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The U.S. And Chinese Negotiators Have Put Together A Preliminary Partial Trade Deal; Explosive Testimony This Morning Up On Capitol Hill By Marie Yovanovitch; President Trump's Bid To Keep His Tax Returns Out Of Congress's Hands Just Hit Another Roadblock. Aired 2-2:30p ET

Aired October 11, 2019 - 14:00   ET

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

[14:00:23]

ANNOUNCER: This is CNN Breaking News.

BROOKE BALDWIN, CNN HOST: Hi there. I'm Brooke Baldwin. You're watching CNN on this Friday afternoon. We have a lot to talk about. But let's begin with some news just in to us here at CNN.

The U.S. and Chinese negotiators have put together a preliminary partial trade deal. Let's go straight to the White House to our senior White House Correspondent, Pamela Brown, who has some of those breaking details. What exactly has been reached between these two sides?

PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, we're still trying to figure out what exactly has been reached we don't have the details. All we know here, Brooke is that the President in a sign of progress is meeting with the Chinese Vice Premier today here at the White House. And Steve Mnunchin, the Treasury Secretary just saying moments ago that progress is being made.

And so clearly, there is some movement going on in terms of this trade deal between the U.S. and China that we really haven't seen previously, when hopes had really been dashed that anything would be reached before the election.

President Trump had talked about how the Chinese had signaled they wanted to wait until after the election, but now there does appear to be some movement on trade. We're just waiting for more details -- Brooke.

BALDWIN: All right, Pam, thank you. Let's go straight to Cristina Alesci, our business correspondent just on how markets are responding to those keywords from Pam -- progress being made. How's the Dow?

CRISTINA ALESCI, CNN BUSINESS POLITICS AND BUSINESS CORRESPONDENT: Well, the Dow is definitely up. It has been up all day on optimism that a trade deal of some sort -- and I just want to tout that -- will be reached. What this really is, is an easing of tensions.

What I've been hearing from my sources all week is that it does, it likely will fall short -- whatever is announced -- of a comprehensive trade deal, but all the market wants to see right now is some easing of tensions. And it seems to be heading in that direction.

Very key here is the fact that it looks like, based on reporting from Kevin Liptak, and some of my sources that what will be avoided is the tariff increases going into effect next week. That's the critical part of this equation that Wall Street was really looking at.

But let me just take a step back and tell you what this means. One, this is not a comprehensive trade deal the way that the Chinese are seeing this as the beginning of a longer discussion.

Earlier today, I reported the fact that there may be continued discussions in China with Secretary Mnuchin and Lighthizer, the U.S. Trade Representative. And going forward, I think this is a sign also that President Trump needs a win and that's really important to him right now with the Impeachment Inquiry hanging over him and this backlash from Republicans on his decision to pull troops from northern Syria.

He needs a political win. The trade deal right now could be just that.

BALDWIN: Cristina, thank you very much and, you know, speaking what has been taking over him, let's get into that.

The breaking news also here on this Friday afternoon, explosive testimony this morning up on Capitol Hill where Marie Yovanovitch, the ousted Ukraine Ambassador told this House Committee that she was booted from her job due to pressure from President Trump as well as what she called unfounded and false claims by people who, with clearly questionable motives. That's a direct quote from her.

Yovanovitch served the nation as a diplomat for more than three decades, appointed by both Republican and Democratic Presidents. But her time as Ukraine's top diplomat all came to this abrupt end just this past spring when she was unexpectedly recalled from her post amid what we now know were efforts by Rudy Giuliani and these two of associates of his to push her out. Well, it turns out the President had a hand in this as well.

In her opening statement today, which was obtained by "The New York Times," Yovanovitch takes us inside the moment she learned she would no longer be needed at the State Department. So quoting this former Ambassador now, she says, "I met with the Deputy Secretary of State who informed me of the curtailment of my term. He said that the President had lost confidence in me and no longer wish me to serve as his Ambassador."

"He added that there had been a concerted campaign against me, and that the Department had been under pressure from the President to remove me since the summer of 2018. He also said that I had done nothing wrong, and that this was not like other situations where he had recalled ambassadors for cause."

Yovanovitch also did a point by point rebuttal of several claims made against her including that she is disloyal to the President and said she would be impeached. Yovanovitch says neither is true. She also says she has never met the former Vice President's son, Hunter Biden.

[14:05:14]

BALDWIN: She does say she met Joe Biden over the course of the years but never discussed Burisma, the company for which Hunter Biden was a Board member. And Yovanovitch also says that she had minimal contact with Rudy Giuliani.

So, with all of that set, let's go straight to Manu Raju, our Senior Congressional Correspondent and I mean, reading through the nine to ten pages of her opening statement. It was a wow, you know and she also talks about the damage she feels is being done long term to you know, diplomats and folks at the State Department. Tell me more about what she said.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, that's absolutely right. She said she was, quote "incredulous" that her dismissal in her view was based on unfounded, unsubstantiated claims by people that she said had very questionable motives.

And one of the motives she subscribes to her ouster are from Giuliani associates, who said they may have -- she believed that their personal financial ambitions essentially played a role in all of this.

And yes, she did raise some significant concerns about the long term impacts of the State Department and what's happening at a critical time with U.S.-Ukrainian relations.

She said, "Today we see the State Department attacked and hollowed out from within. The State Department leadership with Congress, needs to take action now to defend this great institution and its thousands of loyal and effective employees."

"We need to rebuild diplomacy as the first resort to advance America's interests and the frontline of America's defense. I fear that not doing so will harm our nation's interest, perhaps irreparably."

So that is part of the discussion behind closed doors. Also, discussion of all these concerns that Republicans had and that Giuliani had raised about she allegedly was disloyal to the President.

She did recite point by point pushing back on those claims that have been made as part of what she believes is an effort to go after her, a smear campaign of sorts. She said none of that essentially is true.

So the question ultimately now is, what else do the Democrats and Republicans have learned? And this testimony has been going on since about 11:00 a.m. Eastern Time. They just had a brief break for lunch. Members declined to comment.

One member of the committee did say that she had been subpoenaed to appear. Now other people have not confirmed that at all. But there have been a lot of questions about why she was allowed to appear, why she did appear, because she is still a current State Department employee, and as you know, Brooke, the White House and State Department are taking steps to deny access, deny testimony of what they view is an invalid Impeachment Inquiry.

So there a lot of questions still about what she has been saying behind closed doors, but we do expect this to continue for at least several more hours -- Brooke.

BALDWIN: We know you'll get to the bottom of all of that. Manu, thank you very much. Keep your ear to that that door.

Meantime, let's discuss all of this. Anne Milgram is a CNN Legal Analyst and former New Jersey Attorney General. Matthew Rosenberg is an Investigative Reporter for "The New York Times" and a CNN National Security Analyst. And Kylie Atwood is a CNN National Security Reporter.

And so Kylie, let me begin with you over at the State Department because you know, State is really getting this one-two punch today because you have Yovanovitch in what we just ran through about how she is really hitting back, you know, hard at this President.

While you also have that senior adviser to State Department Secretary, Mike Pompeo quitting because he felt the Secretary did not express enough public support for State officials caught up in all of these Ukraine investigation.

So I've got to ask you, what is the mood like over at the State Department today?

KYLIE ATWOOD, CNN NATIONAL SECURITY REPORTER: Well, folks are clearly angry and frustrated, but the thing here, Brooke, is that they are no longer staying at the State Department, in line quietly, not saying anything about what is happening.

We have McKinley who resigned because he was frustrated about the lack of public support that Secretary Pompeo had shown for Ambassador Yovanovitch, who was recalled abruptly for political reasons.

And then we also have Ambassador Yovanovitch herself, making some very, very declarative statements about what happened in her ousting and telling her story.

This is not a State Department that is willing anymore to remain silent, and folks that I've talked to throughout the day are happy to see that. They're happy to see that the Department is not being completely undermined and overrun by a political agenda.

But they are fearful of what could happen here because we really don't know if Ambassador Yovanovitch will be able to remain in her position. She is still technically a State Department official, and be able to fairly and fully tell her story.

BALDWIN: So on all of that, Anne, that's what I wanted to ask you about. I mean, since she is still on the State payroll, and we saw what happened to Ambassador Gordon Sondland, who was supposed to testify a couple of days ago and the State Department said no, you're not because the White House said no you're not. So why did they let her testify today? [14:10:02]

ANNE MILGRAM, CNN LEGAL ANALYST: Well, one of the things that is happening that we are seeing happen is that the Committees are issuing subpoenas.

So for example, Sondland did not show up yesterday. He has now been subpoenaed and had said that he will honor that subpoena next week. It's too early to tell.

But one of the things that the Committees are doing, and I think that this is right, if your boss, the State Department is telling you not to go, and you have a voluntary -- essentially a request for a voluntary testimony, I think people are in a very hard position.

Once a subpoena comes. That's a lawful order from Congress saying we want you to appear.

So either way, you're either going to defy a lawful order from the United States Congress, or you're going to defy your boss and here, I think the decision to talk is happening individually with the State Department employees.

Now, I would balance that with documents which I think it will be up to the State Department to turn over, so I think we'll see people testify, but we won't necessarily see the documents go over.

BALDWIN: Got it. Matt, to you. Let's also just remember that back on that, what was it? July 25th phone call. President Trump referenced Yovanovitch on that call with his Ukrainian counterpart and Yovanovitch was ousted at a time when, you know, number one, she said she had just been asked to extend her tour and two, you have this newly elected Ukrainian President, so you would likely want that continuity of ambassadorship, but the Trump White House did not. Why would they want her out?

MATTHEW ROSENBERG, CNN NATIONAL SECURITY ANALYST: I mean, they clearly saw her as an obstacle. Either it looks a lot like an obstacle to what they wanted, which was a new investigation into Hunter Biden and the former Vice President, Joe Biden.

But throughout this, they clearly see her as somebody who is not carrying water for that agenda. And that by all appearances, by what she said, it appears that that Mr. Giuliani really did see her as a problem and wanted her out and they wanted to clear the way for somebody that would be, I guess, more onboard and more willing to get on board with this idea of opening this investigation.

BALDWIN: In reading her opening statement. This is a graph that I really wanted to highlight that really struck me, Kylie, this is this is for you, quote, "Today we see the State Department attacked and hollowed out from within. State Department leadership with Congress needs to take action now to defend this great institution."

And then she ends this graph by saying, "I fear that not doing so will harm our nation's interest, perhaps irreparably." Kylie, what would that harm look like long term?

ATWOOD: Well, she goes on to detail what that harm could potentially look like? She says it could be resignations of State Department officials, which we have already seen to some degree.

She says it will result in Ambassadors not being trusted by the country they're in to speak on behalf of the President. That's another thing. She says clearly that was an issue for herself when she was in Ukraine.

Another thing she says is that it will allow individual people to then come in and use official channels for their own personal gain, to circumvent diplomats and not be doing things in the interest of the public good.

And the other thing she points out is that all of these changes are only going to benefit American adversaries and she specifically points to Russia as one of those countries that would be benefited if the State Department goes through the demise that she is predicting could happen if this isn't stopped.

BALDWIN: I see you nodding out of the corner of my eyes.

MILGRAM: Yes. I mean, one of the things I was thinking about, one of the statements, one of the things we read as part of the statement was this suggestion by the former Ambassador that she was pushed out because people didn't like her anti-corruption work.

So if we think about what kind of a message it would send for people who have a private financial interest, who don't want the U.S. doing anti-corruption work abroad, to just have the President or other emissaries take someone out. It's a terrible message for political corruption.

BALDWIN: Matthew, do you think the damage is irreparable or does it last only as long as perhaps this current administration is in Washington? I mean can the U.S. rebuild these relationships and its standing? How are other countries viewing the United States right now?

ROSENBERG: I mean, look like any relationship, be it a personal one or a diplomatic one, once there's a rupture, it is hard to repair. It takes time.

I think there's a bigger issue here though that the Ambassador raises about institutions. That there are developing countries around the world with very weak institutions, where the Ambassadors, whomever really don't represent their government and everything is done personally by the President or the Prime Minister or their friends or family.

You know, the U.S. has always been very different from that, where our institutions have mattered. And if we are kind of inching towards a place where somebody who is an Ambassador really doesn't speak for the country, but this guy who is a lawyer and associate of the President does, I think, it's a very, you know, a dangerous place for America to be.

BALDWIN: As I was listening to you, I was just handed this piece of paper. So let's just all react to this in real-time. Looking at this for the first time. It says, three chairs statement on interview with Ambassador Yovanovitch.

[14:15:01]

BALDWIN: So, today Congressman Adam Schiff, Chairman House Intel; Congressman Elijah Cummings, Chair of Oversight; and Congressman Engel, Chair of Foreign Affairs. This is just -- this is their statement they've just released, quote, "Last night, the Committees learned that the State Department at the direction of the White House directed Ambassador Marie Yovanovitch not to appear for her voluntary interview today. This is the latest example of the administration's efforts to conceal the facts from the American people and obstruct our lawful and constitutionally authorized Impeachment Inquiry."

And it goes on, but I mean, obviously the news, Anne, back over you just going full circle on this is that they directed her not to show up, but she still did.

MILGRAM: This is an extraordinary thing that we're seeing, which is essentially she is stepping forward as an employee of the State Department and saying, I have an obligation both to honor Congress's subpoena and to share the information that she has.

What will be interesting is what happens to her as a result of defying the White House and State Department's order? They may fire her. They may take disciplinary action against her.

I think it's completely defensible what she has done. Again, with a lawful subpoena, it has --

BALDWIN: Yes, exactly. By the way, in response to the second graph of this, the House Intelligence Committee issued a subpoena to compel her testimony this morning. The duly authorized subpoena is mandatory and the illegitimate order from the Trump administration not to cooperate has no force as is required of her.

The Ambassador is now complying with the subpoena and answering questions from both the Democratic and Republican members of staff.

Kylie, over to you at the State Department. You want to respond to this?

ATWOOD: Yes, well what we've seen before matches up directly with what we are now learning. Ambassador Sondland was also prevented from attending his deposition, the Committee found out about that just hours before he was supposed to come forth.

And now he also has been subpoenaed, and we're told that he's going to appear next week clearly, the Committee was ready for it this time. When they found out that she wasn't allowed to attend, they had that subpoena ready to go. And Ambassador Yovanovitch followed the law there and has attended. I

think it's also important to follow what the White House is going to do, what the State Department is going to do, as a result of her not following the orders of the Secretary of State, of her boss and following the law here, which is going forth because she was subpoenaed.

Because we know that the White House has put out some statement, some internal talking points to its allies questioning the fact that Ambassador Yovanovitch shouldn't be able to show up unless she has a counsel from the State Department.

And we don't know who she went to her testimony with today, but that'll be interesting to develop and follow here.

BALDWIN: I mean --

ROSENBERG: I think it's also worth noting that government employees have an affirmative kind of responsibility to report wrongdoing, to report fraud waste and abuse.

So while the administration may want to say, well, these people work for us and they have to be loyal to us, part of their job, part of, you know, the agreement they've made when they took their job is that they have to report this wrongdoing when they see it. And there is a real -- possibly a real tension there.

BALDWIN: All right. Matt, Kylie, and Anne, thank you so much for all of that. That is happening today in Washington. We have a whole lot more to talk about.

Also today, the President losing a major decision on his tax returns. A Washington, D.C. Appeals Court ruling lawmakers have the right to see them. So what happens next?

Also, Rudy Giuliani's financial dealings are now under investigation after the arrest of those two associates of his. Hear how the President is now trying to distance himself from the man he has known for years and years.

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

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[14:23:32]

BALDWIN: All right, we're back. You're watching CNN. I'm Brooke Baldwin. President Trump's bid to keep his tax returns out of Congress's hands just hit another roadblock.

In a two to one ruling, this D.C. Federal Appeals Court sided with House Democrats in its standoff with the President. The lawmakers have issued a subpoena to get eight years of Trump's tax returns from his longtime accountant, Mazars USA.

CNN Justice Correspondent Jessica Schneider is with me now, and so just remind us of the reasoning, Jessica that this House Committee has cited for requesting the tax returns, and what happens next?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Yes, so Brooke, House Democrats, they've said all along, they need the President's financial information to further their investigation into House ethics laws, government ethics laws.

And this is really a fight that dates back to February, when Michael Cohen testified before the House Oversight Committee. He said in that testimony that the President had changed the value on some financial statements.

Well, Democrats used that as a jumping off point to say that they needed the President's financials to investigate these government ethics laws.

Well, the President's attorneys all along have said that this rationale is a ruse because they said that Democrats were requesting the tax returns really just to harass the President.

Well, this morning, the D.C. Circuit Court of Appeals, arguably the second most important court in the country, it ruled in a two to one decision that the President and his accounting firm, Mazars must in fact hand over eight years of accounting records.

[14:25:01]

SCHNEIDER: So we've since heard from the President's attorney, Jay Sekulow and he says that they will keep fighting this. They will explore their appellate options.

And in fact, they have seven days to decide whether to appeal this to the full D.C. Circuit. Because remember, the initial ruling is only from three judges, so they could do that or they could go right directly to the Supreme Court.

So the D.C. Circuit this morning ruled this subpoena for these financial records. It did, in fact, Brooke fit into Congress's legislative mandate. So that was the ruling from the Circuit Court. It's been the ruling from the District Court.

And what's interesting here is that if this were to be appealed to the Supreme Court, the Supreme Court has actually repeatedly upheld Congress's broad power to investigate.

So if the President's attorneys take this to the Supreme Court, it could be interesting to see how this plays out, given the precedent from Supreme Court, where they've said yes, Congress has this power to investigate, to issue subpoenas and now of course, the balance of the court being with the five-four conservative majority, so this could get very interesting.

But I guess the bottom line here, Brooke, is that Democrats likely won't see these financial documents at any point soon. This will continue to play out in the courts -- Brooke.

BALDWIN: I think your last point, though, about the Supreme Court and precedent and siding with Congress is so, so important. I've got Anne Milgram who is good enough to spend a little bit more of her Friday with me. Jessica. Thank you.

Anne Milgram, our legal analyst is back. And so just first of all, surface level. How big of a legal blow is this for this administration?

MILGRAM: It's a significant thing. And it's at the circuit level, which is the appellate level, two-one. It's a very significant blow, I think for the administration.

BALDWIN: The administration has seven days, as Jessica pointed out to file another appeal and one of the President's attorneys tells CNN quote, "We continue to believe that this subpoena is not a legitimate exercise of Congress's legislative authority."

MILGRAM: One of the things that's important is that the court ruling here basically says there are two centuries of precedent. There are case after case upholding Congress's power to do exactly what they've done, which is to issue a subpoena as part of its legislative function for a legislative investigation.

So I think first of all, the opinion is strongly written. And it cites all these years of precedent, basically saying that Congress does have this authority.

The second point on the appeal is, I think, an important one, which is that I would expect that they will appeal first to the D.C. Circuit en banc, so all the judges who sit on the DC Circuit, and then potentially to the Supreme Court, because it will draw it out longer.

BALDWIN: But on the Supreme Court point, and I hear you on precedent, but I mean, again, you could also look at it as, well look at all the conservatives on the court. Look at the Trump appointments on the court. You still say -- precedent rules.

MILGRAM: Yes, I still think precedent rules and in part because this is such a critical issue of separation of powers between Congress and the Executive.

And really, the reason why all the cases have said this for years is that Congress is a co-equal branch. They have a right to have this oversight function over the President and to have this legislative investigative function.

And really, the argument that the administration is making against it would mean that again, the President was above the rule of law; that the rules didn't apply to the President. So I think the Supreme Court will go in the right direction on this.

BALDWIN: And let's just say that, again, Congress is a co-equal branch, I think sometimes some people forget that.

Anne Graham, thank you very much for all of that.

MILGRAM: Thank you. BALDWIN: The arrest of two associates of the President's personal

lawyer, Rudy Giuliani has now thrust the former mayor square in the middle of this Ukraine controversy.

Is President Trump now backing away from his old friend?

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