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Closing Arguments Heard in Manafort Trial; Trump Revoke Security Clearance of Former CIA Director; Interview With Rep. Joaquin Castro; Interview With Sen. Richard Blumenthal. Aired 6-7p ET

Aired August 15, 2018 - 18:00   ET

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


[18:00:00]

JIM SCIUTTO, CNN CORRESPONDENT: The Intelligence community, is that an abuse of power. We're getting new reaction this hour.

Changing the subject, there's a new sign tonight that White House officials waited for weeks to drop the Brennan bombshell. It wasn't specifically timed to distract from the president's ugly feud with a former aide, Omarosa.

Hitting Mueller, Rudy Giuliani is promising to unload like a ton of bricks if the Special Counsel does not wrap his Russia probe within the next few weeks. Is the president okay with his lawyer's threats?

And heading to the jury, the criminal trial of Paul Manafort is nearing an end, and a potentially dramatic verdict for or against the president's former campaign chairman. Will it also be a verdict on the Mueller investigation?

We want to welcome our viewers, here in the United States and around the world. Wolf Blitzer is off today, I am Jim Sciutto and you're in "The Situation Room."

ANNOUNCER: This is CNN breaking news.

SCIUTTO: And the breaking news, former CIA Director, John Brennan, said that American's should be, quote, "gravely worried about President Trump's unprecedented move to punish him for speaking out against the Administration," calling it an abuse of power.

Brennan and others in the Intel community are not buying that White House claimed that Mr. Trump acted to protect classified information. Sources tell me that the president did not bother to consult his own Director of National Intelligence about this.

I'm told the CIA caught off guard as well, suggesting that National Security was not foremost on the Commander in Chief's mind on this decision.

I'll get reaction from Senate Judiciary Committee member, Richard Blumenthal, and House Intelligence Committee member, Joaquin Castro, plus our correspondents and analysts also standing by.

First, the CNN White House correspondent, Kaitlan Collins. Kaitlan, the president threatened to do this weeks ago, why today?

KAITLANN COLLINS, CNN CORRESPONDENT: Jim, that's the big question on everyone's mind here and it's hard to ignore that this comes as the White House is trying and struggling to maintain the fallout from Omarosa's tell all book.

Adding to that mystery is a date on the statement from President Trump announcing he's revoking John Brennan's security clearance, and that date is July 26, three weeks ago. Yet, the White House just announced today that they are revoking this clearance, leading many to wonder if this a coincidence of just a distraction.

The White House, tonight, changing the subject Announcing President Trump has revoked former CIA Director, John Brennan's, security clearance in a highly unusual move.

(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I'd like to begin by reading a statement from the president. I've decided to revoke the security clearance of John Brennan, former Director of the Central Intelligence Agency.

(END VIDEO CLIP)

COLLINS: Sarah Sanders claiming Brennan leveraged his position as he criticized the Trump Administration.

(BEGIN VIDEO CLIP)

SANDERS: Mr. Brennan has recently leveraged his status as a former high ranking official, with access to highly sensitive information to make a series of unfounded and outrageous allegations, wild outbursts on the internet and television about this administration.

(END VIDEO CLIP)

COLLINS: But the White House was unable to site any evidence Brennan misused his Intelligence access or monetized his proximity to it. Asked if this is tied directly to his criticism of Trump, Sarah Sanders said this.

(BEGIN VIDEO CLIP)

SANDERS: Not at all. The president has a constitutional responsibility to protect classified information and who has access to it.

(END VIDEO CLIP)

COLLINS: Brennan responding to the White House bombshell today.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, FORMER DIRECTOR OF THE CIA: If security clearances are now going to become a political tool in the hand of individuals, such as Mr. Trump, that, I think, will send a very, very chilling message to individuals in the governments, currently, maybe former officials who still hold their clearances, as well as the future generation of Intelligence and National Security professionals.

(END VIDEO CLIP)

COLLINS: Yet, the White House is also reviewing clearances for nine other Democratic officials who have criticized the president, including;

(BEGIN VIDEO CLIP)

SANDERS: James Clapper, James Comey, Michael Hayden, Sally Yates, Susan Rice, Andrew McCabe, Peter Strzok, Lisa Page and Bruce Ohr.

(END VIDEO CLIP)

COLLINS: One name not on that list, former National Security Advisor, Mike Flynn, who pleaded guilty to lying to the FBI about his communications with Russian officials. Yet, the president never revoked his clearance. Asked why he's not on that list, the White House deflecting today.

(BEGIN VIDEO CLIP)

SANDERS: Again, certainly, we would look at those if we deemed it necessary. And we'll keep you posted if that list gets updated.

(END VIDEO CLIP)

COLLINS: The president's statement on clearances dated July, 26, nearly three weeks ago, but it was just announced today as the White House struggles to defend itself from a crisis of it's own making. The fallout from former staffer, Omarosa Manigault-Newman's tell all book.

The president remaining behind closed doors today, as he lashed out at the Special Counsel on Twitter, calling the investigation a rigged Russian witch hunt with no credibility.

That, as his lawyer, Rudy Giuliani, argues the facts are up to them.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, PRESIDENT TRUMP'S LAWYER: In the eye of the beholder.

CHRIS CUOMO, CNN HOST: No, facts are not in the eye of the beholder.

GIULIANI: Yes, it is.

[18:05:00]

CUOMO: You're always welcome here to argue the case.

(END VIDEO CLIP) COLLINS: Now Jim, it's unclear when the White House will announce whether or not it's decided to revoke the clearances of these other officials on this list. Potentially when there's another White House scandal, but I should note that we have not seen President Trump for two days now. He had no public events on his schedule yesterday or today, so we'll be waiting to see what he's doing tomorrow.

SCUITTO: Kaitlan Collins at the White House, thanks very much. Now, let's bring in CNN crime and justice reporter, Shimon Prokupecz, and CNN political correspondent, Sarah Murray.

Shimon, to be clear, security clearances can be revoked, but why would they normally be revoked? Would it be for speaking out against a president?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: No, normally in a normal world we would not even see anything like this. I mean, for the President of the United States to take such an unprecedented step to meddle in this kind of environment is completely, as we've been saying, just never happens.

Usually when you revoke people's security clearance, it has to do with perhaps maybe they've leaked what you believe is classified information or they may be under investigation, somehow compromised and therefore if they retain or get classified information, it could lead to something being compromised.

So, someone normally is compromised in some fashion and therefore they loose their clearance. In this case, it doesn't appear that John Brennan, certainly, the former CIA Director, did anything like that.

He has been outspoken, he has said things publically against the president, but there's no indication that he's ever discussed anything that's classified and certainly, I mean, he was at the center of this Russia investigation. He knows a lot of stuff, he knows information that has not been out there publically.

No indication he's ever tweeted anything or been out there publically saying anything about what he learned, really in the height and the heart -- during the heart of this investigation.

SCUITTO: You know, there is some irony here that a current divisor to the president, his son-in-law, Jared Kushner, who did do things that might prevent you getting a security clearance, like neglecting to include information on your security clearance form repeatedly. He's got a security clearance.

PROKUPECZ: Right, and well, there's also been some discussions or information indicating that he didn't get full security clearance; he may have some form of security clearance. But the, of course, because of some of these lingering issues, he does not have full security clearance.

And you're absolutely right, lying on forms or not telling -- not filling out forms correctly or not providing this kind of information that usually the FBI wants or the CIA wants, certainly would not -- would prevent you from getting the security clearance.

But it is very strange and something that just should not happen, right? We've had people telling us this, you've talked to people, I've talked to people. The concern here, obviously, Jim, is for people that are in the government or in the private sector now that have the security clearance. I mean for them, this is in many ways, how they make their money, right?

They use the security clearance to get information to help try and prevent cyber attacks, to try and prevent other kind of; it could even be terror attacks. So, the information is shared over classified information and for just the president to so easily remove someone is certainly -- is certainly concerning for people in all industries, in the private industry and people in the government.

SCIUTTO: Shimon, thank you. Turning now, Sara, to the Mueller probe, this was quite threat from the president's personal lawyer to say, I think his words were, come down like a ton of bricks on the Special Counsel if he doesn't deliver his report in the next two or three weeks. There is no such deadline. How alarming is that kind of threat from the president's attorney.

SARA MURRAY, CNN CORRESPONDENT: Well no, there is no such deadline. And you know with Rudy Giuliani, is it a threat? Is it a bunch of bluster? It's kind of hard to say.

He says so much on any given day and this is just the latest, here's what he had to day to Bloomberg, "If he," speaking of Mueller, "doesn't get it done in the next two or three weeks, we will just unload on him like a ton of bricks. Write the damn report so we can see it and rebut it." This Giuliani, you know, calling on Mueller to wrap up the investigation to put out his report on what he found and move on.

And one thing that is worth noting, is that our latest CNN polling does show that the American people, both sides of the aisle, do want to see Mueller wrap this up before the November mid-terms. Now, that's not coming up in the next two or three weeks. We know that the Mueller investigation is going on full steam ahead.

They have witnesses that they're planning on bringing before the Grand Jury in early September. So, there's very little indication that Rudy Giuliani is going to get his wish and we'll see how the president actually react to that.

SCIUTTO: Shimon Prokupecz, Sara Murray, thanks very much. Joining me now is Senator Richard Blumenthal, he's a Democrat who sits on the Judiciary and the Armed Services Committee. Thanks so much for taking the time to join us today.

SEN. RICHARD BLUMENTHAL, D-CT.: Thank you Jim.

SCIUTTO: Is this an abusive power by the president?

BLUMENTHAL: It is not only an abusive power, it is illegal.

[18:10:00] It's abhorrent to our values and our national interest because we need critics like John Brennan to speak truth to power based on their vast experience. Here's someone who has served both Republican and Democratic presidents for decades. But also to use this kind of punishment, to chill speak is a violation of the first amendment. It's the reason we have the first amendment.

This kind of criticism is core protected speech. When the founders of our great nation decided on the first amendment, it was because the king of England would retaliate against critics by punishing them. And so it is a clear violation, in my view, of the first amendment.

SCIUTTO: Why is it illegal for the president to do this? My understanding from speaking to intelligence officials is he does have authority to revoke anyone's security clearance.

BLUMENTHAL: He has the authority to do a lot of things, but not in a way that violates the law. And here what we see is -- from Sarah Huckabee Sanders' own mouth -- that the reason for it is supposedly baseless accusations against the president --

SCIUTTO: And that's against the law. How? What law would it be against?

BLUMENTHAL: It would be against the first amendment because accusations -- in this case they're far from baseless, but even if they were baseless, it is that kind of public discourse that is protected. And to punish or retaliate against somebody -- and this is clearly punishment, using this clearance as a cudgel to try to silence and suppress speech.

SCIUTTO: To jettison this kind of experience, in effect, from the intelligence community -- and the I.C. (ph) often draws on the experience of former officials. Is that a risk to U.S. national security?

BLUMENTHAL: It's certainly a risk to national security going beyond John Brennan. And this issue is way bigger than John Brennan or even the 10 to 15 people who may be threatened. It goes to all of our contractors who may be inclined to criticize certain policies, it goes to others outside the government, what kind of enemies list is the president going to create, are we back to the time of Nixon? Where does it end?

Because the president has such vast powers to retaliate directly or indirectly against anybody that criticizes him that it sets a very dangerous precedent.

SCIUTTO: What can the Senate do to check the president? If this is an abuse of power by the president and the Senate, Congress, co-equal branch with the president, the executive, what can and will the Senate do to check his power?

BLUMENTHAL: At the very least I think we ought to have hearings. I think that there is a very solid and sound justification for hearings right away, either before the Armed Services Committee or Intelligence Committee. But clearly this abuse of power, stifling and suppressing dissent in effort, probably, to distract or silence his critics -- he sees the Manafort trial reaching conclusion, probably not a good one for him, he sees his attorney bullying and blustering again, and he sees that the special counsel investigation is literally knocking at the White House door.

And I think that the Intelligence Committee or Armed Services Committee ought to have hearings and my Republican colleagues should speak up and stand up.

SCIUTTO: This is a president, as we know, skilled in the art of misdirection. Do you see this as a transparent attempt by the president to distract from? He's had a bad week on some fronts as his former campaign chairman might very well be found guilty of serious crimes. You have a former aide accusing him of using racial slurs in private conversations. Was this an effort to distract?

BLUMENTHAL: Whether it is an effort to distract or to discredit his critics, as he has demonstrated a clear want to do, it is illegal. And it's illegal because it's retaliation for protected speech -- criticism of him well-warranted. But even if it were not so well- warranted, it would still be improper and illegal. And abhorrent to our American values of treasuring the marketplace of ideas and free discourse.

SCIUTTO: You're accusing the president of breaking the law, of committing a crime by doing this.

BLUMENTHAL: Well, breaking the law is not necessarily committing a crime. Violating the first amendment can be, if done with criminal motive, a violation of law. But it certainly an abuse of his power under the first amendment that breaks the spirit and probably the letter of the first amendment. And the kind of discrediting of critics is also part of a pattern. We're seeing it from his sycophants and surrogates in the Congress directed at the special counsel, we're seeing it from Giuliani, directed again at the special counsel, threatening to come down on him like a ton of bricks, an effort to silence and gag and suppress.

SCIUTTO: We see a familiar pattern here where something like this happens and you will hear from Democratic lawmakers like yourself and virtual silence from the other side of the aisle.

[18:15:00]

BLUMENTHAL: -- threatening to come down on him like a ton of bricks, an effort to silence and gag and suppress.

SCIUTTO: We see a familiar pattern here where something like this happens and you will hear from Democratic lawmakers like yourself and virtual silence from the other side of the aisle. Today, did you get any quiet calls from your GOP colleagues? Did you approach any in the hallways who said to you yes, this goes too far or are they scared to challenge this president in public?

BLUMENTHAL: What they've demonstrated in the past is a clear apprehension if not downright fear of retaliation from the president. Political retaliation, which also is part of the pattern. I'm hoping that this kind of abuse of the presidential power will trigger a bipartisan reaction. We're just coming back now from a 10 -- or two week break -- 10 day, two week break.

I hope that at some point they will stand up and speak out because John Brennan is a patriot, someone who has literally sat at the president's elbow as he decided to go after Osama Bin Laden. He has a record of service that is pretty difficult to exceed. And I think we will all be lesser -- our nation will be lesser if we are using security clearance powers to suppress and stifle this kind of speech.

SCIUTTO: Isn't this the (ph) president putting his own petty insecurity or thin skin above the security of the country?

BLUMENTHAL: It's petty and political reprisal. And it certainly is against our national interest.

SCIUTTO: Senator Blumenthal, thanks very much for taking the time.

BLUMENTHAL: Thank you.

SCIUTTO: Appreciate it. I want to turn now to Congressman Joaquin Castro. He's a Democrat as well. He serves on the -- both the Intelligence and Foreign Affairs Committees of the House. Congressman Castro, thank you for joining us tonight.

REP. JOAQUIN CASTRO (D), TEXAS: Thanks for having me, Jim.

SCIUTTO: You may have heard your colleague from the other chamber, Senator Blumenthal called this an abuse of power -- an illegal abuse of power. Do you agree with that?

CASTRO: I definitely think it's an abuse of power and I think that there is an argument that it violates first amendment rights of John Brennan. The reason is because it's government taking action through the president against political speech and political speech is among the most protected speech under first amendment law. And so I suspect that all of us will find out whether that's the case or not. John Brennan could pursue an action and if he does, then a judge and court will make a ruling on that.

But putting that aside for a second, it's certainly an abuse of power. Look, let's be clear about this. John Brennan's problem is that he spoke truth to power to a thin-skinned president and that's why he lost his security clearance and that's why Jim Comey and others may lose their security clearances. And this is a very dangerous precedent to set by president of the United States.

You can imagine the situation 10 years from now where a Democratic president uses this to punish folks who are criticizing him from the right. And so I think that members of Congress from the Republican party -- of course Democrats but from the Republican party and others have to be worried about the action that the president is taking here.

SCIUTTO: Does this make the country less safe? CASTRO: It absolutely does. And because, you know, for all of the

outside politics that goes on, the intelligence committees in the House and Senate, traditionally, but certainly the professionals that work at the CIA and the FBI and the other intelligence agencies and the folks that worked there before usually will rely on each other and -- and speak with each other about important national security issues.

And having a security clearance would allow John Brennan, the former CIA director, obviously the -- who operated at the highest levels of American intelligence to communicate with folks and give advice to folks and consult with folks who are making some of the toughest decisions at those agency today. And now you've just taken away his ability to do that.

SCIUTTO: Let me ask you this. We noted that the official presidential statement revoking John Brennan's security clearance that was announced today was dated -- look at the date there -- July 26. Nearly three weeks ago. Now, the White House claims that this was a cut and paste error, but it does raise suspicions that this was on the shelf somewhere and -- and they brought it out today to distract from the many other issues, including the allegations from Omarosa as well. Do you see that?

CASTRO: Yes. I mean, this president -- one of the things he does better than anything else is basically plays the media game very well, both on social media and then in terms of effecting news coverage. So it wouldn't surprise me at all if they basically released this story today even though it'd been sitting for a week or two because there's bad news on the Paul Manafort front.

That trial is likely to wrap up. and I believe, as others do, that he will be convicted of a range of crimes, because Omarosa just came out and said the president is not mentally fit to lead the country and also that he used the N-word to describe African Americans, because the president just called Omarosa a dog on Twitter yesterday, and he's getting a lot of blow back not just from Democrats but Americans that are -- that are shocked that a president would speak that way about an American citizen.

[18:20:00]

So yes, it's been a very tough week for him but one of the things he is good at is basically trying to drive the media narrative.

SCIUTTO: He's trying to change the subject.

CASTRO: Yes, absolutely. Absolutely.

SCIUTTO: Another thing he is trying to change the subject from and another frequent target, of course, is the special counsel. And you had -- in a series of alarming threats and words, you had some -- some unusually alarming words from the president's lawyer, Rudy -- Rudy Giuliani, who said today if he, Robert Mueller, doesn't get it done in the next two or three weeks, we will just unload on him like a ton of bricks. Write the damn report so we can see it and rebut it. That -- that is the lawyer for the president of the United States

issuing a very clear threat, is it not, to the special counsel? Is that obstruction of justice?

CASTRO: Yes, I think that Rudy Giuliani is making those threats because right now he and Donald Trump feel the heat of the Mueller investigation and to some extent they feel powerless. They know that the Congress will likely come after the president if he fires Bob Mueller without cause. And there's a feeling of powerlessness there and so he's lashing out.

SCIUTTO: More than a year ago you came on this show -- speaking of the Russia investigation -- and predicted that people will go to jail as a result of these (ph) investigation. Do you believe that Paul Manafort is one of those people?

CASTRO: Yes, absolutely. I think that he will. From everything I can tell and keeping up with the coverage of the trial, I think Paul Manafort and others -- obviously folks have already made plea agreements and are cooperating with the prosecution. And I think that there's still more to come, too.

SCIUTTO: Congressman Joaquin Castro, thanks very much for joining us tonight.

CASTRO: Thank you.

SCIUTTO: Just ahead, more on the president's decision to revoke John Brennan's security clearance. Who might Mr. Trump target next? He has a long list. And Robert Mueller's prosecutors make their closing argument that Paul Manafort is a liar. Will jurors convict the former chairman of the Trump campaign?

(COMMERCIAL BREAK)

SCIUTTO: We're following multiple breaking stories, including what appears to be a brazen attempt by President Trump to punish one of his most outspoken critics and to change the subject as well from the drama surrounding his former aide, Omarosa. Tonight, Former CIA Director John Brennan is calling the president's decision to strip him of security clearance an abuse of power. I'm going to get reaction from CNN Senior Legal Analyst Preet Bharara who was fired as U.S. attorney by President Trump. I'm also going to ask him about the breaking news on the Paul Manafort trial.

But first, let's update. CNN's justice correspondent Jessica Schneider. She's out at the courthouse. So closing arguments today. Where does the Manafort case stand now?

JESSICA SCHNEIDER, JUSTICE CORRESPONDENT, CNN: Jim, this case is almost in the jury's hands. Judge T.S. Ellis spent about an hour and a half giving the jury their instructions, telling them what they can and can't consider. The judge here stressed that Paul Manafort has an absolute right under the constitution not to testify. And of course Paul Manafort did not take the stand. Judge Ellis also told the jury to disregard the defense team when they made implications that the special counsel prosecuted Paul Manafort for political purposes.

So there were a lot of strong words on all sides today as both sides made their closing arguments.

(BEGIN VIDEOTAPE)

SCHNEIDER: Prosecutors made their final pitch to the jury, focusing on two main themes. Paul Manafort is not above the law and he lied to the government, his bookkeepers and the banks. Lead prosecutor Greg Andres told the jury Mr. Manafort lied to keep more money when he had it and he lied to get more money when he didn't. This is a case about lies. Andres reminded the jury about the more than $60 million Manafort made from his lobbying work in Ukraine, that he allegedly hid in 31 foreign bank accounts.

Andres briefly alluded to Manafort's extravagant purchases, which the jury will get to see pictures of for the first time when they deliberate, including that $15,000 ostrich coat and $10,000 karaoke machine but pointed out we're not in the courtroom because Mr. Manafort is wealthy. It is because Mr. Manafort filed false tax returns. It is not a crime in this country to be wealthy. Andres laid out evidence to the jury that he says proves Manafort directed all aspects of his financial scheme and knew he was breaking the law.

Andres focused on the black and white proof rather than the two and a half day testimony of Rick Gates. Gates, Manafort's former deputy, pleaded guilty to lying to the FBI and turned against his former boss to cooperate with prosecutors. Andres saying that Gates wasn't the most important aspect of the case. Instead, quote, the star witness in this case is the documents.

But the prosecution did mention Gates' name several times, arguing while he was involved in Manafort's scheme, Gates' testimony backs up the testimony from Manafort's accountants and bookkeepers. See if it is consistent, they urged. But the defense dug in on Gates, making him part of the focus of their closing for a case in which they presented no evidence and no witnesses, including Manafort, who opted not to testify. The defense told the jury, sitting here today, Mr. Manafort is innocent.

[18:30:14] PAUL MANAFORT, FORMER CHAIRMAN OF TRUMP CAMPAIGN: Today at about 7:30, Mr. Trump will be officially the nominee of the Republican Party, so we're excited about that.

SCHNEIDER: And telling jurors about Manafort's work on the Trump campaign as well as other campaigns, noting how Manafort earned great respect for his work.

The defense attorney also accused Robert Mueller of selectively picking Manafort's financial records in order to concoct an elaborate fraud scheme, saying, "Clearly, their goal was to stack up the counts," and in the end urging jurors to hold the government to its burden of proving Manafort is guilty beyond a reasonable doubt.

(END VIDEOTAPE) SCHNEIDER: And Paul Manafort's defense attorney, Kevin Downing, spoke on the way out of court today. He says that Paul Manafort is very happy with the way things went in court today, very pleased with the fact that his defense team got to address the jury and make their case, that the prosecution has just not met their burden in this case.

So the jury has gotten its jury instructions. It has been dismissed for the day. They will reconvene tomorrow morning at 9:30, when they'll begin their deliberations in this very high-stakes case -- Jim.

SCIUTTO: No question. Jessica Schneider, thanks very much.

Let's bring in CNN senior legal analyst as well as former U.S. attorney Preet Bharara.

Preet, I do want your view of the Paul Manafort trial in a moment, but first, President Trump's decision to revoke the security clearance of the former director of the CIA, what concerns does this raise, in your view?

PREET BHARARA, CNN SENIOR LEGAL ANALYST: Well, I have the same concerns that a lot of other people that have already spoken on the show have that it's another example of the president being vindictive, petty, retributive against somebody not on the basis that has been put forward by the White House, which is, you know, a concern about national security, but rather because someone has been outspoken against him.

I don't know if it rises to the level, necessarily, of a violation of law, but it does violate, I think, the principles that the country is founded on that distinguishes us from banana republics, where people who have enormous power, namely the president of the United States, go about engaging in practices and decisions about personnel, and about security clearances and about all sorts of other things in a way that is, you know, neutral and based on what is good for the country, rather than on some, you know, angry moment, because somebody dares to say somebody against the president.

So, you know, the reporting I think that you mentioned earlier suggests that, like in a lot of other things, whether it's the pardon power, or terminating other folks, or taking away security clearance, that the president bypasses all the system, bypasses advice, doesn't let even the DNI know that he's doing something like this.

And I think that, ultimately, if the Senate or the House has the wherewithal and, you know, the integrity to look at these things, we'll learn a lot. And it may be true that people will say the president has the constitutional authority to do "X" or "Y," but it doesn't mean what he's doing is wise or smart or in the best interests of the country.

SCIUTTO: As you know, he's ignoring or not consulting folks that he appointed himself to these roles.

If I could turn to the Manafort trial now, closing arguments. As you listen to the accounts of those closing arguments, what stood out to you?

BHARARA: Well, the thing that you always see in criminal trials like this that have as the star witness, somebody who has committed the crime with the person who's on trial, with the defendant, the cooperating witness, there's always a back and forth. And what I was struck by was, you know, what you often see, but the -- I think the excellence with which Greg Andres, the prosecutor in the case, did the little dance that prosecutors do.

You know, first you talk about your cooperating witness, you solicit the evidence from the cooperating witness on the stand. But then, because that cooperating witness in this case, in particular, has lied, has pled guilty to lying to FBI agents. His sincerity and his honesty is in serious question. Then you get to the summation and you kind of distance from your own cooperative. Not to say that that person didn't tell the truth. But you say even if you don't believe or like the cooperating witness, look at all this other evidence. Look at all the documents. You have the basis to convict.

You want to see how the trial comes in before you figure out how much you need to rely on your cooperating witness at the end of the trial. And I thought he did that in a very deft way.

SCIUTTO: So of course, the special counsel continues his Russia investigation, separate from the financial crimes that Paul Manafort has been charged with in this case.

And you had a fairly disturbing attack on the special counsel, really a threat from the president's personal attorney, Rudy Giuliani. He said the following in interview today. "If he" -- Robert Mueller -- "doesn't get it done in the next two or three weeks, we will just unload on him like a ton of bricks. Write the damn report," he said, "so we can see it and rebut it."

Is that a threat? And when you have a public comment like that from the president's personal attorney, does that provide evidence of obstruction of justice?

BHARARA: It seems to be a weekly ritual where Giuliani and his client, the president, try to one up each other. The president says something crazy and, you know, borderline insane and mean and menacing and macho; and then Rudy Giuliani comes forward and does something that's even, I think, more outrageous and silly.

[18:35:08] I think mostly the statements of Giuliani that are made outside of court before there's any kind of proceeding, that are not occurring in the conference rooms of the special counsel's office should be ignored.

Is it a threat? I guess so. I don't know what it means. It sounds like a lot of bluster and machismo. It doesn't make a lot of sense and went out of style some time ago. Whether it's obstruction of justice, I don't think so. It's, you know, I think an outrageous statement by a lawyer who, once upon a time, had a good reputation and was fairly distinguished, you know, just foaming at the mouth. I don't think that helps him. I don't think it helps his client. and it certainly doesn't help with the negotiations with the special counsel.

SCIUTTO: So you see it as bluster. You don't see it as substantial; one, indicating the president's actual intentions, or two, intimidating?

BHARARA: It can become -- it can become such, depending on what future things happen. So if someone says -- these are hypotheticals. People, please don't write angry letters. If you say, "I'm going to come down on you like a ton of bricks," and then six weeks from now somebody does something outrageous like, you know, breaks into Mueller's office or commits some other further act or fires Bob Mueller, then the context of that statement has changed.

And so we'll know more about whether or not it's empty bluster or something that portends a thing that we should be much more concerned about. It depends on how this plays out.

SCIUTTO: In the on-again, off-again discussion of the president having an interview, being interviewed by the special counsel, Rudy Giuliani told my colleague Chris Cuomo that he thinks Mueller is waiting until after the Paul Manafort trial to continue further talks on an interview with President Trump.

Do you believe the president is actually seriously considering this or is he dragging it out?

BHARARA: I have now for some time believed that the president is not seriously considering talking to the Mueller team, that the lawyers keep playing these games, these rhetorical games, these tactical games. They seem silly after a while. And I'm not sure they should get a lot of attention and oxygen. I just don't think he's going to do it.

SCIUTTO: Preet Bharara, thanks very much.

BHARARA: Thank you.

SCIUTTO: The breaking news continues ahead. We're going to talk more about the president's motives for revoking John Brennan's security clearance, and why his claim of protecting national security does not seem to hold water.

And will there be any fallout from Rudy Giuliani's threats, as we were just discussing, to unload on Robert Mueller like a ton of bricks?

(COMMERCIAL BREAK)

[18:42:02] SCIUTTO: Welcome back. The breaking news tonight: President Trump revoking the security clearance of the man who used to lead the CIA and who also happens to be a chief critic of the president, John Brennan.

He's reacting tonight, tweeting, quote, "It should gravely worry all Americans, including intelligence professionals, about the cost of speaking out." Let's dig in deeper now with our correspondents and analysts, if I can. John Brennan was on the air a bit responding to this. Let's have a listen to how he explained his guess as to the president's motivations.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, FORMER CIA DIRECTOR (via phone): I do believe that Mr. Trump decided to take this action, as he's done with others, to try to intimidate and suppress any criticism of him or his administration. And revoking my security clearances is his way of trying to get back at me.

But I think I have tried to voice the concerns of millions of Americans about Mr. Trump's failures in terms of fulfilling the responsibilities of that sacred and solemn office of the presidency. And this is not going to deter me at all. I'm going to continue to speak out.

(END VIDEO CLIP)

SCIUTTO: Sara Murray, did the president buy not only revoking this security clearance but listing a whole host of other officials and critics that he says -- the White House says may be next, I mean, is this an enemies list?

MURRAY: I mean, it's hard to see it as anything but, you know, retribution, at least in the case of Brennan, and a warning shot to everyone else who is on that list. You know, it was really telling, I think, that Sarah Sanders was at the podium and she was asked to give specific examples, if you're going to make a move like this, you know, something that others in this field are saying is unprecedented, that past presidents haven't done, you'd better have a list of examples. And she wasn't able to do that.

We know this is a notoriously thin-skinned president. And if he is criticized, he wants to hit back. And today he had plenty of reason to also want to change the news cycle.

So unless the White House is going to show up tomorrow and give concrete examples as to why they think this was warranted and other experts who would agree with them, it's really difficult to see it as other than petty retribution.

SCIUTTO: And Sarah Sanders had quite a different explanation about security clearances in February, when the issue was Rob Porter, who was accused, of course, of spousal abuse. This is what she said at that time about the question of security clearances.

(BEGIN VIDEO CLIP)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: This is a process that isn't -- doesn't operate within the White House. It's handled by our law enforcement and intelligence community.

(END VIDEO CLIP) SCIUTTO: Jeffrey Toobin, it's the I.C.'s problem when it was a Rob Porter issue. But now with the president's critics, they since -- they make the case for some grave national security threat here.

TOOBIN: You know, I mean, we sort of wear ourselves out here, you know, being outraged. But I mean, this is outrageous.

There's no other reason for these people to lose their security clearances, if they even have them, and some of them apparently don't, except they criticized the president. That's it. That's the only reason. And that's not how the United States is supposed to work.

We're supposed to allow people to criticize the government without the government -- without government retribution. I mean, this is not complicated and it's not original.

Now, is it technically illegal? I don't know. There's not a lot of law on the subject. But, I mean, the idea that you can lose a security clearance solely because the president is doing a bad job is something unprecedented in modern American history.

SCIUTTO: So, against our values, Phil Mudd, says Jeffrey Toobin, how about the effect of national security. You're a former official. You maintain a security clearance and you are consulted at times on issues of importance to this country.

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Sure. Let me tell you how this works. As you mention, I still maintain a top secret clearance. Occasionally, people like me are approached. I have been approached to have high level, top secret consultations about issues like the changing role of counterterrorism. It's sometimes not that broad.

You can get into fairly specific conversations, for example, about new cases that people in the intelligence community are seeing. Someone will come in and brief you on those new cases with a senior official from the intelligence community in the room, and then you have a conversation at the top secret level about whether you have recommendations on how you would handle a new wave of terrorism cases from somebody like ISIS years ago.

So, you have people like me, I got 32 years of looking at this stuff, are asked all the time what we think about some really complex problems the intelligence community faces.

SCIUTTO: Sabrina, is it -- you know, we've seen something of a pattern when the White House is in uncomfortable territory, they bring out a series of officials to brief on something else. Here we were, what was a nasty situation with Omarosa yesterday, and lo and behold, this drops. Should we expect some message-making or misdirection in that?

SABRINA SIDDIQUI, POLITICAL REPORTER, THE GUARDIAN: Well, this is a White House that has been beset by controversy since the president took office. And we have seen time and again a pattern where their response has been to try and change the subject rather than to address the substance of the issue at hand. Now, in recent days, that's been some of the explosive claims that

Omarosa has made in her book, which they either declined to respond to or at times were caught contradicting themselves. That, of course, is yet another crisis of their own making.

But make no mistakes, Sarah Sanders walked out of the podium today and made this announcement because they wanted to talk about this. They wanted to move the conversation into another direction. But one thing that it does, it undermines their own rationale for revoking John Brennan's security clearance, tried to say it was in the interest of national security.

Well, if it was really such -- if he did pose such a threat to the public, why did you sit on this almost three weeks? I don't think there's any doubt that this is politically motivated, but again, they find themselves contradicting their own reasoning for taking the action they did.

SCIUTTO: Listen, you got the Omarosa accusations, talk of other tapes, you got Paul Manafort possibly getting a verdict in the next 24 to 48 hours. We don't know.

But, Sara Murray, I mean, it's -- this is a decision of consequence in the midst of that. I mean, we can talk about window dressing and, you know, misdirection, but this is a guy that served in the CIA 25 years.

MURRAY: Right. It is a decision of consequence. You know, it means that these will not be as readily accessible to the extent that the White House was using them in the first place. But it also I think just sort of gives you a window into how far the president is willing to go in terms of his pettiness, in terms of retribution. You know, I think as other folks pointed out, it is alarming to see the extent that this president is willing to go just to try to silence his critics.

It's not something we're used to seeing in the United States of America because frankly most people know that if you're going to be president, this comes with the territory. You're going to get criticized.

SCIUTTO: Phil Mudd, how are folks in the agencies reacting tonight? These are folks they worked under many years. A reminder, all of the officials on the list that Sarah Sanders went through, they served Democratic and Republican presidents. And I know that in the buildings, hallways used to walk, people pride themselves on serving the agency and institution, not any party.

MUDD: There's a couple -- that's a great question. There's a couple of angles on that. The first is that depends a lot on leadership.

We talked about Gina Haspel before. She's a relatively new CIA director. She's very well-regarded at the CIA. She's going to be viewed by the work force as the one in some ways they answer to, and because she's so talented, I think they'll continue to work for her.

Look also at the mission focus they've got -- North Korea, Iran, the Middle East, proliferation around the world, drugs, issues that are of importance to America. They've got to focus on everyday stuff, and a lot of them aren't -- they are thinking about the president after 5:00, but they have work before that.

Last thing I'm going to say is people like me are looking at this, and I know you've heard this a hundred times a day.

[18:50:01] You think the president is going to intimidate us because of a threat that we can't go to an unpaid meeting on something that bored us for 25 years in the business? Are you kidding me?

Thank God I don't have to go anymore consultations if I get my security clearance revoked. They're all unpaid. Big deal.

SCIUTTO: Jeffrey Toobin, final thought.

TOOBIN: I mean, more of the same. I mean, this is just an example of how this president has not necessarily violated laws but day after day, he has violated the norms, the procedures, the traditions of how the United States of America is supposed to work. That's going to be his legacy, and that's what we're going to be talking about ten years from now, 20 years from now.

SCIUTTO: Folks, thanks very much. Appreciate it as always. Stand by.

Breaking news continuing ahead with more on President Trump's unprecedented use of his authority revoking former CIA Director John Brennan's security clearance.

Plus, did the Trump foundation illegally use donation to boost the Trump campaign? CNN investigates and that's next.

(COMMERCIAL BREAK)

[18:55:51] SCIUTTO: There are new allegations tonight that the Trump Foundation may have broken federal tax laws by using donated funds to boost the Trump presidential campaign.

CNN senior investigative correspondent Drew Griffin has been working the story for us.

Drew, what are you finding out?

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Jim, this all stems from the lawsuit over Trump's private foundation. More than just sloppy record keeping, say critics, but a clear case of violating IRS rules.

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): On January 28th, 2016, right in the middle of the Iowa caucus campaigning --

UNIDENTIFIED FEMALE: Donald Trump has chosen not to attend. GRIFFIN: Donald Trump blew off the Republican debate, and held a

well-publicized fundraiser for veterans. He raised nearly $6 million, about half it was paid directly to charities. $2.8 million went to the Trump Foundation.

And within days, Donald Trump was at Iowa campaign rallies giving that money away.

(CHEERS)

GRIFFIN: Good deeds? Perhaps. But e-mails and records uncovered by the New York attorney general show behind the scenes then campaign manager Corey Lewandowski was making it clear good deeds would be used for political gain.

The day after the fundraiser, Lewandowski writes to the Trump Organization's chief financial officer Allen Weisselberg. Is there any way we can make some disbursements this week while in Iowa? Weisselberg writes back, put together a list of the Iowa veterans groups you have in mind along with dollar amounts.

According to the New York attorney general's office, using the donated money to boost Trump's campaign violates IRS nonprofit rules which prohibit making expenditures to influence the outcome of an election. And in a letter to the IRS commissioner, David Kautter, the attorney general's office passed on its evidence for a possible IRS investigation to determine if Donald Trump's foundation and Donald Trump himself may have broken federal tax laws.

Marc Owens ran the nonprofit division of the IRS for ten years.

MARC OWENS, FORMER DIRECTOR, EXEMPT ORGANIZATIONS DIVISION, IRS: The evidence that the New York attorney general has collected suggests very strongly and in fact I would say close to conclusively that the Donald Trump Foundation was used to support, to facilitate Donald Trump's political campaign.

GRIFFIN: The attorney general's complaint also lists other examples of Trump Foundation self dealing, including paying off a $100,000 lawsuit settlement with a notation in the president's own handwriting. But it is the veteran's charity stunt that seems the most egregious.

Daniel Borocoff is head of Charity Watch.

DANIEL BOROCOFF, PRESIDENT, CHARITYWATCH: Donald Trump basically handed over the keys to his charitable foundation to his political campaign.

GRIFFIN: Trump Foundation attorney Alan Futerfas did not address a possible IRS case, and instead focused on what he believes is a politically motivated, unfounded prosecution by New York's attorney general.

In a statement, he tells CNN the president's foundation has raised and donated over $19 million to charitable causes, operated with little to no expenses, and states virtually every penny raised by the Trump Foundation went exactly where it should, to support those most in need. As for politics, we have been unable to find a single example where an attorney general, New York or otherwise, brought a case involving a similar set of facts.

Former IRS official Owens says none of that matters to the IRS.

OWENS: The assets of the foundation were allowed to be used to support his political campaign and that is all that is needed.

(END VIDEOTAPE)

GRIFFIN: The big question, though, is the IRS under this administration even considering an investigation? The IRS simply will not comment. In the meantime, Trump's attorneys will fight the New York attorney general case vigorously. They file their response to the suit later this month.

SCIUTTO: I'm sure they will.

Drew Griffin, great reporting. Thanks very much.

I'm Jim Sciutto. Thanks so much for watching us tonight.

"ERIN BURNETT OUTFRONT" starts right now.