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White House Struggle to Respond to Journalist's Apparent Murder; Mueller's Team Quietly Working Towards Possible New Indictments; Report: Trump Organization Uses Deceptive Practices. Aired 7-7:30a ET

Aired October 18, 2018 - 07:00   ET

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


(BEGIN VIDEOTAPE)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: We need Saudi Arabia in our fight against terrorism. We'll get to the bottom of it.

[07:00:05] UNIDENTIFIED MALE: I cannot imagine anybody doing that without MBS having said, "Make this happen."

UNIDENTIFIED FEMALE: Pompeo told the crown prince it's his responsibility. He has to own it.

UNIDENTIFIED FEMALE: This is not working. They're really giving him a free pass at this point.

UNIDENTIFIED MALE: Rosenstein said that the Mueller investigation is appropriate and independent.

UNIDENTIFIED MALE: That is Rosenstein building a wall to protect Mueller, knowing that Trump may move in.

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Paul Manafort was cooperating. He has been in with the special counsel team nine different times.

UNIDENTIFIED MALE: We're expecting November and December to be extremely busy.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

JOHN BERMAN, CNN ANCHOR: All right. Good morning and welcome to your NEW DAY. Alisyn is off. Erica Hill joins me this morning, which is awesome.

ERICA HILL, CNN ANCHOR: Always a pleasure to be with you.

BERMAN: All right. This morning, the Trump administration and Saudi officials, they're trying to get their story straight. "The Washington Post" reports they're working on -- listen to this, a "mutually-agreeable explanation" for the apparent death of journalist Jamal Khashoggi. In other words, they're trying to explain away a murder.

Sources tell CNN that Secretary of State Mike Pompeo private warned the Saudi crown prince that his future as kind is in peril if he does not own the incident.

Now, why did they do that? Well, Pompeo was roundly criticized for this very smiley appearance with the Saudi crown prince, so people close to Pompeo wanted the world to know that, behind closed doors, he was tough with the Saudi leader. He is expected to brief the president in about three hours. As we said, we don't know what the demeanor will be, because the president himself has been dismissive of the events in Saudi Arabia.

One of the questions is will the mutually-agreed version of events be a factual version of events? This is what the secretary told reporters last night.

(BEGIN VIDEO CLIP)

MIKE POMPEO, U.S. SECRETARY OF STATE: I don't want to talk about any of the facts. They didn't want to either, and that they want to have the opportunity to complete this investigation in a thorough way.

(END VIDEO CLIP)

BERMAN: In a thorough way, but they didn't talk about facts.

One problem: the president seems determined to provide cover for the Saudis, despite mounting evidence of their involvement in Khashoggi's disappearance. The president claims he just wants to find out what's happening.

HILL: All of this going on as Special Counsel Robert Mueller is continuing his investigation. We know that there have not been leaks out of that investigation, very quiet, but plenty of activity especially as we near the midterms.

His team, we're learning, has had at least nine meetings in the past four weeks with former Trump campaign chairman Paul Manafort and his lawyers.

White House insiders expecting more indictments after the midterms. A final report, some say, could be released by the end of the year.

Deputy Attorney General Rod Rosenstein, meantime, granting a rare interview to the "Wall Street Journal," insisting the probe is, in his words, appropriate and independent and going on to say, "The public will have confidence that the cases we brought were warranted."

Joining us now, former federal prosecutor and CNN chief legal analyst Jeffrey Toobin; former Clinton White House press secretary and CNN political commentator Joe Lockhart; and CNN White House correspondent Abby Phillip.

And Abby, I just want to start with you, because it's fascinating what we've seen overnight, this -- this -- you know, the reporting that they're working on getting their story straight, which is remarkable, to put it mildly.

Any further clarification out of the White House this morning on what that story should be and whether it should be, in fact, based in fact?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, what we already know is that President Trump has one thing that he said is his -- maybe his line in the sand, which is that if the crown prince and King Salman knew in advance that this was going to happen to Jamal Khashoggi in the embassy, that would be different for him than some other scenario, perhaps, in which there were rogue killers or people who went off the reservation and did this without their foreknowledge.

But at the same time, we also know that the administration wants the Saudis to do their own investigation. There are a lot of people who call that into question that very premise, that the Saudis could even investigate themselves in even a most basic fashion.

So it suggests that the administration still wants the Saudis to take the lead on this to figure out their own story before making a determination. And some of that -- some of what President Trump is going to be deliberating on in the next couple of days is whether or not the explanation that the Saudis come up with is plausible, whether it will fly in the global community and domestically for this president. And it's not clear that it will.

There is already evidence that no one believes that the Saudis could possibly have not had knowledge of what was going to happen in their consulate that day.

So the bar is pretty high, I think, for the administration to find that, you know, plausible mutually-agreeable explanation that would not make them look like they're complicit in perhaps a cover-up.

BERMAN: Jeffrey, the language in "The Washington Post" is flat-out stunning. A mutually-agreeable version of the events. When you juxtapose that sentence from "The Post" with what we heard out loud from the U.S. secretary of state, which was we want to talk about the facts. They didn't want to talk about the facts. We're not going to talk about the facts, but we want to come up with a story?

[07:05:08] JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Exactly. Look, I mean, what clearly this is heading towards is some sort of explanation, as Abby suggested, that this group did something in the consulate in Turkey that was unauthorized by MBS, by the prince. That they are going to come up with some sort of explanation that this was an unauthorized activity. And the Americans and tje Saudis will agree, this was terribly unfortunate, these Saudi -- this hit team, you know, did a very regrettable thing, but they are determined to keep MBS off of the level of responsibility and continue the relationship as before.

HILL: We should also point out, too, just in terms of what we've heard from the president in this A.P. interview, when he talks about it, he says -- and I'm quoting here, "When I spoke to the father," meaning King Salman, "it just sounded to me like he felt he did not do it." So that's also where we're at. Right? I mean, we have this phone call. We knew -- we knew about how the president felt about that phone call afterwards in terms of, "Well, you know, he denied it. He denied it very strongly."

TOOBIN: You know, the president, as we all know, has this pattern of agreeing with autocrats when they deny wrongdoing, whether it's Putin, whether it's Kim Jong-un, whether it's Duterte in the Philippines. He always believes autocrats when they say they don't -- he doesn't believe women when they accuse men of sexual harassment, but he always believes autocrats.

BERMAN: Joe Lockhart, if only there were a guy in the administration who had the ear of the Saudi crown prince. If only there were a guy with maybe his WhatsApp number. If only there were a guy with a friendship, you know, who would party on yachts with him occasionally and set up big summits between the leaders there.

Jared Kushner is supposed to be friends with the Saudi crown prince Mohammad bin Salman. He's supposed to be the type of guy who can pick up the phone and say, "Hey, buddy, fix this. Fix this now," or, "Hey, buddy, what happened? Did you order a murder?"

But that doesn't seem to be happening. Jared Kushner, who likes to claim credit for things, seems to be, you know, sinking into the background on this.

JOE LOCKHART, CNN POLITICAL COMMENTATOR: Well, I mean, it's pretty remarkable that Jared Kushner, with no foreign policy experience, and who was bailed out of a terrible deal in New York by the Saudis, is the architect of our policy.

But I think, overall, we just watched this movie a few weeks ago, which is the president and his team deciding, "Let's decide what the result is, and then let's do an investigation that gives us that result" with Brett Kavanaugh. They had a set of facts that they wanted to prove, and then they did an investigation to do that. They're doing the same thing here.

The other point I'd make is, stagecraft is always important in foreign policy. Pompeo had a chance to go and say something on Saudi soil about how important this is to America and the international community. And he failed.

I get that maybe he didn't want to embarrass them there, but he's been back in the United States now for, what, 24 hours. He still hasn't said anything. We have to rely on sources.

Well, I don't believe sources. I don't believe that he went in there and was tough. Somebody has to come out and say these things, and we're not hearing it from the Trump administration.

HILL: So you're saying you don't believe he was tough. We do know that there was definitely some pushback, which is where I think some of that is coming from: "Hey, we want to let you guys know that he was tough. He said that MBS had to own this" after we saw all those smiling photos. But Abby, in terms of the messaging from the White House, we hear from

the president. Behind the scenes, how much of a scramble, though, is there to keep these messages in line and to continue with what the president wants to put forward as this very tough stance, which you know, is contrary to what we're seeing?

PHILLIP: I think that what we are really seeing from this White House is slowness, not necessarily a scramble. They are trying to deal with this as slowly as possible so that they can figure out in real time how to deal with the facts as they're unfolding.

I mean, as you know, it's not just what the White House wants. The Turks are also carrying out an investigation, and they're being very, very clear about what they are finding. They are saying that there is audio. They're saying in very specific terms about what -- the gruesome things that they alleged happened in that consulate.

And the administration appears to be waiting to see what all is going to come out from what the Turkish officials are finding before making a determination about how to go forward.

And the other thing that's happening is that, as often as the case in this administration, you have officials waiting to see how President Trump responds.

How is the president going to respond to the media coverage, for example, of all of this? We know from our sources earlier this week he was irritated, that he felt like the administration was being blamed for this earlier this week. So media coverage factors in as much as anything else into how the president deals with this.

[07:10:00] And what you have is people like Mike Pompeo basically just trying to slow this whole thing down, put the brakes on it until President Trump can settle on how he wants to move forward. And then the administration will move into gear executing that plan. But I think it's a wait and see mode right now as President Trump feels out the fallout from this whole situation.

BERMAN: Look, as Jake noted yesterday, the president has been stunningly dismissive so far of the whole thing.

But in the realm of the investigations, Jeffrey Toobin --

TOOBIN: Yes, sir.

BERMAN: -- there's something called the Mueller investigation going on.

TOOBIN: Indeed, there is.

BERMAN: Our friend Evan Perez and his team, they did some really interesting reporting yesterday, which was to tell us what's been going on while we haven't been looking, but they have, at federal courthouses and the like.

Paul Manafort has had nine meetings with Special Counsel Robert Mueller's teams. There's been all kinds of testimony taken by people close to Roger Stone. There have been people running back and forth to the courthouse clerk's office with documents. There seems to be a lot going on in Mueller world.

TOOBIN: Well, there are two things going on. There is an investigation that is proceeding. And the second things is there are no public disclosures.

After the James Comey interference in the 2016 election, the one thing the Mueller team is not going to do is come out with any significant news in the last month before the election, which is where we are now. So we are not going to hear anything, probably.

But as our team has reported, they are continuing their work. And afterwards, the question of will there be more indictments; will there be the first of probably several public reports from the Mueller office turned over to Rod Rosenstein, if Rod Rosenstein is still there after the midterms, that is going to be a period when we start to hear publicly again from Mueller.

BERMAN: What does it tell you, though, that Manafort has been in there so many times? What does it tell you that Michael Cohen has been meeting with federal investigators?

TOOBIN: You know, I want to be very careful about that, John. You know, they are obviously people who are very important in this investigation, but their repeated presence, does it mean there's going to be another indictment? I just really don't know that. And I, you know -- I try not to speculate more than is justified. And just the fact that they've spoken often, I don't think tells you anything in particular.

HILL: What is sort of remarkable -- not even sort of, what is remarkable is this interview that Rod Rosenstein gave to "The Wall Street Journal," the fact that he invited him into his office and said, "Come on. Sit down." And in his words, told them, defending the Mueller inquiry as appropriate and independent. And really, Joe, putting a very specific message out there about this investigation, which obviously, runs contrary to some of what we've heard from the president. What do you make of that decision and the timing?

LOCKHART: Well, I think it's a shot across the bow to Trump that -- that this is coming. I think Mr. Rosenstein wants this thing wrapped up. I think that's been in some of the reporting.

So it was a direct message that something is coming, you know, sometime after the midterms. No one really knows. And that it is going to be the result of investigative work and Mueller's -- you know, has Mueller's integrity attached to it, not -- and it should stand up to the political pressure and attack that it will get.

I mean, again, the remarkable thing -- Jeffrey talked about it -- I think everybody, as we get ready for the Mueller report, should go back and read Jeffrey's book on the Starr investigation, because it kind of lays out how not to do it.

We don't know what Mueller has, and that's the way it should be. He's done this work very responsibly, and we all just have to wait now.

BERMAN: You know, Abby -- go ahead.

TOOBIN: Let's talk about what a brilliant man Joe Lockhart is.

BERMAN: I was going to say.

TOOBIN: With exquisite literary taste. The book is called "The Vast Conspiracy." Just so you know.

BERMAN: Whose book was that? Do you know anything about Patty Hearst?

TOOBIN: That's right. We have --

BERMAN: So Abby, what Joe is getting at, in addition to selling books for Jeffrey Toobin there, which is that nothing in Washington happens by accident. And Rod Rosenstein, the deputy attorney general, who doesn't really talk to the press, invited a "Wall Street Journal" reporter in; invited a reporter in for a sit-down interview to answer questions on the record, out loud, about the Mueller investigation.

You just have to wonder what's going on there, especially when he apparently had a friendly plane trip with the president where they talked about staying on the job at least for another three weeks.

PHILLIP: Yes, I mean, John, you would almost be forgiven for forgetting that, just a few weeks ago, we thought he might be fired on the spot in the White House, because he was allegedly discussing using the 25th Amendment to remove President Trump. So this is quite a sea change.

But there is a relationship between that "Wall Street Journal" interview, and that episode in which Rod Rosenstein wasn't sure if he would have a job or not.

And it is that the president did decide not to fire him, and he did that because there is real concern that, if it looks like he's trying to undermine the investigation, that could create more political problems for him, especially if, after November 6, the House flips to the Democrats.

[07:15:00] So I wouldn't be surprised if what Rod Rosenstein is trying to do is basically saying, "Look, I'm still in charge of this investigation. I still have confidence in it. It is still going along, and the president is not trying to fire me right now. He's also not trying to undermine the investigation by firing me or by doing other things."

It's all part of an effort to let everybody know that it's -- Mueller is being allowed to work. And I think the president, despite what everybody thinks about the president wanting, really, to fire Mueller, wanting to undermine the investigation, I think he also gets that there could be political fallout from that; and he's trying to avoid -- avoid that at the moment. Now, what happens after the election is anyone's guess, but at the

moment, they want to send a signal that he's not trying to do that in a way that could potentially have political consequences for him and for his party right now.

BERMAN: I mean, after the election, it's no longer an abstraction. It's two and a half weeks away. You know, it's 20 days. Soon enough we'll find out there.

Let me read you part of what Rod Rosenstein said here: "'I committed that I would ensure the investigation was appropriate and independent and reach the right result, whatever it may be,' Mr. Rosenstein said, referring to comments he made during his confirmation hearing. 'I believe I have been faithful to that'" -- Joe.

LOCKHART: Yes, I think, again, it was a message to Trump. And I think there even may be a message in there to Mueller, which is, "OK, this has gone on long enough. Let's wrap this up."

And, you know, we're just going to have to wait and see. We don't know. Frankly, that's -- that is the right place to be.

BERMAN: Toobin knows, but he's not telling us.

Jeffrey Toobin, Abby Phillip, Joe Lockhart.

TOOBIN: I wish I knew.

BERMAN: Pretty much -- part of your next book, no doubt.

AVLON: Actually --

HILL: Well played. The three of you are in cahoots, I'm realizing.

BERMAN: Exactly. Exactly.

TOOBIN: It's true.

BERMAN: It's funny because it's true. Thank you very much.

And month-long investigation reveals how the Trump family does business. Dozens of deals examined show patterns of deceptive practices. One of the reporters on the story joins us next.

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[07:20:58] BERMAN: An eight-month investigation reveals the president and his family regularly misled and deceived potential investors and buyers in order to profit off their real-estate projects.

Joining us now is one of the reporters on this investigation, Heather Vogell. She's a reporter for "Pro Publica" and WNYC's "Trump Inc." podcast.

Heather, thanks so much for being with us. This is a fascinating, really interesting read. Let me just read one part of this out loud: "Patterns of deceptive practices occurred in a dozen deals across the globe as the business expanded into international projects, and the Trumps often participated. One common pattern, visible in more than half of those transactions, was a tendency to misstate key sales numbers."

What do you mean by that?

HEATHER VOGELL, REPORTER, "PRO PUBLICA": Right, exactly. Thanks so much for having me on.

What we found was that what the Trumps were doing was they would go out, and they would publicly say things like, you know, in Panama, Ivanka saying, "We're more than 90 percent sold," when in fact they were only 79 percent, at best, sold at that point. In Soho, it was they were 60 percent sold when they were only 15 percent sold at that point.

Donald Trump at one point was talking about the Ft. Lauderdale project, and he said, "We were pretty much sold out" when they were only about 62 percent sold.

So it was -- and these were statements that were meant to increase the confidence in people who were considering investing or buying in the projects.

BERMAN: They were saying things that were not true and are provably false?

VOGELL: They were demonstrably false. Let me play you -- it's not like they were hiding this at all. In fact, President Trump, then just celebrity Trump, actually did some of this on "The Apprentice." Let's watch this.

(BEGIN VIDEO CLIP)

TRUMP: Honolulu's world-famous Waikiki Beach is one of the most popular tourist destinations on earth. That's why I'm building the magnificent Trump International Hotel and Tower here. The Trump International Hotel and Tower will feature just over 460 units with state-of-the-art amenities and breathtaking views.

(END VIDEO CLIP)

BERMAN: And then he told "The Wall Street Journal" that "This building is largely opened by me and being developed by me." Which wasn't true.

VOGELL: That was the other pattern that we saw, was the Trumps representing that they were the developers, that they had a financial stake in these deals, and it gave the impression that they had basically -- were risking their own money in them and that they were more involved financially than they were.

BERMAN: One of the things we know is that his -- when he remade his fortune after losing all the casinos and whatnot, it was by licensing and that was by selling his name, but -- which he would do. He would do, and he made a lot of money off of that, and that's a good business. But then, at the same time, he was claiming to have his own money in these buildings. Why was that important for selling things?

VOGELL: Well, that was important, because they were trying -- you know, these were deals that needed outside investment, and in order for that to happen, you needed two things. You needed buyers. You needed people to commit to buying these buildings, into these buildings, even before they were built. And you also needed lenders. You needed people to lend money, and the lenders would be watching the buyers to see how many people bought into them.

So, you know, what the Trumps were -- their job was to go out and drum up the buyers, which is, you know, fine. The problem is that they were saying things that were not true in order to do that.

BERMAN: Or they were lying, if you read your story, you make that case. So not true, does that mean illegal?

VOGELL: Well, that's a very good question. There were prosecutors in New York that had wanted to indict Trump's children for making some of these misstatements.

We had a -- we spoke with one federal prosecutor who said that the patterns of behavior we described bore a resemblance to the elements that he'd seen in fraud prosecutions and fraud investigations. You know, fraud is not unusual in real estate, unfortunately, but it is illegal. And in this case there were a lot of people that were hurt.

BERMAN: But they were not prosecuted; have not been prosecuted.

VOGELL: They have not been prosecuted.

BERMAN: And as far as you know, any active efforts to do such?

VOGELL: I don't know anything of any.

BERMAN: And you did bring up the kids there. Ivanka Trump is all through this story you wrote. And we often hear the president inflating numbers to sell things, but what was really interesting was seeing her do the exact same thing. Explain.

[07:25:11] VOGELL: I found that very surprising, as well, that it was actually Ivanka who was making a lot of these statements.

She came into the Trump Organization in the mid-2000s, and Panama was supposed to be her baby, her first big deal. And we found quite a few misstatements she made in promoting that project.

BERMAN: Yes. We have this right here. In 2008, Ivanka told reporters that 60 percent of units had sold. This is in the Soho building. The reality, a Trump Partners affidavit revealed that 15 percent had been sold at the time. The result of that is that that building went bankrupt. And it was a similar case in Panama City.

VOGELL: Yes, I mean, and that was, to me, what was really striking with these deals. It was one of the things that got me interested is so many of them failed. They go bankrupt, foreclosure. They were never constructed. They were partially constructed. And it just raised these questions to me of, you know, why is Trump doing this? Why are people partnering with him?

BERMAN: And "The New York Times" story from a couple weeks ago really blew a hole in the notion that he was only given $1 million by his father to make his entire fortune. We now know that not to be the case. And this story sort of, not blows a hole, but it really draws questions about what he did after the year 2000 and whether or not everything he said about his fortune after that point was true.

VOGELL: Yes, this was a very lucrative -- lucrative, you know, way of -- business model for him. He was making, you know, at least tens of millions of dollars. There's no full public accounting of everything he made from these deals.

BERMAN: Heather Vogell, thanks so much for being with us.

VOGELL: Thank you.

BERMAN: Among other things, you grew up with Erica Hill. Which may be -- which may be the buried lead here.

Thank you much for being here.

VOGELL: Thank you very much.

HILL: A good fun fact. We've always got those for you.

An embarrassing error in a campaign ad. Democratic Senator Heidi Heitkamp apologizing for mistakenly identifying some women as abuse survivors. One of those women is with us next.

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