Return to Transcripts main page
Erin Burnett Outfront
Trump: Meeting with Kim Jong-un is Back On; Trump Meets With North Korean Ex-Spy Chief; Canada Push Back on Imposed Tariffs on Aluminum and Steel; Trump Breaks Protocol, Tweets Ahead of Positive Jobs Report; Stormy Daniels' Attorney Facing Questions over Past Business Dealings; Trump Considers More Pardons Including Rod Blagojevich; Was Trump Targeted by Cell Phone Listening Devices Found Near White House; Kilauea Volcano Devastating Hawaii's Tourism Industry. Aired 7-8p ET
Aired June 01, 2018 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[19:00:05]
ERIN BURNETT, CNN HOST: OUTFRONT next, breaking news. President Trump says his meeting with Kim Jong-un is officially back on. He's welcoming North Korea's former top spy to the Oval Office. So why is he embracing a brutal dictator and alienating America's closest ally?
Plus, Trump breaking decades of protocol with a single tweet ahead of the jobs report. Is he giving his wealthy friends an early heads-up about the markets?
And Stormy Daniels' lawyer, Michael Avenatti facing new questions tonight about his own financial dealings, including his work with a convicted felon. It's an OUTFRONT exclusive report tonight.
Let's go OUTFRONT.
And good evening, I'm Erin Burnett. OUTFRONT tonight, the breaking news, it's on. President Trump declaring the on again/off again summit with North Korea's Kim Jong-un is on again and set once again for June 12th in Singapore. Trump meeting today for more than an hour with the top North Korean envoy Kim Yong-chol at the White House. Here's Trump right after the meeting.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We'll be meeting on June 12th in Singapore. It went very well. It's really a get to know you kind of a situation.
(END VIDEO CLIP)
BURNETT: All right, well, Chol hand-delivered a letter to Trump from Kim Jong-un. And, you know, it was a letter from Kim Jong-un, right? I mean, look at that envelope. It's a big envelope.
All right, putting aside the absurdity of that situation, you'd think a letter from Kim would be important, right? Well, the president was asked about what was said in that letter and at first, you know, he made very light of it. He toyed with reporters.
(BEGIN VIDEO CLIP)
TRUMP: That letter was a very nice letter. Oh, would you like to see what was in that letter. How much? How much?
(END VIDEO CLIP)
BURNETT: Just moments later, though, Trump actually said that, no joke, he has not even read that very nice letter.
(END VIDEO CLIP)
TRUMP: I haven't opened it. I didn't open it in front of the director. I said, would you want me to open it? He said, you can read it later. I may be in for a big surprise, folks.
(END VIDEO CLIP)
BURNETT: All right. Just weeks after insisting that a meeting with Kim would be about total denuclearization of the nuclear -- of the Korean Peninsula, today, Trump totally moved the goal post. To basically the five yard line.
(BEGIN VIDEO CLIP)
TRUMP: I think it's a getting to know you meeting plus. And that can be a very positive thing.
(END VIDEO CLIP)
BURNETT: Getting to know you plus. That is a far cry from just two weeks ago when Kim threatened to call off the summit and Trump responded by being extremely clear with this.
(BEGIN VIDEO CLIP)
(INAUDIBLE)
TRUMP: We'll see what happens.
UNIDENTIFIED FEMALE: Are you still going to insist on denuclearization?
UNIDENTIFIED FEMALE: Will you insist of the denuclearization of the Korean Peninsula?
(INAUDIBLE)
(END VIDEO CLIP)
BURNETT: Are you still going to insist on denuclearization of the Korean Peninsula? Yes. Maybe not.
But let's just not mince words here. Today was a historic moment. The former North Korean spy chief, one of Kim Jong-un's closest and most trusted aides was in the Oval Office and he stayed there for an hour and 22 minutes. He and Trump then bid a long goodbye in the Rose Garden. They smiled. They posed for cameras.
And Kim Yong-chol's Oval Office access to Trump is historic. No North Korean official has been in the White House in 18 years. And get this, a special waiver had to be issued for the North Korean envoy to leave the 250-mile radius of the U.N. building in New York City which a waiver, obviously, Trump granted.
Consider this. During the Obama administration and two years of negotiations on nuclear armament with Iran, no Iranian diplomat was ever granted that waiver. No Iranian ever visited the Obama White House even after the nuclear deal was signed. Never mind before negotiations even started, and never mind the Oval Office.
Trump's appusive welcome though did not stop at the pomp and circumstance in the Oval Office. Just this sums it all up. Here he is one week ago and then here he is today after the meeting.
(BEGIN VIDEO CLIP)
TRUMP: Our very strong sanctions and maximum pressure campaign will continue as it has been continuing.
I don't even want to use the term maximum pressure anymore because I don't want to use that term because we're getting along. You see the relationship.
(END VIDEO CLIP)
BURNETT: OK. So maximum pressure is off because we're getting along. I don't need it anymore. So is Trump today seem a bit anxious to please Pyongyang and make a deal? Well, the Senate majority leader, Republican Mitch McConnell sure seems to think so.
(BEGIN VIDEO CLIP)
SEN. MITCH MCCONNELL (R), KENTUCKY, SENATE MAJORITY LEADER: I think for these situations to work, you have to not want the deal too much. If you fall in love with the deal, and it's too important for you to get it, and the details become less significant, you could get snookered.
(END VIDEO CLIP)
[19:05:00] BURNETT: There's a new word. Snookered. But it says a lot.
And today there was also this jarring juxtaposition. While Trump embraced North Korea, a country whose leader maintains labor camps, allegedly assassinates his rivals, allows his own people to starve, and has released videos like these promising, quote, the total annihilation of the United States, he simultaneously launched a trade war against America's neighbor and most loyal ally.
A point just made by a visibly angry Canadian Prime Minister Justin Trudeau.
(BEGIN VIDEO CLIP)
JUSTIN TRUDEAU, PRIME MINISTER, CANADA: From the beaches of Normandy to the mountains of Afghanistan, we have fought and died together. That Canada could be considered a national security threat to the United States is inconceivable.
(END VIDEO CLIP)
BURNETT: So Canada is a national security threat but North Korea is in the Oval Office? Jeff Zeleny is OUTFRONT tonight at the White House. Jeff, you know, look, we went from maximum pressure to we don't need it because we're getting along. That big envelope, opened or not. Sure made a big impression on this president.
JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Erin, it certainly did. And good evening. I mean, we've heard President Trump really for weeks saying he would walk away from a deal. But today he walks squarely into that meeting. He was the single driving force here between, you know, essentially what happened a week ago to what happened now.
He wants that meeting to go on. So it's going to go on in 11 days but you could hear the tone in the president's voice wanting it so much, of course. But he was moving back the goal post. No doubt he called it a process about nine or 10 different times. This is the start of a process of a discussion.
Now he said he is convinced that Kim Jong-un is committed to getting rid of his nuclear arsenal at some point but he said he wants to be careful with that. That is a far cry from, you know, the earlier comments from complete, you know, abolishing it entirely.
But Erin, we're learning some interesting information tonight. I was just told by a White House official that that letter, that huge package, the envelope it came in, it was actually examined before it arrived here at the White House. Not surprisingly by the U.S. Secret Service for any, you know, poisons or toxins on it. So that's one of the reasons it was opened there. But the president read that before leaving for Camp David.
But also interesting, Erin, when you look at the pictures of who was in the room. Secretary of State Mike Pompeo was in that meeting. The people who were not, perhaps even more interesting. Mike pence, the vice president, and John Bolton, the National Security adviser. That is showing perhaps a rift in this administration. Who wants this meeting to happen? Who wants this deal to happen. And those who are perhaps more skeptical.
Erin?
BURNETT: All right, Jeff Zeleny, thank you very much.
OUTFRONT, bob Baer, former CIA operative, Jean Lee, former Pyongyang bureau chief for the Associated Press, and Frank Bruni, New York Times columnist.
Frank, I mean, it's a stunning day. You get an hour and 22 minutes inside the Oval Office as the former spy chief, one of the closest confidantes of Kim Jong-un on the same day Justin Trudeau is basically told Canada is a national security threat. It's been 18 years since a North Korean official has even gotten into the White House and yet here Trump is very publicly embracing him.
FRANK BRUNI, NEW YORK TIMES COLUMNIST: It's really quite baffling. You're not going to hear me say this too often, Erin. I agree 100 percent with Mitch McConnell. I think by a lot of signs, Trump wants something here too much.
I think when the meeting was called off, he felt a sense of loss but we have no good answers. We have no indications that between then and now, anything has happened that has given us confidence that North Korea is serious about getting rid of its nuclear arsenal. So why are we doing this?
He said, it's getting to you meeting plus. It's actually more than that. The moment he meets with Kim in Singapore, he has legitimized ad never before North Korea an international pariah which keeps threatening people with its nuclear weapons.
If that's going to happen without any serious, serious commitment from them in advance, I'm just baffled as to why he is so -- why he feels this is going to end up redounding to his favor and to America's favor.
BURNETT: And Bob, you know, look, here's the situation. He comes into the Oval Office, Kim Yong-chol. His letter is examined for toxins. I mean, that's just the situation here between two countries that don't have diplomatic relations. We just saw the videos, right? They threatened annihilation of the United States.
And yet the president says, let's just not say maximum pressure anymore because we're getting along.
ROBERT BAER, FORMER CIA OPERATIVE: Well, Erin, exactly. He's backing off the precondition that they agreed to get rid of their nuclear weapons and missiles. That clearly is off the table. And the fact that he used the word process, that in effect means recognition that North Korea is now a nuclear power and there's not much we can do about it.
And going back to, you know, the room, the fact that Bolton was there was key. I mean, he's the guy that talks about we can only get rid of these nuclear weapons with arm forces. In fact, he wasn't there. It was a signal to the North Koreans, hey, you know, anything is possible. Let's do this summit. Let's draw this out.
But right now you don't have to give up your nuclear weapons.
BURNETT: All right, we're not put in the guy that you have personally called out by name saying he's a problem. [19:10:03] We're going just to remove him from the room, right? So they even are dictating who is in the room whether implicitly or explicitly. That's what happened.
Jean, you have personally negotiated with the North Koreans. How crucial was this meeting today between the former spy chief and the president.
JEAN LEE, DIRECTOR, CENTER FOR KOREAN HISTORY AND PUBLIC POLICY AT WILSON CENTER: If you are trying to get the North Koreans to the table, you also have to understand how they think, what they want, and how they operate. I do think the fact that John Bolton wasn't in the room is recognition of the fact that some of the comments that he made and the vice president made may have derailed these talks.
I would not have advocated announcing or agreeing to this summit the way that the president did. My attitude with the North Koreans and my strategy with the North Koreans was always to keep that under wraps until it actually happens. But he did agree to it and so now -- now that we know that they -- he wants it to happen, the North Koreans want it to happen, the point is to try to get them to the table.
The comments that were made comparing North Korea to Libya and threatening the Libya model did not help. That is the type of comment that is not going to get the North Koreans to the table. And in that sense, I think that, you know, you do have to butter them up if you want them to be there. And that's what we're seeing.
We're seeing these two leaders buttering each other up. They understand what it takes to work with somebody who has got a big ego.
BURNETT: Yes. I mean, although, Frank, I mean, the buttering, certainly, I mean, you know, he got a big envelope given to him, OK, fine. But the buttering seemed to go one way, right? Denuclearization. It's a free condition. It's not their maximum pressure. Let's not worry about it.
And the president relished the moment. After the meeting, you know, he came out to talk to the cameras.
BRUNI: Yes.
BURNETT: He was very happy. Four times he started to walk away and then literally pulled himself right back and walked back toward those microphone because he wanted to stay a little bit longer and keep talking.
BRUNI: He is loving the theater and the drama of this. And he's loving the theater and drama of this so much that it makes you wonder and worry all the more that he's really attending to the substance of it. Because as everyone said tonight, we have no way of understanding what has happened, why the goal posts have moved. Why suddenly it's a good idea to meet when it wasn't a week and a half ago or whenever that was.
We have no answers for that and it seems more than anything else like Donald Trump just relishes the theater of this. And one of the things, it's important to note, when we're talking about this or when we're talking about Roseanne Barr, we're not talking about Russia and Mueller. And I don't think that's insignificant.
BURNETT: And, you know, Bob Baer, look, when this -- Kim threatened to call this off, right, and Trump was debating and then he was the first one to do it, right because it was important to be the first one to call it off. You heard him say, are you still going to insist on denuclearization? He was asked directly. The answer, yes, but apparently not.
BAER: You know, we're getting sucked into the North Korean vortex, this whole process thing. And at the end of it, I guarantee you he's still going to have his nuclear weapons, and I think this president really, truly believes that he can pull off the deal of the century. You know, the art of the deal. And he's going to, you know, promote this as a great success by 2020 if you can just guarantee this is going to happen.
BURNETT: And yet, Jean, you heard the Republican leader of the Senate. Obviously majority leader, Senator McConnell saying snookered. If you want a deal too badly, you get snookered. And that's what he's worried is happening here. Is Trump too eager?
LEE: I'm sorry. Did you asked -- was that for me?
BURNETT: That was for you, yes.
LEE: Sorry. I'm having trouble hearing. You know, this -- what I'm concerned about is that he's going to take Kim Jong-un at his word. You have to go into this with a huge dose of skepticism here.
He is re-branding himself. The leader of North Korea is re-branding himself as somebody who embraces the concept of a nuclear-free world. But he is saying, I will give up my nuclear weapons if you give up yours. So if you're going to this very intelligently and very skeptically.
BURNETT: Right. And of course, that isn't going to happen. And as we've been reporting, it's been very clear, Frank, the destruction of the nuclear test site was a propaganda move.
BRUNI: Sure. Absolutely.
BURNETT: That was not any destruction of their (INAUDIBLE) and their nuclear ability which by the way they've reached all these landmarks in just the past, you know, about 10 months or so in terms of striking the continental United States.
BRUNI: There are decades of history here that should lead us to have very, very serious doubts. And remember, North Korea's identity is so tied to its nuclear arsenal that they're not going to give it up easily.
BURNETT: Right. And Kim knows, of course, you know, if he were to give that up, you know, all of a sudden, regime change is right on the table.
All right, thank you all.
And next, Trump jumps the gun with a tweet about good economic news. Really good economic news. And some people made a whole heck of a lot of money. So did the president cross a legal line?
And Michael Avenatti, Stormy Daniels' lawyer, facing serious questions about how he handled a bankruptcy claim against one of his own firms. It's an OUTFRONT exclusive.
And stingrays. Spying devices that can listen in on cell phone calls and read texts found near the White House. Could someone have hacked the president's phone?
(COMMERCIAL BREAK)
[19:18:33] BURNETT: New tonight, insider tweeting. President Trump breaking federal rules by breaking news that moved markets worldwide, making a few people a lot of money.
Trump tweeting about the new jobs numbers 69 minutes before they were released. 7:21 a.m. Eastern, the president tweets, quote, looking forward to seeing the employment numbers at 8:30 this morning. Well, you know, stock futures, bond yields, the value of the dollar, it all moves fast, immediately, after the president's tweet about the number. So some people were making a lot of money ahead of the actual release of the numbers which came as it always does at the exact same time, 69 minutes later as it has every single month for decades showing a 49- year low in the unemployment rate and 223,000 new jobs added in the United States.
Those are great numbers. But here is the problem. There is a federal rule dictating the federal employees who know the job numbers ahead of time, including the president of the United States, must keep their mouths shut about it. It says, quote, all employees of the executive branch who receive prerelease distribution of information and data are responsible for assuring that there is no release prior to the official release time.
OUTFRONT now, former chairman of the Council of Economic Advisers under President Obama, Austan Goolsbee, and former senior economic adviser to the Trump campaign, Steve Moore who is now an informal White House adviser.
Austan, let me start with you. You worked in the White House, you were part of the briefing that happened to President Obama on the jobs numbers. You know, the night before he finds out what they are.
[19:20:00] You say if you had done what Trump did today, you'd be under investigation tonight.
AUSTAN GOOLSBEE, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Yes, absolutely. It was totally inappropriate. He shouldn't have done it. I was the guy, the chairman of the Council of Economic Advisers, is the one who receives the data and writes up a report and goes and briefs the president. And this is confidential information of the highest order. When you talk to your own staff at the Council of Economic Advisers, you cannot talk about the numbers on the telephone. You have to use an encrypted line, what we call locally the bat phone, if you want to discuss those numbers with your own staff.
So I don't -- Trump should not have done this. And as soon as he did it, they should have just apologized and said he's never going to do that again because the -- he directly violated federal regulation that exists to prevent exactly what happened this morning, which is he tweeted something, he put out the information that was market moving and a bunch of people made a lot of money off of information that was not public.
BURNETT: And that's the bottom line, Steve. I mean, should he -- at the very least, let's talk about an apology, I mean, because you did have a few people make a lot of money. And a lot of people didn't.
STEVE MOORE, FORMER ECONOMIC ADVISER FOR THE TRUMP CAMPAIGN: Well, look, I agree with Austan that it was inappropriate for the -- for President Trump to send out this tweet but, you know, I was tweeting out that we were going to get a blockbuster jobs report and I hadn't even seen the numbers. I don't think there was anything too surprising about Trump saying we're going to, you know, looking forward to the numbers because --
BURNETT: Well, except for we know that he gets the numbers --
(CROSSTALK)
GOOLSBEE: Only he has seen the numbers and you had not seen the numbers.
BURNETT: And he comes out in advance saying, I can't wait for it. I mean, Steve, it's pretty clear he knows it's good.
MOORE: Well, of course but we all knew --
(CROSSTALK)
MOORE: OK, but look, we don't know what moves the market this morning and by the way, a lot of times when you have a good job --
GOOLSBEE: Literally the minute he said that, it began to move.
MOORE: OK, but look. My point is first of all, should he have done it? No. Was it an appropriate thing? Probably not.
But most people knew that we're going to get a job -- good jobs report. I mean, anybody who has been following these numbers knows that. But, look, we're burying the lead here. The important thing is we've got an economy that is now firing and also (INAUDIBLE) Austan, it's an amazing accomplishment. All of your friends who said a year and a half ago that Trump was going to destroy the economy, that he was going to cause a second Great Depression and so on were completely wrong. We've got a hotter economy now than we've had in 20 years. And that's an amazing story. BURNETT: Austan?
GOOLSBEE: It was a good jobs number this month. It was relatively weak the last two months. We're averaging about 175 a month. That's a solid report.
We've had a 107 months of positive job growth. Donald Trump has been there for 16 of those. He deserves some credit, and he should not have been violating federal rules when tweeting out this information.
The irony is, why did he do that? He was trying to call attention to good numbers if he had not said anything breaking the rules, there would have been more attention on the numbers than there is now because a lot of the attention about what he did.
BURNETT: Steve, to this point, I mean, this is what I'm curious about, right? Trump was briefed last night which could open the door now that he's going to go on Twitter more than an hour before the release comes out and talk, sort of, you know, brag about the upcoming release or promote it, shall I say.
You know, it makes me remember when he and his friend, Carl Icahn, sold off more than $30 million in steel stocks just days before Trump announced upcoming tariffs. And Carl Icahn made a whole lot of money. Of course Trump and Icahn deny that they spoke about it, that Icahn had any personal warning.
But now, its -- you know, we know this president talks to his friends at night. His big money friends and he's off on Twitter, you know, putting numbers out early. I mean, can you say for sure he's not telling people about them the night before because he's so excited and wants to brag.
MOORE: No, but I think that's the point here. Look, you know, Austan talks about it. He -- you said, Austan, you were the guy who got the numbers the night before the report came out. And if Austan had called his friend at Goldman Sachs and said, hey, you know, we're going to get a blockbuster report tomorrow, the numbers look terrible for tomorrow, you know, then there would be a gross violation. And that would be effectively insider trading.
But, look, there are 20 million people --
GOOLSBEE: (INAUDIBLE), yes.
BURNETT: But is this now a concern that we need to talk about? You look at the Icahn example and the question marks around that. A president who obviously has no respect for the rule to not put it out on Twitter?
MOORE: I don't think the president --
BURNETT: Can we -- do we now need to ask that he's telling his friends about it?
MOORE: Nobody in the administration should be -- whether it's the president or any of his deputies should be releasing information that is proprietary that is available to the public later. So I agree with that. And as I said, if he had made it -- and by the way, there's nothing in his statement -- it's not like saying, hey, we're going to get a hundred and -- you know, whatever the number was, 170,000 jobs or 220,000 jobs.
You know, that would have been inappropriate. He just said I'm looking forward to some good numbers --
[19:25:01] GOOLSBEE: No. You do not speak -- you do not have to give the exact number to be in violation of the federal rule. That's not correct. If I get up and I go, ah, (INAUDIBLE) I didn't tell you what the number was, you know.
MOORE: Well, good point. But look --
GOOLSBEE: That you cannot do that.
MOORE: Oh, that's a fair point but, look, Austan. You know, these numbers on the economy are so amazing. I want you to admit that this tax cut is working pretty well. Because not only we're getting these blockbuster report, we have a number -- we have a report that came out at the Federal Reserve Bank of Atlanta today that estimates 4.7 percent growth for the first two months of this quarter. You know, the revenue numbers for --
GOOLSBEE: Steve, you said that it was going to be true.
MOORE: I mean, it's an incredible economy that's growing much faster --
GOOLSBEE: Steve --
MOORE: -- than it ever did under Obama.
GOOLSBEE: -- on this program --
BURNETT: OK.
GOOLSBEE: -- well, Steve, on this program, you predicted that the first quarter growth rate of this year was going to be over five percent. And it was actually 2.2 percent.
MOORE: I never said that. Never once did I say that. You show me the quote.
BURNETT: All right, you know what --
GOOLSBEE: You said --
(CROSSTALK)
MOORE: Erin, (INAUDIBLE) but I never said five percent growth. But I have said three to four, and we're there.
BURNETT: I like that you got a good memory but I don't remember that exact quote.
MOORE: Thank you, Erin.
BURNETT: But that doesn't mean you didn't say it. It means I --
GOOLSBEE: It was about the other --
MOORE: By the way, Donald Trump might have said it because he always said we're going to get five percent growth but we're four (INAUDIBLE).
BURNETT: Thank you both. We're going to check that tape and have you back. Thanks both.
And next, President Trump considers commuting the sentence of the former governor of Illinois Rod Blagojevich, a man convicted on 17 counts. Does Trump have an ulterior motive. Well, Blagojevich's lawyer speaks OUTFRONT tonight.
And Michael Avenatti facing scrutiny tonight over his dealings with a convicted felon. It's an OUTFRONT exclusive.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Can you tell me what kind of investigative work you were doing for Eagan Avenatti's law firm?
UNIDENTIFIED MALE: No.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[19:30:10] BURNETT: Tonight, a CNN exclusive. Porn Star Stormy Daniels' attorney, Michael Avenatti, facing questions tonight about his past and his business dealings. Dealings involving an ex-convict who was able to drive Avenatti's multimillion-dollar law firm into bankruptcy. So who is this convicted ex-con? And why was he working for Avenatti's firm?
Sara Sidner is OUTFRONT.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: The guy doesn't even know the law. He's a thug.
(CROSSTALK)
UNIDENTIFIED MALE: Your friend is a thug.
MICHAEL AVENATTI, ATTORNEY FOR STORMY DANIELS: Thank you.
UNIDENTIFIED MALE: He's a thug.
(CROSSTALK) SARA SIDNER, CNN CORRESPONDENT (voice-over): Michael Avenatti's
brash, take-no-prisoners tactics have helped expose lies about President Trump's knowledge of the $130,000 hush money payment to porn star, Stormy Daniels.
AVENATTI: If folks want to continue to hide this stuff and cover it up, I think it's fantastic because I am going to out them.
SIDNER: And he's revealed millions of dollars in questionable financial dealings by Trump's personal attorney, Michael Cohen.
AVENATTI: If there's a number of things that are nefarious.
SIDNER: But Michael Avenatti is also facing questions about his own financial dealings involving one of his firm's work with a convicted felon.
In spring 2017, the firm, Eagan Avenatti, was battling a former partner who said he was owed millions of dollars. Jason Frank accused the firm of failing to pay millions owed to him, failing to hand over tax returns, and misstating the firm's profits. The case went into arbitration and a three-judge panel found Avenatti's firm was engaged in a pattern of delay, obfuscation and unresponsiveness, and ordered Avenatti and others in his firm to sit for a deposition and face questions about the firm's finances.
Two days before the deadline for that deposition to take place, the entire legal proceeding stopped after this man, Gerald Tobin, filed paperwork in Florida that forced Avenatti's law firm into involuntary bankruptcy, an obscure move that effectively froze the arbitration.
BOB RASMUSSEN, PROFESSOR, USC GOULD SCHOOL OF LAW: It's incredibly rare to see these cases. If you look at bankruptcies generally, well, less than 1 percent of bankruptcies are involuntaries.
SIDNER (on camera): Hi, I'm Sara Sidner with CNN. I had a couple of questions for you.
GERALD TOBIN, CREDITOR TO EAGAN AVENATTI: OK.
SIDNER: Can you tell me what kind of investigative work you were going for Eagan Avenatti's law firm?
TOBIN: No.
SIDNER (voice-over): Bankruptcy documents show Tobin claimed Avenatti's firm owed him $28,700.
ISAAC MARCUSHAMER, BANKRUPTCY ATTORNEY: Mr. Avenatti's lawyer came to court and said that they said they had millions in dollars both in liabilities and in assets. So one would question why a $28,000 issue across the country is the one that resulted in an involuntary filing at a period of time that conveniently stopped a deposition from going forward.
SIDNER: But in court, the judge questioned whether Tobin had some relationship with the firm that would have induced a collusive filing or whether Avenatti's firm just got lucky.
Avenatti told CNN he was surprised as anybody about Tobin's filing.
TOBIN: Why would I talk to you guys about anything?
SIDNER (on camera): Why wouldn't you?
TOBIN: Why would I? Give me a reason why I would.
SIDNER: Why not tell us how it is that you were able to file for involuntary bankruptcy to put Eagan Avenatti into involuntary bankruptcy? Do they owe you money?
TOBIN: (INAUDIBLE)
SIDNER (voice-over): In addition, the firm's lawyers call Tobin a private investigator who did investigation on one of the law firm's cases. The state of Florida requires private investigators to be licensed. We checked. And Tobin does not have a license.
What he does have is an extensive criminal history. More than two dozen arrests spanning over 20 years, ending in multiple felony and misdemeanor convictions. His latest arrest, earlier this year, for domestic violence for which he plead not guilty.
(on camera): When the camera was turned off, Mr. Tobin did admit to having a lengthy criminal history. He said he can't even vote because of the multiple felonies that he's been convicted of. And he certainly is not a private investigator, he said.
And as far as him being able to bankrupt a high-flying firm like Eagan Avenatti, he said, no way, I'm just a nobody. And then he added he couldn't talk much about it because he signed an NDA.
(voice-over): Avenatti told CNN he knew nothing about Tobin's criminal record, and despite what was stated in court, he was not hired as a private investigator. Avenatti provided CNN with a declaration signed by Tobin months after he filed that involuntary bankruptcy stating Tobin was asked to, "assist the firm in gathering evidence and facts for a potential lawsuit in the wake of the 2016 Pulse Nightclub shooting in Orlando."
Avenatti refused to answer questions for this story on camera. But in a statement, told CNN, "Eagan Avenatti previously retained Mr. Tobin to do very limited work as an independent contractor for a short period of time. He was retained in connection with a case the firm was considering but passed on. A billing dispute arose that has now been fully resolved. The firm did nothing wrong and no court has ever found that the firm did anything wrong. This is a complete sideshow and has nothing to do with my present work or cases. Who cares?"
[19:35:28] (on camera): Eventually, Avenatti wanted out of bankruptcy and signed a settlement late last year for his firm to pay millions in back taxes to the IRS and millions to his former partner. But a few weeks ago, Avenatti and his firm failed to make the first payment required by the deal. A federal judge then hit the Eagan Avenatti law firm with a $10 million judgment.
As for Tobin, he told CNN his debt has been paid -- Erin?
(END VIDEOTAPE)
BURNETT: Sarah, thank you very much.
Investigative attorney, Harry Sandick, is with me, former assistant U.S. attorney for the southern district.
You have an ex-con that they admitted they hired, Avenatti's firm. Pushes his firm into bankruptcy two days before a deposition was supposed to happen.
HARRY SANDICK, INVESTIGATIVE ATTORNEY & FORMER ASSISTANT U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: Yes.
BURNETT: What does all this mean?
SANDICK: What it seems to me or what the concern is here why people have raised an eyebrow is that by filing this petition, the deposition, which it appears that Mr. Avenatti may not have wanted to go forward, the deposition could have been stayed, because when there's an involuntary bankruptcy petition, it stays, things like depositions.
BURNETT: Sounds like he doesn't want to be deposed and he's relying on an NDA. It sounds like a guy that he's pretty critical of, obviously, the president of the United States.
All right. So now you have this whole other situation going on. A bankruptcy judge now says the whole thing has a stench of impropriety. That's what the bankruptcy judge said when talking about Avenatti's situation. What does this do to his credibility, a guy who blankets the air waves?
SANDICK: I think it's not good for this his credibility. When a lawyer decides to try a case with such a heavy media strategy, they, by necessity, put their own conduct as a lawyer under the microscope. And that seems to be what's happened here. Whether this was just a coincidence that the petition was filed right before this deposition that he didn't want to happen or not, he -- it looks suspicious to people and it will hurt his credibility.
BURNETT: Thank you very much, Harry Sandick.
And next, Trump reportedly considering as many as a dozen more pardons tonight. Is he sending a message?
And Homeland Security says it found devices near the White House that can spy on cell phones, both calls and texts. Could the president's phone be the target?
(COMMERCIAL BREAK)
[19:41:19] BURNETT: New tonight, no end in sight for the pardon parade. A senior White House official telling the "Washington Post" that as many as a dozen other pardons are being considered by President Trump and that most of them are likely to go ahead. This comes as the president is considering commuting the 14-year sentence of Rod Blagojevich, the former Democratic governor of Illinois convicted on corruption charges.
OUTFRONT now, Blagojevich's attorney, Leonard Goodman.
Thank you for your time, Leonard.
Your client is now back in the news in a very big way. Let me start off by getting the facts from you. Has Rod Blagojevich or anyone acting on his behalf, whether you, Leonard, or his wife, been in touch with the president or the White House about commuting his sentence?
LEONARD GOODMAN, ATTORNEY FOR ROD BLAGOJEVICH: No. He has not. He's filed formal requests for a commutation of sentence. He filed it under Obama. Obama took no action. So the president is certainly aware of that. We've been in touch with the pardon office. But, no, there's been no communications with Donald Trump.
BURNETT: So nothing --
(CROSSTALK)
GOODMAN: Now Donald Trump knows Rod Blagojevich. Yes.
BURNETT: Of course, he does, actually. And I remember being on that season of the "Celebrity Apprentice" when the then-governor was there.
Do you know why the president is raising this now? Certainly he knows Rod Blagojevich. But you're saying you haven't reached out to the White House. His wife hasn't. He hasn't. Why is Trump raising this now? Do you have any idea?
GOODMAN: I think -- well, I do. I think there's some very troubling aspects to the Blagojevich case that would trouble Donald Trump. And maybe some things that would hit home for him. Rod Blagojevich was charged in 2009. The FBI admitted at his trial that he was targeted for prosecution back in 2003, early on in his first term as governor. They used -- made deals with some shady characters in order to get wiretaps. They got wiretaps on eight phones, listened to all of his conversations for 40 days, including his private calls with his wife, all of his aides.
BURNETT: Yes.
GOODMAN: Selective excerpts were leaked in order to make him appear corrupt. So there's a lot of very troubling aspects.
And the one other thing about Rod Blagojevich, he was very much a populist governor. He was not in bed with special interests. His main accomplishments and efforts as governor were for the people of Illinois. I mean, he -- he --
(CROSSTALK) BURNETT: Leonard, hold on one second because --
(CROSSTALK)
GOODMAN: He advocated for -- yes.
BURNETT: You say he was made to appear corrupt. In the "Wall Street Journal," he wrote an op-ed four days ago. Right? You know about this. Many of our viewers do. But he said he's done nothing wrong. He writes, "Here I am in my sixth year of a 14-year prison sentence for the routine practice of attempting to raise campaign funds while governor."
That's what he's saying now --
(CROSSTALK)
GOODMAN: It's true, Erin.
BURNETT: But here's what he said at his sentencing, Leonard.
GOODMAN: It is true.
BURNETT: He said, "I have nobody to blame but myself for my stupidity and actions and words and what I thought I could do."
So he took responsibility.
GOODMAN: He said a lot of stupid things.
BURNETT: He said he was guilty.
GOODMAN: But -- no, he didn't say he was guilty. He said a lot of stupid things in his private conversations with his wife. His conversations were recorded during a 40-day period in a high-pressure time when he was under a lot of pressure to raise campaign funds. You know, you can regret certain things that you said or certain things you do. He certainly would have done things differently.
BURNETT: Yes.
GOODMAN: Did he commit a crime? No. Because, you know, the Supreme Court said in 1991 that when you raise funds you just can't make a specific promise to anyone.
(CROSSTALK)
BURNETT: So then let's get to that.
GOODMAN: He never promised anyone --
BURNETT: Let's get to that because --
GOODMAN: Yes.
BURNETT: -- when you look at this and how this was seen, his vote for impeachment, right, was unanimous. So Democrats and Republican in the state agree, 59-0 impeachment. His second trial, jury was unanimous in saying he was guilty of 17 different charges. Now five of those charges have been overturned, as I'm sure you're about to point out. But this was unanimous by the grand jury and by the Illinois House.
[19:45:20] GOODMAN: Yes.
BURNETT: I mean, a major piece of evidence was this.
(CROSSTALK)
BURNETT: You say maybe they shouldn't have been taping him, but here's what he said about selling off President Obama's open Senate seat.
(BEGIN AUDIO FEED)
ROD BLAGOJEVICH, (D), FORMER ILLINOIS GOVERNOR CONVICTED ON CORRUPTION CHARGES: I mean, I've got this thing, and (EXPLETIVE DELETED) it's golden. And I'm just not giving it up for (EXPLETIVE DELETED) nothing. I'm not going to do it.
(END AUDIO FEED)
GOODMAN: And, you know --
(CROSSTALK)
BURNETT: So why is President Trump now going to say, forget all that?
GOODMAN: But here's the thing. Here's the thing, Erin. If the jury had heard the rest of the calls -- you know, and that's one of the things. They steered this case in front of a very prosecution- friendly judge. They played only the excerpts that made him sound one way. Now, if you heard the rest of the story, it's true. He wanted a political benefit for his constituents, for that Senate seat.
And if he had just given it away, as President Obama was asking him, if President Obama wanted to appoint Valerie Jarrett, he was willing to do it, he wanted something in return for the people of Illinois. He wanted something to be pushing national health care. So, yes, he wanted a political benefit. And as the appellate court said, those types of political deals have been done throughout history. He's the only person in the history of the United States who's ever been prosecuted for attempting an exchange of political appointments.
This was a political hit job. It was an overreach by the government. They had to change the law. The Supreme Court said what the law was in 1991, they changed it in order to try to get a conviction. That still didn't work in the first trial. They got a hung jury. They then rewrote the jury instructions with the judge's approval in order to tell the jury that any deals, even the deal that was later found to be completely --
BURNETT: OK. GOODMAN: -- legal is corrupt. So, yes, this man got an unfair treatment. And a commutation by the president would be an act of mercy. It would be correcting an injustice. There may be political --
(CROSSTALK)
BURNETT: As I said, the impeach was 59-0. Second trial jury was unanimous he was guilty.
But the bottom line, Leonard, do you expect a commutation from President Trump, and do you expect it imminently?
GOODMAN: I don't expect anything. We're very hopeful. It's hard to get your hopes up. The man has been away for six years. He has two beautiful daughters. President Trump has met the family. I think, you know, we're hopeful. Obviously, it's going to be up to President Trump. I hope he does -- I hope he has the courage that President Obama did not have to do the right thing and to correct this injustice.
BURNETT: Leonard, thank you very much. I appreciate your time.
GOODMAN: Thank you, Erin, for having me on. I appreciate it.
BURNETT: Next, devices that can listen in on cell phone conversations in Washington by the White House. Was the president the target? What do we know about this? Breaking news.
And after nearly a month since the volcano started to erupt, we show you what's happened.
(COMMERCIAL BREAK)
[19:51:54] BURNETT: New tonight, growing concerns someone could be listening to President Trump's phone calls. The Department of Homeland Security says they have found sophisticated cell phone surveillance devices near the White House. The technology capable of intercepting phone calls and text messages often used by foreign countries, including Russia, but not exclusive to them.
Jessica Schneider is OUTFRONT outside the White House.
Jessica, we're talking here about this being found near the White House. How worried are they that the president himself was the target?
JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: What's interesting here Erin, is that these authorities, they are not revealing much about the types of devices found out here. They're only saying that when they did find these devices all over Washington, D.C., including here at the White House, some of them were in fact legitimate. But the question still lingers here, were any foreign entities operating these devices right near the White House?
And as a result, were any of the president's phones compromised? That is because in 2017, the first year of Trump's presidency, Homeland Security discovered that a number of devices were operating with this IMFI technology. It's more commonly known as sting ray technology. This technology, when connected to devices, it operates as this fake cell phone tower. Mobile devices that connect to it, and the people operating these devices can snoop in on cell phone traffic. They can intercept phone calls and access text messages if they aren't correctly encrypted.
They can also even plant malware here. And we have reported that the president is increasingly relying on some personal cell phones to tweet, to interact with some personal confidants. And while the White House has said his cell phone is secure, it is still raising some alarm bells. In fact, when this report was released last month, the Democratic Senator from Oregon, Ron Wyden, immediately called for an investigation by telephone companies, as well as the Federal Communications Commission. So there is concern here, Erin. Law enforcement not revealing too much, but there is concern with these devises found around the White House, was the president's cell phone perhaps compromised.
[19:54:03] BURNETT: That's a crucial question.
Thank you very much, Jessica.
And the fact that they don't know about these automatically, right? That somebody could have this set up right near the White House, in and of itself, I think surprising for many to hear.
And next, Hawaii's Kilauea Volcano, once a big tourist draw, is now devastating the big island's biggest industry.
(COMMERCIAL BREAK)
BURNETT: Tonight, the volcano's serious effect on Hawaii's tourism.
Miguel Marquez is OUTFRONT.
(BEGIN VIDEOTAPE)
MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): Lava, typically a draw to Hawaii's big island, now fountaining 200 feet in backyards.
AMEDEO MARKOFF, HAWAIIAN BUSINESS OWNER: This is insane.
MARQUEZ: Devastating homes, the land, and the economy of those living close enough to hear it roar.
MARKOFF: We are used to lava. But we're not used to it coming out in our subdivision.
MARQUEZ: Amedeo Markoff runs two businesses in Pahoa.
MARKOFF: Aren't those cool?
MARQUEZ: He also heads up the tourism board.
(on camera): And how much is tourism down?
MARKOFF: I'd say 80 percent to 90 percent.
MARQUEZ: Eighty to ninety?
MARKOFF: Yes.
MARQUEZ: Over the last few weeks?
MARKOFF: Three weeks, yes, since the event began.
MARQUEZ (voice-over): Pahoa sits just outside the exclusion zone, Leilani Estates and Leilani Gardens, where the lava, so far, shows no signs of slowing down.
HARRY KIM, MAYOR, COUNTY OF LEILANI: For the people here, meaning Southeast Kilauea Puna, it is very bad.
(SINGING)
MARQUEZ: Sitting below the eruption's orange glow, Kaleo's, a popular restaurant, typically packed.
(MUSIC)
MARQUEZ: Not these days.
UNIDENTIFIED RESTAURANT EMPLOYEE: We had to cut our staff, reduce hours. We even have to shut down every two days.
MARKOFF: We ship anywhere.
MARQUEZ: For people here, it is like being hit twice. The lava destroying their homes, tourists staying away, and damaging their livelihood.
The impact to their entire island unclear. Arrivals by plane to the big island are up 25 percent but future hotel bookings are down. It's national park, the Hawaii Volcano Observatory, has been closed for weeks. And a Norwegian cruise line has decided to forego weekly stops in Hilo at least for now. All of it costing millions.
KIM: I think a lot of people are not truly aware of the island. So far it's covered maybe 2,000 to 3,000 acres. This island is 4,000 square miles.
MARQUEZ: It really is a big island.
(SINGING)
MARQUEZ: Where life goes on even in the shadow of Kilauea as the community hopes the volcano goddess, Pele, takes a breather soon.
(SINGING)
MARQUEZ: Miguel Marquez, CNN, Pahoa, Hawaii. (END VIDEOTAPE)
[20:00:10] BURNETT: And thank you for joining us.
Anderson is next.
