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Cohen Talks Plea Deal; Manafort Jury Deliberating; Mueller Delays Flynn Sentencing; Russia Hacks Senate and Conservative Groups. Aired 1-1:30p ET

Aired August 21, 2018 - 13:00   ET

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

[13:00:00] JOHN KING, CNN ANCHOR: Politics today. Don't go anywhere. A lot of breaking news happening today. "WOLF" starts right now. Have a great day.

ANNOUNCER: This is CNN breaking news.

WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington. Wherever you're watching from around the world, thanks very much for joining us.

We're getting breaking news right now involving the president's long- time fixer and former attorney. CNN is now reporting that Michael Cohen, who's facing possible criminal charges, is in talks with prosecutors for a potential plea deal. Keep in mind, Cohen is not only under investigation for possible bank and tax fraud, but possible violations related to secret payments he made, including one to Stormy Daniels.

Let's go to CNN's Kara Scannell right now and CNN crime and justice reporter Shimon Prokupecz. They're getting new information for us.

So, Kara, first to you. What are you learning?

KARA SCANNELL, CNN REPORTER: Well, Wolf, we're learning that Michael Cohen is currently in plea negotiations with the U.S. attorney's office in Manhattan, which is investigating him for potential bank fraud, tax fraud, and campaign finance violations. These talks have been undergoing way for at least the past day and a half. And it's possible they fall apart.

But we do know that Cohen's lawyers are negotiating with prosecutors to try to get a deal. We understand it will not be a type of Rick Gates style cooperation agreement where he's flipping against someone, where Rick Gates had flipped against Paul Manafort and testified in his trial. But these negotiations are continuing. The contours of the talks and -- could change.

Now, we did see Michael Cohen arrive at his attorney's office this morning for the second day in a row. As we've reported on Sunday night, the U.S. attorney's office is moving ahead with a decision to indict Cohen. So if these plea negotiations fall apart, it is expected that Michael Cohen will be indicted. Now, Wolf, we reached out to the U.S. attorney's office. They declined

to comment. And we've not heard from Cohen's attorneys either for any comment on our reporting.

Wolf.

BLITZER: Stand by for a moment, Kara, I want to get back to you.

But, Shimon, what else are you learning?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Right. So, Wolf, some of this -- what we're told is some of what the U.S. attorney there in New York has been looking at is payments that Michael Cohen had received. Remember, this all came out that he had received for potential lobbying, for influence at the White House and other places. And some of the people who have come before the grand jury there in New York were asked questions about this money, about the money that Michael Cohen had paid them. Some of them -- also, we're told, some of the people who have been asked to appear before the grand jury, they were told that they did not need to appear right now while prosecutors could be close to negotiating this plea deal.

And, of course, keep in mind, as Kara said, at any time this could fall apart. There are some questions about money, whether or not what kind of fine potentially Michael Cohen would face, what kind of forfeiture he may face. All of that is still, from everything we know being negotiated, but also just very important to keep in mind that at any point this could fall apart and we could see Michael Cohen indicted.

You know, this is all in an effort to avoid any kind of an indictment here because it would be pretty much difficult for Michael Cohen to get any kind of a deal if he was indicted because then ultimately he likely would have to plead guilty to a top charge. So what his lawyers are trying to do in this case is avoid an indictment so that he could plead to something less, perhaps serve less jail time, and also money is a big thing in this negotiation, Wolf.

BLITZER: Well, Kara, let me get back to you because you were saying that as part of this guilty plea, if in fact it goes forward, he would not necessarily be cooperating with federal prosecutors or the special counsel, Robert Mueller. Is that -- is that what you're reporting? I want to be specific on this very sensitive issue. Is he flipping and cooperating or not?

SCANNELL: Well, our understanding, Wolf, as of right now, is that this would not involve a type of agreement where he would be cooperating, you know, in that type of Rick Gates situation where he is the government's key witness against someone.

Now, our understanding is that, you know, the prosecutors' posture has been that they will follow DOJ guidelines, they would not indict a sitting president. So what would Michael Cohen have to offer them that would, you know, allow them to agree to a deal where Michael Cohen, as part of a cooperation agreement, would get one of those 5K1 (ph) letters, which is one of those letters that tells the judge who's ultimately sentencing him, don't sentence him to prison time, he cooperated with us fully and helped us bring a different, more substantial case.

Now, our understanding as of right now is that that type of negotiation is not on the table. That, you know, Cohen would be pleading guilty to crimes that he is guilty of and would work with investigators to, you know, be truthful if they had any follow-up questions. But this is not one of these significant cooperation deals where he is going to not have to take responsibility for his actions because he's going to deliver someone else to the government.

PROKUPECZ: Right, Wolf, if I can just add something to that.

BLITZER: Yes, go ahead, Shimon.

[13:04:59] PROKUPECZ: The other important thing is that we have no indication, right? The big question is, would the special counsel, would Robert Mueller want to talk to him? But right now, from everything that we've gathered, there is nothing to say or indicate, I should say, that Robert Mueller wants his cooperation. So that's important too. You know, certainly the Southern District, the New York prosecutors probably don't want him to cooperate, but obviously, in the grand scheme of things, in this entire investigation. And what really started this off for Michael Cohen, there's no indication that Robert Mueller or the special counsel team here in D.C. wants his cooperation on anything right now.

BLITZER: Very interesting stuff. I want both of you to stand by because this is clearly breaking news.

I want to bring in our analysts to assess what's going on. Joining us, CNN legal analyst Shan Wu, CNN political analyst Rachael Bade, former federal prosecutor Glenn Kirschner and CNN legal analyst Laura Coates.

So, Laura, what's your reaction to this news if, in fact, this plea deal goes forward without necessarily cooperation in terms of providing evidence on other related issues, what does it say to you?

LAURA COATES, CNN LEGAL ANALYST: Well, there's three important things to consider with the plea offer. You've got information, incentive, and influence. Is there some incentive on behalf of Mueller's probe or somebody in the Southern District of New York who's saying that they would like to give this person an opportunity to plea not to all of the breath of charges but to a limited portion of it. And for that you have to have information that's useful to me in some way as a prosecutor that may influence other cases in some way. And so she was very nuanced in her reporting and she was right to be that the idea it may be that he wants to take a plea offer to less than what they could charge him with. It doesn't mean that they think that he does not have information about the president of the United States or that they already have things they don't need him for. And so it's going to be a little bit of a give and take about what he can influence in other cases, whether they have incentive to do so, but ultimately it's going to come down to what information he's able to provide.

BLITZER: You know, I want to get your analysis, Glenn, as well, but if he pleads guilty to, let's say, a lesser charge, there's no trial, he just pleads guilty, the incentive for him is he might get a reduced sentence as opposed to waiting and going through a long trial.

GLENN KIRSCHNER, FORMER FEDERAL PROSECUTOR: Yes, that could be, Wolf, but I'll tell you, I would be surprised if we didn't see Michael Cohen, at the end of the day, come on board as what we call a global cooperator. I can tell you, as a federal prosecutor practicing here in D.C., I used to have targets of investigations who committed crimes in D.C. They committed crimes in Maryland. They committed crimes in Virginia. So what we would do is all of the prosecutors would get together, we would meet with a target's defense team, and we would reach a global cooperation agreement that would sort of address the crimes that the aspiring cooperator committed in all jurisdictions and that way the information that the target had to provide would be available to each and every jurisdiction.

I understand that there's a lot of give and take going on at the moment, as Laura said, but I strongly suspect, at the end of the day, we're going to see Michael Cohen sort of develop into a global cooperating witness.

BLITZER: Shan, let me get your analysis. Rachael, then I'm going to get to you.

SHAN WU, CNN LEGAL ANALYST: I think that's right. I mean while his lawyers may want to just have a, quote, plea negotiation right now over charges, that's not all that's going on. I mean the prosecution is going to want to debrief him. They're going to want proffers from the lawyers as to what information, as Laura said, can he give.

And as to what Glenn said, they're going to look at this from a global perspective. It's not going to be what it's sounding like right now, which is, which charge can we pick and choose to plead guilty to.

BLITZER: Rachael.

RACHAEL BADE, CNN POLITICAL ANALYST: Yes, I just totally seconding all that was said before. I mean this is a guy who was President Donald Trump's fixer. He knows things about the president that nobody else knows, even people that work every day in the White House. They're, of course, going to want to try to get information from him.

Also, one of my colleagues talked to Michael Cohen's lawyer just a couple of days ago, Lanny Davis, and he kept bringing up that he's been in talks with John Dean, who obviously flipped on Nixon during Watergate, saying that he sees parallels with his client's situation, saying that Cohen has seen things that prosecutors potentially would want.

So, again, I would be just very surprised that -- if these conversations are not ongoing right now. He clearly knows stuff that they would want to know.

BLITZER: It's interesting, you know, Laura, the special counsel, Robert Mueller, referred this Michael Cohen case to the U.S. attorney for the Southern District of New York in Manhattan, instead of doing it himself. And remind our viewers why, because that potentially could be relevant if there is a plea deal.

COATES: Well, remember, Robert Mueller has continuously been criticized about the expansive nature of his mandate, that he is trying to pry on issues that are unrelated to collusion with a member of the Trump campaign with Russia. And so he saw an opportunity to have a case that he came across and he farmed it out. It doesn't mean he can never get any aspect of it back. But what people complain about is the idea of, well, he was told to go into a house and investigate a homicide and ignore the mountain of cocaine on the coffee table. The Michael Cohen case is the mountain of cocaine on the coffee table, and he farmed that out.

[13:10:02] Now, if it turns out there's more information about his underlying mandate, he can retrieve that information. It's not a no backsy (ph) sort of situation. But it's interest to know that he farmed this out and there is actually some actual comprehensive charge that might come of it, showing that there is some, again, fruit of the labor of the special counsel team.

BLITZER: But the U.S. attorney for the Southern District of New York works very closely with the special counsel, right?

KIRSCHNER: Exactly. And just because Bob Mueller farmed out a portion of the investigation to the Southern District of New York, perhaps because that portion deals only with taxi medallions, financial crimes that Michael Cohen may have committed in New York. That doesn't mean Bob Mueller all along hasn't retained a great big hunk of the Michael Cohen investigation for himself. The two are not mutually exclusive.

BLITZER: They work very, very closely together.

Everybody stand by.

There's more breaking news we're following.

The jury in the trial of former Trump campaign chairman Paul Manafort says it's stuck on one count right now out of the 18, and the judge has told them to keep deliberating. We're going there to the courthouse live right after this.

(COMMERCIAL BREAK)

[13:15:25] BLITZER: We have more breaking news in the trial of the former Trump campaign chairman Paul Manafort.

Just a little while ago, jurors asked the judge what happens if they can't reach a unanimous decision on one of the 18 charges. The judge responded by instructing the jury to keep deliberating.

Manafort is facing these 18 counts of tax evasion, bank fraud, hiding foreign bank accounts.

Let's go to CNN's Jessica Schneider. She's outside the courthouse in Alexandria, Virginia.

So what is the latest, Jessica? JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Wolf, the jury has been

back in that deliberation room for just more than an hour now. They went in just before noon. And all of this upon the judge's instruction that they go back into the jury room and they continue their deliberations on that one count that they indicate they've had trouble reaching unanimous verdict on. So right now the jury is back in the deliberation room.

You know, it indicates that perhaps this jury has come to a conclusion, has reached a decision on those other 17 counts, and there's one count they're having trouble with. It's interesting, this judge gave what's called in this circuit a Sawyer's (ph) charge to the jury. It's also commonly known as an Allen (ph) charge. And it basically presses the jury to go back into the deliberation room and reconsider things, talk things over again. He put things very simply for the jury. He said, you should not surrender your honest conviction simply to reach a verdict. But then he talked to them for five minutes, imploring them to continue working together. He said that it is your duty to agree upon a verdict if you can do so without violating your individual inclinations.

He then encouraged the jury to continue working together. He said, give deference to each other, listen to each other's argues. So possibly, for the past hour plus, that's exactly what this jury has been doing. There's no indication as to how long they may take, whether or not they might end up reaching a unanimous decision on this one additional count that they're having trouble with.

But as for the defense team, Wolf, they walked out of this court after the instruction was given to the jury. The defense team still putting on an air of positivity, saying that all of this has been good for Paul Manafort. But, of course, it's only the jury that knows, and perhaps we will know soon too. Perhaps we'll wait for a verdict. We'll see if it comes soon.

Wolf.

BLITZER: Six men and six women on that jury. We should know presumably fairly soon. We'll stay in very close touch with you, Jessica.

All right, Shan, what do you think? What does this say to you that the jury asked the judge for -- a question, what if they can only reach agreement on 17 of the 18 counts but one they can't reach a unanimous 12 person decision on?

WU: If I were the prosecutor, I would be happy about that note because I think it's more likely that they have reached a decision to want to convict on the other counts as opposed to acquit. And that's why they're very conscientiously working over this last count. And it certainly says they're having some dissension about that last count, but I would not be happy if I was the defense right how, but I would be quietly confident if I was the prosecutor.

BLITZER: Because, Laura, we did check with the federal rules of criminal procedure, and you know this by heart -- I didn't know it by heart -- and I'll read to you one sentence from multiple counts. If the jury cannot agree on all counts as to any defendant, the jury may return a verdict on those counts on which it has agreed.

COATES: You can render a partial verdict. Now, of course, the judge was essentially saying, teamwork makes the dream work. Continue to try to get all of the counts resolved. But you can, in fact, give them a partial verdict. And that's OK to do so.

What happens if they are to return maybe 17 of the 18 or three of the 18 or one of the 18, what they can do is, the prosecution, if they have a conviction or an acquittal either way can say, we will decide whether to retry on that particular ground, on that particular charge alone.

Now, if you have a conviction on 17 of 18 counts, you don't necessarily want to have that particular new trial on these. Remember, this is obviously a two-week trial. But you can do a partial verdict. And this jury is well aware of that now.

BLITZER: How do you see it?

KIRSCHNER: So, I actually have two observations about this, Wolf. The first one is, I'm a little bit surprised that Judge Ellis went right to an anti-deadlock instruction. What we call an Allen's -- Allen charge or a Sawyer's charge, because the jury didn't announce that they were deadlocked. And usually that is when a judge opts to give an anti-deadlock instruction. They just asked the question, what happens if we can't reach unanimous verdicts on one of the 18 counts?

I've had this exact note in criminal trials. And what I think -- we can't say for certain -- but what I think is going on in their minds is, they don't necessarily know that if they deadlock on one, even if they've reached verdicts on the other 17, they might believe the whole case ends up as a hung jury, which, as Laura said, is not the case. They can return a partial verdict.

[13:20:03] Here's what I predict. If they send out another note saying, we're still struggling with one, the judge at that point will probably ask, have you reached unanimous verdicts on any counts? And, if so, let's announce them in open court.

BLITZER: That would be a big, big deal. One of the other rules in the federal rules of criminal procedure is, if the jury cannot agree on a verdict on one or more counts, the court may declare a mistrial on those counts. The government may retry any defendant on any count on which the jury could not agree. So there is that option.

But if, in fact, they get a conviction, we don't know if they will, Rachael, if they get a conviction on 17 of the 18 counts, that's a pretty big deal for the special counsel.

BADE: Yes. Yes, big victory for Special Counsel Robert Mueller. This is obviously the first trial of this investigation. And if, you know, he is -- they are victorious, that's going to obviously bolster the public view of what they're doing from here on out.

I think it's interesting that you mentioned the prosecutors should be happy about this because my colleague was talking to Kevin Downing, who's the lawyer for Manafort, and he was saying that they believe it's a good sign for Manafort that the jury hasn't been able to decide. Maybe that was before they found out it was just one count that they were deliberating on. But, again, just goes to show, we don't know what they're thinking at this point.

WU: Well, actually, Kevin Downing tried something very interesting. He asked for a new verdict form to put the option of hung jury by every single count, trying to suggest they should revisit that question. So that's an interesting strategy attempt by him.

And I think, to Glenn's point, the judge giving this sort of what they call a dynamite charge now also creates some possible appellate issues because they have not announced they were deadlocked. And later on, if there's a conviction, Manafort's team could argue, you put too much pressure on them at this point.

BLITZER: Seek a retrial under those circumstances.

All right, it looks like they're getting closer and closer. This is day four of their deliberations. We will, of course, stand by for that verdict.

Guys, thanks very, very much. Don't go too far away, because there's more breaking news we're following.

The president's long-time fixer and lawyer now in talks for a plea deal with federal prosecutors. What Michael Cohen's legal jeopardy means for the president of the United States.

Plus, Microsoft thwarts a cyber-attack by Russian hackers targeting critics of Moscow, who they targeted, how they were -- who were targeted, how they were discovered, much more. We'll be right back.

(COMMERCIAL BREAK)

[13:27:05] BLITZER: There's more breaking news.

The special counsel, Robert Mueller, once again delaying the sentencing of the president's fired national security adviser Michael Flynn. Flynn pleaded guilty back in December. The court has asked for periodic updates.

Let's go to CNN's Laura Coates, once again our legal analyst.

In their statement they said due to the status of its investigation, the special counsel's office does not believe that this matter is ready to be scheduled for a sentencing hearing at this time. Clearly they want to do more questioning of Flynn. They're hoping to get more information.

COATES: They do, indeed. They want to keep him on that hook. And notice the direct contrast between Michael Flynn and George Papadopoulos, both who have pled guilty. Mueller recommended sentencing already for Papadopoulos for his betrayal, they perceived, after he struck a plea deal for not being a cooperative witness, for not giving information they really needed. Michael Flynn, in contrast, is somebody who I think pled guilty even

before George Papadopoulos, ideally. And you had this notion of, well, we want him to still be there. So the delay of sentencing tells you that they have a need for this person's information still and that he is a fruitful cooperator, not just giving information or a blow hard in different ways. He is somebody who is actually still useful. And once he is no longer useful, they will then ask for sentencing.

BLITZER: They told the court they'll get -- in 30 days they'll give them another update when there could be sentencing of the president's fired national security adviser Michael Flynn.

COATES: And, of course, 30 days from now is about the window of time that Mueller's probe would have to end if the DOJ rules would say you can't interfere with an election. The timing is important.

BLITZER: Very important indeed. No sentencing for Michael Flynn, at least not yet.

Meanwhile, there's other important news happening right now.

The U.S. intelligence community warned this would happen again, and now it has. Microsoft says Russians tried to hack the U.S. Senate, as well as conservative think tanks here in Washington. Those attempts thwarted just weeks ahead of the November midterm elections. The attempted cyberattack happening as the president of the United States is still casting doubt on Russia's meddling in the 2016 presidential election.

Let's go to our senior national correspondent Alex Marquardt, who's joining us right now.

So, Alex, you've been doing a lot of reporting on this. What can you tell us about this attempted hack?

ALEX MARQUARDT, CNN SENIOR NATIONAL CORRESPONDENT: Well, Wolf, this was not the government that came forward with this information. This was Microsoft, who are saying that a number of sites were set up in order for Russia to carry out attacks on the U.S. midterm elections.

Now, they are pointing the finger squarely at Fancy Bear. You'll remember that name. That is the Russian hacking group that is directed by the Russian military intelligence. We, of course, know that name from 2016. They were accused of and indicted for hacking into the DNC in 2016.

[13:29:48] Now, there is no evidence that any of these sites that were set up were effective in carrying out attacks. And how they did it was they set up six different websites that are designed to carry out what are called spear phishing attacks. They're designed to look like official sites for different groups, for different people. And usually there's one letter, one digit that is slightly off so that people are lulled into a sense of security and share personal information.