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Clinton And Kaine Release Tax Returns; Clintons Tax Returns Public Now From 1977; Clinton Widens Lead In Key Swing States; Trump Continues To State He Won't Release Taxes While Under Audit; Intel Community Briefed On Hacks Of Democrats E-Mails. Trump Calls Obama Founder of ISIS. Aired 1:00-1:30p ET

Aired August 12, 2016 - 13:00   ET

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


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WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 8:00 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us.

We're following breaking news right now. We're getting our first look at Hillary Clinton's tax returns for last year. The Democratic presidential candidate and her running mate are trying to put pressure on the Republican presidential nominee, Donald Trump, to release his tax returns. Trump has said he will not release his tax returns while he is still under IRS audit.

Joining us now, our CNN Investigations Correspondent Chris Frates and joining us from New York, CNN's Business Correspondent Alison Kosik. Chris, what's in the tax returns as far as Hillary Clinton is concerned. What's the significance of their release today?

CHRIS FRATES, CNN INVESTIGATIONS CORRESPONDENT: Yes. Well, the significance, of course, Wolf, is that Hillary Clinton trying put pressure on Donald Trump and continue that drip, drip, drip, to try to force him to put out some tax statements. He's yet to do that.

And let's take a look and break down the numbers that she put out today. In 2015, so last year, she had an income of about $10.6 million. She paid about $3.2 million in taxes and had a federal tax rate of about 31 percent. She paid about a third of her income to the federal government.

Now, it's important to point out here that the Clinton campaign puts that affective federal tax rate at about 34 percent. We estimate it a little bit lower at 31 percent because we don't take into effect those payroll taxes. But, still, any way you cut it, about a third of her income. And that's consistent to what've seen in years past, in particular last year.

Now, last year, if you take a look at what she paid in income. About $28 million in 2014. So, we've seen that in the fact she's gone on the campaign trail. She doesn't have a book out. She's not doing the paid speeches. Most of the speeches she's doing now are for free or for fundraisers to help her campaign. So, we've seen less than half of the income in 2015 that she brought in in 2014. Now, also important to point out that last summer, Hillary Clinton put about eight years of tax returns out. That filled in the gaps while she served from secretary of state and while she was a private citizen. And now, she has put out -- the Clinton family has out there tax returns from 1977. So, any citizen, any voter can go all the way back to 1977 to check and see how the Clintons did, what kind of charitable contributions, what did they pay in taxes and how much money did they make? And she's really trying to force Donald Trump into releasing some taxes.

In fact, there was a Web video her campaign put out today with some Republicans, pretty prominent Republicans actually, Wolf, Mitch McConnell, Mitt Romney, making the case that, essentially, Donald Trump should put out his tax returns and questioning why he hasn't. Is it because he didn't make as much money as he said? Did he not give as much money to charities and veterans as he said he did? The Clinton campaign really going to hit this theme of transparency and say that Donald Trump should put out his tax returns so voters can see for themselves -- Wolf.

BLITZER: Alison, they filed jointly, Bill and Hillary Clinton. So, most of this income, I take it, from last year was income that he generated, largely the result of his paid speeches. She did very of that because she was already running for president. Is that right?

ALISON KOSIK, CNN CORRESPONDENT: That's right. But also, if you look really deep in the pages, as we've been doing, of the return here. We also see that Bill Clinton's speaking fees also dropped in the -- by the millions as well, $5 million, actually. That includes his consulting fees as well.

There was also a drop in book royalties for Bill Clinton. But, interestingly enough, Hillary Clinton saw an up-tick in her royalties last year.

It is pretty stunning, though, to see the huge difference in income from 2014 to 2015. The income in 2015, 10.6 percent the income in 2014, the joint income, at about $27 million. But still, even with the drop in speaking fees that they got in 2015, speeches actually account for 60 percent of the income for the Clintons.

I do want to mention one other thing, charities. And it goes without saying that if you're going to make less money, you're going to certainly donate less to charity. So, we saw a donation of $1 million in charities versus $3 million to the Clinton family foundation. So, that $1 million happening in 2015, $42,000 going to other charities in 2015.

So, if you look at last year, almost 10 percent of gross income was donated to charities -- Wolf.

[13:05:00] BLITZER: All right, Alison Kosik, Chris Frates, guys, thanks very much.

Let's bring in our panel. Our Chief Political Correspondent Dana Bash is with us, CNN Chief Political Analyst Gloria Borger and "Washington Post" reporter David Nakamura.

I want to get back to the tax returns in a moment but we're also getting some new poll numbers, Dana, in key battleground states that are very significant.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Significant and not good news for Donald Trump. Let's start with North Carolina. Right now, this poll shows that Hillary Clinton is at 48 percent, Donald Trump at 39 percent. We have four states.

But I want to linger on this for one second just to give you a little bit more emphasis on the significance. North Carolina, over the past half century, has gone Republican except two times. And once was in 2008 for Barack Obama and then it flipped back to Republican in 2012. So, that gives you a sense of how significant that is.

And let's go through the rest. Colorado, Hillary Clinton, 46 percent; Donald Trump, 32 percent. Colorado has actually been trending Democratic in the past couple of election cycles. And then, let's go to Florida. We don't need to say how important Florida is, we know. Clinton, 44 percent; Trump 39 percent. And then, finally, the state of Virginia, Clinton, 46 percent; Trump, 33 percent.

So, significant deficits in all of these battle ground states for Donald Trump. Not good news for him. You know, obviously, they would argue and we will argue that they haven't started spending money on ads. It's an open question about why. If Donald Trump and his campaign says that they have a strategy, you just wait. They're going to have it.

But, look, he has been getting pummeled, not just having his own missteps but also on T.V. and paid advertising from Hillary Clinton in a lot of these places.

BLITZER: These numbers, and we know Donald Trump looks closely at these poll numbers, --

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: He does.

BLITZER: -- Gloria, these numbers are not good for him.

BORGER: Well, I think they're not, obviously, as Dana was saying. And I think that's maybe why he sounded so gloomy kind of yesterday late in the day when he was talking about the possibility or even allowing for the possibility of potentially not winning this race.

But just to echo what Dana was saying about North Carolina. I mean, Romney won last time around and Obama had won in 2008. But if he were to lose a state like North Carolina, if Trump were to do that, then he has to make up for that somewhere else. Because he's taking away Republican territory, right? Which we're -- and the question is where would he do that? Maybe he would try to do it in a state like Virginia, maybe he would try to do it somewhere else, Ohio, --

BASH: Michigan.

BORGER: -- Michigan. Right.

BASH: Wisconsin.

BORGER: Yes, Wisconsin. But --

BASH: He has to.

BORGER: -- because if he loses a state like North Carolina, he's got to go somewhere else. And the numbers in those states don't look great for him either, at this point. So, they're scrambling right now and they know it.

BLITZER: You know, David, a five-point spread in Florida. But if you look at Virginia, 46-33. If you look at Colorado, 46-32. Those are important states as well for these candidates.

DAVID NAKAMURA, REPORTER, "THE WASHINGTON POST": And there were reports just this is week that the Clinton team is basically pulling their advertising from those two states because they feel so confident. And this is something. I cover the White House, the Obama team cannot believe how you -- how much they had to fight in these states to turn Virginia blue in 2008. Colorado, just a place that's changing with Hispanic voters.

But they can't believe this is the case. And you see how much the Democrats have put into North Carolina as well. Even though they didn't win it last time around. They had their convention there in 2012. The first rally with Obama and Clinton together. We saw within -- in North Carolina. They've put a lot of attention to this state and if they feel like if they can swing it, it's pretty much game, set, match.

BLITZER: Let's get back to the taxes that Hillary Clinton just released, Gloria. $10.6 million in income. That's joint income for Bill and Clinton. They file jointly as a couple. So, what is that going to say? They paid a million dollars in federal taxes.

BORGER: Well, look, what --

BLITZER: They paid more than a million.

BORGER: Right. And what the Clinton campaign is doing here is trying to say, look, we're very public. We're releasing our taxes. We paid a high tax rate. And what is Donald Trump trying hide? I mean, we understand, we all understand what's going on here. The question is -- really, is how is the Trump campaign going respond to this?

And we don't -- you know, we don't really know yet because, you know, Trump has said that I'm under audit and I'm not going to release my taxes. And other people have said, you can do that and you should do that. His lawyers are saying it would be malpractice if he did it.

But then, the questions are out there about, OK, what are his earnings? What if he didn't pay any taxes? You know, he's a real estate developer. Lots of real estate developers. There's lots of tax breaks for real estates. There's a potential for that. What did -- what did he give to charity?

So, we -- you know, he's going to continue, I believe, to defend his position. I don't see him giving up on it at any time. And he may attack Hillary and Bill Clinton on their sources of income. For example, the speeches. What did she say in those speeches? What did he say in those speeches? But they're putting it -- they're putting it all out there.

[13:10:04] I should say that, so far, it hasn't hurt him with his own supporters. So, let's caveat that.

BLITZER: The adjusted gross income for the Clintons last year, $10,500,000. They paid taxes, $4,600,000. And the year before, 2014, adjusted gross income of $27.9 million, almost $28 million, taxes almost $10 million. They gave a million dollars in charity last year. How's this going to play out politically?

BASH: Well, I think Gloria nailed it. The bottom line is that it's not surprising that Hillary Clinton and her husband have paid a pretty high tax rate, because they don't necessarily have the obvious tax breaks that a real estate developer would have or other people.

And, more importantly, they know that they're an open book, and they -- if they tried to do what Mitt Romney did, for example, and find a way, through his businesses, to have a lower rate, a 15 percent rate, it would be terrible for their base. And it would be -- it would be a bad signal based on who they are.

Donald Trump is a completely different case. He just is. And, you know, the argument inside the Clinton campaign is it doesn't matter what he did. We just want to know what it is. And I think that that's a pretty strong argument. What is he trying hide? But I think Gloria is exactly right. There's no evidence that that particular issue is hurting Donald Trump now. There are other issues that --

(CROSSTALK)

BLITZER: It may not be hurting him with his base, Republican base, but with independents maybe, with Democrats who don't like --

BASH: If the Clinton campaign --

BLITZER: -- Hillary Clinton.

BASH: -- if the Clinton campaign can make this argument successfully that, you know, we don't really know this guy. He's not an open book. He's never run for office before. We've released our tax returns for forty years. We don't know anything about this guy. We just know what he says. And if we can't trust him, then that could be potentially a swaying argument with people who are still --

NAKAMURA: (INAUDIBLE) for the working class, places like Pennsylvania, on issues like trade and other areas like that. And one thing the Democrats have tried to do is say his actions don't match what his words say. And on something like trade -- I was up in Pennsylvania just a few weeks back talking to workers. I mean, they quickly pointed to the idea that, you know, if his products -- if part products are made in China and his men's wear line and so on. It's just another area.

You know, not just the -- how much he might have paid in income taxes. But as you -- Gloria was talking about, his charitable donations. My colleague at "The Washington Post," David Farenfeld (ph), has done a remarkable job in sort of writing about how little evidence there is that he actually has contributed much of his own personal money to charity. So, this would be another way to sort of force him to address that issue.

BORGER: You know, it's all part of this theme that the Clinton campaign is talking about which is he's not -- you don't really know him. He's -- what is he trying to hide? He's not who you think he is. If you like him and you like the kind of billionaire populace notion. He's not that. How much has he given to charity? You have to pay taxes. He hasn't paid taxes.

So, they're -- you know, they're building this narrative about Donald Trump which is that you don't know him and, therefore, you shouldn't trust him which also counters the fact that they've got bad trust numbers themselves. It's kind of another way of going at him.

BLITZER: They both have bad trust numbers, honestly, trustworthiness. Gloria, Dana, David, guys, thanks very much.

Up next, Donald Trump now says he was only being sarcastic when he called President Obama and Hillary Clinton the co-founders of ISIS multiple times. A senior advisor for the Trump campaign standing by to join us live.

And just how long has the U.S. intelligence community known about Russia's hacking Democratic Party officials here in the United States? The leading Democrat on the House Intelligence Committee is also standing by live. We're getting new information.

[13:13:48]

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[13:15:36] WOLF BLITZER, CNN ANCHOR: After days of Donald Trump insisting that President Obama was the founder of ISIS, he now says he was simply being sarcastic. Listen to what he told conservative radio talk show host Hugh Hewitt just yesterday.

(BEGIN VIDEO CLIP)

HUGH HEWITT, CONSERVATIVE RADIO TALK SHOW HOST (voice-over): Last night you said the president was the founder of ISIS. I know what you meant. You meant that he created a vacuum, he lost the peace.

DONALD TRUMP (R), PRESIDENTIAL NOMINEE (voice-over): No, I meant he's the founder of ISIS. I do. He was the most valuable player. I give him the most valuable player award. I give her too, by the way, Hillary Clinton.

HEWITT: But he's not sympathetic to them. He hates them. He's trying to kill them.

TRUMP: I don't care. He was the founder.

(END VIDEO CLIP)

BLITZER: And then this morning he tweeted very early that he was simply being sarcastic. Former Georgia Congressman Jack Kingston is a senior adviser to the Trump campaign. He's with us today.

Congressman, thanks very much for joining us.

JACK KINGSTON (R), SENIOR ADVISER, TRUMP CAMPAIGN: Well, thank you, Wolf.

BLITZER: It's a little awkward because for 48 hours he was insisting he was being serious. He was given plenty of opportunities, various interviews, not just with Hugh Hewitt to say, you know, I'm just kidding, I'm being sarcastic, metaphorically, whatever. And all of sudden this morning he says he was being sarcastic.

KINGSTON: Well - well, I think two points, Wolf. Number one, remember, this is a man who's never been elected before. He's a private citizen running for the highest office of the United States of America. It's a - it's a transition that you just don't make overnight. That's number one.

Number two - so, you know, I think a little latitude.

BLITZER: So he was just joking, but he was pretending to be serious when he was talking?

KINGSTON: Well, I think -

BLITZER: Because he's been on television speak for years and years and years. He's had very successful TV programs. He's done numerous interviews over the past 10, 15, 20 years. So it's not the first time he's speaking publicly.

KINGSTON: But a lot of times, in television, rarely does something that you said in the past come back to haunt you the way it does in real time in politics. But let me say this, the reason that he won the primary, one of the reasons he won, is because he drove the discussion. And by bringing this point up and forcing the Clinton people to say, oh, no, wait a minute, oh, I was secretary of state then, I guess I had a hand in it too, he brought the discussion to focus on ISIS. And as we all know, ISIS did not exist when Hillary Clinton was sworn in as secretary of state. ISIS is now in 18 states. This is a group that President Obama called JV. And so now we're talking about ISIS, and I think that is a helpful thing for the campaign.

BLITZER: Let me just clarify one point. ISIS was in existence before Hillary Clinton was secretary of state. It was called al Qaeda in Iraq. Al Qaeda in Iraq, Abu Musab al-Zarqawi's organization, that morphed into ISIS. But the Islamic State, that caliphate, there were pretending they were in existence for a while, long before -

[13:20:06] KINGSTON: But remember -

BLITZER: Long before the Obama administration.

KINGSTON: But, remember, President Obama said, we won't even be fighting them at the end of the decade because we have successfully - and he said it over and over again, we have al Qaeda on the run. But, instead, al Qaeda regroups, changes its stripe, changes its name, rebrands, but it all happens -

BLITZER: But that's - but that doesn't make him the founder of ISIS.

KINGSTON: But it all happened under Obama and Hillary Clinton. And they should be saying, hey, you know what, we pulled out. We had victory. But they did not. They cannot make that claim.

BLITZER: Here's a little clip of an interview I did with Donald Trump back in 2007 when the president of the United States was George W. Bush.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL NOMINEE: They are in the midst of a major civil war and there's nothing - and, by the way, we're keeping the lid on a little bit, but the day we leave anyway, it's all going to blow up. And Saddam Hussein will be a nice person compared to the man and it will be a man, it will not be a woman, that we understand, people say, oh, gee, you didn't give the women a chance. It will be a man - compared to the person that takes over for Saddam Hussein. He will be considered a nice person. This guy will be the meanest, the worst guy and he'll have one thing, one thing, he will hate America and he'll use that to flame.

So, I mean, this is a total catastrophe. And you might as well get out now because you're just wasting time.

(END VIDEO CLIP)

BLITZER: That's what he wanted to do during the Bush administration, just get out. And, remember, there's another clip we played yesterday. He said, declare victory and get out --

KINGSTON: Yes.

BLITZER: Because it's a disaster. It's a civil war. We have no reason to be there. We're just losing lives and we're losing treasure.

KINGSTON: Well, but, I can't over emphasize enough that he was a private citizen and that was in 2007. In 2009, President Obama was president of the United States and had all the best intel available to him and should have known. I mean what a private citizen said in '07 is completely different than what the president of the United States does in '09 and '10. And we know, in the defense community, not having a statement of force agreement caused the vacuum which allowed ISIS or al Qaeda or whoever to regroup, reorganization and -

BLITZER: Do you remember that so-called status of force agreement. The Iraqi parliament voted against it. They didn't want any U.S. troops there. And the prime minister, Nuri al-Maliki, did not want to give maybe 5,000 or 10,000 remaining U.S. troops legal immunity from Iraqi prosecution.

KINGSTON: You know, but that's a matter of leadership. Barack Obama should have been able, the way George Bush did, negotiate with them. And they're very difficult and they're patriotic, they're nationalistic, but that's a given. President Obama and Hillary Clinton should have shown the leadership to work out a statement of force agreement to avoid the chaos that we have had.

BLITZER: Let's talk about the taxes. He's now under renewed pressure. Hillary Clinton released her tax returns for last year. Earlier she released her tax returns, joint tax returns, will Bill Clinton going back, I think, to the '70s, if you will. He's still refusing to do so. He's coming under a lot of increasing pressure, including from some Republicans, just go ahead and release the tax returns.

KINGSTON: Well, you know, he's still waiting on the audit. He's been consistent about that. And during the Republican primary, 16 other candidates tried to trip him up on the tax return issue. Now, maybe it survives another week, maybe it doesn't, but where are Hillary Clinton's e-mails? No one is really demanding to see her tax returns unless now we're talking about the Clinton Foundation tax returns, which would be very interesting to see, if she wants to release those. But the reality is, we're more interested in her e-mails and what she did as secretary of state.

BLITZER: So you don't think he's going to release even those IRS returns that have already been fully audited and they've adjudicated, they've done whatever needs to be done? He shouldn't even release those?

KINGSTON: I'm not sure what the timetable is and - and I will say that the campaign is considering these things. But the reality is, in terms of a voter going into the polls, knowing that the household income has shrunk from $57,000 to $53,000, 94 million people are unemployed or under employed, (INAUDIBLE) -

BLITZER: Because I think a lot of voters, maybe not the core Republican base, but a lot of voters want to know, what was the tax rate he paid, how much in taxes did he pay, and what kind of charitable contributions did he make. People are interested, and as somebody who wants to be president of the United States, to know those kinds of details.

KINGSTON: You know, there is a group that's interested, but there's a bigger group that's interested in her e-mails. And I think that that's an issue that's not going to go away. It's an issue she's been lying about. It's an issue she hasn't come clean about. And if she wants to hold herself out suddenly as being a transparent candidate, we welcome it. So show all of your transparency. BLITZER: You've seen these latest poll numbers in some key

battleground states. He's not doing well in North Carolina and Colorado, Virginia it's a five point spread, in Florida right now. You know, maybe we're reading too much into it, but yesterday, when he spoke about, and I haven't heard him speak often about what happens if he loses, he sounded in a sort of different way. Let me play the clip for you.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL NOMINEE (voice-over): I'll just keep doing the same thing I'm doing right now and at the end it's either going to work or I'm going to, you know, I'm going to have a very, very nice long vacation.

(END VIDEO CLIP)

[13:25:13] BLITZER: I haven't heard him talk about the possibility of losing. That was really one of the first times he's actually done that.

KINGSTON: You know, the number one poll still remains, wrong track, right track. And depending on who you ask, anywhere from 60 percent and 67 to 68 percent of the people still believe America is on the wrong track. The Clinton/Obama economic policies have failed the working middle class. And what we saw with Hillary's economic plan is a doubling down of Obama's policies.

She's rating them as an A-plus and all she would be is a third term of Obama. And I believe that as people focus and say, you know what, we really do need change in Washington. Here's a guy who's going to bring the change, then those polls are going to swing.

BLITZER: By the way, I just want to clarify one thing in that right track, wrong track. Pollsters like to - love to look at, you're right, about 60 percent of the country thinks the country's moving in the wrong direction right now, as opposed to the right direction. But a lot of those people are liberal Democrats who aren't satisfied with the president of the United States, that he hasn't done enough over these past few years.

It's not just conservative Republicans. So that number can be a bit misleading if you take a look at it. Maybe more significant, 54 percent right now think the president of the United states is doing a good job. His job approval number is where Ronald Reagan's job approval number was at the end of his second term.

KINGSTON: But, you know, a lot of those liberal Democrats do not like our foreign policy. They don't like the fact that Hillary Clinton supported the war in Iraq. And they know Donald Trump opposed it. And so the end - the trade agreements. The same thing. At one time she said that the Trans-Pacific Partnership agreement was the gold standard. Now, because of Bernie Sanders, she's against free trade.

BLITZER: Yes.

KINGSTON: But Donald Trump has been consistent on these issues.

BLITZER: Jack Kingston, former congressman from Georgia, a senior Trump advisor, thanks very much for joining us.

KINGSTON: Thanks, Wolf.

BLITZER: Thank you.

CNN is revealing now ties between a Clinton staffer at the State Department and the Clinton Foundation. We have new information. We have new information coming in. We'll be right back.

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