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As $250M Civil Fraud Trial Gets Underway, Trump Appears in Court; Interview with Federal and White Collar Criminal Defense Attorney and Columbia Law School Lecturer In Law Caroline Polisi. Aired 10:30-11a ET

Aired October 02, 2023 - 10:30   ET

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

[10:30:00]

ELIE HONIG, CNN SENIOR LEGAL ANALYST: So, opening statements are, obviously, a crucial part of a trial. A little bit different here. No jury, right? And so, when you're making an opening statement to a judge, I think you want to pair (ph) it way back. I think you need to cut back on the theatrics. You're not trying to win over the hearts of civilians here. We're talking an expert.

The other thing that's important --

KATE BOLDUAN, CNN NEWS CENTRAL CO-ANCHOR: You know, you can go really technical in this, right?

HONIG: Yes.

BOLDUAN: Like, yes.

HONIG: I mean, I think they should. I mean, with the jury, you're explaining it to -- I always say -- I used to say when I was trying cases, imagine I'm explaining it to my mom's friends, right? Like, smart people who are interested, but don't know the first thing about this particular case. But the judge -- I mean, the judge wrote this 45-page ruling.

BOLDUAN: Yes.

HONIG: He knows this case inside and out. So, I think I would be looking to give a very concise to the point, maybe even technical opening argument. The other thing to note -- I just misspoke, opening arguments --

SARA SIDNER, CNN NEWS CENTRAL CO-ANCHOR: Yes.

HONIG: -- is a misnomer. Anyone who says opening argument is wrong.

SIDNER: Opening statement.

HONIG: Opening statement, because what differentiates an opening from a closing is you're not allowed to argue in opening. You are allowed to undo argue in closing.

BOLDUAN: We will not hold that against you. HONIG: Thank you.

JOHN BERMAN, CNN NEWS CENTRAL CO-ANCHOR: You know what, I wanted to pick up -- I want to, sort of, talk about -- well, we were talking about and skip ahead a little bit as we're looking at this taped footage now of inside of the courtroom. This is what it looks like inside the courtroom. The judge clearly allowed this video spray so we could see what the scene is there. You could see Donald Trump sitting next to his lead attorney, Christopher Kise. And we do know that opening --

CROWD: Statements.

HONIG: I'm not on this, thank you.

BERMAN: -- statements are being made right now for a lawyer (ph) -- for the attorney general. Caroline, I want to ask you this, because you said you would not allow Donald Trump to testify. If he did -- if he is called you would have him take the fifth. I want to go back to the notion we were taking about with Sarah Matthews, that there is this kryptonite for Donald Trump where when you talk about his -- not just the worth but his businesses.

BOLDUAN: Especially in Mar-a-Lago again.

BERMAN: He can't let it slide. So, if you are with the attorney general's office, and you know that you have a guy on the witness stand who can't let something like that slide. For whom, if you poke it, you know, he will --

SIDNER: Respond.

BERMAN: -- he will respond. How can you exploit that?

CAROLINE POLISI, FEDERAL AND WHITE COLLAR CRIMINAL DEFENSE ATTORNEY AND LECTURER IN LAW, COLUMBIA LAW SCHOOL: Yes, well, first of all to clarify, I wouldn't -- you know, I can't -- if he's my client, I can't prohibit him from taking the stand. Ultimately, it's the client's decision. And, you know, I think if anybody is going to go against the advice of their attorney, it could Donald Trump.

SIDNER: He's done it many times.

POLISI: You know, a rule of thumb when you're calling a witness, a contentious witness, an adverse witness, you kind of want to know, you want to keep them on track. You want to know what their answers are going to be. Usually, you do it in a narrative way to elicit one-word answers. You want to make sur that, you know, you're on the path that they're on the path.

Donald Trump is, you know, that goes out the window. If you call Donald Trump, you have to be really ready for anything. You're not going to know what -- his answers -- I mean, if you read the deposition, they're complete non sequiturs. He doesn't even answer the questions. Now, a judge can try to rein that in and, you know, instruct the witness to only answer the question. But my personal opinion is, I wouldn't call him. You know, it's just not worth it to get that, sort of, a diatribe out there on the stand but we'll see what happens.

BOLDUAN: We know that this is happening today. This will now continue. And it will be going until December 22nd, is what we believe. Let me bring Paula Reid in on this one.

Paula, a big -- Paula Reid stepped away, so let's keep it at the table. We -- I wonder, this is not obviously the only thing he's facing. He's got four criminal indictments that are stacking up, and we will continue the talk about the calendar. We know this continues through December 22nd. How does that, will that, could that impact as they're setting up for the rest of the legal trials that he's going to be facing?

HONIG: I've never seen a calendar quite like this for anyone individual. In just to, sort of, set the stage here, we have this trial potentially going through December. We have the four different criminal cases right now. And they are all scheduled to begin some point between March and May of next year of 2024. Now, that obviously cannot happen because he has to physically be present at these. So, there can only be one criminal trial at a time.

And on top of all of that, again, linking the legal with the political, this is all going to be playing out during the heart of the Republican primary and maybe even to the general election. These trials, if they go as scheduled, now, if we start the trial -- the Mar-a-Lago trial, for example, about classified documents, it's supposed to start in May of 2024. I mean, if that goes through June and July of 2024, you all know, you all have covered, what's happening the summer before a presidential election, right?

BERMAN: The conventions and whatnot.

HONIG: Yes. So, they're going to have to work this out. These judges and the parties are going to have to work out which criminal cases go when, which goes first. Huge stakes on that.

BERMAN: You know what, joining us now is Jeff Zeleny. Let's talk about the politics here.

Any and all aspects of it, Jeff Zeleny, because again, what we saw is Donald Trump make a political statement when we went into that courtroom. The Trump campaign has clearly chosen to lean in to these court cases as part of the campaign. I do wonder to Elie's point, I mean this maybe an advantage for him in a primary, but I do wonder if this continue throughout the summer if it's as advantageous to them in their minds in a general election situation.

[10:35:00]

JEFF ZELENY, CNN CHIEF U.S. NATIONAL AFFAIRS CORRESPONDENT: I mean, there is no question, it's not advantageous in the general election. But first and foremost, the reason this is as big of an advantage, at least in the eyes of the Trump campaign right now, is because we are talking about Donald Trump. Once again, the former president is consuming all of the airwaves, not just this network but on several others, and it is squeezing out the oxygen for any of his rivals to make their case on policy, to make their case on electability. To talk about the economy, about Bidenomics, you name it.

So, this is how he wins in a short term. And really what we're seeing is a strategy. He was in Iowa campaigning yesterday. He's going back to Iowa weekend. So, what we are seeing as a travel strategy is, he's campaigning on the weekdays -- on the weekends, and he's going to be in the courtroom and at these venues during the week. And he consumes all of the oxygen, really, 24/7.

But in the short term, this may work. But there are still questions among Republican officials, party activist leaders, these voters who are paying attention to this race in Iowa, New Hampshire, South Carolina, the states that open the voting next year, what if he is convicted in these cases? Do they then have a bruise nominee? So, those of course are the questions that are going to unfold.

But just to give you one sense of how the Trump campaign is trying to take advantage of this, moments before he walked into the courtroom, the campaign sent out a fundraising appeal saying, now is the time to order your "Never Surrender" coffee mug, that had his mug shot from Fulton County Jail in Georgia. It has nothing to do with this case, of course. But this is just one more stop on the campaign trail for him. But at some point, you have to wonder if what happens inside the courtroom is going to become much more of a burden on his political strategy? As of now though, it is certainly helping him in the short term at least.

BOLDUAN: Let's get back to Paula Reid. She's joining us as well.

And, Paula, one thing that I note, you're -- one question I've continued to have is, kind of, how it all fits together, not only the calendar, but all of the -- we have talked many times how one case, and what is said in one courtroom impacts all of the other legal troubles that he is facing. And you all -- you have new reporting already on the -- on one of the other -- one of his indictments coming out of Fulton County, Georgia. There -- you also have some new reporting coming fresh out of there on what his -- what he could be up against.

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: That's right, Kate. I can tell you, look, the court calendar, it just -- it doesn't work, particularly before the election. It is likely that there may only be one criminal trial that is able to go before the election next November, that is most likely at this point to be the Washington, D.C., trial about January 6th. But the other cases continue, for example, down in Georgia, Fulton County where the former president was indicted alongside many other people, only two of the defendants will go to trial later in the month.

And we have learned that one of Trump's allies, Bernie Kerik, the Former New York Police Commissioner, he has been subpoenaed by the Fulton County District Attorney's Office to testify ostensibly in that trial later this month. Now, his lawyer, Tim Parlatore, who was also previously represented Former President Trump in his criminal cases, he tells us that he will not allow his client to testify unless he is granted immunity, because Bernie Kerik, he is an unindicted co- conspirator in that case. He is not named. But CNN, through our reporting, we have identified him as co-conspirator number 5.

And this shows that prosecutors, you know, while Trump is in this courtroom in New York, they're trying to secure key witnesses who can help them reveal to a jury key details about what Trump allies were up to in and around the election. But they are also up against some challenges because they have indicted so many people and named so many people as co-conspirators, those people are likely to be reluctant to testify and to cooperate unless they are granted assurances like immunity. It is hard to imagine any defense attorney who would put their client on the stand if they were one of the unindicted co- conspirators to testify, to say anything other than, I'd like to invoke my 5th Amendment right unless they get assurances in writing.

So, we have obtained a letter that Kerik's lawyer sent to the district attorney earlier today. And in this letter, Tim Parlatore suggest that the district attorney told him, look, don't worry, if we wanted to indict Kerik, we would, but they wouldn't put that in writing. Now, the district attorney's office has not gotten back to us about this new reporting, but it's just a reminder that while Trump is in this courtroom with some of his lawyers who work on some of the other cases, all of these other criminal investigations and criminal cases, they continue. And his legal exposure continues to expand.

SIDNER: There is so much there. And just I wanted mention again, these are -- this is from a few minutes ago where cameras were allowed just for a few minutes in the court to show you the court.

[10:40:00]

The judge did end up ruling that there will be no cameras in the court for the rest of this trial. So, that's where we are right now. But the reason why you're seeing this is because somehow, it appears he allowed the cameras to take a few pictures -- some videos before, and then they were promptly told to leave. And so, the rest of this case will be done with our reporters who are in the case who will be telling us the details, but you will not be seeing it like you are seeing it right now.

All right. I want to go to John Miller. John Miller is here with us. You've been looking at security, but you've also -- you also have some sense -- I mean, how did we get to this point where Letitia James, the A.G., brought this case. A case that has been or questions about Donald Trump's worth have been swirling for years but it came forward now.

JOHN MILLER, CNN CHIEF LAW ENFORCEMENT AND INTELLIGENCE ANALYST: You know, Sara, it is a long road to this courtroom. If Donald Trump were to walk out the front door of the building he is in now and look across the street, he would be facing the Jacob K. Javits Federal Building, named for the famed New York senator, Senators Javits, who before he was senator was the New York State attorney general, the job that Letitia James is in now. In 1956, he got this fraud law passed that gave the attorney general and other prosecutors broad authority to investigate companies that were involved in repeated fraud and illegal acts. Now, the Trump defense going into this case was always -- well, statements about financial things that we can argue about, but all the loans got paid and there are no victims here. And Letitia James countered with the idea that there don't have to be victims for repeated fraud and illegal acts. The law doesn't require that.

But how did we get to here? First, it went to federal prosecutors in the southern district of New York, two doors down from this courthouse. They looked at it for many months, maybe even a year, and then passed on the case. While they were doing that, the Manhattan District Attorney, Cyrus Vance, was holding back on his investigation not to interfere with theirs. But once they passed on it, he took on the case and brought in a special prosecutor, a special assistant district attorney from the legal firm Paul, Weiss, Mark Pomerantz was his name. An expert in financial frauds, an expert in the prosecution of financial frauds, but also the defense of financial frauds.

And he spent more than a year gathering these financial documents and running up against walls. Twice they went to the Supreme Court of the United States arguing to get, not just Donald Trump's taxes which was an uphill battle, but also the underlying business documents that underpinned the claims he made in his taxes, and twice they prevailed.

The Manhattan district attorney had those records, and then something happened. Cyrus Vance left the D.A.'s office, Alvin Bragg was the new D.A., Pomerantz presented the case to him. And Bragg's people thought it was enormously complicated. It would be very hard for a jury to understand. It involved a lot of nuances in the law, and that they could look at something simpler as they were being criticized for walking away from the case, and they picked the Stormy Daniels hush money case which is a -- kind of, a one allegation, one thing to prove, one-dimensional case which they indicted Donald Trump on.

In the background of the D.A.'s case, Letitia James, the state attorney general was doing the civil version of it. But she always had two assistant attorney generals at the D.A.'s office working in parallel. And they were able to take a lot of these records and a lot of what was gathered in that case, and fold it into the civil case. So, we didn't get here over night. This has been going on since 2018, 2019, through today, and that is how we ended up in this courtroom.

BOLDUAN: But still a huge day it is. Donald Trump on trial. Donald Trump's business empire is on trial and they -- he is now in court. You see video from moments ago, facing a judge that he has been attacking even just feet away from the judge before he went into the courthouse all over allegations, accusations of decades-long fraud by Donald Trump and his business empire. We have new details coming from inside of the courtroom, we'll bring those to you after this.

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[10:45:00] BERMAN: -- control over his businesses, he will lose, and there are some other counts being determined as well. Donald Trump spoke at length before going into the courtroom there. In the courtroom right now, we are hearing opening statements from the State of New York right now in this case. You were looking at the photos of Donald Trump walking in. It has begun. We are getting some details about what is happening at this moment. These are picture, I should note from before the opening statements began, video that was allowed to be taken. Now, camera not allowed to see what's going on, but we are getting special insides details from the courtroom.

Let's get right down to the courthouse. Brynn Gingras standing outside. Brynn, bring us up to speed.

BRYNN GINGRAS, CNN NATIONAL CORRESPONDENT: Yes, listen, it is a showdown there in the courtroom as they're listening to these opening statements. Letitia James is in there, Trump's in there, one of his oldest sons is in there, the judge of course.

[10:50:00]

So, right now, opening statements are happening where the state's attorney, Kevin Wallace, is laying out what is going to be expected in this trial. And essentially, he is showing video depositions of the Trump's sons, and Allen Weisselberg, the former CFO of the Trump Organization. And their depositions, essentially, saying, who was in charge of making these valuations of properties?

And remember, at the heart of this case, the judge has already decided some of it that the sons and Trump are liable for over evaluating some of these properties, sometimes multiple times over in order to get business loans. So, that's something that this judge has already ruled on, but again, this case is still being laid out as to exactly what is going to be considered as far as damages are concerned in that part of the trial.

So, we know that Trump is there with his attorneys at the -- at that side of the table. And he's actually talking to his attorneys as this case is, sort of, being played out in opening statements. So, it is, again, interesting inside that courtroom as all this people are there, sort of, witnessing exactly how this case is going to be laid out. The judge saying it could go all of the way until December, though it's unexpected how long it will take.

Of course, this is going to be a very dense trial when we're talking about financial statements, but at the heart of it is who is in charge of preparing these financial statements. Trump saying that he had little, if any, in his video of the deposition that he did earlier this year, guys. So, we'll continue to follow these opening statements as they are playing out in real-time right now with our colleagues in the courtroom.

SIDNER: Brynn Gingras, thank you so much. And again, we're looking at some pictures from inside the courtroom where the judge has ruled there will be no cameras for the rest of this case. All right. Let me just talk to you, Elie, first about -- just recapping where we are. The judge initially took a sledgehammer to Donald Trump's arguments in the case, ruling that Trump and his three adult children, his three sons, were guilty of persistent and repeated fraud. And I just want to show you what he said because it was such a strong statement. He said that, all of their arguments were exacerbating defendants' obstreperous conduct and their continued reliance on bogus arguments in paper and oral argument. And at the end, he says, look, this is a fantasy world, not the real world.

BERMAN: A lot of choice words there.

SIDNER: I mean, he went hard. What is left after hearing that?

HONIG: Yes. So, that ruling last week was a big win for the state attorney general, a big loss for Donald Trump. There are seven allegation s here, seven counts, and this is count one. It has already been ruled on, it's what we call summary judgment, meaning the judge has said, I'm ruling on this before the trial even happens. Ordinarily it would be before the jury can even rule on it, here, we don't have a jury. The judge is going to make the ultimate ruling.

But yes, this is not just sort of a run of the mill ruling by the judge. He got out the Thesaurus for some of these words. I mean, he was very aggressive in the way he characterized this. So, the A.G.'s office are -- no matter what happens, even if the rest of this trial goes backwards for them, they've already won on count one. They already will be seeking damages on count one.

Now, what's left to be decided over the course of this trial which could take months? First of all, there are six other counts relating to falsification of business records, relating to potential insurance fraud, relating to conspiracy to do both of those things, and relating to falsification of financial statements. So, there are six other counts here. They're similar. They relate to the same transactions, but they're harder for the A.G. to show. They're going to have to show a more specific level of Donald Trump's knowledge and intent.

The second big thing that will be resolved here is the damages. How much money is Donald Trump and his business is going to have to give up? And will they lose their business certificate moving forward?

BOLDUAN: Caroline, we are learning some additional color from inside the courtroom from Aaron Herb and -- sorry, Aaron Cooper and Jeremy Herb. And the judge is essentially saying that as things proceed, the less he says, the better. He says that he expects to just have to say, let's take a 10-minute break, sustained, and overruled while the trial is ongoing, he said. What does that set up for here?

POLISI: It's great. It means no sidebars, right? No, sort of, back and forth between the attorneys with what, sort of, evidence is -- will be allowed or what isn't allowed. As we noted before, opening arguments can be really streamlined. This judge has been sitting with this evidence, with this case for many months now.

BOLDUAN: Yes. POLISI: I think one of the big questions that we still don't know the answer to is just how, in terms of, the damages aspect, just how it will affect Donald Trump's businesses, sort of, dealings in New York. I've been feeling questions from reporters, sort of, asking me what exactly is going to happen, it's still unclear. You know, Elie made reference to the ruling in which the judge ordered as part of that summary judgment that the business certificates be canceled.

[10:55:00]

BOLDUAN: Well -- and also, guys, that's part of Donald Trump's legal team's defense going into this is that no one's been damaged. No one's been hurt. No one -- the -- you know, the way they're putting it, no one's been harmed by anything that he put in these financial statements and everyone was essentially made whole, you know.

POLISI: Right. Two responses to that. First of all, it -- just because on the counts that are left to be tried --

BOLDUAN: Yes.

POLISI: -- just because the banks were left whole, it doesn't work like that. It maybe, sort of, a logical argument you have but as the law doesn't -- it doesn't require showing that they were -- you know, it doesn't make you not liable for those.

BOLDUAN: Yes, it doesn't --

POLISI: Yes.

BOLDUAN: -- not clear (ph) easily.

POLISI: And then second, the ruling on the summary judgment actually didn't require a showing that there was a victim. And so, that's part of, sort of, a statutory landscape which made the decision that much easier for the judge to move forward on.

HONIG: If I can just pick up on that. If people are looking at all this and wondering, why is this just a civil case where we've seen much lower numbers, dollar amounts charged as a criminal case on the hush money payment? I think case -- I'm trying to read into the prosecutor's heads here, but I think that could be a big reason. Because it's hard to stand in front of a jury and say, well, they committed this fraud on paper but the banks all got repaid. The banks made money.

They got their interest payments. It doesn't rule out, as Caroline correctly said, you still can be liable civilly. And it also doesn't actually technically rule out a criminal case, but I do think it makes a criminal case less appealing for prosecutors.

BOLDUAN: Interesting.

SIDNER: All right. We're going to button this up. Thank you to Caroline. Thank you, Elie. I know you're not going anywhere, but I just wanted to thank you because we're coming at the end of the hour. And we are still following Donald Trump's case where the A.G. is asking for $250 million in a civil fraud trial brought this past year. And now, we are seeing the end of this case that is supposed to go on until December. There are several things still left to be decided, but the judge has already ruled on a huge portion of this case against Donald Trump and his sons. We will be right back.

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