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Plea Deal between Justice Department and Hunter Biden regarding Tax and Gun Charges Falls Apart after Judge Questions Terms; Republican Senate Minority Leader Mitch McConnell Freezes for 23 Seconds Midsentence During Press Conference. Aired 8-8:30a ET.

Aired July 27, 2023 - 08:00   ET

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

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POPPY HARLOW, CNN ANCHOR: Good morning, everyone. It is the top of the hour, 8:00 a.m. here on the east coast, 5:00 a.m. out west. We're glad you're with us. And what a day in court, federal court yesterday. Erica Hill by my side. Thank you for being here.

ERICA HILL, CNN ANCHOR: Good to be with you. A bit of an unexpected day in court.

HARLOW: That's for sure. Hunter Biden's plea deal, that's what we're talking about, fell apart right before he was set to plead guilty. What comes next for the investigation and potential charges against the president's son. And how will this play into the race for the White House? We will ask the Republican governor of New Hampshire Chris Sununu in minutes.

HILL: New reporting on Mitch McConnell family members after he froze for 23 seconds in front of reporters. What President Biden said to him afterwards. And the previously unreported falls that we are now learning about.

HARLOW: The U.S. women's soccer team fighting back in a one to one draw against the Netherlands as they battle for a third straight World Cup title. This hour of CNN THIS MORNING starts right now.

Here is where we begin this hour. This morning Hunter Biden's plea deal in serious jeopardy after it fell apart at the last minute during this really dramatic and unexpected court hearing yesterday. In a stunning twist the federal judge put their deal on hold right as the president's son was getting ready to plead guilty to tax crimes and avoid prosecution on a felony gun charge. The judge called this plea agreement unusual, and she also questioned if it was even constitutional. She refused to be a rubberstamp, and raised questions about whether the deal gives Hunter Biden immunity from prosecution from other possible crimes, including his business dealings in Ukraine and China.

HILL: Republicans on Capitol Hill are pouncing on the judge's decision. Just last week the House Oversight Committee brought in two IRS whistleblowers who worked on the case who testified that Hunter Biden received, in their view, special treatment. One of those whistleblowers joined Poppy earlier this morning to react to the judge's decision.

(BEGIN VIDEO CLIP)

JOSEPH ZIEGLER, IRS SPECIAL AGENT, CRIMINAL INVESTIGATION DIVISION: The prosecution rushed this agreement through and mismanaged the situation. And he could have gotten off with an easy deal. The judicial system is working. You have someone that is looking at what is happening here, and they're seeing that this is not normal and that we have to treat everyone the same.

(END VIDEO CLIP)

HARLOW: Let's turn now to our CNN senior legal analyst Elie Honig. He's also former assistant U.S. attorney for the Southern District of New York. You were on the air trying to make sense of what was happening in real time during this hearing yesterday. What happens now?

ELIE HONIG, SENIOR CNN LEGAL ANALYST: Poppy, this was not your average plea deal. This was not your average plea hearing. They went from we have a deal to we don't have a deal to we do have a deal to we don't have a deal.

Let's talk about what's next. Let's start with what's next. Option one is they can try to get together. The judge has given them 30 days. She said get back to me. I need some legal briefing on you. But if they can get together on a deal where they agree on everything, they can go in and Hunter Biden can take a plea deal.

HARLOW: Which ostensibly could still be on two misdemeanors.

HONIG: It could be very similar to what the deal was supposed to be. They just have to iron out the details. The details really matter here. If they cannot do that, option two is it will be a trial. That is very risky for Hunter Biden. That will be on the tax charges. That could be on the gun charge, could be on other things. And if he goes to trial, there's a real risk if he's convicted of prison time. So Hunter Biden is going to be very incentivized to get that plea deal back together.

HARLOW: OK, politics.

HONIG: Yes.

HARLOW: Capitol hill, Republicans, Jim Jordan and others saying, see, the whistleblowers were right. The judge actually pointed out none of that was considered in yesterday's hearing.

HONIG: Yes. There's a big difference between the politics and what actually happened in court yesterday. Let's explain actually what did happen in court because this was really about a failure to come to an agreement, not the politics of it.

Now, here's the easy part. The plan was supposed to be Hunter Biden was going to plead guilty to the two tax misdemeanors, and then there was going to be a diversion. They were going to essentially throw out the gun charge. That part was easy. So the question was, though, if Hunter Biden enters this plea deal, what is he going to be covered for in the future? The easy part, the tax, he was not going to be charged for. Again, the gun, he's covered for that.

But the judge said, how about all this other stuff on the periphery around tax and the gun? Can he be charged, for example, if there's a Foreign Agent Registration Act, the foreign lobbying violation? Hunter Biden's team said, yes, he is covered for that. DOJ said, oh no, he's not. And at that point, the judge said you do not have a deal. The judge did not say this was a sweetheart deal or a harsh deal. She just said simply you do not have a deal.

[08:05:00]

By the way, Poppy, they should have seen this coming, because back in June when this news first came out, Hunter Biden's team said it's my understanding, his lawyer said, that the five-year investigation into Hunter is resolved, the whole thing's over. DOJ, though, said it's an ongoing investigation. If you're sensing some tension there, there is, and that blew up in court yesterday.

HARLOW: One of the things that I think is really interesting is the question of where does this go now in terms of the tie between the politics and keeping the politics out of it, out of the court proceedings, and the court proceedings playing into where the politics are going?

HONIG: The whistleblower, IRS special agent Ziegler, who you talked to last hour, he has said publicly and he reiterated to you just now that in his view the U.S. attorney was constantly limited. David Weiss has said, no, he was not. He said he had ultimate authority over this matter. I think there's three big questions that linger over the politics of this.

HARLOW: OK.

HONIG: Why did it take five years, about half that time under the Trump administration, half that time under Biden? Did Weiss in fact have full authority? They differ on that. And were there investigative avenues cut off? Special Agent Ziegler just answered that question in his interview with you. He said specifically we wanted to look at the money trail to another Biden relative, Valerie Biden, and we were prevented from doing that. And I think Congress is going to be very interested in that.

HARLOW: He also named in our interview, I think for the first time, others at the agency who he says stood in his way in doing that.

HONIG: Yes. So a lot of news made in that interview and I think will play into the ongoing political questions around this.

HARLOW: Final question.

HONIG: Sure.

HARLOW: Who could answer this question? HONIG: There may be a difference of opinion. David Weiss has said,

yes, I did have full unfettered authority.

HARLOW: But beyond Weiss?

HONIG: Merrick Garland.

HARLOW: Garland, and that's it?

HONIG: Yes. I mean, those --

HARLOW: Who has said he did?

HONIG: Merrick Garland has agreed with David Weiss.

HARLOW: OK, Elie, thank you very much. Erica?

HILL: All right, so Elie, stick around. We're also going to bring in now retired U.S. district judge for the Southern District of New York Shira Scheindlin. She's also a fellow at the College of Commercial Arbiters. It's good to have you with us this morning, Judge. So as we look at how all of this played out, the judge yesterday was very clear she was not going to be a rubber stamp, is it surprising to you, though, how quickly the deal seemed to fall apart and just how far apart the two sides were when they came into that courtroom?

SHIRA A. SCHEINDLIN, UNITED STATE DISTRICT ATTORNEY, SDNY (RET): Yes, it is surprising to me. They seemed not prepared for a judge who questioned parts of this agreement, which was the right thing to do. I think this judge acted completely appropriately. She did not question the deal itself in terms of two misdemeanors and the recommendation of probation and things like that, which are quite typical. But she wanted to be sure there was an agreement. So she asked good questions, and what she got was answers that the two sides did not have the same view as to what the immunity would be going forward, which Elie just spoke about.

And that's a very big issue, because if there's a prosecution five years from now or two years from now and one side says but I was given immunity, and the other side says you were not, then that becomes an issue in the next case. So that has to be clarified.

And the other thing that upset her was this diversion program. Instead of being prosecuted on the gun charge, the government had agreed that he could go into a diversion for a couple years, and if he behaved and followed the terms of the diversion, there would be no charge. But they said to decide if he violated it, they would come back to her and she would become the fact finder. And she said, now, wait a minute, that shouldn't be my job. That's a prosecutorial decision, and you're turning the court into the executive branch. And I've got to think about that.

So I thought she raised really important issues. But I think the deal will be salvaged because there was nothing about the deal itself that troubled her other than that they had a different view of what the immunities were and who would be the decider if he failed in the diversion.

HARLOW: Judge, I'm so glad you brought that up, because this was when she said I don't even know if this is constitutional, and that got a lot of attention, Elie. She's talking about a separation of powers issue here. Can you explain that to people better? The constitutionality question was about that specific part.

SCHEINDLIN: Right. So, there's the executive branch of the government, which is what the prosecutor is, the Department of Justice is in the executive branch. But she is the judicial branch. So our country has three different branches, legislative, judicial, and executive. And what she was saying is that belongs in the executive branch. So usually when there's a diversion program and somebody has to follow certain rules for two years, I think that was the diversion here -- I think he couldn't have any alcohol, he couldn't use any drugs, obviously no guns, there were terms and conditions. But they didn't want the fact finder to be the executive branch.

[08:10:00]

And the reason I think that the defense team was worried about that is if the next administration was under Republican control, if it was President Trump, they felt that he might not be a fair fact finder, that his Justice Department would be biased, would be politicized. So they wanted the judge to make that decision. But she was troubled. She said, but that's turning me into a potential prosecutor, and I would be in the executive branch, and I can't. I'm in the judicial branch. And she's right about that too.

HILL: She said she didn't want to get out of her lane. Elie, really quickly, the judge just said she thinks they'll be able to come to some sort of an agreement. Do you, based on your experience, right, as a former prosecutor, do you see anything in the way here?

HONIG: Well, look at the incentives here. If Hunter Biden does not come to a plea agreement, he's going to have to go to trial. The risk there is enormous. And from DOJ's point of view, all you want to do is reach a fair disposition. The fact that they're willing to go this far with Hunter Biden tells me they are willing to dispose of this case for probation and the diversionary program. So I think it's more likely we do see a revised plea agreement that meets with the judge's approval. Not certain though, but the incentives are really pushing especially Hunter Biden that way to protect himself.

HILL: Elie Honig, Judge Shira Scheindlin, appreciate the insight from both of you this morning. Thanks.

HARLOW: We have new CNN reporting this morning on Senator Mitch McConnell, the minority leader, of course. We've now learned that he's fallen more times this year than previously known. This reporting comes after a scary moment on camera at a news conference yesterday. The 81-year-old Republican just suddenly froze midsentence for 23 seconds. Here is that moment.

(BEGIN VIDEO CLIP) SEN. MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: We're on a path of finishing the NDA this week, been good bipartisan cooperation, and a string of -- string of --

UNIDENTIFIED FEMALE: Are you good, Mitch?

UNIDENTIFIED MALE: You OK, Mitch?

(END VIDEO CLIP)

HARLOW: McConnell's fellow senators there asking if he's all right, eventually pulling him to the side before he returned to the podium.

(BEGIN VIDEO CLIP)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Could you address what happened at the start of the press conference, and was it related to your injury from earlier this year where you suffered a concussion?

MCCONNELL: I'm fine.

RAJU: You're fine, you're fully able to do your job?

MCCONNELL: Yes, yes.

(END VIDEO CLIP)

HARLOW: So this latest incident raising understandable concerns, but we've also around learned that it is not the first time there has been concern. Sources telling CNN in February McConnell tripped and fell in Helsinki while getting out of the car on a snowy day to meet with the Finnish president. That was just days before he fell in March. That incident happened in D.C. at the Waldorf Astoria hotel, and that is when he slammed his head, suffering a concussion and breaking ribs. At a news conference in June, he had trouble hearing questions from reporters despite the fact that those next to him could hear clearly. Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: What are your concerns as it relates to A.I.?

SEN. MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: Repeat that again.

UNIDENTIFIED FEMALE: On A.I., are you concerned at all about artificial intelligence and what are your concerns related to that? How should Congress address it?

MCCONNELL: What is my concern about?

UNIDENTIFIED MALE: Artificial intelligence.

MCCONNELL: About what? I'm having a hard time hearing your voice, sorry.

UNIDENTIFIED FEMALE: On artificial intelligence.

MCCONNELL: A.I.?

UNIDENTIFIED FEMALE: Yes, on A.I.

MCCONNELL: Well, I think everybody's concerned about A.I.

(END VIDEO CLIP)

HARLOW: Earlier this month McConnell tripped and fell at Reagan National Airport while he was getting off a plane. And yesterday, as you saw, he abruptly stopped speaking midsentence at the podium.

Let's get to CNN Congressional correspondent Lauren Fox. Lauren, good morning to you. This is just the latest issue for McConnell as we've outlined. Do we have an update on how he's doing this morning?

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Yes, Poppy. Yesterday we asked repeatedly how he was doing, and you heard from him directly saying he was fine. He did tell reporters yesterday evening that he got a call from President Joe Biden who just wanted to check in on him, make sure he was OK. And then he sort of made a quick joke about being sandbagged, of course, alluding to the fact that the president himself tripped a couple of months ago over a sandbag on stage. Here's what McConnell said to reporters leaving his office last night.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: The president called to check on me. I told him I got sandbagged.

(END VIDEO CLIP)

FOX: And one of the most obvious questions after the incident yesterday was whether or not he was seen by a physician. Right here on Capitol Hill we have the attending physician who is available to lawmakers. His office did not answer repeated questions about whether or not he had an opportunity to see a doctor after that incident yesterday.

[08:15:00]

What we know is that he got lightheaded that he stepped away for a few moments and then came back to the podium to answer a series of questions on a plethora of topics, including about impeachment and his own health.

But as you saw there in the clip from our colleague, Manu Raju, who pressed him on what had happened at the beginning of the press conference, he just said he was fine. So, that's all the information we have right now. But like you noted, there is just concern about whether or not this incident is an isolated one.

Given the fact that we now know that there have been other incidents of him tripping and falling more than what we had previously known that he had fallen at that event back in March at the Waldorf Astoria, where he had suffered a concussion and a fractured rib. So, getting a much bigger sense now of the full House picture of the Republican Leader of the Senate, Mitch McConnell.

POPPY HARLOW, CNN ANCHOR: Wishing him well. Hope he's doing just fine, Lauren Fox, thank you.

ERICA HILL, CNN ANCHOR: A top Senate Republican has a message for GOP candidates on how to block Donald Trump from securing the nomination.

HARLOW: And those 2024 contenders continuing to court New Hampshire voters including our next guest, Governor Chris Sununu, joining us next.

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HARLOW: A major Republican cattle call in Iowa tomorrow night. Nearly all of the Republican Presidential candidates including former President Donald Trump will converge at the Iowa GOP annual Lincoln dinner in Des Moines. Candidates will get a maximum of 10 minutes to talk to the audience.

The Iowa event comes less than four weeks from the first Presidential debate and a new Fox Business Poll from that state, shows Trump with a commanding lead over the rest of the field. One of the attendees at the dinner will be sizing up the candidates, that is someone who's not going to be a candidate.

At least not this time, New Hampshire Republican Governor Chris Sununu, who decided against a 2024 Presidential bid. And said he will also not seek reelection in his state. Good morning. Thank you, sir, we're glad you're with us.

[08:20:15]

GOV. CHRIS SUNUNU (R-NH): Good morning.

HARLOW: What do you want to hear tonight?

SUNUNU: So, I think the importance of Iowa's -- first, they're all going to be there. And what I've told all the candidates, my two cents of advice is don't focus on the policy, you got to bring some charisma, you got to bring some personality, you got to show leadership at a different level, right?

They got to -- they got to start kind of flaring out, if you will in getting people excited about what might be possible as opposed to just another candidate that isn't Donald Trump. So, I think that's the opportunity they have here to get people excited. They're going to be on a stage out on a debate stage per se. But honest stage since the first time we'll see them all kind of back-to-back to back. So, it's going to be pretty exciting.

HARLOW: You have also said though, you want candidates who are, quote, willing to swing and take the punch at beating Trump. We've seen one do that and that is Chris Christie. Does that mean he's got your endorsement coming? SUNUNU: No. Look, I love Chris, by the way, I think they're all good. I think a lot of them are probably waiting for the debate stage, I really do. Now, I will be as hard as Governor Christie has been, I don't know. I mean, Governor Christie has been kind of full force. I love it, I love the show. I think he's doing a great job. I think all of them should be there.

But I think you're going to see some more zingers. They got to kind of start separating themselves without a doubt. And look, what's happening to Donald Trump's numbers, just right here in New Hampshire. He's at 37 percent, that means 63 percent of the most hardcore voting base of Republicans don't want that guy. Huge opportunity. Trump is very --

HARLOW: Wow.

SUNUNU: -- very beatable. But we have to find the candidate that's going to surge.

HARLOW: That's I was going to say huge opportunity, unless you have too many people running against him and then -- and then he does it again. I mean, I just think it's interesting, this sort of growing chorus, you've got the op-ed by Mitt Romney this week, saying, if there's no viable path pull-out by, you know, February 26.

You've got Chris Christie telling me on this show earlier this week, he agrees. Now, you have John Thune, essentially echoing that, you know, if you want someone to be anti-Trump, you got to get out of the race. You've said they actually need to do that earlier, other Republican candidates than what Mitt Romney is calling for.

SUNUNU: Well, a little bit, look, it definitely needs to be before Super Tuesday. I think that's what they're talking about. Given that Iowa, New Hampshire, I think you're going to see three or four candidates not get to the second debate and they'll drop out. I'll see figure see two or three or more.

HARLOW: Have you said November or December?

SUNUNU: I did, and I think, I said two or three more by then dropped out in the -- in the late October November timeframe, because their polls are just sitting in single digits. And right before Iowa, my guess is you're going to see five people in the race, something like that.

HARLOW: OK.

SUNUNU: After New Hampshire, you got to get them down to one on one.

HARLOW: Who should stick around? Who should those five be?

SUNUNU: Whoever's got it.

HARLOW: Come on.

SUNUNU: Whoever shows something. HARLOW: Just give me you --

SUNUNU: And that's what -- that's what it's all about it.

(CROSSTALK)

HARLOW: Just give me a few names.

SUNUNU: It's really on personality. It's on leadership and personal. I'm not saying these guys have to have a dance off on the stage --

HARLOW: Who has a personality?

SUNUNU: -- and (INAUDIBLE) although, that would be good.

HARLOW: Who -- you can answer my question.

SUNUNU: But that will be good but --

HARLOW: Candidly because you're not running for anything again. So, who has the personality?

SUNUNU: Well, I have to be a personality -- you know, look, Ramaswamy, I got to tell you is exciting people. He gets people excited on stage. I think he's got to bring a little more to it other than just being the other anti-woke guy. I think some of the newer candidates I think Burgum is spinning some money people look in his way.

You know, the Pence, Haley, Tim, Scott, they've been in the race a while, people know exactly where they are. They're great individuals with amazing records. But they've got to bring really some personality and I think this opportunity to do that, but we haven't seen a ton of it yet. But there's still time, these three or four months here, what will really start narrowing down.

You'll have people surge, you'll have them implode on the debate stage, it'll be a drama. And that's the drama we want to see. We're tired of the Donald Trump drama. We want real Republican drama, Donald Trump's out of Republican. We want real Republican drama --

HARLOW: You want drama.

SUNUNU: -- what we see and kind of go back and forth.

HARLOW: Headline, on CNN News Drama. OK.

SUNUNU: The right drama.

HARLOW: OK. All right, wait.

SUNUNU: The right drama to find the right.

HARLOW: I want to turn to what the extraordinary thing that happened in the federal courthouse in Delaware yesterday. And Hunter Biden plea deal falls apart and your Republican colleagues in Congress are pouncing on it. Trying to conflate with the whistleblowers have said which is important to hear that that's not what was at issue in the courtroom yesterday. But here's a sampling of what they said.

(BEGIN VIDEO CLIP)

REP. RALPH NORMAN (R-SC): A collapse because it was a sweetheart deal from a family that has been protected. Hunter Biden being the main character.

SEN. JOSH HAWLEY (R-MO): Hunter Biden is getting a sweetheart deal that no other American who wasn't rich and had a father as the President, would ever get ever.

SEN. LINDSEY GRAHAM (R-SC): If you believe the whistleblowers and what they're saying no, this was a sweetheart deal. It was corrupt in terms of how it was handled.

(END VIDEO CLIP)

HARLOW: You know, you have said, you're not going to get elected President by bashing the Hunter Biden deal. Do you still feel that way?

[08:25:00]

SUNUNU: Well, look, I've said very clearly anytime a politician or politician's family has the word deal next to them? That's a problem. That's a huge problem. I don't think this is the only thing but I'm going to tell you, I don't think Joe Biden is the nominee in 24. And this is just --

HARLOW: You don't? Who?

SUNUNU: -- one drop many of the many drops in the bucket. No, I don't.

HARLOW: Who is?

SUNUNU: I think -- I think he's going to go through the primary process. I think he's going to collect all the delegates, and I think you're going to see a wild convention, where he and his people start steering the delegates somewhere else. I really believe that sincerely. I think it's a health thing, I think it's at the Hunter Biden thing.

They're doing everything to make sure that he doesn't have to testify and have to sit there in court and open all this other stuff, the whole book gets opened up if that process happens. So, look, I don't know whether it's a grand scheme. I'm not a conspiracy theorist by any means. But I just think that's the way it's playing out. I don't think Trump or Biden are on that ticket.

HARLOW: Wow. Quickly, Politico article really was fascinating to me, quotes, "Sununu's exit spells the end of a whole breed of Republican governor". Do you agree?

SUNUNU: No, look, there's a lot of great governors in the wings. I appreciate that sounds -- that sounds, that's very flattering, very honored to be put into that context. But no, there's a lot of great Governors in the wings, in a lot of these more purple states, you know, ready to get elected to surge forward.

Whether it's in Arizona, I think there's still opportunity whether it's in, I think Kentucky and Louisiana this year are going to be great pickups for the Republican Party on the governor side. So, I think there's huge opportunities out there for the future.

HARLOW: Governor Sununu, thanks for your time

HILL: So, Governor Sununu wants better drama on the Republican side, but he may also be wishing for some I think on the Democratic side we'll be watching that. This just in here, gas prices is maybe not what you want to hear this morning. Climbing to an eight-month high. So, what is fueling that rise? We've got a live report just ahead.

HARLOW: Tell him thank you. Plus, what caused that dramatic crane collapse in Midtown Manhattan. We'll speak to the head of the New York Fire Department, they'll join us, next.

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