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New York AG Announces Criminal Probe; House to Vote on Commission; Brown's Family Asks for DOJ to Intervene. Aired 9-9:30a ET

Aired May 19, 2021 - 09:00   ET

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

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[09:00:42]

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

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

A big development overnight.

Criminal capacity. Those are the words being used in a new statement from the New York attorney general as her office ramps up its sweeping investigation into the Trump Organization, now adding a criminal component to what has been an ongoing civil probe. It is a serious move, and it's a move that adds even more legal pressure as the organization faces claims of tax and bank-related fraud. The former president's finances and freedom now under new threat.

SCIUTTO: Also today, as soon as the next hour, House Republicans with another chance to choose between truth and Trump. But right now their leaders are urging those Republicans to vote against what was a bipartisan -- that's right, Republicans and Democrats involved in making this deal -- a bipartisan deal to form an independent commission to investigate the Capitol attack.

Top House Republican Kevin McCarthy now mobilizing the effort against a bill that he tasked one of his Republican members with negotiating. Remember, McCarthy and former President Trump could face subpoenas if the commission forms. Will loyalty to and fear of the former president win again? We'll find out and we'll have more on that in a moment.

We do begin, though, with CNN's Kara Scannell. She is covering Trump's new legal trouble.

Kara, do we know what the potential scope of the criminal capacity here, as they're describing it, would involve?

KARA SCANNELL, CNN REPORTER: Well, good morning, Jim. I mean so what we learned last night is that the New York attorney general's office, which had been conducting a purely civil investigation, has now joined forces with the Manhattan District Attorney's Office.

And the AG's office, which is led by Leticia James, has been conducting a civil investigation into whether the Trump Organization had improperly inflated the value of some of its assets in order to obtain bank loans or to get favorable tax treatment. This involved properties including some of the skyscrapers in New York that are owned by Trump, as well as the family estate in West Chester County, known as Seven Springs.

Now what we've learned is that the AG's office has joined forces with the Manhattan District Attorney's Office, led by Cy Vance Jr. That investigation is very similar in nature. And this is why there is this ability for them to work together here.

Now, the AG's office last night told us that they've recently informed the Trump Organization. Here's what the spokesman said in a statement. He said, we've informed the Trump Organization that our investigation is no longer purely civil in nature. We are now actively investigating the Trump Organization in a criminal capacity along with the Manhattan DA.

Now a source familiar with the investigation said that what this really means in practice is that a couple of the attorneys working at the AG's office have now joined forces and teamed up with the DA's office. So they're sharing their knowledge. They've been deep into the weeds of the Trump Organization and they will been able to use that and to work with Vance's office as they pursue this criminal investigation.

Jim. Poppy.

HARLOW: It's a big development overnight. Kara, thank you very much for your reporting on it.

Former federal prosecutor Laura Coates joins us now to break this down.

Laura, what does this mean for, obviously, the organization but also for the former president?

LAURA COATES, CNN SENIOR LEGAL ANALYST: Well, this is increasingly serious for not only Trump Organization but for former employees, current employees, possibly the former president of the United States of America.

I mean the idea that you had these two independent investigations that were not introduced at the exact same time and for different reasons, at different points in time, have now joined forces all these months later, you have to wonder, what is the new information that led them to say we need to coordinate, to share information here.

Remember, this largely began around the time that we heard from the former attorney and former fixer, Michael Cohen, admit to the inflation of assets and the depreciation of those asset, whether you're talking about tax benefits or trying to secure loans. And that has prompted what Cy Vance was doing. But now you're talking about the idea of how you're paying employees,

Allen Weisselberg as well and what he may have been doing as his executive in the corporation. All this is a very, very long trail. And, of course, you no longer have the idea of a sitting president. This is not a federal charge or a federal case. This could have extraordinary consequences that are very wide reaching. And if they're coordinating it, they're making it known they're investigating, I suspect there is a way to follow this thread to something very meaningful.

[09:05:02]

SCIUTTO: So the allegation hanging over this from the beginning has been that, in effect, Trump and the business were playing a double game, right, inflating assets to get loans, deflating income to avoid tax liability. I just wonder, typically, does that kind of behavior lead to criminal prosecution or more likely in practice to lead to tax penalties?

COATES: It's often in tax penalty, which is why you're talking about the elevation now to say it's not purely a civil matter any longer. What now you're talking about the intentional conduct, criminal conduct, not the idea of bureaucratic paper pushing, trying to secure the finances and the ability to get taxable income on what was depreciated or what you were able to have forgiven as debt.

When it elevates the criminal context, you're talking about behavior that's far more nefarious. And we treat our criminal sections versus our civil sections and our justice system differently. Not because we don't value above-board behavior, but because the penalties at stake are, one, liberty, and the other actually a check being written.

To combine these two raises the stakes for the attorneys. And to combine it from not only the AG's office in New York, but also in Manhattan, says that this is something that is far more expansive and there is some indication, either talking about criminal investigations, some indication that it merits there to be a penalty of the deprivation of liberty as well.

SCIUTTO: Wow.

HARLOW: Laura, it's interesting that the attorney -- New York Attorney General's Office didn't explain, a, what prompted the change, now -- why now, and -- and why they released it publicly. They don't have to do that. What do you think?

COATES: They don't -- yes, they don't have to do that, but the idea of saying, hey, we've now informed them. From that, you know, sort of very terse actual explanation, they didn't say when they informed the Trump Organization. They didn't inform them as to how long they've known about this, but the idea that it's no longer purely civil is one that they have now made publicly known.

And you have to wonder, if you're doing that, are you putting people on notice who might be potential witnesses? We know that Eric Trump has already, at some point, as part of one of these investigations, been interviewed. Others as well.

And so are you putting people on notice who might want to come forward in some way as a cooperator? Are you trying to essentially send a shot across the bow? They've got a lot of leverage already by virtue of this being a prosecution from two separate offices against somebody who is not shielded by his office in any way even at the state level.

So I do wonder, why now, what has come to light, and why the coordination, which can be quite rare between these two offices.

SCIUTTO: Yes. And you read my mind there, Laura. I was thinking cooperation witnesses, right? You know, could that happen here?

Laura Coates, thanks so much.

Now to the Capitol where the fate of an independent commission, bipartisan commission, to investigate the deadly January 6th attack now rests squarely on Republicans. And there's a split.

HARLOW: There is.

Our Lauren Fox joins us on Capitol Hill this morning.

Lauren, good morning.

We've got House Republican leaders now urging their members to vote against it. I mean essentially whipping them, even though I think they said they weren't going to do that.

I mean what does it mean for all of this, especially in the Senate?

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Well, yesterday McCarthy and Scalise made it clear that they are opposed to this commission. And I think that that was surprising to some Republicans who thought that their leadership would view this as a vote of conscience. Last night, Scalise's office sending out a recommendation that members vote against this legislation and to inform their office if they planned to vote for it.

Now, they're arguing that that is not explicitly whipping against the bill but that this is a recommendation. But clearly the implication here is that leadership is opposed to this bill moving forward.

We still expect that there could be a few dozen House Republicans who vote with Democrats to create this commission, in part because John Katko, who was one of the leading negotiators on this bill, is supporting it. You also had a vote last night of the Problem Solvers Caucus, which is a Republican and Democratic bipartisan group. Many of the members in that group voted in their own caucus to actually vote on the floor in support of this bill. So we expect that there could be a few dozen House Republicans, again, willing to vote with Democrats on this.

But your problem goes when you move over to the U.S. Senate. And I think that that's a significant factor here. You would need ten Republican senators to actually pass this bill and create the commission at large. Right now, it's not clear that the votes are there.

SCIUTTO: It seems that McConnell is opposed not to a commission at all but to the current structure of this commission as negotiated. I mean before a potential Senate vote, is it possible that they could negotiate changes?

FOX: Well, I want to take you a little behind the scenes. In the Republican lunch yesterday, McConnell and other leaders walked their members through what some of the issues with the House bill are.

[09:10:05]

And I think that that was a key step for McConnell to sort of signal to members there are changes we would like to see. One of the issues that was underscored in this meeting was the fact that they are arguing that there was already committee work underway getting at some of the fact-finding pieces of what happened on January 6th and that some of the efforts by a commission would be duplicative. And I think that that's important as you sort of think about how Republicans are looking and framing this.

Now that's not to say that they couldn't negotiate changes moving forward, but I think that that's a heavy lift. Again, things are still very uncertain in the senate. It's possible that they get ten Republican votes. You have some Republicans, like Senator Mike Rounds, Senator Lisa Murkowski, Senator Mitt Romney signaling that they would be willing to support a commission, potentially even the House-passed bill. But I think that there's still a lot of work to do, Jim and Poppy, and I think we'll get a better sense of that once the House passes their bill and sends it over to the Senate.

SCIUTTO: Yes.

HARLOW: OK. Thank you, Lauren, very much.

SCIUTTO: Joining us now to discuss, Jackie Kucinich, Washington bureau chief for "The Daily Beast," and Rachael Bade, co-author of "The Politico Playbook."

Good to have you both on.

Rachael, you have some new reporting about McConnell. I just, for the sake of our viewers, want to remind them of how blistering McConnell was in his criticism of the insurrection and President Trump's -- former President Trump's involvement in it, even as he was voting no in the Senate trial and then contrast that to where he may stand today.

Have a listen.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY) (February 13, 2021): There's no question, none, that President Trump is practically and morally responsible for provoking the events of the day. No question about it. The people who stormed this building believed they were acting on the wishes and instructions of their president.

(END VIDEO CLIP)

SCIUTTO: Again, he was brutal in his criticism of that day. Now he stands against a bipartisan commission to investigate it. What changed, Rachael? Where does he stand, based on your reporting?

RACHAEL BADE, CNN POLITICAL ANALYST: Yes, I mean clearly he wasn't mincing words back then. Very much blasted Trump. We had reporting behind the scenes that he very much wants to move on from him, and I think that still stays the same.

The difference now is that McConnell doesn't want to talk about this anymore. In order to win back the Senate, he thinks this is a losing discussion. And in that sense he's very much in the same position that McCarthy is on this, wanting to sort of turn the page and not talk about January 6th anymore.

Our reporting indicates, you know, yesterday he came out publicly and talked to reporters and said, look, I'm open to this commission, I'm going to give it a close look, but I've heard from sources about the Senate Republican lunch that Lauren started to talk about just a few minutes ago.

He laid out a number of concerns. He had two of his ranking Republicans (INAUDIBLE) chairman (ph) come up and talk about the work they have been doing for the past five months to investigate January 6th. They specifically said that in the next couple of days, couple of weeks there's going to be some sort of report coming out from these two committees, talking about January 6th. The point was to sort of argue that perhaps this could be duplicative.

He also raised concerns about the staff for this commission being chosen by a person who's going to be appointed by Democrats and he would want Republicans on this commission to also be able to hire their own staff. And that's something that he can negotiate with Schumer on, but some of these other concerns, you know, he's not going to get addressed even through a negotiation.

Another thing that came up in the lunch was the clock on this. You know, the commission is set to finish their work by the end of this year, before election season sort of kicks into high gear. You know, McConnell and Republicans brought up the fact that this could very easily sort of spill into next year, which really would complicate their election message.

Again, they see this as something that could hurt them if they're talking about January 6th when they're trying to flip the Senate. And so there's a concern -- there's a political concern very much. And that's something that you can negotiate all night, all day. That's not going to change, I don't think.

SCIUTTO: Yes. Yes.

HARLOW: So to you, Jackie, it's not for nothing. McCarthy got almost everything he asked for, by the way, in this deal. JACKIE KUCINICH, CNN POLITICAL ANALYST: Right.

HARLOW: An equal number of Democrats and Republicans, subpoena power that they have to agree on before they subpoena someone. You know, it's like, a kid asks for what they want and then they go stomp into their room when they get almost all of it. I mean that is what's happening here.

Our reporting from Jamie Gangel is fascinating overnight, that this is about being scared. She says, from a Republican source with knowledge, McCarthy got too scared and he can't let it go anyplace. And now you have Lisa Murkowski, Republican in the Senate, saying this.

Listen.

(BEGIN VIDEO CLIP)

MANU RAJU, CNN CONGRESSIONAL CORRESPONDENT: Do you think former President Trump should talk to this commission to detail what was happening on that day?

SEN. LISA MURKOWSKI (R-AK): If you put together a commission that is focused on the events of January 6th, I think he's, obviously, a very key individual.

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[09:15:05]

HARLOW: And McCarthy talked to Trump during the insurrection. Where does this go, Jackie?

KUCINICH: Well, and Trump said yesterday -- put out a statement yesterday that he hopes that McCarthy and McConnell were listening and that he thinks that this commission should be blocked. Our reporter Sam Brody reported overnight as well that McCarthy has looked at this and has decided that anything that would have -- in this committee would unearth damning evidence against the president or his supporters.

That wouldn't work out well for him and his big dreams to become speaker. So that, when you think about Kevin McCarthy, you always have to keep that -- that he believes that the majority runs through Mar-a- Lago and anything that would complicate that is going to be something that he tries to prevent.

This is about power.

SCIUTTO: Yes. Yes.

KUCINICH: And a lot of his members aren't behind -- are of the same mind. There might be, yes, Rachael's absolutely right, there are going to be -- there are going to be members that support this. However, I think the vast majority of the Republican conference is very much in line with McCarthy. SCIUTTO: Rachael Bade, Rep. Benny Thompson, the chairman of the

Homeland Security Committee, he zeroed in on what he believes might be the motivation for McCarthy here, and that is his fear of being called to testify and speak to, for instance, as Poppy was saying, his conversations with Trump in the middle of this. I mean how much of this is self-protective from the Republican leader?

BADE: I mean, a lot of it. Clearly, McCarthy, being subpoenaed by a potential commission and being forced to sort of recount that conversation with Trump that was key to the impeachment inquiry, the impeachment trial in the Senate would not be good for McCarthy. Trump doesn't want him to talk about this.

And, I mean, just going back to this predicament he is in, he not only tapped John Katko to negotiate this deal.

SCIUTTO: Yes.

BADE: He also -- his office was also in touch with Katko. They gave him a whole list of things that Katko was supposed to secure and Katko was able to do it. And still he -- there's no commission. I think if they gave him 100 percent of what he wanted, he still wouldn't be able to support it and still maintain the support of Trump.

SCIUTTO: Yes.

BADE: And, again, going back to what Jackie said, he wants to be speaker. He needs Trump to prove (ph) it.

SCIUTTO: That sounds like a bad-faith negotiation to me.

KUCINICH: If I could just add --

SCIUTTO: I mean -- I may be alone, but, I mean, give him a list, go negotiate it and say, ah, forget about it.

HARLOW: Jackie?

KUCINICH: Oh, no, I was just going to add to what to -- Rachael's good point about McCarthy potentially having to testify. We should remind everyone, the only reason we know that Trump spoke to McCarthy that day is because of Congresswoman Jaime Herrera Butler and her account of what McCarthy told her.

HARLOW: Right.

KUCINICH: McCarthy has not been forthcoming about what happened that day. We know it through other people. And I don't think he really wants the opportunity at this point to tell his side of the story.

HARLOW: Thank you, ladies. Rachael Bade, Jackie Kucinich, thanks so much.

SCIUTTO: Thank you.

HARLOW: We have a lot ahead this hour. Still to come, a district attorney in North Carolina says the police killing of Andrew Brown Jr. was justified. Well, now, Andrew Brown Jr.'s family wants the Justice Department to get involved.

Also, New York, once the epicenter of the coronavirus pandemic, lifting its mask mandate indoors for fully vaccinated people starting today. We're live in New York.

SCIUTTO: And the secretary of state set to meet his Russian counterpart in just a matter of hours. That could set the stage for a high-profile meeting between President Biden and President Putin themselves. What is at stake? What are they going to talk about, just ahead.

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[09:22:56]

HARLOW: The family of Andrew Brown Jr. is now calling on the Justice Department to intervene after a North Carolina district attorney said yesterday that deputies were justified there in using deadly force when they shot and killed Brown last month.

SCIUTTO: DA Andrew Womble said on Tuesday that those deputies would not be charged in connection with Brown's death. North Carolina Governor Roy Cooper tells CNN he thinks federal officials should, however, investigate the shooting themselves.

CNN's Joe Johns is in North Carolina. He's been following this story.

Joe, what was the district attorney's explanation for charging those officers? I watched the tape. I saw the press conference. Explain it to us.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, he says it's all about the law, plain and simple. It's all about the standard for the use of deadly force. That a police officer can use deadly force, in other words, shoot his weapon whenever he perceived a serious threat of imminent harm to himself or a third person. He says the threat was there because of the way Andrew Brown was using his car.

But the question has always been whether Andrew Brown was using his car to try to get away. So here's Andrew Womble, the district attorney, in his own words.

Listen.

(BEGIN VIDEO CLIP)

ANDREW WOMBLE, DISTRICT ATTORNEY FOR PASQUOTANK COUNTY, NC: When you employ a car in a manner that puts officers' lives in danger, that is a threat. And I don't care what direction you're going, forward, backward, sideways. I don't care if you're stationary, and neither do our courts and our case law.

(END VIDEO CLIP) JOHNS: So he also released just a snippet of the video that's been so controversial here in Elizabeth City in which you can see how the events transpired. Of course, there continue to be demonstrations here in Elizabeth City, including one last night. I talked to the people out who were watching. And there is, obviously, anger, a sense of dissatisfaction, but there's also this feeling of unfinished business, if you will, that they haven't released all of the video so people don't know what is on the video.

[09:25:09]

They don't know the names of the officers involved. And there's a real question here because of the lack of transparency from the very beginning. And that's partly because of North Carolina law.

Back to you.

HARLOW: Yes.

SCIUTTO: Joe Johns, thanks for that.

Well, millions of fully vaccinated people in New York state can now go mask free indoors starting today. It's a remarkable turn in that city, particularly if you saw it several months ago in the midst of this. Are New Yorkers ready for the change? We're going to be there live.

HARLOW: We are also moments away from the opening bell on Wall Street. Take a look. Futures pointing a bit lower this morning. Dow futures fell some 300 points earlier in the day. Nasdaq lower as tech stocks slipped. Stocks ended yesterday in the red after modest gains in the morning. Investors still facing a lot of uncertainty over inflation.

We'll watch it.

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