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Report: Cohen Officially Turns on Trump with His Tape Release; Secret Tape Suggested Trump Knew About Silencing Ex Playboy Model; Farmers You React to Getting Bailout Money or Trump's Tariff Damage; Forensics Analyst Dissects Cohen's Tape of Trump. Aired 2- 2:30p ET

Aired July 25, 2018 - 14:00   ET

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


[14:00:00] BROOKE BALDWIN, CNN HOST: Hi, everyone. I'm Brooke Baldwin. It's Wednesday. You're watching CNN.

The man who knows Donald Trump's secrets is at war with him. Michael Cohen who proudly called himself Trump's fixer is now the one to make the first move to show how broken, how shattered their relationship has truly become. Cohen's attorney has released audio exclusively to CNN of this conversation between Cohen and then candidate Donald Trump. This reporting is about how they would buy the rights to Karen McDougal's story. She's the former Playboy model to allege she had the affair with Donald Trump. We'll play the audio for you. This happening two months before the presidential election.

(BEGIN VIDEO CLIP)

MICHAEL COHEN, TRUMP'S PERSONAL ATTORNEY: I need to open up a company for the transfer of all that info regarding our friend David so that -- I'm going to do that right away. I have spoken to Allen Weiselberg about how to set the whole thing up with funding -- yes. All the stuff -- because here you never know where that company, you never know what he's going to be.

DONALD TRUMP, PRESIDENTIAL CANDIDATE: Gets hit by a truck.

COHEN: Correct. So, I'm all over that. And I spoke to Allen about it. When it comes time for the financing, which will be --

TRUMP: What financing?

COHEN: Well, I have to pay --

TRUMP: Pay in cash.

COHEN: No, no, no, no, no, no. I got no, no, no.

(END VIDEO CLIP)

BALDWIN: The tape. There you go. Today, the president seemed to confirm he was not aware Cohen, his personal attorney at the time, was recording him. This is what the president tweeted" "What kind of lawyer would tape a client? So sad. Is this a first? Never heard of it before. Why was a the tape so abruptly terminated, cut, while I was presumably saying positive things? I hear there are many other clients and many reporters that are taped. Can this be so? Too bad!"

The president's current personal lawyer, Rudy Giuliani, said Trump never made a payment adding, quote, "there's no indication of any crime being committed on this tape." But it does suggest that then candidate Trump knew of a hush money payout. That contradicts what his spokeswoman said at the time. Let me take you back, Hope Hicks at the time told "The Wall Street Journal," and I quote, "we have no knowledge of any of this."

Have Donald Trump and his team been caught in a lie? Look what I have with me today, the CNN senior political analyst, John Avalon, CNN national reporter, MJ Lee, and criminal defense attorney Rachel Kugel. And Elie Honig, he is a former federal prosecutor for the southern district of New York, which is the district investigating Michael Cohen. Hello. Let's start with the two of you on end here, what do we know about the tape that confirms? MJ and then John.

MJ LEE, CNN NATIONAL REPORTER: What we know now is that Donald Trump knew about this payment which is completely contradictory to the campaign statement at the time which is they didn't know anything about the AMI payment to Karen McDougal who said she had an affair with Donald Trump. Obviously, there are questions being raised about whether Donald Trump was saying pay with cash or don't pay with cash. But this is for the time being. Given that this took place so close to the election, there are going to be so many more questions about the motivation and why Donald Trump is having this discussion with his lawyer to try to quiet someone who had a potentially unflattering story about him.

JOHN AVALON, CNN SENIOR POLITICAL ANALYST: Yes, I mean, there's the timing this is hush money, being discussed to cover-up an affair before the election. If it had come out, it could be an affect on the election. We know about the Stormy Daniels pattern. It's the president on tape. You can't rig your way out of that one, although they are going to try. Possibly talk about a cash payment. That's its own problem. That was one of the issues that helped to bring down Nixon when the cash payment was floated on the tape. But I don't think we should normalize this in the context that Donald Trump lies. His campaign lied, the administration lied, he's caught on tape and lied. They ended up giving her the sum, $150,000, to catch and kill.

BALDWIN: To catch and kill. Yes. Eli and Rachel, the ranking Democrat on the House subcommittee, Adam Schiff said, three things notable about the Cohen tape that you said, clearly, Rudy Giuliani was untruthful when he said Trump didn't know. Two, goal was to kill story before election so campaign motivated. Three, regardless of cash or check, whole point of phony corporation was to hide campaign funding. Did this violate any campaign finance laws?

[14:05:00] ELIE HONIG, FORMER FEDERAL PROSECUTOR, SOUTHERN DISTRICT OF NEW YORK: I think it may, right? This tape is from a prosecutorial perspective it's a good tape. It's not a great tape. I have tapes where you say I'm just going to hit play and sit down and the jury is going to convict. BALDWIN: Yes, a b-minus,

HONIG: B-minus tape, yes. But it is helpful and could be the basis for the campaign finance charge. What is important about the tape is you see the pattern and the relationship, right? It's not just the payment to McDougal. We also know about the payment to Stormy Daniels. We know about them trying to delay the release of the divorce papers all until after the election. And that shows the motive, right? The motive is, let's kill the stories, let's pay for them importantly, and put it off until after the election. If it is an election-related purpose, then you have a campaign finance violation.

BALDWIN: So, to also then, Giuliani's point, exculpatory meaning this clears my client, this clears my client Donald from play of any wrongdoing, any guilt. What?!!

HONIG: I don't follow that at all.

RACHEL KUGEL, CRIMINAL DEFENSE ATTORNEY: I have to tell you, I don't hear any crime being committed. I don't even actually hear it being a close call that a crime was committed. There was no payment. We should never have heard this tape. I mean, that's an important point here. This is a conversation of hypothetical possibilities between a lawyer and a client. And if we're living in the world where you cannot have that with your --

BALDWIN: This happened in the campaign two months before this man wanted to be elected president of the United States, and you're still saying nothing?

KUGEL: There's absolutely no crime on the tape whatsoever. I think our panel has to agree, there's nothing on this tape.

HONIG: No, I'm not sure we do agree. A couple points, first of all, you say we know there was no payment. How do you know there was no payment given that she was paid $150,000 by American Media to catch and kill her story?

KUGEL: We know that the payment being discussed between the two of them presumably never happened. That's the information we currently have as of today. That could change.

HONIG: So, you don't know that --

KUGEL: I don't have any -- supposedly there's no payment that happened.

AVALON: No, not at all. First of all, if no payment changed hands, you still have the conspiracy. A conspiracy is a meeting of the minds. You had that meeting of the minds on tape in a way that can't be run away from. So, you know, you have that payment. Or you have that conspiracy right there. And also -- the question I would ask everyone is focusing on, who says cash, who says check? Why the shell corporation? Why do it that way and why not cut a check from the Trump campaign? Why not from Donald Trump himself? LEE: When you said the tape shouldn't have been heard in the first

place, I think it is worth reminding everyone that it was the Trump's legal team that decided to waive privilege on that recording. This was one of the 12 recordings that were received that were previously marked privileged and no longer are not because the party decided. And keep in mind, it was Michael Cohen's lawyer, Lanny Davis who then decided to release the audio to the press.

KUGEL: So, I think there is a strategy call as to we were discussing this before, I think there is a strategy call as to whether to waive privilege related to this tape in order to maybe preserve the argument for the future. But even so, Michael Cohen was taping his client.

BALDWIN: Right. Which was a whole -- Elie, and I were talking about this on Friday. We'll come back to your whole mob parallel in a second, but John,

surface level, is this not just shady McGrady?

AVALON: I think it is Shady McGrady but oh so much more. We can't just normalize this. That's dangerous. We'll put it in a presidential context. This is a current president of the United States in the heat of the campaign talking with his lawyer about a secret payoff to cover-up an affair he had with his third wife after she had his first child. There are so many depths of shady. It is unethical and possibly illegal. It's not that a campaign violation is going to get the president impeached. It's not. But the way that this is done, the tone and tenor, is a total departure from anything we have seen. And so, let's not -- let's not reach for more parallels.

BALDWIN: And on the magnitude of the moment, MJ, now that you have the Trump tweet responding to this Cohen tape, they are at war publicly. Can you speak to monumental moment of this?

LEE: Michael Cohen is no longer on Donald Trump's team. The man who said he would take a bullet for Donald Trump, he's no longer doing that. He's no longer loyal to Donald Trump in the way he once was. He obviously wants to put himself, his well-being, his family's well- being before Donald Trump, his former boss. I do want to say that he's having a tendency to fall into the trap of asking the question, is Michael Cohen going to flip? Does he want to flip? I think that gives Michael Cohen too much agency here. He's not someone totally in control of the situation anymore. That stopped when the raid happened.

[14:10:00] That stopped when investigators went into his home, his office, his hotel room and took so many things from them. One of them being this reporting that has been so explosive. So, this idea that Michael Cohen might sort of flip the switch and decide tomorrow, yes, I've decided I'm going to turn on the president, he actually doesn't have that standing anymore. That's not for him to decide.

BALDWIN: Great point. What about our conversation, you prosecuted a lot of mob, mobsters, and in some cases, we were talking about the Consigliere, right, who in this case to put the metaphor with current day, would be the Michael Cohen, and the mob boss being Donald Trump. I'm just painting a picture for the viewer. Why would, in your cases in prosecuting, why would the Consigliere tape a boss?

HONIG: First of all. You're right, Michael Cohen, both parties have to want it to have it cooperate. I want him as a prosecutor, right. He can give you the keys to the kingdom. Look at this tape. To your question why would he tape?

He's protecting himself and knows who he's dealing with. He knows who these people are and the tactics they engage in. He's protecting himself. It makes perfect sense. It's unusual, it's not illegal, but it is unusual. But I believe Cohen felt like he had to do it for himself. And this tape actually shows you why Michael Cohen would be an explosive cooperator. What would happen if he cooperates? You said a conference table as a prosecutor, you play him this tape, every tape. And he will explain to you word for word, all these things that we are wondering about. The Charleston reference.

There are two references to Charleston. Nobody knows what it means.

BALDWIN: He has the answers.

HONIG: You say, what does that mean? What's this? Why does he say this? He will open up a kingdom for you.

KUGEL: It might not be illegal to tape your clients but there's no question, it is extremely unethical to tape a client and totally inappropriate as a criminal defense attorney.

BALDWIN: All right, everyone. To be continued. Thank you all so much for being with me.

Just ahead, President Trump pushing back against anger from his own party as fallout from his tariffs start to hit America's homeland. An Illinois pork farmer responds to the $12 billion bailout. Is that good enough?

Plus, echoes of 1984. Why line from the president's speech at the VFW has some parallels to the George Orwell novel. And a report reveals President Trump is furious after learning his wife's TV on board Air Force One was tuned into CNN. Melania Trump has just responded. We have that for you. You're watching CNN. I'm Brooke Baldwin.

[14:15:00] (COMMERCIAL BREAK)

BALDWIN: The president is defending his $12 billion bailout for farmers hit by Trump's escalating trade wars. And many of the president's fellow Republicans are saying the farmer aid package is just a pacifier, not a long-term solution. Here's what president Trump tweeted: "China is targeting our farmers who they know I love and respect as a way of getting me to continue allowing them to take advantage of the U.S. they are being vicious in what will be their failed attempt. We were being nice until now."

So, says the president. U.S. farmers of soybeans, corn, dairy, pork products, they are feeling the squeeze from China's retaliatory tariffs. And a lot of the Republicans are saying no one can win the trade war initiated by the president. (BEGIN VIDEO CLIP)

SEN. MIKE ROUNDS, (R), SOUTH DAKOTA: The tactics that are being used right now are not helping our producers. And all we're saying is, look, wouldn't we be better off if we made a deal with TPP or strengthened the NAFTA agreement first before going after China?

SEN. BEN SASSE, (R), NEBRASKA: When you are tariffs that are a bad thing and try to solve them with bailouts, another bad thing, you're not heading in a good direction. You're trying to make America 1929 again and that's not what the people in the state I represent want. We want to feed the world. We want more markets and we want more trade.

PAUL RYAN, (R), HOUSE MAJORITY LEADER: I've made it pretty clear I don't think tariffs are the right answer. I don't support tariffs. I think tariffs are taxes. I think there are better tools to use to get them to play fairly.

(END VIDEO CLIP)

BALDWIN: Let's go straight to the farmers. Brian Duncan is with me, a pork farmer and vice president of the Illinois Farm Bureau. Welcome back.

BRAIN DUNCAN, PORK FARMER AND VICE PRESIDENT, ILLINOIS FARM BUREAU: Brooke, it's great to be back. Thank you for having me on today.

BALDWIN: You got it. Let's just begin with the one quote that I was reading from the Republican Senator Pat Toomey who referred to the bailout as, quote, "a band-aid on a self-inflicted wound." Brian, how does it feel for you?

DUNCAN: Well, I think there's a mixed emotions here. I think agriculture, I think of myself personally, I am grateful that the president has recognized the deep amount of economic damage that has been done since the trade war began. Since you and I first talked several months ago. And so, we're grateful that he recognized it. I think the step yesterday was a really important step to helping address some of the short-term economic needs that we are experiencing right now out here on the farm. But we still think that longer term there is a better way to go about solving the trade issues that no doubt exist that involves negotiation, it involves a rules-based approach to the solution. For the short-term --

[14:20:00] BALDWIN: Let me jump in. I want to stay on the short-term and then we'll talk long-term in a second. I hear you being grateful for the White House and the billions to help you guys, but would you agree, is this a self-inflicted wound? Is this the administration's doing? You tell me how hard you have been hit? How is your bottom line?

DUNCAN: Agriculture in general, the six major commodities have dropped by $20 billion in value. And that is in a year where we were just projected to make $60 billion in agriculture. So, you can see how hard we have been hit. Is it self-inflicted? We think there would have been and still is a better way to go about. This a rule's- based approach. Tariffs is a last resort. And not a first option. We have been urging from the beginning to this president and the administration.

BALDWIN: Do you feel like this president is trying to buy your political silence? With this $12 billion bailout?

DUNCAN: No. I don't get that sense, but I do think the Secretary of Agriculture yesterday mentioned he's trying to buy a little time to work on this issue as he sees best. And so, again, I think when you look at the hit major agriculture is taking, it will maybe buy some patience. As we wait and see, maybe the second and third or even last chapter of this story about the trade war, how it ends.

BALDWIN: Last question, Brian. And I know you don't have the details yet, but the ag department officials say farmers can start signing up to get the federal money in September, weeks before voters go to the polls. Do you think farmers, many of whom voted for Donald Trump, will think twice about voting for Republicans because of it?

DUNCAN: What's the old saying, when it comes to the election, it is the economy stupid. Isn't that the mantra? And farmers personal economy has definitely been impacted by this trade war. To the point of they will think about it as they go to the voting booth. Maybe. I am not sure of that. My position in Farm Bureau, I have been getting a lot of phone calls and texts recently in the last couple weeks that we have producers increasingly ramping up their level of concern on the issue and what their personal economy looks like going forward.

BALDWIN: Nice to hear from you. Brian Duncan, thank you so much.

DUNCAN: Thank you, Brooke.

BALDWIN: Just in, Secretary of State Mike Pompeo releasing a statement ahead of his testimony just a short while from now in Washington declaring that the United States will not recognize Russia's annexation of Crimea. The president seemed to leave the door open before the Putin summit despite America's policy on not to accept the invasion. Secretary Pompeo is set to be questioned from lawmakers in moments about the summit on capitol hill. Standby for that.

Also, thanks to a tape, the president's former fixer officially turns on his old boss. An audio forensic analysis, next.

[14:25:00] (COMMERCIAL BREAK)

BALDWIN: Let's get back to the top story. The audio recording between president Trump and his personal attorney Michael Cohen. It raises questions about whether the president was trying to cover his tracks with cash payments. Cohen lawyer Lanny Davis said he paid with cash. His lawyer said, do not pay by cash. I'll play it for you, you decide.

[14:25:00] (BEGIN VIDEO CLIP)

MICHAEL COHEN, TRUMP'S PERSONAL ATTORNEY: I need to open up a company for the transfer of all that info regarding our friend David so that -- I'm going to do that right away. I have spoken to Allen Weiselberg about how to set the whole thing up with funding -- yes. All the stuff -- because here you never know where that company, you never know what he's going to be.

DONALD TRUMP, PRESIDENTIAL CANDIDATE: Gets hit by a truck.

COHEN: Correct. So, I'm all over that. And I spoke to Allen about it. When it comes time for the financing, which will be --

TRUMP: What financing?

COHEN: Well, I have to pay --

TRUMP: Pay in cash.

COHEN: No, no, no, no, no, no. I got no, no, no.

(END VIDEO CLIP)

BALDWIN: All right. My next guest is a cyber and privacy expert and a former Justice Department prosecutor for cyber crimes, Mark Rasch is with me now. So, Mark, you're the professional here. In listening to, and that was just a snippet on was it cash or not cash, which to me is a sidebar of the grander scheme of the story.

But I wanted to know first just how you thought this was recorded? Let me play one other clip, because in the very beginning of the tape, you hear sort of rustling or shuffling about maybe something is scraping against the microphone. Roll it.

(BEGIN VIDEO CLIP)

[14:30:00] TRUMP: Let me know what's happening. OK?

Oh. Oh.

(END VIDEO CLIP)

BALDWIN: What is going on?

MARK RASCH, FORMER JUSTICE DEPARTMENT PROSECUTOR FOR CYBER CRIMES: You can only infer what's going on from listening to the tape and of course there are two people who know exactly what is going on, the people who are recording and the people who were being recorded. But you can tell by just listening to the tape that it is being set up. That is somebody is turning the tape recorder -- I going to call it a tape recorder but it's probably a cell phone or something like that on.

It is obviously in their pocket, it is being moved and moving it around to create the rustling sound at the beginning of the tape. What is interesting is, you don't hear the rustling sound any time after that.

BALDWIN: It is crystal clear. RASCH: After that, it is not sitting in somebody's pocket because

every time they move, they would make the rustling sound. So, you don't hear that on any of the tape, even at the very end, so there's no act of someone turning it off.

BALDWIN: Would that make you think, we weren't there, we don't know, but would Michael Cohen be like, OK, Mr. Trump. And then have it out?

RASCH: That is a certainly one very plausible theory. He turns on the recording then puts the phone down at stays there the whole time and it is it moved.

BALDWIN: OK. How about at the very end of the tape? We hear an abrupt cut.

(BEGIN VIDEO CLIP)

COHEN: No, no, no, no, no. I got -- no, no, no, no.

(END VIDEO CLIP)

BALDWIN: It cuts. What do you read into that?

RASCH: If you look at the spectrogram, that little oscilloscope that you put there, it ends abruptly, which means it was not turned off. Because when you turn it off you've got to move the phone, more rustling and the like. Listening to undercover tapes and listening --