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ERIN BURNETT OUTFRONT

Beto O'Rourke Borrows Trump's Line, Calls Cruz "Lyin' Ted"; Source: Michael Cohen Will Campaign Against Trump. Aired on 7-8p ET

Aired October 17, 2018 - 19:00   ET

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

[19:00:01] WOLF BLITZER, CNN ANCHOR: Thanks very much for watching. "Erin Burnett OutFront" with Jake Tapper tonight starts right now.

JAKE TAPPER, CNN ANCHOR: "OutFront" next, the exclusive new details on Secretary of State Mike Pompeo's meeting with the Saudi crown prince, what really happened behind closed doors.

Plus, "OutFront's" race of the day, Cruz versus O'Rourke, will Beto O'Rourke's new attack strategy work or is it too little too late?

And the secret service stopped him from questioning Jared Kushner on a plane last night and he has the video to prove it. CBS Correspondent Errol Barnett is my guest. Let's go "OutFront."

Good evening, I'm Jake Tapper in for Erin Burnett.

"OutFront" tonight, breaking news, exclusive details just coming in to CNN about the meeting between Secretary of State Mike Pompeo and Crown Prince Mohammad bin Salman or MBS yesterday.

Pompeo back in the U.S., about to land at Joint Base Andrews. The photo-op was all smiles. But behind closed doors, our Jamie Gangel reports it was anything but, according to a source.

Pompeo said, by the source, to be direct and blunt and demanding the Saudis get the investigation done and quickly and that every fact must get out. This, of course, after the Saudi government for days now adamant that it had nothing to do with the disappearance and apparent murder of Jamal Khashoggi, a "Washington Post" contributor and critic of the Saudi government. But is the Saudi denial believable at all?

CNN has identified one of the suspects in the disappearance and possible killing of Khashoggi, Maher Abdulaziz Mutreb. And he has close ties with Crown Prince MBS. Here are the two men back in March during a visit to MIT in Boston.

They were also seen together in Houston back in April, touring homes that were flooded after Hurricane Harvey. Is that something Secretary Pompeo asked the crown prince about when he was prompting him to conduct his investigation?

CNN Special Correspondent Jamie Gangel just breaking this news for us. Jamie, what more are you learning about what Secretary Pompeo told the crown prince?

JAMIE GANGEL, CNN SPECIAL CORRESPONDENT (via phone): Well, Jake, as you just said, the smiles ended at the end of that photo op, and I'm told that Secretary Pompeo told MBS, the crown prince, in no uncertain terms that he had to "own the situation," that every fact was going to get out.

And he made it clear to the Saudis that they had to get their investigation done very quickly. And then he stressed "that time is short" and that the Saudis "have to deal" with the people involved and they have to deal with them sharply.

I'm told that Secretary Pompeo was blunt and direct and told the Saudis that if they don't, that "the U.S. will have to deal with this," that he told the crown prince that the U.S. will take action because the world will demand it. And even said that the President's hand will be forced also because of how this is seen around the world.

Finally, Jake, I think this is the most striking moment of the reporting. I was given -- Secretary Pompeo told the crown prince that whether or not he knew about it or didn't know about it beforehand, it's his responsibility. He has to own it and that "his future as king is at stake." It doesn't get much more direct than that, Jake.

TAPPER: All right, Jamie Gangel, thank you so much for that reporting. We appreciate it.

"OutFront" now, Leon Panetta, former Secretary of Defense and CIA Director under President Obama, former Chief of Staff for President Clinton. Secretary Panetta, always good to see you.

You heard Jamie Gangel's reporting, a source familiar with the meeting saying that Pompeo told MBS in no uncertain terms he has to own the situation, have to get the investigation done quickly and if they don't do it, the U.S. will have to deal with this. I guess my first question for you is, do you buy that behind the scenes Pompeo conveyed this to the Saudis?

LEON PANETTA, FORMER DEFENSE SECRETARY UNDER PRESIDENT OBAMA: Well, I think that Secretary Pompeo probably did present a very firm message to the Saudis. You know, I know Mike Pompeo from his work at the CIA, and you know, I found him to be a pretty direct guy when it comes to getting to the issues. And I think he recognizes that the whole world is watching right now.

And the Saudis have a clear responsibility to present the truth, the whole truth, and nothing but the truth to the world as to what happened to Mr. Khashoggi.

TAPPER: So, explain to -- I understand that diplomacy and what goes on behind closed doors is very different from what goes on in front of the cameras.

[19:05:01] But why would be -- why would Pompeo be pushing behind the scenes, as Jamie Gangel says a source tells her he did, when President Trump is seemingly so credulous, openly, about Saudi denials? PANETTA: Well, I think Mike Pompeo understands that this is an important issue that has to be dealt with directly. And I think President Trump kind of plays these issues by ear, by his own concerns without really considering, oftentimes, the consequences.

Mike Pompeo has to worry about the consequences here, because if, in fact, the Saudis did what is suspected and killed Khashoggi, there are going to be consequences, and Mike Pompeo is going to have to head up those consequences. So, I think he's much more serious than the President, frankly, about how to deal with this issue directly.

TAPPER: As somebody who worked with the Saudis both when you ran the Pentagon and also when you ran the CIA, and also when you were the Chief of Staff for Bill Clinton, do you think there's any chance, realistically speaking, that this operation happened and neither the crown prince nor King Salman knew anything about it?

PANETTA: You know, it's -- it would be very difficult to have a credible explanation that involved the crown prince not knowing what took place here. Just look at the facts that we know. Khashoggi goes into the consulate, he doesn't come out.

There are two teams of Saudis, some involving the security detail related to the crown prince who were present, plus a forensic doctor who's trained in autopsies, plus a bone saw. None of that, I think, would take place without permission from the highest levels in the Saudi government.

We know what the Turks are saying about what took place. They say they have audio and videos. We haven't seen them but that indicates that a gruesome murder took place within that consulate.

And lastly, look, this is two weeks now since this happened, two weeks, and it took place in a Saudi consulate. There is no question in my mind that the Saudis know exactly what happened there, and that they've been stonewalling for two weeks, and the time has come for them to tell the truth to the world as to what took place.

TAPPER: It's so brazen what it appears to have happened. And I'm just wondering, MBS, the crown prince, is said to be so savvy, so sophisticated, so brilliant, if ruthless. What would make him think that he could get away with doing something like this or ordering something like this to be done on -- within the borders of another country that he doesn't control the cameras at the airport, he doesn't control the cameras outside various embassies. Why would he think he could get away with it?

PANETT: Well, I think it involves understanding the Saudi mentality. I think, you know, obviously, the crown prince is really interested, I think, in trying to promote reforms and to bring Saudi Arabia into the 21st century.

But it's very difficult for them to operate with one foot in the 21st century and the other foot in the 15th century where they basically go after people and do the kinds of things that we saw take place. So, there's kind of that double standard that is involved here. And I think they went ahead, they probably viewed Khashoggi as an enemy, and went ahead and did what they did.

But I think they have to understand that this is the 21st century, and that those kinds of things cannot take place without consequences. The relationship with Saudi Arabia is going to change as a result of what took place here.

TAPPER: Leon Panetta, always good to see you, sir. Thanks so much.

PANETTA: Good to be with you.

TAPPER: "OutFront" next, breaking news, Michael Cohen, the President's former fixer, meeting with state and federal investigators. What they're looking for from the President's former fixer.

Also, breaking, expectations growing tonight that Robert Mueller is getting ready to deliver key findings from the Russia investigation, possibly within weeks.

And the man taking on Republican Ted Cruz comes out swinging.

(BEGIN VIDEO CLIP)

REP. BETO O'ROURKE (D), TEXAS SENATE CANDIDATE: He's dishonest. It's why the President called him Lyin' Ted, and it's why the nickname stuck.

(END VIDEO CLIP)

TAPPER: But will the attacks work? Stay with us.

(COMMERCIAL BREAK)

[19:13:46] TAPPER: We have some breaking news for you. Michael Cohen meeting today with prosecutors investigating President Trump's family business and his charity organization, that's according to people familiar with the meeting.

Here's Cohen leaving his lawyer's office today after the meeting. This just one day after President Trump attacked his former lawyer in an interview with the Associated Press, claiming that Cohen lied about a hush money payment Cohen said he made at Trump's direction.

CNN's Senior Justice Correspondent Evan Perez is "OutFront." And Evan, what else can you tell us about this meeting?

EVAN PEREZ, CNN SENIOR JUSTIC CORRESPONDENT: Well, this is a meeting, Jake, at Guy Petrillo's office, this is Michael Cohen's attorney. And this is a meeting that occurred with prosecutors from the Southern District of New York as well as the Attorney General's Office in New York State.

Now, these -- both these offices are still doing investigations into the Trump family business and organization. And so Michael Cohen spent, as you saw, you know, a few hours there. He's already previously spent hours talking to those prosecutors from the Southern District of New York as well as the prosecutors from Robert Mueller's office who everybody's interested to know what he's providing behind the scenes as part of this cooperation agreement that -- or whatever cooperation he's providing to try to get a better deal when he gets sentenced later this year.

[19:15:00] TAPPER: All right. Evan, stay with me. Also joining me now, we have with us "New York Times" White House Reporter, Julie Hirschfeld Davis, and a former Federal Prosecutor Shan Wu, who previously represented Rick Gates, the former aide to the Trump campaign, and Paul Manafort who is now cooperating with the Mueller probe.

Shan, let me start with you. How significant do you think it is that Cohen had this meeting today and were you President Trump, how worried would you be?

SHAN WU, FORMER FEDERAL PROSECUTOR: I'd be very worried if I was President Trump and it's because this is somebody who was right at his side and we even heard in that little bit of excerpt from the tapes how unguarded Trump was talking to him. And he's used to letting his hair down, talking freely, musing about things, that's what makes somebody like Cohen so dangerous. He's right there and they're not planning litigation. They're not planning to defend against an investigation. They're just talking, so he's going to be forthright.

TAPPER: And when your colleagues at the A.P. sat down with President Trump and asked about Michael Cohen, boy, the hurt feelings are still right there on the surface. President Trump lashing out still upset.

JULIE HIRSCHFELD DAVIS, WHITE HOUSE REPORTER, "THE NEW YORK TIMES": Absolutely. I mean, we saw this in the immediate aftermath of when Michael Cohen's office was raided by investigators and we first learned of the extent to which they were going into his office, into his files, into all of the information that he has, which is huge about President Trump's business and personal affairs over the last, you know, more than a decade.

And even though he said to the A.P. yesterday that Michael Cohen lied and that, you know, he really just had a bit part in my business, I mean, we all know that, you know, this was Donald Trump's legal fixer. He did all manner of things for Donald Trump.

And so one of the reasons he's so angry about this is because he knows that Michael Cohen knows a lot of stuff and he also knows now, given the plea agreement from a couple of months ago, that he's willing to provide some of what he knows to investigators to save himself.

TAPPER: And implicate President Trump in those things. Evan, you also have some new reporting tonight on the state of the Mueller investigation. Repeated meetings between his team and Paul Manafort, also about when Mueller might issue his report. What are you hearing?

PEREZ: Well, yes. So, this is supposed to be a quiet hearing because we're leading up to the midterm elections in November, but behind the scenes, the Mueller team has been very busy. They brought in the Paul Manafort for at least nine interviews, hours that they've spent with the special counsel's office now getting information from Paul Manafort. We don't know exactly what he's provided, but we know that among the questions he's being asked is about interactions with Russians over the years.

And so that goes, obviously, in addition to the cooperation that we now are seeing from Michael Cohen. We know that behind the scenes talks have intensified between the special counsel's office and the Mueller -- and the President's legal team. They've now received questions that they're trying to provide written answers to the take home test that we always talk about.

And then there's people associated with Roger Stone who've come in. They have been subpoenaed. Some of them have been having talks about providing more information as well as we are team that sits at the courthouse has seen multiple interactions between the Mueller team and the judges that oversee the grand jury to try to make sure, you know, whatever testimony they're trying to line up.

So, we know that there's a ton of activity coming that this seems to indicate that after the midterms the Mueller team is going to gear up with additional indictments. We expect that a report will be sent up to Rod Rosenstein, the Deputy Attorney General, perhaps in December. We don't know, obviously, when exactly Mueller will report whatever he has to report. But we're going to -- we're expecting, Jake, at least November and December to be extremely busy.

TAPPER: Just to be clear, nine meetings between Mueller and Manafort?

PEREZ: Nine.

TAPPER: Nine since this conviction?

PEREZ: Right, exactly.

TAPPER: What do you make of that, nine meetings and a pending report possibly after the midterms?

WU: They've got a lot to talk about. And that's the kind of intense interaction you're going to have when you're a cooperator. There's nothing you can hold back. They're going to ask everything you possibly know.

I think it's interesting with this much grand jury activity, though, as Evan is pointing out, it seems like they'd be hard pressed to do a final report even that quickly on that timetable, so it's possible there's going to be more than one report. I mean, I suppose there even could be some sort of interim report. But it just seems like there's a lot of activity going on to actually finalize something.

I think it's a little bit of a victory if the President does not have to submit to that interview. I think that's something his legal team has been working very hard to avoid, absolutely. And so, I mean, that might be a bit of a kudos to them that they avoided that. But, of course, Mueller's report is then free to say that, "The President wouldn't meet with us so this is what we have." And then the President's free to spin it to say, "We would have wanted to meet with them, but they weren't reasonable."

TAPPER: And Julie, obviously, the President's legal team, Rudy Giuliani included, talking about how much they want this to wrap up so I guess if they hear that report's going to be issued after the midterms, they might be happy about it. But then they hear that nine visits between Manafort and Mueller, that wouldn't fill me with confidence.

DAVIS: Right. I mean, I think they've been eager for this to wrap up as soon as possible for a year, more than a year, and had been telling the President as early as last year at this time that, "Oh, it's just around the corner, Thanksgiving maybe." And you know, here we are a year later.

[19:20:08] I think for sure they want this to come to an end but there are still so many unknowns. Evan's right, it's been a quiet period. They've been quieter or even than unusual on the Mueller team because I think of the approach of the midterms.

But that also means that apart from the back and forth that Giuliani and the rest of the legal team are having on the President's actual answers to questions that they're submitting, they don't really know what they're dealing with.

And so they're seeing things like that that, you know, that Manafort is extensively cooperating with the investigation and they're wondering what more is going to come forth. And also, whether it's going to be the final word, whether what we see in November potentially or December is going to be the beginning or the end.

TAPPER: Right.

PEREZ: And that's the important part, is that they have no idea what Paul Manafort is saying behind those -- behind the scenes in those nine interviews.

TAPPER: It reminds me of the movie "Cliches," it's quiet, almost too quiet. That's what they're thinking in the White House. Evan Perez, Julie Davis, Shan Wu, thank you so much.

Coming up, "OutFront," Democrat Beto O'Rourke building a massive war chest to take on Ted Cruz but will money make up for how far behind he is in the polls?

Plus, the secret service shutting down a CBS News reporter from trying to ask Jared Kushner a question.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hey there Jared, Errol Barnett with CBS, any comment (INAUDIBLE)?

(END VIDEO CLIP)

TAPPER: That reporter, Errol Barnett, will be my guest. Stay with us.

(COMMERCIAL BREAK)

[19:25:29] TAPPER: Yes, that's CNN election music. I like it. Tonight, President Trump weighing in on the heated Texas race in -- Senate Texas race, tweeting that, "Democrat Beto O'Rourke wants higher taxes and far more regulations," and calling him a "flake." A flake. Follows a fiery debate between O'Rourke and Cruz, a debate in which we saw O'Rourke throw some real punches for the first time.

(BEGIN VIDEO CLIP)

O'ROURKE: He's dishonest. It's why the President called him Lyin' Ted and it's why the nickname stuck.

SEN. TED CRUZ (R), TEXAS: Its clear Congressman O'Rourke's pollsters have told him to come out on the attack. So if wants to insults me and call liar, that's fine.

(END VIDEO CLIP)

TAPPER: The big question, of course, will Beto O'Rourke's strategy work? Ed Lavandera is "OutFront" with our "Race of the Day."

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Senator Ted Cruz.

ED LAVANDERA, CNN CORRESPONDENT (voice-over): Ted Cruz has mastered the postcard size political punch.

CRUZ: If you want a big government gun-grabbing liberal, well, the Democrats have given you one.

LAVANDERA: The rapid fire jabs at Democrat Beto O'Rourke are designed to deflate the El Paso congressman's soaring campaign.

CRUZ: On job-killing regulations, he's for them, I'm against them. Guns, I'm for them, he's against them. On taxes, he's for them, I'm against them.

LAVANDERA (on camera): In the last few weeks, Senator Cruz has unleashed a wave of television ads criticizing O'Rourke, painting him as dangerous and radically liberal. O'Rourke has been hesitant to fire back directly, saying he prefers to follow the positive path that has brought him to this point so far.

UNIDENTIFIED MALE: Beto O'Rourke is no friend of Texas energy.

LAVANDERA (voice-over): The Cruz television campaign and laser- focused message seem to have halted O'Rourke's forward march in the polls. A CNN poll shows O'Rourke 7 points behind.

UNIDENTIFIED MALE: Beto O'Rourke wants to be a senator.

LAVANDERA: For weeks, as O'Rourke has literally run and barn stormed through every corner of the state, we've asked him how he would respond to the Cruz campaign's criticisms, which seem to be working.

(on camera) Are you worried that those critiques and those things are going to stick?

O'ROURKE: Yes.

LAVANDERA: Are you fighting back with them?

O'ROURKE: I think people are sick of the pettiness and the partisanship and the smallness.

UNIDENTIFIED MALE: Can you take the gloves off and fight a little bit tougher and dirtier if you have to?

O'ROURKE: We're fighting for a positive future for this country. We're not fighting against anyone. It's not against another party.

LAVANDERA (voice-over): But with early voting starting next week, O'Rourke is shedding the nice guy approach.

O'ROURKE: Senator Cruz is not going to be honest with you. He's going to make up positions and votes that I've never held or have ever taken. He's dishonest. It's why the president called him Lyin' Ted and it's why the nickname stuck because it's true.

LAVANDERA: Democratic Strategist Harold Cook worked for Ann Richards, one of the last Democrats to hold statewide office in Texas. Cook says O'Rourke must sharpen his attacks before it's too late.

HAROLD COOK, DEMOCRATIC STRATEGIST: You can be high-minded while you're drawing a clear contrast between yourself and your opponent.

LAVANDERA (on camera): And Beto hasn't done enough of that.

COOK: He hasn't done it yet and he needs to get on it because it's time.

LAVANDERA (voice-over): An anti-Ted Cruz PAC has rolled out an ad roasting Cruz for cozying up to President Trump who once said the Texas senator had done nothing for Texans.

UNIDENTIFIED MALE: If somebody called my wife a dog and said my daddy was in on the Kennedy assassination, I wouldn't be kissing their ass.

LAVANDERA: O'Rourke has rarely talked about Ted Cruz and President Trump in his campaign speeches, but in recent days, that has changed.

O'ROURKE: We need a full-time senator.

LAVANDERA: He ripped into Cruz for shutting down the federal government and rolling back health care protections and even unleashed his sharpest criticism yet of the Texas senator for campaigning with the President.

O'ROURKE: Senator Cruz will put his political ambition, his prospects in the next election ahead of anything else, including his family, including those he's sworn to represent here in Texas. Texas has lost its voice in the U.S. Senate in Senator Cruz.

LAVANDERA: The showdown will continue for another three weeks in a race that's captivated a state not used to this kind of political clash.

(END VIDEOTAPE)

LAVANDERA: And Jake, Cruz' campaign manager reacted to this new O'Rourke strategy by saying last night after the debate that, "When an unconventional candidate goes conventional, that's typically when they get split open like a cantaloupe."

[19:30:05] Now, Cruz's embrace of Donald Trump which he has fully done on the campaign trail has pitfalls of its own. CNN poll released yesterday shows that even though Trump won the state of Texas by nine points in 2016, his approval and disapproval rate here in the state are even at this point -- Jake.

JAKE TAPPER, CNN HOST: All right. Ed Lavandera, thank you so much.

OUTFRONT now, Karine Jean-Pierre, senior adviser and national spokesperson for moveon.org and Scott Jennings, former adviser to Senator Mitch McConnell and former special assistant to President George W. Bush.

Karine, I'll start with you.

Beto O'Rourke now sharpening his attacks against Ted Cruz but with less than three weeks until the election, O'Rourke is down by seven points among likely voters in the CNN poll, 89 percent of whom say their minds are made up.

Can he really actually hope to make up any difference here?

KARINE JEAN-PIERRE, SENIOR ADVISER & NATIONAL SPOKESPERSON, MOVEON.ORG: I think it's -- I think he can. Look, we're talking about Texas, deep red Texas, and you have someone who is -- and you have someone, Beto O'Rourke, who's actually making it competitive. And like you mentioned in 2016, Trump won it by nine points. In 2012, Mitt Romney won it by 16 points.

He has this amazing war chest which I think also is showing the grassroots energy around him, small dollars, not accepting money, PAC money or corporate money. And another thing, too, is since the midterms, it was 1.6 million new voters on the voter rolls in Texas, 1.6 compared to 2002 and 2004 where it was 100,000.

So, Beto O'Rourke can take that money and really do a ground game, I think that it will be a very tight race at the end and we'll see if he can pull it out. TAPPER: Scott, in races all over the country, we're seeing Democrats

outraised Republicans. According to "The National Journal", 92 House Republican incumbents were outraised by their Democrat challenger. Obviously, we see a stark example of that in Texas.

Does that concern you as a Republican?

SCOTT JENNINGS, FORMER ADVISER TO SEN. MITCH MCCONNELL: Well, it concerns me in a lot of these House races, absolutely. I think some Republicans are going to lose House races because they didn't raise enough money and they didn't prepare themselves.

I think in the case of the Texas Senate race, though, Democrats are going to look at this the day after the election and wonder, boy, oh boy, if only we'd had another couple million in North Dakota or Missouri or Indiana or West Virginia or Florida or any of these other states where Democrats are actually running close races. You know, Democrats every cycle, they're always looking for a southern messiah, they're looking for the next -- you know, which Democrat can compete in the South and they fall in love with these candidates and they pour money into these races and it never pans out.

A Democrat hasn't won in Texas in 24 years, one's not going to win this year. This is not a close race. I can't believe any Democrat in Texas is getting a good night's sleep given the loud flushing sound of flushing $61 million down the toilet trying to knock off Ted Cruz. It's not going to happen.

TAPPER: Karine, I know you disagree with everything he said.

JEAN-PIERRE: Everything he just said.

TAPPER: But I want to ask you, President Trump is campaigning with Cruz in Texas on Monday. You heard Ed say the president's approval ratings in Texas, even though he won that state handily, it's pretty even, 49 percent, 48 percent.

Do you think that Trump actually will be a boost to Ted Cruz, especially considering the bad blood between them historically, not anymore, but historically and the fact that, as Beto O'Rourke puts it, you know, he went after his family. He insulted his wife, he insulted his dad.

JEAN-PIERRE: And Ted Cruz still goes back to the person who started all of it, insulting your wife and your dad? That's pretty low. That's lower than we've ever seen, even if people do this in the past where they go after each other and then come back together.

Look, Beto O'Rourke just recently had a event where 55,000 people, Donald Trump said he wanted the biggest stadium, and he's going to one of the smallest stadium of 8,500. I'm not worried at all.

TAPPER: You're really not worried.

Scott, President Trump and Ted Cruz obviously have had a really ugly relationship. Here's just a small sample. (BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), TEXAS: Donald, you're a sniveling coward, and leave Heidi the hell alone.

DONALD TRUMP, THEN-PRESIDENTIAL CANDIDATE: His father was with Lee Harvey Oswald prior to Oswald being, you know, shot. I mean, the whole thing is ridiculous.

CRUZ: The man cannot tell the truth, but he combines it with being a narcissist.

TRUMP: Lying Ted Cruz, Lyin' Ted. Lies. Oh, he lies.

(END VIDEO CLIP)

TAPPER: So is it all just water under the bridge now?

JENNINGS: Well, I think Republicans want it to be water under the bridge, and look, if I were Ted Cruz, I'd still be super pissed about some of the things that Donald Trump said. But I'm not a U.S. senator and I don't need to get reelected, so I guess I could be super pissed about it.

Look, Ted Cruz has done what he had to do. He's gone to the Senate, played nice with the White House, helped Trump, and he's helped the Senate leadership, Mitch McConnell and John Cornyn when he used to be a thorn in their side, so Ted Cruz learned a lesson. He was chastened by the presidential campaign and he's now become more of a team player, which is precisely what the Republicans in Texas want him to do.

[19:35:05] The reason they have a good voice in Texas right now is because Ted Cruz has actually started playing ball with the party and the party is getting results, and that's the agenda that the people in Texas most want to see.

JEAN-PIERRE: I just want to say one thing. A year ago, Alabama, we had -- we didn't win that U.S. Senate seat in 25 years and it happened. So, just wanted to throw that out there.

TAPPER: All right.

JENNINGS: Whoa, whoa, are you saying --

(CROSSTALK)

JENNINGS: Are you saying there are comparable conditions in Alabama and Texas? That is an outlandish assertion.

TAPPER: I don't think she's saying that. Anyway, Scott Jennings, Karine Jean-Pierre, thank you so much. Appreciate it.

Don't miss the special CNN town hall on the Texas Senate race with Dana Bash. That's tomorrow night at 7:00 p.m. Eastern.

OUTFRONT next, this is what happened when a reporter dared to ask Jared Kushner a question on an airplane.

(BEGIN VIDEO CLIP)

ERROL BARNETT, WASHINGTON CORRESPONDENT, CBS NEWS: Hey there, Jared. Errol Barnett with CBS. Any comment on --

(END VIDEO CLIP)

TAPPER: Why did the Secret Service react like that? Is that their job?

Plus, a stunning eight-month investigation into the Trump Organization and what was uncovered is a troubling history of lies and deception. Stay with us.

(COMMERCIAL BREAK)

[19:40:19] TAPPER: Tonight, the Secret Service defending itself after an agent covered up a reporter's phone camera as he tried to ask senior White House adviser Jared Kushner a question about Saudi Arabia while they were both on an airplane.

Here's part of what happened.

(BEGIN VIDEO CLIP)

BARNETT: Hey there, Jared. Errol Barnett with CBS. Any comment on --

(INAUDIBLE)

(END VIDEO CLIP)

TAPPER: OUTFRONT now is the reporter who was trying to ask Kushner a question, Errol Barnett, Washington correspondent for CBS News.

Errol, thanks so much for joining us. Tell us what happened and what did you want to ask Kushner?

BARNETT: Well, Jake, this seemed to me much ado about nothing, initially. I'm boarding a plane from Washington, D.C., to New York, a flight I take regularly. I saw that Jared Kushner and Ivanka Trump were the final two people to board this flight, surrounded by Secret Service agents and in communicating with my bureau, CBS, in Washington, D.C., it was simply agreed that, look, there are burning questions we have for this administration on its response to Saudi denials that the Saudi royal family had nothing to do with the disappearance of Jamal Khashoggi.

So this was an opportunity to ask Jared Kushner, who is key in the Trump administration's thinking and relationship with the Saudi royal family, how he responds to the denials. That was the purpose. And as I got this question out, wearing my CBS lanyard and White House press badge, which as you know you have to be vetted by the Secret Service in order to obtain one, I thought it an opportunity for an adviser to the president to speak about the administration's response. We do know that he had a phone conversation with the crown prince,

Mohammed bin Salman, last week. So it's a burning question at an important time, and the Secret Service intervened and you see what happened there in the video.

TAPPER: CNN law enforcement analyst Jonathan Wackrow tweeted in part, quote, I give a pass in this case as agents were focused on dynamic security elements over a press inquiry. Reporter exposed Kushner being on the plane, increased exposure equals increased risk, unquote.

I don't agree with that, but what do you say?

BARNETT: Well, look, reporting on the White House and traveling with President Trump, reporting on him on air force one and traveling with the previous president, Barack Obama, us in the media have such great respect for Secret Service agents and what they do. And I have to note, and I've been saying this all day, they are some of the most respectful agents within law enforcement. It is extremely rare to see a Secret Service agent cover a camera.

In fact, I was reached out to a contact who said, look, as a Secret Service agent, that is a no-go. We're not supposed to impede or interfere with the press at all, and the Secret Service says that was not the intent in that moment. They released a statement saying they in no way were trying to inhibit access to Jared Kushner. They perceived the phone in my hand as a type of threat. They did not realize I was a member of the press and it all unfolded within just a few short moments.

And so the tweet went viral, I think, because it struck a chord with what people are seeing in the country right now.

TAPPER: They say that they thought the phone was a threat? How so?

BARNETT: Well, Secret Service agents are, as other police officers, trained to respond on instinct and immediately and so in conversations that I've had with the Secret Service since and the statement that they put on the record which we're allowed to share, they say that the offering responded to a movement, an abrupt movement, they say, by an unknown individual who later identified themselves as a member of the media.

Now, you can see in the video, the very first thing I say is who I am and who I'm with, and I'm wearing the name of my channel around my neck, so you can make what you think of that statement, but from the Secret Service perspective, they don't think this officer did anything wrong and they were not trying to inhibit access to Mr. Kushner.

And for the record, we've reached out to the White House for an interview and press secretary Sarah Sanders says she'll let me know if the opportunity presents itself.

TAPPER: I'm sure she will. Of course, the Secret service agent, Errol Barnett, said not the time or place, so I think he did understand who you were.

But thank you so much for being with us tonight.

BARNETT: You got it. Thank you.

TAPPER: OUTFRONT next, money and lies. New details tonight from an extensive eight-month investigation into the Trump Organization. I'll talk to one of the reporters about what her team uncovered.

Plus, Michael Cohen now threatening to take on President Trump on the campaign trail.

[19:45:04] Stay with us.

(COMMERCIAL BREAK)

TAPPER: New tonight, a stunning eight-month investigation revealing that President Trump and his family regularly misled and deceived potential investors and buyers to make a profit off their real estate projects. Just look at some of the examples.

From 2008, Ivanka Trump told reporters that 60 percent of the units at its tower in SoHo, New York, have been sold. In reality, only 15 percent of the units had been sold. That tower has since gone bankrupt with the Trump name removed.

Ivanka Trump said that Trump International Hotel in Toronto was, quote, virtually sold out of units in a 2009 interview. In reality, less than 25 percent of its units have been sold, according to a 2016 bankruptcy filing. And the Trump name is off that property as well.

And then there is a planned tower in Tampa. Donald Trump said in 2007 the building sold out of units. In reality, the developers failed to sell a minimum of 70 percent of units there and the project was never even built.

OUTFRONT now, a reporter for "ProPublica" and WNYC's "Trump Incorporated" podcast, Heather Vogel. She was a lead reporter on this investigation.

Heather, welcome.

This investigation shows these were not one-offs or mistakes. This is clearly how the Trump family did business, but I have to ask, did anything that you found that the Trumps did, did any of it fall into the category of illegal?

HEATHER VOGEL, REPORTER, PROPUBLICA: Well, that is a very good question. Thanks, first of all, for having me on.

We spoke with one federal prosecutor who said that a lot of the behaviors that we were finding and describing, this pattern as having, were things that he had seen in fraud investigations and in fraud prosecutions before.

Now, fraud is not uncommon in real estate, as many people know, but it is illegal, and there were people who were hurt by these misstatements that were made. [19:50:04] And we also know that in New York, that prosecutors --

there were prosecutors who had wanted to indict the Trump children for making theses sorts of misstatements in the SoHo project.

TAPPER: And it wasn't just misleading sales figures. The Trump family suggested that they were developers or partners or equity owners in various projects when in fact they were not.

Take a listen to Mr. Trump touting a project in Waikiki during a season finale of "The Apprentice."

(BEGIN VIDEO CLIP)

TRUMP: Honolulu's world famous Waikiki Beach is one of the most popular tourist destinations on earth. That's why I'm building the magnificent Trump International Hotel and Tower here. The Trump International Hotel and Tower will feature just over 460 units with state-of-the-art amenities and breathtaking views.

(END VIDEO CLIP)

TAPPER: He later told "The Wall Street Journal," quote, this building is largely opened by me and being developed by me, unquote. That wasn't true either?

VOGEL: Right. Exactly. What we found was that the Trumps and Donald Trump would tend to inflate not only the sales figures, but also their own stake, ownership stake or involvement in the deal and role. They were typically not the developer, but they would say things that would lead people to believe that they were either the developer or that they had put a lot of their own money into the project.

And that was something that some buyers said gave them false confidence about these projects because many of them went belly up.

TAPPER: How lucrative were these projects and how much money could have been at stake here?

VOGEL: Well, we are talking, in terms of the projects, these are hundreds of millions of dollars. In terms of the Trumps' take, there is not as much information about that. A lot of these documents are not public.

But we found in Panama that Trump likely took between $30 million and $55 million from that deal. Remember, this is a deal that went bankrupt. So we're talking at least tens of millions of dollars.

TAPPER: Heather Vogel, thank you so much. Amazing work. Appreciate it.

VOGEL: Thank you very much.

TAPPER: OUTFRONT next, Michael Cohen saying he will campaign against the man he once said he would take a bullet for. Stay with us.

(COMMERCIAL BREAK) [19:56:31] TAPPER: As news breaks about the president's former fixer Michael Cohen meeting with the Mueller team and with officials investigating the Trump family business and charity, the president's former fixer is also now threatening to take on his former boss on the campaign trail.

M.J. Lee is OUTFRONT.

(BEGIN VIDEOTAPE)

REPORTER: Mr. Cohen, hi. Are you meeting with special counsel?

M.J. LEE, CNN NATIONAL POLITICAL REPORTER (voice-over): An extraordinary transformation for a man who once said he would take a bullet for Donald Trump.

MICHAEL COHEN, FORMER TRUMP ATTORNEY: The next president of the United States --

LEE: Michael Cohen, the president's former attorney, was for years Trump's most loyal supporter.

Not anymore. Cohen reportedly changing his party affiliation from Republican back to Democratic. A source telling CNN he is now willing to campaign against his former boss to help the Democratic Party in the midterms and the 2020 election.

Cohen tweeting this weekend: The midterm elections might be the most important vote in our lifetime. Get out and vote.

TRUMP: Hello, Mississippi.

LEE: Trump returning the hostility, slamming his former fixer as a low-level PR person who only did small legal work. Trump telling "The Associated Press", he wasn't in trouble for what he did for me. He was in trouble for what he did for other people. He wants to try to get a little bit lighter sentence for what he did.

But in fact, Cohen pleaded guilty to eight criminal counts in August. They included campaign finance violations related to his efforts to silence porn star Stormy Daniels and former Playboy model Karen McDougal. Cohen saying he did so as Trump's direction. Trump denied having affairs with either woman.

COHEN: It's disgraceful.

LEE: The public feud between Cohen and Trump, a drastic 180 from the previously ironclad relationship.

COHEN: I'll do anything to protect Mr. Trump. I am obviously very loyal and very dedicated to Mr. Trump.

LEE: The president defending his former attorney as recently as April after the FBI raided Cohen's Manhattan home, hotel room, and office.

TRUMP: So, I just heard that they broke into the office of one of my personal attorneys. Good man. And it's a disgraceful situation. It's a total witch hunt. I said that is now in a whole new level of unfairness.

LEE: But as Cohen fell deeper into legal trouble, Trump began changing his tune.

REPORTER: Mr. President --

REPORTER: Are you worried Michael Cohen might flip?

TRUMP: Look, I did nothing wrong. This stuff would have come out a long time ago. I did nothing wrong.

REPORTER: Is he still your friend?

TRUMP: I always like, Michael. I haven't spoken to Michael in a long time.

LEE: As he awaits his sentencing in December, according to his lawyers, Cohen is speaking to investigators, including from special counsel Robert Mueller's office, likely an attempt to receive shorter prison time.

(END VIDEOTAPE)

TAPPER: And, M.J., Cohen is talking about the possibility of hitting the campaign trail, which obviously begs the question, is anyone asking for his help?

LEE: Well, Jake, yes, he is willing to hit the campaign trail, but it is probably not likely we will see him out on the road until his sentencing in December. Keep in mind, a federal judge has limited where he can travel in the country.

You could also imagine not all Democrats are necessarily going to be comfortable with this idea of Michael Cohen becoming their new surrogate. I should note, we did ask the Democratic National Committee for comment on this story, and they declined to comment -- Jake.

TAPPER: You know who I bet would like him? Avenatti. Think about it. Think about it.

LEE: Two Michaels.

TAPPER: Yes. M.J. Lee, thanks so much.

Thanks for joining us.

"AC360" starts now.