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Manafort Trial Resumes After Packed First Day; Facebook Continues Pages Spreading Disinformation. Aired 7-7:30a ET

Aired August 1, 2018 - 07:00   ET

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


(BEGIN VIDEOTAPE)

SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: The stakes couldn't be higher for the president.

[07:00:05] The Trump administration had no coherent plan how to reunite parents and children.

UNIDENTIFIED MALE: They are the victims of their parents, who made a terrible decision of breaking and entering into our country.

JONATHAN D. WHITE, COMMANDER, U.S. PUBLIC HEALTH SERVICE COMMISSIONED CORPS: We raised a number of concerns separation of children from parents entails significant potential for traumatic psychological injury for the child.

UNIDENTIFIED FEMALE: I'm glad they came forward and said the Russians are still trying to do this.

UNIDENTIFIED MALE: We have to protect our democracy. The Trump administration is not doing enough.

UNIDENTIFIED FEMALE: Everyone and everything is now a target.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

ALISYN CAMEROTA, CNN ANCHOR: We'll be covering all of those stories very soon. Good morning, everyone. Welcome to your NEW DAY. John Berman is off. David Gregory joins me, so we'll get into what Facebook has done, among other things.

DAVID GREGORY, CNN ANCHOR: Right. At it again. The Mueller investigation moving forward in the courtroom. And yet, these threats are still out there.

CAMEROTA: Great point. Meanwhile, up first, President Trump's former campaign chairman, Paul Manafort, is on trial for conspiracy to avoid paying taxes on millions of dollars that he made working for a political party in Ukraine and then lying to banks to get more loans.

But Manafort's defense team accuses former deputy, Rick Gates, of embezzling millions of dollars. Gates is now the government's star witness. GREGORY: CNN has learned that President Trump, as you might imagine, is closely watching the Manafort trial. The president has been glued to the TV as he traveled to Florida last night.

The president's allies continue to try to distance Mr. Trump from Manafort, the man who ran the Trump campaign for three pivotal months through the Republican convention.

CNN's Joe Johns, he's live outside the courthouse in Alexandria, Virginia, with more on the trial.

Good morning, Joe.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, David. Morning of the second day for the first trial arising out of Special Counsel Robert Mueller's Russia investigation. And so far, it's shaping up to be a case about whether a long-time Washington power broker built a fortune, a million-dollar fortune, out of a house of lies or if he was somehow duped into doing it by his long-time deputy.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): President Trump's former campaign chairman, Paul Manafort, facing day two of his trial for alleged financial fraud after both sides laid the groundwork for what's likely to be a dramatic showdown between Manafort and his long-time deputy and the government's key witness, Rick Gates.

If convicted, Manafort is facing a maximum sentence of over 300 years on 18 charges, including filing false tax returns, failing to report foreign bank accounts and defrauding several banks.

Prosecutors portraying Manafort as a, quote, "shrewd liar" who opened 30 bank accounts in three foreign countries to avoid paying taxes on $60 million of income from his work in Ukraine, including helping former Ukrainian president and Putin ally, Viktor Yanukovych.

Prosecutors arguing that the money went towards supporting Manafort's lavish lifestyle, including multiple homes, expensive cars and watches, even a $15,000 ostrich jacket.

The defense pointing the finger at Gates, arguing he was the mastermind behind the scheme, who swindled Manafort. Gates is cooperating with the special counsel after pleading guilty to conspiring to defraud the United States and lying to the FBI, a fact the defense plans to use to discredit his testimony.

Gates also worked for the Trump campaign, but neither the president nor the investigation into potential Russia collusion are likely to be addressed in this case.

KELLYANNE CONWAY, COUNSELOR TO DONALD TRUMP: This trial obviously centers on matters that have nothing to do with the campaign.

JOHNS: The Trump administration continuing to distance itself from Manafort. RUDY GIULIANI, ATTORNEY FOR DONALD TRUMP: Paul Manafort does not know

anything, nor could it be possible he did. He was with him for four months.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Manafort has nothing to do with our campaign.

JOHNS: Despite praising his work during the three months he led the president's campaign.

TRUMP: Paul Manafort just came on. He's great.

COREY LEWANDOWSKI, FORMER TRUMP CAMPAIGN MANAGER: Bringing on a professional like Paul helped us grow the campaign.

JOHNS: Sources tell CNN that, publicly, the White House strategy is to downplay the proceedings. But behind the scenes, the president is keeping a close eye on the trial, watching TV coverage and asking his legal team for updates.

President Trump has repeatedly said that his former campaign chairman is being treated unfairly, sparking speculation that Manafort may be holding out for a possible pardon.

REP. ADAM SCHIFF (D-CA), RANKING MEMBER, INTELLIGENCE COMMITTEE: He's going to be the last man defending Donald Trump and bet it all on a pardon. And that may be where, at least, he's making his appeal.

JOHNS: Manafort's lawyers expressing confidence after day one of the trial.

THOMAS ZEHLNE, ATTORNEY FOR PAUL MANAFORT: Feeling good.

UNIDENTIFIED FEMALE: Good. Any chance that he may decide to flip and cooperate?

ZEHLNE: No chance.

(END VIDEOTAPE)

JOHNS: OK, and so today, prosecutors continue to layout their case. They're expected to call an FBI agent to the stand. Also, Democratic political consultant Daniel Rabin, who will talk about, we're told, how he worked for Ukrainian campaigns.

[07:05:06]

Yesterday another top Democratic consultant also testified. That, of course, is the person who served as the campaign strategist for Bernie Sanders in 2016, Tad Devine. And he talked about the extraordinary lengths Manafort went to to try to help the Ukrainian president.

David and Alisyn, back to you.

CAMEROTA: OK, Joe, thank you very much.

Let's bring in CNN legal analyst and former federal prosecutor Laura Coates and CNN chief legal analyst Jeffrey Toobin.

Jeffrey, let's talk about the strategy that Paul Manafort seems to be using in court. So Paul Manafort's lawyers are saying it's actually his right-hand man that you should be looking at. He's a liar, Rick Gates, and he can't be trusted. And he duped Paul Manafort, and he'll say anything now to save his own skin.

Have you ever seen that strategy anywhere before? It's ringing -- it's ringing a strange bell this week.

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: In almost every major case where an underling flips against a superior, you see some version of this defense. That, in fact, it was the underling who set up the whole scam, who benefitted from it, and the superior, whether it's a mob boss or an insider trading case, this pattern of blaming the subordinate who flips is very frequent, very common in federal court.

It usually doesn't work, but it sometimes does. And it certainly is a reasonable response to the evidence by Manafort's lawyers.

GREGORY: It's interesting, Laura, that in this case, this is the first major test of what Mueller has. He's going to court. This is the campaign manager with a tie to Russia, because he was working on Yanukovych's campaign in Ukraine, who had ties to Putin and the Russian regime.

And yet, there's no evidence that, in this case, Manafort was in any way a conduit for Russian interference in the campaign. So if you're going to make a political argument based on the evidence that will unfold in this campaign, from the Trump side, you would say he doesn't have much, if this is what he's coming out of the box with. And there's nothing that anything to do with how he conducted the campaign. Does that work as an argument?

LAURA COATES, CNN LEGAL ANALYST: It doesn't, because although, excuse the pun, you want to lead with your trump. You want to go with your strongest case against anyone, if you're prosecuting.

Remember, this case is largely based on documentary evidence. The documents will speak for themselves. A lot of the witnesses there are people who are just going to provide the documents, and say, "Here it is. Here's the evidence of money laundering. Here's how you know there was tax fraud going on. Here's how you know that he was trying to evade federal tax laws is documentary.

So if your thought is, well, why not go with the stronger case about collusion? Well, the other side is, well, why would you not be more dismissive and get the cases out of the way? The easiest cases to actually prosecute.

So yes, politically, it probably plays well to say, if that's all you've got, then, you know, you better come up with something new. But in reality, as a prosecutor, you would get the -- you would lead with the case that has the easiest resolution, the documentary-based case, and that's this one. GREGORY: You know, just another beat on this. Jeffrey, I mean,

you've talked about this in other circumstances. Under normal circumstances, in terms of political fallout, if you have a guy like Michael Flynn, if you have a guy like Paul Manafort, who could very well be convicted and spend the rest of his life in prison, it doesn't reflect well on you as the chief executive of the country, as the president, you surrounded yourself with these people in very high positions. Trump seems to be a different figure here.

TOOBIN: Well, I mean, he's trying to be a different figure here. I mean, all they're saying is, "well, he was only the campaign chairman for four months," four months is a long time in a political campaign. They don't last ten years. They last about a year. So if the guy is the campaign chairman for four months, that's -- you know, that's a big deal.

Look, I don't blame the Trump, you know, administration for trying to distance themselves, but I think, you know, we as journalists have to be -- you know, have to, you know, tell the truth here and say this guy was very important in the Trump campaign.

Now, it is important to point out that these crimes, if they're proved, really all did take place before he was evolved in -- he was involved in the campaign and the crimes do not relate to the campaign, but was he -- what does this say about Donald Trump that this is the guy he chose to run his campaign? It doesn't say anything good.

CAMEROTA: And Laura, I'm also now sure that you can say that President Trump wouldn't have known about this. The reports of Paul Manafort's shady business dealings were out there. Maybe have been out there for years, vetting -- I mean, a simple Google search turns up some of this itself. So in terms of judgment that this is the guy hanging around your campaign, I think that that is actually a legitimate question.

COATES: I think it is. And it also reflects the overwhelming evidence that the presidential administration did not vet, either in office or prior to that. So it follows that same narrative.

But I want to be very clear with everyone. Just because there's not a collusion aspect to this actual investigation or this particular trial, do not be confused. Mueller had every right to explore this particular aspect of the case. He was allowed, under Rosenstein, to say, "If I come across any information that is also nefarious or criminal in the course of my investigations of collusion, then I can look at this, as well."

[07:10:20]

So I want people to look at this as a comprehensive way and say, just because it's not a collusion aspect, it doesn't mean that Mueller somehow is going on a witch hunt. But certainly, you could have done this so easily with a Google hunt and found this information very easily. TOOBIN: Can I just expand on that just quickly? The -- and also it's

important to remember who -- what Manafort was doing in the Ukraine. He was working for Viktor Yanukovych, who was working for pro-Putin political figure.

So it relates to the overall investigation and the overall alliance between candidate Trump and -- and Vladimir Putin. The fact that he would name Paul Manafort, who basically only had one client for the last several years, who was a pro-Putin figure in the pivotal country of Ukraine, that tells you something about how candidate Trump regarded the whole Putin situation. He was on Putin's side.

GREGORY: Well, and here is one other beat, which is what was happening in Ukraine, going back to 2014. And that is that the Russian government was interfering in their critical infrastructure and their election infrastructure, far beyond what they're accused of doing and what has been demonstrated that they did in 2016. So that's what's so striking.

And I think to Laura's point, too, prosecutors prosecute crimes when they come across them. That's what they do. And it's within his portfolio to be able to do that, just like referring this case to the Southern District of New York related to Michael Cohen and payouts. I mean, if that's bank fraud, those are a crime that they'll prosecute even if it, to the rest of us, might seem like, "Well, what does that have to do with the investigation?"

TOOBIN: And -- yes. That's right. I mean, you follow where the evidence leads. Now, you know, Robert -- Robert Mueller is not interested in possible fraud involving the taxicab industry in New York City, but having found evidence relating to it, he turned it over to the Southern District of New York, which is -- you know, which is appropriate.

CAMEROTA: OK. Now to our kicker. Here is -- we're going to play a little game of "Jeopardy." Here is the "Jeopardy" category, Jeffrey. Names being floated to replace host Alex Trebek.

Anybody have any answers?

TOOBIN: Who is Counselor Coates?

CAMEROTA: Ding, ding, ding, ding, ding, ding.

TOOBIN: I am so down on the Coates campaign. Can I just say one thing to Laura?

CAMEROTA: Yes.

TOOBIN: "Odds and Ends" for 200.

I want you to say, "The answer is --." Come on.

COATES: I will tell you, though, last week on "Jeopardy," because I do watch the show, last week they actually had -- the answer was National Security Advisor who plead guilty to lying to the FBI. No one got the answer.

CAMEROTA: Yes.

COATES: I would have gotten that answer.

CAMEROTA: You would have gotten the answer.

COATES: And you would have gotten it, too, Jeffrey.

GREGORY: But you wouldn't want to give all this up.

TOOBIN: Can I -- you know what? It's time for a little bragging. I have been an answer on --

CAMEROTA: Really?

TOOBIN: -- a question on "Who is Jeffrey Toobin" twice.

CAMEROTA: What?

TOOBIN: Twice. Once, a daily double. Say no more, right? A daily double, baby.

COATES: That's a mike drop.

CAMEROTA: Wow. That is breaking news.

GREGORY: Can I just say, I've been on "Jeopardy" when they've come to D.C., and it's so nerve-wracking. Because during the rehearsal part, you get to kind of run through it, and my son was in the audience, my younger son Jet. I got nothing right, and he almost left the auditorium.

CAMEROTA: In shame.

GREGORY: He is like this is really -- I thought this was not going to go well.

CAMEROTA: So you've been on "Jeopardy." You're being asked to replace Alex Trebek or talked about it. You've been a daily double. I've watched "Jeopardy." So I mean, we're all in this together.

TOOBIN: On another thing, I have asked to be on "Celebrity Jeopardy," and I have been told in no uncertain terms, "You are not enough of a celebrity to be on 'Celebrity Jeopardy'."

CAMEROTA: We beg to differ. But hold on.

So Alex Trebek wants you to replace him. He says you're his favorite person, television expert, pundit. And you had a conversation with him?

COATES: Well, I was able to reach out and thank him, because I am just an audience fan of "Jeopardy." I had no idea. I've never met him before. I just wanted to thank him, and he was so gracious and humble about it. And I was like, "Oh, my God. Did I just call you Alex? Oh, my goodness."

Who is -- my mind, I think "Jeopardy" is either Alex Trebek with a mustache or Alex Trebek without a moustache.

GREGORY: All I can think about is -- all I can think about is "And here's your host, Laura Coates."

All right. We've got to go. Jeffrey, Laura, thank you. See you on "Jeopardy."

All right. When we come back, Facebook says that it shut down a suspected Russian network of pages organizing political events in the U.S. Is Russia again trying to interfere in the upcoming elections? We'll ask a senator on the Intelligence Committee, coming up here next.

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[07:18:59]

GREGORY: As we've been telling you this morning, Facebook officials have announced they've uncovered another disinformation campaign aimed at American voters ahead of the midterm elections. Is Russia behind this new round of interference?

Joining us now, independent senator, Angus King of Maine. He serves on the Senate Intelligence Committee, which is holding a hearing today on foreign influence operations on social media.

Senator, good to see you.

SEN. ANGUS KING (I), MAINE: Thank you, David. I thought you were going to start with something like "Russian Active Measures" for 200. I mean, continuing the "Jeopardy" --

GREGORY: Yes, the "Jeopardy" -- the "Jeopardy" theme is with us all morning, absolutely right. What is the upshot of what has been discovered here? Facebook is reporting an attempt to spread more propaganda to influence voters. In what direction do we -- are you confident that Russia is behind it?

KING: I'm reasonably confident. I don't think anybody knows for sure, because that's one of the points.

I think there are three things, David, on this. One is, they're back. We're -- we're pretty confident of that. No. 2, it's more sophisticated than it was two years ago. For example, they're making it harder to trace back the origin of some of these posts, because they're using VPNs around the world.

[07:20:10] GREGORY: Can I -- I want to interrupt on that --

KING: And they're not paying in rubles this time.

GREGORY: I want to interrupt on that point, because I think it speaks to something. There's a lot of debate about whether the administration is taking this seriously enough. James Clapper, former head of -- Director of National Intelligence, who was on the program a few minutes ago saying, clearly, Facebook, which has stepped up its vigilance, is getting help from the government.

Is that a sign to you that the administration is taking this more seriously and is working with companies like Facebook to detect it?

KING: I think yesterday was a turning point. I think he's right and both -- I think Facebook is working with both the FBI -- I don't have confirmation of that, but that's my understanding. And also the Secretary of Homeland Security yesterday, I think, made the strongest statement in, you know, 18, 19 months on this issue, that A, they're doing it, and B, they're going to pay a price.

That was, I hope, a turning point in terms of the attention to this being paid by the administration. Because it's been pretty much radio silence, as you know, since -- since the election.

So I think that is a turning point. They are doing it. They are taking it more seriously, I think, and I hope -- and I hope that will be continuing.

But it doesn't reassure you when the first thing John Bolton does is eliminate the position of cyber coordinator in the National Security Council. I mean, come on. That just doesn't make any sense given the magnitude of the risk and the fact that it's an ongoing risk.

GREGORY: So let's talk about that risk. Director of National Intelligence Dan Coats has said that the red light is flashing here, indicating that we have to use our imagination to not just look at what happened in 2016, to project forward to see what's possible.

So what is possible? What do you worry about and what do Americans need to be on guard about?

KING: Well, I think the first thing -- and this isn't the subject of our hearing today, but we've been talking about it all year. And that is Russian attempts to get into the state voting systems, voting machines, registration lists, and that kind of thing. I think that's still a risk. There's been a lot of work done, but frankly, I don't think the states are as secure as they think they are. So that's a risk for this fall.

Secondly is this whole disinformation campaign, which they are very good at. The Russians -- the Soviet Union did this starting in the '30s. They are really good at it. They're experienced at it, and they're way ahead of us, I believe, in the use of the technology to do what they've always been doing.

But David, I think the other important thing is -- and this is evidence we got from Facebook yesterday points this up. This isn't all about elections. This is about undermining our whole system. These posts that they were talking about yesterday -- which by the way, I believe are the tip of the iceberg, I think there's a lot more going on -- these posts are designed to divide us. And they're taking the strengths of our country -- free expression,

First Amendment, and a democratic system where opinion matters and information matters -- and they're turning it on us. And that's what's so dangerous, and that's going to continue. It's not just about elections. It's about dividing our society in any which way they can.

GREGORY: Right. And one of the revelations, I think, for Facebook after 2016 was to really grapple with the idea of what are they? They are a platform. They are a community. But there's some idealism in all of that that was exploited.

And now they're facing the question of, well, are they actually a news source? And do they have an editing function? Which, I think, Mark Zuckerberg has talked about and been -- you know, he's got new policies, but there's some inconsistencies there about what they allow.

What should the government be doing at this point, if anything, to regulate Facebook, to try to regulate the spreading of propaganda?

KING: Well, it's -- I'm reluctant to use the term regulation and the Internet, because you're then getting into First Amendment, free expression, government's heavy hand --

GREGORY: But that's the rub, right? You have to call it out and decide what you feel is appropriate.

KING: Well, I think there's some things that, for example -- well, as you mentioned at the beginning, we're having a hearing today with experts on this whole process, and one of my key questions is going to be, OK, what do we do?

One possibility, for example, is requiring or otherwise stipulating that we know when we're being served information by bots, by robotic responses. I don't think that has a place in this -- in this discourse. Can we somehow identify the source of the information?

What are the responsibilities of Facebook? This is a -- this is a very tough area. Because as you say, if Facebook is a news source, the First Amendment says we don't regulate that. But are there areas where, particularly where we're talking about foreign actors, and that's going to be the work of our committee starting today, and well, actually, starting a year ago.

But today is going to be a focus, and we're looking forward to further hearings on this subject. I think this is one of the great dilemmas of how do we balance national security and privacy, and the First Amendment? That's going to be the challenge.

[07:25:08]

GREGORY: Well, right, and what if something is demonstrably false, provably false? Does that have a place on Facebook? Zuckerberg's example was, well, Holocaust denial could, you know, be permissible, even though that's provably false. KING: Well, and that's the -- that's the issue. And of course, in a

newspaper situation, if -- if a newspaper publishes something or you publish something that you know is false, you're liable under the laws of libel. That's not -- that's not true of Facebook. And so we're really evolving the legal sort of structure here.

Facebook at the initial stages of this just said, "Look, we're just turning the switch, and everybody can do what they want."

GREGORY: Right.

KING: I think now they're realizing they have some level of responsibility. What they did yesterday is an important step, but how they institutionalize that, how they follow through on it, that's going to be the real question.

GREGORY: Senator, before I let you go, one question about politics. Steve Bannon, who was of course, the president's advisor in the White House and on the campaign, said the November election is an up or down vote on impeachment of the president. We don't know what the result, ultimately, of the Mueller investigation will be, or his report to Congress, but as an independent, would you caution Democrats against pursuing impeachment politically?

KING: I mean, impeachment is a political matter, as I think you -- you outline. I don't think -- I don't think -- I don't think Steve Bannon's right. I don't see it that way. There are so many other issues. I don't think anybody in Maine is going to vote based upon impeachment or not impeachment.

Impeachment is an extraordinary remedy, and to be honest, in this situation, where you've got the country so divided, I think the way to solve problems if you don't like the president or don't like the president's party, is elections is the way to do it, not a process that would be highly divisive, and at least a third of the country would disagree with it.

So I think I can understand Steve Bannon saying that, because that's what he wants to do to rouse up his base.

GREGORY: Right.

KING: But I don't really think that's what this election is all about. It's all about a whole breadth of issues, whether it's immigration or separating children at the border or cuts to health care.

GREGORY: Senator Angus King, we'll leave it there. Thanks so much for your time. We'll be following the hearing today.

KING: Thanks, David.

CAMEROTA: All right, David. A top health official in this country says that he tried to warn the Trump administration of the significant harm that would be done to kids who were separated from their parents, but the U.S. government ignored that advice. We have Rick Santorum on his -- his thoughts on all this, next.

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