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Rep. Chris Collins Tweets He Will Seek Re-Election; Interview With California Congressman Eric Swalwell; U.S. to Sanction Russia Over Nerve Agent Attack; Republican Congressman Charged With Insider Trading. Aired 6-7p ET

Aired August 8, 2018 - 18:00   ET

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


[18:00:15]

WOLF BLITZER, CNN ANCHOR: Happening, breaking news: new sanctions. The Trump administration punishes Russia for the poisoning of the former Russian spy in Britain with the Soviet era news -- nerve agent last spring. Congress has been pushing for the sanctions ever since. Why did it take the administration so long to sign off on them?

Answering Mueller. Facing the threat of a subpoena, President Trump's lawyers present a very limited offer to Robert Mueller for terms of an interview. Is the president's legal team negotiating in good faith and why are they so worried about perjury and obstruction of justice?

The tip-off. The first member of Congress to endorse Donald Trump charged with insider trading on a drug stock sale that helped his son and others. Tonight, Congressman Chris Collins is vowing to fight the charges and still run for reelection.

And pen pals. Republican Senator Rand Paul visits Russia and reveals he brought a letter from President Trump to Vladimir Putin. The White House says it was just a letter of introduction. Why does Rand Paul want to meet the Russian president?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following multiple breaking stories tonight, including the State Department just announcing new sanctions against Russia over the nerve agent poisoning of a former Russian spy living in the U.K.

Also, Republican Congressman Chris Collins pleading not guilty to charges of insider trading and lying to the FBI.

We will talk about the breaking news with Congressman Eric Swalwell of the Intelligence and Judiciary Committees, and former U.S. attorney Preet Bharara. And our correspondents and analysts are also standing by.

First, let's go to our senior White House correspondent, Jeff Zeleny.

Jeff, Russia is figuring prominently in President Trump's working vacation at his New Jersey gulf club.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Wolf, good evening.

Russia is hanging over this administration on several fronts tonight, first those new sanctions that are scheduled to go into effect in about two weeks or so. This I all after the U.S. government's formally acknowledged Russia's role in the chemical weapons attack last spring in Great Britain.

Now, this is all coming again as the White House is increasingly focused, or at least the president is -- he's talked so much about sitting down to testify with Bob Mueller. Tonight, Wolf, that looks increasingly less likely.

(BEGIN VIDEOTAPE)

ZELENY (voice-over): The Trump administration tonight is set to hit Moscow with new sanctions aimed at punishing 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 violence of international law."

The U.S. government condemned the attack after it happened in March, but did not unveil sanctions until today. For more than a month, Congress had 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 development developments in the ongoing Russia investigation.

President Trump's lawyers extending a new counteroffer 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 (R), FORMER MAYOR OF NEW YORK: We have now given him an answer. He -- obviously, he 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, but revealing no hint of their 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 -- what he already has.

ZELENY: He said the probe should be finished by September 1. Yet the timeline 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 out of 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 in its inquiry into Russian interference in the 2016 election.

Unclear whether Assange, who is 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.

[18:05:01]

This WikiLeaks stuff is unbelievable. This WikiLeaks is like a treasure trove.

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 supporters, charged with 13 counts of securities fraud, wire fraud and making false statements in the 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: So the White House in the president have not responded to be insider trading charges there for one of the president's top advisers, Wolf.

But it is still Russia that is hanging over the president on a variety of fronts. But as for that potential interview, Rudy Giuliani is saying that he wants to avoid a perjury trap potentially, and not have the president sit for an interview on questions he's already answered.

So, Wolf, as they go back and forth, this has been one of the longest and hottest negotiations of the summer. Again, it increasingly looks like it's less and less likely to happen, no matter the president saying repeatedly he would like to sit down with Bob Mueller -- Wolf.

BLITZER: All right, Jeff, thank you, Jeff Zeleny reporting.

Let's get some more on the breaking news.

Our chief national security correspondent, Jim Sciutto, is with us.

First of all, Jim, what do you make of the timing of these sanctions against Russia?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, it appears the administration was feeling some of the pressure from within its own party, this letter from Ed Royce pushing for them to put these sanctions on.

But also we should remind our viewers that these sanctions are actually required by law. It was a 1991 law that requires the U.S. to act when it determines that a foreign power has used chemical weapons, as the Trump administration blamed Russia for this attack some two months ago, three months ago, rather, and by this law should have imposed these sanctions about a month ago.

So they're -- they're bit late on this. Their hands are tied on this. It's required by law. The big test, though is going to be -- is going to come if Russia does not meet the next round of requirements under this, including allowing inspections of its chemical weapons facilities.

In 90 days, the administration is going to have to impose much harsher sanctions, including possibly the end of diplomatic relations. That'll be a big test for this administration.

BLITZER: And we're also learning more now about Senator Rand Paul's visit to Moscow, the letter he brought to the Putin government from President Trump. We're getting some more information all of that.

What are you hearing?

SCIUTTO: That's right. We now have the contents of that letter that he carried, and it's apparently not as advertised.

Based on the tweet from Rand Paul, it appeared possibly that this was some communication between Trump and Putin. But it appears that President Trump wrote something of a letter of introduction for Rand Paul, who wanted to get a meeting with Putin during his trip to Moscow. He mentions a number of things he wanted to talk about, legislative exchanges, cultural exchanges, the conflicts in Syria and Ukraine.

One thing not mentioned in the letter, Russia's ongoing interference in the U.S. elections and the political process.

(BEGIN VIDEOTAPE)

SCIUTTO (voice-over): Tonight, Republican Senator Rand Paul announcing he delivered a letter to Russian President Vladimir Putin which he claimed was from President Donald Trump, tweeting -- quote -- "The letter emphasized the importance of further engagement in various areas including countering terrorism, enhancing legislative dialogue and resuming cultural exchanges."

The White House, however, says the letter was written at the request of the senator, not the president, to help Paul obtain a meeting with Putin that has not happened during his solo trip to Russia.

President Trump provided a letter of introduction, Hogan Gidley, deputy press secretary, said in a statement. In the letter, the president mentioned topics of interest that Senator Paul to discuss with President Putin. Senator Paul and Mr. Trump, however, share an interest in improving relations between the U.S. and Russia. While in Moscow, Paul spoke of the need for diplomacy.

SEN. RAND PAUL (R), KENTUCKY: Diplomacy, conversations, dialogue, communication, all of that is incredibly important, and my goal in coming to Russia is to say that we want to have open lines of communication.

SCIUTTO: However, Paul did not answer CNN's question when asked if he confronted Russian officials about Russia's ongoing interference in U.S. politics.

QUESTION: Senator, did you speak about election interference as well? Did that come up?

PAUL: We had general discussions of a lot of issues. And, basically, we have decided that, right now, what we're trying to do is have dialogue. And I don't think we solve issues, other than -- see, our biggest issue right now is no dialogue. Is isn't the issues at hand.

SCIUTTO: Paul's apparent lack of urgency stands in sharp contrast to the nation's senior-most national security officials.

Just last week, they delivered the stark warning that Russian interference remains pervasive today.

DAN COATS, U.S. DIRECTOR OF NATIONAL INTELLIGENCE: It goes beyond the elections. It goes to Russia's intent to undermine our democratic values.

(END VIDEOTAPE)

SCIUTTO: Putin's press spokesperson says that they handled this letter from the president re: Senator Paul through normal diplomatic channels, did not give, it appears, Wolf, any official response. And Rand did not get his meeting with Putin, as he wanted.

[18:10:01]

BLITZER: On a different issue, I know you're -- you're getting word on the latest information involving the Senate Intelligence Committee.

They'd like to interview the WikiLeaks founder, Julian Assange, about Russian interference in the 2016 election. What are you hearing about that?

SCIUTTO: That's right.

In fact, it's WikiLeaks that announced this request coming from the Senate Intelligence Committee. The Senate Intelligence Committee itself has not commented on this. WikiLeaks saying that they have been asked to be interviewed by the Senate Intelligence Committee.

Of course, as you may remember, U.S. intelligence views WikiLeaks as what's known as a cutout, that they acted as a middleman, that Russia during the election stole this information from the Democratic Party, and then, Wolf, handed it on to WikiLeaks, which then released that information.

I have spoken to Julian Assange's lawyers on this. They haven't said whether they have made a decision to accept this request. But they have said that they are considering it. Some of the questions are going to be, where does it take place?

Because right now, as you know, Julian Assange just taking refuge in the Ecuadorian Embassy. Would he leave the embassy to do this interview? That opens up a whole host of other issues. For instance, would the U.S. try to extradite him if he were to do so?

BLITZER: And would the British arrest him if he were to do?

SCIUTTO: Absolutely.

BLITZER: All right, thanks very much, Jim Sciutto, with a lot of information for us. Appreciate it.

Let's get some more in all of this.

Democratic Congressman Eric Swalwell of California is joining us. He's a member of both the Intelligence and Judiciary Committees.

Congressman, I want to begin with these new sanctions the Trump administration is now imposing against the Russians for their role in the poisoning of this former Russian spy in the U.K. and his daughter.

Do you support the action taken by the administration today?

REP. ERIC SWALWELL (D), CALIFORNIA: Good evening, Wolf.

I do support additional sanctions. And, thankfully, this came at the behest of Congress, who had the deep interest in making sure that Russia was to answer for what they did in Great Britain. And I think additional sanctions are going to be needed, because they continue to meddle in our elections today.

Senator Bill Nelson announced today that he believes Florida's election systems have been penetrated by the Russians. And so it really is when Congress pushes the president and the administration will they act, because I think, left to their own devices, they would just let Russia run wild throughout our democracy and throughout the democracies of our allies.

BLITZER: Let's move on to another sensitive issue.

Do you believe Robert Mueller, the special counsel, should take the deal offered by the president's personal lawyer, Rudy Giuliani, significantly narrowing the scope of a potential interview with the president? SWALWELL: No, Wolf.

We don't allow witnesses or suspects to set the negotiating terms in criminal investigations. And the president shouldn't be treated any differently than any other suspect.

Look, Wolf, this really about, who do you believe? Do you believe Bob Mueller, who has indicted nearly two dozen individuals and obtained five guilty pleas and about to go to verdict with Paul Manafort, or do you believe the president of the United States, who continues to lie and give misleading statements about his involvement with Russia and refuses to sit down and answer the questions that have already been given to him?

I think, right now, Bob Mueller has all the credibility, and he should use that leverage.

BLITZER: How long should Mueller engage in these negotiations with the Trump legal team before issuing a subpoena?

SWALWELL: I'm going to leave that to Bob Mueller.

But, Wolf, Donald Trump is the reason that this is delaying. He is the reason this investigation has not wrapped up. He's been giving -- given the questions. It looks like most witnesses have already been interviewed.

But when you tamper with witnesses, when you lie to investigators, when you obstruct justice, and you don't sit in the chair, it takes a lot longer.

BLITZER: Let's turn to another important story. You just heard Jim Sciutto report on it. The Senate Intelligence Committee has apparently requested that the WikiLeaks founder, Julian Assange, make himself available for an interview regarding Russian interference in the 2016 election.

Do you think Assange has valuable information?

SWALWELL: I do, Wolf.

And if you remember, it was back in October of 2016, just as we were hearing candidate Trump's words, as he was talking to Billy Bush and describing women in such awful ways, just hours after that video was made available, WikiLeaks started to dump the documents that were stolen from John Podesta by the Russians.

And so there is a connection between WikiLeaks and the Russian stealing and hacking in the last election. And I think there's a lot of questions that need to be answered by them.

BLITZER: As you know, Assange has taken up refuge at the Ecuadorian Embassy in London. Do you think he would be willing to risk his freedom to do so to leave that embassy to do this kind of interview with the members of the Senate Intelligence Committee? SWALWELL: Well, if he's interested in telling a truthful story and

has nothing to hide, I think that he would. I think he has other legal problems as well.

But I think the Senate will probably show some flexibility, because his testimony -- and also comparing his testimony to what we know about what Roger Stone was doing with WikiLeaks and Guccifer 2.0 would shed a lot of light on what was happening with the Trump administration, their campaign and WikiLeaks.

[18:15:00]

BLITZER: Congressman Swalwell, thanks so much for joining us.

SWALWELL: My pleasure, Wolf.

BLITZER: Just ahead, more on the arrest of one of President Trump's closest congressional allies, Congressman Chris Collins. We're standing by to hear from him this hour.

What will he say about his political future?

(COMMERCIAL BREAK)

BLITZER: Breaking news tonight, we're standing by to hear from New York Republican Congressman and close Trump ally Chris Collins, who pleaded not guilty today, just a little while ago, indeed, to charges of insider trading and lying to the FBI.

[18:20:03]

Our national correspondent, Brynn Gingras, is outside the courthouse in New York where Collins was arraigned.

Brynn, Collins is free tonight on half-a-million-dollar bond.

BRYNN GINGRAS, CNN CORRESPONDENT: Yes, that's right, Wolf.

All three men are. And they had to turn in their passports, the congressman's diplomatic passport. They appeared before a judge and appeared calm when they said they were not guilty. But according to the U.S. attorney's office, these three men were anything but calm upon hearing that the drug trial failed for this drug that they were heavily invested in. And then the U.S. attorney's office laid out a timeline of the steps

they took to unload their stocks to save them hundreds of thousands of dollars. The U.S. attorney's office saying that they thought they were above the law.

(BEGIN VIDEOTAPE)

GINGRAS (voice-over): Republican Congressman Chris Collins, the first member of Congress to support Donald Trump, arraigned in federal court after federal prosecutors charged him, his son Cameron, and another man, Stephen Zarsky, with 13 counts of securities fraud, wire fraud and making a false statement to the FBI. The charges stemming from an alleged insider trading scheme, which

partially played out on the South Lawn of the White House last year, according to court documents.

At the center of it all, an Australian pharmaceutical company called Innate Immunotherapeutics, where Collins was a board member.

BERMAN: Congressman Collins was told some confidential and highly sensitive information about Innate, information that was not yet made public, namely, that Innate's main drug, the drug Innate was developing to be the backbone of its company, was a total failure.

GINGRAS: According to the 30-page complaint, that conversation happened while Collins attended the annual congressional picnic at the White House.

Federal prosecutors say Collins received an e-mail at 6:55 p.m. that the drug had failed it's trial. At 7:10 p.m., Collins responded to the e-mail and then proceeded to try to reach his son Cameron, the two placing six calls over a period of five minutes.

Later that night, Cameron drove to the home of Stephen Zarsky, the father of his fiancee, and at 9:34 p.m., Zarsky's wife placed to call to their stockbroker to sell shares of the company, according to the complaint.

Prosecutors allege that between the opening of the market on Friday, June 23, and the close of business on the following Monday, Cameron Collins sold a total of nearly 1.4 million shares of Innate. All in all, prosecutors allege that Collins and the other defendants avoided more than $750,000 in losses on the stock.

WILLIAM SWEENEY, FBI; Here's a better insight tip for those who think they can play by a different set of rules. Access to this kind of information carries with it significant responsibility, especially for those in society who hold a position of trust. Act honorably and in accordance with the law and do not lie to special agents of the FBI.

GINGRAS: Collins has been dodging ethics questions about his activities with Innate for over a year.

BLITZER: Congressman Tom Price, a friend of yours, colleague, nominated to become secretary of Health and Human Services, he was facing some serious questions, ethics questions, after acting on a stock tip from you. This is what all came up in the hearing.

Did you encourage him to buy stock in this -- in this company called Innate Immunotherapeutics?

REP. CHRIS COLLINS (R), NEW YORK: No, absolutely not. There was nothing done that was insider trading or unethical. I have been involved with Innate Immunotherapeutics in New Zealand and Australia for almost 15 years. I'm the largest shareholder. And I talk about it all the time, just like you would talk about your children.

GINGRAS: Collins, who represents Upstate New York, became a frequent Trump's surrogate on cable news during the 2016 campaign. His lawyers saying in a statement -- quote -- "We will answer the charges filed against Congressman Collins in court and will mount a vigorous defense to clear his good name. We are confident he will be completely vindicated and exonerated."

(END VIDEOTAPE)

GINGRAS: And the congressman has been known to tout this company to members of Capitol Hill. We saw that happen again, Wolf, in that interview with you in 2017.

And we asked the U.S. attorney's office if we could expect more indictments down the road of either people on Capitol Hill, maybe someone in the Trump administration or former Trump administration, and it was a stronger no comment from the U.S. attorney's office.

Of course, you saw that statement from the congressman, but we are expecting more words from him about this and these allegations at a press conference supposedly starting very shortly -- Wolf.

BLITZER: Yes, momentarily, supposed to start in Buffalo, New York. I will see what he asked to say. We will have live coverage.

Brynn Gingras, thank you very much.

Let's dig deeper into the case with CNN senior legal analyst former U.S. attorney Preet Bharara.

Preet, what's your analysis of this indictment against this Republican congressman, Chris Collins from New York, his son, another individual? What stands out to you?

[18:25:02]

PREET BHARARA, CNN SENIOR LEGAL ANALYST: Well, that office, as you may remember, has a lot of experience doing insider trading cases.

We presided over scores and scores of such cases. And even against that backdrop, and given the experience that I had as a U.S. attorney there, this is an extraordinary document.

The timeline that was laid out by the report a couple of minutes ago is incredibly incriminating. It doesn't seem like there are wiretaps in this case, like we had in some of our cases.

But the mere fact that someone gets terrible news about a company in which he is an investor and a member of the board, literally replies to the e-mail, saying, how could this be true, one minute later sends an e-mail to his -- I'm sorry -- calls his son from the White House lawn, no less, they engage in phone tag, and then there's a conversation that lasts for six minutes, even if it's not recorded, I think a reasonable juror, if there's a trial in this case, would surmise, given that the stock was then traded later, and losses were avoided, that the only thing that could have happened in that case was an insider trading offense. It reminds me a lot actually of a particular case that we had when I

was in the office against a very significant figure in finance named Rajat Gupta, who was at one point the head of McKinsey and, during the relevant time period of our case against him, was on the board of directors of Goldman Sachs.

And he's at a board meeting of Goldman Sachs, gets inside information, and within minutes, almost the same kind of parallel case that you see here, made calls to somebody named Raj Rajaratnam, and then you saw trades made based on the inside information.

There was no wiretap. So you couldn't prove beyond a reasonable doubt what was in fact said to the letter on the phone calls, but a jury found that very kind of very persuasive and convicted him.

And the other thing I will say that's sort of bizarre here -- you're used to seeing criminal defendants engaged in bad behavior. Usually, they're not people who have won the trust by being elected to Congress in this way. That's a relatively rare phenomenon.

But this was not somebody who was off the radar screen. As you pointed out in the report a second ago, he was on notice that he was under ethical review, that people were looking at his finances, that people were looking at his association as a board member and as a proponent of buying stock in this company.

And you are basically put upon notice in the interview six months before the crimes that are enunciated in this indictment were committed. And in that context, to brazenly go forward and create a phone toll, set of proof for prosecutors to use to devastating effect in this indictment is mildly surprising to me.

I'm not often that surprised.

BLITZER: And we're showing our viewers live pictures coming in from Buffalo, the statement that's coming forward from Chris Collins. We will have live coverage of that. We will see what he announces.

You speak about that this issue was discussed pretty regularly, even before the stock collapsed in the aftermath of that clinical trial failure for a cure for certain form of M.S.

I want you to listen to this exchange I had, Preet, with Congressman Collins. This was in January of 2017.

(BEGIN VIDEO CLIP)

BLITZER: Were you telling other constituents, friends of yours to go ahead, this is a great stock, go buy it?

COLLINS: I never said to buy it or it's a great stock. I talked to them about the great work this company's doing, the market for secondary progressive M.S.

And, yes, there are many hundreds, 50, 100 people from Western New York, friends, family and so forth, who decided on their own this was a pretty darn good investment. And it certainly turned out...

(CROSSTALK)

BLITZER: Because you saw the stories in Politico, "The Washington Post" saying that you were bragging to your friends how many millionaires emerged from this company.

COLLINS: Well, I wouldn't use the word bragging. It was kind of a factual -- somebody called. I got off the House floor. I was speaking to him on the phone. He was talking about the price of the stock and how many of our good friends -- I mean, 50 good friends, all investors for 11 years.

(CROSSTALK)

This is not like...

(CROSSTALK)

BLITZER: And they all became millionaires as a result of this one stock?

COLLINS: Many of them did, because they were buying it at 15 cents, and it was trading at $1.10.

So that was...

BLITZER: Big return.

(END VIDEO CLIP)

BLITZER: We should out that this interview was in January of 2017, Preet.

That is several months before the allegations contained in the formal indictment released today, which date from June of 2017.

But listening to Collins during that interview, he was bragging about making his friends, family millionaires based on this stock tip. Would that kind of behavior put Collins on investigators' radar?

BHARARA: Yes.

And consider me old-fashioned and quaint in a way, but I don't think that sitting congressmen should be on boards of publicly traded companies. I don't think sitting congressmen should be making stock tips.

I, in fact, don't think sitting congressmen, although they're allowed to, should own individual stocks when they're in a position to engage in legislation and impose regulations on the industries where they own stock.

And you see here, as I was saying a few minutes ago, you were basically telling him that he is on the radar screen for potential insider trading. He is telling you, whether it's believable or not -- I don't know -- he's been charged with lying to the FBI.

And you're perhaps more formidable than the average FBI agent, but I don't know necessarily that he wasn't lying to you either. And even after all of that, he decides to engage in this behavior, in part because I'm sure he felt bad because he couldn't sell his own stock and lost millions of dollars. And for this will be part of the defense that he brings to bear, although I don't think it's of any legal consequence.

He had encouraged other people to invest in the company include his son and including it seems the father of his fiancee, and some other folks who are not identified in the indictment, and wanted to give them the ability to get out of the stock.

Now, I don't know if he told some of the other people he was boasting became millionaires. If he told some of them also to get out of the stock, and maybe other choose to drop still.

WOLF BLITZER, CNN ANCHOR: Yes. In his statement, his lawyer's statement, they pointed out he didn't sell his own stock when he got the bad word that the clinical trial had failed. But the allegation -- the assertion in the indictment is that he told his son who immediately began to sell a lot of stock and wound up saving hand a million dollars.

BHARARA: Yes. And that's not required. You know,, in insider trading, there's a tipper, usually, person who gives the information, and the tipee, the person who receives the information then sells. So it's not necessary to be, you know, guilty of criminal conduct in insider trading area to have actually trade. In the same way, if you hire a hitman to kill someone, just because you weren't the shooter doesn't mean you're not guilty of conspiracy to commit homicide.

BLITZER: Federal prosecutors are typically reluctant because, for a judge to indict elected officials just months before an election, he's up for reelection in November. Justice Department guidelines recommend, they avoid taking steps, they could sway voters decisions. So what do you make of the timing of this arrest?

BHARARA: Well, you know, there still a number of months before the election. It sounds like they have, you know, come to the end of the investigation. They have, based on the allegations that you see, and again he's presumed innocent. But if you believe the allegations and my old office is very careful, they have all the evidence and they thought this was a good time to bring it.

You know,, it's difficult to decide when is a good time to bring a case against a sitting congressman, given the terms that they serve are only two years. So pretty much time other than right after being sworn in, it's not going to be too far away from an election. And so I'm sure they were cognizant of it, really they took care to do, you know, what was right.

I believe it must be true that they consulted with folks at the public integrity section, that main justice as you would in a case where you are bringing, you know, a charge against a sitting member of Congress. And there were discussions about it and it was deemed appropriate and they -- I'm they crossed every T and dotted every I.

BLITZER: And we're showing our viewers once again those live pictures coming in from Buffalo, where Chris Collins, the congressman is about to make a statement. We'll see what statement is. We'll have live coverage of that.

As we await the start of that event, Preet, let me to another important story we're following. Rudy Giuliani, the President's personal lawyer has laid out what is described as a counter offer significantly narrowing the scope of a potential interview that the President would grant the special counsel.

As a former prosecutor, would you ever accept the terms on the table and we pretty much know what Rudy Guiliani is seeking?

BHARARA: Probably not. I mean, at some point it becomes an exercise in futility and gamesmanship, mostly on the part of the Trump team. I think when you're investigating openly and overtly like they are here, conduct by people close to a powerful figure like the president, you want to afford that person who is, you know, a subject of the investigation in all likelihood, the opportunity to give you information, to explain conduct, to fill in some gaps.

And so part of it is the opportunity for them to explain to the prosecutor why there's nothing to see here and to be on your merry way. So part of it is that. On the other hand, you don't want to limit -- and at the same time you want to provide courtesy. That is not an abnormal thing to do in terms of time and scope because the person whether it's a governor or mayor or the president of the United States, as a routine matter, you allow some courtesies, with respect to, you know, what the limitations might be on the interview.

But there comes a point where it becomes silly and absurd, I think particularly, when there continues to be this back and forth by the president's lawyer fairly bellitherently in a self-contradictory way on the airwaves every Sunday and in the evening on programs like yours and others.

So, you know, I think that Bob Mueller would prefer to have the opportunity to interview the President. I don't know if they're going to get there through this negotiated process. And then Bob Mueller has to decide whether or not his folks are going to serve a subpoena. And, you know, when people ask the question, why not just serve the subpoena already. Well, that's going to end up getting mired in litigation for a longer period of time.

The last time there was a subpoena issued to a president, the cause the negotiation happened, and the subpoena was withdrawn, and there were limitations that were put into place with respect to what kind of testimony the prosecutor could get from Bill Clinton at that time. And I suppose what we're heading in that direction and I wouldn't be shocked if we saw that happen here as well.

BLITZER: Giuliani says he wants to avoid what he calls a perjury trap. What do you make of that? BHARARA: You know, as a sitting president of the United States, if he tells the truth, there is no perjury. If he tells the truth, there is no trap. So, you know, for a person who thinks that he has the ability to convince people to his point of view and a person who continues to say that he did nothing wrong.

[18:35:03] He should just talk, he should talk to the special prosecutor and not worry about these legalisms that Rudy Guiliani may or may not understand well.

BLITZER: Do you think, Preet, that Robert Mueller really even needs the President's testimony to conclude his investigation?

BHARARA: Yes. As I said, I think he would prefer it. I think he always want at the end of the day to have the opportunity to hear directly from, you know, as the phrase goes, the horse's mouth. Why did you engage in this conduct, why did make this decision and who did you consult, what was in your mind when you thought about these things, what did you mean when you told Lester Holt this and that, in part to see what they say. And to make sure you're investigation is complete.

At the end of the big investigations that conducted overtly, remember a lot of investigations are conducted in secret. You want to avoid the other side, the opportunity to explain and to also to, you know, to see if you can build your case. So I don't if Bob Mueller needs it. I think he would prefer it. And if he does need it, he'll issue a subpoena.

BLITZER: Preet, I want you to stand by, we're waiting to hear from Congressman Chris Collins. He's going to be making a statement on these charges that were leveled against him, his arrest today. I want to get your thoughts afterwards. We'll take a quick break and we'll be right back.

(COMMERCIAL BREAK)

[18:40:53] BLITZER: Standing by for a live statement from New York Republican Congressman Chris Collins who pleaded not guilty today to charges related to insider trading and lying to the FBI. We'll have live coverage of that. Stand by.

Also tonight, President Trump's lawyer Rudy Guiliani sats Mr. Trump's legal team has responded to the Special Counsel Robert Mueller about a possible interview with the President for the Russia investigation. Let's dig deeper with our correspondents and analysts.

What do you think, Dana, I know you're doing a lot of reporting on this. Is it really realistic that the President ever is going to do this kind of sit down interview without a subpoena, without a court decision saying he must do so?

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Well, if you give truth serum to anybody around the President both in his legal team and maybe more importantly his friends and family and political advisers, they're answer is we sure hope not. But the man himself, the President, continues to say he wants to testify. And that is why they're going through this very lengthy dance, frankly, with Robert Mueller and his team back and forth, proposals and counter proposals. And that's why they responded today.

We don't know the details. But we do know that this is the latest attempt to narrow the scope of the subject matter of the kinds of questions that the President could or would get in any interview. And it's just an open question whether or not Robert Mueller is going to continue these talks or he's going to say, never mind, I'm going to try to get a subpoena going. Or never mind, you know what, I'm going to give up and write a report without the President. We don't know.

And more importantly, the President's legal team really doesn't know. They don't know what he's willing to do and what not to do, which is why they have no choice, because of their client's wishes and to keep the negotiations going.

BLITZER: What message, David Axelrod, would it send to the American public if the President were to refuse to do a sit down interview with the legally appointed special counsel investigating Russian interference in the US presidential election?

DAVID AXELROD, FORMER OBAMA SENIOR ADVISER: I think the majority of the American public -- it was in a negative message we've seen poll after poll suggesting people think he should, if asked. But to his bases been spending two years setting up a construct that said this is an unfair politically motivated investigation, and if he decides not to testify at his lawyer's behest.

He will undoubtedly play that tune and say that I'm simply not going to submit myself to it. Now, as to what Dana said, you know, I'm not a lawyer, Preet was here previously, I guess he's standing by. No lawyer would suggest given all of the contradictory statements that Donald Trump has made over the last several years, all the self incriminating, seemingly self-incriminating things that he said and tweeted, would have him sit down with Mueller.

But that is the message that it will send to most people which is he's afraid. He's afraid to sit down because it would put him in jeopardy.

BLITZER: Fair point. David, you have been studying this very closely. What do you think will happen?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Well, I do wonder, since Rudy Guiliani said a couple of months ago, he thought he saw it as a 50/50 chance that Mueller would actually subpoena the president. And that to me is where this battle could be headed. If they can't come to a conclusion, I do wonder and David rightly notes the polls, if it comes to a subpoena where the President is being asked to testify under oath and he rejects that, the American people will not be on his side on that.

No matter how much he's able to get his base riled up on that, overall the American people, the majority of Americans have clearly said that he should do so. And I think if Rudy puts the stats at 50/50, that that maybe where this is headed. We may see a pretty spectacular battle reach the Supreme Court on this.

BLITZER: On the subpoena, and there are some suggestion, Nia-Malika Henderson, that Mueller doesn't want to see that kind of fight going to the Supreme Court on a subpoena that could take a long, long time.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yes, there is some reporting that he brought it up to President Trump's team and they balked at it and essentially Rudy Giuliani had said, you know, they would take it to court and it would likely go all the way up to the Supreme Court, even though we have had presidents who faced subpoenas before, Clinton faced a subpoena and then he testified willingly.

But sort of the mess of it and the kind of constitutional crisis of it, this idea that maybe Mueller wouldn't want to face that and if finally the courts ruled that he had to, in fact, testify and he still refused, what is the recourse at that point? I mean, is it sort of a contempt of court?

They're not going to jail the sitting president. Maybe there is a fine or something. I mean, Preet could speak to that better. But in the end, maybe he just doesn't testify.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: And the thing to remember is that --

DAVID AXELROD, CNN SENIOR POLITICAL COMMENTATOR: Wolf, you know what --

BLITZER: One at a time. Dana first.

AXELROD: Yes, good. Yes.

BASH: Just that Robert Mueller holds the cards here. And the president's legal team fully concedes that that is the case. He holds the cards.

I mean, they can, you know, put up as many offers and counteroffers as they want but they understand they're limitations. And they also understand that Robert Mueller has a lot fewer limitations as we've been discussing. He can do a whole bunch of things.

And they are really largely in the dark about how far he's willing to go. They're banking on the fact that he wouldn't want to have this lengthy court battle over a subpoena. They don't know that.

BLITZER: Go ahead, David.

AXELROD: Yes. Wolf, one thing I was going to say is an interesting sidelight to this, is this is an issue hanging over the Senate confirmation of Judge Kavanaugh to the Supreme Court because he's made clear that he doesn't think a president should be exposed to subpoenas and potential legal jeopardy while in office. And this is a really, really combustible point on which he's going to be questioned very, very closely.

So the issue of what will happen if there is a subpoena is going to be in the air in Washington in the coming months.

BLITZER: Certainly is. All right. Everybody, stand by.

We're also awaiting the start of this statement that Republican Congressman Chris Collins of New York is about to make about his future and what his steps are going to be. He was arrested today by federal prosecutors in New York City charged with lying to the FBI and engaging in insider trading.

We'll be right back.

(COMMERCIAL BREAK)

[18:52:17] BLITZER: We're standing by for a live statement once again from the New York Republican Congressman Chris Collins who pleaded not guilty today to charges related to insider trading and lying to the FBI. His indictment could impact his bid for reelection in November, at a time when Republicans are seeing new red lights emerging about those midterms. Some candidates backed by President Trump are still locked in cliffhanger races tonight, almost 24 hours after the polls closed.

Let's get some analysis.

Dana Bash, what's your big takeaway from last night?

BASH: That Democrats might not have won and we still haven't called the special election in Ohio. But at this point, obviously, they have not won, and the Republican is ahead.

But what this is doing for the base and it's hard to imagine the Democratic base being more riled up. But my understanding in talking to sources is that it is giving them even more of a feeling of wind at their back. And that is something that is invaluable when you're looking at the kind of race, the kind of election that we are going to see in November.

It is kind of -- it's what the notion of waves are built on. And it's maybe inevitable. Now, I'm not saying that that's going to happen. But that is certainly the feeling that Democrats have looking at this district that was not even remotely in play for almost 40 years for Democrats and they have come within 1,000 votes at this point, maybe fewer, maybe a little bit more at the end of the counting.

So, there is a lot to be said for that. And Republicans are feeling their -- you know, they are kind of licking their wounds. Even though they may keep this in the R column for now, they understand that they need to wake up and they're not sure how that's going to go.

BLITZER: And, David Chalian, we just got some updated numbers on this Ohio 12th congressional district. Let me put them up on the screen. You can see how close it is. Troy Balderson, the Republican candidate, he is ahead now by 1,564 votes. It's gone down a little bit. But there are still 8,000 provisional ballots, absentee ballots that have yet to be counted. DAVID CHALIAN, CNN POLITICAL DIRECTOR: That's right. And you know

that the Democrat Danny O'Connor has not conceded the race at all, so waiting to -- he's saying for all those votes to be counted. But it's a lead that Balderson has. Even if Balderson does emerge victorious here, I think the most Republicans can do, at least the Republicans I spoke to today was sort of wipe their brow that at least they kept the Democrats at the magic number of 23, that they still need 23 net gain seats in November.

But that was about the only thing they claim as victory. Every Republican I spoke to echoed what Dana was saying, which is that this is real concern.

You have to remember, Wolf, that there are, according to "Cook Political Report", 68 seats held by Republicans that are less Republican than this one, that are more favorable Democratic turf towards the Democrats than this one.

[18:55:10] It shows you just how big the battlefield is this year. And that is not a good sign when you are the party in power in that first midterm year.

BLITZER: And, Nia, let's not forget, they're going to have to do a do-over in November in this congressional district.

HENDERSON: Yes.

BLITZER: This is a special election right now. They'll have the full election in November. And both of these candidates will run again.

HENDERSON: Yes, and, Wolf, it won't happen. I mean, certainly, it won't be the sort of emphasis on this race because there will be so many other races all across the country. So, it's going to be difficult to scale that kind of attention, that kind of funding. You have the Republican Party announced like $6 million to save the seat. Everybody poured in there, Donald Trump, pence, everybody trying to save the seat.

I think all the trend lines point to Democrats having quite an edge ongoing into November. It's Democrats and Democrats can sometimes snatch victory from the jaws of defeat. So, we'll see how that happens. But, yes, I mean, all of the trend lines when you look at suburban women, if you look at suburban white women and these white voters in this district that typically voted for Republicans now giving Democrats a real look.

BLITZER: David Axelrod, how do you see all this?

AXELROD: Well, I agree with that. You know, this district has a higher number than the average of college educated voters. The suburban turf did not go as well for Balderson as it has in the past for Republican candidates. He even under performed Donald Trump in those areas.

And that is going to be a major battleground as you look at the races around the country, these suburban areas where college educated voters, excuse me, and particularly women are going to play a big outsized role in these midterms. So, you know, I think it is going to be a battle. And as Nia-Malika points out, Democrats can sometimes fumble the ball away.

But --

BASH: Not you, David.

AXELROD: You have to -- not me, no. But that's especially now that I'm retired from campaigns. But I do think that Republicans are very nervous today and they have a reason to be.

BLITZER: You know, Chris Collins' seat, David Chalian, in western New York, right outside of Buffalo, my hometown, he won by 30 points last and wasn't considered a contest. But, all of a sudden now, it could be a contest, presumably, if he decides to stay in the race.

We don't know what he is about to announce.

CHALIAN: We don't know what he's about to announce.

BLITZER: By the way, he just tweeted, he will seek reelection.

CHALIAN: Oh, there you go.

HENDERSON: There you go.

CHALIAN: So, he's sticking to his guns, and he will seek reelection. It is impossible nearly to get somebody off the ballot in New York at this point unless they resign or die.

BLITZER: Yes.

CHALIAN: So the fact that he is sticking to it, his name is going to be here, clearly a credential of having this lawsuit against him and this not guilty plea that he is doing to battle this out in the courts during this campaign is not an easy way to run for reelection.

But you are right, Wolf, to note, these districts if you are a Republican congressman in a district that you think is really just so heavily Republican and you never faced stiff competition, anyway, those rules are off. And even Republicans have said that.

I mean, there are some 55 Democratic challengers that have outraced Republican incumbents this cycle, and the Republicans said, guys, you need to start raising money and fortifying yourself. This is a potential wave coming.

BLITZER: Let me read the tweet. This is Representative Chris Collins of New York. He just posted this.

Quote: I am proud to report the people of New York 27. The charges being brought against me are meritless and I intend to fight to clear my name. I will continue to work hard for the people of New York 27 and earn your vote this November.

That statement presumably we will hear when he makes a statement. Very quickly, David.

AXELROD: I would say if I were looking at this case and I were Collins, I would say don't resign now because you may want to resign some kind of deal down the line.

BLITZER: All right. Guys, everybody, thank you very, very much. That was an excellent conversation.

Finally, finally, it was on this date back in 2005 that I first said this --

(BGIN VIDEO CLIP)

BLITZER: I'm Wolf Blitzer and you're in THE SITUATION ROOM where news and information from around the world arrive at one place.

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BLITZER: That was 13 years ago. Thirteen years later, I'm still saying it and we are still going strong.

I want to thank my current and former SIT ROOM team and all of our viewers here in the United States and around the world for making it all happen.

Let me say it one more time. I'm Wolf Blitzer and you're in THE SITUATION ROOM.

Thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.