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NYT: Trump Squandered Millions, Faces Crippling Debt; "New York Times" Obtains Trump Tax Records. Experts Warn of Potential Surge in New Infections. Aired 11-11:30a ET

Aired September 28, 2020 - 11:00   ET

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

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[11:00:15]

JOHN KING, CNN ANCHOR: Hello, everybody. Top of the hour. I'm John King in Washington. Thank you so much for sharing your day with us.

President Trump's Supreme Court nominee hits the courtesy call circuit this week. That ahead of what promises to be a bruising confirmation battle.

The coronavirus numbers are quite discouraging this morning. The average daily case count is up. Dr. Anthony Fauci is warning states that continue to drop restrictions says, they are, quote, "asking for trouble."

And we are on the eve of the first presidential debate. The announced topics include the court, the coronavirus, response, the economy, racial election integrity and President Trump and Joe Biden's respective records. Taxes and spending, of course, always a presidential debate issue. Well, that issue takes on new meaning today.

New and incredibly detailed reporting from the "New York Times" gleaned from 18 years of the president's federal tax returns paints a damning picture of the president as a money manager mapping millions of dollars of losses, a crippling debt load and year after year of avoiding federal taxes.

The president last hour on Twitter calling the story nonsense. He says it ignores the value of his assets and he says it denies one of the -- he denies one of "The Times" core findings. The president, the documents show, paid nothing, nothing in federal income taxes for 11 of the 18 years the time was examined.

And he paid $750. $750 in federal income tax the year he won the White House and his first year in office. Now think about that. Most years, the president paid nothing. The most recent two years, "The Times" obtained $750. That's thousands less. Thousands less in the $12,000 plus Americans paid on average in 2017.

The documents also show a history of massive write offs. An ongoing battle with the IRS over a nearly $73 million tax refund and a foreign money boon. Thanks to Mr. Trump holding the presidency.

Importantly, the president faces a coming money crunch. He is personally on the hook for $421 million of debt and loans. Most of that debt coming due within the next four years.

Rare is the day you see this. A six-column headline in "The New York Times." The details in these stories are many and they blow to pieces the president's tall tales about his Midas touch as a businessman. Fake billionaire is the question. You see it here. Post by the generally conservative, generally pro-Trump Drudge Report.

Our chief business correspondent Christine Romans is here to walk through the reporting and what these tax documents unearth about the president's finances.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: John, a scathing line from "The New York Times" report, quote, "Mr. Trump has been more successful playing a business mogul than being one in real life."

"The Times" pulls back the curtain to tell a story at odds with the public persona Trump worked so hard to create. Instead, the reality is a serial tax avoider who has presided over hundreds of millions of dollars of business losses and is crushed by a mountain of debt. This according to the paper.

Now the tax bombshell reveals several things. The president is at debt at losing lots of money. The system rewards rich people who lose a lot of money. They can write off those losses and the average citizen has paid more to support America's military, its roads, schools and democracy than the president has.

Now data from the Tax Policy Center shows nearly half of Americans pay no income taxes. That's mainly because of how low their income is. But among taxpayers, the IRS shows that the average filer paid about $12,200 in 2017. That's 16 times more than what President Trump paid the same year.

Now as a candidate, Trump sold Americans on being a successful businessman. But according to "The Times," tax records show he just played one on TV and found multiple ways to write off the cost of creating that image. Trump took huge deductions including $70,000 to take care of his hair during "The Apprentice" and appeared to write off hundreds of thousands of dollars paying his daughter Ivanka as a consultant to the Trump organization. John?

KING: Christine Romans, appreciate the breakdown on the numbers.

The president predictably calls "The Times" report fake news but the documents are very real. And they simply shred the story Trump has told for years. A story that is central to his political resume, successful businessman and savvy deal maker.

The truth is the Trump empire -- look at the documents. The Trump empire is wobbly, and a giant ball of debt is due just around the corner. Five weeks to Election Day, one question is how these plays with Trump supporters who now know, pick it up, read the newspaper, you pay a lot more in taxes than your president.

Let's get straight to the White House to CNN's John Harwood.

John, the president says fake news. He says nonsense but the document said the reporting is incredibly detailed. It is quite real.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: It's very detailed and we saw a classic Trump response last night when he came into the briefing room.

[11:05:04]

He avoided specific responses to the particular allegations in the story. He denounced "The New York Times" for bias. Saying that they were targeting him because he was a Republican. He deflected by pointing to state taxes rather than federal taxes he paid. And he simply tried to wipe the whole thing away as a fabrication. Take a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It's fake news. It's totally fake news. Made up, fake.

QUESTION: Can you give people an idea of how much you actually are paying?

TRUMP: Yes. Basically, well, first of all, I've paid a lot and I pay a lot of state income taxes too. The New York state charges a lot and I've paid a lot of money in state. It will all be revealed. It's going to come out.

(END VIDEO CLIP)

HARWOOD: Now, there's been a little evolution in his response this morning, John. He tweeted out this morning complaining that the information that "The Times" published was illegally obtained. Of course, "The Times" says it was obtained for people who had it legally so they had bad intents that he paid many millions in taxes but he also said I was entitled to depreciation and tax credits just like everyone else.

So, think about that line. Depreciation and tax credits just like anyone else considering that the amount he paid in taxes in 2016 and 2017 is less than the average taxpayer making $25,000 a year paid in 2017. This is a response that is tailor made for Joe Biden going into tomorrow's debate. The Biden - the Biden of course is preying to his campaign. It's Scranton versus Park Avenue. The president is going to have to answer for that tomorrow night.

KING: It will be a major point without doubt. John Harwood, I appreciate the live reporting from the White House.

Let's continue the conversation. Joining me is the former federal prosecutor of New York state. Prosecutor Dan Alonso. Dan, thank you for your time today. Just as a prosecutor with experience both at the federal and the state level. When you pick up "The New York Times" story and go through it, I saw your tweets. You say there's predicate for an investigation.

Now I don't expect any investigation especially if Bill Barr could name a special counsel. We will all, you know, dine in a chair waiting for that to happen. So -- but what jumped out at you is if you were either at the federal level or the state level is something that you would say I want to look at that now.

DANIEL R. ALONSO, FORMER FEDERAL PROSECUTOR: You know it's so interesting that everybody is focusing on the losses that reduces tax liability so that we have this kind of absurd sounding news like $750. But that's not really what we jumped out to a criminal investigator or to a - or to a prosecutor. You know those kinds of -- the real estate industry is notoriously difficult to - to investigate for tax fraud because of these layers of LLCs and various companies, some have losses, some have gains.

So, in a sense, Trump is right in terms of you know if there are legitimate losses, he's entitled to claim them. And there is a difference, a legitimate difference between tax avoidance - legal, and tax evasion -- illegal. But what jumps out to a prosecutor is those last two things that "The Times" talked about.

First is the consulting fees apparently on these foreign deals about a third of "The Times" says income -- I don't know if it's income or revenue but a third of what's coming in is going out as consulting fees and we believe we know that at least in one of the deals it went to his daughter. So that is a big red flag.

Now, why? We don't know. In - typically, in these foreign deals when you got huge amounts of consulting fees, it raises lots of questions. Who is the money going to?

Now here it's going to his daughter. It may not be the usual red flag, is are they paying off people in those countries. Here it may be that he's just figuring out a different way to pay his daughter who is otherwise an executive of the Trump organization without paying payroll taxes. I mean it's possible that that's what it is. But right now, I stressed that we are a little bit speculating but that's a very interesting piece.

The other interesting piece is the business expenses. That's always something where you need to ask under the tax law, are they legitimate because people do go to jail all the time for falsely claiming personal expenses as business but there's also a legitimate way to do that. So that's a predicate for an investigation as you said.

KING: So, let's look at some of that. Just the deductions that raised some questions. And again, maybe they can be explained but if you're a prosecutor that's what you do. You've come on and let's explain this.

$70,000 on hairstyling during "The Apprentice." The president deducted that. $307,000 plus for linens, silver, landscaping at Mar-a-Lago in 2017. This one jumps out of me, Dan. $2.2 million in property taxes on his Seven Springs estate. The president writing that off as a business expense.

Here's something Eric Trump said in 2014 about that compound. Quote, "This is really our compound." Eric Trump said in 2017 suggesting it was a personal property. So, we don't know the answer. But it raises a flag, right?

ALONSO: Well, I have to stretch that all of this is just a tip of a much larger financial picture. It has to be gone over by tax accounts, by forensic accounts with a lot more information than we have here. But yes, if there's something that's claimed to be an investment property that is in fact a personal mansion, you shouldn't be deducting the property taxes from that.

[11:10:08]

Now, that - by the way, just because you shouldn't be doing something means you might pay a fine and penalty, it's not necessarily criminal, right? What we look for in criminal cases is are there badges of fraud?

Are they not only failing to pay the taxes but are they doing it in a way that's really kind of sneaky or looks like they're cheating? Like for example a series of shell companies or false records inside the Trump organization. Like say, you know, false invoices for consulting. If they have that, that starts to look more criminal.

So, I caution that just because they should have paid taxes and they didn't, that's not necessarily grounds for a criminal matter.

KING: Incredibly important context. Dan Alonso, former state and federal prosecutor, appreciate your time today, sir. Thank you.

ALOSO: Thank you.

KING: Up next for us, rising coronavirus cases sparking new fears of a fall infection surge.

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[11:15:18]

KING: There's new reporting today about the CDC director complaining that President Trump is taking bad advice from a doctor. He added, the White House Coronavirus Task Force because he liked what he saw on Fox News.

Dr. Robert Redfield was overheard saying that the advice from Dr. Scott Atlas on mask use, another topic is not helpful. The latest dust up comes as the numbers take a turn for the worst. We'll get to that reporting in a minute.

Let's look at the numbers first. 21 states, that's the orange and the red trending in the wrong direction. By wrong direction, we mean more coronavirus, new infections this week compared to a week ago. 21 states trending in the wrong direction. 19 states, that's the beige, you see most of it right here, holding steady. 10 states reporting fewer new infections now compared to a week ago. 10 states trending down but 21 states trending up.

If you go back one month ago, we had 16 states trending up. So, more states now trending up. And just notice. I'll show you the two maps. Just notice how this moves around. From week to week it is different states dealing with the problem.

You see the map a month ago. Now you see the map today. A lot of red on the northern swath of the country and out here in the west. That's where the problem is right now.

You are looking for cases where they're going to continue to rise. You look for high positivity rates and you have some pretty high numbers. The deeper the blue, the higher the positivity rate. 26 percent out here in South Dakota, 21 percent out in Idaho. 16 percent in Iowa. 18 percent in Wisconsin. You see double digits across that part of the country. That tells you, you have a problem. You have entire cases today plus with more people infected. More cases tomorrow and next week as well as you watch that playout.

Here's what the trendline looks like at the moment. And that tells you all you really need to know. The trajectory of that red line. The 7- day average of new infections is trending up again.

We went up the hill for the summer surge. We came down the hill but only about halfway down. 40,000 new infections we're now back above the average of more than 40,000 new infections every day in the United States of America as we turn and close in on October heading up in the wrong direction.

The death trend at the moment is down. You see it. It came down and went back up and started to trend down a little bit and has flat lined right here. A low number, yesterday, Sunday. Thankfully, 266, every death is horrible but a lower number than normal. Sometimes in the weekends they go down. And we'll watch that as the work week unfolds.

Death trend down a little bit. The hospitalization trend down but notice, down but now we're having cases again. Cases are going back up. Hospitalizations comes down and then it plateaus. It seems it has plateaued right here. Something else we need to watch as we go into the week and then into October.

So, Dr. Anthony Fauci puts it pretty bluntly. He says with that, more new infections that at the moment we are seeing the death numbers down but if you keep the case count rising, guess what will follow? More deaths.

(BEGIN VIDEO CLIP)

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: There's certainly parts of the country that are doing well, but as you mentioned correctly, there are states that are starting to show uptick in cases and even some increase in hospitalizations in some states. And I hope not, but we very well might start seeing increases in deaths.

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KING: In the hope not part, Dr. Fauci stresses wearing a mask and social distancing as does the CDC director, Dr. Redfield. But Dr. Atlas keeps telling the president the data on masks isn't conclusive and the president keeps repeating that advice even though the rest of the science team says it is dead wrong.

ABC News now reports Redfield shared his frustration with a colleague and was overheard complaining about Dr. Atlas and his influence on the president.

CNN's Nick Valencia is here with more. Nick, we have seen some of this frustration playout in public. But pretty astounding, the CDC director that the overheard saying my colleague is giving the president bad advice.

NICK VALENCIA, CNN CORRESPONDENT: Astounding is a great characterization of this, John. Dr. Robert Redfield was on a flight on Friday from Atlanta to Washington D.C., a commercial airline in which he was overheard by an NBC reporter talking on the telephone to a colleague in which he said, everything he says is false referring to Dr. Scott Atlas.

Now this is important because it's the first time that Dr. Redfield is publicly acknowledging that he is at odds with Dr. Scott Atlas who at this point appears to be the closest adviser to the president surrounding the pandemic. He has the president's ear. That much is clear.

And that's worrisome to public health experts that I spoke to especially at the CDC who say that Dr. Scott Atlas is potentially providing the president with misleading information. That's you know what Dr. Robert Redfield is saying here and the CDC is responding, not denying that Redfield said this.

Here's what they had to say in a short statement to us. Saying, "NBC News is reporting one side of a private phone conversation by the 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."

[11:20:02]

And just to really get context here to our viewers about what they're at odds here. Earlier this year, Dr. Scott Atlas reportedly promoted a strategy of herd immunity as a strategy for the pandemic. Now in September, he has since denied using that strategy or promoting that strategy while part of the task force.

But there are other concerns including his comments about the efficacy of masks and also more recently, who is still vulnerable to the coronavirus. Dr. Scott Atlas minimizing the amount of Americans that are still vulnerable to this. Dr. Redfield putting the figure at more so around 90 percent so a lot of concerns here.

A federal health official I spoke to earlier, John, confirmed the spirit of NBC's story saying Redfield is concerned about some of the stuff that Dr. Scott Atlas is saying. Again, John, Dr. Scott Atlas is a neuroradiologist. No background in infectious disease. He's not an epidemiologist so that should be concerning to the public health community at large. John?

KING: Clearly concerning to the CDC director. And we know other members of the task force have grumbled privately as well. Nick Valencia, thanks to that reporting.

Let's continue the conversation with our CNN medical analyst Dr. Celine Gounder. And Dr. Gounder, again, it's a question I hate to ask but here we go. It is remarkable. You have the CDC director publicly criticizing the doctor we know because he's the doctor the president invites up on the podium.

Now the other doctors are not invited anymore. They don't have the daily task force meetings anymore. They're lucky if they have one a week.

To have the CDC director overheard publicly saying the president is getting horrible advice from the doctor the president has picked to be at his side at a very precarious moment heading back up in terms of the new infection count back above 40,000 new infections a day. It is dismaying to me as a public health expert. What are your words?

DR. CELINE GOUNDER, CNN MEDICAL ANALYST: John, this is really confounding. Clearly, the president is trying to surround himself by yes men, not by true experts in the field. People who are infectious disease specialists, epidemiologists who have worked in public health departments which by the way, I have actually done all of those things.

You don't need a neuroradiologist for a coronavirus task force unless you're planning to read a whole bunch of MRIs of the brain. That's simply not in his wheelhouse to be advising on this kind of policy.

KING: And so, you mentioned, we should listen to the experts. I want you to listen here. One of the country's premiere experts on CNN this morning, Dr. William Haseltine saying that at this moment you see this case count going up and I just showed the states where you have positivity in high double digits, high tins. So, they obviously are the source of the major problem right now but the doctor makes a very good point. It's everywhere again.

(BEGIN VIDEO CLIP)

DR, WILLIAM HASELTINE, FORMER PROFESSOR, HARVARD MEDICAL SCHOOL: It's even in places like New York, Massachusetts, that seems to have controlled the epidemic. It's also very solidly all throughout the Midwest and rural communities which had hoped never to see this problem. This is a second wave not caused by the weather but caused by behavior. People loosen up their restrictions and it comes on.

(END VIDEO CLIP)

KING: The second wave in the doctor's view caused not by the weather or at least not predominantly in his view. More by behavior. When you're at a baseline of 40,000 plus new infections and you're starting to go back up, how dangerous is that?

GOUNDER: Well even here in New York we're starting to see cases tick back up. And some of that is indeed related to behavior. I think people even here who have done a very good job during the last several months, even here they're getting tired of the social distancing, the mask wearing and there's no question that we have seen an increase in cases related to Labor Day, the timing fits that scenario perfectly.

And then you also have the reopening of colleges, universities and schools more broadly which are probably contributing to some of this as well.

KING: And we've talked about this for some time so help me put the context on the table in the sense that the whole idea was if you social distance, if you use masks, if you try to flatten the curve that you don't eliminate the virus, you spread out the toll of the virus. So, some people would say, we knew this was going to happen. Other people, you just heard Dr. Haseltine, you said it yourself, behavior makes it worse. It doesn't have to get as bad as it's going to get.

Listen to Dr. Scott Gottlieb saying here is his worry. The counts of new infection is going up at a time, only 10, maybe 15 percent of Americans have been exposed meaning there are a whole lot of people still at risk.

(BEGIN VIDEO CLIP)

DR. SCOTT GOTTLIEB, FORMER FDA COMMISSIONER: About 10 percent of Americans have been exposed to this virus. The best modeling that I have seen that suggests that there could be a higher rate of exposure suggests that maybe it's as high as 15 percent but most of the models project around 10 percent. So, it means a lot of the country is still very susceptible to this virus. There's a lot of room for it to run.

(END VIDEO CLIP)

KING: It's just horrible to hear that. There's a lot of room for it to run. Let us explain to people watching what that means.

GOUNDER: Well, if you still have 90 percent of the population that is susceptible to this, a big proportion of them will likely be exposed and infected if we don't take the appropriate measures over the course of the winter.

[11:25:00]

And even if you're talking about a case fatality rate of let's say 1 percent, 300 million people, 1 percent of that is still far too many people that you're talking about getting sick and dying from this. So, on top of that, if you factor in the fact that we have the flu coming up and that's going to be overwhelming hospitals on top of COVID. You know we have a lot of work to be doing to try to prevent transmission here.

KING: A lot of work to be doing. It would be nice if the president's team were on the same page. Dr. Gounder, grateful as always. Thank you very much.

Up next for us, what the president's Supreme Court pick could mean for your healthcare.

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