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Paul Manafort Trial Continues; President Trump Once Again Calls Russia Investigation a Hoax; Mueller and the Madam; Trump Slams "Russian Hoax" After Trump Admin Warns of Threat. Aired 4-4:30p ET

Aired August 03, 2018 - 16:00   ET

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

[16:00:03]

ERICA HILL, CNN ANCHOR: She was linked to the scandal that brought down a governor. What could she have on people close to the president?

THE LEAD starts right now.

Breaking news. The so-called Manhattan Madam sits down with Robert Mueller's team. The news is shining a new spotlight on President Trump's political bulldog.

Crisis at the border caused by the White House. Hundreds of children who may never see their parents again. The administration's response today? Let someone else fix it.

Plus, leaving the skies exposed? New details in a CNN exclusive report on the TSA's plans to cut costs and security. Could some federal air marshals be grounded next?

Welcome to THE LEAD. I'm Erica Hill, in today for Jake Tapper.

We begin this afternoon with breaking news in our politics lead.

Mueller and the madam. Sources telling CNN special counsel Robert Mueller has interviewed Kristin Davis, famously known as the Manhattan Madam. Davis has ties to longtime Trump adviser Roger Stone.

And she's also linked to the prostitution scandal the brought down former New York Governor Eliot Spitzer. Davis' voluntary meeting with Mueller happened this week.

We want to get right to CNN's Sara Murray, who has more details, including, Sarah, remind us how Stone is connected to Davis.

SARA MURRAY, CNN NATIONAL POLITICAL CORRESPONDENT: Well, Erica, Roger Stone and Kristin Davis have been friends for nearly a decade. They have worked together at various points.

But what is still very unclear is what exactly the special counsel needs from her when it comes to the Russia investigation.

(BEGIN VIDEOTAPE) MURRAY (voice-over): Kristin Davis, the woman known as the Manhattan Madam, meeting with special counsel Robert Mueller's team for a voluntary interview earlier this week, sources tell CNN.

Investigators apparently interested in her ties to longtime adviser Roger Stone. She and Stone have been close friends for a decade. Investigators also expressed interest in having Davis testify before a grand jury, the latest indication prosecutors are aiming to be build a case against Stone.

Davis' lawyer declined to comment. In a statement, Stone tells CNN: "Kristin Davis is a longtime friend and associate of mine. I am the godfather to her 2-year-old son. She knows nothing about Russian collusion, WikiLeaks collaboration or any other impropriety related to the 2016 election, which I thought was the subject of this probe. I understand she appeared voluntarily. I am highly confident you will testify truthfully, if called upon to do so."

Davis once ran a high-end prostitution ring and went to jail as part of the scandal surrounding then Democratic New York Governor Eliot Spitzer.

ELIOT SPITZER (D), FORMER NEW YORK GOVERNOR: The remorse I feel will always be with me.

MURRAY: She has worked with Stone over the years and, in late 2016, she joined his payroll to help him with clerical tasks. Mueller's team has been looking into possible contact between Stone and WikiLeaks founder Julian Assange during the 2016 campaign.

ROGER STONE, FORMER TRUMP CAMPAIGN ADVISER: Yes, I followed Assange's Twitter very assiduously. I had a Google alert for him. I read every interview he gave. You could foreshadow what he's doing. I'm not involved in any collusion, coordination or conspiracy with the Russians or anyone else, and there's no evidence to the contrary.

MURRAY: Investigators have also been probing Stone's finances and his personal life. People familiar with the situation say at least two witnesses were asked whether Stone was actually the father of Davis' son.

Earlier this week, Stone posted a photo of Davis and her child to Instagram with this caption: "Why do FBI agents dispatched by Robert Mueller keep asking a number of my current and former associates if I am this baby's father? What does this have to do with Russian collusion and the 2016 election?"

(END VIDEOTAPE)

MURRAY: Now, another former associate of Roger Stone, Andrew Miller, was also ordered to testify before Mueller's grand jury just this week, yet another indication of how the special counsel seems to sort of be circling Roger Stone -- Erica.

HILL: Indeed. Sara Murray, appreciate it. Thank you.

I want to bring in our panel now.

And, Laura Coates, I want to start with you.

This was a voluntary interview, as we know, as we have been told, for Davis, but CNN also told by sources that Mueller may next want to bring her before the grand jury. Read those tea leaves for us. What does that all really add up to?

LAURA COATES, CNN LEGAL ANALYST: Well, first of all, that it's voluntary means that they knew they had the voluntary and -- grand jury subpoena power to get her in even if she didn't want to come in.

They were probably trying to massage their way into a conversation to figure out what kind of information she had, what she would be willing to tell. And if they want now to have her in front of a grand jury, they want to codify that and solidify that in stone what she had to say, because, obviously, it was fruitful in some manner, shape or form.

Now, it doesn't mean there's any criminal activity they're going to be able to conclude from it. But the fact that they want a grand jury to hear what she had to say in a voluntary interview with investigators suggests that there is more to the issue.

And when you have a grand jury, you want that testimony written down, so you can actually use it in the future, maybe for perjury.

HILL: Well, and in terms of that, looking at all this, if you are Roger Stone, Rich, and you're watching how all of this playing out, you and your attorneys, as you're huddling, what's the thinking there?

[16:05:02]

RICH LOWRY, CNN POLITICAL COMMENTATOR: Well, it's hard to know.

I mean, certainly he's under scrutiny. And if you were going to make a list three years ago of the Trump associates who would most likely to be in trouble, it'd be Paul Manafort right at the top of that list, and Roger Stone somewhere right beneath them.

So I think the major jeopardy we're seeing in this case, you have on shady lobbying case, Paul Manafort, you have Russians indicted who will never see the inside of a U.S. courtroom. They're kind of extemporary indictments.

And then you have perjury. You have people not telling the truth. So any lawyer working for any of these people under scrutiny has to be emphasizing do not think you are more clever than these professionals who will nail you to the wall if you make the slightest fib.

HILL: Roger Stone released this statement about Kristin Davis -- quote -- "She knows nothing about Russian collusion, WikiLeaks collaboration or any other impropriety related to the 2016 election, which I thought was the subject of this probe."

Phil, Rich has sort of laid out, right, what we know so far. We have got Manafort on trial. We have got Russians who've been indicted. There are questions of perjury. There are all these tentacles here. How is this all coming together? Because there are plenty of people who look at this, and they go, wait a minute, everything else that's going on in the periphery here. That's not collusion.

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: Hold on a sec. Never say that.

Look, Mueller is methodical. The man doesn't make a move without a reason. So it's the methodical Mueller meets the Manhattan Madam.

Let me give you a couple of reasons why this might happen. And the Mueller I knew, I worked with him for four-and-a-half years, does not do fishing expeditions. I can think of two reasons. One is people, and the second is money.

If Roger Stone is in the middle of this investigation, one of the basic sort of questions or lines of questions you would have for her is, what do about him, but what else do about people he introduced you to, people he talked about, people who are in his circle?

I want people questions to fill out what we know about who Mr. Stone was in contact with. The second issue, I assume her business dealings -- I want to be polite on camera -- were interesting and varied. I want to know, if Mr. Stone had a business relationship with her, where that money came from. Who paid? How did they pay? Obviously, that was an important question for the Manafort investigation so far.

He was paying for clothes with wire transfers from overseas. If she had a financial arrangement with Stone, who paid for what? I think it's pretty interesting.

HILL: And as we look at all of this, Joan, you covered Kristin Davis dating back, right, to her involvement with disgraced New York Governor Eliot Spitzer. Roger Stone, of course, when she decided to launch that gubernatorial bid here in New York, was her campaign strategist.

JOAN WALSH, CNN POLITICAL COMMENTATOR: Right. Right.

HILL: What more can you tell us about what you learned about their relationship?

WALSH: I believe they're very close. I have seen them out and about in Manhattan. He introduces her as his assistant, which is consistent with everything. I don't know anything that hasn't been said already, Erica, but I would add to what Rich said.

HILL: Right.

WALSH: This not necessarily only about perjury. I mean, Roger Stone has been looked at for a number of things.

Phil is right, money. Communicating with WikiLeaks, not illegal, but what were the communications? Communicating with Guccifer -- Guccifer, however we say it, as well, I believe. So Roger Stone is someone who there's a lot of smoke. There's not fire yet. And if indeed they are as close as they seem, she may well know about money. I have no idea. She went in voluntarily. But if they continue to go down that road, I think she knows a lot.

(CROSSTALK)

COATES: At some point in time, when you're investigating or prosecuting a case, you have to go away from the he said/she said, the constant credibility game, and get corroboration.

And sometimes you have to have people who are associates who say, I'm not going to even tell my witness what it is I know. I want you to tell me what and corroborate facts that I may not be able to get anywhere -- anyplace else.

And if there is a relationship, either out of intimacy or friendship, there's still the idea of pillow talk. And so, what has he said to you, a trusted person who knows his life that nobody else knows? I want that collaboration. And I want it in front of my grand jury.

HILL: There was also this week a lot of focus on a potential interview, once again, talking about a potential interview between the president and Robert Mueller for some time, as we know.

But there is reporting in "The New York Times" this week that the president really wants to sit down because he believes he can convince investigators this is really a witch-hunt.

I mean, on the one hand, listen, it's not surprising, as we all know, that the president may want -- may very well have said that, that he thinks he is the guy who convince them, right, at some point.

But it also begs the question, is that really what's going on? Or is this something is maybe being filtered out again by the legal team as part of the P.R. strategies to see how it plays in the court of public opinion?

WALSH: That's what I think. That's actually what I think, Erica.

I don't -- I believe that Donald Trump is occasionally delusional enough to think I can convince Robert Mueller. But he's got a broad legal team, and I'm not talking about Rudy Giuliani, who have to be sitting down with him and saying, no, really, you can't do this, you cannot make things better for yourself.

So I really -- I felt like it was -- it was a P.R. strategy to say, yes, the president has always said so. He's got nothing to hide. He wants to. He won't.

HILL: He won't.

Phil, do you think he will?

(CROSSTALK)

MUDD: No, I think that is dead on.

[16:10:01]

Let me give you a simple explanation that we haven't talked about. People keep saying there's a divide between the legal team and the president. That may be true.

There's another simpler explanation, which is the president's pretending to play along, pretending to be on a different side than his legal team, and actually behind closed doors, what he's saying is, I'm going to make it look like Mueller made the conditions so difficult that I couldn't speak. I

think this is all a game. And I think the game is to get the president off the hook, because he walks in that room, let me tell you who's going to win, and it's not going to be the president. Director Mueller is going to win that game, I guarantee you.

HILL: Laura, quickly, you just weigh in on that for me.

COATES: On the one hand, you can see why you would prefer, if you're the president of the United States, to testify voluntarily and not wait until Mueller's team gives you a subpoena, then battle it out in court and say you have to come in, because you get to have your lawyers present when you're there.

You get to have them sitting next to you nudging you in the ribcage saying, remember, you don't -- you didn't say that exact point. Remember, we talked about this, Donny, in different areas.

You can see the advantage in that respect. But I do think it's a lot of smoke and mirrors to say, well, I'm really willing, but they just don't want to hear for me, but also not a very far-fetched conclusion, given that you did hear the former FBI director talk about how he hid behind the curtains in the White House because he was a little bit intimidated.

(CROSSTALK)

HILL: I had forgotten about that moment.

(CROSSTALK)

(LAUGHTER)

COATES: ... the former FBI director would also maybe succumb to his intimidation in that particular -- so maybe he's emboldened by what he's already heard.

HILL: Oh, so many maybes. Oh, to be a fly a wall either behind or in front of the curtain.

Rich, I promise you get the first question the next time we're all back.

Stay with us. After all the nation's security chiefs warned that our democracy is in the crosshairs, President Trump makes a big joke of confronting Vladimir Putin. So, will the White House and the president ever be on the same page when it comes to Russia?

Plus, new information on a CNN exclusive, slashing security at the nation's airports. Will there be a federal air marshal on your next flight?

(COMMERCIAL BREAK)

[16:15:56] ERICA HILL, CNN HOST: We're back with a stunning and consistent disconnect between President Trump and the Trump administration. A source telling CNN the president asked the nation's top security officials to brief the nation on Russian election interference, to send a message President Trump apparently cannot.

Homeland Security Secretary Kirstjen Nielsen warning, quote: Our democracy itself is in the crosshairs.

It's not clear the president heard that. Here's what he had to say just a few hours later.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Now we're being hindered by the Russian hoax. It's a hoax, OK? I'll tell you what. Russia's very unhappy that Trump won.

(END VIDEO CLIP)

HILL: Except that you likely recall Putin was standing right next to President Trump when he told the world just a couple of weeks ago he wanted Donald Trump to win.

CNN's Jeff Zeleny picks up the story now from New Jersey where the president is on a working vacation.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): It's become part of President Trump's all too familiar soundtrack.

TRUMP: I call it the Russian hoax.

They made up the whole Russia hoax.

ZELENY: But those same words at a Pennsylvania rally last night --

TRUMP: Now, we're being hindered by the Russian hoax. It's a hoax. OK?

ZELENY: -- striking a new and discordant tone coming only hours after his national security team stepped forward to call out Russia for its ongoing role in attacking U.S. elections.

From the FBI director --

CHRISTOPHER WRAY, FBI DIRECTOR: Russia attempted to interfere with the last election and continues to engage in maligned influence operations to this day.

ZELENY: -- to the head of national intelligence --

DAN COATS, DIRECTOR OF NATIONAL INTELLIGENCE: We continue to see a pervasive messages campaign by Russia to try to weaken and divide the United States.

ZELENY: -- to the secretary of homeland security --

KIRSTJEN NIELSEN, SECRETARY OF HOMELAND SECURITY: Free and fair elections are the cornerstone of our democracy and it has become clear that they are the target of our adversaries.

ZELENY: -- all saying what the president has refused to say in public.

As the government issues warning after warning about Russia --

WRAY: This is a threat we need to take extremely seriously, and to tackle and respond to with fierce determination. And focus.

ZELENY: -- the president dwelling on his warm relationship with Vladimir Putin.

TRUMP: In Helsinki, I had a great meeting with Putin. We discussed everything. I had a great meeting.

(CHEERS AND APPLAUSE)

TRUMP: We got along really well. By the way, that's a good thing. Not a bad thing.

ZELENY: Three weeks after Trump and Putin's summit, a meeting that elevated the Russian president on the world stage, a central question remains. What did the two men talk about during their two-hour private meeting?

When asked in the White House briefing room, Dan Coats, director of national intelligence, said he still didn't know to what degree election meddling was discussed.

COATS: I'm not in a position to either understand fully or talk about what happened in Helsinki. I'll turn it over to the national security director to address that question.

JOHN BOLTON, NATIONAL SECURITY ADVISER: Yes, the issue was discussed and in fact, President Putin said the first issue that President Trump raised was election meddling.

(END VIDEOTAPE)

ZELENY: So, as we end this week here, we do still have so many questions about that Helsinki summit, but there has been a major change at least from the government.

There was that unified show of force about election meddling, but it was missing one critical voice. The president's voice who, of course, has the loudest megaphone of all. Now, he will be here on a working vacation. He'll be going to Ohio for a brief campaign tomorrow.

Erica, we'll see if he mentions it there.

HILL: We will be watching. Jeff, thank you.

We heard today from a Russian foreign ministry spokesperson who said this two-year hysteria around the alleged Russian interference which did not happen not only undermines bilateral relations, but also mocks the whole political system of the U.S., representing democracy there is the house of cards.

So, obviously, not surprising that that would come from Russia. It played right into though what we're hearing of the president I should say, is actually playing right into the hands there and against his own officials.

[16:20:09] It's not the first time, but it is becoming more and more obvious and it's getting louder. Is it also becoming more damaging?

RICH LOWRY, CNN POLITICAL COMMENTATOR: Well, you had the split screen effect because on the substance, as far as I can tell, they're doing everything they should. And your reporting is correct -- the president did want his officials go out and talk about what they're doing. But he thinks for his political purposes, it's important to be as 110 percent against the Mueller investigation and say the whole thing is a hoax as possible for his political purposes to discredit that investigation.

And the split even goes deeper, of course, because he has this fixation about getting along with Vladimir Putin and thinks that's the most wonderful thing in the world. At the same time, his actual policy, whether it's giving lethal arms to the Ukrainians, to defend against the Russian invasion, whether it's embracing the energy revolution here at home, which is not good for the Russians depending on high energy costs for their own economy, or opposing, you know, very vociferously the Nord Stream 2 pipeline, which is the single most important Russian initiative in Europe and President Trump has consistently blasted the Germans for embracing that project.

So, it's just -- this weird disconnect and it's not going away.

HILL: Not going away. Is it emboldening the Russians? Is there a sense, Joan, from what you're hearing people that you're speaking with that it is actually giving them a little bit more power?

JOAN WALSH, CNN POLITICAL COMMENTATOR: Yes, obviously. And you know, Rich is right about all those policy points. But I guess I would quarrel as to whether we know that the government is doing all that it can do to prevent future Russian meddling. We don't really know that.

And when the president goes up again and again, he's in his bizarre world with his supporters and he rebukes or contradicts his top people. This is the kind of gaslighting and it's creating, continuing to fracture America. So, you have this minority of people, the Trump supporters, who believe in a totally alternative universe. We've got QAnon, we've got the Russians didn't meddle, nothing went on, the Russia hoax. It's dangerous for the president to play it up that divide that way.

HILL: When we look at all of this in terms of, you know, the point that you just made, Joan, we don't know what's really happening. Phil, number one, can this administration effectively combat this threat when it doesn't have the full public support of this president and number two, on the heels of that, can the American people trust that this system will in fact be secure?

PHIL MUDD, FORMER FBI SENIOR INTELLIGENCE ADVISER: Can I challenge this for a moment? We do know what's not happening.

There's not a question, number one, is there a White House spokesman for the American people in advance of the midterm elections who represents the intelligence community and says, to everybody voter in America, when you're on Facebook, this is what to look out for. The CIA director doesn't do that. The president should, he's not.

Number two, who's leading the Congress to have a conversation about how do we tell the Russians this is going to hurt. We're going to sanction you further. We're not doing that.

Number three: Who's leading the Europeans to say we're not the only country being attacked? Can we talk to the Italians, the Germans, the French and British about how when a unified fashion we isolate Vladimir Putin? The president shows up for the G7 and says, why don't we make it the G-8 and can it invite Putin?

We know what's happening here and it's the White House that says we don't want to bring it to Putin. It's not very complicated.

HILL: Is it a simple -- that might be too complicated. Complicated I put in quotes there I think.

But, Rich, at end of the day, this all comes back to the president not wanting to acknowledge this. The president's own concerns that if in some way, he acknowledges it, his win is illegitimate?

LOWRY: Yes. So, look, I think he should just frankly acknowledge it. There's no reason he shouldn't. He should have been denouncing it during the campaign.

But let's be honest, the opposition has dug into the idea that Russian somehow illegitimately gave him the presidency and is looking for the Mueller investigation to somehow leverage him out of the office. He knows that. He resisted. He's also someone who never wants to make any concession against interest and he just doesn't want to give any grounds to that whatsoever.

And it's how he does politics. I don't necessarily like it. It's the way he's done everything for 40 years and he was elected president of the United States. Being this kind of guy.

WALSH: If he had nothing to fear from the Mueller investigation, if there was no collusion there. We know there was interference, but if there was absolutely no collusion, I don't know why he's so hostile to Mueller. If there's an investigation, they can get to the bottom of it. Sometimes people, innocent people welcome that.

(CROSSTALK)

LOWRY: A year-long obsession in the press and every time he turns on the TV or lifts a newspaper, he sees this story. And there's been few presidents who just accept the special counsel investigation and say, oh, this is just fine. Bill Clinton didn't do it.

HILL: Right.

(CROSSTALK)

HILL: We're going to have to leave it there. But it is important to point out, too, this is a president who also brings it up at every opportunity.

WALSH: Right.

HILL: So he doesn't want it to be talked about, perhaps he should.

[16:25:01] Maybe not bring it up every time.

(CROSSTALK)

LOWRY: But he wants to make a political case against an investigation that his opponents he believes are using against him.

HILL: We are going to have to leave it there for now.

There is new information coming out in court about what Paul Manafort might have been doing with his property in Trump Tower.

(COMMERCIAL BREAK)

HILL: We're back with the politics lead.

Prosecutors in the trial of ex-Trump campaign chair Paul Manafort making their case. The 69-year-old is a tax cheat who engineered an elaborate scheme to hide millions in income. The government's star witness, Manafort's long-time business partner and protege, Rick Gates, could take the stand at any moment.