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Cohen's Cash; FBI Informant in Trump Campaign?; Interview With Connecticut Congressman Jim Himes; White House Stands By Trump Claim Mueller Probe is "Witch Hunt"; Manafort's Former Son-in-Law Reaches Plea Agreement with Investigators. Aired 6-7p ET

Aired May 17, 2018 - 18:00   ET

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

[18:00:01]

WOLF BLITZER, CNN HOST: As the special counsel reveals the full scope of his authority to a federal judge.

Spy accusation. President Trump tweets that the Obama administration planted an FBI informant in his presidential campaign, calling the allegation -- quote -- "bigger than Watergate."

And exposing Cohen's cash. What motivated the leak of Michael Cohen's financial records? I will talk to Ronan Farrow of "The New Yorker" magazine, who broke the story.

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

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following breaking news, President Trump now trying to tempt Kim Jong-un apparently to keep the summit meeting, the summit date with the North Korean leader before it is canceled.

The president promising unspecified protections that he said would make Kim Jong-un feel very, very happy.

We will talk about that and more with Congressman Jim Himes of the Intelligence Committee. And our correspondents and analysts are all standing by.

But, first, let's go to our senior White House correspondent, Jeff Zeleny, who has got all the latest developments for us -- Jeff.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Wolf, good evening.

There's no question President Trump wants to make this summit in Singapore next month happen. No question at all. The White House is indeed making plans behind the scenes for it to happen.

But we did hear from the president today for the first time talking about this. He was talking about sort of tempering expectations certainly that he has been raising himself for weeks. He says, if it happens, fine, if it doesn't happen, fine.

Wolf, we heard for the first time trying to place some blame on North Korea if it falls through, it is their fault, not his.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The best thing he could ever do is to make a deal.

ZELENY (voice-over): President Trump trying to keep the summit with Kim Jong-un alive tonight, gently urging the North Korean against backing away from landmark nuclear talks in Singapore.

TRUMP: we're willing to do a lot, and he is willing to do a lot also, and I think we will actually have a good relationship, assuming we have the meeting and assuming something comes of it, and he will get protections that will be very strong.

ZELENY: The president not saying what protections he is prepared to offer North Korea if it abandons its nuclear program.

But he contradicted National Security Adviser John Bolton, standing only a few feet away in the Oval Office, who suggested Libya could serve as a template for disarming North Korea.

JOHN BOLTON, U.S. NATIONAL SECURITY ADVISER: I think we're looking at the Libya model of 2003-2004.

ZELENY: That comment angered Pyongyang, considering Libya's leader, Moammar Gadhafi, was killed in 2011.

TRUMP: If you look at that model with Gadhafi, that was a total decimation. We went in there to beat him. Now, that model would take place in we don't make a deal most, likely. But if we make a deal, I believe Kim Jong-un is going to be very, very happy. I really believe he's going to very happy.

ZELENY: The president offered a measured response to North Korea's threat to call off next month's historic meeting, suggesting everything is on track.

TRUMP: We may have the meeting. We may not have the meeting. If we don't have it, that will be very interesting. We will see what happens.

ZELENY: But the president also wondering whether China and a broader trade dispute is behind North Korea's abrupt decision to move the goalposts for the talks.

TRUMP: I have a feeling, however, that, for various reasons, maybe including trade, because they have never had this problem before, China never had this problem with us, it could very well be that he is influencing Kim Jong-un. We will see what happens, meaning the president of China, President Xi, could be influencing Kim Jong-un.

ZELENY: The president was less interested in taking questions today about the Russia investigation, canceling a formal press conference with the NATO secretary-general as he visited the White House. But on the one-year anniversary of special counsel Robert Mueller

taking the reins of the Russia probe, the president had plenty to say on Twitter, marking what he called the second year of the greatest witch-hunt in American history.

At the White House briefing today, we asked Press Secretary Sarah Sanders about that message.

(on camera): This morning, the president marked the one-year anniversary of the Mueller investigation, saying it is disgusting, illegal, unwarranted and a witch-hunt.

But his own FBI director yesterday said it is not a witch-hunt. Why does the White House still believe it is a witch-hunt?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The president knows that there was no collusion in the campaign, and he has been quite clear about this. It's gone on for over a year. They have found no evidence of collusion and still strongly believe that it's a witch-hunt.

(END VIDEOTAPE)

ZELENY: Now, Sarah Sanders right there saying that they found no evidence of collusion just simply is not true.

That's been a soundtrack of the White House, that there's been no collusion, no obstruction of justice. In fact, we don't know the answer to the question if there has been or there hasn't been. That's what the special counsel's investigation is all about.

[18:05:00]

But, Wolf, there's still one question here at the White House tonight that will speak to how far this investigation is going. That is if the president will sit down with Bob Mueller or not. He still says he wants to. His lawyers do not. We will see how that ends up, Wolf.

BLITZER: Certainly will.

Jeff Zeleny at the White House, thank you.

Let's get some more on the special counsel's Russia probe, now exactly one-year-old.

Our political correspondent, Sara Murray, is joining us.

Sara, clearly, the investigation continues tonight.

SARA MURRAY, CNN NATIONAL POLITICAL CORRESPONDENT: Absolutely.

And as much as the president's allies may want it to end, there isn't really any sign that it is slowing down. In fact, now at least one federal judge is getting a peek at just how broad the scope of Mueller's mandate is.

(BEGIN VIDEOTAPE)

MURRAY (voice-over): A year into the special counsel's Russia probe, Robert Mueller filing an unredacted version of this memo in federal court, and revealing just how broad his mandate is after the federal judge overseeing charges against former Trump campaign chairman Paul Manafort demanded to see the document.

This as Trump's legal team is trying out other levers to put pressure on the special counsel, like Trump's lawyer Rudy Giuliani saying special counsel Robert Mueller's team has concluded it can't indict a sitting president.

RUDY GIULIANI (R), FORMER MAYOR OF NEW YORK: All they can do is write a report.

QUESTION: Right. Sure.

GIULIANI: So, how bad that is, we can deal with that. We can write too.

MURRAY: Giuliani telling CNN: "They can't indict. At least they acknowledged that to us after some battling."

That conclusion from the special counsel likely based on longstanding Justice Department guidelines, not an assessment of the possible evidence of any wrongdoing that Mueller has collected.

MICHAEL ZELDIN, CNN LEGAL ANALYST: Giuliani is trying to lay the groundwork for the proposition that the president, because he can't be indicted, doesn't have to testify. I don't think that's legally correct.

MURRAY: Giuliani's argument comes amid a standoff with Mueller's team over whether the president should sit for a voluntary interview.

GIULIANI: We're demanding from him, tell us what you have to get from an interview that you don't already have.

MURRAY: At the one-year mark, the special counsel's team has brought charges against 22 people and companies, notched five guilty pleas, and seen one person was sentenced.

A number of those charges were tied to Russia's interference in the 2016 presidential election, but so far none of them have extended to potential collusion between Trump associates and the Russians.

Despite the protests from Trump's team:

GIULIANI: So, it's about time to get the darn thing over with. It's about time to say, enough. We have tortured this president enough.

MURRAY: There's little sign the investigation is wrapping up. Early this morning, Mueller arrived at his nondescript government office building. His team continues to call in witnesses covertly.

Inside, witnesses are questioned in cramped rooms with mismatched furniture. Former Trump adviser Michael Caputo, who met with the special counsel's team in may, says it is a high pressure environment with few frills.

MICHAEL CAPUTO, FORMER TRUMP CAMPAIGN ADVISER: Listen, it is a very nondescript, very ugly government office with a bunch of locks on the door. The furniture is all second- or third-hand. They're all business over there. They're not looking for any luxury.

(END VIDEOTAPE)

MURRAY: Now, Americans have conflicting views about the Mueller probe and the legitimacy of it. But they're overwhelmingly united on at least one point in CNN's polling, and that is that they believe Mueller should issue a full report and it should be public, regardless of what he finds, Wolf.

BLITZER: I want you to stick around.

Our crime and justice reporter, Shimon Prokupecz, is with us as well.

Despite what the president is saying, despite what Rudy Giuliani is saying, this investigation of Robert Mueller, the Robert Mueller investigation, it continues full speed ahead.

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: Yes.

And there's no sign that it is going to end anytime soon. I think people forget, and I think those of us that are even covering this forget just how complex the investigation has been, the type of information it involves. There's all sorts of sensitive, top-secret information.

There's three cooperators at least at this point right now, information from other countries, information that has come from sources from all over the place that Robert Mueller is dealing with.

And then we also forget really what the larger mission here is and really what Mueller has been doing there is looking at what the Russians in many ways have done here. Yes, there's a component that involves the president and people who work for the president, but there's an entire other concern here, and that is the Russians, right, and how they interfered, the money that flowed perhaps into the campaign through straw donors.

We have done a lot of reporting on that, on oligarchs that have been questioned. There's so much that we don't know. And, really, Wolf, we forget about that. We forget the number of people that perhaps may be involved and get pulled into this investigation.

And then just last week a social media kind of consultant to Roger Stone was subpoenaed to appear before the special counsel. So, that indicates certainly to us that the special counsel is not even done interviewing witnesses and bringing witnesses before the grand jury.

BLITZER: And, Sara, to Shimon's point, the Mueller team, they have been very busy in court this week. MURRAY: Right.

There's plenty of court activity. Look, Paul Manafort is still dealing with charges in two different courtrooms, so that's been playing out. He is still saying he is going to trial. We have also seen a Russian company is playing hardball with the Mueller team, so as part of that whole court battle, we're getting more information just about the extent of the social media information Mueller's team pulled together, 1.5 to two terabytes, hundreds of social media accounts, a lot of those in Russian, that were part of the indictments he brought against 13 Russian officials, as well as a number of companies.

[18:10:20]

And as Shimon pointed out, we also have seen this indictment -- or sorry -- not indictment -- a subpoena for Roger Stone's former social media consultant.

So, it is pretty clear that they're moving ahead in a lot of these different avenues. I think the other point to Shimon's sort of discussion about the scope of this investigation is it is not abnormal for an investigation that's this complicated, for one that involves potentially white-collar crime to stretch beyond a year mark.

And we have certainly seen that in past investigations that were this complicated.

BLITZER: That's a very important point, good point, indeed.

The Giuliani strategy right now, what is it when he tells reporters, including our own Dana Bash, that Mueller informed them a sitting president can't be indicted?

PROKUPECZ: Well, I think there's a lot of noise.

And we all kind of, when Giuliani says something, we perhaps don't always take it at face value, but it is clear that he is in communications with the Mueller team, and that they have given him some indication that the president can't be indicted, that Mueller expects -- he anticipates Mueller is going to follow DOJ guidelines.

The issue here goes really beyond, I think, the president. Look, for Mueller and for those investigators, Trump is potentially a witness here as well, in that he may have information that Mueller wants just as a witness, because keep in mind, there are people that were part of the campaign that, A, are facing trial, in Paul Manafort, but there are other people who are still under investigation.

And Trump could provide key information. And then also Trump can provide information on even his contacts with Russians way, well before he ran for president, his time in Moscow during the Miss Universe Pageant.

All of that is something that the Mueller team has been looking at and would want to talk to the president about and would probably need to talk to the president about to finish their investigation.

And then, in the end, we do anticipate from everything we're hearing that there is going to be a report from the Mueller team that will go to Congress. And we will see what that says.

But this right now, Giuliani's strategy, by all sort of appearances, is there's a lot of noise and a lot of distraction and also stalling. But really this investigation in terms of the president really can't come to an end until a decision is made about whether or not he is actually going to talk to Mueller.

BLITZER: And as everyone who knows Robert Mueller says, it is having no impact on him and his team. They're moving forward.

All right, guys, thanks very much.

Let's dig deeper right now with our senior legal analyst, the former U.S. attorney Preet Bharara, who knows Bob Mueller, worked with him on several cases over the years.

Preet, thanks so much for joining us.

PREET BHARARA, CNN SENIOR LEGAL ANALYST: Sure.

BLITZER: All right, so big picture right now, what stands out to you at this one-year mark?

BHARARA: Well, all sorts of things stand out, the fact that he was appointed a year ago, the fact that they have indicted so many people, they have guilty pleas from a number of people, they have investigations going on that we probably don't know about.

At each inflection point in this case, I and others have come on the show unaware that certain people were under investigation, or unaware that certain people were about to be indicted or about to plead guilty.

So, what's interesting is the kind of things we're talking about that are public and that are unfolding in courtrooms in both the Eastern District of Virginia and in the District of Columbia. But what's more interesting to me, given all the reporting that is swirling around about various things relating to Russia and relating to other associates of Donald Trump and other former employees of Donald Trump, is how many things are yet to come.

So, this thing is not coming to a stop any time soon. It also strikes me how quickly they have done so much. But, typically speaking, in case where you have teams of people either working securities fraud cases or money laundering cases or public corruption cases, they have a big docket, they have lots of things going on.

And it can take two, three, four years for large cases to be brought to an end. So, the fact is not that they're going slow, but they're actually going fairly quickly, because they have clean dockets.

BLITZER: Yes, you mentioned some of the numbers. Take a look at some of the numbers. Look at the length and the scope of Mueller's probe. How does this compare, the progress that he is making, as you point out, to similar investigations, let's say, Whitewater or Watergate, for that matter?

BHARARA: Well, your chart answers the question.

It is proceeding pretty quickly. And if you judge it against complex white-collar cases that involve all sorts of types of charges and evidence that is located in all different countries, and also evidence, some of which has to be declassified in lots of different places, and coming from lots of different agencies, it is quite impressive how fast they have gone.

BLITZER: It certainly is.

Giuliani also seems to be also suggesting that if a president can't be indicted, a sitting president, he also can't be compelled to testify. I'm really anxious to get your thoughts on that.

[18:15:10]

BHARARA: Well, just because Giuliani says something doesn't make it false, doesn't make it true, as we have discovered in the last few weeks, but doesn't make it.

He has got a reasonable argument. It doesn't come up that much. It has come up a couple times. The last time I believe it came up, Ken Starr, who was the independent counsel, thought that he had the power to issue a subpoena to the sitting president of the United States.

And as often happens in these kinds of push-and-pull situations, they have an argument about it, and the president decided for various reasons, including reputational reasons, I presume, that he would testify voluntarily, and so the subpoena was withdrawn.

But at the time that Ken Starr issued the subpoena, he certainly believed that it was lawful to do so and he could compel the president. They didn't end up fighting about it end of the day, because it was better for all sides in a negotiated agreement for the testimony to be voluntary.

That could be what's going on here. It is not a crazy argument, given the fact that the president can't be indicted under prevailing Justice Department policy and opinion, to say that he can't be subpoenaed.

But that's not decided and that's not clearly true.

BLITZER: Good point.

Does the fact that Giuliani is disclosing all this information, doing a lot of interviews, suggest some sort of public relations strategy, as opposed to a very narrow legal strategy?

BHARARA: I have not seen any discernible smart public relations strategy on the part of the president's lawyer Rudy Giuliani, I hate to say, and I haven't been able to discern any particular legal strategy either.

So I'm going to stay out of that thicket.

BLITZER: Robert Mueller could request, some have suggested, a special exemption from the deputy attorney general, Rod Rosenstein, if he believes extraordinary circumstances merit an actual indictment of a sitting president.

How would that process work? And how high would the bar need to be?

BHARARA: Well, we have never seen that before, so I find that pretty far-fetched and unlikely.

I have said from the beginning -- and I think others have said the same -- that even if there's strong evidence of a crime on the part of the president of the United States, I don't believe that Bob Mueller would bring an indictment because of the prevailing Office of Legal Counsel opinion in the Justice Department.

There are some arguments. Like, there are a lot of legal questions that don't come up so often. And so there are divided opinions. Some things, people feel unanimously about, and some things are split down the middle. This one, the balance of opinion is on the side that the president, sitting president, can't be indicted.

And I think it would be odd and unusual and thrust the country -- not everyone likes to hear this if you're not for Trump, but the law is the law. And it has to undergo a particular process.

But I think that, for Bob Mueller, given how conservative he is as a lawyer -- I don't mean politically -- as a lawyer, and the traditionalist that he is, although he is aggressive, the idea of hanging your hat on some minority legal view, in the face of the whole world watching and everyone wanting to feel confidence and faith in the final decision that's being made, I don't see that happening.

Whether or not there's a mechanism to do it, I don't see it happening.

BLITZER: At the same time, Preet, Mueller has given a federal judge now the unredacted version of the memo written by the deputy attorney general, Rod Rosenstein, outlining his authority to investigate Russian election interference and any potential ties to the Trump campaign.

That memo was requested by the judge overseeing Paul Manafort's trial in Virginia. He is weighing a request for Manafort to throw out charges against him.

What's your analysis of this disclosure?

BHARARA: Well, a couple things have happened in the last few weeks.

First, you will recall and the viewers will recall that there was a court proceeding where the Eastern District of Virginia judge, the judge you're referring to, excoriated the special counsel's office, said no one is above the law, which is I think a general statement that most people should agree with, no one has unfettered power, which we should all agree with.

Didn't seem to fully understand all the facts of the case, didn't seem to fully understand that Rod Rosenstein was overseeing the matter and that he was not recused, but was unhappy with all the information that he was getting, and so he has sought more information.

In the meantime, as people might appreciate and remember, there's another case pending against Paul Manafort in the District of Columbia. So, there are two different cases pending.

And the judge in that case just rejected similar claims for a dismissal of the indictment, on the ground that they do have the power, the things that they're investigating, the things that they have charged Paul Manafort with arose from the investigation, are fully within the ambit of what the special counsel's authorities and powers are, as given to them by Rod Rosenstein.

So, I presume that, notwithstanding the rebuke that this judge in the Eastern District of Virginia gave this special counsel's office, once he sees the other information and looks more closely at the law, he will come to the same decision as the judge in the District of Columbia.

BLITZER: Preet, I want to get your thoughts on the president on this first anniversary of the Mueller investigation.

[18:20:02]

He had three separate tweets. And I will just give you a couple of sentences from each one.

He called this "disgusting, illegal, unwarranted witch-hunt." That's what he said the Mueller investigation is. He says he also says: "Congratulations, America. We are now in the second year of the greatest witch-hunt in American history," this despite the fact that the FBI director yesterday, the man he appointed to the FBI, said there was no witch-hunt, Christopher Wray.

And then he said this. Listen carefully, Preet: "Wow. Word seems to be coming out the Obama FBI spied on the Trump campaign with an embedded informant."

All right, give us your reaction to those kinds of words in those three separate tweets.

BHARARA: Look, the president of the United States likes to tweet. He likes to get angry in his tweets.

Maybe he is not busy enough from time to time. Obviously, the investigation is warranted. It is not disgusting. It was launched by people that he hired, that he put in place, that he has lauded previously.

It has yielded results. It will likely yield a lot more results. So, the tweets are the tweets. It is the kind of thing that's been happening from time immemorial, when people who are being investigated who have a bullhorn and a bully pulpit like to say witch-hunt.

If you had a dime for every time people said witch-hunt, you would be a fairly wealthy man, maybe not as wealthy as you, Wolf, but a fairly wealthy man.

(LAUGHTER)

BHARARA: I forgot what the final, the last question was.

BLITZER: The final tweet, when he said: "Wow. Word seems to be coming out the Obama FBI spied on the Trump campaign with an embedded informant."

BHARARA: Oh, yes.

Look, I don't know what the facts are relating to that. It's a little odd to suggest that something untoward happened, and how you can defend yourself by saying there was enough probable cause and suspicion of criminal activity within your campaign that people took the extraordinary step of trying to investigate it by having someone undercover in the campaign, if that's true.

I don't know how that's a defense. That's in many ways a highly, highly incriminating thing to have happened, unless you think it happened corruptly, which I guess is his premise.

But knowing the people that I know and knowing how these things operate, and what a high bar you would have to have to do something extraordinary like that, I think it is actually more problematic for the president than it is a defense.

BLITZER: Priebus, thanks, as usual.

BHARARA: Thank you.

BLITZER: Just ahead, one year into the Mueller probe, is it time for it to come to an end? I speak live with a key member of the House Intelligence Committee.

Plus, why a whistle-blower leaked Michael Cohen's financial records. I talk with "The New Yorker" magazine's Ronan Farrow about his exclusive new reporting.

(COMMERCIAL BREAK)

[18:27:13]

BLITZER: The breaking news tonight, the White House standing by President Trump's claim that the special counsel's Russian investigation is -- quote -- "a witch-hunt."

Let's get more on all of this with Democratic Congressman Jim Himes of Connecticut. He's member of the House Intelligence Committee.

Congressman, the president and his team say one year of Mueller's probe is enough, that it hasn't been able to produce definitive evidence of collusion or obstruction of justice. He needs to wrap it up, they say.

How do you see it?

REP. JIM HIMES (D), CONNECTICUT: Well, the president, just like anybody else who is being investigated, doesn't get to decide when the investigations of their behavior are up.

Look, by any other standard, the many, many Benghazi investigations we had here -- and I don't mean to associate the two, because the Benghazi investigation in fact produced no indictments, produced no cooperating witness, produced nothing -- that went on three times as long as the Mueller investigation has gone on.

Look, the fact of the matter is that they are still working. The president, of all people, should want the investigation to conclude, so that if it is as he says it is, that there was no collusion, so that Mueller, not him, because, of course, he has lost credibility on this issue, Mueller comes out and says there was no collusion.

Unless the investigators are allowed to arrive at that conclusion because they do the investigation on their own pace and correctly, there will always be a cloud over this presidency. So I am puzzled by the president's behavior, trying to do his best to stop and shut down this investigation.

BLITZER: The president's lawyer, Rudy Giuliani, says he has received assurances from the Mueller team that a sitting president can't be indicted.

Giuliani is also implying that if a president can't be indicted, then he also can't be subpoenaed and compelled to testify. Should that be the standard?

HIMES: Well, first of all, that's just not true, at least the part about the subpoena.

We have never had a situation where a sitting president was indicted. Most legal minds would tell you there's a different remedy where the president is concerned, and that remedy is impeachment, per the Constitution.

So, that's an interesting, but academic debate. We're not there yet. We're in the investigation. And the question about whether a president can be subpoenaed or otherwise compelled to participate in an investigation, Rudy Giuliani is just plain wrong.

Look, Nixon was ordered as part of an investigation to turn over tapes. There was no doubt about that. They said, no, you're going to participate in this investigation, you're going to turn over the tapes.

And, of course, President Bill Clinton was ordered to cooperate and negotiated ultimately to be deposed in the Starr investigation.

So the idea that the president cannot be compelled to participate in an investigation is just not true. BLITZER: Mueller could request what's described as a special

exemption from the deputy attorney general, Rod Rosenstein, and ask for an indictment due to what are described as extraordinary circumstances.

What should be the bar for such a request?

[18:30:07] HIMES: Well, Wolf, I'm a little hesitant to sort of follow Rudy Giuliani's legal reasoning and public affairs game that he is playing, you know, trying to, as this administration has for a long time raise ancillary issues, you know, create a lot of mud in the water so that we lose sight of the key thing, which is that the investigation must proceed. Let's not talk about indictments until we get through this investigation.

So yes, let's talk about subpoenas, because if it's Rudy Giuliani's position that the president cannot be compelled to provide testimony or to otherwise cooperate, he has to explain to us why courts decided that Nixon did and Clinton did, but somehow he's got a theory that this president does not.

BLITZER: Giuliani also seems to be moving the goalpost somewhat on what would constitute collusion, telling FOX News, for example, last night that it's not illegal to receive opposition research, even if it comes, in his words, "from a Russian, German or an American, it doesn't matter," close quote. What do you think of that?

HIMES: Well again, in this instance, Rudy Giuliani is not acting as a lawyer. Because it is, in fact, illegal to get valuable help, and by that, I mean help that is of value, from anybody and then not report that help on your Federal Election Commission disclosure form. So again, I don't want to get into the fine details of law. Rudy Giuliani is not being correct; he's not right on the face of it.

Obviously -- and it is interesting how he moved the goalpost. Obviously, if it is true that the Russians provided meaningful support to the Trump campaign, and I'm using this language very carefully, because we need the investigation to tell us what actually happened, whether that's a crime or not, it's a profoundly concerning thing.

BLITZER: The president tweeted this morning, and I'll put it on the screen. "Wow. Word seems to be coming out that the Obama FBI spied on the Trump campaign with an embedded informant. Andrew McCarthy says there's probably no doubt that they had at least one confidential informant in the campaign," close quote. If so, the president says, this is bigger than Watergate.

So that's a pretty extraordinary claim. Have you seen any evidence to back it up?

HIMES: I have seen no evidence to back that up. And remember, it was just over a year ago that the president was tweeting that Barack Obama was spying on him in Trump Tower. And then we went through all of the unmasking controversy within, supposedly, Susan Rice and Obama administration people were acting inappropriately. All of this turns out to be nothing. Now what is possible -- and you had this conversation with Preet

Bharara earlier -- it is possible that, in any criminal investigation, the investigators might have an informant. That happens with the mafia. It happens with drug rings. It happens all the time. You have informants.

Now the president is deliberately using the word "spy." That's not, obviously, what prosecutors or investigators do, but they might have had an informant. I have no information to that effect.

But as Preet said in the earlier segment, if in fact, the FBI cleared the very high bar to get an informant inside a presidential campaign, that is -- I don't know if it's true or not. If it is true, that is a very big problem for the president and his campaign.

BLITZER: You're on the House Intelligence Committee. Let me get your reaction to the U.S. Senate's confirmation just a little while ago of Gina Haspel to serve as the CIA director, the first woman to serve in that role. Do you believe she will be an effective director at CIA?

HIMES: I do. I know Gina a little bit. She is hugely well-respected within the agency. I think particularly at this moment in time, it's important for the agency to have somebody on the inside who they sort of trust and, you know, maybe think that from time to time can act as a -- as a buffer from whatever the tweets are that are coming out of the Oval Office.

Of course, the concern about Gina Haspel was always her participation in that extreme rendition program. If I'd been a senator, I'm not quite sure how I would have thought about that. But I do know that her going to Mark Warner and saying it should never have happened, that was an important statement for her to make.

BLITZER: Congressman Himes, thanks so much for joining us.

HIMES: Thank you, Wolf.

BLITZER: So we have some breaking news coming into THE SITUATION ROOM right now. A plea deal by the former son-in-law of Paul Manafort, the former Trump campaign chairman, who's now facing multiple conspiracy and bank fraud charges due to Mueller's investigation. Let's bring in CNN's Kara Scannell.

What are you learning, Kara?

KARA SCANNELL, CNN CORRESPONDENT: Well, Wolf, we learned that Paul Manafort's former son-in-law, Jeffrey Yohai, has reached a plea agreement with the U.S. attorney's office in Los Angeles.

Now, they've been investigating him for over a year. It all relates to real-estate development deals that Yohai has done in the L.A. area. Now, under this plea agreement, Yohai will be required to cooperate with any investigation, whether it's the New York attorney general's investigation into Paul Manafort or Special Counsel Robert Mueller's investigation into Manafort. Now one source said, you know, a lot of this investigation's really

focused on some of these deals that Yohai has done as a real-estate developer. He's been sued in multiple lawsuits, alleging that he defrauded many of his investors, including actor Dustin Hoffman.

[18:35:06] BLITZER: Yes. There was some sort of Ponzi scheme that he has now apparently confessed to. Right?

SCANNELL: That's right. Part of the plea agreement involves that, but it's still under seal, so we don't know all the details of it. But it relates a lot to this development that he was doing in the Los Angeles area, raising money for investments in real estate which, apparently, he didn't deliver on.

BLITZER: So does this show the scope of the Mueller investigation, that there are other unrelated investigations, though, that could tie into what Mueller is trying to do?

SCANNELL: Well, I mean, Paul Manafort has been indicted both in the District of Columbia and in Virginia, two different lawsuits or indictments by the special counsel's team. Now, as part of that investigation, you see that they will talk to thousands -- you know, they will go through thousands of documents and talk to as many people as possible. So it's quite possible they'll want to talk to Yohai, the former son-in-law, and see what, if anything, he might have that could contribute to their investigation.

They will have two trials that they have coming up, one in July and one in September. So it's quite possible they may turn to him for a witness or at least talk to him to see if he knows anything at all that could bolster their case.

BLITZER: So this is the U.S. attorney out in California who was involved in this. Now there's a U.S. attorney in New York, the Southern District of New York, who's involved. There's Mueller, so there are multiple investigations.

But do they think that Yohai potentially has information that could benefit Mueller's investigation, as far as Manafort is concerned, who's pleading not guilty?

SCANNELL: I think that -- I mean, I think that remains to be seen. He was his former son-in-law. I'm sure Mueller's team would want to know if he knows anything at all about any of the allegations they brought against Manafort, you know, involving his lobbying activities, involving some of these bank fraud charges, which they charged Manafort with lying to the bank to take out money.

And in one of those instances, according to the indictment, prosecutors alleged that he said that one of these properties, his daughter and son-in-law were living in full time. So you can imagine that Mueller's team would be interested in talking to that son-in-law to see was he there and would that bolster that bank fraud allegation.

BLITZER: Another legal development unfolding. Kara, good reporting. Thank you very much. We're going to have more on the breaking news just in a minute. Also

ahead, Rudy Giuliani insists the sitting president can't be indicted or forced to testify. Why is he pushing that argument now? And will it matter to the special counsel, Robert Mueller?

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[18:42:01] BLITZER: Our breaking news, a plea deal by the former son- in-law of Paul Manafort, the one-time chairman of the Donald Trump presidential campaign.

Let's get some more with our specialists and our analysts.

And Laura Coates, what do you think? Because it does underscore the scope. There's the Robert Mueller investigation here in Washington, the southern district of New York, the U.S. attorney there, now investigating Michael Cohen, and now out in L.A., the U.S. attorney investigating the former son-in-law of Paul Manafort.

LAURA COATES, CNN LEGAL ANALYST: Well, from coast to coast, Mueller has a wide net that he can cast and he can use to manipulate situations in a way that's lawful. He can have people try to cooperate in his endeavors, and try to apply pressure to people like Paul Manafort.

Yohai is the former son-in-law, divorced just in August. But as of last June, Mueller was sending people out to investigate and interview Yohai about his very close business ties to Paul Manafort. That's very important to consider, because he is somebody who had information on different loan operations, loans for properties in New York and other places. He even lived in one of the places that allegedly may be a source of the investigation for Mueller.

So he has a lot of information. And also, for one of the first times -- we knew that Rick Gates was cooperating, presumably against Paul Manafort. As his right-hand man, he'd have a lot of information. Now you have somebody who we don't know what the relationship was like between Yohai and his former, now father-in-law. Perhaps there's a vendetta or an ax to grind. Perhaps more than can use.

But remember, the actual plea agreement, we're not quite sure whether he is specifically bound to cooperate in the Mueller probe against Manafort. He just must cooperate with other investigations, likely this one.

BLITZER: Gloria, Rudy Giuliani, the president's attorney, he's doing a lot of talking right now.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: I heard.

BLITZER: What's his strategy?

BORGER: Well, I'm not so sure there's a strategy in the sense of the word that we know it. I think Rudy Giuliani is out there freelancing an awful lot. I was told by a source familiar with the legal team that they're very

happy he's out there freelancing, because it's has been cathartic for the president to have him out there. Doesn't help him much with Bob Mueller right now, the special counsel, but Rudy Giuliani is out there doing what the president wants him to do.

But in terms of the question and the story that Dana broke yesterday about whether you can indict a sitting president, getting a direct answer, I think he wanted it out there for one reason. And that is that his legal team believes that you can, therefore -- and you're the lawyer here, I'm not -- that you can therefore not subpoena the president to testify if he cannot be charged with a crime.

So say they were going to be talking about obstruction. Well, why would you have to know his state of mind, for example, if you're never going to charge him with it? This will be one of the arguments, clearly, that they would make if Bob Mueller wants him to testify.

BLITZER: How do you see it, Ryan?

RYAN LIZZA, CNN POLITICAL ANALYST: Well, first thing, if it is true that Mueller has decided that you cannot indict the president, that is very, very newsworthy.

[18:45:00] Both the prosecutor in Watergate and Ken Starr with respect to Bill Clinton, both believed you could indeed indict the sitting president, and there are plenty of legal scholars that think you can. Remember, there's nothing in the Constitution that says you can't indict a president. There's no court that has ever ruled that. This is just a legal theory, right? It's completely unsettled.

So, the fact Mueller has broken with predecessors who were contemplating this question is a big deal if it's true, if what Rudy is saying is true. And I think Rudy's strategy is he wants to defang the prosecutor. He is trying to say all he can do is write a report. He can't indict us, he can write a report.

And I think we do have to hear from Mueller on this, if he is 100 percent certain. That changes his whole strategy. If the White House knows they decided they can't indict the president, that will change decisions about how they relate to Mueller.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Can I say one thing, and I'm not a lawyer, although I play one, right? But neither Clinton nor Nixon were forced to participate in a criminal proceeding. It was -- Clinton was forced in a civil deposition and Nixon was forced to produce the tapes as we all know. So, this has not yet been challenged, as you pointed out.

LAURA COATES, CNN LEGAL ANALYST: That's true. But the Supreme Court, glad you point it out, Supreme Court was clear, you did great, Gloria. You did really great, holiday inn last night, I knew it.

It is very clear if the court would find that it's necessary for you to still stand and be part of a civil suit, courts look at criminal cases as a much higher gravitas assign to him. So -- but the real thing here that Giuliani is getting wrong among a variety of things is conflating whether you can stand for criminal trial, whether you can indict a sitting president, whether one is indictable and whether you can subpoena. They're different legal concepts.

And if they're -- I think it is probably true he made that statement. But existing policy in OLC is not binding and written in stone, it's binding until it is no longer binding. But it never changes the inquiry if you can indict a president, one can always be subpoenaed. If not, there's no purpose for a grand jury.

BLITZER: All right. David Swerdlick, you did go to law school. You have some knowledge about this.

Back in 1998, Rudy Giuliani was asked if a president is asked to testify, subpoenaed to testify before a grand jury and says no, not going to do it, that was the question, Giuliani says you got to do it. I mean, you don't have a choice.

So, at least in 1998 during the Bill Clinton uproar, he said if a president is subpoenaed, he's got to answer questions.

DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: Sure, it really depends which side of the political coin you're on. As everybody said, you can find a legal opinion within the Department of Justice to support whichever way you want to go.

Couple of points here. One, right, the president's legal team wants to get this message out there that all that the special prosecutor can do is issue a report, but that's by statute what they're supposed to do. It goes to the deputy attorney general, deputy attorney general then should send it onto Congress.

Second, I agree totally with you, Gloria, that Rudy Guiliani is trying to make this bank shot legal argument, get it out there in the atmosphere that if you can't be indicted as a sitting president, then therefore, what is the legal point of you even being able to be subpoenaed to testify.

I heard our colleague Anne Milgram last night make a very important point, which was that should be more incentive that the president should have to testify, because then the legal pressure is off. He's just a witness, not a defendant in that case. So, of course, subpoena him, hear what information he can provide to the case.

BORGER: Here I go, sounding like a lawyer again. Say he wanted to assert the Fifth, then you can't self incriminate. We are not going to indict you. How can you assert the Fifth? How can you take the Fifth here? That's another part --

COATES: That's part of the issue here about the strategy of the PR campaign, the court of public opinion, trying to meet the court of law. I think Giuliani is crossing the road too many times in a way that undermines his credibility because if all of these things are true and all of the best case scenarios you just laid out are true and there is not legal exposure, it would be as if you could say if I'm an eyewitness to a homicide, I then can't be subpoenaed because I couldn't ultimately be indicted for the homicide. It would be completely nonsensical, but Guiliani tries nonetheless.

BLITZER: Very quickly, Ryan. Yesterday, the FBI Director Christopher Wray says, tells Congress there's no witch hunt. It is not a witch hunt. Today, the president doesn't only say it is a witch hunt, he says it is a disgusting, illegal, unwarranted witch hunt.

LIZZA: What Trump is doing and what Rudy are doing is basically the same thing, is that they know at the end of the day, especially if they really believe that he cannot be indicted, that at the end of the day, the only remedy if Trump did something illegal or high crime or misdemeanor is impeachment, and they know this is now going to be in the realm of politics and they need to supply their political allies with arguments about why, one, this investigation, is, they say, a witch hunt, and two, he didn't do anything wrong.

I think if Mueller has really decided that, that's where we're headed, right?

[18:50:04] We're headed into strictly the political realm of does Congress step forward, do something with Mueller's findings?

BLITZER: Guys, thanks very much. You're not a lawyer, you're not a lawyer, we've learned. You are a lawyer, you are a lawyer.

COATES: We're all lawyers now in this administration.

BORGER: Thinking of going to law school now, I think.

BLITZER: All right. Thanks very, very much.

Just ahead, who leaked Michael Cohen's financial records and why. I speak with "The New Yorker's" Ronan Farrow about his reporting.

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[18:55:12] BLITZER: "The New Yorker" magazine is reporting a law enforcement official leaked financial records of President Trump's personal lawyer, Michael Cohen. The report says the whistle-blower became alarmed after being unable to find two important reports on Cohen's financial activity in a government database.

Joining us now, the author of the "New Yorker" article, Ronan Farrow.

Ronan, thanks for joining us. Tell us a little bit more about what motivated the source to come forward.

RONAN FARROW, CONTRIBUTING WRITER, THE NEW YORKER: So this is a somewhat dense area of financial databases maintained by the government. There is a database in which reports that banks are mandated, Wolf, to file when they see suspicious activity are held. And this law enforcement official searching for records related to Michael Cohen, which is a fairly routine thing a law enforcement official might do in response to seeing news about Cohen, to, for instance, see if there was anything happening related to this case in their jurisdiction. And what this official found was that there was a fairly striking

suspicious activity report, which has been public for the past week, about Cohen's activities. But also two additional reports that were withheld from search results in the system. And every expert we spoke to familiar with this database said that is extraordinarily unusual. We discuss in the piece of the possibility that maybe this isn't foul play, likely this is something that FinCEN, that office at the Treasury that maintains the database might have done because of the sensitive nature of the contents of those reports.

But this individual who leaked these reports felt alarmed about what this extraordinary step suggested about what may be in those other two documents that we haven't seen yet.

BLITZER: As your report makes clear in the "New Yorker," it's possible that access to these documents was in fact restricted for legitimate reasons, given the extremely sensitive nature of the investigation into Michael Cohen. Here's what the Financial Crimes Enforcement Network, FinCEN, as you said, had to say.

Under longstanding procedures, FinCEN will limit access to certain SARs when requested by law enforcement authorities in connection with an ongoing investigation. In any event, government employees and law enforcement personnel with access to the system are not authorized to publicly disclose SARs, and as previously reported, Treasury's inspector general is looking into whether any SARs were improperly disclosed.

What do you make of that explanation?

FARROW: It's very consistent with what we had in our story. You know, most of the experts agreed that this is very likely a case of results being withheld. We discussed the possibility that it might be because of a request from, for instance, special counsel Mueller, who's looking at the possibility of Russia collusion in the last presidential election, or from the southern district of New York. You know, these are jurisdictions that have been involved in activities and investigations related to Cohen. It would make sense that they may want to say, hey, not all law enforcement officers should have access to this.

But this whistle-blower, Wolf, still felt, we talked about this possibility, and this person still felt that this suggested something highly unusual and irregular about these reports. And, look, this is a person, you can agree with this or not, who said, I think it's worth an extraordinary risk to expose that to the public.

BLITZER: The banks certainly keep copies of these kinds of records, don't they? Wouldn't that protect against any potential nefarious cover-up?

FARROW: Statutorily, the banks should be keeping these records for five years. Now, the banks should also not be publicly acknowledging anything about these suspicious activity reports. It's very legally restricted to even acknowledge the existence of these. So, if there were ever a scenario in which there was undue political influence on the decision by FinCEN to restrict these files, certainly there could be an investigation and you could likely restore them by going to the banks.

BLITZER: How worried is this whistle-blower about potential legal action against them?

FARROW: I think this is an individual who has been in law enforcement for a long time and knew about all the risks associated with what they did here. And this person told me that what this extraordinary step of these withheld search results in the system suggested about these remaining reports, which, Wolf, document again triple the amount of transactions of what we know about now.

This is a large swath of information we don't have right now. This person said, you know, this was so troubling, so frightening, that it was worth that extraordinary risk.

BLITZER: Among other things, Ronan Farrow is the author of a brand new book, a bestseller entitled "War on Peace: The End of Diplomacy and the Decline of American Influence."

Congratulations on that, thanks for all the terrific reporting, Ronan. We really appreciate it.

FARROW: Thank you, Wolf. Good to be here.

BLITZER: Thank you. That's it for me. Thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.