Return to Transcripts main page

The Situation Room

Selling Early Access to TRUTH Social Posts; Senate Set to Vote on Todd Blanche Nomination; Democratic Battle in Michigan. Aired 10:30a-11a ET

Aired August 04, 2026 - 10:30   ET

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

[10:30:02]

WOLF BLITZER, CNN HOST: Let's go live right now to CNN's Arlette Saenz.

Pamela, bring her in.

PAMELA BROWN, CNN HOST: All right, Wolf.

She is on the ground there in Michigan. She's been following all of this from the very beginning.

Arlette, what's the final campaign push looking like there?

ARLETTE SAENZ, CNN CORRESPONDENT: Well, Pamela, the Democratic Premier here in Michigan Senate race could soon offer some insight into the direction the Democratic voters would like to see their party take, not just in this Senate race, but also potentially beyond that.

We've been spiking to a host of voters here at this polling site in Detroit throughout the morning, and many of them have told us that they are backing the progressive candidate in this race, Abdul El- Sayed, while we have spoken to a few who have also said they are supporting the moderate candidate, Congresswoman Haley Stevens.

This race is really setting up a major test for the progressive movement, which has seen a lot of success in big blue areas like New York City and Denver over the past year. But now they are trying to replicate that success here in a very purple battleground state of Michigan.

One thing that a lot of voters have spoken to us about this morning is the concerns about the outside spending that has poured into this race. Stevens has seen more than $60 million from outside spending groups come into this race on her behalf. That is something a lot of El-Sayed supporters have said they have frustrations about.

But take a listen to some of the final pitches that both Stevens and El-Sayed made to their supporters in the final stretch of this campaign.

(BEGIN VIDEO CLIP)

REP. HALEY STEVENS (D-MI), SENATORIAL CANDIDATE: They are saying already, oh, we'll just squeak in MAGA Mike Rogers to rubber-stamp Donald Trump's agenda. We're not going to let that happen. When it comes to Michigan, I run through anyone and anything to stand up for us.

ABDUL EL-SAYED (D), MICHIGAN SENATORIAL CANDIDATE: This movement of ours has proven that it can come through $80 million of spending in lies because we're willing to hold with us the truth. You can't buy inspiration. You can't buy people deciding to be a part of something. You can't buy hope. You can't buy belief.

(END VIDEO CLIP)

SAENZ: Now, some of the other races we are watching will determine whether Democratic incumbents will be able to hold on to their seats or whether they might fall to more progressive challengers.

There is a race here in Michigan's 13th Congressional District where a Democratic Socialist, Donavan McKinney, is taking on the Democratic Congressman Shri Thanedar. And then in Missouri, former Congresswoman Cori Bush, another Democratic Socialist, is taking on Democratic Congressman Wesley Bell.

So that could offer some more insight into the direction of the Democratic Party at a very high-stakes moment heading into the midterm elections.

BROWN: All right, Arlette Saenz, thank you so much.

We will be watching all of this closely. Stay with CNN all day to follow all of these races, including this consequential Michigan primary. Live coverage begins tonight at 7:00 Eastern on CNN and on the CNN app -- Wolf.

BLITZER: And we will be watching, of course.

Coming up: why Capital One now says it closed hundreds of accounts belonging to the Trump Organization. We have details.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

[10:37:40]

BLITZER: Happening now, the Senate Judiciary Committee holding a very lively, very spirited debate right now just ahead of a vote on the nomination of the acting attorney general, Todd Blanche, President Trump's pick to eventually lead the Justice Department.

Here's Senator Cory Booker of New Jersey just a few moments ago.

(BEGIN VIDEO CLIP)

SEN. CORY BOOKER (D-NJ): I think this committee should pass a law that no children of presidents should be able to grift off their parents' office. To me, it is ridiculous the corruption that we have normalized in America, that presidents' children can go out and sit on boards and make money.

That is wrong, and that is corrupting. But they have become so obsessed with the millions that the Bidens have made that they have ignored completely the billions of dollars that the Trump family is making. That is like being obsessed and using a magnifying glass to study the stain on the living room carpet when behind you is a mountain of excrement covering the living room couch and coffee table.

This is so outrageous, the lack of proportionality going on in my colleagues. It is laughable. This...

(END VIDEO CLIP)

BLITZER: CNN has extensively reported on multiple instances where conflicts of interest may exist between President Trump and his family's businesses.

To be clear, President Trump did not divest from his businesses, but handed over the businesses to his sons.

Joining us now, CNN senior legal analyst Elie ]Honig.

Elie, all of this hinged on the president's $1.8 billion fund, as you know. Todd Blanche said in part that the fund is rescinded now and shall have no force or effect. Does this stop the Department of Justice now from pursuing this in the future?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: No, Wolf, January 6 rioters can still get paid two ways.

First of all, while Todd Blanche has now testified under oath and also signed a document saying, in my view, the slush fund is dead, remember, that slush fund came about because of an original agreement between the government, but also Donald Trump as a private citizen.

Donald Trump has never signed such a document. And so theoretically, at least, Trump could go into court and ask a judge to enforce the slush fund, to bring it back to life.

[10:40:03]

Separate and apart from that, even if the slush fund does remain dead, anybody can put in a claim at any time if they believe they've been wronged by the federal government. And, ultimately, the decision whether to pay them will come down to Todd Blanche.

Blanche was asked at his hearing, will you rule out the possibility of paying violent January 6 rioters? And he punted. He said, well, we'll take each case as it comes. So, yes, there will still be ways for January 6 rioters to try to get paid.

BROWN: And I want to follow up with you, Elie, because, as you well know, Blanche has drawn scrutiny for his connection to Trump. He served as Trump's former personal defense attorney in the past.

Do you think Blanche has the independence required to lead the nation's top law enforcement agency? And, if you just would, explain to our viewers why independence is important in this context.

HONIG: Well, DOJ has been built on a foundation of independence from the president, from politics that goes back many generations.

Todd Blanche and I were both trained in the same tradition when we were both colleagues at the Southern District of New York. As for whether he will be independent, if you judge him based on his actions over the last year-and-a-half as deputy A.G. and acting A.G., the answer is a resounding no.

He has embraced these weaponized prosecutions. Most recently, he's been the acting attorney general during this failed prosecution of the Reflecting Pool case. He also has presided over the failed prosecutions of Letitia James, of Jim Comey, failed efforts to indict Mark Kelly, Elissa Slotkin, all of these for overtly political reasons.

So Blanche can repeat the rhetoric that he was taught, but I think his actions tell us otherwise.

BLITZER: Blanche will move on to a full Senate vote after today, as you know, Elie. If he doesn't make it through the full Senate, all 100 members, how long can he serve as acting attorney general?

HONIG: Well, Wolf, there is a federal statute that says a person can serve in an acting position like attorney general only for 210 days, where we would be about five months into that period.

However, there's an exception to that. If a person has a pending nomination, then those time limits are suspended. So what could happen is, Donald Trump could renominate Blanche and then the Senate could simply hold the nomination, in which case, Blanche could absolutely serve as acting A.G.

Even if he fails in the Senate by some unlikely circumstance, he could still serve as the acting A.G. for an indefinite time period. There is precedent for this. Joe Biden had an acting labor secretary for about two years. So whether he gets the full title or the acting title, he's likely to remain in that position for the indefinite future.

BROWN: All right, I want to ask you about Jeanine Pirro, the U.S. attorney for the District of Columbia. You had been critical of her ever since she dropped this Reflecting Pool case.

Now Trump has actually made it very clear that he is not happy that she folded like an umbrella, he said. What do you make of his comments? I mean, did she really have a choice here?

HONIG: Well, first of all, what a perfect exhibit for what I was just talking about, that Trump's view of the Justice Department is that they are there to carry out his will.

Donald Trump doesn't have any particular facts or insight into this case more than what prosecutors would have. With respect to the claim that Jeanine Pirro folded like an umbrella, the thing that she really did is ultimately, far belatedly, do the right thing. The problem is, she charged this case without having the evidence. She

oversold what this case was. And now Jeanine Pirro is trying to say, well, the Department of Interior didn't tell us certain things. I'm sorry, that's your job as a prosecutor. You don't get to charge someone, indict another person, and then say, oops, I found out something later, and that undermines my case.

Your job is to take your time, investigate fully, get it right, and then indict. And here Jeanine Pirro did that backwards. So I don't see it as her folding. I see her as her belatedly correcting an egregious mistake. I don't think she should be forgiven for it, but it's better that she -- quote, unquote -- "folded" than that she stuck with this ridiculous prosecution.

BROWN: So what recourse does this Olympian David Hearn have now? Can he sue?

HONIG: Yes, sure.

As I said before, anyone who's been wronged by the federal government can put in a claim under the Federal Tort Claims Act. This would be actually a textbook example, somebody who was indicted, where the case was then dismissed. The government has now admitted they did not have the evidence to support this.

He obviously has sustained reputational harm. I'm sure he has sustained attorney's fees and other damages. So absolutely he could put in a Federal Tort Claims Act. That's sort of how the system is supposed to work and not to pay off, for example, January 6 rioters.

BLITZER: On another issue, Elie, you have a brand-new piece out in "New York Magazine" this morning entitled "Anthony Fauci Can Take the Fifth, So Can Donald Trump, and So Can You." That was the title of the article.

Rand Paul, Senator Rand Paul, is pushing to hold Dr. Anthony Fauci in contempt of Congress after he invoked his Fifth Amendment right at a hearing on Capitol Hill last week. This could ultimately lead to the Senate referring Dr. Fauci to the Department of Justice with a recommendations for criminal prosecution.

[10:45:04]

How likely is it that Dr. Fauci is ultimately charged and convicted?

HONIG: Well, I certainly can't speak for what DOJ will do. As we have seen, Wolf, they will indict people or try to indict people if it pleases them politically.

But if there is an indictment, I promise you it will fail, because whatever one may think of Dr. Fauci, he did have the legal right to take the Fifth in that proceeding last week. Now, people say, well, he has a pardon. You heard Rand Paul say he has a pardon, therefore, he can't take the Fifth.

But the thing is, he still has a Fifth Amendment right with respect to anything that might fall outside of the pardon. So, for example, if he could face potential state liability -- and there have been various state level investigations of him -- he can take the Fifth.

If he faces potential liability for anything after that pardon was issued to him in January of 2025, he can still take the Fifth. So, ultimately, I believe it's clear on the law that Dr. Fauci was entitled to take the Fifth.

And, therefore, I think any effort to prosecute him for that, whether it's under contempt or otherwise, I think will fail.

BLITZER: Elie Honig, thank you very, very much.

And we will be right back with more news.

(COMMERCIAL BREAK)

[10:50:22]

BROWN: Happening now: President Trump's social media platform, TRUTH Social, is now selling early access to his posts. Access is being sold to institutional customers, generally meaning big Wall Street investment firms.

Subscribers see a real-time feed of TRUTH Social posts from the president and other top contributors. And the service can provide information crucial seconds -- crucial information seconds before it's seen more widely by regular investors. And that can potentially translate into massive profits for those in the know.

Now, in the past, Trump posts about Iran and the Strait of Hormuz have moved oil markets, while other posts about tariffs have moved stock markets.

What this now is Ann Lipton. She is chair of business law at the University of Colorado Law School.

Thanks for coming on.

So, other social media networks also sell early access. So what makes this different, in your view?

ANN LIPTON, UNIVERSITY OF COLORADO LAW SCHOOL: What makes this different is that Trump has a personal interest in how -- in these sales.

So if he posts to Twitter or something and Twitter sells the feed, Trump doesn't get any benefit out of that. But with his own social media company, this is a company in which he has something like a 41 percent stake. He's the controlling shareholder. The shares are controlled by his son currently.

But that means that the family is very much invested in this business and therefore has a personal interest in making this feed profitable, and that's really the critical difference. BROWN: And, as I mentioned, Trump's TRUTH Social post can move

markets. So what are the legal issues around giving some investors this early access to information that others wouldn't have access to if they're not paying for this?

LIPTON: The issue is essentially the insider trading laws. The general rule is that, if you have access to information that isn't yours, it doesn't belong to you personally, it belongs to someone who you owe a fiduciary obligation to, you can't sell it to someone else so that they can trade on it.

And, in this case, that looks a lot like what's going on here. Trump, he's the president of the United States, but the information that he has, his intentions, what he knows about is going on with the war, those kinds of things, that's government information. He owes a fiduciary obligation to the government to keep it confidential.

And if he personally benefits from selling it to traders, then he and the company have potentially violated the securities laws, and the traders who trade on it have also potentially violated the securities laws.

BROWN: So, in many cases here, this access amounts to just seconds. How much influence and financial gain is potentially at stake, even with just this minimal heads-up?

LIPTON: Well, we have already seen some of Trump's posts can move markets rather dramatically, and, as I understand it from the reporting, that's actually how it's been pitched to traders. They have been showing slideshows that showed like dramatic price swings in response to his posts.

So we could be talking about quite -- at least -- millions at least of dollars to the traders, depending on the posts, and that actually brings up why this is so problematic. It's not the Trump family profiting that's the problem. It's that this gives the Trump family an incentive to make that feed as profitable as possible, because they want to sell more subscriptions.

And the way you make it as profitable as possible is by making announcements that cause really wild market swings. So now Trump, as president of the United States, has an incentive to make posts that are going to cause wild market swings, even if that's not necessarily what's best for the American people.

And that really gets at the core of why we prohibit insider trading in the first place.

BROWN: All right, I wanted to talk about something else. We also learned in a court filing yesterday that Capital One, that's a bank, closed hundreds of Trump Organization accounts for -- quote -- "anti- money laundering reasons."

The president accused Capital One of closing the accounts for political reasons. So they're firing back. The bank is trying to get the suit thrown out. A Trump Organization spokesperson says the claims by Capital One in the filing are -- quote -- "completely baseless."

But how do you think this case is likely to play out here?

LIPTON: Honestly, I can't really say. I mean, but -- if Capitol One obviously wants the whole case dismissed. If it can't get it, then that's the point where it gets into discovery.

I mean, this is the point where Capitol one gets to reveal the information that it has to a court and it gets to request more information from the Trump family, and that is not something Trump has shown a lot of inclination to do. He's already in a fight right now with the BBC over whether he has to turn over his finances.

[10:55:05]

So, I don't know how much Trump really wants to litigate in detail over these issues.

BROWN: All right, Ann Lipton, nice to have you on. Thank you so much -- Wolf.

LIPTON: Thanks.

BLITZER: And here's what's coming up all new at the top of the hour.

Federal officials confirming that a Salvadoran man has died at a controversial ICE detention facility. What they say happened.

Plus, a mother on trial for murdering her children is putting maternal mental health in the spotlight. We will speak to a doctor on the key question in the case, postpartum psychosis.

That's all new in the next hour.

(COMMERCIAL BREAK)