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Trump's Taxes Show Chronic Losses and Years of Tax Avoidance; Trump Dismisses Explosive Tax Revelations in "New York Times" Report; Trump, Biden to Face Off in Cleveland for First Debate; NYT: Trump Paid No Federal Income Taxes in 10 of Last 15 Years; Source: CDC Director Concerned That Dr. Scott Atlas is Arming President Trump with Misleading Information; Twenty One States Report More New COVID Cases in the Last Week. Aired 9-9:30a ET

Aired September 28, 2020 - 09:00   ET

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

[09:00:45]

JIM SCIUTTO, CNN ANCHOR: Very good Monday morning to you. I'm Jim Sciutto.

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

For years as you know the president has fought to keep Americans from seeing his tax records but this morning the "New York Times" report reveals decades of his tax documents. The headline, "Years of Massive Losses and Tax Avoidance." And remember, this is a president who ran for the highest office in the nation on his reputation and his record as a businessman, and these records show otherwise.

Here are the takeaways. In 10 out of 15 years, leading up to his run for office, the president reportedly paid no federal income tax beginning in the year 2000, none.

SCIUTTO: Yes. And in both the year he won the presidency and his first year in the White House, Trump paid just $750, a tiny fraction of what the average American pays in federal taxes, and in what could potentially create a massive conflict of interest for the president, the due date is reportedly coming up for hundreds of millions of dollars in loans, loans taken out by the president, that he personally guaranteed.

The president is denying this report, although you may remember the 2016 debates, he proudly says it makes him smarter that he doesn't pay many taxes. All this is happening as we close in on the first presidential debate in this cycle.

Let's begin with CNN's Kara Scannell, who's been examining details of this story.

Tell us more of the details of this because as often the devil is in the details but it gives a vision as to how aggressively the president took advantage of the tax code. KARA SCANNELL, CNN CORRESPONDENT: Yes, Jim, that's right. Good

morning. I mean, what we see, and I'm going to tick through a number of these items that we've learned from this reporting of the "New York Times'" examination of nearly 20 years of Donald Trump's taxes. That he didn't pay taxes for 10 of the 15 years beginning in the year 2000, and then in 2016 and 2017 he paid only $750 each year.

We also learned from the "New York Times" the tax audit, the reason why Donald Trump has said that he could not reveal his tax returns, we learned more details that, that it involves a $72 million tax refund the president had taken one year, that's something that the IRS is scrutinizing.

Now how did Donald Trump reduce his tax bill? The way that the "New York Times" described this is that he used over $300 million in losses from his golf courses to offset some $400 million in profits that he made from being on "The Apprentice" and other licensing deals. But he also was able to use consulting fees. He paid $26 million in consulting fees to lower his tax bill, including what the "New York Times" said was an apparent $700,000 payment to his daughter Ivanka Trump while she was an employee of the Trump Organization.

Now they also reported that the president had used personal and business expenses to lower his tax bill, including $200,000 in landscaping and linens and silver at Mar-a-Lago as well as $70,000 that he had used on his haircuts and styling while he was on "The Apprentice." Now this comes as we know that the president's also under financial pressure. He has hundreds of millions of dollars in loans coming due in the next several years.

That puts him at a conflict of interest with these banks that could be forced to pressure the president while he's president if reelected into making these payments or foreclose on some of these properties -- Jim, Poppy.

HARLOW: Kara, I think the last point is so, so, so important about debts owed given his position. Thanks a lot for the reporting.

Let's go to the White House. Our John Harwood is there.

Good morning, John. The president denied it quickly last night, called it fake news. I wonder what the White House is saying this morning is true about the president's tax returns.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, the president did not engage in the specifics of the "New York Times" report. He issued that blanket denial as you said. He said the IRS had treated him unfairly, even though of course that's the government that he leads, and he deflected by pointing to other taxes he'd paid, state taxes in particular.

This is consistent with the approach that Alan Garten, the lawyer for the Trump administration, took. He said in a statement, "Over the past decade, President Trump has paid tens of millions in personal taxes to the federal government, including since announcing his candidacy in 2015." Those personal taxes could include things like Social Security payroll taxes.

[09:05:06]

Donald Trump Jr. on FOX this morning offered a similar message but of course the larger question raised as you were just discussing with Kara is whether or not the president's financial difficulty compromises the performance of his office. Is his attitude towards, say, Erdogan, the leader of Turkey, influenced by the fact that he gets revenue from Turkey? Is his approach to the coronavirus influenced by the fact that his properties are hurting and need to be opened?

Is the larger issue of whether or not he's going to exceed to a peaceful transfer of power? Is that because -- is he putting up so much resistance because he needs the presidency to stay afloat financially? He got this question from Hillary Clinton at the debate in 2016. He said it makes me smart not to pay taxes, but that takes on a lot greater urgency after four years of a Trump presidency and you can bet, guys, that Joe Biden is going to raise this on the debate stage tomorrow night.

SCIUTTO: No question, there are already campaign ads about it out there.

John Harwood, at the White House, thanks very much.

Joining us now to discuss, someone who knows how taxes work, the tax law, former IRS chief counsel, Attorney Philip Hackney.

Philip, thanks so much for taking the time this morning.

PHILIP HACKNEY, FORMER IRS CHIEF COUNSEL ATTORNEY: Thanks for having me today.

SCIUTTO: So let's get into this in a way that I can understand, folks at home can understand. Michael Cohen, we should note, who is of course Trump's lawyer and fixer for more than a decade, he was asked specifically on the hill how Trump reduced his tax bill. I want to play that answer and then ask you a question about it. Have a listen.

(BEGIN VIDEO CLIP)

REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): To your knowledge, was the president interested in reducing his local real estate bills, tax bills?

MICHAEL COHEN, PRESIDENT TRUMP'S FORMER PERSONAL ATTORNEY: Yes.

OCASIO-CORTEZ: And how did he do that?

COHEN: What you do is you deflate the value of the asset and then you put in a request to the tax department for a deduction.

(END VIDEO CLIP)

SCIUTTO: So you deflate the value of these assets, you also claim losses. That's legal. The question is, how far you go in doing so, right, and what you use to justify that. But based on your reading of this story, what exactly did the president do here?

HACKNEY: Yes, so it is kind of funny -- I'm thinking that what Cohen is suggesting there is depreciation, deflating assets. It seems that year after year, President Trump has lost at his businesses, and if you're a business person, you can do that, right?

You and I, we work for a living, get paid employment income. It's very hard to offset that money, but when your lifestyle in effect becomes your business, there are more opportunities potentially, but additionally, when you actually lose money, as they suggest has happened over the years and is reflected in the tax returns as reported by the "New York Times," you can actually end up showing massive losses even though you have income.

It really seems odd in comparison I suspect to his lifestyle, which seems to be exhibiting quite a bit of income, and yet he ends up having these massive losses after bad investments effectively.

HARLOW: Good morning, Philip. We're glad we have you here with us this morning as Jim said to just set this out in layman's terms for everyone. Why are paying federal taxes -- why are they so important? What do they fund?

HACKNEY: Yes. So they fund everything, right? I mean, we're -- they fund health care, they fund Social Security. They fund building roads. They fund administering our system and our army, and we all pitch in to do that.

To me, it's a civic duty to put money into the system to ensure we have a well-run system, and when you find out that there are wealthy individuals in particular, it can be pretty galling to find out they paid zero over 10 years and in the first two years in 2016 when he was running and in 2017, he paid this exact amount of $750. I think most people pay more for their rent per month for that than he paid in taxes that year.

SCIUTTO: The average U.S. taxpayer pays more than $12,000 a year. So many multiples than what the president did. And as you say, listen, soldier salaries, the weapons systems the president repeatedly touts, et cetera.

There's a conflict here that strikes me, and again, as a layman, not as an expert. But the president seems to have inflated the value of his assets to get loans, exaggerate the worth of his businesses to get loans, but deflate them, underplay to not pay taxes and even get more than $70 million refund which might strike folks at home as pretty remarkable, given he only paid $750 in taxes.

Can you play both sides of that game legally?

HACKNEY: So it's impossible for us to know exactly what he's doing in these returns, and it is quite possible that he's just been a massive loser.

[09:10:03]

It's also quite possible that he's been borrowing other people's money in order to get deductions that weren't really entitled to him. He additionally seems to be engaging in some deductions like his haircut, he deducted $70,000 one year apparently for haircuts and that gets into questionable deductions, right? Haircuts are pretty quintessentially according to the tax court non-deductible expenses that can be in some cases but he does get a bit aggressive with some of the deductions at least from what we can see.

HARLOW: You see a real issue with the consulting fees. Can you briefly explain that?

HACKNEY: Yes. So it's not necessarily -- you know, he's not dead in the water from those things, but a 20 percent consultancy fee, large consultancy fees year after year suggest maybe some gamesmanship going on. His father played a lot of estate tax games according to the "New York Times" reporting that came out about a year ago. This is a useful way to shovel money to children and there's at least a suggestion in the "New York Times" reporting that perhaps this is what's going on.

Some of the money is suggested went to Ivanka Trump, over $700,000. Even though she was a chief executive officer of his company, she's getting consultancy fees. Kind of a conflict of interest going on there, but possible it flies, but it does suggest problems.

SCIUTTO: Yes. That was remarkable detail on the Ivanka money, right? The way they tracked that was the exact amount that the president claimed was claimed as income on Ivanka Trump's tax returns to the tune as you say of many hundreds of thousands of dollars.

Philip Hackney, thanks for helping walk us through this.

HACKNEY: Absolutely. Thanks for having me.

SCIUTTO: Well, you can bet that this topic might be on the table tomorrow in the first presidential debate tomorrow night in Cleveland. On the topics as well of the coronavirus, the economy, the Supreme Court, but now President Trump's taxes.

HARLOW: Take a look at this online video from the Biden camp. It is slamming the president's alleged $750 tax payment for the first two years when he was running and then his first year in office. Watch this.

(BEGIN VIDEO CLIP)

GRAPHICS: Typical income tax, construction manager, $16,447. Typical income tax, registered nurse, $10,216, Federal income tax paid, Donald Trump, $750.

(END VIDEO CLIP)

HARLOW: Jessica Dean is in Cleveland of course where the debate will take place just hours from now, tomorrow night. Joe Biden clearly here there's a plan to go after the president on his taxes? JESSICA DEAN, CNN CORRESPONDENT: Yes, good morning to both of you. We

can certainly expect to hear about this tomorrow, Poppy and Jim. We saw former Vice President Biden the last couple of weeks really lean in to this Scranton versus Park Avenue messaging. And really as he went after white working class voters in the upper Midwest and that is something they've continued to come back to and this new reporting about President Trump's taxes really feeds right into that message.

We heard from his deputy campaign manager on our air last night, Kate Bedingfield, saying that this is really about President Trump looking out for himself, that Vice President Joe Biden is looking out for all Americans. And you saw that messaging just in that video which is online right now from the Biden campaign where they really lean in to what the average American is paying in taxes and what Donald Trump is paying in taxes.

Really creating that stark contrast again that Scranton Joe is looking out for the everyday American, while Donald Trump, the message they're trying to get across is looking out for himself and his friends and billionaires and millionaires with his tax cuts.

Now, in a more general sense, we're expected to hear about that, but also the economy and the COVID response. That is the issues we've been hearing from the Biden campaign time and time again across the campaign trail, Poppy and Jim. We know that President Trump is going to go after Vice President Biden. The campaign knows that.

What they want to do, Jim and Poppy, is really draw it back time and time again to the COVID response and the economic crisis, the public health crisis and the economic crisis that the country is facing.

HARLOW: Jess, thank you. It's a big night ahead for sure tomorrow night. We'll all be watching. We appreciate you being on the ground in Cleveland.

We have a lot ahead. It is a busy Monday. How the Trump campaign is responding to this "New York Times" reporting. We'll have that.

Also this morning the CDC director says he's worried the president is getting misinformation from his new adviser on the Coronavirus Task Force. We'll have more reporting on that.

SCIUTTO: Plus a former intelligence agency director who repeatedly briefed President Trump says that the president has failed to serve the country's national security interests. He's met him face to face. He's briefed him. It's a remarkable point of view. He's going to join us live.

(COMMERCIAL BREAK)

[09:15:00]

SCIUTTO: Well, there's a major story just days before a major moment in this presidential election. So, how is the Trump campaign handling "The New York Times" report that the president avoided paying any federal income tax for years. HARLOW: Let's bring in our Abby Phillip. Good morning, Abby. Lay out

for us what you're learning here, and I think as it ties to specifically blue-collar voters and if they're going to care about this.

ABBY PHILLIP, CNN POLITICAL CORRESPONDENT: Yes, good morning, Jim and Poppy. The Trump campaign yesterday first responded to this by simply pointing to a statement that was already in "The New York Times" article, suggesting as the president did yesterday at the White House that he is paid federal taxes, and that the story is inaccurate.

[09:20:00]

But they're also suggesting that this is exactly what the president experienced in 2016 in that race against Hillary Clinton. The implication being that voters are already familiar with these arguments that the president paid no taxes, and that perhaps they -- that this information isn't going to change their view.

But as you can see from the way that the Biden campaign is approaching this, they certainly believed your question about blue-collar voters, that this is something that will matter to Americans, especially now at a time of so much economic uncertainty. You know, the Biden campaign is really focusing on the idea that the president has cheated and stiffed the American public, that he is not paying his fair share.

And so it really falls directly into that argument, but other than that, you know, it's been notable that the Trump campaign has not tried to attack the substance of this article really in any way. They're just simply saying it's old news.

SCIUTTO: All right, there's another issue in here beyond the president tax avoidance over many years, and that is a massive loan in the hundreds of millions of dollars, guaranteed by the president himself, set to come due in the coming years. How significant is that? I mean, there are national security folks who note that massive loan obligations like that are issues for you and me or would be --

PHILLIP: Yes --

SCIUTTO: With security clearances. What is the answer to what this means for the president going forward?

PHILLIP: Yes, if you were a regular person trying to get a job in the federal government, debts like this would be a significant problem. It's not clear that as the president of the United States, those rules apply to him, but it certainly raises questions about some concerns that have actually followed President Trump since he was a candidate.

The question is, who is this money owed to, and what does it say about the potential problems that this could present for him in terms of conflicts, in terms of potential blackmail, if they are owed particularly to institutions that are overseas or even governments that are overseas.

We just simply don't know, and "The Times" story doesn't get into any detail on that question. But this is one of the main things that I think the president has probably tried to keep from public view, not just because of what it says about the national security risk, but also what it says about how much money he is worth.

You know that this is a president who really likes to brag about how wealthy he is, how successful he is, but with more than $400 million in debts, it really calls into question how much of that is real and how much of that is inflated for, you know, PR purposes really.

SCIUTTO: Yes.

HARLOW: There is so much there, it's a long read, but a really important one. Abby, thank you very much for the reporting. Also this to the coronavirus pandemic, the director of the CDC is growing increasingly worried about misleading information that he says is making its way to the president from a new member of the coronavirus taskforce. We'll have details on that ahead.

(COMMERCIAL BREAK)

[09:25:00]

HARLOW: Welcome back. Well, CNN has just learned that the director of the CDC, Dr. Robert Redfield now believes that a member of the coronavirus taskforce is sharing misleading information with the president. In fact, Dr. Redfield was overheard saying quote, "everything he says", being that person --

SCIUTTO: Yes --

HARLOW: Talking about Dr. Atlas is quote, "false".

SCIUTTO: False, straight-up false. CNN's Nick Valencia joins us now. Nick, what specifically was Redfield talking about here? Because alarms were raised when this official was hired because his statements contradict the science and the data that we have on COVID.

NICK VALENCIA, CNN CORRESPONDENT: That's right, Dr. Scott Atlas; who is a neuroradiologist, somebody that does not have experience in public health beyond being a neuroradiologist, he does not have experience being -- you know, any expertise in infectious disease.

And according to an "NBC" reporter who was on a flight with Dr. Robert Redfield -- a commercial flight from Atlanta to Washington D.C., Dr. Redfield was overheard on a phone call with a colleague, expressing his concern about Atlas. We know this, Jim and Poppy that Scott Atlas has spent a lot of time recently with the president since joining the White House taskforce, he's been briefing the president and there are concerns as how he's representing the information that's he's getting.

We did reach out to the CDC to respond to these comments that were overheard by the "NBC" reporter on that flight, and here's what the CDC had to say. ""NBC News" is reporting one side of a private phone conversation by CDC Director Dr. Robert Redfield that was overheard on a plane from Atlanta Hartsfield Airport. Dr. Redfield was having a private discussion regarding a number of points he has made publicly about COVID-19."

And here are some of the points that are at, you know, at the center of this concern for Dr. Robert Redfield. Dr. Atlas, Redfield believes according to a federal health official I spoke to confirmed the nature of this story, that Dr. Atlas has misrepresented the efficacy of masks, whether younger people are susceptible to the virus and he's really pushing the idea that herd immunity could help stop the spread of the virus, something that other more notable public health experts have really knocked down as being something that could help.

And again, you know, these concerns we've reached out to the CDC to try to get more information about the details revolving around this conversation. They just sent us that basically, a non-denial statement saying that this was a one-sided conversation that "NBC News" heard. And just really quickly, Jim and Poppy, you know, this comes --

HARLOW: Yes --

VALENCIA: After -- by President Trump that he's grown frustrated, increasingly frustrated with Dr. Robert Redfield, we don't really know what this is going to mean for their relationship, but this is just another negative for Dr. Redfield here publicly. Jim, Poppy?

HARLOW: Nick, thanks very much for the reporting. Dr. Carlos del Rio is here, executive associate dean of Emory University of Medicine. Good to have you. I mean, the statement also doesn't say no, Dr. Redfield thinks Dr. Atlas is spot-on all this stuff --

SCIUTTO: Yes.