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THE LEAD WITH JAKE TAPPER
Trump Lawyers to Answer Mueller Questions; Hurricane Devastation; Kanye West Visits Oval Office; Six Dead After Hurricane Michael Lashes Southeast; Interview with Senator Bill Nelson of Florida; Saudi Arabia Denies Any Role in Journalist's Disappearance. Aired 4-4:30p ET
Aired October 11, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is CNN breaking news.
JAKE TAPPER, CNN ANCHOR: Welcome to THE LEAD. I'm Jake Tapper.
You hear the bell there. We're beginning with breaking news in the money lead, the Dow closing down more than 500 points today, a second day in a row of triple-digit losses, wiping out most of the gains the Dow has made this year.
CNN's Alison Kosik is live at the New York Stock Exchange for us.
Alison, what's behind these massive losses?
ALISON KOSIK, CNN CORRESPONDENT: First of all, look at that number, the Dow down 541 points. You know what, Jake. In the last hour of trading, the swings were so wild.
We saw the Dow would fall 400 points, then 500 points, then 700 points. Even hardy stock traders I saw on the floor, they couldn't believe the volatile swings that the Dow made.
Now, there's no one reason for the two-day sell-off, but higher interest rates, there's a real trigger here. Pressure has been building for a while, so as the economy has grown stronger and stronger, the Federal Reserve has begun raising short-term interest rates to try to keep the economy from overheating and to try to keep inflation in check.
So for stocks, there's concern those rising rates will eat into profits. They will make borrowing more expensive and potentially slow down the economy. A glaring example for you already happening, mortgage rates, they're at levels we haven't seen in seven years.
Now, President Trump blames the Fed for the sell-off, saying the Fed has gone loco. Some traders say, look, those tax cuts that President Trump pushed through, they actually juiced corporate earnings and drove up stock prices. It was like pouring gasoline on the economy.
Well, guess what? Now it's time for the Fed to cool down this red-hot economy by raising interest rates -- Jake.
TAPPER: All right, Alison, stick around.
I want to bring in Rana Foroohar. She's a global business columnist and associate editor for "The Financial Times."
So, as you heard Alison there, President Trump blames the Federal Reserve for this, essentially saying it's their fault for raising interest rates. Is he right?
RANA FOROOHAR, CNN ANALYST: Well, you know, when interest rates go up, it makes debt more expensive. There's actually more debt out there now, about $60 trillion more than there was before the financial cries.
Sure, markets don't like that, but there's something else in play here and that we're in a U.S./China trade war, and that's really a tech war. And if you look at which stocks are down the most, it's been the big tech stocks. Investors are worried that the tariffs that the U.S. has slapped on China are going to ricochet back and really hurt those stocks.
The Chinese have their own big tech giants. There's a feeling in the markets and amongst economists that this tech trade war is going to last a long time and we are going to see the stocks really hurt.
Alison, for people sitting at home who are worried about their investments, worried about their 401(k)s, what's the main thing they need to know?
KOSIK: The main thing that they can think about, if they are just those retail investors, not those professional investors, I would say the best advice is to sit on the sidelines.
There's a lot of volatility here. Even the traders who use their computers to trade, they can't keep up with the volatility that's here, so if you're invested in the market, the real good advice here is just to sit on the sidelines, wait for this to pass and all indications are the volatility that we saw today is not expected to last -- Jake.
TAPPER: And, Rana, the U.S. and China, they have been going back and forth like this for weeks, if not months. Today, President Trump's top economic adviser says they are making progress in setting up a meeting between President Trump and President Xi of China.
Is that helping to erase any of these market worries?
FOROOHAR: Well, it's interesting. I think you may see a head fake between now and the midterms in November where, you know, President Trump comes in, maybe cuts some kind of deal with the Chinese. Maybe they appreciate their currency a little bit. Maybe we see some easings of tension. But I don't think this is going away. I think we are going to be back here several times in the next few weeks and months talking about these things because this is an existential war. The things that the U.S. administration is asking China to do, fundamentally, they don't want to do. It's not a short-term fix.
TAPPER: And, Alison, what are we expecting from the markets tomorrow, more bad news?
KOSIK: More uncertainty.
Look, tomorrow begins third-quarter earnings season. The good news is that the expectations are high that companies will report positive earnings, so many traders that I talk to say, look, if we get the positive earnings, it may settle down the market, but there's still a lot of uncertainty and a lot, like Rana was talking about, the uncertainty with those tariffs.
That could wind up hitting companies really hard, and one thing that investors are going to be watching for as companies give out their report cards for the third quarter, they are going to be trying to see if those tariffs have been cutting into profits, if the rising costs are hurting companies, and if you see that, you could see the market take another hit -- Jake.
TAPPER: All right, Alison and Rana, thanks so much.
And we have even more breaking news now, this time in the Russia investigation. CNN is just now learning President Trump's legal team is preparing answers to written questions from special counsel Robert Mueller, according to sources familiar with the matter. This is a major development after months of negotiations between the president's legal team and special counsel Robert Mueller's investigators.
This could, signal the signal the beginning of the end of the Russia investigation. The sources said the questions for the president are focused on matters concerning the investigation into conspiracy between any Trump campaign associates and Russians seeking to interfere in the 2016 election.
Let's get right to CNN's Evan Perez and Gloria Borger, who have this breaking story.
Evan, what can you tell us about the questions that the Trump team is preparing to answer?
EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Well, Jake, this is a big moment, as you said.
These questions that they have now received from the special counsel have to do with matters before the Trump inauguration. And this is a moment obviously that's been in the making for about 10 months, almost 10 months of negotiations between the special counsel's office and the Trump legal team. And so, as you said, these are questions that are focused on the collusion, big collusion question, whether or not there was anybody inside or associated with the Trump campaign who was working or talking to or sharing information with the Russians in their attempt to influence the 2016 election.
What is not on the table in these questions, we're told, is obstruction, which is something that we know is a big part of the Mueller investigation. That is still something that the two teams are still discussing, they are still in negotiations over.
We do have a statement that we got from Jay Sekulow, one of the president's attorneys, put it up for a second here. "We're in continuing discussions with the special counsel, and we do not comment on those discussions." Again, that's Jay Sekulow, the president's attorney.
Again, this is the first round of what we expect of these questions, and we expect that there could be additional ones.
TAPPER: Is there anything additional, Gloria, that might prevent President Trump and his team from refusing to answer these questions? In other words, do they have to answer them?
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: They don't have to. But then they could be facing a subpoena. I think they would rather answer these questions.
And fact that they are allowed to answer them in writing is kind of a big moment for them, because early on it was all about the president, we need to have him testify. And as Evan says, he may still have to testify about obstruction, because the Mueller team may want to know about intent and only the president can answer what was in his mind when he fired James Comey.
But as for pre-inauguration, they are not protected by executive privilege. So they know, I think, that they have to provide answers to these questions. If you were the president's lawyers, would you rather do it or would you rather have Donald Trump sit down and do it?
TAPPER: And, Gloria, should we surmise from this that the public will pretty soon, pretty soon being a relative term, of course, pretty soon know what Robert Mueller's conclusions are? The fact that they're getting questions -- usually when there's an investigation, somebody like President Trump would be the last person that you would interview.
BORGER: Sure. Right.
I think we can surmise. I don't know what pretty soon is. Obviously, after the election.
TAPPER: After the midterms.
BORGER: After the election. And I think we can assume that Mueller's team has been writing a report all along. It's not like they are going to pull an all-nighter and do a report right after the election. I think they have been gathering their conclusions all along.
And this argument has been going on, as Evan says, for almost a year, and they had to find a way to kind of get past the impasse. There still may be another impasse when it comes to the president himself personally testifying.
TAPPER: And that's the thing also, because it's not over, the idea -- even though these are written questions for this first round, it's been a moving target whether or not President Trump is going to ultimately sit down, especially, as you say, if the obstruction charges questions are not part of the first round, so they are in a second round, and you need to get to what's in President Trump's mind.
Take a listen to President Trump this morning on "FOX & Friends" asked about whether or not he would sit with an interview for Mueller.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, it seems ridiculous that I would have to do it, when everybody says there's no collusion, but I will do what is necessary to get it over with.
(END VIDEO CLIP)
TAPPER: So it sounds like it's still possible. Even though there are written questions here, it's still possible there will be an in-person interview.
PEREZ: Right. It's still possible that I could be president. It's not going to happen. Right?
TAPPER: I would vote for you.
BORGER: I don't know. Yes.
PEREZ: Look, it's technically still possible that the president will sit down for an interview, but that's almost not going to -- certainly not going to happen.
PEREZ: The president's lawyers are all against it. They all believe that this take-home test, which is sort of like college-style version of things, where you answer questions, his lawyers are actually going through the documents that they already provided to the special counsel so they make sure the answers match up.
That's best way to answer these questions they believe that protects this president. If he sits down, they believe that that would be a very bad course. BORGER: But it's a take-home test they are answering for the
BORGER: So they are doing the work on this from documents they have already presented to the special counsel.
TAPPER: You seem skeptical that the president will ever sit down with Mueller, especially with these written questions happening. Does that mean a subpoena to force him to comply with an in-person interview is off the table?
PEREZ: I think it's not off the table, but I do think the president's lawyers believe that this puts them in the best legal position.
We have written about this 1,000 times, that they believe that this will protect the president if that comes to pass. They believe they did defend him if they can show that they have answered every question that Mueller has up to a certain point, and then they can fight it out in court if it comes to that.
They believe that doing it this way, you know, answering these questions in written form will then put them in a place where they can say, look, we have given you everything that we possibly can. Now you're crossing a line into executive privilege and interfering with the president's duties under Article 2 of the Constitution, and let's fight it out.
TAPPER: And, Gloria, the president says no collusion, everybody says there's no collusion.
But the truth of the matter is we have no idea what Robert Mueller is going to conclude. He could drop a bombshell or he could disappoint the resistance.
BORGER: Right. Right. We don't have any idea. He's a black box, and he's been working on this for, what, two years.
PEREZ: A year-and-a-half.
BORGER: A year-and-a-half.
He's done an awful lot of indictments, and he's done a lot of indictments of Russians. So we really -- you know, we honestly don't know, but we know that the last thing in the world his lawyers want is to put the president in front of team Mueller and answer questions about obstruction.
And they do believe that executive privilege is on their side when it comes to something that happened post-inauguration.
TAPPER: And they surely see this development as at least a step for them. BORGER: Exactly.
PEREZ: One last thing, Jake.
I think it is clear, based on our reporting that, you know, people are still going before the special counsel, and they are still being asked about things that would relate to collusion, so it is clear that the special counsel is very much still looking into that question.
TAPPER: All right. Great story. Congratulations on the scoop. Appreciate it.
Coming up: not your average Oval Office meeting. Kanye West comes ready to make America great again, but can the collaboration featuring celebrity and politics makes a difference?
But, first, the death toll, sadly, now going up, as we get new images of communities that have been ripped to shreds by Hurricane Michael.
Stay with us.
[16:15:12] TAPPER: In our national lead: entire neighborhoods have been turned in a debris after catastrophic Hurricane Michael leveled parts of the Florida panhandle and has now killed six people.
Homes and businesses practically erased from the map in Mexico Beach, Florida. This is the spot federal officials are calling the ground zero of Hurricane Michael's destructive past. And up the coast in Panama City, the Jinx Middle School which recently enrolled students who were displaced last year by Hurricane Maria is now reduced to twisted metal in a stack of bricks.
CNN's Erica Hill is live at Panama City Beach, Florida.
And, Erica, you've been speaking with residents who are seeing this image for the first time, what are they telling you? How horrific is this for them?
ERICA HILL, CNN CORRESPONDENT: Jake, a lot of them are speechless. This is definitely a case where the pictures truly do tell the story. They are coming home in some cases to find their neighborhoods gone. One woman who I spoke with lives just to the right of where I am right now, and she said when she tried to come home from the shelter she had to walk because there was no other way to get there. But the real damage, as you pointed out, is ground zero in Mexico Beach.
HILL (voice-over): From the air, a first look at a beach town almost completely wiped out.
SCOTT BOUTWELL, MEXICO BEACH, FLORIDA RESIDENT: Our lives are gone here. HILL: Daylight exposing the force of Hurricane Michael. This
category 4 storm made landfall near Mexico Beach, packing winds of nearly 150 miles per hour.
BOUTWELL: We had furniture in our house that wasn't even our furniture.
HILL: Getting into Mexico Beach, a challenge in itself. Roads clogged with downed power lines, trees and debris.
BOUTWELL: All the stores, all the restaurants, everything, there's nothing left here anymore, you know. All the homes on this side of the road at the beach, they're all gone.
HILL: The need extends far beyond Mexico Beach. In Panama City, neighborhoods reduced to rubble.
KATHLEEN LABARRON, PANAMA CITY BEACH RESIDENT: Oh, my God, Panama City, there's nothing there, nothing. I've never seen nothing like it.
HILL: This middle school nearly flattened. The gym's roof torn off.
BRITT SMIT, JINKS MIDDLE SCHOOL PRINCIPAL: It was heart wrenching. I know what the school means to our -- our kids and our community and to see that type of devastation on their school and realizing that that devastation in the only is there at their school and also with their homes, because kids live nearby.
HILL: In Panama City Beach, a massive boat storage facility at this marina now a twisted cage for the vessels stored inside. The damage resembling the work of a strong tornado, especially when seen from the sky.
As the reality of what's left behind sets in, many people here still trying to make sense of what happened.
BOUTWELL: Where do we start now? I mean, what do we do? There's nothing left here.
HILL: And that is the case in so many areas. The hard part here, Jake, what's happening now is simply trying to assess the damage, to get into some of those areas that were hardest hit because just getting to a place like Mexico Beach where Brooke Baldwin was able to take a helicopter is nearly impossible because of the roads, 2,500 National Guard troops activated here in Florida and 1,500 in Georgia. It's a start, but this is definitely a long, long road ahead, Jake.
TAPPER: All right. Erica Hill, thank you so much.
I want to show you more from the panhandle. This was a convenience store in Springfield, Florida. That's what you're looking at right now. The storm ripped the roof right off the building. Some shelves there have been ripped to shreds. Obviously, a dangerous scene as people are trying to rummage through what little is left and get flood and supplies.
In Mexico Beach, Florida, where Hurricane Michael made landfall, that's rescuers trying to sift through toppled homes. They're obviously looking for any survivors, anyone trapped inside.
Let's show you one more, that's a utility pole that sliced right through a waffle house in Calloway, Florida.
Joining me now is Democratic Senator Bill Nelson of Florida.
And, Senator, I just want to start with your reaction to what you're seeing on the ground. We've seen blocks and blocks of homes leveled, businesses destroyed. What are you hearing from your constituents?
SEN. BILL NELSON (D), FLORIDA: Just exactly what you've been reporting. It's devastation and as you go east of Panama City, that's where the -- the right side of the hurricane, the most ferocious winds were and Mexico Beach. I imagine when we finally get into the next town which is Port St. Joe, I think you're going to find devastation, particularly Mexico Beach, because there's no barrier island outside of it. So it was getting the full force of the wind and the water.
[16:20:01] Further east, Port St. Joe is a natural harbor with a cape around it, cape sandblast. It would have had some protection, but no doubt it's going to be like not anything we've seen since Hurricane Andrew in 1992 down south of Miami. It's going to be like that over there in those small little populated areas. They will be flattened completely.
TAPPER: And what's your number one concern right now, Senator?
NELSON: Well, that's why I'm here. I'm here to make sure that the federal government is sending all of the resources that it needs, and it's going to need a lot.
TAPPER: Governor Scott says that the top focus right now is search and rescue. Have you heard of any areas where people might be trapped, where there is not an effort being made that needs to be made?
NELSON: In the woods to the west, all along the shore here, I suspect that there are people who decided to hunker down, and we're going to find people hopefully alive back in those dwellings.
TAPPER: What's your message to residents who might say, hey, the storm is over, I'm going to get in my car and check on my home, head back into these hard-hit areas like the one you're in right now?
NELSON: As a matter of fact, a lot of people are doing that. You should have seen -- I had to come all the way on the interstate and then south, and there were cars lined up for miles wanting to get back, and that's what they are doing. They want to get back, clean up.
You can see the weather is great here. That's simply unusual for a hurricane because it's usually range and still blowing. This hurricane moved so fast it's up north Georgia, South Carolina by now.
TAPPER: President Trump has declared a major disaster area in Florida. I know you and Senator Rubio asked for this to happen. Are you getting the support you need from the federal government and the White House?
NELSON: Yes, and we will get it, and Senator Rubio is on his way to join me, and the two of us are going to be here on the ground. We'll make sure that this area gets exactly what it needs.
TAPPER: All right. Senator, if you don't get what you need, if there's more you need from Tallahassee or from Washington, D.C., and you're not getting, it let us know here at CNN, and we'll bring attention to it.
NELSON: Thanks, Jake.
TAPPER: All right. Thank you, Senator.
How did a Saudi journalist simply vanish? The Trump White House on the case, but will the answer further complicate the president's relationship with a key ally? Stay with us.
[16:26:48] TAPPER: Our world lead now: an international murder mystery pitting the U.S. against its key ally Saudi Arabia. Turkish officials suggesting that Saudi Crown Prince Mohammed bin Salman dispatched a hit squad to execute and dismember "Washington Post" Jamal Khashoggi. The prominent critic of the Saudi regime vanished nine days ago after entering the Saudi consulate in Istanbul, Turkey, to obtain a wedding document. Saudi Arabia has vehemently denied any involvement in the disappearance.
The Trump administration, of course, has close ties with the Saudi leadership, including the president's son-in-law, Jared Kushner. Sources telling CNN that Bin Salman reached out to Kushner directly to deny any involvement in the incident.
Of course, it's not just this White House. Administrations going back years if not decades have been simply unable to hold the oil-rich kingdom to account in any way. That includes the fact that 15 of the 19 September 11th hijackers were Saudis, the country's long history of funneling money to terrorist organizations. Earlier this year dropping a U.S.-made bomb on a school bus containing Yemeni children.
CNN senior national correspondent Arwa Damon joins me now live from Istanbul, Turkey.
Arwa, to date, the Saudi government has produced no evidence that Khashoggi left the consulate alive.
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: No, they haven't, and that's why there's so many questions regarding what Saudi's role actually was in all of this and what did transpire in the building, the Saudi consulate that is behind me. Now, the U.S. -- the Saudi ambassador to the U.S. is, according to the
U.S. State Department, on his way back home to the kingdom as this mystery seems to be deepening.
DAMON (voice-over): This is Jamal Khashoggi captured on closed circuit camera, stepping into what Turks authorities believe was a death trap.
The Saudi consulate in Istanbul now shrouded in mystery is the last place the royal insider turned critic was seen alive. Officials from Saudi Arabia adamantly deny foul play but Turkish official says police believe this is the scene of premeditated murder.
Beginning around 3:30 a.m., the day of Khashoggi's disappearance, Turks authority say a group of Saudi men flew into Istanbul on a private jet and checked into a hotel near the consulate. An hour and 52 minutes after Khashoggi entered the consulate that afternoon, security footage leaked to Turkish media shows a caravan of black- tinted consulate vehicles departing. Their destination, the nearby consulate residence where the largest van in the group disappears within.
Whether Khashoggi was inside one of the vehicles is unknown. A Turkish official tells the "New York Times" Saudi agents dismembered his body with a bone saw they brought for the purpose, but declined to show evidence.
Back at the consulate, Khashoggi's fiancee who had been waiting for him outside was seen pacing at the entrance and her concern rising as the hours past.
So, who ordered this alleged assassination?
An American official tells CNN the U.S. has intercepts of Saudi officials discussing a plan to lure Khashoggi back to Saudi Arabia to detain him. A confrontation at the consulate in Turkey may have been a backup plan. U.S. official says such a plot would need the approval of Saudi's crown prince, Mohammed bin Salman, or MBS -- someone warmly embraced by the Trump administration.
Earlier this week, MBS placed a direct call to President Trump's son- in-law Jared Kushner, according to a person familiar with the call.