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EARLY START

Trump Campaign Fires Back at Leaked Tax Return; Clinton Heads to Ohio, Picks Up Endorsement from LeBron James; Hurricane Matthew Headed Towards Jamaica, Haiti; NTSB: Data Recorder of New Jersey Train Not Working. Aired 4-4:30a ET

Aired October 3, 2016 - 04:00   ET

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


[04:00:14] CHRISTINE ROMANS, CNN ANCHOR: The Trump campaign hits back over leaked tax returns saying a huge billion dollar write-off shows his business genius.

JOHN BERMAN, CNN ANCHOR: Hillary Clinton heads to Ohio and on the way picks up, let's call it, a royal endorsement.

ROMANS: Hurricane Matthews closing in on Haiti, Jamaica and Cuba. Could Florida come next? We have weather on the way folks.

Good morning. Welcome to EARLY START. I'm Christine Romans.

BERMAN: I'm John Berman. Great to see you this morning. It is Monday, October 3rd, 4:00 a.m. in the East.

And this morning, the tax information of Donald Trump seemed so badly, you want t keep secret, it's secret no more, at least some of it.

And now the Republican candidate faces new questions about what he made or did not make or pay or did not pay and just how great of a businessman he really is. The New York Times had obtained three pages from Trump's 1995 state returns that show Trump claimed a $916 million loss in 1995. Its $916 million with the Time suggest could have allowed him to avoid paying any federal income taxes at all for up to 18 years. Now CNN has not independently confirmed the authenticity of these tax documents, but both campaigns are reacting to the news.

CNN Chris Frates with the very latest developments.

CHRIS FRATES, CNN INVESTIGAVTIVE CORRESPONDENT: Hey, good morning, John and Christine. The Trump campaign has not disputed the accuracy or the facts in that New York Time story. They put out the statement calling the Times and the media in general, an extension of the Clinton campaign. Let's say, that went on to attack Clinton before finally arguing that Trump had a fiduciary responsibility as a businessman to pay no more tax than legally require.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: The Times have fails to plan out that he has an obligation as the head of a business to take advantage of and to use the lawful deductions and tax advantages that are available to you. So, the reality is, this is part of our tax code. The man is a genius. He knows how to operate the tax code.

UNIDENTIFIED MALE: What this shows is what an absolute mess the federal tax code is. And that is why Donald Trump is the person in best position to fix it. There is no one who has shown a more genius and their way to maneuver around the tax code.

(END VIDEO CLIP)

FRATES: And not surprisingly, the Clinton campaign is jumping on this. They have been pressuring Trump for months to release his tax returns. They reacted to this story very swiftly. In a statement, Campaign Manager Robby Mook said, this bombshell reports reveals the colossal nature of Donald Trump's past business failures and just how long he may have avoided paying any federal income taxes, whatsoever.

He stiffed small businesses, laid off workers and walk away from hardworking communities. He apparently got to avoid paying taxes for nearly two decades of tens of millions of working families, paid theirs in that statement ended with Mook again calling on Trump to release his tax returns. So this is not a story line that I expect the Clinton campaign is going to let go anytime soon. John, Christine?

BERMAN: Thank you Chris.

ROMANS: All right. Chris, thanks for that.

Time for an EARLY START on your money, this Monday morning, so, how can Donald Trump lose $916 million? For Trump losses were a gift that kept on giving and the bigger loss the lower his taxes. The way Trump structured his business and all the tax available to real estate developers, could have allow the presidential candidate to reduce his income taxes to zero. Now we don't know which business broke the law or when the loss occurred, was it in 1995 or before that?

But one thing is clear. If the goal is to pay as little in taxes as possible, one thing working in terms favor is that he sets up most of his businesses as limited liability corporations, or LLC's. That lets him apply losses from those businesses to offset any taxable profits earned from any other businesses.

Plus, he is a real estate developer. And as a developer, he could have deducted interests on loans used to finance properties. He is allowed to deduct operating expenses and maintenance costs on his properties. And even though the market value of his property appreciates over time, for tax purposeses he is allowed to write down the value of it over many years for wear and tear. The Trump campaign and the GOP nominee paid hundreds of millions in dollar and other taxes, including property and real estate taxes. And he also said he has a fiduciary responsibility to his business to pay no more tax that legally required.

BERMAN: Last point is interesting, because it is debatable, right? I have seen taxes per se because he owned his own business. He is a 100 percent prior he got no fiduciary responsibility only to himself.

ROMANS: Right.

BERMAN: There aren't stockholders.

ROMANS: They are shareholders.

BERMAN: To sue him, (inaudible) that claim, maybe suspect of the end there.

This morning, Hillary Clinton heads to the battle ground city of Ohio, where she has been trailing in recent polls. She has not visited the state in weeks leading some to wonder if she had been there writing off Ohio. But she has two events here today. And she just picked up the endorsement of a King. Shall we say, one of Ohio's favorite son, King James -- LeBron James. In an op-ed for "Business Insider", James writes policies and ideas that divides us, more are not the solution. We must all stand together. No Matter where we are from or the color of our skin. And Hillary, he says is running on the message of hope and unity that we need.

[04:05:18] Now, this came after Hillary Clinton struck a little personal note during a pre low key campaign stop in North Carolina. She went there Sunday to address the recently shootings. CNN's Joe Johns has the latest from Charlotte.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: John and Christine, Hillary Clinton's visit here to Charlotte, North Carolina after the demonstrations and unrest was scheduled about a week ago. It had to be canceled, because the Mayor questioned the timing of it. It was very important for the campaign to get her into the city talking about the issues, because this is the largest city and the key battle ground state. It is also an issue she talked about again and again, police use of lethal force.

But they had to strike a tone. So is not to attract criticism, they did that by downplaying the trip into the City. Not even tipping off parishioners in the church that Hillary Clinton was coming. When she got here, she spoke from the pulpit. She spoke in a very personal vain and she did not even mention one time the name of Donald Trump.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I'm a grandmother and like every grandmother, I work about safety and security of my grandchildren. But my worries are not the same as black grandmothers, who have different and deeper fears about the world that they're grandchildren face.

(END VIDEO CLIP)

JOHNS: After that speech here at Little Rock AME Zion Church in Charlotte, North Carolina, Hillary Clinton also met briefly with a group of community leaders to talk about some of the related issues before flying back home. Today, she travels to Toledo and Akron, Ohio, John and Christine?

ROMANS: All right, Joe Johns, thank for that. We are just one day away from the next prime time political event.

The one and only vice-presidential debate, Republican Mike Pence, the Democrat Tim Kaine face off the 90 minutes in Farmville, Virginia. CNN debates cover starts at 4:00 p.m. leading up to the debate at 9:00.

BERMAN: All right. Hurricane Matthew is bearing down. This is a serious storm in the Caribbean, a lot of Americans being evacuated. We have new details next.

(COMMERCIAL BREAK)

[04:11:28] ROMANS: Welcome back at 11 minutes past the hour this Monday morning. Serious concern in the Caribbean with new hurricane watches and warnings, now posted. Hurricane Matthew is a powerful category four storm. And it is headed to Jamaica, Haiti, the Bahamas and Cuba. The U.S. Navy is evacuating about 700 family members of U.S. personnel station that are based in Guantanamo bay, Cuba.

Joining us now with the latest on preparations across the region is CNN's Patrick Oppmann in Santiago de Cuba. Good morning, what's the latest there?

PATRICK OPPMANN, CNN CORRESPONDENT: Good morning, Christine. This is literally the calm before the storm, but that is going to change. We expect in the coming hours. A very powerful storm heading here after we expect rushing Jamaica and also causing a lot of havoc in Haiti. As it is expected, it will come to Cuba. And officials here are warning residents to evacuate low lying areas and mountains that surround the city.

Cuban President Raul Castro is in the area to direct the efforts himself. He says to minimize the loss of human life and property. Cuban officials say this is the storm that they have not seen here, the kind of which that they have not seen here in many, many years.

Christine, you mentioned that to the east of me, the Guantanamo Bay, Navy base, they have evacuated. But 700 non essential personnel, family members and their pets and of course no one ever likes to (inaudible) not essential, this might be an exception. Though Christine, people are getting ready for a very powerful storm.

ROMANS: Yeah, this is a category four. That's a 130 to 156-mile-an- hour winds and that is almost guaranteed that structural damage that is a dangerous storm. Patrick, we will check in with you again very, very soon. Stay safe. And the preparations continue here for the latest on the Hurricane Matthew and its predicted path.

Let's bring in Meteorologist Derek Van Dam.

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, John and Christine. Of course, all eyes on Hurricane Matthew, churning about the Caribbean Sea. The big questions, how strong it will be, where will go from here and will it impact the East Coast of the United States? 130- mile-an-hour sustained winds and gusts at 175 miles per hour. The immediate threats will be across Haiti, eastern Cuba and Jamaica. Look at the rainfall totals. We're expecting perhaps upwards of 20

inches of rain in the mountain regions of western Haiti. The winds will be a factor as well, knocking out power for much of this region and as it travels into the Bahamas, it is going to be a close call on the exact path of Hurricane Matthew. We do have the potential for impacts along the Florida coastline at least in term of big waves and perhaps some strong rain bands moving across the region. Something we will monitor very closely for the days ahead. Here is a look at the temperatures across the entire East Coast, a bit of a warming trend for the Deep South, back to you.

BERMAN: A few days before we get a real sense of where the storm is headed after it gets to the Bahamas.

All right, breaking overnight, Kim Kardashian West robbed at gunpoint. This happened in Paris inside a bathroom in the luxury rental. Kardashians spokesperson said she was robbed by two masked men dressed as police officers. The French interior ad ministry said there were actually five thieves who got away with jewelry worth apparently a few million dollars. Now, Kardashian was not hurt. Her husband, Kanye West, learned about the robbery while he was on stage at a Music Festival in New York City. He ended the show very quickly and left the stage after declaring a family emergency.

ROMANS: All right, new information on the deadly train crash in Hoboken, New Jersey. The NTSB revealing a data recorder that could have shed light into what cause that crash, was not working. Official says a second newer black box with a front facing camera remains inaccessible. They are hoping that once they find it, it will provide critical information, including the speed of that train at the time of the crash. CNN's Nick Valencia has the latest for us.

[04:15:20] NICK VALENCIA, CNN CORRESPONDENT: John and Christine, certainly a bizarre development related to this train crash announced over the weekend by the NTSB, that one of the two event recorders that they recovered from the New Jersey Transit train crash was not functioning at the time of the accident. This development announced by NTSB investigators saying that the recorder was relatively old, dating back to 1995.

Usually when this event recorder are found to be not functioning, they replace technically was not the case with this event recorder. Whether this is a technical malfunction, engineer error or something else. All of that will be part of the investigation. Investigators are hopeful however, that a second event recorder that is still inside that mangled wreckage of the crash will be recovered and hopefully that is functioning. Investigators spoke about this at a Press Conference on Sunday afternoon.

(BEGIN VIDEO CLIP)

BELLA DINH-ZARR, NTSB VICE CHAIRMAN: Yesterday, our recorders experts worked with the experts from the manufacturers to access data from the recovered locomotive event recorder which was built in 1995. Unfortunately, the event recorder was not functioning during this trip. (END VIDEO CLIP)

VALENCIA: The crash happened last Thursday morning while the train was packed with commuters. According to investigators, the train hit a bumper block and went airborne killing the woman, who was waiting for the train on the platform. Investigators have conducted toxicology tests on the train's engineer, the conductor and the rear brakeman. So far those tasks have not come back. The conclusion to the cause of the crash has not been given either. John and Christine?

ROMANS: All right, Nick, thank you for that.

BERMAN: All right, Russia now with the stern warning for the United States as the situation in Syria deteriorates. That is next.

(COMMERCIAL BREAK)

[04:21:28] BERMAN: Shock and uncertainty in the nation of Colombia this morning after the stunning defeat of the national referendum on the deal to end the longest running war in Latin America. This is a surprise to a lot of people. Colombia's voters narrowly rejected the peace agreement with the FARC rebels. They are rejecting it by four tenth of a percent. Critics said the deal which would have given the rebel leader reduced sentences for war crimes was too lenient. Both sides now say the cease-fire will remain in effect. And they are going to try to return to the bargaining table.

ROMANS: Great, Russia warning the U.S. against taking action in Syria saying that removing President Bashar al-Assad would have harmful effects to cause the Middle East, this as Russian back forces in Syria make gains in Aleppo after bombing one of its main hospital.

Let's get to CNN International Diplomatic Editor Nic Robertson. He is live for us this morning in Istanbul, Turkey. And bring us up to speed here. It has been just a frustrating few weeks for diplomats who want to end the violence.

NIC ROBERTSON, SENIOR INTERNATIONAL CNN CORRESPONDENT: It has with this news steps forward in the diplomacy this week. Although Secretary of State John Kerry did speak by phone with the Russian foreign minister Sergey Lavrov. They were talking about how they could jointly normalized the situation in Aleppo, but the situation there is so abnormal, if you will, their efforts two week ago to get some kind of cease-fire utterly falling apart.

Russia backing Syrian forces who made strategic gains in the rebel- controlled area of eastern Aleppo. The U.N. says 275,000 people live in that rebel-held area. The water is cut off there. The electricity is cut off. Food is running out. And according to the U.N. of four hospitals in the rebel area, only one is fully functioning right now. They say that the medical situation, in the rebel-area of eastern Aleppo is dire. That it is falling apart. You have now the Russian foreign ministry vamping up rhetoric against the united States, claiming that it is outrageous, the pressure the United States is trying to put on Russia to bring about a cease-fire there and saying that if the United States target some Syrian forces, building up on the outside of Aleppo right now. Then that would destabilize not just Syria, but the region and the people that would profit would be the terrorist. The Russian rhetoric is that the United States isn't hard on the terrorist in this conflict. That is the rhetoric coming out of Russia right now. Christine.

ROMANS: All right. Indeed, from Istanbul, of course Nic Robertson. Thank you for that, Nic.

Twenty three minutes past the hour, fresh eruptions by a volcano in Mexico, forcing evacuation, ash, thick smoke and lava spewing from the Colima Volcano about 300 miles from Mexico City. Hundreds of villagers on the foot of that mountain -- look at those pictures. People live at the foot of the mountain have now moved to safety. Eruptions earlier this year forced some similar evacuations.

BERMAN: All right. The end of the era in baseball, legendary Los Angeles Dodgers broadcaster Vin Scully, he called his final game yesterday happening in San Francisco. So, how do you say good-bye after 67 seasons, more than 9,000 broadcasts? Listen.

(BEGIN VIDEO CLIP)

VIN SCULLY, LOS ANGELES DODGERS BROADCASTER: I have said enough for a lifetime and for the last time I wish you all a very pleasant good afternoon.

(END VIDEO CLIP)

BERMAN: This guy was so good. Scully's all-time favorite player Willie Mays joined him in the booth. Scully actually grew up as a Johnny's fan when the team was New York. Something fitting that his last game would be against the Giants. The Giants honored Scully at the ceremony before the fourth inning.

ROMANS: Wow.

BERMAN: As long as baseball has existed, practically Vin Scully has been calling games, as also.

[04:25:15] ROMANS: All right, 25 minutes past the hour. Reported about Donald Trump taxes, how both sides are trying to use it or just -- five weeks folks, five weeks until Election Day.

(COMMERCIAL BREAK)

BERMAN: The Trump campaign hits back over leaked tax returns saying, sure he lost $916 million maybe, but it only shows his business genius.

ROMANS: Hillary Clinton has her battle ground Ohio, but not before grabbing a big endorsement from a superstar in the state.

BERMAN: And Hurricane Matthew is a powerful category 4 storm churning into Caribbean right now, Haiti, Cuba, Jamaica and its path United States not out of the woods yet.

Welcome back to EARLY START, I am John Berman.

ROMANS: And we can see it is moving slowly here, I'm Christine Roman, it is 30 minutes past the hour.