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House Ways And Means Committee Releases Report On Trump's Taxes; Biden Administration Asks SCOTUS To Allow Trump-Era Policy Restricting Migrants To End; New GOP Congressman Doctored His Resume; FBI And DOJ Warns Parents Of "Sextortion.". Aired 10-11p ET

Aired December 20, 2022 - 22:00   ET

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

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[22:00:00]

LAURA COATES, CNN ANCHOR: So, we have a major development tonight. We're getting new information on Trump's tax returns. And our team has been combing through this report that the House Ways and Means Committee voted to release tonight.

I want to get right to Democratic Congressman Dan Kildee of Michigan. He's on the House Ways and Means Committee has taken the time to join us this evening. Congressman, thank you for being here.

Now, you have seen these tax returns. And I'm wondering what did you learn given the fact that part of it we've seen some portions of his tax information, you've got the cases in New York, you've got the 2020 New York Times expose piece, what were the key takeaways from this actual return?

REP. DAN KILDEE (D-MI): There're two things. One is the extent to which the former President Trump used the tax code to his benefit. Now, you know, that could be very legal. I'm not sure that we can come to any conclusions about the legality.

There are questions that are unanswered. There are a lot of claims that lack documentation, use of charitable contributions or charitable donations, loans to family members that need to be examined. There is a whole lot there. And it's really interesting to see the extent to which the president, then-president, was able to avoid what most of us would think would be his fair share of taxes. He's a very wealthy individual.

But the real point of this, and the other real surprise to me, if there was a surprise, is that this mandatory audit program that we're aware of at the IRS that goes back to the Nixon era was dormant during the Trump years. It wasn't even until April of 2019 when the chairman of our committee, Richard Neal, sent the letter to the IRS, to the Treasury Department, asking for these returns under Section 6103 of the tax code.

It wasn't all that very day that the first of these returns were flagged for audit. They had simply failed to do that at all. And they never completed any of the so-called mandatory audit of the president of the United States during President Trump's term of office, during his tenure as president. The mandatory reporting, or mandatory auditing requirements under the IRS code book, under their internal rules was completely avoided.

COATES: I find that stunning to think that that could have been the case. And just the idea -- and, again, you talk about some of the criticism of the why now and the idea, well, is there really a legitimate legislative purpose here? There were the statements by some Republicans that this was all pre-textual, that hold on, a lame duck Congress is suddenly wanting these, which is not true, it's been years in the making, number one.

But the idea you described sounds to me like there might be a legitimate legislative hook to say, was a law actually followed? Did the process actually take place? What do you say to those who look at this though and say this is, come on, you can't do anything about this at the end of a Democratic-run House Ways and Means Committee. What is the point of this? What do you say?

KILDEE: Well, first of all, we initiated this in 2019 with the intention of determining whether we needed to take up legislation to address what seemed to be a weakness in the audits of presidents. I mean, the president kept talking about his returns being under audit. He failed to release his returns, as every president since Nixon had done. So, a big question mark hung over this. But we needed to get the facts. And so we asked for the facts to determine whether the IRS was properly enforcing the law on the president of the United States.

The reason it took so long was because of Donald Trump, because of those who support him, many of the same Republicans now crying foul supported his effort to sue us, to delay, delay, delay until finally the Supreme Court of the United States, just a few weeks ago, said, no, the Ways and Means Committee is correct. These documents should be delivered to them.

And so we've had just a couple of weeks to examine the information, come to the conclusion that, yes, legislation is warranted, craft that legislation, and now hopefully move that to the floor of the house representatives, whether our Republican allies agree that we should have this legislation or not is something that remains to be seen. They have said that they would support it without looking at the documents that make the argument for it.

It's really important to point out. There is no more compelling argument than two important facts, one, the fact that these audits were not conducted when President Trump was in office.

COATES: Which is mandatory.

KILDEE: Mandatory, under IRS rules. Not by a law, but under IRS practice. That's one piece of it.

The other really important piece is to look at that in the context of an examination of the returns themselves. Those returns raise all sorts of red flags. [22:05:00]

And we think, in order for Congress to add and the American public to judge our actions, we have to be able to look at both of those facts. And that's why we felt it was important to release the information.

COATES: Well, that first fact, the idea of it being IRS rules, not under law, that to me says that there is a huge gap between what ought to be the case and what could be legislated. So, the goal would ultimately be, I'm assuming, to legislate away so that it is mandatory under the law. Would that be only for an incumbent president, but for a candidate as well?

KILDEE: Our legislation would apply to the president of the United States. We do have other legislation that we considered as part of our HR1, our political reform that Democrats have advanced, that would require candidates, major candidates for president of the United States to release their returns. But this is specific to the president of the United States, an individual was incredible and unique power to influence policy, the economy of the nation, their own personal financial well-being. And so we feel like there's a special standard that ought to apply to a person with that much unchecked power.

Yes, speaking of special, of course, the former president thinks he is especially picked on as opposed to prior presidents. There have been claims that the Congress is weaponizing his personal information, trying to have a punitive measure over him, that this curiosity of whether the IRS completed these mandatory audit seems to just have a spotlight on him. Is there a truth to that, that this is something that was only looked at because it was Trump, or not?

KILDEE: No, I mean -- but Trump is a unique individual in the presidency, a person with hundreds of different corporate identities that he can hide behind, move money in between. And so it is a unique set of circumstances, for sure. But President Trump could have answered one of these two questions if he had simply done what he would said he would do, and that is he himself releases the tax returns.

Remember, going all the way back to 2015, he kept saying over and over again hill release his returns. And we've been waiting all this time. We still would've had to seek under section 60103 of the tax code information about whether the IRS is properly auditing those returns. But he could've resolved the big question that the Republicans seem to have such a big difficulty with, and that is the release of the tax returns themselves.

He promised to do it. We need that information now because the questions that have arisen around whether or not the IRS did its job. I don't think they did. This is much an indictment of the IRS as it is anybody. But Donald Trump can't have it both ways. He can insist that he's going to release the returns, promised transparency, and then gripe when for a legitimate legislative purpose, we decide to do that ourselves.

COATES: And, Congressman, on the screen right now, there is a statement released by a spokesperson for Trump talking about this unprecedented leak, they're calling it, by lame duck Democrats, is proof they're playing a political game, they're losing. If this injustice can happen to President Trump, it can happen to all Americans without cause.

Congressman, on that point, we've heard more than once, right, this idea of former president saying they're only going to me to try to get you. It's really you all, the American public, they're trying to get to. Is there a harmful precedent that could be set by looking at a president's tax returns that could somehow trickle down to the average American in a way that should cause concern?

KILDEE: I think we're going to set one precedent or another. I worry more about the precedent that says we have suspicion that there's something wrong going on. The IRS is not doing its job enforcing the tax laws on the president of the United States. The president's returns are complex and raise a lot of questions. The precedent that I want to avoid is Congress saying, to add, he's the president. There is one set of rules for people like him and another set of rules for the hundreds of thousands of Americans who, for no other reason than getting a child tax credit, are facing an audit by the IRS. That is a precedent we don't -- we don't want to enforce and reinforce this precedent that the people the very top of the economy have their own special set of rules. Donald Trump has operated as if he was exempt from law for a long time. Finally, he's being held to account.

COATES: The top of the economy or the top of an administration as well. Congressman, thank you so much. And please get home safely to Michigan. It's going to be cold. I saw the reports. And nice talking to you. Thank you.

I want to turn now to CNN Chief Congressional Correspondent Manu Raju, and someone who's been reporting on Donald Trump's finances for not years, but decades, everyone, David Cay Johnston is here. He's a lecturer at Syracuse Law School.

Manu, let me begin with you for a moment here, because you have been going through this report. And I understand Speaker Pelosi has been going through the report. What did she say?

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Yes. She actually indicated that they actually planned to move on legislation in response to this report, in response to this investigation by the Ways and Means Committee that found that that mandatory presidential audit program under the IRS had not moved forward.

[22:10:09]

And in the words of the committee, it was, quote, dormant during the presidential years during Donald Trump and didn't act until 2019 when the chairman of the House Ways and Means Committee, Richard Neal, sent a letter in April that year to the IRS asking for tax returns. That spawned the audit, they say. That should've been done when Donald Trump was becoming president in 2017 but it was not done.

And as a result, Nancy Pelosi, in her final days in power here, is indicating they will move forward likely this week on legislation. She says in a statement the Ways and Means Committee report makes clear the legislative steps that must now be taken to guard the public trust. And we will move swiftly to advance Chairman Richard Neal legislation requiring the internal revenue service to conducted annual audit of the president's finances.

So, expect that to come to the floor here, Laura, tomorrow, maybe the day after, but certainly by Friday, when the Democrats, their final days in power, plan to finish up business and the Republicans take control in January.

COATES: Manu, I mean, I do not envy you in terms of going through this report as well. There's a lot to be learned there. It's very dense material. What else are you learning from this actual report, aside from what Speaker Pelosi intends to do to codify some of the shortcomings we're talking about?

RAJU: Yes. There are two separate reports. There's one in the committee's investigation about that annual audit program, and which Congressman Kildee was discussing with you just now, where they found deficiencies in that program. They also showed that in 2018, the White House press secretary said that Donald Trump was under a mandatory audit. That is not true, according to this report.

Now, there's that separate report, the joint committee on taxation, which is essentially nonpartisan number crunchers that went through Donald Trump's tax returns from those taxes that had been requested over six years, as well as his business tax returns as well. They get into detail, analyzing the returns. They say they have no judgment about some of the deductions that he took.

But they also say that perhaps some of these issues could be looked at further, such as certain charitable deductions, other business deductions that he took, suggesting that they're not making an opinion either way or another but said it's something that could require further exploration. But there's a lot more to dig into as we look into these numbers on this report that just came out from the joint committee on taxation.

And then we get the actual returns themselves, Laura, which will go in much more detail about former President Trump's finances, and we should expect that number after some sense of information is redacted within a number of days.

COATES: The redactions will be very important.

David, I want to bring you in here. Because as we're learning, right, we've heard there should have been mandatory audits of at least 2017. But there is nothing performed by the IRS, under their own rules it seems, until the chairman of this committee started to ask for the information. And then, apparently, people got into gear on this. Why do you think he was not audited until the chairman of the House Ways and Means Committee raised the issue in 2019?

DAVID CAY JOHNSTON, LECTURER, SYRACUSE UNIVERSITY COLLEGE OF LAW: Well, Donald Trump thumbed his nose at the law all the time, including refusing to have his tax returns turned over to Congress, as required by a law that says they shall be turned over on request. And I would also point out that the IRS commissioner Donald appointed and who I've been very critical of is a Beverly Hills tax lawyer whose specialty is helping accuse of being tax cheats.

So, the six years of returns the committee received, with the approval on the Supreme Court, only one was put under audit, and that audit isn't done. But there's a lot of material here, Laura, raising questions about our tax system.

COATES: I mean, how long are audits supposed to take? And I want you to know, I am inviting one. I would just like to know how long are they supposed to.

JOHNSTON: Oh, audits can, in some cases, literally, especially complex corporate ones, go on for years as the people being audited resist producing the business records to back up what's on their tax returns. And we don't have that in these materials, including the ones that will be released in a few days. What we have is what Trump put on his tax returns, not the business records backing up.

Did he actually make the charitable contributions that he took on his return? Did he actually make the interest (INAUDIBLE)? Did he properly account for large gifts or loans to family members and others? You have to have the business records to note that.

COATES: So, I can see where you're going with this and I often joke around how America's favorite past time isn't really baseball, it's truly litigation. And it seems increasingly so, prosecution on these matters. And so if he didn't do the things you're talking, if the questions raised are actually resulting in criminal responses or criminal allegations, how common are tax crime convictions?

[22:15:08]

I mean, it sounds like there's a lot at stake.

JOHNSTON: Well, here, I hope that the people in the audience are sitting down. There are about 160 million individual tax returns filed each year. There are roughly 500 to 600 convictions. And most of those are drug dealers who don't report their income, politicians who accept bribes or business owners who bribe politicians. There is no serious effort in this country to pursue high-level tax cheating.

A D.C. report, the news organization I run, three years ago, we reported on the Koch papers, about third Koch brother, who had been under criminal investigation until his next door neighbor Donald Trump became president and showed how he was collecting more than $100 million a year through what was an obvious illegal scheme and nothing has happened. The investigation was shut down shortly after Trump became president.

We make no serious effort to find tax cheating by people at the top. But if you're a wagerer, we make sure you're absolutely fully taxed, there is almost nothing you can do to cheat.

COATES: At least two Americas it seems you describe just now.

Manu, I want to bring you in here. I wonder how Republicans are reacting tonight.

RAJU: Well, we're hearing a lot of Republican defense of Donald Trump, the members of the Ways and Means Committee, the GOP side, in fact, all came out to the cameras immediately after this vote and attacked the Democrats for moving forward on this thing. They said there's a different way to move ahead. They said this should have been guarded in secrecy, should have set to continued to be analyzed behind closed doors by the joint committee on taxation. They intended Democrats were weaponizing this all along.

And the spokesman person for former President Donald Trump said in a statement that this is a, quote, unprecedented leak by lame duck Democrats. He contended they're playing a political game here, they're losing. But it was the result of the legal battles for years that Donald Trump tried to keep these private, tried to keep these secret, did not want to release it. He lost that legal battle. Democrats now in their final days of power, using that power, releasing this information, and now plan to provide even more details of his returns in the days ahead. Laura?

Manu, David Cay Johnston, thank you so much, both of you, for this important insight tonight.

We've also got uncertainty at the border. The White House asking the Supreme Court to lift a pandemic era policy the Trump administration used to block migrants from entering the United States. Thousands of lives are hanging in the balance and they're waiting for a decision. We're going to El Paso after this.

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[22:20:00]

COATES: -- United States, the Biden administration just hours ago asking the justices to dropped one of the nation's most controversial immigration policies, Title 42. It's not clear, by the way, when the court will ultimately rule, even though they did give the deadline of 5:00 P.M. today for the Biden administration to respond to the request.

But right now, in Mexico, thousands wait just across the border. A chance at seeking asylum in the United States is but a few feet away. And the conditions many live in are unthinkable. The options are few and frankly dangerous.

Meanwhile, U.S. states from the border to the Big Apple are bracing. Shelters are already packed. Supplies are already running out. And the fear the already overwhelming flood of humanity appears poised to double.

The Biden administration told the court they know dropping a Trump-era policy known as Title 42 will lead to more migrants crossing the border illegally, and that's something the system simply can't handle. Our Ed Lavandera is in El Paso, Texas.

ED LAVANDERA, CNN SENIOR NATIONAL CORRESPONDENT: As the fate of Title 42 remains in legal limbo at the U.S. Supreme Court, officials here in El Paso say they are moving ahead as if Title 42 is going to be lifted and preparing for what they expect to be a massive surge of migrants at the U.S. southern border, especially here in El Paso. So, that means creating more shelter space and getting food and medical supplies into the region as quickly as possible.

But as the waiting game continues here in El Paso, what we've seen play out today is new levels of political gamesmanship. The day started off with Texas National Guard soldiers and Texas state troopers setting up a nearly mile long chain link fence covered in razor wire at the very point migrants have been crossing into the U.S. to turn themselves into border patrol agents.

The county judge here in El Paso described this as a political stunt by the Texas governor, and said it's a complete waste of resources. We asked the mayor, who had declared a state of emergency over the weekend, what he thought of the chain link fence. He says that the governor's office told him that this would be a three-hour training exercise. But now, the mayor says he wants to speak with the governor's office and the Department of Public Safety to understand why exactly this fence is needed.

El Paso officials expected that the National Guard here in El Paso would be working in more of a humanitarian role, not an immigration deterrent role, so, quite a bit of controversy surrounding that fence. And, essentially, we should also point out, it's simply not working. We have seen throughout the course of the day migrants simply just walking around the fence and then getting back over to the U.S. side. We've also seen migrants going through the chain-link fence. So, if it was supposed to work walking migrants from crossing into the U.S., that is just simply not working. Laura?

COATES: Ed Lavandera, thank you so much.

And, you know, as is often the case at the border, the job of law enforcement is inexorably linked with humanitarian needs. So, what's different here is that, at its core, you have a legal fight, one that is rather unique. Well, think about 19 Republican-led states demanding the court keep what is essentially a COVID lockdown in place.

[22:25:00]

Let's discuss now with Maria Cardona, David Urban and Josh Campbell, who are all with us today.

I'm going to begin with you, Josh, on this issue because we're talking about some of the conditions that are being faced by so many. I mean, the idea of the humanitarian needs, there is also the law enforcement angle and what needs to take place and the presence of law enforcement to try to moderate what's happening. Talk to me about this tension at play. JOSH CAMPBELL, CNN SECURITY CORRESPONDENT: That's one of the key issues and the reason why this is so difficult. You have a humanitarian crisis that is running head on into an enforcement crisis. Now, on the humanitarian side, obviously, you have thousands of migrants. Many of them have made treacherous journeys through South and Central America, working their way up to the U.S. border, many of them the victims of crime along the way. And once they reach the border, they're living in squalid conditions and very cold temperatures, so clearly a humanitarian crisis.

And on the flipside, literally, on the other side of the issue, on the border, you have an enforcement crisis. You have hundreds of law enforcement officers who are working grueling hours, who are strained. And the fact of the matter is whether or not Title 42 is actually rescinded or not, their world load will continue, whether they're expelling migrants or processing them.

And one thing is clear, and that is border patrol and immigration customs enforcement, they're not presently equipped, Laura, to actually deal with this issue. We know that border patrol has tried to plus up some of their staff, hiring contractors to take the load off some of the enforcement agents who were in the field. But just look at some of the recent numbers. I mean, in the Del Rio sector alone, they're in Texas, the number of migrant encounters recently doubled from 1,700 to 3,500.

So, we've seen some of those so-called decompression operations, where border control are trying to take migrants who are high capacity areas and move them to areas where there is more space, but a lot of work to be done there.

And finally, I'll point out, and, Laura, you know this so well, federal law enforcement officers are not policymakers. And so it is so perplexing to look at officials in Washington, the people who could actually solve this crisis, who continue to engage in gamesmanship and push this down the road. There are not actually bringing solutions to the table and action and sort of pointing out they're not the ones who are the key stakeholders there at the border, the migrants who are facing this humanitarian crisis and law enforcement officers who are trying to enforce the law.

COATES: Such an important point, Josh. And some more figures here. I mean, since Biden took office, human rights first is saying that it's identified more than 13,000 incidents of kidnapping, torture, rape or other violent attacks of people who have been blocked or expelled back to Mexico under Title 42. So, you have the law enforcement angle on the side the border and then what happens to people who are leaving as well.

Let me bring in David Urban and Maria Cardona to the conversation. Maria, you are nodding about the idea of this -- really, this chasm between what's happening on the border and the policy decisions and choices either being made or that are available.

MARIA CARDONA, CNN POLITICAL COMMENTATOR: It's heartbreaking, Laura. You know, I used to be communications director under what used to be the INS. And I saw this all the time. And what is heartbreaking about this is that there can be a fix. To Josh's point, the fix is not at the White House. The fix is in Congress. Congress is the only entity that can actually figure out what we need to do. And it's not rocket science. We have had bills in Congress with all of the pieces of legislation that need to be passed in order to put some kind of order at our border and figure out what is the proper flow.

We cannot continue this way. And we have a ton of legislators in Congress who talk about wanting a solution but then run and scream about the border of being in chaos, about the lack of border security, when, in fact it is in their hands to work with Democrats, and mostly Republicans are the ones who are screaming about that, Democrats have several bills that they would love to have Republicans help with in coming together to figure this out. But the problem is you can't do this as a one-off. And you hear Republicans say over and over again, we cannot look at anything having to do with citizenship or letting in additional legal migration until we have border security. That is a red flag right there because what does border security mean?

DAVID URBAN, CNN POLITICAL COMMENTATOR: Well, it means you have a secure border, Maria. It's pretty clear. You have to have some form of security at the border that people just can't walk across the border. You have to have a wall, a fence, something.

And so let me finish. You correctly point out. We do need to effectively address this in a holistic manner. They need to be comprehensive immigration reform. And both parties have kicked the can down the road, right? They've done it for a long time. Republicans have tried to kick it down, Democrats have kicked it down. This president hasn't even been to the border. The vice president hasn't been to the border. It's a crime what's going on. But you're not going to do it. We can't address any of this until you stem the flow.

This is like the drug question, do you affect demand or do you affect supply? If people know they can just simply walk across the street -- listen, if people know they can walk across the street, Maria, they're going to walk across the street.

[22:30:02]

CARDONA: But David, here's the thing.

URBAN: Yes.

CARDONA: What you are describing, your definition of border security then --

URBAN: Yes, sure.

CARDONA: -- is closing the border. Yes.

URBAN: That's exactly correct.

CARDONA: Because that is not -- well, you can't --

URBAN: We need -- CARDONA: -- you can't, OK.

URBAN: Why? Why can't?

CARDONA: What you're -- because what you're talking about is close. Do you know how many legal border points of entry there are? If you're talking about closing the border --

URBAN: I'm not talking about --

CARDONA: -- you are talking about closing legal commerce to our biggest trading partner.

(CROSSTALK)

URBAN: I'm not talking about -- no, no, no, no.

CARDONA: Our second biggest trading partner.

URBAN: I'm saying that --

(CROSSTALK)

CARDONA: Yes, you are.

URBAN: No.

CARDONA: But see, when you say that --

LAURA COATES, CNN HOST: What are you -- what are you saying?

URBAN: I'm saying you should not be able to wait across the water in El Paso, Texas.

CARDONA: When you say that --

(CROSSTALK)

URBAN: Wait, wait. Hold on. Hold on. You think you should be able to wait across the river in El Paso, Texas? Walk downtown and say, I'm here.

CARDONA: Well --

URBAN: Is that, say, yes, or no? It's a yes, or no?

CARDONA: Yes. Do you know why yes? Because that's legal.

URBAN: Then we have disagreement.

CARDONA: That's legal. That's legal. What they're doing is legal --

(CROSSTALK)

URBAN: How is that legal?

CARDONA: Because they're going through a legal port of entry and they're presenting themselves to border patrol.

URBAN: But they're not -- they're not going through legal port of entry right there.

CARDONA: That is immigration law.

URBAN: That's not legal.

CARDONA: That is immigration law.

URBAN: That's not a legal point of entry.

CARDONA: Yes, all -- most of those are legal.

(CROSSTALK)

URBAN: There's a facility --

COATES: Hold on, wait.

CARDONA: Excuse me, they're not legal.

COATES: Maria, Maria.

CARDONA: There is the fence.

COATES: We want to hear from both of you.

URBAN: Yes.

COATES: And what I'm hearing is to unpack if the audience can hear both of your perspectives. The idea that you're suggest -- you were suggesting to close the border and all a non-legal of entry.

URBAN: Absolutely. Absolutely.

COATES: You're saying to close the border broadly would be -- would be a crime given that you're supposed to have asylum, so tell me, is there compromise?

CARDONA: Absolutely.

URBAN: You can only seek asylum at a legal port of entry.

CARDONA: Yes. You know --

(CROSSTALK)

URBAN: You just can't walk across a non-legal.

CARDONA: Do you know --

COATES: Let me hear from Maria.

CARDONA: Do you know what the compromise is?

COATES: What is that?

CARDONA: The compromise is the bills that exist right now in Congress that Democrats have had ready, that frankly, President Biden has presented the very first day that he was in office, because you know what that helps do, David? It actually brings more resources to the border.

To your point, if you are going to keep every single person that wants to go to the border to find asylum or to present themselves, you're going to need a hell of a lot more border patrol.

URBAN: More than enough, let's do it.

CARDONA: And so, so then -- so then that's in the bill.

URBAN: How is it fair to --

(CROSSTALK)

CARDONA: Additional resources for border security is something that Democrats have always championed, but you know what else you need to do? You can't just close the border like you say, because you also have to deal with why these people want to come here. What is the legal flow that we should have? We are desperate for work. We need more workers.

URBAN: Maria, let me say some point.

CARDONA: And without that -- without both of those, David, you will never have a border.

URBAN: But that doesn't --

(CROSSTALK)

COATES: I'll give you -- I'll give you a last word to respond quickly, David.

URBAN: But listen, so folks in Africa and Europe in the far east who have these same problems, economic issues at home. They want to get to the United States and have a better life. They can't get on a plane in Nigeria, in Ukraine, and just simply fly to JFK and show up. You can't do it. That border is closed.

The border -- the southern border is not closed. We need to do something about it and delay it squarely at the feed of Republicans it's just not, not truly, it's not.

CARDONA: Both parties need to work together.

URBAN: There you go. There you go.

CARDONA: But Democrats have always been the ones that --

(CROSSTALK)

URBAN: I'm not quite sure.

CARDONA: -- are open to the real solution.

URBAN: We'll agree to disagree. We'll agree to disagree.

CARDONA: You know, Republicans have always used it as a political football, and that's just the reality.

COATES: This was an espresso and a cappuccino at 10.32 p.m. I'm here.

URBAN: We bring it. We bring it.

COATES: I'm here. No, I'm here for it. And it was a great conversation and what I took away was both parties need to work together.

CARDONA: You know what, David and I --

(CROSSTALK)

URBAN: We can fix it. We can fix even.

CARDONA: David and I can solve it, Laura.

COATES: Well, there was the scone added to the cappuccino and espresso. We'll wait for that next thing, everyone. Look, coming up next, a candidate seemingly fakes his resume and gets elected to Congress. How did that happen? We'll look into it, next.

[22:35:00]

(COMMERCIAL BREAK)

COATES: Well, incoming New York Republican Congressman George Santos is under fire tonight, frankly has been for the last two days. Why? Well, there was a review by the New York Times and CNN that revealed significant discrepancies in parts of his resume. Among those misrepresentations, well, claiming he got degrees at Baruch College and NYU. Yet both schools tell CNN their records don't reflect him ever attending either.

Santos also claiming he had stints at Citigroup and Goldman Sachs, but neither bank has records of his employment. Santos has not yet personally responded to the allegations.

However, his attorney putting out a statement writing, quote, "Santos represents the kind of progress that the left is so threatened by. A gay, Latino immigrant and Republican who won a Biden district an overwhelming fashion by showing everyday voters that there is a better option than the broken promises and failed policies of the Democratic Party." End quote.

Now some Democrats are demanding answers and even calling for investigations into the incoming freshman congressman.

I want to bring in New York State Democratic chair Jay Jacobs. Welcome to the show.

I have a lot of questions about this entire story. Of course, it really has been stunning to so many people. Jay, I wonder initially, one of the first thing that comes to mind, I mean, in just in your title of the New York State Democratic chair, many are wondering how did this escape in opposition research?

JAY JACOBS, NEW YORK DEMOCRATIC COMMITTEE CHAIR: Sure. Well, you know, I will tell you that there was a fairly comprehensive opposition research report done. The DCCC does those reports and as has been reported. And I will tell you that a good number of the, these inaccuracies were did come up in that report and the campaign tried very hard to get, media attention on some of these things, but because of the fact that I don't think anybody took the Santos campaign or George Santos himself as seriously as it turns out he is, it just wasn't covered. And there were a lot of other things going on in the media market in New York.

So, it isn't for a lack of effort on the part of the campaign to get some of this out. Now, of course, the New York Times report, which I read on Monday morning, and I was astounded by, I have to tell you, brought out quite a lot more detail. And of course, they've got a lot more resources.

[22:40:01]

But I will tell you that I think the focus really has to be on George Santos and on having him explain and tell everybody that voted for him exactly why it was that he wasn't honest about his resume.

COATES: It is important obviously, and you are right to think about him being the person who is rightly and squarely under the microscope. But I just want to be clear. Are you suggesting that you had some of the information before and it just wasn't reported in the media? Or that you're saying that most of us had not come to light and you were unaware through the opposition research. Which is it?

JACOBS: No, the campaign and the DCCC did the report, I personally didn't get the report. That's not what the state party does. Each campaign runs, you know, a more or less independent campaign as such. But I will tell you that they did have, and I spoke with Robert Zimmerman who was the candidate for the Democratic Party on Monday morning just after the story came out. And he explained that some of this in -- these inaccuracies were in that report --

COATES: OK.

JACOBS: -- and they did try to get them to the media. So, there was that attempt. And of course, you know, there was this general idea that he had a shady background as it related to his finances. So, those were things that we, or they were trying to push and get out. But again, the New York Times did uncover quite a bit more.

COATES: So real quick. What now? I mean, he's going to be -- he's going to be sworn into office in January. Will Republicans be able to do anything or the constituents in this particular jurisdiction district do anything about it?

JACOBS: Well, he happens to be my congressman. And I will tell you that constituents in my neighborhood aren't happy about it at all. But it really is up to the members of Congress. They have the exclusive right to decide whether (Inaudible) should be seated and when seated, if someone should be expelled.

And given that the Republicans are taking over in January, I don't have a great confidence that they're going to want to reduce their very slim majority by yet another member by expelling or not seating George Santos, particularly because he's already pledged his support for the speakership of Kevin McCarthy.

So, you know, I don't -- I don't see them taking action. What I will tell you is there were so many red flags in that bombshell report by the New York Times. I'd be really astonished if there wasn't some U.S. prosecutors somewhere taking a look at this. And, you know, particularly the campaign finance issues, which are really, really raising the eyebrows.

How he maintains with what seems to be, you know, a really weak background in finance. How he could have come up with $700,000 personally to lend to his own campaign, I don't know how that's possible, but people need to investigate that. I think that's his greatest vulnerability frankly.

He may be seated, but I think that, you know, he's going to have himself a lot of answering to do with the -- some U.S. attorney here, maybe in the eastern district that'll probably be taking a look at this and wanting to know exactly if those campaign finance reports were legitimate or not. Because campaign finance fraud is a major, major deal and they take that very seriously.

COATES: Well, we will see most immediately in the court of the electorate and the court, obviously, of Kevin McCarthy going forward.

Thank you so much.

JACOBS: Well, thanks for having me.

COATES: Well, speaking of courts of law, the Justice Department, they're out with a very important warning.

Do you guys know that thousands of kids are targeted and they have been in the past year with, quote, "sextortion." I'm going to explain what that is next.

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COATES: A very stark public safety alert from the Justice Department and the FBI that parents of teenage boys need to be aware of. Predators using social media platforms are targeting minors, mostly boys, tricking them into providing sexually explicit photos and then threatening to release those images unless some sort of a ransom is paid.

This is called sextortion. And officials say they at least 3,000 minors have already been targeted this year alone.

I want to bring in CNN national security analyst, Juliette Kayyem, and Josh Campbell is also back.

Josh, we don't often see the U.S. Justice Department and the FBI issuing a public safety alert. So, tell me what is the significance of this and how these scams work?

JOSH CAMPBELL, CNN SECURITY CORRESPONDENT: Yes. This is federal law enforcement telling parents out there to stop. Pay attention. This is important. They're seeing the skyrocketing in these online scams that are targeting kids. And in the scheme, as you mentioned, that's called sextortion. What we've seen in so many of these cases is you have a child that's online, on Facebook, on Instagram, on Snapchat.

They receive a message from someone who, and the typical case, pretends to be a young girl, engages in conversation over a period of time. Sometimes it's hours, sometimes it's days. They convinced this unsuspecting boy to send them some type of romantic photo telling them that I'll send one of you in return. Sometimes they actually use child pornography to send messages to other kids.

And once the victim actually submits that intimate photo of themselves, what typically happens is the scammer breaks cover and says, all right, you have now have to pay me Oftentimes thousands of dollars or I'm going to release this photo to the public, to your friends, to your family.

And sadly, what we've seen in so many of these cases is not just young people paying the ransom, but so many young boys out there in so many cases have been so distraught they've actually ended up taking their own lives, Laura.

COATES: It's unbelievable to think about. And Juliette, the DOJ says, generally, sextortion only ends when a child either tells an adult or the offender --

JULIETTE KAYYEM, CNN NATIONAL SECURITY ANALYST: Right.

COATES: -- is somehow identified by law enforcement. I mean, you're a parent. How do you talk to your kids about online --

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KAYYEM: Yes.

COATES: -- safety in a case like this, and what do you even tell them?

KAYYEM: You, I mean, you tell them if your kid is old enough to be online and understand what's going on, they're old enough to understand that this is very likely to happen. We tend to infantilize our kids in ways that are not good for them and not safe for them. It's better to be direct.

So, four things I would say, you know, identify that this is actually an issue. I -- we've been aware of it for a little bit, but especially for young boys, they need to know that this could be a trap. Whatever it is they're doing, you're not going to be able to control everything they do. But that they should be aware of it.

The second is that the extortionist, make clear the extortionist is the bad person. That whatever has happened or might be happening is the extortionist who's the bad person.

Three, and this is more generally talk to your kids in terms of danger, not right and wrong. Kids are not, teenage boys are not going to be receptive to right and wrong. They might be more receptive to danger in terms of this could be harmful to them if they do something that is stupid.

And then if, you know, if it does happen and you are, have that kind of relationship with your kids, make it clear to them that you're the safe haven. You know that you just are not going to judge this. This is what the -- these boys are committing suicide because they feel like they will be judged. And I think you -- parents have got to get that out of the dialogue that this is dangerous. Not right or wrong.

COATES: This is so important. There's this old saying of saying, you don't want your kids to think, no, I can't tell mom. She'll kill me.

KAYYEM: Yes.

COATES: You want them to think, I've got to call mom when things go up. Or dad.

KAYYEM: Yes, exactly.

COATES: Thank you, everyone.

KAYYEM: No judgment.

COATES: Because that's really important. No, thank -- thank you so much.

We'll put some resources up now. If you think you, or your child was a victim of a crime like this, you can go to tips.fbi.govtoreport. Report, report, report. We'll be right back.

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COATES: Nearly two years after the attack intended to overthrow our democracy, the book is now closing on the bipartisan investigation by Congress. Tomorrow, the January 6th committee will issue its final report. At the panel's final public meeting yesterday, it recommended that the Justice Department should charge the former president with at least four federal crimes.

Thanks for watching, everyone. Our coverage continues.

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