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President On Collision Course With The Constitution And Congress Over The Mueller Report; NYT Got Their Hands On Donald Trump's Federal Tax Figures. Aired: 2-2:30p ET

Aired May 08, 2019 - 14:00   ET

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

BROOKE BALDWIN, CNN ANCHOR: Hi there. I'm Brooke Baldwin, you're watching CNN. Thank you for being with me. We begin with the President's collision course with the Constitution and Congress over the Mueller report.

The House Judiciary Committee, now on a break is expected to vote just this afternoon on whether to hold Attorney General Bill Barr in contempt for refusing to turn over the report's un-redacted sections. That is just one of the epic political maneuvers currently underway in this huge fight to get the report's full details.

It has been 20 days since the redacted version went public. This whole counter maneuver meant to keep redacted portions confidential came this morning straight from the White House.

The President has now invoked executive privilege over the entire Mueller report and its underlying evidence and that triggered House Judiciary Chairman Jerry Nadler to accuse the Executive Branch of sabotaging any negotiations over the report.

(BEGIN VIDEO CLIP)

REP. JERROLD NADLER (D-NY): By invoking executive privilege and all of the materials subject to our subpoena, that process has come to a screeching halt. The administration has announced loud and clear that it does not recognize Congress as a co-equal branch of government with independent constitutional oversight authority.

(END VIDEO CLIP)

BALDWIN: But Republicans speaking up today as well on that committee showing their opposition to holding Bill Barr in contempt.

(BEGIN VIDEO CLIP)

REP. DOUG COLLINS (R-GA): This is the first step. What a cynical, mean spirited, counterproductive irresponsible step it is. Meanwhile, our economy is surging, unemployment among several minority groups is a historic low.

The Democrats have no plans, no purpose and no viable legislative agenda beyond attacking this administration.

The House is more than four months into a Democratic majority. How many bills passed by this committee have been signed into law?

(END VIDEO CLIP)

BALDWIN: let's go straight to CNN justice reporter Laura Jarrett. And so Laura, specifically, let's talk about this executive privilege that the White House invokes today. Blanket executive privilege over this entire Mueller report, is that correct?

LAURA JARRETT, CNN JUSTICE REPORTER: That's right, Brooke. And basically, the reason this happened is, as you outlined, the House Democrats and the Justice Department have been negotiating for weeks, both sides trying to make their best record. And the Justice Department thinks they are on pretty solid footing because they've been saying, for weeks to Members of Congress, and leadership in particular, "Come on over to the Justice Department and look at the report. And then you can decide what you need."

And in particular, they said, "We're going to give you everything except for grand jury material." Of course, Chairman Nadler did not go for that as well as the rest of the caucus saying, "That's unacceptable. We want the fully un-redacted report. And we're going to hold the Attorney General in contempt."

And so late last night, the Justice Department had said, "Hold off on that contempt vote because we think -- and we're going to ask the President to invoke executive privilege." And what it really is, is a protective measure to protect all of the underlying materials because they know that there's going to be a court fight here.

The problem here is that it doesn't get litigated very often. It's used executive privilege to shield internal deliberations within the executive branch so that they can't be produced to another branch of government. But a court is going to take weeks, if not months to wait in all of this.

And so in the meantime, the production of the materials, which Nadler wanted is going to grind to a halt, and we had questions earlier today about how this would affect the Special Counsel's testimony. Of course, everyone wants to hear from Bob Mueller, I'm told by a DOJ official that it has no direct bearing on that.

As we know, the House and the Special Counsel's office had been separately negotiating over that, but we wait to see whether a date will be set on that -- Brooke.

BALDWIN: Okay, so we still wait for that, but it wouldn't impact the Mueller testimony, which is a key point there out of all your reporting. Laura Jarrett, thank you so much.

On the head of the House Judiciary Committee has just added new weight to a term, even he says is overused "constitutional crisis." This is what Chairman Nadler told Alisyn Camerota this morning.

(BEGIN VIDEO CLIP)

NADLER: Certainly, it's a constitutional crisis, although I don't like to use that phrase, because it's been used for far less dangerous situations. The phrase has been overused.

ALISYN CAMEROTA, CNN ANCHOR: I hear you, but you feel that we are currently in a constitutional crisis or headed for one?

NADLER: No, no, we're in one. We're in one because the President is disobeying the law, is refusing all information to Congress.

(END VIDEO CLIP)

BALDWIN: Harry Litman once served as Deputy Assistant Attorney General. Harry, always nice to have you on and let's just begin. We're waiting for this big House vote on contempt this hour, right?

So if the AG is in fact held in contempt of Congress, what happens? What are the actual ramifications of that?

HARRY LITMAN, FORMER DEPUTY ASSISTANT ATTORNEY GENERAL: Okay, first, I think it's important to say that they are really still at the precipice -- both Houses are. That is the House is about to grant in committee the authority to go through contempt, but not the actual vote. And Laura's point, there's a nuance there that's important. What they've asserted now is protective executive privilege.

[14:05:10] LITMAN: That is, they're saying there's some stuff in there that might fall under executive privilege. So we're going to throw a blanket over it for now to protect our ability to do it.

I think for this particular fight. In other words, they still have a couple moves to go, and it still might resolve short of an actual court fight. The broader thrust though, is clear, we've got a real sort of stonewall on many fronts that is coming to a high boil between the Executive Branch and Congress.

BALDWIN: Let me hit pause on all of this because as we're throwing around the terms executive privilege -- you know, for people who've been watching along, you know, what is executive privilege? And give me an example of how it's been used in the past, because I know Chairman Nadler actually pointed, you know, to Nixon's case showing that executive privilege cannot be used to cover up wrongdoing.

LITMAN: Yes, it's a great point. So it's a constitutional privilege that inheres in the President only for high-level confidential communications. The idea is, the President has a constitutional right to have candid advice from her or his advisers. And that's what it matters for.

Nixon tried to use it in the Nixon case with his discussions with Haldeman and Ehrlichman, the court said, you have it but it has to yield to something else. So as it pertains to this report, there's basically precious little if anything, that really is of executive privilege here. We have grand jury stuff and ongoing investigations, but not executive privilege.

So the big hammer they're holding really doesn't apply here very well at all. The basic idea, high level confidential communications.

BALDWIN: Okay. And then when you look at what Nadler --

LITMAN: With the President personally.

BALDWIN: Of course, so these are conversations with the President, high-level conversations, thus executive privilege. When you look at what Nadler is doing, Harry, on the one hand, legally, it almost looks like the Chairman of the House Judiciary, maybe fighting a losing battle in getting this entire un-redacted Mueller report, but then politically speaking, do you think that these are steps that must be taken before impeachment proceedings showing that they have exhausted all the options?

LITMAN: Yes, there's a field me to me of a chicken game that he wishes he really weren't in. This is not the strongest stance for him to really, I think plant a flag on.

BALDWIN: Why?

LITMAN: The redactions are relatively modest. They can go over. It's true that Barr has refused and they have a good legal claim to them. But I don't think it's the right place to really go you know -- the hill to die on. There's some hills around the corner to die on.

My best guess is they will really try to sort of save face and tiptoe away from this precipice, even though this afternoon they will vote to give the House authority to hold Barr in contempt.

BALDWIN: Just quickly, you don't think this hill to die on is an important hill to get to the mountain? You know what I'm saying?

LITMAN: That's right, the mountain -- I hear you. The mountain is Mueller's testimony, McGahn's testimony and maybe the rest of the witnesses, that's the mountain.

BALDWIN: Okay, Harry Litman, you are the best. Thank you so much.

LITMAN: Thanks, Brooke.

BALDWIN: We know the President likes to stretch, bends, manipulate the truth. "The Washington Post" has counted more than 10,000 false or misleading claims since he took office. But in that firehose of falsehoods, it is his financial fibbing that just got busted in a major way.

"The New York Times" got their hands on some of Donald Trump's Federal tax figures. These are the ones that date back from 1985 to 1994. And we're seeing a whole lot of red. More than $1 billion in financial losses. So bottom line, it has been a major con job.

CNN's Tom Foreman is here to break down the numbers and some of the techniques that Mr. Trump had used and so Tom, the floor is yours.

TOM FOREMAN, CNN CORRESPONDENT: Yes, the very time that Donald J. Trump was pushing the idea that he was the master of the art of the deal, look at this, his empire was in steep decline. He was out here making these statements about you know, "I've got

enough money more than I'll ever need. If the world goes to hell in a handbasket, I won't lose a dollar. It's been good financially." That's what he was saying right here, as this was coming at him like a freight train -- massive losses. So much that according to "The Times" that for eight of the 10 years here, he didn't even pay any taxes because of all of this.

Now, he was able to stave off some of the early part according to "The Times" by acting as a corporate raider. He would acquire shares of companies with borrowed money, then he would publicly use his fame to contemplate, "I might buy this company. This can be very important to get other people to push the shares up." And then he would quietly sell them. That apparently worked for a period of time until people got wise to it and figured he was just playing them.

[14:10:06] FOREMAN: He also had this influx of almost $53 million of interest in income in 1989, according to "The Times," not really sure where that came from. Of course, the White House responds to all of this as to say, in effect the myth has to continue here.

The President tweeted, "Real estate developers in 1980s and 90s, more than 30 years ago were entitled to massive write offs and depreciation, which would if one was actively building show losses and tax losses." In almost all cases, he cites tax shelters here, you'd get it by building whatever. In the end, he said, "It was all sport." Everyone was doing it. This was all sport.

And then oddly, he adds, and this is all highly inaccurate, fake news. So it sort of, "Hey, everyone was doing it. I was doing it, too, except this is all fake. None of it ever happened." The bottom line, Brooke, as many of his critics have noted, and a lot of people are and even his critics have said, if the President really wants to clear all of this up, it's really simple. Release all of his tax returns.

BALDWIN: Hand over your tax returns.

FOREMAN: Let people see it, and then they can determine if this is fake or if this is true, but this is a big, big blow to the whole image of him as the master dealmaker.

BALDWIN: Yes, it's that $52.9 million that just nobody knows where it came from. Tom Foreman, we know people are digging on it. Thank you so much.

FOREMAN: You're welcome.

BALDWIN: So given what Tom just laid out for everyone, is any of it illegal? What was that mysterious income? And what about the con on the American people? We'll discuss that a little bit more.

Plus 35 -- that is the number of school shootings there have been in this country since the fall. Thirty five. It is unacceptable. And moments ago, we spoke to the father of a student who lost his life in the shooting near Columbine saving others.

(COMMERCIAL BREAK)

[14:16:39] BALDWIN: In 2003, the documentary, "Born Rich" tracked children of wealthy families including 21-year-old, Ivanka Trump, who shared this little nugget about encountering a homeless man with her dad.

(BEGIN VIDEO CLIP)

IVANKA TRUMP, DAUGHTER OF DONALD TRUMP: I remember once my father and I were walking down Fifth Avenue, and there was a homeless person sitting right outside of Trump Tower, and I think I was probably maybe nine or ten or something like this. It was around the same time as the divorce.

And I remember my father pointing to him and saying, "You know, that guy has $8 billion more than me," because he was in such extreme debt at that point, you know?

(END VIDEO CLIP)

BALDWIN: Well, that hasn't aged well, and neither has this. It is a Donald Trump tweet from February of 2012, where he gripes that quote, "Half of Americans don't pay income tax despite crippling government debt." Hello, pot. Kettle calling. Line one."

Linette Lopez is the senior finance correspondent at "Business Insider" and our CNN global affairs analyst, Max Boot is a columnist for "The Washington Post." So this is rich, for lack of a better word.

Linette, first to you, you know, why did banks keep lending this man money when clearly he didn't have much money and was this illegal?

LINETTE LOPEZ, SENIOR FINANCE CORRESPONDENT, "BUSINESS INSIDER": They did keep lending him money for a while and then they stopped. They realized that he was just full of it. And that, you know, he was never going to make good on any of his promises and that there were a lot of analysts tracking his stocks, his public companies that kept saying, look, these are zeros.

Every short seller on Wall Street was shorting Trump companies. In fact, the world's preeminent short seller Jim Chanos describes shorting Trump companies as multiple Titanics hitting multiple icebergs at the same time. It wasn't there yet.

BALDWIN: And yet --

LOPEZ: It was very well known on Wall Street. He found one banker at Deutsche Bank who would deal with him and that's how he's been carrying on for all these years. And it was a very, very well known in financial circles that Trump was not good for money, and he wasn't good for business.

BALDWIN: But since the guy at Deutsche Bank did all the deals.

LOPEZ: A woman. BALDWIN: A woman?

LOPEZ: Lady at Deutsche Bank.

BALDWIN: Lady, lady at Deutsche Bank.

LOPEZ: She was this private banker, yes.

BALDWIN: So it was above board.

LOPEZ: You know, that's -- we're going to find that out. As Deutsche Bank has to give up documents to the House Financial Services Committee, we're going to really see what Trump said about his finances.

We saw in "The New York Times" article, he says, you know, depreciation, that's how I got rid of -- that's how he is able to escape paying so many taxes. Depreciation does not account for all of this. It's part of how bad he is at business. And the fact that he would tend to use other people's money to create companies, and then use that company as his personal checkbook until it went dry.

BALDWIN: So bad at business. This is a man as he -- you know -- had "Art of the Deal" out. This is a man who was in the red, doling out financial advice.

MAX BOOT, CNN GLOBAL AFFAIRS ANALYST: Right. This was more like the art of the steal than the art of the deal. I mean, what you're basically saying is that we elected Bernie Madoff as President.

I mean, this is a guy whose entire business career has been built on smoke and mirrors. There's nothing really there. I mean, we knew that he had a lot of financial troubles in the 1990s. But now we know he had a lot of financial troubles in the 1980s, which basically leads you to ask, was there ever a period when Donald Trump was a successful businessman?

LOPEZ: The answer is no.

BOOT: Yes, the answer is no.

LOPEZ: And Bernie Madoff was way more sophisticated. I mean, what Trump was trying to pull off when he was, you know, caught saying, "Hey, I'm going to buy this company, and the stock would go up," and then he would dump the stock. That's just a pump and dump. That's a very basic scam.

And he, you know, if he could have continued doing that, he would have, but the market stopped believing him so he couldn't do it anymore.

BALDWIN: Where -- either of you, the $52.9 million in interest that just sort of seemingly "poof" came out of nowhere. Does that sound like foreign money to you?

BOOT: I mean, I think there's a lot of questions and this is only raising more questions, not really answering them. I mean, one of the questions was raised by Trump's response to "The New York Times" article where he said, "This was all done to show losses for tax purposes. It was sport." So the question that raises is, was he guilty of tax fraud?

I mean, remember, Michael Cohen, actually, under oath before the House, accused him of doing exactly that, of inflating his assets for loans, and then artificially deflating assets in to pay taxes. That is tax fraud. That is bank fraud. And so that's the question -- well, that's one of the questions raised here? Was Donald Trump guilty?

But these tax returns don't answer it, but that's another reason why it's imperative for the House Ways and Means Committee to get its hands on his more recent tax returns to find out how he actually did business and whether he broke any laws in the course of that.

BALDWIN: You know how he always talks about his finances that's crossing the red line, and we found out today that they actually --

BOOT: Yes, now, we know why or part of the answer why.

BALDWIN: Well, they closed today's Cabinet meeting, so questions cannot be asked shouted the President, which my question to you guys is, what does that tell you?

LOPEZ: You know, this is a very weak, exploitable man, is what it tells me. You know, he needs money from other sources. He has a lot of secrets. If I were looking for someone to blackmail or for someone to convince to do something with a huge bag of money, Donald Trump would be high on my list. That's what that tells me, you know.

BALDWIN: Do you think he is not comfortable answering? He knows he'd be asked questions about this.

BOOT: He clearly has a lot to hide. And the only question is, is he hiding something relatively innocuous? Like the fact that he's not nearly as wealthy as he claims? Or is he hiding actually something criminal? Or is he hiding that he has gotten a lot of money from the Russians as his sons, in fact, I've said in the past.

Remember, Deutsche Bank, which at one point was the only bank that would lend to him had to make a massive settlement of money laundering charges very deeply implicated in money laundering with a lot of Russian clients. So was Donald Trump getting some of that money? The hot money from Deutsche Bank? We just don't know. But these are all legitimate reasons why the House Ways and Means Committee needs to investigate his finances.

LOPEZ: Yes, we need his tax returns from after the Berlin Wall fell and after, you know, Russia started opening up as an economy to the west. And when we see those, I think we'll have a better understanding of what his relationships was thus far.

BALDWIN: Okay, Linette and Max, thank you very much.

BOOT: Thank you.

BALDWIN: Thank you.

LOPEZ: No problem.

BALDWIN: We are learning more about the young hero who lost his life protecting his classmates. Kendra Castillo was just 18 years of age killed in a school shooting not very far from Columbine High School, the 35th in America since the fall. Coming up next, we'll hear from his father.

(COMMERCIAL BREAK)

[14:27:47]

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I'm afraid that one day, I'll go to school and I'll never come out. I'm sorry. What actions, will you take, to protect people like me and my classmates from this happening?

TEXT: 35 U.S. school shootings since the fall. 336 school shootings since 2008. 373,663 killed by gun violence from 2007-2017. If words aren't chanting anything, what about these images?

Parents waiting to hear their child's name called ... or not.

Children with their hands up ...

... at school.

Or clenched ... to pray.

If this isn't a crisis now ...

When will it all be?

Enough.

UNIDENTIFIED FEMALE: It's the worst phone call or text message that you could ever get.

UNIDENTIFIED FEMALE: She said, "Mom, I love you." I said, "What's going on?" And then she said, "It's not just a drill. It's a real lock down, mom. There's a shooting."

UNIDENTIFIED MALE: Not knowing if we would make it out.

UNIDENTIFIED FEMALE: After everything that happened at Columbine and all the suffering that's happened, and now, this is happening to us. You never think that this would be the reality.

(END VIDEO CLIP)