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The Situation Room

New York AG Letitia James Indicted; Consumer Sentiment Edges Lower for Early October; Russia Targets Ukrainian Energy Sites; Government Shutdown Enters Day 10. Aired 10:30-11a ET

Aired October 10, 2025 - 10:30   ET

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

[10:30:00]

PAMELA BROWN, CNN ANCHOR: Happening now, just weeks after former FBI Director James Comey's indictment, President Trump is turning up the heat on another perceived enemy. You heard me talking about this with Congressman Bacon.

A federal grand jury has indicted New York Attorney General Letitia James in a mortgage fraud case after Trump publicly demanded that she be charged. CNN's Kara Scannell is in New York. Kara, tell us more about these charges, how often DOJ prosecutes in cases like this, and how James is responding.

KARA SCANNELL, CNN CORRESPONDENT: Good morning, Pam. Yes, this is an unusual indictment since it is focused on one mortgage and the size of the mortgage at issue here. So, Letitia James has been indicted on two federal charges, one of bank fraud, one of making misstatements to a financial institution. And this all centers around a loan that she took out in 2020.

Now, according to the indictment, this was a loan for a second home, but prosecutors allege James had rented out the property, and therefore the loan should have been taken out as an investment property. They say by treating it as a second home, she received a benefit in the form of lower interest rates. And so, in total, they say that she benefited by $18,933. Now, James' team has pushed back on this. They're saying that, you know, this is -- she flatly denies any wrongdoing. And Letitia James herself spoke on a video after these charges were announced. Here's what she said.

(BEGIN VIDEO CLIP)

LETITIA JAMES (D), NEW YORK ATTORNEY GENERAL: This is nothing more than a continuation of the president's desperate weaponization of our justice system. He is forcing federal law enforcement agencies to do his bidding. All because I did my job as the New York state attorney general. These charges are baseless. And the president's own public statements make clear that his only goal is political retribution at any cost.

(END VIDEO CLIP)

SCANNELL: And Pam, as you know, there is a longstanding history between James and Trump. She campaigned on saying that she was going to investigate him, brought those civil fraud charges, alleging that he got better interest rates on loans because he inflated his net worth. Trump then has been on a tear against her since he was facing that civil lawsuit. And he was pressuring his U.S. Justice Department to bring these charges. As we reported just a few weeks ago, the prosecutors looking at this did not think they had enough evidence. That U.S. attorney resigned and Trump replaced him with his handpicked successor. She brought this case before the grand jury. Pam.

BROWN: All right. Kara Scannell in New York. Thanks so much. And let's discuss this with former federal prosecutor Berit Berger. Hi, Berit. So, on the campaign trail, President Trump promised retribution for his political opponents. Is that what these charges are or do you think that they have merit?

BERIT BERGER, FORMER FEDERAL PROSECUTOR: Well, we'll have to see if they have merit. That's up to a judge and jury to decide later on. What we do know is that these were certainly people who the president had chosen the defendant first before he knew what the crimes were.

So, usually in the Justice Department, you would find out what a crime is, then figure out who the defendant is. That's usually the general trajectory of criminal prosecutions. What's unusual about this situation is it feels like the president picked the defendants and then essentially ordered his Justice Department find the crime, I've already chosen the defendants.

BROWN: So, the indictment accuses James of falsely claiming and loan documents that she would use a home. She purchased in Virginia as a second residence that allowed her then to get a better interest rate. Instead, they say she used this home as a rental property. Put this into context for us. How often would DOJ prosecute a case like this?

BERGER: So, bank fraud or what we consider mortgage fraud type cases are very common. They are, you know, something that most U.S. attorney's offices around the country do on a routine basis. What's different about this case is it is involving a very small amount of money, right? We're talking, you know, almost $19,000. This is not the kind of case that most U.S. attorney's offices are bringing.

Usually they're looking for, you know, mortgage schemes or things that involve a much higher monetary threshold. What jumps out at me is not the fact that it's a mortgage fraud case, but the amount.

BROWN: And, you know, you have to put this into the broader context of that now deleted post that Trump made on his Truth Social account, where he urged his attorney, General Pam Bondi, to prosecute his political enemies without delay. Administration officials told The Wall Street Journal this week that was meant to be a private message. How do you think that factors into what a judge or jury decides in this case?

[10:35:00]

BERGER: Yes. I mean, it's kind of scary that that was supposed to be a private message because had it not been for, you know, the error that allegedly he made in making this public we would never know. I mean, yes, the president has been very open about his desire to go after these political enemies, but the fact that he made this direct order to the attorney general, you know, we all thought, oh, at least he's being, you know, open about the corruption, but the fact that this was supposed to be a private message is a little terrifying because, you know, how would the public have known that but for this error?

I think this will definitely play into a defense. We've talked about this with respect to James Comey. His lawyers were very open in court about the fact that they were going to file vindictive or selective prosecution motions. I imagine James will have the exact same type of motions. That post, whether it was supposed to be public or private, will certainly open the door to even more discovery, I would imagine, which could help bolster that that case.

Again, remember, the merit of one of these vindictive or selective prosecution motions has nothing to do with the underlying crime. So, even assuming in the worst-case scenario that James is guilty of this mortgage fraud, if a judge finds that there -- you know, she was targeted for this prosecution for improper motives, the case can still be dismissed, even if she was ultimately guilty of the crime.

BROWN: Interesting. All right. Former federal prosecutor Berit Berger, thank you so much. And just ahead right here in the Situation Room, a big Thursday night upset. The New York Giants take down the defending Super Bowl champs. How a couple of rookies made it happen.

(COMMERCIAL BREAK)

[10:40:00]

BROWN: Breaking news, U.S. consumer sentiment edged a hair lower early this month from near record lows. A report by the University of Michigan reveals the index dropped .2 percent in the beginning of October. Yet despite the outlook, people are still spending.

Let's go live now to CNN Business and Politics correspondent Vanessa Yurkevich, in New York. So, Vanessa, what does this signal about the economy?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, this report from the University of Michigan really signals that the U.S. economy is still not working for many Americans out there. As you mentioned, just a slight decline down .2 percent, not those double- digit drops that we saw earlier in the year when President Trump initially announced those sweeping tariffs.

But look at that year-over-year change. Sentiment has fallen year- over-year 22 percent. And then on the left-hand side of your screen, if you look at 55, that might not mean a lot to people out there, but that is the seventh weakest reading of consumer sentiment since World War II. So, still a long way to claw back in terms of how people are feeling.

Some improvements that we saw in this report were people were feeling a little bit better about their current personal finances. That's maybe why you have seen people still spending in this economy. But that was really offset by declines in future personal finances. Also, people concerned about prices, prices of goods, and then concerns about a weakening labor market.

Pamela, in this report, it covers really the first few days of October. That is also when the government shutdown started. In this report, we really didn't see anybody or any Americans talking about how they were concerned about the shutdown as it relates to the economy. But, Pamela, usually we do report and follow these consumer trends and these consumer sentiment surveys, but maybe we're paying a little bit closer attention now because we don't have any other data. The government is shut down, and we're not getting those key reports like the jobs report.

This is a good lens into how consumers may be feeling in the real time about the jobs market, about prices, when we don't have any other data to go off of, Pamela.

BROWN: We'll take what we can get right now. Vanessa Yurkevich, thank you so much. Coming up right here in the Situation Room, Russian airstrikes plunge part of the Ukrainian capital into darkness as Vladimir Putin appears to be using a tactic he has used before.

(COMMERCIAL BREAK)

[10:45:00]

BROWN: It's a rough day for Philly sports fans. Their season came to an end in a loss that stings, not just for how close they came, but for how it ended. CNN Sports Anchor Andy Scholes joins us now. Andy, you've got to feel for that young Phillies pitcher. I was watching this game with my family last night. Wow.

ANDY SCHOLES, CNN SPORTS ANCHOR: Yes, just a shocking ending to that series, right, Pam? And what a brutal, stressful night it was for Philly fans. You know, they had the Phillies and Eagles playing at the same time, and both of them, I'm sure, costing Philly fans to lose some sleep last night. Someone check on Jake Tapper today. I hope he's doing OK.

BROWN: Yes.

SCHOLES: But yes, it's going to take a while for Philly fans to get over game 4 against the Dodgers. So, pick it up, bottom of the 11th, two outs, bases loaded for L.A. Andy Paez is going to hit this one right back to the pitcher. And Orion Kerkering, instead of taking the easy out at first, for some reason fires it home, but he air mails it. Dodgers win 2-1. But take another look. Even catcher J.T. Realmuto was pointing, throw it to first. This is the second time in postseason history a series has ended on a walk-off error. Kerkering, after the game, was just blaming himself for the loss.

(BEGIN VIDEO CLIP)

ORION KERKERING, PHILADELPHIA PHILLIES PITCHER: Just hit it off my foot. Just kind of -- once the pressure got to me, I just thought it was a faster throw to J.T., a little quicker throw than trying to cross-body it to Bryce. So, you know, just poor --

ROB THOMPSON, PHILADELPHIA PHILLIES MANAGER: I feel for him, because he's putting it all on his shoulders. But we win as a team and we lose as a team.

(END VIDEO CLIP)

SCHOLES: All right. So, with the Eagles' help softening the blow of that Phillies' devastating loss, the answer was no. The Giants' defense shutting out Jalen Hurts and that Eagles' offense in the second half. And then what a night it was for the Giants' rookies. Quarterback Jaxson Dart and running back Cam Skattebo. Dart ran for and threw a touchdown, while Skattebo, he had three rushing touchdowns in the game. The Giants would end up winning 34-17, handing the Eagles back-to-back losses for the first time since 2023.

All right. And finally, beloved longtime team chaplain for Chicago Loyola men's basketball team, Sister Jean has passed away. She rose to fame during the Ramblers' Cinderella run to the Final Four back in 2018. School president Mark Reed said in a statement, in many roles at Loyola over the course of more than 60 years, Sister Jean was an invaluable source of wisdom and grace for generations of students, faculty, and staff. Sister Jean had retired from her role last month, citing health concerns. She was 106 years old.

[10:50:00]

BROWN: Wow.

SCHOLES: And Pam, I got the chance to meet Sister Jean during that 2018 run. She was just such an incredible person. Always had an answer with a smile. Always had wisdom. She said, you know, she had the three W's, you know, eat well, sleep well, pray well. And that's one of the secrets to a long life. And she's one who could give you that advice getting to 106, right?

BROWN: She is a testament. Yes. What a life she lived. Wow. May her memory be a blessing. All right. Andy Scholes, thanks so much. Good to see you.

SCHOLES: Good to see you.

BROWN: We'll be right back.

(COMMERCIAL BREAK)

[10:55:00]

BROWN: Well, this just in, House Speaker Mike Johnson is escalating his rhetoric against Democrats as the government shutdown is now and it's 10th day.

(BEGIN VIDEO CLIP)

REP. MIKE JOHNSON (R-LA), HOUSE SPEAKER: We sent over a totally clean measure that they had already voted for before. In fact, that Chuck Schumer gave impassioned speeches as recently as March of this year. The same instrument, the same one that he said was the right thing to do and that it must be done. So, Americans don't feel harm. He said that earlier this year. So, we sent him the same instrument, assuming, hoping, of course, believing that they would do what has always been done here and pass a clean CR. And they didn't. So, I don't have anything to negotiate. There's nothing more for me to do. I literally don't have a card that I can take off the deck because we did it all in good faith.

They're the ones politicizing this. They're trying to play a game. We're not engaging in a game. We're trying to get the government open again so that people can be served. And it's plain and simple.

(END VIDEO CLIP)

BROWN: All right. So, let's discuss this with a key member of the House Intelligence and Armed Services Committee, Democratic Congressman Jason Crow of Colorado. Thanks for coming on. So, how do you respond to what we just heard from the House Speaker accusing Democrats of playing games by not voting for a clean short-term funding bill?

REP. JASON CROW (D-CO), INTELLIGENCE COMMITTEE AND ARMED SERVICES COMMITTEE: Well, I don't really care what Speaker Johnson has to say, Pamela. I'm more interested in what he's willing to do. We haven't been in session in Congress for weeks. He literally has shut down the House of Representatives. So, it's pretty hard to debate. It's pretty hard to negotiate. It's pretty hard to even vote on things.

Bring Congress back. Bring us back. Open up the doors. They are literally locked right now. Bring us back into the House so we can actually work hard to get this done. That's number one.

Number two, he talks about, you know, a clean instrument, a clean bill. Has Mike Johnson paid any attention to what Donald Trump has been doing the last nine months? Right? They just want everybody to ignore the fact that Donald Trump is politicizing and weaponizing the DOJ, that he's indicting his political opponents, that he's sending troops into American cities to, quote/unquote, "go to war" with Americans, that he is devastating health care for tens of millions of Americans, that they are risking doubling insurance costs, monthly insurance costs for tens of millions of Americans, and yet, he wants to say it's a clean bill. Give me a break.

BROWN: So, then what is it about to you? Is it about the ACA subsidies or is it about Donald Trump and what he's been doing?

CROW: It's about all of those things. It's about American health care. I am not going to support it. I'm not going to give a blank check to this administration to double the insurance costs of my constituents and to actually completely cut off insurance coverage for hundreds of thousands of them, nor am I going to give a blank check to an administration that has in the last nine months repeatedly ignored Congress, that has taken money that's been appropriated for very specific purposes and said, you know what, we're going to spend the money exactly how we want to spend the money, and Congress can't do anything about it. We're going to shut down agencies that Congress created, and you can't do anything about it.

Why in God's name would a member of Congress that has sworn an independent oath to the Constitution to uphold our Constitution, to uphold the law, and to uphold the Article I branch, the first branch of the government as outlined in our Constitution, why in God's name would we pretend like everything is normal given what this administration and this president is doing?

BROWN: But while this government shutdown continues into its 10th day, you have federal workers who are only getting partial paychecks, members of the military next. You were in the military. There are military families who could suffer. What do you say to those? Like we just had on Representative Don Bacon, who said Democrats are doing this just to show their base or putting up a fight against Trump. And meantime, federal workers are suffering?

CROW: This is Donald Trump's decision and Mike Johnson's decision to shut down government. I have been in Congress for seven years now. Every single one of those years, we have passed an appropriations bill, a funding bill on a bipartisan basis, that is legitimate, that is rational, no side gets everything they want, but it's within the guardrails of the Constitution that's lawful and the money is spent in the way it's supposed to be spent.

Donald Trump has thrown all of that out the window, right? So, if they want to negotiate, we are willing to do so. And the way out of this is a bipartisan rational reasonable bill. They have not proposed to that. So, the minute they proposed that and open the doors of Congress and bring is back to work, we can get this done. They control every brand of government in Washington, D.C. and it's on them to open the doors.

BROWN: All right. I want to ask you about other news of day, and that would be what's happening in the Middle East where a ceasefire is now in effect between Israel and Hamas. All of the living hostages are expected to be returned in the coming days. It is still tenuous, but that is the expectation. How much credit does President Trump deserve for this remarkable agreement?

CROW: Well, this does need to end, the terrible, terrible tragedy we've seen in the last coupe of years. It's been --

[11:00:00]