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Firefighters Continue to Battle Mendocino Fire; Gates Faces More Cross-Examination; Tiger Plays at PGA; Baseball's Independent League; Tesla to go Private. Aired 6:30-7a ET

Aired August 8, 2018 - 06:30   ET


[06:30:00] UNIDENTIFIED FEMALE: Unstable. And it was -- that was really hard to see because you could tell where like the staircase and where everything was. And it was like trying to picture what our home was like.


DAN SIMON, CNN CORRESPONDENT: And of course you have homeowners all across the state of California who are dealing with similar emotions. Right now you have 17 major wildfires burning across the state, 13,000 firefighters assigned on these blazes. More firefighters on these blazes than at any point in the state's history. You have firefighters here from as far away as Australia and New Zealand.

John, we'll send it back to you.

JOHN BERMAN, CNN ANCHOR: All right, Dan Simon for us in the middle of the fire. Dan, thanks so much. We will be watching that all morning.

In the meantime, what a day for Rick Gates on the stand at a trial of Paul Manafort, the president's former campaign chair. High drama. Forced to admit many things about his personal life and his own crimes. Is he an effective witness for the government? What's in store today? We'll discuss, next.


[06:35:01] BERMAN: What a trial this has turned out to be. Rick Gates, Paul Manafort's former right-hand man, will be back on the witness stand in just about three hours for more of what could be withering cross-examination by Manafort's defense team. On Tuesday, Gates admitted having an extramarital affair and he admitted embezzling money from Paul Manafort. Also, for the first time, the Trump campaign itself came into play.

Our Joe Johns live at the U.S. district courthouse in Alexandria, Virginia, with the very latest.


JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: John, secret life of Rick Gates. This is coming into focus as a simply brutal cross- examination with the prosecution's star witness on the stand having to admit not just to his crimes but also to his character flaws, lying, stealing, cheating, as the defense continues to try to chip away at his credibility in the eyes of the jury.


JOHNS (voice over): Star witness Rick Gates back on the stand, painting a clearer picture of financial crimes he saying he committed with former Trump campaign chairman Paul Manafort. Gates testifying Manafort sent him hundreds of e-mails, many directing him to transfer money through off shore accounts. Prosecutors showing an April 2015 e- mail Manafort sent to Gates after finding out he had to pay higher taxes than he anticipated. Manafort writing, WTF, how could I be blindsided like this. You told me you were on top of this. We need to discuss options. This is a disaster.

For the first time, Manafort's and Gates' ties to President Trump entering the courtroom. Prosecutors presenting an e-mail Manafort sent to Gates asking for tickets to Trump's inauguration so he could give them to banker Stephen Calk. The government alleges Calk helped Manafort get a loan under false pretenses. In another e-mail, Manafort floating the banker for secretary of the Army.

Gates repeatedly telling the jury, Manafort was the ring leader of their many schemes and kept a close eye on all financial dealings. Judge T.S. Ellis interrupting Gates, saying Manafort didn't know about the money you were stealing so he didn't do it that closely.

Manafort's attorney's launching a fierce cross-examination trying to shred the credibility of his right-hand man. Gates admitting to having an extramarital affair and the defense highlighting his refusal to use the term "embezzlement."

Manafort's lawyer pushing, why won't you say embezzlement? Gates replying, what different does it make? The defense again asking, why don't you say embezzlement? Finally, Gates caving, it was an embezzlement from Mr. Manafort.

Gates also testifying he may have submitted personal expenses for reimbursement by President Trump's inauguration committee, which he helped to operate. Manafort's attorney pressing Gates, this jury is supposed to believe you? After all the lies you've told? Gates appealing directly to the jury saying, I'm here to tell you the truth. Mr. Manafort had the same path. I'm here. I have taken responsibility. I'm trying to change.


JOHNS: What matters here is how much the jury is actually going to absorb and whether all the pointed questions and accusations create doubts about Paul Manafort's guilt. His attorney leaving the courthouse yesterday, said his client had a great day.

Back to you.

ALISYN CAMEROTA, CNN ANCHOR: All right, we will get into that, Joe. Thank you very much. Joining us now, CNN legal analysts Renato Mariotti and Shan Wu. Shan is a former lawyer for Rick Gates.

So, Shan, you are of particular interest to us this morning since this whole sort of double life of Rick Gates was revealed yesterday on the witness stand. He was having an affair. He had this apartment, I guess, in London that nobody knew about. And so it, you know, the lawyers did a good job of trying to paint him as somebody who knows how to keep secrets and is self-interested.

What did you think of those moments and were they a win for Paul Manafort?

SHAN WU, CNN LEGAL ANALYST: Well, as always, I'm commenting on the public record, nothing privileged or confidential.

I think that Rick Gates was earning his cooperation agreement yesterday. He gave the government what it needed to have on direct exam, giving them good, solid testimony, and he's paying the price in the cross. And I think this is a classic cross of a cooperator. Used many times before, they're seeking to really tear down his credibility. And the price that he pays is, when you cooperate, everything is on the table, everything is revealed.

And so I think they scored some points just judging from what I've been seeing. And probably judging a little bit from that give and take between him and Kevin Downing, particularly on that back and forth on the embezzlement, and even with his appeal to the jury at the end talking about the Manafort -- the path Manafort might have taken, that sounds to me like they were getting under his skin a little bit and that's, you know, classic in a cross examination to any cooperator.

CAMEROTA: Renato, do you think that this means the jury sees him in a different light now that these, you know, personal lies have come forward?

[06:40:02] RENATO MARIOTTI: There's no question that the jury sees him in a light that they didn't see him before. That's exactly the point of the cross-examination. That's why this was the pivotal moment in the trial.

The problem, though, for the defense is that there's so much other evidence out there, there are e-mails that Mr. Manafort sent, documents that the prosecution will walk through, and there's these other witnesses, like the tax preparers, who also said that Mr. Manafort committed crimes. So really Mr. Gates is backed up by other evidence. And that is the tough part for them. They really not only need to take down Mr. Gates, which I'm not sure they completely did yesterday and will do today, but they also have to take on all this other evidence.

CAMEROTA: Hey, Shan, do you think that it would have helped for prosecutors to disclose his affair before the defense did?

WU: Yes, that's a very good, strategic question. Obviously they disclosed other things to take the sting out of it. I -- you know, it's a little hard to say because it may or may not play well with the jury that that came up. The jury might not like the fact that they're getting into that kind of a personally embarrassing point. But, unquestionably, by not bringing it up first, they make it seem like more of a gotcha moment, which, you know, potentially has more damage that way.

CAMEROTA: You say, Renato, that there are e-mails that, you know, still support Rick Gates, but then there's that e-mail that's gotten a lot of attention that seems to show a clueless Paul Manafort, and that is when he has a higher tax bill than he expected. And, as you know, he says, WTF, how could I be blindsided like this? You told me you were handling it. Does that help show that Rick Gate was more in control than Paul Manafort?

MARIOTTI: What prosecutors, I think, will argue is that what it shows is that Manafort had tasked Gates with lowering his tax liability through fraud. And he was mad that the fraud hadn't lowered his taxes as much as he thought. So there's no question, whenever you have somebody at the top of the totem pole, like Manafort, the people below him are the ones doing all the dirty work, but that doesn't mean he's not the one who's pulling all the strings. And so I think that's how prosecutors are going to argue that e-mail.

CAMEROTA: Shan, what do you think?

WU: I agree with Renato, they'll certainly try to argue it that way. On the flip side, of course, that reaction can be played by the Manafort team as he being quite surprised. And the defense can then argue that this is another example of how Gates is doing things independently of Manafort, which is what they really want to show, that they are not joined at the hip.

CAMEROTA: Here's what we can expect today. It is day seven. It reconvenes at 9:30 a.m. Eastern. The cross-examination of Gates will resume for a third day. So possibly more bombshells to come. And the defense attorney, Kevin Downing, said cross-examination will likely continue for an hour.

And so, Renato, as you sit here today, from everything you've seen, how is it going for Paul Manafort? How do you think this is going to come out?

MARIOTTI: I think it's going very poorly for Paul Manafort. You know, as I mentioned before, there's all this other evidence. So really, for the defense to even have a punchers chance in this thing, they had to totally take down Gates. And I don't really think that they did that. Gates was very well prepared. He had met with prosecutors 20 times. I think that that really showed yesterday. And so it's tough because even if they had taken down Gates, I still think they would have gotten a conviction on a few counts. And I think at this point Gates -- don't forget, the prosecutors are going to have a chance to rehabilitate Gates after this cross-examination that's going to come today.

CAMEROTA: Well, Shan, that's different than what Paul Manafort's attorneys' said. They said that yesterday was a very good day for Paul Manafort.

WU: Well, I don't think they would say it was a bad day ever.

I think they made some good points yesterday. They did what they had to do yesterday. And I agree, it's a tough, uphill battle. It always is in these sorts of paper cases. But, you know, there are vagaries of a jury. One never knows exactly, you know, what impressions they are forming.

But I think Manafort's team did what they needed to do yesterday. If they can do more, that will be good for them. But it's absolutely true, the prosecution has a chance to come back and to remedy any, you know, problems they see have been caused.

CAMEROTA: Shan Wu, Renato Mariotti, thank you for helping us all understand it.

WU: You're welcome.


BERMAN: All right, there is no car more controversial than the Tesla, no CEO more controversial than Elon Musk. What he did yesterday on Twitter sent the stock market awry. How will it play today? We'll discuss, next.


[06:48:21] BERMAN: Golf's final major of the season set to tee off tomorrow. Will Tiger Woods finally end his major drought?

Andy Scholes has more in this morning's "Bleacher Report."

What's the word, Andy?

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Well, you know, John, Tiger hasn't won a major since the 2008 U.S. Open. So it's officially been more than a decade now.

This "Bleacher Report" brought to you by Ford, going further so you can.

Now, Tiger did play very well at the British Open last month, finished tied for sixth. Will the 100th PGA championship be where he finally gets back on top? Well, Tiger says he's just happy to be playing again.


TIGER WOODS, PROFESSIONAL GOLFER: Just for me to be able to have this opportunity again is -- it is a dream come true. You know, I -- and I've said this many times this year, I don't know whether -- if I could do this again. And, lo and behold, here I am.

(END VIDEO CLIP) SCHOLES: All right, in the series between the Fargo-Moorhead RedHawks and the Chicago Dogs may be the best independent league series of all time. After a bang-bang play at third last night, the Dogs manager was so upset with the safe call, he decided to just go over, take third base out and then walk over and give it to a young fan that was watching the game in the stands. And that came a night after a RedHawks player was so mad at being called out on strikes that he went into the dugout, picked up a big old trash can they had in there and then took it over to home plate and then placed it where the umpire normally stands.

And, you know, Alisyn, we've seen tens of thousands of tantrums on baseball fields over the last century. Never seen that before. So that player definitely gets points for creativity.

BERMAN: I have to say, he didn't dump the trash and the manager didn't throw the base. So they're walking right up to a line right there.

[06:50:02] CAMEROTA: But I'm just not sure their anger management classes are working. That's how -- what I get from this.

SCHOLES: It's all entertainment.

CAMEROTA: Yes. Well, there you go.

All right, Andy, thank you very much.

SCHOLES: All right.

So will Elon Musk remove Tesla from the scrutiny of Wall Street? The CEO says he may take the company private.

Chief business correspondent Christine Romans is in our Money Center with more.

What does this mean, Christine?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Wow, big drama yesterday for Elon Musk, guys. You know, he stunned -- simply stunned investors with this casually worded tweet, writing that he's considering taking Tesla private and had already secured funding. He wants $420 a share. That values the company at like $71 billion, way above where it is now.

Musk under pressure from investors to turn Tesla into a profitable car maker. It's burning cash as it struggles to produce its first mass market car, the Model 3.

You know, Musk is an outspoken maverick who has been, shall we say cranky, with Wall Street.


DAVID MADDEN, CMC MARKETS: This could be a temper tantrum by Elon Musk as a way of saying that I do not need to be bothering answering questions from market analysts or commentators or journalists or being in -- under scrutiny of all this trade.


ROMANS: Musk says going private is the best way forward for Tesla, no longer facing that distraction of what he calls wild swings in his stock price.

Musk also says it removes incentives to attack his company. He often complains about short sellers, investors who profit when Tesla's stock drops. Musk's tweet sent Tesla shares up 11 percent, down a bit right now. But this is, Alisyn, the war with the shorts, it looks like, and Elon Musk, Alisyn.

CAMEROTA: I'm not going to run with that. I'm not going to run with that expression.

ROMANS: I wanted John to --

BERMAN: And you talking about short shorts? Are you talking about --

CAMEROTA: I've had a war with some of my shorts also, but I'm not going to talk about that.

BERMAN: Short shorts, long shorts, grabby (ph) shorts?

ROMANS: Trying to give John a little softball there. There you go.

CAMEROTA: Hey runs with it. Thank you, Christine.

BERMAN: In my shorts.

CAMEROTA: Thank you, Christine.

Back by popular demand. Part two of our Trump voter panel. Wait until you hear why some of them now have regrets about their vote, others have more passion.


UNIDENTIFIED FEMALE: I just feel that his back and forth and his Twitter tirades about every little criticism that anybody makes about him is upsetting.

UNIDENTIFIED MALE: I have never felt so free in my speech, in my faith in this country because we have our president, Donald Trump. I have a champion in the White House today who is fighting against the scourge that's ruing our country.


CAMEROTA: OK. More of our conversation later on NEW DAY.


[06:56:29] CAMEROTA: Late night hosts fighting the funny in the Manafort trial. Here are your late night laughs. (BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, "THE LATE SHOW WITH STEPHEN COLBERT": Man, if the public Richard Gates is this crooked, I can only imagine what kind of crimes the secret Richard Gates did. I'm going to guess dolphin arson.

Gates, in a quite strained voice, told Downing that it was true, about 10 years ago he had an extramarital affair. Oh, my God, that's all they've got on him? Our president has had multiple extramarital affairs. That's how he met two-thirds of his wives.

SETH MEYERS, HOST, "LATE NIGHT WITH SETH MEYERS": Today was Special Counsel Robert Mueller's birthday. And this is cool. His local bakery sent him a cake.

JIMMY FALLON, HOST, "THE TONIGHT SHOW STARRING JIMMY FALLON": President Trump is still on vacation at his New Jersey golf club and so tonight he had dinner with a group of CEOs. He didn't want their input, he wanted to network because he might need a new job soon. And one of the other CEOs at the dinner was from FedEx. 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's like, oh, oh, no, oh, no, no, please, no.

COLBERT: Giuliani concluded his tweet slam with this, I hope this idiot is not a lawyer because if he is he should sue his law school. But, if you're an idiot and a lawyer, get in touch with Trump, he's always looking to add to the team. Speaking -- that's right.


BERMAN: These guys can't take summer vacation. They can't go away.

CAMEROTA: No, of course not, there's too much material. But -- but he was -- so Giuliani was criticizing somebody on Fox. Was he criticizing Judge Napolitano, who has talked -- I mean who, you know, a lot of people have noted have not been in lock step with some of the most Trumpian cheerleaders?

BERMAN: I don't know if you're allowed to criticize someone on Fox if you're Rudy Giuliani. There's a line there you can't cross.

CAMEROTA: Well, he just did it. He just did it, John.

BERMAN: So, thanks to our international viewers for watching. For you, CNN "TALK" is next. For our U.S. viewers, NEW DAY continues right now.

ANNOUNCER: This is CNN breaking news.

CAMEROTA: Good morning, everyone. Welcome to your NEW DAY.

And we do begin with breaking news. The House race in Ohio's 12th district, that all eyes were on last night, this morning is too close to call. And that may be a warning sign for Republicans ahead of midterm elections. Trump-backed Republican candidate Troy Balderson is clinging, at this hour, to a razor thin lead over the Democrat, Danny O'Connor. This is a district that the president won by double digits just in 2016. Balderson is ahead by about 1,700 votes, but there are 8,000 outstanding ballots that have yet to be counted. So then an automatic recount could be triggered.

BERMAN: That possibility did not stop President Trump from declaring Balderson the winner and taking full credit on Twitter. O'Connor is vowing to fight on. Balderson already looking ahead to November.


TROY BALDERSON (R), OHIO CONGRESSIONAL CANDIDATE: America is on the right path and we're going to keep it going that way.

It's time to get to work. Over the next three months, I'm going to do everything I can to keep America great again.

DANNY O'CONNOR (D), OHIO CONGRESSIONAL CANDIDATE: We made our case for change. We're going to make that case tomorrow. We're not stopping now. Tomorrow we rest, and then we keep fighting through to November. Let's go out there. Let's get it done. Let's change this country.


[07:00:05] BERMAN: Here to talk about last night's result and its implications is the Democratic candidate in Ohio 12, Danny O'Connor.

Danny, thank you very much for being with us.