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Trump Attorney Joins Legal Battle Against Stormy Daniels; Washington Post: Trump Pushed White House Staff to Sign Non-Disclosure Agreement; Major Stakes As AT&T Merger Trial Begins This Week. Aired 7:30-8a ET

Aired March 19, 2018 - 07:30   ET

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

[07:30:00] JOE LOCKHART, FORMER PRESS SECRETARY, CLINTON WHITE HOUSE: But I was often very aggressive and that's not -- that's not fair. It doesn't obscure some of the broader issues here --

CHRIS CUOMO, CNN ANCHOR: Right.

LOCKHART: -- but I think some of that criticism is unfair.

CUOMO: Right. Take them on on the basis of what they say --

LOCKHART: That's right.

CUOMO: -- not who's saying it --

LOCKHART: Right.

CUOMO: -- because there's nothing wrong with being aggressive. That's the way we feel in this shop and that's just true.

LOCKHART: Yes.

CUOMO: Welcome to the team.

LOCKHART: Thank you.

CUOMO: Congratulations, good to have you -- Erica

ERICA HILL, CNN ANCHOR: President Trump's lawyer joining the legal battle involving Stormy Daniels. Will adding his name to the lawsuit change this case? We discuss, next.

(COMMERCIAL BREAK)

CUOMO: All right, another story.

An attorney for President Trump has joined the legal battle against Stormy Daniels and this is a little bit of a dicey proposition. We've got a great guest to discuss this.

A lawyer for Mr. Trump is joining attorneys for Trump Organization lawyer Michael Cohen and claiming that the adult film star, Stormy Daniels, could owe more than $20 million to them. Why? Because she has repeatedly violated her non-disclosure agreement.

Here to discuss, as I said, is the perfect guest, Nancy Erika Smith. She represents former "FOX NEWS" anchor Gretchen Carlson. You know this area of law so well.

[07:35:00] So, let's talk strategy here, right?

NANCY ERIKA SMITH, LAWYER AND PARTNER, SMITH MULLIN, REPRESENTED GRETCHEN CARLSON: Yes.

CUOMO: The president's -- not the president's -- Cohen's essential claim is you came. You said I'm going to talk unless we cut a deal.

I cut a deal, I paid it out of my own money to insulate the president and that's the end of this. We had a bargain for exchange. Now you want to make more money and you're going to try and find ways out of this.

OK, that's his case. She has her own version of it. Avenatti's on talking about it all the time -- her counsel.

Now we have the president's representative joining Michael Cohen in the suit over the NDA. How does that complicate matters?

SMITH: That complicates matters because the president's representatives have said that he had nothing to do with it, he didn't know her. And he said that publicly, not in an arbitration proceeding. After he said it publicly, then he wanted to go to arbitration in late February.

I would say he waived his claim that he gets to go to a secret court system.

CUOMO: He, being Cohen.

SMITH: He, being the president. The president has -- because Cohen was acting on his behalf. Unless Cohen had some individual relationship with Stormy Daniels that he paid her for, he has been acting as a representative of the president, including what he has said. He is speaking for the president.

CUOMO: So you don't buy the idea that look, I love this guy and I work for him. I don't believe this story. She's even said it's not true but it will hurt him anyway because of the way the media will run with it. I'm paying this money out of my own pocket just to keep it quiet, just to help him.

SMITH: I don't believe that for one second. And now, we know that Donald Trump has gone to court and is trying to move the whole case to federal court and then to a secret court. Secrets courts are Iran, Russia. In our country, our democracy is based on a public, open court system so we all see how the law is applied.

CUOMO: So what is this secret court that you're referring to?

SMITH: The secret court is arbitration. CUOMO: Right, but that's a little -- a bit of a black eye that you're giving arbitration.

SMITH: Well, it deserves a black eye.

CUOMO: Well, that's because you're a litigator. But people -- you know, people make deals --

SMITH: Yes.

CUOMO: -- and often in the deal part of the consideration is if this deal goes bad between us we'll go to an arbitrator.

SMITH: This is the President of the United States. He had a press conference with all the women who claimed that Bill Clinton had sexually harassed them.

Now, he is not claiming defamation. He is not claiming that Stormy Daniels is lying.

CUOMO: That is true. There is no defamation action at this time.

SMITH: Right. He is claiming that she's talking to the public about what happened.

And I also don't think that it's right to characterize it as Stormy Daniels went to them and said give me money and I won't talk.

CUOMO: That's Cohen's version of what happened.

SMITH: Right.

CUOMO: That she was talking to media outlets --

SMITH: Right.

CUOMO: -- and came to him and said -- through counsel -- and said I'm going to talk to somebody and cut a deal unless we cut a deal.

SMITH: Well, I think she was talking to media outlets and they went to her and said what do we have to pay you to shut you up, and it was a month before the election.

So as a public democracy, shouldn't we say that that's wrong no matter what? That the President of the United States should not go around paying money to people to shut up about him even -- when he's not even claiming it's false now. He's just claiming I paid you to shut up and you haven't shut up.

CUOMO: That's a bad fact, especially for a guy who threatens defamation actions all the time.

SMITH: Actively, right.

CUOMO: I was subject to one of those threats so I understand --

SMITH: Yes.

CUOMO: -- that that's a tactical favorite of his.

However, let's just touch on this for one second. So, one of the questions is should we be upset that a president pays people not to talk about him about non-criminal matters? Let's add that in.

And now, we make the case all the time that should we really care that much about the private lives of these people? Are we creating a false standard of who get in there? Are we -- are we thinning the pool of people who want to run because we just dig into their personal lives?

SMITH: I think we're entitled to know as much as possible about the President of the United States.

CUOMO: But doesn't he have legal rights like everybody else --

SMITH: He does.

CUOMO: -- who's a private citizen?

SMITH: He does and he should use the court system to enforce them, not secret courts. Secret courts are literally the opposite. Our Declaration of Independence talks about public jury trials. Our constitution talks about public jury trials.

CUOMO: You have a right to a jury trial.

SMITH: You have an absolute right.

CUOMO: Right.

SMITH: So dragging things into a secret court so the public doesn't know what's going on for the President of the United States?

CUOMO: I think context matters in that because, you know, alternative dispute resolution -- arbitration, mediation are pretty accepted things that create a lot of economy within the court system so it's case-by-case. And let me let you end on a point that goes case-by- case.

The idea of signing an agreement when you work in the White House not to betray confidential information, not to betray secrets or processes that compromise the administration of justice or our government, we understand that.

But signing one that if you talk about Trump you're in trouble --

SMITH: Right.

CUOMO: -- even if the money you have to pay goes to the federal government, is it OK? Yes or no?

SMITH: No --

CUOMO: Because? SMITH: -- absolutely not because it's not his house, it's the people's house. And if there's corruption going on we have a right to know.

[07:40:08] Certainly, there are confidential things that go on that should not be public, just like in corporations there are confidential things. But, we cannot tell people you can't complain in a corporation if you see some corruption, some wrongdoing, something dangerous going to the public.

You should not be able to say in the White House that you can't complain, you can't go to a congressman, you can't go to a prosecutor if you see illegality. That's wrong.

CUOMO: True, and you'd probably get out of it anyway for -- about a crime but it is an unusual practice. That's why I'm asking you for your take. Well-argued, as always, Nancy.

SMITH: Thank you.

CUOMO: Thank you very much.

SMITH: Thank you.

CUOMO: Nancy Erika Smith, always appreciate you here -- Erica.

HILL: The trial in one of the largest antitrust cases set to begin. The fate of a massive media merger hanging in the balance, next.

(COMMERCIAL BREAK)

HILL: One of the biggest antitrust battles in decades goes to trial this week. The federal government is suing to stop AT&T from merging with Time Warner which, of course, owns CNN. The case has enormous implications for the media and technology industries and also for you, the consumer.

CNN's Jessica Schneider is live outside the courthouse in Washington now with more. Jessica, good morning.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Good morning, Erica.

You know, this trial will be followed closely by companies wondering what the future of mergers may look like and how closely the Trump administration may be scrutinizing these business deals.

[07:45:06] Of course, the AT&T-Time Warner merger has been in the crosshairs of this president in particular, but the Department of Justice insists that the president's words played no part in their decision to challenge this merger.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): It's the proposed media merger that's been a talking point for Donald Trump since the campaign trail. DONALD TRUMP, PRESIDENT OF THE UNITED STATES: AT&T is buying Time Warner and thus, CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few.

UNIDENTIFIED FEMALE: A historic huge media deal.

SCHNEIDER: When AT&T announced plans to buy Time Warner in October 2016, most media analysts assumed it would win approval despite the president's disapproval. That's because it's a vertical merger. The two companies are not direct competitors.

AT&T is the country's largest telecommunications company that bought DIRECTV to boost its video subscribership in 2015.

Time Warner creates video and digital programming and consists of Warner Brothers, HBO, and Turner, a division that includes CNN.

JONATHAN PITT, ANTITRUST ATTORNEY: It's not unheard of for the government to challenge one but it just doesn't happen every day. And, in fact, the government hasn't taken a vertical merger case to trial in the last 40 years.

SCHNEIDER: In November, the Justice Department sued to block the $85 billion bid, shocking the media industry.

RANDALL STEPHENSON, CEO, AT&T: When the government suddenly and without notice or any due process, discards decades of legal precedent, businesses large and small are left with no guideposts.

SCHNEIDER: AT&T pointed out these comments from the chief of the Justice Department's antitrust division just months before he won Senate confirmation. Delrahim told Canadian broadcaster BNN, "I don't see this as a major antitrust problem."

But two months after Delrahim was confirmed the government filed suit, arguing Time Warner's content was so valuable AT&T might threaten to withhold it from other distributors or charge higher subscription fees, thereby violating antitrust laws.

AT&T initially planned to claim selective enforcement, pointing to political bias.

STEPHENSON: I do want to address the elephant in the room here. There's been a lot of reporting and speculation whether this is all about CNN and frankly, I don't know. But nobody should be surprised that the question keeps coming up.

TRUMP: Fake news, folks, fake news.

SCHNEIDER: And the president's comments just one day after the DOJ sued.

TRUMP: Personally, I've always felt that that was a deal that's not good for the country.

SCHNEIDER: But last month, Judge Richard Leon ruled AT&T could not force the DOJ to hand over any communication between the White House and the attorney general or the antitrust division that could have shown whether the president played a role in blocking the merger. But government, in a previous filing, said no communication like that exists.

AT&T is now focusing its defense on arguing it will not black out or charge more for Time Warner programming and that AT&T needs to add content to its platform to compete with newer entities like Netflix, Amazon, and Google.

PITT: I think a lot of content distributors like AT&T and Comcast, but also other types of content distributors are really thinking about how they can be more competitive in a market that is changing a lot.

(END VIDEOTAPE)

SCHNEIDER: And that is exactly why AT&T and Time Warner aren't the only companies who are watching this trial and this block by the Justice Department very closely.

Other media giants, just like Disney and 21st Century Fox, they are also following this closely. They may have a stake in this as well. They may -- it may influence further business decisions.

Now, if the government does block this merger some see this as a sign of a new era of government scrutiny all while these media companies try to navigate this rapidly changing media landscape -- Chris.

CUOMO: All right. Thank you very much. Appreciate the reporting.

So, how will this blockbuster trial affect you? We're going to have our media experts take you through it, next.

(COMMERCIAL BREAK)

[07:53:19] HILL: In a matter of hours, the trial pitting the Justice Department against attorneys arguing for a merger between AT&T and Time Warner will get underway. So what does this antitrust case really mean for you, the consumer?

Joining us now, CNN senior media correspondent Brian Stelter, and "CNN POLITICS" media and business reporter Hadas Gold.

As we look at all of this we are learning that the brief has shown that AT&T no longer plans to argue there's a political bias here.

Brian, why the change?

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT, HOST, CNN "RELIABLE SOURCES": Because the judge, Richard Leon in this case, won't allow that part of the conversation. He won't let the companies seek evidence about potential White House-DOJ communications. But there will -- there will be a whiff in politics -- the smell of politics around this case even if it's not discussed in the courtroom.

We all know about the president's disdain for this network. We all know about his frustration with Jeff Sessions. So all of a sudden you have the A.G.'s department -- the Department of Justice -- looking into this case. Its antitrust experts decided to pursue this case, suing AT&T and Time Warner.

Now, these are career officials who are building the case. But the fact that it is Jeff Sessions -- his department doing this at a time when the Trump-Sessions relationship is very frayed, all of those reasons stack up here and that's why there's going to be whiff of politics surrounding this even if, again, it doesn't come up at the trial.

HILL: Right, and let's be realistic here. It's sort of tough to avoid that whiff of politics when you talk about --

STELTER: That's right.

HILL: -- anything these days, but especially this.

STELTER: And then that's why when the president tweets, when he fumes, when he rages, when he speaks out at rallies, all of his words in some cases do have consequences. We've seen that in courts all across the country.

HILL: Well, and just to refresh your memory, we had the president talking about this. I think we can play --

STELTER: Right.

HILL: -- that now.

(BEGIN VIDEO CLIP)

TRUMP: AT&T is buying Time Warner and thus, CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few.

(END VIDEO CLIP)

[07:55:11] HILL: So the president's assessment there, it's too much concentration of power. You know, Brian mentioned about the judge isn't going to allow the political component here.

But what will be interesting to see is the judge and his views on the media landscape in 2018, for example, whether this is truly a consolidation of too much power because people consume media obviously very differently, Hadas.

HADAS GOLD, MEDIA AND BUSINESS REPORTER, "CNN POLITICS": You're really right. Everything is really changing in how people are consuming media and that's really at the crux of the opposing sides in this case.

The government is arguing that there are still millions of people who pay for traditional cable and that this deal would negatively affect them because their government expert thinks that it's going to raise your cable bill by as much as 45 cents a month, which doesn't sound like a terrible amount of money per month but it equals out to about five and a half dollars per year.

AT&T argues that even that assessment is incorrect, but even it if was correct that that's negligible and it's not clear whether those prices would actually pass on to consumers. And, in fact, AT&T consumers would potentially even see a decrease in their cable bill.

AT&T is arguing that they have to do this merger because they're competing with Netflix, and Facebook, and Google, who are pretty much doing the same thing by building out their own content in addition to how they deliver it to you, but they're just doing it in-house.

And, AT&T is saying they're just going to do this by acquisition instead and this is how they have to compete with these new companies by creating their own content and that the landscape is changing drastically.

That's ultimately what the judge is going to have decide here is what is his interpretation of what the media landscape looks like and how this merger will affect it.

HILL: And what's interesting Brian, is that when this was announced in 2016, most media analysts thought it was really, in many ways, sort of a slam dunk. Not a lot to see here. Shouldn't be a -- shouldn't be that many issues because they're not direct competitors.

How has that view changed?

STELTER: And the expectation was that normally, deals like this, they get reviewed, there are usually some conditions attached, and then they get government approval.

In every other country where this deal has been reviewed, it has been approved, it has been blessed by the government. The U.S. is the only country where there's been a lawsuit now. And it all about those giant tech companies versus these old media players.

I think Hadas has it exactly right. If you're the head of AT&T or the head of Time Warner or -- take out these two companies. If you're the head of Fox or if you're the head of Comcast you're looking out to Silicon Valley and you're look at -- you're looking at Netflix, you're looking at Facebook, you're looking at Google and you're saying how am I going to compete five, 10, 15 years down the line?

HILL: Yes.

STELTER: You know, HBO -- which it was part of this deal. Everyone watches HBO programming. But, you know, more and more, HBO is losing out bidding wars to Netflix and to Apple or they're losing out on shows they'd like to buy.

So these companies -- these media companies, even though they are very big and they want to get bigger, they actually look kind of small next to an Apple or next to a Netflix --

HILL: Right.

STELTER: -- and that is the crux here. Can these media companies compete in this technology-driven world?

HILL: And, Hadas, real quickly. Last word to you.

A lot of folks will point to the merger of Comcast and NBC.

GOLD: Yes.

HILL: Is that a fair comparison in this case?

GOLD: Well, AT&T is saying it is because it was similarly a vertical merger and it's actually the same judge who helped rule on that settlement. It wasn't necessarily a lawsuit in the same sense, it was a settlement agreement with certain conditions applied to it.

But now the Justice Department has sort of changed their tactic. They no longer these what are called behavioral remedies. Pretty much promises by the companies that they would work certain things out.

The Justice Department now wants structural remedies and that means complete sales, complete cutting off, and that's a change in the approach the Justice Department is seeking and that's why we're seeing this lawsuit.

HILL: And that's why we are all following it so very closely.

Thank you, both.

STELTER: Thanks.

GOLD: Thank you.

HILL: A busy Monday morning. Let's get to it.

(BEGIN VIDEO CLIP)

CUOMO: Another explosion in Austin raising fears about a possible serial bomber.

BRIAN MANLEY, POLICE CHIEF, AUSTIN, TEXAS: Do not touch any packages or anything that looks like a package.

UNIDENTIFIED MALE: This is concerning. It's a big deal.

CARL BERNSTEIN, CNN ANALYST, JOURNALIST, AUTHOR: He is determined to shut this investigation down.

MARC SHORT, WHITE HOUSE DIRECTOR OF LEGISLATIVE AFFAIRS, ASSISTANT TO PRESIDENT TRUMP: I think the president's expressing his frustration which I think is well-warranted and merited.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: If he tried to do that, that would be the beginning of the end of his presidency.

HILL: President Trump's attorney calling for the Mueller investigation to end.

REP. TREY GOWDY (R), SOUTH CAROLINA: But if you have innocence client, Mr. Dowd, act like it.

UNIDENTIFIED MALE: He put it out on him. He said do this before he qualifies for retirement.

SEN. JEFF FLAKE (R), ARIZONA: It was a horrible day for democracy. To have firings like this happening at the top does not speak well for what's going on.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CUOMO: Good morning, welcome to your NEW DAY. Alisyn is off. Erica Hill joins us and it is good to have you.

HILL: Good to be here.

CUOMO: We begin with breaking news.

The Texas capital on edge again. Another explosion in Austin. Two people hurt this time.

Police are operating under the assumption that it could be connected to the string of deadly bombings that have occurred this month. Authorities say the latest explosion may have been triggered by a trip wire on the side of a road.

HILL: Police are urging residents in the area to stay inside their homes. This blast coming just hours after police made a rare public appeal to the bomber or bombers to reveal the message behind the attack.