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Washington Awaits Mueller Report at Trump's Legal Team Works on Response; Lori Loughlin & Husband to Enter Not Guilty Pleas in College Admission Scandal; Sarah Sanders: Democrats "Not Smart Enough" to Understand Trump Tax Returns; Democrats Set New Deadline for Treasury Secretary to Turn Over Trump Tax Returns; Buttigieg Formally Enters Race Already in Number-3 Spot. Aired 11-11:30a ET

Aired April 15, 2019 - 11:00   ET


[11:00:00] ANA CABRERA, CNN ANCHOR: The Josephsons say they also want every state in the U.S. to require drivers to have license plates in the front as well as the back of the car.

Thanks so much for being here with me today. Hope your week is off to a good start. I'm Ana Cabrera.

"AT THIS HOUR" with Kate Bolduan starts now.

KATE BALDWIN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. Thanks so much for joining me.

The White House, Washington and the world await. And I don't think I'm exaggerating too much there. At any time now, Attorney General Bill Barr will be releasing the long-awaited special counsel's report on its Russia investigation. Now, we know that it will have redactions. How much and how many, that is still a question.

While everyone waits to see what's inside the nearly 400 pages, White House officials and the president's legal team are working on how they will respond. Rudy Giuliani telling CNN's Dana Bash that they are actually reworking a rebuttal that they had written months ago. Giuliani saying he doesn't think any of the redactions will be covered by executive privilege because he said that Bill Barr hasn't consulted with the White House counsel's office.

Let's get to it, where things stand, where things go.

CNN's Kara Scannell is in Washington and joining me now.

Kara, what are you hearing about the report's release?

KARA SCANNELL, CNN CORRESPONDENT: Kate, I mean, Washington is on the edge of its seat as we await Bill Barr's release of the full Mueller report nearly two weeks after this investigation began. The timing is still fluid. It could come any day this week. Bill Barr testified last week on Capitol Hill that it would come this week, that he was in the final stretches of dealing with these redactions. The big questions remain, how much is going to be redacted and what does the report say about the president's role in obstruction of justice and Robert Mueller's investigation there. Bill Barr said that the report from Mueller did not conclude that Trump had obstructed justice but it did not exonerate him, either. I think that's where we're going to see lot of attention focused.

Now, Rudy Giuliani told our Dana Bash last night that they are preparing a rebuttal for this report. They may come out with a short statement at first and then a more fulsome report they've been working on for quite some time. I think we will see a lot of Rudy Giuliani in the days ahead after the report is released.

And it also comes as Congress is out on recess, out this week for the holidays, and so I don't think that's going to slow down their reaction coming from lawmakers. But they are expected to take this up again when they are back because they are pursuing their own investigations of the president and there's going to be a lot of review of this report to see what more they need to do on their investigative steps -- Kate?

BOLDUAN: Absolutely.

Great to see you, Kara. Thank you so much.

We have breaking news coming in just now. Lori Loughlin, the actress, is now entering a not guilty plea for her role in the college admissions scandal.

Let's get over to CNN's Brynn Gingras who has all the details.

Brynn, you've been following this from the beginning. We were waiting to see what the move would be for Lori Loughlin and now you know.

BRYNN GINGRAS, CNN CORRESPONDENT: Exactly, Kate. We were hearing that they weren't ready to take the plea agreement with the government at this point. And when I say "they," meaning her and her husband, who are both accused in the college admissions scheme. Now this is just a formal paperwork that has been filed in the courts in Boston that she is going to plead not guilty. She's saying that she's received the superseding indictment, as did 15 other parents, saying they've got that extra charge of money laundering against them now. And now she's going to waive a formal arraignment and plead not guilty. Essentially, she doesn't want to appear in court again to make that formal arraignment and make that formal not guilty plea.

It does appear she is going to fight this. Again, the government has always said they can take a plea agreement at any point, but it does look like they are not ready to take this plea and they're going to fight these charges.

BOLDUAN: Can you remind folks because every -- every case, every accusation is different depending on each one of these parents, right?


BOLDUAN: Can you remind folks what Lori Loughlin and her husband are accused of, what they are accused of and charged with, with regard to getting their kids into school. GINGRAS: Yes, essentially, she and her husband, Fashion Designer

Mossimo Giannulli, are accused of paying half a million dollars to get both of their daughters into USC by using this scheme. The mastermind behind it, Rick Singer. He basically helped them alter photos, get their daughters in as crew recruits, even though neither of them have ever rowed that sport. They've basically have been at USC this entire time. And the argument there is that they shouldn't be because they went through this side door of admissions without actually applying the way other students have.

So of course, they've seen so much backlash. We even reported last week their youngest daughter, who is sort of on social media influencer, Olivia Jade, she is almost staying off social media at this point because she's receiving hateful comments on her posts because of all of this. And really their fates are in question. We know that USC at this point in keeping their admissions into their school on hold while this is still being investigated on a case-by- case basis.

[11:05:03] We also know the government may pass on more charges to some of these students. And that may also be a bargaining chip for some of these parents. Again, 16 of them now entering not guilty pleas, like Loughlin and Giannulli. It's possible their children could face more charges and that may be a bargaining chip for the government to say, your kids will face these charges if you don't plead and make an agreement with us.

We'll have to see how this plays out in the courts. But, for now, this is their first step, pleading not guilty officially in the Boston courtroom.

BOLDUAN: Really amazing.

Brynn, thank you so much. I really appreciate it.

Let me bring in CNN legal analysts and former federal prosecutors, Elie Honig and Jennifer Rodgers, on this.

I want to get into the different application as to how different defendants, if you will, are handling these charges and accusations against them because there are so many parents wrapped up in this.

But, Elie, first your reaction to Lori Loughlin and her husband, the fashion designer, pleading not guilty.

ELIE HONIG, CNN LEGAL ANALYST: I think it's a big risk, Kate. And I think it's a big mistake. The evidence against Lori Loughlin looks very strong, including recorded conversations. And generally in federal court, the rule is, from the prosecutor's perspective, the best plea offer is going to be the first one and it only gets worse as you get closer and closer to trial because the prosecutor sinks more and more resources into the case. It looks like what happened here is what prosecutors do. And I handled a lot of large number of defendant cases. You tell the whole group, you say here is the deal, you can take your plea by April, whatever, if you take the plea then we will give you this deal, if not we're adding these additional charges -- we saw the money laundering charges added -- and then you're going down a whole new road.

BOLDUAN: Jennifer, what do you think of what Brynn was saying of the possibility that the prosecutors have held out there that there could be charges against some of these kids, some of these students, and what that would mean when it comes to their parents?

JENNIFER RODGERS, CNN LEGAL ANALYST: That's only, of course, going to apply to the students who knew about the scheme and who voluntarily participated in the scheme.


RODGERS: It may not actually apply for all of these families. But for those who actually have kids who are chargeable, I think it's going to be a huge factor. I mean, I can't imagine allowing a child of mine to plead to a charge or be charged with a criminal offense for something that I did.

BOLDUAN: I know.

RODGERS: It should be a big deal for them.

BOLDUAN: And so if we just look at -- and obviously, there are many, many parents that have been charged in this. If you just look at, let's see, the different kind of approach, if you will, Elie, between Lori Loughlin and her husband. Felicity Huffman, the other actress, Felicity Huffman when she was facing these charges she took that deal. She took a plea deal. Then she put out this statement, and I remember it, saying, "I am in full acceptance of my guilt and with deep regret and shame over what I have done." She went that -- she went one route for sure. And it looks like Lori Loughlin and her husband are taking an entirely different route. It's also two different situations of how they went about -- they are accused of going about getting their kids into college, one went we are going to pretend they were playing a sport they weren't. And Felicity Huffman allegedly paid $15,000 to an organization to facilitate her daughter cheating on the SATs. What do you think?

HONIG: I think Felicity Huffman is going the full contrition route and I think that's the smart play here. Anytime you have a case come in, from the defense point of view, you have to access quickly, is this a trial case, a case we might be able to beat, or is it a sentencing case, where we are not going to be able to overcome the charges, we're just trying to minimize the damage on sentencing. I took one look at this case and I talked to other defense lawyers on our staff here, who say this is a sentencing case. I think Felicity Huffman has a realistic chance to avoid prison as a result. Her sentencing range under the federal guidelines, which is advisory not mandatory, but it's important, is four to 10 months. When you get it down to that level, you have a reasonable chance to convince a judge to spare your client any prison time. And I think we're going to see a big difference in the end results for Huffman and Loughlin.

BOLDUAN: Jennifer, just a final thought of what the next steps are here. I mean, this is a huge batch of cases and they're all playing out. I mean, it's going to be -- for some, it's a fast track, right, they're pleading guilty and are going to be sentenced. And for others, I mean, this looks like, for Lori Loughlin, this is going to play out over a long period of time.

RODGERS: That's right, Kate. I mean, when you charge this many defendants at once, what you're trying to do at the beginning as prosecutors is to thin the herd. You're trying to get a bunch of those folks out of the case so you can focus on those remaining. What they will be doing with Lori Loughlin and the others, who don't plead, is continuing to gather evidence, maybe adding charges in order to persuade them that they don't want to take this to trial and preparing for trial for those who don't want to plead guilty. It is at the beginning stages and prosecutors will keep on working and getting people out of the case as they can with guilty pleas.

BOLDUAN: Jennifer, Elie, thanks so much. Really appreciate it on breaking news coming in just this hour.

Meanwhile, right now, President Trump is on his way to Minnesota where he's going to land in the home district of Democratic Congresswoman Ilhan Omar. Why that is noteworthy today is because Omar said last night she is receiving death threats after the president tweeted out a video that combines comments that Omar made about the 9/11 attacks with images of lower Manhattan burning. Omar says that many of the threats she is receiving now are directly referencing the president's video. Speaker Pelosi has said she is worried about Omar's safety and has the capital police getting involved now to give her another security risk assessment.

[11:10:26] CNN's Sunlen Serfaty is on Capitol Hill. She has been following this.

Sunlen, this is another extraordinary situation that I hope is not lost in the chaos of every day. A sitting member of Congress now is getting a new security assessment because of something -- basically because of something that the president of the United States tweeted out about them. What are you learning?

SUNLEN SERFATY, CNN CORRESPONDENT: That's right. It's so significant, Kate, an important story to stay on. Ilhan Omar is one of the first two Muslim-American women in Congress. She has already been receiving death threats. Her office has been clear she has faced death threats in the past. But they do say, in light of the president's video he posted on his Twitter account on Friday night, that there has been a sharp increase in the number of threats to her life.

Specifically and what's notable there, and I want to highlight what you said, is they said maybe of those death threats directly refer to or reply to the president's video themselves. So clearly, there's some correlation here. And that's the point that Ilhan Omar's office is saying. And they, of course, say that they are also referring all of these death threats to the Capitol Hill police. And they work, of course, in conjunction with the FBI on the investigation.

But rightfully so, the speaker of the House coming forward and trying to take control of this narrative. She said she has spoken to the House sergeant-at-arms, that she had ordered a security assessment to be conducted to keep Ilhan Omar's family and as well as the congresswoman safe when she is here in D.C. And Pelosi saying, in part, in a statement, "The president's words weigh a ton and his hateful and inflammatory rhetoric creates real danger." And she has called, Kate, for President Trump to take down that tweet and that video.

BOLDUAN: We will see if that happens.

Sunlen, really appreciate it. Thank you so much.

Coming up for us, we have surging in the polls and in in money right now, Mayor Pete Buttigieg, officially entering the 2020 race yesterday. Can he continue to defy expectations going forward?

And it is Tax Day. You likely do not need that reminder. Still, no tax returns coming from President Trump. Why is that? The White House says Congress -- here is a new reason -- Congress isn't smart enough to understand them. What Democrats have to say about that, next.


[11:16:56] BOLDUAN: It is Tax Day and that seems a perfect opportunity for the Trump administration to lay out in detail why the president does not want to release his tax returns. We've heard the same reason effectively since the 2016 campaign, that the audit, which has never been confirmed and doesn't prevent him from releasing them anyway, but regardless of that, it's because of the audit that the president wouldn't release his returns. This time the White House tried a new excuse on for size.

Listen to Sarah Sanders.


SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: I don't think Congress, particularly not this group of Congressmen and women, are not smart enough to look through the thousands of pages that I would assume that President Trump's taxes will be. My guess is most of them don't do their own taxes. And I certainly don't trust them to look through the decades of success that the president has and determine anything.


BOLDUAN: For what it's worth, the Congressional Research Service says there are actually 10 accountants in Congress, including two Senators and eight members of the House. Not to put too fine a point on it, but I can't help myself, if they're qualified to write tax law, shouldn't they be qualified to read a tax return?

At the same time, House Democrats aren't giving up their fight, setting a new deadline for the Treasury secretary to turn over the president's returns. That deadline is April 23rd.

Where is this headed? With me is David Cay Johnston. He's the author of "It's Even Worse Than You Think, What the Trump Administration Is Doing to America." David has won a Pulitzer for his coverage of tax law for the "New York Times."

It's great to see you, David.


BOLDUAN: Can I just get your thoughts on that latest reasoning coming from the White House, Sarah Sanders of why he shouldn't be turning over his taxes, they aren't smart enough to understand them?

JOHNSTON: The Congressional Joint Committee on Taxation employs about 70 tax lawyers and tax accountants who are among the very best experts on this in the country. Furthermore, they can bring in, if necessary, consultants from the tax avoidance world to help them if over the returns. This is just typical Trumpian nonsense. It has no basis in fact, Kate.

BOLDUAN: And there has been a lot of analysis over how the law is pretty clear and pretty clearly states the tax returns need to be turned over. This 1924 law we have talked a lot about it in the last couple weeks. You have written about it, you also say that that very same law offers very little wiggle room, that if the Treasury secretary and the IRS commissioner they don't turn them over, then they shall be removed from office. Can you explain?

JOHNSTON: Well, this is another provision of the tax code to ensure integrity. And it says that any employee of the federal government who impedes or who does not do his or her duty in enforcing the tax law shall be removed from office and can be prosecuted, sent to prison on conviction for five years, and fined $10,000. So not only does the 1924 anti-corruption law not have wiggle room about turning it over, there's an enforcement mechanism here. And, of course, in addition Congress can hold Charles Rettig, the IRS commissioner, and Steven Mnuchin, the Treasury secretary, in contempt if they don't comply by April 23rd, which is the extended deadline to turn over the requested documents for some of Trump's business returns as well as his returns.

[11:20:15] BOLDUAN: How many people in the administration do you think could have exposure here beyond Mnuchin and the IRS commissioner as you're talking about?

JOHNSTON: Well, in theory, anybody who was not acting as a lawyer giving advice for the government and who touched this could be in trouble. But as a practical matter, it's Rettig who, is Donald Trump's hand-picked tax commissioner, a man who was a specialist in helping very wealthy people when they got caught cheating get out of the more severe penalties for having done so and doing it behind closed doors. That's why I call April 15th Tax Secrecy Day.

BOLDUAN: You also wrote this, and I want to read part of it. This is in the piece that you put together on this. You wrote this about the Treasury secretary and the deadlines that Congress has set: "Mnuchin can't stall forever. If he and Rettig, the IRS commissioner, try endless inaction forcing Democrats to sue in court, the failure to act could result in the same painful results as outright refusal to comply."

Do you have any sense of how long is too long?

JOHNSTON: Well, Neal, Chairman Neal, of the House Ways and Means Committee, has extended the deadline 10 days to the 23rd. So that would be next week.


JOHNSTON: At that point, I would expect then that the House will hold hearings, seek perhaps a contempt citation. They may or may not go to federal court. And if they do go to federal court, we should all hope that this is an expedited matter that doesn't drag out forever. There's absolutely no legal basis for withholding these returns. We created our Constitution specifically to tax us and Congress has the power here about tax, not the executive. The sole role of the executive is to faithfully execute the laws that Congress passes. And Donald Trump, Mick Mulvaney, Mnuchin and Rettig all are in a position, if they don't comply, with defeating the laws of the United States.

BOLDUAN: And just to make sure I understood it so clearly, David, if I say to you, David, you just aren't smart enough to understand, that doesn't mean I don't have to give them over to you.

JOHNSTON: No. You think it's partisan when, in fact, it's oversight. There's no wiggle room. The law simply says that upon written request of the chairman of Ways and Means, Senate Finance or the congressional employee who is chief of staff at the Joint Committee on Taxation, the returns and related information "shall" be turned over.

BOLDUAN: We shall have you on much more because this is not over.

Thanks, David, I appreciate it, man. Thanks for your expertise.

JOHNSTON: Thank you, Kate.

BOLDUAN: Coming up for us, can the young mayor of a small Indiana city become the next president of the United States? Mayor Pete Buttigieg now officially in the race. His hometown announcement is already paying off in a big way. That's next.


[11:27:44] BOLDUAN: From midwestern mayor to holding down third place in some Democratic presidential polls, and now he's made it official. South Bend, Indiana, Mayor Pete Buttigieg returning home over the weekend. After months of acting like he's running for president, he announced that he's doing just that.




BUTTIGIEG: They call me Mayor Pete.


BUTTIGIEG: I'm a proud son of South Bend, Indiana, and I'm running for president of the United States.


BUTTIGIEG: That's why I'm here today, to tell a different story than Make America Great Again.


BUTTIGIEG: Because there's a myth being sold to industrial and rural communities, the myth that we can stop the clock and turn it back.

It is time to walk away from the politics of the past and towards something totally different.


BOLDUAN: And it is an announcement that is paying off already for the mayor. His campaign saying that, in the hours after he took the stage, they brought in a million dollars in donations. What does this momentum mean this early on in the race right now?

CNN's senior Washington correspondent, Jeff Zeleny, is here and CNN's political director, David Chalian.

David, he has been running for months now. There was really no question when I had interviewed him back at the beginning of February, after he had launched and exploratory committee. But now, raising a million dollars in the hours after making it official, what does that say about where his campaign is right now?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: First, I will just say this is why candidates like to have a couple of bites at the apple, why they sit down with an interview when they've launched an exploratory committee.


CHALIAN: But then have an announcement speech so they can raise money off of that. That much accomplished, I guess. Using that moment correctly. But to your point, there's no doubt by any metric that Pete Buttigieg had a surge of momentum over the course of the last six weeks, from not many people knowing who he was at all to just talking about how to pronounce his name, to being squarely in the pack of that second tier of contenders. Not Joe Biden and Bernie Sanders, very well known, former presidential candidates, but he is right there now with Beto O'Rourke and Kamala Harris and Elizabeth Warren and others. And so doing that is no small feat. The big question now is, how does he now take this and catapult himself even further in this race?