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January 6th Committee: Trump Bilked Supporters of $250M for Bogus Fund; Barr Testifies Trump 'Detached from Reality'; Committee Floats Fundraising Fraud as Potential Trump Case; Stocks Enter Bear Market on Fears of Drastic Rate Hikes. Aired 6-6:30a ET

Aired June 14, 2022 - 06:00   ET

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


BRIANNA KEILAR, CNN ANCHOR: Good morning to viewers here in the U.S. and around the world. It is Tuesday, June 14, and I'm Brianna Keilar alongside John Berman here this morning.

[05:59:49]

Damning new accusations and an unlikely star witness taking center stage as the insurrection hearing takes new turns. The January 6th Committee accusing Donald Trump of scamming his supporters out of $250 million, laying out the case that Trump solicited money from backers by using lies as a fundraising tool; adding that he sent up to 25 emails a day, soliciting donations for a legal fund that simply didn't exist.

JOHN BERMAN, CNN ANCHOR: But is it potentially criminal, and will Attorney General Merrick Garland pursue or prosecute it as such? Those are the key questions emerging from the hearings overall.

And there seems to be a new rift emerging from within the January 6th Committee itself on the very subject: whether they will make a specific criminal referral to the Justice Department.

As for witnesses, some of the most stark testimony is coming from Trump's former attorney general, William Barr, who offered a line-by- line debunking of some of Trump's ongoing lies about fraud. And he called Trump "detached from reality" after the election.

KEILAR: Katelyn Polantz is live with this new reporting. Trump's supporters, Katelyn, they were donating millions, and it wasn't paying for what they thought it was.

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: That's right, Brianna. This disinformation campaign by Donald Trump after the election, it was also a grift. And that is what the committee has found so far.

So you mentioned $250 million that Donald Trump took in, fundraising relentlessly after the election on this idea that he was defrauded of the presidency.

This $250 million went to what was called the Official Election Defense Fund. Now, a campaign staffer told the committee, and we saw a clip of that staffer yesterday, saying that that Official Election Defense Fund, it wasn't real. It didn't exist.

Instead of that money going to something like that or going to election-related litigation -- remember, Trump had brought many, many cases, dozens of cases in court. That money didn't go to that. Instead, it went to something called the Save America PAC created after the election. And that Save America PAC then distributed money to other political ventures.

So $1 million to a charitable foundation that was being run by the chief of staff at the White House at the end of the Trump administration, Mark Meadows. Five million dollars toward the rally at the Ellipse, an event contractor there. Two hundred thousand dollars toward the Trump Hotel Collection, the committee said.

So, this is all new information. But whenever it was put into the broader context, the point that the committee was trying to make was that this wasn't just Donald Trump out there fundraising as a politicians, hoping that he would get backing from his supporters for this. He was also being told repeatedly that he lost the election from the people who were close to him, both on the campaign and the administration.

Ultimately, there were six officials who were testifying that we saw yesterday, either in person or taped, who were saying that they told him that he lost the election. There was no fraud. Those included campaign manager Bill Stepien; a lawyer, Alex Cannon; campaign spokesman Jason Miller; the attorney general at the time, Bill Barr; his successor, the acting attorney general, Jeffrey Rosen; the deputy attorney general, Richard Donahue.

And finally, you know, we also saw live testimony from a prosecutor in Georgia, the top federal prosecutor out of Atlanta, BJay Pak. He said that his office investigated these claims of election fraud as Trump was making them, as Rudy Giuliani was making them, as they were being fund-raised. And he found those claims were false.

KEILAR: They were false. And he heard it over and over again, Trump did.

Katelyn, thank you so much for the reporting.

BERMAN: So as we noted, the videotaped testimony from former attorney general, William Barr, some of the most searing to date. With us now, Elie Honig, former federal prosecutor and CNN senior legal analyst. He is also the author of "Hatchet Man: How Bill Barr Broke the Prosecutor's Code and Corrupted the Justice Department."

Bill Barr very much in the news, very much an area of your expertise, Elie, and emerging as something of a central witness here, as someone who did not believe the former president's claims of fraud from the very beginning. Listen.

(BEGIN VIDEO CLIP)

WILLIAM BARR, FORMER U.S. ATTORNEY GENERAL: I was influenced by the fact that all the early claims that I understood were -- were completely bogus and silly, and usually based on complete misinformation.

I told him that the stuff that his people were shoveling out to the public were -- was bullshit. I mean, that the claims of fraud were bullshit and, you know, he was indignant about that.

(END VIDEO CLIP)

BERMAN: Important why and important why that Barr is the one saying it?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Yes, John. I can't believe I'm saying this, but Bill Barr is emerging as the star witness so far in these hearings.

And his testimony hits extra hard when you remember who he is. Let's remember: he spent the vast majority of his time as attorney general stretching, bending, distorting the truth in favor of Trump. He's no never-Trumper. He's no RINO. If anything, he is a devotee of Donald Trump.

And yet here we see him testifying starkly, I told him this was fraud.

What is the committee trying to get at here? No. 1, there was no fraud. This is the attorney general of the United States. He would know better than any other human on the planet.

[06:05:06]

And, two, Donald Trump was told to his face repeatedly by people who would know. So that goes to Donald Trump's knowledge.

BERMAN: So I think if there's one comment he made that has made headlines this morning, it's this one. Let's listen.

(BEGIN VIDEO CLIP)

BARR: I thought, boy, if he really believes this stuff, he has, you know, lost contact with -- with -- he's become detached from reality, if he really believes this stuff.

On the other hand, you know, when I went into this and would, you know, tell him how crazy some of these allegations were, there was never -- there was never an indication of interest in what the actual facts were.

(END VIDEO CLIP)

BERMAN: "Detached from reality." I have two questions here, Elie.

HONIG: OK.

BERMAN Detached from reality may be sensational, but criminal, question mark.

HONIG: Right. BERMAN: And also, you know, one thing that's interesting here is Barr

is not being cross-examined. Barr over the weekend was directly asked if he thought Donald Trump broke any laws, and Barr said he saw no evidence of it.

HONIG: I'm glad you make that point.

First of all, "detached from reality." Where was this back then, Bill Barr? Let's remember the time line. Bill Barr resigns in December of 2020. Doesn't say a word of this.

I want to make a point about cross-examination here. We are seeing one side of the story. There's no cross-examination. But if you had a chance to cross-examine Bill Barr, I think you could take a bite out of the testimony.

I'm going to role-play with you. You're going to be Bill Barr. I'm going to be the lawyer representing Donald Trump. OK?

Mr. Barr, you say you resigned because Donald Trump was making crazy allegations of fraud, and you thought he was detached from reality, right?

BERMAN: Yes.

HONIG: Do you remember writing a resignation on December 14th of 2020?

BERMAN: I do.

HONIG: And in that letter, you told Donald Trump that you were continuing to investigate his allegations of fraud, right?

BERMAN: Correct.

HONIG: Right. And you also praised Donald Trump for, quote, "advancing the rule of law," didn't you?

BERMAN: Yes, this is getting uncomfortable.

HONIG: And it will get a little more uncomfortable for you. You also said just recently you would still vote for Donald Trump in 2024, correct?

BERMAN: Correct.

HONIG: And by the way, all this stuff that you've been talking about, none of it's criminal, is it?

BERMAN: I did not see any evidence of President Trump -- I'm playing Bill Barr here -- conducting criminal activity.

HONIG: And scene.

So the point I'm making here is there's no cross-examination. Easy to do this in a vacuum. It's powerful; it's effective, but let's keep everything in check. BERMAN: And this gets to one of the key questions that will emerge

from these hearings in general. I'm glad we just did that role-play, as uncomfortable as that made me, because I wasn't prepared to act this morning.

I do want to -- I do want to ask about Bill Stepien.

HONIG: Yes.

BERMAN: Donald Trump's former campaign manager, who did not testify in person, because his wife was having a baby, or went into labor yesterday. But we did see videotaped deposition from him. Let's listen to a little bit of Stepien.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You didn't want to be associated with some of what you were hearing from the Giuliani team and others that sort of stepped in, in the wake of your departure?

BILL STEPIEN, FORMER TRUMP CAMPAIGN MANAGER: I didn't mind being categorized -- There were two groups of the family (ph). We called them kind of "my team" and "Rudy's team." I didn't mind being characterized as being part of Team Normal.

(END VIDEO CLIP)

BERMAN: What's the point of Team Normal versus Team Rudy?

HONIG: yes. This is more than just about who's smarter, as between Bill Stepien or Rudy Giuliani. The committee is making, I think, a compelling case here that so many people were on Team Normal. It wasn't just Bill Stepien. It was Bill Barr. It was the Department of Justice. It was the FBI. It was dozens and dozens of courts.

They're making the argument that Donald Trump had to have known that he lost this election, or to use the legal term, was willfully blind from it.

Shut out all the evidence, the compelling evidence that he had lost and only heard what he wanted to hear from Rudy Giuliani, Sidney Powell and others. And they're trying to set the stage and say, There's just no way he could have legitimately believed that he won this election.

BERMAN: Elie Honig, great explanation there. And just for the record, I didn't order the Code Red, and I can't handle the truth. Elie Honig, thank you very much -- Brianna.

KEILAR: Very good acting there. So can any members seemingly at odds over whether any of their findings could lead to a criminal referral to the Justice Department.

Chairman Bennie Thompson says the committee would not make a referral and let the evidence stand on its own. And then within hours last night, there were other members, including Liz Cheney, insisted that a decision had not yet been made.

So let's talk about this now with CNN senior political analyst, John Avlon; "EARLY START" anchor and attorney, Laura Jarrett; and Jeremy Temkin, white collar criminal attorney who has tried high-profile tax and securities fraud cases.

All right. So this is interesting. Are they not on the same page? Is someone speaking out of turn? What do you think is happening here?

LAURA JARRETT, CNN ANCHOR, "EARLY START": I don't know why create the daylight on this issue. The chairman has spoken. The chairman has said, Look, we don't have to refer this to the Justice Department. The Justice Department knows very well how to investigate these cases on its own.

We have the attorney general now on the record, saying, I'm watching everything carefully. He may be DVR'ing it. His prosecutors are watching it. He's watching it. He's paying attention.

[06:10:07]

There's so many hard calls in -- in this investigation in this case, I don't know why to make this -- the issue sort of look like they're not all on the same page about it.

BERMAN: Except perhaps, if Merrick Garland chooses not to prosecute, a criminal referral voted on by Congress could be the only actual document to come from this.

JEREMY TEMKIN, WHITE COLLAR CRIMINAL ATTORNEY: But they can issue a report that didn't have to, at the end, say, And we refer the matter to the Department of Justice for a criminal prosecution.

So there's a difference between a report that summarizes its findings and summarizes the evidence and the actual referral saying, Please, Department of Justice, prosecute this case.

KEILAR: I can see a point where there are people on the committee who believe that a criminal referral should be made. And yet, they decide that maybe it's not their role to make it because of the political statement that it might send. What are they trying to do here?

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: I think what happened here is that the chair got over his skis, so to speak. And clearly, given all the given all the pushback, not only from Liz Cheney but other members of the committee, they're saying, Hold on. We haven't made that decision yet.

So the chairman seems to be speaking out of turn.

Now, there are questions of precedent, whether that's the right congressional role. There's also the issue of, for example, the Mueller report, where if things are not formally recommended, you know, and you just leave it up to DOJ discretion, sometimes the tree falls in the forest and nothing happens. That's unlikely to happen in this case. It's also great questions about whether actual criminal penalties

could apply here. Some people think they could. Some people think that certain of the things that have been alleged are a bridge too far.

But this confusion of the January 6th Committee is a real problem. And it was an unforced error.

BERMAN: Yes. The question is whose skis are they? Bennie Thompson is the chairman. They think they're his skis. But that's a -- it's a question for another time.

I do want to ask the counselor, a lot of focus on the finances now. It was almost a footnote or an addendum to the entire hearing. Oh, and by the way, there was a big grift, they alleged. What is, in your mind, the potential illegality, if any, in what the committee is saying?

TEMKIN: Well, if you raise money from the public with misrepresentations, and you know that you're lying about how you're going to be using the money, that can be wire fraud. It can be mail fraud. It's prosecutable under, you know, any one of a number of federal crimes.

The question is -- is how do you prove each individual's knowledge and intent? So, it's not simply proving that a false statement went out on an email that, you know, was from Donald J. Trump or, you know, however they phrased the -- the send line.

The question is, is you know, how do you show who knew that those representations were made and how you show who knew those representations were false.

Do you start with the person at the bottom of the pyramid, you know, the person who actually drafts the emails? And then you have to work your way up to see who knew that, in fact, there was no fund. Who knew that there was no -- that the money was not going to be used for the purpose that people were being told it was being used.

JARRETT: The problem is we don't have full information here, right? The House has, you know, done yeoman's work, trying to get to the bottom of this.

And they showed that chart yesterday in sort of disturbing detail, how Mark Meadows' sort of pet project was being funded by, you know, some of these small donations. But I don't think they have a full scope of the picture of where all of the money went.

And I don't think we understand fully what all the disclaimers were. What did those in-laws actually look like, because a lot of this is actually still tied up in litigation.

The House drew a panel that perhaps wasn't as generous for them. And so, essentially, all of this has been put on hold in D.C., is my understanding.

Now, of course, all the disclaimers in the world -- AVLON: Yes.

JARRETT: -- are only going to help so much. And depending on exactly what the representation was. But the point is there's a lot there that I think still needs to be explored, to be able to say one way or not whether or not it's criminal.

AVLON: Sure, and look, the fidelity of the legal precision of the Trump Organization is not exactly the hallmark of how they operate.

What we do know, the standard you just laid out, is we asked who knew that these claims were fraudulent, not true. It seems like everybody knew inside the organization.

And while some of the disbursements we can't find, I've looked through this yesterday. You know, for example, Mark Meadows, charity doesn't -- isn't required to do a disclosure until this fall for what it received last year.

So there are some areas where just the structures of disclosures are going to make it difficult to know what was spent on what.

But we know that fundamentally, all these appeals to raise money, to saying this election was fraudulent, not only were those claims fraudulent, but the money doesn't seem to have been spent trying to uncover those claims.

BERMAN: Not exclusive.

JARRETT: But John, do they care? Do the people who donated care? I mean, when you confront them with the fact that all of this money was essentially going to all these other things, and if they actually knew that, would they say, Well, that's OK, because actually, I thought it was, you know, X, Y and Z?

[06:15:06]

I don't know whether the victims, so to speak here, care that this whole thing was a grift.

KEILAR: Does it matter if they care?

TEMKIN: No, it doesn't, legally. Legally. Because at the end of the day, the victim doesn't have to complain. But as a practical matter, if there are no victims, and people's credit cards were charged, not you know, Save America Fund but something else. You know, that's where the devil gets into the details.

AVLON: And if people are saying, Fleece me, you know, it's interesting to say that doesn't matter legally. But what we do know, for the people who have been arrested for the attack on the Capitol, one of the consistent defenses is Donald Trump. I believed him. I was lied to.

And that would indicate that, you know, we saw that in the committee's tapes yesterday. You know, the lies coming from the top filtered down into the voices of the people at the Capitol on January 6.

BERMAN: I will say, it's interesting that we've come this far in the discussion without mentioning the reporting that Kimberly Guilfoyle was paid --

AVLON: Yes.

BERMAN: -- $60,000 from this fund for a three-minute speech in -- on the day of the rally there. That's pretty good money.

Again, part of this could be -- and I'll put a question mark at the end of this -- that the committee is trying to embarrass Trump and the Trump campaign with its supporters, saying, This is where your money went. Does this now not shock you, that your money went to paying Kimberly Guilfoyle?

JARRETT: And you saw that at the end of the hearing yesterday. They tried to make this pivot. And the question is, who's the audience for this, right?

In earlier parts of the hearing, that -- that picture was sort of speaking to people who pretty much already brought into the facts. At the end of it, when you see sort of the videos of people who are clearly still repeating and repeating the echo chamber of these lies, you do sort of see them trying to, I think, make a pivot to say, You were duped here. Here's all the ways that you were duped.

The question, though, is are they listening?

KEILAR: Yes.

JARRETT: Are they affected by that? I understand that people who have been prosecuted now find it very helpful to say, Oh, actually, I was lied to. They were singing a different tune that day, and there are many, many of them who are still buying into the big lie.

KEILAR: It's -- it's such an important question. Will the trust actually be eroded, or is it steadfast? Well, so far, indications that it's steadfast. We'll see. Laura, Jeremy, John, thank you so much. We appreciate it.

Next, a bear market. Stocks sliding, 401(k)s getting hammered. Is this the bottom, or is there more pain ahead?

And the river, it keeps rising. All entrances at Yellowstone National Park closed for the next two days.

BERMAN: Those pictures are stunning.

(COMMERCIAL BREAK)

[06:22:17]

KEILAR: The S&P 500 has fallen into what investors call a bear market. Meanwhile, the bond market hit its biggest hike since the Lehman Brothers collapsed. And looming this week: an expected interest rate hike from the Fed, which will meet here in just days.

Joining us now, CNN chief business correspondent Christine Romans and CNN business correspondent Rahel Solomon with us.

What's happening here?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT/ANCHOR: There are so many superlatives, right? When you talk about the --

KEILAR: So many. ROMANS: You had me at Lehman crash, you know? That gets my attention. And this would be probably the biggest Fed rate hike since 1994.

So all of this, you know, big moves happening. We're shifting into an era of high inflation, higher interest rates and slower growth. And investors have been addicted to bigger returns on, you know, fast- growing tech stocks, for example, they have to rejigger their portfolios. And that is what you're seeing here.

The big thing, new thing over the past 24 hours, I think, is all this reporting that the Fed is likely to raise interest rates 75 basis points, not half a point when it meets this week. It meets today, tomorrow. We'll find out for sure tomorrow what it wants to do. Because it is behind the curve on inflation. It has to do more.

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: John, we spoke last Friday on this very set after Friday's CPI report about whether 75 basis points or three-quarters of a percent was on the table. And I said it didn't seem that way, because on Friday it didn't seem that way.

But so much has happened, and I think that has really happened since Friday, is that there's a feeling that the Fed may have to throw out its playbook. Fifty basis points was on the table for this week on Wednesday.

And we got that report on Friday that showed that inflation was not moderating. In fact, it appears to be accelerating. And so the Fed is going to have to do more.

And so, if we think about the impact of raising rates, right, it slows demands which is, by the way, exactly what they want. But the concern now is that the Fed will have to raise rates so much that it really sort of pumps the brake on the economy. And that's why we're seeing this massive selloff across major asset classes.

BERMAN: Just to put a finer point on that, what does it mean for everybody, average consumers, regular people, if the Fed does raise rates and if they raise it more than expected?

SOLOMON: Well, I mean, just look at the mortgage rates right now, right? I mean, they're closer to 6 percent.

At the beginning of this year, it was 3 percent. I was talking about this last week. And then it was, like, 5.3 percent. So it is spiking quite dramatically in a short period of time. So what it means is that, if you're in the market for a house right

now, your borrowing costs just went up pretty significantly from the beginning of the year. Everything becomes more expensive, which again -- which is exactly what the Fed wants, because it wants us to all stop spending so much. And it wants to us cool demand.

The issue, however, is if they overdo it, they might do a lot more than demand they could really sort of pump the brakes on the economy, and that's the concern.

KEILAR: Throwing out the playbook. Put this moment into context for us.

[06:25:02]

ROMANS: I think that's a really great point. Because we always are fighting the last crisis. I mean, it's something that, you know, Posnick (ph) was always criticized for after the last financial crisis. There wasn't enough money pumped into the system. And so it was a very slow recovery.

This time, we purpled a bunch of money into the system, and now there's some concern that on the margin, at least, that might have been a little bit inflationary.

This is a health crisis, and a hot land war in Europe crisis, and COVID shutdowns in China, the factory floor of the world crisis, and U.S. consumers coming out of two years, literally, of mass death and trying to get to a new normal.

I mean, all -- any one of these story lines would be absolutely unsettling for stock markets and for the global economy. And they have all been happening at once. So there really is no playbook here.

BERMAN: Can we talk about what's happening with crypto?

If you watched -- if you watched the Super Bowl --

ROMANS: I like that.

BERMAN: -- every third ad was about crypto. The hottest thig --

ROMANS: That should have been your sign at the top.

BERMAN: Well, huge drops in crypto. Why? And what does it tell us?

SOLOMON: Well, I think if you consider crypto a riskier asset, right, which I think even those who are sort of crypto supporters would say, that it's riskier than, you know, some stocks and bonds. Well, you're seeing that the riskiest assets are getting hit the hardest.

Because we're seeing a sort of -- a flock to a safer haven. Things that are more safe bets, right, in terms of value names, consumer names, like Kellogg, Coke, those sort of things.

So things that are risky right now are getting hit the hardest. People are sort of going with less risk and more value.

ROMANS: Things that make -- companies that make things that you can measure and assets that store value, that's what you want to be investing in.

I mean, crypto has become -- look, blockchain technology has -- could change the world. No question about the merits of that. But some of these crypto currencies are, essentially, speculative vehicles.

I mean, you've seen pump and dump schemes. Now you've seen some of these exchanges that are not allowing you to -- to unwind positions, or to sell positions.

So it's just not a very liquid place to be at the moment, especially when you're seeing, you know, all of this movement in every kind of asset class around the world.

We should talk about the bond market real quickly. I mean, bond yields up very sharply here. We haven't seen a move like this in a very long time. Again, telling you the Fed will continue to raise interest rates. And we're heading into a new era for investors and the economy.

BERMAN: Christine Romans and Rahel Solomon, I have a feeling we're going to see you again this week, the way things are going. Thank you both for being here.

So after rejecting Donald Trump's fraud claims, a January 6 witness describes what Trump supporters did next.

(BEGIN VIDEO CLIP)

AL SCHMIDT, FORMER PHILADELPHIA COMMISSIONER: The threats became much more specific, much more graphic. And it included --

(END VIDEO CLIP)

BERMAN: Al Schmidt joins us live.

KEILAR: Also, Ohio's governor signing a bill that will make it a lot easier to have teachers and staff armed in schools.

(COMMERCIAL BREAK)

[06:30:00]