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Donald Trump's Civil Fraud Trial Begins; Prosecutor Urges Judge To Bar Trump From Doing Business In NY; Gaetz Threatens To Oust McCarthy As House Speaker. Aired 3-3:30 ET

Aired October 02, 2023 - 15:00   ET

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

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[15:01:06]

BORIS SANCHEZ, CNN HOST: Donald Trump on trial and on the attack. The first day of the civil fraud case against the former president now underway. We're following the latest from the courthouse.

JESSICA DEAN, CNN CONGRESSIONAL CORRESPONDENT: A government shutdown is averted for now, but House Speaker Kevin McCarthy could lose his job over it. We're live on the Hill.

And sending a message of support and unity. EU leaders rallying in Kyiv just days after U.S. lawmakers blocked aid for Ukraine.

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

SANCHEZ: Facing a case that could destroy his business, Donald Trump is in court right now on day one of his civil fraud trial in New York City. Those proceedings could be an uphill battle for the former president, because already last week, the judge found Trump liable for fraud, a ruling that could be destabilizing to say the least for the Trump Organization.

DEAN: Right. So Trump has gone on the offensive today, ramping up his smear campaign against the judge and prosecutors just a few steps from where he's sitting for trial.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

DEAN: CNN's Brynn Gingras is outside the courthouse. Also with us this afternoon is CNN Chief Law Enforcement and Intelligence Analyst, John Miller and CNN Legal Analyst, Jennifer Rodgers. Great to have all of you.

Brynn, let's start first with you. We've heard some well-worn Trump rhetoric outside the court, going back to his playbook that we've heard from again and again. But how are things shaping up inside that courtroom?

BRYNN GINGRAS, CNN NATIONAL CORRESPONDENT: Yes, Jessica. I mean, pretty much any time there's a break, he comes out and talks to the cameras, very much political moves by the former president. I'm getting real time updates from my colleagues inside the courtroom, Lauren del Valle, Aaron Cooper and Kara Scannell.

And they say right now the first witness is on the stand, that's Donald Bender. He was the former accountant for Trump and Trump Org. And right now I'm being told he's testifying to the fact that he says he compiled financial statements for the Trumps and Trump's Orgs, but he didn't really do the analytics of it.

So that speaks a little bit to maybe how his testimony is going to proceed from here on. But before that was opening statements and, of course, that's the crux of any case. And so let me get to that.

In the state's attorney's opening statements, he essentially said that the Trumps, Donald Trump, his sons, Trump Organization, they all conspired for years to fraudulently inflate their assets in order to get business loans and better interest rates. And saying this, quote, "While it may be one thing to exaggerate for Forbes magazine, you cannot do it while conducting business in the state of New York."

Before summing up their statements, they asked the judge to bar them from ever doing business in New York again. They talked about a number of witnesses that are going to take the stand for their case, one of them being Trump's former fixer, Michael Cohen. And if you remember, the whole reason this case even started was because of Michael Cohen's testimony in front of Congress, where he says the Trumps did inflate their assets.

After that, of course, we heard from the defense team, the defense saying that Trump built this huge empire and it was all done by the book, that there was never any - he compiled everything that was in - it was all regulatory. It was again, all by the book and saying this, "In sum, there was no illegality, there was no fraud, there are no victims." In fact, they say that there were banks that were wanting, eager to do business with the Trumps.

Now, Trump is very eager to actually get on the stand in this trial. We don't expect that today, but he is a witness for both the state and the defense.

[15:05:02]

And at some time soon, we do expect him to take the stand, guys. This is a trial that's going to last nearly three months, so we're going to stay there and bring you the very latest, guys.

SANCHEZ: Yes. Yes. One of 28 potential witnesses that Letitia James, the AG, has said she could call. Brynn, please stand by. John Miller, this is obviously not a normal day in court. You have a defendant that is late because he's outside making defamatory remarks about the AG and the judge that's ultimately deciding the case. How big of that do you think was the reason the judge ruled against having cameras allowed inside for the proceedings?

JOHN MILLER, CNN CHIEF LAW ENFORCEMENT AND INTELLIGENCE ANALYST: Well, I don't know if one thing had anything to do with the other. Boris, the thing you've got to separate this case from is Donald Trump did not have to attend this. It's a civil proceeding. He could have been represented there by his lawyers and that makes it different from his arraignment in Miami, different from his arraignment in criminal court, in the hush money case in New York, different from his arraignment in Washington, D.C. on the election fraud, the federal case or in Georgia election fraud, the state case.

This time he came there for two reasons, one, to make his appearance in court and be seen at the table where his business empire, not his personal freedom, hangs in the balance, but also to make that statement in the hallway. The judge not allowing cameras in the courtroom, which he could have done under New York state law to shoot the opening statements of the prosecution and the opening statements of the defense, actually leaves us in the position of really having to kind of go through our crib notes from the people in the courtroom and Donald Trump's statements in the hallway and Letitia James' statements on the steps.

I don't understand why we're still operating in the Stone Age when we could have cameras in that courtroom. The only difference is compelled witness testimony. The judge would have to leave it up to the witness as to whether they wanted to allow their testimony to be televised, but the rest of it we could have seen today and we should have.

DEAN: And, John, I want to ask you, because we heard the former president say in some of his remarks, there have been a lot of remarks from him today that people should go after the attorney general. And we know that when he makes these kinds of statements, when President Trump makes these kinds of statements, that often those people do become targets, really, of more threats. Do you think that the security apparatus can keep up? And is there a point where a judge steps in on something like that?

MILLER: Well, if the judge steps in here, it will be no less than I think the third time Donald Trump has been personally admonished by a judge to keep his statements within the keeping of the local rules of what statements are appropriate during a court proceeding or about a court proceeding. In this case, you know, go after the attorney general. Donald Trump knows exactly what those words mean. He knows exactly how some of his supporters will take that. I think it's a very dangerous statement to make.

But I'll say this, security was tight at the courthouse today and Letitia James, the former New York City public advocate, has had a New York City Police Department security detail for her time in city government. She has had a very competent security detail made up of people that I know, as she's been attorney general and she's used to threats. She'll take that in stride. But certainly the statement is provocative and it wasn't accidental.

DEAN: Right. Now, there's no doubt about that. All right, John, stand by for us.

I want to go to Jennifer Rodgers now.

And Jennifer, since the judge has already found Trump liable for fraud, is it possible the damage to the Trump Organization is already done? Help explain what's at stake in this trial.

JENNIFER RODGERS, CNN LEGAL ANALYST: Well, certainly a lot of the damage is done. I mean, the judge now during this proceeding is going to determine the fine amount. And as you said, a lot of these issues are already resolved. But there are additional counts that were brought in the complaint that Tish James and her team brought and some of those require intention, require that this fraud was intentional and that could lead to even higher fine amounts.

And the disillusion of these businesses altogether, including a ruling that Tish James is seeking that the Trumps, Donald Trump and his two sons, not be allowed to do business in New York state again at all, ever. So there's still a good amount on the table, even though the summary judgment did take care of really the core issue here.

SANCHEZ: And Jennifer, because we are anticipating an appeal from the former president, how does the fact that this wasn't a jury's finding, but rather a decision from the bench way into that appeals process?

RODGERS: It doesn't make any difference as far as the trial. So the judge will make the credibility findings that a jury would and ultimately decide as the fact finder. That's exactly the same in terms of the appellate review, whether it's a judge or a jury.

[15:10:01]

There are different standards for summary judgment because summary judgment relies on undisputed facts and a legal judgment, so that's in a little bit of a separate bucket that the appellate court will use different standards to apply to that piece of it. But as far as the trial goes, there's no difference at all, which kind of, begs the question of why team Trump didn't try harder to get a jury trial here, which could have only benefited them.

It's unclear whether they would have been entitled to it, but apparently they didn't even seek it, which is kind of a bit of a puzzle.

SANCHEZ: I also wanted to get your read, Jennifer, on something that we heard from the defense team that in the Trump Organization's dealings, there were no victims, there were no, I believe the phrasing that was used was that there were no untoward profits or something to that effect. What do you make of that?

RODGERS: Well, there certainly were untoward profits. When you think about a fine amount or damages, one way to assess that is loss to the victims. Another way is ill-gotten gains to the defendant. So if they fraudulently said, our properties are with this amount and the banks then gave them a better interest rate than they would have gotten had they not defrauded the banks, those ill-gotten gains in the form of the better rate and the money they saved is something that should be disgorged.

But I think they're using it as a rhetorical point saying, listen, kind of what's the harm here, nobody lost money. Even if the values weren't exactly what they should have been, no big deal. So it's not really as much of an actual legal point as it is something that would appeal, again, more to a jury, frankly, potentially, than to the judge who's going to follow the letter of the law.

SANCHEZ: Ill-gotten gains has a better sounding ...

DEAN: Ill-gotten gains ...

SANCHEZ: ... phrase than untoward profits. I'm not sure where that came from, I was trying to paraphrase that.

DEAN: You got close.

SANCHEZ: Close enough.

DEAN: Yes.

SANCHEZ: Jennifer, John, Brynn, thank you all so much.

So former president, Donald Trump, is using his time at trial today to get in front of the cameras. As we've seen multiple times, his team readily admits they're trying to turn these proceedings into a campaign event.

DEAN: Right. It's just not a surprise that this is what they're doing.

SANCHEZ: Yes.

DEAN: CNN's Kristen Holmes is outside Trump Tower in New York. And Kristen, we just want to remind everyone that the former president did not have to appear in person today. He certainly did and he's there and he's talking and he's talking a lot, and he's in front of the cameras. What more can you tell us about the strategy?

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Yes, Jessica and Boris, he did not have to go. And not only is he talking to the cameras a lot, it's being aired on a lot of news networks. And that is something that is not going unnoticed with his team.

Now, this is something I have been asking Trump advisers for months. How are you going to navigate a 2024 presidential campaign with all of these looming trial dates and lengthy trials? And clearly today, we saw at least one of the ways that they are going to navigate that and that is by turning these trials into essentially campaign events.

Just to break down what happened today, as soon as Trump was leaving Trump Tower, they knew that there were cameras everywhere. They blasted out an email attacking Letitia James like you would a political opponent.

Once he was downtown, he walked into the courthouse. He waited for the cameras. He waited near them and knew where they were. He gave everyone an opportunity to roll on him, essentially and then he started making his remarks. His team was aware of how many press seats were in the courtroom. They were very aware that the judge was going to rule on whether or not they were going to allow cameras in both the courtroom and in the hallway.

These are things that they monitor closely because they are all about optics. And Donald Trump likes to play this out in the court of public opinion. You could tell by at least some of what he said today that this is going to be something he makes political.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

HOLMES: So just to make something clear here. Yes, he is going up in the polls when it comes to the Republican primary. This is helping him with his base and Republican voters. However, there is no indication of what this would look like or if this would help him down the road in a general election. Something his advisers themselves have told me that they are concerned about. I don't know how this would play out as, obviously, unprecedent (ph) in time.

The other quick thing I want to mention here, while this case and while the way they're handling this is very political, it's very personal to Donald Trump. He built his entire brand on the idea that he was a rich successful businessman. It's not just his personal brand, but his political brand.

He spent the entire year of 2016 saying the reason he was best suited to be president is because he was such a successful businessman. He could take that and translate it into running the country and a message that you would likely hear again in 2024.

So an impact to that or a hit to that is also a hit to His political identity.

DEAN: Certainly irritates them, we know that for sure.

SANCHEZ: Yes. Yes, that's why he keeps going back to the microphone over and over, you can tell.

Kristen Holmes life from Manhattan, thank you so much.

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Still to come, Republican congressman, Matt Gaetz, vowing to push ahead with a move to oust House Speaker Kevin McCarthy. McCarthy's answer to Gaetz, bring it on. We have the latest on this fight.

DEAN: Plus, California governor, Gavin Newsom, appoints Laphonza Butler to fill the late Democratic Senator Dianne Feinstein's Senate. We're going to take a look at her background and what it all means for that Senate election next year.

SANCHEZ: And later, we're going to go live to Ukraine, where President Volodymyr Zelenskyy is meeting with European Union foreign ministers. He has a very powerful message to them. Ukraine's victory depends on your cooperation. All that and many more headlines when CNN NEWS CENTRAL returns.

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DEAN: Stay tuned. That's what Congressman Matt Gaetz is now saying about his effort to oust Kevin McCarthy from his speakership. Gaetz had been pushing to file a motion to remove McCarthy after the speaker struck a deal with Democrats over the weekend to prevent a government shutdown.

[15:20:02]

Let's bring in CNN's Lauren Fox, who's live on Capitol Hill.

And Lauren, Congressman Gaetz has so far stopped short of officially calling for what is known as a motion to vote to vacate, but he's promised that that's coming.

LAUREN FOX, CNN CONGRESSIONAL REPORTER: Yes, exactly. He's sort of keeping the suspense alive right now, Jessica. And what he went to the floor to do today was essentially just list out once again his problems with House Speaker Kevin McCarthy, accusing him of cutting a secret deal on Ukraine, which the speaker has denied. He also has argued that the effort to pass that short-term spending bill on Saturday with Republican and Democratic votes, that was a violation in the eyes of McCarthy's hardliners.

Now, one of the key questions remains whether or not, A, Gaetz has the votes to do this, and, B, whether or not Democrats are going to try and help McCarthy to survive. Here's Matt Gaetz on whether or not he would keep bringing this up if he doesn't have the votes the first time.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: If this does fail, will you bring this up again?

REP. MATT GAETZ (R-FL): Yes.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT (off camera): How often? Like every day? I mean, what's your - I mean, does - this would - do you think that you could win this vote eventually and that you're going to keep doing it until you think that you have the votes?

GAETZ: Like I've said, it took Speaker McCarthy 15 votes to become the speaker, so until I get to 14 or 15, I don't think I'm being any more dilatory than he was.

(END VIDEO CLIP)

FOX: And Jessica, the central question right now is what are Democrats going to do, because they could play kingmaker in this situation, either saving McCarthy or potentially contributing to his ousting. That is a key question right now.

Democratic leaders are expected to meet tonight to discuss, obviously, a myriad of issues. You can expect that this is going to be top of mind for so many members coming back to Washington today as they face down potentially this very key question.

DEAN: Yes, it is such an X factor what those Democrats are going to do. And Lauren, we saw Speaker McCarthy say, I believe it was, bring it on in terms of the threats from Gaetz. But how has he been responding to all of this?

FOX: Yes, repeatedly today, McCarthy is trying to put out there that he's not afraid of this, that this is always going to be a fight that he thinks is worth having. But as we pressed him repeatedly on whether he's having some conversations with his Democratic colleagues, including Democratic leader, Hakeem Jeffries, he sort of has said that he is not having those conversations now. when asked if he would have them in the future, he said, look, this is an issue about the institution. Here he is.

(BEGIN VIDEO CLIP)

REP. KEVIN MCCARTHY (R-CA): Look, I think this is about the institution. I think it's too important. So any time that somebody has an ethics complaint and they can't get the way they want about it, they want to rule up (inaudible) I don't know that's been for the House.

(END VIDEO CLIP)

FOX: SO he hasn't ruled it out if he's going to have a conversation with Jeffries, because obviously all eyes are on the Democratic leader. And I'll just note that many Democrats I've talked to have said if McCarthy wants bailed out, if he wants a life raft, he needs to go to Jeffries. He shouldn't expect the other way around, Jessica.

DEAN: Yes. All right. So they're all going to come back this evening, fly back into Washington, D.C. and our Intrepid Hill team, I know you guys will be there making sure that we know exactly what's coming next.

Lauren Fox for us on the Hill, thanks so much. Boris?

SANCHEZ: From the House side to the Senate side, where a new member is expected to be sworn in this week, California governor, Gavin Newsom, appointing Laphonza Butler to fill the seat left vacant from the death of Sen. Dianne Feinstein.

National Correspondent Kyung Lah has been tracking the story from Los Angeles.

So Kyung, bring us up to speed with a senator-designate. Tell us about her.

KYUNG LAH, CNN SENIOR U.S. CORRESPONDENT: What we know about her is that at least here in California, she is a formidable political figure. She is someone who is really well-known, at least in Democratic circles, but she is not holding public office right now. What she does do is she is the person that Gov. Newsom can point to and say she is someone who is allowing him to keep his promise to fulfill the role to appoint a black woman to this seat.

There has not been a black woman in the Senate chamber since Kamala Harris left to become vice president. So in Laphonza Butler, what he has is a historic appointment, the third black woman to serve in the Senate in U.S. history. She is also the very first black lesbian to openly serve in the Senate. She's currently the head of EMILY's List. And she's also somebody who has deep ties to the union movement here in California.

So, Boris, in Butler, certainly a notable moment for the governor, also his fulfillment of a promise, but also something else, like Democrats are talking about, Boris, is that she is being given this appointment without any strings attached, meaning that if she wanted to, she could go ahead and run in 2024.

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SANCHEZ: And she could potentially face a tough battle because there are already folks throwing their names into that competition. Tell us about them.

LAH: Yes, exactly. And this was the political pickle for Gov. Newsom, what he did not want to do and he's openly said this. First of all, he didn't want to appoint another senator. He wanted the voters to decide. But because of Senator Feinstein's passing, he has to fill this seat. And so what he did not want to do is tip the scales.

There are three congressional candidates already running for the Senate seat, Adam Schiff, Katie Porter, as well as Barbara Lee. So it's something that is a crowded field and is about to get much more crowded.

SANCHEZ: Yes, a race to watch out west for 2024.

Kyung Lah, thanks so much for the reporting.

Up ahead, it could be the largest health care strike in U.S. history. Unions representing 75,000 Kaiser Permanente employees are planning to strike on Wednesday if they don't reach a new labor contract. The latest on their ongoing negotiations when we come back.

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