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ANDERSON COOPER 360 DEGREES
Mueller Subpoenas Trump Organization in Russia Probe; President Trump Says He Made Up Trade Claims In Meeting with Trudeau; The Thin Line Between T.V. And The White House; Milbank: Kudlow Consistently Wrong About Economy; The Gathering Storm. Aired on 8-9p ET
Aired March 15, 2018 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[20:00:11] ANDERSON COOPER, CNN HOST: Good evening.
We begin with a kind of development in the Russia investigation that not only takes it one step closer to the president himself but also could take special counsel Robert Mueller one step closer to danger. Today, according to a source familiar with the matter, he subpoenaed the Trump organization itself. "The New York Times" which broke the story says it includes Russia related documents within The Trump Organization.
Now, it's the first we've known about Mueller demanding documents involving President Donald Trump's businesses. Remember the family business and family finances are certainly a touchy subject for the president. He said so in a conversation with "The New York Times'" Michael Schmidt and Maggie Haberman.
(BEGIN AUDIO CLIP)
MICHAEL SCHMIDT, NEW YORK TIMES: If Mueller was looking at your finances, your family's finances, unrelated to Russia -- is that a red line?
MAGGIE HABERMAN, NEW YORK TIMES: Would that be a breach of what his actual charge is?
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I would say yes. I would say yes.
(END AUDIO CLIP)
COOPER: Now, of course, today's subpoena is Russia-related not personal. But with The Trump Organization, the personal and business, well, that sometimes blurs.
With that in mind, let's get some perspective now by phone from Maggie Haberman who shares a byline on the story today.
Maggie, what more can you tell us about this move by Special Counsel Mueller?
HABERMAN (via telephone): Anderson, it's the first time that we know of that there has been a subpoena for these kinds of documents, that does not mean that it is the first one. There may have been an earlier one but this one contains a number of search terms, including one that relates to Russia.
One person pointed out to me there could be all manner of things that show up related Russia if you're going through Trump Organization emails, if you're going through documents, it doesn't necessarily mean anything nefarious. It doesn't necessarily mean anything financial. But what it does tell us is that this probe which the president's legal team had told him, you know, would be done by December or soon after he'd be cleared, not only is it not ending anytime in the next couple of weeks, we're stretching at least into the summer here.
The president being clear is not coming anytime soon, this gets into his business and remember he had told Mike Schmidt, my colleague, and me in the Oval Office in July of 2017 that he would consider Robert Mueller going into his personal finances to be a crossing of a red line, you know, beyond the scope of what is charge of what he is supposed to be looking at.
Again, we don't know exactly what this subpoena is searching for but we do know that any subpoena of Donald Trump's businesses is not going to make him happy.
COOPER: Yes, I mean, is there any reporting on why his attorneys were telling him oh it's going to be thanksgiving there's going to be New Year that this thing is going to get rap up?
HABERMAN: So I think some of it was really which casting to some extent but some of it and people have said this to me privately, was about trying to keep the president from popping off at Mueller and reacting, a lot it was trying to keep him just calm and from making things worse for himself.
It clearly worked, by the way. He has not really lashed out at Mueller and -- at least publicly, I think he has said all number -- all manner of things privately. But publicly, he has not done himself damage on that front and that's what they were trying to avoid.
COOPER: Do we know when the subpoena was issued? And -- I mean, why wouldn't the special counsel's office, you know, issue -- why would they do subpoena rather than just asking for documents directly?
HABERMAN: It's an excellent question. We know that it was actually -- issued at some point in the last couple of weeks. They have made other asks for documents and those documents have been supplied by all accounts -- The Trump Organization has had a habit of complying with these requests when they have just been requests. So, it is interesting this is now a more forceful approach by Mueller's office. It means that, you know, The Trump Organization faces a greater legal onus if they are not fully compliant. 2
It does suggest that Mueller's investigators think there needs to be an extra layer of force involved.
COOPER: You also have some reporting that that there could be another administration shake-up as soon as tomorrow.
HABERMAN: That is true because it's Donald Trump, it also may not be as soon as tomorrow because if he sees all of us reporting this, he's turned to change his mind, just essentially to do the opposite of what everyone said he would do. That having been said, what I've been told by several people in the White House is the president clearly has made up his mind about a number of cabinet officials that they will not be with him for much longer. The question is, how much longer?
There are a couple of different buckets here. There's the people who have caused him embarrassing headlines bucket, which is Ben Carson, the HUD secretary and the V.A. Secretary David Shulkin with reports that they have been you know even taxpayer money lavishly.
Then you have people like John Kelly, the chief of staff, who the president has been at odds with for many weeks, but who has said no to the president a bunch of times, who had tried to keep him from firing the Secretary of State Rex Tillerson until finally he couldn't hold the president off anymore.
[20:05:12] And then there's H.R. McMaster, the national security adviser who the president has been frustrated with for a very long time. I'm not sure that we will see that change tomorrow. I'm not sure that will necessarily see any change tomorrow. It could be as soon as tomorrow but things are going to move in the coming days.
One person very close to the president told me that there is a desire to sort of rip the band-aid off by some -- by some people in the White House who think the president would be smart to get it all done with at once and have told him that,
COOPER: Maggie Haberman, thanks.
HABERMAN: Thank you.
COOPER: Well, joining us now, two lawyers flanking a legendary investigative reporter Carl Bernstein, along with Jeffrey Toobin and Anne Milgram.
So, Jeff, how big a deal is this move by Mueller?
JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Well, it's really hard to evaluate this without seeing the actual subpoena itself, but this is certainly an extremely relevant part of Mueller's investigation. Now, one of the great mysteries of Donald Trump's performance both as president and as a candidate is why he has been so solicitous of Vladimir Putin, why did he change the platform of the Republican Party to make it more sympathetic to him?
One hypothesis is that he has some sort of business relationships with Russia or Russians, and that's what Mueller appears to be looking for, looking for evidence of business connections between The Trump Organization and Russia. That is a perfectly appropriate thing for Mueller to look for. He's looked forward voluntarily apparently in the past. It's unclear whether the subpoena reflects you know frustration that The Trump Organization is not being forthcoming or simply a cleanup act, but this is well within Mueller's jurisdiction.
COOPER: Yes. Anne, why do you think he would issue a subpoena rather than just asking for the documents?
ANNE MILGRAM, FORMER FEDERAL PROSECUTOR: So, there are a lot of reasons you'd issue a subpoena and truthfully, it's very common in a criminal investigation to issue a subpoena for documents, first, because you want to have an official mandate that somebody turn over those documents if you send a letter, it's a request for information. It's more voluntary. You could always follow up with a subpoena, but a subpoena is a demand for information.
The second is to make sure that you get all the documents you've asked for, that there can be no question that you are formally requesting a certain number of documents. And the last is sometimes a timing issue, a subpoena will have -- it could be a forthwith subpoena, that means bring it immediately or it could be scheduled for a couple weeks out. But it's usually very finite asking for information within a certain period of time. So, it's definitely more forceful, more formal and it is the common way that a prosecutor would get information like this in a case.
COOPER: Carl, I mean, regardless of why he did this it's certainly a sign that Mueller is going farther than the House and Senate intelligence committees which are not looking into the president's finances.
CARL BERNSTEIN, CNN POLITICAL ANALYST: Of course, this is Mueller's charter. This is what he's expected to do and he would be derelict if he did not do this.
Look, if there is nothing there as Donald Trump and his family maintained, if there are no business activities that cross a line into an area in which Donald Trump might have been manipulated as a candidate by the Russians willingly, wittingly or unwittingly, if there are no business dealings there that that look like some kind of collusion or some attempt by the Russians to get something on Trump and make him act in the same way, he's got nothing to worry about and he ought to welcome this and say here the books will open them up.
But it is known by other lawyers in this procedure that for a while, Mueller has been very focused on Trump's Russian dealings and with ethno Russians in terms of income he has gotten from them, in terms of loans he has gotten from them and particularly taking a very hard look and critical look at Trump's attempt to build a Trump Tower in Moscow.
His consigliore Michael Cohen, a sort of his fixer, is deeply involved in in attempting to make that project happen and it was suddenly withdrawn and didn't work. That's a focus.
And also, Mueller has had as did the FBI before him and Comey, the tax returns of Donald Trump. And they figure also in this investigation as they ought to because they provide a partial roadmap.
COOPER: Jeff, what we don't know is how far back Mueller would want documents relating to Russian The Trump Organization.
TOOBIN: Well, that's true and again the scope of the subpoena is very important. In his interview with "The New York Times", he said that the red line was any questions or inquiry into his relationships -- business relationships except with Russia.
[20:10:01] What's unclear is that whether this subpoena deals with countries other than Russia. And as you point out, the issue of duration is extremely important.
You know, I just did a piece for "The New Yorker" about Trump and Russia, Trump has been involved with Russia, trying to build there since it was the Soviet Union. He first went there in 1987. So, you know, how far back to go in his relationship with Russia, it is a very complicated and difficult question.
And, you know -- and I don't mean to fault the reporting, it's very hard to get this reporting -- but we don't know if this just relates to the 2015 attempt to build the Trump Tower in Moscow, or if it goes much farther back or even back to the '80s.
COOPER: And, Anne, I mean, do you agree what we were talking about with Maggie before then this does certainly indicate that the special counsel investigation is not coming to a close anytime soon?
MILGRAM: I do agree very strongly. You know, I think that if you were to imagine the special counsel's office, you would think about there's a white board with lots of different lines that are different parts of the investigation and Russia remains a central part of the investigation, that it -- there is this question was there quid pro quo. Remember, we still have not seen charges brought in connection with the computer hacking and the release of the emails. So, there are a number of pieces that are still outstanding.
And I would suspect another line would be financial involvement in connection to the president and to his organization. And so, there are a lot of pieces that are still out there that we have reason to believe this will go on for some time.
BERNSTEIN: Let me add one thing.
COOPER: Go ahead.
BERNSTEIN: Go ahead -- that numerous witnesses and their lawyers have been telling journalists about how shaken they and their clients have been coming out of the interviews with Mueller's investigators, because of the depth of Mueller's investigators knowledge, because of the documents he has and because of the questions they've been asking in which the clients are asked to finger other people and tell everything they know about other people. And they indeed know about other people partly because Mueller's people have perhaps a million pages of emails and documents provided by the White House, but more than that by the Government Services Administration.
And it gives Mueller's investigators great knowledge in which to question these witness and say, look, you tell us about X, Y, or Z, because we have here in our hand what isn't in an email from somebody else saying something that you better let us know what really happened here. And this is particularly relevant to dealings with Russia, Trump's income and what the Trump business organization does in terms of whether or not it operates aboveboard in that part of the world.
COOPER: Jeff, I mean, to Carl's point about all the documents they have, would the White House be aware of the full scope of the documents that Mueller already has in possession?
TOOBIN: Absolutely not. I mean, you know, what one of the cardinal rules of doing a white-collar investigation is you don't tell one person what you have seen from -- produced from other people. I mean, the White House obviously knows what documents it has produced and certainly the White House witnesses who have gone in to testify would be prepared and shown those documents.
And there's nothing wrong with that. I mean, you know, all of us get hundreds of emails. There is nothing wrong with refreshing your recollection with, you know, seeing emails that you may not have seen for a year. But the White House witnesses certainly would not be told by Mueller what documents had been produced from the General Services Administration or from The Trump Organization.
And, you know, what is most effective in examining witnesses is showing them documents that they may not know that you've seen and, you know, that is what makes a good white-collar investigation. These -- it's very complicated. It's an enormous number of documents often, but distilling those on to the ones that that really matter, that's what good prosecutors do.
COOPER: Yes. Jeff Toobin, Carl Bernstein, Anne Milgram, thanks very much. Appreciate it.
Coming up next, the confrontation that President Trump says he had with Canada's prime minister, which might not have actually happened over a trade deficit which does not actually exist.
Plus, his strange complain about Japanese dropping bowling balls on American cars. It's either a trip down the rabbit hole or just another Thursday around here, keeping him honest, next.
Also tonight, late updates from south Florida where a bridge collapsed, tragedies emerging from the rubble tonight.
[20:17:53] COOPER: Well, keeping them honest tonight, we intended to report on efforts by the White House and the president himself to spin their way out of a claim the president made at a fundraiser last night about a face-to-face conversation he had last month with Canada's Prime Minister Justin Trudeau. And as convoluted as that already sounds, it gets, well, kind of stranger, because about an hour ago, the White House continued their damage control and said the face-to- face meeting that the president talks about was actually not face to face at all and was instead a phone call.
That followed a respected Canadian journalist citing his sources in the prime minister's office saying they don't remember any such specific conversation actually taking place. Like I said, weird. But it's important to keep all that in mind as we talk about it
because we don't really know who said what and when. We could be fact-checking a fund-raiser fairy tale of the president's own making.
So, with that disclaimer, here's what the president said at the fundraiser last night about this alleged confrontation over trade with Canada's Prime Minister Justin Trudeau.
(BEGIN AUDIO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Trudeau came to see me, he's a good guy, Justin. He said no, no, we have no trade deficit with you. We have none. Donald, please.
Nice guy, good looking guy, comes in -- Donald, we have no trade deficit.
He's very proud because everybody else we're getting killed with our -- so he's proud. I said, wrong, Justin, you do.
I didn't even know. Josh, I had no idea. I just said, you're wrong. You know why? Because we're so stupid. It's impossible. And I thought they were smart.
(END AUDIO CLIP)
COOPER: So, the president saying I didn't even know I had no idea, but I just said you're wrong.
In other words, he did not know the facts so he made them up. Keeping them honest, though, it's not like talking trade with the Canadian prime minister should have taken President Trump by surprise or frankly anything else.
When President Obama and Prime Minister Trudeau met for the so-called bromance summit two years ago, they talked trade, Canadian dairy and exports to be specific. George W. Bush and his Canadian counterpart wrangled over timber exports. Virtually every president, every Canadian prime minister have at some point argued over one trade issue or another, that's because Canada is one of this country's biggest trading partners, and keeping them honest, it's also one of the few countries with which the United States has a trade surplus.
Not only is that a fact, it's a fact the president himself put his signature to. Just a few weeks ago, this is the economic report of the president. It's 562 pages-long. The money quote as it were is on page 228.
Figure five six illustrates the distribution of goods and services balances across major U.S. trading partners in 2016, all countries show a services surplus offsetting a goods deficit with U.S. running a net bilateral surplus only with Canada and the United Kingdom. And as we said on page 11, there is the president's signature.
So, when he spoke with Prime Minister Trudeau he was apparently unaware of the facts inside the report that he himself signed only a few weeks before. Now, Justin Trudeau was right. The U.S. does not have a trade deficit with Canada, yet here's what the president tweeted this morning.
We do have a trade deficit with Canada as we do with almost all countries, some of them massive. PM Justin Trudeau of Canada, a very good guy, doesn't like saying that Canada has a surplus versus the U.S. negotiating, but they do, they almost all do, and that's how I know.
Again, the facts the president's own facts say no, but again, it's possible we're talking about the president defending statements he never actually made during conversation that never actually happened, despite him telling an audience it did. In any event, by this afternoon, Press Secretary Sara Sanders was fielding questions on this topic.
(BEGIN VIDEO CLIP)
REPORTER: Are there other times that the president has had conversations with his counterparts around the world in which he is not accurate in terms of the conversation that he's having with them?
SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Well, the president was accurate because there is a trade deficit and that was the point he was making, is that he didn't have to look at the specific figures because he knew that there was a trade deficit. Whether they got down into the dollar amount or not, there is a trade deficit between the two countries. I don't have that number right in front of me but I know that we have it. We'll be happy to provide it to you.
(END VIDEO CLIP)
COOPER: Keeping them honest, that is not factually correct, full stop. As for Ms. Sanders, having the info and providing it, she later tweeted that there's a deficit in goods only, not overall trade. And, of course, when measuring surpluses or deficits, you count everything, especially if talking to another world leader and making it clear you're counting everything.
But again, that is if conversation even actually took place as the president claimed. And since we're now fully in the weeds in a hall of mirrors and perhaps down a rabbit hole, it's worth noting something else that the president said last night when talking about trade -- talking about the difficulties selling American cars in Japan, he talked about one vehicle that had met all the requirements, except for one.
Quoting the president here, he said: And they were ready to prove it approve it and they said, no, no, we have to do one more test -- he's talking about the Japanese. It's called the bowling ball test. Do you know what that is?
The president then explained: that's where they take your bowling ball from 20 feet up in the air and they drop it on the hood of the car and if the hood dents, then the car doesn't qualify. You know where he's going with this, I think.
Again, quoting: Well, guess what, the roof dented a little bit and they said, nope, this car doesn't qualify. It's horrible the way we're treated, it's horrible.
And yes, it sounds horrible and horribly unfair dropping a bowling ball from 20 feet up onto the hood of a car. But keeping him honest, no one can actually figure out what the president was actually referring to. There is apparently no bowling ball -- bowling ball test. There are countless standards in Japan, here and elsewhere, on collisions, airbags, emissions pedestrian safety, you name it, nothing involving bowling balls and dented hoods.
Here's how Sarah Sanders dealt with that fact.
(BEGIN VIDEO CLIP)
SANDERS: Obviously, he's joking about this particular test, but it illustrates the creative ways some countries are able to keep American goods out of their markets. Thanks so much, guys. See you tomorrow.
(END VIDEO CLIP)
COOPER: She was reading that directly from a page you could tell. Who knows what tomorrow may bring?
Tonight brings CNN chief international correspondent Christiane Amanpour who's joining us. She's host of the aptly named "AMANPOUR".
Christiane, what message does it send to world leaders because when -- I mean, it comes to relationships between the U.S. and its allies, don't those leaders believe what the president says especially when it's one of our closest allies, Canada?
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, look, it is -- it is actually very troubling because this seems to be part of the president's and the White House sort of feeling from the gut policy. You know, he said that many times, and it also is -- you know, really troubling because we do deal in facts and we deal in empirical evidence, and so should world leaders expect that when they have conversations with the president the United States or his advisors. They expect him to be fully briefed on major issues of trade as you just mentioned and the like.
And, of course, as we move into potential, really hard negotiations, North Korea for instance, Iran, the decision as to whether to pull out of the nuclear deal, you know, you really have to know the facts in order to make the wisest decisions.
COOPER: Well, it's also one thing for the president to make up facts in some sort of negotiating discussion with -- you know, the Canadian prime minister. But then -- and it's a lie about the facts -- but then to go in front of an audience and talk about how you've lied to the Canadian prime minister just seems doubly odd.
[20:25:09] AMANPOUR: Well, look, I mean, look, who knows? Who really knows why if you're not the person saying it?
But it does sort of, you know, bring you again back to this situation that we seem to be living in, whether it's tweets, whether it's these kinds of conversations and recorded conversations and transcripts, we hear that the president has had conversations outside the range of cameras and the like, and it does sort of kind of summon up, conjure up an alternative universe.
Whatever it is, it is a flouting of the norms and the rules of the road of competent, working governance, and that's the thing that's quite dangerous and quite mystifying because then you have the White House press spokesman, the communications director going out and having to repeat these things, because that's who she works for and she's going to repeat them. And as you notice, actually reading from a page on the last one.
So, people around the world have kind of factored in the Trump factor and they say, you know what he says what he tweets we're just going to really focus on what he actually does, but it's getting more complicated as the issues become much, much more complicated and even on trade -- I mean, Anderson a couple of whenever it was ten days ago, he decided to slap huge percentage tariffs on steel and aluminum on who? On Canada, his closest ally, on South Korea, who he needs for the North Korea negotiations, on Europe and the others.
The ones he's trying to hurt, China, barely sell any steel to the United States, some 2 percent. And then it's the next day, we have this unraveling of maybe what we won't put these tariffs on our allies. So, then you ask, well, who you're going to put them on? What's the point?
AMANPOUR: And it is this sort of rabbit hole and we're trying to figure out whether there's a coherent policy. But as I keep saying, you know, in this moment when Rex Tillerson has been fired for all his failings, the world and the allies are concerned about major issues of war and peace and nuclear proliferation and the like.
COOPER: Well, especially, I mean, it comes -- you know, as the U.S. is gearing up for this meeting with North Korea. So, if Kim Jong-un doesn't believe what President Trump is saying or South Korean allies don't, we're talking about the country's nuclear program, I mean, you know, those stakes could not be higher.
AMANPOUR: Well, precisely, I mean, you've got one episode which is that they just don't have all the officials to properly engage in this major negotiation, you know, they've got hundreds and hundreds of people should be engaged from the State Department, Treasury Department, Energy Department, to make this work. It's going to take a long time.
But more to the point, it's not only if Kim Jong-on doesn't believe it, it's what might the president say to Kim Jong-un, giveaway, suggests that could be on the table. And by the way, where is Kim Jong-un's answer as yet to this invitation to a meeting? COOPER: Yes.
AMANPOUR: So that all these unknowns -- and, by the way, what happens now that you have Mike Pompeo, more like-minded, who might be secretary of state after a confirmation process, who doesn't like the Iran deal, is much more close to Donald Trump and who's very hawkish on North Korea, you know, how do you navigate these very, very important and delicate and consequential international negotiations?
COOPER: Yes. Christiane Amanpour, thanks very much.
Coming up now, what do you want to call it executive time or spending hours in front of the television, by most accounts the president spends a lot of time watching and tweeting about TV and the people who are on it, some of whom including himself, make it all the way to the White House. A closer look, coming up next.
[20:31:45] COOPER: It's a presidency that was essentially born on reality T.V., and now the lines between reality and T.V. may be blurring even further. The President has chosen a cable news personality to be his top economic adviser. But Larry Kudlow certainly isn't the one - well, the only one running straight from T.V. to the White House.
Randi Kaye has more.
RANDI KAYE, CNN CORRESPONDENT (voice-over): Minutes after his hiring became public, Larry Kudlow shared what the President told him.
LARRY KUDLOW, INCOMING WHITE HOUSE ECONOMIC ADVISER: He said you're on the air. And he said I'm looking at a picture of you. And he said very handsome. So Trumpian.
KAYE (voice-over): In response to Kudlow's hiring, radio host David Rothkopf tweeting, "Only a President who views everything through the lens of TV could think Larry Kudlow was suitable to be national economic adviser, because he's not an economist in any sense of the word. He just plays one on television".
But Kudlow is not the only TV personality to see their profile rise in recent days. Former Fox anchor Heather Nauert left broadcasting not even a year ago to work as spokesperson for the State Department.
HEATHER NAUERT, SPOKESPERSON, STATE DEPARTMENT: Good afternoon everybody.
KAYE (voice-over): With Rex Tillerson's departure, Nauert was bumped up to fourth in line at the State Department, despite have being no prior experience in diplomatic affairs.
(on-camera): And another Fox personality could be joining the administration, Pete Hegseth is currently a Fox morning show host, but is reportedly being considered to run this crawling department of the Veterans Affairs that employs just under 400,000 people. Hegseth has no experience in either health care or management, but is an Iraq war veteran.
(voice-over): President Trump doesn't just hire media types, he consults them to. He's dined recently with Fox News personalities Jesse Watters and Geraldo Rivera. Reportedly, gossiping about politics and TV. Afterward, Watters tweeting a picture of the menu, signed by the President, "To Jesse, you are great!"
The President once called Fox News host Kimberly Guilfoyle to discuss pulling out at the Paris Climate Agreement.
KIMBERLY GUILFOYLE, FOX NEWS HOST: I spoke to him about it. And this is something very much so on his mind.
SEAN HANNITY, FOX NEWS HOST: Take a good long look in the mirror.
KAYE (voice-over): And it's widely known the President leans on host, Sean Hannity for advice. He not only consulted Hannity on the Iran nuclear, but Hannity had also reportedly advised the President to release a controversial GOP memo alleging corruption and anti-Trump bias by FBI officials investigating the Trump campaign. Hannity painted it to be a massive political scandal.
HANNITY: This makes water get a like stealing a snickers bar on the drug store.
KAYE (voice-over): Presidential advisors in the age of Trump.
Randi Kaye, CNN, New York.
COOPER: Well Dana Milbank is an opinion writer for the "Washington Post", wrote a piece with the headline, Larry Kudlow may have been more wrong about the economy than anyone alive.
Dana Milbank, joins us now.
So, first of all, before we get to Kudlow. I mean does it come as any surprise that this President wants to hire TV personalities in particular cable news ones, because given how much cable news he reportedly consumes?
DANA MILBANK, OPINION WRITER, WASHINGTON POST: No, it surprises me not at all. And it's not just the people on the news that he admires. Think about it, he -- when asked during the campaign where he got his foreign policy advice, he said the generals. The generals he's watching on television.
[20:35:00] We often wonder which direction we've been sent on by a Presidential tweet, and we find out he's watching one of the morning shows, and he's reacting to that in real time. So he gets validation from cable news, from news in general, and I think the idea of having some of these people like Kudlow in the White House, in the administrations means he can have that validation in real time. And he feels that these people will be able to go out there and sing his praises and everybody will believe it.
COOPER: I mean, obviously, there are people who appear on television who are qualified to do certain jobs. It does become a problem when for the President in fact that they're on television and it may outweigh any lack of credentials they may have. They may be able to communicate things well for the White House but not necessarily have a back ground in it.
MILBANK: Right. There certainly are a lot of experts on television, but that I -- evidence of this, not everybody is on television is an expert. And Larry Kudlow, as was mentioned earlier, he plays an economist very well on TV. He's not trained as an economist. And if you look at what he has done over the years, he's not just been wrong, but he's been wrong so consistently and so spectacularly, so much so, that if people had followed his advice, say, six weeks before the economic crash, when he says he sees the beginnings of a recovery, you would have lost everything. And that's one thing. That's on you if you're watching CNBC and you took Larry Kudlow's advice and you lost everything. It's rather different thing now that he's the top economic adviser to the President of the United States. We all go down if he's giving the wrong advice.
COOPER: So you're saying before the collapse he was basically saying nothing to see here? That things are looking like they're turning around?
MILBANK: It was spectacular. December 2007, he says there's not going to be any recession. He's buying in. It's going to be a Goldilocks, just-right economy. Even when it was clear, the economy was leaking, he -- was declining, he was talking about bubble heads talking about the housing bubble. And then literally in July, before the September crash, he said, you know, nothing to see here. That he's really beginning to see the signs of recovery in housing. It wasn't just, I mean, that's the most spectacular, because that was the most spectacular economic failure of our time, but if you look back at his record, 1993, 2001, 2002, 2009, the same thing. Basically if Larry Kudlow said, this is going to happen, you were -- you would have been very wise to place your money on the other, whether it government tax receipts, whether it was the stock market, whether it was -- where the economy is going.
The problem now is of course as he said the -- the Trump tax cut is actually going to increase government revenues and be a huge boon to the economy, which is the exact thing he said about government revenues about the Bush tax cut in 2001.
COOPER: It is interesting that the President would replace one economic adviser who disagreed with his trade agenda with another economic adviser like Kudlow who also disagrees with his trade agenda.
MILBANK: That's true, and had some disagreements with a secretary of state on a variety of subjects and brought in a secretary of state who may be more simpatico with the money (ph) logically. But is much tougher against Russia, which is a major thorn on the side of the President. He goes back and forth on this, just a week or so ago, he saying, he likes the idea of dissent in disagreeing opinions on the White House and sorting it out. Well, he didn't like it that much, because that's why Gary Cohn is gone.
So I think the President is conflicted on this. But he does like and certainly above all the appeal of celebrity.
COOPER: Yes, Dana Milbank, thanks very much. Appreciate it.
MILBANK: Thank you.
COOPER: Coming up, as we've reported on this program, new documents showing despite what Michael Cohen says, The Trump Organization did have a role in keeping Stormy Daniels quiet about her alleged affair with the President. I'll speak with Cohen's attorney, next and Jeff Toobin.
[20:42:41] COOPER: Well new information continues to come out, the President's alleged affair with an adult film actress and the attempts to silence her right before the election. Just a note, as we said this before, there's repeating, this is less about the morality of any alleged affair, for all adults who can make those judgments on your own. And more about following the money.
Our interests is whether the President or his company were involved in trying to keep someone quiet, where that money came from and if it violated any campaign finance rules.
As we reported last night, there now is more evidence of a connection between The Trump Organization and that effort. Documents show that a Trump Organization lawyer Jill Martin was involved just last month in a legal effort to silence Stormy Daniels on behalf of E.C., LLC which was formed by the President's personal lawyer Michael Cohen and which paid Ms. Daniels, $130,000 to initially keep her quiet, 11 days before the election.
Now earlier, Mr. Cohen said, that neither The Trump Organization or the campaign was involved in that transaction. In a statement, The Trump Organization says, it doesn't have "any involvement in the matter" except this one lawyer Jill Martin who it says was working "in her individual capacity facilitating the initial filing".
Joining me now, David Schwartz, Michael Cohen's friend and attorney in a separate legal matter. And CNN chief legal analyst Jeffrey Toobin.
Mr. Schwartz, thanks so much for being with us.
DAVID SCHWARTZ, MICHAEL COHEN'S ATTORNEY: Thank you.
COOPER: I want to ask you a couple of things. Would it be -- Michael Cohen says he did this all on his own. He entered into an agreement through the LLC that he set up. Apparently for Donald Trump under the name David Denison sign -- for a financial contract. Basically on behalf of a client. SCHWARTZ: Right.
COOPER: Wouldn't -- isn't is unethical though for Michael Cohen to enter into an agreement on behalf of a David Denison who is supposedly President Trump?
COOPER: Without actually informing President Trump?
SCHWARTZ: Well, let's get to the agreement itself. The agreement is between Stormy and E.C., LLC. And or --
COOPER: And David Denison.
SCHWARTZ: OK, so -- but, it says and/or though.
SCHWARTZ: So that's a key "or" right here. He was representing the LLC. So, it was perfectly legal for Michael Cohen to represent that LLC, and turns to the agreement. It was a valid agreement. And Donald Trump --
COOPER: But why have David Denison's name in there at all?
SCHWARTZ: Because it's the third party beneficiary rule which nobody's talking about. The third -- there could be a third party beneficiary to every single contract. And that's what happened here.
[20:45:04] So Michael Cohen was acting in the best interest of his client. And his client just happens to be a third party beneficiary. It's completely --
COOPER: But doesn't he have to then tell -- by the way, but doesn't he have to tell he's third -- that third party has beneficiary, that he's entering into an agreement --
SCHWARTZ: He doesn't --
COOPER: -- other persons name for that benefit?
SCHWARTZ: No he doesn't have to, because he's in-house counsel. So it's not like it's an outside law firm representing a client. He was general counsel to that organization. So he could enter --
COOPER: So you're saying his represent -- wait but there -- right, but you're saying he's general counsel for The Trump Organization, and -- so he's therefore representing Donald Trump.
SCHWARTZ: Well, he was representing E.C., LLC. The LLC was created to enter into this agreement. There was a quid pro quo. There was consideration on both sides, and now she's going to break that agreements, OK? But make --
COOPER: OK. And pardon me. I'm not a lawyer. So I'm not smart as you guys. But I just don't understand. If he's entering into this agreement for E -- for this LLC.
COOPER: Why then have David Denison on there at all. If David Denison is not involved in this LLC. And clearly he -- David Denison is involved in some way. So he's representing not only LLC, but also David Denison. And that's ethically a problem, isn't it?
SCHWARTZ: No, he's a third party beneficiary to this deal. So --
COOPER: So someone can make a contract for me, that uses my name without informing me? I mean can do that?
SCHWARTZ: Well, if there's a logical third party beneficiary here, clearly Michael Cohen was acting in the best interest of the third party beneficiary. And by the way --
COOPER: So my agent, my TV agent, who has an LLC can -- can for make a contract with my name on it and not tell me about it?
SCHWARTZ: No, no. And this is not a general rule. Every set of circumstances is different. And in this particular set of circumstances, there was nothing wrong. By the way, the only person that should be complaining about this is DD. It shouldn't be -- it's not -- if it's unethical, it would be DD unto that contract bringing that action.
By the way, these contracts --
COOPER: Well its unethical whether or not DD decides they wants come forward, it's still unethical.
SCHWARTZ: I know you have to understand --
COOPER: Anyway, let me bring in Jeff in a bit --
COOPER: -- Jeff, how do you see this?
JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Well, I mean, I think David is clearly right. There's something illegal that went on here. The question is, what was -- what did Donald Trump know, and whether this is a valid, legal agreement. Let's look at a different provision of this non-disclosure agreement. Section 8.6 which said, this agreement when signed by all parties is a valid and binding agreement enforceable in accordance with its terms. DD did not sign the agreement. This is the argument that Stormy Daniels' lawyer says that's why it's not legitimate under that provision.
SCHWARTZ: Jeffrey, it's an argument. But it's not a valid argument. It's a frivolous argument. Because DD is not a party to this it said and/or. That or is a key distinction here and therefore his not a part of this contract, it's a valid contract, as long as E.C., LLC signed that contract.
TOOBIN: You know --
SCHWARTZ: And by the way, these non-disclosure agreements are signed every single day. They're signed by CEOs, they're signed legislators, they're signed by doctors, lawyers, TV personalities sign these agreements. Every single day.
TOOBIN: No question, your right about that. No -- and, you know, I'm not here as Stormy Daniels' lawyer. What we have here obviously is a disagreement about the terms of a contract which happens all the time. And when you have a situation where there's a disagreement, you go to court. And what Stormy Daniels' lawyers want is to go to court. And he's going to go to court and he's going to take Michael Cohen's deposition, and he's going to take Donald Trump's deposition. And then we'll find out who's right. Now, if that's something that Michael Cohen thinks is a great idea, Godbless.
SCHWARTZ: Jeffrey, this case is going to get thrown out way before depositions. If they don't think it's a valid contract, then guess what, then just don't abide by it. If its so invalid. This is a valid contract. And I can guarantee you one thing, that Michael Cohen will not rest, all right, when this is all said and done, Michael Cohen will not rest until he recovers every penny, that's a million dollars per breach, plus punitive damages from Stormy.
TOOBIN: And David -- David, while we're on the subject, can we talk about the fact that Michael Cohen says he paid his own money on this contract? Have you ever heard of something like that happening in the history of American law? Because I haven't.
SCHWARTZ: OK, no. That is unusual. And I have not heard of that. But there's nothing wrong with that. There's nothing illegal about it.
COOPER: We got to get a quick break in. I want to continue this discussion. You can just stick around David Schwartz and Jeff Toobin. Up more on this one, when we come back.
[20:50:01] We'll be right back.
COOPER: We're continuing discussion about Stormy Daniels and Michael Cohen's involvement in paying her $130,000, an LLC he created in order to keep her quiet.
Joining me now are David Schwartz, Michael Cohen's friend, and attorney in a separate legal matter. And CNN chief legal analyst Jeffrey Toobin.
So Mr. Schwartz, just before the break Jeffrey Toobin was saying have you ever heard of another attorney paying $130,000 taking his loan, allegedly, out of his home equity line of credit in order to pay for somebody in order, for a friend? SCHWARTZ: Right, I've never heard of an outside attorney doing that. I've never heard of it but it doesn't make it -- it certainly not an illegal act. And that's should be something that's clear. It's not an illegal act to do such a thing, and there are no violations of federal election law here. We have the irrespective test that you apply, and, again, this happens every single day, so if you're doing it --
TOOBIN: What happens every single day?
SCHWARTZ: -- to protect someone's reputation -- what happens everybody single day?
TOOBIN: A lawyer spends $130,000 of their own money every day?
SCHWARTZ: No, these nondisclosure agreements are signed into. And why are they signed into? It's to avoid litigation and it's to avoid the embarrassment of the accusation, because many times for high- profile people, whether it's CEOs or anyone else, the accusation, alone, is devastating.
[20:55:04] COOPER: So let me ask you, Mr. Schwartz, Michael Cohen has said that he did this not as part of The Trump Organization, even though e-mails he used were from his Trump Organization e-mail account, which he then would -- in one case forwarded then to his personal account in order to send an e-mail to the then-attorney for Stormy Daniels. And then also just yesterday, Michael Avenanti, the attorney for Stormy Daniels, released an e-mail, basically a signed -- this thing about Jill Martin, who is another Trump attorney, Trump Organization attorney, getting involved in setting up this arbitration hearing in Los Angeles.
If Michael Cohen, why after Michael Cohen releases a statement saying, The Trump Organization had nothing to do with this, I did this solely, you know, in my -- you know, because I'm a friend of Donald Trump, would he reach out to a Trump Organization attorney in Los Angeles to get involved in the arbitration?
SCHWARTZ: Right. I mean, we have to make very clear the timeline here. So the timeline, as you said, was before the 2016 election when this whole contract was signed. The Jill Martin arbitration came way after. So this is -- this is a year, you know, more than a year later. So that it doesn't matter what --
COOPER: Was it smart to reach out to a Trump Organization attorney if you're saying it has nothing to do with Trump Organization, are there -- and there's plenty of lawyers in L.A.?
SCHWARTZ: You know what, so what, though. So they reached out to Jill Martin because they needed a local attorney. So they reached out to Jill Martin. You know, it's a -- and also the e-mails, Anderson, Michael Cohen used that e-mail address for every single thing he did. Now, a lot of people do that. A lot of people don't realize. On hindsight, you know, should you separate it, it is a better way to go? Absolutely. But to use the same e-mail, it's not evidence of anything. COOPER: OK. David Schwartz, I appreciate you being on. Jeff Toobin, as well. We'll hear from --
SCHWARTZ: Thank you.
COOPER: -- Michael Avenatti, Stormy Daniel's attorney in the next hour.
There's more breaking news ahead, Robert Mueller subpoenaed The Trump Organization for business documents as part of his Russia investigation. The question is, has the special counsel crossed the President's red line? More ahead.