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Tax Return Battle; Interview With Rep. Steve Cohen (R) Tennessee; Rep. Nancy Pelosi (D) California Says William Barr Is Going Off The Rails And Acting Like He's The Attorney General Of Donald Trump; "The Wall Street Journal" Says New York Prosecutors Interviewed Former Communications Director Hope Hicks And Trump's Longtime Bodyguard Keith Schiller; Democrats' Deadline For Six Years Of Trump's Tax Returns Arrives As Trump And Treasury Chief Make It Clear They Won't Comply; Attorney General To Investigate Spying On Trump Campaign. Aired 6-7p ET

Aired April 10, 2019 - 18:00   ET



WOLF BLITZER, CNN ANCHOR: Prosecutors have moved in on President Trump's inner circle, interviewing some of his closest former aides and gathering more evidence in the hush money case than anyone previously knew.

"I won't do it." The president defies demand by Democratic lawmakers and vows he won't hand over his tax returns, as the deadline set by the head of the House Ways and Means Committee arrives.

And star pressure. Federal prosecutors up the stakes for one of the celebrities accused in the college admissions scandal in an effort to get her to plead guilty.

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: Breaking news tonight, outrage among congressional Democrats after a bombshell statement by the Attorney General William Barr.

In his second day of testimony up on Capitol Hill, he claimed that the FBI or the intelligence agencies may have spied on the 2016 Trump presidential campaign.

At the same time, "The Wall Street Journal" is now reporting that New York prosecutors have gathered more evidence than previously known in the investigation into hush money payments to women who say they had affairs with Mr. Trump before he was president.

I will talk about that and much more with Congressman Steve Cohen of the Judiciary Committee. And our correspondents and analysts, they are also standing by.

First, let's get details of the attorney general's truly stunning claim about spying on the Trump campaign. Our Political Correspondent, Sara Murray, is here with the latest.

Sara, Democrats are furious about Bill Barr's unsubstantiated allegation.


Bill Barr certainly made quite a splash on Capitol Hill today when he said he believes the Trump campaign was spied on, but he didn't have any evidence to back up his conclusion. And now, as you can imagine, Democrats are fuming.


WILLIAM BARR, U.S. ATTORNEY GENERAL: I think spying did occur, yes. I think spying did occur.

MURRAY (voice-over): A stunning statement by Attorney General William Barr, claiming that the FBI or intelligence agencies during the Obama administration may have spied on the 2016 Trump campaign.

BARR: I think spying on a political campaign is a big deal. It's a big deal.

MURRAY: Barr later tried to clarify his claim.

BARR: I am not saying that improper surveillance occurred. I'm saying that I am concerned about it and looking into it. That's all.

MURRAY: And while he stopped short of accusing anyone of breaking the rules, Barr suggested there may have been missteps among those in the upper ranks of the FBI, led by James Comey, during the 2016 election.

BARR: To the extent there were -- there were any issues at the FBI, I do not view it as a problem that's endemic to the FBI. I think there was probably a failure among a group of leaders there at the upper echelon.

MURRAY: His comments drew a sharp rebuke from Democrats.

REP. NANCY PELOSI (D-CA): The chief law enforcement officer of our country is going off the rails yesterday and today. He is the attorney general of the United States of America, not the attorney general of Donald Trump.

MURRAY: Barr telling lawmakers he's looking into the origins of the FBI's investigation into possible ties between Donald Trump's 2016 presidential campaign and the Russian government.

The investigation into the investigation already cause for celebration from the president, who has repeatedly called for a probe like this.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He's doing a great job, getting started on going back to the origins of exactly where this all started, because this was an illegal witch-hunt and everybody knew it. What they did was treason. What they did was terrible.

MURRAY: But when it comes to special counsel Robert Mueller's report, the president may not be as pleased. Barr told Lawmakers he will not sanitize it to protect Trump.

SEN. JEANNE SHAHEEN (D-NH): Does that mean that you will redact information to protect the reputational interests of the president?

BARR: No. I'm talking about people in private life.


BARR: Not public office.

MURRAY: Still, Barr faced another round of criticism for his decision to clear the president of obstruction of justice.

SEN. CHRIS VAN HOLLEN (D), MARYLAND: You indicated that they did not exonerate the president. You did. And so I'm asking you whether you agree with Mueller that there were difficult issues of law and fact in making that assessment?

BARR: That's not a question I really can answer until I think...

MURRAY: Admitting he did not know if Mueller wanted him to make that call.

SEN. PATRICK LEAHY (D-VT): Did he express any expectation and interest in leaving the obstruction decision to Congress?

BARR: Not that -- he didn't say that to me, no.

LEAHY: So he said the obstruction decision should be up to you?

BARR: He didn't say that either. But that's generally how the Department of Justice works.


MURRAY: And he still doesn't know if Mueller agrees with it.

UNIDENTIFIED MALE: Did Bob Mueller support your conclusion?

BARR: I don't know whether Bob Mueller supported my conclusion.


MURRAY: Now, Barr said he will hopefully have a version of the Mueller report ready for the public and Congress to see next week.

But, of course, it won't be the kind of version that will satisfy Democrats. It is expected to be full of reactions -- Wolf.

BLITZER: I'm sure it will be.

All right, everybody, stand by. Sara, I want to bring in our Evan Perez, our senior justice correspondent. Kara Scannell is with us as well, our CNN reporter.

He makes a stunning statement like this, that there may have been some spying on the Trump campaign by the FBI or the U.S. intelligence community. What do you think? What kind of evidence does he have?


And I think certainly people at the Justice Department later on have told reporters that they -- he didn't really mean spying in a pejorative sense. He sort of mentioned this in passing, obviously, but multiple times today, he was given a chance to clean this up, and he kind of just made it, frankly, just a little bit more worse.

And so the question is, is he talking about the FBI and the beginnings of this investigation? Is he talking about the FISA application involving Carter Page? Is he talking about some of the work the CIA was doing looking at what the Russians were up to?

We don't know exactly what he means. And I think, certainly, if there are any changes that are going to happen as a result of this, I think it's a big deal, and perhaps members of Congress are going to want to be involved in any changes that happen.

BLITZER: Because, Sara, presumably, the president was happy when he heard that the attorney general was launching this investigation, even though there's a separate inspector general's investigation that's under way looking into a lot of these same matters.

But the allegation against the attorney general is, he's doing and saying what the president of the United States likes to hear.

MURRAY: Yes, I mean, the president is absolutely happy about this, because he's been saying that this is an illegal investigation, that his campaign was being spied on for years, essentially.

And so now you have the attorney general going forward saying this in front of Congress without offering any facts to back it up. But it is sort of bizarre situation to see him out there, the attorney general, talking about it like this, when he's also saying, hey, we're actively looking into this at the Justice Department right now.

Normally, I think you would expect for them to wait until they have reached their conclusion, and then share that with the public, instead of being there on Capitol Hill and sort of spitballing along the way.

BLITZER: He's also saying the whole investigation was an act of treason, treasonous, he's calling.

Kara, amidst all of this, we're getting word that the U.S. attorney in the Southern District of New York in Manhattan has been interviewing some key associates of the president, members of his inner circle, in connection with the hush money payments to those two women.

KARA SCANNELL, CNN CORRESPONDENT: Yes, that's right. So "The Wall Street Journal"'s reporting that last year, just around

this time, that the U.S. attorney's office in Manhattan interviewed Hope Hicks, who was Trump's longtime communications adviser, as well as Keith Schiller, his longtime security adviser, kind of body man, all related to this campaign finance investigation.

And according to "The Journal," one of the questions involving them had to do with American Media. That's the publisher of "The National Enquirer," which published one of these stories that was part of the hush money payments.

So, this inter -- these interviews took place over the last spring. And "The Journal" doesn't say it, but usually the way these investigations work is that they use this as leverage. They -- having this testimony from the inner circle, people who know intimately about these arrangements, likely helped prosecutors get David Pecker, the publisher of American Media, and the company itself to cooperate as part of these immunity and non-prosecution agreements.

So, likely, their cooperation provided a lot of inside information about Donald Trump's longtime relationship with David Pecker, which was enough to force AMI's cooperation. All of that culminated in Michael Cohen pleading guilty.

BLITZER: Yes. And David Pecker got immunity in exchange for his cooperation. Allen Weisselberg, the longtime chief financial officer of the Trump Organization, he got immunity as well in connection with his cooperation.

How much of a threat is all of this to the president?

PEREZ: Look, I think that the people around the president are very much more worried about what the Southern District of New York is up to than about anything that might come from the Mueller report.

This has always been the thing that has worried them. And really, Wolf, if you think about this, as far as these investigations have gone, the Southern District of New York, Manhattan prosecutors are the only ones really have landed a punch on the president so far.

They basically -- they called him an unindicted co-conspirator in not so many words in the Michael Cohen plea document. So I think that's the reason why they're concerned. And I think they're going to be -- they believe that this is going to go through the end of Donald Trump's presidency.

BLITZER: They called him Individual No. 1, as an unindicted co- conspirator.

PEREZ: Exactly.

SCANNELL: And that investigation is still ongoing.

PEREZ: It's still ongoing.

BLITZER: It certainly is. All right, everybody, stick around.

There's more news we're following.

House Democrats, their deadline arriving for President Trump to turn over his tax returns, a deadline he's vowed to ignore.

Let's go to our White House Correspondent, Abby Phillip.

Abby, the president said flatly he won't give Democrats what they want and he launched sharp new attacks against the Mueller investigation.


President Trump is preparing for multiple major fights on various fronts, first pushing back on Democrats' demands to see six years of his personal and business tax returns, and launching new attacks against Robert Mueller and his investigators even after weeks ago he said he wanted the public to see the full Mueller report.



TRUMP: This was a -- an attempted coup. This was an attempted takedown of a president. And we beat them. We beat them.

PHILLIP (voice-over): Tonight, President Trump going on the attack against the Russia investigation, ahead of the release of the full Mueller report.

TRUMP: So, the Mueller report, when they talk about obstruction, we fight back. And do you know why we fight back? Because I knew how illegal this whole thing was. It was a scam.

PHILLIP: As Attorney General Bill Barr testifies on Capitol Hill that redactions won't be made to protect him.

SHAHEEN: Does that mean that you will redact information to protect the reputational interests of the president?

BARR: No. I'm talking about people in private life.


BARR: Not public officeholders.

PHILLIP: Trump gearing up for another battle with Congress over his taxes.

TRUMP: I got elected last time with this same issue. And while I'm under audit, I won't do it. If I'm not under audit, I would do it. I had no problem with it.

PHILLIP: As the IRS appears poised to buck a deadline set by the House Ways and Means Committee to hand over six years of the president's tax returns by today.

STEVEN MNUCHIN, U.S. TREASURY SECRETARY: This isn't just about the president and congressional oversight. As I said yesterday, can you imagine if Kevin Brady, when he was chairman, he had requested tax returns of prominent Democrats? We want to make sure that we follow the law properly.

PHILLIP: Meantime, in Texas today, Trump painting a gruesome picture of the situation at the border.

TRUMP: They will kill you, take your truck, sometimes go and rob the house. And who the hell can live like this?

PHILLIP: And downplaying the influence of his senior policy adviser Stephen Miller, who sources say has been put in charge of all immigration and border-related issues.

TRUMP: Stephen is an excellent guy. He's a wonderful person. People don't know him. He's a wonderful -- been with me from the beginning. He's a brilliant man. And, frankly, there's only one person that's running it. You know who that is? It's me. PHILLIP: Miller's hard-line advocacy causing even Republicans to push

for a check on his power. Republican Senator John Thune telling CNN: "I do think his voice is influential, and I hope it gets balanced out with other voices there."

And, increasingly, Republican lawmakers are speaking up about Trump's unconventional picks for another role, the Federal Reserve Board. Trump has selected Stephen Moore, a former campaign adviser who critics say lacks the economics qualifications for the post, and former Republican presidential candidate Herman Cain, who faces renewed scrutiny over allegations of sexual harassment.

But Senate Majority Leader Mitch McConnell is privately urging senators to raise their concerns about both men to the White House, sources tell CNN. Trump now won't say if Cain's nomination is in jeopardy.

TRUMP: Well, I like Herman Cain. And Herman will make that determination. Herman is a wonderful man. He's been a supporter of mine for a long time. As to how he's doing in the process, that I don't know. You go through a process. But Herman is a great guy, and I hope he does well.


PHILLIP: President Trump in Texas teased that his son-in-law, Jared Kushner, has been working on an immigration plan that he's excited to release.

And just moments ago, Kushner and the acting chief of staff, Mick Mulvaney, were on Capitol Hill meeting with Republicans and Democrats about immigration-related issues. But it's not clear yet what might come of those renewed talks -- Wolf.

BLITZER: We will fairly soon, I'm sure. All right, Abby, thank you very much, Abby Phillip over the White


Let's get some more on all of this. Democratic Congressman Steve Cohen of Tennessee is joining us. He's a member of the Judiciary Committee.

Congressman, thanks so much for joining us.

I want to begin with the attorney general's truly stunning admission today that he believes spying, spying -- he used that word -- did occur on the Trump campaign back in 2016, although he wouldn't say whether or not that surveillance was improper.

Do you see any evidence of impropriety in the way the FBI or the CIA or -- when they were involved in that Russia investigation?

REP. STEVE COHEN (D), TENNESSEE: I don't -- have not seen any improprieties with the FBI or the CIA.

But I do see an impropriety by our attorney general, even suggesting there was spying, without knowledge and without proof. Unless he has proof, he shouldn't put out any kind of information or thought like that that could lessen the public's respect for our FBI, our Justice Department and our judicial processes.

He's the head of the Department of Justice. And he's putting -- put it in to a light that is not favorable in the public's eyes, saying somebody in that area might have done spying. That's wrong.


BLITZER: The inspector general over at the Department of Justice is already conducting an investigation into the origins of the Russia probe. Should the attorney general conduct his own investigation at the same time, or simply wait to see what the inspector general's report concludes?

COHEN: Well, certainly, he should wait.

There's so many more important things for him to be doing right now, with white nationalists rising and hate crimes. We saw racial insignias painted at the fire at Highlander Institute, which was burned to the ground in Knoxville about two weeks ago, a place where Dr. King and Rosa Parks and many environmentalists and labor leaders have trained for years, a spot where white nationalists would find it objectionable.

They painted racial insignias, similar to what was at Christchurch and similar to what we have seen in Charlestown -- or Charleston at that church. And there's so many things to be investigating that are really a threat to the American public safety.

BLITZER: The House speaker, Nancy Pelosi, said today that the attorney general is, in her words, going off the rails. She also said he's acting more like the attorney general for the

president, rather than the attorney general of the United States. Are you concerned that the president may be compromising Bill Barr's independence?

COHEN: I think Bill Barr gave away his independence when he accepted the job.

I have said it for weeks, probably said it on your show, that the president hired him to be his Roy Cohn. That's what he was hired for. And he's taken the position. It was a Faustian bargain. And they're carrying on. And Bill Barr, if he had a good reputation, which some people said he did, he's losing it.

He's acting less like a Janet Reno, less like an Elliot Richardson, and more like a John Mitchell every day.

BLITZER: The president tweeted earlier this afternoon that the Mueller investigation was -- and he used the word treasonous. Treason, as you know, is punishable by death.

What's your reaction to that inflammatory rhetoric by President Trump?

COHEN: The president doesn't know what he's talking about, about treason or anything else. He says whatever comes to his mind.

And that's really sad. The whole idea of the truth and people speaking honestly to the American public and trying to encourage people to know facts in a fact-based discussion is being eroded. The truth is being thrown out.

And Trump is the leader in that. And that is a terrible legacy for him. And it's terrible for America and for the country that's based on the rule of law and with respect for law enforcement.

BLITZER: The attorney general also refused to say whether or not special counsel Robert Mueller intended for him to make a determination on the very sensitive issue of obstruction of justice, rather than simply leaving the matter to Congress.

Does it worry you that Barr either couldn't or wouldn't answer that question?

COHEN: Well, I think he didn't -- he wasn't going to lie, because the fact is, Mr. Mueller would not have wanted him to make that decision. I think he left it there without a conclusion, of saying he did not exonerate him, to leave up to Congress.

And never has an attorney general stepped into the breach like this. There's no legislation, a law that says he should. There's no tradition that says he should. It's never happened before. And Mueller probably didn't anticipate it happening.

But this was why Barr was hired, and he's doing everything he can to help this president. Think about it, Wolf. You have got a president who we know is number one unidentified -- what is it -- what's the term?

BLITZER: Individual No. 1.

COHEN: Individual 1, that's the president.

That the president of the United States, Individual 1, has been indicted for a felony while he's in office? If this was any other time, without more crazy things going on, this would be the number one story every single day.

Imagine if Harry Truman or Franklin Roosevelt or Dwight Eisenhower or any president in the past, the Bushes, were Individual 1 for a felony. And there's just so much else about this guy that the one fire that would be a tremendous fire isn't even being thought about, because we move on, from paying off the models, from -- to influence the election, to get around the campaign finance laws, to dealing with the Russians, to obstruction, to conspiracy, you name it.

This is a very sad time in American history. And this is the lowest ebb that a president has ever been in, being -- if he is Individual 1 -- and we think he is -- anything -- only thing worse was Richard Nixon, when they had the goods on him for obstruction.

And this is the only other time a president has sunk this low.

BLITZER: Well, I just want to point out Individual No. 1, which everyone assumes was the president, was an unindicted co-conspirator in that allegation.

And, as you know, the longtime Justice Department policy...

COHEN: Right.

BLITZER: ... is a sitting president of the United States can't be indicted.

COHEN: That's the only reason he's not indicted, is because of that.

He's a conspirator to a felony, and it's Individual 1. And Individual 1 ranks right down there with Richard Nixon.

BLITZER: Congressman Steve Cohen, thanks so much for joining us.

COHEN: You're welcome.

BLITZER: All right, the breaking news continues next.

We're going to dig deeper into Nancy Pelosi's scathing remarks about the attorney general, William Barr, just moments ago. She says he's -- quote -- "going off the rails."


Plus, two Hollywood stars caught up in the college admissions scandal taking two very different approaches. Tonight, federal prosecutors are pressuring one to plead guilty. (COMMERCIAL BREAK)

BLITZER: We're following the breaking news, an unsubstantiated allegation by the attorney general of the United States, William Barr, that has Democrats outraged tonight, with the House speaker, Nancy Pelosi, saying that Barr -- quote -- "is going off the rails."


Let's dig deeper with our correspondents and our analysts.

And, Dana, the attorney general made a truly extraordinary claim today about spying on the Trump campaign in 2016. Listen to this exchange that he had during his congressional testimony.


BARR: I think spying on a political campaign is a big deal.

SHAHEEN: So you're not -- you're not suggesting, though, that spying occurred?

BARR: I don't -- well, I guess you could -- I think there was -- spying did occur. Yes, I think spying did occur.

I am not saying that improper surveillance occurred. I'm saying that I am concerned about it and looking into it. That's all.


BLITZER: Because he seemed to backtrack a little bit on that subsequent answer.


BLITZER: What is he suggesting?

BASH: Well, look, he is saying what happened.

What happened is that there was surveillance of people associated with the Trump campaign, which is how the whole -- the whole notion of the investigation began. What he's also saying is the word spying, which is very, very loaded.

It is technically accurate, which he said there when he was pressed on it by Senator Schatz of Hawaii. And he seemed to understand, at that point, maybe did before as well, that the term was incredibly loaded.

But this is precisely the kind of rhetoric that the president and people around him have been saying from the rooftops to their base, that this is what's wrong with -- that this whole investigation was run amuck and it shouldn't have happened from the from the get-go.

But the fact is, what he really did say was, yes, there was surveillance and I want to figure out if it was done properly.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Bill Barr is a classic demonstration of what's happened to the Republican Party.

He used to be an establishment figure, George Herbert Walker Bush administration. And now it's a FOX News party, where they -- and you saw this in his confirmation hearing, talking about Uranium One, all these fantasies about Hillary Clinton's wrongdoing.

This is how he talks, because he's part of that party now. And that party thinks the FBI, the CIA, everybody's conspiring to get Donald Trump. And they now have their attorney general.

BASH: But it is true that there was technically spying on people.

TOOBIN: Carter Page was under investigation in a counterintelligence...

BASH: That's the point. So, what he said is not wrong. It's just the terminology he used was a dog whistle.


TOOBIN: Was -- OK, fair enough.


TOOBIN: But I think the fact that we have the attorney general, the attorney general of the United States in a dog whistle to Sean Hannity is a big deal.


BLITZER: It's one thing to say there was spying, another thing if a FISA court authorized some surveillance because of credible evidence or suspicions.

SABRINA SIDDIQUI, CNN POLITICAL ANALYST: And the federal government would have had to present evidence or at least believe there was probable cause to obtain that FISA warrant against Carter Page.

And I do think that, when Attorney General William Barr, as Dana noted, under questioning from Brian Schatz, said, well, I'm talking about unauthorized surveillance, he did sort of understand the weight of the term spying, which, frankly, is a word that the president and his allies have used.

And that's why the connotations were very problematic, certainly for Democrats on Capitol Hill, who said that they were flabbergasted, and they did not believe that Barr in his position would not have known what the subtext to many people of the word spying might in fact be, particularly since he said he did not have evidence to suggest that the surveillance of Carter Page was in fact elicit.

BLITZER: Let's get Phil Mudd to weigh in on this.

What do you think?

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: Can you give me a chance to defend the spies for a moment?


BLITZER: You used to work at the CIA.

MUDD: Yes, that's right. I wasn't a spy. I was an investigator.

Let's be clear here.


MUDD: I think the language is what is significant.

The difference between an investigation -- if Barr had said, we -- investigations were aggressive during the campaign, including a court- authorized wiretap of Carter Page, people would have said, well, we knew that a long time ago.

He used that word spying. I think what he's referring to, at least in part, is that Carter Page investigation that was under way. But by telling the American people, we were spying, they start to think, well, we had James Bond inserter in the camp. I think that's the problem.

TOOBIN: But he's saying more than that.

He's saying he's going to do an investigation of the investigation.


BLITZER: Improper surveillance.

TOOBIN: Improper surveillance.

So it's not just a factual observation of what went on. He is doing the bidding of Donald Trump, who has been saying from the very beginning that this was a witch-hunt, this was improper, this was -- this was outrageous.

So it's not just a factual observation. He is putting the Department of Justice to work to investigate the FBI and CIA.

BASH: Right.

And, just to be clear, he's being encouraged to do that aggressively by Republicans in Congress, who have been not necessarily very aggressive on the notion of oversight in general.


But on this particular idea of oversight, they are writing him letters, they have calling him, they are saying, you have to figure whether or not the genesis of this, spying, counter-surveillance, whatever you want to call it, was done properly and was warranted.

SIDDIQUI: And there are a couple of issues that are important to point out about Carter Page. One is that this FISA warrant was obtained after he had left the Trump campaign. And as mentioned, there would have been probable cause they would have to present that he was acting as an agent of a foreign government and they were relying on information provided to them by a confidential informant.

And the other point that some people are making about the investigation is that this is, of course, a focus on the FISA warrant, which is the republicans have fixated their attention. But it sort of overlooks that the broader investigation of Russian interference in the campaign was, in fact, triggered by the fact that George Papadopoulos bragged to the then Australian Ambassador to the U.S. that the Russians had dirt on Hillary Clinton.

BLITZER: Well, what's awkward though, Phil, and you used to work not only at the CIA but also at the FBI, what's awkward is that there already an Inspector General investigation underway looking into the origins of this entire Russia involvement in the U.S. presidential election. You would think that the Attorney General would simply have said, you know what, let's see what this Inspector General, Michael Horowitz, let's see what he has to conclude, it's going to conclude in the few months. At that point, we can follow-up in necessary.

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: You're killing me, Wolf. You must have been doing for hours. I was just going to say that, I mean, the fact we're missing is he's talking about an investigation that was already under way, again, the difference in language.

If he had just said, there's a standard process, and this is a highly sensitive investigative procedure, looking at the emails for somebody who was involved in a political campaign, any Attorney General, democrat or republican, might say, I want to look at that, and, by the way, even preceding me, the Department of Justice already decided to look at that. That is about page A-17 (ph) in The Washington Post.

He decides to say, I'm looking at spying. If he made that choice consciously, I want to say, why are you doing that? You're encouraging the American people to say the FBI is spying and the American people are going to say, that's wrong.

BASH: You just answered your own question, don't you think, that that is part of why he is doing that, to Jeff's point, that he is trying to play into the politics of the people who brought it to the dance (ph).

MUDD: I think maybe, but I must be the only naive CIA person --

BLITZER: But, Jeffrey, if there is going to be spying on American citizens on a presidential campaign, you've got to have some judges who will authorize that under the Foreign Intelligence Surveillance Act, FISA courts.

TOOBIN: And that's what happened. And these are judges named by Chief Justice John Roberts, a republican appointee, the judges themselves were republican appointees, so the idea that this was some democratic conspiracy to get the Trump campaign has been absurd from day one and no matter how many times the President says it, it doesn't make it true. BLITZER: Everybody stand by. There's more breaking news we're following. We'll continue our special coverage right after this.



BLITZER: All right. We're back with our correspondents and our analysts. And, Dana, the Wall Street Journal, an important story they're reporting today, the federal investigators in New York, the U.S. Attorney for the Southern District of New York, they have interviewed beyond people we have already known, about two additional people who are really at the center of the President's orbit, Hope Hicks and Keith Schiller, into the hush money allegations that the President, as a private citizen, paid to these two women who alleged they had affairs with the President.

If you take a look at these individuals, let's put that up on the screen once again, Hope Hicks, Michael Cohen, the President's former lawyer, Keith Schiller, who was in charge of security, David Pecker, the publisher of the National Enquirer, Allen Weisselberg, the long time Chief Financial Officer of the Trump organization, this is a big deal.

BASH: Look, it doesn't get closer to the Trump inner circle at that time than the people you just put on the screen, not only Michael Cohen, but even more importantly, Keith Schiller, who was long time body guy, security guy, with him all the time, and, of course, Hope Hicks, we know, was his communications person. And the question is whether or not they are being asked about the President's role to keep in their back pocket for when he is no longer the President, maybe he can be indicted, or for other broader reasons because we know that they've got their answers with regard to Michael Cohen and his case and his vulnerability on this, he was convicted of doing, and that the President himself was named in that.

BLITZER: Individual number one.

BASH: Individual number one. So this -- if I'm President Trump, this is extremely troubling.

BLITZER: Well, legally, Jeffrey Toobin, Allen Weisselberg and David Pecker, they got immunity in exchange for their cooperation, limited cooperation.

TOOBIN: At the moment, the view of Southern district of New York is that the whole thing was Michael Cohen's fault. Now, you can think what you want about Michael Cohen, but who was the beneficiary of that Trump money -- of that -- oh, I said, hush money, but I said Trump money, it was Trump money, ultimately. And so the question arises, are they going to charge the person who was the real beneficiary of this, who was Donald Trump.

And, indeed, as Dana pointed out, in the charging instrument to which Michael Cohen pleaded guilty, it said that the payment was at the direction of Donald Trump. [18:40:03]

And for a campaign finance violation, it's usually the candidate who is at fault, not someone doing the candidate's bidding.

BLITZER: We'll get Phil to weigh in.

MUDD: Yes. I think this is interesting really that people, they are nerving (ph), especially Schiller. I mean, do you want to watch TV in black and white or do you want watch colored. Black and white is emails, it's phone, it's financial records. I want to talk people, like bodyguard, saying, what did people talk about in terms of the President's relationships with these women?

You're not going to see that in email, you're going to see that in a financial transaction. Hope Hicks said on the way out of the White House, hey, I told white lies for the President. What were those were those white lies? Did any of them relate to personal relationships with women? You can get color from interviews, you cannot get from technical information. That's what's going on here.

BLITZER: And the President today, Sabrina, on another sensitive issue, made it clear he has no intention of releasing his tax returns from the last six years.

SIDDIQUI: Yes. The President has maintained that he cannot release his tax returns because he's under audit. Now, it's important to note that it doesn't say anywhere and the IRS itself has said being under audit wouldn't preclude someone releasing tax returns. And Michael Cohen, the President's former personal attorney, suggested in his testimony on Capitol Hill that the President was not, in fact, under audit. In fact, Cohen said he believed that the President was reluctant to release his tax returns because he then may find himself under audit and be forced to pay untold penalties.

But democrats have made it clear that they intend to go after those tax returns, which signals that we're headed toward yet another protracted legal battle.

BLITZER: So the deadline that the House Ways and Means Committee Chairman said is later tonight, I assume at midnight.

TOOBIN: Yes. And the response of the administration, the President, the Secretary of the Treasury, the Commissioner of the IRS is a gesture that we are not supposed to use on television, and it's going to wind up in court. And we'll see what happens.

BASH: George W. Bush used to call that the one-finger salute.

TOOBIN: One-finger salute, yes.

MUDD: You know what I can't get over is I was nominated for a third rate chump change position that required Senate confirmation in 2009. I was required to hand over more financial information to the Senate than the President is, himself, handing over for a third rate position at the Department of Homeland Security. Unbelievable. TOOBIN: And how many electoral votes did you get, Mudd?

MUDD: I think 400.

BLITZER: Everybody stick around.

BASH: A popular vote is a different type.

TOOBIN: You won't have to turn over --

BLITZER: We've got an important programming note for our viewers. Be sure to tune in later tonight, 10:00 P.M. Eastern when I'll be moderating a CNN Democratic Presidential Town Hall with Washington State Governor Jay Inslee, 10:00 P.M. Eastern, later tonight. I'll be back for that.

Just ahead, growing pressure on a Hollywood star to plead guilty in the college admissions scandal, plus, a deadly explosion that leveled a building and injured more than a dozen people. We're learning new information. Stay with us.


[18:47:21] BLITZER: All right. We've got some important breaking news. We just received a copy of a letter that the secretary of the treasury, Steven Mnuchin, has just sent to chairman of the House Ways and Means Committee, Richard Neal, the Democratic chairman, in which he explains that Department of the Treasury, the IRS, they need more time to review the request, whether or not to hand over six years of the president's tax returns to the House Ways and Means Committee.

Among other things, Steve Mnuchin, the treasury secretary, says: Given the seriousness of the issues which bear no connection to ordinary tax administration, we have begun consultation with Department of Justice to ensure that our response is fully consistent with the law and the Constitution.

Dana, this is significant. They're not saying they're not going to do it, they're saying give us more time to consider the legal issues.

BASH: Yes, it's not no. It's not no, and this is a big deal, and we need to talk to other departments, including and especially Department of Justice. It's also interesting the letter comes from the treasury secretary, Steve Mnuchin, who was asked about this very issue yesterday, I believe it was, on Capitol Hill because he -- of course, Department of Treasury oversees the IRS.

So the fact that he is saying, that he is not only responding but making clear in the letter he is going to oversee it is interesting and noteworthy. Obviously, he's somebody who is one of the president's oldest and earliest supporters, but he's taken it upon himself, I don't think he really has much of a choice, but he's saying this in black and white that he's going to navigate the waters so far.

BLITZER: Jeffrey, he says -- in his letter, I intend, this is Steve Mnuchin. I intend to supervise the department's review of the request to ensure taxpayer protections and applicable laws are scrupulously observed consistent with my statutory responsibility.

TOOBIN: I made a flip response a couple of minutes ago and I was wrong. This is a serious response. It is not a no.

And I think the tip off here that it may be a no is the use of the word and the Constitution, because the statute could not be clear. The statute says they shall turn over the tax return to the Ways and Means Committee. But the argument that's been made by the president's supporters is that that isn't somehow unconstitutional.

And that if they are going to refuse to turn over the tax return, I think that's the argument they're going to have to make, because if they just go by the statute, they have to turn over the tax return. It's very clear.

BLITZER: That's another important line, Sabrina, in this letter from the treasury secretary, the chairman of the House Ways and Means Committee.

[18:50:04] The legal implications of this request could affect protections for all Americans against politically motivated disclosures of personal tax information, regardless of which party is in power.

So there is a civil liberties aspect that they're raising as well, that's why they need more time to study it.

SIDDIQUI: Absolutely. And Steve Mnuchin tried to walk a very fine line. His testimony on Capitol Hill yesterday, on the one hand, he said that he fully intends to follow the law, that he will not allow for politics to interfere with the request from Democrats in Congress. At the same time, he defended the president's rights to keep his tax returns private. He also disclosed he has discussed the request with White House lawyers, but he said under oath that he has not personally discussed the matter with the president, himself.

BASH: There is something else interesting in this letter as we are reading it now, that it refers, it starts out by referring to a resolution that the Ways and Means Committee, the tax writing committee, the one that actually requested this, now under Democratic control, a resolution that it passed under Republican control in the last Congress explicitly saying that if this kind of request comes forward, that they knew it likely might, that it should not set a dangerous precedent by targeting a single individual's confidential tax authority and set a dangerous precedent by targeting a single individual's confidential tax return.

Basically saying we knew this was going to come. We kind of laid the ground for -- in order to accuse or potentially accuse Democrats of asking for this for political reasons, and so, we're going to use this, we're going to look at it to see if this jives with the law as it currently stands.

I don't know, Jeff, you can still me if that's denies (ph) or not.

TOOBIN: Well, I mean, you know, it is true that this is an unprecedented legal issue. This law that gives the House Ways and Means Committee the authority goes back decades, but it's never been used in anything like these circumstances, so it's certainly fair for Mnuchin to say this is unprecedented, because it really is unprecedented.

But the law, itself, you don't have to be a lawyer to understand it. It says they shall turn it over upon request. And the request has been made.

Now, the issue that he's alluding to here is whether the targeting of a single individual in a politically sensitive environment may implicate the First Amendment, freedom of speech, punishing someone. That may be the argument that they make, but if they're just going by the law, the law is really clear.

BLITZER: It's interesting. In this letter, Phil, the treasury secretary refers to comments made by the Republican chairman of the Senate Finance Committee and shares some of the concerns who describe the April 3rd request by the House Ways and Means, as lacking the requisite, quote, legitimate legislative purpose and as Nixonian to the core.

MUDD: I think laying this is really interesting in terms of laying this out, partly politically obviously, but as we have been discussing as a legal issue. Look at what's happened during this presidency, the president has said, we are deploying troops. The Pentagon says, well, they got to deploy according to law, not according to what you say.

We just had DHS secretary, Homeland Security secretary leave, evidently because the president is saying family separation. She is saying I have a responsible to interpret the law beyond what you say. Once again, we have a cabinet secretary saying, I understand the political concerns here, but there is a secondary issue, I think a primary issue, what does the law say? Time and the again cabinet secretaries have to look at the president and say, we're responsible for interpreting the law, and that isn't always what you say, Mr. President.

BLITZER: They're making some legal arguments in here as well. They need more time to study it, a serious issue. We can't meet your deadline, give us more time.

But there are several legal arguments, potentially, that Steven Mnuchin, the treasury secretary, is laying out.

TOOBIN: Right. And certainly in the beginning of this letter, he is raising the specter that this is an act of political harassment, not legislative inquiry and that certainly is going to be a theme if they decide to reject this request. But I have to say, it is sort of rich that he's talking in here about the precedent. You know, the precedent is that all presidential candidates already release their tax returns, so this has never come up since the 1970s --


TOOBIN: -- because everybody's already released it. So, the idea that the precedent is the worry, the worry is the

precedent set by Donald Trump by not doing this whole thing voluntarily.

BLITZER: Every president since Richard Nixon has always released his tax returns.

Everybody, stick around. There's more news we're following. We are learning new information right now about the college admission scandal and one of the celebrity defendants accused of buying her daughter's way into an elite university.

Let's go to our National Correspondent, Erica Hill.

Erica, what's the latest?

ERICA HILL, CNN NATIONAL CORRESPONDENT: Yes. Wolf, so what we are hearing is one of the most invisible defendants in this case, Lori Loughlin, who along with her husband allegedly spent $500,000 to get their daughters into college, is not only facing a new charge but also more jail time.


[18:55:14] HILL (voice-over): You'll smiles, a seemingly confident Lori Loughlin just days ago outside federal court in Boston, now facing an additional charge of money laundering conspiracy, CNN has learned the actress' attorneys to this point never engaged in substantial plea discussion. Though that same law enforcement source familiar with the investigation tells CNN, it's not too late.

JOEY JACKSON, CRIMINAL DEFENSE ATTORNEY: The government just raised the stakes completely. Now what they did is up the ante. There's more exposure in terms of jail time, the time to get out and bail out is now.

HILL: On Tuesday, Loughlin and her husband, fashion designer Mossimo Giannulli, among 16 parents hit with the additional charge. They now face two counts. Both carry a maximum penalty of 20 years in prison.

CNN has reached out to her attorney. We have not heard back.

The additional charges coming on the heels of plea agreements for more than a dozen other parents, including actress Felicity Huffman, who said in a statement: I am in full acceptance of my guilt, and with deep regret and shame over what I have done, I accept full responsibility for my actions and will accept the consequences that stem from those actions.

The government is recommending Huffman be sentenced at the low end of the guidelines and as part of the agreement will not bring further criminal charges.

ANDREW LELLING, U.S. ATTORNEY: There can be no separate college admission system for the wealthy and I'll add there will not be a separate criminal justice system either. HILL: The outrage flows freely when the accused are wealthy and well-

connected. It is impossible to miss the stark contrast between Loughlin signing auto graphs at the airport hours before appearing in court last week and Huffman on the same day.

JACKSON: I think the optics of being outside of court, behaving in that way, they do matter. I think they matter in terms of public perception, they matter in terms of whether you are getting an understanding of what this is about. They matter in terms of contrition. They matter in terms of, you know, really remorse.


HILL: And we are told it's possible there could be more charges filed. Meantime, over two dozen lawyers penned a letter, accusing the U.S. attorney who's handling this case of so-called judge shopping, saying their client shouldn't be lumped together in one indictment because they didn't know one another prior to the case. In response, a federal prosecutor called that letter a, quote, Hail Mary -- Wolf.

BLITZER: Erica Hill, thanks very much.

There is more breaking news, this time coming out of Israel, where it appears Benjamin Netanyahu is on course to secure a record fifth term as prime minister.

CNN's Oren Liebermann is working the story for us. He's in Jerusalem.

Oren, what's the latest?

OREN LIEBERMANN, CNN CORRESPONDENT: A short time ago, Netanyahu's rival, his former chief of staff, Benny Gantz, conceded the election, saying they will abide by the people, they will abide by the process here and leave it up to the president. Given how these numbers look, given Netanyahu's right wing block, it looks like Netanyahu is on course with easy path to putting together a coalition.

That means, as you pointed out, it would be a fifth term for him. He would become Israel's longest serving prime minister sometime this summer. The numbers head to head were fairly close. Netanyahu and Gantz after some 4 million votes were counted, were over 13,000 votes apart. But again, that path to a coalition clearly for Netanyahu.

Where does the process go from here? There are a couple of hundred thousand more votes to count from soldiers, from diplomats. After that's counted, it will be next week that the president here meets with different parties and recommends a name, puts the path of forming a coalition to a prime minister and that as we are learning now is going to be by everything it looks like Netanyahu -- Wolf.

BLITZER: The prime minister, he veered far right towards the end of this campaign, pledging to annex West Bank, Jewish settlements if reelected. Do you think he will actually follow through on that pledge assuming he does form the next government in Israel? Because so many are concerned that would effectively end any hope of an Israeli-Palestinian peace deal? LIEBERMANN: Well, if he does follow through on that pledge, it

depends on how much, to what extent he follows through. If he goes after unilateral annexation of the settlement blocks, which are built up Jewish settlements in the West Bank, right along the green line, well, those have always been viewed under land swaps with the Palestinians.

If he tries to do that unilaterally, let's be honest here, he probably has the cover of the Trump administration. If he goes after the isolated settlements, some which are very deep in the West Bank, then absolutely, that very well would be the end of a two-state solution.

Crucially what we are waiting for is Trump's peace plan. We are expecting it sometime in the next few weeks or months with the speculation that it's coming up after the election. Netanyahu, according to what he says, hasn't seen the full details of that, he is very unlikely to make a move on his own that would forestall that or that would have any influence on that until it's on the table from the Trump administration.

BLITZER: Yes. We know President Trump called President Netanyahu today to congratulate him on his win. Oren Liebermann in Jerusalem, thanks very much.

And thanks to our viewers for watching.

"ERIN BURNETT OUTFRONT" starts right now.