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Sources: Prosecutors Hesitant To Charge Trump Foe Adam Schiff; Trump Says He's Ending All Trade Talks With Canada; Letitia James Pleads Not Guilty In Mortgage Fraud Case. Aired 11-11:30a ET

Aired October 24, 2025 - 11:00   ET

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

[11:00:00]

PAMELA BROWN, CNN ANCHOR: Really quickly, Elie, you mentioned how unusual this is, a mortgage fraud case over $18,000. How unusual is it for then the U.S. attorney to go there for an arraignment like this?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: So U.S. attorneys almost never sit at the council table, as we'll see today with Lindsey Halligan. That in itself is extraordinarily unusual, Pam.

BROWN: All right. Elie Honig, thanks so much.

WOLF BLITZER, CNN ANCHOR: And the next hour of The Situation Room starts right now.

BROWN: Happening now, breaking news, as we were just discussing Letitia James' first federal court appearance. In moments, the New York attorney general will be arraigned on felony charges.

BLITZER: We want to welcome 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.

And we begin this hour with that breaking news. New York's Democratic attorney general, will make her first appearance in federal court in Norfolk, Virginia, any moment now. She'll be face-to-face with President Trump's former personal lawyer-turned-appointee to lead a key U.S. attorney's office, Lindsey Halligan. Halligan is prosecuting the case against not only Letitia James, but also another Trump critic, former FBI Director James Comey. Letitia James was indicted on two felony charges of bank fraud and making false statements to a financial institution this month.

BROWN: And according to the indictment, James falsely described a Norfolk property as a second home, but used it as an investment property. She denies any wrongdoing. Let's bring in CNN crime and justice correspondent, Katelyn Polantz.

BROWN: What more do we anticipate here, Katelyn?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Well, today in this hearing, and we do know that Lindsey Halligan is at the courthouse in Norfolk, Letitia James is at the courthouse in Norfolk, and they should be getting started with the judge on the bench at any minute now. The hearing is supposed to begin at 11:00.

What we're expecting is Letitia James, she'll be informed of the indictment. She'll be informed of her rights. She's very likely to plead not guilty. And then we are watching to see what Judge Jamar Walker does with a timeline and with allowing the defense to tell him what he wants to do -- what they want to do to challenge this case.

So before there would be a trial on the actual facts of the case, there's going to be a bunch of things that we do expect the defense to lay out initially right now. Some of that is going to be very much about Lindsey Halligan. One of the playbooks in this case and in the James Comey case is challenging Lindsey Halligan's ability to prosecute it.

She was the only person taking this indictment of Letitia James through the -- through the grand jury in Alexandria. Same thing with the Jim Comey case. And there's very likely to be another judge brought in to look at that issue. It's going to be a major issue for the Trump Justice Department going forward.

There also is very likely to be a discussion about statements or a communication that Lindsey Halligan, the U.S. attorney, had with a reporter recently that was published on Lawfare. There's going to be a discussion about how much extrajudicial or communication with reporters should be allowed in a case like this.

So we're -- we might get a little bit of that. And we also are looking for, as always with this first initial appearance, a trial date. How long may it take for this case to get unfurled in the federal court system?

BLITZER: That's a good point. We'll see. We should get some answers pretty -- pretty soon. You also have some new reporting, I'm told, on possible charges against another longtime political opponent of President Trump. So we're talking about the California Democratic Senator Adam Schiff. What can you tell us about that?

POLANTZ: Yes. Sometimes I want to draw the connections between these different things the Justice Department is doing right now. And this one, it's in a different jurisdiction. So it's an investigation happening in the District of Maryland, looking at Adam Schiff around mortgage fraud allegations, similar to what Letitia James has been charged in.

But this situation with Schiff, my understanding from sources is that the prosecutors there who are working on it, career prosecutors, are hesitant about whether they have a charge -- chargeable case here. And they've been talking with leadership of the Justice Department about what the next steps might be. Do they need to gather more evidence? What do they do?

The case is, or the investigation is ongoing with Schiff not being charged at this time. But it's a different situation than the Eastern District of Virginia, because that prosecutor who leads the office of the District of Maryland is a longtime, career, respected prosecutor. It just brought a very meaty case against John Bolton in that district. And there's a tension building over, do they charge the Schiff case? And -- and if they do, do they end up with the same sort of criticism that the Eastern District of Virginia and Lindsey Halligan have of these cases against Letitia James and James Comey being very thin and pursued for political reasons because Donald Trump wants them?

Trump has been very public about wanting to charge Schiff. And right now, there may be a real tension between what Trump wants publicly, what his backers may want in the Justice Department, people like Ed Martin, the pardon attorney, and what the prosecutors who are looking at the evidence, what they actually see as the rightful thing to do under the rule of law.

[11:05:12]

BLITZER: Yes. All right, Katelyn Polantz.

BROWN: Katelyn Polantz, thank you so much.

BLITZER: All right. There's other development -- new developments unfolding this morning. The trade war between the United States and close allies to the North. We're talking about Canada intensifying big time right now.

President Trump posting on social media, and I'm quoting him now, all trade negotiations with Canada are hereby terminated, close quote. The President says he made the decision after Ontario provincial government posted an anti-tariff ad featuring former President Ronald Reagan. Here's some of that ad. Listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: When someone says, let's impose tariffs on foreign imports, it looks like they're doing the patriotic thing by protecting American products and jobs. And sometimes for a short while it works, but only for a short time.

But over the long run, such trade barriers hurt every American worker and consumer. High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars. Then the worst happens. Markets shrink and collapse, businesses and industries shut down, and millions of people lose their jobs.

(END VIDEO CLIP)

BLITZER: The Ronald Reagan Foundation said the ad misrepresented what the 40th president actually said during that speech. I want to go live right now to CNN's Kevin Liptak over at the White House. Kevin, all this back and forth could have real world impact on prices that Americans are paying for goods like lumber, for example. What's the latest you're hearing about that?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes. And when you look at the products that the U.S. imports from Canada, it's a -- it's some significant stuff. It's metals like steel and aluminum, cars, lumber, which are all subject now to a 35 percent tariff that the President has put in place. The U.S. and Canada have been trying to negotiate a trade deal to allow those duties to come off.

But what the President is doing today is essentially pulling the rug out from this progress. And his complaints about this particular ad are twofold. One, he says that it's misrepresenting what Ronald Reagan was actually saying back in 1987. And two, he says that it was placed to try and influence the Supreme Court as it weighs a sum of the President's tariffs.

And on Truth Social this morning, the President said Canada cheated and got caught. They fraudulently took a big buy ad saying that Ronald Reagan did not like tariffs, when actually he loved tariffs for our country and its national security. Now, it's not exactly clear what the President thinks is misrepresented in this ad.

The President Reagan, he was speaking in a radio address. Remember, Wolf, that was when presidents used to do these weekly radio addresses. He was talking about a tariff that he had applied on Japan for semiconductors.

But overall, his message was really a full-throated defense of free trade, warning against protectionism. And we talked to Kevin Hassett this morning. He's the President's top economic advisor. He suggested that this is more than just an ad, that the President had been growing frustrated at these talks with Canada, at how they had been progressing.

And, you know, we saw Mark Carney, the Canadian prime minister here at the White House earlier this month, and they weren't able to walk away with a trade deal. Canada is now the only G7 country that hasn't negotiated a trade deal with the United States, which is significant.

Canada is the U.S.'s second largest trading partner. The relationship obviously goes well beyond trade. These two countries are now at odds in a way that they haven't been in decades. And I think the question now is where this goes from here.

Now, Trump and Carney are both now headed to Asia. They'll cross paths at two summits this week, so remains to be seen whether they'll sort of be able to reconcile some of these differences there.

We did hear from Mark Carney this morning, who said that Canada stands ready to pick up those discussions when the Americans are ready. We should note that Mark Carney's federal government had nothing to do with this ad. It was put out by the province of Ontario.

And so how the President seems to reconcile those two things remains unclear. It also comes at a time when national sentiment is running quite high in Canada. Tonight, the Toronto Blue Jays facing off the Los Angeles Dodgers at home in game one of the World Series.

BLITZER: And we'll be watching that to be sure. All right, Kevin Liptak over at the White House, thank you very, very much. BROWN: All right, still ahead here in the Situation Room, we have some breaking news. A New York attorney general just pleaded in her arraignment, so we're going to learn more about that. Also, major airports across the country are seeing more delays and ground stops as federal officials worry that airport staffing shortages will only get worse until the government shuts down.

[11:10:02]

BLITZER: And the Russian leader, Vladimir Putin, now says the new U.S. sanctions won't be enough to end the war with Ukraine. Those sanctions come as President Trump's diplomatic efforts to stop the conflict are not producing any result at all. Stay with us. You're in The Situation Room.

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[11:14:58]

BROWN: Breaking news, we were just learning that Letitia James is pleading not guilty to two felony charges relating to a 2023 mortgage. Her arraignment hearing is ongoing. So let's bring in CNN's Katelyn Polantz and CNN's Senior Legal Analyst Elie Honig. All right, first to you, Katelyn. What more do we know? What are you hearing?

POLANTZ: Well, it's difficult getting information out of this courthouse. But we do know that Letitia James has said in court she is not guilty. Entered that pleading. The specific quote, not guilty judge to both counts. Those counts of bank fraud and lying to financial institutions. Both felony charges she's now facing.

And now the road to trial is being set. We know that inside that courthouse there is discussion going on with the judge right now of a possible trial date. We're waiting to see what the people in the courthouse as they come out of the courthouse, they don't have phones in there, what they will say about what has happened additionally during this proceeding.

The other thing we're waiting for, Pam and Wolf, is that when this proceeding wraps up, we are waiting to see if Letitia James will come out to cameras and speak publicly. There are some protesters around the courthouse. People who are protesting the administration of Donald Trump and the choices his Justice Department is making, including, evidently, this case itself.

But there is more to come today here. Both in court, the proceeding does not appear to be over yet for this arraignment of Letitia James, the New York Attorney General. And then also after, what does she say? What do her lawyers say publicly? And is there more that Donald Trump himself will say other than what he said before that he wanted to see her prosecuted? Back to you.

BLITZER: All right. Let me bring Elie back in. You're a former federal prosecutor. What else are you expecting to emerge from this hearing?

HONIG: So, part of what happens in -- in an arraignment like this is formalistic, like we just heard, the reading of the charges, the entry of the not guilty plea. But there's some real important substance that's going to happen as we speak or in the next few minutes.

First of all, the judge is going to say, what are we going to do about motions, folks? Meaning, defendant, what motions are you going to make to attack this case, to attack this indictment? I suspect that Letitia James' lawyers will explain that she's going to challenge the case based on malicious prosecution, selective or vindictive prosecution, meaning essentially she's been singled out by the administration for improper political reasons.

I think we are also going to hear that Letitia James is challenging the appointment of Lindsey Halligan in this sort of interim U.S. attorney role. The other really important thing to watch for is, will they set a trial date? Usually in this situation, the judge will set a trial date.

This federal district, the Eastern District of Virginia, is famous for its speed, for how quickly they get to trial. And so I would look for a trial date that will happen fairly quickly.

BROWN: Katelyn Polantz just got some breaking news on the trial date. Katelyn, what can you tell us?

POLANTZ: Indeed, a trial court fame -- a trial court famous for its speed, the rocket docket of the Eastern District of Virginia. The trial date now for Letitia James has just been set. We received word from our reporters and producers inside the courtroom. It is January 26th, three months. That's almost exactly the same as the length trial for Jim Comey, also in the Eastern District of Virginia. That's a very short time, although this court does tend to take people to criminal felony trials about seven months.

That's the typical or the median length of time. Letitia James, three months from now, has a trial date, January 26th. We also understand that that trial, it's supposed to last about five days. That's usually the amount of time the prosecutors believe that they want to take to present what they call their case in chief, so all the evidence against James.

And we'll wait to see exactly what else is going to happen between now and trial if the defense divulges more of how they're going to try and challenge this case and possibly have it thrown out so that it may never see a trial. Back to you.

BLITZER: Pretty fast. But there could be changes in that date if some of these requests from the defense attorneys go forward.

HONIG: Yes, so three months from now is a very quick federal trial. January is going to be a very busy month in that courthouse because we got the Jim Comey trial the first week of January. Now this one at the end of January.

But yes, well, it's rare to see a case make it to trial in under three months. But they really do move. As I was saying just before that news broke, this district is famous for moving things quickly. And by the way, a short trial to five days. This is all about a mortgage on one property. Shouldn't be that complicated.

BLITZER: Katelyn is getting some more information. What else are you learning, Katelyn?

POLANTZ: Little drips and drabs coming out of the court. The additional thing that we hear is that this Justice Department case in chief, they want to call eight to 10 witnesses. Now we don't know who those people are yet. And we don't know if Letitia James herself would be called to testify. She would likely not be called in the prosecutor's case.

She may have the ability to testify on her own behalf as a defense witness. But in this, the Justice Department wanting to call eight to 10 witnesses on a bank fraud or mortgage fraud case. That's what they're telling the judge right now. That's why they say they need five days of witness testimony and evidence presentation when this does go to trial at the end of January.

BLITZER: Alright, Katelyn Polantz, Elie Honig, to both of you, thank you very, very much.

BROWN: Yes, thank you so much. Lots going on there.

[11:19:58]

Up next, more breaking news. Parts of the Caribbean are bracing for what could be a catastrophic assault under hurricane conditions as a rapidly growing storm prepares to essentially park itself south of Jamaica this weekend.

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BROWN: Breaking news, Jamaica and Western Haiti are bracing for the full impact of Tropical Storm Melissa.

BLITZER: The Dominican Republic is already getting hit with winds and rain from Melissa's outer bands. The storm has killed three people already in Haiti and could become a major category 4 hurricane by Sunday.

Let's go live to CNN meteorologist Allison Chinchar who's tracking the storm for us. Allison, everybody wants to know, is this storm likely to head towards the East Coast of the United States?

[11:25:06]

ALLISON CHINCHAR, CNN METEOROLOGIST: We are a long way off from that. I mean, a very, very long way. And a lot of the reason for that is this is just moving incredibly slow. You're talking 2 miles per hour is the forward speed of this storm. And that in itself is going to cause a lot of problems.

But just for some perspective, the average human can walk at a pace of about 3 to 4 miles per hour. So this is actually moving slower than you or I could actually walk. Now, when we take a look at the forecast, there's really not much movement over the next 24 hours. Then eventually we'll start to see it trend out towards the West before making that sharp turn to the North just to the East of the United States. Where yes, you could end up seeing some impacts, say in the form of rip currents or high surf along the U.S. East Coast. But the bigger impacts are certainly going to be down here across the Caribbean, especially for portions of Haiti, Jamaica and eastern Cuba.

Now, the models still aren't in complete agreement of exactly when Melissa makes that right hand turn. Again, you can kind of see some of them go pretty far west here before making that northward turn. But this is important because the farther west the storm can go, the warmer the water it's going to enter.

And we all know warm water is fuel for these types of storms, which means in turn it would end up becoming a much stronger storm. Also, there's a lot of wind shear out there right now, but that changes this weekend. And so knowing the wind shear is going to die back a little bit will allow the storm to strengthen further.

So that's why a lot of the forecasters are thinking this could end up being a 3, category 4, or yes, potent -- cannot even rule out the potential for a category 5 storm. Now, one of the biggest impacts is going to be the rainfall. Notice all of the pink and white color here you see on the map.

Now we're talking at least 10 inches of rain. Some of these spots could pick up 15 or even 20 inches of rain. And a lot of that has to do with the incredibly slow movement because it's not really going anywhere.

It has a lot of time to dump a tremendous amount of rain, especially along the western portion of Haiti, the southern and eastern coasts of Jamaica, and even the southeastern portion of Cuba as well.

BROWN: All right, Allison Chinchar, thanks so much.

BLITZER: All right, just ahead, President Trump's apparent reversal on Russia and Vladimir Putin. Now taking the form of strong new economic sanctions meant to hurt Moscow. But will they make a real difference in nearly 4 years into this brutal war?

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