The Rachel Maddow Show, Transcript 8/22/17 Russia dossier

Barbara McQuade, Greg Stanton, Walter Shaub

Date: August 22, 2017

Guest: Barbara McQuade, Greg Stanton, Walter Shaub

RACHEL MADDOW, MSNBC HOST: I`ve never felt so much pain at the word cute
before, right? I`ve never actually thought of the word cute as something
that can inflict harm. But aw!


MADDOW: Yes. Thanks, my friend. Appreciate it.

HAYES: You bet.

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

We`ve got a big show tonight. The mayor of Phoenix, Arizona, is here with
us live in just a few minutes.

President Trump, of course, is in Phoenix, Arizona, tonight, despite
requests from local authorities there, including the mayor, that the
president please not make this trip, that he please not do this rally, not
in Phoenix, not now. The mayor of Phoenix is about to join us in a moment.
He is a Democrat.

But some of the news breaking tonight about the conflict over the
president`s Arizona rally really is not Democratic versus Republican
politics. It`s very much just Republican politics.

Republican politics sort of pushed to the max to the point where the former
chief of staff to the top Republican in the Senate, Mitch McConnell, his
former chief of staff is tonight issuing threats to President Trump that if
President Trump doesn`t back off what he`s doing to attack other
Republicans right now, he may find himself facing impeachment in the Senate
sooner rather than later.

Unnamed Republican sources are also making serious allegation to “The New
York Times” tonight that beyond the allegations already been investigated,
that the president may have pressured the FBI to drop its Russia
investigation. Beyond the existing investigation into whether or not the
president obstructed justice when he fired the FBI director to try to stop
the Russia investigation, unnamed Republican sources are telling “The New
York Times” tonight that the president may also have tried to block the
investigation into the Russia matter that`s being conducted in the United
States Senate by the investigating committees in the United States Senate.

In fact, these allegations tonight from these Republican sources speaking
to “The New York Times” are that those efforts by the president to
potentially obstruct those inquiries into that part of the Russia matter,
those efforts by the president may be continuing to night as we speak. So,
this is actually, I think, potentially a very serious turn in the ongoing
investigations into this president, into the Russia scandals that continue
to swirl around this presidency.

Now, in order to understand what`s going on here, though, the details of
this, I`m just going to – I`m going to lay out the story as “The New York
Times” tell us tonight. The details of this at first are going to sound
like a politics story. But if you wade through those beltway politics just
a little bit what you end up with very quickly looks like it may be a
brand-new problem for the White House in terms of potential obstruction of
justice by the president personally.

All right. So, here`s the story. The president tonight, as you know, has
gone to Phoenix, Arizona. Phoenix has a Democratic mayor who we`re going
to speak with in a moment. But the state also has a Republican governor
and two Republican senators.

Now, it is not an accident tonight neither the Republican governor of
Arizona nor the two Republican senators from Arizona are going to be
attending this event with the president. That is because those two
Republican senators from Arizona at least, they appear to drive this
president crazy.

Even before Arizona Senator John McCain blocked the last Republican effort
to repeal Obamacare in the Senate, the president`s hatred and disdain for
Senator John McCain had brought Trump close to political disaster with his
attacks against McCain, even targeting McCain`s heroic war record. So,
that`s McCain. He`s the senior senator from Arizona.

The junior senator from Arizona is Jeff Flake, who has been more
confrontational toward President Trump, than almost any other elected
Republican anywhere, including in a recent book where he`s highly critical
not just of President Trump, but he`s critical of himself and the
Republican Party for allowing Trump to become the party`s nominee and their

Since then, President Trump has repeatedly gone after Senator Flake, giving
him the schoolyard nickname Flake Jeff Flake, which is even a good name as
Trump nicknames go.

More substantively, he has been hyping a Republican Senate primary
challenger in Arizona who ran against John McCain in the last election
cycle and who wants to run against Jeff Flake in the next election cycle.
She lost quite badly to John McCain last year. It`s hard to tell at this
point whether she poses a real threat to Jeff Flake next year. But she is
expected to be at this rally with President Trump tonight in Phoenix, and
that comes after Trump has spent days now hyping her candidacy and taking
up her chances against Jeff Flake.

So, that is – I know that sounds like, you know, electoral politics,
right? Just beltway politics. That is the immediate political context,
the immediate political background of what`s going on in this story.

Mitch McConnell, of course, is the top Republican in the Senate. Whatever
you think about him as a politician, as a leader, as a Republican, Mitch
McConnell definitely does take seriously his own responsibility in the
Senate to help other Republican senators keep their seats, to help sitting
Republican senators fight off primary challengers, to win their general
elections against Democratic candidates, to fend off scandals that might
unseat them from their Senate seats, right?

At the very least, Mitch McConnell needs to keep 50 other Republicans in
the Senate so he gets to keep his job running the Senate. But also,
regardless of that math, he just habitually goes to bat for any sitting
Republican senator in order to keep them in their jobs.

Well, now that this Republican president has moved on from just insulting
one Republican senator in Arizona to now trying to unseat the other
Republican senator in Arizona, heading into this Arizona rally tonight, we
knew that Mitch McConnell was upset with the president`s behavior. We knew
that he was trying to undercut the impact of what the president is doing.

We knew that Mitch McConnell was going to try to sort of blunt the effect
of Trump`s screw Jeff Flake trip to Arizona by hosting his own Mitch
McConnell high dollar fundraiser for Jeff Flake this week.

We also learned today that a PAC associated with Mitch McConnell has
started running ads against that Trump endorsed candidate who is going to
run against Jeff Flake in the Republican primary next year.

And I know how this sounds. If you`re interested in partisan politics, if
you`re interested in interparty fighting and electoral politics and the
balance of power in the Senate and stuff like that, those are all
interesting details, right? This is an interesting story. This is an
interesting tale of intraparty fighting to follow.

But you only have to follow it that far before it jumps to a place that is
way beyond politics, because tonight in “The New York Times”, this little
politics story moved from interesting to uh-oh if you are the White House.

First, there`s that impeachment threat that I mentioned. A man named Billy
Piper is quoted by name tonight in “The New York Times.” He`s now a
lobbyist. Until recently, he was chief of staff to Senator Mitch
McConnell. And Billy Piper throws this threat in the president`s direction
tonight in “The Times.”

When you hear the threat, you`ll understand why it`s important that he
allowed himself to be quoted by name in making it. Here`s what he said,
quote: The quickest way for Trump to get impeached is for him to knock off
Jeff Flake and Dean Heller and be faced with a Democratic Senate.

Now, in a typical political fight, that would be the place where you would
give a little bluster, a little brush back. You don`t want to lose the
Senate, do you? With this president, a brush back citing basic Senate math
like that very quickly becomes a fairly credible threat of impeachment for
the president. And Republicans apparently are not afraid to say it,
including Republicans very, very close to the top Republican in the Senate
who controls what happens in the Senate, Mitch McConnell. So, there`s
that, the impeachment threat.

But here`s the worst part from the White House`s perspective. Apparently,
before Trump and McConnell stopped speaking to each other all together,
which is where they are at now, apparently, the last time they spoke, they
had what is described in “The Times” tonight as a, quote, profane shouting
match on the telephone. This reportedly happened on August 9th.

President Trump apparently placed the call from one of his golf courses and
he spoke with Senator McConnell directly. Citing Republicans quote briefed
on the conversation, Alexander Burns and Jonathan Martin at “The New York
Times” tonight report that there were two subjects that Trump and McConnell
screamed and swore at each other about on that call on August 9th.

Number one was who is responsible for Republicans failing to repeal
Obamacare. OK. Got it. We knew they were fighting about that already.

But the other subject they apparently screamed and swore at each about was
something very different. I think I`ll quote to you direct think from “The
Times.” Quote: During the call which Trump initiated on August 9th from
his New Jersey golf club, the president accused Senator McConnell of
bungling the health care issue. Quote: He was even more animated though
about what he intimated was the Senate leader`s refusal to protect Trump
from investigations of Russian interference in the 2016 election. Again,
that`s according to Republicans briefed on the conversation.

So, in a call that is described as devolving into a profane shouting match,
the president is reportedly berating and screaming and swearing at the
majority leader in the Senate because the senator hasn`t protected him from
the Russia investigations that are being carried out under his purview by
various committees in the Senate. This is according to multiple Republican
sources who were briefed on that reported conversation between Trump and
McConnell on August 9th. The reason that is very, very important and not
just a salacious detail about famous people yelling at each other, the
reasons that potentially a big uh-oh for the White House here is because
the criminal concept of obstruction of justice applies not only to law
enforcement, i.e., FBI investigations, it also applies to efforts to
influence, obstruct or impede the due and proper exercise of the power of
inquiry or investigation as being had by either House in Congress or by
either committee in either house of Congress.

And if that sounds wordy or arcane as language, it`s because in reading
that, I am quoting the language of the criminal statute that defines
obstruction of justice and makes clear that obstruction of justice as a
crime, as a criminal matter, that applies to efforts to impede or pervert
or pressure investigations not just by cops and prosecutors, by the FBI, it
also applies to efforts to impede or pervert or obstruct congressional
investigations. Now, we`re going to have some expert advice on that in
just a moment.

But remember how we got the special counsel investigation of this president
in the president. I mean, where the Bob Mueller special council
investigation came from was not just allegations about Russian interference
in the last election. It was not, you know, Trump administration figures
constantly being caught lying about their contacts with Russians, things
they initially denied but then later had to admit to. None of that was

The reason we got the Bob Mueller special counsel investigation was because
the president fired the director of the FBI, and that firing followed
credible allegations that the FBI director was fired after he refused to
accede, to pressure from president that the FBI should drop the Russia
investigation. If the president has also been or is also now pressuring
the leader of the Senate to drop the Russian investigations that are under
his purview in the Senate, then that`s not just personally driven political
gossip. That`s a big deal.

I mean, particularly, if he`s been pressuring the Senate leader to protect
him from these Russia investigations and McConnell has not been doing that
to president`s satisfaction and now, in response, the president is
politically punishing Mitch McConnell for not going along with his
pressure. And this part of it is not secret cloak and dagger stuff. I
mean, if this August 9th phone call that is reported in “The New York
Times” tonight, if this happened the way these Republicans sources say it
happened, if the president was berating Mitch McConnell on August 9th,
berating him and swearing at him over McConnell not protecting the
president from the Senate Russian investigations, if that`s true, well,
look what`s happened since that call happened.

Starting August 9th, the president has been using his Twitter feed
repeatedly to attack Senator Mitch McConnell by name. The day after the
reported call, on August 10th, the president gave availability from his
golf course in New Jersey where he suggested that perhaps Senator McConnell
should resign as the leader of the Republicans in the Senate.

Now, tonight, less than two weeks later, the president is in Arizona trying
to inflict maximum political pain on Senate Republicans in direct political
conflict with Senator Mitch McConnell. It`s one thing if that`s just
politics. It`s interesting, but it`s politics.

If instead, this is the president politically punishing Mitch McConnell for
McConnell refusing to accede to the president`s Russian demands, then this
will likely open a new front in the investigation of potential obstruction
of justice by the president.

Now, the Russia investigations that are happening in the investigative
committees in the Senate, those investigations as far as we can tell, are
full steam ahead. Today, the Senate Judiciary Committee took what is
reported to be many hours of testimony from the head of the political
research group behind the infamous dossier of alleged Russian dirt on
Donald Trump. That dossier was reportedly handed over to the FBI last
year. It was published by “BuzzFeed” in January. It has been the source
of a lot of controversy.

Glenn Simpson is a former investigative journalist for “The Wall Street
Journal.” He was interviewed by Senate Judiciary staff today for ten
hours. There`s one report tonight that he handed over as many as 40,000
documents to the committee. Again, Fusion GPS, his outfit, is the group
that ultimately commissioned that dossier and he just handed over 40,000

The leader of that committee is Republican Senator Chuck Grassley. And
we`ve talked about here on the show the fact that Senator Grassley in the
past has made an effort to try to undermine the dossier by attacking its
origins and attacking Fusion GPS. So far, those efforts have really been
to no effect.

But today, ABC News reports that the man who actually created the dossier,
not the guy who, you know, commissioned it and arranged for payment of it,
the former MI-6 officer in Britain who collected the intelligence, who
contacted the sources, who wrote up the dossier in the first place, the man
who was hired by Fusion GPS to create the dossier, Christian Steele
himself, according to ABC News today, not only has talked to the FBI in
detail about the dossier and how he put it together. According to ABC News
today, Christopher Steele has given the FBI specific information about the
identity of his sources that he used to put the dossier together.

Now if that ABC News report is true, that would allow the FBI to retrace
Christopher Steele`s steps to either verify or disprove what is in that
incredibly inflammatory dossier. You`ll remember that the key claim of the
dossier, aside from a bunch of salacious personal stuff, is that the Trump
campaign not only knowingly colluded with the Russian attack on election
last year, but that it was the end product of a years-long relationship
that involved the exchange of politically useful information, that included
potential coercion by Russia toward Trump and that included extensive,
illicit financial ties between Trump, Trump businesses and Russian
entities, including some that are close to Vladimir Putin.

I mean, that`s what`s in the dossier, right? If the firm that paid for
that information just handed over 40,000 pages worth of documents, and the
founder of that firm just gave 10 hours of testimony, and if the
intelligence agent who collected that information has confided information
about his sources to the FBI for their own investigation of those matters,
well then you could see where the pressure might be boiling up in from
terms of the White House really wanting to shut down these investigations.

And looking ahead in terms of next steps, Christopher Steele himself, the
former MI-6 agent, he is eagerly sought by the investigative committees in
the Congress as a potential witness for their inquiries. We do not know if
that will ever happen. Obviously, that would be basically a truckload of
political dynamite for this country if he did testify, if his story held

So, I mean, obviously, there were high stakes here already. If this “New
York Times” reporting and this ABC News reporting tonight bears out, the
stakes have gotten that much higher.

I just want to put one last point on it. We just got some exclusive new
national polling. We just got in from PPP, Public Policy Polling. This is
due to come out tomorrow. They`ve given us an exclusive first look at
these numbers tonight. So, you haven`t heard this anywhere else. These
were exclusive to us.

This is a national survey results factoring in Democrats and independents
and Republicans who, of course, remain very loyal to Donald Trump. Here
are these national top line results.

Quote, do you think that the Russia story is fake news or not? Answer from
the American people, no, America do not think the Russia story is fake
news. Question 21, quote, do you think that members of Donald Trump`s
campaign team worked in association with Russia to help Trump win the
election for president or not? Answer from the American public, yes, we
think members of Donald Trump`s campaign team worked in association with
Russia to help Trump win the election for president.

And here`s the crucial follow-up question, question 22, quote, if evidence
comes out that proves conclusively that members of Donald Trump`s campaign
team worked in association with Russia to help Trump win the election for
president, do you think Trump should continue to serve as president or do
you think he should resign? Answer from the American people, by a 20-point
margin – yes, in that case Trump should resign. So says a clear majority
of the American public in that instance.

Again, this is new national polling that`s coming out from Public Policy
Polling tomorrow. They gave us an advanced look at some of the numbers
tonight. In terms of the methodology of the polling, it was conducted
through yesterday, so it doesn`t include any reaction to whatever the
president is going to say tonight in Arizona. And it doesn`t involve
reaction to this new reporting in “The New York Times” story that president
may have another obstruction of justice line inquiry to worry about now.

This time what`s reported to be an effort by the president to shut down the
congressional investigations into his campaign in Russia. Again, we`re
going to have expert advice on that potential new inquiry, coming up.

Plus, the Phoenix mayor joining us live.

We`ve got a lot to get to night. Stay with us.


MADDOW: OK. We`re following several breaking stories here tonight,
including the forthcoming rally in Phoenix that the president is holding
there tonight despite requests from local officials that he not do it. The
mayor of Phoenix is going to join us in just a moment.

We`re also following breaking news on another front related to the infamous
dossier of alleged Russian dirt on Donald Trump. The political research
group behind the dossier is called Fusion GPS. The co-founder of Fusion
GPS, the head of that firm, is Glenn Simpson, who`s a former investigative
reporter for “The Wall Street Journal.”

Now, his legal team has just released a very interesting statement tonight.
This has just come out tonight and it`s about the head of that firm, Glenn
Simpson, spending ten hours today meeting behind closed doors with
investigators from the Judiciary Committee in the Senate.

In the statement tonight, Glenn – following this marathon testimony,
they`re describing – Fusion GPS is describing the dossier, the dossier
about Trump, as a, quote, road map for investigation. They also say that
they stand by their work. They stand by that dossier and what`s in it.

And then look at this. Look at how they end their statement. They`re
basically requesting that the committee release the transcript of those 10
hours of interviewing that Glenn Simpson sat for today. Quote: The
committee has the right – excuse me, the committee has a transcript of the
interview. The committee has the right to disclose the transcript if it
wishes to do so, which I think is Fusion GPS basically inviting the
Judiciary Committee to make the content of the ten-hour interview available
to the public. Gulp.

And that statement and that very provocative prospect has just come out
tonight on the heels of this new “New York Times” reporting that the
president, according to Republican sources, may have pressured the top
Republican in the Senate to protect him from the Russian investigations
happening in Congress. If that report is true, would that potentially open
another line of inquiry into the president potentially having tried to
obstruct justice on the Russia investigation?

Joining us now is Barbara McQuade. She`s a former U.S. attorney for the
eastern district of Michigan.

Barbara, thank you for being with us tonight. I really appreciate you
being here on short notice.


MADDOW: I feel like I`ve come to learn in recent months about what
obstruction of justice might mean, what it means in criminal terms in terms
of somebody trying to block or pervert or pressure an FBI inquiry. Does
the same criminal framework apply to somebody trying to block an
investigation by Congress?

MCQUADE: Yes, there`s a different statute but a very similar one in the
criminal code that makes it a crime to corruptly or by threats obstruct,
impede or interfere with an investigation by Congress or any committee of

MADDOW: Does the law spell that out? How far does that statute go in
spelling out what kind of things would be considered obstruction?

MCQUADE: Well, it has the same kind of language. It parallels the same
statute that covers investigations by agencies or the FBI.

But the key words there really are corruptly or threaten. If this news
report is true, it sounds like you would have the elements of an offense,
certainly the facts always matter. But one thing that`s really important
in stark contrast to what we saw a couple of weeks ago when President Trump
was threatening members of the Senate like Lisa Murkowski in the
legislative arena, saying, I`m going to withhold federal funds unless you
vote for health care. That`s OK. That is political hardball. They call
that logroll. That happens all the time.

But when you get into Congress`s investigative powers and you seek to
interfere with those, then that becomes a crime.

MADDOW: And who would investigate that? Is that something that Congress
itself investigates because it`s a crime against or in relation to a
congressional investigation or is that something that the Department of
justice or the FBI would look into?

MCQUADE: No, the FBI and the Department of Justice would look into it. I
would suggest that this is part of the purview of the special counsel
Robert Mueller who has the authority to look into ties between Russia and
the Trump campaign and matters that may arise out of it, including
obstruction of justice.

So, my guess is Robert Mueller and his team would be interested in learning
the facts of this case. It could be another count in any indictment or
presentment that goes to Congress. And in these kinds of cases, it can
really bolster a second count. So, if you`ve got a count involving efforts
to intimate or obstruct with Jim Comey and those conversations and then you
also have another count that has the same kind of theme against Senator
McConnell here, those two counts can really become self bolstering of each
other. It demonstrates a common scheme or plan that really helps bolster
both of those counts.

MADDOW: And, briefly, Barbara, forgive me ignorance on this, but if Mitch
McConnell is the key witness to this, if this pressure happening in a phone
call what`s described in “The New York Times” today is that there were
other Republicans who are briefed on the contents of the call.

But if he was alone with the president on that call, he would obviously be
the key witness here. Could Robert Mueller compel him to testify? Is
there anything about his status as the Senate majority leader that might
protect him from having to provide testimony to any sort of inquiry?

MCQUADE: There`s nothing to protect him from being compelled. My guess is
that Robert Mueller would first attempt to obtain information through an
interview with Senator McConnell, in hopes that he can get it that way and,
you know, only if he was not able to provide that voluntarily would he have
to go to that measure of compelling. But there`s nothing that would
protect him from being compelled under the law.

MADDOW: Barbara McQuade, former U.S. attorney in Michigan, thank you for
your time and always for your incredible clarity. Really appreciate you
being here.

MCQUADE: Thanks.

MADDOW: All right. Mayor of Phoenix joins us live in just a moment. Stay
with us.


MADDOW: It was 105 degrees today in Phoenix, Arizona. At this time of the
year in Phoenix, that means today is a today that ends in Y. Tonight,
temperatures were higher than usual. Outdoor exertion was greater than
usual in downtown Phoenix, thanks to protests both for and against the
president, outside his rally at the Phoenix Convention Center tonight.

The combination of the heat, the controversy over the president`s recent
remarks on race, the vitriolic anti-immigrant speech he gave the last time
he was in Phoenix, the president has apparently abandoned the idea of using
tonight`s appearance to grant a presidential pardon to the famously anti-
immigrant recently convicted former sheriff of Maricopa County. All of
these things tonight have combined to create some real worries about what
was going to happen at this rally, about potential clashes between Trump
supporters and Trump protesters at the site of the rally and all around
downtown Phoenix.

Now, police have been trying to keep the two sides separated. The
Democratic mayor has been fervently making the case in the recent days that
the president shouldn`t do this, shouldn`t take it out on Phoenix if he has
a continuing desire to stoke racial tensions after his comments last week
praising the very fine people at the white supremacist last weekend in
Virginia. But the president has made his way to Phoenix tonight, as have
the protesters.

Joining us now from Phoenix is the mayor, Greg Stanton, who asked the
president, quote, to postpone this trip.

Mr. Mayor, thank you for making time to be here with us tonight. How
things gone tonight so far?

MAYOR GREG STANTON (D), PHOENIX, ARIZONA: So far, Rachel, things have gone
very smoothly in the city of Phoenix. There have been huge crowds, people
expressing their First Amendment rights outside of the convention center, a
large number of people entering the convention center to hear Mr. Trump`s
speech. So far, so good.

Yes, I was very disheartened when the president`s press secretary indicated
that there would be no pardon for Sheriff Joe. Obviously, the president on
occasion doesn`t listen to his staff. So, we`re still going to pay close

But I think that that announcement that there was no pardon for Sheriff Joe
and all of his civil rights violations did make us feel a lot better that
things were going to go safely here in Phoenix tonight.

MADDOW: Obviously, as you described there, that`s great news about the
peaceful nature of the protests and the fact that there hasn`t been
violence that people were so worried about tonight. Obviously, that`s why
a lot of people have their eyes on Phoenix tonight as partly because of
those worries.

I have to ask you, though, about a lot of the photos that we`ve seen today
of folks with guns. Interestingly, both Trump supporters with guns and a
couple of protesters on the other side at least also open carrying tonight.
Obviously, Arizona is an open carry state.

Does the presence of so many visible guns at tonight`s protests increase
your concern?

STANTON: Yes, it does. And I wish that people who were coming downtown to
express their First Amendment rights either opposing the president and his
policies and unfortunately his failure of moral leadership after
Charlottesville just a few days ago, or those who supporting the president
would leave their weapons at home. They don`t need to try to antagonize
others in the audience by bringing those very large weapons.

It`s unfortunate but Arizona is an open carry state and, thus far, there
have been no arrests for any kind of weapons violations in Phoenix tonight.

MADDOW: And, Mr. Mayor, you were quite outspoken ahead of this that you
did not want the president to come to Phoenix and do this rally there, that
you were worried about what he might set off and his motivations for coming

I just have to ask, did the – did the president reach out to you? Did the
White House ever contact you to address your concerns or to find out more
about whether there was a way they could do this that would be less
antagonistic? Did you ever have any contact with them?

STANTON: Rachel, I put out a public statement strongly making the case
that this was not the time for this campaign rally. And it is a campaign
rally. The Phoenix Convention Center was rented by the Trump for President
Campaign. Such a short time after the tragedy in Charlottesville, with the
tragic murder of a young lady at the hands of a neo-Nazi, with the specter
of a potential presidential pardon of Sheriff Joe, despite all of his civil
rights violations of Latinos in our community, that it simply wasn`t the
right time.

But shortly thereafter, a spokesperson for the White House indicated that
they were not going to heed to my advice and they were going to move
forward with tonight`s campaign rally here in Phoenix.

MADDOW: And they never called you about it and you never spoke with the
president about it?

STANTON: I have not had the opportunity to speak to President Trump about
it. I think – look, I`m not naive or Pollyannaish. I didn`t reasonably
think that he would listen to me.

But I think the point had to be made. I think I spoke on behalf of most of
Phoenicians and most of the people across the United States of America that
said that after the president failed so miserably to provide leadership in
this country after the tragedy in Charlottesville, that such a short time
thereafter to do a campaign rally in Phoenix, it was just – it wasn`t
right. And so, I stand by my statement that this should have been

We`re not saying never do it. Look, we understand politics is politics
and, eventually, you have to do campaign rallies. But this wasn`t the
right time here in Phoenix.

MADDOW: Phoenix Mayor Greg Stanton, sir, thank you for joining us. I know
it`s a very, very busy, fraught night.

STANTON: Thank you so much.

MADDOW: Let us know what you hear from the president anytime soon. I
appreciate your time tonight, sir.

STANTON: We will. Thank you.

MADDOW: All right. We`ve got much more to come tonight. Stay with us.


MADDOW: In April, “Reuters” had a fascinating report about a billionaire
investor you might have heard of. His name is Carl Icahn.

“Reuters” reported that last year, Carl Icahn did something that nobody
else had done before in a big way in the market. He started betting for
some reason that the price of a specific kind of regulatory instrument was
going to drop. It was going to get cheaper.

As part of a regulatory framework that`s been around for a while, some oil
refineries have to buy a thing called a bio fuel credit. They have to buy
these credits and Carl Icahn started betting as a refinery owner himself,
he started betting that the price of those credits was going to drop. And
that was weird. Nobody had ever really shorted those things before in the
market. Nobody had ever made a big multimillion dollar bet that the price
of the credits was going drop.

But Carl Icahn did. Why did he do that?

Well, turns out that Carl Icahn was going to be named Donald Trump`s
special adviser on regulatory reform. And after he got that adviser gig at
the White House, wouldn`t you know it, he immediately set about advising
the president to do things that would drop the price of those credits. So,
then he could collect on that otherwise mysterious a typical bet that he
made that those credit would get cheaper.

I mean, it sounds complicated if you don`t follow short selling and market
stuff like this all of the time. But it`s really a simple and jaw-dropping
thing. Billionaire bets on the market that a thing will happen.
Billionaire then joins Trump administration to ensure that that thing will
in fact happen.

Billionaire collects. That`s it. Congratulations. Your country is now a
former Soviet corruptostan and the ruling family and their crony oligarchs
would like to see you now.

This is just like textbook banana republic corruption. People taking
government jobs that then they use to make themselves rich in the private

I mean, the thing that`s actually most unnerving about the Carl Icahn story
is how out in the open it`s all been happening. I mean, “Reuters” made
this chart showing how the value of those biofuel credits dropped starting
in December. First, on Carl Icahn`s advice, Trump named an EPA director
who said he shares Carl Icahn`s views on those biofuels regulations. And
so, the price of those credits dropped, and the White House announced that
Carl Icahn will have an official role as an adviser and the price of those
credits dropped a little more.

Then, a new biofuels regulation plan conceived by Carl Icahn was delivered
to the White House and, yes, the price of those credits dropped even more.
Every time that happened, Carl Icahn – that bet that he made was getting
better and better and better. I mean, if you are Carl Icahn, and you made
that bet a few months back that the value of the credits would drop – yes,
you made a prettily good bet, but it really looks like your actions as part
of the Trump administration are what made that bet turn out so well for

This is just textbook. In the months after Trump`s election, the stock
price of Carl Icahn`s refining company which directly benefitted from the
dropping price of those credits, the stock price of his refinery company
nearly doubled. That`s hundreds of millions of dollars for Carl Icahn.

But now, Carl Icahn is out, all of a sudden. He resigned as special
regulatory adviser of the president last week. He resigned literally
moments before “The New Yorker” published this bombshell piece by Patrick
Radden Keefe detailing, and I mean detailing, just exactly how Carl Icahn
used his position in the Trump administration to make himself hundreds of
millions of dollars.

Experts interviewed by “The New Yorker” strongly suggesting that Icahn may
have legal concerns that follow him home from this job that he
precipitously just quit. The chief ethics lawyer for President George W.
Bush telling “The New Yorker”, quote, he`s walking right into possible
criminal charges. Quote: He cited – this is from “The New Yorker”, quote,
he cited a federal statute that makes it illegal for executive branch
employees to work on me matter in which they may have a direct financial
interest. The president and the vice president are exempted from that
statute. Unpaid White House advisers like Carl Icahn are not exempted from

Richard Painter suggested that the Public Integrity Division of the Justice
Department should be investigating. Quote: If I were Carl Icahn`s private
lawyer, I would tell him he should not have accepted that special adviser

Well, consider that advice taken retroactively, because this is the
defense. This is incredible. The White House and Carl Icahn are now
pretending that this whole thing never happened. That Carl Icahn was never
appointed to anything in the Trump administration. He never had that

Honestly, this is their defense. The White House tells “The New Yorker`s”
Patrick Radden Keefe that Carl Icahn never had a, quote, formal appointment
or title after inauguration day. Never had it. They`re saying this never

President-elect Donald Trump names Carl Icahn special advisor to the
president on regulatory reform. That is their own press release. They`re
saying this never happened. No way.

Why would you think that this happened? Why would you think that Carl
Icahn had ever been named a special regulatory adviser to President Trump?
Why would you think something so crazy? Clearly, that never happened.
This is the press release.

The White House lawyer in charge of conflicts of interest making sure that
conflicts of interest like this don`t happen in the U.S. government is
literally saying now that Carl Icahn never had that gig at all, despite
what you might have heard. They claim now that he was, quote, simply a
private citizen. That lawyer – that`s the ethics lawyer.

That lawyer, by the way, the one who`s supposed to make sure that Carl
Icahn is complying the ethics laws, that lawyer used to work for Carl
Icahn. So, clearly, he`s in a great to be the arbitrator of ethics here.

So, this is lurid obviously. But here`s the question, we`re not post-
Soviet corruptostan. I mean, we appear to be on our way. But we`re not.

Isn`t somebody going to police this? Is anybody going to investigate this?
I mean, the Justice Department does have a big hairy corruption unit,
right? Are they going to investigate this at DOJ, or could the attorney
general in New York where Carl Icahn is based, could he investigate this?

Because even if you are cynical, maybe if you expected this from the outset
with this administration, this really is just bananas. This is as blatant
as it gets.

Hold that thought.


MADDOW: This is one of those nights. Breaking news from Washington just
in the last couple of minutes: the inspector general`s office has launched
an ethics investigation into a member of Donald Trump`s cabinet, Interior
Secretary Ryan Zinke.

Do we have the letter that we can just put up there? This is first linked
to, we just saw this from Eric Lipton at “The New York Times.” But as you
can see, what he posted is a letter from Office of Inspector General at the
Department of the Interior.

Now, what this is about is apparently Interior Secretary Ryan Zinke making
calls reportedly threatening federal resources for the state of Alaska in
order to pressure Senator Lisa Murkowski over her vote on health care
reform. We were just discussing this matter earlier this hour with Barbara
McQuade, former U.S. attorney who was prosecuted numerous public corruption
cases in the eastern district of Michigan. She was describing this is an
example of log rolling, something that might be distasteful but not
potentially criminal.

That said, it is now the subject of an open ethics investigation by the
Interior Department inspector general. Again, that news just breaking
moment ago.

Joining us now – boy, this is good timing, is Walter Shaub. Until he
resigned last month, he was director of the Office of Government Ethics for
the U.S. government. He`s now senior director of ethics at the Campaign
Legal Center.

Mr. Shaub, thank you very much for being here. It`s weirdly timely that
you`re with us tonight.

everyday is weirdly timely these days.

MADDOW: On ethics, certainly.

I just have to ask, and you probably – I don`t know if you had seen this
news before. They just announced it. But I want to get your top line
response to this news that the inspector general at the Interior Department
is looking into calls placed by Secretary Zinke to try to reportedly
pressure that senator into changing her vote.

SHAUB: Well, I hadn`t seen that until you posted it. So, I don`t know the

What I can tell you having worked with the inspector general community and
having sat on the council of inspector generals as part of my job as
director of the Office of Government Ethics is that these are serious
investigators. We are fortunate that cabinet agencies like the Department
of Interior have inspector generals, inspectors general. There is no such
thing in the White House.

So, unfortunately for Mr. Zinke, he has an inspector general. And my
advice to him is he better cooperate.

MADDOW: Let me ask you about this reporting concerning Carl Icahn.
Obviously, he`s a famous business figure in his own right. We have been
following for months now this good, vigorous financial reporting, business
section reporting about how he might have been using his position as
regulatory adviser to the president basically to self deal, to help make
himself many, many, many millions of dollars at his refinery business by
affecting the price of a regulatory instrument that shaped the bottom line,
financial picture for his company.

This all seems to have happened out in the open. How have you viewed this
reporting? Is this sort of business as usual? Is this a serious matter?

SHAUB: It`s no overstatement to say this is one of the most sinister
episodes of ethical concern in this administration, and frankly any time
since I began working in the ethics program 15, 17 years ago. What we have
here is a situation where the White House and presumably aided by the White
House Counsel`s office, whose ethics official was a former attorney for
Carl Icahn, have stayed out of it, and have not ruled that he is a federal
employee. They tell Patrick Keefe, the reporter who wrote “The New Yorker”
article, that they didn`t even analyze it. The spokesperson said there`s
no need to analyze this.

Well, of course, there`s a need to analyze this because the criminal
conflict of interest statute says that if you`re a federal employee, you
simply cannot participate in matters that are going to affect your own
financial interest. The question here is whether Mr. Icahn was a federal
employee or not and the White House is telling us they never even sat down
and analyzed that.

MADDOW: You sent a series of tweets in response to Patrick Radden Keefe`s
report. That basically was an emergency flair to the public integrity
section of the Justice Department, asking them to take a look at this.
You`re promising to help Senator Grassley in the Judiciary Committee if
they want it look at this.

Who should be investigating this? This does feel like an incredibly
blatant red flag here if not more than that. Whose job is it to police

SHAUB: So flair is right. I feel like I`m standing on the deck of the
Titanic and I just shot the emergency flair into the air. This is a very
serious issue.

Patrick Keefe did an extraordinary job reporting on this. In fact, he did
the Department of Justice`s job for them. He uncovered significant
information that raises enough smoke.

Now, look, Mr. Icahn may have another side to the story and he may be able
to provide more details, but there is certain lay enough here that
Department of Justice needs to dig into this, take a look at it, and if
they fail to do it, the Judiciary Committee should have a hearing either
about Mr. Icahn`s status as to whether he was an employee or into the
Department of Justice`s failure to look into this.

This entire matter unfolded without any involvement of the Office of
Government Ethics. This is another example of the White House not
consulting with us. And when you go to the Department of Justice and ask
them for help, as the director of the Office of Government Ethics, on any
type of ethics issue like that, the actual response I got from head of
public integrity this year was, we read the paper, too. So, we don`t need
you reporting things to us.

MADDOW: Wow. Walter Shaub, former director of the Office of Government
Ethics, now senior director of ethics at the Campaign Legal Center, I
really appreciate your time tonight, sir. This is a big, serious deal.
Thanks for helping us understand it.

SHAUB: Thanks, Rachel.

MADDOW: Thanks.

All right. We`ll be right back. Stay with us.


MADDOW: This has been another one of those nights with a bunch of
different breaking news stories, including a few breaking just over the
course of this hour.

Just to recap, breaking news tonight includes news from “The New York
Times” about the president reportedly pressuring the Republican leader of
the Senate to protect the president. That was the language used by “The
Times”. Protect him from the Russia investigations being conducted by
Senate committees.

We`ve had news tonight about the ten hours of closed door Senate testimony
that was delivered today from the founder of the firm behind the Trump-
Russia dossier. Also what amounts to a call from his lawyer tonight, that
the committee who took that testimony should publicly release the
transcript of what he said over those 10 hours.

And then in addition to that tonight, we just got the news that Interior
Secretary Ryan Zinke is now under investigation for what we`re described as
arm-twisting calls that he made to Alaska senators, to try to change Lisa
Murkowski`s vote over Obamacare, threats to public resources for Alaska, as
a way of trying to pressure Murkowski on her vote.

All of that just breaking tonight. Lots still ahead.


Good evening, Lawrence.


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