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ANDERSON COOPER 360 DEGREES

New Poll: Trump Campaigns in Colorado; Trump: I Am A Big Beneficiary of Tax Laws; LeBron James Endorses Hillary Clinton; Swing State Polls Show Post-Debate Shift; NY AG Orders Trump Foundation to Stop Fundraising; Invisible Men?; VP Candidates Prepare To Face Off. Aired 9-10p ET

Aired October 3, 2016 - 21:00   ET

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


(COMMERCIAL BREAK)

[21:00:33] ANDERSON COOPER, CNN ANCHOR: Thanks for joining us tonight on "360".

Donald Trump just wrapping up a large rally tonight in swing state, Colorado. He spoke for about an hour, covering a broad range of topics, touching briefly on that "New York Times" story and how little he might have paid in taxes over a span of 18 years. There's that, as well as breaking news on a batch of new polling and more.

Our Jason Carroll is at the rally site in Loveland, just north of Denver. He joins us now.

So Trump addressing a really huge crowd. They're very enthusiastic to be addressed to -- or what did he say specifically about taxes?

JASON CARROLL, CNN NATIONAL CORRESPONDENT: Well, you know, once again, Donald Trump, as he did in his rally a little earlier in Pueblo, trying to turn the tables on this whole tax controversy, Anderson, basically saying that he used the tax laws that are in place to beat the system. He said, basically, quote, he said, "My job was to minimize the tax burden, not only on himself, but also on his family."

And when he addressed the crowd here, Anderson, he freely admitted that he benefited from the system that's in place.

(BEGIN VIDEO CLIP)

DONALD TRUMP, (R) PRESIDENTIAL CANDIDATE: The unfairness of the tax laws is unbelievable. It's something that I've been talking about for a long time. You've heard me talking about it. Despite being a very big beneficiary, I must admit. I am. 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.

I understand the tax laws better than almost anyone, which is why I am the one who can fix them, and that is what I commit to you. I will do it. As a businessperson, I've legally used the tax laws to benefit, really, I mean, it's to my benefit, and to the benefit of my company, my investors, my employees, my family.

(END VIDEO CLIP)

CARROLL: He also had, Anderson, Trump surrogates like former New York City mayor, Rudy Giuliani, Chris Christie, some of his surrogates out there, basically saying, look, Donald Trump is a financial genius for what he did. But going forward, what the GOP is going to have to sort of grapple with is, if it's OK for someone who's rich to beat the system, is it then OK for someone who's poor, possibly, on public assistance, to be able to legally beat the system as well? Maybe that will be a discussion going forward. We'll see.

But as for what happens right here, in this room tonight, the crowd really seemed to buy into Donald Trump's explanation.

COOPER: Turning to his -- I understand he also spoke about Clinton as well as Sanders?

CARROLL: He did. He did. We heard a lot of criticism about Hillary Clinton, basically, saying that she is the candidate of distraction. And something that we've heard before in reference to Bernie Sanders, he said that Bernie Sanders essentially signed a deal, what he said, signed a deal with the devil. It was interesting to hear him call Hillary Clinton a candidate of distraction. He said also that she likes to focus on small, petty things.

That's interesting, because, as you know, Donald Trump's own supporters some within the GOP have accused Trump as being basically the candidate of distraction. They wanted him to get off criticizing like a former Miss Universe and get on to addressing the issues heading into the debate.

COOPER: Jason Carroll, Loveland, Colorado. Jason, thanks.

From here on out, you can pretty much map out the days of the candidates in a correspondent swing state by swing state. New polling tonight in a number of those battlegrounds, including Ohio, where Hillary Clinton certainly joined the battle. More from Jeff Zeleny tonight.

(BEGIN VIDEO CLIP)

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Hillary Clinton returning to Ohio for the first time in more than a month.

HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: Hello, Toledo.

ZELENY: Just on time to seize on Donald Trump's taxes, or as she said, his lack of paying them.

CLINTON: In other words, Trump was taking from America with both hands and leaving the rest of us with the bill. ZELENY: Clinton is touting a "New York Times" report that says Trump may have avoided 18 years of federal taxes, after declaring a $916 million loss on his 1995 returns. She used it to raise more questions about one of his biggest selling points, his success as a businessman.

CLINTON: Yesterday his campaign was bragging, it makes him a genius. What kind of genius loses $1 billion in a single year?

[21:05:00] ZELENY: She's trying to erode Trump's Ohio advantage, and win over voters without a college degree, who are overwhelmingly siding with him.

A new Quinnipiac Poll today shows Trump up by five points in Ohio. She's made such infrequent visits to this key battleground state, the "Toledo Blade" wrote last week, where is Hillary? In two stops across Ohio today, Clinton pushed back hard, saying her policies would benefit working class voters far more than Trump's.

CLINTON: And you know, he has been dissing America in this whole campaign, right? He talks us down. He makes disparaging comments about our country.

ZELENY: She's hoping a new superstar endorsement will also help.

CLINTON: I hope to be elected president, but I know here in Ohio, LeBron will always be the king.

ZELENY: Cleveland Cavaliers' basketball great, LeBron James, said the children of his native Akron, and all cities, need Clinton in the White House. He wrote, "Hillary is running on the message of hope and unity that we need."

(END VIDEO CLIP)

As Hillary Clinton tries to build momentum for the second debate on Sunday, her campaign believes there may be a new opening for those white working class voters here in Ohio and elsewhere that they have struggled to win over. They believe that tax returns and the questions raised by them could give some of these voters a chance to give Hillary Clinton a second look. Anderson?

COOPER: Jeff Zeleny. Jeff thanks.

As we said, new polling from more than just Ohio, where Donald Trump has managed to increase his lead from last month by 8 percentage points. Plus, new CNN/ORC national number showing Hillary Clinton taking a 5-point lead among likely voters since the first debate, 47 to 42. Her gains coming largely from men where she's shrunk a 22- point gap to just five points now.

As for the new state by state polling, let's bring in our Tom Foreman who's been doing the heavy lifting all day. What's the breakdown, Tom?

TOM FOREMAN, CNN CORRESPONDENT: Hi, Anderson. Let's start with the big electoral prize down here. Quinnipiac looked at Florida, the Sunshine State, where Clinton came from a deadlock a month ago to now have a lead, 46 percent to Trump's 41 percent. People there thought she won the debate and they're rewarding her. Johnson at 5 percent, Stein at 2 percent, by the way.

If you move a little bit north up here to the light blue state, Virginia, same sort of story. People thought she won there. She's now at 42 percent, Trump is at 35 percent. Importantly, she made gains with millennials and with independent voters there, both groups, she said, she really needs.

But let's move up towards that Rust Belt, where Jeff was just a minute ago. In Pennsylvania, different story. They still think she won the debate, but not nearly the kind of balance she wants up there. She's at 45 percent, Trump was still at 41 percent in Pennsylvania, where he's been pushing that message that the entire Rust Belt has been hurt by her policies, particularly on trade, and I'll tell you, Anderson, across the line in Pennsylvania, LeBron James doesn't have as much influence.

COOPER: What about the western battleground battlegrounds, any movement there?

FOREMAN: Yeah. It's very different out in the west and different issues to consider. For example, Nevada over here, in yellow, this is a place that Democrats count on, having a strong showing, and Trump gave them a little bit of a scare. So they rallied their union folks out there and said, you need to come out and support this Democrat. That seems to be paying off. She's now 44 percent compared to 38 percent for Trump in a Suffolk Poll out there.

And then if you move to Colorado, light blue over here, same situation. Trump made a run at it, had them a little bit nervous, but big surge by Clinton. She is now very comfortably at 49 percent to 38 percent. Remember, Colorado voted for Barack Obama, the Democrat, in 2008, and 2012. It looks like Coloradans may be ready to go that way again. Anderson?

COOPER: All right, Tom Foreman. Tom thanks for breaking it down.

After weeks of warning viewers that polls really start mattering now, here we are, back with the panel, Maria Cardona, Van Jones, Paul Begala, Kayleigh McEnany, Jeffrey Lord and Andre Bauer.

Jeff, let me start with you. I mean, with these polls clearly not moving in a direction that's great for Trump, critically in Florida, Pennsylvania, and Nevada, without those three states, can he win, in your opinion?

JEFFREY LORD, TRUMP SUPPORTER: No. He certainly need some of these states, no question. I think he needs them. In my personal opinion, as an unbiased Pennsylvanian, he needs Pennsylvania. He was just there on Saturday. Huge crowds. I mean the Harrisburg "Patriot-News" ran a whole story saying that Democrats are making a huge mistake underestimating him, because these people, I mean, not only as he's done, and I've been to two of these things myself, not only are these huge arenas filled, there's thousands outside who can't get in. Hillary Clinton will be in Harrisburg in the next day or so, we'll see what kind of crowd she gets.

COOPER: Paul, what about -- because I mean I remember, I don't know, six weeks ago, John King sort of showing the electoral map, saying Trump only had a very slim window of how to get to 270. Then all of a sudden within a matter of weeks, it seems like there were multiple paths, and now here we are saying, oh, these latest polls show it's closing down for Trump.

PAUL BEGALA, PRO HILLARY SUPER PAC ADVISER: There was still only the path through Florida, Ohio, Pennsylvania. And Jeffrey's from Pennsylvania. This will shock you, but neither of us have a life. And so this weekend he was e-mailing me from, saying (ph) that Trump was out there campaigning. He went to Manheim, P.A., Lancaster County, a population of less than 6,000, and drew more than 6,000.

[21:10:02] A guy like me says that's pretty impressive. Now, but what we see in the polls is that his command of high school-educated white people is beginning to erode. Our last CCN poll, he was winning them by 44.

COOPER: Right.

BEGALA: President Obama lost them by 31.

COOPER: But she -- he's still winning by 22.

BEGALA: By 22. But President Obama was re-elected comfortably losing them by 31. College-educated white people, which no Democrat has ever won ...

COOPER: But you've always focused on that group.

BEGALA: Just disaggregated my fellow white people. I don't know if people with color can see, but I am white. But we divide by education. And Hillary is now in our poll, 13 points ahead among college-educated white people. I don't know if she can sustain that. But again, the president lost them by 12 and still won re-election.

It's a very difficult thing for both candidates, obviously, but for Trump it's much harder. His path is much more narrow.

COOPER: Van?

VAN JONES, FORMER OBAMA ADMINISTRATOR OFFICIAL: You know, and all this stuff makes me very happy. And I was very happy a couple of weeks ago. And then I was very sad, then I was very happy, then I was very sad. So ...

BEGALA: I'm here to make you sad. ObamaCare covers that now.

UNIDENTIFIED MALE: It's the only thing it covers.

JONES: But look, what I think is obvious to me, when Donald Trump does dumb stuff, he just bleeds off support. UNIDENTIFIED FEMALE: Yeah.

VAN: I mean, you've got people out there who want to support this guy, but he gives them, you know, nausea, when he does crazy stuff. And so Hillary Clinton has done a brilliant job. She looks great. She's loose. She's giving us a lot of confidence. But I think a lot of what's going on here is, when he jumps on the pogo stick and acts crazy, people notice.

COOPER: Kayleigh, I mean do you think this is sign A that he lost the debate which he keeps saying online polls say he won. Certainly, he publicly says that he won. Is this a sign that most people thought badly?

KAYLEIGH MCENANY, TRUMP'S SUPPORTER: I think that's part of it. I think he didn't prosecute the case against Hillary Clinton as strongly as he could have. But it is worth mentioning. I was by Van seven days ago during one of his sad periods, when John King was up there saying, there are now multiple paths to 270. I think we're seeing a lot ...

COOPER: It made you a little happy to see Van sad.

MCENANY: But I think, you know, we've had two historically unfavorable candidates, and we're seeing like a volleyball back and forth momentum.

COOPER: Right.

MCENANY: And it just shows that anything can change on a dime in seven days. These debates are crucial, they're important, and they probably ...

COOPER: Do you agree with that, Andre? That's it -- I mean, it is this back and forth, which is ...

ANDRE BAUER, TRUMP SUPPORTER: Absolutely. It is -- for political wonks, it's actually, you know, it's competitive.

COOPER: Right.

BAUER: It's impressive that many people are paying attention. I do think we're missing a little bit of almost a Brexit situation. When you look at these rallies, the people that are coming out that never get involved in politics that are coming out in droves for Donald Trump, that will be an impact ...

COOPER: And you don't think it shows ...

BAUER: And then the other thing is, is the minority vote. Everybody, well, most media pundits have said, he's going to get 1 percent. Every poll now is showing much greater than 1 percent and he has made inroads there.

MARIA CARDONA, DEMOCRATIC STRATEGIST: Yeah.

COOPER: Maria?

CARDONA: That I'm not so sure of. But I will say that a day is a lifetime in politics, right? Anything can happen. And so what I would say to Democrats is what I've said from the very beginning. Let's pretend she's 10 points behind, because we still need to mobilize all of our people. Clearly, she needs to get millennials. She needs to get all of the voters of color.

But I do want to point to one thing that I think is happening, and that is starting to sink in and to become part of the trend that is very dangerous for Donald Trump. He started after the debate, with the Alicia Machado debacle, right? He could not get out of that. We were talking about that just yesterday. That is starting to sink in. To who? To critical demographics that he needs. Latinas, women, and even men who have daughters, who have sisters, who have mothers, who understand what it is to have this language that is so demeaning to women, that is sinking in. This tax issue is going to sink in, about how this is somebody who might talk a nice populist game, but at the end of the day, he doesn't give an "S" about the working people.

COOPER: She -- Clinton though is five points behind in Ohio still ...

JONES: Yeah. I mean, listen, I mean, the trade issues there, she's not been able to recover from. Sanders does well on those issues a lot better than she does. You know, what's so interesting though is you watch Donald Trump, when he's giving that speech, there's an endearing quality there. When he goes, you know what, I am a beneficiary. So you see that's the sort of the billionaire, blue collar billionaire kind of guy that people like. That's very different than that makes me smart, the Gordon Gekko of, you know, the campaign.

And so, he goes back and forth between being the Gordon Gekko, I'm, you know, good, you know, I'm a smart capitalist and, you know, (inaudible) like maybe, you know, you should benefit too. And I think what happened to him in that debate stage, there was a moment when you saw that side of him and that's going to stick.

CARDONA: Yes.

BEGALA: And Hillary today changed her style a little bit. Her speech in Toledo was much more populist than the more wonky Hillary that we usually get. This is why it's good to go to Ohio. I'm glad the "Toledo Blade" was attacking her for not coming there. She needs to be out there with blue collar white folks. They are not lost to her. She has cut Trump's lead in half nationally, but she still has work to do in Ohio.

[21:15:02] But by the way, having LeBron James does not hurt at all with any voters ...

COOPER: In terms of the upcoming presidential debate, I mean, do you think Donald Trump is going to practice?

MCENANY: He has to. Look, he has to, because you have to prosecute the case against Hillary Clinton. That means ... COOPER: Which I think -- and you raised this that he did a good job of that early on ...

MCENANY: Yes.

COOPER: ... in the debate, particularly on trade issues.

MCENANY: You are not going to have a softball given to you. You're not going to have a moderator say, tell me about Hillary Clinton's e- mail server. And what Hillary ...

LORD: Wait, who's the moderator?

COOPER: If only we knew.

MCENANY: But you're not going to get that softball. What Hillary Clinton did effectively was she was given a question, let's say, about finances and she turned it around, she's talked about Donald Trump's taxes.

COOPER: Right. To make a case against Trump.

MCENANY: Yes. So, we have to practice that skill set.

COOPER: All right. We're going to take a quick break. More with our panel ahead.

Also, we'll dig deeper into precisely how Donald Trump and other real estate developers in the past could use the law to pay far less in taxes than most Americans and maybe even today.

Speaking of most Americans, do you know these two individuals? And which one is which? See how many voters are stumped by the vice presidential candidates, Governor Mike Pence and Senator Tim Kaine.

(COMMERCIAL BREAK)

COOPER: Well, Donald Trump said he brilliantly used the tax code to his own advantage, but now promises he'll be working for all Americans to change it. Hillary Clinton is questioning his head for business after declaring nearly $1 billion in corporate losses from 1995. How this ultimately plays out, of course, remains to be seen. He spoke about it again late tonight in Colorado, touting his business survival skills and what he painted as some very tough times.

(BEGIN VIDEO CLIP)

[21:20:01] TRUMP: The news media is now obsessed with an alleged filings from the 1990s -- a along time ago -- at the end of one of the most brutal economic downturns in our country's history. The conditions facing real estate developers of the early '90s were almost as bad as the Great Depression in 1929 and far worse than the Great Recession in 2008, which was nothing compared to the early '90s. These tough times were when I performed my best and enjoyed it in certain way the most. The economy and the banks collapsing, the government was a mess, but I enjoyed waking up every single morning to go to battle and it was battle.

(END VIDEO CLIP)

COOPER: And back with the panel. Paul, you talked about this in the last hour, but I find it really fascinating as someone who is involved with a pro-Clinton super PAC, you're actually putting money on this. That you believe this resonates so deeply with voters that it's worth running commercials.

BEGALA: Right, it's a couple of things. There's the fundamental argument and there's four words that almost everybody in America agrees with, and they are, the system is rigged. The system is rigged. Now, nobody argues that Trump rigged the system, right? He didn't cause it. He isn't running the tax code. But when he exploits it like that, I think it really undermines his populist appeal. And then when he says, it makes me smart, that kind of arrogance that Van was talking about a little while ago, that really alienates voters.

You know, 61 percent -- it's a Gallup poll earlier this year, 61 percent of Americans say yeah, the rich should pay more. So the next step on this, you want my prediction of where this is going, is it Democrats like me are going to come out and say, well, now let's look at what Trump's plan is on taxes. Here's what it is. It cuts the estate tax to zero. A guy who inherited a vast fortune now thinks other heirs should pay nada, zip. It has a multitude of other tax codes and they're all for the rich.

And in fact, there's a net increase for the middle class. So I think when you start plowing through what would he do as president -- we know what he did as a businessman, right? He really exploited a rigged system in a shocking way, but as a president, he would actually make a bad system worse.

COOPER: Do you agree with that, Kayleigh?

MCENANY: No. I mean I think that -- I would love to talk about financial corruption. And then this is why I don't think it will work because there's ample material for Hillary Clinton. You know, we can talk about her taking millions of dollars in speaking fees at college campuses, feeding off of a student loans that are paid by students who now have a ton of debt or millions from foreign governments, foreign governments, by the way, that aren't that friendly to females or the homosexual community, like we could go into all of this. There's so much material with Clinton. So an effective Donald Trump in a debate will lob back with this information.

COOPER: Jeff?

LORD: Yeah, yeah. I mean he is going to go after this entire -- Hillary's paying taxes, taking advantage of the same thing that Donald Trump took advantage of. And the point is she's saying elect me because I'm experienced. Part of that service comes as a United States senator. If the system's rigged, she had a chance to change it. And she didn't do it and she's benefited from not changing it.

COOPER: Van, is that an argument that you think is going to resonate? JONES: Well I mean that -- I mean, well, it will for some people. But there's a real big false equivalence there, and it's -- between this. I'm not great at math, but zero versus 30 percent. Zero taxes, which is Donald Trump, 30 percent which is Hillary Clinton. And, you know, she did take a deduction on $770,000, which made her very rich -- no, actually, it got her $3,000.

So I just don't think that, you know, if we go back and forth enough times I think of the ...

LORD: You know, she can double her own taxes, you know that. I mean she wants to tax the rich, the IRS takes your money. Anybody could raise their own taxes. I don't understand if she feels so passionately about this, why she doesn't do that.

JONES: I'm so glad you actually raised that, because she actually did not take advantage of all of her deductions.

CARDONA: That's right.

JONES: And I think that's a very good point.

LORD: Well she did -- she could have paid even more than that. I don't understand why she doesn't.

JONES: I think a couple things here. I think if you're just a normal person, you're watching this situation, and you're trying to figure out who understands me. Not who understands the system. I'm sure they both understand the system. But who understands me. The fact that Donald Trump can't figure out that ordinary people are going to have a lot of heartburn and rug burn about this, creates distance.

The brilliant thing about this guy is he's the most unlike any other human on earth but he has somehow convinced a big section of the country that he is just like them. That is an act of pure political genius, that is genius, but it's getting eroded over these last few days.

CARDONA: Yes. It's getting eroded because I think Americans are starting to see the reality of the kind of life that he led and the arguments that he is making for why they should hire him to be commander in chief. And they are crumbling before our eyes, the fact that he was a good businessman. He's complaining about things being tough business wise in 1995? The economy is going gangbusters. Everybody was doing well. So, he lost almost $1 billion -- I'm sorry, not a good businessman. He declared bankruptcy six times. I'm sorry, not a good businessman in most people's eyes.

[21:25:00] And two things I think are critical in the poll that just came out. Hillary Clinton is beating him heads and shoulders above where he is in terms of the candidate who understands middle class voters. That is a critical piece. She has led so far and she is like up 13 points even from where she was before.

In addition, majorities of Donald Trump's supporters believe that paying your taxes is a civic duty. LORD: Maria, the counter to this argument is, if Hillary Clinton were such an experienced politician and such a great secretary of state, why is the world in this mess? Why do we have all these -- why is the tax code a mess? She -- her on-the-job performance has left a disaster.

(CROSSTALK)

JONES: Listen, I admire Hillary Clinton greatly.

CARDONA: Talk about Colin Powell ...

JONES: One second. I admire Hillary Clinton greatly, but at no point was she god, emperor of earth. At no point was she even president ...

BAUER: But she could propose legislation ...

CARDONA: And she did plenty of that.

COOPER: Andre?

BAUER: She has no real accomplishments as a United States senator other than naming a courthouse. That is her signature. Only piece ...

JONES: That's not true. 9/11?

CARDONA: That's a 9/11 ...

BAUER: ... of legislation she passed.

JONES: That's not true.

BAUER: She talked about creating tens of thousands of jobs in upstate New York, but how many did she create, Van? None, they lost jobs.

BEGALA: On the tax -- first off, on the substance, she also extended benefits for soldiers who were in the National Guard ...

CARDONA: Yes.

BEGALA: ... not just in the U.S. Army. She did a lot on homeland security and national security in the Senate. But on the tax question, she opposed the Bush tax cuts. Which rolled back her husband had this radical idea that the rich should pay more and the poor should pay less. And the economy boomed. Bush reversed that and cut taxes for the rich and the debts squander, we went into a massive recession. Thank God President Obama came in and went back to the policies ...

(CROSSTALK)

BAUER: ... But 20 percent of the people of this country pay 85 percent of the income tax. So I know Democrats love to ...

BEGALA: They have the most income. (CROSSTALK)

BAUER: How much do you make them pay?

COOPER: We've got to end it there.

Just ahead, the cork in the tax code that may explain how nearly $1 billion loss recorded by Donald Trump in 1995 may have been a write- off of money actually borrowed from others. We'll explain that, ahead.

(COMMERCIAL BREAK)

[21:31:12] COOPER: Welcome back. Donald Trump often says he knows how to win. It's a line he uses over and over in his speeches. But just five weeks from Election Day, the spotlight is on the report by "The New York Times" and Trump's loss of nearly $1 billion in his 1995 tax returns.

Now, Trump has said he knows the tax code better than anyone and has used the tax laws brilliantly. Tonight, senior investigative correspondent, Drew Griffin, drills down on how a loss that huge may not have been a loss at all, at least not in the way that most of us would think.

(BEGIN VIDEO CLIP)

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: They are just three pages of what appears to be Donald Trump's state tax returns from 21 years ago. It's hardly enough to know the real picture of Donald Trump's wealth in taxes, but it is this stunning figure that has led to massive speculation, an almost $916 million loss. For what? Trump isn't saying.

But in the backwards logic of real estate developers, complex tax laws and the lawyers who exploit them, it could be that Trump has become wealthy, that he wins by losing.

STEVE ROSENTHAL, TAX EXPERT: Mr. Trump was a spectacular loser. He lost a lot of money from the casinos. He lost a lot of money from Trump Shuttle, the airline shuttle. And he lost a lot of money from the Plaza Hotel in New York, across the board, losing money, apparently.

Now, some of those losses may have been inflated by the generous tax sheltering that is afforded real estate developers of active managers of businesses.

GRIFFIN: We can't see Donald Trump's tax records, but experts speculate the $960 million loss may not exactly be a loss at all, at least not a loss of Trump's money.

Richard Lipton, a real estate tax expert in Chicago, says a quirk in an old law since changed in 2002, so favorably benefited real estate developers, that it is highly likely Donald Trump's 1995 write-off was actually a write-off of borrowed money. RICHARD LIPTON, TAX ATTORNEY: There was basically a real estate depression at that time. And the way the law worked at that point in time, if the losses were funded by debt, the losses would flow through to the developers, so you could easily see big numbers. I had one client who had a loss over $950 million during that time frame, individual, just like Mr. Trump.

GRIFFIN: How did it work? Take this simple example. A real estate developer wants to build a $100 million building. He puts up just $1 million of his own money and then borrows $99 million from a bank. If the entire project goes belly up, the bank loses its $99 million. The developer loses his $1 million, but on his tax return, that real estate developer can write-off the entire $100 million loss if the bank writes-off his debt, which happened a lot. Lipton, interviewed by speakerphone from Chicago, says it was an unintended gift from a poorly written tax code.

LIPTON: That was the quirk in the law, Drew. The tax payer did not have to pick up the cancellation of debt income, he just got the loss.

GRIFFIN: I'm gasping.

LIPTON: I understand why you're gasping, but it is just what the law said.

GRIFFIN: Taxpayer groups who keep an eye on Congress and the bills passed here say none of this is surprising.

RYAN ALEXANDER, TAXPAYERS FOR COMMON SENSE: That's exactly why we need to really look at the whole tax code and do a comprehensive reform and make decisions based on math, you know, kind of how much money do we need to raise to pay for the government that we collectively want?

(END VIDEO CLIP)

COOPER: Drew, I'm so glad you did that explainer, because it really sort of helps me understand and I think a lot of people. It sounds as if Trump may well have been taking those big write-offs based in large part on other people's money or the bank's money. Is there any way to know for sure?

[21:34:58] GRIFFIN: Well, there is certainly a way to know, if Donald Trump would just release his taxes. Show us what a genius he is and show us this tax strategy works.

But right now, we just have these three pages from a state tax form, 21 years old, and the rest of all of this is just all speculation on what it means.

COOPER: And Drew, there was some news today as well about the Trump Foundation.

GRIFFIN: Yes, the Democratic attorney general from New York over the weekend sent the Trump Foundation a letter saying, listen, you need to cease and desist any solicitation of money, because you are not properly registered with the State of New York. It turns out that the Trump Foundation hadn't filed the proper paperwork to be a legitimate charity in the eyes of the State of New York. So the attorney general there says, look, you can't raise anymore money until you do. He continues to investigate the Trump Foundation.

And I say Democratic attorney general of New York because part of the response from the Trump campaign was to raise an allegation that this may be more politics than substance, although the Trump campaign says, listen, we are going to comply with the State of New York and we are going to comply with the attorney general's investigation. We will get the paperwork filed.

COOPER: All right, Drew Griffin, appreciate the update. Thank you.

Just ahead, on the eve of the vice presidential debate, a revealing pop quiz in Central Park, how many people knew Tim Kaine and Mike Pence's names and what they actually looked like?

(COMMERCIAL BREAK)

[21:40:18] COOPER: Well, at this time tomorrow night, Governor Mike Pence and Senator Tim Kaine will be facing-off in the first and only vice presidential debate of this election. Neither certainly is new to politics. They both have a lot of experience behind them. So, of course, they'll be familiar faces to everyone who watches tomorrow night's debate, right? Maybe not. Here's Randi Kaye.

(BEGIN VIDEO CLIP)

RANDI KAYE, CNN CORRESPONDENT: It appears the vice presidential candidate has some work to do.

UNIDENTIFIED MALE: Honey, what's the other guy's name Mike Pence and who else?

KAYE: In New York City Central Park, we showed people voters' pictures of the vice presidential picks and more often than not got a blank stare. Watch what happened when we revealed a picture of Hillary Clinton's running mate, Tim Kaine.

Who is this? Long Pause.

SERENA FALION, VOTER: I have no idea.

KAYE: Who's that?

MARK SELVAGGI, VOTER: I have no idea.

KAYE: You're not starting out well.

SELVAGGI: I know. I have no idea who that is.

KAYE: These women were so confused by Kaine's picture. They asked strangers passing by for an assist.

You know who this is? UNIDENTIFIED MALE: Yes.

KAYE: Oh, you're getting help from strangers.

UNIDENTIFIED FEMALE: Can you help us out?

KAYE: Give a shout out.

UNIDENTIFIED MALE: He's somebody's running mate.

KAYE: They even struggled to name Mike Pence after I offered up his initials.

M.P.

UNIDENTIFIED FEMALE: No.

KAYE: Nothing?

UNIDENTIFIED FEMALE: No.

KAYE: No? Pence. Does that sound familiar? Mike Pence?

UNIDENTIFIED FEMALE: No.

KAYE: And they still weren't clear he was even running. Is he running?

UNIDENTIFIED FEMALE: Definitely not.

KAYE: Definitely not running?

UNIDENTIFIED FEMALE: No.

KAYE: They had to guess on which ticket.

Is he Republican or Democrat? You have no idea?

UNIDENTIFIED FEMALE: He looks Republican.

UNIDENTIFIED FEMALE: Looks pretty Republican to me.

KAYE: So that would mean he's running with Donald Trump?

UNIDENTIFIED FEMALE: I think so.

KAYE: This guy wasn't clear on Tim Kaine's party affiliation.

Is he Republican or Democrat?

SELVAGGI: He looks Republican.

KAYE: He's a Democrat. You only have two choices there.

SELVAGGI: Yeah, I know, right. OK.

KAYE: His initials are T.K.

SELVAGGI: T.K., Tim Kaine?

KAYE: Yes.

SELVAGGI: Oh, so that's Tim Kaine? OK.

KAYE: Yeah. So you've never seen him before?

SELVAGGI: I have not.

KAYE: Not only had he never seen Tim Kaine, but he had no idea what Pence's first name was.

Who is this guy?

SELVAGGI: That's Tim Pence, or John Pence. It's Pence.

KAYE: Billy Pence, whatever you want to say. Are you asking me or are you telling me.

SELVAGGI: That's Pence.

KAYE: He knew which ticket he was on, but struggled with Mike Pence's home state?

Do you know where he was governor?

SELVAGGI: Arkansas? Alabama?

KAYE: No. Starts with an "I."

SELVAGGI: Indiana.

KAYE: There you go. Nicely done, Mark. Thanks for playing.

These guys failed the Tim Kaine geography trivia.

Do you know where he's from?

SEAN RILEY, VOTER: Indiana.

UNIDENTIFIED MALE: Ohio.

RILEY: Ohio.

KAYE: Two strikes.

UNIDENTIFIED MALE: One of the states that matters.

KAYE: That's good.

RILEY: Virginia, Virginia.

KAYE: Yes. Nicely done.

Just to mix things up, I threw in this picture of New Jersey Governor Chris Christie.

Is he running?

UNIDENTIFIED MALE: No. But he kind of looks like he's running, though. He stands behind Trump a lot.

KAYE: Perhaps Mike Pence and Tim Kaine could use a little more face time standing by their candidates.

Randi Kaye, CNN, New York.

(END VIDEO CLIP)

COOPER: Well, 24 hours from now, Tim Kaine and Mike Pence will have their chance to make a lasting impression on voters.

Joining me now is Senior Political Analyst and former Presidential Adviser David Gergen, also debate coach, Brett O'Donnell who served as Director of Messaging for the McCain presidential campaign.

Brett, so, you know, clearly Pence and Kaine suffer from, maybe some facial recognition issues. Is that a priority for them tomorrow night just getting their name and face out there, or is it more about sort of getting the message of their running mate out?

BRETT O'DONNELL, DEBATE COACH: Well, it's both. I mean, any goal for any debate is for voters to get to know you. And for these two, the big question mark is, should something happen, God forbid, to either one of their running mates, are they fit to be president of the United States? So they have to pass that competency test and one thing for sure is voters have to get to know who they are, because by and large, we don't know them.

COOPER: And David, I mean, there's definitely daylight between Pence and Trump on a lot of issues while he hasn't joined the call for the top of the ticket to release his taxes. Pence personally did release his taxes. Do you expect that to come up tomorrow night? And, I mean, it clearly will on the Democratic side. I don't know if the debate moderators will bring it up, but certainly Kaine will.

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER TO REAGAN, FORD, CLINTON & NIXON: Tim Kaine is going to raise it more than once. You know, Anderson, usually ...

COOPER: He's going to wear it on his t-shirt, I imagine.

GERGEN: You know, usually these are inconsequential affairs. People wake up the day after not knowing anymore about the candidates than they just did in Central Park today.

But I think this is one of the few that you really have to say, this matters. It's not only the fact that we have two candidates at the top of the ticket who are going into their 70s, among the oldest, ever to be in the presidency, and therefore, you know, the vice presidents have to be ready to go. [21:45:09] But it's also that this campaign is breaking open now toward Hillary Clinton. And Mike Pence's role is to try to reverse the momentum of the campaign that was talking about something two or three days from now there is not the Donald Trump's taxes or is not as a foundation, but is about some of the issues that the Trump team cares about, the immigration, the economy, job creation. They've got to change the subject and change the momentum.

COOPER: Brett, what do you think Kaine's biggest vulnerability is?

O'DONNELL: Well, I think that one of the things that Mike Pence will go after is the difference between the two on a couple of essential core issues, like trade and even abortion and also on the use of military force. Those are three big things that Secretary Clinton and Senator Kaine differ on.

So he could try to drive a wedge there to expose those differences and talk about the position. You know, Trump was fairly effective talking out trade in the last debate. If Governor Pence can change the conversation back to a trade debate, then the campaign's back on offense.

COOPER: David, I want to look ahead to the next presidential debate. What do both candidates you think need to accomplish? And do you think Donald Trump is going to be able to change things out from the last debate?

GERGEN: That's a really good question, Anderson, because I think if he does lose two in a row, it doesn't make much difference what happens on the third debate, unless there's some extraordinary event. So I think this one is one that Trump needs to win.

And we haven't seen any evidence so far that he's settling down and really trying to bone up and trying to prepare himself in a different way. And he got swept last time because she was so much better prepared than he was.

COOPER: Brett, I mean, we've seen a lot -- Trump's had a lot, you know, kind of rough go of it since the last day, a lot of ups and downs in the campaign. Do you see the next debate as make or break for him?

O'DONNELL: Well, it's certainly a big debate. You know, in 2004, George W. Bush had a poor first debate and made a come back in the second debate. Last cycle, Barack Obama had the same problem, made a big come back in the second debate.

Town hall debates are different from the regular podium debates. It offers Trump an opportunity, but I do think that the pressure is on him.

GERGEN: Yeah. Anderson, it's also been true that the only times we've seen when someone lost the first debate and came back and won the second debate and move on into victory was when incumbents did that. An incumbent would lose the first debate then win that second one. We've never seen a challenger lose the first one, come back and win a second and won the victory.

COOPER: Why do you think that is? And why is it easier for an incumbents to sort of have a come back, because we know them more?

GERGEN: Yes. We know them more and they are given a little bit of, you know, they can always say, "Oh, God, they were rusty and they weren't quite ready." But the pressure has been on them in that second debate and both Reagan and Obama came back very strongly in that second debate.

But challengers, you know, we make -- we judge people quickly and a lot of people made up their minds in that first debate is for Donald Trump to change people's minds and to say he's really a better debater and more ready for the office, big hill to climb and that's why I'm amazed he is not bunkering down and getting -- really getting ready for it.

COOPER: And Brett, the question is not just on issues, but will Donald Trump continue to take the bait if Secretary Clinton go, you know, sort of dangles it in front of him like she did the last time?

O'DONNELL: Well, that's the big question. He's got to stay on offense the entire debate. I mean, winning or losing these things is based straight on offense. Who is the more aggressive in the debate, able to prosecute their attacks better? That's what these are about. If Donald Trump can do that, then he could turn the tide.

He had plenty of opportunities in the last debate and just missed so many wide open opportunities for himself. It wasn't that Secretary Clinton was fantastic, it was that Donald Trump took the bait and stayed on defense.

COOPER: Brett O'Donnell and David Gergen, good discussion. Thank you, guys. Appreciate it.

GERGEN: Thank you.

COOPER: Up next, with less than 24 hours to go until the vice presidential debate here one CNN, we'll take a look back at some of the best and worst moments from previous vice presidential face-offs, including this moment from the 2008 campaign.

(BEGIN VIDEO CLIP)

SARAH PALIN, (R) VICE PRESIDENTIAL CANDIDATE: Nice to meet you. Can I call you Joe?

(END VIDEO CLIP)

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[21:53:00] COOPER: Record 84 million people watched the first presidential debate. Tomorrow night is the vice presidential candidates turn to face off, the only chance for that number two is on the ticket to take center stage, it's an opportunity for them to come out of their running mate's shadows and make their own moment. Sunlen Serfaty reports tonight.

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SUNLEN SERFATY, CNN CORRESPONDENT: Now in the national spotlight it's high stakes for the vice presidential contenders to soar or stumble.

VICE PRES. JOE BIDEN, (D) UNITED STATES: With all due respect, that's a bunch of malarkey.

SERFATY: There have been the one-line zingers.

WALTER MONDALE, (D) VICE PRESIDENTIAL CANDIDATE: I think Senator Dole has richly earned his reputation as a hatchet man tonight.

SERFATY: Which go on to become the breakout moment of the debates.

LLOYD BENTSEN, (D) VICE PRESIDENTIAL CANDIDATE: Senator, I served with Jack Kennedy. I knew Jack Kennedy. Jack Kennedy was a friend of mine. Senator, you're no Jack Kennedy.

SERFATY: And miscalculations like Admiral Stockdale in 1992 trying to poke a little fun at his own experience.

ADMIRAL JAMES STOCKDALE, (I) VICE PRESIDENTIAL CANDIDATE: Who am I? Why am I here? I'm not a politician.

SERFATY: That fell flat and opened up their ticket to late night jokes instead.

UNIDENTIFIED MALE: Who am I? Why am I here?

UNIDENTIFIED MALE: Well, you're the admiral and you're taking a joy ride.

SERFATY: In 2008 the relatively unknown first-term governor from Alaska was facing questions over her experience, going up against a well-established U.S. Senator Joe Biden.

PALIN: Hey, can I call you Joe?

SERFATY: Those six words within the first few seconds of the debate created her big moment, seen as a successful move to disarm her competitor.

PALIN: Say it ain't so, Joe. There you go again.

SERFATY: The first woman who took the V.P. stage in 1984 capitalized quickly on her opponent's first misstep.

GEORGE H.W. BUSH: Let me help you with the difference Ms. Ferraro between Iran and the embassy in Lebanon.

SERFATY: Geraldine Ferraro calling George H.W. Bush out for that on stage

GERALDINE FERRARO, (D) VICE PRESIDENTIAL CANDIDATE: I almost resent, Vice President Bush, your patronizing attitude that you have to teach me about foreign policy.

[21:55:04] SERFATY: The vice presidential debates provide a key test for the person who could be a heartbeat away from the presidency, answering the question on voters' minds, are they capable to assume the job as president.

TRUMP: She doesn't have the stamina, and I don't believe she does have the stamina. To be president of this country, you need tremendous stamina.

CLINTON: As soon as he travels to 112 countries and negotiates a peace deal ...

SERFATY: Another key question that could factor in more this year as issues of health and age for both Donald Trump and Hillary Clinton swirl.

TRUMP: The main quality that you want is somebody that can be a great president if something happens to you, that's got to be -- don't you think that's got to be number one?

SERFATY: A duty both candidates seem to be taking seriously.

CLINTON: I want to be sure that whoever I pick could be president immediately if something were to happen.

SERFATY: Sunlen Serfaty, CNN, Farmville, Virginia.

COOPER: Well, tomorrow night's vice presidential debate 9:00 p.m. Eastern right here on CNN. We'll be right back.

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COOPER: Quick reminder, we got two big debates coming up this week. The first tomorrow night between vice presidential candidates, Republican Mike Pence and Democratic Tim Kaine, coverage begins tomorrow afternoon 4:00 Eastern Time, debate starts at 9:00 p.m. Then Sunday, Hillary Clinton and Donald Trump in Saint Louis. ABC's Martha Raddatz and I will be moderating. A lot on the line, a campaign in the balance right now.

[22:00:05] "CNN TONIGHT" with Don Lemon.