Return to Transcripts main page


Rick Gates Testifying in Paul Manafort Case; California Wildfires; Giuliani to WaPo: "Real Reluctance" About Obstruction Questions. Aired 4-4:30p ET

Aired August 7, 2018 - 16:00   ET



JAKE TAPPER, CNN ANCHOR: So, Rick Gates was stealing from Paul Manafort, as Paul Manafort was allegedly stealing from taxpayers. But President Trump only hire the best people. Cool.

THE LEAD starts right now.

Describing a sleazy scheme, socking away cash overseas from those friendly to the Russian regime, as two of President Trump's top campaign aides clash in court.

And as one senior Trump campaign official confesses to crimes on the stand, President Trump's lawyers haggle with Robert Mueller over what President Trump will not talk about face to face. The latest today on the talks over the big talk.

Plus, it is now the largest wildfire in the history of California. And it may continue to burn for the rest of the month. The battle to save lives, as President Trump sends a tweet about the fire that baffles even his own staff about the cause of it all.

Good afternoon, everyone. Welcome to THE LEAD. I'm Jake Tapper.

We begin this afternoon with breaking news in our politics lead.

Rick Gates, the former number two on the Trump campaign, is getting grilled right now about his plea deal by defense attorneys for former Trump campaign chair Paul Manafort. Gates today describing in vivid detail how he says Manafort engineered an elaborate scheme to avoid paying taxes on millions earned from lobbying for pro-Russian politicians in Ukraine.

And prosecutors say Manafort's own e-mails show him directing the money to multiple offshore accounts. Now, although conspiring with Russia on the 2016 election is not officially on the docket, the subtext of it is looming over the trial. Gates says that Manafort gave some control over a bank account in Cyprus to a man named Konstantin Kilimnik.

He's a suspected Russian intelligence officer who earlier this summer was also indicted as part of the Mueller investigation. And Manafort's own accountant says that Russian billionaire Oleg Deripaska loaned Manafort $10 million back in 2006. That's a loan that was apparently never repaid.

CNN's Kara Scannell is outside the courtroom for us right now in Northern Virginia.

And, Kara, Gates is currently being cross-examined by the defense, and already there's been an explosive moment involving Manafort and money and an alleged affair?


About 45 minutes into cross-examination here, and Manafort's attorney has come out swinging. He's bringing up discussions about how Gates had stolen money from Manafort and dropped a bombshell, saying that it was really to fund the secret life of Rick Gates to pay for a flat in London and for European trips that Gates was allegedly having with his mistress.

Now, Gates admitted that he did have another relationship about 10 years ago. But now the two are sparring over what the source of that funding was. Gates is maintaining that it came from his bonus pool or from his personal account, but Manafort's attorney and saying, no, this money came from the Cyprus account, it was stolen from Manafort.

And they're in a bit of a back and forth on that. Another interesting development was that Manafort's attorney alleged that Gates had stolen money from the inauguration fund by saying that he had filed for personal expenses that were paid by the inauguration. Now, they haven't really fleshed that out. So we don't know if he has anything to back that up.

He threw that out there as another way that -- to try to discredit Gates, to try to attack his credibility, because earlier today, he was methodically going through how he was part of this team and how he helped Manafort pull it off.

And on cross-examination, Manafort's attorney is hammering him with does he remember telling the special counsel's office this or that in meetings. And Gates is saying repeatedly he doesn't recall, Jake.

TAPPER: All right, Kara Scannell, thank you so much.

On the stand today, Gates laid out Paul Manafort's many money troubles, saying that Manafort was broke when he joined the Trump campaign in 2016.

CNN's Jim Sciutto picks up our coverage.


JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT (voice-over): Tonight, star witness Rick Gates back on the stand. Gates detailing how broke Paul Manafort was when he joined the Trump campaign in March 2016 and then worked for no salary.

Gates testifying that Manafort's consulting firm had no clients then and they were at the time trying to secure another political consulting contract in Ukraine, but had not been able to.

In a 2015 e-mail exchange, Manafort was clearly frustrated. "WTF," Manafort wrote to Gates. "How could I be blindsided like this?" Manafort said, this after learning that taxes were much higher than he had anticipated.

Gates admitted that he also supplied false information to banks in order to help Manafort secure bank loans. Until then, according to Gates, Manafort had been making more than $5 million up until 2012 for consulting work for a Ukrainian billionaire.

Gates went into detail about how shell companies were used to move money into hidden accounts in Cyprus. In one instance, according to Gates, a payment supported lobbying in the United States.


Gates stated that Manafort reported some of the payments to U.S. tax officials as loans, though they were in fact income, adding that Manafort was -- quote -- "trying to decrease his taxable income."

Prosecutors demonstrated that Manafort directed these activities through e-mails. There were hundreds of these, Gates said in court, adding -- quote -- "Typical practice was Mr. Manafort would send me a list of wire requests."

Gates admitted that he used information provided by Manafort to create invoices for fake amounts of money for wire transfers, but the money never actually went to the vendors. Instead, it went to the banks.

The purpose of this, according to Gates, so that the wire transfers would not be recorded on U.S. business records. Nonetheless, on Monday, the prosecutors elicited testimony from Mr. Gates and from one of Mr. Manafort's accountants that tied Manafort more closely to Russia.

The accountant, Cindy LaPorta, testified that, in 2006, Mr. Manafort received a $10 million loan from Oleg Deripaska, a Russian oligarch close to President Vladimir Putin. Ms. LaPorta said she saw no evidence the loan was ever repaid.


TAPPER: And our thanks to Jim Sciutto for that report.

Let's talk about this with our experts.

Michael Zeldin, let me start with you.

The case is not directly about the 2016 election and any alleged Russian conspiracy with any Americans, and, in fact, the prosecution has said they're not going to introduce any evidence about that.

And yet we keep hearing about these politicians in Russia that have ties to Putin. There's Deripaska. There the other, Kilimnik, who is somebody who is alleged to be Russian intelligence. I know that the judge keeps slapping the prosecutor for introducing

it. What do you think is going on there? Are they trying to introduce this on purpose?

MICHAEL ZELDIN, CNN LEGAL ANALYST: I don't think they're really trying to directly introduce it as evidence.

But it's relevant to understand how Manafort was behaving, who he owed money to, who he was the subordinate as an intelligence matter, because I think he joined the campaign in part because of this debt they had to the Russians as a way to re-ingratiate himself with them.

So this stuff is on the fringes of what they're talking about, but the heart of their case is tax fraud and bank fraud, and bank fraud conspiracy.

TAPPER: What do you think of all this? The fact that they keep introducing all this stuff that makes it sure sound like Paul Manafort had a lot of times to and owed a lot to people with strong ties to Vladimir Putin?

JOSH HOLMES, REPUBLICAN STRATEGIST: Yes, I mean, in a strange way, I mean, the topic itself is not helpful for President Trump at all. But in a strange way, this trial and what they're talking about, I think, strangely, is, because what's pretty clear is Mueller and his team have been all the way through the underwear drawer of Paul Manafort and Rick Gates.

And they know what's there and they brought a whole host of charges. And it looks like, with Gates' testimony in particular, they got a pretty locked-down case on a number of them.

What's not introduced is what you just mentioned, any sort of collusion piece that would suggest that any transfer of funds was given to Paul Manafort for any kind of collusion with the Russian government and the Trump campaign.

And that's kind of the core of what we're getting at with the entire Mueller investigation. So I think, in a weird, strange, roundabout way, it's actually kind of helpful.

TAPPER: Perry, there was a great story and interesting story in "The Washington Post."

After joining the campaign, Manafort sends a message to one of his employees in Kiev about his rising profile and new credibility because he had joined this Trump campaign which was ascendant.

And he asked -- quote -- "How do we use it to get whole with Deripaska?" to whom he owed $10 million.

Now, a Manafort spokesman told "The Post" it was simply about collecting debts. But it does show that he was trying to capitalize on his new role. What does it say to you?

PERRY BACON, FIVETHIRTYEIGHT: It says -- it says to me he was trying to use this campaign job that Trump gave him as a way to make more money, to get out of debt.

Like Josh said, this actual case and stuff what I have heard so far does not tell us much about collusion in the 2016 election. We have not gotten there yet. It looks like we're not going to get there.

That said, Trump campaign manager found guilty will not be a particularly good headline for the president. And that's looks like where we're headed.


I think that last point Perry made is really important, because obviously what is going to happen here, it seems like, is Manafort is probably headed on the road to conviction.

And that is going to lead to headlines that says Trump campaign, as you said, Trump campaign manager convicted, as well as deputy campaign manager.


TAPPER: Campaign chairman.


PSAKI: Chairman, chairman.

Now, people who may be paying attention just vaguely may see a witch- hunt or there's a trial, there's a guy named Manafort, but that's a very clear headline that will give Mueller more credibility, I think, in the public eye, maybe not among his core supporters, but certainly people wavering in the middle.


And you never know. It may also, for people who may know some things, who may have some involvement, it may also lead them to come forward with more information. So this is just the beginning.

It is important to draw a connection between Manafort and his -- what he owes, the financial ties, because this has always been about the money.

Yanukovych is a Russian puppet, was a Russian puppet.


TAPPER: That's who he worked for, yes.

PSAKI: Exactly. That's also important for people to know.

TAPPER: One of the things, Michael, that is interesting is, this is the prosecution's case that is going on right now.

The defense is going to get a whack at it as well. And one assumes that they're not going to rest, that they're going to have to present a case. Would you recommend that Paul Manafort testify? Is that something that you, as an attorney, if you worked for Paul Manafort, would want him to do? Or do you think it's just too risky?

ZELDIN: You first have to see how the cross-examination of Gates goes.

What the defense is trying to do here is say, Gates is still a liar, he pled guilty to lying, he cheated on his wife, he's a bad actor, and you can't believe anything he says. If they feel that they have established that, then maybe they don't put our defense and they argue reasonable doubt to the jury.

If it doesn't go that way, they have to make a tough decision about Manafort. Personally, I don't think Manafort can take the stand. I think he's way too vulnerable for his own cross-examination, because the documentary evidence here so overwhelmingly shows his hand in the direction of this whole scheme.

And you can't put your client at that risk. But they have really shot the moon here in not pleading to the case in the first instance. So we will have to just see, but it's depending on the Gates cross- examination.

TAPPER: One other thing that's interesting, Jen, is Manafort's accountant testified. And you had the testimony from Gates as well about Russian billionaire Oleg Deripaska loaning Manafort $10 million in 2006, which was not repaid.

We know, in 2016, Manafort, according to "The Washington Post," offered a private briefing to bear Deripaska on the state of the race. There's also this interesting stuff about this guy who was indicted by Mueller, Konstantin Kilimnik, who is supposedly with Russian intelligence, having some control over one of Manafort's accounts in Cyprus.

PSAKI: Right.

Look, it's never going to be that President Putin was having daily conference calls with Manafort, right? It's probably going to be an oligarch, somebody with money with close ties to Putin. The government doesn't work there like it does work here.

So all these ties. What's interesting here is, I think anybody could have told you that Manafort was a corrupt guy with ties to questionable governments before he was hired by the Trump team.

TAPPER: Yes, that wasn't exactly new.

PSAKI: That wasn't exactly new. Not surprising. I was joking with Josh he probably wasn't like the rising star of the Republican Party either.

So the fact that he was hired by the Trump team with these Russian ties is also something that should raise questions. You could Google. You didn't need to even do a big investigation to know that.

TAPPER: Yes, I mean, it was an odd pick when it happened.

BACON: We wrote at the time.

And the case right now is no collusion, whatever -- how we define collusion, has been proven in this case, it appears to me. But I think we're getting closer and closer to overall just the entirety of the information we now know suggests this was not a lot of innocent meetings with the Russians, but something much more substantial.

And that it may not be Donald Trump was involved, but the tweet over the weekend and other evidence suggests that we're definitely far from no collusion happened. We're now at this point of, what was the collusion, to the extent of it, and did Donald Trump about it?


HOLMES: Right?

I mean, I think we have to be careful to separate because what we're seeing right now, no question, Paul Manafort, he's a bad guy, right?

Look at Rick Gates. It seems to me like he's done a lot of bad stuff. I mean, we will see what the what the defense says. But that is not proof that Donald Trump has anything other than some questionable hiring practices during the campaign.

And I think we know that Donald Trump, if he is guilty of anything, is he's ran an unconventional campaign and an unconventional White House.

TAPPER: That's a kind word for it.



TAPPER: Unconventional. You're such a sweetheart.

Everyone, stick around.

One of the most consequential decisions by President Trump is looming right now, the advice he is getting on whether to sit for an interview with special counsel Bob Mueller.

Plus, the president's confusing response to some of the worst wildfires in the history of the state of California. Even White House aides are having a difficult time explaining it.

Stay with us.


[16:18:26] TAPPER: And we are back with a politics lead.

The latest chess move in the ongoing negotiations over a potential interview between President Trump and special counsel Robert Mueller. Trump lawyer Rudy Giuliani says he plans to send a letter to Mueller as soon as today, a response to Mueller's offer of an interview that would some questions about possible obstruction of justice. Giuliani told "The Washington Post", quote: We have a real reluctance of allowing any questions about obstruction.

CNN's Jeff Zeleny picks up our coverage of New Jersey where the president is staying at his golf resort in Bedminster.


JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): It's one of the hottest questions of the summer. Will President Trump sit for an interview with special counsel Robert Mueller?

The president's legal team is inching closer to a response, CNN has learned, but with one exception. Rudy Giuliani telling "The Washington Post": We have a real reluctance about allowing any questions about obstruction. The president's lawyers made clear their concerns about Mr. Trump sitting for a face to face interview.

RUDY GIULIANI, PRESIDENT TRUMP'S ATTORNEY: He's always been interested in testifying. It is us, meaning the team of lawyers including me, that have the most reservations about that.

ZELENY: If they have left open the possibility the president will override the objections.

JAY SEKULOW, PRESIDENT TRUMP'S ATTORNEY: The president may decide at the end to not take his lawyers' advice. I mean, that's up to him at the end of the day. He's the president. He gets to make that decision.

ZELENY: Well, the president negotiates terms for what could be the biggest interview of his life, he's also getting input from others during his working vacation at his golf resort in New Jersey, including dinner with right wing media friends and South Carolina Senator Lindsey Graham.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: This is an interesting dinner. Melania was there, which means it's a good dinner.

[16:20:02] Sean Hannity and Mark Levin and me, it was a really interesting dinner.

ZELENY: Many of the president's friends are warning against talking to Mueller.

COREY LEWANDOWSKI, FORMER TRUMP CAMPAIGN MANAGER: My political advice to the president will be not to sit down with Bob Mueller.

ZELENY: Yet the president repeatedly says he wants to.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I would love to speak. I would love to. Nobody wants to speak more than me.

(END VIDEOTAPE) ZELENY: So if the president does refuse that interview, the question is, (AUDIO GAP) subpoena the president. Of course, that would be without precedent. It could go to (AUDIO GAP) real historical (AUDIO GAP) from the Watergate era, of course. But that involved secret recordings of the White House, not a presidential testimony or interview from a special counsel here.

So, we'll see by the end of this working vacation if the answer to the question is no, will the president sit down or will he not? Jake?

TAPPER: All right. Jeff Zeleny with the president in New Jersey -- thanks so much.

Let's continue to talk about this with my experts.

Now, you said, Michael, in the last block that were you advising Paul Manafort, you would not have him testify. He's too vulnerable. What about if you're working for President Trump? Who wants to talk according to his public pronouncements, who says he hasn't done anything wrong, what would you advise him?

ZELDIN: If I'm advising him, purely as a lawyer, I'd say, don't talk to Mueller. It's too dangerous. You don't have a good enough command of the facts. You lie and therefore it's unsafe.

But (AUDIO GAP) and it's not that (AUDIO GAP) to say to a political client don't talk because it looks like you're hiding something. So, I think that what they're going to try to do is negotiate like Bill Clinton did, some type of interview on prescribed topics for prescribed period of time. Perhaps like with Reagan, some in writing and some orally. But I think that in the end they have a hard time keeping him out of a conversation with Bob Mueller.

TAPPER: Does this become politically difficult if it does go before the House of Representatives? Let's say, in this game of theoreticals, Democrats win back the House and some report -- it goes to the House and something for House members to vote on. Does it become more difficult for Republicans to defend a vote in favor of the president if the president has refused to testify or does it matter?

JEN PSAKI, CNN POLITICAL COMMENTATOR: I don't think it matters in this environment. I mean, he -- if there's no precedent, obviously, except for Watergate, as Jeff Zeleny just said (AUDIO GAP) living by a different set of rules (AUDIO GAP) what Republicans will and won't defend.

So, I don't think it matters for those purposes. I think the risk politically even with him testifying and perjuring himself and caught in lies but under oath is probably worse in the calculation.

TAPPER: One of the -- one of the -- Alan Dershowitz who has occasionally defended the president from -- on some of these charges has said that it's not per se a perjury trap, the idea that he would be lying. It's the idea that he might say something that is in contradiction to someone else's memory and then be accused of perjury. Does that hold water you think? PERRY BACON, SENIOR POLITICAL WRITER, FIVETHIRTYEIGHT: It seems

polite. The president gives speeches in which he says inaccurate things fairly regularly. The odds of him actually saying something false are pretty high.

I would question the premise here, Jake. He's been saying for a while he wants to talk. We've been talking about this since December. If Donald Trump really wanted to talk to Mueller, we've been talking about it for eight months, he would do it already. I think he might want to say I want to talk but not really want to talk.

TAPPER: But you know what's interesting, Josh, is that even some defenders of the president are starting to get a little soft I think in terms of what might have happened. I want you to take a listen to Fox News own Andrew Napolitano talking about this case and whether or not there's a potential crime that may have occurred.


JUDGE ANDREW NAPOLITANO, FOX NEWS ANALYST: If there's an agreement to receive dirt on Hillary from the Russians, even if the dirt never came, if those who agreed, at least one of them took some step in furtherance of the agreement, then there is the potential crime for conspiracy.


TAPPER: Now, he went on to say that doesn't involve President Trump. But since he says he doesn't know about the meeting. But here you have people normally sympathetic voices to the president talking about, hey, there might be something here.

HOLMES: Well, I mean, I think he's providing the legal analysis here. I think if we take a step back and look at the calculations that go towards whether he speaks with Mueller or his team or not, I think it's not just a calculus on behalf of the president.

I think Mueller team's one to make, too, here because if you are to focus your investigation or your interview entirely on obstruction or false statements, at this point without proving under any circumstance the underlying case that gave rise to this, being Russian collusion, you are in pretty risky political territory and not suggesting you don't follow the law where it leads even to the Oval Office. I believe you should.

However, there's a political risk here that you run when you bring an obstruction case, a case that is just about the investigation, not about the underlying facts but just about the investigation to the American public.

TAPPER: Is that what happened with Bill Clinton, though? Bill Clinton, he committed perjury and suborned perjury.

HOLMES: Look what happened. Right? Huge public backlash.

PSAKI: Isn't an interview about obstruction, as well, or -- ZELDIN: It would be about obstruction of justice.

PSAKI: Right.

ZELDIN: In two parts, the firing Comey being one part which is that which executive privilege covers the most because you got advice. Then there's the obstruction of justice, which is the Flynn firing.

TAPPER: Telling Comey to lay off of Flynn.

ZELDIN: Lay off of Flynn. Asking Burr to ask the drop the investigation, asking the intelligence people to ask the FBI. There's that. And there's the collusion.

TAPPER: All right.

ZELDIN: There are three parts to this thing. All has to be played out.

TAPPER: Everyone, stick around.

Coming up next, the candidate President Trump is backing in a very important primary race tonight who actually has a support of Democrats, as well, in a way. We'll tell you who it is.

Stay with us.