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What Happens Next in the Special Counsel Investigation; FBI Alerted After "Sophisticated" Hacking Attempt on DNC; Rep. Hunter and His Wife Indicted for Misusing Campaign Funds; Some of Trump's "Best People" Now Have Criminal Records. Aired 12:30-1p ET

Aired August 22, 2018 - 12:30   ET


[12:30:03] JOHN KING, CNN ANCHOR: Welcome back. Now what? Isn't just the big political question today? As stunning as yesterday's courtroom developments are, they are just building blocks.

We know the special counsel has much more to come, and the New York case involving Michael Cohen raises separate questions about potential future legal jeopardy for the president. The quick special counsel score card. In just over a year, Mueller has achieved one conviction, five guilty pleas and charged 35 individuals and companies with 191 criminal counts. A second trial for Paul Manafort on a second set of charges is a few weeks away.

The national security blog Lawfare raises this question, whether the verdict will cause Manafort to cooperate in order to avoid another trial and to obtain some sentencing leniency is a substantial open question. Embedded within that question is even a larger one. If Manafort and Cohen do cooperate, does either of them hold the keys to any kingdoms?

Joining us now to discuss the legal consequences here, CNN Justice Correspondent Evan Perez, Crime and Justice Reporter Shimon Prokupecz and CNN legal analyst and former federal prosecutor Shan Wu.

What next is a big question in all of these cases? And in the middle of all of that, the president tweets today, criticizing Michael Cohen, who decided to cooperate and tell his story and praising Paul Manafort for not breaking. What do you read into that?

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: I think you're right. I think that's the hang in there, Paul Manafort sweet, right? That is a tweet that is signaling to Paul Manafort that there's a pardon waiting for him. We know that there have been those discussions between the Trump team and Paul Manafort's team in the early parts of this proceeding.

And so what the president is reminding Paul Manafort that if you hang in there and don't do what Michael Cohen has done, things are going to be OK. And I think that is the clearest signaling we've seen from the president of what is to come.

I think you're right that the idea that the danger of Paul Manafort turning is something very much in the president's mind and I think that's what you're seeing in his words. KING: And it's the language, forgive me. It's the language of an organized crime family. Don't break.

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: The other day he used the word "rat" in a tweet. Where have we heard such things before? It's mob talk, right? Mobsters talk. You know, Gotti used to say things about people who would turn on him and called them rats.

Essentially he's calling Michael Cohen a rat. You know, Michael Cohen we know at least right now was cooperating. But nonetheless, what he did in court yesterday, I think the president views as devastating because he did. He basically implicated him in this entire thing.

So, yes -- I mean, this is -- it's stunning words from the president that just continues and continues. And you have to wonder, what are the investigators that are sitting around Robert Mueller thinking everyday when they see these tweets.

KING: Plus we don't know what else they have. We have no clue to a large degree but there are now court documents filed in a courthouse by the southern district of New York. The president's own Justice Department, not Bob Mueller. He handed this case off to them that say the president of the United States committed two campaign finance felonies.

What does that mean for him? What legal jeopardy is the president of the United States in now and what legal jeopardy would he be in whether it's in two years or six years, he's a former president?

SHAN WU, CNN LEGAL ANALYST: Right. I mean, it's clear that but for the fact that he's the president right now, he would be charged and indicted like anybody else. I think it is unlikely that they'll try to indict him while he's in office right now. And it's probably more going to become a political question of impeachment.

Whether the statute of limitations would continue after he left, not really clear on that, although I think the immediacy, the urgency of that would probably be gone. I think the real issue is going to be when he gets impeached or not.

PEREZ: But I think one thing we have to remind people of is that the president has a very good legal defense if he wants it, right? Which is -- and we're going to -- I think we're going to hear this from his lawyers which is, that I was simply -- I authorized this payment in order to avoid embarrassment from my wife, from my family, right?

If that's his defense which is a John Edwards defense, that is a perfectly fine legal defense. It's not so great for impeachment purposes, but it is a perfectly fine legal defense. And I think we're going to see them make use of that in the next couple of days.

KING: But this document -- this is the court case against Cohen. Also says that this was paid with Trump Organization funds as reimbursements. And the government says that's an illegal corporate contribution. Do we have any indication of whether they plan to take up their case against the Trump Organization or is it just Michael Cohen put the president on the record. We're done.

PROKUPECZ: We have no indication, but you have to wonder and I think this is where the Department of Justice and the FBI needs to come forward at some point and tell us what other information they have, what other evidence that they gather that it shows that the president was part of this, that he was cooperating with this.

At some point, like everything else, this part needs to come out because I think they owe it to the American people at this point to put this forward. Tell us what other information you have.

I mean, to have Michael Cohen stands up in court and to make such accusations, right? Extremely serious. But then they also make those accusations in the filings and also in court.

[12:35:00] Prosecutors made those accusations. So now, if they don't bring charges against anyone else, well, we need to know what else they know in this investigation.

KING: So, what is the mood in Mueller's office today? The president tweeting, you know, you lost 10. There were 18 counts, there are eight convictions. The president trying to tweet, aha, you lost 10.

If you're Paul Manafort, you're convicted of eight. And if you're sentenced on those, you spend the rest of life in jail. But if you're the special counsel, this was trial number one. How are you feeling today?

WU: I think they feel like they did what they needed to do. They have some questions to consider. For example, do they retry those other hung counts? They probably have to evaluate how well Gates did and if they're going to use him, whether it's in a retrial, whether it's in the second Manafort trial or in other cases because there could be an inference in some of those hung counts were related to how he came across to the jury.

PEREZ: I think Mueller is definitely propelled. He won on all three categories, the tax fraud, the bank fraud, the foreign bank accounts. The bank fraud is 30 years maximum. I mean, I think there was a great deal of worry at the beginning of the day yesterday that they might -- that this might not turn out so well for the special counsel. I think today, I think this is very much after months of the president's rhetoric, undermining Mueller, I think today he's propelled. Now we have a jury that is part of the witch hunt.

KING: Jury (INAUDIBLE) at the deep state growing (INAUDIBLE). Evan, Shimon, Shan, appreciate you coming in. We can you bring you this back as we keep going.

Next, a source telling -- says the Democratic National Committee called the FBI after, according to this source, yet again, someone tried to hack, break into a DNC database.


[12:41:05] KING: Breaking news today on multiple fronts here on the issue of election security. A shorter time ago, the Senate Rules Committee abruptly postponed a vote on a bill addressing election security. A Republican aide said it was called off after concerns at the state level that certain Republicans were reluctant to pass it.

Meanwhile, the Democratic National Committee says someone just tried to hack into its voter database. That's according to a party source who says the DNC alerted the FBI after noticing the attempted breach just yesterday. Our Senior Investigative Correspondent Drew Griffin is on top of this story. Drew, tell us what happened.

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: John, all unraveling in the last few days. Sophisticated plot. Easy to understand.

Take a look at this site. This is the DNC's vote builder site. This is the legitimate site. The DNC says it was alerted on Monday by a security company out in San Francisco that someone had built an exact, identical site to this in an effort to capture Democrats trying to sign on to the real log site in an effort to capture their sign-ins and logins and get inside the DNC voter database.

No indication that happened but the DNC immediately notified the FBI. And the DNC, according to sources, telling Donie O'Sullivan our digital editor today that the DNC is notifying all its state Democratic leaders at a meeting in Chicago that this hacking attempt took place. Very similar to what Microsoft announced yesterday in which Microsoft said Russian actors were behind it. We don't know who is behind this but yet again an example, John, of hackers one way or another using their skills and techniques to try to crack in to the U.S. political system.

KING: Another story that continues and continues through. Come back to us when you get more information about this. Appreciate the breaking news reporting.

Up next for us here, a Republican congressman indicted for misusing campaign money. Wait until you see the shopping list.


[12:47:07] KING: Topping our political radar. The markets marking a milestone today. The bull market has been going on now for 3,453 days making it the longest period of uninterrupted gains in American history. Since March 2009, the DOW has soared, the S&P quadruple.

Also today, Chinese officials here in Washington to talk trade as more tariffs on Chinese goods go into effect tomorrow.

The guest list for President Trump's chief economic adviser's birthday party included White Nationalist Peter Brimelow. The Washington Post reports Larry Kudlow says he's known Brimelow forever but never would have invited him had he known about his White Nationalist ties. Brimelow is the man behind Vdare, an anti-immigrant website. Topping our political radar, -- back to our political radar, Republican Congressman Duncan Hunter of California and his wife indicted for allegedly using campaign funds to pay for personal expenses, including payments to their kids' school, the family dentist, even a golf course where it's alleged they bought a shirt and tried to report it as golf balls for wounded warriors.

Court documents say they were desperately -- desperate financially overdrawing their personal bank account more than 1,100 times over a seven-year period. The congressman's father who held that seat until his retirement says his son's indictment is political. He blames, listen to the echo here, Rod Rosenstein.


DUNCAN HUNTER SR. (R), FORMER CALIFORNIA CONGRESSMAN: I think he dislikes Duncan probably as much as he dislikes Mr. Trump. And I think they look at Duncan as part of the Trump team. They're hoping that the cloud of the indictment itself takes his Republican seat and puts it in the Democrat column.

No matter if he's found innocent after the election is over. This was football season. This is a late hit.


KING: I got stuck in traffic today. Is it Rod Rosenstein's fault?

I'm sorry. I guess, why not. If it works for the president, it might work for you. And so any time something bad happens to a Republican, it's because of the deep state, not because they went to Italy and used campaign funds. Not because they lied about golf balls for wounded warriors and instead spent it on themselves.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: I mean, it's one of the most disturbing things I've read in a long time. And I read a lot of disturbing things (INAUDIBLE). But I read this indictment from top to bottom and it is truly, you could not write this if you were scripting a movie of more greedy and corrupt politician. The things he and his wife did that they spent their campaign funds.

Constituents' hard-earned money on tequila shots, video games, family vacations. But I think the most galling was that, this person, a veteran and his wife, conspired to use funds to buy clothing at a golf-pro shop and then write it off as golf balls that they bought for wounded warriors. The fact that a veteran would do that makes it all the more disturbing.

KING: Innocent until proven guilty, that's the way it works here but it's not Rod Rosenstein's fault.

Up next, President Trump's campaign promise to hire the best people? Being tested in recent days, isn't it?



[12:54:44] DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're going to make America great again. We're going to use our best people.

I'm going to get the best people. The cabinet, we're going to have all the best people. We're going to find out who they are. And it's not going to be a politically correct choice either.

My people are nice folks.

[12:55:00] They're great. They're great. My people are great. My people are great.


KING: Yes, so how is that going? That 2016 promise from the president. Let's just take a look. Best people in the realm of law and order.

Rick Gates, former deputy campaign chairman. Guilty, two counts. Still cooperating with the special counsel. We'll see how that one goes from there.

George Papadopoulos, the president would call him the coffee boy. He was in the campaign. Guilty. Lying to investigators. Awaiting sentencing. There are some talk he might try to get out of his plea deal but he has been convicted.

Michael Flynn, the national security adviser to the president of the United States. Great people? No, lying to investigators. Still a cooperating witness for the special counsel.

The last 24 hours, Paul Manafort, convicted in court. Best people. The former Trump campaign chairman. Ran the convention and ran the campaign at the key moment. Guilty on eight counts. Faces another trial.

And of course at the president's side for more than a decade, has an office in Trump Tower. Great people. Michael Cohen pleading guilty yesterday to eight counts, including he says he worked with the president of the United States on illegal campaign finance scheme. The president, especially when it comes to Cohen and Manafort, wishing it goes away.


TRUMP: I feel badly -- I must tell you that Paul Manafort is a good man. He was with Ronald Reagan. He was with a lot of different people over the years. And I feel very sad about that. It doesn't involve me, but I still feel, it's a very sad thing that happened.


KING: An organization gets its culture from its leader. That's just the world of law and order. There are others. Just look at the New York Post and the New York Daily News. Usually the New York tabloids are split on their opinion about the president. All the president's henchmen. Don's cons.

I mean, you know, this is not funny. I mean, you can laugh at some of the headlines but it is not funny when you take promise of, I'm a businessman and I'm going to bring the best people. And then look through -- again, that was just the law and order department. We can go on.

JACKIE KUCINICH, WASHINGTON BUREAU CHIEF, THE DAILY BEAST: Well, the president likes people who compliment him. And he -- I think he already -- in terms of the best people, he thought he already surrounded himself by the best people when he was at the Trump Organization. Having to do with proximity maybe more than actual qualifications. And I think particularly in the early part of his administration, and during the campaign because the campaign was sort of a collection of misfit toys, particularly at the beginning.

If they were with him, they were, obviously, the best people. It wasn't necessarily having anything to do with their resume.

MICHAEL SHEAR, WHITE HOUSE CORRESPONDENT, THE NEW YORK TIMES: You know, if you would all --- we would like to think that everybody sort of comes with an internal moral code, right, that guides them. But the truth is, you know, you know, covering the White House under Obama for eight years, even if you didn't -- if you were somebody that was in the president's administration and you didn't have your own moral code, you did know that if you did something like this, if you skirted the rules that Obama was going to be furious about it and there were going to be consequences for you. And there were consequences for people, even low-level people that folks don't know about who crossed a line and the president said that's it. We're not tolerating that.

And this president doesn't have that line. And people around him don't have the expectation that if they cross a moral or ethical line they're going to get in trouble with the boss.

KING: And so, in addition to the law and order issues, the gentleman we just showed you right there. You have Tom Price who had to leave the cabinet because of questionable spending. You had Scott Pruitt, it took a really long time, finally he left the cabinet. Maybe it was the used Trump mattress they got.

Omarosa who the president is now mad at. But he brought her in even when everybody else said don't bring her in, Mr. President. She's recording him. Rob Porter had to leave because he couldn't pass a security background clearance.

This is -- this go -- there are orbits and orbits.

COLLINS: And that's been one of the biggest problems for this White House is that, they can't separate this because they all fully realize that these are people that the president chose to surround himself with. So that is one thing that they have a lot of trouble defending themselves against is, these are problems of the president's own making. He brought all of these people in. Mike Flynn, Paul Manafort, Omarosa, Michael Cohen.

These are all people the president surrounded himself with and if he'd never done that, he would not have had these problems. (INAUDIBLE) that if they had never gotten involved in the president, they wouldn't have these problems but the White House has a very tough time defending themselves against the idea that it was the president's own choice to bring in Michael Cohen.

KING: Who was the president's own choice. And the American people get this. A Monmouth University poll, taken earlier this month. The president does or does not hire the best people? Does, 30 percent, does not, 58 percent, depends, seven percent, don't know, four.

But almost six in 10 Americans say the president of the United States, essentially, has bad judgment. Doesn't hire the best people. That's pretty damning.

SEUNG MIN KIM, WHITE HOUSE REPORTER, THE WASHINGTON POST: Right, exactly. And I think that you're going to -- it's a pattern again because it comes from the top and you're going to be seeing that for some time, obviously. We also to remember when he surrounds himself with -- the staff matters because also it -- because it sets policy as well.

So there are real world implications for the kinds of people that he surrounds himself with.

KING: Real world implications, to say the least.

Thanks for joining us in the INSIDE POLITICS today. Appreciate your patient for the breaking news.

Back here this time tomorrow. It won't be me, I'm taking a little break but please come right back. CNN Nia-Malika Henderson right here tomorrow.

Wolf starts right now. Have a great day.