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THE SITUATION ROOM

Why Did Trump Fire Comey?; White House Chaos; Interview With California Congressman John Garamendi; Giuliani's New Explanation of Comey Firing Raises Fresh Questions About Possible Obstruction; Giuliani Remarks Catch Trump Lawyers Off-Guard; Trump on Three Americans Held in North Korea: "Stay Tuned". Aired 6-7p ET

Aired May 3, 2018 - 18:00   ET

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


[18:00:00]

BRIANNA KEILAR, CNN HOST: The president's top spokeswoman admits she didn't know about the payback to Michael Cohen until she watched Giuliani on TV, like everyone else. Has the credibility of the Trump White House sunk to a new low?

Disposable. Another stunner from Giuliani. He suggests the president's son-in-law, Jared Kushner, is fair game for the special counsel, but he is warning that if Robert Mueller goes after Ivanka Trump, he will face outrage and consequences.

And storm troopers. The FBI agents who raided Michael Cohen are likened to Nazi forces by, guess who, that's right, Rudy Giuliani, a former federal prosecutor himself. The bureau's fired Director James Comey coming to the agents defense.

We want to welcome to our viewers in the United States and around the world. Wolf Blitzer is off. I am Brianna Keilar. And you're in THE SITUATION ROOM.

Tonight, the president's most high-profile lawyer appears to have exposed his client to even more legal peril as well as exposing some of Mr. Trump's most blatantly false claims yet. This all began with Rudy Giuliani revealing on national television that Mr. Trump reimbursed Michael Cohen for the $130,000 in hush money he paid to porn star Stormy Daniels.

Mr. Trump had insisted just weeks ago that he knew nothing about the deal. The White House press secretary admits to being caught off- guard as she desperately tries to steer clear of multiple bombshells unleashed by the former New York mayor.

I will be getting reaction Democratic Congressman John Garamendi. Our correspondents and analysts are also standing by.

First, I want to go to CNN chief White House correspondent Jim Acosta.

Jim, this is a legal mess, perhaps a political mess as well.

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: It's a mess in more ways than one. That's right, Brianna. The White House was back on its heels today, with officials insisting they were unaware that the president had reimbursed his personal attorney Michael Cohen for the money he paid to porn star Stormy Daniels until that was revealed by one of Mr. Trump's other attorneys, Rudy Giuliani.

Asked repeatedly over here at the White House whether the president, other officials here had been lying to the American people, the White House opted to admit it was basically in the dark.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: What a day. What a beautiful day.

ACOSTA (voice-over): The skies were clear, but the storm clouds have returned for the president, who joined Christian conservatives for a National Day of Prayer.

QUESTION: Mr. President, why are you changing your story on Stormy Daniels?

UNIDENTIFIED MALE: Shame on you.

ACOSTA: Just as the White House was scrambling to explain a bombshell revelation from Rudy Giuliani, that Mr. Trump has repaid his personal attorney Michael Cohen for the hush money he paid to porn star Stormy Daniels, who claims she and the president once had an affair.

RUDY GIULIANI (R), FORMER MAYOR OF NEW YORK: Sorry, I am giving you a fact now that you don't know. It is not campaign money. No campaign finance violation.

SEAN HANNITY, HOST, "HANNITY": They funneled it through a law firm.

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

HANNITY: Oh, I didn't know he did.

ACOSTA: That completely contradicted what the president told reporters just last month.

QUESTION: Mr. President, did you know about the $130,000 payment to Stormy Daniels?

TRUMP: No. No. What else?

QUESTION: Then why did Michael -- why did Michael Cohen make this, if there was no truth to her allegations?

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

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

TRUMP: No, I don't know.

ACOSTA: Giuliani's explanation for that? The president didn't know about the reimbursement until just recently.

GIULIANI: He didn't know the details of this until we knew the details of it, which is a couple of weeks ago, maybe not even a couple, maybe 10 days ago.

ACOSTA: But that differs from this tweet from Mr. Trump that claims Cohen was on a monthly retainer, not from the campaign and having to do with the campaign from which he entered into through reimbursement.

The president went on to tweet: "These agreements are very common among celebrities and people of wealth. The agreement was used to stop the false and extortionist accusations made by her about an affair."

The stunning admission from the president also runs counter to multiple denials from White House officials.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: There was no knowledge of any payments from the president, and he has denied all of these allegations.

ACOSTA: White House Press Secretary Sarah Sanders told reporters she only learned of the reimbursement last night.

(on camera): Were you lying to us at the time, or were you in the dark?

HUCKABEE SANDERS: The president has denied and continues to deny the underlying claim. And, again, I had given the best information I had at the time. And I would refer you back to the comments that you, yourself, just mentioned a few minutes about the timeline from Mayor Giuliani.

(CROSSTALK)

ACOSTA: That statement wasn't in reference to the reimbursement, the payment.

HUCKABEE SANDERS: Again, I gave you the best information I had.

(CROSSTALK)

ACOSTA: That means you were in the dark.

(CROSSTALK)

ACOSTA (voice-over): In a separate interview on FOX, Giuliani tried to explain all of the past false statements, including from Cohen, who has also stated he was not reimbursed.

Giuliani insisted it wasn't an attempt to go around campaign finance laws.

GIULIANI: It wasn't for the campaign. It was to save their marriage -- not their marriage, as much as their reputation.

[18:05:01]

ACOSTA: There were other jaw-dropping admissions from Giuliani, such as when he admitted he fired former FBI Director James Comey over the Russia investigation.

GIULIANI: He fired Comey because Comey would not, among other things, say that he wasn't a target of the investigation. He is entitled to that.

ACOSTA: And when he described the president's son-in-law, Jared Kushner, as disposable.

GIULIANI: If they do Ivanka, which I doubt they will, the whole country will turn on them. They're going after his daughter?

HANNITY: What about his son-in-law? They talked about him.

GIULIANI: I guess Jared is a fine man. You know that. But men are disposable. But a fine woman like Ivanka? Come on.

ACOSTA: And when he appeared to liken the federal agents who raided Cohen's office in their investigation to Nazi storm troopers.

GIULIANI: The question there was, the only possible violation there would be, was it a campaign finance violation, which usually would result in a fine, by the way, not this big storm troopers coming in and breaking down his apartment, and breaking down his office?

(END VIDEOTAPE)

ACOSTA: Now, Giuliani appeared to cross an important line in all of his comments to the media, at one point stating that the three Americans being held prisoner in North Korea are being released at any moment.

Asked whether the president had given Giuliani permission to discuss foreign policy matters, as he is only an attorney, an outside attorney for the president at the White House, Press Secretary Sarah said -- Sarah Sanders says she didn't know.

But, Brianna, sitting in that Briefing Room today, and I know you have done that as well, it was if we were watching the credibility of the White House crumble in real time. It was stunning to watch -- Brianna.

KEILAR: Sure was. Jim Acosta, thank you so much, live for us from the North Lawn.

Now to Rudy Giuliani and the Russia investigation. The president's legal liaison to the special counsel also unloaded about Robert Mueller's probe and he may have hurt Mr. Trump more than he helped him when he talked about why James Comey was fired as FBI director.

CNN justice correspondent Jessica Schneider has more this for us. So, Jessica, Giuliani is a seasoned lawyer, but his comments are

raising a lot of questions and concerns.

JESSICA SCHNEIDER, CNN CORRESPONDENT: A lot of questions and concerns, Brianna, and they're coming from people on the legal team who Giuliani now works with.

Our team has learned Giuliani's recent media blitz has angered and confused some members of that newly formed team who say they felt blindsided. And when it came to Giuliani's forceful words and maybe setting some of the terms he would want in place for any possible presidential interview, some advisers even feared he was winging it.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Rudy Giuliani, the newest member of President Trump's legal team, making the case for why the president is ready for battle with the special counsel, Robert Mueller.

GIULIANI: This started as collusion with the Russians. No.

HANNITY: Right.

GIULIANI: Now they go to obstruction of justice, collusion among the players. What they're really trying to do is trap them in a perjury. And we're not suckers.

SCHNEIDER: Giuliani expressed his disappointment and frustration with Attorney General Jeff Sessions, who recused himself from the Russia probe, and urged Sessions and the deputy attorney general to shut down the investigation.

GIULIANI: The two of them can redeem themselves, Sessions and Rosenstein. They should order the investigation over.

HANNITY: I don't think that's going to happen.

GIULIANI: Well, I don't think it's going to happen either.

SCHNEIDER: Giuliani says he doesn't want an in-person interview of the president to happen, but, if it does, there should be strict parameters.

GIULIANI: I think Jay and I will insist that they're going to have to treat him the same way as Clinton, two-and-a-half-hours, we end, we walk out. I would like to get one not under oath.

I would want it videotaped, and I -- not videotaped, but audiotaped. I want to make sure they don't misrepresent his answers.

SCHNEIDER: Giuliani focused much of the fire on the man he once hired to serve under her in the Manhattan U.S. Attorney General's Office, fired FBI Director James Comey.

GIULIANI: Sorry, Jim, you're a liar, a disgraceful liar.

SCHNEIDER: And Giuliani claimed another reason the president fired the FBI director last May.

GIULIANI: He fired Comey because Comey would not, among other things, say that he wasn't a target of the investigation. He is entitled to that.

Hillary Clinton got that, and he couldn't get that. So, he fired him and he said, I'm free of this guy.

SCHNEIDER: The official White House reasoning at the time was that Comey had mishandled the Hillary Clinton e-mail investigation. And days later, the president himself said this:

TRUMP: And in fact, when I decided to just do it, I said to myself, I said, you know, this Russia thing with Trump and Russia is a made-up story.

SCHNEIDER: Comey's firing is now one subject of Mueller's obstruction of justice investigation.

Meanwhile, former Trump campaign director Michael Caputo was interviewed by the special counsel's team Wednesday, and he said they had very specific questions centered on collusion.

MICHAEL CAPUTO, FORMER TRUMP CAMPAIGN ADVISER: These guys know more about the Trump campaign than any one person who worked there. I think they're very focused on Russian collusion. I think they believe that they will get to something. I just disagree.

(END VIDEOTAPE)

[18:10:03]

SCHNEIDER: And Michael Caputo expects he could be called to testify before a grand jury at some point.

Now, when it comes to any potential presidential subpoena, Rudy Giuliani argued that the special counsel does not have that power, something, of course, that hasn't been fully tested in the courts when it comes to a potential criminal matter involving the president.

So, Brianna, could we be setting up for a potential legal showdown? It is possible -- Brianna.

KEILAR: Jessica Schneider, thank you so much for that report.

The president's legal team is already undergoing changes, feeling some tension, when Rudy Giuliani went on television and left people's jaws on the floor.

CNN senior White House correspondent Pamela Brown is joining us now.

Tell us how the rest of the president's legal team is responding to what they heard.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, I can tell you, Brianna, sources speaking to me and my colleague Gloria Borger and other colleagues is that the president's legal advisers were simply blindsided by Rudy Giuliani's comments.

They were perplexed by them. Rudy Giuliani, remember, was brought onto represent the president in the Russia probe, in the Robert Mueller case. And so the president's lawyers, the others on his legal team were confused as to why he ventured into this other territory that really isn't within his portfolio, as the president's lawyer on the Mueller probe.

And the fear was that Rudy Giuliani went on television, spoke to the media, and was essentially winging it, and wasn't really prepared with all of the facts. And it sort of underlines this notion that the president himself, who Rudy Giuliani claims he coordinated with before this television appearance, is his own legal strategist.

But what's notable is that Rudy Giuliani did not coordinate with the rest of the legal team on something as important as this.

KEILAR: And all our legal observers, they are saying this is a political argument that Rudy Giuliani is making, not really a legal one.

I wonder if the people who are in charge of making sure that Donald Trump is protected legally worry that Rudy Giuliani actually hurt him in that regard.

BROWN: Right.

I mean, sources are saying, Brianna, that he essentially threw a wrench in the legal strategy, that the whole purpose initially for him to go on, speak to the media was to show stability, that, look, there's this new legal team on board here with the news yesterday with Ty Cobb out, Emmet Flood in, among others.

And instead of showing that stability, Rudy Giuliani caught all of these people, these key players in all of this, off-guard, which created some issues. And not only that, Brianna, as you know, as you have been discussing, he veered off course from some of the president's past statements about the Stormy Daniels payment, which created another whole host of issues.

KEILAR: Pamela Brown, great reporting today. Thank you so much for sharing with us.

BROWN: Thank you.

KEILAR: And joining me now, Congressman John Garamendi. He's a Democrat who serves on the Armed Services Committee.

Sir, thanks for being with us.

REP. JOHN GARAMENDI (D), CALIFORNIA: Good to be with you, Brianna.

KEILAR: When you see these comments from Rudy Giuliani, do you think that they prove the president lied about his knowledge of the Stormy Daniels payment?

GARAMENDI: Well, where do you start talking about the president and lies?

Just from the very first of the opening salvo of his campaign right up to this very moment, there's been one lie after another. I think we're even past the pointing counting, probably well over 2,000 specific lies over the course of a year-and-a-half. That's the presidency, not including the campaign.

But there's another issue here, Brianna. And that is, I'm on the Armed Services Committee. We're constantly looking at the world out there, trying to judge where the risks are, what's happening, what we might be facing in terms of military action or troubles around the world.

And the White House is in absolute chaos. We have two loose cannons, Giuliani and the president, rolling around the Oval Office, crashing into each other. Chaos is ensuing, one lie, one change, things changing constantly, he said this, no, now he's saying that.

The rest of the world is going, oh, my God, what has happened to America, and what will it mean to me in my country? World leaders, I'm sure, watching this around the world, as you started off your show, are going, what in the world is happening in America, and where will it lead to, and what does it mean in the terms of international relations and diplomacy and economy?

It is a very serious problem.

KEILAR: Do you think the president broke the law, that he himself broke the law with this payment to Stormy Daniels?

GARAMENDI: Well, I don't know all the details, but I do know there are cases about congressional campaigns in which money was funneled into a campaign surreptitiously, secretly.

It is entirely possible that the president and/or Cohen had an agreement that -- a deal that money would be paid, the president would pay it back to affect the campaign.

If one assumes that the payment to hush money was for campaign purposes, and the president knew about that, and had decided to funnel the money secretly through Cohen, not directly through Cohen, but through a new LLC created in Delaware to further hide the money, people have gone to jail for that.

[18:15:21]

If the facts line up, yes, it's a crime, and it is punishable by jail. I can cite a couple of congressional campaigns in which that happened.

KEILAR: Rudy Giuliani in this interview, there were so many things for which it was noteworthy. But one of them was his explanation for why the FBI Director James Comey was fired.

He said that it was because he had refused to publicly announce that the president was not under investigation. Do you think that that's obstruction of justice? GARAMENDI: Well, we have two statements along the same line, don't

we? We have the president's statement and now we have Rudy Giuliani's statement.

The question is, in my mind, is, did Rudy -- did Giuliani dream that up himself, or was that a result of the conversation he had with the president that they would put out yet another explanation for what happened?

That is -- if all of that comes together, is that obstruction of justice? Yes. You're trying to shut down an investigation.

And I'm also curious, I guess astounded, by Giuliani's request for the attorney general and the deputy attorney general to shut down a formal criminal investigation in New York. Now, Giuliani is the president's lawyer. Is this from the president to Giuliani to try to get that shut down?

If so, question arises, is that also obstruction of justice in a different case, the Michael Cohen case?

This is just going totally out of control, and it's rolling and roiling the entire world, as they look at the top of the American government in total, absolute chaos.

KEILAR: Giuliani also said on FOX News this morning that North Korea would be releasing three American prisoners today. That has not happened.

I know that you have been watching this issue closely from your perch.

GARAMENDI: Sure.

KEILAR: Was that appropriate for him to say that?

GARAMENDI: I have found most everything Giuliani is saying to be inappropriate.

Certainly, I'm sure that the White House lawyers, as well as the Trump lawyers, are going, oh, my goodness, he's going to pop off again.

No, this is the new secretary of state's territory. Certainly, if we had heard that from Secretary Pompeo, I think we would all be elated and very happy. And, hopefully, Secretary Pompeo will carry through on what was his initial effort going to North Korea, not only with regard to the three Americans, but also setting up the eventual summit between Kim Jong-un and the president, all of which is extremely important.

KEILAR: Should the president do that? Should he have that summit if the prisoners are not released?

GARAMENDI: Well, I think that that -- I would never put it in that situation.

These Americans, their incarceration is very, very important, but also the entire issue of the nuclearization by North Korea, the -- all of the bombast that had the entire world concerned about North Korea, South Korea, and the United States engaging in a nuclear or at least a conventional war, those are extremely important.

And I would not -- I would hope the situation would not come down to, release these prisoners, or else. There are a lot of reasons why a summit could take place, if it is properly prepared and structured in a way that would lead to progress towards the denuclearization of North Korea, and also a peace treaty between the South and the North, in which the entire tension on the Korean Peninsula which has persisted more than 60 years could be ramped down.

KEILAR: More than two dozen of your colleagues believe the president should get the Nobel Peace Prize. How do you react to that?

GARAMENDI: Apparently, they haven't been watching the news.

Come on. This is chaos. You don't get a Peace Prize for creating chaos. Do you get a Peace Prize for meeting with Kim Jong-un? I don't think so. Let's talk about what the result of all this is at the end of the day. I think, once again, this is all of the effort of deflection, the effort of trying to shore up a very serious...

KEILAR: But this meeting could be a big deal. If he could get North Korea to denuclearize, would you change your opinion? Would you change your answer to that question?

GARAMENDI: It would be a wonderful thing for the entire world, and if Trump is able to pull it off, good for him, good for the world.

[18:20:05]

Whatever prizes would be appropriate, let him have it. And if that's what his quest is, and he's going to behave himself and actually get things done, then let it be the motivation.

KEILAR: All right, Congressman John Garamendi, thanks for being with us.

GARAMENDI: Thank you.

KEILAR: Just ahead, we're going to take a closer look at the president's changing story about that hush money to porn star Stormy Daniels, what he knew and whether he paid any of his own cash.

And are the North Koreans close to releasing detained Americans? We will have the latest on that and why Rudy Giuliani felt compelled to discuss this and say that it would happen on television.

(COMMERCIAL BREAK)

[18:25:16]

KEILAR: Tonight, President Trump is not denying the Stormy Daniels deal anymore. He is confirming that -- the hush money payment in his latest tweets after Rudy Giuliani's statements revealed the president's previous claims were false.

Let's go now to CNN national correspondent Athena Jones.

So, Athena, walk us through what's been said and what it all could mean for the Stormy Daniels lawsuit.

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Well, this is really something, Brianna.

Rudy Giuliani told my colleague Dana Bash, you won't see any daylight between me and the president on this issue. Still, his statements not only surprised many other folks at the White House. They also raised new legal questions for President Trump and his personal attorney Michael Cohen, who is already under criminal investigation.

(BEGIN VIDEOTAPE)

GIULIANI: He was definitely reimbursed. There's no doubt about it.

JONES (voice-over): A stunning admission by one of the newest members of President Trump's legal team about the $130,000 hush payment to porn star Stormy Daniels.

GIULIANI: The president repaid it.

JONES: Trump's personal attorney Michael Cohen has said he paid Daniels, whose real name is Stephanie Clifford, using his own personal funds just days before the 2016 election to keep quiet about an alleged sexual encounter with Trump, and that he was not reimbursed by the Trump Organization or the Trump campaign.

Now former New York Mayor Rudy Giuliani telling FOX News Trump himself reimbursed Cohen.

GIULIANI: That money was not campaign money. Sorry, I am giving you a fact now that you don't know. It is not campaign money. No campaign finance violation.

HANNITY: They funneled it through a law firm.

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

JONES: The new revelations contradicting the president's own words last month on Air Force One.

QUESTION: Mr. President, did you know about the $130,000 payment to Stormy Daniels?

TRUMP: No. No. What else?

QUESTION: Then why did Michael -- why did Michael Cohen make this, if there was no truth to her allegations?

TRUMP: Well, you have to ask Michael Cohen. Michael is my attorney. And you will have to ask Michael. JONES: Then, this morning, Giuliani again on TV trying to clear things up.

GIULIANI: He didn't know the details of this until we knew the details of it, which is a couple of weeks ago, maybe not even a couple, maybe 10 days ago.

JONES: Giuliani's admission prompting this response from Daniels' attorney, Michael Avenatti:

MICHAEL AVENATTI, ATTORNEY FOR STORMY DANIELS: I was speechless. I'm still stunned this morning. There's been lie after lie told to the American people relating to this transaction, the agreement. We now know that that was an absolute lie on videotape aboard Air Force One, and I think it is an absolute disgrace.

JONES: This morning, the president posting a series of tweets to explain himself, writing he reimbursed Cohen through the monthly retainer he paid to him for services, and insisting that money from the campaign or campaign contributions played no role in this transaction.

Giuliani arguing no laws were broken.

GIULIANI: Just trust me, they're going to come up with no violations there.

HANNITY: All right, meaning the...

(CROSSTALK)

GIULIANI: Yes, payments were perfectly legal.

JONES: Not so, says the nonpartisan governor watchdog group Common Cause, which filed complaints against Trump and Cohen with the federal election commission and the Department of Justice in January.

PAUL RYAN, COMMON CAUSE: Rudy Giuliani admitted that Donald Trump reimbursed Michael Cohen for the payment to Stormy Daniels, and Donald Trump confirmed this, this morning via tweet. And this means is, Donald Trump is now perhaps on the hook for a criminal violation of federal campaign finance law. No good lawyer would do this.

(END VIDEOTAPE)

JONES: And Paul Ryan from Common Cause also said this is a situation where the cover-up is worse than the underlying activity.

He said, now that we know it was Trump's money, the payment to Daniels could have been made legally, without violating any laws, as long as the campaign disclosed it to the Federal Election Commission. He said there's enough wiggle room in campaign finance laws that the disclosure could have been so vaguely worded, it would be difficult even for a seasoned investigative journalist to figure out what the payment was for -- Brianna.

KEILAR: Athena Jones, very interesting. Thank you.

Just ahead: The president's new lawyer gives a third rationale for Mr. Trump's firing of FBI Director James Comey. Why can't the Trump team get its stories straight?

(COMMERCIAL BREAK)

[18:34:08] BRIANNA KEILAR, CNN ANCHOR: So we're following the fallout from a media blitz by the new Trump lawyer, Rudy Giuliani, that angered and blindsided the rest of the president's legal team and White House staff.

Giuliani revealing that Mr. Trump reimbursed Michael Cohen for his payoff to Stormy Daniels, contradicting the president's past denials. And that's only one of the shockers that came out of Giuliani's mouth.

I want to bring in our legal and political experts to talk about all of this.

So Jeffrey Toobin, the entire time that we have known about this payment from Michael Cohen to Stormy Daniels, we've heard from the White House, we've heard from the president that he had no knowledge of the payment. Let's watch some of those denials.

(BEGIN VIDEO CLIP)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: There was no knowledge of any payments from the president, and he's denied all of these allegations.

RAJ SHAH, WHITE HOUSE DEPUTY PRESS SECRETARY: The president strongly, clearly, and has consistently denied the underlying claims.

SANDERS: The president has denied the allegations. We've spoken about this issue extensively. And I don't have anything else to add.

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

UNIDENTIFIED FEMALE: Mr. President, did you know about the $130,000 payment to Stormy Daniels.

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

UNIDENTIFIED FEMALE: Do you know where he got the money?

TRUMP: I don't know.

(END VIDEO CLIP)

KEILAR: What do you think about Giuliani's strategy in all this? We know he has said that he spoke to the president before, Jeffrey, he spoke to him after this initial appearance. What do you think about what he's done here?

JEFFREY TOOBIN, CNN CHIEF POLITICAL ANALYST: Well, I think at some level he had no choice, because I think the key event we have to remember is that Michael Cohen's office was searched by the FBI. So the Trump people had to know that the records underlying these transactions, the reimbursement were going to be discovered by the FBI.

So the question was, are you exposed by the FBI later or do you try to get ahead of the story and come up with some explanation for why you've been lying for several months? I think Giuliani chose the latter. He said he was going to disclose that this reimbursement was made, notwithstanding what the president said and his press people repeated, and he come -- and he came up with this convoluted explanation of why he did it. But, you know, I think any sane person knows that, you know, the president has been lying, and now he's got a new explanation. Who knows if this is true?

KEILAR: Kaitlan Collins, Giuliani was talking to "The Washington Post." He said that the president paid Michael Cohen back, he said, throughout 2017. He said, "Well, the original payment from Cohen was sometime right before the election. The repayments took place over a period of time probably in 2017, probably all paid back by the end of 2017. That and probably a few other situations that might have been considered campaign expenses."

OK. So then he was asked about the structure of those payments. He says, "No no no, actually, I think, probably in 2018." Does this add up? And what is the last little thing he said about other situations that could be considered campaign expenses.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Exactly. Two key things here, not only the first one regarding the payments, he was essentially saying that while the president after he had been elected, while the president-elect and then after he was inaugurated, were still making these payments to Michael Cohen, which makes it even more, you know, crucial that the White House has to answer questions about this.

All day long, they were saying they couldn't answer questions because of ongoing litigation. That's why they couldn't talk about the payment. But of course, they've spoken about it multiple times before. They were happy to deny it when they thought the president didn't know about that payment and didn't make that payment.

But then that other statement saying that there were other payments that Michael Cohen also made raises the question. And we've said this for some time. I've reported this multiple times. Several White House officials, dating back to February when Michael Cohen first admitted that he made this payment to Stormy Daniels said that they thought this was trouble, because they were worried that more people would come out of the woodwork with similar stories to Stormy Daniels.

KEILAR: David Swerdlick, at 7 this morning, the president tweeted, and this is what part of it said. It said money from the campaign or campaign contributions played no role in this transaction. But then listen to what Rudy Giuliani said less than an hour later on FOX.

(BEGIN VIDEO CLIP) STEVE DOOCY, CO-HOST, FOX NEWS CHANNEL'S "FOX & FRIENDS": So you're

saying -- you're saying that Stephanie Clifford made these allegations, told Donald Trump's lawyer.

RUDY GIULIANI, DONALD TRUMP'S LAWYER: And denied them. And denied them. And then said it wasn't true. However, imagine if that came out on October 15, 2016, in the middle of the, you know, last debate with Hillary Clinton.

DOOCY: So to make it go away, they -- they made this payment.

GIULIANI: Cohen didn't even ask. Cohen made it go away. He did his job.

(END VIDEO CLIP)

KEILAR: It seems -- I mean, it seems like he's -- he's putting it out there that campaign politics, that election politics played into the payment.

DAVID SWERDLICK, CNN POLITICAL ANALYST: Two things, Bri. One back to the tweet. He's saying none of the money is from the campaign. That's not what we're talking about here. We're talking about whether an in-kind contribution was made to the campaign, not that someone reached into a slush fund of campaign money and took it out. It's whether this 130,000 was a gift to the campaign.

In terms of what mayor Giuliani said, exactly. This is a situation where he's basically going on "FOX & Friends" this morning, and saying Cohen did his job. But if doing his job is nipping something in the bud three weeks before the election, that doesn't prove that it's a campaign finance violation, but that's exactly what the theory of the case is, that this was done to support the campaign effort in the home stretch.

KEILAR: And then, Sam Vinograd, in these tweets, the president paints Stormy Daniels as an extortionist. He also denies that the affair even happened.

Now, kind of take it as a one, two. I think when you look at Stormy Daniels, when you look at Karen McDougal, they both seemed incredibly credible, and in this he said she said with Stormy Daniels, it really does seem like Stormy Daniels, by many accounts, by many assessments, appeared to be credible.

Why -- why is he doing this? Why is he even still saying that this didn't even happen. It just seems so ridiculous.

[18:40:03] SAMANTHA VINOGRAD, CNN NATIONAL SECURITY AND LEGAL ANALYST: It does. And the smartest strategy for the president right now, I am no lawyer, would be to keep silent, but we know that he doesn't have a history of being able to control himself when it comes to legal issues, not just on Stormy Daniels, but when you look at things like the travel ban, which was ruled down, partially as a result of official statements from the president and from other officials at the White House. Because again, rather than just letting things lie and letting the

legal process go forward, the president feels the need to tweet or make statements from the cuff. He likes to contradict himself and other people close to him. There's been confusion that ensues, and then someone like Sarah Sanders is then left to play clean-up squad and to try to answer questions when, in fact, she's really just left out to dry. There's nothing to say.

KEILAR: Yes. And that was so clear today in the briefing. Jeffrey Toobin, what do you think?

TOOBIN: Well, I mean, this was a campaign contribution. I mean, you know, Rudy forgot to lie. You know, he's not very well -- he's not very well-versed in the facts, so he doesn't really know the party line. And the party line was that this was for the good of the family, or you know, this was -- but of course, this is -- this is a sexual encounter that took place in 2006, ten years earlier.

It was reported in the tabloid press in 2011, five years later. Out of all the dates in the world, they decide to give her money in October of 2016, and anyone could possibly think it wasn't a campaign- related expenditure? Of course it was. But Rudy forgot what the party line was, and he made the mistake of telling the truth.

KEILAR: So what do you think, then, about considering that? What do you think about his contributions, then, as the lead lawyer on this team?

TOOBIN: They were a fiasco, but we haven't even gotten into the other fiascos of his interview. You know, coming up with explanation of the firing of James Comey that was even more incriminating than the other ones. I mean, you know, Rudy has been out to pasture for quite some time as a lawyer. And, you know, the guy needs some practice.

KEILAR: And you know, we will have full-on other fiasco exploration after a quick break. Jeffrey Toobin, our panel is going to stick around. We'll have much more in just a moment.

(COMMERCIAL BREAK)

[18:46:59] BRIANNA KEILAR, CNN HOST: And we're back now with our analysts, trying to make sense of all of the shocking new statements by Rudy Giuliani, the president's lawyer, appearing to add to Mr. Trump's legal and political troubles on several fronts.

Jeffrey Toobin, one of the things that he said was -- it was sort of a revised or addition to the president's reasoning for firing the FBI Director James Comey again. Let's watch.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, TRUMP'S LAWYER: He fired Comey because Comey would not among other things say that he wasn't a target of the investigation. He's entitled to that.

(END VIDEO CLIP) KEILAR: That just seems obvious, Jeffrey, that he as a lawyer would not want to say that. What do you make of this?

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Well, remember, the investigation was just starting. The reason they told Hillary Clinton that the investigation was closed was that the investigation was closed. He didn't know. Comey didn't know what Trump's ultimate status was going to be and he wasn't going to make that announcement publicly.

So, what we have here is Giuliani saying Comey was fired because he refused to exonerate the person who fired him. That's obstruction of justice, that's not explanation, that's a confession that Giuliani gave.

KEILAR: So, David Swerdlick, how do you -- how does the president have a lead lawyer who appears so dangerously ignorant of the facts?

DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: Yes. No, I think it's like Jeffrey said before the break, Mayor Giuliani is still sort of warming up to speed, even though this investigation is going full steam ahead.

Look, this is a situation where you have two documents, the May 9th letter from President Trump to James Comey firing him and the Lester Holt interview going in favor of what Mayor Giuliani just said in that clip that you played, that the firing of Comey had to do with the Russia investigation. There's only one document, the Rosenstein memo, that backs up the story that the White House wants, which is that it was about the Clinton investigation or general leadership of the FBI, and again to Jeffrey's point, Mayor Giuliani doesn't seem to have a grasp of that.

KEILAR: Feels like that ship sailed so long ago.

SWERDLICK: Yes, long.

KEILAR: So, Kaitlan, I know you have been talking to sources, it just seems like having watched that briefing today with Sarah Sanders, I mean, you just got this sense from her of what a difficult position she's in when clearly she's been lied to and then she perpetuated that lie. She's just one of the folks who's defended the president on this.

How do White House staffers feel about this?

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Well, imagine you're Sarah Sanders or some other White House staffer and for weeks now, the president has been saying he did not know about the payment, did not make this payment, and you're going on television in front of reporters and reiterating that, saying no, he didn't.

And then last night, you're watching FOX News and Rudy Giuliani who just joined the team, not a White House employee, says the president actually did reimburse Michael Cohen for that payment, and then the president repeats on Twitter the next morning. [18:50:00] You can see why the White House is like scrambling and they

have no idea how to handle this. And I talked to several people today in the White House that said they were totally caught off guard by what Rudy Giuliani said, of course, and they really feel like he's undermined the defense strategy they used for weeks, not just on Stormy Daniels but also James Comey and the entire Russian investigation.

So, now, they feel this situation is really out of their control because they can't control Rudy Giuliani going and speaking with the president, which he did before the interview, and he's been on Sean Hannity and says this stuff, they can't control that. So, it's really -- the president is telling Giuliani what he wants him to say, Giuliani says it, and the White House is left in the dark.

(CROSSTALK)

TOOBIN: Remember, it's not -- I'm sorry, don't mean to interrupt. But remember, it's not that, you know, he's doing a bad defense strategy. It's that the facts are bad. And they've been lying about the facts.

So, you know, Rudy Giuliani can't come up with a good defense if a good defense doesn't exist. And the problem is, they've been lying about this reimbursement, and now they have to scramble to come up with some explanation.

KEILAR: You can certainly -- he can certainly make it worse, which it seems like he may have done. But listen, the heart of this whole investigation is about Russia, Russia meddling --

UNIDENTIFIED FEMALE: It's hard to remember now.

KEILAR: Right? Interference in the election, that was supposed to be the point. Now it's turned into, is there collusion, is there obstruction of justice? Robert Mueller is, Sam, interviewing witnesses. He sounds like he's scaring them, sounds like he knows a lot of things because Michael Caputo, a former Trump campaign aide, was interviewed yesterday and he says, quote, it's clear they are still really focused on Russia collusion, which, of course, the president likes to say there was no collusion. He's saying, they're focused on this, they know more about the Trump campaign than anyone who ever worked there. He said, including me, Michael Caputo.

What does that tell you?

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: Well, it tells me that the investigating is proceeding and that Mueller is disciplined and thorough. But I have a big problem with the last line that's getting less attention. Where we have another Trump campaign aide playing the ignorance card and saying everybody didn't know what was going on, it was disorganized this and that.

Ignorance is not an excuse and we're finding out that on the campaign, on the transition team, people actually did know more about what was going on, whether it's the Trump Tower meeting, Flynn going to see Kislyak. People weren't all in the dark.

And so, I wonder if this was a strategic move by Caputo to try to say, I didn't know what was happen so I'm not in trouble.

KEILAR: Do you think he was trying to send a message to others going before the special counsel?

VINOGRAD: I think so. I think we're going to hear more people say, again, these guys were bad, it wasn't me, it didn't touch me, and I was in the dark. I don't buy it.

(CROSSTALK)

TOOBIN: He sounded scared as hell. You know, and also Caputo has had all these legal fees which has been a great -- I mean, I'm not sure there's some grand strategy in what he's saying, I think he's just scared.

And you know, this is also a good message that, you know, from the movies, we think of interrogations as like people yelling at you, bearing down on you. The way you do a good interrogation is with preparation, is with having documents, having e-mails, having phone records that you can put in front of a witness so that they can't wiggle out of things.

That's what Mueller's been doing. It's the preparation, not the threats that are so scary to people like Caputo.

KEILAR: Jeffrey Toobin, all of you, thank you so much. Really appreciate it.

And just ahead, is Kim Jong-un getting ready to release three Americans? We'll have a live report from the Korean peninsula.

(COMMERCIAL BREAK)

[18:58:13] KEILAR: Tonight, new uncertainty about the fate of three Americans detained in North Korea. Trump lawyer Rudy Giuliani claiming their release was imminent. The White House says it can't confirm that and the president is only saying, stay tuned.

Let's go live now to the Korean peninsula, and CNN's Paula Hancocks.

Paula, any signs that a release of these three Americans is imminent?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, Brianna, there is some confusion about that comment from Rudy Giuliani that it would be on Thursday.

What we're hearing here is an official familiar with the ongoing negotiations saying the release of the three is imminent. There's no more specific timing. But that it is imminent. And it has been months in the making, we understand from this official, that Ri Yong- ho, the North Korean minister, went Sweden in March, which we did report on, and while he was there, he proposed releasing these three detainees, although the U.S. does not want it to be linked to denuclearization.

So, at this point, there is no confirmation it could be anything more than imminent. We even heard from U.S. President Donald Trump saying there could be good developments that will be announced shortly. It wasn't the specified what those developments were, although there are some assumptions that it could be to do with these three detainees.

But even the families at this point, Brianna, haven't heard anything. So clearly they would like this to be accurate, that it is going to be Thursday. But it's looking like it may not be.

BLITZER: And real quick, Paula, is this something that could be tied to this summit between Trump and Kim?

HANCOCKS: It's certainly being called a goodwill gesture from the state department, from the White House. They're saying if it happens, that is a goodwill gesture. And it wouldn't be a surprise if it were going to happen, because obviously the North Koreans want to have something like this before that crucial summit -- Brianna.

KEILAR: Paula Hancocks, thank you so much.

I'm Brianna Keilar. And thank you for watching.

"ERIN BURNETT OUTFRONT" starts now.