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Lawyer Claims National Enquirer Did Not Blackmail Jeff Bezos; Top General: Tens of Thousands Of ISIS Fighters Remain In Syria And Iraq; Average Tax Refund Is Down Eight Percent So Far This Year; Biggest Stars In Music Shine At Grammy Awards. Aired 7:30-8a ET

Aired February 11, 2019 - 07:30   ET

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

(COMMERCIAL BREAK)

[07:33:19] ALISYN CAMEROTA, CNN ANCHOR: All right. You've probably heard about the scandal between the "National Enquirer" and Jeff Bezos. Bezos published e-mails between him and an "Enquirer" executive that he claims proves that they were trying to blackmail and extort him in exchange for not publishing racy private photos.

Joining us now is Stu Zakim. He was a senior vice president for corporate communications at American Media. That's the parent company of the "National Enquirer". And, Jeffrey Toobin, CNN's chief legal analyst. Great to have both of you in studio.

STU ZAKIM, FORMER SENIOR VICE PRESIDENT FOR CORPORATE COMMUNICATIONS, AMERICAN MEDIA, INC: Thanks, Alisyn.

CAMEROTA: So, Stu, is this how they operate? Is this how they generally operated? They would get some sort of juicy morsel -- either a racy photo or a tip -- and they would call the person or e- mail the person and basically threaten we're going to run with this unless you do something.

ZAKIM: It's pretty much SOP, you know -- standard operating procedure. Now, I haven't been there in 12 years but even then, what they did now, then was still happening now, obviously, as we've seen in that note. So, yes, that's pretty how they do this.

CAMEROTA: And what do people usually do? I mean, Jeff Bezos had a different reaction, which is he sort of beat them to the punch. He then published.

What do people normally do when they get a call like that from the "National Enquirer"?

ZAKIM: They cave -- I mean, because it's a pretty strong letter. If you read what they wrote, you get pretty scared when they say those things.

CAMEROTA: Let me do that. Let me just read a portion of it so everybody knows and we're on the same page. Here is what they sent, OK? They said, "With the Washington Post poised to publish unsubstantiated

rumors of the National Enquirer's initial report, I wanted to describe to you the photos obtained during our newsgathering. In addition to the below the belt selfie, otherwise colloquially known as a "(blank) pick", the Enquirer obtained a further nine images."

So they are letting Bezos or his attorney or whomever know we have these 10 pictures that -- pictures that are very private and will be very embarrassing.

[07:35:05] ZAKIM: Well, in this case, Bezos is Jeff Bezos, so he has the ability to stand up to them.

Also, the damage had already been done. When they published that first story they lost that kind of leverage to hold over his head. What difference does it make if there are some other pictures after that first story broke?

CAMEROTA: I don't know. Seeing pictures of your body part --

ZAKIM: After you're embarrassed like that?

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST, STAFF WRITER, THE NEW YORKER, FORMER FEDERAL PROSECUTOR: It -- no, but I think all of us who have followed these "National Enquirer" were surprised at the bravado of Jeff Bezos in sort of airing the whole thing out publicly and risking the embarrassment, and in allowing the embarrassment of the disclosure of at least the description of the pics in return for showing how the "National Enquirer" operates.

CAMEROTA: Well, I mean, look, he says it is blackmail and the attorney for David Pecker -- for AMI -- has a different definition for it. So here is how he explained it --

ZAKIM: Right.

CAMEROTA: -- this weekend. Listen to this.

(BEGIN VIDEO CLIP)

ELKAN ABRAMOWITZ, ATTORNEY FOR AMI CEO DAVID PECKER: It is -- it absolutely is not extortion and not blackmail. It's absolutely not a crime to ask somebody to simply tell the truth. Tell the truth that this was not politically motivated and we will print no more stories.

(END VIDEO CLIP)

CAMEROTA: So that's the question. Is it blackmail or not?

TOOBIN: It might be blackmail. I mean, I think we need more investigation. I don't think Elkan Abramowitz's explanation is particularly persuasive because the definition of blackmail and extortion is getting a thing of value in return for threats.

CAMEROTA: So how is this not blackmail?

TOOBIN: Well, that's the question because -- the question is, is publishing or refusing to publish something a thing of value?

Now, Elkan Abramowitz was saying well, all they were doing is trying to get the truth. Well, first of all, it's not at all clear it was the truth. But even if it was the truth, getting someone to --

CAMEROTA: Wait -- what part wasn't necessarily the truth?

TOOBIN: Well, the political motivation --

CAMEROTA: Oh.

TOOBIN: -- of the -- of the story. I mean, we don't -- we know that David Pecker has done things in the past.

CAMEROTA: And he's had a long relationship with Donald Trump and has protected him.

TOOBIN: And has protected him and paid $150,000 to Karen McDougal.

But this story -- the Bezos story, in particular, we don't know for sure that it was politically motivated, but he says it wasn't.

Still, the issue is can you get a publication, like "The Washington Post", to print something or not print something by a threat to the owner? That may be extortion or blackmail and that's why I think the New York City district attorney -- U.S. Attorney's Office should be investigating this.

CAMEROTA: OK, one more question to you.

So, the Southern District of New York, as you know, had this cooperation deal --

TOOBIN: Right.

CAMEROTA: -- with AMI with the "National Enquirer" because -- about all the payments to the various women who have said that they had affairs with Donald Trump.

So, does this -- the revelation of this effect that cooperation deal?

TOOBIN: Well, it's sort of the same question because it depends on whether the extortion is -- it is actually extortion because any cooperation agreement requires you not commit any further crimes. So if this is a crime, the whole thing goes out the window. But the question of whether it's a crime or not is the one we're debating.

CAMEROTA: You know David Pecker.

ZAKIM: Yes.

CAMEROTA: You worked for him for years. Is he worried today?

ZAKIM: I don't think he's worried. I think he's really confident. Look at how he's been operating, right? Someone who is worried doesn't go out and be as bold as he's been, especially, as Jeff was saying, about being on good behavior because of the deal he cut.

I think they -- similar to Donald Trump, he thinks nothing sticks to him and he can keep doing business as usual.

CAMEROTA: But do you think that something is different about this time? Jeff Bezos has beaten them at their own game in terms of going public with embarrassing details before they could. Well, sort of. I mean, certainly, about the pictures.

ZAKIM: Yes.

CAMEROTA: He has very deep pockets. He's the richest man, you know, on earth. So, is this time different for the "National Enquirer"?

ZAKIM: I think it is in that they didn't anticipate his reaction -- that he would fight them -- because most people just fold like cards. And here is someone who is really stepping up and saying I'm not playing ball with you guys. Come and get me.

TOOBIN: But I think the point is it probably will not have a continuing life.

Bezos got what he wanted. He got the "Enquirer" to back down. He embarrassed the "Enquirer".

But he's not going to take over the "Enquirer". He's not going to sue the "Enquirer".

CAMEROTA: Why not?

TOOBIN: Well, I don't think he wants to extend this controversy any more than it's already been extended. And his part -- I mean, it's now up to the government about whether they're going to prosecute. I think at the end of the day, it's unlikely there will be a prosecution for extortion just because it's so -- the facts are so unusual.

But still, I think Pecker can continue to operate as he has in the past.

CAMEROTA: That's interesting because there might be something satisfying about crushing the "National Enquirer" and Jeff Bezos might have the means to be able to do it.

And I'm just talking about like the "Gawker" case, for instance. You know, sometimes you sue somebody out of existence.

TOOBIN: I -- you know, I think Peter Thiel, who was the billionaire who pushed "Gawker" out of business, had a rage that was different from Bezos. Even if you read his posts in "Medium" it was written in an almost matter-of-fact style. It's just like I'm not going to do this.

[07:40:08] But I don't -- and, again, I don't know for sure, but I did not get the impression that this is a lifelong vendetta that Bezos is dealing with. He's dealing with a discreet problem and he has bigger fish to fry than this. CAMEROTA: Do you think it's possible, Stu, that the "National Enquirer" goes out of business as a result of this?

ZAKIM: I don't think so. I think they'll continue just happening all along. Nothing sticks to the guy.

And you know the really strange thing, he made a lot of money off of this issue with Bezos. That thing sold.

TOOBIN: But the real problem is that the "National Enquirer" is a magazine that's sold on newsstands and people aren't buying magazines. You know, when I wrote -- I wrote a big story about David Pecker a couple of years ago.

In the 70s, the "National Enquirer's" circulation was three and four million. Today, it's 300,000. That's his problem, not Jeff Bezos.

CAMEROTA: That's a different -- that's a different segment. But maybe --

TOOBIN: Yes.

CAMEROTA: -- Jeff Bezos doesn't have to do anything.

TOOBIN: Yes. Well, that's -- and that's really it. I mean, now they charge more for the magazine than they used to, but the real problem is the decline of print, which is independent of this scandal.

ZAKIM: Right, absolutely.

CAMEROTA: All right. Stu Zakim, Jeffrey Toobin, thank you both --

ZAKIM: Thank you.

CAMEROTA: -- very much -- John.

JOHN BERMAN, CNN ANCHOR: All right.

It is the first tax season under the new tax code and some Americans are finding an unpleasant surprise. Why the average refund is smaller this year. That's next.

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[07:45:02] BERMAN: The commander of U.S. Central Command is in the Middle East this week as part of his farewell tour before stepping down. General Joseph Votel says tens of thousands of ISIS fighters remain spread across Syria and Iraq, which contradicts President Trump's claim that they have been destroyed.

CNN's Barbara Starr is the only television correspondent accompanying Gen. Votel. She joins us now live from Cairo. Fascinating interview, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, it was, John. We flew overnight from the United States, landing here in Cairo today as Gen. Votel begins his series of meetings with military counterparts across the region.

This all comes at a very sensitive time, shall we say, because President Trump wants to declare 100 percent of the caliphate is gone -- the physical caliphate -- the land that ISIS controlled in Syria. That may well come in the -- in the coming days and weeks. They are down to fighting over the last bit of territory.

But, Gen. Votel very much taking a strategic longer-term view about ISIS, its capabilities, and what it can still do. Have a listen.

(BEGIN VIDEO CLIP)

GEN. JOSEPH VOTEL, COMMANDER, U.S. CENTRAL COMMAND (CENTCOM): I'm kind of aligned with where the intelligence community is on this. They've kind of sought -- they've talked about tens of thousands that have been dispersed and disaggregated from the areas. They're dispersed and disaggregated, but there is leadership there, there are fighters there, and there are facilitators there.

They, you know, have -- still have some access to resources. And, of course, they still maintain this kind of perverse ideology.

(END VIDEO CLIP)

STARR: That shot that you saw was obviously overnight on the plane. General Votel speaking on a very noisy military plane, so you've seen headsets.

But make no mistake. Listen to what he says. There are leaders, there are facilitators, there are fighters.

And the big concern is that they will come back. They will be able to stage attacks. And that if military pressure is not kept on ISIS, they might even be able to regain territory -- Alisyn.

CAMEROTA: Barbara, really important to hear from the actual general who is on the ground with these things. Thank you very much.

OK, it's time for "CNN Business Now."

Millions of Americans are in for a surprise when they file their taxes this year. It is tax season and early filers are seeing smaller refunds than they're expecting.

Chief business correspondent Christine Romans explains why.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT, ANCHOR, "EARLY START": No big change. This is a big tax overhaul and this is going to come as a big surprise to many. The first year under the new tax law and the early refunds are smaller, you guys.

The IRS revealed the average refund is down about eight percent with the revamped tax code, on average. Here are the dollars and cents. One thousand eight hundred sixty-five dollars -- that's down from $2,035 in the 2017 tax year. Now, these are early figures and this is a slow start to the tax filing season because it opened just days, of course, after the government shutdown. The Treasury secretary saying -- thanking the Treasury and IRS employees and saying they are getting these returns the system processed efficiently here.

So, here's what is going on. The new tax code changed a lot. It lowered most individual tax rates, it nearly doubled the standard deduction.

According to the Tax Policy Center, about 80 percent of you -- 80 percent of tax filers -- you got a tax cut -- you did. About five percent of people will pay more.

So why the smaller tax refund? For many, it's because those workers took home more money in their paychecks during the year because employers began using the new IRS income tax withholding tables. In other words, you paid less in taxes but still got a smaller refund.

Now, other taxpayers will pay more. The new tax code cut some popular deductions -- namely, that full deduction for state and local taxes. If you live in one of these high-tax states here, you're really going to feel it. For them, this year could be a real shock.

But again, the reason why the refunds are smaller is because you had more use of your own money during the year, which is what personal finance people always tell you is the best thing to do. But a lot of families really -- they rely on a fat tax refund, you know, sort of for savings.

BERMAN: It's a perception issue and it really is for people because no matter how many times you tell them you shouldn't over-withhold --

ROMANS: Right.

BERMAN: -- so you get a refund, people want that refund.

ROMANS: They do.

CAMEROTA: It's like a windfall.

ROMANS: Yes, exactly. But these high-tax state, you know -- and don't cry for me in some of these high-tax, high-income states, frankly, but there are going to be some big, big shocks in New York, in New Jersey, in California and Illinois, and some of those places that so many households really depend on a lot of those state and local tax deductions. Those have been capped.

And a lot of those are blue states, by the way, so it wasn't really hard for the Trump administration and a Republican-led Congress to make those big changes there. But it could be something that rankles voters heading into 2020.

BERMAN: No question. All right, Romans, thank you, very, very much.

Women making history at the Grammys but it's part of a speech that you didn't hear that is stealing headlines. That's next.

CAMEROTA: You've got my attention.

BERMAN: Yes, me, too.

(COMMERCIAL BREAK)

[07:54:07] CAMEROTA: The U.S. Navy is sending warships close to disputed islands in the South China Sea. For the second time this year, two guided missile destroyers sailed within 12 nautical miles of the islands. Navy officials call it a "Freedom of Navigation Operation".

China has yet to respond to this incident, but after a similar incident in January, officials there promised to take necessary action to protect China's sovereignty.

BERMAN: Republican Congressman Walter Jones of North Carolina has died. Jones spent 34 years in the State Legislature and Congress.

He's probably best known for his about-face on the 2003 invasion of Iraq. He initially supported it, then later became a fierce critic of what he called an unnecessary war.

The congressman's office says he was placed in hospice when his health declined after breaking his hip last month. Congressman Jones died on his 76th birthday.

CAMEROTA: All right. All of my friends in Seattle are enduring their snowiest February in history and more snow is on the way. The city could see another six inches of snow through Tuesday.

[07:55:08] There's been flight delays and cancellations. Obviously, slick roads, as you're seeing on your screen. They make driving very hazardous.

This is an unusual series of snowstorms pelting the Pacific Northwest. It even brought rare, gusty snowfall to Las Vegas.

BERMAN: You know, I have friends in Seattle, too. You're not like the only person with friends --

CAMEROTA: Do you? Name them.

BERMAN: -- in Seattle.

CAMEROTA: Where, John? Name all of them.

BERMAN: I also have friends in Niagara Falls.

CAMEROTA: Do you?

BERMAN: All right. The biggest names in music coming together Sunday night for the 61st Annual Grammy Awards and diversity was front and center throughout the night. Women took center stage at the start. First-time Grammy host Alicia

Keys received some support from Lady Gaga, Jada Pinkett Smith, Jennifer Lopez, and Michelle Obama. The former first lady received a standing ovation. She shared what music has meant in her life.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FORMER FIRST LADY OF THE UNITED STATES: From the Motown records I wore out on the South Side to the Who Run the World songs that fueled me through this last decade, music has always helped me tell my story.

(END VIDEO CLIP)

CAMEROTA: Among the highlights last night, a tribute to my favorite, Dolly Parton. The 73-year-old country music legend was joined by more than a dozen top recording artists, bringing the audience to their feet.

BERMAN: Yes, that was just flat-out awesome.

CAMEROTA: Oh my gosh, awesomeness.

BERMAN: All right. Alicia Keys, she not only hosted but she performed and she played --

CAMEROTA: And she played two pianos.

BERMAN: Yes, check this out. Not enough to play one piano, but she's playing a medley of her favorite on two pianos at the same time.

CAMEROTA: While hosting. That's beautiful.

BERMAN: It's crazy.

CAMEROTA: Now she's just showing off.

BERMAN: Yes, I think she's just showing off.

CAMEROTA: OK. As for the awards history, history was made. Cardi B becoming the first woman to win Best Rap Album.

Childish Gambino's "This Is America" captured four Grammys, including Song of the Year. It's the first rap song ever to win either of those awards. But he was not there to accept, which I found disappointing.

BERMAN: All right. Country star Kacey Musgraves was also one of the big winners of the night. She took home four Grammys, including Album of the Year.

And, Lady Gaga won two Grammys for her song "Shallow" from the Oscar- nominated film "A Star Is Born".

CAMEROTA: But, Drake stole a lot of the headlines. While he was accepting for Best Rap Song he called out the Grammys and had this message for his fellow artists. (BEGIN VIDEO CLIP)

DRAKE, CANADIAN RAPPER, SINGER, SONGWRITER, RECORD PRODUCTOR, ACTOR: We're playing an opinion-based sport, not a factual-based sport. So it's not the NBA where at the end of the year you're holding a trophy because you made the right decisions or won the games.

Look, the point is you've already won if you have people who are singing your songs word-for-word, if you're a hero in your hometown. If -- look, if there's people who have regular jobs who are coming out in the rain, in the snow, spending their hard-earned money to buy tickets to come to your shows, you don't need this right here -- I promise you. You already won.

(END VIDEO CLIP)

CAMEROTA: Well, Drake did not stop there, but the broadcast went to commercial before he stopped talking.

BERMAN: A lot of people stole the show. Can more than one person steal the show?

CAMEROTA: Yes, I think so. I mean, Alicia Keys, that steals the show.

BERMAN: Yes.

CAMEROTA: Lady Gaga is always a scene-stealer. It was great.

BERMAN: And, Dolly Parton.

CAMEROTA: Oh my gosh, love. Dolly Parton has the voice of an angel. She can say any -- even when she speaks, I stop to listen.

BERMAN: All right. Negotiations in Congress breaking down as a new shutdown looms. NEW DAY continues right now.

(BEGIN VIDEO CLIP)

SEN. RICHARD SHELBY (R-AL), CHAIRMAN, SENATE APPROPRIATIONS COMMITTEE: Talks are stalled. We've got some problems with the Democrats dealing with ICE.

UNIDENTIFIED MALE: We don't want a shutdown. There is a very, very clear path to get this done.

MICK MULVANEY, ACTING WHITE HOUSE CHIEF OF STAFF, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: We'll take as much money as you can give us. The president is going to build the wall.

GOV. RALPH NORTHAM (D), VIRGINIA: I'm not going anywhere. I have learned from this. We are in a unique opportunity now.

UNIDENTIFIED FEMALE: You have, now, more than one credible allegation. He has to resign.

UNIDENTIFIED MALE: I hope that the Legislature starts impeachment for all three of these folks.

SEN. AMY KLOBUCHAR (D-MN), 2020 PRESIDENTIAL CANDIDATE: I am tough enough to take on Donald Trump. I would've liked to see him sitting out here.

UNIDENTIFIED MALE: A lot of the sort of smart consultants believe the Upper Midwest should be the focus.

SEN. ELIZABETH WARREN (D-MA), 2020 PRESIDENTIAL CANDIDATE: Are we going to follow him on every single taunt or are we going to take back this conversation?

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

CAMEROTA: Good morning, everyone. Welcome to your NEW DAY. It is Monday, February 11th, 8:00 in the East.

OK, set your clocks. Four hours -- no, four days, 16 hours left to avert another government shutdown.

BERMAN: Thirty-six seconds.

CAMEROTA: Yes.

BERMAN: Thirty-five seconds.

CAMEROTA: OK, keep --

BERMAN: Thirty-four seconds.

CAMEROTA: Shut up.

BERMAN: All right.

CAMEROTA: The clock is ticking and lawmakers are not talking. Get it?

Bipartisan border talks breaking down over the weekend. Sources tell CNN there is growing concern that lawmakers may not reach a deal in time. Negotiations have stalled over the Democratic demands to limit the number of undocumented immigrants who can be detained.

The president is laying the blame for this impasse on Democrats.

BERMAN: Tonight, President Trump and a potential 2020 challenger, Beto O'Rourke -- they're going to hold dueling rallies in El Paso, Texas.

END