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NYT: Brett Kavanaugh Called Himself and Friends "Obnoxious Drunks" in a 1983 Letter; State Opens Probe After NYT Alleges Trump Engaged in Suspect Tax Schemes; Trump Tells Crowd to Vote Pretending He's on the Ballot; Volcano Erupts on an Already Devastated Indonesia Island; Dow Set to Rise After Hitting Record High; Key Vote Susan Collins Comments on Kavanaugh. Aired 9-9:30a ET

Aired October 3, 2018 - 9:00   ET




JIM SCIUTTO, CNN HOST: A very good Wednesday morning to you. I'm Jim Sciutto.

POPPY HARLOW, CNN HOST: I'm Poppy Harlow in New York. We're so glad you're with us. And there is a lot of news this morning. Overnight, the President chose to imitate and mock an alleged victim of sexual assault, despite just calling Professor Christine Blasey Ford very good in many respects on Friday.

Last night, at a rally, the President took the gloves off and went after her. He slammed her for not remember key details of the day she was allegedly attacked by Supreme Court nominee Brett Kavanaugh, listen to this.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Where is the place? I don't remember. How many years ago was it? I don't know - I don't know - I don't know.


HARLOW: Kind of appalling. That is the reaction to those comments from the President this morning from Republican Senator Jeff Flake, significant for a number of reasons, especially given it was Flake's qualms about Judge Kavanaugh and the sexual assault allegation. Again (ph), the thing that led to the reopened FBI background check, and delayed the vote on the President's pick for the Supreme Court.

SCIUTTO: And he remains a key swing vote as they move...

HARLOW: Absolutely.

SCIUTTO: ...forward on his confirmation. The new investigation is believed to be almost, if not completely, finished. It could arrive on Capital Hill as soon as today. And that brings more questions. Who will get to see it? How many witnesses will have been interviewed by then? Why is Ford, at least so far, not among them?

And while the President was in full attack mode last night, his own past - his financial past, that is, being laid there on the front page of the New York Times. Not his long secret (ph) tax returns, but an exhaustive, extraordinary accounting of vast wealth funneled to the future president and his siblings by their parents, largely for the purpose of ducking taxes.

The President, firing back just moments ago, we will have that for you. But we begin at the White House with CNN's Abby Phillip. What is the latest as we await the possibility of the Kavanaugh report coming out today - the possible timeline, the preparations in the White House?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Hi Jim and Poppy. Well, today could be the earliest date that we could have a final report sent to the Senate. One of the reasons for that is because we know that the - the investigations have been wrapping up. The FBI yesterday, expanding some of their interviews to include some people who were at a July 1 part that was listed on Brett Kavanaugh's calendar.

And that some people had speculated might play a role in the - the alleged assault alleged by Christine Blasey Ford. But also, obviously, if they want to vote by Friday, this report needs to be in pretty soon, either today or tomorrow in order to give Senators time to digest the information. So, we are working our sources trying to figure out when that might happen, but we are looking for it. It could be as soon as today or any minute now.

HARLOW: Also, Abby, before you go. I mean, the response from Christine Blasey Ford's attorney overnight, the way the President chose to attack her at the rally last night. What are you hearing on that? And then, also - I mean, are you getting any sense from the White House Com (ph) shop as to, was this planned? Are they happy the President went after her?


PHILLIP: Yes, well, Jim and Poppy. I mean, the President's change of tone last night was a little bit surprising, in part, because it seemed that he was, kind of, testing it out as he was going along at these rallies which is something he often does. But what he is doing is actually reiterating some of the criticisms of Ford that you've heard from some on the right, including by some advisors of the President. Listen.


TRUMP: I had one beer, right? I had one beer. Well, you think it was - nope, it was one beer. Oh, good. How did you get home? I don't remember. How'd you get there? I don't remember. Where is the place? I don't remember. How many years ago was it? I don't know - I don't know - I don't know.

(APPLAUSE) What neighborhood was it in? I don't know. Where's the house? I don't know. Upstairs, downstairs, where was it? I don't know, but I had one beer. That's the only thing I remember.


And a man's life is in tatters. A man's life is shattered.


PHILLIP: And Ford's attorney fired back in a statement last night saying, a vicious and vile, soul-less attack on Dr. Christine Blasey Ford. Is it an - any wonder that she is terrified to come forward, and that other sexually assaulted survivors are as well? She has a remarkable profile and courage. He is a profiling cowardice.

Now, that might have gone well at that rally last night, but it wouldn't be a surprise if Republicans are concerned that among Independents, among women, an attack like that is not exactly what they're hoping for...


PHILLIP: they go toward a final vote later this week, Jim and Poppy.

SCIUTTO: Listen, the mocking and the laughter, it was, generally - genuinely, rather, sobering to hear.

HARLOW: It was. Abby, thank you - I mean, even for - regardless of party. If you just think about Republican Senator Jeff Flake and the way he reacted this morning when he was asked about it on the Today Show. Listen.



SEN. JEFF FLAKE (R), ARIZONA: There's no time and no place for remarks like that. To discuss something this sensitive at a political rally is just - it's just not right - it's just not right. I wish he hadn't of done it. I just am going to stay it's kind of appalling.


SCIUTTO: Worth mentioning, Senator Flake, along with Senators Susan Collins and Lisa Murkowski, critical Republican votes to Kavanaugh's nomination. Manu Raju on the Hill this morning, Manu, McConnell wants this vote by Saturday. Did his job get tougher with those comments from the President?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, it's already been very difficult. This nomination is hanging by a thread. And those three senators, Flake, Collins, and Murkowski are going assess and determine whether or not Kavanaugh gets that spot. And all three of them have been saying, for the last several days, that the President should stay away from those kinds of attacks against Christine Blasey Ford. They're all waiting for that critical FBI report. That is, undoubtedly, doing to determine whether not they can (assess) - they can vote to advance this nomination.

Now, Mitch McConnell is looking at the calendar and has to gauge - navigate a tricky Senate process in order to get this through. We can expect, as soon as today, he takes the first procedural steps to end debate on this nominate which could occur as soon as Friday, maybe gets pushed into the weekend, and a final confirmation vote, potentially, over the weekend.


HARLOW: Right.

RAJU: ...the big question. Can those three senators - will they stay on the - in the yes column? Will they decide they need more time to review the report? And will the FBI actually provide this report because once they do only the senators will be able to get briefing. Only a handful of the staff members can see this.

HARLOW: Right.

RAJU: Where there's time to digest this. All key questions at a crucial - crucial day here for this nomination.

HARLOW: It's an important point. The American public has no, sort of - there's no responsibility for the White House to show these 302s of this report to the American public...


HARLOW: ...or all of Congress.

SCIUTTO: Always a possibility of leaks though.

HARLOW: I mean, I would think we'll see it. But that said (ph), Manu, thanks, joining us now, former FBI Supervisory Agent, Josh Campbell, former Federal Prosecutor Laura Coates, and CNN Contributor Salena Zito.

So, Salena, let me begin with you as someone who spends the bulk of her time reporting throughout Trump country, if you will, OK? What is worse, the fact that the President chose to, outwardly, attack a woman who says, under oath, she was the victim of sexual assault, or the fact that many people are waking up this morning not surprised and un- phased?

SALENA ZITO, CNN CONTRIBUTOR: Both. You know - I mean, we have to think about how the people that voted for President Trump feel. They, sort of, have the expectation - you know, a lot of people in Washington are surprised of - that he did that at the rally.

A lot of people that voted for President Trump are not surprised. This is how he campaigns. This is how he gets his point across. I would say he has been measured when he's been with the White House.


ZITO: But out in a rally, for him, it is always a no-holds bar. He is always going to be not politically correct. And, you know, I think he understands that a week ago his base was not that fired up to show up in the midterms. That his (inaudible)...

HARLOW: That's interesting (ph).

ZITO: ...but this has, you know, sort of, woke up the sleeping beast. And I see a lot more enthusiasm among his coalition to show up in the midterms that might not have shown up just because they feel like they already got what they wanted, and they don't think they need to show up.

SCIUTTO: Right. So, let's - that's an important point and we've been talking about that for days now, how it effects the midterms. But on the more immediate question, does Kavanaugh get confirmed? The question is, does the President, taking that position, one that he's avoided - he avoided, for a number of days, of attacking the accuser. Does that make a yes vote more difficult for the Republicans on the fence here; Collins, Murkowski, and Flake as well? Could it be damaging to the President's intention here which is to get Kavanaugh confirmed?

ZITO: Yes. I mean, it absolutely could. I mean, I don't Washington as well as knowing outside the bubble, but I suspect it might impact it. But I think the senator's duty is to ready, and listen, and understand the facts that come from the report. And also, all of the rest of the confirmation proceedings, as opposed to how the President does and doesn't behave because it's about Kavanaugh.

HARLOW: Laura Coates, to you. You know, one thing that the President didn't mention last night is this. I want to play, for you, the moment during the testimony when Professor Ford remembered exactly the laughter she says she heard after she was attacked. Let's play this.


CHRISTINE BLASEY FORD, KAVANAUGH ACCUSER: Indelible in the hippocampus is the laughter - the uproarious laughter between the two. And they're having fun at my expense.



HARLOW: Laura, to you. I mean, it is not uncommon for a victim of assault to only remember certain things from an assault that happened a long time ago. The President completely skipped over the fact that she, vividly, remembers that.

LAURA COATES, CNN LEGAL ANALYST: Well, certainly, the idea that that - that was indelible back in the day for her, imagine what it feels like now to still have the uproarious laughter from people in the crowd and standing behind the President of the United States as he mocked her memory.

And, of course, he is cherry-picking in many ways here, Poppy, because her memory was not just focused on the amount of alcohol she consumed that day. Talked about the actual layout of the home, where she went upstairs, a bathroom across from it, who was in the room, the names of the people, the idea of music being put at a louder tone so she couldn't actually be able to scream and be heard.

HARLOW: Right.

COATES: Talking about downstairs. The notion that she was, simply, just trying to have, and create, a narrative based on amnesia is, absolutely, false. And also, the President seems to misconstrue a very fundamental thing. He proves his point on the idea of Dr. Jekyll and Mr. Hyde, the idea of duplicitousness (ph) here.

What people are criticizing Kavanaugh for, in addition to the allegation of sexual assault, is that he's been, wholly, inconsistent in his demeanor, his presentation of information. And cherry-picking facts actually help his own narrative, but undermine his credibility.


COATES: Now you have the President of the United States who on the one hand is giving a press conference, talking about her being a very credible person, a very nice lady, not wanting her to be glossed over. And on the other side, you have him cherry-picking facts, pretending that her memory is at issue, and also deciding that now he's able to mock her, and to denigrate her in this way.

This really, very much, is why people look at this issue and say this is not helping the confirmation process. And, frankly, it undermines sexual assault victims. And it's only sexual assault victims who are ever held to the standard of saying you must remember every single detail that's happened to you.

SCIUTTO: They're - they're apparent (ph).

COATES: No other person or victim of a crime has to.

SCIUTTO: When, in fact, the - the data, the experience shows, we've spoken with a number of prosecutor's experience here.

HARLOW: Right.

SCIUTTO: The victims often remember details like the laughter, et cetera...


SCIUTTO: ...but, perhaps, not the date, or the street address. Josh Campbell, if I could speak to you because this gets to a point that - that Laura Coates raised here which is about the contradiction and affect that Kavanaugh portrayed himself in that testimony as, you know, something of a choirboy, et cetera. But there's been a lot of contradictory information that's come out

since then. Case in point, the New York Times released a letter from 1983 where Kavanaugh described himself and his friends as loud, obnoxious drunks with prolific pukers. He signed it, multiple Fs, Bart. Of course, Bart, a reference, you know, this book Bart (ph) - where he was referred to in the Mark Judge book as - or someone like him...



SCIUTTO: Bart or Kavanaugh (ph), but on this point - because, listen, folks may hear this and say, it's 1983. He was a high school kid. A lot of kids did this, talked in that way. From the FBI's perspective, as it's - as it's presenting its report to the Senate and the White House, do contradictions like that show up in the report and say, yes, we establish that was he said before the committee was contradicted by witnesses and by other evidence that we've found?

CAMPBELL: So, two parts there. So, this is not the standard criminal investigation where the FBI would gather facts and then present a recommendation to the Justice Department.

HARLOW: Right.

CAMPBELL: And work closely with prosecutors...

HARLOW: Right - right - right.

CAMPBELL: figure out what's there. This is - they're, merely, in collection mode at this point. So, they're talking to witnesses. They're gathering information. That will go over to the White House. It will, ultimately, determine the suitability. But I think it's important for the American people, for the Senate, for the President to understand that we're not talking about someone's drinking habits because we're casting judgment on people who...

HARLOW: Right.

CAMPBELL: ...drink alcohol. We're looking at - through this place in time, figuring out why is it important today?

HARLOW: Your points an important one. You're saying they wouldn't, in this 302 report, just oppose this letter with his statement under oath.

CAMPBELL: No. They would.

HARLOW: That would be left to the senators to vote on this today (ph).

CAMPBELL: Correct. And the White House to determine that.

HARLOW: Got it.

CAMPBELL: And so, the issue here today is, well, why are people saying that what Mr. - the judge has said...


CAMPBELL: not true. And what's really interesting, I think the White House knows this. So, there's this bit of an effort to deflect. And now, let's attack the witness. And I say this very quickly because this is something that is - is very enraging, as a former law enforcement officer, to see the President of the United States going after a victim.

We know that sexual assaults are, highly, underreported. We try to tell the public to call the FBI and report these kinds of things to law enforcement. And then, the second thing is, do you remember back in 2015 when President Obama weighed in on the Hillary Clinton investigation? That ranked - racked (ph) up a lot of people inside the Justice Department when he said that, you know, there's no threat to the national security.

Here, I thought about that immediately because we have the President of the United States weighing on an ongoing FBI investigation, casting judgment on one of the parties, one of the witnesses which is, highly, inappropriate...


CAMPBELL: ...because he leads the Justice Department.


SCIUTTO: And not the first time he's piped in on ongoing investigations. Josh, Laura, Salena. Thanks very much. These are difficult questions, difficult issues. We're doing our best with them. Coming up, dubious tax schemes and outright fraud, a stunning new New York Times investigation, finding that President Trump helped his parents dodge taxes in the 1990s,


padding his family fortune. We're going to break it down - all the details. Plus, the President wants voters to pretend that he's on the ballot this November. Is that a winning strategy?

HARLOW: Also, the death toll in Indonesia is rising again after the devastating earthquake and tsunami, now another threat, a volcanic eruption. We'll take you there, live.


SCIUTTO: If you've ever heard Donald Trump tell his own life story, and I'd say there's a pretty good chance of that, this might sound familiar.


TRUMP: My father gave me a small loan of a million dollars. I came into Manhattan, and I had to pay him back, and I had to pay him back with interest. I started with a million dollar loan. I built a $10 billion company.

And my father gave me a very small loan in 1975 and I built it into a company that's worth many - many billions of dollars. I built that into a massive empire. And I paid my father back, that loan.


SCIUTTO: Well, long before he ever ran for president, Donald Trump, the brand, was based on that story. The story of self-made...

[09:15:00] JIM SCIUTTO, CO-HOST, NEWSROOM: Tax schemes and outright fraud -- these are difficult questions, difficult issues, we're doing our best with them. Coming up, dubious tax schemes and outright fraud. A stunning new "New York Times" investigation finding that President Trump helped his parents dodge taxes in the 1990s, padding his family fortune.

We're going to break it down, all the details. Plus, the president wants voters to pretend that he is on the ballot this November. Is that a winning strategy?

POPPY HARLOW, CO-HOST, NEWSROOM: Also the death toll in Indonesia is rising again after the devastating earthquake and tsunami. Now another threat of volcanic eruption? We'll take you there live.


SCIUTTO: If you ever heard Donald Trump tell his own life story, and I'd say there's a pretty good chance of that, this might sound familiar.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: My father gave me a small loan of a million dollars, I came into Manhattan and I had to pay him back, and I had to pay him back with interest. I started with a million-dollar loan, I built a $10 billion company.

[09:20:00] My father gave me a very small loan in 1975, and I built it into a company that's worth many billions of dollars.

I built that into a massive empire, and I paid my father back, that loan.


SCIUTTO: Well, long before he ever run for president, Donald Trump, the brand was based on that story, the story of self-made billions. But a stunning new "New York Times" investigation disputes that.

HARLOW: For 18 months in a locked room at the "New York Times", three journalists poured over tens of thousands of documents, going back decades, learning that the future president and his siblings received more than a billion dollars from their parents. In the process, helping, according to the "Times" to hide much of that family fortune from the IRS.

Just moments ago, the president responded to the "Times" story on Twitter, calling it "old, boring and an often told hit piece." Notably, he did not say it was inaccurate. Our Cristina Alesci has been pouring through all this, she joins us now. I mean, just looking at what the "Times" has here on the front page, they have checked -- I mean, it's amazing, right? And we don't know how they got all of this, how they got these tax returns, but they did. What is the big takeaway?

CRISTINA ALESCI, CNN CORRESPONDENT: It completely destroys Trump's narrative that he is a self-made billionaire, and in details in pain- staking ways, how his father, Fred, transferred his vast fortune to his children by either illegally evading taxes or legally avoiding them. But here is some of the numbers specifically --

HARLOW: Yes --

ALESCI: Before we get into the nitty-gritty of how it all works that the "Times" unearthed. At three years old, Trump was earning $200,000 a year already. At age eight, he was a millionaire. At 17, he was part owner of a 52-unit apartment building, and after graduating college, Trump was receiving a million dollars a year from his father -- sorry, just a million dollars from his father.

At -- in his 40s and 50s, he was getting $5 million annually. Look, it seems like Trump gave his children based on the "New York Times" reporting, an equal share of his dad's fortune. But Trump, according to the "New York Times" disproportionally benefitted because his father was there when Trump ran into issues with his various risky investments.

In other words, Trump had a very big safety net --

HARLOW: Yes --

ALESCI: He goes out there --


ALESCI: And says I did all of these deals, they were risky, I took -- you know, I took these risks and they were based on my gut instincts, and yes, perhaps, but he also did so with a very vast --

HARLOW: Yes --


ALESCI: Safety net --

SCIUTTO: I mean, just one year of income as a teenager there belies that my father only gave -- only gave me a million-dollar loan --

ALESCI: Right, and those are all in today's dollars --

SCIUTTO: Yes -- ALESCI: By the way.

SCIUTTO: Question for you, anything illegal uncovered in this or this was legal tax evasion?

ALESCI: Well, the "New York Times" goes as far as to detail what may have been a fraudulent scheme --

SCIUTTO: Right, the use of that word is defraud.

ALESCI: Exactly, but at this point, we've probably passed the Statute of Limitations for a lot of these crimes, although the New York Department of taxation says that it's going to vigorously pursue all of the appropriate avenues for investigation. Look, the most interesting part of this development here is that, this backs Trump into a corner.

If he really feels this story is untrue and wants to sue the "New York Times", he is at risk for revealing his tax returns. If he doesn't sue and takes that counter-puncture or position, then he is essentially admitting that the "Times" story is correct.

HARLOW: By the way, the strongest counter-punch to this would be, do what every other presidential candidate and president --

ALESCI: Yes --

HARLOW: Has done --

SCIUTTO: Right --

HARLOW: In modern history, and that is release your tax returns.


HARLOW: Politically, what's your read?

ALESCI: Politically, this definitely adds fuel to the fire that the Democrats are building if they take control of either chamber to call for Trump to release his tax returns. And they will say the American people need to know whether or not President Trump is using the same tax avoidance or illegal tax maneuvers that his father used.

And that's where the rubble will meet the road.

SCIUTTO: Legislation being considered to require --

HARLOW: Yes --

ALESCI: Definitely --

SCIUTTO: The release of those tax returns. Cristina Alesci --

ALESCI: Thank you --

SCIUTTO: Very much, let's bring back in Laura Coates who certainly knows the legal aspect here. So you just heard that the Statute of Limitations passed, I believe it's three years for tax, although, it can be extended under certain circumstances. But there is a civil, potential civil risk to the president. Is that right?

LAURA COATES, CNN LEGAL ANALYSTS: It is right, the idea that limitations period has run for criminal cases, it can be sent to six years. But it's really important to note that it really is from the last instance of the tax evasion. Not just the actual calendar year, and so there is a conceivable theory that could run, that says that if there is evidence in the most recent tax returns or that due in that limitations period, if there is still evidence of tax evasion or an ongoing quest to try to dupe the government and perhaps it could actually toll in that fashion.

However, you're largely right, the idea of limitations being run, the criminal contacts is there. On the civil side of things, though, there is no Statute of Limitations, period. The government can always get their money, it often runs up to 75 percent of the amount of income that you tried to hide from the government.

[09:25:00] And so, there is a way to do just that. But again, the larger issue here is the overall scheme of things. What is -- what are the activities that have been undertaken to try to evade and circumvent the tax laws? Not just exploiting legal loopholes, but trying to do it in a criminal way. That's the big question here.

HARLOW: Where do you think this goes? What's your gut as a former prosecutor? Does this -- is this just a bad look or does it actually result in anything?

COATES: Well, one, I think that Mueller's team probably already has this information. I also think the state of New York and they're looking at the Trump Foundation and their own tax issues as probably part of this overall controversy. What someone like Michael Cohen might know about the legal or tax strategy happening may come into play.

But ultimately, this is -- but the third instance now where the President of United States hand may be forced to actually show his income taxes, we already know that just having an audit does not say you cannot provide the information --

SCIUTTO: Right --

HARLOW: But you have the emolument cases out of Washington D.C. and out of this area that says that the president has been benefitting financially from the use of his hotel, et cetera. And that's also asking for his tax returns and how he's quantifying that payment. So you have yet another instance, this could actually be the straw that breaks the camel's back that says I will not release it.

Emoluments are very obscure part of the competition, plus this, may say we will get full information and disclosure.

SCUITTO: You know, and listen, this is happening as the president has repeatedly advocated for tax legislation, tax cuts -- HARLOW: Right ---

SCIUTTO: That he has a personal interest in --

HARLOW: And also ending the estate tax --


HARLOW: A promise --


HARLOW: He made on the trail. Laura, thanks, so interesting --

COATES: Thank you --

HARLOW: We appreciate your expertise. One of the reporters who broke that story is going to join us next hour. Ahead for us now, we'll call the action the president not up for re-election for another two years. His message to the supporters for the midterms -- vote like I am.

SCIUTTO: We are moments away as well from the opening bell on Wall Street. Dow set to rise this morning to reach a new record high. Something the president has already tweeted about this morning. Investors will be keeping their eye on the jobs report due out at the end of the week.



SEN. SUSAN COLLINS (R), MAINE: The president's comments were just plain wrong.

UNIDENTIFIED MALE: Is it going to affect your vote, senator?


SCIUTTO: Well, it was brief there, but you heard Senator Susan Collins, a key Republican swing vote --

HARLOW: Yes --

SCIUTTO: On Kavanaugh's nomination there, asked by our Manu Raju due to the president's comments yesterday, mocking Christine Blasey Ford? Her words, Senator Collins, "well, it's just plain wrong".

HARLOW: So that is significant on top of Jeff Flake this morning saying on another network, it's appalling.


HARLOW: So what's Lisa Murkowski going to say? And you're right, what does that mean for the vote?

SCIUTTO: And now Collins was asked there, would it affect your vote? She did not answer that --

HARLOW: Right --

SCIUTTO: Question, but certainly very strong reactions --

HARLOW: Yes --

SCIUTTO: From key Republicans on this. And this of course is key because control of the Senate hanging in the balance and with the mid-terms just 34 days away now as we --

HARLOW: That's right --

SCIUTTO: As we kick down that clock, the president had a message for voters last night as the mid-terms approached.


TRUMP: And I'm not on the ticket, but I am on the ticket because this is also a referendum about me. I want you to vote, pretend I'm on the ballot, and don't worry, we'll be on the ballot in two years and we will do a landslide like you haven't -- like you wouldn't believe.


HARLOW: Uproarious applause for the president there. Let's discuss the odds with Harry Enten; our forecaster. I don't think that's her exact title, but you know --

SCIUTTO: Astrologist --

HARLOW: And then --

SCIUTTO: Soothsayer, what do we call you?

HARLOW: That too, what does Alex get, Alex, see where we've got to give you a title --