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Manafort Lawyers Cross-Examine Rick Gates; Trump Legal Team Reaching Decision on Interview with Mueller; WSJ: Michael Cohen Under Investigation for Tax Fraud. Aired 5-6p ET

Aired August 07, 2018 - 17:00   ET

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

JAKE TAPPER, CNN ANCHOR: Thanks for watching.

[17:00:09] WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. The motives. Rick Gates testifies he spent years transferring money through offshore accounts and getting fraudulent bank loans for his boss, Paul Manafort, and says by the time they joined the Trump campaign, their political consulting firm had no clients and no money. Can defense lawyers shake his testimony?

Tax fraud? President Trump's former lawyer and fixer Michael Cohen is reportedly under investigation for tax fraud, while sources tell CNN the feds are scrutinizing his bank loans. Could this put more pressure on Cohen to cooperate with prosecutors?

Citizenship fight. Top White House adviser Stephen Miller is pushing a policy that would penalize legal immigrants whose families receive public benefits and make it more difficult to get citizenship. Why are White House and homeland security officials keeping quiet?

And top secret. Three weeks after President Trump and Vladimir Putin met privately behind closed doors, is U.S. intelligence still in the dark about what they discussed?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news, the government's star witness describes in detail how former Trump campaign campaign chairman Paul Manafort allegedly stashed millions of dollars he earned from pro-Russian politicians in offshore accounts, hid that money from tax authorities and defrauded banks to get loans when he was broke.

In federal court today, Manafort's longtime partner and deputy Rick Gates admitting to helping Manafort move money around and supply false information to banks. Defense attorneys are now trying to chip away at his testimony in the case built by Robert Mueller's team.

I'll speak with Congressman Gerry Connolly of the Oversight and Foreign Affairs Committees. And our correspondents and specialists are all standing by with full coverage.

First, let's go right to CNN's Kara Scannell outside the federal courthouse in Virginia. Kara, Gates was questioned about his time working with the Trump campaign. He was the vice chairman of the campaign. What did we learn?

KARA SCANNELL, CNN CORRESPONDENT: Well, Wolf, we learned two areas of interest that popped out of the cross-examination today, one of them Gates was asked whether he had ever submitted personal expenses for the inauguration committee. He was on that committee after the campaign, working for the Trump campaign. And he said he did not recall. He didn't rule it out, but he didn't admit to having done it.

We also heard from Gates. There were e-mails that were showed where Manafort was recommending to him that they put Stephen Calk, who was a banker who helped Manafort get one of these improper loans, according to the government. So we saw an e-mail where Manafort is recommending that Stephen Calk be named to the economic adviser's committee, which he was; that he be nominated to secretary of the Army, which he was not. And also Manafort was trying to get him, Calk, tickets to the inauguration. So that's where we've seen the nexus of the Trump campaign and the inauguration come up in this trial, Wolf.

BLITZER: It seem, Kara, that Manafort was broke, actually brook by the time he signed on as chairman to the campaign. What did Rick Gates, his deputy, tell the jury about Manafort's finances?

SCANNELL: Well, Gates said that essentially, all of their Ukrainian consulting work, which they have made, according to prosecutors, $60 million over the years, he said it all dried up by 2014. They were trying to win new contracts, but they -- they didn't have it. Manafort, Gates has testified had fallen behind on the credit card bills. He didn't pay them in full. That's just one of the small expenses.

Part of the allegation that Manafort was trying to get loans from banks and leading right up to when Manafort joined the campaign in March 2016, we've seen evidence that Gates helping him falsify bank -- documents that he submitted to banks in order to get loans. So Manafort was in dire straits about the time that he joined the Trump campaign, and he did it, as you'll recall, without receiving any compensation. So Manafort was not in a good position when he joined, even though he agreed to do it without any money.

BLITZER: Yes. We thought he was rich at the time. You were in the courtroom these past couple days as Gates was testifying. Describe the mood for us.

SCANNELL: Well, yesterday, Gates took the stand for the first time. It was the first time we've seen these long-time friends Manafort and Gates be in the same vicinity together since Gates pleaded guilty. There was tension. Manafort was staring him down.

Gates averting his eye contact. He was very measured, very careful and, matter of fact, in describing the scream he has pleaded guilty to being a part of.

Today on cross-examination, Manafort's attorneys were peppering Gates with questions. He seemed a little uneasy in responding to them, a bit argumentative in, you know, whether he had lied or whether he made a mistake. He was taking issue with some of the words they were using.

[17:05:09] And we're in the middle of this cross now, where Manafort's team is upping the pressure and the ante on Gates. They're trying to show that he was dishonest with the special counsel's office when they interviewed him, that he's been dishonest in his own affairs.

They just went through a bill that he -- you know, that showed that he was falsifying loan documents in order to pay himself. So they're attacking him and wanting to show that he was stealing from Manafort. There was a whole back and forth where Manafort's attorney pressed Gates repeatedly until he finally used the word "embezzlement," Wolf. So we've got this expected tension and cross-examination that's going on right now.

BLITZER: It's pretty ugly, indeed. All right, Kara. Thank you very much. Kara Scannell, outside the courthouse.

As the Mueller investigation moves ahead, President Trump, he's still on vacation, largely staying out of sight. He's weighing a possible interview with Robert Mueller while weighing in on some key elections at the same time.

Let's go to our chief White House correspondent, Jim Acosta. He's in New Jersey covering the president for us.

Jim, what's the president up to.

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: Wolf, President Trump is still holed up in his golf course in New Jersey this week while much of Washington waits to see if he will actually sit down with the special counsel, Robert Mueller, in the Russia investigation.

The president is also, as you said, Wolf, tweeting his support to some of his favorite candidates on the ballot across the country. They're on ballots across the country and elections on this day, an early test of whether he will help or hurt Republicans in the upcoming midterm elections.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): As President Trump is taking shelter inside his New Jersey golf course away from the press, an unmistakable message from the man overseeing the Russia investigation, Deputy Attorney General Rod Rosenstein, who told a group of law enforcement officials their job is to uphold the law regardless of politics.

ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL: We enforce the law and to follow the facts wherever they may lead, and we need to ensure that our decisions are never influenced by political considerations.

ACOSTA: The president's legal team says it's nearing a decision on whether Mr. Trump will sit down with Special Counsel Robert Mueller.

But the president is receiving plenty of unsolicited advice. Senator Lindsey Graham, who just played golf with the president, advised Mr. Trump to try to ride out the probe. SEN. LINDSEY GRAHAM (D), SOUTH CAROLINA: Did Trump ask that question?

He must have mentioned that about 20 times. I want to win in November. If we stop the Mueller probe tomorrow, you wouldn't be able to talk about anything else.

I would basically say, Mr. President, we're not going to let you anywhere near Bob Mueller. He knows a lot more about this case. He's interviewed a lot more witnesses.

ACOSTA: Andrew Napolitano, a conservative judge who appears on FOX News, was hardly reading from White House talking points. He suggested Donald Trump Jr.'s meeting with the Russians at Trump Tower in 2016 could amount to a criminal conspiracy, a meeting the president admits was aimed at obtaining dirt on Hillary Clinton.

JUDGE ANDREW NAPOLITANO, FOX NEWS JUDICIAL ANALYST: There are federal statutes that prohibit receiving something of value from a foreign national, foreign entity or foreign government. So was the purpose of this meeting to receive something of value? That's something Bob Mueller is going to have to look at.

ACOSTA: As conservative talk show host Laura Ingraham tried to ask Trump Jr. about the meeting, the call appeared to be cut off.

LAURA INGRAHAM, FOX NEWS HOST (via phone): You want any comments on that, Donnie? Because they're -- they're hitting you on that for contradictions. I mean, they're calling it worse than contradictions, obviously?

DONALD TRUMP JR., DONALD TRUMP'S SON (via phone): Hello?

INGRAHAM: Donnie, what is your reaction to all of that?

We're going to see if we can reconnect with Donald Trump Jr. on this, because we can't seem to hear him. Donnie, you hear that?

ACOSTA: Then, Trump Jr. was back on the line to say his Russian encounter didn't amount to much.

TRUMP JR.: It was a 20-minute meeting. It ended up, you know, about essentially nothing that was relevant to any of these things, and you know, that's all it is. That's all they've got.

ACOSTA: If that's the case, other Trump allies argue there is no need to worry.

ANTHONY SCARAMUCCI, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR: What has them riled up is they feel cornered, and it's not clear to me that they're necessarily cornered as much as there's a fact-finding expedition.

ACOSTA: The president turned his attention to special elections across the country from Kansas, where a fellow hardliner on immigration, Kris Kobach, is running for governor to Ohio, where the GOP candidate appears vulnerable in a district Mr. Trump himself won by 11 points. DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: We must elect more

Republicans, and we must elect Troy Balderson. We have to elect Troy. So get your friends. Get your neighbors. Get your family. And get out and vote for Troy on Tuesday.

ACOSTA: Democrats smell an upset, so former Vice President Biden has entered the fray with a last-minute robo-call.

JOE BIDEN, FORMER VIDE PRESIDENT OF THE UNITED STATES: Electing Danny to Congress puts up one step closer to taking back the House and making sure we have leaders in Washington who will fight for our values. Ohio values.

(END VIDEOTAPE)

ACOSTA: Now, some disappointing results for the president on this election night could begin to change the calculus back in Washington for some Republicans that Mr. Trump's negatives are beginning to weigh down their chances to maintain control in Congress.

[17:10:06] That dynamic, obviously, could be magnified further if the Mueller probe moves closer to the Oval Office.

But Wolf, I think it's very fascinating that Graham, after playing golf with the president, was saying to that crowd, as we saw earlier today in that video that came in to "Roll Call" that, yes, the president is bringing this up. He is sounding out people he's interacting with out on his golf course during this trip to New Jersey.

And basically, Lindsey Graham is telling him what a lot of Republicans are telling him back in Washington. That is to cooperate with this probe, don't try to shut it down, or you might make matters worse -- Wolf.

BLITZER: After playing golf with the president, they had dinner together, as well, with Mark Levin and -- and somebody else from FOX. We'll remember his name in a moment.

ACOSTA: Sean Hannity.

BLITZER: That's right, Sean Hannity. Somebody else from FOX.

All right. Thanks very much for that, Jim Acosta. Thank you.

Joining us now, Democratic Congressman Gerry Connolly of Virginia. He's a member of the Oversight and Foreign Affairs Committee.

So, what do you think? Should the -- should Robert Mueller agree to an interview with a president of the United States without being allowed to ask questions about obstruction of justice?

REP. GERRY CONNOLLY (D), VIRGINIA: I don't think that there should be limits on the special prosecutor. Donald Trump should be treated like any other witness and should not be dictating the terms. You know? There can be conversations about scope but to actually take an entire conversation off the table, in this case obstruction, I think would be a disservice to justice.

BLITZER: So if they don't agree, if the president and his lawyers don't agree to be interviewed by Robert Mueller, that could go -- there could be a subpoena, obviously, if he rejects the subpoena, that could go all the way to the Supreme Court.

CONNOLLY: That's right. And you know what? It's about time we test that. There are all kinds of theories about whether a president in a criminal matter can be subpoenaed. I believe that the president is like any other American and can be. Let's test that.

BLITZER: Because your Democratic colleague, Congressman Adam Smith of Washington state, he told me here yesterday he worries that if it goes to the Supreme Court, there could be a ruling in the president's favor, given the makeup of the Supreme Court.

CONNOLLY: Well, you know, there were theories about that. You and I are both old enough to remember Richard Nixon, the Watergate tapes, and that turned out to be a unanimous ruling against Nixon, who had appointed several of those justices.

So let's -- let's see that play out. I have more faith in our system of justice.

BLITZER: Can Mueller actually go ahead and complete his investigation without hearing directly sitting down with the president of the United States?

CONNOLLY: I think he can. Because it's very clear that they have been very thorough and that they're in possession of a great deal of information and evidence.

And, you know, if the president decides not to cooperate, he decides not to cooperate. And Mueller can address that in terms of whether the president is a target or not. And whether the president, frankly, could be an unindicted co-conspirator as Nixon was cited Leon Jaworski.

BLITZER: You know, we're also learning today, "The Wall Street Journal" first reporting that the president's former attorney, former fixer, Michael Cohen, he is now being investigated for potential tax fraud and other assorted problems.

If he were charged formally, he's under criminal investigation, but he hasn't been charged with anything yet. But if he were charged, presumably that would put an enormous amount of pressure, additional pressure on him to cooperate with Mueller's investigation.

CONNOLLY: I think that's right. And obviously, Robert Mueller has followed the old axiom, you know, follow the money. So we see it in the Manafort case. We saw it in the Gates case and now we're seeing it in the Cohen case.

And obviously, Cohen, with taxi cab medallions, at one point was a fairly substantially off man, but the value of those medallions has plummeted in light of Uber and Lyft and other competing services and has put him in a squeeze. And he may have had motive to lie about his taxes.

BLITZER: As far as we know, the special counsel, Robert Mueller, has not yet interviewed Michael Cohen as part of his investigation.

Do you think Cohen, though, who spent a decade, maybe 12 years working as the president's private attorney, fixer, has valuable information that could be provided to the Mueller investigation?

CONNOLLY: I think -- I think the answer to that is decidedly yes. Again, in following the money, one of the things that is -- is a thread that unites a lot of this is what about Russian money? Russian money in the Trump Organization, possible Russian money in the campaign and, certainly, the possibility of Russian money financing things like the payoff of Stormy Daniels.

BLITZER: What's your prediction, totally unrelated tonight, that special congressional election in Ohio, the Democrat or the Republican? Who's going to win?

CONNOLLY: Well, let me first say, Democrats have no reason even to be competitive. It's shocking that we are. And frankly, all of the trajectory would suggest that the momentum was with the Democratic candidate Danny O'Connor, and I think that Democrats are going to pull an upset tonight.

BLITZER: You do? OK. We'll see. We'll find out. Polls close in Ohio, 7:30 p.m. Eastern. We'll have live coverage, obviously, throughout the night. Thanks very much.

CONNOLLY: Thanks, Wolf.

BLITZER: Gerry Connolly, the representative from Northern Virginia.

Up next, sources tell CNN the prosecutors are looking into Michael Cohen's bank loans, and there's a new report he's under investigation for tax fraud. Could that push President Trump's former fixer into cooperating?

And defense lawyers try to shake the testimony of Rick Gates, who tells a federal court that he spent years hiding money and obtaining fraudulent bank loans for his boss, Paul Manafort.

(COMMERCIAL BREAK)

[17:20:10] BLITZER: Tonight, we have new details about the investigation of President Trump's former personal attorney and fixer, Michael Cohen.

Sources quoted by "The Wall Street Journal" say federal prosecutors in New York are examining whether Cohen committed tax fraud in his taxi medallion business. Also, sources familiar with the matter tell CNN federal prosecutors have subpoenaed Cohen's the former accountant and are examining whether banks improperly granted loans to Cohen. Let's discuss this and more with our political and legal experts.

And one of our legal experts, Joey Jackson. So if he's charged, I assume this could put a lot more pressure on Cohen to cooperate with -- with Robert Mueller and his investigation, right?

JOEY JACKSON, CNN LEGAL ANALYST: You know, it certainly would, Wolf. But I don't -- I wouldn't even say if he's charged. I think the objective of his lawyers, right, the objective would be to either not have him charged or to have him minimally charged.

So what do I mean. You look now at the prosecution moving forward against Manafort. Gates was facing a panoply of charges, right? Eighteen charges, as was and is, you know, Manafort at this time. And so minimally charged is he pled guilty to conspiracy to defraud the government, as well as lying. And then he got out of it. He's facing ten years. Could have faced much more.

How much more? We see Manafort facing 305 years. So I think the objective is by his lawyers, is to say, look, let's cut a deal at some point and, you know, the fact that this point that he's facing so much pressure could very well, Wolf, lead to such a deal, although we have not seen that yet.

BLITZER: Mueller referred the whole case to the U.S. attorney, the Southern District of New York, the Michael Cohen investigation. He hasn't been interviewed, as far as we know, by Mueller. Could it be that Cohen really doesn't know much right now that Mueller already doesn't know?

JACKSON: I don't buy that. I think he knows a lot, and I think, in fact, he holds the key to what goes on here. I

Now in terms of the referral to the Southern District, I think it was the right and the appropriate call. And that may very well be the reason why he hasn't been spoken to by Mueller and Mueller's team. Allow the Southern District to do their prosecution and, at some point, when it's right, perhaps you'll see that.

There's also something you've heard a lot, Wolf, about the whole issue of proffer, which is when you tell the government what you know. There's also a tool called reverse proffer, and that's when we go as lawyers with our client, right, in this case, and you'll have the government tell you what they know about you, about your guilt and what they'll do to you, should you not do things which comply with what they want you to do.

And so we may very well see moving forward a reverse proffer, where the government sits down with him and says, "We have A, B, C, all the whole alphabet. What do you want to do?" And at that point, a deal could be cut. You could see him speak to Mueller, and the dots could very well be connected.

BLITZER: Amidst all of this, Gloria, we're now getting some indications that there's a controversial new immigration procedure that the White House is considering. The president's advisor, Stephen Miller, reportedly is -- he's an immigration hardliner. He's pushing for a new policy that would penalize legal -- legal -- immigrants here in the United States whose families have access to public benefits, making it more difficult for them to get citizenship down the road. Why do you think they're targeting this right now amidst all of these other --

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Look, it's hard to say, but this is -- this is Stephen Miller's raison d'etre in the administration. He is a hardliner on immigration. I think that the president and Steve Miller believes that it plays very well with the base.

Clearly, the president's not getting his wall any time in the near future. And I think they want something to talk about when it comes to immigration. And they can sort of portray this as a way to save money for American taxpayers, even though, as you point out, these are legal immigrants.

But again, you know, they could view it as a base sweetener. Why they're doing it now when they've got so many other things on their plate, foreign-policy-wise, domestic-policy-wise, special-counsel- wise, I'm mystified.

BLITZER: Because as you know, David Chalian, the president says he opposes illegal immigration to the United States but supports legal immigration to the United States, and this policy change would affect legal immigrants here in the United States.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Well, the president has been for the reigning in legal immigration. This has been a policy in conservative circles. Rick Santorum has talked about this. Tom Cotton, you'll recall, went to the White House, senator from Arkansas, and stood in the White House to announce plans to rein in legal immigration.

So this is -- this is not a new theory that Stephen Miller has. This is the president's sort of immigration policy guy, though, starting to put the White House seal of approval on this and move this forward.

And I think Gloria is 100 percent right. And I think that's why. You ask why amid all these things. They're staring an election down here in just a few weeks in November, a big midterm election. So a base sweetening kind of thing when you want to energize your base voters is not something you want to quickly toss aside off the agenda.

[17:25:08] BLITZER: Very good point. I'm going to bring it to Mark Preston, because the president hasn't gotten the funding yet for his border wall and Mexico. Certainly, Mexico is not going to pay for that border wall --

BORGER: Really?

BLITZER: -- as he promised often during the campaign. The DACA recipients, the DREAMers, they're all caught in limbo right now. So is this just politics in advance of the midterms to energize that base on an immigration-related issue?

MARK PRESTON, CNN POLITICAL ANALYST: You know, I think you can look at just about every one of President Trump's tweets and see some kind of political play on his part. IN many ways, you know, while he talks about policy, he really uses Twitter to try to energize his base to try to get them behind something.

So in this case, specifically, as all this other news is swirling around him, the Mueller investigation, Manafort on trial, Gates testifying, Don Jr., you know, they're basically acknowledging, you know, that he went there. The president himself is now acknowledging he went there to get information. That's OK.

You know, we often said, Wolf, that Donald Trump had a dog whistle, and the dog whistle was a little whistle that he would blow that would send a signal out to his base in mostly racial overtones, quite frankly. There's no longer a dog whistle. It's really a bullhorn at this point, and that's exactly what he's doing right now.

BLITZER: Everybody stand by. There's more we need to cover. Coming up, a Democrat is trying to pull a big up upset in a congressional district where President Trump won easily. So what's at stake for the president in tonight's elections?

And 17 wildfires are raging in California including the biggest fire in the state's history. Why is the president making a wild claim, blaming them on environmental laws?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: We're back with our political and legal experts. And Joey Jackson, what did you think of the latest testimony today from the former deputy campaign chairman Rick Gates, testifying at that Paul Manafort trial? What stood out to you?

[17:31:37] JOEY JACKSON, CNN LEGAL ANALYST: I think it's damning. Everything stands out. The fact that you have someone there who talks about the conspiracy, defrauding the government, defrauding banks, underreporting taxes, having offshore accounts. It's crushing testimony.

And so you could set up a situation like on cross where you tear apart his credibility and talk about the fact that he lied on expenses; he pled guilty to lying; he's a convicted felon; he was having dalliances which he had to finance with fraudulent money.

But at the end of the day, there's corroboration as to what he said, if we think about the accountant, if we think about the bookkeeper. And so call him a liar, but it's not only what he says. It's what other people say.

But you know, Wolf, at the end of the day, I wonder and fear whether this is just an academic exercise. What do I mean?

You have Manafort, of course, facing all this time. I wondered why on earth would he go to trial? Well, because the president hates this investigation, thinks he's treated unfairly, talks about Al Capone, and he could very well receive a pardon.

And the guy who's there testifying, who did a plea deal, right, for ten years in which he'll maybe get five or six, could very well be in jail while the person who he's testifying against may be pardoned and, you know, out playing golf.

And so at the end of the day, damning testimony. I just wonder, when all's said and done, what happens with Manafort, who's facing so much time if the president says, "Let me sign a pardon. See you later."

BLITZER: Apparently doesn't have any money right now either. You want to weigh in?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: The truth of the matter is that the president never really was close to Paul Manafort or to Rick Gates. Didn't like either one of them particularly. Felt that -- he had used Manafort's lobbying firm at certain points, but he felt like he was kind of foisted upon him when they thought that there was going to be a delegate fight.

But if you think that they're friends, the answer is they are not friends. That doesn't mean he wouldn't pardon him. But I'm telling you that -- that there's no love lost.

BLITZER: Let's turn to the special election in Ohio right now. David Chalian, there's a Democrat hoping to pull off a huge -- pull off a huge upset tonight in this special election in this heavily Republican congressional district.

I'll show our viewers. Troy Balderson is the Republican. Danny O'Connor the Democrat. A recent Monmouth University poll, 44 percent for Balderson, 43 percent for O'Connor. This is a district that President Trump -- Trump won by 11 points in 2016.

DAVID CHALIAN, CNN POLITICAL ANALYST: Right. Mitt Romney won it by ten. This is a reliably Republican district. It's been in Republican hands for 35 years. The fact that we're even talking about it, I think, gets to the point of what the political environment is for both parties and the headwinds that Republicans are facing.

Here's what I think, irrespective of who wins tonight, Wolf, that you can watch for. If you are a Republican, and you think -- you've never really had a tough race. You're in what we call, like, an R-plus 7, which this is, or more Republican district, meaning it's got Republican performance history, Trump won it by double digits, and you think you're safe, you're not. These races are -- this shows you how competitive the overall landscape is going to be from now through November.

BLITZER: You know, and it's interesting. Lessons learned from tonight. You know, Mark Preston, assuming the demographics of this district are sort of similar to other contested battlegrounds in November, what do you see happening?

MARK PRESTON, CNN POLITICAL ANALYST: I see a lot of Republicans spending a lot more time back home in their districts try -- campaigning, quite frankly. And I think you'll see a lot more television ads that will be costly, but yet they'll have to do so.

[17:35:05] You know, in some ways -- we don't know the outcome of this race, but in some ways, you could say, perhaps, that Democrats have already won, because as David said, we're actually talking about this. There's absolutely no reason why we should be talking about this race in the middle of August, but we are talking about it.

And if you go back to 2016, you showed that 11-point margin of victory that Trump held and, as David, noted Romney held a 10-point margin. Even if Democrats lose tonight, if they were to lose this election and they were only to lose by a couple points that, in itself, is going to be setting off alarm bells across the country to Republicans worried that they, too, could be put in the same situation.

BLITZER: You know, Gloria, it's very interesting. This is a special election for this congressional district.

BORGER: Yes.

BLITZER: Whoever wins tonight if going to have to run again in November, a few weeks from now.

BORGER: Aren't they happy about that?

BLITZER: Yes.

BORGER: They're sure happy about that, because they know they've got to do it -- they have to do it all over again.

One thing I want to add about -- about this race, too, is just watch suburban women. They're going to be -- they're going to be really important here.

Suburban Republican women, who are turned off by Donald Trump, who may have voted for John Kasich, who endorsed the Republican this time, although a little less enthusiastically than a lot of people thought he should have, because they disagree on Medicaid reimbursement for the states. But watch how these women vote.

And also this district, one more thing, it's an educated district. It's -- there's a lot of college-educated people here. And that's -- that's going to be a margin that the Democrats are going to really look for to help them out.

CHALIAN: Which is why I think what you're getting at here is the Trump factor.

BORGER: Totally.

CHALIAN: There are a couple of demographic groups that you just said have proven elusive to the president.

BORGER: Yes.

CHALIAN: Once part of the Republican coalition. And the question is, so when you bring the president in at the end of a close race, how does it work? Does it juice the base and help you hang onto this seat if you're a Republican, or does it turn some of those voters off at the end and actually put this seat out of reach? That, I think, is one of the key things to watch.

BORGER: And Trump had had a great deal of success, we should -- we should --

CHALIAN: In primaries specifically.

BORGER: In primaries. In primaries, when he enters and likes to be the kingmaker, which he has done in this race. And we'll see if it works.

BLITZER: And I want our viewers to stay with CNN throughout the night as our election team watches and analyzes the returns from today's primaries and the special election in Ohio.

By the way, the Ohio polls will be closing 7:30 p.m. Eastern. We'll watch the results come in.

Also coming up, what's now the largest fire in California's history is burning out of control. Why is President Trump blaming environmental laws?

And later, the U.S. intelligence community's continuing dilemma: how do officials find out what happened during President Trump's one-on- one closed-door meeting with Vladimir Putin in Helsinki?

(COMMERCIAL BREAK)

[17:42:25] BLITZER: Tonight, what's now the largest wildfire in California history is only one of more than a dozen major fires burning in the state.

Let's go to CNN's Dan Simon. He's on the scene. Dan, this one fire has scorched a staggering area, and what? It's still growing?

DAN SIMON, CNN CORRESPONDENT: Well, hi, Wolf.

These California wildfires indeed seem to keep getting bigger and bigger. This fire is just a massive inferno. This Mendocino Complex Fire doubled in size in just the past few days. As a matter of fact, it is bigger than the five boroughs of New York combined.

Let me show you where we are, Wolf. This is one of the homes that is destroyed, one of 75 houses that is destroyed. But the real story of this fire is what you see behind me. That burnt landscape.

This fire is burning in steep, rugged terrain. Very difficult to access and very difficult for firefighters to gain an upper hand on this blaze because of where it is burning.

So while this fire is certainly biggest in the history of California, it is not the most destructive in terms of overall property damage, Wolf, because overall, it's burning away from populated communities -- Wolf. BLITZER: As you know, Dan, President Trump has been tweeting about the fires out in California, apparently making a very inaccurate claim that the White House today declined to back up or clarify.

Here's the president's tweet. And let me read it to our viewers: "California wildfires are being magnified and made so much worse by the bad environmental laws which aren't allowing massive amounts of readily-available water to be properly utilized. It is being diverted into the Pacific Ocean. Must also tree clear to stop fire from spreading."

So what are state and local officials telling you about that assertion from the president?

SIMON: I have to tell you, Wolf, nobody knows what the president is talking about here. You've obviously had a situation for years where you've had problems with water diversion that pits environmentalists versus farmers.

But in terms of having water to put out fires, that has never been a problem in the history of California. It's just -- bafflement is the way people are describing it.

BLITZER: Dan Simon on the scene for us out in California. Good luck to all the folks out there. Thank you.

Coming up, a dilemma facing the U.S. intelligence community. More than three weeks after the Trump/Putin summit in Helsinki, does anyone know for certain what they discussed during their one-on-one meeting?

[17:45:00] (COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: It's been just over three weeks since President Trump and Vladimir Putin met in Helsinki, and top officials of the U.S. intelligence community still can't say, definitively, what the two men talked about during their private one-on-one session.

CNN's Brian Todd has been looking into the dilemma that that has created.

Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we've been speaking with officials from several U.S. intelligence agencies and with a lot of former American spies. There is real concern tonight that top U.S. intelligence officials could still be in the dark about what was said between Trump and Putin.

[17:50:00] It's not clear if the President has briefed any of his top intelligence officials on it. So, tonight, the possibility exists that U.S. intelligence will have to use its own sources and methods to find out.

(BEGIN VIDEOTAPE)

TODD (voice-over): A 131-minute meeting with a former KGB colonel who has a reputation as a master of manipulation. In the room, just two of them and two translators, no one else.

More than three weeks after a meeting in Helsinki, which President Trump insisted be one-on-one, it's still unclear tonight what, if any, specific information U.S. intelligence officials have on what was said between Donald Trump and Vladimir Putin.

America's top spy, Director of National Intelligence Dan Coats, recently indicated he may be in the dark.

DAN COATS, DIRECTOR OF NATIONAL INTELLIGENCE: I'm not in a position to either understand fully or talk about what happened at Helsinki.

TODD (voice-over): And that, former intelligence officials say, is a problem.

JOHN SCHINDLER, FORMER ANALYST AND COUNTERINTELLIGENCE OFFICER, NATIONAL SECURITY AGENCY: And if our intelligence boss, that's what former Senator Coats is, doesn't know, certainly the working people in the intelligence community have no idea what actually happened in that closed-door session between two men in Helsinki.

TODD (voice-over): Former spies tell CNN that presents two potential disasters -- President Trump could have divulged classified information to Putin and U.S. intelligence wouldn't know it, and intelligence officials won't be able to help Trump and his team formulate strategies on Russia if they don't know what was said in that room.

Intelligence experts say it's likely the Russians secretly taped the conversation, so they could have more detail on it than U.S. intelligence.

How can American spy agencies find out what was said after the fact?

SCHINDLER: It's no -- really, no secret that NSA targets Russians communications just as they're open about targeting ours. So whatever they've intercepted, let's say Russian diplomatic communications, if they have two Russian diplomats talking about what was said in Helsinki, that may be the only way they're going to find out.

TODD (voice-over): But James Bamford, author of four books on the NSA, says Putin and his team could throw U.S. intelligence off the trail if the Americans eavesdrop on them.

JAMES BAMFORD, AUTHOR, "THE SHADOW FACTORY: THE ULTRA-SECRET NSA FROM 9/11 TO THE EAVESDROPPING ON AMERICA": The problems are encryption. The Russians are very sophisticated in encryption.

And the U.S. is fairly sophisticated in breaking encryption, but I think, in this case, you're talking about the highest level of encryption since you're talking about the President of Russia communicating back to Russia or communicating with others about this meeting.

TODD (voice-over): Another possibility, that Putin and his team, knowing they're being listened to, could give misinformation to throw the Americans off. Even if U.S. intelligence does pick up some good information on what was said, it's a bit embarrassing.

SCHINDLER: Of course, it would also be highly awkward in this unprecedented situation that we're finding out from Russians what our own president said in Helsinki. This is a very unchartered water kind of intelligence arena we're in right now.

(END VIDEOTAPE)

TODD: We reached out to the major intelligence agencies and the White House on all of this. We've not been able to get any comment from the CIA, the NSA, or the Director of National Intelligence's office on the possible use of electronic spying to learn what the Russians are saying about the summit.

And none of those agencies are commenting on whether President Trump or any member of his staff have briefed top U.S. intelligence officials on what was said between presidents Trump and Putin.

Mike Pompeo and John Bolton, we know, have been briefed by the President on the meeting. Have they told U.S. intelligence officials anything about it? We've gotten no response to that question, Wolf.

BLITZER: You know, Brian, it's interesting. In addition, the only other people in that room besides the President and Putin were the two translators who were there, an American translator and a Russian translator. Have they been debriefed, let's say, by U.S. and Russian intelligence?

TODD: Wolf, that is not clear tonight. Trump's English translator may have been debriefed by U.S. intelligence. We don't know about Putin's translator.

But several former American spies have told us there's a real chance that Putin's translator could be a Russian intelligence agent. So maybe no need to debrief.

BLITZER: They have a tape of it, if he was wired. They don't need to debrief because they presumably have all that information.

All right, Brian, thank you very much. Brian Todd reporting.

Coming up, there is breaking news. Paul Manafort's lawyer tries to shake the testimony of Rick Gates who testifies he helped ex-boss Paul Manafort obtain fraudulent bank loans and hide money offshore, saying by the time they joined the Trump campaign, their political consulting firm had no clients and no money.

[17:54:27] (COMMERCIAL BREAK)

BLITZER: Happening now, breaking news. On the stand. Rick Gates cross-examined by Paul Manafort's lawyer after revealing new details about his former boss's finances and admitting to an extramarital affair. Can the defense get juries to discount his damning testimony about Manafort?

Election security. With the midterm less than three months away, is the Trump administration doing enough to protect it from new interference? I'll talk live to the former Homeland Security adviser for the Obama administration.

Fighting the flames. Crews battle what's become the biggest fire in California's history. And now, a political battle as President Trump wrongly blames the disaster on water and logging policies leaving the White House struggling to explain what he really meant.

And midterm test. A special election in Ohio could be a critical assessment of how both parties will perform in the midterm. Will President Trump's push to help lead Republicans to victory, will that help or will that hurt? Are the Democrats getting ready to stage an upset?

[17:59:52] We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer and you're in THE SITUATION ROOM.