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Accounting Firm: 10 Years Of Trump Organization Financial Documents Unreliable; Jurors Find "New York Times" Not Liable In Sarah Palin's Defamation Suit; Ukraine Requests International Assistance From NATO; Rep. Seth Moulton (D-MA) Discusses Ukraine/Russia Tensions; Prince Andrew & Virginia Guiffre Reach Settlement In Sexual Abuse Lawsuit. Aired 2:30-3p ET

Aired February 15, 2022 - 14:30   ET

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

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[14:32:52]

ALISYN CAMEROTA, CNN HOST: Accounting firm Mazars has cut ties with the Trump Organization. They say the company's financial statements from 2011 to 2020 are not reliable.

In a letter, Mazars wrote to Trump's firm, they wrote:

"While we have not concluded that the various financial statements as a whole contain material discrepancies, based upon the totality of the circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate."

VICTOR BLACKWELL, CNN HOST: Mazars also directed the Trump Organization to inform others like insurers or lenders to not use those statements.

Joining us now is Tim O'Brien, executive editor at "Bloomberg View" and the author of "Trump Nation: The Art of Being the Donald." And CNN chief legal analyst, Jeffrey Toobin, from federal prosecutor.

Welcome to you both.

Tim, let me start with you.

If your accountant says, hey, you know that huge company that is being investigated every which way, don't trust their numbers, how do you get another accountant?

I mean, essentially, this is a threat to even staying in business.

TIM O'BRIEN, EXECUTIVE EDITOR, "BLOOMBERG VIEW" & AUTHOR: It's -- it can be a mortal threat to staying in business. We'll have to see how this plays out.

But any business that has an accountant head for the exit is in a lot of trouble. It means it's hard to raise fresh funds. It means it's hard to get a new accountant in the door. It means it's hard for other people to feel confident about doing business with you. That all is magnified when you're in the real estate business, because

the life blood of any big real estate enterprise is bank loans. They all are heavily indebted.

And even in an industry in which most of the players are heavily indebted, Donald Trump has always been more heavily indebted than most.

And in his case, he's got about nearly $600 million in short-term debt that he's going to need to refinance over the next four years. Half of which he's personally guaranteed.

And it's going to be very hard for him to find other banks that are going to be willing to help him roll those -- roll that money over and make it easier for him to pay the loans back.

It's very similar to anyone who has a mortgage on a home and has an interest rate on that mortgage that becomes unmanageable and they look around for help.

[14:35:06]

The difference here is, this is hundreds of millions of dollars more than other people have. So, that's, you know, an immediate threat to his business.

It also is going to enormously, I think, complicate his legal defense in two significant financial fraud investigations that are going on in New York.

ALISYN CAMEROTA, CNN HOST: Jeffrey, I'm not sure this should have come as a surprise to Mazars, they shouldn't have known there wasn't some cooking of the books or fuzzy math going on.

Michael Cohen has been trying to sound the alarm and tell anybody who will listen about this for least the past two years. He told it to the congressional committee. He told it to us. This was last month.

I'll let him explain how the math worked at the Trump Organization.

(BEGIN VIDEO CLIP)

MICHAEL COHEN, FORMER TRUMP ATTORNEY: He would literally add $3 billion to his net worth simply in a matter of under 60 seconds.

And our job -- when I say ours, I'm referring to mine and Allen Weisselberg -- was to go back with those documents, figure out how to increase the net worth, go back to Donald in order to show him, for his approval. That's how it worked.

(END VIDEO CLIP)

CAMEROTA: So, Jeffrey, don't they have any liability or, you know, legal problem that they allowed themselves to be duped for so long?

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Well, it's also a question of who benefitted.

Yes, it is possible that Cohen and Weisselberg could be charged as co- conspirators but the real beneficiary of false statements would be the owner of the Trump Organization, which is Donald Trump.

And you know, let's remember what these documents were used for, these financial statements that Mazars prepared. They were used to obtain bank loans. They were used for the filing of income tax and property tax returns.

It's a crime to file false statements. Even if you wind up paying the tax or paying back the loans. It is a crime. It is a felony to submit false documents to get a loan or in a tax return. And that's the problem.

(CROSSTALK)

CAMEROTA: But that's what I mean. I mean, Mazars. Doesn't Mazars have some legal liability here, some responsibility that they were allowing this fuzzy math?

TOOBIN: Potentially. The issue with Mazars would be, did they know the material was false? Did they know they were getting false information? If that's the case, they do have potential liability.

But if they were simply provided false information by Donald Trump and his colleagues in the Trump Organization, I don't think they have liability.

But they have been cooperating with these investigations/

And clearly, the attorney general, who's conducting the civil investigation, based on a big document she filed a couple of weeks ago, she thinks there was an enormous amount of false information in the papers that Mazars prepared.

BLACKWELL: Well, Tim, on potential exposure for Mazars, you write there were concerns years ago, and now they just get to this point.

Tell us about what, you know, when you started writing your book, some of the questions that came about.

O'BRIEN: Well, Victor, to get to that and I think to what Alisyn just raised, this goes back to well before 10 years ago.

We deposed these same accountants in our litigation with Trump. That was in the mid-2000s. Going on more than 15 years ago.

Around the same issues. He was inflating the value of his assets. He was offering paperwork that his accountants had signed off on, saying that these numbers are more or less correct, when they were wildly off.

Here's the important distinction. Mazars knew that was going on a long time ago. The documents that they signed off on in the litigation that I had with Trump, and the documents that are referenced in that letter last week, I actually don't think were necessarily given to banks.

They never signed off on those and said, these are -- comport with generally accepted accounting practices.

They just said, the Trump Organization gave us some numbers, we think it's OK, this may be how much money Donald Trump has.

I think they prepared it completely separate set of accounting papers for banks and other investors.

Certainly, some lenders got the statements of financial condition. Any of them that went ahead and loaned Donald Trump money based on this needed to get their heads examined.

I think the reason Mazars is coming clean about this charade they've been involved with, with Trump, for decades is because. back when journalists like me and others were asking questions about this, there weren't legal consequences for them.

They now have two very well-heeled prosecutors breathing down their neck, and I think they're worried about their own legal exposure. And that's why they're finally coming clean about some of this stuff.

[14:39:59]

CAMEROTA: All right, we have some breaking legal news.

So, Tim O'Brien, thank you so much.

Jeffrey Toobin, stay with us, if you would.

Jurors have found "The New York Times" not liable in Sarah Palin's defamation suit against the paper.

BLACKWELL: CNN's Brian Stelter joins us now with an update. And Jeffrey sticks around.

First, tell us about this verdict.

BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT & CNN HOST, "RELIABLE SOURCES": That's right, the jury greeting with the judge.

This time yesterday, the judge came out and said, in a rather unusual move, he said, I believe this case does not have merit. Sarah Palin's lawsuit does not have merit.

Basically, he was saying this shouldn't have gone to trial but it had already gone to trial. And after seeing all the evidence, he said this was not adding up.

The jury has now said the same thing.

The jury says, "The New York Times" is not liable in this case. And that even though "The New York Times" screwed up when they wrote about her in an editorial in 2017.

There wasn't enough evidence that it happened on purpose, that the "Times" was doing it maliciously. That's the standard.

The jury believes and agrees with the judge.

And the judge said in court just now, you decided the facts, I decided the law. As it turns out, they were both in agreement in this case.

"The New York Times" obviously pleased by this ruling, saying yesterday, and about to say the same thing again today, that public leaders should not be permitted to use libel suits to punish or intimidate news organizations that make, acknowledge, and swiftly correct unintentional errors.

If this newsroom or any other newsroom screws up and corrects it, that's not something you can sue and try to get millions of dollars for.

However, we know some conservative lawyers would like to challenge that high standard.

So now, Palin may appeal. This may go to a higher court. But it's important to know the judge and jury are in alignment on this.

CAMEROTA: Jeffrey, what do you see?

TOOBIN: Well, this is -- this was a very big deal, this case. It was certainly just an embarrassment to "The New York Times" because they did make a mistake, as they acknowledged, but they did correct it the next day.

Just to remind people who may not have been following this very closely, this involved a gun control -- an editorial about gun control where, in the original version of the story, the "Times" said that Palin targeted -- put targets on Congressmen, including Gabby Giffords, who was later shot. That was not true.

The -- Sarah Palin's political action committee put targets on congressional districts but not on individual representatives.

This libel suit was a classic example of how the law currently protects journalists.

Ever since a famous 1964 case in the Supreme Court, it's been difficult for public figures to win lawsuits because they have to show that the journalists act with reckless disregard of the truth. That's the key phrase.

Both the judge and the jury here agree that "The New York Times" did not show reckless disregard for the truth.

Some conservative lawyers, two justices on the Supreme Court, Clarence Thomas and Neil Gorsuch, have said the law is too protective of journalists, we need to change the law.

So, as this case works through the appellate process, it may be an opportunity for some conservative judges to try to cut back on the protections. But, at least as the law stands now, it's protective of the press. And both the judge and jury agreed that Sarah Palin's case did not have merit.

BLACKWELL: All right. Jeffrey Toobin, Brian Stelter, case with significance both journalistically, constitutionally, and of course, politically as well.

Thank you both.

TOOBIN: Thanks.

[14:43:34]

BLACKWELL: Well, Russia claims it's pulling some troops back after military exercises. Vladimir Putin says he's ready to discuss what he calls "confidence building measures" with the U.S. and NATO, but many global leaders are skeptical. That's next.

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[14:48:30]

Breaking news now, Ukraine is preparing for large-scale emergencies of various nature that can affect its civilian population. That's according to a statement just put out by NATO.

President Biden will give an update on events in the region and ongoing diplomatic efforts. That's coming in the next hour.

Joining me now is Democratic Congressman Seth Moulton of Massachusetts. He's a member of the House Armed Services Committee and a Marine Corps veteran.

Congressman, good to see you again. Thank you for your time.

REP. SETH MOULTON (D-MA): Good to see you, Victor.

BLACKWELL: Let's start here with this request that came into NATO from Ukraine where they're asking for critical items.

They're talking machines for radiation, chemical reconnaissance, equipment to search for explosive objects, thermal imaging equipment. It's a long list.

Should NATO supply all of this to Ukraine? You've been critical of the administration and others for their -- the pace of their support.

MOULTON: Well, that's right. I think the administration is actually doing all the right things, including getting supplies like this to the Ukrainians.

But it's a bit late now. It's taken a bit too long.

The problem with delivering any supplies to them at the moment, especially technical gear like this and other weapons, is that we don't have time to train the Ukrainians on how to use them.

You know, we can deliver Javelin anti-tank weapons systems. But if we don't have troops in-country to train the Ukrainian troops on their use, then really we're just leaving them for the Russians to pick up when they invade.

[14:50:01]

BLACKWELL: So how do you solve it? I mean, the president has said there will be no U.S. troops there in any combat troops in Ukraine.

Do you deny the request because they've not been trained or do you go in with to train them on this equipment?

MOULTON: No, the president is right. The administration is working so hard to get all our NATO allies unified. I think NATO is quite unified here.

What I was calling for back in December was a pre-set package of sanctions that's already to go so Putin knows the second he invades, the consequences will be severe and targeted sanctions so they will hit him and his oligarch allies, personally.

You said there should be stronger diplomacy. Do you believe Putin does not, as he says, he does not want war? There's an opportunity for him to pull back. There are off ramps?

MOULTON: Well, look, in a perfect world, he would get everything he wants without having any Russian troops die. That's still a possibility. It's in everybody's best interest in a sense.

Except the problem is there's not a lot we can give him that NATO is willing to give up here. And it's important for NATO's credibility that we don't sell the store to Vladmir Putin.

Having said that, let's understand that Putin is ruthless. He's willing to invade.

And part of what his invasion strategy entails is sowing confusion and creating justification for invasion. Those two are intertwined.

If he's sowing confusion today, it's easy to manufacture justification for invasion.

I'm not putting much stock into this cautious optimism that people are talk about diplomacy is back on the table. Make no mistake, diplomacy is the first option.

I know personally the cost of war. And the last thing I want to see is another massive war in Europe.

I also don't think we should underestimate what Vladmir Putin is trying to do is play it to his game. We need to be prepared for a full-scale invasion.

BLACKWELL: Do you think he's made up his mind? MOULTON: No. Until the troops cross the line, he has the power to say

no, to say stop. That's why 11th-hour diplomacy still counts.

That's what the administration is focused on now. It's what they should be doing.

I wish we could see a bit more unity in Congress between Democrats and Republicans in supporting this effort.

I will tell you, behind the scenes, the majority of Congress is aligned here. We want to do what it takes to find a solution to stop Russia's march further across Europe.

It's unfortunate some of my Republican colleagues are really not playing on the same team here and are creating chaos in term of these negotiations.

You've got the Tucker Carlson crowd siding with Russia, which is what Trump used to do.

The majority of Americans here know that. if Russia succeeds here, if Putin succeeds in invading Ukraine, we all have to ask what's next.

BLACKWELL: Congressman, let me lean on your experience. You mentioned the four tours in Iraq as a Marine. We have a source that says an invasion is more likely this week than not.

Also the reporting from CNN that at least 60 transport attack and helicopters that have arrived in Russia controlled Crimea. We've seen the buildup of resources, troops. These helicopters in Crimea.

Is that some specific enhanced relevance now that we see the helicopters?

MOULTON: I think we got to be careful about reading too much into any one particular intelligence report.

It's been obvious to me for some time that you don't array this kind of force, 100,000 troops. and all the supporting capabilities as well all-around Ukraine's quarter if you don't plan something significant.

This costs money. It costs time. It costs effort.

This is hurting the Russian economy, to a certain extent, to have these troops in place.

A lot of people have been underestimating Putin's willingness to conduct a full-scale invasion for a very long time.

When I went to Kyiv in December and saw the way the Ukrainian forces were arrayed, mostly to the east, and how close the capital of Ukraine is to Russia, I said this is dangerous.

Putin could come in here and take out the capitol. And I don't think we're adequately prepared for that scenario.

[14:55:03]

BLACKWELL: All right, Congressman Seth Moulton, a member of the House Armed Services Committee, thank you for your time and perspective, sir.

MOULTON: Thank you.

CAMEROTA: Now to this, Prince Andrew has reached a financial settlement in the sexual abuse lawsuit from Virginia Giuffre. New details, ahead.

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BLACKWELL: Court documents show that Prince Andrew has reached an agreement with Virginia Guiffre. She's the woman who accused him of sexually abusing her when she was a teenager while she was being trafficked by Jeffrey Epstein.

CAMEROTA: CNN royal correspondent, Max Foster, has details.

Max, do we know the amount of the settlement?

MAX FOSTER, CNN ROYAL CORRESPONDENT: We don't have the amount.

An extraordinary U-turn, Alisyn, when you consider they were heading towards full trial. They all felt confident on both sides of doing that. Now we hear this out-of-court settlement. They're not giving us the sum.

And Prince Andrew is not accepting any guilt. He doesn't accept any of the charges made against him.

I think we're about to go to a period of depositions and disclosure would have been very embarrassing to Prince Andrew and to the royal family to have conversations exposed.

[14:59:52]

So I think out-of-court settlement was a preference for the royal family. Did they lean on Prince Andrew to reach that point? We don't know.

We'll wait to find out one day, I'm sure, why they decided, on both sides, to reach an out-of-court settlement rather than going to full trial.