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U.S. Congressman Charged with Insider Trading; Giuliani Says Trump Team Will Respond to Mueller Today; Gates Grilled by Manafort Defense Team; Sen. Rand Paul Delivered Letter from Trump to Putin. Aired 11-11:30a ET
Aired August 8, 2018 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[11:00:01] KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan.
We begin this hour with breaking news. A sitting U.S. congressman charged with insider trading. The FBI says New York Republican Chris Collins shared non-public information with his son about a drug company to help said son, and that son's father-in-law, and others, than avoid taking a huge stock hit of something like more than $750,000. Collins, who surrendered at his attorney's office this morning, his attorneys say he did nothing wrong and that his name will be cleared.
This 30-page indictment, all the more impactful, guys, because it is charging the first sitting member of Congress who endorsed Donald Trump's presidential bid, one of the president's chief defenders. And this all happening months before the mid-term election.
CNN's M.J. Lee joins me now with the latest.
M.J., lay it out. What's Collins charged with?
M.J. LEE, CNN REPORTER: Kate, Congressman Collins, a Republican of New York, has been arrested this morning, as you said. He was charged by the Justice Department for insider trading. These charges are related to an Australian biotech company called Innate Immunotherapeutics. Collins was on the board of the company and also a big investor in the company. Part of what he is being accused of is taking information he learned about a drug trial that the company conducted and then sharing that information so that he and others close to him, including his son, could avoid significant financial losses.
I have to point out this incredible detail from the indictment. Last June, the company's CEO e-mailed Collins to let him know that the drug trial was a failure. Where was Collins at the time he received this e-mail? He was attending the congressional picnic at the White House. The indictment goes on to say that he responded to this CEO's e-mail, then proceed to call his son multiple times so that he could tip him off about the failed drug trial.
Now if that company, Innate Immunotherapeutics sounds familiar, it's because there's been a red flag about this company before. Collins was already under investigation by the House Ethic Committee for his actions related to this company. It's also an issue that's come up around the nomination of former Health & Human Services Secretary Tom Price.
Here's, actually, Wolf Blitzer asking Collins last year if he ever encouraged Price to buy stocks in this company. Listen.
(BEGIN VIDEO CLIP)
WOLF BLITZER, CNN HOST, WOLF: Did you encourage him to buy stock in this company called Innate Immunotherapeutics?
REP. CHRIS COLLINS, (R), NEW YORK: No, absolutely not. There was nothing done that was insider trading or unethical. I've been involved with Innate Immunotherapeutics in New Zealand and Australia for almost 15 years. I am the largest shareholder. And I talk about it all the time, just like you would talk about your children. We are bringing to market at some point the only drug that could treat secondary progressive multiple sclerosis, the most debilitating disease there is with no treatment today. It is probably what I am most proud of. I talk about it at breakfast, lunch and dinner, like I do my kids and my wife. So certainly many folks I've talked about it.
(END VIDEO CLIP)
LEE: Now the U.S. attorney's office for the southern district will be holding a press conference here in New York in just about an hour to discuss these charges.
And we have heard from Collins' attorney this morning. Here's that statement. It says, "We will answer the charges filed against Congressman Collins in court and will mount a vigorous defense to clear his good name. It is notable that even the government does not allege that Congressman Collins traded a single share of Innate Therapeutic stock. We are confident that he will completely be vindicated and exonerated."
Kae, the stunning news this morning, the arrest of New York Congressman Chris Collins for charges of insider trading.
BOLDUAN: It is fascinating. And a lot more to come, to say the least.
M.J., thanks for laying it out.
Let's start with the legal side. Joining me now, CNN legal analyst, Michael Zeldin.
Michael, how much trouble is Collins facing?
MICHAEL ZELDIN, CNN LEGAL ANALYST: A lot of years in prison if convicted. This is a very serious allegation. He misunderstands, I think, that his failure to directly sell his own shares is not what's at issue. What's at issue is his provision of non-public information to his son and another so that they could cut their losses in their sales. That violates the mail-fraud statutes, securities fraud statutes, and conspiracy statutes. And there's not really much of a defense if, in fact, the facts in the allegation are true.
BOLDUAN: Michael, this is SDNY indicting a sitting member of Congress months before an election. We know prosecutors are confident but, I mean, how air-tight does this case need to be?
ZELDIN: Well, two things. First, is we know from the -- from that which happened during the last 2016 election that you're not supposed to bring indictments against congressman and other political people within 60 days. So they just sort of snuck under the 60-day donor election statute.
BOLDUAN: Just. Yes
ZELDIN: But the fact is that, you treat public corruption in the same way you treat other crimes. When you have evidence of it, you indict as long as it is not within that 60-day period. Like all cases, you want to make sure that you have evidence sufficient to prove in court your allegations. And they have a pretty air tight indictment here, it seems to me.
[11:05:19] BOLDUAN: Chris Collins deserves his day in court as well. His attorneys will be speaking out. They say his name will be cleared.
BOLDUAN: Interesting to see what happens at this press conference coming up in just a little bit.
Michael, thank you so much. Really appreciate it.
ZELDIN: Sure, Kat3e.
That's the legal side of it. Much more to come on that, believe me.
But let's talk about the political side of it and fallout on Capitol Hill. Here with me now, CNN politics reporter and editor-at-large, Chris Cillizza, and CNN congressional correspondent, Phil Mattingly.
Phil, M.J. laid this out. Collins has been under investigation on the Hill with regard to this company, this is separate from any insider trading question, for a while.
PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: What we heard from the congressman to Wolf Blitzer is a perfect summation of his views on this company and what we've seen from him on Capitol Hill for years. It's almost borderline legend. He would talk to his colleagues about this on the House floor. He would be pitching his colleagues about this in the House speaker's lobby. He cared and believed deeply about this stock. Here's the issue with that. He was the only member -- he had stepped down in, I believe, April.
MATTINGLY; He was the only member of Congress who is a sitting member of a company board. He was on the committee that oversees what this company does. There were allegations, which he long denied, that he had been involved in trying to write pieces of legislation to aid this company. There were also, during the Office of Congressional Ethics investigation, clear e-mails and evidence that he was meeting with officials from the National Institutes of Health to essentially talk about this company, as well. You talk about kind of the long run of people wondering and thinking this doesn't necessarily look right.
Now again, he was never trying to hide his association with the company. He was very, very open about it. But I think a lot of members, some of his Republican colleagues, would kind of sit there and be like, what, this seems strange and somewhat uncomfortable.
BOLDUAN: It seems wild that any sitting member of Congress is on the board of anything --
BOLDUAN: -- a drug company or anything else, especially that they would have oversight of the industry. Do they have --
MATTINGLY: When you're on a relevant committee is one of the key issues.
MATTINGLY: The congressional process is obviously on a very different track from the Justice Department federal process. It went from the Office of Congressional Ethics, which referred it to the House Ethics Committee, which is the entity that has the power to actually do something to a member of Congress.
It's worth noting, House Ethics Committee, when the Justice Department is working on something, tends to pull off. So they haven't finish3ed their investigation --
MATTINGLY: -- will end up.. Odds are, once they realized the Justice Department was involved in this, they held off and let the DOJ take the lead.
CHRIS CILLIZZA, CNN POLITICS REPORTER & CNN EDITOR-AT-LARGE: This is the sort of stuff that, if you don't follow this day in and day out, like the three of us do, and even if you do, the idea you could be on a board, and as he proudly touts, be the biggest shareholder in a company, that you are on the committee that has some level of jurisdiction over, smells fishy. That doesn't mean it was illegal on its face. But smells fishy.
If you are Chris Collins, or if you are Republicans, generally, this is a district -- just from the politics of it --
BOLDUAN: Isn't it like the reddest district, New York?
CILLIZZA: Chris Collins was one of Donald Trump's earliest supporters.
CILLIZZA: This is a district that is -
CILLIZZA: Everything East of Buffalo proper is in this district. Donald Trump won it 60 percent-35 percent effectively. Chris Collins was with Donald Trump because I think he recognized in Donald Trump a message that had real power in his community.
That said, this is a district that -- it's been redistricted a little bit, but this is a district that a Democrat has held. Brian Higgins held it for four terms prior to the redistricting. It was made more Republican. If Collins stays on and continues under indictment, that's an all-bets-are-off type situation. Doesn't mean is he going to lose. But when you are a sitting member of Congress --
BOLDUAN: There are lots of examples of people who are charged and --
CILLIZZA: And win.
BOLDUAN: -- and who win.
CILLIZZA: But there are some who lose. This will take that district and make it more competitive. It is worth noting, though it has nothing to do with these charges. If you were -- Phil will correct me if I'm wrong -- if you were to name who was the sort of most out-front pro-Trump member of Congress, Chris Collins would be in that conversation.
CILLIZZA: Again, that doesn't have to do with these charges but he is someone very closely aligned with Trump and that Trump movement.
BOLDUAN: What is Paul Ryan thinking at this moment?
MATTINGLY: If you find out, I would love to know.
MATTINGLY: Here's the interesting thing. Chris knows this well. When you head into the lead-up to an election, stories like this, whether or not he ends up pleading guilty, whether or not he ends up being guilty, whether he is vindicated
(CROSSTALK) BOLDUAN: Right.
MATTINGLY: -- they start to set into a narrative. What I've heard already from a number of Democrats, who are seizing on this, not because they care about Chris Collins and not even because they think they can win or flip Chris Collins' district, but this becomes a data point. That they talk about the people that are in power are corrupt. The people that are in power are part of the swamp. People that are in power are just rife with conflicts.
[11:10:17] BOLDUAN: Let's be honest --
BOLDUAN: If what's in the indictment is true, it is a pretty textbook case of securities fraud.
MATTINGLY: Here's the interesting element of that. You can actually pick out from his lawyer's statement what they're going for right now. Securities fraud and, frankly, insider trading is rife with grey area. We've seen security fraud indictments and convictions overturned in recent years when it comes it certain hedge funds, things of that nature. You can tell what his attorneys are clearly keying on right now --
MATTINGLY: -- is that he did not make any trades. It is worth noting that when this trial failed, when it became public that it failed, Chris Collins got crushed. There were headlines, as the biggest shareholder in this company --
BOLDUAN: And the indictment says that the stock price plummeted 90 percent.
MATTINGLY: Yes, 90-odd percent. He lost millions of dollars, is my understanding.
MATTINGLY: I remember when it happened, talking to him shortly thereafter, and he was like, yes, this wasn't a good thing. I think they're clearly going to defend him robustly and that's clearly the area they are going on. But it is a damning indictment, which is why they brought it, to be honest.
BOLDUAN: Why they brought it and -
CILLIZZA: It's worth noting, there's a -- Michael Zeldin touched on this. There's a political and there's a legal course these things will travel. The political course -- remember back to Ted Stevens. He was indicted, Alaska Senator, indicted. He wound up losing that election. Then it comes out later that, well, he's actually been cleared of the charges. So the legal process and the political process do not always line up. The political process can hurt you even when the legal process remains in progress.
BOLDUAN: I will also say about Stevens, a very different political climate then at that moment in time.
Great to see you guys. Thanks so much. We'll follow this. Let's see what else comes because that press conference will come up right about noon.
Also breaking this morning, the president's lawyer, Rudy Giuliani, telling CNN that Trump's legal team plans to issue their response today about a possible sit-down with Robert Mueller. This cat-and- mouse game, you just can't get enough of it. What questions will they answer? What answer will they not? Will we find out? We'll see.
Plus, former Manafort associate, Rick Gates, getting grilled in court again today after admitting to lying, stealing and cheating, even on his wife. Has Gates lost his credibility? Who had a good day in court yesterday? Who's having a good day today? We'll find out.
[11:16:52] BOLDUAN: More breaking news this morning. CNN learning that President Trump's legal team, led by Rudy Giuliani, plans to respond today to Special Counsel Robert Mueller about the cat-and- mouse game that has become the possibility of the president sitting down for an interview with the special counsel. Mueller had offered the president an interview that included questions about possible obstruction of justice. Rudy Giuliani made clear in an interview with the "Washington Post" that he was not comfortable with that. But, of course, every day is a new day. So what could they be countering with now?
Let's go to CNN's Shimon Prokupecz with much more on this.
Shimon, what is Giuliani saying? Is he offering up any detail of what's going to be in this letter to Mueller?
SHIMON PROKUPECZ, CNN CRIME & JUSTICE REPORTER: No, he's not offering up any details. The fact that the negotiations are still ongoing, no one has sort of set any limits right now or has closed off the options here. It is essentially a counter offer to the counter offer to the counter offer. Right? As you said, we keep playing this cat-and- mouse game. The ultimate question is going to be, what is the president going to do. Is he finally going to sit down with the special counsel? I think it's been very clear, and Rudy Giuliani reiterated this, this morning, to our Dana Bash, that they want to limit the obstruction questions, the questions about the firing of the FBI director, the former FBI director, James Comey, the questions surrounding whether or not he tried to influence the FBI investigation to his former national security advisor, Michael Flynn. This seems to be the key issue for the president and his attorneys. They are trying to limit the special counsel, Robert Mueller, the FBI, in asking any questions surrounding that. Obviously the question of, what will the president finally do, we don't know. I guess we will wait to see what the special counsel -- how the special counsel responds to the attorneys. But essentially, all of this is still a back-and-forth, and as you said, a cat-and-mouse game, and it continues.
BOLDUAN: And just continues. Not the end of this.
Great to see you, Shimon.
I want to dig in more on what Shimon was talking about right there with CNN legal analyst and former federal prosecutor, Shan Wu.
Shan, Giuliani says the president may be open to agreeing to answer questions on obstruction of justice, even though he wasn't comfortable with that idea a couple days ago. As long as the questions aren't -- this is what he told Dana Bash -- aren't, quote, unquote, "perjury traps." What does that mean to you?
SHAN WU, CNN LEGAL ANALYST: That's a good question that could mean different things to different lawyers. A perjury trap is this notion of, if you, as the prosecutor, already know that the person you're questioning has given an answer, or you have information that has them locked in, and you also have a pretty strong idea they're going to lie about that, that's the perjury trap. It is not a perjury trap to have an investigation and ask questions you don't know the answers to. That's not a perjury trap. That's Giuliani saying that he's worried about his client who likes to speak off the cuff, go off subject and lie, where he'll talk himself into a perjury trap. But that's not really a perjury trap. A perjury trap is you already have the info, you know the person's going to lie, and you already know how to close that trap on them.
[11:20:08] BOLDUAN: I'm so confused. But you did such a good job on that one.
But on the most basic level, would Robert Mueller agree to something like this? I just don't see -- I don't see a universe where you say, OK, no perjury traps, let's sit down now.
WU: Yes, because no self-respecting prosecutor is going to agree that they are setting a perjury trap.
BOLDUAN: That's exactly the point.
WU: They'll say we want the truth, we want to ask you questions. Of course, there's no perjury trap, just have your client tell the truth. That's just spin on Giuliani's part. They could negotiate parameters of these events or timeline are off-limits. But the general concept of a perjury trap is quite meaningless, frankly. BOLDUAN: Shan, with this moment, the back and forth, this is what
Giuliani's going back with, do you think they are any closer or any further away from the president actually making a decision or being questioned by Robert Mueller's team?
WU: The only thing they are closer to is Giuliani's plan to drag things out closer to the mid-term elections, if that's what they go back with?
BOLDUAN: Well. Stand by to stand by.
Shan, actually stand by. More coming in on a very different yet related topic. Stick with me.
Rick Gates's just finished testifying in the first trial to come from Robert Mueller investigation. The star witness in the fraud trial of President Trump's former campaign chairman, the star witness admitted to lying, cheating and stealing in a brutal cross examination.
CNN's Joe Johns is outside the courthouse of Paul Manafort's trial with the very latest.
Joe, what is the very latest?
JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, as you said, it was testimony that spanned over three days of brutal cross examination. And the final questions for Rick Gates, from both the prosecution and the defense, really sort of went to his credibility and truthfulness. Both sides asking questions about that. Probably the most interesting question that came out of it, as we know, Gates testified yesterday that he'd had an affair, and that sort of played in to how he used money that came out of lying and cheating. Well, today the defense counsel, Kevin Downing, asked Gates whether he had four -- four -- extramarital affairs in the re-cross. And before he got a chance to answer, the judge brought everyone to the bench and they had a discussion about it. Downing made the point that he was asking that question because he wanted to know whether Gates had lied to the special counsel's office. If he had lied, that could at least potentially invalidate the plea agreement he has to testify. So the judge did not allow that question in. And when it was re-asked, it was re-asked in terms of, have you had a long -- I should just read this to you quickly before we go.
JOHNS: "Does your secret life span over many years?" And Gates said, "Yes, I've made many mistakes over many years."
That question did not get answered about the four extramarital affairs -- Kate?
BOLDUAN: This thing got nasty really, really fast.
All right, Joe, thank you so much.
This thing is moving at breakneck speed. Let me bring back Shan Wu for more on this, who, for a brief period of
time, represented the star witness, Rick Gates.
Shan, does it surprise you how things went down with this cross examination of Gates?
WU: Not really. As usual, I'm not speaking from any confidences or privilege material. Just as a spectator watching this. One would expect that Kevin Downing would bear down as hard as he did. That's a classic way to cross examine a cooperating witness. I think the big strategy question is, should the prosecution have tried to take the sting out of the affair by bringing it up ahead of time the way they did by having Rick disclose his trying to steal or -- his actual stealing from Manafort.
WU: By not doing that, it gives the defense a little bit of an "I gotcha" moment, which they really followed up on. From their point of view, getting to ask that question does a lot of damage even without the answer to it.
BOLDUAN: That's what I was going to ask, Shan. Even if they threw it out there and then they were pulled to the bench and weren't able to get the answer, it is still out there. Right?
WU: Yes, it's still out there. The questions themselves are not evidence, but for the effect on the jury, that's already out there. And it will be interesting to look at the transcript and see whether the prosecution tries to object, or whether Judge Ellis, as he has been prone to do, was taking care to make sure that he kept things on the straight and narrow and they didn't go too far afield.
BOLDUAN: Judge Ellis is very interesting to watch throughout this and listen to throughout this trial. Let's talk about him maybe tomorrow.
Shan, thank you so much.
A lot of breaking news coming in this morning, including this. We have some more breaking news. Senator Rand Paul announcing that he had personally delivered a letter from President Trump to Russian President Vladimir Putin during Paul's visit to Moscow.
CNN's Manu Raju is in Washington with much more.
Man, what can you tell us about this letter?
[11:25:22] MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes. This actually came about after multiple discussions between President Trump and Rand Paul. I have been told by a source familiar with the matter, Kate, that Paul and Trump had discussed this matter for some time about these meetings that Rand Paul was planning to have in Moscow. Now Paul, as a member of the Senate Foreign Relations Committee, had
planned to travel to Russia, meet with senior Russian officials, even before that Helsinki summit. But in the run-up to this meeting with Russian officials that Rand Paul had over the last several days, he did speak with President Trump, I am told, several times, both on the phone and in the Oval Office. After they had met, Rand Paul was given a letter from President Trump, a handwritten letter, to deliver to Putin, to deliver to the Russians, which Rand Paul just announced on Twitter that he did today.
Rand Paul saying this in his tweet, that, "The letter emphasized the importance of further engagement in various areas, including countering terrorism, enhancing legislative dialogue, and resuming cultural exchanges."
But a remarkable development given that a lot of folks aren't aware exactly what happened in that first summit. Here's Rand Paul, a Senator, not a member of the president's administration, carrying out this diplomacy, apparently, of what happened in the first summit and trying to extend this to future talks between President Trump and President Putin -- Kate?
Manu, thanks so much. We appreciate you bringing that to us.
Coming up for us still, the race that is telling us a whole lot about how voters feel about President Trump and the mid-term elections. Both sides in Ohio claiming a victory of sorts this morning as the special election there is still too close to call. What it could all mean? We'll talk about it.