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EARLY START

Michael Cohen Claims President Trump Knew About Trump Tower Meeting; North Korea Hands Over Remains of U.S. War Dead; Deadline to Reunite Separated Families Expires; Experimental Alzheimer's Drug Offers Hope; President Threatens Turkey with Sanctions. Aired 4:30-5a ET

Aired July 27, 2018 - 04:30   ET

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


ANNOUNCER: This is CNN breaking news.

[04:31:19] CHRISTINE ROMANS, CNN ANCHOR: The 2016 Trump Tower meeting was no secret to Donald Trump. The latest bombshell from Michael Cohen. And he's willing to say the same thing to Robert Mueller.

DAVE BRIGGS, CNN ANCHOR: Sixty-five years after the armistice was declared, North Korea has handed over remains of troops killed during the Korean War to the United States.

ROMANS: And the biggest selloff in stock market history. Ouch. Facebook loses $119 billion in market value. Why and what's next week for the tech giant?

Welcome back to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. 4:31. Good news, bad news day for the president, right? This GDP number could be massive later today.

ROMANS: In about four hours. I think it could be a very strong GDP report, yes.

BRIGGS: Could be north of four something, maybe even near five but the bad news is probably top of mind for the president.

Breaking overnight, a revelation that could change the course of the Russia investigation. Sources telling CNN President Trump's personal lawyer Michael Cohen -- personal lawyer, that is, claims Mr. Trump knew in advance about the June 2016 meeting in Trump Tower. The meeting where the Trump team expected Russians to deliver campaign dirt on Hillary Clinton.

Cohen's claim, if true, would contradict no fewer than 15 denials by the president, his administration, his family and his lawyers. For example, these.

(BEGIN VIDEO CLIP)

MICHAEL SCHMIDT, WASHINGTON CORRESPONDENT, THE NEW YORK TIMES: Did you know at the time that they had the meeting?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No, I didn't know anything about the meeting.

SCHMIDT: But you know --

TRUMP: It must have been a very unimportant meeting because I never even heard about it.

SEAN HANNITY, FOX NEWS HOST: Did you tell your father anything about this?

DONALD TRUMP JUNIOR, PRESIDENT TRUMP'S SON: No. It was such a nothing, there was nothing to tell.

JAY SEKULOW, PRESIDENT TRUMP' ATTORNEY: Let's focus on what the president was aware of, nothing. He was not aware of the meeting, did not attend the meeting, and was only informed about the e-mails very recently by his counsel.

(END VIDEO CLIP)

ROMANS: The president's critics have long doubted the denials. They point to phone calls Donald Trump Junior made before and after the meeting, phone calls to a blocked number. The kind the president has. Critics also note two days before the meeting, the president mysteriously announced, remember, those plans for a major speech about Hillary Clinton's e-mail, about his scandals, rather, a speech that never happened?

For more we go to CNN's Jim Sciutto in Washington.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Christine and Dave, sources with knowledge tell myself and Carl Bernstein that Michael Cohen claims that then-candidate Trump knew in advance about the June 2016 meeting in Trump Tower in which Russians were expected to offer his campaign dirt on Hillary Clinton. Crucially, these sources tell us that Cohen is willing to make that assertion to special counsel Robert Mueller.

Cohen also alleges that he was present, along with several others, when Trump was informed of the Russians' offer by Donald Trump, Jr. By Cohen's account, Trump approved going ahead with the meeting with the Russians.

We should note that our sources said that Cohen does not have evidence such as audio recordings to corroborate his claim. And a source familiar with Cohen's House testimony said that he did not testify then that Trump had advanced knowledge. Cohen's claims also were not mentioned in separate reports issued by both Republicans and Democrats on that House Intelligence Committee.

Now we have reached out to a number of lawyers representing people involved. Alan Futerfas, an attorney for Donald Trump, Jr., he told CNN, quote, that "Donald Trump, Jr. has been professional and responsible throughout the Mueller and congressional investigations. We are very confident of the accuracy and reliability of the information that has been provided by Mr. Trump, Jr. and on his behalf." Christine and Dave. BRIGGS: Jim Sciutto, thank you.

President Trump's lawyer Rudy Giuliani quick on the attack as the news broke on CNN, questioning Michael Cohen's credibility, and calling Donald Trump's longtime fixer a pathological liar.

(BEGIN VIDEO CLIP)

[04:35:06] RUDY GIULIANI, PRESIDENT TRUMP'S ATTORNEY: He's been lying all week, I mean -- or for two weeks. He's been lying for years. I don't see how he has any credibility. I mean, this is basically if you had a trial and there won't be a trial, even if you had a trial you'd say but which lie do you want to pick? You want to pick the first lie, the second lie or maybe some new lie?

This is the kind of witness that can really destroy your whole case because any finder of fact loses confidence in the case when you rely on a guy like this.

(END VIDEO CLIP)

BRIGGS: Lanny Davis, one of Michael Cohen's attorneys, declined to comment when contacted by CNN. But Congressman Adam Schiff had some comments. The ranking Democrat on the House Intelligence Committee responded in a tweet saying, "If allegation Trump OK'd June 9 meeting is true, it means he not only publicly appealed to Russia for help but privately approved receiving it. The conspiracy case may have just gotten stronger."

ROMANS: As part of the investigation into Michael Cohen, "The Wall Street Journal" reporting the longtime finance chief of the Trump Organization, Allen Weisselberg has been called to testify in front of a federal grand jury. The "Journal" reports he is a witness in the probe of possible bank fraud or campaign finance violations by Cohen. Weisselberg's name also came up in the recording of Trump and Cohen that Cohen's lawyer gave CNN this week.

The two men talked during the campaign about possibly buying the rights to a former Playmate's story claiming she had an affair with Mr. Trump.

(BEGIN VIDEO CLIP)

MICHAEL COHEN, FORMER ATTORNEY TO DONALD TRUMP: I need to open up a company for the transfer of all of that info regarding our friend David, you know, so that -- I'm going to do that right away. I've actually come up and I've spoken --

TRUMP: Give it to me.

COHEN: And I've spoken to Allen Weisselberg about how to set the whole thing up. I'm all over that. And I spoke to Allen about it when it comes time for the financing.

(END VIDEO CLIP) ROMANS: And neither Weisselberg, the federal prosecutor, nor the Trump Organization responded to "The Wall Street Journal's" request for comment.

BRIGGS: Also breaking overnight North Korea handing over the first set of possible remains of U.S. troops killed in the Korean War. A U.S. Air Force plane carrying 55 cases of remains arrived at the Osan Air Base in South Korea.

CNN's Alexandra Field was there for the arrival and she joins us live from the air base.

Alex, good morning.

ALEXANDRA FIELD, CNN INTERNATIONAL CORRESPONDENT: Good morning, Dave. Look, the commitment has never wavered to bring home the remains of every soldier killed in that conflict. It's been some 65 years. More than 5,000 sets of remains believed to belong to U.S. service members still in North Korea. But now a step forward. North Korean officials turning over 55 boxes that they say are the remains of 55 U.S. service members. Those remains were picked up by a cargo plane brought back here to Osan Air Base, which is a U.S. air base, the closest one to the DMZ.

The boxes received by an honor guard here. They're being taken to a hangar where there will be preliminary forensic investigation. In about a week, there will be a ceremony before the remains are sent on to Hawaii. That's where a military lab will do the extensive DNA testing depending on the condition of these remains. That's testing that could take some months and doing all the identification is a process that could take years.

Still, this is important for so many families who have held out hope for so long. North Korea has returned remains in the past, but it's something they haven't done for more than a decade. This is a sign of Kim Jong-un making good on a commitment that he made to President Trump in Singapore. President Trump overnight tweeting his gratitude that this has happened. Under scoring of course first and foremost the importance for the families, but Dave, we also have to read this as a political step forward that North Korea is certainly trying to keep its engagement with the United States at this critical time while the two sides continue to try to talk about denuclearization -- Dave.

BRIGGS: Significant development there. Alexandra Field live for us in South Korea. Thank you.

ROMANS: All right. To Wall Street now, investors are very concerned about what happened yesterday because it was the worst day in stock market history for Facebook. Shares plunged 19 percent after Facebook said it will spend billions of dollars on security. Cutting into profits for years. Facebook lost about $119 billion in stock market value. That is the biggest single-day loss for a public company ever.

And to put that in perspective, I mean, how much value evaporated from this company is more than the entire value of most companies in the S&P 500 like Costco, American Express, Caterpillar, Lower's, Starbucks, CVS. The drop also took $16 billion off Mark Zuckerberg's value. He's now the number sixth person, not number four. Facebook plans to put privacy first. A direct result of its recent data scandal. It will invest billions to combat election meddling, fake news, conspiracy theories, hate speech. Facebook says it is already working to improve its platform.

In fact it just removed four videos posted by Infowars and its founder Alex Jones. Infowars is notorious for spreading conspiracy theories. Facebook says the videos violated community standards against bullying and hate speech. Infowars did not respond to a request for comment.

[04:40:04] BRIGGS: OK. Breaking overnight. The Carr Fire in Redding, California, has claimed its first victim. Now babies are being evacuated from a hospital as the flames close in.

(COMMERCIAL BREAK)

ROMANS: All right. To California now, breaking news there, A bulldozer operator has died battling this raging Carr wildfire in Redding. At least three firefighters are also injured. Five babies are being evacuated from intensive care unit at Mercy Medical Center. One mom-to-be was reported to be in active labor. The hospital we're told is not under mandatory evacuation yet.

There are some scattered power outages in the area. Now so far this fire, this Redding fire, Carr Fire, has scorched nearly 29,000 acres. It is only 6 percent contained. Officials say 20 structures have been destroyed or damaged, nearly 500 more are directly threatened. We'll continue to follow this for you this morning.

[04:45:08] BRIGGS: All right. About 1 in 3 children taken from their parents at the border. Some 700 of them remain in government custody as a court ordered deadline to reunite eligible families expired. The government and the American Civil Liberties Unions, which sued over the separations, disagreed over some of the points of eligibility. The hard work really just beginning. The government offering no timeline for tracking down the hundreds of parents deported or otherwise unaccounted for.

With more, here's CNN's Tal Kopan.

TAL KOPAN, CNN POLITICAL REPORTER: Well, the deadline for reuniting families that the government separated at the border has now come and gone and we have new numbers on exactly how many of those were reunited on time. The government last night gave us an update that roughly 1400 of those families were eligible and reunited by Thursday evening.

[04:15:08] They also said that another almost 400 of those children that they identified were released from Health and Human Services custody. But they didn't specify whether those were to a parent or some who went to family members or friends who are also in the country. Now that leaves about 700 children who were not reunited with a parent by the court deadline. And that breaks down sort of mostly with parents who are actually no longer in the country. Presumably deported. There are also parents that they say declined to be reunified and

those that they found criminal or safety issues with during the background process. Now we're going to have a new court hearing before the judge today, later this afternoon. And we'll get to hear what the judge thinks about whether the deadline was met. But although the government says it's fulfilled its obligations in terms of what it could do by this point in the process, the ACLU, which brought the lawsuit, says they that did not meet the deadline.

They argue that many of these parents who were declared ineligible are in fact eligible. The government has simply created a situation where they could not be reunified on time -- Christine and Dave.

ROMANS: Tal Kopan, on an immigration beat for us. Thank you, Tal.

All right. On the business beat, the latest report on U.S. economic growth comes out today. And it should be gang busters. Just ask President Trump.

(BEGIN VIDEO CLIP)

TRUMP: I don't know what they are, but a lot of big predictions. Somebody actually predicted today 5.3. I don't think that's going to happen. 5.3. If it has a four in front of it, we're happy.

(END VIDEO CLIP)

ROMANS: That was in Granite City, Illinois, yesterday where the president's steel tariffs brought back hundreds of new steel jobs. Economists do think economic growth topped 4 percent in the second quarter. That delivers -- would deliver one of Trump's campaign promises. It would be the fastest pace since 2014. But it could be a blip. That's because America's trade threats likely boosted those numbers. Many countries race to import U.S. goods before tariffs took effect particularly soybeans.

Farmers rushed shipments to China before Beijing retaliatory tariffs began in early July. A 9,400 percent jump from last year. Without that tariff bump, you know, sort of front loading to get ahead of the president's trade policies, experts say economic growth is probably closer to 2.5 percent. The GOP tax cuts are also responsible for some of that growth, boosting both consumer spending and business investment.

BRIGGS: New reason for hope for victims of Alzheimer's and their families. An early trial of an experimental drug reduced signs of the brain disease.

Chief medical correspondent Dr. Sanjay Gupta with more.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, Christine and Dave, if there is a holy grail in the world of neuroscience and drug development, an effective treatment for Alzheimer's would be very much at the top of the list, which is why there's so much excitement about this drug called BAN-2401. That is the name of the drug now in clinical trials. Even though it is very early goings, the excitement is there because of what researchers found after giving patients over 18 months this IV medication.

Now take a look here. Specially they found it was able to actually reduce the amyloid that exists in the brain by 70 percent. Researchers believe amyloid is actually what helps cause or causes of the symptoms of Alzheimer's. It also prevented new plaque from forming. Those two points. And if the last point obviously that patients pay the most attention to, it reduced cognitive decline by 30 percent as compared to patients who got a placebo.

There's only five medications approved for Alzheimer's right now. There's only been three approved over the last 14 years. Hundreds of trials for Alzheimer's treatments have failed. And again that's why people are paying close attention to this. We got about 5 million people in the country right now with Alzheimer's and those numbers are expected to triple by the year 2050.

So what happens next is that this will go to phase three clinical trials and that could still take several years before we get the results from that back. So this is going to be available anytime soon, but when it is, and hopefully it is something that can really offer some help -- Christine, Dave.

[04:50:05] BRIGGS: That is huge news. Dr. Gupta, thank you.

Comedian Roseanne Barr attempted to defend the tweet about Obama adviser Valerie Jarrett that got her fired from the revival of her sitcom and on an appearance on FOX News she said the tweet which mentioned the Muslim Brotherhood and the Planet of the Apes was actually misunderstood.

(BEGIN VIDEO CLIP)

ROSEANNE BARR, COMEDIAN: I was so sad that people thought it was racist. If you really think that at the height of my power and my fame I would go black people look like -- I mean, it's just, I wouldn't -- I mean, I'm not stupid. And that's what they keep selling.

(END VIDEO CLIP)

BRIGGS: Barr told Valerie Jarrett she was sorry but still took a jab that, quote, "She's got to get a new haircut."

I don't think the allegation of stupidity was what got her fired.

ROMANS: No.

BRIGGS: It was maligned by the American public.

ROMANS: All right. 50 minutes past the hour. Earnings were rough for Facebook, but Amazon has very different story. Amazon profits topped $2 bill for the first time ever. CNN Money next.

(COMMERCIAL BREAK)

[04:55:53] BRIGGS: President Trump threatening, quote, "large sanctions" against Turkey unless the NATO ally releases an American pastor who is now under house arrest. Turkey suspects Andrew Brunson of involvement in a 2016 coup attempt. Now word Turkey did not follow through on a deal that would have set Brunson free.

Joining us now live from Istanbul, CNN's Jomana Karadsheh.

Jomana, good morning. Too much attention on this. Mike Pence also adding be prepared to face the consequences if he's not returned. Why the added focus on this now?

JOMANA KARADSHEH, CNN CORRESPONDENT: Well, you know, Dave, the relations between the United States and Turkey has been strained for a few years now and the imprisonment of Pastor Andrew Brunson was one of the key issues at the heart of all of this. The U.S. officials have been pushing Turkey for his release saying there were no credible charges against him and that there were only, you know, some eyewitnesses who were secret witnesses that were being used in court.

But, you know, in recent weeks, we've seen signs that perhaps maybe the relationship between these two countries was on the road to improvement. Finally the United States delivered F-35 fighter jets to Turkey despite Congress trying to block that deal. They also agreed on a road map on a contentious issue in northern Syria. And then you had a visit from Senator Lindsey Graham who left Turkey saying that he was optimistic that Pastor Brunson was going to be released after he met with President Erdogan saying that the Turkish president after his reelection was trying to find a way out of all of this.

Now the interesting new details that we're learning this morning according to reports that are being confirmed by Israeli officials was that there was a deal for the release of Pastor Brunson and it involved Israel in a phone call between President Trump and Prime Minister Benjamin Netanyahu of Israel on July 14th. The American president asked Israel to release a Turkish woman who was held there on terrorism charges for links to Hamas saying that this would help with the release of Pastor Brunson.

And Israel did so, deported her to Turkey a day later. But Pastor Brunson was not released. And it seems that Turkey did not fulfill its end of this deal. And a couple of days after his July 18th court session, he was moved into house arrest. Something that seems to have enraged U.S. officials and unleashed this barrage of threats of sanctioning a fellow NATO country. And, you know, cornering President Erdogan, he doesn't really react well to these kinds of threat. So we'll have to wait and see how he reacts -- Dave.

BRIGGS: Yes, this story bound to escalate in the hours ahead.

Jomana Karadsheh live for us this morning. Thank you.

ROMANS: . All right. Just about the top of the hour so let's get a check of CNN Money this Friday morning. Global stocks mostly higher today after what was a mixed day on Wall Street. The Dow closed higher after the U.S. and the E.U. said they would work together on trade. But both the S&P 500 and the Nasdaq fell because of Facebook. Facebook shares plunged 19 percent yesterday. It plans to spend

billions of dollars on security that will cut into profit for years. That drop is a $119 billion drop in market value. That's the single biggest day loss for a public company ever. Never have seen something like that .

Facebook's drop hit the entire tech sector. But tech should rebound today thanks to Amazon. Amazon's profit topped $2 billion for the first time in history, earning $2.5 billion from April to June this year. It's staggering, that's staggering increase of more than 1,000 percent from last year. For Amazon, it's also the third quarter in a row to make $1 billion in profit.

Remember for years Amazon invested so much in its business it often lost money. Now it's hitting record profits thanks to its cloud business, Prime subscriptions and new ad business. Amazon shares ticked up 3 percent after hours.

The Papa John's saga continues with Papa John suing Papa John's. Ousted founder John Schnatter wants access to company documents. He's investigating what he calls the, quote, "unexplained and heavy handed way" --