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EARLY START

Rick Gates Testifies Against Former Boss Paul Manafort; Trump Urged to Stop Tweeting About Trump Tower; U.S. Reimposes Sanctions Against Iran; Ohio Special Election and Referendum on Trump; Aired 5- 5:30a ET

Aired August 7, 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] CHRISTINE ROMANS, CNN ANCHOR: Economic sanctions on Iran now back in effect as of midnight. Will the pressure on Tehran force a further split with Europe?

PHIL MATTINGLY, CNN ANCHOR: Two fast-moving fires merging into one massive inferno becoming the largest ever wildfire in California history.

ROMANS: Plus, why is Facebook reportedly asking banks for your financial information?

Good morning. And welcome to EARLY START. I'm Christine Romans.

MATTINGLY: And I'm Phil Mattingly, in for Dave Briggs. Coffee straight to the veins at this point.

ROMANS: Yes.

MATTINGLY: It's Tuesday, August 7th. It is 5:00 a.m. in the East.

Paul Manafort's right-hand man Rick Gates is back on the witness stand this morning. The former Trump campaign chairman's trial on tax and fraud charges. The stakes are high for the White House. Manafort and his deputy, together, know a great deal about what went on behind closed doors during those key months of the 2016 campaign. Yesterday, Gates admitted under a grant of immunity, he committed crimes alongside his former boss and against him as well.

CNN's Kara Scannell has more from the federal court in Alexandria, Virginia.

KARA SCANNELL, CNN CORRESPONDENT: Rick Gates, the government's star witness, took the stand in a showdown we've been waiting for. Gates testified for 45 minutes and during that time Manafort stared him down, sitting just seats away from Gates in the witness chair. Now Gates averted Manafort's gaze, addressing his answers only to the prosecutors who asked him to explain what crimes he had committed and if he committed crimes with Manafort.

Gates said that he had. He explained that he helped Manafort file false tax returns and that he also helped him set up 15 overseas accounts that were used as part of the alleged crime. And Gates also offered a surprise twist saying that he had himself defrauded Manafort, his mentor and longtime boss. That he had stolen several hundred thousand dollars from him by inflating his expense account.

Now Gates' testimony is expected to continue again on day six of the trial where prosecutors intend to question him for another three hours -- Christine, Phil.

ROMANS: All right. Kara Scannell, for us in Virginia. Thanks, Kara.

Donald Trump, Jr. is dismissing the significance of his Trump Tower meeting, and accusing the Russians of pulling a bait and switch. The president's son selecting a sympathetic environment to discuss the controversy, Laura Ingraham's radio show, Don, Jr. claiming the Russians secured the meeting by promising dirt on Hillary Clinton but only wanted to discuss adoptions once everyone was in the room.

(BEGIN VIDEO CLIP)

DONALD TRUMP JUNIOR, SON OF PRESIDENT DONALD TRUMP: In the 20-minute meeting it ended up being, you know, about essentially nothing that was relevant to any of these things. And, you know, that's all it is and that's all that they've got. You know, that's not the premise that got them in the room and then they started -- it was essentially, you know, a bait and switch to talk about that and everyone has basically said that in testimony already. I mean, so this is -- this is nothing new.

(END VIDEO CLIP)

ROMANS: The president's son said all the media scrutiny surrounding his 2016 meeting with the Russians is just an attempt to divert attention from his father's accomplishments.

MATTINGLY: This week President Trump is on what the White House calls a working vacation at his New Jersey golf club, but shadowing the president's time off, what else, the special counsel's Russia probe. He tweeted repeatedly over the weekend about the Trump Tower meeting and other aspects of Robert Mueller's investigation.

CNN has learned advisers are actually urging the president to cool it with the Trump Tower tweets since they only give oxygen to the topic.

Senior White House correspondent Jeff Zeleny has the latest.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Phil, as President Trump continues his working vacation here in New Jersey, one thing is clear. He's staying out of public view, at least so far, but it's clear what is on his mind -- at least one of the things on his mind, that Russia investigation.

We saw the tweets over the weekend when he was talking about specifically again trying to explain what happened in that Trump Tower meeting, that key meeting in June of 2016. The president, of course, saying that nothing was wrong. It was simply trying to get opposition research on Hillary Clinton. Well, of course, that is not the original explanation from a year ago.

So we know a couple of things since that tweet over the weekend. We now know as we head into this week the president's aides and lawyers are asking him not to tweet specifically about that Trump Tower meeting and this is why. It's adding more complication every time he weighs in. You know, it complicates the previous explanations for it.

We also are hearing from the president's aides that they believe in the next coming days -- at least they say -- the president's legal team will have an answer or a response at least to Bob Mueller's team. Will he sit for that interview? Under what conditions will the president sit for an interview? And that's something that they hope to have accomplished by the end of this working vacation.

He'll be meeting with CEOs on Tuesday night, tonight, for dinner at his Bedminster Golf Club, doing fundraisers here as well. But so far nothing else on the schedule. But again, it's clear this working vacation still has Russia hanging over it -- Christine and Phil.

ROMANS: All right. Jeff Zeleny, working -- working on his vacation.

Just a few hours ago, at midnight Eastern U.S. sanctions against Iran went back into effect by order of President Trump. Renewed sanctions targeting gold, steel, aluminum, and currency, it had been suspended as part of the 2015 Iran nuclear deal. But other nations that signed to that nuclear deal remain in this agreement and some have pledged to keep up trade in cooperation with Iran.

[05:05:09] So is America going at it all alone this time?

Senior international correspondent Nick Paton Walsh joins us live from London.

And Nick, we already know there is a wedge between the United States and the E.U., its largest trading partner. This is just another.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, certainly. But, I mean, obviously the size of the U.S. economy as well as the big means that many of these European allies who disagree with the Trump administration taking itself out of the nuclear agreement mean that they're also in trouble if they continue doing business with Iran. But that may impact their business with the United States.

Still, E.U. states have said they will do what they can to protect companies that, quote, "want to do legitimate business with Iran." But make most mistake, overnight, suddenly we haven't seen a stark change in how life functions in Iran. The economy there has been having serious troubles over the past months or so, even pockets of protesters as a result of the local currency sliding and other various issues.

These new sanctions will, as you said, prohibit precious metals, access to the U.S. dollar as well. But it's the ones in November coming up pretty much when Donald Trump faces midterm elections, that impact the oil sector and the banking sector. And they will really sting.

Now bear in mind, too, we've seen a flurry of diplomacy in just the last 24 hours or so. Well, Donald Trump himself said that he would be open to talks pretty much without preconditions with Iran, Iran's president Hassan Rouhani, a man known to make his choice of words very cautious and careful indeed, has said that he could have talked to Donald Trump, quote, "right now."

And did appear to suggest that he'd like to see an easing of sanctions happen before that occurred and did say that they would not want to talk to somebody who had, quote, "a knife in their arm or back." And I paraphrased there. But certainly the possibly window there of that kind of whirlwind, confused world Donald Trump diplomacy, his art of the deal may be coming into view here, perhaps the Iranians, they have seen what happened in Helsinki with Vladimir Putin and in Singapore with Kim Jong-un of North Korea, thought well, maybe there's a window here because Donald Trump in these one-on-one meetings appears to see much of the agenda to his opponent.

But remember, there are American and Iranian hardliners who don't want to see talks happen. A short window until these harsher sanctions and frankly this is the foreign policy area that the White House's hardliners like to sound toughest on. Back to you.

ROMANS: All right. Nick Paton Walsh for us this morning in London. Thanks, Nick.

MATTINGLY: Exhausted firefighters struggling to contain the 16 major wildfires now devastating the state. One has exploded over the last three days, nearly doubling in size.

The Mendocino Complex Fire is now the largest fire in the state's history. The flames have scorched nearly 284,000 acres, surpassing the Thomas Fire from last December.

Now the Mendocino Complex Fire is actually two wildfires burning around Clearlake and across several Northern California counties. As of last night, the fire was just 30 percent contained and more than 100 residences had been destroyed.

ROMANS: All right. Facebook wants your financial information. According to the "Wall Street Journal," Facebook asked several large U.S. banks -- JPMorgan Chase, Well Fargo, Citigroup -- for detailed financial information about their customers. Think account balances, credit card transactions. Facebook wanted to offer services for bank customers on its Messenger app.

Facebook told CNN it's not actively seeking bankers -- consumers' banking data, but it declined to comment if it has been talking to banks. Facebook is branching out of the new services to help keep users on its platform longer. But the issue here is privacy. Facebook faces harsh criticism over how it handles user data especially after exposing 87 million users' information without their consent.

None of the banks confirmed they were in talks with Facebook. But the banks all stressed to us the importance of privacy security for all of their customers. Still, Wall Street liked that Facebook is expanding into new services. The stock rose 4 percent. MATTINGLY: The street approves.

ROMANS: There's money in your information.

MATTINGLY: Consumers.

ROMANS: Right.

MATTINGLY: Still to come, a frightening sight from behind the wheel. More on this deadly explosion caught on video just ahead.

ROMANS: Plus, what today's high stakes special election in Ohio could tell us about the November midterms.

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[05:13:31] ROMANS: All right. Democrats and Republicans would be glued to Ohio's 12th congressional district tonight as voters head to the polls for a special election to fill a vacant House seat. The 12th District historically leans Republican. But 31-year-old Democrats Danny O'Connor surging in the polls against Republican Troy Balderson in a race that could prove to be a bellwether for a blue wave in November.

We get more from Jason Carroll in Delaware, Ohio.

JASON CARROLL, CNN NATIONAL CORRESPONDENT: Christine and Phil, it's really down to the wire at this point and Republican state senator Troy Balderson really should be writing his victory speech. But instead, he's fighting for every possible vote that he can get here in the 12th District against his opponent Danny O'Connor.

The race at this point is just too close to call which has really come to be somewhat of a surprise for some Republicans here because this is a seat that Republicans have held solidly for decades, but not this go-around. What ends up happening in this race could very well end up pivoting on independents, who they end up voting for.

We spoke to some Independents out here in the district and they tell us who they end up voting for very much may pivot on how the president -- how they feel the president has been doing while in office.

(BEGIN VIDEO CLIP)

MARA PROTICH, SUPPORTS O'CONNOR: I believe that a man's character is very important. I don't believe that our president currently has my best interest at heart. And I've watched some of the things that have happened in the past few months and it's a little scary.

CARROLL: And so you're just -- so you're defining decision wasn't about both candidates but about the president?

[05:15:05] PROTICH: More about getting Democratic back into office and really for the people.

APRIL KENNEDY, SUPPORTS BALDERSON: I think I'm probably a lot like millions of Americans where it's not necessarily that you like the candidate of choice, but it's who you dislike less. And I think that during the presidential election I believe that's how Trump ended up in office. I don't think that the whole world thought he was the perfect candidate nor has he proven to be. But I think that this race with Balderson is the same way.

(END VIDEO CLIP)

CARROLL: Of course, President Trump was here over the weekend to rally the base and try to shore up support for Balderson. It should be noticed that President Trump carried this district by some 11 points two years ago. But again, right now as voters head to the polls this morning, the race is just too close to call -- Christine, Phil.

ROMANS: All right. Jason Carroll in Ohio. Thanks, Jason.

Infowars and its founder Alex Jones removed from YouTube, Apple and Facebook. All three tech giants say the site violated their content policies against hate speech. The move shut down key distribution channels that give Jones access to millions of Internet users. The most dramatic action coming from YouTube. It removed his main channel, that channel had 2.4 million subscribers.

Now Infowars did not respond to a request for a comment. The site is notorious for its false conspiracy theories. It's claimed a whole bunch of stuff like the Sandy Hook massacre was a hoax, the parents of the Sandy Hook victims are just actors, called 9/11 an inside job, Oklahoma City an inside job, orchestrated by the government, a whole bunch of other stuff like that.

MATTINGLY: The list goes on and on.

ROMANS: Yes.

MATTINGLY: Now the Pentagon is banning deployed military personnel from using electronic devices that have geo locations. Now those include wearable fitness trackers and some smartphone apps that could disclose the user's location, possible security breach.

Now the new policy comes after it was revealed back in January a fitness tracking app that maps people's exercise routines may have inadvertently revealed the locations of security forces around the world. Defense officials say the devices themselves will not be banned. Service members will be responsible for ensuring the geo location features are disabled.

ROMANS: All right. And a deadly explosion caught on video in Italy. A man got a shot of the blast on his cell phone during his commute in Bologna. Officials say a gas tanker exploded after running into the back of another truck. Three people were killed between 60 and 70. Others were injured, some with serious burns. Now the cause of the accident is under investigation.

MATTINGLY: Just a short time ago in Cape Canaveral, a successful launch for the rockets from SpaceX. (BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Three, two, one, zero. Ignition.

(END VIDEO CLIP)

MATTINGLY: There it is. The Falcon 9 carried an Indonesian satellite into orbit and successfully returned to earth a short time later. The new Falcon 9 model is designed to be the first ever to launch and return more than twice. The satellite will help provide Internet and phone service to rural parts of Southeast Asia.

ROMANS: All right. Tennis superstar Serena Williams opening up about something few athletes ever talk about. Andy Scholes has more in this morning's "Bleacher Report." That's next.

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[05:22:42] ROMANS: All right. Serena Williams opening up about her battle with postpartum emotions saying she wants other new moms to know that these feelings are completely normal.

MATTINGLY: Andy Scholes has more on that and more in this morning's "Bleacher Report."

Hey, Andy.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Hey, good morning, guys. You know, last week, Serena suffered the worst loss of her career. And she said it's not because she was hurt or anything, she's just been in a funk because of postpartum emotion.

Now Serena had her first daughter Alexis Olympia in September and dealt with the health scare related to blood clots. The 36-year-old posting a message to Instagram detailing how talking her issues through with her family and friends have really helped her realized her feelings are completely normal.

Now Serena pulled out of a tournament this week citing personal reasons. She added in her post on Instagram, "Although I have been with her every day of her life, I'm not around as much as I would like to be. Most of new moms deal with the same thing. Whether to stay at home or working. Finding that balance with kids is a true art. You are the true heroes."

All right. Ohio State fans rallying yesterday at Ohio Stadium to show their support for their coach Urban Meyer. The Buckeyes coach is on paid administrative leave while the school looks into what Meyer knew about domestic violence allegations against one of his former coaches. Among the supporters at the rally was Stacy Elliott, the father of former Buckeyes and current Cowboys running back Ezekiel Elliott, who was suspended last season by the NFL because of domestic violence allegations.

(BEGIN VIDEO CLIP) STACY ELLIOTT, FATHER OF EZEKIEL ELLIOTT: I know Urban Meyer would never condone a woman being abused. So those who abuse women need to stop right now. Right now. But the truth of the matter based on what we all know, he handled the situation according to how his job required him to. So to hold him in this situation where he's got to deal with his emotions, not being with his boys and represent this university with the utmost integrity is wrong.

(END VIDEO CLIP)

SCHOLES: Ohio State has hired an outside law firm to look into what Meyer knew and what was done about it. The school says the investigation should be completed within two weeks.

All right. Finally LeBron James hasn't played a minute for the Lakers yet, but he is staying busy in Los Angeles. He's partnering with Showtime on a three-part docu series titled "Shut Up and Dribble."

[05:25:02] It's going to look at the changing role of athletes in the current political and cultural climate against the backdrop of the NBA. The series is set to debut in October which is the same month LeBron suits up for his new team. And the series getting its name from a FOX News host of course saying that LeBron and Kevin Durant should shut up and dribble, and not talk politics.

And, you know, guys, I talked to LeBron about that at the all-star break last year. He says he'll never do that, he will continue to speak out on social issues forever because he is trying to make a better life for the youth of the country and especially his boys and his daughter.

MATTINGLY: I believe that's his right actually.

(LAUGHTER)

ROMANS: Yes.

MATTINGLY: Andy, go figure. Andy, thank you very much. And quick piece of unsolicited advice to some of those Ohio State fans rallying outside of Ohio Stadium yesterday with your ridiculous signs, stop. I'm an Ohio State alum. You are embarrassing the university when you do that.

All right. Moving on. With his former boss looking on, the prosecution's star witness tells all of Paul Manafort's financial fraud trial. That's coming up next.

ROMANS: And Donald Trump Junior's bait and switch claims about the infamous Trump Tower meeting. More EARLY START right after this.

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