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Chinese Woman Arrested In Mar-A-Lago For Spying; Beto O'Rourke Calling Prime Minister Benjamin Netanyahu A Racist, An Obstacle To Peace; President's Acting Chief Of Staff Mick Mulvaney Making It Clear Democrats Will, In His Words, Never See The President's Tax Returns; Man Has Been Charged With Plotting An Attack At National Harbor That Is Just Outside Washington, D.C. Aired 3:30-4p ET

Aired April 08, 2019 - 15:30   ET

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

[15:30:00] ERICA HILL, CNN ANCHOR: She was allegedly carrying four cell phones, two Chinese passports and a thumb drive containing malware.

Shimon Prokupecz is CNN's crime and justice reporter. He is in West Palm Beach.

And Shimon, as I understand it, prosecutors say they actually found even more key evidence when they searched her hotel room. What did they find?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE PRODUCER: Yes. That's right, Erica. And this certainly has the makings, the hallmarks of a spy. When you think about all the gadgets that they were able to find in her hotel room. Most notably, it was what prosecutors describe was a signal detector used to locate hidden cameras. They found this inside her hotel room when they were executing a search warrant after her arrest.

But that wasn't the only thing the found. They found more USB drives. They say nine USB drives. They found SIM cards, five SIM cards. They found another cell phone. And then they found $7500 in cash. All at her Palm Beach hotel room following her arrest.

Obviously the items, the other items that they found also significant is this malware. The secret service agent who arrested her spoke in court about that malware. He described it as when he put it in to his computer, he described it as self-executable. It self-installed.

And then he said that it was very out of the ordinary. Now clearly, this thumb drive contained material that was meant to perhaps infect a computer system or something else. It's not entirely clear what she was doing with it. But all of this, everything that they have certainly found lends credence to the idea that she was perhaps a spy. And that is something prosecutors say they are now investigating. They said in court that they are investigating whether or not she was spying or perhaps maybe she was trying to.

The detention hearing ended a short time ago. The judge saying he is going to need more time to make a decision. For now she remains in jail here in Palm Beach.

HILL: All right, Shimon, the latest for us. Shimon, thank you.

And joining us now to discuss Bob Baer, former CIA operative and CNN intelligence and security analyst.

S\o when we look at this, the evidence presented as Shimon just laid out for us, what does that tell you? What does your gut tell you in hearing all that and her potential motive?

BOB BAER, CNN INTELLIGENCE AND SECURITY ANALYST: Well, Erica, first of all the malware is a dead giveaway, Chinese intelligence. She hasn't been charged with spying.

But really on top of it, having something to detect a hidden camera in a room, you know, that points right to Chinese intelligence. Because in Beijing all the rooms for wired for sound and CCTV hidden cameras. So the fact that they were suspecting there was something at Mar-a- Lago, tells me this was fairly well planned. It turned out to be sloppy. But this was no amateur operation. And again, the arrows all point back to Chinese intelligence.

HILL: No ordinary operation. That should give us all pause. Does it surprise you there isn't any video of secret service interactions with her?

BAER: No. I mean, this is very sensitive. We just lost the secret service chief. And it is, you know, the implication is that it was his fault. But I mean, this is very sensitive if Mar-a-Lago has become a hot bed of foreign spies, spying on the president, this scandal is not going to go away any time soon.

HILL: Well, is the scandal too more for the secret service or the security of Mar-a-Lago? Because that as we know has come up time and again.

BAER: Well, you know, at the White House it's the secret service that controls the perimeter and entry. Mar-a-Lago, it's Trump staff that does. And so for the secret service, this is very discouraging not to have 100 percent control in which basically it lets people like this in. Because if it's the President's staff, personal staff, that decides who visits and doesn't, there's nothing the secret service can do about it unless, for instance, they have caused a crime in this country, but only then. So I imagine it's very frustrating for these guys at Mar-a-Lago.

HILL: That is frustrating for them. Let's say you have the opportunity to speak with the head of security today at Mar-a-Lago, what would you advise that person to do? What do you think based on what we know needs to change yesterday, not even today?

BAER: I would walk up to the President and say you got to cut Mar-a- Lago out. You are president of the United States now. Now you have a lot of secrets you could endanger this country. And if you are sitting at banquets, talking openly and those rooms, any number of them could be wired for sound and video. It's just not safe down there. And there's nothing the secret service can do about it to make it safe, secure. End of story.

HILL: Bob, always appreciate the insight. Thank you.

BAER: Thank you.

HILL: Just in. Iran is firing back at the U.S. after the Trump administration designates Iran's elite military force as a terror organization.

(COMMERCIAL BREAK)

[15:39:28] HILL: As Israelis prepare to go to the polls tomorrow for national elections, 2020 contender Beto O'Rourke is calling Prime Minister Benjamin Netanyahu a racist and obstacle to peace in the Middle East.

(BEGIN VIDEO CLIP)

BETO O'ROURKE (D), PRESIDENTIAL CANDIDATE: The U.S./Israel relationship is one of the most important relationships that we have on the planet. And that relationship if it is to be successful must transcend partnership in the United States and it must be able to transcend a prime minister who is racist as he warns about Arabs coming to the polls, who wants to defy any prospect for peace as he threatens to annex the West Bank, and as who has sided with a far right racist party in order to maintain his hold on power.

Now, I don't think that Benjamin Netanyahu represents the true will of the Israeli people or the best interests of the U.S./Israel relationship or any path to peace for the people of the Palestinian authority, the Gaza Strip and the states of Israel.

(END VIDEO CLIP)

[15:40:27] HILL: In a bid to rally his base and to win tomorrow's vote, Netanyahu is promising to annex Jewish settlements in the West Bank if he is reelected. More than two million Palestinians live in the West Bank.

CNN global affairs analyst Aaron David Miller is a distinguished scholar at the Woodrow Wilson international center and joins us now.

So, as we look at all of this on the eve of elections in Israel, you have Beto O'Rourke calling Prime Minister Benjamin Netanyahu a racist, an obstacle to peace. Democrats are very clearly on their way swiftly toward a difficult conversation about Israel and what it means to support Israel and what that means about general support. Are they ready for that conversation?

AARON DAVID MILLER, CNN GLOBAL AFFAIRS ANALYST: Looking toward 2020, I think it's a conversation that is fraught with all sorts of political risk.

I mean, look, Erica. You know, to paraphrase to quote Bob Dylan, "times are changing." It's really hard to put this in perspective. You have an American president who is woefully putting his thumb on the scales of an Israeli election in an effort to reelect his preferred candidate for president - excuse me, for prime minister, Benjamin Netanyahu on one hand. And you have Beto O'Rourke statement which is really quite remarkable.

The day before the Israelis go to the polls, he is describing Benjamin Netanyahu as a racist and basically seeing to the Israel people that he doesn't reflect your will. So I think that reflects, frankly, the growing partisanship and divide on the issue of Israel for both Democrats and Republicans.

There was a time when essentially there was one view. Now you have a Republican view of Israel, and you have at least two or three different Democratic views of Israel. And I think for the Democratic Party politically, it poses some very difficult choices looking toward 2020.

HILL: Well, part of the issues that it poses too is the light in which it's cast, right. So depending on who is making the statement, your support or lack thereof of Israel, there's a lack of seems a lack for support for Israel or Israeli policies, all of a sudden, it makes that person anti-Semitic. And the two are not necessarily the same thing. That's where the discussion -- part of what's missing.

MILLER: No. That's for sure. And political space has to be opened up to convey legitimate criticism with respect to Israeli policies without opening the door to charges of accusations of anti-Semitism. And it's quite clear that the conversation at least in the political realm, that balance has not yet been found. Some Democratic candidates I suspect you would find a different response once Joe Biden decides to run with much more measured tone perhaps than what you saw from Beto O'Rourke.

HILL: I also want to get your take. Today the U.S. announcing it is now designating Iran's revolutionary guard as a terrorist organization. What is this change?

MILLER: You know, if it's part of the Trump administration's symbolic effort to create maximum pressure on Iran to add additional sanctions to an organization that clearly is nasty and has been at the forefront of terrorism in the region, and against the United States, sponsoring his ball in Lebanon and in Syria, that's one thing. But if it leads to a change of the rules on the ground, you know, American forces in Iraq and in Syria find themselves operating in close proximity to those pro-Iranian revolutionary guard core forces. And if in fact the Trump administration intends this as a signal that we intend to go after you the way we have gone after the Islamic state in Al Qaeda, I think we are in for some rocky, a rocky road ahead.

You have a risk averse American president who I don't think is looking for major confrontation with the Iranians. One could occur, nonetheless.

HILL: Aaron David Miller, always good to talk with you. Thank you.

MILLER: Thank you, Erica.

HILL: More on our breaking news. Actress Felicity Huffman pleading guilty and apologizing in the college admissions scandal.

Plus, the showdown over the President's tax returns intensifying as the acting chief of staff claims Democrats will never see them.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The Democrats will never see the President's tax returns.

MICK MULVANEY, ACTING CHIEF OF STAFF: Oh no. Never.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[15:49:08] HILL: The President's acting chief of staff Mick Mulvaney making it clear Democrats will, in his words, never see the President's tax returns and they know it. Democrats, however, say they are confident a 1924 law allows the chairman of the House ways and means to acquire an individual's tax returns upon requests. And Chairman Richard Neal has officially asked for six years-worth of Trump's personal and business tax fillings. The White House just issuing a letter in protest to fight the release as Mulvaney speaks out.

(BEGIN VIDEO CLIP)

MICK MULVANEY, CHIEF OF STAFF: You always expect something from the Democrats if they don't get what they want on the Mueller report, they are going to ask for the taxes. If they don't get what they want on the taxes, they will ask for something else. So it doesn't surprise anybody.

But keep in mind, they knew they are not going to get these taxes. They know what the law is. They know that one of the fundamental principles of the IRS is to protect the confidentiality of you and me and everybody else who files taxes. They know that. They know the terms under law by which the IRS can give them the documents. But political hit job (ph) is not one of those reasons, so they know they are not --.

[15:50:10] UNIDENTIFIED MALE: To be clear, you believe Democrats will never see the president's tax returns?

MULVANEY: Oh, no, never. Nor should they. Keep in mind, that's an issue that was already litigated during the election. Voters knew the President could have given his tax returns. They knew that he didn't and they elected him anyway which of course, what drives the Democrats crazy. But they know they are not going to get this.

(END VIDEO CLIP)

HILL: Well, you may remember, candidate Trump at one point said he would release his returns then later he claimed he couldn't do to an audit which of course, just to remind you for the 800th time, doesn't prevent a person from disclosing tax information. So what could the real reason be for the President's resistance? His former attorney was asked that question under oath in February.

(BEGIN VIDEO CLIP)

MICHAEL COHEN, FORMER TRUMP PERSONAL ATTORNEY: Statements he had said to me is 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 will end up in an audit and he will ultimately have taxable consequences, penalties, and so on.

(END VIDEO CLIP)

HILL: Dan Alexander is associate editor at "Forbes," covering the business of Donald Trump.

So you have reported extensively on President Trump's finances and his businesses. Is Michael Cohen right? Is this simply from your reporting, is this just a fact that Donald Trump is worried that if his tax returns are out there, that someone is going to find something, he is going to owe more money.

DAN ALEXANDER, ASSOCIATE EDITOR, FORBES: Well, it is hard to know without actually seeing them what he has to hide. But certainly, you know, Michael Cohen is not the only person who suggested that Donald Trump may in fact be hiding something and that is why, you know, going through this whole processing, you would eventually release them and saying that release them when he is not under audit. Now here we are, Mick Mulvaney making clear that no, never ever will anybody see his tax returns.

HILL: Meantime in New York State, a lawmaker in this state introduced a legislation. So this would, I want to make sure I get this correct, it would actually enable the release of the President's state tax returns to certain agencies. How do that work?

ALEXANDER: Well, so New York State, of course, controls state his tax returns, just as the IRS controls his federal returns. And on any state return, you can see a lot of the same information that's on -- you know, that would be on a federal return. The trick here is that you have state lawmakers who are saying, explicitly, that we are doing this to go after Trump's taxes. So they are going to get a lot of pushback here of people saying, you know, this is just - you are changing the laws, just so then you can see one political document.

HILL: And they are saying, yes, that's exactly what we are doing, which is fascinating in and of itself.

Real quickly, before we let you go. The fact that Richard Neal is also asking for business, these business filings, could we learn more from the business filings or more from the personal filings?

ALEXANDER: There's a ton to learn from both. But if you look at the business, we still don't know how profitable all of his businesses are. We still don't know exactly who all of his lenders are. So we could see something like that. So there's still -- these are key questions that you would want to know about anybody's business that we don't have yet. And certainly seeing those returns would help answer them.

HILL: It would. Although according to Mick Mulvaney, it's never going to happen. But we will find out. If when we get them, Dan, you will come back and we will talk about it. Thank you.

There is much more to bring you on our breaking news. The President firing both his homeland security secretary and now we are learning secret service director. Details on why the President is cleaning house.

Plus, we are also getting word a man has been charged with plotting an attack at national harbor that is just outside Washington, D.C., a plot allegedly inspired by ISIS.

(COMMERCIAL BREAK)

[15:58:02] HILL: Breaking news. The justice department has just charged a man for allegedly stealing a U-Haul van and planning to drive it into a crowd of pedestrians at national harbor. That's a large shopping and hotel complex just outside of D.C. Prosecutors also say he was inspired by ISIS.

Tom Foreman joining us now live with more on the suspect and this planned attack - Tom.

TOM FOREMAN, CNN CORRESPONDENT: Hey Erica. About two weeks ago, authorities say this man just walked off his job in Virginia, went and stole a U-Haul fan, that's what they are alleging, and then he headed to national harbor to repeat what he had seen ISIS do in Nice, France, and again we saw the attack in New York city, as well. Simply drive his vehicle through a crowd of people at national harbor.

Two things happened. One, authorities allege that the vehicle he stole was not as big as he wanted, because he wanted something bigger to attack with. And then he didn't find big enough crowds there, so they say he hid out for the night in a boat, and when they found the stolen vehicle, they then found him.

He is charged with interstate transport of a stolen vehicle at this moment. But those are the allegations against him. And of course, authorities here pleased that they managed to catch up with him before he could do anything more, if, indeed, that was his plan.

HILL: Tom Foreman with the latest for us. Tom, thank you.

FOREMAN: You are welcome.

HILL: Another can't-miss date for Capitol Hill. The House judiciary chairman, we are learning, has just scheduled attorney general Bill Barr to appear before the committee on May 2nd to speak on the Mueller investigation. That's the date Barr suggested in a letter to lawmakers.

The House Judiciary Committee has jurisdiction, of course, over impeachment proceedings. Chairman Jerry Nadler tweeting, May 2nd should also be the deadline for the committee to receive the full report by special counsel Robert Mueller, who the committee also plans on questioning.

Barr has already has two hearings on Capitol Hill, of course, this week. And plans to release a redacted version of the Mueller report, he had said, by, quote, "mid-April if not sooner."

I'm Erica Hill. Thanks for being with us today. Brooke is back tomorrow.

"THE LEAD with Jake Tapper" starts right now.

JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT: Sources tell me president trump told border agents to break the law to secure the border.

"THE LEAD" starts right now.