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EARLY START

Impeachment Inquiry: Taylor's Deposition Differed from Sondland's; Russia Brokers Syria Deal; Facebook Chief Faces Grilling; Senator Warren "Alarmed" By Overnight Lending Turmoil; Game Juan to the Nats. Aired 5-5:30a ET

Aired October 23, 2019 - 05:00   ET

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


DAVE BRIGGS, CNN ANCHOR: Some might call it a devastating blow to the president's impeachment defense. What the top U.S. diplomat in Ukraine told investigators behind closed doors.

CHRISTINE ROMANS, CNN ANCHOR: Russia cements itself as the top powerbroker in Syria. A deal to force U.S. allies from the Turkey- Syria border takes effect this hour.

BRIGGS: Happy to take money for political ads but not police them.

[05:00:01]

Facebook chief facing some big questions later today on Capitol Hill.

ROMANS: And a 20-year-old having a postseason for the ages leads the nationals to the lead in the World Series.

Good morning, everyone. And welcome to EARLY START. I'm Christine Romans.

BRIGGS: Soto. The nation's capital is not all about impeachment these days, baseball as well.

I'm Dave Briggs. It's Wednesday, October 23rd, 5:00 a.m. in the East.

But we do start with the impeachment. President Trump's impeachment defense jolted by new closed door testimony of the strongest proof yet of a quid pro quo. The top U.S. diplomat in Ukraine, Bill Taylor, testifying he was told that the president was sitting on vital military aid and it would not be released until Kiev publicly pledged to investigate President Trump's unfounded concerns about Ukrainian meddling in the 2016 election, and 2020 Democratic candidate, Joe Biden.

ROMANS: Taylor's testimony seems to directly contradict the president's claim there was no quid pro quo. Taylor also detailed what he called highly irregular shadow diplomacy with Ukraine, back- channel bargaining led by Trump attorney Rudy Giuliani, that ties into much of impeachment inquiry.

Congressional correspondent Phil Mattingly is on Capitol Hill.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Christine and Dave, since almost the first deposition, lawmakers have said they need to hear from William Taylor, one of the three individuals on a series of text messages that have become public that made clear that Taylor was concerned that U.S. security assistance to Ukraine was, in fact, being withheld for political reasons -- something the Trump administration and the president himself have denied was actually the case.

Well, he testified behind closed doors, more than eight hours in that room -- testimony that, at least based on a 15-page prepared statement obtained by CNN, led, according to one lawmaker, to gasps in the room as he laid it out in detail -- meticulous detail from his months as the top U.S. diplomat in Ukraine -- making very clear that at least in conversations with another administration official, Gordon Sondland, the ambassador to the E.U., was repeatedly talking to the president that there was, in fact, a quid pro quo at play.

That the president had informed Sondland that while there wasn't a quid pro quo, at least in terms of the words, the president expected something for the Ukrainian security assistance. The president wanted an investigation into Burisma, the company that had hired Joe Biden's son, Hunter. He also wanted an investigation into allegations, since debunked, of 2016 election meddling by Ukraine.

In all, the statement was detailed throughout the process and made very clear that at least in Taylor's mind, from Taylor's perspective, that there had, in fact, been some type of restrictions put on place because of political reasons. Now, again, that runs contrary to what the White House and what the president has said.

One thing to keep an eye on. Taylor's deposition or at least his opening statement diverge in some parts from Gordon Sondland's deposition and where those inconsistencies lie is something members of both parties are saying they want to look into.

Another thing to keep in mind, one lawmaker I spoke to said his read was that Taylor had extensive notes that memorialized many of the conversations he was talking about, which probably led to how detailed his statement was -- something lawmakers didn't get during his deposition but you can be certain they'll be looking for in the days ahead -- guys.

(END VIDEOTAPE)

BRIGGS: Indeed. Phil Mattingly there, thanks.

The White House is calling Ambassador Taylor's testimony a coordinated smear attack from radical, unelected bureaucrats.

Keep in mind, it was Secretary of State Mike Pompeo who asked Taylor to come out of retirement to serve in this position. We're now seeing a clear trend in the impeachment inquiry testimony, putting the word of career officials against Trump appointees.

Vice President Mike Pence addressing that pattern on Fox News. (BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: We have some extraordinary men and women in our diplomatic corps, who know their work and who are strong and are out fighting for America's interests. But there's no question that when president Trump said we're going to drain the swamp that an awful lot of the swamp has been caught up in the State Department bureaucracy. And we're just -- we're just going to keep fighting it.

(END VIDEO CLIP)

ROMANS: Despite his attack on the swamp, Pence refused to say whether he was comfortable with Rudy Giuliani's shadow diplomacy with Ukraine.

Today, investigators hear from a budget official for national security programs, who will no doubt be asked about withholding of aid, and the deputy assistant secretary of defense, a vocal supporter of aid to Ukraine.

BRIGGS: All right. Ahead, big banks and Elizabeth Warren have big concerns about each other. Matt Egan of CNN Business joins us next.

(COMMERCIAL BREAK)

[05:09:09]

BRIGGS: Facebook CEO Mark Zuckerberg heads back to Capitol Hill today with the social network facing more scrutiny than ever. This was supposed to be a hearing about digital currency, but this week Facebook uncovered dozens of fake Russian-controlled accounts, seeking to influence the 2020 election. And the social network is facing heavy criticism for not doing third party fact checks for political ads and not taking down ads with false statements.

Also, 47 attorneys general are now part of an anti-trust investigation of Facebook, raising the stakes in a bipartisan probe that could result in big changes to business practices for the tech giant.

ROMANS: China's foreign ministry slammed White House trade adviser Peter Navarro for using an alter ego in his books to boost his arguments about Beijing's threat to the U.S. economy. As a spokesperson for the Chinese foreign ministry said: Certain people in the U.S. can do whatever they think of to contain and smear China without scruple.

[05:10:03]

It is absurd and extremely dangerous to make lies, spread lies, and even formulate policies based on lies.

A longtime China hawk, Navarro, has been a key player in trade talks and has repeatedly defended President Trump's tariffs. Last week, he admitted he made up this alter ego, Ron Vara, in his books. It's an anagram of Navarro. Navarro mocked the criticism from Beijing, saying, a source close to

Ron Vara indicates China has revoked his visa and lowered his social credit score.

I can hear Peter Navarro, who, you know, I reported on for many years, I can hear him laughing in my head when I read that statement.

BRIGGS: Me too.

ROMANS: Let's bring in CNN business lead writer Matt Egan.

BRIGGS: As we call him, Magenta.

ROMANS: Oh, magenta, is you're anagram.

BRIGGS: Or name tag.

ROMANS: Or name tag. I like magenta, it sounds like a spy.

BRIGGS: We're working on yours.

ROMANS: Why has this become an element of trade talks? That you have Peter Navarro has got the president's ear. Some call it a muse, he's got the president's ear on trade issues, and the Chinese foreign minister, in the middle of a really important trade talks is saying, this guy lies about China.

MATT EGAN, CNN BUSINESS LEAD WRITER: This is a fascinating story, and it's pretty ironic, because Peter Navarro has not been shy about criticizing the media, accusing them of fake news and bad journalism. He called "The Wall Street Journal" reports on trade talks garbage and now he's admitted to making up these sources.

I think at a minimum this is another distraction when these two countries are trying to resolve these complex issues and it also undercuts the really legitimate complaints that we hear from CEOs about China's trade tactics. This is just another distraction, another obstacle.

It's really telling that, as he mentioned, is his reaction was to sort of make light of it and then double down on his criticism of China. It's interesting that the publisher is not laughing about this. This is a breach of their ethics.

So I think that's also another reminder that unlike Rex Tillerson and Gary Cohen and even Wilbur Ross, before he joined the White House. Peter Navarro was kind of a fringe person in economics. Now he's calling the shots in these huge trade war with the global economy at stake.

ROMANS: He would say he didn't invent many fake sources, it was one, and it was a whimsical device. But you're right. The publisher saying, OK, we have to put a note in here that it's not legit.

BRIGGS: Meanwhile, it's a very real consequence of trade war is related to toy maker Hasbro. Might our Nerf guns cost more for Christmas.

EGAN: That's what Hasbro is saying. You know, this is another reason why kids might want to send their letters to Santa sooner than later, because Hasbro is saying that this trade war is really causing chaos in the toy industry. There's two big problems. One, the tariffs already put on China is causing sales to go down, it's eating into profits.

Two, there's mass confusion over the timing on testify tariffs that are supposed to go on China in December, so Hasbro said that created some chaos in its supply chain. Retailers didn't know when to buy orders from Hasbro. So it's a really good example of the real world impact of this on again/off again trade war.

ROMANS: The president pauses and has another one of the books. It's chaotic for many of these companies.

Meanwhile, Elizabeth Warren is sounding an alarm. She sent a letter to the Treasury Secretary Mnuchin, and she wants a response by November 1st.

What's going on there and are they using -- are they using what's happening to try to make a case for less regulation? Explain that?

EGAN: Leave it to Elizabeth Warren to really get into the weeds of the financial market. Last month we saw it. It lets banks and hedge funds borrow cheaply for short periods of times. It showed the financial market was broken. The feds stepped in, pumped in a whole bunch of cash.

Now, Elizabeth Warren is worried the industry is going to use this as way to try to deregulate. Some officials and analysts I'm talking to are blaming the post-crisis rules, particularly the ones around liquidity that makes banks have easily tradable securities.

So, Warren sent this letter. She said to Steven Mnuchin, she said banks are reporting profits at record levels and it would be painfully ironic if this unexplained chaos in a small corner of the banking market became an excuse to further loosen rules that protect the economy from these types of risks.

So, I think that this shows just why Warren would be a risk and a headache for the financial industry. Here she's fighting deregulation before it even starts.

ROMANS: Right.

BRIGGS: We're going to hear a lot more about that as we get closer to the election.

We're going to have to work on tag man or man tag or something if you want a fake name.

But, Matt Egan, it's good to have you here nonetheless.

ROMANS: Send us your anagrams just for fun today. BRIGGS: I got nothing for you --

ROMANS: Choir master in, that's a boring, and reterations (ph).

BRIGGS: We'll keep working.

But coming up, a budding 20-year-old superstar leads the Washington Nationals their first-ever win in the World Series.

Andy Scholes will tell you why he's bumming out in the "Bleacher Report", next.

(COMMERCIAL BREAK)

[05:20:24]

ROMANS: Defense Secretary Mark Esper has landed in Baghdad. His stop in Iraq's capital happening as U.S. forces withdraw from Syria and enter neighboring Iraq.

He addressed the future of those troops in an interview with CNN's Christiane Amanpour.

(BEGIN VIDEO CLIP)

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL ANCHOR: You said that they were going to be redeployed to western Iraq, but the latest news is that the Iraqi command says welcome to come across the border but only en route out. He doesn't anticipate your troops staying there, so where will they be?

MARK ESPER, SECRETARY OF DEFENSE: Well, as you know, we're conducting a phased withdrawal -- deliberate phased withdrawal from northeast Syria. We will temporarily reposition in Iraq pursuant to bringing the troops home. And so it's just one part of a continuing phase but eventually those troops are going to come home.

AMANPOUR: So they are coming home?

ESPER: They will come home.

(END VIDEO CLIP)

ROMANS: Right now, a deal between Russia and Turkey is taking effect. Now, that agreement, that agreement removes Kurdish fighters along Syria's border. It cements Russia's role as central power broker. It shows the U.S. support is waning.

CNN's Jomana Karadsheh live along the Turkish-Syria border.

This is a -- this is a historic rebalancing of influence in this region.

JOMANA KARADSHEH, CNN CORRESPONDENT: Absolutely, Christine.

You see the shift in the power balance on the ground taking place since the launch of that Turkish operation with the U.S. losing whatever little leverage it had in Syria and pretty much handing it over to the Russians. The Turkish media here is calling this agreement between their country and Russia a historic agreement.

Now, under this deal, what happens is if you recall, that area where the Turkish incursion took place t 70-mile stretch between the towns of Tal Abyad and Ras al-Ain, this area will remain for now under the control of Turkey and its allied forces on the ground. We've heard from the ministry of defense here, you know, since the U.S. brokered cease-fire was launched, there's no reason because the Kurdish fighters withdrew from this area.

Now, when it comes to the rest of the border region, right about now, the Syrian border guards, the regime's border guards, along with the Russian military police are supported to start patrolling this area. They are meant to have 150 hours to basically push back the Syrian Kurdish fighters about 20 miles away from Turkey's border.

What happens next week is we see Turkey and Russia around the border to make sure the agreement is implemented. Quite ironically, this is a deal that Turkey was working on with the United States. They were not able to get it from their NATO ally. Instead they have Russia promising to provide them with that, Christine.

ROMANS: All right. A whole new day, a whole new order there. Thank you so much for that, Jomana Karadsheh.

BRIGGS: The Washington Nationals went to Houston and stunned Astros ace Gerrit Cole to take game one of the World Series.

Andy Scholes was there last night.

Andy Scholes, Houston's own Andy Scholes joins us in the "Bleacher Report."

Good morning, my friend.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Dave.

Sad morning for Houston fans here.

I mean, Gerrit Cole had been on a historic run. He hadn't lost a game since May 22nd. He was 19-0 since then. The Nationals were able to end that streak on the biggest stage and Washington's young star Juan Soto coming up big in this game.

He doesn't turn 21 until Friday, and he hit an absolute moonshot off Cole in the fourth. The ball landed on the train track. That rarely happens at Minute Maid Park, the fourth youngest to hit a home run in the World Series. He came up big again in the fourth with a two-run double. The Nationals, they go on to steal home field advantage in the series with a 5-4 win in game one.

(BEGIN VIDEO CLIP)

JUAN SOTO, NATIONALS LEFT FIELDER : I mean, at first bat, I'm not going to lie, I feel a little bit shaky in my legs, but I tried to control my emotions, stay focused in the game, and to drive the ball.

A.J. HINCH, ASTROS MANAGER: He's calm in the moment. Clearly this is not too big a stage for him. He's taken big swings early on, bounced back from the punch-out, had two big at-bats and hits. He was the difference in the game.

(END VIDEO CLIP)

SCHOLES: Yes. The Nationals are going to try to take a 2-0 lead in the series. They got Steve Strasburg on the hill. He will be going up against Justin Verlander.

All right. The NBA season tipping off last night on TNT, the showdown everyone was looking for. The new look Lakers taking on the new look Clippers in the battle for Los Angeles. In the first edition, Kawhi Leonard, he was without running mate Paul George out with injury, but he was able to outduel LeBron and Anthony Davis. Kawhi, 30 points, as the Clippers this win, 112-102.

Now, Kawhi able to pick up where he left off. The Raptors dropping their championship banner last night and getting their rings, and those rings, wow. They have a 1.25 carat diamond on top of the trophy, it's the largest diamond for any sports ring ever, 650 total diamonds on that ring with 16 rubies. It's the largest NBA ring ever.

The Raptors would win in overtime. Fun night there in Toronto. All the fans in attendance getting a replica championship ring.

But, Dave, the fallout of Daryl Morey's pro-Hong Kong tweet continues. CCTV, China's state-run TV station did not run the NBA's opening games like they normally do. So, as this story continues, we'll have to wait and see if they start airing those NBA games.

BRIGGS: Yes, it was Shaq versus Barkley on that with the -- that story will not go away for the NBA, not just yet.

Andy Scholes, good luck in game two, thanks.

ROMANS: All right. Thanks, Dave.

The president's impeachment defense thrown into serious doubt. What a top U.S. diplomat in Ukraine told investigators.

Here's what to watch today.

(COMMERCIAL BREAK)

END