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Closing Arguments Wednesday in Tax and Bank Fraud Trial; U.S. Could Lift Sanctions on Companies Tied to Putin Ally; Chaos and Controversy is a Hallmark of Trump's Term; Turkish Lira in Freefall; Yemen's Humanitarian Disaster; Trump Signs McCain Defense Measure Never Mentions McCain. Aired 12m-1a ET

Aired August 15, 2018 - 00:00   ET




JOHN VAUSE, CNN ANCHOR (voice-over): This is CNN NEWSROOM live from Los Angeles. Ahead this hour, Turkey warns it's aligned with the West is in jeopardy after a punitive U.S. sanctions send the currency tumbling, prompting fears of an economic default.

The gift of another news cycle. The U.S. president lashes out at a former White House aide, Omarosa Manigault-Newman, calling her "vicious, nasty, hated and a loser." All of this just a week before the release of her tell-all book, "Unhinged."

Plus, where is the beef? Really, where is it?

In the not too distant future, farmers can grow hamburger meat right there next to the bacon tree. It's called a clean mix. We'll tell you all about it later this hour.

Like to welcome our viewers all around the world. I'm John Vause. NEWSROOM L.A. starts right now.


VAUSE: Turkey's strained relations with the U.S. are front and center as Ankara faces its worst financial crisis in years. In the past few hours, Turkey's ambassador in Washington met with the national security adviser John Bolton at the White House.

The U.S. is furious that President Recep Tayyip Erdogan's government has imprisoned an American pastor. Friday, President Trump angrily tweeted that he's doubling tariffs on steel and aluminum exports from Turkey.

That sent Turkey's currency, the lira, sinking to a new low. On Monday, clawed back some of its losses, moving up to around seven to the dollar. The lira has fallen more than 40 percent against the U.S. dollar this year.

Due in part to inflation, the loss of foreign investment and incorporating tensions with Washington. All of this has rattled investors. U.S. stocks took a hit on Monday. European released in an Asian countries with projects in Turkey are also unnerved.

And while Turkey's central bank is promising to take necessary measures to protect the country's financial stability, it is refusing to raise interest rates. CNN's John Defterios reports there is one man at the center of it all, President Erdogan.


JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: It's an economic disaster analysts say caused mainly by the man in charge. Turkish leader, Recep Tayyip Erdogan once again defiant on

Monday, quick to blame everyone else but himself for an economy in the firing line and a currency on the brink.

RECEP TAYYIP ERDOGAN, PRESIDENT OF TURKEY (through translator): Do not worry about it. Be relaxed about it. We do not make concessions from the rules of premarket economy. Nobody should listen to speculation that say otherwise.

DEFTERIOS: The Turkish lira continues to crumble, dropping nearly 20 percent in the past week of trading. It's the result of years of mismanagement at the top, critics say; lavish spending on mega- projects like airports and bridges, symbols meant to burnish Erdogan's image and win in reelection.

Now, he is faced with a soaring current account deficit, inflation of nearly16 percent and corporate debt, which is priced in lira and rising.

UNIDENTIFIED MALE: The fall of the Turkish lira is only the beginning of a real economic crisis, of a possible recession in Turkey. We would need to see a complete change in economic policies.

DEFTERIOS: That change is unlikely as Erdogan now tightens his grip of the country's Central Bank after reelection in June and he installed his son-in-law as both finance and treasury minister.

ERDOGAN (through translator): Don't panic about the dollar. This has nothing to do with the dollar. If they have their dollars, we have our God. Stay calm.

DEFTERIOS: The lira's tailspin is starting to rattle global markets with European banks hit particularly hard. And there's a political plot twist as well. Last week, President Trump said, he would slap new tariffs on Turkey -- a punishment for Erdogan continuing to jail an American pastor named Andrew Brunson.

Over the weekend, Erdogan showed no signs of backing down.

ERDOGAN (through translator): You can never bring this nation in line with the language of threats. We understand the language of law and rights, but not threats. DEFTERIOS: He singled out the U.S. and currency speculators for waging, quote, "economic war against Turkey," casting no blame on his own economic policy -- John Defterios, CNNMoney, London.


VAUSE: OK, boys and girls. Today's interview with global business executive, Ryan Patel, is brought to you by the word, contagion.

OK, can we all say that word together?

Contagion. OK. Markets across Asia to Europe have been dragged down by all of this. We've also see your currency problems with the South African rand, the Argentinian and Mexican peso, really for Argentina, the Russian ruble also in Asia's currency is falling as well.

Right now there seems to be what is a decisive shift away from emerging markets, sort of a risk-off situation.

Does this have the potential to get to the point of sparking some kind of global financial crisis, AKA 2007-2008?



PATEL: What I want to say is this is still limited, right?

The report mentioned about E.U. banks. They still limit exposure. The biggest exposure to --


PATEL: -- the debt in Turkey right now is from the Spanish bank, BBVA. They got about 31 percent. So yes, there is a problem in Turkey right now; 50 percent of the GDP is of debt. So that's not a good sign and they have low shortages.

But I think there is two parts here. One is, what are they going to do.


PATEL: And the first part is take the politics for aside. Turkey, as an economy 3-4 years ago and even to this day is -- past town is booming. The GPD was about 7 percent, 8 percent last year.


VAUSE: OK. Let's listen to Erdogan talking about the government's response in how they're dealing with this financial crisis.


RECEP TAYYIP ERDOGAN, PRESIDENT OF TURKEY (through translator): We are taking the necessary steps against these attacks on the treasury and finance ministry and other institutions and we'll continue to take them. We have taken cautious steps. And there are steps we will take. We have various plans.


VAUSE: That's a classic example of someone talking a lot but actually saying nothing. If you look at what the government has done so far, all they've done is basically limit how much banks are allowed to swap lira for foreign currency. But that's about it.

They're asking people don't change your currency. Don't change your lira into foreign currency, please, and that -- there's nothing else. The main thing they need to do is raise interest rates. But they're refusing to do it.

PATEL: And that's the issue, right. And only if you don't do that, it is going to turn into, I hate to say it, but look at what happened to Venezuela and Argentina, when they're having problems with keeping the investment in the country right. It comes down to foreign investments are going to be less and people are going to take their money, including the locals, outside.

And then, what do you have left?

VAUSE: Nothing. You default.

PATEL: And then you look like Argentina, ask for a $15 billion from IMF for a bailout. And right now Turkey is not on the right graces of the IMF as well.

VAUSE: OK. Here is part of a report from Market Watch. Turkey does have a few options at its fingertips. But politics and pride are making many of these measures unpalatable, complicated a quick recovery.

Furthermore, market participants agreed that Turkey needed to mend its relations with the U.S. in the aftermath of the spat over the detention of Pastor Andrew Brunson.

OK. What are the chances that Erdogan will reverse course here?

He has built his entire presidency and turning himself into this autocrat based on the fact that he has provided essentially improving the economy, that's being fueled by debt, and standing up and being the strongman, standing up to the U.S.

PATEL: Well, I don't see the other options of him personally going to the IMF or go to the U.S. for help. I think the way they come out it is the central bank, even though it's underneath him, has to stand strong and say this is what we need.

That's the only way that they will be able to come out of increasing interest rates. Even though that would make him look bad, that is far better than him going to the IMF for a bailout.

VAUSE: (INAUDIBLE) push Erdogan closer to Russia and China. Russia has got no money. Their ruble has collapsed. So they're -- financially at least, that's not an option.

What about China?

PATEL: It's interesting; the countries that we're watch and see were Russia, Iran and Syria, specifically and China hasn't been mentioned. That could be an opportunity to come in. But China has got their own problems. But this kind of sparked -- I don't want to say it was because of what happened on Friday with the tweet from President Trump.


VAUSE: And you read my mind because I would like to read to you part of an editorial out of "The Guardian," which basically says this crisis is Erdogan's own making, it was triggered by the increase in tariffs on aluminum and steel.

But all of it is basically foreign debt with private and public. This is what "The Guardian" wrote.

"Had Mr. Erdogan thought through the ramification of his ultra-loose policy, he would put money aside to deal with foreseeable crises. This would have meant accumulating enough foreign exchange reserves to meet all repayments and interest on foreign debt falling over the next year.

"Turkey would need about $180 billion. Instead, Mr. Erdogan has less than half of that and a crisis he cannot pay for."

So in other words, was this bound to happen sooner or later, regardless of what Donald Trump and the U.S. did?

PATEL: Yes. What happened on Friday was just more of a -- added a little more fire to the thing. This was going to happen. This kind of --


PATEL: -- and put investors -- and we're talking about it -- to more of a focus on, OK, do you really want to put your money into this country and emerging markets?

Because this is not just about Turkey. This is about the other markets --

VAUSE: Which is why all the other currencies, South Africa, the Argentina and Indonesia, Mexico, their currencies are taking a hit.

PATEL: And so now guess who's back in the focus?

The U.S. is back in the focus. You go, wow, you got interest rates that are rising. You got a dollar that's actually rising. Interesting.

Do I want to move to that currency right now?

Because when you're in those countries, you need to have a safe haven.

Where do you go?

VAUSE: The U.S. That's what happened in 2007. The U.S. dollar went through the roof in value.

Very quickly, third quarter profits, the multinational companies with the rising U.S. dollar, are they going to take a hit?

Should we expect warnings for the earnings season?

PATEL: Yes, I think we will see some warnings because I think there is a lot of unknown what's going to happen. When you have not transparency but you also don't know what's going to happen --


PATEL: -- in the future and there is a little bit of a cloud, to be said.

VAUSE: So that's the real world implications?


VAUSE: OK. Apart from those people in Turkey who are dealing with the worst crisis in about 19, 17 years, I think, Ryan, thanks.

The U.S. is urging Saudi Arabia to carry out a transparent investigation into Thursday's airstrike in Yemen, which killed 51 people, 40 of them children, on a school field trip. Many were buried on Monday. It was a mass funeral.

Mourners and Houthi leaders blamed the U.S. for supporting the Saudi- led coalition, which carried out the strike. CNN's Barbara Starr reports now from the Pentagon.


BARBARA STARR, CNN PENTAGON CORRESPONDENT: Defense secretary James Mattis now saying he is having a three-star general talk to the Saudis about what happened, how it happened and how to prevent it from happening again, after this horrific attack on a school bus in Yemen, in which so many young children died.

This is not a Pentagon investigation. This is to support the State Department's call for an investigation and, of course, the United Nations also calling for an investigation.

The U.S. military does support the Saudi-led coalition in Yemen in this way: They provide refueling for Saudi and Emirati aircraft conducting strike missions. The U.S. doesn't conduct those airstrikes against the Houthis in Yemen.

But the U.S. also helps the Saudis try and have accurate intelligence about where military targets may be located. So that will be a major question here. Did the Saudis know about this target?

Did they strike it very quickly, perhaps without full planning and understanding of what they were striking?

These will be some of the key questions that the U.S. will be very interested in knowing the answers to. And it is not clear how much the Saudi military is going to really want the U.S. poking into this.

But some things are not really expected to change. The U.S. is expected to continue to support the Saudi-led coalition, as it has since the Obama administration, against the Iranian-backed Houthi rebels in Yemen. The U.S. supports the Saudis. It does not obviously support the Iranian-backed rebels.

But this situation in Yemen really, truly a humanitarian disaster. Tens of millions of people now totally dependant on international aid. There is an cholera outbreak and massive concern growing about the cost to the civilians trapped in that war-torn country -- Barbara Starr, CNN, the Pentagon.


VAUSE: For more now on the U.S. response to that airstrike in Yemen and the rest of today's political news, we are joined by CNN commentator and Democratic strategist, Dave Jacobson; also Republican strategist Chris Faulkner.

Good to have you both here.


VAUSE: There's been no public comment from the U.S. president or the U.S. vice president about the Saudi airstrike. Secretary Mike Pompeo actually spoke by phone to the Saudi crown prince on Monday.

According to the readout of that conversation, Pompeo thanked the crown prince for Saudi Arabia's support for Northern Syria's urgent stabilization needs, its engagement with the Iraqi government and its offers to help Iraq address its water and electricity shortages. No mention of the airstrike.

Chris, you know what the secretary of state spoke about.

Those issues are important but surely would this not have been the opportunity for the U.S. to let the Saudis know absolutely once and for all that this is unacceptable, that there needs to be an investigation, they need to be help up to the highest standards, it should be open, it should be honest and then release that publicly?

Because having a quiet word, maybe he did, maybe he didn't, is useless. He may as well not have said anything.

CHRIS FAULKNER, REPUBLICAN STRATEGIST: General Mattis came out right away and said -- called for an investigation, a transparent investigation, into this horrible tragedy. There's no way to -- and it is sad that it's taken us to this point of seeing this video of this young boy and his friends. This is an ongoing crisis of genocide --


VAUSE: Because this is not the first time --

FAULKNER: -- these things are unfortunately going on every day in Syria as well as in Yemen. These are proxy wars between Sunni and Shia that are tribal conflicts, really have been going on longer than the United States has been a country.

Obviously the world's attention is brought to this because of the video. And it is horrific. There is no other way to look at it. And I'm sure there will be an investigation. No one will be satisfied. It will not bring any of those kids back.

VAUSE: According to the Pentagon, a three-star general adjusted his already scheduled visit to Saudi Arabia to discuss the incident with the Saudis and look into the situation.

Dave, that seems to reflect just how little this administration actually cares about what its close ally is doing in this war in Yemen. If the president and the vice president aren't going to say anything, that says it all.

DAVE JACOBSON, CNN COMMENTATOR: Yes. I think it underscores the fact that this isn't a priority for Donald Trump. Donald Trump is out there today, criticizing John McCain, a true patriot, he was at a New York campaigning for a House candidate and literally criticized a war hero, a patriot --


JACOBSON: -- but refuses to talk about the death of 50 innocent children. It is deplorable.

VAUSE: We'll get to John McCain in a moment because we know, Chris, the president has been dealing with the potential fallout from Omarosa's new book coming out next week. She also claims that there are tape recordings of Donald Trump using the N word during his time as host of the reality TV show, "The Apprentice," which was made by (INAUDIBLE) a few hours ago.

The president tweeted this.

"Mark Burnett (ph) called to say there are no tapes of "The Apprentice" where I used such a terrible and disgusting word as attributed by wacky and deranged Omarosa. I don't have that word in my vocabulary and never have. She made it up. Look at her many recent quotes saying such wonderful and powerful things about me, a true champion of civil rights, until she got fired. Omarosa has" -- it goes on -- "zero credibility with the media. They can run interviews when she worked in the White House.

"Now that she says bad about me, they will talk to her. Fake news." And Chris, we'll get to the credibility in a moment. But these

allegations, they do feed into a wider narrative that this president is a racist, that he does racist things, he acts in a racist way.

FAULKNER: I don't think you have to be African American, white or polka dot to say that Omarosa is not a great person. I believe the term in golf is mulligan. And I think if the president had the opportunity to do it again, he probably would not have brought her in, in whatever low level position she was in.

Yes, she's a bad person. She's going to get what she deserves, I'm sure. And I'm sure that the number of people that are going to buy her book is probably smaller than the number of idiots that showed up in D.C. for that white supremacist rally.

VAUSE: Yes, that was a big success.

OK, to the point of credibility, here is Omarosa, that we all came to know before she was fired by the White house.


OMAROSA MANIGAULT-NEWMAN, FORMER WHITE HOUSE AIDE: Every critic, every detractor will have to bow down to President Trump.

DON LEMON, CNN ANCHOR: So no woman problem for him, do you think?

MANIGAULT-NEWMAN: Donald Trump has an authentic problem. He's too real for the Republican Party.


VAUSE: So, Dave, very few people took her seriously before.

Why should she be taken seriously now?

JACOBSON: She shouldn't be. She's a political opportunist. John, in 2013, I co-sponsored a Ready for Hillary super PAC event. Omarosa showed up to it, to support Hillary Clinton before she even announced her campaign for president.

And then Omarosa saw an opportunity with Donald Trump announcing his campaign. She had a relationship with him and injected herself into his political apparatus.

The reality is, she knew full well that he announced his campaign for president by saying that Mexicans were rapists. They were bringing drugs and crime into our country. She stayed with him when he refused to denounce David Duke, the leader of the KKK in the course of the presidential campaign.

She stayed with him a year ago after the Charlottesville comments, when he said that both sides are to blame when he was equating neo- Nazis with protesters. So she is an extraordinary hypocrisy.

Now that being said, Donald Trump was not justified when he said that she was not smart. She is incredibly sophisticated and intelligent and savvy. Clearly, she was able to get this far but she is a hypocrite nonetheless.

VAUSE: But she also has tape recordings. And she recorded a conversation with the president -- this was after she had been fired by the White House chief of staff, John Kelly. Listen to this.


TRUMP: Omarosa, what's going on?

I just saw on the news that you were thinking about leaving.

What happened?

MANIGAULT-NEWMAN: General Kelly came to me and said that you guys wanted me to leave.

TRUMP: No. Nobody even told me about it. You know, they run a big operation but I didn't know it. I didn't know that. Goddamn it, I don't love you leaving at all.


VAUSE: OK. So, Chris, for a start, assuming that that's the president. No one's saying the tapes are doctored, first of all, shouldn't he be aware when the senior people he appointed to $200,000- plus jobs as senior aides in the White House, if they are the ones being let go?

And also the fact he wanted her to stay by the sounds of it.

FAULKNER: I think it is fair to say that only Omarosa would describe her position as a senior position in the White House.


VAUSE: -- just on the money alone it is a senior position.

FAULKNER: -- and on top of that, when it comes to Omarosa and whatever relationship she may or may not have with the president, her charges about the president using racist terms, I think when it comes to recordings of the president, we know he's pretty frank and he says things that may offend or upset people.

And if he were to have used that word that she's accusing him of, we probably would have heard it by now.


VAUSE: Maybe.

FAULKNER: Oh, come on. We've heard everything else.

VAUSE: Have we?

That's the question, Dave.

JACOBSON: Trump also made things up about the recent Cohen tape. I forgot the precise language that he used. But he said something that he -- it wasn't clearly coherent in that audio recording. So the reality is he flips things, too, and manipulates the facts whatever it benefits him.

VAUSE: Or does it just for the sake of it, I think. OK, the president has not been able to ignore Omarosa but he did ignore an American war hero and a statesman who served his country for 60 years. And that would be John McCain. Here he was today signing a defense spending bill.



TRUMP: We would not be here without the dedicated efforts of the members of Congress, who worked so hard to pass the National Defense Authorization Act.


VAUSE: You know, Chris, I guess in the grand scheme of things of what matters and what doesn't matter, this in itself is small beer. But the president spoke for 28 minutes. He didn't name John McCain. The bill's named after John McCain, to honor John McCain.

He specifically went out of his way not to mention John McCain. The congressional lawmakers who were invited to that signing did not mention John McCain because they are profiles in courage.

This does seem to be completely and totally below the dignity of the office and a new low for the president.

FAULKNER: Is that a question?


FAULKNER: If the president would have mentioned John McCain, then what we would be talking about is, well, he wasn't glowing enough in his praise. If the president would have said thanks to John McCain, and then he didn't talk about John McCain for five -- there is no secret that there is animosity between Senator McCain and President Trump.

Nobody is hiding that, whether it is President Trump or Senator McCain. There is no win in this scenario. So maybe by not mentioning Senator McCain and putting the focus on the active military forces that were there, maybe the focus of the bill, in his heart of hearts, I'm sure Senator McCain would agree, it is not about him. It is about the military.

VAUSE: But in a way it was about John McCain because it was named after him as a way of honoring him for his service.

FAULKNER: No one is going to forget Senator McCain's service.

VAUSE: But this is a point.

Dave, the president could have signed this bill anywhere. He could have signed it in his Jimmy Jams or executive tie and watching --


VAUSE: -- but he made a big deal out of it. So it just seems like he specifically snubbed and a poke at a guy who is dying from brain cancer.

JACOBSON: And here's what's so egregious. Donald Trump didn't serve in the military. Not only did he not serve but he dodged the draft multiple times because he said he had bone spurs.

I'm sorry. He should give credit where credit is due. He's sitting up there in front of our military officials, who will risk their lives for our safety at a moment's notice. And you have Donald Trump, the draft dodger, sitting up there and not even giving any credibility or any note to John McCain. It is disgusting and despicable.

VAUSE: I think if he had just mentioned John McCain's name in the thing, maybe made a brief mention of it, this wouldn't have been a story.

FAULKNER: I think it would have been a story one way or the other.


FAULKNER: The president rarely talks and it's not a story.

VAUSE: That's true. Especially this president.

Thanks so much.

OK. Well, the Queen of Soul, Aretha Franklin is said to be gravely ill and is now in hospice care at her home.


VAUSE: She's 76 years old and she has been dogged by reports of failing health for years. Earlier this year, "Rolling Stone" reported she canceled two performances on doctors' orders.

Franklin's career spanned six decades, starting as a gospel singer at her father's church, going on to record hit after hit, chart toppers like "Respect," "Chain of Fools" and "A Natural Woman."

She was the first woman inducted into the Rock 'n' Roll Hall of Fame in 1987, a year before The Beatles.

Still to come here, one official calls it a one in a million experience. But to others, the theft of a passenger plane from Seattle's airport has raised some major security concerns.





VAUSE: Officials in Seattle are downplaying security concerns after an airline employee stole a plane from the city's international airport. Richard Russell was in the air about an hour on Friday before crashing on a small island, killing himself. CNN's Kyung Lah has the latest now on the investigation.


UNIDENTIFIED MALE: The dash-eight on runway one-six center, say your call sign?

Who is that dash-eight holding on runway one-six center?

KYUNG LAH, CNN SENIOR U.S. CORRESPONDENT: New audio from the moments that ground controllers realized they had a big problem rolling down the taxiway. A ground controller repeatedly tries and fails to make contact with the rogue Horizon Air Q400.

UNIDENTIFIED MALE: I'm not even talking to him.

UNIDENTIFIED MALE: He came flying out of the cargo area from Delta.

UNIDENTIFIED MALE: you need to call and scramble now.


LAH: That's the moment officials call for military fighter jets to intercept 29-year-old, Richard Russell, a Horizon air ground crew worker who stole the plane without a pilot's license.

UNIDENTIFIED MALE: Hey, pilot guy, can this thing do a back flip, do you think?

UNIDENTIFIED MALE: I mean, I don't think that much, but I played some video games before.

LAH: But after about an hour in the air, Russell makes clear he's not landing.

UNIDENTIFIED MALE: Now, let's try to land that airplane safely and not hurt anybody on the ground.

RUSSELL RICHARD, HIJACKER: All right. Now, damn it. I don't know, man. I don't know. I don't want to. I was kind of hoping that was going to be it, you know?

Just a broken guy. Got a few screws loose, I guess. I never really knew it until now. LAH: The plane crashed on a small island exploding in dense woods killing Russell. The rogue takeoff raises the stakes for concerns about so-called insider attacks that criminals working as airline employees might be planning to do much more harm next time.

The airline CEO says Russell managed planes from the maintenance area by himself. He was in uniform, had the proper credentials and access. Seattle Airport officials say all security protocols were followed on the ground. Security they say is tighter even than what is required by law.

COURTNEY GREGOIRE, PORT OF SEATTLE COMMISSIONER: I think this is really truly one in a million experience. That doesn't mean we can't learn from it and ensure this type of tragedy doesn't happen again.

LAH: The wider concern is for hundreds of thousands of employees who don't undergo constant close checks like those required for pilots. A 2017 House Homeland Security Committee report warned potential terrorists could take advantage of ground vulnerabilities. A bipartisan bill tightening employee checks passed the House and is stalled in the Senate.

LAH: How do you stop any of this from happening?

GAEL TARLETON, FORMER PORT OF SEATTLE COMMISSIONER: The only way to stop it is ignition lock devices. On the engine itself.

A pilot has to have the authority to use the ignition. And if they do not have the authority to use the ignition, then the plane should not turn on.

LAH: That state representative says it only makes sense. If you can't secure all the employees, you need to try to secure the individual planes. Aviation experts counter, though, that's just not feasible because so many people need access to these passenger planes, that the emphasis must be on securing these areas -- Kyung Lah, CNN, Seattle.


VAUSE: Well, meat grown in a lab is no longer science fiction.

But would you eat so-called clean meat if it could help the environment but, more importantly, if it tasted the same as mincemeat right there?

[00:30:00] YURI SIVO, WRITER: start hearing about this guy that worked for Yanukovych, Paul Manafort.

JOHN VAUSE, CNN INTERNATIONAL ANCHOR: So this is long before he signed up with Trump. This is long before we heard about an ostrich jacket was, all this kind of stuff. OK.

So, fast forward now to Manafort's trial, the trial didn't deal specifically by arrangement with Russia or the Trump campaign, but, you know, it did answer some, you know, some very big questions, like where Manafort came from, where he, sort of, honed his skills in sort of the art of politics.

And, you know, and his, sort of, political background and the connections with Russia. So what did we learn?

SIVO: So when you look at Manafort, the first thing that jumped out at me was that he had Konstantin Kilimnik as his -- he started as a translator, then he was his right hand man, then suddenly, he insinuated himself as running the whole Kiev office. And now we know who this Kilimnik is.

VAUSE: He's a former spy, basically.

SIVO: Yes, GRU. The military -- yes, very close to Putin, and he actually had met Manafort back in the early 2000s at the International Republican Institute in Moscow. So their connection goes way back.

VAUSE: OK. And one of the other names which came up during this trial. And what's interesting is that if you know the names, you kind of know the connections, right? If this -- otherwise, they just kind of go into a blur.

So one of the other big names who were brought up during the trial is Oleg Deripaska, again, this is -- this is a very wealthy Russian gazillionaire oligarch, made his money through aluminum. He hired Manafort, essentially, to get Yanukovych elected and Manafort did the job.

SIVO: Yes. And (INAUDIBLE) is also the contract that Paul Manafort made a proposal to Deripaska to do the same thing he's doing in Ukraine, and Yanukovych, Putin-Russia. And it started. You can see the sync on the talking points.

And, you know, the key thing here is that what guys -- what kremlin tries on Ukraine, usually ends up in Russia. And now, we see it ended up somewhere else.

VAUSE: Ukraine was like the, you know, the what -- the Petri dish.

SIVO: Yes. I call it beta testing site. Petri dish, yes. And it's a dress rehearsal for --

VAUSE: What stuff? What are they doing?

SIVO: Well, if you look at, you know, the whole polling, the heavy polling that happened to micro technology -- and, you know, you have to message the guy to make you (INAUDIBLE) and he's co-owner of the parent company of Cambridge Analytica, down the road.

And what they're trying on (INAUDIBLE) is also just turning Yanukovych, who was basically a thug who had been in prison twice, very coarse. You know, he would choose sunflower seeds and spit them out all the time. And Paul Manafort turned him into a slick, you know, Missoni suit guy.

VAUSE: And that's interesting because here's part of a report, it was on a telegraph. This was like 11 years ago, 2007. Basically, it's referring to Yanukovych here. Sacking his Russian consultants, he hired Paul Manafort, an American spin doctor, who advised Bob Dole during the 1996 race for the White House, to burnish his image.

Under Mr. Manafort's tutelage, the once avowedly pro-Russian prime minister has undoubtedly changed. He has ditched the bouffant hairstyle. Favoured by Soviet apparatchiks, taken to playing tennis with the U.S. ambassador, he's begun speaking in Ukraine rather than Russian and has even pledged to take his country into the European Union.

OK. So, it wasn't just that. These two guys looked like twin brothers, when you look at the makeover that ended -- you know, that Manafort gave to Yanukovych. This was -- this was bizarre.

SIVO: It's really bizarre. And people noticed this in Ukraine as it was happening. They could not believe what they were seeing. Mustafa Nayyem, who's now a member of parliament, who's one of the leaders of the revolution, he wrote a 2007 article for Ukrayinska Pravda and he is saying, who is this guy, Manafort, an American?

What is he doing in Kiev? He tries to enter his office, and he's kicked out? And Phil Griffin comes in and talks to him instead. And it's these mysteries like why is an America working for Yanukovych, and look what he did.

VAUSE: We're almost out of time, but all these names, you know, Deripaska, Yanukovych, all these guys, names which I can't pronounce, but they've come up repeatedly during this trial. They're expected to come up again during the second trial.

And this is really the preview in many ways of what Robert Mueller, the special counsel, has been looking into when it comes to Russia.

SIVO: I'm sorry. I looked at all the evidence that Mueller submitted for this trial.


SIVO: You know, not just, Paul Manafort, putting another Ukrainian oligarch, Dmytro Firtash, Ukrainian oligarch. They're all listed here, they're cc-ed. And who's being cc-ed is, Kilimnik.


SIVO: So, what is happening, they're working so intimately and it's this crazy web of trust, and basically, you know, you're colluding with the oligarchs and the presidency and parliament.

VAUSE: And we're going to talk a lot more about this, I guess, as, you know, Mueller comes to the close of his inquiries and we go to that second trial of Manafort coming up in September. Yuri, thank you. Good to e you.

SIVO: Thank you, John.

VAUSE: Cheers. President Trump's supporters say he tells it like it is, and they like that about him. But are the President's derogatory and downright nasty comments, having a corrosive effect on the country? I'll speak with presidential historian, Douglas Brinkley, in just a moment.


[00:35:00] VAUSE: In the year and 206 days of the chaotic Trump administration so far, there has been one constant, Donald Trump's ability to shock an outrage and to set a new low, it seems, in presidential behavior.

On Monday, critics and commentators declared a new low after the President snubbed Senator John McCain, refusing to say his name while signing a bill, specifically, named after McCain to honor his service. It was subtle by Trumpian standards, but still, disrespectful and mean.

But then came Tuesday, and that tweet, comparing former White House aide, Omarosa Manigault Newman, an African-American woman, to a dog. Not the first time this President has used dehumanizing language to describe minorities.

Whether it's calling African countries s-holes or references to female journalists and bleeding, whether he's belittling, demeaning, or bullying, this president's tone, language, and abuse, is unparalleled in U.S. history.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: She is a low I.Q. individual, Maxine Waters.

You also had people that were very fine people on both sides.

Look at my African-American over here. Look at him.

Wouldn't you love to see one of these NFL owners? When somebody disrespects our flag to say, get that son of a bitch off the field right now? Out. He's fired. He's fired!


VAUSE: But here's the question. Does it matter? Does character count? Does the abusive tone, the bigotry, the misogyny, the racism, does it all trickle down? CNN's Presidential Historian, Douglas Brinkley, is with us now from Austin, Texas. Douglas, we seem to talk about this fairly often, but it's good to see you.


VAUSE: OK. Well, other presidents have been known to use bad language, to fly off the handle. Nixon was famous for that. But, that was in private. Publicly, at least, they seemed to maintain a sense of dignity, of being above the fray. Does it matter that this president seems to want to get into the gutter and mix it up? BRINKLEY: Well, we are in a -- we have a problem in the United States. In many ways, President Trump is an existential threat to civility in the country. Every day, he hits a new low moment, trying to create disharmony, disunite the country.

You know, I have to pull back as a presidential historian and ask myself, have we had other presidents, say, since the civil war of the 1860s, when slavery was abolished, have other presidents been this bigoted? No.

The trophy goes to Donald Trump. He has a long and checkered career with racism and not just against African-Americans, but Mexican- Americans, people of color around the world. And you rightfully mentioned that he demeaned John McCain on the big day of his -- the defense bill with McCain's name on it and wouldn't even mention his name.

[00:40:11] This was a great Vietnam war hero akin to somebody like John Glenn, the Mercury astronaut or Audi Murphy during World War II. And, you know, the reason McCain hates Trump is that he wouldn't endorse him was because Donald Trump once took out a full page ad in the New York Daily News, falsely accusing African-American men of rape in central park.

So the history of bigotry with Donald Trump is long and hard, and that we'll have to see whether in the midterm elections, people, now that they really see those are his true colors, not just stunts, reject him and at least get a balance of power by getting Democrats in control of Congress.

VAUSE: If you've read some recent polling, it shows an overwhelming number of Americans believe it's important for their president to be civil. Clearly, that is not going to happen with this president. But I'm wondering is there a contagion here? Does the President's behavior impact the character of the nation both collectively and individually?

BRINKLEY: Well, you know, the United States can be brash. I mean we have Las Vegas as a symbol, and Donald Trump owns casinos and, you know, a lot of bling and neon signs and the like. We've never really had that experiment in the White House.

And Donald Trump calls himself a businessman, but he never had to answer to a corporate board, really. He's been his own boss, running a family business, more of a mobster kind of figure. But the idea was that he's not politically correct and he shoots from the hip, and that would be refreshing. But I think there's Trump fatigue setting in.

What seemed, at one point, to be just astoundingly bizarre is now just becoming repetition. And you're seeing people, you know, some Republicans slowly, very slowly -- history is going to mark how slow Republicans are to distance themselves from Donald Trump -- recognize that this is a president that may not be fit for command.

VAUSE: James Madison wrote back in one of the federalist papers, enlightened statesmen will not always be at the helm. You know, clearly, Donald Trump is in another category altogether.

But I'm wondering, you know, beyond the, sort of, the back and forth of verbal knife fight, you know, with people like Omarosa, is there a corrosive effect when he continually goes after institutions like the intelligence community, like the FBI, like the judiciary, like the media?

BRINLEY: There's no question about it. He's damaging the United States right now. It was on world display in Helsinki, when he praised Putin and their intelligence service, while dissing our own CIA, FBI, and law enforcement. This is a president that there's no bottom to. It just keeps going. Why, though? Why?

We see it in history. I mean, we have somebody with a dictatorial bent. The word, narcissism, has probably been used in the United States since the rise of Trump more than any other. But the question is, is this a mirror of ourselves? Is this what America's began? I think, not. I think in the end, Donald Trump will be seen as a weird aberration.

Even at this juncture with the economy doing very well in America, he only has about a 42 percent approval rating. And when it comes to the Mueller investigation, he's down into the 30s. Meaning, two-thirds of the people want Mueller to do his job and Donald Trump to testify before Mueller and, you know, give a deposition.

So, you know, I would tell people around the world, don't give up hope on the United States. We've had a string of great presidents. You think about people like FDR and Harry Truman and Eisenhower, Kennedy, Reagan, Obama.

And we've hit a bad apple here, and people are trying to make sense of it all. Part of it is, the lack of people engaged in Democratic process, not enough people voting, people just sick of politics. They don't like Democrats or Republicans.

So, in order for a democracy to work, the public has to be engaged more, and we'll see if this is a historic midterm in terms of turnout, coming up this November.

VAUSE: Yes. It is truly an interesting and bizarre time to be in the U.S. and to watch politics and everything that's happening, Douglas, as always, thank you, good to see you.

BRINKLEY: Hey, thank you.

VAUSE: Good to see you as well. And thank you for watching CNN NEWSROOM, live from Los Angeles. I'm John Vause. Stay with us. "WORLD SPORT" is up next. You're watching CNN.



VAUSE: You're watching CNN NEWSROOM, live from Los Angeles. Ahead this hour, rescue crews -- END