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Trial Begins for Ex-Trump Campaign Chairman Paul Manafort; Trump Repeats Rudy Giuliani's Defense, Says Collusion is Not a Crime; New Indicators Show North Korea Potentially Working on New Missiles; Trump Repeats Threat of Government Shutdown; Aired 10-10:30a ET

Aired July 31, 2018 - 10:00   ET


[10:00:00] POPPY HARLOW, CNN ANCHOR: -- screening and seating jurors. Over the next week, three weeks or so, they're going to hear evidence alleging that Manafort made tens of millions of dollars working as a lobbyist for pro-Russian figures in Ukraine. This was before he worked for then candidate Trump and allegedly stashed money away in those offshore accounts out of the eyes of the IRS. There are no direct ties to the president or the 2016 election in this trial.

Still, this is the biggest test to date of the operation. The president never tires of dismissing as a witch hunt. For Manafort, the stakes are even higher. He could spend the rest of his life in prison and he faces a second trial ahead in D.C. on money laundering and obstruction charges. That is set for September. But about this trial that begins today, let's go outside the federal courthouse in Alexandria, Virginia. Joe Johns is there.

What's at stake?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: A lot is at stake here. Obviously for Robert Mueller, he has taken the campaign manager, the former campaign manager of the Trump campaign to court on some very serious charges. Paul Manafort, as you said, could spend the rest of his life in prison. And this on bank fraud charges as well as tax evasion charges, a charge of failing to disclose that there were offshore foreign bank accounts.

What this really comes down to, Poppy, is allegations from the government, from the special counsel, that Paul Manafort essentially got $60 million from Ukraine and parked it in offshore banks and didn't tell the tax collectors, the Internal Revenue Service. So that's what they're dealing with. It is a case, as you said, that could go on for about three weeks, about three dozen witnesses, 18 counts. 18 counts in this indictment.

So it's clear the special counsel has really gone after Paul Manafort in this case. And the question is, what does he get out of it if he doesn't get a conviction? Obviously, there are more questions about the special counsel. Back to you.

HARLOW: Joe, thank you for the reporting.

Our legal analyst Anne Milgram is with me. She's also the former attorney general of New Jersey now a law professor at NYU. Nice to have you. So there could always be a last-minute deal. But so far, there's not. Paul Manafort, according to "The New York Times," you know, his friends had told "The Times" he believes he's innocent. He believes he will be acquitted. He unlike so many others, Rick Gates among them, has not flipped, has not decided to cooperate with Mueller. What does that tell you?

ANNE MILGRAM, CNN LEGAL ANALYST: You know, he hasn't given any indication of interest in that either. And so with a number of folks we've heard talk of their interest in cooperating or they floated it, we thought it was possible. We've never had that with Manafort. So I think it's really unlikely that he pleads. But if he is going to plead, he'll plead right now.

HARLOW: He'll plead -- yes.

MILGRAM: Exactly.

HARLOW: He faces the rest of his life in prison.

MILGRAM: Yes. And he faces another trial in September. And so he faces the rest of his life in prison -- federal prison on this case and that one likely as well. And he's --

HARLOW: Right.

MILGRAM: -- looking at a lot of very serious criminal charges.

HARLOW: Thirty-two of them. For people watching this morning, they might think, well, this is a trial all about President Trump and Russia. It's not actually. It's not. And the prosecutors -- Mueller's team have said to the judge in hearings, et cetera, leading up to this, don't expect the world Russia to be uttered. Why is that significant?

MILGRAM: Well, there's two pieces to think about. I mean, first of all, it all, in the bigger picture, does relate to Russia because they came to this in the investigation because it was work for the Ukrainian government --

HARLOW: It began --

MILGRAM: Exactly.

HARLOW: The pro-Russian regime in Ukraine.

MILGRAM: Exactly. So that's how they came to look at it. So sort of high level, I think that's why the president has been tweeting a lot about the special counsel. And that's -- you know, it's going to be in the news day after day. But when it comes to the actual case, they've made a paper case. It's a white-collar crime where he is literally, as we just heard, getting $60 million, not reporting it, essentially defrauding banks around in the United States and around the world and hiding all this money so that he gets the full benefit without ever paying taxes. And so that's what they will try in the courtroom. HARLOW: There's also question over whether he -- a loan that he was

given from a banker was -- for a sort of hush-hush agreement that he'll get a job on the Trump campaign, which that banker did not get.


HARLOW: But that's a key charge prosecutors are making.

MILGRAM: Yes. And so I think to say that no Russian stuff is going to come up at all doesn't feel right to me but I think what the government is doing is trying not to make this a political case and to really walk into the courtroom and try all those counts of the indictment solely based on the facts.

HARLOW: Because the judge, Judge Ellis has warned Mueller's team not to do that. I mean, he lambasted them a few months ago saying the only reason you're doing this is to go after Trump. What's at stake for Mueller's team here? Because this really is the first head-to- head, tete-a-tete, for them.

MILGRAM: Yes. It's the first --

HARLOW: Right.

MILGRAM: It's the first case to go to trial.

HARLOW: I mean, what is at stake?

[10:05:02] MILGRAM: I think there's enormous pressure on them to be successful. I also think that, you know, if you look at this case, it's a paper case. And so they have already connected the dots through paper to Manafort. And so they're going to have high expectations that they'll be successful as well. And so they've got a lot riding on it. I think they'll try a very strong case.

HARLOW: What about these five witnesses who've been immunized? I mean, the -- Politico has some interesting details on them. One is a New York haberdasher who sold Manafort $850,000 worth of suits. You've got a car dealer who sold Manafort's wife a $130,000 Mercedes. Ostentatious, sure. Legal, no. So what's the point of immunizing these witnesses?

MILGRAM: Well, there's two things. First of all they're going to want those witnesses because it goes to how did Manafort spend that $60 million. And they're going to put all that evidence in to show he wasn't paying taxes, he was busy buying hats, which is pretty damning evidence if we think about it. The reason to immunize them would be if they have potential criminal exposure themselves meaning Manafort says, look, I'll pay you cash, $300,000, so I don't have to pay taxes or something like that. So we don't know the facts. But what's where I see, you know, people often have potential liability.

HARLOW: Thank you for walking us through all of this. Again they are picking the jury today, tomorrow. Probably start on Thursday.

Thanks, Anne. Appreciate it. This morning, the president is once again talking about collusion. He

is doubling down on what his lawyer, Rudy Giuliani, said yesterday on CNN. "Collusion is not a crime." The president tweets this morning. Exactly the words from Giuliani yesterday.

Abby Phillip is with us at the White House. This tweet from the president comes as officials in the White House really are trying, Abby, to distance themselves, it appears, from Giuliani. What can you tell us?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right. Rudy Giuliani, the president's personal attorney in this matter, went on television, a big media blitz yesterday, trying to defend his client, talking about a lot of these issues related to Michael Cohen. And seemingly, creating more chaos and confusion in his wake. After an interview, a fairly lengthy interview with CNN's Alisyn Camerota yesterday morning, Giuliani seemed to open two new fronts in this whole saga, claiming, first, that collusion may not even be a crime, which is different from what we've been hearing from the president.

The president has been saying there was no collusion all along. Now we are seeing President Trump backing Giuliani up in a tweet this morning, reiterating that collusion isn't a crime, even though he himself just two days ago suggested that Democrats should be investigated for what he claims is their collusion with the Russians. But then on a second matter, Giuliani starts talking about a meeting, a planning meeting that he claimed happened before that infamous Trump Tower meeting with Don Junior and Russians promising dirt on Hillary Clinton. He later tried to clarify in a subsequent interview saying this.


RUDY GIULIANI, PRESIDENT TRUMP'S ATTORNEY: He said there was a meeting with Donald Jr., with Jared Kushner, with Paul Manafort, with Gates and possibly two others in which they, out of the presence of the president, discussed the meeting with the Russians. We checked with their lawyers, the ones we could check with, which was four out of six, that meeting never ever took place. It didn't happen.


PHILLIP: So first Giuliani seems to open up the possibility that a planning meeting happened, that no one was talking about but him. Then he went on to say that that meeting didn't happen. Everyone is just left really confused here, Poppy. The White House aides telling us that they did not coordinate with Giuliani over all of his appearances yesterday, which isn't entirely surprising. But it certainly indicates that they are not entirely happy with all the things that he's been saying that seem to put them in even more hot water -- Poppy.

HARLOW: Thank you, Abby, reporting for us from the White House this morning.

Let's talk about all of this, CNN contributor and author of "The Great Revolt," Salena Zito joins me, and Lynn Sweet, Washington bureau chief for "The Chicago Sun-Times."

Ladies, nice to have you. Let me read you something from Politico, when it goes to the confusion that Giuliani has sown in the last 24 hours. Quote, "It would make better tabloid sense for Trump to dump Giuliani and officially hire Harvard Law professor Alan Dershowitz who has worked to shield him from his accusers and has many appearances on TV over the past year. For someone who was practically reared on tabloid wars, Trump has been surprisingly flatfooted thus far. Perhaps, in the guise of his own former lawyer, he has finally met his match."

Lynn, to you, is Giuliani setting more fires than he is putting out?

LYNN SWEET, WASHINGTON BUREAU CHIEF, CHICAGO SUN-TIMES: Absolutely. It's a bigger world than just the New York tab war that's going on and Trump and Giuliani know or should know, his lawyer saying know, or should know, that they're trying to communicate something, it's more than to the woods on the -- on those big New York papers that they are used to dealing with. Giuliani has succeeded in one thing, in confusing everybody who isn't keeping close tabs on this case.

[10:10:03] And don't underestimate the power of confusion because it runs in parallel with the war that President Trump is waging on the news media with another broadside issue just a few minutes ago on his Twitter feed where he predicts that we all will be out of business in seven years, presuming he's failed -- in seven that he will win another term.

Confusion is a tool as much as somebody who wants to stick to the facts if they want to make people think, which I think is what they're aiming at that somehow this is a witch hunt. See how it all plays into this theme. And confusion is an important tool that Giuliani is using. So I don't take it lightly. And we could go and parse in tongue, ludically analyze, we saw this stuff the other day, and they'll say, great, that's exactly how I want the press to be spending their time.

HARLOW: But, Salena, it appears that the tactic is working, at least somewhat in trying to discredit Mueller. I mean, CNN's most recent polling on this shows that the number of Americans that approve of the way that Mueller is handling his job and the Russia probe has fallen from 48 percent in March to 41 percent in June. Are they winning the messaging war here, at least in the court of public opinion?

SALENA ZITO, CNN CONTRIBUTOR: Well, for a tactic that has no message, right? As Lynn said, it's all over the place. Yes, obviously, it appears that way. I mean, I -- I mean, I'm a reporter and every day I feel as though I am placed in the third season of "Game of Thrones" and I should have never watched the first two, and I'm trying to figure out all the characters. You know, it's just -- it's really hard to put -- piece everything together, piece every message together.

And Lynn is right. Like Dershowitz would be perfect. He is always on message. You know, and he's always very articulate. And he explains things, not always in the way that benefits Trump, but in a way that people -- compactly in the way people understand. But I agree, this is a chaotic tactic. And it's working.

HARLOW: And it's working. Lynn --


HARLOW: Lynn, when it comes to the trial that Anne Milgram just laid out exactly what's at stake for Mueller's team here. How do you think this plays among his voters and among the biggest supporters of the president? How critical is a win in this Manafort case, the first one, for the president?

SWEET: Well, it's critical because if this case is lost, then it will force the Mueller team to regroup and say, what are we -- you know, what are we doing? On the other hand, the rebuttal is that this case is the fruits of the investigation into the Russian role into the 2016 election. It is not about it.

HARLOW: Right.

SWEET: So -- but that is hard to explain to the public. That this is an important case, but it just is an offshoot. Prosecutors are allowed to follow restraint wherever it leads. So it would be hard. It clearly won't be good. And a lot of these -- you know, one of the things that will be done in this trial is to tell the Manafort story, which puts the attention on him, not on Trump and not on Russia. So it may -- and so in summary, it's not good if Mueller loses this case. I don't think it's the end because his prosecution continues. There are other people still in the pipeline. And some of the revelations from this trial still may have an impact.

HARLOW: Salena, the president has tried ever since, you know, the indictment dropped and the charges were filed against Manafort to distance himself. That he had very little to do with my campaign. I mean, he ran the campaign at a critical time leading up to, you know, the convention for five months. But you travel through parts of the country that support this president so much. Do they believe him? Do they think Paul Manafort is not that big a deal in the president's world?

ZITO: Well, for instance, yesterday, I was in Newark, Ohio, which his sort of a rural suburban area outside Columbus for covering the Ohio 12th special election.

HARLOW: Right.

ZITO: And there were tons of voters there. And so I talked to them about numerous things, including Manafort and Michael Cohen, and all of this Russian thing. They don't pay as much attention to who is running the campaign. So it -- you know, that name didn't imprint on them as someone that was important. A lot of people that I asked said, well, he was the delegate counter, right? So that's how they sort of view him as some guy who's brought in to make sure that delegates worked and left.

And I think because there's so many moving parts and because the Manafort trial is separate and it's not has to do with Trump, people are like confused as to why it's even happening and-or what his ties are to Trump, and ties to why Mueller is conducting the special prosecution.

[10:15:08] And I think that's where the problem lies. There's too many moving part for it to stick with voters and be meaningful.

SWEET: One part of the case that --


SWEET: We'll all be watching for and where his role in the campaign does come up is how he got a loan from a bank in Chicago, from a Chicago banker.

HARLOW: Yes. We talked about that.

SWEET: His name is Stephen Calk.

HARLOW: Exactly.

SWEET: Who was -- who thought he was -- he was angling for a job in the Trump White House. And he did get an appointment as -- to an advisory panel. And of those five people who were granted immunity, which you were talking about a few minutes ago, two of them -- two of them work or have worked for the bank and two of them are among the 35 on the witness list.

HARLOW: Right. He didn't get a job in the White House. But I hear your point that the case the prosecutors are going to try to make. Thank you, guys.

Salena and Lynn, we appreciate it.

Ahead for us, a new report says that North Korea is working on new advanced missiles, all of this despite the president recently declaring that North Korea is, quote, "no longer a nuclear threat."

Also, keeping a close eye on a hearing going on this morning in the Senate. Officials with the Department of Homeland Security and the Justice Department are testifying on efforts to reunite families separated at the border. We are on that.

And CNN goes one-on-one with NBA superstar LeBron James at home in his hometown of Akron, Ohio. And during Don Lemon's interview, he got candid about the president. Listen.


LEBRON JAMES, NBA STAR: What I noticed over the last few months that he's kind of used sport to kind of divide us.


HARLOW: You'll hear much more from Don's interview with LeBron ahead.

(COMMERCIAL BREAK) [10:21:12] HARLOW: Images from U.S. spy satellites along with other evidence now show that North Korea appears to be building one or possibly two new missiles. This is according to very important reporting from "The Washington Post." Though talks continue between the United States and Kim Jong-un's regime, the promise of denuclearization is just that, a promise. What has actually materialized? After the president met with Kim Jong-un, he said there's no longer a nuclear threat from North Korea. Well, what does this tell us?

Joby Warrick is the journalist who broke the story with the "Washington Post," and joins me now.

Thank you for being here, and we heard the same thing from Secretary of State Mike Pompeo, last week pushing back on lawmakers in that Senate testimony who -- you know, who were asking for evidence here. He did say that there was still fissile material being produced. But he said we have not been taken for a ride. Does this intelligence change that?

JOBY WARRICK, NATIONAL SECURITY REPORTER, THE WASHINGTON POST: Well, perhaps they're not being taken for a ride, but they sure don't have much evidence of success yet. Before the summit, North Korea was building ICBMs and making enriched uranium. Seven weeks later, they're still building missiles and making enriched uranium based on a few things that very much on the margins, returning some remains, shutting down one engine test site. But in terms of tangible evidence of any change in the behavior or intentions, we're just not seeing it.

HARLOW: What can you tell us about the new missiles that this intelligence indicates that North Korea is building, because and the specific factory? Because if I have it right, this is the factory that produced the first North Korean intercontinental ballistic missile that had the range that could hit the United States. Right?

WARRICK: Right. Right. So if you're worried about missiles hitting the U.S., this is the factory of concern. It's a real big plant outside of Pyongyang. It's where North Korea has made two of their biggest ICBMs, including the one they tested last November that had a range long enough to reach the East Coast of the United States. So that's where they're still seeing signs of work. They're seeing construction on at least one, possibly two new ICBMs, these long air frames that can reach the U.S.

HARLOW: Right. But it is important to note, you do mention this in your reporting that this is not an expansion of North Korea's abilities. Right?

WARRICK: Exactly.

HARLOW: It's building on the currently -- you know, what they currently have. And is that significant?

WARRICK: It is significant because it's not an acceleration. And that's important to point out. What's going on is business as usual, the same kind of activity we saw before the summit, they're still doing it. And they don't show any signs of stopping. In fact what we do hear is they're talking among themselves about how to conceal this activity and to prevent the U.S. from finding out what they're doing so they don't have to give it up.

HARLOW: That's important. They're talking about how to deceive the United States is what you're saying.

WARRICK: Exactly. And there are intercepts or other very highly classified sensitive intelligence collections efforts that show North Korea very much intends to deceive the U.S. on what they have.

HARLOW: And you have not gotten any comment from the White House on this, right?

WARRICK: No pushback yet. We hear from Mike Pompeo himself that they know that this activity is still going on.

HARLOW: Right.

WARRICK: So I don't think it's a surprise to them.

HARLOW: OK. Joby Warrick, important reporting. Thank you.

WARRICK: Thank you.

HARLOW: President Trump not backing down from his threat to shut down the government if he doesn't get funding for a border wall. But Republicans are hoping this threat coming so close to the midterms is just that, an empty threat.


[10:29:13] HARLOW: Well, President Trump is re-upping his threat to shut down the government just ahead of the midterms over immigration and funding for his border wall. But if you ask just about any Republican in Congress, they hate that idea.

Congressional correspondent Phil Mattingly is not in Washington.

You're not even working today.


HARLOW: So you're here with me to talk about all of it. Thank you for being here, my friend. When you listen to John Thune or John Kennedy or Senator Cornyn, it all seems like they think the president is totally bluffing here and he doesn't mean it.

MATTINGLY: They're largely brushing it off. And that's really for two reasons when you talk to both Republican senators and their top advisers. First and foremost, there's an agreed upon strategy here.


MATTINGLY: And that is, don't have a shutdown at the end of September. Look, bottom line, there will be a shutdown fight.

HARLOW: Right.

MATTINGLY: That everybody I'm talking to says it will come after the election. But you look at what John Thune said, it's a negotiating tactic. Shortly after the president made his remarks yesterday --

HARLOW: Right.

MATTINGLY: -- Mitch McConnell came to the floor, said, we will fund government in a timely and orderly manner. And then you had Senator John Kennedy, generally a supporter of the president.


MATTINGLY: Take a listen to what he had to say.