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U.S. Secretary of State Travels To North Korea This Week; Ambassador Warns U.S. Could take Out Russian Missiles; U.S. First Lady On First Major Solo Trip; Magic Leap And Mixed Reality. Aired 3-4a ET

Aired October 3, 2018 - 03:00   ET

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


[03:00:00] (COMMERCIAL BREAK)

KRISTIE LU STOUT, CNN HOST: Struggling to survive. After the tsunami thousands of people are scrambling to get food, clean water, and fuel.

A new report tells how the Trump family used dodgy tax practices to amassed their fortune.

Plus, Theresa May is set to deliver a major speech just one day after her former foreign secretary called her Brexit plan a, quote, "constitutional outrage."

Hello and welcome to our viewers joining us from all around the world. I'm Kristie Lu Stout. And this is CNN Newsroom.

The president of the Indonesia is in the heart of the country's disaster zone following Friday's catastrophic earthquake and tsunami. He is making his second visit to Sulawesi island in just days, and cargo planes pack of supplies have been arriving there as well.

A short time ago, he was at the site of a collapsed eight-story hotel in the ravage to the Palu. Search teams have been digging through the rubble trying to find anyone trapped anyone still alive.

An official say there is an urgent need for food, clean water, shelter, and medical care. More than 1400 people died in the earthquake and tsunami. Hundreds are injured.

Our CNN's Matt Rivers is in Palu with the latest. And a warning some of the images you are about to see are disturbing.

MATT RIVERS, CNN CORRESPONDENT: Four soldiers to a bag. They dragged the person inside to a crude resting place. It feels course and undeserved. This is a hastily dug mass grave on a Palu hillside, a direct result of an earthquake and tsunami that no one was prepared for.

There's 194 people buried here. Some of whom are still unidentified that didn't deserve this. These are brothers, sisters, fathers, mothers, grandparents, friends, and they all just happened to be in the wrong place at the wrong time.

Authorities have laid hundreds of bodies in the streets for days after the morgues ran out of room, we saw them ourselves. Officials say the bodies could spread disease, the World Health Organization says that's not completely true. But the burials go on. The unidentified bodies did have their pictures taken, so hopefully they can be I.D.'d later.

A short drive away those lucky enough to be alive gather in a place where life is hard. A makeshift camp designed to help the newly homeless is widely unable to meet people's needs. Baby Mohammed (Ph) is sick even if they had formula, which they don't, water here is scarce.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (through translator): Drinkable water we are very short of drinkable water.

(END VIDEO CLIP)

RIVERS: For others, the indignity of living outside is exacerbated by having no clean way to use the bathroom.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): We need public toilets, none are provided to us. There's some here but they are broken and can't be used.

(END VIDEO CLIP)

RIVERS: So five days on in camps like these there's a lack of electrify, of water, of water, of healthcare, of hygiene. It's no wonder people are getting frustrated and they're increasingly blaming the government for what has pretty obviously been a slow response.

Fuel has been scarce too. A few station is open. If you follow the rules and line up you could trade a day just for a few liters.

So while you join, is by taking your gas containers running this rope through the handle. Basically, the rope snakes all the way around and ends at the only gas pump that's open now. So, you hook up, you move it up the line and you wait.

These people wouldn't wait. We watched them loop fuel tanks underneath the ground and bamboo poles dip in, coming up full. Armed soldiers really watched. They told us they didn't want to spark a riot. They just want to run their bikes or generators, another said. It's not there's anywhere else they could get it fast.

Dozens of people, though, have been arrested for looting city-wide. The government says there have been challenges in their aide mission but that overall, they're making the best of the bad situation. And yes, help is slowly increasing. Aids ships are in route and aid flights are picking up but not fast enough.

Looting, thirsty babies, hungry kids, filthy camps and mass burials do not equal an effective disaster response.

Matt Rivers, CNN, Palu, Indonesia. STOUT: And my colleague Alexandra Field joins us now with more of the

situation in Indonesia. And Alex, as we saw there in Matt's report, basic needs are not being met. Five days on why are people still struggling to get help?

ALEXANDRA FIELD, CNN CORRESPONDENT: Yes, these are the question that officials are being force to answer as frustration mounts, and frankly, as desperation mounts. We have documented well that since the beginning there have been logistical problems with getting to the affected area when it comes to broken roads, down bridges, landslides, and the like.

[03:04:55] But five days on there are these critical need. The president was there to tour the areas. Again, talking about the effort to get supplied for the people who needs them -- who need them. But he did say that there are still areas that cannot be reached at all, areas where aid is desperately needed.

He did say that a lot of fuel has arrived to the region. He did say that humanitarian supplies have also arrived and that they're working on distribution. What people need right now is clean water and they need food. They need medicine and they need shelter.

Their updated death tolls numbers here, Kristie, some 1407 people have been killed, some 70,000 people out of their homes. So they need to get these supplies in the hands of survivors still urgent five days later.

STOUT: Now as the frustration and desperation deepen in the quake zone, search and rescue crews they continue to do their work. Is there is still hope of finding additional survivors?

FIELD: I don't think that anyone is willing to say that there is no hope right. The president has said that they will continue with the rescue efforts. He's pointed to the fact that they've been able to bring more heavy machinery and equipment into the area that will help in terms of sifting through some of the debris. He has said that they are committed to making these rescue attempts.

Certainly, the situation is bleak. We have seen that they have dug mass graves there in order to bury the hundreds of bodies that continue to be discovered. Some of this rescue effort will be aided by the fact that he says that electricity is more widely available through the use of generators right now.

The primary focus does of course remain on trying to find survivors and doing these rescues. But the president was also there saying that he wants to encourage some economic activity, saying that he wants to see some shops and businesses open where possible and that police would be available to guard those areas if they can get some businesses up and running trying to restore at some sense of normalcy despite the fact that this is wholly, entirely abnormal.

I mean, Kristie, we are looking at pictures of just utter devastation.

STOUT: Yes, we're also looking at that death toll as it continues to rise, now at 1,407 people dead. Now the death toll is probably going to climb even more. Why was this disaster so deadly and so devastating?

FIELD: There will be a lot of questions about that in the aftermath, the key question of course being could any of this have been prevented.

And certainly, in recent days you have seen accusations made against the government, that the tsunami warning system was inadequate. They have pushed back against that.

International experts have weighed in saying that sure there are in fact ways to improve Indonesia's tsunami warning system, but they have also said that the area geographically and the nature of the disaster made it nearly impossible to defend against this.

But Kristie, we know that we have seen Indonesia struggle and grapple with international -- sorry -- with national disasters or regional disasters before. The question that's really going to persist in the aftermath of this is why they weren't able to get resources and supplies to survivors more quickly.

STOUT: Yes.

FIELD: They have flown a number of military aircraft there, they have since supplies on ships but it still the distribution now that supplies are on Sulawesi that remains the challenge and that is something that is proving to be of critical frustration for people on the ground.

STOUT: Yes. And it's five days on the struggle for survival is underway.

Alexandra Field reporting live for us. Alex, thank you.

New York State authorities they are investigating explosive new allegations against U.S. President Donald Trump. A month-long investigation by the New York Times alleges that Mr. Trump built his real estate empire with hundreds of millions of dollars in tax dodges and instances of outright fraud.

Now the Times says Mr. Trump inherited today's equivalent of more than $400 million from his father, much of it coming from schemes that his parents evade paying taxes.

Now CNN's Anderson Cooper spoke with one of the reporters behind this investigation.

(BEGIN VIDEO CLIP)

RUSS BUETTNER, INVESTIGATIVE REPORTER, THE NEW YORK TIMES: His father was paying him money from time he was three years old. At first the first mechanism--

(CROSSTALK)

ANDERSON COOPER, CNN HOST: Since he was three?

BUETTNER: Since he was three, yes. The first mechanism was his father had built some large apartment complexes and he gave the land under those apartment complexes to his children, including the president who was then three, and then began paying them rent on that over the course of his life. That's the start--

(CROSSTALK)

COOPER: His father was paying the kid's for the land that he had -- has property on.

BUETTNER: Right.

COOPER: And they're three -- and he is three years old.

BUETTNER: Right.

COOPER: OK.

BUETTNER: And he was collecting at that point in time the equivalent of about a physician's salary from the time he was, you know,--

(CROSSTALK)

COOPER: So by the time he graduated high school or college did he have a lot of money?

BUETTNER: He was multimillionaire by that time. His father found other mechanisms including treating him like a bank and paying him interest on loans as if he borrowed money from his children. He started giving him apartment complexes when he was 16 years old and then it really escalated in the 1980s when Donald is in his 40s.

COOPER: You report also that, and I want to make I get this right, that his father had set up a sophisticated system to help the family avoid paying taxes. In some cases you're right about a shell company that was create to essentially funnel money through it to avoid paying taxes.

[03:10:04] BUETTNER: Right. That's one of our favorites because it's pretty, pretty simple sort of bracing scheme. His father's businesses, his apartment buildings bought a tremendous amount of goods. Boilers, roofs, wind decks, all kinds of stuff.

And his father continues to buy those things and negotiate the prices for those. But in 1992 they set up a separate entity but had no known existence other than on paper that would get the bills for those things, add on 20 percent to that then bill the father's businesses. And then the siblings would share that 20 percent in over just a few years. That was adding up to millions of each--

(CROSSTALK)

COOPER: So it was basically a fake business. A business he has on paper that was taxing or adding on 20 percent to the stuff and that was just money being funneled to the kids.

BUETTNER: That's exactly right.

COOPER: And that's the way of avoiding actually taxes on money given directly.

BUETTNER: Yes, that's exactly right.

COOPER: So there's a limit on how much you can give your child.

BUETTNER: And it was very low at the time and gift taxes at that the time are quite punishing, there are 55 percent.

(CROSSTALK)

COOPER: Was that legal?

BUETTNER: When we've talk to prosecutors who said they think it is illegal on a couple of ways. One, just avoiding, it seems like a scheme to avoid a gift tax or an estate tax later.

There was another aspect of that particular one that cause other problems where they were using those inflated invoices to apply for rent increases on their rent regulated apartments, and then the rent on those apartments for low and middle income families would be artificially increased based on that patent income.

COOPER: So low income families were paying more rent than they really legally had to.

BUETTNER: That's right.

(END VIDEO CLIP)

STOUT: Its blockbuster report took months of digging. The White House Press Secretary Sarah Sanders responded she blasted the New York Times report saying this, quote, "Fred Trump has been gone for nearly 20 years and it's sad to witness this misleading attack against the Trump family by the failing New York Times. Decades ago the IRS reviewed and signed off on these transactions," unquote.

Now, let's bring in Amy Pope, she is a former deputy homeland security advisor in the Obama White House now a senior fellow at the Atlantic Council. Amy, good to see you. Thank you for joining us. We got to talk about this New York Times report.

It effectively fights the narrative that Trump made his millions on his own, there is also the dodgy tax schemes involve. Just how damaging is this for the U.S. president?

AMY POPE, SENIOR FELLOW, ATLANTIC COUNCIL: That's the real question. I mean it's not really a surprise to hear that Trump's allegations that he's a self-made billionaire are being called into question. This is not the first time we've seen that assertion questions.

This obviously gives a much more detailed accounts of why those assertions are wrong or misleading. But voters haven't really seemed to mind.

I think the real question and the real concern here are the allegations of tax fraud and other criminal behavior and that, that calls into question not only how he's earned his money but whether or not he is honest, credible and not holding himself to the same standards that we expect every American to hold themselves to when filing their taxes.

STOUT: Yes, so a fraudulent tax schemes evolved that would be, you know, very damaging here potentially for the U.S. president.

Now Amy, just hang tight for us for just a moment, I really want to get your thoughts on the Kavanaugh investigation in just the moment. Just to bring our audience up to speed, we know that the FBI is expanding its investigation into sexual assault allegations against Brett Kavanaugh beyond its four initial witnesses.

Sources now tell CNN the bureau is talking to high school friends of the U.S. Supreme Court nominee about the party where the alleged assault could've taken place. Still the Republican leader of U.S. Senate is pledging a vote on Kavanaugh's confirmation this week. And President Trump he is still standing by his pick.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: A lot is going to depend on what comes back from the FBI in terms of their -- their additional numbers they're having on investigation. But I think that Judge Kavanaugh is doing very well right now.

What's happening here has much more to do than even the appointment of a Supreme Court justice. It really does. You could somebody that was perfect your entire life and somebody could accuse you of something. Doesn't necessarily have to be a woman as everybody is saying, but somebody could accuse you of something and you're automatically guilty. But in this realm you are truly guilty until proven innocent.

(END VIDEO CLIP)

STOUT: Now at a campaign rally in Mississippi (Inaudible) the president shifted the narrative a bit. For the first time he mocked Kavanaugh's accuser, Christine Blasey Ford.

(BEGIN VIDEO CLIP)

TRUMP: I had one beer, right? I had one beer. Well, you think it was -- no. It was one beer. Good. How did you get home? I don't remember. How did you get there? I don't (TECHNICAL PROBLEM).

(END VIDEO CLIP)

[03:15:00] (TECHNICAL PROBLEM)

POPE: -- voters who are going (AUDIO GAP) and upset about the way this is being handled. STOUT: You know, it looks like President Trump he is tapping into that, you know, those comments where he is mocking Blasey Ford, where he says that these are, quote, "scary times for young man." Is this turning into a rallying cry for Republicans for the upcoming midterm elections?

POPE: I'm sure that it is. Look, this is a similar tactic to what Trump used during the presidential election. He is speaking to a base that feels alienated and that feels like they are in the minority at the moment.

And so, he is hoping that by speaking to them and getting them energized that they'll go to the polls and vote in the midterm election. The real danger for the president is that he loses the majority in the House and the Senate which will then subject him to very significantly increase oversight.

That's not the situation he wants to be in, particularly in light of things like this New York Times investigation. So it's in the president's interest to get people to the polls and he is banking on the fact that this particular base will go there based on this protracted confirmation process.

STOUT: And that's why he is sticking with his pick, he is sticking with Brett Kavanaugh.

POPE: Yes.

STOUT: Amy Hope of the Atlantic Council, thank you so much for joining us. Take care.

POPE: Thank you.

STOUT: Now just in here to CNN Newsroom. One of France's most notorious criminals who escape from prison on a helicopter back in July is now back in custody. Redoine Faid was arrested north of Paris on Tuesday along with his brother and three other people.

Faid has broken out of prison two different times. In 2013, he used explosives to blast his way out. This past July armed men hijacked the helicopter and forced the pilot to help Faid escape. He'd been serving 25 years in prison for his role in a failed robbery that led to a police officer's death.

The British Prime Minister Theresa May is taking a big political gamble. She is not backing down from her Brexit plan as a popular but divisive ghost from the past tries to haunt her.

And later this hour. A new and disturbing assessment of how North Korea's Kim Jong-un is moving ahead with his nuclear weapons program. We got details, next.

[03:20:00] (COMMERCIAL BREAK)

STOUT: Welcome back. Now one of China's most famous actresses who hasn't been seen in public since June is now facing massive fines for tax evasion. A state media report that Fan Bingbing has been ordered to pay nearly $130 million for lying about how much money she made from some of her films.

Now Fan posted an apology on social media saying this. Quote, "As a public figure, I should abided by laws and regulations and been a role model in the industry and society." unquote. Now Fan says that she completely accepts the decision by tax authorities and plans to repay what she owes.

Now, in a few hours the British Prime Minister Theresa May will again defend her Brexit plan as she fights for her political survival. These photos show her preparing for closing speech at the conservative party conference.

Now Mrs. May is standing by her proposal to keep some close economic ties with the European Union, but Brexit talks have stalled less than six months before Britain leaves the E.U. Deal or no deal. And now she is facing fierce criticism from one of the most recognizable and yes, flamboyant figures in British politics.

Her former Foreign Secretary Boris Johnson urge their conservative party not to support May's vision for Brexit.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, BRITISH FOREIGN SECRETARY: All this nonsense we will have to implement with no mobility to change or resist. That is not pragmatic. That is not a compromise. It is dangerous and unstable politically and economically.

My fellow conservatives, this is not democracy. That is not what we voted for.

(END VIDEO CLIP)

STOUT: Now CNN's Bianca Nobilo joins us live from Birmingham where Mrs. May will deliver the big closing address at the conference of her conservative party. And Bianca, ahead of Theresa May's critical speech today, how much all of the conservative party is backing her, not Boris Johnson, but her and her plan for Brexit.

BIANCA NOBILO, CNN PRODUCER: It's so difficult to tell. The entire time I've been here and since Sunday, I've got the sense that there are parallel conferences going on as the official agenda which was happening in the main hall.

And that speeches from the cabinet, they all stick to the official line, they are highly choreographed, not particularly well attended but obviously doing (Ph) anything too controversial. And then you have the fringe events. Those are the brexiters who aren't too shy in criticizing the prime minister and pushing for her to drop her Checquers plan.

In fact, Kristie, just a few moments before I went live, I was speaking to a member of the conservative party, and I said, are you looking forward to the prime minister's speech today? And he pause and what he chose in response was, Boris's speech yesterday reminded me why I became a conservative.

Now, if I was the prime minister or any of her press team, that sort of sentiment would deeply unsettling today.

STOUT: Yes, that's a pretty bruising response there. So what's at stake here seeking for Theresa May. I mean, she really needs to kill it with the speech later today, because if not, could this be her last party Congress.

NOBILO: Well, certainly enough people have thought for some time that it would probably be her last party conference because she is always being considered a prime minister in waiting, that she's last about until Brexit to next year and get that done on the 29th of March, and then somebody would naturally replace her.

[03:25:04] However, it's looking less and less likely that Brexit will be all tied up and neatly achieved by that date therefore she might stay on longer.

In terms of what is at stake, everything is at stake because the prime minister's credibility and her tenure as leader is now synonymous with her Brexit plan.

So if she's unable to persuade the audience here and of course media outlet and everybody listening around the country to come round to her plan then she is in serious trouble.

That is a huge amount at stake and not just for the prime minister and for Brexit plan but also I feel here for the future of this party which is really struggling with its identity at the moment. So she needs to take this opportunity in the speech to boost morale, to reassert her authority, especially given the disastrous conference speech.

I'm sure you remember from last year where she had the terrible cough plaguing her throughout. There was a prankster that interrupted and then the set fell apart behind her. So in that regard, perhaps expectations are a little low but she does really needs to deliver.

STOUT: Yes, a tall order. Bianca Nobilo reporting live from Birmingham. We'll talk again soon. Thank you.

Now the U.S. Secretary of State Mike Pompeo head to Pyongyang later this week after several hiccups in the negotiation process. Will North Korea follow through on its pledge to denuclearize?

And the U.S. ambassador to NATO had some damage control after warning that the U.S. could, quote, "take out Russian missiles."

(COMMERCIAL BREAK)

STOUT: Welcome to CNN Newsroom. I'm Kristie Lu Stout.

Let's update you on our top news this hour. As Indonesia's president is getting another firsthand look at the devastation from Friday's earthquake and tsunami in Sulawesi island, the death toll continues to climb. It is now past 1400.

Now thousands of people were injured in the twin disaster. And there's also frustration over the pace of aid. Aid officials say that there's an urgent need for food, clean water and medical supplies in the stricken region.

The White House is a New York Times report on how Trump made his fortune. Now paper's investigation shows Mr. Trump inherited today's equivalent of more than $400 million from his father, much of it from schemes to help his parents evade paying taxes.

Now Chinese actress Fan Bingbing who hasn't been seen publicly since June is now facing massive fines for tax evasion. State media report that she has been ordered to pay nearly $130 million for misstating her income from films. Now fan posting apology in social media and says she plans to repay what she owes.

[03:30:05] The U.S. Secretary of State Mike Pompeo, is heading back to Pyongyang later this week in an effort to organize a second summit between U.S. president Donald Trump and North Korea's Kim Jong-un and this comes just as South Korea is unification minister said that the North may have as many as 60 nuclear weapons. Paula Hancocks is following all the developments. She joins us now live from Seoul.

Paula, Pompeo's visit coming in an interesting time, you know head up for that talk from Donald Trump about love, pressing optimism about relations. We also have rising scrutiny about the North Korea nuclear stock pile so, what should we expect to come out of this meeting in Pyongyang this weekend?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Kristie, it as far as the U.S. is concerned. Things are moving forward. The very fact that the U.S. Secretary of State Mike Pompeo is heading to Pyongyang this weekend in fact the State Department has already announced, he will meet with the North Korean leader Kim Jong-un on Sunday. And as you say, we had those extremely positive words coming from the U.S. president talking about Kim Jong-un. Talking about the extraordinary letters that he had received from him as well.

To me as far as the Trump administration appears concerned at this point it is moving forward, it will be the fourth trip for the U.S. secretary of state. But it does come at the same time as you hear from the South Korean unification minister that North Korea could have anywhere between 20 and 60 nuclear warheads. He was speaking to parliament when he gave that figure and that was from intelligence agency here in South Korea and as far as I can tell that is the first time he had that kind of official figure out from the from the South Korean official from the government.

Certainly that would be weighing over the meeting that the meeting itself for Mr. Pompeo is going to be focused. We expect many on the second summit that Kim Jong-un and the U.S President Donald Trump wants. Mr. Trump says he wants it fairly soon. Kim Jong-un has said three -- the South Korean president, he wants it as soon as possible and South Korean President Moon Jae-in wants it as well. So, when you those three leaders pushing for the summit you would imagine that it could happen sooner or later, Kristie.

LU STOUT: Yes. And despite the push for another summit, you know, in the start of the talk that we heard early from Donald about love, between Kim Jong-un and himself. I mean, let us talk about the U.S. and North Korean relationship. Is this is also a dysfunctional relationship? I mean, this is something that started out with threats and abuse. Despite where we are now. Could it very well return to that?

HANCOCKS: Well, that is certainly the concern among many experts. The fact that it does happen so quickly that there has been as it is such a change in attitude from the U.S. President from calling Kim Jong-un a little rocket man from talking about fire and fury totally destroying North Korea to where we are now with that the U.S. president talking about falling in love with Kim Jong-un and saying that the feeling was vice versa.

What experts are looking for now are tangible examples of North Korea being willing to denuclearize. We heard from the South Korean president after he met in Pyongyang for a few days with Kim Jong-un that he was willing to give up and shut down the Yongbyon nuclear facility, but it has conditions he wants concessions for that now we have this this phrase corresponding measures from the U.S. which is being bandied about. It was suggested from the South Koreans that needed it would be declaration at the end of the Korean War that would be considered one of the corresponding measures.

We should set from North Korean statement media (inaudible) saying that would necessarily be enough to justify denuclearization. So it is really up in air at this point to what is corresponding measures would be and what North Korea would consider enough before they give this exact steps towards denuclearization.

Washington in the past had said that they were going to give any concessions before denuclearization but that does appear to be softening.

LU STOUT: And meanwhile, the relationship between North Korea and South Korea that continues to thaw with -- the very intentional event that the recent clearing of land mines from the DMZ. How significant is that?

HANCOCKS: Certainly this military pact, that was agreed Kristie, was fairly far-reaching that would detail in the path. They were at time frames in that path, which we did not have when it came to denuclearization and as you say this week we just had images coming in. We have been seeing landmines being started to be cleared within the DMZ. The demilitarize zone between North and South Korea. They have said that though that will be a difficult task, there is no blueprint for where the landlines -- says landmines are many of them are planted just after the Korean War.

[03:35:02] So certainly it is going to be a massive task to try and clear that area, but it's the fact that they are moving forward despite the U.S.-North Korea relationship and recently it was the really the stalemate, the inter-Korean relationship that is destine to be pushing forward. Kristie.

LU STOUT: Paula Hancocks, live from Seoul, thank you so much.

Now the U.S. investors to NATO is trying to clean up a diplomatic mess right now after she warned that the U.S. could take out Russian missiles it believes are in violation of a nuclear treaty. Kate Bailey Hutchison later claimed that she was, not threatening a preemptive strike against Russia. CNN's Jim Bittermann is following that and other news from the NATO conference in Brussels. He joins us live from Paris and Jim, you know she is trying dial back from what she said earlier, but there is mounting concern about Russian missile activity. So how is that going to addressed at this NATO summit?

JIM BITTERMANN, SENIOR EUROPEAN CORRESPONDENT, CNN: Well when the Secretary of Defense, James Mattis left here yesterday. He basically said he is going up to NATO to assess and seek the advice of the other NATO defense ministers who are meeting today and tomorrow about what should be done about the U.S. says, a repeated violations of the media mine missile treaty, negotiated back in 1987.

Basically, the Russians according to United States developing missile system, a medium range missile system which could without warning attack with nuclear weapons, many targets would had been Europe, so Mattis has been to seek the advice and take back to Washington, about what the U.S. should do about this.

Obviously it poses a bigger threat and that is what Ambassador (inaudible) was talking about as you mentioned the State Department has tried to walk this back, basically saying that she was talking about the overall defense and return that Pastor of the United States, but the language he use, take out the missile systems, it was a little bit stronger than that so it will be interesting to see how they play this, how they spread the circle, but obviously a lot of concern about the Russian violations, of the medium range missile treaty, which has been in place now in 1987. Kristie.

LU STOUT: The leaders' summit will focus as usual on a variety of threats, what about another threat associate from Russia, the threat of cyber-attacks and disinformation campaigns.

BITTERMANN: Well, this is that we just heard that the United States according to some reports will be offering the NATO allies the idea that the U.S. will come to their aid to attack with cyber capability, the Americans formidable cyber capabilities on behalf of (inaudible) or any other kind of Russian interference, either from an electoral standpoint or any kind of cyber interference that the Russian should post, so it should be something that -- apparently the U.S. will offer later today at the summit when defense minister may basically tell them that in fact U.S. is at their side. One of the things that Mattis made clear yesterday when he was here is that the U.S. is very (inaudible) for support of NATO allies and he is going to emphasizing and try to reassure and shaken a bit by the trump administration past year and Europe and other things.

Basically saying when some said back then in 2016 NATO was obsolete, that is a something that cost a great deal of story here. And as reverberated ever since, Kristie.

LU STOUT: Jim Bittermann, they are watching from Paris, thank you Jim. That new reporting contradicts President Trump who has denied (inaudible) for silence this former porn star, he says she had sex with him. And we are learning when the president son was involve in trying to keep her quiet.

And on the first major solo trip as U.S, first lady Melania Trump heads to Africa. A (inaudible) has been as be little in the past.

[03:40:00] (COMMERCIAL BREAK)

LU STOUT: Now a new revelation against the President Trump lied when he denied knowing about a hush money payment of $130,000 made to a former porn star Stormy Daniels. A source tells CNN that President Trump personally directed his then attorney Michael Cohen to keep Stormy Daniels quite about the affair she said she had with him. Sara Sidner, has more.

(BEGIN VIDEO)

SARA SIDNER, CNN CORRESPONDENT: After all the denials from the president, the White House and the president's attorneys over the past nine months or so. A source telling CNN, the president was actually involved in trying to silence porn star Stormy Daniels as was another member of the Trump family.

UNIDENTIFIED MALE: And he is winning it,

SIDNER: A source telling CNN the president himself and his son Eric Trump was directly involved in efforts to stop porn star Stormy Daniels from telling her story about the sexual tryst she said she had with Donald Trump in 2006.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, BREAKING NEWS SHOW HOST: Did you want to have sex with him?

STORMY DANIELS, PORNSTAR: No. But I didn't. I didn't I'm not a victim. I'm not --

COOPER: It was entirely consensual?

STORMY DANIELS: Oh, yes.

(END VIDEO CLIP)

SIDNER: In February, the month before Daniels agreed to this interview with 60 Minutes. A source with direct knowledge tell CNN that President Trump personally directed his then lawyer Michael Cohen in a phone call to stop Daniels from publicly speaking about an alleged affair with him by seeking a restraining order. The sources Trump directed Cohen to coordinate the effort involving his son Eric and an outside lawyer Joe Martin to keep Daniels quiet. Trump has continually denied any affair with Daniels. The Wall Street Journal first reported the details of these efforts.

(BEGIN VIDEO CLIP)

MICHAEL AVENATTI, STORMY DANIEL'S ATTORNEY: I mean this is consistent with what we've been saying all along that Donald Trump knew about this payment, knew about the agreement and conspired with Michael Cohen and others to cover it up.

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SIDNER: The Trump organization Attorney Joe Martin eventually filed a restraining order against Daniel's who's legal name is Stephanie Clifford, her attorney Michael Avenatti says, the restraining order was prompted with Daniels fired her first attorney, Keith Davidson and her legal files had to be transferred.

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AVENATTI: The file was being transferred to make a service legal counsel for Stormy Daniels and that we were contemplating or preparing, I should say a lawsuit that was going to blow this wide- open.

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President Trump has so far denied there ever was a sexual encounter between him and Stormy Daniels. He has also said he knew nothing of the $130,000 hush money payment paid by Cohen.

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UNIDENTIFIED FEMALE: Did you know about the $130,000 payments to Stormy Daniels.

TRUMP: No. What else?

UNIDENTIFIED FEMALE: (inaudible)

TRUMP: You have to ask Michael Cohen. Michael is my attorney and you have to ask Michael Cohen.

(END VIDEO CLIP)

SIDNER: In August, Michael Cohen pled guilty to eight criminal charges including two stemming from the payments to Daniels and Karen McDougal another woman who alleged affair with Trump.

But there was a point when Cohen did want Daniels to go on television. In January after Daniels' story was published by in touch magazine, text messages filed as evidence in a lawsuit by Daniels against Cohen and Davidson. Joe Cohen texting Davidson pushing for Daniels to go on Fox News and deny everything.

I have heard scheduled for Hannity tonight, Cohen texted Davidson. She cannot today she is flying to L.A. Attorney Davidson replied. [03:45:03] It's really important why, Cohen text back after several

more attempts to get Daniel to deny her story on TV. Cohen responded let's forget tonight the Fox News and the Trump administration would rather tomorrow, so they can promote the heck out of it.

Of course Stormy Daniels was not silent for a long, she did several interviews both on daytime TV and with 60 Minutes, but she also after sewing Donald Trump wrote a book and that book, by the way is in bookstores just this week. Sara Sidner, CNN, Los Angeles.

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LU STOUT: Melania Trump is in Africa for her first major solo trip as U.S. first lady she is promoting her best campaign about being of children and will focus on healthcare and education during her stopped in Ghana, Malawi, Kenya and Egypt. David McKenzie is following her trip from Johannesburg. He joins us now live and David, how do people across Africa feel about her visit?

DAVID MCKENZIE, CNN CORRESPONDENT: Well, certainly as Melania Trump is famous, she is private First Lady you have unnecessarily seen the big rollouts of the strip like you saw from previously first ladies that had travel through the African continent, but there was a warm reception for Trump in Ghana, in Accra to visited a state-of-the-art medical facility which she gave out the best teddy bears. This is an extension of her signature move of the U.S. She kind of protect the rights of children and also as she is expanding that to look a lot that's a mother's health.

It is also joined trip with USAID. The main development agency of the U.S. government that has a lot of programs and has given a great deal of money across the African continent. Those trip is being tightly managed. She has a program today, gone on those details can't be released until she's physically at her first off, because of security concerns as she would then move on to the other stops as you mentioned, including Malawi, Kenya and Egypt. This is tentative step on to the world stage by the first lady.

It will be interesting to see when she makes her first public comments on the trip to the assembled press thus far it has been mostly of photo-op and not really big on substance in terms of her talking about what she feels her trip represents on the African continent. Kristie.

LU STOUT: Yes, It will be really interesting moment just to hear directly from Melania Trump why she's is there, because as you point out, you know, she is militantly low-profile compared to her husband. She has asserted her independence in various ways, but while she's traveling to Africa. Is she also bringing her husband's baggage with her, namely those ugly remarks Donald Trump has made on Africa?

MCKENZIE: Well, certainly those will be in the back of the minds of some leaders in Africa that have seen Donald Trump, not really deal much with the constant, but when it does often is somewhat derogatory or factually incorrect terms. She will be dealing with that baggage, it is natural even if she's on her own on this trip as it cannot separate herself from her husband's policies. One of the key policies that will be in the back of the mind of

people, particularly mothers and their charity groups she might be visiting is the Mexico City policy, which Donald Trump reinstated very early on in his administration, now that denies funding for groups that have anything to do with promoting or giving information on abortion and just speaking of the last few days who -- charity workers in different parts of the continent, they say, that had a big impact on the work they are doing.

So there is that disconnect. Whether she could get beyond that and put forward her message on that trip. You know certainly she will be trying to do that as well as USAID to focus on the positives of U.S. involvement, and kind of ignore perhaps her husband's policies towards the continent.

LU STOUT: Yes, or even lack thereof. David McKenzie we will leave it at that. Thank you very much indeed for your reporting.

Now in Rome, a major meeting of Catholic Bishops from around the world will soon get underway. The Senate is expected to focus on the world of women and young people in the church and his positions on gender and sexuality and, of course, this all comes at the cloud of the worldwide sex abuse scandal hanging over the church. Our CNN's Delia Gallagher is live for us from Rome. And Delia, what is notable about this meeting is that we know that two bishops from China are at the Vatican this week. You know, this is a breakthrough moment for Vatican Beijing isn't it?

DELIA GALLAGHER, CNN VATICAN CORRESPONDENT: Well, absolutely, Kristie. This comes on the heels of course of last weekend's agreement between the Vatican and the government in Beijing to try to unite those two churches, the official Chinese Catholic Church and the unofficial or underground Catholic Church. The Vatican hoping that this agreement will help to unite those two churches and one result of that is that two Chinese bishops for the first time will be at this month-long meeting at the Vatican which is called the Senate, which is here to discuss the topic of young people.

[03:20:12] Now, as you say this is all happening as the Vatican is under increasing pressure for the sex abuse crisis and there's a new poll out today from Pugh, which suggests that at confidence in the way Pope Francis has handled the sex abuse crisis has significantly declined amongst American Catholics.

So, there is a lot of pressure in terms of that discussion, but that is not on the official agenda. You can be sure with 250 bishops from around the world including 50 Cardinals can be at the Vatican for a month that will be a topic of discussion. It is not the official topic. The official topic is young people in some of their concerns. Kristie, and I what's on the agenda, for example, our LGBT youth. The question of gay relationships, question of contraception and so on. There's a wide range of things to be discussed within a month.

There are 34 young people from different countries around the world coming to discuss these things with the Catholic leadership and as I say we see what happens throughout these discussions, and then at the end of it. They submit their suggestions to the Pope and it's up to the Pope then to decide if he's going to make any changes, Kristie.

LU STOUT: All right, Delia Gallagher reporting live from Rome. Thank you. Now the next generation of virtual reality has a reveal, it is called magic leap, and mixes reality with the holographic world. We got a sneak peek at this new technology coming up on CNN.

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LU STOUT: Welcome back. Now it took eight years to develop and now a technology company called magic leap, have heard of it, is taking a feature where you can interact with kind of a holographic world in your living room. The company raise millions of dollars and investors like Google and parent company AT&T to create this new virtual reality. CNN's Samuel Burke has more.

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SAMUEL BURKE, CNN INTERNATIONAL CORRESPONDENT: Inside the world's oldest working film studio, a new generation of digital characters like these guy are coming to life.

UNIDENTIFIED MALE: I like to right now, I mean, you are looking great, I have to say.

BURKE: Who is this guy?

UNIDENTIFIED MALE: This is a character Gushnak. He is a bit of a digital of no hope basically. He was a piece of concept artwork that never made the grades.

BURKE: Actor, (inaudible) is a motion captured superstar known for his role in Lord of the rings and planet of the Apes. Now he and his team are creating custom creature for a new medium, mixed reality.

UNIDENTIFIED MALE: It is really the beginning of a whole new realm of storytelling.

BURKE: First came virtual reality immersing you in a digital environment, then augmented reality like Pokemon go, projecting digital objects onto the real world. In mixed reality digital construct like Gushnak anchor themselves in the real world.

UNIDENTIFIED MALE: OK, so now there is that character right there on the table, he's feet are right there on the table.

BURKE: America started magically developing headsets that will allow you to see the world in this mixed reality.

UNIDENTIFIED MALE: This character is aware of the world and can interact with the world. It is also more importantly aware of you, where you are looking and human track with you.

[03:55:03] BURKE: So, right now the goggles are processing the -- I'm stepping back that is all being calculated, that is what happening here?

UNIDENTIFIED MALE: Absolutely.

BURKE: The little cameras inside it - it is reading your eyes.

Magically backed by billions of investors like Google, J.P. Morgan and CNN parent company AT&T envisions the future where instead of looking down at your phone, your mixed reality glasses and one day a contact lens will project tools like Google maps on the road in front of you. How far away are we from that?

UNIDENTIFIED MALE: From that version of are doing that is on our road map, I mean, honestly --

BURKE: 10 years? 20 years?

UNIDENTIFIED MALE: No, I think step change of two, three, five, 10 years.

BURKE: For now, virtual augmented and mixed reality headset are still bulky and pricey. Magically it cost more than $2000 and it took eight years to develop.

UNIDENTIFIED MALE: It is a big task, you know it is going to get better.

BURKE: Giving (inaudible) plenty of time to let his imagination run wild.

UNIDENTIFIED MALE: Put some energy into it. You are panicking. You can say things.

BURKE: Samuel Burke, CNN, London.

(END VIDEO)

LU STOUT: that was very cool. Now a 96 year-old American has become the oldest person to ever win a Nobel Prize. Arthur Ashkin, who is still doing research was cited for developing optical tweezers to help laboratories examine viruses, bacteria and cells. He shows a price and physics offenses Gerard Marone and Candace Donna Strickland, the first woman to win the Nobel Prize in 55 years. Strickland says she wasn't expecting it.

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UNIDENTIFIED FEMALE: No. Obviously a very few people win the Nobel Obviously I am thrilled (inaudible) certainly it never entered my mind that I would.

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LU STOUT: That was Strickland, pioneered laser pulse technology used in corrective eye surgery. And thank you for joining us. I'm Kristie Lu Stout, the news continues with Anna Coren. You are watching CNN.

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