Kushner’s business got loans after WH meetings. TRANSCRIPT: 02/28/2018. The Rachel Maddow Show

Guests:
Jesse Drucker
Transcript:

Show: THE RACHEL MADDOW SHOW
Date: February 28, 2018
Guest: Jesse Drucker

RACHEL MADDOW, MSNBC HOST: Good evening, Chris. Totally normal day in the
news, right?

CHRIS HAYES, MSNBC HOST, “ALL IN”: Oh, my word.

MADDOW: Yes, totally average day, normal pacing. My heart rate is totally
fine.

HAYES: Are you doing, I never ask you this. You`re doing the Kushner
thing, right? Are you doing the Kushner?

MADDOW: Yes, I just threw out my whole A, B, and C block. It`s all –

HAYES: I mean, give me a break, honestly.

MADDOW: I know. Can I tell you? Honestly, the reporter from the Kushner
thing is physically running into the building right now. They told me that
he`s not here now as I`m start this segment.

HAYES: Oh, so it`s good that I`m stretching.

MADDOW: Yes. He`s due to arrive while I`m speaking. So, it`s – talk
about breaking news, it`s for real. Thank you.

HAYES: I`m going to go watch.

MADDOW: All right. And thanks to you at home for joining us this hour.
Who knows what`s going to happen this hour?

I mean, we are used to this pattern where if it`s a day that ends in Y,
it`s a day of when massive news breaks literally as we`re going to air. We
did have a whole show plan, ordered up, ready to go tonight.

There`s been a lot going on all day today.

Walmart just announced it`s not going to sell guns anymore to people under
the age of 21.

The president made a bunch of startling comments on camera today about gun
safety reform, comments totally out of keeping with all of his previous
remarks on this subject. Therefore and for some other reasons, nobody
really thinks he meant to any of the things he said but still he said them,
and he`s the president, so there`s chaos around those remarks themselves.

Then, the White House communications director Hope Hicks suddenly resigned
today without warning.

Our news room, our sort of cubicle farms set up in to work on my show is in
the sort of corner of the building here and way down at the other end of
the floor is the folks from Chris Hayes show, and around the corner there`s
a couple of other shows, we`re all very rarely looking at the same thing at
the same time, but when the Hope Hicks news broke at the “New York Times”,
you heard like somebody doing a stadium wave. It was like oh, oh, oh all
the way down the hall, and all the way across the floor as people absorb
that information, which was a legitimate surprise.

So, there`s been lots going on. We had a whole show about it.

And then this just happened – this is big news that has just broken from
“The New York Times” just in the last hour. As you see the headline there,
Kushner`s business got loans from companies after White House meetings.
This is by reporters Jesse Drucker, Kate Kelly and Ben Protess.

Jesse Drucker, I believe, is going to be joining us in just a moment to
talk about this. But here`s how this piece starts tonight. Quote: early
last year, a private equity billionaire started paying regular visits to
the White House. Joshua Harris, the founder of Apollo Global Management.

During that period, Mr. Harris met on multiple occasions with Jared
Kushner, President Trump`s son-in-law and senior advisor. Among other
things, the two men discussed a possible White House job for Joshua Harris.
Well, that job never materialized but in November, Apollo Global Management
lent $184 million to Jared Kushner`s family real estate firm Kushner
Companies. The loan was to refinance the mortgage on a Chicago skyscraper.
This loan was made, it says later on in the story, on November 1st, 2017.

Quote: Even by the standards of Apollo, which is one of the world`s largest
private equity firms, the previously unreported transaction with the
Kushner`s was a big deal. It was tripled the size of the average property
loan made by Apollo`s real estate lending arm, according to securities
filings. So, that loan, $184 million after these meetings at the White
House between the Apollo guy and Jared Kushner at the White House in which
they talk among other things about a potential job at the White House for
the Apollo guy, that $184 million loan, that was one of the largest loans
Kushner companies received last year.

But oh wait there`s more, because an even larger loan came from Citigroup,
which lent the firm and one of its partners $325 million to help finance a
group of office buildings in Brooklyn. That loan to the Kushner Companies
was made in the spring of 2017 by Citigroup, shortly after Mr. Kushner met
in the White House with the chief executive of Citigroup.

According to “The Times” or as “The Times” notes, there`s little precedent
for a top White House official meeting with executives of companies as they
contemplate sizable loans to his business.

Now, obviously, there`s important context here in terms of what`s going on
with Jared Kushner right now and concerns about him in the White House.
This is not the first concerning report we`ve had just in the last few days
about the presidential son-in-law and senior advisor potentially mixing his
government responsibilities and his private business needs in potentially
dubious ways, right? This is not even the first such concerning report in
the last 24 hours.

I mean, in this new breaking news story from “The New York Times” tonight,
they note, quote, Kushner recently lost his secret – excuse me – his top-
secret security clearance amid worries from some U.S. officials that
foreign governments might try to gain influence with the White House by
doing business with Mr. Kushner. Now, according to “The Washington Post”
last night, those worries have been informed in the White House in part by
intelligence intercepts, intelligence intercepts that have captured foreign
officials discussing their dealings with Jared Kushner in the White House.

Beyond that, “The Associated Press” today reports that those intelligence
intercept – intercepts have revealed discrepancies in the information that
Jared Kushner disclosed on his security clearance application. Well, now,
tonight, we learned that Kushner`s companies – companies in which he still
partially – he partially owns them or holds a stake in them, they have
received hundreds of millions of dollars in loans from entities whose
executives have been meeting with Jared Kushner regularly in the White
House in his capacity as a senior White House official.

Now, I should note that Jared Kushner`s lawyer Abbe Lowell tells the time
tonight that his client has met with hundreds of businesspeople. He says
Kushner has taken no part of any business loans or projects with or for
Kushner Companies since joining the White House. A spokesman for Kushner
Companies, according to “The Times”, says Mr. Kushner`s White House role
has not affected the company`s relationships with financial institutions.
Quote: Stories like these attempting to make insinuating connections that
do not exist to disparage the financial institutions and companies
involved.

Both lenders also denied the loans had anything to do with the White House
meetings. But just to be clear here, at least according to “The Times”,
we`re talking about that Chicago skyscraper loan from Apollo and the
Brooklyn buildings loan from Citigroup, according to “The Times” tonight,
Kushner still owns the part of the Kushner companies that received the
Apollo loan for the Chicago skyscraper and Kushner also still holds a stake
in the entity that owns the Brooklyn buildings which got that loan from
Citigroup.

Again, this is hundreds of millions of dollars being shoved at him and his
personal business interests while taking meetings with executives from
those lenders in the White House in his capacity as a White House official.

This is worth throwing out the show for as far as I`m concerned. Joining
us now is the “New York Times`” Jesse Drucker, who`s one of the reporters
on this story tonight.

Mr. Drucker, thank you for running over here.

JESSE DRUCKER, BUSINESS AND TAXES REPORTER, THE NEW YORK TIMES: Thanks for
having me.

MADDOW: I understand it was hard to get here in time.

DRUCKER: We`ve worked out.

MADDOW: I`ve just summarized, again on short notice, we`re – we`re
absorbing the stuff ourselves, but I`ve just summarized what I see as the
bottom line here which is that Mr. Kushner`s business interests not only
aren`t over, but business interests in which he is actively invested, where
he`s getting a personal benefit, have received notable and in some cases
sort of remarkably large cash infusions from people who have had business
dealings with him as a White House official.

DRUCKER: Yes, I mean, so, you know, to step back for a second right when
Jared Kushner joined the White House a little over a year ago, he quit his
job as chief executive officer of Kushner Companies, but for the most part,
he held on to his ownership stake in Kushner Companies. He divested some
small portions of his stake in the company, basically selling them to a
trust controlled by his mother. But for the most part, he held on to most
of his stake in the company.

And the way Kushner Companies is set up is it`s actually, you know,
hundreds of LLCs and partnerships and companies that in turn own these
various properties. He continues to hold on to a bunch of apartment
buildings in Dumbo in Brooklyn and to a high-rise office building in
Chicago, the AT&T Midwest headquarters there on Randolph Street.

So, last year, after he joins the White House, he has a number of meetings
with Josh Harris, who is one of the founders of Apollo, giant private
equity firm and the two of them are discussing a number of things including
a possible job for Mr. Harris, and the job doesn`t materialize it turns
out, but something else does, which is a few months after probably – well,
a few months after a series of meetings with Mr. Kushner,. Mr. Harris`s
firm Apollo makes this sizeable loan to Kushner Companies to refinance this
building –

MADDOW: A hundred eighty-four million dollars.

DRUCKER: A hundred eighty-four million dollars, which is both a very large
loan by the standards of Kushner Companies and an enormous loan by the
standards of Apollo. Apollo`s a giant private equity firm, but for the
most part, their loans are nowhere near that size. In fact, when you look
at the average loan, at Apollo, the average commercial real estate loan,
it`s approximately $60 million. This is essentially triple the size of
their average loans.

MADDOW: Is there anything about that loan on its face just as a
substantive matter that looks like if you didn`t know about the meetings,
if you didn`t know about the communications between Jared Kushner and the
executive from this firm, is there anything about that loan that looks
financially awkward it looks like the kind of deal that Apollo wouldn`t
typically make?

DRUCKER: I mean – so I don`t know – no, not necessarily other than the
size, right? The size makes it an outlier in terms of the loans that
Apollo makes for commercial real estate.

MADDOW: OK.

DRUCKER: But, you know, one issue here is that this is kind of one of the
big issues presented by the information that`s available about Jared
Kushner`s businesses, we don`t really know that much about these loans,
right? Like we know the amount, we know when the loan is due, but we don`t
know anything about the interest rate on the loan, we don`t know anything
about the cash flow in the building, we don`t know anything about other
potential non mortgages but loans in the building that could affect the
leverage that in turn could affect the terms of the loan.

So, as an outsider based on the public records that we rely on you know
we`re kind of limited in being able to make an assessment like that.

MADDOW: There`s been some interesting reporting from a lot of different
sources over the last couple of months about Mr. Kushner`s difficulties
getting a permanent security clearance. “The New Yorker Magazine” reported
on what were reported the U.S. intelligence intercept that captured Chinese
officials describing interactions between the Chinese ambassador and Jared
Kushner in which the ambassador basically reported home to Beijing that he
had brought up his own private business interest while he was discussing
policy matters with the Chinese government in the person of the Chinese
ambassador.

Do we have any information to start apart from the denials that we got
tonight for Mr. Kushner about whether or not any of these private business
matters were discussed at the White House, were discussed alongside the
other things that might have brought the Citigroup chairman and Joshua
Harrison to the White House to talk to Kushner?

DRUCKER: No, no. But, you know, look one of the big problem is that
ethics experts will cite in the whole situation is, I guess let`s take
their word for it, right?

MADDOW: Yes.

DRUCKER: There are no publicly available logs documenting the existence of
the meetings, much less what was discussed at the meetings. We know from
our sources that the meetings happened and we know separately that these
financial transactions happen. But this is the sort of difficulty with the
situation that`s been created, right, as we essentially have to kind of
take their word for it that things were discussed or weren`t discussed, and
we have no way of knowing about meetings because they don`t make that
information public anymore unless we discover it on our own.

So, I mean, look the short answer is no we have no indication that they
discussed the loans. But you know, it`s also I think that the issue ethics
experts would raise is you have a potential issue even if he doesn`t raise
the loan, right? I mean Jared Kushner is one of the most powerful people
in the world right now. We know that he discussed a job, a White House job
with Joshua Harris and that on its own raises concerns about the subsequent
financial transactions with Kushner Companies and Apollo.

And you know, to be clear, I mean, there`s a number of very – in some
cases, specific, in some cases, potentially nebulous triggers to determine
if there`s actually a violation of the ethics regulations or of the law.

MADDOW: Or potentially a bribe.

DRUCKER: Yes, I mean, I`m not going to speculate about that. But I mean,
you know, here, what you have is a situation where, you know, Jared Kushner
potentially through his company, through his company, seeking a loan from
Apollo, potentially that creates a certain relationship between him and Mr.
Harris which in turn prohibits him from engaging in other sorts of
decisions and conversations as a government official. We have no
indication that he did that but it certainly puts him into a kind of a zone
of potential problems right if he`s kind of running into, OK, now, he`s got
this relationship potentially with Harris through his company and that
prevents him from being able to have certain types of conversations about
things Apollo might be seeking from the government, and we just don`t know.

You know, we don`t know what happened beyond those meetings.

MADDOW: Right.

DRUCKER: And, Apollo, you know, to kind of put it in context. Also,
right, Apollo – Josh Harris was booked – was a frequent visitor to the
White House as part of kind of an advisory council on infrastructure and
Apollo and other private equity firms are looking to create serious
businesses on figuring ways to make money from the infrastructure plan,
right?

So, Apollo was seeking something from the Trump administration implicitly,
and as they are providing input and what the infrastructure plan should be.
Separately, Apollo had a lot at stake in the tax plan and, you know,
private equity executives in general ended up making out quite well. You
know, Donald Trump during the campaign had promised to make private equity
managers pay taxes at a higher rate.

MADDOW: And then that that part of the tax bill.

DRUCKER: That disappeared, right.

MADDOW: So, I mean, Apollo has very significant interests at stake when it
comes to the Trump administration.

MADDOW: While they are making $184 million loan to Mr. Kushner`s family
real estate firm, part of it that he himself is still financially linked
to.

DRUCKER: Right.

MADDOW: Jesse Drucker, thank you very much for helping us understand this
reporting. It`s important reporting and you`ve made it even clearer than
it is in print. I appreciate it.

DRUCKER: Thanks for having me.

MADDOW: Yes.

All right. Up next here, the thing I was going to talk about before this
happened, which is another jaw-dropping story we learned about actually
just in the last few hours. It`s been a big day and it`s going to be a big
night.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: Today is the last day of February, which usually is the shortest
month of the year. However this February of 2018, it lasted more than 20
years. At least it feels that way in terms of news years. It`s all been
one month.

A month ago today and the last day of January, “The New York Times” broke a
very unusual story about a guy who had a somewhat unique role in the Trump
administration. His name was Mark Corallo. For a while, his job was that
he was the spokesman for the legal team that`s representing the president
in the Russia scandal. Now, Russia scandals big enough and sprawling
enough and serious enough that not only are we at the point where lawyers
need their own lawyers, but lawyers need spokespersons for this scandal and
that`s what Mark Corallo was doing for a while before he quit that job
under unusual circumstances last summer, in July.

The first substantive thing we learned about the circumstances of why he
quit actually came month later – came from Michael Wolff`s controversial
book “Fire and Fury”, page 260 to be precise. Here`s how Michael Wolff
explained Mark Corallo quitting his job as the spokesman for Trump`s Russia
lawyers. This comes at the end of a long discussion, a long chapter about
“The New York Times” breaking the news about that Trump Tower meeting
during the campaign where all those Russians turned up to provide dirt on
Hillary Clinton.

So, Michael Wolff in this chapter goes into great detail about President
Trump`s effort with his top staffers to try to maneuver a way out of that
story without getting hurt, to try to spin that story, basically to try to
construct a false narrative about that Trump Tower meeting that wouldn`t
make it look so bad for them. And at the end of that whole discussion, we
get on page 260 to Mark Corallo quitting.

Quote, Mark Corallo was instructed not to speak to the press, indeed not to
even answer his phone. Seeing no good outcome and privately confiding that
he believed the meeting on Air Force One represented a likely obstruction
of justice, Mark Corallo quit.

And that was the full discussion of it from “Fire and Fury”. Intriguing,
right? Mark Corallo quit because he believed he`d witnessed a likely
obstruction of justice on Air Force One. We got that from the book and
then a month ago on the last day of January, “The New York Times” finally
got that full story and they spelled it out. That Trump Tower meeting
involving Paul Manafort and Jared Kushner and Donald Jr. and all those
Russians, the Trump Tower meeting happened June of 2016 during the
presidential campaign and, of course, nobody from the campaign it admitted
that meeting happened for like a year, right?

The Trump campaign and the Trump transition and then the Trump
administration all were insisting there had been no meetings with Russians
by anybody on the campaign, nobody who`d been actually in that meeting with
those Russians during the campaign ever admitted to it all that time, until
last summer, July of 2017, when “The New York Times” broke that story that
the Trump Tower meeting had happened and they sort of broke that story in
pieces. Their first headline about the Trump Tower meeting was just about
the fact that it had happened and who they knew had attended that meeting.
They didn`t know at first how the meeting had been set up, what the premise
was for calling that meeting in the first place, how all those people ended
up in the same room together at Trump Tower.

But in reporting out those stories, reporters from “The Times” contacted
the Trump White House and they contacted lawyers for people who they knew
had been in that meeting and they asked what was discussed at that meeting
and also what did the people who went to that meeting, what did they think
was going to be discussed there? “The Times” reporters submitted a list of
questions about the meeting to the White House and to the lawyers of the
Trump campaign aides who attended that meeting.

That list of questions was reportedly received mid-flight on Air Force One
as the president and his top staff were flying home from a trip to Europe.

Quote: President Trump`s aides received the list mid-flight on Air Force
One on the way back from the summit meeting and began writing a response.
In the plane`s front cabin, President Trump huddled with Hope Hicks.
During the meeting, according to people familiar with the episode, Hope
Hicks was sending frequent texts to Donald Trump Jr. who was in New York.
Alan Garten, a lawyer for Donald Trump Jr., who was also in New York was
also messaging with White House advisors aboard the plane.

The president himself supervised the writing of the statement according to
three people familiar with the episode. A fierce debate erupted over how
much information the news release should include. President Trump was
insistent about including language that the meeting was about Russian
adoptions.

Ultimately, that statement that was cobbled together aboard Air Force One,
the one who said them that said the meeting was an innocuous discussion of
Russian adoptions, that statement was ultimately sent out to “The New York
Times” and that statement of course was total bullpucky. It was issued in
the name of Donald Trump Jr.

That was the statement that said: It was a short introductory meeting, I
asked Jared and Paul to stop by. We primarily discussed a program about
the adoption of Russian children, a program that was active and popular
with American families years ago and was since ended by the Russian
government, but it wasn`t a campaign issue and there was no follow-up.

That statement was not true. That was not a true statement about what
happened at that meeting or how it came about. But the president himself
reportedly supervised the creation of that statement and that is what was
sent out to “The New York Times” to try to make this story go away. And
now, here`s the important part: the next morning, there was reportedly a
conference call which – this is what was first reported by “The New York
Times” a month ago today. On that conference call, the morning after that
statement went out, on that call are Mark Corallo, spokesman for the
president`s legal team, and Hope Hicks, and the president.

Back to “The Times” reporting, quote: what transpired on the call is a
matter of dispute. In Mr. Corallo`s account, which he provided
contemporaneously to three colleagues who later gave it to “The Times”,
smart man, Mark Corallo told President Trump and Hope Hicks that the
statement they drafted aboard Air Force One would backfire because
documents would eventually surface showing that that meeting had been set
up not to talk about adoption policy. It had been set up for the explicit
purpose of the Trump campaign getting political dirt about Hillary Clinton
from the Russians.

According to Mark Corallo`s account, Hope Hicks responded that the emails
setting up the Trump Tower meeting for that purpose will, quote, never get
out. Those emails will never get out because only a few people had access
to them. Mark Corallo told colleagues he was alarmed by what Ms. Hicks had
said, either she was being naive or she was suggesting the emails could be
withheld from investigators. He told colleagues he was also alarmed that
she had made this comment about the emails never getting out in front of
the president, without a lawyer on the phone, which means that conversation
could never be protected by attorney-client privilege.

And that is what led Mark Corallo to quit as the spokesman for the Trump-
Russia legal defense. Now, Hope Hicks had a lawyer put out a statement
saying that`s not at all how it happened. She totally denies this account.
But if Mark Corallo is right and all of the people he contemporaneously
confided in about that incident can back him up potentially in a court of
law the way they backed up his story to “The New York Times”, then that
that incident with that statement about Trump Tower that ends up being
really important for a couple of reasons.

I mean, first of all, obviously, it`s just the plot and the press drama
that derived from this incident. It was a matter of like a day before
Donald Trump Jr.`s emails setting up that meeting in order to get dirt on
Hillary Clinton, it was only a matter of like a day before those emails in
fact came out, revealing that the president`s dumb adoption statement
trying to cover up the purpose of that meeting was an overt lie. So,
obviously, that`s an immediate consequence of that whole story.

But more importantly, there is potentially a very serious legal problem
here, right? The president is widely believed to be the subject of a
special counsel investigation into whether or not he has obstructed justice
by trying to impede or block or pervert the Russia investigation through
various means. At the time that that Air Force One discussion happened
last July where they`re trying to cook up an explanation for the Trump
Tower meeting and the president and everybody were well aware that the
special counsel was investigating Russia`s interference in our election and
whether the Trump campaign was involved in it, they knew this was a matter
under investigation when they were trying to come up with an explanation
that would get people off the scent of that meeting.

I mean, if Mark Corallo is right and on a conversation that involved her,
Mark Corallo and President Trump, Hope Hicks said that the emails revealing
the true nature of that meeting those emails would never get out, that
would seem to indicate that she thought those emails could be kept from the
investigation, that could be kept from the special counsel on his
investigators somehow, either by, you know, hiding them or destroying them
or some other means. If you do that in full knowledge that there`s an
active FBI investigation looking at those matters and you`re talking about,
oh, we can keep those emails from getting to the investigation, I mean,
that that could very easily be criminal obstruction of justice.

And if that discussion those emails will never get out if that discussion
involved the president himself, that could very easily implicate the
president of the United States in criminal obstruction of justice if in
fact he were in on that call while that discussion happened and that`s what
Mark Corallo says happened.

And after those conversations, Mark Corallo quit. I`m out. I`m not doing
this anymore.

And in that news story that “The New York Times” published about this one
month ago today feels like 20 years ago. It`s a month ago today, we got
one other very important piece of information about Mark Corallo, quote,
according to three people with knowledge of the request, Mr. Corallo
received an interview request last week from special counsel Robert Mueller
and he has agreed to the interview. According to the three people with
knowledge of the request, quote, Mr. Corallo is planning to tell Mueller
about this previously undisclosed conference call with President Trump and
Hope Hicks. He plans to tell investigators that Hicks said during the call
that Donald Jr.`s emails about the Trump Tower meeting, quote, will never
get out.

In other words, Mark Corallo and all the people he contemporaneously
memorialized this experience with, he`s planning to testify to Mueller that
what he saw in his interactions with Hope Hicks and President Trump look to
him like obstruction of justice, and he was there and he saw it and he was
willing to testify about it. And by the way, he quit over it.

That reporting about Mark Corallo was a month ago. Since then, Mark
Corallo has had his interview with Robert Mueller. There`s no reason to
believe that he changed his mind as to what he was going to tell Mueller
and his investigators and now things seem to be moving very quickly. “The
Washington Post” first to report that another person who Mueller wanted to
talk to about that same incident was Josh Raffel, the White House spokesman
who works closely with Trump`s son-in-law Jared Kushner.

Quote: Hope Hicks and Josh Raffel were both involved in internal
discussions in July over how to respond two questions about the Trump Tower
meeting during the presidential campaign in June 2016. So, Mueller`s team
formally asked the White House to interview Josh Raffel. Nobody`s
confirming specifically whether that Josh Raffel interview happened, but
White House Russia lawyer Ty Cobb has said that all the White House
personnel who were going to be interviewed by Mueller have completed their
interviews. So, presumably that means Josh Raffel has talked to Mueller as
well.

Well, yesterday, Josh Raffel quit his job at the White House. He quit
while Hope Hicks was testifying before the House Intelligence Committee for
nine hours. During her nine hours of testimony yesterday, she refused to
answer any questions about anything that happened after the election, which
includes all sorts of stuff. But that time period would certainly include
those Air Force One discussions last summer.

Hope Hicks` testimony was conducted behind closed doors, but it made
headlines anyway, when she reportedly told the committee that her work for
President Trump has sometimes required her to tell, quote, white lies on
his behalf. The way “The Times” wrote that wrote up that revelation is
itself revealing. Hope Hicks, White House communications director, told
House investigators that her work for President Trump has occasionally
required her to tell white lies.

But after extended consultation with her lawyers, she insisted that she had
not lied about matters material to the investigations into Russia`s
interference in the presidential election and it`s possible links to Trump
associates. So, she said, yes, working for Trump has required me to lie, I
have lied about some stuff, but after extensive consultation – extended
consultation with their lawyers, she is ultimately able to say that she
hasn`t been lying specifically about the investigation.

That was yesterday. Today, Hope Hicks quit as well.

So the deputy communications director quit yesterday, communications
director quit today and there are few things about this that may end up
being very important, right? Part of this is personal for the president.
Hope Hicks is the longest standing and reportedly the closest staffer to
the president, at least the one who is not related to him by blood or
marriage. She`s closer to him than anybody else other than his kids.

She and Josh Raffel both started off working at a New York PR firm where
she was doing public relations for Ivanka Trump. She ultimately made the
leap to go work for Ivanka Trump`s private business and then that`s the
position from which she moved on to the Trump campaign. So, she comes from
the Jared and Ivanka side of Trump world. She`s been with the Trump family
and one way or another for several years now.

Her departure, of course, happens at a particularly different difficult
time for Jared and Ivanka, when Jared in particular has been publicly
humiliated and effectively demoted in the White House in a still evolving
scandal related to his inability to obtain a permanent security clearance.
I say he has been humiliated not because I`m trying to be mean or
insulting, I say it almost in a technical sense.

Literally, this is a headline at CNN.com tonight. Look, the White House
chief calligrapher now has a higher security clearance than Jared Kushner
does. That is not “The Onion”. That is CNN. That is literally true.

I mean – and the while this – while Jared`s difficulties mount, including
this news story from “The New York Times” tonight about him and his
companies receiving hundreds of millions of dollars in investment after he
took White House meetings with executives from those companies, the Jared
and Ivanka part of Trump world – they`ve been losing people left and
right. Josh Raffel was technically a deputy communications director at the
White House but what he really was, was a spokesperson for Jared and
Ivanka. He quit as of yesterday.

Another close friend of Jared and Ivanka who was put in charge of the
office of American innovation, a guy named Reed Cordish, he also just
announced that he`s quitting. And now, Hope Hicks is out as of tonight as
well.

The security clearance controversy that is so clobbered Jared Kushner over
these last few days, that, of course, was sparked by Hope Hicks`s reported
boyfriend in the White House. Rob Porter who was fired by the White House
three weeks ago after the publication of serious domestic violence
allegations against him. Seriously, that was only three weeks ago, doesn`t
it feel like a million years?

The other way to see this Hope Hicks story tonight though is just the math
of it. The massive, massive churn of high-ranking, high-profile and
important people in this administration, people who have already been
chewed up and spat out barely one year into president being in office, we
literally got a bigger wall. We`ve been keeping this running list of the
people who have been turfed out of this administration thus far, I am not
going to read this entire list again because god only gave me one set of
vocal cords and how often can I do this.

But let me just update you on this part of a list about the White House
communications office. White House communications office has now lost
press secretary, assistant press secretary, the White House director of
rapid response, the communications director, then another communications
director, now, another communications director with Hope Hicks tonight and
the assistant communications director with Josh Raffel yesterday.

And if we`re being complete about this since the last time we updated this
list on the air when the associate attorney general, Rachel Brand, left,
you can now also add the deputy secretary of homeland security, Elaine
Duke, who just announced she is leaving. The special representative for
North Korea policy, the top American diplomat in North Korea, who`s also
announced he`s leaving after 30 years. Plus, that guy Reed Cornish, the
Jared of Jared and Ivanka guy who was running the Office of American
Innovation, plus the senior advisor to the secretary of defense, Sally
Donnelly, who`s just left James Mattis` staff at the Pentagon as well.

I mean, at one level, this is hilarious. That`s ridiculous. They`ve only
been there a year. But it is not normal for the United States of America
to have this much instability and high level turnover and churn at the
White House.

And even though we have now come to expect it because this is what it`s
been like, it still somehow feels like a bigger deal than most that Hope
Hicks in particular is out just because on a personal level, it`s almost as
hard to imagine her leaving this president as it would be to imagine the
president`s children leaving him as well. But maybe they`re on their way
out now, too, now that they`ve been stripped of their security clearances?

It`s hard to imagine how they will keep their jobs without them, not if
they have to ask the calligrapher to steal them secrets, right?

When “The New York Times” first reported Hope Hicks` departure tonight, the
paper reported Hicks`s claim that she wasn`t leaving over anything in
particular, she`s been thinking about this for a while now, you know, just
never a good time to go. But she is quitting the day after she gave nine
hours of testimony on the Russia investigation, and it is hard not to see
this departure, not just as a big deal, but as something that may be
related to what else is going on in this helter-skelter tumultuously White
House, and specifically what is going on with the investigation into it,
where very important new reporting suggests that the investigation has just
taken a sharp turn to what the White House has to know is the worst part of
this scandal for them. And that is next.

(COMMERCIAL BREAK)

MADDOW: NBC News has a big scoop today about a turn in the investigation
into the president and his campaign, the turn that the president in his
campaign have to have been dreading the most since the very beginning. NBC
now reports the special counsel Robert Mueller is actively investigating
whether the president knew about the Democratic emails that had been stolen
by the Russians before they were publicly released.

Quote: Special counsel Robert Mueller`s team is asking witnesses pointed
questions about whether Trump was aware the Democratic emails had been
stolen before that was publicly known and whether he was involved in their
strategic release. Mueller`s investigators have asked witnesses whether
Trump was aware of plans for WikiLeaks to publish the emails before
WikiLeaks did publish them. The line of questioning suggests that the
special counsel is looking into possible coordination between WikiLeaks and
Trump associates in disseminating the emails which, of course, U.S.
intelligence officials say were stolen by Russia.

This strikes me as the development in the Mueller investigation that the
White House has been most hoping would never come. But this new reporting
from NBC News today says that day has arrived.

Joining us now is one of the two reporters who broke that story, NBC News
national political reporter Carol Lee, who`s bylined on this piece, along
with Katy Tur.

Carol, thank you for being here.

CAROL LEE, NBC NEWS NATONAL POLITICAL REPORTER: Thank you.

MADDOW: I see this as something that has to be upsetting to the White
House and worrying to them because this seems to me to be going right at a
criminal version of the word collusion. It seems to be trying to define
conspiracy and advanced knowledge about the Russian attack. Is that – is
that fair?

LEE: Yes, I think that`s a really good if you step back and take a big
picture look at it. It tells you that they are actively looking at this
question of collusion and really looking at whether the president himself
was involved in that. And so, it kind of debunks, A, the president theory
that he`s been cleared of any wrongdoing because that`s obviously not the
case, that these questions are being asked. And, two, that this is going
to wrap up anytime soon, because they`re still trying to get to the bottom
of this one very – one small piece but significant piece of this
investigation.

MADDOW: There was a moment from the campaign that everybody remembers.
It`s become a sort of touchstone and reporting about this when the
president said at a news conference on July 27th, said, Russia, if you`re
listening, I hope you`re able to find the 30,000 emails that are missing.

I have never paid that much attention to that. Sean Spicer later said the
president was joking. I can`t tell when this president is joking or not.
I don`t have – I`m not clued into his sense of humor well enough to know
that. You advanced reporting around that in a very serious way.

You say that witnesses have been asked if Trump was advised to make that
statement about Clinton`s emails from someone outside his campaign.

LEE: Right.

MADDOW: What does that mean?

LEE: Well, it means, was there somebody who was not necessarily in the
direct orbit of the Trump campaign. Could it have been somebody who was in
contact with somebody in the campaign?

But the main thing was, was there someone who directed him to say that?
Was it – the questions that they`re asking was this ad-libbed? Did
somebody say, you know, he needs to say this? Did he decide on his own
that he wanted to say this? Where did this come from?

And what`s really interesting to me about that is that as you know, because
you pay attention this so closely, we`ve all that all kind of got
everyone`s eyebrows up when he said that and everyone what does that mean,
and, you know, anytime we raised something like that, the White House will
push back and say, oh, that`s nothing, you`re making a lot out of nothing
he was joking and clearly someone like Robert Mueller thinks that it was
actually worth looking into and is looking into it.

And the idea that there could be either some sort of connection from
someone outside who then would be connected to the campaign and then got to
the president is another interesting point.

MADDOW: And just to clarify, obviously, there`s been a lot of reporting
and there`s information that we have that`s part of the George Papadopoulos
court filings where we know that there were people involved in the Trump
campaign who did have advanced notice that Russia had stolen emails from
Democrats, including the Clinton campaign. We know there were people on
the campaign who had that information in advance before the American public
knew about it.

Is there yet any information that you know from your reporting – from
reporting out this story that the president himself knew in advance before
the public did?

LEE: That is the big – that`s the question. That`s – you know, we don`t
know. We know that that`s being actively asked. I think that Papadopoulos
is a very important figure in all of this. His value as a witness is, you
know, because of that in a large way because he knows, you know, who else
if anyone in the campaign knew –

MADDOW: He was let in on a crime while it was in process.

LEE: Right. And we haven`t even talked about Roger Stone who had this
whole, you know, kind of footsie with WikiLeaks and was saying he was in
contact, but then he wasn`t in contact and what a direct contact, and
there`s been a lot of questions that Mueller`s team is asking about the
president`s relationship with Roger Stone and whether, you know, how they -
- how close they were, how much they talked after he left the campaign?

And, you know, Roger Stone says that he never told the president, that the
president never – they never discussed WikiLeaks and the release. But
that`s certainly – that link too is also something that they`re looking
at.

MADDOW: And again, the importance there is that if they knew this was a
crime in progress, there`s a question of whether they participated in it
but also whether or not they were basically in on it as a matter of
conspiracy.

Carol Lee, thank you very much for coming in and talking about this.

LEE: Thank you.

MADDOW: It`s been a big day of news. This is a really, really important
scoop.

All right. Yet more to come tonight. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Minnesota Congressman Rick Nolan just announced the other day that
he`s retiring in the fall. When he leaves, that will leave only one
Watergate baby left in Congress. The Watergate babies where dozens of
Democratic lawmakers who were all voted into office right after Richard
Nixon resigned. With Nolan leaving, that`ll leave just one of the
Watergate babies in Congress. The last one is Vermont Senator Patrick
Leahy, who was no longer a baby.

But those were this – this wave of young reform-minded Democrats who swept
into office in November 1974. Five new Democratic senators, 49 new
Democratic members of Congress all sent to Washington by voters in what
really felt like a very visceral response to the Watergate scandal.

That `74 congressional election played out alongside the Watergate crisis.
In August `74, Richard Nixon resigned. In September, new Republican
President Gerald Ford pardoned him.

In October, Nixon`s top aides all went on trial for conspiracy perjury and
obstruction of justice. Haldeman, Mitchell, Ehrlichman all went on trial.
By the end of October, right before the election, the Watergate special
prosecutor Leon Jaworski had resigned. Ad two weeks later, all these
Democrats were elected.

The Watergate babies, a Democratic wave that was started by a Republican
scandal.

Today in Washington, D.C., in federal court, Trump campaign chair Paul
Manafort pled not guilty to five of counts that he faces in the special
counsel investigation. The judge warned him again about the gag order in
this case and then set a trial date for Manafort for this round of charges.
The trial date will be September 17th, seven months from now, about six
weeks from the November elections this year, which means the Trump campaign
chairman is now slated to be on trial just as Republicans are trying to
defend their Trump Republican majority in Congress, trying to defend it not
just from Democrats but from the scandal that plagues this presidency.

Hold that thought.

(COMMERCIAL BREAK)

MADDOW: It`s been kind of a big day. White House communications director,
another one, out. President`s campaign manager just got a trial date for
right before the midterms. President`s son-in-law is accused in “The New
York Times” tonight of receiving hundreds of millions of dollars in loans
for his family business after meeting with executives from those lenders
and his White House role. It`s big night.

And so joining us now is Michael Beschloss, NBC News presidential
historian.

Mr. Beschloss, thank you for being here. Much appreciated.

MICHAEL BESCHLOSS, NBC NEWS PRESIDENTIAL HISTORIAN: My pleasure, Rachel.
I guess not much news, right?

MADDOW: Yes, exactly. It`s just a – you know, typical Wednesday.

BESCHLOSS: Right, right.

MADDOW: Let me ask you first about Mr. Manafort. Is their presidential
history that can help us understand what it might mean to have the
president`s campaign chair going on trial and a jury trial in Washington,
D.C. just as the midterm elections are happening?

BESCHLOSS: Well, it is very good for the Democrats if 1974 is any guide,
as you were talking about, because if that trial really begins in mid-
September, that`s going to be in the news every single day no matter what
else happens.

MADDOW: Is there anything that – I guess, again, just looking broadly to
presidential history, we got the news today that Hope Hicks is leaving the
White House. And one level, it`s just their third communications director
that they`ve been through.

BESCHLOSS: Right, right.

MADDOW: On another level though, this is somebody who`s seen is very
personally close to the president, somebody who`s been with him longer than
almost anybody else in the White House who`s not related to him. Is there
anything in history that can help us contextualize the loss of Hope Hicks
tonight?

BESCHLOSS: Well, we`ve got to know what the motive is. You know, she
claims that she`s doing this to be with her family. OK. But in case that
is not true, let`s look at John Dean who resigned in the spring of 1973,
Nixon`s White House counsel. Turns out that dean quickly concluded that
Nixon was trying to make him the fall guy for Watergate and so, he got out.
And Nixon at that point was worried about Dean being in the White House
circle getting more secrets that he might give to prosecutors.

So, if you, you know, take that and project that on do Hope Hicks, you
know, it`s a little bit you know suspicious timing that this would happen a
day after her testimony. And, you know, it`s a – you know, we don`t know
yet. We`re just reading the shadows on the wall, but maybe she is getting
the idea that she is getting at the very least swept up in this scandal.
And maybe Donald Trump is beginning to worry that she might one day be a
witness against him.

MADDOW: We know that she has spoken over multiple days to the Mueller
investigation.

BESCHLOSS: Right.

MADDOW: We know that was her own Russia lawyer. We know that she just
testified for nine hours yesterday and refused a lot of questions.

Still unfolding.

Michael Beschloss, NBC news presidential historian – thank you for helping
ground us, my friend. Much appreciated.

BESCHLOSS: My pleasure. Thank you, Rachel.

MADDOW: Busy night. We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: Just as we were getting on the air we got in these pictures
tonight from Axios.com. In case you don`t recognize these handsome gents,
that`s Attorney General Jeff Sessions having dinner at some fancy
restaurant with Deputy Attorney General Rod Rosenstein, who overseas the
Mueller investigation, and Solicitor General Noel Francisco, who
incidentally would end up overseeing the Mueller investigation if the
president fired Rod Rosenstein.

I don`t know why those all three of those gentlemen went out to have dinner
tonight in public tonight, and let reporters take their picture, seeing
them enjoying one another`s company. But that just happened tonight in
Washington, just as the president unleashed another fuselage of criticism
against his attorney general.

That does it for us tonight. I feel like we haven`t even started. We`ll
see you again tomorrow.

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

Good evening, Lawrence.


END


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