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EARLY START

Mueller's Moves: Just the Beginning?; White House Minimizes Manafort Charges; Russian Reaction to Mueller's Investigation. Aired 4-4:30a ET

Aired October 31, 2017 - 04:00   ET

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


[04:00:13] ALEX MARQUARDT, CNN ANCHOR: A guilty plea, two indictments and a lot of tension in the White House. The first big moves by the Russia special counsel suggest a widening net. Could more dominos be ready to fall?

Good morning and welcome to EARLY START. I'm Alex Marquardt.

RICHARD ROMANS, CNN ANCHOR: Really nice to see you here today.

MARQUARDT: Thanks for having me.

ROMANS: Nice to see you. I'm Christine Romans. Good morning, everyone.

It is Tuesday, October 31st, it is Halloween. It is 4:00 a.m. in the East.

The White House this morning in full damage control mode after the surest sign yet special counsel Robert Mueller is focused on collusion in his investigation of Russian interference in the U.S. election.

A Republican close to the White House says President Trump is, quote, seething. Aides are urgently warning the president not to lash out at Mueller after the indictments Monday of senior campaign aides, Paul Manafort and his lieutenant Rick Gates.

MARQUARDT: Those charges weren't a surprise but what was a shock was the revelation that George Papadopoulos pleaded guilty earlier this month makes statements to the FBI. Papadopoulos admitted to lying to agents about the timing of his contact with Russians. The complaint against Papadopoulos outlines a meeting he had with a Russia-linked professor, promising dirt on Hillary Clinton.

ROMANS: It also lays out Papadopoulos' attempts to set up meetings between the campaign and top Russian officials. Despite White House attempts to down play Papadopoulos, he was e-mailing with campaign manager Paul Manafort. And according to "The Washington Post", he was also emailing with another campaign manager Corey Lewandowski, among others.

MARQUARDT: Now, the revelation that Papadopoulos is cooperating with the FBI is heightening the unease among Trump's allies.

Our coverage begins with CNN's Pamela Brown in Washington. (BEGIN VIDEOTAPE)

PAMELA BROWN, CNN JUSTICE & SUPREME COURT CORRESPONDENT: Well, good morning, Christine and Alex.

Monday's charges show the Mueller investigation is zeroing in on collusion with Russia and the 2016 campaign, as well as crimes committed even before the campaign.

George Papadopoulos, a former foreign policy adviser to the Trump campaign pleaded guilty on October 5th to making false statements to the FBI about his contacts with Russia, and according to records unsealed Monday, the FBI alleges Papadopoulos falsely described his interactions with a certain foreign contact who discussed dirt related e-mails concerning Trump's opponent, Hillary Clinton.

One of the court documents describes an email sent by Papadopoulos to a high-ranking campaign official who a source says is former campaign chairman Paul Manafort. And the email had a subject line: request from Russia to meet Mr. Trump. It went on to allegedly say Russia was eager to meet with the candidate and had been reaching out. The documents alleged that campaign official, Manafort, forwarded the e- mail to another official, Rick Gates.

That email said, we need someone to communicate that DT is not doing these trips. It should be someone low level in the campaign so as not to send any signal.

In another e-mail, a campaign supervisor allegedly tells Papadopoulos: I would encourage you and another policy adviser to the campaign to make the trip if it is feasible.

That trip to Russia never happened according to the officials -- Christine and Alex.

(END VIDEOTAPE)

ROMANS: OK. Thank you so much for that, Pamela.

Paul Manafort and his aide Rick Gates now under house arrest. A federal judge also ordering their passports confiscated, setting bond at $10 million for Manafort, $5 million for Gates. The indictment against the men contains 12 counts, including conspiracy to launder money and tax fraud. Documents say some of the charges stem from millions Manafort earned, much of it lobbying for Ukraine's pro-Russia government, which officials say he then laundered through offshore accounts.

MARQUARDT: Both men pleaded not guilty on Monday, denying any wrongdoing. The charges stretch from the mid-2000s and to Manafort's time as chairman of the Trump campaign. The accusations do not, in fact, relate directly to the Trump campaign but it is possible that the special counsel could add more charges later. As Pamela Brown mentioned, the sources say that Manafort and Gates discussed e-mails from Papadopoulos, encouraging that outreach to the Russians. ROMANS: All right. The West Wing quickly distancing itself from all

of these developments. A source close to the White House says of Manafort and Gates, quote, these guys are bad guys when they started. They were bad guys when they left.

The president also tweeting, sorry, but this is years ago before Paul Manafort was part of the Trump campaign. But why aren't crooked Hillary and the Dem's the focus? That's one, two, three, four, five questions there. Three minutes later, he added, also, there is no collusion.

MARQUARDT: That was before the news of the George Papadopoulos' guilty plea. White House response since then, a rare day-long stretch of silence on the Trump Twitter account. White House lawyer Ty Cobb says the president has not responded to Papadopoulos' guilty plea because he, quote, doesn't know him.

[04:05:03] Cobb admits that the two men, quote, may have been together one time in history.

ROMANS: That one time was at a national security meeting during the campaign. A few days earlier, candidate Trump had this to say about the man his lawyer says he doesn't know.

(BEGIN AUDIO CLIP)

DONALD TRUMP, THEN-PRESIDENTIAL CANDIDATE: George Papadopoulos, he's an oil and energy consultant, excellent guy.

(END AUDIO CLIP)

ROMANS: White House press secretary working to minimize his role in the campaign.

(BEGIN VIDEO CLIP)

REPORTER: Can you just explain what George Papadopoulos' role with the campaign was?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: It was extremely limited. It was a volunteer position, and again, no activity was ever done in an official capacity on behalf of the campaign in that regard.

REPORTER: What about the outreach to the campaign officials to try to put together this --

SANDERS: You mean the outreach that was repeatedly denied?

(CROSSTALK)

SANDERS: We're not going to take any action on that.

(END VIDEO CLIP)

MARQUARDT: Despite Sanders' claim that Papadopoulos court filing suggests that he was acting with the campaign's blessing, a campaign e-mail urges him to go ahead with the propose August meeting with Russia officials saying, I would encourage you and another foreign policy adviser to make the trip if it is feasible.

"The Washington Post" reports that e-mail came from Trump campaign national co-chairman Sam Clovis.

ROMANS: All right. Steve Bannon weighing in on the Russian probe. A source close to the former White House chief strategist tells CNN Bannon is pushing President Trump to fight back aggressively against Robert Mueller. We've learned Bannon wants the White House to launch a campaign against the special counsel.

MARQUARDT: Among Bannon's suggestions: press Republicans to cut funding to the special council and publicly debate Mueller's mandate. He's also pushing to slow document production, go on a massive PR campaign and generally try to get Capitol Hill to engage. The source tells CNN that the play nice strategy being pressed by the president, by his players, is, quote, an epic failure.

Some Trump allies mentioned the possibility of firing Mueller, but one of the president's attorneys tells CNN there are no plans to do so.

ROMANS: Russia's reaction to all these developments in this Russia investigation, let's bring in CNN's Oren Liebermann this morning live in Moscow.

Good morning.

What is the view from Moscow?

OREN LIEBERMANN, CNN CORRESPONDENT: Christine, we're seeing a bit of the first reaction from Russian officials. An outspoken Russian politician complimenting Fox News' coverage of the latest from the Robert Mueller investigation, saying, look, there's no evidence of collusion as Fox News, and basically dismissing everything else.

We've also seen a little bit from the foreign ministry spokeswoman, where she points to a very specific line, a half line really in the indictment against Manafort and Gates. What it references the position of Yulia Tymoshenko and says she was the former Ukrainian president, a position she didn't hold. The foreign minister spokesman points out to that, dismisses that line and in extension, and by extension dismisses the rest of the investigation and the indictments there.

And that's likely to continue to be the Russian position. They've never admitted or never acknowledged any election meddling despite unanimous agreement by the U.S. intelligence agency that Russia did meddle in the election and they say there's never been any collusion, that position not likely to change with the latest in the investigation.

We will have a chance later on today, we expect, to speak with the Kremlin spokesperson Dmitry Peskov. So, we'll have a chance to get his reaction. But again, it's not likely to change from Russia's position.. They're not about to say yes, we did it. Yes, we were election meddling.

So, they'll continue what has been a repeated denial of any of the accusations. They're also likely to point out that George Papadopoulos who was mentioned specifically in trying to arrange a meeting never actually, according to his guilty plea, spoke with Russian officials.

So, we'll have a better sent of that after we speak to the Kremlin spokesperson -- Christine.

ROMANS: So many new details from the ongoing FBI investigation. Also, many of the tech companies will be heading to Capitol Hill this week to talk about Russian ad buys and Russian troll farms that work in social media and America, just a fascinating picture that is shaping up. Get back to us if you get some response from Peskov.

Thanks, Oren.

MARQUARDT: And President Putin has shown very little indication in the past of wanting to get involved, really just letting it play out and let all this confusion play out here in the states.

All right. Well, Democrats are also feeling the ripple effects of the first criminal charges in this Mueller investigation. Democratic power broker Tony Podesta says he is stepping aside from the Podesta Group, the Washington lobbying firm that he founded with a brother of the former Clinton campaign chairman John Podesta. Tony Podesta represented a range of clients here in the U.S. and abroad.

ROMANS: CNN earlier this year the firm failed to fully disclose its work for a Ukrainian group with ties to former Trump campaign manager of chairman, Paul Manafort. Podesta's firm has since amended that paperwork. The firm also shows up in the Manafort indictment unsealed Monday described as, quote, company B.

[04:10:01] All right. Russian meddling reached more than half the U.S. voting population, and that was through Facebook alone. How widespread was the influence of Russian trolls in your social media account? Details next.

(COMMERCIAL BREAK)

ROMANS: Welcome back. Fourteen minutes past the hour.

Facebook has news for lawmakers, Russian-linked accounts reached 126 million Americans, 126 million of us. Lawyers for Facebook, Twitter and Google head to Capitol Hill tomorrow. They facing tough questions about Russian meddling during the 2016 election and the scope is greater than originally thought.

On Facebook, more than half -- more than half the U.S. voting population saw posts from a Kremlin-linked troll farm. That's according to the company's written testimony obtained by CNN. Twenty- nine million Americans saw the post directly, 126 million through sharing. [04:15:00] Meanwhile, Twitter identified about 2,700 accounts linked

to the same troll farm. Now, Facebook and Twitter stress this represents a tiny fraction of overall content. But it was there, and both these companies face harsh criticism for allowing misinformation to run rampant during that election, especially Facebook. You know, Facebook is being called a haven for fake news.

The Russian posts promoted divisive campaigns on issues like race, immigration and gun rights. The goal: to amplify political discord during the 2016 presidential campaign.

MARQUARDT: Now, the White House Chief of Staff John Kelly says a lack of compromise was the root cause of the Civil War. In a FOX News interview, he was asked about removal of historic but controversial plaques honoring George Washington and General Robert E. Lee.

(BEGIN VIDEO CLIP)

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: Robert E. Lee was an honorable man. He was a man that gave up his country to fight for his state, which in 150 years ago was more important than country. It was always loyal to the state first back in those days. Now, we're -- it's different today. But the lack of an ability to compromise led to the civil war. And men and women of good faith on both sides made their stand.

(END VIDEO CLIP)

ROMANS: On both sides, Kelly said strikingly similar to President Trump's Charlottesville. Kelly, who's from Boston, made no mention of slavery, which was a central conflict in the Civil War.

MARQUARDT: "House of Cards" crumbling down. The show is set to wrap after its next sixth season. Did sexual misconduct accusations against actor Kevin Spacey factor in that decision?

(COMMERCIAL BREAK)

[04:21:07] ROMANS: All right. Breaking overnight in Salt Lake City, one person shot and killed just off the campus of the University of Utah. Police say the suspected gunman Austin Boutain is considered armed and dangerous. Our affiliate KSL says police have been combing the foothills around the university into the early morning hours. The victim was in a vehicle when the fatal shots were fired. We're going to bring you more details as they become available.

MARQUARDT: And the FBI is now looking into a $300 million contract with Whitefish Energy that was struck with Puerto Rico's power authority to rebuild the island's power grid after Hurricane Maria hit. Now, members of Congress have raised concern over the way that the contract was awarded to the small Montana firm. It turns out that the company has ties to the Trump administration.

CNN's Leyla Santiago has more from San Juan.

(BEGIN VIDEOTAPE) LEYLA SANTIAGO, CNN CORRESPONDENT: Christine and Alex, the FBI now wants more answers on this. They have opened a preliminary inquiry to find out more about that $300 million deal between Whitefish Energy and Puerto Rico's power authority.

Now, the governor is still standing by his decision to call for the termination of that contract. He says he has no evidence of any wrongdoing but he says this is all become a distraction. A distraction, he says, because of controversy.

Many have questioned how a 2-year-old company based out of Montana with very few employees landed such a big deal with such big responsibilities to restore Puerto Rico's power grid. And I got to tell you, as we were out and about talking to people today, we definitely sensed the frustration. We even talked to subcontractors of Whitefish and they tell us they're frustrated because of what any believe are politics getting in the way, what they believe are delays in the progress.

And for so many on this island, of 3.5 million U.S. citizens, now the question is, where do we go from here? So, many are waiting to see what will happen next when it comes to restoring energy and power for the people on this island, nearly six weeks after Hurricane Maria struck -- Christine, Alex.

(END VIDEOTAPE)

ROMANS: All right. Leyla, we know you'll continue to follow that for us.

News here on the second suspect in the Benghazi attacks was custody this morning. U.S. forces captured Mustafa Al-Imam in Libya for his alleged role in the 2012 attacks that killed four Americans, including Ambassador Christopher Stevens. The U.S. government has video of Al- Imam present at one of the two sites of the attack.

MARQUARDT: An official tells us that he has since been flown to a U.S. Navy ship. He's expected to be transferred to the U.S. to face federal prosecution. It's unclear at this time when that will take place. His capture comes as the suspected mastermind of the attack is currently on trial in Washington.

ROMANS: The defense resting its case in the corruption trial against New Jersey Senator Bob Menendez and a wealthy doctor, this after a judge refused their lawyers' request to declare a mistrial based on the judge's rulings and comments. That means neither Menendez nor Dr. Salomon Melgen will testify. The case could go to the jury later this week.

MARQUARDT: The attorneys and judge are expected to meet today for a conference outside the presence of a jury. Prosecutors say Menendez accepted extravagant trips and six-figure campaign contributions in exchange for getting the Obama administration to help Dr. Melgen with his business disputes. But men deny any wrongdoing.

ROMANS: "House of Cards" is being canceled after its sixth season. The announcement comes less than a day after the star Kevin Spacey was accused of sexual misconduct by "Star Trek Discovery" actor Anthony Rapp. Rapp says he was 14 years old at the time. A source tells CNN the decision to end the series and the allegations facing Spacey are not related.

[04:25:04] MARQUARDT: And Netflix did not offer an official statement on the show's cancellation, but it did address the allegations in a joint statement with a company that produces the series, saying: Executives traveled to Baltimore to make sure that the cast and crew feel safe and supported. They said that, as scheduled, Spacey was not working on set right now.

The White House trying to explain away the indictment of the president's campaign chairman.

(BEGIN VIDEO CLIP)

SANDERS: Today's announcement has nothing to do with the president, has nothing to do with the president's campaign or campaign activity.

(END VIDEO CLIP)

MARQUARDT: Even if that's true, it doesn't address the guilty plea by another campaign advisor who's now cooperating with investigators.

(COMMERCIAL BREAK)

ROMANS: The president is seething. His former campaign manager indicted, a former campaign advisor pleading guilty and now helping the feds. What's in store for the special counsel and the White House?

Welcome back to EARLY START this morning. I'm Christine Romans.

MARQUARDT: And I'm Alex Marquardt.