THIS IS A RUSH TRANSCRIPT FOR 'THIS WEEK' ON October 2, 2016 and it will be updated.
ANNOUNCER: Starting right now on THIS WEEK with George Stephanopoulos: Trump's taxes revealed. After refusing to release his tax returns.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENTIAL NOMINEE: When she releases her 33,000 emails that have been deleted, I will release my tax returns.
HILLARY CLINTON (D), PRESIDENTIAL NOMINEE: Must be something really important, even terrible that he is trying to hide.
(END VIDEO CLIP)
ANNOUNCER: A brand new report reveals that documents showing how Trump could have paid no federal income taxes for years.
And after round one in the ring, Trump plays the blame game.
(BEGIN VIDEO CLIP)
TRUMP: Boy, were they dishonest on the debate, man.
(END VIDEO CLIP)
ANNOUNCER: And pounces on Clinton's past in the run-up to round two.
(BEGIN VIDEO CLIP)
TRUMP: I don't even think she's loyal to Bill, if you want to know the truth. Folks, really, why should she be, right?
(END VIDEO CLIP)
ANNOUNCER: We talk with top Trump adviser Rudy Giuliani and Clinton supporter Bernie Sanders.
And is Russia hacking our election? The latest on the cyber security threat.
From ABC News, it's This Week. Here now, chief anchor George Stephanopoulos.
GEORGE STEPHANOPOULOS, ABC HOST: Good morning. Is this the October surprise? Breaking news from The New York Times. That banner headline: "Trump tax records reveal he could have avoided paying taxes for years."
The story shows Trump tax records from 1995 and they document a jaw-dropping $916 million loss, a loss he could use to avoid paying federal taxes on $916 million in income over 18 years.
And that puts this exchange from Monday's debate in a whole new light.
(BEGIN VIDEO CLIP)
CLINTON: Maybe he doesn't want the American people, all of you watching tonight, that know that he's paid nothing in federal taxes.
TRUMP: That makes me smart.
CLINTON: I tell you what, if not paying taxes making him smart, what does that make the rest of us.
(END VIDEO CLIP)
STEPHANOPOULOS; All through this campaign, Trump has said a business man pays as little taxes as possible. The New York Times report shows he could have paid nothing for years and years.
The evidence, 1995 tax records showing Trump took almost billion dollars in losses from the collapse of his Atlantic City casino empire, his airline and the purchase of New York's Plaza Hotel.
Overnight, the Trump campaign responded with this statement, "Mr. Trump is a highly skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required."
It did not say Trump paid federal income taxes. And Trump's team threatened legal action against The Times saying the documents were illegally obtained.
Last night in Pennsylvania, Trump took the stage as the story was breaking. No mention of taxes. A brand new assault on Hillary Clinton, mocking her recent bout with pneumonia.
(BEGIN VIDEO CLIP)
TRUMP: And she can't make it 15 feet to her car. Give me a break. Give me a break.
(END VIDEO CLIP)
STEPHANOPOULOS: And questioning her marriage.
(BEGIN VIDEO CLIP)
TRUMP: I don't even think she's loyal to Bill, you want to know the truth. And really, folks, really, why should she be, right? Why should she be?
(END VIDEO CLIP)
STEPHANOPOULOS: All this as our brand new poll shows a clear debate win for Clinton over Trump, 53 to 18. And Trump's unfavorable rating increased five points to 64 percent.
Trump advisor Rudy Giuliani coming right up, but right now we are joined by two of the reporters behind The New York Times story, Suzanne Craig and David Barstow. Welcome to both of you.
So, Suzanne, tell us how all this began. About 10 ago, you get a letter.
SUZANNE CRAIG, THE NEW YORK TIMES: Yeah, it was a week ago last Friday. So, roughly 10 days ago. When I went to my mailbox, it was Friday afternoon. I was on a deadline for another story and I swung by my mailbox. I usually do every day. And there was an envelope there from somebody from the Trump organization and I opened it and there were several pages of Donald Trump's tax returns in it.
STEPHANOPOULOS: And the return address had Trump Tower.
Do you have any other evidence that it actually came from Trump Tower.
CRAIG: That's what the return address said and then we went sort of and started to unravel who it might have been and who could confirm it.
STEPHANOPOULOS: And David that is when you went down to Florida and actually found Trump's accountant from the time?
DAVID BARSTOW, THE NEW YORK TIMES: Yeah, obviously a big concern for us is, can we validate these documents? And it's a small circle of people who could potentially do that. One of them was is Jack Mintic (ph) who served as Trump's primary tax accountant for many decades.
And so I presented what had been sent to us and asked him to take a look. And he looked at them and said, yes, this looks legit for a variety of reasons.
STEPHANOPOULOS: And let's talk about what these show and what they don't show. You can't say for sure that he didn't pay any federal income taxes over the last 18 years, but you do know that it's a fact that he could write off up to $916 million in income?
BARSTOW: That is exactly correct. As one of our tax experts told us that if one of his clients came to him with this tax return, what he would say to that client is effectively congratulations, you can earn up to $916 million and not pay a nickel in taxes.
STEPHANOPOULOS; All legally.
BARSTOW: All legally under these tax loopholes.
STEPHANOPOULOS: Yeah, we are hearing from Trump's lawyer this morning. He's actually threatening legal action against you guys and the New York Times.
What are your lawyers saying about that.
CRAIG: Well, last time I checked, it wasn't about crime to check your mailbox.
BARSTOW: They are saying it's ridiculous.
STEPHANOPOULOS: so it would be a crime for someone inside one of the tax departments, one of the state tax departments, to leak the documents, but it's not illegal to publish them.
BARSTOW: That is what our lawyers are saying.
CRAIG: That's what our lawyers are telling us.
STEPHANOPOULOS: And finally, any more documents coming?
CRAIG: We hope. We're at The New York Times and we check our mailbox.
BARSTOW: It's 620 8th Avenue.
STEPHANOPOULOS: Thanks very much for coming in.
BARSTOW: Thank you.
CRAIG: Thank you.
STEPHANOPOULOS: And we are joined by Mr. Trump's adviser, former mayor of New York Rudy Giuliani. Thanks for coming in again.
RUDY GIULIANI, FMR. MAYOR OF NEW YORK CITY: Hi George, good morning.
STEPHANOPOULOS: So what’s your response to this story?
GIULIANI: My response is he’s a genius. I mean, the reality is...
STEPHANOPOULOS: A genius?
GIULIANI: Absolute genius. I mean, the man in "The Art of the Deal" this is described. First of all, we’re talking about 26 years ago, perfectly legal. We should get that straight immediately. This is a perfectly legal application of the tax code. And he would’ve been fool not to take advantage of it. Not only that, he would’ve probably breached his fiduciary duty to his investors, to his business. You have an obligation when you run a business to maximize the profits. And if there is a tax law that says I can deduct this, you deduct it. If you fail to deduct it, people can sue you. Your investors can sue you.
STEPHANOPOULOS: You say though he’s a genius.
STEPHANOPOULOS: Here’s what Robby Mook from the Clinton campaign says. It says -- he says "it reveals the colossal nature of Donald Trump’s past business failures. He apparently got to avoid paying taxes for nearly two decades while tens of millions of working families paid theirs."
GIULIANI: OK, well, first of all that’s not clear that it’s a -- in other words, what was the loss, 1.8 billion?
STEPHANOPOULOS: $916 million.
GIULIANI: $916 million, well, last year for example he made $625 million. So if he had one year in which he made $1 billion, he would’ve wiped out the loss carried over in one year. So it’s unlikely that he carried forward for 18 years. That’s the amount income he was making.
Second, every great man has had failures. In "The Art of the Deal" he explains that. Churchill was thrown out of office twice. Steve Jobs was fired from Apple and had nothing. The reality is this man, 26 years ago, had some failures, and then he built an empire. I like that working for me, for the United States.
STEPHANOPOULOS: How come...
GIULIANI: He’s a genius at how to take advantage of legal remedies that can help your company survive and grow. I want a man who’s a genius at figuring out how to take this country, that’s -- moving in the wrong direction, where we’ve had a basically jobless recovery, where we’ve had growth of less than 2 percent for two years. That’s pathetic! Don’t you think a man who has this kind of economic genius is a lot better for the United States than a woman, and the only thing she’s ever produced is a lot of work for the FBI checking out her e-mails.
STEPHANOPOULOS: You say it shows that he’s a genius, but Mr. Trump himself in the past has criticized people for not paying taxes. He has tweet from 2012: "Half of Americans don’t pay income tax despite crippling government debt." And even in this campaign, he’s taked on -- taken on hedge fund managers who avoided taxes. Let’s listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENTIAL NOMINEE: The hedge fund guys are getting away with murder. They make a fortune, they pay no tax. It’s ridiculous, OK? I know people that are making a tremendous amount of money and paying virtually tax and I think it’s unfair.
(END VIDEO CLIP)
STEPHANOPOULOS: So why is this fair?
GIULIANI: Well, whether it’s fair or not, if I run a company -- and I do, right? And there are five deductions that are available to me, and I don’t take them, the people who invested in my company can sue for not doing that. And number two, my obligation in that circumstance is to make the maximum amount of money and to save my company from the maximum amount of damage. He was genius in being able to do that.
Went down, came all the way back up. America needs turnaround right now, and Donald Trump is a turnaround artist. Everyone believes, 667 (ph) is that we are moving in the wrong direction. Nobody believes that Hillary Clinton can turn America around. It’s going to be Obama 2, Obama 3, whatever you want to call it. Higher taxes, less jobs, 1 percent growth. We put our head down and we’re just another country, oh gee, gee.
This man is a man who knows what it feels like to fail and then how to come back from that.
STEPHANOPOULOS: The statement from the Trump campaign doesn’t say that he paid federal income taxes over those 18 years. Did he?
GIULIANI: I haven’t seen his tax -- I’m not his lawyer. I haven’t seen his tax returns. I would suspect that he did because that kind of loss that you’re looking at, given the income that I saw in his financial disclosure form, would say to me that he probably paid off that carry forward very, very quickly.
Look, I have clients with carry-forwards are twice that, three times that. This is part of what you do in business. If you -- and if you didn’t do it, you would be sued.
STEPHANOPOULOS: But doesn’t this increase the pressure on Mr. Trump to release those taxes?
No presidential candidate in a generation has not released the taxes.
GIULIANI: Well, you know what it does do?
It actually suggests maybe why he doesn’t, because nobody understands the tax code and then they use it as if there’s something wrong here. This is perfectly legal and he was in a box. If he didn’t do it, he’d get sued. You --
STEPHANOPOULOS: So suggesting he doesn’t want people to know that he didn't pay federal taxes?
GIULIANI: If you give me -- if you give me your money, right?
If you give me your money and I start a business and there are five deductions available to me and I say, well, I’m not going to take advantage of two of them because it may make -- may make me look bad when I’m running for president or something else, then you’re going to sue me for not taking advantage of that deduction.
And that is what happened here.
And it shows you what a genius he is, how smart he is, how intelligent he is, how strategic he is. I want that working for me. I want to see if he can produce these kinds of results for us --
STEPHANOPOULOS: But he’s not going to produce the returns?
GIULIANI: -- he’s going to produce the returns when the audit is finished so that everything is clarified, so that people can’t misinterpret what he did.
STEPHANOPOULOS: But the returns from 2002 to 2008 are not --
GIULIANI: And remember --
STEPHANOPOULOS: -- under audit right now.
GIULIANI: -- but remember, this man has been audited every year. Never once has a criminal charge been brought against him. Never once has he been accused of violating the law. He operates. He understands the law. He operates within it.
And he also understands, on the other side, how he can get sued if he doesn’t take advantage of these benefits.
I would rather have a person who understands the economy and is a turnaround artist than a person that is a failure, basically, as secretary of state.
STEPHANOPOULOS: Let’s move on to last night.
You saw -- we showed in the piece earlier Mr. Trump mocking Hillary Clinton and that bout with pneumonia, also questioning whether she was loyal to President Clinton in their marriage.
Is that a smart strategy?
GIULIANI: I didn’t see last night so I’m not -- I’m not -- I’m not sure -- I’m not sure about that.
But the reality is that she, at the end of the debate -- and I think "Saturday Night Live" last night captured it beautifully, when she said, oh, and by the way -- and then she mentioned the woman’s name, the model’s name. And then she made it appear as if Lester Holt had brought it up.
She had obviously been programmed to bring that up, so she brings --
STEPHANOPOULOS: But Trump took the bait, didn’t he?
GIULIANI: She brings up -- she brings up this woman. This woman goes back 20 years or so. She has a very unfortunate past. She was a driver in a bank robbery. She -- never mind all about her. But the reality is that that was something that she brought up. She brought that into this. She brought personal life into this.
STEPHANOPOULOS: But he brought it up every single day since then.
I’m asking was that smart?
GIULIANI: I can’t tell you whether it was smart or not, I think she’s the one who introduced it. And we’ll find out by who wins the election whether it was smart or not.
But I don’t think -- I don’t think I would’ve stood by for a personal attack. You want to bring personality into it, Hillary, and your husband has a history that he has and you have a history of attacking the women that -- the only women victims she doesn’t believe are the ones who say they were victimized by her husband.
And we have, I don’t know, 20, 30, 40?
STEPHANOPOULOS: You know, whenever this has come up in campaigns in the past -- you go back to 1998, during impeachment, House Republicans pursuing it -- they lose seats. Your own advisors, when you were thinking about running for Senate looked into bringing this up in the Senate race and said it would’ve been bad idea.
GIULIANI: Well, you know, I think it is a bad idea to focus on President Clinton’s personal life. That’s his personal life. It is not a bad idea to point out her hypocrisy. Her hypocrisy, if -- I mean, she’s attacking Donald Trump about how he deals with women.
Well, then, we have to respond by how she deals with women, which is to take money from governments that kill women, take money from governments that stone women, take governments -- take money from governments that have women who can’t drive cars -- not just money; millions and tens of millions of dollars from countries, in which women are treated like property and killed when they get raped.
And so now basically it’s don’t lecture me, Hillary, on feminism, because you’re a phony.
STEPHANOPOULOS: You suggested earlier in this week that Donald Trump might not go -- maybe shouldn’t go to the second debate.
GIULIANI: Did I really?
STEPHANOPOULOS: You did because you said it wasn’t fair.
But is he going to go?
GIULIANI: Of course, yes. No, there’s no question he’s going to the second debate. If I said anything to suggest the opposite, that is not what intended.
I probably wanted to point out that I thought the first debate was extremely unfair because the only time Lester Holt ever interrupted to correct people was to correct Donald Trump.
He was wrong about stop and frisk; everyone acknowledges now that he was wrong about it. Stop and frisk, by the way, ladies and gentlemen, was constitutional --
STEPHANOPOULOS: Which is not the way it was being done in New York at the time.
GIULIANI: -- that happens all the time.
I mean, if a person -- if a person does a home -- a search of your home and doesn’t follow the constitution, that’s unconstitution (sic). But doesn’t make unconstitutional. That makes it unconstitutional as applied.
Hillary Clinton knows that. OK, she fudged it. Lester Holt didn’t know it and he shouldn’t pretend to know it.
Now she misrepresented about TPP. She had said it was a gold standard and she said, no, I only suggested it was and I wasn’t really -- and she had a made a very definitive statement. He never corrected her.
STEPHANOPOULOS: So Mr. Trump will be there next Sunday.
STEPHANOPOULOS: Thanks for coming in.
GIULIANI: Thank you.
STEPHANOPOULOS: And we are joined by a big supporter of Hillary Clinton, her former opponent, Senator Bernie Sanders.
Senator Sanders, thank you for coming in again this morning. I want to start out with that big "New York Times" story on Donald Trump and his taxes. We heard Rudy Giuliani say it shows that Donald Trump is a genius.
SEN. BERNIE SANDERS (I), VERMONT: Yes, well, if everybody in the country was a genius, we wouldn’t, like Mr. Trump is and not pay any taxes, we would not have a country. I think it's outrageous and I think it speaks to one of the issues that Secretary Clinton is talking about, I have talked about.
We have massive income and wealth inequality in this country today. Rich are getting richer; almost everybody else is getting poorer. And yet billionaires like Donald Trump are able to manipulate the tax system so that they avoid paying federal income tax.
In addition to that, you got massive tax avoidance by large multinational corporations, $100 billion every single year.
So if Mr. Giuliani thinks that Mr. Trump is smart and all the rest of us are dummies because we believe in America, we believe in our kids, we believe in national defense, well, I think they have a very distorted view of the American people and what this country is about.
STEPHANOPOULOS: You can see that what Mr. Trump did, apparently here, according to the story, is legal, correct?
SANDERS: Right. Well, it may -- I don't know. But assuming that it is legal, what it tells you is you have a corrupt tax system, which says to ordinary people, you're supposed to pay your taxes. But if you're a billionaire, there are all kinds of loopholes that you can utilize that enable you, who may be a billionaire, not to pay anything in taxes.
You know, Warren Buffett reminds us over and over again -- and he pays taxes -- that his effective tax rate is lower than his secretary's. That is absurd.
And by the way, one of the differences between myself, Secretary Clinton and Mr. Trump, Trump even wants to make a bad situation worse by repealing the estate tax, which only applies to the top 0.2 percent, giving the very richest people in this country hundreds of billions of dollars in tax breaks.
Secretary Clinton and I believe that the wealthiest people in this country should start paying their fair share.
STEPHANOPOULOS: Some of Hillary Clinton's critics have been targeting comments she made at a closed-door fund-raiser back in February. I want to play them and then get your response. Here you go. She is talking about your supporters.
(BEGIN VIDEO CLIP)
CLINTON: They're children of the Great Recession. And they are living in their parents' basement; and so if you're feeling that you are consigned to, you know, being a barista or you know, some other job that doesn't pay a lot and doesn’t have much of a ladder of opportunity attached to it, then the idea that maybe, just maybe you could be a part of a political revolution is pretty appealing.
(END VIDEO CLIP)
STEPHANOPOULOS: Here is what Donald Trump tweeted about that.
He said, "Crooked H. is nasty to Sanders supporters behind closed doors, owned by Wall Street and politicians, HRC is not with you, making a direct pitch to your supporters."
How did you take it?
SANDERS: I took it exactly the opposite way. I think what she said -- and, by the way, during the campaign, we do have our differences. Secretary Clinton and I do disagree on issues.
But what she was saying there is absolutely correct and that is you got millions of young people, many of whom took out loans in order to go to college, hoping to go out and get decent paying, good jobs and you know what?
They are unable to do that. And, yes, they do want a political revolution, they want to transform the society. They want to make sure that, when they get out of school, they can get a job that pays them wages and salaries commensurate with the education they have.
I think that's a very important point and that is an issue that, as a nation, we have got to address.
How do we create good-paying jobs for people who have a decent education?
And one of the issues that Clinton is talking about is rebuilding our infrastructure, pay equity for women, raising the minimum raise to a living wage so, in fact, we can have decent paying jobs for all of our people.
STEPHANOPOULOS: A lot of your former supporters who say they want a political revolution are still holding back from Hillary Clinton.
What do you say to them?
SANDERS: This is what I say, George.
Look, we live in a tough world. This country faces enormous crises, as we do as a planet. And I would like people simply -- I'm not going to tell people how to vote.
Take a look at issue by issue. For example, climate change. A lot of young people are appropriately very concerned about climate change and what happens to our planet if we do not transform our energy system.
Compare what Donald Trump says to what Hillary Clinton says. Donald Trump is ignoring science. Trump thinks that climate change is a hoax. Clinton has a serious plan in order to transform our energy system.
Raising the minimum wage -- most Americans understand that a $7.25 minimum wage is a starvation wage. It's got to be raised to the living wage. That is what Secretary Clinton wants.
You know, I just spoke to her a few days ago. In the first 100 days of her administration, if she's elected, she intends to lay out a plan on climate change, lay out a plan on how we overturn this disastrous Citizens United Supreme Court decision which allows billionaires like the Koch brothers or Sheldon Adelson to buy elections. She wants to bring forth pay equity for women.
So I think if you look at Clinton versus Trump --
STEPHANOPOULOS: But, Senator, I think what the...
SANDERS: -- issue after issue after issue...
STEPHANOPOULOS: -- I think what the problem is, is that a lot of your supporters aren't necessarily looking at Clinton versus Trump, they're looking at Clinton versus Gary Johnson, Clinton versus Jill Stein, maybe thinking about staying home.
Do you agree with President Obama and the first lady, who said this week, a vote for anyone else but Hillary Clinton is a vote for Donald Trump?
SANDERS: Well, this is what I think. I think is that the evidence is overwhelming that the next president of the United States is going to be Hillary Clinton or Donald Trump. And I think if you're voting for somebody else in the sense of not surprising Clinton because she doesn't live up to all of your specifications or all of your ideas, I think, in a sense, it is a vote for Trump,
But I think also, take a look at Gary Johnson's record on the environment, on the economy. It is a very conservative approach, something that I think most of my supporters do not support.
STEPHANOPOULOS: Senator Sanders, thanks very much for joining us this morning.
SANDERS: Thank you, George.
STEPHANOPOULOS: Our Powerhouse Roundtable standing by with their take on debate week.
And we'll take a deep dive on what Vladimir Putin is up to this election season and is he backing Trump, hacking our voting systems?
We have an expert panel that includes former chess champ, Garry Kasparov, now a famed Russian dissident.
(BEGIN VIDEO CLIP)
LLOYD BENTSEN, VICE PRESIDENTIAL CANDIDATE: Jack Kennedy was a friend of mine. Senator, you're no Jack Kennedy.
UNIDENTIFIED MALE: Who am I?
Why am I here?
SARAH PALIN (R), FORMER PRESIDENTIAL CANDIDATE: Can I call you Joe?
JOE BIDEN (D), VICE PRESIDENT OF THE UNITED STATES: You can call me Joe.
PALIN: OK, thanks.
BIDEN: That's a bunch of malarkey.
PALIN: And why is that so?
BIDEN: Because not a single thing you said is accurate.
(END VIDEO CLIP)
STEPHANOPOULOS: VP debates almost always produce some memorable moments, but how much do they matter?
Well, this year, maybe less than ever.
With our partners at SSRS, we found that more than 40 percent of the country isn't sure who the running mates are. Only 64 percent say they're going to watch on Tuesday. And only 10 percent say it could have a major impact on their vote, far less than the presidential debate.
But this is a year of surprises.
We're going to (INAUDIBLE) all of them next with our Powerhouse Roundtable.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I mean this man is clearly unfit to be commander-in-chief.
UNIDENTIFIED MALE: Well...
UNIDENTIFIED FEMALE: He is a bully.
UNIDENTIFIED MALE: Shut up.
UNIDENTIFIED FEMALE: He started the birther movement.
UNIDENTIFIED MALE: You did.
UNIDENTIFIED FEMALE: He said climate change is a hoax invented by China.
UNIDENTIFIED MALE: It's pronounced Jina.
UNIDENTIFIED FEMALE: He hasn't released his tax returns, which means he's either not that rich...
UNIDENTIFIED MALE: She's wrong.
UNIDENTIFIED FEMALE: -- not that charitable...
UNIDENTIFIED MALE: Wrong.
UNIDENTIFIED FEMALE: -- or he's never paid taxes in his life.
UNIDENTIFIED MALE: Wronger.
(END VIDEO CLIP)
STEPHANOPOULOS: "Saturday Night Live's" debate. Alec Baldwin, Kate McKinnon, we're going to talk about all the fallout from the debate and that big story that's in "The New York Times" now on our Roundtable.
We're joined by our own Jon Karl and Cokie Roberts, John Heilemann from Bloomberg Politics, Roland Martin from TV One's "NewsOne Now," and Republican strategist Sara Fagen from CNBC.
Well, Jon, this hits right at the beginning of October. We heard Rudy Giuliani say that this shows Donald Trump is a genius.
How damaging is this story?
JONATHAN KARL, ABC NEWS CORRESPONDENT: I think it's very damaging. The Clinton team will go at this relentless. They will go at the un -- the inherent unfairness of somebody that wealthy not paying taxes.
But more to the point, they will go at this to portray him as a business failure -- a $900 million loss. They will say -- they will try to bait him and ridicule him with this and make that a point, as well.
COKIE ROBERTS, ABC NEWS POLITICAL ANALYST: And we're already hearing in anecdotal evidence from focus groups and rallies that people were upset at the idea that he might not pay taxes when he -- when it came up in the debate. And, you know, most of us, it goes out of our paycheck every week and so we are -- we are used to everybody paying taxes.
ROBERTS: And the idea that he didn't is very upsetting to people.
STEPHANOPOULOS: Seeing -- you're seeing this both from Rudy Giuliani this morning and Chris Christie talking about it, as well, saying it shows he's a good -- a good businessperson.
Is that just making the best of a bad situation?
Is -- could that possibly work?
Well, there's no doubt Donald Trump has
SARA FAGEN, REPUBLICAN STRATEGIST: Well, there's no doubt Donald Trump has paid millions and millions of dollars of taxes. And there's an easy answer to this, which is either to put out the tax returns, but then also to put out all the other taxes he's paid. And I do think voters are sophisticated enough to understand that he is a -- he is a good businessman and business people use the tax code to their advantage.
The -- the bigger problem is what Jon said, which is that perhaps this sheds a light into business practices which have, by some reports, really hurt people, and particularly in New Jersey. That's the bigger challenge, I think, for the Trump campaign.
ROLAND MARTIN, HOST/MANAGING EDITOR, NEWSONE NOW: George, is marijuana now legal in New Jersey and New York?
MARTIN: Christie and Giuliani are out of their minds. This does not play well with regular voters, to simply say, yes, he lost nearly a billion dollars, because here's the piece. There were investors in the business.
Were their pension funds. If there were pension funds, were they teachers, were they firefighters, were they police officers?
Did they lose money investing in Donald Trump?
They are crazy to think that somehow you can spin this and say oh, it's all great.
No. This is a problem and he's a genius?
MARTIN: It's not smart.
STEPHANOPOULOS: And John Heilemann, a pretty glaring omission in the statement from the Trump campaign overnight. They didn't say...
JOHN HEILEMANN, BLOOMBERG POLITICS: Right.
STEPHANOPOULOS: -- that he paid federal income taxes and the only information we actually have on the record about Donald Trump's income taxes are his 1978 and 1979.
STEPHANOPOULOS: He didn't pay income taxes. 1984, he probably didn't. The same for 1991 and '93.
HEILEMANN: Well, and it's the case even when Rudy Giuliani -- really -- Rudy Giuliani said that Donald Trump has been audited every year. We have actually no proof of that. We don't even have any proof that he's -- that his taxes are under audit currently. They have not produced any evidence to suggest that that's true.
This is a time management thing now, right?
There's fewer than 40 news cycles between now and election day. And we are going to see now, between today and the next presidential debate on Sunday, seven, basically, news cycles that are going to be consumed by Trump on defense on this question...
HEILEMANN: And the Clinton camp on offense on this question. And that is a terrible problem if you're behind in the election and that's what Donald Trump is.
STEPHANOPOULOS: And Jon Karl, this comes up on the -- on the heels of the debate. Almost every poll, including our own poll this morning, shows that Donald Trump lost that debate and then this Alicia Machad -- Machado story, every single day, right up into those early morning Tweets on Friday.
KARL: Yes. And, you know, you talk to Trump supporters, people in the inner circle, they were, of course, completely taken by surprise by these late, late Tweets on -- on Alicia Machado. And -- and one of them said, look, Hillary Clinton has cracked the code. He knows how to -- she knows how to needle him, how to bait him, how to get him involved in these -- in these -- in these detours.
None of them, of course, think this is a good idea.
And the big question is does Donald Trump himself realize how bad that debate performance was?
ROBERTS: And none of them think it's a good idea for him to be going after her marriage, either, which is the other thing he's doing. That's the other thing that's going to come up in these next news cycles that you're talking about, John, because that's where he's doubling down.
And, you know, for him to say she's not loyal, this is a man who's been married three times with -- with a, you know, a huge scandal when he left his first wife, or hadn't quite left her. And so it is, you know, just a crazy thing to do.
STEPHANOPOULOS: And, Sara, it seems to get to the question of can anyone, at this point, he's now on his third regime of -- of campaign managers -- can anyone control Donald Trump?
FAGEN: It -- it's very clear nobody can control Donald Trump. I think Kellyanne Conway has done very well managing this effort in the short time she's been there.
And Donald Trump was actually, I think, the day before the debate, the closest he had ever been in this election to actually getting toward victory. I don't think he was ahead, but he had -- he was doing well. He was starting to inch up, 43, 44 percent of the vote.
UNIDENTIFIED MALE: He clearly had movement.
FAGEN: He had huge momentum...
FAGEN: And this last week has been very problematic (INAUDIBLE)...
MARTIN: George, this is a guy who is completely unhinged...
MARTIN: -- and in the debate on Monday, she questioned his temperament. And he goes, oh, I believe I have a great temperament.
He has proven, over the last five days, that he doesn't and what she is going to say is you cannot put this kind of unstable individual in the Oval Office, making decisions for everyday voters.
He's just proven them right every Tweet.
STEPHANOPOULOS: And, John, we saw a pretty remarkable display from inside the Trump camp this week, people going anonymously...
STEPHANOPOULOS: -- suggesting things like he didn't go to his prep...
STEPHANOPOULOS: -- he didn't execute the plan we had. He, quote, unquote, "lost his nerve."
HEILEMANN: Yes. I mean look, we -- one -- one thing we know about campaigns in crisis is that they leak. And when the leaking starts...
HEILEMANN: -- and when the leaking starts, it's usually a sign that there's chaos. And all my reporting suggests that that's what the situation is in Trump Tower at this point.
No one is really in control. And it's not just that they continue control him, he obviously cannot control himself.
He has had some bad weeks in this campaign, in the general election, and almost all of them have revolved around times when he has decided to go after a public citizen, whether that's been Judge Curiel, the Khan family.
Now to go -- to go after this woman, a Latina woman, in a time -- at a time when -- I agree with Sara -- the day before the debate was when he was closest to winning -- putting into position to win the election.
But with the voters that he needs to move in order to win on the narrow path that he has, he did himself incalculable damage over the course of the week. I think it's, probably, the worst week of the campaign for him because of the level of intensity of interest in this week...
UNIDENTIFIED MALE: Right.
HEILEMANN: -- the focus on him, the size of the audience and the fact that he made it worse for himself every day after the debate.
We're still talking about it today, on Sunday.
FAGEN: This tax story is going to build, though.
No one is even...
HEILEMANN: Yes, I agree.
FAGEN: -- remember Alicia Machado by the end of this week.
HEILEMANN: I agree.
MARTIN: Oh, yes, they will.
STEPHANOPOULOS: -- where does it go -- where does it go next?
FAGEN: Clearly, somebody has an interest in putting out his tax returns. These things don't happen by accident. This is -- we are unlikely -- we are likely -- we're likely to see more of these documents released. And the only solution for Donald Trump at this point is to release all his taxes and if, in fact, he didn't pay income taxes, you would then calculate all the other taxes you've paid -- real estate, state taxes...
FAGEN: -- and property taxes and he has a very big tax bill. There is an answer to this for him.
STEPHANOPOULOS: But don't you see -- I mean it -- I think the chances that he's going to...
FAGEN: I'm not saying it's great...
FAGEN: That is the only solution.
STEPHANOPOULOS: But it certainly appears to me, Roland, that he made the calculation a long, long time ago that if you went back and looked at all of his tax returns over the last 18 or 20 years, you would show very, very little in money paid in taxes.
Who knows what it would show about income?
Who knows what it will show about charitable donations?
I don't think he can release them.
MARTIN: Well, one, he can't. His sons have already given us the answer. They said, well, you know, it's a lot of stuff in there. People in -- people are going to be asking questions.
MARTIN: This is a guy...
ROBERTS: And they will (INAUDIBLE).
MARTIN: -- who is saying oh, I'm appealing to you, white working class voter in Ohio, in Pennsylvania, Wisconsin, he's going to be proven, if he releases the tax records, that he's been a fraud, that he's been lying. And they're going to say wait a minute...
MARTIN: -- I thought you were our guy...
ROBERTS: -- and Tuesday...
MARTIN: -- you're just a rich guy like the rest of them...
MARTIN: -- getting over on the...
ROBERTS: She's going to keep finding white working class voters who have been stiffed by him. And that's the other thing that can really hurt him.
MARTIN: They should hit that harder.
HEILEMANN: Well, just...
HEILEMANN: -- and to go back to Cokie's earlier point, he now seems intent on talking about Bill Clinton's personal life and Hillary Clinton's alleged complicity in that. Again, available votes -- what does he need to do to win the election?
A lot of white suburban, college educated, Republican inclined women.
He did no good with himself last week with the Machado incident. And this issue is an issue the Clinton campaign is begging for him to raise, because there is no pool of voters -- of the voters he needs who are going to -- to whom that argument is going to be appealing. They are going to sympathize with Hillary Clinton.
The Clinton camp is like bring it on.
HEILEMANN: -- the second debate...
ROBERTS: -- and it...
ROBERTS: -- it does bring up all of his stuff, which, you know, remember, he's even said, when he was leaving Ivana, that American people sided with her and that he -- he was unable to do some things there because everybody was on her side.
Will he bring that all up again?
STEPHANOPOULOS: It does appear...
ROBERTS: Whose side will they be on?
STEPHANOPOULOS: -- it does appear, Jon Karl, that Donald Trump right now is doing the work for Hillary Clinton that she can't do with herself. She's had a real enthusiasm problem with younger voters, had a real enthusiasm problem with these Republican college-educated women. But if you look at the last week...
KARL: Yes. And -- and the challenge for Hillary Clinton has been putting forward a positive vision that will resonate.
KARL: So this has worked wonderfully. I mean she's -- she had this debate. She was able to debate him. I think -- I think that -- that she will continue to bait him on this issue of not just not paying taxes, but on the fact that he lost so much money...
UNIDENTIFIED MALE: Right.
KARL: -- what...
UNIDENTIFIED MALE: But the problem is that, you know, she needs to put something out...
UNIDENTIFIED MALE: -- that's going to resonate.
MARTIN: What the polls...
UNIDENTIFIED MALE: And she hasn't done that yet.
MARTIN: What the polls cannot measure -- measure still is intensity. And that is, the Gallup Poll showed that 76 percent of Republicans say they'll likely vote; 65 percent Democrat; 47 18-34.
What she has to do is deal with the intensity gap. She's going to Charlotte. She's going to be meeting with young black men today, because there was a 9 point gap between young black -- black men and black women.
But she has to still deal with that millennial issue. All the -- all these polls are great, but we cannot measure what will be that turnout on election day.
Will white voters all of a sudden exceed the last five elections?
That's why she'd better get real about this intensity gap.
FAGEN: And it's worth noting that Roland is right, intensity has been on Donald Trump's side this entire election. You look at most of the polling where these questions are asked...
FAGEN: -- you look at the Republican turnout, which does mean something...
FAGEN: -- there is intensity -- at least there was intensity on his side.
STEPHANOPOULOS: And I want to look ahead to the next debate, John -- John Heilemann.
UNIDENTIFIED MALE: Yes?
STEPHANOPOULOS: And we -- we're getting some statements from Donald Trump about what he's doing on the -- on the stump right now. People forget that this town hall meeting...
STEPHANOPOULOS: -- is exceptionally difficult to pull off attacks like that when you're getting questions from real voters.
HEILEMANN: It is a harder debate than the first debate in some respects, because you've got real voters asking questions. You've got the freedom to move outside, away from the podium, to be in the -- the same physical space with your opponent.
There's more debate prep typically that goes on around the town hall debate than around the podium debate. And the Trump campaign did virtually no traditional prep for the first debate. And I don't think they're equipped to do the kind of debate prep that any other presidential candidate had -- would do for this debate coming up, nor does Trump seem inclined to do it, because to answer your question, he thinks he won the first debate.
MARTIN: What happens if a size 12 or 14 woman stands up and...
MARTIN: No, no, no. I'm serious.
UNIDENTIFIED MALE: Yes!
MARTIN: What if a size 12 or 14 woman who's the average size in America stands and says, Donald Trump, I have two daughters and look at me.
Do you think I'm beautiful?
Do you think I'm fat?
MARTIN: -- question comes, Donald Trump is going to stand there with a deer in the headlights look and...
ROBERTS: -- there, Roland.
MARTIN: No, I'm going to say it, but...
MARTIN: -- but, no, no, but in this format, you have to answer that question. You have to answer to all that you've said in the past. That's going to be a problem for him.
STEPHANOPOULOS: And you can't dis -- you can't dis the questioners on this one.
MARTIN: No, you cannot.
Thank you all very much.
When we come back, our expert panel weighs in on how and why Russia is meddling with our elections and what can be done about it.
(BEGIN VIDEO CLIP)
CLINTON: There's no doubt now that Russia has used cyber attacks against all kinds of organizations in our country. And I am deeply concerned about this.
TRUMP: She's saying Russia, Russia, Russia. But I don’t -- maybe it was. I mean, it could be Russia.
But it could also be China, could also be lots of other people. And also could be somebody sitting on their bed that weighs 400 pounds, OK?
(END VIDEO CLIP)
STEPHANOPOULOS: Russia front and center in Monday's debate. And the FBI revealed this week that hackers have targeted voter rolls in more than 20 states.
So what is Putin up to?
Is he trying to help Trump hurt Hillary?
And what, if anything, can the U.S. do about it?
Our panel of experts on Russia and cyber security, including world chess champ Garry Kasparov, are up next.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Obviously, interference in the U.S. election process is a very, very serious matter.
UNIDENTIFIED MALE: We are doing an awful lot of work through our counterintelligence investigators to understand just what mischief is Russia up to in connection with our election.
(END VIDEO CLIP)
STEPHANOPOULOS: James Comey, John Brennan this week on Russian interference in our election.
Could they be hacking our voting system?
We want to talk about that now with our expert panel and begin with our chief Justice correspondent, Pierre Thomas, down in Washington this morning.
What exactly do U.S. officials know right now about this involvement?
PIERRE THOMAS, ABC NEWS SR. JUSTICE CORRESPONDENT: George, Homeland Security secretary Jeh Johnson has released a statement acknowledging what my sources have been calling an unprecedented level of hacking, targeting this presidential election cycle.
In that statement, Johnson confirms that malicious cyber actors have been scanning a large number of state systems that those actors in a few cases gained access to state voting-related systems.
We first reported that voter registration databases in 20 states have been targeted by hackers and that they actually got into the networks of four states, that hackers poked around and likely copied information.
But according to our sources and Johnson, they were not able to manipulate or change voter rolls.
But, George, the primary suspects, hackers tied to the highest levels of Russian government.
STEPHANOPOULOS: So what would the Russian government, why would they be doing this, is the question?
THOMAS: We have two answers.
One is just another form of identity theft to potentially make money through fraud.
But the deeper concern is that the Russians may have been trying to sow discord or doubt; in short to make Americans feel uneasy about the outcome of the election.
And while officials are less concerned that individual voting machines could be hacked since most of them are not connected to the Internet, the mere threat of hackers tampering with voter registration information is deeply concerning.
George, imagine if, in a the battleground state, there were a question about the voter eligibility of thousands of citizens.
STEPHANOPOULOS: Yes, and the officials are so sure, pretty sure, that Russia is behind it. Yet they refuse to say so publicly and formally.
THOMAS: The main reason, George, is that there's concern that it would be seen as helping the Hillary campaign.
But also there is concern that, if you call them out publicly, what do you do next?
What's your next move?
How far do you escalate?
STEPHANOPOULOS: OK, Pierre Thomas, thanks very much.
Let's talk about this now with our panel, including former White House counterterror chief, cyber security expert Richard Clarke; Congressman Adam Schiff, ranking Democrat on the House Intelligence Committee, Julia Ioffe, "Foreign Policy" magazine.
You've done extensive reporting from inside Russia.
And Russian dissident and former world chess champ, Garry Kasparov, the author of the new book, "Winter is Coming."
Thanks for -- to all of you for joining us.
And, Dick, let me begin with you and pick up where Pierre just left off there. Officials believe Russia is behind this, can't say so publicly because they are afraid?
RICHARD CLARKE, FORMER WHITE HOUSE COUNTERTERROR CHIEF: They are afraid to kick off a cyber war, where the United States is forced by public opinion, by congressional opinion to retaliate.
And if we retaliate against Russia and -- with a cyber attack of some sort, we could get into a spiral that would be a cyber war. And the United States is so vulnerable to cyber attack on our infrastructure, the White House doesn't want to start that.
STEPHANOPOULOS: But, Congressman, you and several of your colleagues have gotten briefings on all this, calls for more aggressive action?
REP. ADAM SCHIFF (D), CALIF.: Absolutely. I think it's very important to establish a deterrent because we're just seeing more and more of this, the hacking of our democratic institutions, the hacking of our voter registration databases. And those databases have no foreign intelligence value.
They are only valuable if your intention is to essentially prepare the cyber battlefield to make mischief in our elections. And I think that the Russians respect one thing and that's strength.
If they see an open door, that's an invitation to do more. I think we ought to begin naming and shaming them and work with our allies around the world, who also have been hacked and interfered with by the Russians.
STEPHANOPOULOS: Garry Kasparov, I see you shaking your head right here. And you say that Vladimir Putin is waging a shadow war?
GARRY KASPAROV, RUSSIAN DISSIDENT: Absolutely. For instance (ph), working for Trump, I can tell you from both my Russian and English phase (ph) books and Twitter. And there are real hackers and there are so many soft targets.
As was in the report, you know, you don't have to attack, you know, even on the state level. You just go to the battleground states, to municipalities. The hundreds of opportunities to create, you know, another (INAUDIBLE) situation across the country. And all Putin needs is just to create doubts about the validity of these elections and to give Trump another chance to spread chaos (ph).
STEPHANOPOULOS: You say trying to help Trump; is it about helping Trump or hurting Hillary?
I have heard it both ways.
JULIA IOFFE, "POLITICO" MAGAZINE: I think it's both and it's also about the grander message about undermining faith in Western institutions, about democratic institutions, about the stability of Western democracy writ large.
What we saw in 2014 when we saw this kind of use of asymmetrical warfare used in Ukraine, we finally saw Putin taking his domestic political methods international.
And we're finally seeing it reach American shores where you don't have to do all that much -- it's a leveraging effect, right -- you don't have to do all that much to project a lot of power for Americans to start thinking, wow he has the power to swing a whole election. He is a really powerful man.
STEPHANOPOULOS: That gets to an important point, Dick Clarke, the actual individual voting systems are too diffuse to really change the outcome of an election, but all you need to do, as they've been saying, is create some doubts about it, bout the legitimacy of the outcome.
CLARKE: Or not even that, effect the voting itself by dumping phony emails. You know, we're probably...
STEPHANOPOULOS: Phony emails?
CLARKE: So, they have already hacked and dumped real emails, they've established that they have real emails.
The second dump, which I expect will come in the next couple weeks, may have salted into thousands of real emails, forged or altered emails. How can you then prove that they are forged?
KASPAROV: Registration data bases. Somebody wiped out 100,000 voters in Ohio or in Florida, and that is enough, you know, just to create chaos across the country.
IOFFE: Or for people to say, you know what, we saw what happened in Florida or Ohio or Arizona, what else do we not know about? Have we just not uncovered the other meddling? Again, it's about doing a little bit to project a lot of power. And what you saw Vladimir Putin saying about two weeks ago, when all of this -- all of these rumors were circulating about his advisers about the hacking, he said very publicly, he said I hope this is a reflection of Russia's power on the world stage.
STEPHANOPOULOS: So, you're saying not naming and shaming is one option. What more can be done to protect these systems in the coming days and weeks?
SCHIFF: Well, I certainly encourage, as Secretary Johnson has states to reach out to the Department of Homeland Security to find out what are the best methods of protecting themselves.
But just to underscore what Dick said, they won't be able to change the outcome, they'll be able to sow discord by meddling with these voter registration databases.
What really worries me, what keeps me up at night is what they is done in Europe, which is the manipulation of data. If they have doctored, for example, those DNC emails to suggest illegality, not just embarrassment, it would be very hard to disprove the contents of those fake emails. They have used that approach before and they can be election altering.
STEPHANOPOULOS: Why would Vladimir Putin want Donald Trump to be in the Oval Office?
KASPAROV: He desperately needs Trump to be the president of the United States. Putin has been sliding steadily into pariah status after especially a release of the report of MH17, the Malaysian Boeing shot by Russian missile, carpet bombings of Aleppo, war crimes in Syria.
Putin needs not a friend, but someone who acts as an agent of chaos. And Trump, you know, for what he said, from the way he has been acting, it's an ideal (INAUDIBLE) for Putin to go after NATO, EU, to destroy institutions that are have been guaranteeing stability and order for decades.
IOFFE: And undermining their legitimacy and just sowing a lot of doubt. Again this is the kind of -- these are the methods that we have seen for Putin use for over a decade inside Russia: sowing doubt, creating -- spreading conspiracy theories.
By the way, Russian television, which is Kremlin owned, or Kremlin controlled, and is a direct reflection of what the Kremlin wants, has been very clear from very early in the primaries who they want to win. They have been very sympathetic to Trump, very, very critical of Hillary.
SCHIFF: And Trump has been doing, actually has been the most tremendous gift to Russian propaganda by coming out as he did during the debates saying could be Russia, could be China, could be a 400 pound man. That's exactly what Russia wants.
STEPHANOPOULOS: You have no doubt this is Russia.
SCHIFF: I have no doubt.
And I don't think the administration has any doubt. It's not a question of evidence, it is a question, I think, for the administration of, do they do more than name and shame? What are the repercussions are they playing into the Russian hands by sowing doubt? But the fact is the Americans already see the meddling and I think it would be far worse if there is a problem with the election and only after the election does the administration tell the American people, yes, the Russians were doing this and we knew it all along.
STEPHANOPOULOS: If you were in the White House right now, what would you be recommending?
CLARKE: I would be recommending we try to work with the states. There are a couple states that don't have paper ballots. They have machines where you push a button and that's it, there is no paper record. We need something as a backup so that in case the election does get messed up in some way, we can count paper votes.
STEPHANOPOULOS: OK, thank you all very much. Fascinating perspectives. We'll be right back.
STEPHANOPOULOS: And now, we honor our fellow Americans who serve and sacrifice. In the month of September, two service members died overseas supporting operations in Iraq and Syria.
We'll be right back.
STEPHANOPOULOS: And we will be here for all the action Tuesday night. I'm going to anchor our live coverage of the vice presidential debate with our team. That starts at 9:00 Eastern. Mike Pence versus Tim Kaine.
And of course next Sunday, seven days from now, Sunday night, the next Trump/Clinton debate, co-moderated by our friend and colleague Martha Raddatz. That's also at 9:00 Eastern.
And that is all for us right now. Thanks for sharing part of your Sunday with us. I will see you tomorrow on "GMA".