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New York Subpoena's Trump Organization's Insurance Broker; GM Ends Production at Ohio Plant; R. Kelly Says He's Fighting for His Life; Federal Budget Deficit Jumps in 2019. Aired 9:30-10a ET

Aired March 6, 2019 - 09:30   ET

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


[09:30:00] REP. ALEXANDRIA OCASIO-CORTEZ (D), NEW YORK: By inflated assets to an insurance company?

MICHAEL COHEN, PRESIDENT TRUMP'S FORMER ATTORNEY: Yes.

(END VIDEO CLIP)

JIM SCIUTTO, CNN ANCHOR: Cohen back on The Hill this morning to finish his testimony to the House Intelligence Committee, this time behind closed doors. It gives him more freedom to discuss classified issues and others.

Joining us now to discuss, former federal and state prosecutor and CNN legal analyst Elie Honig.

OK, so help our viewers here. There are a lot of investigations going on at the same time. This is a new one. New York state finance department relating insurance questions. If Donald Trump both inflated and apparently deflated assets to his advantage at different times, what are or are there potential crimes?

ELIE HONIG, CNN LEGAL ANALYST: Sure. There could be. This investigative unit, the Department of Financial Services, is a civil state level investigative unit. That said, they can easy make a referral over to criminal entities. When I was with the Southern District, we got referrals from civil entities at all times.

Yes, it could be a crime either way. I've seen insurance fraud where people inflate their assets if they're hoping for a quick payout, or deflate their assets if they're just trying to sort of push down the premiums. So either one of those would be pretty straightforward textbook insurance fraud.

POPPY HARLOW, CNN ANCHOR: So even though, yes, this is the state's top insurance regulator, it does not have the power to bring criminal challenges. Your point is, yes, but whatever they find, they can refer to the SDNY, for example, and that could prove to be perilous?

HONIG: Exactly. And, in fact, some of the best referrals I used to get came from --

HARLOW: Really? HONIG: When I was a prosecutor came from civil investigative bureaus, because they know what they're doing. They have subject matter expertise sometimes on sort of unusual areas of expertise like this.

HARLOW: Sure.

HONIG: So those can absolutely result fairy quickly in criminal charges.

HARLOW: Interesting.

SCIUTTO: All right. That's a big deal. Potentially, of course, this would be outside the prevue of the president's ability to pardon himself.

HONIG: Right. Well, or to pardon anybody at first blush, yes.

SCIUTTO: Right. OK.

Michael Cohen's on The Hill today. Listen, there's a lot of stuff they're -- members are going to want to push him on behind closed doors that they could not do so in public. I mean what can they learn today that they couldn't learn last week when we were all watching?

HONIG: This is a completely different format, right? You don't have the cameras on. You're not limited to the sort of artificial five minute chunks that we saw last week. The staffers do a lot of the questioning, who often know the issues better.

I would look at this as an opportunity to do two things. One, dig deeper into issues that we heard testimony about, the hush money payments, WikiLeaks, the false testimony about the Moscow project, but also you want to identify verifiable leads. You want to pick out pieces of Cohen's testimony and go, is that something that can be backed up with documents? For example, the false testimony to the Senate about the Moscow project, which Cohen said, well, that was run through some lawyers. Let's get the e-mails. Let's get the draft. Let's get some hard support for Michael Cohen.

SCIUTTO: Like the check pictures, right? Like the --

HONIG: More pictures of a signed check.

HARLOW: Which we saw more of this morning in "The New York Times" reporting.

SCIUTTO: Yes.

HONIG: Yes.

HARLOW: OK, switching gears.

House Intel Chairman Adam Schiff has hired a former prosecutor that you worked with in the Southern District. A guy by the name of Dan Goldman -- if folks don't know his name, they will very soon -- to investigate the Trump administration. Not only do you call him a friend, you worked (INAUDIBLE) together.

Jim sent me this article that fascinated me the other day about -- by Garrett Graff about RICO (ph) and how mobs are investigating using RICO and how that could translate here to investigating the Trump Organization.

So what is the hiring of Dan Goldman tell you on that front?

HONIG: It tells you Schiff's serious and it tells you he's looking at this both as a political question and as a criminal sort of prosecutorial type issue. Dan has a lot of experience. We did RICO cases together. And essentially what that means is you have an organized unit, it can be a business, it can be a campaign, it could be a political enterprise that's committing a series of crimes that are interconnected.

Now, the trial that Dan and I did together involved double -- two murders and at first I thought, well, he's going to be doing something a lot different now. Certainly he's not going to be looking at murders or violence. But a lot of the same principles are going to apply. The idea of you're trying to work your way up a hierarchy. You're going to have to flip people. You're going to have to penetrate sort of this closed, secretive network. So I think those skills are going to translate very well.

SCIUTTO: And that's been something that's been used against organized crime before, right?

HONIG: Yes, traditionally organized crime, Cosanostra (ph) here in New York City. But over time it has expanded. It's been used in public corporation cases against corporations. You name it.

HARLOW: Right. And who used it in the Southern District exceedingly well?

HONIG: Rudy Giuliani.

SCIUTTO: Good question.

HONIG: And me. I did -- I did OK with it too.

SCIUTTO: Imagine that.

HARLOW: Elie Honig.

HONIG: Thanks.

HARLOW: Thank you. It's good to have you.

So General Motors ending production today, shuttering production today at the first of four plants that it will close in North America. This one in Lordstown, Ohio. This is like the center of employment for this town. What does it mean for all those workers, next.

(COMMERCIAL BREAK) [09:38:50] SCIUTTO: GM's plan in Lordstown, Ohio, will halt production today. This is two days earlier than planned. And this after 50 year of building American cars there.

HARLOW: It's a really big deal in the heartland, along the rust belt.

This is the first of four GM plants that are set to close as part of this restructuring. It's going to mean 1,400 or so workers from there either without a job or transferred to other plants.

And, look, remember when the president said this right in Ohio? Listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I was looking at some of those big, once incredible job producing factories. And my wife, Melania, said, what happened? I said, those jobs have left Ohio. They're all coming back. They're all coming back. They're coming back. Don't move. Don't sell your house.

(END VIDEO CLIP)

HARLOW: But now some of these GM workers are having to do just that, sell their house.

Let's go first to Vanessa Yurkevich. She joins us outside Lordstown, and then we'll bring in Lydia DePillis, who was just in Lordstown reporting on this.

So, Vanessa, to your first.

Look, even before today you had 3,000 of those plant workers laid off as they lost shifts at this plant. So what are people telling you on the ground?

[09:40:09] VANESSA YURKEVICH, CNN BUSINESS CORRESPONDENT: Yes. Hi, Poppy.

Today is the last day of work for 1,400 employees here at the GM plant in Lordstown. And according to the CEO of GM, Mary Barra, she has said the reason that they're closing this plant is because people simply aren't buying sedans anymore. They're buying trucks. They're buying light SUVs to take advantage of low gas prices.

And now when she made that announcement back in November that this plant would be closed, and we heard from the president right away. He said he was disappointed. He even threatened to cut subsidies for GM. This is an area that supported the president and largely in part because he said he would keep these jobs here.

Now, this plant behind me has been open for over 50 years. You can think about the amount of people who have come through this plant, worked here, generations of families.

We spoke to one of those employees. (BEGIN VIDEO CLIP)

TONY VENABLE, HAS WORKED WITH GM FOR 25 YEARS: They stabbed us in the back. We do a lot for this community. You know, it's kind of hurting right now. I'm saying we might have to leave Ohio to go somewhere else. But we get -- we get through this. Rough (ph) times.

(END VIDEO CLIP)

YURKEVICH: And according to GM, the cutting of this plant and the jobs and also the four others that you mentioned, Poppy, is going to be saving the company about $6 billion going into 2020 -- by the end of 2020.

And we got a statement from GM just a short time ago. I want to read that to you. They say, we know this is an emotional day for our Lordstown team. They go on to say, we have job opportunities for virtually every hourly employee at the impacted plants. Anyone who wants a job and is willing to relocate will have a job.

So far GM has said that they were able to accommodate new jobs at other plants for about 400 of the employees here from Lordstown. But, Poppy, you know, you talk about a ripple effect. When this plant closes, the town of Lordstown suffers. I spoke to the mayor last night who said local businesses are down 50 percent.

And, Poppy, we can only expect, when people stop showing up for work tomorrow, that that number will decline even more.

Poppy.

HARLOW: Yes.

SCIUTTO: Many of these plants are defining, often times, for these towns.

HARLOW: Sure.

SCIUTTO: An enormous impact.

HARLOW: Thank you, Vanessa.

SCIUTTO: Lydia, big picture here. You saw the president. And this has been a frequent promise of his going back to the campaign and since then. I'm going to bring manufacturing jobs back.

HARLOW: Yes.

SCIUTTO: This is one plant, but it's one of several that GM shut down. And we just see data that the U.S. trade deficit has grown. But on manufacturing jobs, what does the data show? Bigger picture. Have many jobs come back?

LYDIA DEPILLIS, CNN SENIOR ECONOMICS WRITER: Well, coming back is a complicated question. But manufacturing jobs have actually been growing quite quickly in the last couple of years and that's for a number of different reasons. Low gas prices, the shale revolution in Texas, which demands lots of kinds of goods, the difficulty of managing large global supply chains. So there's many reasons why manufacturing has grown quickly. And so GM's closures are more the exception to the rule at this point.

HARLOW: When you look at this though and you -- you're reporting -- you just spent a few days reporting on the ground there in Lordstown last week. You look at this -- the GM worker there, on average, can make up to $88,000 a year plus bonuses and overtime.

DEPILLIS: Yes.

HARLOW: That's a really good salary there. It -- when they talk about finding new jobs, are those new jobs going to pay that? Meaning, is this great economy right now great for everyone there?

DEPILLIS: Almost certainly not. So the GM job is a really exceptional thing. Over many decades of unionization, they've built up their wages to the point where you can walk out of high school and get a GM job and make a middle class salary, pay for cars and a house and kids and college. And especially in some of these areas, Youngstown particularly, those jobs aren't available anymore. They may be somewhere else and a lot of folks have taken transfers, but that's a really disruptive thing.

SCIUTTO: And, listen, it's not just the wages, right?

HARLOW: Right.

SCIUTTO: It's health care and it's pension, right?

DEPILLIS: Absolutely.

SCIUTTO: This can also be a life-long, you know, financial support.

HARLOW: He's exactly right. And what about the threat that the president made to General Motors? I mean he threatened them essentially after this that they would not get some of these subsidies, et cetera. Is there anything the administration can do or will do to have GM bring other vehicles to this plant, because that's still an option?

DEPILLIS: Sure. There's very little any president can do to make jobs appear on any particular place.

SCIUTTO: Right.

DEPILLIS: What Trump has done is threatened CEOs and bullied people, which is successful to the extent that it makes people think twice about the political blowback from moving jobs to Mexico. But, long term, they usually don't change their strategy. And the reason why is that Wall Street loves these kinds of restructuring.

SCIUTTO: Yes.

DEPILLIS: They think that this is putting GM in a position to succeed in the longer term. So there's no reason Mary Barra would change her mind.

SCIUTTO: They'll choose their share price over the president's public abuse.

Lydia, thanks very much.

HARLOW: Great reporting.

SCIUTTO: And Vanessa Yurkavich on the ground there in Lordstown.

[09:45:02] Coming up, a picture worth a thousand words, perhaps. R. Kelly vehemently denying the allegations of sexual misconduct against him in a shocking -- really breathtaking interview. The singer gets wildly emotional claiming that he is fighting, in his words, for his life.

(COMMERCIAL BREAK)

HARLOW: All right, R. Kelly and an explosive, emotional interview saying he's fighting for his life, adamantly denying the multiple charges of sexual abuse against minors against him in a new interview with CBS. Watch this.

[09:50:00] (BEGIN VIDEO CLIP)

R. KELLY, MUSICIAN: I didn't do this stuff. This is not me. I'm fighting for my (EXPLETIVE DELETED) life. Y'all are killing me with this (EXPLETIVE DELETED). I gave (ph) 30 years of my (EXPLETIVE DELETED).

GAYLE KING, CBS NEWS ANCHOR, "THIS MORNING: Robert --

KELLY: Thirty years of my career. Y'all are trying to kill me! You're killing me, man! This is not about music. I'm trying to have a relationship with my kids, and I can't do it!

KING: What --

KELLY: Y'all just don't want to believe the truth.

(END VIDEO CLIP)

SCIUTTO: It was truly remarkable to watch "This Morning."

Kelly, we should remind you, was indicted on ten counts of aggravated criminal sexual abuse just last month. If convicted of those charges, he could face three to seven years in prison for each count.

CNN national correspondent Sara Sidner has been following this story.

And, good morning, Sara.

This was quite an encounter with CBS' Gayle King there. Tell us what you saw.

SARA SIDNER, CNN NATIONAL CORRESPONDENT: Absolutely. You saw a very raw, emotional, emotive person who, at times, seemed to really be going off the rails. I mean jumping up like that and screaming. That wasn't the only time when he really started to raise his voice or cry during this interview. And he talked about fighting for his life. You heard it there. To him -- because he knows that, as you mentioned, he is accused -- he stands accused right now of ten counts of aggravated sexual abuse, which holds up to 70 years in prison if he's convicted.

Now, there have also been a lot of tears on the point of those alleged victims, people who have come forward, women who have come forward. We have seen them over and over and over again. I also saw them in court at his -- one of his court hearings. One of the victims in the case was there watching it. I watched the families crying outside of the court as well. So a lot of tears have been shed by his alleged victims as well.

Let's listen in to a little bit more of what was said by R. Kelly as he's talking to Gayle King, who I think did a wonderful job just listening and asking the right questions.

(BEGIN VIDEO CLIP)

KING: Did you start seeing her at 17?

KELLY: Absolutely not.

KING: Did you have sex with her when she was 17?

KELLY: Absolutely Not. Absolutely not. Although her parents wanted me to. What kind of father, what kind of mother will sell their daughter to a man?

KING: Who did that?

KELLY: How come it was OK for me to see them until they wasn't getting no money from me?

(END VIDEO CLIP)

SIDNER: Now, we have heard from Alice and Angelo Clary. They have responded. One of their daughters, Azriel Clary, is still with R. Kelly. There is another person who is also still with R. Kelly. The Savage's daughters is there two. Both of those sets of parents have accused him of brainwashing their daughters and keeping them from their parents.

And here's what Azriel Clary's parent told us through their attorney, Michael Avenatti. They said, we have never asked R. Kelly for money. We have never received a penny from R. Kelly. And we never sold our daughter to him or anyone else. They believe he should go to jail and die there. That is literally what they said.

So a lot of emotion here coming from those who are concerned about their daughters, who are currently adults and living with R. Kelly.

Poppy.

HARLOW: Wow. Remarkable across the board.

Sara, thank you for the important reporting.

SCIUTTO: Oh, my goodness. Remember the tears of the victims, right? I mean that's the -- that's the focus.

HARLOW: And that's -- yes. Exactly what Sara mentioned. You're right.

Moments from now on Capitol Hill, Homeland Security Secretary Kirstjen Nielson will face some tough questions on border security, also the zero tolerance policy of this administration for the first time in front of the Democratic-led House Homeland Security Committee. We'll bring that to you live.

(COMMERCIAL BREAK)

[09:57:59] SCIUTTO: Well, this is the math here. There were big tax cuts. There's been big spending. And now a big problem.

HARLOW: Yes.

SCIUTTO: The U.S. budget deficit, imagine that, skyrocketing in the first four months of the 2019 fiscal year, up 77 percent over the same time one year ago.

HARLOW: That's a really big deal. And it matters to all of you.

Another really big deal that matters is another stunning number this morning. The trade deficit hit a ten-year high. It grew to more -- to more than $100 billion under the president.

Our chief business correspondent Christine Romans is here to break it down.

Let's do these things separately, OK.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: All right.

HARLOW: Trade deficit we're going to get to in a moment. But the fact that you have a 77 percent increase here, is it more because of the tax cuts or less revenue coming in or more because of increased spending?

ROMANS: It's both. It is a lot of big spending. I mean big military spending, veteran spending, and then just the interest on the debt that gets bigger and bigger. So that part of the -- there's a lot of spending and those tax cuts to a lesser extent.

And then on the trade -- on the trade front, this is what's so shocking to everybody. You know, the president's entire trade policy is predicated on the belief that trade deficits are a failure. The U.S. trade deficit last year was the worst in a decade, $621 billion. And the overall deficit in goods, $891 billion, Poppy. That the worse in America's 243 year history. The deficit with China, also the worst on record, more than $419 billion. The president detests trade deficits. He simplistically sees them as losing money from the U.S. to her trading partners. Yet in his two years in office, the trade deficit has swelled by more -- well more than $100 million. He has called himself tariff man, but those tariffs brought retaliatory tariffs that made U.S. exports more expensive.

Another uncomfortable number that you rightly pointed out, that 77 percent surge in the budget deficit in the first four months of the year. $310 billion. The government spent more on military, veterans affairs, the interest on the debt. Tax cuts mean the Treasury is taking in less. Tax revenue down about 1.5 percent over the past 12 months. The White House Economic Adviser, Larry Kudlow, downplayed those numbers.

(BEGIN VIDEO CLIP)

LARRY KUDLOW, DIRECTOR, U.S. NATIONAL ECONOMIC COUNCIL: We are making an investment in America's future. It's already beginning to pay off. And if that means we incur some additional debt in the short run, so be it.

(END VIDEO CLIP)

[10:00:08]

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