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THE LEAD WITH JAKE TAPPER
Did Trump Make Millions By Dodging Taxes?; Kavanaugh Investigation. Aired 4:30-5p ET
Aired October 2, 2018 - 16:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RUSS BUETTNER, "THE NEW YORK TIMES": So, they collected 20 percent of basically everything he was buying while doing their work. Our tax experts said that looks like a gift and a thing that was set up just to evade taxes.
They also used that then to apply for renting increases on the rent- regulated apartments, thereby passing along sort of inflated rent increases to their tenants.
And we were told that looks like they might have been filing false documents, which also could have led to a criminal investigation at the time.
JAKE TAPPER, CNN ANCHOR: Now, we should point out Trump's lawyer refutes your -- or disputes your reporting, saying -- quote -- "'The New York Times'' allegations of fraud and tax evasion are 100 percent false and highly defamatory. There was no fraud or tax evasion by anyone. The facts upon which 'The Times' bases its false allegations are extremely inaccurate."
But where did you get all this information? People have been trying to figure out Mr. Trump's wealth, Mr. Trump's tax -- what he's been doing with his taxes for decades.
BUETTNER: It was quite an effort by three of us over the last year- and-a-half.
Over that course of time, we were able to piece together his father's empire, from property records, to mortgage records, and we developed a sort of a network of sources through which we obtained more than 200 tax returns eventually that were filed by his father and his father's businesses over the years and general ledgers and banking statements that really provided a very firm, factual underpinning to what we have concluded.
TAPPER: And you wrote: "By age 3, Mr. Trump was earning $200,000 a year in today's dollars from his father's empire. By age 3. He was a millionaire by age 8."
So this completely undermines the story that he tells the voters about how he just got one loan of a million dollars from his dad as a grown man, and that's how he started his empire. BUETTNER: That's exactly right. It does at that, Jake.
And that money really accelerated as he entered his 40s and 50s. There was one instance in which he owed his father $15 million by 1987. He converted that into an investment in his latest apartment project, Trump Palace. And then a few years later, his father sold those shares back for $10,000 and took a tax write-off for the full $15 million as an investment loss.
We're told that is an illegal related party transaction. You can't take a write-off for that, but the net effect was that it put $15 million in his son's pocket in his darkest hour.
TAPPER: Now, this stuff took place a long time ago. Would any of it explain why President Trump continues to refuse to release his tax returns to the public, as every president since Gerald Ford has done?
BUETTNER: We just don't know the answer to that.
There's a lot of possibilities. Again, we're guessing into the darkness here, because he really doesn't divulge anything very meaningful about the sources of his income. There is, I guess, the remote possibility that he's still been building on, making money from the money his father gave him, and that his own businesses aren't really producing much actual profit, just tax losses that you can then write off against his sort of inherited wealth.
TAPPER: All right, well, congratulations on the great reporting, and to your colleagues as well.
Russ Buettner, thank you so much.
BUETTNER: Thanks, Jake.
TAPPER: So this does beg the question why doesn't the president just release his tax returns? He talks about transparency being something that is important to him, although I think there's plenty of evidence that that's disputable.
You have all these questions now about how he got his wealth and allegations being made by "The New York Times" and experts looking at what they obtained, that he engaged in fraud in some ways. Why not just release his returns?
JOSH HOLMES, REPUBLICAN STRATEGIST: Well, I think there's two different issues.
I think what was reported here is how he got his money, right? And there's a political question to that. And then there's a legal question to that.
And the political question, honestly, is uncomfortable. I mean, the fact of the matter is, anybody who inherits great wealth in this country, from a political standpoint, it's not great for the rest of us, those of us who didn't inherit millions of dollars. We look at it differently than we would for somebody who's a self-made millionaire, for example.
So I don't have any -- look, there's a reason politically that they have shielded that part of the story. Now, some of this is estate planning, right? I mean, it is an ugly process. And if you have an awful lot of money, they have all kinds of different ways of avoiding taxes. Is that a good thing? No. Is it legal? Yes.
NEERA TANDEN, PRESIDENT, CENTER FOR AMERICAN PROGRESS: Just to be clear, "The New York Times" is alleging and saying that they have talked to a number of experts, is that he engaged in criminal activity to hide his wealth.
And so it's not legal estate planning. There's not any -- the issue here is, he probably did legal estate planning. But here is he engaged in illegal activity, things that the IRS would normally consider fraud, to hide his wealth and ensure that it's not taxed.
So I think the issue really is, in any normal situation, the president would release his taxes, so that we could actually have an understanding of whether it's true or not.
The only way to get to the bottom of the facts here is for the president to do the one thing he has never done -- and it makes him an extraordinary political figure in getting through this process without doing -- which is just to release his tax returns.
And obviously I think we have one of the reasons why he hasn't. Because he is -- if this is true, he would be subject to civil fines today from the IRS, not criminal because the statute of limitations has run, but civil fines.
SCOTT JENNINGS, CNN POLITICAL COMMENTATOR: This story broke right before we walked out here. We have all heard the reporter interview you just did. We have skimmed the story.
I have been thinking about, how are Republicans going to react to this? And I will just tell you, they're going to look at it through two lenses. One, this is the same newspaper that just told us about Nikki Haley's curtains, which turned out to be a complete fabrication. And, number two, this is the same newspaper that just put a byline on a story this morning from a reporter that was hate-tweeting Brett Kavanaugh over the summer and then hitting them with the bar story today.
Now, I'm not casting any aspersions on this story or this reporter.
TANDEN: Yes, you are, obviously.
JENNINGS: But in this particular case, because of what's happened over the last few weeks, Republicans are going to look on this with a skeptical eye because of these two issues that have come up.
TANDEN: Why don't they do the one thing they could do, which is, if they were a normal, functioning Congress, look into it? Which they won't do, because they will hide.
SYMONE SANDERS, CNN POLITICAL COMMENTATOR: It's called oversight. We don't get that out of this Congress. Maybe the next one.
Look, I think you're given -- folks are not looking at it as closely as the professional politicos sitting around this table are looking at it. So they don't necessarily know about the reporter with the byline.
All they know is that the president told us he was a self-made billionaire, and I voted for the guy because he's a hardworking guy like me, and maybe if I work hard like that, I can be like the president of the United States.
And now we come to find out -- shocker -- Donald Trump lied. I think this is just another -- this is something else to add to the catechism of lies that the president has told. Why are you lying about your wealth, Donald Trump? What do you have to hide? When are you going to release your tax returns, tax returns, mind you, that he said he would release?
TAPPER: But do you think the base, A, cares or, B, ever believed the claim to begin with that he didn't inherit all this huge wealth?
HOLMES: I think Scott raises a really good point here, because conservatives across the country particularly in the last two weeks dealing with Judge Kavanaugh and all the allegations are fit to be tied.
And what we have seen here is a campaign against President Trump. Whether you believe the allegations or not, if you are conservative at this point, it is relentless. Every single day, there's another expose by "The New York Times" or by any other range of publications that are constantly attacking this administration and everything around it.
We do not see all of that for a Democratic Party, for example.
TANDEN: Yes, because the Democratic Party and the Democratic presidents that we have had, like Barack Obama, did not have...
HOLMES: That is just the most outrageous, partisan statement you could ever make.
TANDEN: How many -- I'm sorry. How many people has Donald Trump fired in his Cabinet?
Scott Pruitt was something he fired in his Cabinet for basically being a swamp creature. It's not -- I didn't do that. Donald Trump did that, right? SANDERS: These are unforced errors.
HOLMES: ... provide some analysis of where the conservative electorate is.
JENNINGS: Tell us how Barack Obama has never, ever done anything wrong, please, please.
SANDERS: Maybe the president's voters don't care and the Republicans in Congress won't care and we won't see oversight, because all they care about is power.
And as long as...
SANDERS: As long as Donald Trump is -- has the reins of power and Republicans are in charge...
TAPPER: I just want to read this tweet from David Fahrenthold of "The Washington Post."
It's a statement from the New York State Taxation Authority regarding this blockbuster "New York Times" story -- quote -- "The tax department is reviewing the allegations of the 'New York Times' article and is vigorously pursuing all appropriate avenues of investigation" -- unquote.
And I guess that's one of the questions is whether or not you think the IRS, which of course is a division of the executive branch and the administration, is going to do anything. There are also state divisions on this. And there might be an investigation.
HOLMES: Of course, and guess what? There ought to be.
Anybody who has this amount of money and goes through these kinds of processes, I think they all have interactions with the IRS. I hope the president and his family have done everything by the book.
And I don't have any problem at all with any government agency looking into things. What I have a problem with is if this is a witch-hunt, if this becomes a state agency trying to grind a political axe, if this is the IRS doing what they did to conservatives during the Obama years, which is go after people who were trying to speak freely and because they were concerned.
If that's what this turns into, I'm against it. If this turns into an honest assessment by a government agency, I don't have a problem with that oversight.
TANDEN: So, with an honest assessment, do you think the president should return his -- just release his taxes, like everybody else?
HOLMES: I think I think the president should do whatever he feels is right. There's no legal requirement that he does.
If I ran for president, I almost certainly would, but I'm not this guy and I'm not going to speak for him.
SANDERS: I think that's why there is also -- in Congress there is conversation right now about introducing legislation that would make it law for folks who run for president to release their tax returns.
TAPPER: Let me ask you a question because you brought up the -- you two brought up the issue of perceived media bias and how that's going to shade the way that people look at this issue.
"The New York Times"' story about the bar fight, there's nothing inaccurate in that story. And whether or not you think it's silly, Brett Kavanaugh has said that he didn't get aggressive when he would drink back in the back in the day.
The president is the one who referred to him as having difficulty drinking. Brett Kavanaugh didn't. I didn't. But the president did.
Is this not -- I understand that you don't like some of the tweets that one of the reporters that wrote the story wrote, but, I mean, is it not true, is it not a fact that he got into this bar fight?
HOLMES: Well, I think you could make an argument about why is it relevant to a discussion about the confirmation of the next Supreme Court justice?
TAPPER: Because we're talking about whether or not he's been honest about his drinking.
HOLMES: He was never asked if he got into a bar fight.
TAPPER: He was asked if he ever got aggressive.
HOLMES: OK. Would you say throwing a cup of ice in a bar in college is getting aggressive?
When I think of getting aggressive, I think of throwing down. Throwing a cup of ice on somebody is not exactly aggressive behavior.
SANDERS: If somebody threw a cup of -- walked into a restaurant and threw a cup of ice on you, you would say that the liberals are out of control. Come on.
JENNINGS: Well, they are out of control, because liberals are running conservatives out of restaurants. So, I'm glad you brought that up.
TANDEN: Dr. Ford -- the incident with Dr. Ford happened three years before this.
So the question really is...
TANDEN: Allegedly. It allegedly happened three years before this.
Her statement is that it happened just a few years before this. So that's why I think it's relevant to the discussion that we're having.
HOLMES: Just to answer your question directly, the reason that conservatives are upset about that story is because the author of the story, when Judge Kavanaugh was first nominated, let a series of tweets go indicating her fierce opposition to Judge Kavanaugh's nomination.
Now, as a publication, most would argue that in order to keep the integrity of your publication and the stories that they print, you wouldn't want a journalist to be biased.
TAPPER: Right. And The Times has acknowledged -- Emily Bazelon, who is the reporter in question, who is a liberal and writes for "The New York Times Magazine," lives at Yale, which is why her byline was on there.
"The New York Times" has said that was a mistake. They should have had a different reporter report out the story. But they stand by it.
HOLMES: And that is good enough for me, but I think that's why conservatives are upset about it is, is because that acknowledgement is precisely what they're talking about.
TAPPER: Let me ask you a question. How is President Trump going to respond to this story? This story gets at the heart of his story to the public.
I can't imagine he's not going to attack "The Times," say it's not true. I mean, this is going to be grist for the mill.
JENNINGS: Yes, I would suspect he will go down the media bias route as a public-facing matter.
I mean, my advice would be let your lawyers handle it. They have told "The New York Times" that they dispute all of this, and obviously there's going to be investigations and legal issues. So, as in most cases, I would let the lawyers handle that stuff. And if you want to say the media is out to get the conservatives, I think that's a fine P.R. strategy.
But I would not try to wade into the legal or investigatory issues, because you could get yourself in trouble via Twitter.
TAPPER: Is this fodder for Democrats? Is this something the Democrats can use to attack him? Or do they have other issues to talk about?
SANDERS: I mean, I think we have other issues to talk about. But, again, this is another thing in the long lines of things that Donald Trump has been untruthful about, that he has lied about.
This is another -- it brings up the fact that we still have not seen the president's tax returns. Again, he said he would release his tax returns. We have not seen them. He always talks about keeping his campaign promises. When is he going to keep that one?
TANDEN: I think the one thing I would say is that during the campaign, when the tax issue came up, people did recognize that it's a little outrageous that he's evading taxes, he's not paying his taxes, when every other American has to.
And on top of it, the tax issue which Republican said would be such a great issue for them, is actually working really well for Democrats. And at the heart of that is a tax bill that very much worked in behalf of the wealthiest, instead of working people.
And I think this really feeds those narratives. So I would see many Democrats, many Democratic candidates in House races really drawing these issues together.
TAPPER: Last word, short, if you could.
HOLMES: Yes, I mean, look, I think there's two very different things.
If this was a big issue in the presidential campaign, all the people that had such a big problem with it turned around voted for him and put him as president of the United States. I think that is the end of it.
TAPPER: All right, everyone, stick around.
Could one of Trump's opponents for 2020 be a familiar face? We're going to talk to the president's possible competition next.
(BEGIN VIDEO CLIP)
JOHN KERRY, FORMER SECRETARY OF STATE: That's a disgrace. It's wrong. It's just wrong. And everybody sees that the fix is in. (END VIDEO CLIP)
JAKE TAPPER, CNN HOST: That was former Senator and Secretary of State John Kerry slamming the hearing of Supreme Court nominee Brett Kavanaugh and the GOP majority for not interviewing Mark Judge who was allegedly in the room when Professor Christine Blasey Ford was assaulted. And Secretary Kerry joins me now. He has a new book, it's forth, Every Day Is Extra. It's available now. Third week on the New York Times bestseller list. Thanks so much for being here. I appreciate it.
KERRY: Thank you.
TAPPER: It's good to see again.
KERRY: I'm happy to be here.
TAPPER: How you doing?
KERRY: I'm doing great. Fabulous, I feel great.
TAPPER: So I want to ask you about what's going on in politics right now. The FBI is investigating the claims from these women. Republicans say there's no corroborating evidence that Kavanaugh assaulted these women and therefore it's not fair to hold these allegations, and we'll find out what the FBI turns up if anything, but as of now, they are allegations against him. What do you say?
KERRY: Well, the problem I have, Jake, and I think a lot of Americans have is that people were saying there's no corroborating evidence before they had in fact, investigated and before there'd been a chance to talk to a material witness, the person who was in the room when the alleged incident happened. Now, that's what I said the fix is in. I mean why are you bum-rushing to a vote when you haven't yet fully investigated a serious allegation? And I think obviously most Americans felt that.
I think additionally, a lot of people now as a result of the last hearing of questions about you know temperament and did he tell the truth about his lifestyle and those other choices. I don't know the answer to that question, but I do think it's relevant to whether or not he was truthful to the United States Senate, to the process and that's the question.
[16:50:01] TAPPER: So your book is great. It struck me at the beginning of the book, you talked about some of the encounters you had with the Kennedys. You're including with President Kennedy. You write glowingly about Ted Kennedy but I want to ask you because I've heard Ted Kennedy's name invoked in the last week or two and Bill Clinton's name invoked in the last week or two by conservatives saying you know, Democrats seeded the moral high ground on a lot of this sexual assault and sexual harassment issues by standing by people like Bill Clinton and Ted Kennedy because of the good things in their view that they did.
KERRY: Well, no, I think that's -- I don't think that's an accurate way to say it. Many of us were very critical of President Clinton on the choice he made with respect to what happened in the White House. We just didn't believe. I didn't believe, and I speak for myself, that it was an impeachable offense. That's the issue. And --
TAPPER: What about Ted Kennedy?
KERRY: Similarly. People have been critical through the years where -- and he was critical of himself. He stood up and owned moments where he knew he had stepped over the line. So I think that -- and he wasn't about to be nominated to a lifetime position. In fact, he said to the people of Massachusetts, if you think I shouldn't stay here then you know -- then he took those returns and then he was elected another six times. That's a very different thing from a lifetime confirmation in the Supreme Court of the United States where you may have to rule on some of these issues that come up.
And so you know, I think who was it today? There was article written about the -- oh, it was Larry Tribe. And Larry tribe you know, may come from particular ideology and place in the spectrum but he's a highly distinguished constitutional law professor, somebody who was talking about for many years about being on this Supreme Court but who frankly when it became part of that generation that wasn't able to ever be nominated because they've written too much, because it was too much out there for people to play games with.
So now we have this sort of vanilla process by which justice -- it doesn't mean they're not smart, it doesn't mean they're not capable justice --
TAPPER: They're avoiding conflict.
KERRY: But it avoids answering an awful lot of questions. The nominate -- the confirmation process has really become how effectively can you avoid key questions and what you might do or what you've done. And you know, it's too bad because I think there's a lot of legal talent that gets left by the wayside as a result.
TAPPER: I want -- I want to talk about your book. You write a great deal in the book about the Iran deal, about what -- you're very proud and you disagree with the administration very much on how they feel about it. It's become a controversy because you recently acknowledged that you stay in touch with the Iranian Foreign Minister Zarif.
KERRY: Well, that's not how I would frame that but go ahead.
TAPPER: You said you met with him three times.
KERRY: Finish your question.
TAPPER: You've met with him before.
TAPPER: You talked to him.
KERRY: That's accurate. TAPPER: And the Secretary of State Mike Pompeo called the fact that you talked to unseemly and unprecedented. You say it's not uncommon for diplomats to stay in touch.
KERRY: It's not only is it not uncommon for diplomats to stay in touch but the three times that I met, one at an Oslo Conference on Peace, two at the Security Council Meeting in Munich where John McCain and it's -- and other senators go, and he was president at that, and third at the U.N. General Assembly meetings in New York where I met with him outside of the U.N. And he met at the same time with editorial boards of newspapers with the Council on Foreign Relations and with other sitting senators by the way, so it's not new. But most importantly, I met with him before the administration made a decision to pull out of the agreement, and there is nothing abnormal about that.
I have never talked to them since the administration pulled out in the agreement. And what's really important -- and I mean, Henry Kissinger, countless secretaries have met with people that they worked with or otherwise to be informed. I'm not negotiating anything, I'm not doing anything except inform -- and exchanging opinions about where we are. It's helpful to the process, frankly. And I informed Secretary Pompeo of my point of view in a long telephone conversation that we had before they made the decision to pull out. We -- and he was very cordial. We had a good conversation. I appreciate that.
TAPPER: So what do you make of the fact that they --
KERRY: Well, I think you know, it happened on the day that Paul Manafort cut a deal with Bob Mueller.
TAPPER: You think they're trying to change the subject?
KERRY: So I think it was partly changing the subject and sort of brushed back and other things. It doesn't matter to me. What's important to me is you know, as a citizen in the United States, we still have a right to meet with people, and to talk with people, and to exchange opinions. And I wasn't negotiating anything. And the policy of the United States when I met was to live by the deal until the president pulled out. Now he's pulled out. But what's -- and I haven't met with anybody since then.
But what's interesting, Jake, is that last week in New York, Russia, China, France, Germany, Britain, met with Zarif and they all talked and agreed they need to keep the deal. They're trying to keep the deal, only Donald Trump has pulled out of this agreement. And so I think people have to step back and say, wait a minute. What does president Xi know? What does President Putin know? What the -- what does the Chancellor of Germany know and the President of France, the Prime Minister of Britain who believes this deal is important for safety and security of the world?
I believe it is important to the world. We lost that opinion. The President has decided to pull out. And so we live with that. But it doesn't mean I can't express my opinion. [16:55:28] TAPPER: Of course not. We're out of time. I want to
recommend the book. You write in the book about your war experience in Vietnam which I have never read you write so personally about.
KERRY: Well, I never written about that. I've never written about the '04 election or many of the things in the book.
TAPPER: And the loss of your friend Pershing which I know was big too. But I do -- I have to sneak in one quick 20/20 question. It's like a 15-second answer.
KERRY: Go for it.
KERRY: Yes, sir.
TAPPER: To the Democratic Party nominate somebody who is a fighting progressive or somebody from the tradition of the party more statesman-like and moderate? Which side --
KERRY: I think the Democratic Party has to nominate the person whose vision for the future is one they agree with and who they believe can beat Donald Trump. That's it. And that is not going to be decided by me or someone else pontificating. It's going to be decided in the primaries and in the process.
TAPPER: Secretary of State John Kerry, always a pleasure to see you, sir.
KERRY: Nice to see you. Thank you.
TAPPER: Good to see you and congratulations on the Red Sox.
KERRY: Thank you.
TAPPER: One Republican Senator is pushing to make the FBI report on Brett Kavanaugh public but will that fly with Mitch McConnell? A key member of the Senate Judiciary Committee, coming up.