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THE SITUATION ROOM
Interview With Rep. Dan Kildee (D) Michigan; Joe Biden Responds To Unwanted Touching Allegations; CNN Exclusive: Key Dem Sends Letter To IRS Demanding Trump's Tax Returns From 2013-2018; FBI Investigating Security Breach At Mar-a-Lago For Possibility Of Spying Effort At Trump Resort; House Panel Authorizes Subpoena For Mueller Report As Trump Backs Away From Calls For Public Release; Actresses Lori Loughlin And Felicity Huffman In Court Along With Other Defendants In College Cheating Scandal. Aired 6-7p ET
Aired April 3, 2019 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: CNN has exclusively obtained a letter demanding the IRS commissioner hand over documents that President Trump has adamantly refused to replace.
Spying at Mar-a-Lago? The FBI launches an investigation into a security breach at the president's Florida resort. Was a woman arrested with Chinese passports and suspicious devices part of a foreign plot?
Mueller report subpoena. House Democrats set the stage for an epic clash with the Trump administration, as a key panel approves a subpoena seeking access to the full Mueller report. Will it impact the attorney general's plans to keep some of the special counsel's findings secret?
And stars in court. Actresses Lori Loughlin and Felicity Huffman face a judge in Boston, along with others charged in the college admissions scam. Tonight, prosecutors say they will ask for all the defendants to do time behind bars.
We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.
ANNOUNCER: This is CNN breaking news.
BLITZER: We have major breaking news this hour.
House Democrats are opening up a new front in their investigation of President Trump, going after his very tightly guarded financial information. In a letter obtained exclusively by CNN, the House Ways and Means Committee chairman is demanding that the IRS commissioner hand over Mr. Trump's personal tax returns and some from his business over a six-year period from 2013 to 2018.
I will talk about this breaking story with a member of the Ways and Means Committee, Democratic Congressman Dan Kildee. And our correspondents and analysts are also standing by. First, let's go right to CNN Politics Congressional Reporter, Lauren
Lauren, you're learning about this letter. Tell us more about the letter that you have obtained exclusively for CNN.
LAUREN FOX, CNN CONGRESSIONAL REPORTER: Well, that's right, Wolf.
Just minutes ago, the House Ways and Means Chairman, Richard Neal, sent a letter to the IRS commissioner requesting President Donald Trump's personal and business tax returns. Obviously, this is a huge step that the committee chairman has been trying to consider for months now.
He made that step today, making the official request to the IRS.
FOX (voice-over): Tonight, House Democrats drawing a new battle line with the president, sending this formal request to the IRS for Donald Trump's tax returns, which he has for years refused.
House Ways and Means Chairman Richard Neal asking for six years of the president's personal tax returns from 2013 to 2018, as well as the tax returns of eight of his businesses, such as his golf course in Bedminster, New Jersey.
During his campaign, Mr. Trump initially said he would release his tax returns as other candidates have, but later refused, blaming the fact they were under audit.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Almost every lawyer says, you don't release your returns until the audit is complete. When the audit is complete, I will do it.
FOX: In the letter, Neal says the tax returns are needed to conduct oversight and so that Congress can consider legislation on how the IRS audits and enforces tax laws against sitting presidents.
Right now, that process is laid out through IRS policy. But Neal writes that the committee needs to know how the process works and if it should be written into the law.
The bombshell request follows months of debate in preparation among Democrats on the committee.
REP. RICHARD NEAL (D), MASSACHUSETTS: It's also a case that is likely to make its way through courts over a period of time, so we have to make sure that we handle it prudently.
FOX: Neal's request of the IRS will draw heat from Republicans. At a recent hearing, GOP committee members raised concerns about invasions of privacy if requesting tax returns from the IRS becomes the norm.
REP. MIKE KELLY (R), PENNSYLVANIA: Where does it end? What about the tax returns of the speaker, members of Congress or federal employees or for that matter any political donors?
FOX: Now, Wolf, this is something that Richard Neal has been trying to consider very closely, in part because this is a chairman who wants to work with the Trump administration on other issues like infrastructure. He has brought a lot of attention to his relationships with the Trump administration.
And I just want to read from a statement from Richard Neal. He said -- quote -- "I take the authority to make this request very seriously and I approach it with the utmost care and respect. This request is about policy, not politics. My preparations were made on my own track and timeline, entirely independent of other activities in Congress and the administration," but obviously a gigantic step tonight, Wolf, from the House Ways and Means chairman, Richard Neal.
BLITZER: Very dramatic step indeed, very important as well. Great reporting, Lauren Fox up on Capitol Hill. Thank you very, very much.
Let's get some more on the breaking story.
Our White House Correspondent, Abby Phillip, is joining us.
Abby, so what's your sense of how the White House, how the president is going to react to this letter?
ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, this is a major development on an issue that has dogged President Trump for years and one that we know is a source of sensitivity for the president.
He once told "The New York Times" that if the Mueller investigation sought to dig into his personal finances, that would be a red line. Now it's clear that Congress is headed straight for that red line.
And President Trump has already started to lay the groundwork for what this -- what his response would be to that. He's already said this is presidential harassment. And even though Chairman Neal is trying to say this is about -- this is about a policy and not politics, that this is not an attempt to go after President Trump for political reasons, you can expect the president and his allies to say the exact opposite, that Democrats are using their power through these committees in Congress to go after him, to try to damage him politically.
But, of course, Wolf, it's really not clear why President Trump has been so resistant to releasing his tax returns, as virtually every other presidential candidate has done for many, many years. The president has said that these taxes are under audit, but there has not been any proof that that is actually the case.
And this goes beyond just his personal taxes. We're talking about his businesses. We know that some of the testimony from the president's associates, particularly his former personal attorney Michael Cohen, have suggested that there are some nefarious things going on in the president's finances. Democrats are looking into all of that.
And this is all part of what the president and his allies have been concerned about all along, that they could be digging into things that haven't been in the public sphere up until now. This could be fresh territory for the president's adversaries, political adversaries, and it's been a source of concern for many, many months.
We have reached out to the White House this afternoon in response to Lauren's great reporting. So far, we have heard -- we have not heard back from them yet -- Wolf.
BLITZER: Well, we know the president is now getting ready to make some sort of statement over there at the White House. There will be cameras and reporters there. We will see if he's asked about this and what his reaction is.
Abby Phillip at the White House, thanks very much.
Let's talk to a key member of the House Ways and Means Committee that is seeking President Trump's personal tax returns.
Democratic Congressman Dan Kildee is joining us now from Capitol Hill.
Congressman, thanks so much for joining us.
So, why have you decided, your committee chairman, to take this extraordinary step now?
REP. DAN KILDEE (D), MICHIGAN: Well, the president has broken nearly a half-a-century of custom where candidates for president and presidents of the United States have routinely furnished multiple years of their tax returns to the public, in order to provide some assurance that their public duties are not influenced by their private interests.
But I think, in this case specifically, the committee is looking at policy. We are looking at the extent to which the IRS audits and enforces federal tax laws on the president. The routine process of auditing presidential tax returns is not a matter of law. It's a matter of practice at the IRS.
So it's important for us, as we examine this question, to get our hands on these documents in order to make that assessment.
BLITZER: Are you -- yes.
KILDEE: Now, obviously, there are very serious other public interests that would be served by having access, but principally this is about the policy question that the committee is anxious to look at.
BLITZER: Are you confident your committee has the authority to do this?
KILDEE: There's no question that the committee has the authority. It's been exercised by the committee for many, many years in different circumstances.
Obviously, in this case, since the president has broken from this near-50-year tradition, it's being exercised in context of the president's returns. But there's no question it is clear in the law that the chairman of the Ways and Means Committee has the authority to seek these from the IRS commissioner and that the IRS commissioner is bound by law to provide them.
So we expect the IRS to comply.
BLITZER: Because the chairman, Richard Neal, the chairman of your committee, the Ways and Means Committee, he writes in his letter -- and we have a copy of the letter right here -- he says he's basing this move off of IRS policy, not anything codified in formal federal tax laws.
Do you have any concerns about that approach?
KILDEE: Well, the approach is -- it's not that he's asking under IRS policy to provide the return.
Section 6103 is clear. We have the authority to get these returns. I think what the chairman's reference to is that the IRS has had a practice of auditing presidential tax returns. It itself is not a matter of law.
The committee is interested in that question, to determine the extent to which the IRS is auditing and enforcing federal tax law on the president of the United States.
BLITZER: Because your Republican colleagues, they are pushing back.
They're saying that this is meant to help Congress properly carry out the tax code not, repeat, not to go after the tax returns of what they call political enemies. So here's the question. Are you abusing this code?
KILDEE: No question we are not abusing this. This is specifically a tax policy question that the committee is pursuing.
Obviously, there are other public interests that are served by the president revealing his tax returns, as, of course, he promised he would, but specifically we have a policy interest in this question. We don't know the extent to which the IRS audits or is enforcing tax law on the president.
And we, as the committee of jurisdiction, have not only the right, but we have a responsibility to ensure that the law is being adhered to. And that's why we're seeking this through this inquiry.
But there is no question we have the authority to gain access to these returns. The chairman is one of the people designated in the law specifically with that authority. We expect the IRS commissioner to comply with the law and to provide those returns. BLITZER: Well, how likely is it that the commissioner, the IRS
commissioner, will, in fact, comply?
KILDEE: I would assume that the IRS commissioner would pay attention to what the law of the United States says. That's the oath that the IRS commissioner took, and we expect him to uphold that oath and to provide these returns.
BLITZER: Well, do you expect the IRS commissioner to make the final decision, or do you think the treasury secretary, Mnuchin, or even the president of the United States himself will make the final decision?
KILDEE: This is an obligation that the IRS commissioner has under the law.
And I was at a hearing with Mr. Mnuchin where he indicated that it would be the decision of the IRS commissioner. So Mr. Mnuchin is an interested party, but he does not have anything to do with the direct responsibility that the IRS commissioner has under the law.
BLITZER: If the IRS commissioner doesn't comply, and these tax returns are not made available to your committee, what are you willing to do?
KILDEE: Well, we swore an oath to uphold the laws of the United States, and we will use every legal pathway available to us to ensure that the law is upheld. So we will seek whatever path we need to.
But, you know, in the short term, it ought to be fairly clear that the IRS commissioner is duty-bound to follow the law. The law is very clear. He needs to deliver these returns to the chairman of the Ways and Means Committee.
BLITZER: So, just to be precise, Congressman, if -- is your committee prepared to fight for these tax returns in court?
KILDEE: We will. We're not going to relinquish our authority under the statutes and under the Constitution of the United States.
We have to do our job. We don't have a choice in that regard, so we will pursue it, but, again, I expect the commissioner will do his job and follow the law.
BLITZER: As you know, for years, the president has maintained he can't release his tax returns because they're still under federal audit by the IRS. Do you think that would prevent you from getting access to the returns, if, in fact, an audit is still under way?
KILDEE: It should not.
There's nothing in the law that anticipates that a return that might be under audit is not subject to 6103. But, in any event, we don't know whether the president's returns really are under audit. He says that, but, of course, as we know the president says a lot of things.
BLITZER: What are you hoping to learn from the president's tax returns and from some of his business tax returns?
KILDEE: Well, I think the business tax returns are important, because, in order to get a true picture of the president's financial interests and whether or not the IRS is properly auditing and enforcing the law upon those entities, we have to look at the larger picture.
We can't simply only look at the individual return and get an understanding of the vast holdings that Donald Trump has. Those could very well be revealed and we think most likely will be revealed by looking at not only the individual return, but those specific entities that really comprises the business empire that Donald Trump continues to control.
BLITZER: As you know, your critics, the Republicans, are going to say and certainly White House officials are going to say that Democrats like you didn't get what you wanted from the Mueller report, so now you're going after the president's tax returns. How do you respond to that?
KILDEE: Well, this has nothing to do with the Mueller report. The chairman has taken a very deliberate approach in seeking counsel on this and making sure over the last few months that it was done properly.
And the timing is -- has absolutely nothing, the content of our inquiry has nothing to do with what was included in the Mueller report. But that's an easy thing for Republicans to say, who simply want to rush to Donald Trump's defense, no matter what he says or what he does.
I wish that they would join us in this inquiry. They have benefited over the years from presidents and candidates for president being transparent about their interests. I think they would benefit from that transparency with this president as well.
BLITZER: Do Democrats risk overreaching on this issue?
KILDEE: No, this is the law. We didn't write this law. This is the law that's been on the books for almost 100 years.
Exercising our authority under the law, doing our job as members of the Ways and Means Committee, using the authority that is vested in the chairman to provide information that we need for legitimate policy inquiry is something that we have to do, and it's certainly not an overreach. It's simply living up to the oath that we swore.
BLITZER: Has your committee, the Ways and Means Committee, coordinated with the leaders of other House committees who are going after the unredacted Mueller report?
KILDEE: No, this has nothing to do with the Mueller report.
This is a specific inquiry that we have been talking about for some time that falls directly under the authority of Chairman Neal, and is really not in any way connected to any of the other inquiries that are under way.
BLITZER: Do you want all the Democratic presidential candidates to release their tax returns as well? Some of them already have.
Bernie Sanders, the senator, he told me in February he was going to be releasing his soon for 10 years. That hasn't happened yet. Should all the Democratic presidential candidates also publicly release all their tax returns?
KILDEE: I believe that candidates for president, no matter what party, no matter what their background is, should release their full financial information, including their tax returns, for more than just a year.
The American people -- look, this -- the presidency is a unique position. It's a position -- it's the only position in our government that has the authority to sign legislation into law.
We ought to have that kind of transparency. This president, of course, doesn't believe that. He promised it, and then reneged on that promise. But I think anyone who seeks the highest office of the land owes to the American people that sort of transparency.
BLITZER: One final question. I know you have got to run and vote, Congressman Kildee.
But assuming you get the president's tax returns over the past several years, are they going to be kept confidential? Will you release them publicly if there's something that is perhaps illegal or untoward? Will you make all of that available to the American public?
KILDEE: Well, I think that's all going to be determined by what the evaluation reveals.
But the purpose is to advise the chair of the committee on the policy matters that we're looking at. So we will wait until we receive those returns. And I'm sure there will be a pretty exhaustive evaluation of them before making any determinations about what the next step might be.
BLITZER: Congressman Kildee, thanks so much for joining us.
KILDEE: Thank you, Wolf.
BLITZER: All right, let's get some analysis on what we just heard, very dramatic developments.
Indeed, Kaitlan, you cover the White House for us. You know the president is very sensitive about this, doesn't want his tax returns released. He claims they're still under audit and it's only his own personal business.
KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Yes, the White House has been bracing for this very news ever since January. And now here it is.
So expect a legal fight to come out of this, because they are not going to take this lying down, based on what I have heard from several sources, as they have been preparing for this request to come their way.
The president has made clear he doesn't want his tax returns getting out, ever since the first presidential campaign, when he said he was under out did and he would release them after. And then, when he was in office, he said maybe I will release them when I'm out of office, saying that only reporters want to see these tax returns.
But what's going to be interesting about this is that the White House is going to try to fight this, but this isn't just a normal subpoena, like we have seen with these other committees in recent days. This is a little-known provision written in the tax law that is this part of this IRS policy.
So that is the question of whether or not they're going to be able to fight this. And you can guarantee that Pat Cipollone, the White House counsel, has been looking at this very thing.
BLITZER: David Swerdlick, how significant is this development right now?
DAVID SWERDLICK, CNN COMMENTATOR: I think it's significant, and for the reasons Kaitlan stated, that I expect the White House to fight this.
But as Representative Kildee said, scholars have said that, according to 26-USC-6103, that the chair of the House Ways and Means Committee or the chair of the Senate Finance Committee have the power to subpoena the president's tax records.
The White House will obviously fight this. They will probably say that it's not for a legitimate purpose, but that fight is going to be had now if the subpoena is being issued.
BLITZER: Yes, let me read from the code.
This is the Internal Revenue Code. The specific material on the release of the president's, anyone's tax returns, for that matter. "Disclosure to committees of Congress, Committee on Ways and Means, Committee on Finance and Joint Committee on Taxation, upon written request from the chairman of the committee on Ways and Means of the House of Representatives, the chairman of the Finance on Committee to Senate, or the chairman of the Joint Committee on Taxation, the secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with or otherwise identify, directly or indirectly, a particular taxpayer, shall be furnished to such committee only when sitting in closed executive session, unless such taxpayer otherwise consents in writing to such disclosure."
So, Susan, from a legal perspective, how strong is the Democrats' standing right now in getting the president's tax returns? SUSAN HENNESSEY, CNN LEGAL ANALYST: So, the law is absolutely crystal
clear on this point.
People have been waiting for this day. It's not a matter of sort of legal interpretation. This law, which is the provision of the -- the statutory provision of the federal tax code, that essentially says the IRS is not allowed to disclose taxes, any individual's tax return -- they have to keep them confidential -- includes a provision that essentially is an exception.
That provision is worded to say that, upon request, a letter -- it doesn't have to be a subpoena -- from these three -- the heads of these three committees, the head -- the secretary or his designee, in this case, the head of the IRS, shall provide those tax returns.
That means he is compelled to do so under federal law. So, this is not like the other fights over sorts of documents we've seen, areas in which the executive branch might be able to assert its own ability or prerogatives and say, we cannot allow the legislative branch to get this.
The law is very, very clear on this point. And if the secretary of the treasury or the head of the IRS declines to provide these tax returns, as requested, they will be in violation of federal law.
BLITZER: Here's what the Treasury Secretary, Steve Mnuchin, said under testimony when he was testifying before Congress on March 14. Listen to this.
(BEGIN VIDEO CLIP)
STEVEN MNUCHIN, U.S. TREASURY SECRETARY: Based upon the request, we will examine it and we will follow the law.
UNIDENTIFIED MALE: Thank you.
MNUCHIN: I would expect that we would -- I'm not aware of there's ever been a request for an elected official's tax return, but we will follow the law, and we will protect the president, as we would protect any individual taxpayer under their rights.
(END VIDEO CLIP)
BLITZER: So what do you think?
SABRINA SIDDIQUI, CNN ANALYST: Well, I think there's no question that the Trump administration is going to fight this effort by Democrats to obtain the president's tax returns. And it's probably going to tee up what will be yet another protracted legal battle.
It's important to remember that then candidate Trump broke with what was a nearly 40-year precedent by refusing during the 2016 campaign to release his tax returns, as had been the tradition for all major party presidential candidates. Democrats say, though, that they have waited in terms of seeking his
tax returns until they built the actual legal framework to do so. And you did see the president's former personal attorney Michael Cohen testify on Capitol Hill that the president had inflated his assets to insurance companies and banks.
That was in many ways seen as one of the avenues or approaches that Democrats are going to take in trying to obtain the president's tax returns. And they're also interested, of course, in his business dealings overseas, both in Moscow and whether that relates to the Russia investigation, as well as whether there are broader conflicts of interest with respect to this administration and foreign government.
COLLINS: Well, and that's the question here. People are going to say, why do people want to see his tax returns so badly?
Dem -- or Republicans will say that it's because Democrats want to embarrass the president. But I think an overarching fact has been, not only from oversight, but a lot of people have said they want to know because this wasn't just your average president.
This is someone who before he took office was in charge of this sprawling multibillion-dollar company. And they want to know if any of those decisions while he was running that company have affected decisions that he has made as president.
So that is why they want to see this. But it's interesting. This says they don't only want to see his tax returns. They want to see filings related to his businesses. I think that is what's going to be the most sensitive for the president, because, over the last few weeks, ever since the end of the Mueller investigation, you have seen him complaining not only in front of the cameras, but also privately, saying that the Democrats are doing too much.
They're trying to essentially relitigate the Russia investigation, because they didn't get what they wanted there, so now they want to go after every other -- every other thing related to the president.
And that's the message you're going to expect to see from the White House coming out of this from a messaging standpoint, not just from what is likely a big court battle.
BLITZER: Because, as you know, Kaitlan, the suspicion over the years, as people have asked to see Donald Trump's tax returns, is that they want to know, how much tax did he actually pay, how much income did he actually have?
BLITZER: What were his charitable contributions? How much did he give to charity and stuff like that?
COLLINS: And that's two key things here, that these documents could reveal what the president has said and whether or not he's been truthful, because they say they also want to know if no tax -- if no return was filed one year, they want to see that too.
But, also, they want to know if the president was under audit and how long he was under audit, because, for such a long period of time, that was the president's excuse for why he didn't release these tax returns.
BLITZER: And as -- you have read the letter, Susan. There's all sorts of holding companies that the president is affiliated with, not necessarily the Trump Organization, but all these other holding -- the Donald J. Trump Revocable Trust, DJT Holdings, DJT Holdings Managing Member, and all these others, that they specifically want the tax returns for that.
So this is a very, very good careful document. They have -- they have obviously been very thoughtful about how to tailor it as narrowly as possible. This is not a fishing expedition. This is not going out there to sort of see as much information about Donald Trump as they could possibly get.
This is the Ways and Means Committee saying, hey, as legislatures, part of our constitutional prerogatives here are that we are -- we get can make legislation. Inherent within that is the ability to get information necessary to inform our legislative policy.
So this is the Ways and Means saying, we're considering passing laws potentially about how presidents' tax returns should be handled. And so what we're asking is not for every information about what -- whether or not Donald Trump has paid taxes, although that might be a nice side benefit. We're asking for this information because we need to -- we are considering passing laws.
And so they really are being very, very careful in order to place themselves on the strongest possible legal standing.
SWERDLICK: Right. It's not a fishing expedition, as you say, because it's part of Congress' oversight power.
But I expect the White House and Republicans to call it a fishing expedition, and I expect Democrats to respond that this is why presidential candidates for decades have just released their tax returns, to allay the concerns of Congress and the American people.
BLITZER: The president has said repeatedly he can't do it because he's under audit.
But remember Michael Cohen, his longtime personal lawyer and fixer, he said publicly when he was testifying, he said he didn't think there really was an audit. How is that going to fit into this?
SWERDLICK: Again, I think they will probably pursue that legal line.
At a point last year, a law professor from the University of Virginia, George Yin, who's a tax expert, wrote a piece for "The Washington Post" "Outlook" section, my section, where he said, no, the Congress has the power to get the tax returns of the president, even if it's -- or any citizen, even if those tax returns are under audit. Congress has that oversight authority, the House Ways and Means Committee, the Senate Finance Committee.
BLITZER: Section 6103 of the Internal Revenue Code.
The president has been at an event over at the White House. And reporters have been inside there. There's pool reporters. Listen to this.
(BEGIN VIDEO CLIP)
TRUMP: The rest of the term, I would say not as good, but that's OK. But thank you all very much. I appreciate your being here. Thank you.
QUESTION: Mr. President, let me ask you, are you concerned that the Chinese may be trying to conduct some espionage against the United States by spying on you at Mar-a-Lago?
TRUMP: Well, I saw the story. I haven't spoken anybody about it, other than I had a brief -- a brief meeting, gave me a little bit of information.
No, I'm not concerned at all. I have -- we have very good control. We have extremely good -- and it's getting better in cyber. Frankly, what we're doing with cyber is -- is a story in itself.
No, I think that was just a fluke situation. And I think that the person sitting at the front desk did a very good job, to be honest with you. I think that particular woman did a very, very good job. She was able to see things that other people were not.
But, no, I think it's just a fluke.
QUESTION: (OFF-MIKE) in terms of security?
TRUMP: Well, that's really Secret Service.
Secret Service is fantastic. These are fantastic people. And the end result is, it was good. I think probably we will see what happened, where she's from, who she is. But the result is, they were able to get her. And she's now suffering the consequences of whatever it is she had in mind.
But I would say, I could not be happier with Secret Service. Secret Services done a fantastic job from day one. Very happy with them.
QUESTION: Can you explain what relationship you might have with Cindy Yang? Do you know her?
TRUMP: No, I don't. I don't know who she is. Who is that? QUESTION: She's this woman who was pictured with you at your Super
TRUMP: Oh, I see. She's the one that came to the party. I don't know anything about her.
But I take a lot of pictures with people. That looked like a selfie or something. And I do that a lot. I do that sometimes depending on where I -- when I -- where I am or what I'm doing, hundreds of times a day.
But, no, I don't know anything about her.
QUESTION: Mr. President, the chairman of the chairman of the Democratic House Ways and Means Committee moments ago asked the IRS for six years of your tax returns. I want to get your...
TRUMP: Is that all?
QUESTION: That's all.
TRUMP: Oh. Usually, it's 10. So I guess they're giving up.
No, I'm -- we're under audit, despite what people said, and we're working that out, as I'm always under audit, it seems. But I have been under audit for many years, because the numbers are big. And I guess, when you have a name, you are audited.
But until such time as I'm not under audit, I would not be inclined to do that. Thank you.
OK? Thank you all very much. Appreciate it.
QUESTION: (OFF-MIKE) security clearance for Jared Kushner or Ivanka?
TRUMP: Thank you very much.
UNIDENTIFIED FEMALE: Make your way out. We're finished.
Press, let's go. Keep moving.
TRUMP: Thank you.
QUESTION: Mr. Biden, sir?
TRUMP: I wish him luck. I do wish him luck.
QUESTION: (OFF-MIKE) ways of interacting? Do you have any thoughts on that? Should he apologize for his conduct?
TRUMP: No. He's going to make his own decisions. He's very capable of making a decision, I assume.
Thank you very much, everybody.
(END VIDEO CLIP)
BLITZER: All right, so there you see the president responding to this letter that the White House has just received from the chairman of the House Ways and Means Committee, Richard Neal, asking for six years of the president's personal tax returns and the tax returns of some of his businesses as well.
The president saying he's under audit, he's always under audit. He's not -- he said, "I'm not inclined to do that," in other words, release his tax returns.
Abby Phillip is our White House correspondent.
Abby, you heard the president specifically react to this latest development, this information first reported by CNN.
PHILLIP: That's right, Wolf.
The president giving a measured response to all of this, and dismissing it, really, kind of saying, is that all? It seems like the Democrats have given up on seeking his tax returns, because he said they didn't seek 10 years. They're only seeking six.
But it struck me that the President suggested that he would not be inclined to give them those taxes. But it may not be he's decisions. It's probably not going to be. The Chairman, Neal, is citing a part of the tax code. This would a prompt something of a legal fight and the President may not have much of a say in that.
But I think we can expect as time goes on for the President to weigh in further, this was clearly a news to him as he sat in that meeting with his military leaders and the President we know is concerned about the democrats overreaching in his view, but so far this response seems to indicate that the President is sticking with his story, that he's under audit, that he's under audit because his tax returns are so large, and that he's not inclined to turn those taxes over. But, again, Wolf, this is not going to be his decision. This is something that might be settled in the courts.
BLITZER: We'll see what happens at that front. You know, Kaitlan, you've been listening closely, you also cover the White House for us. And as Abby said, she says, he's got big numbers, meaning the numbers in his tax returns are big and he's also well known and always under audit. He still under audit right now and said, I am not inclined to do that, in other words, comply with the request from the House Ways and Means Committee Chairman to release his tax returns. COLLINS: But as we noted, they may not have this option. It's still pretty unclear. And though they give a deadline here of April the 10th, which is just a week or so, this could be something that goes on for months. This could be a big fight. Because though the President seemed to downplay it there, though he seemed annoyed when they said they wanted six years of his tax returns, and he said, oh, is that's all? They don't want ten years of my tax returns.
But the President insisting he's still under audit. That's what the President said back during the campaign during those debates that he was under audit and he would release his tax returns once he wasn't under audit. That is what we heard from White House officials for months
But then the President did an interview that was interesting, where he didn't mention the audit thing, instead, when he was asked about his tax returns, he said maybe I'll release them when I'm out of office. Hope Hicks still the time at the White House, was in the room and said, because you're under audit. She was the one who kind of seemed to push that notion.
But, of course, as we've got a note in here, if this does succeed and do get the President's tax returns we're going to find out if he was really under audit all this time. Because it says here, this is a key part, not only do they want to know if such return was under any type of examination or audit but they also want to know the length of that audit and how long that was, and which years it applied to, what the reason was for the audit. There's so much about this audit that we'll find out about and whether or not the President is telling the truth, if they succeed here, which there's a chance that they could.
BLITZER: You know, I want to just play a clip, Sabrina, and I want you to react to this. This is Michael Cohen, Michael Cohen in February, when he was testifying before the House Oversight Committee and he said this.
(BEGIN VIDEO CLIP)
REP. JIMMY GOMEZ (D), C.A.: Can you give us any insight into what the real reason is that the President has refused to release his tax returns?
MICHAEL COHEN, FORMER DONALD TRUMP LAWYER: Statements that he had said to me is that what he didn't want was to have an entire group of think tanks that are tax experts run through his tax return and start ripping it to pieces and then he'll end up in an audit and he'll ultimately have taxable consequences, penalties and so on.
GOMEZ: So that's an interesting point, that basically he said he didn't want to release his tax returns because he might end up in an audit. So could you presume from that statement that he wasn't under audit?
COHEN: I presume that he is not under audit.
(END VIDEO CLIP) BLITZER: Well, that's a direct contradiction to what we just heard from the President.
SIDDIQUI: And if anyone would know if the President was, in fact, under audit, it would be Michael Cohen who was his personal fixer. And in that same testimony, Michael Cohen implicated the President in both insurance fraud and tax fraud.
Now, those are allegations but he made them under oath. I think that you are going to see democrats really try and zero in on, and this is Kaitlan's, point earlier, what is it tells us about the President's motivations as he makes decisions, not just on policy but also with respect to his dealings with foreign government.
The reason why he is, in fact, different from his predecessors is because he did run this business where he had all of these financial interests in other foreign governments and there is a question as to whether or not the President is violating the emoluments clause and as well as whether or not he and his family have personally benefited from the tax bill that he himself signed into law. Those are just some of the questions democrats say they are hoping to answer by seeking more information from his tax return.
BLITZER: And just reminder, our viewers says is that President is going back for decades and decades and they've all released their tax returns.
HENNESSEY: Exactly, and this has been a long standing norm. Now, one thing to keep in mind whenever President Trump said, he was surprised they weren't going back ten years. Often times, people think about ten year as being -- because that's the period of the time when the IRS can reach back and actually collect backs taxes. Six years however is the statute of limitation for criminally filing a false tax return, six years from the date of that filing.
And so that's why it is potentially significant that they aren't looking for the ten-year but looking for six years of returns.
BLITZER: And when the President said the democrats are sort of -- he was laughing a bit. The democrats are giving up on ten. They only want six years but that six-year number is very specific.
HENNESSEY: It's independently significant. Maybe it's just a coincident. Maybe they have other reasons for limiting but that six- year mark is relevant more -- it's typically for criminal purposes as opposed to that collection of back tax.
BLITZER: What do you think, David, the way the President handled that question?
SWERDLICK: Well, I think he's probably still reaching for a better answer because this is breaking news. But to Susan's point, even though it's only five years, there's the statutory six year, there's also this aspect of it, which is that those -- if the years are 2013 to 2018 that are being requested, part of that time is when the President was a declared presidential candidate and not just a private businessman.
Look, Wolf, this -- stepping back for a second, this was a 3-0 fastball the President and his people should have seen coming. Every President, as you said, has -- every presidential candidate has given the public their tax returns for this exact reason. People want to put the person in charge who they feel like they know where their money comes from and what their interests are. President Trump avoided that in 2016. Congress is using its oversight power now to say, not so fast.
COLLINS: And one thing I think we should note is the President has been complaining about all the oversight, all of the requests, the 81 requests, everything that's been happening. Money is one of the most sensitive topics to this President. What you saw when The New York Times published that massive investigation into not only President Trump's tax practices but also his father's and his family's tax practices.
The President not only responded but he also dictated a statement to his press secretary this very long statement saying it was a boring and old story but not necessarily denying what was in that large investigation. That's because the President pays attention when people are talking about his money. So he may have downplayed this there because the reporters seemed to inform the President during that meeting with military leaders that this is happening, but I guarantee you this is not going to be something that sits well with the President behind the scenes.
BLITZER: You know, it's interesting that in this letter, they want the tax returns from the President from tax year 2013 through 2018. 2018 is this past year. He got until April 15th to file. We have no idea if the President is going to seek an extension for 2018 or if he's going to file to meet the April 15th deadline.
Mostly -- most people with that kind of income, they seek an extension for obvious reasons. But certainly the 2013,'14, '15, '16 and '17, those years, I'm sure he has already filed and we'll see what he does.
SIDDIQUI: We'll see what he does. But I do think that there is going to be a legal fight that could take months or it could take even longer than that. We really don't know what that window might look like.
But what this all does is it reinforces, especially as the President tries to cast this as a post-Mueller era and you will hear him and republicans push back and say this is just democrats trying to go after the President, and you heard him call it Presidential harassment, that the President's legal perils are, in fact far, from over, that there are many different lines of inquiry that democrats believe are worth pursuing.
And, you know, there are also multiple other investigates that are ongoing at the federal level. You have the Southern District of New York, for example, that is looking into the President's inaugural committee and whether high dollar donors were part of a pay to play scheme for access to the incoming administration.
So I think this is just one of the major fronts that democrats believe could tell us a lot more, not just about the President's dealings but also about what really impacts his decision-making in office.
BLITZER: A really, really sensitive subject for the President of the United States, the release, potential release of his tax returns for these six year, maybe five years, assuming he is not going to meet the April 15th deadline for 2018.
Everybody, stand by. One of the things the President just addressed in that little Q&A with reporters is the weekend security breach at his resort in Palm Beach, Florida, Mar-a-Lago. CNN's Kaylee Hartung is just outside that resort. She's in West Palm Beach for us. So, Kaylee, what more are you learning?
KAYLEE HARTUNG, CNN CORRESPONDENT: Well, Wolf, we just heard the President say he's not concerned. He thought that this incident was a fluke. But we are hearing the Secret Service, the FBI and senate democrats strike a very different tone as they're all expressing grave concern for the potential security vulnerability exposed at Mar-a-Lago over the weekend.
The FBI and Secret Service are working together now. We're learning on an investigation into whether or not a Chinese spy was able to lie her way past secret service and past Mar-a-Lago security before being taken into custody in the club's reception area. Senate Democrats writing in a letter to the FBI Director tonight saying, this situation has serious national security implications.
Tonight, the FBI is investigating the incident at Mar-a-Lago looking into the possibility of a security breach was an attempt at espionage. A U.S. official tells CNN. The Secret Service continues to lead the investigation but the officials said FBI involvement is protocol when dealing with foreign nationals or the possibility of cyber security or counterintelligence issues.
The arrest of a Chinese National, Yujing Zhang, shining fresh light on the security gap at President Trump's Palm Beach retreat access. Zhang managed to talk her way past security checkpoints illegally entering the highly secure property on a day the President was saying there. A Secret Service official telling CNN, access remains an issue but added that she was being monitored the entire time.
The President has dubbed Mar-a-Lago his winter White House. But unlike in Washington, the Secret Service is not directly in control over who has access to the club. It is up to Mar-a-Lago management to determine which guests are allowed on the premises.
JONATHAN WACKROW, FORMER U.S. SECRET SERVICE AGENT: The security protocols are concentric rings of protection that are around the protectee. What this individual did is they went through two checkpoint, the most outer rings. But the security structure works. It's a layered approach to access control. HARTUNG: A spokesman for the Chinese Foreign Ministry tells CNN they are not aware of the case and the actions detailed in a criminal complaint appear to show a hasty ever changing story. According to the complaint, when Zhang first encountered Secret Service she said she was there to go to the pool presenting two Chinese passports as identification. A pool manager initially cleared her, believing she could be the daughter of a club member who shares her last name.
After arriving in the lobby asked by the club's receptionist why she was at Mar-a-Lago, Zhang responded she was there for a United Nations Chinese-American Association event which the receptionist knew to be false. Secret Service again questioned Zhang about her reasoning for being there, which she then said was to attend a United Nations Friendship event between China and the United States, presenting what she said was an invitation written in Chinese.
Zhang, was detained offsite where agents recovered four cell phones, a laptop, an external hard drive and a thumb drive. A forensic examination showed the thumb drive contained malicious malware. No swimming attire was found in her possession.
Democratic Senate leaders demanding a full accounting sending this letter to FBI Director Christopher Wray calling for security assessments at Mar-a-Lago. Senators Chuck Schumer, Dianne Feinstein and Mark Warner writing, the apparent ease with which Miss Zhang gained access to the facility during the President weekend visit raises concerns about the system for screening visitors. These potential vulnerabilities have serious national security implications. While lawmakers in Washington appeal for answers, some experts are urging caution.
MIKE ROGERS, CNN NATIONAL SECURITY COMMENTATOR: It just doesn't feel like a spy effort to me given how sloppy the cover story was, you know, her story changed. She didn't seem trained, she kind of fest up half way through this. She wasn't supposed to be there. That is not a typical spy operation. It's just not.
HARTUNG: Zhang will appear in federal court on Monday and she remains in custody after a federal prosecutor called her an extreme risk of flight. Through a translator, she told the federal judge that she's only been in the U.S. for a short time with her family and she has no ties to this country. Wolf, she'll be back in court next Monday. And in the meantime, that FBI and Secret Service investigation will continue.
BLITZER: In the meantime, she's in jail awaiting the next development. All right, Kaylee, thank you so much.
Susan Hennessey used to work at the National Security Agency. How significant is what we've now learned?
HENNESSEY: Yes. So this is not a fluke. It is not a surprise but it's something that the President has been warned about repeatedly, the potential risk of Mar-a-Lago. Whether or not this individual is actually connected to any foreign intelligence service, we don't know. What we do know for sure is that every foreign intelligence service in the world is targeting Mar-a-Lago as a potential vector to get information about the President.
Now, this person got caught. There are almost certainly many, many others who have not gotten caught. And keep in mind why this person got caught. She got caught because she hadn't actually paid for access to Mar-a-Lago.
Now, had she been a member, had she actually paid to attend some kind of event, she could have waltzed right through the front door with that USB with all those files [ph]. So this is a crystal clear illustration of the threat, a threat to national security that comes when the President of the United States allows individuals to pay him money personally for access.
BLITZER: Okay. You've spent some time in Mar-a-Lago.
HENNESSEY: A lot of time.
BLITZER: You've covered the President down there. He's gone down there many times since taking office. He plays golf. He drives out of Mar-a-Lago but he stays there and the First Lady was there when this woman walked right in.
HENNESSEY: Yes, they were both technically in Palm Beach, I think. I believe the First Lady was actually on the premises. The President had actually gone to his golfing course for several hours, so he wasn't there when this woman got through Secret Service. But what this shows you is that Secret Service checks people when they come through a checkpoint before going through Mar-a-Lago. They see if your name is on a list.
Clearly, there was confusion about whether or not she was related to someone actually a member down there. But they essentially just checked what's on you, what you've got, and then they let you go through. Because if you're on the list, the Secret Service isn't in charge of that list as they are here at the White House with who is coming in in Washington.
What also happens at Mar-a-Lago is that the President has dinners with world leaders when he's there several times. He's often seen out on the patio.
[18:45:00] He's not somewhere far away from the members. He's right there in the middle of them. He has a regular table and actually last weekend when -- in recent weekends when the president was there, his family has been there too. So, it's not just some private club where the president is off in a corner by himself. He's not isolated at all in any sense.
I talked to a few White House officials if they were surprised about this because they also spend a lot of time down there. They said they didn't -- they weren't that surprised that a woman was able to get through so easily because it's essentially the club dictating whether or not someone comes in and if you know someone who is a member it's not that hard to get in.
BLITZER: Yes, not hard at all.
All right. Everybody, stand by.
There's more news, more breaking news we're following. I want to go to our congressional correspondent Phil Mattingly.
Phil, Democrats are pushing forward with their demand for the full release of the Mueller report unredacted and they're now armed and ready with subpoenas.
PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, that's right, Wolf. A simmering battle over the future of the Mueller report between House Democrats and the Justice Department escalated to a new level this morning.
When the House Judiciary Committee and its chairman, Jerry Nadler, voted to authorize his ability to give a subpoena to the Justice Department, for the full report, the unredacted report and all of the underlying documents, basically what Democrats are saying right now they want to have the tool, they want to have the weapon to go after that report if Attorney General Bill Barr is not willing to turn over the unredacted version.
At this point, given the letters that Bill Barr sent to Capitol Hill, it doesn't appear that he is. He has talked about making redactions for grand jury material, making redactions for national security material, and for perhaps third person peripheral material related to other individuals.
What Chairman Nadler says he wants all of it. Take a listen.
(BEGIN VIDEO CLIP)
REP. JERRY NADLER (D-NY), JUDICIARY CHAIRMAN: I will give him time to change his mind. But if we cannot reach an accommodation, then we will have no choice but to issue subpoenas for these materials. And if the department still refuses, then it should be up to a judge, not the president and not his political appointee.
REP. DOUG COLLINS (R-GA), RANKING MEMBER, JUDICIARY COMMITTEE: Reminds me of the old guys in my hometown when they wanted to go fishing and nothing was biting. They take a big fish trip and go out, nothing was biting. And one day, this old guy got tired of it and instead of catching anything the way, he should he reaches in his back pocket and puts out a piece of dynamite and throws knit the pond. I can't find anything, so I'm just going to blow up everything and maybe something will come to the top.
(END VIDEO CLIP)
MATTINGLY: And, Wolf, that was Congressman Doug Collins, the top Republican on the panel really echoing what a lot of Republicans have said throughout the course of the day, and to some degree what the Justice Department has said. They made clear they want to go through a methodical approach to scrubbing that report. Attorney General Barr said he's willing to testify, suggesting May 1st or 2nd and that the report would be available to Congress sometime in the middle of the month.
But the difference here is those redactions. The difference is that grand jury material. And the difference here is Democrats have made clear they are willing to serve that subpoena to the Justice Department and beyond that they are willing to have a fight in the courts if the Justice Department does not comply. That is big question going forward, there's two, when and if the Justice Department gets served the subpoena and if they do and choose not to comply, how far this moves up the line on the courts.
The expectation right here right now on Capitol Hill is, Wolf, this could go all the way to the Supreme Court in a months' long fight over the full Mueller report.
BLITZER: Could be a huge legal battle. The Oversight Committee chairman, as you know, planning the subpoena as Democrats go after the president's finances. What else have we learned ask we've learned that they also want his tax returns?
MATTINGLY: They also want his tax returns. You've seen over the course of just the last 12 hours is probably the best window into the power and kind of the force the Democrats are bringing to the table in the House and their new majority.
They obviously have the Judiciary Committee authorizing the subpoena for the Mueller report. You have the House Oversight Committee, Elijah Cummings is the chairman of that committee, telling reporters today that he is going to subpoena an accounting firm that was producing Donald Trump's income statements related to something that Michael Cohen testified about inflating perhaps the worth, the value of Donald Trump's holdings, his holdings in real estate, his efforts to purchase the Buffalo Bills, and, you also have, as Lauren reported in your show first, the Ways and Means Committee going after the tax returns.
All this underscores something we've been talking about the last couple of months. Democrats have been preparing, Democrats have been laying the groundwork to deploy pretty much every weapon they have at their disposal to investigate a president they believe has done wrong. Now, Republicans have made clear, they believe these investigates are overreach and believe these investigations are attacks on the president, but Democrats when they ran to take the majority in 2018 said they wanted to serve as a check on the president and in their view, using these materials, using these tool, that's exactly what they're trying to do.
BLITZER: They certainly are.
Phil Mattingly up on Capitol Hill, thanks very much.
David Swerdlick, you know, elections have consequences as we like to say. The Democrats have the majority in the House of Representatives. They're in charge of oversight and can do what they want. SWERDLICK: Wolf, right. I think Phil's report something spot on
there. On the one hand, you have the first three months of this congress, Democrats have been preparing for this, and on the other side you have Republicans sort of girding for a legal fight.
Just a couple of points, last month the house voted 420-0 that the full report should be released.
[18:50:03] So, if you're a Republican now arguing that the report shouldn't be released, why wasn't that the case when the House voted last month? The second point I think and this is the hard part I think for imagine the reverse case what have the Democrats argue.
I think imagine going before the American people saying we spent the taxpayer money for a two-year investigation to find out whether or not anything untoward was done by the president or members of the inner circle. But now that we've gotten them, we've released a tiny four- page summary saying nothing to see here, you the American people, the subscriber, you can't have the information. It's not in your package. That doesn't make sense.
BLITZER: Instead of cutting back on investigations of the president, Sabrina, they're escalating. They're really dramatically unfolding.
SIDDIQUI: And Democrats made it clear when they running in the 2018 midterms that part of the platform would be restoring oversight of the executive branch. And that's precisely what you see them doing now.
I think to David's point you see them refusing to back away from seeking the full release of the Mueller report. I think in terms of Chairman Jerry Nadler and the timing of the potential subpoena, some of that will be contingent upon what level of transparency and cooperation Democrats believe that they see from the Justice Department.
One thing that's crystal clear is that Democrats simply do not trust Attorney General William Barr as he is now scrubbing the Mueller report of grand jury information, classified information that could -- any don't want to risk jeopardizes assets and sensitive material. The Democrats believe that a lot of his motivations are instead rooted in trying to protect the president. So this is the beginning of what's going to be a long legal fight.
BLITZER: You covered the president, Kaitlan, you know how irritated he's going to be by all this.
COLLINS: Well, he is, because he has been waiting in his mind for so long for this investigation to be over and clear him of collusion as he said for several years -- yes, years he had not colluded with Russia and he didn't know about anyone on his campaign that had done it. And then the investigation ends and he still feels he is bombarded with all this and Democrats wanting to see the full report.
BLITZER: Everybody, stick around. More news we are following.
Defendants, including two prominent actresses head to court hearings on the college entrance cheating scandal. New information coming in.
[18:56:49] BLITZER: Tonight, the most famous defendants in the college cheating scandal have wrapped up a court appearance in Boston. Actresses Lori Loughlin and Felicity Huffman facing a judge and prosecutors who want them to do jail time.
Our National Correspondent, Brynn Gingras is covering for us. She's in Boston.
Brynn, this is not the kind of public appearances these celebrities are used to. Tell us what happened.
BRYNN GINGRAS, CNN NATIONAL CORRESPONDENT: Yes, Wolf, the appearances, arrivals of these two actresses coming to court different from each other. Felicity Huffman, very understated, coming with a family member holding his hand. Lori Loughlin on the other hand, though, appearing with the full security team, waving to her fans before she went before a judge, she went over and shook the hands of prosecutors.
Both women, though, facing a serious federal charge and could face time in prison.
GINGRAS (voice-over): They have become the faces of the largest college admissions scheme ever uncovered in the United States. Felicity Huffman, Lori Loughlin walked into a Boston courthouse, each facing a federal fraud charge.
Actress Lori Loughlin (ph) smiling and greeting onlookers on her way in much like how she was seen taking pictures with fans and signing autographs after arriving in Boston Tuesday.
A law enforcement official says prosecutors will ask for six months to nearly two years in prison for the actresses and dozens of other parents accused in the scam. Neither actress has publicly addressed the allegations against them, and it was no different in court. Loughlin and Huffman said only a few words, attorneys doing most of the talking. Neither actress had to enter a plea.
The government says it has e-mails and phone recordings to prove Loughlin and her husband, fashion designer Massimo Giannulli paid $500,000 in bribe money to get in their daughters into USC as crew recruits even though neither girl rode.
OLIVIA JADE, LORI LOUGHLIN'S DAUGHTER: I am talking to my deans and everyone, and hope that I can try and balance it all. But I do want the experience of like game days, partying. I don't care about school.
GINGRAS: Since the scandal broke, Loughlin's daughter YouTube star Olivia Jade has been dropped from partnerships with major companies.
LORI LOUGHLIN, ACTRESS: I know.
GINGRAS: Loughlin also lost acting jobs.
Huffman allegedly paid $15,000 to alter one of had her daughter's test scores. Court documents show she and her husband, actor William H. Macy, considered doing the same for their younger daughter but never went through with the plan. Macy is not charged in any case.
REPORTER: The charges against you.
GINGRAS: The scheme's mastermind, Rick Singer, pleaded guilty last month and continues to cooperate with the ongoing investigation. The government says it wire taps Singer for months and has more evidence in this case. More than 30 other parents have been charged in the scam, and one law enforcement source tells CNN as many as 10 parents may strike deals with the government. No one has yet.
A recent court filing shows though, one parent intends to plead guilty by the end of this month.
GINGRAS: And the deadline to add more charges by the government is approaching. Two parents have actually seen an additional money laundering charge added to their case and the source tells us more arrests could be coming soon as well, including possibly of a student who may have knowingly participated in this scam -- Wolf.
BLITZER: Yes, the scandal continues to expand.
Brynn Gingras in Boston, thanks for that report.
And to our viewers, thanks very much for watching. You can follow me on Twitter and Instagram @wolfblitzer. You can always tweet the show @CNNsitroom.
"ERIN BURNETT OUTFRONT" starts right now.