Return to Transcripts main page

New Day

House Democrats Prepare to Request Release of President Trump's Tax Returns; Top Three Democrats in Virginia State Government Facing Scandals; Democrats Prepare for Fight on Trump's Tax Returns; Interview with Democratic Senate Whip Dick Durbin of Illinois. Aired 8-8:30a ET

Aired February 07, 2019 - 08:00   ET

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


[08:00:00] JOHN BERMAN, CNN ANCHOR: Jeffrey, Adam Schiff isn't just crossing the red line. As they would say in Britain, he's trotting on it. He really is.

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: He is. And what's so different now is that when the president introduced the phrase it was about the Mueller investigation which he ultimately has the authority to stop. He can fire Mueller. He can't do anything about Adam Schiff, absolutely nothing. Adam Schiff is a representative of a coordinate branch of government who is answerable to the voters in Los Angeles and to Nancy Pelosi and the leadership of the House Democrats. And if anything, they want him to be more confrontational, not less. So the president's leverage is so completely transformed from where it was when he first made that red line remark, and the world is just different.

POPPY HARLOW, CNN ANCHOR: Susan, let me ask you this -- and also a nod to your great piece in "The New Yorker," "Welcome to Trump's 2020 Campaign." But on this, I wonder if you believe there is a political risk here for Democrats in terms of overreaching. Yes, they can do everything Jeffrey laid out and the president can't do a thing about it. But there's an interesting ABC/"Washington Post" poll from just a week ago that did say 46 percent of Democrats are concerned that they will go as a party too far, Democratic lawmakers, in investigating the president. Is there a risk here in overreach?

SUSAN GLASSER, CNN GLOBAL AFFAIRS ANALYST: I think it's so crucial that people believe that there is a form of process fairness in order for any outcome to have credibility. And the real problem right now, of course, is that you are talking about one party leading and driving the investigation. Inherently does that make that a partisan conclusion? Whatever facts they do turn up, are they going to be facts that people agree are facts or not? Already I was on last night on CNN with a Republican who already was dismissing every single investigation that wasn't the Mueller investigation as the product of partisan prosecutors or partisan members of Congress. And to me, that's the real danger inherent in this. If they, for example, go into the president's tax returns and they find something missing that he's been trying to cover up by not releasing them, is that a partisan act or is that information that the American public needed to know? So I think there is a risk factor. BERMAN: There is a tradition, certainly a rich tradition in

presidential candidates releasing their tax returns before the election as opposed to this case, it would being release before his reelection bid. But Toluse, there is a reason the president set this up as a red line in theory. There is a reason why he didn't want Robert Mueller looking at his money. We just don't know what that reason is.

TOLUSE OLORUNNIPA, WHITE HOUSE CORRESPONDENT, "THE WASHINGTON POST": We may find out soon as the Democrats really go full steam ahead with very significant investigations, calling for the president to release or basically allow the president's tax returns to go to Congress and become potentially for public consumption. They have several investigations into his business practices, into his debt and loans that he may have taken out with various banks.

And the big question is, with so many people around the president who have been charged or who have pled guilty to a number of different crimes, some of them financial in nature, why are there so many people around the president who are subject to criminal investigation, and in many cases lied to investigators, sometimes have lied to investigators about their financial transactions, sometimes have lied to investigators about their relations with Russian officials. And it is not clear why so many people around the president were lying and whether or not there is a line that goes back to the president and has to do with his business dealings.

And I think that's a question that Democrats in Congress are looking to find out. And it's part of their Constitutional oversight responsibilities to find out if there is any reason that the president might be compromised. And I think that they are going full steam ahead with trying to figure out the information, and also letting the public know. It just happens to be something that would benefit them politically. And I think they do want to keep it in the headlines and potentially have this be something that makes it difficult for the president to run for reelection in 2020. But I think the oversight responsibility is paramount, and it is important they know whether or not there is something that's keeping the president compromised.

HARLOW: Jeffrey, help people understand why business dealings that the president may or may not have had before he was president, before he even ran, could be so critical here.

TOOBIN: "Buzzfeed" did a fabulous chart earlier this week about comparing the negotiations for Trump Tower Moscow and the documents that Michael Cohen and others negotiated at the same time with the president's statements about Vladimir Putin, his very solicitous statements about Putin during the campaign.

So the question is, was the president talking about relations with Russia with the interests of the United States at heart, or was he trying to cultivate Vladimir Putin to get a business deal in Moscow?

[08:05:10] What was the president's motivations? Is he doing the people's business, or is he doing his own personal business? That, I think, is a very profound question. It is legitimate for the Congress to investigate that. And it just shows why this stuff matters. It's not just political points-scoring. It's about whether the president of the United States is negotiating with the interests of the country at heart, which is what he's supposed to be doing.

HARLOW: And not just Russia, right. Saudi Arabia, a big question mark.

TOOBIN: OK. That's right. That's just a start, yes.

BERMAN: Susan, Poppy mentioned your great piece in "The New Yorker." You looked at the State of the Union address not necessarily as a speech that was about where the country is going but about where the campaign is going, 2020. And I agree with you. I think it was a great piece, not just because I happened to agree with it, but largely. I think it was a curtain-raiser on 2020. And it did include a very important section on how he will approach these investigations going forward.

GLASSER: Well, that's right. Thank you. I'm glad you agree with the column. I'll try to always write pieces you agree with.

BERMAN: Good idea.

(LAUGHTER)

GLASSER: I did see it as the opening in many ways of the 2020 campaign. And first, we know Trump made illegal immigration bashing the centerpiece of his rhetoric ever since he launched his 2016 campaign. What we see now is twinning that with attacks on Democrats as socialists, essentially portraying America if it returns to Democratic rule as some sort of a Venezuelan socialist hellscape.

But I think you're right that we may well look back on one line in particular of Trump's speech in which he seemed to make this weird linkage between the boom economy that he says he has generated and that Democrats can bring it to an end with what he called their ridiculous partisan investigations. He's followed that up this morning, as you pointed out, basically winging about what he's calls presidential harassment. To me the president just looks at his weakest when he is complaining about these investigations, publicly lamenting the fact that Democrats are so mean and nasty to him and beating up on the most powerful man in the world.

It suggests, again, that President Trump knows that there's something to find out there. And he has continued to act in the most destructive way really towards these investigations. It's really something that we are going to look back on. We don't know the ending of the story yet. Remember, this week everyone is playing the Richard Nixon State of the Union clip from 1974 when he says, one year of Watergate is too much. And of course, nine months later he was gone. That may not be the outcome in this case, but it is frustrating to be in the middle of the story, we don't know the ending yet.

TOOBIN: Susan Glasser with the verb of the morning, winging. The president was winging this morning, I love that.

BERMAN: In 280 characters or less.

TOOBIN: Exactly, yes, repeatedly.

HARLOW: Toluse, changing gears to another headlines shocking story this morning, and that is what is happening in Virginia? John.

BERMAN: I have the headline here at the bottom of all my papers here. This is "The New York Post" headline here, "Virginia is for Losers."

HARLOW: It's "The Post," and that's quite a headline, and we chuckle, but what's happening there is very serious. You have got, is the governor going to resign, Northam, because of wearing blackface, et cetera. The attorney general, another Democrat coming forward admitting he wore blackface at a party in 1980. The lieutenant governor, Justin Fairfax, another Democrat, denying sexual assault allegations, on the record allegations from Dr. Tyson, a 42-year-old professor. And then the fourth in line if they all did resign is a Republican. Where does this go?

OLORUNNIPA: This obviously has local implications for the Virginia Democrats. The party is right now in a state of turmoil trying to figure out how to get out of this political morass that they find themselves in with the top three leaders really struggling with scandals that could all be career ending scandals. But it also has national implications for Democrats nationally. They have tried to draw a comparison between how the Republicans handle racial incidents and accusations of sexual misconduct involving whether it's the president or his Supreme Court justice nominee Brett Kavanaugh, and how Democrats handle them. And now they're going to be asked those very similar questions of what are you going to do when there is a credible, on the record, allegation of sexual assault against a Democratic high ranking official? Are you going to be silent and run from reporters or are you going to take the same stand that you did in the Kavanaugh hearings?

Similarly with these racial incidents, a number of Democrats that called out the president, have called out the Republican Party for being racially insensitive, now you have these various Democrats who have come out publicly and talked about what they have done in their past. Whether or not Democrats have to call for their resignation as well is a big question.

[08:10:05] And I think they are trying to draw a contrast between how the Republicans handle this, and they're finding that it's difficult to keep up the zero tolerance policy when it could take out the top three Democrats in Virginia.

BERMAN: They set the bar. It was interesting, Jeffrey, and I know you watch every interview that we do here on NEW DAY.

TOOBIN: Every one.

BERMAN: We had congresswoman Jackie Speier on the last hour, and I had a chance to ask her about Justin Fairfax, the lieutenant governor in Virginia. And she was outraged, frankly, at the accusations made against him. And she said she has no reason not to believe them. She praised Professor Tyson for coming forward. And I think as more comes out and as the professor comes forward publicly with her story very publicly, I wouldn't be surprised to see more Democrats, particularly women members of Congress who were so vocal about Professor Ford are I think going to come to side of the professor making these accusations.

TOOBIN: But here's where the -- it's not a detail. It's one thing to be supportive of the professor, to be supportive of the accuser. But do they really want Lieutenant Governor Fairfax to leave office? Do they really want to take the step that will possibly turn the governor's mansion over to a Republican? That's the real hard question.

I think every Democrat and even Virginian Democrats have said we respect the alleged victim who has come forward. We don't want to treat them poorly. But the real question is do they want Fairfax to leave office. And I don't know what they're going to say about that.

HARLOW: And it's different with Franken because you knew there would be a Democrat in the seat.

TOOBIN: Exactly.

BERMAN: I think if they can figure out a way, if they see the succession and they think it's safe, I think you will see a lot more strong statements.

TOOBIN: Absolutely.

HARLOW: Really interesting.

BERMAN: Friends, thank you all very, very many.

House Democrats are preparing to fight to get President Trump's tax returns. Could the administration block this move? And most importantly, what's in them? We're going to speak to one of the few people who has actually had access and insight to some of the president's tax returns, next.

(COMMERCIAL BREAK)

[08:15:42] JOHN BERMAN, CNN ANCHOR: In just hours from now, House Democrats try to get the president's tax returns. Today's hearing in the House Ways and Means Committee could lay the groundwork for a formal request to the Treasury Department for the president's taxes.

Joining me now is David Cay Johnston, investigative reporter and author of "It's Even Worse Than You Think".

David, always a pleasure to have you with us now.

And I always want to remind the viewers, you have seen some of the president's taxes. You are one of the few people who I think has gone through them in intricate detail here.

If people do see them, what will they find? DAVID CAY JOHNSTON, INVESTIGATIVE REPORTER: Well, Donald has a long

history of cheating workers, vendor, governments that he owed money to. And we now know because of "New York Times" project and my own reporting before that, that he's also cheated the federal government in the past.

Now, those cheating incidents are beyond the statute of limitation limitations. They most likely cannot be prosecuted anymore. But his tax returns with a full audit will undoubtedly show that he's misrepresented himself on his Form 1040 and cheated our government.

BERMAN: Cheated our government. That's one thing, an accounting thing. I'm not diminishing that. You are making that claim there.

But what about foreign influence? Because that's what the House Intelligence Chair Adam Schiff is implying that they want to look into, to see if there is foreign financial influence on Donald Trump.

JOHNSTON: That's right. Ways and Means is interested in tax cheating, and they're going to hold their own hearings. The Intelligence Committee's investigation will look at moneys that flowed to Donald over the years from Russians, Saudi Arabians, to the people around him.

And let's remember that Jared Kushner tried to use his position to leverage an $800,000 or so loan out of the Qataris. And that's the focus they're going to take and we know that there have been numerous transactions in various ways in the public record that simply weren't the normal way of doing business. They resulted in Donald getting a lot of money where it doesn't seem he should have gotten any. And some of them show clear signs of being money laundering on behalf of foreign interests.

So, that would certainly give you leverage over the president if you knew he had laundered money for you.

BERMAN: Do you think it would be readily evident and apparent by looking at the tax returns?

JOHNSTON: Well, tax returns are the beginning point for asking questions. You know, anyone who's been audited knows they say how did this number show up on this line of your tax return? Under a 1924 law that's used all the time by Congress, the joint committee and some other members of Congress have the right to all tax return information. And tax return information is what went into preparing your tax return.

BERMAN: Let me read actually this IRS code. It's IRS Code 6103. Again, this is law.

This is what the Ways and Means Committee is looking into today, with their first hearing on this. Upon written request from the chairman of the committee on Ways and Means, and the House of Representatives, the chairman of the Committee on Finance in the Senate or the chairman of the Joint Committee on Taxation, the secretary, that's the secretary of treasury, shall furnish such committee with any return or return information specified in such a request.

I don't think there is ambiguity in the law there. Ways and Means Committee can ask for and get the return.

I guess how can the White House and the president fight this?

JOHNSTON: Well, presumably the treasury secretary could go to court and argue it is inappropriate and hopefully they would lose. But what Richard Neal, the chairman of Ways and Means is doing -- he's very smart. He's having in three experts to explain to the public that this process has been around now for almost 100 years.

It's been used repeatedly. It is to prevent corruption in the tax collection system and to make sure that the tax system operates the way Congress intended. And after all, it's Congress that taxes us.

BERMAN: You know, again, I look at the law there. I'm not a lawyer but the code seems clear that they can get it.

What isn't clear to me and I suppose the White House and president could fight this, is any effort to make it public in any way.

[08:20:01] And they could perhaps have some argument there.

JOHNSON: Well, I don't think so. Once members of Congress have these returns doing their oversight as the Article 1 section of our government, under our Constitution, they have a right to put things out there. What they have to be careful not to do is do it gratuitously.

If there is something in there that is, you know, embarrassing or venal in a way that's dramatic way, that's not going to cut it. They have to stick to serious issues that go to our national security and to the president's integrity or lack of.

BERMAN: Do you believe sitting where you are and knowing what you know the reason he's fought the release of this for so long or refused to release it is because as some have speculated over time, maybe there were years he didn't make as much money as he claimed to make publicly, or something else?

JOHNSTON: Well, we know that in several recent years, Donald's income on the front page of his tax return was less than $500,000 because he got a peculiar tax benefit that New York homeowners like me get, if you make less than $500,000. And he's come up with a cockamamie explanation for it.

What's more likely to show up is improper deductions. Donald was tried twice for income tax fraud, these were civil trials, but he lost both of them. One of the judges wrote a scathing critique of him which is in my book "The Making of Donald Trump".

BERMAN: David Cay Johnston, thank you for joining us today. Today, the first step from House Democrats to get ahold of those returns. It could be a significant step. I appreciate your time.

JOHNSTON: Thank you.

POPPY HARLOW, CNN ANCHOR: That was fascinating, fascinating.

High emotions on Capitol Hill. A Republican congressman tried to get two parents with children who were murdered removed from a gun violence hearing yesterday. One of those fathers will join us ahead.

(COMMERCIAL BREAK)

[08:25:54] BERMAN: In about an hour, the Senate Judiciary Committee will vote on William Barr's nomination to be the next attorney general.

Joining us now is Democratic whip, Senator Dick Durbin. He's a member of the Judiciary Committee and also a member of the Bipartisan Conference Committee trying to figure out a way to prevent a shutdown. Somebody called you Senator Selig. You're in the middle of everything going on over the next few days.

Let me just ask you, in regards to William Barr, have you decided -- will you be a yes or a no vote in committee in an hour?

SEN. DICK DURBIN (D), ILLINOIS: I will be voting against Mr. William Barr. But let me tell you, I do have respect for him. I met with him yesterday for the first time and had a lengthy conversation.

My reasons are -- two reasons why I'm going to withhold my vote in his favor. The reasons are these.

First, I believe the Mueller inquiry, the investigation, should be made available to the public and transparent. We should know at the end of the day whether findings exonerate the president or reach a different conclusion. I think the American people are entitled to that. Mr. Barr has not made that commitment.

Secondly, I'm worried about a memo he volunteered and sent to the Trump legal staff, a 19-page memo which seemed to say the president is above the law more often than not. I don't agree with that conclusion, and I worry about that voluntary memo.

BERMAN: The memo goes into great detail about why firing James Comey would not be obstruction specifically. That's the memo you are talking about?

DURBIN: It is. I discussed it with him specifically. It isn't a question of what was in the president's mind when he dismissed the head of the FBI which is his right to do. What is obvious though is he admitted to Lester Holt of NBC days afterward his real motive was to stop the investigation, stop this inquiry related to Russia and his election campaign.

That to me that was a betrayal of this basic premise that this was simply an executive decision.

BERMAN: I just want to make clear that William Barr did make clear subsequently that he does believe there are ways that a president could obstruct justice. Suborning personal would be one of them. Just that when he wrote that memo, he was suggesting that the actions he was talking about did not constitute obstruction.

DURBIN: This was a memo he volunteered, a 19-page memo to the Trump legal team which approached him about representing the president in the inquiry. And now, he wants to be the chief law enforcement, the attorney general for the United States of America.

It raises serious questions about his relationship to this inquiry and to the president.

BERMAN: You want to make the Mueller report public. I have talked to Democrats and Republicans who would like to see it made public.

Does that include the declinations, which, of course, that technical word which means why Robert Mueller and his team decided not to prosecute certain people because what many will argue or some at least will argue, is that if they are not going to prosecute, why make public all the different information that went into the decision? That's what James Comey got into hot water for when he didn't make any prosecutions or launch prosecutions against Hillary Clinton.

DURBIN: And, of course, it was done within days of an election when it came to Comey's situation, which to me that was an issue that should not be ignored.

Here's what it comes down to, when you appoint special counsel over an issue of public trust, it goes to the highest levels of government in the United States of America. I believe at this point that the American people have a right to know what evidence, what findings were behind this decision so we can, as a nation, put at rest any suspicions we have one way or the other.

Let's hear all of it -- good and bad. In the end, let the American people be the arbiters.

BERMAN: All right. Senator Durbin, you are in the room when it comes to the conference discussion about trying to fend off another government shutdown to reach some kind of agreement on border security. Can you give me an update on where you are exactly this morning?

DURBIN: Yes, I can. I can tell you first that's interesting, I sat through the State of the Union Address the other night by President Trump and never once heard the word "shutdown." Remember the shutdown he was so proud of that went on for 35 days at the expense of innocent federal employees like air traffic controllers and TSA? He didn't bring it up again because the Republicans turned on him and said enough is enough.

The good news is our conference committee, appropriators who do it for a living, I might add, sat down to start the bargaining. I think the bargaining is under way. We understand the parameters of what we have to decide.

END