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Credibility Issue Looming at the White House; Paul Manafort Hearing on Request to Dismiss Fraud Charges; Unemployment Falls Below Four Percent for First Time Since 2000; Sanders Repeatedly Says She Gives The "Best Info" She Has; Hawaii Volcano Erupts. Aired 9-9:30a ET

Aired May 4, 2018 - 09:00   ET


[09:00:00] CUOMO: I learned that the hard way.


CUOMO: It's like when they say (INAUDIBLE), Frankenstein, I get nervous every time I say those.

CAMEROTA: Time for "CNN NEWSROOM" with John Berman and Poppy Harlow.

CUOMO: Harlow.


JOHN BERMAN, CNN ANCHOR: All right, good morning, everyone. I am John Berman.

POPPY HARLOW, CNN ANCHOR: And I'm Poppy Harlow. We're glad you're with us. And this morning, quote, "The president is very honest." That is what the president's senior adviser, Kellyanne Conway, just said this morning.

We're sure the president will back her up on that. Just be careful, though, because if he says it today, he may change it tomorrow. This morning a growing credibility crisis at the White House.

BERMAN: The White House will have to deal with this even as they tout very strong employment numbers just in. The unemployment rate dropped below 4 percent for the first time since 2000.

Now we could hear from the president on all of this very shortly. He leaves the White House just minutes from now. We are watching it very closely to see if he addresses either the jobs or the credibility gap.

CNN's Kaitlan Collins is there. Kaitlan?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, John and Poppy, this disclosure made by Rudy Giuliani is setting off another credibility crisis here in the White House because these staffers for months have been telling reporters that the president didn't know about that payment and didn't know where it came from. Of course the president himself blew all of that out of the water when he tweeted roughly 24 hours ago that he did. So we caught up with the White House Counselor, Kellyanne Conway, to

ask when she found out that this payment had been made to Stormy Daniels and the president had in fact reimbursed Mr. Michael Cohen for that payment. And this is what she told us this morning.


UNIDENTIFIED REPORTER: Kellyanne, when did you first learn that the president had reimbursed Michael Cohen for that payment made to Stormy Daniels?


UNIDENTIFIED REPORTER: Did you know about it before Sarah?

CONWAY: I have never heard about that during the campaign. I was the campaign manager, a lot crossed my desk.

UNIDENTIFIED REPORTER: Did you know about it last year in the White House?

CONWAY: I did not.

UNIDENTIFIED REPORTER: Did the president mislead the American people intentionally?

CONWAY: The president sent out three tweets on the matter.

UNIDENTIFIED REPORTER: Can we count on the president to be honest?

CONWAY: The president is very honest. He promised to cut taxes and he did. He promised to get North Korea and South Korea to sit down and change the course of history and they are. He's got his delegation over in China working on more fair, more reciprocal trade deals to stop screwing America and American workers, American interests and American businesses. We have a half a billion trade deficit with them that makes no sense to him.

And if you see him yesterday surrounded by different faith leaders of six different religions and you see the reformed man that he brought up to the podium, that's the president that I work for. That's the president I know. But you should look at his tweets on that matter.


COLLINS: Now it's quite something to say that the president has been honest when it comes to Stormy Daniels. Kellyanne Conway there kept referencing the president's tweet yesterday following up what Rudy Giuliani has said on Fox News Wednesday night. But she didn't bring up what the president said on Air Force One less than a month ago when he said he wasn't aware of that payment and he had no idea where Michael Cohen got the money for that.

But the White House is dealing with this new dynamic with Rudy Giuliani speaking on the president's behalf. There's a chance we could hear from the president himself as he heads to Dallas here in the next hour or so. And it would be nice to see what the president has to say about Stormy Daniels today -- John and Poppy.

BERMAN: Today.

HARLOW: We would.

BERMAN: The operative word.

HARLOW: Kaitlan, by the way, you asked Kellyanne the most important question this morning. You know, can the American people trust that he's being honest, so thank you for doing that. We hope he answers some questions today.

Kaitlan Collins at the White House, thank you.

Also happening now former Trump campaign chairman Paul Manafort back inside a Virginia federal court this morning. He's fighting to dismiss fraud charges brought against him by special counsel Bob Mueller.

BERMAN: Yes. We have this picture of him arriving at the courthouse just moments ago.

Jessica Schneider live in Washington with the very latest -- Jessica.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Yes, John and Poppy. Paul Manafort, he is on the attack against a long list of charges right here in Washington and in Virginia. This morning he's in Virginia federal court where his lawyers will once again argue that the special counsel does not have the authority to charge Manafort with numerous bank fraud charges, among others. They contend that the charges do not directly relate to the 2016 campaign and in turn they say it exceeds the special counsel's mandate.

Now notably Paul Manafort lost that exact same argument in D.C. federal court just last week, so how will it fare in Virginia? We'll see. So here is the breakdown of what Manafort now faces. He's up against five charges in Washington, D.C., including money laundering and foreign lobbying violations. And in Virginia where he is this morning, he's facing 18 federal charges largely related to bank fraud.

Now Manafort has really been the one defendant in the special counsel's probe here really attacking the case from every angle. He's maintained his not guilty plea even in the wake of his deputy Rick Gates' guilty plea and pledged cooperation. And of course there's the guilty pleas of Michael Flynn and other campaign aides.

[09:05:02] But this morning the battle for Manafort, it is in Virginia where he faces the stiffest charges. As you can see there, he faces a maximum of up to 305 years in prison if he's found guilty on all of these charges. You can see them all there, money laundering, bank fraud, conspiracy. So we'll see as they go to court this morning how this motion to dismiss fares there. Of course we'll wonder if it will have the same fate as a similar case in D.C. last week where, John and Poppy, the judge did not agree with Paul Manafort's lawyers that the special counsel had exceeded its scope, so we'll see what happens this morning in Virginia -- guys.

HARLOW: Thank you, Jessica, appreciate the reporting.

With us now, our Legal Analysts, Asha Rangappa and Paul Callan.

So much to go through with you both. Thanks for being here.

Paul, first, I want to get you on this because NBC's Kristen Welker put out overnight that she spoke with Giuliani and she says this, just spoke to Giuliani who says he revealed POTUS', the president's payments, quote, let's put this up if we have it, "to get out in front of the special counsel Southern District of New York" because at some point they would realize this information and leak it.

So he's basically saying this is good lawyering. This is good lawyer work. Is it?

PAUL CALLAN, CNN LEGAL ANALYST: Well, I think he's saying it's good lawyering and good PR because obviously there was a search warrant executed on Michael Cohen's office and the special prosecutor is going to find the stuff out from Cohen's records. So they're trying to get out in front of it.

I don't think it's good lawyering because Giuliani, among other things, made a statement that would indicate that this was a payment made in consideration of the political impact that the Stormy Daniels situation would have.

HARLOW: Right.

BERMAN: Right.

CALLAN: So that could put the president in the soup. So I don't say that's good lawyering.

BERMAN: And we'll talk about that. We'll talk about the campaign finance implications more because that continues to be an issue.

But, Asha, even if you accept the argument that it was a personal payment and not a campaign payment, there might be a separate issue here. And Sarah Sanders was asked about this at the briefing. Let's listen.


UNIDENTIFIED REPORTER: Did the president file a fraudulent personal financial disclosure last year when he filed a report that did not include a loan from Michael Cohen or any company affiliated with him? I mean, if there was no loan, then what would he have been reimbursing?

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: I -- I don't know. You would have to talk to the president's outside counsel.

(END VIDEO CLIP) BERMAN: So the Ethics in Government Act 1978 requires you file liabilities, disclose liabilities of more than $10,000. This is a $130,000 liability the president apparently had to his lawyer, Michael Cohen, yet he did not include that on his disclosures. Is that a problem, Asha?

ASHA RANGAPPA, CNN LEGAL AND NATIONAL SECURITY ANALYST: Yes, that can be a problem. So as you mentioned, quite apart from the campaign finance violations, the president had to file personal financial disclosures. And these are federal forms which he signs and assures are accurate. And if he lies on it, that is a separate violation, a false statements violation called 18 USC 1001.

Now the admission or the mistake has to be knowing and material. So, you know, he might say well, it was inadvertent, I didn't realize it. But the problem is, is that the continued pattern of trying to hide this in other ways, both in his public statements and what he's been saying kind of contradicts the idea that this would have been an inadvertent omission. So I think he has a separate issue going on right there.

HARLOW: Legal pickle after legal pickle after legal pickle. And Jeffrey Toobin said, Paul, that yesterday Giuliani's comments in the morning about, you know, well, we didn't want this coming out right before the election, so of course, you know, Michael Cohen took care of this, directly tying it to the campaign. Toobin called that just straight up a confession. So then Giuliani tries to clean it up a little bit later yesterday, here's what he told NBC.

"If there was no campaign, Cohen would have made the same payment in the same amount to prevent personal embarrassment and heartache to his wife." That's sort of trying to put the genie back in the bottle-ish. Does it work? Does it hold up legally at all?

CALLAN: It's very hard to put that genie back in the bottle. And I think any objective person looking at this would say the payment could have had a dual purpose, to help the president politically and of course it would help him personally as well and it would help the Trump Organization as well. The question is, does that constitute a campaign violation? And I think it does under existing law because it was so close to the campaign.

But on the other hand, these things are usually not handled as criminal offenses. They're handled as civil offenses and it's probably likely that the Federal Election Commission will just give him a pass because there aren't enough Democrats voting on that board to recommend charges.

BERMAN: All right. There's another new argument that Rudy Giuliani is making overnight. And really it is notable he has to keep on cleaning up the cleanup here. But this new argument he made overnight, let me read this to you. It was again part of this phone interview.

He said, "I don't think the president realized that he paid Cohen back for that specific thing," namely the Stormy Daniels hush money, "until we, his legal team action made him aware of the paperwork."

[09:10:07] Giuliani said the president responded, oh, my goodness, I guess that's what it's for. So he's suggesting the president was paying Cohen back this whole time without knowing he was paying him back this whole time.

Asha, there's a lot of leaps there. You know, is there any way to thread that legal needle?

RANGAPPA: No. This is -- it's getting more absurd by the second. And I think Giuliani should follow the advice that he should be giving to his client which is simply to not comment on ongoing matters. So what Giuliani is trying to do is now backtrack on the president's knowledge of basically this repayment of the loan to get to Paul's point, which is that if he knows about it, then he's got potential campaign finance problems.

It strains credulity to believe that he would have been paying this amount back without knowing what it was for and that this was happening on the side. But again, I think even if true, John and Poppy, this is -- we have to raise some questions. He doesn't know where -- you know, what's happening. We also know in this collusion case he claims that he doesn't know anything about what was happening with the people in his campaign. That raises its own questions about just what is he doing and does he know what the people around him are doing on his behalf.

BERMAN: Yes, it's very complicated. You have to contort yourselves --

HARLOW: But it seems like it's just saying pay a retainer to Michael Cohen, that's what Giuliani is arguing, and he takes care of everything that might look bad for you.

BERMAN: Right. Starting, though, when he is president roughly.

HARLOW: Right. Exactly.

BERMAN: Which is again it's hard to (INAUDIBLE) that whole thing.

Asha Rangappa, and Paul Callan, great to have you with us, thanks so much.

HARLOW: Thank you.

BERMAN: Other major news this morning, the U.S. unemployment rate dropped to 3.9 percent. That is as low as it's been since the year 2000.

HARLOW: Our chief business correspondent, Christine Romans, is here with us.

The monthly jobs number not as good as expected but this rate is very, very --

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes. I mean, John Berman was in his 20s the last time this unemployment rate was that low. I mean, think about --

BERMAN: That's true. That's true.

ROMANS: It's true. It's true. I'm just trying to put it in context.

BERMAN: Took me a little longer to do the math.

ROMANS: It's a long time ago. Look, a 3.9 percent, the first time below 4 percent. And look at it, remember when it was 10 percent, you know, the worst of the financial crisis? This trend, this trend is solid here. You have seen the unemployment rate going down for years now and now dipping below 4 percent. A lot of economists this morning are saying they think they could get down to 3.5 percent this summer.

But the worry is, are you going to find enough people to hire. That's one of the reasons why the rate of job increases seems to have stalled a little bit here because you can't hire more workers if you can't find those workers. So 164,000 net new jobs, that's still very good. 2.7 million jobs during this presidency. You know, it's just about on par with what you saw the last year and a half of the Obama presidency, so it's been a pretty good two or three years here.

Where is the hiring, you guys? 54,000 in business and information systems services. Those are highly paid jobs. Health care, that has been a steady performer. Manufacturing, 24,000 jobs there. It's been a pretty good run for manufacturing over the past six months. And I noticed in the government statistics they said that metal fabrication was up. Maybe that has something to do with the president's moves have been on trade.

You still have five million people, though, that are working part time and want to be working full time. That's a number that's been very stubborn so a lot of part-time workers. You have 7.8 percent underemployment. That's also the lowest since 2001, but it just shows you there are still out people who would like to be more fully engaged in the labor market and aren't.

And wages, 2.6 percent. If it really is such a great job market and you're hearing all this anecdotal reporting of how people can't find workers, employers can't find workers, why aren't wages going up more? That's been kind of the mystery here.

BERMAN: Economic conundrums that they're studying in the universities right now because we're in a whole new world, we're in a whole new economic world since the crash in 2007-2008.

ROMANS: Yes, we are. You're right.

BERMAN: Christine Romans, great to have you with us.


BERMAN: Thanks so much.

HARLOW: Thank you. BERMAN: Rudy Giuliani not just creating legal problems for the White

House. There is a credibility crisis as well. It wasn't just Rudy creating this. The question now is what does one believe?

Plus, the priest fights back. House Speaker Paul Ryan backs off his decision to dismiss the House chaplain.

HARLOW: And the most active volcano in the world is erupting right now. This morning more than a thousand people evacuating as lava streams down streets towards their homes.

BERMAN: I was just there. I was just there.

HARLOW: I know. That's unbelievable. This is happening.

BERMAN: Stunning pictures.

HARLOW: A live report ahead.



HARLOW: Quite a week it has been at the White House. The fallout is continuing and could be much more damaging. Changing stories, changing explanations have us all asking what and who can we believe?

BERMAN: Frankly, it has people inside the White House now asking what and who you can believe and that's a real problem.

Joining us now, Amie Parnes, CNN political analyst, and Caitlin Huey- Burns, national political reporter for "Real Clear Politics." You know, Rudy Giuliani is making clear, he told CNN yesterday, you know, I didn't tell the White House I was doing this, which the White House is telling us we were blindsided by this right now.

And now they're being forced to clean it up. It just goes to show we always talk about the disarray here, but the White House has a serious problem with making a consistent argument, Amie.

AMIE PARNES, CNN POLITICAL ANALYST: That's the problem. I mean, Sarah Sanders has a serious problem. She has to go out there and not only play defense every day, but now people are wondering, and that's kind of like what you have to do as White House press secretary.

But now people are kind of wondering, well, what were you saying when you said the best argument or the best whatever you were saying. You know, she has a huge credibility problem. I think that's a problem.

But inside the White House, everyone is wondering what's going on here, why didn't we know about this, why were we caught off guard so it's really a big problem for them.

HARLOW: This just feels so different from the typical the White House is in disarray story, because this gets to what I think "The Wall Street Journal," Rupert Murdoch owned, you know, more conservative- leaning editorial board argues this morning and it's this.

[09:20:06] "Trump is compiling a record that increases the likelihood that few will believe him during a genuine crisis. Trump should worry that Americans will stop believing anything he says."

What is the danger here? For the American people, whether you voted for him, whether you like him, but you need to be able to believe him in a moment of crisis.

CAITLIN HUEY-BURNS, NATIONAL POLITICAL REPORTER, "REALCLEARPOLITICS": Well, think about the backdrop of this North Korea negotiations just as an example. Rudy Giuliani, you know, there's this argument that Trump and Giuliani have wanted to take a more aggressive posture against Robert Mueller.

The multiple television interviews are indicative of that. But in doing so, you set up all this potential legal exposure, not to mention Rudy Giuliani was talking about releasing the American prisoners in North Korea, raising additional questions about security clearances and how he knew that information.

He's had to walk that back. He's had to walk back the comments that he made about why Donald Trump fired James Comey a little bit. So, as much as they're trying to be out there having an aggressive posture, it's creating additional legal exposure perhaps and also questions about how this White House can handle a crisis like North Korea, but also what their word means to people in those negotiations abroad. I think that's very significant.

BERMAN: You know, the president famously said during the campaign he could go out and shoot someone on Fifth Avenue and it wouldn't have any impact on his supporters, but we are starting to see an impact on his base. I'm not trying to be glib here, but Fox News, right, Neil Cavuto on Fox News where you don't see a line of criticism for the president. But Cavuto yesterday he had this to say. Listen.


NEIL CAVUTO, FOX NEWS ANCHOR: So, let me be clear, Mr. President, how can you drain the swamp if you're the one who keeps muddying the waters? I'm not saying you're a liar. You're president, you're busy. I'm just having a devil of a time figuring out which news is fake. Let's just say your own words on lots of stuff give me, shall I say, lots of pause.


HARLOW: That's a big deal.

BERMAN: Yes, your own words on lots of stuff give me lots of pause. That is from Fox News, Amie.

PARNES: And I've heard the same thing from a lot of people who supported him. You know, they're reading "The Washington Post" and seeing that he has misled or lied 3,000 times. That's about six lies a day. You know, this is in the backdrop, his supporters are reading this and taking note of what's happening.

I think there is a huge credibility problem. You know, there are the diehards who are always going to support him, but there are Republicans who did support him and are kind of like what are you doing to our party? This is the head of the midterm elections. This does not look good for us.

HARLOW: So, to that point, we had Charlie Dent, a Republican Congressman, who is a little more open with what he says I suppose.

BERMAN: Maybe more than a little bit.

HARLOW: Because he's leaving office at the end of the month, but it's notable what he told us. He said to us my party is going to pay a price for it in the midterm election. How heavy a price is the Republican Party do you believe going to pay? Because the president thinks they're going to hold on to the House and the Senate no problem.

BURNS: Well, it's interesting because we're right in the middle of a very heated primary election right now. Remember on Tuesday in West Virginia, and Indiana, Republicans are going to be choosing their nominees.

And when you look at those races, those candidates are trying their best to endear themselves as closely as they can to Donald Trump and particularly on the Mueller probe. They're using rhetoric like this is a witch hunt.

The Washington establishment, including Republicans in Washington, is after this president and, therefore, after you. That's the argument that we're going to be hearing I think for the next few months, at least as the midterms go.

On the other hand, though, you have the general election question, which is will this either fuel Democratic support, which we've seen in these special elections, and also convince independents, or those who were soft Trump supporters that this and kind of everything in the aggregate is just perhaps a little too much.

We don't know the answer to that, but in the primary system right now, we're seeing a different story.

BERMAN: I think the number that the White House will throw out when you bring up 3,001 lies, they're going to say 3.9 percent. They're going to say the unemployment rate is 3.9 percent. You know, very quickly right now, will there be tension between those two things?

PARNES: Definitely. I think if the economy is good, Trump is going to run on that. This is a huge -- this is what he promised. He promised to bring the economy back. This is what he is going to tell his supporters. I think that -- you know, we could see a Trump re- election if that happens.

HARLOW: But usually when the economy is this good, like in the Clinton era, you see the inverse of what we're seeing, which is much higher polling numbers.

PARNES: That's true.

BERMAN: Amie, Caitlin, great to have you with us. Thank you very much.

HARLOW: A volcano erupts in Hawaii. Look at these pictures.

BERMAN: Stunning pictures.

HARLOW: Berman was just there. This is happening right now. You've got lava streaming down the streets towards homes. A thousand people evacuating. A live report, next.



BERMAN: All right. Happening now, stunning pictures from Hawaii. A volcano eruption on the big island sending lava and ash throughout neighborhoods. Streets buckling, houses in the path. Smoke plumes can be seen for miles.

HARLOW: Officials have ordered mandatory evacuations for a thousand people. Our correspondent, Miguel Marquez, has the details. Unbelievable that this is going on and on and on. You saw the lava coming down just a regular street there.

MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT: Yes, it is terrifying to see that. Keep in mind, this is a lava too that opened up miles away from the Kilauea core. This is part of that massive structure of Kilauea volcano, the most active of the volcanoes on the big island.