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Mystery Tiptser Sends Pages from Trump's 1995 Tax Returns to NYT; New York AG Orders Trump Foundation to Cease and Desist; New National Poll Shows Clinton with Five Point Lead; Trump Rallies in Colorado; Alec Baldwin's Star Turn as Trump on "SNL". Aired 10-11p ET

Aired October 3, 2016 - 22:00   ET



DON LEMON, CNN HOST: Not such a good time to be Donald Trump.

This is CNN TONIGHT. I'm Don Lemon.

They say bad news comes in threes. First, a mystery tipster sends several pages from Trump's 1995 tax returns to the New York Times revealing the multi-billionaire wrote off also a billion dollar, $916 million in losses. And Donald Trump says that just proves he's a great businessman.


DONALD TRUMP, (R) PRESIDENTIAL CANDIDATE: I have legally used the tax laws to my benefit, and to the benefit of my company, my investors and my employees. I mean, honestly, I have brilliantly -- I have brilliantly used those laws.


LEMON: Well, of course, Hillary Clinton disagrees.

HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: What kind of genius loses a billion dollars in a single year? This is Trump to a t.


LEMON: Then New York's Attorney General orders the Trump Foundation to immediately stop fundraising saying it is in violation of state laws. And then there's this. Our first national poll since the debate shows Hillary Clinton with a five point lead over Donald Trump.

Yes, there is a lot to go over tonight, and so we're going to discuss it all starting now with CNN senior political analyst Mr. David Gergen, and Larry Sabato, the director of the Center for Politics at the University of Virginia.

My goodness, where do we start this evening? Why don't we start with the new poll, Larry. Thank you for joining me tonight. This is CNN's new poll. Trump trails Clinton by five percent, that's nationally, 47 Clinton, 42 Trump.

And it shows since CNN's last poll she is up, he is down. The poll was completed after the debate but before the stunning news about Trump's taxes. There's also this CBS/New York -- New York Times poll out tonight, similar result, Clinton is up by four. What do you make of this?

LARRY SABATO, VIRGINIA UNIVERSITY CENTER FOR POLITICS DIRECTOR: And there's also another national survey, Survey Monkey that has Clinton up by about six.

Look, it's all good news for Clinton. We know national polls don't matter as much, it's really the battleground polls. She got tremendous news today, cut from Colorado, from Florida, from North Carolina, from Pennsylvania. Only one exception, Ohio, where she clearly is doing very poorly but she is winning the other battleground states.

So, you know, if this continues -- now, that's a giant if -- obviously she is going to be a clear favorite. She probably is the clear favorite, but there are two more debates to come. There could be outside events or revelations that change everything. You just never know.

LEMON: We're going to discuss that a little bit, just a little bit later on in this particular segment, but, David, I want to ask you because there's a striking difference in this poll now about Hillary Clinton's support among men.

Trump has a five point lead among men. Early September showed a 22 point lead. Do you think it's because of his performance at the debate?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think he has been eroding since the debate, and he has a steady series of events since then. The attacking of Miss Universe and the debate, that carry on that conversation and for days. And this poll does takes us up to the edge of the tax controversy, which is going to further hurt him.

I think particularly among educated men. He's now suffering a lot, and he's -- this is not over. This is still fluid, but his chances of winning are going down. To go back to Larry Sabato's point, there are four critical states that Trump has to win all four, basically it's his best path away on Florida, North Carolina, Ohio and Pennsylvania. He's behind in three out of these four.

LEMON: What are you think the men are saying they change their minds?

GERGEN: I think that this -- I think that they've just been turned off by -- I think the quality of his debate performance rattled a lot of people. They're sort of saying, is he really up to this or not? And a lot of people came out of that saying, I don't like her, I don't trust her, but, gees, we're not going to put somebody in there that is so erratic and it doesn't have control of a conversation.

LEMON: Is it because, you know, I have heard you and a number of people say well, debates really don't change that much, usually don't change that much. is this just a bad debate performance or was it just erratic?

GERGEN: It was a bad debate performance but it's consistent with everything else. And what did we learn that the critical was? He didn't prepare, he tried to wing it. And his own people are saying, you know, Newt Gingrich is coming out today saying he's got to prepare. If he doesn't change for this next debate, you know, he doesn't have a path to the White House.

LEMON: Yes. Larry, so we talked about men, let's talking -- let's talk now about him trying to woo African-American voters because he is going to need African-American voters. This new poll shows 95 percent support for Hillary Clinton, just 5 or for Trump. Can he win more support from black voters with the way he is doing it now?

SABATO: I think it is very doubtful. You know, could it be six or seven? I guess. It certainly going to be single digit. If you force me to guess today, I would say low single digits.

[22:05:00] So, I think he can pretty write off African-American voters just as they've written him off. He hopes to do better with some other minority categories, but I don't see him doing well with any of them.

He is not doing well with Latinos, the best poll with Latinos show him in the teens, doing about 8 to 10 points worse than Mitt Romney who had a terrible performance with Latinos.

LEMON: Yes. So, David, let's talk because some said that that wasn't an outreach to African-Americans, it was an outreach to appeal to suburban women.


LEMON: So, was that a failed message as well, the way he did it?

GERGEN: It didn't work.

LEMON: It didn't work?

GERGEN: Yes. And got to go to his point about Latinos, one of the reasons for that like Colorado number which is so high, she has a big lead out there, has got to go right into the Latino thing. The common -- the wisdom among republicans is the candidate to win on the republican side needs 40 percent, 40 percent of the Latino vote. He's got less than half of that right now.

LEMON: His -- let's put this, you talked about the battleground states, both of you said that's where the rubber meets the road here.

GERGEN: Sure does.

LEMON: This is Florida today. Hillary Clinton is up by five points, 46 to 41. In Ohio, Trump leads by five points, 47 to Clinton's 42. Both are key states and important on this -- you know, trying to win the electoral votes but who has the edge here?

Can there -- can they -- can she make up the difference or he make up the difference in this short amount of time?

GERGEN: In Ohio?


GERGEN: It's hard, it's probably one of her hardest states, I think she can but it's -- you know, right now it seems doubtful.

LEMON: Yes. This LeBron James, does that help at all, Larry?

SABATO: Does what help?

LEMON: LeBron James endorsing her?

SABATO: Oh, LeBron James. Well, you know, it may help to get out the vote for Clinton and the African-American community and elsewhere. LeBron James has been elevated to sainthood in Ohio, but I think, you know, it's toough. It's not as bad for her in Ohio as it is in Iowa.

That's probably Trump's best battleground state, but, you know, if I had to guess today I'd say he would get Iowa and Ohio and maybe one of the other really close ones. I don't know if it is North Carolina or something else, but she's got -- she's got the other ones.

And I've watched the polling averages. They really haven't changed that much. People focus on outlier polls. You'll get a poll saying, oh, it's tied. You know, if you look at the polling averages, it really isn't tied.

LEMON: Over the weekend he mocked, you know, Hillary Clinton walking to her car when she had pneumonia, you know...


LEMON: ... said that he thought that she cheated on Bill Clinton. And there were a number of things over the weekend. Do you think bringing up these infidelities and the way he is doing it as going off trip -- script in this way, is that -- what's going on? What happened with the messaging and the great weeks he had in early September?

GERGEN: You know, that's one of the great mystery here. There's no team, suddenly he seemed to be magically improving, he had the momentum going into the debate and it has been downhill since that debate.


GERGEN: And I don't know. He seems to be once again angry at people around him. And when he is angry he doesn't listen to them, he doesn't trust them. And you know, there is some stories came out from inside his team saying he really wasn't prepared, he wouldn't listen, and so forth. And he was really angry at that.

And ever since then he just been off his game, or at least off the game of winning. Can we still talk about what's -- you know. LEMON: Yes, I was going to sat October surprise. We were talking

about October surprise and this tax thing seems to be one of them, but there can be an October surprise happening in a short amount of time from Julian Assange.

GERGEN: Absolutely. And Julian Assange of WikiLeaks hates Hillary Clinton, he wants to destroy her if he can. There have been all sorts of rumors that he was going to be putting out information this week that would be very, very destructive for her campaign.

We'll have to see what happens. But Larry said as we were coming on.


GERGEN: It looked like it was going to be at 4 a.m.

LEMON: Larry, it's going to happen shortly, at 4 a.m. our time?

SABATO: Four a.m. our time.


LEMON: What do you -- what do you know about this?

SABATO: It will be in Berlin by video, you know. And look, David is right, you don't know what's in there. Maybe it is something serious, but, you know, whenever I hear people say something is coming out that's going to absolutely destroy the candidacy of x, pardon me, I am a little bit skeptical.

LEMON: Yes. But could -- but if it's -- it could backfire. What if it is traced to Russian hacking or something? Couldn't it backfire, Larry?

SABATO: Of course it could backfire. I mean, you're going to have two stories. One, whatever the revelation is, and then how did this information come to be? And it's already obvious that the Russians want Trump and they're cooperating in various ways and producing information that helps Trump.

I -- Putin, last time I checked that he had a 6 percent favorable rating among American voters, that's 6, single digit.

LEMON: Yes. It's interesting, David, when you watch the spin you see supporters of Donald Trump saying, you know, the New York Times obtained this illegally, they should be prosecuted, but then a different story when it comes to Julian Assange, right?

[22:10:08] GERGEN: That's right. That's right. And to be clear, the New York Times is under no legal obligation to protect that material, it is the person who gave it to them who has -- who is legal -- who has committed an illegal act. Giving somebody's tax returns out like that, and of course there are rumors swirling, who is it, looks like it came out of an inner circle of a small number of people who turned...


LEMON: And when asked -- when asked by several different reporters including our very own Brian Stelter, are you going to do more? There was, you know, they played it coyly saying, we don't know.

SABATO: They don't know.

LEMON: Stay tuned.

SABATO: Stay tuned.

LEMON: Yes. Thank you, gentlemen, I appreciate it.

SABATO: Thank you.

LEMON: When we come back, Donald Trump says losing nearly a billion dollars in one year, well, is enough to avoid paying federal taxes for 18 years, he said that was brilliant, but are voters buying that?


LEMON: Donald Trump claiming he has brilliantly used the tax laws to his own benefit.

Here to discuss now, Washington Post reporter, David Fahrenthold, and also William Cohan, the contributing editor to Vanity Fair who is the author of "The Price of Silence."

Good to have both of you on. William Cohan, you first, Trump's 1995 tax -- taxes published in the New York Times show Donald Trump lost nearly a billion dollars enough to avoid paying federal taxes could be for 18 years. Here is how he explained it tonight.


TRUMP: The unfairness of the tax laws is unbelievable. It is something I've been talking about for a long time, you have heard me talking about it, despite being a very big beneficiary. I must admit.

[22:15:07] I am. I'm a big beneficiary. But you're more important than my being a beneficiary so we're going to straighten it out and make it fair for everybody.


LEMON: Can he claim to have lost -- can he lose a billion dollars in one year and say he is a brilliant businessman? is that...

WILLIAM COHAN, "THE PRICE OF SILENCE" AUTHOR: I don't think so. I put -- I think this puts the lie to the central tenet of his campaign, which is that he is great a businessman and that he can turn this country around, he can make this country great again.

Trust him to do it, as he said at the convention, I think this completely blows up that whole premise of his campaign. You cannot be good businessman -- I worked on Wall Street for close to 20 years. You cannot be a good businessman and go bankrupt six times, six times, and claim to be a great businessman.

LEMON: His argument though, and from his supporters, the argument is that he's the comeback kid, he is a genius for coming back and turning around. There have been lots of people throughout history in business who have turned things around.

COHAN: Well, he hasn't really turned around any of his businesses that ended up going bankrupt and cost creditors billions of dollars. None of his casinos have, quote, "turned around." He has cleverly bought other businesses out of bankruptcy like Mar-a-Lago. He has cleverly bought, you know, turned "The Apprentice" to his advantage.

Yes, he is a world class marketer. There is no question about it, and he has some sort of genius when it comes to politics because he has gotten all these people to believe that he cares about them, people as Van Jones says who have a legitimate beef, people who are supporting him, who have a legitimate beef with what happened in the system in the last 10 years.

But the mistake is, the fallacy is that they actually believe that Trump, this billionaire who lives on his Mussolini in Fifth Avenue, who flies around on his own private 757 is actually going to help him, who takes advantage of the tax code by after losing $915 million, billion.

LEMON: David, we are talking about these personal taxes not business taxes. Does this claim he has a fiduciary responsibility to pay as little as possible stand up to scrutiny?

DAVID FAHRENTHOLD, WASHINGTON POST POLITICAL REPORTER: Well, he is not a responsible to shareholders the way somebody owning a public corporation is. Trump owns a lot of his businesses out right so he's talking about a fiduciary responsibility to himself and his family and employees.

I supposed that's right, but it's hard to argue that both of those things are true. One, that Trump is following a fiduciary duty to pay as little taxes as possible, and, two, that he is outraged by the horrible system that allows him to take -- to serve his fiduciary duties so well. It's hard to make those two arguments at the same time.

LEMON: And this is a new CNN poll. Eighty six percent of registered voters said that paying taxes was a civic duty, 57 percent said that they think Trump is hiding something.

Here is Hillary Clinton what said today.


CLINTON: Now while millions of American families, including mine and yours, were working hard paying our fair share, it seems he was contributing nothing to our nation.

Imagine that. Not fair, nothing for Pell grants to help kids go to college, nothing for veterans, nothing for our military. (END VIDEO CLIP)

LEMON: David, how do you respond to that? What do you think?

FAHRENTHOLD: I think it's a powerful argument, and I think that, you know, usually the argument from folks that don't -- that pay very little income taxes, the conservative argument is, yes, we do. But the government is not the only way to help people, you can give to charity, you can have other ways to have your wealth help society and solve some of these ills that Trump is so concerned about.

And it's hard for him to sort of say on the one hand I pay as little taxes as possible while also appearing to not very -- give very much to charity either, so he is not helping in the other way that conservatives usually advocate.

LEMON: William.

COHANS: David is absolutely right. I mean, you know, he was charming tonight when he defended what he did and he said that he was a beneficiary. But the fact of the matter is, he may not have paid taxes for 18 -- he may not have paid taxes for close to 22 years now.

And the fact that he argued earlier tonight that 1995 was a very tough year for real estate developers, well, that's not true either. I mean the economy was growing quite well at that point; 1990, and '91, '92, those were tough years. But by '95, I mean he can't -- he has not explained or we don't have any idea how he possibly lost this...


LEMON: But that was my question. How do you lose that much money, you don't know?

COHAN: Well, no. He has partnerships and it was a pass through, some of it might have been the extinguishment of debt that he also got a benefit from that has been explained very well I think earlier tonight on CNN.

So, we don't know. I mean, obviously it isn't a loss out of his pocket. So, by not paying taxes all of these years presumably, he has enriched himself. The rest of us don't have this tax benefit. If we have a loss in any given year we're not real estate developers, we can't take this benefit.

So, he benefits and then he claims to have sympathy and empathy for the working class American who has lost his job, and somehow he is going to benefit -- help them get out of their predicament.

[22:20:06] LEMON: You don't see that happening?

COHAN: I don't see that.

LEMON: David, I have to commend you. You have been doing tremendous work on your investigation, and especially on the Trump Foundation. You reported that Trump was operating the foundation illegally in New York.

And today, New York's Attorney General sent them a letter saying this, "Please take further notice that the Trump Foundation must immediately cease soliciting contributions or engaging in any other fundraising activities in New York."

Do you think Trump ever expected that his foundation would come under this kind of scrutiny?

FAHRENTHOLD: It's hard for me to know what he expected. Certainly it would not, it had not, and probably would have come under this kind of scrutiny had he not run for president.

In fact, he got through most of the presidential run without coming under this kind of scrutiny. The thing that caused the New York Attorney General today to order Trump to cease fundraising in New York and effectively shut down his campaign -- his foundation's fundraising was sort of an obscure issue that I think even people in the New York Attorney General's office didn't know about it until pretty recently.

LEMON: This is a -- this is response from the Trump foundation. It says, this is for you, William. "While we remain very concerned about the political motives behind A.G. Schneiderman's investigation, the Trump Foundation nevertheless intends to cooperate fully with the investigation. Because this is an ongoing legal matter, the Trump Foundation will not comment further at this time."

Does this take away his ability to attack the Clinton Foundation now?

COHAN: Eric Schneiderman?

LEMON: Yes. Well, I mean, Trump's.

COHAN: Oh, Trump.


COHAN: Look, no. I mean, he can -- Trump will say whatever he wants to say. I mean, this charge that somehow Eric Schneiderman is politically motivated, you know, Eric Schneiderman...


LEMON: Who supported Hillary Clinton?

COHAN: Yes, but you know, Donald has had a beef with Eric Schneiderman for years now because I wrote an article in Vanity Fair about Eric Schneiderman going after Donald Trump for Trump University and prosecuting him for Trump University, even before he was running for president.

And even then Donald told me that he was, you know, that Eric Schneiderman was doing this for political reasons because that Eric Schneiderman he'd come to solicit Donald for a donation and Donald wouldn't give him. So, as a retaliation he went after him for Trump University. It's hogwash. It's hogwash. Donald Trump violated the laws with regard to Trump University. I assume as a result of exposure from David's excellent reporting he probably violated laws related to the Trump Foundation, too, and Eric Schneiderman is doing his job by going after him, not being afraid.

LEMON: David, before I let you go since you're reporter and, you know, this whole thing is coming out with Julian Assange supposedly, you know, in the wee hours, do you have any idea of what it might be? Have you heard anything?

FAHRENTHOLD: No, I'm just curious as everybody else, but I heard nothing.

LEMON: All right. Thank you, gentlemen. I appreciate it.


LEMON: Straight ahead, Rudy Guilliani praises Donald Trump as an economic genius, but did he also hit Hillary Clinton with a sexist slam.


LEMON: Donald Trump telling supporters tonight that he understands the tax laws better than anyone.

Here to discuss Betsy McCaughey, the former Lieutenant Governor of New York who is a Trump supporter. CNN political analyst John Avlon, editor-in-chief of the Daily Beast, and Jennifer Granholm, the former Governor of Michigan who is supporting Hillary Clinton.

Good evening to all of you. OK. This is what Donald Trump said last September in a primary debate at the Reagan Presidential Library.


TRUMP: I know people that are making a tremendous amount of money and paying virtually no tax, and I think it's unfair.


LEMON: So, Betsy, today he says doing that was brilliant. Which is it?

BETSY MCCAUGHEY, TRUMP ECONOMIC ADVISOR: Well, the fact is since 1918 the Tax Code has encouraged investors, whether they're building big buildings like Donald Trump or opening a corner drugstore or buying stocks, to take risk.

That's the purpose of this tax loss carry forward that Donald Trump used. He lost a tremendous amount of money, almost a billion dollars, and he spread it out, the New York Times is guessing, over the following years. When I read the New York Times article...


LEMON: I understand. I just want...

MCCAUGHEY: Let me just comment, there was such an innuendo.

LEMON: What is it? Is it as brilliant as he said now?

MCCAUGHEY: I would say just complying with the law, and millions of people across the country use exactly the same tax provision. They apply it in the same way. They have a big loss one year and they're allowed to apply it to future income to reduce their tax.


LEMON: Is it a shame or brilliant? Where does he stand on this?

MCCAUGHEY: I would say it's just the norm. It is the norm. If you go to an accountant and you have a big loss, that's how it's treated.

JOHN AVLON, CNN POLITICAL ANALYST: There's nothing normal of course about losing $900 million and getting a write-off for it. That's in every way extraordinary and un-relatable. The clip you just played is the key of it, right?

Because he condemned this kind of behavior in a debate, because it plays well with primary voters and now he has been forced to confront an uncomfortable reality.


LEMON: Let's put this up, too. Because I know you're talking about. These are the times, at least a couple of them, this feed is from April of 2012, September of 2015, "Barack Obama who wants to raise our taxes only pays 20.5 percent on $790,000 salary."

"Do as I say, not as I do." Then he says the hedge fund guys, gals have to pay higher taxes ASAP. They are playing practically nothing. We must reduce taxes for the middle class. And then there are -- I'm looking at it. This is a story nine times that he's talked about people taking advantage or not paying taxes. You have to admit -- governor, I'm going to get to you.


LEMON: It does seem, this is for Betsy, that he is contradicting himself, that he is being a hypocrite about this. You must admit that?

MCCAUGHEY: Well, it certainly seems as if at least in the issue tax loss carry forward, that's what the New York Times story is about, that the New York Times is trying to shame him. There's all of this innuendo that he did something if not illegally at least morally defective.


LEMON: Why are they shaming him by showing the tax returns? It's like saying that... MCCAUGHEY: No, read the article. It says families that are in this

income category often use this. They talk about it as cheating when in fact, the New York Times itself didn't pay any tax in 2014 because they used a very similar tax provision.

LEMON: The New York Times is covering for president.

MCCAUGHEY: That's right.

AVLON: That's right.

MCCAUGHEY: But are you suggesting that businesspeople should ineligible to run for president?

LEMON: No, I'm not saying that. What I'm suggesting is that when you run for president...


LEMON: ... everything is out there.


LEMON: And every -- since the 1970s every president has released -- the person running for president has released their tax returns.

[22:30:01] MCCAUGHEY: That's a different issue.

LEMON: That's part of it. That's part of the scrutiny that goes along with it.

MCCAUGHEY: What you're saying...


LEMON: Hang on.


LEMON: And you can't say that because the New York Times has a story that has happened to not to be favorable to or they just put his tax reference out there.

MCCAUGHEY: I wouldn't -- I wouldn't release...


LEMON: That they're out to get him.

MCCAUGHEY: No. Because every day from now until Election Day would be another controversy about another part of his tax returns. Businessmen have tax returns that look different from politicians.


AVLON: He fall on Mitt Romney released his tax returns in January of 2012, the right to do then, you live by the tweet and die by the tweet.


AVLON: He is a hypocrite on this issue.

LEMON: OK. Governor, I swear I'm going to get to you. Don't worry about it.


LEMON: But the criticism from the Trump side is that, is this -- is he -- are you guys or him going to Hillary Clinton's territory when you say the coverup is worse than the crime, that she is not transparent?


MCCAUGHEY: Well, I heard Mrs. Clinton say...

LEMON: Can you say that?

MCCAUGHEY: ... why isn't he paying his fair share? What is your fair share other than what the law says you owe?


MCCAUGHEY: There's a question. What is your fair share other than what the law says you owe?

LEMON: How would you know that unless you release the tax returns? Governor, go on.

GRANHOLM: Yes. Thanks. I appreciate. I actually had brought the same article from Nick Confessori which showed the nine tweets that Donald Trump has made about how horrible it is that wealthy people don't pay their fair share or how horrible it is that Barack Obama is spending taxpayer money on a speech when, in fact, well, guess who's Secret Service are paid for by taxpayer money, guess whose roads are paid for when he drives his Limousine on them with taxpayer money? Who is paying?

We are subsidizing this billionaire. The guy who empties his crash can in the Trump Tower is paying for Donald Trump's cops that are patrolling the beat in front of Trump Tower.

There is an issue here of just overall fairness. And ironically, the tax plan that Donald Trump proposes which he says he can fix this does not address this issue and only makes it worse, exacerbating income inequality, eliminating the estate tax, reducing taxes or eliminating them for capital gains. I mean, he is making this problem much worse, all the while, while he is mouthing how terrible it is.

LEMON: But again, we have -- listen, and from this reporting, from the New York Times reporting you can say that he did anything illegal. That's not what they're saying, not what anyone is saying. But, listen, Betsy McCaughey, just she criticized the New York Times reporting, so did Rudy Giuliani. Here's what he said about the Times yesterday.


RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: Don't you think a man with this kind of economic genius is a lot better for the United States than a woman, and the only thing she ever produced is a lot of work for the FBI checking out her e-mail.


LEMON: He is a genius and better than a woman. What is your reaction, governor?

GRANHOLM: Well, I mean, first of all, how is the man a genius when he lost a billion dollars in one year? Who knows what the other years are showing, number one. I mean, you know...


MCCAUGHEY: He's certainly become...

GRANHOLM: That statement about -- I don't know, how do we know. You're a legend, how come we haven't seen his taxes? Who knows what he's been doing if he's been living off the largesse of the taxpayers, by using the bankruptcy code to eliminate his debtors or by claiming tax subsidies, going after tax subsidies everywhere when we are the ones paying for them.

So, I'm just not sure. He is excellent at manipulating the code to his benefit, that's for sure.

But, Don, you were asking about Giuliani's comment there, and it's so hard, you know, I have no idea if that was a slam at women or just an off-the-cuff statement, but certainly I would say that the team on the Donald Trump side has not been doing very well with women, and certainly his past week is not going to do anything more to shore up his support among women.

LEMON: Here is what the new CNN/ORC poll released today. It shows 73 percent of registered voters think that Trump should release his tax returns, 57 percent think Trump is hiding something. John, do you think that number will resonate with the campaign at all?

AVLON: It should but it won't because this is a campaign driven largely by self-interest. Look, that's the larger point here. Look, what Donald Trump did apparently, certainly is not illegal, no one is alleging that. The question is whether it is ethical, especially for someone running for president, especially for someone whose real estate empire has largely been built on what folks on the right would have traditionally called the crony capitalism.

He is getting a lot of tax breaks and deals with the benefit of taxpayers. So, he's having it both ways. He's shown to be a hypocrite in terms and lines he's made on the campaign. And it goes to the heart of a lot of the credibility of his candidacy, which is, I'm such a successful businessman. I can do for America what I did for Atlantic City. It turns out it might not have been such a good thing.

LEMON: I don't know if any of you, guys were on, but I remember saying several times months ago, that why doesn't he just say put out his tax returns and say I know better than anybody else because look at what I was able to do with our tax code and it needs reform.

And there's a sound bite somewhere, I have said it, but why didn't you guys ever say that, Betsy?

MCCAUGHEY: I'm going to give you credit for that.

LEMON: But why, I'm saying it was a perfect story for me, which leads people to believe that maybe there's something else or something bigger that is hiding in his tax returns on what -- what was just uncovered.

[22:35:00] We'll discuss. We'll be right back.


LEMON: Oh, boy. The commercial breaks are only broadcast, Donald Trump's charitable foundation getting him into trouble with New York State's Attorney General.

Back with me now, Betsy McCaughey, John Avlon, and Jennifer Granholm. So, can I ask you about the respond, Betsy, from the Trump surrogates because I said I never thought that I would see Rudy Giuliani or Chris Christie, or Betsy McCaughey like doing cart wheels and back flips trying to explain this. Would you have used the same language genius?

MCCAUGHEY: I would definitely not have said genius and brilliant because it is such a widely used provision in the tax code, there's nothing genius or brilliant about it, but I would say it is an essential part of the tax code and we shouldn't eliminate it because it encourages people to take risks, creating job.


LEMON: Moving on. Let's talk about Eric Schneiderman, the New York State Attorney General saying that his -- and telling Trump basically giving his charity a cease and desist, what's your reaction?

MCCAUGHEY: Yes, I got it right here.

LEMON: What's your reaction?

MCCAUGHEY: My reaction is this. For the top law enforcement person in the state to sign on to the Hillary Clinton campaign advisory board and then turn around and launch an investigation of her opponent is unethical.

[22:40:02] And he should have recused himself. Many people should calling for his resignation because of this conflict of interest. And someone else should be looking into this.

The timing of this is also suspicious. It could be that administrative errors were made. But I will tell you this, the same attorney general identified $225 million in donations from foreign governments to the Clinton Foundation that were not reported in contrary...


LEMON: But doesn't that negate your argument?

MCCAUGHEY: No, but just a second. Contrary to New York state law and did nothing about it. Did nothing about it.

LEMON: So, John, I want you to respond to that, but let me just put up the statement from the Trump campaign. And again, it says, "While we are remained very concerned about the political motives behind A.G. Schneiderman's investigation, the Trump Foundation nevertheless intend to cooperate fully with the investigation."

So, go on, John.

AVLON: Well, look, there's a lot of bad blood between these two figures that's not a secret particularly in sort of the arcane circles of New York politics.

It is troubling whenever you get judicial actors seeming to have partisan motives or motives that could be impugned. That said, this is largely a problem of their own making. I mean, you know, this foundation, much vaunted, under scrutiny that they could have anticipated, seems to not have filed basic forms.

And now according to the attorney general they are going to have to open their books as of October 15th. Everything we've seen to date would suggest they're probably not ready for that kind of scrutiny in terms of both disbursements and payouts.

And it's going to be a distraction to the campaign, but it's because they resisted transparency for so long that they find themselves in this situation.

LEMON: Politically motivated, governor?

GRANHOLM: No, it's just that the facts are the facts. They didn't register. They're supposed to register. I think this actual failure to register is less damaging than the actual non-existence of a charity, meaning that this charity was not in fact a charity at all.

It is a vehicle for funneling stuff to Donald Trump to be able to pay his legal bills which is, not legal or to buy six-foot portraits of himself that he's hanging on the walls of one of his resorts.

These are -- and not to mention the donation that he made to Pam Bondi to get her to stop investigating Trump University. This is not a charity at all. This is a -- where he takes other people's money to satisfied his own -- his own vanity.

LEMON: John, do you want...

(CROSSTALK) AVLON: That's part of the larger problem think of what we've seen, is

that Donald Trump's lifestyle basically seems to have been funded by a series of interconnected shell corporations through which he funnels a lot of money. So, he can take a massive loss, take the reduction, have very low reported income and still live like a king.

Once this kind of transparency is put in place with the foundation, you could see a lot of really troubling, hard-to-explain things, a charity, a foundation that does not seem to be charitable, but instead seems to be devoted to self-grandiose to self-enrichment. If that's the case, it certainly, you know, this is a problem of their own making.

LEMON: Look out, Betsy is looking up. I'm looking at her nose.


MCCAUGHEY: Yes. I don't think that's the case.

AVLON: It may not be the case.

MCCAUGHEY: Let me just point out that the -- to give you a little bit of a parallel here, the Clinton Foundation failed to report 1100 donations from foreign governments and entities that Mrs. Clinton's foundation was required to report under her agreement with the State Department when she took office there, and also under IRS regulations.

A 111 omissions. So, they had to re-file four years of taxes for the Clinton Foundation. And here is the one sentence in the cover letter that struck me as so apt her, because foundations, like people, make mistakes, they are refilling four years of taxes. So, I would say...


LEMON: Isn't that what Governor Granholm just said?


MCCAUGHEY: That's why I would say...

AVLON: We're all flat. We're all broken.

MCCAUGHEY: ... here maybe and the administration in New York, I've run a foundation in New York State, it's an overwhelming amount of paperwork, if they forgot to file with the charity office I filed with the New York...


LEMON: Governor, didn't you just give her that?

GRANHOLM: Yes. Listen. Listen, I'm saying that this is an administrative error. I get that. And it would be improper for Eric Schneiderman not to go after it because his office regulates charities. What I'm going at this underlying purpose, and to compare the Clinton Foundation with the Trump Foundation is so desperate. Tell me one person that the Trump Foundation whose life has been

saved? Under the Clinton Foundation 50,000 children every year in Malawi, and in Kenya and in Ethiopia are saved. Tell me one drug whose price has been reduced because of the beneficent of the Trump Foundation.

And because of the Clinton Foundation 11.5 million people now have access to AIDS drugs and to lower cost malaria. This is not a foundation, the Trump Foundation. The Clinton Foundation has done remarkable work.


MCCAUGHEY: I would argue that the Trump Foundation also does good. They made a sizable contribution to a veteran's organization in Florida. And the trouble with the Clinton Foundation is that it was really used as a way of reaping in huge amounts of money from foreign governments, companies and individuals while Mrs. Clinton was Secretary of State.

[22:45:04] LEMON: But do you deny the good the Clinton Foundation has done...


MCCAUGHEY: Absolutely not. Absolutely not.

LEMON: You can't argue with that.

MCCAUGHEY: Both of these institutions probably have their worth and their good points.

LEMON: But is it fair to compare the two because the Clinton Foundation is much larger foundation than the Trump Foundation.


MCCAUGHEY: I think that...

GRANHOLM: And has been rated four stars by all of the charity review organizations.

MCCAUGHEY: I think it is -- the Clinton Foundation has really a ripped off the United States government and the people of the United States by swapping favors in return for donations to that foundation.

GRANHOLM: That is such -- that is not true.

MCCAUGHEY: That is not something the Trump Foundation has ever done.

LEMON: That's a bunch of Donald Trump's campaign talking points.

LEMON: And that is just an accusation that is not ben proven.


MCCAUGHEY: That is such a lie.

LEMON: Yes. I have to say that's an accusation that's not been proven.


LEMON: Thank you very much. When we come right back, it has been a week of bad news for Donald Trump, but he has bounced back before. Can he do it again?


LEMON: Thirty five days, 35 days until Election Day and things are not exactly going Donald Trump's way.

Here to discuss Frank Rich, writer-at-large for the New York magazine. Frank, it's just 35 days. They can't come soon enough.


LEMON: Let's talk about this latest election news. That Trump has -- he's had a very rough week, to say the least, but he has been down before, he has snapped back. Do you see that happening again?

[22:50:04] RICH: Look, anything could happen. We don't -- you know, this Julian Assange thing may be just smoke and mirrors, but anything can happen. It's crazy.

Look, after his -- much of his terrible behavior, Hillary Clinton was still up only two or three points. It is obviously, as you reported earlier tonight and proved for her, but it's hardly a done deal. And you know, I don't think we can shut the door anything happening. I do think Trump's behaviors are becoming more and more erratic, to put a gentile word on it.

LEMON: Yes. And he had a couple of good weeks there in September. But then the last week, just after the debate, it just sort of went south.

I want to play this for you. Because there's a rally in Colorado tonight where he got into hot water discussing recent racial tensions. Take a look at this.


TRUMP: We're a divided nation. And each week it seems we're getting more and more divided. With race riots on our streets on a monthly basis. Somebody said, don't call them race riots, but that's what they are. They are race riots.


LEMON: Frank, what's your reaction?

RICH: I mean, certainly race is at the heart of some of the disruptions in American cities over the past couple of years. But on a monthly basis? And what does he know about it? I mean, he's just, you know, he's grabbing a few headlines. He has nothing to say about it, except the same thing he says about everything. Everything is terrible. America is going to hell. And I'll make it great again. That's his message. It doesn't matter what the subject is.

LEMON: Well, let's talk about the polls. And maybe indicating some of that, maybe some of his messages are part, you know, maybe bouncing off. You know, certain individuals or certain groups that he needs.

This is the latest poll that is out today. It shows that Hillary Clinton has a five-point lead over Donald Trump after the debate. What does she need to do in order to maintain that lead, and what can he do to change things for him?

RICH: I think, you know, she's a somewhat lackluster campaigner, but she was very good in the debate, particularly in contrast him. I think she should just keep doing what she's doing and let him act out.

I mean, that crazy thing he did when he imitated her having trouble getting to the car because she had pneumonia. And look at this debate that's coming up Sunday night, the next presidential debate. It's a town hall format.

That means Trump can roam around the stage, not something he's used to doing, has to interact with all sorts of people, not just moderators. If I were Hillary Clinton, I'd stand back and let him put on a show.

LEMON: Yes. And then for him, you would say, probably stick to the teleprompter, correct?

RICH: Right. But you can't do that in a town hall format in a debate.


RICH: Unfortunately for him.

LEMON: Yes. And you know, in this week's issue of New York magazine I want you to take -- you take a look back at the timeline there. And here's what he theorized in this magazine.

You said "Of all the storms that roiled America in the Obama era, few, if any, have been more consistently underestimated or more persistent than the great populous push. The tidal wave of grassroots rage that rose out of the wreckage of the 2008 crash and the Bush presidency has variously spawned the tea party. Occupy Wall Street, the Bernie Sanders revolution and Donald Trump insurgency. Yet for much of the way, the elites on both political parties -- of both political parties were often slow to grasp what was happening and Barack Obama was no exception."

Explain, what do you mean by that?

RICH: What I mean is, this is, now, everyone recognizes it. There's this tremendous wave of discontent. It's taken different forms and found different champions. But both parties failed to recognize it. Obama was sort of, you know, sort of laughed about the tea party, unlike the rest of us laughed off Donald Trump when he started running for president.

The Republican Party did the same thing. When the Republican Party nominated Mitt Romney in 2012, you could hear, you know, on talk radio and so on, that a very unhappy republican base that would knock out all of Trump's opponents this year.

So, it's a big issue for the country. And what's scary to me is no matter who was elected, I'm not sure our system is yet able to cope with it, or deal with it, or help assuage it, you know, in any way.

LEMON: It's certainly interesting that a lot of establishment republicans don't support Donald Trump. Donald Trump hasn't been conservative for, you know, most of his time. He said some things that lead people to believe that he's actually more liberal than he is conservative, yet he still has this grassroots support, and very big support among conservatives, among your everyday conservatives.

RICH: Right. I think it's hard to characterize Trump by any ideology because he doesn't have one. His opinions change from day to day. They can be liberal one minute, conservative another, whatever.

You know, he just -- you know, he likes Putin. You know, on abortion, he can have three opinions in two days. So, I don't think -- I think that people in the republican establishment, those who are still are supporting him, including the congressional leaders of the Republican Party, hope he's going to win.

[22:55:06] That's why they support him. They hoping he's going to win and they don't want to stand up to a base that loves him and that voted for him in the primary. So, they're intimidated by their own voters.

LEMON: You also mentioned in that article that I spoke about just a moment ago that the same rage that fueled Trump's movement also fueled Bernie Sanders supporters. I mean, if that's true, would Bernie Sanders have posed a bigger challenge to Trump than Hillary Clinton had be become the democratic nominee?

RICH: I really doubt it because he's from a small state. He's a real classic liberal, whereas, Hillary Clinton is more of a centrist. I think -- I just think that Hillary Clinton and Bernie Sanders were apples and oranges. And she has a challenge now. She has to get her -- his voters to turn out for her. And it's proving quite a challenge.

But I don't think he would have necessarily done better. For one thing he had very little support among African-Americans.

LEMON: Thank you, Frank Rich. Always a pleasure.

RICH: Great talking to you, Don.

LEMON: When we come right back, Alec Baldwin's star turned at SNL's Donald Trump. Will it change how voters feel about the real Trump?


LEMON: Hillary Clinton gets a post-debate boost in our new poll.

This is CNN TONIGHT. I'm Don Lemon.

[22:59:59] Clinton five points ahead of Donald Trump nationally. That's in the wake of one piece of bad news after another for the Trump campaign. The New York Times reporting that Trump wrote off $916 million in losses in 1995.