Trump battles self-made crises as markets tumble. TRANSCRIPT: 8/14/19, All In w/ Chris Hayes.

Mark Zandi, Joel Payne, Cornell Belcher, Vera Bergengruen

CHRIS MATTHEWS, MSNBC HOST:  I`m glad to see her out there making this

position clear as hell.  We Americans believe in the promise of good

Friday.  That`s HARDBALL for now.  “ALL IN” with Chris Hayes starts right







UNIDENTIFIED FEMALE:  A major sell-off here on Wall Street today.


VELSHI:  Stocks plummet on growing recession fears.


UNIDENTIFIED MALE:  When the curve inverts tens to twos bad things usually

happen regarding the economy.


VELSHI:  Tonight, what we know about what`s happening to the American

economy and what the President is doing about it.




VELSHI:  Then –


REP. NANCY PELOSI (D-CA):  Moscow Mitch says that he is the grim reaper.


VELSHI:  New reporting on the Kremlin ties to Kentucky as Democrats turn up

the heat on Mitch McConnell.  Plus, the growing calls for Donald Trump`s

Attorney General to recuse himself from anything having to do with Jeffrey

Epstein.  And new bipartisan outrage over Steve King.


UNIDENTIFIED MALE:  Rape and incest?  What were you trying to say, sir?


VELSHI:  As the congressman sets up another firestorm.


REP. STEVE KING (R-IA):  What if we went back to all the family trees and

just pulled those people out who was a product of rape and incest?


VELSHI:  ALL IN starts now.


KING:  Would there be any population of the world left if we did that?




VELSHI:  Good evening from New York, I`m Ali Velshi in for Chris Hayes. 

It`s been another day of crazy volatility in the Trump economy.  The Dow

Jones Industrial Average dropped more than 800 points.  That`s more than

three percent.  That makes it the biggest drop of this year.


The reason, investors are seeing signs that a recession could be on the

horizon.  And this man running this country, a man who constantly boasts

about his business talents, the man who would be responsible for navigating

the country through an upcoming recession is a guy who could not make money

in the casino business.  A guy who had to be put on a budget back in 1990

because of his inability to manage his own money.




UNIDENTIFIED MALE:  $10 million, of course, is a lot of money but it`s not

enough to cover Donald Trump for a full two years.  He manages to go

through more than a half a million dollars a month for just personal



So today when a group of banks came up with $20 million in loans to help

him through his business difficulties, they put him on a personal allowance

of sorts.  NBC Chief Financial Correspondent Mike Jensen tonight.


UNIDENTIFIED MALE:  DONALD Trump this morning after he signed for his new

loan.  As part of the deal, he`s been put on a personal allowance.  He`ll

have to scrape by on $450,000 a month.  Next year he`ll be cut back to

$375,000, and the year after that to $300,000.  By comparison in one recent

month, Donald`s spent $583,000 on personal expenses.


As for today`s events, Donald Trump says he made great deal, a fantastic

deal that his empire is intact and he`s running it.  But the bankers have

another story.  One of them told me in our view, he`s in bankruptcy but

instead of the courts presiding over a restructuring, we`re doing it.




VELSHI:  So this afternoon as the stock market was tumbling, President

Trump was definitely not panicking.  As the market was moving lower and

lower, Trump unleashed two tweets where he managed to brag about his trade

war with China, lie about the economy, blame the Fed and its chairman and

demonstrated clear lack of understanding about how global economies work.


“We are winning big time against China.  Companies and jobs are fleeing. 

Prices to us have not gone up and in some cases have come down.  China is

not our problem though Hong Kong is not helping.  Our problem is with the

Fed, raised too much too fast.  Now slow to cut.  Spread is way too much as

other countries say.  Thank you to clueless Jay Powell and the Federal

Reserve.  Germany and many others are playing the game.  Crazy inverted

yield curve we should easily be reaping big rewards and gains but the Fed

is holding us back.  We will win.”


I`m not going to read that again.  You`ll have to go to the tweet to

actually see that because it is a lot.  But to be fair, recessions happen. 

The United States has actually overdue for one.  But given the indicators

that a recession could be around the corner, why would the president

continue to exacerbate the situation?


His signature legislative achievement was huge tax cuts for corporations

and the wealthy.  Tax cuts that a study by the Congressional Research

Service found had little to no impact on the economy.  He continues to

escalate his trade war with China even after admitting that his tariffs

harm American consumers.


Politico reported before today`s big stock market dropped that, “Instead of

blaming a Fed, Wall Street economists are citing Trump himself as the

biggest anchor on markets and the economy.  A recession is the last thing

Donald Trump wants as he is up for re-election next year.


In fact, the last time the U.S. was in the middle of a significant economic

downturn back in 2008 when President George W. Bush was in office, that

recession worked against the Republican presidential candidate Senator John



Joining me now is someone who was right in the middle of that campaign Mark

Zandi, Chief Economic Advisor for John McCain`s 2008 Presidential Campaign. 

He`s the Chief Economist of Moody`s Analytics.  I`m also joined by Jennifer

Rubin Washington Post Columnist and an MSNBC Contributor, and John Harwood

Editor at Large for CNBC and host of the CNBC digital series Speakeasy with

John Harwood.  Welcome to all of you.


Mark, makes sense of what is going on today, not the president`s tweet.  I

won`t ask you to take on such a heavy lift, but about what happened that

has caused the biggest percentage drop on the market this entire year.



are coming to the conclusion that recession risks are uncomfortably high in

rising and the principal reason for that is the President`s tariffs or

trade war.  It`s doing a lot of damage to the economy.  Business investment

is flatlined since the trade war got going about a year ago, exports were



And what we learned yesterday was the global economy is now very close to

recession.  The German economy actually contracted last quarter.  The

British economy contracted last quarter, and China is also struggling.  So

the entire global economy including the United States is closer to

recession.  And I think investors are very panicked by it.


VELSHI:  Mark, in fairness we`ve had a long time since the last recession. 

It`s been more than ten years.  That`s longer – much longer than the

average.  It`s almost double the average.  And in theory, the average is

five years and nine months since 1945.  We`re at ten years and two months.


Why does the president not acknowledge these facts?  Why does the president

continue – last night I was on here talking about the number of times the

president tweets or says that this is the best economy America has ever

had.  He doesn`t – he doesn`t speak to this weakness at all.


ZANDI:  Well, no.  He`s going to – he`s going to have no options pretty

soon because – and I think it`s going to start resonating with him in with

the American people once it becomes clear that job growth is slowing to the

point that unemployment is going to rise, and we`re pretty close to that

point already.


I mean, we saw last year – I`ll just give you some numbers.  Last year,

average monthly job growth in the U.S. was about 225,000.  In the last

three, six months, subtracting from the volatility today, we`re down to one

140K, and if growth slows to less than 100, then at that point unemployment

will rise.


Once unemployment starts to rise, I think I`ve become patently obvious to

everybody including the president that the economy struggling and recession

risks are high.


VELSHI:  And Jennifer Rubin, this does cost political parties even when

they`re in a strong position.  It would cost a president who was in a

strong position.  At some point, this has got to be worrisome for

Republicans who can`t prevent a recession certainly but they could

certainly admonish the president to not make things worse on the global



JENNIFER RUBIN, MSNBC CONTRIBUTOR:  Yes.  I don`t think he can help making

it worse.  One of the reasons of course that the stock market is dropping

like a stone it`s because they figured out he really is a protectionist. 

He`s not involved in some fifth-dimensional chess to try to get the Chinese

to capitulate.  He really doesn`t know what he`s doing and he really is out

to I think remain at loggerheads with the Chinese for a very long time.


But Ali, you`re right.  For good presidents who have lots of other

accomplishments, a bad economy is going to be bad news.  Look at George

Bush 41.  He had just won a war.  His approval ratings were at 90, but the

economy went into a little bit of a dip.  He was voted out by Bill Clinton.


Fast forward to 2008.  The economy went into the toilet when George W. Bush

43 was in office and of course, the Democratic Party made hay out of that. 

And those were both presidents who had other accomplishments that they

could point to and were generally likable people.


The economy is really all Donald Trump has and he`s taken ownership of it. 

So his idea of blaming the Fed or blaming Democrats, I just don`t think

it`s going to fly.


VELSHI:  John Harwood, I have to say, you and I spent a lot of time trying

to make – as do Jennifer and Mark – trying to make economic concepts

accessible to people.  That tweet that the president sent out, you need a

Ph.D. on something to understand what he was talking about.


He was attacking kind of everybody in one fell swoop.  He`s talking about

Germany, he talked about the Fed.  The Federal Reserve, he wants the Fed to

continue to lower interest rates.  The Federal Reserve can use those

interest rates and lower them at a time when it needs to do so to you know,

to help the economy, to boost the economy a little bit.  Is there a danger

in the president pressing for interest rate cuts now?


JOHN HARWOOD, CNBC EDITOR AT LARGE:  Well, there`s a broader danger of the

president infringing on the independence of the Fed and making people

interpret Fed actions as being in response to pressure.  The belief that

the Federal Reserve is independent is an important economic asset for the

United States as part of the credibility of the United States government,

the United States economy.


Look, the reality is – and the key phrase in what Jennifer just said is he

doesn`t know what he`s doing.  Now, in most cases, the government can just

roll along despite the president not being interested in it or not knowing

much about issues.  But on tariffs which he can take action unilaterally

without constraint by Congress, he really has the opportunity to make this

economy stumble and fall into recession.


The expansion`s tend to end.  It`s been going on for about ten years now. 

It might stumble no matter what the president did, but he`s giving it a

shove with these tariffs.


VELSHI:  Mark Zandi, my producers made me swear that I would not use the

term inverted yield curve on the show so I`m not doing that.  But the

description of those three words, I`ve tried to describe to people to say

it is like – if you look at that, that`s the downturn in the – in the

graph before each of these recessions so that`s why we worry about it.


It is – it`s like a tornado warning.  It doesn`t tell you that a tornado

is going to happen.  It tells you the conditions for a tornado are present.


ZANDI:  Although this is a pretty prescient tornado warning.  I mean, in

the last 50 years, the yield curve has predicted every single recession and

it`s never falsely predicted a recession.  So you know, this is a pretty

strong signal.


Now listen, you know, there are arguments why this time may be different

but I`ll have to say, you know, look at my hairline.  I`ve seen a lot of

business cycles.  I`ve been through a lot of inverted yield curves.  Every

single time economists including me come out and say don`t worry, this time

is different, here are the reasons why.  So you know, I take everything –

take that all the grace off.


The other thing I`d say is look, even if the yield curve inversion isn`t

signaling recession, what it is surely signaling is a much slower economy

in 2020, and the economy is going to be vulnerable to anything else things

and go wrong.


And by the way, there`s a boatload of things that can go wrong.  Just go

look at China, go – you know, go look at the Brexit, go look at the VAT

increase the Japanese we`re going to try to implement, and that doesn`t

even count all the geopolitical you know, hot spots all over the world.  So

we are very vulnerable here.


Jennifer Rubin, we haven`t even gotten to the fact that Donald Trump

continues to tell everybody that everything`s fine with agriculture and

farmers in this country, and that the effects of trade are paid for by the

Chinese and not by Americans.  Tell that to a farmer in Iowa right now.


At some point Americans are going to – this is going to be laid bare for

them the effects of this trade war.


RUBIN:  That`s right.   And some people think the day of reckoning at least

for the farm community is coming up in fall is when they usually get all

the money after they`ve harvest their crops.  And if that doesn`t come in,

and they look at the welfare which is essentially what he`s giving them in

exchange for raising tariffs and making their markets inaccessible, I think

there`s going to be some real questions even in places that have supported

President Trump.


But just going back to the hated inverted yield curve for just a moment.


VELSHI:  Just on the record, I didn`t say it, right?  You all said it.


RUBIN:  You didn`t, you didn`t.  It was me.  It was me.  Tell your

producers.  What that signals is that people expect because of Donald Trump

the future looks hazy, the future looks scary.  And that`s when people run

into bonds because bonds are safe.  More demand will lower the yield on

those bonds.


So it makes sense with this president stirring up so much chaos, so much

uncertainty, that there would be a bit of a flight to bonds.  And frankly,

his pressure to keep cutting interest rates, a lot of people think Jerome

Powell did the right thing.  But frankly, if we hit a recession, we don`t

have that much to work with.  We don`t have that much to work with fiscally

and we don`t have that much to work with from a monetary policy.


VELSHI:  We`re not in remarkably strange – strong position at the moment. 

John Harwood, if you could using all your experience say hey, if you didn`t

do this, this is the stuff that you could do to try and not make the

situation worse.  What would that involve?


Would that involve figuring out a way to get to the end of this trade war,

at least look like there`s something going on there?  Would it be stop

badgering the Fed?  What does it look like?  What does success look like

here for the president?


HARWOOD:  Well, it would involve pulling back on some of these tariffs and

having a more rational approach to the trade war.  Remember, the president

gave away some of his leverage at the beginning of his administration by

pulling out of the trans-pacific partnership and alienating our allies both

in Asia, and in Europe, and Canada, and Mexico with all sorts of saber-

rattling about alleged economic misbehavior.


You`ve got to get allies together to confront China that the Trans-Pacific

Partnership was going to bring together 40 percent of the world economy. 

The president also is fixated on the bilateral trade deficit, how much

stuff we buy from the Chinese as if that is some sort of a negative in and

of itself, it is not.


If the president wants to focus on things like China stealing our

intellectual property, that —those are valid concerns, but you`ve got to

go about it the right way, not by slapping tariffs here and there, doing it

erratically undercutting your own negotiators which is what the president`s



I talked to Carla Hills who was a Trade Representative under a Republican

president, a cabinet member under a different Republican president who said

it is tragic the way this situation with China has been handled from the

very beginning.


VELSHI:  Thanks to the three of you, Mark Zandi, Jennifer Rubin, and John

Harwood.  We appreciate you helping us kick off tonight.  Still ahead, why

today`s new lawsuit against the estate of Jeffrey Epstein could be the

first of many.  The ongoing investigations after this.




VELSHI:  Breaking news in Philadelphia tonight where six police officers

have been shot in a standoff with a gunman who is now holed up inside a

house.  Police still describe the situation as active and ongoing and

officers are attempting to negotiate the gunman surrender.





tell you that I did not tell you is I have you know, some situation we are

worried about, potential hostage situation so we got to get this off, all





VELSHI:  All right, here with me now by phone NBC 10 reporter Aaron

Baskerville who is in Philadelphia reporting on this story.  Aaron, what`s

the update?


AARON BASKERVILLE, NBC 10 REPORTER:  Well, right, you just heard the

Commissioner talking.  He just came out about ten minutes ago gave a brief

statement and said he had to rush back to the scene.  Right now I`m near

Erie and Sydenham, north of Philadelphia.  We`re about two miles north of

Temple University.


And right now I`m staring at about 20 to 30 officers.  Some are taking a

defensive position behind cars, arms just kind of waiting for this

situation to die down.  What we know so far this all happened around 4:30

this afternoon.  They were serving a warrant for drugs at a house.  A bunch

of officers rushed inside that house, made it to the back of the house by

the kitchen and then all of a sudden they started taking on gunfire.


The Commissioner described officers jumping out of windows, jumping out of

doors to stop the barrage of fire to get away from it.  Other officers were

coming in the door as well taking on that gunfire.  As you know by now, six

officers have been shot.  The good news right now, none of those are life-

threatening.  They`re at two different hospitals out here in the North

Philadelphia area.


But the situation is ongoing.  The Commissioner describing this gunman

shooting out of the window, hitting the SWAT truck, hitting buildings

across the street.  I can tell you personally, I`ve been out here for about

three and a half hours.  I`ve heard at least 50 to 60 different gunshot.




BASKERVILLE:  It`s a quick volley of shots, seven to eight shots, then it

would die down for about five minutes, another seven to eight shots rapid

fire, died down.  I mean, where I`m standing out, neighbors were you know,

diving under cars, diving on the sidewalk, screaming, running.  As you can

imagine, a very, very tense situation and it`s still going on as we speak

right now.


VELSHI:  Can you give me some clarity as to what the Commissioner was

saying about a hostage situation?


BASKERVILLE:  Yes.  There possibly maybe some others inside that house

right now that he`s concerned about.  He wouldn`t go into detail at all. 

He basically said that comment.  I`ve got to rush back to the scene where

it`s going on right now.  He was outside the hospital at that point because

he`s worried about a possible hostage situation.


He would not elaborate.  We are believing that he is scared for some folks

that are still in that house right now.  I know nearby, there was a daycare

and about 80 kids were escorted out of a daycare that was nearby.


Parents, of course, were extremely worried that their kids were still kind

of basically holed up themselves in the daycare nearby.  I can tell you

that they`ve evacuated some of the homes where I`m standing but still,

where I`m at, there`s still this defensive position, still officers behind

car doors, behind the vehicles, and everybody is just waiting for this to



The Commissioner also said they attempted to talk to this guy several times

by bullhorn, by phone.  Apparently, he`s picked up the phone several times

but didn`t talk or make any comment.  So they are urging this guy to just

give up and so there`s no more injuries out here.


VELSHI:  What a story, Aaron.  Thanks for your coverage of this.  Aaron

Baskerville from NBC 10 on the phone with us from the scene in

Philadelphia.  All right, turning now to a new law that just went into

effect in New York State starting today.  Childhood victims of sexual abuse

can sue their perpetrators.


The law, the Child Victims Act applies to victims who were previously

barred from suing due to the statute of limitations.  The law gives victims

one year to file those cases starting today.  As of the close of business

today, 427 cases were filed pursuant to the Child Victims Act according to

a tally by NBC News.


The defendants in those lawsuits include the Roman Catholic Church, the Boy

Scouts, and the late Jeffrey Epstein.





he told me to do.  I was really scared.  I didn`t necessarily think that he

was you know, going to rape me.


UNIDENTIFIED FEMALE:  Did he hold you there?


ARAOZ:  Yes.


UNIDENTIFIED FEMALE:  Did Jeffrey Epstein rape you?


ARAOZ:  Yes, he raped me.  He forcefully raped me.  He know exactly what he

was doing.




VELSHI:  Today, that individual, Jennifer Araoz filed one of the first

civil lawsuits against the estate of Jeffrey Epstein saying he raped her

when she was 15 years old and alleging his co-conspirators groomed her for

sex when she was 14 years old as part of his sex trafficking ring.


The co-conspirators alleged in the lawsuit include Ghislaine Maxwell, Mr.

Epstein`s longtime confidant, and Jane Doe`s one through three who are

three unnamed household staffers referred to in the lawsuit as the

recruiter, the secretary, and the maid.  Additional civil suits against

Jeffrey Epstein`s estate are likely.


Meanwhile, despite his death, the criminal investigation into his alleged

co-conspirators is ongoing.  That criminal investigation by the Southern

District of New York is overseen by the Justice Department and Attorney

General William Barr.


Our next guest former U.S. Attorney Joyce Vance has called on Barr to

recuse himself with regard to the Epstein investigation.  Joyce Vance is

also an MSNBC Legal Analyst.  She joins us now.  Joyce, what`s the basis on

which you are calling for William Barr to recuse himself.


JOYCE VANCE, MSNBC LEGAL ANALYST:  So I should be clear Allie that I don`t

make the argument because I believe that Barr is actually going to recuse. 

I think the sad reality here is that he won`t.  But the reason he should

recuse is because he has both conflicts of interests.  Conflicts that he

has apparently decided don`t want recusal, but also those conflicts give

rise to an appearance of impropriety.


That means that people in the public can`t have confidence that he`s a

neutral decision-maker.  And when you have someone like that in a position

of control over an important investigation like the one into Epstein`s

death and the ongoing criminal cases, it causes the public to lose

confidence in the Justice Department.


DOJ has already stretched too thin.  We can`t afford to have any more loss

in its reputation and integrity.


VELSHI:  What`s the – what`s the conflict that you see that he`s got?


VANCE:  You know, he has a number of conflicts starting with the fact that

at his confirmation hearing.  He indicated that his former law firm had

done some work on behalf of Epstein and he would look into whether that

warranted recusal.  But also, Alex Acosta, his former colleague, the former

Labor Secretary was involved in the plea agreement down in Florida for

Acosta which has caused so much concern.  Their relationship certainly is

some form of a conflict.


And then we have this really curious family detail that the attorney

general`s father hired a very young Jeffrey Epstein when he was a college

dropout to teach calculus and physics at the prep school that he was the

headmaster of in New York City.


So even if these aren`t a formal recusal conflict issue, in combination,

they create such an appearance of impropriety.  The Attorney General should

have stepped away and let the Deputy Attorney General or someone else

oversee this matter.


VELSHI:  Republican Senator Ben Sasse has called upon the Department of

Justice to take that deal that was cut in Florida, the one that led up the

investigation into that, the reporting from the Miami Herald and rip it up. 

Tell me about that.  Is that even doable?


VANCE:  What really needs to happen here is a full-on investigation into

what happened and perhaps an investigation by the Office of Professional

Responsibility.  You can`t really be the government and rip up a plea

agreement down the road in the absence of very unusual circumstances –


VELSHI:  Because that affect your ability to make on our deals.


VANCE:  Well, it does.  And also the rules of criminal procedure very

strongly favor the finality of plea agreements.  So you can`t walk in down

the road a decade later and say I take it back.  But that doesn`t mean that

if you`re someone who`s engaged in criminal conduct that you can`t be

prosecuted in this case other federal districts or even by state



So it`s not like the government is without a way of dealing with the air

that was made in the plea agreement or would have been had Epstein not died

in prison.


VELSHI:  You know, usually prosecutors when you`re trying to get somebody

at the head of something work your way up.  You find people who are junior

to that person and get them to turn or get them to somehow testify.


Now, in this case, because Jeffrey Epstein is gone, we have been hearing

since day one that there are other people involved in this thing.  Does the

investigation that was underway with Jeffrey Epstein, does that die and

does that have to start again?  And why isn`t – why hasn`t something

happened already given that we do know that there are other people who are

consistently referred to by these alleged victims?


VANCE:  So in a federal case, when a defendant dies a criminal case the

prosecution comes to an end.  That`s true.  Even if Epstein had been

convicted at trial and the case had been on appeal and he and died on

appeal, the death of a defendant signals the end of that case.


As you point out though, Epstein was charged as a co-conspirator in a sex

trafficking conspiracy.  Presumably, that means that there are other people

out there who are criminally culpable conspirators.  And I expect based on

the statement made by the U.S. Attorney in Southern District of New York

that at the point where he believes he has sufficient evidence to convict

those co-conspirators, he intends to move forward even with Epstein no

longer in the picture.


VELSHI:  Joyce, thank you for joining us as always, Joyce Vance.  Coming up

next, new questions about Mitch McConnell`s role in lifting sanctions for a

Russian company that then invested millions into Kentucky.  That new

reporting after this.






SEN. MITCH MCCONNELL, (R) KENTUCKY:  Over the last several days, I was

called unpatriotic, unAmerican, and essentially treasonous by a couple of

left wing pundits on the basis of bold-faced lies.




VELSHI:  If there is one thing we know it`s that Senate Majority Leader

Mitch McConnell hates the nickname Moscow Mitch, a nickname he earned late

last month for his failure to bring bills to the floor that would protect

U.S. elections from Russian interference.  That moniker has spread widely

since.  Kentucky Democrats are selling all kinds of Moscow Mitch merch. 

There`s a new song titled Moscow Mitch from musician Ben Folds.  And today,

the speaker of the House picked up the nickname.




REP. NANCY PELOSI, (D) CALIFORNIA:  They sent our legislation to the

Senate.  Moscow Mitch says that he is the Grim Reaper.  Imagine describing

yourself as the Grim Reaper, that he is  going to bury all this





VELSHI:  But it`s not just Mitch McConnell`s unwillingness to protect

elections that have earned him the Moscow Mitch label.  Tonight, there are

new questions about McConnell`s role in lifting sanctions on a Russian

company that then turned around and invested millions in a massive Kentucky

aluminum project.


One of the reporters who wrote that incredibly detailed story for Time

magazine, Vera Bergengruen, joins us tonight.  Vera, thank you for being

with us.


It is a remarkable story.  It is a story of an industry that was going to

come to an economically

depressed part of Kentucky, northeastern Kentucky, promised great paying

jobs.  It made a lot of sense.  They were going to take big slabs of

aluminum, flatten them out and make them into cars and soda cans and things

like that. 


And then it turned out that the only person they could partner with was

Oleg Deripaska`s company, a Russian company, that was being sanctioned and

suspected for involvement in the Russian interference into the U.S.

election.  What happened next?



basically what happens is the CEO of this company ends up talking to his

lawyers saying I know it`s illegal to actually go and talk to them because

the sanctions are still on, but I think I`m going to take the risk and do

that.  So we reveal that he actually went to Zurich and met with Rusal when


sanctions were still in place.  He is careful to say they didn`t do any

negotiations, they were just talking.  And then a couple of – one day –

two days later, the – a senate push to actually block the sanctions from

being lifted end up being thwarted partly, because of the efforts of Mitch

McConnell.  And then the sanctions were lifted as they were meant to be. 

And, you know, three months later, this company invested $200 million in

this Kentucky aluminum mill.


VELSHI:  Ahead of the 2018 mid-term elections, according to your story, one

of Rusal`s long-time major shareholders, Len Blavatnik, contributed more

than $1 million through his companies to a GOP campaign fund tied to

McConnell.  So, this isn`t just speculative out there circumstantial stuff,

there does seem to be stronger relationship.


BERGENGRUEN:  Right.  But I think what our story really shows is that while

– you know, when you go Kentucky, you`re seeing the Democrats are, like

you said, they`re selling this merchandise.  There are these big billboards

kind of saying, you know, Russian mob money and blaming Mitch McConnell. 

But if McConnell hadn`t tried to block this push, the sanctions would

probably still have been lifted.  You know, European countries were really

putting a lot of pressure on the U.S.


And so what our story kind of shows is really why is it so easy for Russia

post the Mueller report, post everything, to have this kind of economic

influence?  You know, they`re using U.S. lobbyists, U.S. banker, U.S.

donations, all of that in order to kind of get their way.


VELSHI:  And soon after, again, from your story, soon after the Kentucky

deal was announced,

Lord Barker sent a letter to the governors of eight more U.S. states.  In

the April 18 note, he touted the benefits of the Rusal investment and said

the company was, quote, eager to evaluate other opportunities around the

country and your state in particular.


So not only did it happen, but in fact it`s touted as a success.  And I get

that.  I get why in an economically depressed part of the country, a CEO

who can raise that kind of investment to bring industry and good paying

jobs would take it.


What is Mitch McConnell`s response to this?


BERGENGRUEN:  You know, he said it had absolutely nothing to do with his

stance on sanctions, that he was just kind of following the Treasury

Department`s move, and that he had no idea it was going to benefit his home



We do know that afterwards, you know, the CEO of the company says that he

is a big fan.  You know, they`ve met afterwards.  But, again, what is

really interesting is that in Kentucky, the governor, Matt Bevin, ended up

kind of – he ended up investing $15 million of Kentucky taxpayer money as

well.  So there is a lot of people in Mitch McConnell`s state who are

really upset about that, because they say that they feel now tied to Oleg

Deripaska`s former – you know, his company, and that they feel that

they`re all somehow involved.


So, it`s really a tangled web in terms of how this deal came about.


VELSHI:  Vera, thank you for your thorough reporting on this.  Vera

Bergengruen of Time magazine.


BERGENGRUEN:  Thank you.


VELSHI:  All right, coming up next, despite having lowered the bar for

decorum befitting elected officials, Steve King still manages to trip over

it, now sparking bipartisan condemnation.


What he said, after this.




VELSHI:  He is a Republican congressman who has promoted Neo-Nazis,

repeatedly disparaged immigrants, and questioned what`s so offensive about

the notion of white nationalism.  And today he is suggesting that humanity

itself would not exist without rape and incest.


Congressman Steve King, Republican of Iowa, made the remarks while

discussing his push for a bill that would basically make all abortions

illegal, even in case of rape and incest.  Here is his reasoning.




REP. STEVE KING, (R) IOWA:  What if we went back through all the family

trees and just  pulled those people out that were products of rape and

incest, would there be any population of the world left if we did that,

considering all the wars and all the rape and pillage that`s taken place

and whatever happened in culture (inaudible) society, I know I can`t

certify that I`m not a part of a product of that.  And I would like thank

every one of the lives of us are as precious as any other life.




VELSHI:  I`ve heard some weird arguments in my life, but that one`s



According to the Des Moines Register, King added, quote, “it`s not the

baby`s fault for the sin of the father or the mother.”


Now, Congressman King is not exactly new to this type of controversy.  As

you may remember, House Republicans stripped him of all his committee

assignments back in January after The New York

Times quoted him as saying white nationalists, white supremacists, western

civilization, how did that

language become offensive?


His latest comments prompted calls for him to resign from Congresswoman Liz

Cheney, the

chair of the House Republican Conference, as well as a slew of Democratic

presidential candidates starting with Senator Kirsten Gillibrand who

tweeted simply, “you are a disgrace.  Resign.”


NBC News tried to get King to clarify his rape and incest comments this





UNIDENTIFIED MALE:  NBC News.  John Voxley (ph) of NBC News.


UNIDENTIFIED MALE:  He`s got a call to make.


UNIDENTIFIED MALE:  Excuse me, excuse me.  Your comments, Mr. King, what

were you

trying to say?  What`s your point?


UNIDENTIFIED MALE:  He`s got a call.


UNIDENTIFIED MALE:  Your colleagues have talked about…


UNIDENTIFIED MALE:  He`s got a really important call.


UNIDENTIFIED MALE:  Your colleagues have talked about you resigning. 

They`re asking for your resignation.  What do you have to say, sir?  Sir?

What were you trying to say?  What was your point?


UNIDENTIFIED MALE:  He`s got a call here.


UNIDENTIFIED MALE:  Rape and incest.  What were you trying to say, sir 

What was your point?


UNIDENTIFIED MALE:  Thank you, thank you.


UNIDENTIFIED MALE:  What were you trying to say.  What do you have to say?






VELSHI:  Why did he clam up all of the sudden?


I`m joined now by journalist Laura Bassett who covers the intersection of

politics and  reproductive rights and has written for outlets including The

Washington Post, HuffPost and GQ.


Laura, I don`t even know what question to start with, but I will start with

this one.  Is Steve King, the view he articulated about this weird defense

of why abortion should be illegal in all cases, is that the mainstream of

Republican thought or is he an outlier?


LAURA BASSETT, JOURNALIST:  He`s – OK, so there is a couple of different

questions I think within your question, Ali.  And a lot of Republicans,

both the state level and the federal level, have argued that rape and

incest should not be exceptions to abortion.


What`s different here is that Steve King is using the opposite argument. 

Most Republicans, including famously Todd Aiken in 2012, say we don`t think

there should be exceptions for rape and incest because those situations are

so rare.  Aiken notoriously said women can`t become pregnant if it`s a

legitimate rape, because the body has a way to shut that whole thing down.


VELSHI:  Right, it`s the first time we had all heard the term legitimate



BASSETT:  The first – right, legitimate rape.  That was a Todd Aiken



Now Steve King seems to be taking the opposite logic here saying not only

is it common to have pregnancy result from rape, it`s normal, you and I

wouldn`t exist without it.  The entire human population wouldn`t exist

without it.


So he is essentially normalizing rape and incest, which it`s alarming and

bizarre.  I haven`t heard – I mean, Republicans have been stumbling over

themselves for years, trying to excuse their opposition to rape and incest

options.  This is a new one, though.


VELSHI:  Right, so to the extent that one could have an intellectual

argument about the fact that there has been a lot of rape and incest

throughout history and that hence some percentage of humanity is the

outcome of that, I`ve never seen those two put together as an argument for

abortion legislation.


BASSETT:  It`s baffling to me.  You would think Republicans would have

learned their lesson  by now.


VELSHI:  You would think.


BASSETT:  Talking about rape and abortion never goes well for them,

especially in an election  year.  It really backfires.  And that`s why

we`re seeing a lot of people in leadership, Republican leadership

especially, be really frustrated with Steve King right now.


VELSHI:  There is some polling from June and July of this year when we were

talking a great deal about abortion legislation in the United States, 27

percent of Americans think that abortions should be legal in all cases, 14

percent think it should be illegal in all cases.  And generally speaking,

when talking about all cases, we`re talking incest and rape.


Here is my question for you, Liz Cheney, not too many Republicans have

tweeted about

Steve King resigning, she is one of them.  She has done this in the past,

by the way.  But even when they stripped him of his committee

responsibilities earlier this year, I`ve been covering Steve King for

years, this stuff is not all that new.  It always ends up being kind of

remarkable that he thinks up a  new way of being offensive, but the idea

that he has been doing this goes back years.


BASSETT:  You`re right, Ali.  I`ve been covering him since 2010 as well. 

And he has been saying – he was always the crazy quotes in my articles

whenever I covered House hearings on abortion.  He has been saying the

craziest things for years. 


And we need to remember that as recently as 2016, he was the national co-

chair of Ted Cruz`s  presidential campaign.  This is not some fringe

Republican, this is a guy that has been embraced by very mainstream members

of the party.


And earlier this year, Republicans had a chance to expel him.  They had a

chance to formally  censure him, and they didn`t do either of those things. 

They stripped him of his committee assignments, which sure, it`s something. 

But he is still writing and voting on federal laws.


VELSHI:  Right.  And according to the Des Moines Register story quoting his

comments today, King said there was a plan for Donald Trump to criticize

him as well.  This is talking about when he  was pulled from his committee

assignments.  But he met with Trump and said there is no signal from Donald

Trump that he is anything other than supportive of me.


Now, we don`t know whether that`s true, but we haven`t heard from Donald

Trump that it`s not true.


BASSETT:  Well, Trump supports a lot of the things that Steve King says. 

Trump hasn`t condemned white nationalism very strongly.  A lot of his

supporters are the same people that elected Steve King.


Steve King denigrates immigrants, has compared immigrates to dogs, said

they have cantaloupe calves pulling drugs over the border.  I mean, Trump

has said a lot of these things and used a lot of the same language.  So, if

Trump does come out and condemn Steve King, it`s going to be because his

hand was forced by other people in his administration.


VELSHI:  I think it`s worth playing what Steve King said to Chris Hayes in

2016 apropos of what you just said.  Let`s listen to what he said about

western civilization.




KING:  Where did any other subgroup of people contribute more to



HAYES:  Than white people?


KING:  Than western civilization itself that`s rooted in western Europe,

eastern Europe and the United States of America and every place where the

footprint of Christianity settled the world.   That`s all of western





VELSHI:  That`s the language that white supremacists and white nationalists

do tend to use, that civilization came from Europe, America.  It carries

the flag for white culture and everybody else is kind of messing it up a

little bit.


BASSETT:  Yeah.  I used to work at Huff Post.  My colleague Chris Mathias

(ph) over there has been beating this drum for over a year now.  He wrote

the headline a year ago”Steve King is a white supremacist and he is still

in congress and he is not being kicked out.”  I mean, we`ve known this for

a long time.  This is nothing new.


VELSHI:  Laura, thanks for joining me tonight.  Laura Bassett is us tonight

on this story


BASSETT:  Thank you for having me.


VELSHI:  Coming up, many 2020 candidates are still fighting to qualify for

the next debate, prompting renewed calls for someone who drop out and run

for senate.  We`re going talk than ahead.




VELSHI:  The number of Democrats supporting a Trump impeachment inquiry is

ticking upward almost daily.  New Mexico Congresswoman Deb Holland is the

latest to join the ranks, and she will explain how she arrived at her

decision to my colleague, Lawrence O`Donnell, tonight on The Last

Word at 10:00 p.m. Eastern.  Right here on this show last night, California

Democrat Ro Khanna told me where he stands.




REP. RO KHANNA, (D) CALIFORNIA:  I support Nadler.  I support the

impeachment inquiry.  I haven`t gone on television calling for it, because

Nadler has a process.  And he has a timeline.  And I didn`t want to put

pressure on him based on that timeline.  He wanted to make sure we filed

the court hearing against McGahn.  He did that.


Now we`re in an inquiry and I support him on that.


VELSHI:  Does that mean you could be added to the 120?


KHANNA:  For sure if they want to.




VELSHI:  OK.  So Ro Khanna is added to the list and he`s on the list.  What

about Jerry Nadler?




REP. JERROLD NADLER, (D) NEW YORK:  This is formal impeachment proceedings. 

We are investigating all the evidence.  We`re gathering the evidence.  And

we will at the conclusion of this, hopefully by the end of the year, vote

to – vote articles of impeachment to the House floor, or we won`t.  That`s

a decision that we`ll have to make.  But that – that`s exactly the process

we`re in right now.




VELSHI:  So, Nadler and Khanna and Holland put it at 123.  The appetite for

impeachment is

clearly growing.  But the number that matters right now is actually 26. 

That`s how many days are left  until congress comes back from recess and we

get to see what they do with all this momentum.


But before then, the 20-plus Democrats currently running to replace Donald

Trump will find  out who has made the next debate.  The deadline to qualify

is just two weeks away.  Only nine candidates have qualified so far – Joe

Biden, Cory Booker, Pete Buttigieg, Kamala Harris, Amy Klobuchar, Beto

O`Rourke, Bernie Sanders, Elizabeth Warren, and Andrew Yang.


And with the field whittling down, there are renewed pushes for some of the

candidates to drop out of the presidential race and run for the senate in

their home states against potentially vulnerable Republican incumbents.


The New York Times reported yesterday that former Colorado Governor John

Hickenlooper, quote, “is giving serious considering to switching to the

senate race.”


A few days ago, the Houston Chronicle`s editorial board told Beto O`Rourke

he should think about doing the same writing, quote, “drop out of the race

for president and come back to Texas to run for senator.  The chances of

winning the race you`re now in are vanishingly small and Texas needs you.”


And earlier today, I asked presidential candidate and Montana Governor

Steve Bullock whether he is thinking about running for senate instead. 




VELSHI:  A lot of people don`t know you.  This is a hard slog to run for

president.  And there are a lot of people who when they get to know think,

wow he`d be great in the United States Senate.  They said that.



know, we`re going have a good candidate certainly to compete in 2020.


VELSHI:  So you`re not putting your mind to what happens in it`s not

president right now?


BULLOCK:  Yeah.  And I`d ruled out early on that I won`t be running for

senate.  We have good candidates.  I`ll do everything I can to make sure

that they win.




VELSHI:  I want to bring in two people who can help shed some light into

the challenges and choices facing these candidates.  My old friend, Joel

Payne, who served as a senior staffer for the 2016 Hillary Clinton

presidential campaign, and Cornell Belcher, a Democratic strategist and

pollster and an MSNBC political analyst.


Gentlemen, thank you for joining me.


Cornell, let`s start with you.  What is going through their minds?  There

are – got to be 15 of the

20-plus candidates who are saying, not likely to be the president of the

United States, or are they thinking if they can get to the ground in Iowa,

maybe something will change.  Maybe they`ll go from 2 percent to 20



CORNELL BELCHER, DEMOCRATIC POLLSTER:  What`s going through their minds is

I really want to be president.  And I`m special, but people really don`t

understand how special I am.  And when I get a chance to explain to them

how special I am, all this is going to change and I`m going to leap to be



But that aside, at some point, I think it`s fairly soon, if you`re not –

if you don`t make that stage in the next debate, your campaign`s over.  And

I think you`re already seeing pressure from a lot of the folks who are at 1

percent and sort of still staying at 1 percent, they can`t really put

together a real campaign because the money`s drying up.


I think there was – there was – there was pretty good fund-raising on the

first half of this, but I think you`re going to see money dry up and their

inability to put together a campaign in most of the

battleground states.


And if you don`t make that debate stage, you should pack it up because your

campaign is over.


VELSHI:  You know, Joel, when you think about prior races, there are some

people who got into the race who were not front-runners.  They may not have

looked successful and they turned tout be

either interesting candidates or relatively successful.  And there were

some people who were front-runners, or had that kind of status, that

suggested they were going to make it to the finish line and burned out



So, is there any sense in these candidates, as Cornell said, who think that

they`re special, in giving up any time soon or wait until January and

closing in on Iowa?



talking about two different things, right.  We`re talking about the

candidates and then their campaigns.


Their campaigns probably, meaning the advisers around them, have a very

strong sense of what reality is.  I think we`ve even seen from Hickenlooper

even before The New York Times reporting yesterday, his campaign had been

urging him to get out for weeks.  And we`ve even seen people like John

Delaney and others whose campaigns have been urging them to get out because

I think they understand the realities on the ground sometimes better than

the candidates.


But in terms of, you know, looking at Beto versus Hickenlooper and whether

or not they could

transfer this into a senate run, I think you`re looking at two completely

different situations.  Beto O`Rourke is probably not well positioned to do

that as much as people think.  M.J. Hegar is a pretty strong candidate. 

And I think John Cornyn is a different type of Republican for him to run



VELSHI:  He`s not Ted Cruz.


PAYNE:  He`s not Ted Cruz.  And he`d be running in 2020 when President

Trump is on the  ballot, and you`re going to bring out a lot of



John Hickenlooper is running against a very weak Cory Gardner, that`s a

different race all



VELSHI:  Let`s look at recent Economist/YouGov poll for the Democratic

primary.  You know, you can put up any of these polls, Cornell, they show

similar things – Biden, Warren, Sanders, Harris up there, Buttigieg

usually up there.  In this particular poll, it`s got Beto O`Rourke at 5

percent.  And then after that, you drop to 2 percent, and there are a whole

lot of people who are under 2 percent and

1 percent.


To your point that these people think they`re special, and by the way, by

many measures, they are.  They`re accomplished.  They`re interesting people

with some really good policy prescriptives.  But what they don`t seem to be

asking themselves is am I more special than someone else who I can get out

of the race and support?


BELCHER:  Well, you know, is it your time?  And certain candidates catch

fire because it`s their time. 


I had the fortune of working for – for a young senator from Illinois who

most people said

shouldn`t run and he – it was his time and he caught fire with hope and



If your are in the top five or six of the pack, you probably – there`s

still a chance for you, because the electorate is still very fluid.  And I,

here, again, David Plouffe`s voice in the back of our heads saying, you

know, it`s not a national race, it`s a state-by-state race.  And we pay a

lot of attention to these national polls where Biden`s running really far

ahead, but if you look at some of the state-by-state polls, you know, Biden

is in a dogfight and a tossup in a lot of these states and it matters who

wins Iowa, and it matters who wins New Hampshire and it`s really, really,

really going to matter who wins South Carolina.


VELSHI:  Joel, let me ask you, we were talking about the people who have

some standing, who might get out o the race.  Is there anybody you`re

sitting looking at who`s running at 1 or 2 percent at the moment in most of

these polls, who given the opportunity you think might break out?


PAYNE:  Oh, absolutely.  I think someone like Cory Booker is really well

positioned to break out.  He`s invested a lot in organization in those

early states, particularly New Hampshire and Iowa.  He`s got amongst the

strongest of any of the Democratic field.  And I think he`s somebody who

will benefit from a smaller field.  There`s so many people out there right

now I think it`s a little bit difficult for voters to discern between this

person versus that person, when there`s 25 people out there.  When there`s

10 people, eight people, I think someone like Cory Booker will benefit from



VELSHI:  Guys, thanks very much.  Great to talk to you both.  Joel Payne,

Cornell Belcher.


And that is ALL IN for this evening.  “THE RACHEL MADDOW SHOW” starts right

now.  Good evening, Rachel.






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