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Boeing Plane Banned Outside U.S.; Interview With Rep. Jimmy Gomez (D) California; Cheating Scam. Aired 6-7p ET

Aired March 12, 2019 - 18:00   ET



WOLF BLITZER, CNN ANCHOR: 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. What did President Trump tweet that prompted the Boeing CEO to call him personally?

Another investigation. CNN has learned that the New York state attorney general's office has subpoenaed Deutsche Bank for records relating to Trump Organization loans, mortgages and lines of credit used to finance hotels and golf courses. Did Mr. Trump lie about his assets to get hundreds of millions of dollars from the bank?

And back to court. Paul Manafort faces another sentencing tomorrow, this time here in Washington, where the White House still isn't ruling out a possible pardon for the former Trump campaign chairman. How much more jail time will he get?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following breaking news.

The actress Felicity Huffman of "Desperate Housewives" and Lori Loughlin of "Full House," they're appearing in federal court, along with dozens of other people swept up in an unprecedented college admissions scandal. They are among 33 parents the Justice Department alleges used a college prep adviser to funnel bribes to coaches and others in an effort to get their children into top universities.

It's the largest scandal of its kind ever uncovered here in the United States, with 50 people charged in six states.

I will talk about the breaking news and more with Congressman Jimmy Gomez of the Oversight and Reform Committee. And our correspondents and analysts, specialists, they are all standing by.

First, let's get the very latest of the breaking news.

Our national correspondent, Brynn Gingras, is in Boston,where federal prosecutors announced the charges.

Brynn, this is truly a shocking case.

BRYNN GINGRAS, CNN CORRESPONDENT: I mean, it's an enormous case, Wolf.

The mastermind behind this, William Singer, he actually cooperated with authorities in this yearlong investigation. He walked out of this courthouse after pleading guilty to four federal charges. And he didn't say a word. He can serve up to 65 years in prison.

And he admitted in court that he had an elaborate scheme to help parents get their kids into major colleges and universities, whether through academics or through athletics. And we're talking about parents that are major company CEOs. We're talking about fashion designers and we're talking, yes, about two Hollywood actress.


GINGRAS (voice-over): Oscar-nominated actress Felicity Huffman and actress Lori Loughlin, best known for her role as Aunt Becky on "Full House," among dozens charged in a cheating scam helping to get students into a string of prestigious universities.

ANDREW LELLING, U.S. ATTORNEY FOR MASSACHUSETTS: Fifty people nationwide, two SAT or ACT exam administrators, one exam proctor, one college administrator, nine coaches at elite schools, and 33 parents who paid enormous sums to guarantee their children's admission to certain schools.

GINGRAS: According to prosecutors, the center of the scheme is prep organization the Key, founded by William Singer. He has pleaded guilty to four charges, including money laundering and obstruction of justice.

LELLING: Between roughly 2011 and 2018, wealthy parents paid Singer about $25 million in total to guarantee their children's admission to elite schools.

GINGRAS: The scheme involved two kinds of fraud, parents paying a college prep organization to help their children cheat on SAT or ACT exams, and others paying to allegedly bribe college coaches to help admit the students as athletes, regardless of their athletic skill.

LELLING: Singer helped parents take staged photographs of their children engaged in particular sports.

GINGRAS: Lori Loughlin and her husband, fashion designer Mossimo Giannulli, have been charged with conspiracy to commit mail fraud and honest services mail fraud for allegedly paying more than $500,000 in bribes to get both of their daughters admitted to USC, getting them on the rowing team, a sport which neither of them had ever participated in.

Their daughters have not been charged. An e-mail written by Giannulli in the complaint reads in part -- quote -- "I wanted to thank you again for your great work with our older daughter. She is very excited. And both Lori and I are very appreciative of your efforts and end result."

Their daughter, though, seemingly making light of going to college in this YouTube video posted in August.

OLIVIA JADE, STUDENT: But I'm going to go in and talk to my deans and everyone and hope that I can try and balance it all. But I do want the experience of like game days, partying. I don't really care about school.

LELLING: 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.


GINGRAS: Huffman is also charged with conspiracy to commit mail fraud, allegedly paying $15,000 to Singer's organization. In a phone conversation recorded as part of the investigation, Huffman says: "We're going to do like we did with my older daughter."

The cooperating witness responds: "OK. So, Cooperating Witness 2 will take it with her and for her at Igor's place at the West Hollywood test center."

According to the complaint, Huffman did not go through with the plan for her younger daughter. Prosecutors are calling the scam Operation Varsity Blues, and includes Georgetown, Stanford, UCLA, USC, University of Texas at Austin, Yale University and several prominent Boston institutions.

LELLING: We're not talking about donating the building. So that a schools more likely to take your son or daughter. We're talking about deception and fraud, fake test scores, fake athletic credentials, fake photographs, bribed college officials.


GINGRAS: And, Wolf, authorities say they seized $5.2 million from that nonprofit, of course, created by Singer.

Two things to note here. No students have been arrested in connection with this case, though authorities say they have not ruled out further arrest in the future. And another thing. We have gotten a lot of reaction from universities about this case, a lot of them of course, distancing themselves, expressing serious disappointment, and no universities have also been charged in connection with this case -- Wolf.

BLITZER: All right, Brynn, thank you very much, Brynn Gingras in Boston.

We're also following the growing controversy over the safety of the Boeing 737 MAX 8. A growing number of countries, including the entire European Union, have now grounded the planes, following a second deadly crash in just five months. But, tonight, the FAA is resisting calls from some lawmakers and

unions to temporarily stop the planes from flying.

Let's go to CNN's Tom Foreman. He's working the story for us.

Tom, both Southwest and American Airlines, they continue to fly the 737 MAX 8.

TOM FOREMAN, CNN CORRESPONDENT: Yes, that's right, Wolf.

The U.S. seems to be standing virtually alone in defending these airplanes at this point, while the rest of the world is saying get the flight data recorder open, get the voice recorder open, get some answers before these planes take off again.


FOREMAN (voice-over): Facing serious safety questions and brutal political headwinds, the Boeing 737 MAX 8 is being grounded around the globe, in the United Kingdom, the European Union, much of Asia, Australia, and more. In some cases, even other variants of the MAX line are being parked, as many airlines say they won't use the plane until they have additional information about the fatal crash in Africa and the one last fall in Indonesia, grounded almost everywhere except in the United States, where it is still flying tonight, all of which is creating an uproar in the U.S., where a growing list of lawmakers is urging caution, if not by federal agencies, then by the airlines.

SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: Every one of these planes should be grounded right away. They are accidents waiting to happen. I have advise my family members to switch airlines.

FOREMAN: Still, the Federal Aviation Administration and U.S. airlines that use the MAX 8 are standing by it. The Southwest Pilots Association extremely confident in the plane, which is still flying domestically, despite concerns from other aviation professionals, such as flight attendants unions.

A software update is in the works for the aircraft. But Boeing says even now, "We have full confidence in the safety of the MAX."

But, in Africa, as searchers scour the crash site, Ethiopian Airlines is reporting initial details from the pilot of the doomed plane that seem eerily suggestive of a software problem which some analysts believe can make these planes uncontrollable.

TEWOLDE GEBREMARIAM, CEO, ETHIOPIAN AIRLINES: So he was having difficulties with the flight control of the airplane, so he asked it to return back to base. And clearance was given to him.

FOREMAN: He never made it. And that is clearly on the minds of some U.S. travelers, who have found themselves somewhat alone in the world aboard Boeing MAX 8 planes.

UNIDENTIFIED FEMALE: I prayed a little bit more than usual, I think, but it was out of my hands, so I had to make it on the plane. (END VIDEOTAPE)

FOREMAN: The odds of you winding up on one of these planes is quite small, since only a few dozen of them are flying over the U.S.

But proponents say that is also the argument for grounding them, because taking them out of service amid tens of thousands of planes would not hugely disrupt air travel. And yet, if one went into these midair convulsions, with the pilot fighting the plane itself, the consequences could be terrible for hundreds in the air and on the ground too -- Wolf.


BLITZER: That's a very important point.

Tom Foreman, thank you very much.

Also tonight, a source is telling CNN that the New York state attorney general's office has subpoenaed Deutsche Bank for records relating to the Trump Organization.

Our crime and justice reporter, Shimon Prokupecz, is working the story for us.

Shimon, what are you finding out?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: Yes, so this is the attorney general in New York.

It's important to know this is a civil investigation. They have launched their own investigation into Deutsche Bank. and their lending practices with the Trump Organization.

Important here is because this is the one bank, the one financial institution that when no one else would loan money -- lend money to the Trump Organization, to Donald Trump, they consistently did. And now the attorney general in New York has issued subpoenas.

They want to know more about the financial dealings while in opening the hotel here in Washington, D.C., the Chicago hotel, the building there.

Interestingly enough, this comes on the heels of Michael Cohen's testimony, which you will recall is where he testified that Donald Trump was inflating his income to try and get money. There was also the accusations of insurance fraud.

So all of this coming after Michael Cohen testified.

BLITZER: And tomorrow we're expecting another important court hearing, Paul Manafort. He's about to be sentenced for the second time federal courthouse here in Washington. Separate charges from the earlier conviction, separate sentencing. He got almost four years last week for what he did.

What do we expect the federal judge, Amy Berman Jackson, to do tomorrow?

PROKUPECZ: A much different judge than what we saw in Judge Ellis in Virginia.

She -- he's facing up to anywhere up to 10 years additional prison time. She has the option of sentencing on two different counts. Each one carries up to five years. Of course, her tone in terms of her view of this case and her view of this entire investigation has been very different than Judge Ellis. He has been more compassionate towards Paul Manafort. She has taken a very different take on this.

Remember, this is the judge that threw him in jail that he's been in since really the trial because he tampered with a witness. So that is one of the things that he's facing. So it's going to be a very different take. It would be interesting certainly to see her view on everything involving Paul Manafort.

She has not always been very friendly to him, so it's going to be a very different look for him tomorrow than what we saw in Virginia.

BLITZER: We will see how many more years he gets as a result of what she decides tomorrow. You will be working that story for us.

Thank you very much, Shimon.

BLITZER: Let's talk about all of this and more.

Democratic Congressman Jimmy Gomez of California is joining us. He's a member of the Oversight and Reform Committee.

Congressman, thanks so much for joining us.

REP. JIMMY GOMEZ (D), CALIFORNIA: Thank you for having me.

BLITZER: So we're learning a lot of news today. We're following a lot of news today.

What's your reaction, first of all, to this sprawling college admissions scandal? One of the coaches, by the way, who was indicted today, the UCLA men's soccer coach, individual named Jorge Salcedo, lives in your district.

What's your reaction?

GOMEZ: First, I don't know Mr. Salcedo.

But one of the things -- I'm pissed off and appalled by this scandal. I'm a son of immigrants who had to work two jobs while attending community college to change my life, to transfer to UCLA and graduate at the top of my class, and then go to Harvard after that.

There's countless people and kids just like me working hard to change their life, but they don't have parents that are going to bribe their way into college or falsify athletic records.

It's appalling. And I think these people have to be held accountable. BLITZER: Yes, it's truly shocking, indeed.

When you read this 23-page indictment, it's enormous and it's really outrageous. And you make an excellent, excellent point.

Let's talk about some other important issues unfolding today, the growing calls, as you know, to ground this new Boeing plane, the 737 MAX 8, in the aftermath of a second fatal crash of this model.

Would you fly on this plane right now? And you do a lot of flying between Los Angeles and here in Washington.

GOMEZ: I do. I'm on a flight every week, twice a week. And it's something I think about when we take off and when we land.

And, no, I wouldn't fly on the plane. I think that we should ground those planes to be prudent, to make sure that everybody has confidence. I don't think it's something that we should toy around with. And I know that, since we don't have that many planes in the U.S., it even makes more sense.

So I would ground them, and I personally wouldn't fly on them.

BLITZER: Yes, when lives are at stake, you err on the side of caution. And you make sure that there's no further problems. You don't want to create any chances at all. You make an excellent point.

GOMEZ: Right.

BLITZER: There are some other important developments unfolding. As you heard, the New York state attorney general's office has just subpoenaed two banks, Deutsche Bank and Investors Bank, for records relating to the Trump Organization.

What do you think they might find?

GOMEZ: Not sure what they can find.

But one of the things that I'm interested, as -- being on the Oversight and being in the Michael Cohen hearing, is, really, I want to know, who is influencing Donald Trump? Is he making his decisions based on his own bottom line, or an individual, or even a foreign country?


And the only way we can get -- find that out is if we get ahold of his tax returns, and also the tax returns of his organizations. So I'm in support of asking for the tax returns. I'm in support of more investigation.

And that will make sure we keep on asking those questions. We're going to have answers, I think, that will help us make decisions on a variety of issues.

BLITZER: What happens if he and the White House resist your requests to get his tax returns, not only his personal tax returns, but the Trump Organization's tax returns? What do you do?

GOMEZ: Well, we know that it will probably end up in court.

One of the things that -- that's why it's important to have these hearings, these oversight hearings, to make sure that we lay the case for asking these returns. It's not something that we do lightly, but it's something that we have to do in order to bring more accountability to this White House.

So, most likely, it will end up in court. And that's why having these hearings and proceeding in a very step-by-step approach makes a lot of sense with what Chairman Neal has said from the beginning.

BLITZER: Tell us what's next for your committee, because we have been watching all of this unfold.

GOMEZ: I think one of the things I would love to see is getting either the -- what is -- Allen Weisselberg to come in and testify. He's the main individual that understands the complexities and the nuances of Donald Trump's organization, as well as his tax returns.

BLITZER: He's the chief financial law officer for the Trump Organization. He's worked for the Trump family for some 40 years.

GOMEZ: Correct.

And one of the things that we have known throughout our history as a country, it's often not the crime that gets people. It's the taxes. And the person who has access to those tax returns is the goose that lays the golden egg.

So I believe we got to get Weisselberg and bring him into the Oversight Committee, and anybody else that can shed some light on this -- the finances of this president.

BLITZER: And what about Felix Sater? He's the Russian-American businessman who had been working on that so-called Trump Tower Moscow project.

I understand he's now scheduled to testify at the end of the month, March 27, I think before the House Intelligence Committee. What are you hoping to ask him?

GOMEZ: I'm not -- I'm not on the House Intelligence Committee.

But if we can actually bring him in, it would be the same -- same lines, who knew what and when.

BLITZER: Are you trying to bring him into the Oversight Committee too? Is that what you're saying?

GOMEZ: Mr. Cummings has said anybody that's associated with Donald Trump and his organization is fair game. Anybody that was mentioned during the last oversight hearing with Michael Cohen is fair game.

And I think that the Oversight Committee will be laying out the justifications to bring different people in. I'm not certain if they're going to pull the trigger on Mr. Sater, but I know that they're looking at everybody.

BLITZER: Any other witnesses you want to see before your committee?

GOMEZ: I think that there are several.

I think that Donald Jr. is somebody that would be interesting to bring in. But, like I said from the very beginning, the money guy, the finance guy, which is Allen Weisselberg, we want to bring him in, because, with him, he can answer a lot of questions that other people can't.

BLITZER: Congressman Jimmy Gomez, thanks so much for joining us.

GOMEZ: Thank you, Wolf.

BLITZER: All right, there's a lot more breaking news we're following.

We're about to go live to Los Angeles for the latest on the court appearance by the actress -- actresses Felicity Huffman and Lori Loughlin. They're among the dozens of people charged in a sweeping college admissions bribery scandal.

Also just in, the FAA says they have no reason to ground the Boeing 737 MAX here in the United States, the aircraft involved in two recent fatal crashes.

Stand by. Lots more information. You're in THE SITUATION ROOM.



BLITZER: Just into THE SITUATION ROOM, the FAA now says they have no basis to ground the Boeing 737 MAX. That's the aircraft involved in two recent catastrophic crashes with striking similarities.

President Trump has also weighed in on the issue. He talked personally to the company's CEO today, as more countries grounded the plane following those two deadly crashes.

Let's go to our chief White House correspondent, Jim Acosta.

Jim, the president tweeted about this as well. Update our viewers.


President Trump may have 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 of 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 under way.

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 unnecessary 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.


SARAH HUCKABEE 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.

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

PATRICK SHANAHAN, ACTING U.S. DEFENSE SECRETARY: 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.

QUESTION: Do you think the flights should be grounded right now, sir, the airplane?

SHANAHAN: Thank you very much. OK, good to see everybody.

ACOSTA: 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's 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.

(on camera): The president...



April go ahead. ACOSTA: He used rhetoric 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.


HUCKABEE 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's sad, but not surprising, the media would spend time promoting a book based on shady 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 spokeswoman 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's not in favor of and people the president without overwhelming evidence of wrongdoing.

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


ACOSTA: Now, as for Boeing, the aviation giant confirms its CEO called the president after his tweet and told Mr. Trump that the MAX aircraft are safe.

The company didn't want to go further than that. But the fact that the company's CEO had to make such a call is a reminder that the president's tweets, which sometimes serve as a distraction for the news media, can have real-world consequences -- Wolf.

BLITZER: Very important point.

All right, Jim Acosta, thank you.

There's breaking news coming up. Will two well-known actresses and a lot of others face jail time in an unprecedented college admissions bribery scandal? Plus, the New York attorney general now looking at President Trump's ties to a German bank. We're learning new details of the documents that have been subpoenaed.




[18:32:29] WOLF BLITZER, CNN THE SITUATION ROOM: Some breaking news tonight. Actresses Felicity Huffman of Desperate Housewives and others, they are appearing in federal court in Los Angeles. They are among 50 people in six states charged in the largest college admissions scandal ever uncovered in the United States. Federal prosecutors say they and other parents used a college prep adviser to funnel bribes to coaches and others in an effort to get their children into top universities.

Let's dig deeper with our correspondents and our analysts. And, Laura Coates, the Justice Department makes no bones about it, this 23-page indictment. It's a sprawling conspiracy. What stands out to you?

LAURA COATES, FORMER FEDERAL PROSECUTOR: Well, the idea that it's a federal charge. There are multiple federal charges. This is a very serious case. Also the idea of entitlement, of privilege, of the very reasons people look at the idea of why some people are elitist and some people are not, who benefit from that and who do not.

Affirmative action policies in this country, which has been largely derided by many, has been about -- I recognize there's no level playing field. This shows you, again, when it comes to money, that is the actual financial affirmative action that's happening here, and I'm glad they are being prosecuted because they are taking opportunities away from people who are engaged in meritocracies by saying, we are more entitled than you and we can pay for the access to the American dream.

It's a great case to bring. It may seem like overkill for many people. But, to me, somebody who has fought for civil rights in this country, I think it's time you recognize that privilege is quite extensive.

BLITZER: Yes. And they're making it clear in this indictment, Joey Jackson, that these kids already had huge advantages, legitimate advantages. Their parents were obviously wealthy. But instead, they chose to, quote, fake test scores, fake athletic credentials, fake photographs and actually bribe college officials. How upsetting is that to you?

JOEY JACKSON, CNN LEGAL ANALYST: You know, Wolf, it's very upsetting for the following reason. And I look at this and approach this as a parent before I put my legal hat on. And just let me address it as a parent who has a son in at UNC Chapel Hill doing great. But having just gone through that process, I can tell you, it is harrowing, right? So what do we do? We drill our children, right, drill my son from the very beginning. This is what you have to do. You have to hold it down academically, do the best you can, but we've got to make you well-rounded, right? You want to play varsity in high school, great. We're going to work with you. We're going to do all we can because that's going to look good in college. We also want to get you on debate team. We want to get you here. We want to get you there.

And how many times when he say, dad, I want to go out. I want to -- no, you've got to go study, right. We've got to get you on the S.A.T.s. You've got to study for your A.C.T.s. You're not going anywhere.


I am. No, you're not. You know, argument after argument, trying to do the right thing, instilling values, hard work, that's what it's going to get it done.

And then to find out -- then you go through the whole process of these college essays and sitting down, and these kids, they're killing it with each other, right? And then the parents, myself, my wife, together working with him. And then you find out, you know what, well, wait a second. We could put that aside because you don't need to work anymore. You don't need to take your time and do the right thing and to study hard to be well-rounded. You just have to write a check. You just have to have enough money. You have to have enough influence. And if you do that, everything is going to be okay. It sends the wrong message.

I am glad the federal government is using the RICO statute, right, racketeering exactly what this is, business practices which are fraudulent. RICO statute not just for mobsters but for any criminal enterprise, which this was, that would give this unfair advantage. And so, therefore, my reaction is it's appalling, it shouldn't happen. It did happen. But, hopefully, this sends a deterrent moving forward so that we put an end to this whole privilege situation.

BLITZER: And speaking of privilege, you know, David, we know rich parents and their kids, they already have an advantage. They can pay a lot of money, get special tutors to help the kids learn for their S.A.T.s. Poor kids don't have the money to get those kinds of tutors. We also know rich parents can legally make huge contributions to universities, financial contributions as well. That certainly could help get a kid into that university.

DAVID SWERDLICK, ASSISTANT EDITOR, THE WASHINGTON POST: Right, a couple of things, Wolf. First of all, I think that it's sort of how many yachts can you water-ski behind at the same time type of problem. One of the things, and one of my Washington Post colleagues, Elizabeth Bruenig, said this on Twitter earlier today that bothers so many people about elites in this country is that too much is never enough. It's not just enough to be very rich and well connected but also to say, in addition to that, maybe let's try bribing our kid's way into college. The other thought I had on this, Wolf, is that as someone who went to public high school, public college, public law school, it saddens me there's an idea out there that it's not good enough to either go to a public big state university or to a smaller lesser known college. There's a school out there for everybody. And the idea that the key to success is in just a few colleges, I think, is the wrong way to look at this.

BLITZER: Ryan, what do you think?

RYAN LIZZA, CHIEF POLITICAL CORRESPONDENT, ESQUIRE: Well, first of all, as David and I both went to the University of California at Berkeley, so I should say --

COATES: I notice the suit --

LIZZA: I noticed that Stanford was one of the schools on the list. And nobody should ever pay that much money to get into Stanford. But them, joking aside -- and, I think, politically, it's -- two things are important. One, we all know that, economically, in this country, the single most important thing you can do these days is go to college. And that's going to be more important in the future.

And to see people cheating that system, people who already have such advantages, cheating that system just exacerbates one of the great economic problems in this country, which is the yawning gap in between the rich and poor in this country.

And this could pivot into a campaign issue. I mean, college education is one of the top issues on the campaign trail. Bernie Sanders is one of the people out there saying, the government should pay for everyone to go to a good public school. And I think it just -- it feeds into this narrative that elites are out of touch in this country. I see this showing up on the campaign trail going forward.

REBECCA BUCK, CNN POLITICAL REPORTER: And it also feeds into this idea of people losing faith in institutions. If we can't trust the schools to be fair arbiters who evaluate each student on their merits, and already this erosion of faith in other institutions in society in part because there is this belief, this growing belief among people that the game is rigged, that it's rigged in favor of people who are well connected, who are wealthy. And that's why I agree with you, Ryan, that this is something that could reflect in the politics that we're seeing right now.

COATES: And, you know, there is a racial element of this. Of course, affirmative action is, to me, underlies this entire theme when the courts have said time and time again that because there has not been an equal playing field, you must engage in a holistic individual review of every single student to figure out what their contribution could be to a diverse marketplace of ideas.

Well, that is foreclosed not only to so many people who do not have the intergenerational wealth that is gained from people who have been exploited in this country for centuries to be able to have access to that particular power, then to have exploited further to say that, listen, not only are you not going to have an individual review, you are not going to have that opportunity. So we've already given a spot away to somebody who had the benefits of intergenerational wealth.

This smacks in the face of everyone who has fought for affirmative action. People say in return, no, it's not necessary in this country. We have a level playing field. We do not. And notice how it plays time and time again for everyone who fights for a chance, and not only have to earn their spot, like I know I had to ten times over, it smacks in the face of everyone who has said, I have earned a spot but you got a handout. Well, that belies the controversy behind affirmative action. It's still necessary and this is a case.

BLITZER: Well, an excellent argument that you made. You know, Joey, if you take a look at this indictment, you will see all these 50 people or so, including CEOs, forget about the actresses, but prominent, very wealthy people.


What do you anticipate? Some of these folks could wind up going to actually -- actually going to jail.

JACKSON: Yes. You know, Wolf, there is the indictment. And then if you look at the criminal complaint, that's 204 pages. That spells it out more even more in terms of the criminality. I'm going to tell you what I'm looking for in this case too. And we know that the -- under the actual law itself, the punishment is up to 20 years. We also know that the guideline sentence, it looks at past criminal history and it looks at the offense.

But listen to this. We saw Manafort, not to pivot into that, but we were expecting what his sentence would be. And for all his crimes, he gets 47 months. So I'm going to look and I'm going to find out and see, right, as we look at it there, he gets 47 months, tax fraud, tax evasion, robbing businesses, everything else with regard to not being honest and deceptive.

Here is another case. So I am going to see how the federal judge, when it comes to that issue, metes out punishment here and whether it's fair, whether it's honorable and whether it's appropriate.

BLITZER: So you think they're going to go to jail, some of these folks who are named in this indictment?

JACKSON: I think they need to because -- here is the bottom line, Wolf. One of the things that you do, and there is many when it comes out to sentencing, is that you have to send -- it's a deterrent, right? You look at punishment, you look deterrence and you look at rehabilitation. Those are the factors that go into sentencing, and then there are more, right? But the fact of the matter is is that you have to send a message that this just isn't right.

There are people there who are working, who are drilling their kids, who are doing the right things, who are instilling values, who are, really, right -- they are not super imposing pictures on athletes. They really are athletes. And in addition to being athletes, they are studying hard and, academically, they are taking their S.A.T.s themselves. They are not having other people taken for them or asking for more time and then re-grading them to upgrade them. These people are working hard. So it needs to send a message that this is not right.

BLITZER: And I suspect, and just to having read this, as all of us have, this may just be the tip of the iceberg on what's going on. These are individuals who were discovered doing this. But there probably are a whole other -- a bunch of other conspiracies out there, individuals involved doing this kind of illegal activity.

Everybody stick around, much more on all of the breaking news after this.


[18:46:47] WOLF BLITZER, CNN HOST: We're back with our correspondents and our analysts.

And, Ryan Lizza, the New York state attorney general has now opened an investigation subpoenaing two banks, Deutsche Bank, Investors Bank, for records involving the Trump Organization. One point in "The New York Times" interview, Donald Trump said, you know, you go after my family or my business, that's crossing a red line.

RYAN LIZZA, CNN POLITICAL ANALYST: Yes. Now, my understanding is this is a civil case, not criminal case. But this is the fruit of the Michael Cohen testimony, right? He alleged that there may have been some kind of fraudulent information given to bankers that Trump used. And so, it looks like they are following one of the paths he led investigators down and are going to look into that.


LIZZA: Just another of the array of investigations that are going on against Trump and his company.

BLITZER: Rebecca, he is right, because Michael Cohen and his testimony last week spoke about the president allegedly doing all sorts of wrong things with insurance and whatever, sometimes exaggerating his wealth, sometimes diminishing it to pay less taxes, giving a bunch of clues to the New York state attorney general.

REBECCA BURKE, CNN POLITICAL REPORTER: That's right. And so, here we see the direct result of Democrats taking back the House majority. They were able to hold this hearing, a hearing that likely never would have taken place if Republicans had had the majority in the House. And they are able to open up these new lines of investigation, not only for members of Congress but also for outside law enforcement officials and investigators.

And so, they are leaving these bread crumbs by having committee meeting that could result in investigations of this kind. And this is only the beginning. This is -- there are more to come with other potentially valuable witnesses. And so, this could be just the beginning. BLITZER: You know, it's interesting, Joey, because the president

wasted no time. He just tweeted this. And I will put it up.

He said: New York state and its governor, Andrew Cuomo, are proud members of the group of presidential harassers. No wonder people are fleeing the state in record numbers. The witch hunt continues.

Give me your reaction.

JOEY JACKSON, CNN LEGAL ANALYST: Well, the reaction is obviously the president is going to brand anything, right? And so, instead of accepting responsibility and speaking to the core issue of what his foundation was up to, what his business dealings were, what type of corruption, if any, exists, he wants to deflect from that and spin and so it's about harassing the president. Certainly, they can't be looking for anything that has merit. Certainly, he did nothing wrong. It's about harassing the president.

No. It's about getting to the truth. And I can tell you having known Tish James for quite some time, that she's an honorable individual.

BLITZER: The attorney general.

JACKSON: The attorney general of the state of New York, yes, she's an honorable individual. I think she's committed to getting to the truth and getting to the facts as she was when she served as public advocate for New York state.

I think that ultimately that's what this is about. It's about getting the public to know and to understand and to recognize what they were up to that is the Trump Organization, the Trump Foundation, and if there's anything there, whether it's civil and develops into criminal, we don't know.

But whether there's anything there, I think there's a right on behalf of the public to know what it is, when it was and to find those people who -- if anyone accountable for doing anything wrong.

BLITZER: What do you think, Laura?

LAURA COATES, CNN LEGAL ANALYST: It's only an investigation at this point. And, frankly, it would have been a dereliction of duty not to look into it, because the reason we're talking about.

[18:50:01] You laid out a road map of people who may have interest in trying to deflate or inflate the assets. So, they want to understand why Deutsche Bank in particular, of all the banks in all the world, why this one continuously provided loans to Donald Trump when others said, based on his default history and a matter of other things. They want to know why there was this special relationship, with everybody to investigate that.

The idea of there being a red line in the sand for the president of the United States is really gone because he uses that colloquial term of a witch hunt with respect to Mueller. It doesn't apply to every single investigation that has merit, at least to be investigated in the first instance. So, this coining of the phrase is losing traction. It is losing applicability, especially when every single case he's focusing on at this point is farmed to wholly, independent and autonomous entities other than Robert Mueller.

BLITZER: And you can see how angry the president is when he sees this.

DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: You can see that. But just a quick political point to go with what Laura is saying. I'm not sure about this but there are those out there, many out there who think the president didn't really want to be the president. That running for president was a big marketing opportunity.

If you subscribe to that theory, the key thing he forgot to do was he forgot to lose, because if he had lost, some of these investigations never would have accrued. People would not have been scrutinizing his transactions nearly in this much detail. But now that he's president, all of this stuff is fair game.

It's not presidential harassment. It's things happen when you weren't president, and now that you're president, people care.

BLITZER: Everybody, stick around.

There's more news we're following, including the Vice President Mike Pence. He is putting pressure on Republican lawmakers right now ahead of what could be a rather humiliating vote for President Trump.


[18:57:22] BLITZER: Vice President Pence is pressuring Republican senators to vote against the resolution, rebuking President Trump's declaration of a national emergency to get money for his border wall.

Let's go to our congressional correspondent Phil Mattingly. He's up on Capitol Hill for us.

Phil, the vice president met with several GOP senators today as they continue to try to find some way out of a likely rather embarrassing loss for the president. What happened?


The White House has increasingly ramped up efforts over the last couple days to beat back what appears to be a Republican rebellion. I'm told Vice President Mike Pence met behind closed doors with five senators who've raised concerns or expressed outright opposition to the national emergency, to essentially work in listening mode. And these senators proposed to Mike Pence a bill that they've been working on as a bit of a compromise, basically saying if the president is willing to support this bill, which would curtail future powers for a president under the National Emergencies Act, requiring Congress to approve any extension of the National Emergencies Act beyond 30 days, then perhaps the number of Republicans opposed to this effort would drop and potentially drop significantly. I'm told the vice president made no commitments. I've been told he is

bringing it back to the White House. But I'm also told from several Republicans that the president is not willing to back that proposal at this time. The White House counsel doesn't believe in that proposal and that essentially leads to what one Republican senator told me was the reality today. There is no man. There is no way out.

And, Wolf, this vote is coming whether Republicans like it or not. It is scheduled for Thursday. They have to because of the clock there on. And at this point in time, I'll told between 10 and 15 Republican could break with the president on his central issue, the wall, because of the mechanism he is using to try to fund it. The big question now is, can the White House do anything over the course of the next 48 hours the try tamp that down?

Not only was the vice president up here today. I'm told there have been repeated calls from White House officials to senators trying to work with them on this issue, trying to find a way out. I'm told you've seen in public the president has been tweeting about this issue more and more over the last couple days, trying to make the point that it is essentially binary. You either support the president on this issue, whether you support his motivations on the border wall or you don't support him at all.

But as it currently stands, there are four public noes. Ands the big question now is, will that number grow? The clock is ticking. That's according to Senate Majority Leader Mitch McConnell.

BLITZER: We'll find out on Thursday.

Thanks very much, Phil Mattingly.

Finally tonight, tonight, there's breaking baby news. Our electronic graphics operator Jamieson Stewart is the proud new father of Madison Rose. Look how cute she is. She was born yesterday weighing 5 pounds, 9 ounces and 18 inches long. Madison, her mom Alison (ph), and Jamieson, they're all doing well, resting.

Congratulations to this entire wonderful family.

To our viewers, thanks for watching. Follow me on Twitter and Instagram @WolfBlitzer. Tweet the show @CNNsitroom.

"ERIN BURNETT OUTFRONT" starts right now.