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INSIDE POLITICS

Michael Cohen Recorded Trump Discussing Payment to Playboy Model. Aired 12-12:30p ET

Aired July 20, 2018 - 12:00   ET

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


[12:00:00]

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KATE BOLDUAN, CNN ANCHOR: -- for the presidential election. "The Times" also pointing out, Renato, that "The Wall Street Journal" revealed the existence of the payment before the election.

And at that time, Hope Hicks for the campaign said, we have no knowledge of any of this. So this -- a lot more breaking news coming with this. Renato, I really appreciate your time. We're going to have much more on this breaking news on "INSIDE POLITICS" with John King right now.

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UNIDENTIFIED MALE (voice-over): This is CNN breaking news.

JOHN KING, CNN HOST: Welcome to INSIDE POLITICS, I'm John King, a very big breaking news Friday. Just moments ago, "The New York Times" posting a blockbuster report.

Michael Cohen, the president's longtime personal attorney and fixer, secretly taped then candidate Donald Trump in September 2016, talking about a hush money payment to a Playboy model, who says she had an affair with the now President of the United States.

Sources say the FBI seized this tape in a raid on Michael Cohen's office earlier this year. Maggie Haberman of "The New York Times" joins me on the phone. She's part of the team that broke this story.

Maggie, it is a remarkable story. Give us the biggest elements here, the biggest questions now for the president.

MAGGIE HABERMAN, CNN POLITICAL ANALYST: Sure. The biggest -- and thanks for having me on, John.

The biggest question right now for the president is why the campaign gas said that they had no knowledge of this when they were asked about it late in the fall of 2016. The biggest thing we learned from this is that there is a brief recording of Michael Cohen, talking to Donald Trump -- Michael Cohen was, at that time, Donald Trump's personal lawyer; Donald Trump was not the president yet.

And they are discussing some details related to payments by AMI, which owns the "National Enquirer," to Karen McDougal, a woman who had alleged that she had had an affair, with then -- not candidate yet -- Donald Trump.

And this conversation had something to do with making an additional payment from Mr. Cohen to Karen McDougal. His lawyer, Rudy Giuliani, told us that he had, on the recording, apparently instructed that it be done by check, so that it was done properly, as opposed to cash.

That payment, we understand, was not made. But obviously this is going to raise all sorts of questions, again, about why it is that the campaign would claim they knew nothing about this when, clearly, Donald Trump knew very well about it before "The Wall Street Journal" made it public.

KING: An excellent point and that as we piece together what the president or then candidate/business man Donald Trump has said about this. We'll do all that throughout the hour.

But to your point there, I'm reading the Rudy Giuliani quote; in your article, he says, "In the big scheme of things, it's powerful, exculpatory evidence," Rudy Giuliani is both the lawyer but he's also -- helps the president spin these things.

How so?

How does he believe it's exculpatory, not incredibly damming?

HABERMAN: They're trying to argue that specifically it's, A, that the president learned about the AMI bill after the fact, that it was several weeks later, and that he wasn't trying to hide anything as it was done by check. A check could be subpoenaed, a check could be requisitioned, that it was not cash. So, therefore, he's afraid of this being learned of.

It's walking a bit of a fine line there, as you correctly know. We will see what else the president has to say about this as time goes on.

KING: Maggie Haberman of "The New York Times," breaking that news. Maggie, appreciate your time at this busy time.

With me here in studio to share the reporting and their insights, Julie Hirschfeld Davis, also with "The New York Times;" CNN's MJ Lee; Lisa Lerer with the Associated Press and CNN's Kaitlan Collins.

And for our audience members who might be unfamiliar with this or might be confused, because there is the separate of Michael Cohen's involvement in the Stormy Daniels payment. This is September to this.

Karen McDougal, a former Playboy model, she alleges she had a nearly year-long affair with Mr. Trump, not president at the time. This in 2006, shortly after Melania gave birth to Barron Trump. She sold her story to the "National Enquirer" and they never published it.

And the whole theory behind that is that the publisher of the "National Enquirer" is a friend of the president in the so-called catch and kill. They get the information exclusively then they don't publish it.

We were talking about this before the program, reading this headline.

"Michael Cohen secretly taped Trump discussing payment to Playboy model."

In any other universe, just reading that is incredibly damning to the President of the United States. But we have learned in this universe, sometimes up is down and east is west.

What do you make of this?

MJ LEE, CNN CORRESPONDENT: I think if we had reason to believe skeptical about Donald Trump's denials in the past, the White House's denials in the past about these various stories that the White House may have tried to kill, these affairs, that a number of women have said they had with Donald Trump some years ago, I think we now have reason to be 100 times more skeptical.

No matter what Donald Trump says now going forward, no matter what the White House spokespeople say now going forward about these stories, here we have the first example of a recording that was made, in which Michael Cohen and Donald Trump discussed explicitly the possibility of a payment to a woman who claims to have --

[12:05:00]

LEE: -- had an affair with Donald Trump. I think it's really worth emphasizing, though, in this "New York Times" story, it does say that payment was ultimately never made. That's attributed to Rudy Giuliani, Donald Trump's lawyer.

So the payment that was made, which this shouldn't be confused with, was the payment from AMI to Karen McDougal of $150,000. Now I'm unclear on the timing of whether that payment was first made and then this discussion happened.

Or if this discussion happened and then they decided not to make the payment, Donald Trump or Michael Cohen, to Karen McDougal and then the AMI payment.

KING: And Michael Cohen's new attorney, Lanny Cohen (sic), a veteran Washington damage control attorney, says he'll have no comment on this story.

But you make a key point. In both of these cases, the Stormy Daniels payment, which is not what the story's about, and this payment, this conversation, the payment, the first payment to Karen McDougal had been made.

This conversation between Michael Cohen and then Republican nominee for president, Donald Trump -- he's not president yet -- two months before the president's eventual election.

So the timing is immediately suspect as well. The president's long- time fixer, the man who makes problems go away, is talking on the phone to Donald Trump, somehow felt the need to secretly record the conversation with Donald Trump, about a potential -- payment never made -- potential hush money payment to a Playboy model who says she had an affair with the president.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: I'm starting to sense a pattern here of the White House denying all these things because for months they denied the Stormy Daniels thing, the president had any idea about it. And then Rudy Giuliani confirms that, oh, the president did know about it and he did make that payment.

And that is exactly what happened with Karen McDougal. In the past, they have denied that the president had an affair with this Playboy model. And now we're seeing this come out. And Rudy Giuliani, the president's lawyer, is on the record here, trying to say that it is a good thing, that the president was trying to pay the Playboy model, to silence her, for having an affair with him, through a check rather than sending cash so it could be properly documented.

That defense is -- I don't even know the word for it. But we have that there.

And then also the thing to keep in mind here is that we have reported in the past, Michael Cohen had a habit of recording his conversations with people to keep a record of them.

So we have this one 2-minute tape that they're downplaying because it's only 2 minutes of him and the president discussing this. But also the question is, how many other tapes are there?

And that is what people who even work in the White House have raised the question of, if there are women like Stormy Daniels and Karen McDougal, how many other women are there out there like that with similar stories?

KING: And as Michael Cohen gets asked questions about, in this case, apparently a non-payment, in the Stormy Daniels case, there was a payment and the president reimbursed him for that.

So there are going to be all sorts of questions about were campaign finance laws violated, was all this reported properly on everybody's taxes, if the money came from the Trump Organization, is it reported right in the business records?

So this is the big question about Michael Cohen's legal jeopardy and the spillover effect of the president.

Sorry I interrupted you.

LISA LERER, ASSOCIATED PRESS: Oh, and right. And the fact that he had a secret tape seems like a huge piece of this whole thing, as you were saying.

What else is he recording?

What other tapes are there? It seems pretty clear that the prosecutors are going to find these tapes and that could open up a whole other world of charges and investigates that we don't even know about with the president's voice recorded. That seems like very strong --

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KING: It's a great point because we know the materials were seized in a highly unusual raid. The prosecutors in the Southern District of New York, Robert Mueller had a clue about this case, said -- Rod Rosenstein, the deputy attorney general, said this is not your department; took the information that he had over to the Southern District of New York, gave it to other federal prosecutors.

They got a judge's warrant for a no-knock warrant on an attorney. That's a big deal. You have to present a high bar of evidence that you're worried that person is going to destroy evidence, hide evidence, cheat and lie to you.

A no-knock warrant on Michael Cohen's offices and the hotel where he was staying at the time because the department was under renovation, to seize these materials, they have been in the hands of a special master -- a former federal judge, if my memory is correct, or federal prosecutor -- who has decided what is privileged and what is not. And then going back through this and, in the process of that, this was turned over.

Rudy Giuliani knows about this because, as they found it, they turned it over to the president's attorneys.

What else?

JULIE HIRSCHFELD DAVIS, "THE NEW YORK TIMES": This is the question, is how many other recordings are there and how many other records are there, whether they're recordings or other kinds of records, emails, transcripts, whatever, what have you, that not only shed additional light on this case but might shed additional light on the Stormy Daniels case and other women and possible business deals that might be an issue for the president.

It is striking, as you said earlier, that we're not talking at all about the fact that there is a recording of the President of the United States discussing with his personal lawyer payments that are being made to a Playboy model to silence her about an affair that he had.

That is like baked in the cake at this point. And politically, that obviously is not where the White House is focusing. Where they do have to be focused is, what happens in the months intervening between when this payment is talked about and not made, evidently, and what -- and the payment that actually is made.

David Pecker, as we know, is close to Donald Trump.

What were the conversations around that?

Was there some sort of quid pro quo?

Might there have been a campaign finance violation in that?

And are there other cases that --

[12:10:00]

DAVIS: -- Michael Cohen may be in possession of evidence.

KING: Right, was this a conversation -- and, again, some of this is speculative -- but was this a conversation where the then candidate, Republican nominee, Donald Trump, discusses this with Michael Cohen.

And he says, according to Rudy Giuliani -- we don't have the recording. Rudy Giuliani can say whatever he wants right now because the recording is not in the public domain.

But he says candidate Trump said, if you're going to make this payment, do it by check, not cash, which I guess make it less dirty?

Less whatever?

Well have the -- but then did the -- did the AMI payment, did they find another route?

Did they find another route to have it done through the "National Enquirer," which then killed the story?

Everyone wants to jump in. I just want to say this. MJ made a great point at the beginning and I want to amplify it, that this calls into question everything that has been said on these issues about when he knew about it, did these relationships happen, not only from the President of the United States but all of those who speak for the president?

Here's the president when Michael Cohen first fell into legal jeopardy, here's the president talking on FOX News.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How much of your legal work was handled by Michael Cohen?

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Well, as a percentage of my overall legal work, a tiny, tiny little fraction. But Michael would represent me and represent me on some things. He represents me like with this crazy Stormy Daniels deal.

He represented me and, you know, from what I see, he did absolutely nothing wrong. There were no campaign funds going into --

UNIDENTIFIED FEMALE: Then why is he pleading the Fifth?

TRUMP: -- problem -- because he's got other things, he's got businesses. And from what I understand, they're looking at his businesses. And I hope he's in great shape. But he's got businesses and his lawyers probably told him to do that.

But I'm not involved and I'm not -- and I've been told I'm not involved.

(END VIDEO CLIP)

LEE: I've been told.

(LAUGHTER)

LEE: Can I just point out just one very ironic thing right now?

You know, we have been talking so much over the last couple of weeks about the question of whether Michael Cohen is going to flip or not against the president. It turns out that, the reality is that he doesn't need to flip. The damage is probably already done, because the FBI have taken so many things that belong to Michael Cohen, including these recordings, the fact that Michael Cohen had this weird, voyeuristic habit of secretly recording phone conversations, including, apparently, with his former boss, means they have their hands on so many things that they may not ultimately even need to say, we're going to start to deal with you.

If you give us X, Y and Z information, then we can lessen your charges. And this is just as an example since he has not been charged yet. I'm just saying that that may not ever come to fruition because of how much information investigators already have.

KING: And to that point, my question is, is it a voyeuristic habit on Michael Cohen's part or is it proof that he knows he can't trust certain people, including potentially his boss, Donald Trump. So you want -- you want the recording because you're not sure, if this comes out and if this becomes a problem, that the guy on the other end of the phone -- in this case, the Republican nominee at the time, now the President of the United States -- is going to come anywhere close to the truth when he's forced to talk about it.

COLLINS: Well, and the point of this is, the prosecutors are looking into whether Michael Cohen sought to tamp down these embarrassing stories and whether that violated campaign finance laws, if the president was aware of that, all of that.

This quote from Rudy Giuliani makes it sound like the president gave the go-ahead to make this payment. He's saying how to make the payment, he's not saying don't make it, don't do this. He's saying how to make the payment.

So we don't know why the payment wasn't made. But what we do know, from what Rudy Giuliani, the president' lawyer, is saying, is that the president essentially gave the go-ahead for this payment to be made.

That is essentially what the prosecutors have been looking at while they're investigating Michael Cohen, the president's involvement in all of this. And if he's giving the go-ahead to Michael Cohen to make this payment to a woman, to silence her ahead of the election, that is where it's going to be the point of interest for these prosecutors. KING: Got to work in a quick break but we have our political team and our legal team working on this as well.

Again, the big breaking news from "The New York Times," Michael Cohen, the president's long-time personal attorney and fixer, no longer works for the president but "The New York Times" reporting on a secret recording of him having a conversation with the then Republican nominee, now President of the United States, about making a cash payment to a Playboy model, who says she had an affair with business man Donald Trump. We'll be right back.

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KING: Welcome back, back to the big breaking news today.

A secret tape recording of a conversation between then candidate, Republican nominee, Donald Trump, now President Trump, and his long- time personal attorney. "The New York Times" says former presidential fixer, Michael Cohen, secretly recorded, again, the candidate, Donald Trump, two months before the presidential election.

The two men discussing the possibility of a payment to a Playboy model; that model, Karen McDougal, says she had a 9-month affair with the now President of the United States. That affair allegedly back in 2006.

Our legal analyst and former prosecutor, Paul Callan, joins us on the phone.

Paul, just give me your sense, your legal perspective, as you read the details of this story.

What does it mean to you?

PAUL CALLAN, CNN LEGAL ANALYST: Well, my take on it is that this could be Donald Trump's John Dean moment. And I say that, because this is kind of reminiscent of Nixon, when he was dealing with his own counsel, John Dean, who had cooperated with the prosecutors.

And the Nixon strategy at that time was to accuse Dean of lying. And then, suddenly, another aide, Alexander Butterfield, in a surprise testimony before Congress, revealed the existence of the Nixon tapes, meaning that everything Dean said could be corroborated on a tape and Nixon's downfall followed.

Now this is the personal attorney to the President of the United States, who apparently is secretly taping the president. And when the president, of course, was running for office. So depending upon what is in these tapes, this could really be exceptionally damaging and make a great threat, I think, to the Donald Trump presidency. Of course, we know that Cohen has always had this reputation as Donald

Trump's fixer. And he makes no bones about the fact that he had authority to go and pay off women and who knows what other things that Donald Trump --

[12:20:00]

CALLAN: -- didn't want other people to handle. And if all of this is on tape, being authorized by the president, I think it's going to cause extraordinary damage to the presidency and to Donald Trump.

KING: This is asking you to be somewhat speculative, Paul, but you know how these processes work. They seize all these records, all these files, including these recordings from Michael Cohen's office.

A special master decides what is privileged, what is between an attorney and his or her client that does not automatically go over to prosecutors. The special master then has made a ruling on this, a limited number of this, she has said, is privileged material.

Does, in your view, a recording between candidate Trump and Michael Cohen about a hush money payment, to a woman who alleges she had an affair with him, would that be privileged material, in your view?

Would it just be in the hands of Michael Cohen's legal team and the president's legal team?

Michael Cohen's legal team apparently shared it. They get this material, they shared it with the president's legal team.

Or is this -- is there some exception that would make this also material that would be handed over to the prosecutors?

CALLAN: Well, we need more details, John, but it sounds, on the surface, like you could make a claim that this was attorney-client privileged material.

However, there is an exception to the attorney-client privilege, if you are discussing something of a criminal nature. It's called the crime fraud exception to the attorney-client privilege.

And if in the entire context of this discussion, there is -- it is perceived as a planned illegal payment, then there's no privilege. Now one possibility, of course, would be if the payoff is being planned in order to protect Donald Trump's reputation in the election.

And part of the plan, of course, is not to report it to the Federal Election Commission because, obviously, that would be revealing the secret, that the payoff is designed to hide. That could be a crime.

And if you make the argument that this could have been a discussion in pursuance of that crime, no attorney-client privilege and it would be revealed.

But as you said earlier, we don't have all the details and we would have to see what was said in the conversation to make a firm determination on that.

KING: You're absolutely correct and thank you for that, that the full file, if you will, conversations that preceded conversations that followed, any other documentation are critical to having the full contextual understanding of this.

I want to ask you one more, though, about -- from your legal perspective, Rudy Giuliani, the former New York City mayor, he's the president's lead attorney now. Most of what he says on television is more a political argument than a legal argument, more spin, frankly, and often way a far fleet, if you will, from the facts.

But when he says this, he says that the recording was less than 2 minutes and, in his view, demonstrates the president did nothing wrong, he says that no payment was made and he says, quote, "nothing in that conversation suggests that he had any knowledge of it in advance," meaning plans to make a payment, and said, "Mr. Trump directed Mr. Cohen that, if he were to make a payment related to the woman, write a check rather than sending cash, so it would be properly documented."

Rudy Giuliani saying that shows the president, this -- the president's being responsible here and this is exculpatory.

You buy that?

CALLAN: Well, I see Giuliani's argument. Giuliani is saying essentially that it is not a crime -- of course, Giuliani wouldn't call it hush money. He would say that negotiating a confidentiality agreement with someone who has threatening a lawsuit against you or threaten to embarrass you publicly, is not illegal. And that's correct unless the purpose of the payment is really political in nature and is not reported subsequently.

Then you could have a crime. So that's why I say, we need more to look at this.

But the second thing that I'd worry about if I were now counsel to the president, is whether Giuliani, by publicly discussing this conversation as the agent of the president now, has waived the attorney-client privilege and may, in fact, by that published statement, make it very, very easy now for prosecutors to say, this is an admissible item of evidence and because the attorney-client privilege has been waived.

KING: Interesting perspective, Paul Callan, appreciate your time on this day.

Let's quickly just go around the table (INAUDIBLE) we know how, when the White House enters into damage control mode, now they have Giuliani, who's their legal front person, what is the president going to make about this?

DAVIS: Well, Paul makes a very interesting point by the way about whether or not what Giuliani has now said opens the door to use of this tape in a way that maybe it wouldn't otherwise be able to be used.

But I think the big issue here, as my colleagues mentioned, is a credibility issue and to the degree -- and they were trying to paint this as a situation of Michael Cohen might have done what Michael Cohen did but he wasn't directed to by the president and really they tried to distance President Trump --

[12:25:00]

DAVIS: -- from this as much as they could, this really gives a lie to that whole explanation and opens up a whole other area or many other areas of speculation. I think, if past is any guide, the president is going to be very angry about this. He's going to be frustrated about it. He's going to lash out. I think we'll probably see some tweets. He's got a down weekend at Bedminster, his golf resort.

And I think that we're a -- like after a very tough week for him, foreign policy wise, this is the last thing that he needs and I think we're going to hear a lot of lashing out from him.

LERER: And pulling back the lens a little bit, to something that you and I both love, elections, we are in mid-July, which means we are creeping ever closer to those midterms.

And while both Republicans and Democrats will say, these kinds of headlines, the Trump factor's baked into the race, what these headlines do is provide a constant shot of adrenaline into these mobilized Democrats, who read this kind of thing and said I'm -- and say, not only am I getting out there to vote against the Republican congressman, I'm volunteering, I'm giving money.

So these are great headlines for Democrats. And the fact that there's a tape, means that, likely, there's probably more tapes, which means likely there's probably more headlines to come. All as this clock keeps ticking down to Election Day.

COLLINS: And remember what a crazy day it was in April, when the president was in the Cabinet Room for that meeting with his military leaders on Syria. And they brought in the camera and the reporters. And unprompted, in the first 60 seconds, the president went off about the FBI raiding Michael Cohen's office, hotel and home, saying it was a disgrace, a whole new level of unfairness, and going off about the special counsel's Russia investigation.

It was a stunning moment. And aides said they had never seen the president that angry in the entire time that they had been working with him in the White House, even through all of the Paul Manafort and Michael Cohen stuff.

And the president was the most furious when they raided Michael Cohen's office and hotel and house. And now we can see why it was that the president was so angry about that.

KING: Rudy Giuliani has used that as the threshold in his view to tell the president, do not sit down with Robert Mueller. These guys use hardball tactics.

LEE: And remember that these recordings now potentially mean that Donald Trump and the aides around him no longer can sort of get off on semantics, right?

They can't explain away these things, did or didn't happen, and create explanations when there are literally recordings of these conversations taking place, because, remember, that's exactly what happened with the Stormy Daniels payment.

Donald Trump, again, was asked very directly, did you know about the payments. And he said no.

The later explanation that came from Rudy Giuliani, that came from the White House was, well, he didn't know at the time but he eventually found out. All of these recordings, if they are to be released and reported on, make that kind of acute argument and the semantics argument really, really more difficult.

KING: A deepening credibility crisis that was there to begin with. But this makes it even deeper, Stormy Daniels, Karen McDougal, continue to follow the news on this one.

Up next for us, we shift gears. Julie noted it. This is a personal story, back to the policy (INAUDIBLE) one controversial summit with the president, Russian president, not enough for President Trump. He already wants Vladimir Putin to come to Washington for a second one.