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EARLY START

Campaign Reacts To Trump Tax Disclosures; Sanders On Leaked Tape Of Clinton; First Debate Gets The SNL Treatment; Hurricane Matthew Heads For Haiti, Cuba; Kim Kardashian West Robbed At Gunpoint In Paris. Aired 5:30-6a ET

Aired October 3, 2016 - 05:30   ET

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


(COMMERCIAL BREAK)

[05:30:10] CHRISTINE ROMANS, CNN ANCHOR: The Trump campaign hits back over leaked tax returns, saying a multi-million dollar write-off shows his business genius.

JOHN BERMAN, CNN ANCHOR: Hillary Clinton going to Ohio, a key battleground state, and she picks up an endorsement from one of Ohio's biggest stars. The king weighs in.

ROMANS: And Hurricane Matthew closing in on Haiti, Jamaica, and Cuba. Could Florida come next?

BERMAN: That's a powerful storm.

ROMANS: It is. It's moving slowly. Means a lot of rain, folks.

Welcome back to EARLY START, I'm Christine Romans.

BERMAN: I'm John Berman, nice to see you. About 30 minutes after the hour right now. And this morning, what's $916 million among friends? Nine hundred and sixteen million dollars in losses now at the center of growing questions about Donald Trump's taxes and how much he paid or didn't.

"The New York Times" says it obtained three pages from Trump's 1995 state return that showed Trump claimed a $916 million loss in 1995. Nine hundred and sixteen million dollars -- he lost that much which the "Times" suggests could have allowed him to pay no federal income taxes at all for up to 18 years.

Now, CNN has not independently confirmed the authenticity of these tax documents but it does show, perhaps, why Trump has been so reluctant to release his tax returns and it does hit him right in an area of perceived strength -- his business acumen.

Both campaigns reacting to these disclosures. CNN's Chris Frates with the very latest developments.

(BEGIN VIDEOTAPE)

CHRIS FRATES, CNN INVESTIGATIVE CORRESPONDENT: Hey, 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 statement calling the "Times" and the media, in general, an extension of the Clinton campaign. That 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 MAYOR OF NEW YORK CITY: The "Times" fails to point out that he has an obligation as the head of a business to take advantage of and to use the lawful deductions and tax advantages that are available to you. So the reality is this part of our tax code. The man's a genius. He knows how to operate the tax code.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: And what it shows is what an absolute mess the federal tax code is and that's why Donald Trump is the person best positioned to fix it. There's no one who's shown more genius in their way to maneuver around the tax code.

FRATES: And, not surprisingly, the Clinton campaign jumping on this. They've 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 while 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, Christine, back to you guys.

(END VIDEOTAPE)

ROMANS: Oh no, it won't. All right, Chris Frates, thanks for that.

This morning Hillary Clinton heads to the battleground state of Ohio where she has been trailing in recent polls. She has not visited that state in weeks leaving some to wonder if she was writing it off, but she has two events there.

And she just picked up the endorsement of one of Ohio's favorite sons, LeBron James. In an Op-Ed 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 our skin. And Hillary is running on the message of hope and unity that we need."

This, after Clinton struck a personal note during a very low-key campaign stop in North Carolina, there to address the recent police shootings. Speaking at an African-American church Clinton focused on the dangers faced by black youth and she did not mention Trump's name once.

(BEGIN VIDEO CLIP) HILLARY CLINTON (D), 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)

BERMAN: All right, that was Hillary Clinton in Charlotte over the weekend. A big day on the campaign trail today. Let's give you a preview. Joining us, CNN Politics reporter Eugene Scott and senior media correspondent Brian Stelter, host of CNNs "RELIABLE SOURCES". Gentlemen, good morning to you both.

ROMANS: Hi, guys.

EUGENE SCOTT, CNN POLITICS REPORTER: Good morning.

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Good morning.

BERMAN: Hillary Clinton has two stops in Ohio today -- you know, a blue collar state. This tax story in "The New York Times" is exactly the kind of the thing that Trump had been trying to avoid for months. And you can assume in not releasing his taxes, exactly what Hillary Clinton wanted to draw out of him in the debate. How do you think this plays out over the next 24 hours?

[05:35:05] SCOTT: I think Trump has spoken repeatedly about his base not being interested in these tax returns. But I think what Clinton is going to do is communicate what his not paying taxes, if that's actually what happened, does to most voters in terms of keeping money out schools, keeping money out of transportation, maybe military. Other issues that affect these working-class voters in Ohio that she needs to win.

BERMAN: It's also this, you know, regular people don't take $916 million in losses on their taxes.

ROMANS: And then live lavishly -- you know, outwardly lavishly for years and years and years.

SCOTT: And not pay people who've been working for you that helped you build that wealth.

STELTER: But it's not a surprise to people that Trump is a multi- millionaire and that he's, by his own standards, a billionaire. Some people have questioned how much he's really worth and this might get to that when you hear about him losing money. But it's no surprise that he was using every available opportunity to pay fewer taxes. I mean, I don't know if that's a surprising or shocking revelation for his supporters.

Furthermore, this is a man who has been in the public eye for decades so I don't know if this moves the needle, necessarily, with a lot of people.

ROMANS: It seemed to rattle him, though. When you saw him this weekend --

STELTER: That's true.

ROMANS: -- after the story hit, it seemed to rattle him. He was at a rally in Pennsylvania and he was really all over the place. And then he brought in this slam -- this -- not even an insinuation about Hillary Clinton's fidelity -- listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: I don't even think she's loyal to Bill, if you want to know the truth. And really, folks -- really, why should she be, right?

(END VIDEO CLIP)

ROMANS: So, then the storyline gets even weirder, I guess, when his surrogates are defending that kind of --

STELTER: Right.

ROMANS: -- you know --

BERMAN: It's an indefensible, baseless, undocumented, no evidence claim.

ROMANS: Let's listen to Rudy Giuliani.

(BEGIN VIDEO CLIP)

CHUCK TODD, MODERATOR, NBC "MEET THE PRESS": Are you the right person to level this charge?

GIULIANI: Yeah, I'm the right -- I'm the -- I'm the right person to level this charge because I've never made such a charge and I've prosecuted people who've committed rape.

TODD: But your path -- you have your own infidelities, sir.

GUILIANA: Well, everybody does and, you know, I'm a Roman Catholic and I confessed those things to my priest.

(END VIDEO CLIP)

ROMANS: The whole -- the whole fidelity thing with Hillary Clinton -- I mean, it's just taking this bizarre turn over the weekend.

STELTER: I can't help but wonder if Hillary Clinton was a man -- if this was not the first female nominee of a major party running for president -- if her opponent would be talking about her sex life on the campaign trail. See, that's really what he's doing, right? Let's just call it what it is.

Furthermore, Rudy Giuliani talked about how, on one of those Sunday shows, Trump would be better for the United States than a woman. That's a direct quote from Rudy on another one of these talk shows. He hasn't followed up to explain whether he meant to say that, whether he meant to say something else. But gender -- the gender dynamics here are crucial.

And then, this morning's "Washington Post" says Trump is going to pull back. That his aides certainly want him to pull back and not keep talking about Clinton, not keep talking about fidelity. But he's showing that he's willing to and able to go there if he has to and, of course, the debate's in less than a week.

BERMAN: "The New York Times" did a big investigative piece today about the issue of how Hillary Clinton was involved or was not involved in going after many of the women who accused Bill Clinton of infidelity, so that's interesting. That is not what Donald Trump was talking about --

ROMANS: Right.

BERMAN: Saturday night when he --

ROMANS: Right.

BERMAN: -- just said, flat out, that she's not loyal to her husband and questioned her fidelity there.

I want to move on to a different issue that came up over the weekend. These leaked tapes that came out of a fundraiser Hillary Clinton was at. The "Washington Free Beacon" published them. In these tapes Hillary Clinton's talking about Bernie Sanders supporters.

SCOTT: Right.

BERMAN: The headline-grabbing part when she suggested that many lived in their parent's basement. If you listen to the whole quote she's talking about the economic anxiety they feel.

SCOTT: Sure.

BERMAN: But Bernie Sanders was pressed on this -- if it bothered him -- and listen to what he said over the weekend.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I-VT), FORMER PRESIDENTIAL CANDIDATE: Well, I agree with her. What she is saying is what I suggested a moment ago. There are young people who went deeply into debt, worked very hard to get a good education. And yet, they're getting out of school and they can't find decent-paying jobs, and that is a major problem. They are living in their parent's basements and that's the point there. So I, personally, do believe we do need a political revolution.

(END VIDEO CLIP)

BERMAN: Bernie Sanders sticking up for her right there but you can see the sensitivity. The Clinton team was worried about this a little bit because she needs these millennial voters on her side. SCOTT: Right, very much so. It's no secret to anyone that Hillary Clinton and Bernie Sanders have different approaches and different ideas about what the solutions to these issues are. But the Clinton campaign made it very clear that they were not mocking this community, but trying to understand and communicate what their concerns were to some of her fundraisers.

ROMANS: Let's talk a little bit about "SNL" this weekend. I want to get Brian's response to this because we saw Alec Baldwin playing Donald Trump and the mic issue came up again in this mock debate -- listen.

[05:40:00] (BEGIN VIDEO CLIP)

ALEC BALDWIN, NBC "SATURDAY NIGHT LIVE": My microphone is broken. She broke it, with Obama. She and Obama stole my microphone. They took it to Kenya. They took my microphone to Kenya and they broke it and now it's broken. Can you hear that? It's picking up somebody sniffing here. I think it's her sniffs. She's been sniffing all night. Testing, testing, Jina, Jina, huge Jina.

MICHAEL CHE, ACTOR, NBC "SATURDAY NIGHT LIVE": Secretary Clinton, what do you think about that?

KATE MCKINNON, ACTOR, NBC "SATURDAY NIGHT LIVE": I think I'm going to be president.

(END VIDEO CLIP)

ROMANS: They poked a little bit of fun at her, too --

STELTER: Yes.

ROMANS: -- but, you know, we've got five more weeks of this.

STELTER: I think Alec Baldwin is having the time of his life. He's committed to playing Trump through the election. He's one of the best known liberals in New York City. Now he's getting to go up against one of the other most famous New Yorkers on "SNL". He's going to have a blast after every debate between now and Election Day.

BERMAN: Basically, all they did was perform the debate. They actually didn't have that many jokes --

STELTER: No.

BERMAN: -- which was really interesting in the opening monologue there. All right, Brian Stelter, thanks for being with us. Eugene, great to have you here.

ROMANS: Thanks, guys. Talk to you soon.

All right, time for an EARLY START on your money. Markets are mostly higher around the world. Asian stocks closed up, the European markets are higher hoping for a settlement between Deutsch Bank and the Department of Justice, but U.S. stock futures barely moving right now. Friday was the end of the third quarter for stocks so how'd you do, everybody? The Dow climbed 165 points ending the quarter up two percent to .1 percent. The S&P up 3.1 percent. Nasdaq up almost 10 percent.

BERMAN: Why didn't you have me in the Nasdaq?

ROMANS: I did have you in the Nasdaq.

BERMAN: Oh, you did. I'm joking.

ROMANS: I did have you in the Nasdaq. For the record, I told him to be heavy in tech stocks this year.

BERMAN: That's actually true. All right, Hurricane Matthew bearing down right now in the Caribbean. Some Americans in the path. This is a powerful category four storm right now and there are questions this morning about whether the United States might be in its path.

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[05:45:50] ROMANS: Welcome back. Serious concern this morning in the Caribbean with new hurricane watches and warnings posting right now. Hurricane Matthew was a powerful category four storm heading toward Jamaica, Haiti, the Bahamas, Cuba. The U.S. Navy is evacuating about 700 family members of U.S. personnel stationed at the base in Guantanamo Bay, Cuba.

Joining us now with the latest on preparations across the region, CNNs Patrick Oppmann in Santiago de Cuba. And we know this is a powerful storm. We're talking 130 to 156 mile per hour winds moving kind of slowly. That means a lot of rain. It's going to pack a big punch here.

PATRICK OPPMANN, CNN CORRESPONDENT: Absolutely, and we are told by the U.S. Navy that the evacuations of the Guantanamo Navy base are complete. They wrapped up last night as they evacuated service members' families -- about 700 people and their pets, as well -- by military aircraft to Florida, so that's completed.

Here in Cuba's second-largest city, a city of about 500,000 people, evacuations are still very much underway trying to get people away from the low-lying coastal areas, from the mountainous areas that surround the city where there could be mudslides, where a storm surge could literally sweep away houses. Trying to get people to government-run shelters but they are, of course, running against time.

We even saw Cuban president Raul Castro over here -- over the weekend -- telling officials to have everything ready. Cubans know a lot about hurricanes but this is a very, very powerful hurricane, Christine, and, frankly, while they are trying to do it -- have everything ready -- they know that they are up against a storm that's going to cause a lot of destruction.

ROMANS: Yes, indeed. OK, be very careful and we'll check in with you again very, very soon. Patrick Oppmann for us. For the latest on Hurricane Matthew and its predicted path let's bring

in meteorologist Derek Van Dam now.

(BEGIN VIDEOTAPE)

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, John and Christine. Hurricane Matthew is still a fierce category four Atlantic hurricane, still churning across the Caribbean Sea. Gusts still in excess of 175 miles per hour as the storm slowly meanders to the north.

What's in its path? Well, we have Jamaica, we have Haiti, as well as eastern Cuba. And the rainfall totals here are impressive, easily exceeding 10 to 15 inches, especially in the mountainous regions. That will cause landslides, mudslides, and flash flooding. So, not only a flood threat a concern but, obviously, the extremely strong winds.

We will see deteriorating conditions throughout the day near Port-au- Prince and into the Guantanamo Bay region. And eventually, by Wednesday, the islands near the Bahamas will also be impacted by this.

But the big question on everyone's mind, where will this go from here? Will it impact the East Coast of the United States? Still a little too early to tell. Some of our computer models impacting the Carolinas, perhaps. Something we'll monitor for days to come.

Here's a look at your daytime highs for the day. Seventy-four degrees in New York City. Back to you.

(END VIDEOTAPE)

BERMAN: Yes, we're going to have to watch this storm in the next few days --

ROMANS: Absolutely.

BERMAN: -- because its path may be nudging a little bit westward into the United States.

All right, let's take a look at what is coming up on "NEW DAY". Chris Cuomo joins us now. Good morning, sir.

ROMANS: Morning, Chris.

CHRIS CUOMO, CNN ANCHOR, "NEW DAY": A true October surprise, my friends. The startling allegation or, actually, really it's more than an allegation. It's straight reporting from "The New York Times" that Donald Trump had such a big loss in his business that he may have been able to avoid paying federal income taxes for 18 years. Three years before this loss occurred and then 15 resulting years after it, so that comes out as a bombshell.

Then, Donald Trump winds up kind of going deeper into the hole by making these ugly allegations about Hillary Clinton's infidelity to her husband. Rudy Giuliani comes on and seems to support that idea. And this -- the whole election just takes an ugly turn from there. We have Rudy Giuliani coming on today, hopefully to clean up that talk. We have one of the reporters from "The New York Times" coming on today to explain what they believe their reporting shows about Donald Trump's taxes and his business success.

We also want to talk about one of the things you were unpacking very well this morning, John -- this leaked audiotape from a February fundraiser featuring Hillary Clinton characterizing young Bernie Sanders supporters as "living in their parent's basement". Now, it's been used to show she disrespects the Berners. Bernie Sanders came on the airwaves and gave a very different take on it. So what does this situation mean for the state of play in getting millennials over to the Kardashian -- Kardashian -- Clinton side?

[05:50:15] Kim Kardashian also in the news, robbed at gunpoint in Paris. We have that story for you. We also have Bill Weld on, the second part of the ticket for the Libertarians in the election. What does he say about what's going on in this election and the fate of that ticket?

BERMAN: That's a jam-packed day.

CUOMO: It is.

BERMAN: We've got to try to watch that.

CUOMO: I was so excited about the election stuff that I literally -- Iliterally almost ran over the Kardashian thing, which is very serious because she was held up at gunpoint.

BERMAN: Yes.

CUOMO: But when the Kardashian take second in the news you know you've got big stuff going on.

BERMAN: Indeed. All right, Chris, thanks so much.

ROMANS: So who will win, Hillary Clinton of Donald Trump? Polls aren't the only predictor.

BERMAN: They love that question. It's like we can tell you that right now. We can just go home until next month.

ROMANS: No. Well, maybe their polls is also the market. What is the market telling us about who will win? We've got that next.

(COMMERCIAL BREAK)

[05:55:10] BERMAN: All right, the breaking news overnight, Kim Kardashian West robbed at gunpoint. This happened in Paris inside a bathroom at a luxury rental. Kardashian's spokesperson says she was robbed by masked men dressed as police officers. We want to get the latest on what the French authorities are saying.

Joining us now from Paris, CNN's Jim Bittermann. Good morning, Jim. What can you tell us? JIM BITTERMANN, CNN SENIOR EUROPEAN CORRESPONDENT: Good morning,

John. Well, the very latest from the French authorities is that, in fact, Kim Kardashian has now left Paris. She left via the airport Le Bourget this morning and that was after a night that was somewhat dramatic as far as she was concerned. She was not injured but, in fact, she was badly shaken according to some of her spokesmen.

She was housed in this place behind me here. This is kind of a luxury apartment residence with a very few apartments that are rented out to rock stars and movies stars and people like that, virtually unknown. It's part of the no-name hotels, as a matter of fact. Virtually unknown to a lot of people but, obviously to the five people who came in with masks and guns last night.

They knew exactly what they were after. They tied up the concierge but before that they allowed him -- or guided him to her apartment where they broke in. They tied her up and, in fact, robbed her of what judicial sources say was a $4 million ring and $5 million in other jewelry from a jewelry box -- John.

BERMAN: Hmm, interesting. Obviously, people who probably seemed to know what she had with her, knew she was there, and knew how to get inside. This raises a lot of questions. Jim Bittermann for us in Paris, thanks so much.

ROMANS: All right, 56 minutes past the hour. Let's get an EARLY START on your money. Good news for Tesla. The luxury electric car company is selling twice as many cars as it was selling last year -- 24,500 cars last quarter. That's compared with 11,600 the same time last year.

Most of the sales this year come from Tesla's new Model X SUV, but both of Tesla's models have a pretty hefty starting price. The Model S starts at $66,000, the Model X at $83,000. Those good sales have not translated to Tesla stock yet. It's down more than 14 percent this year.

Stock markets are mostly higher around the world right now. Asian stocks closed higher. European markets are higher, hoping for a settlement between Deutsch Bank and the Department of Justice. And U.S. stock futures are slightly higher.

Friday marked the end of the third quarter for stocks so how has it done? The Dow climbed 165 points Friday, ending the quarter up 2.1 percent -- not bad. The S&P, three percent. Look at the Nasdaq, up almost 10 percent for the third quarter.

All right, so what does this all mean for the U.S. election? We've got a great story on "CNNMONEY" right now that says how the stock market performs between August first and the end of October indicates who will win. If stocks go up during that three-month stretch it's favoring a Hillary Clinton. If stocks slide Trump could win.Now this method has correctly predicted the winner in every election since 1944.

So where do things stand right now? Well, Trump has a slight edge. The S&P 500 down 0.2 percent -- just barely anything really -- since the start of August, nearly back to where it was that day. But a lot of people watching to see what the message is from the markets here. A lot of folks have been telling me for some time that the market hasn't really priced in a Trump victory and really has sort of been factoring in the fact they think Hillary Clinton will edge out in the end, but who knows?

BERMAN: Just one more tracking poll I have to watch every day.

ROMANS: Exactly, exactly.

BERMAN: All right, "NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

CLINTON: He didn't pay any federal income tax.

TRUMP: That makes me smart.

GIULIANI: The man's a genius. He knows how to operate the tax code.

SANDERS: Trumps says hey, I'm worth billions but I don't pay any taxes. But you, you make $15 an hour, you pay the taxes.

CLINTON: This is someone who always puts himself first.

TRUMP: Hillary Clinton's only loyalty is to her financial contributors and to herself. I don't even think she's loyal to Bill. Why should she be, right?

CLINTON: They're children of the Great Recession and they are living in their parent's basements.

SANDERS: There are young people who can't find decent paying jobs. They are living in their parent's basements and that's the point.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CUOMO: Good morning, welcome to your NEW DAY. It's Monday, October 3rd, 6:00 in the East.

And up first, a true election October surprise. "The New York Times" revealing Trump may have avoided paying federal income taxes for nearly two decades thanks to a loss of over $900 million that he might have been milking all this time. The tax revelations have some calling him a genius while others are saying his losses show the extent of his financial troubles.

ALISYN CAMEROTA, CNN ANCHOR: So, Hillary Clinton is trying to capitalize on Trump's tough week. We are 36 days to go until Election Day, one day until the vice presidential debate, six days to the next presidential debate, so set your alarm clocks. We have it all covered for you.

Let's begin with CNN senior political reporter Manu Raju. He's live in Washington. Catch us up on everything that's happened, Manu.

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Good morning, Alisyn. Now remember, before last week's debate Donald Trump had been on the upswing.