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House Democrats File Lawsuit To Get Donald Trump's Tax Returns; New Polls And Fundraising Numbers Shaking Up The Presidential Race; President Trump Unveils His Plans For This Fourth Of July. Aired 2- 2:30p ET

Aired July 2, 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: Before today, House Democrats had been in a month long back and forth with the Trump administration. Ways and Means Chairman Richard Neal asked for the returns back on April 3rd, deadlines were missed. Letters were exchanged. And then on May 6th, the Treasury Secretary, Steve Mnuchin formally rejected the request.

The House then issued subpoenas to get those returns, which Secretary Mnuchin also rejected, and that brings us to where we are here today in the Democrats 49-page lawsuit. CNN's Lauren Fox has been tracking every development of this whole tax fight. So Lauren, tell me more about this lawsuit.

LAUREN FOX, CNN POLITICS U.S. CONGRESSIONAL REPORTER: Well, Brooke this was months in the making. As you just chronicled, this is exactly what House Ways and Means Committee Chairman Richard Neal has been anticipating for months. He told me back in November, that eventually he expected that this fight was going to go to court.

You know, bottom line here, they want the President's tax information, six years of personal and business tax returns as well as other important taxes information of the President's.

But a few reasons, the Democrats say that they need this in the lawsuit, one of them they need to understand more about the Presidential Audit Program. Back on June 10th, some members of the committee staff went over to the Treasury Department to learn more about that program. They left and they said they still had a lot of questions about exactly how it worked.

Number two, they need to understand whether the President actually personally benefited from the Republican tax plan and they argue that they need to know more generally about how audits are conducted.

You know, the President himself has long argued, you know, "I'm constantly under audit. The IRS is always auditing me." Basically, they argue in this lawsuit that they need the President's tax returns to understand why he is audited and make sure that the IRS is auditing individuals, not just President Trump, but all Americans fairly.

So that is just a little synopsis of exactly what is inside this nearly 50-page lawsuit. But again, this has been a long time coming, but obviously an escalation in the fight for the President's tax returns -- Brooke. BALDWIN: Let's talk through all of this, Lauren Fox for us with this

the setup. Thank you, Lauren. Joe Moreno is a former Federal prosecutor. And CNN political analyst Rachel Bade is a congressional reporter for "The Washington Post," so Joe, when you read into this, we know that the Democrats on Chairman Neal's committee have argued that they need the access, they want these tax returns in order to understand how the IRS administers the presidential audit program. Right? So that's their side.

Meanwhile, you have Treasury arguing it's not a legitimate legislative purpose. Who has the upper hand?

JOSEPH MORENO, FORMER FEDERAL PROSECUTOR: Well, Brooke, Congress has the upper hand. And you know, they've laid out a few good reasons. But the fact remains, they don't need any reason.

I mean, Congress -- it's very clear that Congress has the right to any American's tax returns simply by asking for them.

In fact, I almost think that they kind of undercut that position by putting out these reasons. I mean, they have to do it for legal purposes, because now they're in court. But the reality is, the law is written really straightforward. If the appropriate congressional committee asks for an American's tax returns, the Secretary shall provide them. Full stop. Definitely the advantage here --

BALDWIN: But that's not happening.

MORENO: It's not happening, but the advantage is to Congress.

BALDWIN: Okay, Rachel, we know Chairman Neal is under pressure from other, you know, liberals on Ways and Means. Did he have any other options?

RACHEL BADE, CNN POLITICAL ANALYST: I mean, no, look, the White House has been blocking dozens of congressional investigations into the President.

The only remedy that Democrats have right now is going to the courts, and so that's what you're seeing them do here.

The question really is, I think, how long is this going to take? There was a private presentation about -- less than a month ago -- a few weeks ago, in which the House counsel told House Democrats, this could take months, this could drag into 2020.

And so the big question on everybody's mind is, how long is it going to take a judge to rule. The White House will then appeal it to, you know, an Appeals Court. It could go all the way to the Supreme Court. Do these tax returns come out in 2020 just before the election? And if so, are they going to be embarrassing the President? That's the big thing we're going to be watching.

BALDWIN: Joe, ballpark? I mean, do we have any idea how long this may take? MORENO: It will not be in 2019. It will be in 2020. Questions out

there, whether it's before or after the election? The other question is to, just because Congress gets these returns does not mean they should become public. Right? There's a process here.

So the first step is for Congress to secure them and they clearly have the legal right to do that. Now making them public, that's another story that of course, Congress has to work through.

BALDWIN: I know that there are two other court cases -- just looking at other court rulings, right? So other court cases, Trump has tried to stop House Oversight, House Intelligence Committee and House Financial Services Committee from getting his financial records from banks, et cetera.

And then trial judges we know have sided with Congress on this to your initial point. So when it comes -- how will those other rulings have an impact on this?

BADE: This is a kind of an insurance policy for Democrats on the Hill. Basically, after Michael Cohen came up to Capitol Hill and said that Trump underestimated his wealth for tax purposes to avoid taxes and overestimated it for the case of getting loans from banks for his business. Lawmaker said, "Look, we need to get these statements of financial condition that Trump has been using for years with his company."

And so they subpoenaed this information from his private banks, from his private lenders and that was where the Trump folks stepped in and said, "No, do not listen to those subpoenas. We're going to sue you."

[14:05:27] BADE: Well, we've seen in courts that judges so far seem to be agreeing with the Democrats in the House that they have the authority to investigate that. We're going to see these decisions come out as soon as July, and you know, it's interesting, because the White House has been blocking a lot of these investigations and have kept them from moving forward. Well, those are going to speed up in July.

We see these rulings. We could see this information finally be made public. And we're also going to see Robert Mueller come to Capitol Hill. So Democrats who have been frustrated for months because of stonewalling, they're going to potentially see some action that they've been waiting for, for a long time in terms of their investigations.

BALDWIN: Joe, what do you think?

MORENO: Brooke, I think as many things, it's a question about, you know, legal philosophy versus political expediency, right? Conservatives who support the President like to say that we like to review statutes and interpret them based on the plain English.

Well, the statute is really plain. Right? It says that Congress shall get these tax returns. So it'll be interesting to see people defending the President now kind of chuck aside that philosophy and say, "Well, in order to get to the result, I want, I think the court should look at this and that and the other."

The reality is the law is plain, Congress is entitled to these tax returns; eventually they get them. The only question is when?

BALDWIN: All right -- yes, go ahead, Rachel.

BADE: And also -- I was just going to say, you know, Trump has been stacking the bench with conservative judges, so we'll have to see if that - his measure to sort of do that will help him in the long run, right?

BALDWIN: That's why that story is so, so important in the big picture. Right? Rachel Bade, Joe Moreno, thank you both so much.

The other huge story today, new polls and fundraising numbers shaking up the presidential race. How President Trump just gave democrats 54 million reasons to step up their game. Plus tanks in the streets, flyovers, a big speech from the President on the National Mall. We have new details about President Trump's plans for this Fourth of July. Is it patriotism, or is it politics?

And a hospital patient claims he was arrested after an officer accused him of stealing the IV drip that was attached to his arm? The man was arrested. You will hear from him and his boyfriend coming up live. You're watching CNN. I'm Brooke Baldwin.

(COMMERCIAL BREAK)

[14:12:22] BALDWIN: We're back. You're watching CNN. I'm Brooke Baldwin. Here is a quote, 'You don't need Wall Street or fossil fuel money to harness a movement." That was message today from the Bernie Sanders campaign which became the latest Democratic campaign that released fundraising numbers for the second quarter. Their grand total $18 million.

And I know that number is well short of Pete Buttigieg's jaw-dropping $25 million. Team Sanders said the reason for the difference was clear.

(BEGIN VIDEO CLIP)

FAIZ SHAKIR, CAMPAIGN MANAGER, BERNIE SANDERS CAMPAIGN: Bernie Sanders does not go into close door high-dollar fundraisers and solicit money from corporate executives at their homes. That's a choice he has decided to make because he believes that you need the grassroots campaign to fundamentally change the policies that afflict working Americans.

(END VIDEO CLIP)

BALDWIN: As for the current occupant of the White House, President Trump and his aides are touting a massive haul for their second quarter, some $54 million raked in by President Trump and his committees.

And all of this is coming in his new polls show the race tightening among the nearly two dozen Democrats hoping to replace him.

Check this out. In the first in the nation Iowa caucuses, Kamala Harris now in second place behind Joe Biden and just above Elizabeth Warren among potential voters. That is according to Suffolk University and "USA Today," and moments ago, this new Quinnipiac poll just dropped showing Harris just two points behind Biden at 22 percent and 20 percent, respectively. That is huge. I know it's early.

That mirrors the latest CNN poll, which shows Harris and Warren with significant gains while Biden dropped by 10 points.

Also today, the road to the White House took Pete Buttigieg over to Chicago into the Rainbow/PUSH Conference hosted by the Reverend Jesse Jackson.

The South Bend mayor has struggled to gain traction with African- American voters, one of the most reliable voting blocs for Democrats. And the new CNN poll shows Buttigieg with zero support among potential black voters. Buttigieg address those numbers just before taking the stage.

(BEGIN VIDEO CLIP)

PETE BUTTIGIEG, (D-IN), MAYOR, PRESIDENTIAL CANDIDATE: Look, when you're new on the scene, and you're not from a community of color, you've got to work much harder in order to earn that trust because trust is largely a function of quantity time.

I'm committed to doing that work. But I think the most important question is, will our policy benefit black Americans and all Americans? And if that happens, and if I can show that, I think the politics will start to take care of themselves.

(BEGIN VIDEO CLIP)

BALDWIN: CNN Phil Mattingly is with me and Phil, the Mayor told that audience that tackling racial inequalities is his words, "Not only a matter of justice, but a matter of national survival." Tell me more about his speech.

PHIL MATTINGLY, CNN CORRESPONDENT: Yes, really laying it out in stark terms. I think probably what was most interesting about the speech is, it was wide ranging and obviously, it comes with the context of knowing where he stands in the polls to the African-American voters also knowing what's happening back home in South Bend, where there was an officer involved -- shooting of an African-American man. He has been dealing with that, kind of taking fire from both sides of that equation as well.

[14:15:23] MATTINGLY: But what this speech was, was Pete Buttigieg really trying to lay out as he noted there, his policy solutions and that more than anything else, is what he seems to think will connect. It hasn't connected yet, but when you look at this plan, he calls it the "Douglass Plan" after abolitionist, Frederick Douglass, it is multi prong. And basically, it is talking about criminal justice system reforms,

talking about voting reforms, talking about access to capital for entrepreneurs, U.S. government grants, things like that. Kind of a wide-ranging effort to address several parts of a society that he believes is as he laid it out today systematically broken or systemically broken over the course of the last couple of hundred years, really, in the United States of America.

I think, one of the big questions now is, will that actually track somewhere? Will you see it take hold? And one of the interesting parts of the speech to me, Brooke was that you could see some of the frustration related to the repeated questions specifically about poll numbers. Take a listen.

(BEGIN VIDEO CLIP)

BUTTIGIEG: I am asked how I'm going to earn the black vote in the polls 10 times more often than I am asked how my policies would actually benefit black Americans.

It's as if I'm being asked more about how to win than how to deserve to win. But that is our focus.

(END VIDEO CLIP)

MATTINGLY: And Brooke, implicit in to some degree, explicit in that comment is the fact that Pete Buttigieg believes if his policies have the opportunity to be kind of fleshed out and talked about in the African-American community, he will start to resonate, he will start to connect and to this point, that hasn't happened yet.

I will note, it's not just the policy side of things, he has also taken the tactic of showing the upside of things. You see him down, obviously, Rainbow/PUSH today at that conference, you've seen him in media markets, pretty much targeted towards majority African-American communities. They're trying. I think the big question now is, no matter how much money you have, you don't win a Democratic primary without African-American support.

They don't have that yet. We'll see if that develops over time. Keep in mind, Brooke, six months ago, nobody nationally knew who he was. So he understands that there's a lot of work to do. He says that repeatedly. The question is, can he connect?

BALDWIN: Yes, I suppose if you're looking at zero percent support among black voters, the only way you can go is up, Phil Mattingly. Thank you very much.

Amie Allison is the founder of "She, The People," a political advocacy group focused on women of color. So Amie, a pleasure. Thank you so much for being with me.

AMILE ALLISON, FOUNDER, SHE, THE PEOPLE: Thanks for having me.

BALDWIN: We will get you back to Mayor Pete Buttigieg in just a moment, but I just want to call everyone's attention. I know we've been talking about a lot of numbers. But this is really significant.

With this new Quinnipiac poll, Senator Kamala Harris is now at 20 percent support. You see just two percentage points shy of the front runner, Joe Biden. And I just have to ask, to what do you think -- to what do you attribute this to?

ALLISON: Well, on one hand, the electability argument that we had been being told about up until the debate was really about name ID, and I was hearing on the ground that Biden's support was soft. Well, it's clear that he is slipping.

And that the majority of people of color, who are the base of the party, particularly women of color, had not yet made up their minds.

I think, Kamala Harris's strong showing at the debate, particularly putting racial justice front and center, and really calling Biden to task had the base taking a second look at her and now we see the results. It's really impressive.

BALDWIN: You know, I read that you said that her performance last week, and I think a lot of people would agree with you was a game changer for her and you see the results in this Quinnipiac poll.

But to take it a step further, Amie, you say that the conversation isn't necessarily around busing, but it is, you know, the conversation should be changing to racial injustice, what conversation should we be having on a national scale about all of this?

ALLISON: Right, I don't think people want to re-litigate a 70s busing policy, but to recognize that, who is going to be the standard bearer for the Democratic Party has got to put racial justice front and center and that has to be a driving conversation, both because the Democrats in terms of recognizing how important the black vote, in particular black women, who are the highest vote turnout of any race and gender must speak to racial justice.

It's not just about going back to before Trump was elected, but it is about decades of policies that black and brown people have suffered under. And it's also recognizing that a successful candidacy will speak to half of the party which are people of color, and then build - have both the policies and the organizing chops to build a multiracial coalition that will actually win at the polls.

So there is no path to victory for Buttigieg or Kamala Harris or anyone without securing not only the black vote, but in building the multiracial coalition to win in states that Trump won last time in order to succeed in 2020.

BALDWIN: So what about Joe Biden now?

ALLISON: Well, because Joe Biden is slipping, and he's been on the defense, I think he has either got to answer with a set of very detailed policies and prescriptions about his commitment to racial justice.

We saw after the debates, it's a clean slate that the candidates aren't able to rely on the Obama coalition of 2016 or donors for that matter in 2016. And that he has got to really have a campaign, he has an opportunity to restart his campaign. But he has got to do it with an understanding of who he needs to win.

He was organizing his campaign as if he needed to win over conservative and moderate white voters. But what he's found is that he has to communicate directly to black voters first and foremost, for him, otherwise, the polls are going to, I believe, continue on its descent. So this is a moment of truth for his campaign.

BALDWIN: I want to ask you about Mayor Buttigieg, back to him speaking at the Rainbow/PUSH Coalition today saying that if he can show that his policies will benefit African-Americans, then the politics, the votes will take care of themselves.

You know, his policies in South Bend have come under heavy criticism from neighborhood investments to the police department. He says he wants to work to earn trust. But Amie, how does he do it?

ALLISON; Well, it is about show not tell. And the challenge for him is that he did show his commitment to racial justice. But he -- if he can't form an anti-racist police department in a small town in Indiana, what trust can we have in a candidate for nationally an issue that -- like policing and other issues that impact the black community?

So yes, he might -- he may have a set of policies on paper. I haven't looked at them carefully, yet. I know that he is developing them and they're a little late, but he is running catch up.

And the fact he is trying to run a campaign where he is trying to win over black voters in a crowded field this late, it doesn't really bode well for him building the momentum.

I know he is going to try. I think he is realizing that he needs to speak authentically and credibly to black voters. The question is whether he can do it with other candidates who are doing that much more forcefully.

Julian Castro is coming to mind, but Elizabeth Warren and Kamala Harris, as well as Bernie Sanders have, you know, years of head start for him.

BALDWIN: Amie Allison, founder of "She, the People." Amie, thank you very much. Good to have you on.

ALLISON: Thank you.

BALDWIN: President Trump unveils his plans for this Fourth of July. There will be tanks and a big speech and there's already controversy. We've got those details ahead.

And as Customs and Border Protection launches an investigation after reports of cruel and offensive posts from its Border Patrol agents in a Facebook group, several lawmakers say they are outraged by conditions at migrant detention facilities in Texas. One of those lawmakers will join me live. You're watching CNN.

(COMMERCIAL BREAK)

[14:27:46] BALDWIN: President Trump has big plans -- big plans -- for the Fourth of July. He is producing a massive celebration. He is calling it, "A Salute to America." Preparations are underway to turn the nation's Annual Independence Day festivities into a salute to the U.S. military's prowess.

There will be armored tanks and concerts and jet flyovers and not one, but two firework shows and it will all be capped off by a speech from the Lincoln Memorial by President Trump himself.

But not everyone is on board with this. Washington, D.C. City Council tweeted at the President. "We have said it before and we'll say it again; tanks, but no tanks." Kaitlan Collins is the CNN White House correspondent getting details and all the preparations.

I know there's a lot happening in a short window of time 48 hours away before the holiday. Why is he doing this? And how are they going to pull this off?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, why he's doing this is -- this is something that President has wanted for some time, Brooke, ever since he went to that Bastille Day celebration in Paris, which the President later told the French President was one of the greatest military parades he'd ever seen, and the President wants one of his own essentially.

Now, he's been pushing for one, and there's been some pushback inside not even just from people in the White House, but also from the Pentagon over the cause. And, of course, the optics here, but the President wants his parade and it's turning out that Thursday is going to be quite a spectacle.

There are going to be tanks. They will be parading down Pennsylvania Avenue. They had a concern about what they would do to the infrastructure here in Washington, but they will be stationed here on the streets. There are going to be these military flyovers from the Navy's Blue Angels. And of course, the President himself is even going to give a speech.

Now, Brooke, this is an event that's going to be open to the public. But up close next where the President is, there is going to be a VIP section we are told where some of the President's political allies will be seated.

Of course, the President is already facing some pushback on this from local officials, like you just noted, saying "tanks, but no tanks," but also from -- there are some Pentagon officials who've been reluctant to have a military parade like this because they don't want the Armed Forces to be used to advance any President's agenda.

And of course, there is the concern that the U.S. doesn't need to hold a military parade like this because it's already the most powerful and they don't need to show it off like you've seen some more authoritarian regimes do in the past.

Of course, this is going forward. The White House here is defending the President saying that it's open to the public and that they want everyone to come and it's turning out that is going to be quite a thing on Thursday.

[14:30:10]