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EARLY START

Mueller's Grand Jury; Russia Trying To Poach U.S.-Backed Syrian Rebels; Torch Tower Catches Fire In Dubai. Aired 5:30-6a ET

Aired August 4, 2017 - 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]

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The Russia story is a total fabrication. It's just an excuse for the greatest loss in the history of American politics. That's all it is.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: President Trump fighting back after reports emerge that grand jury subpoenas have been issued in the Russia investigation.

ALISON KOSIK, CNN ANCHOR: And, CNN has learned that Special Counsel Robert Mueller is following the money, investigating possible financial crimes as part of the ongoing probe into the Trump campaign.

Good morning and welcome back to EARLY START. I'm Alison Kosik.

BRIGGS: I'm Dave Briggs.

The president was in West Virginia last night in his element, stoking his base. It felt a bit like a campaign rally. We'll play you some of that ahead.

But first, a major advance in Special Counsel Robert Mueller's investigation of Russian meddling in the 2016 election. A source familiar with the matter telling CNN a grand jury has issued subpoenas relating to Donald Trump, Jr.'s meeting with a Russian lawyer at Trump Tower. CNN has learned these subpoenas seek both documents and testimony from people involved in that meeting.

Mueller's team continuing to probe whether the president or any of his campaign associates colluded with Russia during the presidential campaign.

KOSIK: A spokesman for Mueller's office declining to comment on the reports which were first posted by "The Wall Street Journal" and "Reuters."

The White House response coming from special counsel to the president Ty Cobb, noting in a statement that grand jury matters are typically secret, but adding the White House favors anything that accelerates conclusion of Mueller's work, quote, "fairly."

The president's outside lawyer Jay Sekulow downplaying the importance of the subpoenas. Listen to this.

(BEGIN VIDEO CLIP)

JAY SEKULOW, PRESIDENT TRUMP'S OUTSIDE COUNSEL: This is not a surprise because the impaneling of a grand jury in situations like this, when you've got an investigation, is typically how they move forward. That's -- it is really very much a standard operating procedure when you've got a situation like this.

But with respect to the impaneling of the grand jury, we have no reason to believe that the president's under investigation here.

(END VIDEO CLIP)

KOSIK: CNN's Athena Jones, on the road with the president in West Virginia, has more on his reaction.

(BEGIN VIDEOTAPE)

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Good morning, Alison and Dave.

In the wake of news that Special Counsel Robert Mueller has issued grand jury subpoenas related to Donald Trump, Jr.'s meeting last summer at Trump Tower with a Russian lawyer, the president came out swinging here in Huntington, West Virginia, in a state he won by more than 40 points in November.

The president spent five minutes blasting the Russia story as a, quote, "total fabrication and a hoax," and blasting Democrats for what he called their obsession with it -- listen.

TRUMP: Are there any Russians here tonight? Any Russians?

They can't beat us at the voting booths so they're trying to cheat you out of the future and the future that you want. They're trying to cheat you out of the leadership you want with a fake story that is demeaning to all of us.

JONES: President Trump's latest tirade signaling he has no plans to stop talking about this ongoing investigation which he has repeatedly termed a witch hunt -- Alison, Dave.

(END VIDEOTAPE)

BRIGGS: Athena Jones, thanks.

With the FBI Russia investigation now at the one-year mark, Special Counsel Robert Mueller following the president's money.

People familiar with the investigation telling CNN federal investigators have seized on President Trump and his associates' financial ties to Russia as potentially fertile ground for the probe. The sources describe an investigation that is now widened to include possible financial crimes.

KOSIK: The turn in the investigation seems to cross the red line President Trump warned Special Counsel Mueller about in an interview he had last month with "The New York Times."

CNN's Pamela Brown has the latest.

(BEGIN VIDEOTAPE)

TRUMP: Does anyone really believe that story?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT (voice-over): The Russia investigation continues to widen as federal investigators explore the potential financial ties of President Trump and associates to Russia.

Sources tell CNN financial links could offer a more concrete path to any potential prosecution. Investigators are delving into possible financial crimes, including some unconnected to the election.

For the president, that's going too far. He's warned that delving into his businesses is a, quote, "violation." Trump has maintained there's no collusion and he has no financial ties to Russia.

TRUMP: And I can tell you, speaking for myself, I own nothing in Russia, I have no loans in Russia, I don't have any deals in Russia.

BROWN: Now, one year into this complex probe, the FBI has reviewed financial records related to the Trump Organization -- the president himself, as well as his family members and campaign associates.

[05:35:04] CNN is told investigators have combed through the list of shell companies and buyers of Trump-branded real estate properties. They've scrutinized the roster of tenants at Trump Tower in Manhattan, reaching back several years.

Andofficials familiar with the investigation tell CNN Special Counsel Robert Mueller's team has examined the backgrounds of Russian business associates connected to Trump --

UNIDENTIFIED MALE: It's Miss Universe 2013.

BROWN: -- dating back to the 2013 Miss Universe pageant they hosted in Moscow.

UNIDENTIFIED MALE: Thank you to Aras Agalarov and the Crocus group for their amazing hospitality.

BROWN: CNN could not determine whether the review has included Trump's tax returns. But even investigative leads that have nothing to do with Russia, but involve Trump associates, are being referred to the special counsel to encourage subjects of the investigation to cooperate.

TRUMP: The entire thing has been a witch hunt.

BROWN: President Trump, keenly aware of the increased financial focus, regularly denounces the investigation.

TRUMP: Russia is fake news. Russia -- this is fake news put out by the media.

BROWN: Trump's team seeking to limit Mueller's investigation.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The president's point is that he doesn't want the special counsel to move beyond the scope and outside of its mission. And the president's been very clear, as have his accountants and team, that he has no financial dealings with Russia and so I think we've been extremely clear on that.

BROWN: CNN has learned new details about how Mueller is running his special counsel team, more than three dozen attorneys, FBI agents, and support staff. Experts in investigating fraud and financial crimes, broken into groups, focus separately on collusion and obstruction of justice.

There is also focus on targets like Paul Manafort, Trump's former campaign manager, and Gen. Michael Flynn, his fired National Security adviser.

CNN has learned that investigators became more suspicious of Manafort when they turned up intercepted communications that U.S. intelligence agencies collected among suspected Russian operatives, discussing their efforts to work with Manafort to coordinate information that could hurt Hillary Clinton's bid for the White House, according to U.S. officials.

In Flynn's case, the focus is now on his lobbying work for the Turkish government, which he failed to initially disclose as required by law.

While both men deny any wrongdoing, the approach to the Manafort and Flynn probes may offer a template for how the focus by investigators on possible financial crimes could help gain leverage and cooperation in the investigation.

BROWN (on camera): The president's attorney, Jay Sekulow, said to CNN in a statement, quote, "The president's outside legal counsel has not received any requests for documentation or information about this. Any inquiry from the special counsel that goes beyond the mandate specified in the appointment, we would object to."

And for contacts, investigators don't have to go directly to the president's lawyers to get financial information. Investigators can issue subpoenas to financial institutions and get records from the Treasury Department.

Pamela Brown, CNN, Washington.

(END VIDEOTAPE)

BRIGGS: That's a great job by Pam Brown.

All right. So what does all of this mean? Let's welcome in "CNN POLITICS" reporter Eugene Scott. Good to see you, my friend.

KOSIK: Welcome back.

BRIGGS: The president is on a 17-day vacation as renovations are made to the White House and when he comes to his New Jersey golf club on the front of his papers -- his New York papers -- is all about this grand jury.

So why is this development so significant that Bob Mueller is utilizing a grand jury?

EUGENE SCOTT, CNN POLITICS REPORTER: Well, it's because Mueller's trying to get as much information as possible -- documents, interviews to understand what exactly happened in that meeting at Trump Tower between Donald Trump, Jr., between Paul Manafort, between Jared Kushner, that will give them a better idea if anything inappropriate happened in that conversation and the campaign as a whole.

We've also seen Mueller expand the investigation as a whole into looking into the financial ties of people affiliated with the campaign, even some actions before the campaign, to get a better idea of just what the relationship between Russia and Trump aides could have been.

KOSIK: And he seems to be looking pretty far back into those financial disclosures or financial records of, you know, then just normal Donald Trump --

SCOTT: Sure.

KOSIK: -- of Donald Trump -- of the Trump Organization and of his family members as well.

I mean, it's interesting because back in July he had an interview with "The New York Times" talking about the Mueller investigation and what would be too far.

SCOTT: Sure.

KOSIK: What "The New York Times" called a red line, and I want you to listen to part of this interview and we'll talk on the other side.

(BEGIN VIDEO CLIP)

MICHAEL SCHMIDT, CORRESPONDENT, NEW YORK TIMES: If Mueller was looking at your finances and your family's finances unrelated to Russia, is that a red line?

MAGGIE HABERMAN, WHITE HOUSE CORRESPONDENT, NEW YORK TIMES: Would that be a breach of what his actual charge is?

TRUMP: I would say yes. You know, I would say yes.

Over the years, I've looked at maybe doing a deal in Russia, but I never did one, you know, other than I held the Miss Universe pageant there eight, nine years."

(END VIDEO CLIP)

KOSIK: OK, so now that Mueller is investigating what those financial ties are it does go beyond what President Trump wants. What is the president's next move? Is he going to go and try and get Mueller fired?

[05:40:11] SCOTT: Well, he's certainly gotten quite a bit of pushback from people even in his own party about the mere suggestion that that could be something he would entertain. So I'd be surprised at this level, considering how low his approval ratings are related to this issue, if he made that move right now.

But I think what he really wanted to communicate is that he just doesn't want Mueller looking at his finances. So your point earlier, even before he was president and he was celebrity Donald Trump, he didn't get the best press regarding this finances.

He's made it very clear during the campaign he wasn't really going to be forthcoming with his tax returns and business deals, and so I just don't think he wants that information public.

BRIGGS: Well, a red line for Republicans in the Senate is firing Mueller because they're holding what's called pro forma sessions, which means the president cannot make a recess appointment --

SCOTT: Right.

BRIGGS: -- if he decides to make some move on this.

But let's talk about the president last night in West Virginia in front of his base. This is his oxygen and it felt like a campaign rally, and even a campaign rally theme returned last night -- "lock her up" -- listen.

(BEGIN VIDEO CLIP)

TRUMP: It just makes them feel better when they have nothing else to talk about. What the prosecutors should be looking at are Hillary Clinton's 33,000 deleted e-mails.

CROWD: Lock her up.

(END VIDEO CLIP)

BRIGGS: Hard to believe we are past the six-month mark --

SCOTT: Right.

BRIGGS: -- and talking about a private citizen, locking her up, regardless of how you feel about Hillary Clinton.

But otherwise, the notion of this Russia investigation is the Democrats trying to, quote, "cheat you out of the future you want."

What do you make of this new defense?

SCOTT: Well, it's Donald Trump going to his base -- the people who got him through the primary. The people who got him ultimately, obviously, in the White House. And he's giving them the red meat. He's giving them what they bought into that made them feel like they had a voice.

I believe Monday it's the 200th day since --

BRIGGS: That's right.

SCOTT: -- the inauguration and Ibelieve he's mentioned Clinton every single week. And so it will be interesting to see if he continues to.

KOSIK: All right.

BRIGGS: Turn the page.

SCOTT: Yes.

KOSIK: "CNN POLITICS" reporter Eugene Scott, thanks so much for your expertise.

SCOTT: Thank you all.

KOSIK: All right. A big test for the Trump economy coming today. The July jobs report out in less than three hours. We're going to see if America's job market remains strong.

Now, July's report should be another good one. Economists predict 183,000 jobs were added to the economy and that the unemployment rate will fall back to 4.3 percent. That's the lowest level in 16 years and many experts think that's getting real close to full employment so that means there aren't many more available workers waiting for a job.

However, that has not translated to the kind of growth in wages that we'd like to see. It is expected to be around 2.4 percent, where wage growth hovered for the last two years. But if these predictions hold, that could mark the first one million jobs that were created under a Trump presidency.

The U.S. has added 863,000 jobs since February. That's a strong number but not quite enough to reach the president's promise of 25 million jobs in 10 years. The economy needs to average 208,000 a month to meet that goal.

BRIGGS: All right. It's been just a few weeks since President Trump ordered the U.S. to stop arming and training anti-Assad rebels in Syria.

What's the impact on the ground? We get the opportunity to go live to Syria with Fred Pleitgen, next on EARLY START.

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[05:48:03] BRIGGS: All right. It's been a few weeks since the president order the CIA to discontinue a program arming and training anti-Assad rebels in Syria. The decision already having an impact on the ground with Russia and the Syrian regime now trying to entice some rebel units to switch sides and fight for Assad.

CNN's Fred Pleitgen live in Syria with the latest. Good morning to you, Fred.

With this new momentum, are we seeing Russian and Syrian forces fighting ISIS?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, you know, it really is remarkable to see the extent, Dave, to which Russia has taken the initiative here in Syria and bolstered the Assad regime.

Now, a lot of these rebels groups because they know they're not going to get any sort of support from the United States anymore, are going into local ceasefires with the Assad regime, which are guaranteed by the Russians. And that's having one major effect, which actually is something that the Trump administration wanted in the past. It is freeing up Assad's forces to fight more against ISIS.

And, you know, we talk a lot about the fight against ISIS in Syria and Raqqa but Assad's forces are fighting against ISIS in a different place called Deir-ez-Zor which is south of Raqqa. It's a much bigger town.

And they've been making some major gains there. The Russians also, in a massive way, concentrating their firepower on that region as well.

At the same time, we do have also a bit a rift between Assad and the Russians as well, where the Assad troops have said look, we also want to continue fighting the rebels. But the Russians are saying at this point in time they want to keep trying to do these ceasefires and keep the focus on ISIS as well.

So it certainly is remarkable to see just how powerful Russia has become here in Syria, especially with the U.S. somewhat stepping back, Dave.

BRIGGS: It's a fascinating development. We're fortunate to have Fred Pleitgen live for us in Damascus, Syria. Thank you, Fred.

KOSIK: OK. A big test for the Trump economy today. The July jobs report coming out in less than -- in less than three hours from now. We're going to tell you what to expect on "CNN Money Stream," next.

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[05:54:10] KOSIK: Welcome back.

Firefighters tackle a spectacular fire at one of the tallest buildings in the world without any injuries or loss of life. The 84-story Torch Tower in Dubai lived up to its name as one side of the building lit up, engulfing about 30 to 40 residences. Officials say the building was evacuated and the fire put out in about two hours. There's no immediate word on the cause but the tower has caught fire

before. Its exterior paneling went up in a dramatic blaze just two years ago.

BRIGGS: In a landmark ruling, a Massachusetts judge has sentenced Michelle Carter to 15 months in prison for her role in her boyfriend's suicide.

Prosecutors say Carter sent Conrad Roy numerous text messages, one reading, "Just do it," urging him to take his own life in 2014. Both teens were battling mental health issues.

[05:55:04] Carter was convicted of involuntary manslaughter back in June. The judge stayed the sentenced Thursday, allowing Carter to remain free on appeal.

KOSIK: All right. Let's get a check on "CNN Money Stream" this morning.

Global markets mostly higher. This is after the Dow just made it to its seventh record close in a row. It was up 10 points.

The Nasdaq and the S&P 500, they fell, along with tech stocks. The market dipped slightly after news broke of the grand jury subpoenas in the Russia probe.

But overall, we really have been seeing Wall Street kind of shrug off all the turmoil in Washington. Instead, you're seeing Wall Street focus on earnings and a solid economy.

And investors are going to get a good gauge today about how the economy is doing with the July jobs reports. It will likely be another strong month.

Economists are predicting 183,000 jobs were added and that unemployment will fall back to 4.3 percent. That's actually the lowest level in 16 years.

Facebook continuing its quest to crack down on fake news. It's introducing a new feature called Related Articles, providing additional information on stories shared on its site. The aim is to make users think twice about whether a story is true and many will be fact-checked by third party sites.

Facebook faced a lot of criticism for letting fake news go viral during the election so it's taken a lot of steps to stop all this misinformation from floating around, including targeting and removing accounts that spread fake news. Oh, but it still has a long way to go.

BRIGGS: Yes, let's hope.

KOSIK: All right. Thanks for joining us. I'm Alison Kosik. It's been a fun week.

BRIGGS: I'm Dave Briggs. "NEW DAY" has their hands full.

Vicente Fox, the former Mexican president, weighs in on these leaked transcripts. And, Ken Starr, the former prosecutor, weighing in on the grand jury developments in the Russia investigation.

Have a great weekend, everybody.

KOSIK: See you.

(BEGIN VIDEO CLIP)

TRUMP: The Russia story is a total fabrication.

BRIGGS: New subpoenas issued to people involved in the Trump, Jr. meeting as the investigation expands to the president's finances.

KELLYANNE CONWAY, COUNSELOR TO THE PRESIDENT: He has said he has no financial dealings with Russia whatsoever.

SCHMIDT: If Mueller was looking at your finances and your family's finances, is that a red line?

TRUMP: I would say yes.

SEN. SUSAN COLLINS (R), MAINE: The president can't set red lines for Bob Mueller.

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: If you think there's another shoe to drop, it's going to be about a size 18.

KOSIK: New leaked transcripts show contentious conversations between President Trump and the leaders of Mexico and Australia.

REP. ERIC SWALWELL, (D), CALIFORNIA: I am worried about the way this president's conducting foreign policy.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: We need order out of chaos and start firing some people. It would probably be the right signal.

(END VIDEO CLIP)

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

ALISYN CAMEROTA, CNN ANCHOR: We want to welcome our viewers in the United States and around the world. This is NEW DAY. It's Friday, August 4th, 6:00 here in New York.

Chris is off and John Berman is here with me. No August recess for the news.

JOHN BERMAN, CNN ANCHOR: Yes, we brought the news this morning.

CAMEROTA: We did bring the news.

All right, here's our "Starting Line." Robert Mueller issuing new grand jury subpoenas in the Russia investigation. The special counsel is seeking documents and testimony from people involved in that June 2016 meeting at Trump Tower between President Trump's son, Don, Jr., his top campaign advisers, and a Russian lawyer.

CNN has also learned that federal investigators have crossed what President Trump said would be his red line. They are now focusing on the president's finances. Investigators are exploring the president, his family, and associates for any possible financial ties to Russia.

BERMAN: So with the Russia investigation widening, President Trump blasted the revelations as a total fabrication, insisting he didn't winbecause of Russia. The president says Democrats have made the whole thing up because they can't get over what he calls the greatest loss in American history.

All this as the president embarks today on a 17-day vacation to his private golf club in New Jersey. Now, you would ask who would ever criticize the president for taking some leisure time. He would.

Donald Trump went after Barack Obama all the time for taking breaks. On the campaign trail, Donald Trump pledged to take little vacation and vowed that he wouldn't have time for golf.

We have it all covered. Let's begin with CNN justice reporter Evan Perez live in Washington with news about the Robert Mueller investigation -- Evan.

EVAN PEREZ, CNN JUSTICE REPORTER: That's right, John.

The special counsel, Robert Mueller, is following the money as the investigation into Russia's meddling in the 2016 election enters its second year. Now, CNN has learned new details about what investigators are digging into and that includes the finances of the president and his family.

(BEGIN VIDEOTAPE)

PEREZ (voice-over): In a clear sign that the Russia investigation is advancing, CNN has learned that Special Counsel Robert Mueller has issued grand jury subpoenas related to the June 2016 meeting between a Russian lawyer and Trump campaign officials, seeking both documents and testimony from the people involved, according to a source familiar with the matter.

This, as the probe widens with federal investigators exploring the potential financial ties of President Trump and associates to Russia. Sources tell CNN that financial links could offer a more concrete path to any potential prosecution. Investigators are looking into possible financial crimes, including some unconnected to the election.

For the president, that's going too far.