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EARLY START

Day Three of Manafort Trial Brings in Several Witnesses; Iran Begins Military Exercises in Persian Gulf. Aired 5-5:30a ET

Aired August 3, 2018 - 05:00   ET

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


[05:00:00] KAYLEE HARTUNG, CNN ANCHOR: -- Shake Shack and test out the new straws.

DAVE BRIGGS, CNN ANCHOR: Test them out? Let's go. When do they open? I think they serve breakfast in some locations.

HARTUNG: Not soon enough.

BRIGGS: Including the airports.

HARTUNG: It's 4:59 in the East right now. I'm guessing Shake Shack won't be open an hour from now when the show is over. EARLY START continues right now.

(BEGIN VIDEO CLIP)

KIRSTJEN NIELSEN, HOMELAND SECURITY SECRETARY: Our democracy itself is in the crosshairs.

DAN COATS, NATIONAL INTELLIGENCE DIRECTOR: We acknowledge the threat. It is real.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We are being hindered by the Russian hoax. It's a hoax.

(END VIDEO CLIP)

BRIGGS: The president still dismissing the Russia investigation even after his own top officials blatantly warn Russia is still meddling in U.S. elections.

HARTUNG: The July jobs report is due out this morning. Why unemployment is expected to tick down but wage growth remained stalled.

BRIGGS: And who should be responsible for reuniting kids with parents who are deported? Well, the government says that responsibility falls to the ACLU.

Good morning, everyone. Welcome to EARLY START. I'm Dave Briggs.

HARTUNG: And I'm Kaylee Hartung. It's Friday, August 3rd, it's 5:00 a.m. in the East. It's been a long week.

BRIGGS: It sure has. HARTUNG: A lot of Russian news. You can always depend on Stephen

Colbert to help you wrap your mind around it.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, " THE LATE SHOW WITH STEPHEN COLBERT": Trump still getting legal advice from attorney and man who just realized how he'll be remembered. Rudolph Giuliani.

RUDY GIULIANI, PRESIDENT TRUMP'S LAWYER: Playing poker, when up, you can put up or shut up. What do you got?

COLBERT: You better hope you're not playing poker. Because you're client can't keep a casino running.

(END VIDEO CLIP)

HARTUNG: Well, if you listen to the president talk about Russia and listen to his top intel officials talk about Russia, there is a bit of a disconnect. The president ranting once again about the Russian hoax hours after his own top officials called out the Kremlin for interfering in U.S. elections. At a rally in Pennsylvania last night the president touted the Helsinki summit with Vladimir Putin and completely ignored Russian attacks on American democracy.

(BEGIN VIDEO CLIP)

TRUMP: We got along really well. By the way, that's a good thing. Not a bad thing. That's a really good thing. Now we're being hindered by the Russian hoax. It's a hoax. Everybody said wow, that was a great -- that was great. A couple of hours later, I started hearing these reports that, you know, they wanted me to walk up. They wanted me to walk up and go like this. Son of a --

(END VIDEO CLIP)

BRIGGS: For those of you wondering how the president might box, you're welcome. Hours earlier, key members of the president's National Security Team appeared in the White House briefing room to warn the country's Russia election interference is still ongoing.

(BEGIN VIDEO CLIP)

COATS: In regards to Russian involvement in the midterm elections, we continue to see a pervasive messaging campaign by Russia to try to weaken and divide the United States.

CHRISTOPHER WRAY, FBI DIRECTOR: Russia attempted to interfere with the last election and continues to engage and malign influence operations to this day. This is a threat we need to take extremely seriously and to tackle and respond to with fierce determination and focus.

NIELSEN: Our democracy itself is in the crosshairs. Free and fair elections are the cornerstone of our democracy and it has become clear that they are the target of our adversaries who seek, as the DNI just said, to sow discord and undermine our way of life.

(END VIDEO CLIP)

BRIGGS: Kirstjen Nielsen there. The director of National Intelligence Dan Coats told reporters he still doesn't fully understand what took place in President Trump's one-on-one meeting with Vladimir Putin in Helsinki.

A suspected Russian spy worked at the U.S. embassy in Moscow undetected for more than a decade before she was fired last year. A senior administration official tells CNN the woman, a Russian national, worked for years with the Secret Service. She first came under suspicion in 2016. A routine State Department security review found she was having regular, unauthorized meetings with Russian intelligence.

She used the Secret Service's Internet and e-mail systems, but the official says she did not have access to highly classified information. There has been no comment from the State Department.

HARTUNG: Turns out Rick Gates may testify against his old boss, former Trump campaign manager Paul Manafort as early as today. That was just one of the big developments in the Manafort trial on Thursday. Another, Manafort's bookkeeper testifying that despite making millions, Manafort went broke and lied to banks to secure big loans.

CNN's Jessica Schneider has more from Washington.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Kaylee and Dave, several revelations on day three of the Manafort trial. So first, the judge seemed to entice the defense team to have Paul Manafort himself take the stand. The judge said that Manafort obviously does not have to, but if his lawyers wanted to bring up that he has never been audited by the IRS, that would be the way to do it. And that's something the defense team wants.

Also prosecutors now say they will call Rick Gates to the stand. Gates of course was Manafort's right-hand man during the campaign. Also in his lobbying business. And Gates has already pleaded guilty and is now cooperating with the special counsel.

[05:05:05] And finally, Paul Manafort's bookkeeper testified that sure, he may have made millions, but by 2016 he was flat broke, he'd maxed out his credit line, and the bookkeeper even said that Manafort and Gates were then sending out fake inflated business statements to banks so they could get loans. And of course that gets to the heart of the prosecution's bank fraud case.

Plus the government keeps hammering home these lifestyle details. They had a landscaper talk about just how much Paul Manafort paid him. $500,000 for the upkeep of hundreds of flowers and what the landscaper called the largest personal pond in the ritzy Hamptons section of Long Island. Plus Paul Manafort spent $2.2 million on home entertainment technology including $10,000 on a karaoke system. So a lot of details prosecutors have packed in. We're going to hear

more from Manafort's accountant today as prosecutors continue to delve into all of his finances -- Kaylee and Dave.

BRIGGS: Thank you, Jessica.

Can the U.S. economy keep up the pace of swift job creation? We'll get a fresh look at the labor market this morning when the government releases the July jobs report. Economists are expecting 190,000 new positions, down slightly from last month. The unemployment rate is expected to tick down to 3.9 percent. It rose in June as more than 600,000 Americans got off the sidelines and entered the labor market looking for work. The big mystery, though, has been wages.

That number expected to hold steady at 2.7 percent annual rate. Wages have been stuck in that range for the past three years. Historically as the labor market tightens, wages rise significantly but that growth has been slow since the Great Recession.

Wall Street will also be looking carefully at where the jobs are being created. So far, no signs that tariffs are slowing down this economy, but this will mark the first big economic report of the third quarter following strong economic growth in the second quarter.

As the labor market tightens, wages rise, but the growth has been slow since the great recession. Wall street is looking at where the jobs are created. So far no signs that tariffs are slowing down the economy, but this will mark the first big economic report of the third quarter following strong economic growth in the second quarter.

HARTUNG: First daughter and presidential adviser Ivanka Trump she's breaking from her father's rhetoric against the media. Ivanka said she does need agree with his characterization of the press as the enemy of the people.

(BEGIN VIDEO CLIP)

IVANKA TRUMP, WHITE HOUSE ADVISER: I've certainly received my fair share of reporting on me personally that I know not to be fully accurate. So I've, you know, had some -- I have some sensitivity around why people have concerns and gripe, especially when they're sort of feel targeted. But no, I do not feel that the media is the enemy of the people.

(END VIDEO CLIP)

HARTUNG: Hours later, though, President Trump put his own spin on Ivanka's remarks with a tweet saying, "She's right. It is actually the fake news that is the enemy of the people."

BRIGGS: President Trump's eldest son says the platform of the Democratic Party is scarily similar to that of the Nazi Party in the 1930s. Donald Trump Jr. spoke to Jack Posobiec, a prominent right- wing voice online who helped spread the pizzagate hoax. Posobiec interviewed Don Jr. at the premiere of a new movie by controversial right-wing personality Dinesh D'Souza. Listen to this. (BEGIN VIDEO CLIP)

DONALD TRUMP JUNIOR, PRESIDENT TRUMP'S ELDEST SON: You know, you see the Nazi platform in the early 1930s and what was actually put out there as -- and you look at it compare it to, like, the DNC platform of today, you're saying man, those things are awfully similar. To a point where it's actually scary.

(END VIDEO CLIP)

BRIGGS: There is something scary there. Don Junior's comment is false equivalence. The Nazi Party's violent racism and anti-Semitism has no counterpart in today's Democratic Party. Don Junior later fought back against attacks on his remark with a tweet that linked to a related clip from the new D'Souza movie.

Wow. That happened.

HARTUNG: That absolutely happened. Wow.

Iran is launching a major military exercise in the Persian Gulf. Tehran is likely to show its ability to shut down the oil flow through the Strait of Hormuz, a move with broad implications. This exercise was planned but it starts amid intensifying rhetoric with the U.S.

CNN's Nic Robertson joins us live from the Gulf of Oman, near the Strait. Nic, what are the larger implications of these exercise?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Sure. I mean, what you have right now the pictures that you see by U.S. military officials is dozens of smaller boats in this major military exercise that is coming much earlier in the year than it's normally anticipated, normally expected November time.

It's being organized by Iran's Islamic Revolutionary Guard Corps. The commander of that corps just in the past week or so and a month prior has said, has gone on the record and said very clearly if Iran cannot export its oil products from the region through the Straits of Hormuz, then no one will be able to do.

[05:10:05] That's been echoed by the president of Iran, it's been echoed by the supreme leader of Iran. Right now there is no official comment from the Iranians about this major military exercise and that raises concern. Are they putting meat on the bones of that rhetoric that we've been hearing recently. Answering President Trump in a way that President Trump has warned them of serious consequences if they follow through.

In the region here, we're not hearing anything from regional players here. But for example, here in the United Arab Emirates on the Gulf of Oman, they built a pipeline over the past couple of decades that bypasses the Strait of Hormuz for precisely that region, because of concern that it could get shutdown by violent military action. So right now here everyone watching very closely what the Iranians are doing. I'm not clear what their intent is at all -- Kaylee.

HARTUNG: Yes. Is there any bite behind that bark. Nic Robertson, thank you so much.

BRIGGS: OK. It turns out Tennessee could play a key role in determining which party controls the U.S. Senate in the fall. Former Tennessee governor, Phil Bredesen, a moderate Democrat, and conservative Republican congresswoman, Marsha Blackburn, won their respective Senate primaries Thursday. The two will now face off in November, a race that's expected to be one of the most hotly contested of the midterm elections. Republicans did not expect a challenge in ruby red Tennessee, but Bredesen's cross party appeal could help Democrats in the race to replace Senator Bob Corker.

You have to keep in mind President Trump won that state by 26 points. Is this shifting? We shall see. Another interesting race. But ahead, "The New York Times" standing by a new very controversial hire despite a history of tweets criticized as racist.

(COMMERCIAL BREAK)

[05:15:53] HARTUNG: The Trump administration believes the responsibility for finding parents deported after they were separated from their children should rest with immigrant advocates. Not with the federal government.

Justice Department lawyers saying the government would turn over whatever information it could on the parents departed, but say the ACLU should, quote, "use their considerable resources to establish contact." ACLU lawyers argue the Trump administration is shirking its responsibility, choosing to leave an estimated 431 separated kids whose parents have already been deported in limbo.

BRIGGS: The Trump administration headed toward a showdown with California over fuel efficiency standards for cars and trucks. The Trump plan calls for freezing emissions standards through 2026. It would also revoke California's ability to set its own tougher standards which are followed by about a dozen states. This marks a sharp reversal from the Obama administration which worked with California and the auto industry to set uniform national fuel economy standards. California already hinting it will file suit and if it wins, carmakers could face the prospect of manufacturing vehicles to meet rules that vary from state to state.

HARTUNG: Houston police back at the home of Joseph Pappas overnight responding to a call about a possible sighting. Pappas being the prime suspect in the shooting death of Dr. Mark Hausknecht, a prominent cardiologist who used to treat President George H. W. Bush. The day before the killing, authorities are now saying Pappas transferred the deed to his home to a woman who lives in Ohio. Janette Spencer tells the News Herald in Ohio Pappas claimed he had a terminal illness. The suspect has not been seen for several days. Police believe Pappas committed the murder over a 20-year-old grudge. His mother died during an operation performed by Dr. Hausknecht.

BRIGGS: "The New York Times" standing by its new hire despite rhetoric she's used on Twitter being blasted as racism. Sarah Jeong, who's Asian, has drawn scrutiny after old tweets she posted resurfaced. One of the tweets in question says she gets joy out of being cool cruel to, quote, "old white men." Another referred to "dumbass blanking white people, marking up the internet with their opinions like dog sniffing on fire hydrants." Colorful.

The "Times" ultimately backed Jeong who will join the editorial board next month. The "Times" noted some of her tweets were in response to frequent online harassment. Jeong also saying, "I engaged in what I thought of at the time as counter trolling. I deeply regret that I mimic the language of my harassers."

Coming up, it may be the dad version of mom jeans. Got visual there? Golfer Phil Mickelson busted out some mean dad moves that can only be emulated by Coy Wire. He has the "Bleacher Report" for us next. Let's me see it, Coy.

(COMMERCIAL BREAK)

[05:23:08] BRIGGS: It's not just Friday, but football is back. The NFL preseason kicking off last night with the Hall of Fame game.

HARTUNG: Coy Wire has more in this morning's "Bleacher Report." Good morning, Coy.

BRIGGS: Buddy.

COY WIRE, CNN SPORTS CORRESPONDENT: Good morning to you, Kaylee and Dave. It's been five months, 29 days, seven hours and about nine minutes since the Eagles beat the Patriots in Super Bowl LII but who's counting? A long wait to go for Baltimore took on Chicago in the Hall of Fame game in Canton last night. Hall of Famer and former Raven Ray Lewis knows it is football time. He busted out his iconic pre-game stomp or what I call Dave Briggs on a Friday. Six new Hall of Famers will be inducted this Saturday. Many shells inside the hall in Canton await them.

Baltimore fans they've awaiting some action Jackson as in Lamar Jackson, their first round draft pick and Heisman Trophy winning quarterback was so-so. Like a seamstress in his debut. Baltimore's other Heisman winner RG3, Robert Griffin III, looking impress after Jackson do the first touchdown pass a pro. Jackson and RG3 hoped to earn the starting job over Super Bowl champ Joe Black. Though the Raven hold on to beat the Bears 17-16.

This little league team from Washington, D.C. is set to make history this weekend. Manny Johnson little leaguers will be the first predominantly black team in 31 years to represent the nation's capital in the mid-Atlantic regionals. If they win, they'll head to the Little League World Series. Yesterday the kids got a pep talk and a little practice with their big league hero from the Washington Nationals, then they heard the roar of the crowd as they were honored during the pre-game ceremonies.

It's the match up many have wanted for quite some time. According to ESPN Phil Mickelson and Tiger Woods have agreed to play head-to-head for 10 million bucks. Yesterday, Mickelson said the two will square- off near the Thanksgiving holiday. And according to Forbes, Tiger is the 16th highest paid athlete in 2018, making more than $43 million. Phil ranked 22nd on that list.

[05:25:04] And if they play par on this course, think about this. It'd be about $138,000 per stroke. Wow.

Now if you want a good laugh to start off this feel-good Friday. Stop what you're doing right now and watch the best thing you'll probably see all day. Phil Mickelson dancing.

(VIDEO OF PHIL MICKELSON)

BRIGGS: That was it.

(CROSSTALK)

HARTUNG: The kick. How is that? I mean, that has to be a stunt double.

(CROSSTALK)

WIRE: You say he is not an athlete, right, Kaylee? I mean, (INAUDIBLE). Now this is more like the Dave Briggs on a Friday dance because I was at a Super Bowl party with Dave after we worked hard of course all day and he kind of moved like this. I'm not going to lie.

BRIGGS: Yes.

HARTUNG: Just going to give the stage to Dave.

BRIGGS: I got that. I got all those dad moves, Coy. That's all I got. But I can't do that kick thing, man. That'll pull a groin. I'm old.

HARTUNG: We'll leave that to Coy.

(LAUGHTER)

BRIGGS: Horse riding is not even giving a chair dance?

HARTUNG: Come on. We saw you. We saw you in the break. Yes, I mean, I move --

HARTUNG: What was this move?

WIRE: My jeans are way too tight to pull off that kick move like Phil Mickelson. You know how were those extra medium thing.

HARTUNG: But hey, still tiger who you got in that matchup for $10 million.

WIRE: It's going to be Tiger. I mean absolutely. Because he doesn't dance like that.

(CROSSTALK)

BRIGGS: That would be awesome in 2006, though. Nice moves, Coy. We appreciate that gift. WIRE: All right. Happy Friday.

BRIGGS: Of Phil Mickelson. Happy Friday.

HARTUNG: Not quite sure how you make this transition. But Russia election meddling.

BRIGGS: There is not.

BRIGGS: A hoax or an ongoing threat? The president and his top security officials, they're not on the same page. We'll have more next.

(COMMERCIAL BREAK)