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Judge Orders Government to Turn Over Material to Cohen's Legal Team; Comey: 'It's Possible' Trump is Compromised by Russia. Aired 5- 6p ET

Aired April 16, 2018 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. Secret client. President Trump's personal lawyer, Michael Cohen, is forced to reveal in court that the secret name of his client list is FOX News host Sean Hannity, one of the president's biggest boosters. Why was Hannity talking to the man known as the fixer?

[16:59:57] FBI evidence. As Michael Cohen fights to suppress evidence seized in the FBI raids against him, why is the president's legal team joining that battle against federal prosecutors?

Stormy hearing. Porn star Stormy Daniels steals the spotlight from Michael Cohen when she shows up at his hearing. What does her appearance mean for her own fight against the man who funded her hush money agreement.

And "morally unfit." Former FBI director James Comey says President Trump is morally unfit, lies constantly and treats women like they're pieces of meat and Trump said Comey committed many crimes. How do they really feel?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news, President Trump's lawyer, Michael Cohen, appears in court over an FBI raid on his office and residences. But first, he's upstaged by the appearance of porn star Stormy Daniels. And then he's ordered to reveal the secret name of his client list none other than FOX News host Sean Hannity.

That comes as President Trump battles with former FBI director James Comey, who calls him morally unfit and says it's possible the president is compromised by Russia.

I'll speak with Congressman Gerry Connolly. He's standing by. And our correspondents and specialists, they're also standing by with full coverage.

One bombshell after another in a New York federal court today. Let's go straight to CNN crime and justice reporter Shimon Prokupecz.

Shimon, you were inside the hearing all day, and it has just ended. What is the latest? SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: Right. So a

small victory here perhaps, Wolf, for Michael Cohen's attorneys. They have been asking the judge to allow them to review the material that they obtained in the raid so that Michael Cohen can review it, have his attorneys review it, he can view it. And then there will be discussions about what is privileged and then who will review that material. Will it be a taint (ph) team, an FBI team, prosecutor's team that reviews this material? Or will it be an outside special -- it's called a special master. Will that be the person who reviews this material.

In the end, Wolf, what's important here is that for the government -- for the prosecutors and the FBI, this is certainly a delay in their investigation. They wanted the opportunity to begin reviewing this material for their investigation. Well, with the judge's decision today, they are now not able to do so and then will -- going to have to wind up here back in court as the lawyers continue to litigate what the investigators will have access to.

BLITZER: Very interesting. Michael Cohen, the president's long-time personal attorney, he was forced to reveal that secret name on his client list, and it was Sean Hannity. Tell us about that.

PROKUPECZ: Well, Wolf, as you can imagine, we were just about an hour into this hearing, with Stormy Daniels here, and one of the arguments that -- that Michael Cohen's attorneys came in and prepared to make was that they should not release a client list.

And then this morning they filed a motion with the court, and in that motion, in that briefing paper, they did not list a name of one of the clients. It was a third client. They did not list that name. Well, after arguments pretty much for about an hour from both the attorneys, from Michael Cohen and then a media attorney, the judge essentially ordered Stephen Ryan, who is representing Michael Cohen. He's from Washington, D.C. He flew in to handle this matter. She ordered him to reveal the name.

And as you can imagine, there was complete shock in the courtroom. Several of us from the media had run out to report this news. It was a stunning moment, certainly shocking in that now Sean Hannity is this person who the Michael Cohen team did not want to reveal.

We don't know what his connection is to the case, what kind of work Michael Cohen was doing for him. But we do know that Sean Hannity has denied it.

BLITZER: He did, in fact, deny it, and he said this on his radio show, just a little while ago; said he did have legal conversations with Michael Cohen, but he had this explanation. Listen.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS HOST: So I've known Michael a long, long time. And let me be very clear to the media. Michael never represented me in any matter. I never retained him in the traditional sense of retaining a lawyer. I never received an invoice from Michael. I never paid legal fees to Michael. But I have occasionally had brief discussions with him about legal questions about which I wanted his input and perspective. And I assume that those conversations were attorney-client confidential.

(END VIDEO CLIP)

BLITZER: And he also tweeted that those conversations he said, quote, "were exclusively about real estate."

[17:05:13] So what was the reaction to that explanation, Shimon, from Sean Hannity that, in all of the legal discussions, there was no payment, no legal fees, but he did assume they were discussing real estate?

PROKUPECZ: So the attorneys for Michael Cohen did not specify as to, really, why they didn't want to release his name. They did say there was concern about whether some embarrassment issues. They said that they had consulted with this client, who we then learn is Sean Hannity. They spoke with him over the weekend. He did not want his name revealed in connection to the search warrant.

And it seemed that they were more arguing that this was going to be embarrassing for Sean Hannity over any privilege issue, because the judge kept saying, "You really have no standing on privilege with this." And then in -- really in a stunning fashion, Wolf, she ordered the name released.

BLITZER: Who's going to eventually decide whether this is privileged and should be kept secret or whether all the information should be released publicly? Would that be the federal judge, Kimba Wood?

PROKUPECZ: Well, the next step here is once Michael Cohen's attorneys are done reviewing the materials, they're going to come back and decide and argue as to what, perhaps, the government should not see.

Ultimately, what the government needs in order to continue with this investigation is to review these materials, and what they have set up is what's called a taint team, a filter team. That team does not investigate this case. It would be prosecutors and FBI agents who just go through the material that is relevant to this investigation, and that then gets sent to the investigators, who could either use it for their criminal case or whatever it is, their grand jury presentation materials that they could bring before a grand jury and, certainly, any of that material could aid them in any potential prosecution.

But keep in mind, Wolf, it was revealed in a transcript today that the federal government, the FBI has already extensive records, has extensive work that they have done on this case. They said so as much in their court filings, but they also were saying that this was a fast-moving investigation.

This now, though, this development here today could potentially slow it down. But, you know, in listening to some of the prosecutors' arguments today, as to the search warrant, they say that a magistrate judge found that there was possible criminal conduct in some of this material that they obtained, which is why she granted these search warrants.

So they think clearly here they already have something -- information enough established for whatever case that they're building. But they still need to look through these documents, which will now be probably delayed for some time.

BLITZER: And amidst all of this, Shimon, Stormy Daniels was there inside that federal courthouse. How did she conduct herself? What was she doing there and what did she say when she exited?

PROKUPECZ: So she entered the court just before it started. She was the last person in the courtroom. There was a seat for her in the back. She sat in a folding chair. Mr. Avenatti sitting close by. She did not say anything in court. She looked around. She smiled. There were court sketch artists who were sketching her. Avenatti and her had some brief conversations. But she did not speak in court.

She and Michael Cohen, at least while I was in the courtroom, never saw each other. She sat behind him, so he never saw her walk in. She did have some things to say when she walked out of court a short time ago. And here is what she said, Wolf.

(BEGIN VIDEO CLIP)

STORMY DANIELS, ALLEGES AFFAIR WITH DONALD TRUMP: For years Mr. Cohen has acted like he is above the law. He has considered himself, and openly referred to himself, as Mr. Trump's fixer. He's played by a different set of rules or, should we say, no rules at all. He has never thought that the little man or especially women, and even more women like me, mattered. That ends now. My attorney and I are committed to making sure that everyone finds out the truth and the facts of what happened. And I give my word that we will not rest until that happens. Thank you very much.

(END VIDEO CLIP)

PROKUPECZ: So, Wolf --

BLITZER: Go ahead, Shimon.

PROKUPECZ: -- really no legal reason for her to be here in the courtroom. But nonetheless, Michael Avenatti, her attorney, felt the need to have her here.

And then one last point, Wolf, I just want to make about Michael Cohen. There was this scene in the courtroom when he walked in. and he took a seat at the defense attorney's table. He was talking to reporters. The court was allowing some of the reporters to sit in the jury box. He was talking to them, saying hello to the court sketch artist, as well.

And then there was this moment where he was shaking hands with the prosecutors in this case. Something I don't rarely ever see, I mean, it's -- to a defense, a potential defendant in a criminal matter, standing behind prosecutors, shaking hands with them. Certainly left a -- a kind of interesting take on things for me. His attorneys also were shaking their hands.

[17:10:11] But nonetheless, we do expect them all back here at some point to argue exactly what they don't want the government to see in this case.

BLITZER: Yes. This case, a lot of extraordinary -- almost unbelievable developments unfolding. Thanks very much, Shimon, for that report.

The court fight has the president's legal time lined up against federal prosecutors. Let's bring in our justice correspondent, Evan Perez. Evan, what does all this mean for President Trump? Does he have a legal argument to make here?

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Well, look, I think it's an uphill climb for the president to be able to try to shield what the -- what the FBI and what the prosecutors believe they have.

But clearly now, this is a pretty significant victory for Michael Cohen's team and for the president. They are now going to be able to look at the materials to determine whether or not they want to have a legal argument to try to shield some of this stuff. And a judge, Wolf, is going to make that final decision.

But, you know, based on what the -- the government said in their court filing that Shimon was just talking about, you know, they're talking about this as a fast-moving investigation. They're talking about having devoted a lot of resources.

And it appears -- it confirms what we've all thought, which was that the reason why they did this raid last Friday was that they were pretty far along in their investigation. They already know a lot of what is in these documents and in this -- in this material that was seized, including the electronic e-mails. Some of the documents that they have. So they already know a lot of what is here. And so perhaps they're very close to closing and making a decision as to whether or not to bring charges.

BLITZER: It's pretty extraordinary that Michael Cohen's lawyers, President Trump's lawyers, they're fighting the U.S. attorney, the Justice Department, in effect.

PEREZ: Right. And they're -- and they're making the case that the Justice Department, their own Justice Department, cannot be trusted on this; and that is a remarkable thing for them to be arguing.

Look, I think it shows you how concerned and how worried they are about this case in the southern district of New York. I think they're more -- definitely more worried about this than even the collusion investigation, which is more of a political thing. I think they think they can fight that politically. This is something altogether different. We're talking about criminal laws, a much wider breadth of criminal laws that are applicable, and I think this is why they're very, very concerned.

BLITZER: Yes. As they should be right now. Thanks very much, Evan Perez, for that.

Let's bring in Democratic Congressman Gerry Connolly of Virginia. He's a member of both the oversight and Foreign Affairs Committee.

Congressman, let's get right to the issue. The president's attorneys are going to -- head to head with the president's own Department of Justice. Where does this -- where is this standoff heading?

REP. GERRY CONNOLLY (D), VIRGINIA: Well, the United States has a real moment of truth here. Are we a nation of laws, or of men? No man is above the law. We established that in Watergate. We're going to have to re-establish it in the era of Trump. But the legal process, in my view and that of most of my colleagues here in Congress, I think, needs to play out.

BLITZER: Some of the president's allies, as you just heard Evan report, believe that this Michael Cohen investigation in the southern district of New York, the U.S. attorney investigating there, poses an even bigger threat to the president than Robert Mueller's Russia probe. How do you see it?

CONNOLLY: I don't know if that's true, but I do know that today's announcement that Sean Hannity was the third client to me deserves a lot of attention.

You know, Sean Hannity has been among the lowest of the low, wrestling in the mud of birther conspiracy, Seth Rich conspiracies about the young man who tragically was murdered here in Washington, that maybe that was a different kind of murder. All kinds of conspiracy theories about Hillary Clinton. Distributing false and fake news left and right.

And now what we learn is, as he's defending the president's lawyer on television, he has a conflict of interest, an ethical conflict of interest. He is one of those clients. He never revealed that. And I think that's a big stain on, certainly, Mr. Hannity but also FOX News.

BLITZER: So what do you think FOX News should do?

CONNOLLY: I think they ought to fire Sean Hannity. I think he's -- he is so into this, like a pig in the mud, he can't get out of it. And I think he deserves to be fired. He cannot -- his word can never again be trusted, given the fact that he consciously did not reveal this relationship.

BLITZER: Even if there was no money exchanged between himself and Michael Cohen? He said -- he got some advice and then in this tweet he just posted he said it was on real estate matters.

CONNOLLY: Yes. I heard -- I heard the clip you played, Wolf. But he then invoked the phrase client-attorney privilege. You can't have it both ways. If you are not a client, then you're not entitled to client-attorney privilege. If you are entitled to that privilege, you're a client, whether you paid money or not.

[17:15:05] BLITZER: Yes. He did say at end of that little clip we played, "And I assume that those conversations were attorney-client confidential."

CONNOLLY: That's right.

BLITZER: And he also made it clear, apparently, over the weekend, based on what we heard in the courtroom, he didn't want his name to be released. But the federal judge, in this case Kimba Wood, made the lawyers for Michael Cohen release his name and, of course, they did.

You sit, Congressman, on the Oversight Committee. Is this a matter that Congress should be looking into?

CONNOLLY: Absolutely. And it's a tragic moment in congressional history that Republican leadership here wants nothing to do with any kind of oversight or investigation in the Trump administration. I guess they're exhausted from having done too much of it in the previous administration. But they see, hear and speak no evil. So we're not looking at anything. We're not looking at conflicts of interest. We're not looking at security clearances. We're not looking at overspending. We're not looking at false travel. We're not looking at these kinds of ethical issues. We're not looking at hush payments to porn stars, or long-term payments to long-term Playmate affairs, and I think it's a shame.

I think the American people deserve a Congress that plays its constitutional role. We are abrogating that role right now in this Republican Congress.

BLITZER: Congressman Gerry Connolly of Virginia, thanks for joining us.

CONNOLLY: My pleasure, Wolf.

BLITZER: There's more breaking news we're following. President Trump's lawyer, Michael Cohen, appears in a federal court today. And is upstaged by the porn star Stormy Daniels, whom he paid to silent about her alleged affair with President Trump.

And Cohen is forced by the judge to reveal that the mystery name on his client list is the FOX News host Sean Hannity. What's Hannity saying about this stunning disclosure?

(COMMERCIAL BREAK)

[17:21:20] BLITZER: Our breaking news, President Trump's lawyer, Michael Cohen, appears in court over an FBI raid where he's upstaged by the appearance of the porn star Stormy Daniels and then he's forced to reveal that the mystery name on his client list is FOX News host Sean Hannity.

That comes amid an extraordinary war of words between President Trump and the man he fired as the FBI director, James Comey. Our political correspondent, Sara Murray, is working this part of the story for us. Sara, what's the latest on this truly bitter fight?

SARA MURRAY, CNN POLITICAL CORRESPONDENT: It definitely is a bitter fight and James Comey addressed something that many people have wondered about, which is maybe why has President Trump been to kind to Russian President Vladimir Putin in the past? Is it possible Russia could have something on America's sitting president? James Comey says he doesn't have the answer.

(BEGIN VIDEOTAPE)

JAMES COMEY, FORMER FBI DIRECTOR: I actually believe he's --

MURRAY (voice-over): Former FBI director James Comey using the media blitz around his new book to drop a bombshell.

GEORGE STEPHANOPOULOS, ABC NEWS: You can't say for certain that the president of the United States is not compromised by the Russians?

COMEY: It is stunning, and I wish I wasn't saying it. But it's just -- it's the truth. It always struck me and still strikes me as unlikely, and I would have been able to say with high confidence about any other president I dealt with, but I can't. It's possible.

MURRAY: Comey refusing to rule out the possibility that President Trump could be compromised by the Russians, noting that even in private, Trump didn't have a negative word to say about Russian President Vladimir Putin.

COMEY: At least in my experience, he won't criticize Putin even in private, even in a meeting with three people in the Oval Office. He is arguing that he gave a good answer when he said, essentially, we are the same kind of killers that Putin's thugs are. And that struck me.

MURRAY: Comey, who was fired by Trump last May, now said he believes the president may have been trying to obstruct justice when he made this request about the investigation into his former national security adviser, Michael Flynn.

COMEY: I took it as a direction. His words were, though, "I hope you can let it go."

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: No. Next question.

MURRAY: Trump denies he ever said that. But Comey, who took notes after his meeting with Trump, disagrees.

COMEY: It's certainly some evidence of obstruction of justice.

MURRAY: Amid his publicity push, Comey is also defending his decision to reopen the probe into Hillary Clinton's private e-mail server, just weeks before the election, a move some of his critics panned as overtly political.

STEPHANOPOULOS: The concern, if she wins, this comes out several weeks later, and then that's taken by her opponents as a sign that she's an illegitimate president.

COMEY: It must have been. I don't remember consciously thinking about that, but it must have been. Because I was operating in a world where Hillary Clinton was going to beat Donald Trump, and so I'm sure that it was a factor.

MURRAY: But with Trump sitting in the Oval Office, the looming question is whether he will take extraordinary steps to bring a swift end to the Russia investigation by attempting to fire Special Counsel Robert Mueller.

COMEY: This would, I hope, set off alarm bells that this is his most serious attack yet on the rule of law.

MURRAY: For Comey's part, he says he doesn't believe the president should be impeached.

COMEY: I hope not. Because I think impeaching and removing Donald Trump from office would let the American people off the hook and have something happen indirectly that I believe they're duty bound to do directly.

MURRAY: Still, he says Trump is hardly suitable to sit in the nation's highest office.

COMEY: I don't think he's medically unfit to be president. I think he's morally unfit to be president.

A person who sees moral equivalence in Charlottesville, who talks about and treats women like they're pieces of meat, who lies constantly about matters big and small and insists the American people believe it, that person is not fit to be president of the United States on moral grounds.

(END VIDEOTAPE)

[17:25:02] MURRAY: Now Comey may believe the president is morally unfit to serve in the Oval Office. President Trump had some own -- his own choice words for Comey. He's called him a liar, a leaker and, essentially, a criminal.

BLITZER: Yes. Says he belongs in jail, too. You're absolutely right. All right. We're going to continue to follow up on this part of the story. Sara, thank you very much.

Coming up, there's more breaking news. President Trump's lawyer, Michael Cohen, appears in a federal court today, and so does Stormy Daniels. Afterward, she lashes out at the man who paid her to keep quiet about an alleged affair with Donald Trump.

And Michael Cohen drops a courtroom bombshell, forced to reveal that his mystery client is the FOX News host Sean Hannity, one of the president's biggest boosters.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: The breaking news this hour, the judge in the case of President Trump's lawyer, Michael Cohen, is ordering the government to turn over seized material to his attorneys. They want to review it so they can tell the judge how much of it might be subject to what's called attorney-client privilege.

[17:30:41] And in a surprise twist, Cohen revealed his mystery client is Sean Hannity of FOX News.

Let's get some more with our experts and our analysts. And Jeffrey Toobin, this revelation from Michael Cohen's lawyers that Sean Hannity is the so-called third mystery client. He's got three clients. He's had three clients: the president of the United States; Elliott Broidy, a former GOP fundraiser; and FOX News host Sean Hannity. Potentially, what does this all mean for the case and especially for the president?

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Well, it's a very puzzling situation, because Sean Hannity went on the radio this afternoon and said, "He's never represented me. I mean, we have conversations about real estate, about things, but he's not been a lawyer. I've never retained him." So there seems to be some difference of opinion.

Why that might be significant is if there was an attorney-client relationship, then communications between them, including e-mails, might be privileged and thus off limits to prosecutors. But if there is no attorney-client privilege, if they're simply friends or business associate or even business partners, there is no attorney-client privilege, and the government can examine all of -- any sort of papers involving -- involving both of them.

I don't know that it would have a big effect on the president one way -- one way or the other. It's really about -- about the two of them.

BLITZER: If it really was a legal issue, Laura Coates, and you're our legal analyst. He said on his radio show, Sean Hannity, "I assume that those conversations" -- conversation he had with Michael Cohen -- "were attorney-client confidential."

LAURA COATES, CNN LEGAL ANALYST: That's a new category of evidence. I mean, as attorney-client privilege, that's what you're talking about. The idea that he would have attorney-client confidential material that could not be disclosed is odd if there was no relationship.

And remember, the burden of the person to decide or to determine whether it's confidential, whether it's privileged, whether there's any interaction whatsoever, is the attorney. And so the person who actually owns the privilege would be the clients.

So if Sean Hannity's statement is correct and he says, "He was never my attorney, and I'm not asserting a privilege here," well, guess what? The government's case got a whole lot easier, because now they're saying to the judge, "Your Honor, we never thought there was an attorney-client problem with having the information seized. It wasn't the normal attorney's office we were trying to raid. This is somebody who has no privilege-based argument." He just helped the government's case.

BLITZER: Mark Preston, give us your perspective, because he has been, Sean Hannity, one of the big supporters of the president on his TV show and his radio show. MARK PRESTON, CNN POLITICAL ANALYST: Yes, and has really become the

biggest cheerleader and has done a very good job on behalf of the president, going out and galvanizing support behind the president at a time when he's not only under attack by Democrats, under questioning by -- but the media but also under criticism by his own Republicans. So to see Sean Hannity connected in some way to Mr. Cohen doesn't surprise me at all very much, Wolf.

BLITZER: I'm curious, you know, Phil. He's got three clients, Michael Cohen, in the past, this year and last year. We'll put them up on the screen. The president; former GOP fundraiser Elliott Broidy, who Michael Cohen helped work out a $1.6 million payment to a "Playboy" Playmate whom he impregnated; and FOX News host Sean Hannity. Sean Hannity says that he was talking to Michael Cohen almost exclusively about real estate.

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: So sort of two and a half clients. Because one of them kind of says, "He was sort of kind of an adviser, but I didn't cut a check to him."

Look, the older I get, Wolf, the more I find humor in life. There is some humor here. What Cohen is going to do -- I'm not a lawyer, but I've seen this before -- what Cohen is going to do is to say, "My business relationships are really complicated. When the feds look at all the stuff I've got in my office, all my business relationships are going to be compromised, because they're going to see stuff from a bunch of clients."

I presume, and this is a guess, the judge is going to look at all his information and say, "Let me get this straight. You mean to tell me the feds can't separate out one and a half other clients beyond Donald Trump so that they can continue the investigation that they started when they came to ask us for the search warrants for your office, for your hotel room, for your home?" I think this is going to end up with the feds still getting the information. This looks to me like a road block.

BLITZER: You know, and Jeffrey --

TOOBIN: But --

BLITZER: Yes, go ahead.

TOOBIN: But it is a road block. I mean, and Cohen did have a good day in court today. Because instead of having the government exclusively review these documents for attorney-client privilege, the lawyers for Michael Cohen are going to be able to look at these and make arguments that these are -- that these are privileged.

[17:35:14] Now at a minimum, that's going to -- that will slow down this process considerably. And delay is always the friend of a defense in criminal law. So the fact that Cohen's lawyers and the president's lawyers are going to get to review this document, even though they may yet lose on the privilege claims, will certainly slow the process down. BLITZER: You know, Laura, it's interesting that not only Michael

Cohen and his lawyers in this federal courtroom today, but the president had lawyers in the courtroom today, three new lawyers, Joanna Hendon, Christopher Dysard, Reed Keefe. And what's interesting is that the president's lawyers and Michael Cohen's lawyers and Michael Cohen's lawyers are fighting the Justice Department.

COATES: Right. You know, it's odd how this is working out.

But remember, the reason that he has to be there, Donald Trump, is that he is really a true client of an attorney. He owns the privilege. He is the one who can say whether the attorney can speak or not.

If Michael Cohen was so predisposed to say, "I'd like to tell everyone what we talked about," guess what? He still could not if there was a true relationship here.

But just to be very clear for everybody. The reason they had this warrant announced the way it was in this kind of covert mechanism is because they didn't trust Michael Cohen to be forthcoming in and give all the information over readily. And so when they're reviewing the material, don't have the impression they're going to go back to Michael Cohen's house, he gets everything back in his garage and then he hands out what he'd like to give back to the prosecutors.

They will probably have a centralized location of sorts where they look at the information and say, "We're going to decide this together." And it may be a delay, but it won't be the basic impediment.

BLITZER: We're learning more details of what exactly was seized in these FBI raids of Michael Cohen's home, his hotel room, his office, his safety deposit box. We're getting that information. We'll take a quick break. We'll reveal it right after this.

(COMMERCIAL BREAK)

[17:41:36] BLITZER: More details, breaking news emerging right now. Details of what was seized in the federal raids on President Trump's personal lawyer, Michael Cohen.

We're back with our reporters and analysts.

And Jeffrey Toobin, we're now being told, CNN's Kara Scannell reporting that Stephen Ryan and an attorney for Michael Cohen said among the items taken during the FBI raids on Michael Cohen's home, his office, his hotel room, his safety deputy box included Trump Organization materials. Trump Organization materials.

Now, you remember the president at one point suggested in that "New York Times" interview, you bring in the Trump Organization, you're crossing a red line. What's your reaction -- what's the president's reaction going to be to that?

TOOBIN: Well, this is very significant for two reasons. First of all, business records and e-mails, financial documents,

contracts, bank statements, are very unlikely to be covered by attorney-client privilege. So the government is almost certainly going to get its hands on them.

The other reason it's significant is because it is in the area that suggests that the president is most concerned about, whereas he said in that "Times" interview, "If you look for financial records of mine, other than about Russia, that's a red line." That again could prompt the president to take action against Mueller, against this investigation, against Rosenstein. This is the thing he is most sensitive about. Government -- prosecutors access to his personal business records and we'll see what he does in response.

Once you go after Trump Organization documents, that brings in the Trump family as well. And for the president, that is an extremely sensitive issue.

TOOBIN: It may well.

BLITZER: And what the judge is suggesting, Laura, is that there will be what they call a special master to go through these documents and to see what should be included and what shouldn't be included.

But the Trump attorney, Joanna -- the president's attorney, Joanna Hendon, said she and her client, the president of the United States, oppose a special master and we don't think a special master will protect the privilege of the president, she said.

COATES: Well the attorneys for the president show a consistency. He doesn't like things that are special: a special counsel, a special master. He believes that, in some way, I'm sure, that it's just going to be a rubber stamp on what they're doing.

And that is what the argument of many defense attorneys are when you talk about a taint team. That you're going to try and put the genie back in the bottle. "I won't look at it until I tell you if it's OK or not. It's OK, and I think I have an epiphany on my legal strategy from then on."

So they're concerned by that, but a judge is not persuaded by that paranoia. This is a practice that's largely in place for a reason, because how else are you going to be able to isolate and compartmentalize that which is privileged and that which is not? You can't simply trust the person who has a vested interest in concealing the information to tell you what you can and cannot see.

BLITZER: If everything was, you know, legal, involving the Trump Organization, and everything else, why would they be so concerned about releasing this information.

PRESTON: Let's assume that it is all legal. Let's assume that it's all aboveboard and whatever they found in these documents. Doesn't mean it's not embarrassing. And every time that this information is touched, which goes back to the reason why they hate the idea of the special counsel, when you have a special counsel investigating, means more people are coming in, more people are seeing these documents that we know that the president is very, very, very concerned about people seeing. We haven't even seen his income taxes yet, and for gosh sakes, his income taxes, that has been something we've seen from every president, Wolf.

MUDD: Let me pick up on one theme here to cut to the chase, and that is if you look at when we open a Russia investigation, initially under Comey and the FBI and now under Special Counsel Mueller, that's an investigation presumably about inappropriate cooperation with Russia.

Where does that end up? Paul Manafort gets a financial irregularities indictment.

If I'm in the White House looking at what's happening with Cohen, I'm saying, as soon as you get that information that's supposed to be related to inappropriate activity by Cohen and it shows that potentially somebody in the Trump Organization did something wrong, you're going to get another Manafort process.

The FBI will go after that. And all of a sudden, it was supposed to be Cohen, and the family is involved in the investigation.

PRESTON: Right.

WOLF BLITZER, CNN ANCHOR: Yes. And there are lots we need to assess.

And there's more breaking news we're following. Sean Hannity of Fox News speaks out after he is revealed to be the so-called mystery client of President Trump's lawyer, Michael Cohen.

Plus, the President's filing in the Cohen case. Is he trying to shut it down?

(COMMERCIAL BREAK)

[17:50:39] BLITZER: We're following breaking news. Sean Hannity of Fox News revealed as the mystery client of Michael Cohen, President Trump's personal lawyer.

Cohen is waging a legal battle to keep federal investigators from looking at some of the documents seized from his home office and hotel in a series of raids.

CNN's Brian Todd is working this part of the story for us.

Brian, there is another twist in the case involving President Trump.

BRIAN TODD, CNN CORRESPONDENT: There is, Wolf. President Trump and his attorneys have entered the fray in the Cohen case, battling to keep investigators from examining some of Cohen's records seized in an FBI raid last week.

Trump's and Cohen's attorneys argue some of those records are protected by attorney-client privilege. But, tonight, former federal prosecutors tell us the President is risking being implicated in the Cohen investigation. (BEGIN VIDEOTAPE)

TODD (voice-over): Michael Cohen avoids reporters' questions as he leaves federal court.

Under orders from a judge, Cohen reveals that Fox News host Sean Hannity is his third previously unnamed client.

Tonight, Cohen is fighting to keep investigators from reviewing electronic devices and documents seized in an FBI raid of his office and other properties. He's arguing some of those records are protected by attorney-client privilege.

And now, Cohen's top client has jumped into the fray. Donald Trump's attorneys have made their own court filing in the case, calling the FBI raid disquieting and backing Cohen's attempt to prevent some of the records from being examined by investigators.

Trump's lawyers want to do their own review of the seized Cohen records to screen out any confidential information.

A key question tonight, why has the President gotten involved?

SCOTT FREDERICKSEN, FORMER ASSOCIATE INDEPENDENT COUNSEL, DEPARTMENT OF JUSTICE OFFICE OF SPECIAL COUNSEL: This is more akin to a bottom of the ninth play. The evidence that may be at stake here, the government has seized, a federal judge has allowed that so far, could be absolutely toxic to Mr. Cohen and, perhaps, to Mr. Trump. And that's why this is so critical.

TODD (voice-over): Legal experts tell CNN, the U.S. attorney for the Southern District of New York who's been investigating Cohen for months must have been confident of potential evidence against Cohen to order the raid.

The Republican Chairman of the House Oversight Committee vouched for the judge who signed off on the warrant.

REP. TREY GOWDY (R-SC), CHAIRMAN, HOUSE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM: The most important thing we know is that a neutral, detached federal judge, who has nothing to do with politics, signed off on this warrant.

TODD (voice-over): Former federal prosecutors tell CNN, the odds are against Cohen and Trump being able to prevent investigators from looking at Cohen's records.

JOSEPH MORENO, FORMER PROSECUTOR, DEPARTMENT OF JUSTICE: It's going to an uphill battle to assert that the federal government is not allowed to look at the evidence seized from Michael Cohen's home and hotel room and safe deposit and electronic devices because we have processes in place to protect people's rights to privilege while, at the same time, allowing prosecutors to obtain the evidence they need to further their case.

TODD (voice-over): Another key question tonight, if Trump wanted to shut down the Cohen investigation, could he?

FREDERICKSEN: This investigation is out of New York. His own appointee is the U.S. Attorney there. The number two there is running this investigation. Unless you're going to fire the entire leadership, you can't shut this down.

(END VIDEOTAPE)

TODD: Now, Cohen has denied any wrongdoing in this case. Trump has called the FBI raid an attack on the country.

Former prosecutors tell us they're waiting to see about the next big developments in the Cohen case -- one, if Cohen is charged; two, whether there's any evidence of crucial communications between Cohen and Trump that might implicate the President; and, three, whether Cohen might flip and turn on his boss.

Something that those who know Cohen say is very unlikely -- Wolf.

BLITZER: Yes. So far, Brian, there don't appear to be many communications that investigators have between Cohen and Trump that would need to be protected by what's described as attorney-client privilege.

TODD: Right, Wolf, at least as far as we know publicly. So far, prosecutors have said they have not uncovered any e-mails between Cohen and Trump, but we have to see what some of those electronic devices seized from Cohen's raid are going to reveal about potential communications between them.

BLITZER: Yes, they've certainly seized a lot of material.

Brian Todd, thank you very much.

Coming up, more on the breaking news, a series of courtroom bombshells.

A judge weighs in as President Trump's lawyer, Michael Cohen, tries to suppress records seized in a government raid.

But Cohen is forced to reveal that his secret client is the Fox News host, Sean Hannity. And he's upstaged by porn star Stormy Daniels who also showed up to promote her own legal fight with Cohen.

[17:55:01] (COMMERCIAL BREAK)

BLITZER: Happening now, breaking news. Keeping Trump's secrets.

A new ruling tonight as the President's lawyer, Michael Cohen, tries to block prosecutors from reviewing records seized from him. The President is in the fight, too. We're going to tell you what the judge ruled just a little while ago.

Hannity exposed. The President's attorney, Michael Cohen, is forced by a federal judge to reveal a mystery client. It's Fox News host Sean Hannity. What kind of work did Cohen do for one of Mr. Trump's staunchest on-air ally?

Seeing Stormy. The porn star makes a dramatic appearance at Michael Cohen's hearing as her case against the President appears to be gaining momentum. Tonight, she's speaking out about the Trump fixer who paid her hush money.