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Jury Appears Hung Up on One Count; Microsoft Says Russia Hacked Again; Trump Raises Doubts. Aired 12-12:30p ET

Aired August 21, 2018 - 12:00   ET

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

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[12:00:08] ANNOUNCER: This is CNN breaking news.

JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing this big, breaking news day with us.

That breaking news, that the trial of the former Trump campaign chairman, Paul Manafort, the jury was on its fourth day of deliberations, about 25 hours spent in the jury room, then a note to the judge asking what happens if they can't reach a consensus on one of the 18 counts.

Let's bring in CNN's Jessica Schneider. She's outside the courthouse.

Jessica, this is big drama. Fill us in on what's happening inside that courtroom.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Yes, John, drama, a lot of suspense, but now as of 11:58 this morning, the jury is back in the jury room.

So how this all unfolded, just after 11:00 a.m., the jury did send a note to the court asking the judge, judge, what do we do if we can't come to a unanimous decision on one of the 18 counts. That implies that perhaps they have reached a decision unanimously on the other 17 counts, but they haven't said that definitively.

So what the judge had to do was he had to come up with instructions to give the jury as it pertained to them going back and deliberating yet again. So that just happened. In just the past few minutes, the judge instructed the jury, go back into the jury room and continue to work on that one final count. Try to continue to work, to come to some unanimous verdict on that one remaining count.

Now, outside of the presence of the jury, the judge indicated that he might be prepared to accept a partial verdict if they weren't able to come to a conclusion on that one remaining count that they seem to have indicated. But the judge, however, did not specifically instruct the jury that he'd be willing to accept that partial verdict. And that's important because he doesn't want the jury going back into the jury deliberation room saying, OK, well, why try that hard because this judge would, in fact, perhaps accept that partial verdict. This judge wants the jury to know that he is anticipating, hoping for a full verdict here.

So, again, just a few minutes ago, the jury going back into the deliberation room with the instructions from the judge, keep going at it, see if you can, in fact, reach a decision on this one count that's giving you trouble.

And, John, we don't know what that count is, but these are 18 complicated counts that include tax fraud, bank fraud, as well as issues around foreign bank accounts. So they've been working on this pretty painstakingly. It's really the first we've heard a substantial question from the jury since Thursday.

So we'll see as the time continues to tick forward what this jury will do.

John.

KING: And, Jess, have we heard anything specific beyond their curiosity, and I'm sure their tension, from the prosecution and the defense lawyers who have been sitting and waiting to see what this jury was going to do?

SCHNEIDER: Well, it's interesting to see how their narrative might change given this recent development because every time the defense has walked into this courtroom, any time there's been a note or it's been the end of the day and these four days of deliberations, the defense has consistently said, we're feeling really good about this, Paul Manafort's feeling really good about this, and they kept saying the longer this jury takes deliberating, the better.

But now the game seems to have changed. Now it seems that the jury is pretty close to deciding on all of these counts. They had this one sticking point of this one count. We haven't heard yet from the defense and the prosecution. Last I heard they were still in the courtroom. We may see them come back out here.

But, I don't know, the tenor might be a little bit different from the defense knowing that we are so close to a verdict here, wondering if, in fact, it still is good for their client.

John.

KING: Jessica Schneider outside the courthouse. A critical point there. So close, so close, it appears to a verdict. Jess, raise your hand if we get any new information outside of the courtroom.

Let's also now bring in CNN's Evan Perez. He's outside the courthouse as well tracking this trial.

So, Evan, a moment of truth appears to be at hand. What are the options that Judge Ellis has here as he tries to get the -- tries, goal number one is to get the jury to reach a consensus, a unanimous consensus, on that one remaining count, but what else?

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Right. Exactly, John. Well, one of the things the judge talked to both sides, the

prosecutors and to Paul Manafort's lawyers, before he brought back the jury, he said that he was prepared to consider letting the jury essentially decide how many charges they could come to a consensus on, how many they had unanimous and accept a partial verdict if that is necessary in this case. And obviously this was something that he said that both sides are going to have to weigh in on if that moment comes.

But first he read this -- obviously he brought back the jury before the -- inside the courtroom and he read them what is known as a Sawyer (ph) charge in which he instructed them to try again, to listen to each other, whether or not there's only a couple of them who are stuck on one side of the equation, and to consider changing their vote if that doesn't violate their conscience. He really just was trying to remind this jury that they had a duty to come to a unanimous decision so long as that didn't violate their conscience.

[12:05:12] So really what the judge wanted to remind both sides before he brought the jury back was that what could happen next. If this jury remains stuck, we don't know how long that might be, we don't know how long he'll let them continue, but if they come back and say that they cannot reach a final decision on all of these counts, he told them that he would consider obviously accepting a partial verdict. And, obviously, we don't know how many -- which particular counts they've reached their decision on. We don't know which side of this they've come down on. So there's still a great deal of mystery for the defense and for the prosecution in this case.

KING: Evan, keep us posted as you learn anything else from the attorneys or from others at the courthouse as this plays out this afternoon.

Evan Perez, Jess Schneider at the courthouse, appreciate their reporting. We'll bring them back as warranted.

Joining me to share their insights on this, CNN legal analyst Shan Wu. He represented Rick Gates earlier during these proceedings. CNN's Shimon Prokupecz here with me in studio. Julie Pace with "The Associated Press" here as well. And in New York, our legal analyst and former prosecutor Paul Callan.

Let me bring in the attorneys first and Shan here at the table.

Take us inside your experience with this. I mean, A, what does it tell you? Is it -- is it fair -- they have not said this definitively. Is it fair to assume, reasonable to assume, that if they say, what do we do if we can't reach a unanimous verdict on one count, that they're done with the other 17, or is that just a guess?

SHAN WU, CNN LEGAL ANALYST: That's a pretty good guess. It doesn't mean for sure they're done with the others because they could have come out with a note to say we've reached a verdict on the majority of the counts. They didn't say that. But I think that's a fair assumption to make.

KING: And So, Paul Callan, I want to read something that just came in from our team at the courthouse.

Manafort's attorney, Kevin Downing, asked Judge Ellis to give the jury a new verdict form after the jury said we will need another form please in their Tuesday note. Ellis said he would not. Downing said he wished jurors would be giving a third -- given a third option on the form, a hung jury option for each count.

So, take me inside. If you're the prosecutor or you're the defense lawyers and you're at this stage, what are your options and where are you powerless?

PAUL CALLAN, CNN LEGAL ANALYST: Well, I think if you're the prosecutor on this case, it certainly feels like you might be winning on 17 counts because when a jury is sort of on that kind of roll, checking off innocent, innocent, innocent, are they going to stay around and argue about one final count if they think the guy was falsely charged or improperly charged on the first 17? Usually you'd have to say no.

On the other hand, if you're finding somebody guilty and they can go to jail under certain counts, you're carefully going through each count, and you would stick around and be careful on the last count.

So I think probably the prosecutors are optimistic that this is going their way. Plus, there's a 90 percent conviction rate, generally, in federal jury trials. So, statistically, that goes to the side of the prosecutors, obviously.

This is the strange thing with the jury note, though, John. I don't know why the judge wouldn't give them a clean sheet to start out on. I mean the original sheet, maybe they were writing what the original split was when they first started deciding about a particular count and they just want to be kind of starting fresh. So I'm really surprised that they -- they didn't just print up a new jury verdict sheet.

But I think what the judge is thinking is, he's got a verdict on 17 counts. He doesn't want to have any blank spaces that they could fill in and really tip the apple cart there. So that's probably his reasoning in not giving them a fresh sheet.

KING: All right.

And, Shimon Prokupecz, you've been at this since moment one, leading up to the trial, but also during the trial. Just -- what goes through your mind and what information do you have that you think --

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Look, I think this was much more complicated than any of us had anticipated, right? We -- honestly, I mean, it just seemed like there was overwhelming evidence. But these are 18 counts and very confusing perhaps at times. Look at this jury note. I mean they're probably confused in some ways too. But it's clear that they've made a lot of progress. And we've been waiting to hear what's going on here for days. We really haven't heard where they stand. And now we know.

I think, you know, when they write a note like -- and just if we cannot come to a consensus for a single count, how can we fill in the verdict sheet? So clearly either maybe they wanted the judge to take something off the verdict sheet. That part is very confusing. And I think, as Paul said, the idea that the judge wouldn't give them a new verdict sheet. I also think this judge just does not want to meddle in this deliberation. Go back, keep at it, and let's see what happens.

And then he also said in court before he sent them back in, continue to deliberate, and he did tell the court, and this was outside of the jury, that he does not intend to take a partial verdict at this point. But let's see what happens. They could come back and then maybe he does take a partial verdict.

KING: Does not intend to take a partial verdict at this point.

PROKUPECZ: At this point.

KING: And let's just step back for a minute to the importance of this case. If you are Robert Mueller, the special counsel, these charges have nothing to do with President Trump's 2016 campaign. These charges have nothing to do with Russian interference in the 2016 election.

[12:10:11] There was testimony, though, however, that Rick Gates remains the star witness against Paul Manafort, remains cooperating on other matters, number one, and there was testimony that among the misdeeds, the influence peddling, if you will, that Paul Manafort was accused of doing by prosecutors, was including trying to get -- trying to get a job in the Trump administration from a bank president with whom he was trying to get a loan, essentially trying to get a little quid pro dough.

JULIE PACE, WASHINGTON BUREAU CHIEF, "ASSOCIATED PRESS": Right. And, look, to your point, I think it's really important to emphasize that while this is Robert Mueller's team that is prosecuting this case, this is not directly tied to the questions of Russian interference, nor is it tied to the questions of obstruction that we've seen really circling around Donald Trump.

At the same time, the Trump team is obviously really closely watching what's going to happen here, in part for Trump's political argument, which is that the Mueller probe as a whole is a political witch hunt, that there's nothing to it. Certainly if Manafort were to get off, that would feed into that narrative for Trump.

But if Manafort doesn't get off, if he is found guilty of these charges, it will lend real credibility to the Mueller probe, that he was able to put someone who was the campaign chairman, not an insignificant player in Trump's world, on trial and get a guilty verdict. A lot of nervousness in the Trump administration, in the West Wing right now as they wait for this verdict (ph).

KING: And that nervousness exhibited by the president himself on Friday, who did something remarkable, many people would say reprehensible, when he publicly talked during jury deliberations about how he thought this was sad that the government was putting Paul Manafort on trial, that Paul Manafort was a good man despite, Paul Manafort, from the president of the United States described as a good man, the federal government of these same United States saying that he is guilty of -- at least he's accused now and the jury's deliberating -- five counts of fax fraud, four counts of hiding foreign bank account, nine counts of bank fraud.

Shan, if you're at this moment, we mentioned how the defense attorneys tried to get a new jury -- a new verdict sheet in front of the jury. Does that tell you anything about what they know, or does it just tell you that they have limited options right now and they're trying to do the best they can?

WU: They have limited options, but that's a very smart move, actually, to ask for a new verdict sheet, particularly the idea of giving them the option on each count of hung. That's a good way to suggest something.

PROKUPECZ: That was a strange request from -- I have -- from the defense attorney.

KING: But do they --

PACE: Would that be typical?

KING: But they also have no idea, right?

WU: It's very unusual.

They have no idea. And I think it's a delicate moment for Ellis from the point of view of an appellate issue because he's got a lot of conflicting requests here. Everyone on the defense side is looking for an error here. So if he gives them the so-called dynamite charge that Paul had talked about, they may say he's pressuring them too much. If he doesn't give them the option for the hung, they may say, you should have done that because, as Shimon was saying, they're saying it's just -- they want guidance on being hung on one count. Theoretically, they could be having some dissension on other counts too.

KING: Paul Callan, one more quick question here. If -- as a former prosecutor, if you're Robert Mueller and you know, A, you have another Manafort trial, B, you're under constant attack by the president of the United States, you have to decide what to do with the Papadopoulos sentencing, you have to decide what to do with the Michael Flynn sentencing. You know the other evidence that you have or don't have, are still looking for. How important is it to win the first one out of the gate when you're not only in a complicated legal situation, but an incredibly complicated political mess?

CALLAN: It is very important, John, to win that first one because, you know, Mueller has been under constant attack by the president. I mean the president has got a new derogatory nickname for Mueller every -- every week there's a new one that's added to the list. So his credibility is on the line here. And that is so important in an investigation like this and in trials to come in the future because a lot of times in these really complicated tax cases, paper cases, the -- in the end, the jury, if they trust the prosecutor and they believe in the integrity of the prosecutor, when they get to a point where it's really too hard for them to understand the law or it's difficult to understand, you know, what the accountants mean with the charts that have been put up, they rely on the prosecutor and maybe come forward with a jury guilty verdict, as they do, by the way, in 90 percent of federal cases. So his credibility is really important, and this is the first test, the first public test, of his credibility.

KING: Going to ask our legal experts to not go terribly far from the camera. We're going to continue to track what's happening in that courthouse in northern Virginia. We'll bring you the latest as soon as we get any update on the jury's deliberations.

Up next, though, moving on to a somewhat related story. Microsoft uncovers a Russian cyber campaign to mess, again, with American democracy.

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[12:18:43] KING: Welcome back.

I want to remind you, we're keeping an eye on the Paul Manafort trial. The jury still deliberating. But just moments ago sending a note to the judge asking, what do we do if we cannot reach a consensus, unanimous consensus, on one of the 18 counts.

That's Paul Manafort's attorney Kevin Downey right there outside of the courthouse. We'll return to the trial as soon as we get new information.

Moving on, though, to other top news today. New, glaring evidence that Vladimir Putin lied to President Trump and Russia is still attacking U.S. democratic institutions. Microsoft, the software giant, revealing overnight that Russian military intelligence units launched cyber- attacks targeting conservative think tanks and the United States Senate.

According to Microsoft, hackers for Fancy Bear, that's the same group of cyber criminals implicated last month by the Russia special counsel, according to Microsoft, set up fake websites meant to entrap visitors into coughing up passwords and other personal information. This so-called spear-fishing operation, a mirror image of how the Russians broke into the former Clinton campaign chairman John Podesta's e-mail account and stole thousands of his private messages. The sites identified by Microsoft mimicked real ones used by United States Senate staffers and bore official sounding web addresses, like sendit.group and adfs-senate.email.

Russian hackers built two other imposter sites, one for the Hudson Institute, and one for the International Republican Institute. Both are conservative groups that have broken within the president, and both have very hawkish views when it comes to Russia.

[12:20:06] CNN's Fred Pleitgen is now in Moscow for us.

Fred, the Kremlin response today I suspect was deny?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I would say it's even more than deny. The Kremlin spokesman, Dmitry Peskov, John, he was on a conference call with reporters earlier today, and he didn't just deny these new allegations, he basically said that the Russians had absolutely no idea what all of this is about. They say that so far they believe that not enough information was provided for them to even issue a denial, and they say that a lot of the players that are involved in this, they don't even know if these players exist or who they are.

I want to read a little bit of the statement that was put forward by Dmitry Peskov. He said, and I quote, our reaction has already become traditional. We don't know which hackers they're talking about. We don't know what is meant about the impact on elections.

It was interesting because we (ph) asked Dmitry Peskov in that same call, CNN did, well, what about these six websites that were stopped by Microsoft? And he said, look, I have no idea what Fancy Bear is or what this has to do with any sort of Russian intelligence services, which, of course, is quite interesting because cybersecurity experts believe that Fancy Bear is, in fact, directed by the Russian military intelligence, by the GRU.

So the Russians certainly issuing a very strong denial and going on further even beyond that, John.

KING: Fred Pleitgen live for us in Moscow. Fred, appreciate that reporting there and the insights. I'll be waiting for Vladimir Putin say it's a 400-pound guy in his basement somewhere. That will come soon enough.

So far today, no word from the president regarding these new attacks, but Microsoft's clearly documented evidence of new Russia meddling puts the president, who has repeatedly questioned Russian interference, in a fresh bind. The disconnect between what the president says and what his intelligence community says highlighted again just yesterday.

In an interview with Reuters, this from the president. Mueller's probe played right into the Russians. If it was Russia. They played right into the Russians' hands. The key words there from the president of the United States, again, despite all of the evidence, if it was Russia.

Julie Pace is back with us. Also joining the conversation, Jonathan Martin of "The New York Times," CNN's Phil Mattingly, and "BuzzFeed's Tarini Parti.

If it was Russia. The president has been told by everybody on his national security team including most of them are now his appointees, there are only a couple holdovers left, that this is continuing. You have Microsoft saying we caught them again, the same people Mueller has indicted. The president says if it was the Russians.

PACE: He can't help himself when it comes this. And he's really on an island by himself. The only other person who is continuing this narrative that Russia was not involved in this is Vladimir Putin. Everyone else, as you say, even the president's own appointees, who are in the intelligence community, go to him with evidence that say Russia was clearly behind this, you have U.S. companies that are combatting this on a day-to-day basis. It begs the question, and there is no good answer to this that we've been able to come up with, why does the president continue to question this? Again, it leads you back to the questions about his ties to Russia. Is there a reason why he can't just get over this hurdle, why he can't just side with American intelligence?

KING: And Fred Pleitgen going through what you would expect from the Kremlin. They say, what are you talking about? We don't know anything about this. Just as Vladimir Putin has said.

If you talk to the cyber people, including U.S. intelligence officials who work for President Trump, they say actually that Russia is getting caught on purpose. That Russia's leaving fingerprints. That if they wanted to be more clever, if they wanted to be for nefarious, you know, that they want -- they want -- we're still going this. We're meddling. We're messing --

JONATHAN MARTIN, NATIONAL POLITICAL CORRESPONDENT, "THE NEW YORK TIMES": We're in the game. We're still in the game.

KING: Yes, we're still in the game.

MARTIN: Yes.

KING: To the point, this is the president's own director of -- two administration officials, I believe it was two, testified today on Capitol Hill, this is still going on. I want to -- their boss, the man they report to, their information goes to the director of national intelligence. This is Dan Coats' last month. And, of all places, the Hudson Institute, one of the conservative think tanks Microsoft said was hacked.

(BEGIN VIDEO CLIP)

DAN COATS, DIRECTOR OF NATIONAL INTELLIGENCE: In regards to state actions, Russia has been the most aggressive foreign actor. No question. And they continue their efforts to undermine our democracy. The warning signs are there. System is blinking and it is why I believe we are at a critical point.

(END VIDEO CLIP)

KING: The location more than ironic, but he didn't say if Russia did it. He says the lights are blinking. We're at a crisis point.

TARINI PARTI, WHITE HOUSE REPORTER, "BUZZFEED NEWS": The purpose for Russian interference is to create distrust, to create chaos in the political system. And that's exactly what they're doing. And they are succeeding in that with administration officials like Dan Coats saying things like that. And then we have the president completely going the other way and saying if Russia did it. So, you know, Vladimir Putin right now is succeeding, if that's the goal, in terms of creating this sort of chaos that we've seen in the last year.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: I think the interesting element, you mentioned the hearing that was going on, on Capitol Hill, where you had officials from across the spectrum of agencies controlled by President Trump saying unequivocally, without hesitation, just matter of factly, that this is something that is happening, this is something that was happening, and there's no question about it.

But the interesting element of this is, there are policy ramifications to the president's unwillingness to seemingly embrace this wholeheartedly, right? You have senators from both parties on Capitol Hill. The reason the hearings are happening today, they're considering new sanctions on Russia. That would seem to undercut what the president wants to do in terms of bettering the relationship. Perhaps that means easing sanctions. Well, Congress is considering actually ramping them up.

[12:25:19] And then you look across the spectrum as well on the cyber capability side of things where you have the Defense Department, while we will probably never find out about it, considering offensive action or reaction on something like this, which is also extremely important and very, very kind of touchy when it comes to a legal standpoint.

So you have all of these things happening as the president can't seem to embrace it. And the net of it is that what the president wants in terms of a relationship with Russia, he can't get because he won't accept it in the first place.

KING: And it complicates other relationships, including with key U.S. allies.

Listen to the U.K.'s foreign minister in town today essentially saying, yes, I see what the president says on Twitter, but I just actually call Mike Pompeo essentially and say, what are you going to do as opposed to what is he going to say?

(BEGIN VIDEO CLIP)

JEREMY HUNT, BRITISH FOREIGN SECRETARY: He's particularly active on Twitter, and it's a very different style of politics, but I think it's very important to look at what he does, as well as what he says. And when it comes to sanctions, it was this administration that first said that they were going to take economic action against Russia as a result of what happened in Salisbury. It wasn't Europe. It was the United States that were first to do that.

(END VIDEO CLIP)

MARTIN: Yes, that's so fascinating. I think what he's doing there is basically saying out loud that there is a gap between the Trump administration policy and the Trump Twitter riffs, which is sort of what everybody knows. It's striking to hear our most important ally say it out loud in Washington, D.C., like that, because he's totally exposing what everybody gets, which is that there are two different policies.

To Phil's point, though, you know, I'm kind of sort of almost inert to this "Groundhog Day" routine of like Trump saying, if they did it, it's like the old O.J. walking out (ph). But what I'm more interested in now is action, not Trump sewing doubt because he's been doing that for, you know, a couple years now. Will Trump, at Rand Paul's urging, kind of go easier on some of these sanctions? Will he let, for example, Russian legislators visit the U.S.? I mean that's where I think it gets more interesting is less him sowing doubts and more is he going to following up by actually easing back on Putin because that could create a real rubber meets the road issue with the Congress. Which I think they're OK. At least they're OK turning a blind eye to the tweets about if they did it. But they wouldn't be OK, I think, with actually easing the sanctions themselves.

KING: Something to watch in the weeks ahead --

MARTIN: Yes.

KING: Because Rand Paul is pushing the president to do something on that specific issue. We will watch.

Up next, again, somewhat related, damned if you do, damned if you don't. President Trump says sitting down for an interview with the special counsel would be a no-win situation.

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