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House Democrats Subpoena Giuliani Associates; Campaign Finance Records Indicate Giuliani Associates Funneled Foreign Money Into Campaign of Former Representative Pete Sessions; Two Men Who Helped Giuliani's Efforts to Investigate Biden in Ukraine Under Arrest. Aired 12-12.30p ET

Aired October 10, 2019 - 12:00   ET

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

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KYUNG LAH, CNN CORRESPONDENT: --the base field has been under attacked during the Trump White House Kate.

KATE BOLDUAN, CNN HOST, CNN NEWSROOM: All kicks off right here on CNN. Thank you so much Kyung a lot to forward this evening. Do not forget to watch CNN's back to back town hall that all starts tonight at 7.00 pm eastern right here on CNN. Thank you all so much for joining me another day for another wild day "Inside Politics" with John King starts right now.

JOHN KING, CNN HOST, CNN NEWSROOM: Thank you, Kate, and welcome to "Inside Politics." I'm John King. Thank you for sharing your day with us. A blockbuster indictment, the feds indict two Rudy Giuliani clients on charges they illegally funded foreign money into American campaigns including a Trump reelection Super Pac.

Plus, consider the source the men now under federal indictment are Giuliani's key sources in Ukraine. House Democrats already wanted to question them in their Trump impeachment inquiry. And adding this as the President calls the impeachment a partisan witch hunt, his own government again gives credence to the case against him.

First the Intelligence Community's Inspector General backed up the Ukraine whistleblower's account. Now the Trump's Justice Department labels as crooks the man who, through Rudy Giuliani, helped stoke the President's Joe Biden/Ukraine obsession. And we begin the hour with that blockbuster indictment. What it tells us about the company Rudy Giuliani keeps and how it factors into the impeachment case against the President.

Just this is head-snapping. The President's own Justice Department indicting clients of his Personal Attorney, Rudy Giuliani. Those clients were arrested at Dallas Airport outside of Washington yesterday, spent the night in jail are due in federal court later today.

Lev Parnas and Igor Fruman are accused of violating campaign laws by laundering foreign money from a source with Russian routes through a U.S. entity and then illegally into American campaigns. Parnas and Fruman are also key sources of what Giuliani insist is a proof of Biden family corruption in Ukraine.

Their credibility has long been an issue. And now the Trump Justice Department alleges they are criminals. Rudy Giuliani telling CNN today he cannot comment at this point. CNN's Kaitlan Collins is live at the White House. Kaitlan, shocking indictment what's the word at 1600?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: So far John, they have not said a word on this so far. We've asked them for comment nothing from the White House yet. We are getting a statement from the President's outside Attorney. That's Jay Sekulow. He told Jim Acosta in a statement, "Read the indictment" he says. Nor the candidate nor the campaign have anything to do with the scheme these guys were running.

That's from Jay Sekulow, the President's outside Attorney. That's all he is saying so far though of course if you do read through this indictment as Jay Sekulow is telling you to do, you'll see how this is only going to up the pressure that is already facing this White House over these Democrats and their calls for an impeachment inquiry, and it continued the impeachment inquiry into the President over his calls with the Ukrainian President and their actions there.

John, we're also hearing from the pro-Trump Super Pac that these two guys donated to. It was a six-figure donation that came last May, $325,000 to America First Action which then put out a statement shortly after the news broke today, saying that they had not touched that money yet. They put it in a segregated bank account, because they said shortly after the two men made that donation from the energy company that they both own that somebody filed an FEC complaint, alleging campaign finance violations, so they say they haven't used it yet.

We should point out that statement was issued by a Former White House aide, Kelly Sadler, who is now the spokesperson for the Pro-Trump Super Pac America First. A Pro-Trump Super Pac that also has the Former Small Business Administrator, Linda McMahon, on the board and also employees Sean Spicer of course the Former White House Press Secretary.

So there are so going to be a lot of questions facing this White House, John. What the answers are going to be remains to be same.

KING: A lot of questions for sure. We'll see how this plays out and watch the federal court hearing later today. Kaitlan, thank you very much. To CNN's Michael Warren now for more on just how these men came to know Rudy Giuliani? Michael, what is the back story?

MICHAEL WARREN, CNN REPORTER: Well, we've know now John, for a couple weeks that Rudy Giuliani told CNN that Lev Parnas and Igor Fruman were those two Ukrainian American who helped him make connection with current and former Ukrainian officials who provided information that he says really does need more investigation. Of course, we know that information has gotten to Rudy Giuliani's client President Trump and has been a part of this entire impeachment inquiry investigation.

The house-led Democratic Committees have subpoenaed Giuliani for documents they've also made document requests for Fruman and Parnas relating to those conversations that those three men were having. We also know that Lev Parnas in a completely separate civil case and subpoenas from that case down in Florida that the Plaintiff's Attorneys were looking for documents, any documentation of past - of business relationships between Parnas and Giuliani. John?

KING: It's a complicated story. Michael, I appreciate you're helping us connect some of the dots here. With me in the studio to share their reporting and their insights, Vivian Salama with "The Wall Street Journal" Carl Hulse with "The New York Times" Former Federal Prosecutor Shan Wu and CNN's Evan Perez.

Shan, I want to start with you. It is campaign financing indictment in and of itself that has nothing to do with any of the allegations in the Democrats as they build their impeachment case.

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KING: But even Jay Sekulow, the President's own Attorney in saying, you know, "Nothing to see here. Read the indictment. Neither the candidate nor the campaign has anything to do with the scheme these guys were involved in". So the president's own Attorney calls them schemers.

These schemers are a key source of information to the President's Personal Attorney who passes it on to the President who repeats it all the time even though much of it we can prove to be false and the rest of it is unfounded. What does this tell you?

SHAN WU, FORMER FEDERAL PROSECUTOR: Well, this really tightens the noose of scrutiny on Giuliani. If I were him, I would be thinking about taking the fifth real quick, because you just don't know where it's going to go with these folks. They're likely to become cooperating witnesses, and if they become cooperating witnesses, they could yield very valuable information about Giuliani as well as what impetus they had, or direction, from Trump himself.

KING: And again, no connection in this indictment itself per say to anything involving the President or the impeachment inquiry, but one of the key allegations here is that they gave money to a Congressman and then try to get that Congressman to help get rid of the Ambassador to Ukraine, who is on the Democrats' witness list.

Ambassador Yovanovitch story is did not like this talk about investigating the Bidens, did not like using the levers of the United States government to advance the President's Personal political vendetta.

Here is from the indictment here, at or around the same time Parnas and Fruman committed to raising those funds for Congressman-1, Parnas met with Congressman-1 and sought Congressman-1's assistance and causing the U.S. government to remove or recall then U.S. Ambassador to Ukraine. Parnas' efforts to remove the Ambassador were conducted at least in part at the request of one or more Ukrainian government officials. EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: And you know that Congressman is no longer a Congressman it's Pete Sessions and everybody sort of was confused when he issued this letter publicly saying that he had a problem with her. People were really confused as to why that was?

We see now that this is money being fundraised by these two guys and others, apparently, that went to him and they were lobbying him to try to make that happen. There is also another interesting thing. On page 12 of the indictment, it talks about how these men were involved again fundraising for other candidates, and there is a rally that is a Trump rally, by the way, on October 20, 2018.

This was a rally were the President attended. Again it was a fundraising event for other candidates, but they were there and they were trying to essentially raise money for those candidates. Nothing direct to the campaign here, no direct tie to the President or his campaign, but it does show you how, you know, intertwined all of this became with President Trump, simply because of Rudy Giuliani's involvement and the fact that, you know, the two men are so close.

KING: And it does get directly to the idea of the company you keep and the credibility of the company you keep. I want to read a little more from the indictment, again, just to connect some of these dots here. "Shortly after that meeting, Parnas, Fruman, Correia and Kukushkin two other men who were indicted in this case began to formalize the business venture with Foreign National-1 to fund their lobbying efforts but took steps to hide Foreign National-1's involvement in the business venture, including any political contributions associated with the business venture, due to, in Kukushkin's words, "His Russian roots and current political paranoia about it".

These people that Rudy Giuliani has associated with in Ukraine, many of them are Pro-Russian. They pedal the conspiracy theory that Ukraine, not Russia, interfered in the 2016 election. That gets into the President's head through who Rudy Giuliani. Then these guys - give Giuliani access to where he comes back with his Biden allegations.

VIVIAN SALAMA, WHITE HOUSE REPORTER, THE WALL STREET JOURNAL: And it's whole tangled venom. We sort of see it manifesting in some of the policy decisions whether or not it was directly related to the President's decisions at the end of the day, we still don't know.

Obviously we've seen pictures of these two individuals now with Don Jr., the President's son. We know that he has had dinner - that they've had dinner with the President, and so what we're going to see in the next coming weeks is the White House essentially, and the President's lawyers, trying to shield him away from any of these activities to say these guys were acting independently, perhaps they had some sort of relationship with Rudy Giuliani, but he is the President's personal lawyer. This has nothing to do with his actions as the President, and his activities as the top government official, essentially.

CARL HULSE, CHIEF WASHINGTON CORRESPONDENT, THE NEW YORK TIMES: This is very similar to what they said about Michael Cohen as well. To think you're right where this is a complicated thing, but I think it's also simple, and it's going to seem simple to people on the outside.

The White House is trying to brazen this out, nothing happened in Ukraine, and now all of a sudden people are being indicted for this. And I think people say, well, maybe there is something sketchy there. I think this really hurts the White House there.

I think it's also one of these things when we talk about these investigations lead to new developments and things pop up to change everything. Well, this is an example of that. This is not very good for the White House. And it's also, you know now it draws House Republicans into this, even though he's gone. Mr. Sessions has been talking about running again. We'll see how that affects his plan.

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KING: Right. And it draws another spotlight on Giuliani, and again, the question of whether you can trust him, number one? And two, the people he gets his information from who again, the Trump Justice Department now calls crooks and chiefs? That's what's fascinating to me.

This is brought by the Southern District of New York Jeffrey Berman is Rudy Giuliani's former law partner. It is signed off on by the Attorney General of the United States who a lot of Democrats believe is trying to do everything he can to protect the President. Well, on this case Bill Barr signed off on this, right?

PEREZ: He did, and I think it goes to your point which is for months people have been trying to tell the President, actually, for more than a year, tell the President to stay away from Rudy Giuliani. Bill Barr took that advice himself because he was briefed on this investigation back in February right after he became Attorney General.

And the Justice Department has certainly made every effort to stay - to have him stay away from Rudy Giuliani, to keep Giuliani away from the Justice Department, away from Bill Barr, with good reason. I think the question is why hasn't the President taken that advice?

KING: And to that point, we'll do more on this case, the specifics of this case in just a minute, but Shan, this breaks on the day of the Bloomberg reporting again, the Trump urged top aid to help Giuliani client facing DOJ charges. In that piece President Donald Trump press then Secretary of State Rex Tillerson to help persuade the Justice Department to drop a criminal case against an Iranian Turkish gold trader who is client of Rudy Giuliani.

According to three people familiar with the 2017 meeting in the Oval Office, I mean, help me understand that. This is the President's Personal Attorney not on the government payroll asking the President of the United States to get the Secretary of State to help a client and quash a criminal investigation.

He's still the President's Personal Attorney and now he's involved in all this Ukraine stuff. Help me. There are ethics rules, aren't there?

WU: That is a classic abuse of power. And the President's team and he could spin some legal theories that he's the head of the executive branch and can ultimately do anything he wants. He could order DOJ shut it down because I'm bad. But that's exactly what our structure is in place to guard against, which is to have the President of the heading executive branch give his cronies' clients help by putting his fingers on the scale of criminal investigation.

PEREZ: We're talking about the President's lawyer using the Oval Office, right? He has special access to the President. So Tillerson walks into the room, I'm told, and he confronts Mike McCabe, the Former Attorney General, and Rudy is sitting there. The President says, gentlemen, tell Tillerson what you'd like him to do?

And this idea of a swap for this man - who is facing charges and who is actually being convicted now in New York for this Pastor that the Turks were holding hostage, essentially. So the question then arises, again where does Rudy Giuliani's personal interests, his business interests where do they align and how do they intertwine with U.S. government foreign policy? And is that good?

The President seems to be comfortable with mixing those two things. Tillerson was very unhappy about that. He said no. Rudy and McCabe he also tried to bring this up with the Justice Department, and they said no. So people were basically saying this is not something we do.

KING: And turn on Fox News six days a week and Rudy Giuliani is calling everybody else corrupt. When we come back, more on this case including the role of that Former Republican Congressman Pete Sessions.

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KING: It's new information on this hour on today's major news an unsealed indictment against the pair of Rudy Giuliani associates. This hour we are learning more details about part of that indictment which says the two men Igor Fruman and Lev Parnas helped funnel foreign money into the Congressional campaign of Former Texas Republican Pete Sessions. Let's go live up to Capitol Hill and CNN's Manu Raju. Manu, what do you know?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Pete Sessions, the Former Texas Republican Congressman, the Former House Laws Committee Chairman had been urged by these two Rudy Giuliani associates to seek the ouster of the then Ukraine, U.S. Ambassador to Ukraine at the same time that these Rudy Giuliani associates were bankrolling his campaign.

This indictment shows that these two individuals, Lev Parnas and Igor Fruman, had met with Sessions at a Pro-Trump Super Pac back in 2018 at and around the same time they committed to raising money more than $20,000 for Congressman Sessions and sought his assistance.

They at the time, they also sought his assistance to urge the removal of the Ukrainian Ambassador. Now we have also learned that Sessions himself played a role in trying to get this Ukrainian Ambassador removed because of concerns that were alleged that she was not been loyal enough to President Trump and that she had been criticizing President Trump.

At the same time this Pro-Trump Super Pac had went down to spend more than $3 million on Sessions' behalf in the 2018 midterms. That's according to FEC records. Sessions we reached out to for comment. He declined to comment.

But John, I do want to mention one other major piece of breaking news that just came across our inbox. The three committees that are pushing on this impeachment probe have just announced that they issued subpoenas for the same two individuals who we've been talking about all morning, saying that their subpoenas are demanding documents from Lev Parnas and Igor Fruman that Giuliani's associates.

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RAJU: So the associates have subpoenaed in this house impeachment inquiry. They're the ones who have been arrested today. So this letter that just came out, literally as I was coming on air, calls on them to turn over key documents by October 16th. It says they have not complied with their request.

Even though that they have been arrested and indicted, John, the House Democrats believe this is a key part of the impeachment inquiry. They want to get that information, and they also want to talk to the Ukrainian Ambassador who is, at the moment, scheduled to come tomorrow, John.

KING: We'll see what happens with her scheduled testimony. One would expect the State Department will try to block it. Manu Raju, appreciate it on both fronts tracking the breaking news up on Capitol Hill. Matt Viser with "The Washington Post" and Tamara Keith with NPR joining us our conversation.

Again this can be very confusing but if you connect those dots what is striking to me is to you now have the Trump Justice Department bringing to court and potentially putting on trial in the near future, although these things can get delayed, two people where some of this information might come out in court that the Democrats would probably be stymied to get just asking for it.

If these guys are associates of Giuliani, they did not plan a cooperating with voluntary request for this information, and again what the Democrats are asking for Manu says it's now subpoenas before it was a voluntary request.

They want documents from these two gentlemen about efforts to persuade Ukrainian officials to investigate Hunter Biden and the Energy Company that Hunter Biden was on the board communications with Trump Administration officials, their involvement in that effort to recall Ambassador Yovanovitch in any foreign campaign contributions to Pro- Trump Super Pac and other campaigns.

Again you connect the pieces here Rudy Giuliani wanted the former ambassador recalled. Didn't think she was helping him convince Ukrainian officials to do what he wanted to be done. Now you have his clients allegedly involved in that as well. This is mind-boggling.

MATT VISER, NATIONAL POLITICAL REPORTER, THE WASHINGTON POST: And these two individuals are the key conduit between the Trump Administration and Ukrainian officials. And I think it's in some ways we've seen this movie before. A lot of this feels very similar to what we relived through the Russia scenario.

In that case you had Bob Mueller who Democrats would sort of put a lot of faith that he's going to investigate. Now it's the House Democrats and they've launched this impeachment inquiry already, and now they're going after people who don't fall under the Trump Administration. So the Trump Administration had sort of stymied House Democrats. These two individuals have less legal standing to do that.

KING: Much less legal standing. And this explains this, John Dowd, who used to represent the president, now represents Parnas and Fruman. Responded to Congress in a voluntary request for documents on Monday, you request for documents and communications is overly broad and unduly burdensome. The subject matter of your requests is well beyond the scope of your inquiry. It goes on to say.

John Dowd, probably pretty well aware of that was on Monday, what was going to happen coming Wednesday and Thursday in conversations with the Justice Department, which raises the stakes here again.

TAMARA KEITH, WHITE HOUSE CORRESPONDENT, NPR: Well, and John Dowd also was arguing that maybe the congressional investigators shouldn't get their information because they were working with Giuliani who was working with the President, so there could be privilege issues.

So they are directly connected to President Trump and the efforts to get dirt on Joe Biden and his son. One question I have about this, though, is will there be a claim that they can't possibly cooperate with Congress or turn over documents because now it's an ongoing investigation?

KING: Right. They'll say that we're on trial so you have to wait, if anything. Let's try to step back if we can, and it's hard when these things are breaking, to the idea of Rudy Giuliani, once an icon in the United States as Mayor of New York in the days after 9/11. He became a global institution.

Now he is at the center of so many questions, again, as he goes on and accuses other people of corruption about using his personal access to the President, his international business clients, some of them with Pro-Russia ties. It's well documented who he works with. Kamala Harris, who is running for President, of course, still says he should testify under oath.

HULSE: Well, that was the Republicans were going to call him in the Senate, and I think their idea at that point was to give them a chance to have a platform to implicate Joe Biden. I think those plans may change now for Mayor Giuliani. He doesn't want to get up there. And he's also incriminated himself. His constant talking, even his discussions of the idea of maybe helping getting that person, the gold trader, off. In some ways, he has been his own worst enemy we'll probably see less of Rudy Giuliani.

KING: But the President is the CEO of the operation. There are a lot of Republicans to say Rudy is doing harm to the President. Rudy is hurting the President. If the President pays any attention to the news, and we know he does, he has known for a long time about this and he doesn't waiver in his support for Rudy Giuliani.

SALAMA: But the President also prioritizes loyalty in so many ways. And we can even go back to what we were talking about earlier with Rex Tillerson Former Secretary of State adamantly objecting to certain actions by Giuliani.

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SALAMA: Tillerson was no longer with the administration yet Giuliani continues to sort of be a top advisor an outside advisor granted to the President because of the fact that he remains truly loyal to the President, and that to him is a priority.

KING: I think this is an odd sense though, Rex Tillerson objects to doing something that was illegal and he's gone. I'll let anyone at home fill in the rest of the sentence there. Up next, we had Pentagon officials a list of those who think President Trump made a big mistake in Syria.

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