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House Republicans in Chaos?; Donald Trump in Court. Aired 1- 1:30p ET

Aired October 02, 2023 - 13:00   ET

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

[13:01:09]

BORIS SANCHEZ, CNN HOST: Back in court and on the attack, Donald Trump facing the New York judge who already ruled that he's been committing fraud for decades. The legal trouble the former president now faces and the tirade that he had leashed on prosecutors.

JESSICA DEAN, CNN HOST: Plus: disaster averted, at least for about a month. Lawmakers are already battling ahead of another potential shutdown. And House Speaker Kevin McCarthy's fight with fellow Republican Matt Gaetz just got a whole lot uglier.

Also, who is Laphonza Butler? California Governor Gavin Newsom just named her to fill Dianne Feinstein's Senate seat. But other high- profile Democrats are already running to take it from her.

We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

SANCHEZ: Donald Trump back on trial, and, this time, his business empire is on the line.

Opening statements wrapped up in his civil fraud trial in New York. And here you see footage taken earlier inside the courtroom, Trump seated with his defense attorneys, New York Attorney General Letitia James looking over his shoulder, peering at the camera at some points, the judge allowing cameras to roll briefly before opening statements.

And just a few moments before that, outside the courtroom, Trump once again unleashed on the prosecutor and the judge that he was about to face. Watch this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: We have a racist attorney general who is a horror show. So we will go in and we will see our rogue judge and we will listen to this man. This is a disgrace. And you're to go after this attorney general.

(END VIDEO CLIP)

SANCHEZ: Let's take you now live outside the courthouse with CNN's Brynn Gingras.

So, Brynn, walk us through everything we have seen today through the opening statements.

BRYNN GINGRAS, CNN NATIONAL CORRESPONDENT: Yes, listen, it's intense inside that courtroom.

Ad, actually, my colleague, Kara Scannell, she is just get -- beside me. She's just getting ready, because I think you would want to hear mostly from her, because she was inside that courtroom while sort of this was all unfolding.

But we just did wrap up opening statements at this juncture in this trial, and we are taking a lunch break at the moment. But, first, we heard from the state's attorneys, who walked through video depositions essentially showing the Trumps, the former president, also former Trump Organization members sort of deflecting as to who prepared financial documents, saying that they all allegedly conspired to commit persistent fraud for a number of years.

In doing so, banks took on some serious risks. One of the quotes that was said inside the courtroom was: "Well, it may be one thing to exaggerate for 'Forbes' magazine. You cannot do it while conducting business in the state of New York."

The state's attorney wrapping up his opening statements by essentially asking a judge to bar the Trumps from ever doing business in New York. Now, after that, it was Trump's defense who had their turn to give opening statements, essentially saying that the president did -- had a huge business empire, that he made millions, and he all -- did it all by the book, said always complied with regulatory requirements, and that banks, in fact, were actually eager to do business with him.

"In sum," he said, "there was no illegality, there was no fraud and there are no victims."

The A.G. also in that courtroom listening to all of this, actually, we're told Trump didn't even acknowledge her from the several times he left the courtroom and went back in, but in this last moment before leaving the courtroom for this lunch break actually did acknowledge -- there was an acknowledgement between Trump and the attorney general.

And also, we're told Eric Trump went over and shook the attorney general's hand. But I want you to hear from the attorney general what she said before she went into the courtroom earlier this morning.

[13:05:03]

(BEGIN VIDEO CLIP)

LETITIA JAMES, NEW YORK ATTORNEY GENERAL: Donald Trump and the other defendants have committed persistent and repeated fraud. Last week, we proved that in our motion for summary judgment.

Today, we will prove our other claims. My message is simple. No matter how powerful you are, no matter how much money you think you may have, no one is above the law.

(END VIDEO CLIP) GINGRAS: Now, look, like I said, there was a lot of drama in the courtroom.

And so Kara Scannell was in there.

I want to bring you in, and tell us what it was like inside.

KARA SCANNELL, CNN CORRESPONDENT: Yes, Brynn.

Well, as you mentioned, the former president walked into the courtroom today and he didn't acknowledge Letitia James, the attorney general, who was sitting in the front row. He had to walk past her three times. It was only when he was leaving to go out on this lunch break that he did glance over at her.

Now, his son Eric Trump stopped and actually shook the attorney general's hands. And this followed some heated back-and-forth with one of Trump's attorneys, Alina Habba, saying to the judge in her opening statement that this was a witch-hunt, that this was something that Letitia James had campaigned on, and that she could have brought this case even before she conducted this investigation.

Now, the judge stopped Trump's attorney, Habba, and said that in fact this was something that he had already ruled on, that an appeals court agreed with him, that James' campaign, that James' motivation was not an issue in this case, but politics looming large in the courtroom as the opening statements were getting under way.

Now, the other attorneys were also pointing to the credibility of some of the witnesses, and the defense lawyer saying that Letitia James' office is going to rely on Michael Cohen. He, of course, is Trump's former fixture.

James' office has credited him for why they opened this investigation in the first place, because he had testified before Congress that Trump had inflated statements when he needed to and deflated the value of them to gain other benefits.

Now, Cohen is expected to take the stand in this case. A portion of his video testimony was played in court, but Trump's lawyers pushing on this, saying that he is a convicted felon, a serial liar, and someone that they should not believe, that the judge should not believe, because he is the one that is going to make the determination in this case.

Now, they're at lunch for now. It is about-an-hour-and-15-minute break, and then they will resume. At this point, the attorney general's office will call their first witness. That is Donald Bender. He is Trump's longtime accountant.

He's now retired from the accounting firm, Mazars. But he is the person that composed the financial statements for the Trump Organization for most of the decade, most of the decade under scrutiny. He will be the first witness on the stand.

The attorney general's office signaling also in their opening statements that it's not just Michael Cohen who should be relied on, because they say that another Trump Organization executive will be testifying in this case, and this person will say that the Trump Organization, that they were -- they knew, that he was told by Allen Weisselberg, the Trump Organization's chief financial officer, that Donald Trump wanted his net worth high.

And that is the heart of this case, because the attorney general's office is alleging that they inflated the value of these properties, Mar-a-Lago, Trump's apartment at Trump Tower, all to increase his net worth on these financial statements, and it was that net worth at that -- at the high level is what caused the banks to issue these loans, what caused the insurers to give them better rates.

Now, this is where the sparring will really take place as this trial unfolds over the next several weeks, kind of a battle of what did the banks rely on, what statements were they told, and something that Trump's attorneys are really pushing back at.

I mean, they spent some time in their opening statements focused on the value of Mar-a-Lago, which a tax assessment said was $18 million. So, the judge, in a ruling last week, had said that -- he said that they inflated the value of Mar-a-Lago by a lot.

Now, they're saying here that it is worth more than what the adjustment is, and this will be some of the issues at the front of this case when it resumes and we move forward to witness testimony.

SANCHEZ: Yes, a case that has enormous implications for Donald Trump's business empire.

Kara, if we could stay with you for a moment, because I am fascinated by the exchange between the New York attorney general, Letitia James, and Donald Trump, and then Donald Trump's son Eric as well, in part because these proceedings have become so personal.

Can you tell us more detail about what the demeanor was like when they exchanged acknowledgments, when they shook hands?

SCANNELL: Yes, so Boris, when Donald Trump was walking out of court, he -- out of the courtroom, and he passed by Letitia James sitting there at the corner of the front row, he just glanced down at her.

There was no locking of the eyes. It was more of a passing glance. But it was the first time he acknowledged her, because the other three times he had passed by her, he just averted his gaze, was looking straight ahead or down.

Now, Eric Trump, when he was walking out, trailing behind his father and his father's legal team, he stopped, turned to Letitia James, actually reached out with both of his hands to shake her hand, and they exchanged some words. I couldn't overhear it. I was a couple of rows back.

But it was much more of a personal exchange, particularly after they -- the lawyers were sparring about this and the accusations flying over a political campaign and Trump calling her allegations a witch- hunt.

[13:10:07]

So, that was that one brief moment and the first time that we saw any acknowledgment between both camps. So, it looked like the attorney general and Eric Trump had a pleasant exchange. They had kind of shaken hands. It seemed like it was at least some kind of a greeting.

But the former president walked past her just looking, glancing in her direction, but he didn't say -- he didn't exchange any words with the attorney general, and she didn't appear to catch his glance when he walked past that one time -- Boris.

SANCHEZ: Yes, really fascinating details from court.

Kara Scannell, we will let you get back inside before that lunch wraps up in roughly an hour or so. Really appreciate the live mic handoff between Brynn Gingras and Kara Scannell.

Thank you both for that reporting.

Let's bring in CNN's Daniel Dale to fact-check some of the claims that we have heard from the former president today.

And, Daniel, Trump made a lot of claims we have heard before, some of which have already been rejected by this judge. Here's actually one of the first claims that Trump made regarding this lawsuit being part of what he calls coordinated election interference. Let's listen.

(BEGIN VIDEO CLIP)

TRUMP: This trial was railroaded and fast-tracked. This trial could have been brought years ago. But they waited until I was right in the middle of my campaign, the same with other trials and indictments. It's all run by DOJ, which is corrupt, in Washington. Everything goes through them.

(END VIDEO CLIP)

SANCHEZ: Daniel, fact-check that for us.

DANIEL DALE, CNN SENIOR REPORTER: Those comments are thoroughly baseless, Boris.

First of all, the idea that DOJ, the federal Department of Justice, is orchestrating all of this is nonsense. There is not a shred of evidence that DOJ is directing the state attorney general in this state lawsuit. It is a state issue.

The claim about waiting until the middle of Trump's campaign, this trial is the result of a state attorney general lawsuit that was brought in September 2022. Why is the month relevant? Well, Trump launched his campaign in November 2022. So this saga began before he even announced his candidacy for the 2024 election. And the investigation began in 2019, so when he was president the first time or the only time at this point. So, none of that, what you just played, has any basis in fact.

SANCHEZ: Daniel, I want to get into something that we have heard from Trump on the specifics of this case. And that is this disclaimer clause. So much of what's at stake here has to do with how the Trump Organization and its cohorts value properties and square footage and things of that nature.

So let's listen to this claim from the former president.

(BEGIN VIDEO CLIP)

TRUMP: But we have a clause in the contract. It's like a buyer beware clause. It says, when you take a look at the financial statement, don't believe anything you read. This is up front. Don't believe anything you read.

Some people call it a worthless clause, because it makes the statement and anything you read in the statement worthless. It says, go out and do your own research. This is what's called a full disclaimer. We disclaim the financial status, but even with a full disclaimer, which immediately takes you out of any fraud situation and any litigation.

(END VIDEO CLIP)

SANCHEZ: So, Trump is essentially saying that, because there's an addendum to these contracts that says that, hey, these numbers may have been fudged with, he can't get sued.

DALE: He is saying that, except that's not what the financial statement actually says.

So, nothing in those financial statements says that the asset valuations in those statements are supposed to be treated as worthless, the word he keeps using. So what is he even talking about here?

Well, there is disclaimer language in the statements that says Trump and his team used a variety of valuation methods to come up with the asset values they listed, including sometimes estimates from Trump himself, and that these estimates don't necessarily indicate how much you would get from selling the assets, since you could theoretically come up with different values if you use different methodology.

So, OK. But nothing in there says the valuations or the statements themselves are supposed to be completely ignored and treated as valueless, worthless.

And here's what Judge Engoron wrote in his ruling last week. He said -- quote -- "Defendant's reliance on those worthless disclaimers is worthless." And the judge noted the clause does not say what Trump says it does. The judge noted doesn't even use the word worthless nor the words ignore or disregard and that, instead, this disclaimer repeatedly says it's giving -- quote -- "current values." And the judge also wrote -- and I think this is critical -- that -- quote -- "a defendant may not rely on a disclaimer for misrepresentation of facts peculiarly within the defendant's knowledge."

In other words, Boris, the judge is saying, you can't just make things up because you have a disclaimer, let alone a disclaimer as vague as this one.

SANCHEZ: Yes, we want to pose a question about that to a former federal prosecutor.

So, Daniel Dale, please stand by. I get the feeling there are more claims to fact-check coming later today.

Let's bring in former federal prosecutor Renato Mariotti.

Renato, will get to the question of the worthless disclaimer in a moment, but let's start at the top.

[13:15:00]

So, Donald Trump, he's late to court because he's outside deriding the district attorney, criticizing the judge in this case, quite an unorthodox approach.

RENATO MARIOTTI, FORMER FEDERAL PROSECUTOR: That's right.

I mean, it's an approach, though, that has generated our discussion here, right? We're here talking about his attacks, and I think that's exactly why he did it. The reality is, the judge already found that there was fraud here in a summary judgment ruling.

The fact of the matter is that the judge already ruled that those attacks are completely without any weight whatsoever in court. So, I mean, obviously, part of what's going on here is, Ms. Habba's not a very good attorney, and she doesn't -- she also doesn't have good control over her client.

But part of this is a keen strategy by Donald Trump to get us talking about his talking points, as opposed to what's going on inside the courtroom.

SANCHEZ: So, notably, Renato, this is a bench trial, meaning that there is no jury deciding this. It's ultimately the judge who makes a final ruling.

How could Trump's criticism of the judge then work its way into the proceedings?

(LAUGHTER)

MARIOTTI: Well, you don't have to be a lawyer to know that it's not a good idea when you're trying to get the judge to rule on your side to start throwing pot shots at the judge. I mean, that's common sense. So, I think that -- I actually think the

Trump team has already decided internally that they're going to lose this trial. They basically are laying down. I mean, her opening statement, Alina Habba's opening statement was essentially full of talking points for social media or for Trump's base.

It was not designed to try to win this trial. And Trump's statements are designed -- not designed to try to maximize his chances at this trial. I think they know they're going to lose, and they're just purely setting this up for some talking points for his supporters.

SANCHEZ: So, then what are the implications if the judge rules against Trump here? Could we see the end of the Trump Organization as we know it?

MARIOTTI: Certainly -- certainly, a lot of problems for the Trump Organization, and very much could be the end of the Trump Organization as we know it once it gets through the appeals process.

I will say that, typically speaking, any business in this sort of situation -- this would be a bet the company sort of situation where you would have some of our nation's best attorneys, not Ms. Habba, handling this case, and it would be life or death for that company.

I think there's some element of dishonesty that's been priced into dealing with the former president for some period of time. So this may have a delayed reaction for him. But he's getting to the point where the music is getting close to stopping.

And at a certain point, when you're playing musical chairs and the music starts to stop, there begin to be consequences he's getting very close to that time.

SANCHEZ: So, Renato, let's focus on the defenses.

We just heard about that disclaimer, clause attached to these contracts. We have also heard some foreshadowing from the defense, saying that some of the prosecution's witnesses are unreliable. And, previously, we heard from Donald Trump, saying that he hasn't really focused all that much on the details of some of the financial work of his organization since he started his career in politics in 2015.

How do those measure up his potential defenses for him?

MARIOTTI: Well, the clause, the one you were calling the worthless clause, it's not so worthless, in that there's -- that word doesn't appear as Daniel Dale mentioned a moment ago.

But that's a worthless defense. There's nothing to that defense whatsoever. You can't defraud people by lying to them and putting a bunch of falsehoods in a legal document and then having some footnote saying, don't believe anything I said.

That's not how the law works. If you trick somebody out of their money or you try to deceive the banks or anyone else, you're going to be taken a task for that. And, frankly, having a footnote that says, hey, we may have -- we may be lying to you in here, even if that was what it said, which is not what it says, according to Mr. Dale, that would not be a defense.

In fact, that might be evidence of your intent to try to trick the other person. But, separately, I do think Trump's lack of attentiveness and the fact that he's got many businesses, that he isn't focused on this, that is a typical sort of fraud defense.

In other words, I didn't have the intent to defraud because I have got so many other more important things to focus on and I'm not really focused on the details of these documents. That's more typical. There's something to that, but I really think that Trump has got an uphill battle here in this trial, given the judge, given the lawyers he's chosen and given the tack that he's taking in this case.

SANCHEZ: Renato Mariotti, we very much appreciate your perspective. Thanks.

MARIOTTI: Thank you.

SANCHEZ: Of course -- Jessica.

DEAN: Boris, you guys just broke down and examined the legal ramifications here.

[13:20:01]

But, of course, there's the political ramifications as well, and former President Trump wasting no time this morning turning today's legal proceeding into a campaign event.

CNN national correspondent Kristen Holmes is live outside Trump Tower in New York.

Kristen, the Trump campaign has had success capitalizing on these legal troubles, at least while he's currently running in this Republican primary.

What more can you tell us about their strategy on this?

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Yes, just one of the things that we have seen them do time and time again is really conflate the legal and the political.

He is running on these trials, on these legal issues, saying that this is all election interference, that this is the Democrats who are out to get him, that the only reason he is being charged and indicted four times is because Democrats don't want him running against Joe Biden.

But what we saw today was a little bit different. They essentially turned this trial into a campaign event. Moments after Donald Trump left Trump Tower, they blasted out a statement on Letitia James, essentially the same way they would on a political opponent. They went, again, standing up to the mics there, attacking her once she got there, and really knowing where all the cameras were. Donald Trump, if you look at that statement that he gave when he

entered the courthouse, he didn't just start speaking. He waited for the cameras to be on him. He waited for essentially any newscast to realize he was there, pausing, and then getting his statement out.

This is a man who knows optics and knows visuals, and he gave us a little bit of insight here into what the next several months is likely to look like. I have been talking to these Trump advisers over and over again about how are you going to navigate a 2024 presidential campaign and multiple looming trial dates?

Well, it appears that this is at least one way that they have decided to do so by making these dates essentially into campaign events. Now, Trump himself using the same rhetoric we have heard time and time again on all of his legal battles he is facing. Take a listen.

(BEGIN VIDEO CLIP)

TRUMP: What we have here is an attempt hurt me in an election. People are getting it. I can tell you the voter is getting it, because every time they give me a fake indictment, I go up in the polls.

(END VIDEO CLIP)

HOLMES: Now, one thing to note, Jess, is that, yes, he does.

But we are still in primary season. And while we know that this is clearly working with his base and with Republicans, this kind of putting this out there as legal challenges or political challenges, it is very unclear how this will look in a general election and whether or not this will sway the votes -- the voters in the middle there, the voters he would need to actually win in a general election.

DEAN: Those key independent voters.

Kristen Holmes for us live outside Trump Tower in New York, thanks so much.

And CNN chief national affairs correspondent Jeff Zeleny joining me now back here in Washington, D.C.

Jeff, we heard Kristen talking about how the former president always mentions that he goes up in polls with every indictment. Is there a situation in which this particular case, considering that it is focused on his reputation as a businessman, which he talks about a lot, moves the needle with these primary voters?

Or is the cake kind of baked here?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: I mean, if past his prologue, the cake is baked in this.

But I do think this gets to the very heart of his identity, who he is. It will bother him. And it will agitate him, without question here. But I think this is a reminder. We will see if he comes back after lunch. He told reporters a short time ago he probably will. This is going to go on until December. He certainly won't be there

every day, but, look, he is there for a reason. He wants the cameras in New York to focus all the attention of the campaign on him. His rivals -- I heard from two of his Republican rivals this morning who were exasperated this morning that once again the focus is on him.

And they were hoping that they would have a little bit more time and breathing room between now and those Iowa caucuses on January 15 to get their own messages across. But what this is a reminder of is that each one of these cases is different.

This is not the criminal case. He called this a witch-hunt. That's kind of his umbrella term for this, but all of these cases are different. And you have been out on the campaign trail as much as I have talking to voters. And there are voters who wonder.

That Georgia case sounds complicated and problematic. And then there's the U.S. attorney's case here in Washington, this case. It's confusing to people.

DEAN: It is.

ZELENY: But I think this adding up, in the short term, it might be good for him because it consumes oxygen. In the long term, it's not.

DEAN: Right.

And, look, people do get confused by all of these indictments. But you're right. The spotlight is certainly on him time and time again.

ZELENY: For sure.

DEAN: All right, Jeff Zeleny, thanks so much.

ZELENY: You bet.

DEAN: Still ahead this afternoon: After a dramatic showdown with Republican hard-liners to avert a government shutdown, House Speaker Kevin McCarthy is now fighting to keep his job. As for what comes next, his rival Matt Gaetz says, stay tuned.

We're following the latest.

(COMMERCIAL BREAK)

[13:28:47]

SANCHEZ: Republican Congressman Matt Gaetz is not moving forward with his effort to remove Kevin McCarthy from his speakership, at least for now.

Gaetz spoke last hour on the House floor, railing against McCarthy and threatening a move to oust the speaker could still happen today or this week. This all comes after McCarthy struck a last-minute deal with Democrats that prevented a government shutdown.

CNN's Melanie Zanona caught up with Gaetz -- rather, CNN's Manu Raju caught up with Gaetz just moments ago. Here's what he had to say.

(BEGIN VIDEO CLIP)

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: If you lose this vote, will you continue to do this? And are you worried about throwing this institution into chaos, paralyzing an institution that your party runs?

REP. MATT GAETZ (R-FL): You know what I think paralyzes us? Continuing to govern by continuing resolution and omnibus.

You know what I think throws this institution into chaos? Marching us toward the dollar not being the global reserve currency anymore. You talk about chaos as if it's me forcing a few votes and filing a few motions. Real chaos is when the American people have to go through the austerity that is coming if we continue to have $2 trillion annual deficits.

You don't know chaos until you have seen where this Congress and this uniparty is bringing us.

(END VIDEO CLIP)

SANCHEZ: Now let's get to CNN's Melanie Zanona, who is live for us on Capitol Hill.

So, Melanie, how is Kevin McCarthy responding to all of this?

MELANIE ZANONA, CNN CAPITOL HILL REPORTER: Well, Kevin McCarthy is ready for this showdown.