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Mulvaney Comments on Trump's Taxes; Netanyahu Vows to Annex West Bank; Kidnapped American at U.S. Embassy in Uganda; Texas Tech vs. Virginia For National Title Tonight. Aired 9:30-10a ET

Aired April 8, 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] POPPY HARLOW, CNN ANCHOR: Quote, a political stunt, vowing Democrats will never see them.

Phil Mattingly is with us on The Hill.

All right, so, it's a political fight, but, I mean, there's also a law here, Phil. I mean there's also this sort of obscure IRS code that hasn't really been used much or at all in the past. So where does this go?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, look, I think that's why you see Democrats feel confident in their position right now. They believe that it is in statute. They believe that this is something the administration doesn't really have a choice over.

In terms of what actually comes next, look, I don't think I'm going to break any news here when I tell you that Democrats here on Capitol Hill aren't expecting the administration to comply at any point in the near term with their request. A request sent last week to the IRS. There's a couple steps forward here that I think you're going to see over the next couple of days, Poppy, that are important.

First and foremost, how the IRS or Treasury Department, which oversees the IRS, actually responds to House Ways and Means Committee Chairman Richard Neal and his request. Now, we've heard from the president's personal lawyers who sent a letter to the Treasury Department making very clear their posture on this. You've seen from administration officials like Mick Mulvaney, the president himself, their posture on this.

The question in terms of what comes next will start with that response from the administration officially and then whatever Richard Neal, the chairman of the Ways and Means Committee does next. Now, the expectation is, you're not going to see a lawsuit or a subpoena this week. they will likely try to create a paper trail for any future legal action, perhaps another follow-up letter if nothing is complied with.

But keep in mind what the chairman can do later on. There is subpoena possibility. Although, Poppy, as you note, this is law and there are some thinking that they don't need to send a subpoena. Instead, they would go straight to a lawsuit. I think the big question as this week plays out is, again, it's almost

-- obviously the political football, but also the positioning as well. Knowing that this fight is only going to escalate, knowing that this fight is likely to end up in the courts, how both sides position themselves could end up being very important to whether or not the committee and the members of the committee actually ever get a chance to look at, not just the president's tax, not just the eight business entities that they also asked for, but also the supporting documents that the committee requested as well. It's a large request. It's a very important request for Democrats. Whether or not they're going to get it, well, that's still obviously very much in the air, Poppy.

HARLOW: It is indeed. Phil, thanks so much.

Jim.

JIM SCIUTTO, CNN ANCHOR: Let's discuss now with Mark Everson. He's a former commissioner of the IRS.

Mr. Everson, thanks very much for taking the time this morning.

MARK EVERSON, FORMER IRS COMMISSIONER: Thank you, sir.

SCIUTTO: So first on the point of, what is the law? You say that the law is clear, that the president's tax returns should be provided and that privacy concerns that the president has raised and others not relevant to this question. Explain that to our viewers?

EVERSON: Yes. I do think -- I'm on record, Jim, as saying that the president should have disclosed his returns when he sought the office in 2016. Your privacy concerns, which are legitimate for taxpayers, I think do give way when you seek the office of the presidency or hold the office.

But the law here is clear. It says simply that if the chairman of Ways and Means asks for a return, he or she gets it. That's it.

SCIUTTO: All right.

So, you know, the administration makes a political argument, one they've made for a couple of years now, which this was, quote, litigated in the election. In other words, because he was elected, therefore, Americans don't care about his tax returns. That's a political argument though.

But legally then, on what basis does the president and do his supporters, the administration, fight the law here?

EVERSON: Well, I don't think the law's on their side. And they can't have it both ways.

Look, we just went through this exercise where Congress clearly said, Mr. President, we're not giving you more money for the border wall, and then the president said, wait a minute, boys, there's a little statute here that says I can take money from the Defense Department. So there he's saying I'm following the law as written, rather than the congressional intent. Here you have congressional intent in the form of one chamber of the legislative branch and you clearly have a law that says they ask, they get.

That said, Jim, I don't like the request, the way the chairman's written it. Clearly they want the returns so that they can get to the broader questions of conflicts of interest. And I think they were entitled to say, we want them because of our oversight responsibility to the executive branch. But that's not what they've done here.

SCIUTTO: The other argument, of course, is this audit argument which Michael Cohen, under oath, testified he doesn't believe the president's actually under audit. In reality, he doesn't want taxes exposed, poured over and he may face some tax penalties here.

All presidents are under audit for the first year of their presidency. I mean a basic question is, can't we find out if the president's actually under audit?

EVERSON: He's been under audit for years. During the campaign in 2016 his attorneys from Morgan and Lewis wrote a letter saying that he's been under continuous audit since 2002. And, by the way, that's totally -- that's totally --

SCIUTTO: Anybody can be under audit. I mean anybody can be -- is that a relevant excuse to not release your returns as elected president of the United States?

EVERSON: Well, people -- people are saying, yes, he's been under audit. I just say, for somebody with withholdings that are as complex as his are, he's been under audit. He just doesn't want the information out there. That's true.

SCIUTTO: So you know other moves that he's making here. He appointed a general counsel of the IRS who will interpret law on this, someone who worked with his own tax attorneys previously at the Trump Organization. He picked a commissioner of the IRS who publicly was against the president releasing his tax returns before he was chosen.

[09:35:06] You heard the president's allies saying that Democrats are politicizing taxes here. Based on these moves, are you concerned that the president is politicizing the IRS to protect himself?

EVERSON: Not as to the appointment of those two people. Redick (ph) has an excellent reputation and I worked with Michael Desmond (ph). He's a totally straight shooter. Totally straight shooter. And, frankly, they will not be calls the shots on this, Jim. That will take place over at Justice. All that Michael Desmond will be doing is developing the history.

This piece of the tax code has been used quite a bit, not for this purpose, but Ways and Means and Finance routinely ask for returns when they're looking at areas where the law needs to be changed or they want to know, how has the IRS done its job. My concern here is that that's not the purpose of why the chairman's asking for the returns. So it muddies the waters and it potentially compromises the independence of the IRS. SCIUTTO: Right. And it's good to hear, as you say, that the folks in

these positions are honorable civil servants. Those are the folks who are doing the work of government every day. That should be -- that should give some confidence to folks at home.

Final question, just -- just quickly, can the president drag this out? Because it seems part of the strategy is drag it out through 2020, keep it in the courts until then so folks don't have this information before them when they have a chance to vote again?

EVERSON: I -- I'm not going to answer that one, Jim.

SCIUTTO: Hard to predict is what you're saying, but it's possible, right? I mean you fight it long enough, that's a strategy on a whole host of these questions.

EVERSON: That's obviously the intent.

SCIUTTO: All right. Well, Mark Everson, thanks very much. Good to -- good to have you on the show.

EVERSON: Thank you, sir.

HARLOW: Yes, really interesting.

All right, so ahead for us, Israeli Prime Minister Benjamin Netanyahu making a last-minute vow as he faces a tough re-election bid in the election tomorrow. How big of an about face is this when it comes to the West Bank, and what does it mean for prospects for peace in the region? We'll dive into that ahead.

(COMMERCIAL BREAK)

[09:41:28] HARLOW: A really significant vote in Israel tomorrow as Prime Minister Benjamin Netanyahu fights to stay in office. He is hoping, it seems, that a last-minute move may give him an edge, promising what would essentially be the annexation of the West Bank, talking about settlements there and also isolated settlements. This in a bid to win re-election, Jim.

SCIUTTO: Yes, illegal under international law. His main challenger, Benny Gantz, criticizing the comments as, in his words, irresponsible. But this race may be the toughest of Netanyahu's political career considering the multiple corruption investigations against him as well as Gantz's popularity. And Netanyahu seems to be going for any advantage he can get.

Let's speak now to Oren Liebermann. He is in Jerusalem.

So this is -- it's quite a promise to make. He's made other promises on the eve of elections that have been, you know, controversial at least. But this would be breaking international law, would it not?

OREN LIEBERMANN, CNN CORRESPONDENT: Well, of course, Prime Minister Benjamin Netanyahu doesn't see it that way, nor do those who vote for him and his Likud party. For them, international law, irrelevant in this case.

Netanyahu has been moving in this direction, sometimes slowly, sometimes quite quickly, with some members of his party calling for annexation of the settlement blocks. Some even go further and say even the isolated settlements as well.

But you're exactly right, this is a sharp push to the right from Netanyahu in an attempt to suck up, to win as many right-wing votes as possible, even at the risk of harming some of the other smaller right wing parties he'll need to actually form a government. Netanyahu is going very much for the win with the latest and latest run of election polls showing him a little bit behind. He wants to close that gap. He wants to come out on top tomorrow.

Meanwhile, his rival, former chief of staff Benny Gantz, said, look, you haven't pursued annexation in your 13 years of leadership. You're not going to do it now. It's an irresponsible act just intended to win some votes. He says he won't make that move unilaterally. He'll do it as part of a regional process. He says annexation is part of that process, not the starting point, as Netanyahu pictures it.

And that gives you an idea of how tight this race is. If Netanyahu does want to pursue that policy, he probably has the friendliest cover possible from U.S. President Donald Trump. Regardless, Jim and Poppy, that relationship between Israel and America, it's irrelevant who the leader is. It's important to Israel and it's important to America that the relationship itself remain strong of course now after this election. We're all waiting for that peace plan as well.

HARLOW: Yes. Oren Liebermann, thank you.

Aaron David Miller is with us, our global affairs analyst and former State Department negotiator and adviser on the Middle East.

So, first of all, as Tim rightly points out, international law, right, and the Oslo Accords and then the shift we've been seeing from Netanyahu ever since 2009, more and more and more to the right and now this tip over. I guess the question is, you know, do people buy him? Do they believe him on this or is this just a strategy to win?

AARON DAVID MILLER, CNN GLOBAL AFFAIRS ANALYST: I mean clearly it's -- it may be both. I mean he's facing the toughest electoral fight of his political life. I mean Likud has dominated Israeli politics since 1977. Thirty-one out of the 42 years have been Likud governments. The only time they've lost is to two former Israeli chiefs of staff, Ehud Barak on one hand and Eusakra Bin (ph) on the other. And they're facing in Benny Gantz a guy who represents the essence of what it means to be an Israeli, a child of Holocaust survivors, grew up on agricultural settlement, decorated military figure. This is the toughest race of Netanyahu's life and I think he's willing to do just about anything to win.

Whether, guys, this is a political expedient or whether he's actually serious about annexing, not just settlement blocks, but the 100,000- plus Israelis who live in isolated settlements beyond the wall, beyond the barrier, that remains to be seen. We'll wait to see what the results are tomorrow. But on principle, it seems to me, Mr. Netanyahu knows what the risks, implications and dangers of formal annexation of most of these -- 60 percent that the Israelis now physically control of the West Bank.

[09:45:30] SCIUTTO: So, as you know better than me, through the years, U.S. policy has opposed settlements in the West Bank. This is Republican and Democrat. Of course Obama had a resolution towards the end of his term. But both Bush presidents, they opposed. They sometimes bristled when Israel ignored U.S. demands or opposition to those settlements.

Where is U.S. policy on this now? Will the U.S. listen to this and say, no, we won't stand for this, or has it moved so in line with Israeli policy here that Netanyahu knows it's a distance he can go to?

MILLER: Yes, a couple things. It's -- this is the most acquiesce (INAUDIBLE) pro-Israeli and anti-Palestinian administration certainly in the history of the U.S.-Israeli relationship. It would not surprise me at all if Mr. Kushner's peace plan implicitly assumes, as previous administrations have also assumed, that the large settlement blocs which may contain a quarter of a million of the Israelis who live beyond the 1967 borders, that those would, in fact, be annexed to Israel.

But this administration has gone beyond that. It's abandoned the notion that these are occupied territories, formally in terms of language, and it's virtually said nothing with respect to the expansion of Israeli housing units in the West Bank, activities in the Jerusalem area. And, as both of you know, not only has the president recognized Jerusalem -- all of Jerusalem as the capital of the state of Israel, but recently validated Israeli claims of sovereignty over the Golan Heights. So if Mr. Netanyahu is going to move significantly in that direction, to annex a fair amount of this territory, he'll find a very acquiescent and an enabling Trump administration.

SCIUTTO: We should note, a lot of Israelis oppose the settlements, because they don't like to send their sons and daughters in uniform to defend them. A security risk.

It's a complicated issue. Aaron David Miller, thanks very much.

An American tourist is safe now after being kidnapped during her dream trip to Uganda. How her nightmare ended. It's a relief. That's a picture of her there. We'll have more, next.

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[09:52:00] HARLOW: This morning, an American tourist -- and we told you about last week -- kidnapped in Uganda, this morning she is free and in the custody of American officials.

SCIUTTO: CNN's Robyn Kriel, she's been covering this story. She joins us now.

Robyn, can you tell us how they got her out? ROBYN KRIEL, CNN CORRESPONDENT: Well, just quite an incredible story

unfolding, Jim. It was supposed to be a dream safari here in Uganda looking at Uganda's lions that climb trees and gorillas. And, instead, take a look at this dramatic video. This is how it ended up for this lady and her driver, who were kidnapped at gunpoint by armed -- an armed group out of the Democratic Republic of Congo and held for several days, for five days in total. Eventually rescued, we're told, by Ugandan officials, although we are told as well that a ransom was paid. But you see her. She is disheveled. She's not wearing any shoes. She has tears in her clothes. Obviously, completely traumatizing. We understand, as you said, she is in the custody of U.S. officials.

But it's really sent shockwaves throughout Uganda and wildlife parks in general because this sort of thing causes devastation for tourism. And this will be something that the Ugandans really want to fight back on very quickly. We understand there are security operations going on at the moment in that place where she was kidnapped trying to find those armed groups that used her and her driver as essentially pawns in their game to get more money.

We don't know how much they got. $500,000 is what was asked for. But, definitely, this is something that they want to get ahold of. DRC, very volatile. Lots of armed groups operating in the DRC, and kidnappings as well, but it has not crossed the border, at least to our knowledge as of yet. And the question is, was she targeted because she was an American?

Jim and Poppy.

SCIUTTO: Yes.

HARLOW: Robyn, thank you so much for the reporting and thank goodness for her that she is safe.

All right, Jim, how's your bracket?

SCIUTTO: IT's doing pretty well, but --

HARLOW: Pretty well. He's number two. I'm not anywhere close.

SCIUTTO: As I -- as I say, I'm always surrounded by women smarter than me.

HARLOW: There you go.

SCIUTTO: And you'll see that in the standings.

HARLOW: That's true. Ana Cabrera is number one right now. From a field of 68 teams, we're down to the final two. Who will be crowned the next champion in college men's basketball tonight?

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[09:58:27] SCIUTTO: All right, NCAA bracket, my favorite topic of conversation of late. Both of us did pretty well. We had a good run. HARLOW: I'm -- I'm in seventh. And I didn't even do my bracket. Brian Tetsler (ph), who produces this show every day, behind the camera, you can't see him, he did mine and I thought I was like last and I'm seventh, Jim.

SCIUTTO: Well, I'm going to lose to the -- to the much smarter Ana Cabrera regardless of what happens tonight. But we're not going to say where Andy Scholes is in that list --

HARLOW: Right.

SCIUTTO: Because I can't count that high. You know, I went to a lot of school. I can't count that high.

But how's it going, Andy? It's going to be a big night.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: It's going to be a big night. I'm not too far behind you guys, just so you know. I'm like in ninth place, Jim.

SCIUTTO: Double digits.

SCHOLES: But props to you for having both Texas Tech and Virginia in your final four. That was not a very popular pick. Neither team has ever won a men's college basketball championship, so we will see some history later tonight.

For Texas Tech, I mean, this would be huge. They've never won a men's championship, really, in anything. The only team sports title they have to their name is a women's basketball championship back in 1993. And that team is still so revered in Lubbock, Texas, that they named a freeway after the coach, Marsha Sharp.

And, unfortunately, the students there at Texas Tech not quite accustomed to handling all this success yet after Saturday night's big win. They were setting some fires, turning over cars. I asked the Red Raider players yesterday what they thought about those images and what messages they had for their fellow students.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Don't burn down Lubbock, you know, you know, before we can get back. You know, I just hope nobody gets hurt. But, you know, I heard it was crazy out there.

UNIDENTIFIED MALE: Enjoy the moment. Don't do nothing to crazy. But, I mean, keep the city there for us when we get back.

[10:00:03] UNIDENTIFIED MALE: Calm down. It seems like they're losing their minds. Sometimes you just have to like chill out a little bit. I'm glad that they're having fun.

END