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FaceBook Discovers Fake Accounts; Jury for Manafort Trial; Kelly Stays as Chief of Staff; Trump Mulls Tax Cut; Trump Wars with Koch Brothers; Trump Steps up Rallies. Aired 1-1:30p ET

Aired July 31, 2018 - 13:00   ET


[13:00:00] MARY KATHARINE HAM, SENIOR WRITER, "THE FEDERALIST": Is inherently bad at doing these things and it's going to be bad at this is the heartbreaking thing.

DANA BASH, CNN ANCHOR: It certainly is.

Thank you so much for joining us here on INSIDE POLITICS. "WOLF" picks up right now.

ANNOUNCER: This is CNN breaking news.

WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington. Wherever you're watching from around the world, thanks very much for joining us.

We start with breaking news and an announcement by FaceBook that they're shutting down dozens of FaceBook and Instagram accounts believed, suspected to be run by Russians. One of the pages was actually coordinating a left-wing political protest here in Washington, D.C.

Let's go to our senior investigative correspondent Drew Griffin. He's joining us right now.

Drew, update our viewers.

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Wolf, in what could be evidence, Russian actors continue to try to disrupt, meddle, infiltrate the U.S. political debate, if not the elections themselves. FaceBook is saying it's finding this inauthentic behavior. Whoever set up these pages isn't who they say they are. And though they're not sure, FaceBook believes it could be Russians. It's typical of the behavior that they saw around the 2016 elections, setting up fake sites, getting real Americans to like, follow these pages, then sending out disinformation to encourage division in America. And it did work. Nearly 290,000 users followed these 32 fake sites that we're talking about now.

One of the most followed pages was called "Resisters." This is it. They actually set up a counter protest to a white nationalist rally being planned in D.C. less than two weeks from today. Again, these are believed to be Russians. Their event was called "No Unite the Right." And the people behind the FaceBook page actually communicated with real American citizens in five different FaceBook groups who agreed to co-host this event. Two thousand six hundred FaceBook users said they were interested in attending.

And that was just one of the 30 events, Wolf. The fake accounts set up in the past year. As for who's behind it, FaceBook can't say for sure that it's the Russians, but it has all the hallmarks of the activities that the Russians did around the presidential elections, though there are some differences. This time the pages didn't lead back to Russian IP addresses, like they did with that St. Petersburg IRA firm. And they used third-party services to buy ads to boost their posts and encourage people to follow the pages, all in an attempt to hide who they were.


BLITZER: So what is FaceBook doing about all of this?

GRIFFIN: Well, first and foremost, part of its new transparency policy, it's telling us about it. It seems FaceBook is trying to do the right thing here. They are actively looking for these fake accounts. Immediately took down the pages. And now they're reaching out, reaching back to the people who said they were going to the "resist" event, for instance, to let them know that these were Russians that may have been behind this whole thing.


BLITZER: And as the U.S. intelligence and law enforcement community has concluded, the Russians are desperately trying, and they succeed pretty much, in sowing as much political dissent, division here in the United States, as they possibly can. And that's presumably behind these FaceBook accounts, right?

GRIFFIN: That's absolutely correct. In other words, the pattern that we saw back in the 2016 campaign, the same pattern continued after the election. We know that. And now, according to FaceBook, we may be seeing the same exact model here.

What is different is all the side switching that apparently goes on, which is also a testimony to the fact that what the intelligence community is telling us. They don't care whose side they're promoting, they just want to promote division within the U.S. political debate.

BLITZER: And there certainly is plenty of division right now in the U.S. political debate.

Drew Griffin, thanks for that report.

There's another major story developing right now.

Jury selection is expected to wrap up any minute now in the trial of former Trump campaign chairman Paul Manafort. He's accused of hiding millions of dollars from his lobbying work for pro-Russian politicians in Ukraine. The case represents the first high-profile test of Robert Mueller's Russia investigation, and it shows how deeply authorities are now digging into the private dealings of Trump associates. Let's go to our senior Washington correspondent Joe Johns. He's

outside the courthouse in Alexandria, Virginia, right outside Washington.

Joe, update us on the jury selection. Explain the significance of this first trial stemming from the Mueller investigation.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, right at the top, Wolf, quite frankly, this thing is moving at a very fast pace. The judge indicating he thinks he can get a jury impaneled this afternoon. Next question is when do opening statements begin? Of course, that's why they call this the rocket docket.

Now, to the implications of this trial, they're just enormous. It's essentially the former Trump campaign manager facing off against the Russia investigation Special Counsel Robert Mueller. And you cannot understate just how big this is, no matter which way it goes. On one hand, if, for example, Mr. Manafort is found guilty, that makes it a real problem for the president of the United States to continue to call this a witch hunt.

[13:05:15] Now, what about this case? We have 18 charges in the indictment. We have something like three dozen witnesses. The former partner of Paul Manafort, Rick Gates, could testify and the trial could last up to three weeks. At the end of the day, though, a big deal for Paul Manafort himself, who was a huge power broker in Washington, D.C. He has another trial scheduled later this year, Wolf.

BLITZER: And they're accusing him of taking about $60 million from pro-Russian politicians in Ukraine. A significant sum of money. Some of that money laundered through Cyprus and elsewhere.

Joe Johns, we'll get back to you. I know any moment now they should have that jury in place.

We're also learning new information right now about the White House Chief of Staff John Kelly. Questions about whether he'll stay or go. They've been swirling now for months. Today, Kelly gave his staff an answer.

Let's go to our White House correspondent, Kaitlan Collins.

Kaitlan, so what is General Kelly saying?

KAITLAN COLLINS, CNN CORRESPONDENT: Wolf, quite a stunning turn of events here at the White House with Chief of Staff John Kelly telling his senior staff in a meeting here in the West Wing yesterday that President Trump has asked him to stay on as the chief of staff through at least 2020, and that John Kelly has accepted that invitation from the president.

Now, this is surprising because it comes amid weeks and months of reporting that John Kelly, his departure, he was on his way out almost imminently. And, even so, right before the president's trip to Europe, when senior aides thought John Kelly may have days or only hours left on the job. Now that seems to have changed, and we got a little hint of that yesterday when we were in the Oval Office as the president was swearing in the new secretary of Veterans Affairs. And he gave John Kelly a shout out for it being his one year on the job as chief of staff. John Kelly smiled and saluted the president in return.

But this is quite surprising given that John Kelly seemed to be on the chopping block in recent weeks here, Wolf. He had been telling aides that he believed that this is a way he could rehabilitate his image in the West Wing, something he thinks has been badly changed because of the fallout from that Rob Porter scandal, the staff secretary who was accused of domestic abuse of his ex-wives. John Kelly took the brunt of the fall for it because he was told -- we were told by sources that he actually had known of the allegations against Porter for months before they surfaced, yet allowed him to keep working in the West Wing here anyway, Wolf.

So John Kelly seems to be doing a little bit of rehab here, believing he can change his image here in the West Wing if he stays on for a little bit longer, which he does seem to have agreed to do, Wolf. But the caveat with that of course being White House officials do not sign contracts. It is not guaranteed that he will be here through 2020, through the re-election campaign. But, of course, right now, that seems to be what President Trump would like.

BLITZER: At least for now, key words. A vote of confidence for General Kelly.

Kaitlan Collins at the White House, thanks very much.

Let's bring in former Department of Justice prosecutor Joseph Moreno, CNN political analyst Julie Hirschfeld Davis, and our chief political analyst Gloria Borger.

Let's talk about Kelly for a moment. What do you think?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, it's really surprising since we have known, through our reporting, that the president's been calling around to people asking for potential replacements. It seems to me, and Julie knows more about this than I do, that this is a story the White House wanted out there. And maybe it's a way for Kelly to rehabilitate himself because there are plenty of stories about how he wasn't really in charge, that Jared and Ivanka could walk into the president's office any time they wanted, and he had tried to put a stop to that. Obviously the Rob Porter case was a problem for him. We all watched his face during Helsinki and he wasn't -- didn't seem to be smiling a lot.

So it -- you know, it seems to me that they're putting this story out so that as long as Kelly decides to stay, the message is, I'm in charge here. The president likes me. And if and when I decide to leave, it will be my decision and nobody else's. Now, maybe I'm being cynical about this, maybe he will stay through 2020, but that seems a little farfetched to me.

BLITZER: What do you think?

JULIE HIRSCHFELD DAVIS, CNN POLITICAL ANALYST: Well, I mean, I think Gloria is absolutely right. I think the most interesting thing about this story is that we know about it, right, which I think is clearly by design. You know, as Kaitlan reported, there have been whispers, rumors for many, many weeks and months now that John Kelly was on his way out the door, that he doesn't actually have much of a role anymore when it comes to the president and what's actually going on in this White House. Those have certainly picked up in recent weeks with the on boarding of Bill Shine, former Fox News executive, who's now the deputy chief of staff and has a big communications role.

Communications, after all is, you know, a big thing for the president, maybe the most important thing in the operational sort of setup of his White House. So I do think that there's an aspect to this, which is about John Kelly wanting to be able to say publicly that I'm here until I'm not here anymore. I'm in charge of what I'm in charge of. It's not totally clear to many people I've talked to in the West Wing exactly what that is. But he has been sidelined to a great degree. So this may just be about President Trump feeling like he can keep him around and still do everything that he wants to do.

[13:10:22] BLITZER: They really wanted this story out, the White House.


BLITZER: "The Wall Street Journal" broke it. And within a nanosecond, every other news organization got confirmation from senior officials at the White House. They --

BORGER: Seems to me like you've covered the White House before. You know how that works. But, yes.

BLITZER: Once it happens like that, you know they want that story out for whatever reason.


BLITZER: Let's talk about Manafort for a moment.

Joseph, you've actually argued before this federal judge in Alexandria, Virginia. The rocket docket as -- they're moving quickly over there, aren't they?

JOSEPH MORENO, FORMER DOJ PROSECUTOR: Absolutely, Wolf. It's not only the rocket docket, but Judge Ellis, before whom this trail is, is particularly known to have minimal patience for any kind of theatrics. He's is a by the book, get to the point kind of judge. He's a prosecutor's judge in the form of he will not tolerate the sort of drama that sometimes defense counsels like to bring to the table. You know, we do our thing when we're on the defense side.

So not only is it a fast jurisdiction, but this judge will move things along. I would not be surprised if opening statements are not beginning at 9:00 tomorrow morning.

BLITZER: Very, very quickly indeed, 16 jurors, four alternates, 12 jurors. It means a lot for the Mueller probe right now what happens in

Alexandria, Virginia.

BORGER: Yes, absolutely crucial for the Mueller probe. And it's not because the trial itself is going to be about the Russia probe, because it really isn't. But this is key. If Mueller's team fails to get a conviction on Manafort, the wind will be at the back of those who are screaming witch hunt, namely the president of the United States. If they get a conviction on Manafort, it will be very important to them as they go -- as they go forward.

And, doesn't forget, we're probably going to hear from somebody like Rick Gates, Manafort's former business partner, who has pled to Mueller. So that will be interesting to hear for all of us. And we're going to get some kind of insight about how deeply the Mueller investigation has really looked into the private business dealings of people in the Trump administration. And that could scare some people. But very, very key for Mueller. They need to win this one.

BLITZER: They certainly do. And it comes at a time when the president is now echoing his private attorney, Rudy Giuliani, tweeting all of a sudden, you know what, there was no collusion, but collusion isn't even a crime.

DAVIS: Right. I mean it's an amazing sort of moving of the goalposts, even for this president, who likes to move the goalposts. You know, he's no longer saying that -- it's his argument that, you know, nobody in his campaign ever had contact with Russians or ever worked with Russians. But just the fact of doing that may not have been illegal. Well, you know, the important thing there is not the president's message. It's the legal standard, which you know a lot more about than I do. But if there is a criminal conspiracy here, it doesn't matter what you call it, they're still going to have grounds to bring charges on whoever it is they find to have been involved in that sort of activity, if there was any.

BLITZER: Because collusion is just a word. You can say conspire. You can say cooperate. There's conspiracy to commit a crime, or collusion to commit a crime, that's still a crime.

MORENO: Wolf, I would consider this a jury nullification strategy. It's basically saying, even if my client is technically guilty, either the deck was stacked against him or the punishment doesn't fit the crime. So right now it's no collusion. Then it was, you know, collusion's not a crime. I predict the next will be, well, maybe it's a crime, but it's only a technical violation, so don't worry so much about it.

BORGER: No big deal.

MORENO: No big deal.

Now, that could be the next battleground. And, look, it's debatable. It's a theory, not a statute that has been tested under scenarios like this. It would be a stretch in any case, much less against the president. Now, it doesn't mean it can't work and it certainly has teeth. But I could certainly see that's the next pivot to where this strategy is going.

BORGER: But isn't conspiracy to defraud the United States government a crime as opposed to a technicality, which is effectively what collusion is?

MORENO: It is certainly a crime, absolutely. It's a serious crime.

BORGER: Right.

MORENO: It's punishable with serious consequences. But I could certainly see, if your audience isn't a jury in a district court but the American people --

BORGER: Right.

MORENO: Then that's the message. It's like, you know, look, it may have been -- you know, the Trump Tower meeting may have been an attempt at something, but it didn't bear any fruit, so let's not worry about it. It didn't -- nothing -- it didn't amount to anything. And if this, you know, biased prosecutor with his 13 angry Democrats on his team bring charges, well, it's a technicality, don't worry about it. So I could see the message going in that direction.

DAVIS: Well, and there is also this whole question of wittingly or unwittingly, right? I mean they -- if they have information that the Russians were conspiring to defraud the United States government but they somehow are able to argue that those involved, if there were any in the Trump campaign, didn't know what they were doing, that is clearly going to be a line of defense that they're going to try to use, and at least try to argue before an actual jury, if not in the jury of public opinion, if this were to go to some sort of congressional procedure.

[13:15:01] BLITZER: Of course, as you correctly point out, intent is always something they -- the prosecutors look very closely at.

Guys, thank you very much.

Don't go too far away. We have more to discuss.

The president reportedly considering another tax cut. This one just for largely the richest Americans. Why he bypassed Congress to do it.

Plus, they're among the biggest donors for conservatives, but today the president just went after -- went to war, really, with the Koch brothers, calling them a total joke. You'll hear why.

And just hours from now, Americans will be able to buy plans for 3-D guns. The president says he's concerned as lawmakers sound the alarm. We have new details and what these guns can do.


[13:20:03] BLITZER: The Trump administration could be setting itself up for a future court battle. "The New York Times" now reporting that the administration is considering bypassing Congress to grant a $100 billion tax cut almost exclusively to the very wealthy.

Joining us now, the man who broke the story, tax and economics reporter for "The New York Times," Jim Tankersley.

So tell us, Jim, how this would work.

JIM TANKERSLEY, TAX AND ECONOMICS REPORTER, "THE NEW YORK TIMES": Sure. The Treasury Department would issue a rule, Wolf, and it would -- it would change the way that the government considers the word "cost" when it comes up with capital gains taxation rates. So essentially what would happen is they would make it so that capital gains are now indexed to inflation, which means the price you paid for a stock or a home a long time ago would be calculated in today's dollars, not on the price that you paid for it in terms of how much tax you would owe on that when you sell it. What that works out to, I know that's all very wonky, but what it works out to is a big cut for really the top 1 percent or the top 0.1 percent of Americans who pay most of our capital gains taxes.

BLITZER: Yes, that would be a huge bonanza for them. I understand it's something that former President George H.W. Bush considered back in 1992 before leaving office. He didn't follow through on it. Why?

TANKERSLEY: Well, his Treasury Department concluded that it was not within the government's power to do this. And subsequent presidents have looked at this and concluded the same. So what's happened now is the conservative activists have pointed to some new legal writings from conservatives saying, no, actually the Treasury Department does have this authority and they're urging the Trump administration to reconsider what has been a pretty uniform declaration from presidents on down the line.

BLITZER: Jim Tankersley, good reporting. Thank you very much.

Let's discuss this and more. Gloria and Julie are still with us.

So, Gloria, it would be a big deal for the very, very wealthy if they didn't have to worry about paying all those capital gains taxes.

BORGER: Right, it would be, but not so fast. First of all, I think this would wind up in court immediately. The Democrats would jump on it. And talk about, you know, this is a tax cut for the wealthy because capital gains taxes are largely paid by high earners. I think it's a test of executive power. I mean I remember -- I'm old enough to remember when the Democrats were screaming about Barack Obama's imperial presidency because of his executive action on dreamers. Well, this is beyond that. Tax legislation originates in the House of Representatives. And so I think this would just wind up in court and they'd be asking for that.

BLITZER: What do you think?

DAVIS: Well, I mean, it isn't anything new for the administration to be figuring out what they can do with their executive power when it comes to the tax code, because we all know how hard it is to pass legislation on Capitol Hill. And even the Obama administration did actually consider using executive action to actually cut down on the use of tax loopholes, these corporate inversions, for instance --

BORGER: Right.

DAVIS: And some of the tax methods that corporations would use to try to cut down on their tax bills. But it's always very controversial. Both sides do it.

I think the issue with this particular move would be the administration's argument -- President Trump's whole argument for his economic policy is that he is a populist. Everything that he's doing, it may look like on paper it's for the rich, but, in fact, it accrues to the advantage of the working people, the middle class, folks who need jobs and need higher wages in this country and there's no way of making that argument when it comes to this. It's clearly, as my colleagues reported, two-thirds of the benefit of this goes to the top 0.1 percent. It's clearly a tax cut for the wealthy. And I think, Gloria's right, it would be -- it would be sold and debated in a political realm as such.

BLITZER: We'll see if the president follows through.

BORGER: Well, at the same time, by the way, the president's supporters, for example, in Iowa, farmers, are complaining because they're being hurt. So, you know, politically, as Julie was saying, this is not a win-win for him. It might be a win for his business. It might be a win for him personally. We don't know because we haven't looked at his taxes. But for most of his supporters, I don't think so.

BLITZER: The very, very wealthy supporters, it would be a nice little bonanza.

BORGER: Yes. Absolutely.

BLITZER: Let's talk about the Koch brothers for a moment. All of a sudden the president is going to war with the Koch brothers, who have been among the most ardent and generous supporters for Republicans causes over the years. The president tweeting this morning, the Koch brothers are total jokes. He said their network is highly overrated. He says these are two nice guys with bad ideas.

How risky is it to all of a sudden go to war with the Koch brothers who have provided so much money to various conservative think tanks and influential organizations?

BORGER: Look, they've never been Trump fans. And they disagree with him on almost every piece of economic policy, especially tariffs, for example. And they made the case that we're going to support candidates, that means either Democrat or Republican, who support us.

I mean this is a big rift in the Republican Party. They were so dependable for Republicans. But they're not, you know, they're not -- they're not Trump fans, period. And I think the president just punched back.

[13:25:02] DAVIS: Right. And I also think that the president -- I mean I -- you know, I hesitate to ever try to guess what is behind some of his tweets, but if he were to calculate this, you're not going to stop the Koch brothers from weighing in, in a big way on the Republican side in politics. They are going to continue to do that no matter whether the president insults them, berates them on Twitter or not. And so this is kind of a free shot for him. They are the Republican establishment. Therefore, you know, free trade. They're not for the tariffs. They think that it's a trade war that he's sparked by engaging in this tit-for-tat on trade. There also have been in the past in support of some pro-immigration policies, which obviously is very much at odds with what President Trump is talking about and saying on the campaign trail. So there are these differences and I think he won't hesitate to point them out, knowing that he -- they will probably still be there for the vast majority of Republicans who need help in the midterm elections.

BORGER: And also, by the way, they're for prison reform, which is something that Jared Kushner has been working on. And they're -- you know, they've worked with Democrats on prison reform. And I -- you know, Jeff Sessions is not their biggest supporter on that, but Jared Kushner is. So the -- you know, the Koch brothers are kind of -- they're hard to pigeon hole sometimes. And Trump is a little easier.

BLITZER: And all of a sudden, Julie, we're hearing that between now and the midterms in November, we're going to see the president doing all these political rallies out there, going from state to state, district to district. Tonight he's going to be down in Florida, in Tampa, at a huge rally.

DAVIS: And he'll be in Pennsylvania later this week. I mean he's really clearly chomping at the bit. We had heard earlier in the year that he was really going to try to confine -- or his -- at least his aides were going to confine his campaigning to, you know, deep red states where there was potentially a vulnerable Democrat where he had won big and he could really boost the Republican base and try to damage the Democrat and help Republicans keep control of the Senate that way. Now it seems like he did this interview with Sean Hannity on Friday on the radio. He's saying he wants to travel six to seven days a week when it gets to be 60 days out. I doubt we're going to see that extensive of a campaign. But clearly the president wants to be out there, wants to be in these rallies, sort of throwing out that red meat for the base.

BLITZER: He loves those political rallies. He loved them during the campaign. Still loves them now. We'll cover them, of course, as we always do.

Guys, thank you very, very much.

Despite talks, U.S. spy agencies are saying North Korea is working on new missiles. Is President Trump getting played by Kim Jong-un?

Plus, President Trump is directly contradicting his own secretary of state. Why it shows he's out of sync with top officials in his own administration when it comes to foreign policy.