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Early Start with John Berman and Zoraida Sambolin

Justice Department Looking At Conduct Directly Related to Trump; Today: Fed Expected to Announce Interest Rate Hike; WNBA Star Brittney Griner Prepares to Testify At Sentencing Hearing; Biden to Speak with President Xi Ahead of Pelosi's Taiwan Visit. Aired 5-5:30a ET

Aired July 27, 2022 - 05:00   ET



CHRISTINE ROMANS, CNN ANCHOR: Here we go. It is Wednesday, July 27, 5:00 a.m. exactly here in New York. Thanks for getting an EARLY START with us. I'm Christine Romans. Welcome to our viewers in the United States and around the world.

We begin this morning with the Justice Department's most aggressive public moves yet in its criminal investigation of January 6. The source close to the investigation tells CNN two aides to former Vice President Mike Pence were questioned in front of a grand jury about the scheme to use fake electors to overturn the 2020 election. That includes the role of Trump lawyers John Eastman and Rudy Giuliani.

"Washington Post" and "New York Times" report that the prosecutors asked directly about former President Trump's involvement.

CNN's Daniella Diaz is on Capitol Hill for us bright and early this morning.

Daniella, this would be a big step asking insiders directly about Trump. What is the attorney general saying about this case?

DANIELLA DIAZ, CNN CORRESPONDENT: Well, the Justice Department will not comment directly on this grand jury testimony, Christine. But, look, Merrick Garland making it clear that no one is above the law. He said that they will not hesitate to prosecute former President Donald Trump if they find evidence in their investigation that he stood in the way criminally of that certification of the 2020 results of the election.

Look, he spoke to NBC last night in an interview where he commented on this. Take a listen to what he said, Christine.


MERRICK GARLAND, ATTORNEY GENERAL: Look, we pursue justice without fear or favor. We don't pay any attention to other issues with respect to that.

LESTER HOLT, NBC NEWS ANCHOR: So if Donald Trump were to become a candidate for president again, that would not change your schedule or how you move forward or don't move forward?

GARLAND: I'll say again, that we will hold accountable anyone who was criminally responsible for attempting to interfere with the transfer, legitimate lawful transfer of power from one administration to the next.


DIAZ: Christine, in the past if you remember, the investigation by the Justice Department has really focused on prosecuting those rioters that breached the Capitol on January 6. Now we're learning that they have expanded, of course now they are looking to other things such as election interference, looking into things like fake electors especially with this new reporting that we've learned about the grand jury testimony.

And, of course, as we learned as I noted that Marc Short, the former chief of staff of Mike Pence, and also Greg Jacob, who was the chief counsel of course appearing before the Justice Department, this grand jury, to talk about this sort of information.

But, look, Garland really specified last night in this interview that they will go where the evidence takes them. Of course again noting as I said earlier no one is above the law. But, of course, the other question is whether the January 6 committee is going to refer President Donald Trump for criminal referral forcing the hand of the Justice Department to weigh in on this issue, noting that the January 6 committee continues to investigate their own evidence of what happened on January of with additional hearings we know of that are coming in September and their final report.

So, really interesting that of course the Justice Department has their own investigation, the January of committee continues to work on their own as well -- Christine.

ROMANS: All right. Daniella Diaz, thank you so much for that.

Let's dig deeper here. I want to bring in former federal prosecutor Michael Zeldin.

So nice to see you. Looking at these developments and the reporting here, what is the significance of prosecutors pursuing the former president's involvement in the effort to overturn the 2020 election directly asking questions about the former president?

MICHAEL ZELDIN, FORMER FEDERAL PROSECUTOR: Well, they are trying to determine his criminal law liability. So we've thought all along that Trump would be part of a hub and spoke conspiracy where he is the center of a wheel and the spokes are Giuliani, Eastman and all the others who did his bidding. Now we have direct evidence of that.

ROMANS: What does it tell you about where the investigation stands? Is this just the department doing it due diligence or is it moving to some kind of a crescendo here?

[05:05:02] ZELDIN: Well, I don't know about crescendo just yet, but it is clearly a criminal law investigation of a conspiracy as Merrick said to obstruct an official proceeding and to conspire to defraud the United States.

What stage of the grand jury process we're in crescendo or somewhere in the middle, I don't know. But this is a criminal conspiracy investigation.

ROMANS: Criminal conspiracy, obstructing an official proceeding. What charges could potentially be brought?

ZELDIN: Well, I would think obstructing an official proceeding. What Merrick said is that anyone who would interfere with the orderly transfer of power. For me if you were prosecuting the case, obstruction and defrauding the United States would be the cleanest conspiracy charges.

I wouldn't want to move toward seditious conspiracy like we've seen against the Oath Keepers and the Proud Boys because I think that that is very much more complicated than they need to bring into this case. So I would focus on those two other crimes.

ROMANS: You know, and the attorney general, you know, he just wouldn't rule out that he would hold anyone who was criminally responsible for the events of January 6, including President Donald Trump the former president even if he were a candidate I wonder.

Is that easier said than done? I mean, just this is just so remarkable to be even having this conversation.

ZELDIN: That is true for sure. But I think again Merrick is correct to say what the evidence and what the facts will determine -- what are they, they will determine the outcome. And he is not going to be sort of pressured by Trump's political aspirations, he's going to make his decisions independent of them.

And so, people may think that that will interfere with Merrick's investigation, but they who say that don't know Merrick and don't know the criminal Justice Department.

ROMANS: All right. Michael Zeldin, we're so glad that you do and you are here to walk us through it. Thank you so much.

ZELDIN: My pleasure.

ROMANS: All right. Our other big story this morning, the cost of borrowing money in America about to go up, again. The Federal Reserve announcing another big rate like this afternoon, expected to be probably three quarters of a point. That means that higher mortgage rates, higher credit card interest, more expensive cars, student loans.

The Fed trying to cool off an economy that finished last year stronger than anytime since the Reagan administration before the economy shrank in the first quarter of 2022. The strong economy fueled by years of easy Fed policy and more recently COVID stimulus and the surge of post-COVID recovery, all of that has spawned uncomfortably high inflation. The fed is essentially slamming on the brakes to try to cool that inflation, but there is risks of slamming the brakes too hard or too late.


MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISOR, ALLIANTZ: We are not in a recession right now. Most economists would agree that the definition of a recession goes beyond the notion of two GDP -- two quarters of negative GDP growth. So we're not in a recession right now. Looking forward, the risk of recession is unfortunately high and mainly because the Federal Reserve is hiking interest rates aggressively into a slowing economy and it could push us into recession.


ROMANS: All right. With me now, Rachel Siegel, economics reporter covering the Fed for "The Washington Post." a big day for people like you and me and I think that it is important to remind people that this is something that really reverberates throughout the American economy. There is all this hammering about whether or we're in a recession.

I'm telling you, what's going to happen today is pretty much everyone is going to feel, right?

RACHEL SIEGEL, ECONOMICS REPORTER, THE WASHINGTON POST: That's exactly right. And on the flip side people are feeling the reasons that the Fed has to move so aggressively in the first place. The Fed is hiking rates at such an aggressive pace because inflation has gotten so out of control and people feel that in their daily lives too, they feel it when they are getting gas, when they are paying their rent check or getting groceries.

So in the same way that they feel the problems in the economy, they will also feel the fed's response as the Fed tries to slow down the economy and avoid even worse problems.

ROMANS: And you heard from Mohamed El-Erian, who is a very well- respected economist. And people like him have been saying, you know, look, they are too late. Now they are starting to raise interest rates into an already slowing economy. And they are kind of behind the curve here.

What kind of challenge does that bring for Fed policymakers who are trying to rein in inflation at a time where we're already seeing the economy start to cool off from last year's very strong pace?

SIEGEL: Well, the challenge is that the Fed cannot slow the economy with the kind of precision that would be ideal. The Fed has this very broad based tool which is interest rates and they can raise or lower them depending on what they are seeing in the economy but they can't pinpoint a super specific target or super specific pocket of the economy that needs to slow.

[05:10:05] And so we have this risk of an economy that either slows too much or slows too aggressively and we're still working at a time where the economy is really difficult to read. So many signs about the economy have only become clear with hindsight. And that is not helpful if you have to set policy now.

ROMANS: And it is important what you are saying about all of the conflicting signals in the economy. You've got housing market that is showing signs of topping out but still very strong. You have consumer balance sheets that are better today than they were before the last sort of big crisis, the financial crisis in 2008, 2009. I mean, there is just not a consensus I think about what we're going. It is almost like we're trying to reset our expectations for this economy after 2 1/2 years of just craziness.

SIEGEL: That is exactly right and in the same way that there was no playbook to guide the Fed or any other policymakers through the COVID recovery, there is no playbook for where the economy is going to emerge on the other side and that makes policy making even more difficult. If you don't know exactly where you are going, it is hard to make decisions now. And again so many of these things are only --

ROMANS: Some of the smartest people out here who have covered this for their careers are baffled by things happening in the American economy.

I think, Rachel, the bottom line for people if you got a lot of -- if you got a lot of debt, right, it's going to become more excessive, so you got to get your house in order because borrowing costs will keep rising as the Fed tries to tackle inflation.

Rachel Siegel, thank you so much. Nice to see you. You have a big day ahead, don't you?

SIEGEL: Thanks so much. Same to you.

ROMANS: All right. Coming up soon, we'll hear imprisoned basketball star Brittney Griner speak in a Russian courtroom.

Plus, President Biden's plan to talk it over with President Xi and two former running mates with two different visions of America.



ROMANS: All right. Just hours from now, Brittney Griner is expected to testify in a Russian courtroom. And she may be cross-examined as part of her sentencing hearing on a drug charge. She told the court that she unintentionally packed cannabis oil in her luggage while traveling through a Moscow airport.

CNN's Fred Pleitgen is tracking the trial for us.

What kind of questions could she be facing today, Fred? FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: A flurry

of questions could be happening and you're right, this is an extremely important trial week for Brittney Griner as she tries to get a very lenient sentence from that Russian court.

Now, as you've mentioned -- the lawyers for Brittney Griner have said that she will testify and so she will face questions from the judge and also possibly from the prosecutor as well. Her lawyers say it is up to her whether or not she wants to answer those questions.

But what we've seen so far as part of the defense's strategy is that they have been trying to play according to the rules of this Moscow court, and trying to get a lenient verdict for Brittney Griner. She has, of course, pleaded guilty for taking a controlled substance into Russia, with those vaping cartridges that apparently contained CBD oil, according to the Russian prosecutors. But they say it was due to medical purposes.

And yesterday they had a medical expert on saying this is quite common in the United States that you do have medical marijuana. He thinks essentially saying that she was essentially saying that she was using it for medical purposes and not the recreational purposes. And they have also had character witnesses showing that Brittney Griner is obviously an important figure for worldwide women's back basketball and basketball in general and also specifically has done a lot for the sport in Russia.

So, essentially, what the defense is trying to do saying yes, she made the mistakes but she should not be about it in jail for an intended period of time. Of course one thing that we have to point out is that the defense believes that it can make a pretty strong case but leniency is certainly not something that Russian courts are known for.

ROMANS: That is exactly right.

All right. Fred Pleitgen, keep us posted. Thank you.

The White House says President Biden will speak with the Chinese President Xi Jinping on Thursday. This as national security officials work behind the scenes to convince House Speaker Nancy Pelosi of the risks she is taking by planning a trip to Taiwan.

CNN's Selina Wang joins us live from our Beijing bureau.

Selina, how is this planned visit to by with an affecting relations between the U.S. and China?

SELINA WANG, CNN INTERNATIONAL CORRESPONDENT: Well, Christine, Beijing is furious over this and it certainly doesn't help relations between the U.S. and China that are already at the lowest point in decades.

Now, Beijing has threatened if Pelosi visits to Taiwan to take resolute and powerful actions. There is been recent U.S. congressional visits to Taiwan, but this is very different. If she goes Pelosi would be the highest ranking U.S. official to go to Taiwan since 1997. Beijing is strongly against any action, any behavior that seems to get more legitimacy to Taiwan as an independent entity or that makes the U.S. Taiwan relationship more formal and in their view this trip by Pelosi would do just that.

The timing here is also provocative, it is sensitive, we are just months away from a key political meeting when Xi Jinping is expected to seek an unprecedented third term. China's military is also celebrating its founding anniversary on August 1st.

So from Beijing's view, this is provoking China at a time when the country is trying to project strength and stability. That is why some experts expect this increases the likelihood that Beijing could take rash reaction in order not to appear weak. An official says that China could impose a no-fly zone.


But critical here, Christine, is that officially and publicly, we have not heard any elaboration on what this type of strong reaction from China could actually be. And some experts say that is by design.

This is just strong rhetoric, this uncertainty, the point of it is to try to deter Pelosi from going to get her to back out because Xi Jinping right now does not actually want to risk and is not ready to risk any military conflict, Christine.

ROMANS: All right. Selina Wang, breaking it all down for us -- thank you so much for that.

Russia pulling out of the international space station. So how come they didn't tell NASA first?

And next, Donald Trump, Mike Pence and a fork in the road for the GOP's future.



ROMANS: Democrats are ready to dump President Biden for another candidate in 2024. A new CNN poll finds 75 percent of Democratic and Democratic leaning voters want the party to nominate someone other than Biden in the 2024 election.

Twenty-four percent don't think he can win in 2024, and 32 percent say they don't want him reelected. Twenty-five percent still prefer Biden as the party's nominee, a drop from 45 percent when the poll was conducted in January and February.

Former President Trump returning to Washington for the first time since leaving office. He delivered a speech focused heavily on crime and what he said was his support for police making no mention of the violence law enforcement faced from a pro-Trump mob on January 6.

(BEGIN VIDEO CLIP) DONALD TRUMP, FORMER PRESIDENT: There is no longer respect for the law and there certainly is no order. Our country is now a cesspool of crime. We have blood, death and suffering on a scale once unthinkable.


ROMANS: That was the tone and mood of the entire speech. And Michael, he wasn't the only one outlining his vision for the GOP. Mike Pence also was in D.C. yesterday with theme music on the way in and some quips and jokes. It felt like a campaign speech over there, but both laying out their vision for the Republican Party.

MICHAEL WARREN, CNN REPORTER: That's right, Christine. If you are wondering when the 2024 presidential season began, these dueling speeches might be it. Let's first talk about Donald Trump's speech. It was billed as a policy focused speech and you are right, he did focus on law and order issues. But the remarks did eventually veer into more familiar territory for those of us who have been paying attention to what Donald Trump has been talking about the last 18 months, reiterating his false claims about having won the 2020 election and hinting that he may have to run against into 24.

Now over to Pence, it was just a few hours before Trump and really just a mile away here in the nation's capital where Pence gave another policy focused speech this to a young conservative group. He talked about a freedom agenda that he wants to propose for Republican candidates looking ahead to the 2022 midterms and perhaps, yes, a 2024 presidential run which people around the former vice president are making plans to potentially launch that soon.

He also made this comment about those in his party who he says want to focus on the past and really contrasted that with his own vision that Republicans should be focused on the future.

Listen to a little bit of what Mike Pence had to say yesterday.


MIKE PENCE, FORMER VICE PRESIDENT: Conservatives need to be focused on the challenges Americans are facing today. And offer a bold and positive agenda of solutions for the future. Now more than ever we need leadership and vision.

But in order to win, conservatives need to do more than criticize and complain.


WARREN: Christine, this is all happening against the backdrop not only of the 2024 presidential race because of course the investigations in to the events of January 6. You have the select committee investigation in which Trump and Pence are both central players in that drama, as well as the department of justice's investigation as we've talked about earlier in the program, two top aides to Mike Pence already talking to a grand jury convened by DOJ, so a lot to keep following in this sort of internal and inter-party drama.

ROMANS: Absolutely. Michael Warren, thanks for getting up early for us. Nice to see you this morning.

All right. Just ahead, what burgers and fries tell you about dollars and cents in America. Plus, the fight for Ukraine's southern front.