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Trump Justice Department in Court Today for Epstein Grand Jury Files; Fed Chief Defends $2.5 Billion Headquarters Renovation; Dangerous Flashfloods Hit Already-Ravaged New Mexico Town. Aired 10- 10:30a ET

Aired July 18, 2025 - 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]

PAMELA BROWN, CNN ANCHOR: Happening now, bombshell birthday letter, President Trump firing back over a note reportedly bearing his name to Jeffrey Epstein. He says it's fake now. He's vowing to sue a close ally. We have late reporting coming in this morning from the White House.

WOLF BLITZER, CNN ANCHOR: And letters from Camp Mystic. For the first time to CNN, a mother of a camp, mystic victim shares her story and the letters from her eight-year-old daughter after her death. It's an interview with our own Pamela Brown you won't want to miss.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer with Pamela Brown, and you're in The Situation Room.

We begin with the breaking news, President Trump appearing to bow to the growing pressure from all sides to release more information on the sex trafficking case against Jeffrey Epstein. The U.S. Justice Department saying it will go to court today to seek the public release of grand jury testimony. Even the president's loyal followers have demanded that the administration make good on its promise to share more information.

And its refusal up to this point has drawn more attention to the president's one-time friendship with Epstein. This morning the president and his allies are lashing out at The Wall Street Journal, the newspaper, as you know, is owned by News Corp, which is controlled by President Trump's friend, Rupert Murdoch and his family. And it is reporting that Ghislaine Maxwell, Epstein's former girlfriend and convicted child sex trafficker, reached out to the financier's family and friends for his 50th birthday.

The Wall Street Journal reporting that those associates sent body letters for a birthday album back in 2003, and one of those risque letters was from Donald Trump. That's the report in The Wall Street Journal. The White House is calling that report fake.

We're covering all the angles with CNN, Alayna Treene over at the White House and CNN's Chief Legal Affairs Correspondent Paul Reid, who's here in Washington.

Alayna, what happens now with the Trump administration seeking this grand jury testimony?

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Yes, look, I mean, one thing I can tell you, Wolf, is that this is something that many, many people, not only here in the White House, but, of course, many of the president's supporters, some of whom have been very critical of the president, are super angry about. I mean, the president has said that this is fake. He said that he had called up Rupert Murdoch himself, you know, saying that you can't run this, now saying that he's threatening to sue him, and it's something that they've been looking at and talking about for a couple days now behind the scenes.

But, Wolf, we did just get some new reaction from the president in his latest post this morning. He said, quote, I look forward to getting Rupert Murdoch to testify in my lawsuit against him and his, quote, pile of garbage newspaper, The Wall Street Journal. That will be an interesting experience.

Look, what I think is very clear is now they're trying to put a lot of this on The Wall Street Journal and kind of channel a lot of the anger we know and dissatisfaction that has been going on among some of the president's closest and fiercest supporters and starting to train it on Murdoch.

And I actually caught up with Steve Bannon, of course, someone who has been a leader of the MAGA movement. He's previously worked with the president. And he essentially told me that this story has had maybe the inadvertent effect of coalescing the MAGA movement behind Trump once again, after, really, over the last ten days now, ever since the Justice Department had released that memo has put him on opposite sides, the president, of many of his supporters. And so this could have the effect of bringing them back.

Now, I asked Bannon, you know, what is different about this? He said, this could be a turning point. He said, now we're on offense. But I also asked him if the president's request to Attorney General Pam Bondi to unseal some of the grand jury testimony in this case would be enough for his supporters. Bannon told me it was a good start. So, we'll see where this goes from here and whether or not this will actually do enough to quell a lot of that dissatisfaction among his base.

BLITZER: We will find out. Alayna Treene at the White House for us, Alayna, thank you very, very much.

[10:05:02]

Let's take a closer look now at the letter that's in the spotlight. Here is The Wall Street Journal reporting and it is very, very graphic. The article describes the letter this way, and I'm quoting now from The Wall Street Journal, quote, it contains several lines of typewritten text framed by the outline of a naked woman, which appears to be hand drawn with a heavy marker. A pair of small arcs denotes the woman's breasts. And the future president's signature is a squarely Donald below her waist mimicking pubic hair. The letter concludes, and again, I'm quoting from The Wall Street Journal, happy birthday and may every day be another wonderful secret, close quote.

Let's go live right now to CNN's Chief Legal Affairs Paula Reid. Paula, the president, says he will sue the Wall Street Journal and its owner, Rupert Murdoch, the media mogul that Trump has seen as both an ally and at times of foe. How difficult of a case would this be for the Trump lawyers?

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: Well, it'd be interesting to see, Wolf, if he actually follows through with this lawsuit or if he's just blowing off steam. But we know it is much harder to prove a case in court than it is to, these days, extract settlements from news organizations that have, whatever reason, for wanting to just resolve a situation. We saw that most recently, of course, with my former employer, CBS News. They faced a lawsuit from Trump that was widely discredited, thought to be frivolous, but they still settled it because they had their own reasons for wanting to make that go away.

And that is something, especially because Trump has had success with multiple media outlets extracting settlements that might embolden him to file a lawsuit here, even if he's unlikely to win.

Now, look, you, me, Pamela, Alayna, we have all worked at the White House. We know what it's like when they want to bury a story, the kind of pressure that you face. So, The Wall Street Journal deserves credit for following through with its reporting that it's clearly confident in, even in the face of these threats and that pressure.

BROWN: Yes, I think that's a really important point you just make there, Paula. And also, you know, it has been 20 years since police in Palm Beach, Florida, first began investigating Epstein. Last night on CNN, we heard from a key reporter who helped keep this case in the public eye. Miami Herald Investigative Reporter Julie K. Brown, she says that she has spoken to two of Epstein's victims this week, as the intention has intensified, intention has intensified. Let's listen.

(BEGIN VIDEO CLIP)

JULIE K. BROWN, INVESTIGATIVE REPORTER, MIAMI HERALD: You know, they're afraid. They think that this is the biggest cover up in history. And they are -- the more that people, you know, our government -- this is them saying this, the more our government covers up for Epstein, the more fearful I become. Because I keep thinking, who is this guy, who are the people, that are in these files, that there's -- they must be, you know, really powerful people for them to be covering up like this.

(END VIDEO CLIP)

BROWN: So, we know that President Trump is calling for the release of grand jury testimony, subject to court approval. And, and there's a difference between that and what would be in the overall files, right, Paula? REID: That's exactly right, Pamela. A Justice Department official told me a short time ago they will petition today to federal court in Manhattan, asking a judge to release some of the grand jury materials. Those grand jury materials, that is just a sliver of all the evidence that the Justice Department has related to Jeffrey Epstein. When you go before a grand jury, you're seeking an indictment. The bar is lower. You don't have to bring in everything that you have, and those proceedings are secretive and much of what is still under seal is under seal to protect victims and accusers.

So, it's unclear what argument the attorney general is going to be able to make to convince a judge to release that evidence, but, again, that's just a tiny portion of what exists. And people who really care about this issue, they know that it is within Pam Bondi's power to release more of the millions of documents that she currently has control over. So, it's unclear that this move today is really going to end this controversy.

BLITZER: All right. Paula Reid reporting for us, Paula, thank you very, very much. Pamela?

BROWN: All right. Let's turn to Capitol Hill now. The House Rules Committee has advanced a non-binding resolution calling for the possible release of more Epstein-related material. So, we'll have to see now what Speaker Johnson does, whether he brings it to the floor. He is insisting his party remains in lockstep with the White House on the matter.

BLITZER: All right. Let's go live right now to our Congressional Correspondent Lauren Fox. She's up here in Washington. She's got the latest. Lauren, what more do we know, first of all, about this resolution?

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Yes. I mean, this resolution was a last minute negotiation with several conservative holdouts, and this was an effort to move forward with Donald Trump's very important bill that would have clawed back about $9 billion in federal funding, and I'll get to that in a moment. But this negotiation was really coming from some conservatives on the House Rules Committee who were insisting that they wanted more transparency over the Jeffrey Epstein files.

[10:10:08]

So, what leadership and these conservatives agreed to was this non- binding resolution.

Now, there are two things to pay attention to here. One is this is non-binding. That means that even if it passed the House of Representatives, it passed the Senate and the president was willing to move forward with it, it still doesn't force the Justice Department's hand. That's what it means by non-binding. The other important factor here is that Speaker Johnson has not made clear if he will definitely bring this to the House floor and what that timeline would look like.

Here is the speaker making clear that he believes that the House Republicans and the president are on the same page when it comes to the Jeffrey Epstein files.

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REP. MIKE JOHNSON (R-LA): There, there's no daylight between the president and house Republicans on transparency. And he's been very clear that he wants all credible information, credible evidence, to be turned over to the people so that the people can decide. We trust the American people and their judgment, and we are for that. The president is for that. And there's different ways everybody expresses the same truth.

(END VIDEO CLIP)

FOX: So, after a multi-hour meeting where this negotiation was brokered, House Republicans were able to go ahead and move forward with a bill that was clawing back $9 billion and already Congressionally allocated funding from the federal spending. And we know that that's about $8 billion in foreign aid programs, $1.1 billion in funding for the Corporation for Public Broadcasting, which doesn't just support things like PBS and NPR, but also local affiliates across the country.

There were two Republicans who voted against that effort, but, largely, this was supported by many conservatives. The presidents expected to sign that later today, and the deadline was Friday at midnight. So, they did this just about 24 hours ahead of that very important deadline. Pam?

BROWN: All right. Lauren Fox, thank you so much. Wolf?

BLITZER: All right, Pamela.

The Federal Reserve chair, Jerome Powell, is responding to the Trump administration's accusations that he's mismanaging renovations at the central bank here in Washington. Last week, Office of Management and Budget Director Russell Vought suggested in a social media post that Powell wasn't complying with U.S. government oversight regulations related to the Fed's $2.5 billion overhaul. And now, Chairman Powell is pushing back against those claims point by point.

Joining us now is CNN Business and Politics Correspondent Vanessa Yurkevich. Vanessa, tell -- us this all comes amid very heightened tensions, clearly very public tensions between Powell and President Trump. Does Powell's response settle at least some of those claims that the Trump administration is making against him?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: It certainly appears to on face value. And as you said this is a point by point rebuttal by the chair of the Federal Reserve, Jerome Powell, responding to that letter from the director of the Budget Office, who essentially was claiming that Jerome Powell and the Federal Reserve was breaking the law and going over budget on this renovation of the Federal Reserve's headquarters in Washington, D.C.

And, essentially, this letter points out that they did not, the Federal Reserve and the board did not have to go to this National Capital Planning Commission to seek approval for these plans, but they did anyways because they wanted to be transparent.

There is a line in this letter that we have heard Jerome Powell use when he is talking about combating inflation, trying to do what's best for the American people, and it's kind of a familiar refrain that is also in this letter. He says, we take seriously the responsibility to be good stewards of public resources as we fulfill the duties given to us by Congress on behalf of the American people.

And he goes on to point out that there are no VIP dining rooms. There are no VIP elevators. In fact, these elevators are being expanded to accommodate people with disabilities. And a lot of the renovations, Wolf, he says, are for safety reasons. This is a building from the 1930s. He says that they're working on cleaning out asbestos, they're working on cleaning out lead.

And he also finally goes on to point out that they did an inspector general investigation in 2021 to make sure that everything was up to code and that they were following the law. The inspector general report said that the Fed, yes, complied with industry and government practices. And, finally, Wolf, he goes on to say, Jerome Powell, that they are launching a new inspector general investigation to double check to make sure that everything is within code and within the law. Wolf?

BLITZER: Vanessa Yurkevich, thank you very, very much. Pamela?

BROWN: And, Wolf, happening now, more flashfloods are hitting a town in New Mexico. That's the same town just a week ago that was underwater after a deadly flood swept through the area there.

[10:15:00]

The ground in the region was damaged by wildfires last year making it harder to absorb the water. So, any quick burst of rain can really cause a lot of issues and create immediate runoff.

Let's bring in CNN Meteorologist Allison Chinchar. Allison, what is the latest on the ground there in New Mexico?

ALLISON CHINCHAR, CNN METEOROLOGIST: Right. Unfortunately, more rain is in the forecast, and that's the last thing this area needs, especially this town specifically. this area of Ruidoso, New Mexico, that specific town and the area around it have had 19 separate flashflood warnings just since the beginning of the year. So, again, we're talking a tremendous amount of those warnings.

And you can see we already have a flood watch in effect for just that town and a lot of the surrounding areas that you see here, and that's going to be for the remainder of the day as we anticipate more rain in the forecast.

Part of the problem is all of these red marks you see here, that pinkish red color, those are all burn scars from previous wildfires. Essentially, what happens is when it rains, that water just runs right off those burn scar areas but then flows right down into the town and taking all of that water with it, which is why they are more prone to having these flooding concerns going through the next couple of days but also for much of this year.

Right now, not much going on in the town, but as we fast forward into the day, you'll notice more of those showers and thunderstorms are expected to pop up this afternoon.

BROWN: All right. Allison, thank you so much.

BLITZER: And still ahead, CBS is canceling the Late Show with Stephen Colbert. The company says it's a, quote, financial decision. More on the surprising announcement and its timing.

Stay with us. You're in The Situation Room.

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BLITZER: Welcome back to The Situation Room. Thousands of people across the country took to the streets in protest against President Trump's controversial policies. At more than 1,600 locations yesterday, demonstrators spoke out against the president's mass deportations and Medicaid cuts during a national day of action, inspired by the late civil rights icon, John Lewis.

At the same time, one of the nation's oldest civil rights organizations is now declaring what it calls a state of emergency for anti-discrimination policies. A new report from the National Urban League is criticizing the Trump administration for downsizing federal agencies and programs that enforce civil rights policies here in the United States.

I want to discuss that and more with the Urban League's president, Marc Morial. He is one of the authors of this new report. Marc, thanks so much for joining us.

How are the Trump administration's policies impacting people of color here in the United States?

MARC MORIAL, PRESIDENT, NATIONAL URBAN LEAGUE: Wolf, thank you for having me, and we appreciate the chance to talk about this report. First, the way we look at this is that this is an assault on 70 years of progress. Since Brown versus Boards of the civil rights era, America has become a stronger, better nation. It has become a nation which has embraced the fullness of American democracy.

The new administration's policies assault that from executive orders that seek to shut down important agencies, to economic policies embedded in the big, ugly bill, which will take away healthcare, education, community development, support for veterans. This is a potential disaster for this nation. It seeks to block this long arc of progress.

And this is why here in Cleveland, I can tell you from speaking to people who are here and will have as many as 10,000 people participate in this conference, there's a sense of outrage, there's a sense of betrayal, there's a sense of why does this need to happen at this point, which is why we are compelled to resist. Whether it's by litigation protests, legislative advocacy, I think that people here want us to begin to talk about repealing and replacing the big, ugly bill, repealing and replacing these destructive policies.

Look, shutting down the Department of Education when you're trying to build a workforce to compete with China makes no sense, whatsoever. Shutting down the Civil Rights Division or changing its mission so that it focuses on retaliatory political prosecutions is inconsistent with every single thing every single president has been about since the 1950s. So, that's just a snapshot of what we are talking about here. And I say this year's state of black America report is really a commentary on the state of the union.

BLITZER: You've also said, mark, that this is a quote, well-funded, well-organized, well-orchestrated movement to totally undermine civil rights here in the United States. Do a little bit more explaining.

MORIAL: So, the 2025 plan, which was many, many years in the works, is, in effect, been the blueprint for these executive actions and for these extreme economic policies. I don't know how much money was invested in Project 2025, but I know it's in the seven to eight-figure range.

And those types of plans do not come together through osmosis. They do not come together without careful planning. And I acknowledge the fact that there is a constituency in this country that wants to turn the hands of time backwards to an era when America was not inclusive, when America was, if you will, segregated when we had higher rates of poverty than we have today.

So, it is why we, in the report, spend some time helping people understand the ramifications of this. These policies have been embraced by this new administration. They've been embraced by many members of Congress. It puts into focus why the 2026 election cycle is going to be important, but it also places into focus, Wolf, a real debate about what the future of this country really needs to be about.

[10:25:07]

And I encourage all Americans to participate in that debate because I just believe that for our future to be strong and resilient, and for us to compete, we've got to make sure that everyone, every community is well educated, has access to home ownership, access to quality jobs, access to upward mobility, that we have a healthcare system that works for all.

BLITZER: All right. National Urban League President Marc Morial, Marc, thanks so much for joining us.

MORIAL: Always, Wolf.

BLITZER: And coming up, more than a million pounds of food that could feed starving people around the world is about to be, yes, destroyed, and your taxpayer dollars are about to be totally wasted.

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