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White House Caught Flat-Footed; Trump Repaid Cohen; Giuliani Interview Speaks Questions; Mueller Focused on Collusion. Aired 12- 12:30p ET

Aired May 3, 2018 - 12:00   ET



DANA BASH, CNN HOST: Welcome to INSIDE POLITICS. I'm Dana Bash. John King is on assignment.

Rudy Giuliani told me in a phone conversation this morning that there is no daylight between him and President Trump on this new blockbuster strategy, coming clean that the president actually reimbursed his lawyer/fixer Michael Cohen for hush money payments to porn star Stormy Daniels.

Plus, mixed messages from the White House on whether North Korea will release three American detainees there any time soon.

And an unusual recanting of what it's like to be grilled by the special counsel from a former member of Trump's team.


MICHAEL CAPUTO, FORMER TRUMP CAMPAIGN AIDE: They know more about what I did in 2016 than I knew. They reminded me of a dinner and the name of the restaurant and the time of day that I had totally forgotten. It was a -- not a very memorable meal. These guys are ready for whoever comes into that room. It's a very unpleasant experience. I likened to a proctology exam, but I think I'd prefer the proctologist.


BASH: That's colorful.

We begin with the political and legal bomb detonated by Rudy Giuliani, revealing on Fox News last night that the president reimbursed his lawyer, Michael Cohen, for pre-election hush money payments to adult film actress Stormy Daniels.


RUDY GIULIANI, TRUMP'S ATTORNEY: That money was not campaign money. Sorry, I'm giving you a fact now that you don't know. It's not campaign money. No campaign finance violation. So --

UNIDENTIFIED MALE: But they funneled it through the law firm.

GIULIANI: Funneled through a law firm and then the president repaid it.

UNIDENTIFIED MALE: Oh, I didn't know that he did it.


UNIDENTIFIED MALE: There's no campaign finance law.



BASH: That came, of course, after the president and his staff had repeatedly and vehemently denied knowing anything about the $130,000 paid to Daniels before the election. So why the 180? Well, Giuliani told me this morning that the strategy in revealing this now is to wrap this up so that it doesn't take on a life of its own.

I asked if they were worried that the feds seized documents in the Michael Cohen raid that maybe proved the president paid the hush money. Giuliani replied, no. He insisted that they care confident that they can win their legal battle, arguing that the Cohen raid was improper and that the things that were seized wouldn't even be able to be used legally in any way, shape or form.

But then, of course, there is grumbling that we are hearing from the West Wing today from White House staffers upset that they were caught flat-footed in all this. On that, Giuliani, rather, was unapologetic. He said that the president is his client and he doesn't talk to the White House staff.

On that, let's head straight to CNN's Kaitlan Collins at the White House who has been doing some excellent reporting on this topic.

Kaitlan, fill us in on what you're hearing from your sources.

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Well, Dana, imagine you're someone who works in this White House and for the last few months you've been maintaining very strictly that the president did not know anything about this payment, did not have any communication with Michael Cohen about this, backing up what the president himself said less than a month ago, I should note, on Air Force One, that he didn't know where that payment came from and he didn't know about it.

And then the president's new lawyer, Rudy Giuliani, who's been on board for less than a week, who does not work in this White House, goes on Fox News last night and makes this explosive statement that actually the president did reimburse Michael Cohen for the payment, so he did know where the money came from and he did know about the payment, of course.

So the White House staffers were really caught off guard by this. They say that they were not expecting Rudy to go and make those comments last night. They say that with that interview on Fox News, between that last night and his interview this morning, they feel like he's really undermined their entire defense strategy, not just on Stormy Daniels and what they've been saying for the last few weeks, but also regarding the former FBI Director James Comey and the special counsel.

White House staffers essentially feels that this is out of their control now because the president and Giuliani speak, and then Giuliani clearly goes on Fox News, talks about what he and the president discussed and leaves the White House really in the dark here, Dana.

BASH: It's certainly not the first time, but maybe the most important time that the president has acted as his own communications director.

And, look, I mean let's be honest here, Kaitlan, Giuliani actually told me this morning that there's no daylight between him and the president. And it seems pretty clear that he's right. A lot of data points for that. But one in particular is the president's Twitter feed. When he's not happy with somebody in his inner circle, he makes that very clear, no matter how close they are. This morning the president's tweets backed up and amplified what Giuliani said.

[12:05:09] COLLINS: You know very clear when the president is happy with someone and when he is not. After John Kelly did that one Fox interview where he said the president's views on immigration had evolved, the president quickly got on Twitter and said they had not.

And, of course, this morning, we see the president reiterating what Giuliani said last night on Fox News, that he did pay Michael Cohen back for that payment, explaining it essentially, saying that that means it's not a campaign finance violation and again denying that he had an affair with Stormy Daniels, the woman that Michael Cohen did pay that payment to.

And, of course, the president wasn't upset with what Giuliani said. And Giuliani told you as much that he and the president spoke after that interview last night. And, Dana, this just goes to show with our reporting about the White House officials being caught flat-footed. But, once again, the president is his own best communications director and there is no questions about that.

BASH: It certainly seems that way. And in this case in particular, obviously, because this is about his own legal issues, and he's dealing with his close friend, Rudy Giuliani, who is now also his lawyer. This is absolutely fascinating.

Thank you for that report, Kaitlan.

And here with me at the table to share their reporting and insights, Michael Shear with "The New York Times," Karoun Demirjian of "The Washington Post," Sahil Kapur with "Bloomberg," and Mary Katharine Ham of "The Federalist."

Thank you all, one and all, for joining me.

Michael, you wrote "The Times" piece this morning about all of this. What is your sense from talking to sources there about the president and Giuliani and why now?

MICHAEL SHEAR, WHITE HOUSE CORRESPONDENT, "THE NEW YORK TIMES": Well, I think we're still trying to figure that out. I must say there was some -- there's some level of satisfaction as a reporter who scrambled late at night to get this story to sort of think about the fact that the White House staff was also scrambling in the same way to figure out what was going on.

BASH: Misery loves company.

SHEAR: Right. So there was some satisfaction there.

I think we're trying to figure it out. Look, clearly the president's legal staff is -- has been -- is and has been in upheaval for several days, for weeks, trying to -- people going in, coming out, Emmet Flood coming in, Ty Cobb going out. So in some ways there shouldn't be a surprise that as the people are leaving, the strategy is also changing as well.

I think what's hard to understand is why they think -- or what legal advantage they think they are providing by essentially admitting that they've been misleading the public for a long time about what the president knew and when he knew it. And I think what we're all going to have to try to figure out over the next, you know, hours and days is, there has to be, between the president and Giuliani, there has to be some reason that they discussed that they thought they were going to create a legal advantage by this.

BASH: And let's just remind our viewers exactly what the president and Michael Cohen himself have said about this. Let's just start back when this became public February 13th. A statement from Michael Cohen. In a private transaction in 2016, I used my own personal funds to facilitate a payment of $130,000 to Ms. Stephanie Clifford. Neither the Trump Organization nor the Trump campaign was a party to the transaction with Ms. Clifford, and neither reimbursed me for the payment, either directly or indirectly. The payment to Ms. Clifford was lawful and was not a campaign contribution or a campaign expenditure by anyone.

Now I'm reading this again. He says the Trump Organization, the Trump campaign.

SHEAR: Look what's left -- look what's left out.

BASH: He didn't say -- he didn't say Donald Trump in his --

SHEAR: Right.

BASH: You know.

SHEAR: Right.

BASH: So he might be on safe ground here.

But then Donald Trump himself did talk to reporters. Here's what he said.


REPORTER: Did you know about the $130,000 payment to Stormy Daniels?


REPORTER: Then why did Michael -- why did Michael Cohen make those if there was no truth to her allegations?

TRUMP: Well, you'll have to ask Michael Cohen. Michael is my attorney. And you'll have to ask Michael.

REPORTER: Do you know where he got the money to make that payment?

TRUMP: No. I don't know.


BASH: Now, Karoun, lying to the press is not a crime. If he would have said that to the --


BASH: It happens a lot.

DEMIRJIAN: A lot, yes, definitely.

BASH: As much as we -- as much as it pains us to say. But, you know, if he said that to a grand jury, it would be different.

DEMIRJIAN: Right. The question is also, just, look, there's this pending defamation lawsuit out there. I don't know that him saying, no, I don't know what it's (ph) talking about can really feed into that. But you can be sure that Stormy Daniels' lawyer is going to try to use anything that has been said, that is, you know, selling the -- what we now, you know, by taking Giuliani at his word, what is -- was a lie, as to trying to spin that to their advantage in that particular legal battle.

It also, just generally speaking, opens up the question of where else has the president and potentially Michael Cohen and other people in their dealings been spinning mistruths to the public, been in just flat out lying about what they do and don't know and --

BASH: And does it -- does it matter? Are we in the post-truth environment, as John Kasich likes to say, which hopefully we're not?

DEMIRJIAN: Well, does that -- I mean there's -- you have to ask the question for two different venues, right? Does it matter for the various legal problems the president is up against?

BASH: Right.

DEMIRJIAN: And does it matter in the court of public opinion? Probably not for his die-hard base, who seem to be willing to support him no matter how this story changes. But for other people, how closely are they listening and how closely -- maybe how much is this affecting how much they trust him, because trust in the guy in the White House, even if he's not up for re-election, can matter for the midterm elections.

[12:10:16] BASH: It turns out there's a player involved in this who is listening, James Comey, who just tweeted about what we're talking, but I want to read it for our viewers. He said, I know the New York FBI. There are no storm troopers there, just a group of people devoted to the rule of law and the truth. Our country would be better off if our leaders tried to be like them rather than comparing them to Nazis.

SAHIL KAPUR, NATIONAL POLITICAL REPORTER, "BLOOMBERG": There is a legal issue that comes out of this. You know, one is a credibility problem I think of the president and his allies contradicting what he said previously, but they (INAUDIBLE) campaign finance is very much real in terms of this payment.

George Conway, a conservative lawyer, tweeted out FEC guidelines just recently and said -- which basically say, a relative or friend of a candidate, given money for other purposes of influencing an election for federal office is not considered personal funds of the candidate and it is subject to the per person limit, which is $2,700 per person per election This payment was $130,000. So there will be legal questions to answer as a result of this. Whether Giuliani had a strategy, a purpose for bringing this up, who knows. The people I've spoken to in the president's orbit have no idea.

BASH: But, MK, let's go back to what James Comey just did, which is he's defending the raid on Michael Cohen.


BASH: He's defending the individuals working there who did it. And that is obviously to combat what Giuliani is saying and what he told me is -- he insists is part of their -- the relief that they think that they're going to have, which is they -- this is their argument, that the raid was not legal, therefore anything seized was not legally taken and it can't be used. So you have that whole subplot going on here, which is no small thing.

HAM: Right. And that's working its way through the courts, as it should. The federal government should be put through its paces whenever it raids the office of an attorney, because that is an important right that we have. So they should have to show their work on this to whatever extended possible.

Do I think that the Trump team or the Trump camp ends up on the winning side of this? I don't know. I mean their -- so they're fighting on several fronts. Morally we can just stipulate gutter town on all of this, the original event, the payoff and the lying about it. Politically, nah, like, people don't care about the original Stormy Daniels story that much are not surprised that Trump would do such a thing which he denies doing. But then I think the seven different stories about how this was handled do end up maybe being a problem --

BASH: And do you think that that --

HAM: At least on the margin.

BASH: Do you -- do you, even in -- even in the Trump world?

HAM: I don't know about in the Trump world, but I think on the margins of these --

BASH: That's the world we're living in.

HAM: Yes, but -- I know, but in the -- on the margins in a midterm election and trying to turn out base voters, possibly.

BAS: Right.

HAM: But, legally, I am still unsure that a $130,000 FEC violation, no matter how smutty it is, is a gigantic -- I mean there have been gigantic FEC violations in the past that have been paid with fines less than $130,000, right, that they've been settled that way.

BASH: Yes.

HAM: So I do wonder where that heads.

BASH: And then you have Giuliani making the case, as part of this, that this was for personal reasons that he did this, not political reasons, to protect his family, to protect his wife, his reputation, their reputation. Listen to what Giuliani said on that.


RUDY GIULIANI, TRUMP'S ATTORNEY: This was for personal reasons. This was -- the president had been hurt personally, not politically, personally so much, and the first lady, by some of the false allegations that one more false allegation, six years old, I think he was trying to help the family. And I -- for that, the man is being treated like some kind of villain. And I think he was just being a good lawyer and a good man.


BASH: Personal reasons but it was right before the election.


BASH: And he was running for president of the United States.

SHEAR: And --

DEMIRJIAN: Especially venerable then, right?

SHEAR: Yes. And Giuliani actually raised the timing of it being 10 or 15 days before the election this morning in a second interview which undercuts the whole notion that it was just a personal thing because if being right before the election is on your mind, then that goes to the motivation of why the payment was made in the first place.

I think the interesting thing about, you know, Giuliani, you sort of see him there, you know, Trump -- you would think that you would want, as a legal front person, somebody who's very, you know, careful and very, you know --

BASH: Have you met President Trump?

SHEAR: No, no, this is my -- but this is my point, right? Like this is what he wants.

HAM: This is the opposite.

SHEAR: This is the opposite. He is channeling -- I mean Trumpism is like flowing from the president of the United States directly through Rudy Giuliani (INAUDIBLE).

BASH: And we're going to -- yes, we're going to -- were you producing the show because we're going to talk about that later. That's very true.

Before we leave this, I also want to talk about something that one of you mentioned, about the timing of the payment. Because Giuliani also talked to "The Washington Post," where he said that he thought that the president didn't get the full picture, in his words, of what happened until about two weeks ago. So after the president gave that statement on Air Force One that we played a little while ago.

[12:15:09] DEMIRJIAN: Right. And, I mean, if that's the case, then the president was probably not really watching what the rest of us were watching in some ways. I mean you kind of have to wonder if the president was aware of it enough to be making these reimbursement payments at the point that he was, and yet we were all taking about it for months at a time as well publicly about what was going on. Was he -- how much truth is there in that statement as well?

If he really didn't have the full sense of everything that was going on because he was choosing to ignore it, then I guess it's plausible that he could have said something that he wasn't necessarily going to back up. And, again, we're not even sure if what he said to the press is necessarily going to carry any legal weight or legal ramifications that he has to explain or backpedal on what that is.

But we're now in really the Giuliani era, I think, more than the Trump era of what we're going to be seeing from the White House in terms of how they sell the signal (ph) strategy and this is the line that he's going to deliver. It doesn't have to match with anything that came before because none of it matches with anything that came before.

KAPUR: Another really interesting thing that we're not talking about yet, that Giuliani put out there, is the fact that, you know, he connected the president's firing of James Comey to -- he basically drew a direct link between that and the Russia investigation, which the president kind of did last year on NBC. And now you have his lawyer doing the same thing. That, again, opens himself up to questions of obstruction of justice. There are legal experts who argue that you can build a case based on that if the president's lawyer is drawing a connection between, you know, a potential -- his worrying about interference in the election.

BASH: Yes. You're -- no, you're exactly right. We are going to dig in a little bit more on that later.

Everybody stand by because I want to talk to a legal expert about this, the series of interviews that we've been talking about that Rudy Giuliani gave and the question about more legal questions than answers in the wake of those interviews.

I want to bring in Solomon Wisenberg, who is a former deputy independent counsel in the Clinton era, Whitewater and Lewinsky investigation. He joins me now live from Raleigh, North Carolina.

Thank you so much for coming in.

Just broadly, what do you make of Giuliani's legal strategy here?

SOLOMON WISENBERG, FORMER PROSECUTOR: Well, I liken it to a murdered/suicide. He metaphorically murdered the president and committed suicide with respect to his own reputation as a criminal defense attorney.

BASH: That's pretty stark. How so?

WISENBERG: Oh, it was an incredibly embarrassing interview. Look, when you're representing anybody, much less the president of the United States, you have to know that when you go on television and you make statements on his behalf, that's admissible in court. That's an -- that's an admission by an agent if President Trump ever went into court. So there's --

BASH: What makes you think Giuliani didn't know that?

WISENBERG: Oh, I think he knows -- I think he knows it in some way. That's what makes it even mora astonishing that he went in there.

And, by the way, it does not matter what you -- who makes the payment. It doesn't matter whether it comes under campaign finance law. It doesn't matter whether it comes from the campaign, the Trump Organization or from Trump personally. The key is the purpose. If it's the purpose to influence a political campaign, it must be reported. Reporting is the key here. Not only is it subject to the per-person limitations, that would be Michael Cohen, Trump as the candidate is not subject to those limitations. But irrespective of whether it violates the limitations, it has to be reported if it's for the purpose of influencing a campaign.

So the idea that Rudy Giuliani is going to go on TV and say, this is what was going on and this should not be chased by the New York prosecutors is just -- it's just laughable. And for him to say that -- for him to say this is a totally garbage investigation, talking about Mueller, these are his words, this is a totally garbage investigation and a tainted investigation, and then to turn around and say, I think I have the respect of Mueller, the DOJ and the FBI, is lunacy. Absolute lunacy.

BASH: You mentioned the campaign finance laws. There was a tweet that was sent out this morning by a prominent D.C. lawyer, George Conway, who happens to be married to one of the president's top adviser, Kellyanne Conway. And in the tweet it simply put out part of the statute that you're talking about, part of the FEC laws and regulations on personal gifts and loans, which effectively says what you just said, that if a person, including a relative, a friend or candidate gives or loans the candidate money for the purposes of influencing any election for federal office, the funds are not considered personal funds of the candidate, even if they are given to the candidate directly. And then he goes on to -- the statue goes on to say, this is true even if the candidate uses the fund for personal living expenses while campaigning.

[12:20:11] Now, you can put aside the fact that George Conway tweeted this and just focus on the substance of this. You know, it does specifically say that it's for the purposes of influencing any election or federal office, which is obviously why Rudy Giuliani is saying this is personal. This is about the president and his own reputation and his family. He's insisting it's not about his election or the campaign. Is that going to be something the FEC will buy?

WISENBERG: The FEC is going to look at what actually happened, that actually substantively happened. I guess my point is that he doesn't really gain anything for his client by going out and saying this. First, it made it seem like the president was lying on the plane. He's tried to -- Giuliani has tried to clean that up in a later interview with "The Washington Post."

But, you know, why go in and even talk about that when you have to realize that you're committing the president, right, you are making a statement, you are an authorized representative of the president, you're his attorney, so anything you say that turns out not to be accurate or is damaging, you're going to have to explain, or the president's going to have to explain potentially somewhere down the line. And as one of your guests on the panel said, it's not even like campaign finance law violations are that big of a deal.

BAS: Right. Exactly.

WISENBERG: They're not.

BASH: Well it probably wouldn't be if we weren't talking about a president of the United States' hush money and a porn star. But that's -- but that's the reality of the situation where we are.

WISENBERG: And here --

BASH: Thank you so much for joining me with your legal insights. Appreciate it.


BASH: And, up next, we are going to hear from a Trump insider about what it's like to experience a grilling from the special counsel's investigators.

Stay with us.

(COMMERCIAL BREAK) [12:26:16] BASH: Welcome back.

A rare glimpse inside the special counsel's Russia investigation this week from a former Trump insider. Michael Caputo was a communications adviser for the Trump campaign in 2016 and an ally of long-time Trump adviser Roger Stone. He's been called before the House and Senate Intelligence Committees over his ties to Russia, and this week he paid a visit to the special counsel's office, an experience he called difficult but fair.


MICHAEL CAPUTO, FORMER TRUMP CAMPAIGN AIDE: I think they're very focused on Russian collusion. I think they believe that they'll get to something. They didn't tell me not to talk about this. They asked me not to interfere in the investigation as I exited the room. And I really don't want to give too much details because I feel that that interferes with the investigation.

However, they're talking about WikiLeaks, they're talking about Guccifer, they're talking about D.C. leaks, all the things that you would expect that they're -- that they're looking into. And I'm -- you know, I'm concerned for some of my friends who are in peril.


BASH: Wow. All this comes as President Trump shakes up his legal team and takes a more aggressive stance toward the special counsel's probe. Ty Cobb is out, which happened right here at this time yesterday. Rudy Giuliani is in. And he's wasting no time leading the charge against what he called a garbage investigation, and echoing the president's rhetoric against what he views at the root of all of this, Jeff Sessions and his Justice Department.


RUDY GIULIANI, TRUMP'S ATTORNEY: This is a Justice Department completely unhinged and out of control. To watch this happen under a man that I love, Jeff Sessions, I just feel bad. And I know the president is heartbroken over this. It isn't that he's angry, he's heartbroken. He never expected this from Jeff. The two of them can redeem themselves, Sessions and Rosenstein. They should order the investigation over.


BASH: Some advice from Rudy Giuliani. I want to talk about that in a minute.

But let's just go back to Michael Caputo. I don't know about you all, but when I talk to people who go before the special counsel, they are like scared of their own shadows. They don't want to talk about it. They don't want -- for the reason that he said, he said because I was warned if I say anything about it publicly, it could be construed as investigating -- interfering in the investigation. Michael Caputo has no problem. And it was so interesting to hear what it's like and how much they know about what went on.

SHEAR: I think in some ways you've -- I didn't see the entire interview, but I saw parts of it -- I think he was -- he's on safer ground when he's describing them rather than describing what he told them, right, because the more he describes in public what he said, the more that can potentially vary from what he actually said to them and that puts him in more legal jeopardy.

BASH: That's true, but he's really revealing things that we didn't know, right? I mean and that's the other thing that was interesting about this is that he, you know, we all sort of say, oh, we don't know, we don't know, but now it's even more clear listening to Michael Caputo what -- a lot of what we talk about isn't even beginning to scratch the surface of what they're discussing behind closed doors.

DEMIRJIAN: Right. And, I mean, any time you talk about even the questions that are being asked, it tips the hand of, you know, what the -- the direction the investigation is going into for anybody who comes thereafter.

But this is classic Michael Caputo in a way. I mean he's never exactly been one to completely keep his own counsel after he talks to investigators, period. And he has a way of being like, well, they didn't tell me specifically not to talk about anything, so he's going to say what he feels like he can say. And, I mean, I have no idea how much of the -- he himself is, you know, potentially any sort of target of anything, but it seems like he feels pretty free to actually do that, which is, you know, his kind of -- informing anybody who hasn't yet come into that room with those investigators of which way this is going.

BASH: Yes. Yes. No question. And then there's the broader question of obstruction of justice and what Giuliani -- another thing that Giuliani said, which is that the president fired Comey because Comey wouldn't say that Trump wasn't the target of the investigation.