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Attorney Michael Avenatti Charged with Extortion, Bank Fraud and Wire Fraud; Robert Mueller Told Justice Department Three Weeks Ago He Could Not Make A Decision on Trump Obstructing Justice. Aired 2- 2:30p ET

Aired March 25, 2019 - 14:00   ET

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

[14:00:00] BROOKE BALDWIN, CNN HOST: You're watching CNN on this Monday. I'm Brooke Baldwin. Here's the breaking news. Attorney Michael Avenatti, who represented Stormy Daniels in the hush money scandal involving President Trump is now facing federal charges in California and New York.

At any moment now federal prosecutors in California are expected to announce wire fraud and bank fraud charges against this man. This after he was just arrested in New York today in a separate case and accused of trying to extort $20 million from Nike. Nick Watt and Kara Scannell are following this for us. So, Kara, I'll beginning with you or Nick, you're there in L.A. but Kara, to you. So, two cases. All of this coming down on him on one, in one fell swoop today. Why don't we start with what happened in New York?

KARA SCANNELL, CNN REPORTER: So, he was arrested just a short while ago in Manhattan according to multiple law enforcement officials. He was charged in New York with an extortion crime. Prosecutors allege that he tried to extort Nike of more than $20 million. Unless they agree to hire him to represent them in an ongoing investigation, he said he would go public with this information. Now according to the complaint, prosecutors said that Michael Avenatti said, "I'll go take $20 billion off your client's market cap. I'm not f-ing around and continuing to play games. You guys know enough know that you've got a serious problem and it's worth more in exposure to me to just blow the lid off this thing."

He apparently had a client who had damaging information about Nike, that would show officials were offering to pay high school students dollars and also conceal those payments. Now this is what Avenatti wanted to get hired for and prosecutors saying this is all part of on extortion scheme. Prosecutors cooperated. They were recording meetings that he was having in New York just last week. So, prosecutors in New York are to have a press conference afternoon, but prosecutors in Los Angeles also filed charges against him involving bank and fire fraud.

BALDWIN: Things as recent as last week. That's the news out of New York. Over to California to Nick as we await this news conference. Totally separate set of charges and case. What are you learning?

NICK WATT, CNN CORRESPONDENT: Well, this is going to be a federal press conference regarding federal charges as you mentioned, Brooke, also California charge, which I'm just reading now and these appear to be related to so I'm going to read you just part of this. Reading there is probable cause to believe that between 2011 and the President, Avenatti committed federal offenses included but not limited to fraud related offenses relating to loans Avenatti and his company obtained from the People's Bank in Mississippi and wire fraud and money laundering relating to 1.6 million settlement payment they received in January 2018. As we mentioned at the top of this, we are going to hear ten or 15 minutes from federal authorities here in California, Avenatti himself is in New York, but he is a lawyer licensed to practice here in California and listen, as you say, he has made himself front and center of so many cases recently he was involved representing a woman who claimed she had been assaulted by Brett Kavanaugh. He was involved in the R. Kelly case. He has been a vocal critic of President Trump and now it looks like he has a lot of charges piling up against him. We're going to find out more details on that very, very shortly. Here in Los Angeles.

BALDWIN: We'll dip into that. Thank you. We'll talk on the other side. We'll talk to you as well. I want to get to this Mueller report. This four-page letter from the Attorney General signaling the end of the Mueller investigation and likely the start of a whole new political battle. "The Washington Post" sums it up this way. "Republicans cheer. Democrats challenge Mueller's findings on Trump and Russia." Quite a change from what we've heard from both sides for the last two years. Here is first the view from Trump world now, which has gone from denouncing witch hunts to touting the special counsel's findings.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Lasted a long time. We're glad it's over. A 100 percent the way it should have been.

[14:05:00] RUDY GIULIANI, ATTORNEY TO THE PRESIDENT: In cataloging the President's actions, many of which took place in public view, the report identifies no actions that in our judgment, that Rosenstein and Barr, constitute obstructive conduct. That's a complete exoneration by the Attorney General and Rod Rosenstein.

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: They made a decision there was no obstruction so that's total exoneration.

(END VIDEO CLIP)

BALDWIN: Couple of things to point out here because according to a CNN source was a whole mix of talking points the White House sent out to surrogates last night. More importantly, Bob Mueller did not write that. It was Bill Barr and the Deputy Attorney General who decided there wasn't enough evidence to prosecute Trump for obstruction of justice.

But Mueller is less definitive. Here's an excerpt from the letter. "The special counsel states that quote while this report does not conclude that the President committed a crime, it also does not exonerate him." And one more thing on the Barr letter, it is his summary of the Mueller report. Most lawmakers, the general public and even some in the White House haven't seen the full thing but if Jerry Nadler gets his way, they will.

(BEGIN VIDEO CLIP)

REP. JERRY NADLER (D) CHAIRMAN OF HOUSE JUDICIARY COMMITTEE: President Trump is wrong. This report does not amount to a so-called total exoneration. The Attorney General's comments make it clear Congress must step in to get the truth and provide full transparency to the American people.

(END VIDEO CLIP)

BALDWIN: Let's go to Laura Jarrett in Washington who I'm sure has been working since 5:03 Friday afternoon. Amazing job. You have new reporting about when Bill Barr and Rod Rosenstein found out Mueller would not be reaching a conclusion specifically on obstruction.

LAURA JARRETT, CNN JUSTICE REPORTER: That's right. I have been asking since yesterday whether justice officials felt blind sided by the news that Mueller would not be reaching a conclusion on one of the central inquiries here. We're learning that roughly three weeks ago, the special counsel's office, members of the team, came here to the Justice Department. Met with top officials here and conveyed the news they would not be reaching that conclusion. They conveyed it to Bill Barr as well as the Deputy Attorney General, Rosenstein, who's been overseeing the investigation since he appointed Mueller. So of course, he's been involved all along. But I'm told that the Attorney General Bill Barr found this news unexpected. He was not anticipating that Mueller was going to punt the decision. We still need to do more. Do more reporting on why Mueller did that. It was best left to Congress. Maybe it was a political question. He felt like there was evidence on both sides according to the memo. He thought there was a difficult issue of law and fact according to Bill Barr's restatement of it and it's quoting the special counsel here, it does not con rate h exonerate him. But this new timeline at least explains how bar was able to hit the ground running. Wasn't just that he had 48 hours to figure out what are Mueller's findings.

BALDWIN: Thank you. Let's get to John, a former assistant Watergate prosecutor and attorney. Asha Rangappa is former FBI special agent and CNN legal and national security analyst.

So, welcome, welcome, to both of you. John, let me start with you on Laura's reporting on the three weeks. So, if Bill Barr new three weeks ago that Mueller would not reach a conclusion on obstruction, what does that tell you?

JON SALE, FORMER ASSISTANT WATERGATE PROSECUTOR: It puzzles me. Bob Mueller, that was his job. His job was he had all the resources. Was to consider the facts and the law and to make a recommendation or make a decision. And it's like a judge saying it it's a hard issue so I'm just not going to decide. But since he didn't decide and he gave notice, plenty of time, to the Attorney General, somebody had to make a decision and the Attorney General and rod Rosenstein. The man who wanted to wear a wire on the President. They jointly made a decision that there was not obstructive conduct. BALDWIN: And remember, we have the reporting that Rod Rosenstein

wanted to stay on longer in case he needed to be the heat shield and so now we know that they knew for three weeks. To use --

SALE: Probably why. This is probably why.

BALDWIN: There you go. To use the football analogy, all right, that my friend here gave me, my question is this. Did, did Barr intercept the Mueller punt to Congress?

ASHA RANGAPPA, CNN LEGAL AND NATIONAL SECURITY ANALYST: I think that the timeline and also Barr basically coming to a conclusion within 48 hours of reading this unspecified number of pages of this report suggest that that could be the case. I mean look, the part of the questions of law in fact which are involved here are a, whether also Barr basically coming to a conclusion within 48 hours of reading this unspecified number of pages of this report suggest that that could be the case.

[14:10:00] Whether a sitting President can be indicted and whether certain kind of behavior could also constitute obstruction and I think that Mueller behaved very honorably here by saying look, it's not for me to decide these questions. I provided you with evidence with I don't believe exonerates the President and I think that the natural venue to evaluate that would be Congress. To see hey, look, yes. That Congress would be the one to look at both sides, the evidence that he's found and to determine whether even if not as a criminal matter, as a political matter, whether it meets their threshold as they check on the executive branch.

BALDWIN: Again, let's remind everyone, Bill Barr, right, that 2017 memo, John, arguing that Mueller's obstruction of justice investigation wasn't in the first place. Do you think now thinking back to his confirmation hearing, do you think that's his biggest liability?

SALE: I think that it's going to be, depends upon which side of the aisle you're on. I think how much credibility or trust we have in the integrity of Bill Barr. But I can't stress how important it is to me, any way, that it was a joint decision with Rod Rosenstein. They said so. But let me point out I respectfully disagree with one thing. The much more important part was collusion. And on that, Bob Mueller did take the bull by the horns and made a prosecutorial judgment. So, Mueller thinks he has the ability and it is his prerogative to make prosecutorial judgments, so why didn't he do it on the less important part, which is obstruction. That remains to be scene. I think transparency, I think we need to see the understood lying report and I think we're going to see very, very little of it.

BALDWIN: Do you? Because that's my whole next conversation. Let me hold that thought because I want to get to that. But I hear you, you're puzzled on obstruction. Crystal clear on collusion. Just reminding everyone that despite 199 counts, 27 entities charged, 16 Trump associates who had contact with Russians and five people sentenced to prison, then it comes to conspiracy and collusion, as Republicans claim, does this truly remove the cloud of suspicious over the White House?

RANGAPPA: I don't think it does because it doesn't explain the counterintelligence findings. These were prosecutorial findings and it may be that the level of contacts or whatever was happening didn't rise to the level of conspiracy, which is a high bar. Beyond a reasonable doubt of an explicit agreement which there was an overt act. But there are behaviors that can pose a threat to the national security of the United States. That can cause someone's trustworthiness to be undermined, loyalties to be questioned, which may not cross criminal violations and this is why with we have for example security u clearances. If someone is deeply indebted to another country or admires a hostile adversary and wants to emulate them, not someone we would put in charge of the most sensitive credits of the country. I think we need to understand the nature of these contact, why were they being concealed even if they didn't rise to a criminal violation, I think the bigger story we need to find out about.

BALDWIN: Release a report, you heard Mr. Sale saying he thinks we will not see a lot of the report and that would be a massive deal if not. Do you not agree?

RANGAPPA: I, you know, I feel like it is very hard to keep secrets in the U.S. government. And there will be a lengthy battle, but there will come a day whether it's after Trump is out of office and you know, another party comes to power when they declassify this or release it. It will see the light of day at some point. And I think it's just a matter of when I think the question now is you know, are the, this is such a case of public import that the American public should have even if it's a redacted version, both an accounting of the findings on the counterintelligence side and the evidence that Mueller found on obstruction. That he chose not to make a final decision on.

[14:15:02] BALDWIN: John, what do you think of that? That it will have to come out?

SALE: I think some of reasons it's not going to come out are grand jury secrecy and Watergate. To the judiciary committee, surprisingly, the Nixon White House did not object to it. Here, the Attorney General is not going to do that. Secondly, ongoing investigations. There were numerous ones, that's a lot of information. And thirdly, national security matters and executive privilege, which is real. And the White House, it's not a sneak preview. They have a right to preview it. To determine whether or not they're going to exert executive privilege. If they do, it goes to court b, so that will be tied up for. So, if we see a document that's substantial and redacted, it's going to be extremely frustrating. We're not going to see it. I don't know b about some day, but we're not going to see it before the 20 election and I regret that, frankly.

BALDWIN: Yes. Wow. Thank you so much for the conversation disagreement there on when we'll get our eyeballs on this report. Just ahead here on CNN, Mueller may have concluded the report, but the special counsel wasn't the only one investigating the President. Plus, attorney Michael Avenatti facing charges in two separate cases. In one case, he is accused of trying to expert millions and millions from Nike. And as Parkland, Florida, is mourning the loss of two students who took their own lives in the matter of a week, more tragic news today. The father of a child killed at Sandy Hook elementary school also dies of an apparent suicide. You're watching CNN. I'm Brooke Baldwin.

[14:20:00] (COMMERCIAL BREAK)

BALDWIN: Special counsel Robert Mueller's investigation may have ended, but several others surrounding President Trump, his inner circle, his finances are just getting started. Congress, state and federal prosecutors are still scrutinizing a wide range of issues. Investigators are collecting documents, interviewing witnesses and prosecuting cases that may keep the President and his family on edge for months. Chris Cillizza, talk to me about these other investigations that still hang in the balance.

CHRIS CILLIZZA, CNN POLITICS REPORTER AND EDITOR AT LARGE: It's been a long weekend, Brooke. Counting Monday adds the weekend, but it's a big piece. I'm going to go through this fast. The Trump administration, so House Democrats are looking to lot of things as it relates to the Trump administration. Whether it's the policy on the border separating children from people trying to enter the country illegally. Whether that's security clearances for top officials, the travel ban. A lot there. Trump transition, this is about Jared Kushner primarily and his contacts with Russia, Michael Flynn, his contacts with Russian Russians, what did they say. Trump campaign.

There's a lot here. I'm just going to go with the one that most people know. A lot of this is about the hush money payments that Michael Cohen said he made at the direction of Donald Trump. The Southern District of New York said yes, we believe that to be these payments. We have the checks that Cohen produced ed produced. That's that. Like I said, there's a lot. Trump organization, this a lot of this is from Cohen's, not all, but from Cohen's testimony in February. So, he testifies and says well, I know for a fact that the Trump organization exaggerated its assets, other deals like Trump trying to buy the bills. I'm summarizing, there's more. Trump Foundation, my former colleague won the Pulitzer Prize for the work he did related to Donald Trump's charitable organization because he was using it as a way to funnel money to things. It has been shut down. The investigation is ongoing.

Then the Trump Inaugural Committee. $170 million raised? Question is, where did it all get spent? There's an ongoing investigation into that, too. Now who still hasn't been -- have their feet totally known. The big one here is Roger Stone obviously he has denied but has been charged with lying to Congress about the nature and extent of conversations with WikiLeaks, hacked e-mails by the Russians of the DNC and Hillary Clinton campaign chairman.

Michael Flynn has still not been sentenced. He did plead guilty. He has been cooperating. He's the first major guilty plea. Manafort, same deal. Again, has been convicted, pled guilty, then broke his plea agreement. Same with Rick Gates. There's still a long going on. Trump did get a huge win on Sunday. He can say no collusion and be backed be ag guy in Mueller who spent ten years as head of the FBI who said is absolutely the most credible person out there in all this stuff.

BALDWIN: And because of that, there in lies the question, who's getting a pardon? That's another big one.

[14:25:00] CILLIZZA: He said no one yet.

BALDWIN: Yet. Chris Cillizza. Thank you.

CILLIZZA: Thank you, Brooke.

BALDWIN: Moments from now, prosecutors in New York will be holding a news conference on Michael Avenatti, who's charged with trying to extort Nike. Stand by.

[14:30:00] (COMMERCIAL BREAK)

BALDWIN: Here's the breaking news this afternoon. Michael Avenatti is facing federal charges in New York and California for totally separate cases. Among the charges he's facing, extortion, bank fraud, wire fraud. Before we listen to these New York prosecutors, let's listen to prosecutors in California just moments ago.