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Ohio 12 Special Election Has Republican Leading, Also Key Races in Missouri, Michigan and Kansas; Rick Gates Back on the Stand for Re- Examination. Aired 9-9:30a ET

Aired August 08, 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] POPPY HARLOW, CNN ANCHOR: With all the precincts reporting but with several thousand absentee and provisional ballots still outstanding, Republican Troy Balderson holds less than a one percentage point lead over Democrat Danny O'Connor in the race for an open U.S. House seat in the 12th district of Ohio.

It is a district that President Trump won by 11 points and the retiring Republican congressman won by 35 points. No Democrat has won here in decades. Balderson and the president are claiming victory this morning. Let me be clear, O'Connor is not conceding and no one else is calling this race over.

Want an even closer race this morning? Look no further than the gubernatorial primary in Kansas. There to a fraction of a point separates the candidate backed by the president Kris Kobach from Jeff Colyer who happens to be the incumbent. And to Michigan we go where the Democratic gubernatorial race was not close at all and that, too, may be telling.

Voters overwhelmingly chose the so-called establishment candidate, former state lawmaker Gretchen Whitmer, over the progressive choice backed by Bernie Sanders among others. Abdul el-Sayed would have been the first Muslim gubernatorial nominee from a major party in the country.

As you can see there's a lot this morning so let's start in Ohio with our Ryan Nobles. Good morning, Ryan. What a night. Where do we stand?

RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: Yes, Poppy, good morning to you. Well, this race still is not called as you mentioned and that's because there is a very small margin between Troy Balderson, who has the lead right now, and his challenger Danny O'Connor. It's a 1700 vote lead. And the reason that the election can't be certified yet is there are still about 8,000 provisional and absentee ballots that have yet to be counted and it's going to take a little more than a week for all of that counting to take place.

And then the other variable that could take place that is if that margin shrinks to less than half of a percentage point an automatic recount could take place. If it stays less than a percentage point, then Danny O'Connor could request a recount. And right now they haven't decided whether or not they're going to go down that road but that is why we aren't able to declare a winner. We should point out, though, Poppy, that most election experts view

this lead by Troy Balderson as relatively safe, including our John King. 1700 votes is a pretty big margin to make up in this provisional and absentee ballot counting but they've got to count those votes before we can declare a winner -- Poppy.

HARLOW: And what are the candidates saying? Because I know, you know, Balderson has his opinion.

(LAUGHTER)

NOBLES: Yes, well, they're talking a lot about Donald Trump's influence in this race and of course the president was on Twitter last night trying to at least spin his influence and make it seemed as though had he not come in to help Troy Balderson then perhaps this race would have gone the other direction, but listen to what both candidates had to say about the president when it comes to Ohio's 12th District.

(BEGIN VIDEO CLIP)

DANNY O'CONNOR (D), CONGRESSIONAL CANDIDATE: I don't think he knows what he's talking about. You can fly in, hang out here for a couple hours, fly out, you don't walk on our roads. You don't have kids that go to our schools, you don't deal with the public health crisis with addiction that we have here in our state every single day.

I think it's more important to have grassroots conversations and Troy Balderson can have all the people he wants fly in from D.C. I don't think it makes too much of a difference.

TROY BALDERSON (R), CONGRESSIONAL CANDIDATE: I like to thank President Trump.

(CHEERS AND APPLAUSE)

BALDERSON: America is on the right path and we're going to keep it going that way.

(END VIDEO CLIP)

NOBLES: Of course, Balderson does not appear to be tracking away from President Trump at all but the reality of the situation is, Poppy, this has been a seat that's safely been in Republican hands for more than 30 years. Republicans spent $5 million on this race, Democrats only spent about a million, and Republicans are squeaking out perhaps maybe a 2,000-vote lead right now. The big variable, the big difference here is President Trump and that could tell us exactly how things are going to go in the November midterms -- poppy.

NOBLES: There we go. Ryan Nobles, thanks so much for the reporting on the ground there.

President Trump is taking credit, as Ryan just said, for what he is calling a Republican win in Ohio 12. But again CNN, no other news outlet calling this race yet. Let's go to our White House Correspondent, Abby Phillip, she joins me

now from New Jersey where the president is still on his working vacation.

You know, when you look at the candidates that won, he backed them by and large. In Ohio, too close to call. Should the president celebrate just yet?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, he's putting as positive a spin on this, Poppy, as he can but it seems very much that this race really was a squeaker, even if Troy Balderson comes out as the victor as it looks like he might, President Trump's presence may have only helped edge him out to a victory.

This is a president who has said in recent days that he thinks there might actually be a red wave in November not a blue wave but the president is doing here on Twitter over the weekend what he has done a lot of times in the past when he has been asked to endorse the establishment candidate like someone like Troy Balderson, toward the end going and campaign for him, he is saying if I didn't do it, this would have been a loser for him.

[09:05:07] He said that he was down in early voting 64 to 36 and his presence on Saturday made a huge difference. Republicans, though, are worried. This is a race that -- a district that President trump won by 11 points in 2016. Now Republican -- traditional Republican, really just squeaking by and President Trump is just making the best out of the situation, and saying to Republicans that it could be worse if I'm not on the ground for you.

HARLOW: And how do you expect this to affect -- I mean, look, the president has already been very vocal about how much he plans to be out in the final 60-day push. But how does this affect that?

PHILLIP: Well, this is really going to be a balancing act for Republicans. There are going to be some places that President Trump is needed and places like Ohio 12 where President Trump's presence is a little bit of a gamble.

President Trump said recently he wants to be out five or six times a week on the campaign trail every day. He thinks his presence is what is going to make the difference but I think this race is a clear indication that it can be very tricky for Republicans, these suburban districts are potentially very problematic for him and he's not making up a huge difference here.

If there are other races that he -- other districts that he won by fewer than 11 points, a lot of Republicans right now are pretty worried they may not be calling President Trump to rush over and help them campaign come November -- Poppy.

HARLOW: But he might come even if they don't call, right? As we saw in Ohio.

Thanks, Abby. Thank goodness for these three gentlemen this morning. Let's pull

them up. Chris Cillizza, Harry Enten, Phil Mattingly, thank you for waking up for me this morning to be here.

CHRIS CILLIZZA, CNN POLITICAL EDITOR-AT-LARGE: Hello.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: We never went to bed.

HARRY ENTEN, CNN POLITICS SENIOR WRITER AND ANALYST: Yes, I never sleep.

HARLOW: He kind of snoozed like in the makeup room.

CILLIZZA: There's a bag of Wendy's downstairs. I sleep, leave it alone.

ENTEN: Spicy chicken sandwich. I had two of them. Fantastic.

HARLOW: Amazing. Thank you, gentlemen, for being here. We have a lot to get to in all these races.

So, Chris, I mean, looking at Ohio, so much money, so much time, so much energy spent for a three-month job.

CILLIZZA: Yes.

HARLOW: I mean, these guys face off in November.

CILLIZZA: Yes, exactly. And a three-month job where the first month of it they're on recess and they don't come back until after Labor Day.

HARLOW: And going to (INAUDIBLE).

CILLIZZA: Yes, exactly. I thought one of the most interesting things last night was the statement by the Congressional Leadership Fund which is a big Republican House focused super PAC, and essentially what they said was --

HARLOW: Get it together.

CILLIZZA: Look, we're happy you won, Troy Balderson, but we don't have $3.3 million to spend on everyone who is in a district that Donald Trump won by 11 points. You better raise more money. We will not come to your rescue.

HARLOW: Yes.

CILLIZZA: And so I think that highlights two things. One, you have lots and lots and lots of Republican incumbent getting outraised by their Democratic challengers. Two, special elections are called special elections for a reason. There was one big House race, general election, last night so if you are the Congressional Leadership Fund or the Democratic Congressional Committee you can spend your money there. HARLOW: Sure. Sure.

CILLIZZA: You don't that luxury when you're looking at a playing field that's getting bigger and bigger in the House and is tilting more and more towards Democrats.

HARLOW: So, Harry, if Balderson survives, right? A win is a win, right? Or a win isn't a win here?

ENTEN: I mean, look, you'll take a win, it's an extra incumbent running in the fall, the net gain stands at 23, the Democrats need instead of going down to 22. The fact of the matter is, that this is a district that's been held by Republicans since the 1980s, it's a district on the presidential level that Donald Trump won by 11. If you look at all the races dating back to 2012, the average Republican has won by greater than 20 percentage points.

There are a lot more districts. In fact, there are about 70 more districts that Republicans currently hold where Hillary Clinton did better than this particular district so if the best that they can do here is basically a tie, a slight win, that is not good news at all for Republicans come the fall.

HARLOW: And when you look nationwide, Phil, I mean, when you look at this big picture, Phil, you've got the Democrat who beat the party's 2016 performance by double digits. You've got the "Washington Post" this morning saying that the House and perhaps even the Senate are within their grass in November so, yes, nationwide. I was right when I said that.

MATTINGLY: Yes, you --

HARLOW: What does this tell us about November big, big picture?

MATTINGLY: I think pause on the Senate for a couple of difference reasons at this moment. One is numbers obviously. Republicans are only defending nine seats. Democrats are defending 23, 24 seats.

HARLOW: Yes.

MATTINGLY: Ten of those seats are in states President Trump won. Clearly Republicans should be on offense. Now the map has absolutely shifted. Democrats are in a better place than they were a couple of months ago just because of the national mood but we're not quite there yet. On the House, I think the interesting thing, if you combine what both Harry and Chris have said about the ability to have to play in so many races in just a couple of months right now and you look at what happened in Ohio, in city 12, you look where the turnout actually came from.

If you look at Franklin County, major turnout. Obviously that's huge for O'Connor, it's huge for Democrats. If you look at the kind of Trump base rural areas, look into Lincoln County, if you go out to (INAUDIBLE), they did not have -- well, those counties probably gave him the win, pushed him over the top, they were not turning out with major -- [09:10:07] HARLOW: The way that the Democrats are.

MATTINGLY: Right? And so if you look at the fact that there are 68, 70 races that actually trend better towards Democrats than this one that are currently held by Republicans and the pro-Trump base is not turning out with the same enthusiasm that Democrats are?

HARLOW: That's a problem.

MATTINGLY: That's really problematic. And look, the president came in, the president clearly came in to help those rural areas start to turn out and that turnout probably did lead to Balderson's win but those are things that you're looking at right now -- t

HARLOW: A win that hasn't been called yet.

MATTINGLY: Alleged win.

CILLIZZA: Well, and so even if he does --

MATTINGLY: Maybe win.

CILLIZZA: Even if he does win, I think what you cannot do if you're a smart Republican is a mistake winning a battle for winning the war. Right? Look, we all like sports. You're much better off winning than losing but you can't think that this -- if you're a Republican ,was one of those 68 people who sits in a district that is less good for your party than this one you can't think, whew, Troy Balderson won. I'm pretty much --

HARLOW: Yes, I'm good.

CILLIZZA: No. I mean, the lessons -- the suburban lesson that Phil highlights, the turnout lessons, the money lessons all still suggest that this is going to be a good election for Democrats. That's not a debate. I think the debate is how big does the wave get? And I don't know that last night proves it gets smaller.

HARLOW: Harry, talking about Kansas.

ENTEN: Yes, boy, that's a close race.

HARLOW: That is a very close race this morning. You've got the president's pick Kris Kobach who led briefly that voter fraud investigation that found nothing and there was really no reason to set it up but I digress. He is running 500 points ahead against, you know --

ENTEN: Now down to 200. But yes.

HARLOW: Now 200, oh wow. OK. Now down to 200. Democrats are rooting for him. Explain.

ENTEN: Yes. Because he's the least popular politician in the state and they believe that if Kris Kobach is the Republican nominee for governor, they have a legitimate shot of winning that race in the fall. And yes, Kansas is a state that voted Donald Trump by about 20 percentage points but it's also a state that has elected Democrats statewide before, I mean. Remember Kathleen Sebelius was the governor there, elected in 2002 and 2006. And in fact I can't think of a better scenario for Democrats that not only does it look like Kobach is more likely to win than not, but there could be a prolonged recount where Republicans have all this infighting and that is the recipe for success for Democrats if they want to win there in the fall. It's not a guarantee by far. It's still Kansas but it gives them a real shot to win in a very red state.

HARLOW: Again, Phil, your typical home is not here. It is -- I think you live, breathe, eat, sleep on Capitol Hill. So when you look at this --

(LAUGHTER)

MATTINGLY: Don't hold that against me, all right?

HARLOW: I won't. I won't. No, you're a great guy and you're home with your kids a lot, too, but you do work a lot, I'm looking at this nationally, do you -- I mean it's been a long time since Tip O'Neill observed all politics is local. Are we there? Is that true now than ever was or is this really about national trends?

MATTINGLY: Look, I think everything that I've heard when I've gone on the ground in the districts and when you talk to members before they went on recess is that this is a national election, it's a referendum on the president or often first=time midterms actually are, and you see that's why first-term midterms generally the party in power in the White House takes a big hit.

I will tell you one thing. A good sign that things are not heading in your direction is when you come out of closed door meetings and say we are only going to focus on localizing all of our races. If you go back to 2010 you saw a lot of Democrats saying that. A little bit more in 2014, too. I can tell you, in 2018 when Kevin McCarthy and folks coming out of NRCC meetings or meeting over at the NRCC saying this is all about localizing our races, this is all about raising money and talking about the issues that matter in our districts.

HARLOW: Yes.

MATTINGLY: That means you have a problem. Now they have good candidates, they've got frontline candidates in a lot of different places that are definitely at risk that could win because they're good candidates, could win because they raise money. But when you look at the sheer scope and scale of the map right now, when you're talking about the need to localize races at a time when it's very much a national conversation that just adds to the hurdles that everybody --

CILLIZZA: Hard to localize elections with Donald Trump in the White House. It's hard --

HARLOW: There you go.

CILLIZZA: It's hard to do it anyway. HARLOW: Yes?

CILLIZZA: Now but --

HARLOW: Quickly, Chris, the union vote in Missouri.

CILLIZZA: Yes, I think not unimportant. Look, this is -- right to work is something that --

HARLOW: A big deal after the Supreme Court decision.

CILLIZZA: Huge deal. And we've seen union power somewhat reduced in elections. If you go back to the 1990s, massive deal. If you had the union endorsement in Democratic primary, it mattered a lot.

HARLOW: Yes.

CILLIZZA: Less so, so I think this is a victory there. But, you know, what's difficult is this is Missouri. Josh Hawley, they got the candidate they wanted, Republicans did. When you have enough elections, there's the good over here where you can say right to work gone. That's great. Good organizing principle for Democrats. On the other side it's very hard to say that Josh Hawley wasn't the best candidate for Republicans and that Claire McCaskill still isn't vulnerable. So --

HARLOW: Right.

CILLIZZA: With -- Harry and I talk about this offline. With a lot of these elections when you have more than one, you can kind of pick what you want. Look, it's like Ohio. Balderson won.

ENTEN: Maybe.

CILLIZZA: Maybe. Balderson is ahead --

HARLOW: Not the end of the story.

CILLIZZA: But --

HARLOW: You guys are going to get me in trouble --

CILLIZZA: Balderson is ahead, but that's not the end of the story, right?

HARLOW: Yes.

CILLIZZA: And that's the thing. You can take what you want and I think the Missouri right to work, same thing. You kind of take what you want from it. We'll see. We only have 90-ish days before - I mean, we're going to find more out soon.

ENTEN: More Wendy's.

HARLOW: Go to Wendy's. Go to sleep.

MATTINGLY: Double spicy chicken.

ENTEN: Disgusting.

MATTINGLY: It's not healthy.

ENTEN: Oh, really?

HARLOW: OK. Back to earth here. Minutes from now, Paul Manafort's deputy Rick Gates returns to the stand for a third straight day as he lays out for the first time the role that he and Paul Manafort he says had and talks about the detail of it within the Trump campaign.

Also, there is no relief in sight for the firefighters on the frontlines in California. It could take weeks to get the state's largest fire ever contained.

And, of course, we are following the results in Ohio as they pour in, a race that is too close to call in a district held long by Republicans. Can Democrats eke out an upset here. I'll ask the vice chair of the Democratic National Committee.

(COMMERCIAL BREAK)

HARLOW: All right. Welcome back. I'm Poppy Harlow in New York. And we are minutes away from Rick Gates taking the witness stand again for a third straight day to resume what has been an explosive cross- examination of Paul Manafort's former right-hand man.

And Manafort's lawyers are expected to pick up right where they left off, trying to smear Gates' credibility.

Let's go to the courthouse in Alexandria, Virginia. Joe Johns again with me this morning outside. What are we expecting today?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Certainly more cross- examination, at least for a minimum of an hour, perhaps more here. This is the part of the trial where Rick Gates really has to earn that plea agreement he has with the government.

He's been forced to make some damaging admissions not just about the crimes he committed and the crimes he says he committed with Paul Manafort, but also about his own personal character flaws - lying, stealing, cheating on his wife, all of that coming out in court on cross-examination.

And one of the most interesting things, I think, beyond the scope of this trial, there was also a little bit of talk about what Manafort and Gates did when they worked for Trump campaign in 2016.

Manafort, of course, was the campaign chairman. He left. And Mr. Gates stayed on all the way through the inaugural period. And there was some testimony from Gates yesterday that even when Manafort left the campaign, he was still trying to work it.

One example was trying to get a banker who'd helped him get a loan to be nominated for secretary of the army, Poppy. HARLOW: Right. That is significant. Joe, thank you very much. Let's talk about that and a lot more with Paul Callan, our legal analyst and a former prosecutor who is with me.

So, let's jump off on that because we heard yesterday, the jury for the first time heard the extent to which Manafort and Gates worked for the Trump campaign. The prosecution showed and presented these e- mails where you see Manafort imploring Gates to help him - to help a banker by the name of Steven Calk to try to make inroads with the campaign. Why is that significant?

PAUL CALLAN, CNN LEGAL ANALYST: Well, it's significant in a couple of ways in this trial because the judge initially was preventing prosecutors from even mentioning the Trump name during the trial.

HARLOW: Right.

CALLAN: And now, we're starting to see a lot of links to the Trump campaign. In this particular instance, Manafort is in deep trouble by 2015. He's run out of money, he's broke and he starts now trying to figure a way to avoid taxes by saying that income were, in fact, loans from banks.

And Gates, in the background, is following instructions and dealing with this banker, Steven Calk, who we later find out they're pushing with Trump to name him as secretary of the army.

HARLOW: Obviously, he was not named.

CALLAN: He was never named.

HARLOW: But the attempt here is what's -

CALLAN: Exactly. It shows that they were trying to use their leverage with the Trump campaign to engage in illegal banking activities.

HARLOW: We know a lot more about Rick Gates this morning, frankly, because of what he admitted than we did 24 hours ago. Among them that he was unfaithful to his wife, that he embezzled money from his former boss, that he faked an investment document, that he lied to investigators earlier this year after he had been spoken to by them about a plea deal.

Then Paul Manafort's lawyer asked him this. And let me read it for you verbatim. "After all of the lies you've told and fraud you've committed, you expect this jury to believe you?" Gates responds, "Yes, I made a decision. I'm here to tell the truth. Mr. Manafort had the same path. I'm here."

He's saying, I'm cooperating, Manafort's not; therefore, believe me. How successful do you think Manafort's defense team was in that line of questioning?

CALLAN: Well, I thought overall the defense team has been very effective in cross-examining Rick Gates. This is always a downside for the prosecutor. When you call somebody who's turning against somebody else who's made a deal, you really can dirty them up just for the deal itself.

But with Manafort, they've got a secret life they talk about. He's got a secret life with a mistress and he needs money to fund the secret life. And, of course, they're trying to say all of the nefarious activities that are being blamed on Manafort were, in fact, orchestrated by Gates to fund his secret life and he's now had the courage to come forward to testify, say prosecutors.

HARLOW: I do think it was interesting, "The New York Times" laid this out nicely this morning, that Judge Ellis at one point got involved and seemed to pick up the defense team's line of argument here because when Gates asserted that Mr. Manafort was "very good at knowing where the money was and where it was going", Judge Ellis jumps in.

He points out, OK, Mr. Manafort "didn't know about the money that you were stealing, right, from him, so he didn't watch it that closely?"

CALLAN: Yes. When I try cases, I hate it when the judge jumps in and starts doing his own questioning. They do this frequently in federal courts.

But I think a judge's job is to call balls and strikes. In other words, not get involved in trying one side's case or the other. So, I'm surprised that Ellis did that. And I think it's a bad practice, but I've got to tell you, it happens all the time in federal trials.

HARLOW: All right. Much more ahead today in just minutes when the trial resumes. Paul, thank you so much.

CALLAN: Thank you.

HARLOW: Ahead for us, we'll take you to California where firefighters on the frontlines are facing off against California's largest wildfire ever. And now, we're learning it could be at least a month before they can contain it. We will take you live to the scene.

(COMMERCIAL BREAK)