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Trump Foundation Ordered to Cease and Desist; Trump Tax Bombshell; U.S. Suspends Talks With Russia Over Syria. Aired 3-3:30p ET

Aired October 3, 2016 - 15:00   ET

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


[15:00:12]

BROOKE BALDWIN, CNN ANCHOR: We continue on, top of the hour. You're watching CNN. I'm Brooke Baldwin. Thank you for being with me.

Let's begin with the breaking news straight from the campaign trail. Just weeks before America votes, you have Hillary Clinton seizing on the revelations about Donald Trump's taxes, "The New York Times" reporting that Trump lost nearly $1 billion -- this was back in 1995 -- and perhaps may have avoided paying federal income taxes for nearly two decades as a result of that nine-figure loss.

While CNN has not been able to independently verify these documents obtained by "The Times," Trump's campaign has not challenged any of the details, instead, touting his business savvy.

Moments ago at a campaign rally in Toledo, Ohio, here was Hillary Clinton as she took time to slam Donald Trump over his possible tax avoidance and business failures, calling for changes to the tax code in general to prevent the wealthy from exploiting these sorts of loopholes.

Jeff Zeleny is in Akron, Ohio, for us, where the former secretary of state will be speaking later tonight.

Jeff, her point was, you know, paying the fair share, we're all paying to build up military, build up schools. And she's saying, if this is true, Donald Trump did not.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Well, Brooke, this is something that the Clinton campaign has been waiting for in a sense. She's been talking about the transparency argument about how he's not released his tax returns.

And now she really devoted a big part of her speech this afternoon in Ohio to explaining why, at least explaining why "The New York Times" reported that he had a $900 million loss in 1995 on his tax returns, as you said, which would allow him under law to perhaps not pay federal income tax for the next 18 years.

But she talked about what that actually means to average citizens, average voters and average taxpayers about what they are actually paying. Let's take a listen.

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON (D), PRESIDENTIAL CANDIDATE: Now, how anybody can lose $1, let alone a billions dollars, in the casino industry is kind of beyond me, right?

(CHEERING AND APPLAUSE)

CLINTON: It's just hard to figure. But, as a result, doesn't look like he paid a dime of federal income tax for almost two decades.

Now, while millions of American families, including mine and yours, were working hard, paying our fair share, it seems he was contributing nothing to our nation. Imagine that. Not fair. Nothing for Pell Grants to help kids go to college. Nothing for veterans. Nothing for our military.

(END VIDEO CLIP)

ZELENY: And that is really what we're going to hear the Clinton campaign talk more about, Brooke, just what that means when you may not pay federal taxes.

Now, there's been a bit of an academic discussion, if he was following the letter of the law here. And tax experts are saying, yes, he probably was if this is true, but what she is trying to do is make the case that he really was not doing his fair share and really going after his business acumen as well.

It's one of his strong suits, his strength as a businessman, really trying to hit that. And she needs to do that, Brooke. This is what the context is politically here. She's been running behind in Ohio. A lot of those working-class voters, white working-class voters have been finding something they like in Donald Trump. They like his message of change. She's trying to puncture that here today.

But, Brooke, she does have some ground to make up in Ohio and she hopes to do it on the back of those tax returns -- Brooke.

BALDWIN: Jeff, thank you so much.

What Jeff was just reporting, these stunning allegations that Donald Trump may have avoided paying federal income taxes for nearly two decades here, it's raising a lot of questions about tax avoidance, Trump's business acumen.

His campaign supporters, though, they see it differently.

(BEGIN VIDEO CLIP)

RUDY GIULIANI (R), FORMER MAYOR OF NEW YORK: The reality is, this is part of our tax code. The man is a genius. He knows how to operate the tax code.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: What it shows is what an absolute mess the federal tax code is. And that's why Donald Trump is the person best positioned to fix it. There's no one who's shown more genius in their way to maneuver around the tax code.

(END VIDEO CLIP)

BALDWIN: The tax news capping a rough week for the Republican nominee following his disappointing showing at that first presidential debate and his feud with a former Miss Universe.

Joining me now to discuss, CNN political commentator Van Jones, who supports Hillary Clinton, CNN senior legal analyst Jeffrey Toobin and former Virginia Governor and Republican candidate for president Jim Gilmore, who supports Mr. Trump.

So, welcome to all of you.

And Governor Gilmore, let me just begin with you and the sound bites we just played, both high-level Trump surrogates. Both used the G- word, genius, with regard to this Trump tax-avoidance story.

[15:05:04]

Would you agree with that? Is Trump a genius?

JAMES GILMORE (R), FORMER VIRGINIA GOVERNOR: Well, I don't call anybody a genius, except maybe Thomas Jefferson.

But it seems to me that what I saw was the Hillary Clinton comments, which I thought were deplorable

demagoguery. The fact is that the law requires you to pay taxes. And if you make money, you pay taxes on money. And if you invest money and you take a loss, then you take a loss.

And it's all perfectly legal and appropriate under the tax code. If you don't like the tax code, change the tax code. But the tax code is intended to encourage people to invest, to create jobs, to make investments.

And if you don't want to do that, that's fine. We will go to a flat tax or something like that. But I think that it's deplorable, deplorable for Hillary Clinton to stand up there and to demagogue that way and to suggest that Donald Trump is guilty of some sort of tax evasion or crime. That's sending a terrible message to the American people that is a lie.

BALDWIN: Well, I think she was just really also making the point, listen, if you lose a dollar or a billion with casinos in his business dealings in '95, when the economy was not too shabby, she was questioning his business acumen.

GILMORE: Well, I certainly wasn't in the casino business and I don't think anybody on this stage was on the casino business.

The fact is, he was investing money in order to create jobs, in order to create business. And sometimes, if you're in the free enterprise system, you make money and you pay taxes on it. And sometimes you lose money. Under the tax code, you get to carry that over. Now, Hillary Clinton knows nothing about the free enterprise system.

She's been a bureaucrat all of her life. And how dare she stand up there and take a person who's actually engaging in the free enterprise system and declare that somehow they're guilty of some sort of impropriety? That's deplorable.

BALDWIN: Van, how do you see it?

(LAUGHTER)

VAN JONES, CNN POLITICAL COMMENTATOR: Well, look, that -- you're doing a great job generating some outrage there.

You probably have 0.1 percent of all the outrage in the country. The rest are people outraged at what seems to be a very tough fact to swallow. And that is, no -- if you are rich enough, no matter what you do, you cannot lose.

And if you're a regular person, it feels like, no matter what you do, you can't win. How in the world do you get to be called a genius when you are now being exposed for having lost $1 billion, $1 billion -- that's a billion -- and then are rewarded under our system?

That -- if you don't understand how even small business owners and others who are not bureaucrats just find that tough to swallow, I think you're out of contact with ordinary people. This is the great fear that people have, that there's a class of people that literally cannot fail and the rest of us who can almost never find a way to succeed.

And I will say one more thing. This begins to unravel the entire myth of Donald Trump, because it turns out he's taking these bankruptcies -- and it's not just him. He's drowning and hurting and knocking off all these other smaller people who invested with him, who had contracts with him. And he gets away scot-free.

And so it's not just the taxes. It's his mistreatment and his abuse of the bankruptcy system. This whole thing is now falling apart.

BALDWIN: Jeff, I promise I'm going to get to you in just a second.

But, Governor Gilmore, let me jump in and also ask. We heard from Mark Cuban. I think patriotic was the word he used today to describe the act of paying taxes.

GILMORE: Oh, interesting.

BALDWIN: We heard Donald Trump saying when Hillary Clinton was saying, and perhaps when the issue of taxes came up, and perhaps he hasn't been paying taxes, you see the double box and Trump saying, it's smart.

How does he think that he will build a better military and better schools without income taxes?

GILMORE: Yes, I wouldn't necessarily call it smart. I would call it within the law.

If you don't like the tax system, go to the Congress and tell them to extract more money from the American people. That's exactly what Hillary Clinton says she's going to do if she becomes president of the United States. She's going to reduce the ability to invest, reduce the ability to have productivity.

JONES: No, sir.

GILMORE: Reduce the ability to hire people. That's what she says she's going to do.

JONES: That's the opposite of what she's saying.

(CROSSTALK)

GILMORE: No, I heard it myself. That's exactly what she's saying.

(CROSSTALK)

GILMORE: She says she's going to increase taxes on productivity, increase taxes on people who can invest.

JONES: No.

GILMORE: Is that not true?

JONES: What she said -- well, that's your spin on it.

What she's saying, which makes a lot sense to ordinary people, she's tired of ordinary people carrying the full burden and the full freight for America and people like Donald Trump skipping away scot-free. You can call that what you want to.

But that's not going to stop productivity. What's productive, sir, about crashing a casino and then getting off scot-free as a billionaire on your taxes? That's not productive.

GILMORE: This isn't just about Donald Trump. This is about the entire American people who engage in the free enterprise system.

(CROSSTALK)

JONES: Like small business owners who pay their fair share of taxes.

(CROSSTALK)

GILMORE: I have been a small business owner.

(CROSSTALK)

JONES: And she's not taxing them.

GILMORE: They pay their taxes. But if you don't make any money, you don't pay taxes.

(CROSSTALK)

[15:10:02]

JONES: She's not going to raise taxes for small business. And you know it. She's going to raise taxes for people like Donald Trump and other people who have gotten away with murder this past 20 years.

(CROSSTALK)

GILMORE: Well, that's your spin on it.

But the fact of the matter is that there's not enough money among the rich to pay the kind of burdens that the Democrats keep adding onto it.

BALDWIN: OK, this conversation perfectly exemplifies the conversation that is being had in this country, two different, two very different obviously visions of what's happened.

Let me cut through to you, Jeff Toobin, because reading the piece in "The Times" and also the Susanne Craig, who is a correspondent who was digging into the taxes issue and how she -- good old-fashioned snail mail got this document dump in her mailbox. How did this even get leaked s my question to you, sir?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, a lot of people have access to someone's tax returns.

I'm not talking about within the government. I'm talking about accountants, I'm talking about family members, talking about other people who work in a big company like the Trump Organization. It does not surprise me that someone had access to it and someone who had an axe to grind against Donald Trump just simply made a photocopy, and in a good, old-fashioned way, put it in the mail.

That's the way a lot of leaks used to happen. It feels kind of old- school now, but still works.

BALDWIN: The end of Susanne's piece is, check your mail, reporters.

Let me ask all of to you stay with me here. I want to talk more about the breaking news that's just come in.

New York's attorney general just issuing a cease-and-desist order against Trump's charity, the Trump Foundation. Hear why and how the Trump campaign is responding to that.

Also, never mind Bill Clinton's past, Trump now suggesting perhaps it was Hillary Clinton who was the one who has not been faithful. Is that a smart strategy or might that tactic backfire?

We're also keeping an eye on a powerful Category 4 hurricane close to making landfall. Is the U.S. at risk? We will have a live report. You're watching CNN. I'm Brooke Baldwin.

(COMMERCIAL BREAK)

[15:15:52]

BALDWIN: We're back. You're watching CNN. I'm Brooke Baldwin.

Thirty-six days from Election Day, Donald Trump's campaign taking hits for his past taxes. His charity is just getting notice from of a violation from the state of New York. The attorney general there sent the Trump Foundation a cease-and-desist order, saying it -- quote -- "must immediately cease soliciting contributions or engaging in any other fund-raising activities in New York."

Let's go first to Sara Murray on that, our political reporter. She is in Pueblo, Colorado, where Trump will hold a rally in just the next couple of hours.

This is all about the Trump Foundation, right, not having the proper paperwork or the certification in the state of New York. Explain that for us.

SARA MURRAY, CNN NATIONAL POLITICAL CORRESPONDENT: Well, that's right, Brooke.

Essentially, what the attorney general is saying is the Trump Foundation never properly registered as a charity to be able to solicit donations. And that means they didn't have to go through the same rigorous processes that other charities go through, providing financial information, going through audits.

The attorney general is saying none of that happened for the Trump Foundation. Now, the Trump campaign is batting back. They're seizing on the fact that New York Attorney General Eric Schneiderman is a Hillary Clinton supporter and essentially questioning whether this investigation is politically motivated.

I want to read you the statement that Trump campaign spokesman Hope Hicks put out today, saying: "While we remain very concerned about the political motives behind A.G. Schneiderman's investigation, the Trump Foundation, nevertheless, intends to cooperate fully with the investigation. Because this is an ongoing legal matter, the Trump Foundation will not comment further at this time."

Brooke, of course, this comes as "The Washington Post" has done some phenomenal reporting that really questions the way Donald Trump has used his foundation in some ways, apparently, to benefit his businesses -- back to you.

BALDWIN: Yes, we talked to David Fahrenthold just last hour. He's been the one digging and digging.

Sara Murray, thank you so much.

Let me bring my panel back in with me here.

And, Jeff Toobin, to you, sir.

The cease and desist, what exactly does it mean for the Trump Foundation? Might this mean that the foundation pays back the -- I don't know even if millions is the right word. I don't know how much that his foundation ultimately collected.

TOOBIN: I don't think there's a remedy in law to make them pay back. They could be shut down. And I think that's the most common remedy for serious violations.

But just -- for people to just remember why foundations exist, the whole idea of a foundation is that they are allowed to accept money, for which people get tax deductions, because they're doing good works. You can't just open a checking account and say you're a foundation. States have to certify that foundations are doing good works.

Apparently, the Trump Foundation didn't do any of that registration in New York. So the state of New York doesn't know if they are doing the kind of work that is properly within what foundations are supposed to do.

One of the ironies of this story is that people are saying Donald Trump doesn't give much to the charity and the foundation is largely inactive. So, it may be that the attorney general is telling Donald Trump to stop doing something he isn't doing at all.

BALDWIN: And just quickly, Jeff, on the politics of this, we were talking to David Fahrenthold of "The Washington Post" last hour, and I was saying to David, why didn't the A.G., who is openly a supporter of Hillary Clinton, why didn't he just hold off until after the election, so there's no perception of playing politics?

And he said to me, Brooke, I'm the one who's been bagging down his door wanting answers.

Do you think that that's a fair assessment as far as politics here?

TOOBIN: Well, I think one thing that's important to remember, a lot of law enforcement officials, every attorney general in the country, I think, certainly most of them, is an elected official.

A lot of prosecutors are also politicians in this country. They run as partisan Democrats or Republicans. So, this is sort of an inherent problem in the American legal system that prosecutors are also bound up with politics. And people can make their own judgments about which role is most important to them.

BALDWIN: OK. OK.

Governor and Van, let me just end with you. And I want to take the time to plot out October. It's just October 3. This is the final stretch.

[15:20:02]

I want each of you -- Governor, I will defer to you first on two things your candidate needs to do in these waning weeks.

GILMORE: Well, Brooke, very quickly, number one, on the filing in New York, I have seen plenty of this. It's routine paperwork. They need to file.

The order just says file, and it will be -- it's going to be just fine. So, I would not conflate this up into some sort of allegation of some sort of illegality or impropriety.

Second thing is, yes, what does Trump need to do? Number one, he needs to dry home the fact that he stands for change. Change is going to mean a more robust economy, more jobs and more opportunities, because he's going to encourage a growing economy, which we have not had in the last eight years. And that's going to be a change.

And the second thing that he needs to do is to emphasize Hillary Clinton is disqualified from this race by hiding her e-mails, by behaving the way that she did by being secretary of state with the Clinton Foundation. She's more of the same and more of the same and more of the same.

And that's the contrast that I think we're going to see the rest of the way until November.

BALDWIN: OK, Van Jones, your turn.

JONES: Well, first of all, to say that we're not growing, haven't grown for eight years, we grew out of a massive hole that George W. Bush left in the economy, and we have had a more sustained growth for a longer period of time. But I will leave that for another segment.

Hillary Clinton needs to do two things, one, keep preparing for debates, because, when she prepares for debates, it's amazing. I'm like, bring out the popcorn. She's awesome on the debate stage.

And then, with regard to the millennials, she needs to -- she's saying all the right things, but she needs more validators. She needs to get a big surrogate surge going for the millennials in the swing states. She is going to be just fine.

BALDWIN: OK. Van Jones, Governor Gilmore, Jeffrey Toobin, thank you, gentlemen, very much.

Meantime, we have to focus on Syria, breaking news in the war there, as United States formally has suspended talks with Russia, the White House saying its patience has run out. What does that mean for the people stuck in the war zone?

Just today, a hospital bombed for the third time in less than a week.

(COMMERCIAL BREAK)

[15:26:38]

ANNOUNCER: This is CNN breaking news.

BALDWIN: Here's the breaking story out of Syria.

The U.S. has just suspended talks with Russia after a failed cease- fire agreement in Syria. The Obama administration says Moscow is not living up to its end of the bargain and that its patience has run out, this after another Syrian hospital is destroyed in a bombing.

Look at this. Activists say bunker-buster bombs hit the medical facility here in Aleppo, killing at least seven people and leaving others just trapped under the rubble. This hospital has been bombed three times in the past six days.

This is just a nightmare scenario that people there in Syria are far too familiar with, indiscriminate attacks ripping apart families and children lost.

Just last week, a 5-year-old girl was pulled from the remnants of a building that was just razed to the ground.

Frederik Pleitgen has that dramatic video, but just a warning first. What we're about to show you may be tough to watch.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN CORRESPONDENT (voice-over): A young girl trapped, weeping, her uncle, who's on hand, responds:

UNIDENTIFIED MALE (through translator): Oh, my soul, we are coming to save you.

PLEITGEN: The girl, Hazal al-Hatrani (ph), 5 years old, almost the exact duration of Syria's conflict.

In her lifetime, she's known only war. Now she lies trapped under the dark, dusty debris, rescuers pouring water into a crack, hoping to give her some relief.

UNIDENTIFIED FEMALE (through translator): Daddy, very dusty here. I can't see anything.

UNIDENTIFIED MALE: Don't worry. We will rescue you and wash your face and give you water to drink.

PLEITGEN: Finally, they manage to pull Hazal out, covered in dust, clearly in pain, but at least she's alive.

(END VIDEOTAPE)

BALDWIN: Did you hear that? She said, daddy, it's very dusty in here, the realities of what's happening there.

Nick Paton Walsh is standing by, who is our senior international correspondent live, in Beirut for us this evening.

Nick, we're talking about this hospital. It's been hit multiple times. What more can you tell us about this most recent attack?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Brooke, you have to bear in mind that we're talking about the use of bunker-busters, devices often created by militaries to get at secure military stronghold facilities, being used in Aleppo against, as the accusation goes, key medical facilities here, this the M10 hospital. This attack, the third, as you say, in just six days, repeatedly struck again and again. This device designed to penetrate through the defenses they had used because they knew they would be targeted. Just remember the cynicism there. This is where people go to get help when they're wounded, yet still the highest-grade weaponry being used, presumably by the Russians, to target it here.

Two medical personnel, five maintenance personnel killed and, of course, that area repeatedly hit, struggling now to find adequate medical care. That hospital is out of service, they say. It's structurally unsafe.

At the same time today as well in another area in the countryside of Hama to the south, a hospital that was 50 feet inside a mountain, inside a cave, was also targeted by a bunker-buster bomb.

It's precise, it's lethal, and it's persistent. And it is, frankly, designed, many observers here say, to render civilian life in these areas impossible.

While Russia was talking peace -- and that's the bedrock of the U.S. decision to suspend cooperation with them here -- while Russia was talking peace with the U.S., it clearly must have also been talking with its Syrian allies about amassing the thousands of troops who are said to be outside the rebel-held area of Aleppo and probably getting this kind of firepower together.

We haven't seen anything really quite like it so far in the war.