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Wall Street Journal: Grand Jury Impaneled in Russia Probe; Mueller Exploring Financial Ties Between Trump, Russia. Aired 5-6p ET

Aired August 3, 2017 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now: breaking news. Grand jury probe. Special counsel Robert Mueller has reportedly impaneled a grand jury in his investigation into Russian interference in the U.S. presidential election. And a separate report says grand jury subpoenas have already been issued in connection with Donald Trump Jr.'s meeting with a Russian lawyer.

[17:00:04] Follow the money. CNN has learned that the special counsel's investigation into President Trump's potential financial ties to Russia may extend to possible crimes unrelated to the 2016 campaign. Trump has warned, that's a red line investigators shouldn't cross. How will he respond?

Russian intercepts. CNN has also learned that investigators are now looking at intercepted communications from suspected Russian operatives, trying to coordinate with Trump campaign chairman Paul Manafort. Did they pass on information designed to hurt Hillary Clinton's campaign?

And leaked transcripts. Word for word details of President Trump's phone calls with the leaders of Mexico and Australia are obtained by "The Washington Post." What do they say about U.S. officials trusting the president? And is it also a threat to national security?

I'm Wolf Blitzer, you're in the situation room.

ANNOUNCER: This is CNN breaking news.

BLITZER: The breaking news this hour, significant new twists in the investigation into Russian meddling in the U.S. election. "The Wall Street Journal" is reporting that special counsel Robert Mueller has impaneled a grand jury in the case. And now Reuters is reporting that grand jury subpoenas have been issued in connection with a controversial meeting between a Russian lawyer and Donald Trump Jr., Jared Kushner, and Paul Manafort.

Also breaking, CNN has learned of more major developments. Sources familiar with the special counsel probe say investigators are looking at potential financial ties between President Trump and his associates with Russia. The president has said that's a red line Mueller should not cross.

CNN has also learned that investigators turned up intercepted communications of suspected Russian operatives, apparently trying to coordinate with former Trump campaign chairman Paul Manafort. Sources say the Russians talked about information they believed would damage Hillary Clinton's campaign.

And "The Washington Post" is reporting that transcripts of a phone call between President Trump and Mexican President Enrique Pena Nieto showed Mr. Trump suggested Mexico would not have to pay for the border wall that was central to his campaign. The president implied the costs could be worked out, and he pressed Pena Nieto to stop criticizing the wall.

We're covering all of that and much more this hour with our guests, including Congressman Eric Swalwell of the House Judiciary and Intelligence Committees.

And our correspondents and specialists are also standing by.

Let's get some more now on the "Wall Street Journal" report that a grand jury has been impaneled in the special counsel's Russia investigation. The former Watergate special prosecutor and CNN legal analyst Richard Ben-Veniste is joining us along with CNN senior legal analyst Jeffrey Toobin, who's on the phone.

Richard, first to you. You were the chief of the special prosecutor's Watergate task force. Reuters reporting the grand jury just issued subpoenas related to that June 2016 Donald Trump Jr. meeting with that Russian lawyer and others. So what does that mean?

RICHARD BEN-VENISTE, CNN LEGAL ANALYST: Well, of course, Bob Mueller, the special counsel, will use the grand jury to obtain evidence. He'll use the grand jury subpoenas to get documentary evidence, and he will use the subpoenas to produce witnesses who would be otherwise unwilling to attend.

BLITZER: Jeff, how serious is all of this? These new developments involving grand juries?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST (via phone): Grand juries can issue indictments. And that's the -- that's the ultimate sanction that a prosecutor has. That he can bring criminal cases.

It's important to point out that, just because a prosecutor impanels a grand jury, that doesn't mean any indictments will issue, but the one thing we know for sure is there can't be any indictments without a grand jury. So the fact that he has a grand jury means the case is moving forward. There will be testimony. There will be sworn testimony from witnesses. There will be grand jury subpoenas issued, presumably to banks, to telephone companies, to individuals to produce documents, and it means the investigation is proceeding at a traditional pace for a criminal investigation.

BLITZER: Major developments. I want to point out to our viewers, we're seeing live pictures coming in from Joint Base Andrews right outside of Washington, D.C., Marine One bringing the president from the White House, South Lawn over to Joint Base Andrews. He's going to be getting on Air Force One flying to West Virginia for a campaign rally later this night. Let me read a statement that Ty Cobb just released. He's the

president's personal attorney, issuing this statement on this new report of a grand jury being impaneled.

He said, "Grand jury matters are typically secret. The White House favors anything that accelerates the conclusion of this work fairly. The White House is committed to fully cooperating with Mr. Mueller." Ty Cobb adds, "Former FBI director James Comey said three times the president is not under investigation, and we have no reason to believe that has changed."

The special counsel, Robert Mueller, has now impaneled, according to to the Wall Street Journal, this grand jury.

So Richard, what is -- what does the White House lawyer's, the president's lawyers response say to you?

BEN-VENISTE: Well, that's good news. Cooperation from the White House, we've been saying all along that all of this controversy swirling around the president means that the president ought to cooperate, and he ought to get it behind him.

Instead, we've had all this obfuscation, misstatements, contrary statements, often contradicted within one news cycle, and now, the investigation is taking on some steam. So that's consistent with what Ty Cobb has suggested, that the investigation proceed apace.

This is how federal prosecutors obtain evidence, obtain sworn testimony, which is critical to moving forward. Doesn't mean that Mr. Trump is a target of the investigation, but it does mean that people will be put under oath, and if they are not truthful, they raise the possibility that they could be prosecuted for perjury.

In addition, documents, including financial documents, are certainly fair game for the special counsel to determine whether there are motivations that involve the Russians between the United States citizens, perhaps campaign officials, perhaps the president himself that explain the relationship.

If you go back to the dossier of the MI-6 operative, Mr. Steele, back last year, he reported in his dossier that Prime Minister Putin was warning his people, his intelligence people to stop talking to each other about incursions and successes they had been making in connection with the Trump campaign staff. That's because our folks, quite properly, were listening. And Putin knew that. And that provides a road map to Mr. Mueller and his investigators to see who's saying what officials were cooperating and what they were doing.

BLITZER: President Putin, not Prime Minister Putin.


BLITZER: He had been prime minister. Then, of course, once again he became president. And very quickly, Jeffrey...

BEN-VENISTE: He can be whatever he wants to be. BLITZER: Jeffrey, the timing of all of this, Mueller, he hasn't been

the special counsel all that long. What does it say to you, this "Wall Street Journal" report saying he has now impaneled a grand jury, Reuters saying that a grand jury has already issued subpoenas in connection with that controversial meeting over at Trump Tower in New York City last summer?

TOOBIN: Well, it suggests that he's moving at a reasonable pace. I mean, just because a grand jury has started doesn't mean the investigation is anywhere near over. Grand juries can often sit for even more than a year. So, it's not like this suggests anything near the end of the investigation. It perhaps means, to paraphrase Winston Churchill, it's the end of the beginning.

BLITZER: We see Jared Kushner and Ivanka Trump walking up to Air Force One and Eric Trump, another son of the president, is going aboard the flight to West Virginia for this rally, as well. We're going to continue to monitor that.

But there's another critical development that's unfolding right now. CNN has learned that the special counsel probe is now focusing in on financial ties between Russia and President Trump, his family, and his company.

Our justice correspondent, Pamela Brown, is joining us with the very latest. What are you hearing, what are you learning, Pamela, from your sources?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, today Wolf, we're learning exclusive new details that give an inside look into how the focus of the Russia probe is crossing over into what President Trump says is a red line investigators should not cross, as they look into finances of Trump and his associates unrelated to the 2016 election. This as the investigation enters its second year.


DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Does anyone really believe that story?

BROWN (voice-over): Tonight, the Russia investigation continues to widen as federal investigators explore the potential financial ties of President Trump and associates to Russia. Sources tell CNN, financial links could offer a more concrete path to any potential prosecution. Investigators are delving in to possible financial crimes, including some unconnected to the election.

[17:10:08] For the president, that's going too far. He's warned that delving into his businesses is a, quote, "violation." Trump has maintained there's no collusion, and he has no financial ties to Russia.

TRUMP: And I can tell you, speaking for myself, I own nothing in Russia. I have no loans in Russia. I don't have any deals in Russia.

BROWN: Now, one year into this complex probe, the FBI has reviewed financial records related to the Trump Organization, the president himself, as well as his family members and campaign associates. CNN has told investigators have combed through the list of shell companies and buyers of Trump-branded real estate properties. They've scrutinized the roster of tenants at Trump Tower in Manhattan, reaching back several years.

And officials familiar with the investigation tell CNN, Special Counsel Robert Mueller's team has examined the backgrounds of Russian business associates connected to Trump, dating back to the 2013 Miss Universe pageant he hosted in Moscow.

UNIDENTIFIED MALE: Thank you to Aras Agalarov and to the Focus Group for their amazing hospitality.

BROWN: CNN could not determine whether the review has included Trump's tax returns.

But even investigative leads that have nothing to do with Russia, but involve Trump associates, are being referred to the special counsel to encourage subjects of the investigation to cooperate.

TRUMP: The entire thing has been a witch hunt.

BROWN: President Trump, keenly aware of the increased financial focus, regularly denounces the investigation.

TRUMP: Russia is fake news. Russia -- this is fake news put out by the media.

BROWN: Trump team's seeking to limit Mueller's investigation.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The president's point is that he doesn't the special counsel to move beyond the scope and outside of its mission. And the president's been very clear, as have his accountants and team, that he has no financial dealings with Russia. And so, I think we've been extremely clear on that.

BROWN: CNN has learned new details about how Mueller is running his special counsel team. More than three dozen attorneys, FBI agents, and support staff, experts in investigating fraud and financial crimes, broken into groups focused separately on collusion and obstruction of justice.

There is also focus on targets like Paul Manafort, Trump's former campaign manager, and General Michael Flynn, his fired national security advisor.

CNN has learned that investigators became more suspicious of Manafort when they turned up intercepted communications that U.S. intelligence agencies collected amongst suspected Russian operatives, discussing their efforts to work with Manafort to coordinate information that could hurt Hillary Clinton's bid for the White House, according to U.S. officials.

In Flynn's case, the focus is now on his lobbying work for the Turkish government, which he failed to initially disclose as required by law. While both men deny any wrongdoing, the approach to the Manafort and

Flynn probes may offer a template for how the focus by investigators on possible financial crimes could help gain leverage and cooperation in the investigation.


BROWN: And the president's attorney, Jay Sekulow, said to CNN in a statement, "The president's outside legal counsel has not received any requests for documentation or information about this. Any inquiry from the special counsel that goes beyond the mandate specified in the appointment we would object to."

And just for context here, for a financial investigation to take place, the special counsel doesn't necessarily have to go to the lawyers. You can get subpoenas for financial records from banks, and you can also get records from Treasury Department.

BLITZER: Pamela, I want you to stay with us. I want to bring in our justice reporter, Shimon Prokupecz, who's also working the story for us. This investigation was supposed to be about Russian meddling in the U.S. Presidential election. So why are they now looking at all these financial matters involving Donald Trump, financial matters that go way back years before he even became a presidential candidate?

SHIMON PROKUPECZ, CNN JUSTICE CORRESPONDENT: Well, that's right, Wolf, and this has become part of -- an important part of this investigation, because the FBI and the special counsel have, over a year, been trying to understand the relationship between people within the Trump world, with the president himself, and the Russians.

And they have gone as far back as the Miss Universe pageant back in 2013 to look at some of the records back then, to look at some of his financial dealings. And part of it is because, you know, they want to understand: was there something there, did something start there that sort of has extended into this relationship now and sort of the past year, which is what they've been looking at in the collusion investigation.

BLITZER: And you've also learned, Shimon, you and the team, that they're spending a lot of time looking at Trump Tower in New York City. Why the -- why has that become a focal point?

PROKUPECZ: One of the reasons is that, you know, there's obviously a lot of property with the Trump name, and also his family has been involved and some real estate transactions. And actually, what the FBI has done, is they have gone a floor by floor, in Trump Tower, to see who has used that property, who has occupied it, office space, some of the residential space. And they've actually found some very interesting connections to Russians, to people connected to Russia; and that has now become part of their investigation, as well.

BLITZER: Very interesting development.

And Pamela, the Mueller investigation, it's clearly moving along. Maybe accelerating. They're not only looking at possible collusion, but based on everything you and our team have learned, they're looking at the financial ties, obstruction of justice.

BROWN: Right, as we're -- as has been explained to our team, it's basically been set up like a mini U.S. attorney's office. So there are lawyers, even FBI agents from across the country, even filled offices in Los Angeles, coming into Washington; and they're separated in various groups.

So some groups are focused primarily on Paul Manafort. Another group is focused on Michael Flynn. And then you have the financial end of this, obstruction of justice, as well as the Russia collusion aspect. So each group comes in and is focused on one piece of the puzzle, Wolf.

BLITZER: I can only imagine how the president is reacting when he hears this, because he spoke of that red line before. And this is obviously going to deeply, deeply infuriate him.

Everybody stay with us. I want to bring in Democratic Congressman Eric Swalwell of California. He's a key member of both the Judiciary and Intelligence Committees.

Congressman, thanks for joining us.

REP. ERIC SWALWELL (D), CALIFORNIA: Thank you, Wolf. Good evening.

BLITZER: Let's begin with "The Wall Street Journal" bombshell, that the special counsel, Robert Mueller, has impaneled a grand jury in this Russia probe. Does that suggest to you that his investigation is now seriously intensifying?

SWALWELL: Well, this is what progress looks like in a criminal probe. So it's encouraging for us on the House Intelligence Committee to see that Bob Mueller and his team continue to make progress. Because that's all we want is for them to get to the bottom of this as soon as possible, and we'll do the same on the House Intelligence Committee.

BLITZER: Reuters is now reporting, Congressman, that a grand jury has already issued subpoenas in connection to the 2016 meeting between Donald Trump Jr., other campaign officials, with Russian lawyers over at Trump Tower in New York. What's your reaction?

SWALWELL: I'm glad they have, if that's the case. Because Wolf, when you read that e-mail chain, that showed a willingness and eagerness to work with the Russians to use dirt that they claim that they had on Hillary Clinton to win an election. So I would hope, just as a former prosecutor, that that is something that they are looking at intensely and running down.

BLITZER: As you know, President Trump has warned Robert Mueller, the special counsel, against looking into his private businesses. And now CNN can confirm that the special counsel's investigation is, in fact, focusing in on potential financial ties between Donald Trump and his associates, ties to Russia. Do you worry that the president will try to remove Robert Mueller after hearing about these revelations?

SWALWELL: Well, Wolf, the president does not set the parameters of what they are looking for. The Constitution does. There's a doctrine called plain view, which means essentially, if the cops go into your house lawfully to look for drugs, and they see a gun, they're not supposed to just look the other way. They're allowed to seize that and make that a part of their investigation.

But I do worry that this president, every step along the way, has tried to obstruct either the House's investigation or the criminal probe into the ties with Russia.

So, I am glad, though, that the Senate, it looks like, is trying to put guardrails in place in case the president tries to get rid of Bob Mueller, essentially sending the message that you can get rid of him on the criminal probe, but we will make it so that he can get put back in place. And so, I think that's all we want, is just Bob Mueller and his team to make progress, and then we in the House can report back, as well.

BLITZER: Yes, you're not the only one worried. There are a lot of Democrats and Republicans who are worried about that possibility, as well. In fact, there are two separate bipartisan bills right now in the Senate, which are designed to protect Mueller from being fired. Is there, as far as you know, a similar effort in the House?

SWALWELL: Well, we're concerned, as well, Wolf. But we believe right now that the best thing that can happen is that Bob Mueller proceeds, his team is able to chase every piece of evidence, and then, you know, if the evidence is there, report back to us. If it's not, report back to us.

So you know, we'll be back in session in September, but I do believe that the president's intimating that he will get rid of Mueller, or trying to undermine this investigation, goes to his intent. You know, people who have nothing to worry about don't behave in the way that this president continues to behave. And I think that tells us a lot about what was going on with the president, his team, and Russia.

BLITZER: Because you're on the Judiciary and the Intelligence Committees. Have your committees also taken a similar focus in on potential financial crimes?

SWALWELL: Well, Wolf, you know, we are broadly, I can say we're looking at whether any U.S. persons worked with Russia. We want to understand the degree that the personal, financial and political relationships that existed between Donald Trump, his family, and his team with Russia, whether that was just a bunch of coincidences or was it a convergence of Russia's interference campaign?

BLITZER: CNN has learned, Congressman, that potential leads about Trump associates are also being referred to the special counsel, even if they have nothing to do with Russia. Investigators hope that that will encourage subjects to cooperate. What do you make of that strategy?

[17:20:16] SWALWELL: Well, again, Wolf, I believe that, you know, I believe that the goal here is to understand what Russia did in the 2016 election, whether anyone on the president's team, because of their relationship with Russia, was working with the Russian interference campaign.

And as I said, you know, the law does allow that if you are lawfully looking for, you know, pieces of evidence with respect to the Russia investigation and you come across, you know, other evidence that would be incriminating, that you don't have to look the other way.

And so, I don't believe that there's any evidence that Bob Mueller is doing anything other than, you know, trying to understand what these relationships were, whether they amounted to crimes, and then getting back to us as soon as possible. And a grand jury gets us one step closer to that.

BLITZER: CNN has learned, Congressman, that Donald Trump's former campaign manager, Paul Manafort, initially came under some scrutiny after U.S. intelligence agencies collected communications between suspected Russian operatives, discussing their efforts to work with Manafort to coordinate information to hurt Hillary Clinton during the campaign. What's your reaction to that?

SWALWELL: Well, it doesn't surprise me that Paul Manafort was in that June 9 meeting back in 2016. He's also somebody who had worked with pro-Russian forces in Ukrainian politics. And so he is somebody that we would like to hear from, as well.

And I imagine if you're Bob Mueller, conducting your criminal probe, he's also a person that you want to, you know, understand just what was his relationship with the Russians at the time that they were interfering and trying to help Donald Trump.

BLITZER: Congressman, I want you to standby. There's yet more breaking news that's unfolding. We'll take a quick break, resume all of this right after the break.


[17:26:34] BLITZER: We're following multiple breaking stories right now, including a "Wall Street Journal" report that Special Counsel Robert Mueller has impaneled a grand jury as part of his Russia probe.

Also, a Reuters report that grand jury subpoenas have been issued in connection with a meeting between Donald Trump Jr., other Trump associates, and a Russian lawyer with ties to the Kremlin. We'll have a lot more on all of this coming up. We're back with Democratic Congressman Eric Swalwell of California. He's a member of the Judiciary and Intelligence Committees. We want to talk to him about leaked transcripts at the same time of President Trump's heated calls with the leaders of Mexico and Australia.

Congressman, stand by. I first want to get some new details. Our senior White House correspondent, Jim Acosta.

Jim, these transcripts obtained by "The Washington Post."

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. The White House won't confirm or deny the authenticity of what they're calling allegedly leaked classified documents. But clearly, the transcripts from his phone calls with foreign leaders are a big concern for this president, who promised time and again that Mexico would pay for a wall on the border, a promise that he appears to be prepared to break.


TRUMP: Who's going to pay for the wall?








ACOSTA: It was a key campaign promise pushed by then-candidate Donald Trump time and again, not just a wall on the border with Mexico but a wall that Mexico will fully fund.

TRUMP: We're going to build a big, beautiful wall. A big, beautiful wall. And we're going to have a door in the wall, and people are going to come into our country, but what are they going to do? They're going to come in legally.

Who's going to pay for the wall?




TRUMP: Who's going to pay for the wall?




TRUMP: Who's going to pay for that wall?




ACOSTA: But in transcripts of President Trump's January phone call with Mexican President Enrique Pena Nieto, obtained by "The Washington Post," it's clear there are cracks in that promise of a wall.

In the call, Mr. Trump says, "If you're going to say that Mexico is not going to pay for the wall, then I do not want to meet with you guys anymore, because I cannot live with that. I'm willing to say that we will work out, but that means it will come out in the wash and that is OK. Believe it or not, this is the least important thing that we are talking about. But politically, this might be the most important."

Pena Nieto stood firm, saying, "But my position has been and will continue to be very firm, saying that Mexico cannot pay for that wall."

The president's response, "But you cannot say that to the press. The press is going to go with that, and I cannot live with that. You cannot say that to the press, because I cannot negotiate under those circumstances."

TRUMP: Thank you very much.

ACOSTA: The president also appears to chalk up his victory in the New Hampshire primary to the state's opioid drug crisis. Mr. Trump tells the Mexican president: "I won New Hampshire because New Hampshire is a drug-infested den."

That comment drew bipartisan criticism from New Hampshire officials, with the state's GOP governor saying, "The president is wrong. It's disappointing his mischaracterization of this epidemic ignores the great things this state has to offer."

Democratic Senator Maggie Hassan was even tougher.

SEN. MAGGIE HASSAN (D), NEW HAMPSHIRE: His words were disgusting. They're an outrage. And my message really is this: He should stop insulting people and instead work with us to get the resources to our state and states all around the country who are also challenged by this epidemic.

ACOSTA: Another leaked transcript comes from the president's call with the Australian prime minister that reveals the two leaders bickering over an Obama administration plan to welcome refugees from Australia.

During the conversation, the president says he had a much friendlier call earlier in the day with Russia's Vladimir Putin. "It is an embarrassment to the United States of America, and you can say it just the way I said it. I will say it just that way. As far as I'm concerned, that is enough, Malcolm. I have had it. I've been making these calls all day, and that is the most unpleasant call all day. Putin was a pleasant call. This is ridiculous". The president had said that any reports of a testy call were fake news. The tense exchange leaked earlier this year made a splash on Saturday Night Live.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I'm tired and cranky and feel like I could just freak out on somebody.

STEVE BANNON, AMERICAN MEDIA EXECUTIVE: Then maybe you should call Australia.

MALCOLM TURNBULL, PRIME MINISTER OF AUSTRALIA: Mr. Trump, thank you for still accepting our refugees

TRUMP: Homie, say what? No refugees. America first, Australia sucks, your reef is failing. Prepare to go to war


ACOSTA: Now, the president will be delivering a speech in West Virginia this evening, the event is actually a political rally staged by his campaign. But earlier today, the president said he'll be making a big announcement tonight. So, he's potentially blurring the lines between a public and private event and if he's using a rally to unveil a new White House proposal or White House official joining his administration, he'll obviously have to face that accusation but well, he may also be tempted to talk about this news of the day that seems to be reigning down on top of his White House -

WOLF BLITZER, CNN ANCHOR: All right, Jim. Thank you. Jim Acosta reporting for us. Let me bring back Congressman Eric Swalwell. Congressman, you've seen the highlights from these phone calls between President Trump and the leaders of Mexico and Australia. What stood out to you?

REP. ERIC SWALWELL (D), CALIFORNIA: Well Wolf, I don't think anyone is surprised to hear that the president had enjoyed the call with President Putin more than anyone else he talked to particularly with our ally, the Australians. I mean, that is concerning that he views it that way. But Wolf, let me just say, when I think about what's going on in North Korea right now which is one of the greatest threats facing the United States and the world. We need a president who has friends. And when you're stitching together a coalition to address a threat like North Korea, you start with your traditional allies like the Australians, like Mexico, like our friends in NATO. And the president seems to continue to alienate them, and this transcript just provides further color as to how he's doing that.

BLITZER: Clearly this was a major leak of classified information, the transcripts of these two phone conversations. Here's the question, Congressman, if foreign leaders can't trust the government to keep them conversations with the president confidential, does that hurt America's ability down the road to conduct diplomacy, global policy, especially when it comes to what you point out, extremely dangerous and sensitive issues like North Korea?

SWALWELL: Yes. I don't like that, Wolf, I don't like that, you know, we're reading about it in a transcript because somebody on the president's own team put that forward. I don't know what the motivation could be, perhaps people are concerned about the president's hurtful policies and his reckless way of governing. But, you know, the transcript, if it's true, I am worried about the way this president is conducting foreign policy with our friends. And then, to throw in the face of one of our friends that he had a better conversation with an adversary who just hacked our election. That's concerning. That's taking us in a different direction. I don't think any of us want to be a part of.

BLITZER: Congressman Eric Swalwell, thanks so much for joining us.

SWALWELL: My pleasure, Wolf.

BLITZER: All right. Coming up, we're going to have more ahead on all of today's breaking news in the special counsel Robert Mueller's Russia investigation. Stay with us.


[17:37:41] BLITZER: We're following multiple bomb shell breaking stories. CNN has now confirmed that the Special Counsel Robert Mueller has impaneled a grand jury in the Russia probe and grand jury subpoenas have been issued in connection with the June 2016 meeting involving Donald Trump Jr., a Russian lawyer among others. CNN has also learned Robert Mueller's Russia investigation is exploring the potential financial ties to Russia, the president, members of his family. The Trump organization, something the president has previously called a red line that shouldn't be crossed. Let's bring in our specialists for some analysis, Gloria, the notion that a grand jury subpoenas have already been issued in connection with that June 2016 meeting at Trump Tower involving Donald Trump Jr. Among others with Russian lawyer, that's a significant development.

GLORIA BORGER, CNN ANALYST: Well, it is a development. And it is significant because it means that the Mueller investigation is proceeding very quickly. It means that this is a very serious investigation. And it means that he's going to continue. And I was talking to a source at the White House, however, who was cautioning me sort of not to go crazy over this, not to panic over this. Saying that the White House legal team is, "Highly content" with this development and that it's not causing any anxiety because as you know, on the record from Ty Cobb, the president's counsel over there in the White House, he has said that they intend to cooperate fully, and that this means that they see it as a sign that Mueller wants to proceed and get this over with very quickly. And of course they'd like nothing more than that.

BLITZER: Yes. Ty Cobb, the White House counsel, he issued a statement among other things saying, White House wasn't aware that Robert Mueller had started using a grand jury, but he did go on to say that the White House is committed to fully cooperating with Mr. Mueller. You know, Phil, you used to work at FBI, the CIA, how does a grand jury right now help this investigation move forward?

PHIL MUDD, CNN ANALYST: Look, we've seen the White House talking about how they want this to move forward. I would point out except for the truthfulness of witnesses including Don Jr. who couldn't manage to say this is what actually happened in the meeting until The New York Times broke it. So, that relates to the grand jury, if you can't trust the people you're interviewing, there are couple of other avenues. One of them is more interviews with people on the periphery, people who might know what happened. But I would be more interested in the data.

What the grand jury and the investigation is going to go after in terms of things like bank records, in terms of things like e-mail, phone. For example, did the Trump organization have financial contacts with Russians years ago who magically called during the campaign and said, hey, can you meet my friend and talk to them about Hillary Clinton? This is - the White House is obviously going to be anxious about it because I don't believe a word they're saying because I think the suggestion that Robert Mueller has some smoke, and that smoke is going to be about earnings.

BORGER: We don't know who's been subpoenaed.


BORGER: Right. Or what has - or what has been subpoenaed. Absolutely.

MUDD: But it shows that he's got something.

BORGER: Right. And I'm sure the president is pretty anxious.

BLITZER: Chris, the -- a few weeks ago, the president in an interview with The New York Times said that Mueller looking into his personal finances, finances at his business unrelated to Russia would be what was called a red line. Now we have a response to this new CNN reporting that you just saw from Jay Sekulow, the president's personal attorney, "the president's outside counsel has not received any requests for documentation or information about this, any inquiry from the special counsel that goes beyond the mandate, specified in the appointment, we would object to. How do you think the president is going to react to all of this?

CHRIS CILLIZZA, CNN REPORTER: Not well. Would be my guess. Now the question is does he react not well and fume in private or not well and fume in public via Twitter or --

MUDD: Yes.

CILLIZZA: I have a guess, but look, I do think, Gloria and I were talking about this before, I think exactly right. This is a test of John Kelly. John Kelly was brought in to restore order and organization. Now everyone says well, yes, we're going to make it more orderly and more organized. Who's the person in that White House that needs to be the most orderly and organized? Donald Trump. He is the one who continually, particularly as it relates to this probe --

MUDD: It's a witch hunt, a hoax.

BORGER: Right.

CILLIZZA: He says, you know, we're going to get rid of Bob Mueller. But, if he crosses this red line. I think you have to watch his rhetoric. Obviously he has a speech later, campaign style speech which he usually trying to rips and goes up pamper, says things that maybe the -- John Kelly wouldn't like. But then also, what is the recourse that statement there by Jay Sekulow about anything that goes beyond the direct probe here which is about Russia and the election. Well, clearly it's now gone beyond that. So they would object to it, well what does that mean? Does that mean we're going to object to it, but we know getting rid of Bob Mueller is a no go? Does it mean Trump might fire Bob Mueller? Obviously that's not -- we're not there yet. But when you say things like that, then you theoretically, there are consequences.

[17:42:44] BLITZER: All right. Jackie, why does the president get so angry when he hears that his finances are being investigated?

JACKIE KUCINICH, CNN COMMENTATOR: Well, he feels like that's some kind of violation. Remember, this is the same president that wouldn't release his tax returns because he just wanted everyone to take his word for it that he - his business dealings were sound and that he had as much money as he said he did. So he's always been very secretive about this information. Now there was some kind of -- there was a thought that maybe he would loosen up maybe when he actually got in the office. That has not happened.

And he's become even more territorial about this, but here's the thing about special counsel. The White House can't play red light, green light here and that's going to continue to frustrate the president. And Chris is right, whether that's public or privately, we'll have to see how that manifests itself. It's probably a little bit of both.

BORGER: Well, he has no control over the special counsel, which is what's so difficult for him. He thinks he should, but he doesn't. And you now even have congress saying, wait a minute, maybe we ought to pass a law that says if you try and fire the special counsel, we'll just reinstitute the special counsel or something to that effect. And by the way, if the president tried to fire the special counsel, how would his own lawyers react? I have to believe that they wouldn't -- they wouldn't look that the kindly and they'd be trying to talk him out of it every step of the way.

BLITZER: And every time he hears about these new developments involving Robert Mueller's investigation, I assume he goes back to the attorney general, Jeff Sessions, who recused himself and as a result of that, there is a special counsel.

CILLIZZA: The side bar here is, at least this week, Donald Trump has gone relatively quiet on Jeff Sessions in public. We haven't gotten a lot of disappointment. He believes, he has said this to The New York Times and other people, he believes there is a direct line between Jeff Sessions' recusal and where we are today. He does not think if Jeff Sessions didn't recuse himself, he believes this investigation would not exist.

KUCINICH: Right. Jeff Sessions tomorrow is going to have this press conference about leaks. He is going to be bringing up -- Dan Coats will also be there. And you have to imagine that Jeff Sessions is going to put on a very convincing show in order to sugar up the president confidence in him.

BLITZER: We've been reporting that one new development, these intercepts of Russian communications that U.S. Intelligence Community had, Russians speaking amongst themselves, but talking about Paul Manafort, the former Trump campaign chairman. What does that say to you that they heard these kinds of conversations and as a result they're investigating him?

MUDD: I would handle with care. Look, if you're going back to the boss, in this case, the boss is in Moscow, you're saying, we got great access, we're talking to Paul Manafort, we're really doing our jobs here in Washington, give us a pay raise. There is one aspect of this that's significant. If I'm looking at these intercepts, I'm looking at facts. For example, do they say when they spoke, what they spoke about, and I want to correlate that with other data.

Everything from what's on Paul Manafort's schedule to what he mentions in his own e-mails to whether he ever contacted these phone numbers again. I'm taking those with a grain of salt, but every fact I'm going to pull out and bounce it against the other data I get from Manafort to see what's truth and what's fiction in there.

BLITZER: This is - go ahead.

CILLIZZA: I was just going to say, I -- Phil will know this better, but I'm surprised at least at the pace at which this moved. When if first -- when Bob Mueller was first appointed, I was told by folks who allegedly knew, well, this is going to be a long process. No. It's not been short process, this is a year that the FBI has been looking into this, but the bob Mueller piece of it has not been terribly long. The grand jury being impaneled. I mean, you know, it feels like it is moving --

BLITZER: Right. We're moving into a new stage.

BORGER: Don't forget, you had a grand jury already impaneled in Virginia from Michael Flynn. So, you know, the question is, whether this is in addition, new, they moved this because it's a different jurisdiction for technical reasons, you know, who knows, but we did already have one grand jury.

BLITZER: They wanted it in D.C. presumably, it's closer to Robert Mueller's office, wherever that is. I'm not exactly sure where that office is. Everybody stand by, we have a lot more reaction to all of today's breaking news and Special Counsel Robert Mueller's clearly expanding investigation of the Trump team and Russia. Plus, the former money man for Kim Jong-un takes us inside the spider web of smuggling that provides the cash to prop up the north Korean regime.


[17:51:30] BLITZER: We have much more ahead on this afternoon's on breaking news. CNN has confirmed the Special Counsel Robert Mueller has impaneled a grand jury in the Russia probe and grand jury subpoenas have been issued in connection with the June 2016 meeting involving Donald Trump Jr., a Russian lawyer and others. Also tonight new and unique insights into the smugglers' paradise that is Kim Jong- un's North Korea. CNN's Brian Todd has spoken with a defector who used to be one of Kim's top money men. And Brian, tell us more. What did you learn?

BRIAN TODD, CNN CORRESPONDENT: Well, today, we have new information from this defector on exactly how KIM JONG-un's regime gets weapons and other banned material out of the country to sell on the black market. This man knows how Kim gets his cash and helped him get it, funneling tens of millions of dollars a year to the young dictator. August, 2016, a freighter called Jie Shun is intercepted heading to the Suez Canal. Underneath 2,000 tons of iron ore on board, around 30,000 rocket propelled grenades made in North Korea, part of what a North Korean defector describes as a spider web of smuggling to line the pockets of Kim Jong-Un. How do North Korean smuggling operations work? Are there people with false names, are there ships with false names being moved around?

RI JONG HO, NORTH KOREAN DEFECTOR (through translator): The smuggling is conducted by any and every means you can imagine. Larger items are mostly done using shifts. For example, by filing the cargo vest where what's written is different from what is really being shipped.

TODD: For decades, Ri Jong Ho was a top wrangler of cash for the Kim Jong-Un's regime. He says he sometimes hand bags of cash to ship captains leaving from China where he was stationed for North Korea. Redefected in 2014. He says he work mostly in legal imports and exports but also gave us insights into North Korea's smuggling operations which he describes as being almost unstoppable.

RI: On the open sea, the yellow sea, there are hundreds of fishing boats both from China and North Korea and all the smuggling is done by these so-called fishing boats. Instead of fishing they are involved in smuggling. And it is very difficult even for China to stop these hundreds of fishing boats.

TODD: According to the U.N. and outside analysts, Kim's regime sells weapons on the black market, uses its diplomats to move illegal drugs like methamphetamine . They've traffic and counterfeit American dollars, fake Viagra, even endangered species.

BRUCE KLINGNER, SENIOR RESEARCH FELLOW FOR NORTHEAST ASIA, THE HERITAGE FOUNDATION: Kim Jong really sits atop a criminal network that would make Don Corleone or Tony Soprano proud.

TODD: Tonight, new U.S. sanctions are aimed at tightening limits on North Korean shipping to stop the flow of elicit goods leaving and arriving in North Korea. Those might include luxury items for Kim and his inner circle like that well-known Mercedes limo which the supreme leader is often seen stepping out of.

RI: The Mercedes-Benzs for example provided for the leader, they're not legally imported. They are being smuggled in.

TODD: The cash that Ri was so good at getting to his boss experts say pays for Kim's weapons and buys off top generals and others to keep them from turning on him.

MARCUS NOLAN, EXECUTIVE VICE PRESIDENT, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: He has to maintain political loyalty and so he needs sort of walking around money to hand out.

TODD: North Korean officials at the U.N. have denied that their government engages in smuggling. Now, as for our interview with Ri Jong Ho, a North Korean official there at the U.N. says the defector is telling lies to make money and to save his own life. Wolf?

BLITZER: Brian Todd reporting. Thanks very much. There's breaking news we're following, a grand jury is impaneled and subpoenas issued in the special counsel's Russia investigation. Now CNN is learning new details of what investigators are focusing on.


BLITZER: Happening now, breaking news. Mueller's big move, CNN confirms at the special counsel has impaneled a grand jury that has issued subpoenas in the Trump-Russia investigation. We will have the latest on the criminal probe and where it may be leading. The money trail. The financial records related to the president under scrutiny as Mueller's team looks into potential crimes that may be unrelated to the 2016 campaign. Stand by for CNN's in-depth reporting. The Manafort connection. We're also learning more about the investigation of the president's former campaign chairman, his Russia contacts and allegations of collusion.