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Hilary Now Cat 4 Hurricane, Could Bring Heavy Rain to Southwest U.S.; Fallout Grows as Maui Wildfire Death Toll Rises to 111; Alleged Trump Co-Conspirator Followed Alex Jones to Capitol on Jan. 6. Aired 7-7:30a ET

Aired August 18, 2023 - 07:00   ET

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

POPPY HARLOW, CNN ANCHOR: California, that peninsula in the southwest of this country by the weekend.

[07:00:03]

Hurricane Hilary expected to weaken as it heads north, but if it hits California, even as a tropical storm, it would be unprecedented. It would be the first one to do so in 84 years.

Our Meteorologist Derek Van Dam tracking it all. What does it look like it's going to do?

DEREK VAN DAM, CNN METEOROLOGIST: Yes. This will be in a significantly weakened state by the time it impacts the Southeastern U.S. That's extremely important as a weather communicator to our television audience that people understand that just because we have a category 4 storm lurking off the coast of the Baja Peninsula does not mean we'll have category 4 winds in Southern California.

However, the impacts will be significant mainly because we're going to catch a large population density off guard because this hasn't happened since 1939, the last time a tropical storm made landfall in Southern California.

So, the official forecast track from the National Hurricane Center shows a landfall and tropical storm. Does it move inland? Does it stay over open water? That's to be determined. One thing is for sure, it is going to interacting with significantly cooler ocean waters, and that will help weaken the storm as it approaches the Southwestern U.S.

If the track takes it offshore, so no land interaction with the Baja Peninsula, more of a coastal impact. So, look out for large waves, coastal erosion and urban flooding possibility between Los Angeles and specifically into San Diego.

But if this storm takes a more easterly track, this brings the greatest impacts inland to Southern California, parts of Western Arizona and Southern Nevada. This is for Sunday into Monday. We'll look out for those wind impacts.

But the flash flood threat, this is what I'm concerned about, a high risk, very rare from the Weather Prediction Center. And that includes Palm Springs for excessive flash flooding. Get this, we could get one to two years worth of rain in a matter of a day or two.

This is how serious the storm will be. It is going to produce significant rainfall, and we're looking out for millions under flood watches as we speak, including, look at this, Las Vegas, Los Angeles, and just west of phoenix. So, a very, very difficult next 36 to 48 hours across the southwest. Poppy?

PHIL MATTINGLY, CNN ANCHOR: Please keep us posted. Derek Van Dam, thank you.

HARLOW: This morning, there's outrage, there's a lot of fallout and many questions over why there wasn't warning for the catastrophic wildfires in Hawaii. We know at least 111 people are confirmed dead. And new overnight, Maui's emergency management chief has resigned in the wake of America's deadliest wildfire in over a century. He was already facing serious criticism for not activating the island's warning sirens as the inferno closed in on Lahaina. Just one day before his resignation, he defended that decision to not sound the alarms.

MATTINGLY: And also developing overnight, Hawaii's Water Management Agency is coming under scrutiny. We're now learning a state official may have delayed giving permission to use extra water to fight the fire as the disaster unfolded. And also this morning, the ATF has announced it is sending a team of investigators to find out where and how the wildfires started.

Maui's mayor tells CNN nearly half of the disaster area has been searched, over cadaver dogs are scouring the scorched ruins.

I want to bring in Randi Kaye. Randi, you have been digging into the many questions about why here, what happened, but in particular why the warning sirens did not sound. What are you finding?

RANDI KAYE, CNN CORRESPONDENT: Yes, absolutely, Phil. We wanted to know what happened and we think that the people of Hawaii certainly deserve answers. And as we were digging into this, we found a lot of changing stories, a lot of explanations that continued to change and, quite frankly, a lot of excuses, and none of it really added up. All of this as the death toll continues to rise.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: So many of us residents felt like we had absolutely no warning.

KAYE: Hawaii has one of the largest public safety outdoor siren warning systems in the world, sirens that were silent as wildfires raged. The question is, why?

First, it was this.

HERMAN ANDAYA, FORMER MAUI EMERGENCY MANAGEMENT AGENCY ADMINISTRATOR: It would not have saved those people on the mountainside.

REPORTER: Do you regret not sounding the sirens? ANDAYA: I do not. The sirens, as I mentioned earlier, is used primarily for tsunamis.

KAYE: That's what the head of Maui's Emergency Management Agency said Wednesday, before suddenly resigning a day later. But even before that press conference ended, his reason had changed. This time suggesting the sirens weren't used because people wouldn't have been able to hear the warning.

ANDAYA: It's an outdoor siren. So, a lot of people are indoors, air conditioning on, whatever the case may be, they're not going to hear a siren. Plus, the winds were very gusty and everything. I heard it was very loud. And so they wouldn't have heard the sirens.

KAYE: Same story with Hawaii's governor. First this.

GOV. JOSH GREEN (D-HI): The sirens were typically used for tsunamis or hurricanes. To my knowledge, at least I never experienced them in use for fires.

KAYE: Then minutes later, another explanation.

[07:05:00]

This time, the governor suggested at least some of the sirens were broken.

GREEN: The sirens were essentially immobilized, we believe, by the extreme heat that came through. Some were broken. And we're investigating that.

KAYE: Yet that doesn't all track with the county's own webpage, mauisirens.com, which clearly states how the siren system is capable of alerting residents events to multiple disasters, including wildfires.

And we also found this explainer about the siren's uses on Hawaii's Emergency Management Agency's webpage.

UNIDENTIFIED MALE: We also use sirens for hurricanes, brush fires, flooding, lava, hazmat conditions, or even a terrorist event.

KAYE: This map, also from the county's page shows where the warning sirens are located. According to the state, there are about 400 sirens statewide, including 80 on Maui. And in the historic town of Lahaina, where more than 100 people were killed in the flames, there are five sirens, five sirens that were not used to warn those in grave danger.

Instead, officials say they chose to send alerts by text message to cell phones, as well as alerts on landlines and through T.V. and radio.

ANDAYA: It is our practice to use the most effective means of conveying an emergency message to the public during a wild land fire.

KAYE: While that may have worked in some cases, the wildfire moved so swiftly, it knocked out power and cell service. So, how were residents supposed to receive those warnings?

MIKE CICCHINO, WILDFIRE SURVIVOR: There's no warning at all. There's not a siren, not a phone alert, nothing, not a call.

(END VIDEOTAPE)

KAYE (on camera): And Hawaii has had problems in the past with its alert system. In fact, in 2018, a cell phone alert mistakenly alerted the residents there of an incoming missile attack. Obviously, that was a false alarm.

And also, back in 1960, this has been going on for quite some time after a tsunami hit the area of Hilo, Hawaii. Residents didn't even know what the siren alarm meant. They didn't know what to do. So, instead of going up into the mountainside for safety, they ran toward the ocean and 61 people died. Poppy, Phil?

MATTINGLY: Randi Kaye, great reporting, thanks so much.

HARLOW: We also have new exclusive CNN reporting this morning about pro-Trump lawyer Kenneth Cheseboro and his whereabouts, where he was at the U.S. Capitol on January 6th during the insurrection. He was the alleged architect behind the plan to submit a fraudulent slate of electors after Trump lost the 2020 race. He was among 19 people, including Trump, indicted this week on racketeering and other charges in Georgia's election subversion case.

Our Senior Crime and Justice Correspondent Shimon Prokupecz has this exclusive reporting. Where was he?

SHIMON PROKUPECZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Well, according to a CNN investigation, what we found is that he was outside the doors of the Capitol on January 6th surrounded by the mob of protesters, but also significantly following around a leading voice of the Stop the Steal movement and conspiracy theorist Alex Jones.

And now this morning, the big question, what was he doing there?

(BEGIN VIDEOTAPE)

PROKUPECZ (voice over): He is one of the alleged co-conspirators in two cases against Donald Trump for 2020 election interference. Now, for the first time, CNN has identified Kenneth Cheseboro outside the Capitol on January 6th shortly before a mob stormed the east side of the building.

He followed right wing conspiracy theorists Alex Jones for about an hour.

Cheseboro is the alleged architect of a plot to use fake electors to stop the certification of Joe Biden's win. This week, he was indicted along with Trump and 17 others in Georgia. He's also been identified as an unindicted co-conspirator in the federal case against the former president.

WOLF BLITZER, CNN ANCHOR: CNN projects Joseph R. Biden, Jr. is elected the 46th president of the United States.

PROKUPECZ: In the days after the November 2020 election, Cheseboro wrote a memo to a lawyer for Donald Trump. It's among the earliest known document mints outlining the legal strategy Trump would allegedly try to use. His memo focuses on January 6th as the hard deadline with ultimate significance to determine the validity of electoral votes.

Emails obtained by the January 6th committee show Cheseboro later suggesting to the Trump campaign that the fear of, quote, wild chaos on that day could provoke the Supreme Court to take action.

ALEX JONES, HOST, INFO WARS: Go to the White House.

PROKUPECZ: At the same time, Alex Jones was helping pay for and plan the January 6 rally, urging his massive audience to gather in Washington, D.C. The night before Trump's rally, Jones would warn of a coming battle.

JONES: This will be their Waterloo. This will be their destruction.

DONALD TRUMP, FORMER U.S. PRESIDENT: We fight. We fight like hell. And if you don't fight like hell, you're not going to have a country anymore.

PROKUPECZ: When the January 6th committee asked if Cheseboro was in Washington the first week of January, Cheseboro pleaded the Fifth.

[07:10:02]

JONES: Let's go take our country back. Trump's only minutes away. Let's start marching to the Capitol.

PROKUPECZ: But there is no question he was there. CNN has analyzed publicly available photos and videos from that day which show his movements.

In the hours before the insurrection, he was with Alex Jones and his entourage a short distance from the Capitol. Cheseboro is here wearing a red Trump 2020 hat, as lawmakers prepared to certify the results of the election Inside the building, Cheseboro follows Alex Jones and a crowd of protesters as they walk towards the Capitol.

Cheseboro has his phone out, seemingly recording Jones' every move.

JONES: Let's march around to the other side. And let's not fight the police and get the system what they want. We are peaceful.

PROKUPECZ: As Jones was leading a crowd to the east side of the Capitol, the west side was breached and rioters poured in.

At one point, while Cheseboro was on Capitol grounds, he appears to show something on his phone to a member of Jones' security team. Then Jones and Cheseboro climbed the Capitol steps.

There is no indication Cheseboro entered the Capitol building or engaged in violence. But shortly after Cheseboro and Jones left the steps on the east side, the Capitol was breached again as the mob poured into the doors. In all, more than 2,000 rioters would enter the building, vandalizing and looting, attempting to prevent a joint session of Congress from counting the Electoral College votes.

The House committee investigating January 6 would eventually call it the final step in Donald Trump's plan to try and overturn the election, a plan that started in earnest with Kenneth Cheseboro.

(END VIDEOTAPE)

PROKUPECZ (on camera): And we're hearing from Kenneth Cheseboro's attorney, who told us last night, he spoke to my colleague, Andrew Kaczynski and (INAUDIBLE), who have been doing all the reporting on this, saying that they're going to allow the legal process to play out and that they're declining to issue any public comment at this time.

And that sort of has been Cheseboro's thing, right? He hasn't really wanted to talk about it. When he was before the January 6th committee, he pleaded the Fifth, he claimed attorney-client privilege for most of the interview. So, he is one of the people who is going to have to surrender in Georgia next week by Friday.

MATTINGLY: That's great reporting by K-File team, Shimon. Stay with us as well. I want to bring in Elie Honig to talk about the legal implications here.

When you watch that piece, when you know Kenneth Cheseboro's role both in the federal and state cases, whether unindicted or indicted, what's your take on what you just saw?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Well, this is a big problem for Kenneth Cheseboro, and here's why. His defense, and I think a defense we're going to hear from a lot of the players here, is this was just lawyering. You can't criminalize lawyering. Because the main thing up until now that we knew that Kenneth Cheseboro was doing was writing these memos, suggesting ways they could try to disrupt the electoral count.

But he's not just some lawyer sitting in an ivory tower thinking of novel legal theories. Now, we see he's literally at ground level. And I think that raises real questions about his participation.

The other important thing to know about Kenneth Cheseboro, as Shimon and I were discussing, this guy is the underrated player here. Everyone is very focused on the other lawyers, Rudy Giuliani, on John Eastman, on Sidney Powell. If you read the indictment, he's the driving force. He's the one who's really coordinating with not just the top players but the local players too.

PROKUPECZ: Especially on the fake electors, right? That's what the --

MATTINGLY: The Wisconsin memo was.

PROKUPECZ: The Wisconsin memo. But also he's the driving force behind this idea that you can bring in these fake electors. The whole thing that's really interesting with him is that he's about sort of creating chaos, let delay, delay, delay.

HARLOW: He wrote as much.

PROKUPECZ: Right. And it's sort of let's just create this chaos, this uncertainty, and hopefully we can delay, delay, delay, and somehow the former president could get more votes, and somehow this can all work in his favor. That's what it's so much of this is about.

But it's also significant because he won't admit that he had conversations with Donald Trump. They asked him in the committee hearing when he was questioned, did you meet with Donald Trump? What were the discussions? Did you have any meetings with him? And he said, I'll take in the Fifth attorney, client-privilege. So, clearly, they know a lot of information. It's very clear the special counsel has a lot of information about him.

But as Elie said, no one really knew anything about him. And now that his name has surfaced out there and you start digging in, you really learn just how much he was behind all of this.

MATTINGLY: Can I just add one thing to that? We hear a lot about the fake elector scheme. But if you look at both indictments, Fulton County and DOJ, their allegation is not that the intent here was to trick people. Everybody knew Joe Biden -- you could go to CNN. I mean, everybody knew Joe Biden won. They weren't trying to say Donald Trump actually won. They were trying to create chaos. They figured if we can get someone to sign on to this somehow or just cause delay or cause confusion, that'll give us the opening we need. That's actually the charging theory in these indictments.

PROKUPECZ: I want to just ask quickly a question. Does this in any way help the former president?

[07:15:02]

Can you say, well, look, this lawyer was sort of the one telling me, you know, here just was allowed and I can do this? You know, are they going to try to use this as kind of a defense?

HONIG: Oh, 100 percent. It's called advice of counsel, meaning, my lawyers told me this was fine. But the problem is, they're all charged as co-conspirators, meaning they were all in on the crime together.

MATTINGLY: Yes. All Right, Shimon, great reporting, you and the K- file team. Elie, stay with us, I think, coming back.

HARLOW: So, we're just five days away from the first Republican presidential debate. Donald Trump, we don't think he's going to be on stage, but Chris Christie will. He's live with us, next.

MATTINGLY: And Trump suddenly canceling a news conference where he claimed he was going to present, quote, new evidence of fraud in Georgia's 2020 presidential election. New reporting behind that, change of plans and total lack of evidence, next. (COMMERCIAL BREAK)

HARLOW: In somewhat of a rare move from President Trump, he is canceling plans for his Monday night news conference, where he was promising to introduce evidence of fraud in Georgia's 2020 presidential election, even though no fraud has ever been substantiated there, according to Republicans leaving the state.

As all this unfolds, Trump's legal team is fine-tuning their plans for his surrender. The deadline to turn himself in is a week from today.

Our Alayna Treene joins us live with more of this reporting. It is an about face in terms of listening to people who tell him, do not talk about this for now.

ALAYNA TREENE, CNN REPORTER: That's true and it is a rare move from the former president. But listen, this press conference that he had announced he was holding caught a lot of people in Trump's inner circle off guard.

[07:20:00]

Like you just said, Poppy, his team and his lawyers in Georgia have been very focused on the negotiations that are ongoing right now with the District Attorney's Office in Fulton County. And so when they saw this post from Donald Trump, I think a lot of people were surprised.

And they're skeptical of what he could say in that Monday press conference, and understandably so. A lot of the false claims that he has been peddling for the past several years now are exactly what he's being charged for in Georgia.

And so our reporting and including our colleague, Kaitlan Collins, we've learned that his advisors had been encouraging him not to do this. And, of course, Donald Trump announced last night on social media that he no longer is going to be hosting this press conference on Monday.

Now, he also said that he thinks that he wants to still put out some of this report in legal filings. It's yet to be seen whether or not that will actually happen.

And one thing I want to point to as well is this report that he was floating about wanting to present on Monday was really kind of a pet project, I was told, of Liz Harrington, one of Donald Trump's aides. And she's one of the people who has been one of the former president's fiercest allies and also has consistently peddled the false claims about the 2020 election being stolen as well.

And so that kind of gives you a sense of what he was planning on saying and now is no longer going to be doing all right.

MATTINGLY: All right. Alayna Treene, thanks for the reporting.

And Elie Honig is back with us. Look, this is the question beyond the, hey, he's listening to his lawyers. That's different. The idea of suggesting his lawyers are definitely going to be using this in some or many filings as part, how plausible is that?

HONIG: Very low plausibility on that one. Look, if he had had this conference, it would have been disastrous, because he just wouldn't have had anything. He would have been really perpetrating more fraud. Not that he would be charged for it, but you would say, look, there is yet more evidence that there is nothing to this.

Now, when it comes time for trial, if there was evidence of fraud, you can bet it will be part of his defense, because he will say, well, I was told there was fraud, and there actually was, but it just doesn't exist. So, it's not going to make its way into the court case. There's no way that the U.S. Department of Justice missed it, the FBI missed it, CIS missed it, all these different agencies. So, the problem is he's trying to prop up this fiction.

And it was a wise move, wise counsel by his lawyers, to not do this conference. It would have been a mess.

HARLOW: Jack Smith, the special counsel, wants Trump to go to trial on the election subversion case in, like, four months, in January. Trump's team now says, no, we want three years. We want April 2026. Both of them kind of seem unreasonable, am I right?

HONIG: Both sides are way off base here. I mean, the 2026 request is not a serious one. I think that's clearly a negotiation --

MATTINGLY: Like how big tier college football teams schedule their opponents, like, five years, right?

HONIG: Exactly, like who's even thinking about 2026?

That said, I think it's important to note the January 2024 date is not only unrealistic but raises legitimate constitutional concerns.

HARLOW: For the defendant?

HONIG: Yes, for everybody, for the entire process. I fully understand the desire, the widespread desire in the country, in DOJ, in the courts, to get this case tried quickly. But if you try --

HARLOW: Because of the election?

HONIG: Because the election, because --

HARLOW: But they shouldn't be thinking about that.

HONIG: Nobody should be thinking about this. But just let's talk nuts and bolts. This is four months away. Donald Trump's team has received 11 million documents. They can't physically go through those in four months. And, by the way, the average run of the mill fraud case in the federal system takes two years to get to court. If you force Donald Trump to trial in four months, you're going to have a real constitutional problem.

HARLOW: Which could jeopardize the whole thing. HONIG: Could jeopardize a verdict.

HARLOW: Yes. Thank you.

HONIG: Thanks, guys. All right.

HARLOW: Good to have you.

Michael Burry, the investor The Big Short made famous, well, he made millions betting against the housing market in 2008 before it all collapsed. What's behind his new bet on the stock market crashing?

Ben McKenzie has been setting up on all of this. He knows a thing or two about it. He's with us in studio, next.

(COMMERCIAL BREAK)

[07:25:00]

MATTINGLY: Welcome back on this Friday morning. We're going to take a look at the pre-market numbers. You see everything us down just a little bit. Dow Futures down about 89 points. Nasdaq Futures down a little under 1 percent. S&P 500 down as well, a little bit, not terrible. They all fell about 1 percent on Thursday, a third straight day of losses over fears of another Fed rate hike.

And now, Michael Burry, the investor played by Christian Bale in The Big Short, appears to have placed a new bet, or at least at some point placed a new bet in the second quarter, and it's a big one. Remember, Burry was one of the first traders on Wall Street to discover America's massive housing market bubble in 2008. He bet against it. He made hundreds of millions of dollars.

Now, he appears to have made another big bet, this time betting against the stock market.

Joining us now, Actor, Writer, Director Ben McKenzie. He's also the author of The New York Times bestseller, Easy Money, Cryptocurrency, Casino Capitalism and the Golden Age of Fraud. Thanks for coming in.

BEN MCKENZIE, ACTOR: Thank you.

MATTINGLY: I was just telling you that we were talking about this yesterday because I've been obsessed with the Michael Burry story mostly because I think there's a lot of nuance and context to the filing itself.

MCKENZIE: Yes.

MATTINGLY: And I'm going to try not to wander down a granular rabbit hole that most people probably don't want to watch.

But the idea of this bet, he's definitely betting on a financial collapse. It's a billion-plus dollars.

MCKENZIE: Right. Not true. It's a notional value, so it could be worth $1.6 billion, but what he actually bet is far less. We don't know exactly --

MATTINGLY: Because you don't have to disclose.

MCKENZIE: You don't have to disclose that in the 13F. So, it's $10 million at least. It could be tens of millions. Burry's fund is only $100 million. So, it's a big percentage of his fund, but we don't really know what goes into that. It could just be a hedge.

What's interesting to me is that other big players, Warren Buffett in particular, Warren has been selling a lot of stock these last six months, hoarding cash. If there were to be a downturn in the markets, you would want to have cash, because then you would come in and scoop up stocks on the cheap.

So, there are some big players who are considering that the market is overvalued, and historically speaking, compared to historical averages, it is overvalued.

HARLOW: I think that's a great point about Buffett. He also waits to make big purchases until they're priced what he thinks is adequate. So, you don't just watch him selling. You watch what he's not doing, which is buying.

MCKENZIE: Absolutely. He's the Oracle of Omaha for a reason.

HARLOW: This is just, in a sense, if you could explain it to people, it could just be insurance, too.

MCKENZIE: Absolutely, yes. I mean, you know, he -- a lot of his positions are long, so he bets on certain companies that he thinks are undervalued.

MATTINGLY: What does it mean when you're long on something?

MCKENZIE: Well, you buy it and you hold it. He could just be hedging. He could just have some insurance.

[07:30:00]

Basically, he's going to win either way, right? If the market goes down, he's going to profit from his put options. And if the market goes up, he's going to profit from his long positions.