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Judge Ruling on DOJ's Case; Trump Lawyer Communication Given to Manhattan DA; Fed Faces Rate Hike Decision; Jeanna Smialek is Interviewed about the Fed; Shan Wu is Interviewed about the Fox Defamation Lawsuit. Aired 9-9:30a ET

Aired March 22, 2023 - 09:00   ET




ERICA HILL, CNN ANCHOR: Good morning. I'm Erica Hill.

JOHN BERMAN, CNN ANCHOR: And I'm John Berman. Great to see you this morning.

HILL: Likewise.

BERMAN: So, there is a growing legal clouds or clouds swirling around the former president this morning. We are watching for a possible indictment to be handed up in Manhattan in connection to the hush money payments to porn star Stormy Daniels. That really could happen any minute, or not. We just don't know.

But while that is going on, another significant development. This one in the Mar-a-Lago documents case. Sources say that a federal judge has seen compelling evidence that Donald Trump used his attorney to help further a crime. We have the latest on these developments as a federal appeals court decides if Trump's attorney will be forced to testify.

HILL: Plus, we should soon have an answer to the question that everybody's very murky crystal ball cannot answer, what the Federal Reserve will do with interest rates. This, as you know, directly impacts your bottom line. So, what is Chairman Powell weighing ahead of this big decision? We're going to take a look at those details.

And also the pomp and circumstance of this high stakes meeting? Well, the photo ops are now over, so now is the true test, what actually comes of this. What will this deepening friendship between China and Russia mean not only for the U.S., but for the war in Ukraine, and, frankly, for the global balance of power. We'll discuss.

We do want to begin, though, this hour with that major ruling by a federal judge in the DOJ's investigation into how former President Trump handled classified documents.

CNN political correspondent Sara Murray joining us now live.

So, Sara, this is the first time, as I understand, the Justice Department is arguing that it has seen evidence that there may have been a crime committed by the former president. What more do we know about what was told to the judge?

SARA MURRAY, CNN POLITICAL CORRESPONDENT: That's right. I mean we are learning that Judge Beryl Howell, last week, in a sealed ruling, so we're learning this from our sources, decided that prosecutors provided enough evidence that former President Donald Trump may have used his attorney to potentially commit a crime. That because of the evidence they provided, which includes surveillance tapes, essentially attorney/client privilege doesn't apply here anymore. Prosecutors provided enough evidence to pierce that shield and the lawyer at issue here, Evan Corcoran, should have to testify before a grand jury.

Now, this is really important. Evan Corcoran could be a very important witness to prosecutors. He was someone who helped search for these classified documents at Mar-a-Lago. He's someone who attested to the government, we now know inaccurately, that all of these classified documents had been turned over. So, obviously, prosecutors really, really want his testimony.

The Trump team was very quick to appeal this decision. They took to the appeals court. And what we saw last night was somewhat unprecedented. It was the appeals court essentially saying, OK, we are going to weigh in on whether this essentially should be put on pause, whether Corcoran's testimony should be put on pause. Prosecutors had overnight to file. Trump's team had overnight to file. Everyone managed to get their filings in. And now we are waiting to see what the appeals court says about this, if they decide to pause Evan Corcoran's testimony or if they say it could go forward.

Again, this is really far into the progression of the classified documents case and could be potentially one of the last witnesses that the government needs to hear from. At a minimum, he's a key witness. As I pointed out, he was really in the thick of all of this, guys.

BERMAN: Yes, and now we know, again, much more about what exactly a judge, a federal judge, thinks of what he might be able to testify on.

Sara Murray, thank you so much for that development.

MURRAY: Thanks.

BERMAN: So, this morning, also new CNN exclusive reporting. We are learning that emails between Stormy Daniels and one of Donald Trump's attorneys have been turned over to the Manhattan district attorney. The emails are from 2018 when Daniels was looking for an attorney and reached out to Joe Tacopina. This is, again, from several years ago. Joe Tacopina now represents Donald Trump.

HILL: So, Daniels' current attorney tells us that his client shared confidential information about the case and Tacopina's role on Trump's team now poses a conflict of interest.

CNN's Kara Scannell joining us from New York, live outside the courthouse there, where we're waiting on that potential announcement of a decision possibly on an indictment. So, bring us up to speed on the latest with this character.

KARA SCANNELL, CNN CORRESPONDENT: Well, Erica and John, it is Wednesday and we know that the grand jury has met on Wednesday, so it's likely they will be convening this afternoon. But it comes as we're still awaiting a decision by the Manhattan district attorney, Alvin Bragg, on whether he will seek an indictment against former President Trump for his alleged role in the hush money scheme.

Now, sources tell my colleagues that some of Trump's advisers have said that he has resigned himself to the fact that he could be indicted.


He thinks he will be indicted. And that he's already mentally distancing himself from that possibility.

But, meanwhile, as you say, Stormy Daniels' attorney has turned over to prosecutors investigating this case communications and emails that she had with one of Trump's current attorney, Joe Tacopina. And these communications are back in 2018 when she was seeking representation during the federal investigation into the hush money payments scheme. Now, her attorney, Clark Brewster, told our colleague, Kristen Homes, that he believes that this information is confidential. And that could pose a conflict of interest and it could potentially disqualify Tacopina from representing Trump in whole or in part in this investigation, particularly if it leads to an indictment.

Now, Tacopina told us that there is no conflict, and he says he has no confidential information belonging to Daniels.

John. Erica.

BERMAN: All right, Kara Scannell, this could -- could be a very busy day for you. Please keep us posted if you see her hear anything down there. We appreciate it.

We're joined now by CNN anchor and senior legal analyst Laura Coates.

We're lucky to have you here this morning.


BERMAN: Because there's kind of a ton of stuff going on there.

COATES: Oh, is there?

BERMAN: Yes. Well, I don't even know where to start. Let's just start very quickly with that last bit of CNN exclusive report, that Joe Tacopina, who is now representing Donald Trump, there was communication between Tacopina and Stormy Daniels years ago. What's -- what's the measure there of if it's too much for him to be involved in this case? COATES: Well, here's why it's important. You've got attorney client

privilege. And anytime somebody is communicating with their attorney, then you're supposed to hold sacrosanct that particular information for confidentiality reasons. You want people to be forthcoming. But perspective clients may also be able to have that privilege because we want people to have the ability to be forthcoming with the potential lawyer. And so if I hand over information to somebody in the hopes they'll become my attorney, I expect them not to be able to then use it against me down the line or not to have to play the role of a witness in a case and an advocate for the person that I may have been going against. It really does serve to protect also Donald Trump. You don't want to have your attorney having to hold back or pull punches because there might be a perceived conflict or, do I know this or do I not know this, and then not fully represent.

But right now Tacopina is saying, look, I don't have any substantial or prospective or actual client relationship. Therefore, it should never apply, and I'm not conflicted out.

HILL: So now we have to wait on the answer on that.

COATES: Yes, we do. We'll wait on a lot of answers.

HILL: Oh, we're waiting on a lot of answers, it's true.

So, let's look at another attorney client privilege issue, which has also come up overnight. And this is in a separate case, as we try to keep track of all of these investigations and cases that we're following here. So this is about the classified documents that were found at Mar-a-Lago, and the DOJ, as we just heard from Sara Murray basically saying, hey, we have -- the judge ruling the DOJ presented enough evidence to show - I'm reading this to make sure I don't screw it up because I'm not the lawyer -- Trump did use his own defense attorneys in furtherance of a crime or fraud. I know that language is important there. And they're saying, so we need this attorney to testify. You need to hear from him. There is enough here.

How does that work? This seems to me, you're a former federal prosecutor as well, not only rare, but the fact that this would happen, what does that tell you about what could be there?

COATES: Well, it tells me first, the prosecutor has made what's called a prima facie case. It doesn't mean they've proven beyond a reasonable doubt. It doesn't mean they have the probable cause for even a grand jury. But they have told these judges through the testimony they've given or evidence they've presented that, look, there is something there. And what was there is not allowable to allow him to say, look, this is my lawyer. It's all privileged communication. We don't want the attorney/client privilege doctrine to be used to further a crime or to be used as a vehicle to say, I'll do whatever I want. And as long as I tell my lawyer, I've got to get out of jail free card forever. We don't want that to happen. It's privileged for a reason.

So, this court believes that whatever was presented (ph) to them was enough to say, we're going to pierce this. And not just pierce it for anyone. This is a former president of the United States. How many discussions have we all had about the idea of having a president have a kitchen cabinet conversation, have a White House counsel conversation, have the idea of an attorney/client conversation. You want them to have the same protections as everyone else, to be forthcoming. But the judges here said, look, there's enough here so far to tell me, you don't get to have that protection, to have an attorney testify, it doesn't mean that it actually, you know, implicates Donald Trump. It could mean he says, look, I certify that we got everything over to you, White House, and to you, National Archives -- excuse me, the DOJ, on this issue. And that's it. But we have to still know that. And whatever the Trump side has given so far has not been enough to convince the judge that this testimony is not crucial from an attorney.

BERMAN: And the part of the - and, again, ABC News was first to report this, and then CNN confirming different parts of it - it's that Trump -- the judge believes that she saw enough evidence that Trump -


COATES: Trump.

BERMAN: Committed a crime through the lawyer. And I know some people may think that sounds obvious here, but that in and of itself was murky in the documents case because, oh, could the lawyers have done it, could others have -

COATES: Right.

BERMAN: This was, no, Trump did it.

COATES: That's so important because we keep thinking, first of all, how often you're seeing the president of the United States carry boxes, right, or classified documents somewhere. Everyone thought, well, how do we know that he handed over everything? Who would have been the conduit and the liaison to the National Archives to have all this be done? And there was speculation at the time about the him being distanced enough in delegating responsibility.

This suggests, the courts are saying, it's not about delegating. It might be about using an attorney, possibly, to commit a crime or fraud, or to make sure they didn't have the information that they actually could have to certify it to the, what, to the DOJ on this issue and the National Archives.

So, this is very telling and very specific. We don't yet have information to suggest that the lawyer is implicated in having done the wrong thing. But Trump is. And that's very telling in all of the different -- we should almost color code all the investigations at this point to keep -

HILL: I love that idea.

COATES: We should do it. Have red, have green, have blue.

BERMAN: I know you did.

HILL: I actually -- yes.

COATES: Do it all, because we're going to have to keep it all straight, today and other days.

HILL: OK. Well, I think in the break we should plan this out, and we will inform the entire network of the plan that we've come up with.


HILL: And they will say, thank you, Laura Coates.

COATES: Red, green, blue. Just not red, white and blue. That would be a little odd. Don't do that.

BERMAN: Again, Laura, I think it's a good chance you may be very busy today.

COATES: Yes. Yes.

BERMAN: Thank you for being with us.

So other busy events happening.

This morning, we're waiting to hear from Federal Reserve Chair Jerome Powell a key decision on raising interest rates. This will affect everything from home prices, car payments, savings accounts, you name it.

HILL: CNN chief business correspondent Christine Romans joining us now.

So, Christine, this has been pegged as one of the most important Fed decisions in years.


HILL: There was already a lot riding on it before the last 10 days or so.


HILL: Even more so today. Do we have a sense yet of what we can expect?

ROMANS: The mission here is for the Fed to slay the inflation dragon and not singe the banking system in the process. Can they do both of those things at the same time? And what does the Fed chief say about it? I think what he says to reporters after this decision is made will be very, very important. How he explains a lot of things, including how they missed Silicon Valley Bank and how that may be hampering their attempts to bring inflation back down to the 2 percent level they've had.

Look, they've been raising interest rates for a long time, for a year now, and that is revealing creeks in the banking system. I think today the expectation is that you could see 25 basis points. When we look at this sort of Fed guessing tool in the futures markets, it's showing a 90 percent chance that the Fed will raise 25 basis points.

Remember, just a couple of weeks ago, the Fed chief had signaled that they would need to have interest rates higher for longer because inflation was such a problem. And, look, economy is strong.

Since the last time the Fed met, you guys, the economy on almost every indicator has proven to be stronger than many people had expected. And the narrative has shifted from inflation peaking, to we could get a soft landing, to maybe no landing. The economy is really hot. And to now a banking crisis. So, it's just a lot to manage and balance here.

It will matter for you if they raised another 25 basis points in a lot of ways, on credit cards, mortgages, auto loans, any kind of borrowed money will get a little bit more expensive, as it has been over the past year. It could help cool the housing market even further.

But the big worry is that it doesn't roil the banking sector. And so that's -- that's that fine line the Fed has to walk here today.

HILL: Well, we'll be watching for that decision.

Christine, appreciate it. Thank you.


HILL: Let's keep the conversation going. Joining us now, Jeanna Smialek. She's Federal Reserve and economy reporter for "The New York Times."

Jeanna, always good to see you here.

You know, it's interesting when - and Christine, I think, lays out so well what the Fed is grappling with here. The fact that we still, you know, toward the end of March of 2023, have a lot of competing headlines that I think are also confusing for people. So, when we step back for a minute, we have this strong economy. We have all of these indicators. Even consumer sentiment was actually fairly strong last week, granted those numbers were from prior to the fallout with Silicon Valley Bank and others.

Depending on what the decision is, people are still going to take all of the rest of that into account, and that's going to influence their decisions. And really, for the American consumer, it's more about how they feel right now.

JEANNA SMIALEK, FEDERAL RESERVE AND ECONOMY REPORTER, "THE NEW YORK TIMES": Yes. And I think there is a huge question hanging over this decision, which is, is the bank turmoil actually going to hit main street? You know, is it going to make consumers feel worse? Is it going to disrupt credit provision and make it harder to get a mortgage? And I think, you know, a lot of that depends on how quickly it blows over or whether it sort of metastasizes into a full size crisis. And I don't think we actually know the answer to that question yet.

So, they are really in between a rock and a hard place today in the sense that they've got, you know, this very high inflation and solid economic momentum on one side, and then, on the other side, they do have to worry about the possibility of further instability in the financial system.


BERMAN: So, Jerome Powell needs to sail through this skill (INAUDIBLE), needs to sail through this issue of the banking problem on the one hand and inflation on the other. The decision to raise interest rates, whether it be a quarter point, or half a pointer, or, I guess, none at all, that will be the sort of tangible thing we get out of this. But what about his actual words? What are you listening for from him today?

SMIALEK: That is such a great point because I actually think what he says is going to be so much more important than whatever they do with interest rates. This is really going to be a decision that sort of hinges on how they sell it, how he chooses to talk about it. And so I think we could see him do a couple of things. We could see him talk about the need to balance these two risks, or we could see him really sort of play down the risks to the banking sector and talk about how focused they are on inflation.

When I talk to economists about what's likely, they are all over the map on that question. You know, I think this is a point of real uncertainty, which is going to make it a really interesting thing to watch when he gets his press conference at 2:30.

HILL: The other questions he's going to be asked, one would imagine, would be about whether the Fed missed any signs when it comes to Silicon Valley Bank. What are you listening for in that answer?

SMIALEK: Yes, so this is a very tough one for him to navigate because it's pretty clear that something went wrong here. You know, this bank was under Fed oversight. It should have these problems where, you know, growing in plain sight. And so, theoretically, the Fed should have been able to stop them. But it clearly did not. You know, it killed the bank in the end.

And so I think that he's going to have to talk a lot about why the Fed didn't act more decisively. It's clear, based on my own reporting, that the Fed knew well - you know, more than a year before all of this blew up that there were serious problems at Silicon Valley Bank. So, what was the problem? You know, where did things break down? Why wasn't this dealt with more rapidly? And those are - those are really tough questions. I don't -- I don't know what we'll hear from him. He may sort of punt the question and say, we're reviewing it. We're still trying to figure out. But it's clearly a pressing matter on the minds of the American people at this stage.

BERMAN: In terms of what's on the minds of the American people, some of this seems so confusing if you're sitting at home, as a regular consumer, what should you be rooting for today?

SMIALEK: That's a great question. You know, we're in a very weird environment where good news can be kind of bad news. And I think that can be really hard to parse.

But I think, at the end of the day, what the Fed is rooting for, what the sort of economists are rooting for, what maybe we all should be rooting for, is sort of a gentle slowdown in growth that enables things to sort of steady out, a more sort of sustainable path ahead for the economy. That doesn't necessarily throw a bunch of people out of work. You know, I think the dream is to have a slowdown that doesn't equal a lot of raised unemployment but one that allows inflation to slow down.

So, slightly cooler demand, a little bit less, you know, robust of an economy, but not so much that it feels painful. I think that's the best possible outcome at this stage.

HILL: That sounds like 25 basis points. If I'm translating. But we'll see. We'll see.

SMIALEK: We'll see.

HILL: Jeanna, always good to have you. Thank you.

BERMAN: All right, and just moments, lawyers for Fox and Dominion will be back in court as both sides try to convince a judge to skip a jury trial. How likely is that to happen? And could we see the Murdochs themselves forced to testify?

Plus, CNN is with Ukrainian troops getting a crash course in using U.S. missile defense systems. An inside look at their training and how crucial these weapons might be encountering Russian aggression.

HILL: And more than half a million students in Los Angeles home from school for a second day amid a worker strike. We'll get you caught up to speed on where negotiations stand now. That's just ahead.



BERMAN: Minutes from now a high-stake hearing resumes in the $1.6 billion defamation suit brought by Dominion Voting Systems against Fox News. Both teams are arguing their cases. They say they're so strong, the judge could rule in their favor in skip a jury trial altogether.

HILL: So the judge on Tuesday asking some very pointed questions, specifically of the Fox attorneys, including how the network could say it was neutral in its reporting on the 2020 election if they were putting guests on the air who they knew were spreading false information.

Joining us now to discuss, defense attorney, former federal prosecutor, Shan Wu.

Shan, always great to see you.

So, in terms of what we heard there, the judge actually called some of -- one of Fox's arguments, saying it doesn't seem to be intellectually honest. And they question specifically that Lou Dobbs, who had engaged - that he had engaged in legally protected neutral reporting, as they were saying, how that could be accurate when he was also signing his tweets with a MAGA hashtag. And they also pointed out that Maria Bartiromo had -- also pointed out had misled her audience, making it sound like she didn't know either way if some of these claims were inaccurate, but that she knew that Fox knew ahead of time before they went on the air.

When you hear those questions, and we know what that line of questioning is, what does that tell you?

SHAN WU, FORMER FEDERAL PROSECUTOR: Well it points out, Erica, just how unusual of a case this is because at this stage there is so much evidence factually out that the Dominion lawyers feel that they could actually make a good faith assertion that the summary judgment standards met. That's a very rare standard to successfully win in the complex case like this because that standard requires that there be no issues of material fact and dispute, and one side or the other is entitled to judgment on the law. So they feel that they have so much evidence already that they can say to the judge, hey, nothing in dispute here, no need for a fact finder. You can make a ruling on the law. So, it's an unusual situation.

BERMAN: So, in defamation cases, truth can be an absolute defense. Fox isn't even really trying that, though, Shan, they're just going with First Amendment. What's the difference here?

WU: Well, I think we should be thankful they're not trying that because we'd be relitigating the entire election at this point, John.


So the difference is, Fox is arguing that, legally speaking, let's pretend for a moment, judge, that you think there are no facts in dispute here. But legally speaking, the First Amendment completely insulates us from being sued for defamation here. Their argument being, look, these allegations we're reporting on don't mean that we believe them or that we were pushing them. We were just being news gatherers, and they were newsworthy. So, they're trying to basically use the First Amendment as a complete legal defense to the defamation case.

HILL: Which -- which really harkens back to a phrase that one of their hosts likes to use all the time, which is, you know, I'm just asking the question. Does that really hold up?

WU: It could hold up and I think that's probably why the judges is in the second day of the hearing, which I think was a little bit unexpected. Usually summary judgments fail because everyone says, look, there's lots of facts here we have to figure out. It's going to be a credibility determination. So, I think the judge is giving this some serious consideration.

There's an interesting further kind of bifurcation here, which is the question of whether the parent company that Murdoch is the chair for would be liable or not, or whether they could potentially say, hey, that's a factual issue here, and maybe we all know that they can prove we knew what was going on there.

If, on the other hand, they win on that point, and the judge agrees there wasn't enough knowledge for the parent company, then they could be out of the case and sort of leave Fox News to fin for itself.

BERMAN: And that might pertain directly to the Murdochs, correct?

WU: Correct.

BERMAN: Because the plaintiffs here, they've said they want to put Rupert and Lachlan Murdoch on the standard. If Fox Corporation is separated here, would that be less likely to happen?

WU: I think it would still be likely to happen. I think they would want to use the Murdochs' testimony to possibly kind of undercut the credibility of some of the Fox defenses that they were just reporting on allegations versus knowing that it was a falsehood.

So, although I think the Murdochs might - and their corporation might escape liability, I don't think they're going to escape the witness stand.

HILL: Oh, there's a lot to watch here. All right, day two, we'll see how it plays out.

Shan, appreciate it, as always. Thank you.

WU: Good to see you.

HILL: Dozens of Ukrainian soldiers are in Oklahoma. They're wrapping up training on the U.S. patriot air defense system. Just ahead, we're actually going to take you inside that training at Fort Sill as Ukrainian troops go through this 10 week crash course.