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Dozens Of Trump's Mar-a-Largo Staff Subpoenaed; Dave Aronberg, (D), Palm Beach County State Attorney, Discusses Dozens Of Mar-a-Lago Staff Subpoenaed; Despite $30B Rescue, First Republic Bank Credit Rating Faces Downgrade. Aired 2:30-3p E

Aired March 17, 2023 - 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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[14:30:47]

VICTOR BLACKWELL, CNN HOST: CNN has learned exclusively that dozens of Mar-a-Lago employees, from groundskeepers to servers and Trump aides, have been subpoenaed to testify before a federal grand jury.

BIANNA GOLODRYGA, CNN HOST: The jury is investigating Trump's handling of classified documents at the Florida estate Mar-a-Lago.

CNN's senior crime and justice reporter, Katelyn Polantz, is here with more details.

What do we know, Katelyn?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Well, from our sources that have been talking to us about where this investigation is right now into these classified records at Mar-a-Lago and Donald Trump, investigators, federal prosecutors are trying to talk to anyone and everyone who may have been around Trump over the past year.

This investigation is about a year old, a criminal investigation.

We now know from our reporting that they have not just brought in top aides of Donald Trump to the grand jury in Washington that is looking into this case.

But they are also trying to talk to resort staff, people like a housekeeper, restaurant servers, many people on Donald Trump's payroll since he left the White House.

Just yesterday, in the federal court, we did see one communications person, Margo Martin, go in and speak to the grand jury to testify.

We also know that federal prosecutors from the special counsel investigation of Jack Smith on this have been trying to talk to lawyers around Donald Trump.

Even if the prosecutors are able to get testimony from all of these people that they are seeking, more than two dozen in total, they may not be able to get answers to everything they want to ask. One of the people, Evan Corcoran, is a defense lawyer for Donald

Trump, previously testified.

And we are still waiting, at this time, to see if a federal court will force him to go back into a grand jury and reveal a little bit more that he wasn't willing to share before - Victor and Bianna?

BLACKWELL: Katelyn Polantz, with the exclusive reporting, thank you very much.

Joining us now to discuss, Dave Aronberg, state attorney for Palm Beach County.

Good to have you, Dave.

So let's talk about the scope here of the people at Mar-a-Lago being questioned. You have got a restaurant server, at least one housekeeper.

Specifically, are you going for people who you know might have information? Like, for instance, they spoke with the Mar-a-Lago worker seen on security camera carrying the boxes of the documents. That makes sense.

But just going for everyone here, is it anybody and everybody?

DAVE ARONBERG, (D), PALM BEACH COUNTY STATE ATTORNEY: Yes, Victor, they may know something. They were there literally in the room when it happened. They want to know what they heard, what they saw, Trump's involvement.

Because this shows that Jack Smith, the special prosecutor who is a pit bull, is focused on obstruction. That is why the people in Trump's world, who say, well, Pence and Biden did the same thing.

That is nonsense. Because it is not about the possession of the documents. It's about the obstruction.

They are trying to tie Donald Trump and his lawyer, Evan Corcoran, to the obstruction. That is 18 USC 1519, punishable by up to 20 years in prison. That is the big whammy here.

And so that's why they are talking to all the staff who have seen the documents, heard things, seen staff carry the documents out and around to avoid the oversight of the federal government. That is why everyone is being called in.

GOLODRYGA: We have heard some of those staffers are represented by attorneys, paid by the former president himself.

Does that present a conflict specifically in terms of how reliable their testimony could be?

ARONBERG: Bianna, yes. No, it is not illegal. They can pay for the lawyers. But the feds will know that. They know that these witnesses may not be so forthcoming because their legal fees are being paid for by the Trump organization.

Remember, this happened with Cassidy Hutchinson. At first, her legal fees were being paid for by Trump's people. She didn't like the way it was going so she found her own lawyer. That is when she came out in the January 6th hearing and came clean.

So right now, the feds are going to incorporate that.

I think the big issue here is, what can they get from Trump's lawyer, Evan Corcoran, himself, because he is claiming attorney-client privilege, he doesn't have to answer the DOJ questions.

[14:35:00]

But, you know, attorney-client privilege has an exception called the crime fraud exception. You can't use your lawyer to cover up an ongoing crime.

That may have happened here. Afterall, Corcoran was the one who drafted the letter assuring the Department of Justice that all the sensitive documents had been returned when they had not.

BLACKWELL: Yes. You think about some of these employees. They probably don't make a lot of money.

So if the option is, use the lawyer that's provided by Trump or pay for a lawyer myself to sit before a federal grand jury, I don't know it is anything nefarious. Just I don't have the money to do it myself.

Let me ask you about what these employees might be offered.

If you have someone who maybe saw something or knew something, are you offering them immunity? Or is there a level of culpability that if they know they're covering documents from the White -- how exposed are they potentially?

ARONBERG: They're just going to be used, Victor, as witnesses. They're not the targets of the investigation. You want them to be forthcoming.

If they lie, they commit perjury, that is a crime and they can be squeezed there.

But as far as seeing something, that is not necessarily a crime. It depends on their level of involvement.

If they walked the documents out of the room where they are supposed to be kept, yes, they could be brought in and then get immunity from prosecution.

You're identifying a correct issue. What if the lawyer, who is paid for by Trump, says, don't cooperate, don't tell the truth, and then you have a conflict.

Yes, this happens all the time in our world. Sometimes it leads to an innocent - a person who is a witness, who should not be charged, charged because they end up falling into a perjury trap. GOLODRYGA: We will continue to follow this story.

Dave Aronberg, thank you. Have a good weekend.

Massive demonstrations are taking place across Israel and France today as demonstrators fight controversial reforms pushed by both countries' leaders. We'll take you there, next.

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[14:41:15]

GOLODRYGA: Well, despite the massive $30 billion rescue from some of the country's biggest banks, First Republic Bank's credit rating still faces a possible downgrade from Fitch. The rating company says it continues to monitor the bank's funding and liquidity profile as well as the impact of the bail out.

Even with the lifeline, First Republic stock price is currently down more than 25 percent, dragging other regional banks down with it.

Here to make sense of it all, Betsey Stevenson, a former chief economist for the Labor Department and professor of economics at the University of Michigan.

And Justin Wolfers, is also an economics professor at the University of Michigan.

Great to have you both on with us.

So let's start with what we saw today in the markets and the continued plummeting of First Republic Bank stock.

We saw U.S. deputy treasury secretary, Wally Adeyemo, say that the global market will need time to process the actions by regulators and banks this weekend. Adding that the fundamentals of the banking system are sound but that U.S. officials will remain vigilant going into this weekend.

For those folks at home who are continuing to see these market jitters, is this something they should anticipate? Perhaps could we see even more, smaller banks collapse, Betsey?

BETSEY STEVENSON, FORMER CHIEF ECONOMIST, U.S. LABOR DEPARTMENT: I think all the measures that have been put in place are really going to help reduce the chances that we see any kind of smaller banks collapse.

We've seen the Fed extend a lot of emergency landing - emergency lending to make sure the small banks can access cash on hand.

We also saw the big banks step in and say, look, we believe in First Republic, and they've made cash available to them.

What we're seeing is there have been a lot of market jitters unleashed. And getting those market jitters back into the Pandora's box is going to be a little tough.

Everyone is going to be scrutinizing banks a little harder. And being under that scrutiny will be a little tough for them.

But I don't think we need to worry we have a wide scale bank collapse on the horizon.

GOLODRYGA: So the crisis is averted but we should anticipate more instability, shaky market days for the next few days or weeks?

Justin, as you know, a lot of finger pointing already as to who is at fault for SVB, whether just bad management or the regulator oversight, whether the Federal Reserve itself.

Out of all of this, do you think we are going to see more regulation and more regular perhaps implemented?

JUSTIN WOLFERS, ECONOMICS PROFESSOR, UNIVERSITY OF MICHIGAN: I think there is no question we need more regulation. And this came out of really bad behavior by bank executives. And that bad behavior was allowed because of the Trump-era deregulation of the financial sector.

Here's the basic business model. They were betting, heads we win and we get to take home a lot of money, and tails, we'll ask the government to come in and clean up the mess after.

I think a lot of us are really angry they took that set of bets. And we need a set of regulations that are going to prevent banks gambling with your money and mine.

And that regulation will come down the pike pretty soon. And in fact, it might explain some of why we're seeing bank stocks go up and down.

It is not just that we're worried about financial jitters. I also think some of them might become less profitable because we'll tighten up on some of the games that some of them have been playing.

GOLODRYGA: Betsey, is this just more regulation for the sake of regulation?

We were all told these banks are well capitalized, constantly stress tested. And it looks like maybe some of the regulation in place just wasn't implemented, that somebody dropped the ball here.

So in your view, do we need additional regulation or do you think the regulation that was already in place is sufficient, it just needs to be better enforced?

[14:44:59]

STEVENSON: I think - let's be clear what happened in 2018, which is we did have regulation about subjecting banks to stress tests, about capitalization, about liquidity. And those regulations applied to any bank with over $50 billion.

The head of S.V. Bank, ironically or maybe not ironically - this is the whole point - was one of the people leading the charge to get that regulation changed from $50 billion to $250 billion so banks like his would no longer be subject to the regulation. He succeeded.

When that went through, the Republican head of the Congressional Budget Office said, this will increase the chance that we see a bank failure. Guess what happened? We saw a bank failure.

It is very clear we need to go back to subjecting small- and medium- sized banks to the same kinds of regulations they were subject to before 2018.

I do think it raises some questions, is there something else we need? I'm sure that is going to be looked into.

GOLODRYGA: Justin, all of this will factor into what Jay Powell will do in terms of his meeting next week and his decision on interest rate hikes.

From your vantage point, do you think, given what has happened in the financial markets, in the banking sector, do you think that justifies perhaps a smaller interest rate hike or perhaps even just pausing at this point?

WOLFERS: I think the thing to realize is that the Fed has two different sets of tools to achieve its two different objectives.

So for managing the macro economy, adjust interest rates. And for trying to prevent bank failures, that can provide liquidity. And guess what? the Fed can do both at the same time.

So I don't expect the Fed to back off from the fight against inflation.

I want to put one little asterisk next to that, which is this week is probably a really bad week for a surprise.

So even if they are going to eventually continue on their path of raising rates, they might slow a little or at least make sure there are no surprises in the very short run.

But you should think about this as rate rise is delayed rather than rate rise is denied.

GOLODRYGA: I think you are right there. We've all had our fair share of surprises the past few weeks. We can have some calm going forward for a little bit at least.

Betsy Stevenson and Justin Wolfers, thanks so much. Great to see you.

BLACKWELL: Have you seen this?

GOLODRYGA: Yes.

BLACKWELL: This massive sea blob, the seaweed coming in. And this red tide. They're now creating this ecological beatdown for Florida beaches. We'll take you there, next. (COMMERCIAL BREAK)

[14:51:54]

GOLODRYGA: Well, people have been pouring into the streets of France in backlash over the government's controversial plan to raise the country's retirement age from 62 to 64.

BLACKWELL: CNN's Sam Kiley is in the streets of Paris for us.

We can see the flames and smoke and the protestors behind you. Tell us more about what's happening.

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Bianna, Victor, earlier on today, I was over just the other side of that fire, and it was almost deadly quiet.

There was a substantial police presence. As you can see now, though, there is a bonfire burning where they just burnt an effigy of President Macron.

The reason for that, largely, there was then demonstrations last night that turned quite violent, several cars were destroyed, because of a decision to overrule the people who legislate from there, the National Assembly.

President Macron used an unusual part of the constitution that gives him the right to effectively rule by edict.

So he ran through legislation to reform the pensionable age, from 62 to 64, against what he assumed to be the wishes of the national parliament, where his party does not have a majority. The result has been this.

So far, these demonstrations have been pretty quiet. There's a few hundred, perhaps 2,000 people here or so. And many, many hundreds of police around just down here. You can see their blue lights flashing.

They have effectively encircled the whole of the central square. This is absolutely at the heart of Paris, very close to the heart of French democracy.

For many people, that's what this demonstration is about. It's not just about protecting their pension rights, as they see them. There's three-quarters of the country that are in support of those pension rights.

There have periodically been fireworks and perhaps other things going off in that bonfire.

Two-thirds of the country - I should say, not three-quarters - two- quarters of the county support the continuation, the status quo of the pensions.

They're against Macron's proposals. But they are in favor of an orderly opposition to that, Bianna and Victor, not too much of this. So the unions are planning next Thursday to have something much more

orderly.

But this being on day two, the real issue for the French authorities is how they're going to handle it.

Are they going to - excuse the pun - let this burn out inside a secure cordon, or are they going to go in heavier handed, as they did last night, and risk a much more violent response from the population - Victor, Bianna?

GOLODRYGA: So, Sam, President Macron is very savvy. I would imagine that he would have anticipated there would be strong pushback to this move.

That raises the question of just how dire the economic future is there in terms of paying out pensions.

KILEY: Yes, you've got an aging population, as you have in much of all of Europe, really. This pension system the French have is much more generous.

Particularly in the Anglo-World, they really understand why it's such a problem to retire two years later.

[14:55:06]

But the fact of the matter is that French people believe that they have a right, that it is something they have looked forward to for many people.

Particularly working-class people in this country, who started work very young, perhaps at 16. Rather looking forward to getting out of the workforce come 60, let alone 62 or 64.

So this has been a proposal that Macron has had on the table. He says there's a 12.5 billion Euro deficit in the pension pot, which means people in work today are having to pay.

The Macron argument is for people to go out of work or go out of work earlier. Part of his wider efforts to try to reform the whole French economy, which, at the end of the day, is also requires a change in the way of life. A lot of people are resisting that.

GOLODRYGA: Wow.

BLACKWELL: We're hearing some of the protestors behind you.

Stay safe. Sam Kiley, thank you for the reporting.

The International Criminal Court has issued an arrest warrant for Vladimir Putin and a Russian official, both, who the court says, are responsible for an alleged scheme to forcibly deport thousands of Ukrainian children to Russia. The president of the International Criminal Court joins us, next.

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