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Trump Org Employee Testifies In Hush Money Trial; Judge Finds Trump In Contempt For Violating Gag Order Again; Sources: U.S. Soldier Arrested, Detained In Russia. Aired 3-3:30p ET

Aired May 06, 2024 - 15:00   ET

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

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UNIDENTIFIED MALE: This is CNN Breaking News.

BRIANNA KEILAR, CNN HOST: We are tracking breaking news on several fronts today. In the Middle East, Hamas has agreed to ceasefire terms. Exactly what terms? We're still trying to work out. The world is waiting on Israel's response as the IDF readies an incursion into parts of Rafah. They have an evacuation order in eastern Rafah.

In the meantime, here in New York, we're following the latest on former President Trump's hush money trial. This is an accounting case at its core. And today, jurors are hearing from two people who handled the accounts at The Trump Organization. Right now, Deborah Tarasoff is on the stand, another longtime Trump employee. Wolf?

WOLF BLITZER, CNN HOST: We're following all these dramatic developments, Brianna.

Earlier in the day, Trump's former controller discussed the monthly checks Michael Cohen, the president - the then-president's former lawyer and fixer - got from Trump's personal account after Trump became president. The prosecution says those checks were part of a falsified paper trail to cover up reimbursements for the Stormy Daniels hush money deal.

I want to go to CNN's Elie Honig. He's over at the "Magic Wall" for us.

Elie, take us through what Deb Tarasoff, another accountant who worked at Trump - for The Trump Organization is talking about now and how it ties back into the testimony from the former Trump organization executive, Jeffrey McConney, who also testified earlier today.

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Yes. Wolf, this case at its core is really about accounting. And today, the jury is hearing from the key accountants within The Trump Organization. First, let's understand who these folks are.

Now, Allen Weisselberg was the chief financial officer of The Trump Org. He's in prison right now. He will not be testifying. But this morning, the jury heard from the next person in line, Jeffrey McConney, who is the comptroller. And now they're hearing from Deborah Tarasoff, who worked underneath and with Jeffrey McConney, so they're hearing from the inside of the accounting apparatus.

Now, it's important to understand why this matters in the case. The way that the payments to Stormy Daniels were made. First, Michael Cohen paid Stormy Daniels $130,000, essentially of his own money. Originally, he drew down on his mortgage, paid her.

Then later, and this is where the accountants come in, Donald Trump's organizations reimbursed Michael Cohen for way more than that, $420,000. And this is really important to the case the prosecution is making. They're arguing that it was set up this way intentionally to misleadingly make it look like attorney's fees.

So let's break down. We're now learning how we arrived, how prosecutors arrived at this $420,000. Prosecutors have argued that $130,000 of it was to reimburse Michael Cohen for the payments of Stormy Daniels. There was another $50,000 to reimburse Michael Cohen for an outside contractor unrelated to this case. Prosecutors also alleged that $180,000 extra was paid to Michael Cohen to cover his tax liability for this $180,000. And then finally, Michael Cohen was given a $60,000 bonus. That's how they allege this $420,000 payment was arrived at.

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Now, there was a really important moment this morning where one - the morning's witness, emailed the current witness. In that email, Mr. McConney emailed Deb Tarasoff, and he tells her: "Please pay from the trust post to legal. Post to legal." Post to legal is really important because, again, the core prosecution theme here is these were actually reimbursements for hush money, but The Trump Org people tried to make it look like legal fees.

And one of the ways that the reimbursements happened, of course, we've seen these checks, but there were a series of checks, and the prosecution went through them this morning with McConney issued from Trump and the organization to Michael Cohen, including some of those checks, not all of them, but some of them signed by Donald Trump. You can see his distinctive handwriting there. Jeffrey McConney actually identified that as Donald Trump's handwriting. I think we all probably recognize it.

On cross-examination, the main point that Trump's lawyers made to Jeffrey McConney is that he had limited to no contact with Donald Trump. He was asked President Trump did not ask you to do any of the things that the DA described to you. And McConney said he did not.

In fact, McConney said he did not talk to Donald Trump at all in 2016, '17 or '18. So Wolf, as always, the key here is linking what was happening in the accounting department all the way up the chain to Donald Trump. That's what prosecutors are trying to establish here and defense lawyers, of course, are trying to say Donald Trump was operating up in the clouds. He wasn't involved in the nuances here.

BLITZER: It may get a little complicated, but it's very, very significant in this case. Elie, thank you very much.

Let's talk a little bit more about some of the key moments from today's earlier testimony.

Joining us now, trial consultant Richard Gabriel.

Richard, thanks so much for joining us. Court was dramatic right from the start today with Judge Merchan finding the former president in contempt for violating the gag order once again for a 10th time. He imposed another $1,000 fine on Trump and even threatened to send him to jail - jail, if he violates - if the violations continue. So first of all, what's your reaction to that?

RICHARD GABRIEL, TRIAL CONSULTANT: Well, I mean, it's a huge struggle. I mean, Donald Trump has consistently said that he does not even think he should be curtailed in any way of saying about anything. And the truth is Donald Trump has been pushing the boundaries about whether he even recognizes the rule of law. He feels somewhat accurately that he is in contempt of the court.

So I think it's an interesting dynamic here with a defendant, which most defendants obviously come into court with some of this deference to the authority of the court. Donald Trump doesn't feel that at all. So it's this struggle. And I think it really is going to play out depending upon whether he gets on the stand to testify.

BLITZER: The Trump Organization controller, the accountant Jeff McConney, explained the nuts and bolts of that $420,000 in payments to Michael Cohen. But he also testified that Trump didn't ask him directly - directly to arrange those alleged reimbursements. How is the jury likely to respond to that?

GABRIEL: Well, Wolf, this is really the piece by piece, brick by brick, chain by chain kind of an exciting Al Capone building of a case in which they're really just sort of linking everything together here. It's kind of like a jigsaw puzzle where they're just trying to put pieces together to really create a picture for the jury.

I think there's clearly a theme that the prosecution is going for, which is Trump is involved. He has knowledge about everything. He has control over everything. And I think the - obviously, the defense is trying to lay a foundation to saying, look, this is the - during the middle of the campaign and this is not really what he's focused on at all.

And I think one of the key pieces today also was that there was a lot of chaos in the 2017 period when he actually - when the - these recordings are made and so that - he really isn't aware of this. But the problem here is that Trump is very controlling and you have two financial people on this jury who are also looking very carefully at the financial aspects. There's - they're very clearly keyed into this. You see jurors taking notes on this. They're tracking this evidence very clearly.

BLITZER: Yes, good point. McConney, The Trump Organization accountant, the controller, described the chaotic inner workings of The Trump Organization after the former president took office in terms of handling the accounting procedures. What's your take away from that?

GABRIEL: Well, I mean, it really has to do with - it's - it is the building blocks. I mean, obviously, the defense in various points is going to go. The connection is not made here. So, I mean, these accounting procedures obviously have to have resonance, especially for the financial people and also for the lawyers. We've got two lawyers on this jury remember.

Got two lawyers, two financial people, two engineers, so very smart jury really trying to put these pieces together here and trying to kind of go, okay, what is the hierarchy?

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What is the structure of this organization? Who's aware of what and who is responsible for what? And I think Deborah Tarasoff just said, look, Donald Trump is not going to sign a check that he doesn't approve of and he voids checks periodically.

So there's a lot that's being built up by the prosecution, especially about even though it's a lot of chaos, it's a big organization. There still is a lot of control on top by Donald Trump.

BLITZER: Yes, very important developments indeed.

Richard Gabriel, thank you so much for joining us.

GABRIEL: Thank you.

BLITZER: And Brianna, back to you.

KEILAR: Wolf, some breaking news just in to CNN. We're learning that an American soldier was arrested in Russia last week on suspicion of theft and that that soldier is now being detained. This is something that we've learned from two U.S. officials. Let's go to CNN's Natasha Bertrand at the Pentagon.

Natasha, tell us what you're learning.

NATASHA BERTRAND, CNN CORRESPONDENT: Yes, Brianna, not much more than that, unfortunately. But we are learning is that an American soldier who was stationed in South Korea traveled to Russia of his own volition, where he was arrested on May 2nd by Russian authorities on suspicion of theft. Now, we don't know exactly what the circumstances of that arrest were. All we know at this point is that he is currently being detained in pretrial detention until at least July 1st, according to two U.S. officials.

Now, the U.S. embassy in Moscow, they are trying to get consular access to this American soldier, and we are told that his family has been made aware of his detention. Furthermore, the White House said just moments ago that they're also aware of the case, but they referred, of course, questions to the Department of Defense here for any additional information.

Now, obviously, this is a very, very sensitive moment for U.S.-Russia relations, particularly when it comes to those hostage negotiations. There are several hostages that the U.S. has deemed wrongfully detained, Americans being held in Russia currently, of course, including Evan Gershkovich and Paul Whelan.

And so Russia now has added, it seems, yet another detainee to that list of Americans that the United States is going to have to determine whether or not this individual was wrongfully detained and take the appropriate steps from there to try to get him back. But, of course, this is not welcome news for anyone here in the U.S. who have been trying so hard as is to try to get the Americans who are already in the Russian prison system back home. Brianna?

KEILAR: All right. Natasha, we'll continue to follow that story. Thank you for the latest there.

And in the meantime, testimony continuing in Donald Trump's hush money trial here in New York. More of what is coming out of that courtroom when our special coverage continues.

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BLITZER: We're following the latest developments out of the Trump criminal hush money trial in New York City. Deborah Tarasoff, the accounts payable supervisor in The Trump Organization's accounting department, is still on the stand. She allegedly helped arrange for Michael Cohen to be reimbursed for Stormy Daniels' hush money payment. My panel is back with us.

And Elie Honig, let me ask you, what's your reaction to her testimony so far?

HONIG: Well, it seems like it's useful to the jury in a sense that it's explanatory. There are a lot of - the jury has to understand the accounting mechanisms here if they're going to get to a conviction and I think if you take the morning's testimony from Mr. McConney, combined with Deborah Tarasoff, I think it's quite clear how they structured these payments, that they intentionally repaid Michael Cohen three plus times the amount that he laid out.

The question, two questions, are one, why did they overpay him that much? And two, to what extent can they impute that to Donald Trump? To what extent was Donald Trump aware of this specific mechanism? Who came up with it, by the way? I think it will emerge that this was Michael Cohn's idea to structure it this way. The question, though, is did Donald Trump know about it and bless it?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, what was also interesting about her testimony is that she shows you how the ledger entries were made. McConney talked about the invoices. She takes you another step and talks about how they used to send, via FedEx, the checks to be signed to the White House, where Donald Trump would sign these checks and they would be then returned.

So it really takes it into the White House, potentially into the Oval Office, where Donald Trump, with his sharpie, was signing these checks even as he was president of the United States.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Although there's nothing that - I understand in the case that he's not charged with anything as it relates to his job as president of the United States.

BORGER: No, no.

CHALIAN: The case is purely about what he was doing as a candidate for president of the United States, even though these payments came once ...

BORGER: Continued.

CHALIAN: ... he was in ...

BLITZER: In a strict campaign finance laws,

CHALIAN: ... office, exactly.

BORGER: Yes, yes.

CHALIAN: There's no doubt about that, Wolf.

What is so intriguing to me, I mean, just listening to you start this segment, Wolf, it's like we're now into the portion of this trial of the accounts payable supervisor. I mean, the - what - we are not in the land of big corporate America. We are in the land of a family business, of a small shop.

No offense, Mr. President, I don't mean small that you didn't make money here. I'm just saying it was an intimate affair. So when you learn like the check was stapled to the top of the invoice and that's how Mr. Trump liked it, and then he would sign in the sharpie. That - this is not being processed through some massive accounts payable department.

We heard today from the two people basically responsible in The Trump Organization for getting bills paid.

BORGER: And even after he became president, he didn't give up that authority to sign checks, which is kind of remarkable.

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I mean, we know that Eric Trump was involved in running the business, but anything over $10,000 had to have the approval of Donald Trump and Eric Trump. And there he was as president of the United States, still involved in running this small enterprise. I mean, yes, they made a lot of money, but it was a small family business and he didn't give it up.

BLITZER: Yes. I'm still confused. I still don't understand if Michael Cohen gave Stormy Daniels, what, $130,000. Why was he reimbursed from Trump for more than $400,000?

HONIG: So it's an important question in the case. The answer I think that prosecutors would give is this is all part of the scheme. They were trying to cover up the $130,000. They didn't want a one - for one, well, Michael Cohen paid Stormy $130,000, therefore I'm going to pay Michael Cohen $130,000. Prosecutors would say that would be too obvious, too easy to track.

And so instead they added this other $50,000 that Michael Cohen had laid out for something else, legitimate, but something else. They doubled it to cover his taxes.

BORGER: Taxes.

HONIG: Then they gave him a bonus of $60,000.

And just to address a really important point that David raised, the reason all this matters is because the prosecution's theory is they were trying to hide this because they knew it violated campaign finance laws, because they paid Stormy Daniels to keep her quiet because of the campaign. They didn't want that known. And so they put this whole elaborate accounting mechanism on top of it.

BORGER: Which probably Michael Cohen invented, because on that audio tape ...

HONIG: Yes.

BORGER: ... we have Donald Trump and I - this was in reference to Karen McDougal, but sort of his inclination was to pay cash.

HONIG: Yes.

BORGER: Just pay cash and get rid of it. And Michael Cohen had this convoluted plan that this is how I'm going to get reimbursed. And by the way, we're going to include a bonus for me in it, which I wasn't paid, which I should have been paid. And I guess Donald Trump agreed to that.

BLITZER: We heard dramatic testimony from Hope Hicks on Friday, who worked for many years directly in The Trump Organization for Trump himself. And it was pretty powerful, pretty dramatic.

When we heard from Jeffrey McConney, the controller today, the accountant, it was a lot less dramatic, but it was important.

ELLIOT WILLIAMS, CNN LEGAL ANALYST: Right.

BLITZER: Why?

WILLIAMS: Well, for a number of reasons. And again, to make the point that foreign prosecutors can't make enough, not all testimony is going to be dramatic. And it's often the non-dramatic testimony is where these "document cases" are built.

Now, it's important to establish how payments were made and how they were recorded. And to pick up on a point that David made, where you don't have testimony directly linking the former president. Well, but what you do have, and this was David's point, it's a small business where they're stapling checks to invoices and so on. And at a certain point, it becomes hard to square that the head at the top of the organization is not aware of what these checks are and what they mean.

Now, a bunch of testimony came out that number one, he signs every check, that his signature's on it, and that these were coded to be, as Deborah Tarasoff had received, as legal expenses. Now, there's a little bit of a jump that jurors have to make there, but it's not that far of a leap given the kinds of things that we know about this quote unquote small business as we knew it. And we haven't heard from every witness yet, including a big one in the form of Michael Cohen, who can, who - at least if the prosecutors get what it sounds like they want from this witness ...

BORGER: Well, this is where you ...

WILLIAMS: ... the work between the two.

BORGER: Well, this is where you - this is where you miss Allen Weisselberg, because I know he's at Rikers Island now and he ...

BLITZER: He's in prison.

BORGER: He's in prison for perjury. But Allen Weisselberg was the person who spoke with Donald Trump about this and who came up with the payment plan after talking to Michael Cohen about it, and that Weisselberg and Trump had a conversation about it allegedly and - but we're not hearing from Weisselberg.

So he's kind of a missing link here, because under Donald Trump and the way this organization was structured was Weisselberg.

WILLIAMS: There are probably a few different ways to establish that something is in somebody's head. One is to get a letter or a statement from that person saying, this is in my head at this point. Another is to have virtually every employee of his organization saying again and again and again, this person knew everything that came in and came out.

Number two, this person knows about what the finances of the organization are.

Number three, this person's signature is on everything. At a certain point, it defy reason for - it could defy reason for jurors to think that this person did not know what was happening in his organization.

BLITZER: Everybody stand by. We have a lot more to report and much more coming up. Our special coverage will continue after a quick break.

And another story we're also following very closely right now, Hamas announcing it has agreed to a ceasefire deal. But we have an update on this story. We're getting reaction now coming in from Israel. Stand by for that. We'll be right back.

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KEILAR: We continue our breaking news coverage of former President Trump's hush money criminal trial. The prosecution is now questioning Deborah Tarasoff, who works in The Trump Organization's accounting department. And let's talk about this now with CNN Chief Domestic Correspondent Phil Mattingly, as well as CNN Legal Analyst Karen Friedman Agnifilo, who we should note is of counsel for a firm that represents Michael Cohen. She has no contact with Cohen, does not work on his case and there are no restrictions on what she can say about this case.

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But we were just talking in the break here, Karen, that I think some of what is happening today kind of crystallizes the way prosecutors are really building this case against Donald Trump.