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Rosenstein: Russia Probe Not a "Fishing Expedition" as Mueller Digs into Trump Finances; Chicago to Sue Justice Department over "Misguided" Sanctuary City Policy; British Model Kidnapped to be Sold as Sex Slave on Dark Web. Aired 11:30-12p ET

Aired August 7, 2017 - 11:30   ET

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


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[11:33:07] KATE BOLDUAN, CNN ANCHOR: "Not a fishing expedition," that is the message from the number-two top official at the Justice Department about the special counsel's Russia investigation. Deputy Attorney General Rod Rosenstein Sunday defending his department, their work, and his decision to appoint Bob Mueller to take over the Russia probe.

(BEGIN VIDEO CLIP)

ROD ROSENSTEIN, U.S. DEPUTY ATTORNEY GENERAL: The special counsel is subject to the rules and regulations of the Department of Justice. We don't engage in the fishing expeditions. That order that you read, that doesn't detail specifically who may be in the subject of an investigation because we don't reveal that publicly. Bob Mueller understands and I understand the specific scope of the investigation. And so, no, it's not a fishing expedition.

(END VIDEO CLIP)

BOLDUAN: This comes in the face of continued attacks from the president himself that the investigation is a hoax, a witch hunt and a complete fabrication.

Despite that, sources tell CNN that the special counsel is following the Trump money trail, looking into possible financial crimes, some unconnected to the 2016 election. And the president warned, of course, digging into his family finances would cross a red line. Now what?

Joining me, Susan Hennessey is here. She's a CNN national security and legal analyst and former NSA attorney. Michael Zeldin is a CNN legal analyst and former special assistant to Special Counsel Robert Mueller at the Justice Department. And Matthew Whitaker, a CNN legal commentator and former U.S. attorney in Iowa.

Great to see you. Thank you so much.

Matthew, the deputy attorney general says they are not going on any fishing expedition, but you think they are. Why?

MATTHEW WHITAKER, CNN LEGAL COMMENTATOR: Well, I was concerned when I read the CNN reporting, which you mentioned, that they were looking -- that the special counsel is looking at Trump's finances, unrelated to the 2016 election, unrelated to Russian coordination in that regard. I think that is a red line that is beyond the scope of the letter that the deputy attorney general issued and appointed Director Mueller as special counsel. Really, it's not controversial. It would be a fishing expedition if they start looking into essentially all of Trump's finances. I know that's what some on the left want. There is a Fourth Amendment issue, even as it relates to the president and others in his family. We cannot have unfettered prosecutors turning over every rock unrelated to any nexus to the underlying issues, which is the Russian coordination and the 2016 election.

[11:35:29] BOLDUAN: Susan, what is your view on this? Should looking into finances be off limits for Bob Mueller?

SUSAN HENNESSEY, CNN NATONAL SECURITY & LEGAL ANALYST: One thing that is important to note is the scope of Mueller's investigation is that investigation of which Comey testified about in March of this year. We don't know the full scope of the investigation. We know it includes looking into ties between Trump campaign and Russian officials, but we know it's been reported essentially involves investigations into financial crimes. So, it is a little difficult to draw red lines and say, well, looking into Trump finances would be a red line or the Trump Organization would be a red line because we don't know the full scope.

That said, there is a point where he would exceed his jurisdiction. We need to go to Deputy Attorney General Rosenstein. We've seen that Rod Rosenstein said there's no issue here. He is comfortable with the current scope of the investigation. So there's just no evidence right now that Mueller hasn't exceeded or even come close to exceeding by starting to look into the financial issues.

BOLDUAN: Michael, whether he's supposed to go there or not, what does it tell you that finances are now something of a focus in the investigation?

MICHAEL ZELDIN, CNN LEGAL ANALYST: I've said for a long time I thought following the money was going to be an aspect of the issue of whether or not there were links and coordination between the Russian government and Trump members of the campaign, and also as it relates to matters that arose or might arise out of that coordination. I think the question of, was there a financial motive that underpinned the behavior of the Trump campaign or the presidency of the Trump matter, with respect to sanctions is relevant. If it turns out it is completely unrelated, let's say they found tax evasion and nothing related to Russia, then the Mueller mandate is clear, and the regulations that is govern his behavior are clear, he refers it back to DOJ, and DOJ says we'll take it or, no, Bob, you continue and we'll expand your mandate. I don't think there's much of a fishing expedition. It's basically, excuse me, prosecution 101 to follow the financial dealings of the parties you are investigating to see whether they provide relevant information or motive for their behavior. I think we are a long way from determining red lines have been crossed or unrelated matters are looked into in a fishing expedition sort of way. BOLDUAN: Matthew, you say there's a difference here, that you think

it's also important to draw a distinction, a line, if you will, between Special Counsel Bob Mueller and Independent Counsel Ken Starr. Folks talk about them kind of one in the same. Why is it wrong to conflate the two in your view?

WHITAKER: I've noticed a lot of pushback from folks in response to my piece on CNN.com from yesterday where they say, well, Ken Starr, you know, in your analysis exceeded his authority and the independent --

(CROSSTALK)

BOLDUAN: Started with a land deal gone bad, and ended up with Monica Lewinsky.

WHITAKER: Yes. There are two differences. One, it wasn't independent counsel under a different law. But also Ken Starr went back and sought, expanded jurisdiction, as Michael's describing, so he could go after other things unrelated to the initial investigation, which was the White Water land deal. So, I think there are key distinctions there.

Listen, I -- you know, I'm not certain. I have to take the CNN reporting that they are looking at unrelated financial crimes as true. That gives me a lot concern. As a former prosecutor, somebody that presented cases to grand juries, grand jury investigations, I understand following the money. But at the same time, we cannot go on fishing expeditions, which are essentially casting a broad net looking for crimes unrelated to the purpose of the investigation, which is Russian coordination with the Trump campaign in the 2016 election.

BOLDUAN: Susan, can -- can Bob Mueller go down this road without looking at the president's tax returns?

HENNESSEY: I think this is a core questions. Considering how closely sort of the conduct of the Trump campaign and the Trump Organization, the president's failure to divest from his businesses, the closest which he has elected to comport both his campaign and private business, it's difficult to imagine a credible investigation that wouldn't involve looking into Trump Organization financials in at least some way.

BOLDUAN: Susan, Michael, Matthew, great to see you all. Thank you all so much.

ZELDIN: Thank you.

[11:40:08] BOLDUAN: Coming up for us, Chicago's Mayor Rahm Emanuel blasting the Justice Department in a battle over Chicago's status as a sanctuary city. Why Emanuel says a threat to withhold federal funds is unconstitutional.

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BOLDUAN: "A misguided warning that violates the Constitution" is what Rahm Emanuel calls new requirements that threaten to withhold millions of federal dollars in crime-fighting grant money from his city, unless they assist with all federal immigration enforcement. Today, the city of Chicago plans to file a lawsuit against the Department of Justice over this. It's the latest confrontation between the Trump administration and this so-called sanctuary city.

CNN's Ryan Young is joining us now for more on this.

Rahm Emanuel says Chicago will not be blackmailed, Ryan. Where is this going?

[11:45:13] RYAN YOUNG, CNN CORRESPODNENT: This is a big fight back and forth. Eventually, you knew the city was going to hit back toward Donald Trump. This has been a long-going conversation. Of course, President Donald Trump has been hitting the city over and over, especially on the campaign trail, talking about the violence in the city. Rahm Emanuel, the mayor of Chicago, said, look, this is a sanctuary city, we are fighting against violence, and the two do not have to go side by side. His argument is, if we start alienating communities throughout the city, there's no way people in immigrant communities are going to come forward and talk to the police.

But there's money involved in this. We are talking millions of dollars for grant funds. The city says it needs the money to continue buying tasers, bullet-proof vests, equipment for the police department. They are worried that shutting off the money will put them at a disadvantage.

When you talk about the federal government, they want access to people coming in who may be illegal immigrants. One of the things they want is a 48-hour hold. If someone has been brought in, they have a questionable immigration background, the city would then give ICE agents a heads-up so they could come in and have a conversation with them. The city believes that would freeze the idea of people in those communities coming forward and talking to police.

In fact, Rahm Emanuel talks to us about an hour ago about the situation.

(BEGIN VIDEO CLIP)

RAHM EMANUEL, (D), CHICAGO MAYOR: The fact is, by forcing us or the police department to choose between the values of the city and the philosophy of the police department of community policing, I think it's a false choice. It undermines our public safety agenda. So we are going to be filing a case saying that the Justice Department is wrong both on constitutional legal grounds. The federal government cannot coerce a city to change its policy.

(END VIDEO CLIP)

YOUNG: Kate, the big conversation here is, what happens next? The federal government is already hitting back. I'll just paraphrase this for you. In 2016, more Chicagoans were murdered than in New York City and and Los Angeles combined. So it's especially tragic that the major is less concerned with that staggering figure than he is spending time and taxpayer money protecting criminal aliens and putting Chicago's law enforcement at greater risk.

We've heard the concerns from the mayor. He says they will push forward and fight. The police department says they want to make sure anyone who calls 911 gets the kind of service they deserve. But this is obviously a conversation that we may see more cities join in, or do you see the city of Chicago taking this punch and taking this fight up by themselves? That's the question right now. But that lawsuit is moving forward. Now, the question is, who will blink first.

BOLDUAN: Sounds like the city has announced the lawsuit has officially been filed. It sounds like they are not only going to have a conversation, but this is on a collision course between the city and the federal government on this one.

Ryan Young, thank you so much.

Coming up for us, she went to a photo shoot and ended up captive and stuffed in a suitcase. This British model now speaking out after she was released after a harrowing experience. A gang nearly sold her on the dark web to the highest bidder.

We'll be right back.

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[11:52:37] BOLDUAN: Now an unbelievable story. A British model goes to a photo shoot, ends up assaulted, drugged, handcuffed, and stuffed in a suitcase. Twenty-year-old Chloe Ayling is back in the U.K. after being kidnapped and held captive for a week in Milan, Italy. Police say her abductor planned to sell her as a sex slave in an auction on the dark web. One person has been charged but they're still on the hunt for more.

For more on this, let's go to Barbie Nadeau, in Rome. She's been following all of this and has the very latest.

Barbie, honestly, how does something like this happen?

BARBIE NADEAU, CNN CORRESPONDENT: Well, you know, this is just blind trust. This young woman came to Italy thinking she would be in a photo shoot, as you said. She was really hoping to break into the international modeling business. She came here. Her agent set it up. There was a certain sense of legitimacy to it. And ended up, as you said, in a suitcase, taken to a remote area, where she was kept for a week while her captor told her he was going to put her on auction for a starting price of about $300,000, and see who the highest bidder was.

She's talking now. Let's listen a little bit to what she had to say about her ordeal.

(BEGIN VIDEO CLIP)

CHLOE AYLING, BRITISH MODEL: I've been through a terrifying experience. I feared for my life, second by second, minute by minute, hour by hour. I'm incredibly grateful for the Italian and U.K. authorities for all

they have done to secure my safe release. I've just arrived home after four weeks of being in Italy and I haven't had the time to gather my thoughts. I'm not at liberty to say anything further until I've been debriefed by the U.K. police.

(END VIDEO CLIP)

NADEAU: You know, one of the things investigators here, though, are doing is concentrating on the testimony by the suspect they have. This is a Polish man, 30 years old, who was her abductor. One of, she says, maybe four people as far as she could remember. The police are looking for at least one more person. He says that he's made a business of this, you know, stealing women and selling them on the web. He told her that he had made up to 15 million Euro selling women just like her on the web.

What the Italian prosecutors are looking for right now and the investigators is whether or not he's telling the truth, whether he had concocted the story, or whether there could be other women in some sort of captive situation -- Kate?

BOLDUAN: Sex trafficking, no question, is a huge issue internationally, but we don't often hear something with such details like this, Barbie. What are policy saying about -- is she the only one? Any indication beyond what this guy has said?

[11:55:01] NADEAU: Well, you know, they're investigating based on as far as they get into the deep web. The deep web is a place where it's very difficult to find out where these Web sites are located, things like that. It's not a transparent place. He said he was part of a group called the Black Death Group, which does exist. It was the subject of an Interpol investigation in 2014, for trafficking of arms, humans, all sorts of things. Police are trying to determine if he was part of that group, which is known for its trafficking businesses, or if he was sort of a wannabe abductor in this case. They don't know that right now. And what they are looking for, more than anything, is his accomplice. Because there's at least one other person involved. And maybe that person can at least lead them to the truth and, hopefully, not lead them to other girls.

[11:55:45] BOLDUAN: Unbelievable.

Barbie, thank you so much.

Coming up, President Trump tweeting up a storm this morning, lashing out at the media. Also touting some of his accomplishments in office. How is he doing 200 days in? Let's take stock. That's coming up.

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[12:00:13] DANA BASH, CNN HOST: Welcome to "Inside Politics." I'm Dana Bash.