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Washington Post Reports, Grand Jury to Consider Potential Charges Against Trump; GOP-Led Arizona Election Audit Moves Forward amid Intra-Party Fight; Senate Holds Key Vote Tomorrow on January 6 Commission. Aired 10-10:30a ET

Aired May 26, 2021 - 10:00   ET




JIM SCIUTTO, CNN NEWSROOM: A very good Wednesday morning to you. I'm Jim Sciutto.


A significant development overnight that could mean serious legal jeopardy for former President Trump. The Washington Post reports that Manhattan's top prosecutor has convened a grand jury to hear evidence and weigh possible charges against former President Trump and those surrounding him at the Trump Organization over his business dealings, possibly. The panel could ultimately decide to indict executives at the Trump Organization or the business itself if criminal charges are presented.

SCIUTTO: After more than two years of investigations, this move signals prosecutors could be nearing the completion of their probe. They are looking into whether the Trump Organization misled lenders and insurance companies about the value of properties on the one side, inflating income there, and deflated income to reduce their tax burden.

CNN Senior Legal Affairs Correspondent Paula Reid here to help walk us through all this. Paula, there's a lot we know and don't know. I mean, the grand jury has been convened. We don't know what comes out of that. But what do we know about the timeframe here?

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: Well, this grand jury has been impaneled for at least six months. There is a mechanism to extend this. And this is an incredibly powerful tool for prosecutors. They can use this to continue to build out their case and then test it before a group of randomly-selected citizens, usually up to 23 people.

Now, the fact they have convened this grand jury two years into the investigation does suggest that prosecutors believe they have evidence of a crime, and they can use this now to issue subpoenas, to gather more evidence and then bring that evidence, bring those witnesses before the grand jury. Now, what makes this different than a courtroom trial is the fact that it's just the grand jurors, the prosecutors and a court reporter. There's no defense represented, there's no public and there's no journalists. So, in order to follow what's going on, we need to rely on our sources.

And we know from our sources that the focus for this grand jury is whether the Trump Organization lied about its assets. As you noted, were they telling banks they had more than they did so they could get bigger loans and were they telling the government they had less than they did to pay lower taxes, the potential crime there being fraud. And in order to bring charges of fraud, you need documents, you need witnesses. And that's really what they're going to be focused on.

This is very much an ongoing and active investigation. But the fact that they've convened this grand jury, it does not guarantee that the former president or anyone else will be charged.

HARLOW: Yes, very important to note. Thank you, Paula.

Let's get right to CNN Reporter Gabby Orr with more on former President Trump's mindset this morning. What are he and people in his inner circle thinking? I mean, he's clearly shooting this down, saying it's all politics and a witch hunt.

GABBY, ORR, CNN REPORTER: Right, Poppy. The former president put out a statement Tuesday evening in response to this development, calling this a witch hunt, which is obviously a refrain that we have heard him use before to describe impeachment and to describe numerous other investigations into him and into his allies.

But he's also taken it a step further and is trying different tactics to shift the attention away from this investigation as it intensifies. In that same statement Tuesday evening, he claimed that New York prosecutors are neglecting to focus on rising crime rates in their state, and instead spending their resources trying to target him and his allies.

He has also resurfaced former comments by New York Attorney General Letitia James, in which she claimed that he was an illegitimate president, to suggest that this entire investigation is tainted against him. And he's once again been teasing a comeback presidential bid in 2024, using that as a sort of way to rally the troops behind him, get his base excited at the prospect of him making a return to the political stage and to do anything that he can to essentially distract from this investigation in Manhattan as it closes in on him and his team.

SCIUTTO: Yes, basically a greatest hits of Trump defenses for allegations like this. Gabby Orr, thanks very much.

Joining us now, former Federal and State Prosecutor Elie Honig. Elie, this is a big deal, okay? So, this is a former president out of office just a few months here, a grand jury impaneled here. In addition to that, the prosecutors have some advantages. They've got a lot of documents from the Trump Organization, tax returns, they also have one or more potential cooperators, do they not, in a Michael Cohen, if they apply sufficient pressure on the longtime CFO of Trump Organization, Allen Weisselberg.


You've prosecuted a lot of cases here. Tell us what you might be advising the president as to the seriousness of this at this point.

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Yes, Jim. Well, it's a serious step, but it does not mean that an indictment of Donald Trump is certain or imminent, right? What I read into this is prosecutors have some solid foundational building blocks for a case, the types of evidence that you talked about, testimony from Michael Cohen about the general way the Trump organization was structured and functioned. They have a lot of financial documents. We know they have Donald Trump's tax returns.

Beyond that though, I don't see one clear piece of smoking gun evidence. And let's remember, it's not enough to indict Donald Trump to just show, well, the Trump Organization itself was involved in fraud. You have to be able to prove specifically that Donald Trump or any person you may want to indict knew about it and authorized it.

And it's not enough as a prosecutor to just say, oh, come on, of course, he must have known about it, of course, he said it was okay. That's the way things (INAUDIBLE). You need specific proof. I'm not aware in the public sector of there being any specific piece of smoking gun evidence at this point.

HARLOW: They've got a lot of power, right, time and power. They have time, six months, meaning it can be extended, right, meaning three days a week, and they have got subpoena power, right, so they can bring in folks to answer their key questions here.

HONIG: Yes, and that's vital, Poppy. The fact that -- the two main things a grand jury can do is issue subpoenas and ultimately vote on indictments. The subpoena power is very important. These are criminal subpoenas. These are taken very seriously by the courts. I know we've seen, for example, Donald Trump casually blow off congressional subpoenas in the impeachment hearings. These are different.

Courts are much more likely to enforce criminal subpoenas. They can compel witnesses to come in and testify. The can compel people to turn over documents, turn over emails. So that's a really important investigative tool that prosecutors have here. I think they're going to use this to try to flush out the case and find more evidence.

SCIUTTO: And possibly present others with the possibility that they could face charges, right, that ever-going effort to get folks to flip.

The president is raising, once again, in his kind of flurry of statements on this, the idea that he will run again. And you hear from folks in his circle and others who cover him that that's part of his defense, in effect, to say, well, I'm a candidate for office, so, clearly, this investigation is politically motivated. From a legal standpoint, would that be relevant, him running or holding out the prospect of running?

HONIG: Only tangentially. And I'll tell you this. There is a legal defense called selective prosecution. It is raised fairly frequently. It succeeds almost never. But what you have to show as a defendant is I was singled out and I was treated differently than other similar people who committed similar acts because of my politics or for political reasons.

So it's a defense that I've seen raised a handful of times. It almost never succeeds. But I think what Donald Trump is trying to do here is set the stage to make that argument, to say, I was singled out. And, look, he'll be able to point to, for example, Attorney General Letitia James' statements during her campaign, I will single out Donald Trump, I will go after him. He will point to those statements.

And I think he's trying to pad that defense no by saying, well, I may run this next time so this extremely political.

HARLOW: Grand juries are also supposed to be extremely secret, like they're not supposed to leak. And, often, they don't, Elie, but sometimes they do. I mean, is it just we're not going to know a lot for a long time?

HONIG: Well, I want to be clear here. The grand jury secrecy requirements apply to the prosecutor who cannot come out and make a public statement, the grand jurors themselves, how cannot come out and make public statements and the court reporter, really, the stenographer. However, if somebody receives a grand jury subpoena, they can bring it here on CNN and put it in front of the cameras. Yes, that is not a requirement of the grand jury. The secrecy only applies to sort of the players.

So I think it will be a combination of witnesses may say, hey, everybody, I received a grand jury subpoena, and our reporters, I believe, will be -- people like Paula will be successful in keeping a finger on the pulse here.

SCIUTTO: Elie, explain the legal standard here, because I know these things are hard to prove and you have to prove intent, but if they have his tax returns, could it not be a fairly simple calculation as to what -- and business records, right, as to what actual income was and what reported income was?

HONIG: Yes. So, Jim, you would think sort of it would be in black and white but you have to show knowledge and intent. You have to show -- let's say there is such a disparity in the records. You would have to show Donald Trump was aware of that disparity. You would have to show he intended to defraud.

And what happens in a lot of cases like this is you get what's called an advice of counsel or advice of an accountant defense, where there's a piece of paper in the file where some lawyer or some accountant said, I blessed it, I've said it's okay to do it this way.


That's not necessarily a silver bullet defense, but it can help a defendant like this a lot, that you can paper up the files.

HARLOW: Isn't there a should have known, you should have known?

HONIG: Not in the criminal context. It's not enough to say should have known. If you can show what's called willful ignorance or that he turned a blind eye and said, don't tell me, I don't want to know.

HARLOW: Ignorance is bliss.

HONIG: That's different, right? That -- well, right, exactly.

So if you can show intentional, willful ignorance, don't tell me, I don't want to know, I'm going to bury my head in the sand, that can be enough. Just being sloppy or negligent is not enough, however.

SCIUTTO: Well, then the other thing is, if you can show that that accountant or someone broke the law -- and, by the way, you're going to jail. Do you really want to protect the big guy? I mean, that's, I suppose, part of the back and forth.

HARLOW: Thanks, Elie.

HONIG: Well, that's the key player. Yes, thanks guys.

HARLOW: Good to have you.

All right, well, how does the grand jury news impact the former president's political playbook? What weight, if any, does it carry for the GOP ahead of the 2020 midterms?


UNIDENTIFIED FEMALE: Can you honestly tell me in all the states that no ballots from people that are already deceased were not filled out and sent in?


HARLOW: Plus, wait until you see this interview that our Kyung Lah did with the lawmaker in charge of Arizona's so-called election audit. Kyung and her team found her. You do not want to miss this.

SCIUTTO: And Facebook issues a new report highlighting which nations are the top sources of disinformation. It's going to surprise you who is high on that list.



SCIUTTO: A Republican-ordered so-called audit -- it's not an audit by any measure, at least a real audit of imagination, of 2.1 million votes cast in in Arizona's Maricopa County is moving forward this week. It comes amid a growing fight between Republican county officials who are calling the audit a sham, that's right, Republican officials there, and Arizona state senators who order it and continue to defend it.

HARLOW: So, Arizona State Senate President Karen Fann, she is the key elected official behind this controversial, to say the least, audit, and someone who has spread disinformation about it. She declined dozens of requests for an interview by our colleague Kyung Lah, but Kyung tracked her down. Watch.


KAREN FANN (R), ARIZONA STATE SENATE PRESIDENT: I don't know what's legit, what isn't legit. But why wouldn't we want to answer those questions.

KYUNG LAH, CNN SENIOR NATIONAL CORRESPONDENT: You're just questioning democracy.

FANN: No. I'm questioning the integrity of the election system.

LAH: Which is the backbone of democracy.

FANN: That's right, which means we should have full, 100 percent confidence in our democracy and in our election system.

LAH: If you're talking about trying to disprove conspiracies.

FANN: If I have to, yes. Why wouldn't we? If somebody says something is out there, I would love to be able to say, that's not true, guys.

LAH: Aren't you raising more questions by giving rise to these conspiracy theories?

FANN: No. I'm answers questions, okay?

So let me ask you a question. Are you 100 percent confident that every vote that came in in Arizona or any other state, can you say emphatically 100 percent that no dead people voted, that ballots weren't filled out by other people, that the chain of custody from the minute people voted, their ballots, that the chain of custody was accurate and on target the entire time? Can you tell me that?

LAH: I can say that what the data shows us --

FANN: No, no.

LAH: -- is that there was no widespread fraud.

FANN: I didn't say there was fraud.

LAH: But you just said chain of custody --

FANN: Yes, chain of custody.

LAH: -- dead people, these things are all fraud. FANN: Well, I asked you a question. Can you honestly tell me in all the states that no ballots from people that are already deceased were not filled out and sent in?

LAH: I can tell you what the data has shown overwhelmingly is that election -- this was the most secure election in American history.

FANN: Okay. But you can't answer that question either, can you?

LAH: I'm answering it. I'm telling you --

FANN: No, you're telling me what the data says. I asked --

LAH: Data is what we should be driven by.

FANN: First of all, when we talk about transparency, from day one, the entire process has been live streaming, so anybody --

LAH: On OAN with cameras controlled by OAN.

FANN: Are you saying OAN is not a credible news source?

LAH: Yes.

FANN: Okay. I'll remember that. CNN is saying OAN is not a credible one.

LAH: Yes.

FANN: Okay. Well, we're paying the $150,000, we are paying for some of the security and we are paying for the cost of the coliseum. Well, we're paying for our fair share. Anything over and above that is being covered by others. I do not know who they are. But I know from the get-go there was a lot of grassroots people. I have been told that there are people sending in $10, $50 checks, $100, because they want to see this audit done.

LAH: Do you believe this is helping democracy?

FANN: Absolutely, absolutely.

LAH: Will you do this every election?

FANN: It will be a lesson in democracy that we answer people's questions, and I want the people -- I don't care if you're in Arizona or any state across the nation. If we have those kind of doubts, we owe it to them to answer their questions.


This will be the basis of a gold standard.


SCIUTTO: Listen, no one in a position of power -- I mean, Republicans in that state deny that. What's interesting, Poppy, as you watch it, that claim about all these dead voters, it's not new. Trump said the same thing about losing the popular vote in 2016 and then set up a commission which found nothing. I mean, it's a standard go-to play when he loses votes, right? Oh, they must all be dead people.

HARLOW: I think the scariest part of that -- kudos to Kyung and her team for asking the important questions, finally getting her to try to answer some, is that she indicated it's going to keep happening, Jim, right? It's not isolated to the 2020 election. So this is what we've got then as long as she's senate president in Arizona.

SCIUTTO: Yes. And the other piece of this, right, is beyond feeding the big lie, right, and feeding doubts. You do have a good half of Republican voters who buy that big lie about the election, is you've now instituted rules where partisan legislators can overrule those unbiased that, if you want to call them that, but whatever, election officials of any party in the state. That's now in the law. They can do it if they don't like the result.

HARLOW: Yes. Certainly, in Georgia, that's a big part of it too.

All right, our thanks to Kyung. I wish she was here to say what a good job she did.

All right, well, Senate Majority Leader Chuck Schumer is holding a key vote tomorrow where senators will decide whether to send the January 6th independent commission bill to a final vote.

SCIUTTO: Yes. I mean, what's happening here is Senate Republicans are going to filibuster a bipartisan plan for a bipartisan investigation. To overcome that, you need 60 votes, therefore, ten Republicans. It doesn't look like they have it.

CNN Chief Congressional Correspondent Many Raju on Capitol Hill. So, a last-minute effort here, Susan Collins suggesting some changes. Based on your reporting, is it going to get to ten?

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: No, it's not. And those changes that she's suggesting, in fact, have gotten some resistance from the most powerful man in the Senate, Chuck Schumer himself, who is concerned about what she's suggesting. The concern she has is that the staff on this commission, if it were to be enacted, would be Democratic-leaning and the new Democratic appointed chairperson would have undue influence over that staff appointment. Schumer does not like what she is proposing here.

But, nevertheless, they may not even get to the point where they can amend the bill on the floor because the first test vote tomorrow is to open up debate on the Senate floor to break a filibuster, they need 60 votes to do that. And they don't have ten Republicans who are willing to break ranks, just a handful. It's unlikely to grow just beyond that.

Now, this proposal, if it were to become law, would be modeled after the 9/11 commission. There would be ten commissioners selected on both sides. They would have to have a report done by the end of the year. But Republicans are very clear that they're concerned that this could become an election year issue, it could potentially hurt their ability to take back control of Congress.

Even Mitch McConnell, the Senate Republican leader, said very clearly yesterday that he wants the 2022 elections to be about looking forward, not re-litigating Donald Trump. And the concern is, even though this would be an evenly divided commission, that this could bring the issue back into the forefront here.

So, there's really no path for Democrats. There's some talk about once the Republicans filibuster this tomorrow, perhaps the Senate Democrats would change the rules to allow the bill to move forward on a simple majority vote. But there is resistance in the ranks to do that, namely from Joe Manchin of West Virginia, who reiterated to me repeatedly yesterday that he would not agree with any efforts to blow up the Senate's filibuster in order to get this passed, even though he does support the commission going forward.

So the end result here, guys, is that the Senate Republicans are going to block this tomorrow, then Democrats are going to have to take matters into their own hands, potentially setting up a select committee in the House to investigate things on their own. And then they would lead the investigation. It would not be a bipartisan one, as this legislation proposes.

SCIUTTO: It's a remarkable use of the filibuster after members of GOP leadership called for a commission like this in the aftermath of January 6th. That's quite a change. Manu Raju, thanks very much.

Well, reports that a special grand jury has been convened as part of a probe into the Trump Organization, what could the political fallout be for the former president?



SCIUTTO: A major story we're following this morning. The Washington Post is reporting that Manhattan's top prosecutor has now convened a grand jury to decide whether to indict former President Trump or possibly others associated with the Trump Organization.

HARLOW: Prosecutors have been looking into whether the Trump Organization misled lenders and insurance companies about the value of its properties and if they paid appropriate taxes based on all of that.

With us on the political side of this big development, Amanda Carpenter, Political Columnist for The Bulwark. Good morning, Amanda.


HARLOW: Hey. You saw the response from Trump calling it a witch hunt. That's not a surprise. What I'm interested in is what this is going to means for the Republican Party. I mean, this seems like another diverse and, clearly, Trump is going to want them to rally to his defense. CARPENTER: Yes, and I don't think it will be that difficult, Poppy. I think for a lot of Republican voters, Trump supporters, this has the air of, well, here we go again. I mean, there's a lot of investigation fatigue out there. You have to remember, we've been through the Mueller investigation, impeachment one, impeachment two, we're talking about a January 6th commission, this investigation.


There's another parallel one in New York.