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Drought Impacting Nearly Three-Quarters of U.S Farmers; Today, Judge Hears Argument on Unsealing Mar-a-Lago Affidavit; Ex-Trump Organization CFO Pleads Guilty in Tax Fraud Scheme. Aired 10:30-11a ET

Aired August 18, 2022 - 10:30   ET

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

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[10:30:00]

JIM SCIUTTO, CNN ANCHOR: This morning, new information about the severe drought persisting across the western U.S. This comes as the area fights to preserve water, as levels keep dropping to dangerous lows. I mean, look at the pictures of those reservoirs, it is crazy. And that is not the most significant finding.

BIANNA GOLODRYGA, CNN ANCHOR: Yes. Meteorologist Chad Myers is live at the CNN Weather Center for more.

So, Chad, break it down for us, how bad is it right now and which areas are getting hit the hardest?

CHAD MYERS, CNN METEOROLOGIST: Sure. We'll go area by area. Back out to the west, getting a little bit better, except for Texas and California. Off to the east, getting a lot worse. I don't have to tell you if you're looking at me from Massachusetts, Rhode Island, Connecticut, it is dry. The grasses are literally crunching as you walk on them.

This is a flash drought because it really wasn't here about four or five weeks ago. Back you up two weeks, these extreme areas here across parts of Massachusetts and Rhode Island were not here. But it just hasn't rained at all. So, now all of a sudden, all of Massachusetts in a drought, first time in seven years, all of Rhode Island in extreme drought. You got Connecticut, you have Long Island, even parts of Upstate New York in on this act too.

Now, I take you back out to the west. Here's where we had some improvement, Colorado, Utah, parts of Nevada and Arizona. It has rained. It hasn't been widespread, but there have been rains. Texas got worse. It has not rained. It may rain this weekend and a lot in some spots but it hasn't rained lately. And then back out to California. I take you back two weeks, a lot worse in some spots. Watch Nevada, watch north of Vegas go from the dark red to, I guess, only red. That's some good news, but you're still in a major drought.

Every Thursday at 7:30 Central Time, at -- from the University of Nebraska here, and also the Drought Mitigation Center in (INAUDIBLE), Department of Agriculture get together and put these maps together. This is the one that came out this morning. We will have a new one that comes out next Thursday. Hopefully, we see significant improvement here across Texas. Some spots, guys, could pick up five inches of rain over the next week-and-a-half.

SCIUTTO: Wow. Fingers crossed.

GOLODRYGA Much needed, yes. But what stands out is that nearly every part of that map in the United States is dry right now. Chad, thank you.

MYERS: You're welcome.

GOLODRYGA Well, nearly three-quarters of the U.S. farmers say this year's drought is hurting their harvest and impacting their own income. And that will lead to higher prices for things like fruits, nuts and vegetables.

In the southwest, there is also real concern about the water supply. Back in June, the federal government mandated that states sharing the Colorado River come up with the plan to significantly cut back on water consumption.

SCIUTTO: But, that hasn't happened yet. Even as critical reservoirs, like Lake Mead, there it is, hit just dangerously low levels.

Joining us now is one of the people involved in those ongoing negotiations, John Entsminger, he's the general manager for the Southern Nevada Water Authority. Good to have you on, John.

And, listen, you've been sounding the alarm there, even to the extent that you wrote a letter to the U.S. Bureau of Reclamation commissioner, Camille Touten, and U.S. Secretary for the Interior Deborah Haaland saying, that, okay, everybody is talking about this, but that no real collective action has been taken yet so far. Are you getting a response? And what do you want to see done immediately?

JOHN ENTSMINGER, GENERAL MANAGER, SOUTHERN NEVADA WATER AUTHORITY: Well, thanks for having me. I think the federal government needs to take action. And they had a press conference on Tuesday, said some pretty vague things, but didn't really follow up on Commissioner Touten's call to action. And at a minimum, I think they need to be imposing evaporation losses on Nevada, Arizona and California.

GOLODRYGA And you note that the crisis is so dire that we're beyond just remedying it with conservation. You say, as the population has increased, Southern Nevada has reduced its water use by 26 percent in the last two decades. That's a good thing, but you say conservation at this point is not enough. What more needs to be done urgently enough to address this growing crisis?

ENTSMINGER: Well, for starters, we need to get away from thinking about this as a drought. A drought is a temporary phenomenon. This is long-term ratification of the southwest. And we need to adapt our institutions and our water usage to the realities that there's imply going to be less water in the Western U.S. for the foreseeable future. SCIUTTO: Wow. That is a great point there because folks like to think you can live through the season and move on. I mean, big picture, does that mean that the southwest, which by the way, a lot of the states are growing states, that the southwest can't sustain as many people as it has today?

[10:35:01]

ENTSMINGER: No, I don't think it means the end of economic growth and economic diversification within the west, but we have to adapt. And I think Southern Nevada is a living example of the fact that you can grow your economy and use less water. We've added 750,000 more people to Southern Nevada in the last 20 years and we're using 26 percent less water.

But the reality is that the future of the west is less grass. The cities are going to have less grass, we're going to be growing less alfalfa, we're going to be growing less sudan grass, you simply can't sustain that sort of production with the amount of water we have.

GOLODRYGA Explain to our viewers why what's happening in Nevada has implications for other parts of the country, for neighboring states, Colorado, Arizona, and why they have a critical role to play here as well.

ENTSMINGER: Well, we have adapted because we had to. We have 1.8 percent of the legal entitlements to the Colorado River. So, we had to start conserving 20 years ago and now a lot of other parts of the Colorado River basin are facing that same challenge, both we forged a path and if they chose to follow it, the whole basin can have water security.

SCIUTTO: Well, John Entsminger, we know you have got a lot of work to do there. And as you say, it's long-term work. It is not going to end with the season, this year or next year. So, we wish you the best of luck. Thanks for joining.

ENTSMINGER: Thank you very much for having me.

SCIUTTO: And coming up next, as we await a judge's decision today on unsealing of the affidavit behind the Mar-a-Lago search warrant, we will be joined by the chairman of the House Armed Services Committee on the national security risks that those documents pose.

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[10:40:00]

SCIUTTO: Just a couple of hours from now, a judge will consider whether to unseal the affidavit behind the search warrant of Trump's Mar-a-Lago home. The Justice Department now concerned that releasing that information would jeopardize its ongoing investigation, as they describe it.

Joining me now to discuss about this, Democratic Congressman Adam Smith from the state of Washington. He's chairman of the House Armed Services Committee. Congressman, thanks for taking the time this morning.

REP. ADAM SMITH (D-WA): Good morning. Thank you.

SCIUTTO: So, first of all, so folks at home can understand this, what is the potential damage, in your view, to national security of the contents of what was held in Mar-a-Lago. Is it a real risk?

SMITH: Yes. Well, there are two things. First of all, there is the actual contents of the documents, which contains, from what we have seen, what was reportedly taken, you know, classified information, information we don't want other countries to know. And this information has been lying around Donald Trump's hotel room for over a year now. Who has had the opportunity to come in and look at it?

And I was actually just reading an article in The New York Times about President Trump's propensity even while he was president to show classified information to whoever he happen to be with at the time. So, who has seen it and what they have done with it? But also what does this say about not just this bunch of information, but how President Trump and his team treated classified information while they were in the White House? What else is out there?

And it is really important to understand that what this does is it potentially betrays sources and also, crucially, it can tell adversaries how we gather information. So, it is potentially very damaging to national security.

SCIUTTO: Let me ask you this, as a lawmaker, you have a security clearance, a lawmaker, considering the committee you're on. If you or another lawmaker, whether Democrat or Republican, did the same thing, had classified top secret, top secret special compartmentalized information, that special category sitting in your home for a year- and-a-half, what would happen to you?

SMITH: Well, to begin with, the FBI would go get it. No question about it. And this is the really -- the most disturbing part of this, to me, the way the Republican Party has reacted to it. You have to understand, and as you look at the new stories, people, like, well, Trump says one thing, they say the other thing, what is the story here, was this the right thing to do?

The FBI had no choice but to do what they did here. No sensible human being can look at this and say they did anything wrong. For 18 months, they tried to get Donald Trump to give the information back. The law is clear, even if it is not classified, the archives law makes it clear that a president can't take these documents out of the White House. And at that point, they had to get them back. And yet we have got Republicans running around talking about defund the FBI, talking about how this is an abuse of power, it is ridiculous and dangerous and undermines the Justice Department and the FBI.

To answer your question, number one, they can come get the documents back from any one of us and we would be looking at criminal charges, there's no doubt about it.

SCIUTTO: Let me ask you this, though, and you can appreciate just how unusual this is to have a former president have his home searched, the documents had been there for more than a year-and-a-half. Do you believe that there are other risks involved in this decision to the politics of this nation right now? I mean, the basic question is was it absolutely necessary? Justified, perhaps, was it necessary?

SMITH: Yes, it was absolutely necessary. There is no doubt about it. But you raise a very interesting point. And, Jim, look, I am a dealmaker as a politician.

[10:45:03]

I worked with Donald Trump to get quite a few things done in the National Defense Authorizing Act during the two years that I was chairman and he was president. And I am mindful of the fact that you don't want to create a high level of conflict. And this does, you're right, it is unprecedented. But it is also unprecedented for President Trump to conduct his presidency the way he did. That's what -- you've covered it. Stuff that went on in that presidency, you know, I've been here 26 years, four different presidents, unimaginable before Trump became president.

So, the question is, do you go in and create the level of conflict that you correctly note or do you simply let the norms and rules and institutions of our society that are crucial to our well-being be destroyed? And if that's the choice, I don't think there is a choice. You have to hold this president accountable. You have to protect those norms and institutions, even while, yes, it drives up the level of conflict. But the Republicans, they don't have to react this way. They don't. They don't have to drive up the level of conflict. They can acknowledge the truth of what we're discussing here.

SCIUTTO: Right. Well, Congressman Adam Smith, certainly appears we'll have more to discuss on this investigation going forward. We do appreciate you joining the broadcast this morning.

SMITH: Thanks, Jim. I appreciate the chance.

GOLODRYGA: Well, coming up, mortgage rates ticked lower last week. So, what that means for inflation. We'll explain, up next.

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[10:50:00]

GOLODRYGA: Well, this just in to CNN. New numbers showing that the housing market is cooling down as interest rate hikes force potential home buyers out of the market.

Let's bring in CNN Business and Economy Reporter Matt Egan. So, Matt, it appears this is what the Fed had wanted to do and the response to be. Is this a good thing?

MATT EGAN, CNN BUSINESS AND ECONOMY REPORTER: Yes. I mean, they definitely wanted to cool down this housing market. It is unsustainably hot for the longest time. And these new numbers show it slowing down, existing home sales down for six months in a row, down 66 percent month over month in July, 20 percent below the (INAUDIBLE) of last year. The sales space is actually the slowest since May 2020. Remember, that's when a lot of COVID lockdowns were going on. If you exclude that, this is actually the slowest pace since late 2015. Why is this happening? This is one-two punch of high prices and relatively high mortgage rates.

Let me read you a key line from the chief economist of the National Association of Realtors, Lawrence Yun, he said, quote, we are witnessing a housing recession in terms of declining home sales and home building, however, it is not a recession in terms of home prices.

Let me show you what we mean. The median price of an existing home sold in July stood at $404,000. That's actually up 11 percent year over year, 125 straight months of year over year price gains, but prices are cooling off. This is the slowest pace of year over year gains in two years. Month over month, prices actually dipped a bit.

We just have to remember, though, that demand for homes remains very strong, supply is weak. A lot is going to depend on what happens with mortgage rates. I think some good news on that front for home buyers, because the average mortgage rate dipped to 5.1 percent, down from 5.2 percent, that's still well above a year ago, but it has come down a bit. And what happens there matters so much because the higher mortgage rates go, the less home everyone can afford.

GOLODRYGA: Average home prices cool a bit, right, but still high?

EGAN: A bit, yes.

GOLODRYGA: Matt Egan, thank you.

EGAN: Thank you.

SCIUTTO: This also just in to CNN, the former Trump Organization's CFO, Allen Weisselberg, has pleaded guilty in a 15-year long tax fraud scheme.

CNN Kara Scannell joins us again this time live outside the courthouse. What did he agree as well to testify against in the future? That's key.

KARA SCANNELL, CNN CORRESPONDENT: Yes. So, Allen Weisselberg just pleaded guilty to 15 criminal counts, all part of this tax fraud indictment that he was charged with last year. Now, part of this agreement, he has agreed to plead guilty against the Trump -- to testify against the Trump Organization when they go to trial in October.

Weisselberg was one of the most senior officers of the Trump Organization, he was leading the company with the former president's sons when Donald Trump became president and went to the White House. So, Weisselberg is required as part of the plea agreement to testify at the trial of the Trump Organization.

Now, under this deal, he is also required to pay back nearly $2 million in taxes, interests and penalties that he's owed. But in part of this deal, he is not going to cooperate with the Manhattan district attorney's ongoing, larger, wide-ranging investigation into the Trump Organization and whether they misled any lenders, any insurers and others. So, that investigation is ongoing. And Weisselberg will not cooperate as part of that.

But a significant victory for the Manhattan District Attorney's Office, which brought this case against Allen Weisselberg and the Trump Organization. Allen Weisselberg will be required to testify at the trial of the company later this year. Back to you.

SCIUTTO: It's the company, not the man, Trump. You were inside that courtroom. I'm curious what it was like.

SCANNELL: Yes. So it is very interesting. Weisselberg came in, he walked straight down the line, wearing a mask because of COVID. He was asked a number of questions by the judge who ran through each and every count of the indictment.

[10:55:00]

So, 15 counts going through all of the elements of the crime, about how Weisselberg had an apartment in Manhattan, that he did not pay taxes on, that the company, the Trump Organization, had paid for the private school tuition of two of his grandchildren, Weisselberg admitting that he did not -- he knowingly did not pay taxes on that.

And when the judge went through this, it took quite a while, but Weisselberg was barely audible in the courtroom. He spoke in a very hushed tone, just saying repeatedly, yes, your honor, yes, your honor, to each of the 15 counts. SCIUTTO: Kara Scannell, thanks so much for following. Appreciate it.

GOLODRYGA: Another busy morning for us. Thank you so much for joining us today. I'm Bianna Golodryga.

SCIUTTO: And I'm Jim Sciutto.

At This Hour with Kate Bolduan will start right after a quick break.

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