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Mendocino Fire Continues to Burn; Ohio House Race; DNC Chair on Midterms; Chris Collins Indicted; Tariff Fears in South Carolina. Aired 9:30-10a

Aired August 8, 2018 - 09:30   ET



[09:30:32] POPPY HARLOW, CNN ANCHOR: We are, of course, tracking the wildfires across California again this morning and learning that it could take until September for firefighters to contain the largest wildfire that California has ever seen. That is what officials are telling us this morning. The colossal Mendocino complex fire in northern California has burned dozens of homes to the ground. It is now scorched nearly 300,000 acres.

To get a sense of how large this is, it has grown to the size of Los Angeles. But fire crews may be finally getting some help and gaining some ground against it.

Let's go to our Dan Simon this morning, who is with me from Lakeport, California.

So a little bit of good news. A little aid for the firefighters there?

DAN SIMON, CNN CORRESPONDENT: That's right, Poppy, the fire has slowed down significantly. But you're still talking about a mind-boggling number, 450 square miles of scorched land, just like this behind me. You can see the fire just swept through this valley and then it came upon this house behind me. This is one of 75 homes destroyed. This was somebody's dream house. And the homeowners say they did everything they could to protect their home from wildfires. They cleared the area of brush. They set up this defensible barrier, if you will, with all of the rocks and the gravel. But, in their words, the fire just had another agenda. Take a look.


SIMON: I can't imagine what it's like to go through this. What's the hardest thing?

EMILY SCHEIDEMANN, LOST HOME IN MENDOCINO FIRE: I just want to go home. Yesterday when I arrived, all the stucco was just standing. Everything else had burned. But it was just the stucco up. And it was real unstable. And that was really hard to see because you could tell where the staircase and where everything was and it was like trying to picture what our home is like.

(END VIDEO CLIP) SIMON: And, of course, there are so many people throughout the state who are grappling with similar emotions. You've got 17 major wildfires, 13,000 firefighters on the lines. There are more firefighters in the state right now than at any other point in state history. And, of course, you have firefighters from overseas. Some from New Zealand and Australia.

In terms of the overall effort today, this fire continues to be fueled by dry brush and, of course, high temperatures. Hopefully they'll begin making some even more progress, Poppy. Right now we're talking about 34 percent on containment.

Back to you.

HARLOW: Gosh. Wow, she's saying, you know, that where the staircase was. That was our home. And, of course, all you want to do is go home, and they can't, and that's the reality for so many people across California.

Dan, thank you for the reporting.

Ohio's special election is still too close to call. The Republican candidate has a slight lead. Democrats not giving up the fight. Joining me next, the vice chair of the DNC to talk about this razor- thin race.


[09:37:25] ANNOUNCER: This is CNN breaking news.

HARLOW: All right, we do have some breaking news to bring you right now.

New York Congressman Chris Collins has been indicted with securities fraud, wire fraud, and making false statements. These are allegations that have just been announced by the Justice Department. We're getting our reporters up on this. We'll have more on this in just a moment.

Before that, though, back to Ohio. CNN still not calling a winner in the race for Ohio's 12th congressional district because it is that close. Look at those numbers. Republican Troy Balderson holding a slight lead over Democrat Danny O'Connor. Balderson claiming victory, O'Connor not conceding. Can Democrats pull this one off?

Vice chair of the DNC, Michael Blake, joins me now.

Nice to have you with me, assemblyman.


HARLOW: So, a lot to get to.

When you look at this race, I mean, you know, his -- the predecessor here, a Republican won by 35 point. The president won this district by 11 points. If Democrat can pull this off, it's huge for you guys. Even coming this close is huge for you guys. Republicans outspent Democrats five times. Should Democrats have spent more on this one?

BLAKE: Well, we made incredible investments and we've been very engaged and we want to thank our staff and our volunteers in the state and the DNC for this. But when we think about this race, as you just mentioned, this is a seat that the Republicans should have easily. The fact that we are having this conversation where there are thousands of ballots that are still out, Republicans should be very scared.

Seventeen seats in the Midwest are more competitive. Sixty seats across the country are more competitive. There is a reason why this kind of momentum is happening. We invested from the DNC. We're going to do mare.

HARLOW: So earlier this week I had David Urban on the show. As you know, he's a strategist for the Trump campaign.

We were talking about Ohio 12 on Monday. Here's what he told me. Let's play that.


DAVID URBAN, CNN POLITICAL COMMENTATOR: These folks are blue dog Democrats, both Danny O'Connor, as well as Conor Lamb. Both have said that they would not vote for Nancy Pelosi for speaker. They are trying to distance themselves from the Democratic Party and run as basically -- run as basically -- run as Republicans.

HARLOW: That -- that may be --


HARLOW: He's saying you guys, these guys, aren't even running as Democrats, they're running as Republicans. What do you say?

BLAKE: I laugh. You know, David giving you an urban myth. So let's talk about what we're talking through right now.

So, Democrats, we have been fighting for jobs and opportunities. Republicans have had a tax bill that has clearly been a failure. We've been fighting on Medicaid expansion. They want to take your health care away. We are fighting for the people. They are not.

And we're being very clear, when we talk about I will vote, it's a vision from the DNC of how do we get at least 30 million people to vote who haven't voted in midterm elections? We're doing this because we have an agenda to run on. That's why Danny O'Connor did so well last night.

HARLOW: I want to talk about your get-out-the-vote effort because you've been very vocal on this here in New York and nationally in this role.

[09:40:06] RNC Chairwoman Ronna McDaniel said this, and I quote, let's pull it up, just in the past few days, voters are tired of Democrats' message of resist and obstruct. And then I was looking on Twitter and you posted a video of you

talking about getting out the vote, just last week, and here's what you said about Republicans. Let's play it.


BLAKE: They are being very clear, they don't want you in the process. They don't want you involved. They don't care about your voices. You want to be engaged, vote out Republicans.


HARLOW: You want to be engaged, vote out Republicans. That was a very clear message.


HARLOW: What I didn't hear, Michael, in that message was, vote for us Democrats because here is what we stand for. Is your party missing more of that?

BLAKE: Not at all. Well, Poppy, as you know from media, we shouldn't just take 30-second clips and try to make that an overall. So when we talk about our overall messaging, we've been very clear, we are fighting for education and jobs and health care. But we also cannot ignore, what have the Republicans stood for. They're putting kids in cages. They're talking about --

HARLOW: But let me just push back, because I watched that whole clip. I mean you could have posted as long a clip as you want and, you said, you know --

BLAKE: That was -- it was 60 seconds.

HARLOW: Well, and you said, come to me, we'll talk about education. Come to me and we'll talk about criminal justice reform. But your main message there was go to the polls and vote -- to vote out Republicans. Is that a winning strategy for Democrats come November? Do you need more?

BLAKE: Well, I think, Poppy, you actually just said what I talked about in that video. So I talked about vote for education, vote for jobs and vote out Republicans.

HARLOW: You say this now. I mean --

BLAKE: Well, is one clear effort.

So let's talk through, again, last night was another indication of why we are doing so well. You look at what happened in Michigan. Michigan had women winning up and down the ballot because of a positive message we're amplifying. You look at what happened in the state of Washington, the fact that you had an incumbent Republican congressional member struggling. It's because we are talking through how Democrats are fighting for jobs, how Democrats are fighting for education, how Democrats are fighting for health care. This is why we're so excited going into the midterms.

HARLOW: So building on my question is Robby Mook, Hillary Clinton's former campaign manager, who warned, as you read I'm sure this morning in "The New York Times" in his opinion piece, you know, he warned Democrats. And it was sort of a flag of warning here. And he said, you know, Democrats need to not focus just on the president's controversies. And if they do that, they keep focusing the public eye on that and sort of the shiny object, instead of the implications of his policies. Do you think Robby Mook has a point for your party?

BLAKE: He has a point, but it's wrong. So let's be clear, you can't ignore the fact that it is inhumane, racist and discriminatory that there are kids in cages rather than schools. We cannot ignore you have a Republican Party that's been silent on that. You cannot ignore your Republican Party has been silent on misogyny. You can't ignore these things and talk about what's happening on the ground.

So Democrats are fighting for the people. We can't ignore the absurdities of what's going on in D.C. and how they actually have impact on the ground. In your previous segment, part of the conversation, you can't ignore the national conversation on the ground. So, going into November, why have we had 44 state legislative flips? Why we have tremendous success. Why do you have Doug Jones and Conor Lamb and all these different opportunities? Because we are fighting for people in a very direct way. We're not going to be silent about what Republicans are talking about why simultaneously talking about our vision. Democrats are fighting for jobs, education, and health care. Republicans are trying to take all those elements away.

HARLOW: Look, this is a fight that continues. We'll see what happens in Ohio, specifically it continues through November. Michael Blake, thank you so much, assemblyman, for joining me, vice chair of the DNC.

BLAKE: Thank you.

HARLOW: I have to jump because I've got to get back to this breaking news. I appreciate you being here.

BLAKE: Of course. Thank you.

ANNOUNCER: This is CNN breaking news.

HARLOW: All right, back to our breaking news. The Justice Department, just moments ago, announcing that Republican Congressman Chris Collins of New York has been indicted on securities fraud.

Shimon Prokupecz is with me and has the details.

This is significant. These are allegations from the Justice Department. Walk us through them.

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Yes, certainly allegations from the Justice Department, the Southern District of New York and the FBI. He was arrested, taken into custody in morning by the FBI in New York. There will be a press conference this afternoon over at the Southern District of New York. So this is related to, it appears, pharmaceuticals, drug trials. Christopher Collins, as you said, the Republican from New York, was taken into custody. He surrendered to his attorney and then he went over to the FBI.

He's charged with securities fraud, wire fraud, false statement for -- and basically this also involves his son, Cameron Collins, and another individual by the name of Steven Zarsky. So we expect to learn more at this press conference. The 30-page indictment just unsealed moments ago, so we're going through that to learn more about this. But as you said, Poppy, nonetheless significant. He's a sitting member of Congress, now in custody, under arrest and will face a judge later this afternoon on these charges.

HARLOW: OK, Shimon, I'm going to let you go through that indictment so you can bring us more of specifically what these charges are.

But, again, for our viewers, this is Republican Congressman Chris Collins of New York, who has turned himself over, he has surrendered this morning to the authorities, to the FBI, at his attorneys' office right here in Manhattan.

[09:45:08] More in a moment. Stay with me.


HARLOW: OK, back with our breaking news. I'm Poppy Harlow in New York.

And just in to us, the Justice Department has announced charges against Republican Congressman Chris Collins of New York. The congressman has been indicted, allegations here of securities fraud, wire fraud, false statements. Very significant allegations against a sitting U.S. member of Congress.

Paul Callan, a former prosecutor, back with me here.

And you were a statewide prosecutor here in New York.

I know you haven't read through the indictment yet. Shimon Prokupecz is reading through it. He just reported some of it to us. But what we know is this Representative Chris Collins. He representative the 27th district. That is western New York. These are very serious charges. He has turned himself over to the authorities. He did so at his attorney's office in Manhattan this morning.

[09:50:10] Again, the allegations, securities fraud, wire fraud, false statements. And this also involves his son, charges against his son, Cameron Collins.

PAUL CALLAN, CNN LEGAL ANALYST: Very unusual. You know, we do see politicians get indicted from time to time. There's no question about that. But a congressman, a sitting congressman, charged with insider trading and these kinds of frauds, it is very, very unusual. Extremely unusual.

HARLOW: These charges were filed with, of course, the Securities and Exchange Commission. Let me talk to you a little bit about, just reading the beginning of this indictment. So the indictment lays out the -- Shimon brought up the pharmaceutical company at question here, right, and this is about alleged insider trading. That biotech company is called Immunotherapeutics Limited. I should note that in June of 2017, Collins was on the board of this Australian biotech firm called Innate Immunotherapeutics. So you know, if you just would lay out for people what would concentrate insider trading. Again, not specific to this case, but what action would be alleged in a case like this.

CALLAN: Well, people in general think about it as, you know, you get an illegal stock tip from somebody who works for the company that the company's going to merge with somebody else or the company's going to develop a new drug, that sort of thing. And based on that tip, you go out and buy stock, which then rises in value.

HARLOW: Right.

CALLAN: That's your classic -- that is your classic insider trading charge.

HARLOW: Right.

CALLAN: Now, someone who served on the board of directors --

HARLOW: Right.

CALLAN: Of a company would have access to insider information. Now the question is, did he pass that along to somebody else and did he, in turn, profit from that or did his friend profit from that. Those are the kinds of things you'll see in any indictment of this kind.

HARLOW: Well, let me also note what this federal complaint alleges, OK. This alleges that he, Collins, learned non-public information. That's important, non-public information about clinical trials for a drug being developed by the firm. And then the question would be, did he act -- did he act on this it.

CALLAN: Did he act on it?

HARLOW: Did he act on non-public information? And that's at question here.

CALLAN: Yes, exactly. There's all -- the information is always non- public, because if it's published information, anybody who's --

HARLOW: Of course.

CALLAN: Who's researching the stock can get the information. But if he's got insider information, the law says that's illegal. And if he profits from it, that's a crime.

HARLOW: Paul Callan, stay with me.

We're going to get a quick break in as we go through more of this. Much more of our breaking news straight ahead.

(COMMERCIAL BREAK) [09:55:41] HARLOW: All right, the Trump administration has unveiled a new round of tariffs on goods from China. We are talking about $16 billion worth of Chinese imports that will be hit with a 25 percent tariff, a 25 percent tax. This will start in just a few weeks on August 23rd. And 279 products among these, including motorcycles, antennas, different chemical imports.

Element Electronics, which is a plant in South Carolina, says it will have to shutter, it will have to close its doors and lay off almost all of its employees as a direct result of the tariffs on these Chinese imports. The layoffs will start in October. We're talking about 126 workers. The company says it hopes to re-open in three to six months depending on what happens.

There could also be layoffs at a different South Carolina facility. Why? Again, because of the tariffs. That is the fear of BMW's largest plant in this country. It's in Spartanburg. Our Martin Savidge reports.


MARTIN SAVIDGE, CNN CORRESPONDENT (voice over): It may not look like it, but Spartanburg, South Carolina, is a war zone, a trade war, thanks to the president most folks here voted for.

Spartanburg is home to the largest BMW plant in the world. Last year they made more than 370,000 luxury SUVs, employing 10,000 people, pumping billions into the state's economy.

SAVIDGE (on camera): Is it safe to say how well BMW does is how well Spartanburg County does?

JESSE JONES, SPARTANBURG RESIDENT: You might -- could say that, because there's a lot of industry in Spartanburg County that are directly connected to BMW.

MARILYN SAUCEDO, SPARTANBURG NATIVE: Growth, jobs, and I know that that's brought in a lot of families into the area. It brings money into the area.

SAVIDGE (voice over): Spartanburg's also deep red, meaning in 2016 the county voted 63 percent for Donald Trump. But President Trump has threatened to place tariffs on imported BMW vehicles and parts. That could make BMW's made and sold in America a lot more expensive.

The company is already feeling the impact of Trump's trade war with China. Over 80,000 Spartanburg-made BMW SUVs are sold in China every year. Now China's striking back, placing tariffs on the American-made vehicles. It's an economic double-whammy of Trump's making, which BMW says could have negative effects on investment and employment in the United States. In other words, BMW might have to scale back production and lay off workers in Spartanburg.


SAVIDGE: David Britt is a Spartanburg County commissioner and a Trump backer.

SAVIDGE (on camera): How concerned are you now about talk of tariffs and trade war?

BRITT: I'm extremely concerned because the impact, the ripple effect is -- it goes beyond BMW and the automotive industry.

SAVIDGE (voice over): Britt is one of the few Republican politicians in the country willing to tell Trump he's wrong.

BRITT: These tariffs could put the foot on the throat of growth and stop it. We don't need that.

SAVIDGE: Other Trump supporters we talked to here say they support the president's policies, but some are concerned. None wanted to talk on camera.

And they're not the only ones reluctant to speak out. Many South Carolina companies are also concerned, but fear if they criticize the president's policies, they'll become a target of his Twitter rant, much like what happened to Harley-Davidson.

TED PITTS, PRESIDENT, SOUTH CAROLINA CHAMBER OF COMMERCE: I think the president has shown that you're better off working with this administration on issues to help them understand it and allow them to get to the right answer.

SAVIDGE: Ironically, Trump's tough talk on trade was part of his appeal to voters in South Carolina. Now there's growing concern Trump's trade war is about to backfire on them, and possibly, eventually, on him.

PITTS: I don't see this issue changing voters' minds. Now if you look down the road, and there are concerns.


HARLOW: That was our Martin Savidge reporting.

Now, despite concerns about these tariffs, BMW does tell us their plant in Spartanburg will soon be making a new car. They say they're going to need to hire about 1,000 new employees for that. Right now they are still planning on that.

ANNOUNCER: This is CNN breaking news.

HARLOW: All right, good morning, everyone. I'm Poppy Harlow in New York. Top of the hour.

We begin with our breaking news.

CNN has just learned moments ago that the Justice Department has indicted a sitting U.S. congressman. Republican Congressman Chris Collins of New York. The allegations against him, incredibly serious. The allegations, securities fraud, insider trading.

[10:00:07] Shimon Prokupecz standing by with the details.

And, Shimon, I do want to read for our viewers, as you walk -- before you walk us through the indictment, the allegation