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CNN NEWSROOM

Russia Is Threatening The Upcoming Midterm Elections; Zimbabwe's New President; Split In South Korea Over President Trump; Russian Threat 'Is Real,' Trump Officials Say, Vowing to Protect U.S. Elections; BMW Caught Up In Escalating Tensions; Apple Is First U.S. Company Valued At $1 Trillion; Manafort's Ostrich Jacket. Aired 2-3a ET

Aired August 3, 2018 - 02:00   ET

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


[02:00:09] NATALIE ALLEN, NEWSROOM ANCHOR, CNN: A winner has been declared in Zimbabwe's elections, but the opposition claims the vote was rigged.

CYRIL VANIER, NEWSROOM ANCHOR, CNN: Top national security officials in the U.S. warned that Russian is threatening the upcoming elections. But two hours later, their boss says this.

(BEGIN VIDEO CLIP)

PRES. DONALD TRUMP (R), UNITED STATES PRESIDENT: Now we're being hindered by the Russian hoax. It's a hoax.

(END OF VIDEO CLIP)

ALLEN: Also ahead here, $1 trillion, that's how much money Cyril has.

(CROSSTALK)

ALLEN: Actually, that's Apple's record-breaking value now. We will look at how it got there. I'm Natalie Allen.

VANIER: I wish. I'm Cyril Vanier. Welcome to our viewers around the world, great to have you with us. It took four days (Inaudible), including a day of deadly protests, but Zimbabwe has now officially elected its first President since Robert Mugabe. That man, Emmerson Mnangagwa, he's been keeping the seat warm since Mugabe was forced out last year, but it has not been a smooth transition. CNN's David McKenzie has the latest from the capital.

(BEGIN VIDEO CLIP)

DAVID MCKENZIE, CORRESPONDENT, CNN: The (Inaudible) party supporters are celebrating outside the building behind me where just moments ago they announced the President-elect of Zimbabwe after this highly contentious vote process, winning with more than 50 percent, just more 50 percent of the vote according to the electoral commission.

Emmerson Mnangagwa, the current President of Zimbabwe, now the President-elect after these violent (Inaudible) days here in Harare, the capital, now the opposition has said it will not accept this outcome. (Inaudible) is telling me that they will use any political means possible to contest the decision of the electoral commission through (Inaudible) that Mnangagwa is again the President of Zimbabwe.

Throughout the day, there were military and police on the streets earlier. They were telling people to leave the central business district, closing up their shops, a virtual ghost town. The police also raided the opposition headquarters and arrested more than a dozen people. The question will be now is how will the electrical observer missions react to this win, this narrow win in terms of being just over the threshold of not having a runoff that Emmerson Mnangagwa is now the President-elect of Zimbabwe, David McKenzie, CNN, Harare.

(END VIDEO CLIP)

ALLEN: Well, back in the United States. Top U.S. security and intelligence officials warned a pervasive and continuing Russian interference in the U.S. political system.

VANIER: The director of national intelligence says President Trump specifically directed him to make the issue a top priority. Our Jim Acosta has more from the White House.

(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, PRESS SECRETARY, WHITE HOUSE: The President has made it clear.

JIM ACOSTA, WHITE HOUSE CORRESPONDENT, CNN: It was a show of force as the White House sent out top administration officials, from the director of national intelligence to the national security advisor, to the FBI director, to assure the American people they are determined to combat Russian interference in U.S. elections.

UNIDENTIFIED MALE: We continue to see a pervasive messaging campaign by Russia to try to weaken and divide the United States.

ACOSTA: Director of National Intelligence Dan Coats insisted the order is coming from the top.

UNIDENTIFIED MALE: The President has specifically directed us to make the matter of the election meddling and securing our election process a top priority.

ACOSTA: Homeland Security Secretary Kirstjen Nielsen described a grave threat.

UNIDENTIFIED FEMALE: Our democracy itself is in the crosshairs. Free and fair elections are the cornerstone of our democracy, and it has become clear that they are the target of our adversaries. (Inaudible) just had to sow discord and undermine our way of life.

ACOSTA: All the tough talk stood in stark contrast with the President's own past statements, most notably his summit with Vladimir Putin in Finland, where Mr. Trump declined to confront the Russian President over Moscow's meddling. TRUMP: I hold both countries responsible, and I think we're all to blame. ACOSTA: The President has often diminished the Russians, repeatedly

saying other unnamed countries could be interfering as well.

TRUMP: I accept our intelligence communities' conclusion that Russia's meddling in the 2016 election took place, but the other people also.

ACOSTA: The officials gathered in the briefing room were asked about the disconnect.

UNIDENTIFIED MALE: I'm not in the position to either understand fully or talk about what happened at Helsinki.

ACOSTA: Then there are the President's tweets, accusing top FBI officials of being part of a witch hunt, a charge echoed by Press Secretary Sarah Sanders.

[02:05:00] SANDERS: He's certainly expressing the frustration that he has with the level of corruption that we've seen from people like Jim Comey, Peter Strzok, Andrew McCabe. There's a reason that the President is angry.

ACOSTA: Asked about that, FBI Director Chris Wray pushed back with Sanders in the room.

UNIDENTIFIED MALE: I can assure the American people that they met (Inaudible) FBI starting from the director all the way on down are follow are oaths and do our job.

ACOSTA: The White House was also asked about its continued attacks on the press after the President's daughter, Ivanka Trump told Axios members of the media are not the enemy of the people as her father often says.

IVANKA TRUMP, ADVISER, PRESIDENT TRUMP: I (Inaudible) my fair share of (Inaudible) recording on me personally that I know to be fully accurate. But, no I do not have feel that the media is the enemy of the people.

ACOSTA: Given multiple opportunities to back Ivanka not President Trump, Sanders refused to say the press is not the enemy. His own daughter acknowledges that, and I'm asking you to do Sarah is to acknowledge that right now and right here.

SANDERS: I appreciate your passion. I share it. I've addressed this question. I've addressed my personal feelings. I'm here to speak on behalf of the President. He's made his comments clear.

ACOSTA: Each of the top officials at the White House today laid out various task forces and initiatives that have been launched to defend against Russian attacks in the upcoming midterm elections. The big question of course is whether any of those efforts ultimately will be successful. The answer may not come until well after the November elections. Jim Acosta, CNN, the White House.

(END VIDEO CLIP) VANIER: CNN National Security Analyst Samantha Vinograd joins me now. Samantha, why did we see this show of force at the White House today on this topic, on which the top national security people have been ambivalent up until now.

SAMANTHA VINOGRAD, NATIONAL SECURITY ANALYST, CNN: Well, I think it (Inaudible) message to his national security team that he's taking this issue seriously. We had all (Inaudible) intelligence community represented (Inaudible) John Bolton with national advisor would be coordinating all parts of the U.S. government in terms of detecting the threat and responding to it.

But the problem is we (Inaudible) of force White House white intelligence agreed that the threat has not found a way, and then just hours later the President undercut what they said by actively and knowingly participating in words that actually help Russia's information (Inaudible) country by sowing division and (Inaudible) confusion.

VANIER: OK. So I'm going to play that. And just before I do, what was interesting was that the top security officials didn't just say this is a big threat. We know it is. They said the President knows it is, and the President has directed us to counter the threat. Now, listen to the words that the President actually used when he got a chance to speak in his rally.

(BEGIN VIDEO CLIP)

TRUMP: In Helsinki, I had a great with Putin. We discussed everything. I had a great meeting. We got along really well. By the way, that's a good thing, not a bad thing. That's a really good thing. Now we're being hindered by the Russian hoax. It's a hoax, OK.

(END VIDEO CLIP)

VANIER: All right. That word again, it's a hoax, the Russian hoax, the whole thing. So why go to the extent of having a show of force in the White House and then on the same day, call the whole thing a hoax.

VINOGRAD: It completely (Inaudible) tells that the President is completely, completely disconnected from his security national team. So on the one hand, logically, he directs them to counter threat which is from Russia's information (Inaudible) cooperation and cyber hacks, and other forms of attacks on the country.

But then he cannot control himself when he gets in front of the cameras (Inaudible) to start tweeting. What this really tells me is that there is some (Inaudible) deep seated paranoia or inferiority complex that is driving him to undercut his team and put his personal interest first (Inaudible) is that every time that he does this, he just gives Vladimir Putin another opening (Inaudible) I understand you're saying.

We did get along great in Helsinki. And the truth is President Trump should not (Inaudible) should not want to get along great with Vladimir Putin, because we're (Inaudible), but it just (Inaudible) good (Inaudible) Vladimir Putin is going to keep poking at that.

VANIER: What I still don't understand -- and I don't what your thoughts are on this. It's like there are two parallel realities, one in which Russia is a threat, and one in which the whole thing is a hoax. And normally, when you have two contradictory, not just different but contradictory messages, they end up colliding, right. And when you're the administration, you end up having to clarify things and choose one.

And here, they're just running on parallel tracks and coexisting. How can that even be?

[02:10:02] VINOGRAD: (Inaudible) unfortunately, the President and his (Inaudible) two different things, one is Russia (Inaudible) on our country, (Inaudible) operation that they're waging. Remember, this investigation that President Trump likes to call the Russian hoax is a counter intelligence investigation.

The FBI started investigating Russia's attack on our country well before President Trump was put into office, because again, they were waging a counter intelligence campaign and using campaign officials to publish that. So we have a hostile foreign power attacking the United States, and then of course, we have the issue that really upset the President, which he tweets about every day (Inaudible) with him.

That has to do with whether or not members of his campaign colluded with the Russian government, and the President (Inaudible) two issues and (Inaudible) personal insecurity, personal paranoia about whether someone on his campaign did act inappropriately above -- again (Inaudible) hostile foreign power.

VANIER: CNN National Security Analyst Samantha Vinograd. Thank you.

VINOGRAD: Thank you.

ALLEN: Well, CNN is learning about a troubling security breach. A source says a suspected Russian spy was employed for more than a decade at the U.S. embassy in Moscow before being fired last year.

VANIER: Yeah. The woman for the U.S. Secret Service before she came under suspicion, Elise Labott has more on this.

(BEGIN VIDEO CLIP)

ELISE LABOTT, GLOBAL AFFAIRS CORRESPONDENT, CNN: Senior administration officials tells CNN that a suspected Russian spy worked at the U.S. embassy in Moscow and has since been fired. The Russian woman was hired locally by the U.S. embassy in Moscow over a decade ago to work for the Secret Service. She came under suspicion two years ago by the State Department's regional security officers during a routine security review.

The officers found the woman was having regular but unauthorized meetings with the FBS, a key Russian security agency. In Russia, there's already sensitivity that Foreign Service national that are called are talking to the Russian government officials as part of their job. But in this woman's case, she seemed to be having a lot more meetings and conversations, and passing out a lot more information than was necessary.

Now the regional security officer alerted the embassy in January 2017, and the woman was dismissed several months later over the summer after catching her red-handed. Officials say they knew this was happening. It was just a process of playing it out and giving her specific information that they saw her give back to the FSB.

The story was first reported by the Guardian Newspaper. Officials tell CNN the woman did not have access to highly classified information, and national security was not compromised. The Secret Service also downplayed the woman's role in a statement, saying quote, her duties as a foreign service national were limited to translation, interpretation, cultural guidance liaison, and administrative support.

At no time in any U.S. Secret Service office, the statement said a Foreign Service national has been provided or placed in a position to obtain national security information. Still, this woman did have access to the Secret Service intranet and email systems and security clearance before she was fired. The U.S. could not arrest her because she was a Russian citizen, but U.S. officials say that when the Russian government learned she was caught, they were understandably unhappy. Elise Labott, CNN, Washington.

(END VIDEO CLIP)

ALLEN: Iran flexes its military muscles in the Persian Gulf, next here, why (Inaudible) like these are concerning U.S. officials right now.

VANIER: Plus, we'll explain the split in South Korea, between those who are angry and those who are pleased with the U.S. President. Stay with us.

(COMMERCIAL BREAK)

[02:15:00] ALLEN: Iran is now carrying out a military exercise in the Persian Gulf, and U.S. officials expect it to be a major show of force.

VANIER: But these drills are happening at an unusual time. Our International Diplomatic Editor Nic Robertson explains why.

(BEGIN VIDEO CLIP)

NIC ROBERTSON, INTERNATIONAL DIPLOMATIC EDITOR, CNN: So what we're hearing from the Pentagon officials there with direct knowledge say that they believe that the Iranian revolutionary guard called the IRGC is mounting a massive military -- naval military exercise right now in the Persian Gulf to streets (Inaudible) narrow strategic waterway to the gulf countries and Iran where 20 percent of the world's oil passes through and the gulf of Oman as well.

They say that dozens of small boats are involved in this naval exercise. They're not sure if why this naval exercise is taking place or what the implications. The Iranians aren't saying anything about it. We're not hearing from other gulf countries about it. But it does seem to come at a time of rising diplomatic tension.

The war of words between Tehran and Washington, President Trump last week tweeting to Iranian officials in all caps, don't start essentially a war because there will be severe, serious consequences. The first raft of sanctions relief on Iran are subsequent to President Trump from pulling out of the JCP way the Iran nuclear deal is due to come into effect on August 6th, in just a couple of days from now.

So the tensions are rising, Iranian officials, the head of the IRGC at the beginning of July, the President of Iran, the supreme leader of Iran have all said that if Iran cannot explore its oil product out through the straits of Hormuz, then nobody will. So there are clean concerns for the United States right now and others.

Is Iran preparing to take action? Is that what these military exercises are (Inaudible) that's what all the concern is right now. Nic Robertson, CNN, Abu Dhabi.

(END VIDEO CLIP)

VANIER: OK, the latest on U.S.-North Korea relations. The White House has confirmed President Trump presence received a letter this week from North Korean leader Kim Jong-Un.

ALLEN: The U.S. President tweeted his thanks to Kim for the letter and said that he would quote, see him soon. White House Press Secretary Sarah Huckabee Sanders confirmed the correspondence and says Mr. Trump responded with a letter of his own.

(BEGIN VIDEO CLIP)

SANDERS: He did receive a letter I believe. He received on August 1st. There is not a second meeting that is currently locked in or finalized, certainly open to that discussion, but there isn't a meeting planned. We have responded to Chairman Kim's letter, the President has, and that letter will be delivered shortly.

(END VIDEO CLIP)

ALLEN: As Donald Trump tries to ease tensions on the Korean peninsula, his effort has drawn mixed reviews in the south.

VANIER: Some South Koreans will (Inaudible) views on North Korea are impressed by his approach to Kim Jong-Un, but as CNN's Paula Hancocks reports, others are troubled.

(BEGIN VIDEO CLIP)

PAULA HANCOCKS, CORRESPONDENT, CNN: These South Koreans love the U.S. President. (Inaudible) generally more conservative, they show their support for Donald Trump on a regular basis. Others disagree. Mr. Trump's talk last year of fire and fury, of totally destroying North Korea, made President sitting on the front line of a potential conflict nervous. But Trumps' tough talk on Pyongyang to South Korea's parliament last

November impressed many across the political divide.

[02:20:11] TRUMP: North Korea is not the paradise your grandfather envisioned. It is a hell that no person deserves.

HANCOCKS: Words that won him the respect of (Inaudible) who escaped North Korea 15 years ago. The human rights activist traveled to the White House last year to meet President Trump.

UNIDENTIFIED MALE: At that moment, he said, I had great hopes and expectations. It won't be long before to (Inaudible) to my hometown in the north. I honestly believed it.

HANCOCKS: Then came the Singapore summit. Standing next to Kim Jong- Un June 12th, Trumps' words went from little rocket man to this.

TRUMP: (Inaudible)

HANCOCKS: Words that devastated Chung.

UNIDENTIFIED MALE: I completely lost my faith in him, he says. Trump even said things like Kim Jong-Un loves his people, (Inaudible) after I heard that. Anyone who is strongly against the North Korean regime no longer supports Trump. President Moon Jae-In and his cabinet have given the U.S. President the (Inaudible) of the credits for improving relations and lessening tensions.

UNIDENTIFIED FEMALE: Clearly, credit goes to President Trump. He's been determined to come to grips with it from day one.

HANCOCKS: Appreciation that spreads partly to the streets of Seoul. This woman says I think Trump's clever. At first, I rejected him. I thought he was a President that was bouncing all over the place. But when I saw Kim and Trump at the summit, I saw Trump in a different light. Even some who are skeptical about peace talks working have this nagging curiosity, as to whether unorthodox approach to Pyongyang may actually make a difference in the end.

They may not support Trump, but they're not ready to write him off just yet. Paula Hancocks, CNN, Seoul.

(END VIDEO CLIP)

ALLEN: Meantime, U.S. Secretary of State Mike Pompeo is at the ASEAN Summit in Singapore. And just a little while ago, he met with Turkey's Foreign Affairs Minister as tensions continue to rise between (Inaudible) and Washington. For more about it, let's go our Jomana Karadsheh. She is live in Istanbul for us. Hello to you, Jomana. What's the source of the conflict?

JOMANA KARADSHEH, CORRESPONDENT, CNN: Well, to update Natalie on that meeting. We've heard from a State Department spokeswoman Heather Nauert saying that they had a constructive conversation. They've discussed a number of issues. And they agreed to continue this dialogue perhaps a good sign. Maybe their de-escalation ahead, maybe it seems Turkey is giving dialogue a chance after they had (Inaudible) a reciprocal response following the U.S. announcement of sanctions.

And you know as you mentioned, this is a conflict that has been going on for quite some time. These two countries are allies. They are close, but they a long list of grievances and differences between them. And you know for the United States, U.S. lawmakers for months now have been threatening to sanction Turkey.

One of the major issues with them has been the fact that this NATO country was planning to purchase a missile defense system. They asked 400 from Russia, something that U.S. lawmaker's say unacceptable, and then for Turkey, it's a long list of issues, but the major issue for Turkey and its government is the United States' support of Kurdish militia, the YPG in Syria.

For Turkey, they say this is a national security threat and a potential threat, and that is unacceptable for an ally to be supporting these groups in Turkey. But in recent weeks, Natalie, we've seen talks, both countries been putting together trying to resolve their issues and their differences, and there was this mood and atmosphere of optimism amongst them that they are reaching agreements on some of these differences.

And so on July 18th, when the trial of an American pastor who has been detained there since 2016, Andrew Brunson resumes. There was some speculation that we could see him walk free on that date. That didn't happen. (Inaudible) by Turkish court into house arrest and that does not seem to thin enough for U.S. official, including the President and Vice President Mike Pence, who has been calling.

Some critics of the Trump administration say, why are they just focusing on this one individual, when you have other dual citizens who are behind bars here, when you have a number of Turkish nationals who worked for the U.S. mission who have been also behind bars since 2015. Some say maybe some domestic U.S. politics at play because we are talking about an evangelical Christian here, an important part of President Trump's and Vice President Pence's base in the United States, Natalie.

[02:25:12] ALLEN: Yes. The conflict has many tentacles doesn't it, Jomana Karadsheh for us there live in Istanbul. Thanks so much.

VANIER: Is it morally right to execute someone, a few ethical questions incite a more passionate debate than that one. And Pope Francis has officially changed the Catholic Church's opinion on this matter. He declared that the death penalty is inadmissible and also a consensus. CNN's Vatican Correspondent Delia Gallagher has more.

(BEGIN VIDEO CLIP)

DELIA GALLAGHER, VATICAN CORRESPONDENT, CNN: The Vatican's change in teaching on the death penalty has been some time coming. Pope John Paul II and Benedict the 16th spoke out against the death penalty, but Pope Francis has officially changed his on the book. I just spoke to Vatican spokesman Greg (Inaudible) to explain why.

UNIDENTIFIED MALE: The key point here is really human dignity. The Pope is saying that no matter how grievous the crime, someone never loses his or her human dignity.

GALLAGHER: Pope Francis has also supported eliminating the death penalty because of the possibility of error in the judicial system.

UNIDENTIFIED MALE: One of the rationales for the death penalty in Catholic teaching historically was to protect society. Obviously, the state still has that obligation. That's not being taken away here. But they can do that in other ways.

GALLAGHER: Well, in the United States, the death penalty is still legal. Almost all countries in Europe have abolished it. Indeed, eliminating capital punishment is a precondition for entrance into the European Union. Of course, the Pope's decree is not binding on any country, but it is a sign that support for capital punishment is becoming less and less acceptable, Delia Gallagher, CNN, Rome.

(END VIDEO CLIP)

VANIER: When we come back, the bombshell testimony in the trial of former Trump campaign chairman Paul Manafort, and a look at the lavish lifestyle he allegedly enjoyed.

ALLEN: Plus, in Europe, makes (Inaudible) hottest day in history. We'll tell you where record-smashing temperatures are (Inaudible).

(COMMERCIAL BREAK)

VANIER: And welcome back. I'm Cyril Vanier.

ALLEN: I'm Natalie Allen. Let's update you in our top stories this hour here at CNN. Emmerson Mnangagwa has been declared the official winner of Zimbabwe's Presidential election. The opposition continues to allege the outcome was rigged. But the military has prevented public protests after six people (Inaudible) post election violence (Inaudible).

VANIER: U.S. intelligence and security chiefs say Russia is still trying to interfere in the U.S. political system.

[02:30:03] Top officials share their concerns of the White House briefing Thursday. The head of National Intelligence says President Donald Trump specifically directed him to make the issue a top priority. At a rally a few hours later, Mr. Trump complained of being hindered by, "A Russian hoax."

NATALIE ALLEN, CNN INTERNATIONAL ANCHOR: Iran is carrying out a military exercise in the Persian Gulf and U.S. officials expected to be a major show of force. Their concern, Iran may try to demonstrate that it can shut down the Strait of Hormuz. The operation comes just days before the U.S. reimposes sanctions on Tehran.

VANIER: Special Counsel Robert Mueller is pressing to interview Russian pop star Emin Agalarov who helped setup the now infamous 2016 Trump Tower meeting.

ALLEN: Mueller would like to also speak with Agalarov's father, Aras, a Russian oligarch. The Agalarovs helped President Trump bring the Miss Universe pageant to Moscow in 2013. The Agalarov's attorney says he cannot predict whether Mueller will get to meet with the man and that talk to setup an interview happen ongoing. We turn now to the tax evasion and money laundering trial of Paul Manafort.

VANIER: In day three of testimony, prosecutors highlighted the former Trump campaign chair's lavish lifestyle and it gave jurors an earful about fake business records that he allegedly filed. Our Jessica Schneider reports.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN INTERNATIONAL CORRESPONDENT: Paul Manafort's dire financial situation outline for the jury. The prosecution dropping the bombshell that Manafort was essentially broke by 2016 after spending millions of dollars maintaining his luxurious lifestyle. Attorney Greg Andres says that after Manafort's Ukraine consulting money dried up, he turned to bank fraud lying to banks to secure loans for his cash flow.

Manafort's business and personal estate bookkeeper Heather Washkuhn spent hours on the stand detailing how Manafort's lobbying firm was financially strapped after his clients in Ukraine were driven out of office. The retailers and other vendors who are taking the stand say they often didn't recognize the company names Manafort used to make payments for the services to their companies, but the amounts matched the invoices they sent.

Prosecutors are presenting these wire transfers from offshore bank accounts to prove their claims of tax and bank fraud. Paul Manafort is seemed calm and stayed silent through the three days of testimony, but the question lingers, will he testify? Defense attorneys didn't offer any clues when the Judge T. S. Ellis raised the issue stressing he will not be penalized for the right to remain silent. But Judge Ellis added, if Manafort does testify it will be more likely the judge will allow evidence that the IRS never audited Manafort something his attorneys want to use to bolster his defense.

One person we now know will take the stand Rick Gates after some question Wednesday, prosecutors conceded they will call Gates who some are calling their star witness, and it could be as soon as tomorrow or Monday. Gates was Manafort's deputy during the campaign and was his longtime associate. He has pleaded guilty to two counts in D.C. and is cooperating with the special counsel. The defense said it intends to pin the blame on Gates saying he embezzled millions from Manafort.

But the prosecution is going to great lengths to show Manafort alone was the one spending the millions. They've submitted reams of receipts documenting the hundreds of thousands of dollars he spent on high-end suits and clothing. In April 2012, Manafort paid $18,500 for a python jacket. Just a few months earlier, it was $9500 on an ostrich vest to apparently complement the ostrich jacket. He later paid $15,000 for.

There are also photos of the jackets and suits he paid a pretty penny for from the store that builds itself the most expensive in the world, Bijan. One blue jacket from Bijan, $32,800. Manafort also kept his seven homes in pristine condition. His landscaper testified that Manafort spent about $450,000 over five years for his Hamptons home commissioning him to care for the hundreds of flowers. Plus, one of the biggest personal ponds in the Hamptons.

And Manafort kept it high-tech. He paid more than $2.2 million in electronics including $10,000 on a karaoke system in 2010. And prosecutors have also presented these vendors with fake invoices that Paul Manafort may have created to look like it came from them to cover for the money he moved out of his overseas bank accounts.

(END VIDEOTAPE)

SCHNEIDER: Prosecutors are now in the middle of questioning Paul Manafort's accountant who says he never knew about Paul Manafort's foreign bank accounts. And prosecutors are whipping through these witnesses and they expect they could wrap up their case next week. Jessica Schneider, CNN Washington.

VANIER: Record heat waves are sweeping around the globe. Portugal and Spain are on high alert for wildfires as the European heat record may soon be broken there.

[02:35:04] ALLEN: We'll talk more about that in a moment. Also, extreme temperatures are back in Japan. The record heat killed 119 people there in the month of July. That's on top of a deadly typhoon and flooding from torrential rain making it the deadliest summer there in a decade. Our meteorologist Ivan Cabrera joins us with more about the heat.

IVAN CABRERA, CNN INTERNATIONAL CORRESPONDENT: Heat and a lot of those fatalities sometimes are folks that need a little bit help. So check in on your neighbors, check in on seniors, things like that because some areas just don't have the air conditioning and when we get these very warm nights and then warm days and then warm nights, it's hard to keep cool out there. Let's talk about what a summer heat wave we have going on here -- as we've been mentioning.

By the way, yes, 2017, hottest on record as well. 2016, 2015, you know how it goes. Here, I'll show you the chart. But look at this. This is the number we've been following here. I don't think we're going to quite make 48. If we did, it would tie the all-time record for the entire continent of Europe that was set back in 1977 in Athens where they hit 48 degrees. My goodness, can you imagine that? Well, you don't have to.

We got very close to it here across Spain and into Portugal where temperatures on Thursday (INAUDIBLE) lower 40, so I think we'll do then again for today and then again heading into the weekend, not only with a warm temperatures. But look at this, this is on top of lack of rainfall here across Europe. This is for 2018. Some areas were running a good third below where we should be for this time of year. We need a lot more rain.

Of course, the crowd covering the rainfall would not allow temperatures to surge where they are. But no clouds, no rain, it's full sun right through the weekend with temperatures in the upper 30s to lower 40s. We do have finally a pattern change. We're going to have to wait on next week. We're talking Tuesday and into Wednesday. So far this year we're going to go to the global daily records, not the 2800 that we have obviously here. We need all week for that, 41.1 Japan, that was the all-time record.

They said that in Seoul as well. We have the devastating and a deadly heat wave of course in May of 2018. Look at Europe there, third longest heat wave. That is specifically to the U.K. Scandinavia as well. Oman with their highest low temperature, right? So the overnight temperature was just abysmal and that and incredibly hot. 90 fatalities. We can't forget that of course with those dozens of records broken in Canada. And again, we're not talking about last period of the year before.

That was just in 2018. Quickly showing you this chart. This is the amount of carbon dioxide in our atmosphere. Yes, there are patterns. They go up and down and up and down. But in the last 800,000 years, we have not recorded the highest CO2 numbers -- well, that we have had here. So we're talking about, yes, patterns that come and go. But since the industrial revolution, we have been pumping so much CO2 up there that the numbers there now are astronomical.

And that of course traps the heat, causes the heat waves that we are currently and have been experiencing for years.

ALLEN: Amazing. And there even going to have to like remanufacture airplanes I was reading to be able to fly in such intense heat --

(CROSSTALK)

CABRERA: We're introducing new types of coral -- the barrier reef that can sustain the warm water temperatures there. So we're trying to do our best to do. But it's just going to take a global effort here. No question.

ALLEN: All right. Ivan --

(CROSSTALK)

CABRERA: Good to see you.

VANIER: Ivan, thank you very much. We're going to take a short break. When we come back, the Google reentering the Chinese market means a hard climb over the Great Firewall. But there are new reports that they're gearing up for the big hike. That's next.

(COMMERCIAL BREAK)

[02:41:10] ALLEN: Well, Google is reportedly making moves to get back into China. It is a market with hundreds of millions of internet users. A huge base of online shoppers and an enormous obstacle, the Great Firewall.

VANIER: If Google returns to China, it would have to comply with the governments heavy censorship laws though. Now, for the record, China's state-owned security journal says that the reports of Google's return are simply not true and Google's parent company Alphabet won't comment for the moment. But critics and human rights groups are already accusing Google of bending to China's will. Let's bring in Rob Koepp. He's the director of the economist -- the Economist Corporate Network in Beijing.

Rob, so we're operating slightly in this -- in this gray area because just in the last hour and a half we got this denial from China that Google was indeed going to come back. So we're going to have to put that as a caveat to the conversation. Still though, the report exist that Google wants to go back to China eight years after deciding -- after leaving China because it didn't want to be a part of government censorship. So is this a victory if it happens? Is this a victory of business over principle? ROB KOEPP, DIRECTOR, ECONOMIST CORPORATE NETWORK: Well, first of all,

thanks for -- thank you for having me on, Cyril. And well, I guess it's a matter of perspective. I mean from a very basic principle, Google is a private corporation. They are adjusting to national law. So I think they internally at least of the management level and certainly from the perspective that the Chinese government they're just doing what they should do.

But, yes, they obviously are also accepting a factor they rejected eight years ago which was to censor search results. So they are making an adjustment that way that's undeniable. If as you said this actually comes to past.

VANIER: I mean their motto used to be -- what was it? Do no evil?

KOEPP: Right. Don't be evil and that --

(CROSSTALK)

VANIER: Exactly. Don't be evil. I mean this is in some sense is against Google's DNA, freedom of information, liberal principles.

KOEPP: But in fairness to Google, they later modified that principle to a positive affirmation, do the right thing. So a little bit more broad. I guess that's a matter of perspective. Again, certainly, myself also being from a media organization like yours CNN, we are against censorship. We are for freedom of expression. But as you also mentioned in the intro it's a huge by the way not just huge, it's the world's largest internet market --

(CROSSTALK)

VANIER: -- how big? How big? I mean for Google it must have been very hard to resist the temptation to go back into that market?

KOEPP: So you're looking at in terms of just users, 800 million and it can grow, you know, sometimes people talked about, well, they're one for -- 1.4 billion people in China. But users you have a computer, you have a smartphone. You maybe have two chips in a smartphone. It can be larger than the population. It could be over 1.4 billion users ultimately and I'm sure Google is calculating that very closely as in the American enterprise would when they look at the market potential.

So does that mean by the way that it's a sort of a slam dunk decision? They absolutely need from a business standpoint to go back to that market or do you think there's also a flipside to that which is they could suffer in terms of image?

KOEPP: Well, certainly there's the downside image potential. It's very hard to talk about it absolutely, you know, Google is one of the major tech powerhouses of the world certainly of Silicon Valley and it isn't active in China the way it used to be. So it doesn't show it's an imperative in that sense. But from a pratical business perspective, you think they definitely would want to get in there at the same time again we don't know if for sure China will let them in.

So that -- Facebook recently announced by the way that it was going in and then later that was upended by a national authority, local authorities that approve them and then national authorities said no.

[02:45:02] VANIER: So, here is what cross my mind when I saw the Google was trying to go back to China. We know especially, with all of the conversation about China's trade practices at the moment.

China is notorious. Notorious for appropriating all the tech from the U.S. companies that do business there. Do you think that could be the play for China? In other the words that they want Google there, so they can learn how to make their own Google over time.

KOEPP: Well, let me, first of all, say, I don't think it's quite fair to say that China takes all the technology from American companies. It certainly does have a policy that if that forces, at least, encourages technology transfer. And in some cases, it actually is documented to be more of a forced transfer.

But I don't know in the case of Google, and the way it's set up in the way it also very well protects its technology if that isn't already not so much an issue. I think what China is probably looking at they've had a lot of internal and domestic complaints about how the current search engines are not very effective.

There's been a lot of scandals around that and China will benefit as an economy. And the population will benefit if there's more competition and better quality search engines. And Google definitely has a world-class search engine.

VANIER: All right, Rob Koepp, thank you very much. And the rules are -- and I should explain that earlier, according to the reports that we got today, if Google does indeed go back in China and start operating there again, they would be under -- operating under Chinese government censorship rules which means you cannot look for dissent and political opponent.

KOEPP: That's right.

VANIER: Obviously, no mention -- yes.

(CROSSTALK) KOEPP: Human rights, information rights.

VANIER: Human rights, Tiananmen Square, all those things would be totally non-existent on the Chinese version of Google.

KOEPP: Right. That's right.

VANIER: Thank you very much for joining us today.

KOEPP: Thank you.

ALLEN: Speaking of China, one of Germany's most famous car makers is caught in the crosshairs of the trade war between the U.S. and China. And that's a problem because BMW has its largest plant in the heart of Trump country, South Carolina. Here is our Martin Savidge with that.

(BEGIN VIDEOTAPE)

MARTIN SAVIDGE, CNN ANCHOR: It may not look like it, but Spartanburg, South Carolina is a war zone. A trade war, thanks to the president, most folks here voted for. Spartanburg is home to the largest BMW plant in the world. Last year, they made more than 370,000 luxury SUVs, employing10, 000 people, pumping billions into the state's economy.

Is it safe to say how well BMW does is how well Spartanburg, County does?

JESSE JONES, RESIDENT, SPARTANBURG COUNTY: You might to say that because there's a lot of industry in Spartanburg County that are directly connected to BMW.

MARILYN SAUCEDO, RESIDENT, SPARTANBURG COUNTY: Growth, jobs, and I know that that's brought in a lot of families into the area. Brings money into the area.

SAVIDGE: Spartanburg's also deep-red. Meaning, in 2016, the county voted 63 percent for Donald Trump. But President Trump has threatened to place tariffs on imported BMW vehicles and parts that could make BMWs made and sold in America a lot more expensive.

The company is already feeling the impact of Trump's trade war with China. Over 80,000 Spartanburg made BMW SUVs are sold in China every year. Now, China is striking back placing tariffs on the American- made vehicles. It's an economic double whammy of Trump's making which BMW says could have negative effects on investment and employment in the United States.

In other words, BMW might have to scale back production, and lay off workers in Spartanburg.

DAVID BRITT, VICE CHAIRMAN, SPARTANBURG COUNTY COUNCIL: I feel like a help birth BMW.

SAVIDGE: David Britt is a Spartanburg County commissioner and a Trump backer. How concerned are you now about talk of tariffs and trade war?

BRITT: I'm extremely concern because the impact -- the ripple effect is -- it goes beyond BMW in the automotive industry.

SAVIDGE: Britt is one of the few Republican politicians in the country willing to tell Trump, he's wrong.

BRITT: These tariffs could put the foot on the throat of growth, and stop it. We don't need that.

SAVIDGE: Other Trump supporters we talked to here, say they support the president's policies. But some ate concern none wanted to talk on camera. And they're not the only ones reluctant to speak out.

Many South Carolina companies are also concerned but fear if they criticize the president's policies, they'll become a target of his Twitter rap, much like what happened to Harley Davidson.

TED PITTS, CHIEF EXECUTIVE OFFICER, CHAMBER OF COMMERCE: The president has shown that you're better off working with his administration on issues to help them understand it, and allow them to get to the right answer.

SAVIDGE: Ironically, Trump's tough talk on trade was part of his appeal to voters in South Carolina. Now, there's growing concern Trump's trade war is about to backfire on them. And possibly, eventually, on him.

PITTS: I don't see this issue changing voter's minds. Now, if you look down the road and their concerns.

(END VIDEOTAPE)

ALLEN: Again, Martin Savidge reporting for us there from Spartanburg, South Carolina. We'll be right back with more news.

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[02:51:39] VANIER: Back when Steve Jobs was building his first computer in his parent's garage, he probably never imagined no one did at the time that he was also building the richest company in U.S. history.

ALLEN: But that's exactly what happened on Thursday. Apple stock hit 207 dollars a share, making Apple the first U.S. Company ever to be worth $1 trillion. To put Apple's trillion dollar valuation in context, the company is now worth almost as much as the entire economy of Australia.

VANIER: That's the part that got me.

ALLEN: And more than that of the Netherlands.

VANIER: Now, Apple is worth slightly less -- only slightly less than America's outstanding debt to China and a bit more than global steel industry each year.

ALLEN: Well, It was not easy coming up with the gadgets and devices many of us now take for granted. Apple had plenty of setbacks and failures along the way.

VANIER: To stay competitive, the company had to constantly reinvent itself. CNN's Zain Asher, explains.

(BEGIN VIDEOTAPE)

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Decades after its groundbreaking Macintosh commercial 1984, Apple smashing barriers, again. The company's 38-year-old journey from fledgling IPO to $1 trillion corporate colossus is the stuff of legend. And it never could have happened without Steve Jobs, whose vision for Apple got it where it is today.

WALTER ISAACSON, AUTHOR, STEVE JOBS: It takes Apple during the 10 years beginning in 2000, in this whole new director reinvent some music industry reinvent the telephone industry.

STEVE JOBS, CO-FOUNDER, APPLE INCORPORATED: Every once in a while, a revolutionary product comes along that changes everything.

ISAACSON: He discovers, now, we have to think different again. And he says, we're going to do devices, devices that will make your computer sort of the hub of your digital lifestyle.

ASHER: Job's run of revolutionary devices began with the iPod in 2001.

JOBS: And we are calling it, iPhone.

ASHER: But it was the iPhone that can be change everything. Released in 2007 when Apple's market cap was just $100 billion. The iPad followed three years later when the street valued Apple at around 300 billion. Apple's market cap has more than doubled under Tim Cook, CEO since 2011.

Cook has launched only one major new hardware line, the Apple Watch. But his commitment to strengthening the Apple ecosystem with services like Apple pay, cloud computing, and music streaming, guarantees the steady flow of revenue.

JOBS: iPhone is the most loved phone in the world.

ASHER: Making no mistake, however, it is the iPhone that will be key to Apple's fortunes well into the future.

Whether it be their venture into entertainment or some of the other things they're doing, obviously, those are additive to their business. But the business is driven by the iPhone. To get people to pay a thousand dollars for something that fits in your pocket or (INAUDIBLE) is obsolete in a year and a half or two years. That's a remarkable business model.

ASHER: A business model that has been smashingly profitable for Apple investors. Zain Asher, CNNMoney, New York.

(END VIDEOTAPE)

ALLEN: Well, hard to believe, but 20 years ago, tech experts were predicting the Apple brands glory days were over, who were they get that wrong.

VANIER: Business week remembers. And today tweeted out this cover from 1996 -- was that say? The fall -- The Fall of an American Icon. Well, there you go, poking fun of itself with LOL.

[02:55:11] ALLEN: That wasn't accurate news, was it? Would you spend 15 -- I want to ask you this. Would you spend $15,000 on an ostrich jacket?

VANIER: It's like an anchor in style, why not?

ALLEN: Why not?

VANIER: It turns out former Trump campaign manager Paul Manafort, did just that. Here's our Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT: The price of an ostrich jacket doesn't really bite till you see it on the invoice, 15,000 bucks. And you're probably imagining this.

ALISYN CAMEROTA, CNN ANCHOR: But I would imagine like there's feathers on it somewhere.

MOOS: Red One, tweet, Manafort's $15,000 ostrich jacket probably look like A. But I'm going to imagine B anyway. Even Kimmel fell for the feathers.

JIMMY KIMMEL, HOST, JIMMY KIMMEL LIVE!, ABC: That should be what he has to wear in jail, just sitting in a cell dressed up like Big Bird, wait for the trial to start.

MOOS: But the jacket actually leather, not feather. You know it's ostrich from the bumps that were follicles where the feathers used to be. Manafort also bought an ostrich vest for $9,500. Something even Mr. Burns in the Simpsons didn't possess.

Ostriches get no respect, and neither does an ostrich jacket. "It is something you need in order to work for Trump. It allows you to stick your head in the sand." But the leather is considered luxury. It ends up at $35,000 Birkin Bags by Hermes.

You know who else wants the ostrich as a status symbol? J. Lo in her latest music video about money. But ostrich wasn't even Manafort's most expensive exotic skin. That would be his $18,500 python jacket.

Then, there was the plebeian plaid so similar to one worn by Trump ex- lawyer Michael Cohen, that someone tweeted, "Did Manafort loan, Cohen, his jacket? Still, it's the ostrich jacket that is everyone craning their necks.

SETH MEYERS, HOST, LATE NIGHT WITH SETH MEYERS, NBC: That's right, he had a coat made from an ostrich which explains the state's first witness.

MOOS: We haven't seen Manafort in it. Yet, someone noted this looks better wearing it. In the eyes of the ostrich, Manafort is already guilty. Jeanne Moos, CNN.

UNIDENTIFIED MALE: Does that make him guilty?

MOOS: New York.

(END VIDEOTAPE)

VANIER: This day three of the trials. What are we going to find out?

ALLEN: Poor ostriches.

VANIER: All right, thanks for watching. I'm Cyril Vanier.

ALLEN: I'm Natalie Allen. Don't go anywhere, please. We'll be right back with another hour of CNN NEWSROOM.

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