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ERIN BURNETT OUTFRONT

Sources: Trump Clashed With G7 Leaders Over Inviting Russia Back Into Alliance; Dinner Was Heated, Sometimes Bitter; Sen. Jeff Merkley Is Interviewed About Why President Trump Backing Russia's Readmission To G7; Deutsche Bank Tells Court It Has Trump-Related Tax Returns Demanded By House Democrats; Wash Post: Barr Books Trump's DC Hotel For $30k Holiday Party; Raises Questions About Ethics, DOJ's Independence. Aired 7-8p ET

Aired August 27, 2019 - 19:00   ET

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


WOLF BLITZER, CNN HOST: ... of that as well. Sam Kiley in Jerusalem for us. Sam, thanks very much for that report. And to our viewers, thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. Erin Burnett OUTFRONT starts right now.

JIM SCIUTTO, CNN HOST: OUTFRONT tonight, clashing behind closed doors. New details tonight about President Trump's fight with world leaders over Vladimir Putin. Plus, a major bank appearing to reveal it has Donald Trump's tax returns. Are Democrats about to get their hands on that? And Attorney General Bill Barr reportedly paid $30,000 to host his holiday party at President Trump's D.C. hotel. A conflict of interest? Let's go out front.

Good evening to you. I'm Jim Sciutto in New York in for Erin Burnett tonight. And OUTFRONT tonight, President Trump clashing bitterly with America's closest allies over Russia. CNN learning tonight that a heated battle took place behind closed doors at G7 gathering of world leaders over whether to allow Russia back into the group, which it was expelled from for invading and annexing part of a sovereign European country.

At a welcome dinner, leaders discussed issues such as Iran and the fires in the Amazon rainforest but Trump interjected to advocate for Russia's inclusion in the talks. The other leaders, they pushed back. The strongest opposition coming from two of America's closest allies, Germany and the U.K. Their reasoning, Russia's increasingly anti democratic stance since it was kicked out of the group in 2014. Plus, of course, the fact that it still occupies parts of Ukraine.

They argued its return would give Putin legitimacy. But Trump continued to make his case publicly over the weekend.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Would I invite him? I would certainly invite him. Having him in I think is more of an advantage. I think it's a positive for the world. I really think it's good for security of the world. It's good for the economics.

It would be good for Russia. I think it would be good for everybody. (END VIDEO CLIP)

Well, Trump's push to get Russia back in the G7 became even more confounding today. As two high ranking U.S. senators say that Russia denied their request for visas. Republican Senator Ron Johnson and Democratic Senator Chris Murphy were scheduled to travel next week to Russia as part of a congressional delegation, but Russia said, "No."

Johnson accusing Russia of playing, quote, diplomatic games. Russia claiming Johnson never asked for a visa, no comment from Russia as to why Murphy was denied and no comment from President Trump in defense of the sitting U.S. senators.

So why does the President continue to advocate for Russia over the objections of us allies and us lawmakers? That's unclear. Here's what we do know about President Trump's thinking on Putin.

(BEGIN VIDEO CLIP)

TRUMP: In terms of leadership, he's getting an A.

Putin called me brilliant. I like it.

I get along with President Putin.

(END VIDEO CLIP)

SCIUTTO: Boris Sanchez is out front tonight at the White House. Boris, I wonder, does the White House have an explanation for why the President is again backing Russia over both U.S. allies but also sitting U.S. senators?

BORIS SANCHEZ, CNN WHITE HOUSE CORRESPONDENT: Not quite, Jim. What we've heard repeatedly from the White House is that nobody is tougher on Russia and Vladimir Putin and President Trump, even though we occasionally get these obvious glaring examples of the president having a bit of a soft spot for Russia, a soft approach when it comes to Vladimir Putin.

This rift between him and the other G7 leaders being just the latest example. Sources indicating that on Saturday night. The president became increasingly agitated when other leaders dismissed this idea of Russia rejoining the G7. Sources indicate that he repeatedly blamed his predecessor, former President Barack Obama for the current situation between the G7 and Russia.

Even though he was told by his counterparts that Russia has become even less democratic than it was back in 2014 during the invasion of Crimea, the reason they got booted from the G7. A source indicated that President Trump was inclined to even hold a vote among the world leaders on this issue, but he held back clearly because he felt that he didn't have enough support.

One source indicating that it was the Italian Prime Minister, Giuseppe Conte, the only other world leader who voiced support for this idea from President Trump. We should point out as you play there in the sound bite, the President was asked it as the host of the next G7, potentially at his golf club in Doral, Florida he would invite Vladimir Putin. The President said, "Yes." So he said he wasn't sure if Putin would accept the invitation, Jim.

SCIUTTO: That's the consistency, right, the question is why the consistent support for Russian positions. Boris Sanchez at the White House, thanks very much. Out front now Democratic Senator Jeff Merkley. He is a member of the Foreign Relations Committee. Senator, we appreciate you taking the time tonight.

SEN. JEFF MERKLEY (D-OR): Thank you, Jim. Good to be with you.

SCIUTTO: So let's start with this news, CNN learning details about this clash between Trump and America's closest allies at this dinner.

[19:05:02] Why do you believe that President Trump is pushing so hard to bring Russia back into a group that it was kicked out of for annexing territory in Europe that it still occupies today?

MERKLEY: Well, the President has consistently refused to take on Russia not over their interference in our elections, not over the annexation of Crimea, not over the occupation of eastern Ukraine, not over the assassination of Russian expatriates. the list goes on and on. And here we are right now with Russia continuing an active social media campaign in the United States, trying to deepen the divisions in our nation, probably going to work to interfere in our next election.

We need a watchdog for America and the President is playing lap dog to President Putin. There is no explanation for it and there is no justification for it. It's pretty horrific.

SCIUTTO: Here is Trump's public reasoning for bringing Putin back to the to the G7. Have a listen, I want to get your reaction.

(BEGIN VIDEO CLIP)

TRUMP: Having them inside the room is better than having them outside the room. By the way, there were numerous people during the G7 that felt that way.

(END VIDEO CLIP)

SCIUTTO: Of course, the President never delineated who those numerous people were. In the simplest terms though, should Russia be required to return the territory illegally invaded before being readmitted to the group that it was expelled from for that illegal invasion?

MERKLEY: Absolutely.

SCIUTTO: So your answer is absolutely not, in other words? They should not be allowed in until they return that territory.

MERKLEY: Absolutely. Yes. They should be excluded until they correct that situation. You have to stand up to horrific action around the world. You can't just roll over and that's what President Trump has been doing. He's been saying, "I love the Russians' leader and he gets an A for

leadership." A for leadership doing very bad actor functions around the world. It is certainly not an A in the eyes of American security or the American people.

SCIUTTO: So two members, two fellow members of the Senate Foreign Relations Committee, Democrat and Republican, Republican Ron Johnson, Democrat Chris Murphy, both denied visas to visit Russia now. Should the President be coming to the defense of sitting U.S. senators here and pushing Russia to grant them those visas?

MERKLEY: He should be coming to their defense instantly. He should be saying, "I've wanted to have a dialogue with Russia, but we're not going to have it if they're blockading American senators from being able to participate in a dialogue and by visiting groups within Russia and dialoguing with Russian officials." You would think you instantly defend the Americans in this situation.

I'm troubled by the parallels that we have under the global Magnitsky Act where the crowd Prince of Saudi Arabia proceeded to assassinate American resident journalist and the President failed to stand up for the American resident journalist and continues to just say, "Well, they buy our weapons, so all they're fine in the world."

These things are not fine and America has been a leader and taken on human rights violations and National Security issues. A leader of the allies. Now the allies, basically, are rejecting American leadership and that was on full display at the G7.

SCIUTTO: Yes. You could say the values have effectively been extracted from U.S. foreign policy under this president. I do want to ask you about one more topic tonight. You, of course, just wrote a book about your visits to the U.S. border and we learned today that Trump administration notified Congress, it plans to move at least $155 million from the Federal Emergency Management Agency, FEMA, that's a disaster relief fund money to immigration enforcement at the border. There's even a tropical storm is nearing hurricane strength.

I'd like to know based in part on your experiences at the border, what your reaction is to the Trump administration moving this money.

MERKLEY: Jim, this is deja vu all over again. I released a memo last year that had been forwarded to me that laid out a massive movement of funds out of FEMA and into projects at the border with no consultation, with Congress, and very concerned that we're undermining the ability to prepare for storms in this coming hurricane season, and to respond to the damage from the storms when they arrive.

The President if he wants money reprogrammed in this fashion ought to come to Congress and lay out the vision, but not take away from preparedness during the middle of hurricane season.

[19:09:58] SCIUTTO: Yes. He tried to get the money from Congress and he couldn't do it, so he's finding other sources. Senator, thanks so much for joining the program tonight.

MERKLEY: It's good to be with you, Jim. Thanks.

SCIUTTO: OUTFRONT next this evening, breaking news, Deutsche Bank all but confirming that it has President Trump's tax returns. Does this mean that House Democrats will get them next and that you'll be able to see them? Plus, the President defending his Miami golf resort what he's considering as the site of the next G7 summit against claims of bedbugs. And some farmers paying a heavy price in the trade war with China, have they lost faith as a result in President Trump?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I need some hope. I need to see some light at the end of the tunnel, which I haven't seen in four years.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[19:14:18] SCIUTTO: Breaking tonight, lawmakers may be one step closer to getting their hands on President Trump's tax returns. In a redacted filing, Deutsche Bank revealing tonight that they have returns that appear to be from the President and his family.

In a letter to the court related to a house subpoena, Deutsche Bank says, quote, The Bank has in its possession tax returns (in either draft or as-filed form) responsive to the Subpoenas for, redacted. They don't mention the name there. "In addition, the Bank has such documents related to parties not named in the subpoenas but who may constitute immediate family.

Out front now Anne Milgram, she's former New Jersey Attorney General and CNN Legal Analyst and Vivian Salama, she's White House reporter for The Wall Street Journal. And based on your experience, long experience in the law, is the bank all but saying that it has Trump's tax returns here?

[19:15:06] ANNE MILGRAM, FORMER FEDERAL PROSECUTOR: I think so. I mean remember the subpoenas were issued by the House committees. They then have been litigating this whole thing in New York and the court basically said, "Do you have the tax returns belonging to President Trump and his family?"

And in response, the bank wasn't willing to answer and then filed this redacted filing saying that they do. So to me, you put the pieces together.

SCIUTTO: So it's a practical matter, does this mean the committee is going to get them and does this mean the committee will then let us, the world see them?

MILGRAM: Well, what it means is that the bank has them and they've told the court that they have them. The case is now before three judge panel in New York and they have not ruled yet. And so it's very possible that they'll rule soon. My feeling is more likely than not that the House of Representatives does get them based on the arguments that happened before the court. SCIUTTO: I see.

MILGRAM: But we still don't know.

SCIUTTO: OK. Vivian, you've been covering this administration for some time and as you know the President has fought for some time to keep these tax returns from seeing the light of day. Is there concern in the White House in the administration that these returns will come out and particularly will come out in election year?

VIVIAN SALAMA, WHITE HOUSE REPORTER, THE WALLS STREET JOURNAL: This is constantly been a concern for President Trump and for his children. They have insisted all this time that this is something that they should be allowed to keep private and, of course, over the course of their business the public really has no business in seeing them.

Remember, President Trump is one of the first presidents in modern history not to reveal his tax returns. He's insisted that he's been under routine audit this entire time. For Democrats, of course, a number of Democrats really are hoping that these tax returns might reveal anything from maybe fraud to even some sort of illicit foreign interests and so for them getting those out and getting them into the public eye, especially before the election is so critical.

But again we have this ongoing court battle going on, President Trump even the Treasury Department pushing back on every single subpoena that has been issued so far. But it remains to be seen if that's going to happen. And, obviously, time is of the essence for the Democrats who want those tax returns revealed to the public before elections.

SCIUTTO: One detail, Vivian, of interest is the Deutsche Bank was willing to do business with Trump when no other bank would, why do the committees then want this particular information? I mean you mentioned the possibility of fraud, the possibility there's been speculation about participation in money laundering, et cetera. Does Deutsche Bank's role in your reporting, is that indicative at all?

SALAMA: Well, this is obviously sort of the treasure chest as they see it, because of the fact that they have essentially had this long standing relationship with the Trump Organization with Trump and his family, not just with the Trump Organization also Kushner companies as well, Jared Kushner's family business as well.

And so they believe that that is really going to be sort of the one major treasure chest in terms of wanting to reveal whatever it is they're trying to get. But again whether or not Deutsche complies with the subpoena as far as the privacy issues in particular, obviously, with the redacted note that we saw today, it remains to be seen if they're going to do that.

SCIUTTO: And the law here certainly better than us, they cite Deutsche Bank statutory, contractual and privacy concerns. What are they talking about there, it's like an NDA?

MILGRAM: Well, there's a federal law that basically says you can't disclose your client's personal information unless there's something like a subpoena or criminal grand jury here. If you think about it, the Congress could get access to it and they could get access to Trump's name and information. But answering the subpoena, we're now in this public court hearing.

And so what Deutsche Bank decided on their own, remember the court didn't authorize this, they just filed a redacted statement today basically saying, "Here's the information, but we're redacting the name because we're worried and we think under the law we don't have to do it."

Now, the court also hasn't ruled on that, so it's still possible that we see it. But, again, it's not very hard to put all of the pieces of the puzzle together.

SCIUTTO: Vivian, before we go, beyond allegation suspicion of something untoward here is just the basic question of how much income did the President have and did he pay any taxes. Those questions, beyond the questions of possible unethical or illegal activity.

SALAMA: It's a transparency issue at the end of the day and that's what a lot of democrats are saying is that at its essence, at least the president should reveal to the public what everybody else is doing, what the person who's been elected to the highest office how he's conducted his businesses prior to coming into the White House. But, of course, President Trump was somebody who believed very fiercely in nondisclosure agreements in his life as a businessman, and so he believes that that information ought to remain private.

It's something that Democrats have also seized on Democratic candidates running for president where a lot of them have gone out and revealed their tax returns because they want to kind of counter what President Trump has done and said, "We have nothing to hide."

SCIUTTO: Well, it's been the practice for decades, Democratic and Republican presidents we should know it.

SALAMA: That's right.

[19:20:05] SCIUTTO: Thanks to both of you. OUTFRONT next this hour, Bill Barr reportedly paying $30,000 to throw a party at his hotel, President Trump's hotel in Washington. Is the Attorney General ignoring conflicts of interest? President is his boss after way. Some farmers who voted for Trump and reconsidering now their support as financial hardships mount as a result of the trade war.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't have second thoughts of my decision in 2016. I'm on the fence of what my decision is going to be in 2020.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[19:24:31] SCIUTTO: New tonight, the sitting Attorney General Bill Barr appointed by this president paying more than $30,000 to use the President's hotel. According to The Washington Post, the attorney general has booked a ballroom at his boss' Washington, D.C. hotel for a family holiday party in December.

The event in the presidential ballroom will include a buffet and an open bar for about 200 people. Out front now, one of The Washington Post reporters who broke that story, Jonathan O'Connell. So Jonathan, the Justice Department, this is an interesting detail, they reviewed this and said there are no concerns. How can that be?

[19:25:04] JONATHAN O'CONNELL, REPORTER, THE WASHINGTON POST: Well, they said that the Attorney General could go forward with it. We don't know the specifics of the review. We just know that no one has said this breaks a law or there's an ethics guideline that this violates.

This is a private party that Mr. Barr holds annually as sort of a holiday party and Irish music party. And he said through a representative that he tried to look at other hotels this year that they were booked and that he chose the Trump hotel because of that, and not because he's trying to curry any kind of favor with the President and some people are just sort of taking issue with that.

SCIUTTO: Well, here's a very specific issue. This D.C. hotel is the center of two ongoing lawsuits about whether President Trump is violating the Constitution by accepting payments from foreign governments who stay at that hotel, many of them choose to stay there as well. And, of course, Trump is being defended those cases by lawyers from the Justice Department which Bill Barr oversees relevant to this discussion, is it not?

O'CONNELL: Right. And that part alone even if Mr. Barr had not booked the Trump hotel has made some people unhappy because, again, like you said, Justice Department attorneys are the ones defending President Trump's business in court against lawsuits alleging that he, again, is improperly taking money from foreign governments at his properties, particularly the D.C. hotel.

Mr. Barr is the top law enforcement official in the United States and I think Americans readily expect him to be fair and impartial in all cases. And the concern that some people have, again, is that he seems to be in some cases trying to please the President more than maybe be fair and impartial to all Americans.

SCIUTTO: Thanks to you. I appreciate having you on. Out front now, National Affairs Correspondent for The Nation, Joan Walsh and former Special Assistant to President George W. Bush, Scott Jennings.

So Scott, as Jonathan noted there, this is the highest law enforcement official in the land. Does it concern you at all that he's booking a party, a lot of money, 30,000 bucks, at a hotel own by his boss, the President?

SCOTT JENNINGS, FORMER SPECIAL ASSISTANT TO PRESIDENT GEORGE W. BUSH: Nope. It concerns me not at all. A, it's his own money, B, they sought an ethics review from the Justice Department, C, I think the only people who are worried about this today are the folks who haven't blinked or sleep since January of 2017 because they're looking to be in a constant state of outrage.

I'm a conservative. I'm not going around telling people what they can and can't do with their own money. And the fact that they sought an ethics opinion in advance shows they were taking proper care. So I think this is a non-story. It concerns me not at all.

SCIUTTO: Joan, does it concern you?

JOAN WALSH, NATIONAL AFFAIRS CORRESPONDENT, THE NATION: It concerns me, yes. It's a great big Christmas present to his boss, Jim. And even if it's legal and it seems as though it is legal, because it his own money, it's the kind of thing mobsters do. Give a little bit to the boss at Christmas.

So it looks ugly, it looks ugly because of all of the things that we've already discussed about what Attorney General Barr supposed to be doing, supervising these existing claims. And can I also say, I am not a conservative, I don't know if this is conservative or liberal, but I just want to say $30,000 for an annual party is a lot of money and I wonder if those Trump voters, those working class white voters think that too.

I wonder if those coal miners in Kentucky who are protesting because they can't get paid, how will they feel about a $30,000 annual party.

SCIUTTO: Scott, part of the issue here is this, of course, is not in isolation. The President just used the G7 platform to pitch a golf club that he owns, Doral, as the location of the next G7 which of course would be a much bigger bill than $30,000, many 10s of thousands of dollars. All of those international diplomats, their security details, other advisors, do you have any issue with a sitting U.S. president pitching his own property for a summit which he would profit from for holding that summit there, any reservations?

JENNINGS: I don't really have a problem with this Doral summit. Look, I think if they want to take steps to make it so that he doesn't profit from it or it's done at cost or whatever you would want to call it. I guess that would be fine.

SCIUTTO: How could he not profit from it if he owns the property?

JENNINGS: Well, I guess you could give them the lowest possible rate in which you're basically doing it at your cost and there's no built in profit margin. If they wanted to do that, that's fine. I think the reality is it doesn't matter what Donald Trump does. He's going to get piled onto here by people running against him and people who oppose him in Washington and the Congress.

So, look, I think of all the myriad things we have to worry about in this world, for instance, I don't like it that he's trying to put Russia back in the G7, G8. I think this is terrible idea and I am far more worried about things like that than where they hold the next meeting. I don't think the location of the meeting is as important as the policy decisions and discussions that come out of it. SCIUTTO: Joan, beyond the G7 and Bill Barr at the Trump hotel, The

Washington Post has counted he's named drop four of properties he owns at least 70 times and I'm just going to give you a small sample because again we're speaking to the pattern here and what this pattern means. Have a listen. I want to get your reactions.

(BEGIN VIDEO CLIP)

[19:30:08] TRUMP: We're having a meeting, big meeting at Mar-a-Lago. Call it the Southern White House.

I have Turnberry in Scotland, which is a magical place.

We had recently the U.S. Women's Open at my course in Bedminster, New Jersey.

With Doral, we have a series of magnificent buildings, we call them bungalows. They each hold from 50 to 70 very luxurious, with magnificent views.

(END VIDEO CLIP)

SCIUTTO: Beyond those free promos. By CNN's count, Donald Trump has spent 287 days at the Trump properties as president. That, of course, brings money into those properties because they're using those facilities, et cetera.

JOAN WALSH, CNN POLITICAL COMMENTATOR: Absolutely.

SCIUTTO: Concerns?

SCIUTTO: Yes, of course, there are concerns. The American taxpayers are spending millions of dollars and they're putting it into the Trump family's own pockets. This is unethical at minimum.

And to return to what Scott said. Maybe Scott doesn't have concerns about this. But it just might be unconstitutional to hold the G7 Summit at one of the Trump properties.

This is what the emoluments clause is about. I know it's a funny word and doesn't roll off the tongue. But it's to prevent foreign governments from trying to use money to influence our president.

We should all be concerned about it. He profits, though, from the fact that there are ten concerns a day. There are ten outrages a day. So, sometimes even I will say, well, I can't get that upset about this one.

SCIUTTO: Scott, your response to the specific issue, because as Joan notes, the Constitution does specifically profiting from foreign governments for the obvious reason it doesn't want sitting U.S. presidents influenced by financial incentive. Does that rise to the level in your view?

SCOTT JENNINGS, CNN POLITICAL COMMENTATOR: Number one, I think there's already been attention litigation on the emoluments issue that hasn't gone the way of the president's detractors. Number two, I'm trying to figure out how hosting a meeting at -- at this resort -- like if they show up at the meeting which they have to show up at anyway, I just fail to make in -- I think this election coming up, Jim, is going to be litigated on a lot of issues but not one American voter is going to walk into the voting booth and say, you know, I was voting for Trump but where they had that meeting I don't know about that. It is not relevant to most people.

I think a lot of folks like us will enjoy talking about it. But to the average American, the location is not relevant. The policy decisions are relevant. And I've had issues with the president on some of the G7 maneuvering. But I think this is overblown.

SCIUTTO: Are the ethical issues, Joan, relevant?

WALSH: Of course, they are. And, you know, this idea that, oh, I don't know if the American people will care. I can't tell you for sure, Jim, that they will. But I want to say, this president mass a low approval rating, especially considering how well the economy has done.

I think these ethical issues factor into it. I think he looks like a grifter every time he does something like this. And I can't say exactly what percent of the disapproval rating has to do with that. But this is an ugly look for the American president. We should say so.

SCIUTTO: Scott, before with we go, former Republican Senator Rick Santorum, he was asked last night what his response would be to holding the G7 at the Doral if he was a White House staffer. I want to play his response and hear your response.

(BEGIN VIDEO CLIP)

RICK SANTORUM, CNN SENIOR POLITICAL COMMENTATOR: Hell no. This is one of the things that I -- that I sort of scratch my head and wonder why the president doesn't see the obvious not just conflict of interest but how it could be used by his political opponents to undermine some of the good things he is trying to accomplish there. Again, I'm disappointed he brought it.

(END VIDEO CLIP)

SCIUTTO: So, Scott, as you see there, it's not just Democrats who are raising these questions.

JENNINGS: And look, you could make a strong P.R. and political argument that you could go the path of least resistance here and hold it somewhere else. I just fail to say if this rises to the level of the things we should be worried about compared to all the other things going on -- trade wars, Russia, you know? I mean, there is a lot of big stuff going on in the world.

And if I were a White House staffer and I were trying to get the president to focus on four or five things that really matter, and he really wanted to do this, yeah, maybe you say, Mr. President, they're going to bludgeon you with it. But would you lay down on the train tracks over it if you thought you could effect change on another issue. I doubt.

So, I disagree with Rick that it, you know, rises to the level of disappointment. I raise my eyebrows, sure. But, look, I just think there is so much other stuff going on in the world, we won't be worried or thinking about this in 24, 48 hours.

SCIUTTO: We got an eyebrow raise.

(CROSSTALK)

WALSH: That's good. Rick Santorum and I agree on something. History. History.

(LAUGHTER)

SCIUTTO: Scott and Joan, always good to have you on. Thanks so much for taking the time tonight.

WALSH: Thank you, Jim.

OUTFRONT next, trade wars and tariffs hitting some Wisconsin farmers and Trump supporters hard.

(BEGIN VIDEO CLIP)

REPORTER: Do you think that's going to have an impact on how dairy farmers vote?

UNIDENTIFIED MALE: Yes, I think it will have an effect, yes.

(END VIDEO CLIP)

SCIUTTO: And the agency enforcing campaign money laws just days away from becoming completely powerless.

[19:35:00] The head of the Federal Election Commission will be OUTFRONT.

(COMMERCIAL BREAK)

SCIUTTO: Tonight, Joe Biden taking aim at President Trump's escalating trade war with China, tweeting, quote, American factory workers, farmers and consumers are the ones paying the provides for President Trump's reckless trade wars, not China.

Well, dairy farmers are growing particularly impatient in the crucial swing state of Wisconsin. The state Trump won by less than 1 percentage point in 2016.

Martin Savidge is OUTFRONT tonight.

(BEGIN VIDEOTAPE)

MARTIN SAVIDGE, CNN NATIONAL CORRESPONDENT (voice-over): I'm halfway between Green Bay and Milwaukee, deep in dairy land, where the cows are black and white, fields are green, the voters red as their barns.

UNIDENTIFIED MALE: The dairy farming business is a challenge.

UNIDENTIFIED MALE: Dairy farming has its challenges.

SHELLY MAYER, DAIRY FARMER: More of a challenge than what we expected in our careers.

STEVEN ORTH, DAIRY FARMER: It's challenging.

SAVIDGE: The average price for milk is around $16 per 100 pounds. For most farmers, that is less than the cost for them to produce it. And way down from $24 per 100 pounds they were getting five years ago.

ORTH: It means there is not as much money to go around at the end of the month.

SAVIDGE: Last year, some 700 farms in Wisconsin closed, nearly two a day.

JANET CLARK, DAIRY FARMER: And some of those farmers I call my friends.

SAVIDGE: To ensure that didn't happen to her, Janet Clark quit an insurance job and moved back to the farm that's been in her family five generations.

[19:40:07] Like a lot of dairy farmers, she voted for President Trump.

CLARK: I don't have second thoughts of my decision in 2016. I'm on the fence of what my decision is going to be in 2020.

SAVIDGE: Trump's trade disputes have hurt dairy prices and dairy exports. To diversify, dairy farms started growing crops, corn, soy, whose prices have also been hurt by trade tariffs.

(on camera): So, your back up business is also suffering at the same time your main business is suffering.

CLARK: You're correct.

SAVIDGE (voice-over): There are concerns that oppressed milk prices and trade disputes will drag into next year.

(on camera): Do you think that's going to have an impact on how dairy farmers vote?

ORTH: Yes, I think it will have an effect, yes.

SAVIDGE (voice-over): But the president still has fans here.

(on camera): Do you blame this administration for any kind of financial difficulty you may face?

DAN NATZKE, DAIRY FARMER: No. No, I don't, because things happen. And just because it's this president in the situation he is, doesn't mean it's all on his shoulders.

SAVIDGE (voice-over): Despite their suffering, some still see the trade disputes as necessary to even the trade playing field.

HANK WAGNER, DAIRY FARMER: I'm still confident that we're going to come out of this better, not just us in agriculture but as a country.

SAVIDGE: Janet Clark says if she is voting for Trump again, she needs something from him.

CLARK: I need some hope. I need some light at the end of the tunnel which I haven't seen in four years.

SAVIDGE: Without that, it will be harder for Wisconsin farmers to hang on, which could make the president's re-election hopes here in a word, challenging.

(END VIDEOTAPE)

SAVIDGE: It would be hard to overstate the economic impact to dairy in Wisconsin. It's huge. $45 billion every year delivered into this economy, which means that's not really a cow. You're looking at what is kindergarten teacher salary, or part of the paving of a road.

It has a huge impact throughout this state, and though many Americans will be voting on their personal economies. Here in 2020, they'll be voting on how they are doing in financially down on the farm -- Jim.

SCIUTTO: No question.

Good to have you there, Martin Savidge.

OUTFRONT now, CNN senior political analyst Mark Preston.

So, Mark, tell me how seriously are and should the president and his advisers take these concerns from farmers? Because it's not just confined to Wisconsin. I spoke to the head of the farmers union in Minnesota. He said the same thing. Heard similar things from Iowa farmers.

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Right. I think overall that whenever you see the trend line where people are getting upset and moving away from you, you got to certainly be concerned. I do think though that Martin Savidge's story really hit home a very, very valid point, and that point is the fact that these folks are still supportive of President Trump.

When we talk about them being conservative, Jim, it's not just conserve in politics but conservative in their life and they look at what Donald Trump has done here in Washington, D.C., and they are pretty happy with what he has done. They might not like what's happening with the trade war right now, but they think they can move beyond it.

SCIUTTO: The agricultural secretary, Sonny Perdue, he tried to ease the frustration of farmers at a recent town hall with a joke. That joke did not go over well. Have a listen.

(BEGIN VIDEO CLIP)

SONNY PERDUE, AGRICULTURE SECRETARY: I had a farmer tell me this in Pennsylvania. It's a cute little joke the other day a few weeks ago. He said, what do you call two farmers in a basement? I said, I don't know. what do you call them? He said, a whine cellar.

(LAUGHTER)

(BOOS)

(END VIDEO CLIP)

SCIUTTO: Well, you hear those boos there, whine as W-H-I-N-E.

How damaging could that sound bite be for the president, if farmers don't turn out to vote for him in 2020?

PRESTON: Well, the irony is that Georgia where Sonny Perdue is from is one of the states Democrats target. It's still reliably Republican. But it is one of the southern states, one of these agri states that could eventually flip to the Democratic Party in the coming years, and the same thing with Texas.

In the near term, though, Jim, I think if you are President Trump and you're his campaign, you want him back out there into the heartland. You want him doing all the rallies because that's where he is able to really draw off the energy and deliver that energy back and in the hope that we heard in that piece that Martin just did.

SCIUTTO: Sure. The question is, does the energy override their pocketbooks and wallets? That's a big question as they go to the voting booth.

Mark Preston, always good to have you.

OUTFRONT next, the watchdog overseeing campaign finance is about to be without power. The head of the election commission is my guest.

And Jeanne Moos with more on what is bugging Trump.

(COMMERCIAL BREAK)

[19:48:32] SCIUTTO: Tonight, a key federal agency handicapped. The Federal Election Commission will be one person short of the four it needs to create new rules or take action to punish those who violate election laws. It comes after the commission's vice chairman, Matthew Petersen, announced he will be stepping down at the end of the month.

OUTFRONT now, Ellen Weintraub. She's a Democrat. She's also the chair of the FEC.

Thanks very much for taking the time tonight. The FEC, as you well know, continue to operate. But what can it do, can it still police election finance laws? ELLEN WEINTRAUB, FEC CHAIRWOMAN: Well, what's important for you to

know and for the American public to know is that the agency is not going to close its doors because we are down a commissioner. So, all of the staff will be on their job making sure the American people have the information that they need about who is funding campaigns, and what the campaigns are spending that money on. All of that information will continue to be disclosed and there will be staff available to help answer questions and help people fill out their forms, so that the American people can be informed.

The problem is --

SCIUTTO: OK, that's the information side. But what about enforcing when people break the rules?

WEINTRAUB: Well, that is going to be a problem. Because the -- the agency will be able to continue doing investigations that have already been authorized but we won't be able to conclude any. We won't be able to have a vote on the final resolution of complaints that allege that candidates or political actors are violating the law.

[19:50:04] We won't be able to issue rules. We won't be able to issue advisory opinions.

And that means that things will get backed up. It doesn't mean there aren't any rules. It doesn't mean that the law won't eventually get enforced because there is a five-year statute of limitations, but it is going to back us up on our workload and that is not a good thing.

SCIUTTO: Is it intentional? Do you suspect it's intentional? We have a major election coming up.

WEINTRAUB: I'm not going to question people's motives. There have been two seats vacant for a very long time, one for over two years, one for over a year and a half. I don't know why those seats haven't been filled.

This one will bring us -- this extra vacancy will bring us down below our four-person minimum for a quorum and I just urge the president to make the nominations and the Senate just rapidly confirm the nominees. The good news is that this could happen very quickly if they're motivated to do so.

Commissioner Petersen himself was confirmed a mere 12 days after he was nominated and if they act quickly, then the agency won't get too backed up and have a severe impact.

SCIUTTO: As you know, the president nominated a Republican lawyer to fill a vacancy back in 2017 on that seat, the Senate has failed to vote on it. Why? Why do you think that is?

WEINTRAUB: I am the wrong person to be asking that question. You will have to direct that question to members of the Senate.

SCIUTTO: Folks at home have to be shaking their heads, too. This is a rare bipartisan organization here, right, with the intent of overseeing and enforcing election finance laws. I just wonder what can be done, particularly since we have an election when so many people, both parties are focused on the results and the races coming up next year.

WEINTRAUB: And I think it really is important that we get back up to speed quickly because this does promise to be as all elections are hard fought, a lot of money will be raised and spent and we need to be at full strength so that we can adequately supervise the process.

SCIUTTO: Well, we appreciate your dedicated public service. It comes across in the work you do, the statements that you say.

Another case that's drawn interest earlier this year, the FEC fined a Jeb Bush super PAC and a Chinese-owned corporation, I believe the figure was $940,000 after concluding both broke a federal law barring for interference in the U.S. election. Foreign interference is a major concern coming in to 2020.

Are you still going to be able to hold people accountable for violations of those kinds of laws?

WEINTRAUB: Well, I am very concerned and have been for a long time about the possibilities of foreign money creeping into our system through domestic subsidiaries, through LLCs, through C4s, through other dark money groups, and I think it's really important the agency take those complaints seriously.

I think the matter that you just discussed that involved an independent super PAC supporting Jeb Bush, as well as a Chinese subsidiary, we levied a fine of almost $1 million, which is a large fine for the agency, one of the largest that we've had in recent memory and I think that shows that the agency was able to come together on a bipartisan basis to address a really serious violation of the law.

It doesn't happen all the time, and I wish it happened more often and hopefully it can in the future.

SCIUTTO: Well, keep it up. The country needs you. Ellen Weintraub, thanks very much for joining us.

WEINTRAUB: Thank you.

SCIUTTO: Coming up next, Jeanne Moos on the insect pestering Donald Trump.

(COMMERCIAL BREAK)

[19:57:32] SCIUTTO: Tonight, what's bugging President Trump?

Jeanne Moos has the answer.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): It won't be hard for President Trump to exterminate this story. We went from promoting Trump National Doral as the perfect site for the next G7 Summit --

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Magnificent buildings, we call them bungalows.

MOOS: To defending it against allegations of having had bedbugs in those bungalows.

No bedbugs at Doral. The radical left Democrats spread that false and nasty rumor. Not nice.

Actually, it was a lawsuit that spread the story. After sleeping in the Jack Nicklaus-themed villa, guest Eric Linder awoke to discover he had multiple welts, lumps and marks over much of his face, neck, arms and torso. There was even a photo.

The lawsuit was settled around the time President Trump took office.

(on camera): But by saying no bedbugs, President Trump shot himself, make it sprayed himself in the foot.

(voice-over): The internet was instantly crawling with Trump-themed bedbugs. Bedbugs wearing his hair. Bedbugs with "I voted for Trump" stickers. A bedbug with "G7 host" on his back.

Luxurious rooms with pets, join us at Doral.

UNIDENTIFIED MALE: So, good night, sleep tight.

MOOS: The saying got a makeover. Good night, sleep tight, don't stay at Doral because those bedbugs bite.

Meanwhile, someone else was bitten by a bedbug controversy.

BRET STEPHENS, "NEW YORK TIMES" COLUMNIST: It's dehumanizing.

MOOS: "New York Times" columnist Bret Stephens deleted his Twitter account saying Twitter is a sewer, after a professor named David Karpf read that the "New York Times" building is having bedbug problems and tweeted: The bedbugs are a metaphor. The bed bugs are Bret Stephens.

Stephens emailed Professor Karpf, copying the professor's boss, inviting Karpf to come visit him at his home.

STEPHENS: And see if he would call me a bedbug to my face.

MOOS: Between Stephens and Trump, bedbugs have infested the news.

As for Trump National Doral?

TRUMP: With magnificent views.

MOOS: Now, bedbugs are getting all the views online. Many people say that Trump bedbugs are the best in the world. They are huge.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

SCIUTTO: Oh my goodness. Thanks for joining us tonight. I'm Jim Sciutto.

"AC360" starts right now.