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Paul Manafort in Court Today Fighting to Stay Out of Jail; Michael Cohen Willing to Cooperate with Feds; Markets React to Trump's China Tariffs; Judge Jails Paul Manafort. Aired 11:30-12p ET

Aired June 15, 2018 - 11:30   ET


[11:30:00] SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: They say this is significant. The prosecutor is saying, they're arguing in court that he sustained a campaign of over five weeks using different phones and apps, remember, some allegations that he was using encrypted apps to mold testimony of witnesses, he was reaching out to witnesses to try and ask them for favorable testimony. This is significant in that prosecutors are now arguing that Paul Manafort should go back to jail because of this. The judge has taken a break, and we expect to have a decision perhaps maybe within the next hour -- Kate?

BROOKE BALDWIN, CNN ANCHOR: All right. Shimon, we'll come back to you with all of that. It seems like there's a lot more to come.

Let's get to Kara right now.

Kara, when it comes to Michael Cohen, what are you learning?

KARA SCANNELL, CNN REPORTER: Right, Kate, we're learning today that Michael Cohen is saying he's willing to cooperate with federal prosecutors who are investigating him, according to a source familiar with the matter. And part of this is to try to alleviate some of the pressure on him and his family.

We also have learned that one issue here is that Cohen has become angry, this person, the source tells us about the treatment he's received from the president and Rudy Giuliani, the president's new lawyer, and some of the comments and statements that they have made. And this has all made Cohen feel isolated and more willing to cooperate.

BOLDUAN: Fascinating and maybe a big message from Michael Cohen and those around him.

Kara, thank you very much.

Shimon, thank you as well.

Here with me to discuss this, legal analyst, former federal prosecutor, Shan Wu.

Shan, let's start with Michael Cohen. Why do you think this is leaking out, willingness, openness, isolated, is this part of a strategy? SHAN WU, CNN LEGAL ANALYST: I definitely think it is part of his

strategy. This has been generally an extraordinary case where so many of the witnesses are communicating via the media, trying to get the president's attention. Absolutely I think it is part of the strategy.

BOLDUAN: And Paul Manafort in court, just some of the quotes handed to me from Evan Perez, in the courtroom, that the judge is saying that -- the judge is calling -- sorry prosecutors arguing he's a danger to the community and he committed a crime while out on release. The defense attorney saying this will not happen again. Is that a good enough defense to keep him out of prison?

WU: It might have been before they indicted him. I think the indictment presents a very serious problem for Manafort. And I'm relying on public information. Nothing to do with my prior representations. This is part of a pattern of enormous pressure that the special counsel is exerting on Manafort and the fact that they have now gone and indicted him makes this a very tough road for him to go uphill against that trend. He's indicted for the crime that is going to be a problem for this judge, I think.

BOLDUAN: If he -- if bail is revoked, he's sent back, sent to jail, does that give some indication coming from the judge of what direction this is all headed from Manafort?

WU: Not necessarily. The judge is strictly ruling on the question of his release conditions and it is important to keep in mind that this is one of the longest running bail proceedings in history, I think, for a white-collar crime. They still haven't resolved it. They dangled it like a carrot in front of him, now they're yanking it away. He's not really free to move about at the moment.

That -- those conditions were never fully set. And now it's potentially going to get even worse because even if she doesn't revoke him, put him in jail, a big disadvantage for the preparation of his defense, she's certainly likely to put more restrictive conditions on him than he already has.

BOLDUAN: A fascinating element to it, even if he stays out, it could be a problem.

Good to see you, Shan.

WU: Go to see you.

BOLDUAN: Stand by. Let's see what happens when the court gets back in there. Great to see you. Thanks so much.

Coming up, Wall Street taking a hit as the Trump administration unleashes new tariffs on China, and as China, of course, then vows to retaliate and do so immediately. That's next.


[11:38:13] BOLDUAN: The markets taking a hit now after a big announcement from President Trump. He made good on his threat to impose a 25 percent tariff on $50 billion of Chinese exports. China now says it is a trade war. President Trump says this.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The trade war was started many years ago by them, and the United States lost.


UNIDENTIFIED REPORTER: You're saying we're on the losing end?

TRUMP: No. There's no trade war. They have taken so much. Last year, $375 billion in trade deficit. We had a -- with China. We had overall $800 billion over a period of years, each year close to $800 billion in losses on trade. Not going to happen anymore. It's not going to happen.


BOLDUAN: CNN's Paula Newton is joining me now from the New York Stock Exchange.

Paula, now the question is, what is China going to do about this.

PAULA NEWTON, CNN CORRESPONDENT: If you're a farmer in Iowa, you pretty much know what is going to happen because the rumors are that, it will hit the agriculture sector. Most specifically, there are other things on the list, though, things like manufacturing goods. The problem is, Kate, the farmers are starting to see the relationship with their largest export market change, and that's a problem. It is going to be interesting to see how this shakes out economically and politically. The president's statement this morning, Kate, he said, look, if China retaliates, it said it will, we'll come back at this. That means game on, it is a trade war.

Now it is true that the president does see this as a negotiating tactic and believes that this will give the United States the upper hand. And really rectifying what he sees as decades of missteps on trading relationships. That does not help if you're a corn farmer, pork producer, soybean farmer and also manufacturing. One of the reasons we're seeing the market down today is things like Boeing down 2 percent. Caterpillar at one point almost down 3 percent. Look at the big board now, we're below that psychological 25,000 points. This is -- these are the lowest we have seen since the market opened a few hours ago.

Kate, it is still a bit of a calm reaction here. It's the escalation that everybody is worried about.

[11:40:17] BOLDUAN: We'll see what happens next.

Paula, thank you so much.

Coming up, blame the Democrats. That's what President Trump is saying about a Trump administration policy separating children from their parents as -- who crossed the border illegally. We're going to separate fact from fiction on this. That's next. (COMMERCIAL BREAK)

[11:45:01] ANNOUNCER: This is CNN breaking news.

BOLDUAN: We do have breaking news with regard to Paul Manafort, heading into court today. Prosecutors wanted to send him to jail, he wanted to stay out.

Shimon Prokupecz has the breaking news.

Not good for Paul Manafort, Shimon.

PROKUPECZ: Absolutely not, Kate. Word from the court that the judge has revoked Paul Manafort's bail. She is sending him to jail, to await his trial, which is supposed to start -- expected to start in about a month and a half or so. Absolutely not good news, and nothing that certainly Paul Manafort wanted in this case. But it is now, you know, a matter of whether -- when this goes to trial. But he is expected now to spend some time in jail as we await trial.

Prosecutors had argued in court just within the last hour that Manafort sort of went on this sustained campaign for over five weeks while he's been out on house arrest, using different phones, and apps, some of them encrypted, to try and communicate with witnesses to sort of get them to mold testimony to his favor. Obviously, the judge clearly -- word from my colleague, Evan Perez, in that courtroom that the judge was extremely unhappy about this. That he would go ahead and do this and try to contact witnesses. Obviously, prosecutors filed new charges against Paul Manafort for obstruction, for trying to tamper with those witnesses, and the judge here today listening to the prosecutors' arguments and sending Paul Manafort back to jail.

BOLDUAN: Shimon, stick with me.

I think Evan Perez is just coming outside the courtroom, joining me now.

Great to see you, Evan.

You were inside. Tell me what you heard.

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: That's right, Kate. The judge said she was really struggling with this. She -- after the defense and the prosecutors made their arguments to her, she retired for about 15 minutes to consider the two sides. And she came out and said she was struggling with what to do about this. She felt that, in the end, the only solution was to send Paul Manafort to jail pending trial. So that is what she has decided to do.

She said, "I am very troubled by the fact that she -- he made contact with these witnesses." She said that there were repeated instances in which Paul Manafort seemed to be defying what the court was ordering him to do, which is to make sure that he obeyed the rules before he got to trial. She also said that, in her view, this was no way that she could craft a -- an order clear enough that would cover all of the different circumstances that Paul Manafort would be able to abide by, because she felt that he was repeatedly flouting the rules that were put forward by the court.

Now, as Shimon was pointing out, the government made a very strong argument here. They said that he is a danger to the community. They said this is a sustained campaign, over five weeks, to contact witnesses in Italy, in Russia. And the government also said, prosecutors said that it was a witness, one of these witnesses that actually came forward to prosecutors and the government and the FBI, to make the -- to tell them about the conduct that Paul Manafort was doing.

Defense lawyers were arguing that, look, you don't need to send him to jail, this will never happen again, is what the defense attorney argued. And they said that the solution really here was for the judge to tell them, the 50 or so witnesses that the government planned to bring forward in trial, the judge rejected that argument saying that Manafort had multiple chances at this. He has repeatedly flouted the rules of the court. And he was clearly trying to harm the system of justice, the trial here that is due to start in Washington in September -- Kate?

BOLDUAN: It seems the defense all but admitted this was what Paul Manafort was attempting to do in -- over the five weeks. What does this mean for -- how long does this mean, what is the timing now? How long does this mean you could be in jail before this gets worked out?

PEREZ: Well, at least -- right, exactly, means at least until September when right now he is scheduled to go in court -- go on trial here in Washington. Keep in mind, there's another dozen or so charges that he faces across the -- across the river in northern Virginia, the court there in Alexandria, Virginia. He is due to go on trial there in July.

Kate, keep in mind, there's a judge over there who had already issued an order to Manafort to tell him not to contact certain witnesses. The defense kept claiming that, look, the witnesses that he was talking to in this -- in this instance weren't really related to those charges in Virginia. And the judge really did not buy that argument.

BOLDUAN: Evan, can you lay out the huge risk that Paul Manafort was taking? It wasn't like he was out scot free on arrest. He was in his house wearing an ankle bracelet and --

[11:50:02] PEREZ: Right.

BOLDUAN: -- then apparently doing this.

PEREZ: Right, exactly. He was already wearing one ankle bracelet on each leg. He was restricted to his condo in Alexandria, Virginia. He had to get permission in order to go to a family funeral in Long Island, New York just a few weeks ago. Over the holidays, if he wanted to go to Florida, he had to get the judge's permission in order to do that. He was already on very tight restrictions on $10 million bond. This has already been one of the longest bail proceedings that I have certainly seen in a case like this. And $10 million.

And the defense really was struggling, Manafort was struggling to try to put together a package that would satisfy this judge and satisfy the government that, really, he was allows to ed to be out on this $10 million bond. This has been eight months in the works. And during that time, it appears that even while he was under these restrictions, he continued to reach out to people who were part of this case. And according to the government, these were people that he had to know were going to be witnesses in his trial -- Kate?

# Are we going to hear from -- we never do traditionally coming out of when Paul Manafort leaves. Is he still in court? Do you think there's any chance we could hear from his attorney?

PEREZ: He's still in court. His attorneys were huddling when we left there. One of the problems here is that the judge has already put severe restrictions on Manafort's defense team. They are not allowed to make many statements. I think the only thing they're allowed to say is he's innocent, which, obviously, when you're still pending trial, you're allowed to say you're innocent until proven guilty. So there's not a lot the defense is going to be able to say that would not incur the wrath of this judge. This judge was very, very troubled by the behavior here.

She clearly struggled with what to do. Because she knows, obviously, our system of justice is inclined to let people be out on bail while they're awaiting trial, right? You don't punish people before they've been adjudicated, before they've been found guilty. So for her to take this step was pretty extraordinary. I certainly didn't expect her to go all this way. But then you can see, as she explained all the different restrictions he was already under, she felt there was nothing else she could do.

BOLDUAN: Was there any indication the prosecutors laid out of what the witness who came forward to them said? Is there any indication of kind of what the tampering was, if you will?

PEREZ: Right. The government actually recalled some of the conversations. They said there were multiple times when Paul Manafort was reaching out to this particular witness. The witness tried to put the call on speakerphone and then, eventually, hung up because he did not want to have that contact with Paul Manafort.

According to the government, he knew what Paul Manafort was trying to do. Manafort was simply, according to the defense, telling them exactly what he said publicly, which is that this group of lobbyists that were working for the Ukrainian government, the pro-Russian government in Ukraine at the time, that they were simply doing their work in Europe, that they were not working here in the United States, which would be a legal violation.

That would be illegal. The government, of course, the prosecutors have alleged that all of the work that was being done was being done over there, and it was also being done in the United States, and that is a violation of the law. That's one of the charges he's facing. So Manafort was simply trying to remind people of what the truth was, according to the defense.

The prosecutors didn't buy that. They said, quote, "Generally, if something is true, you don't have to remind someone of what the truth is." So clearly the government had a lot of details about the conversations that were happening. And they said they weren't actually monitoring, like actively monitoring Manafort until this witness came forward to say that he felt that what Paul Manafort was trying to do was encourage perjury and encourage people to change their stories in whatever they were telling the government and whatever testimony they were providing to prosecutors.

BOLDUAN: So many eyeballs on this case. It is amazing that this was all playing out. Just amazing.

Evan, stay with me.

Let me go back to Shimon Prokupecz really quick.

Shimon, you're learning some more.

PROKUPECZ: Yes. We have some color from one of our producers who remained in the courtroom as Evan ran out to report the news. Our producer reports that Manafort was removed immediately. He was taken to the back, was led out by three martials. The martials then returned to the courtroom and they handed Manafort's wife his wallet, his belt, some other property that belonged to him. But we will not see Manafort walk into court, leave court anymore going forward. The judge here revoking his bail. So that means he goes to jail immediately.

We'll learn what jail that is, where he's going to sit out. It will be a federal prison, holding prison where he'll await his trial. As Evan there said, this trial in D.C., which is expected to start in September. Then you have the trial in Virginia, which starts in July. But this is it. We may not see Paul Manafort outside again.

[11:55:25] Really, Kate, what happened here, this is something the government, the FBI, judges all across the country here take extremely seriously. Any time there's any allegation of anyone trying to intimidate witnesses or trying to reach out to witnesses, it is a very serious allegation. Certainly carries a hefty penalty. And it is something that the FBI and the government just does not play around with. And certainly, judges across this country take this very seriously. And you can see that by what the judge did here today. She was not pleased at all by any of these allegations.

BOLDUAN: No kidding.

Shimon, stick with me.

Shan Wu, back with me as well.

Shan, your reaction?

WU: It's very devastating for Paul Manafort and his legal team. I can tell the judge struggled with her decision. It's rare for a white-collar person to be held in jail pending the trial, and it's going to make it much, much difficult for his team to prepare. As Shimon was saying, he will be held in a local facility, so just the logistics of his legal team meeting with him becomes much more difficult. He has two trials to prepare for.

One in Virginia coming up on the rocket docket coming up very fast. They'll have to work it out with martials. At least for a few days, he'll be in the local D.C. jail until they figure out where they can put him. Just logistically, by itself, that's a nightmare for his team. That will drastically ratchet up the pressure on Manafort.

BOLDUAN: Shan, but why this is such a devastating blow to building his defense?

WU: First, it adds another charge, which is a problem for him. And, of course, the prosecution is going to use it as a consciousness of guilt. They're going to say, why would he be trying to do these things unless he was trying to hide something? So while it also adds an additional charge you have to defend against, it's a very insidious kind of charge because it demonstrates that maybe you're trying to hide something, and that's what you've been charged with, and that makes it harder to defend on the underlying charges.

BOLDUAN: All right.

All, thank you so very much.

Shan, thank you.

Shimon, thank you so much.

Evan Perez, coming out from court, thank you so much.

Just to recap the breaking news, former Trump campaign chairman, Paul Manafort, in court today, now in prison until he faces trial, pending trial. Why? Because prosecutors say he was trying to tamper with witnesses. And the defense said, it won't happen again. The judge having none of it. Paul Manafort now in jail.

We'll have much more on the breaking news after this.