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EARLY START

Two Giuliani Associates Arrested At Airport; Will Trump Block Yovanovitch From Testifying?; Deadly Turkish Military Strikes in Syria; NBA Apologizes for Blocking Reporter's Question; Astros Advance to Third Straight ALCS. Aired 5-5:30a ET

Aired October 11, 2019 - 05:00   ET

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


ALISON KOSIK, CNN ANCHOR: If, honestly, if you look and if you compare the ingredients in an incredible burger and a regular burger, I've actually read that the incredible burger isn't as good for you as you think.

[05:00:04]

DAVE BRIGGS, CNN ANCHOR: All right. I need all three. Taste test, next week.

All right. EARLY START continues right now.

(MUSIC)

BRIGGS: A dramatic arrest at the airport. Two associates of Rudy Giuliani detained over campaign finance violations. They're linked to the growing White House/Ukraine scandal.

KOSIK: A former ambassador set to testify on Capitol Hill today in the impeachment inquiry. Will she show up or be blocked by the White House?

BRIGGS: Turkey says it's killed hundreds in its operation in Northern Syria. The Trump administration trying to broker a cease-fire.

(BEGIN VIDEO CLIP)

ROCKETS' PR: Excuse me, we are taking basketball questions only.

CHRISTINA MACFARLANE, CNN SPORTS: It's a legitimate question.

ROCKETS' PR: It's not.

MACFARLANE: This is an event that happened this week during the NBA.

ROCKETS' PR: It's already been answered.

(END VIDEO CLIP)

KOSIK: And the NBA cancelling all press conferences during their China trip after this moment during the league's face-off with Beijing. Good morning and welcome to EARLY START. I'm Alison Kosik.

Happy Friday, Dave.

BRIGGS: Happy Friday.

They can't stop the questions from coming. These guys have to answer them at some point.

Happy Friday, October 11th, 5:00 a.m. in the East.

We start with the stunning and dramatic airport arrest that could have links to the Ukraine scandal engulfing the White House. Two associates of Rudy Giuliani were arrested on charges they violate violated campaign finance laws, including donations they made to a Trump super PAC. The men are Soviet-born U.S. citizens. They were detained on Wednesday, after the feds learned they had one-way tickets out of the country.

KOSIK: Giuliani told "The Wall Street Journal", the men were traveling to Vienna, where Giuliani was also headed. Giuliani tells CNN that beginning in November of last year, the two men helped him in the Ukraine, digging up dirt on Democratic candidate, Joe Biden.

You can see the two men here with Giuliani in a Twitter video. We don't know where or when the video was shot. But we know the three met for lunch on Wednesday before the men headed to the airport.

President Trump denies he knows them.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't know those gentlemen. Now, it's possible I have a picture with them because I have a picture with everybody. I don't know them. I don't know about them. I don't know what they do.

But -- I don't know. Maybe they were clients of Rudy. You'd have to ask Rudy.

(END VIDEO CLIP)

BRIGGS: As it happens, yes, there is a photo of the president with at least one of the men. Here it is.

Jessica Schneider has more of the shocking details.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: These two men arrested, Lev Parnas and Igor Fruman, they could be key characters in this broader Ukraine impeachment inquiry. That's because of a few things. First of all, Rudy Giuliani has said that they helped dig up dirt in Ukraine on the president's political rivals, including Joe Biden. Also, that these two men introduced Giuliani to former and current Ukrainian officials. And this indictment alleges that these two men asked for the help of a

former U.S. congressman, who we've seen learned is a Texas Republican, Pete Sessions. They asked him to help with the firing of the United States ambassador to Ukraine, Marie Yovanovitch. She, of course, eventually was fired in May, mostly at the behest of Rudy Giuliani.

Now, these two men were arrested late night on Wednesday at Dulles Airport. The prosecutors had to act fast here. They did not intend to unseal their indictment on Thursday, but these two men had one-way tickets. Prosecutors had to act fast to unseal the indictment and to make the arrest.

Now, these two men, along with others, are facing several charges, including conspiracy and false statements and also funneling foreign money into U.S. elections. They were accused of giving hundreds of thousands of dollars to a Trump-aligned PAC. And the indictment says they did it largely at the behest of a Ukrainian official.

The two are accused of funneling in $1 million from a Russian national that they put toward other state candidates in Nevada here. So, these men are ultimately facing charges in New York but will be held in Virginia on $1 million bond in the meantime. And they are also facing new congressional subpoenas. Congressional investigators really want to know more about their role in Ukraine and their relationship with Rudy Giuliani.

(END VIDEOTAPE)

KOSIK: And as Jessica just mentioned, those two Giuliani associates, they were subpoenaed by House Democrats in connection with their impeachment inquiry. And they were not the only ones.

Manu Raju is on Capitol Hill with the details.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Subpoena after subpoena now coming out to demand documents, as Democrats try to move to wrap up this impeachment probe in the coming weeks. Potentially decide whether or not to impeach this president as soon as Thanksgiving.

Now, what -- the latest information subpoena for Rick Perry, the energy secretary, over conversations that he had with President Zelensky of Ukraine and about with President Trump and Rudy Giuliani, is part of Giuliani and Trump's efforts to get the Ukraine government to investigate the Bidens.

[05:05:12]

Now, Perry has said all along he did not speak to Zelensky at all about the Bidens. He said it was all about energy and energy issues. But Democrats have raised concerns about some of the conversations, saying this in their letter to Perry, saying these reports have raised significant questions about your efforts to press Ukrainian officials to change the management structure at a Ukrainian state energy company to benefit individuals involved with Rudy Giuliani's push to get Ukrainian officials to interfere in the 2020 elections.

This comes amid the subpoenas that have gone out to the White House, the White House and the White House Office of Management and Budget, the Pentagon, the State Department, and Giuliani and Giuliani associates, including those two Giuliani associates who are arrested yesterday.

Democrats hope to get information. If they don't, or if the White House continues to deny their demands, expect that to be rolled into an article of impeachment against this president because what they say is that the president is obstructing Congress from doing its job. So, no matter what happens here, the Democrats believe they could get more evidence to go after the president and also potentially more evidence on obstruction of Congress.

Back to you.

(END VIDEOTAPE)

BRIGGS: Manu Raju, thanks.

Some breaking news now. The Nobel Peace Prize has just been announced. It was awarded to the prime minister of Ethiopia, Abiy Ahmed. He's being honored for his role ending the two-decade long war between Ethiopia and Eritrea waged over a border dispute in which nearly 100,000 people died. Ahmed also helped recently to broker a power-sharing deal in neighboring Sudan.

Breaking overnight, an Iranian oil tanker set on fire and badly damaged by an explosion in the Red Sea. The tanker company says it was hit by missiles. Oil prices are already soaring.

(COMMERCIAL BREAK)

[05:11:33]

KOSIK: Breaking overnight, an Iranian oil tanker set on fire and badly damaged by an explosion near a Saudi port in the Red Sea. The national Iranian tanker company claims its vessel was hit by two missiles. We're seeing oil prices soar.

Joining us now to discuss the implications of this apparent attack, CNN Business lead writer, Matt Egan.

Good morning. Happy Friday.

MATT EGAN, CNN BUSINESS LEAD WRITER: Good morning, guys.

BRIGGS: Good to see you.

KOSIK: And you know what? Never a dull Friday, right, in the markets, especially when you got these tensions heightened in that area. We're already seeing oil prices for Brent crude spiked 2 percent.

How do you see this affecting oil prices longer term? Or is this a short-term impact?

EGAN: Well, I'm not surprised to see this knee-jerk reaction by the oil market, right? Two percent higher for U.S. oil prices, that's because the market is really sensitive to any sort of conflict that is near Saudi Arabia.

Saudi Arabia is the world's most important oil producer. It's the biggest oil exporter. It's basically like the central bank of the oil market.

But we should note that these moves are not really that dramatic. Two percent move, compared to what we saw a month ago, when Saudi Aramco was hit by those attacks and its production was wiped out, more than half of it was wiped out. We saw prices spike by 15 percent. It's the biggest gain since 2009. Prices have come back because Aramco, they got production back online, and because there's all these concerns about the global economy.

But listen, we just learned the last few hours, that the situation can change rapidly in the oil market.

KOSIK: Absolutely.

BRIGGS: All right. The whole planet, though, all eyes on the White House today. U.S./China trade talks resume.

What are your expectations?

EGAN: Well, it's so interesting. The stock market has been living and dying on every single headline that's come out of the trade talks. I mean, it's really been an emotional rollercoaster.

And there are some signs of progress. President Trump said that things are going pretty well, but I think that we should caution people, the odds of some sort of a sweeping agreement, seemed pretty limited right now. There are just too many obstacles before they can reach any sort of really big deal.

But maybe there could be a limited deal. Maybe China agrees to buy more agricultural products. Maybe the United States decides not to increase tariffs, which they're supposed to go up on October 15th and suppose to up again on U.S. -- on consumer facing goods from China in December.

So, maybe there will be an agreement like that. But a sweeping deal doesn't look like it's in the offing just yet.

KOSIK: Do you see a mini deal satisfying Wall Street?

EGAN: I think a mini deal is way better than an escalation, because I'm not really sure that the U.S. economy can handle a severe escalation in this trade war. It's already dealing a lot of pain to the economy, to the manufacturing sector. Then, a mini deal would be welcome because it's better.

But listen, it would leave a lot of uncertainty with the economy and for businesses and for investors. I don't know that a mini deal is going to be quite enough.

BRIGGS: Yes. It's not clear if the president is willing to accept a mini deal. He needs a political win, not just to fuel the markets. But job openings, you're seeing this impact the job openings numbers. How so?

EGAN: Right, yes. So, it's not even just -- obviously, President Trump wants a political win, but he really needs an economic win. We've seen job openings in August. They went down to an 18-month low. They're down three-straight months. We haven't seen that since the Great Recession.

And that's important to keep an eye on because obviously the unemployment rate is very low, 3.5 percent. That's the lowest we've seen 1969. It's an indisputable positive.

[05:15:02]

But before employers think about firing, they slow hiring. And so, that's why we watch these job opening numbers. And there are some evidence that the trade war is having a role here because manufacturing job openings are down sharply, Midwest job openings are also down sharply. So, we need to keep an eye on that because, clearly, the trade war is playing a role.

KOSIK: Yes. This is certainly the time we're watching every little piece of data, every little report, because we're trying to get indications whether or not we are, in fact, headed for a recession or not. And we're getting mixed signals from the economy.

EGAN: We are, we are. I mean, the Fed chief, he said -- he thinks the economy is in a good place right now. But he did say, Jay Powell did say, that he thinks there are some risks facing the economy.

And the Fed's own models are showing that there are some risks right now. There's a recession probability indicator. It's at 35 percent. That's from the New York Fed. It's certainly suggesting that there are some risks ahead.

BRIGGS: Thirty-five percent in the next 12 months, that is a scary warning.

Matt Egan, great to see, my friend.

KOSIK: Thanks so much.

EGAN: Thank you, guys.

BRIGGS: Have a good weekend.

KOSIK: Have a good weekend.

BRIGGS: All right. Coming up, it's the series everybody was waiting for. The Houston Astros/New York Yankees, for a spot in the World Series. We'll show you what happened in game five last night.

All our friends are here this morning. From Matt Egan to Carolyn Manno next we go in the "Bleacher Report".

KOSIK: Good morning.

BRIGGS: Good morning.

(COMMERCIAL BREAK)

[05:21:14]

BRIGGS: The Houston Astros punch their ticket to the American League Championship Series for the third-straight series.

KOSIK: Carolyn Manno has more in this morning's "Bleacher Report" and joins us live now.

Good morning.

CAROLYN MANNO, CNN SPORTS CORRESPONDENT: Hey, good morning to you both.

BRIGGS: This is what we've all been waiting for, right? This has been long.

MANNO: All is well, all is well in the AL right now.

BRIGGS: Yes.

MANNO: Baseball fans getting what they wanted alls season long. The Astros and the Yankees with a spot in the World Series on the line. Standing in the way, the team with the smallest payroll in the big leagues, the Tampa Bay Rays. The crowed at Minute Maid Park in Houston was whipped up into a frenzy for the winner-take-all game five. And the Astros got off to a quick start with four-straight hits to begin the game.

Houston built a four-nothing lead in the first inning, and then pitcher Gerrit Cole did the rest. He was the story. He threw eight innings, giving up only one run on two hits while striking out ten. Houston sent the Rays home for the winter with a 6-1 victory to clinch the series.

And next up, the heavyweight showdown with the Yankees. These teams combined for 210 wins in 594 home runs in the regular season. So, get your popcorn ready for that one. Game one is tomorrow night in Houston.

Meantime, the NLCS gets started tonight on our sister channel TBS. The Cardinals host the Nationals just after 8:00 Eastern.

Meantime, Patriots quarterback Tom Brady continues his assault on the record books. It took the 42-year-old one throw against the giants to pass future hall of famer, Peyton Manning, for the second-most passing yards in NFL history last night. It was a less-than-perfect performance to say the least, but Brady did have 334 yards passing, zero touchdown passes. Even more shockingly, he ran for two scores. New England now, a perfect 6-0, to wins clear of everybody else in the NFL.

A sellout crowd in Washington, D.C. as well last night for a winner- take-all game five in the WNBA finals between the Mystics and Sun. It was a tight game. It was an exciting game.

But Washington did play better down the stretch. League MVP Elena Delle Donne who played through multiple herniated discs in her back during the finals had 21 points and nine rebounds. But Emma Meesseman was the star of the game, putting up 15 of her 22 in the second half. She was the difference maker in the series as Washington and the league's winningest coach, Mike Thibault, earned their first championship as well, a long time coming for him.

And another day, another record breaking gold medal winning performance for Simone Biles. She is now the first woman to win five all-around titles at the world championships. So, it is fitting that at the very end of her floor routine, she ends it by dropping the mic. Well deserved.

Biles, though, has 22 medals at the world championships, just one short of the all-time record for men or women. She could pass that by the end of the individual events this weekend.

She is the GOAT for sure. And I love her attitude, as well. Everybody is wondering how she can be so dominant. And she says, I really don't know how I do it.

BRIGGS: She doesn't know, yes.

MANNO: Yes, I don't know how I do it.

BRIGGS: All due respect to Serena, greatest athlete of our time, right?

MANNO: Oh, don't make me choose. It's hard. But, yes, she's making a case for it. An Olympic performance in Tokyo would solidify the deal.

BRIGGS: She is remarkable.

KOSIK: Wow.

MANNO: Yes.

BRIGGS: Carolyn Manno, good to see you. Have a good weekend.

KOSIK: Good to see you. Have a good weekend.

Just moments ago, the NBA canceled all news conferences during its Asia trip. This comes after an apology for blocking CNN correspondent Christina MacFarlane's question to Houston Rockets players about the NBA standoff with China. Watch this.

(BEGIN VIDEO CLIP)

CHRISTINA MACFARLANE, CNN SPORTS: The NBA has been a league that prides itself on its players and coaches to be able to speak out openly about political and societal affairs. I just wonder about the events this week and the fallout we've seen, whether you would both feel differently about speaking out in that way in the future.

[05:25:01]

ROCKETS' PR: Excuse me. We are taking basketball questions only.

MACFARLANE: This is a legitimate question.

ROCKETS' PR: It's not.

MACFARLANE: This is an event that happened during the NBA.

ROCKETS' PR: It's already been answered.

MACFARLANE: This particular question has not been answered.

James?

ROCKETS' PR: Any other questions?

(END VIDEO CLIP)

KOSIK: OK. Christina joins us, live from Tokyo.

Good morning, Christina. This to me seemed a little bit odd because I know the NBA Commissioner Adam Silver has said publicly, to his players, look, if there's something you want to speak out about, we're OK with it. What happened here?

MACFARLANE: Yes. And it was disappointing, Alison, because I felt in that moment that actually James Harden did want to reply to my question. As you saw, he was prevented from doing so.

In the aftermath of that press conference, I was actually called by the NBA. They gave me an apology and they actually wrote up an official statement to apologize what happened, as well. This is from their chief communications director, Mike Bass. Let me read it to you.

They said: During today's Houston rockets media availability, a team representative inappropriately interjected to prevent CNN's Christina MacFarlane from receiving an answer to her question. We've apologized to Ms. MacFarlane as this was inconsistent with how the NBA conducts its media events.

And I think what this moment exposed was the utter confusion that exists right now within the NBA from the top down as to how to handle this continuing fallout. It's been one week, seven days, since the managing director of the Rockets sent that tweet in support of Hong Kong. But the reality is, is that nothing of the players could have said could help the NBA in their predicament. They are stuck between a rock and a hard place here, between protecting their financial interests in China and protecting what they call their core values. Now, a source from the NBA did tell me last night that the reason

those press conferences are canceled in Shanghai and those match between the Lakers and the Nets, was because they were permitted -- they were permitted not to occur. So, they were stopped, halted, from taking those press conferences. And as you say, in the last hour, we heard from the NBA, again, there will be no press conference in the final global game, which is due to take place on Saturday, or indeed for the remainder of the trip. And they say they want to protect the players from being put in a difficult position.

KOSIK: Seems like this is quite the balancing act for the NBA.

All right. Christina MacFarlane, thanks so much.

BRIGGS: The questions won't stop.

KOSIK: It won't.

BRIGGS: LeBron James and company are going to have to answer at some point.

Ahead, two associates of Rudy Giuliani arrested at the airport. Their role in the widening White House/Ukraine scandal, ahead.

(COMMERCIAL BREAK)

END