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House Judiciary to Vote on Contempt; Trump Tax Transcripts. Aired 1-1:30p ET

Aired May 08, 2019 - 13:00   ET

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

[13:00:00] CATHERINE LUCEY, WHITE HOUSE REPORTER, "ASSOCIATED PRESS": Acting chief of staff is not making those same efforts.

JOHN KING, CNN ANCHOR: Good luck, Mick Mulvaney. You say he's given up. OK.

Thanks for joining us on INSIDE POLITICS. See you back here this time tomorrow.

Don't go anywhere. Brianna Keilar starts RIGHT NOW.

Have a great day.

BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar, live from CNN's Washington headquarters.

Underway right now, the U.S. is in a constitutional crisis according to the man whose committee could soon hold the attorney general in contempt as the president defies Congress.

Plus, he conned America. New evidence shows Donald Trump the businessman wasn't very good at it. But the question is, was it illegal, and who propped him up financially?

And is America now numb to school violence? Another school shooting this academic year rocking Colorado as children grow fearful of going to school.

Up first, President Trump invokes a sweeping declaration of executive privilege as a House panel prepares to vote on holding the attorney general of the United States in contempt of Congress. Judiciary Committee Chairman Jerry Nadler called for the vote to hold William Barr in contempt after Barr refused to turn over the un-redacted Mueller report.

(BEGIN VIDEO CLIP)

REP. JERRY NADLER (D-NY): The president has stated that his administration will oppose all subpoenas and, in fact, virtually all document requests are going unsatisfied. Witnesses are refusing to show up at hearings. This is unprecedented. If allowed to go unchecked, this obstruction means the end of Congressional oversight. As a co-equal branch of government, we should not and cannot allow this to continue. (END VIDEO CLIP)

KEILAR: So while -- in the meantime, President Trump has invoked executive privilege over the un-redacted Mueller report and the underlying evidence. In a statement, White House Press Secretary Sarah Sanders said, quote, faced with Chairman Nadler's blatant abuse of power and at the attorney general's request, the president has no other option than to make a protective assertion of executive privilege.

Manu Raju is covering all of this from "The Hill."

Tell us where things stand.

All right, unfortunately, we appear to have lost Manu's connection.

Let's see if we can get him back on track there.

No.

All right, Manu Raju is on The Hill.

All right, let's -- well, let's try Manu again.

All right, Manu, you are down there. You're up there on The Hill following all of this. Tell us where things stand.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, it's a very contentious session this morning in the House Judiciary Committee. Democrats and Republicans squabbling over what would happen this morning. The president taking a step to invoke executive privilege to deny Democrats what they have been asking for through their congressional subpoena for underlying evidence and the redacted portions of the Mueller report. This intensifying this battle between House Democrats and Trump administration over all aspects of the investigations that the Democrats have launched into the Trump presidency.

Now, Democrats, this afternoon, will vote along party lines to hold the attorney general in contempt. Then it will go to the full House. Afterwards, expect court action to take place. So this is going to go on for a matter of months.

But just to get a flavor of what happened this morning, listen to this exchange between two congressmen from -- one from each side and arguing about the impact here and one saying that the president should be in jail if he were not sitting in the Oval Office.

(BEGIN VIDEO CLIP)

REP. STEVE COHEN (D-TN): And if it weren't for him being president, he'd be in prison with Michael Cohen today as individual one and he obstructed justice as the Mueller report says it so. We are in danger. We need to respond and we need to act for the people of the United States of America. REP. JIM JORDAN (R-OH): I think it's as my colleague said earlier, I

think it's all about trying to destroy Bill Barr because Democrats are nervous he's going to get to the bottom of everything. He's going to find out how and why this investigation started in the first place.

(END VIDEO CLIP)

RAJU: Now, what Democrats are trying to do right now in the committee is offer an amendment that would actually try to address the president's use of executive privilege. Jerry Nadler, the chairman of the committee, just moments ago offered that. That will probably also be adopted.

But, nevertheless, this is just an escalating fight between the two branches of government that will end up probably in the third branch of government, the judicial branch courts to decide who is right here, not just about the Mueller report, but on a wide range of matters, whether it's about the president's tax returns, whether it's about his finances, now over to the Mueller report. You're seeing a strategy by the White House to deny the Democrats on virtually all of their requests. Democrats planning to push forward, see what happens in court. But this is not going to end anytime soon. It could be a prolonged battle and a bitter battle that could have significant ramifications in the long run.

Brianna.

KEILAR: All right, Manu Raju, thank you.

I want to bring in former DOJ prosecutor, Joseph Moreno, and CNN senior political reporter Nia-Malika Henderson.

[13:05:01] So, the president, Joh, has now asserted executive privilege over this un-redacted Mueller report and the underlying evidence. It's important to just remind people of what this is about. The committees -- the Judiciary Committee is in the process of holding the attorney general in contempt of Congress.

What -- how does this play out in the courts as you see it?

JOSEPH MORENO, FORMER DOJ PROSECUTOR: Well, so I don't like the term "constitutional crisis." I think it's overused. But certainly things are breaking down, right? This is not the way things are supposed to happen.

So, you're right, though, the contempt vote today, when it happens, will be very dramatic. But the fact is, the legal ramifications are unfortunately minimal because there's really no enforcement because the executive branch controls the execution of the contempt.

So really it goes to the courts. And the courts will have to decide, on a facts and circumstances basis, does the privilege assertion by the president outweigh the need for Congress to get this information?

KEILAR: Do you think that we will ever see or Congress will ever see the fuel Mueller report and what's the point of holding Bill Barr in contempt if there's not going to be any sort of -- it appears there's not going to be an attempt to put him in jail, for instance.

MORENO: No, there's not.

Congress will eventually get this information, but it will take a long time and it might not happen in time to actually do anything with it. So, you know, eventually Congress will prevail. There's a strong preference of the courts to defer to Congress in their legislative and investigative priorities. That's fair. But there's many steps that have to be taken before you get to that point. So the reality is, will there be fatigue by Congress, by the executive branch, by the American people as this plays out for another year or two.

KEILAR: Does it also serve as a device for President Trump because I mean this -- this -- he must know how this is playing out obviously and that it's going to drag into his re-election effort.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yes, and this -- Trump likes a fight, right, and he likes a foil, too. And we know who the foils are in this instance. It's Democrats and sort of his favorite foils. Jerry Nadler, who he's never really had a very good relationship going back to their days in New York together.

So, in some ways, you know, it's hard to say who is benefitting more from this fight that will be obviously protracted in some ways playing out on TV over the next weeks and months. If you're a Republican, you feel like, you know, Democrats are dragging this out and you want this to end now and you feel like this is an example of just Democratic overreach. And if you're a Democrat, maybe this is the next best thing to impeachment, right, sort of showing that the president is stonewalling and sort of sugggesting that the president has something to hide. He doesn't want the full transparency when it comes to everything involving the Mueller report.

KEILAR: The excuse that the attorney general put forward for why executive privilege should be used in this case was because he said he hadn't had enough time to review all of these documents. There's a lot, you can imagine, in the underlying documents for the Mueller report. And he said some of them -- and we know they are -- are part of ongoing criminal investigations. That said, is that a reasonable reason for why executive privilege should be exerted?

MORENO: Those are not bad reasons, but executive privilege is not the remedy. So that's a quick stop gap. That's to say full stop, we're not doing this tonight, tomorrow, next week, anytime soon, but they know that that's not going to be the ultimate argument. There are -- there are real arguments here on both sides and reasonable people can disagree on the merits, but executive privilege is not meant to be this large, protective umbrella. It's meant to be for a very narrow circumstances and courts again don't like it. So they don't like it when it's done on the -- on the, you know, one off case. They sure are not going to like it in the absolute.

That being said, it's a delay tactic and it will buy some time.

KEILAR: One of the questions is, what's the end game here for Democrats, right? HENDERSON: Right.

KEILAR: Are they going to move towards impeachment, because their leadership sure doesn't seem behind it? We're always hearing Nancy Pelosi being asked what she thinks about impeachment. She was asked again. Here's what she had to say.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA): Well, nothing is ever off the table, but I would say that there's -- there's -- everybody would take a deep breath and be almost prayerful about this.

(END VIDEO CLIP)

KEILAR: What does -- what does she want --

HENDERSON: Prayerful.

KEILAR: I know and I wondered what you thought about that. What does she want Democrats to pray on, do you think?

HENDERSON: Right, right, right, right, what are you going to the Lord in prayer about when it comes to impeachment? I think, you know, she has essentially said the same thing over and over, it's never really off the table. I think that table is somewhere in a back room in storage, you know, behind bars somewhere.

You know, she knows she has a restless party, restless grass roots people certainly and people who basically voted so that the Democrats could have an aggressive oversight. And that's what we're seeing with these investigations and calls for documents and subpoenas as well. We'll see how long she can hold the dam. I mean you saw some of those folks in that committee today say, oh, the president might be inching closer and closer to impeachment.

[13:10:01] I think the problem with impeachment has always been, they just -- the math isn't there, right? They control the House. They don't control the Senate. Even if they file articles of impeachment, it's not going to remove the president.

MORENO: And it's certainly a political determination. But from a legal standpoint, the best way the Democrats can get this 6-E (ph) grand jury material, and the other material, the underlying evidence that's now being protected by executive privilege, is to have an impeachment proceeding. So it's a bit chicken and egg here, right? Do you go with what you have now? Is that enough of a basis for impeachment?

But having the impeachment proceedings open is the best way to signal to courts, we have a real reason, a real need for this information, therefore you have to give it to us as soon as possible. So it's a bit of a circular problem there.

KEILAR: Very interesting.

Joe Moreno, Nia, thank you so much to both of you. And stand by for us because the vote on holding the attorney general

in contempt is expected any moment.

Also, the president's taxes exposed, revealing huge losses for years. So were any of his actions illegal? And where did he get this mysterious interest income, tens of millions of dollars that experts say almost certainly didn't come from interest. I'm going to speak live with an accountant, next.

Plus, a dramatic move, Iran pulling out of the global nuclear deal and issuing a threat about what's coming next.

Also, it's unacceptable. A school shooting just miles from Littleton, Colorado, becomes America's 35th since the fall. What we know about the suspects who are both students.

(COMMERCIAL BREAK)

[13:16:17 KEILAR: As Democrats struggle to get their hands on the president's tax returns, "The New York Times" has obtained the next best thing, tax transcripts. And they show a very different financial picture of President Trump than the self-professed mogul has projected.

The tax transcripts are from 1985 to 1994. These are IRS generated summaries of the information in President Trump's tax returns for those years. And they show that Donald Trump's businesses lost more than $1 billion in a decade. That's more than nearly any other American taxpayer year after year.

CNN's Tom Foreman is here to explain all of this to us.

Walk us through it.

TOM FOREMAN, CNN CORRESPONDENT: This looks less like "The Art of the Deal" and what we see in "The New York Times" and more like art of the disaster. Look at this loss piling up year after year, from 1985 to 1995. This is the money that Donald Trump was losing as he published "Art of the Deal," as he said over and over again, oh, it's all going well for me. I'm doing great financially. When, in fact, these records suggest he was losing a ton of money out there, so much money that during this period of time eight of the 10 years "The Times" says he didn't pay any federal income taxes.

Now, he was able to stave some of this off, according to "The Times," by acting as a corporate raider for a period of time, acquiring shares of companies with borrowed money, then using his publicity and fame to go out and say, oh, you know, I'm thinking about buying this company to try to get other people to push the price up and then quietly selling things off. This is apparently, according to "The Times," worked for a while but then people got wise to it and said, that's just a bunch of bluster and a bunch of fake -- fake out there that they're trying to get people to pay and prop him up with money.

There's also in 1989 this almost $53 million in interest income that seems to emerge from nowhere according to "The Times." So all of this paints, as you noted, a very, very different picture of

Donald Trump than what he paints of himself.

And the response from the White House has been fairly simple. He said, real estate developers in the 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, much of it non-monetary, sometimes considered tax shelter on and on it goes, basically saying, all of this was standard, everyone was doing it, it was perfectly fine. But then at the end he says, but this is a highly inaccurate fake news hit job. So I'm not sure what to make of that, Bri. That's a little like the lawyer who said my dog didn't bite you because my dog is kept in the yard and I trained my dog not to bite and, by the way, I don't have a dog.

KEILAR: Exactly.

FOREMAN: Yes. Yes.

KEILAR: Yes, it sure is.

Tom Foreman, thank you for taking us through all of that.

FOREMAN: You're welcome.

KEILAR: Let's talk to Richard Pomp he's a tax expert and the former director of the New York Tax Study Commission. He's also a law professor at the University of Connecticut.

First, Richard, I want to ask you about that depreciation explanation that the president gave in his tweet. That wouldn't explain losses, would it?

RICHARD POMP, PROFESSOR OF LAW, UNIVERSITY OF CONNECTICUT: Well, it could. In this case, it does not.

KEILAR: How would it -- why not in this case?

POMP: Well, let me just explain depreciation. You buy a building and you're entitled to deduct a certain amount of the purchase price of the building every year. And you offset that against your rental income. Keep it simple. And if your depreciation is greater than your rental income, you will show a loss from that building.

But when you sort of look at the amount of the losses and you ask yourself, well, how much must the building have been to generate this amount of depreciation, it just doesn't make sense.

So there's more going on here. The mystery interest income, it's probably a re-characterization of something else in order to minimize taxes. I mean we need -- we need the underlying schedules that are attached to the tax returns. And that's why he is fighting so bitterly against releasing his tax returns. At this point, what does he have to lose, at least for these years?

[13:20:19] But the answer is, because there is something in the details. The devil is in the details. Who's really supplying money?

KEILAR: So -- OK, so -- but who's really supplying money? And I want to ask you about that because this -- so you think this $52.9 million in interest income -- am I hearing you right -- it may not actually be interest income, right? That's what you're --

POMP: Yes.

KEILAR: OK. So when you look for that same year, 1991, you look at Fred Trump's earnings, because he actually did earn that year, it -- his earnings were $53.9 million. One million dollars more than the interest income. Does that -- does that raise any questions to you? Is that a possible coincidence?

POMP: Well, the interest is being paid on a loan presumably from Trump to someone. And I doubt he is lending money to the father. He's a borrower, not a lender. So --

KEILAR: No, but I -- that the father -- you don't think the father was lending to him? Or he can't?

POMP: If he was lending to him, then the interest would be paid by Trump to the father, and it wouldn't be received as income by Trump.

KEILAR: OK.

POMP: So there's something else going on it that year. It diminishes subsequent years.

Something's funny about it. We need to look at these schedules. And that's why New York -- it looks like New York's going to turn over the New York state income tax returns to the -- to Congress. But the New York state returns has the federal stuff as an attachment. And my guess is the president will move to keep those attachments from being turned over. So that's probably not a phantasy (ph) either.

KEILAR: Can I just ask you, is there anything that raises a red flag for you when it comes to whether something is legal or not?

POMP: It all raises a red flag because the bigger your losses, the less tax you're going to pay. So it all raises an issue as to where those losses real or were they really manipulations for tax purposes.

Again, we can't answer that from the transcript. We need the underlying return and schedules, which is why he is fighting so hard not to turn those over.

Where is the source of all this money coming from? Is it someone, a Russian wealthy person doing some money laundering as has been suggested? What is really going on? We just don't know. We know that certainly the fortune made by the father was passed on in basically tax evasion on the estate tax. That the October "New York Times" report made pretty clear.

KEILAR: Yes. POMP: So this whole fortune is built around tax evasion. The family's not a stranger to that. His sister, who was a judge, was starting to be investigated on the estate tax issue. And you notice what she did. She resigned.

KEILAR: Yes, she stepped down.

POMP: Yes.

KEILAR: Richard Pomp, I have to leave it there with you. Thank you so much for coming on.

POMP: My pleasure.

KEILAR: So we have live pictures coming to us from Capitol Hill, where any moment now the House Judiciary Committee is going to vote to hold Attorney General Barr in contempt.

And another deadly school shooting, this time in Colorado, making it the 35th school shooting this school year in the country. Why isn't this being treated as the crisis that it is?

(COMMERCIAL BREAK)

[13:28:31] KEILAR: This morning, my team and I were working on my script for this next story about the 33rd school shooting this academic year in Colorado. But then we had to change it because, as we were writing this, we confirmed two other school shootings this week. There was one in Savannah and there was also one in Oregon, making it 35.

Thirty-five school shootings this academic year from kindergarten up to college. The statistics on our shootings at our kids' schools are literally increasing by the hour. And that is unacceptable. This time, Highlands Ranch, Colorado. One person died and eight people were wounded. Two suspects are in custody.

And when we talk about school shootings, you know, this time, this time, this time, that should not be the new normal. Pictures of police surrounding a high school should not be the new normal. Pictures of children with their hands up and, in one case, a little girl holding her hands in prayer should not be the new normal. Unfortunately, for this community, it may be the new normal after so much tragedy.

(BEGIN VIDEO CLIP)

GEORGE BRAUCHLER, DISTRICT ATTORNEY 18TH JUDICIAL DISTRICT: If you had suggested to anyone behind me or in this room that within 20 years and 20 miles we would have dealt with Columbine, the Aurora theater, Arapahoe High School, the shooting of Zach Parish and four other deputies, we'd have thought you mad. And yet here we are again.

[13:29:56] My heart goes out, not just to the victims in this case, but there are those that won't be classified as victims that are feeling it this morning right now, moms and dads looking at each other making decisions about whether or not to send their kids.