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EARLY START

FBI Director Stands Firm Amid Criticisms; Clinton Defiant on Renewed FBI Probe; Trump Seizes on Abedin E-mails; Fight for Mosul; Aired 4-4:30a ET

Aired November 1, 2016 - 04:00   ET

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


[03:00:10] CHRISTINE ROMANS, CNN ANCHOR: James Comey standing firm. The FBI boss thinks he made the right call on Clinton's e-mail investigation.

JOHN BERMAN, CNN ANCHOR: The Clinton campaign crying foul, accusing James Comey now of a blatant double standard.

ROMANS: Donald Trump and Mike Pence teaming up. They'll be on the same stage together today.

Good morning, everybody. Welcome to EARLY START. Special very early, EARLY START. I'm Christine Romans.

BERMAN: I'm John Berman. It is Tuesday, November 1st. 3:00 a.m. in the East and the breaking news, just one week to go until Election Day and a slew of developments in just the last few hours. FBI director James Comey says he will not give any update on the new e-mails that could be related to the Clinton investigation until his agents have reached a conclusion.

Hillary Clinton maintains the investigation will amount to nothing, saying there is no case here. Donald Trump warns it would be a constitutional crisis for the country if Clinton is elected and all of this as the "New York Times" is out overnight with new reporting on Donald Trump's taxes and how he might have avoided paying hundreds of millions of dollars in federal taxes by, as they put it, stretching the tax law beyond any recognition.

ROMANS: We'll get to that in a moment. But first, the FBI urgently moving forward with its search of newly discovered e-mails from a laptop belonging to disgraced former congressman Anthony Weiner. There are hundreds of thousands of e-mails on that laptop, but agents are using sophisticated software to dramatically speed up their search and isolate only material related to Hillary Clinton's top aide, Huma Abedin.

CNN Politics reporter Eugene Scott tracking the very latest developments for us.

Eugene, the story, wow.

EUGENE SCOTT, CNN POLITICS REPORTER: Despite the sophisticated software being used by investigators, the FBI is not likely to finish its review of these new e-mails before November 8th election. They can get them sorted and catalogued in the next few days, but then agents have to coordinate with other federal agencies to determine what, if anything, might be classified.

FBI director James Comey is coming under intense fire for notifying lawmakers about the e-mail discovery so close to Election Day. But sources tell CNN he stands by his decision and believes he did the right thing. Comey's old boss disagrees. Former attorney general, Mike Mukasey, tells CNN he believes Comey never properly investigated Clinton in the first place and should not be in this predicament now.

(BEGIN VIDEO CLIP)

MIKE MUKASEY, FORMER ATTORNEY GENERAL: I know what it looks like when the FBI goes at something very hard to see if they can make a case. They ask the Justice Department to use a grand jury to get evidence. They interview the subject of the investigation at the beginning, not at the end, and they doggedly pursue evidence. Here none of those things was done.

(END VIDEO CLIP)

SCOTT: So how did these e-mails belonging to Huma Abedin wind up on her now estranged husband, Anthony Weiner's laptop? Abedin has told colleagues she was taken aback when she heard the news and has no idea how they got there. Her attorney released this statement.

"Abedin only learned for the first time on Friday from press reports of the possibility that a laptop belonging to Mr. Weiner could contain e-mails of hers. While the FBI has not contacted us about this, Miss Abedin will continue to be, as she always has, forthcoming and cooperative."

BERMAN: A lot going on overnight.

SCOTT: A lot.

BERMAN: With the investigation. Comey standing by his guns. Obviously what is interesting now, though, is the idea that we may not hear anything at all before Election Day.

ROMANS: Interesting also in that statement from Huma Abedin that she had not been contacted by the FBI yet until she heard about it from press reports.

All right, thanks so much, Scott.

BERMAN: And not on the campaign trail, right?

SCOTT: Yes. We saw that. Yes.

BERMAN: Not traveling with Hillary Clinton.

ROMANS: All right. Eugene, thank you. We'll talk to you again real quickly.

BERMAN: All right. The Clinton campaign is accusing James Comey of a blatant double standard. Campaign manager Robby Mook jumped on reporting by CNBC that last month Comey opposed naming Russia as the so-called state actor hacking Democratic officials, arguing that it was too close to Election Day.

(BEGIN VIDEO CLIP)

ROBBY MOOK, HILLARY CLINTON CAMPAIGN MANAGER: It's impossible to view this as anything less than a blatant double standard. That Director Comey would show more discretion in a matter concerning a foreign state actor than one involving the Democratic nominee for president is nothing short of jaw-dropping.

(END VIDEO CLIP)

BERMAN: Now we should note that CNN does not have the same reporting on Comey and Russia. The FBI has declined to comment.

ROMANS: On the campaign trail Hillary Clinton says flat out there is no case here. In Ohio Clinton invited investigators to go ahead, dig into her aide's e-mails but she says they would find nothing.

CNN's Joe Johns has the very latest from Cincinnati.

[03:05:01] JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: John and Christine, Hillary Clinton kicking off the final full week of campaigning right here in battleground Ohio, trying to use some of the anxiety surrounding the latest controversy to get out the vote.

At Kent State, making the case there is no FBI case on the latest e- mails that were discovered, and here in Cincinnati calling on the FBI to take a look at the new e-mails but predicting they won't find anything.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: You know, there is a new e-mail story about, you know, why in the world the FBI would decide to jump into an election without evidence of wrongdoing with just days to go?

And that's really good question. But I want you to know, look, I've said repeatedly. I -- you know, I made a mistake. I'm not making any excuses. But I will tell you this, if they want to look at some more e-mails of one of my staffers, by all means, go ahead. Look at them. And I know they will reach the same conclusion they reached when they looked at my e-mails last year, right?

(CHEERS AND APPLAUSE)

CLINTON: It wasn't even a close call, and I think most people have moved on. They're looking and focused on, OK, who is going to be the next president and commander-in-chief?

(CHEERS AND APPLAUSE)

(END VIDEO CLIP) JOHNS: Traveling in Ohio, Clinton was not accompanied by her long- time aide Huma Abedin. Instead accompanied by Capricia Marshall who served as her chief of protocol while she worked at the State Department. Three stops today for Hillary Clinton, all in the state of Florida.

John and Christine, back to you.

BERMAN: All right. Joe Johns, thanks so much.

This morning, Donald Trump's running mate Mike Pence, they go to Pennsylvania to talk about Obamacare. They will be on stage with senators, House members and Dr. Ben Carson. They're going to highlight what the Trump campaign calls the disastrous increases in Obamacare premiums and they will pitch Donald Trump's call to repeal and replace the Affordable Care Act.

You can bet Donald Trump will also bring up the issue about Hillary Clinton and the FBI and the e-mails. He's been doing that on the trail all the time.

CNN's Sara Murray with the latest from Michigan.

SARA MURRAY, CNN POLITICS REPORTER: Good morning, John and Christine.

While Donald Trump kicked off his week by spending the day trying to convince the American voters that the FBI was sure to find the worst in Hillary Clinton's e-mails and warning them that if they elect her, she'll be embroiled in scandal for years to come.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: We will be facing the very possibility of a constitutional crisis with many dimensions and, you know, this is so true, deleterious consequences should Secretary Clinton win this election. In other words, we're going to be tied up in court for the rest of our lives with this deal. She's not going to win the election, but I'm just saying.

(END VIDEO CLIP)

MURRAY: Now even though FBI Director James Comey has said it's too early to say whether anything significant will come out of these e- mails which came from a computer that was shared by Huma Abedin, a Clinton aide, and her husband, Anthony Weiner, that certainly hasn't stopped Donald Trump from seizing on it on the campaign trail. And it's given his campaign new hope that they may be able to compete in blue states that once seen out of their reach. He spent Monday barnstorming in Michigan and on Tuesday, he is hitting up Pennsylvania and Wisconsin.

Back to you, guys.

ROMANS: All right, Sara. Thank you.

The Trump campaign quickly distancing itself from a self-described white nationalist supporter who paid for robocalls in Utah smearing a third party candidate. The calls to nearly 200,000 homes slammed Evan McMullin, an independent doing well enough there to turn Utah in a battleground state. The calls focused on McMullin's support for gay marriage.

(BEGIN VIDEO CLIP)

WILLIAM JOHNSON, SELF-DESCRIBED WHITE NATIONALIST: My name is William Johnson. I'm a farmer and a white nationalist. I make this call against Evan McMullin and in support of Donald Trump. Evan McMullin is an open border, amnesty supporter. Evan has two mommies. His mother is a lesbian, married to another woman. Evan is OK with that. Indeed, Evan supports the Supreme Court ruling legalizing gay marriage.

(END VIDEO CLIP)

ROMANS: The calls also claim without evidence that McMullin himself is a closeted gay man because he is single and he's in his 40s. The Trump campaign swiftly condemned the robocalls saying it has no connection to it.

BERMAN: Breaking overnight, Senator Richard Burr is apologizing for suggesting gun owners may want to put a bulls eye on Hillary Clinton. The North Carolina Republican made the comment in private over the weekend. CNN broke this story. In a recording obtained by CNN you can hear Burr talking about a visit he made to a gun shop the day before.

(BEGIN VIDEO CLIP)

SEN. RICHARD BURR (R), NORTH CAROLINA: Nothing made me feel any better than I walked into a gun shop, I think yesterday in Oxford. And there was a copy of "Rifleman" on the counter. It's got a picture of Hillary Clinton on the front of it. I was a little bit shocked at that. It didn't have a bulls eye on it.

(LAUGHTER)

(END VIDEO CLIP)

BERMAN: The Brady Campaign which is pro-gun control group that supports Hillary Clinton is calling on Senator Burr to step down.

[03:10:04] Senator Burr said the comment he made was inappropriate. The Clinton campaign has not commented.

You know, also on this tape that Manu Raju, our reporter, obtained, Richard Burr says that he wants -- if Hillary Clinton wins he will fight to keep only eight members on the Supreme Court. He will work, he says, for the next four years not to fill the vacancy led by the death of Antonin Scalia.

ROMANS: All right. There's also this blockbuster report in the "New York Times" today with new details on the aggressive tax strategy Donald Trump may have used to avoid paying taxes on nearly a billion dollars of income in the late 1990s.

The "New York Times" says it has documents suggesting that Trump used losses from his Atlantic City casinos to offset taxes on other business income, at the same time his creditors forgave much of his debt on bankrupt properties.

Here is an example the "Times" gives us to show how this works. Suppose Trump has a $100 million loan. His property goes bankrupt and he can only pay back, say, $60 million. His creditors would then be forced to forgive $40 million, which normally will be treated as income. Forgiven debt will be treated as income and therefore taxed. But the move the "Times" claims that Trump made was converting that $40 million into equity in his own real estate partnerships and dodging a huge tax bill.

Now this tactic is now illegal. It's unclear if Trump used it properly or was ever investigated by the IRS or if they ever scrutinized this. The "Times" quotes John Buckley, the former chief of staff for Congress' Joint Committee on Taxation, saying, quote, "He deducted somebody else's losses. He is double-dipping big time," end quote. Buckley tells the "Times" that since the bondholders were likely declaring losses for tax purposes, Trump shouldn't be able to as well.

To be clear, it is impossible to confirm if Trump actually used this tactic because he refuses to release his tax returns. Trump's spokesperson tells the "Times" their story is all speculation and they are misunderstanding or misreading tax laws.

It's a good read in the "New York Times" about how Donald Trump used other people's money, OPM as he has said and people in the business say, and then took other people's debt, converted it to equity and was able to dodge a lot of taxes.

BERMAN: Double dipping is the phrase there and it's stuff that's illegal now, stock for debt, partnerships for debt. It's an interesting read.

All right, Ohio Governor John Kasich has already cast his ballot for president, and he voted for a Republican nominee. Just not the one who's on the ballot right now.

Plus, Donald Trump's running mate in the dark. Find out what he did when the lights went out. Intrigue.

(COMMERCIAL BREAK)

[03:16:42] ROMANS: Now Donald Trump's running mate Mike Pence left in a dark at a rally in Clearwater, Florida, last night. Literally. Pence was 10 minutes into his appearance when power blew out at the airport hangar where he was speaking. Someone grabbed a bullhorn and a flashlight and the show went on.

BERMAN: It's spooky, spooky campaign rally.

ROMANS: Listen to Pence once his audio was restored. (BEGIN VIDEO CLIP)

GOV. MIKE PENCE (R), VICE PRESIDENTIAL CANDIDATE: I'm here with the lights on, the lights off, the bullhorn, the flashlights, because I'm here for this team. I'm here for this movement. I'm here for this cause to make America great.

(END VIDEO CLIP)

ROMANS: Pence paid a visit to Florida's Space Coast earlier in the day. He cited the space program as another example of American leadership in decline and promised more support for NASA under a Trump administration.

BERMAN: It's like the Blair Witch Project.

All right. The powerful Republican governor of a key swing state voted for a Republican nominee for president, just not the one on the ballot this year. Ohio Governor John Kasich wrote in 2008 nominee Senator John McCain. Now John Kasich who ran for president himself, he never really got on the Trump bandwagon. He vowed not to vote for him once and for all after "The Washington Post" unearthed the video of Trump bragging about grabbing women's genitals. A spokesman for John Kasich says he voted for the Republican ticket on the rest of the ballot.

ROMANS: All right. President Obama making a special Halloween guest appearance with Samantha Bee on her TBS late night show "Full Frontal," which is a very funny show, I have to say. She asked the president if Hillary Clinton were elected what would be the female equivalent of "You weren't born in this country"?

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think the equivalent will be she's tired, she's moody, she's being emotional.

SAMANTHA BEE, HOST, "FULL FRONTAL": There's just something about her?

OBAMA: There's something about her. When men are ambitious, it is just taken for granted, well, of course they should be ambitious. When women are ambitious, why? That theme I think will continue throughout her presidency, and it's contributed to this notion that somehow she is hiding something.

BEE: What a nasty woman.

(END VIDEO CLIP)

ROMANS: She also asked the president to share a spooky story about what happens if people don't vote. His response, Donald Trump could be president.

BERMAN: All right. Up next we're talking about the battle for Mosul. Iraqi forces, they're poised to move in, but thousands of civilians could be caught in the crossfire. We'll have a live report from the front lines coming up.

(COMMERCIAL BREAK)

[03:23:38] ROMANS: Breaking overnight, at least 5,000 transit workers walk off the job in Philadelphia. The SEPTA strike will affect all subway buses and trolley routes across the city. Regional rail is the only service running in the city for the morning rush. Mayor Jim Kenny urging at least 800,000 commuters, folks, you got the make alternate travel arrangements this morning. The transit union and management hope to restart negotiations soon.

BERMAN: One person is dead and at least five others injured following a giant gas explosion in Alabama. This blast happened along the Colonial pipeline, not far from where this pipeline burst last month. You can see the flames there. Alabama Governor Robert Bentley said last month's rupture led to gasoline shortages across the south. The pipeline was apparently under maintenance when this blast occurred. An investigation is now under way.

Question is, will there be fallout from this blast. You can expect to pay more at the pump in the short term. AAA says people in the southeast and the mid Atlantic states will see gas prices spike in the coming months, reversing at least a temporary dip in prices.

You see Christine Romans getting nervous there. I start reporting on gas prices and money, she's like, you're moving into my territory right now.

ROMANS: I know. We have to talk to the bosses. Whoa, whoa, gas prices my territory.

BERMAN: All right, sorry.

ROMANS: All right. Now to the fight to recapture the Iraqi city of Mosul from ISIS. The Pentagon says the campaign is proceeding as planned. Iraqi troops reportedly entering the outskirts of mosul following two weeks now of slow but steady advances by U.S.-backed coalition forces.

[03:25:04] CNN's Michael Holmes is there for us. He is live in Irbil, Iraq. He's got the very latest for us.

Good morning, Michael.

MICHAEL HOLMES, CNN CORRESPONDENT: Good morning, Christine. Yes, at the beginning of this campaign Iraqi forces were saying they were looking at a couple of weeks before they got to Mosul. They're pretty much right bang on time, on schedule. The timing for actual entry to the city proper still pretty uncertain. There's a lot to consider tactically, but we do know the counter terror units, the elite sort of tickle the spear, if you like, are now said to be less than a kilometer away from the perimeter of the city, the actual outskirts.

Now they may need to wait for other units to form a more uniformed front, but certainly those lead units, they're pretty much there. Even when forces, though, do begin to enter the city, that's when, of course, the real fight begins, and it could take weeks. We know that ISIS is ready or as ready as they can be. There are those oil trenches that have been dug, likely to be set ablaze to obscure the view of those coalition warplanes overhead and hamper an advance.

We know of dozens of truck and car bombs prepositioned around the city, four were actually used yesterday. And of course, the important issue of those human shields, their fate remains to be seen as the advance continues, Christine.

ROMANS: All right. Michael Holmes for us in Irbil. Thank you so much for that reporting, Michael.

All right. The FBI using sophisticated software. They're sorting through thousands of new e-mails discovered on a laptop owned by Anthony Weiner. How will this impact the presidential election? We've got the latest on that investigation next.

(COMMERCIAL BREAK)