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CNN Live Event/Special

Now, Former Trump Organization Executive Testifies in Hush Money Trial; Judge Finds Trump in Contempt for Violating Gag Order Again. Aired 10-10:30a ET

Aired May 06, 2024 - 10:00   ET

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

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[10:00:00]

KAITLAN COLLINS, CNN ANCHOR: You're watching CNN's special live coverage of Donald Trump's hush money trial. I'm Kaitlan Collins in New York.

A prosecution witness is right now walking the jury through how money changed hands inside of the Trump Organization. The important testimony follows an equally important ruling against the president from the bench, the former president, I should note. Judge Juan Merchan ruling that Donald Trump violated a gag order a 10th time, and that 11th time, if it does happen, could mean jail time potentially, that the judge said that is the last thing that he wants to do.

I want to bring in David Markus, who is joining us. He is a criminal defense attorney. And, David, just as you're watching what has been argued here, and now that we have this former employee, who's retired, I should note, from the Trump Organization up there testifying, how is the defense watching this? Because they were complaining in court this morning that they didn't find out until late yesterday that this was going to be the witness on the stand this morning. Obviously, they'll get a chance to cross-examine them. What's it looking like for the defense overall, from your perspective?

DAVID OSCAR MARKUS, CRIMINAL DEFENSE LAWYER: Look, the defense has had a rough couple of weeks to start the trial, but that's to be expected, right? You would expect the prosecution to be winning after the first two, three weeks of trial. If they weren't, they'd be in big trouble.

But the defense hasn't had a moment yet. They need that moment. Like when you were questioning J.D. Vance last week, or in the O.J. case when the glove didn't fit, there needs to be a defense moment that they can seize onto. They haven't had that yet. And so I think they're going to be pretty aggressive this week in questioning. They need to have one of those moments.

COLLINS: Yes. I like that comparison that you just made there. We'll revisit that later. But on the sense of what they're asking this person, this isn't Stormy Daniels, it's not Michael Cohen, he's not one of those blockbuster witnesses, but Paula Reid was noting earlier that he is critical because what is at the heart of this is not that Donald Trump paid hush money to a porn star. It's how he did it and how it was labeled when he paid Michael Cohen back on those internal records at the Trump Organization.

MARKUS: Right. So, that makes it really critical. You know, Hope Hicks on Friday was talking about deny, deny, deny. That's been the defense strategy in this trial, which is odd to me. That might work for P.R. I don't know if it does or not. That's your expertise. But in criminal trials, it does not. You have to be willing to concede certain things so you keep your credibility. The jury is looking for which story makes more sense.

So, this witness is going to be important because as you say, that element about whether Trump knew about the entries, the false entries, is going to be the whole case.

So, the fact that he's fighting on other things like regarding Stormy Daniels and others is odd to me. And I don't think that's a Todd Blanche-driven thing. That's got to be a client driven, deny, deny, deny thing.

COLLINS: And I should note, this employee, former employee who's retired, broke down in tears during the civil fraud trial because he was essentially talking about why he left the Trump Organization after decades of being there. And he was talking about all the subpoenas, all the legal issues that they were having to deal with.

He's now walking through how the accounting worked at the Trump Organization, as Trump is whispering to his attorney, looking over at the witness, as he's on the witness stand speaking to the jury and to prosecutors.

I mean, if Allen Weisselberg can't get on the witness stand because he's not a reliable witness viewed by the prosecution, and he's also in jail right now after allegedly lying on the stand, what -- could McConney connect him to that? Could he draw that through line for the jury here?

MARKUS: That's what the prosecution is hoping for. As you say, there's been some crying. There was crying on Friday. There was crying from this fellow before.

COLLINS: I think we're -- we need to work on your audio a bit, David. It's not totally coming through. We'll check on that and work on that.

We've also got Paula Reid and Karen Friedman Agnifilo here with me. And, you know, we look at these witnesses, the other thing that is notable to me is who's left. I mean, they're going through these witnesses at a really quick pace, including a lot of the high-profile ones. I mean, we have Stormy Daniels and Michael Cohen left, and those are really the two biggest ones.

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: Yes, certainly the big household names, the ones that are really critical to call and get their story out before the defense has a crack at them. But I think you're also going to hear from other Trump Organization executives, including people in the accounting department. So, there's definitely more people to come in terms of who they want to call it.

Now, right now, Mr. McConney is going through the general ledger for Trump's personal account. Now, my dad's an accountant, apologies to all the accountants out there, but this is not exactly riveting testimony talking about the accounting practices of this organization, but it's what is at the heart of the case.

[10:05:07]

This is what you need to put before the jury. You need them to understand Trump's role in the accounting process. How much did he know about invoices? How much did he know about how and why checks were cut? This is the heart of the case.

Again, it's Day 12. We're just getting to it now, but it is good that they have McConney on the stand, someone who has first-term knowledge and he can talk about this.

COLLINS: And, Karen, I mean, what do you make of what they're -- as they are trying to draw it closer to that? Because that has been the complaint that we've heard from critics is that, you know, they haven't been able to draw it directly to Trump. This witness is walking through that Trump was basically in charge of everything. The code to his ledger for his personal account was DJT. It is on that ledger where it said that Michael Cohen was paid for legal services, when even Rudy Giuliani is on television saying, you know, he wasn't doing any legal work for us.

KAREN FRIEDMAN AGNIFILO, CNN LEGAL ANALYST: So, this is just a critical witness. It's not as exciting or dramatic as some of the other witnesses, but it's a critical witness for the reasons Paula was saying, because he's charged with falsifying business records.

And the defense here that could happen, that if Donald Trump were to take the stand, he could say, I paid my lawyer. We called it legal expenses. He could get that out. But he'd have to testify in order to get that out and assert that as a defense.

And if he didn't intentionally violate the law and say, I didn't know, I thought it was legal expenses. Yes, I paid Stormy Daniels back, but I thought I was paying him extra for the work that he did, and we coded it as legal expenses. So, this is critical to show, to kind of neutralize that defense and prove the case.

COLLINS: And the jury that's listening to this just went home all weekend after hearing from Hope Hicks and hearing her talk about how Trump later, in her view, expressed the opinion that he was much happier that the Stormy Daniels story became public after he had already won the election. That it was better to happen then than before, which is what they've also been drawing it back to, which is that this was orchestrated not just on his personal behalf, but to benefit him politically in the campaign.

REID: Hope Hicks' testimony that moment right before she broke down on the stand probably the most significant moment for the prosecution so far. Because what she said is that Trump told her that he was aware of the payment, he knew that Michael Cohen did it, and said that Michael Cohen did it out of the goodness of his heart.

And then he also told her that he was glad that that story didn't come out, that it was suppressed ahead of the campaign. And, again, that is significant because the reason that this is being charged as a felony is because prosecutors alleged that they don't have to prove that this was done to help his chances in the election, so that was critical and now prosecutors moving on to the heart of the case, the actual paperwork.

And, again, it may not be the most riveting testimony, Mr. McConney has broken down on the stand, as you noted, but this is something that the prosecution absolutely has to nail down for the jury so they understand why they're sitting in this box.

COLLINS: Yes. Jim, obviously a key testimony from this witness who is very familiar with the inner workings of the Trump Organization at the time that all of this was happening and that these payments were being made.

JIM ACOSTA, CNN ANCHOR: Absolutely. And, Laura, Elie, Andrew, I mean, just a shorthand here for our viewers. Jeff McConney is testifying because Allen Weisselberg cannot.

LAURA COATES, CNN ANCHOR AND CHIEF LEGAL ANALYST: Yes. I mean --

ACOSTA: He's in jail.

COATES: He's in jail and he wasn't going to be a cooperating witness, I mean, in the general sense of being cooperative as well as anything else.

Let's take a second to remember where we're here though. I'm going to go to my tablet because we've seen a number of witnesses so far. We've got our witness trackers that are already there. We've heard from David Pecker, to Rhona Graff, who, of course, who knew him very well. Now we've got this man, Jeffrey McConney, who is this person, the former Trump Organization comptroller, who actually cried on the witness after being on four days out of a six-week trial for the A.G., Letitia James.

Now, why is it important to look at him? Because remember, go back to the indictment itself, there are 34 counts of falsifying business records in the first degree. What does that have to prove? You got to prove not only the intent to defraud, commit another crime, aid, et cetera, but also made and caused a false entry of the business records. That is why we're really here and having this particular witness.

And so what he can provide for everyone is not just only the intent, everything else, or the commission for a crime. This is really these two things here have to do with what happened already, excuse me, with weeks one and two.

These people have talked about right here, catch and kill. Oh my God, look at my penmanship.

ACOSTA: It's okay.

COATES: That's like I should be a doctor.

ACOSTA: For a Monday, this is pretty damn good, I guess.

COATES: The other one, of course, here is about the entire -- about the NDAs, right, and the politics of it. But now this witness is going to get us back to the core of the issues, this false entry. It's not as sexy, perhaps. It's not going to be as salacious.

ACOSTA: So, it's linchpin to getting a conviction.

COATES: Yes.

ACOSTA: Yes. Elie, tell us about that.

ELIE HONIG, CNN SENIOR LEGAL ANALYST: This is an accounting case, and this is the accountant.

[10:10:01]

Important to understand, the Trump Organization sort of has this image of grandeur, but it's really pretty much a mom and pop shop. They only had about a dozen or so core employees at any given time.

ACOSTA: Or pop than mom.

HONIG: Right. Jeffrey -- the accounting department was essentially a two-man operation Allen Weisselberg was the top guy Jeffrey Mcconney was his V.P., basically his controller, he is number two. Allen Weisselberg was not going to testify, A, he's in prison, B, he has already shown he is never going to do anything to harm Donald Trump. He has remained a Donald Trump loyalist. He did one prison term of a few months. He's now doing another one rather than testify.

If you look back at McConney, this witness' testimony prior case --

ACOSTA: And he said he delivered Trump's weekly cash report to him.

HONIG: Right.

ACOSTA: He knows the money. Follow the money.

HONIG: The key thing they're going to try to establish through McConney is that Donald Trump knew what was happening with the books. There's an update McConney says, Trump had told him, quote, just because somebody is asking for money, negotiate with them, talk to them, don't just do it mindlessly, think before you do it. Okay, there's the Trump frugality, I guess.

ACOSTA: Not surprising there, that's (INAUDIBLE).

HONIG: Yes, but they're trying to tie Trump to the books, to the accounting.

ACOSTA: Yes. Kristen? KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Well they actually do and we didn't put it up here but this is coming from inside the courtroom. It was part of a story in which they were having a conversation. And McConney says he called him in and he was on the phone, Trump was on the phone, and he said, you're fired. And then he got off the phone and he said you're not actually fired but my cash ledger went down from last week.

And then he said this, just because someone's asking for money, negotiate with them. So, that really even actually links him even closer to this, saying that he was watching the balances and he noticed from week-to-week there had been a change. So, clearly, someone had asked for money instead of just he wants him to not just give it to him but to negotiate, tying him pretty closely to what was going on here since he was looking at the balances every week.

ACOSTA: Yes.

JAMIE GANGEL, CNN SPECIAL CORRESPONDENT: You can't underplay how Donald Trump ran the Trump Organization, even once he went to the White House. Remember, he wouldn't put it in a blind trust. I'm told --

ACOSTA: Trump laughing with his shoulder shaking at the defense table, as McConney recalled Trump saying, Jeff, you're fired, he wasn't fired. McConney says it was a teaching moment. To your point, Jamie.

GANGEL: And even when his children who were involved in the family business were making decisions, I'm told they always went to him. So, when McConney says he ran the organization, he was the brains behind it, it also kept going when he went to the White House. That did not change.

ACOSTA: John, it's going to be tough for the defense to put separation between Trump and these actions that took place.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And that's why the prosecution is bringing these witnesses. You might say, where's more star power, right? You had Hope Hicks stand last week. So, when are we going to get Michael Cohen? When are we going to get Stormy Daniels?

The prosecution is trying to lay it down clear and repetitively to the jury Donald Trump was involved in everything. You couldn't spend more than a dime without Donald Trump signing off. So, that when they attack Michael Cohen and say, he can't be trusted, when he says Mr. Trump told them to do this, when he says Mr. Trump wanted this done, you can't trust him, they want to be able to say, well, what about Jeff McConney? What about Hope Hicks? What about everybody else they brought in, that nothing can happen here without Donald Trump saying do it? That's what they're trying to do use a credible witness, somebody that have no doubt to attack Jeff McConney's credibility, to essentially put a safety blanket around Michael Cohen.

ACOSTA: Yes, a little bit like the Pecker testimony. ANDREW MCCABE, CNN SENIOR LAW ENFORCEMENT ANALYST: Yes. And also in a way like Hope Hicks, this is a guy who's very favorable to Donald Trump. 35 years of loyalty, was paid a half a million dollar severance agreement when he decided to leave amidst the controversy in 2023. So, he is someone who testifies without, unlike Michael Cohen, he's got no motivation to seek revenge against Donald Trump or to kick any shade on him for that reason.

The other thing that McConney does, in addition to connecting up to Weisselberg and Trump, he also supervised Deb Tarasoff, who was the accounts payable supervisor. So, he has that ability to talk about things that were approved and how they got paid.

ACOSTA: And here's a bit of testimony, before 2017, Donald Trump had signature authority to cut checks. After Trump's inauguration, Donald Trump Jr., Eric Trump and Allen Weisselberg did.

COATES: I've got a great slide for this.

ACOSTA: Yes, please. Yes. Anything over 10,000 had to be signed by two of the signatories, so, very much a family business.

COATES: It's a family business that you say more pop than mom. But, you know, I want to go back to the tablet because, remember, we're here about falsified business records. And if you look at the dates of the falsified records that we're talking about here, and it was difficult to see, but you got the inauguration date here, right? Back in 2017, January, 2020, in red, you're seeing the different dates here, right, about when there were falsified records. Some of them in orange are those that were a continued period of time for invoicing.

But you see, if you're talking about who has the authority to sign these checks, look at all these different occasions of who you're talking about, Eric Trump or Weisselberg.

ACOSTA: This was happening while he was in office.

COATES: This happened while he's in office. And, of course, he had an update here. Colangelo is asking whether an employee receiving a reimbursement, ding, ding, ding, has to report that might as taxable income, McConney says they do not.

[10:15:05]

That's where we are right now. If I remind people, again, of this update, we have that -- here's the prosecutor, then asked whether an outside lawyer receiving a payment for legal services would have to be reported as taxable income. I would assume so, yes.

And remember, Michael Cohen is not an outside lawyer, right, so he is the inside lawyer for the Trump Organization. This is going to be very interesting to think about how they're trying to formulate again back to this falsification of business records to Michael Cohen as but one example of 34 counts.

ACOSTA: Yes. And, I mean, I have to ask, Jamie Gangel, I mean, for the folks at home who are trying to sort through all of this, process this, you know, trying to determine, okay, do I vote for Donald Trump again? I'm one of those Nikki Haley Republican voters in one of these swing states that John King was referencing earlier. How do you process all of this? I mean, this is Trump's business.

GANGEL: Absolutely. I don't know how you your process --

KING: You got a tablet for that?

ACOSTA: These payments are happening in the early days of his administration.

GANGEL: John will be able to remember the numbers for me, but there was recently a primary in Pennsylvania.

KING: He got 17 percent.

GANGEL: And Nikki Haley got 17 percent. So, there are Republicans, and that's a closed primary, correct? So ,it's not people crossing over. There are Republicans who do not want to vote for Donald Trump.

ACOSTA: Yes.

KING: They also don't go over Joe Biden. This is their wrestling, right? This is their wrestling match. And will some of them stay home? Will some of them go third party? How does this affect you by the time you get to the end?

And we're having these conversations today, and I would just be very careful, what's going to happen between now and November, both in Trump land and in Biden land, how do people feel about the economy, how do people feel about Israel and Hamas, how do people feel about things that are going to happen that we don't even know about today.

But I do think the hope of Team Biden is with this front and center, the people who might have nostalgia for the pre-COVID Trump economy. And you find that. I've been on the road a lot. That's where you find a lot of people saying, well, you know, I refinanced my house at 2.5 percent or 3 percent. Team Biden hopes, oh, yes, this is what -- I remember this.

ACOSTA: And a lot of people were talking about Hope Hicks' testimony over the weekend. I mean, that was certainly something that got everybody's attention. And then we should note, just in the last couple of minutes, the prosecutor asking whether an outside lawyer receiving a payment for legal services would have to have that reported as taxable income, I would assume so, yes, McConney says.

HONIG: But, Jim, if I could just build on that just so people sort of understand the key transactions here, there're two steps. Michael Cohen first pays Stormy Daniels $130,000. We heard testimony about that last week. The way Cohen got that money was he drew down on his own personal home mortgage, in fact, without his wife knowing about it. So, Cohen pays Stormy Daniels.

Then the second transaction, and that's what they're talking about now, and this is where the heart of the crime really lies is in the Trump Organization reimbursing Michael Cohen. And the amount they reimbursed him was over $400,000. And part of the reason the prosecution's theory is they wanted to double him up basically so that he could pay whatever taxes he would owe as a result of having made the payment to Stormy Daniels.

So, the numbers aren't going to match up here. The amount Michael Cohen was repaid was triple and then some more than he paid Stormy Daniels and the prosecution is trying to explain why it went down.

ACOSTA: And we have to wonder with -- and we saw this last week with the paper trail witnesses, that they were followed by at the end of the week, Hope Hicks' dramatic testimony, could we be building up to something at this point?

MCCABE: Absolutely. This is like a series on Netflix. You're not going to put all your big plot points in the first episode. You're going to stretch them out over the course of the series and you'll see that here in the trial.

ACOSTA: All right. We're moments away. More updates from CNN reporters inside the courtroom, as the man who was in charge of the Trump Organization ledger testifies under oath. The paper trail following the money that all continues in just a few moments.

You're watching CNN special live. Stay with us.

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[10:20:00]

ACOSTA: The accountant on the stand right now inside that Manhattan courthouse, Jeffrey McConney, the man who handed Donald Trump weekly cash reports and cut checks for the Trump Organization is testifying for the prosecution, following that money trail. The prosecution's goal is to make unbreakable links between how money flowed in and out of the Trump business to demand with his name on the door of, the former president of the United States.

Let's bring in someone who is central to this hush bunny trial, Michael Rothfeld. He's a former reporter for The Wall Street Journal who helped break both the Karen McDougal story in 2016 and the Stormy Daniels story in 2018. We might not be here today, if not for the reporting coming from him and his colleagues. Michael, thank you very much for joining us. We should note you're now an investigative reporter for The New York Times and joins me from the New York Times newsroom.

Your sense of how everything is playing out right now? I mean, a lot of these witnesses sound as though they're almost people who help manage Donald Trump's piggy bank as much as his whole business. But these alleged hush bunny payments to Stormy Daniels that you've been reporting on for years, is there anything in this trial that has jumped out that is new to you?

MICHAEL ROTHFELD, INVESTIGATIVE REPORTER, THE NEW YORK TIMES: I mean, I think it's largely what we expected. I mean, what we're seeing now is I think that, you know, they started by trying to show how Trump and David Pecker from the National Enquirer and Michael Cohen had a deal to suppress news about the election. That's the context in which these charges of falsifying business records to repay Michael Cohen for the Stormy hush money.

[10:25:01]

So, now they're moving with this accountant, Jeff McConney, into the actual repayment scheme for Michael Cohen and the false record. So, we're seeing a gradual progression of that until we get to eventually Michael Cohen.

ACOSTA: And, Michael, McConney was recalling just a few moments ago that Cohen was complaining about his bonus, so that was factored in at the time. And this latest tidbit, McConney says, we added everything up and came up with the amount we would have to pay him.

It sounds as though the prosecution with McConney's help was trying to lay out, okay, this may be why some of the numbers don't add up and why Cohen got a little bit more than what was reimbursed and so on.

ROTHFELD: Yes. The $420,000 he was repaid over the course of a year, which was characterized as legal fees, was made up of a few different things. One of it was the $130,000 hush money, there was a bonus you just mentioned, and then they doubled everything for taxes, but they said it was all legal fees, which is what the prosecution says was just basically a lie, and that's where Trump is charged with 34 counts of phony records at his company.

ACOSTA: And right now, the prosecution is showing an exhibit with Allen Weisselberg's handwriting. We were just talking a few moments ago about why Allen Weisselberg is not testifying. He's in the slammer. But the prosecutor also was saying right now, did Mr. Weisselberg sometimes take acute notes to record financial decisions? And McConney said, he responded to that. Another update, how do you know it's his handwriting, the prosecutor asking. McConney says, I've been looking at his handwriting for 35 years.

So, they're essentially having McConney testify to what Allen Weisselberg was doing during that timeframe.

ROTHFELD: Right, and that's important that Weisselberg was basically -- I mean, he was a trusted lieutenant for Donald Trump and was essentially arranging this reimbursement of Michael Cohen. What the thing Weisselberg could have provided, which he's not going to, is the direct connection to Donald Trump.

And the only thing that person that really is going to be able to do that is Michael Cohen. And, obviously, we know, you know, he's been to prison. He's going to be attacked for his credibility. And so, you know, that's going to be make or break for the prosecution.

ACOSTA: And jurors are being shown the bank statement with Weisselberg's handwriting as well as a document with the notes that he took. I mean, all of this is just to establish that paper trail so the defense can't come in later and say, I didn't -- you know, Trump didn't know what these guys were doing. You know, this was all going on behind the scenes. He didn't know about that. I guess that's part of this as well.

ROTHFELD: They're probably going to say that anyway. They're going to say, well, Donald Trump relied on his employees. And they told him that these were legal fees, and he just signed the checks. When Rhona Graff, his assistant, was on the stand the other day, the defense was asking her, didn't he sometimes sign checks while he was on the phone, you know, to make it sound like he was distracted and he would just sign these checks? But the prosecution has really tried to show Donald Trump was very careful about every dollar that came in and out of his company.

ACOSTA: Yes. And, Michael, I mean, does it make sense, I mean, to speculate just for a moment, that perhaps this is teeing up Michael Cohen to testify? I mean, if we're having somebody establish your -- where the paper trail was going, where the money was flowing from the Trump Organization to Michael Cohen might make sense to bring him in next or not too long after that?

ROTHFELD: Yes. I mean, it's definitely setting him up. He's the one who's going to put everything together, the context in which this hush money deal was made and the reimbursement, that's the focus of the indictment. But probably he'll go last. He's the star witness. And so they will want the jury to see him before they finish their case, I imagine.

ACOSTA: And before I let you go, your article, breaking the Stormy story, has heavily featured in this trial, what's it like to have your work be the jumping off point for the first criminal trial of a former president in history? And what we just heard a few moments ago, earlier on in this program, it could lead to the temporary incarceration, the first temporary incarceration of a former president.

ROTHFELD: I mean, it's real, obviously. I mean, six years since we reported that story and eight years since the Karen McDougal hush money deal at the (INAUDIBLE), and, obviously, yes, you got to go.

ACOSTA: Michael, I wish we had gotten that answer. There was break -- the signal was breaking up there over at The New York Times. We'll get back to you, Michael, as this trial progresses. Thanks so much for all of that.

And I guess, you know, as sort of we have a bunch of questions laid out that I was going to ask Michael ended up asking, what was happening during the trial. It got very interesting there, Laura. I mean, because they were talking about the -- basically, they're having Jeff McConney answer for what Michael -- Allen Weissberg, I should say, was doing during this time here.

[10:30:04]

Allen Weisselberg can't testify. Jeff McConney can.