[Don Lemon, Cnn:] I'm Don Lemon. It is 11:00 p.m. here on the East Coast. We're live with big breaking news, huge. Rudy Giuliani dropping an absolute bombshell tonight saying that President Trump paid his fixer, Michael Cohen, back for that $130,000 hush money payment to Stormy Daniels. I want you to listen, this is what he said tonight on Fox News.
[Sean Hannity, Fox News:] My question is, are you concerned in the process of this? We did discover that a foreign national, Christopher Steele, was paid through Fusion GPS, used Russian sources that not only weren't verified, but were debunked are you concerned that that was paid for to manipulate the American people in the lead-up to an election?
[Rudy Giuliani, President Trump's Attorney:] Isn't that closer to the mandate on Michael Cohen?
[Hannity:] Why isn't that happening? Where is Mueller on that, sir?
[Giuliani:] Having something to do with paying some Stormy Daniels woman $130,000? I mean, which is going to turn out to be perfectly legal. That money was not campaign money. Sorry, I'm giving you a fact now that you don't know. It's not campaign money. No campaign finance violation.
[Hannity:] So they funneled it through a law farm?
[Giuliani:] They funneled through a law firm and the president repaid it.
[Hannity:] Oh. I didn't know. He did.
[Giuliani:] Yes.
[Hannity:] There's no campaign finance law?
[Giuliani:] Zero.
[Hannity:] So the president
[Giuliani:] Just like every Sean
[Hannity:] So this decision was made by
[Giuliani:] Everybody was nervous about this from the very beginning. I wasn't. I knew how much money Donald Trump put into that campaign. I said $130,000? He can do a couple of checks for $130,000. When I heard Cohen's retainer was $35,000 when he was doing no work for the president. I said that's how he's repaying, with a little profit and a little margin for paying taxes for Michael.
[Hannity:] But do you know the president didn't know about this? I believe that's what Michael had said.
[Giuliani:] He didn't know about the specifics of it as far as I know, but he did know about the general arrangement that Michael would take care of things like this. I take care of things like this for my clients. I don't burden them with everything single thing that comes along.
[Lemon:] So let's bring in now CNN Senior Political Analyst, Mark Preston, Senior Political Correspondent, Sara Murray and CNN Correspondent, Sara Sidner. Also with us this evening is Michael Avenatti, Stormy Daniels' attorney. Good evening, everyone. Sara, you have been following the Stormy Daniels saga from the very beginning and now tonight a bombshell from Rudy Giuliani that Trump repaid Michael Cohen $130,000 in hush money for that Stormy Daniels hush money payment. Giuliani says that this did not violate any campaign finance laws. Is he right, Sara Snider?
[Sara Sidner, Cnn Correspondent:] The answer is no according to common cause and they have a couple of reasons why. They said that it exposes Donald Trump to possible criminal prosecution with the DOJ because they have filed a complaint with the Department of Justice. Why? Because if he paid Michael Cohen back the money, it means that the president did know about it and potentially willfully ignored the law. And you know that ignorance of the law does not mean that you get forgiven for breaking the law. So that is one thing that common cause says. The second thing they say is that Michael Cohen can't be let off the hook just because he was paid back because there is a contribution limit for individuals. Michael Cohen said, look, I paid this on my own. I went and got a home equity minus credits to pay the $130,000 to Stormy Daniels in this hush deal. Well, he can't go and do that and try to influence the election. If that's what he was doing then he could have violated not only FEC rules, but if you think about it, the in-kind contribution is set up to $2,700. $130,000 is far beyond that. So common cause says both people now, because of what Rudy Giuliani has said on television and has doubled down on, both of them are in very deep water here potentially with the FEC and also with the Department of Justice.
[Lemon:] So Sara, before I get to the other Sara Sidner, before I get to the other folks. What does Michael Cohen and President Trump said about the payment in the past?
[Sidner:] Look, the president we've heard, he was on Air Force One. He has said, look, I didn't know anything about this deal, you'll have to talk to my lawyer, Michael Cohen. What has Michael Cohen said? Well, let's put it up for you. He sent a statement out when this FEC filing was put in place, a complaint was put in place and there it is. He said, in a private transaction in 2016, I used my own personal funds to facilitate a payment of $130,000 to Ms. Stephanie Clifford, that is Stormy Daniels' legal name. Neither this is the important neither the Trump organization nor the Trump campaign was a party to the transaction with Ms. Clifford, and neither reimbursed me. So, now we're hearing from Rudy Giuliani that he was reimbursed over several months through a law firm. The question is when did that happen? I think that's really important. When did that happen, but ultimately common cause says all of it is a legal problem.
[Lemon:] OK. I wanted to get to the news. Did you guys have to standby when everybody standby because Michael is here and you're about to jump out of your seat. What do you think of this when you heard this? You are listening to Rudy Giuliani just moments ago when we played that sound bite and what was going through your mind?
[Michael Avenatti, Attorney For Stormy Daniels:] It's an absolute disgrace, Don, and I'm disgusted by it. In every American, regardless of their political persuasion, I don't care if you're on the left, I don't care if you're on the far right, I don't care where you line up, you should be disgusted by what has happened in connection with the lies that you have been told over the last three months about this payment. You should be disgusted by the fact that the president of the United States stood on Air Force One on video and audio and stated lies to you relating to this $130,000 payment. And there's no way to dress this up. You can try to put lipstick on the pig morning, noon and night and it's still going to be a pig, Don. This is disgusting what we're hearing. And I want to make a couple of points, OK. You put the statement up on the screen. Weeks ago, months ago when we first started talking about this statement, when we filed our case and I honed in on the word facilitate, and I used to talk about what an interesting word that was as opposed to just having him state that he repaid it. I found that to be a very suspicious word. I also found it suspicious that the statement did not state that Mr. Trump individually had not reimbursed the $130,000. Now we find out that in fact my suspicions about that statement were spot on because they wordsmith the statement in order to deceive the American people. So, that's number one. Number two, Rudy Giuliani, based on what I've just seen stated that there were bogus law firm bills, fraudulent law firm bills.
[Lemon:] Are you talking about the part which is he paid him back? He said when I heard Cohen's retainer for $35,000 what he was doing no work for the president I said, that's how he's repaying. That's how he's repaying it, with a little profit and a little margin for paying taxes.
[Avenatti:] Well, guess what? That's fraud. That's illegal. And if you have parties that know about that, namely the party that is sending out the invoice plus the party that's paying it, that's a felony. You can't do that. So basically what Rudy Giuliani among other things and this is an important point. He's stating that Michael Cohen sent out bogus invoices for $35,000 for legal work with the understanding no work would be done and that the president we paid the $35,000 invoice knowing that no work was done, and that's how they basically laundered the reimbursement of this $130,000, plus a little bit of profit, plus additional money for taxes. This is a serious, serious matter. And to all the people out there that I've heard from and there hasn't been a lot, but there's been a number of them they said that this was a bogus lawsuit, that it was a publicity stunt
[Lemon:] Well, they asked why we are covering the story.
[Avenatti:] Right. Why is
[Cnn -- Lemon:] Why do you have Michael Avenatti
[Avenatti:] Right. Why am I on CNN so much, and why are you giving him so much airtime? Well guess what, this is why. We've been talking about the fact that this was about the cover up and it was about the lies and it was about the deception. And guess what's? It's all come home to roost tonight.
[Lemon:] So, listen, and I mean this, any of the president's representatives are welcome to come on now. The president if he wants to call in. Michael Cohen, if Michael Cohen wants to call in. If Rudy Giuliani, call in, come in or whatever, to respond to this. I think this is huge story and it certainly changes the trajectory of the story. So, let's keep it with the president now and then I'll go to Michael Cohen. What do you think this means legally, if anything, for the president?
[Avenatti:] Well, I think that this shows that the president has significant potential criminal liability for felonies associated with campaign finance violations, as well as potential money laundering violations, as well as potential fraud violations relating to these law firm invoices that we've now heard about. I mean, this opens the Pandora's Box if you will into serious, serious issues for Donald Trump. I said it weeks ago. I'm going to say it again, Mr. Trump will not serve out his term. No way, no how. He will be forced to ultimately resign. This is a bombshell.
[Lemon:] Okay, let's get to Michael Cohen. As you know, I've interviewed Michael Cohen and he has said as much in interviews, that he's fiercely loyal to the president, that he has done nothing illegal, that the president should be happy that he has someone, anyone would be happy to have someone like him looking out for their business, that he did this out of love or his, I don't know, loyalty to the president. What do you say to that?
[Avenatti:] Well, I think it has been laid bare tonight that a lot of that is complete nonsense, Don. He clearly has lied to you and others in the press. He's lied to the American people. He had David Schwartz come on CNN repeatedly and lie on his behalf and claim that there was no reimbursement. I mean, don't lose track of that. Let's not lose track of this. This is very serious matter. And let me just tell you this, Michael Cohen I'm sure, as he sat at home tonight and learned of Rudy Giuliani's comments, he probably is most shocked because he is the one that right now is in the crosshairs. He is the one that had the FBI show up at his office, his hotel room and his home and come out to raids. He is in the worst place right now than he has ever been in connection with this criminal investigation. And the reason is, a big reason is because the statements of Rudy Giuliani made to Sean Hannity.
[Lemon:] So, does this so this shows you I asked what are the legal ramifications for Michael Cohen? Does this definitely show that he's done something illegal here?
[Avenatti:] I think all indications are that that's true. I mean that there are significant campaign finance violations, there's significant potential bank fraud violations relating to his opening of the bank accounts for this payment. We don't know how the money was reimbursed. And by the way, now is a really good time for me to bring this up, OK. Now is an excellent time. The administration should immediately order the release of that suspicious activity report or SAR that was filed by First Republic Bank in connection with their investigation of this matter, period. Now is the time. The American people should demand the release of that SAR, that suspicious activity report. And I will submit that the reason why our request was not complied with, and the reason why the American people have been kept in the dark as to that suspicious activity report, Don, is because I believe that it contains a narrative of a lot of this conduct, and this in furtherance of the cover-up and the lies and the deceit.
[Lemon:] All right. So let's tell them what the SAR is. Suspicious Activity Report, what exactly
[Avenatti:] Suspicious Activity Report is when a bank questions a transaction as potentially being criminal or suspicious in nature. They conduct an investigation. They create if they conclude that illegal activity may have occurred, they compile what's called a suspicious activity report. It is submitted to a group called FinCEN, which is part of the Treasury Department for further investigation. We demanded weeks ago that the SAR be released to the American people. It hasn't been. Now is the time the American people should see it.
[Lemon:] What do you think is in there? Why do you want it released? What do you think is in there?
[Avenatti:] Because I think that the SAR lays out a narrative and significant evidence of Michael Cohen's criminal conduct in connection with this $130,000 payment and may in fact also include information relating to how that $130,000 was reimbursed. That's why the American people should see it, Congress should investigate it, immediately demand it be turned over. And if there's nothing to hide in it, then let's publish it to the American people, period.
[Lemon:] OK, so let me refresh you on this because you said that I think you said it first here that you thought the president wouldn't serve out his term. I think it was on this program that you also said on this program when you raised the, you know, the suspect, right, the $131,000.
[Avenatti:] I also said months ago that it would ultimately be shown that the president reimbursed $130,000 among other things.
[Lemon:] So that's a big assessment or a big claim for you to say that the president of the United States would not serve out his term, that he would resign. How do you say that?
[Avenatti:] Every statement that I have made, every prediction in this case thus far, Don Lemon, has come true. I have been right and I don't say that to be egotistical. I have been right all along. And I don't see how the president is going to be able to serve out his term in light of the information that is going to come to light in connection with the FBI raids, in connection with Michael Cohen flipping on the president, and in connection now with these admissions tonight. I just don't see it.
[Lemon:] Stand by, Michael. I may have some more questions for you. I want to bring in now Sara Murray. And Sara, I want to get your reaction to, you know, we've been listening, and Mark Preston as well. You're there in Washington. Where do you think this story goes now with you've heard from Rudy Giuliani and now you're hearing from Michael Avenatti.
[Sara Murray, Cnn Political Correspondent:] Well, look, I think that there is going to be a lot to grapple with, and it's not just what Rudy Giuliani said in the context of dealing with this payment and dealing with Michael Cohen. I mean, if you're watching the rest of this interview that he did, he is essentially trying to make the case that the president deserves to be believed. He's setting up these standards that he thinks need to exist when it comes to whether President Trump is going to sit for an interview with Special Counsel Robert Mueller and essentially saying we're only going to go in there if they promise us that, you know, they're not just going to believe what the former FBI director has to say. That they're going to listen to the president and treat him just as credibly as they would a former FBI director. And then, Rudy Giuliani went out to make his own the president look like a liar. He essentially said that the president reimbursed Michael Cohen and was aware of this agreement after we saw President Trump publicly say he knew nothing about it. So, there are ripple effects here to the president's credibility beyond just the question of what exactly happened with this $130,000 payment. And it's at a critical moment. When they're in these discussions why whether Trump is going to sit down for an interview with the special counsel.
[Lemon:] So Mark, you know, we've been covering this for, you know, we covered the campaign from the very first day when he went down the escalators at Trump Tower, when the news broke of the "Access Hollywood" tape and when the news came out earlier this year about the payoff to Stormy Daniels, and here we are now. Do you think this will make a difference as a turning point?
[Preston:] Well, a couple of things that I think we have to put things in perspective here, Don. First of all, no disrespect to Michael Avenatti there, but the idea of him talking about him not being able to fulfill his four-year term and efforts we're seeing within Congress right now to "impeach Donald Trump," is probably working against the Democratic party's efforts to try to take back the House and the United States Senate. People don't want to hear that talk, and also at this point, I don't think that he has risen to the level of being impeached. So talk like that is not going to work for Liberals and Democrats who want to see Trump to go. But to your point, is it going to matter? Right now, it matters because it's now in the sphere. It's all out there right now. Rudy Giuliani was amazingly interesting tonight on Fox News. It wasn't just this that he talked about, Don. There were a lot of other things too that are certainly going to raise some red flags. You know, the first thing that comes to light is when Rudy Giuliani said, listen, I should have taken the job. Had I taken the job basically we would not be in this position. Jeff Sessions would have not recused himself and Jeff Sessions would not have had Rod Rosenstein taking over
[Lemon:] He said that Sessions and Rosenstein should shut this down right away. Hs did say that.
[Preston:] Right away.
[Lemon:] Hold on. Let's play it. Let's play it, mark. Here it is.
[Giuliani:] I think Comey is a bigger liar than McCabe. I think McCabe was a situational liar. He's a much bigger liar. So if this were an equal system of justice, they'd all be prosecuted.
[Hannity:] Let me ask you because this was
[Giuliani:] My biggest regret, I'm sorry, Jeff, to say this
[Hannity:] You were offered the job.
[Giuliani:] Yes, it's my biggest regret in not having taken that job. I wanted to be secretary
[Hannityl:] My biggest regret, and I like Jeff Sessions, but he never should have recused himself.
[Giuliani:] Well, he never should have appointed Rosenstein.
[Lemon:] Mark, quick response to that.
[Preston:] Well, you know, a couple of things here. It looked like there were two great supporters there of President Trump lamenting the fact that they're in this position. Of course, Sean Hannity was supposed to be a journalist and actually interviewing, but what it does say to me is that and if you heard Rudy's tone throughout the whole interview, is that we are going through a whole another sphere right now. This is going to get very, very combative. They're changing their legal team up right now and we're going to see Rudy Giuliani and others right now pushing this whole narrative that we have seen to discredit this investigation just to give more criticism
[Lemon:] And the Justice Department. Mark, thank you. Michael, you want to respond? I'll give you the last word here.
[Avenatti:] Lying on videotape to the American people on Air Force One should never be acceptable in our America, period.
[Lemon:] Thank you all. I appreciate it. When we come back, much more on our breaking news tonight. Rudy Giuliani's stunning statement that President Trump repaid Michael Cohen $130,000 for the hush money payment to Stormy Daniels. [COMMERCIAL BREAK] So here's our breaking news tonight, Rudy Giuliani's bombshell statement that President Trump repaid Michael Cohen $130,000 for the hush money payment to Stormy Daniels. So let's bring in now John Flannery, a former special counsel to the Senate and House Judiciary Committees, Caroline Polisi is a federal and white collar criminal defense attorney and CNN Legal Analyst, Michael Zeldin who was Robert Mueller's former special assistant at the Justice Department. I've got a lot of questions for you guys in a short period of time here. So, I said this, Caroline, is this a jedi mind trick because how can someone I'm being serious.
[Caroline Polisi, Federal And White Collar Criminall Defense Attorney:] I have to believe, Don, that there is a bigger strategy here because otherwise there is just literally is no explanation for what Giuliani just did. Talk about Rudy to the rescue, I mean, this is a terrible thing that he did. I have to think he's getting out in front of some bad facts that he knows, potentially. It's a strategy on part of criminal defense attorney to sort of get all the bad facts out up front. Maybe that's what he was doing here. That's the only thing I can think of.
[Lemon:] What do you think of that, Michael?
[Michael Zeldin, Cnn Legal Analyst:] I think that probably is not the case here. I think that this guy was just freelancing. Remember the first thing he said when he was brought onto the team was I'm going to put this Mueller investigation together in a few weeks time and it would be done.
[Lemon:] So he's giving it more fuel now.
[Zeldin:] Now he comes on that's right. And now he comes on and he says one of two things. Either Michael Cohen made a contribution that was excessive and violated the law or the president made a loan was received a loan that should have been reported and wasn't reported and that the repayment of that loan was funneled in $35,000 increments in the way I think calculated to avoid reporting the loan on the campaign finance forms. And so potentially Giuliani walked his client and potentially Michael Cohen in a difficult legal position. What you don't want to do if you're Rudy Giuliani is back Michael Cohen into a corner where he thinks that the president really is not on his side, and that if Michael Cohen has something bad to say about the president, he will now think long and hard about making a deal with the prosecutors. So, all in all I think it was not a good night for Trump, Cohen and especially Rudy Giuliani.
[Lemon:] So, go ahead, John. I want to get your reaction, but I got a question.
[John Flannery, Former Assistant U.s. Attorney:] Well,, you know, I think Rudy tonight should be arrested for impersonating a criminal defense lawyer. It's the most amazing performance. I can't imagine what Cohen's lawyer was doing, but I think he probably brought that client closer to cooperating if there haven't already been discussions. And he's restructured the entire case now into there was a pay off, there was a statement made to a bank. We don't know what the false statement was. And it question is what did Mr. Trump know and when about that application for the loan. And then restructuring something in which Rudy said that there was a little extra paid for income so, did they make representations to IRS that these payments were income to the firm, and they gave additional money to cover the taxes for it? And Rudy sounded at one point like he knew about it as it was happening. And I'd have to hear what he said again several times, but it sounded like that.
[Lemon:] Let me ask you this. So the president has said he did very that it was his attorney, he was only client. And then he said according to Rudy Giuliani that it was a retainer. You saw the $35,000. Do you think that maybe the president is giving Rudy Giuliani this narrative to go out and say that it was a retainer to sort of stem some sort of legal tide that is coming?
[Flannery:] I think that most lawyers would spend more time to find out what the government knew before they went around offering a defense to one offense and leaving themselves open to several others. I can't even imagine why you do it. But I think I've said to you before that as a prosecutor, I always thought in white collar cases, you don't always catch the geniuses. But it's unusual to have an attorney with at least these prior experience come on the air and say anything like he did and open himself up to among other things an apparent waiver of any privilege, which is being contested in that criminal case pending in the southern district of New York. It's a debacle of enormous proportions. And if Trump comes out and says I never authorized him to say that, where are they then? It's just amazing.
[Lemon:] OK. So Michael, you said that, you know, you thought that he was freelancing. He was just talking to Sean Hannity, you've made that point. Here's what I want to ask you, Caroline. So, it seems like and this is according to a lawyer I know. He says it seems like Rudy Giuliani is trying to somehow shift or relocate or reallocate Cohen's retainer in hindsight, and that is very convenient. But retainers don't suggest any service has to be completed by Cohen. It may simply suggest availability. But he thinks that this attorney thinks that he's conveniently trying to reallocate that the retainer, you know, this was a retainer and not hush money that he was paying.
[Polisi:] Yes, but this goes to Michael Avenatti's point that he made earlier, that this could be sort of an elaborate structuring deal, and structuring is itself is a federal crime, if that's telling. He said the idea being, you know, and I think Giuliani said that the money was funneled through a law firm. Well, funneling sounds a lot like money laundering. So when you combine structuring with the funneling, there is a lot of moving parts here that are sort of right for prosecution.
[Lemon:] You got to go quick for me Michael. I've got a break to get in here. If you were John Dowd and Ty Cobb were out, and then Emmet Flood who is coming in, what would you be thinking right now?
[Zeldin:] Oh, my god might be the first thought that comes to my mind. I think of Marty and Jane Raskin, two terrific lawyers who now are on the scene and have to sort of control these cats. I think Emmet Flood is a terrific lawyer and will be helpful here. And so I think they've got their work cut out for them not only in controlling the messaging out of the president's mouth but apparently the messaging out of Rudy Giuliani, one of your team members now. I don't know what they can possibly do to control both of those people at this point in time.
[Lemon:] Thank you all. I appreciate it. When we come back, much on our breaking news tonight. Plus, this we have this. Three Americans who have been detained in North Korea for months could be released at any moment. We're going to go live to the region. That's next.