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Key Testimony Expected From Former U.S. Ambassador To Ukraine; Ambassador Sondland Intends To Testify Next Week Under Subpoena; Men Tied To Giuliani's Ukraine Efforts Arrested Trying To Leave U.S.; Trump Loses Appeal To Stop House Subpoena Of His Tax Documents. Aired 10-10:30a ET

Aired October 11, 2019 - 10:00   ET

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

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JIM SCIUTTO, CNN NEWSROOM: A very good Friday morning to you. I'm Jim Sciutto.

POPPY HARLOW, CNN NEWSROOM: And I'm Poppy Harlow.

At any minute, former ambassador to Ukraine Marie Yovanovitch is expected to arrive on Capitol Hill. She's set to testify behind closed doors to Congress as part of this impeachment inquiry. She is a highly respected career diplomat who was forced out of her post in Ukraine early by the Trump Administration. And then in his now infamous call to the Ukrainian president, President Trump called her bad news. She has been the target subsequently of unfounded attacks by Rudy Giuliani and conservative allies as having an anti-Trump bias.

SCIUTTO: Those are live pictures on the entrance to Capitol Hill. When we see her come in there, if she does, of course, we'll bring you that news.

We're also following new developments about the president's personal lawyer and his two close associates who were arrested, holding one-way tickets out of the country. The two Soviet-born men seen in the picture there smiling with the president's lawyer, Rudy Giuliani, arrested just before boarding a plane to Europe. They were indicted on charges of illegally funneling foreign money into donations for Republican campaigns. The two are also key figures in Giuliani's efforts to dig up dirt on President Trump's political rival, Joe Biden.

President Trump says he doesn't know the two men, but there are pictures like this one.

Joining us now is CNN's Manu Raju live from Capitol Hill. Manu, is there doubt about the ambassador's arrival for this testimony? She was meant to be there some time ago.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, yes, this was supposed to start at 10:00 A.M. It's possible she could be in the room. We're standing by waiting for her arrival. So she could be coming exactly around this corner. They are waiting for her to come. But this is a facility in which there are multiple entrances to arrive and certainly could come out of public view, and that's very possible that that's where she came.

Now, members who did arrive this morning were very confident that she was ultimately going to testify and aides and the members from both sides have been preparing for her testimony today and it's been highly anticipated, of course.

The president had criticized her in that rough transcript that was released by the White House in his conversation with President Zelensky of Ukraine. Also Rudy Giuliani was part of an effort to go after the former Ukrainian ambassador, as well as those two associates who were arrested yesterday. They even were in engaged in an effort with a congressman, the former congressman, Pete Sessions, to try to go after the Ukrainian ambassador, believing that she should be removed from that post.

All of those questions are bound to come up in this day-long -- probably day-long testimony behind closed doors as part of this impeachment inquiry. So the question all along has been whether she does, in fact, appear, because while she is the Ukrainian ambassador who was removed by the president earlier this spring, she still is a State Department employee. And we've seen the Trump administration move to prevent anybody from testifying because of their belief that this is an invalid impeachment inquiry.

So nevertheless, there has been an expectation that she will appear. The question is has she appeared and will she walk around this corner at the moment. We believe that she might even be in there at the moment answering questions so we'll have to see when the members emerge, guys.

HARLOW: Before you go, Manu, as we keep an eye out for her here, what has changed overnight is that the E.U. ambassador, Sondland, who did not show up earlier this week, is going to show up by subpoena to testify on Thursday.

RAJU: Yes, and that's a key development because Gordon Sondland did not appear earlier this week because the State Department had intervened and prevent him from coming forward. The White House told him not to comply. But after getting the subpoena, he is now signaling that he does intend to come next Thursday.

Now, the question is whether or not the State Department will take any additional effort to prevent him from coming. We were told by a source close to Mr. Sondland that he had not yet conferred with the State Department about that subpoena and his attorney issued a statement saying that the documents that will be provided over to the committee will ultimately be decided whether the State Department will decide whether or not to turn over those documents.

So still a question about whether that happens. But all intentions at that moment that that key witness could also come forward next week. Guys?

HARLOW: Okay. Manu, thank you very much. Let us know if you do see the ambassador arrive.

Before they were accused of funneling foreign money into Republican campaign coffers, the two Soviet-born men met the president, his son. And just hours before they were arrested trying to leave the country, they had lunch with the president's personal attorney, Rudy Giuliani.

[10:05:00]

SCIUTTO: Yes. You could be forgiven for imagining a lot of the details of this story came out of a spy novel. The president's response to their arrest, I don't know them, ask Rudy. Now, Senator Chuck Schumer wants to ask Rudy under oath.

Let's go to CNN Justice Correspondent Jessica Schneider live from Washington here. One interesting part of this case, Jessica, is that the attorney general, Trump's appointee, Bill Barr, he endorsed these charges, did he not?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Right, and he's been apprised of this investigation for a while now. He had a meeting in the Southern District of New York just this week, so he knew what was going on. So, yes, the Trump Justice Department behind the charges for these two associates of Rudy Giuliani.

So that means the questions now around Rudy Giuliani are only building and the calls for Giuliani's testimony, especially by Chuck Schumer, as you've mentioned, it's grown louder since this dramatic arrest of Giuliani's two associates, so Lev Parnas and Igor Fruman.

They could be really key in this impeachment investigation aside from this indictment especially since Rudy Giuliani has said these two men helped him dig up dirt on Joe Biden in Ukraine and that they introduced Giuliani to current and former Ukrainian officials.

Plus, this criminal indictment alleges that they asked a former U.S. congressman, who we know to be Republican Pete sessions of Texas, they asked him for help to getting Marie Yovanovitch fired, which, of course, she eventually was.

So Giuliani has talked about this. He's admitted this relationship with these two men and he even said that he was planning to fly to Vienna, Austria last night. That's the same city where his two associates were headed with one-way tickets before federal prosecutors in New York got wind to these plans and then FBI moved in to Dulles Airport on Wednesday night to make the arrest.

So they're charged with funneling foreign money into U.S. elections, donating hundreds of thousands of dollars to a Trump-aligned Super PAC. And they're also charged with coordinating with a Russian national who funneled money to them that they then put towards state political campaigns.

So there's a lot swirling here, Jim and Poppy, especially aside from the indictment itself. Now, questions, how they really factor into the Ukraine impeachment inquiry here and how Rudy Giuliani fits in as well. Guys? SCIUTTO: Yes. Talk to law enforcement when folks buy one-way tickets out of the country --

HARLOW: But they're generally not coming back.

SCIUTTO: They're generally not coming back. Jessica Schneider, thanks very much.

Let's discuss now with Jack Quinn, he's a former White House Counsel under President Clinton, and Anita Kumar, she is White House Correspondent and Associate Editor for Politico.

Jack, you've been around Washington for a long time. I mean, the details of this case are so brazen as to make your jaw drop. Foreign money directly to U.S. candidates in state and local elections, including a sitting U.S. congressman who was asked to do a favor, it seems, for the president to help remove this ambassador to Ukraine that's about to testify on the Hill. I mean, tell us what legal jeopardy these guys are in but also Rudy Giuliani.

JACK QUINN, CNN LEGAL ANALYST: Well, I mean, the guys who were indicted are in pretty clear legal jeopardy. They have been making and otherwise facilitating foreign contributions which are illegal under U.S. law to at least one member of Congress. We don't know how far beyond that it goes.

But, look, I mean, there are a lot of things upside down here. I mean, this story which is unfolding is different from Watergate in that we start with the president confessing, right? So President Trump has made clear that he did link, you know, the release of military aid to Ukraine to their doing a favor for him in the nature of moving forward on this investigation of Joe Biden.

Now, stepping back in time, that investigation was one which Ukrainian prosecutors had said and told anybody who would listen was baseless. And so it was resisted by the professionals in Ukraine. It was also, I assume, resisted by Ambassador Yovanovitch who -- that is what got her fired. I mean, she got wind of this.

And so with the help of Congressman Sessions, they managed to get her taken out of the Ukraine post and, you know, essentially setup a rogue operation with Rudy Giuliani at the head of it. And he was running U.S. foreign policy with respect to Ukraine.

I mean, the whole thing is really troubling. It's more than troubling. What you've got here is something that violates one of the cardinal presets that the founders included in our Constitution to, you know, make sure that we didn't have foreign interference in the U.S. government.

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SCIUTTO: Yes.

HARLOW: Anita, let's assume the best, okay? Let's be glass half full optimist this Friday. And the best case scenario here for Rudy Giuliani is that -- this is terrible optics, this is really bad optics, right? Even if that's the case, how much longer do you think it is politically tenable for him to be by the president's side?

ANITA KUMAR, WHITE HOUSE CORRESPONDENT AND ASSOCIATED EDITOR, POLITICO: It's interesting because when you talk to Rudy Giuliani, he says he's staying by the president's side. But I think you've seen a couple of signs maybe team Trump is tiring of him a little bit. And this was even before these arrests. There were a lot of people saying before the arrests that they did not like Rudy Giuliani's appearances on T.V. And, you know, he had sometimes some erratic contradictory T.V. appearances.

So they already were tiring of him. But we've seen a couple of signs. We saw both the president saying that he wanted to get Trey Gowdy to come onto his team. Now, there's some disagreement on whether he can do that. He can't influence Congress before January because of lobby rules but he can appear on T.V., he can talk for the president, he can be a surrogate.

We also saw that, yesterday, I was there when the president departed for his rally and he was asked about these two gentlemen and he said, go ask about Rudy. It was sort of a flip comment that I kind of took as, you know, he needs to be talking to Rudy Giuliani. So we've seen a couple of signs there, yes.

SCIUTTO: And based on precedent when the president starts to establish a distance like that, it often is not a good sign for whoever the target (ph) of that distance is.

Jack, I want to ask you a question, because one thing that strikes me is in 2016, you had Russia interfere in the election, you had the Mueller investigation arise out of that. Here we are a year before election. You have a president who's willing to reach out to foreign countries for help in investigating an opponent. You have sitting Republican lawmakers who won't answer a simple question, is that an okay thing to do.

And I just wonder is this in part the result of a mixed message or not a clear message from the Mueller report that such entreaties for foreign help won't be tolerated, that there will be legal consequences. I mean, can you draw a line from that to where we are right now?

QUINN: I certainly think so. I mean, I believe with all my heart that Robert Mueller's failure to take more decisive action, reach more persuasive conclusions after all of the time put into his investigation, had the precise opposite effect of what we wanted. It emboldened Donald Trump again. This is the guy who said he could murder anyone on Fifth Avenue. Well, this is the equivalent of it. He got away with it. Bob Mueller kind of shrank from the conclusion here. And so Donald Trump said, I can get away with having foreign governments come in and help me get re-elected.

HARLOW: Final question to you, Anita. We don't know if Ambassador Yovanovitch is testifying on the Hill right now or not. We haven't seen her come in the building. But the State Department also hasn't pulled her like they did with Ambassador Sondland earlier this week. How significant is that and what does that tell you?

KUMAR: I think it's really significant. It's very striking. Actually, I was surprised this morning to hear that. Remember the letter that the White House just sent a couple of days ago saying they weren't going to participate at all. And now that you've seen Ambassador Sondland saying he's --

HARLOW: And she has just arrived. Let me jump in here, okay? Keep going but we're looking at live pictures of her arriving.

KUMAR: Oh, yes, sure. I mean, so I think that the White House, the State Department had said, in general, they did not want -- they would not cooperate, they didn't want testimony, they did not want evidence going over there. Now, we see more than one --

HARLOW: Let's listen in. Hold on just one second.

Okay, go ahead. We thought we might hear something.

KUMAR: Yes, no. I mean, we've seen more than one person saying just like she did that she's going to come. Now, we don't know exactly what she's going to say and how much she's going to reveal but I do think that all these people in the next week or two saying despite what the White House has asked them, they are going to come and talk is very significant.

HARLOW: Anita Kumar, thank you, Jack Quinn, always good to have you. A significant development, she's on the Hill.

SCIUTTO: She will not be blocked. I mean, that was --

HARLOW: Not yet.

SCIUTTO: Just a few days ago, a significant witness was blocked by the White House. She's not blocked and that could be a significant moment in this investigation.

HARLOW: And the second only sort of official witness in all of this.

Okay. Still to come, a top adviser to Secretary of State Mike Pompeo quits, reportedly furious over how top State Department officials remain silent as the president's aides attacked and ultimately removed the ambassador to Ukraine, Marie Yovanovitch. We'll have those breaking details ahead.

SCIUTTO: Plus, a marked silence from most sitting Republican lawmakers when it comes to President Trump's recruitment of Ukraine to investigate Joe Biden.

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But could these flurry of new details change that? I'm going to speak to a Republican member of Congress.

And we're getting some breaking news now. An appeals court is ruling against the president in the fight for his tax returns. It's a story we've been following very closely. We'll bring you that update. You'll want to hear it right after this break.

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SCIUTTO: Well, folks, an important moment in the impeachment inquiry. That there is the former ambassador to Ukraine, Marie Yovanovitch, a long-time U.S. diplomat, she has just arrived for her testimony on Capitol Hill. Of course, she forced out by the Trump administration in the midst of its efforts to pressure Ukraine to investigate Joe Biden. That testimony today is certain to be central to this investigation.

HARLOW: Manu Raju back with us on the Hill. Manu, what does it tell you that the State Department, unlike what they did with Ambassador Sondland this week, did not block her testimony?

RAJU: Well, it remains to be seen exactly how this have played out behind the scenes because, yes, as you mentioned, the State Department made very clear it did not want Ambassador Sondland to testify, and the White House made it very clear that they were not going to allow anybody to cooperate with they're calling an invalid inquiry.

Now, while the former ambassador, Yovanovitch, she is a former ambassador, she's still a current state employee, which is why there have been questions all week about whether or not she would appear.

Now, I'd been hearing for the last couple of days that the expectation was that she would appear. So I think it's a progress in discussions about her coming forward, and there have been some expectations that she actually wanted to testify and wanted to talk about her story.

Now, ultimately, it would be -- we're waiting to see how much she reveals about her past job, how many documents she ultimately provides this committee, what she's able to share, all that will be determined in this highly anticipated day-long testimony. But you said that there were questions up until this moment whether she would appear. It was from our reporting that it would be appear that this was supposed to start at 10:00 A.M. Eastern, and it's been past 10:00 A.M. and she just arrived here for testimony.

And so there had been been some anticipation about whether -- questions about whether she was going to come, whether she had secretly snuck in, which you can easily do in this facility. But she did come in through a public entrance. We saw her arrival. She did not answer any questions from reporters who asked whether or not the State Department did try to block her testimony.

So now the question is what will she say, what will she reveal about the circumstances of her dismissal earlier this spring and how will that aid the Democrat's impeachment push going forward. Guys?

HARLOW: Manu, thank you very much. Let us know if you do get any more information from what's happening behind closed doors.

Let's talk about all this with Ambassador James Melville, former U.S. ambassador to Estonia. He resigned his position over the summer in protest to the president's policies and practices.

Good morning, Ambassador. We appreciate you being with us this morning, especially given how well you know a number of the players here, whether it's Kurt Volker or Ambassador Yovanovitch. You have said that she's one of the, quote, most successful foreign service officers that I've known in my entire career. And you career has been long since 1986 in Eastern Germany. Do you think it's a badge of honor that she was pushed out? Why?

JAMES MELVILLE, FORMER U.S. AMBASSADOR TO ESTONIA: Well, I know Ambassador Yovanovitch to be a person of great integrity and significant accomplishments. And Masha was really the ideal person to serve as ambassador to Ukraine when she was named. That part of the world, Eastern Europe, the former Soviet Union, is an especially complicated place to practice diplomacy because of their history and also the corrupt manner in which those poor folks have been governed for a very, very long period of time.

I had the honor to serve in Estonia for three years. And of all the former Soviet Republics, the Estonians were arguably and, I think, are the most successful. And one of the reasons that they are so successful is because they seriously attacked that corruption. Transparency is their motto. And, you know, putting everything out into the public is the way that they maintain their integrity and their honesty.

And, really, you know, this whole inquiry, everything that we're doing is -- and everything that the House is doing, I suppose, is designed to find out what the truth is. And factual truth is a fundamental western value.

And, you know, the confusion and the lies, that is Soviet style or Russian style, and it tracks with the totalitarian mindset that is antithetical to the way that the west approaches governance and democracy.

HARLOW: Ambassador, if you were in the room with her today, what is the key question that you would want her to answer?

MELVILLE: I would want her to honestly answer what sort of activities these political partisans were engaged in and how that complicated her job, which was really about serving the American national interests.

[10:25:04]

HARLOW: Listen to this from Secretary of State Mike Pompeo earlier this week. He sat down with PBS. And here is what he said about Ukraine.

(BEGIN VIDEO CLIP)

MIKE POMPEO, SECRETARY OF STATE: I know what this administration has done with respect to Ukraine. We've worked diligently on this. I'm proud of our results. I remember where Obama left Ukraine. It left it at 80 percent of the size than it was when he came into office, and Vladimir Putin hasn't done that. (END VIDEO CLIP)

HARLOW: Look, it was the Russians that annexed Crimea. When you hear that from the Secretary of State, what is your response?

MELVILLE: It's disgraceful. It's dishonest. It's counterfactual. It's antithetical to our values and our policies. And Secretary Pompeo was on that phone call. He knows very well that the president was trying to extort Ukrainians to interfere in our elections, which is illegal and immoral.

HARLOW: Ambassador, thank you very much for being here. If anyone hasn't read your explanation just a few days ago about why you resigned your post, they should. Thank you again for your time this morning.

MELVILLE: Poppy, that was actually last year. That was last year.

HARLOW: Yes, I know.

MELVILLE: That was 2018, yes.

HARLOW: Over the summer. Thank you very much for being here with us. We appreciate it.

Okay, talk to you soon, Ambassador.

MELVILLE: You're welcome.

SCIUTTO: It's moving quickly this morning. We have more breaking news into CNN. President Trump has just lost his appeal to stop a House subpoena of his tax returns. CNN's Jessica Schneider has those breaking details.

What are we learning and where does this go from here? Is there another appeal?

SCHNEIDER: There probably will be, Jim. This is a fight that's been going on between the House Oversight Committee and the Trump organization, President Trump himself, since April.

So here's how it's played out. In just the past few minutes, the D.C. Circuit Court of Appeals ruled in a two to one decision that the president and his accounting firm can no longer block these financial statements from being released to the House Oversight Committee. And that encompasses tax documents, eight years of accounting records.

So that was the recent, and just a few minutes ago, the ruling from the D.C. Circuit Court of Appeals, they affirmed the ruling earlier from the district court. So now two courts have said that, yes, Mazars, which is the accounting firm here, needs to turn over these documents, financial records, including tax documents to the House Oversight Committee.

But it's likely that this fight won't end here. The next step here would be to challenge this and appeal directly to the U.S. Supreme Court. What's important here is that in this opinion that was just issued, the court put it very plainly in its two to one decision basically saying, contrary to the president's arguments, the committee, the Oversight Committee here possesses authority under both the House rules and Constitution to issue a subpoena and Mazars must comply.

And that's important here because the Supreme Court has repeatedly upheld that Congress has the right to issue these sorts of subpoenas in furtherance of its legislative and investigative purposes. So if this does, in fact, get up to the Supreme Court, it's possible, given the precedent here, that the Supreme Court would have to say this is broad legislative function of Congress and they're entitled to these documents.

But, again, Jim and Poppy, we've seen the fight over the president's tax returns and financial records playing out on many different fronts here. And still we haven't actually seen those yet. So this will likely continue to play out. So despite this ruling, saying that the president and his team have to hand this over, probably still won't see it anytime soon because the fight will continue in court. Guys?

SCIUTTO: Could we be coming to a resolution though, three years of this battle by the president to keep the returns private? Jessica Schneider, thanks very much.

HARLOW: All right. Coming up for us, the question that some Republican senators have decided they cannot or will not answer because it threatens their re-election chances.

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