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Trump Downplays Russia Threat After Intelligence Chiefs Send Warnings to Public; Bookkeeper Testifies Manafort was Broke in 2016, Lied to Banks for Loans. Aired 6-6:29a ET

Aired August 3, 2018 - 06:00   ET



DAN COATS, DIRECTOR OF NATIONAL INTELLIGENCE: We continue to see a campaign by Russia to try to divide the United States.

[05:59:39] DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Now, we're being hindered by the Russian hoax. It's a hoax.

REP. RUBEN GALLEGO (D), ARIZONA: You have a president that's not part of our deterrent package.

JOHN BOLTON, NATIONAL SECURITY ADVISOR: President Putin said the first issue that President Trump raised was election meddling.

UNIDENTIFIED FEMALE: Paul Manafort's bookkeeper testified by 2016 he was flat broke.

UNIDENTIFIED MALE: Manafort saw a lot of money to be gained from Donald Trump.

UNIDENTIFIED FEMALE: We'll see how he reacts when Rick Gates takes the stand. He is going to be the smoking gun.


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

ALISYN CAMEROTA, CNN ANCHOR: We have so much to talk about this morning. Welcome to our viewers in the United States and around the world. This is NEW DAY. It's Monday [SIC], August 3, 6 a.m. here in New York. John Berman is off, and David Gregory joins me here.

DAVID GREGORY, CNN ANCHOR/POLITICAL ANALYST: It's been fun all week. I mean, here, another example of the president saying one thing, his entire administration saying something else.

CAMEROTA: Yes, that is curious.


CAMEROTA: We're going to dive into why that is happening. Here's our starting line.

America's top national security officials are trying to warn the country about the information they've seen showing that current Russian efforts to interfere in this November's elections.

But for whatever reason, hours later, President Trump again slammed it all as a hoax. We don't know why exactly the president is ignoring the warnings of his intel chiefs or why he did not appear with them at this podium.

It highlights again one of the most puzzling contradictions of this presidency. Why does President Trump believe Vladimir Putin over the top United States officials who say the threat is real and that America's, quote, "democracy is in the crosshairs"?

It has been nearly three weeks since the Trump-Putin summit in Helsinki, and we still do not know what the two leaders discussed. Mr. Trump's director of national intelligence yesterday said that he still does not fully understand what happened inside that two-hour meeting, but at least we have one source, Vladimir Putin, who says that election interference was the first issue that Mr. Trump raised.

GREGORY: Meanwhile, prosecutors in the Paul Manafort trial are now laying out how his fortunes reversed, and quickly. Manafort's former bookkeeper testified that the president's former campaign chairman was in serious financial trouble in 2016. And she told jurors how Manafort and his former deputy, Rick Gates, lied about their income to banks and -- in order to get loans.

Gates could take the stand as early as today.

And Ivanka Trump breaking with her father on two big issues, calling his administration's policy of separating families at the border a low point of the presidency and saying she does not agree with him that the media is the, quote, "enemy of the people." Given her role as a senior advisor to the president, are her words enough? Does any of it matter?

Let's begin our coverage with CNN's Kaitlan Collins, live near Bedminster, New Jersey, where the president is spending some time.

Kaitlan, good morning.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: David, it was such a rare appearance yesterday. The nation's top intelligence chiefs all gathered in the briefing room. They were candid, they were blunt that, yes, the threat from Russia is real.

But there was one thing missing, the president. That briefing came amid a very awkward backdrop of a president who hasn't been nearly as forceful about election meddling as his intelligence chiefs were.


TRUMP: I had a great meeting with Putin. We discussed everything. We got along really well. Now, we're being hindered by the Russian hoax. It's a hoax. OK?

COLLINS (voice-over): President Trump downplaying the Russia threat once again, just hours after the nation's top intelligence officials briefed reporters about ongoing efforts by Russia to interfere in the upcoming midterm elections.

COATS: We continue to see a pervasive messaging -- messaging campaign by Russia to try to weaken and divide the United States.

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

CHRISTOPHER WRAY, FBI DIRECTOR: Russia attempted to interfere with the last election and continues to engage in malign influence operations to this day.

COLLINS: The show of force standing in stark contrast to the messaging from the president.

TRUMP: Russia's meddling in the 2016 election took place. Could be other people also.

COLLINS: But administration officials insist President Trump takes the issue seriously and has instructed his national security officials to confront the threat.

GEN. PAUL NAKASONE, NSA DIRECTOR: U.S. Cyber Command and the National Security Agency are tracking a wide range of foreign cyber adversaries and are prepared to conduct operations against those actors attempting to undermine our nation's midterm elections.

COLLINS: FBI Director Christopher Wray warning that the FBI has seen efforts to suppress voting and provide illegal campaign financing.

WRAY: Make no mistake: the scope of this foreign influence threat is both broad and deep.

COLLINS: Those warnings coming amid bipartisan criticism on President Trump's virtual silence on the issue.

SEN. JAMES LANKFORD (R), OKLAHOMA: He's been the only one in the government that hasn't been paying attention to this.

SEN. BEN CARDIN (D), MARYLAND: What they said was important, but the president's been missing on this.

COLLINS: Asked by a reporter how he explains the apparent disconnect between the president and his administration on display in Helsinki, the director of national intelligence admitting he's still in the dark about the Putin summit.

COATS: I'm not in a position to either understand fully or talk about what happened at Helsinki.

COLLINS: Trump's national security advisor, John Bolton, stepping in to insist that the attack on the 2016 election was discussed.

BOLTON: President Putin said the first issue that President Trump raised was election meddling.

[06:05:04] COLLINS: President Trump falsely claiming in a rally last night that Putin didn't want him to win.

TRUMP: I'll tell you what. Russia is very unhappy that Trump won, that I can tell you.

COLLINS: Despite President Putin saying the exact opposite three weeks ago.

UNIDENTIFIED MALE: President Putin, did you want President Trump to win the election?

VLADIMIR PUTIN, PRESIDENT OF RUSSIA (through translator): Yes, I did. Yes, I did.


COLLINS: Now the White House insists that briefing on election meddling was the president's idea, but it raises the question of, if it was why didn't the president himself bring it up during his rally last night? Right now it seems to be a tale of two very different White Houses -- Alison and David.

CAMEROTA: Kaitlan, thank you very much.

We have a lot to talk about. So list bring in CNN senior political analyst John Avlon; CNN legal and national security analyst Asha Rangappa; and CNN counterterrorism analyst Phil Mudd.

Phil, I want to start with you. OK, the president doesn't believe that Russia interfered and is trying to interfere. We get it. I mean, I don't know how many times we have to hear it before we just actually accept it. We get it. The president of the United States doesn't believe that Russia has done anything wrong.

OK. Let's start there. Do the intel chiefs, the FBI and the DNI need the president's help in order to stop whatever is going to happen in November and what they're seeing and trying to sound the alarm about?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Sure, they need him inside and outside.

First, if you're going to stop this, the message that Putin has gotten is, regardless of what the intel chiefs say, the guy I spoke with in Helsinki doesn't believe it.

So you saw the intel chiefs say that the operations by the Russians continue even after the Helsinki meeting. You've got to believe Putin says, "There's no cost to this."

So the president should be, obviously, participating in a message to Putin that says, "Cut it out."

But there's a more significant message here. When you think of New York, where you are, Alisyn, there's been, after 9/11, messaging by public figures, the governor, the mayor, repeatedly to the people of New York and elsewhere: See something say something. The guys on the intel side try to stop terrorism, but there's a

message to the people that can only be carried by government officials.

The parallel, the point I'm making is the president should be out there talking to people who are on Facebook and Twitter -- that's tens and tens of millions of Americans -- saying, "This is what you need to watch out for."

Let me ask you one question. Who is the spokesman to the American people about what they need to be careful -- careful about in the next election? Is that Dan Coats, the DNI? Or is that the president? It ought to be the president, but he's shirking his duties, Alisyn.

GREGORY: So let me ask a question to anybody who wants to take it. Is it possible that the president, in this meeting that we know nothing about with Putin, actually said to him, as some former administration officials I've talked to have suggested, that you've got to be tough with Putin privately, with allowing him to save face and say, "Look, knock it off or the next step is we're going to go to an unprecedented level of sanctions."

John, is it possible that he sent that message and, you know, the administration is happy to be quiet about it?

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Possible but highly unlikely, because what a normal administration would do -- and I had to use normal standards, we left normal a long time ago -- is then therefore, after the meeting say, "Look, the president, it was the first thing he raised. He was very tough." But they haven't.


AVLON: DNI Coats knows apparently about as people watching at home about what occurred at the Helsinki meeting.

GREGORY: Right. And John Bolton has to -- comes up to say, "Well, but what did Putin say, is the first thing --"


CAMEROTA: That's the point. Vladimir Putin says --

AVLON: That's the national security advisor.


We are -- we are so focused on who said what. Let's look at what has happened.

Trump tried to actually reverse Obama's sanctions and give Russia back their spy compounds when he became president. He then met with Putin by himself at the G-20 and tried to create a cyber-partnership with the person who attacked us.

AVLON: Right.

RANGAPPA: OK? He then slow-rolled sanctions, because he said, "Well, it's just going to be a deterrent that we have them." Obviously, it hasn't.

And so -

CAMEROTA: He also invited Putin to the White House.

RANGAPPA: So it's not just, as Phil said, sending the message that it's OK. He has tried to enable him to continue interference.

GREGORY: We have -- we have the specter of the administration doing one things, all the levels of government working toward, you know, monitoring and seeking to stop more election interference and the president saying something completely different. It's as if all of those officials are saying, "Don't really listen to what the president says. Here's what we're doing."

AVLON: Yes, and look, I do think the administration is trying to offer a united front in yesterday's meeting. It is of credit for forcefully coming out. And hopefully, there's a plan.

What there isn't is one spokesperson, to Phil Mudd's point. The president is typically the person raising the alarm, using that bully pulpit to focus the administration's efforts.

Instead, what you see is a continuation of this "contain the president" strategy within the administration. "He's going to go rogue; we're going to try to be responsible."


CAMEROTA: But still, on the flip side, when you say that the president, you know, could have said to Vladimir Putin, "Cut it out," that would have been a good idea, that's what President Obama did. It didn't stop him. You know, obviously, Putin is still doing everything that our intel chiefs say he's doing. So the "cut it out" message, I'm not sure how effective that would be, even if Donald Trump delivered it to Putin.

[06:10:07] MUDD: But time out, there's a couple of other follow-ons that you have to think about.

No. 1, there's already reporting this week of a bipartisan bill about tougher sanctions against the Russians. Why does the Congress have to do that without the president?

If Putin says, as we've seen from the FBI director and others, "I don't care what you said in Helsinki, I'm going to keep operating," the president ought to be leading the effort to say there are implications of that.

Second and final, Alisyn, if the president does that, we should do this, as we've since World War II, unified with allies who have also been the subject of Russian attacks. That is people like the British and other Europeans.

Instead, what has the president done? He's invited Putin to the White House. And he told the Europeans, "Heck with you. You should be paying more for defense." So how do we lead them in a coalition to confront Putin? We can't, because they're not going to pay attention.


CAMEROTA: Let's just remind everybody how -- who the president thinks the culprit is for the interference in U.S. elections, who he blames, who he thinks has been foolish. This is what he said when he -- on the world stage, when he stood next to Vladimir Putin. It was a different message than people expected.


TRUMP: I hold both countries responsible. I think that the United States has been foolish. I think we've all been foolish.


CAMEROTA: Asha, that's how he really feels. And that got so many, obviously, Republicans, even his champions, even FOX News, people who had been his cheerleaders, they were like, "I'm sorry, what"?

AVLON: "What now?"

CAMEROTA: And that's how he really feels. That was unscripted.

RANGAPPA: Let me just break this down, OK? He's got one job as a president of the United States under Article II of the Constitution. He is the commander in chief, and it is to protect this country against attack from foreign adversaries. That's it. OK? Like, the framers didn't give that job to anybody else, and he is not doing it. He is violating his oath every single day, and everyone else is left to pick up the pieces, whether it's Congress, whether it's intel chiefs, and try to cobble together a job that he is not doing.

If this were the real world, and you weren't doing your job, you'd get fired.

GREGORY: The question, though, Phil, is is it totally fair to say that the administration is not doing what it needs to do to prevent the kind of interference we saw in 2016 or worse? When you have money that's been appropriated to shore up local voting systems and protect technology and protect infrastructure.

You just have a president who, unbelievably, on a near daily basis, is dismissing it in his public comments?

MUDD: Sure, but there's a different aspect of this. I mentioned the messaging piece that we haven't seen. Let's take -- let's take you inside the White House, where I served for the National Security Council.

What the president should be doing is to ensure there's coordination and pressure across the government on things like what plan do we have from the National Security Agency and the CIA to conduct our own operations in Russia? That requires presidential authorization. And if you're going to do that, somebody -- in this case, it has to be the White House -- has to tell the State Department, "Hey, we're going to do this on the intel side. Make sure you're coordinated on the diplomatic side."

Tell me how many meetings the president has chaired to do that. Let me give you a guess. It's about zero, the same number of times I've started NFL games as a quarterback. He didn't do it.

AVLON: But there's a downstream effect to the president's denial, as well. Because this week, the Senate was given an option, a package, $250 million to shore up election security, and they voted it down, largely along partisan lines with the exception of Bob Corker.

So the problem is, is that a lot of folks on a local level and even Republicans, are afraid to really raise the issue. And some say, "Look, the president says it's a hoax. Why should we care?" Because there is a clear and present danger here.

The director of homeland security said our democracy is in the crosshairs. But the president's in denial, and the Senate is not -- and the Congress is not actually stepping up to fund this, which is outrageous and unconscionable.

CAMEROTA: All right. We have lawmakers on. That's the good news.

AVLON: Good.

CAMEROTA: So we will be able to pose these questions directly to them.

GREGORY: All right. Thank you all very much.

President Trump's former campaign chair's trial takes a turn. How prosecutors showed Manafort's journey from riding high to going broke. Coming up next.


[06:17:49] CAMEROTA: OK, an update on the Manafort trial now. Paul Manafort's longtime deputy, Rick Gates, may take the stand as early as today. That would be interesting.

This comes after the bookkeeper for Manafort reveals that, he says, Manafort was broke in 2016 when he was President Trump's campaign chairman and lied to banks to get loans.

CNN's Joe Johns is live outside of the courthouse in Alexandria, Virginia, with more.

What else have we learned, Joe?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Alisyn. The prosecution filling in a few more of the missing pieces of the Paul Manafort financial time line, showing how he went from the boom years when he was flush with millions of dollars of cash from his overseas accounts, to around 2016 when he was flat broke.

2016, by the way, the year he took over as the campaign chairman for the Trump campaign.

So broke, in fact, that he was submitting doctored financial statements in order to get loans, which goes to the bank fraud element of this case.

Of course, the bookkeeper was also portraying him as a hands-on manager of his own money, someone who approved every penny, every penny of his own expenses, which also goes to the intent element that the prosecution is trying to put before the jury. That's important.

Also, because Rick Gates, the longtime deputy of Paul Manafort, could take the stand, as you said, as early as today. He could face a very tough cross-examination in this case. The defense has indicated they want to show him as the person who was behind the scenes pulling the strings that lead to this criminal case against Paul Manafort.

One big question right now is whether Manafort himself will take the stand. The judge, T.S. Ellis, has said that he is more likely to allow into evidence testimony suggesting that Mr. Manafort was the very guy who never got, even once, an audit from the Internal Revenue Service. That's something the prosecution would like to keep out.

GREGORY: Thank you. Joe Johns in Alexandria, this morning at the Manafort trial. Joe, thanks so much.

[06:2:03] So let's bring back with us John Avlon and Phil Mudd and bring in CNN legal analyst Laura Coates.

Laura, good morning. Let's start with you. So where are we now in terms of the -- the foundation that they're laying to really get at the tax evasion and other federal crimes?

Falsifying an application to get a loan is a crime.


JOHNS: So that's a significant piece they're laying out.

COATES: So we have the appetizer in terms of the type of clothing and the fashion choices. All the things that was going to make everyone say, "This is crazy. This is somebody who was engaged in lavish spending and never thought the well was going to run dry or pay Uncle Sam."

But that insinuation has now turned to that substantive part of the evidentiary case. Why is it that this person is here today? Nit's not because he's rich. It's not because he may have poor fashion taste. It's because he did not pay Uncle Sam.

And so now they're getting into the idea of laying the foundation of how does somebody have all of this wealth all of a sudden lead himself to getting a bank fraud and trying to have falsifying loans. It would not make sense if you're so wealthy that you wouldn't have a loan.

CAMEROTA: What is the answer? How is that possible?

COATES: Well, now, the answer -- I guess he -- he went broke from all of the lavish spending. Maybe he was spending or paying people on the side for other things. We haven't gotten to the crux of that matter yet.

Where we are right now is we've got documentary evidence of bank fraud, which is the least, you know, sexy discussion to have in front of a jury, but now that it's been raised as a foundation, it's starting to make sense.

GREGORY: Well, it almost doesn't matter as much why it happened, is that it happened. Right? I mean, it's a crime.

COATES: It's a crime, and of course, the idea that he was the person to finalize and have ultimate insight over everything, shows the idea that he knows if you are $3 million ahead or $1 million in the hole, it's as clear as day put up in front of that jury that distinction.

CAMEROTA: Let's get back to the sexy stuff, shall we? Let's bring in Phil Mudd for that part of it. This is the -- I mean, Laura just referred to it as the appetizer. There's the delicious start.

This is what has been laid out in terms of all of his spending, OK? Four hundred and fifty thousand dollars on landscaping over five years. I mean, that stuff is expensive, I'll grant you. I don't know how you get to that.

One of the biggest ponds in the Hamptons. Oh, yes, those are bragging rights. A flower bed in the shape of an "M." Phil, how boss a move is that, OK? Ten thousand dollars, a karaoke system. We want to party with him. Two point two million over three years on Apple TVs, networks, and other electronics.

Here's a good one, Phil. Vendors were frequently paid with wire transfers from Cyprus accounts.

AVLON: That's the best.

CAMEROTA: I love that. Phil.

MUDD: Look, that is not a boss move. That ostrich jacket I wouldn't wear on Halloween as Dracula. That thing was hideous.

CAMEROTA: Hold on. Phil -- hold on, Phil. Look at your screen. How is that not styling right there?

MUDD: It's hideous. Well, I think -- let me get back for a moment to what Laura is saying, that this really is the main course, because the documents only get you so far. They show you what happened in financial transfers, the fact that he's paying from overseas accounts for clothes suggests to me that he's trying to hide money. Why wouldn't you pay it from a U.S. account that U.S. financial auditors can look at. But I think the real question were obviously going to get out today is why did he do it? Did he have an intent to defraud? And that's where Gates comes in. He's going to be able to walk in and say, "Yes, we met repeatedly and had pointed conversations about why we're trying to hide money."

Of course, the defense is going to try to say that Manafort didn't know about this. Give me a break. A Washington insider was so stupid, he didn't know what was happening in his own company? I can't wait to hear that one, Alisyn.

GREGORY: Yes, I think that's tough. And at the same time, you know, it's interesting that, from a political point of view, if you're watching all of this, these are very specific crimes. They're not related directly to what we talked so much about in the Mueller investigation. And you know, all the talk about the ostrich jackets that you like to dwell on, and I don't think we should be prejudicing whether that's in fashion or not.

CAMEROTA: It's not prejudicing. It's just weighing in.

GREGORY: Just weighing in. But it's -- you know, it's a way for them to direct the core of what is the investigation. If you're Trump and his supporters, you say, "You know, what does this have to do with anything?"

AVLON: Yes, I mean, I think what it has to do is you are seeing ludicrous amounts of spending from shady foreign sources. I mean, you know --

GREGORY: And Russian money. But --

AVLON: Russian money via the bank of Cyprus. You're paying things through shell corporations, the bank of Cyprus, so that you can not only get python and ostrich jackets, but you know, half a million dollars in shrubbery. This is not typical spending. This is reckless.

And lying to the bank. And that's the real deal. He's the chairman of the presidential campaign, telling banks he's flush with cash when, in fact, he's dead broke. But spending at this type of rates, because he thought, apparently, the Russian money would come in forever. And it's not just about the creepiness. Although I understand you have an ostrich duster.

GREGORY: That you gave me for the holidays, as I recall.

CAMEROTA: Laura, help us understand this. Because we've been counselled that this is not about Russia. This is not about Russian interference. This is not about conspiracy. But then, as John points out, a lot of his, if you believe they were ill-gotten gains, came from Russian money.

[06:25:04] So there is a Russian nexus, but it's not the one that we think of when we think of Robert Mueller. COATES: Absolutely. And remember, this jury is not sequestered

somewhere. They haven't been held hostage for the last 18 months while this has been in the media and there's been insinuations.

And the role of the prosecutor, because they cannot say -- the judge said, "You cannot talk about Russian collusion. You can't mention Mueller and make this case all about the special counsel probe in that respect."

So they're going to plant some seeds, and enough seeds to leave a horse to water, but they can't make them drink. But they have their own minds, to talk about there is a connection.

And why would it have been that this, of all of the campaigns in the world, kind of the "Casablanca" reference, of all the campaigns in the world, there was a receptive ear to this one? Could it be a coincidence that somebody who was the head of the campaign had a cash spigot, as they talked about, or a golden goose egg from Yanukovych, who was pro-Russian and credits Vladimir Putin with saving his life? That's all out there, and it's kind of the underlying subtext of everything.

But no, they can't technically say and connect this trial is about that. But that entree, not just the food one but the actual port of entry, is what's important.

GREGORY: That is like federal court versus state court matters, because you have a judge who's going to be a lot more strict about veering off like that. There will be a very specific journey instruction.

COATES: Right. And he had been. And he has been for that reason, because remember -- this is the same judge who took the prosecutors to task months ago, and the president quoted and tweeted him and applauded him.

Because he said this -- you don't have any interest in Paul Manafort's finances. You're trying to squeeze him just so he can help with the Russia criminal collusion probe against the president and of Mueller, never say that was the case. But it was out there enough to lead, perhaps, even some jurors believe that's what this is about.


CAMEROTA: OK. So Phil, let's talk about the Mueller investigation, because one of the new developments that we've learned is that Robert Mueller is interested in calling this Russian oligarch's son, a pop star, who is the person who encouraged Don Jr. to have the meeting in Trump Tower with the Russians.

There's this interesting music video that perhaps got Robert Mueller's attention. Not sure, but it's worth watching a moment of this. There is the pop star.

AVLON: What are they referring to? CAMEROTA: What are they -- what are they trying to illustrate here? Phil Mudd, can he call -- if somebody is in Russia, how does Robert Mueller get their hands on that person to interview them?

MUDD: He doesn't. I don't think that's going to happen. If it does, I'd like to be a fly on the wall, but it's not because -- that I think the individual coming from Russia is going to say something about his own activities in terms of the Trump campaign.

I think the most interesting story here is we're presumably at the tail end of the investigation. Mueller has seen a million documents and talked to a hundred people. I think the reason that the interview would be interesting is, if this individual says something that shows a discrepancy between the Russian comments and what another witness, like Don Jr., has said, in other words, does he say, "Yes, we talked about the reason for the meeting."

And the fact that the campaign wanted dirt on Hillary, and somebody that Trump -- pardon me, the special counsel's office has said something otherwise. I think the interesting thing would be if he disagrees with what the other interviewees have said. But I don't think he's ever going to sit for an interview.

GREGORY: But it just shows you the level of focus that we know about that Mueller has on this meeting. If the candidate knew that there was an effort to work with the Russians to get dirt on Hillary Clinton.

AVLON: And remember, the e-mail that comes into Don Jr. pitching the meeting is from this guy's publicist.


AVLON: Who talks about a meeting between this pop star's father and the equivalent of the Russian attorney general, who has dirt on Hillary Clinton that can help his campaign, Trump's campaign, because they want him to win.

So I mean, this isn't just about a salacious video. This goes to the heart of some evidence that exists that is way outside the norms of American politics.

CAMEROTA: OK. Phil, Laura, John, this was more entertaining than I expected. Thank you very much.

So a woman who works inside the U.S. embassy in Moscow for more than a decade is now suspected of being a Russian spy. How investigators caught up to her and why they didn't sooner. Next.