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ERIN BURNETT OUTFRONT

Trump National Security Team Addresses Russia Attacks Amid Criticism; Bookkeeper Says Manafort Was Broke In 2016 & Lied To Banks; Prosecutors Confirm Ex-Manafort Aide Rick Gates Will Testify. Aired 7- 8p ET

Aired August 2, 2018 - 19:00   ET

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


[19:00:05] WOLF BLITZER, CNN ANCHOR: "ERIN BURNETT OUTFRONT" starts right now.

ERIN BURNETT, CNN ANCHOR: OUTFRONT next, breaking news, the president's lawyers says Trump will decide within days whether he'll sit down with Bob Mueller as the president finally tells his national security team to take on Russia. Why now? Why today?

Plus, shocking testimony tonight about Paul Manafort's wealth. A key witness today says he was broke in 2016 and telling lies to fund his lifestyle.

And a Russian spy caught inside the U.S. embassy in Moscow. How did the U.S. allow her to work there for more than a decade? Let's go OUTFRONT.

And good evening. I'm Erin Burnett. The breaking news tonight, President Trump to decide within days whether he'll talk to Bob Mueller. Rudy Giuliani telling POLITICO tonight that the president and his team will spend the weekend talking it over and Giuliani adds they're on track for a decision in as little as a week. This, as the president puts on a big show at the White House to show he actually is fighting election meddling. An official telling CNN the president told his top security officials to step up and speak about his efforts to stop Russia from interfering in the U.S. election.

Now, the only person missing from the stage was President Trump himself. Instead, they all were there, the National Security Adviser John Bolton, Dan Coats, the DNI, Homeland Security Secretary Kirstjen Nielsen, the FBI Director Chris Wray and the NSA Chief and Commander of U.S. Cyber Command General Paul Nakasone. You see them all, no sign of the president. Instead, his cabinet praised the president for taking on election meddling.

(BEGIN VIDEO CLIP)

DAN COATS, DIRECTOR OF NATIONAL INTELLIGENCE: The president has specifically directed us to make the matter of the election meddling and securing our election process a top priority.

JOHN BOLTON, NATIONAL SECURITY ADVISER: The president has made it very clear, I think, what his priority is.

GEN. PAUL NAKASONE, COMMANDER, U.S. CYBER COMMAND: I appreciate the leadership and support from the president.

(END VIDEO CLIP)

BURNETT: Leadership, a priority by this president regarding election meddling? It seems almost like a bit of an alternate universe. I mean, it has been more than 18 months since President Trump took office, that to be exactly 559 days. And we're just hearing this now? In fact, just about five months ago, it was a totally different story about President Trump's role in stopping election meddling from some of the same people who were on stage praising the president today.

(BEGIN VIDEO CLIP)

CHRIS WRAY, FBI DIRECTOR: We're taking a lot of specific efforts to blunt --

SEN. JACK REED (D), RHODE ISLAND: Directed by the president?

WRAY: Not as specifically directed by the president.

REED: Director Pompeo, have you received specific presidential direction to take steps to disrupt these activities?

MIKE POMPEO, SECRETARY OF STATE: I'm not sure how specific.

MIKE ROGERS, NATIONAL SECURITY AGENCY DIRECTOR: I can't say I have been explicitly directed to "blunt" or actively stop.

(END VIDEO CLIP)

BURNETT: OK, that was loud and clear. And to be clear, that was February. As far as we know, that was still the case at least until today. Now, here's the bottom line, it is a great thing if the situation has changed, but why now? And why is the president all of a sudden so concerned that he called up his intel chiefs today and directed them to go out there publicly and, you know, contradict what they had said before from the White House podium?

After all, evidence of attacks on America's election is not new. The "New York Times" reported two weeks before trump's inauguration that he was shown highly classified information that indicated Vladimir Putin himself was personally involved in ordering the attacks. The National Intelligence Committee and the Senate Intelligence Committee both released reports, declaring Putin hacked the American election. And yet despite that evidence, the president has denied it again and again and again for these 559 days since taking office. In fact, just recently this July, as he stood beside the Russian President Vladimir Putin in front of the whole world, he called out and belittled the very same people who stood on that stage today defending him, the president in Helsinki took Putin's word against theirs.

(BEGIN VIDEO CLIP) DONALD TRUMP, PRESIDENT OF THE UNITED STATES: My people came to me, Dan Coats came to me and some others, they said they think it's Russia. I have President Putin. He just said it's not Russia. I will say this. I don't see any reason why it would be.

(END VIDEO CLIP)

BURNETT: OK, back to our big question, why did the president parade his national security chiefs out today to say something totally new which contradicts what he himself has said? Jeff Zeleny is out front live in Wellsboro, Pennsylvania where the president is tonight. And Jeff, he's about to speak, what are the odds he brings up this issue tonight?

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Erin, good evening. You can see President Trump has just taken the stage right behind me. And it's an open question (INAUDIBLE). I can tell you, it has (INAUDIBLE), he will not bring it up. The fact of the matter is the (INAUDIBLE) the White House (INAUDIBLE) earlier today was that the (INAUDIBLE) the FBI director, the national intelligence director, the secretary of Homeland Security. But what they said is not new. The fact that it was a news story is that they were talking about it at all.

[19:05:03] So the question here is, what led the president to direct them? Erin, the only thing that has changed the course is the Manafort trial. The only thing that has changed recently is the development in the Russia investigation. So that is one of the reasons we believe that the president directed his top national security officials to come out and say this today. But Erin, we will certainly let you know if the president talks about it tonight here at this rally. He certainly could. It will be the first opportunity to do so. But no matter how many national security officials come to the White House, Erin, it is still not as loud as the megaphone a president has. And so far, he is not using it. Erin.

BURNETT: Jeff Zeleny, thank you very much. And I want to go now to Corey Lewandowski, the former campaign manager for Donald Trump.

Corey, good to see you again. So, Rudy Giuliani says --

COREY LEWANDOWSKI, FORMER TRUMP CAMPAIGN MANAGER: Good to be here.

BURNETT: -- President Trump is going to decide, they're going to be talking about it over the weekend and in a week to 10 days, they're going to have a decision. Yes or no to Bob Mueller's interview. Which way do you think he goes?

LEWANDOWSKI: Well, you know, I haven't spoken to the president about it directly. But if he did ask my opinion, my -- and I'm not an attorney, but my political advice to the president would be not to sit down with Bob Mueller because there's been no evidence that this president did anything wrong, that the campaign did anything wrong during the campaign. And the opportunity to make a misstatement potentially or to potentially get caught up on the word is, is too great of something that could happen there. And I don't think the president has any reason to sit down with Bob

Mueller and have a conversation. What I do think is important is that Bob Mueller finishes his investigation and makes his report to the Department of Justice --

BURNETT: Yes.

LEWANDOWSKI: -- quickly so that we can get all this behind us.

BURNETT: So, you know, Giuliani also said yet again, Corey, this whole point about what the topics will be, right? He says, "We don't want questioning on obstruction. They would have to concede that." As far as we know, they have not done that, right? So, they are not on the same page on this crucial issue of obstruction of justice.

But, Corey, why do you think the president is so against questions about obstruction of justice given, frankly, that the public record on this speaks for itself, right? He said one thing to NBC News, another thing on Twitter, right? Why wouldn't he answer questions when he's already been so public about it? What's his issue with it?

LEWANDOWSKI: You know, look, I think the issue is that the president does want to sit down with Bob Mueller and his legal counsel is advising him against this. You know, every good attorney traditionally wants to make sure that their client doesn't make any statements that could come back to, you know, cause them some kind of pain in the future. And that is what his legal team, I think, is recommending is that the president doesn't sit down. I think the president does want to sit down with Bob Mueller, he wants to get this behind him. He wants to once and for all --

BURNETT: Do you really believe that story because there's this whole --

LEWANDOWSKI: -- in his own words say that he didn't do anything.

BURNETT: There's this whole, you know, idea out there that he likes to be the good cop and come and out say, I want to talk to him, I want to talk to him, and then all but my lawyers say I can't. You know, so he gets credit for looking like an honest guy when he has no intention of doing it. You don't buy that?

LEWANDOWSKI: Well, I don't buy that. I truly believe that this president wants to sit down and tell Bob Mueller his story but his attorneys don't want him to do it. And look, his attorneys have been negotiating with the Mueller team for months now about what a sit down could look like. This is no different than when Bill Clinton's attorneys were recommending to him not to sit down with Ken Starr. Ultimately, he was forced to do that and his attorneys didn't want him to but he was required under a court order to do it. This president is saying, look, you negotiate the terms of this discussion and I will sit down because I've nothing to hide. That's what he wants to do with the Mueller team.

BURNETT: So, you know, you heard obviously today, you know, he had his intelligence chiefs, security chiefs go out and say that he's directed them to fight meddling. Obviously, a few months ago, they said that he had not. And I just want to ask you, Corey, because you spend a lot of time with him, when it comes to Russia attacking American elections, the president has repeatedly minimized or denied Russia's role. Here are just a few examples. You've heard all of this, but let me just remind our viewers.

(BEGIN VIDEO CLIP)

TRUMP: I will tell you that President Putin was extremely strong and powerful in his denial today.

I'll go along with Russia. Could have been China, could have been a lot of different groups. It also could be somebody sitting on their bed that weighs 400 pounds, OK.

(END VIDEO CLIP)

BURNETT: Corey, why can't he just say Russia did it, period? What is the problem? Does he feel that somehow that's admitting that maybe it helped him in the election or it's some psychological reason that he won't do it?

LEWANDOWSKI: You know, look, I think Sarah Huckabee Sanders addressed this today during the press conference where she said, you know, it wasn't just Russia that has attempted to meddle in our elections. I think she said something along the lines of other countries that also done that.

BURNETT: But Corey, when it came to -- when (INAUDIBLE) really was doing it, yes, but they were small fish. And every report from the intelligence community, from every single person who works for the president now has said it was Russia, it was directed by Vladimir Putin. So to say, oh, there were other people too --

LEWANDOWSKI: And the president did come out after his meeting with Vladimir Putin --

BURNETT: -- is just denying the reality. Why does he deny?

LEWANDOWSKI: But the president came out after his meeting with Vladimir Putin and he said he misspoke and that there is no reason he wouldn't have believed that Russia interfered with that. And that's a very important point.

[19:10:06] He walked back a statement that he made in Helsinki --

BURNETT: Yes.

LEWANDOWSKI: -- and he said he made a mistake. And he didn't mean that. And that's very important. He has acknowledged that Russia could have and did interfere with the election. And --

BURNETT: But Corey --

LEWANDOWSKI: -- you have to remember the 2016 election cycle -- BURNETT: -- after he put that (INAUDIBLE) and he said that -- hold on, Corey, after he said that -- because you're right, he did, he tried to say, I meant why wouldn't it be, whatever. He then said it could be other people also. There's a lot of people out there. That is not --

LEWANDOWSKI: Well, I think --

BURNETT: -- that is far from it was Russia. Even after he clarified, he said what I just said, that's a quote.

LEWANDOWSKI: But Erin, I do believe and our intelligence community has verified this, multiple countries have attempted to influence. They have undue influence in our election process. And this is the first election since he has been the president of the United States where he can actually do something about it. Any meddling that took place took place under the Obama administration. Any hacking that took place was a fault of the previous administration. He was a candidate for office at the time. And now we have seen today a steadfast resolve from all of the members of the intelligence community and said we will ensure that the integrity of the election process under this administration in 2018 is whole.

That is a direction of this president. He had no ability in 2016 to prevent the outcome of an election. That was under the Obama watch. If they failed, that's what we're discussing.

BURNETT: Corey, and yet 18 months ago, he was told Vladimir Putin personally directed this. 18 months ago, the intelligence community came out and said Vladimir Putin did this with the intent to help Donald Trump and hurt Hillary Clinton. This was all 18 months ago. Today is the first time he has sent his intelligence chiefs out to say what they said. That's 559 days. Why did it take so long?

LEWANDOWSKI: Well, Erin, with all due respect, I think some of the information that he received from the previous intelligence individuals was not only biased but factually incorrect. And we've now seen that on multiple occasions. But more importantly --

BURNETT: About Russia? Questioning press about Russia?

LEWANDOWSKI: About a number of things including false dossiers and an investigation, I think we know that those are false. And we know there is information now that those intelligence individuals whether it's Clapper or Comey or others knew it was inaccurate and provided that to the president.

But as it relates to the integrity of our election process, just because we haven't been talking about it doesn't mean that this administration hasn't been doing -- putting steps in place to ensure that we have election integrity. And what I have said from day one, is if anybody has attempted to influence the outcome of a U.S. election in an --

BURNETT: Yes.

LEWANDOWSKI: -- inappropriate way, they should spend the rest of their lives in jail. And I firmly believe that.

BURNETT: You have said that. He has not said that, just to be clear, right? I mean, there's a difference. I know you've worked for him and you're loyal to him.

LEWANDOWSKI: No, that's what I said but I believe --

BURNETT: But that is not something we've heard from him.

LEWANDOWSKI: No, but what we saw today was a recommitment from the intelligence officials to ensure that they're taking every step necessary that we have integrity at the ballot box from November of 2018 at the direction of this president. And just because they announced it today doesn't mean they haven't been working on it for months.

BURNETT: So let me ask you about that, because you say months, right? Because today, they said, you know, repeatedly, right, his leadership and his support and they gave him credit for that and his direction. Five months ago, Dan Coats was very clear. And we'll go through exactly each of the names here, were very clear, Christopher Wray, Mike Pompeo, that they had not been directed by this president to take on Russian meddling. So that was five months ago. They were clear he had not directed them to do that. So that's changed in just the past five months.

LEWANDOWSKI: Well, I don't know when the conversation may or may not have occurred with his intelligence community members. But what I do think is they don't need a direction from the president specifically to ensure that we have integrity at the ballot box. This is something that they're tasked with, it is something that they are obligated to overseeing. It's something that they need to make sure that they are putting in place so that we have a free and fair democracy, something that should have started the day that those gentlemen came into office because, clearly, their predecessors failed during the 2016 election cycle.

BURNETT: Corey, thank you very much. I appreciate it. Good to see you.

LEWANDOWSKI: Thank you.

BURNETT: And next breaking news in the Paul Manafort trial. His long-time accountant revealing he was broke around the same time he started cozying up to the Trump campaign trying to get a job.

Plus, Bob Mueller wants to speak to the Russians who helped set up the Trump Tower meeting. Will they sit down? Their lawyers speaks out, out front. And breaking news, a suspected Russian spy found working at the U.S. embassy in Moscow for a decade.

(COMMERCIAL BREAK)

[09:18:05] BURNETT: New tonight broke, so one of Paul Manafort's long-time bookkeepers today took the stand saying the former Trump campaign chairman was broke in 2016 and lied to banks about it. So she gave examples and in one of them, she told jurors that Manafort told the bank his company made $3 million in just nine months when he actually lost more than a million dollars.

Evan Perez is out front. Evan, I know you've been there listening to this. I mean, just how serious was the financial trouble that Paul Manafort was in? And I say this in the context of we're being told this is a guy who had $60 million coming in from like basically one client, didn't even pay taxes on it and yet he's broke. I mean, it's stunning.

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: It is stunning. We heard testimony from his bookkeeper, Erin. And, she testified that at one point he was so broke that he was in danger of losing his health insurance in early 2016. Now, this is a time in early 2016 when Paul Manafort was approaching the Trump campaign about becoming the manager of the Trump campaign and offering to work for free. So the dichotomy there is kind of stunning.

The bookkeeper testified that at one point she was urgently asking for $120,000 so he could pay some bills including property taxes. We also heard much of today from the bookkeeper and from his tax preparer. And both of them testified that Paul Manafort never told either of them about more than a dozen bank accounts that he kept in the island of Cyprus and then the Saint Vincent or the Grenadines. These were the accounts that according to prosecutors, Paul Manafort was using to bankroll his lavish lifestyle at least during the time that he had a lot of money, this, of course, in contrast to 2016 as you mentioned when he was dead broke.

BURNETT: I mean, it is pretty incredible. Now, I have to ask you, Evan, because you've been in the room.

PEREZ: Right.

BURNETT: Day three, this is going much more quickly than had been earlier anticipated. Manafort is sitting in that room every day. His wife, Kathleen, I believe, behind him. You've been watching them. What has his demeanor been so far, his reaction as he hears all this?

[19:20:08] PEREZ: Well, you know, he goes in between paying close attention, even going through some of the exhibits. They have a computer screen in front of him that is showing him some of the pictures of his ostrich jacket and the python jacket and pictures of some of the things that he's bought with this money. And then there are times when he is not looking at all. He is simply writing down notes. His wife sort of pays attention sometimes and other times just stares down at the floor.

Look, the truth is, Erin, that the odds are against Paul Manafort. These are -- this is a case that's based on documents, right? And so --

BURNETT: Right.

PEREZ: -- it's very likely that he knows what his fate will be if he is found guilty which is spending the rest of his life in prison. BURNETT: Pretty incredible thing considering all the years he had

gone without anyone noticing, takes this high-profile job and then that's his undoing.

All right, thank you so much, Evan. And I want to go now to the former federal prosecutor and Rick Gates' former lawyer. He, of course, could be the star in all of this, right? The former deputy of Manafort's who has turned against him, that's Shan Wu. And White House correspondent for American Urban Radio Networks April Ryan, political editor for "The New York Times" Patrick Healy is here with me.

So let me start with you, Patrick. Manafort was broke when he went to work for Trump for free in 2016, maybe he thought that would, you know, all of a sudden, hey, you're back at the top of the U.S. political world, that's going to help me get jobs overseas and fix my whole debacle. But, how surprising is this? I mean, broke when we're hearing about $60 million from just one country.

PATRICK HEALY, POLITICS EDITOR, THE NEW YORK TIMES: Right, I mean, this a breed of kind of American business oligarchs. I mean, they are wheeler and dealers, they're looking for sort of big strikes, big deals, but particularly the political consultant game, it can be -- there can be very big pay days as we know from overseas. And it's clear that Paul Manafort saw a lot of money to be gained in places like Ukraine and sort of, you know, desperate characters and actors who were trying to get an -- who had access to a lot of money.

And frankly, he also saw that in Donald Trump. I mean, this notion of like this guy is about to win, it looks like the Republican nomination. He is loving this kind of attention. He is loving the train that he's on. You know, how much money can I make from him? You know, it is part of the American political consultant class about these sort of pay days. And, it's really surprising.

BURNETT: And, you know, April, you know, again, this issue of being broke. I mean, compared to what we heard today from the bookkeeper and some of the landscapers and others who testified about Manafort's spending. I want to show everyone a picture, because I love these pictures.

This is Manafort's house in the Hamptons. This is not the house of a broke man. $450,000 on landscaping and then he shaped a flower bed in the shape of an M. Very humble man. And then a pond, which he called one of the biggest ponds in the Hamptons, $2.2 million, April, for Apple TVs and other electronics, including $10,000 for a karaoke system. I mean, it's just stunning, I just have to say, because it just gives a perspective of how this person thought and how this person spend money. He's spending money like this and then he's broke. I mean, literally broke like in the hole by millions of dollars?

APRIL RYAN, WHITE HOUSE CORRESPONDENT, AMERICAN URBAN RADIO NETWORKS: In the hole, Erin, in the hole. He made it rain. I mean, this is all -- I mean, he actually made it rain with the $60 million and it came from basically from the Ukraine with connections to Russia. Now, here's the thing. We can't fathom -- a lot of us cannot fathom this because, you know, a lot of people have to deal with paying for college education. I mean, if you put two of the jackets together, the python and the ostrich leather, you could possibly put a down payment on an Ivy League college education for one year. You know, think of that.

BURNETT: Yes.

RYAN: I mean, he lived in a lifestyle that many of us would not understand. I mean, he was spending $1,200 on suits, one suit $1,200. And then when you think about that suit -- and I hate to get the minutia of this, but when you deal with a pocket square, if you get a $1,200 suit, you got to get a pocket square that's commensurate to the price of the suit and then the shirt. He was spending money hand over fist. And for him to be broke like that, according to what they say in 2016, he was --

BURNETT: Yes.

RYAN: -- trying to come back. He was trying to make a financial comeback by doing it for free, because he was hanging in circles with people who had the money, who did make it rain. He lost his --

BURNETT: Right.

RYAN: -- but he was trying to get it back.

BURNETT: Right, it almost sort of looked like, you know, I guess for those of you (ph), maybe pathetic to say, you want to get whatever the money for a campaign manager would be when you're sensibly worth this massive amount of money.

I mean, Shan, the landscaper, and this is -- I want to see how important you think this may be legally, said that, you know, there was a bill that was presented, right, that supposedly he gave to Manafort, right? He, the landscaper, said, no, I never did. And he called it a "fake invoice". He said the vendor name was wrong, the address had errors in it, the home improvement vendor also said the same thing that something that he had -- you know, Manafort had been presented that Manafort was not from him, it had the wrong name and address. What could be the significance of these fake invoices? Which, by the way, totaled in hundreds of thousands of dollars a piece.

[19:25:05] SHAN WU, FORMER FEDERAL PROSECUTOR: Yes, that's a very fascinating piece of evidence that's certainly come in. And we don't know exactly how the prosecutors are going to end up tying that up yet. They're simply laying the foundation. But certainly, it sounds like from what we heard in court today that this is from merchandise and the services possibly never received. So that certainly could be an important building block towards the notion that he was hiding money, that he actually got money and he wanted to make it look like he was --

BURNETT: Yes.

WU: -- spending it. But actually he was just holding on to it.

BURNETT: All right, so Shan, you know Rick Gates, right? I mean, because you were his former lawyer, so you know him well. And he's obviously centered to all of this. You know, obviously, today, we heard from more people all saying Manafort and Manafort alone was the one they dealt with, the one who dealt the wires, the one who did everything, right? Never heard any mention of Rick Gates. And now, you know, as, of course, Manafort is trying to say Rick Gates is the orchestrater of all of this, so don't blame me, blame him.

Rick Gates may testify tomorrow and hit the stand, all right. You know him. How important is his testimony going to be?

WU: Yes, I have to say anything I talk about, of course, is not violating or based on attorney client confidences.

BURNETT: Yes.

WU: But, I think that Rick is extremely important to the case. And it's a very bold move by the defense to put all their eggs in one basket and blame him for everything. And it's very clever in the sense that he, as an operational person, is going to be at the center of everything so it allows the defense to mount a broad attack against all of the government's case just by focusing it on him. So I think it's going to be critical. Downside to that, of course, put all your eggs in one basket, something happens to the basket. For example, if Rick --

BURNETT: Yes.

WU: -- comes across very well on the stand, that's going to be very devastating for him.

BURNETT: Well, let's just say, if the glove doesn't fit, Patrick, there can be a big issue.

HEALY: Right.

BURNETT: Most people know to what I am referring.

Patrick, Gates and Manafort worked side by side for years, right?

HEALY: Right, right.

BURNETT: Manafort was shocked and broken in a certain sense when Gates turned on him. This is his worst nightmare.

HEALY: Yes. I mean, Rick Gates knows all the secrets. I mean, this was a guy who they were extremely close. Rick Gates was very loyal. I think Paul Manafort of all the things that he thought could go sort of wrong during the investigation, it wasn't necessarily Rick Gates turning on him. I mean, and the reality is we don't know where this is going to go. But in terms of credibility, I mean, this -- you see the way that the prosecution is going. I mean, Manafort is very roughed up. And you're going to have Rick Gates potentially coming in -- BURNETT: Yes.

HEALY: -- and, you know, laying on thick a lot of details that are going to, you know, be filling in blanks about either how greedy he was, how willing he was to go --

BURNETT: Yes.

HEALY: -- with people like Donald Trump to Ukraine for a pay day.

BURNETT: And yet, April, you heard Evan. We're not seeing any -- no sadness or contrition but a lot of engagement whether it be with the actual physical exhibits or the computer in front of him from Manafort.

RYAN: Right. You know, and that's the piece. You know, people want to see that you have some kind of remorse or what have you. And it doesn't play well in the court of public opinion when you sit there and see your items and you just have no regard either way. But the bottom line is, you know, we'll see what happens when -- how he reacts when -- again, when Rick Gates takes the stand. I mean, that's going to be very interesting because Rick Gates is trying to save himself. You know, he's known as -- he perjured himself. And now, he's -- the prosecution is saying, look, we want you to believe him. Even though he purged himself, we want you to believe him because he is going to be the smoking gun --

BURNETT: Right.

APRIL: -- for Manafort. We're going to see how deep this is and how extensive this is.

BURNETT: Yes. And of course, Rick Gates, he had a motive, right? He's got, I believe, four kids, young kids at home.

All right, thank you all very much. Next, Bob Mueller wants to speak with the Russian who helped set up the infamous Trump Tower meeting with an admitted Russian informant. Will they speak to the special counsel? Returning (ph) is my guess.

Plus, breaking news, a suspected Russian spy had been working in the U.S. embassy for more than a decade. Why did it take so long for them to either figure it out or to fire her? She had the schedule for the president of the United States on her desktop.

(COMMERCIAL BREAK)

[19:32:41] ERIN BURNETT, CNN HOST: New tonight, Bob Mueller wants to talk to a Russian billionaire whose family is at the center of the 2016 Trump Tower meeting with an admitted Russian informant. I'm talking about Aras Agalarov, who has close ties to Vladimir Putin and to Donald Trump. Mueller is also pushing for an interview with Agalarov's son, Emin, who is a pop star. The pop star in fact who, you know that man because he is the one who was reaching out to Don Jr. to set up that meeting, the one in Trump Tower.

OUTFRONT now, Emin and Aras Agalarov's lawyer, Scott Balber.

And, Scott, thank you. Great to see you again.

So, let me just ask you the big question here. Bob Mueller wants to talk to both of your clients, Aras and the pop star Emin. Will they do it? Will they sit down with him?

SCOTT BALBER, ATTORNEY FOR EMIN AND ARAS AGALAROV: Theoretically, yes. We certainly are willing and eager to cooperate.

This is not big news. We have been engaged in conversations with the Mueller team for many months. We have not been able to come to ground on what the terms of any interview would be. So, it has not happened yet.

BURNETT: So, what is the hold up? What's the -- I mean, you've been talking for many months. There is obviously something that they are very strong about and you are very strong about. What is that?

BALBER: Look, they have been operating in good faith. We've been operating in good faith. I think there are issues about location. For some reason, the Mueller team doesn't want to go to Moscow. And my folks are not enthusiastic about coming here.

I think scope of questioning is another issue. What are topics? I mean, if it's purely about a single meeting, we have nothing to hide from our perspective.

(CROSSTALK)

BURNETT: So, you're willing to answer about that particular meeting?

BALBER: Most definitely.

BURNETT: But they want more.

BALBER: They want more. And I think to engage with non-U.S. persons about their business dealings that are separate and distinct from anything that happen in the U.S. I think is beyond the pale.

BURNETT: Beyond the pale, except there are a lot of ties between the Trump family and the Agalarov family, right? You're talking about the beauty pageant, right? You're talking about Emin saying it was his idea for Trump Tower Moscow. I mean, their knowledge or links to the Trump/Russia business connection would appear to be relevant.

BALBER: There are certainly a number of connections. I wouldn't say a tight relationship. Yes, there was the Miss Universe pageant which occurred. There were discussions of a Trump Tower Moscow which never went anywhere.

And that's really the extent of the relationship. I think it's a business relationship and somewhat of a social relationship. But that's the extent of it.

BURNETT: So, as I said, right, the Miss Universe pageant in Moscow in 2013, they were there together, and then there were talks about the Trump Tower in Moscow, which, you know, Emin, you know, as I said, admitted.

[19:35:02] Who said, hey, that was my idea, didn't go anywhere, but it was my idea.

Aras Agalarov, Trump tweeted to him after the pageant, I had a great weekend with you and your family. You've done a fantastic job. Trump Tower Moscow is next. Emin was wow.

And then they were all together in Las Vegas. It wasn't -- it wasn't just a casual nothing relationship.

BALBER: Most definitely there was a relationship.

BURNETT: Yes.

BALBER: Most definitely there was a friendship and there were some threshold business dealings. But that's the extent of it.

And again, we'd love to be in a position to cooperate under the right terms. We have nothing to hide on any of these issues but getting to ground and where that would be and what are would be --

(CROSSTALK)

BURNETT: So, just so I understand -- you are willing to talk about anything about the meeting in Trump Tower, but nothing about the business dealings or something about the business dealings?

BALBER: No, I didn't say that either. Look, this is -- this is the kind of stuff that we've had conversations about. Yes, certain things are certainly permissible. But to get into wide ranging discussions about other unrelated issues seems out of bounds especially for folks who were not U.S. persons, who don't live here, who don't do business here.

BURNETT: And you are saying this issue about jurisdiction matters and that they haven't been to the United States in two years. I would say in part because of all of this.

BALBER: They don't live here, and no, they haven't been here. And the problem, Erin, is not just about the Mueller team. I mean, there are congressional investigations. There are civil lawsuits out there.

Once you come here, you can be subpoenaed and you can be subject to anybody's jurisdiction. So, there's just a skepticism, a concern about being subject to U.S. jurisdiction generally.

BURNETT: So, when you meet them, you're going to Moscow.

BALBER: Hopefully. Moscow is great this time of year.

BURNETT: So, you are not meeting them in person? It's been mostly phone?

BALBER: With the Mueller team?

BURNETT: No, with your client?

BALBER: Oh, I meet them in Moscow.

BURNETT: You meet them in Moscow?

BALBER: Yes.

BURNETT: OK. You have been -- OK.

So, about this meeting, Michael Cohen came out with this sort of bombshell allegation, as you well know, right, saying Donald Trump himself knew about the meeting, that Michael Cohen witnessed Don Jr. informing his father about the meeting. Now, obviously, your clients were not present at any pre-discussions. But to the best of your knowledge, did the president know about the meeting?

BALBER: My clients have no reason to believe that that occurred. They never spoke to the president about the meeting before or after, and they never heard anything either before or after to even suggest the president was informed the meeting was going to happen. From their perspective, he learned about it when it came out in the press.

BURNETT: Wouldn't they have wanted him to know? I mean, taking aside everything that's happened since at the time, right, someone they know is going to come extensively with information, Donald Trump is their contact. I would assume they would have liked for him to have known at the time.

BALBER: Yes, but again, I think the whole scope of the meeting has been somewhat misrepresented. From my client's perspective, this was about making introduction of a Russian lawyer to talk about the somewhat obscure Magnitsky Act. From their perspective, it was never about dirt on anybody.

This was really doing a favor to facilitate a meeting between this Russian lawyer and Trump folks --

BURNETT: So, when Rob Goldstone is telling Donald Trump Jr. it's dirt on Hillary Clinton, the lawyer at the meeting admitted to NBC News she was a Russian informant. You are saying the Agalarovs had no knowledge of any of that?

BALBER: Had absolutely no reason to believe she was a, quote, Russian informant at all. She was a private lawyer. They knew her because of her real estate practice. Nobody knew or any reason to believe she had any kind of like government connection.

BURNETT: So, they were surprised when she admitted she's an informant?

BALBER: We were all very surprised by that.

BURNETT: All right. Earlier this year, your client released a music video, Emin, right, the pop star. BALBER: Yes.

BURNETT: That pretty clearly referenced the salacious allegation in the Trump dossier about meeting with prostitutes in a hotel in Moscow. Emin is with a Donald Trump impersonator in this music video, in a hotel. There's a slew of models, secretly being recorded, there's a bed, there's the whole thing. Here's a quick clip.

(MUSIC VIDEO CLIP PLAYS)

BURNETT: And Donald Trump is sort of the voyeur on the side of the room, obviously, just to emphasize. This is an impersonator. Then the video shows someone secretly erasing the Trump impersonator.

OK, does Emin know anything about the dossier allegation?

BALBER: Most definitely not. This is purely poking fun at fake news and some of the media tension that has been drawn to things where there's no underlying substance. Catchy tune, I think.

BURNETT: So he doesn't know anything about it?

BALBER: Most definitely not.

BURNETT: He is just taking on the allegations of the dossier and making music.

BALBER: That's right.

BURNETT: All right. Thank you very much. I appreciate it.

BALBER: Thank you.

BURNETT: All right. And next, breaking news, CNN learning a Russian spy worked at the U.S. embassy in Moscow for more than 10 years. For more than 10 years? And things like the president's schedule are on her desk and Americans didn't do anything about it? What the heck happened?

Plus, making story, could Paulette Jordan, a Native American woman and a Democrat be the next governor of Idaho?

(BEGIN VIDEO CLIP)

PAULETTE JORDAN (D), IDAHO GUBERNATORIAL CANDIDATE: The people have been fooled for far too long and now they are waking up.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[19:43:33] BURNETT: Breaking news, a suspected Russian spy has been caught working in the American embassy in Moscow. The Russian national had been working there for more than a decade. A senior administration official says she was caught red handed giving information to the Russians. OUTFRONT now, Bob Baer, CNN intelligence and security analyst, former

CIA operative who at one time did work at the U.S. embassy in Moscow as well.

All right, Bob, here's the thing. I mean, you got Russian nationals working in that embassy. One would assume all of them are, you know, screened by the Russian government providing some sort of information.

A senior administration official tells CNN, quote, we figure all of them are talking to the FSB, right, the Russian intelligence agency, but she was giving them way more information than she should have.

And I read that and I scratched my head and I think, what, they didn't know what information she is giving. She is working there for a year. She has access to all these things like the president's personal schedule and a decade goes by?

ROBERT BAER, FORMER CIA OPERATIVE: Well, you know, things do fall between the crack in these embassies. All the Russians, you're absolutely right, are reporting to the FSB in one way or another. But she probably went way farther than the other ones, you know, getting documents, the president's schedule and the rest of it. She shouldn't be.

You know, what they probably did in a case like this is you put a camera in her office, surreptitiously film her, watch what she is getting access to and then you fire her. You know, if you -- but for me, Erin, the big point is that we are coming out with this now.

[19:45:01] BURNETT: Yes.

BAER: That this is leaked out. What the federal government, what the State Department and CIA are telling us is we are coming after the Russians. We don't care what this president has to say about Putin, it's a new relationship, you know, turning a blind eye to election meddling, we are coming after them.

You'll just see this everywhere and this is more a part of it. And President Trump is not going to be able to --

BURNETT: It is almost like a freelancing -- I mean, I do find it interesting, because to your point, OK, so people make some mistakes, all right? But she gets caught. Ordinarily, we wouldn't hear about it, I would imagine.

But now, we are hearing about it. You are saying that's very much on purpose.

BAER: Very much on purpose. We normally fire these people quietly. You don't make a big deal of it. The fact that it happened a year ago and it is coming out now tells the whole story.

And you have the National Security Agency and everybody else are coming out and saying the Russians are meddling. So, you are seeing pretty much a revolt inside Washington against the president. They are not going to let this stand the Russians coming after us again in 2018 and 2020.

BURNETT: All right. Thank you very much, Bob Baer. An interesting take on it.

And, of course, now think about how they snuck that camera in there without anyone noticing when of course everyone assumes there are cameras being snuck in on them, right? I mean, it is sort of the exciting part about spycraft, still that it can happen that way.

OUTFRONT next: the state where Republican roots run incredibly deep, can a Democratic woman win in November?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'll hold my nose and vote for Brad Little. I think he's a RINO.

UNIDENTIFIED FEMALE: You're still going to vote for him though?

UNIDENTIFIED MALE: I'm still going to vote for him because the alternative is insanity.

(END VIDEO CLIP)

BURNETT: Plus, Jeanne Moos on Paul Manafort's fashion choices.

(COMMERCIAL BREAK)

[19:50:04] BURNETT: The president is in Pennsylvania speaking live right now. It's the second time this week he's hit the trail for Republicans. He's going gung-ho on it.

A source close to the president says he's worried about Democrats taking over the House and rallying his base.

Did he ever think he would need to worry at all about a Democrat, a woman, taking over deep red Idaho?

Kyung Lah is OUTFRONT with our special series, "Born to Run."

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN SENIOR NATIONAL CORRESPONDENT: The rural ranges of Idaho, where Republican roots run deep. The political landscape Paulette Jordan runs straight into in her race for Idaho governor.

How many women have been governor in this state? Zero.

PAULETTE JORDAN (D), IDAHO GOVERNOR CANDIDATE: Zero.

LAH: How many people of color have been governor of this state?

JORDAN: Zero.

LAH: You're looking at some headwinds?

JORDAN: Yes. Well, it's about time.

LAH: The Idaho-born native American and former state legislator is as comfortable doing a national news interview on horseback as she is with the political barrier she faces.

JORDAN: It is upon us to challenge the status quo and why it's unique for all the women across the country taking on these opportunities to be leaders and provide a different kind of voice.

LAH: Different is an understatement in this deeply conservative Republican state, which is 80 percent white. At 38, Jordan would be the first Native American governor in U.S. history if elected?

JORDAN: I'm sorry. I'm a little bit -- it's really nice to meet you.

LAH: Inspiring an unexpected Democratic surge. At this Boise street fair, Jordan was supposed to walk through it. Supporter after supporter wouldn't let her get that far.

UNIDENTIFIED FEMALE: I think you're fabulous.

LAH: So many of them turned out in Idaho's primary that some precincts ran out of ballots and Jordan crushed the establishment candidate.

ANDREW MILLER, TRUMP VOTER: I voted for Trump in the 2016 elections.

LAH: So, it's possible a Trump voter could support a Democrat in 2018?

MILLER: Absolutely.

LAH: Andrew crossing the aisle for the same reason he voted for Trump, independence from the political power structure.

MILLER: I just think she has a better pedigree, I think background and support and protect our public lands.

LAH: She doesn't look like a lot of Idaho politicians, though.

MILLER: I think it's fantastic, right?

LAH: How do you turn 30 years of Republican voting blue?

JORDAN: The people have been fooled for far too long. Now, they're waking up because it's our responsibility to get to them.

LAH: Jordan will have to win communities like this one to win the governor's job. This is Canyon County. It's a conservative stronghold. It's a lot like other parts of Idaho. In this state, registered Republicans outnumber Democrats more than 4-1.

Do you think this woman could win in the state of Idaho?

RICK ZOGG, REGISTERED REPUBLICAN: No.

LAH: Many won't even consider it. GOP candidate Brad Little is their man.

STEVE COLSON, REGISTERED REPUBLICAN: I will hold my nose and vote for Brad Little. I think he's a RINO.

LAH: You're still going to vote for him though?

COLSON: I'm still going to vote for him because the alternative is insanity.

JONATHAN PARKER, CHAIRMAN, IDAHO REPUBLICAN PARTY: Should we be worried? We think we're going to win. But I don't want to take anything for granted.

LAH: You're watching her.

PARKER: She's getting a lot of national attention, something that candidates in Idaho aren't used to.

LAH: Who do we have to talk to, to remember a time when Democrats were in power here?

CHUCK MALLOY, POLITICAL COLUMNIST: Well, here I am.

LAH: Chuck Malloy was a young political reporter back in the '80s and '90s. No Idaho Democratic governors are alive anymore. If Paulette Jordan rides away with the governor's mansion, says Malloy, it's not a blue wave, that would signal a tsunami.

MALLOY: You can be Adolf Hitler as a Republican and get elected.

LAH: In this state?

MALLOY: In this state. People may think, well, he may be a dirty rat but he's our dirty rat.

(END VIDEOTAPE)

LAH: We reached out to the lieutenant governor's campaign to see if Brad Little would like to take part in this is gubernatorial run. His campaign declined saying he was simply not available -- Erin.

BURNETT: All right. Kyung, thank you very much. That's another fascinating one to watch.

And next, Jeanne Moos on Manafort's now infamous ostrich jacket. Guess what, everybody? There is also an ostrich vest.

(COMMERCIAL BREAK)

[19:57:52] BURNETT: So, Paul Manafort's ostrich jacket is not alone. He has a vest. And yes, they are just as hideous as you might expect.

Here's Jeanne.

(BEGIN VIDEOTAPE) JEANNE MOOS, CNN CORRESPONDENT: The price of an ostrich jacket doesn't really bite until you see it on the invoice, 15,000 bucks. And you're probably imagining this.

UNIDENTIFIED FEMALE: I would imagine like there's feathers on it somewhere.

MOOS: Read one tweet, Manafort's $15,000 ostrich jacket probably looked like A but I'm going to imagine B anyway.

Even Kimmel fell for the feathers.

JIMMY KIMMEL, COMEDIAN: That should be one he has to wear in jail, just sitting in the cell dressed up like Big Bird waiting for the trial.

MOOS: But the jacket is actually leather, not feather. You know it's ostrich from the bumps where the follicles used to be.

Manafort has bought an ostrich vest for $9,500, something even Mr. Burns on the "Simpsons" didn't possess.

Ostriches get no respect and neither does an ostrich jacket. It is something you need in order to work for Trump. It allows you to stick your head in the sand.

But the leather is considered luxury. It ends up in $35,000 Birkin bags by Hermes.

You know who else flaunts the ostrich as a status symbol?

J.Lo in her latest music video about money. But Ostrich wasn't even Manafort's most expensive exotic skin. That would be his $18,500 python jacket. Then there was plaid so similar worn by Trump ex- lawyer, Michael Cohen, someone tweeted did Manafort loan Cohen his jacket?

Still, it's the ostrich jacket that has everyone craning their necks.

SETH MEYERS, COMEDIAN: That's right. He had a coat made from an ostrich, which explains the state's first witness.

MOOS: We haven't seen Manafort in it, yet someone noted this looks better wearing it. In the eyes of the ostrich, Manafort is already guilty.

Jeanne Moos, CNN --

UNIDENTIFIED MALE: Does that make him guilty?

MOOS: -- New York.

(END VIDEOTAPE)

(LAUGHTER)

BURNETT: All right. And there had to be a vest, too.

Thanks for joining us. Anderson is next.