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Mueller Starts Big Court Case Against Trump's Ex-Campaign Chief; Manafort Trial Underway: First Big Court Test For Mueller; Washington Post: North Korea May Be Building New Missiles; NYT: Trump Admin Considers Bypassing Congress For Tax Cuts. Aired 11-11:30a ET

Aired July 31, 2018 - 11:00   ET

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


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[11:00:21]

KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. Happening right now, trial day one for President Trump's former campaign chairman, Paul Manafort, the man now facing a slew of charges for bank and tax fraud. But this is more than just a trial about one man's alleged financial crimes.

It's a test on a couple of fronts. It's the first big test for Special Counsel Robert Mueller's investigation into Russian interference in the 2016 election, the first time his team is going to trial.

It's also a test for President Trump. A test of his, well, restraint, can he keep himself out of the courtroom? No one knows exactly what the Mueller team will be presenting on Paul Manafort. We do know one thing. The president himself has been trying for months to distance himself from his former campaign chief.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: I feel badly about a lot of it because I think a lot of it is very unfair. I mean, I look at some of them where they go back 12 years. Manafort has nothing to do with our campaign. I feel so -- I tell you, I feel badly about it.

They went back 12 years to get things that he did 12 years ago. Paul Manafort worked for me for a very short period of time. He worked for Ronald Reagan, Bob Dole, John McCain or his firm did, he worked for many other Republicans. He worked for me for 49 days or something, a very short period of time.

(END VIDEO CLIP)

BOLDUAN: But still, he was the campaign chairman. More recently, his closest aides, the president's closest aides and attorneys are clearly trying to do the same, which is create as much distance as possible.

(BEGIN VIDEO CLIP) KELLYANNE CONWAY, COUNSELOR TO THE PRESIDENT: This trial obviously centers on matters that have nothing to do with the campaign. I think that even Mr. Manafort as I read it had requested that there be no mention of his brief tenure at the Trump campaign several years ago. This has nothing to do with collusion, Russia, nothing to do with the Trump campaign.

RUDY GIULIANI, PRESIDENT TRUMP'S ATTORNEY: Paul Manafort does not know anything, nor could it be possible that he did. He was with him for four months.

(END VIDEO CLIP)

BOLDUAN: This morning, no comment from the president on Paul Manafort. He has definitely got the Russia investigation on his brain. Well, with a tweet, "Collusion is not a crime, but that doesn't matter because there was no collusion."

Let's not get ahead of ourselves. The president's campaign chairman is in court right now. CNN senior Washington correspondent, Joe Johns, is outside the courthouse in Alexander, Virginia with that. So, Joe, what's happening inside?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, Kate, you were talking about tests up at the top. I can tell you there's one other test right now for the courts, and that is to find a fair and impartial jury. Sixty five perspective jurors were ushered into the court on the ninth floor of this courthouse in Alexandria, Virginia.

Judge T.S. Ellis first describing the charges against Paul Manafort to them, including bank fraud, conspiracy and failure to report offshore bank accounts. Of course, that's where they're going to fight this case out over the next two or three weeks.

After doing that, he began what is obligatory and traditional for any judge, and that is to question the jurors about whether they know any of the attorneys in the case, introducing all the attorneys and the defendant, Paul Manafort, to them.

Then essentially trying to get at a question of whether any associations these jurors might have would affect their ability to reach a fair and impartial verdict in this case. Of course, no one responded affirmatively.

They have moved on to private and personal questioning. The main goal, of course, to get a jury and handle this case, this most important case for the special counsel and the Russia investigation, Paul Manafort, the former campaign chairman. Kate, back to you.

BOLDUAN: Joe, real quick, just lay out the --

JOHNS: He was the campaign manager.

BOLDUAN: You can call him whatever you want at this point. Joe, lay out the stakes for Paul Manafort if convicted on these charges. He could spend the rest of his life in prison? JOHNS: Absolutely. Enormous stakes for him, as you said. CNN counted up all of the charges. If he had to serve them end to end, it would be something like 305 years. Of course, a big question in any of these cases, whether such a sentence would be served consecutively or concurrently. That's a matter for the courts.

For Paul Manafort, certainly very important for him, because this was a very, very successful political consultant. It's come to this. Even after this trial, he has to go to Washington, D.C. perhaps to face another one.

[11:05:04] BOLDUAN: Yes, part one of two. Let's see what happens. Start today and see what comes out of it. Thanks, Joe. Really appreciate it. Great to see you.

So, how does this all with what's happening in the courtroom all fit into the grand scheme of things when it comes to the Russia investigation. CNN politics reporter and editor-at-large, Chris Cilizza is here with a look at that.

So, Chris, the word Russia may never be uttered in this courtroom, in this trial. So, what does it mean for the president's continued attempt to label it all a witch hunt?

CHRIS CILIZZA, CNN POLITICS REPORTER AND EDITOR-AT-LARGE: Well, so I think you have, Kate, what does it mean for Mueller? What does it mean for Trump? So, for Trump, it won't have all that much affect because he will continue, I think, to do what he has done, which is say, no collusion, Manafort worked for me for a brief period of time, I don't know the guy, and this has nothing to do with me.

So, it's unclear whether all the facts of the case will bear it out. This is a product of the Mueller investigation, but it's not dealing directly with Russia. The question there is, does Donald Trump change tact? My usual answer on anything as relates to does he change is no.

Mueller, again this is not the centerpiece -- this is not why the FBI began a counterintelligence operation way back in July 2016 to look into Russia and their meddling in the election. This is a side note.

But it is, Kate, important because it's the first test of sort of what do they have. Yes, we have seen people plead guilty. Five people, including several, Mike Flynn, Rick Gates, who worked for Paul Manafort who are cooperating now with Mueller.

We haven't seen a public trial yet. This is the leading edge of what we expect to be a report sometime maybe in the fall on the broader dealings with Russia in the election. So, I think it probably matters a little bit more for Mueller, just because I don't think -- the people for Trump and Trump himself aren't going to change their opinion based on this case.

BOLDUAN: But no question that everyone in Donald Trump's sphere, no matter if this has nothing to do with his activities during the campaign, have to be watching this very closely. CILIZZA: Gosh, yes. Absolutely. Just because he won't change his rhetoric doesn't mean they're not watching it extremely closely. Despite Kellyanne Conway, Rudy Giuliani and Donald Trump all saying, worked for me for a very short period of time, first of all, four months in the heat of a campaign is not a terrible short amount of time, particularly given when Manafort was brought in. He was brought in to secure the nomination for Donald Trump and then begin the planning of the convention.

BOLDUAN: Key part of any race, I would say for the White House. Great to see you, Chris. Great to see you. Thank you so much.

All right. Joining me now to discuss what's going on in the courtroom and what it means, CNN legal analyst, former federal prosecutor, Jennifer Rodgers and former federal prosecutor, Glenn Kirschner. Appreciate you, guys, coming in. So, Jennifer, what are you looking for at this trial gets underway.

JENNIFER RODGERS, CNN LEGAL ANALYST: So, the most important thing to me is going to be the performance of Rick Gates. So, he's the government's cooperator. He committed almost all of these crimes with Manafort. So, he will be testifying about what they did and what makes Manafort guilty on the charges.

But I'm actually keeping my eye out for something else as well, which is when a cooperator testifies, the defense can cross examine him about any impeachment materials. So, other crimes that he's committed and other bad acts that he has done if it goes to honesty, even if they have nothing to do with the charged crimes.

So, we may actually get a chance to see some of what the Mueller team knows and what Rick Gates can testify about what he did during the campaign that may be improper, dishonest, illegal, et cetera, including potentially Russia collusion.

Remember, Rick Gates was part of the campaign for much longer than Manafort was, through the election, even up to the inauguration. So, we may get a glimpse into some of what Rick Gates has told the Mueller team more than what comes out as far as the charges go in this trial. So, I'm keeping an eye on that for sure.

BOLDUAN: That's fascinating. Glen, this -- it's all just starting today. Could Manafort, as it is starting, but -- is there time for him to cut a deal with Bob Mueller? How does this work?

GLENN KIRSCHNER, WORKED WITH ROBERT MUELLER AT U.S. ATTORNEY'S OFFICE: You know, Kate, I think there's still time for him to plead guilty. I was a federal prosecutor for 30 years. I had defendants plead guilty the day before trial, the day of trial after opening statements and even midway through the trial when the defendant saw there was a mountain of evidence. It was insurmountable.

It's a different question whether he can still cut a deal with Robert Mueller. I actually think if Robert Mueller really wanted or needed Manafort's testimony to continue to build his case, I think we would have seen a deal cut some time ago. So, can he still plead guilty? Yes. Is Mueller likely to extend him a mid-trial plea offer? Almost certainly the answer to that question is no.

BOLDUAN: You also have an interesting take on why even Manafort might not want to cut a deal because he is afraid of Russia. What do you mean, Glenn?

[11:10:06] KIRSCHNER: So, listen, we have all seen what has happened over the U.K. with some sort of former Russian operatives who turned evidence against Russia and then tried to flee the country. We have seen them poisoned. It was not the first instance.

So, it may very well be that Manafort is concerned that if he were to cooperate, perhaps he would anger Russia and perhaps they would try to reach out and touch, so to speak, him or some of his family members.

Witness fear and intimidation is a powerful motivator. In my experience, it is one of the things that will keep a potential cooperating witness from coming on board and turning state's evidence.

BOLDUAN: That's interesting. Jennifer, Chris Christie today said that the case is remarkably important for the credibility of Bob Mueller. Do you see this as a big test for Bob Mueller?

RODGERS: I think it is a test for Bob Mueller. You know, you have to remember, there are 12 jurors here, regular, everyday people. It only takes one of them to hang this case. You never know what happens in a trial and in the jury room. So, I wouldn't say it's a terrible thing for Mueller if he doesn't get his conviction here.

They can always try it again if it's a hung jury. It's a big test for Mueller, but you always do have to remember, there's a bit of a crap shoot with who the jury is. We have to suspend judgement and see how it goes.

Keep in mind that all of this is happening in the public eye. So, if the evidence is overwhelming, then that's going to show that the Mueller team has done a good job and they brought a powerful case. So, it's not 100 percent about what happens when the verdict comes back.

BOLDUAN: I mean, I asked this of Chris Cilizza kind of on the political front. From the legal side, this trial isn't about any Russia collusion on its face, right? But Rudy Giuliani very clearly wanted to make the case yesterday that he does not think Paul Manafort has anything on President Trump. What does this mean though for President Trump?

KIRSCHNER: So, I agree with you, Kate, that on four corners of this case, the evidence that we expect to see, it doesn't really implicate Russian collusion. But I really think we need to keep in mind that when we investigate these large-scale races, for instance, racketeer influence and corruption organization cases, it is entirely usual for prosecutors to return a series of indictments.

So, I have to tell you, I know we have seen two indictments of Paul Manafort, one in the eastern district of Virginia, one in the district of Columbia. I think Paul Manafort may be that rare defendant who will find himself on the receiving end of a hat trick of indictments because I don't believe Bob Mueller and his team are done with Paul Manafort.

BOLDUAN: All right. Well, that means stand by to stand by, I guess. Great to see you, Glenn. Thank you so much, Jennifer. It's great to see you. I really appreciate it. Keep an eye on what's going on in the courtroom. When they come out, we'll bring it to you.

Coming up for us, President Trump says North Korea is no longer a nuclear threat. So, why then is Kim Jong-un reportedly working on new missiles? Step forward, step back, step to the side. Where are we now? Details ahead.

Plus, the White House is looking at a new tax cut for, well, some of the country's wealthiest Americans. They don't think they need Congress to do this. Aren't they called the legislative branch for a reason? Stay with us.

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[11:17:50]

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: Discussions are ongoing and they're going very, very well. We have no rush for speed. We have no time limit. We have no speed limit. We're just going through the process, but the relationships are very good.

(END VIDEO CLIP)

BOLDUAN: That was President Trump just two weeks ago saying there's no rush when it comes to getting North Korea to denuclearize. Today "The Washington Post" reports that there are new signs that North Korea may be essentially doing opposite.

Officials familiar with the intelligence telling "The Post" that new satellite images and other indicators show that they could actually be working on building new liquid-fueled missiles.

All of this happening outside Pyongyang at this facility which produced the first North Korea ballistic missiles capable of reaching the United States. So, what now? Joining me now is Bruce Clinger, former CIA deputy division chief for Korea and senior research fellow at the Heritage Foundation. Bruce, it's great to see you. If confirmed, what does this reporting tell you about the North Koreans weapons program now?

BRUCE KLINGNER, SENIOR RESEARCH FELLOW, NORTHEAST ASIA, HERITAGE FOUNDATION: It shows that all of the programs are continuing and perhaps even expanding. The last several weeks, we have had intelligence leaks or non-government satellite imagery analysis indicating that North Korea's continuing production of the ICB's that can target all of the United States as well as expanding production facilities for (inaudible) material for nuclear weapons, missile launchers and reentry vehicles. So, the programs are continuing. There's no reduction in the arsenal. There's no reduction in the production capabilities.

BOLDUAN: Is that flatly a breach in violation of the handshake agreement between Trump and Kim Jong-un from Singapore?

KLINGNER: It may not, per se, be a violation of the Singapore communique, because there was no deal reached. There's very few details, but it certainly goes against the spirit of the Singapore summit. It doesn't seem consistent with a government that's about to abandon all of these programs.

Most importantly, it's a continuing violation of numerous U.N. resolutions, which not only preclude nuclear missile tests, but require North Korea to abandon its nuclear and missile programs.

[11:20:07] BOLDUAN: How does the U.S. get a good assessment? That's always a continued question, a continued problem. With no inspectors on the ground, can the U.S. verify, can the U.S. really trust what North Korea is saying?

KLINGNER: Well, if we have an agreement, we have to have verification. The same kind of provisions we had for verification of the START treaty, INF treaty, and CFE treaty with the Soviet Union and Warsaw Pact. So, if we don't have verification, then we don't have an agreement.

But right now, since we don't really have much of an agreement, is perhaps not a violation of the Singapore summit, but we can't verify anything. So, what North Korea needs to do to convince us that it is willing to denuclearize is first provide a full and complete data declaration identifying all of its facilities, the size of its nuclear and missile arsenal.

Then we would have to move on to inspections of declared facilities, and then eventually challenge inspections of non-declared facilities.

BOLDUAN: Bruce, President Trump last week, he was still really -- remained very optimistic about it all saying that discussions are going very, very well in his words and also when he said, there's no rush for speed, there's no speed limit, there's no time limit. At what point do you think the administration needs to set some benchmarks, set some time lines, set some of the things you're talking about right now?

KLINGNER: Right. Well, Secretary of State Pompeo is in Pyongyang a few weeks ago and afterwards said that they made progress. But North Korea very quickly and very emphatically denied any progress and very strongly criticized Pompeo basically categorically denying that they would do any of the things the U.S. wants them to do.

So, right now, the administration has abandoned its maximum pressure policy in favor of what Pompeo called patient diplomacy. The president has said there are 300 North Korean entities that we're not sanctioning.

That's equal to the same number that the Obama and Trump administrations have cumulatively sanctioned in nine and a half years. Also, the administration by falling off of its timelines basically its seems like it's adopted the Obama administration's policy of strategic patience.

BOLDUAN: Two steps forward, I don't know how many steps back. It's hard to know. Great to see you, Bruce. I really appreciate it.

KLINGNER: Thank you.

BOLDUAN: Coming up for us, another tax cut. This time, who needs Congress to do it? Can they really do that? Well, the Trump administration seems to think so. Details on that next.

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[11:27:26]

BOLDUAN: Tax cuts, Republicans in Congress have long pushed for them and passed a big tax reform package earlier this year. What was all that fighting over? Now the White House is considering another tax cut while cutting out the middleman. We mean the entire legislative branch.

The "New York Times" reports that the Trump administration is mulling a $100 billion tax cut on capital gains, something that would mainly impact wealthy Americans. CNN's Alison Kosik is joining me now. Alison, what is the plan here and why or the administration think they can put in place? How to place a tax cut without through Congress?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: OK, Kate, so at the heart of this are capital gains taxes. Those are the taxes that you pay when you cash out of an investment. You have to pay a capital gains tax. So, if this plan actually happens, it essential means that the super wealthy would pay less in taxes.

So, the Trump administration if this plan goes through, according to "The New York Times," is looking to essentially change the way capital gains taxes are calculated. Their idea is to actually index capital gains taxes to inflation. So, the best way to illustrate this is with an illustration.

Let's go to the chalk board because this is a good one from "The New York Times" showing if a high earner spent $100,000 on stock in 1980 and you sold it for a million dollars today, that person would owe capital gains taxes on $900,000.

But if the original purchase was indexed to inflation, the original investment would be about $300,000. That would reduce the gain to $700,000. Essentially saving investor tens of thousands of dollars in taxes. Who does this benefit?

It benefits the super rich. One study found that 97 percent of the benefits of this plan would go to the top 10 percent of Americans. Two-thirds of the benefits would go to the top one-tenth of Americans alone.

So, big question, can the Trump administration do this? That really is up to question. I mean, because what the Trump administration is essentially looking to do is bypass Congress all together and use regulatory powers.

Kate, we know that George W. Bush, when he was in office, had looked into this. It was discovered that there wasn't really any legal standing for it. So, if the Trump administration does try to get this through, you can bet there will be a lot of legal challenges -- Kate.

BOLDUAN: Let's just stand by and see. Everyone loves a legal challenge.

All right. Let's discuss this. Alison, thank you so much.

With me now, Molly Ball, CNN political analyst, national political correspondent for "Time," and Phil Mattingly, CNN's congressional correspondent. Who knew it was so easy to get tax cuts through? Forget the benefits or non-benefits of a cap gains tax cut. Going around Congress, it was so easy. What was all the fighting about? How is this going to go over the hill, Phil?