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Prosecutors Questions Gates fter Defense Ends Cross- Examination; Ohio Special Election Too Close to Call; GOP Rep. Chris Collins of NY Indicted for Alleged Insider Trading; Pepsico CEO to Step Down October 3. Aired 10:30-11a ET

Aired August 08, 2018 - 10:30   ET

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

[10:30:00]

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: -- a meeting in July of 2014, a time when he and Mr. Manafort sat down and talked to the FBI. One of the main take-aways from that testimony is that it was Gates now testifying at the end of his cross that Mr. Manafort told him to be open and truthful with the FBI in discussing the various overseas offshore bank accounts that are at the very root of this entire case. As you know, Poppy, it has been a tough few hours on the stand for Mr. Gates because, at the end of the day, not only did he have to admit and talk about crimes that he said he committed with Manafort, but they also really got into his character and brought out all of the questions about lies, as well as even cheating on his wife. Certainly, embarrassing and very difficult to talk about in court. Poppy?

POPPY HARLOW, CNN ANCHOR: Joe Johns, appreciate the update. Keep us posted on what else comes out of that redirect. Again, this is the prosecution's star witness.

Jennifer Rodgers, our legal analyst is with me now. And Jennifer, it's been quite a few days. Three days now, and counting, of Rick Gates' testimony here. Let's talk about all we've learned in the last 24 hours about him, right? We've learned personal issues of dishonesty, having an affair, and this all speaks to you know trying to poke holes in his credibility, right? By the defense here. We've learned that he faked an investment document. We've learned more about the money that he admits that he stole from his boss, Paul Manafort. We've learned that he lied to investigators. Even earlier this year when they were trying to cut a plea deal with him.

Let me read you some of the back and forth from Manafort's lawyers, the defense here, and Rick Gates. It is striking. Quote, from Manafort's lawyer - "After all 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 trying to say, look, I cooperated, Manafort didn't. You should believe me more than you should believe Manafort even though I am an admitted liar. How is the defense doing with this strategy? JENNIFER RODGERS, CNN LEGAL ANALYST: So, they had to do two things. And I think they've done one of them. The one that they've done effectively is dirtying up Rick Gates. He now looks like a bad guy, he now looks like a liar and a thief. And that's fine. You know, the prosecutors aren't going to say anything different to be honest, in terms of he's a criminal and he lied in the past.

What the Manafort team has failed to do is distance Rick Gates enough from Paul Manafort. So, you know, they've said he's done all these bad things, but what they haven't been able to show is that Manafort wasn't right with him doing that. And they didn't separate him enough, they didn't undermine the testimony of the prior witnesses, the accountants and the bookkeepers who showed that Manafort was deeply involved in this. And they didn't meet their promise in the opening of showing that Rick Gates did all of this by himself. So, I think that's where they fall down a little bit. We'll have to see if they can make up that ground on a defense case.

HARLOW: You're right. I mean, they said this is all the doing of Gates, not Manafort here. And they still have to show that if they're going to make the case. Jennifer, I'm sorry to cut you short. We've had a host of breaking news this morning. So, I got to get everything in. But nice to have you.

Straight ahead, a House seat that Republicans never had to sweat before. For decades. Could slip out of Republican control after yesterday's special election in Ohio. I said could 15 hours after polls closed, votes still being counted, no call on this race yet.

(COMMERCIAL BREAK)

[10:37:55] HARLOW: Welcome back. This morning, President Trump and the Republican for whom he campaigned are claiming victory in yesterday's special election in. But of all the words you could use to describe this race, nail-biter comes to mind or bellwether certainly hard fought. The one you can't use is over fewer than 2,000 votes separate Republican Troy Balderson from Democrat Danny O'Connor.

And at last check almost 8,000 provisional and absentee ballots still remain to be tallied. This is one example of one of the latest examples of a district that's been solidly Republican for three decades until maybe now. And that's not even the closest race we are watching. The president's pick in Kansas, GOP gubernatorial race is now fewer than 200 votes separating here Kris Kobach 200 votes or so fewer than 200 votes ahead of the incumbent who did not get the president's backing.

With me now, CNN senior political analyst and anchor John Avlon, CNN political commentator, the host of the great PBS show "Firing Line." If you have not yet seen it, Margaret Hoover is here. She also formerly worked in the George W. Bush White House. It's nice to have you. Congrats to the show by the way.

MARGARET HOOVER, CNN POLITICAL COMMENTATOR: Thank you so much.

HARLOW: It is like appointment television in my House. So, you're doing a great job.

So much news to start with. I actually do want to start on the breaking news with you, Margaret, though as a Republican from New York, a strategist, the fact that we just learned moments ago that there was this indictment of securities fraud, wire fraud, false statements against -- Republican Congressman Chris Collins. They say they are going to vigorously defend him. But this guy who sat on the board of a big pharmaceutical company and is charged with insider trading and a big Trump supporter.

HOOVER: Look, any individual, regardless of whether they are a Republican or a Democrat who has the public's trust and confidence and serves in elected office -- this is alleged -- uses that power and privilege to enrich themselves, to line their own pockets and to enrich their friends and family should be held accountable. I mean, there have been ethics investigations going on for some time now and he surrendered to the FBI this morning.

So, it doesn't matter whether you are the president of the United States, the president's campaign chairman or lowly member of the House of Representatives. If you are abusing the public's trust for your own enrichment, you need to be held accountable.

[10:40:03] HARLOW: We are going to hear from the Southern District of New York. They have a press conference coming up in just about an hour and a half.

Moving on to Ohio, John Avlon. If the Democrats can eke this out here, it's really big. I mean, this is a district that you know, Republicans have held for three-plus decades. But when you look at this big picture nationally, what does it tell us?

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Well look, it says that even though Democrats may fall short here. And it's too close to tell, margin cite 8,000 votes outstanding. This is a district that the rigged system of redistricting designed to have it not be within Democratic grasp. Not only for 30 years in Republican hands, but the previous Republican incumbent won by more than 30 points while Trump won the district by 11.

HARLOW: You say this morning there are no silver medals in politics.

AVLON: That's right. Second place gets you oblivion not a silver medal. But they got to redo in effect in November. That said, you know, you're going to claim a moral victory by being massively competitive. And this thing is not over yet but it appears the Republican does have the edge. That said, the suburbs in the country -- this is one of the national themes -- the suburbs seem to be swinging towards Democrats and away from Republicans. That's key in any election. That's particularly true here in the Columbus race. Also, Republicans dramatically outspent in terms of outside money for Democrats.

HARLOW: Five times.

AVLON: Yes. 5x. HOOVER: I mean, I had endorsed a candidate in the primary. We are not yet in a position where nationally -- right -- the generic ballot is not double-digits ahead. The president's not double-digits beneath in the generic ballot. What that means is essentially you got to go district by district and pick good candidates. This was a district of suburban voters who don't - who aren't the kind of Republicans who they have begrudgingly gone along with Trump, but they don't love Trump, right? This is not -

(CROSSTALK)

HARLOW: Right. Right.

HOOVER: And so, Republicans have could done better and avoided this by picking a better candidate. Democrats picked a great candidate. And so, we are still at the point now in this moment as we head into November where we are still going district by district and whichever candidate is better for the district is more likely to win. If the generic ballot gets to the place where Democrats are doing 10 points better than Trump generally, then that's where you're talking tsunami.

HARLOW: What about the growing, John, for Democrats gap when it comes to suburban and urban voters versus rural. I mean, if you look back and you look to Bill Clinton in both elections, sort of being able to tie it. And then you look at Barack Obama in both elections being down 20 points when it comes to rural voters, and you look at Trump winning the rural vote by 40 points. The Democratic Party's got a problem here, right?

AVLON: It's got a real problem when it comes to reaching out to rural voters. The original red/blue divide in America was not Democrat versus Republican. It has always been urban versus rural. The suburbs have been the swing in recent decades.

So, while Republicans are dramatically outpacing in rural counties, the fact that suburbs swing towards Democrats with the cities that Math is tough to beat. But that gap, while it's been a persistent theme in American politics, is really troubling because it highlights that kind of cultural polarization we are seeing in our country that leads folks to start seeing fellow citizens as not being opponents but enemies. That's the dangerous thing.

HOOVER: What this tells me is that Troy Balderson very well may lose in November. I mean, thet have -

(CROSSTALK)

HARLOW: This is a three-month job.

HOOVER: Yes. This is not a real - I mean, it's not even he's just got campaign for three months. And chances are he barely won. The likelihood that he wins again -- all things being even which they won't be. That he won't win.

HARLOW: So, I'm about to -- after this interview Republican Congressman Jim Renacci of Ohio. So, I'll ask him this in a moment, is he nervous? Is this a warning sign?

But as a Republican strategist --

HOOVER: A 100 percent. And here's the worst part for me. I mean, you know, I've never been a strong supporter of President Trump. That puts me outside of the mainstream of the Republican Party. I recognize that but I'm there fighting for Republicans who are good on LGBT issues, who are believing climate change, who believe in a series of things I think people would say were moderate Republican.

All of these moderate Republicans who are going to lose their seats, who really risk losing their seats in this election. And so, then you got a more polarized election.

AVLON: Even more -

(CROSSTALK)

HARLOW: We've had so much breaking news this morning. I'll have you on for 10 more minutes. But I got to jump. But you know it's those awful long-term conversations that you have every week on your show that people should tune in to. There aren't enough of them on television these days.

HOOVER: Thank you, Poppy.

HARLOW: Thank you both very much. Margaret Hoover, John Avlon.

Now to the Congressman -- Republican Congressman Jim Renacci of Ohio is with me. This November he will be challenging the Democratic incumbent Senator Sherrod Brown for a seat in the Senate. Thank you for being here and thanks for your patience and waiting. We've had a lot to get to this morning.

JIM RENACCI (R), OHIO: Good morning, Poppy. Thank you for having me.

HARLOW: Of course. Let me just get your take on the breaking news that your fellow Republican in Congress, Chris Collins, has been indicted by the federal government on very serious allegations of securities and wire fraud. I know you don't serve on any relevant committees with him, but you do know him as a fellow member of Congress. What's your reef?

RENACCI: Well, look, it is an investigation and like anything else, I think the investigation just has to continue and we'll see what comes out of it.

[10:45:05] But at this point in time, for me it is breaking news and we'll have to continue to monitor it and see what the outcome is.

HARLOW: OK. Let's move on to Ohio. We don't know what's going to happen here. We don't know. Balderson is claiming victory. The president's claiming victory. We don't know what will happen. Outside Republican groups, outside Democratic groups in Ohio 12th in this race by five times. And here is what Tom Perez, the chair of the DNC said just this morning. (BEGIN VIDEO CLIP)

TOM PEREZ, CHAIRMAN, DEMOCRATIC NATIONAL COMMITTEE: We saw the fact that a race that we had no business winning required $5 million of Republican money, a visit from the president, and that's why keep winning in places where we have no business winning. And we are competitive in a place where the Congressman in 2016 won by over 30 points.

(END VIDEO CLIP)

HARLOW: I just asked Margaret Hoover. So, I'll ask you. Is this a wake-up call for your party?

RENACCI: Well, Poppy, first off, we have to realize this was August 7th. People are going back to school. As I was traveling the state and traveling the district, people didn't even know there was an election. So, clearly there wasn't turnout. And yes, that should be a wake-up call that we want to make sure that people realize.

But in November it will be different. November people know there is an election. Having an election on August 7th is not normal. People are getting ready to go back to school, people are going on vacation, people are coming back from vacation. It is the dog days of summer. There will be a big difference in November, but I do think complacency is an issue.

HARLOW: I hear that. But you know your party did spend $5 million-plus bucks to tell people that there was an election. And we don't even know if it worked yet. And that echoes this morning, this morning from Corry Bliss, the executive director of the GOP Aligned Congressional Leadership Fund. He's worried.

Let me read what he wrote. "We cannot expect to win tough races when our candidate is being outraised. Any Republican running for Congress getting vastly outraised by an opponent needs to start raising more money." Is he right?

RENACCI: Well, look, in the end here's what it comes down to, you can spend money but if people aren't there and people aren't going to vote you're going to have these issues. And that's why I say in November we got to make sure people get out to vote.

In Ohio people are happy with the economy. People are happy with the 4.1 percent growth. People are happy that they're finally seeing jobs that are available and their pay's going up. So, in the end that's the message. And we got to make sure people are aware of that. And then we got to make sure they are aware that if we change direction that can be reversed. So, I think that's the key for November.

HARLOW: So, President Trump says -- essentially you saw his tweet. I'm paraphrasing here. But he is the reason that Balderson might pull this off, that Balderson might win because of the president. Is he right?

RENACCI: Well, clearly Balderson won by, what? 1 percent or so? And the president just came in to kind of help push that through. So, I would believe the president did help. There are some who will say that he didn't. But in the end, him coming in always is going to help, especially in Ohio. There are some states that don't like the president. I get that. But Ohio he does have a favorable rating here. And I think it was positive for him to come in and push to help. It was also good that Governor Kasich endorsed Balderson as well.

HARLOW: Sort of. I mean, yes, but at the last minute. But got to get you on this before I let you go. And just to be clear here, again CNN, no major media outlet has called this race in Ohio 12th yet. I understand the president has but we don't know who won this thing yet.

Let me ask you about your race for Senate, sir, because you are in a heated race with sitting Senator Democrat incumbent Sherrod Brown come November. Here's what the latest NBC/Marist Poll from just June shows us. It has Sherrod Brown ahead of you, 51 to 38. So, what's your strategy and why are you down double digits in a state that President Trump won by eight points and a state where Sherrod Brown is the only Democrat to hold state wide office?

RENACCI: Well, look, the only poll that really matters is November. I look back. I was a business guy for almost three decades. When I first got in Washington, my first gut running, the first poll came out. I think it was a Marist Poll, said that I was down 23 points, 24 points. The next poll came out, it said I was down by 21 points. I want to know what's going on. I won by 11. In the end, the only poll that matters is the poll in November when people go out to elect.

When I'm traveling the state of Ohio, people are hearing a different message. And by the way, we have a lot of internal polls that show this is a neck and neck race. So, it is all about November. It's about getting my message out. It's also about an incumbent Democrat who's been around for 25 years in Congress and 44 years almost his entire life in politics. And that's the message that's important. He's somebody who's said in 1997 we should - we need to have term limits because people shouldn't be in Washington for 20 or 30 years. He's there for 25.

HARLOW: You have said, if you win, you would only run once again. To potentially serve two terms. We'll be watching. Congressman Renacci, I appreciate you being here. Thanks.

RENACCI: Thank you.

HARLOW: All right. This one's for the ladies. Where did all the women go? Where did all the female CEOs go? The number of women leading Fortune 500 companies is dwindling. We'll explain -- next.

(COMMERCIAL BREAK)

[10:53:10] HARLOW: So, last night President Trump invited some CEOs over for dinner at his New Jersey golf course. On the menu, his economic message. And sitting right next to him, Pepsi CEO, Indra Nooyi, one of the most prominent women leading a Fortune 500 company. She announced this week she's stepping down from the CEO post after 12 years. The president introduced her last night as one of the most powerful women in the world. And he's right, she is. Ivanka Trump posted on Instagram, Indra, you are a mentor and inspiration to so many, myself included. As she leaves, she is leaving an exclusive and shrinking club. Her departure comes at a time when women make up fewer than 5 percent of Fortune 500 company CEOs and she's being replaced by a man drawing renewed attention to the lack of women.

In the CEO seat in Corporate America in June of 2017, there were 32 women leading Fortune 500 companies. Today, that number has dropped to just 24. A decline Nooyi said this week concerns her.

With me now, Kay Koplovitz, she was the first woman to head a television network as founder and former CEO of USA Network. And Ilene Lang, interim president and CEO of Catalyst, a non-profit dedicated to studying women and work. Thank you both for being here very much.

You know when I was reading Indra's interview with the "New York Times" and Fortune this week, she said it concerns me that we can actually count how many there are women CEOs as opposed to just saying there are hundreds. Kaye, why is this full shrinking?

KAY KOPLOVITZ, FOUNDER AND FORMER CEO, USA NETWORKS: I think really a couple of different reasons. Number one, I think the pipeline is not as robust as it needs to be in the C-Suite. So, how many candidates? Only 330 of the 2,000 people in C-Suites on the Fortune 500 companies are women. So, that's 16.5 percent are women. And that's the pool that a lot of companies look to, who's in the C-Suite that can actually move up to that post.

So, it is a pipeline issue that we've got to concentrate more on people who are heading big divisions of these companies to see who is ready and not only concentrate on who is in the corner office right now. We have to really get more women in the C-Suite.

[10:55:11] HARLOW: Yes. And I've heard that. I've been covering this for a decade and I've heard that so much, the pipeline, the pipeline. But it's sort of like when do you stop talking about it and doing it? I mean, you have mandates in Europe, for example women on boards in Germany. Are we at that point? It begs the question. Because, Ilene, when you look at what's happened in the last few months, the CEOs - all women -- of Campbell Soup's, HP, Mattel, Avon and Mondelez, you know, the huge, huge food business, all were women. All of them now being replaced by men. All of them. And Indra.

ILENE LANG, INTERIM PRESIDENT AND CEO, CATALYST: So, that's all true. And we are stalled. And as been pointed out, it is a pipeline problem. And Catalyst has looked at this for years. We started studying this more than a decade ago about what is the barrier in that pipeline and the pipeline is not a problem until you get to middle management and a little above middle management. And then there are, if you want to use a metaphor for a pipeline, there are blockages in that pipeline. And a clear one is the stereotypical bias that is built in to job descriptions and performance management systems whereby we look at competencies and we describe them in terms that are so gendered, so male --

HARLOW: So, women aren't applying for some of those jobs?

LANG: They aren't being considered. Because when a job description says, we want somebody who aggressively drives sales, people look at a woman and say, she's too soft, she's not tough enough, she can't do it. Oh, by the way, no one likes a tough woman. So, at the point at which she acts that tough, she's out. So, it's a self-fulfilling prophecy. It is one of those downward spirals instead of a virtuous circle.

HARLOW: Let's talk about big picture here too because I mean, I'd be remiss if I didn't mention that every time a woman CEO is interviewed, I ask them when I interview them, you're asked about work/life balance and kids. Now I try to ask the men I interview that, too. But it is a reality that there is a huge juggle that goes on here for both parents. Indra Nooyi told Fortune this week -- I think my family was shortchanged a lot. And then it reminded me of what she said back in 2014 about her tenure at Pepsi and whether she was a good parent. Listen to this.

(BEGIN VIDEO CLIP)

INDRA NOOYI, CEO PEPSICO: I don't think women can have it all. I just don't think so. We pretend we have it all. We pretend we can have it all. If you ask our daughters, I'm not sure they will say that I've been a good mom. I'm not sure. Motherhood -- stay-at-home mothering was a full-time job. Being a CEO of a company is three full-time jobs rolled in to one. How can you do justice to all? You can't.

(END VIDEO CLIP)

HARLOW: That was like a punch in the gut for me but I was so happy to hear her speak so candidly. Do we know more of that?

KOPLOVITZ: I think we need to be candid and I also think we need to provide the kind of support for families, women and men, in corporate America that really want to raise their children properly and want to be with them properly. I want to go back to that pipeline because you challenged the pipeline statement.

And I think what we need to do inside corporations is have women identified as leaders in their sectors, and then brought along and be sponsored. Not just mentored, be sponsored. Will you sponsor someone? You are the CEO of the company or the CFO of the company. You sponsor somebody? Your reputation is also on the line in a large degree because you are saying this person is my next -- and we need to see more of that happening in corporations for women.

HARLOW: It is a very good point. By men and women.

LANG: And sponsorship is the only way for board service and for C- Suite activities through a career.

HARLOW: Let me get you on this finally. Because I think you bring up a really good point about a corporate America building an environment where we can be parents and work our tails off at the same time. My friend just went back to work at JPMorgan. And she told me this weekend they have a daycare center across the street here in Manhattan where she can take her child free of charge for like the first six months or first year. She can go. She can breast feed. I mean, it was unheard of to me before.

LANG: I worked at a company in the '80s that had that, too.

HARLOW: Did they? Well, it's not the normal.

LANG: It's not. But it is changing. But I think the recognition that work/life management means people who have lives -- people who work have lives and we're not very good at that.

HARLOW: Thank you both for fighting this fight and for being here. We appreciate it very much. Hope the numbers are different by the time my daughter is CEO age. Thank you all very much. Thanks for being with me today. I'm Poppy Harlow in New York. "At This Hour" with Kate Bolduan starts now.