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EARLY START

Ohio 12th Special Election Too Close To Call; Rick Gates Details His Crimes in Manafort Trial; Firefighters Struggle To Contain California Wildfire. Aired 5:30-6a ET

Aired August 8, 2018 - 05:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(COMMERCIAL BREAK)

[05:30:05] (BEGIN VIDEO CLIP)

TROY BALDERSON, REPUBLICAN CANDIDATE FOR SPECIAL ELECTION IN OHIO'S 12TH CONGRESSIONAL DISTRICT: I'd like to thank President Trump.

(END VIDEO CLIP)

PHIL MATTINGLY, CNN ANCHOR: The Republican candidate declares victory, the president takes credit, but the numbers show Ohio's special election is still too close to call.

CHRISTINE ROMANS, CNN ANCHOR: Paul Manafort's lawyers grill the prosecution's star witness, painting Rick Gates as a cheater and a thief who can't be trusted.

MATTINGLY: Firefighters gain some ground on the largest wildfire in California history but the battle is far from over.

ROMANS: President Trump hosts some of America's biggest CEOs with his economic message on the menu.

Welcome back EARLY START, everybody. I'm Christine Romans.

MATTINGLY: I'm Phil Mattingly. It is 30 minutes past the hour.

We are rocking and rolling because we have election results, which is exciting for nerds and me.

If Ohio's 12th District is any indication, a blue wave may, in fact, be coming in November. The special election that many considered a bellwether for the midterms -- the race between Republican Troy Balderson and Democrat Danny O'Connor is still too close to call this morning, an encouraging outcome for Democrats in a deep red district no matter how it plays out.

Still, there are more than 8,000 outstanding provisional and absentee ballots that could take days to count. Balderson currently leads O'Connor by less than one percentage point.

Both candidates spoke late last night. O'Connor refusing to concede; Balderson quick to claim victory.

(BEGIN VIDEO CLIP)

BALDERSON: I'd like to thank President Trump. America is on the right path and we're going to keep it going that way. Over the next three months, I'm going to do everything I can to keep America great again.

DANNY O'CONNOR, DEMOCRATIC CANDIDATE FOR SPECIAL ELECTION IN OHIO'S 12TH CONGRESSIONAL DISTRICT: As we see division and discord tearing apart our country, we must remember that each and every one of us are God's children and that all of us need to be treated with dignity and respect. And I think we could use a lot more of that spirit in Washington these days.

(END VIDEO CLIP)

MATTINGLY: President Trump taking some time out from his working vacation to declare Balderson the winner and take credit for it.

Even though the outcome is not quite yet official, the president tweeting, quote, "When I decided to go to Ohio for Troy Balderson he was down in early voting 64 to 36. That was not good. After my speech on Saturday night, there was a big turn for the better.

Now, Troy wins a great victory during a very tough time of the year for voting. He will win big in November."

ROMANS: Several other primaries to tell you about this morning including another race that is too close to call in Kansas. Secretary of State there, Kris Kobach, a hardliner on immigration who received President Trump's endorsement, locked in a very tight race with Gov. Jeff Colyer. The official results could be announced later today.

And in Missouri, CNN projects Attorney General Josh Hawley is the winner of the GOP primary for the Senate. Republicans are hoping he can unseat Democrat Claire McCaskill in November.

In the Michigan gubernatorial primary, CNN projects State Attorney General Bill Schuette will win the Republican -- will be the Republican candidate in November. Former state legislative leader Gretchen Whitmer will be the Democratic candidate.

And, CNN projects that John James has captured the GOP nomination for U.S. Senate in Michigan. James is an African-American Iraq War vet endorsed by President Trump. He will face Democrat Debbie Stabenow in November.

So joining us this morning, "CNN POLITICS" senior writer and analyst Harry Enten, who has been up all night --

HARRY ENTEN, SENIOR WRITER AND ANALYST, CNN POLITICS: Yes.

ROMANS: -- looking at this. He is so excited.

MATTINGLY: Great enthusiasm. It's just like --

ROMANS: Let's start with Ohio here because we can't call it yet. You know, you've got these -- what, by August 10th, August 18th?

MATTINGLY: August 18th, technically -- yes.

ROMANS: On August 18th, we'll probably know what the decision is.

But this is a real test of this blue wave theory of the Democrats. GOP -- the GOP outspent the Dems five to one there in Ohio.

ENTEN: Yes, and this is a district that Donald Trump carried by 11 percentage points back in 2016. If you look at all the races dating back to 2012, Republicans, on average, have won it by over 20 percentage points -- state and local elections, presidential elections.

And the fact that it's still so close this morning is an indication that the environment is on the Democrats' side.

MATTINGLY: I want to move quickly from Ohio to another House area that I think is really important. You've been pointing this out and I've been keeping an eye on it all week. You talk about the broader kind of national mood.

Washington State -- you were keying on some races there that are showing some things that maybe we didn't expect. Explain what you're seeing.

ENTEN: Yes. So, Washington has a unique primary system just like California -- it's the top two -- all the Democrats run, all the Republicans run. And basically what we know is that the primary results if combine all the Democrats and combine all the Republicans, it tends to be predictable of the full result.

And we've seen in three districts where the Republicans are really struggling. But the most shocking is Washington's 3rd District where Congresswoman Herrera Beutler was not thought at all to be in trouble. And, in fact, right now, the cumulative Democratic vote is actually beating the cumulative Republican vote in that district.

MATTINGLY: It's wild. It was totally -- she was not considered in play.

ENTEN: She was not considered in play. Most race-raters had that as solid Republican. And the fact that the Democrats have more votes right now than the Republicans indicates that that district may, in fact, be in play in the fall.

ROMANS: Let's talk about Kansas.

ENTEN: Kris Kobach -- obviously, we all know this story, right? He was endorsed by Donald Trump and Trump decided to go against the incumbent governor.

[05:35:04] And right now, that race is just so close to call. We're waiting on Johnson County which has a lot of votes.

Colyer is doing well in Johnson County but as more votes have come in from there Kobach is holding onto this very, very tight lead.

ROMANS: Five hundred votes.

ENTEN: Five hundred votes and that's basically where it's been -- 500, 800 -- all evening long. I've been waiting and waiting and waiting and it just is not coming. But we'll find out later today, hopefully.

MATTINGLY: We respect Johnson County and their processes, we wish they would be a little bit quicker.

ENTEN: I wish -- I wish they'd be a little bit faster. Honestly, it's giving me nightmares about Florida 2000 all over again.

MATTINGLY: Can I ask just kind of in a broad topline -- you look at John James in Michigan, you look at Bill Schuette, you look at Kris Kobach maybe, you see Troy Balderson. You look at the last 10-11 primaries.

Donald Trump has endorsed candidates that have won, period. How much of that is the president and how much of that is just the districts of the states?

ENTEN: I mean, I think he's obviously picking people who he thinks are going to win. I mean, if you look, for instance, in Kansas with Kris Kobach we had a poll that was taken last week that tended to show a very tight race. And then what do we have tonight? A very, very tight race.

So I'm not sure the president had too much of an impact there. I'm not sure he had too much of an impact in Ohio either despite what he claims.

The polling indicates beforehand that it was a close race and it ended up being a close race.

ROMANS: Let's look at -- let's look at what the president said when he took credit for that victory in Ohio.

"When I decided to go to Ohio for Troy Balderson, he was down in early voting 64 to 36." You guys can put up that tweet.

"That was not good. After my speech on Saturday night, there was a big turn for the better. Now, Troy wins a great victory during a very tough time of the year for voting. He will win big in November."

The president -- the second word in this tweet about Troy Balderson is the word "I" for the president, which is sort of, you know --

ENTEN: What a surprise that the president's taking credit for something.

Look, early voting in Ohio always leans Democratic. Remember, Hillary Clinton was up large in the early returns in 2016 before Donald Trump won that state by eight points. The face that Danny O'Connor was up in the early vote and then you saw

a Republican gaining, gaining, gaining, not really a big surprise. That's what most of the polling indicated and that's exactly what happened.

ROMANS: Has the polling been OK? I mean, 2016, the polling was all over the place and was a real surprise for people.

ENTEN: You know, unbelievably so far in the special elections, the polling has actually been above average for special elections. And if you look at the final poll in Ohio 12, it showed that Balderson was up by a point and how much is he leading by right now?

ROMANS: A point.

ENTEN: One point.

MATTINGLY: The Wendy's order was good last night. The cream soda was good last night.

ENTEN: I -- all the foods that I ate and all the drinks that I had in order to keep me awake are clearly working at this hour, although I'll leave that up to you.

ROMANS: That was some of your best material.

MATTINGLY: No, it's --

ROMANS: This is one of your best appearances ever.

ENTEN: Oh my gosh.

MATTINGLY: There's has been really, really good.

ENTEN: You warned --

MATTINGLY: I'm going to let you go to sleep on August 18th. That will be great.

ENTEN: August 18th? Oh please, I'm going to stay awake until at least November. If we have a run-off in Mississippi, I'll be awake for that, too.

MATTINGLY: God bless you, man.

ROMANS: All right.

MATTINGLY: That's why you're the best in the business.

ROMANS: Harry Enten, thank you.

ENTEN: Thank you.

MATTINGLY: All right.

Former Trump campaign chairman Paul Manafort's longtime right-hand man back on the witness stand today. Manafort's defense lawyers expected to pick up where they left off yesterday, trying to undermine Rick Gates' credibility in the eyes of the jury.

Gates has admitted to a host of transgressions. So far, Manafort's defense team has not done much to pin the bank and tax fraud their client is charged with on Gates alone. That part of the cross- examination may come today.

More from CNN's Jessica Schneider.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Christine and Phil, Paul Manafort's lawyers went on the attack against Rick Gates on Tuesday. They hammered him with questions that even led Gates to admit on the stand that he had an extramarital affair a decade ago.

But when attorneys accused him of using Paul Manafort's money to fund his so-called secret life, Gates pushed back saying the money actually came from bonuses.

Now, of course, the defense team is doing everything they can to attack the integrity of Paul Manafort's former right-hand man. Gates said he had made some mistakes but he insisted to the jury that he is now telling the truth.

And the defense team really wants to establish that Rick Gates was the one who developed that financial scheme to hide money from the U.S. government, not Paul Manafort.

Paul Manafort's lawyer even asked the direct question of Gates -- did you develop a scheme. And then, Gates responded no, I just added some numbers to some reports.

But really, prosecutors have gone to great lengths to show that it was, in fact, Manafort in charge.

At the end of Gates' direct examination, prosecutors were painstaking to show the process where Manafort asked Gates on occasion how to add information to a PDF document. And when Gates said that when he got the document back, Manafort had actually changed some of the numbers, falsifying some of their financial reports.

Of course, Rick Gates was a close associate to Paul Manafort for 12 years but now he's flipped. He pleaded guilty and he's telling all he knows to prosecutors.

So it will be interesting when he is back on the stand for more cross- examination this morning -- Christine and Phil.

(END VIDEOTAPE)

ROMANS: All right, Jessica Schneider. Thank you for that.

Last night, President Trump hosted an informal dinner for some of the country's top business leaders at his Bedminster golf club. The president and the first lady welcoming more than two dozen CEOs and their spouses, including the heads of Pepsi, Fiat Chrysler, Fed Ex, Boeing.

[05:40:10] (BEGIN VIDEO CLIP)

MELANIA TRUMP, FIRST LADY OF THE UNITED STATES: Welcome to Bedminster. It's great to have you here and we're looking for a great discussion tonight. And I just want to thank the president for doing an incredible job and for all of your help.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The policies of the other administration would have been more regulation and much higher taxes and what you're witnessing now could never have happened.

And growth has taken us out of a lot of problems that have been caused -- and you're going to see super growth very soon when it's all said -- when it's like a fine-tuned machine. You're going to see some really super growth.

(END VIDEO CLIP)

ROMANS: The guest list also included the heads of much smaller companies who have been loyal Trump supporters.

MATTINGLY: And, firefighters are struggling to contain the largest wildfire in California history.

At this point, the Mendocino Complex fire has scorched nearly 293,000 acres. Seventy-five homes have been destroyed. And the fire, it's only 34 percent contained.

Firefighters are up against hot, dry, and windy conditions.

CNN's Stephanie Elam has the latest from Mendocino, California.

(BEGIN VIDEOTAPE)

STEPHANIE ELAM, CNN CORRESPONDENT: Christine and Phil, we are standing in the midst of some of the devastation from the Mendocino Complex fire which is actually two fires that started about the same time, burning near each other here.

And you can see how hot this fire got -- the devastation here. Even in this rural community you can see that it has really ravaged some of the properties that are here.

And just to give you an idea of how bad the fire season has been, if you go down just a couple of blocks from where we are there's another building that's burned out and you might think it's from this fire. It's actually from a different one.

All in all, right now, there are some 17 fires that are burning in the state. And just to give you an idea of how bad this fire season has been, with this one being the largest fire in state history at this point, some 550,000 acres of land have been burned in the last three weeks because of wildfires. And, Phil and Christine, fire season is far from over here.

(END VIDEOTAPE)

ROMANS: All right, Stephanie. Thank you for that.

In Iowa, University of Iowa college student Mollie Tibbetts now missing for three weeks. Coming up, why her father believes she is still alive.

MATTINGLY: Plus, a manhunt underway after a gunfight at a National Night Out event. Details are straight ahead.

(COMMERCIAL BREAK)

[05:46:41] ROMANS: No let-up in the stifling heat across the east yet. Meteorologist Pedram Javaheri has the forecast.

(BEGIN VIDEOTAPE)

PEDRAM JAVAHERI, AMS METEOROLOGIST: Good morning, Christine and Phil.

The set-up pretty impressive this morning, starting you off yet again into the lower 80s.

Guess what, the average temperature this time of year in Boston -- the average high temperature about 82 degrees. What it feels like outside right now, just about that temperature. It sits at 81.

In Portland, 74. New York feels nearly 80 degrees even pre-sunrise, yet again. And, of course, the heat continues.

Some scattered showers across the Northeast here. That will hopefully begin to give us a trend of -- a shift towards cooler weather.

But still, upwards of 40-plus million people underneath heat advisories. It includes Boston, includes New York, it includes Philly.

You put in the 'what it feels like' into the afternoon hours and it should be somewhere around 97 to 99 degrees in a lot of these areas -- again, with the humidity.

New York's high temp around 88. Boston around 87.

Down towards the south, widespread upper 80s, lower 90s as well. Houston around 94 degrees.

What is the trend, though? Very uniform the next couple of days. The cooling we're hoping for -- it's there but it's going to take its time getting there.

And you take a look. We think sometime Saturday into Sunday we get a slight cooling trend in store across this region. Temps over the next couple of days in places like New York eventually drop down to 81 degrees and may even stick around there for a couple of days going into early next week -- guys.

(END VIDEOTAPE)

ROMANS: All right, thanks, P.J.

Investigators are trying to identify the remains of a boy found during a search of a New Mexico compound where 11 children were found living in filth. Investigators say they discovered the remains of an unidentified child inside that compound on Monday.

Authorities raided the compound last week in what initially started as an investigation into a man's alleged abduction of his son last year.

Taos County sheriff's officials say the children ranging in age from one to 15 were found living in squalor conditions -- no running water or electricity. Five adults have been arrested.

MATTINGLY: The reward for a missing Iowa college student is now over $300,000. Mollie Tibbetts' father says he believes his daughter is still alive.

(BEGIN VIDEO CLIP)

ROB TIBBETTS, FATHER OF MISSING COLLEGE STUDENT MOLLIE TIBBETTS: I think the longer this goes on and the absence of finding here, that she could be someplace where we can still get her back.

(END VIDEO CLIP)

MATTINGLY: Rob Tibbetts says he believes his daughter may have gone willingly with someone she knew. His daughter was last seen taking a jog three weeks ago.

Wayne Cheney, who lives near the search area, has been questioned by the FBI. He told the "Des Moines Register" he has refused to take a polygraph, saying I have nothing to hide. He's not been charged in connection with the case.

Now, Mollie's father, Rob, will join us on CNN's "NEW DAY" at 7:30 a.m. in the east.

ROMANS: New this morning, a manhunt underway right now in New Jersey after two plainclothes detectives were ambushed at a red light.

Police say the detectives were sitting at a red light in Camden during a community policing event called the National Night Out. The gunman walked up and emptied 25 rounds into the officers' car.

Amazingly, the detectives' injuries are described as non-life- threatening. One officer returned fire. Police are checking local hospitals now for the gunman.

MATTINGLY: The city of Chicago vowing to put hundreds of additional police officers on the streets. The move coming after 66 people were shot over the weekend. Twelve people died.

Chicago's police chief says 430 officers are being put on street duty while 200 more will patrol over the weekend.

[05:50:00] ROMANS: All right. Let's get a check on "CNN Money" this morning.

Global stocks mixed at this hour. Wall Street shaking off trade fears thanks to strong corporate earnings. The S&P 500 closed just shy of a record high, less than half a percent away from its January record close.

It has been a stellar second quarter for companies. Profit growth is the highest in years.

But the season's not over yet. Today, you can expect to hear from 21st Century Fox and CVS.

All right. Tesla jumped 11 percent after CEO Elon Musk said he may take Tesla private, trying to get out from under the scrutiny of Wall Street and analysts.

Disney is gearing up to take on streaming services. For years, Disney faced tough competition from companies like Netflix. Yesterday, CEO Bob Iger laid out Disney's high-stakes plan to fight back.

First, Disney will rely on its own streaming platforms, including Hulu and the recently launched ESPN Plus. It also plans to debut a family- friendly service next year featuring contents from Pixar Marvel, Disney and Star Wars.

Second, it will use new content from Fox on those platforms. Disney plans to buy Fox's entertainment assets for $71 billion, including its movie studio and T.V. Channel.

Snapchat's revenue grew 44 percent last quarter but it lost users for the first time ever. Snapchat is down three million daily users. Snap blamed a rocky redesign of its app.

And it's not the only social media company to see a slowdown. Shares in Facebook and Twitter both fell after reporting slowing user growth.

Facebook lost more than $100 billion in value in one day. That's a record for a U.S. company. Because of those concerns of putting privacy first is going to mean profits will be second.

MATTINGLY: Oh well, pretty important.

ROMANS: Yes.

MATTINGLY: Coming up, a fighter jet launches a missile by mistake. Yes, that would be a mistake. The story just ahead.

ROMANS: Plus, a brand new rocket-powered jet with an extreme need for speed.

(COMMERCIAL BREAK)

[05:56:20] MATTINGLY: So think for a minute. What is your worst screw-up possibly at work? Well, how about this?

An air-to-air missile was accidentally launched over Estonia. The search is underway to find the missile which is believed to have landed perhaps 25 miles north of Tartu.

A Spanish fighter jet accidentally fired the missile -- which yes, seems like a pretty bad thing -- during an air policing mission.

Estonia's prime minister called the incident extremely regrettable.

ROMANS: China says it has successfully tested its first hypersonic aircraft. The Waverider uses shock waves in the air generated by its own flight to soar faster than five times the speed of sound.

Experts say it can carry nuclear warheads and that its speed and its unpredictable trajectory make it nearly impossible for any anti- missile defense systems to intercept it.

MATTINGLY: Yes. When we first did the story in the 4:00 a.m. hour they let me sing.

ROMANS: Do it.

MATTINGLY: That's been removed from the script --

ROMANS: No.

MATTINGLY: -- which means I think that's a judgment on my actual singing. So we'll never do that again.

ROMANS: The story of a really, really big --

MATTINGLY: Yes, here's the big news. We now know the owner of "The Brady Bunch" house. It's HGTV. The network says the house in North Hollywood will be restored to its 1970s glory.

The house was listed at a starting price of almost $1.9 million.

Former "N Sync" member Lance Bass bid on the house and tweeted his disappointment at losing out earlier this week. But, no fear, all seems to be forgiven with this tweet.

In part, "Kudos HGTV. I know you will do the right thing with the house. That was always my biggest worry. I can smile again."

ROMANS: Speaking of smiling, while you were sleeping the late-night shows made light of President Trump's dinner with some of America's business heavyweights.

(BEGIN VIDEO CLIP)

JIMMY FALLON, HOST, NBC "THE TONIGHT SHOW STARRING JIMMY FALLON": President Trump is still on vacation at his New Jersey golf club and I saw that tonight he had dinner with a group of CEOs. He didn't want their input, he wanted a network because he might need a new job soon.

And one of the other CEOs at the dinner was from Fed Ex.

At first, Trump was nervous because those are the two things that cause him the most stress -- the Feds and his ex's. And he was like oh -- oh, no, no, no. No, please don't.

Actually, this is very interesting. I read that most of the CEOs arrived in limos while the CEO of Fed Ex was just tossed over the fence.

SETH MEYERS, NBC HOST, "LATE NIGHT WITH SETH MEYERS": President Trump had dinner with the CEOs of several large companies tonight at his private golf club in New Jersey. And when Bernie Sanders heard about it the rest of his hair fell out.

CEOs, where? A private golf club?

(END VIDEO CLIP)

ROMANS: All right, thanks for joining us. I'm Christine Romans.

MATTINGLY: I'm Phil Mattingly.

All the politics -- "NEW DAY" starts right now.

ANNOUNCER: This is CNN breaking news.

JOHN BERMAN, CNN ANCHOR: So, welcome to our viewers in the United States and all around the world. This is NEW DAY. It's Wednesday, August eighth, 6:00 here in New York.

Breaking news -- new election results coming in too close to call and way, way too close for comfort for Republicans this morning. A big, flashing, glaring major warning sign for the midterm elections.

The marquee race is in Ohio in what should be a strong Republican district. Republican Troy Balderson is clinging to a razor-thin lead over Democrat Danny O'Connor.

President Trump won this district by 11 points back in 2016, but as you can see there, it is very, very close.

ALISYN CAMEROTA, CNN ANCHOR: And no Democrat has won for three decades there. I think the last time was 1983, which I recall very well but my hair looked very different then.

And then there's another race that is too close to call -- the battle for the Republican nomination for governor of Kansas. There's controversial Secretary of State Kris Kobach -- who got a tweet of support from the president -- and he leads the incumbent governor Jeff Colyer by a fraction of a percentage point.

BERMAN: Yes, very, very small there.