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Charged in College Admissions Cheating Scheme; Planes Grounded after Ethiopian Airlines Crash; Interview with Rep. Ted Lieu (D), Ca. on Admissions Bribery Scam; Paul Manafort Faces Sentencing In Second Case Tomorrow; White House Won't Rule Out Pardoning Ex-Campaign Chairman. Aired 5-6p ET

Aired March 12, 2019 - 17:00   ET

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


[17:00:00]

JAKE TAPPER, CNN HOST: That's one of the reasons why people don't often do it.

Thanks, everyone, for being here.

Follow me on Facebook and Twitter @JakeTapper. Tweet the show @TheLeadCNN. Our coverage on CNN continues right now. Thanks for watching.

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WOLF BLITZER, CNN HOST: Happening now: breaking news. Price of admission: a hearing is set for this hour as the Justice Department charges dozens of suspects, including actresses who starred in "Desperate Housewives," and "Full House" with conspiring to get wealthy students into top universities.

Grounded worldwide: dozens of countries ground Boeing 737 MAX aircraft following a horrific weekend crash. But U.S. regulators are resisting calls to do the same as President Trump muddies the waters with a perplexing tweet.

Probing Trump loans: New York State's attorney general subpoenas two banks for records of loans, mortgages and credit lines issued to the Trump Organization for hotels and a golf course.

And ready to run: former vice president Biden gives the clearest signal yet that he is ready to jump into the 2020 race and former congressman Beto O'Rourke may also announce his campaign.

Could others soon follow?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

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

Celebrity suspects are due in court this hour as the Justice Department announces charges against dozens of parents, sports coaches and college press prep executives in what it calls a nationwide conspiracy and bribery scheme to get students admitted into prestigious colleges.

Among those charged are the actress Felicity Huffman, known for her role in "Desperate Housewives," and Lori Laughlin, who starred in "Full House."

Also tonight, the European Union throws its weight behind an international push to ground Boeing 737 MAX aircraft after Sunday's catastrophic crash in Ethiopia, the second in five months. But U.S. regulators are resisting calls to act and U.S. airlines are still operating the jet while President Trump confuses the issue by complaining publicly that airplanes, in his words, "are becoming far too complex to fly."

I'll speak with congressman Ted Lieu of the Judiciary Committee and our correspondents and analysts will have full coverage of the day's top stories.

First, the stunning college admission scandal just unveiled by federal prosecutors. CNN's Erica Hill is following that for us.

Erica, this was a very elaborate scheme. Give us the latest.

ERICA HILL, CNN ANCHOR: It was an elaborate scheme and the details are being met with both disbelief and disgust. So what we heard today is that 50 people are now charged in this elaborate scheme, 33 of those 50 are parents, who, according to this complaint of 200-plus pages, paid a man who ran a business to essentially help their children cheat their way into college.

(BEGIN VIDEO CLIP)

ANDREW LELLING, U.S. ATTORNEY, DISTRICT OF MASSACHUSETTS: The parents charged today, despite already being able to give their children every legitimate advantage in the college admissions game, instead chose to corrupt and illegally manipulate the system for their benefit.

We are not talking about donating a building so that a school's more likely to you're your son or daughter. We're talking about deception and fraud, fake test scores, fake athletic credentials, fake photographs, bribed college officials.

(END VIDEO CLIP)

HILL: So you hear some of the details there. The man behind this is William Rick Singer, who today pleaded guilty to racketeering, money laundering, conspiracy and obstruction of justice. He ran both a college consulting business and also a fake foundation and offered parents a couple of choices.

They could get help for their kids to cheat on SATs and ACTS, even going so far as to encourage the parents to get documentation from a therapist saying that their child needed extra time to take tests to facilitate cheating, perhaps someone else taking that test.

Or they could also, in using his connections with different university coaches, exploit those connections to have their child admitted as being on a sports team, in some cases for sports they didn't even play. Here's a little bit more of what we learned this afternoon.

(BEGIN VIDEO CLIP)

LELLING: In many instances, Singer helped parents take staged photographs of their children engaged in particular sports. Other times Singer and his associated used stock photos that they pulled off the Internet, sometimes Photoshopping the face of the child onto the picture of the athlete and submitting it in support of the applications for these children to elite schools.

(END VIDEO CLIP)

HILL: Nine coaches are charged here. Of the schools, only --

[17:05:00]

HILL: -- one administrator was charged at USC; the other schools, in many cases, expressing surprising, talking about they'll be launching their own investigations.

But it's some of the big names, two of them in particular, that are really grabbing headlines at this hour. Actresses Felicity Huffman, who allegedly, according to the complaint, she was arrested this morning and paid $15,000 to help her daughter cheat on an entrance exam.

Also Lori Laughlin, who is expected to land back in Los Angeles at any moment now. She and her husband are also mentioned in this complaint that they tried to use these services to get their two daughters into USC, even noting that one of them in an email in the complaint her father saying she was at the low end of the admissions there.

But the complaint says that the parents wanted to have or allegedly, with the help of this company, were trying to get their daughters into USC as members of the crew team. It is important to point out that neither one of them participated in the sport.

BLITZER: It is pretty shocking, all these developments. I take it none of the children are being charged.

HILL: You're right. None of them are being charged and that was brought up this morning at the press conference. They said none of the children are being charged at this time. They did note, however, that the involvement of the students actually was arranged.

Some parents going to great lengths so their children would not be aware of what was happening; while there was also at least one who was on a call actively discussing some of the options.

BLITZER: Erica Hill reporting for us, thanks very much.

I want to get to more on all of this. CNN's Nick Watt is joining us. He is outside the federal courthouse in Los Angeles, where the actress, Felicity Huffman, is due to appear.

Nick, tell us what's going on. What have you learned?

NICK WATT, CNN ANCHOR: This court session was supposed to begin at the top of the hour at 2:00 pm here in Los Angeles. It is a little bit delayed. We are not sure by how long.

But William H. Macy, Felicity Huffman's husband, is here. He walked past reporters. When asked if he would like to comment, all he said was no. Now he is not actually named in any of the charges but in the charge relating to his wife, Felicity Huffman, the cooperating witness number 1 claims that he met with Felicity Huffman and her spouse. So we assume that is William H. Macy, in their Los Angeles home to discuss this alleged scam.

As Erica just said, they apparently paid $15,000 for one of their daughters to be helped in a fairly significant way on her test. They also then, a year later, were involved in discussing whether they want to do the same for their second child. In the end, they did not.

The court papers detail some concern that they had about their younger daughter's tutor tweeting and realizing that, in fact, she was involved in some sort of scam because her scores couldn't possibly have gone up by that much.

Now you mentioned Lori Laughlin; she is also expected to be landing here at LAX sometime this afternoon. We are told she will hand herself in. Now her husband, Mossimo Giannulli, is also going to be in court.

Now the court documents relating to this case are quite staggering. Apparently this couple paid this firm half a million dollars to get both of their daughters into USC as coxswains on the crew team, although neither of them were involved in crew at all prior to this.

And apparently Giannulli also, for his second daughter, he met with a counselor at her high school who became suspicious that crew was on her college application. He met with the counselor and reassured that counselor, no, she does crew; don't worry.

He also apparently sent photographs to this firm that allegedly was doing this fraudulent activity. He sent photographs of both of his daughters on rowing machines to back up the fact that they were, in fact, rowers.

As I say, that couple allegedly paid $0.5 million.

Also in court we're going to have an exam administrator here in West Hollywood, where a number of these kids sat these exams and also from USC, one of the athletic directors and also the coach and assistant coach of the women's soccer teams.

They are also appearing this courthouse, Wolf, this afternoon. Back to you.

BLITZER: Several major universities named in this indictment, Yale University, Wake Forest University, University of Texas/Austin, Stanford University and Georgetown University, a lot of major universities that apparently were attacked in this kind of scheme.

All right. Thanks very much, Nick. We'll get back to you.

Other important news we are following right now, some 3 dozen countries have now acted to ground Boeing 737 MAX aircraft following a devastating weekend crash in Ethiopia. But U.S. regulators so far --

[17:10:00]

BLITZER: -- are resisting the push to do the same. And U.S. airlines continue to operate the jet. It's become a political issue here in Washington as well. I want to go to our chief White House correspondent, Jim Acosta.

Jim, President Trump weighed in with a rather strange tweet.

JIM ACOSTA, CNN SR. WHITE HOUSE CORRESPONDENT: He certainly did. Trump may have inadvertently undermined confidence in the nation's aviation system when he tweeted that he thinks commercial airliners are too technologically advanced.

The president's tweet certainly got a reaction out of Boeing's CEO, who called the White House after Mr. Trump's comments.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): With countries around the world except for the U.S. grounding the use Boeing 737 MAX 8 jets after the crash of an Ethiopian Airlines plane over the weekend, President Trump weighed in, even though the investigation into what happened is barely underway, tweeting, "Airplanes are becoming far too complex to fly. Pilots are no longer needed but rather computer scientists from MIT. I see it all the time in many products. Always seeking to go one necessary step further when often old and simpler is far better. Split second decisions are needed and the complexity creates danger. All of this for great cost yet very little gain. I don't know about you but I don't want Albert Einstein to be my pilot."

That tweet prompted a phone call from Boeing's CEO to the president about his remarks. The White House later expressed caution about the cause of the crash.

(BEGIN VIDEO CLIP)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: Certainly this is very early in the process. I think the first place we have to start is by offering our condolences.

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ACOSTA (voice-over): Acting Defense Secretary Patrick Shanahan, a former Boeing executive, was asked whether the company's planes are safe.

PATRICK SHANAHAN, ACTING SECRETARY OF DEFENSE: These situations, as you well know, are very serious. And let's let the FAA and others take command of the situation and trust that part of the process.

UNIDENTIFIED FEMALE: Do you think the flight should be grounded right now, sir --

SHANAHAN: -- good to see everybody.

ACOSTA (voice-over): The White House is also back on its heels in response to a new book, "Kushner Inc," which alleges the president wanted Jared Kushner and Ivanka Trump out of the White House.

"The New York Times" quotes the president in the book, saying, "Get rid of my kids. Get them back to New York."

Ivanka Trump is quoted as defending her father's response to the white supremacist violence in Charlottesville, saying, quote, "My dad is not a racist and he didn't mean any of it."

The president's handling of Charlottesville is clearly a sore subject at the White House.

ACOSTA: The president --

SANDERS: Sorry, Jim.

(CROSSTALK)

ACOSTA: -- after Charlottesville saying that there are very fine people on both sides in Charlottesville, essentially suggesting that there are very fine people in the Nazis.

SANDERS: That's not at all what the president was stating, not then, not at any point.

ACOSTA (voice-over): Press secretary Sarah Sanders said about the new book, "It is sad but not surprising the media would spend time promoting a book based on shady and anonymous sources and false information."

The White House is also doing damage control after former vice president Dick Cheney blasted President Trump for his past comments criticizing the NATO alliance.

"The Washington Post" reported it happened over the weekend at a private retreat during a discussion between Cheney and Vice President Pence. Cheney told Pence, "We're getting into a situation when our friends and allies around the world that we depend upon are going to lack confidence in us."

A spokesperson for Pence says he defended the president, saying, quote, "The vice president reaffirmed the U.S.' unwavering commitment to the alliance and also offered an unapologetic defense for requiring our allies to live up to the commitments they made for our collective security."

But in a strange twist, the White House is standing by House Speaker Nancy Pelosi, who revealed she is not in favor of impeaching the president without overwhelming evidence of wrongdoing.

SANDERS: I think Nancy Pelosi has clearly already started to lose control of her party. I'm glad that she sees what the rest of us see and that there's no reason of cause for impeachment.

(END VIDEOTAPE)

ACOSTA: Now there may be other legal trouble brewing for the president as the New York attorney general has issued subpoenas for bank records, details how Mr. Trump secured large loans in recent years. The subpoenas come after the president's former personal attorney, Michael Cohen, accused Mr. Trump of inflating his assets in order to obtain loans from Deutsche Bank. It's another question for the president that we'll have to get an answer to.

BLITZER: Lots of questions. Jim Acosta, thanks very much.

Joining us now Democratic congressman Ted Lieu of California. He is a member of the Judiciary and the Foreign Affairs Committees.

Congressman, thanks so much for joining us. We have a lot to discuss. But I quickly want to start with this college admission scandal. It's the Justice Department's largest ever college admissions prosecution.

What are the implications of this?

REP. TED LIEU (D), CALIFORNIA: Thank you, Wolf, for your question. Let me first commend the Department of Justice and FBI for doing this investigation that reveals widespread fraud among rich and wealthy people getting their kids into elite colleges.

It is stunning to me that you had over 30 parents involved, multiple colleges, and these parents were making direct bribes to college officials and coaches and they should be prosecuted to the fullest extent of the law.

At the same time, all these colleges and universities need to do investigations and institute internal processes to make sure that this fraud doesn't happen again in the future.

BLITZER: As far as you know, is your district affected?

I know you represent parts of Los Angeles, with UCLA --

[17:15:00]

BLITZER: -- USC, other universities in the area.

LIEU: It wouldn't surprise me if they were affected by this. I don't know all of the people who were involved in this scandal. Regardless of who it is and where they live and how wealthy they are, they should all be prosecuted to the fullest extent of the law.

BLITZER: Yes, they certainly should be.

All right. Let's talk about the fallout from Sunday's fatal airplane crash, the second of this new Boeing model.

Are you comfortable -- you do a lot of flying between Los Angeles and here in Washington.

Are you comfortable flying on a Boeing 737 MAX 8?

LIEU: Let me first say that Boeing has a long tradition of making safe planes that are reliable.

However, we do have two crashes within six months of a very specific model of a Boeing 737, the MAX series. And I would feel that would be prudent if those planes were grounded until we determine the second cause of the crash.

BLITZER: Yes, out of an abundance of caution, you would think, just like the Europeans, so many countries in Asia, elsewhere around the world, they just want to make sure it's safe. They would agree to at least stop flying these planes and figure out what happened.

I assume you support that.

LIEU: I do. I'm also a computer science major and I understand how complex computers can be. And sometimes you don't know the unintended consequences of certain software lines of code and things that may go wrong.

So until we know what happened with this second crash, I do think it would be prudent to temporarily ground the MAX 737 plane.

BLITZER: Let's turn to the work of your Judiciary Committee. committee. This is where impeachment proceedings would have to begin in the House of Representatives.

How do you respond to the House Speaker Nancy Pelosi saying she is not for impeachment?

LIEU: I agree with Speaker Pelosi when she made that statement. She also said in the same exact paragraph that she is not for impeachment as with compelling evidence with bipartisan support.

I agree with that sentiment and that's why in the House Judiciary Committee, we are doing the investigations. We're going to get witnesses to testify under oath. We're going to get documents. And our investigation is either going to exonerate Donald Trump, his family and his associates, or it won't. And then when we're done with that expedited, robust investigation, we'll have a conversation with the American people.

We'll see if we get the compelling bipartisan evidence. And based on the facts, we'll go forward. But we don't have all those facts yet and I agree with Speaker Pelosi's sentiment that it is too early to go forward with impeachment proceedings.

BLITZER: The New York state attorney general has subpoenaed two banks, Deutsche Bank and Investors Bank for Trump Organization records. What are the potential areas here of wrongdoing?

LIEU: Once again we see Donald Trump and his associates implicated in a wide array of scandals; for state actions such as this, I do note that the president cannot pardon anyone associated with violation of state crimes.

I also note again that nothing in the U.S. Constitution says that the president himself can't be indicted. And this is yet another step with another law enforcement agency looking at certain facts, trying to get information to see if our president and his associates are crooks.

BLITZER: The former acting attorney general, Matt Whitaker. is going to be back before your Judiciary Committee tomorrow. It will take place behind closed doors.

What is the committee hoping to learn from him in this follow-up interview?

LIEU: At the Judiciary Committee hearing in which Whitaker testified, he very specifically said that he did not have any conversations with Donald Trump about special counsel Mueller's investigation. That's appropriate. I'm glad he said that.

Then I asked him did he have any conversations with Donald Trump related to investigations out of the Southern District of New York and Mr. Whitaker said no.

Then if you look at public reporting afterwards, it appears that Donald Trump and Mr. Whitaker in fact did have conversations about investigations out of the Southern District of New York and either those reports are wrong or Mr. Whitaker made a statement that was not true to the Judiciary Committee.

We are going to find that out and have him clarify what he meant as well as some other issues that he talked about during the open hearing.

BLITZER: You'll let us know what goes on. We appreciate it very much. Congressman Ted Lieu, thank you.

LIEU: Thank you, Wolf.

BLITZER: Up next, celebrities caught up in an alleged college admission scam.

Why would the rich and famous resort to bribery and conspiracy to get kids into top schools?

And next, Trump campaign chairman Paul Manafort got a lighter than expected sentence from one federal judge.

What kind of sentence will he get tomorrow from the judge in the second case?

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[17:20:00]

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BLITZER: More now on the breaking news. Federal prosecutors say dozens of people, including celebrities, parents, university coaches and others engaged in a scheme to cheat, bribe and otherwise rig the college admissions process.

Let's get some analysis from our experts.

Susan Hennessey, the man at the center of this bribery scam, William Rick Singer, has already pleaded guilty.

What is he admitting to?

He's apparently cooperating with the FBI and the prosecution.

SUSAN HENNESSEY, FORMER NATIONAL SECURITY AGENCY ATTORNEY: So authorities have alleged what Singer has now admitted to. He's the founder of this college preparatory company, engaging in a wide- ranging conspiracy of fraud and and bribery in order to facilitate cheating on standardized testing, also falsify the status of these students as potential athletes.

[17:25:00]

HENNESSEY: People are sort of focused on the celebrity and privilege angle of this. But it really is a very serious conspiracy. They are being charged under what is called the Racketeer Influenced and Corrupt Organizations Act. It is commonly known as RICO. It is an organized crime statute.

So what federal law enforcement used RICO for is to go after big broad conspiracies like this where there are lots of different parts in order to charge all of those 15 individuals in this case as part of a single conspiracy.

BLITZER: Joey Jackson, what do we know about the charges involving the parents in this scheme, including these celebrities?

JOEY JACKSON, CNN LEGAL ANALYST: Let me say this, as a parent myself, having just gone through this, I can tell you why this is so wrong. We work with our children and we try to teach them the values of what to do and what's acceptable. We drill them from pre-K and kindergarten and then they get to middle school and we just work and work and work.

Just in high school, we are saying, listen, son, in my case, you got to do your academics. You're berating them every day. You got to do something else. Play an instrument. How about you do athletics, be a well rounded person, then you go on a tour throughout the country in terms of what school you can go to, what you can get into. You write these essays. You're constantly saying SAT, so important,

ACT, so important. You're drilling down on them. You're telling this is significant. No, you're not going out tonight. No, you're not watching TV.

And then you see this, right?

It's not about work ethic; it's not about doing the right thing, it's about writing a check. If the write a check, everything is going to be OK. So circling back to what we know about the apparent stars of this case is, taking Huffman's point, what she did was with her elder daughter, pay. And what you do is what are you paying for?

The essence of this whole scheme is it was broadbased. Whether you have somebody who is paying to take the ACT for you, the SAT, giving more time so that when you take the test, if you do take it, they can regrade and upgrade the child.

It is massive. The reality of it is that people who have worked hard and who have done all of the right things are not getting into these schools because other people have an opportunity through their privilege to get you in there. That's the shocking nature of this.

BLITZER: Yes. It is pretty -- it is very, very shocking.

Bianna, the Department of Justice says that this guy Singer asked clients to disguise bribe payments to various coaches at universities as charitable contributions. And many of these parents then went ahead and deducted these so-called charitable contributions from their taxes. That's an outrageous abuse of the system that's clearly illegal.

BIANNA GOLODRYGA, CNN CORRESPONDENT: Obviously all of this is illegal. It is immoral. It flies in the face of what the United States stands for. It's the antithesis of a meritocracy. At the very least, these parents should be taking parenting classes because they are not doing their children any favors.

Many of these children didn't even know, in this case, about their parents scheming to do this. But it speaks against what the country and the values of this country are. It is becoming harder and harder to have a level playing field for students, especially those who do not come from wealth, from famous parents, to make it up through graduating from high school and going on to college.

For this kind of scheme to be taking place at these levels, it's one thing for parents who can afford to have college prep programs that they paid for, that are legal or legitimate, that work with their children. Many people even question whether that's fair because not everybody can afford these programs.

But they are legal and they help their children learn how to take a test. This takes it to a completely different level, not to mention the fact that, as you said, major tax laws are broken as well. So this was a big shock.

BLITZER: Yes, Gloria, how does this into the current political climate?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, we are talking a lot about the corrupt system these days and corruption in the system. And I think this is a perfect example of it, where there's a big difference between the haves and the have nots. Democrats are talking about free tuition for all, some Democrats are, Bernie Sanders for example.

That begs the question of how you would get into college. There still is that question. And I think that what we are looking at is a playing field that is completely lopsided and understanding that these parents were willing to break the law -- and they had to knowingly do so -- because it's completely obvious, when they were deducting these so-called donations on their taxes that they knew what they were doing -- they were willing to break the law in order to get their child into some elite school.

And what does that tell you about the way we are living right now?

BLITZER: Sabrina, it is really outrageous what was going on. If you read this lengthy indictment, it is crazy.

[17:30:00]

SABRINA SIDDIQUI, WHITE HOUSE CORRESPONDENT, THE GUARDIAN: And it's impossible to have this conversation without pointing that it comes at a time when there has been an effort particularly on the right to go after race-based affirmative action programs under this misleading claim that their individuals are only going into college on the basis of race. When, in fact, those programs, while designed to boost minority groups, only factor race as one of many categories that they weigh when looking at someone's college admission application.

And it really cuts into or gets to the point that there are a privileged few they can buy their underperforming children access to the most elite institutions and, meanwhile, underserved communities, which are disproportionately made up of people of color are held to the highest of standards. And those students have to really prove they are, in fact, extraordinary in order to get this kind of opportunity.

BLITZER: If you read, and I know you have, Susan, this 23-page indictment, the scope of this is enormous, not only parents but coaches who were allegedly receiving bribes, administrators, others who were cheating on S.A.T. tests. You had fake people taking these tests for these kids. I mean, it's really shocking.

HENNESSEY: It is widespread criminality but the U.S. attorney on announcing these charges said, we are not talking about donating a building. We're talking about fraud. And he is right. We're talking about criminal behavior. But the scandal here is not just what's illegal. It's also what's legal and that's that incredibly wealthy people to make large donations to elite universities all the time for their students to be admitted. Jared Kushner, for example, by all reports, lacked the test scores and the grades to be admitted to Harvard University. His family pledged a $2.5 million donation and he was then admitted to the university.

And so even though that's totally illegal, it's completely playing by the rules. But do you think that we should acknowledge that, fundamentally, we're talking about the same behavior. It isn't any less unethical and isn't any less [INAUDIBLE].

BORGER: And Bianna was mentioning the whole testing issue, which is if you can afford to have your kids tutored, then great, because they might do better on the test. But if you can't or hire a consultant, as a lot of people do, to write their children's essays, then you'll have a leg up. So the entire system, whether it's the college boards, whether it's the admissions process, really, is something that now will be under a lot of scrutiny after this.

BLITZER: And these parents -- you know, he's going to say, Bianna, these parents, very often, they are not doing their kids and favors, trying to get them in to elite universities that they're clearly not qualified to attend, and they're going to suffer at these universities if they can't compete with these other kids who got in legitimately.

GOLODRYGA: Well, you know, I'm focused more on those other kids, I mean, what these parents did, whether or not their children were involved or were aware. I mean, that's one thing. And that's being a phony going into one of these prestigious schools. But think about the students that did everything the right way, that worked hard, they wrote their application letters and essays themselves that are likely athletes, unlike these fabricated stories of students that aren't athletes an did testing and went in for those exams that got bumped because of these other family members that lied their way to the top.

BLITZER: And what kind of punishment are these individuals named in this indictment, Joey, anticipating?

JOEY JACKSON, CNN LEGAL ANALYST: Yes, you know it's significant. And just backing up a bit, you know, it was talked about Susan as it related Rico [ph], right? And that is generally a statute created in the 70's to deal with the mob.

Now, the prosecutors have become very adept at applying that statute to any criminal enterprise. And make no mistake about it, this was and is a criminal enterprise. You're using businesses, whether it's a for-profit or not for-profit in a way to facilitate criminality. And so the statute, of course, provides for 20 years.

Now, we know under federal guidelines, that's not always the case because what you do under federal guideline structure, Wolf, is you look at any criminal history and then you look at the specific offense. And depending upon the background of the individual, that's how punishment is meted out, right? But, ultimately, punishment should be meted out. It sends a wrong message to those people who are working hard, playing by the rules, doing the wrong thing but are left behind because you can't write a $1.2 million check. That's a problem.

BLITZER: Let's move on to some other developments unfolding today. And, Susan, the New York State Attorney General has subpoenaed Deutsche Bank and Investors Bank for documents related to Trump properties, including a golf course among other buildings. What are they looking for? What might they find?

HENNESSEY: So this is a civil -- excuse me, this is a civil investigation, not a criminal investigation. With that said, whenever investigators start looking around, issuing these kinds of subpoenas, they may well find evidence of criminal misconduct.

There has been big questions about Deutsche Bank with respect to the Trump organization in part because this was the one financial institution that was willing to make large loans to Donald Trump at a period of time in which no other financial institution would take that risk because the President had declared bankruptcy so frequently and had defaulted on the loans.

[17:35:03]

Now, the President has attempted to say, you know, that investigating his business represents a red line. What we're seeing here is that state officials don't care and notably to the extent that do come across criminal conduct or that this civil investigation does lead there. The President is not empowered to pardon state offenses.

BLITZER: Tell us about the Michael Cohen connection to what the New York State Attorney General is now doing.

BORGER: I don't think it's any coincidence that this occurs after Michael Cohen's testimony before Congress. And Michael Cohen made it very clear that Trump and the Trump organization inflated his net worth when they wanted to be on Forbes 100 or whatever and deflated it when it came to insurance, et cetera. So we'll see how this plays into these loans for Trump properties.

But I do think that the prosecutors, the New York Attorney General and whoever else, maybe Southern District, were listening to Michael Cohen's testimony and saying, that's pretty interesting. Maybe we all look into that.

BLITZER: And the difference -- yes, go ahead.

JACKSON: Yes, just very briefly. I know Ms. James for quite some time. I can tell you that she's fair, she's motivated. I think, ultimately, based upon the hard work that she does in her office, she will unearth anything, whether it's civil and whether civil develops into criminal, I think she is the type of person you want on a case like this. And she'll give the fairness and equity it deserves, not so much as it relates to politics but as it relates to doing the right thing.

BLITZER: Sabrina, what --

GOLODRYGA: And it's another example of the scope of these investigations and the woes facing this President extend beyond just the Mueller investigation and Congress, the Southern District and then New York State as well. BLITZER: Yes. And remember, New York State, if somebody is charged and convicted, that individual cannot get a presidential pardon. So that's a whole different issue.

Sabrina, let's talk about this new book, Kushner Inc. The New York Times is reporting this book about Jared Kushner and Ivanka Trump that the President, according to this book, The Times is reporting the President told his then Chief of Staff John Kelly, quote, get rid of my kids. Get them back to New York. He thought that he didn't want them in the White House anymore.

A spokesperson for Kushner, Kushner's attorney, Abby Lowell, is denouncing the book, saying this, every point that Ms. Ward, the author, Vicky Ward, mentioned in what she called her fact-checking stage was entirely false. It seems she has written a book of fiction rather than a serious attempt to get the facts, correcting everything wrong would take too long and be pointless. What do you think of this?

SIDDIQUI: Well, the White House is, of course, dismissing the claims in this book and they have dealt with several books that try to peel back the curtain on a lot of drama and fighting inside the West Wing. But what it really shows is that Jared Kushner and Ivanka Trump have often been framed as his moderating forces in the administration. But, in fact, based on a lot of what's written in this book, they are very much enablers of the President.

Now, whether or not he wants them there, that's something that the President has reportedly gone back and forth on. But the fact that they are there at all shows you not just the influence they may be able to garner over the last two years but also kind of tying it together to the conversation we've been having about privilege. The fact that they are there is not based on merits, not based on qualifications, it's because Ivanka is the President's daughter and Jared Kushner has been given a very vast portfolio is the President's son-in-law.

BLITZER: You know, Bianna, in another exchange that The New York Times reports from the book that the White House advised -- that Ivanka told the White House Adviser, Gary Cohn, quote, my dad is not a racist, he didn't mean any of it referring to comments the President made following the white national protest, the killing in Charlottesville. What's your reaction to that?

GOLODRYGA: Well, if I'm not mistaken, I believe that Jared and Ivanka were out of the country or at least on vacation at the time that Charlottesville took place. And I believe that that line or that those words or words that are similar to that were stated to Ivanka shortly thereafter.

I think that it's no surprise that the President's children and the President's daughter, in particular, would defend him. She always has along the way over the past couple of years. And I think it's also well known that they have very good media-savvy skills and connections as well. So when a story that does not necessarily offer a flattering light happens to come about, they are nowhere to be around, they're nowhere to be found and they are not involved. And when there's a good story, obviously, they are there.

BLITZER: Everybody stick around. There's a lot more news we're following. And remember, we are standing by for major developments in Robert Mueller's Russia probe as Paul Manafort and Roger Stone are both due in court. We're going to bring you the details right after this.

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[17:40:00]

[17:44:23] BLITZER: Former Trump campaign Chairman Paul Manafort got a lighter than expected sentence after his first trial. But now, he faces sentencing from a different federal judge in a different case.

Let's bring in our Political Correspondent Sara Murray. Tomorrow, Sara, all lies will be on this federal judge, Amy Berman-Jackson. Her decision will be released tomorrow. What are we anticipating?

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Well, that's right. And, you know, in this case, Paul Manafort did not go to trial. He decided he was going to plead guilty and cooperate, and didn't work out particularly well because prosecutors said, hey, you're lying to us. You were supposed to be cooperating.

He faces a maximum of ten years. That's how long the judge could put him behind bars. And where we saw Judge T.S. Ellis was a little more lenient, that certainly might not be the case when he is before this judge in D.C.

[17:45:00]

Judge Amy Berman Jackson has a lot more reasons to be unhappy with Paul Manafort. You know, he lied when he was supposed to be cooperating with investigators. He was, you know, found to be tampering with witnesses, which is why she threw him behind bars in the first place.

And she also has a lot more insight into this case. She's been able to view a lot of intelligence that's still under seal to the general public, so she knows a lot about what kinds of activities he was up to during the campaign, his interactions with his, you know, associate, Konstantin Kilimnik. And that could all come into play when she decides to move forward with this sentencing.

WOLF BLITZER, CNN ANCHOR: Yes.

MURRAY: So it's possible she could be a lot harsher.

BLITZER: And if she's really harsh and throws the book at him, she gives him 10 years and to begin that 10-year sentence after he finishes the first nearly four years of this sentence.

MURRAY: Absolutely. Judge T.S. Ellis said he was going to leave that up to Judge Amy Berman Jackson, whether she wanted to, you know, set these terms to run consecutively. So that's fully within her power. BLITZER: Consecutively or concurrently. He could wind up maybe 14

years in jail. What about talk of a pardon?

MURRAY: Well, I don't think that anyone can rule it out at this point. You know, we saw the White House Press Secretary Sarah Sanders go out there and say, you know, the President will make a decision about that when he is ready.

But we know that, really, from the beginning, you know, Donald Trump was never a huge fan of Paul Manafort when they were working together on the campaign. But as soon as Manafort was facing charges, President Trump would say to people that he felt bad because he felt like Manafort was just being prosecuted because he worked for Donald Trump's presidential campaign.

And these are all things that could come into play. We'll just have to wait and see.

BLITZER: We'll find out tomorrow. And you'll be out in the courtroom.

MURRAY: Yes.

BLITZER: Thank you very much.

MURRAY: Thanks.

BLITZER: Sara Murray, reporting.

Coming up, former Vice President Joe Biden gives the clearest signal yet that he is ready to jump into the 2020 race. Would he be an instant frontrunner?

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[17:51:16] BLITZER: Two popular Democrats are edging closer to entering the 2020 presidential race. Former Vice President Joe Biden looks like he is ready and could become an instant frontrunner while Beto O'Rourke could also be a very popular candidate.

Let's go to our senior Washington correspondent Jeff Zeleny. Jeff, what's the latest?

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Well, Wolf, it's no longer a question of if they're running but when they're getting in.

Now, Joe Biden said today he'll be revealing his decision pretty soon, with aides eyeing an April announcement. But Beto O'Rourke, the former Texas congressman, he is going even sooner. He's planning a weekend trip to Iowa. By that time, he is expected to be in the race.

(BEGIN VIDEOTAPE)

CROWD: Run, Joe, run. Run, Joe, run.

ZELENY (voice-over): Joe Biden answering those three words today with a slight smile. Not saying yes but showing no signs of backing away from a third bid for the presidency. He is making plans to jump into the 2020 race soon, eyeing a formal announcement in April.

JOE BIDEN, FORMER VICE PRESIDENT OF THE UNITED STATES: I appreciate the energy you showed when I got up here. Save it a little longer. I may need it in a few weeks.

ZELENY (voice-over): Speaking to the International Association of Fire Fighters who made their views clear, Biden offered a hint at his strategy -- take on President Trump directly rather than the Democrats he'll first be competing against.

BIDEN: In American, everybody gets a shot. That's what the next president of the United States needs to understand, and that's what I don't think this current president understands at all.

(APPLAUSE)

ZELENY (voice-over): The former Vice President following his wife, Jill, on stage. She's given her blessing to another presidential run.

JILL BIDEN, FORMER SECOND LADY OF THE UNITED STATES: So I'm grateful to be here today to say thank you.

ZELENY (voice-over): A Biden campaign in waiting is about to come to life, testing whether Democrats will favor experience over new blood.

UNIDENTIFIED FEMALE: What's the holdup, sir?

BIDEN: No holdup. The car is working.

ZELENY (voice-over): One of Biden's first stops will be Iowa where 64 percent of likely Democratic caucus-goers say he should run, according to the latest CNN/"Des Moines Register" Iowa poll, with 31 percent saying his time has passed.

While much of the energy of the Democratic Party is on the left, a full 70 percent say Biden's political views are about right.

By April, Biden is said to have even more competition as Beto O'Rourke is on the cusp of also jumping into the race, CNN has learned. The former Texas congressman is poised to push the button on a presidential announcement in the coming days, in the words of one person familiar with the plan.

He launched more than 300 ads on Facebook this week after not running a single one since losing his Senate race to Ted Cruz in November.

BETO O'ROURKE (D), FORMER TEXAS CONGRESSMAN: What's up, you and I (ph)? That's O'Rourke here in El Paso.

ZELENY (voice-over): He's also heading to Iowa on Saturday, campaigning in a state Senate race and likely for himself.

Meanwhile, South Bend Mayor Pete Buttigieg is trying to seize on momentum from his CNN town hall on Sunday. Aides say he raised more than $600,000 from 22,000 donors in the first 24 hours. A sign more and more people are getting to know his name.

JAKE TAPPER, CNN ANCHOR: How do you pronounce your last name?

MAYOR PETE BUTTIGIEG, SOUTH BEND, INDIANA: Buttigieg.

TAPPER: Buttigieg.

BUTTIGIEG: Yes. Say that three times fast. Either way, it comes out Buttigieg.

(END VIDEOTAPE)

ZELENY: So Buttigieg is the youngest candidate in the campaign at 37. He's been saying it's time for a generational change.

But, Wolf, that is one of the central questions of this primary. Are Democrats looking to pass the torch, or are they looking for new blood here? So it's one of the things that we'll be, you know, examining for the next year, but both of them appear to be in. But that Biden race will certainly be interesting.

BLITZER: Yes, the political arena is heating up big time right now.

ZELENY: Getting full.

BLITZER: All right, we'll watch it closely, Jeff Zeleny. Thank you.

Coming up, breaking news, celebrities due in court for alleged college admissions scam. Why would the rich and famous resort to bribery and conspiracy to get kids into top schools?

[17:54:58] (COMMERCIAL BREAK)

BLITZER: Happening now, breaking news. Desperate admissions. Stars of "Desperate Housewives" and "Full House" are among dozens of people charged in a sweeping college admissions scandal. Prosecutors say wealthy and privileged parents bribed coaches and others to get their children into top universities.

[17:59:54] Flying solo. U.S. regulators resist calls to ground the Boeing 737 Max 8 even as dozens of other countries, including the entire European Union, block the planes from flying after two crashes in five months.