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Trial of Paul Manafort Resumes; Robert Mueller Wants Trump to Answer Obstruction Questions in Person. Aired 9-9:30a ET

Aired August 2, 2018 - 09:00   ET

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


[09:00:00] GREGORY: Get to see you tomorrow.

CAMEROTA: There's tomorrow.

GREGORY: But now it's time for "CNN NEWSROOM" with Poppy Harlow. Have a good day.

POPPY HARLOW, CNN ANCHOR: All right. Good morning, everyone, I'm Poppy Harlow in New York. So glad you're with me this morning. It is 9:00 a.m. on the East, 6:00 a.m. out West, and it is day three of the fraud trial of President Trump's former campaign chairman brought by the special counsel, of course, who still insists on asking the president directly about obstruction of justice which he may or may not have provided fresh evidence of depending on your definition of should.

The White House insists there is no obstruction in the president's so- called opinion that Jeff Sessions, quote, "should stop this rigged witch hunt right now." Those are the words of the president. We'll see about that. At the same time, the president and his lawyer say he remains eager to sit down for a face-to-face interview with Robert Mueller's team of prosecutors, this would be against his lawyers' advice.

For his part, Mueller is said to be willing to ask the president fewer questions face to face about obstruction but he won't settle for just written answers on that. So let's go to the White House for some answers. Our Abby Phillip joins me now outside.

Good morning, Abby. I think it's fascinating, sort of this push-and- pull between the president and his legal team. Even more so perhaps is that he is still saying he wants to sit down with Robert Mueller with the special counsel, because he thinks he can persuade Mueller to see it his way. Is that right?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right, Poppy. It is interesting that after months and months this isn't just a negotiation between the president's lawyers and Robert Mueller. It's also one clearly between the president and his own lawyers. President Trump reportedly believes that he can convince Mueller that this is all just a witch hunt. He's been saying it on Twitter for months but he believes that the interview is potentially a venue for him to make that case. His lawyers clearly disagree believing that this just opens a

potential door for him to endanger himself legally even further but what is at issue here right now is that the president's lawyers want to kind of reduce the scope of this potential interview if it happens at all but the president is full speed ahead. He thinks that if he is face-to-face with Mueller he can convince them that this is nothing, that there is no collusion just by simply having an interview -- Poppy.

HARLOW: It'd be pretty extraordinary to think you can convince the special counsel that the investigation he is leading is actually a rigged witch hunt as he says, but I digress. I mean, where does this go, Abby? Is this barreling towards a subpoena fight?

PHILLIP: It seems like it could potentially. I mean, these negotiations have been going on for several months now and there hasn't really been a whole lot of progress. On Monday Giuliani complained that they weren't hearing much from Robert Mueller. On Tuesday we learned that Mueller did respond but didn't respond by taking obstruction of justice, that key issue, off the table. He basically said we will reduce the number of questions that we ask about obstruction of justice but only if we get that sit-down interview.

So it seems very much that they are in a stalemate here. Can Giuliani and the rest of the president's legal team limit the scope of an interview in a way that is acceptable to them? It's not clear but it seems Mueller isn't backing down from the point here which is that they want to talk about collusion but they also want to talk about obstruction of justice.

This could be headed toward a subpoena fight because the president's lawyers want to take obstruction of justice really off the table here -- Poppy.

HARLOW: OK, Abby, at the White House, thanks for the reporting.

Joining me now, CNN legal analyst and former federal prosecutor Laura Coates. Also with me are political analyst Alex Burns and political reporter for the "Washington Post's" political blog "The Fix," Amber Phillips.

Nice to have you all here. And Alex, let me start with you because it's your colleagues at the "Times," Mike Schmidt and Maggie Haberman, who write this morning what Abby just mentioned. And let me quote it, in effect he, being the president, "believes he can convince investigators for the special counsel of his belief that their own inquiry is a witch hunt." Really?

ALEX BURNS, CNN POLITICAL ANALYST: Well, really, yes is the answer to that question but, you know, really is this a good idea? Clearly the president's lawyers don't think so.

Poppy, this is part of a pattern with the president that you've seen permeate basically every arena of his administration. That, you know, when people were a couple of months ago asking why does he want this face-to-face meeting with Kim Jong-un, why does he want this face-to- face meeting with Vladimir Putin, this is a guy who for his entire business career and in his mind, in entire political career all he needs to do is get face-to-face with somebody, a reasonable person he can kind of talk them into his position. That's a very, very dangerous way to approach a legal situation like this one.

HARLOW: Laura, help me understand a few things here on what Mueller's team seems to be coming close to maybe agreeing to the president's lawyers on and that is why they would -- A, just help me understand, why would they agree to limit the number of obstruction questions they ask? I mean, it makes me think as a journalist, you know, if you're going into an interview and you know you'll need to ask a number of questions on a very important topic and maybe to follow up if you don't get direct answers from an interview subject, I would never agree to, like, OK, I'll only ask two questions on that.

[09:05:05] Why would Mueller's team agree to this?

LAURA COATES, CNN LEGAL ANALYST: Well, you have to "Art of the Deal" and you have the art of the compromise here. Remember, there is a question standing right now whether or not you could actually compel through a subpoena the president to testify before a grand jury.

HARLOW: Right.

COATES: Now likely the answer would be yes, and so he's aware, Mueller's team is aware that to avoid that even courtroom inquiry you can have a negotiated sit-down with the president where his lawyers can be present. They're going to have some concessions to give but ultimately, Poppy, the question they can ask is, did you intend to influence, impede or undermine an investigation? That's one question and yet it's very, very weighty in his mind.

Now think about this, when you're Robert Mueller's team thinking about whether or not you want to ask questions, their actual statement was, we may limit the questions and you can respond to them in writing but we can ask follow-up questions and the follow-up questions is actually where the meat meets the bone.

HARLOW: Right.

COATES: I want to be able to look at you and see your face.

HARLOW: Yes.

COATES: Assess your credibility, weigh your objectivity and believe if you're credible or not.

HARLOW: And also with the written answers, Laura. I mean, the reason that that is safer for the White House and they would prefer that is obviously because it can have more eyeballs on it, right?

COATES: It's absolutely vetted. But the problem and the irony here is remember, for a long time we've been hearing about this phrase a perjury trap. The reason why they didn't want to meet with Mueller's team because it was a so-called perjury trap, answering these questions. Now you can imagine the dynamic at play if you have a written response in front of Mueller and then you have the off-the- cuff response from the president of the United States who is known to divert from scripts, whether it'd be a teleprompter or one that's vetted by his attorney. And that dynamic will come into play in a very interesting way and if he can't meet that script where he opens himself up to that self-fulfilling prophecy of a perjury trap.

HARLOW: Amber, you've got to be thinking that the president has to be thinking well, if I don't sit down with Mueller at all and if I never grant this interview, how do I go out there and explain to the American people I wouldn't do an interview even though I didn't do anything wrong? Right?

AMBER PHILLIPS, POLITICAL REPORTER, WASHINGTON POST'S POLITICAL BLOG "THE FIX": Yes, I think that's exactly right and part of the calculation that's creating such hesitancy on team Trump's part about whether to sit down, two ways to look at this interview, right? Politically and legally. Politically as you point out it might make sense for the president to sit down. He could try to wrap up this investigation quicker, before the midterm elections potentially and tell the public look, I am cooperating like I've been saying I'm doing nothing wrong.

Legally as the lawyers pointed out, his lawyers feel like it's a massive risk for the president. Legal experts I've talked to involved in past special counsel investigations say they wouldn't advise their most studious client to sit down with a team like Mueller's that is so -- seems so prepared, so on the ball, and knows the exact details and moments of what happened in private in the past few years or so in Trump's administration so it's very risky legally.

HARLOW: Can, Laura, the Mueller team provide a complete report to Congress? Because ultimately that's what they do. Could be -- it has potential to be a very politically damaging report to the president but it ultimately is a report, right?

COATES: Yes.

HARLOW: Can they do that in full without an interview with the president?

COATES: They likely can with respect to whatever charges do not include obstruction. The reason why it's likely that they need to have a comprehensive conversation before they can give that comprehensive report to Congress is because you actually have to have the tie, the bow tie on this to say what was the president's intent? Was it corrupt? Was it him being defiant and defensive or engaging in criminal behavior?

And so without that connection it's difficult to resolve that issue. Now there is a whole pattern of behavior here, Poppy, including everything back to the Lester Holt interview talking about why he fired James Comey.

HARLOW: I was just going to say, wouldn't that indicate intent? What you say in an on-the-record interview? COATES: Of course. Of course it does. And of course the idea that

it's all about the contextual clues, the problem is, when you look at each piece of information in isolation which is what the report will probably try to do and then put the whole picture together, the mosaic is important but so are the individual pieces and without that very informative interview you're left with the interpretation aspect that, well, do I have enough for corrupt intent or do I have somebody exercising presidential prerogative.

HARLOW: Sure. Sure. Good point.

Alex, to you, Rudy Giuliani on the trail yesterday said, quote, "This election is going to be about impeachment or no impeachment." Is he right.

BURNS: I don't know that it's going to be about impeachment or no impeachment. That's certainly the argument Republicans want to put out there. It is about whether Congress is going to investigate the president aggressively or not, and to Laura's point, the point you were just raising about Mueller producing a report, the overwhelming likelihood right now at least as far as everyone in Washington is expecting is that Mueller is not going to completely finish the job here that some element of this is going to fall on Congress, whether it is something like impeachment, whether it is a follow up inquiry or investigation using the subpoena powers of the House or the Senate.

[09:10:04] Right now that's not happening because Republicans control those levers of investigation. If Democrats were to take the House I think it's a very safe bet, not that they would do impeachment, that's a big question mark, but that they would make the president's life absolutely miserable with that subpoena power.

HARLOW: Amber, we've heard Rudy Giuliani saying over and over how much time and energy this is sucking up from the president. How many times he has to go in and talk to the president about what's going on, et cetera. And that it's hard to focus on a lot of other things but in actuality the Trump administration is doing a lot at the same time that this may be, you know, sucking up the oxygen or eating up his Twitter feed.

I mean, if you look at what is just happening now and today, you have two big things happening through rule making, that is reversing the Obama administration's policy when it comes to emissions on cars in a major way. That's a dramatic change for this country. And also allowing the sale of health insurance plans that undermine the rules of Obamacare and these are both things that are happening on their own but just not getting the attention.

PHILLIPS: Well, yes, and I think that Trump administration's actions are going to escalate in the summer months as Congress basically calls it quit besides trying to fund the government this fall and so there's a distance between Rudy Giuliani's argument, right, by saying we can't focus on anything else. And if Mueller tried to subpoena Trump to sit down with him, and that went up the ladder of the court to try to get -- force Trump to sit down with him, that would be a main argument on team Trump's part is saying you can't force us to sit down because we're the president and we're busy with a bunch of other stuff but as you point out, we're going to see the Trump administration acting on a whole host of issues as Congress takes a break.

HARLOW: I mean, the Clinton administration also tried to do that and it worked as a delaying tactic but it ultimately didn't prove to be fruitful in the end.

Thank you, guys, very much, Laura, Alex and Amber.

The so-called rocket docket is living up to its nickname. Minutes from now Paul Manafort's fast-moving trial will resume day three. What we're learning about his luxurious lifestyle and how he paid for it, and the big question, will his former deputy Rick Gates take the stand?

Plus thanks and see you soon? On the same week we're getting reports that North Korea is working on a new missile, the president sends a late-night tweet praising Kim Jong-un's, quote, "kind actions" for those remains that were returned.

And the TSA considering eliminating passenger screening all together at more than 150 airports in this country. Seriously. A major safety risk? We'll dig in.

(COMMERCIAL BREAK)

POPPY HARLOW, CNN ANCHOR, NEWSROOM: Moments from now, the trial of former Trump campaign manager Paul Manafort will resume in Alexandria, Virginia. Prosecutors are expected to call Manafort's bookkeepers and tax accountants to the stand today.

And this comes after the prosecution spent yesterday highlighting Manafort's extravagant lifestyle and how he funded. They allege he hid that money from the IRS.

And the big question now hanging in the air is will his deputy, Rick Gates, testify against him? Our crime and justice reporter Shimon Prokupecz joins me now.

I was stunned to see this headline cross that it's even a question now as to whether Rick Gates will take the stand. We know Rick Gates flipped and is cooperating with Mueller's team. He might not testify?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Yes. I think we all were shocked, reporters that were in the courtroom ran out of the room to report that news.

HARLOW: Yes.

PROKUPECZ: Yes. That was sort of a surprise because, I think, we had all anticipated, though the prosecution has never indicated that they were certainly going to call Rick Gates. He is on the witness list, but they're not bound by that.

The defense has made more of an issue of this, trying to blame everything on Rick Gates here. So, all of this kind of transpired yesterday, while a witness was testifying, an FBI agent was testifying and the prosecution was asking some questions.

And the judge basically said, well, you're going to have Rick Gates come in here, so why doesn't he just testify to this. And then, the prosecutor responded, well, we don't really know yet if we're going to call Rick Gates. We may or may not.

And so, that sort of, Poppy, set off this chain of events, all of us leading to believe that perhaps there is this whole thing that maybe he won't be in court to testify.

HARLOW: The prosecutors are also hanging a lot of this on trying to convince the jury by showing them, look, here's how ostentatiously he lived, look at what he bought with all of this money that he didn't report or pay taxes on, et cetera, allegedly.

But the judge had been blocking them from being able to show these goods and really try to make their case to the jury. And now there's an update on that?

PROKUPECZ: Yes, there is, Poppy. So, that's right. This lavish lifestyle, perhaps some might say somewhat tacky, in that there was a purchase of $15,000 purchase of an ostrich jacket pictured there.

So, the jury has not been able to see any of these photos. The judge has not allowed prosecutors to display any of them in court, saying, essentially, the judge's argument, there really is no reason to do this.

And at one point, the judge told the prosecutors, living a lavish lifestyle is not a crime. So, overnight, prosecutors said that - are arguing, they filed a brief with the court, saying they want to introduce this into evidence.

They need to show this to the jury because the whole point of this, Poppy, is that a lot of these items were purchased through overseas money. These are wires that came to these companies from shell companies that Manafort controlled in overseas accounts.

And the prosecutors need this, they say, to show how he was using this money, how he was hiding some of this money and sort of how he was - like you said, living this lavish lifestyle.

HARLOW: And today, who takes the stand? And why are they critical to the prosecution here?

PROKUPECZ: So, more of the same. It's going to be vendors. There's going to be bookkeepers and tax folks that are going to come in and talk about Manafort's finances.

This, of course, is important because they're going to again detail some of the taxes that he wasn't paying, some of the shell companies that he created and how he was hiding his money overseas.

Obviously, this is what this case is about. It's about taxes, it's about not reporting money that Manafort made and hid in overseas accounts. HARLOW: All right. Shimon, appreciate the reporting on all of it.

Thanks so much.

Let's bring Laura Coates back in for the legal side on this. I mean, if the prosecution doesn't call Rick Gates to the stand, that would be stunning. It sounds like the lawyer tried to backtrack on that after he said it in the courtroom, Laura.

But if they don't call Rick Gates to the stand, why might that be?

LAURA COATES, CNN LEGAL ANALYST: Well, there's two reasons. And, first, you're absolutely right, Poppy.

The idea that he may have tried to backtrack here is important. Remember, the reason the prosecutor actually said that they may not call Rick Gates is because Judge Ellis, who is known for intervening and inserting himself into the questioning and making sure that it's an expeditious proceeding that's fair, he was trying to tell him why are you asking those questions.

If you call Rick Gates, this is going to be irrelevant and we'll listen from him. And the prosecutor has every right to build his case the way he sees fit and not to hinge his entire case on one particular witness. That's number one.

But the other reason is that, well, now, after opening statements, the prosecution is well aware of the defense's strategy, that they're going to do a he said/he said game and they're going to rely on the jury believing that the person who is the informant, the cooperator for the government, is not a credible person.

And so, now, they've taken out a lot of air out of those sails by saying, you better rethink your strategy, this is a document-heavy case and we may not ever have to call Rick Gates, so your he said/he said credibility issue may never come to play.

HARLOW: The rocket docket that is the nickname for this court, and specifically Judge Ellis - he tries to move things along so quickly, why? Couldn't it be dangerous to justice, frankly, to rush things too much?

COATES: Well, there is that thought that perhaps if you are trying to cut corners and there is an injustice happening. However, the notion that somebody would be facilitating a quick hearing or a quick trial that's also comprehensive should actually be the goal in most jurisdictions.

I know we have bureaucracy here that slows down a lot of things and red tape. It's not supposedly that he is trying to expedite in a way to cut corners, but instead to keep focus and say, listen, this is not a trial where we put wealth on the stand.

We are trying to ensure that the government has a case that is based on whether or not he paid Uncle Sam and lived above his means or whether he did not. And I think that is the interest here. However, there have been assertions by previous people in front of the judge, including the prosecutors in this case now, who believe perhaps that this is becoming too expeditious.

They said it's going to be a three-week trial, Poppy. At the rate it's going right now, that was a gross overestimation of how long it will take.

HARLOW: Wow! That's stunning. Quickly, before we go, what do we know about this judge because he becoming such a central part of this. Quite a character.

COATES: He is. I mean, this is somebody who has spent 30 years or more on the bench. Princeton, Harvard and Oxford educated. Is known to speak Spanish to his Spanish-speaking defendants. Has equal parts warmth and equal parts scorn for people who are trying to slow down the court proceedings.

And he is somebody who oftentimes would like the focus to be on the actual crime. Now, that's a great thing -

HARLOW: It's good.

COATES: - if you think about justice. The other part, however, is remember this is the same judge who questioned the motivation of why the special counsel would try to go after Paul Manafort and really upended the notion of who the audience of one was going to be. Was it Robert Mueller or Donald Trump?

Even having said that, though, he is known to be quite fair by all accounts. Was somebody who at one point was known as the Tasmanian devil because he will make sure that his courtroom is in order even if it means that there is pie or egg on your face in the process.

HARLOW: Laura Coates, thank you very much for being with me on all of this this morning.

So, the president is praising Kim Jong-un for his "kind actions" on the same week we're hearing North Korea is building more missiles.

And we're just moments away from the opening bell on Wall Street. The Dow is expected to fall this morning. Top of mind for investors, the trade war with China and its impact on the broader economy as the Trump administration considers raising tariffs to 25 percent on $200 billion worth of Chinese goods.

(COMMERCIAL BREAK)

[09:29:02] HARLOW: On the same week, we're learning North Korea is reportedly building more missiles, President Trump is praising Kim Jong-un. The president thanked him overnight in this tweet for returning the remains of US soldiers killed during the Korean War. He called those actions kind.

He then went on to say he's looking forward to seeing Kim soon. It's the last part that has a lot of - well, both parts have us asking a lot of questions this morning, but the last part had a lot of people wondering, OK, does that mean a second summit?

This is at the same time that the Secretary of State Mike Pompeo admitted that North Korea has shown little progress towards denuclearization.

Let's bring in CNN military analyst Lt. Gen. Mark Hertling. It's nice to have you.

Let's piece through this. So, the first part, the fact that the remains have been returned is a very good thing, of these 55 Americans who fought overseas. Is it kind or is it just righting a wrong that should righted a long time ago?

LT. GEN. MARK HERTLING, CNN MILITARY ANALYST: Well, I think we need to probably clear a couple of things up, Poppy.

First of all, that's not the extent of the remains in North Korea. There is an estimated 7,500 remains still unaccounted for; 5,800 or so above the 38th Parallel in North Korea.