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Punishing Putin; New York Congressman Chris Collins Arrested On Insider-Trading Charges; Trump's Lawyers Counter Special Counsel's Interview Terms. Aired 5-6p ET

Aired August 8, 2018 - 17:00   ET

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


[17:00:06] WOLF BLITZER, THE SITUATION ROOM HOST: Happening now, breaking news. Punishing Putin. The Trump administration announces new sanctions on Russia after concluding that Vladimir Putin government used a deadly nerve agent in the attempted assassination of a former spy and daughter in Britain.

Waiting game. President Trump's lawyers counter the latest interview offer from Special Counsel Robert Mueller. They worry their questions related to obstruction could lead to the president of perjure himself. Will Mueller agree or finally issue a subpoena to the president?

Do not lie to the FBI. Republican Congressman Chris Collins, the first to endorse Donald Trump, is arrested on insider trading charges for a stock sale that helped his son and others avoid nearly three- quarters of a millions dollars in losses. The FBI said there's a better inside tip. Do not lie to its agents.

And Assange to testify? WikiLeaks says its founder Julian Assange has been asked for the Senate Intelligence Committee to testify about Russia election interference. Would Assage leave the London embassy where he's been holed up for years? I'm Wolf Blitzer. You're in "The Situation Room."

Breaking news. The U.S. announces it's imposing new sanctions on Vladimir Putin's government after finding the Kremlin responsible for last spring's nerve agent poisoning of a former Russian spy and daughter in Britain. Also breaking, Republican Congressman Chris Collins pleads not guilty to charges of insider trading and lying to the FBI. Collins, the first member of Congress to endorse Donald Trump for president was arrested for alleged securities fraud, wire fraud and lying.

I'll speak with Democratic Senator Mazie Hirono of the Judiciary Committee and our correspondents and specialists are all standing by with full coverage. The announcement of tough new sanctions on Russia comes as President Trump is on vacation. Let's go to the Senior White House Correspondent Jeff Zeleny covering the president in New Jersey. So what's the latest, Jeff?

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, the Trump Administration is announcing sanctions against Russia but this is hardly coming out of the blue and hardly the White House taking a lead here. Members of the Congress have been urging the President and the White House to do this for more than a month. And this is all coming that there's a new turn of the screw and one of the longest and hottest negotiations of the summer, that is will the president sit down with Bob Mueller and testify?

(BEGIN VIDEOTAPE)

ZELENY (voice-over): The Trump Administration tonight is set to hit Moscow with sanctions pushing the Russian government for using a nerve agent in the attack against a former spy and his daughter in Britain. The State Department saying, the Russian Federation has used chemical or biological weapons in violation of international law. The U.S. government condemned the attack it happened in March. But did not unveil sanctions until today.

More than a month, Congress urged the Trump Administration to impose the penalty. The announcement of the sanctions coming after the president has faced criticism from Republicans and Democrats alike of being too soft on Putin, and amid new developments in the ongoing Russia investigation. President Trump's lawyers extending a new counter offer tonight to Special Counsel Robert Mueller that seems to close the door even more on the prospect of Mr. Trump voluntarily sitting for an interview.

RUDY GIULIANI, ATTORNEY TO THE PRESIDENT: We have given him an answer. He obviously should take a few days to consider it. But we should get this resolved.

ZELENY: Rudy Giuliani making the announcement on the radio show of fellow Trump lawyer Jay Sekulow and revealing no hint of the conditions or demands.

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

ZELENY: He said the probe should be finished by September 1st yet the time line is up to Mueller not Giuliani. For months, the president's lawyers have sought to limit face to face questions about obstruction of justice. A key point of Mueller's inquiry the president repeatedly rails against.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: That was a total witch hunt.

ZELENY: The president at a public view again today at his New Jersey golf club but keeping a close eye on the fraud trial of his former campaign chairman Paul Manafort, but tension inside the Virginia courtroom with Judge T.S. Ellis telling a government prosecutor to hurry things along.

As a concession to the shortness of life, we need to get it done. Also today, the Senate Intelligence Committee calling on WikiLeaks founder Julian Assange to make himself available for an interview and the inquiry of Russian interference in the 2016 election. Unclear whether Assange who's still holed up in the Ecuadorian embassy in London will agree, but Mr. Trump's admiration for WikiLeaks has long been clear after revealing the Clinton campaign's hacked e-mails.

TRUMP: WikiLeaks, I love WikiLeaks. This WikiLeaks stuff is unbelievable. This WikiLeaks is like a treasure trove.

[17:05:00] ZELENY: Meanwhile, Republicans are facing more election year turmoil as New York Congressman Chris Collins was indicted on suspicion of insider trading. Collins, one of the president's earliest supporter, charged with 13 counts of security fraud, wire fraud and making false statements in a scheme of an Australian pharmaceutical company.

GEOFFREY BERMAN, U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: Congressman Collins cheated our markets and our justice system.

(END VIDEOTAPE)

ZELENY: Now, all this, Wolf, is coming amid fresh signs again of potential warning signs on the horizon for Republicans. The Ohio special congressional race we have been talking so much about is still too close to call. The Republican leading by about 1,700 votes or so. We are not declaring a winner in that race.

The president is declaring winners saying he helped rescue that Republican candidate. But Wolf, that's a district that should have been Republican solid through and through and has been held for several decades. So the White House even here in New Jersey, Wolf, keeping an eye on the midterm election race amid all this Russia developments.

BLITZER: Yes. There's still 8,000 ballots that need to be counted in that race so that's why everyone is waiting. All right, Jeff. Thank you. Jeff Zeleny reporting. Let's dig deeper now with our CNN Global Affairs Correspondent Elise Labott and CNN Senior Congressional Correspondent Manu Raju. Elise, on the sanctions the U.S. is now imposing on the Russians, what is it exactly is the administration planning to do?

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, you remember that already in April when after this attack, this scrupled (ph) attack happened. The U.S. expelled 60 Russian diplomats and the Russians followed suit. Now, this is the first official determination that Russia was responsible for using a biological or chemical weapon under this 1991 law.

So that means that there's an initial tranche of sanctions. What they're going to do is it's going to attack exports from Russia, we're talking about hundreds of millions in future exports from Russia, what they call dual use technologies. Any technology that has some kin of sensitive military use.

BLITZER: It looks, Manu, like some members of Congress pressed the administration, pressured the administration into launching these sanctions. MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, no question

about it. This came after the House Foreign Affairs Chairman Ed Royce, Republican, leads that committee, actually wrote a letter on July 26th saying that the administration actually slow in making this determination under this 1991 law to determine whether or not Russia did violate this law and if the United States did determine that, that's when the sanctions would immediately take effect.

But according to this letter from Ed Royce, from July 26th, it says your findings due to the committee within 60 days. 93 days passed since my request yet we have not received the statutorily required determination, you know, and he goes on to say, how critical it is to have these mandatory sanctions imposed. So, you know, Wolf, that was almost two weeks ago and the administration finally making this decision after a --

LABOTT: And today was the actual deadline. It's really the 11th hour.

BLITZER: Yes. So t raise the chairman of the House Foreign Affairs to be -- he put some pressure on the administration. How effective, Elise, are the sanctions?

LABOTT: So there are two tranches and the initial tranche, you know, might have limited effectiveness because it kind of rubs up against existing sanctions on Russia but within 90 days if Russia doesn't commit to not using chemical weapons or biological weapons again and allow on-site inspections within 90 days a second tranche of sanctions is mandatory. That could be very impactful, Wolf. We're talking about international, financial services, totally banned. Diplomatic relations. There could be more limits of that and most curtailing all exports to Russia so the Russian economy already really flagging today. The ruble is down. This could be really be damaging for the Russian economy if they don't allow those on-site inspections.

BLITZER: It seems to be a familiar pattern going on. Congress gets angry at the Russians. Passes legislation, 97 or 98-2 in the Senate overwhelmingly in the House, the administration reluctant but Congress squeezes and then they finally acts.

RAJU: No question about it. Last year when Congress did pass those Russia sanctions, just five members in both chambers voted against it. Five members. That's remarkable to see done. Yet behind the scenes, the administration trying to water those down. The president issued a statement at the time saying that some of the provisions were unconstitutional. He called it seriously flawed and he's been criticized for slowly implementing these sanctions so they're facing a lot of pressure and new sanctions that have been proposed in the wake of his Helsinki summit. So, the administration is still going to face pressure from Congress and they moving forward with more sanctions on Russia.

BLITZER: Manu and Elise, thank you very much.

Joining us now, Democratic Senator Mazie Hirono of Hawaii. She's a member of both the Judiciary and Armed Services Committees. Senator, thanks so much for joining us. Let me get your thoughts right away on the new sanctions that the administration is imposing on Russia for their involvement in the poisoning of this ex-spy and his daughter on British soil. Do these sanctions send the right message?

[17:10:08] SEN. MAZIE HIRONO (D), JUDICIARY COMMITTEE: It certainly does. But it's not as though the administration had a choice about imposing the sanctions because as noted there's a 1991 law that requires once the determination is made that a country has used chemical or biological weapons against people that the sanctions must occur. So as usual, the Trump Administration drags its feet but they did not have a choice. Obviously, they needed prompting from members of Congress in order to do what they're supposed to do.

BLITZER: They got that from the Republican chairman of the House Foreign Affairs Committee Ed Royce. He was squeezing them with that letter at the end of the July, they finally acted now. Let's turn to another sensitive issue, senator. The negotiations ongoing right now between the special counsel Robert Mueller and the president's legal team over a possible interview with President Trump. Should Mueller accept Rudy Giuliani the president's personal lawyer, should Mueller accept Giuliani's latest terms?

HIRONO: Whatever the terms are, they try to protect the president as much as possible so I don't see why Mueller should accept these kinds of conditions and limitations. These negotiations have been going on for months an months. One wonders whether the Trump team is really negotiating in good faith and some point I think that Mueller has to decide whether to issue a subpoena and we all know that a president can be subpoenaed.

BLITZER: Do you think that Mueller really needs the president's testimony as part of his investigation?

HIRONO: I think that Mueller is conducting his investigation in such a professional and objective way that if he needs the president to testify under oath and I think that he will proceed to do that. If not then if he can make the case without the president's testimony then I think he will do so.

I think for all of us we'd like to have the president testify. I can understand why his team doesn't want him to testify because they can never be assured that the president even under oath will be telling the truth.

BLITZER: At what point should Mueller call off the negotiations and start working on a subpoena to the president?

HIRONO: For all we know he may be doing a dual kind of a thing that as he continues to negotiate and as some point when they decide that it's just not happening and the negotiations are not occurring in good faith he already have. If -- I understand how Mueller operates, I wouldn't be surprised at all if they already have a subpoena prepared ready to go.

BLITZER: Let me get your thoughts on one other issue. You remember the Veterans Affairs Committee, there's a stunning new report from ProPublica about the Department of Veterans Affairs and according to documents obtained by ProPublica an unelected informal council of President Trump's friends has exerted sweeping influence over the VA using the president's private Mar-a-Lago club in Palm Beach, Florida as their home base.

Let me read a portion of this report. The Mar-a-Lago crowd spoke with the VA officials daily. The document show reviewing all manner or policy and personal decisions. They prodded the VA to start new programs and officials traveled to Mar-a-Lago at taxpayer expense to hear the views. Everyone has to go down and kiss the ring a former administration official said.

So, if the bureaucracy resists the trio's wishes, Perlmutter and others involved in the informal group, supposedly have a powerful ally, the president of the United States. You serve on that Veterans Affairs Committee as I said. Were you aware of this arrangement?

HIRONO: Of course not. And this is yet another astounding revelation that the President Trump does not abide by any kind of ethical limitations and I find it astounding for an agency that is there to serve, the needs and provide the programs so that our veterans have earned and deserved. It is just astounding to me that this group of totally unaccountable, unelected and behind the scenes people can exert this kind of influence.

But they obviously have the protection of the president. And this is why the president is not above the law but he's certainly acting as though he is. So, I would hope that the Veterans Affairs Committee on which I sit will conduct some hearings. I'll call -- I'd like for that to happen so we can find out exactly what kind of influence is being exerted by these people who are accountable to nobody.

BLITZER: Hey, senator, thank you so much for joining us.

HIRONO: Thank you.

BLITZER: Up next, the Trump Administration punishes Vladimir Putin with new sanctions after determining his government used a deadly nerve agent in an attack on British soil.

And Republican Senator Rand Paul said he delivered a letter for President Trump to Vladimir Putin. The White House said it was requested by Paul. Why did the senator conduct his own diplomatic mission?

(COMMERCIAL BREA)

[17:19:39] BLITZER: Breaking news, the Rump Administration announced sanctions on Vladimir Putin's government after concluding that the Kremlin was indeed behind the nerve agent attack on a former spy and daughter in Britain. Let's go live to Moscow right now. Our senior international correspondent Fred Pleitgen is standing by. Fred, first of all, what are you hearing over there?

[17:20:00] FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, Wolf, we were trying to get some reaction from the Russian government and reached out to both the Kremlin and the Russian foreign ministry and the Kremlin spokesperson actually got back to me but he only said the Kremlin won't comment at this time. He directed me back to the Russian Foreign Ministry and they haven't gotten back yet.

Now, of course, this very late here and but we do expect that this is going to be forceful reaction from the Russian government. They, of course, always said they weren't behind that Novichok poisoning. And, of course, as we've been saying here so far these sanctions in the long run could be very, very biting for the Russian economy and they certainly come at a time when many people in the U.S. but man people also here in Moscow wonder what exactly the Trump administration's policy is towards Russia.

Of course, after the Helsinki summit, we heard warm words of President Trump towards Vladimir Putin but then at the same time you have things like these sanctions coming back again. And one of the things that we've been hearing consistently from the Russians is that they believe President Trump does want these better relations but that it is U.S. institutions that are essentially preventing him from making those better relations a reality, Wolf.

BLITZER: As you know, Fred, Republican Senator Rand Paul announced today that he delivered a letter from President Trump to Russian officials destined for Russia's Vladimir Putin but the White House down plays it as a letter of introduction simply requested by Paul before he left Washington. What are you learning?

PLEITGEN: Yes. Well, the Kremlin has also confirmed that the letter was in fact received and quite interesting to see and to hear what Senator Rand Paul had to say about what that letter was about, at least as far as he is concerned. I'm going to read his tweet for you. He said, I was honored to deliver a letter from President Trump to President Vladimir Putin's administration. The letter emphasized the importance of further engagement in various areas including counter terrorism and enhancing legislative dialogue and resuming cultural exchanges.

Now as you mentioned, Wolf, the White House seems to think it was a letter of introduction for Rand Paul here in Russia and one of the interesting things is that I actually saw Rand Paul after the first engagement here with Russian parliament and I asked him whether or not President Trump informed and involved in the trip here to Russia. Have a look at what happened there.

(BEGIN VIDEO CLIP)

PLEITGEN: Is President Trump informed about your efforts, sir? Sir, is President Trump, are you keeping him in the loop?

(END VIDEO CLIP)

PLEITGEN: So there we have Senator Rand Paul walking away there together with a member of Russian parliament. It's interesting, also, Wolf, the Kremlin confirmed receiving the letter from President Trump saying that that letter has not been reviewed yet, Wolf.

BLITZER: And there was no meeting between Senator Paul and the Russian leader Vladimir Putin. We're also told that Senator Paul asked the White House for that letter from the president hoping it would generate a meeting that he would have with Putin. Clearly that didn't necessarily work and those various ideas in the letter, those were ideas the White House says was put forward by Rand Paul, not necessarily from the president. So there's a little bit of confusion in these areas. We'll stay on top of the story. Fred Pleitgen, thank you very much.

Coming up, President Trump's lawyers counter the latest interview offer of the Special Counsel Robert Mueller. Will Mueller accept or finally issue a subpoena to the president?

And Republicans endorsed by President Trump are jolted by some very close election results. What does that mean for the upcoming midterms? Stay with us. You're in "The Situation Room."

(COMMERCIAL BREAK)

[17:28:12] BLITZER: Tonight President Trump's legal team waiting for Mueller's reply to their latest offer on whether or not the president takes questions in the special counsel's Russian election meddling investigation. We have a lot to discuss with our legal and political experts. Laura Coates, a former prosecutor, would you take that deal if you were Mueller?

LAURA COATES, FORMER FEDERAL PROSECUTOR: No. Because I don't negotiate with somebody who has no bargaining power that's greater than mine. The leverage that Giuliani is considering he has is the idea of, listen, Mueller doesn't want a long, drawn-out litigation battle in the courts. He wants to have timely resolution to whatever collusion probe he is engaged in and if he wants to battle with the idea whether I'll voluntarily or subpoena, it will drag it out further down the line.

But in reality Mueller does not need to be beholden to Giuliani or its request, and the mandate that he follow, the type of questions he'd like asked. Because their directive is not about obstruction solely, it's also about collusion and whether somebody is a part of the Trump campaign knew more and who was the head of the campaign? Donald Trump.

BLITZER: Very interesting. Gloria Borger, is the president's legal team serious about sit down interview or face-to-face interview Mueller's team or they're just trying to drag this whole thing up?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, you're assuming that the legal team agrees on everything. That's not my assumption. Look, they have a client who says still to this day that he wants to talk to Bob Mueller. I think the lawyers on the team and we have reported this over and over again are pretty much united that they'd rather the president did not sit down with Bob Mueller.

I think the big question now that everybody is sort of facing is they go back and forth and back and forth and remember they've gone back and forth since January on this. Is the question of whether Bob Mueller will subpoena the president, should his lawyers say, you know, we're not going to let him testify, for example, on obstruction.

And I think there are a lots of sources that we have been talking to who are familiar with what's going on who say, look, we don't believe that Mueller will subpoena the President because he doesn't want to drag this out, he doesn't want to take it to the Supreme Court. So we believe perhaps we'll be able to come to some arrangement. But as Laura says, there is absolutely no guarantee that Mueller is operating on any time line, including the time line of the midterm elections, so we just don't know.

WOLF BLITZER, CNN ANCHOR: You know, it's interesting Giuliani gave an interview to Jay Sekulow, who's another -- one of the President's personal lawyers, Ron Brownstein, and suggested this whole thing about an interview should be wrapped up by September 1st. Do you think that's realistic?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Oh boy. I mean, you can certainly run a clip of all the times that Rudy Giuliani and other members of the team have said that either the interview or the entire investigation is going to be wrapped up. So, you know, I don't think -- as Gloria said, I don't think we know on that.

And as Laura knows better than I, I mean, there is Justice Department guidance both in the Bush administration and in the Obama administration that explicitly warns prosecutors against making decisions that could be seen as influencing an election. Something that James Comey, you know, apparently didn't read too closely, but I've got to think that we are heading into the point where the idea of wrapping this up one way or another is kind of impinging on that by getting too close to the midterm election.

And just one last thought, whatever the legal rationale, the idea that a sitting president would refuse to answer questions from a special counsel about something as significant as potential foreign interference in an American election, you really do have to wonder how that would play out among voters outside of the President's base and how it would be received by those Republicans in the swing districts who are feeling even more endangered after the party's close call in Ohio yesterday.

BLITZER: Because the argument being if you got nothing to hide, what's the big deal about sitting down and just simply telling the truth, the whole truth and nothing but the truth? Sabrina Siddiqui, how do you see it?

SABRINA SIDDIQUI, POLITICAL REPORTER, THE GUARDIAN: Well I think that if you look at the ways in which the President and his allies have repeatedly attacked the Special Counsel and the investigation, it's clear that their efforts are a lot more focused at this point on persuading public opinion and certainly bears repeating that there's no evidence to support the President's that there are some sort of widespread bias against him. But certainly polling has shown he's been able to keep the Republican base intact.

Now, as Ron is pointing out, that does not necessarily extend to the general electorate and I think it's also very striking that the President's legal team clearly do not want him to sit down with the Special Counsel. You've heard Rudy Giuliani constantly talk about perjury traps when it comes to questions around obstruction of justice. So it's also very telling that the real issue here is that the President's legal team doesn't trust their client to tell the truth.

BLITZER: At what point does Mueller issue a subpoena and how threatening, how much of a problem, Laura, would that be for the President?

LAURA COATES, FORMER FEDERAL PROSECUTOR: The second that Mueller realizes any negotiations are now done in bad faith that are simply a delay tactic and not part of a good faith negotiation process, he is entitled to try to secure a subpoena and get it compelled and likely he would win at the Supreme Court level. It just that it'd be a longer, drawn-out battle. And the point of the issue of the September and why the DOJ guidelines are important here, I know that midterm elections are in November, but because there's early voting in certain states, again, in September, that's why that September date is so important.

But it's arguable whether or not the President who is not on the ballot would have a valid basis to say that a probe investigating members of his own campaign none of whom on a ballot would be undermined in this election cycle. So there is an argument to be made that Mueller's probe can continue even through September, October and November.

BLITZER: Speaking of election cycle, Gloria, what do you make of last night, the results in two important races in Ohio, the 12th congressional district? The Republican right now slightly ahead by about 1,700 votes, Troy Balderson over Danny O'Connor, the Democrat, still about 8,000 votes that have to be counted absentee ballots. And in Kansas, the Secretary of State Kris Kobach, he's slightly ahead by 191 votes over Jeff Colyer. President Trump endorsed Kris Kobach. What are your big takeaways from last night?

BORGER: Well, first of all, Ohio shouldn't have been a race, you know? This was a place that Donald Trump won by 11 points. This has been a reliably Republican district for more than three decades. And I think that the fact that the Democrat has come that close means that if I'm a Republican and I'm running in a suburban district, I'm worried. I'm scared because this race should have -- just shouldn't even been there.

[17:35:02] So I think that, you know, if you're a Republican now, you have to decide how close you cozy up to the President, whether he helps you or whether he hurts you. And the big issue here as it always is in midterm elections is motivation. And if you looked at the numbers in the state of Ohio as we did last night, Democrats said 66 percent of Democrats in this special election in the middle of August said that they were motivated to go out and vote. So I think you have to kind of multiply that when you get to a real election, a general election. And if I'm a Republican, I'm nervous about losing the House.

BLITZER: How do you see it, Ron?

BROWNSTEIN: You know, yes, I basically agree. I mean, I think this election told us a lot because it confirmed the most important patterns we've been seeing in the other big elections since Trump took office such as the Alabama Senate race and the Virginia governor's race and it's really kind of a split level result. On the one hand, we saw the Republicans continuing to consolidate their hold on small town and rural areas. Balderson won, there are five of the seven counties in this district are blue collar, more rural counties. And Balderson won 62 percent in there, you know, not much different than what Donald Trump did in 2016 and significantly better than Mitt Romney did in 2012.

The catch is that the other side of the equation is very real too, which is that Trump regressed significantly compared to Romney in the suburban white collar parts of the district, and Balderson did even worse. He only won 43 percent of the combined vote in the two big suburban counties that cast the most ballots. So what that tells you, as Gloria said, is that if you're looking at the Republicans who are defending white collar districts and places with a lot of college educated white voters, where Trump is underperforming really almost any previous Republican president they have a lot to worry about.

On the other hand, i think democrats still facing a significant headwind in a lot of small town districts, some of which they have put good candidates on the board and they have real opportunities. And I think that on balance you'd say this strengthens the case of Democrats or the favorites to win the House, but you could end up with a big divide after this election between the Democratic Party that is dominant in metro areas, or Republican Party that is dominate outside of them and a real tough time finding common ground between the two.

BLITZER: Ron, 90 days a week from the midterm elections. Guys, stick around. There's more news we're following including more on the Republican Party's latest political headache as New York's Republican Congressman Chris Collins now faces charges of insider trading and lying to the FBI.

And look at this. What message is North Korea trying to send by showing Kim Jong-un in a t-shirt and smiling?

(COMMERCIAL BREAK)

[17:42:17] BLITZER: We have more now on the breaking news. Republican Congressman Chris Collins of New York pleading not guilty to fraud and other charges connected to alleged insider trading.

Let's bring in our Justice Correspondent Jessica Schneider. Tell us more about this case, Jessica.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Wolf, it really is a stunning indictment for several different reasons. First off, prosecutors in this indictment lay out a litany of phone and e-mail evidence to support their claim that Congressman Collins purposely passed on insider information when he was a member of the board of directors and then lied about it. And secondly, indictments of sitting congressmen really are rare particularly in an election year. The Justice Department tries to avoid prosecutions that could sway voters, but here the U.S. attorney was forceful in charging Collins, his son and his son's soon to be father-in-law.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Tonight, Congressman Chris Collins faces charges of insider trading and of lying to the FBI. The 68-year-old former businessman who served in Congress since 2013 surrendered to the FBI at his attorney's office in Manhattan Wednesday morning and then faced a judge. Collins has accused of giving insider information about pharmaceutical company Innate Immunotherapeutics to his son after Collins learned information before it went public.

GEOFFREY BERMAN, U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: He didn't keep it secret. Instead, as alleged, he decided to commit a crime. He placed his family and friends above the public good.

SCHNEIDER (voice-over): According to the indictment, while Collins was at this carnival theme congressional picnic at the White House, posing for pictures with the President and First Lady, on June 22nd, 2017, he received an e-mail at 6:55 p.m. that the drug trial the company had been banking on failed. At 7:10 p.m., he replied, "Wow, makes no sense".

One minute later, at 7:11, he launched a flurry of phone calls to his son Cameron. When they connected at 7:16, the Congressman allegedly told Cameron the drug trial had failed. The next morning, Collins' son allegedly told his broker to sell and over three days ditched more than 1.3 million shares of Innate stock saving himself a loss of nearly $600,000. And Collins' son allegedly passed on the information to several others also prompting them to sell.

UNIDENTIFIED MALE: The illegal trading of that information.

SCHNEIDER (voice-over): The company didn't publicly announce the drug trial's failure until June 26th.

STEVEN PEIKIN, CO-DIRECTOR OF ENFORCEMENT, U.S. SECURITIES AND EXCHANGE COMMISSION: The defendants and their T.P. is accounted for over half of Innate's entire trading volume on the first trading day after they got the news.

SCHNEIDER (voice-over): Collins, his son and his son's fiancee's father were all questioned by the FBI in April and are now charged with lying about what really happened.

WILLIAM SWEENEY, ASST. DIRECTOR, FBI NEW YORK FIELD OFFICE: Here's a better inside tip for those who think they can play by a different set of rules. Do not lie to special agents of the FBI.

SCHNEIDER (voice-over): Collins was already under investigation by the office of Congressional Ethics for promoting Innate, denying to Wolf Blitzer that he had encouraged former Health and Human Services Secretary Tom Price or anyone else to purchase its stock. WOLF BLITZER, CNN ANCHOR: Did you encourage him to buy stock in this

company called Innate Immunotherapeutics?

REP. CHRIS COLLINS (R), NEW YORK: No, absolutely not. Every -- there was nothing done that was insider trading or unethical.

We know in western New York know Donald Trump is not merely a candidate. Donald Trump is a movement.

SCHNEIDER (voice-over): Collins was the first congressman to endorse the President and has been active throughout his presidency.

COLLINS: This is really our Trump caucus reconvening.

SCHNEIDER (voice-over): But, now, the Buffalo area congressman is up against serious charges from the top New York City federal prosecutor who was interviewed by the President himself and ultimately appointed by Attorney General Jeff Sessions.

GEOFFREY BERMAN, UNITED STATES ATTORNEY FOR THE SOUTHERN DISTRICT OF NEW YORK: The charges today demonstrate, once again, that no matter what the crime and no matter who committed it, we stand committed in the pursuit of justice without fear or favor.

(END VIDEOTAPE)

SCHNEIDER: And in court today, Congressman Collins, his son, as well as Stephen Zarsky, they all pleaded not guilty and each posted half a million dollars bond. They also surrendered their passports.

Now, Congressman Collins is expected to make a public statement at 6:30 tonight.

And, Wolf, earlier today, his lawyers released a statement saying that they would mount a vigorous defense here so it remains to be seen what the Congressman will say at this statement at about 6:30 tonight.

BLITZER: We will see what he says. We'll have coverage of that, obviously, as well.

Thank you very much. Jessica Schneider, reporting for us.

Coming up, North Korea's latest propaganda shows Kim Jong-un going rather casual. Is he serious about keeping the promises he made during his summit with President Trump?

(COMMERCIAL BREAK)

[17:51:41] BLITZER: Tonight, there's growing pressure for the Trump administration to show it's making progress, diplomatic progress, with North Korea. It comes amid signs Kim Jong-un is not delivering on his promise to get rid of his nuclear weapons.

CNN's Brian Todd has been checking with his sources.

Brian, what are you hearing? BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight, there is a palpable

sense that President Trump, Mike Pompeo, and their team have to take back the momentum in this process.

Pompeo is taking a pounding recently while Kim Jong-un, predictably, is exuding confidence.

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TODD (voice-over): Kim Jong-un goes casual, sporting a white t-shirt and a straw hat with his wife, Ri Sol-ju, by his side. The dictator was all smiles as he visited a fish pickling facility.

FRANK JANNUZI, PRESIDENT AND CHIEF EXECUTIVE OFFICER, THE MAUREEN AND MIKE MANSFIELD FOUNDATION: You're looking at Kim Jong-un's excellent summer vacation. That is not a man who is worried about war coming next week or next month. He is feeling secure and confident.

TODD (voice-over): The strongman's swagger could come from a sense of being on equal footing with President Trump. The two exchanged letters in recent days, U.S. officials hand-delivering Trump's letter to Kim Jong-un this weekend.

A source close to the North Korean side has told CNN Kim's regime believes there is a strong possibility of a second summit between the two, possibly later this year.

National Security Advisor John Bolton says, for now, a visit from Trump's top diplomat might work best.

JOHN BOLTON, NATIONAL SECURITY ADVISOR: Secretary of State Mike Pompeo is prepared to go back to North Korea to meet with Kim Jong-un. We've proposed that in our most recent letter from the President to Kim Jong-un. The President is prepared to meet at any point.

TODD (voice-over): Tonight, analysts say there is significant pressure on President Trump and Mike Pompeo to move the nuclear needle with North Korea.

JANNUZI: The Trump administration clearly is feeling some pressure. They need to see North Korea take some tangible step toward denuclearization.

Everything they've done so far, whether it is blowing up tunnel entrances on a nuclear test site or dismantling one missile engine test facility instrument, none of that goes to the heart of the matter.

TODD (voice-over): And the heart of the matter, experts say, is getting Kim's regime to stop producing plutonium, uranium, the fissile material for nuclear bombs.

The pressure on Trump and Pompeo also stems from the recent bruising they've taken. Pompeo was embarrassed in Pyongyang last month when he showed up with an Elton John "Rocket Man" C.D. for Kim but didn't get a meeting with him. JOSEPH YUN, FORMER UNITED STATES SPECIAL REPRESENTATIVE FOR NORTH

KOREA POLICY: He got nothing and then, you know, what he did is insulted. I don't think this was a good visit at all.

TODD (voice-over): Then there was the hammering Pompeo got from Democratic senators.

MIKE POMPEO, SECRETARY OF STATE: They have agreed to denuclearize fully, yes, Senator.

SEN. BOB MENENDEZ (D), NEW JERSEY: OK. But what we don't have --

POMPEO: Yes, it includes - and it certainly includes - it certainly includes the full measure --

MENENDEZ: Well, I would love for you to come to a classified setting and tell all members what exactly transpired because we don't know.

TODD (voice-over): Experts give the President and his team credit for ramping down military tensions with Kim. But they say the current pressure on the President could stem from his own bravado.

YUN: Well, he has promised too much that he, perhaps, could not deliver. He has promised there would be a different relationship, that their security issues will be addressed, but he hasn't made any move to that.

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TODD: Now, what some analysts are most worried about tonight is that if this diplomatic offensive with North Korea fails and denuclearization doesn't happen, that President Trump could somehow feel personally betrayed by Kim Jong-un, that the personal insults between them will resume.

[17:55:06] And the possibility of military confrontation will return on an even more frightening level than it was before -- Wolf.

BLITZER: Very disturbing, indeed. All right, Brian, thank you. Brian Todd reporting.

Coming up, breaking news. Pushed by Congress, the Trump administration announces new sanctions on Russia after concluding that Vladimir Putin's government used a deadly nerve agent to attack a former spy and his daughter in Britain.

And President Trump's lawyers counter the latest interview offer from Special Counsel Robert Mueller. Will they give him any latitude to question the President or force him to issue a subpoena?

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