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U.S. to Sanction Russia Over Nerve Agent Attack; Republican Congressman Charged With Insider Trading. Aired 3-3:30p ET

Aired August 08, 2018 - 15:00   ET

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

[15:00:02]

BROOKE BALDWIN, CNN ANCHOR: All right, let's continue on, please.

ANNOUNCER: This is CNN breaking news

BALDWIN: Top of the hour. You're watching CNN. I'm Brooke Baldwin.

One of the president's most vocal allies is set to be in court right now facing criminal charges. And I'm not talking about Trump's former campaign chairman, Paul Manafort, who, yes, is on trial.

We're talking about Republican Congressman Chris Collins, the first member of Congress to endorse candidate Trump. Prosecutors are scheduled to arraign Collins, his son and the father of his son's fiancee on insider trading charges.

Federal prosecutors say the congressman took advantage of his seat on the board of an Australian pharmaceutical company. In June of last year, Collins was at the White House for a congressional picnic. And we have him highlighted. Just follow the circle of him there at that picnic.

This is the congressman. That is when prosecutors say he received a phone call from the firm that a clinical trial had failed. The congressman then picks up his cell phone and calls his son, Cameron.

(BEGIN VIDEO CLIP)

GEOFFREY BERMAN, U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: He then tried to reach his son, six attempts in five minutes. And then, on the seventh attempt, he got through to his son, and he -- it is alleged in the indictment that he illegally relayed the results of that drug test so that his son could trade on that information.

(END VIDEO CLIP)

BALDWIN: So prosecutors allege that Congressman Collins and his co- defendants saved themselves more than $700,000 from Collins' tip.

So let's go to the courthouse, where CNN's Brynn Gingras is standing by.

And so, Brynn, waiting to get your eyes on, it's not just the congressman, it's the son and his soon-to-be-father-in-law. BRYNN GINGRAS, CNN CORRESPONDENT: Yes. And, Brooke, I just turned

around because I was starting to see reporters file out of the courthouse.

Typically, in federal court, you're not allowed to have any form of communication. So we just had a producer run across the street to try to get exactly what happened inside the courtroom. But, like you said, we know those three men, Congressman Collins, his 25-year-old son, Cameron, and Cameron's soon-to-be-father-in-law, Stephen Zarsky, were going to be arraigned on 13 accounts of securities fraud, wire fraud and lying to the FBI.

Now, we don't know exactly what their plea was. But we do know, of course, that at least for Cameron and his father, the congressman's sake, their attorneys have vehemently denied these actions in statements and said that they were going to let this play out in court.

So it's unclear exactly, again, what happened in court, but you did draw attention for your viewers to focusing on that timeline. And that was really the crux of this indictment, and really what the U.S. attorney's office focused on when we had a news conference about two- and-a-half-hours ago, releasing this indictment to the public.

Certainly, as soon as we get more information of what happened, we're going to bring that to you, Brooke.

BALDWIN: Brynn, thank you so much in downtown Manhattan.

Now for the analysis, we have Paul Callan, CNN legal analyst and a former New York prosecutor, Shelby Holliday, politics and business reporter at "The Wall Street Journal," and criminal defense attorney Vinoo Varghese.

So, welcome, welcome to all of you.

And, Vinoo, you're new with me, so I want to start with you.

How about just is this not a classic insider trading case, when you saw the U.S. attorney in the Southern District of New York sort of pointing out all the presentation and the maps and this led to this person and follow the money, easy?

VINOO VARGHESE, CRIMINAL DEFENSE ATTORNEY: Well, I think the first thing you can think of with this case is that drugs make you do crazy things, right?

(LAUGHTER)

VARGHESE: So you have here a congressman who is trading and providing information to his relative.

So you have a situation where the -- this in essence a classic case, but post-2016, because U.S. Supreme Court in 2016 ruled that, when you give tips to relatives, even if you don't benefit, that's still insider trading. BALDWIN: I believe a word you used earlier, my friend, was idiotic?

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Yes, idiotic.

And if you were to prepare a road map for prosecutors about how to get arrested, that is what Congressman Collins did.

I think we should make clear that, yes, drugs make you do crazy things. But the congressman wasn't taking drugs. He was passing on tips about how to make money on a company that sold or would sell...

(CROSSTALK)

BALDWIN: When he found out the drug was a no-go, that's when, from the White House, he picks up the phone and calls his son seven times, and is basically passing off the tip.

CALLAN: I think it was a congressional picnic, actually.

BALDWIN: Congressional picnic at the White House.

CALLAN: The CEO of the company calls the congressman and says, hey, this trial we're doing on the only drug that really supports all of the revenue of the company is a failure.

And so the congressman from the picnic calls his son and tells him, this is horrible, the stock is -- the stock may go down. I don't know what he said. But he told him that the trial was a failure.

And then the son calls presumably his fiancee and the father of his fiancee and passes it on to them. In the end, $700,000 worth of stock is sold off by people connected to Collins. And they don't lose a whole lot of money.

[15:05:05]

But the next day, the public gets destroyed when the company loses 90 percent of its value.

BALDWIN: Thus idiotic.

(CROSSTALK)

BALDWIN: Shelby, to you on the politics of all of this.

This is a member of Congress who very early on endorsed candidate Donald Trump. This is someone who we see on TV a lot supporting this president. Case in point, watch this:

(BEGIN VIDEO CLIP)

REP. CHRIS COLLINS (R), NEW YORK: What Donald Trump has accomplished in this primary is unprecedented. He has spent very little money. He has rounded up the delegates that no one thought any of the original 17 would have by this point. Donald Trump is absolutely brilliant. And Donald Trump's a winner. Donald Trump wants to win. The

temperament and the personality of Donald Trump is exactly what America wants. The energy behind Donald Trump is like no one has ever seen.

(END VIDEO CLIP)

BALDWIN: Donald Trump ran on draining the swamp. This is mighty swampy behavior.

SHELBY HOLLIDAY, "THE WALL STREET JOURNAL": That's a very good point.

And we're also seeing this coincide with the Manafort trial, which you could also argue is very swampy. President Trump has yet to say anything critical about these two men, which I think is interesting. But there's -- there's another piece of this that is just mind- blowing, politically and legally, is that not only did this insider trading allegedly happen, but lying to the FBI about it, when there's a paper trail, there are text messages, there are phone calls.

Thinking that you could lie to the FBI and get away with it is mind- blowing for anyone on either side of the aisle. And the SDNY recently tweeted, the charges are a reminder that this a nation of laws and we stand committed to the pursuit of justice, which you -- which is symbolic for this case, but it's also interesting, given that we know Michael Cohen's investigation is unfolding in the same district.

There are a lot of legal issues.

BALDWIN: These are all people, you say, lying to the FBI, all in the president's orbit.

(CROSSTALK)

BALDWIN: When you look at indictment, Paul, so it's Congressman Collins, his son and the son's fiancee's dad. Those are the ones that are facing charges now.

When you read through this indictment, there are a lot of references to co-conspirators not named as defendants.

CALLAN: Yes.

BALDWIN: So are those folks who are -- if you're a prosecutor, how do you figure out who gets charged? Are these potentially other family members who are cooperating or might they be indicted down the road?

CALLAN: Could be indicted down the road at this point. At this point, they're not being indicted, but they participated in a criminal conspiracy, according to the indictment.

I mean, the most famous co-conspirator in an indictment probably was Richard Nixon in the Watergate affair. He was -- he was never indicted, but he was clearly listed as a co-conspirator with respect to some of the charges that were brought.

So this is something they do in the early stages of a case. And the case may name others later.

BALDWIN: Might you have other family members flipping on other family members?

VARGHESE: No, what's happened here is the SEC has come to agreements to -- with some of the other family members involved with the congressmen son's girlfriend.

So, I mean, I think that's what you have here. They have -- and so the U.S. attorney's office has chosen not to prosecute these people.

BALDWIN: OK, let me move on. Stay with me, everyone, because now the president's legal team is trying to avoid -- quote -- "perjury traps" from special counsel Robert Mueller.

Trump's lawyer Rudy Giuliani says the team has now submitted a counteroffer to Mueller regarding an interview with the president in the Russia investigation.

And Giuliani told Dana Bash here at CNN that it is a -- quote -- "good faith attempt" to reach an agreement. He also said that the Trump legal team is open to some obstruction of justice questions, but absolutely, he says, no perjury traps.

And he went on to tell Dana this, quoting Rudy Giuliani. He says: "For example, what did you say about Flynn? Why did you fire Comey? They already know our answer."

So, Paul, these are examples of the perjury traps that he says that they would be walking into, that they already the answers to them. But why do you think -- explain why you think he'd be perjuring himself in these questions.

CALLAN: Well, he wouldn't necessarily be perjuring himself, unless he said something that was totally at odds with what he said previously.

And, of course, the president has tweeted and publicly made so many statements about Flynn, about Comey, about the Mueller investigation, what Giuliani's worried about is that they're looking to trap him on a contradiction of a prior statement.

Of course, Mueller probably is saying we're just looking to find out what his state of mind was. And that's why we want to question him.

But to think that a prosecutor could ask only a couple of questions and with no follow-ups is absurd. There's no -- there's no way to get information that way. So this is going to fall apart in the end.

BALDWIN: How does Mueller even respond to this?

VARGHESE: Well, I think Mueller keeps pushing ahead. I think the bigger issue is...

BALDWIN: Because they're basically saying, it's our way or the highway on how this is going to go.

VARGHESE: Right.

And I think what Giuliani's doing, look, Giuliani is defending his client in the court of public opinion. A criminal defense attorney has an obligation to do that.

[15:10:05]

So what he's doing -- and he has said this at times -- is, he's poisoning the well and hoping the Republicans somehow control Congress, and there's no impeachment here.

But if you're Giuliani, and Paul can attest this, you're an attorney, you have a client like Trump, you avoid that interview, you try to limit that interview, you don't let him get anywhere near Mueller, because you know it's just going to lead to very bad things.

BALDWIN: I was talking to one of our attorneys last hour, saying he thinks this whole we want to cooperate bit is a total ruse.

And to you, Shelby, Jay Sekulow, one of the Trump attorneys or White House attorneys, has a radio show, which he has a radio show. I think not a lot of people even fully realize that. And so he and Giuliani are on this radio show earlier today and talking about how they responded to this Mueller interview.

And he says that the ball is now in Mueller's court. Listen to this.

(BEGIN AUDIO CLIP)

RUDY GIULIANI (R), FORMER MAYOR OF NEW YORK: You do not want to run into the November elections. So you back from that, this should be over with by September 1.

We have now given him an answer. He -- obviously, he should take a few days to consider it, but we should get this resolved. If there's going to be an interview, let's have it. If there's not going to be an interview, then let him write his report.

He's got all -- honestly, he's got all the information that he needs. The interview will provide nothing in addition to what he -- what he already has.

(END AUDIO CLIP)

BALDWIN: And so, quickly, to my lawyer, this is not -- is this going to be over September 1?

VARGHESE: No.

(CROSSTALK)

BALDWIN: No. No.

(CROSSTALK)

HOLLIDAY: No. There is a trial set for September. There's no way the investigation can be over by September 1.

BALDWIN: So what's the play from Giuliani's perspective? Is he like we want to show the American people we're willing to cooperate, we want this thing over with?

Hey, it's going to be over September 1?

HOLLIDAY: It's a nothing to see here approach.

However, Giuliani has changed his story a number of times. The president's layers have been negotiating I believe since January on this interview. And it would be one thing if they stayed consistent, but Giuliani has been all over the place, giving various reasons as to why the president shouldn't give the interview, including he has to deal with North Korea.

Valid. It's a valid excuse. But the excuse always changes.

CALLAN: And in January, just hearkening back to that, I was looking up -- there was an article by "The New York Times"' Maggie Haberman in January saying that Giuliani had said we were going to wrap this up in two weeks in January, OK?

They were down to the final negotiations. So all of this is -- it's a publicity stunt, so that they can say to the base the president wants to tell his story, but the evil Mueller made unreasonable demands on him.

(CROSSTALK)

HOLLIDAY: Well, the president does want to talk.

Mueller wants to interview him. Trump says he wants to be interviewed. If this doesn't before September 1...

BALDWIN: That's what the president says.

HOLLIDAY: ... this is Trump's lawyers' fault. That's right.

BALDWIN: OK. We will leave it. We will have a whole other discussion another day about whether he will end up being subpoenaed.

Thank you all so much for that, for that conversation.

We have got some breaking news now. We have learned -- speaking of Russia, we have learned that the Trump administration is planning to hit Russia and Vladimir Putin with a new round of sanctions, this time in direct response to the nerve agent attack against that ex-spy living in the U.K.

We have those details next.

(COMMERCIAL BREAK)

[15:17:33]

BALDWIN: Back to our breaking news.

New York Republican Congressman Chris Collins was just arraigned on insider trading charges at a federal courthouse in New York.

So, Brynn Gingras is there outside that courthouse.

And so it just -- just wrapped up. What happened?

GINGRAS: Yes, Brooke, we're getting worried that the three men, the congressman, his 25-year-old son, Cameron, and Cameron's soon-to-be- father-in-law, Stephen Zarsky, all pleaded not guilty to those 13 counts of securities fraud, wire fraud and lying to the FBI.

But I want to bring in my colleague reporter Mark Moralis, who was actually inside the courtroom when those men were standing before the judge.

And can you paint a picture for us of what their demeanor was when they faced these very serious charges?

MARK MORALES, CNN REPORTER: They were fairly calm.

They came out. Christopher Collins was wearing a dark blue suit white, shirt, no tie. Neither one of them had their hands cuffed in front of them. They all addressed the judge when the judge asked them if -- how they pled.

Christopher Collins says, "I plead not guilty." Then they went down the line, not guilty, not guilty, that they had read the documents and they understood what the charges were.

GINGRAS: So, the simple not guilty.

But, of course, we seen statements from the congressman. We have seen them from the son's attorneys as well. What about Mr. Zarsky? Did his attorney say anything on his behalf about vehemently denying and really letting this play out in court?

MORALES: Not in the courtroom, not at the hearing. Neither one of the attorneys really addressed anything or really spoke too much.

And this was very procedural. They waived the reading of the charges and the judge set the next day for when they would be back in court. Discovery was also discussed. And they were also issued $500,000 personal recognizance bonds.

GINGRAS: And in our discussions, that's where they are right now, right?

We're not clear, Brooke, if they're going to actually walk out that front door where everybody is waiting, but right now they're going through that signing of documents.

MORALES: Right.

As soon as they figure out what the paperwork is and everything gets processed, they should be able to leave. They will have two weeks to turn over travel documents. The congressman's going to have to turn over his diplomatic passport as well. And once they get all the money squared away, everything should be -- they should be out.

GINGRAS: And, Brooke, one more thing I just wanted to quickly mention because you brought up the drain the swamp comments.

We asked the U.S. attorney in our news conference about two hours ago, are there more indictments to follow? We have heard that maybe others were invested in the stock as well. Is it possible we will hear more people's names to be brought to court.

Any discussion of that in front of the judge?

MORALES: No, nothing of that nature, not anything during the court appearance.

It was very procedural. They didn't -- no one said anything about that yet. But that doesn't mean it couldn't happen later on.

[15:20:00]

GINGRAS: Exactly. All right, thanks so much, Mark.

And, yes, Brooke, that is the truth. I mean, when we asked that question directly, if even current administration, former administration members maybe had some sort of inside tips to this stock from the congressman, could we see more indictments come down the line?

It was a very firm no comment from the U.S. attorney. So we will see how this all plays out. But that's certainly how this arraignment happened this afternoon, Brooke.

BALDWIN: All right, Brynn and Mark, thank you both so much.

Let's pivot to the other breaking news right now. The Trump administration is now hitting Russia with new sanctions.

Michelle Kosinski and Elise Labott are joining me.

And, Michelle, give me some context. What are these sanctions in response to?

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Hey, Brooke.

Yes, this is another round of sanctions, and it constitutes another punishment for Russia being believed to behind the poisonings of that former spy who has been a U.K. citizen on U.K. soil.

It's the attempted assassination, as the State Department ha put it, of Sergei Skripal and his daughter. And, remember, two additional people were affected by this nerve agent that was used. One of those people died in this attack.

So already the Trump administration has expelled 60 Russian diplomats from the U.S. over this. Now they're taking additional measures by imposing sanctions. So it needs to go through a process. They really needed to do this under a particular law against the use of chemical weapons.

So this is them looking at the law, saying, yes, this qualifies. We are going to impose sanctions. It needs to go through congressional review, though. So by the end of the month, we expect to see these sanctions enacted.

Also, we expect to hear more about who exactly is going to be targeted. Is it going to be the suspects that the U.K. believes is behind this? Is it going to be people believed to be involved with the creation of chemical weapons or the production of them? We will have to wait and see on that.

We expect more information today. But keep in mind, you know, this is the Trump administration taking additional action against Russia. And even though the president himself did not call out Russia for this chemical attack when he was standing there side by side with Vladimir Putin in Helsinki just weeks ago, among other behaviors that he did not call out Russia for, his administration has shown themselves willing on a number of occasions now to take action to punish Russia for things like this.

BALDWIN: Didn't call him out a couple of weeks ago, Elise.

And also, you know, we have known about this case, and everyone knew it was Russia months ago. So why issue these sanctions now?

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: I think Brooke, as Michelle said, you know, it's one thing to say that they suspect that Russia's involved, that they have intelligence that Russia was involved, and there have been actions taken against Russian oligarchs.

There have been these expulsions, but when you meet -- when you try to meet legal criteria for a violation of this 1991 law about chemical and biological use, to meet that legal criteria takes a long time. The lawyers have to see whether it meets it. A lot of things are involved in terms of a technical examination.

And so you might think it's political expediency that, right now, there's a lot of tension against Russia, or there's a lot of talk about letters between President Trump and President Putin going back and forth. This could have just as easily come on the day of President Trump's press conference with Vladimir Putin's.

That's how these things -- a lot of it is mostly coincidental. This kind of -- type of legal criteria takes months to determine.

BALDWIN: All right, Elise and Michelle, thank you so much on that development.

Still ahead here, Michigan's Democratic Party is now fielding an all- female ticket for statewide races in November, among them a woman poised to be the first Muslim woman elected to Congress in this country. Rashida Tlaib joins me live in moments.

(COMMERCIAL BREAK)

[15:28:40]

BALDWIN: We are following the major news shocking lot of lawmakers from Capitol Hill to New York.

New York Republican Congressman Chris Collins has been charged with fraud related to insider trading. The congressman, along with his son and his son's future father-in-law, were just arraigned in federal court. All three pleaded not guilty.

Prosecutors say Congressman Collins found out about a failed drug trial conducted by a pharmaceutical company whose board he sits on. Collins then allegedly shared that information with his son, who then allegedly traded on the news before it was made public.

The House Ethics Committee is not commenting for now, but we know the speaker of the house, Paul Ryan, has already removed Collins from a top congressional committee.

So, with me now, Charlie Dent, CNN political commentator and former congressman who chaired the House Ethics Committee.

So, congressman, good to have you on.

And you have worked with this congressman in the past, but this notion that he stood there in, I think it was a congressional picnic at the White House, gets the call from the pharmaceutical company that the drug is no good, calls up his son, again, from the White House to essentially, according to prosecutors, tip him off that he needs to sell the stock, how would you characterize that decision?

CHARLIE DENT, CNN POLITICAL COMMENTATOR: Wow. I guess it goes under the category that you can't make this stuff up.

BALDWIN: There you go.

DENT: Well, first, here's what's going to happen.

I don't know the facts of the case. The charges obviously are very serious. I know Chris Collins. And his -- his challenges now are not so much ethical, as they are legal.