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North Korea Hands over 55 Cases of Remains; Imran Khan Declares Victory in Pakistan Election; Facebook Shares Plunges 19 Percent in Worst Company Loss Ever; Omarosa's August Surprise New Book Unhinged; CNN Sources: Cohen Says Trump Knew In Advance Of 2016 Trump Tower Meeting With Russians; Giuliani: Cohen Has No Credibility Because Of His Lies; California's Governor Declares State Of Emergency. Aired 12m-1a ET

Aired July 27, 2018 - 00:00   ET




JOHN VAUSE, CNN INTERNATIONAL ANCHOR: Hello. Welcome to our viewers all around the world. I'm John Vause. We are following two breaking stories this hour. Sources tell CNN that former Trump Attorney Michael Cohen alleges Donald Trump knew in advance about 2016 Trump Tower meeting with Russians promising dirt on Hillary Clinton.

That contradicts repeated denials by the president as well as others, but Cohen says he was present when then-Candidate Trump was told about the outcoming meeting by his son, Don Jr. We'll have more on that in a moment.

But first 55 cases of human remains have been handed over by North Korea to the U.S. They are now in South Korea. It's the first such handover in more than a decade. The boxes are believed to hold the remains of U.S. servicemen killed in the Korean conflict in the early 1950s, possibly other servicemen as well from allies, who also fought alongside the Americans during the Korean civil war.

Alexandra Field is at Osan Air Base with more on this. So, Alex, this is just the start of a long journey home for these soldiers who basically have been missing in action now for, what, 65 years?

ALEXANDRA FIELD, CNN INTERNATIONAL CORRESPONDENT: Yes. This was a very brief ceremony, but it is something that has been long waited for, long hoped for, long prayed for by family members. Of course, if you are someone who is back in the United States and you are hopeful that the remains of a loved one or perhaps a father, a grandfather, someone you didn't even know, have been recovered, it will take some time to figure that out.

But certainly, this is a step forward. We witnessed a really powerful moment just a short time ago. A C-17 was sent into North Korea to pick up these remains. It was loaded by U.N. officials, who were accompanied by some U.S. technical experts.

Then it was brought back here to Osan, which is the U.S. air base that is closest to the DMZ and then the honor guard met this cargo plane. Each box, all of the 55 boxes, were taken off the plane individually. An honor guard was present so were the service members who are stationed at this base. All of them here to pay some respects.

Those remains will now be taken to another hangar at this base for some preliminary forensic test. In about a week, John, we'll see a full ceremony here, and then those remains will move on to Hawaii for further DNA testing.

Identification of families would only come after that, but this is a process that could now take months or in years -- John.

VAUSE: Alex, just as we were coming to air, the U.S. president tweeted, "The remains of American servicemen will soon be leaving North Korea and heading to the United States. After so many years, this will be a great moment for so many families. Thank you to Kim Jong-un."

The return of these missing -- or the remains of these missing servicemen was a key to the Singapore summit between Trump and Kim Jong-un. This is also Being seen as a confidence building measure, but it also took a lot longer than expected. Why is that?

FIELD: Yes, President Trump did tout this as a victory when he got Kim to agree to not just return some of the remains that had been discovered, but to continue to work to find remains of the thousands of service members who never made their way home from that conflict out here on the peninsula some 65 years ago.

This was supposed to happen more swiftly. That was the understanding. North Korea officials didn't show up in a meeting with U.S. officials where plans were set to be made about the handover of these remains. John, this is certainly a political process.

But the North Korean officials did in fact hand over those remains. U.S. officials were not certain it would happen today until essentially the last minute. It really wasn't certain until those boxes were loaded onto the plane, and then those boxes finally made their way here, still with those remains.

You say it's confidence-building, and it is that. This is an issue that's dearly and deeply important to the loved ones of these service members, but this is also a sign of North Korean making good on some part of the agreements that it struck in Singapore with President Trump.

VAUSE: We should also note there was a civil but dignified service of the remains of the U.S. servicemen and others since they arrived back there in South Korea. Alex, thank you for the update.

Now to a potential political bombshell dropped by Donald Trump's former attorney, Michael Cohen. Sources say Cohen is prepared to testify that then-Candidate Trump approved in advance the 2016 meeting at Trump Tower with a Kremlin-linked Russian lawyer who promised to hand over dirt on Hillary Clinton. If true, it would directly contradict numerous denials from the president and others within its family, legal team, and administration. CNN's Jim Sciutto has details.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Sources with knowledge tell myself and Carl Bernstein that Michael Cohen claims that then-Candidate Trump knew in advance about the June 2016 meeting in Trump Tower in which Russians were expected to offer his campaign dirt on Hillary Clinton.

[00:05:03] Crucially, these sources say that Cohen is willing to make that assertion to the special counsel, Robert Mueller. Cohen also alleges that he was present along with several others when Trump was informed of the Russian's offer by Donald Jr.

By Cohen's account, Trump approved going ahead with the meeting with the Russians. We should note that our sources tell us that Cohen does not have evidence such as audio recordings to corroborate this claim.

And a source familiar with Cohen's House testimony said that he did not testify that Trump had advance knowledge during his appearance on the Hill. Cohen's claims were also not mentioned in separate reports issued by both Republicans and Democrats on the House Intelligence Committee.

We reached out to lawyers representing people involved. Alan Futerfas, an attorney for Donald Trump Jr., he tells CNN that, quote, "Donald Trump Jr. has been professional and responsible throughout the Mueller and congressional investigations. We were very confident of the accuracy and reliability of the information it has been provided by Mr. Trump Jr. and on his behalf," end quote.

We also contacted one of Cohen's attorneys, Lanny Davis. He declined to comment. And on CNN's air, Rudy Giuliani, the president's attorney, he called Michael Cohen's credibility into question. Jim Sciutto, CNN, Washington.

VAUSE: There is a lot to get to. So, joining us now is Democratic strategist, Caroline Heldman, Republican strategist, Luis Alvarado, CNN's legal analyst, Areva Martin. Areva, I'd like to start with you and get straight to the point.

If Michael Cohen is telling the truth, what was, if any, have been broken by the president, by anybody around the president? Keeping in mind that so many people have testified already under oath that he knows nothing about this meeting.

AREVA MARTIN, CNN LEGAL ANALYST: Yes, John. There is a laundry list of things that are problematic with respect to this statement. One let's start with the president's blatant denial that he had any knowledge of this meeting. We heard him say that repeatedly in interviews.

If he did have knowledge as we're now learning from this reporting, it raises the question about whether he was a conspirator in this hacking of this information because the meeting was to give the Trump Organization dirt on Hillary Clinton.

And we now have learned from those 12 Russians who were indicted that they had hacked into the DNC computer and had allegedly some damning information on Hillary Clinton. If that was the reason that that meeting was taking place and Donald Trump knew that that was the reason that meeting was taking place, there's an argument that could be made that he was a co-conspirator.

There's also the issue of campaign violations. You can't accept aid from a foreign government when you are running for president as Donald Trump, the candidate was at that time. Now, that requires knowledge on his part. We know that Trump had denied having this knowledge.

But it brings us so many questions. The credibility here is going to be huge. One thing we know from this reporting is Michael Cohen says that Trump Jr. says this to Trump Sr. in front of other people.

So it's not just Michael Cohen's word against Donald Trump Sr. and Donald Jr. There are apparently other people who maybe able to provide corroboration for this statement we are now hearing from Michael Cohen.

VAUSE: All for the president, either way. The president's lawyer, Rudy Giuliani, he's been quick to deny all of this. He's also attacked Cohen over his credibility. This is what he said.


RUDY GIULIANI, PRESIDENT TRUMP'S ATTORNEY: I don't see how he has any credibility. This is basically if you had a trial and there won't be a trial. Even if he had a trial, you'd say, which party you want to pick? You want to pick the first lie, the second lie, or maybe some new lie. There's nobody that I know that knows that hasn't warned me. That if he's back is up against the wall, he'll lie like crazy because he lied all his life.


VAUSE: All the irony. Cohen may have a credibility problem, but (inaudible) have been made. Many of the lies of the complications he's told him that he is were in the service of protecting Donald Trump. That was his job.

LUIS ALVARADO, REPUBLICAN STRATEGIST: Well, yes, and we have to be able to separate that there is two points of discussion. One is the legal perspective and what is the process of the end result of that investigation and eventually, will there be a process to take Donald Trump down.

The second one is the political aspect and prior to this story, we talked about those servicemen coming back to America. And America has to ask themselves, yes, there were issues and maybe it wasn't clean how he got to power, but now that he is in my power, we're happy there.

Because he is doing things that America needs, bringing back the servicemen, yes, the veteran, I know that's incredibly powerful. You look at the economy and people are happy with the economy and they are willing to forget, and I think the question is where is the balance?

Where they actually that there is some criminal behavior and then the process has to be continued and Americans got to have to decide, do we forgive him for that much or do they not? Remember, at the end of the day, for politics, it's all about the November primary -- I mean, midterm elections and that's what matters for Republicans at this point.

VAUSE: Caroline, how do you answer that as a Democrat?

CAROLINE HELDMAN, ASSOCIATE PROFESSOR OF POLITICS, OCCIDENTAL COLLEGE: Well, I would say that the country will not forgive Donald Trump if Mueller presents evidence of collusion. That's just not going to happen.

[00:10:09] I would hope that, you know, the decline in polling that took place after his meeting with Putin where he essentially sided with Putin over the United States after he hacked our election. The dip that he took there is indicative I think of -- even Republicans being soft on this idea that if he colluded with Russia that is a big problem.

That is a line that I hope that Republicans would actually take action against Trump if indeed that's the case. We have to remember that he's already lied about this particular event, meeting. He said he didn't know anything about it.

He said that initially it was about adoption, or release came out, and then it came to light that the president has actually worked on that in person. So, he's already told a series of lies about this meeting. And so, it would not be surprising to me at all if Cohen is telling the truth.

VAUSE: Luis, when this story broke about a year ago, since then his eldest son, legal team, members of the administration, they've all offered a sort of different version of what may or may not have happened at Trump Tower. It's been sort of evolving overtime.

But there has been this one consistent point. We've counted on at least 15 occasions. They've all come out and said Donald Trump did not know about this meeting.


VAUSE: When you're talking about the court of public opinion, if Cohen is telling the truth, what impact does that have? Surely, that then gets to that very question of credibility and, you know, how can you believe this guy going forward? Does anything he says is actually true?

ALVARADO: Well, the Democrat base is going to be against Donald Trump regardless of what. The Republican base is going with Donald Trump -- Republicans with Trump regardless of what. The question is those independents in the middle and those that can be persuaded or to either get up and show up to vote.

Because they didn't do it in the last election and that's why Donald Trump is president or are they are going to stay home and say, you know what, things are just fine the way they are and maybe we just going to stay home.

MARTIN: We're missing the point here. We are talking about the president of the United States potentially committing very serious crimes. We are talking about people in his orbit potentially committing very serious crimes.

I don't think we should be talking about, you know, whether the base supports Donald Trump no matter what. What about the American people and our right to have a president that is honest, above reproach and that doesn't break the law?

And that's one thing we have to focus on here. This is a stunning revelation from the president, former personal attorney, who is now willing to share information that he has. Obviously, Michael Cohen has his own credibility problems.

But the prosecutors aren't going to just be relying on his statement. They're going to be looking for a plethora of corroborating evidence and there's lots of it. So, I think we got to stay focused on. We are talking about criminal -- potential criminal activity.

VAUSE: Back in 1960, the Russian ambassador in Washington invited the two-time Democratic nominee for president, Adlai Stevenson. She received a message on behalf of (inaudible). This is what that message read in part.

"We don't know how we can help to make relations better and help those to succeed in political life who wish for better relations and more confidence. Could the Soviet press assist Mr. Stevenson to personal success? How? Should the press praise him, and if so, for what? Should it criticize him, and if so, for what?"

I mean, that goes on and on. What Stevenson did, he was rattled. He declined. There are some reports that he went and told Eisenhower about all of this. So, you know, Caroline, there is a president here of how these things should be handled. When the Russians come knocking, you say thank you but no, thank you.

HELDMAN: Right. You don't setup a back channel. You don't actually start to negotiate foreign policy before you're in office. You don't have 82 Trump team connections with the Russians during the campaign and since he got into office.

You simply don't do that, and you definitely don't meet with a murderous dictator who all four central intelligence agencies have found meddled in our election, attacked our elections.

You don't meet with him and then side with him over the American people. So, at the end of the day, this is really about, you know, putting party as the Republicans are doing about our democracy. And that's gulling to many and the criminal charges, yes, but also the ethics of it. This is a man -- Donald Trump lies an average of seven times a day. So, Michael Cohen having tapes, I don't know.

I don't think -- I think the credibility issue is not so much with Cohen but more with Trump.

VAUSE: We go to Robert Mueller, the special counsel, who is now looking at the president's past statements about the fired FBI Director James Comey and also his beleaguered attorney, General Jeff Sessions, (inaudible) Sessions III.

And whether the actions add up to attempts to obstruct the investigation by both intimidating witnesses and pressuring senior law enforcement officials to tamp down their inquiry according to our reporter. Areva, in Watergate, there were the tapes. In our modern era --

MARTIN: The tweets, yes. He uses Twitter to make what essentially would be -- you know, otherwise, presidential statements that may be issued from the White House through the press secretary. This president likes to issue his own statements via Twitter, and his legal team has warned him of the jeopardy that he puts himself in by doing so.

[00:15:10] But, of course, he doesn't listen to anyone because he knows everything. But those statements are fair game for any prosecutor to go through because they are prior statements made by this president.

VAUSE: Well, here's a sample. In July last year, the president tweeted Sessions was, quote, "very weak," and told "The Wall Street Journal" that same day, quote, "I'm very disappointed in Jeff Sessions." You know, Luis, that's just one small -- this is the president who said he won the election on Twitter. Could he be brought down by Twitter?

ALVARADO: He can be brought down by Muller. The question is, while Mueller put the pieces together, will he be able to actually build a case that can be supported by the legal system and without interference by the political activists.

And I think when America sees the pieces, when they actually go and they look at the evidence, then I think will be a clear moment where Republicans or those that are persuadable can make a determination that this is the course that they want this country to go through.


ALVARADO: And that's still unclear.

VAUSE: OK. Well, the counterargument coming from the Trump legal team is that this all couldn't be evidence of obstruction of justice because if you're going to obstruct justice according to Rudy Giuliani, the world's greatest lawyer, you do it quietly and secretly, and not in public. Caroline, that doesn't make any sense because listen to this, surely intimidating someone by public statements like these seems to be a lot more (inaudible). Listen to this.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: Never recuse himself and if he was going to recuse himself, he should have told me before he took the job, and I would have picked somebody else.

I'm very disappointed with the attorney general. The attorney general made a terrible mistake when he did this and recused himself. He made what I consider to be a very terrible mistake for the country.


VAUSE: If you're trying to intimidate someone, doing that publicly from the pulpit of the presidential office, it is pretty intimidating.

HELDMAN: That is as powerful as it gets in terms of intimidation. Ruining somebody's reputation while they are still in that position. But this is a man who actually came out and told on a national news program, said, yes, I fired Comey because of the Russian investigation.

VAUSE: There was that, yes.

HELDMAN: He's already admitted to a form of obstruction, whether or not, you know, Mueller finds that that's enough evidence to press charges against him, I don't know. But it is not surprising that he's doing the same thing with Twitter, tweets, and he's doing it in broad daylight because that is actually where it is the most effective to put pressure on folks.

VAUSE: Impulse control, right?

ALVARADO: He also said I can go on the street of New York and shoot someone. They still going to like me.

VAUSE: He wasn't president then. He was candidate.

HELDMAN: Republicans don't seem fazed by separating children from their parents or collusion or obstruction or, you know, throwing away our democratic principles and norms and tarnishing that institute. The Republicans don't --

VAUSE: We're out of time, 30 seconds.

ALVARADO: At the end of the day, we'll know in November what America truly thinks about this administration. If they keep the Republicans in office then that means that they're fine with it.

VAUSE: OK. The problem with that argument is it was the Republicans who stood up to Nixon in Watergate. They weren't waiting for polls or the results of any election outcomes. Back then they knew what was right. They knew the right thing to do. They were the ones, who told Nixon it was time to go. We don't have a similar situation right now. We'll see you guys next hour. Areva, Luis, and Caroline, thanks so much.

OK. It's still not clear when we'll know the final results in Pakistan's contested election, but the leading candidate, Imran Khan, is no longer waiting. The former cricket star has declared victory and appears set to be the country's next prime minister.

That's despite accusations of blatant vote rigging coming from his rivals. The 65-year-old is seen as the favorite of Pakistan's powerful military. He also led Pakistan to victory at the 1992 Cricket World Cup and that is very important. It says a lot in Pakistan. His highly various skills made him a national hero and international star, and that fueled his rise to power.

We'll take a short break. When we come back, California's governor has declared a state of emergency as out of control fires ravaged the state.

Also, ahead, authorities believe they know what caused a deadly blaze in Greece. The news is not good. The very latest in just a moment.


VAUSE: Welcome back, everybody. To Cambodia now, where up to 25,000 people are being evacuated after a dam collapsed earl this week in neighboring Laos. Flooding from the incredible amount of released water has already killed dozens of people.

Cambodian officials say the water levels have risen 12 meters in some parts and there is no sign it's receding. The prime minister of Laos says it's the country's worst disaster in decades. Thousands are stranded or homeless, and more than 130 people are still missing.

The extreme weather in Greece where a deputy government minister says it looks like the deadly fires that broke out this week were caused by arson. Authorities say the evidence comes from satellite images around ground inspections.

More than 15 fires scorched villages in Southern Greece, killing more than 80 people. The Greek mayor told CNN the threat from the fires was widely underestimated and no evacuation order was given.

Meantime, in the United States, California's governor has declared a state of emergency. Trying to help local communities deal with out of control wildfires. Authorities arrested the man suspected of starting a number of fires, including the biggest one. It's already destroyed buildings and forced thousands to evacuate their homes.

Let's get the very latest now on the wildfires from Cal Fire Battalion Chief Mike Mohler. He joins me now on the line from the state capital of Sacramenta. Mike, we've got a number of large fires burning right now here in California. What are the latest numbers on evacuations and what are firefighters most concerned about at this hour?

MIKE MOHLER, CAL FIRE BATTALION CHIEF (via telephone): Well, unfortunately the current vegetation fire in Chef County and (inaudible) has literally exploded overnight, well over 30,000 acres. Unfortunately, we have some firefighter injuries and we have over a thousand people evacuated.

We see extreme fire behavior. That's the largest fire right now in Northern California. Moving down the Southern California, we have the Cranston fire in Riverside County.

Over 5,000 acres and (inaudible) 5 percent contained. We have multiple structures threatening and also several structures destroyed. Still evacuations. Critical infrastructure also threatening this area including major power grids that could affect the Southern California area.

VAUSE: We also have a situation at the Yosemite National Park, height of tourism season right now. You had to close the park because of the Ferguson fire. What you're looking at thousands of tourists have canceled plans. But what has been the impact of those living around the area of the national park itself?

MOHLER: That's correct. That is the Ferguson fire where Cal Fire made a recommendation through our federal partners to the National Park Service to close Yosemite, not only for the safety of the park goers, but also because of the smoke conditions in that area.

We still have continued mandatory evacuations in Cedar Lodge area and in an area called Savages Trading Post. This fire unfortunately we have a fatality firefighter, Braden Varney, was killed on this fire last Saturday. It's been very difficult.

[00:25:04] We still have a lot of transmission lines that are threatened to that area and again road closures. This one's going to be a very difficult fire fight for the next several days.

VAUSE: Mike, I get the feeling we talked to you way too often. Thanks for being with us. We appreciate it.

Extreme temperatures continue across the northern hemisphere. Record heat waves are sweeping parts of North America, Asia, Africa and Europe. Sad to say it's causing droughts and an unprecedented string of wildfires.

Meteorologist, Derek Van Dam, joins us with more on this. There is this sinking feeling that maybe this is in fact the new normal.

DEREK VAN DAM, AMS METEOROLOGIST: It is becoming an all too common, isn't it, John? Get a load of this. We're talking about 58 days at London's Heathrow Airport with only 1 millimeter or just under 1 millimeter of rainfall. An impressive drought taking place across the U.K. but that's not the only place.

You know, that you can actually see the difference in the vegetation from outer space. This is incredible coming from NASA's satellite. This is a look at Western Europe. There is the United Kingdom. This is in May of this year. Now we fast forward to a couple of days ago, and you can see how the vegetation has turned from green lush forest to brown, extremely dry and very brittle grass landscape across the western parts. It's not just Western Europe. It's extreme Northern Europe across Scandinavia.

You're looking at what is called a surface temperature anomaly. All you need to know is that anywhere you see that dark shade from Norway into Sweden and Finland. That's where temperatures are raging from 5 to upwards of 15 degrees Celsius above average for the first few weeks of July.

Of course, this has sent wildfires on a rampage across parts of Sweden and into Finland as well. When we talk about temperatures, again, 12, 15 degrees above average. On Thursday, in London, Utah, 35 degrees. Certainly, no rain there yesterday.

But things are about to change. This is the good news out of this weather forecast because we have a cold front that's settling in across the U.K. It will drastically cool our temperatures into London.

Look at Saturday's forecast, 23, 21 on Sunday. It's settled in London getting in on some of the cooler weather. We settle that right into Amsterdam and parts of France, and into Belgium.

But with this collusion of air masses, the chances of rainfall, comes with it the potential for severe weather. Keep an eye to the sky today. London, all the way to Paris, flooding rains, large hail, and the potential for severe wind gusts across that particular area.

Here's the cold front moving through. Again, some relief in sight for parts of Scandinavia in terms of the extremely hot temperatures. Hopefully, they can get a handle on some of those wildfires burning out control in Sweden -- John.

VAUSE: Wildfires in Sweden, wow. Derek, thank you.

A record-setting day on Wall Street saw some big winners and also some big losers. Actually, just one big loser, the biggest loser of them all. Coming up, Facebook set a record for the biggest fall in market value ever.

As Amazon celebrates its (inaudible) in profits, some people are wondering why the company can't share a little bit of that wealth with those who do the hard work?


[00:30:00] JOHN VAUSE, CNN INTERNATIONAL ANCHOR: Welcome back, everybody, you're watching CNN NEWSROOM, live from Los Angeles. I'm John Vause with the headlines this hour. North Korea has just handed over 55 cases of what's believed to be remains of U.S. troops, killed, during the Korean War.

It's the first such handover in more than a decade. The ceremony coincided with the 65th Anniversary of the Korean War Armistice. Sources tell CNN that former Trump attorney, Michael Cohen, alleges Donald Trump knew in advance, about the 2016 Trump Tower meeting with Russians who were promising dirt on Hillary Clinton. The President and others have refutably denied that Mr. Trump had any prior knowledge of that meeting.

But Cohen says he was present when the candidate, Trump, was told about the upcoming meeting by his son, Don Junior.

Imran Khan is declaring victory in Pakistan's disputed general election. His party is leading in early results but the vote is still being counted. It's been slowed by technical issues. The former cricket star is seen as being the favorite of the military. And his opponents have alleged the vote was rigged.

And (INAUDIBLE) says satellite images and ground inspections indicate arson was involved in this week's deadly wildfires. More than 15 fires broke out in southern Greece, killing more than 80 people. The government spokesman says it was an unprecedented challenge to firefighters.

Facebook is making Wall Street history with the biggest stock market wipe out of all-time. The social media not-so-giant, lost nearly 120 billion in value on Tuesday, as shares plummeted 19 percent. It's the biggest single-day loss for any public company, ever.

Founder Mark Zuckerberg, well, he's down abo $16 billion. Investors aren't happy that Facebook predicts revenue growth will slow as it focuses more changes and resources on privacy issues.

The company is trying to rebuild public trust after being a platform for Russian interference in the 2016 U.S. Presidential election and because (INAUDIBLE) data firm Cambridge Analytica managed to get access to information on 87 million Facebook users without their knowledge or their permission.

OK, a lot to talk about. Scott Perry is here, the founder of L.A. Tech Digest and author of Snapchat 101. OK, when a plane crashes, usually it's a combination of factors which are to be blamed for what went wrong. Can the same be said of what happened to Facebook and its stock, falling off a cliff?

SCOTT PERRY, AUTHOR, SNAPCHAT 101: It was pretty bad but you have to understand, this is just an aberration from the mean, because before the scandal happened, the stock was at $180 and then it went down to 150, after 218, back down to 180. So, it's the same price it was back in February.

VAUSE: Right.

PERRY: It's a phenomenal loss, but, the reason for its downward spiral from 180 to 150 was spear-based because of any repercussions of Cambridge Analytica and all the legislation, all the questioning that went around that.

VAUSE: Right. PERRY: But when they realized that, you know, Zuckerberg and company were in the clear, the stock shot straight up and beyond 180. So, for it to come back down to this level, it looks bad, but they're just right back where they were, back in February.

VAUSE: OK, because on that earnings call -- this (INAUDIBLE) everyone is saying oh, there's slowing numbers and there is, you know, decline in new users and, you know, the revenue and they're going to spend a lot more money on, you know, trying to protect user privacy and that kind of stuff, which is all good in some respects.

But then on the earnings call, it's like you said, growth which slowed from hyper growth to high growth, which doesn't seem to be that bad. Second quarter revenue was up 42 percent, $13 billion. Then, it come up 31 percent to more than $5.1 billion, global monthly active users at 11 percent year-over-year, almost two and a quarter billion. These are still incredibly good results.

PERRY: They are. They are. But yes, expenses will go up. And we've yet to see exactly what's going to happen right now because Facebook is being investigated by the SCC, the FTC, the DOJ, and the FBI. And that's just in America.

VAUSE: Right.

PERRY: So --

VAUSE: And that's this week.

PERRY: Exactly. It's been the past month for that.

VAUSE: Right.

PERRY: But yes, I mean, they still have an amazing mousetrap when it comes to advertising revenue. I mean, interest-based ad targeting on Facebook, is phenomenal. On Instagram, it's phenomenal. When they have -- when a lot more triggers come in like visual-based purchases on Instagram stories, it's going to be a great driver.

But it's not big enough to offset any losses or any like slowdown in revenue or the expenses coming up for the privacy and other initiatives like Facebook watch and other T.V.-type initiatives.

[00:35:03] VAUSE: You mentioned Cambridge Analytica. If that scandal never happened, where we have seen this stock selloff happened at all because one of the big factors here seems to be, at least, in some parts, there are questions over this business model and cannot survive when --

You know, basically, mining people's personal data, bundling up and selling it off at advertisers. So many people are worried about their privacy and what's been happening at Facebook.

PERRY: They can survive this. The biggest thing is, though, they still haven't come forward clear on exactly how bad things were with Cambridge Analytica and anybody else surrounding that period. Now, moving forward, they cannot do anything about it.

So, security is paramount to their future and they fully recognized that in respect to moving forward to it. But, you did notice that, like, the user numbers, not just the growth but the user numbers in Europe, were down. And that's a direct result of all the noise around GDPR in the past couple of months.

VAUSE: So, what you're saying to be existence, not the day of reckoning that everyone thought was coming for Facebook.

PERRY: It's not. I mean, if you own the stock, whether it's in a mutual fund or --




PERRY: No. I mean, it's still priced earnings ratio of 19, so it's high, I mean, not like, you know, Amazon is on high, but it's still high.


PERRY: And they still have a lot of challenges ahead in clearing up this past mess and moving forward with security and making a safe place for people to be and enjoy each other's company.

VAUSE: Earlier this year, Facebook's highest ranking security official sent out a memo to colleagues just before he left the company. And this is on the day after the Cambridge Analytica scandal. Here's part of that note, it's from Alex Stamos, by way of BuzzFeed.

We need to deprioritize short term growth and revenue and to explain to Wall Street why that is OK. We need to be willing to pick sides when there are clear moral or humanitarian issues and we need to be open, honest and transparent about out challenges and what we are doing to fix them.

Is that essentially what's happening right now?

PERRY: Yes, exactly. I mean, on the earnings call, they're talking about expenses related to privacy and security are going to go up, hiring more people to monitor things, are going up, investing in more artificial intelligence to block bad news, is going to go up, you know.

So, and in working with companies like yours to have, like, news programs on their platform, to comeback at, to show real news versus the fake news being spread person to person, friend to friend, meme to meme, is a good thing.

VAUSE: Implications relative companies like Twitter and Google here?

PERRY: Everybody's got to clear up their stuff. I mean, Twitter is like, knocked off millions of users.

VAUSE: Yes, always.

PERRY: Oh, yes. And it's great because like advertisers, like that, because they know that they're not spending money on fake followers.

VAUSE: Right.

PERRY: So, it's actually made it more healthy, so, you get -- you do get a better return on your investment on a -- on a (INAUDIBLE) thousand basis for what you're doing with those platforms. But yes, there's going to be a lot of scrutiny for all the platforms and how they handle the spread of fake news, as well as, like, on boarding fake users.

VAUSE: OK. Come back next hour because (INAUDIBLE) Amazon now, but we're going to talk a lot more about Amazon, next hour. And we would like you to be with us. So, thank you.

PERRY: Great. Thank you, thank you.

VAUSE: Amazon's fortune is soaring to new heights. On Thursday, the company reported a quarterly profit of $2-1/2 billion, crossing the $2 billion mark for the first time in its history. It's all paying the pockets of the world's richest man, Amazon founder and CEO, Jeff Bezos.

That open the doors for some employees and critics say it's time for the company to raise wages for its lowest level employees like those who are in the warehouse. The company says its pays market rates. That's usually the (INAUDIBLE)

Coming up here, she's back, and this time, Omarosa says she's ready to diss the dirt on the White House. The Israeli star and one-time Trump adviser is about to tell-all but, really, who's going to listen to any of it?




[00:40:00] VAUSE: Demi Lovato will seek drug abuse treatment. According to a source close to the singer, Lovato was admitted to hospital after apparent overdose and is expected to be released soon. Lovato entered rehab back in 2010. She's had an on-going struggle with substance abuse, as well as, mental health.

The last time most of us saw Omarosa Manigault, she was getting the Bye, Felicia treatment. But, she is now back. The former Trump adviser and reality T.V. star, is promising to spill all kinds of stuff on the White House in her new book, it's called, Unhinged. But, will anybody actually buy what she's selling? Here's Jeanne Moos.

(BEGIN VIDEOTAPE) JEANNE MOOS, CNN NATIONAL CORRESPONDENT: No more nodding at the President's words, no more smiling alongside him, Omarosa, is on the attack with, Unhinged. When she left the White House, she warned us.

OMAROSA MANIGAULT, FORMER TRUMP ADVISER: It is a profound story that I know the world will want to hear.

MOOS: Profound wasn't how the publisher described it, stunning tell- all and takedown, explosive, jaw-dropping.

UNIDENTIFIED FEMALE: She said she has a story to tell and I'm sure she'll be selling that story.


UNIDENTIFIED FEMALE: Yes, she will. Bye, Felicia.

MOOS: She sold it for under a million dollars. A source tells CNN, as for the title, it's a word Omarosa once used about a fellow contestant.

MANIGAULT: Sean is losing it. You know, she's just completely unhinged.

MOOS: Unhinged may be aimed at the Trump White House, but as one tweet put it, full props for the title for her autobiography. Online commenters competed to convey the degree which they couldn't care less.

I can't wait to not read this.

I will be first in line to not buy this book.

You lost me at Omarosa.

But it wasn't lost on Omarosa, that teasing out nuggets about her White House experience on Celebrity Big Brother could steal interests.

MANIGAULT: Like I was haunted by tweets every single day. It's going to not be OK. It's not.



I feel like I just got freed off from a plantation.


MANIGAULT: Halleluiah.

MOOS: Unfortunately, we don't have any advance exerts from Omarosa's book, but one commenter imagined this sneak peek.

Me, me, me, me again, more me. MOOS: Remember Omarosa's immortal words?

MANIGAULT: Every detractor will have to bow down to President Trump.

MOOS: Should may have to bow a lot after Unhinged is unveiled next month. Though, the President seems proud when his detractors hang unhinged on him.


MOOS: Jeanne Moos, CNN.

UNIDENTIFIED FEMALE: Nobody kicks Omarosa out the White House.

MOOS: New York.

VAUSE: Thank you for watching CNN NEWSROOM, live from Los Angeles, I'm John Vause. Please stay with us. "WORLD SPORT" is up next. You're watching CNN.