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Giuliani Pressed Secretary of State to Help Client; 60,000 Displaced as Turkey Attacks Syria; Associates of Rudy Giuliani Arrested. Aired 3-3:30p ET

Aired October 10, 2019 - 15:00   ET

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

[15:00:01]

BROOKE BALDWIN, CNN HOST: Their names are Igor Fruman and Lev Parnas.

And they were arrested at a Washington airport with what prosecutors say were one-way tickets out of the country, one of the men described as Giuliani's fixer and someone who helped introduce him to various officials in his bid to dig up dirt on Joe Biden.

And listen to this. Just hours before the two arrests, these two men had lunch with Rudy Giuliani in Washington at the Trump Hotel. That is according to "The Wall Street Journal."

Moments ago, the U.S. attorney for the Southern District of New York detailed the charges against these two men and their intended target, former U.S. Ambassador to Ukraine Marie Yovanovitch.

(BEGIN VIDEO CLIP)

GEOFFREY BERMAN, U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: As alleged in the indictment, the defendants broke a law to gain political influence, while avoiding disclosure of who was actually making the donations and where the money was coming from.

They sought political influence not only to advance their own financial interests, but to advance the political interests of at least one foreign official, a Ukrainian government official who sought the dismissal of the U.S. ambassador to Ukraine.

(END VIDEO CLIP)

BALDWIN: And here's how the feds say Fruman and Parnas did it.

They allegedly took hundreds of thousands of dollars from a Ukrainian government official. They then funneled this chunk of change through an LLC they set up to hide the fact that they were behind the money. The funds went to a pro-Trump super PAC and to former Texas Republican Congressman Pete Sessions, who recruited to help Fruman and Parnas oust that Ambassador Yovanovitch.

Sessions wasn't named in the indictment, but CNN has identified him based upon campaign finance records, as well as his own previous remarks. So, let's just start there.

CNN crime and justice reporter Shimon Prokupecz is outside that courthouse in Lower Manhattan.

And I understand you just learned where these two gentlemen were headed.

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: Yes.

And I have to tell you, Brooke, it is what spooked the FBI and what made them move in to arrest these two. They were headed to Frankfurt, Germany. Their final destination is unknown. Officials are not revealing that.

But, certainly, the idea that they bought these one-way tickets, it was a sudden purchase, as you said, they had lunch with Rudy Giuliani just yesterday. It's not entirely clear when the tickets were purchased, but it was a recent purchase.

The FBI, being alerted to that, moved in and made the arrests at Dulles Airport. They had already presented -- the Southern District of New York had presented some of the charges to a grand jury here, but, according to the court filings, they had not voted on those charges.

And why that's significant is because it's very clear, based on what we saw here today, a very hastily put-together press conference by the U.S. attorney here, who did not take any questions, they were not ready to make this case public. They were not ready to make the charges here public.

But they did so because these men were about to flee and there was concerned that they would not be able to get them back. So what this tells us, certainly, is that this investigation is very much still under way, still ongoing.

And, of course, for officials, really, the concern here is the foreign influence, right? You talk about the money, but, more importantly, it's their access, the access that they had to individuals, in some ways, you can argue, even their access to the president through Rudy Giuliani.

They had Rudy Giuliani's ear. He had the president's ear. That is very significant in all of this. And it is something certainly that the FBI officials and U.S. officials have been concerned about for some time.

BALDWIN: Yes. No, this is all a big deal, Shimon with that new nugget.

I also have Aruna Viswanatha on the phone, the "Wall Street Journal" reporter who broke the story on this Giuliani lunch.

So, Aruna, tell me more about -- tell me more about the lunch. ARUNA VISWANATHA, "THE WALL STREET JOURNAL": So, we don't know a

whole lot more about the lunch itself, but I can tell you another bit of information that is just about to go into our story.

BALDWIN: Yes.

VISWANATHA: That in an interview with us just a little while ago, Mr. Giuliani told us that both of the men were on their way to Vienna for a business trip and that they had been back and forth to Vienna multiple times over the past few months.

And he wouldn't elaborate on just what that business was, but that that is where they were headed.

BALDWIN: And what was their relationship with Rudy Giuliani?

VISWANATHA: They are -- they have been associates for the past year, working with Mr. Giuliani to introduce him to various people in Ukraine that could help him on his quest to find information about Joe Biden or Hunter Biden.

And they seemed to be integrally involved in his effort to solicit this information in Ukraine.

BALDWIN: Got it, Aruna with the scoop.

[15:05:00]

Aruna Viswanatha, thank you very much.

Let's digest all of this.

CNN political analyst Rachael Bade is a congressional reporter for "The Washington Post." Harry Litman is a former deputy assistant attorney general and former U.S. attorney. And Richard Painter served as White House ethics lawyer for President George W. Bush.

So, welcome to all of you.

And, Richard Painter, you first, sir.

Let's just -- let's just start with this new nugget, that these three, and who knows if others were with them, had this lunch at Trump Hotel in Washington, D.C., hours before they were caught at Dulles heading out of the country, and the fact that they did this broad daylight. What do you make of it?

RICHARD PAINTER, FORMER ASSOCIATE WHITE HOUSE COUNSEL: Well, this is an arrest that may be the most politically damaging arrest for an American president since the arrest of the Watergate burglars.

And like the arrest of the Watergate burglars, this is only the beginning. These men are going to be questioned. They're going to provide evidence, presumably, on what other people did, what Rudy Giuliani knew, what the president of the United States may have known, not only about this criminal scheme that is charged in the indictment, but other criminal schemes as well, including the effort to enlist the Ukraine government officials in the effort to smear Joe Biden, get opposition research, in violation American campaign finance law.

And worse yet, the extortion effort aimed at the Ukraine, soliciting a bribe, where the president of the United States is saying, I will give you official U.S. government aid in return for aid to my political campaign in terms of the dirt on Joe Biden.

So this is only the beginning of an investigation that needs to happen very, very quickly, because the House of Representatives is very, very likely to be impeaching President Trump in the near future.

We would have a trial in the Senate and this evidence could be central to that trial.

BALDWIN: And in this investigation, Harry, to you, if these two men, if they do flip on Rudy Giuliani, how significant would that be? What kind of information could prosecutors glean?

HARRY LITMAN, FORMER U.S. ATTORNEY: Quite a lot, because they're charged in this campaign finance scheme. But they're obviously consorting with him on the ground, trying to remove the ambassador and otherwise serve Trump's goal of having Ukraine get dirt on Biden.

The thing you showed up front, Brooke, with the graph and map, you can be sure there's something just like that, but much more complicated in the SDNY.

BALDWIN: Yes.

LITMAN: And it's a sprawling spider's web. Not a doubt in the world that Rudy Giuliani is on it.

The question is, does it now connect to Trump himself? We know, by the way, it's not simply that they knew him through Giuliani. They know him personally. They dined with him. They met with Trump Jr. It's beginning to feel sort of like deja vu all over again with what happened with the Russians in July of 2016.

So we don't know for certain, but it could be a very sprawling, interconnected web. And the SDNY could be already many steps down the road in reconstructing it.

BALDWIN: And then, just a couple more questions on the legal bit.

So, Rachael, hang with me just a second.

But, Richard, back over to you.

Gabe Sherman, journalist Gabriel Sherman, said that he had talked to Rudy Giuliani just this morning, and this is what the president's attorney told him -- and I quote -- "When I asked Rudy about the prospect of the FBI flipping Parnas and Fruman to get to him, he replied, "Good luck."

So, he's sounding pretty confident there. But it sounds to me, based upon what you have said, that he should be worried.

PAINTER: Well, I don't know whether they will flip. I'm sure they're going to be threatened and told, if they ever go back to Ukraine, anywhere near Ukraine, somebody will retaliate against them if they flip.

And they may be retaliated against in the United States. So we may have a situation where these witnesses are being threatened. And that may very well be the implication of what Rudy Giuliani is saying. We don't know what's going to happen here.

It is a very dangerous situation. We have the president, the president's lawyer talking like mobsters, intimidating witnesses. We have arrests of very close associates of the president in other cases and now Rudy Giuliani for criminal activity.

This is a situation that is going to result in the impeachment of the president and trial in the Senate. We will see what the evidence is.

(CROSSTALK)

LITMAN: One quick point, Brooke.

BALDWIN: Go ahead, Harry. Go ahead.

LITMAN: Just -- yes.

Their attorney -- John Dowd, who you have heard before, is now representing them. They're going to...

(CROSSTALK)

BALDWIN: What's old is new again, yes.

LITMAN: Yes. Yes, they're going to try to first make a really tenuous attorney-client privilege argument to keep them from talking at all.

[15:10:05]

But when that fails, as it probably will, then we will be talking about actually putting the lean on them.

BALDWIN: Got it.

Rachael, this morning, the Democrats over on the House side, we know that they subpoenaed Parnas and Fruman as part of this whole impeachment inquiry. How will that play into the bigger picture on Capitol Hill?

RACHAEL BADE, CNN POLITICAL ANALYST: I think that's the open question at this point.

I think the interesting thing about this indictment or these indictments is, how is this going to sort of affect the House impeachment inquiry that is ongoing right now? Obviously, these two individuals were people that House Democrats wanted to hear from and get their documents.

And now this is caught up in a criminal case that could drag out for months and weeks. And House Democrats have said they want to move quickly on their investigation. They were talking about, hopefully, in their own words, they wanted to deal with impeachment before the holiday season.

Now, this criminal case could very much drag that out. And I am curious to see how it affects the House impeachment.

I would also say that this is kind of like, what's that game, dominoes or Jenga, where you move the...

(CROSSTALK)

BALDWIN: Pull one out and everything's like...

BADE: Yes.

And these two individuals, in particular, remember, these are the ones these are the gentleman who put Giuliani in touch with former prosecutors in Ukraine who had been ousted because they were sort of seen as corrupt. These are the same people that sort of whispered in his ear these allegations that there could be some dirt on Biden and on Hunter Biden.

They were at the origin of this whole Trump world sort of counternarrative when it came to attacking Biden and saying that there was something damaging against him in Ukraine. So the fact that these two folks are now being arrested and accused of breaking American laws, that really puts a whole damper on this whole Ukraine counternarrative that the Trump world has been talking about.

BALDWIN: Yes. No, we heard Richard say off the top this could be as huge as the Watergate burglar arrest.

Stand by. I want to hold you over a break, all three of you, please, because I want to ask you about these other details today on an entirely different scandal involving Rudy Giuliani and how he once used an Oval Office meeting to pressure then Secretary of State Rex Tillerson to help one of his clients.

Plus, more than 60,000 people have already been displaced, as Turkey attacks the Kurdish region in Northern Syria, as President Trump gives a bizarre reasoning for why he turned his back on this key U.S. ally.

Meantime, there are new reports today that the president has been scrambling behind the scenes just to hang on to support with members of his own party. Details on what's happening at the White House.

You're watching CNN. I'm Brooke Baldwin. We will be right back.

(COMMERCIAL BREAK)

[15:17:37]

BALDWIN: We're back. You're watching CNN. I'm Brooke Baldwin.

Another breaking story we're following for you today involving President Trump's personal lawyer Rudy Giuliani. CNN is learning that, in 2017, Giuliani used an Oval Office meeting to press then Secretary of State Rex Tillerson to support a prisoner swap involving one of Giuliani's Turkish clients.

Tillerson reportedly refused to do this.

CNN senior justice correspondent Evan Perez with me now.

And so tell me about this conversation and what exactly happened.

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Brooke, it is an extraordinary conversation.

Think about this. You're Rex Tillerson. You're the secretary of state. You're called into the Oval Office to meet the president. You walk in, and there is Rudy Giuliani, the president's personal lawyer, as well as Michael Mukasey, the former attorney general.

And the president invites them to make a pitch to you, the secretary of state. And the pitch is this. Rudy says that he would like to arrange for a prisoner swap.

Reza Zarrab was a Turkish businessman who was facing trial, charges of violating U.S. sanctions on Iran's nuclear program. He was facing charges in New York, and Rudy's client -- he was now Rudy's client. And what he wanted to do was a prisoner swap with Turkey in order to -- for the Turks to release an American pastor who was being held at the time there.

And so that was the pitch. Tillerson said, we can't do that. This is something that's already in a criminal proceeding. And not to mention the precedent that will be set, right, the idea that we put Americans in danger, the fact that they could be held hostage in order to do prisoner swaps.

So Tillerson refused to do it. The president said, could Jeff Sessions do this? And the same answer. So, in the end, what the president said was for the two men to essentially try to work it out. In the end, that prisoner swap did not happen.

BALDWIN: I got you. It didn't. We're going to talk about the law and procedures here with these lawyers.

Evan, thank you so much for the reporting.

Harry Litman, out of the gate to you.

Just so we're all crystal clear, this ask to Rex Tillerson from the president would have been 1000 percent illegal, yes?

LITMAN: One thousand percent improper, inappropriate.

And we know Tillerson said before that the president asked him to do illegal things. So it would have depended on the motive, but it sure seems like a like a personal motive, rather than an actual motive of state.

[15:20:08]

It seems like we have -- it's all dizzying. There's a foreign policy here being run for Putin, Erdogan, and Rudy Giuliani, as best we can tell. It's 1000 percent wrong.

And, obviously, Trump knows that because he's doing his -- the same that he did with Lewandowski of trying to get Tillerson to do the dirty work, rather than the DOJ.

BALDWIN: And, again, the former secretary of state reportedly refuse this request.

But, Rachael, this is going to be for you. Just you can't help but think of this interview with him from December. Watch this.

(BEGIN VIDEO CLIP)

REX TILLERSON, FORMER U.S. SECRETARY OF STATE: When the president would say, well, here's what I want to do, and here's how I want to do it, and I'd have to say to him, well, Mr. President, I understand what you want to do, but you can't do it that way. It violates the law. It violates treaty.

(LAUGHTER)

TILLERSON: He got really frustrated. I didn't know how to conduct my affairs with him any other way than in a very straightforward fashion.

And I think he grew tired of me being the guy every day that told him, you can't do that.

(END VIDEO CLIP)

BALDWIN: Just noteworthy.

And then, to be clear, we don't know if this request was Trump or Giuliani sort of just testing, right, testing the waters to see how far they could maybe push the secretary. This is just what we know about.

But isn't it notable that -- all the times we have heard the excuse the president is a novice, he hasn't been in politics, he hasn't had the experience. I mean, even Tillerson was a businessman, right? And even he knew that that was wrong, Rachael.

BADE: Yes, it sort of reminds us back of the Mueller report. There were multiple instances where the president asked aides to do things that they thought were frankly illegal, and they just ended up not doing them.

And so that's what you have in the situation with Tillerson. I think with Tillerson it's particularly interesting, because he left not on a good note with the president, as you saw him openly talking about the president wanting him to break the law in that interview.

It will be interesting to see if House Democrats decide to investigate this. And I say that because they actually had some success getting Tillerson to come to the Hill a few months ago and give a private deposition a bunch of things from his time at the State Department. So he has been a willing participant in investigations for Democrats before.

And Democrats have said they want the impeachment inquiry to focus specifically on Ukraine, but I just got off the phone with one of them who said he wants this to be part of the impeachment inquiry as well, because it also, in their view, sees this as sort of falling in the abuse of power allegations that they're investigating.

BALDWIN: Wow.

BADE: So I think that will be something to watch in the coming days. It's certainly going to be part of the Democratic discussions in the next couple of weeks.

BALDWIN: So, then, are you saying might we see a return trip for Rex Tillerson to answer more questions in a very different inquiry?

BADE: I don't see how they don't go to him and ask about this. I mean, Jim Himes, I was just on the phone with him. He's on the Intelligence Committee. He's a Democrat from Connecticut, very in the mix on these investigations.

I mean, he wants to hear from him. So we will just have to see, is that a separate investigation from whatever impeachment inquiry they're doing specifically on Ukraine? Or do they end up expanding it to include something like these allegations we're seeing here today?

BALDWIN: OK.

And then lastly, Richard Painter, back over to you.

Circumventing official government channels, sweeping aside procedures, should this be part of the articles of impeachment?

PAINTER: Well, what we see here is illegal conduct by -- or an attempt at illegal conduct by Rudy Giuliani.

We don't know exactly what the president's role is. But the president seems to be encouraging this. We could include this in articles in impeachment.

But I have say, there already are so many examples of corruption on the part of this president, obstruction of justice and other criminal conduct, that we can investigate everything that's corrupt in this administration.

If the House Democrats choose to do that without impeaching, they will be investigating him in his second term going into 2024. So it is going to be important, at a certain point in the next month or two, to vote out articles of impeachment. They need to vote out articles of impeachment and have a trial in the Senate.

We can't just keep investigating and have that House subpoenas ignored by this president. That ought to be another article of impeachment, obstruction of Congress.

But it's getting worse and worse. And they do need to vote out articles of impeachment and send this to the Senate. And I wouldn't be surprised to see the Senate Republicans abandon President Trump.

It's getting so bad, they may very well decide they'd be better off with Mike Pence in the White House for the last year of this presidency and running someone other than Trump in 2020.

This is just a complete debacle for the Republican Party, this amount of corruption. And Rudy Giuliani is just part of a very, very bad situation.

[15:25:08]

BALDWIN: Wow.

I appreciate the conversation.

And on that final point, we will save that for another day, because I want to follow up on that.

Richard and Harry and Rachael, thank you all so much for all of your time today.

LITMAN: Thanks, Brooke.

BALDWIN: This morning, Republican Senator Lamar Alexander went on the record saying Trump's call with the Ukrainian president was inappropriate, this as we learn President Trump is threatening to ramp up attacks on any Republican who criticizes him.

Details on the scramble at the White House to shore up Republican support.

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