence, you guys have like -- I'm not here to attack the media but you've let that stand. Media is better at it than they were, but again, she is the most qualified, period. He is the least qualified. I think voters are seeing that. Not to mention his, you know, what he's been saying about women and probably making fun of disabled people and all those things, and I think you're going to see these numbers open up. Hillary Clinton is going to carry Ohio.
HARLOW: Very quickly, when I was agreeing with you on in your last statement where I said that's true, I was saying it is true that indeed, the gap is not getting any wider.
BROWN: Well, no, I think the gap is getting wider. I think since the debate, slowly it's began to pick up in a lot of swing states. Hillary Clinton is going win Ohio. I mean I've been in politics in the state for a while and I know the state as well as anybody. She's going to win the state. She's going to win this state because she's fighting for the right trade policy. She fights for the middle class. She understands foreign affairs. She's going to do well especially among suburban educated women. She'll going to win the state.
HARLOW: Senator, I got go leave it there. They're telling me if I go any longer those bars are going to come up because your satellite is going to drop. Thank you for being with me, senator. We appreciate it.
BROWN: Thanks. Glad to be here. Thanks. HARLOW: Coming up back after the break, trouble for the investigation into that fatal train crash in Hoboken, New Jersey. A key piece of evidence we've now learned may not be able to shed any light into what caused the deadly crash. A live report next.
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HARLOW: Breaking news from that investigation into the fatal crash of that train in New Jersey last week. The NTSB now says that the train's event recorder was not working when the train crashed into the station. It left one woman dead, 114 people injured. Nick Valencia is with me now. I mean, this is critical, right? This is what tells you what was happening, how fast it was going, et cetera, up until the crash.
NICK VALENCIA, CNN CORRESPONDENT: Critical indeed and a bizarre development. I'm not sure if we've heard of anything like this happening before but NTSB investigators announcing at a Sunday afternoon press conference the one event recorder that they managed to recover from this mangled train wreckage was not functioning at the time of the accident. The NTSB official said that this is a relatively old event recorder, Poppy, dating back to 1995.
She said usually, when they're this old, they're replaced. But that clearly did not happen. Whether it was a technical error, engineering glitch or something else, all of that will be part of the investigation. There is a second recorder still on the train currently but because of structural damage and other things, they haven't been able to get to it. All of this was discussed earlier at the press conference.
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T. BELLA DINH-ZARR, NTSB VICE CHAIRMAN: Yesterday our recorders experts worked with the experts from the manufactures to access data from the recovered locomotive event recorder, which was built in 1995. Unfortunately, the event recorder was not functioning during this trip.
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[17:50:00] VALENCIA: The crash happened on Thursday morning, packed with commuters. It hit a bumper block and went airborne killing a woman and also injuring more than hundred people. That curve that it was on, Poppy, right before the crash, the speed limit 30 miles per hour. According to investigators, the train was going about 43 miles per hour.
Also part of the investigation is another train back in 2011. It missed it stop also at this Hoboken stop. They're going to look into that and see if there's an overall glitch in the system, but certainly a bizarre development that this event recorder was not functioning at the time of the accident. Poppy.
HARLOW: Not at all. Nick, thank you for the reporting. Quick break. We'll be right back. (COMMERCIAL BREAK)
HARLOW: All right, now a speak peek of the next episode of "Parts Unknown." Anthony Bourdain heads to Nashville to take in the city's lively music and rich cuisine.
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ANTHONY BOURDAIN, CNN PARTS UNKNOWN HOST: Nashville, Tennessee. When I plan to do a show here, I was saying, you know, everybody just shows about the music in Nashville, but then we got really, really lucky.
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BOURDAIN: So prepare yourself. This show's all about music and it is filled with the most awesome music ever in the history of the world, maybe even the universe.
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HARLOW: "NASHVILLE PARTS UNKNOWN" tonight 9:00 p.m. eastern. Only right here on CNN.
And coming up...
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HARLOW: Top of the hour. I'm Poppy Harlow in New York and we begin this hour with what is the first look at Donald Trump's elusive tax records. The "New York Times" revealing that tax documents anonymously mailed to the paper show Trump's may have avoided paying federal income taxes for nearly two decades, why? Because the 1995 records show the businessman reported losing almost a billion dollars in one year and that allowed him to take advantage of major tax breaks. The possibility that Trump did not pay federal income taxes is something Clinton brought up just last week in the debate.
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[18:00:00] CLINTON: Maybe he doesn't want the American people, all of you watching tonight to know that he's paid nothing in federal taxes.
