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Don Lemon Tonight

Trump Supporter Facing Legal Charges; Mueller Insists to Interview Trump; Congressman Chris Collins' Alleged Insider Trading Scheme; The President's Friends Giving Advice to the V.A.; Rudy Giuliani, Saying the President's Legal Team Has Responded to Special Counsel Robert Mueller; Senator Rand Paul is in Russia. Aired 10-11p ET

Aired August 08, 2018 - 22:00   ET

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

[22:00:00] (JOINED IN PROGRESS)

DON LEMON, CNN HOST: America would not be the country that it is without immigrants, and without people who were brought over in slave ships. And all those countries that he disparages as you said.

Not only, you know, were people given a chance or people succeed here who are immigrants wherever they came over. But this country would not be the same without people like you and me and our brown brothers and sisters, it just wouldn't be. It wouldn't be the same country.

CHRIS CUOMO, CNN HOST: And that's true. Not only would it not be the same, it would be less than. Because look, you and I have gotten to travel all over this world. And seen the great societies and those that need help.

Diversity is what separates us, it sets us apart in a positive way. That's why people haven't been able to compete. Everybody here came here for a chance, worked their asses off to make the most of it, and make this country what it is.

LEMON: You did. I'm proud of you and your family. And maybe, I probably you should a word from my mom when she said to me, "Don't ever forget where you came from, boy." I'm like, yes, ma'am, absolutely right.

CUOMO: Amen to that.

LEMON: Thank you, Chris. See you soon.

This is CNN TONIGHT. I'm Don Lemon.

Tonight, Congressman Chris Collins of New York stands indicted in an alleged insider trading scheme. Accused of multiple counts of fraud.

Now it is rare for prosecutors to indict a sitting elected official, particularly in an election year. But the U.S. attorney in New York says that Collins acted as if laws, well, they just didn't apply to him.

Now you may recall that the New York republican was the first member of Congress, the first one to endorse Donald Trump's presidential bid and was a frequent Trump surrogate during the 2016 campaign.

(BEGIN VIDEO CLIP)

REP. CHRIS COLLINS (R), NEW YORK: Donald Trump has accomplished in this primary, is unprecedented. He spent very little money. He has rounded up the delegates that no one thought any of the original 17 would have by this point. Donald Trump is absolutely brilliant. And Donald Trump is a winner, Donald Trump wants to win.

The temperament and the personality of Donald Trump is exactly what America wants.

The energy behind Donald Trump is like no one has ever seen.

(END VIDEO CLIP)

LEMON: You see the dates up there on the screen; that was very early on. And this vocal Trump supporter now stands accused of some really swampy behavior. We have yet to hear what the president says about this, but it is worth remembering what he has said in the past.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I want the entire corrupt Washington establishment to hear the words we all -- I'm your messenger, just a messenger. Doing a good job, but just a messenger. We all are about to say, when we win on November 8th, we are going to drain the swamp.

Drain the swamp.

We're going to drain the swamp of Washington, we're going to have fun doing it, we're all doing it together.

When it comes to Washington, D.C., it is time to drain the swamp.

(END VIDEO CLIP)

LEMON: Not only has that swamp not been drained, this administration is building all over it. Now I know that Chris Collins is a congressman and a Trump supporter, and he's not a member of this administration, but Trump told us he was going to build his administration out of the very best people. It hasn't exactly turned out that way.

So let's start now with Trump's first national security adviser. There he is up on your screen. That's Michael Flynn who was fired by the way, and then he pleaded guilty to lying to the FBI about his contacts with Russians before Trump's inauguration.

His contacts with Russians before the inauguration. And he is cooperating with the Mueller investigation now. And then there is the former EPA chief Scott Pruitt finally resigning last month after a year and a half of ethics scandal.

And then there is the former HHS secretary, Tom Price forced to resign last fall over allegations of extravagant travel. An inspector general's report accuses him of wasting over $300,000 in taxpayer money.

On now to the commerce secretary. Mr. Wilbur Ross, an extremely wealthy businessman admitting to errors in failing to divest assets as required by government ethics rules. And a bombshell report in Forbes this week, alleging a pattern of grilling on Ross's part to the tune of $120 million.

Then there's a former Trump campaign manager Corey Lewandowski. Two of his former aides on the campaign are reportedly forming a new lobby firm to be conveniently headquartered in, of all places, Lewandowski's Washington townhouse.

Trump's former personal attorney, Michael Cohen under criminal investigation by the U.S. attorney in New York.

[22:04:59] CNN is reporting, our reporting also shows that after Trump's election victory, he aggressively pitched himself to potential clients as a consultant due to his proximity to the most powerful man in the world.

That aside from Cohen's regular day job before the presidency where he open up LLC's and tended to hide payments to women on behalf of the president.

And, of course, Trump's former campaign chairman Mr. Paul Manafort is as we speak on trial in Virginia on multiple tax and bank fraud charges. Part of Robert Mueller's ongoing investigation. The star witness against him, another Trump campaign official, former Trump campaign official who went on to serve inside the White House. That's Rick Gates. What was that line again?

(BEGIN VIDEO CLIP)

TRUMP: We're going to make America great again. We're going to use our best people.

I'm going to get the best people. We're going to deliver, we're going to get the best people in the world.

We don't want people that are b level, c level, d level. We have to get our absolute best.

We're going to use our smartest and our best. We're not using political hacks any more.

It's a sophisticated chess match, but I have the best people lined up.

You need people that are truly, truly capable. We have to get the best people.

(END VIDEO CLIP)

LEMON: Best people to drain the swamp. So I want to begin with CNN Political Analyst, Ryan Lizza, CNN Legal Analyst, Laura Coates, a former federal prosecutor, and Harry Litman, a former U.S. attorney.

Good evening, everyone. Let's talk about draining the swamp, and getting the best people. Ryan, what happened to the best people and draining the swamp?

RYAN LIZZA, CNN POLITICAL ANALYST: I mean, the swamp as you pointed out, Don, did not get drained. The creatures just rotated through the revolving door down here. You know, there's a word that became -- a word I never heard of until this presidency when people were sort of struggling with how to describe this government of, you know, sort of fringe characters, people with resumes that did not usually enter into government service.

And that word is kakistocracy. Government by the worst. And that may sound kind of harsh. But I think it points in this presidency, it has been an apt way to describe it. You know, to paraphrase Donald Trump, they're not sending their best.

And you know, I think the evidence that you -- it's not a partisan point, you laid out the evidence there of an administration that is just filled with people who have either crossed ethical lines or challenged norms that we have all upheld for decades in this country. And frankly, all being led by the president at the top who sets that tone.

LEMON: Let's talk more about the swamp here, Harry. Because Rudy Giuliani says that they have responded to Mueller's latest proposal regarding an interview. And he says that these allegations should be over by September 1st, that's what he says. Are they really in a position to be calling the shots like that?

HARRY LITMAN, FORMER U.S. ATTORNEY: No. Nor would they even know what they're saying. We've had a series of those kinds of statements from Giuliani, it was going to be a couple weeks. We've had a series of the statements from Trump starting back in June. I'm 100 percent ready to testify.

And instead what we've received is this kind of tango between the two groups where Giuliani and Trump at least feign some kind of desire and willingness to sit down and answer some questions in some form. But not acting in anyway the way a witness or not to mention a suspect in a criminal probe would act. You hear--

(CROSSTALK)

LEMON: So you don't believe them? You don't think he's going to sit down? You think they're feigning interest?

LITMAN: I do think they're feigning, and I think it's been that way for a long time. In part, though, I mean, I think it because I think it's not in Trump's interest to sit down.

Not because it's a perjury trap, one of the two word Trump slogans that he throws about like drain the swamp or fake news, that it's really hard to know what he means. But because he knows Mueller seeks, you know, real answers to

important questions. And then Mueller will have information that Trump doesn't have. And it will put him in a precarious position if he has any vulnerability.

LEMON: Well, Harry, do you think it's time, the time has come then, I think this is an important question. The time has come now to subpoena the president?

LITMAN: So, in a word, yes. I mean, I would never want to second guess Robert Mueller, he's got impeccable judgment along with everything else, there has been some reason he's been staying his hand, but surely if the reason to stay his hand is that they'll be able to work out a deal.

[22:09:59] I think it's pretty clear that won't happen. It will have some delay to subpoena him. There will be a legal battle, but that's going to happen whenever he does it.

You know, I think not only do we need it for the probe, but we need it for the country. We need to know what's happened, we need to know where Trump -- what Trump asserts, and we may never find out without his being forced in some way to give answers.

LEMON: Laura, let's bring you in now. So, the president's team wants to limit what the special counsel can ask and saying that they would consider questions related to obstruction as long as they aren't perjury traps. I mean, if he is telling the truth, why does he need to worry about perjury?

LAURA COATES, CNN LEGAL ANALYST: Arrogance. Because you want to be arrogant enough to dictate the terms of somebody who holds a greater bargaining position than you do.

What he's trying to do is essentially saying, listen, I'm showing the court of public opinion, and maybe the court of law that I am being very reasonable.

I am negotiating in good faith here to try to voluntarily sit down and avert even a compulsion of a subpoena discussion in the court of law, and it's Mueller who is tying my hands who is making it impossible for me to do what I know the American people and my leadership as the executive branch of government dictates that I do.

But they're playing this game of good cop and bad cop, knowing that both are actually all in on the feigned exercise here.

And when he tries to dictate the terms of the obstruction conversation, it alerts you to two things, Don.

Number one, there is a real nearsightedness by the president of the United States legal team that says, this entire collusion probe is simply about whether the president of the United States has engaged in wrongful conduct at the tail end of the campaign.

And also it shows you that his fixation on the notion of obstruction is one that his own behavior continues to fuel. The only reason that aspect of the investigation has been prolonged is because he continues to tweet and engages in acts that make people say, I think a red flag has been lifted here about your own conduct.

Perhaps if he stopped talking about the issues, he would be able to have a more timely efficient close of the probe--

(CROSSTALK)

LEMON: And what would we talk about?

COATES: No. There's still plenty to talk about, because the president has this insatiable irresistible urge to do so.

LEMON: I know. I was being snarky.

COATES: Those all fuel -- yes. Yes, but are fuel Robert Mueller's thirst to say, well, what is it that you don't want me to see, that's the only thing I want to look at.

LEMON: I just -- I want to play this, this is -- what Rudy Giuliani said to Trump's other lawyer, to Jay Sekulow, on Jay Sekulow's radio show.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: We have now given him an answer. Obviously he should take a few days to consider it. But we should get this resolve who's got all -- honestly, he's got all the information that he needs. The interview will provide nothing in addition to what -- what he already has.

(END VIDEO CLIP)

LEMON: So, listen, Ryan, to Laura's point, it seems like that they are trying to delay or stop an interview at all costs. Despite the president saying he wants to get over it. And to Harry, as well. Harry says he believes they are feigning interest. But go on.

LIZZA: Look, I think everything that Giuliani and Sekulow his sort of public lawyers, everything that they say has to be viewed through the prism of what Giuliani has said previously.

And that is one, Mueller cannot indict the president. He alleges that 2Mueller has told them that. And two, that this will only play out. That the only possible consequences for Trump would be in Congress in an impeachment setting.

So this is not -- to them, it's not a normal criminal case, right? A normal criminal defense attorney would not be out there condemning the prosecutor in this way playing these kinds of games, because these -- Giuliani knows his clients. Apparently, he believes this, if it's true, if it's true Mueller has never said this publicly that he cannot be indicted.

So that is a huge ace that they hold, knowing that Mueller can never indict the president. And knowing that the only forum is going to be Congress and impeachment. And so, they can turn this into a completely political battle rather than restrict the illegal one.

LEMON: Did it escape all of you or any of you that the president's attorney has a radio show?

(CROSSTALK)

LIZZA: I was going to say tough interview to get.

COATES: And that he invited his other private attorney to be on. I mean, forget the notions of privilege here. You actually discussed the conversations that you probably had with your client. And to Ryan's point, remember, it's not that you cannot ever indict a president, period. It's a sitting president.

The idea you could eventually cause there's going to be an indictment is actually key here. I do think that Robert Mueller is keenly aware of that particular aspect of it and so as Giuliani and his squad.

LEMON: OK. Stick around, everyone. Harry, we'll get you more in on the other side. We have a lot to talk about.

Despite demanding an end to this Russia investigation, Rudy Giuliani now says that dragging out negotiations with Mueller through the November midterms could boost Republican candidates at the polls.

[22:15:02] We're going to talk about that next.

(COMMERCIAL BREAK)

LEMON: Rudy Giuliani offering yet another new twist in his defense of the president after hinting negotiations with Robert Mueller and trump's legal team, it could be done by Labor Day. The president's attorney seems to be supporting a new strategy tonight.

So, back with me, Ryan, Laura, and Harry. Let's talk about Rudy, shall we? Harry, I promise you the first response. So, Rudy Giuliani is telling CNN that the GOP could benefit if Trump's negotiations with Mueller drag on. What do you think about that?

LITMAN: Well, I think are complicated calculations on both sides. But the thing that really struck me about what he said is, even if the president gives an interview, Mueller won't know anything more than he already knows.

He's asserting literally there's no more to know, there's no what did you say you told Jim Comey? Or when did you find out about the Russia meeting? Or why did you get so angry at Jeff Sessions and what did you say? These are the critical core questions for judging his state of mind. And Giuliani seeks to put them off the table.

I do think that if there -- if it drags on the probe hangs over him and it obviously creates a kind of cloud.

[22:19:59] On the other hand, if the report comes out and it's damning, then that will be the kind of record he, that is taken in to the midterms. But it could be that he'll already begun to have pivot and said that's behind him. I think time probably favors Mueller over Trump at this point.

LEMON: I think the strategy, though, Ryan, is that Giuliani thinks it's going to energize the GOP voters because people are getting tired of it, or it will betray Trump as a put upon figure that should, you know, everyone is out to get him. Is he right?

LIZZA: I think, yes, I think that's exactly what they're trying to do. They're turning Mueller into this person who's unfairly out to target Trump. The whole witch hunt rhetoric and all that. And you know, I don't know if he's right about that, it probably depends on the race and the demographics of the district you're talking about.

Some Republicans don't want to talk about this issue at all, others have leaned into it more and talked about it. If you look at that Ohio race last night, the special election, neither candidate really was hot on the Russia issue, they talked about tax cuts and Medicare and bread and butter issues.

I do think, to be frank, my own view is, it would be good for the country if this report -- if Mueller's going to write a report that's going to become public. Wouldn't that be great if we had that before election day? And the country would know all the facts and there wouldn't be this issue hanging over Trump. And we would actually -- you know, voters could go to the polls understanding that the make-up of how important the make-up of Congress was going to be.

And if they thought the Mueller probe was B.S., they could keep the Republicans around, if they thought it was serious and only a new Democratic Congress could rectify the situation. They could vote that way.

LEMON: Yes. Ryan, good luck with all of that. Laura, I have to ask you.

COATES: Yes.

LEMON: I mean, do you think Mueller is considering the impact of all this might have on the midterms in November?

COATES: I think he's required to consider the impact of every major prosecution on the elections. But the DOJ policy is that you're not supposed to engage in a prosecution that could ultimately impact an election. Which actually assumes that the person you may be targeting would be on the ballot.

That's not the case here for President Trump. He's not on the ballot, not a member of his campaign team, or is a part of the ballot. So it would be assuming that the DOJ policy is that one should not prosecute or pursue prosecution of anyone, even if the people who are targets or subjects would have no bearing on the actual ballot initiative for the ticket. So it's a big assumption to even make that he would have to--

(CROSSTALK) LEMON: Do you think it's a red herring?

COATES: I think it's a very big red herring. But sill, people need to understand. Although the midterm elections there in November the reason Giuliani is pointing to September is an ironic reason for because of early voting. It's because there are states around the nation that have early voting beginning in September.

Which ironically is one of the things that many or part of the voter fraud commission, et cetera, under the administration did not enjoy about having the early access to the polls, and now they are aware, keenly aware that the early elections will have some impact on Mueller's consideration of how long to continue this probe.

LEMON: Do you really think, Ryan, you know, let's say, witch hunt whatever happens out of this Mueller investigation. Do you think that's going to -- that won't really change anything when it comes to the base?

The target audience here, I think in the court of public opinion. I guess maybe to keep his base energized, but it would independents and it would be people that you could possibly peel off from the Democratic Party, right?

LIZZA: I mean I guess I still believe, maybe I'm naive, that if Mueller finds evidence of a crime, that Republicans, that there is a chance that Republicans would change their views about the investigation.

Remember, in Watergate, I mean, people defended -- Republicans defended Nixon after a lot of very incriminating evidence had built up, right? Even after John Dean's testimony, right? His own White House counsel came out against him and said he as a crook. A lot of Republicans said out on Dean, we don't believe Dean.

Nobody -- you know, things didn't turn until you had the smoking gun tape. And so -- I'm not saying that Mueller has that. But I still -- you know, I do believe that there is some red line at some point that could be triggered in the investigation. And we just won't know that until Mueller reveals all he knows.

LEMON: Until that red line, until we get to that red line. So, Harry, Giuliani and Trump's legal team they keep using this phrase, perjury trap. We talked a little bit about this before. They do it because they're trying to raise questions about Mueller's tactics, right?

LITMAN: Well, that's part of it, I think it is just a kind of slogan that revs the base up. I mean, I agree with the point that Ryan just made, that we're really talking about trying to have an impact on the sort of margin of people who can actually be persuaded to think twice about it.

[22:24:59] But yes, they bandy it around. And God knows what they think it means, it's certainly nobody proposes here to treat him like different from other witnesses who come in and give the facts about what they knew and what happened. And when they knew it. A perjury trap if it means anything is a sort of setup just to play got you with a factual question. But these are the deep questions that are front and center in this criminal investigation. They have been for over a year. And Mueller's been stymied in trying to get to them by Trump.

So if you think for just a second of the kinds of questions Trump will be asked, I think you have to dismiss the idea that it could ever be a perjury trap.

LEMON: And they're really rolling the dice when it comes to the subpoena thing. Because if he is subpoena, then he doesn't get -- he doesn't have the opportunity -- correct me if I'm wrong -- I have to get to the break, though. But his attorneys won't be in there with him, is that right?

LITMAN: Well, they could make a compromise. And they have in the past, but certainly he can't try to set the rules as he's doing now.

LEMON: Thank you all. I appreciate your time.

LIZZA: Thanks, Don.

LEMON: When we come back, the New York congressman accused of insider trading who could face up to 150 years in prison if he's convicted. Chris Collins not only denying the charges, but insisting he's going to run for office again.

I'm going to ask the former chair of the House ethics committee, Charlie Dent. What he thinks about all of this. That's next.

[22:30:00] (COMMERCIAL BREAK)

[22:30:22] LEMON: Federal prosecutors accusing Congressman Chris Collins of insider trading, the New York Republican, his son, and his son's future father-in-law all pleading not guilty to charges of fraud relating to an Australian pharmaceutical company. Collins is accused of receiving early word of a failed drug trial while attending the 2017 Congressional Picnic at the White House, then warning friends and family so they could avoid losing hundreds of thousands of dollars.

So I'm joined now by CNN Political Commentator, Charlie Dent, a former Republican Congressman who once chaired the House Ethics Committee. Good evening. It's so good to have you on and your expertise on this story. I really appreciate it. So I just want to read. Let me give you the timeline here before we talk about it, Congressman Dent.

And keep in mind this is all happening on White House grounds, OK. So they say at 6:55, Collins gets an e-mail from the CEO of the company saying that the drug failed clinical trials. And then six minutes later, Collins tries to call his son, Cameron, making contact after four attempts. At 9:34 that night, Cameron contacts his future mother-in-law who tells her broker to dump the stock.

The next morning, Cameron dumps over 16,000 shares of the company. So when you see it all laid out like that, does it seems like Collins and his attorneys have an uphill climb here? What do you see when you look at that timeline?

CHARLIE DENT, CNN POLITICAL COMMENTATOR,: Well, it's clear, Don, that these allegations are very serious, and that Chris Collins is going to have a pretty tough time and his family, going-forward. Now, we have to operate under the presumption of innocence.

LEMON: Right.

DENT: DOJ is -- they've indicted him. That will trigger the House Ethics Committee to act. They will empanel an investigative subcommittee. I suspect that the Department of Justice will then call the subcommittee and say, please defer this matter to us. Let us investigate this. The committee will likely honor that request. That's what typically happens in cases like this.

But right, now, you know, Chris Collins is going to be in for a really rough road here. There's no question about it. He's been stripped of his seat on the Energy and Commerce Committee as I understand it. So he's going to have to fight this out in court. And his bigger problem truthfully, is that the DOJ problem, the criminal charges and the ethics issue.

But if he were to plead guilty or if he were to be convicted, then of course, you know, it would be expected that he would resign. And if not, then the ethics committee would probably take that up as a matter of an expulsion. And we had a situation here in Philadelphia a few years ago. Remember Chaka Fattah.

(CROSSTALK)

DENT: He's in prison now for misdeeds, and he resigned after he was convicted.

LEMON: Yeah. Let's hear it from Chris Collins. He addressed the charges a short time ago. Here he is.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Many have speculated about my relationship with Innate. Here are the simple facts. My connections with the company are well known. I believe I acted properly and within the law, at all times, with regard to my affiliation with Innate. Throughout my tenure in Congress, I have followed all rules, and all ethical guidelines, when it comes to my personal investments, including those with Innate.

(END VIDEO CLIP)

LEMON: He denies wrongdoing, says he's going to run for re-election. Listen. If he denies it and he's not guilty, fine, but he's not going to -- he is going to run for re-election. Do you think that's a mistake?

DENT: Well, I wouldn't. But I mean he's going to be spending a whole lot of time and effort just trying to defend himself and clear his name. Again, he's entitled to the presumption of innocence. He says he's done nothing wrong. Though he's going to have to make that case in court, and you know, he may or may not prevail.

I'd rather not have to deal with a political campaign simultaneously while I am fighting this battle for my life, legally speaking.

LEMON: That's a lot on his plate. He did say that he's not going to speak about this publicly. The only time he would do it is in a court of law or with his attorneys. But as far as the public, in front of the media, he's not going to talk about this investigation. You were on the House Ethics Committee back in October of 2017, when it was announced that Collins was being investigated for insider trading allegations.

And that investigation is ongoing. How far along had that investigation come before you stepped down from Congress?

DENT: Well, I was no longer on the committee in October of 2017. I had been termed out. I finished my term I think on January 1st of 2017. So I was not involved with that investigation. What you're referring to, there was -- The Office of Congressional Ethics, not the House Ethics Committee, The Office of Congressional Ethics took up this matter and they were reviewing it prior to the indictment.

[22:35:03] And all the Office of Congressional Ethics can do is make a recommendation to the House Ethics Committee. And the House Ethics Committee can do one of two things. It can either further investigate the matter or dismiss the matter. That's all it can do. And the Office of Congressional Ethics, that is actually undertaking this review, does not have the ability to sanction.

Only the Ethics Committee and the house have that ability. And there are four sanctions that the house can impose on a member. Expulsion, and there have been about five or six expulsions in the history of the house. I think most -- three or four were during the Civil War for treason. The other was (Inaudible) of Philadelphia (Inaudible). Remember him.

A member can be censured, reprimanded, or a letter of reproval. That is all the house can do. Ethical matters are not necessarily criminal matters. We're dealing with violations of house rules here. Again, an ethical matter can become a criminal matter if not handled properly. But right now, Chris Collins' biggest issue is with the Department of Justice and this criminal investigation, because that's what's going to really make or break him at the end of the day.

LEMON: Charlie Dent, thank you so much. I appreciate that.

DENT: Thank you, Don, great to you with you.

LEMON: You as well. So think about all the controversy that has surrounded the V.A. over the last few years. When we come back, there's an absolutely shocking report that shows the President's friends and members of his private club are making major policy and personnel decisions for the VA. The reporter who broke this story joins me next to explain how the Mar-A-Lago crowd is running the Department of Veteran Affairs.

(COMMERCIAL BREAK)

[22:40:00] LEMON: So President Trump's efforts to improve the Department of Veterans Affairs under new scrutiny tonight. A stunning new investigative report in ProPublica, which has been confirmed tonight by CNN, reveals that an unelected informal council of President Trump's friends is exerting influence over the V.A.

They're identified as Ike Perlmutter, the Chairman of Marvel Entertainment, Florida doctor, Bruce Moskowitz, and Attorney Mark Sherman. None of them has served in the U.S. military or the government. But they are all members of the President's Mar-A-Lago club. And I want to bring in now ProPublica Reporter, Isaac Arnsdorf who broke this story. Isaac, it's so good to have you on. This is fascinating and a great piece of reporting.

ISAAC ARNSDORF, REPORTER, PROPUBLICA: Thank you.

LEMON: Your reporting reveals the three wealthy men use Trump's club, Mar-A-Lago, as their home base. And they've come to be known to V.A. officials as the Mar-A-Lago crowd. And here's what you write. You said the Mar-A-Lago crowd spoke with V.A. officials daily, the documents show, reviewing all manner of policy and personnel decisions.

They prodded the V.A. to start new programs and officials travel to Mar-A-Lago at taxpayer expense to hear their views. Everyone has to go down and kiss the ring, a former administration official said. Stunning, walk us through that.

ARNSDORF: Well, it's a very unusual situation for the past year and a half. There are these three guys in Mar-A-Lago, as you mentioned, an entertainment executive, a lawyer, and a doctor, who have been acting a shadow leadership for the Department of Veteran's Affairs. Even though they don't have any relevant experience with Veteran's healthcare and they don't have any official role in government.

And they've been doing this without any accountability or oversight or transparency. Very few people outside the V.A. had any idea that this was going on.

LEMON: So then who gave them the authority to do this? Who gave them permission to get involved?

ARNSDORF: The President. So you think back to the transition, there was a period where Trump was asking a whole bunch of his rich friends to get involved. Remember, there was a time where Carl Icahn was going to do deregulation, and Rudy Giuliani was going to do cyber security, and so one of these people was Ike Perlmutter, who's been a friend of Trump's for a long time.

And Perlmutter said, well, I'll help you fix the V.A. And so then Perlmutter got Sherman and Moskowitz involved. But unlike these other guys who I mentioned who are sort of faded away (Inaudible) disappeared. This one has not only continued but has actually deepened to the point that they managed to stack the leadership of the agency with people who were loyal to them, because anyone who didn't get along with them got pushed out or passed over.

LEMON: So Isaac, to be clear here. What expertise do any of these men have in either veteran's issues or running of the V.A.?

ARNSDORF: Well, that is the exact question that V.A. officials have been asking themselves for the past years. What business do these guys have telling us what to do with veteran's policy? You know, and the answer is they have the President's ear. And in this case, that's what matters.

LEMON: OK. So here's what you write. You said if the bureaucracy resists the trio's wishes, Perlmutter has a powerful ally, the President of the United States. So what's the extent of their relationship?

ARNSDORF: So they talk on the phone pretty regularly, and they'll have dinner when Trump is down in Mar-A-Lago. And whenever something veterans-related comes to Trump's attention, the first person he's going to call is Perlmutter. And if Perlmutter isn't getting his way on some thing at the V.A., he can take it up with Trump directly. And everyone knows that. So no one wants to pick that fight, because they know they're going to lose.

LEMON: So former administration officials also told you that V.A. officials who clashed with the Mar-A-Lago crowd, they were pushed out. That includes a former V.A. Secretary, David Shulkin. By the way, Shulkin left the agency in March because he had some ethics problems, other ethics problems. They reportedly grew frustrated with Shulkin after disagreeing on various issues. Fill us in on what happened.

[22:44:55] ARNSDORF: So over time, at the beginning, they had sort of an uneasy relationship with Shulkin. They met him actually when he was nominated, before he was even confirmed. And from the beginning they said, you know, we don't have to meet every month, but we're going to talk very regularly. And you know, Shulkin you could tell from reading these emails that I obtained, you could tell that Shulkin didn't really love the idea of these guys telling them how to do his job when he thought that he knew how to do it better.

And over time, they grew frustrated with him as well, because they thought that he should be listening to them and he wasn't. And so what ended up happening was there were other political appointees at the V.A. who had a political disagreement with Shulkin. And so they sort of teamed up with the Mar-A-Lago crowd, and that ended up contributing to Shulkin's downfall.

LEMON: I want to get your response to this statement. And three of them released a statement to ProPublica (Inaudible) crisis communications consultant. And they say in part, at all times we offered our help and advice on a voluntary basis, seeking nothing at all in return. Adding this, while we were always willing to share our thoughts, we did not make or implement any type of policy, possess any authority over agency decisions, or direct government officials to take any actions. So they're downplaying their influence here, saying that they were just trying to help. ARNSDORF: Right. And they're saying that, well, we were just

providing advice and that was always optional. But you can you see from the emails that are quoted in the article, that's not how it was received by the V.A. officials when the Mar-A-Lago crowd said they wanted something done a certain way. Everyone understood that it had to be that way or else their jobs were in jeopardy, because they were representing themselves as speaking on behalf of the White House or representing the President's agenda.

LEMON: Isaac, I want you to stick around for this next segment, because when we come back, the former head of the Government Ethics Office breaks down just how bad this looks for the Trump administration. Is all of this actually legal? And should it be?

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[22:50:00] LEMON: Bombshell news tonight that three wealthy men who were friends of President Trump's and based at his private club, Mar- A-Lago, are exerting sweeping influence over the V.A. Back with me now, Isaac Arnsdorf, and we're joined now by CNN Contributor, Walter Shaub. He's a Former Director of the Office of Government Ethics who resigned his position in President Trump's first year, Walter, good to see you. Welcome to the program. You called this a sinister shadow government. Explain that.

WALTER SHAUB, CNN CONTRIBUTOR: Well, this is literally the worst-case scenario of a smoke-filled room full of rich guys making decisions and pulling strings like puppet masters. And the worst part is if it wasn't for Isaac's work here, we wouldn't even know about it. And this is precisely the thing that there are laws to prevent. There's a Federal Advisory Committee Act that requires you to follow very strict procedures for transparency when you're seeking information from outside groups.

And the antithesis of following that law is having a smoke-filled room with some cabal of rich guys sitting around a resort down in Florida, making decisions that are going to affect veterans, and essentially running a 370,000-person agency. The other thing is by counting on these private individuals to do this, you're essentially running the government through people who are not subject to the government ethics laws.

LEMON: Yeah.

SHAUB: There was actually some OLC opinion, the Office of Legal Counsel in the Department of Justice that says if you're wielding government power, you can be actually because deemed governmental and subjected to those laws. Now, I haven't seen anyone actually prosecuted under that. But, boy, I would love to see that with these guys.

LEMON: Well, Isaac, let me ask you. Do you get any indication after all of your reporting that the three men are standing down or that they're pulling back?

ARNSDORF: No. I mean we'll have to see how they respond to this article. And now that the House Democrats on the veterans' committee are starting an investigation and one of the members of the Senate Veteran's Committee is calling for a hearing on this. So we'll see how that goes. And we also have to see there's a new secretary at the V.A., Robert Wilkie, who is in his first full week at the job. So we'll have to see how he wants to manage the situation.

But it's certainly true. And in the time since Shulkin was fired, their involvement has increased, has not decreased.

LEMON: So I heard you say, you know, that you would like to see a certain law, rule tested, Walter. But in the past, Presidents have relied on unofficial kitchen cabinets. But you've never seen anything in outside advisers so specifically involved in one agency?

SHAUB: No. This administration keeps delivering firsts that we could just never have imagined. I mean its one thing for the President to call up somebody they know and ask them, gee, what do you think about this situation that I am dealing with. It's another thing for these people to be able to show up -- you know, require the V.A. employees to come down and meet with them, and essentially kiss the ring, as Isaac put it in his story, or take their phone calls or emails and be giving them instructions.

That's not a kitchen cabinet. That's a shadow government, because they're making decisions here that affect things. You know the other thing to keep in mind is they're essentially purchasing influence with their membership at Mar-A-Lago. That's $200,000 thousand membership fee. I can't imagine if any of these three gentlemen called up Trump tomorrow and said, hey, I am quitting the club, but I would like to keep running the Veteran's Affair's or the V.A., that he'd still be relying on them.

And that they still wield the same influence over the V.A.'s leadership. And so, here's a bunch of guys who paid the President for the right to push around the V.A., a 370,000-person agency.

[22:55:05] LEMON: That is a very good point. Walter, thank you. Isaac, thank you as well. I appreciate it.

ARNSDORF: Thank you.

LEMON: When we come back, Senator Rand Paul is in Russia today where he personally delivered to the Russian government a letter from President Trump to Vladimir Putin. But he and the White House have different explanations as to what's in the letter.

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LEMON: This is CNN TONIGHT. I am Don Lemon, 11:00 p.m. here on the East Coast live with all the new developments for you right now. President Trump's lawyer Rudy Giuliani saying Trump's legal team has responded to Special Counsel Robert Mueller, the latest effort in the ongoing negotiations over a possible interview with the President.

But they want to put limits on the questions, and they want the negotiations to be over by September 1st. And Senator Rand Paul in Russia with a letter from President Trump for President Putin that the White House and Senator Paul are saying two different things about what the letter contains.