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GDP Shrank in Second Quarter; Trump Asked to Return Classified Documents; Renato Mariotti is Interviewed about the Trump Documents; Biden to Speak with Zelenskyy; Uvalde Fires Arredondo. Aired 9-9:30a ET

Aired August 25, 2022 - 09:00   ET

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

[09:01:03]

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

POPPY HARLOW, CNN ANCHOR: And I'm Poppy Harlow. We're glad you're with us.

This just in to CNN. Very important news for the U.S. economy. The nation's Gross Domestic Product, that just means how much the economy grew or shrank, well, it declined less than previously thought in the second quarter of this year. It was revised up from negative 0.9 percent to negative 0.6 percent. And that might not sound like much, but it is better than expected. It does still show, though, that our economy is shrinking.

SCIUTTO: CNN chief business correspondent Christine Romans joins us now with more.

And we've often seen revisions like this, with jobs figures, sometimes in both directions, sometimes in a positive direction.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Sure.

SCIUTTO: What's the significance of the revision here?

ROMANS: It means the economy is less lousy in the second quarter than we thought. And, in fact, consumer spending and corporate profits were stronger. And that is an underpinning here of the U.S. economy.

When you look at quarter by quarter by quarter, you can see two quarters in a row of a shrinking U.S. economy, but shrinking much less in the second quarter than in the first quarter.

And, you know, some of these other more recent -- this is rear view mirror looking, right? This is the second quarter. We're already into the third quarter. And some of the early data for the third quarter, these monthly reports, are showing a pretty strong picture for the consumer. So the third quarter is quite likely going to be positive.

Of course, as you know, when you have two negative quarters, that begins the discussion about whether or not you're in a recession. And, guys, it's just not an easy call. There are so many conflicting figures out there. I mean you look at jobless claims, for example, which also just came out in the last half hour. Jobless claims fell, meaning fewer layoffs this week than the week before. In fact, a layoff picture that is still historically pretty low here. These were the lowest layoffs in three weeks. And, frankly, you know, much, much stronger job market right now than you would have normally in a recession.

So, the recession guessing game continues. We have two months -- quarters in a row of negative growth but barely negative really in second quarter.

HARLOW: I mean, Christine, I've been saying for a long time, for lack of a better word, or maybe this is the most precise you can get, this economy is weird. It's just weird. And I think that these numbers today, both on the jobs, you just went through this, and then this little bit of improvement but still negative GDP, doesn't that make Jerome Powell's comments tomorrow all the more important and the Fed's decision on rates all the more difficult?

ROMANS: Absolutely. I mean, you look at these numbers, there's just no precedent for it. It's almost like this entire last three years is a big asterisk. You know, everything that happened broke the model or the mold for what to expect. And now we're trying to figure out how to get back to - back to normal.

If it is a recession, it's not a normal recession. We've got this inflation that is not transitory, as Jay Powell and others had said a year ago, and now they're trying to break the back of that inflation without throwing the economy into a recession.

It's a really tough place we are right now. Of course, all of it because of the pandemic.

HARLOW: Right.

ROMANS: A pandemic that just broke all of the charts, essentially, and now we're trying to figure out what it all means.

HARLOW: Good luck to those who have to make those critical decisions for the rest of us.

Christine, thank you for helping us understand it, very much.

ROMANS: You're welcome.

HARLOW: So, we start with that, obviously, big news this morning.

The other big story we're following is that overnight the National Archives revealed the top White House lawyer said, a top White House lawyer, in the Trump White House, said former President Trump should hand over at least 24 boxes of documents, some of them classified, while he was still in office. That's not what happened. And that was despite over a dozen calls and emails in 2021 about those documents not being returned. SCIUTTO: Yes, it further gets to the long timeline that happened here,

right? Those early requests, those requests denied or delayed, finally leading up to that search.

Plus, hours from now, the DOJ must propose to a judge a redacted version of the affidavit behind the FBI search of Mar-a-Lago.

[09:05:00]

A judge will then decide whether to release that version to the public or keep that under wraps.

CNN's senior crime and justice reporter Katelyn Polantz joins us now.

So, Katelyn, the National Archives says the documents were not returned, despite the fact that Pat Cipollone, who was advising the president then, White House Counsel, said Trump should have handed them over. What more did we learn?

KATELYN POLANTZ, CNN CRIME AND JUSTICE REPORTER: Right. Jim and Poppy, this is the back story. This is a year the National Archives spent trying to get boxes of federal records back from Mar-a-Lago with this concern building, and the Trump side just not helping for months after the presidency ended. So, "The Washington Post" first unearthed this email from Archives General Counsel Gary Stern yesterday. CNN's Jamie Gangel confirmed it as well.

The Archives was writing to Trump's lawyers in May 2021. They believed top Trump White House officials realized two dozen boxes of records had to be returned by Trump to Washington, and there were many emails and phone calls trying to get those boxes back. The Archives knew they were looking for certain things, like the Hurricane Dorian forecast with a Sharpie drawing on it, Trump's letters with Kim Jong-un, a letter from Obama to Trump.

So, Gary Stern wrote in this email to Trump's lawyers, May 2021, roughly two dozen boxes of original presidential records were kept in the residence of the White House over the course of President Trump's last year in office and have not been transferred to NARA, despite a determination by Pat Cipollone, the White House Counsel, in the final days of the administration, that they need to be.

He also said, I also raised concerns with Scott Gast (ph), another White House lawyer, in the final weeks of the presidency.

So this pleading from the Archives then culminated with Trump's team giving back to the federal government 15 boxes of records that they had at Mar-a-Lago. Remember, that's fewer than the Archives expected all through 2021. They gave 15 back at the beginning of this year. That then prompted the Archives to involve the Justice Department because once the Archives got those 15 boxes, they realized there were classified records within them.

So, all of this now is likely to become part of what that unprecedented search at Mar-a-Lago, why that was needed. And it all may be outlined in that secret affidavit the Justice Department is still trying to protect in court, confidentially proposing to a judge today what should stay redacted there as this criminal investigation continues on.

Jim and Poppy.

HARLOW: So many developments on multiple fronts. Thanks for helping us understand the significance of it all, Katelyn.

Let's talk about all of this with former federal prosecutor Renato Mariotti.

Renato, great to have you.

Let's start there. The fact that, as Katelyn said, it took a year - it was a year of back and forth, more than a dozen emails and calls. One of the president's lawyers, Pat Cipollone, according to this email, saying you should give these documents back while you're in office. That didn't happen. You know, in January, Trump finally gives 15 boxes. That's a year after he left office, but not the 24. Legally what does this portend?

RENATO MARIOTTI, FORMER FEDERAL PROSECUTOR: Well, what it really means, Poppy, is that it's actually -- it really goes to the state of mind of the former president. You know, I've been on CNN many times, talking about all the challenges that DOJ has in various cases proving the former president's knowledge, his intent, his state of mind, and really that's a lot easier here. And that's because he was told by many people, as you point out, including his own White House counsel, that he needed to give these documents back, and he didn't.

And the DOJ and the archivists and others actually treated him with kid gloves and gave him all sorts of warnings, asked for this stuff back nicely, a treatments me or my clients would not have received. And I think, as a result, they've actually strengthened the potential case against Donald Trump.

SCIUTTO: Were not illegally (ph). Does the pattern matter here legally? The pattern of delays and the long timeline of requests and refusals or delays to meet those requests, does it - does it increase it - increase Trump's potential legal liability?

MARIOTTI: Absolutely. If, for example, the, you know, Justice Department just swooped in and took these documents, Trump would have had a defense saying, I didn't know these documents were there, or, I didn't know these documents were classified, had no idea that I had classified documents. You know, and I think he also would have had a rhetorical point that he would have made with judges and a jury potentially that hey, they -- they were just throwing the book at me. And I think what we will see if portions of that search warrant affidavit are revealed to us, and I agree that it's possible we'll see very little of it, but I think what we would see is a long history of the Justice Department, the archivists and other parts of the executive branch treating with kid gloves, and I think that would be evidence that would be introduced in a criminal trial to show his state of mind. SCIUTTO: Renato, let me - let me switch gears here and try to explain

something pretty complex, hopefully pretty simply for the viewers, and that is news this morning, this full memo from Justice Department lawyers back in 2019, totally detailing why then Attorney General Bill Barr decided not to prosecute former President Trump after the Mueller investigation.

[09:10:15]

Speak to the significance, what stands at you from the memo. And also I wonder if you agree with NYU Law Professor Ryan Goodman who told "The New York Times," this is a get out of jail free card. They -- he sees this - a number of legal experts see this as sort of shocking.

MARIOTTI: I do think it's shocking. I will say that what it really is, it looks to me like the former attorney general, you know, here he was being advised actually by a former law school classmate of mine that I had at the OLC, basically to - either turning themselves in knots trying to find excuses not to charge the former president with obstruction.

And it's interesting because Mueller left this as a jump ball. He said -- Mueller said, look, I can't charge him now anyway so I'm not going to make a decision. They were trying to find a way not to charge him and that ultimately meant they took -- they made arguments that they never made (INAUDIBLE) case.

SCIUTTO: Yes.

Renato, let me ask you there, what is the history here, for public officials charged with and convicted of obstruction of justice in the past, has there typically been an underlying crime? Because that's another argument in this memo, right, that there was obstruction, but there wasn't enough there there or evidence of a crime behind that.

MARIOTTI: Yes, that's nonsense, by the way. It really does not matter. Legally it does not matter whether there's an underlying crime. If there is a lawful investigation and they're aware that there's an investigation. That's just a false statement of the law. And I intend to use that in my -- for my own clients because no one else gets treated in that fashion.

And the success of the underlying scheme doesn't matter either. In other words, you're successful of the obstruction and there's no - and you end up thwarting the investigation, that shouldn't give you, as Ryan (ph) put it, a get out of jail free card. Very bizarre arguments that really don't purport with how the Justice Department has treated others in other cases.

SCIUTTO: All right, Renato Mariotti, thanks so much, as always.

MARIOTTI: Thank you.

SCIUTTO: Another big story we're following, a sad one here, a Russian strike on a train has killed at least 25 people in eastern Ukraine. Among the victims were children. Look at the picture there. In its latest deadly attack in a war that has dragged on for six months now. Still ahead, what President Biden plans to discuss what he calls Ukraine's president today.

HARLOW: We will also be joined by one of the parents of a child who was in the room during the mass shooting in Uvalde, Texas, and the parent who was in the room for the school board meeting last night where the police chief, Pete Arredondo, was fired, but not before they heard from outraged community members who wanted to know why it took so long.

(BEGIN VIDEO CLIP)

: Our babies are dead. Our teachers are dead. Our parents are dead. The least you all can do is show us the respect to do this in the public.

(END VIDEO CLIP)

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[09:17:17]

HARLOW: Well, today, President Biden will call Ukrainian President Volodymyr Zelenskyy to talk about the latest U.S. arms shipment and aid -- $3 billion in aid, remember, announced yesterday to help Ukraine in the war effort.

And this comes as the United States condemns Russia's plans to hold trials for Ukrainian prisoners of war. The Mariupol City Council posted these images of cages they say will be used as holding cells during those trials. They will take place inside of the city's Philharmonic Hall.

SCIUTTO: Behind iron bars, it appears.

You will remember Mariupol was the same place where the Russian military struck this theater here, seen before the attack. And those letters you see in the Russian Cyrillic alphabet marked it as containing -- housing children at the time. Amnesty International concluded that attack, which it is believed killed as many as hundreds of innocent people, was a war crime.

Let's speak now with CNN's senior international correspondent David McKenzie. He is in the capital Kyiv. And CNN White House correspondent Jeremy Diamond.

Jeremy, first, what are the plans for this call between Biden and Zelenskyy. It follows, of course, the largest U.S. military aid package to Ukraine so far in this war.

JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Yes, exactly.

President Biden is expected to speak on the phone with President Zelenskyy sometime this morning. We are expected to hear when that call actually begins. As of yet, we have not gotten word of that. But John Kirby, the White House's national security spokesman, he said

yesterday that President Biden intends to reaffirm his commitment to continue to rally the free world, rally U.S. allies and partners in support of Ukraine on this phone call with Zelenskyy. He's also expected to go into the details of the latest U.S. arms shipment to Ukraine, as well as this nearly $3 billion tranche of U.S. security assistance to Ukraine that was announced just yesterday.

Of course, the context of all of this, just yesterday we saw not only the six-month anniversary of the war in Ukraine, but also Ukraine's independence day. And President Biden, in a statement yesterday, he talked about the meaning of that day, saying that it is a reminder that Ukraine not only earned its independence decades ago, but also that this is a resounding affirmation, the president says, that Ukraine remains and will remain a sovereign independent nation.

We know, of course, that Ukrainian and U.S. officials have been expressing concerns about fatigue around the war in terms of the international community. President Biden reaffirming today that the U.S. remains committed to helping Ukraine see out this war and to ultimately repel Russia's invasion.

HARLOW: And, David, let's go to you in Kyiv, because we were just showing those images of where Russians are going to hold these prisoners of war during this trial, these tribunals, and Ukrainian officials say the venue for the Mariupol trials is still closed off.

[09:20:02]

I just wonder what Russia is saying about that, how they're defending all of this.

DAVID MCKENZIE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Poppy, it's, you know, no small amount of irony here. If you look at these cages that they are setting up for these -- what the State Department calls show trials of prisoners of war. Now, a Russian official, or an official in that occupied territory, said that this will not only be trials, his words, of POWs, but also of those in the Azov battalion. Now, within Ukraine, those soldiers are regarded as heroes for defending Mariupol for weeks and weeks and weeks until they were forced to surrender months ago. They have been held prisoner all that time. Many of them unable to be released through some kind of prisoner swap.

Now they face the prospect of a trial. A trial in occupied territory, which is clearly, for the domestic audience and that region, a ploy say, again, the State Department of Russia's President Putin to divert attention from the alleged atrocities that his own military has committed here in Ukraine and in the east in particular. It's unclear when those trials will start. And officials say that they are still bordered off. But it appears the finishing touches are being put to broadcast these trials, I'm sure, to try and help the Kremlin propaganda efforts.

Poppy. Jim.

SCIUTTO: Wouldn't be the first time we've seen show trials like that broadcast.

Jeremy Diamond, in the White House, and David McKenzie, in Kyiv, good to have you. Please, stay safe.

Still ahead, the Uvalde school board has voted now to fire the chief, Pete Arredondo, but will it be enough to calm fears for students and parents going back to school now in the wake of that school shooting? We're going to be joined by one parent who says, and, boy, you can understand this, his kids are afraid to go back.

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[09:26:39]

SCIUTTO: The school board in Uvalde has voted unanimously to fire school district police chief Pete Arredondo. That decision came last night. You may remember, Arredondo faced intense criticism over his handling of the Robb Elementary School mass shootings, the long delays in going into the classroom that left 19 children and two teachers dead.

HARLOW: Our crime and justice correspondent Shimon Prokupecz is back there. He has been covering this from the beginning.

Shimon, thank you for being us this morning.

You were in the room last night for all of this. I mean this is something the community has been demanding for months. How are they responding this morning?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: You know, I think people in the community were happy to see this result. Finally some accountability. This is something that they've been fighting for -- really for months after it was revealed that there was this lack of response, lack of leadership, lack of command inside that school. And, finally, calling for the firing of the police chief and having that happen last night was certainly a relief for this community and for the family members.

But, of course, their pain still so palpable, you can feel it every time you're around them. And it's compounded by the fact that there has been this lack of transparency. The lack of accountability.

We actually heard from a little girl, a student last night, inside the school board meeting. Take a listen to what she said.

(BEGIN VIDEO CLIP)

CAITLYNE GONZALEZ, FORMER ROBB ELEMENTARY SCHOOL STUDENT: I'm here today to make a statement. If a law enforcement's job is to protect and serve, why didn't they protect and serve my friends and teachers on May 24th?

I have messages for Pete Arredondo and all the law enforcement that were there that day. Turn in your badge and step down! You don't deserve to wear one! (END VIDEO CLIP)

PROKUPECZ: This is really how so many of the kids feel. You can talk to them. Now, I've spent time with many of the kids. This is how they feel. They do not feel safe going back to school. School starts again on September 6th. Many of them afraid to go back. Parents concerned about sending their kids back to school.

In terms of the school board hearing yesterday, there was actually some concern over the fact that Pete Arredondo was going to show up, but instead his attorney releasing a statement, essentially defending his actions that day, showing no kind of compassion, no kind of responsibility.

And what he said was that the reason why the chief was not -- now the former chief was not going to attend was because he was afraid for his own safety. And then he wrote how Arredondo -- saying that Arredondo would not participate in his own illegal and unconstitutional public lynching and respectfully requests the board immediately reinstate him with all back pay and benefits. That's what Arredondo wanted. He wanted his job back. He's clearly not in touch with what the community wants, not in touch with what the family members wanted.

And so this is what you're going to keep seeing from this now former chief. There is an expectation that he's going to continue to fight to try and get his job back and certainly back pay.

But, Poppy and Jim, for the community, they're not stopping. They're going to keep fighting. They want more transparency and they want more accountability.

[09:30:03]

SCIUTTO: Yes.

HARLOW: Shimon, thank you for being there.