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Anderson Cooper 360 Degrees

Accounting Firm Cuts Tie With Trump Organization Citing Conflict Of Interest; Source Says Russian Attack On Ukraine This Week More Likely Than Not; Trump Organization's Accounting Firm Says Nearly 10 Years Of Financial Statements Are Unreliable; Judge In Sarah Palin's Defamation Suit Against NY Times Says He Will Dismiss Case; Self-Described "Constitutionalists" Target Republican County Leader; Canadian Government Invokes Emergencies Act Due To Blockades And Protests Over Covid-19 Measures. Aired 8-9p ET

Aired February 14, 2022 - 20:00   ET


ERIN BURNETT, CNN HOST: We are seeing in person the reality that the kind of war fought in Europe 80 years ago can happen again if we don't stop it. Thanks so much for joining us. AC 360 starts now.


JOHN BERMAN, CNN HOST: A chilling assessment just before airtime from a source in a position to know a Russian attack on Ukraine sometime this week is more likely than not.

John Berman here in for Anderson.

This comes at the end of the day that also saw the last American diplomats in Kyiv shut down the embassy there. The Kremlin signaled a willingness to talk while continuing their military buildup. We're going to have live reports tonight from Kyiv and Washington.

We begin though with stunning news from the accountants who for years kept the books for Donald Trump's business empire. Now, they are saying count us out. They're cutting ties with Trump. Not only that, the accounting firm Mazars is also warning the Trump Organization and telling it to warn others not to rely on nearly a decade's worth of those financial statements.

This comes as you know, in the middle of an ongoing civil and criminal probe into whether the former President illegally inflated the value of his assets to obtain loans or as his former Attorney Michael Cohen once said, merely to boost his status.


MICHAEL COHEN, FORMER ATTORNEY TO DONALD TRUMP: It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed amongst the wealthiest people in Forbes and deflated his assets to reduce his real estate taxes.


BERMAN: So three years later, here we are. CNN's Kara Scannell joins us now with the very latest. So Kara, what did Mazars say in this letter to the Trump Organization?

KARA SCANNELL, CNN CORRESPONDENT: Well, John, they said that they are telling the Trump Organization that they should no longer rely on nearly 10 years of financial statements. These are the financial statements that Mazars had compiled for the Trump Organization.

They said that this is based on a couple of things. One is the New York Attorney General's investigation. They made a very public filing last month that went into great detail about various misstatements, allegations of misstatements, and omissions in these financial statements, everything from the size of Donald Trump's triplex apartment at Trump Tower to how much cash they had on hand, to how they were valuing golf courses.

So a significant move, and -- you know, but in this though, interestingly, they are not drawing any sharp conclusions about whether there was any fraud here. They say: "Well, we have not concluded that the various financial statements as a whole contain material discrepancies based upon the totality of circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate."

And they are telling them that they should tell lenders, insurers, anyone else who has relied on this, about this, and as you mentioned, they also quit. They said that they would no longer do any work because of an unwaverable conflict of interest.

BERMAN: They say we're out. So how does this affect the Attorney General's investigation?

SCANNELL: Well, it is never good when your accountant says that you can't rely on the financial statements and it certainly re-emphasizes this point that we have known that the accounting firm is cooperating with the investigation, both the New York Attorney General and the Manhattan District Attorney, which has that criminal investigation.

Donald Bender, the lead partner who has been the liaison with Donald Trump and the Trump organization for years, he has been cooperating. He won before the grand jury we reported last year. So, it's not a good sign.

You know, this also indicates just, you know, again, that there is this break. Mazars had said in the financial statements that Trump came up with the numbers and that they had compiled it and that it didn't comply with GAAP. But here, they are also saying, you know, now, we're unsure about this at all.

BERMAN: What is the Trump Organization saying about all of this?

SCANNELL: Well, they're trying to play it to their advantage. I mean, they said that they're disappointed that Mazars is no longer going to represent them, but they are trying to imply that this is an indication because Mazars did not outright find some fraud, that this is then a seal of approval, and they're saying that the investigations are moot.

They've also have alleged that Tish James, the New York Attorney General and the DA are politically motivated.

BERMAN: Right, Kara Scannell, thank you so much for that reporting. Really appreciate it.

Joining us now, CNN chief political analyst, Gloria Borger; also Bloomberg senior columnist and Trump biographer, Timothy O'Brien. He is the author of "TrumpNation: The Art of Being the Donald," and here with me, CNN chief legal analyst, Jeffrey Toobin.

Jeffrey, I want to start with you. This letter from Mazars, is it wrong to read into it this is tantamount to them saying Trump lied to us.

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: I think that's the only logical implication that you can draw from this, but remember how accountants deal with clients? The way it works is the accountant says, give me your financial data and we will turn it into a tax return, a financial statement, but they rely on the candor and honesty of their clients.

And what this letter says is that we can't rely on the candor and honesty of this client, the Trump Organization. Now who prepared the false information? Who knew information that had been provided to the accountants was false? That's not disclosed here.


Was it Donald Trump himself? Was it lower level people in the organization? Not at all clear. But what is clear is that the numbers were wrong.

BERMAN: Common to do to cut ties?

TOOBIN: It is super uncommon, very uncommon. And by the way, the Trump organization's comment that this somehow vindicates them is nuts. I mean, it's quite the opposite.

BERMAN: So Gloria, you know, the pushback is going to be this is an investigation being run by liberal Democrats out to get Trump?


BERMAN: Can you lop an accounting firm that you've worked with for decades into this you know, a bunch of liberals out to get me pot?

BORGER: No, all right. Look, the accounting firm just fired their client and they said that it was based on information from what they called internal and external sources, meaning we have done an investigation and for the last decade, we've been telling you stuff that we now believe, is no longer true.

So try as the Trump Organization might to blame this on Letitia James or politics or whatever else, Mazars has been their client for 10 years, you know 10 years -- represented them for 10 years. So suddenly, what are they going to do? Turn on the accounting firm? I mean, I think it's very difficult for them to do that, and if you

are investors at some point looking to invest somewhere down the road with the Trump Organization and this has occurred, why would you ever do that?

BERMAN: So Tim, you've written about the former President's finances for a long time. At one point, he unsuccessfully sued you for what he claimed was a lowball description of his net worth. Did you ever think you'd see a day when Mazars just dump him?

TIMOTHY O'BRIEN, AUTHOR "TRUMPNATION: THE ART OF BEING THE DONALD": Actually, no, only because Mazars has been representing Donald Trump for longer than 10 years, and I find it rather mysterious they are saying they suddenly decided something was amiss here.

We deposed the predecessor firm, Trump's accountants that Mazars acquired. Mazars has represented Trump for much longer than 10 years. It's over two decades at this point, I think.

Trump said during my deposition that he had given me these statements of financial condition and I ignored him. Now, he never gave those to me, but they produced them during litigation and the documents we received during litigation in the mid-2000s, Mazars said in those documents that we are not going to sign off on these as conforming with GAAP, Generally Accepted Accounting Practices, because there's not enough here that makes us comfortable.

They knew it was problematic long before a decade ago. The difference then was it wasn't the New York Attorney General and the Manhattan District Attorney raising these questions. You know, Mazars said in the letter today that they filed that one of the things that convinced them to leave Trump in the dust was because of Letitia James -- New York Attorney General Letitia James's January filing in which she laid out a number of examples in which Trump had inflated his assets. Well, that's not new. Trump was doing that 20 years ago and Mazars, I think had reasons to suspect then.

But now, they are exposed to the same investigation that is targeting Trump. So, I think they are concerned about whether or not they've got criminal or civil exposure as a result of these investigations.

I think the other practical implication of this is that Donald Trump is also in the midst of trying to refinance hundreds of millions of dollars in debt, because his business holdings are under pressure, and his accountant just walked out the door. So the financial pressure has accelerated on his company, on him, and on his children, and Trump is going to have to start to scramble to find people who want to lend him money now and are comfortable doing business with someone whose own accountants don't want to work with him.

BERMAN: Jeffrey, pertinent to both the civil investigation which is from the New York Attorney General Letitia James, and the criminal investigation, which is from the Manhattan DA.

TOOBIN: Yes. It is relevant to both because the core allegation that both are investigating is that Trump inflated his assets that is submitted financial statements that were unduly and inaccurately large when he was trying to borrow money and submitted financial statements that were unduly small, lying too small when he was being taxed. That's at the heart of both investigations.

All of those submissions to the banks, to the tax authorities were prepared by these accountants who have now said don't rely on these documents.

BERMAN: So Gloria, I guess, the million dollar question or maybe it's the $300,000.00 question depending on who is doing the valuation. The question is, what will this do to Trump politically as he positions for the 2024 race?


BORGER: Well, you know, look, Trump supporters are Trump supporters. I think the question is for Donald Trump right now. The question is, how serious is this for him, personally, financially? And given what's going on with the January 6 Committee, he has a whole other circus going on there about accountability on January 6.

And so I think the question is going to be, what happens in the State of New York, first of all, and then you'll have to see what happens? His supporters will be there, but we have to really give this a little more time to play up.

BERMAN: Tim, we've got about 30 seconds left. I want to give you the last question here. Trump was deposed as part of your case right there. Just remind our viewers how many times do you think he lied during his deposition under oath?

O'BRIEN: Well, we caught him out. We caught him out lying about 30 times in that deposition on everything from his financial dealings to how much he got for speaking fees. He is pathologic on these sorts of things.

BERMAN: Ten seconds, Jeffrey.

TOOBIN: I think the point Tim is making about his financial condition. He needs to borrow money from someone. Who is going to lend money to someone who doesn't even have an accountant? And who will be his account will be now?

BORGER: And I think that's bad for the kids. It's really bad for Ivanka and her brothers who presumably would want to carry on the Trump Organization beyond him.

BERMAN: Gloria Borger, Tim O'Brien, Jeffrey Toobin, thank you all very much.

Next, more on that grim assessment that it is now more likely than not that Russia will attack Ukraine this week. That, the embassy closing, urgent security briefings, last minute diplomacy and more, we're going to have a live report from Ukraine and Washington and perspective from a former U.S. Ambassador to the country. And later, attorney George Conway's take on the Trump accounting news

as well as the few now building between the former President and the senior most leader in his own party, you know him as Mitch McConnell, or as the former President calls him the old crow.



BERMAN: More whiplash developments tonight in the Ukraine crisis.

As we reported at the top, a source familiar with the central question tells CNN that a Russian attack sometime this week is more likely than not. That sends a chilling message as does the closing of the U.S. Embassy in Kyiv with remaining personnel relocating west presumably out of the reach of invaders.

At the same time, the White House says, a path for diplomacy remains open and similar signals from Moscow brought the temperature down just a bit. And it's been back and forth like that all day right up until airtime as Russian forces continue to build up three sides on Ukraine.

White House officials spent the day briefing top House and Senate lawmakers in both parties on where things stand, the tone afterwards somber at best.


SEN. MARCO RUBIO (R-FL): This is a very dangerous situation. I think you're also at the same time have to balance a second concern, which is just as important and that is how quickly something like this could escalate into something very dangerous and catastrophic.

SEN. DICK DURBIN (D-IL): The only good news is that diplomatic exchange continues. Putin today, I guess indicated that he wanted it to continue. I'm looking for any positive news and I think that's positive.


BERMAN: Senator Mark Warner who chairs the Intelligence Committee also took note of Putin's apparent offer, while underscoring the growing threat, quote: "They could launch at any point," he said. "Nothing I heard today dissuaded me from that."

As a precaution, as we mentioned, Secretary of State Blinken today told a small number of remaining diplomatic personnel at the Embassy in Kyiv to temporarily relocate in the Secretary's words, "Due to the dramatic acceleration in the buildup of Russian forces."

We learned, meantime, that Defense Secretary Austin will be heading to Brussels this week to shore up the allies. And in Kyiv, Ukrainian President Zelensky and his wife posted a Valentine's Day video on social media showing in his words, "That we are together. We are home and we are in Ukraine." This followed an earlier posting, which his office later walked back

in which some wrongly interpreted that he was predicting the Russians would invade on the 16th, which is just two days from now.

We have correspondents tonight on both sides of the Atlantic. Clarissa Ward is in Kyiv; Kaitlan Collins at the White House. I want to start with Kaitlan.

Kaitlan, how is the White House viewing all of this tonight?

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, they are definitely concerned and they can tell -- you can hear it in their language, the way they're talking about the potential of an attack, that level of concern and that came especially from The Pentagon today when John Kirby was talking about the potential for an attack here and the way that they are intentionally using the language that they are.

And we are told by a source familiar that they do believe a Russian attack is more likely than not, and if one does happen, it is likely to be more significant than it is to be insignificant. That is, of course, a lot of nuance there and it remains to be seen what Putin would ultimately do. And officials have cautioned they don't believe he's yet made a decision based on what they know so far.

But it does speak to the level of concern that they have here of whether or not this is actually going to happen, and they do have a sense here, the White House that very much, an attack could happen as soon as this week.

BERMAN: So Kaitlan, what's the latest you've learned about the closing of the Embassy in Kyiv.

COLLINS: So this is notable because it already had been a pretty drawn down presence. They had removed all nonessential staff. Remember, they had told family members to go home several weeks ago, but now that they've officially closed it, the lights were off, as you saw earlier tonight, they were in the process of drawing it down.

It does show the level of concern they have about where an attack could happen, and it is in the capital city. They have moved those remaining diplomats in the country to much closer to the border with Poland where they believe it's a safer area. And so it does speak to the level of concern that they have.

And the Secretary of State Antony Blinken said that he believes this is just a temporary movement. They don't say how long that's going to -- that's expected to last, but we should note, John, it does come amid some criticism from the Ukrainian President who said he believed that nations who were moving their staff to that city closer to Poland that they believe that that was kind of a short sighted decision because if there was a Russian attack, there's going to be a Russian attack in Ukraine, and they don't believe it really makes a difference to move the embassy staff to where they've been moving them.

[20:20:16] BERMAN: Kaitlan Collins at the White House. Thank you very much. I

want to go to Kyiv now with CNN chief international correspondent, Clarissa Ward. Clarissa, what's the atmosphere there right now, given the U.S. decision to close the Embassy in Kyiv, and after this, you know what the Ukrainian officials are calling ironic Facebook posts from President Zelensky he mentioned a possible attack on the 16th.

CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT: You know, John, it's really just like watching a surreal split screen. There is a huge discrepancy from the alarm, the concern, the warnings that are coming from Washington and the way that people are behaving on the ground and the way that Ukrainian leadership is handling this situation as well.

You referenced President Zelensky jokingly referring to the fact that, you know, he'd been told, or there had been reports rather that there would be an invasion on Wednesday, the 16th.

Well, now, he has decided to call Wednesday, the 16th, a national holiday. It is going to be National Unity Day. People are going to fly flags, and they're going to sing the National Anthem. The idea being that he's trying to calm people down, to stop people from panicking, and to really play down ultimately, some of the threats that the U.S. Intelligence Community has been conveying to the Ukrainians.

Now, underneath that, though, John, is the reality that there is clearly a very grim picture taking place on the border, and there are now preparations beginning slowly and calmly in a way that is designed not to upset the Ukrainian people, but we heard from the Mayor of Kyiv today who talked about making sure that shelters are ready, bomb shelters, potentially, if there was some kind of assault on Kyiv.

He talked about ensuring that evacuations would be planned and carried out in a precise way, what to do if cellphone towers were taken out. We also heard from President Zelensky himself saying that he is going to increase the salaries of Ukrainian Armed Forces by 30 percent, and he is also going to release some kind of a streamlined information service so that Ukrainians can have up-to-date, up to the minute and reliable verifiable information.

So on the surface, things seem calm and there is a kind of rejection almost of some of the rhetoric that we've heard from Washington. But underneath, preparations are underway and there is tension certainly.

BERMAN: Clarissa, any sense that President Zelensky would shift the messaging on Ukraine's plans or desire to enter NATO?

WARD: So this is an interesting one, John, because over the weekend, the Ukrainian Ambassador to the U.K. gave an interview where he appeared to imply that potentially, Ukraine might be willing to forfeit its long desire to join the Alliance if they were able to somehow help deescalate the situation. He then wrote that back very, very quickly and since then, we have seen a number of politicians come out and categorically reject it.

This morning, we heard from the Foreign Minister here saying we continue to pursue our path to NATO. We heard again from President Zelensky later in the afternoon, reaffirming that Ukraine's commitment right now is to try to proceed on that path. But there have been rumblings privately and behind closed doors, that potentially there could come a moment where Ukraine would come under pressure, to at least make some kind of a statement to the effect that it is not their immediate intention to join NATO because the reality is that even if Ukraine wants to join NATO right now, it is not feasible for a number of complex reasons in the short term.

And so this would kind of be an easy concession, if you will, however, it would require a big climb down for President Zelensky, it could be very difficult for his government to survive. And frankly, it's not even clear whether President Putin would accept it -- John.

BERMAN: No, but it is clear that I think a lot of people heard those comments in Ukraine, in the United States, at the White House, in Russia at the Kremlin, with great interest, wondering if maybe there was a window opening just a little bit.

Clarissa Ward, thank you so much for being there for us. I'm sure we will talk to you again very soon.

Perspective now from Steven Pifer. He's a William Perry Research Fellow at Stanford University and a former Ambassador to Ukraine.

Ambassador, thank you so much for being with us. What's your impression of this reporting that we just learned that according to a source, a Russian attack on Ukraine sometime this week, is more likely than not?

STEVEN PIFER, FORMER U.S. AMBASSADOR TO UKRAINE: Well, I think it reflects a U.S. government assessment that there is a significant risk of Russian military action against Ukraine and it comes at a time when Moscow is sending mixed signals. Today, there was an effort by Moscow to leave the door ajar for diplomacy although for four weeks now, the Russians haven't responded in a positive way to some of the ideas that the United States NATO put forward.

Meanwhile, you have this military buildup continuing even today, the Russians had six amphibious landing ships leave Sevastopol Harbor, which no doubt give them new capabilities, perhaps for landing on Ukraine's southern shore. So there still are a lot of alarms going on about this Russian military buildup.


BERMAN: How do you reconcile these two what seem to be opposing trends? Number one, as you said, Vladimir Putin seeming to open the door a little bit, or Russian officials opening the door a little bit to diplomacy, while at the same time clearly increasing the level of their military presence. You know, look, I mean, one Pentagon official today said that they could attack with little to no warning.

PIFER: Yes, well, it may well be that Mr. Putin has not yet made a final decision. So, he is giving himself an out. But what I do worry about is it seems that the Kremlin increasingly is putting itself in a corner, where it will have two options either to launch a military attack on Ukraine or to make a climb down, which could be somewhat embarrassing.

I mean, after all of this build up to then just have the troops go home, without getting what the Russians have called their key demands things like a renunciation by NATO of any further enlargement. That could be embarrassing. It could be looked at that Mr. Putin had bluffed, and that he'd been called on that bluff.

BERMAN: You wrote a really interesting piece on this, you say that Russia is cornering itself here. So if you're the United States, what do you do about that?

PIFER: Well, I think the Biden administration has the approach just about right. What they've done is, they said, on the one hand, there is a diplomatic path forward. NATO is not going to agree not to enlarge further, it's not going to agree to withdraw forces from those allies who joined the alliance after 1997.

But it has said, there are a range of arms control, risk reduction, and confidence building measures, which could really make a genuine contribution to security in Europe, including to Russia. So that's there. But they've also made clear that if the Russian military does go into Ukraine, again, there will be significant cost, sanctions, a greater NATO military presence on its eastern flank, and even further shipments of weapons into Ukraine and defensive systems to help the Ukrainians better defend themselves.

BERMAN: I know you were in Ukraine a couple of weeks ago. What's your reaction to the U.S. Embassy being closed in Kyiv? What does that tell you about the State Department's thinking?

PIFER: Well, I wish it did not come to this, but I take it as another indicator that the U.S. government's assessment is that there is a very real possibility that sometime in the not too distant future, the Russian military may go into Ukraine.

I hope that the government is wrong on that, because I think that would be a tragedy for Ukrainians, but also, I think it would be a perhaps a tragedy for Russia, because two weeks ago, the Ukrainians I talked to, they're determined to resist. If the Russian military goes in, it will not find itself having an easy time.

BERMAN: Ambassador Steven Pifer, I really appreciate you being with us. Terrific discussion. Thank you, sir.

PIFER: Thank you.

BERMAN: Returning to our top story where the former President's accounting firm dumped him. It's just one of several big Trump related items we'll talk about next with attorney, George Conway including new word about Rudy Giuliani in the January 6 committee and why the Senate's top Republican is reportedly trying to thwart the former President.


[20:32:14] BERMAN: Again, our breaking news for the top of the hour. The longtime accountants for Donald Trump's business empire cutting ties with him and the Trump Organization. Bizarre says the Trump organization should no longer rely on nearly 10 years of financial statements. The accounting firm writes, well, we've not concluded that the various financial statements as a whole contain material discrepancies based on the totality of the circumstances. We believe our advice to you to no longer rely upon those financial statements is appropriate.

Joining me now is conservative lawyer George Conway, who's also a contributing columnist at the Washington Post. And George, you tweeted tonight, this is worse for him than getting impeached twice. Why is that?

GEORGE CONWAY, COLUMNIST, THE WASHINGTON POST: Absolutely. Absolutely, because it goes to his business. I mean, impeachment the worst thing to happen to an impeach President is they be they they're removed from office, and they go back to doing what they did in private life. This is his private life. This is what he had to go back to, which is running his own private business. And now, his private business, 10 years of financial statements had been pulled by the accountants and the accountants are basically saying you cannot rely on them, which raises all sorts of potential collateral issues for the Trump Organization, which could be -- there could be debt covenants that say that, you know, you have to keep providing us on an annual basis, audited financial statements and reliable, financial statements that are looked over by an accountant.

And now he can't do that. They're all gone. All these financial statements are worthless to him. And there's no likelihood. I think it was pointed out earlier in the hour, that he's going to be able to find another accountant to fix this problem. And it's 10 years worth. That's just remarkable. I mean, this is about this is about as calamitous a thing that could happen to a business that you could imagine, other than, you know, getting indicted, or going bankrupt and this could lead to going bankrupt.

BERMAN: What about getting indicted? Do you think he's in a worse legal situation because of this time (ph)?

CONWAY: Well, it -- of course, yes. It's highly problematic, because now you are -- you have the accounting firm saying although they say they say that they didn't find determine whether their material discrepancies. What they're basically saying there is we have no idea what the right numbers should be. And you can't rely on them. And the reason why we and the fact that they are a resigning as his accountants basically means that they're pointing the finger at him. They have a conflict of interest with him according to the letter, which means, as I interpreted under these circumstances, they're basically playing on Team AG and team DA and not on Team Trump anymore.

And they are going to be pointing the fingers at the Trump Organization say, well, OK, well, you know, the information here, if it's wrong, they gave it to us. And that's not helpful. And particularly, it's unhelpful for the investigation, part of the investigation that's being conducted by Letitia James, the Attorney General. She has the authority to bring a civil case under a New York statute called The Martin Act and The Martin Act because it's a civil statute and because of the way it's written does it require the prosecutor to prove intent and fraudulent intent. And not -- and if these statements are basically if the accountants are basically concluding that these statements are not reliable, that they contain false statements, basically, that case is proven.


BERMAN: George, separate from this, I want to talk Republican politics for a second here. The Senate Minority Leader Mitch McConnell is pushing to recruit candidates that he believes are the best job winning their races in November, and he's supporting several candidates who've been critical of the former president. Obviously, Donald Trump still has plenty of power within the Republican Party. But is that power waning?

CONWAY: Well, I mean, I think they're arguing McConnell and his allies are arguing that it is. And I can only hope that they're right. I mean, I think they're here, there's this big tension that we saw during the GA Senate elections. I mean, you know, in the House, everybody's happy to kowtow to Donald Trump, because for the most part, the Republicans run from safe districts that are heavily Trumpy. And, you know, if you're running for the United States Senate, you have to win a whole state. And there are lots of states where you, you know, aligning yourself with Donald Trump or being MAGA is going to hurt you with a, you know, suburban voters who would otherwise vote Republican.

And McConnell knows that, he knows that Trump caused the losses in Georgia in last year, and he doesn't want to see a repeat of that. And that's why he's trying to recruit these candidates who are not MAGA candidates, and that's why he's trying to convince them that they should run and trying to convince people that, you know, being, you know, being on Trump's bad side doesn't necessarily hurt you in the Senate race.

BERMAN: So George, Rudy Giuliani, we are reporting, his team is in discussions with the January 6, select committee to have him go answer questions. Does this represent a significant move on his part? What do you think he's playing out here?

CONWAY: My guess is he's -- but he doesn't really have the money anymore. It seems, I mean, that according to reports, that to basically engage in a lot of fighting over documents and fighting over subpoenas. He is running short on money. He's been begging for quite some time Trump to pay his legal bills. And basically Trump has stiffed him.

And so, you know, the easiest course, the smartest course for Giuliani is to cooperate. And Giuliani has a lot, a lot of legal problems, he's got -- he's been sued by Dominion voting systems, and other people who he libeled in connection with the Big Lie last year. And he's also got this disciplinary proceeding where he's, he could he could easily lose his law license already been suspended. But there has to be a trial before we can it can be it can be determined whether or not what the permanent sanction will be.

So, he's got a lot of problems and he doesn't really have -- he's had a legal problems. He's got a lot of legal bills, and the best way for him to minimize expense is to cooperate with the January 6 committee. And it doesn't -- he doesn't really have many reasons to help out Donald Trump now since Trump has been refusing pay Giuliani's legal bills.

BERMAN: Well, if you were to full on cooperate with the January 6 committee, that would be surprising. That would be a big turn. George Conway, I appreciate you being with us tonight. Thank you very much.

CONWAY: Thank you.

BERMAN: Just hours ago, the judge overseeing Sarah Palin's case against the New York Times delivered a big blow to Palin as the jury continues to deliberate. We'll give you the latest, next.



BERMAN: More breaking news and a big round one win for the New York Times. The judge overseeing former Alaska governor Sarah Palin's defamation lawsuit against the Times, said he will dismiss the suit after ruling the Palin's team did not provide sufficient evidence in its case. So, he also said he will allow the jury to continue deliberating and reach a verdict. But whatever they come back with, he's still going to dismiss the case. Palin sue the Times in 2017, after they published an editorial that incorrectly linked a map that other Palin's political ash committee had posted to a shooting in 2011. They killed six and injured former Congresswoman Gabrielle Giffords.

Joining us now with the latest, CNN chief media correspondent Brian Stelter. Brian, what did the judge have to say about how he came to this decision?

BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: He said he wasn't pleased about this because he was disappointed by the New York Times. He feels like the paper really screwed up with this editorial that you described from 2017. He said this was an example of very unfortunate editorializing on the part of the Times. However, the law here sets a very high standard for actual malice, and that standard has not been met.

So basically, Judge Rakoff is saying this trial should not have been allowed in the first place. It should have been thrown out during the initial court proceedings. But the trial did go through. And we heard the presentations from both sides last week. And many legal experts came away with the same conclusion, but the judge has concluded that that's Palin's team simply did not prove what was necessary to meet that really high threshold of actual malice.

But the big picture context here, John is, what should the bar, where should the bar be set? Should the Barbie set so high? Should it be so hard for public figures who are written about in ways that they are disturbed by to be able to sue and win? Remember six years ago, Donald Trump started saying the libel laws in this country should be loosened? Well, Sarah Palin is trying to do that, she's trying to loosen the libel laws to make it easier for politicians and celebrities to sued news outlets. In this case, even though the New York Times has prevailed in round one, it will have round two and round three, and eventually could have serious consequences for libel law.

BERMAN: But again, this isn't about the time whether they got it wrong, they did get it wrong. The issue is --

STELTER: Oh yes.

BERMAN: -- whether or not there was malice in getting it wrong. And the judge said no way, you did prove that you didn't come close to proving that. What are both sides saying?

STELTER: That's right, the New York Times saying this is how it's supposed to work. When we make a mistake, and we correct it, you're not supposed to sue and get millions of dollars in damages. So the Times is happy about today's ruling. But as you said, you know, the jury is still deliberating, whatever the jury decides it's basically moot. But all of this is going to create a public record for an appeals court process. Some conservative lawyers like to see this go all the way to the Supreme Court so that those libel laws can be revisited. So that any politician of any party can have more power to try to challenge these outlets in court.

Now that could hurt the foxes of the world, when they go on the air and lie about voter fraud. It could also hurt local newspapers and other ways. So this is a case worth watching not because involving Pailin gets involving the future than this.


BERMAN: Yet has a lot of significance going forward. Brian Stelter, thanks so much for being with us.

STELTER: Thanks.

BERMAN: Have a great night.

Up next, the frustration that sparked a showdown in one small California town. Why the area is poised to be led by ultra conservative backed by some in the community with Militia ties.


BERMAN: In a conservative Northern California community, they've been threats made against politicians, outrage over COVID vaccines and mask mandates. So, and a six figure political donation from an out of Towner, all of that adds up to the likely removal of a longtime Republican county supervisor who critics say is not Republican enough. This is the same place for nearly 63% of voters back to the former president in the 2020 election, a red county in a blue state and now county is poised to be led by ultra conservative is backed by some the community with Militia ties. Opponents of the move or it could happen in other towns across the country.


More from CNN's Kyung Lah.


KYUNG LAH, CNN SENIOR NATIONAL CORRESPONDENT (voice-over): There is a quiet revolution happening in this rule California town.

WODDY CLENDENEN, SHASTA COUNTY RECALL SUPPORTER: There was just a lot of frustration. A lot of people were pretty fired up. So, that kind of lit the fuse.

LAH (voice-over): In Woody Clendenen, Shasta County barber shop. It's not just Republican views, but ultra conservative, guns, a confederate flag rolled up in the corner. Clendenen is an unapologetic member of the California state militia. He says conservatives like him woke up when COVID first struck,

CLENDENEN: Businesses got closed down and schools and all that and we've had an (inaudible) moment in this country, you know, and people are like, holy crap, we better get a hold of things here.

UNIDENTIFIED MALE: Make no mistake, this is now the people's house.

LAH (voice-over): They took hold of their local county board.

UNIDENTIFIED MALE: I don't care about your decorum. You guys are going to prevent me from completing my citizen's arrest.

VENUS B. "FREEDOM", SHASTA COUNTY RECALL SUPPORTER: I know that change starts local. So that's why all of us are here.

They were trying to put masks on our kids.

LAH (voice-over): Venus B. or Freedom, as she'd prefer to be called, is a mom of two who calls vaccines harmful to her children, and says the pandemic directed her rage to the closest politicians available.

(on-camera): Why does it have to be so loud? Why did it have to be slogans like let's go Brandon?

B: being passive gets you nowhere. And being just complacent, gets you what we have. And we want so much more.

They like to call us domestic terrorist because we're passionate and just because you're passionate doesn't make you a terrorist.

LEONARD MOTY, FMR DISTRICT 2 SUPERVISOR, SHASTA COUNTY: I think they're going to try to make this community over into their image and make it a very extremist alt right community.

Leonard Moty was a Shasta County Board member was because early election results show he lost a recall election this month. A lifelong Republican and local police chief, Moty was targeted because he stood up to the anger at the board meetings define their demands to reject state mask and vaccine rules. Then threats started online and in public.

UNIDENTIFIED MALE: We know where you live. We know who your family is, we know your dog's name.

LAH (voice-over): The anger turned into a recall petition to remove Moty. A pro-Trump millionaire in Connecticut with ties to Shasta County took interest in the local recall effort and donated hundreds of thousands of dollars to the small town race.

MOTY: It's very disheartening to me to have a group be able to spend that much money to personally assault my reputation that I worked for 44 years to build in my hometown.

LAH (on-camera): That the extremists win?

MOTY: They won the first battle. I do think it's the Republican Party falling apart. Don't think it's just going to go away. Don't think this can't happen to you.

DONI CHAMBERLAIN, CHIEF EDITOR, A NEWS CAFE: My call it Shas Taliban. It's the anti-vax people, the anti-mask people, anti-science people.

LAH (on-camera): Doni Chamberlain runs an online website covering Shasta County and unabashed Democrat, she backed Moty. With his recall, Chamberlain says it's now the far-right in majority control.

CHAMBERLAIN: they forced the ouster of a supervisor who had truly done nothing wrong. I'm fearful about the kinds of people who will come in and how they will vote, and what will happen to Shasta County.

LAH (voice-over): The most visible national face with this local recall his California state militia member Carlos Zapata, who has appeared on conspiracy outlet Infowars.

CARLOS ZAPATA, SHASTA COUNTY RECALL SUPPORTER: You don't vote your way out of socialism. Once it takes root, the only way to eradicate it is to fight with arms to have a violent, violent confrontation of blood in the streets.

LAH (voice-over): And his speech at the Shasta County Board went viral.

ZAPATA: I've been in combat, and I never want to go back again. But I'm telling you what I will save this country, if it has to be against our own citizens, it will happen. And there's a million people like me, and you won't stop us.

LAH (on-camera): There were some harsh words that you said.

ZAPATA: Horse to who, horse to the people need to hear maybe I wish people were more angry. You know it anger gets you to the point of action, right? If I wasn't angry, I never would have acted people. You got to get angry enough to act. So anger is not a bad thing. Now violence, that's a different deal.

LAH (voice-over): Zapata and his coalition called themselves Red, White and Blueprint offering what they call a template to turn rage in school boards and city councils across the country into political takeover.

ZAPATA: I would never want my kids and myself got to go through a civil war. But it seems to me the direction we're headed is in that direction. I don't like it at all. So that's what we're doing is things using the mechanisms of political mechanisms, peaceful mechanisms, so we don't have to get there.


LAH: And we know of at least one other county that is close to Shasta that is following its footsteps in Nevada County seeking to recall all of its board members. And Carlos Zapata tells us that he's been -- he's heard from at least 60 other counties, John. And what he says he's sharing with them is that template that he was talking to us about the red, white and blue print template, which is essentially a guide for other counties to follow in their footsteps. John.


BERMAN: What a story. Kyung Lah, thank you very much.

Canadian Prime Minister Justin Trudeau today took a huge step in fighting back against the trucker inspired protests that had been causing havoc in Ottawa and hindering traffic flow with the U.S.- Canadian border crossings. The details, next.


BERMAN: The Canadian government is bringing in new measures to help curb the huge trucker inspired protests against the country's COVID-19 mandates. Today, Prime Minister Trudeau said the government is invoking the Emergencies Act for the first time to help address the impact of the protest. The act can temporarily suspend citizens right to free movement or assembly and the government also said they are implementing sweeping financial measures that will block funding for the protests.

This comes as the Ambassador Bridge North America's busiest land border crossing reopened Sunday as Ontario province announced plans to loosen pandemic restrictions.


The news continues. So let's hand it over to Laura Coates in "CNN TONIGHT." Laura.