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Report: GOP's Collins Is Being Arraigned on Insider Trading Charges; Trump Lawyers Send Counteroffer to Mueller on Interview; Giuliani Wants Investigation Over by September; Trump Claims Ohio Victory but Race Is Too Close to Call. Aired 2-2:30p ET

Aired August 8, 2018 - 14:00   ET


[14:00:00] BROOKE BALDWIN, CNN HOST: We'll get all into that in a second here. The first congressman to endorse his run for president has just been accused of not only lying to the feds but insider trading. Republican, Chris Collins, of New York, turned himself in this morning. He's set to be arraigned this hour. Federal prosecutors say Collins took advantage of his seat on the board of an Australian pharmaceutical company. Let's go back to June, last year, the congressman was at the White House for a congressional picnic. Follow the circle here in this video. There he is. That is when prosecutors say he received a phone call from the firm that a clinical trial failed involving this one particular drug. What does he do from the White House? Picks up the phone and calls his son, Cameron.


GEOFFREY BERMAN, U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: He then tried to reach his son, six attempts in five minutes. And then on the seventh attempt he got through to his son and he is alleged in the indictment that he illegally relayed the results of that drug test so that his son could trade on that information.


BALDWIN: So, his son, Cameron Collins, has also been indicted along with the father of his fiance. The two men made more calls and in the end, prosecutors alleged the insider saved themselves more than $700,000 from this tip received by the congressman. And what happened to investigators not in the know, the indictment says when the company announced its clinical trial was a bust, the stocks went from 46 cents a share to a mere 4 cents. A whopping 92 percent drop.

Let's talk this over with CNN national political reporter MJ Lee, Vermont Law school professor, Jennifer Taub, white-collar crime expert, Elie Honig, a former federal prosecutor for the southern District of New York which just filed these charges against Collins. And former federal prosecutor, Joel Moreno.

So, let's start with Mr. SDNY. They have a lot on their hands at the moment. The fact that all their information, the presentation from the U.S. attorney there almost like the family tree. It seemed to me that with the electronic documents this is a classic insider trading case just follow the money. ELIE HONIG, A FORMER FEDERAL PROSECUTOR FOR THE SOUTHERN DISTRICT OF

NEW YORK: Yes, it really is, Brooke. There's not a lot of good news from representative Collins. First of all, even though he's from up state and represents up state, he got charged in the southern district. This is in their wheelhouse insider trading dating back to Michael Milliken the 1980s. That's bad news. He's looking at real time. You know, we did a case a few years ago when I was there, I didn't do it but my colleagues did against a billionaire hedge fund who was sentenced to 11 years in prison. He's looking at serious time behind bars. I was speaking with professor beforehand and we agree even though he didn't make stock transactions himself, he's liable as a tipper, someone passed insider information down the line. I don't see anywhere for him to cooperate. There's not a lot of good news for the representative.

BALDWIN: Speaking out the professor, let me ask you. We see the video of him. He's at the White House for a picnic. Gets this phone call from this pharmaceutical company saying, the drug is a bust. And so, he picks up his phone and calls his son seven times. Cell phone records. And tips him off to sell. He had to have known better.

JENNIFER TAUB, PROFESSOR, VERMONT LAW SCHOOL: Yes. I mean, he seems -- it seems clear that he knew better. One of the elements in proving an insider trading case is the criminal intent that he willfully and knowingly committed this crime. And not only should he have known better based on his -- the fact that he is a member of Congress, but we can see that almost a year later, when he was asked by the FBI if he had told his son, Cameron, about this bad report that the key drug, the whole pharmaceutical company was basing its profits on was a no- go, he claimed he didn't tell his son that, but by that time they clearly knew. Not only should he have known better, the fact that he lied to the FBI later helps build the case that he did so -- that he tipped his son knowingly and willfully. Taken together, I agree, there's no place for him to go. He'll serve real time.

BALDWIN: Interesting side note for you, MJ, this was last year but involved this pharmaceutical company CEO on an e-mail where he, he being the congressman, accidentally hit reply all and you ended up on this e-mail.


BALDWIN: What's the e-mail?

LEE: Well, when this news broke this morning, I had to go back to my inbox and look for that e-mail and the story I wrote at the time when I was covering health care, this was January of last year, I had e- mailed the CEO of this company to ask about a report about Tom Price, back then the HHS nominee, but hadn't been confirmed yet obviously, about him having gotten special price on stock shares for this company.

[14:05:00] So I'm corresponding with the CEO and he responds and defends Tom Price and says nothing wrong happened. And then suddenly I get an e-mail from Congressman Collins. That e-mail was clearly addressed to the CEO. I wasn't supposed to be on that e-mail. So, I wrote back to him and said, congressman, was I BCCed on that prior e- mail? He said, yes, I accidentally replied all. Now all of that goes to show and looking back it's all the more interesting. They have that kind of relationship where they clearly were in communication and Collins even back then was defensive of that company.

BALDWIN: Wow. So, Joe, you have congressman Collins, his son and the son's -- stay with me, the son's fiance's dad are the ones facing the charges now. But when you read through this indictment, there's a lot of references to conspirators not named as defendants. How do prosecutors determine who gets charged, and would this mean that potentially family members could flip on family members?

JOE MORENO, FORMER FEDERAL PROSECUTOR: It could, which of course is the ultimate act of betrayal. We've seen lawyers turning on clients. Family members turning on family members that's heart wrenching. You don't really know. We can make some educated guesses as to who these unindicted co-conspirators are. A lot more will come out about this, but there's going to be some really tough -- there's not a lot of good paths for the congressman. What's so swampy about this, insider trading is bad enough. When you have a member of congress -- we've seen congress members with sweetheart stock deals and sweetheart real estate deals it's an area that's not well policed. It's a wakeup call.

BALDWIN: Speaking of swampy, let me for thank you for teeing up this sound bite I want to get to. On the politics side, MJ, he was one of the first members of Congress to endorse then candidate Donald Trump. And he's been on TV a whole heck of a lot supporting this president. Case in point, watch this.


REP. CHRIS COLLINS, (R), NEW YORK: Donald Trump has accomplished in this primary is unprecedented. He's spent very little money. He has rounded up the delegates that no one thought any of the original 17 would have by this point. Donald Trump is absolutely brilliant. Donald Trump is a winner. Donald Trump wants to win. The temperament and the personality of Donald Trump is exactly what America wants. The energy behind Donald Trump is like no one has ever seen.


BALDWIN: Donald Trump ran for president on draining the swamp. This alleged behavior, my word, is swamp-tastic.

LEE: That's a great word, new term. Yes. This is a president who specifically ran on and promised his supporters that he would get to Washington and change the way that things are done. When you're talking about insider trading and this idea that a member of congress got this kind of proprietary information and then used it so that his family could lose less money, that is the opposite of draining the swamp. And, you know, congressman Collins, any congressional reporter will tell you he's the guy you look for when members are coming out of meetings to try to get that, quote, defending President Trump on anything. He's been that guy from day one. He was the first member of congress to support President Trump in his candidacy. So, the fact that this person who is so closely in line with the president now being in this kind of trouble, that's not good for the president either.

BALDWIN: OK. Stand by, everyone. I've got more to discuss in just a second. Just in to CNN, counteroffer in the works. President Trump's lawyer Rudy Giuliani says they are outlining new terms for a face to face interview between the president and the special counsel Robert Mueller. What exactly did Rudy Giuliani mean this should be over by September 1st?

Also, the impact of the escalating trade war with China being felt in Trump country. One South Carolina company now saying it will be forced to lay off almost all of its workers because of this new tariff policy.

And we are keeping a close eye on Manhattan's federal court where moments from now, as we've just been discussing, sitting Congressman Chris Collins is set to be arraigned on insider trading charges. We will take you there live. You're watching CNN. I'm Brooke Baldwin.


BALDWIN: Major multiple headlines breaking this hour with all these ties to the president. Moments from now, a Trump ally and sitting Republican congressman will be arraigned for alleged insider trading as a former Trump campaign operative finishes testifying against the former Trump campaign chairman now on trial. All of this as a major development breaks in the case of the president's own legal troubles. His attorney, Rudy Giuliani says they submitted a counteroffer to the Special Counsel Robert Mueller regarding an interview with Trump.

[14:15:00] So, Giuliani told Dana Bash here at CNN that the team is open to obstruction of justice questions but he says absolutely no, his words, perjury traps. He went on to tell Dana, quote, for example, what did you say about Flynn? Why did you fire Comey? Giuliani says they already know our answer, so let's start there.

Joe, I want to start with you. So, let's analyze these questions. So, if Giuliani says these are the sorts of questions that are the no- go because he says Mueller knows the answer, what did you say about Flynn? Why did you fire Comey? Explain to me why you think they would be falling into these perjury traps with these?

MORENO: They're fraught with danger, no doubt about it. The best way Mueller can prove an obstruction case is with the president's own words. That's why it's so dangerous for the president to walk into an interview. I'm convinced it's not going to happen. A lot of this is theater. I think the president likes keeping this issue alive, like he likes keeping alive the question of whether or not he will or won't fire Mueller. At the end of the day, it's not going to happen. He will not have any kind of parameters that Mueller will agree to in any kind of mutual arrangement.

BALDWIN: If someone is telling the truth, then what is the trap? Silence among all of you. I'm just asking.

HONIG: The best way to avoid a perjury trap is not to commit perjury.

BALDWIN: Thank you.

HONIG: I agree with Joe. Mueller -- excuse me, Giuliani is insisting on these absurd conditions that no prosecutor would agree to. I agree, I think it's theater. I think ultimately, they're not going to come to an agreement. From Mueller's perspective, we can do this easy way, you can agree to reasonable terms or we can do it the hard way which is a subpoena which will kick off a long battle in the courts.

TAUB: Just to be clear, technically speaking he would not be giving this interview under oath, so it wouldn't be a perjury trap. It would be false statements. The reason why these specific questions I think he's putting off limits is because we don't know the answer. Giuliani says you know the answer, but Trump has given different answers to that very question of why he fired Comey. To say you know is not true. And I think that's the problem.

BALDWIN: Of course, there would be follow ups to questions that certainly wouldn't be yes or no answers that would get to Trump's behavior or intent, yes. All right, so, Jay Sekulow, the president's other attorney, has a radio show. Did you know this? No.

TAUB: I found out this morning.

BALDWIN: He has a radio show and on said radio show, it was Giuliani and Sekulow saying we responded to Mueller and saying the ball is in Mueller's court. Here they are.


RUDY GIULIANI, TRUMP'S PERSONAL LAWYER: It's about time that it ends. I also think and I hope the special counsel is as sensitive to it as we are, we do not want to run into the November elections. So back up from that, this should be over with by September 1st. We have now given him an answer. Obviously, he should take a few days to consider it. But we should get this resolved -- if there's going to be an interview, let's have it. If there's not going to be an interview, let him write his report. Honestly, he has all the information that he needs. The interview will provide nothing in addition to what he already has. So, he can write his report.


BALDWIN: OK. Quick easy question to the group. Show of hands, who thinks this will be over September 1st? That's what I thought. To you, is this going on this radio show, coming on TV their way of saying pre-midterms, to the American people, see, we're trying to cooperate with the Mueller team. We've given them this offer back. We're trying to work with them.

LEE: Look, I would say there isn't just tension between the Trump lawyers and Mueller and his team. There's also tension between the president and his own lawyers. And I think that's important to stress. You know, these negotiations have been going on for a number of months now. And I think that in part is because of the inherent tension between the president and what he thinks the strategy should be, which is that he had said this publicly, I should be interviewed and I would be fine if I'm interviewed. Versus the real concerns that his lawyers have made clear they have about Trump's possible and possibility of perjuring himself if he gets into that seat. Keep in mind when you go in for this interview, there are no retakes. You can't have somebody sort of clarifying in the moment what the president is actually saying.


LEE: So, the stakes obviously are very, very high.

BALDWIN: The treatment that this Trump legal team is giving bob Mueller, it's like our way or the highway.

HONIG: Yes. Bless Robert Mueller's patience, right? He's shown throughout this. I think Sekulow's quote right there sort of tips off what the PR strategy is.

BALDWIN: How so?

HONIG: Let's get this wrapped up by September 1. I'm going to insist on ridiculous conditions that Mueller will never agree to. If that leads to a court fight over executive privilege that will stretch right up to and including the midterms. And then Trump and his team will say, look, Mueller is politicizing the midterms and say we made an offer. He said no. Now we're in court battling this out with the elections around the corner. I think that may be their PR. play.

BALDWIN: Do you think they want to drag this out and have this not happen before the midterms, get the midterms over with and then have it afterwards?

HONIG: Yes. I think they may realize there's no way this is realistically going to happen unless Mueller really bends to their wishes. But their wishes are unrealistic.

BALDWIN: On the bending, what does Mueller do? How does he respond? Looking to both of you guys.

TAUB: Well, I don't think he can agree to condition that would limit the questions that he would ask the president, especially, he is going to need to ask them why did you fire James Comey? So that cannot be off the table.

BALDWIN: What does Mueller do? Play it out for me.

TAUB: So -- we don't know what the actual question was. Mueller has to ultimately if they refuse to sit down subpoena the president to appear before the grand jury and this will play out if he does this similar to what happened with Bill Clinton and Ken Starr where once that subpoena is right in front of them, then maybe they'll really negotiate in good faith. When he agrees to show up and answer questions they can withdraw the subpoena.

BALDWIN: Do you agree that Trump would be subpoenaed? MORENO: Yes, I think that's probably where this is going.

BALDWIN: You do?

MORENO: There's a strong likelihood -- we haven't tested this, whether this goes all the way and you can subpoena a sitting president, but you probably can. So, it's not going to end well. To Jennifer's point, they're looking at the Bill Clinton and Ken Starr model and playing this out just like that. Remember, I'm sure the president does not want to be in this situation, since he has to be, he looks at Bill Clinton, kind of turned out OK to him. I'm going to the air waves. I'm going to deploy Rudy, I'm going to pitch our argument in the public domain and let the chips fall where they may and I have a pretty good chance of surviving this.

BALDWIN: Just big picture, just that they're looking to the Bill Clinton model as Donald Trump given the 2016 election and who he was running against, we're in bizarro world. I appreciate that conversation.

Coming up next on CNN, the president declaring victory in Ohio even though the special election there is still too close to call. Does the cliff hanger spell trouble for Republicans ahead of the midterms?

And moments from now, Republican Congressman Chris Collins is set to be arraigned. We will take you there.


BALDWIN: Call them cliff hangers or nail biters, a couple of too close to call races from the primaries could be making Republicans nervous about the midterms. It could be a test of the president's sway with his base. So, let's look at deep red Ohio in a race the GOP spent millions to avoid an embarrassing loss. The Republican Troy Balderson has a tiny, barely visible lead of less than 1 percentage point over Democrat Danny O'Connor, just small enough margin that could trigger a recount.

Then you go over to Kansas, another red-hot state, another nail biter. This could test the president's popularity. Trump's hand-picked Chris Kobach holds a razor thin lead in the governor's primary lead -- barely behind him the Republican incumbent Governor Jeff Collier. There could be legal challenges on this one before it's all over. So, I have with me radio host Erick Erickson there in Atlanta. Nice to see you.


BALDWIN: When you look at Ohio and again highlighting this district 35 years Republican, you have this Republican candidate up by this teeny tiny percentage point, even if Balderson goes on to win, it's a bit of a hallow victory for them. And so, you tell me if what I'm about to say is total myth or real that this is just the latest signal that Republicans will lose big in November.

ERICKSON: I don't know that they will lose big because they have some institutional things in place that help them, but if you go back to 2009 and 2010, the trend lines are the same. 2009 after Barack Obama got elected, you had a series of special elections and elsewhere that went to Republicans, some of them really closely.

BALDWIN: So, reality, not myth?

ERICKSON: Not myth at all. The end of 2009, Democrats in 2009 lost the Virginia legislature and then in 2010 there was a steady stream of Republican pickups in places no one saw. We're seeing the same pattern in reverse this time which typically happens in these midterms. Here is the thing that Republicans are starting to freak out about.

If you go back to 2006, a third of the seats Republicans lost weren't on the radar as possible losses until after Labor Day. In 2010, half of Democratic seats the Democrats lost weren't on the radar until after Labor Day. We're seeing the trend lines in place. We're not yet to Labor Day. We're starting to see those trends.

[14:30:00] BALDWIN: But freaking out, yes, trends -- if you look at Trump's Twitter today, it is a win, you know. You see him saying watch out for the red wave. All is swell.

ERICKSON: Well, listen, the Democrats were saying that in 2012. Behind the scenes they know that. Both sides may do this. They may save the senate but the house of representatives looks more and more likely that Republicans are going to lose. You saw Karen Handle's seat, the sixth Congressional District in a special election, she should have won by a wider margin, but it was a very tight race because of Democratic mobilization. The same in Ohio 12. Democrats are way more mobilized than Republicans. This is a district the president won by 11 points two years ago and they're barely hanging on.

BALDWIN: Right but with Ohio 12, we know last week Trump swooped in for that rally for two hours and sent out a tweet. Do you think Trump should get the credit he clearly thinks he deserves?

ERICKSON: I think so in this base. He mobilized his base. You have blue areas of the country that are very mobilized against the president, but there will be some Republican areas of the country that mobilize for the president and because of jerrymandering, some institutional concerns, congressional districts Hillary Clinton did not win that she should have, Republicans could neutralize some of the Democratic wave. It may not be as big as they want, but they only need 23, 24 seats to do it and that's very possible.

BALDWIN: How do you explain how tight these races are?