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The Situation Room

Interview With Rep. Sean Patrick Maloney (D-NY); Former U.S. Ambassador to Ukraine Testifies; Trump Won't Say If Giuliani Is Still His Personal Lawyer; 100,000 Flee Los Angeles Wildfire Burning Out Of Control; Undercover Probe Exposes Illegal AR-15 Shop Where Felons Could Build Their Own Weapons Without Background Checks. Aired 6-7p ET

Aired October 11, 2019 - 18:00   ET

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

[18:00:00]

WOLF BLITZER, CNN HOST: More crucial testimony is in the works tonight, as the former U.S. ambassador to Ukraine appears before Congress and reportedly blames the president and Giuliani for pushing her out.

Lacking appeal. Impeachment investigators score a significant win against White House stonewalling -- an appeals court now clearing the way for lawmakers to see President Trump's tax returns.

And flames and fear. A fast-moving wildfire is raging out of control through Northern Los Angeles, 100,000 people under orders to evacuate. We will go live to this unfolding fire disaster.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news tonight, President Trump is refusing to say whether Rudy Giuliani is still his personal attorney.

We're told Mr. Trump is now expressing concerns about Giuliani after two of Giuliani's associates linked to the Ukraine standard were indicted.

This as the former U.S. ambassador to Ukraine has been testifying before impeachment investigators all day, in defiance of the Trump administration.

"The New York Times" reports that Marie Yovanovitch told lawmakers she was forced out by Mr. Trump and Giuliani, based on what she describes as unfounded and false claims.

Also breaking, the House Intelligence Committee chairman says the impeachment investigation is moving with new urgency, and zeroing in on the Ukraine scandal, with new testimony expected to be announced in the coming days.

I will get reaction from a congressman who heard the former ambassador's testimony. House Intelligence Committee member Sean Patrick Maloney is standing by, along with our correspondents and our analysts.

First, let's go to our White House correspondent, Kaitlan Collins.

Kaitlan, new evidence tonight that the president is clearly distancing himself from Rudy Giuliani.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Yes, Wolf.

And it comes just one day after news broke about those two associates of Rudy Giuliani's being arrested on campaign finance charges. And now the president's relationship with Rudy Giuliani, the man who has defended him through essentially it all for the last two years, is now coming into question.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't know. I haven't spoken to Rudy.

COLLINS (voice-over): Tonight, President Trump won't say if Rudy Giuliani is still his personal attorney.

TRUMP: Yes, I spoke to him yesterday briefly. He's a very good attorney, and he has been my attorney, yes, sure.

COLLINS: The president's refusal to defend his lawyer coming as CNN has learned he's now having doubts about the man who has spent the last two years defending him.

RUDY GIULIANI, ATTORNEY FOR PRESIDENT DONALD TRUMP: Everything I did was to defend my client.

COLLINS: But after two of his associates were arrested on campaign finance charges, there are growing concerns he's a political and potentially legal liability, questions Trump himself has raised privately.

QUESTION: Are you concerned that Rudy Giuliani may be indicted in all of this?

TRUMP: Well, I hope not. Again, I don't know how he knows these people.

QUESTION: They're his clients.

TRUMP: What?

QUESTION: They're his clients.

TRUMP: OK. Well, then, they're clients. I mean, you know, he's got a lot of clients.

COLLINS: Sources say Trump has concerns about Giuliani's involvement in the alleged crime of his two clients. Efforts to replace him as Trump's legal mouthpiece were already under way this week, but hit an unexpected snag.

TRUMP: I just heard Trey Gowdy can't start your sometime after January because of the lobbying rules and regulations.

COLLINS: That announcement prompted a sigh of relief from those inside the West Wing who didn't want the former congressman on team Trump, but not for those forced to defend his actions.

SEN. CORY GARDNER (R-CO): I have answered your question.

COLLINS: Like Cory Gardner, a vulnerable Republican senator from Colorado, who yesterday refused to answer whether it's appropriate to ask a foreign power to investigate your domestic rival.

QUESTION: You're not answering the question. We want to hear from you. You're a smart guy. You know the debate.

GARDNER: Look, this is about the politics of the moment.

COLLINS: As Trump's attorney looks to hire more lawyers, the president is serving as his own attack dog.

TRUMP: He was only a good vice president because he understood how to kiss Barack Obama's ass.

(CHEERING AND APPLAUSE)

COLLINS: Going after the Biden family in his most personal attacks yet in Minnesota Thursday night, turning the former vice president's son into a campaign prop.

TRUMP: Where's Hunter located? Get us -- where is Hunter? I want to see Hunter asked these questions. Hunter, you know nothing about energy. You know nothing about China. You know nothing about anything, frankly.

Hunter, you're a loser.

COLLINS: Today, Trump faced blows from Congress and the courts, after the former ambassador to Ukraine testified that he personally pushed for her removal.

TRUMP: She may be very much a wonderful woman. If you remember the phone call I had with the president, the new president, he didn't speak favorably. But I just don't know her. She may be a wonderful a woman.

[18:05:01]

COLLINS: On a day of legal setbacks for the president, ranging from his financial records to immigration, Trump brushed it off.

TRUMP: You know how many cases I have lost, and then we win?

(END VIDEOTAPE)

COLLINS: Now, Wolf, my colleague Mike Warren reached out to Rudy Giuliani after the president made those comments, asking him, is he still the president's personal attorney?

Rudy Giuliani texted back yes. But, of course, if you were listening to what the president was saying out there today, he didn't sound like he had a lot of confidence in him. And it actually mirrored comments that he's made in the past about his other attorneys, people like Michael Cohen.

BLITZER: Yes, it's pretty amazing, what's going on.

Kaitlan Collins, thank you very much.

Let's get some more on the congressional testimony by the former U.S. ambassador to Ukraine.

Our senior national correspondent, Alex Marquardt, is with us right now.

Marie Yovanovitch, Alex, she's been answering questions all day for hours and hours. And I understand it's still going on, despite efforts by the White House and the State Department, under orders from the White House. They didn't want her to appear.

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: That's right.

She's still answering those questions behind closed doors. She's expected to go for a little while longer. Wolf, what we have learned is that, last night, Ambassador Yovanovitch was told by her bosses at the State Department and the White House to not show up to testify today.

Now, that's according to the Democrats who are leading this impeachment inquiry, who were apparently ready for that move and then quickly issued a subpoena. So, Yovanovitch went up to Capitol Hill today, where she said there had been what she called a concerted campaign to get her fired.

(BEGIN VIDEOTAPE)

MARQUARDT (voice-over): Tonight, former U.S. Ambassador to Ukraine Marie Yovanovitch defying the Trump administration, appearing before lawmakers, after the State Department tried to block her testimony.

Yovanovitch responding to a subpoena by House Democratic leadership, leveling a stunning allegation, telling lawmakers, according to "The New York Times," she'd been removed from her post by President Trump because of "unfounded and false claims by people with clearly questionable motives," referring to efforts by the president's personal lawyer Rudy Giuliani.

"I do not know Mr. Giuliani's motives for attacking me," Yovanovitch wrote in her statement, adding, "but individuals who have been named in the press as contacts of Mr. Giuliani may well have believed that their personal financial ambitions were stymied by our anti-corruption in Ukraine."

The former ambassador talking about Lev Parnas and Igor Fruman, two of Giuliani's associates who were indicted yesterday for trying to use political contributions in order to get her fired. Yovanovitch was known for his anti-corruption work.

MARIE YOVANOVITCH, FORMER U.S. AMBASSADOR TO UKRAINE: The old oligarch system is still clinging to life, and corruption is its life support.

MARQUARDT: She also said in her opening statement: "The harm will come when bad actors in countries beyond Ukraine see how easy it is to use fiction and innuendo to manipulate our system."

SEN. ROBERT MENENDEZ (D-NJ): It is incredibly alarming that the secretary of state is not standing by our career people, incredibly alarming that she points out that private citizens -- in this case, Mr. Giuliani and others -- were having a shadow of diplomacy into Ukraine.

MARQUARDT: As the impeachment inquiry deepens, Yovanovitch is the latest in a string of key interviews. On Monday, former White House adviser Fiona Hill is set to testify, someone who had a pivotal role in the president's dealings with Ukraine, but who a source tells CNN will testify she was unaware of some aspects of the Ukraine scandal.

Also next week, E.U. Ambassador Gordon Sondland, who was blocked by the White House last from being deposed, he is expected to now show up under subpoena.

GORDON SONDLAND, U.S. AMBASSADOR TO THE EUROPEAN UNION: Well, President Trump has not only honored me with the job of being the U.S. ambassador to E.U., but he has also given me other special assignments, including Ukraine.

MARQUARDT: He was a top aide on Ukraine. Text messages show he was well aware of the president's desire for an investigation into Joe Biden and his son.

Of vital interest to the committees is Ambassador Bill Taylor, another career diplomat currently running the U.S. Embassy in Ukraine. He was clearly uncomfortable with the pressure being put on Ukraine by President Trump.

Texting Sondland: "Are we now saying that security assistance and White House meeting are conditioned on investigations?"

Sondland responded: "Call me."

Taylor has been asked to testify. It is unclear when that may happen or if the administration will try to block his testimony as well.

(END VIDEOTAPE) MARQUARDT: With Taylor, Sondland, and Yovanovitch, there are now three ambassadors who either are or may be going against the orders of their bosses to testify.

Now, we don't know what the consequences will be for them, what it will mean for their jobs. But, Wolf, Yovanovitch did not hold back today.

She said that, under President Trump, the State Department -- and these are her words -- has been attacked and hollowed out from within.

BLITZER: And she's been testifying for hours and hours.

All right, Alex, thank you very much.

Also tonight, a top impeachment investigator says the probe is moving forward with new urgency and more witness testimony is in the works.

Let's go to our senior congressional correspondent, Manu Raju. He's up on Capitol Hill.

[18:10:03]

Manu, what are you hearing about the impeachment inquiry?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, the House Intelligence Committee chairman, Adam Schiff, told his members both in a letter and in a private conference call today that this investigation is moving ahead.

He claimed there was a sense of urgency to get this investigation done. He also made clear that there will be more witnesses coming in beyond the ones that have already been announced for next week, suggesting also that more subpoenas could be coming as well.

Now, we are expecting, after today's hearing, which is still ongoing, the big hearing next week would be Gordon Sondland, the U.S. ambassador to the European Union, that he is expected to come despite the move by the State Department earlier this week to block his testimony.

So, Schiff and the -- Schiff subpoenaed him for his testimony. So that's expected. But also we're expecting on Monday Fiona Hill, the top Russia adviser for President Trump, who has since left the administration, is no longer bound by the administration's move to try to deny witnesses and testimony from coming to Capitol Hill.

Also, Wolf, the Democrats held a conference call today discussing the impeachment inquiry in the weeks ahead. And part of the discussion revolved around the political strategy.

And I'm told from sources on that call that the chairwoman of the Democratic Congressional Campaign Committee, Cheri Bustos, discussed polling that had been done in battleground districts across the state. She's suggested to her members to talk about impeachment related to corruption and related to abuse of power. Don't necessarily tie it, she suggested, to the Russia investigation.

Instead, talk about Ukraine as it relates to abuse of power and corruption in office.

And also, Nancy Pelosi, I'm told, said on the call that Democrats cannot afford to see this country turn into a monarchy. Those were her words. She also suggested that they need to do everything they can to, what she said, protect the Constitution.

So Democrats are preparing to come back after a two-week recess next week, and lots of questions about where they move forward on this impeachment inquiry. And you can hear from the Democratic leadership both privately and publicly they're plowing ahead, hoping to get this wrapped up as soon as Thanksgiving, if not sooner, and to move forward potentially articles of impeachment against the president, which, of course, would be only the third time in history a president would get impeached -- Wolf.

BLITZER: A very dramatic development, so these next few weeks are going to be critical.

Manu, thank you very much.

Joining us now, Congressman Sean Patrick Maloney, a Democratic who serves on the Intelligence Committee. That committee heard the testimony today from the former U.S. ambassador to Ukraine.

Congressman, thanks so much for joining us.

So what was your impression of Ambassador Yovanovitch's testimony?

REP. SEAN PATRICK MALONEY (D-NY): Well, I have to tell you, I just left the hearing room. I have been in there for about eight hours. It's wrapping up now.

I'm constrained by what I can tell you about the substance of her testimony. But what I want people to know is that Ambassador Yovanovitch gave a gripping and emotional account of presidential abuse of power.

And this is a good person who served for more than 30 years in the Foreign Service who was thrown to the wolves by Mr. Giuliani, who was representing the financial interests of his now indicted associates, and by President Trump, who was advancing his political interest in trying to get an investigation started in Ukraine of the Bidens.

She gave very compelling and very convincing testimony. And we owe her a great debt of gratitude.

BLITZER: Well, does this intensify, increase your desire to see the president of the United States impeached?

MALONEY: What it tells me is that every fact that comes out and every credible witness, like the ambassador, who comes forward courageously, corroborates the core facts that paint a very devastating picture of abuse of power. And, honestly, it breaks my heart, Wolf. I have said that to you

before. It breaks my heart that an American president and his confederates would engage in this kind of venal and self-serving activity, putting at risk our national security and the interests of a strategic partner like Ukraine.

It's a sad day, when you hear that that's what your presidents been up to. So it steels our resolve to get to the facts, to get the truth out, and to make sure that no one is above the law, that there be accountability for this conduct.

BLITZER: Well, so, clearly, you believe what she said. How credible was her testimony?

MALONEY: I think she was very credible.

I think the Republicans in the room also credited her with being credible and being patriotic. I have to tell you, I think she's a very credible witness.

BLITZER: Did she point to other officials or documentation that potentially could corroborate her account?

MALONEY: Well, there are obviously other officials at the State Department who were involved in the events that she experienced.

Some of them are already slated to be interviewed by the committee. There are obviously critical people that we now know more about, some of whom have been indicted, Mr. Parnas, Mr. Fruman. We need to know more about Mr. Giuliani's role in all this, which looks worse and worse with every passing day.

[18:15:00]

Again, the whistle-blower complaint is the road map for this investigation. And the ambassador's testimony was a critical piece of that and a very credible one.

BLITZER: Did she say anything specific about efforts to investigate Joe Biden?

MALONEY: You know, I'm not going to get into the substance of her testimony.

But what I can tell you is what's clear to me. What's clear to me is that, when Mr. Giuliani showed up, representing the interests of now indicted private citizens who were trying to make money, and representing the political interests of the president, who was trying to gin up an investigation against the Bidens, that's when she had to be removed.

They had to get her out of the way. And that is the key thing to understanding her role. She was a good person doing her job. She was there to advance the American bipartisan policy of standing up a market economy, a rules-based society in Ukraine free from corruption. And she had to be removed, so that the grubby financial interests and the seedy political interests of Mr. Trump and Mr. Giuliani's indicted associates could be advanced.

BLITZER: The White House, as you know, tried to block her testimony today. She only showed up because she was compelled by your subpoena at the last minute.

Did she seem eager to share her story? Was she somewhat reluctant to talk? What was your impression?

MALONEY: I think you have to understand this is a person who spent decades of her life working as a very qualified and a very dedicated Foreign Service officer. She was our ambassador to Ukraine.

It's worth knowing that the State Department wanted to extend her tenure in Ukraine. She was a real -- a real superstar in her profession.

And this series of events, which is not her fault, has left her questioning, I think, what kind of values we have in this country. It certainly makes me question what kind of values are at work in the White House and in the minds of people like Mr. Giuliani.

This is a good person who got thrown to the wolves by this president.

BLITZER: She's a career diplomat spending more than 30 years in the State Department as a Foreign Service officer, served as a U.S. ambassador to several countries.

She's now back, was recalled to Washington. Are there concerns she could be fired, she could lose her pension, stuff like that?

MALONEY: You know, they have already done quite a bit to her. I think she's a pretty tough person. They have already taken their best swing at her.

But, yes, she remains an employee of the State Department. We should make sure that she doesn't suffer further retribution. This crowd in the White House has already done enough harm to this person. They should leave her alone. She's trying to do her job, as she has always done, and her duty as a patriotic person, who served the country well.

And she's telling the truth, and she's credible. And she should not be penalized for that.

BLITZER: Congressman Sean Patrick Maloney, thanks so much for joining us.

MALONEY: My pleasure.

BLITZER: All right, the breaking news continues next.

Multiple legal setbacks for President Trump on this day, and as his administration loses five -- five court battles in one day.

Plus, more on the impeachment inquiry, testimony of the ousted U.S. ambassador to Ukraine. How damaging are her words?

(COMMERCIAL BREAK)

[18:22:58]

BLITZER: We're following a lot of breaking news, President Trump now refusing to say whether Rudy Giuliani is still his personal attorney.

And the former U.S. ambassador to Ukraine, Marie Yovanovitch, reportedly has told lawmakers she was forced out by Mr. Trump and Rudy Giuliani, based on what she described as unfounded and false claims.

Let's bring in our analysts to discuss.

Susan, how damning is her testimony today? It's been going on for hours, and it's still going on.

SUSAN HENNESSEY, CNN LEGAL ANALYST: I think it's potentially quite damning, in part because it goes to the question of the president's personal involvement.

Now, the president is allowed to appoint his own ambassadors, and so he's allowed to recall them. What is damning here is the reasons for which she was fired.

The ambassador was clearly pursuing the stated U.S. interest of supporting Ukraine against the Russian occupation. That's a stated U.S. policy that the White House claimed to endorse, that Republicans and Democrats claimed to be endorsing.

And so the fact that she was essentially fired for pursuing U.S. policy, I think, really demonstrates that the policy that Donald Trump was advocating for was not in the national interest. It was about pursuing his own personal political interests.

If he was really interested in having Ukraine crack down on corruption in some legitimate sense, he could have gone through his own State Department. He could have gone through the ambassador. Instead, he wanted someone to facilitate Rudy Giuliani,'s freelancing and clearly this abusive use of office, attempting to extort a foreign leader to essentially becoming his campaign's opposition researchers.

And so I do think that it adds a substantial amount of evidence to the full picture here.

BLITZER: Very important.

Jim Baker, the former FBI general counsel, the ambassador, Ambassador Yovanovitch, testified.

And I will read her words, that Giuliani's associates, these two guys who were indicted yesterday, Lev Parnas and Igor Fruman -- quote -- "may well have believed that their personal financial ambitions were stymied by our anti-corruption policy in Ukraine."

Was President Trump potentially unwittingly aligning American foreign policy to benefit these Giuliani associates?

JIM BAKER, CNN LEGAL ANALYST: Well, the allegations in the indictment seem to indicate at least that that's what they were doing.

[18:25:03]

Whether the president knew it -- I mean, I was thinking of the old question from Watergate. What did the president know and when did he know it? And proving intent is often challenging in these complicated cases, in fraud cases, corruption cases like this.

And so that's what I expect everybody's going to be trying to dig into, the prosecutors, as well as Congress, asking questions of witnesses who may know, looking for documents, looking for text messages that might indicate that, Giuliani saying something like that.

That may be what they're looking for.

BLITZER: As you know, Sabrina, the administration made a last-ditch effort to prevent Ambassador Yovanovitch from testifying today.

The House Intelligence Committee had to issue a last-minute subpoena. She showed up and she's been speaking now for hours.

What does it tell you that this process is now moving forward?

SABRINA SIDDIQUI, CNN POLITICAL ANALYST: Well, it's striking just how quickly this process is moving forward. And Democrats are so far having a fair amount more success with respect to getting key witnesses to appear on Capitol Hill and testify before members of Congress.

It certainly stands in contrast to the Russia investigation and the stonewalling on the part of the administration when Democrats were trying to investigate one of many of the allegations that were laid out in the report.

And I think part of that is because, unlike the Russia investigation, when Democrats were dealing with a lot of members of Trump's inner circle, this involves many career diplomats, who are not bound by any loyalty to the president, but more -- it seems more driven by a desire to do their own public -- their civil servant duty.

And I think, when you look at someone like Yovanovitch, she's someone who served under three different presidents in various ambassadorships. She clearly told her side of the story before members of Congress, feeling pressured, ousted from her role because she wasn't part of this pressure campaign by the administration toward Ukraine.

There's also Gordon Sondland, who's poised to appear next here. He's another central witness. So I think the Trump administration is worried about the willingness for many of these key witnesses to appear before these committees on Capitol Hill.

BLITZER: Yes, Gordon Sondland, the U.S. ambassador to the E.U., the European Union.

He and others -- we have got some images. We want to put them up on the screen. At least four administration officials, Mark Mazzetti, are expected to appear next week. We will see if the administration lets them, a former Russia adviser, the State Department deputy assistant secretary, the U.S. ambassador to the E.U., and the State Department counselor.

MARK MAZZETTI, CNN NATIONAL SECURITY ANALYST: Yes.

And I think it may be a case-by-case basis who actually we see. I think Fiona Hill is very likely.

BLITZER: She is the Russia adviser.

MAZZETTI: The Russia adviser.

BLITZER: She's a former adviser.

MAZZETTI: Former.

And, remember, she's quite a central figure here, because she was sort of helping formulate Russia policy from the very beginning of the Trump administration. She left in August, throughout the sort of tumult of the of the Mueller investigation. So she knows a great deal.

They can provide a lot of context -- also Gordon Sondland -- about the formulation of Ukraine policy, the back and forth. Remember the text messages that came out a week ago questioning whether, are we really formulating policy -- we're holding up aid to advance a political agenda?

I mean, these are questions people want to know. And some of the pieces came into place a little bit this week with the indictment of the Giuliani associates. Exactly who was on the ground carrying out this effort to dig up dirt?

Now we're going to get more of the context of what was happening back in Washington in formulating the policy.

BLITZER: Everybody, stick around. There's a lot more we're following, lots of breaking news on this day.

We will be right back.

(COMMERCIAL BREAK)

[18:30:00]

WOLF BLITZER, CNN THE SITUATION ROOM: We're back with our experts. We're following the breaking news.

Susan Hennessey, the president, for a second day in a row now, seems to be trying to distance himself from his long-time personal attorney, Rudy Giuliani. Watch this exchange he had as he was leaving the White House earlier just a little while ago with our own Pamela Brown. Listen to her question and his answer.

(BEGIN VIDEO CLIP)

REPORTER: Is Rudy Giuliani still your personal attorney?

DONALD TRUMP, U.S. PRESIDENT: Well, I don't know. I haven't spoken to Rudy. I spoke to him yesterday briefly. He's a very good attorney and he has been my attorney. Yes, sure.

(END VIDEO CLIP)

BLITZER: The question, if you couldn't hear, was, is Rudy Giuliani still your attorney? Well, I don't know. That's what the president said. Giuliani, since then, has been texting reporters, including our own Michael Warren, that he still is the president's personal attorney, but not exactly a vote of confidence from the president.

SUSAN HENNESSEY, CNN NATIONAL SECURITY AND LEGAL ANALYST: Yes. So this is the president reverting back to his very familiar playbook of whenever he finds people who are very close to him in trouble, suddenly, he tries to distance himself, pretend that he doesn't know people, that he didn't have this relationship.

Now, there is one thing that is a little bit peculiar about Trump choosing this particular moment to basically say, well, maybe Rudy Giuliani is my lawyer, maybe he isn't. And that's what Rudy Giuliani is claiming in part attorney-client privilege as a reason for not cooperating with congressional investigators.

Now, there were already serious questions about whether or not Rudy Giuliani was genuinely acting as the president's attorney and whether or not those conversations and communications were privileged. This statement from the president is only going to make those arguments stronger on Congress' part, saying, no, Rudy Giuliani was not the president's lawyer or certainly is not the president's lawyer anymore and he does need to come to Congress and tell us all that he needs to know.

BLITZER: Legally -- yes, I was going to ask Jim, hold on one second. Legally, what's the fallout from the president saying I don't know if he's my lawyer?

JIM BAKER, CNN LEGAL ANALYST: It's pretty significant potentially for the reasons that Susan said. It also could animate Giuliani to sort of like rethink his strategy with hopefully his attorney -- I can't remember if he has his own personal attorney, I assume he does. If he doesn't, he should. But to rethink like what am I doing here, what's my exposure, because he, unlike the president, can be indicted for these crimes. And so he's going to have to think about what his own personal interests are and sort those out with his own legal --

[18:35:001]

BLITZER: Because a sitting president, according to the guidelines from the Justice Department, can't be indicted. Go ahead. SABRINA SIDDIQUI, CNN LEGAL ANALYST: This is the exact strategy the president sought to employ with his former personal attorney, Michael Cohen, when he was facing questions over the hush money paid to a number of women who alleged to having an affair with the president.

He first indicated that all of those questions should be directed to Michael Cohen. When it became clear that the president's narrative was shifting, he distanced himself from Cohen, especially as Cohen began to cooperate with investigators.

Now, the difference, of course, here is that while with the Stormy Daniels case, the prosecutors were relying on Cohen's testimony of conversations he had privately with the president. With respect to Rudy Giuliani, there is a transcript or a summary of a call in which the president is repeatedly invoking Rudy Giuliani himself and offering Rudy Giuliani's assistance in his capacity as the president's personal attorney to Ukrainian leaders if they open up an investigation into former Vice President Joe Biden and his son.

So it's very difficult for the president to pretend that he barely knows Rudy Giuliani or that Rudy Giuliani was acting of his own volition.

BLITZER: Mark, how much trouble potentially is Rudy Giuliani in right now?

MARK MAZZETTI, CNN NATIONAL SECURITY ANALYST: Well, there's been a lot of reports of scrutiny of Giuliani's finances. Of course, his long-time associates with the two people who were indicted yesterday doesn't help matters. And, clearly, there's an indication that this investigation, well, they said it yesterday, it's ongoing, it's barter. They're going to talk to these two individuals, Parnas and Fruman, and perhaps like go up higher on the chain to find out who directed them, why, how high this went.

So, clearly, it seems that Giuliani is under a great deal of scrutiny and this is going to be scrutiny and trouble for him for some time.

HENNESSEY: And one thing that Giuliani has made clear is that part of his strategy is tying himself to the president, holding up his phone saying he was acting at the direction and in coordination with the State Department. And so to the extent Trump might want to distance himself from Giuliani, Giuliani is not interested in distancing himself from Trump. He's going to take them all down with them.

BLITZER: Everybody stick around. There's more breaking news. We're following dangerous wildfires fanned by hot dry winds, threatening thousands of homes in Los Angeles and forcing thousands of people to flee.

(COMMERCIAL BREAK)

[18:40:00]

BLITZER: We have breaking news in Los Angeles, a wildfire burning out of control in the northern part of the city. Thousands of acres have burned, and tonight, about 100,000 people have been forced to evacuate.

Our National Correspondent Sara Sidner is there for us. Sara, fire crews, I understand, they are struggling now to get the upper hand on this fire.

SARA SIDNER, CNN NATIONAL CORRESPONDENT: Yes, it's true. In this neighborhood, the winds died down a bit and you can see that they were able to save all the other homes but one here in this Porter Ranch neighborhood.

We should mention again, 100,000 people forced to evacuate from this particular fire. We are now learning there is another fire that has just picked up again. This is the third fire in 24 hours that firefighters are being forced to fight. We're talking about a thousand or so firefighters for this particular fire. They are dropping things from the air. They are on the ground trying to make sure that the fire does not get into neighborhoods. So far, about two dozen homes have been lost according to the fire chief.

We should also mention what it looked like last night. It was an incredible scene, an inferno, really, as you looked at some of the neighborhoods, especially here in Porter Ranch and watched those flames as firefighters tried to keep them out of the areas where there were homes and try to keep them and battle them, and they are still doing that at this hour.

There are so many residents who are trying to come back, trying to see what their homes looked like. We had noticed that some of those residents came up to see that their home had been burned to the ground.

Again, 25 homes lost. We now know that there are at least three people who have died in two separate fires, one that ended overnight and was stomped out. This one is still very much alive.

There are about 1,000, again, firefighters who are fighting this and there are about 7,500 acres that are on fire. Wolf?

BLITZER: Awful situation. Sara Sidner, thanks for that report.

Just ahead, we're going to take you inside an unlicensed do it yourself assault style weapons factory where felons can get weapons without background checks.

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[18:48:54]

WOLF BLITZER, CNN HOST: Tonight, a CNN exclusive on an undercover investigation into an illegal assault-style weapons factory. Felons were able to build their own untraceable weapons and parts without undergoing any background checks.

CNN senior investigative correspondent Drew Griffin is joining us right now.

Drew, the details of this operation are so disturbing. So, why are federal prosecutors dropping the case?

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Wolf, our investigation found this case once touted by prosecutors as a crack down on an illicit AR-style weapons factory is now seen as having the potential to pave the way to unfettered access to one of the most demonized guns in America.

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GRIFFIN (voice-over): It went on for more than a year, captured in these undercover ATF videos. Anyone off the street, including more than two dozen people banned from owning a gun came into Joseph Roh's machine shop outside Los Angeles to make one. This is Roh confirming to undercover agents what they knew was about to happen.

JOSEPH ROH: Are you here to do -- make yourself a rifle right now?

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Is that what you're here to do?

AGENT: Yes.

ROH: OK.

GRIFFIN: Roh was operating an unlicensed do it yourself assault-style weapons factor where customers could assemble AR-15s of $1,000 a piece or make their own AR-15 parts by pushing a button on his machine, no background checks performed.

ROH: Go ahead and press the green button.

AGENT: The green button?

ROH: Yes.

That basically means that you did it. Believe it or not.

GRIFFIN: He was warned by agents from the ATF he was breaking the law. He kept doing it, was raided, indicted and if convicted, could have been on his way to prison.

But in a strange legal turn of events, the judge wrote a tentative ruling suggesting Roh was right all along and he didn't need a license to manufacture a key component of an AR-15. It came down to what does and does not constitute the manufacturing of a firearm and whether this highlighted part of an AR-15, the lower receiver is legally regulated.

The ATF had long considered the part a firearm but the judge agreed with Roh's defense and determined it was not. Federal prosecutors worried in writing that if this case continued and the judge's ruling became final, it would seriously undermine the ATF's ability to trace and regulate firearms nationwide.

UCLA law professor Adam Winkler says the ruling could jeopardize future prosecutions.

ADAM WINKLER, UCLA AW PROFESSOR: This ruling could make it so that anyone could manufacture and sell these key component parts of an AR- 15 to anyone without a serial number and without a background check. It could lead to an explosion in the number of AR-15s out on the street.

GRIFFIN: To prevent the judge's words from becoming case law, the government cut a deal. Even though Joseph Roh admitted illegally selling assembled AR-15s, he could go free and the entire case would go away if Roh shut down the business and obeyed the law for a year.

Gregory Nicolaysen is Roh's attorney.

GREGORY NICOLAYSEN, DEFENSE ATTORNEY: The ATF had been proceeding in a way that was illegal. The agency was arbitrarily rewriting rules.

GRIFFIN: Federal prosecutors argued the intent of the law was to keep firings out of the hands of those not legally entitled to possess them. And that the ATF's interpretation supported that.

Nicolaysen took a government deal, but considers his client a victim whose on customers included police officers, and law abiding citizens who just like making guns.

(on camera): But again, there were customers he didn't know who bought parts, who made guns, who had no background checks.

NICOLAYSEN: That is true too.

GRIFFIN (voice-over): Among Roh's clients, 19 convicted felons, six domestic abusers, one customer even admitted trafficking guns into Mexico and it turns out one more dangerous customer of Joseph Roh's do-it-yourself AR-15 business.

REPORTER: The college still very much a huge scene, a crime scene.

GRIFFIN: On June 7, 2013, a mass shooting took place in Santa Monica, California. A 23-year-old who had once been hospitalized from mental health and later prohibited from purchasing a gun used an AR-15 rifle killing people before being shot and killed by police. A receipt shows just five months before the shooting, the killer purchased major part of an AR-15 from Joseph Roh's business. Though Roh's attorney says it was never substantiated, ATF agents believe the killer used that part to build the gun used in the shooting.

MARGARET QUINONES-PEREZ, RELATIVE OF SHOOTING VICTIMS: There has to be accountability.

GRIFFIN: Margaret Quinones Perez lost her niece and brother-in-law in the shooting. She doesn't accept Roh's defense that he was only selling parts of a gun.

QUINONES-PEREZ: You can call it a business. You can call it a parts company. You can call it whatever it is, but I can look at the man in the face and say, you were part of a killing. I don't care what percentage it was. You facilitated the killing of my family.

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GRIFFIN: Believe it or not, Wolf, barring any further run-ins with the law, in June of next year, Joseph Roh's record is going to be wiped clean. The case legally will disappear. This case itself, yet another example of how the ATF is stymied by these vague federal gun laws and the inability to get any of them changed -- Wolf.

BLITZER: Excellent reporting. Thanks so much for doing that.

Drew Griffin on the scene for us, thank you very much.

We're going to have much more news right after this.

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BLITZER: Finally tonight, we pay tribute to the longest serving executive producer of THE SITUATION ROOM.

Jay Shaylor has been at the helm of this program for six years. Jay is not only an excellent journalist with tremendous vision, curiosity and passion for the news, he's been a very strong leader and cheerleader for our team and our show. He's a very dear friend. Jay is moving onto great new job opportunity and, of course, we're happy for him, but he will be sorely missed.

Jay Shaylor made this newscast better and he made all of us better journalists. We're grateful for everything he's done for us on the air and behind the scenes. And we wish him, of course, only the best for him and his wonderful family as he moves on. Thank you, Jay.

"ERIN BURNETT OUTFRONT" starts right now.

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