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CNN This Morning

Milley Comments on Loyalty; Microsoft CEO Testifies Against Google; David Schoen is Interviewed about the Trump Fraud Trial; Illinois Governor and Chicago Mayor Ask for Help with Migrants. Aired 6:30-7a ET

Aired October 03, 2023 - 06:30   ET

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

[06:30:00]

PHIL MATTINGLY, CNN ANCHOR: An interview with NBC News. I want to play some sound from that.

(BEGIN VIDEO CLIP)

GEN. MARK MILLEY, FORMER CHAIRMAN, JOINT CHIEFS OF STAFF: Everyone's entitled to their opinion. And I've served my country faithfully for four and a half consecutive decades, in peace and war. And my family has made enormous sacrifices for this country, and my mother and father before me, and - and grandparents before them. So, I'll take a backseat to no one on loyalty to this country. And my loyalty is to the Constitution.

(END VIDEO CLIP)

MATTINGLY: His public comments, which I think are very reflective of what most people knew where he was privately over the course of the last several years, what do you make of them?

KAILEY LEINZ, WASHINGTON CORRESPONDENT, "BLOOMBERG": Well, it's interesting because that, in many ways, is kind of a different iteration of what he said in that retirement speech, when he talked about how the loyalty needed to be to the Constitution and not an unnamed dictator, which we understand to be former President Trump.

But it also comes in response to really outright attacks from the former president to the general, saying that he committed treasonous actions, suggesting that that would have been something punishable by death. It is bringing it kind of a partisan tilt to the military that really historically has not been there. The idea that the military is supposed to be beholden to whatever leader/party is in charge. That's not usually how things work in the United States.

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: No, and yet it's -- the fact it needs to be reminded speaks to the tenor of our times.

Look, country over party is Constitution over party. That's not a partisan stand, although it may feel that way. I was listening to those comments and I was also struck by our colleague Jake Tapper's confirmation -- POPPY HARLOW, CNN ANCHOR: I was just going to say -

AVLON: Yes.

HARLOW: Milley saying this out loud. Kelly, the former chief of staff, confirming that to Jake at the same time.

AVLON: It's a very big deal. And, again, just to reiterate, he confirmed reports that not only had Trump repeatedly disparaged wounded warriors and people who died in the service to their country, but one of the things he said is, he described Trump as a person that has nothing but contempt for our democratic institutions, our Constitution and our -- the rule of law. That's Trump's former chief of staff, General John Kelly.

HARLOW: Longest serving Trump chief of staff.

AVLON: Yes. So, you know, this is not a partisan critique of Donald Trump. These are people who worked with him and know him well warning about Donald Trump to Republicans today.

HARLOW: Thank you both.

MATTINGLY: Thanks, guys.

HARLOW: Great to have you. Come back.

MATTINGLY: Yes, (INAUDIBLE).

LEINZ: I will. Thank you.

HARLOW: You're always on call (ph).

So, this is really fascinating. The head of Microsoft, the CEO of Microsoft, takes the stand in this very high-stakes anti-trust trial against Google and warns of a, quote, "nightmare scenario" if Google's dominance over online search is allowed to continue. More on that ahead.

MATTINGLY: And after a five-month hiatus because of the Hollywood writer's strike, late night is back.

(BEGIN VIDEO CLIP)

JIMMY KIMMEL, HOST, "JIMMY KIMMEL LIVE": In case you've forgotten, my name is Jimmy. I've been off the air for five months. We've been gone so long -- we've been gone so long "The Bachelor" is now a grandfather.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[06:36:21]

HARLOW: So, the head of Microsoft warning of a nightmare scenario for the internet, for users, if Google's dominance over online search is allowed to continue. He took the stand, testifying Monday in the U.S. government's sweeping anti-trust lawsuit against the web giant. Microsoft's CEO Satya Nadella said, quote, "you get up in the morning, you brush your teeth, your search on Google. Everybody talks about the open web, but there is really only the Google web."

He also warned of the rise of AI in online search, saying that it could comment Google's dominance in the industry, saying, quote, "I worry a lot, even in spite of my enthusiasm, that there is a new angle with AI. I worry a lot that this vicious cycle I'm trapped in can become even more vicious."

Nadella is the most senior tech executive to take the stand during trial, which is focused on the power of Google as the default search engine on many phones and browsers around the world. We did reach out to Google to comment on Satya Nadella's testimony. They did not have a comment.

Joining us now, senior media analyst Sara Fischer.

Good morning.

SARA FISCHER, CNN SENIOR MEDIA ANALYST: Good morning.

HARLOW: Two things. Obviously, Satya Nadella runs a huge competitor to Google. I just want to put that out there. And it's just notable that Microsoft is the one that faced all of this anti-trust scrutiny from the DOJ back when that was the biggest case -- anti-trust case of this kind before now. What do you make of what he said and what it will mean for this suit?

FISCHER: The big takeaway, Poppy, is that at the time that Microsoft was facing a lawsuit from the DOJ all those years ago, the ecosystem was very different. We were primarily using desktop to access search browsers. In the mobile ecosystem, Satya Nadella is arguing that these partnerships that Google has with vendors like Apple, to make sure that it's the default search engine, make it very difficult for another competitor to breakthrough. And as a result, he argues, that Google is able to collect an unprecedented level of data over its competitors, like Microsoft, that it will be use -- able to use to train its AI algorithms. Essentially he's saying, Poppy, if you don't address this anti-trust problem now, it's only going to get worse later in the AI era.

MATTINGLY: Sara, you mentioned AI. I want to shift just a little bit because apparently Tom Hanks is not doing advertisements for a dental care company, which I guess makes sense, but he had to post this on Instagram basically saying, AI had replicated him.

This has been a huge issue in the strikes, and the negotiations between the writers and the actors. So, obviously, this is a huge issue throughout tech. What can be done to prevent stuff like this? Why isn't there something in place already?

FISCHER: It's a great question, Phil. Mostly it's a technology problem at this point. We actually do have a regulatory body that's responsible for what we call false commercialization, or a company that is portending to be something that it's not or using falsehoods to market its products. This is a big problem, by the way, with things like diet and weight loss pills.

The problem is, the FTC is not fully equipped to be able to tackle every single AI-generated ad and image. Now the tech platforms have gotten pretty good if you think about Meta, Google, identifying when somebody is using AI to doctor a famous person.

Where it's going to become more challenging, Phil, is when regular, everyday people, who upload their own photos to social media, have their own videos and photos be used to doctor AI. You know, we don't have extensive levels of lawyers and the reach of social media to debunk this stuff. That's where I think the real concern is.

HARLOW: We couldn't let you go without playing a little bit of late night from last night.

Here it is.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, "THE LATE SHOW WITH STEPHEN COLBERT": It feels good to be back. It feels good to be with all of you again here in the Ed Sullivan Theater because after the first few months of the strike, Evy (ph) refused to keep chanting my name.

[06:40:04]

JIMMY FALLON, HOST, "THE TONIGHT SHOW STARRING JIMMY FALLON": I'm more - I'm more excited than a Jets fan during the first three plays of the season. You go, you got to be kidding me!

SETH MEYERS, HOST, "LATE NIGHT WITH SETH MEYERS: I missed my writers so much. I was so happy -- so happy to see them this morning. I will admit, by lunch I was a little over it.

(END VIDEO CLIP)

HARLOW: So, they're back.

FISCHER: They're back. And I think so many people are happy to see them. The next thing, of course, though, Poppy, is we're waiting for our scripted series to be back. And that's going to come when we get a deal between the Hollywood studios and the actors. They're resuming negotiations today. And hopefully we get those shows back soon.

HARLOW: OK.

Sara, thank you so much for the reporting on all three of those fronts.

FISCHER: Thank you.

HARLOW: Well, the governor of Illinois and mayor of Chicago, both Democrats, confronting the White House on its handling of the migrant crisis. Why they say the administration's response has been, quote, "untenable."

MATTINGLY: And former President Trump says he will be back in court today. Trump's defense lawyer from his second impeachment trial joins us next.

Stay with us.

(COMMERCIAL BREAK)

[06:45:13]

HARLOW: So, former President Trump says he'll be back in court today after spending the first day of his $250 million civil fraud trial really going after the judge and New York's attorney general.

Listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, FORMER U.S. PRESIDENT: We have a rogue judge who ruled that properties are worth a tiny fraction, 1/100th, a tiny fraction of what they actually are.

We have a racist attorney general who is a horror show who ran on the basis that she was going to get Trump before she even knew anything about me.

(END VIDEO CLIP)

HARLOW: Attorney General Latitia James accuses Trump of inflating the value of his assets in order to get better terms for insurance and bank loans. The judge has already determined that Trump is liable for fraud and is now set to determine punishments and financial penalties. The AG is also trying to prove six additional claims that prosecutors have brought, including falsifying business records and insurance fraud.

Yesterday, this was interesting, in court, the prosecutors played testimony from Trump's former lawyer, Michael Cohen, explaining how he and others inflated Trump's assets to match the former president's wishes, according to him.

Listen.

(BEGIN VIDEO CLIP)

MICHAEL COHEN, FORMER TRUMP LAWYER: So, Mr. Trump would call Allen and I into the office. And let's say it said he was worth $6 billion. Well, he wanted to be higher on the Forbes' list. And he then said, I'm actually not worth $6 billion, I'm worth $7 billion. In fact, I think it's actually now worth $8 billion with everything that's going on. Allan and I were tasked with taking the assets, increasing each of those asset classes in order to accommodate that $8 billion number.

(END VIDEO CLIP)

HARLOW: Joining us now Trump's defense lawyer during his second impeachment trial, David Schoen.

David, it's always good to have you on these fascinating, legal cases.

Let me start with the valuation question because that's really the crux here of - of the - of the argument and - and the attorney general's case.

One of Trump's attorneys, Alina Habba, said this in court. Quote, "the value is what someone is willing to pay. The Trump properties are Mona Lisa properties. This is not fraud, that is real estate."

What is your response to that?

DAVID SCHOEN, TRUMP'S DEFENSE LAWYER DURING SECOND IMPEACHMENT TRIAL: Well, I think her point is that in real estate, you know, valuations do depend on, you know, ready, willing and able buyer. And often real estate values are inflated based on, for example, in this case, I think what she's saying is, the brand, the Trump brand, or the uniqueness of the properties, that sort of thing.

HARLOW: But by 25 times?

SCHOEN: I think that you're going to see in this case experts testifying and to that effect, frankly. You know, President Trump's example is that Mar-a-Lago, which he says the judge said was valued at $18 million, and he think that that's really just a fraction of it. I think most people would say certainly the $18 million is only a fraction of what that property is worth, but there's a dispute as to whether the judge really said that or not.

HARLOW: Yes, I think, look, Trump valued it at over $400 million. Alina Habba said at one point yesterday a billion. So, the question is, at how many times is it believable.

What's interesting to me is that you also have a real argument now about whether this could have been a jury trial. This is a judge deciding it. It's a bench trial. Here is Trump's attorney, Alina Habba, trying to explain her position on this, and then I want your legal take.

Here she is.

(BEGIN VIDEO CLIP)

ALINA HABBA, TRUMP LAWYER: I have to address this one common misconception in the press. And, unfortunately, it just keeps getting repeated, which is that we had this great option to have a box checked for a jury. No, we didn't have that. That's not how this works. They brought it under Section 6312, which is a very narrow, not appropriately used section of the law which is for consumer protections, not this. And that is why we're sitting here in front of a judge.

(END VIDEO CLIP)

HARLOW: But isn't she missing the point that when you look at civil practice law and rules, Section 4102, it says that a defendant has to request a jury trial within 15 days of the complaint? Was this a mistake, an error, by Trump's legal team?

SCHOEN: It's a very interesting issue. The judge yesterday apparently said that there's no jury trial because no one asked him for one. So, they're both sort of right.

I personally -- if you're asking my personal, professional opinion, would have filed a demand for a jury - a jury trial under Section 4102. However, there is a case from 2011, People versus First American Corporation, in which a judge from this same court said there is no right to a jury trial under New York Executive Law 6312, the action - the section under which this is brought, because they said the remedies are generally equitable, not money damages. And, historically, there hasn't been a right to a jury trial for equitable damages. That is taking away the business license and that sort of thing.

[06:50:03]

But I would have filed a jury demand to litigate the issue because here there are very severe monetary punishments at issue potentially. And I think there's a strong argument to be made for the right to a jury trial.

HARLOW: As I understand it, you've been in touch with Trump's legal team. It seems like, at the end of the day yesterday, they may have had something of a boon in terms of testimony from a witness about documents from 2011 when nothing prior to 2014 is germane to this case. What are they telling you they think their strongest point is right now?

SCHOEN: Well, I haven't actually been in touch with Trump's legal team. Someone, let's say, more centered to the discussion than that.

HARLOW: Trump?

SCHOEN: But without going into any --

HARLOW: David?

SCHOEN: Well, without going into any --

HARLOW: David?

SCHOEN: Yes. Yes.

HARLOW: Trump?

SCHOEN: Listen, I - I have a close relationship with former President Trump. So, I certainly have spoken with him. But I wouldn't go into any details of any discussions that I've had with him.

I would say this, though, the response to what happened yesterday, I think, by the legal team is that, you know, they were heartened that the judge recognized the court of appeals -- the appellate division's decision that the issues in this case are limited to events that happened after July 2014 as to those who signed a so-called tolling agreement. You know, Ivanka got out of the case because she wasn't a party to that agreement.

But - so -- and they heard testimony yesterday from 2011. And so the judge made the comment that he hopes that the prosecution -- or the attorney general will tie that into the events that happened after 2014.

HARLOW: Yes. Interesting. Which the - which the prosecutors may do today in court as they continue.

I do want to play -- some of the criticism from Trump himself has been particularly on comments made by the New York Attorney General Latitia James while she was running. Here are a few things she said then in 2018 about Trump.

(BEGIN VIDEO CLIP)

LETITIA JAMES, NEW YORK ATTORNEY GENERAL (September 12, 2018): I will never be afraid to challenge this illegitimate president.

He should be charged with obstructing justice.

I believe that the president of these United States can be indicted for criminal offenses.

I will be shining a bright light into every dark corner of his real estate dealings and - and every dealing, demanding truthfulness at every turn.

(END VIDEO CLIP)

HARLOW: Would those comments have any legal basis for a dismissal here?

SCHOEN: I don't know about a dismissal. I'm very, very troubled by them. I think they're completely unethical. I think it's - I actually have spoken with a fellow who's written a book on prosecutorial misconduct and he's assured me he's going to include a chapter next time on the kinds of statements that are appropriate ethically and inappropriate ethically in the course of an election campaign for elected officials, for judge and prosecutors.

I think they're very troubling comments. We -- the government is held to a different standard. And the public generally believes that when they say something that it's accurate. We can't have people targeting particular citizens when they're running for office, especially when there's been no investigation and certainly no finding yet at that time of any culpability. I think they're very troubling.

This is part of what I think is driving the polls, in addition to policy issues. I think that fundamentally the American people demand fairness and they don't want to see people targeted, even if they're, you know, sort of larger than life figures like Donald Trump.

So, yes, I think it's troubling.

HARLOW: David, thank you very much. I'm sure we'll have much more to talk about after the day in court. And if you speak with the former president, do come back and join us. We appreciate it.

Thank you, David. Thank you.

Phil.

MATTINGLY: Yes, I think he speaks with the former president.

A CNN exclusive, John Kelly going on the record to confirm several disturbing stories about his former boss, Donald Trump. Jake Tapper joins us with that reporting ahead.

HARLOW: And in a political twist, Kevin McCarthy's future as House speaker may lie in the hands of Democrats.

(COMMERCIAL BREAK)

[06:58:15]

MATTINGLY: The governor of Illinois and the mayor of Chicago, both Democrats, are confronting the White House on its handling of the migrant crisis, laying out their concerns and demanding the administration take action. Governor J.B. Pritzker is asking President Biden to name a czar to manage the ongoing crisis. It comes from reporting from CNN's senior reporter Isaac Dovere, who joins us now.

I'm fascinated by this story because this is the type of stuff typically supporters like Pritzker don't want in the public sphere, but the governor calling the situation untenable.

What else are you learning about these conversations?

ISAAC DOVERE, CNN SENIOR REPORTER: Yes, that's right, Phil.

Look, what we know is it's not just those pictures of the border of people coming over, it's where they going. The situation in New York has gotten a lot of headlines, but in Chicago they're at already 15,000 migrants that are there and they're expecting that that number could within weeks jump to 30,000 migrants. Some intelligence that they feel like they've gathered that says that Texas Governor Greg Abbott seems like he'll be sending even more buses of migrants to Chicago. There are already up to 3,000 people sleeping on the floors of police stations in Chicago and at the airport there.

And what they're looking at is saying to the White House in a combative phone call that happened on Sunday night and in a letter that Governor Pritzker sent to the president on Monday saying they need more help. And they're asking, as you said, for some kind of coordinated response to be the person in the federal government - or have the federal government be the actor who is deciding where these migrants go, not just leaving it up to the governor of Texas or NGOs or other people sent around and asking for more help with the money to pay for it. HARLOW: It's so interesting, Isaac -- this is great reporting, by the

way - but to see this out of Chicago and Illinois, to - to -- following what the mayor of New York has been saying for a long time now.

[07:00:00]

But a growing call from Democrats, key Democrats in key states, for this White House.

Isaac, thanks very much.

DOVERE: Thank you.

HARLOW: All right, CNN THIS MORNING continues right now.