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CNN NEWSROOM

Trump University Papers Released; Will Rio Be Ready To Host The Olympics?; Russia Denies Claims It Attacked in Syria; Iraqi Army Suffers Retaliation From ISIS; Trump to Give Speech Regarding Collected Funding For Veterans; Penguins Beat Sharks in Game One of Stanley Cup Finals; Alexander Rossi Runs Out Of Gas Prior To Winning Indianapolis 500. Aired 10:30-11a

Aired May 31, 2016 - 10:30   ET

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


[10:30:50]

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): That almost everything about Trump University was a lie starting with the name.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: ... action is what Trump University is all about. GRIFFIN (voice-over): It wasn't a University. And its teachers

didn't teach any Donald Trump secrets, according to New York's Attorney General.

TRUMP: And these are all people that are hand-picked by me.

GRIFFIN (voice-over): And none of Trump University's experts who taught at the seminars were picked by Donald Trump.

ERIC SCHNEIDERMAN, NEW YORK ATTORNEY GENERAL: There wasn't one piece of his pitch that was actually true. And they weren't Donald Trump's secrets. It's been admitted in -- the President of Trump University admitted that Trump never had anything to do with writing the curriculum.

GRIFFIN (voice-over): In fact it's all admitted in a 2012 deposition. Portions of which were recently released and reviewed by CNN. The President of Trump University, Michael Sexton, stated under oath, "None of our instructors at the live events were hand-picked by Donald Trump." Sexton was asked, "Did anybody at Trump Organization work on the curriculum for the 3-day workshops?" His answer, "no, they did not." As for the Trump secrets of success that were supposed to be taught, Sexton testified, "Mister Trump has made investments with foreclosures. We cover investing with foreclosures."

Bob Guillo, who is suing Donald Trump for his $35,000 paid in tuition, says there were other so-called secrets that really weren't.

BOB GUILLO, TRUMP UNIVERSITY STUDENT: For example, they would put up a slide and they would say, if you want to know about your tax deductions as a business, go to IRS.gov. If you want ...

GRIFFIN: That was a tip.

GUILLO: Yes, that was a tip. If you want to go to find property, go to trulia.com or one of these other ...

GRIFFIN: Another great tip.

GUILLO: Another website like that. And I just was shaking my head all the time. And I kept hoping that the next retreat that I would take, that I would get some knowledge that I never had before. But never did.

SCHNEIDERMAN: It was a scam. The extent they had any expertise it was -- it's suckering people into spending more money.

GRIFFIN (voice-over): A review of Trump University presenters and so- called real estate experts revealed questionable credentials and inflated resumes. Documents filed in the case show many instructors had little real estate experience. Trump University background checks on some instructors couldn't even determine if they graduated from high school.

In a statement to CNN, Trump's lawyer insists Mister Trump not only met with the instructors and professors who designed the course, but also contributed to the curriculum. And added, the vast majority of Trump University instructors were real estate experts.

GRIFFIN: Wow this is a lot of books.

FELICISIMO LIMON, TRUMP UNIVERSITY STUDENT: Yes, it's a lot of books. Believe me, it's a lot of money that I've spent with this guy.

GRIFFIN (voice-over): Felicisimo Limon who paid $26,000 to Trump's school says he has at least learned one lesson. He no longer believes what anyone tells him, even a billionaire.

(END VIDEOTAPE)

CAROL COSTELLO, CNN HOST: CNN's Drew Griffin reporting. With me now, Eric Schneiderman, he's the Attorney General for the state of New York. He's representing students who claim they were defrauded by Trump University. Welcome, sir.

ERIC SCHNEIDERMAN, NEW YORK ATTORNEY GENERAL: Good to be here.

COSTELLO: So among the documents released later today will be this sales playbook. This is the only document that Trump's attorneys did not want released. Why?

SCHNEIDERMAN: They actually resisted getting to trial, they resisted disclosing documents. It's very hard to keep documents in a fraud case secret. There's a public interest in having this out there. Part of the point of suing someone like Donald Trump for a phony university and committing fraud against thousands of people, is deterrence. Is to get it out there so people have warnings and other fraudsters are discouraged. So you have to make a pretty strong argument to withhold anything.

Their claim appears to be based on the idea that they want to revive this fraudulent university scheme someday in the future. Which will be of great interest to the New York State Department of Education. Which was chasing them around for years trying to shut them down because they were claiming to be a New York university when they weren't.

COSTELLO: Because Trump's lawyers says these sales playbook would release trade secrets, right?

SCHNEIDERMAN: You are not allowed to protect the trade secrets of a three-card monte game. You are not allowed to protect the trade secrets of conducting a fraud, which is all the playbooks are. We have the playbooks. Sections of the playbooks have been out in our papers that we've submitted in the New York court.

It is clearly just a motivational speech to try and sell people at their weekend seminar, that you can't possibly learn everything about real estate in three days. You've got to spend $10,000, $20,000 on what were called the "Trump Elite Program." So the playbook just shows that it was a pitch up to try and dupe these people into spending more money.

COSTELLO: OK so something that -- I didn't find it confusing, but it was conflicting information in Drew's package -- there was a deposition that you took that said Mister Trump never met any of the professors or teachers that worked at Trump University. And then Mister Trump's lawyers came back with a statement that said he did personally meet with the professors and instructors at Trump University. So which is true?

SCHNEIDERMAN: Well there's no evidence, and Trump's lawyers, I'm not sure what they're talking about. But both Mister Trump and Michael Sexton, who is the President of Trump University have testified under oath he did not pick the instructors, he did not meet the instructors. So the whole pitch "My hand-picked experts will teach you my personal secrets," was a lie.

This was a fraud from top to bottom. He's using every trick he can do to delay the release of documents to delay the trials. Attacking the judge for his ethnicity. Attacking me and accusing me of conspiring with the President of the United States ...

COSTELLO: Well let me, let me ask you about that. Because Mister Trump did intimate that this was maybe politically motivated by a judge who has a bias against him. He said if the -- he said, he called the judge a hater. And he said he was Mexican and any other judge would have dismissed the case.

SCHNEIDERMAN: Well no judge has dismissed any of the cases. There are three cases. On March 1st we just got a ruling in the New York case, and there are two cases in California, that ruled in our favor and against Mister Trump on every contested legal issue, in essence. So his defenses, strongest defenses, have been dismissed. He's taking it to New York's highest court for one more round of appeals. But no judge has dismissed this. Every judge has said these are valid fraud claims. You defrauded people out of money, they're entitled to their day in court. So he keeps saying it's an easy case to win but he keeps losing. All he's doing is delaying.

COSTELLO: Well he also says that this is a civil lawsuit. This is much different and far less important than Hillary Clinton's email investigation. Because of course, there's a federal investigation going on. In your mind is this a case of ultimate importance?

SCHNEIDERMAN: Oh this is a hugely important case. If you look at the facts of this case, this shows someone who was absolutely shameless in his willingness to lie to people. To say whatever it took to induce them into his phony seminars. Telling people who are in hard economic times -- we're talking about 2008, 2009, people desperate to hold on to their homes, to make some money. Convincing them that he will teach them his entrepreneurial secrets.

Trump's instructors would tell students -- victims of this university scam -- call your credit card company, you need credit to be big in real estate. Get them to raise your credit limits. And then they'd use that extra credit to make them buy more Trump seminars with their credit cards. They bilked people, it was shameless, it was heartless. It's important information to get out there. And I think that between the judge releasing these records and other things, I hope all the facts will get out that can between now and the election. I think it's important public policy.

COSTELLO: Oh I'm sure -- we'll be reviewing the documents -- I'm sure Drew Griffin in particular will be reviewing the documents. Eric Schneiderman, thanks so much for stopping by.

SCHNEIDERMAN: Thank you.

COSTELLO: Still to come in the Newsroom, turmoil gripping the 2016 Summer games. Scandals, crime, and Zika. Can Rio possibly be ready?

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COSTELLO: Back in 2009 when Rio De Janeiro was selected to host the 2016 Summer Olympic games, it was supposed to be the perfect picturesque backdrop for sports -- for the sports world's biggest stage. But now seven years later when you get up close and personal, the problems are mindblowing. From Zika to gun battles, drug gangs to economic despair. With just 66 days left for Brazil to clean up its act, athletes and fans are getting worried. Here's more now from CNN's Ivan Watson.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): It's hard not to be seduced by Rio de Janeiro. This spectacular city soon to be the host of the 2016 Summer Olympics. Two months before the start of the games, construction crews are putting in the final touches at the Olympic venues. GUSTAVO NASCIMENTO, HEAD OF OLYMPIC VENUE MANAGEMENT: Everything's

going to be ready on time. We're going to deliver the park fully commissioned, the 24th of July.

WATSON: But despite Rio's beauty, the city and Brazil as a whole, are facing some pretty daunting challenges. A whole series of unexpected setbacks leading some to wonder, are Rio's Olympics somehow cursed?

WATSON (voice-over): Just days ago, a warning from more than 100 international doctors calling for the games to be postponed or moved because the mosquito-borne Zika virus could threaten an expected half- a-million foreign visitors. That view rejected by the World Health Organization which does advise pregnant women to avoid the Olympics entirely because of the risk of severe deformities to unborn children.

And then there's the political and economic crisis. Turmoil after Congress suspended Brazil's elected President in an impeachment process last month. And high-level corruption scandals. During the worst economic recession in generations, which has left more than 10 million Brazilians unemployed.

The economic hardship aggravating Rio's endemic problems with violent crime. Daily gun battles between police and drug gangs in the city's impoverished favelas as well as a surge in robberies. This month members of the Spanish Olympic sailing team mugged at gunpoint.

FERNANDO ECHAVARRI, SPANISH OLYMPIC SAILOR: And we just turned around to see what was happening and we saw the pistols (ph) like this.

WATSON (voice-over): Olympic sailors also worried about Rio's notoriously polluted bay. A dumping ground for much of the city's raw sewage.

VICTORIA JURCZOK, GERMAN OLYMPIC SAILOR: We don't want to swim in it.

WATSON (voice-over): Rio's Mayor warns this isn't a first-world city.

MAYOR EDUARDO PAES, RIO DE JANEIRO: Don't come here expecting that everything will be you know, perfect. We live in a country that has economic crisis, a country with lots of inequality. With all the problems that we've seen concerning corruption, bribery. But the city will be much better than it was when we got the games.

WATSON: But even one of the Mayor's new infrastructure projects is now a deadly failure. This brand new spectacular cliffside bike path was supposed to be a showcase project for the Olympics. Instead it became a tragic setback when the waves took out part of the trail killing two people last month.

WATSON (voice-over): In the turbulent run up to the Olympics a virtual storm of bad news that leaves you wondering what could possibly happen next? Ivan Watson, CNN, Rio de Janeiro.

(END VIDEOTAPE)

COSTELLO: Still to come on the Newsroom, just as Iraqi forces start gaining ground against ISIS, they face a fierce counterattack. Militants using suicide bombers, boobie traps and human shields. And the stock market is back open after a long weekend. Now trading down just about 50 -- just about 45 points. Couple important economic indicators coming out today. The latest home price index will be released along with the consumer confidence index. I'll be right back.

[10:46:05]

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COSTELLO: Russia denying claims it led multiple air strikes on the city of Idlib in Syria. Those strikes destroying a civilian area near a hospital. At least 23 people were killed including women and children. It's unclear how many people were injured as rescue efforts are ongoing. Air strikes in Syria have escalated in an attempt to push out terror groups there.

Iraqi forces try to storm Fallujah from the South and are hit with an ISIS counterattack. The battle lasted for four hours. The militants using snipers, boobie traps, and even human shields to beat the Iraqis back. But the Iraqi forces say they stopped that attack and inflicted heavy casualties. CNN's Senior International Correspondent, Ben Wedeman has more for you now. Hi Ben.

[10:50:55]

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, hi Carol. Yes this battle is now into its 10th day and clearly it's only just beginning. You have this battle -- you mentioned, at the Southern end of Fallujah. This was the first attempt by the Iraqi military to really penetrate the city itself. And you see what happened. They also used apparently, car bombs as well.

Now the Iraqi army, some officers are claiming that they killed as many as 75 members of ISIS. However ISIS for its part, says that they killed 25 Iraqi soldiers and destroyed several military vehicles. But clearly this is going to be a long, hard fight.

Intelligence officers say there's anywhere between 500 and 2,000 ISIS fighters in this city. And of course many of them are from Fallujah. They have experienced fighting the Americans. Now of course they're fighting the Iraqi army. It's home turf, they are using their knowledge of the terrain to maximum advantage. They've dug trenches and tunnels as we've seen elsewhere.

So it's going to be a hard fight and extremely hard at the moment, for the approximately 50,000 civilians who the U.N. say are trapped inside the city. And the U.N. claims are being used as human shields by ISIS. ISIS is also reported to have executed young men who have refused to fight on their behalf. Apparently some ISIS members are angry that the people of Fallujah don't really want to die in this battle. Not surprisingly so.

Now the situation, humanitarian in terms of the humanitarian situation, it's been difficult for months since the city's been cut off by the Iraqi army. But we're hearing reports that people are subsisting on dry dates and drinking dirty water from the river, which is leading the U.N. to worry that there could be an outbreak of cholera.

COSTELLO: Ben Wedeman reporting live for us this morning, thank you. Still to come in the Newsroom, Grobe in, Briles out. Baylor University changes its head coach in the midst of a sexual assault scandal.

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[10:57:15]

COSTELLO: All right I take you up to Trump tower, you see them checking the microphone there. At any minute now Donald Trump will likely be behind that microphone and he'll be detailing the donations, the amount of money that he has collected for veterans. And he'll also tell reporters where those donations will go, to what organizations. Reporters are already assembled and of course we're just awaiting Donald Trump. When Donald Trump takes the stage, of course we'll bring you back to Trump tower here in New York City.

Checking some other top stories for you at 57 minutes past. Baylor University names an acting football coach in the wake of a sexual assault cover up involving members of the football team. Jim Grobe will take over for Art Briles who was recently suspended. Minutes after this new coach was announced, Baylor says its Athletic Director had resigned. The president of the school, Kenneth Starr, was also moved to a new role in the wake of the scandal.

Blink and you missed it. In a fast-moving game the Pittsburgh Penguins beating the San Jose Sharks in game one of the Stanley Cup finals. Pittsburgh winning 3 to 2 over the Sharks, game two of the series tomorrow. The Golden State Warriors are back on their way -- are on their way back to the NBA finals beating the Oklahoma City Thunder 96 to 88. Earlier in the series the Warriors were down three games to one. They are only the third team to ever come back from that big of a deficit. The Warriors were losing at halftime then Steph Curry stepped up, scoring 36 points in last night's game.

Yes we've all run out of gas before. So can you believe rookie Indianapolis 500 winner Alexander Rossi ran out of gas before he crossed the finish line on Sunday? You've heard that. He remembered those tense moments on NEW DAY.

(BEGIN VIDEO CLIP)

ALEXANDER ROSSI, 2016 INDIANAPOLIS 500 CHAMPION: Yes we ran out of gas kind of out of turn four coming down to the start/finish line. And it was the -- obviously the longest time it took for me the entire month of May, to get there. But also it was the most stressful, obviously. Because I knew that there was cars coming at probably 100 miles an hour quicker than I was going. And I was constantly looking in my mirror, at the outer (ph) brakes, in my mirror, at the outer (ph) breaks. And it was just like when I finally crossed and there was no one to my right it was just like relief. (END VIDEO CLIP)

COSTELLO: Kind of nice (ph) he travels with that big trophy, right? It's awesome. Rossi went the final 36 laps without refueling. A long time in a track like Indianapolis but man, it's an awesome story. And what an awesome guy. A new champion for America, right?

Thank you for joining me today. I'm Carol Costello, AT THIS HOUR with Berman and Bolduan starts now.

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