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INSIDE POLITICS

Trump Adopts Giuliani Defense; Manafort Faces Charges in Virginia; Mueller Faces First Test; Trump Steps Up Rallies; Kelly to Stay on Through 2020. Aired 12-12:30p ET

Aired July 31, 2018 - 12:00   ET

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

(COMMERCIAL BREAK)

[12:00:20] DANA BASH, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm Dana Bash. John King is off.

Jury selection is underway right now in the trial of former Trump campaign chairman Paul Manafort, the first trial for Special Counsel Robert Mueller and his team.

Plus, on the road again. The president travels to Florida to campaign for a Republican candidate, and he's telling aides to add more to the calendar.

And while the president adopts Rudy Giuliani's take on collusion, one of his other attorneys plays it safe when talking about the Russia probe and how it's going to end.

(BEGIN VIDEO CLIP)

JAY SEKULOW, PRESIDENT TRUMP'S ATTORNEY: It's been a year, and we're ready to move on. And we'll see what happens. I'm not going to predict the next move because this is Washington, D.C., you never say never to anything.

(END VIDEO CLIP)

BASH: And we begin with the first real test of Special Counsel Robert Mueller's investigation. Former Trump campaign chairman Paul Manafort's trial began this morning in Alexandria, Virginia. It's the first of two trials for Manafort. This one centers on Manafort's work as a political consultant in Ukraine and allegations that he hid millions of dollars of income from the IRS. Now, despite his short tenure in Trump's inner circle and the specter of the Mueller investigation hanging over the Trump administration, aides insist it's not a hot topic over at the White House.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, COUNSELOR TO THE PRESIDENT: We've not discussed that in quite a while. And I would note for your audience, Bill, that the judge has very strictly instructed no mention of Paul Manafort's role in the Trump campaign, don't mention Trump, don't mention Russia, don't mention collusion. This trial, obviously, centers on matters that have nothing to do with the campaign.

(END VIDEO CLIP)

BASH: Now, Russia collusion may not come up at the trial, but that's not stopping the president's team and the president himself from continuing often unsolicited to protest their innocence. Just this morning, President Trump echoed a new take his lawyer Rudy Giuliani debuted right here on CNN yesterday. The president tweeted this, collusion is not a crime, but that doesn't matter because there was no collusion.

CNN's Shimon Prokupecz joins me live now.

And, Shimon, let's talk about the Manafort hearing -- excuse me, the Manafort trial. What should we expect in these early days?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Well certainly, you know, once jury selection finishes, right, we'll have the usual opening statements.

But certainly significant here is Paul Manafort's connection to the president, to the campaign, the work he did on the campaign. And like you said, you know, all of this really has to do with his personal business dealings and his personal finances.

But there are going to be interesting intersections perhaps behind some of the work on his campaign. In particular to one, where the prosecutors are going to allege that a loan, a bank loan that he got approval for was really -- he got that because of a bank executive who was hoping to land a job in the Trump administration. There are two employees of that bank who have been given immunity. They're going to testify.

Also, obviously, Rick Gates, his former business partner, also worked on the Trump campaign, he's set to testify. He's cooperating. Obviously he pleaded guilty and has been cooperating with the special counsel. So that's going to be a key day in this investigation. It's going to be the first time that we hear from Rick Gates.

And the other thing, there is going to be some interesting color here at this trial. We're going to hear about sort of the lavish lifestyle that Paul Manafort led, making all this money from the Ukrainian government, some $60 million, using that money to buy expensive cars and suits and some of the landscaping and property that he purchased with all that money. All of that is going to be brought up at the trial.

But, really, I think the big thing is going to be how all of this plays politically, how all of this plays inside the White House.

BASH: No question about it. Shimon, thank you so much for that report.

And here with me at the table to share their reporting and insights, CNN's Jeff Zeleny, Eliana Johnson with "Politico," Sahil Kapur with "Bloomberg," and Mary Katharine Ham with "The Federalist."

Hi, everybody. Happy Tuesday.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Hey.

BASH: It's -- is it Tuesday?

ZELENY: It is Tuesday. Yes.

BASH: Who knows anymore what day it is, what time it is.

ZELENY: Last day of July.

BASH: Oh, yes. OK. Summer, slow down.

Let's focus on Paul Manafort.

Shimon was talking about some of the things that we're going to see and hear. I just want to show, just to kind of wrap it up in a bow for our viewers, want we know and what we're -- we should expect.

First of all, as we said, this is the first trial stemming from the Mueller probe. It is going to focus on lavish life -- his lavish lifestyle, not possible collusion. In fact, prosecutors said that they're not going to introduce specific Russia ties, anything related to that in this trial. But they're going to call 35 witnesses, including Rick Gates, who was Manafort's business partner, deputy campaign chairman for Donald Trump. And this is just the first trial.

[12:05:22] So what do you think is the significance for the White House that you cover every day, Jeff?

ZELENY: Dana, I think the significance is -- I mean as much as everyone at the White House is saying, this has nothing to do with us. Paul Manafort was not important. It is important to think back to two years ago, really right now, in the summer of 2016. Paul Manafort was important to Donald Trump. You know, he likely would not -- Mr. Trump likely would not have been the Republican nominee, or it wouldn't have happened as smoothly at the convention in Cleveland without Paul Manafort. So, yes, this trial is not about that, but it's impossible to disconnect that. As much as you want to hear the White House officials, you know, saying, oh, he was barely involved in the campaign.

But that said, I think it's also a test of the special counsel. I mean we've seen a lot of corruption and financial crimes, trials happen in Washington. I was thinking of the one with Senator Ted Stevens this morning. Totally different, obviously. But these are also hard to prove in some respects, especially before a jury. So it is a major test of a special counsel, I think. Imagine if there is a not guilty verdict or a hung jury or something. Boy, that gives the White House really something to seize on.

So I was wondering yesterday when the president was going so hard after Bob Mueller, trying to discredit him, what if they want to hold up the result as a good thing for them at the end of this? We don't know exactly where this is going.

BASH: Wow.

ZELENY: So I think that --

BASH: That would be mind-bending.

ZELENY: You know, it would be.

BASH: And not surprising.

ZELENY: But there's no doubt that the White House is watching this unfold just across the river in Alexandria.

BASH: Yes. I mean, look, he was the president's campaign chairman at a crucial time --

ZELENY: Right.

BASH: To help get those delegates on board and make sure that there wasn't a revolt at the campaign. And now if Robert Mueller doesn't have any success in this, then it is going to be, I think, a big -- a big success for the president because look at what he's got on the table against Manafort, 18 counts of tax evasion and bank fraud, 35 potential witnesses for their prosecution, 500 pieces of evidence.

ELIANA JOHNSON, WHITE HOUSE REPORTER, "POLITICO": Yes, I mean, Paul Manafort is low-hanging fruit as far as this probe goes. So it -- this should be a slam dunk for Robert Mueller. And if he doesn't, you know, make the basket, to belabor the metaphor, that will be an enormous fluke.

And the other thing I think this really draws out is that Donald Trump, no, this doesn't directly implicate him at all, but it does draw out that he has surrounded himself essentially with crooks or at the very least very seedy people who are believed to be crooks at key points throughout his life. That's something that the Manafort trial is putting on display. Something that the Michael Cohen investigation is putting on display. And so while the president himself hasn't been implicated, certainly people around himself are being implicated.

I think Trump has lowered expectations to the extent that nobody is surprised by this, but that doesn't necessarily speak well of the president.

SAHIL KAPUR, NATIONAL POLITICAL REPORTER, "BLOOMBERG": And if you add up all the charges here CNN has reported that Manafort could be facing 305 years in prison, if he's convicted on all of these things. He is 69 right now. You do the math on that. This probably explains why he's been fighting this, why he's been doing things that have alleged -- led to allegations of witness tampering. You know, put him in -- behind bars.

It is true that this is a little bit peripheral to the, you know, to the main case. They're not talking about Russia meddling here. This seems to be about financial crimes he allegedly committed while he was lobbying for a Ukrainian politician. So that gives the White House some ability to pull back. And I also don't think that Democrats who are running in tough races in the midterm elections, which is going to be very close to when this trial ends, are banking on Russia in any shape or form to put them over the top. There are Republicans, as long as Trump is not directly implicated, who don't believe that people -- the fall of people around him are necessarily going to hurt them. So that -- all of that remains to be seen.

BASH: Yes. So the real deal is happening in Alexandria, the first real trial. And the noise continues, of course, from the president, from his team, and from, in fairness, from his critics.

And the thing that I think is so -- one of the many things I think is so interesting that we've seen over the past 24 hours is -- we talked about this yesterday -- Rudy Giuliani unveiling, right here on CNN, the notion that, well, collusion isn't a crime, which it looked like just a stream of consciousness. But then the president this morning seized on that and repeated it. Look what he said in a tweet. Collusion is not a crime, but that doesn't matter because there was no collusion, except crooked Hillary, blah, blah, blah.

OK. But let's just focus on collusion is not a crime. That is a window or a step way further than the president has ever taken beyond the mantra there was no collusion. Should that be -- I mean we're always reading tea leaves. Should that be an indicator that they're seeing something that we're not?

[12:10:04] MARY KATHARINE HAM, SENIOR WRITER, "THE FEDERALIST": I'm not sure that it should be an indicator, I mean, only because he's so frequently unclear and contradictory that I'm not sure that he --

BASH: He is, but this is something he's been the most clear on, no collusion, no collusion, no collusion.

HAM: It is and -- it's bizarre. I just never buy that there's some grand strategy from Rudy Giuliani and Trump. So that --

BASH: You're not willing to give them that?

HAM: I'm not -- I'm not sure that that's what's going on here. As usual, they shoot themselves in the foot. Like, it's silliness to assert that Manafort was not part of the -- you know, was not -- was not central to the campaign. He was. These charges are different and they are separate from the campaign and that's important to note.

But if they kept their mouths shut while this peripheral issue was going on, and, for instance, they did end up not getting a conviction, then they can talk about that. But that is not how Trump does business.

I do think the other part that's interesting with 35 witnesses and with all of this going on with the people surrounding Trump is how nervous those people get about Mueller and about what happens to them. And that, of course, creates more opportunity for more information.

BASH: Of course. Understandably so.

Real quick. KAPUR: And they also maybe word games, if I could add briefly. There is no such -- you know, there is no talk of collusion in the statute as it relates to this stuff, but conspiracy --

BASH: Yes.

KAPUR: You know, is a crime. Conspiracy to violate laws, whether it relates to hacking or foreign (INAUDIBLE).

BASH: No question. We didn't even talk about the fact that that is technically true, but not true when it comes to actually precedent.

Really fast, I just want to get your thought, what do you think is behind this slight shift? Forget about Giuliani, but from the president saying that.

ZELENY: I think it does seem intentional to me. I'm not sure if it's part of a grand strategy, but it seems to -- the president seems to have liked what he heard yesterday, I think, and wants to spend this out. So, we'll see. I wish I had the answer to it.

BASH: Well, I'm sure you will, Jeff. I have absolutely no -- I have total faith.

ZELENY: We've been right about everything else up and to this point.

BASH: I have total faith in you, Jeff Zeleny.

Before we go to break, I want you all to take a trip with us on the INSIDE POLITICS way back machine. One year ago today, one of the most memorable departures from the Trump White House, Anthony Scaramucci. Now, he wasn't the first or the last to leave.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: When Sean Spicer resigned, it was for a clean slate. Now that Anthony Scaramucci resigned, that's also for a clean slate. Has the slate been totally cleaned at this point? Should we expect any more staff shake-ups? Everybody else in senior staff positions is planning to remain for this time?

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: Yes, they are.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[12:16:31] BASH: President Trump heads to Tampa this evening to hold a rally and a campaign event for Ron DeSantis, a Republican congressman running to be Florida's governor. But, more broadly, this rally is also for the president. Sources tell me that the president is telling aides that he wants them to schedule more political rallies for him. A lot more. I'm also told that Mr. Trump is increasingly expressing his concern to aides about losing the House in November, which he understands would put a damper on passing his agenda. So I'm told Mr. Trump wants to tackle this the way he has many other challenges over his career, both in business and in politics. He wants to take things into his own hands, get on the road more, hold his own megaphone, and control the message.

Back with our panel.

And, you know, look, I'm told that he is really itching to do this because he's frustrated and his own experience, never mind in business, but also in politics, is that when he follows his gut and he -- and he kind of says what he wants and he does what he wants, it tends to work for him.

JOHNSON: You know, he is not the first president to enjoy the campaign trail more than the act of governing, but he certainly does. And, you know, the president, I think, strongly believes that he won in 2016 because he is a great and gifted politician. And I do think that that's why these -- the whole Russian meddling thing really gets under his skin. Any idea that Russia helped him win or that Hillary Clinton was a bad candidate and that he didn't make her so really cuts to the core of his view of himself and why he won this election. So he wants to get back out on the campaign trail and he believes, I think, that he can reap benefits for other candidates.

BASH: He does. But let's just do a reality check that our friend David Chalian reminds us of also of many, many times a day, and it's important, that he is great on the stump. He is great with the base. But he can do that in Florida, which he's doing today for a Republican primary. He can do it in places where he won by a bazillion points, in West Virginia and North Dakota. But the House is largely going to be decided in swing districts where Republican candidates might not think it's so helpful to have the president.

HAM: Yes. I mean he wants to control the message, and that has worked for him in the past, but there is no message control when he's controlling the message. And that's what the people in swing districts have to worry deeply about.

I think with Senate and governor's races, he can have a better track record probably. But, generally, what works for Trump and when he's good at transferring power is when the -- or transferring enthusiasm is when the candidate is very Trump-like himself in his demeanor and the way that he does business. And that's not going to fly as well in these swing districts, even in a base-pumping election.

BASH: And you know this better than anybody, Jeff, because you watched Barack Obama try to do this, try to transfer his magic to other candidates, and it, for the most part, failed miserably.

ZELENY: It did.

BASH: And the question is whether Donald Trump could have the same perils.

ZELENY: It's the big test. And I am told, you know, several months ago that President Trump was surprised to learn that the history of midterm elections is so poor for the president's own party. The, you know, history will show that it's very difficult in the first year. BASH: Yes.

ZELENY: Now, he may be different. He can fire up his base unlike anyone said. But as Mary Katharine was saying, I mean, for governors and Senate races, absolutely. But in House races, it just doesn't work the same.

[12:20:03] But he does want to defy history. He does want to keep as many seats as he can. And if he -- and if Republicans control the Senate, that's no small thing. But that is more likely, those House races. If he's going to campaign as much as he said he will, he'll be hard pressed to find that many Republicans --

BASH: Well, right.

ZELENY: Who want him to come to their town (INAUDIBLE).

BASH: Exactly. And, Sahil, as you jump in, I just want our viewers to see just what the president's schedule is on the campaign trail this month alone already. At the beginning of July he started in Montana, then went to Missouri, Illinois, and Iowa. Today, as I mentioned, in Tampa. Thursday to Pennsylvania.

KAPUR: Yes, it's a momentous shift in his thinking, in President Trump's thinking, that your reporting reveals. Before, you know, he had indicated, you know, to people around him that he was not that worried about the midterm elections, that he kind of -- he was dismissive of the idea that Republicans would lose the House given their advantages. And, yes, he should be concerned. Ask President Obama what happened to his agenda after, you know, the first midterm when the opposition party took control.

As for where he campaigns, he's got to pick his spots well. If the candidates are running base turnout elections, he could do very well. He can be helpful, you know, to someone like Kevin Cramer in North Dakota. He can be helpful in West Virginia.

BASH: Yes.

KAPUR: These are very red states. But is he going to go to Miami for Carlos Curbelo? Is he going to go just outside D.C. to the suburbs for Barbara Comstock? Is he going to go to Modesto for Jeff Denham? If I were those people, I'd probably want him to stay out.

BASH: Well, he's going to be greeted today by a Republican candidate in a Republican primary in Florida whom the president has endorsed. And listen to the kind of message that he is going to be clearly welcoming with open arms.

This is Ron DeSantis.

(BEGIN VIDEO CLIP)

REP. RON DESANTIS (R), FLORIDA GOVERNOR CANDIDATE: Well, obviously, you know, he's the 800-pound gorilla in Republican politics. And I think a lot of our voters at the grassroots level are frustrated when they see some Republicans not trying to support him. And so that's something that they look for, you know, are you supporting the president? Well, in my case, people are seeing that the president is supporting me. But I think Trump's support kind of separates the wheat from the chaff. And I think it's been a -- been a big boost for me.

(END VIDEO CLIP)

BASH: And that is why President Trump is going to Tampa to have a rally for that candidate, Republican candidate for governor, later today.

Up next, why on earth would President Trump tell the mega donor Koch brothers that he doesn't want their money? We'll give you the answer after the break.

(COMMERCIAL BREAK)

[12:27:11] ANNOUNCER: This is CNN breaking news.

BASH: We have breaking news out of the White House.

I want to go straight to Kaitlan Collins, who is reporting that news about Chief of Staff John Kelly.

Kaitlan.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: That's right, Dana.

John Kelly announced at a senior staff meeting here at the White House yesterday that President Trump asked him to remain on as the chief of staff for a little bit longer, at least through 2020, we are told by sources inside the White House. Now, Dana, that's surprising because it comes after weeks of speculation about what seemed to be an imminent departure from John Kelly, who has really lost his power and his standing in the West Wing since he came into the West Wing as the chief of staff last year, a year ago yesterday, to replace Reince Priebus. There has been much reporting and speculation about John Kelly lately, even by people inside the White House and even by President Trump himself, who has been polling aides and allies in recent weeks on what they thought of Kelly's performance. And at times he would fluctuate from complaining about Kelly and going off about him and profanity-laced tirades, to the next day praising John Kelly in front of other staffers and telling them what a good job he is doing.

Now, of course, in the weeks leading up to President Trump's swing through Europe where he caused several chaos in the steps along the way, not only in the United Kingdom but also at the NATO summit in Brussels and during that infamous summit in Helsinki with Russian President Vladimir Putin. Before that trip, Dana, aides thought that John Kelly only had hours or days left in the White House. But they said afterward that the chaos of that trip helped cement his standing in the West Wing because it meant the president needed him a little bit more. And now it does seem as if the president is seeming to express some confidence in John Kelly, even though there was rampant speculation about his departure. One moment that really shows this, Dana, was yesterday in the Oval

Office, as the president was swearing in the new Veterans Affairs Secretary Robert Wilkie, he gave John Kelly a shout out, something we haven't seen him do in recent days --

BASH: Yes.

COLLINS: Saying that it was his one year and Kelly smiled and saluted the president in return. And now this latest reporting that he's sitting here asking John Kelly to remain on as chief of staff. He seems to be expressing some confidence in him.

Of course, Dana, this has to come with the caveat that White House officials do not sign contracts. They are not guaranteed any amount of time in any White House, but especially this White House where this president seems to change his mind sometimes on a near daily basis. But, for right now, he does seem to be expressing a vote of confidence in his Chief of Staff John Kelly.

BASH: Kaitlan Collins, thank you so much for that great reporting. As always, appreciate it.

Back around the table.

Jeff Zeleny, you are a senior White House correspondent. You are there every single day. What does this say to you?

[12:30:02] I'll just say, as I -- as I ask you that question, just my initial take on what Kaitlan was saying is that for somebody who is known to be apolitical and not have a political bone in his body, meaning John Kelly, this is very shrewd.