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Trump White House; Donald Trump Allegations; Three Americans Imprisoned in North Korea; Northwestern India Dust Storms; Human Trafficking in Hong Kong; Giuliani Explains Why He Revealed That Trump Paid Back Cohen For Stormy's Hush Money; U.S. Warns China Over Military Buildup In S. China Sea; U.S. Chinese Lasers Injure U.S. Pilots In Djibouti; Famed Bicycle Race Begins Friday In Jerusalem. Aired 2-3a ET

Aired May 4, 2018 - 02:00   ET

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


[02:00:09] NATALIE ALLEN, CNN, ANCHOR: The changing narrative in the hush money saga. President Trump's legal team plays catch up after one of his top lawyers drops a bombshell. Also this hour, authorities in Hawaii order hundreds of people to get to safety as one the state's most active volcanoes erupts. Also, dozens of people are dead, hundreds injured after a powerful dust storm slams into Northern India.

We'll have a report about that as well. Hello, everyone. Thank you so much for joining us. I am Natalie Allen, live from the CNN Center in Atlanta, and this is the CNN Newsroom. Our top story, U.S. President Donald Trump changing his story again about porn star Stormy Daniels, he now admits reimbursing his personal attorney the $130,000 paid to keep her quiet about an alleged affair.

Mr. Trump said in a tweet that that type of hush agreement is common with celebrities and people of wealth. All of this is leading to a White House crisis of credibility. For more now, here's our Senior White House Correspondent, Jeff Zeleny.

JEFF ZELENY, CNN, SENIOR WHITE HOUSE CORRESPONDENT: White House Press Secretary Sarah Sanders defended herself and the President, saying they were giving accurate information at the time as they knew it, as it relates to the changing story about Stormy Daniels. But it's also clear Sarah Sanders said she only learned about that last night watching television. That's one clear sign this credibility crisis is rooted in the Oval Office.

(BEGIN VIDEO CLIP)

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

ZELENY: President Trump searching for rays of optimism today, amid more White House whiplash over new revelations he was the source of hush money paid to Stormy Daniels before the 2016 election. Rudy Giuliani, one of the President's new lawyers contradicting months of denials the President knew anything about the $130,000 payment his lawyer Michael Cohen made to the adult film star. UNIDENTIFIED MALE: (Inaudible) and the President repaid it.

ZELENY: Those four words, the President repaid it, are at odds with everything the President and the White House have led Americans to believe. It's clear Trump and his new legal team are waging a two- front war, a political fight and a legal one. By trying to discredit Special Counsel Robert Mueller's probe, they're hoping to inoculate themselves for the outcome of an investigation for which they cannot control. A month ago, Mr. Trump said this on air force one.

UNIDENTIFIED FEMALE: Do you know about the $$130,000 payment to Stormy Daniels (Inaudible)?

ZELENY: In the Rose Garden today at a national day of (Inaudible) ceremony, he did not answer a central question weighing on the White House.

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

ZELENY: In a strain of tweets, he acknowledged the payment and the legal rationales, saying the agreement was used to stop the false and extortionist accusations made by her about an affair. Cohen, the President's long time lawyer and confidant, is under FBI investigation, at issue as whether the $130,000 paid to keep Stormy Daniels from telling about her alleged affair with the President could be seen as an illegal campaign contribution.

Giuliani addressed that point during interviews on Fox News, when he insisted Cohen was paid back.

RUDY GIULIANI, DONALD TRUMP, LAWYER: He was definitely reimbursed. There's no doubt about it. If we had to defend this as not being a campaign contribution, I think we ca do that. This was for personal reasons.

ZELENY: (Inaudible) White House officials were caught off guard by Giuliani's remarks, a point he did not dispute. He told CNN they were, there is no way they wouldn't be. The President is my client. I don't talk to them. For months, White House Press Secretary Sarah Sanders has denied allegations of the President's affair or knowledge of the hush money. She said today, she was not knowingly misleading Americans.

SARAH SANDERS, WHITE HOUSE, PRESS SECRETARY: The first awareness I had was during the interview last night.

(END VIDEO CLIP)

ZELENY: Now Sanders said the President eventually learned about the payment that was made, but she did not say how. In a separate question at the briefing, she was asked if the President believes he's above the law, shed a one word answer for that. She said no.

ALLEN: Well, on top of all those questions, the always outspoken attorney for Stormy Daniels had this to say. (BEGIN VIDEO CLIP)

MICHAEL AVENATTI, STORMY DANIELS' LAWYER: I also want to pinpoint one issue that I think is really important here. If this was all above board, as Rudy Giuliani now wants the American people to believe that there was nothing wrong with this, then why did they have to structure the reimbursement of the payment across many months in connection with bogus retainer invoices.

Why wouldn't the President have merely have cut a check for $130,000 back to Michael Cohen directly, or wire the money back to Michael Cohen directly. Why create this LLC and go through all of this structuring in order to reimburse money? The whole thing stinks, and the American people are smarter than this.

(END VIDEO CLIP)

[02:05:07] ALLEN: All right. Let's talk more about it with Peter Matthews, a Political Analyst and Professor of Political Science at Cypress College. As always, Peter thanks for coming on.

PETER MATTHEWS, CYPRESS COLLEGE, PROFESSOR OF POLITICAL SCIENCE: You're welcome. Thank you.

ALLEN: We just heard Stormy Daniels' lawyer. This whole thing stinks, and the American people probably don't know what to think of it. What did you make of Rudy Giuliani's stating that the U.S. President did reimburse his lawyer, Mr. Cohen for payment to a porn actress when the President had previously denied that?

MATTHEWS: Totally flabbergasting, because you wouldn't imagine that someone like Giuliani who is supposed to be the person that he brings to bring order rather than chaos, would come on and blurt this out on a TV show, which contradicts the President's statement completely. And it's just created an incredible confusion among the President's own legal team and caused a lot of problems and put the President in legal jeopardy possibly, too.

ALLEN: Right. His comments seemed to blind side the White House legal team, and as well as White House Spokeswoman Sarah Huckabee Sanders. And we've been here before when one part of the President's team is saying one thing and then another thing comes from the President himself, and it leaves more citizens wondering perhaps where's the truth here?

MATTHEWS: I was going to use the word chaos and untruth as well. And we know the President has spoken untruth many times, about 69 percent of the time because some (Inaudible) compared to President Obama's 29 percent of the time, and President Bush's 40 percent of the time. So this is something that the President already has the reputation, is not being a straight shooter.

And there's a real problem when he's facing these kinds of investigations and possible criminal charges, who knows, coming up with the Mueller investigation. So he's got to be above board and he's not in this case. And this came across very clearly with these events of today. I would also say campaign finance issue is extremely important because the President did reimburse that money. He was actually not reporting an in-kind expenditure of the campaign by himself. Even though he's not limited, he could give as much money himself as he wants to (Inaudible) campaign. He has to report that, and this money was not reported and that's (Inaudible) it's a violation of the law actually.

ALLEN: Right. So Mr. Giuliani could have put this President in legal jeopardy with his comment, I suppose. But you know, Giuliani was brought on, Peter, when the U.S. President was trying to beef up his legal team began after two of his lawyers quit. He's now bringing in Emmet Flood, a lawyer hired by Bill Clinton during his impeachment proceedings. What does that show as far as where the White House would think Mr. Mueller's investigation is going to go next?

MATTHEWS: I think they're getting prepared for possible impeachment procedure, because Emmet Flood is an expert in that area. He also defended President Clinton in keeping him from getting removed from office, and he also was involved in representing President Bush in the relationship with Congress. He had a lot of experience on the executive branch, and he's a very tough lawyer.

So the President being able to get him to come aboard so far can be seen as a positive thing, but the next day that he comes aboard, Giuliani blows it. And what kind of a team is this, even with Emmet Flood. So it should be very interesting to see how Flood can actually deliver or would he be able to what he needs to deliver.

ALLEN: Right. And we also heard Mr. Giuliani discredit, trying to discredit the Mueller investigation. It seems that is something that's floated over and over again, but then when you ask others align with the President, they say the President is not thinking about firing Mueller. It still kind of keeps it up in the air where this White House is in relation to supporting the work that Mr. Mueller and his team are doing.

MATTHEWS: It's a double message. One is to discredit Mueller so that it can seem that no one will believe him and that if he does come up with some charges that it would be credible as far as Trump is concerned. The other thing is to say I'm going to comply with what this Special Counsel is asking for, because after all, a law abiding President. I am in the right. I haven done anything wrong, no collusion, no collusion, it's a mantra with him.

It's quite amazing. And we have to just wait out and see that Mr. Mueller has got a lot of expert team on his side, and they've got a lot of investigation going very strongly, lots of interviews, data they collected. And I am sure that the Presidents team doesn't even know what Mueller team has on them, might be quite shocking in the end.

ALLEN: Well, there are reports that some people on Capitol Hill, from Republicans are trying to find out perhaps what area that Mr. Mueller might go in his interview with Mr. Trump if it comes to that. What's your reaction to that? MATTHEWS: That's another problem. There has got to be separation of

powers, Natalie. And we have that system in our constitution, checks and balances. And the President should not be interfering with the investigation. Congress should not be interfering with the Justice Department, trying to find all this information about Mueller.

[02:10:01] They should let the investigation continue as it should under the Special Counsel's aegis. And instead of interfering, that's violating the checks and balances (Inaudible) in separation of powers that we have. I didn't Congress should be doing this in that way.

ALLEN: Peter Matthews, as always, thank you for joining us. We appreciate it.

MATTHEWS: Thanks.

ALLEN: Well, the status of three Americans detained in North Korea remains unknown, as questions build over their possible release. This was also news brought by Rudy Giuliani. He said the three would be free.

(BEGIN VIDEO CLIP)

GIULIANI: We got Kim Jong-Un impressed enough to be releasing three prisoners today.

(END VIDEO CLIP)

ALLEN: There you have it, short and sweet. And an official with knowledge of the negotiations told CNN their release was imminent, but the White House says there's still no official word of when they'll be freed. North Korea says Kim Hak-song and Tony Kim were imprisoned for committing hostile acts and Kim Dong Chul is serving a 10-year sentence for espionage. Let's check in with our reporter in Seoul, Paula Hancocks. Paula, are you hearing anything more about an imminent release?

PAULA HANCOCKS, CNN, CORRESPONDENT: Well, Natalie, the status of these three detained Americans at this point does remain unclear. As you say, the White House and the State Department saying that they couldn't confirm or deny the reports that the three detainees had been moved from a labor correctional facility or a labor camp to a hotel in Pyongyang, that they simply cannot stand that (Inaudible) at this point, they're telling us.

We did have one official who was confirming to CNN that the release could be imminent and that it had been months in the making. Now we know that the North Korean Foreign Minister Ri Yong-ho went to Sweden in March. Sweden represents the United States and its interests when it comes to North Korea. And according to this official who is familiar with the ongoing negotiations, telling CNN that he had proposed releasing the detainees at that point.

U.S. officials were being told as well, were very keen it wouldn't be linked too closely to denuclearization, wanting to focus on the denuclearization part. But clearly, there has been a lot of speculation ahead of this summit between the U.S. President Donald Trump and the North Korean leader Kim Jong-Un, that this could be one of the potential concessions that Kim Jong-Un gives.

In the past, he has been criticized for using detainees as bargaining chips. And certainly, critics of Kim Jong-Un would suggest that he is trying to do the same again now.

ALLEN: In this era of hope with the forward movement in denuclearizing North Korea, Kim Jong-Un is looking for ways to show support to working with South Korea and the rest of the world, and releasing these detainees would be part of that spirit that we're seeing, wouldn't it?

HANCOCKS: Well, that's right. We've heard from both the White House, sorry, and the State Department that they would see this as a good will gesture. We also had reporters questioning the unification ministry here in Seoul. They're asking about six South Korean detainees who are still being held in North Korea, asking whether or not they would be released. There has already been a summit between the North and South Korean leaders.

And there was some hope and speculation, certainly in local media before that, that the release of some if not all of those detainees would be part of the package of this summit that happened. But clearly, that is not the case. So the hope is from the families of these American detainees that their optimism is in the right place, because at this point they say they haven't heard any specifics.

They haven't heard any timing or any details of when their loved ones could be released, Natalie?

ALLEN: All right. We'll stay in close contact with you for any further information. Paula Hancocks for us, thanks so much. Northwestern India tries to recover from a deadly dust storm and more severe weather could be on the way. We will have the latest forecast for you just ahead. Plus, a global problem with a human face, a CNN's (Inaudible) report on the personal cost of modern day slavery in one of the world's busiest cities.

(COMMERCIAL BREAK)

[02:15:00] ALLEN: A part of Hawaii is under a mandatory evacuation. This is a residential area and you can see steam and lava bubbling up from cracks in the ground. How unsettling must that be? Almost 800 structures are currently threatened. Authorities have opened shelters and have ordered more than 1700 people to leave immediately. The area expected is located on the eastern part of Hawaii's big island. It's close to Mount Kilauea, one of the world's most active volcanoes. It sent huge plumes of smoke into the sky after hundreds of earthquakes shook the area last week.

And a powerful dust storm has killed at least 110 people. It went through Northern India, in and around the state of (Inaudible). Authorities attribute the high death toll to people trapped under falling debris. The (Inaudible) brought wild winds that downed electric poles and uprooted trees and triggered countless lightning strikes that ignited fires. Our Nikhil Kumar has more for us from New Delhi.

(BEGIN VIDEO CLIP)

NIKHIL KUMAR, CNN, CORRESPONDENT: (Inaudible) still reeling from the aftermath of a deadly night. More that 100 people died after a violent summer storm lashed the region Wednesday. (Inaudible) is its largest state. It sits just south of Nepal was the hardest hit. The deadly cocktail of winds (Inaudible) and thunder swept through the area.

We even witnessed the storm here in Delhi, hitting the Indian capital during the evening rush hour. Across Northern India, hundreds more people have been reported injured. And not just people, out in the countryside, live stock was hit. More than a hundred cows, buffalos, goats and other animals were killed. Power to many homes across these states was also knocked out.

Now dust storms are a common occurrence here at this time of year, ahead of the annual monsoon. But this was unusual and it felt unusual. (Inaudible) rains and thunder after these dust storms. Weather experts say this happened because an unusual combination of factors. And different storms effectively came together. On the ground, rural areas suffered the most. Officials say many of the deaths occurred because of falling trees and collapsing ceilings and walls in (Inaudible) communities was weakened for structure.

The worse of the storm in many of these communities very late at night, the victims and their houses they were sleeping in were simply not prepared, Nikhil Kumar, CNN New Delhi.

(END VIDEO CLIP)

ALLEN: Ivan Cabrera is here with more about it. And that night time video really shows what they were dealing with, how horrible.

IVAN CABRERA, CNN, METEOROLOGIST: It was, in a way, like the perfect storm because the storm that triggered that dust event happens at night, and also very little warning. People are sleeping, so all of a sudden trees start caving in to your homes, and that is what caused the high death toll. It was just something that happened very quickly, and so it was very little time to warn anybody if at all, and you saw that death toll continuing to climb.

[02:19:58] The other story we're following of course, is in Hawaii on the eastern side of the big island that you talked about. Do you see that? The lave flow -- let's talk a little bit about that.

(CROSSTALK)

CABRERA: My goodness. And we're talking about the ash that you normally see -- we covered volcanoes that plume of ash that comes up into the atmosphere sometimes impacts travel, because planes have to veer around it. Well, what Natalie showed you there was also lava spewing in from the ground where folks live, and that's why we had those evacuations. So let's fly in on the eastern side of the archipelago, there's

Kilauea, the eastern rift of the island. It's a complicated system, right? We have a volcano, but what's actually causing the threat is actually the crater here partially collapsing, as does the lake. And so you've got this lava flow now that has continued to threaten folks 30 kilometers to the east in this area across the eastern island and backed up -- the (Inaudible) states is primarily will be having evacuations.

Hundreds of people have now gotten out of the way and would perhaps have more. The civil defense is on site there. So if we need to get more folks out of the way, we'll do that very quickly there. But that is the threat now from Kilauea. Not so much the plume you saw from the sky but the lava coming in from the ground that's continuing to threaten many homes.

So that's what's going on with Kilauea here. We have a 5.0 earthquake which triggered the partial crater collapse and the lava flow that commenced thereafter. But before that, we've had hundreds of earthquakes in the two to two five range, and that's what alerted volcanologists. Hey, there is something going on here, and certainly there was an eruption is now underway.

We've got the volcano watch that has been upgraded to a warning and the alert orange as well. We'll keep you posted obviously if things change here. But quickly to our friends up in northern India, 132 kilometer per hour winds, 41,000 lightning strikes. What caused this? Nothing to do with the monsoon, so basically we had a cluster of thunderstorms that all got together, and the outflow from the thunderstorms which is pretty normal.

In this case, though, it wasn't. It was very severe, and so the winds were able to kick up typhoon force winds and that's what collapsed a lot of the buildings here, this one region that was impacted. And you saw as I mentioned, Natalie, this happened basically at night. So all of a sudden people are sleeping and their rooms start caving as a result of this very violent storm that you typically by the way, see in the Midwestern (Inaudible) of the United States.

In this part of India, you typically don't see this kind of cluster of thunderstorms coming together like that, but it certainly did. And that's what caused the high death toll. By the way, forecast looks much better the next few days, so I'll leave you with a little bit of good news there.

ALLEN: We'll take it. All right, Ivan, thank you.

Later this summer, lawmakers in Hong Kong are expected to discuss a bill to criminalize human trafficking. Advocates hope it is the first solid step to tackle a problem that is thriving in Hong Kong's darkest corners. As part of CNN's Freedom Project, shining a light on human slavery, CNN's Anna Coren has the story of one woman who lived that nightmare in one of the world's wealthiest cities.

(BEGIN VIDEO CLIP) ANNA COREN, CNN, CORRESPONDENT: Through a (Inaudible) off a busy Hong Kong street is a place called (Inaudible). It's basic cramped and exposed to the elements, but it's the only sanctuary thousands of domestic helpers have ever known, who suffered abuse and exploitation at the hands of their employers. Twenty eight year old Atik who wants to hide her identity for safety reasons arrived from Indonesia in 2012, with the promise of a good paying job by an employment agency.

They told me Hong Kong is a place to earn more money and achieve your dreams, she said. So I came here hoping to save enough money to one day build a home and support my son's education. Instead, Atik says her female employer deceived her. She claims the woman took her passport, made her work seven days a week, 20 hours a day. Physically and psychologically abused her, threatened to have her deported if she didn't resign her contract, and to top it off, refused to pay her salary.

My employer said if I completed my five-year contract, she would give me a bonus pay. That's why I put up wit the mistreatment, but it was all a lie. After almost five years, Atik claims her employer paid her a total of $1,500 U.S. dollars, 5 percent of what Atik says she was contractually owed. And it wasn't until a particularly harsh beating when she was punched in the face and kicked when Atik said she finally gathered the courage to escape.

UNIDENTIFIED FEMALE: The experience of Atik is the experience of many domestic workers in the city. The front is that this is continued to happen again and again. (Inaudible).

[02:25:02] COREN: Atik is one of the 350,000 foreign domestic workers living in Hong Kong, and it's estimated that 1 in 6 is a victim of labor exploitation, according to a 2016 NGO report. And while Hong Kong prides itself as one of the wealthiest and most sophisticated cities in the world, one activist speaking to CNN called its track record on human trafficking appalling.

The U.S. State Department's annual trafficking in persons report last year placed Hong Kong on the tier two watch lists for the second consecutive year, on par with countries like Iraq, Bangladesh, and Rwanda. And unless it makes some drastic changes, it's at risk of dropping even further down the list, joining the likes of North Korea, Sudan, and the Congo as the worst offenders of human trafficking.

UNIDENTIFIED MALE: We don't want to be placed on the same level as African, some African states or North Korea, who doesn't even come close to acknowledging human trafficking as an issue. We don't want to be associated with that. So that's why I think the Hong Kong government and the legislative council in Hong Kong needs to positively make the change.

COREN: Hong Kong Legislative Counselor, Dennis Kwok, has proposed a bill based on the U.K. and Australian model to create a law that would combat all forms of human trafficking. And while Hong Kong claims it is fighting the problem, Mr. Kwok believes the government which drafted a national action plan to combat trafficking five years ago, is still dragging its feet. UNIDENTIFIED MALE: This is not just about Hong Kong. If we don't

have laws that here to tackle international human trafficking, we're actually affecting the rest of the region or the rest of the world.

COREN: And as for Atik, her fight for justice lies with the courts. Her employer has been charged with assault and is yet to enter a plea. But as long as this court case drags on, Atik must legally stay in Hong Kong, when all she wants is to return home and wrap her arms around her son who she hasn't seen in more than five years. Anna Coren, CNN Hong Kong.

(END VIDEO CLIP)

ALLEN: President Trump and the Special Counsel investigation. The President's new attorney says if he does testify, it should not be under oath. Also, China's military build up in the South China Sea again provokes U.S. complaints, this time over reports of missiles that could disrupt international shipping. It's all ahead here as we push on to CNN Newsroom.

(COMMERCIAL BREAK)

[02:30:07] ALLEN: Welcome back. I'm Natalie Allen at CNN Center. You're watching CNN NEWSROOM. Here are our top stories. The Trump White House facing credibility questions sparked by new Presidential Attorney Rudy Giuliani. Press Secretary Sarah Sanders said Thursday she did not know about the president's repayment to another lawyer of hush money to a porn star until Giuliani said it on TV Wednesday night.

Part of Hawaii's big island are under mandatory evacuation. You can see steam and lava bubbling up in a residential area and residents are trying to get out. Authorities have ordered more than 1,700 people to leave now. The eruption comes after hundreds of earthquake shook the eastern part of the big island. At least 110 people have been killed by violent dust storms across India's northern state. The weather system brought intense winds, thunderstorms, and countless lightning strikes. Most of those killed were sleeping in parts of their houses that collapsed during the night.

The White House says it cannot confirm reports that three Americans held in North Korea will soon be released. One of those reports came from the U.S President's Lawyer Rudy Giuliani who said the prisoners would be freed Thursday. All we've been told is that their release is imminent. Well, back now to the bombshell statements from Rudy Giuliani now an attorney for President Trump. All his comments about the payment to porn actress Stormy Daniels have gotten the most attention. He made plenty of other surprising admissions especially about the special counsel's Russia investigation. Here with more of that our Jessica Schneider.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN INTERNATIONAL CORRESPONDENT: 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.

RUDY GIULIANI, LEGAL COUNSEL TO DONALD TRUMP: This started as collusion with the Russians. No. No, they go to obstruction of justice, collusion among the players, and what they're really trying to do is trap him into 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.

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

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

SCHNEIDER: Giuliani said 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 going to insist that they're going to have to treat him the same way as Clinton. Two and a half house, we end, we walk out. I would like to get one not under oath. I'd want it a video tape and I'm not videotape it, audiotape, because I want to make sure they don't misrepresent his answers.

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

GIULIANI: Sorry, Jim. You're a lair, 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's 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.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: 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 DIRECTOR: These guys know more about the Trump campaign than any one person who worked there. I think they're very focus on Russian collusion. I they believe that they'll get to something. I just disagree.

(END VIDEOTAPE)

ALLEN: Let's talk more about this with Criminal Defense Attorney and Former Prosecutor Troy Slaten. Troy, thank you for being with us.

TROY SLATEN, CRIMINAL DEFENSE ATTORNEY: Thanks for having me.

ALLEN: Well, let's begin with Rudy Giuliani on the Mueller investigation. He's putting pressure on the attorney general, the deputy A.G. to shut down the investigation. That's been called a disgrace. What do you make of that and what do you make of the fact that he's saying that Mr. Trump may indeed face a subpoena?

SLATEN: Well, certainly the attorney general and more specifically with regard to the special counsel the deputy attorney general have the power to shut down the investigation, but it doesn't look like they're going to do that.

[02:35:06] There's a lot of pressure from both political camps to keep the investigation going. And it doesn't look like it's going to end anytime soon much to the chagrin of Donald Trump's legal team now headed by Emmet Flood, former counsel to President Clinton and George W. Bush and Rudy Giuliani.

ALLEN: Yes. Impeachment counsel to Mr. Clinton I believe. So what's on the table here? Is it -- if not a subpoena, it's cooperation, where does that stand?

SLATEN: Well, that's really two options. The only way that you can force the president to talk is either by subpoenaing him before the -- before the grand jury or by negotiating the terms of some sort of sit down. Either live in person questions to Robert Mueller and his team of investigators or there's even the possibility, small possibility of allowing the president to respond to written interrogatories which written questions. That seems very like a very small possibility. And it will really turn on how important the special counsel's office thinks that Donald Trump's personal testimony is to the outcome of their investigation. If they place a very high weight, if they need something that the president has to say then they're going to fight to have him talk to them either by subpoena and by litigating that. But if they don't think it's very important then maybe they'll let him respond to written questions or to have a sit down on his terms.

ALLEN: Let's turn to another issue that Mr. Giuliani brought up and that is Stormy Daniels and the payment. He gets in the mix as a new attorney for the president and suddenly there was a known payment to Cohen, the lawyer, by the U.S. President relating to Stormy Daniels whom the president still says he did not have an affair with. However, he says there's no obstruction of justice and he didn't violate campaign finance laws so says Mr. Trump, what do you make of it?

SLATEN: Well, Rudy Giuliani let down a little bit of a bombshell yesterday where he was saying basically contradicting what the president said on Air Force One about a month ago when he had no idea about any Stormy Daniels payment and you'd have to talk to Michael Cohen. I don't know anything about it. And then Rudy Giuliani says just yesterday that the president knew all about this and that it was no violation of campaign finance law because the president reimbursed Michael Cohen for this. But he had sort of convoluted way of explaining the payments to Michael Cohen by saying that it was part of a monthly retainer payment which is kind of unusual. Normally, attorneys' don't in their monthly retainer from their clients pay out large cash settlements. And so Rudy Giuliani said that as part of the monthly retainer that Michael Cohen used that to pay the settlement to Stormy Daniels.

ALLEN: And is this putting Mr. Trump in some legal jeopardy with what Mr. Giuliani has said?

SLATEN: Well, it could. It really places Michael Cohen in potential legal hot water with regard to his criminal investigation that's currently pending in the Southern District of New York. But as far as the president, it could place him in some small campaign finance hot water. But it's really more of a political ill than a legal ill.

ALLEN: And also Troy, the question is why would Mr. Giuliani go on record with this? He made it seem that this discussing this was part of strategy aligned with the White House, but apparently according to our reporting this left the White House advisors scrambling. Let's listen to an example of that right here.

(BEGIN VIDEO CLIP)

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

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: There was no knowledge of any payments from the president.

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

UNIDENTIFIED MALE: The president strongly, clearly, and has consistently denied these underlying claims.

TRUMP: He did absolutely nothing wrong. There were no campaign funds.

SANDERS: Look, the president has denied the allegations.

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

TRUMP: No, I don't know.

(END VIDEO CLIP)

ALLEN: Well, there you have it. It's a flip-flop. It's one thing one day and one thing another. And it seems that Mr. Giuliani is now muddy -- already murky waters surrounding this case. We know that Rudy Giuliani loves the spotlight. Is he just doing his thing on centered? What do you make of this?

SLATEN: Well, he's defending his client who's the President of the United States. And yes, some of the White House communication team were little bit blindsided by what he had to say because he just cleared this with the president. There is no White House Communications Director right now ever since Hope Hicks left.

[02:40:01] But as far as legal hot water for the president, you know, making comments off-the-cuff on Air Force One, Sarah Sanders making comments from the White House press podium aren't statements under oath. And when push comes to shove what's important is what's said in court or to an FBI investigator. That's when it counts.

ALLEN: And until then the public will just be scratching its head quite a lot as this story evolves yet again. Troy Slaten, we thank you for joining us. We appreciate it.

SLATEN: Thanks for having me.

ALLEN: U.S. trade officials are in whirlwind negotiations in Beijing hoping to avoid a trade war with China. We'll get an update on those talks in just a moment. Also ahead here, a world class sporting event gets underway in Jerusalem just a few hours from now. We'll explain why this bicycle race is such a big deal to Israel.

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ALLEN: U.S. and Chinese trade officials are holding another round of crucial negotiations aimed at avoiding a trade war between the two countries. U.S. Treasury Secretary Steven Mnuchin and other senior U.S. officials have until Friday evening to try to get something done then it's back to the U.S. So far, there's no clear indication of progress after the first round of talks on Thursday. Mnuchin only said they were having good conversations.

Meantime, the U.S. is becoming increasingly agitated over China's military buildup in the South China Sea. The issue is over a cluster of manmade islands that China claims in a disputed part of the ocean between Vietnam and the Philippines. U.S. intelligence says China has likely deployed anti-ship and anti-aircraft missiles on some of those islands posing a serious risk to international shipping. Let's go to our Matt Rivers. He's covering both of these stories for us. Hello to you, Matt. First of all, I want to ask about what's going on out in the sea. What are China's goals with these islands? What's behind the buildup?

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Well, it's been going on for several years now, Natalie. You've seen different sets of artificial islands being built-up by the Chinese government. They would claim that they're merely building their own islands as they in a peaceful way as they're allowed to as this is their territorial water.

Hardly any countries in the world respect that though and there is, you know, universal agreement that what China is doing here is militarizing these islands in an attempt to project its military power far from its shore. And with this latest deployment of missile system that the U.S. intelligence officials and the White House are saying, "It's highly likely, they were deployed during recent military drills in April that the Chinese military conducted.

Now, you're seeing a further step. These missiles were deployed in the Spratly Islands that is one group of disputed islands. There is the parasail islands where missiles have already been deployed in 2016. So, this is just a further step from China, in terms of militarizing these Islands, and it did provoke a response from the house. Let's play a little bit of that sound.

(BEGIN VIDEO CLIP)

SANDERS: We're well aware of China's militarization of the South China Sea. We've raised concerns directly with the Chinese about this, and there will be near-term and long-term consequences.

(END VIDEO CLIP)

RIVERS: But what do those consequences look like? You know, short- term, long-term, are we talking about targeted sanctions? Are we talking about the continuation of an Obama era policy that the Trump administration has continued this so-called freedom of navigation operations where U.S. warships sail very close to these Islands in an attempt to not recognize their sovereignty as Chinese waters?

All of those are on the options on the table. The question is, Natalie, do they do anything? Do they force the Chinese to remove these missiles have been deployed here? And that's not clear that either option would do that.

ALLEN: Matt, let's talk about the other story to the possible trade wars that both countries trying to avoid. Apparently, there is no progress there. Who has more at stake here?

RIVERS: Well, I mean, it's a tough -- it's a tough question to answer. Both sides have a lot to lose. In terms of these negotiations, we haven't had anything publicly release from either side yet. Both sides have downplayed expectations that two days of negotiations here in Beijing could come up with some grand bargain.

We might have some availability from the U.S. side in terms of a press availability before they head back to Washington that has not been confirmed as of yet. But there is a lot at stake for either side. It's hard to tell which one has more to lose, but there are tens of billions of dollars in tariffs that have been threatened against one another already. And what these negotiators are trying to figure out is how to avoid that. The question is, is the trade war inevitable? These guys are sitting there on the table trying to make sure that it doesn't happen. But whether they're making any progress or not at this point we're simply not sure.

ALLEN: All right. We'll continue to follow it. Matt Rivers, for us there live in Beijing. Matt, thank you.

Well, if trade and the South China Sea weren't enough, the U.S. and China are facing another flash point. U.S. military officials tell CNN, Chinese personnel of that country's first overseas military base in Djibouti have been using lasers to interfere with U.S. military aircraft. The U.S. has a critical base nearby, and U.S. pilots have suffered eye injuries from exposure to military grade laser beams. The U.S. State Department has launched a formal diplomatic protest with Beijing.

He is one of the richest men in the world and not shy to share his opinion. But Elon Musk has taken bluntness to a new level. In an uncomfortable call with Wall Street analyst, the CEO of Tesla, dismissed questions saying that they were boring, calling them bonehead. Take a listen.

UNIDENTIFIED MALE (via telephone): So where specifically will you be in terms of --

ELON MUSK, CHIEF EXECUTIVE OFFICER, TESLA (via telephone): Excuse me. Next, boring questions are not cool. Next. We're going to go to YouTube. Sorry, these questions are so dry. They're killing me.

ALLEN: Dry questions, bonehead questions. Since the call Wednesday night. Tesla's stock tumbled. The episode has left some on Wall Street questioning the future of Elon Musk's leadership.

Thursday was World Press Freedom Day, and we're constantly reminded of the dangers journalists face to seek and tell the truth. Journalist like Afghan photographer, Shah Marai, as AFP Getty. He was one of nine journalists killed on Monday in a terror bombing in Kabul. He had an extraordinary eye for simple human moments in chaotic situations.

This photo from February, for instance, shows two Afghan men who lost their legs to landmines. Then, an Afghan man weeps for his relatives at a hospital following a suicide attack. It killed 40 people at a Shiite cultural center in December. And this are burned pages from a Koran after another suicide attack on a Shiite Mosque, last August.

And here, Afghan government officials and police (INAUDIBLE) as a cast of alcohol and drugs is destroy in December 2016. And it was Shah Marai, who brought us this picture of this young boy in a homemade Lionel Messi shirt. The boy eventually met his hero, largely because of this picture.

Coming up here, if you are confused about what to call the U.S. deputy attorney general, you are not alone. Ahead a lesson in phonics and it's more fun than it sounds. Stay with us.

[02:52:08] ALLEN: A few hours from now, one of the world's premier bicycle races begins not in Europe but in Jerusalem. Some call it the biggest sports event in Israeli history. The Giro d'Italia, is second only to the Tour de France, in size. It ends May 27th in Rome. Here's more about it from Oren Leiberman, in Jerusalem.

OREN LIEBERMANN, CNN CORRESPONDENT: A new sporting page is dawning in Israel or at least that's what they're hoping for here. Cycling, a sport in which Israel is a virtual unknown is coming to the Middle East in a big way.

(BEGIN VIDEOTAPE)

RAN ALTERMAN, CYCLING COACH, GIRO D'ITALIA: I will say it's the biggest event ever. It doesn't matter if it's -- you know, soccer or if it's cycling, you just have to be there.

LIEBERMANN: The Giro d'Italya, the world's second-biggest bike race behind the Tour de France has its big start in Israel. So big, the prime minister celebrated the race with this video. And this is the man who made it happen. Eccentric Canadian Israeli, multi- millionaire, and cycling enthusiast Suvan Adams, who built this velodrome.

Between this velodrome, the Giro, and the Israel Cycling Academy team. How much have you invested here?

SYLVAN ADAMS, CO-OWNER, ISRAELI CYCLING ACADEMY: A lot. But I like the word investment if you use. It's an investment in the present, and the future towards the -- towards the two goals that I have for this project which are promoting Israel abroad, and development of the sport of cycling.

LIEBERMANN: Adams, an amateur velodrome champion sees cycling as a bridge between nations. The Giro will have teams from the United Arab Emirates and Bahrain, two countries that have no diplomatic relations with Israel.

ADAMS: Being the only velodrome in the Middle East, if our neighbors want to develop a track riders, they're welcome to come here and ride with us, and develop the sport.

LIEBERMANN: Adam's vision is not the first politics that comes to mind with this Giro. The opening stage in Jerusalem winds its way through arguably the most sensitive city on earth. The course never enters the Old City or crosses in the East Jerusalem considered Israeli occupied territory. The mayor of Jerusalem, Nir Barkat, who says the city is and will remain united demurred on this point.

MAYOR NIR BARKAT, JERUSALEM: We chose the route by beauty and not by anything else. So, the whole issue of how Jerusalem was in '67, in '48, a hundred years ago, 2,000 years ago is totally relevant.

LIEBERMANN: The favorites in this year's Giro d'Italia are the usual big names in cycling, such as reigning Tour de France Champion Chris Froome. The few is rarely cyclists and the race aren't expected to make an impact, but fellow cyclist and the country, this Giro is already a victory. Oren Liebermann, CNN, Jerusalem.

(END VIDEOTAPE)

[02:55:00] ALLEN: We'll be covering it. Well, the U.S. deputy attorney general is playing a big role in controversies hitting the Trump administration, but his name is tricky. As CNN's Jeanne Moos points out even Rod Rosenstein or is that Rod Rosenstein, can't say definitively how to pronounce it. JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT: Caught between a steen and a stine is Rod Rosen whatever.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Remember Rosenstein?

UNIDENTIFIED FEMALE: Thank you Mr. Rosen-steen.

UNIDENTIFIED MALE: Rob Rosen-stine

UNIDENTIFIED FEMALE: Deputy Attorney General Rod Rosen-steen -- stine.

MOOS: No wonder someone finally popped the question.

UNIDENTIFIED MALE: How do you pronounce your last name?

ROD ROSENSTEIN, UNITED STATES DEPUTY ATTORNEY GENERAL: There is no right answer to that question.

MOOS: No right answer?

UNIDENTIFIED MALE: He's alive!

MOOS: Take it from this guy's creator.

UNIDENTIFIED MALE: Frankenstein!

ROSENSTEIN: My father pronounces its stine. That's how I pronounce it --

Good morning, I'm Rod Rosenstein.

But I actually have relatives who pronounce steen, so, I'll answer to either one.

MOOS: But will he answer to this guy?

TRUMP: Rod Rosenstein.

REP. JERROLD NADLER (D-NY), HOUSE JUDICIARY COMMITTEE: Welcome to the House Judiciary Committee, Mr. Rosen-steen -- Mr. Rod Rosen-stine.

MOOS: Please, I don't have much sympathy for all those steens and stines out there, if not with the last name like Moos.

UNIDENTIFIED MALE: Moos.

MOOS: In German, the second vowel, usually takes precedence. So, the E.I. in Rosenstein is pronounced stine. But then, this guy's name should be Wiener.

UNIDENTIFIED FEMALE: Anthony Weiner.

MOOS: Weiner is an exception of the rule. Sometimes, neither choice is great, you want to be a winner or a Weiner? There was some winding on Reddit about the special prosecutor, does anyone else read the name Robert Mueller, and pronounce it like Ferris Bueller?

UNIDENTIFIED MALE: Bueller, Ferris Bueller.

MOOS: But this is Mueller -- Robert Mueller Mueller that we sometimes get the Ferris Bueller treatment.

UNIDENTIFIED MALE: Mr. Mueller.

UNIDENTIFIED MALE: Bueller.

UNIDENTIFIED MALE: Did you talk with Sir Robert Mueller about his investigation?

UNIDENTIFIED MALE: Bueller?

UNIDENTIFIED MALE: To consult with Mr. Mueller.

MOOS: Sometimes it takes a stein to know one. Diane Feinstein.

SEN. DIANNE FEINSTEIN (D-CA), SENATE JUDICIARY COMMITTEE: Yesterday, Mr. Rosen-stine --

UNIDENTIFIED MALE: Mr. Rosen-steen, welcome.

ROSENSTEIN: Thank you.

UNIDENTIFIED MALE: Mr. Rosenstein, thank you, I remember --

ROSENSTEIN: It's just like Feinstein.

MOOS: Stine, steen, it's creating a monster.

UNIDENTIFIED FEMALE: Took the Frankenstein.

MOOSE: Jeanne Moos, CNN.

UNIDENTIFIED MALE: Frankenstein

MOOS: New York.

UNIDENTIFIED MALE: You putting me on.

(END VIDEOTAPE)

ALLEN: I'm going to go with Dianne until I forget and then, also steen again. So, I just want to apologize in advance. Thanks for watching this hour, I'm Natalie Allen. I had another hour of NEWSROOM straight ahead. Hope you stay with me.

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