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Sources: Judge Sides With Special Counsel, Agrees DOJ Showed Evidence Of Trump Crimes In Docs Case; Communications Between Stormy Daniels & Trump Lawyer Turned Over To Manhattan District Attorney Office; Manhattan Grand Jury Will Not Meet Today; Fed Considering Inflation, Banking Crisis In Rate Hike Decision; Today: Fed Makes Key Decision On Interest Rates; DeSantis Takes On Trump In New Interview. Aired 12-12:30p ET

Aired March 22, 2023 - 12:00   ET

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

[12:00:00]

JOHN KING, CNN HOST, INSIDE POLITICS: Hello, and welcome to INSIDE POLITICS. I'm John King in Washington. Thank you for sharing your day with us. Two courts, two legal migraines for Donald Trump. In New York, a grand jury weighs charging the former president for steering money to silence Stormy Daniels. And here in Washington, a consequential secret ruling from a federal judge agreeing with the special counsel prosecutors that there is evidence. Trump used his attorneys to commit crimes.

And today, a Fed decision on inflation. Plus, a demand from Democratic senators for more Fed action. They want to corral regional banks they blame for pushing the economy to the brink. And Ron DeSantis hits back. The Florida governor is not a declared 2024 candidate yet, but he's a frequent target of Donald Trump and other Republican hopefuls. In a new interview, DeSantis labeled himself a no drama winner and he laughs off a Trump nickname.

(BEGIN VIDEO CLIP)

PIERS MORGAN, FOX NEWS HOST, PIERS MORGAN UNCENSORED: Which is your favorite nickname that Trump has given you so far? Is it Ron DeSanctimonious or Meatball Ron? Even he went off Meatball Ron.

GOV. RON DESANTIS, (R) FLORIDA: I can't. I don't know how to spell DeSanctimonious. I don't really know what it means, but I kind of like it's long. It's got a lot of vowels. I mean, so we go with that. That's fine. You know, you call me whatever you want. I mean, just as long as you, you know, also call me a winner, because that's what we've been able to do in Florida.

(END VIDEO CLIP)

KING: Back to that a bit later. But up first for us, Donald Trump's legal worries. Manhattan prosecutors may soon ask grand jurors to return an indictment against Donald Trump that in the Stormy Daniels hush money investigation, but the New York case is far, very far from Mr. Trump's only legal dilemma. A dramatic and until now a secret finding from a federal judge here in Washington that there is evidence. The judge says, the former president used his attorney to commit a crime. Because of that finding judge Beryl Howell gave the green light to special counsel prosecutors ruling. They can pierce attorney client privilege and they can question Trump lawyer Evan Corcoran before a federal grand jury.

Team Trump is challenging that ruling and the D.C. Circuit Court of Appeals has put the case on the fast track. Trump lawyers had a midnight, last night - midnight deadline to file their written arguments. Special Counsel Jack Smith's team then worked overnight to meet their 6am response deadline. The stakes here are enormous for the special counsel in his investigation of the handling of reams of classified documents the former president took from the White House to Mar-a-Lago when he left office.

In asking Judge Howell to order Corcoran to testify, the special counsel put in writing his view that Trump use his lawyers as part of a scheme to hide from the government the truth about documents still in his possession. And Judge Howell agreed in her ruling that prosecutors had shown her evidence, Trump perhaps committed a crime.

CNN's Katelyn Polantz and the former federal prosecutor Elliot Williams are here to help us understand the moment. Katelyn, starting with you. Very significant that one in writing the special counsel said, I have evidence, Donald Trump committed a crime. And then the now retired, but the chief judge, a senior veteran judge on the D.C. court said I agree.

KATELYN POLANTZ, CNN CRIME AND JUSTICE REPORTER: Yes. I mean, John, when we are talking about all of these grand jury activities, we're always talking about these little developments. This could be the ballgame in the classified documents investigation. I mean, this is the Justice Department making clear that they believe they need Donald Trump's lawyer to testify against him to make the case of either mishandling of classified records or obstruction of justice potentially a case against the former president.

This is so serious. And the reason we know that this is so serious is because there are all kinds of signs of that. The amount of steps the Justice Department had to take and the choices that they had to make to try and get Evan Corcoran to this point, to get this ruling from Judge Howell, that is not a small thing for the department to do.

And then on top of that, we see Trump scrambling to the appeals court yesterday, trying to put on hold whether Corcoran has to go in to testify to the grand jury. And the appeals court set, what's basically an unheard heard of deadline, courts never move this fast.

And they were looking at like a 12-hour period where they wanted the Justice Department to respond. And so now, this is all in the circuit. Before these three judges at the D.C Circuit and they are the ones right now who get to decide, does this Donald Trump defense lawyer testify against Donald Trump?

KING: And you're seeing the three judges on the D.C. Circuit Court of Appeals who will hear this appeal. Quickly written arguments could cut the decision, could come any minute now. Elliot, it's a big deal. It's a big deal for an attorney to go to a judge and say, I want to force Donald Trump's lawyer to testify.

[12:05:00]

Mr. Corcoran testified before but refused to answer certain questions saying, I have a privilege and lawyers do have a privilege with their client, whether you like or dislike their client. It's an important underpinning of the American legal system. So, I just want to read you a little bit from the New York Times reporting. This goes back to October of 2022.

The lawyer, M. Evan Corcoran, met Ms. Bobb, another attorney, at the president's residence and private club in Florida, asked her to sign a statement for the department that the Trump legal team had conducted a diligent search at Mar-a-Lago and found only a few files that had not been returned to the government.

It turns out, there were a lot of files still at Mar-a-Lago. So, the point that special prosecutor tried to make here is that Donald Trump either lied to his attorneys, and then they misrepresented. They thought they were telling the truth, but they found the document that was simply not true, or got the lawyers involved in this conspiracy with him, right?

ELLIOT WILLIAMS, CNN LEGAL ANALYST: Right. And there are other attorneys who I believe might have even been Christina Bobb, who sort of paused at that and signing their names to those documents, because they were going to be put in a position of having to sign, attesting to the fact that they knew not to be true.

Any classified documents case is going to hinge on the knowledge of the defendant that he was holding on to documents, despite having received information that he shouldn't have had them. So, it is critical information, it is profound, because of how important the attorney client privilege is to pierce that relationship. So, we'll see where it goes, but this is a big step.

Now look, and to be clear, it's a lower bar then accusing someone of a crime in court or convicting somebody or, you know, you just have to establish - this is not even probable cause that a crime is committed, but it is a finding by a court that it has and that's significant.

KING: And so, walk through the legal issues here, Jack Smith, a special counsel. Donald Trump takes these documents. So, the question is, why does he take them? How are they handled within a secure place, but then you get into the potential obstruction. As part of the investigation, if you're lying to the government, the government says, we know you have these. Let's begin by returning them all. And then we'll have a conversation. And Trump repeatedly says, you have them, but they didn't.

POLANTZ: They didn't. And we have been reporting on the fact that there were boxes that were moved that were seen on surveillance tapes. So, a lot of witnesses in this investigation had been asked about that. Clearly, they want to know what Trump said to Evan Corcoran and around the time that they were going to make this statement. And they have reason to think that whatever Trump said there is very significant for this investigation.

So that is, I mean, those are big things that they're going after illegally to build this case. We don't know if the crime fraud arguments are about the mishandling or about the obstruction - but they all kind of - they all come together, right? Because that's what makes this situation different.

As far as we know, from the other documents situations with Joe Biden, Mike Pence, were there finding documents or turning them back over to the federal government. In this there were - they had documents, there were some turned over and then they kept finding more and more and more.

KING: And it's important in each of these different investigations of Donald Trump to make clear the things we don't know, which often is a lot. If you're asking a judge now getting, you know, now you're appealing, but you want a ruling that you can question the attorney about this, does that give you as a former prosecutor? Any sense or clue as to where Jack Smith is in the arc of an investigation?

WILLIAMS: It's hard to know, John, because anything they uncovered, they're going to have to run down and try to corroborate. So, if they're getting new information or material here that could delay the point at which they can bring charges because they've got to - get on top of the information they have. Look, it's clear that this investigation is moving. They're moving on. They're a lot further along than they were weeks or months ago, but it's hard to say when something would come soon after this.

KING: Stay with us because I want to go now and turn to some exclusive CNN reporting on communications that may bench a Trump attorney in a different case. A Trump attorney who was building the former president's defense against the Manhattan prosecutor.

CNN's Kristen Holmes has the details. Kristen, Stormy Daniels, obviously central to this hush money case. Joe Tacopina, a Trump attorney who we've seen on television in recent days, they have a history.

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: That's right. So, what we know now is that Stormy Daniels' current attorney Clark Brewster turned over communications from 2018 between Daniels and Joe Tacopina, when Stormy Daniels was looking for an attorney.

As of now, the big question is whether or not there was confidential information in those documents. And according to Brewster there was. The reason why this is the big issue is whether or not they would use - that they could use that information Tacopina in this case, and potentially use it against Stormy Daniels if this were to go to trial and there was some sort of cross examination.

So, right now what is in the hands of the judge to determine whether or not the communications rise to the level of a conflict of interest that would require some sort of disqualification for Joe Tacopina, as well as even some sort of limitation, which I've talked to a number of people.

Sources has been said - that is possible as well, something that looked like another partner or another lawyer coming in to do a cross examination. But again, right now that's in the hands of the judge.

KING: Kristen Holmes for us, appreciate that update. Let's bring the conversation back in the room. Nothing involving these cases is ever clean or straight. There are no straight lines in any of these cases involving Donald Trump.

[12:10:00]

What's the big question here? Does he have to be just set aside? You can't be part of this case? Or does he have to get a judge to say, OK, you know, people - lawyers move on from client to client, but do you know certain things that you just must not bring into this case? How do you handle it?

WILLIAMS: Like you said, nothing is easy. So, they could disqualify him from serving on the case. That's probably the least ideal option because he's somebody's attorney and somebody's, you know, the former president is entitled to the counsel that he wants.

You could wall him off from conversations about her, but even that's difficult. So, what does he not talk to any other attorneys? Does he not work with the team. So, they have to come to and then they have to look at what the statements actually were. And maybe it was nothing controversial or confidential. It's just not easy and the judge really has to slice it up and determine, you know, what you do with him?

KING: One of the many questions we have and when we have the answers, we'll bring them to you. Up next for us though, decision day for the Federal Reserve. Another interest rate hike is on the table because of starboard inflation. But many argue for a rate hike pause because of the banking crisis.

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[12:15:00]

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KING: I want to bring you a breaking news development just into CNN out of Manhattan. The New York Times is now reporting that that grand jury looking at the evidence in the hush money case involving Donald Trump, while that grand jury did not meet today.

Let's bring in our legal analyst Elliot Williams. Elliot, everyone has been waiting, saying they brought in the final witnesses, and we thought it was decision day, the grand jury not meeting today. What does that tell you?

WILLIAMS: Yes. Look, any number of things, John, we can really speculate here. And part of the problem is that grand juries are secret. So, you don't really know what's going on in there and what the bases might have been.

Number one, we were talking just before the break about the Stormy Daniels and Joseph Tacopina, maybe they wish to get more information about that. And they've delayed, perhaps it might be a question of seeking more evidence or more witnesses coming in, you know, bring more folks and they want to reschedule.

Or, frankly, it could be something administrative and they just could not meet today. It's hard to know. And it's hard to know how this affects the outcome of the trial. But you know, but it obviously it's important news.

KING: And CNN has just confirmed that the grand jury is not meeting today. You've made a key point in your answer, which is grand juries are normally secret. We will have this anticipation of a decision because the former president said over the weekend that he expected to be indicted and arrested yesterday, Tuesday. Now it is Wednesday, and the grand jury is not meeting.

Again, we don't know anything here. But if you're the prosecutor, the D.A here, Alvin Bragg, not only do you have a very critical legal decision to make. Do you ask the grand jury to return an indictment about you're in the middle of what I will call a political firestorm and that's an understatement.

WILLIAMS: Look, it was always going to be political firestorm, John, when you're investigating or possibly charging the former president with a crime. Even setting aside the question of the foreign president saying that he anticipated being charged. The idea that he was asked, he was believed to have been - his lawyers were believed to have been asked to have him come in and testify, was itself indicative that a grand jury might have been getting to more charges.

As a general matter in New York right before charges come, it's often the case that they'll call a defendant and or potential defendant and give them a chance to effect to explain themselves. That seems to suggest that charges were coming. But it could be days, weeks or never, for quite frankly, until we get more information from them.

KING: Elliot, appreciate the important insights. As we said in the previous segment, there are no straight lines, it does not appear to be a straight lines anyway, when it comes to these investigations. Elliot Williams, grateful for the insights.

Let's moving on to giant economic news. This afternoon, Jerome Powell will make one of the most consequential decisions of his career. How much and if the Federal Reserve will raise interest rates again. It's the first time we will hear from the Federal Reserve chairman since the collapse of Silicon Valley Bank and Signature Bank earlier this month. That happened a bit earlier this month.

Joining us now to break all this down, CNN's Matt Egan and Mark Zandi, is the chief economist for Moody's Analytics. Mark - Matt to you first. Let's just put up on the screen. The line of the inflation rate over the past year or so. The Fed has consistently raised rates. The expectation, if you took the banking crisis aside would be that they would raise rates again to try to corral inflation. But a lot of people say enough volatility timeout. What do we expect?

MATT EGAN, CNN BUSINESS REPORTER: Well, John, this would be one of those rare days where the toughest job in this town isn't over 1600 Pennsylvania, it's at the Federal Reserve because Fed Chair Jerome Powell, I mean, he's really finds himself stuck between a rock and a hard place.

I mean, if he does nothing here, he risks worsening inflation and worse freaking out the market, because investors would immediately say, well, what is the Fed know that we don't know. But if he raises rates, he's kind of amounting to, you know, doubling down on the same conditions that actually helped spawn this banking crisis.

Now, some economists want the Fed to pause just last hour, economist Diane Swonk told Kate Bolduan, that's what the Fed should do, do nothing here. Goldman Sachs is predicting that's what will happen. But investors are coalescing around the idea that there will be a rate hike. The last check 85 percent chance. It's being priced into the market of a 25-basis point rate hike.

And if that happens, I think it means two things. One, the Fed really means business. They really are trying to get inflation down. But two, it means higher borrowing costs for everyone at home, right, mortgages, credit cards, car loans, and I think the risk is still the same that they end up doing too much and causing recession.

KING: Mark Zandi, you're one of the best in the business at making your list, right? You make a list of arguments for, arguments against the rate hike. As you make that list, do you see this as a clear-cut choice? Or is it literally a coin toss?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: It's not clear cut, John. I mean, Matt laid it out pretty nicely. The Fed is in a very difficult spot, you know, they inflation is too high. They need to get that down. And that does argue for higher interest rates, more rate hikes.

But you know, just a week ago, we were embroiled in a pretty serious banking crisis, so deposit runs, people were very nervous. The government had to respond incredibly aggressively. Even the Fed had to set up a facility to provide liquidity to banks so that they could pay off depositors, so they're trying to ease pressure on the banks.

[12:20:00]

So, raising rates now just puts additional pressure. So, it's a really tough one. If I were on the committee and trying to make this decision. I think I'd argue hey, let's just pause here, let's take a look around, our number one priority has to be to make sure that the system is functioning well and let's establish that.

And once we do, hopefully in a week two or three, then we pivot back to addressing inflation. And by the way, we're all meeting again here in May in a few weeks. And if the system is sound, and inflation is still the issue, that we think that we can start raising rates again. So, I would caution against raising rates here. You know, quarter point isn't going to break anything. But you know, I think at this point in time I'd be more cautious.

KING: And so, when we hear from Chairman Powell this afternoon, we're going to hear him explain what they decide to do, whether they raise rates again or not. But he's also going to get an unusual set of questions. Normally, it's about the fight against in recent months, the fight against inflation.

But he's going to get a lot of questions about his performance, and about the Feds performance, and about the system's performance in the banking crisis. You have some exclusive reporting, Elizabeth Warren and others in the Congress. I'll read your graph from it after the bank failure.

Elizabeth Warren demands Fed crackdown on large regional banks, irresponsible and excessive risk taking by SVB and Signature executives should serve as a clear reminder that banks cannot be left to supervise themselves. The Fed has a responsibility to ensure financial stability.

What do we expect the answer will be to have as the Fed given us any clues when they say, shouldn't you have done more? Did you not miss something big here?

EGAN: Well, John, the Fed has launched a review of its own regulation here. I think they've got to try to figure out, how they missed what in hindsight look like some red flags. At the same time, they are facing some political pressure, right? I mean, Democrats, there's this effort to sort of undo the 2018 rollback of Dodd-Frank kind of rollback the rollback, right?

So, one, they want to be - maybe they're introducing new legislation that would repeal that 2018 deregulation. But also, now we have the lawmakers stepping up this pressure, they're calling for the Federal Reserve to kind of unilaterally crack down on the large regional banks, the ones between $100 billion and $250 billion in assets. Those are the ones that got relief in 2018.

But there's a lot of debate here over how much that deregulation contributed to these bank failures. But there's no debate that the bank failures have really strengthened the case of regulation hawks like Senator Elizabeth Warren.

KING: So, Mark, to that point, based on the information we have now. And I know that there may be some information, we don't quite have yet about how all these things happen. But do you see this as proof, we need to rollback? Or reinstate the parts of Dodd-Frank that were taken away? Or is this a case of no, the existing regulations and the power and authorities are actually quite fine, people just did not exercise them when they should have?

ZANDI: Well, I think it is wise to wait till we get kind of a root cause analysis here to really truly understand what went off the rails with Silicon Valley Bank. But my sense of it is that the rollback of those regulations on banks of less than $250 billion had an impact. You know, it goes to capital, the amount of capital that they hold, which is the cash cushion that banks have to digest the losses on their loans and on their securities, it goes to liquidity. And that's what this is all been all about.

Banks haven't had the cash necessary to pay off depositors because the stress test. You know, those are simulations of a world where things are going off the rails, like higher interest rates or bad recession. And banks have to figure out what that means for them and prepare for that.

So, there's a long list of things that these banks would have done, Silicon Valley Bank would have done if those regulations were still in place. So, my sense is that, you know, we do need to defer regulation. But you know, there's usually when you have a crisis like this, when something really goes bad like this, it's a long list of things. It's not just one thing.

KING: Right. And even if people read that list, you have a divided government where the House Republicans may think differently than the Senate Democrats. So that will complicate things even more so. Mark Zandi, Matt Egan, appreciate the important insights. Again, we'll get the Fed decision a bit later this afternoon. We'll bring it to you at CNN as soon as it happens.

Up next for us. Ron DeSantis, on Trump, on Biden, and our nicknames. The Florida governor still adds an if, when talking about 2024. But in a new interview, he leaves no doubt, he's running.

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[12:25:00]

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KING: Might call this a reset of sorts for Ron DeSantis. The Florida governor's poll standing down a bit after weeks of incoming from Donald Trump and other 2024 Republican hopefuls. But in a new interview done with the Fox streaming service, DeSantis urges Republicans to contrast his style with that of the former president.

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GOV. DESANTIS: I would have fired somebody like Fauci. I think that he got way too big for his britches. I get personnel in the government, who have the agenda of the people and share our agenda. The way we run the government, I think is no daily drama, focus on the big picture and put points on the board.

(END VIDEO CLIP)

KING: With me in studio to share their reporting and their insights, CNN's Dana Bash, Jackie Kucinich of The Boston Globe, and Rhonda Colvin of The Washington Post. He's subtle about this. He doesn't want to say don't vote for Donald Trump. He'll just bring you chaos, but that's what he's saying. When he says, no daily drama, focus on the big picture and put points on the board. That is a think of what the four years of Trump were like. I'll give you the policy without the drama. DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: That's exactly right. It is subtle, but very clear, very clear. It's very thinly veiled what he is trying to do, which is exactly that, which is you talk to a Republican after Republican whether it's elected officials.