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EARLY START

White House Short on Answers with Michael Cohen's Guilty Plea; John Bolton Meets with Russian Counterpart in Geneva; Trump Pushes South Africa Conspiracy Theory. Aired 4:30-5a ET

Aired August 23, 2018 - 04:30   ET

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


(BEGIN VIDEO CLIP)

[04:31:16] AINSLEY EARHARDT, CO-HOST, "FOX AND FRIENDS": Did you know about the payments?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Later on I knew.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: But he's on tape discussing how to make one of the payments with Michael Cohen.

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: The president did nothing wrong.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: The contradictions are clear. The White House offering few answers on the Michael Cohen and Paul Manafort convictions.

DAVE BRIGGS, CNN ANCHOR: Could taxpayer dollars be used to arm teachers? The Education secretary is reportedly eyeing a way to make that happen.

ROMANS: Hurricane Lane on final approach this moment to Hawaii. The category four storm packing damaging winds. People are warned to stock up for weeks.

Welcome back to EARLY START where it is -- 10:30 in the evening in Hawaii. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. We'll have the forecast, projections for Lane straight ahead. 4:31 Eastern Time.

We start with the White House struggling to contain the fallout from Michael Cohen's guilty plea. President Trump turning to a familiar tactic -- personal attacks. On Tuesday Cohen implicated Trump for coordinating hush payments to two women to sway an election. Yesterday in an interview with FOX News the president tried to minimize Cohen's role in his life and business.

(BEGIN VIDEO CLIP)

TRUMP: Well, he was a lawyer for me for -- one of many, you know, they always say the lawyer and then they'd like to add the fixer. Well, I don't know if he was a fixer. And I don't know where that term came from. But he's been a lawyer for me. Didn't do big deals. Small deals. Not somebody that was with me that much. You know, they make it sound like I didn't live without him. I understood Michael Cohen very well. He -- well, it turned out he wasn't a very good lawyer, frankly.

(END VIDEO CLIP)

ROMANS: Just a reminder, here's what Trump said about Michael Cohen over the last few months before Cohen turned on his old boss.

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TRUMP: One of my personal attorneys, good man. I can tell you, he's a good guy. I always liked Michael. I haven't spoken to Michael in a long time.

UNIDENTIFIED REPORTER: Is he still your lawyer?

TRUMP: No, he's not my lawyer. But --

UNIDENTIFIED REPORTER: Your personal lawyer and not anymore?

TRUMP: But I've always liked Michael.

UNIDENTIFIED REPORTER: Are you --

TRUMP: And he's a good person.

(END VIDEO CLIP)

ROMANS: Now the White House is short on answers as the contradictions mount. The president himself seems unfazed, tweeting at 1:10 a.m., just three hours ago, "No collusion. Rigged witch hunt."

White House correspondent Kaitlan Collins has more.

COLLINS: Christine and Dave, the president is now facing enormous political and potentially legal pressure. And in the middle of that, he is trying to change his story on what he knew about the payments that Michael Cohen made to those two women who allege they had an affair with Trump. What he knew and when.

The president saying in an interview with FOX News that he did not know about the payments until later on. Though he didn't specify a date.

(BEGIN VIDEO CLIP)

EARHARDT: Did you know about the payments?

TRUMP: Later on I knew. Later on. But you have to understand, Ainsley, what he did and they were not taken out of campaign finance. That's a big thing. That's a much bigger thing. Did they come out of the campaign? They didn't come out of the campaign. They came from me. (END VIDEO CLIP)

COLLINS: That would seem to contradict a tape released by Michael Cohen last month that shows him discussing with the president how to make a payment to one of the women before that payment was made.

(BEGIN VIDEO CLIP)

MICHAEL COHEN, FORMER TRUMP LAWYER: When it comes time for the financing which will be --

TRUMP: What financing?

COHEN: We'll have to pay --

TRUMP: Pay with cash?

COHEN: No, no, no. I got it. No, no, no.

(END VIDEO CLIP)

COLLINS: Now as these questions come, the White House is struggling to mount a defense here.

(BEGIN VIDEO CLIP)

COLLINS: The president said he found out about those payments that Michael Cohen made later on. But he's on tape discussing how to make one of the payments with Michael Cohen. So before the payment was made. So how do you explain that?

SANDERS: Once again, I've commented on this pretty extensively. What I can tell you about this is that the president did nothing wrong. There are no charges against him. There is no collusion.

UNIDENTIFIED REPORTER: You stand here and say the president has never lied to the American people?

SANDERS: I think that's a ridiculous accusation.

(END VIDEO CLIP)

[04:35:04] COLLINS: What we will see play out over the next few days is them trying to discredit Michael Cohen, paint him as a liar, someone who isn't a credible figure in this situation. So that is likely to only raise even more questions about why the president surrounded himself with Cohen in the first place -- Christine and Dave.

BRIGGS: Indeed. Kaitlan Collins, thanks.

One of the jurors in Paul Manafort's bank and tax fraud trial says a lone holdout prevented them from convicting the former Trump campaign chairman on all 18 counts. Paula Duncan telling FOX News jurors agreed to disregard the testimony of Manafort's former right hand man Rick Gates because he took a plea deal. Instead they relied on documents to reach eight guilty verdicts.

ROMANS: When the president was asked about a pardon for Manafort, he side-stepped the question.

(BEGIN VIDEO CLIP)

TRUMP: I have great respect for what he's done in terms of what he's gone through. You know, he worked for Ronald Reagan for years. He worked for Bob Dole. He worked -- I guess his firm worked for McCain. He worked for many, many people, many, many years. And I would say, what he did, some of the charges they threw against him, every consultant, every lobbyist in Washington probably does.

(END VIDEO CLIP)

ROMANS: That means they're going to be busy at the IRS, I guess. Right?

"The New York Times" reports the president and his attorney Rudy Giuliani have discussed the potential political repercussions of pardoning Manafort. Giuliani claims Mr. Trump is not considering it.

BRIGGS: National Security adviser John Bolton meeting with his Russian counterpart this morning in Geneva. The meeting, a follow-up to the recent Helsinki summit.

CNN's Fred Pleitgen live in Moscow with the latest.

Fred, good morning.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Dave. Yes, and one of the things, apparently, according to John Bolton, that is going to be talked about is election meddling, of course not just in the 2016 presidential election but of course also in the upcoming midterms. That's something that the Russians will be very interested to speak about as well.

The Russians, for their part, have been saying or at least a lot less specific, they've been saying that irritants in the relations between the United States and Russia are something that is going to be discussed.

One of these things that they've been really interested as well, Dave, is the president saying just a couple of weeks ago that he would be willing to think about sanctions relief for Russia if Russia works together with the United States on issues like Syria and Ukraine.

Now the Russians, of course, were quite angry when John Bolton said yesterday Russians that he believes that the Russians are somewhat stuck in Syria and are looking to the U.S. to get aide, help for instance on reconstruction. The Russians are saying that is absolutely not the case. They say they want to work together with the United States. But having been in Syria last week with the Russians I can tell you that the Russians certainly believe that they are the ones who are going to be in the lead on that topic -- Dave.

BRIGGS: OK. We'll have David Sanger from the "New York Times" to talk more about election interference next hour.

Fred, thank you.

So you've got a pair of convictions and you've got ongoing election interference but President Trump's reelection team focused on the national anthem and the NFL. An e-mail sent by the make Trump Make America Great Again Committee has initiated a petition demanding ESPN show pregame performances of the national anthem at NFL games.

The president describing the network is, quote, "spineless" for its decision not to broadcast the anthem this season. He says, "If America is too offensive for anyone in our country, then what are they doing in America?"

The president has targeted NFL players for kneeling during the "Star Spangled Banner." ESPN and other networks have not generally aired the anthem, often showing commercials instead.

ROMANS: All right. The "New York Times," the "New York Times" reports Education Secretary Betsy DeVos is considering an unprecedented move allowing states to use federal funds to buy firearms for teachers. It would reverse a longstanding government policy not to pay to outfit schools with weapons. DeVos is said to be eyeing a loophole in a law intended to increase academic opportunities. That law does not bar weapons purchases.

BRIGGS: In March, Congress passed a school safety bill that allocated $50 million a year to local school districts, but expressly prohibited the use of the money for firearms. An Education Department spokesman says they are constantly considering and evaluating policy issues.

ROMANS: All right. Hurricane Lane barreling toward Hawaii with category four storm packing sustained winds of 150 miles per hour. The storm's center could make landfall as it moves past the islands today through Saturday. It should draw close enough to the islands to bring destructive winds and rain.

A hurricane warning issued for the island of Oahu, Hawaii and Maui already under warnings. The state's governor David Ige urging residents to stock up.

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DAVID IGE, HAWAII GOVERNOR: Be prepared to shelter in place, 14 days of food and supplies and water, medicine, other necessities that they would have.

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BRIGGS: People are heeding the warning. You can see here, bread and water aisles at this supermarket are bare.

[04:40:06] Hawaii officials urging people to shelter in place. Right now no evacuation orders have been issued. Government officials will be closed today and tomorrow. All public and charter schools also closed. President Trump has approved the governor's request for a disaster declaration to get federal assistance in place.

Tracking the latest here's Pedram Javaheri.

PEDRAM JAVAHERI, AMS METEOROLOGIST: Christine and Dave, good morning to you both. Very impressive set up here and depiction on satellite imagery with Hurricane Lane. A menacing storm certainly as you can see it from space and then you look at the satellite imagery, a number associated with this feature just as impressive.

Still a category four, still very symmetrical, very organized. Pushing in just a few hundred miles south of the big island. And the track of the system still migrating to the north and eventually a northwest turn. But just looking at this in the sheer numbers of this, only two hurricanes have made landfall on Hawaii since 1959, Iniki in '92 and Dot in '59, and they were both on the island of Kauai, and this system itself models right now, take it to the north by Friday afternoon.

A westerly shift, hopefully that pushes it away from areas around Honolulu. But you notice the cone still brings in Oahu into this and certainly when you break down the model-by-model guidance, we do see a lot of variability in this. So certainly a lot can and will change with this forecast. But we do know what will not change is the amount of rainfall that is slated here that will easily exceed 15 to 20 inches in a few spots and that cell is going to be very dangerous over the next couple of days.

ROMANS: All right.

BRIGGS: All right. Pedram, thank you.

Some major college football news ahead. Urban Meyer, the head coach at Ohio State, will get to keep his job but suspended. We'll tell you why. And what about his apology? Next.

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[04:46:02] ROMANS: All right. Home sales falling again. This is the longest decline now in home sales in five years. In July, existing home sales dropped for the fourth month in a row. The problem here is tight supply. There simply is a shortage of homes. And there are not enough new homes being built to make up the difference. That's driving prices to record highs. And that locks out many potential homebuyers, especially first-time homebuyers.

Lower priced homes listed at $100,000 or less, those led the sales decline, falling nearly 11 percent. Rising prices and some higher mortgage rates are pricing out many middle class buyers. But none of this is hurting wealthy homebuyers. Homes priced at $1 million or more, those sales rose 16 percent. In fact one of the nation's largest builders of high end homes, Toll Brothers, had a stellar second quarter. Demand for expensive homes with high boosting Toll Brothers' profits by 30 percent.

If you're a first-time homebuyer, you can't find a house that's in your price range. Everything is too expensive and they're not moving. If you're wealthy, boy, they're moving fast.

BRIGGS: The deductions in the blue states, New York, Connecticut, New Jersey and California --

ROMANS: That's right.

BRIGGS: With no impact.

ROMANS: Has gone away. Not yet. Not yet. Interesting.

BRIGGS: Not yet on the high-end market.

OK. It turns out the latest reported hack on the Democratic National Committee wasn't a hack at all. DNC officials contacted the FBI on Wednesday one day after discovering what they believe was an attempted breach of their voter database. It turned out to be an unauthorized simulated phishing test. The DNC would not say who commissioned the simulation. A chief security officer says the incident is further proof vigilance is needed in the light of potential attacks.

ROMANS: All right. It turns out the latest reported hack on the -- we just read this story.

(LAUGHTER)

ROMANS: There we go. Thank you so much. All right. This, a more serious and troubling story. The Iowa dairy farm that employed the suspect in Mollie Tibbetts' killing says he got the job using a false ID. Officials say in fact 24-year-old Cristhian Rivera came to the U.S. illegally from Mexico. Officials at Yarrabee Farm say Rivera worked there for years after they performed their standard hiring procedure requiring a photo ID and Social Security card. But they say they made a mistake in the process. The farm now says they thought Social Security employment verification and Homeland Security's e- Verify system are one and the same. They are not.

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DANE LANG, CO-OWNER AND MANAGER OF YARRABEE FARMS: All of us are saddened by the tragic death of Mollie and the realization that one of our coworkers was involved.

(END VIDEO CLIP)

ROMANS: Just an hour earlier, Rivera was arraigned for first-degree murder in Tibbetts' death. His bond set at $5 million. Last night members of the University of Iowa community gathered for a vigil to remember Tibbetts. Her family released a statement to supporters. "Thank you for the outpouring of love and support that has been shared in Mollie's name. We remain forever grateful."

Indicted Congressman Duncan Hunter is denying he and his wife misused campaign funds. The California Republican is accused of using donations to pay for items like luxury vacations, kids' school lunches and delinquent family dental bills. All of this are contained in the indictment here that he and his wife were together on this scam. Duncan Hunter says that he is innocent, that he and his wife will fight this.

Here's what Duncan Hunter says.

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REP. DUNCAN HUNTER (R), CALIFORNIA: This is par for the course. This is modern politics and modern media mixed in with law enforcement that has a political agenda. This is the new Department of Justice. This is the Democrats' arm of law enforcement. That's what's happening right now. It's happening with Trump and it's happening with me. And we're going to fight through it and win. And the people will get to vote in November.

(END VIDEO CLIP)

ROMANS: All right. A defiant Congressman Duncan Hunter of California.

BRIGGS: Yes. He'll be arraigned later today in San Diego but again remains on the ballot.

ROMANS: Yes.

BRIGGS: So we'll see what the impact is on that election ahead.

[04:50:01] All right. EARLY START will be back. We will update you on that Urban Meyer news. The head coach of Ohio State suspended. We'll tell you why.

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BRIGGS: Ohio State University suspending football coach Urban Meyer for three games without pay. The school investigated Meyer's response to spousal abuse allegations against former assistant coach Zach Smith. It now says Meyer did not cover up the alleged domestic abuse but did fail to take sufficient management action.

[04:55:07] Meyer offered a public apology somewhat yesterday.

(BEGIN VIDEO CLIP)

URBAN MEYER, OHIO STATE UNIVERSITY FOOTBALL COACH: I'm fully aware that I'm ultimately responsibility for the situation that has harmed the university as a whole and our Department Athletic Center and football program.

I want to apologize to Buckeye Nation. I followed my heart and not my head. I fell short in pursuing full information because at each juncture I gave Zach Smith the benefit of the doubt.

(END VIDEO CLIP)

BRIGGS: So if you're keeping track, there were three apologies to Buckeye Nation, zero to Courtney Smith who was abused in that apology. The athletic director Gene Smith suspended without pay from August 31st to September 16th. Zach Smith's ex-wife Courtney Smith accused him of abuse including domestic violence in 2009 and 2015. He was fired July 23rd. Zach Smith's attorney says his client should not have married Courtney Smith, adding, quote, "vengeance against her ex- husband resulted in collateral damage to Urban Meyer, Gene Smith and OSU."

Back to politics now, President Trump pushing another conspiracy theory, this one out of South Africa. He's asking for an official State Department investigation because, quote, "South African government is now seizing land from white farmers." That came 90 minutes after a FOX News segment on the topic.

David McKenzie is live in Johannesburg to explain what the heck is going on.

David, good morning.

DAVID MCKENZIE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Dave. Let's start with the fact check on that FOX report and the subsequent tweet from President Trump. No, farms are not being seized in the manner they describe in South Africa. And no, the constitution hasn't been changed. There is a discussion about that. While farm murders in South Africa is something that is a real hot-button topic for including white nationalists globally.

But most studies, they have said that farm murders are actually down historically from the last few years. So the reason this is more serious than possibly just talking about a conspiracy theory as you suggest, it is also instructing the State Department to look into this which has created a firestorm here in South Africa. Pretty quickly, the South Africa president tweeting out this, "South Africa totally rejects this narrow perception which only seeks to divide our nation and remind us of a colonial past. Yes, there are land issues in South Africa. The racist past in this country has been a difficult issue to get past and most of the land is owned and farmed by white South Africans."

So there is a move to try and address that past. There has been for more than 20 years. I'm sure the State Department and the embassy here is scrambling to try and defend or at least explain Donald Trump's statements on Twitter. And it will be an ongoing controversy here that he has weighed into -- Dave, Christine.

BRIGGS: That is a head scratcher. David McKenzie, live for us in Johannesburg. Thank you, sir.

ROMANS: Conspiracy theories at 1600 Pennsylvania Avenue.

Let's get a check on CNN Money this morning. Global stocks mixed right now as the U.S. and China trade war heats up. At midnight, the U.S. began collecting 25 percent tariffs on another $16 billion in Chinese goods, including products that target China's "Made in 2025" initiative. That's Beijing's plan to dominate high tech industries. Beijing immediately struck back dollar-for-dollar.

Wall Street closed mixed yesterday. But there was some big milestone yesterday. The bull market now the longest ever. The run began in March 2009 during the dark days of the financial crisis. Since then the S&P 500 has quadrupled in value. The dollar has added 19,000 points. 19,000.

The Federal Reserve issuing a dire warning about trade. Escalating tariffs pose a big threat to the U.S. economy and a prolonged dispute could hurt growth. That's from the minutes of the fed's most recent meeting. The Central Bank also plans to keep raising interest rates. The next hike will likely be next month whether President Trump likes it or not. Trump told Reuters he's, quote, "not thrilled" that Fed chair Jerome Powell is raising interest rates. Trump appointed Powell last year. The Fed has been carefully raising rates to keep the economy from overheating.

Target just had its best quarter in more than a decade. Same-store sales rose 6.5 percent. The fastest growth since 2005. Target credits its new digital strategy and store redesign. A strong economy sparking a retail boom, consumers are spending. Boosting sales at stores like Home Depot and Nordstrom. Last week Walmart reported its best U.S. sales growth in more than a decade as well.

Something is going right with the consumer. And the Target CEO yesterday said this is the best consumer environment he has seen in his career.

BRIGGS: Wow. No indication we are slowing down.

EARLY START continues right now. We're not slowing down, we'll have the projections for Hurricane Lane tracking towards Hawaii.

(BEGIN VIDEO CLIP)

AINSLEY EARHARDT, CO-HOST, "FOX AND FRIENDS": Did you know about the payments?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Later on I knew.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: But he's on tape discussing how to make one of the payments with Michael Cohen.

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: The president did nothing wrong.

(END VIDEO CLIP)

ROMANS: The contradictions are clear. The White House --

(END)