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EARLY START

Comey Standing Firm; Clinton Campaign Cries Foul; Trump and Pence Teaming Up; Iraq Mosul Offensive. Aired 4-4:30a ET

Aired November 1, 2016 - 04:00   ET

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


JOHN BERMAN, CNN ANCHOR: Overnight, James Comey indicates he is standing firm. He thinks he made the right call on the investigation into Hillary Clinton's e-mails.

CHRISTINE ROMANS, CNN ANCHOR: The Hillary Clinton campaign crying foul, accusing Comey of a blatant double standard.

Donald Trump and Mike Pence teaming up. They'll be on the same stage together today. They have an agenda in a key swing state.

Good morning, everyone. Welcome to this special early, early edition of EARLY START. I'm John Berman.

ROMANS: I'm Christine Romans. It is early and it is Tuesday, November 1st, 4:00 a.m. in the East.

The breaking news: just one week to go until Election Day. And a slew of developments, in just the last few hours, FBI Director James Comey says he will -- he will not give any update e-mails that could be related to the Clinton investigation until his agents have reached a conclusion. Hillary Clinton maintains the investigation will amount to nothing.

[04:00:01] She says there is no case here.

Donald Trump warns it would become a constitutional crisis for the country if Clinton is elected. This as "The New York Times" is out overnight with a new report, new reporting on Donald Trump's taxes and how he might have avoided paying hundreds of millions of dollars in federal taxes by, as they put it, stretching the tax law beyond recognition.

BERMAN: I want to start with the e-mail investigation at this moment. The FBI says it is urgently searching the newly discovered from the laptop belonging to disgraced former member of Congress, Anthony Weiner. There are hundreds of thousands of emails on that laptop.

We are joined by CNN politics reporter Eugene Scott tracking the latest developments for us.

And overnight, really, we got the indication from James Comey about how he feels about this whole controversy and what he expects to do in the coming days. EUGENE SCOTT, CNN POLITICS REPORTER: Yes, aide close to him told us

that he is doing okay. It hasn't been smooth in the last few days for him but he stands by his decision. He doesn't regret, but he's not going to update anyone on anything until after the investigation is complete. He has gotten so much criticism.

ROMANS: So, what are the agents doing at this point?

SCOTT: Well, what they are sifting through all the e-mails with the specialized search engine comparable to what the FBI has at Quantico. And they are separating Huma's emails from Anthony Weiner's emails, and they are searching those that they think are relevant. And they want to see if those are classified. And perhaps more importantly, if the sender or receiver knew that the information is classified.

BERMAN: Computer may finish the job quickly, but you need humans involved to see if it is classified --

ROMANS: Of course. But then there's the interagency -- you have to go back to the agencies and see how things are classified and what was the handling --

BERMAN: People muck things up and throw it down.

Huma Abedin, not on the campaign trail, we noticed that yesterday. What is she doing? What is she saying about the investigation?

SCOTT: Well, as we mentioned, she has not been out in public since this became public to all of us. But we do have a statement from her lawyers. What her lawyers are saying is that "Abedin only learned for the first time on Friday from press reports of the possibility that a laptop belonging to Mr. Weiner could contain e-mails of hers. While the FBI has not contacted us about this, Ms. Abedin will continue to be, as she always has been, forthcoming and cooperative."

ROMANS: Interesting. They have not contacted her about it. She heard about it from press reports. I think that's kind of interesting development.

BERMAN: But Hillary Clinton, when she looked at this election and thought who would be here with her in the final days on the campaign trail, and this key moment like that, she ever imagine she'd be without Huma Abedin who's been by her side for years.

ROMANS: Somebody who she's called like a second daughter to her.

BERMAN: Yes.

ROMANS: All right. Eugene Scott, thank you so much for that. Nice to see you this morning. Great reporting.

The Clinton campaign is accusing James Comey of a blatant double standard. Campaign manager Robby Mook jumped on reporting by CNBC, this is CNBC reporting, that last month, Comey opposed naming Russia as a so-called state actor hacking Democratic officials, arguing it was too close to Election Day. (BEGIN AUDIO CLIP)

ROBBY MOOK, HILLARY CLINTON CAMPAIGN MANAGER: It's impossible to view this as anything less than a blatant double standard. That Director Comey would show more discretion in a matter concerning a foreign state actor than one involving the Democratic nominee for president is nothing short of jaw dropping.

(END AUDIO CLIP)

ROMANS: We should note, CNN does not have the same reporting on Comey in Russia. And the FBI has declined to comment.

BERMAN: On the campaign trail, Hillary Clinton says flat out there is no case here. In Ohio, Clinton invited investigators to go ahead and dig into her aide's e-mails, but she said they'll find nothing.

CNN's Joe Johns has latest from Cincinnati.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: John and Christine, Hillary Clinton kicking off the final full week of campaigning right here in battleground Ohio, trying to use the anxiety surrounding the controversy to get out the vote. At Kent State, making the case there is no FBI case on the latest e-mails that were discovered. And here in Cincinnati, calling on the FBI to take a look at the new e-mails, but predicting they won't find anything.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: You know, there is a new e-mail story about why in the world the FBI would decide to jump into an election without evidence of wrongdoing with days to go. That's a really good question.

But I want you to know, I have said repeatedly. I made a mistake. I'm not making any excuses. But I will tell you this -- if they want to look at some more staffers, by all means, go ahead. Look at them. And I know they will reach the same conclusion they reached when they looked at my e-mails last year, right?

(APPLAUSE)

It wasn't even a close call. I think most people have moved on. They are looking and focused on who will be the next president and commander in chief.

JOHNS: Traveling in Ohio, Hillary Clinton was not accompanied by her long time aide Huma Abedin. Instead, accompanied by Capricia Marshall, who served as her chief of protocol while she worked at the State Department.

[04:05:01] Three stops today for Hillary Clinton, all in the state of Florida.

John and Christine, back to you.

(END VIDEOTAPE)

ROMANS: All right, Joe. Joe Johns, thanks.

This morning, Trump and his running Mike Pence go to Pennsylvania to talk about Obamacare. They will be on stage with senators, House members and Dr. Ben Carson. They're going to highlight what the Trump campaign called the disastrous increases in Obamacare premiums and they will pitch Trump's call to repeal and replace the Affordable Care Act. Trump is also certain to bring up Hillary Clinton's email controversy as he did at two campaign stop in Michigan.

CNN's Sara Murray has the latest.

(BEGIN VIDEOTAPE)

SARA MURRAY, CNN CORRESPONDENT: Good morning, John and Christine.

While Donald Trump kicked off his week by spending the day trying to convince the American voters that the FBI was sure to find the worst in Hillary Clinton's e-mails and warning them that if they elect her, she'll be embroiled in scandal for years to come.

TRUMP: We will be facing the very possibility of a constitutional crisis with many dimensions and, you know, this is so true, deleterious consequences should Secretary Clinton win this election. In other words, we're going to be tied up in court for the rest of our lives with this deal. She's not going to win the election, but I'm just saying.

MURRAY: Now, even though FBI Director James Comey has said it's too early to say whether anything significant will come out of these e- mails which came from the computer that was shared by Huma Abedin, a Clinton aide, and her husband, Anthony Weiner, that certainly hasn't stopped Donald Trump from seizing on it on the campaign trail. It's giving his campaign new hope that they may be able to compete in blue states that once seen out of their reach. He spent Monday barnstorming in Michigan and on Tuesday, he is hitting up Pennsylvania and Wisconsin.

Back to you, guys.

(END VIDEOTAPE)

BERMAN: All right. Sara Murray, thanks so much.

The Trump campaign is distancing itself from a self-described white nationalist who is a self-described supporter of Donald Trump who paid for robocalls in Utah, smearing a third party candidate. The calls to nearly 200,000 homes go after Evan McMullin, the independent doing well enough to turn Utah into a battleground state. The calls focus on McMullin's support for gay marriage.

(BEGIN AUDIO CLIP)

WILLIAM JOHNSON: My name is William Johnson. I'm a farmer and white nationalist. I make this call against Evan McMullin and in support of Donald Trump. Evan McMullin is an open borders, amnesty supporter. Evan has two mommies. His mother is a lesbian, married to another woman. Evan is okay with that. Indeed, Evan supports the Supreme Court ruling legalizing gay marriage.

(END AUDIO CLIP)

BERMAN: The call also claims without evidence that McMullin himself is a closeted gay man because he's single and in his 40s. The Trump campaign is condemning the robocall saying it has no connection to it at all.

ROMANS: All right. Breaking overnight. Senator Richard Burr is apologizing for suggesting to put a bullseye on Hillary Clinton. The North Carolina Republican made that comment in private over the weekend. In a recording obtained by CNN, you hear Burr talking about a visit he made to a gun shop the day before.

(BEGIN AUDIO CLIP)

SEN. RICHARD BURR (R), NORTH CAROLINA: Doesn't make me feel any better than walk into the gun shop I think yesterday in Oxford and there was a copy of "Rifleman" on the counter. It's got a picture of Hillary Clinton on the front of it. I was shocked at that that it didn't have a bullseye on it.

(END AUDIO CLIP)

ROMANS: The Brady campaign is a pro-gun control group that supports Hillary Clinton. It is calling on Senator Burr to step down. Burr said the comment he made was inappropriate. The Clinton campaign has not commented.

New details this morning on the aggressive tax strategy Donald Trump may have used to avoid paying taxes in nearly a billion dollars of income in the late 1990s. "The New York Times" says it has documents suggesting Trump used losses from his Atlantic City casinos to offset taxes on other business income. At the same time, his creditors forgave much of his debt on bankrupt properties.

Here's an example "The Times" how this works. Suppose Trump has a $100 million loan. His property goes bankrupt and pay back $60 million. His creditors are forced to forgive $40 million which would normally be treated as income and taxed. But the move "The Times" claims Trump made was converting that $40 million into equity into real estate partnerships and dodging a huge tax bill. It's a move "The Times" describes as stretching the tax law beyond any recognition.

This tactic is now illegal. It is unclear if Trump used it properly or was investigated for it by the IRS. "The Times" quotes John Buckley, the former chief for Congress' Joint Committee on Taxation, saying, quote, "he deducted somebody else's losses. He is double dipping big time." Buckley tells "The Times" that his bond holders will likely declaring losses for tax purposes themselves. Trump should not have been able to claim it too. To be clear, it's impossible to confirm if Trump actually used his

tactic. He refuses to release his tax returns. A spokesperson for Trump tells "The Times" story is all speculation and they misunderstand or misread tax laws.

BERMAN: You know, I think it's worth saying, you know, we're now seven days away from Election Day, one week.

[04:10:00] This is the penultimate Tuesday in the election season. Donald Trump always said he will release tax returns after the audit is complete. They're not coming out this election. I think it's clear to say we are not going to see Donald Trump's tax returns right now.

All right. What exactly is the situation between Donald Trump and Russia, and Vladimir Putin? The FBI how has been looking into any possible ties the candidate could have to Russia? We have a closer look, coming up.

(COMMERCIAL BREAK)

BERMAN: All right. What exactly is the situation right now between Russia and the U.S. presidential campaign? Is there a link with Vladimir Putin and Donald Trump? Is the FBI investigating this situation?

According to "The New York Times," it's not so clear. But there's a lot of smoke out there this morning.

So, joining us to figure it all out, "Daily Beast" senior editor Michael Weiss. He's co-author of "ISIS: Inside the Army of Terror".

Michael, good morning. Thanks for being with us.

Again, I don't want to give a laundry list of the reports here.

[04:15:00] But there's a CNBC report saying that James Comey got in the way or objected to the idea of saying that Russia is trying to get involved in this election. Then, there's the idea of the FBI investigating Paul Manafort, the former campaign manager of Donald Trump.

There's a lot of this stuff out there right now and then a possible computer in the basement of Trump Tower talking to the Russians. None of it, you know, none of it directly confirmed by CNN, but a lot of smoke.

What should we be thinking about here and looking at?

MICHAEL WEISS, CO-AUTHOR, "ISIS: INSIDE THE ARMY OF TERROR": There's a lot of circumstantial evidence that ties Trump to Moscow and a lot of it ideological, you know, areas of congruence between the two. It is important to realize, though, in the 21st century, look, there was a report in "Mother Jones" saying that the Russians are trying to cultivate Trump. In other words, that they're essentially turning the Republican candidate for president into a Russian spy. I think that's a bit much. I certainly would not put it past the

Russian services for attempting something like that. But in the case of Donald Trump, you almost don't have to do, right?

Look at the positions he held going back a decade on NATO, on America's transatlantic relationship to Europe. All of the sort of conventional post-World War II security protocols and treaties are being called into question by this guy. When the Kremlin looks at this, they see something that they have seen all throughout Europe, in the form of Nigel Farage, the leader of U.K., in the form of Marine La Pen, the aspiring president of France, the far right National Front Party. In the form of Victor Orban, the ruling party in Hungary.

They see a liberal candidate who broadly conforms to the Russian world view that democracy is inherently unstable. America should not be a force for leadership in the world. We should sort of pack it all in and close down our borders. Keep immigrants out and restore this kind of great sort of ethnic Christian super power identity. That just conforms with the Putin-ist world view.

Now, that's not to say that there may not be some lingering financial ties between the Trump organization and Russia. You listen to Donald Trump's son. He says tons of money has been pouring from Russia. Then, you hear conflicting reports from the campaign that it is difficult to do business in Russia because you have to bribe everybody to get anything done.

As somebody who studies this, I'm actually working on a big report about this, I have to say, there is no smoking gun here. The FBI claims there is no direct link. I think that's right. The links are indirect.

But again, that doesn't mean there is not some form of fellow travelship. That does mean that Trump is aspiring at the very best, you know, a partner of Putin as president of the United Stats. And at worst, and I think this is where the reporting should go, if and when he loses the election, this is guy who's going to cash in. And one of the places he is cashing in since 1987 is Russia. So -- and he is positioning himself perfectly for that opportunity.

ROMANS: From the Russian perspective, trying to figure out if Russia or Russian interest is actively meddling into the U.S. political process or they're just happy bystanders to, you know, a candidate, who happens to line up with their world view.

WEISS: Yes, I mean, exactly. I mean, the KGB had this old trick, it's called active measures. Dirty trick is the sort of the other name for it, where they would sew pieces of information or in some case, it's just a rely upon pieces of truth or half truth, disseminate them for the purposes of weakening the West and dividing its alliances, particularly those with the United States and its European allies.

In the case of the political system in the 21st century, I have to say, there is a plethora of embarrassments and instances of hypocrisies and outright lying that all the Russian government has to do by hacking into the DNC or John Podesta's e-mails and let us do the work for them. This is the easiest kind of active measure that there is. Now, the question is, is the Russian government trying to get Donald Trump elected or are they just trying to undermine faith in the political system here and our democracy?

I think it's both. I think the ultimate goal is to undermine faith and democracy, because that's the long game, right? That means American system is finished. Everything they're saying about, you know, human rights and democracy is false. Who are they to judge us?

But the short game is, even more than wanting Trump to be president, they simply do not want Hillary Clinton to be president. There is revulsion toward her amongst the Russian, you know, official class and that goes back to before she was secretary of state and her husband is president.

BERMAN: Michael Weiss, thanks so much for being with us this morning. Thank (INAUDIBLE).

WEISS: Sure.

ROMANS: All right. Nineteen minutes past the hour.

Next, the fight to liberate Mosul. Iraqi forces are poised to move in and clear out ISIS extremists. But thousands of civilians could be caught in the crossfire. A live report from Iraq, that's next on EARLY START.

(COMMERCIAL BREAK)

[04:24:19] ROMANS: Welcome back to EARLY START.

Now, to the fight to recapture the Iraqi city of Mosul from ISIS. The Pentagon says the campaign is proceeding as planned. Iraqi troops reportedly entering the outskirts of Mosul following two weeks now of slow but steady advances by U.S.-backed coalition forces.

CNN's Arwa Damon is live near Mosul for us this morning with the very latest.

What can you tell us, Arwa?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, this town you see behind me, this is one of the last towns that stands on this frontline between the elite Iraqi counterterrorism units and city of Mosul itself. That Humvee is one vehicle that came back from the front. Some of the damage sustained in battles past, but some of it from what happened in the last 24 hours.

[04:25:04] And I don't know if you just heard that, a sound of an explosion in the distance. We have been hearing artillery gunfire throughout the morning. Aircraft still overheard.

Now, the commander of this counterterrorism forces does not know exactly how many ISIS fighters are inside because he says they have been moving back and forth to and from Mosul itself. Inside the city of Mosul, he estimates 8,000 fighters are there. What's making the advance here especially difficult, though, is that there are around 25,000 civilians believed to still be inside. That makes it more difficult to launch artillery or rockets or air strikes. They have to be that much more precise in their targeting when calling in that kind of fire power.

But the troops say they are so far advancing well and they do expect to have Mosul in their sights very, very soon, Christine.

ROMANS: All right. Arwa Damon for us near Mosul this morning. Thank you so much for that. Stay safe. Keep us posted, as our new developments. Thanks, Arwa.

BERMAN: All right. The FBI using sophisticated software to sort through thousands of e-mails discovered on a laptop owned by Anthony Weiner. How will this affect the race? We have new developments on the investigation overnight, and also some new polling to tell you about. Stick around.

(COMMERCIAL BREAK)