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Collins Indicted on Insider Trading; Giuliani Responded to Mueller Interview; Collins Tipped Family of Drug Failure. Aired 1- 1:30p ET
Aired August 8, 2018 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[13:00:00] JOHN KING, CNN ANCHOR: See you back here this time tomorrow.
"WOLF" Starts right now. Have a good day.
ANNOUNCER: This is CNN breaking news.
WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington. Wherever you're watching from around the world, thanks very much for joining us.
We begin with breaking news. President Trump's earliest congressional supporter, Republican Congressman Chris Collins of New York, has been arrested for insider trading. Prosecutors announce the charges and showcase their evidence in exacting detail only moments ago.
(BEGIN VIDEO CLIP)
GEOFFREY BERMAN, U.S. ATTORNEY FOR THE SOUTHERN DISTRICT OF NEW YORK: As alleged in the indictment, Congressman Collins cheated our markets and our justice system in two ways. First, he tipped his son to confidential, corporate information at the expense of regular investors. And then he lied about it to law enforcement to cover it up.
These charges are a reminder that this is a nation of laws and that everybody stands equal before the bar of justice.
(END VIDEO CLIP)
BLITZER: CNN national political reporter MJ Lee has been following this story for us.
So, MJ, walk us through the allegations in this lengthy indictment.
MJ LEE, CNN CORRESPONDENT: Yes, Wolf, well, these are certainly very serious charges. Congressman Collins has been charged with insider trading, wire fraud and lying to investigators. All of these charges actually have to do with an Australian biotech company called Innate Immunotherapeutics. He actually served on the board of that company and heavily invested in the company as well. And if you actually look through the indictment itself that goes into some great detail about the night that he found out some bad information about the company, and then proceed to tip off his son, who also invested in the company.
So take a look at this timeline. This was on June 22nd of 2017, summer of last year. At 6:55 p.m., the indictment says he received an e-mail from the CEO of the company saying that a drug trial had been a failure. Now, 16 minutes later, at 7:11 p.m., he starts calling his son. He tries to make that call four times before he is successful. And at 7:16, he speaks to his son and informs him about this information that he had learned.
And it is the next day, 7:42 a.m., in the morning, that his son starts putting in orders to sell off his shares of his stock in this company. And ultimately the indictment says that he was able to avoid some $570,000 in losses.
Now, a lot of congressional reporters are actually already familiar with this company Innate Immunotherapeutics because some red flags had actually been raised prior to today about Congressman Collins and his involvement in this company and whether he had actually tried to recruit other colleagues in the House of Representatives to invest in this company, including, take a look at this graphic, Congressman Tom Price. Of course you know Price was nominated and then confirmed to be the health and human services secretary for President Trump. He recently resigned. And during the confirmation hearings, this was actually a question that was raised about whether Congressman Collins tried to sort of persuade Price to invest in this company.
Now, earlier today, we did get a statement from Collins' attorney. So let me just read that for you. 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 Therapeutics stock. We are confident he will be completely vindicated and exonerated. Congressman Collins will have more to say on this issue later today.
So, Wolf, we're certainly going to be on the lookout for whether Congressman Collins decides to make a direct statement about this. But, obviously, very stunning and serious news coming just three months before his re-election.
BLITZER: Very stunning indeed.
All right, MJ, we're going to have a lot more on this story coming up. A lot of legal analysis.
But there's other important news we're following right now, including this just coming in.
The Trump legal team has delivered their answer on the interview request from the Special Counsel Robert Mueller. One of the president's personal attorneys, Rudy Giuliani, says they want to get this over before the midterms in November. Maybe by September 1st, around Labor Day.
Our chief political correspondent Dana Bash has the breaking news on all of this.
Dana, what can you tell us, first of all, about the response? Will there be any conditions, especially about questions pertaining to possible obstruction of justice?
DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Well, I spoke to Rudy Giuliani this morning. He wouldn't give any details on the nature of the response except to say that it is a good faith attempt to reach an agreement and then also told me that there is an area where we could agree if they agree, but wouldn't tell me what the area was or is, meaning anything about potential collusion, anything about potential obstruction. So left it very vague until the Mueller team actually looks at it. So that's where that stands.
[13:05:12] The question about obstruction of justice, though, is interesting because, as you alluded to there, Giuliani said earlier this week that, no way, there's no questions relating to obstruction of justice that we would allow the president to answer. Then yesterday seemed to open the door to it.
The way he clarified it with me when I talked to him today is that they don't want to allow and they will say no to any question that Robert Mueller and his team want to ask the president that they consider a perjury trap. So I said, what does that mean? And the answer was questions like, what did you say to Comey about Flynn? Why did you fire Comey? Answers to those questions, they say, and the president's legal team, Giuliani said, that Mueller already knows the answer to. So to ask that question of the president would be simply trying to catch him in a lie. That's the argument.
I said, well, is there anything on those topics that could potentially be OK with you? He said, possibly but can't think of any. So that certainly seems to be, if Robert Mueller is still determined to ask the president questions relating to potential obstruction of justice -- and we don't know because they're incredibly mum over in Mueller land. That could be -- you know, the deal-breaker on this potential interview.
It is very incremental. They are proposing and counter-proposing and have been for months and months and months. But it is noteworthy, as you mentioned, Giuliani talked about the September deadline, and that is the traditional window in which the Justice Department doesn't do anything public because it is between Labor Day and Election Day and there are big midterm elections in November.
BLITZER: He also did this interview, this radio interview, with Jay Sekulow, who has this radio show. Another one of the president's personal attorneys, in which they discussed this, what, September 1st deadline for resolving, yes or no, an interview?
BASH: Yes. So that's exactly what Giuliani said this morning to his fellow attorney who happens to have a radio show, Jay Sekulow. And my impression of that, because in the context of also speaking to Giuliani, is that they want to have it resolved by September 1st, but if it isn't resolved by September 1st, then they don't want to have to deal with it publicly until the election because of that window. And, politically speaking, not legally but politically speaking, Giuliani is in the camp of other Republicans who I've talked to who are in and around the president who actually think something counterintuitive, which is it won't be necessarily the end of the world if the president is still kind of facing this potential investigation or what have you during the election because they need the base to be energized and perhaps that's a way to energize the base.
We'll see, though. It's not up to them. It's up to Robert Mueller.
BLITZER: We'll see what happens. It certainly is. And he knows a lot more about all of this than any of us know right now.
BASH: He sure does.
BLITZER: All right, Dana, thanks for that excellent reporting.
Let's discuss all of this. Joining us, Eliot Williams, he's a former deputy assistant attorney general, Molly Ball, CNN political analyst, national political correspondent for "Time." Also with us, former federal prosecutor Glenn Kirschner and CNN legal analyst Laura Coates
So let's talk a little bit about this latest response from the Giuliani Trump legal team to Robert Mueller. You know, wrap this up by September 1st. They don't want to talk about obstruction, but they're willing to answer some other questions.
LAURA COATES, CNN LEGAL ANALYST: Well, I'm shocked that Giuliani continues to believe that he has so much leverage that he can dictate the terms of a conversation with Special Counsel Robert Mueller. The only leverage that they really do have is that you have this election that's looming. And there is this DOJ initiative that says you cannot have this in an election year. You want it wrapped up.
But, remember, Donald Trump's not actually on the ballot. So there's no -- there's an arguable claim to make that says, well, that wouldn't actually impact the president of the United States. He's not on the ballot. It would be for the down ticket ballots here.
But I'm really shocked, I think many of us are, that the two president's personal attorneys are conversing about a legal matter with a pending federal investigation on a radio show where they're prepared to make comments about privilege I'm sure later on, about executive privileges, certainly attorney/client privilege, and they're arguing as if the only way that Robert Mueller will talk to them is if they dictate the terms. It's not going to happen that way. And, ultimately, I think that he will have to sit down and answer some questions.
BLITZER: And, Glenn -- yes, I just want to say to Glenn, how do you see it?
GLENN KIRSCHNER, FORMER FEDERAL PROSECUTOR: So, Wolf, I'm not convinced that this is actually a two-sided negotiation. I think Rudy Giuliani has been negotiating against himself in his zeal to get all this information out into the public square. I don't think there's ever been an intent on the defense team's part, on President Trump's defense team's part, to actually bring the client in, have him sit down with Robert Mueller.
[13:10:03] I was actually surprised at the recent reporting that Robert Mueller was willing to put some questions in writing and submit those to the president. But the more I thought about it, it may very well be that some of the questions that Robert Mueller would propose to the president in writing are, things like, you know, Mr. President, did you tell Director Comey to lay off Mike Flynn? There are only two answers to that question. If the answer is, yes, that's evidence of obstruction of justice, arguably. If the answer is, no, I'm betting that Robert Mueller's team can prove that to be a lie.
So, you know, his latest terms, which are basically, the way it sounds to me is, oh, we'll bring him in as long as you don't ask the president anything incriminating or relevant. I mean that seems to be laughable.
BLITZER: Elliott, go ahead.
ELLIOT WILLIAMS, FORMER DEPUTY ASSISTANT ATTORNEY GENERAL: Well, I -- the other point is that it's not a perjury trap if you're telling the truth. And if you're not trying to conceal or change facts or mislead the people. And I think it's unfortunate that they're using terms like perjury trap and trying to convince the public that somehow Robert Mueller is the one at fault here and Robert Mueller's not the one who's under investigation. So I -- you know, we should just be careful about, you know, when we're hearing words like perjury trap or am I going to be tricked into incriminating myself when you might have done something wrong. So --
BLITZER: Because a lot of people, Molly, believe that the president's never going to sit down with Robert Mueller and do Q&A. Maybe in written forming, something along those lines, but certainly not in a face-to-face interview with Mueller and his team. That all of this is just politics right now, setting the stage, we tried our best, wanted to do it. The president certainly wanted to do it. But, you know, these guys, they've got 13 angry Democrats. They're just engaged in a witch hunt and it's not going to happen.
MOLLY BALL, CNN POLITICAL ANALYST: Well, I think there's a couple of aspects to that. I think, first of all, you know, Giuliani may be negotiating with himself, but he also seems to be negotiating with his client because Trump, number one, reveals so much about this in public, insists on tweeting about it, making his case in public when any lawyer would probably prefer that he did not do that. And, second, when Trump has repeatedly said, publicly and privately, that he would like to do this whether or not his counsel thinks it's a good idea and he continues to say they're trying to talk me out of it, but I think I can do it and it may be partly bluster.
But I think part of what Giuliani may be doing is sort of running interference between Trump and Mueller trying to satisfy Trump's wish to do the interview while also protecting him in some way from himself.
WILLIAMS: Right. BALL: And then the third point is that he may not, in the end, have a choice. I mean part of what he may be doing is sort of trying to run out the clock without saying no because the minute they say no, that sets up a potential subpoena fight. And I think neither side wants that, but it can't -- but it is something that can happen when and if they do shut off the possibility of an interview.
BLITZER: All right, everybody stay with me. There's a lot more that's developing right now.
There's more on the other breaking news we're following.
Republican Congressman Chris Collins of New York, one of the president's first big supporters, he's now been arrested and indicted on insider trading charges. Also lying to the FBI. We'll talk about his fate.
Plus, the president declaring victory in Ohio despite the special election there still too close to call. Does the cliffhanger spell trouble, though, for the GOP ahead of the midterm elections?
And Senator Rand Paul delivering a letter from President Trump to Vladimir Putin. We have details.
Lots of news. We'll be right back.
[13:17:50] BLITZER: Back now to one of our top stories this hour. Republican Congressman Chris Collins of New York arrested on charges of insider trading. Prosecutors say Collins tipped off his son about negative information regarding a biotech firm Collins was on the board of. His son was able to then sell off shares, avoiding more than half a million in losses. Collins was already, by the way, under scrutiny for his role on the board, as well as recruiting several lawmakers to invest in the firm, including the former Health and Human Services Secretary Tom Price when he was a member of Congress.
Price's investment, by the way, came up during his confirmation hearing last year. I asked Congressman Collins about it at the time. Here's what he told me. This is in January of 2017.
(BEGIN VIDEO CLIP)
BLITZER: Did you encourage him to buy stock in this company called Innate Immunotherapeutics?
REP. CHRIS COLLINS (R), NEW YORK: No, absolutely not. There -- every -- 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'm the largest shareholder. And I talk about it all the time, just like you would talk about your children.
BLITZER: Were your telling other constituents, friends of yours, to go ahead, this is a great stock, go buy it? COLLINS: I never said to buy it or it's a great stock. I talked to
them about the great work this company is doing. The market for secondary progressive M.S. And, yes, there are many hundreds, you know, 50, 100 people from western New York, friends, family and so forth, who decided on their own, this was a pretty darn good investment, and it certainly turned out to be so.
BLITZER: Because you saw this. But you understand why, to the average person out there --
COLLINS: Oh, they --
BLITZER: There's something sort of smelly in all of this. You understand why people are complaining and why it seems a little sloppy, if you will, why they're -- why the Democrats, a lot of Democrats, are going after Congressman Price and threatening his confirmation over this one issue.
COLLINS: Oh, they're -- it's just so absurd.
(END VIDEO CLIP)
BLITZER: All right, let's discuss this and more.
Elliott, what do you make of what we just heard from him, knowing that the allegation against him is that when the stock was about to collapse, he gave advance word to his son to sell and in the process save a half a million dollars.
WILLIAMS: Well, you know, he'll have plenty of time to get his story straight from behind bars at some point.
[13:20:03] If -- and, frankly, looking at the fact that he was a top supporter of the president, it's -- the president is making the Washington, D.C. swamp look like Lake Tahoe in upstate New York, or, you know, Lake Placid in upstate New York.
I -- you know, it's -- what we keep hearing from him is I never -- and his lawyer said this morning, I never bought -- he never bought any stock. But that's not what the law says. He was unlawfully providing information to the benefit of members of his family. He broke the law. And trying to politicize it and make it about Democrats going after Representative Price or whatever, it's just -- it's misleading, like we were talking about earlier.
BLITZER: You make a good point. But I just want to be fair to the president, there's nothing in this indictment that involves him at all. Collins is one of his first supporters in the House of Representatives. He endorsed him very early on. But the president, Donald Trump, was never involved in this company, this biotech firm.
WILLIAMS: That's perfectly fine. But how many times are we going to hear about corruption from the president, a top supporter, a lawyer, a campaign chairman before we start to really recognize how much this corruption is running through everything the president touches. It's like King Midas was the gold -- the person who touched everything that turned to gold. The president seems to be the person who touches everything that turns to corruption. And everywhere it seems to be following him. And I think it's pretty misleading here (INAUDIBLE).
BLITZER: The indictment -- and I've read it, and you've read it, Laura, it doesn't say he did anything wrong when he was suggesting to other family members, friends, members of Congress, hey, this is a great stock, this is a great company. They could come up with a cure for some form of M.S. He says he didn't tell them to buy but clearly that was the implication. The charges that when the clinical trial was about to fail, he got advance word and then tipped off his son, who then tipped off others. They wound up saving hundreds of thousands of dollars.
COATES: And that's the crux of the matter. It's not about the innocent conversation and encouraging who would not want to have a cure from M.S. And if there is a lead to it, you would talk about it, of course.
But the real criminal behavior they're alleging here is that you -- you were in a unique position to get information that was not disclosed to the public. Nobody else had the advantage of having the information. But suddenly you got it and within minutes you tried to call people while you were still on the White House grounds, by the way, to tell someone to sell off their stock or coordinate some plan that not more than 12 hours later suddenly actually went by.
And so that is actually the crux of insider trading. And what you saw from the graphic that MJ Lee played was that you have the documentary evidence very early on. You had the phone call, the e-mail that actually said the drug test has failed. That's why most of the time insider trading cases are very document heavy. Either you have the information in advance and you acted on it or you did not. And what you're seeing here is somebody who wants to deflect, possibly, on the discussion of, I was just innocently telling you about a drug, to, actually that turned into insider trading. And suddenly they saved hundreds of thousands of dollars.
BLITZER: Glenn, his lawyer, the congressman's lawyer, says, you know, there's no charge in this indictment that he personally sold when he got the advance word that he -- because he had a lot of money invested in that stock as well. His son sold. Others sold. But he personally didn't call up his broker and sell all of his stock. Is that a strong argument he has on his behalf?
KIRSCHNER: So, Wolf, it's not a strong argument. And here's how. And, you know, and we have heard similar refrains regarding the Trump Tower meeting. Well, they never got any information so it must not have ripened into a crime.
But let me just break down the law of conspiracy. The law of conspiracy says if two or more people get together and agree to commit a crime and then they take one step, what we call an overt act, toward committing that crime, that in and of itself is a crime. It's the crime of conspiracy. They don't have to commit the underlying offense.
And I use as an example all the time a conspiracy to commit a murder. If two people get together and decide to murder a third person and they rent a car to use in the murder and they buy a gun and they map out the victim's route, but they never do pull the trigger so to speak, they have committed the crime of conspiracy to kill.
BLITZER: The U.S. attorney for the Southern District of New York, Molly, says -- the prosecutors, they say, Collins placed his friends and family above the public good. So what's going to be the political fallout of this? This is going to go on for a while.
BALL: Yes. Well, and I think it is one more headache that Republicans don't need after last night's election results also buoyed Democrats and discouraged Republicans, this is yet another blow.
Congressman Collins is in a heavily Republican district. It's hard to imagine him being vulnerable even in the face of something like this, but he may come under pressure to resign. He does have a Democratic opponent.
But I think the more political impact is along the lines of what Elliott was saying, it contributes to a narrative that Democrats have already been trying to build pointing to the Trump administration, pointing to what they call a culture of corruption. And the -- there is reason to believe that that resonates with voters much more than, say, the Russia investigation. That, you know, a lot of people, a lot of politicians have found that the Russia investigation is complicated. It's convoluted. We don't know where it's going to end. Trump has succeed in moving the needle and making a lot of people think that it's a witch hunt.
[13:25:07] This is something that really does bother people, when they think that their elected officials are not working on their behalf but are instead self-interested, profiting from their office, helping their friends and cronies. So I think you can expect to hear a lot more about that from the Democrats.
BLITZER: And, let's not forget, in this indictment, the other very serious charges against him and his son are that they lied to the FBI when they were initially questioned about all of this, perjury. That's a big deal. You go to jail if you lie to the FBI. Don't do that.
All right, guys, thanks very much.
KIRSCHNER: Sounds familiar.
BLITZER: There's a pair of nail-biters too close to call in Ohio and Kansas. We're watching right now. President Trump already declaring victory, but could this spell some trouble for Republicans in the midterm elections coming up in November?