The Rachel Maddow Show, Transcript 5/17/2017 Manafort Subject of Federal Subpoena

Guests:
Sari Horwitz, Adam Schiff, Tim Weiner, Neal Katyal, Dan Rather
Transcript:

Show: THE RACHEL MADDOW SHOW
Date: May 17, 2017
Guest: Sari Horwitz, Adam Schiff, Tim Weiner, Neal Katyal, Dan Rather

CHRIS HAYES, “ALL IN” HOST: That is “ALL IN” for this evening.

THE RACHEL MADDOW SHOW starts right now. Good evening, Rachel.

RACHEL MADDOW, MSNBC HOST: Good evening, Chris. Thanks, my friend.

And thanks to you at home for joining us this hour.

I am – I am 44 years old. I know I look older. I`m 44 years old. Forty-
four years ago today when my beloved mother was struggling with a fat,
cranky, six-week-old baby me, she found something to keep her distracted
from how annoying I was as a child. Because 44 years ago today in 1973,
the televised Watergate hearings began.

Starting today, 44 years ago, they ran live during the day, as the hearings
were happening and PBS ran them again at night, so you could catch them
twice.

When it comes to investigating the actions of the administration itself,
particularly when it comes to investigating the actions of a president,
everybody has recognized forever that there is a basic problem with the
idea of the president being investigated by his own appointees at the
Justice Department. And so, forever in the United States, there have been
special prosecutors appointed to investigate presidential scandals and
scandals that affect various presidential administrations.

In the Calvin Coolidge era, there was a special prosecutor for the Teapot
Dome corruption scandal. In the James Garfield era, there was a special
prosecutor for a weird Postal Service bribery scream I don`t really
understand but seems like it involved tons of money.

In Watergate in the `70s, there was a problem with this age-old special
prosecutor idea. There was a problem during Watergate with a special
prosecutor who Nixon brought in to work on that scandal, because in
Watergate, Nixon fired the special prosecutor. He told the attorney
general to fire the special prosecutor and he resigned in protest and told
the deputy attorney general to fire the special prosecutor. The attorney
general resigned in protest. He then told the deputy attorney general to
fire the special prosecutor, and the deputy attorney general resigned in
protest.

He finally got somebody else to fire the special prosecutor, who was
working on the Watergate scandal. And so, he did get rid of him. But
Congress was mad. Congress was really not happy about it. And they
eventually let Nixon install a new special prosecutor for Watergate, but
only on the condition that the Senate Judiciary Committee would sign off on
it with a majority vote if Nixon wanted to fire him, too.

And the Watergate hearings sprawled all through 1973, and Nixon resigned in
1974, and Nixon pardoned by his successor, Gerald Ford, so he couldn`t be
prosecuted. And by the time Jimmy Carter got in there as president, the
country felt ethics-wise, it was time for a hot shower. One of the big
post-Watergate reforms, was the Ethics in Government Act of 1978, which was
signed by Jimmy Carter.

And that actually changed the whole special prosecutor thing. It set
triggers for circumstances that would require the attorney general to
recommend a special prosecutor. It led a panel of three federal judges
pick who that special prosecutor would be. Jimmy Carter signed that law in
1978 and that law persisted for more than 20 years.

And everybody hated it. Everybody hated it. The first two special
prosecutor investigations happened in the Carter administration, one of
them was into whether Carter`s chief of staff was on drugs and the other
one was whether Carter`s campaign manager was on drugs. No indictments in
either case.

The special prosecutor law changed ultimately into the Independent Counsel
Law, they changed the name of it, changed it substantively a few times, re-
authorized in the `80s and once again in the `90s.

But you know what? The Democrats hated the way it was used against
Democratic administrations and the Republicans hated the way it was used
against Republican administrations. And the thing was in and out of court
all the time being challenged on substantive constitutional grounds.
Finally, in 1999, they killed it. They let it die.

And so, no, great. Everybody hated that. Everybody hated that way of
dealing with it so the Independent Council Statute, it died.

But there is still this underlying problem, right? There`s still the
underlying existential conflict of interest problem about what you do, how
you properly handle it when there needs to be an investigation of the
president.

If the Department of Justice is what investigates scandals, how can the
Department of Justice, whose leader is appointed by a president possibly be
trusted to get an investigation of that president done properly? Get it
done right and true?

It`s not a partisan problem. It`s not a modern problem. It`s an original
problem, right? It goes back to Teapot Dome and before that. That
original problem still stands.

Well, when the special prosecutor became the Independent Counsel Statute
when that was left to die in 1999, the attorney general at the time was
Janet Reno. Remember, she was attorney general through the whole duration
of the Clinton presidency. Her deputy attorney general was Eric Holder.
And under Janet Reno and Eric Holder`s leadership at the Justice Department
in 1999, after the Independent Counsel Statute went away and the idea of an
independent counsel was excised from American law, they had to put
something in its place.

So, in 1999, under the leadership of Reno and Holder, the Justice
Department promulgated its new regulations for how to handle that enduring
problem about presidential scandals and who can rightfully investigate
them. They wrote those regulations in 1999 and those other regulations
that today allowed us as a country to finally be sure that the
investigation into the Russian attack on our election and the prospect of
the Trump campaign was in on it is an investigation that will not be
carried out by Trump appointees.

And that origin story is important. Not – I will admit the part about my
mom and me being 6 weeks old is not important. But that origin story of
how we got the power to do this thing that happened today, it`s important.
It`s important to know that this thing that happened today comes from a
Justice Department regulation.

The Justice Department has these regulations. The Justice Department has
the power to do this on their own. Because this special counsel that was
appointed today, it happened within the Justice Department. It`s a
decision that was made by the newly appointed Deputy Attorney General Rod
Rosenstein. He is the one who signed this order naming former FBI Director
Robert Mueller as the new special counsel. The order spelling out the
terms of his remit and what he will be investigating.

And you know what? The White House was not even notified that this was
happening until a half hour after the order was signed. Gone are the days
when the president appointed the special counsel.

Now, the attorney general, Jeff Sessions, has said he has recused himself
for matters involving the Trump-Russia investigation. That recusal is now
very much in question because of Jeff Sessions admitted role in the firing
of FBI director, James Comey, who, of course, was leading the Trump-Russia
investigations in the FBI.

But this order today, this order tonight to hand over oversight of those
FBI investigations, hand that over to Robert Mueller as a special counsel,
it didn`t come from Jeff Sessions. It wasn`t signed by Jeff Sessions, by
Rosenstein who says that in this matter, he was acting in his capacity as
acting attorney general on this issue.

So, we`re going to have more on exactly what that means and why that`s
important in terms of how much we should all trust that this is now going
to be an independent and capable, uninfluenced, unimpeded, real
investigation. We`ll have more on that coming up, in fact from a former
very senior former Justice Department lawyer who was personally involved in
drafting the special counsel regulations that made this possible today.
We`ve got that coming up this hour.

Now, in terms of why exactly this happened and why it happened today, we
don`t know exactly. We`re hoping to get some guidance on that this hour as
well. We`re going to be speaking tonight with one of the Gang of Eight in
this Congress. The Gang of Eight is the senior leadership in the House and
Senate and senior intelligence committee leadership. Those are the people
who get briefed on stuff when nobody else gets briefed on it.

We know the Gang of Eight was briefed tonight on what exactly happened
here, and we will be speaking with a member of the Gang of Eight live on
this program this hour.

As recently as five days ago, it was reported that Rod Rosenstein did not
see a need for a special counsel. He didn`t see a need to appoint somebody
to a job like this. He said he wasn`t inclined to change his mind on that,
unless, quote: The FBI investigation appears to be imperiled.

That was five days ago. Today, he apparently thought circumstances
warranted changing course on this.

We have learned tonight that Rob Rosenstein is due to give a classified
briefing to all members of the House of Representatives tomorrow,
specifically on the firing of FBI Director James Comey. So, in terms of
figuring out why Rosenstein named a special counsel today, why he went this
far, why he did it without telling the White House he was even going to do
it until after it was signed, what changed his mind about this?

Well, it`s possible what happened over the last week was enough, right?
It`s possible that the James Comey firing and what has emerged since that
firing a week ago in terms of the president`s public explanation about the
firing and allegation published yesterday by the “New York Times” director
Comey says the president told him to shut down the Trump Russia
investigation into Michael Flynn before he fired him and it`s possible it
pushed him into this special counsel territory for the deputy attorney
general, we just don`t know.

It`s also possible that what changed here is the progress of the
investigations and what they`re turning up and the magnitude of what
they`re turning up or the lack of magnitude of what they`re turning up. I
mean, in terms of the ongoing investigations, we know three investigating
committees in Congress have now requested public testimony from former FBI
Director James Comey.

Senate Intelligence asked from them, Senate Judiciary asked from them,
House Oversight Committee asked for hem. And we know that those committees
and more have also now demanded documents from the FBI and from the White
House pertaining to White House meetings, and communications that James
Comey might have had with not just the president but also the attorney
general and the deputy attorney general and even the people who served in
those positions before the transition, before Trump was sworn in.

So, the congressional committees we can see them operating in public,
right? We can see them demanding new testimony. The House Intelligence
Committee scheduled testimony with former CIA Director John Brennan. We
see them making demands for documents and all these document demands they
want in 72 hours, or they want a week from today, like we are seeing these
committees get into gear. Some of them might even find the clutch one day
and start to engage in forward motion but nobody guarantees it.

At the FBI we know from public statements by the FBI that there is an
ongoing counter-intelligence investigation into the possibility that the
Trump campaign cooperated with Russia in its attack with the U.S. election
last year. We know that that investigation, that counter-intelligence
investigation will continue. But if you broaden the scope a little bit, we
believe there`s probably multiple investigations at the FBI and Department
of Justice.

NBC News reports tonight Paul Manafort, the former Trump campaign chairman
and Michael Flynn, the former national security advisor, are now both being
described as subjects of a criminal investigation. And that generally
technically means they are officially suspected of committing crimes. Both
men, of course, deny all criminal wrongdoing through their attorneys.

Now, we were first to air last night with the NBC News reporting that
financial dealings by Paul Manafort are now the subject of a federal
subpoena issued in a criminal investigation. This comes after previous
reporting that Michael Flynn related investigation has also been subject to
a federal grand jury subpoena. But with this new reporting tonight, NBC
News is broadening that out to report that both Paul Manafort and Mike
Flynn are the subject of multiple grand jury subpoenas and records request
in these criminal investigations which they are now subject to.

And, you know, whether or not you have strong feelings about the eventual
fate of Paul Manafort and Mike Flynn, to the extent that a real
investigation into the heart of the matter, right, the real investigation
into the president`s campaign, to the extent that a real investigation into
that will require testimony from cooperating witnesses who are in a
position to see and know what was going on – well, the former national
security advisor and the former campaign chairman being the subjects of law
enforcement pressure like this, that affects the odds as to whether or not
either of those men will ever surface as witnesses in any of these broader
investigations.

In terms of Mike Flynn, those adds get even better when you consider that
Flynn`s attorney has already volunteered that he wants to testify in
exchange for immunity, claiming he has a real story to tell.

So, here`s some questions tonight. Now that we know a special counsel has
been named by the acting attorney general has named by the deputy attorney
general to oversee these investigations, here`s some questions that I
think, actually think that we`ll be able to answer with the guest that
we`ve got coming for this hour tonight. I think they`re all answerable
questions and they`re all important as far as I`m concerned, at least as
far as I see this.

First of all, how will the appointment of former FBI Director Robert
Mueller affect the other investigations that are ongoing in Congress? We
really don`t know how much the various congressional investigations have
gotten done already. We do know they`ve been falling all over themselves
in the past 24 hours to get, you know, congressional testimony from James
Comey at least, to get documents from the FBI and from the White House.

Whatever you think about the protect of those congressional investigations,
does the appointment of special counsel change the prospects for those
committees in Congress of getting that testimony, getting those documents,
generally continuing their work. That`s question one.

Also, what happens exactly to the ongoing Justice Department and FBI
investigations? There`s the congressional investigations. There`s also
the law enforcement investigations. What happens to those Justice
Department and FBI investigations now that there is a special counsel?

Do they proceed exactly as they did before but now they just report up to
Robert Mueller instead of reporting up to Rod Rosenstein, the Trump
appointee? Or does Mueller`s special counsel role materially change how we
expect those investigations to proceed?

Also, what about the scope of this investigation that Robert Mueller has
been charged with. You have seen the remit by now in terms of the letter -
- the order that they published establishing this appointment.

All right. You`ve seen how they – you`ve seen how they describe it. The
special counsel is authorized to conduct the investigation confirmed by
then FBI Director James Comey and congressional testimony on March 20th,
including, one, any links and or coordination between the Russian
government and any individuals associated with the campaign of President
Donald Trump.

And, two, any matters that arose or may arise directly from the
investigation. OK, that`s what Robert Mueller has been assigned to do. As
soon as this order was announced, I started calling people to get advice on
whether this is the right remit, basically, whether this is, if you want a
robust, unimpeded investigation that is narrowly targeted enough to not be
out of control and not be running amuck, but widely enough scoped so that
it can get at the heart of the matter whatever the heart of the matter is.

I started calling around trying to get advice from people who are in a
position to know whether this seems like the right scope. I ended up
speaking with former Attorney General Eric Holder tonight. He told me in
his view that the second phrase in the order warrants the most scrutiny,
when this remit says any matters that arose or may arise directly from the
investigation.

So, check out coordination between the Russian government and Trump
campaign and any matters that rise directly from that. He suggests that it
could have said instead, matters that arise directly or indirectly from
that investigation. The special counsel could have had the option to get
permission from the attorney general to expand his remit if he felt special
circumstances warrant.

Is it clear, for example, that Robert Mueller may also investigate any
potential problems involving Jeff Sessions and his role in all of this? Is
it clear that his remit includes, for example, the firing of James Comey as
FBI director? So, that`s another question here. Is the remit wide enough?

And while that is a subjective view to a certain extent, here is a special
answerable question, if special counsel Robert Mueller feels that this
remit is not broad enough, if he feels he needs to expand his remit, if he
wants clause two2 to say matters that rise directly or indirectly, can he
request an expansion and who does he request it from? Answerable question.

Also, what resources does he have and who approves the resources?

We are told already that Robert Mueller is bringing with him to his job,
his former chief of staff from the FBI who`s been working with him in his
post-FBI life at a fancy Washington law firm. He`s also bringing somebody
else from that law firm with him into the special counsel job. Presumably
that means he has hiring authority on his own terms, in terms of who was
working with him on this investigation.

But how many people does he get to hire and who decides how many people he
gets to hire and who approves or is in a position to disapprove of his
funding and resource requests? Answerable question.

Anything else? Oh, yeah. When do we hear? Will the special counsel make
a public account of his investigation or does he now get announced, say,
I`ll do my best, and then he disappears for months or years, while we the
public and/or Congress are kept in the dark as to whatever it is that he is
doing.

I believe these are all answerable questions. We`re going to try to answer
as many of them as we can over the course of this hour.

Joining us now is Sari Horwitz. She`s a “Washington Post” reporter who
covers the Justice Department.

Ms. Horwitz, thank you very much for being with us on this busy night.
Really appreciate you being here.

SARI HORWITZ, THE WASHINGTON POST JUSTICE DEPT. REPORTER: Thank you for
having me, Rachel.

MADDOW: First of all, let me ask you if I`m asking answerable questions?
Do we know enough how it works in practice and how it`s supposed to work as
a Justice Department regulation to be able to answer these questions about,
for example, who gets to approve the resources? Does he get to expand his
remit? Whether or not this is a properly scoped investigation.

HORWITZ: Yes, those are good questions and mostly answerable. As you
know, this has been a huge day in Washington, huge news. The deputy
attorney general, Rod Rosenstein was under such pressure to appoint an
inspector.

You raised the question earlier about why today? And I believe it`s
because there is this meeting he has before the full Senate tomorrow where
this was inevitably going to come up because they had been putting pressure
on him to do this. And he chose Robert Mueller, who has so much integrity,
really respected by Democrats and Republicans.

And in answer to your question, he reports to Rod Rosenstein although he
technically reports to him because Rod Rosenstein is the acting attorney
general because Sessions recused himself.

But Mueller is really on his own. It`s his investigation. He`s leaving
his law firm to prevent any possible conflict of interest. He can bring in
a team of people, as you mentioned he`s bringing chief of staff. He can
bring in other people.

And he most likely will keep the FBI investigators who already are doing
the work. Those of us who have covered him over the years know he is very
serious. He`s not going to leak. There won`t be leaks out of this
investigation.

And he is not required, at the end, to present a public report. He is
required to present a confidential report to Rod Rosenstein, who Rosenstein
at that point can make it public.

You are not going to see Bob Mueller going out before the cameras, like
Comey did, doing a press conference on his own, releasing his own report.
That will not be what happens. But he will be working with people he
brings in or the FBI investigators already on the case.

MADDOW: In terms of the resource question, you made very clear that he`s
going to be making those requests to Rod Rosenstein.

My sense talking to people about Robert Mueller, his extraordinary long 12-
year tenure at the FBI and the sort of relationship that he has, the
political capital he has, my – at least it seems people I talked to today
that if he makes a resources request, unless it is insane, if he makes any
sort of resources request or even if he makes a request to expand the remit
of his investigation, he`s the kind of person who Rod Rosenstein both
politically and personally would have a very hard time saying no to.

Is that a fair assessment what that dynamic, how that dynamic would work?

HORWITZ: I think that`s exactly right, Rachel. I mean, I think that Rod
Rosenstein who formerly was a U.S. attorney in Baltimore and knows Robert
Mueller. Everybody in law enforcement sort of knows him and respects him,
I believe, from the people I`ve interviewed. I think that any request for
resources, if it`s reasonable, will go through. They`re going to be coming
up with a budget in the coming days for this investigation.

And although technically, Rod Rosenstein could fire Mueller, I don`t think
we`re going to see that happen. We would do know from the order that the
president, President Trump, cannot fire him. He can only be dismissed by
the attorney general. And Rod Rosenstein is acting in that role right now.

MADDOW: Sari Horwitz, this was very clarifying. Thank you for helping us
get through this. I hope you will come back in the days ahead as I
inevitably get confused how this works.

HORWITZ: I`d be glad to.

MADDOW: Thank you.

All right. Joining us now is Congressman Adam Schiff, ranking Democrat on
the House Intelligence Committee.

Congressman Schiff, I really appreciate you being with us tonight. I know
this is a very busy time for you.

REP. ADAM SCHIFF (D-CA), HOUSE INTELLIGENCE COMMITTEE RANKING MEMBER:
Rachel, I can`t hear you. I`m sorry, I had someone else talking in my ear.
But please go ahead.

MADDOW: Can you hear me now?

SCHIFF: I certainly can.

MADDOW: Great. We can sell cellphones together.

Congressman, let me say as a matter of introduction, I had said earlier in
the show that we expected Rod Rosenstein, the deputy attorney general, to
be doing a classified briefing on the firing of FBI Director James Comey
for the full House tomorrow. I think I was wrong about that. Actually,
he`s briefing the Senate tomorrow and he`s expected to be briefing the
House on Friday.

Is that your understanding?

SCHIFF: That is my understanding, yes. I think they were trying to still
finalize the House briefing on Friday, but I think that`s the case.

MADDOW: And that will be specifically on the matter of the Comey firing
rather than on the Trump-Russia investigation broadly or even now on the
question about the appointment of the special counsel?

SCHIFF: Well, I would certainly imagine that now that he has appointed a
special counsel, that will be the subject of discussion as well. But I
imagine members are going to have a lot of questions about the memorandum
that he wrote and what went into that and lead-up to the firing of James
Comey. I think those will very much be the topic of discussion.

MADDOW: Congressman, I know you are highly briefed on intelligence matters
as the top Democrat on the House Intelligence Committee. I also know you
cannot talk to us about any of the things you are briefed on even other
members of Congress aren`t allowed to know, let alone us as members of the
public. That said, with that being stated, do you have any insight that
you can share with us about why this happened now?

As recently as five days ago, the deputy attorney general, Rod Rosenstein,
had been indicating to the press that he saw no need for special counsel to
be brought in. He had – there had been reported the only way he would do
that if he saw the FBI investigation being impeded.

I don`t know if that reporting was definitely accurate five days ago but
makes me worried what triggered this decision for him. Can you shed any
light on that?

SCHIFF: Well, I don`t know how much light I can shed on that, except to
say that I spoke with the deputy attorney general last week and among
others, I urged him to appoint a special counsel. And the argument I made
with him was that it wasn`t that I doubted there were good career
prosecutors at justice, there were great many of them that are capable of
doing the investigation, but it`s not enough to be capable of doing it, it
has to be independent enough that the public will have confidence in any
decisions made at the end.

And I thought in the absence of independent counsel, in light of all the
problems at the FBI, with the DOJ, recusal of the attorney general himself,
the only way to have that confidence was with a special counsel.

He listened to me politely and heard me out. I had no indication he was
prepared to take this step. But I think it is a great step and I think
Mueller is a very good choice. And I would also underscore what you just
were talking about earlier, and that is, if he wants to expand the scope, I
think it`s going to be very difficult to say no to Bob Mueller. If he
needs resources, I`m confident they will give him the resources he needs
and we in Congress are going to make sure that he gets all the resources he
needs.

MADDOW: As an experienced prosecutor and investigator yourself, do you
feel like the scope of his investigations, the scope of his
responsibilities was appropriately defined? When you look at that order,
is that the way that you would have written it?

SCHIFF: I think it is plenty broad for the work at hand. If there`s any
question about something, whether it flowed directly or indirectly from the
course of his work, that`s something he could discuss with the deputy
attorney general. And again, it would be very hard to say no under those
circumstances. So, I think by virtue of the broad respect he has and
obviously the close scrutiny we and others are giving this, I think that he
will have all the discretion that he needs.

MADDOW: In terms of your own investigation at the House Intelligence
Committee and the other congressional investigations under way, do you
think that the appointment of the special counsel will slow those down?
Will change your expectations, in terms of what you get access to and when?

SCHIFF: You know, it won`t change in the sense that our investigation will
remain as important as ever. It will, I think, give a lot of us the
confidence there is someone in charge of overseeing the FBI that will not
be deterred and can`t be interfered with. But we`ll also have a new point
of contact.

We need to try to do everything we can so that our investigation doesn`t
somehow interfere with what the FBI and the department, through Mr. Mueller
are doing. So, to the degree that we can coordinate, we should and we
will. He will now be the person to coordinate with.

But I don`t think it will substantively impact what we investigate or how
we investigate it but it does give me a lot of confidence that in many
respects, the most important investigation will go forward unimpeded, and
that is the FBI investigation because they have resources we don`t. They
have a reach around the world we don`t, and there`s no substitute, even
with our best efforts for what the FBI can and must do here.

MADDOW: Congressman Adam Schiff, the top Democrat on the House
Intelligence Committee. Thank you for joining us tonight. I know you have
a lot of options in terms of whether and where to talk about these things.
Thanks for being here with us, sir.

SCHIFF: It`s a pleasure, Rachel. Thank you.

MADDOW: All right. We got much more to come tonight including what has
happened in Robert Mueller`s life since he left the FBI? It was an unusual
and controversial – slightly controversial decision when Barack Obama
decided to keep him beyond the end of his 10-year term. He kept him for
another couple of years for a very specific reason.

After his 12 years in the FBI came to a close, he has spent the time in his
post-FBI life in a very interesting way that may be very important in terms
of what`s about to happen next here. We`ll have that and more expert
testimony next. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Robert Mueller started at the FBI one week exactly before 9/11,
and then he served for ten years. After his ten years as FBI director were
up, by then, Barack Obama was president, and he asked him to stay on
another two years. He specifically asked him to stay on because the
Defense Department and CIA were both in the process of changing their
leadership at the same time, too, and the Obama administration reportedly
worried that would be too much turnover in too many key national securities
agencies all at the same time.

He got a unanimous vote in Congress to allow him to extend his tenure by an
extra two years, he stayed on an extra two years. He left in 2013.

Since he left, though, since 2013, since he was replaced by James Comey at
the FBI, Robert Mueller has been working for a law firm called Wilmer Hale,
but specifically he`s been working as the guy who gets called in after a
big deal organization makes a huge mess and they need somebody to come in
and sort it out and clean it up.

For example, 2014, the NFL botches its investigation into a domestic
assault by Baltimore Ravens running back Ray Rice. The NFL gives Rice a
slap on the wrist. They fail to uncover or depending on who you choose to
believe, they choose to ignore a video of the assault which proved way more
vicious than the league had initially let on. After it became clear that
the NFL`s in-house investigation and the league`s subsequent handling of
that incident was a disaster, the NFL hired Robert Mueller to do his own
investigation into the NFL`s investigation. It was his job to figure out
how the NFL blew it. That`s one.

Last year, it was the VW thing. Remember when they were outed for cheating
on their emissions, test? Robert Mueller was installed by a judge as the
settlement master in that case to fairly and transparently facilitate
billions of dollars worth of settlement discussions to hammer out payments
to Volkswagen owners.

He was selected for a similar role earlier this year when the airbag
company Takata was found to have cheated on their safety tests with
defective airbags being linked to lots of injuries and at least 16 deaths
worldwide. Wow, what a mess, what a terrible thing, call Bob Mueller, he
will sort it out.

Now, once again, Bob Mueller is being called on to function as an
independent party. But this time, he`s got as to quit his law firm job to
do it because this time, the former FBI director will be taking over his
old agency`s investigations into the current president of the United
States.

Joining us now is Tim Weiner. He`s our foremost modern historian of both
the FBI and CIA. He`s the author of “Enemies: A History of the FBI”. He`s
also a Pulitzer Prize winning intelligence reporter.

Tim, thank you for being back here.

TIM WEINER, AUTHOR, “ENEMIES: A HISTORY OF THE FBI”: Hello, Rachel.

MADDOW: What do you think when you first heard the news?

WEINER: I think the republic just got a chance of saving itself.

MADDOW: Really?

WEINER: Bobby Mueller, Bobby Three Sticks his agents called him.

MADDOW: What do they call him?

WEINER: Robert Swan Mueller III.

MADDOW: That`s why they call him Three Sticks?

WEINER: There are three important things people need to know about Bobby
Mueller. One, he was a marine. He was awarded the Bronze Star for Valor
for personally leading his troops under fire and rescuing a terribly
wounded soldier on enemy lines. He`s going to personally rescue this case,
I think.

Two, he took over the FBI, as you mentioned, September 4th, 2001. The
following week, he was in charge of the biggest investigation in the
history of the universe, leading 4,000 agents trying to find out what
happened.

MADDOW: Restructuring the FBI in the process. They moved all these FBI
agents, thousands of them into counter-terrorism and national security.

WEINER: People are not that worried about bank robberies at this point.

MADDOW: Yes.

WEINER: They`re worried about now what.

MADDOW: And he oversaw that shift.

WEINER: And when the president and vice president, Bush and Cheney, and
the head of the CIA, George Tenet, were flipping out and losing their moral
gyroscopes because of the fear and secrecy and ignorance of those times,
Bobby Mueller kept his cool. And it was Mueller and James Comey, who was
his boss at the time, the acting attorney general of the United States, who
went in and told Bush they had to stop spying on Americans with the NSA
program, that they had gone too far, Bush and Cheney and the NSA. They
said no to the president.

MADDOW: In terms of Mueller taking over here, there`s interesting
questions that we will see play out in real-time, in terms of what it
materially means to the investigations he`s now in charge with this special
counsel role. It seems to me that nobody leaves an organization as big and
as fraught as the FBI after 12 years as its director, nobody else served
that long other than Hoover without leaving some really big footprints.

How did he leave the FBI? How was he viewed in the FBI by current agents
whether or not there when he was there, how was his tenure viewed?

WEINER: A lot of respect. He`s a very rigorous person. He speaks with
precision. He would never gratuitously said a certain someone had been
extremely careless, which is not a federal crime, wouldn`t have let that
slip.

MADDOW: Right.

WEINER: And I talked to him at length about six months ago. He and Comey
get along great, but he wasn`t terribly happy about the way that played
out.

MADDOW: He wasn`t terribly happy about Comey`s behavior?

WEINER: That particular instance I think he thought was poor judgment.

MADDOW: OK.

WEINER: But they got along really well, having worked together for years.

MADDOW: Comey`s public statements about Mueller are glowing.

WEINER: Yes, and Mueller`s private statements about Comey are glowing,
too.

MADDOW: Hmm, OK.

WEINER: So, I think what happens now the FBI sticks with its counter-
intelligence investigation and Mueller looks at crime. He looks at money.
He looks at obstruction of justice.

The FBI is set up as an intelligence agency. That goes against spies and
is a criminal law enforcement agency. I think you have to divide the work
here.

The FBI stays on the counter intel part, Bobby Mueller rides to the rescue
to save the republic from criminal abuses of power and obstruction of
justice.

MADDOW: Tim Weiner is the author of “Enemies: A History of the FBI,”
Pulitzer Prize-winning intelligence reporter. Tim, thank you. I really
appreciate it.

WEINER: You bet.

MADDOW: Boy, was I glad you were able to come in here tonight.

WEINER: The way we get special counsels in this country is relatively new.
Regulations were written in 1999 in the Department of Justice after the
statute previously covered something called independent counsels was
allowed to die. We don`t have that many examples to look back on to see
how this special counsel thing usually goes. We`re trying to learn
everything we can now about how this process works, what happens next, what
the expectations are.

We have with us now, a person who knows the special counsel regulations
inside and out because he helped write them back in 1999 when he was top
staffer to the then-Deputy Attorney General Eric Holder. Joining us now is
Neal Katyal. He previously served as acting solicitor-general in the Obama
administration, also has been on the news lately as a lawyer arguing
against the president`s travel ban on behalf of the state of Hawaii.

Mr. Katyal, thank you very much for being here. I really appreciate it.

NEAL KATYAL, FORMER U.S. ACTING SOLICITOR GENERAL: Thank you, Rachel.

MADDOW: Is that a fair description you were involved in the writings of
these guidelines back in 1999?

KATYAL: Yes, I spent about a year and a half writing these regulations.
And they were written for exactly this kind of situation. I mean,
everything from our first lines of the special counsel regulations assume
the attorney general is compromised and they provide for the deputy
attorney general to take the place of the attorney general, then they play
out a way the special counsel will function with day-to-day independence
from the acting attorney general.

MADDOW: When you say day-to-day independence, can you just talk us through
what that`s really going to mean? I`m thinking about this announcement
that we got today from former Director Mueller that he`s bringing a couple
staffers from his current law firm. I`m thinking about him presumably
showing up at FBI headquarters or DOJ headquarters, I don`t know, trying to
get up to speed on the status of existing investigations.

What does he have to get approval for, or does he – based on you having
written these regulations, does he just operate on his own terms answering
to himself only unless something extraordinary needs to change?

KATYAL: No. He doesn`t get to answer just to himself. So, part eight to
the regulations require him within 60 days to submit a budget to the acting
attorney general and then the attorney general will decide on that budget.
And yes, he will meet with bureau agents and other people right away on the
investigation.

But, you know, if he takes a step and he`s required to notify the Deputy
Attorney General Rod Rosenstein whenever he`s about to take a significant
step, if that – if Rosenstein rejects that and says, hey, I don`t want to
do that. He has that power, but he`s got to then notify Congress.

And again, we wrote this anticipating something like this in which you
have, you know, frankly, a kind of spineless majority party in Congress
that`s not willing to serve as our Founders thought in check and balance.
So, that report has to be given not just to the majority members of the
Senate Judiciary Committee, but also to the ranking members on the minority
side. So, that`s Representative Conyers and Senator Feinstein. They would
get any report in which Rosenstein decided to overrule Mueller with any
significant step.

So, let me just under – let me underscore that and say it back to you to
make sure I`ve got it right.

If as Special Counsel Bob Mueller makes a request of the attorney general,
whether it`s about the scope of his investigation or resources or any other
matter that he needs to go to the deputy A.G. on, if the deputy A.G. says,
no, he has to tell Congress at that time?

KATYAL: He has to tell Congress. It`s not necessarily at that time. It
can be later, because there`s all sorts of law enforcement reasons why that
has to be delayed.

MADDOW: OK.

KATYAL: But he does have to do. And we also wrote the rules to say the
only way in which Mueller could be overruled is if he`s taking a step that
is against the established traditions and views of the Justice Department.
So, it can`t be like a just disagreement, like, hey, I don`t think the
evidence really gets you there or something like that, it has to be a very
serious violation. It`s a very high standard. That was proposed by a
bipartisan committee to us back in 1999 and it`s enshrined in the
regulations.

MADDOW: Can I ask you broadly what we should worry about here? Obviously,
a lot of people who have been concerned about the investigations being
protected from political pressure and from potential obstruction are
welcoming this choice not only in the abstract, but specifically welcoming
that it`s Bob Mueller who has been appointed to this job. Is there
anything that you`re worried about or you feel is not being adequately
addressed in the order in the way people are reporting this out thus far?

KATYAL: Yes, no. I think it`s – you know, look, Mueller is as good as
you can possibly get. And I think the regulations are written pretty
strongly. At the end of the day, you know, our founders gave us a system
the president does have, you know, the power to take care of the laws be
faithfully executed.

That means that he could order the dismissal of Mueller. And, you know, at
this point, you know, there`s very little that, you know, we`re only 120
days in, and there`s little that would surprise me in the days to come
given what we`ve seen. But it is important to note that, yes, the
president does effectively have the power to get rid of Mueller. It would
be a horrible disaster and perhaps, you know, the fall of the government,
but he does have that power.

MADDOW: Thank you. Neal Katyal, former acting solicitor general under
President Obama, a person who knows the special counsel regulations better
than nearly anybody else because he made them. Thank you for being with
us.

KATYAL: Thank you.

MADDOW: I know it`s not your favorite place to be. Thank you.

All right. We got much more to come tonight and actually because this is
our life now, new substantive breaking news has just happened in the last
couple of minutes. And we`ve got that next.

(COMMERCIAL BREAK)

MADDOW: Because no night is complete anymore without several new major
breaking news stories about the administration, just in the last few
minutes, we`ve gotten this new reporting from the “New York Times.”

Quoting from “The Times”: Michael Flynn told President Trump`s transition
team weeks before the inauguration that he was under investigation for
secretly working as a paid lobbyist for Turkey during the campaign. This
warning came about a month after the Justice Department had notified Mr.
Flynn that he was under federal investigation. Despite the warning, Trump
made Flynn his national security advisor anyway.

Flynn`s disclosure to the Trump transition was on January 4th. It was
first made to the transition team`s chief lawyer, Don McGahn, he`s now
White House counsel.

That conversation and another one two days later between Mr. Flynn`s lawyer
and transition lawyers shows that the Trump team knew about the federal
investigation of Mike Flynn far earlier than has previously reported,
putting a much finer point on the question of why they hired him and then
why they didn`t fire him until 18 days after the Justice Department came to
the White House with their proverbial hair on fire, saying your national
security advisor has a Russia problem?

They knew he was under federal investigation when they made him national
security advisor. Now, of course, we know he`s under federal investigation
in the probe into possible collusion between the Trump campaign and Russia.
NBC News reports tonight that he is described now as a subject of a
criminal investigation, meaning technically that he`s officially suspected
of committing crimes.

This “Times” story tonight also has some new details on the investigation
into Flynn. Quote, the pace of the investigations have intensified in
recent weeks with a veteran espionage prosecutor, Brandon Van Grack, now
leading a grand jury inquiry in northern Virginia that is scrutinizing
Flynn`s foreign lobbying and has begun issuing subpoenas to businesses that
worked with him and his associates.

“The Times” has reviewed one of the subpoenas. It demands all records,
research, contracts, bank records, communications and other documents
related to work with Mr. Flynn and the Flynn intel group. The subpoena
also asked for several records about a Turkish businessman who is close to
President Erdogan of Turkey. This is the man who paid Mike Flynn over half
million dollars for his lobbying.

This is the first time we have heard these details about this subpoena.
It`s also the first time we have the name of a prosecutor apparently
leading this investigation, and because apparently this whole thing was
cast by somebody who has absolutely no sense of what is too much on the
nose, we now know that prosecutor`s name is Brandon Van Grack, and he
specializes in espionage. What`s the muppet for that?

Despite knowing Mike Flynn was under investigation, Donald Trump made him
national security advisor with access to all the nation`s top intel
secrets.

Never a dull night. Thank God Dan Rather is here, host of “The Big
Interview with Dan Rather” on AXS TV. Dan is a veteran of covering
Watergate and much more.

I`m really happy to have you tonight, sir.

DAN RATHER, AXS TV: Well, thanks.

What a news night. What a news night.

MADDOW: Yes.

RATHER: Almost surreal and, of course, dangerous for the country.

But in the same token, I do think there is something reassuring about this.
You know, for most of the early stages of the Trump presidency, the
question begged, are we still a country of laws or have we become or are we
becoming a question of men and a man?

And today`s events with the appointment of this special counsel, special
prosecutor gives a resounding answer, we`re still – this is one of the
things that unites us. We`re still a nation of laws, not of men. And now,
facts are going to tell us what our destiny is and what our history will
be. Not Donald Trump`s version of anything.

Number two, these “Times” stories are big stories. Thank God for the
American press, “New York Times”, “The Washington Post” and others doing a
good job. Number one, this information about when they knew that Flynn was
under investigation for serious law breaking, they went ahead and appointed
him.

And as you alluded to, this raises anew the question what it is that Flynn
knows about Donald Trump and his campaign that Donald Trump wants to keep
hidden? Obviously, Flynn knows something. It may not be criminal. But if
it`s not bad news, if it`s not something criminal or corrupt, why are they
working so hard to hide it?

Number two, I think today shows us this is the day up until today,
President Donald Trump has had the ability to control almost every news
cycle. From this day forward, he no longer has control. And instead, if
you will, of being the hunter, he becomes the hunted.

And I think, you know, that`s extremely important to keep in mind. From
here on out, that`s the way – he can`t – he can`t control it.

Also, have I this question, Rachel. Maybe you`ve asked it before. You
know that meeting with the Russians in which they didn`t allow any American
photographers, only allowed Russian photographers. And there is some
controversy of what the president said or didn`t say.

Question, were the Russians taping that? Were they taping it? It is true
Putin said he`d give us a transcript. But where – if there is a tape,
let`s have it.

And speaking of tapes, now with Donald Trump, since he is on the offensive,
it`s put up or shut up time for him on the tapes he has alluded to about
his conversation with the FBI director. Either he has tapes or he doesn`t.
And if he has them, he`s got to come forward with them.

MADDOW: Dan, let me ask you about something that we heard tonight in very
blunt terms over the course of this hour. I talked with Neal Katyal, who`s
a former solicitor general. And I wanted him to be here because he was
part of drafting these regulations that gave rise to the special counsel.

It`s only been – they use this for Patrick Fitzgerald and the Valerie
Plame affair. But other than that, it hasn`t been taken out and driven
around very much. It just existed on paper.

I asked him if there is anything that he`s worried about and people ought
to be keeping in m mind, despite the fact that people are so reassured by
this appointment tonight. And he said, well, you ought to keep in mind at
the end of the day, if he wants to, the president can push this to the
limit and the president can fire this special counsel.

RATHER: He can fire him.

MADDOW: He can.

And he said in that, I believe if that happened, the way he put it, I`ll
paraphrase, that would probably lead to the fall of the government and that
would be terrible if that happened. But that`s still an option.

I am trying to recover from my failure of imagination for not being able to
anticipate a lot of the things that have happened in the last 110 days.
What do you think would happen if Trump went that far?

RATHER: It depends on when it happens. If it happens very soon, I think
he might very well get away with it. And here is why. Out there in the
country, particular in that part of the country that voted for Donald
Trump, all of these conversations we`re having, all of this television
coverage, up to today, we`ll what happens, really hasn`t penetrated, made
much difference.

And I would say this: if Donald Trump`s core support stays at, say, 38
percent, 40 percent, then he might very well be able to fire special
counsel, as your interviewee tonight, he has that power. But if Trump`s
poll ratings – and this is arbitrary on my part, if his poll ratings go to
30 or below, no, because the public reaction would be so strong.

Bottom line, if he does it in the next two weeks, three weeks, which I do
not expect, he could probably survive it for at least a while longer. But
make no mistake: in many ways, the dam broke today. Tomorrow morning is
different from any morning we`ve had so far in the Trump presidency. And I
repeat for emphasis, he is on the defensive.

But Donald Trump likes to fire people. He prides himself on I don`t care
what the reaction is. I want to fire.

And in answer to your question, I wouldn`t be too quick to say he couldn`t
fire the special counsel.

MADDOW: Dan Rather is the host of “The Big interview with Dan Rather” on
AXS TV, an American national treasure – thank you, sir.

RATHER: Thank you very much.

MADDOW: Thanks for being here.

Big nights like, this I`m really happy you can come in.

RATHER: Thank you.

MADDOW: Thanks.

All right. We`ll be right back with the other jaw dropping story we have
learned this evening. Stay with us.

(COMMERCIAL BREAK)
MADDOW: Obviously, the big story tonight is the appointment of a special
counsel to take over the Trump-Russia investigation. That news broke at
precisely 6:00 Eastern Time this evening.

At four minutes before 6:00 this evening, “The Washington Post” broke this.
Look at the headline. House majority leader to colleagues in 2016, quote,
I think Putin pays Trump. Literally, that is a quote from the number two
Republican in the House, Majority Leader Kevin McCarthy.

“The Post” tonight reports that he said in the U.S. capitol to other
members of Congress, including the House speaker last year, quote, there is
two people I think Putin pays, Republican Congressman Dana Rohrabacher and
Donald Trump.

Now this apparently reportedly happened on June 15th, 2016. And it`s one
thing for “The Washington Post” to report that you said that, it`s another
thing for them to say they heard the tape of you saying that.

The recording was listened to and verified by “The Washington Post.”

Continuing from their story, quote, some of the lawmakers laughed at
McCarthy`s comment. But then McCarthy quickly added, quote: swear to God.

House Speaker Paul Ryan instructed his Republican lieutenant to keep the
conversation private saying no leaks. This is how we know we`re a real
family here.

According to “The Post”, it is difficult to tell from the recording the
extent to which the remarks were meant to be taken literally.

For context here, this is about a month before Donald Trump secured the
Republican nomination. But there was nobody else really in the running at
that point. The day this conversation happened, both McCarthy and Paul
Ryan had met with the prime minister of Ukraine, who`ve been telling them
about this sophisticated propaganda tactics the Russians were using in
Ukraine and the way they were supporting specific populist politician.

Paul Ryan was talking about that when Kevin McCarthy brought up the Russian
hacking of the Democratic Party and brought up his comment that he is
pretty darn sure that Putin is paying Trump if he is paying anyone.
Somebody recorded the whole exchange, saved it for almost a year, and then
gave that reporting tonight to “The Washington Post.”

Spokespeople for Paul Ryan and Kevin McCarthy denied this ever happened
until “The Post” told them there was a tape. Then they said oh, in that
case, it was a poor attempt at a joke.

When NBC caught up with Kevin McCarthy this evening, he also said it was a
bad attempt at a joke. Maybe it was. We have only the transcript. We
have not heard the tape itself.

But someone there thought it was important enough they recorded it, kept
that recording for a year and then gave to it “The Post”, who published a
story about it at about the same moment we got a special counsel on the
Trump-Russia investigation, because that`s what the news is like these
days. It`s not a real news day unless there are two huge stories announced
within minutes of 6:00 p.m.

Sleep well. That does it for us tonight. We`ll see you again tomorrow.

Now, it`s time for “THE LAST WORD WITH LAWRENCE O`DONNELL.”

Good evening, my friend, Lawrence.


END



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