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Special Counsel Mueller's Grand Jury; Mueller Follows the Money; Trump Call With Mexico's President Leaked; Dow Hits 7th Straight Record. Aired 4:30-5a ET

Aired August 4, 2017 - 04:30   ET



DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The Russia story is a total fabrication. It's just an excuse for the greatest loss in the history of American politics. That's all it is.


ALISON KOSIK, CNN ANCHOR: President Trump fighting back after reports emerge that grand jury subpoenas have been issued in the Russia investigation.

[04:30:02] DAVE BRIGGS, CNN ANCHOR: And CNN has learned that special counsel Robert Mueller following the money, investigating possible financial crimes as part of the ongoing probe into the Trump campaign.

Welcome back to EARLY START, everybody. I'm Dave Briggs.

KOSIK: Good morning. I'm Alison Kosik. It's 30 minutes past the hour.

And a major advance in special counsel Robert Mueller's investigation of Russian meddling in the 2016 election. A source familiar with the matter telling CNN a grand jury has issued subpoenas relating to Donald Trump Jr.'s meeting with a Russian lawyer at Trump tower.

CNN has learned the subpoenas seek both documents and testimony from people involved in that meeting. Mueller's team continuing to probe whether the president or any of his campaign associates colluded with Russia during the presidential campaign -- a probe the president has repeatedly slammed as a witch hunt.

BRIGGS: A spokesman for Mueller's office declined to comment on the reports which were first posted by the "Wall Street Journal" and "Reuters". The White House response coming from special counsel to the president, Ty Cobb, noting in a statement that grand jury matters are typically secret but adding the White House favors anything that accelerates conclusion of Mueller's work, quote, fairly.

The president's outside lawyer, Jay Sekulow, downplaying the importance of the subpoenas.

(BEGIN VIDEO CLIP) JAY SEKULOW, PRESIDENT TRUMP'S LAWYER: This is not a surprise because the impaneling of a grand jury in situations like this, when you've got an investigation, is typically how they move forward. That's -- it is really very much a standard operating procedure when you've got a situation like this. But with respect to the impaneling of the grand jury, we have no reason to believe that the president's under investigation here.


BRIGGS: Now, Sekulow added that his boss, Donald Trump, is not looking into firing Robert Mueller.

But CNN's Athena Jones on the road with the president in West Virginia has more on his reaction.



In the wake of news that special counsel Robert Mueller has issued grand jury subpoenas related to Donald Trump Jr.'s meeting last summer at Trump Tower with a Russian lawyer, the president's team out swinging here in Huntington, West Virginia, in a state he won by more than 40 points in November. The president spent five minutes blasting the Russia story as a, quote, total fabrication and a hoax, and blasting Democrats for what he called their obsession with it.

Listen --

TRUMP: Are there any Russians here tonight, any Russians?

They can't beat us at the voting booths, so they're trying to cheat you out of the future and the future that you want. They're trying to cheat out of the leadership you want with a fake story that is demeaning to all of us.

JONES: President Trump's latest tirade signaling he has no plans to stop talking about this ongoing investigation which he has repeatedly termed a witch hunt -- Alison, Dave.


KOSIK: OK. Athena Jones, thank you.

And with the FBI Russia investigation now at the one-year mark, special counsel Robert Mueller is following President Trump's money. People familiar with the investigation tell CNN federal investigators have seized on President Trump and his associates' financial ties to Russia as potentially fertile ground for the probe. The sources describe an investigation that has widened to include possible financial crimes.

BRIGGS: The turn in the investigation seems to cross the, quote, red line President Trump warned Mueller about it in an interview last month with "The New York Times."

CNN's Pamela Brown has the latest.


TRUMP: Does anyone really believe that story?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT (voice-over): The Russia investigation continues to widen, as federal investigators explore the potential financial ties with President Trump and associates to Russia. Sources tell CNN financial links could offer a more concrete path to any potential prosecution. Investigators are delving into possible financial crimes including some unconnected to the election.

For the president, that's going too far. He's warned that delving into his businesses is a, quote, violation.

Trump has maintained there's no collusion and he has no financial ties to Russia.

TRUMP: And I can tell you speaking for myself, I own nothing in Russia. I have no loans in Russia. I don't have any deals in Russia.

BROWN: Now, one year into this complex probe, the FBI has reviewed financial records related to the Trump Organization, the president himself as well as his family members and campaign associates. CNN has told investigators have combed through the list of shell companies and buyers of Trump branded real estate properties. They scrutinized the roster of tenants at Trump Tower in Manhattan, reaching back several years.

And officials familiar with the investigation tells CNN special counsel Robert Mueller's team has examined the backgrounds of Russian business associates connected to Trump --

UNIDENTIFIED MALE: From Moscow, it's Miss Universe 2013.

[04:35:03] BROWN: -- dating back to the 2013 Miss Universe pageant he hosted in Moscow.

UNIDENTIFIED MALE: Thank you to Aras Agalarov and the Crocus Group for their amazing hospitality.

BROWN: CNN could not determine whether the review has included Trump's tax returns.

But even investigative leads that have nothing to do with Russia, but involve Trump associates, are being referred to the special counsel to encourage subjects of the investigation to cooperate.

TRUMP: The entire thing has been a witch hunt.

BROWN: President Trump keenly aware of the increased financial focus, regularly denounces the investigation.

TRUMP: Russia is fake news. This is fake news put out by the media. BROWN: Trump's team seeking to limit Mueller's investigation.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The president's point is that he doesn't want the special counsel to move beyond the scope and outside of its mission, and the president's been very clear as have his accountants and team that he has no financial dealings with Russia. And so, I think we've been extremely clear on that.

BROWN: CNN has learned new details about how Mueller is running his special counsel team. More than three dozen attorneys, FBI agents and support staff, experts in investigating fraud and financial crimes broken into groups, focused separately on collusion and obstruction of justice. There is also focus on targets like Paul Manafort, Trump's former campaign manager, and General Michael Flynn, his fired national security adviser.

CNN has learned that investigators became more suspicious of Manafort when they turned up intercepted communications that U.S. intelligence agencies collected amongst suspected Russian operatives, discussing their efforts to work with Manafort to coordinate information that could hurt Hillary Clinton's bid for the White House, according to U.S. officials.

In Flynn's case, the focus is now on his lobbying work for the Turkish government which he failed to disclose as required by law.

While both deny any wrongdoing, the approach to the Manafort and Flynn probes may offer a template for how the focus by investigators on possible financial crimes could help gain leverage and cooperation in the investigation.

(on camera): The president's attorney, Jay Sekulow, said to CNN in a statement, quote: The president's outside counsel has not received requests for documentation or information about this. Any inquiry from the special counsel that goes beyond the mandate specified in the appointment, we would object to.

And for context, investigators don't have to go directly to the president's lawyers to get financial information. Investigators can issue subpoenas to financial institutions and get records from the Treasury Department.

Pamela Brown, CNN, Washington.


BRIGGS: Thank you, Pam.

We know much more this morning about the deal-making tactics President Trump uses with -- tactics president Trump uses with foreign leaders now that the "Washington Post" has published shocking, leaked transcripts of contentious conversations in January between President Trump and the leaders of Mexico and Australia.

Check out these testy exchanges with Australian Prime Minister Turnbull criticizing an Obama administration agreement to take in more than 1,200 refugees then in Australian custody. President Trump said, quote: This is going to kill me. I am the world's greatest person that does not want to let people into the country.

After 24 minutes of heated back and forth, Trump abruptly ended the call, telling Turnbull, quote: I've had it. I have been making these calls it all day, and this is the most unpleasant call all day. And here's the kicker -- Putin was a pleasant kill. This is ridiculous.

KOSIK: And how about this exchange between President Trump and Enrique Pena Nieto over the border wall?

The Mexican president said this: My position has been and will continue to be very firm, saying that Mexico cannot pay for that wall. President Trump shot back, but you cannot say that to the press. The press is going to go with that, and I cannot live with that.

In the same conversation, the president offered an unflattering description of New Hampshire as he tried to explain the opioid epidemic there. He said, I won New Hampshire because New Hampshire is a drug-infested den.

The leak of confidential presidential conversations with foreign leaders drawing strong condemnation from lawmakers on both sides of the aisle. They are calling the leaks dangerous and disgraceful.

BRIGGS: President Trump promised a very big announcement at his rally last night. West Virginia Governor Jim Justice delivered, confirming plans to flip his party affiliation from Democrat to Republican. Justice is a billionaire coal and real estate executive, telling the crowd a lot of prayer and thought went into his decision.


GOV. JIM JUSTICE (R), WEST VIRGINIA: Today I tell you as West Virginians, I can't help you any more being a Democrat governor.

So tomorrow, I will be changing my registration to Republican.



KOSIK: Senator Joe Manchin will be the only Democrat elected statewide in West Virginia, and he's up for re-election in 2018.

[04:40:05] Manchin releasing a statement, saying this: I am disappointed by Governor Justice's decision to switch parties. While I do not agree with his decision, I have always said that I will work with anyone, no matter their political affiliation.

Trump's new immigration plan aims to help American jobs by curbing immigration, but economists say that will mean fewer workers risking long-term economic growth. One of the economy's biggest challenges -- baby-boomers are retiring, and there aren't enough young Americans to replace them. Currently, 44 million Americans are retired, up 36 percent since 2000.

Meantime, the labor force has only grown 12 percent. The U.S. relies on immigrants to fill that gap, and currently more foreigners participate in the labor force, 73 percent of foreign-born adults versus 62 percent of U.S.-born.

But if more immigrants are working, does that hurt blue-collar Americans? Well, maybe not. Workers for low-skilled, labor-intensive jobs are actually in short supply. Give you an example here: California farmers, they lost $13 million in crops last year because of worker shortages. And it's not just in agriculture -- restaurants and the service industry, they depend on cheap, legal workers to stay in business. But then again, a lot of people saying that legislation doesn't look like it's going to go anywhere.

BRIGGS: No, it's going to be tough to find 60 votes in the Senate. Even 50 I think would be an uphill climb. But we shall see.

A stunning leak. Transcripts obtained by the "Washington Post" suggest President Trump may never have intended to deliver on a central campaign promise to make Mexico pay for the border wall. We'll go live to Mexico City for reaction, next.



[04:46:00] TRUMP: We will build the wall, 100 percent. I promise, we will build the wall.

And who's going to pay for the wall?


TRUMP: Who's going to pay for the wall?



KOSIK: Oh, it was a rallying cry and a central theme for Donald Trump's presidential campaign -- build the wall along the southern U.S. border, and make Mexico pay for it. But those leaked transcripts published by the "Washington Post" suggest Trump never intended to follow through on that promise.

In a January 27th phone call, Trump tells Mexico's president: It will work out in the formula somehow. I am willing to say that we will work it out, but you cannot say any more that the United States is going to pay for the wall. I am just going to say that we are going to work it out. In terms of dollars or pesos -- it is the least important thing.


For more on the fallout from these explosive transcripts, let's bring in CNN's Patrick Oppmann. He's live in Mexico City.

You know, it is stunning to read some of what President Trump said in this phone conversation. What kind of reaction are you getting in Mexico?

PATRICK OPPMANN, CNN INTERNATIONAL CORRESPONDENT: Absolutely. And Mexicans like many Americans can't get enough of this. These transcripts have been translated in Spanish. People are going through them line by line.

And this is highly embarrassing for Mexican President Enrique Pena Nieto. There's been no response from his government or him about the release of these transcripts. You have to wonder like many world leaders if their future phone calls, will he be wondering why, say, in private to President Trump be leaked.

But Mexicans are really struck by a number of things, Alison, by the way that President Trump tries to flatter and then bully President Enrique Pena Nieto. And they're also finding a lot of hope, Alison, in this flexibility. What you had mentioned, that the wall might not be built after all. The wall here is incredibly unpopular. When Mexicans read President Trump telling Pena Nieto this is not the most important thing, this is more of a political issue, they're finding hope because they do not want to see this wall built, Alison.

KOSIK: Those transcripts were really amazing. It was like watching "The Art of the Deal" in motion.

CNN's Patrick Oppmann live from Mexico City, thanks so much.

BRIGGS: So, in the wake of North Korea's latest intercontinental ballistic missile test, President Trump is turning to Twitter diplomacy as part of the White House strategy to contain the North, slamming China and urging the country to put more pressure on Pyongyang.

The White House and adviser Sebastian Gorka claiming the strategy's working.


SEBASTIAN GORKA, WHITE HOUSE ADVISER: We have the president's Twitter feed.

UNIDENTIFIED MALE: Can a Twitter feed change the mind of those leading China?

GORKA: If you can win a U.S. election with it, I think it's powerful, Bill, don't you?


BRIGGS: China's state news media has responded to President Trump's tweets, calling them, quote, emotional venting. Very few people in China can even see Twitter, which is blocked by the government. KOSIK: In a landmark ruling, a Massachusetts judge has sentenced

Michelle Carter to 15 months in prison for her role in her boyfriend's suicide. Prosecutors say Carter sent Conrad Roy numerous text messages, one reading, just do it, urging him to take his own life in 2014. Both teens were battling mental health issues. Carter was convicted of involuntary manslaughter back in June. The judge stayed the sentence Thursday, allowing Carter to remain free on appeal.

BRIGGS: Firefighters tackle a spectacular fire at one of the tallest buildings in the world without injuries or loss of life. The 84-story Torch Tower in Dubai unfortunately lived up to its name as one side of the building lit up, engulfing about 30 to 40 residences. Officials say the building was evacuated and fire put out in about two hours. No immediate word on the cause, but the tower has caught fire before.

[04:50:00] Its exterior paneling went up in a dramatic blaze two years ago.

KOSIK: Amazing pictures.

BRIGGS: Remarkable.

KOSIK: All right. A big test for the Trump economy today. The July jobs report comes out in less than four hours from now. We're going tell you what to expect on CNN "Money Stream" next.


BRIGGS: It's been a few weeks since the president ordered the CIA to discontinue a program arming and training anti-Assad rebels in Syria. The decision already having an impact on the ground with Russia and a Syrian regime now trying to entice some rebel units to switch sides and fight for Assad.

CNN's Fred Pleitgen live in Syria with the latest.

Fred, good morning to you.

With this new momentum, are Russia and the Syrian government finally fighting ISIS?


Well, you know, one of the things that's remarkable is to see how much Russia has expanded (AUDIO GAP)

[04:55:10] BRIGGS: Apparently having some audio issues there with Frederik Pleitgen in Syria. We will get back to him as soon as we regain that audio.


KOSIK: OK. Moving on to Air France, expanding its no-fly zones around North Korea as a precautionary measure. This comes after North Korea last week tested an intercontinental ballistic missile that flew within miles of the flight path of an Air France passenger jet. The airline did not specify which areas around North Korea the non-flyover zone is expanding to.

BRIGGS: Former national security adviser Susan Rice has been given permanent clearance to classified information. A senior administration official says current national security adviser H.R. McMaster wrote to all his predecessors in that job, extending their security clearances.

KOSIK: Now, the official calls this common practice and says it doesn't mean Rice or other ex-national security advisers now have open access to any classified data that they want. Some House Republicans, they've criticized Rice for improperly unmasking Trump associates in intelligence reports, a claim Rice has repeatedly denied.

All right. Let's get a check on CNN "Money Stream" this morning.

Global markets mixed just after the Dow managed to close at its seventh record close in a row. It was up about ten points. The Nasdaq and the S&P 500 falling along with tech stocks.

The market dipped slightly after news broke of the grand jury subpoena in the Russia probe. But overall, Wall Street really has been ignoring all the turmoil in Washington. Instead it's been focusing on strong earnings and a solid economy.

And investors are going to get a good gauge of how the economy is doing with the July jobs report coming out in a few hours. It likely will be another strong month. Economists predict 183,000 jobs were added to the economy, and that unemployment will fall back to 4.3 percent. That's actually the lowest level in 16 years.

Rhode Island just made community college free. It's the fourth state to do so following New York, Oregon, and Tennessee. So, beginning this fall, the state will cover tuition and fees at the community college of Rhode Island.

The four-year pilot program will be paid for from the state's budget. And to be eligible, students have to be state residents and have to have just graduated high school. They also have to continue working in the community after they graduate.

Facebook is continuing its quest to crack down on fake news. It's introducing a new feature called "Related Articles," providing additional information on stories that are shared on its site. The aim is to make users think twice about whether a story that they're reading on there is really true, and many will be fact checked by third-party sites.

Facebook faced harsh criticism for letting fake news go viral during the election. So, it's really taken a lot of stops to stop misinformation, including targeting and removing accounts that spread false news. But I'll tell you what, all that fake news stuff to Facebook, it drove me away from Facebook. I really don't go on there anymore.

BRIGGS: Well, that's a step, but they've got a long way to go. People buy it and they spread it and they believe it. It's a massive problem.

All right. Ahead, the special counsel is utilizing the Russia investigation and the Trump campaign rallies were back in West Virginia last night.

EARLY START continues right now.



DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The Russia story is a total fabrication. It's just an excuse for the greatest loss in the history of American politics. That's all it is.


BRIGGS: We even saw the return of the "lock her up" chants, Alison, they were back.

ROMANS: Yes, they were. And that is President Trump fighting back after reports emerged that grand jury subpoenas have been issued in the Russia investigation.

BRIGGS: And CNN has learned special counsel Robert Mueller following the money, investigating possible financial crimes as part of the ongoing probe into the Trump campaign. He was all fired up in West Virginia last night. And the base, boy, they sure do love him. They wait in line hours to see the speech. It was -- a lot of the campaign rhetoric.

ROMANS: Maybe he needed the distraction, you think? A lot going on.

BRIGGS: He needed the energy, that's clear.

Good morning, everyone. Welcome to EARLY START. I'm Dave Briggs.

ROMANS: Good morning. I'm Alison Kosik. It's Friday, August 4th. It's 5:00 a.m. in the East.

And a major advance in special counsel Robert Mueller's investigation of Russian meddling in the 2016 election. A source familiar with the matter telling CNN a grand jury has issued subpoenas relating to Donald Trump Jr.'s meeting with a Russian lawyer at Trump Tower. CNN has learned the subpoenas seek both documents and testimony from people involved in that meeting. Mueller's team continuing to probe whether the president or any of his campaign associates colluded with Russia during the president's campaign.

BRIGGS: A spokesman for Mueller's office declined to comment on the reports which were first posted by the "Wall Street Journal" and "Reuters".