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Back and Forth Threats; North Korea Tensions; U.S. Diplomats Possibly Targeted in "Acoustic Attack"; FBI Raids Manafort Home; Lawsuit over Trump's Business Ties Heads to Court. Aired 12-1a ET

Aired August 10, 2017 - 00:00   ET



{00:00:06] JOHN VAUSE, CNN ANCHOR: This is CNN NEWSROOM, live from Los Angeles.

ISHA SESAY, CNN ANCHOR: Ahead this hour.

Back and forth in the war of words between the U.S. and North Korea in an increasingly dangerous dialogue.

VAUSE: FBI seizure -- agents raid the home of Donald Trump's former campaign chairman -- Paul Manafort.

SESAY: And a lawsuit (inaudible) Trump's business ties goes to court.

VAUSE: Hello, everybody -- great to have you with us. I'm John Vause.

SESAY: And I'm Isha Sesay. This is NEWSROOM L.A.

North Korea is doubling down on its threat to strike Guam. Military leaders say they're ready to launch four missiles that would cross over Japan and land in the waters near the U.S. territory. They say they'll present the plan to Kim Jong-Un by mid-August.

VAUSE: Meantime, the U.S. Defense Secretary has made a dramatic ultimatum of his own, warning North Korea against actions which could lead to the end of the government there and the destruction of its people. James Mattis says "The DPRK regime's actions will continue to be grossly overmatched by ours and would lose any arms race or conflict it initiates."

That follows President Donald Trump ominous warning from Tuesday which sources have told us was improvised.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: North Korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen.


VAUSE: Joining us now from Guam, journalist Robert Santos, in Seoul standing by CNN's Alexandra Field, and in Tokyo CNN's Sherisse Pham. And Santos, we will start with you.

The U.S. Secretary of State Rex Tillerson during a stopover on Guam said Americans should sleep well at night. How did the people of Guam go to sleep last night?

ROBERT SANTOS, JOURNALIST: You know, certainly the (inaudible) people did not lose any sleep. You know, they went to bed yesterday knowing what was said but also resigned to the fact that there's not much they can do. That they could simply rely on their faith in God, this is a predominantly Catholic island; and rely and be confident in our island leaders all the way up to the White House.

But waking up this morning, certainly hearing these threats again, it was definitely a shock to hear. I think you've got definitely a lot of people saying, wait a minute, is this possible? Is this guy serious? Talking about Kim Jong-Un.

But you'd also have some people who are saying, look, we are protected. One particular resident I spoke to -- I spoke to dozens of residents here -- and they actually told me that, you know, President Trump in his peculiar and unconventional way is upholding the sanctions as best as he could. I'm glad we have a president who can stand up to a tyrant like Kim Jong-Un.

And then you have others who are saying, wait a minute, it's because of President Trump and letting his ego get in the way of decision making that we are caught in the middle -- that Guam is caught in the middle between the U.S. and North Korea.

VAUSE: Ok. Robert Santos there in Guam. Stay with us for a moment. We'll head over to Seoul in South Korea.

SESAY: Alexandra Field -- to you now, with North Korea making clear that these four missiles -- that if they were to be launched it would fly over Japan. Give us a sense of the reaction where you are.

ALEXANDRA FIELD, CNN CORRESPONDENT: Well, officials in South Korea, defense officials to be precise are calling the rhetoric from Pyongyang, the threats of this kind of an attack absurd, they are broadly condemning this kind of rhetoric and they're making a real show that they stand with their ally, the U.S.

Not only are they calling the claims absurd. They also call these claims of a study to strike Guam as a challenge of the U.S.-South Korean alliance. So they are clearly trying to show that they are very firmly allied with their U.S. counterparts here and saying that they won't tolerate such a strike or even such rhetoric or saying that any provocation would be met with a response and warning North Korea that it's military, that South Korea's military is ready to engage in a response to a provocation if needed.

So they are trying to send a strong message, a strong signal. This comes after they had condemned this harsh language from North Korea just a day ago.

As for that fiery rhetoric from President Donald Trump, it's not something that officials have commented on publicly. Again, a lot being made of the importance of the alliance between South Korea and the U.S. at this moment -- Isha.

SESAY: All right. Alexandra Field there in Seoul -- thank you for that update. Appreciate it.

VAUSE: And we'll head to Tokyo now and Sherisse Pham is there. So Sherisse -- as far as Japan is concerned there's also the threat that these missiles will fire over its territory. How are they now dealing with this increased threat level coming from the North Koreans?

SHERISSE PHAM, CNN CORRESPONDENT: Well, the Japanese government is saying today that these are obviously very provocative comments to the region and saying quote, "we can never tolerate provocations from North Korea".

[00:05:02] And of course, all of this -- this escalating war of words between North Korea and the U.S. coming at a very sensitive time here in Japan because this week marks the anniversary of the bombings of Hiroshima and Nagasaki, the 72nd anniversary.

And so, you know, it is very tense here and even though Japan is pushing back and saying that we will not tolerate these provocative comments, this is a country that has held a very passivist (ph) posture since the end of World War II.

So, also like South Korea, maintaining its strong alliance with the U.S. and saying we support our ally in saying that all options are on the table -- John.

VAUSE: Sherisse -- thank you.

Quickly, back to Guam and Robert Santos. So Robert -- there's still a lot of questions about the North Korea missiles, their range, their accuracy, the distance they can travel. How much confidence though is there on the island there in the U.S.'s military ability to defend the island?

SANTOS: Look, there's certainly a lot of confidence. Our governor has assured us. Our congresswoman has assured us as well that they are getting the assurances from the top military leaders all the way to the White House.

So we are extremely confident. You know, Guam is a patriot as much as any state in the mainland. We have fighters here on the island who have been involved in just about every war that the U.S. has been involved in. So not only do we have the manpower here but we believe that there are sufficient U.S. military assets here to protect the island.

Having said that there are certainly some people who say are we really certain of that. We really don't know North Korea's full capabilities.

VAUSE: Ok. Robert -- thank you. Robert is a journalist. Robert Santos there in Guam; Alexandra Field in Seoul, South Korea; and Sherisse Pham there in Tokyo.

SESAY: Well, President Trump isn't backing down from his fire and fury threat. And instead he's underscoring America's nuclear might.

In a tweet he said his first order as president was to renovate and modernize the nuclear arsenal. He said he hopes the U.S. would never have to use the weapons. But he added quote, "There will never be a time that we are not the most powerful nation in the world."

Well, joining us not to discuss this and much more is CNN military analyst Lieutenant Colonel Rick Francona. Colonel Francona -- good to see you once again.

We will get to the President's nuclear arsenal tweet in a moment. Let's first discuss this latest rhetorical salvo from Pyongyang as they release more details of a planned show of force to be carried out by four intermediate range missiles targeting the waters off the coast of Guam.

How confident are you, Colonel Francona, that these Hwasong-12 missiles could actually reach their declared target?

LT. COL. RICK FRANCONA, CNN MILITARY ANALYST: Yes, that's a big question. You know, they've only fired this missile four times and three of the launches were failures. So they've achieved one successful launch for this and they're banking this capability on that one successful test.

So we don't know the reliability of this missile. We know that it has the range to get there. That's about all. We don't know how accurate it is. We don't know what kind of warhead it's capable of carrying.

So I'm chalking this up to a lot of rhetoric on the part of the commander of the strategic rocket forces in North Korea.

This threat, this threat to launch four missiles at Guam did not come from Kim Jong-Un. It came from the commander of the rocket force. So I don't know how much weight this really carries.

I suspect that what he's doing is doing the same thing that the Americans are doing. He says I'm giving my commander-in-chief military options. This is one option I'm presenting to him.

SESAY: The source of the statement is noteworthy. Also noteworthy is the fact that the North Koreans make this planned show of force so clear; that they'll reveal details that will be ready by the middle of August. Why would they telegraph their moves in such a way?

FRANCONA: Yes, it's interesting because I think they're giving the United States an opportunity to enter some sort of a dialogue. You say we'll have this ready by mid-August so that gives us time to sit down and figure out some way to back down from the brink because now both sides have unleashed this firestorm of rhetoric and now both sides are getting closer and closer to having to do something. I think the North Koreans may be saying, listen, we've got until the middle of August to talk. So let's do so. I don't know if that's true. I'm hoping that that's what's happening here. And the fact that it was the commander of the rocket forces and not Kim Jong-Un also gives Kim Jong-Un the chance to come in and say no, wait a minute, wait a minute -- I'm going to countermand that order and give the diplomacy a chance.

SESAY: Ok. All of that being said, you're saying that there is a -- there's still possibly a window here to talk. If you're sitting in Japan, if you're part of that government and you hear these details of, you know, these four missiles flying over your nation, if they are indeed sent out to target Guam, how worried should they be?

FRANCONA: I don't think they should be worried because they're not the target. But I think they're very concerned because those missiles are going to fly over their territory and now they're faced with a challenge.

[00:10:06] Do they react? Do they try and shoot them down? Do they let the U.S. forces in country try and intercept these missiles? Or do they just allow them to fly over they territory?

This puts Japan in a real quandary because they have to decide what they're going to do. And how they react will send a signal to the North Koreans of how strong that alliance between Japan and the United States really is.

SESAY: You talk about how Japan reacts. Let's talk quickly about how Guam might react in the event of such a dispatch of missiles. I mean what can you tell us? I mean would the U.S. commander on Guam have the authority to intercept them?

FRANCONA: Yes. That's a question I don't know the answer. I don't know how far down the authority to intercept or engage has gone. I know that the commander of Pacific Command would have that authority and has delegated that down to the forces on Guam.

Remember, Guam is United States territory. That's an American Air Force on Guam. So now you're talking about not attacking the U.S. facility in another country, you're talking about attacking a U.S. facility in the United States.

So I think there will be a reaction. And there are missile defenses on Guam that are capable of intercepting these missiles. The THAAD was built just for this type of a missile.

Four missiles they could probably handle; more than that they may be overwhelmed. But I think Guam is in a good position to defend itself.

SESAY: All right. Let's talk about the President's tweet about America's nuclear arsenal. He said that one of his first orders, in fact, I think he said it was his first order from becoming President was to renovate and update America's nuclear arsenal.

That has been widely dismissed, Colonel Francona, as misleading saying it's been made known that such reviews of the U.S. nuclear arsenal actually are mandated by Congress. The last one was ordered by President Obama back in 2010.

Do we have any sense of to what extent the U.S. nuclear arsenal has actually been modernized since Trump took office?

FRANCONA: Well, even the documents that come out of the Defense Department say that the modernization process is over a decade-long because of the expense involved in doing it. They have to spread it out over multiple years.

Yes, you're right. These -- they're called quadrennial defense reviews that the nuclear posture statement. It's supposed to be done very four years. What we're founding out is it's done every eight -- or every time a new administration comes into office.

This is one of the first things they do. And it goes all the way back to at least 1994. So this is not something unexpected. He did give the order but it's not something out of the ordinary.

SESAY: All right. Colonel Rick Francona joining us there. Colonel Francona -- always a pleasure, thank you.

VAUSE: We will take a short break here.

When we come back Donald Trump drew a red line with North Korea and it seems Pyongyang has called his bluff. Now it could be a question of presidential credibility.


[00:15:00] SESAY: Returning to our breaking news. You're looking across the demilitarized zone rather, between North and South Korea as the stand off between Pyongyang and Washington brings tensions to their highest post in decades.

VAUSE: North Korea is now giving specific details about its plan for a military strike on Guam and the U.S. president is following up threats of fire and fury by tweeting about the U.S. nuclear arsenal.

SESAY: Well Mr. Trump has certainly taken a hard line on this crisis breaking with previous administrations.

VAUSE: But the ultimate question is a simple one. Will it work?

Here's Brian Todd.


BRIAN TODD, CNN CORRESPONDENT: President Trump's message to Kim Jong- Un -- have no doubt about American firepower if you continue to threaten the U.S.

TRUMP: They will be met with fire, fury, and frankly power, the likes of which this world has never seen before.

TODD: Possibly playing the good cop, the President's top diplomat stressed nothing has changed militarily in the region. REX TILLERSON, UNITED STATES SECRETARY OF STATE: I think the President -- what the President is doing is sending a strong message to North Korea in language that Kim Jong-Un would understand.

TODD: Kim's regime has often used apocalyptic rhetoric. Its state- run media recently saying if the U.S. teases North Korea with sanctions and military might, America will be quote, "catapulted into an unimaginable sea of fire".

But the concern now is that the President and some members of his administration are venturing on to dangerous terrain by provoking the young tyrant.

ROBERT MANNING, THE ATLANTIC COUNCIL: Part of this escalating rhetoric game which I think is really not very helpful and he's just ratcheting up tensions. And my fear is this is how nations blunder into wars.

TODD: Trump's Defense Secretary seemed to push Kim even more saying North Korea should stop considering actions quote, "that would lead to the end of its regime".

Analysts say that's what might provoke Kim more than almost anything else -- the threat of being tossed out of power or assassinated. They say we should never lose sight of what this man can do even to those close to him when threatened like that.

BRUCE KLINGNER, FORMER CIA ANALYST: He even had his uncle, his mentor, executed by anti-aircraft artillery. He was seen as the second most powerful man in North Korea. And he was a relative and Kim Jong-Un took him out.

TODD: Experts say Kim like his father is known to use bluster in a calculating way, to stir the pot then sit back and gauge the response. But even if they're speaking in terms Kim would quote, "understand" some believe President Trump and his Defense Secretary will get the opposite of what they're looking for from Kim's Regime.

KLINGNER: They say they need nuclear weapons to deter against this, you know, war-hungry United States. So these kinds of comments or even other comments vowing to attack North Korea if they cross a technological threshold will only affirm that to North Korea's mind why they need their nuclear weapons.

TODD: But there are those who say the rhetoric from previous American presidents hasn't worked and tougher talk is needed right now. One analyst who has supported President Trump in the past says this is a more dangerous moment than Trump's predecessors faced with North Korea. And the President's language sends a necessary message to Kim that America can act with force if pushed.

Brian Todd, CNN -- Washington.


VAUSE: Well, joining us now Michael Genovese -- he is the president of the Global Policy Institute at Loyola Marymount University. Michael -- thank you for being with us.


VAUSE: You know, North Korea essentially has called the President's bluff now. If he doesn't follow through on the fire and fury threat, where does that leave his credibility and the credibility of the U.S.?

GENOVESE: Well, his credibility was on shaky ground to begin with. And when the President said -- and many people say it was just off the cuff -- I think it was probably more deliberate -- that if North Korea makes another threat, they'll get fire and fury, et cetera.

To not back that up, to wilt when almost immediately the North Koreans do make another threat -- a very serious one to Guam and if the President doesn't act then why should -- or would anyone believe him.

Your word has to be gold. Your word has be your bond. And that allows you to work with your allies and your adversaries so that everyone knows that what you say you mean and you mean what you say.

VAUSE: So your adversaries don't believe you and your allies don't trust you, essentially.

GENOVESE: Well, if you cry "wolf" all the time or "the sky is falling" then people stop believing you and they start looking for something more subterranean as what's going on.

VAUSE: This is a president who seems to always talk in wild exaggerations. Listen to this.


TRUMP: Grassroots movements the likes of which the world has never seen before.

We're all part of this very historic movement, a movement the likes of which actually the world has never seen before.

Unemployment is the lowest it's been in 17 years. Business enthusiasm is about as high as they've ever seen.

We're being very, very strong on our southern border and I would say the likes of which this country certainly has never seen --


VAUSE: And you know, much has been made of the fact that this is an administration and a president who seems to lie about pretty much everything, the small things, the big things -- inauguration crowd size.

[00:20:07] Back in March, the "Wall Street Journal" wrote this in an editorial. "If President Trump announces that North Korea launched a missile that landed within 100 miles of Hawaii would most Americans believe him? Would the rest of the world? We're not sure, which speaks to the damage that Mr. Trump is doing to his presidency with his seemingly endless stream of exaggerations, evidence-free accusations, implausible denials and other falsehoods."

So clearly we're now at that moment when, you know, the mistruths or misstatements -- however you want to call it about the inconsequential, now has consequences.

GENOVESE: And this is part of the Trump persona is bombast, is exaggeration. It's part of who he is. He's a showman. He's a salesman. He doesn't act presidential.

And that has consequences because the world is run by people who have political experience and know political exchange and transaction.

He wants to be a transactional and transformational president. And so, you know, we've been dealing far too often in the inner reaches of the Trump psyche but it's important to do diagnosis from a distance because it is so consequential.

And so we need to figure out what motivates him so we can figure out when he's telling the truth and when he's not.

VAUSE: Is it now the point where the rest of the world will look to Rex Tillerson, the Secretary of State; James Mattis, the Defense Secretary to find out what the position really is because the President of the United States just is no longer believable.

GENOVESE: But they're speaking in forked tongues as well because you see one person says this Monday, another this on Tuesday -- three different versions on Wednesday. There is no authoritative voice to the extent that anyone other than the President makes policy.

And so they're not on the same page and they don't even have people at the staff level right below the secretary level who can employ policies and so no one knows what's going on.

VAUSE: Ok. Trump now seems to be on par with Nixon when it comes to a lack of credibility, and the situation the Vietnam War caused this credibility gap for Lyndon Johnson which is where the term was first coined.

Once you lose someone's trust, how hard is it for a leader for a president to win it back? Can they do it?

GENOVESE: There are times when you can lose trust and gain it back. The whole situation started in the 1960s when John Kennedy was president and it was widely known among reporters that he was having very irresponsible sexual relations with a range of women. But gentlemen didn't report that unless it was part of the job and it didn't have an impact on the job.

But Vietnam and the lies of Vietnam led to the credibility gap which ended Johnson's presidency, followed almost immediately by Watergate and the lies that led to a very -- to a presidency-bashing era.

That was compounded by the fact that the next two presidents Carter and Ford, two of the most decent men you would ever meet but politically ineffective. Do you need to be Machiavellian to be successful?

Then Reagan came in with the Iran contra scandal and he did damage again. He was able to recover because he had a deep reservoir of trust built up in the past.

Then you had Clinton who with "I did not have sex with that woman", turns out that that was a lie. He was able to recover to a large extent for two reasons. One, because he was such a masterful politician; and two, the economy was in such great shape that we were willing to forgive.

Then you had Trump with weapons of mass -- excuse me, W. with weapons of mass destruction.

Trump's only been in office less than seven months and he's already trying to reach the heights of Nixon.

VAUSE: Ok. Such is the president who has this credibility problem -- aides in the White House and others, you know, they either knowingly or unknowingly lie for the President. You know, they've gone out -- they've deliberately, you know, told a mistruth or they've been fed wrong information which is also a lie.

So the entire White House it seems, you know, has this whole issue -- this credibility issue.

GENOVESE: Everything starts at the top. The message that the President sends is what the people beneath him will employ. And so if there's a virus, it spreads. And the virus that's spread is the lack of credibility and the sort of casual relationship to the truth that they have.


VAUSE: -- for this administration.

GENOVESE: Right. And anything that will boost the President, puff him up, make him feel good -- the President gets reports twice a day with feel good news. And so it's hard to bring bad news to the President. They blame the messenger which is exactly why they attack you. Not because you are engaged in false news, fake news but because you quote them.

And those quotes have damage -- they have consequences. Presidents don't want to be quoted. And so it's easier to blame the messenger for the bad news than to take responsibility.

VAUSE: Then they deal with the bad -- ok.

Michael -- thank you so much. Good to speak with you.

GENOVESE: Thank you.

SESAY: Well, despite hostilities with the West, North Korea's top court has released a Canadian pastor held longer than any western prisoner in decades.

It says 62-year-old Hyeon Soo Lim was granted sick bail for humanitarian reasons. Lim was given a life sentence of hard labor in 2015 for supposed crimes against the state.

His family says he was in North Korea on a humanitarian mission and that his health has deteriorated while in custody.

[00:24:57] VAUSE: The U.S. believes Cuba has subjected several State Department employees in Havana to a so-called acoustic attack using some sort of sound producing devices. At least two employees had health problems so serious they had to be brought back to the states for treatment. One official said at least one employee might have permanent hearing loss.


HEATHER NAUERT, STATE DEPARTMENT SPOKESWOMAN: They've reported some incidents which have caused a variety of physical symptoms. I'm not going to be able to give you a ton of information about this today. But I'll tell you what we do have that we can provide so far.

We don't have any definitive answers about the source or the cause of what we consider to be incidents --


VAUSE: The U.S. has expelled two Cuban diplomats as a result of the incidents and Cuba denying it mistreated the American envoys.

SESAY: All right. Quick break here.

What were FBI agents looking for when they raided the home of President Trump's former campaign chairman? We'll tell you what we're learning about them and where it could lead.


VAUSE: Welcome back everybody. You're watching CNN NEWSROOM live from Los Angeles. I'm John Vause.

And I'm Isha Sesay. The headlines this hour.

North Korea is offering detailed plans for a military strike on Guam. An Army general says Pyongyang would launch four missiles that would cross over Japan and land in the waters near the U.S. territory. The military says it will present the plan to Kim Jong-Un by mid-August.

VAUSE: U.S. Defense Secretary James Mattis is warning North Korea to cease any actions that quote, "would lead to the end of its regime and destruction of its people". He says Pyongyang would lose any arms race or conflict if they did.

SESAY: Police have arrested a man accused of ramming a car into a group of soldiers in a Paris suburb early Wednesday. Officers shot and wounded him on a highway north of the city. Six soldiers were wounded in the attack, three seriously. France's counter terror unit is investigating.

VAUSE: We're following major developments in the criminal investigation of the Trump campaign's contacts with Russia. A source has told CNN FBI raided the home of former Trump campaign chairman Paul Manafort last month. The documents seized included financial and tax records.

SESAY: The information included material that had already been provided to Senate investigators. And Manafort's spokesman says he has consistently cooperated with law enforcement and did so this time as well.

Well, CNN law enforcement contributor Steve Moore joins us now with his analysis. Steve -- thank you for joining us.


SESAY: So the "Washington Post" first reported that this raid was authorized by a no knock warrant. When I mention this to you, you seemed incredulous. Give us some context. What does it mean?

MOORE: A no knock warrant is the kind of things you see on the cops TV show where the guys line up at the front door with a battering ram and just take the door open.

[00:30:00] You essentially are not even telling them that you're there before you're opening their door with a battering ram. That is your authorization. You don't have to even tell them you're there. And it's a predawn warrant. So I -- on SWAT probably helped serve 50- 100 no-knock warrants over the years. I never saw one executed except in a case involving violence.

SESAY: So this is remarkable to you?

MOORE: To me, I've not seen a white-collar investigation where this is done.

SESAY: OK. Let me ask you this.

If the end game here or the goal of this raid was simply to get documents, why not just subpoena them?

MOORE: Well, obviously somebody in the investigation didn't believe he was going to be forthcoming with these documents. And before you can get this warrant, you can't just say, Your Honor, we don't think this guy is going to be completely forthcoming with these documents.

No, you can't say that. You have to show that you can -- that there is probably a crime committed, that this person probably has evidence of that criminal or instrumentalities of the crime and the no-knock.

You can't just walk in and say, oh, we want it for 4:00 in the morning. No. You have to explain why it's absolutely necessary to do the no-knock which, in this case, could be only volatile memory or something that could easily be destroyed, which would make one wonder, what kind of setup does he have that they know of that would make him able to destroy his documents?

SESAY: Just so we're very clear to our viewers, it's a predawn raid. It could involve battering rams. They go in unannounced and they just disperse through the home or the location and they just take everything?

How does it work?

MOORE: What you have is a description of what you're looking for. For instance, if my car -- if I've got a warrant for a car I can search the garage. But I can't search your pantry because it won't fit in there.

But if I've got a warrant for papers, documents, I can search anywhere, anywhere where a piece of paper could fall, I can search for it. And so the first thing you're going to do is find the people in the residence, you're going to segregate them from their documents, from the materials in the house.

And then you are going to do the search with them away from these items.

SESAY: What does this signal for Paul Manafort?

MOORE: If he doesn't have a lawyer, grab one.


SESAY: But does it suggest that he is in very serious trouble?

I mean that was already the assumption here.

But this happening, what does that mean?

MOORE: The fact that they could -- that the FBI could get a warrant from a federal magistrate or a judge on this is very significant because you don't do it just on hunches. You have to have evidence. So this was shocking to me that they had that much information.

And more than what means to Manafort, I think what it means is this is a shot over the bow, telling everybody involved in this investigation, we're not messing around here. If you think that you can play with us, this is Mueller saying, from the very beginning, don't even try it.

And so I think this was a very effective and, to me, was in the bureau for 25 years, this is shocking.

SESAY: Steve Moore, always good to get your perspective, thank you so much.

MOORE: Thank you.

VAUSE: Time now for another quick break. When we come back, a lawsuit arguing the U.S. president's business ties violate the Constitution is heating up and heading to court. (MUSIC PLAYING)




VAUSE: A legal challenge to Donald Trump's business ties is headed to federal court. Lawyers for the U.S. president will try to get the lawsuit thrown out when they go before a judge in October.

SESAY: The president is being sued by a government watchdog group over alleged violations of the emoluments clause in the U.S. Constitution. It prohibits the president from accepting gifts, money or other things of value from foreign governments.

VAUSE: The plaintiffs claim Mr. Trump is using his presidency to promote his hotels and resorts to foreign officials. Others in the hotel and restaurant industry have joined the lawsuit. They say Mr. Trump's presidency gives him an unfair business advantage over competitors.


VAUSE: Norm Eisen is a CNN contributor and former ethics star in the Obama administration. He joins us now from Palo Alto in California.

Norm, good to see you.

NORMAN EISEN, CNN CORRESPONDENT: Hello, John, thanks for having me.

VAUSE: We should also note that you are chairman of CREW (ph), which is the watchdog group actually currently suing the president and heading to court in October. So Trump's lawyers have tried a number of times to have this case dismissed. Now a judge has set a date in October for formal arguments here.

How significant is that?

EISEN: John, it's very significant. The founders of the United States wrote in the Constitution that a president should not accept foreign government cash or benefits -- or cash or benefits behond his salary -- from his own federal government or the states.

President Trump is doing all of it and now we have a federal judge in New York City who's going to decide whether or not he's violating the Constitution. We think he is.

VAUSE: This is one of about half a dozen lawsuits targeting income, which the president receives from foreign sources. The Trump Hotel in Washington seems to be a lightning rod to many. Here's part a report from "The Washington Post" earlier this week.

"This is nothing Washington has ever seen. For the first time in presidential history, a profit-making venture touts the name of a U.S. president in its gold signage."

And then there's this from "The Economist."

A new "director of diplomatic sales" has steered Kuwaiti and Saudi Arabian bookings away from rival D.C. hotels to the Trump International. In the words of Mr Trump's son, Eric, the family brand is now "the hottest it has ever been."

Trump's lawyers have argued none of that matters because it's all private income. It has nothing directly to do with the office of the presidency. Now this argument is going before a judge in court, in open court.

Is that legal argument on shaky ground?

EISEN: John, the legal argument that the president's lawyers have made is on extremely shaky ground. It doesn't comport with the plain meaning of the Constitution. We actually went and looked in the dictionary.

The Constitution says "no foreign emoluments." That includes profits and they want the president to be able to accept profits. It is flatly against the language of our Constitution. And it's troubling and we're glad that the judge is going to be hearing this matter in October.

VAUSE: Earlier this week, the Trump Organization posted this on Twitter.

"Delighted to announce the launch of the Trump Estate Park Residences, a collection of luxury villas with exclusive access to Trump Golf Dubai."

This is a Trump branded, not a Trump owned development in Dubai.

So what does this mean for the Trump Organization's promise to avoide new foreign deals while Donald Trump is in the Oval Office?

EISEN: Well, they have -- had a record of stretching these promises to the breaking point, of finding loopholes. Of course, the reason that the Trump Organization said that in the first place is because every time there is a foreign deal that's done, it raises the question of whether the president is protecting his own personal interests, as he shouldn't be doing, or the best interests of the United States.

So of course they have to stretch. It's just not right and we expect that the court is going to have some ptough questions for the president and his lawyers.


VAUSE: There's still a long way to go in this case but if -- got to stress if -- if ultimately the president is found to have violated the Constitution and the emoluments clause, what happens then?

EISEN: Well, it's one of the oldest principles of our nation; when the court orders anybody, including a president, to stop doing something, they have to listen. No person is above the law. That's the fundamental principle of the American system.

If the court orders, as we think, is consistent with the Constitution, President Trump, you must stop taking these, then the president is going to have to find a way to cease and desist from accepting these foreign government payments and other benefits that he's currently taking. Then the ball will be in his court to figure out a way to step away from them.

VAUSE: So it was (INAUDIBLE) make a choice, either put the whole business in like a blind trust, where he has absolutely zero influence, no family members, nothing or step down as president.

EISEN: John, for decades, presidents of both political parties, with far fewer conflicts than Donald Trump, have done just that. They've stepped away from the businesses, they give them to a trust, the blind trust. A president doesn't get involved in what's held in that trust. The trustee sells the interest.

That's what Donald Trump should do. There's a simply time-tested solution and since he hasn't voluntarily done it, now he's facing these court proceedings.

VAUSE: And Jimmy Carter put the peanut farm in a blind trust, I think, many, many years ago. Just an example.

Norm, good to see you. Thank you.

EISEN: Thanks, John. Nice to be with you.


SESAY: Just an example.

VAUSE: The peanut farm.

SESAY: Finally, with the right amount of cash, you and your family can check out some very early djtrump real estate.

VAUSE: The president's childhood home is now available for rent on Airbnb. It's Jamaica Estates, a wealthy neighborhood in New York, and it's yours for $725 a night.

SESAY: Bargain.

VAUSE: Live like a president -- or a would-be president.

The president's father, Fred, built the Tudor style home back in the 1940s. Young Donald lived there until he was 4 years old.

SESAY: Airbnb says the space for 20 guests -- a big family or lots of friends -- and there's no relationship with the White House or the Trump Organization as they stress in any way.

VAUSE: No issues with the eclause. SESAY: No. You can sleep easy.

VAUSE: The house is huge.

SESAY: Oh, really.

Thank you for watching CNN NEWSROOM, live from Los Angeles. I'm Isha Sesay.

VAUSE: I'm John Vause. Don't forget to check out our Twitter account @CNNNewsroomLA for highlights and clips of our shows. Tweet us. We do read them. "WORLD SPORT" is up next and then we will be back with (INAUDIBLE) news from all around the world. You're watching CNN.