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Soon: Trump in Court As Civil Fraud Trial Begins; McCarthy's Speakership Threatened After Spending Deal; Interview with Rep. Warren Davidson (R-OH); CNN: Kerik Subpoenaed to Testify at Georgia Election Trial; Newsom to Appoint Laphonza Butler for Feinstein's Seat. Aired 8-8:30a ET

Aired October 02, 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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[08:00:49]

POPPY HARLOW, CNN ANCHOR: Good morning, everyone. So glad you're with us on this Monday. Hope you had a nice weekend. We have a lot to get to this hour. Let's start with five things to know for this Monday October 2, at any moment, Donald Trump will leave Trump Tower and head to court in New York City for the start of his high-stakes civil fraud trial.

PHIL MATTINGLY, CNN ANCHOR: And allies of Kevin McCarthy are scrambling to stop a right-wing revolt led by Congressman Matt Gaetz, he says he'll file a motion to remove McCarthy as Speaker. This week McCarthy's response, "bring it on."

HARLOW: Breaking overnight, California Governor Gavin Newsom picking a historic replacement to fill Dianne Feinstein's Senate seat, naming the head of EMILY's List, Laphonza Butler.

MATTINGLY: And embattled New Jersey Senator Bob Menendez is due back in court today as calls for his resignation grow louder. We're going to speak to a Congressman who was jumped into the race in the Senate to unseat him.

HARLOW: We have no winner yet --

MATTINGLY: Yes.

HARLOW: -- in the Powerball jackpot. It is worth of a billion dollars. Phil informs me if he wins he will always continue to come to work.

MATTINGLY: Yes.

HARLOW: Which we're very happy about. No ticket matched all six numbers in the drawing this weekend. It is the second largest jackpot this year. This hour of CNN This Morning starts right now.

(BEGIN VIDEO CLIP)

DONALD TRUMP, (R) FORMER U.S. PRESIDENT: Everything I touched turned to gold.

Well, New York is doing great. I will tell you whether it's 40 Wall Street or whether it's Trump Tower or any of the other things that we own is doing great.

I'm really rich.

I'm very rich. I built an unbelievable company. The money you're talking about is a lot.

(END VIDEO CLIP)

HARLOW: For decades, Donald Trump has been telling us all how rich he is from his real estate business. Well, just two hours from now he will be in court fighting for his reputation and real estate empire as he stands accused of inflating his wealth by billions of dollars and overvaluing his buildings to deceive banks, insurance companies and the public.

MATTINGLY: Trump's civil fraud trial is set to begin in Manhattan at 10 a.m. Eastern and the former president says he'll be there in- person. We have live team coverage this morning. Kristen Holmes is outside Trump Tower where he's preparing to leave. But let's start with Kara Scannell, who's at the courthouse here. Kara, this is a civil case not a criminal case, but it could have serious implications for Trump's business empire?

KARA SCANNELL, CNN REPORTER: That's right, Phil. It already is having implications for Trump's business empire. But when court gets underway today at about 10 a.m. Trump will be squaring off across from the judge, Judge Arthur Engoron, who is overseeing this case, and will ultimately decide the verdict in this case. It's not a jury trial.

This judge has already dealt Trump and his business a blow saying that Trump did engage in fraud for 10 years persistent fraud by inflating the value of some of his properties, including Mar-a-Lago, his apartment at Trump Tower. And what prosecutor -- or in this case, the Attorney General's Office aims to prove at this trial is that they did this, they inflated the race to get better rates of insurance and interest rates on loans. So the Attorney General's Office is seeking to get damages in this case, that's really a big part of what it's -- what is at stake here, as well as individual accountability. They're alleging that the Trumps, that's Donald Trump's two eldest sons, engaged in fraud by inflating the value of these assets, by falsifying business records and by committing insurance fraud by giving these faulty statements to insurers and banks. So Trump's is on the witness list. He won't be testifying today, that will be later on in the trial. But he is showing up today to show his face to this judge, this judge who will ultimately make the decision and it's a change because when Donald Trump was accused by E. Jean Carroll of sexual assault and defamation earlier this year, he did not attend that trial, the jury awarded her $5 million. He's showing up today on opening day, and that his lawyers and the state attorneys will give opening statements and then it will move to witnesses.

Now, the judges set aside three months for this trial. It may not take that long, but certainly a change of face here for Trump. He's showing up. He's going to show up to the judge, show why this matters because the judge has already, in addition to find a committed fraud, said he was going to cancel some business certificates. It's not yet clear exactly what that means. But a lot is at stake for Donald Trump at this trial. Phil, Poppy?

HARLOW: Kristen, he moved, rescheduled a deposition in a different case just so he could be in court today. It's really interesting, what do we know why he wants to be there?

[08:05:12]

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Yeah, Poppy, look, I've talked to a number of his advisors and allies and stated that he has been increasingly agitated about this trial. In particular, he wanted to show up as a show of force, really sit there in the audience, looking at the judge, as these opening remarks were made.

As Kara noted, he's not going to testify. He's not going to be called as a witness today, but he does want to be in the courtroom. He did post this on Truth Social last night saying, I'm going to court tomorrow to fight for my name and reputation. Then he goes on to slam the attorney general. But then I want to read you the part afterwards, because this is what Trump has been really fixated on. He values, talking about the judge, Mar-a-Lago in Palm Beach at $18 million. Mar- a-Lago, being his home in Florida. Trump has been fixated on this particular part of the judge's ruling. He said this outrageous. He has called allies over it, saying it should be worth more money.

And we talked about Trump as a whole, it's not just his business. It is his brand. He played that clip at the beginning talking about how Trump has sold himself as a rich businessman for decades. He also sold himself like that in 2016. That's the heart of his entire stick really on becoming the President, saying I'm going to fight for you. I'm a businessman. I know how to negotiate. Look at how rich I am, I can make you rich as well. And it is not lost and he's still running for President, again. As you said, just scheduled another deposition but he also is coming from Iowa, where you had a campaign event yesterday and just starting to show you how the legal side of this and the campaign are going to be so intertwined as we move forward closer and closer to the election are those primaries.

HARLOW: Kristen, thank you. I know you're watching closely. Kara, down at the courthouse. Appreciate it very much. Phil?

MATTINGLY: Well, from New York to Washington where it is a crucial week for House Speaker Kevin McCarthy as he battles to keep his job, it comes after he struck a last-minute deal with Democrats to avert a government shutdown. But Congressman Matt Gaetz, he's leading a right- wing hardliner revolt, to oust the Speaker.

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REP. MATT GAETZ, (R) FLORIDA: I do intend to file a motion to vacate against Speaker McCarthy this week. I think we need to rip off the band aid. I think we need to move on with new leadership that can be trustworthy.

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MATTINGLY: It's worth noting, some Republicans not buying what Gaetz is selling.

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REP. MIKE LAWLER, (R) NEW YORK: They are the reason that we had to work together yesterday with House Democrats to pass a CR. That is not the fault of Kevin McCarthy. That's the fault of Matt Gaetz.

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MATTINGLY: And in quite a twist, it's actually Democratic allies who could save McCarthy from Gaetz, if you push this forward, left open. There's no consensus right now to where the minority party stands. CNN's Lauren Fox joins us live from Capitol Hill. Lauren, I think that's the big question right now. They're holding their fire. But what role do we think Democrats are going to actually have here?

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Yeah, I mean, Democrats could be the deciding factor, Phil. There's no way around that reality for Kevin McCarthy. But the Democratic leadership, they're warning their members not to cut side deals, not to try to figure this out on their own, but instead wait for leadership to make a decision and wait until they have a family conversation about the path ahead. You saw that last night in a notice that went out from Katherine Clark, the Democratic Whip, who said if this is brought forward from Matt Gaetz, that there is going to be a caucus meeting to discuss it.

And right now, Democrats are not united on several factors. A, what they would do if this came to the floor, if they would save Kevin McCarthy. And, B, if they did try to help McCarthy either by voting present or voting with Republicans on a procedural step to table this resolution. One of the key questions is what extractions would they be trying to get? You hear some Democrats and Republicans talking potentially about a rules change some kind of power sharing agreement. But I talked to one Democratic member yesterday, who said that he's been warning colleagues that particularly when it comes to that question, do you really want to buy into a government that you don't have full control over?

So there are a lot of moving parts, a lot of hearing opinions and that's why leadership has been very clear with their caucus. Keep your powder dry. For his part, House Speaker McCarthy is defiant saying that, if Gaetz wants to do this, go ahead.

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UNIDENTIFIED FEMALE: He's coming for you, can you survive?

REP. KEVIN MCCARTHY, (R) HOUSE SPEAKER: Yes, I'll survive. You know, this is personal with Matt. He's more interested in securing TV interviews than doing something. He wanted to push us into a shutdown, even threatening his own district with all the military people there who would not be paid, only because he wants to take this motion. So be it, bring it on. Let's get over with it. And let's start governing.

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FOX: There -- there is a trust deficit, though, between Republicans and Democrats and that was on full display on Saturday when McCarthy made that last minute decision to bring a short-term spending bill to the floor of the House. And then didn't give Democrats really much time to read it. Democrats had to use delay tactics to try to give themselves a little more time to scrub the tax. Make sure there weren't any poison pill amendments. That's just the latest episode that Democrats say make them very wary about entering into any kind of agreement to save Kevin McCarthy. Phil?

[08:10:22]

MATTINGLY: The 118th Congress, Lauren Fox, thank you, appreciate it. Poppy?

HARLOW: All right. We just heard last hour from one Republican lawmaker who says she does not support an effort to oust McCarthy and raises a key question for those looking to remove him. Listen.

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REP. MARIA ELVIRA SALAZAR, (R) FLORIDA: Can Kevin McCarthy is the man for the job, and he has an overwhelming majority of members within the GOP conference. We're with him, you know why? Because he's done a good job. And if it's not him, who?

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HARLOW: Joining us now is Republican Congressman Warren Davidson of Ohio. He's a member of the Freedom Caucus, also serves on the Foreign Affairs Committee. He voted against the 45-day continuing resolution on Saturday, but voted for Speaker McCarthy on all 15 ballots back in January. Good morning, Congressman, it's nice to have you.

REP. WARREN DAVIDSON, (R) OHIO: Good morning, Poppy, thanks for allowing me to join you.

HARLOW: So why did you vote no on this resolution?

DAVIDSON: Look, it sustains the status quo. I mean, Republicans didn't campaign on the status quo. This is Nancy Pelosi, Chuck Schumer, Joe Biden's spending bill with their policies. So I have to have a change. We have to have either policy or spending cuts. We propose that and unfortunately, all Democrats opposed it, 21 Republicans opposed it. So we didn't send over what I thought we should send to the Senate. And to me, a pause is better than the status quo.

HARLOW: Do you think you're going to get there? What took the sort of nine months to get to this point? You've got now 45, 46 days to get this done? You think you'd get there?

DAVIDSON: Yeah, I think we have to. And look, one of the plays that wasn't called here was, you know, Speaker McCarthy just referenced a lot of military in Matt Gaetz' district, there's a lot of military all over the United States, and, frankly, the world. The House passed a spending bill, if we want to fund the troops, we could have simply sent over our Defense Bill. So I think at the end of the 45 days, we have to be prepared to fight for what we've passed as Republicans in the House of Representatives, and hopefully we get some that are bipartisan, where Democrats join us and say we want to focus military, not one that's distracted by all these policy diversions that the Biden ministration has dumped on our Department of Defense.

HARLOW: Congressman, I wonder if you agree with what House Minority Leader Hakeem Jeffries said over the weekend. Here he was.

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REP. HAKEEM JEFFRIES, (D) MINORITY LEADER: The American people have won, the extreme MAGA Republicans have lost. It was a victory for the American people and a complete and total surrender by right wing extremists, who throughout the year, have tried to hate to hijack the Congress.

(END VIDEO CLIP)

HARLOW: Your fellow Republican, fellow member of the Freedom Caucus, Byron Donalds, said yesterday that you guys didn't get anything out of this continuing resolution, he pointed to the border, et cetera?

DAVIDSON: Yeah, that's what I mean. That's why, you know, 90 of us voted no. There's really nothing in it to like people that have campaigned on changing the status quo. You keep funding Biden's open border. You keep funding his woken, weaponized military and Department of Justice. It is a total sustainment of the status quo.

I think the only victory that people could point to is it was a bit of a setback for the globalists that want regime change wars all over the world. So there was no funding for Ukraine in it. But there was apparently a signed deal to have that in a separate vote. So what I've done is I've reached out to Matt Gaetz and Speaker McCarthy to say, can we have sort of a negotiated agreement so we can stay focused on our appropriations so that the end of 45 days, we send over everything we've passed to the Senate in only a CR on the things that haven't yet pass.

HARLOW: Well, just a couple of days ago, you have put forward legislation called The Define the Mission Act, basically, you want the President to have to inform Congress within 30 days of a specific just looking at the words here, the specific comprehensive strategy if you're going back more funding for Ukraine. President, the White House, Pentagon has been warning they are very close to being out, maybe within less than 45 days of increased funding for Ukraine. President Zelenskyy told senators when he visited with them in September, "if we don't get the aid, we lose the war." Congressman, is that an outcome you're willing to accept and that you think the American people should accept?

DAVIDSON: I hope it's not an outcome that the Biden administration wants to accept. But let's go back to where he started. I mean, the first thing Joe Biden's administration did was offer President Zelenskyy a ride out of Ukraine.

HARLOW: What I'm asking about now -- but just Congressman, where we are now, hearing what President Zelenskyy said and the reality of where we are on the funding, is that an outcome that you think is acceptable?

[08:15:00]

DAVIDSON: Now, do you believe that the Biden administration doesn't have a mission? They won't share one because they don't want to be held accountable.

If you take Victoria Nuland's words though, what she says, and she's the undersecretary for State, what she says is that we're pursuing a regime change in Russia, including war crimes tribunals for Vladimir Putin.

I'm not saying that's unjust, but I'm not -- I tell you, that's not a mission the American people support, and it is not one that the people of Ukraine can accomplish.

So if that's the mission, yes, you might grind the Russian army down, but you're grinding the Ukrainian army down even worse, and you're grinding the country down.

So why wouldn't you be working on a negotiated agreement in Ukraine and the Biden administration work to prevent that?

HARLOW: I do want to get your take on McCarthy because again, we said at the outset, you've been a big supporter of his, but 19 of Republicans, including yourself voted against this bill, and we just heard him say, I will survive.

Do you think Speaker McCarthy can survive this with the gavel in hand, just looking at the votes?

DAVIDSON: Matt Gaetz and Speaker McCarthy are both talented guys, I will say, you know, Matt kind of reminds me of Dennis Rodman, you know, he's a guy that finds a way to win often. He was tough to coach, but at least he listened to Jordan.

And in the House right now, if you listen to Jim Jordan, we're better off keeping Speaker McCarthy and working to accomplish what we said we would do.

And you know, look, I know Matt believes that Kevin hasn't kept his word and frankly, so do Democrats, but I think we have to come together and work to say we have to pass our agenda and we have passed 70 percent of our funding bills.

We should have never sent over a status quo appropriations package when we've passed 30 percent of the funding. We should have sent that with the continuing resolution on the things that haven't yet passed.

HARLOW: So is that a yes, you think McCarthy survives this with the gavel in hand? DAVIDSON: I don't know. It's going to be an interesting week because

he can't do it without Democrat votes and if he gets Democrat votes, he's going to lose a lot of Republicans.

HARLOW: Well, it is going to be an interesting week, that's for sure. You guys have your work cut out for you.

I appreciate you joining us this morning, Congressman Warren Davidson.

DAVIDSON: Thank you.

HARLOW: Thank you -- Phil.

PHIL MATTINGLY, CNN ANCHOR: Interesting week indeed.

Also this morning, there are new developments in the Georgia election subversion case. Former New York City Police Commissioner Bernie Kerik has been subpoenaed to testify. The first on CNN reporting, that's next.

And in Spain, the deadliest nightclub fire in decades, at least 13 people are dead. The nightclub was ordered to close in 2022 because it lacked a proper license. Firefighters have questioned if the club had an emergency exit.

The mayor says three of the victims have been identified through fingerprints. The rest will go through DNA testing, but it's unlikely any more bodies will be found.

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[08:21:08]

MATTINGLY: New developments in the Georgia election subversion case this morning. Former New York City Police Commissioner Bernie Kerik has been subpoenaed to testify. Kerik has been identified by CNN as one of the unindicted co-conspirators. This comes as prosecutors plan to prepare for trial in a matter of weeks.

I want to get straight to CNN's Paula Reid live in Washington with his first on CNN reporting.

Paula, what are you learning here?

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: Well, Phil, we've learned from Kerik's attorney, Tim Parlatore, that his client has been subpoenaed, ostensibly to testify in a trial that is expected to begin at the end of the month, but he is demanding that the District Attorney's Office grant his client immunity before he would let him testify.

As you just noted, Kerik is one of the unindicted co-conspirators in this case. He is not named in the indictment, but CNN, through our reporting, we have identified him as co-conspirator number five.

And this shows, the subpoena shows the prosecutors are clearly trying to secure the cooperation, the testimony of someone that could help reveal some important details about exactly what Trump allies like Rudy Giuliani were up to in and around the election, but this also shows the challenges that they are going to face.

If someone is an unindicted co-conspirator, very few defense attorneys are going to let their client just take the stand to do anything other than plead the fifth, invoke their fifth amendment right, unless they have some type of assurances that they will not be charged.

Now in a letter this morning to the district attorney's office, Tim Parlatore says that the District Attorney's Office told him: "If we wanted to indict Mr. Kerik, we would have already done so." But so far they have refused to put anything in writing.

We reached out to the Fulton County district attorney's office this morning. They have not responded.

HARLOW: So Bernie Kerik, Paula, and thank you for this reporting, it is really interesting -- already cooperated with the special counsel's investigation. So I just wonder how is this time different?

REID: So there's a little bit of overlap, but these are two really different cases when it comes to Mr. Kerik. With the special counsel's investigation, he and his attorney sat down for an interview with investigators working for Jack Smith in their investigation into January 6 and efforts to subvert the election, but he is not an unindicted co-conspirator in this case.

That also appears to be a much more narrow case. Of course, former President Trump the only one to be charged as of now, his lawyer says ahead of that interview, he received a standard proffer letter, got the regular assurances, but it's quite a different situation down at Fulton County where they have listed him in that broad indictment.

So I think any good defense attorney is going to ask for some sort of assurances before letting their client take the stand. But right now, Parlatore says, look, if down in Fulton County, you don't give us these assurances, he is going to take the stand and he's going to invoke the Fifth Amendment to every single question you ask him.

HARLOW: Paula Reid, thank you for the reporting this morning.

MATTINGLY: California Governor Gavin Newsom moved quickly to replace the late Senator Dianne Feinstein, we're going to break down a historic appointment, next.

HARLOW: Also, a pro-Russian politician has secured enough votes to become the next prime minister of Slovakia posing a challenge to NATO and European Union unity.

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[08:28:02]

MATTINGLY: This morning, California Governor Gavin Newsom is set to appoint EMILYs List president, Laphonza Butler to fill the late Dianne Feinstein's Senate seat.

If Butler is sworn in, she will become the third Black female senator in US history and the first openly LGBTQ senator to represent the state of California.

CNN's Kyung Lah joins us from Los Angeles.

Now, Kyung, what has the reaction been? This happened very quickly and I think, surprised some people.

KYUNG LAH, CNN SENIOR NATIONAL CORRESPONDENT: Certainly, some Democrats here in California, it took them really aback and if you think about it, though, when they take a beat and they think about this choice, it does make sense politically, but Butler is not currently holding an elected position.

She is somebody who is a formidable political figure, especially in the state of California.

Nationally, she is known for leading EMILYs List, but here in California she is known as a very strong operative. She did lead as a senior adviser of Kamala Harris' a presidential run in 2020 and she also led a labor union, the most powerful labor union in the state of California. So she is deeply regarded.

She is also an ally of Governor Gavin Newsom.

Now, her selection as you point out, Phil is fulfilling a promise that Governor Newsom made that when Kamala Harris vacated her Senate seat to become Joe Biden's vice president, that he would appoint a Black woman, and she will be the only Black woman serving in the US Senate. She also does certainly embark on that historical journey, being the first open lesbian to serve in the Senate.

But all of this, Phil, does scramble this election. The Senate seat is up for grabs next year. There are already three powerful California Democrats running -- Adam Schiff, Katie Porter, as well as Barbara Lee.

So whether or not Laphonza Butler decides to jump in and maintain and run as a candidate after holding this seat for a year, that is going to be the open question.

I am told that there were no preconditions and her taking this appointment, so it's going to get very crowded and very interesting -- Phil.

MATTINGLY: Yes, not a caretaker. It's going to be fascinating. This is already a very intense race.

Kyung Lah, thank you.

LAH: You bet.

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