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White House Tries To Distance Itself From Aides Charged; Sources: Trump Leaning Toward Jerome Powell To Run Fed; Manafort and Gates Plead Not Guilty to Charges; Academic Matches Profile of "Foreign Contact 1." Aired 9-9:30a ET

Aired October 31, 2017 - 09:00   ET

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

[09:00:00] POPPY HARLOW, CNN ANCHOR: The most concrete evidence to date of Russian efforts to influence the election and the Trump campaign's apparent receptiveness of those overtures.

Moments ago the president weighed in on this major development. Here's what he wrote. "Few people knew the young, low-level volunteer named George who has already proven to be a liar."

JOHN BERMAN, CNN ANCHOR: Well, there is at least one person involved in the Trump campaign who did appear to know volunteer George a little. His name was Donald Trump. Listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: George Papadopoulos. He's an oil and energy consultant. Excellent guy.

(END VIDEO CLIP)

BERMAN: That was the voice of President Trump introducing excellent guy, Papadopoulos. You can also see this photo meeting with the "Washington Post" and Papadopoulos and other foreign policy advisers.

However much the president knew about him before he might be about to learn a whole lot more because the special counsel's office calls him a pro-active cooperator which to legal insiders screams wire, wire, wire.

Let's begin at the White House with Joe Johns and a president, Joe, this morning on the attack.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: That's absolutely right. And the president's tweets this morning referencing the fact that George Papadopoulos that surprise guilty plea that we heard about just yesterday and was accused of making false statements to the FBI.

Let's look at the president's tweets. "The fake news is working overtime as Paul Manafort's lawyer said there was no collusion and events mentioned took place long before he came to the campaign. Few people knew the young, low-level volunteer named George who has already proven to be a liar. Check the Dems," the president tweets this morning. So referencing the fact that yes, he's a cooperating witness but also

has been accused of false statements. And this may seem a little extreme, certainly, to call someone like this a liar on Twitter, but on the other hand it is, if you will, trial practice 101, trying to impeach a witness, perhaps even before that person gets on the stand. Also an indication that despite the fact that we have heard the president very upset, even seething over yesterday's developments. It's clear that the legal strategy is making its way into his tweets.

The president has also at times indicated that he did not know George Papadopoulos. Also, we have been told by sources here at the White House he was seldom seen at Trump Tower. All of this, obviously, part of a strategy to discredit this individual who appears to have the potential to play a big role in this case as it develops. Back to you.

HARLOW: Joe Johns at the White House. Thank you very much.

Let's go now to our justice correspondent, Jessica Schneider.

And, Jessica, a member of Mueller's team made it clear yesterday that what we have seen so far is a, quote, "small part of a large investigation." So what's next?

JESSICA SCHNEIDER, CNN CORRESPONDENT: So this story really developing on two fronts, Poppy. So first of all, we'll go to the case against Paul Manafort and Rick Gates. That is moving full steam ahead. Both men due back in court Thursday. But meanwhile the restrictions on them are extensive. Both are under home confinement in addition to $10 million and $5 million bond respectively.

So really what does that mean? Well, both men can't leave their homes. They're only are allowed to when they meet with their lawyers, attend court or for medical or religious purposes. And Manafort and Gates must check in daily by phone with federal authorities.

Now as for that bond, they'll be forced to pay on it, $10 million and $5 million only if they violate the terms of their release.

Then, of course, there's the George Papadopoulos guilty plea. That is packing the most punch here in Washington. Papadopoulos is called a pro-active cooperator by prosecutors meaning he's been assisting them with this wide-ranging Russia investigation. And Papadopoulos, he's admitted to repeated contacts with Russian nationals after he became a foreign policy adviser for the Trump campaign, and the fact that they promised him dirt and e-mails on Hillary Clinton and that he even tried to set up meetings with Russian officials and members of the campaign team.

Now of course we saw this morning the president calling Papadopoulos a liar. Sarah Sanders yesterday referred to him as merely a volunteer in the campaign, but we've seen the e-mails released in the federal and the court paperwork and it makes clear that Papadopoulos did communicate with Paul Manafort and even Trump campaign national co- chair Sam Clovis, who encouraged Papadopoulos at one time to travel to Russia to get that alleged dirt on Hillary Clinton. Now Clovis has since told the "Washington Post" that he was just being

polite and he actually supposed -- opposed the trip. But, you know, John and Poppy, more information, it is likely to come out from Papadopoulos.

[09:05:02]And prosecutors have even put it ominously saying that his guilty plea is just a small part of what's to come so stay tuned -- John and Poppy.

BERMAN: All right. Jessica Schneider, thanks so much.

Who exactly was George Papadopoulos talking to overseas?

HARLOW: Right.

BERMAN: Who were these foreign contacts? We have new developments on that.

CNN's Nic Robertson in London with much more.

Nic, what are you learning?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: What I'm learning from a source here is that he met with George Papadopoulos in the context of Papadopoulos telling him that he wanted to explain some of the president's comments -- President Trump's or candidate Trump's comments at that time about the Middle East, and that was the context that this source met him in.

This was in this sort of middle of April last year, that the course met with George Papadopoulos. He describes him as a nice guy who really on the issue of foreign affairs appeared to be quite out of his depth was the way that this particular source characterized Papadopoulos. Out of his depth in terms of foreign affairs, didn't really sort of know the details of what he was talking about.

My source was introduced to George Papadopoulos by the gentleman known -- sometimes known as the professor, Joseph Mifsud, who was running a diplomacy school at that time in London. This was the conduit for which my source met Papadopoulos. The source knew Mifsud for quite a number of years. His conversations around about that time with Mifsud, Mifsud was telling him that he had good connections in Russia, that he knew -- had met Putin and had dinner with Putin, and he added as well that Mifsud told them that they, the Russians, had a bunch of stuff on Hillary Clinton.

BERMAN: All right. Nic Robertson for us in London. Fascinating piecing this altogether.

HARLOW: Yes, many more pieces still to be put in place. But we appreciate that, Nic.

Joining us to talk about all of this, our legal analysts Laura Coates, Michael Zeldin. Of course, Michael, formerly a special assistant to Bob Mueller, now the special counsel. And CNN contributor Norman Eisen, and he worked on cases in the past with, again, Mueller. Thank you all for being here. Let me begin with you, Michael Zeldin.

All that experience you have working with Mueller. So the president's attack this morning is to call the guy who has already flipped a liar. Smart?

MICHAEL ZELDIN, CNN LEGAL ANALYST: Well, he is a liar. He's a convicted liar. He lied to the FBI about the nature of his contacts on behalf of the campaign with Russian intermediaries so he is a liar. I don't think that's what the president --

HARLOW: I don't think that's the context the president was saying it in.

ZELDIN: Exactly. But the reality is, is that this fellow, Papadopoulos, presents a very interesting problem for the president. In the statement of facts Papadopoulos says these are not all the facts. When he pleaded guilty, he said there are more facts here, this is not everything. So Mueller has more stuff. Then it says this is a small part of a larger investigation. And then it says this guy is a proactive cooperator, so he's been cooperating for three months, which means he probably had recorded communications with others in the campaign, which means that they're going to have testimonial evidence and transcripts of what they said.

It's a very dangerous political and legal gambit. I think Ty Cobb is correct to tell the president keep cooperating. If there's nothing there, Mueller will decline the prosecution. He's got the backbone to do that and just go along. But that's not apparently in the president's DNA.

BERMAN: Laura, a small part of a much larger investigation, as Michael notes, in this statement of offense about George Papadopoulos. And note that the facts that we know do not constitute all the facts known to the party. The big hint that there's a lot more out there.

LAURA COATES, CNN LEGAL ANALYST: That's very foreboding for people in Washington, D.C. and who may be close to the president's inner circle or on the Trump campaign team to hear that information, to know that they're not going to be forthright about everything they might know, which tells you, you're probably going to have an influx of people, who previously spoke to the FBI or somebody else and want to correct their statement in some way, or say, you know what, since I know that you want to prosecute people for false statements let me ensure that my statement was not at all misleading.

And remember, it is true that he has been convicted of pleading guilty to making a false statement to the FBI, but the FBI was aware of that false statement as of January 2017, and they've been building that case every since and he pled guilty a few weeks ago. The underlying substance about what the FBI was aware of, the contact with foreign agents and the substance of e-mails and communications, he could not lie about that. They've already seen it with their own eyes.

[09:10:01] And so to discredit this person Papadopoulos is not going to hold much water when the FBI was already aware of the information substantively about what he lied about then. HARLOW: And when you have a picture meeting with him.

COATES: Right.

HARLOW: And your team, and you call him an excellent guy.

Norm, to you, what does it tell you, and even more significantly, what message do you think it sends to other, you know, potential targets, potential witnesses that they were able to seal this guilty plea until yesterday?

NORMAN EISEN, CNN CONTRIBUTOR: Well, it demonstrates that Mueller is using every tool in the prosecutor's tool kit to look into all the allegations here, including the collusion. And ultimately the biggest question of all, did President Trump know about any of this and did the president obstruct justice?

So by sealing this and waiting until yesterday, Mueller is a very savvy prosecutor. He knows that there's going to be arguments, oh, the Manafort and Gates indictments don't relate to collusion, so he waited until the day that those arguments were going to pop up and he released his collusion intensive guilty plea.

The president is on the bubble on his obstruction liability and the attack on one of Mueller's witnesses this morning is probably against the advice of Ty Cobb and John Dowd, against the strategy and puts the president in more peril. Prosecutors don't like it when you attack their witnesses publicly.

BERMAN: You know, Michael, it is interesting. If you look at the pattern here, you have this person -- you know, this professor offering George Papadopoulos information, dirt on Hillary Clinton and thousands of e-mails. Well, Donald Trump, Jr., was offered dirt on Hillary Clinton also by someone connected to the Russians there.

Is that a pattern there that is something that this special counsel will be looking into?

ZELDIN: Absolutely. These offers were essentially the same. And the heart of it is the e-mails. Everyone is, on the Trump campaign, trying to get these e-mails. And these are two offers with respect to the Hillary Clinton e-mails.

And what's interesting, when you look at the timeline is there's an offer made and then President Trump makes statements publicly. There's an offer made for the e-mails and President Trump says, Russia, if you can hear me, or I love WikiLeaks, or there's an offer made to Don Jr. meeting and the president says there's going to be a big speech coming up about Clinton and the dirt.

So there seems to be a connection between offer to the campaign on information and then statements publicly by the president.

HARLOW: Right.

ZELDIN: I can't dismiss that as just coincidence. HARLOW: So, talking about the timeline, which Michael, Laura, is

right to bring up, you had the Papadopoulos statement about the thousands of e-mails being offered by the Russians in April then it was July that the president said, you know, Russia, if you're listening, why don't you get these e-mails, we all want to see them.

But it is important to note, is it not, Laura, that none of these offers from Papadopoulos for these meetings with Russians were actually accepted and granted? You know, yes, you know, Sam Clovis responded, he said, to be polite, but no actual meetings that we know of came from these. Significant?

COATES: It is significant. Of course you have to first suspend all disbelief you're just trying to be nice when you're encouraging somebody to engage in conspiracy to commit a crime of getting the hacked e-mails or whatnot to assuming he actually was just being nice for a second for the sake of argument.

I will say that it is significant that he did not have a response, but it's not significant legally that he still attempted to commit a crime. There's a whole code in the federal code, a whole section devoted to the idea of attempting to commit felonies, and those carry the same amount of weight and jeopardy oftentimes as the completion of the crime. And so simply the attempt is not going to be enough to exonerate these individuals if there are more to come.

BERMAN: You know, Norm, it struck me yesterday the lawyer for Paul Manafort in this public statement, the first thing he said is, the president was right, there is no collusion. Isn't his number one role to defend his client Paul Manafort? So why does he think that statement helps his client? Could it be he wants something from the president?

EISEN: He was starting the process of advocating to the president for a pardon for Paul Manafort. You saw two very dramatically different strategies yesterday. One is the -- what appears to be the scorched earth defense that Manafort is launching, and the other, the cooperative strategy, the guilty plea from Papadopoulos.

You know, ultimately Manafort's fate to some extent rests in the hands of the president so his lawyer wants to please the president. Not totally, however, because these are also state crimes.

HARLOW: Right.

[09:15:00] EISEN: -- the president. Not totally, however, because these are also state crimes, which the president doesn't have the power to pardon, and there are reports that Mueller is working with the New York State AG, Eric Snyderman, so that -- it's a very complicated chess game going on. But I think that was a pardon ploy yesterday.

BERMAN: It was a notable statement. All right. Laura Coates, Michael Zeldin, Ambassador Norman Eisen, thanks so much.

What about the investigation? What do they think about it on Capitol Hill? Republicans being impressed, how will they weigh in?

HARLOW: Plus, White House Chief of Staff John Kelly jumps into the debate overnight over removing confederate memorials, and uses the words, quote, "good faith" on both sides, saying, a lack of compromise led to the civil war, the controversy about that.

Also, right now, 70 percent of Puerto Rico is still without power after Hurricane Maria. Minutes from now, FEMA Chief Brock Long on the hot seat over the federal response.

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[09:20:07]

HARLOW: This morning, the president trying to keep his distance from former campaign adviser, George Papadopoulos, and it seems like Congress is trying to keep its distance too from weighing in on the whole probe.

BERMAN: Joining us now, Lauren Fox, CNN congressional reporter, and Caitlin Huey-Burns, national political reporter for "Real Clear Politics." Caitlin, you know, it feels to me like the sun has risen on a whole new Washington this morning.

That the immediate political impact to the fact that someone has pleaded guilty to something that deals to the heart of the issue of Russian collusion. It changes things. How does it change the political stakes here?

CAITLIN HUEY-BURNS, NATIONAL POLITICAL REPORTER, "REALCLEARPOLITICS": Certainly. I mean, I think the progress in the Russia investigation has been so incremental up until now. It has been hard for the public to see the point in all of this, and also, you heard from Republican lawmakers, kind of questioning what the end result would be and why are we doing this.

You also saw some Republicans trying to curtail the funding for this. I think it certainly changes the game in a variety of different ways. First of all, the idea that George Papadopoulos has been working with the special counsel for months now, certainly raised the questions of what else comes from this?

And then you also have on the political side here Democrats now see -- Democrats who had been cautious about really playing up the Russia probe might change their tune. Republicans very wary about weighing in too heavily here because of the fallout that is to come.

And interestingly enough, you've also heard some support from people like Chuck Grassley on the Judiciary Committee saying, this is great. DOJ is -- in a way this is great that DOJ enforcing foreign agent laws, which they had not done before.

HARLOW: Well, speaking of Chuck Grassley, Lauren, let's look at this. There's unique video of him fleeing the interview yesterday, I mean, being asked about this. I think we can pull it up for you guys.

BOLDUAN: I can dramatically re-enact it -- there we go.

(VIDEO CLIP)

BERMAN: He snuck out the back.

HARLOW: He did, Lauren. He did, Lauren. Your beat is Capitol Hill. Why not confront this stuff head on?

LAUREN FOX, CNN CONGRESSIONAL REPORTER: I think part of the theme yesterday at the press conference was they were talking about unrelated judicial nominees. They wanted to keep staying on message, and I think what this press conference moment sort of revealed is how difficult it will be for members of Capitol Hill to say on message.

Let's remember, this is the big week for tax reform. House Republicans are expected to unveil their bill tomorrow. Obviously, that's going to make a big difference here if members of Congress have to keep talking about the Mueller investigation.

I think many members have tried to say yesterday, look, we will stay on message and not get distracted, but whether or not they can keep focusing on tax reform is going to be really up to them and up to reporters, who are going to be asking a million questions about the Mueller investigation in the upcoming days.

BERMAN: And the president keeps on giving them new reasons to ask questions, like this attack this morning, Caitlin, calling George Papadopoulos a liar, going after a key cooperating witness in this case right now.

Steve Bannon, we know, Caitlyn, is telling the president he should be much more aggressive in fighting the special counsel's investigation right now. Do you think that's good advice? And do you think the president will take it?

HUEY-BURNS: It's not good advice, but we saw yesterday, Sarah Huckabee Sanders trying to kind of downplay the idea that they may try to fire the special counsel, although, she said not planning to.

What's interesting here, regarding kind of the message component of what this week was supposed to be is that, you know, tax writers on Capitol Hill are arguing that they can walk and chew gum at the same time.

They are not going to be necessarily glued to their televisions and forgetting to write tax legislation, but the PR aspect, of this, I think is really significant. They were kind of banking on the president to be on the same page with them, keeping the general focus of the public on tax reform.

Remember on health care, they had a very difficult time in terms of actually selling the bill to the public, and they still need to do that on tax reform. That's a key part of this whole process is the public reaction to this, of course.

And so, this certainly makes that more complicated. The president has shown that he is not going to really stay silent on this. He does have some allies on Capitol Hill in terms of trying to shift the focus to the Clintons.

But you also have many Republicans, who are very concerned about the president taking action here as it pertains to Mueller and this investigation. They don't want him to cross that line, but we will see what happens with that.

HARLOW: Lauren, if the president does keep up these attacks, as he has indicated he will this morning, and frankly, keeps up the focus on the Mueller investigation.

[09:25:06] Do you think from all of your reporting on the Hill, it does cripple him when it comes to getting some lawmakers, who are on the fence on some parts of this tax deal that we are going to see tomorrow from -- from getting onboard with the president?

FOX: Yes. On Capitol Hill, Republicans already struggle to trust the president that when they agree on tax policy that the president is going to be consistent, is going to go out and sell exactly what they have already agreed to in private negotiations.

This adds one more element of, you know, trusting whether or not the president is going to be able to use the bully pulpit and go out and campaign, you know, something that members always say is the president is very good at going out and getting the base all rallied up around something.

If the president says it's a good idea, the base will believe him and they really need him here on tax reform because this is going to be a controversial bill. There will be K street lobbyist, who are going to defend on Capitol Hill tomorrow after this bill is unveiled, and they need the president to go out and sell it for them.

HUEY-BURNS: And on that note, it's important to note that this is just the start of this, right?

HARLOW: Yes.

HUEY-BURNS: And so this is an investigation that figures to play out into at least next year, which is the mid-term election, and putting all the more pressure on the Republicans to pass the tax reform bill so that they can go and say, look, here's what we've doing with our government mandate. So, you have this hanging over, of course, that's all problematic.

HARLOW: All right. Caitline, Lauren, thank you both. We appreciate it.

We are just moments away from the opening bell on Wall Street, just a day away from the president's tax plan, and a few days away from his new fed chair pick.

BERMAN: Christine Romans, chief business correspondent, here with that. CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes. There's a lot going on this week. You know, this list is getting smaller and smaller and it looks as though the president is zeroing in on this candidate to be the next fed chief, Jerome Powell, 64 years old, and an investment banker.

He was appointed to the fed in 2012 by President Obama, but he is a Republican, and he has worked with Janet Yellen over the past few years very closely. In terms of what we expect from him in monetary policy?

A lot of people on Wall Street say he has a similar background as Janet Yellen in terms of slowly and carefully raising interest rates again, but different in terms of how he feels about regulating Wall Street.

You know, the president has promised that he would like to peel back, roll back, do away with post financial crisis banking regulations. Jerome Powell, it seems as, though, he would lean toward losing some of the rules for small banks that have complained about some of those regulations.

What are we expecting in terms of fed interest rate policy? Well, they've been raising rates. They've raised rates a couple of times. We are expecting that to continue. What does that mean for you? Increased credit card rates, and auto loan rates, and higher mortgage rates. That's the real feel effect of what the fed does for you.

But this is one of the most powerful positions in the world. And Janet Yellen, the president has said good things and not so nice things about Janet Yellen. She is one of the most powerful people in the world and the first woman to run the fed.

If she is not reappointed, and many think that she will not be, it will be Jerome Powell, she would be the first person in 40 years not to have two terms at the fed. Also, you know, an economist has been the fed chair, and so that will change.

HARLOW: This lets him -- if it is Powell make his own mark, but not stray too far from the Yellen playbook.

ROMANS: Let's remember the president could still change his mind. That's always important, the president could still change his mind.

BERMAN: I think they like to pretend that he changes his mind late, but in fact, it does not actually happen, but we'll see.

HARLOW: We're watching. Romans, thank you so much.

So, what do Republicans in Congress make of this Mueller investigation and the latest we've seen? One will join us, next.

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