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EARLY START

Trump Suffered $916 Million Business Loss; Clinton Downplays Charlotte Visit; Vice Presidential Debate Preview; Hurricane Matthew Tracked; Kim Kardashian Robber in Paris; Latest on New Jersey Train Crash; Colombian Government Searching for New Way Forward as Voters Reject FARC Agreement; Russia Warns U.S. over Syria Action. Aired 4:30-5a ET

Aired October 3, 2016 - 04:30   ET

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


[04:30:00] JOHN BERMAN, "EARLY START" CO-ANCHOR: -- the United States not out of the woods yet. Welcome back to "Early Start" everyone. I'm John Berman.

CHRISTINE ROMANS, "EARLY START" CO-ANCHOR: And it's concerning, we can see that it's moving slowly here. I'm Christine Romans. It's 30 minutes past the hour this morning.

What is $916 million among friends, folks, $916 million of losses. Now at the center of growing questions about Donald Trump's taxes and how much he paid or did not pay.

The "New York Times," it says, that obtained three pages from the 1995 state returns that shows claimed a $916 million loss in 1995. Nine hundred sixteen million dollars which the "Times" suggests could have allowed him to pay no federal income taxes at all for up to 18 years.

CNN has not independently confirmed the authenticity of those tax documents. But it does show, perhaps, why Trump has been so reluctant to release his tax returns. It does hit him tight in the area (inaudible), his business acumen. He lost $916 million in one year. Both campaigns are reacting to these new disclosures. CNN'S Chris Frates has the latest.

(BEGIN VIDEO CLIP)

CHRIS FRATES, CNN INVESTIGATIVE CORRESPONDENT: Good morning, John and Christine. The Trump campaign has not disputed the accuracy or the facts in that "New York Times" story. They put out a (inaudible) calling the "Times" and the media in general an extension of the Clinton campaign, as statement went on to attack Clinton before finally arguing that Trump had a fiduciary responsibility as a businessman to pay no more tax than legally required.

RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: ... at times fails to point out that he has an obligation as the head of the business to take advantage of and to use the lawful deductions and tax advantages that are available to you. So the reality is this is part of our tax code.

The man's a genius. He knows how to operate he tax code. CHRIS CHRISTIE, NEW JERSEY GOVERNOR: ... what it shows is what an absolute mess the federal tax code is, and that's why Donald Trump is the person best position to fix it. There's no one who has shown more genius in their way to maneuver around the tax code ...

FRATES: And not surprisingly, the Clinton campaign jumping on this. They have been pressuring Trump for months to release his tax returns. They reacted to this story very swiftly in a statement campaign manager. Robby Mook said, this bombshell report reveals the colossal nature of Donald Trump's past business failures and just how long he may have avoided paying any federal income taxes whatsoever.

He stiffed small businesses, laid off workers and walked away from hardworking communities. He apparently got to avoid paying taxes for nearly two decades. Tens of millions of working families paid theirs, and that statement ended with Mook again calling on Trump to release his tax returns. So, this is not a storyline I expect the Clinton campaign is going to let go anytime soon. John and Christine back to you, guys.

BERMAN: An understatement there from Chris Frates.

This morning, Hillary Clinton heads to the battleground state of Ohio. She has been trailing there in recent polls and hasn't visited in weeks which leaves many to wonder whether she is writing the sate off. But she has two events there today so no write-offs just yet, and she gets picking up the endorsement of one of Ohio's favorite son, loyal endorsement, there, you're looking at LeBron James of the Cleveland Cavaliers from Akron, Ohio.

And an off-bid (ph) for "Business Insider" James writes "Policies and ideas that divide us more are not the solution. We must all stand together, no matter where we are from or the color of ours skin, and Hillary, he says, is running on the message of hope and unity that we need."

Now this came after Hillary Clinton, she struck a more personal note during those campaign stops in North Carolina. She was there Sunday to address the recent police shootings. CNN'S Joe Johns with the latest from Charlotte.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: John and Christine, Hillary Clinton's visit here to Charlotte, North Carolina after the demonstrations and unrest was scheduled about a week ago but it had to be canceled because the mayor questioned the timing of it, it was important for the campaign to get her into the city talking about these issues because this is the largest city and a key battleground state. It is also an issue she has talked about again and again, police use of lethal force.

But they also had to strike a tone so as not to attract criticism. They did that by downplaying the trip into the city, not even tipping off parishioners in the church that Hillary Clinton was coming. When she got here, she spoke from the pulpit, she spoke in a very personal way and she did not even mention one time the name of Donald Trump.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, U.S. PRESIDENTIAL CANDIDATE: I'm a grandmother, and like every grandmother, I worry about the safety and security of my grandchildren, but my worries are not the same as black grandmothers who have different and deeper fears about the world that their grandchildren face.

(END VIDEO CLIP)

[04:35:00] JOHNS: After that speech here at Little Rock AME Zion Church in Charlotte, North Carolina, Hillary Clinton also met briefly with a group of community leaders to talk about some of the related issues before flying back home.

Today, she travels to Toledo and Akron, Ohio. John and Christine?

ROMANS: All right, this "New York Times" revelation raises a host of questions. Helping us sort through them, Senior Media Correspondent Brian Stelter who is the host of CNN's "Reliable Sources." Fantastic show this weekend.

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Thank you.

ROMANS: By the way, you have Suzanne Craig in this program, right? Who got these in the mail. Three (inaudible) ...

STELTER: Surprised.

ROMANS: So we got these in the mail. Would love to know who had access to those and leaked them. The campaign is raising questions about the legality of this. Are there questions about the legality of writing a story about someone's tax returns?

STELTER: For the source, whoever it is that provided these documents, there could be legal issues. For the "Times" to print them, I don't see legal issues with the "Times" that they are on solid ground and certainly the editors there believe they are on solid ground.

The Trump organization did send a legal threat suggesting they could sue before this was published. Following up on Sunday, however, there was no further signal that there would be a lawsuit. If there was to be a lawsuit, it would open up Trump to discovery, and he doesn't want that.

ROMANS: Right.

STELTER: He has been trying so hard to keep all these information a secret, which makes me wonder, what else is beyond the three pages?

BERMAN: What else is beyond the three pages, Brian? Because you asked Suzanne Craig if there was more out there.

STELTER: She did indicate that the possibility that she has more that she hasn't shared yet. She received this envelope in the mail about a week and a half ago. The "Times" then verified that by reaching out to one of Trump's former accountant to verify that it was in fact what it looks like it is. She declined to comment whether she has more paper work, more documents to share.

She also declined to comment whether she knows who the source is. And that's the big mystery now, sort of who within Trump world wanted to share this information?

The letter was postmarked from somewhere here in New York. The return address was Trump tower. Does that mean it was actually someone in Trump's inner circle who wanted this information released?

ROMANS: But the Clinton campaign would like everyone to think it's like, look, you look at this and this shows that Donald Trump is not like you. He lost $900 million ...

(CROSSTALK)

BERMAN: But still a lot of money.

ROMANS: One billion, almost $1 billion, $916 million in one fell swoop. We don't know what businesses it was. We don't know exactly what to tell you (ph). Did you know that that was around the time that his Atlantic City Casinos were going bust and it was pretty much the low point of his business career?

STELTER: The shuttle loss, tens of millions of dollars.

ROMANS: Yeah. But you know, this is somebody who definitely does not have the Midas touch all the time. Can you imagine ...

(CROSSTALK)

STELTER: Trump made to say (ph) that has been well known for decades. This has been written about extensively. In fact, the losses were pretty well known before this. The difference now is having the tax data.

BERMAN: Which he released on his own terms in his own way some time ago might not have had the impact it did on October 1st, literally, an October surprise. It gets to the issue of disclosure here if Donald Trump had done what every candidate had done for the last 40 years and released his tax returns, this may not seem like a big deal.

But, now it is just on the front page of the "New York Times" but it is part of pop culture. What do I mean? "Saturday Night Live", the much anticipated season premiere began with the mock debate between Hillary Clinton and Donald Trump, Alec Baldwin against the Hillary Clinton figure and the issue of taxes came up. Watch.

(BEGIN VIDEO CLIP)

KATE MCKINNON, PLAYING HILLARY CLINTON, ("SNL" mock debate): He hasn't released his tax returns which means he is either not that rich.

(CROSSTALK)

ALEC BALDWIN, PLAYING DONALD TRUMP: Wrong. MCKINNON: Not that charitable.

BALDWIN: Wrong.

MCKINNON: Or he's never paid taxes in his life.

BALDWIN: Warmer.

(LAUGHTER)

(END VIDEO CLIP)

BERMAN: That was actually the funny thing is the storyline came on after the "Times" story was first published. I was wondering if they would just sit there and like do a dramatic reading from "New York Times". They didn't, but that was the one reference you had. What do you make of the opening?

STELTER: In some ways it was funny. It was amusing. It took some shots at Clinton, clearly more shots at Trump. But it's hard now to really see it on the campaign trail. I think Alec Baldwin is up against that, it's hard to match the actual comedy of the selection.

You look at Donald Trump's rally on Saturday night, he came on stage right around the time this article was published by the "New York Times." And it was one of his most dramatic, most outrageous rallies he has ever had, and you have to wonder because he knew the "Times" story was coming out.

He frequently tries to overwhelm one news cycle by triggering a whole new one, by creating some new story to distract from what's going on. But this tax story does seem to be dominating into the new work week, and I'll certainly hear about Clinton today as well.

ROMANS: A little bit side of Clinton in that sketch last night and one of the funniest part was when she kept giving back her two minutes. But no, they'll have ...

(CROSSTALK)

STELTER: That is the actual Clinton campaign strategy. And the secret of that for the past few months, they believe it is fine and actually a positive for this campaign ...

(CROSSTALK)

ROMANS: And out of his leg (ph).

STELTER: ... for Trump to be talked about more than Clinton.

BERMAN: All right, Brian, don't go far. We are going to want you back in soon. We are just one day away from the next primetime political event. The one, the only vice presidential debate. Republican candidate Mike Pence, democrat Tim Kaine, they face-off for 90 minutes in Farmville, Virginia. Isn't Farmville an app also? Anyway, CNN's debate coverage starts at 4:00 p.m. leading up to the debate at 9:000 p.m.

[04:40:00] ROMANS: All right, time for really stating your money (ph), markets mostly higher around the world. Asian stocks close higher, European markets are higher, hoping for a settlement between Deutsche Bank and the U.S. Department of Justice, but U.S. stock Futures fairly moving this Monday morning.

Friday marked the end of the third quarter for stocks. How has Wall Street faired? The DOW climbs 155 points Friday, ending the quarter up 2.1 percent. The S&P 500 up 3.1 percent. But look at the NASDAQ, up almost 10 percent for the third quarter. John Berman.

BERMAN: You are so excited. You're throwing your papers everywhere.

(CROSSTALK)

ROMANS: The third quarter did well. There is concern about the economy is slow the economy is growing. Stock market has been string, has not been translating into overall GDPs. We'll see some good for stocks, so far.

BERMAN: Hurricane Matthew. This is a serious concern right now. Churning in the Caribbean. There are evacuations under way, including some Americans now. We will have new details next.

(COMMERCIAL BREAK)

[04:45:00] BERMAN: Serious concern in the Caribbean this morning with new hurricane watches and mornings now posted Hurricane Matthew is a powerful category 4 storm heading toward Jamaica, Haiti, the Bahamas and Cuba. The U.S. Navy evacuating about 700 family members of U.S. personnel stationed at the base I Guantanamo Bay, Cuba. Let's see the very latest right now on the preparations across the region. Joining us CNN Patrick Oppmann in Santiago, Cuba. Patrick, what do you see?

PATRICK OPPMAN, CNN CORRESPONDENT: Only seeing the last bit of preparations taking place just a few minutes ago at the hotel, they were boarding up some windows all day. Yesterday, we saw people lining up to gas their cars and motorcycles.

People securing the roofs so the roofs don't go flying off and people lining up to receive Western Union remittances from family members in South Florida. Certainly people in this part of Cuba and the region where the storm is going to impact know a lot about hurricanes, but it has been some years, John, since they have had to endure a hurricane of this magnitude. Even Cuban President Raul Castro was in the region over the weekend telling officials to make all the preparations necessary to make sure that lives and property were not lost.

Of course, there is so much you can do. We have seen people being evacuated from low-lying areas here in Cuba because there will be an expected storm surge up to 11 feet to wash away homes. Many of the homes in this part of Cuba are not strong enough to withstand a hurricane this size.

Thousands of people will be evacuated to government shelters. As you said, John, as well, to the east of me, the U.S. Naval Base at Guantanamo, some 700 people, and family members and pets of U.S. Navy employees at the Guantanamo Naval Base have been evacuated.

Of course, the 60 some prisoners from the war on terror are going to remain there. The U.S. Navy tells us that facility can withstand up to a category 5 storm, John. A lot of preparations taking place in the final hours before the storm hits here.

BERMAN: Great deal of preparation in Cuba. And serious concerns in Haiti as well. We're going to pick it up to 20 into the range further in mudslide and whatnots, the last thing they need there. Patrick Oppman, thanks so much.

Let's get the latest on Hurricane Matthew and the predicted path. We're going to bring in meteorologist Derek Van Dam.

DEREK VAN DAM, CNN METEOROLOGIST: Good morning John and Christine. Of course all eyes on Hurricane Matthew churning about the Caribbean Sea. The big question, how strong will it be, where will it go from here and will it impact the East Coast of the United States?

One-hundred-thirty-mile-per-hour sustained winds, gusts at 175 miles per hour. The immediate threats will be across Haiti, Eastern Cuba and Jamaica. Look at the rainfall totals. We are expecting perhaps upwards of 20 inches of rain in the mountainous regions of Western Haiti.

The winds will be a factor as well, knocking out power for much of this region and as it travels into the Bahamas, it is going to be a close call on the exact path of Hurricane Matthew.

We do have the potential for impacts along the Florida Coastline, at least in terms of big waves and perhaps some strong rain bands moving across the region, something we will monitor very closely for the days ahead. Here is the look at the temperatures across the entire East Coast and a bit of a warming trend for the deep south. Back to you.

ROMANS: All right, Derek, thank you for that. Breaking overnight. Kim Kardashian West robbed at gunpoint. This frightening ordeal happening in Paris inside a bathroom at the reality T.V. star's luxury rental.

Kardashian spokesperson says she was robbed by two masked men dressed as police officers. The French Interior Ministry said there were actually five thieves who got into that mansion and got away with jewelry worth a few million dollars. Kardashian was not hurt.

Her husband Kanye West learned about the robbery while on stage at a music festival in New York City. The rapper suddenly ended the show, leaving the stage after declaring a family emergency, but we're told that they got into the building by threatening the concierge, handcuffing him, John. One of the rings worth 400 million Euros, our Paris girl is reporting. She is all right, but the jewels are gone.

BERMAN: Los Angeles police facing mounting pressure to release the name of the police officer who shot and killed an African-American teenager on Saturday. Police say officers tried to pull over a car they thought might be stolen. The driver kept going then two men hopped out and ran, police saying. After a short chase that ended behind a home, an officer shot Carnell Snell, Jr., the 18-year-old died at the scene. Police say a handgun was recovered. No officers were hurt.

ROMANS: We have sad news report this morning from South Carolina where the little boy wounded in last week's shooting in the elementary school has died. Officials say 6-year-old Jacob Hall suffered massive blood loss that led to his severe brain injury. The 14-year-old suspect in this free shooting at Townville Elementary has also been charged in the earlier murder of his father at home.

[04:50:00] BERMAN: New information this morning on the deadly train crash in New Jersey. The NTSB says the data recorder was not working. Officials say a second newer black box no the front remains inaccessible, if it is located. The device could provide pivotal information including the train's speed.

The train's engineer, Thomas Gallagher, told the NTSB the train entered the Hoboken Station at 10 miles per hour. Witnesses said, the train was speeding which lead to the deadly accident.

ROMANS: All right, who will win, Hillary Clinton or Donald Trump? Polls are not the only predictors. Keep an eye on the stock market and the economy. We'll see who Wall Street is betting on. The "Early Start" on your money next.

BERMAN: What if we answer that question?

[04:55:00] (COMMERCIAL BREAK)

ROMANS: In the nation of Colombia, this morning, government and rebel leaders are searching for a way forward after the stunning defeat of the national referendum on a deal to end the longest-running war in Latin America. Colombia's voters narrowly rejected this peace agreement with the FARC rebels by just four-tenths of 1 percent. Critics had the deal which would have given rebel leaders reduced sentences for their war crimes. Critics thought that was the Sulenians (ph). Both sides now say the ceasefire will remain in effect as they return to the bargaining table.

BERMAN: Russia warning the U.S. against taking action in Syria, saying that removing President Bashar al-Assad would have harmful effects across the Middle East. This is Russian-backed forces in Syria have been making gains in Aleppo after bombing one of the main hospitals there. Let's get the latest from CNN international diplomatic editor Nic Robertson, live for us in Istanbul nearby. Nic, you know, there is word of forces massing around Aleppo getting ready for what could be some kind of final assault.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Absolutely. The U.N. says they are deeply alarmed of the situation, 275,000 civilians living in that eastern part of Aleppo, that rebel-controlled part of Aleppo.

Short of food, short of fuel, short of water, short of electricity and short of hospitals. Now, Russia and Syria continues to focus for that bombing runs on hospitals. One functioning, the U.N. deeply worried about that.

For the background of this, you have Secretary of State John Kerry over the weekend in a phone call with Sergey Lavrov, the Foreign Minister of Russia. The statement from that phone call coming from the Russian's Elite said this was a joint effort to figure out how to normalize the situation inside Aleppo.

It's far from normal. The U.N. sees the people there as besieged. The Syrian government has the upper hand. They are saying that the rebel fighters can leave, safely leave that rebel-controlled area. It is anyone's guess at the moment whether or not that would actually happen.

But the rhetoric between the United States and Russia is really ramping up. You have the Russian Deputy Foreign Minister just at the beginning of the week saying the tone coming from the United States was outrageous. Secretary of State John Kerry said that relations with Russia, they were perhaps at the point of having to break off connections over Syria because of this.

You have another spokesman at the foreign ministry saying if the United States targets Syrian troops, this would bring not just disaster inside Syria but across the region. That sounds very much like a threat to escalate tensions between the United States and Russia, and Russia insisting that the only one that will profit in this situation is a terrorist, and blaming the United States, blaming the United States for not being tough enough on terrorists. That's the Russian position, right now, John.

BERMAN: Meanwhile, Aleppo hangs in the balance there and diplomacy seems to be on hold, maybe for good. Nic Robertson for us in Turkey. Thanks so much, Nic.

ROMANS: All right, happy Monday morning everybody. Let's get an early start on your money morning.

Markets are mostly higher around the world, Asian stocks close higher, European markets are higher, hoping for a settlement between Deutsche Bank and the Department of Justice.

The U.S. Stock Futures barely moving right now a little bit higher here. Friday was the end of the third quarter for stocks. How did you do, folks? If you're investing on Wall Street, the DOW claimed 165 points, Friday, ending the quarter up 2.1 percent.

The S&P a little bit better. Look at NASDAQ, up 10 percent for the third quarter. Not a bad return.

What does this all mean for the U.S. election? Let's watch stock markets perform between August 1st and the end of October. If stocks go up during that three-month stretch, expect Clinton to win. If stocks slide, Trump could win.

The record being stand (ph) right now. Trump has the fight edge. The S&P 500 down 0.2 percent since the star of august bit is nearly back to where it was on that day. So watch there. Good news for Tesla. The luxury electric car company is selling twice as many cars as it was last year. Tesla sold 24,500 cars last quarter, that is compared to about 11,600 of the same time last year. Most of the sales this year come from Tesla's new model SUV, but both of Tesla's models have a pretty hefty starting price. The model S starts at 66 grand; the model X at 83 grand. Those good sales have not translated into Tesla stocks. The stock is down more than 14 percent this year.

BERMAN: Anecdotally, and by that, I mean, what I see on the road?

ROMANS: Right.

BERMAN: There are a lot of these cars now (ph), it is no longer a unicorn. They are everywhere.

All right, "Early Start" continues right now.

Nine hundred and sixteen million dollars in losses and then leaked. Now, the Donald Trump campaign hitting back over that big "New York Times" article about tax losses and write off. We will give you the latest news this morning.

[05:00:00] ROMANS: Hillary Clinton heads for battleground Ohio but not before grabbing a big endorsement from a superstar in the Buckeyes State.

BERMAN: Hurricane Matthew's powerful category 4 storm now in the Caribbean which it's sited on Haiti, Cuba, Jamaica. What happens --