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EARLY START

vMelania Trump Breaks Her Silence; FBI Denies Quid Pro Quo With State Department; Trump To Supporters: Election Is "Rigged"; Clinton's Tax Plan: Better With Age; Pentagon: Fight For Mosul "Ahead Of Schedule"; NASA Launches Antares Rocket. Aired 5:30-6a ET

Aired October 18, 2016 - 05:30   ET

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


(COMMERCIAL BREAK)

[05:30:25] (BEGIN VIDEO CLIP)

MELANIA TRUMP, WIFE OF DONALD TRUMP: I believe my husband. I believe my husband. It was all organized from the opposition.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: Melania Trump breaking her silence, calling sexual misconduct allegations against her husband lies.

JOHN BERMAN, CNN ANCHOR: Accusations of a deal between the FBI and State Department to declassify an email on Hillary Clinton's private server. Newly released documents have Donald Trump calling for a top State Department official to be fired.

ROMANS: The battle to recapture Mosul from ISIS ahead of schedule according to the Pentagon but military officials are still cautioning against too much optimism. We're going to tell you why and we're going to take you live to Iraq.

Welcome back to EARLY START this morning, bright and early. I'm Christine Romans.

BERMAN: I'm John Berman. Thirty-one minutes after the hour right now. And this morning, Melania Trump with her first public statement since a list of women accused her husband of misconduct ranging from kissing to groping to sexual assault.

In an interview with Anderson Cooper she rejected claims that her husband sexually abused women, insisting that the allegations are nothing more than an orchestrated conspiracy between the Clintons and the news media.

She was also asked about her husband's comments on the 2005 "Access Hollywood" tape where he bragged about being able to grab women's genitals and get away with it because he was famous. She dismissed that as boy talk and suggested that the then-59-year-old Trump was egged on by Billy Bush. This is some of Anderson's interview.

(BEGIN VIDEO CLIP) ANDERSON COOPER, CNN ANCHOR: It was 10 days ago that "Access Hollywood" released that tape. I'm wondering when you first saw it -- when you first heard it -- what did you think?

M. TRUMP: I said to my husband that, you know, the language is inappropriate, it's not acceptable. And I was surprised because that is not the man that I know. And as you can see from the tape, the cameras were not on, it was only a mic. And I wonder if they even knew that the mic was on because they were kind of a boy talk and he was lead on -- liked egg on -- from the host to say dirty and bad stuff.

COOPER: You feel that the host, Billy Bush, was sort of egging him on?

M. TRUMP: Yes, yes.

(END VIDEO CLIP)

BERMAN: We're going to bring you much more of Anderson's interview with Melania Trump later in the broadcast.

ROMANS: Donald Trump is calling for a top State Department official to be fired even though the FBI is denying any quid pro quo arrangement with that official over the declassification of an email from Hillary Clinton's private server.

Newly released FBI documents appear to show Undersecretary Patrick Kennedy trying to convince FBI officials to declassify that email while offering to look into the agency's request for more personnel overseas. Now, that has Trump calling for Kennedy's removal.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Newly released FBI documents made public just today reveal just how deep this corruption goes -- you saw it. The Undersecretary of State, Patrick Kennedy, illegally pressured the FBI to un-classify emails from Hillary's illegal server. That's a lot of illegality in that one statement, isn't it? That's just one after another. In other words, the State Department was trying to cover up Hillary's crimes.

(END VIDEO CLIP)

ROMANS: Listen to the State Department's response to Trump's request to have Kennedy removed from his post.

(BEGIN VIDEO CLIP)

MARK TONER, STATE DEPARTMENT SPOKESMAN: Well, that's their prerogative, but I can say that Pat Kennedy's going to remain at his job and he has the full confidence of the Secretary of State.

(END VIDEO CLIP)

ROMANS: Now, Trump claims the FBI documents reveal a criminal act worse than Watergate. Clinton's campaign manager, Robby Mook, downplayed the accusation. He says it's very well-known that there were disputes between the State Department and other agencies about classifications.

BERMAN: I want to bring in CNN political commentator Lanhee Chen. He's the former public policy director for Mitt Romney. Someone who coached Mitt Romney a lot during his debate prep.

Lanhee, let's talk about -- let's start where we just finished right there with this FBI-State Department discussion about declassifying an email there. What role do you think that has now three weeks out and on the eve of the final debate? Is this something, at this point, that could cause Hillary Clinton serious problems?

LANHEE CHEN, CNN POLITICAL COMMENTATOR: I think a lot of this is baked in the cake. I think people already kind of see her as being a little dishonest, a little dodgy. Maybe a lot dishonest, depending on who you ask. So I just think that a lot of people have already figured this into their calculus.

[05:35:00] I mean, even the latest revelations, which I think sound very bad and in a normal campaign setting would be potentially very problematic. I think in this campaign people just say well, you know what, she's dishonest. They're all dishonest, they're all crooks. I mean, this is sort of just baked in the cake.

BERMAN: And in this case, just to be clear because people note this. I mean, this was -- none of this has directly to do with Hillary Clinton --

CHEN: Right.

BERMAN -- in a sense. It was a State Department official who was assessing declassifying an email with someone at FBI. She wasn't directly involved with that but it happened, you know --

CHEN: Under her watch as Secretary of State. And I think --

BERMAN: Well actually, she was already gone. It was under Kerry's watch as Secretary of State --

CHEN: Right.

BERMAN: -- but it had to do with her emails.

CHEN: It had to do with her emails --

BERMAN: Right.

CHEN: -- but her conduct while Secretary of State.

ROMANS: Let's talk about Donald Trump last night and how he is -- how he is trying to brush aside these accusations of sexual misconduct. He talked to Tom Llamas of "ABC NEWS" last night before a rally in Green Bay and I want you listen to this exchange and we'll talk about what his strategy is here. (BEGIN VIDEO CLIP)

D. TRUMP: I have great respect for women. I have tremendous respect for women. These people come up, maybe, for a little a fame or maybe for some other reason or maybe because they're part of the Clinton campaign, and I think a couple of them were involved somehow with the Clinton campaign.

The one that I met on an airplane 30 or 35 years ago. I mean, nobody can believe that's a believable story. Listen to that story. In addition to that, there's even a witness. But, I mean, can anyone really believe that a thing like that took place? It's ridiculous.

The point is it's lies -- pure lies -- and the media shouldn't be playing that up, even you asking this question. The media shouldn't be playing it up but I don't mind the question because I like telling people pure lies. It was fabricated stuff.

(END VIDEO CLIP)

ROMANS: Maybe they work for the campaign. Maybe it's conspiracy from the campaign, and even asking the question shows a mainstream media that's rigged against him. Is the right way for him to be handling this?

CHEN: I -- look, I think it's the only way for him to be handling it because --

ROMANS: What -- how -- what way?

CHEN: I tend to think where there's smoke there's fire. But look, he's going to have to make his own decision about how he navigates these. These are very serious allegations and he is basically saying look, none of them are true. He's dismissing all of them. And if, in fact, that is his version of the story then this is how they should be handling it. I mean, I think they would prefer not to be talking about this.

What I think he ought to be doing is to say look, I've talked about this -- these are ridiculous allegations. Let's talk about --

ROMANS: I'm done.

CHEN: Yes. Let's talk about the email server, let's talk about the stagnant economy, let's talk about how I'm going to fix it. That is what he needs to be doing as he goes into this last debate tomorrow.

BERMAN: So, the latest polls have it -- you know, depending on which poll you look at -- it's a pretty wide lead ranging anywhere from four points in ABC News/Washington Post up to 12 points in Monmouth, which is a huge --

CHEN: Yes.

BERMAN: -- lead at this stage in the game. So what has to happen tomorrow night for each candidate? What should be the goal of each candidate on that debate stage?

CHEN: Well, I think for Hillary Clinton it's her chance to seal the deal. And what that means is she needs to express -- I really think in the last debate her biggest mistake was to not be human enough. That was a great format, potentially, for her to connect with people and I thought she gave a very clinical performance. It was fine but it was very clinical.

I think in this last debate she needs to demonstrate some of that humanity. I think that's really probably what it's going to take seal the deal with Independents. I think she's got her base. I think she's got to seal the deal.

For Trump, he needs to stick to the issues. He, actually, is best when he's sticking to the issues. I know that's a little bit counterintuitive. But if you look at the first debate and the second debate he was at his strongest when he was talking about how he's going to fix the economy, the failures of the last eight years, what his plan is. That's where he needs to be, not flailing around. I mean --

ROMANS: National security, terrorism, and the economy. National security --

CHEN: Yes.

ROMANS: -- terrorism, and the economy. National security, terrorism, and the economy. Stick to that.

CHEN: There's no reason at all to be talking about the allegations. I mean, he may have to dismiss them again, appear contrite again, but then I think he needs to pivot and talk about the issues.

BERMAN: Percentage chance that he does that?

CHEN: Less than 25.

BERMAN: Lanhee Chen, EARLY START debut. Two for two in your appearance.

ROMANS: If you come back we'll get you your own mug.

CHEN: Well, that's a -- that is actually -- that is a very nice piece of chotskie.

BERMAN: You have no idea what we had to go through to get that, but that's a story for another time.

ROMANS: That's a whole 'nother story.

BERMAN: Lanhee Chen, great to have you with us. Thanks so much.

ROMANS: Nice to see you. All right, Hillary Clinton's tax plan would initially cause a dip in economic growth and job creation, but then would cut the debt and spark steady growth. That is the brand new analysis by Wharton School and the Tax Policy Center. Economic growth would slow just less than 0.2 percent in 2018. By

2027, the economy would grow a little bit, 0.4 percent. By 2040, GDP would rise about -- a little over one percent above the baseline projection. Same trend with the labor market under Clinton's tax plan. Job creation, you can see there, would take a hit, then would rise by nearly 650,000 by 2027. Two million new jobs would be created by 2040.

Guess what? These are all, of course, hypothetical scenarios. Clinton or Trump will obviously not be the president in 2040 but these numbers are forecasted. An important forecast compared to the current situation. Typically, in an election cycle three weeks out, people really care about what these things say. The Clinton team says that oh, by the way, these analyses don't really show truly how her other economic policies would help the economy, like spending on infrastructure and education.

[05:40:00] But, you know, usually -- I've covered a couple of elections and usually this time in this cycle people are really wondering what's my tax bill going to look like? What's jobs creation going to be like? We have had not a lot of focus on that.

BERMAN: It has not been where the debate is in this election.

ROMANS: No, it has not.

BERMAN: Melania Trump -- along those lines -- Melanie Trump insists her husband was only engaging in boy talk on the "Access Hollywood" video. He was egged on by Billy Bush. Her husband apologized to her. What was that discussion like? More with her interview with Anderson Cooper. That's coming up next.

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ROMANS: All right, welcome back. Melania Trump is breaking her silence. She says she has forgiven her husband, Donald, for what he said on that leaked "Access Hollywood" tape and she said voters should, too. She says Trump was egged on by host Billy Bush. Here's more of her one-on-one interview with CNN's Anderson Cooper.

[05:45:00] (BEGIN VIDEOTAPE)

COOPER: Your husband said that -- he said he apologized to you after the tape and that you accepted the apology. What was that conversation like? Can you talk about it?

M. TRUMP: Well, when we talk in private and we keep it private, and he apologized. I accept his apology. I hope the American people will accept, as well. And it was many, many years ago. He's not the man that I know.

And as I've many times said, and he's said it as well, it's very hard, especially for him when he decided to run for presidency because he did so many stuff in his life. He was on so many tapes, so many shows, and we knew that. That, you know, tapes will come out. People will want to go against him. But my husband is real -- he's raw. He tells it as it is. He's kind,

he's a gentleman. He supports everybody. He supports women. He encouraged them -- he encourages them to go to the highest level, to achieve their dreams. He employs many, many women and as you can see -- also see now, it's a lot of backlash on the media they way they treated him.

COOPER: He described it as locker room talk --

M. TRUMP: Yes.

COOPER: -- to you. I mean, you have sort of alluded to that, as well. Is that what it is to you, just locker room talk?

M. TRUMP: Yes, it's kind of two teenage boys. Actually, they should behave better, right?

COOPER: He was 59.

M. TRUMP: Correct, and sometimes I said I have two boys at home. I have my young son and I have my husband, so -- but I know how some men talk and that's how I saw it -- yes.

(END VIDEOTAPE)

ROMANS: All right. As for the women accusing Trump of sexual misconduct, Melania says she believes her husband. She says those allegations were orchestrated by the Clinton campaign.

BERMAN: All right. Billy Bush is officially out at NBC after several days of what we are told were difficult negotiations. The "Today Show" host reached a settlement with the network. No terms were released. You know, Bush never appeared back on the air again after the 2005 "Access Hollywood" video was released. He apologized for his conduct with Donald Trump in that video and says he's now looking forward to what lies ahead.

ROMANS: All right. Well, we're looking forward to what lies ahead with Alisyn Camerota right now. She is coming up on "NEW DAY" for us. Hi, there.

ALISYN CAMEROTA, CNN ANCHOR, "NEW DAY": Hey, guys, great to see you.

ROMANS: You, too.

CAMEROTA: So, as you know, the plight of Syrian refugees has become a real hot-button issue in this presidential race. Are they vetted well enough, are they dangerous? We had a lot of questions and we decided that in order to answer them we would spend the day with a new Syrian refugee family that had just arrived in the U.S. with their three children, so we did that.

And they did not speak a word of English but they managed to communicate their experience and their thoughts. It was a really eye- opening experience for me. I hope it will be for you, as well. So we're going to bring you that story along with, of course, all the day's latest political news when Chris and I see you at the top of the hour.

ROMANS: OK.

BERMAN: It's interesting you will be covering the presidential election. Alisyn Camerota, thanks so much. Oh, they're moving stuff behind you.

CAMEROTA: They're building the set.

BERMAN: Make them put that back by 11:00. That's all I ask. Thanks, Alisyn.

CAMEROTA: Got it.

ROMANS: All right. The stock market looking to rebound this morning. One big-name stock is set to pop 20 percent. Do you have this stock and what in the world does it have to do with Pablo Escobar? We'll explain when we get an EARLY START on your money, next.

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[05:53:35] BERMAN: All right, this morning, the Pentagon says Iraqi forces are ahead of schedule in their mission to retake Mosul from ISIS. Fighting has been raging overnight with ISIS militants attacking Iraqi tanks. U.S. military officials insist the mission to clear the city of militants -- it could take some time despite what they call significant progress on day one.

I want to go live now to Erbil in northern Iraq and bring in CNN's Michael Holmes. Michael, what can you tell us about the battle overnight?

MICHAEL HOLMES, CNN CORRESPONDENT: Yes, there's been progress made on all fronts. Kurdish forces say that they're actually slowing down a little so that Iraqi security forces -- the Iraqi military -- can sort of meet up with them -- they're coming from the east and the south -- and try to get in a sort of similar position as they continue to move forward.

You make the point there that the U.S. coalition spokesman saying today that both sides, the Kurds and the Iraqi security forces, on or ahead of schedule. We heard just a short time ago that Iraqi army forces are just outside a Christian town not too far from Mosul that used to have 50,000 Christians living there. It's empty at the moment but a strategic place for the military to hold and clear -- make sure that it's safe from IED's and the like.

And it just goes to show how they are doing well in getting closer and closer to Mosul. But it is a very -- there's a very strategic thing. They're not in a hurry. They're moving, taking targets as they come up. They're on a plan. They have a plan and they're sticking to it.

[05:55:07] ISIS fighting back. We saw that yesterday with our own Nick Paton Walsh where they took fire. There was suicide car bombings. And even this morning there was a number of suicide car bombs directed at Iraqi security forces. Those Iraqi forces say they repelled those attacks but did lose one soldier and two others wounded. Ten ISIS members killed in that incident. So, a steady progress being made, it would appear -- John.

BERMAN: Steady progress but still a long way to go. Michael Holmes for us in Erbil. Thanks so much.

All right. Overnight, NASA successfully launching Antares rocket into space. The launch from Virginia, we are told by reliable sources, was visible on much of the East Coast. It comes nearly two years after an Antares launch failed when the model exploded. The cargo spacecraft now carrying material for science experiments and supplies for the crew of the International Space Station. It will arrive there on Sunday.

ROMANS: All right, let's get a check on CNN Money Stream. It's a global market rally for stocks this morning. Dow futures are up. Stock markets in Europe and Asia up. Oil is higher.

New optimism -- the Federal Reserve may not raise rates in December. A big inflation report due at 8:30 a.m. Eastern Time -- the Fed will be watching closely. This follows a weekend -- a manufacturing report yesterday that has some thinking the economy still isn't quite ready for a rate hike. Lots of corporate earnings rolling in as well, so a very big week here.

One big mover today, Netflix. Shares are set to jump 20 percent this morning. The streaming service adding 3.6 million new subscribers in the third quarter. There are now more than 86 million people watching Netflix worldwide. Wall Street was concerned after the company's second quarter results which showed slowing growth in the U.S. I guess those concerns were unfounded.

Netflix says original shows like this one, "Narcos", bringing in new viewers. That series follows, of course, the life of drug lord Pablo Escobar. All right --

BERMAN: Not a lot of laughs, I have to say, in that. I -- you know, Ithought it'd be funnier.

ROMANS: It's not funny.

BERMAN: No.

ROMANS: This is funny. Hasbro enjoying the wonderful world of Disney and is cashing in big time -- big time. The company says sales in its toys for girls' segment surged 57 percent in the third quarter. The company says princesses were a huge hit -- princess dolls, especially from the movie "FROZEN". Sales in the boys' segment inched higher just by two percent, so girls rule.

Rival Mattel had the lucrative Disney license until last year when Hasbro took over. Both stocks are up for the year but Hasbro is up significantly higher.

OK, check out the new "CNNMONEY" stream app. It's business news personalized. The only place you can follow companies, business leaders, and topics that matter most to you. Download it now on the App Store or Google Play.

BERMAN: But not on your -- on your Samsung Galaxy 7.

ROMANS: No, and please don't carry that one.

BERMAN: And don't carry that. Don't carry that on a plane. What's your favorite Netflix show?

ROMANS: You know, I watch "NARCOS" pretty much non-stop and --

BERMAN: It's so dark.

ROMANS: It's dark and it's violent --

BERMAN: It's so dark.

ROMANS: -- and I usually -- but I really -- the acting was amazing and I got to brush up on my Spanish a little bit.

BERMAN: All right. I'm going to watch "Luke Cage" in entirety --

ROMANS: Everyone's talking about that. Everyone's talking about that, yes.

BERMAN: Melania Trump, she breaks her silence in defense of her husband. He continues to speak out about the women who are accusing him of various indiscretions. Also, the rigged election. The debate is tomorrow. "NEW DAY" starts now.

(BEGIN VIDEO CLIP)

D. TRUMP: This is a criminal act -- a conspiracy.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Donald Trump is unqualified and unfit, and every single day his campaign proves that.

UNIDENTIFIED MALE: I want to reassure Donald Trump the system is not rigged.

M. TRUMP: He was lead on -- egg on from the host to say dirty and bad stuff.

GOV. MIKE PENCE (R-IN), VICE PRESIDENTIAL NOMINEE: I have no doubt the national media is trying to rig this election.

M. TRUMP: Don't feel sorry for me. I can handle everything.

(END VIDEO CLIP)

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

CHRIS CUOMO, CNN ANCHOR: Sometimes the interior conversation must come first, people. This is how you get all the chemistry on air. We've got to talk it out. We've got to figure out what's happening. Yes, I will have the eggs and this time you pay.

Good morning, welcome to your NEW DAY. It's Tuesday, October 18th, 6:00 in the East.

There's a new headline from the election. New documents released by the FBI and they show a State Department official pressing the Bureau to declassify an email about Benghazi. And, Donald Trump doubling down on his claims of a rigged election and blasting Republican leaders who deny those allegations of large-scale voter fraud.

CAMEROTA: And, Melania Trump speaking out in a new interview with CNN. She says that her husband was "egged on" to say those lewd comments and she believes that Trump never accosted his accusers.

We are now just one day away from the final debate and 21 days until the election. So let's begin our coverage with CNN's Manu Raju. He is live in Las Vegas. Hi, Manu.

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Good morning, Alisyn. Yes, Donald Trump needs a stellar debate performance here tomorrow night, in the hall right behind me, to turn around his campaign. Polls continue to show him struggling in the battleground states and nationally, which is one reason why he may be painting himself as a victim of an unfair system.