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Trump Financial Disclosure Report; Israeli Operatives Dug up Dirt on Obama Advisers; Dems Aim for Nunes' Seat; Melania Trump's Platform. Aired 9:30-10a ET

Aired May 7, 2018 - 09:30   ET


[09:30:59] POPPY HARLOW, CNN ANCHOR: In just a week, President Trump will release his yearly financial disclosure report. So, because of that, the reimbursement of $130,000 to Michael Cohen for paying off a porn star, Stormy Daniels, is going to have to be included in that disclosure. Former director of the Office of Government Ethics, Walter Shaub, writes, Donald Trump's next financial disclosure report is due on May 15th. Part eight requires the disclosure of any liability that exceeds $10,000 at any time in 2017. If he, meaning the president, omits his debt to Cohen for the Daniels payment, he'll be guilty of a crime.

Walter Shaub joins me now.

Thanks for being here.


HARLOW: For our viewers who don't know, you worked under the Trump administration heading up the Office of Government Ethics, you know, less than a year ago and that means that you were the one who signed off on this report last year. So you know all about this stuff.

What are the legal issues here for the president? What's the legal pickle this could put the administration in?

SHAUB: So the requirement last year and this year is to disclose any liability that at any point during the reporting period exceed $10,000, even if you've already paid it off by now. He omitted it from last year's report. And if I had known that he had a debt to Michael Cohen at the time that I was referring his report, I would have refused to certify it.

Now, this year, OGE, the Office of Government Ethics, is on notice that he had this loan in 2017. Rudy Giuliani said that the debt was paid off in $35,000 increments beginning in January.

HARLOW: In 2017.

SHAUB: That's right.

HARLOW: Right.

SHAUB: Starting in January. So as of January 1, the debt was $130,000 plus whatever interest.

HARLOW: But he -- here is how Rudy Giuliani is explaining that, because, as you know, he argued, look, this is not debt. This is not a liability. He claims it's an expense. Here's his rationale.


GEORGE STEPHANOPOULOS, ABC NEWS: Why didn't the president include that liability on his financial disclosure form?

RUDY GIULIANI, ATTORNEY FOR PRESIDENT TRUMP: Well, how could he if he didn't know it, right? I mean, first of all, it isn't a liability, it's an expense. I don't think those are included. So I'm representing the president, let's say, and I came down to Washington this weekend. That's a certain expense. I bill him for it three months from now or two months from now. That's not a loan. He's not loaning me money.


HARLOW: Is that a sound legal argument that it's an expense not a loan?

SHAUB: No, that's a ridiculous game of semantics. This was a $130,000 payment to Stormy Daniels on behalf of Donald Trump. The fact that Michael Cohen advanced him that money may even raise state bar ethics questions. But it is absolutely a loan because it's a payment for Donald Trump.

This isn't just expenses, like as Rudy Giuliani said, getting a train ticket. This is an actual amount of money that was paid on Donald Trump's behalf by someone else. It was a loan.

Now, they've gotten really cute with structuring it in a certain way where they claim, oh, it's a retainer and any case he settles out of that retainer comes out of that and he keeps the rest. But that's not how retainers work. And it's cute that they've done that, but it's nonsense. The bottom line is, this was a payment made on Donald Trump's behalf that he has -- had to repay and did repay and it was a liability that was reportable back then and now.

HARLOW: So -- so, Walter, quickly, I have -- I have two more quick follow-ups for you. Quickly, if -- if the president does not disclose this and breaks that 1978 financial disclosure law, I mean what are the legal implications for him, though? What would actually happen?

SHAUB: So the law itself, the Ethics and Government Act, gives the potential for the Department of Justice to seek civil penalties, but it's also a crime under a criminal statute, 18 USC Section 1001 that makes it unlawful to make a fraudulent material statement in a government form, which is exactly what this would be.

[09:35:10] Now, Trump may try to argument, as Rudy Giuliani did, that he didn't know last year --

HARLOW: Right.

SHAUB: But we've now learned that he did know at some point.

HARLOW: Right.

SHAUB: And, frankly, I find it implausible that he ever didn't know.

HARLOW: Let me ask you this, on a different topic but related, because this has to do with the payment. Michael Cohen took out, we know, because he said so, a $130,000 home equity line of credit to pay Stormy Daniels. "The New York Times" with their big, deep dive this weekend about Michael Cohen's finances and how he became a millionaire says this and it struck me. One day in 2014 he, Michael Cohen, sold four buildings in Manhattan for $32 million entirely in cash. Nearly three times what he paid for them three years earlier. If Michael Cohen made that much money on real estate, do you have questions about why he would take out a home equity line of credit to pay $130,000 to Stormy Daniels?

SHAUB: Yes, I do. And, to be clear, I'm not accusing him of anything. But real estate, particularly large scale real estate projects like that, are renowned internationally for being vehicles for money laundering. If he had that much money to buy and sell at an extravagant profit buildings and then had to take out a home equity loan for $130,000 to lend money to his millionaire -- or billionaire boss, that certainly raises questions worth looking into.

Now, there may be a perfectly innocent explanation and I'm not accusing Michael Cohen of anything. But given the potential for money laundering in large scale real estate projects, this is something that should absolutely be looked at.

HARLOW: Walter Shaub, appreciate it. Thanks for being with us.

SHAUB: Thanks.

HARLOW: Ahead for us, Israeli spies target Obama advisers. What exactly were they digging for and who hired them to do it? That's next.


[09:41:06] HARLOW: President Trump has just five more days to decide if the United States will stay in the Iran nuclear agreement or not. It's a major decision that will have to be made. And this comes as new reports have surfaced that an Israeli private intelligence firm was hired to dig up dirt on some of the key Obama administration officials who helped craft the Iran nuclear agreement all in an elaborate attempt to try to discredit them and the agreement.

Fred Pleitgen has the reporting now.

And, Fred, you've been inside Iran reporting on all of this. Are these -- because some of the reporting from "The Observer," et cetera, say that these were aides hired by the Trump team. Do we know that for sure?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: : Yes. Well, it's media reports that are out there. It's interesting because it was only "The Observer" from the United Kingdom, Poppy, at first that said this. But, since then, other media outlets have gathered additional information on this. And it appears as though it was Ben Rhodes and Colin Kahl who were specifically targeted in all this. Of course, two top Obama administration aides.

And "The New Yorker" is reporting that it was apparently their wives who were specifically targeted, trying to extract information from them. At least Colin Kahl said that is absolutely true, that his wife was called on the telephone, was asked specific question and people tried to get in touch with her and that they all thought that this was something that was very strange. Apparently in an attempt to try and gather information on their personal lives and build up a file of them apparently to try to discredit the nuclear agreement.

Now, on top of this, there's also reporting saying that apparently journalists who appear to be in favor of the nuclear agreement were also targeted and some of them were also contacted as well. There's one journalist who has come forward and said, yes, he was targeted. He was called by someone who he thought was a little bit strange, was asking a lot of questions about the nuclear agreement in a very combative tone and that he found that strange as well and has now come to the conclusion that it might be this company which is called Black Cube that might be behind it.

Black Cube itself has come out and categorically said it has absolutely nothing to do with any of this. They say they have no contacts with the Trump White House. They have no contact with what they call the Trump team or with the Iran nuclear agreement. However, some of those who say they've been targeted, like Colin Kahl, they believe that they have absolutely indeed been targeted.

Of course, Poppy, all of this comes at a very pivotal time for that nuclear agreement with Iran. We have the May 12th deadline for when the president needs to decide how to move forward.


HARLOW: Fred Pleitgen reporting for us. Thank you very much. Appreciate it.

Also, the top Republican leading the House Russia investigation, Devin Nunes, they have another pretty big fight on his hands, and that is holding on to his seat. Democrats in California believe they have a real shot at beating Nunes in November, even in what is traditionally a very conservative district. Our Miguel Marquez tells us why.


MIGUEL MARQUEZ, CNN CORRESPONDENT (voice over): California's Central Valley, farming, ranching, conservative, deeply conservative.

REP. DEVIN NUNES (R), CALIFORNIA: Today I briefed the president.

MARQUEZ: Devin Nunes, the Republican congressman for the 22nd district, chairman of the House Intelligence Committee, a man the left loves to hate for his central role in the Russia investigation, is viewed by protesters who have gathered in front of his district office every Tuesday for a year as vulnerable come November.

MARQUEZ (on camera): Do you really think a Democrat has a chance of winning the election here in November?

DAVE DERBY, RETIRED EDUCATOR: Why would I be standing here if I didn't? Absolutely.

MARQUEZ (voice over): What gives them hope? Trump won the district by just ten points. Republican presidential candidates typically do better.

UNIDENTIFIED MALE: This man is a vital national security threat.

MARQUEZ: Also the presumptive Democratic challenger, Andrew Janz, is a deputy district attorney in Fresno County, who, in the first quarter of this year alone, raised more than a million bucks.

[09:45:05] UNIDENTIFIED MALE: We did it.

MARQUEZ: And the Conor Lamb effect. Democrats argue, if it can happen in a conservative district like Pennsylvania 18, why not California 22?

MARQUEZ (on camera): Will you consider Devin Nunes?


MARQUEZ: Why so against him.

WEATHERSPOON: Because he's too close to Trump.

MARQUEZ (voice over): The president looming large in this race, even some disaffected Republicans coming out to support a Democrat.

MARQUEZ (on camera): Have you voted for Devin Nunes in the past?

BEV PETERSON, REPUBLICAN: Yes because he was Republican.

MARQUEZ: What is it that upsets you? Is it -- is it the Russia stuff? Is it immigration? Is it --

RON SCHAFER, REPUBLICAN: It's more than that. He -- the backing of Trump no matter what.

MARQUEZ (voice over): But it is a tall order. Very tall. Republicans outnumber Democrats by more than 30,000 votes here. Nunes has a multimillion dollar campaign war chest and in the last two elections he's whooped his challengers by more than 35 points.

MARQUEZ (on camera): Do you really have a snowball's chance in hell of winning this district?

ANDREW JANZ, DEMOCRATIC CANDIDATE: Look, what I tell people is, anytime a first time candidate for Congress raises $1.1 million in 90 days, the seat he's running in is definitely in play. I've been talking to a ton of people that have said that they've had enough with my opponent Devin Nunes.

MARQUEZ (voice over): Nunes preferring local conservative talk radio, Fox News and his own website, funded by his campaign, purporting to report real news to town hall style events. Even his supporters say none of it makes up for face time with constituents.

GENE YUNT, NUNES SUPPORTER: He needs to make his presence before, you know, before the election to help himself.

MARQUEZ (on camera): As a Republican, that would be your council to him, get out here?

YUNT: Yes, help himself. You know, show up.

MARQUEZ (voice over): Fred Vanderhoof, Fresno County Republican chairman, says Nunes may have to work a little harder this year, but he's not worried.

FRED VANDERHOOF, FRESNO COUNTY REPUBLICAN CHAIRMAN: We can't assume that we're just going to walk in and take the election. We're going to work for it. There's a silent majority out there that back us.

MARQUEZ: Miguel Marquez, CNN, Fresno, California.


HARLOW: Fascinating reporting, Miguel, thank you for that.

Meantime, to that active volcano in Hawaii that's spewing lava is apparently just beginning. Look. Unbelievable. So far at least 26 homes have been destroyed, 1,800 residents are still under that mandatory evacuation. This family's property was literally swallowed up by lava, leaving it unrecognizable, as you can see.


AMBER MAKUAKANE, HOME DESTROYED: I remember telling myself, this may be the last time I come back. And if it is, that's OK. This will be the beginning of a new chapter in my life. And I know that God has greater plans for me. And whatever that may be, I am OK with it.


HARLOW: Evacuees were allowed to return to their homes briefly yesterday. You see them packing up there. Everyone, though, ordered to leave before nightfall.

All right, ahead for us, the first lady, Melania Trump, front and center today at the White House in the Rose Garden. She will officially announce her platform, her focus as first lady. Kate Bennett jones me on that, next.

(COMMERCIAL BREAK) [09:52:43] HARLOW: On the same day that President Trump is using his tweets this morning to bully investigators in the Russia probe, First Lady Melania Trump will announce her formal platform in the Rose Garden a little bit later today, and that includes fighting cyberbullying.

Our Kate Bennett, who covers the first lady, is with us in Washington.

Kate, thank you for being here. You're one of the few people that has interviewed Melania Trump. What can we expect from her today?

KATE BENNETT, CNN WHITE HOUSE REPORTER: Well, I think she's going to finally narrow down what it is exactly she wants to do in helping the well-being of children. I think we're going to see a few things from her. She'll probably discuss the opioid issue, opioid crisis affecting families, something she's been interested in, and of the overall wellness of children. And I think, as you said, she is going to have a component of her platform that will address Internet, social media issues facing kids, including cyberbullying. She said before -- last month she convened a tech group at the White House and they discussed cyberbullying and she quite openly said, I know there's been criticism, I know your -- people are skeptical of me discussing this topic, sort of addressing the elephant in the room, which is her husband's use of Twitter and name calling and such. And she said, I'm going to go forward and do it anyway.

So I believe that we will continue to see her do more of this cyberbullying stuff and talk about how kids can be kinder online. She's big into kindness and patience with children.

HARLOW: You know, she has praised the former first lady, Michelle Obama. She's seen laughing beside the former president, Barack Obama. She has taken a different stance with them and with former presidents than her husband certainly has. There's that now famous photo of her -- and we're going to pull it up right there -- with all of the, you know, the living former presidents and their wives there.

It's interesting, and "The Washington Post" does note it in their reporting today, that she and her husband have not gone out of their way, Kate, to present this exactly united front publicly.

BENNETT: Yes. And I've reported this for months too, Poppy. She has maintained her independence. It's a word that her office used in answering my questions about how she operates the East Wing, independent, for several months now. She announced she was going to Barbara Bush's funeral in person, wanted to attend in person, almost two days before the president said he wasn't going. So people saying, you know, he's sending her in his place isn't quite correct.

HARLOW: Right.

BENNETT: They did -- they are not joined at the hip. They certainly operate their offices very differently. They have a different way of dealing with the press. She's very private. She doesn't make comments. She has a lot of nonverbal cues. Certainly we don't see them together in that loving way we're sort of used to with the Obamas, lots of hugging and kissing and social media notes back and forth.

[09:55:15] HARLOW: Right.

BENNETT: However, I do think that they have a partnership, a marriage that they've been together almost 20 years. Certainly there's something there that bonds them. We just don't see it as much. And she operates, as I said, very, very differently and I think that that is a wide berth the president has given her and one she's taken. She's not exactly -- I don't think she cares that much whether it's perceived that she has this tight, close marriage or whether she's just doing her thing.

HARLOW: Right. And she'll be front and center today, Kate. As you said, you'll be covering it in the Rose Garden as she lays out this platform.

Thank you for the reporting.

New questions raised by the man who was supposed to be representing the president. That is his attorney Rudy Giuliani, who said over the weekend that he's focusing more on the law than the facts. We're following it.