Government shutdown marks 17th day. TRANSCRIPT: 1/7/2019, The Rachel Maddow Show.

Guests:
Adam Smith, David Leonhardt
Transcript:

Show: THE RACHEL MADDOW SHOW
Date: January 7, 2019
Guest: Adam Smith, David Leonhardt

RACHEL MADDOW, MSNBC HOST: Thanks to you at home for joining us this hour
as well.

So, for a few weeks now, all the local headlines have described it as a
murder for hire case. And in part, it is. That is one very, very serious
part of this case. Here`s how prosecutors in the eastern district of North
Carolina spelled out that part of the case in just one of the criminal
complaints that has been filed in association with it.

They say, quote: While living in the United States, Leonid Teyf employed a
live in housekeeper that came from Russia. The housekeeper, her husband,
and their son all resided with the Teyfs. At some point, the couple`s
employment ended and they moved out of the Teyf residence. Likewise, their
son left as well.

However in February of 2018, Leonid Teyf told confidential human source
number one that Teyf believed his wife had been involved in a romantic
relationship with the housekeeper`s son. Teyf wanted additional proof of
the cheating. Teyf first told the confidential human source that he wanted
to pay someone to get the housekeeper`s son talking and then overdose him
on drugs.

Quote: At another point, Teyf told the confidential human source that he
wanted the housekeeper`s son to be kidnapped and taken into the woods and
forced to admit to having sex with his wife, forced to admit that on video
and then he should have killed. Teyf told confidential source number one
that he had hired a private investigator to help obtain information
regarding the whereabouts of the housekeeper`s son.

Ultimately, that private investigator would himself later be arrested and
charged with multiple felonies in conjunction with this case. But the
purported hit man that this guy allegedly hired to kill the housekeeper`s
son, that hit man ended up being a bad choice for that particular job
because the alleged hit man is also described in court documents around
this case as a confidential source who was working with the FBI.

According to prosecutors, this past summer, this guy Leonid Teyf arranged
for this would be hit man, a confidential source with the FBI, to pick up a
40 caliber pistol wrapped in plastic tape under a bush next to the Autowash
Express car wash on Six Forks Roads, in Raleigh, North Carolina. The gun
was left there for the would-be hit man to pick it up. That gun that was
left there under that bush at the car wash, it also, according to
prosecutors had it`s serial number filed off, presumably to make it more
difficult to trace that gun after it had been used to kill the
housekeeper`s son who this guy thought was shtupping his wife.

Prosecutors say, in addition to providing the would-be hit man with a gun
with the obliterated serial number, he also allegedly paid the would-be hit
man $25,000 to carry out the murder.

Now, paying the hit man $25,000 to kill the guy using the illegal gun, that
was apparently only one of the alleged criminal schemes this guy pursued.
Prosecutors say he also paid a $10,000 bribe to someone who worked at the
Department of Homeland Security because he believed that $10,000 bribe
could get this kid deported back to Russia.

Quote: Teyf explained to confidential human source one that if the
housekeepers son was back in Russia, he would be, quote, buried already.
So, it`s actually really two different murder-for-hire plots, right? He
apparently thought that bribing someone from Homeland Security Department
to get the kid deported to Russia would be as good as murdering him because
the kid would be killed once he had landed in Russia.

According to prosecutors, it was only when that plot was taking too long
that the guy decided he would go the more direct route and just pay a hit
man to shoot the kid. The housekeeper`s son, though, survived. It turns
out both the hit man and the bribed homeland security employee were working
for the FBI. And Leonid Teyf, the defendant in this case, has been
arrested and denied bond. He`s being held in custody in North Carolina.

But what makes this just – what makes this just a story of national
interest now and not just a particularly lurid crime saga from the
Carolinas is that apparently, the FBI and federal prosecutors only stumbled
upon this murder for hire, murder by deportation bribery case, they only
stumbled upon this by accident because what they were looking at this
Leonid Teyf guy for in the first place was a gigantic money laundering and
theft case, and I mean gigantic.

This looks like a government building. This looks like maybe a parliament
building, this is his house. This is the house in Raleigh, North Carolina,
that belongs to Leonid Teyf. It was raided in the FBI in the first week of
December. It is a 17,000 square foot house.

It`s along a golf course beyond these big walls and gates. After the FBI
raided that huge mansion and the first indictments were filed in this case,
we learned that prosecutors said they intended to seek forfeiture of that
huge 17,000 square foot mansion, plus another condominium owned by Teyf in
downtown Raleigh, North Carolina. That condo, when they raided that one,
turned out to be sort of a safe house where this guy was apparently storing
ammunition and cash and large numbers of guns.

Prosecutors are also seeking the forfeiture $400,000 worth of Mercedes Benz
vehicles that belong to Teyf. They`re also seeking the forfeiture of more
than $39 million stashed in dozens of bank accounts. All accounts
associated with Leonid Teyf and his family.

So where did this guy, Leonid Teyf, get the 17,000 square foot mansion and
hundreds of thousands of dollars worth of Mercedeses and the spare real
estate. It seems like he had a condo just for his guns and his cash, plus
$40 million in cash sitting around in a gazillion bank accounts. Where did
he get all of that?

According to the federal indictment against him, Leonid Teyf accumulated
all of that through an epic money laundering and theft operation, and the
alleged victim of this alleged theft was the government of Russia. This is
from the Justice Department press release announcing this indictment.

Quote: The indictment alleges that between 2010 and 2012, Leonid Teyf was
the deputy director of – I`m going to say this wrong, I was going to say
Voentorg, I don`t speak Russian. He was a deputy director of Voentorg, a
company which contracted with Russia`s Ministry of Defense to provide the
Russian military with goods and services. Teyf arranged for subcontractors
in Russia to fill the various services required by Voentorg`s contract.

Teyf and others devised a scheme requiring subcontractors to agree that a
certain percentage of the government funds they would receive for
completion of the work would be paid back to Leonid Teyf and others
involved in the scheme. These kickbacks of government funds were paid in
cash and amounted to more than $150 million over an approximate two-year
span.

A hundred fifty million dollars over 2 years. That`s a lot of cash.
That`s a lot of kickbacks. I mean, that`s – I mean, if that`s the
kickback amount, that`s a lot of contracts for which this guy was getting
these kick backs, right? I mean, $150 million has to be a portion of the
overall contracts that he`s giving out if that`s his cut.

It`s interesting, though. This is a U.S. criminal case. All of that money
was allegedly stolen from Russian defense contracts, but the government in
Russia does not much seem to mind. They have not been pursuing this guy
for this. It`s U.S. prosecutors who are pursuing him and it`s U.S.
prosecutors that are saying he did it.

And that may be an important clue as to what`s really going on here and the
overall importance of this case. I mean, on its face, this is just a
riveting lurid crime story which has been a real focus for local news in
North Carolina for weeks now for all sorts of obvious reasons. I mean, the
condo with no furniture in it stashed full of guns and ammo and money and
the hit man and the bribe for the deportation and the hiding the gun with
the obliterated serial number under the bush at the car wash and the
gigantic mansion and all the expensive cars – I mean„ you can imagine
like LL Cool J and Chris O`Donnell solving this one on NCIS, right? I
mean, this is really over the top.

But now, here`s the big twist that makes this not just a crime story and
not just a North Carolina story. In Russia, independent media, of course,
has been ruthlessly targeted and shutdown and basically criminalized under
the Putin government but independent media is not gone all together and one
of the absolutely fearless, independent Russian news outlets that remains
in the Putin era is called Novaya Gazeta. Novaya Gazeta`s journalists are
regularly threatened and not infrequently murdered in Vladimir Putin`s
Russia, but they still exist and they still persist and they still report
out uncomfortable news stories that the Russian government doesn`t want
anybody reading about.

And Novaya Gazeta has just reported something new about this lurid murder
for hire crime case in Raleigh, North Carolina. What they`re now reporting
is a sort of crucial alleged detail about how this guy, Leonid Teyf, got so
lucky as to happen upon an insanely lucrative cash kick back scheme in
Russia where he was able to siphon out $150 million from Russian defense
contracts, $150 million in two years without anybody in the Russian
government batting an eye and with nobody coming after him. According to
Novaya Gazeta, this guy Teyf who`s now sitting in jail in North Carolina
while prosecutors make plans to seize his mansions and his cars and his
guns and tens of millions of dollars that he stashed in dozens of North
Carolina banks, according to Novaya Gazeta, the way he got that money in
the first place was yes, through this kickback scheme in which he was able
to pocket tons of money himself for doling out contracts for the Russian
military.

But specifically what they`re reporting now is that the contracts he was
doling out, the person he was steering billions of rubles worth of business
to in this scheme, was this guy. His name is Yevgeny Prigozhin. And the
reason he looks oddly familiar to you is because Yevgeny Prigozhin is
becoming famous in the United States in his own right. He`s the guy they
call Putin`s chef. He is the billionaire oligarch close to Vladimir Putin
who became a billionaire oligarch in large part because of these huge
ruminative contracts he was given from the Russian defense ministry,
reportedly through this guy who is now being arrested and is sitting in
jail in North Carolina.

Yevgeny Prigozhin is believed to operate the mercenary operation in Syria
that has put Russian paid fighters into direct battle with U.S. troops. He
is also famously the guy who ran the Internet Research Agency, which
resulted in him becoming a defendant in one of the major indictments
brought by special counsel Robert Mueller last year. Yevgeny Prigozhin was
charged personally, along with his companies and along with a whole bunch
of Russian military intelligence officials. Together, they were all
charged last night with running the online social media operation of the
Russian government`s campaign to disrupt our last presidential election and
throw it to Donald Trump.

Now, when Mueller and his prosecutors brought that case against all those
Russians, Prigozhin, the oligarch, and his companies and all those Russian
military intelligence officers last year, nobody thought that any of those
Russian defendants would ever see the inside of a U.S. courtroom, let alone
a U.S. jail. Everybody thought it was essentially a speaking indictment to
let the American public know what Mueller had found out about the behavior
of these Russians. Nobody ever thought any of those defendants would ever
even bother to enter a plea in conjunction with this case or otherwise
engage with this case or the U.S. courts in anyway.

It thus came as something of a surprise when, in fact, Prigozhin`s
companies hired U.S. lawyers and engaged on this case. They entered a not
guilty plea in that criminal case. It seemed like a sort of legal oddity
at first, but it soon became clear that the point of Prigozhin hiring
American lawyers and contesting this case in court was to try to use the
case and use those lawyers to challenge Robert Mueller, to challenge the
special counsel`s investigation, to try to maybe even mess up Mueller`s
inquiry.

He had probably seen coverage over the last two weeks about some of their
tactics because they`re designed to get headlines. Their tactics include a
whole bunch of increasingly snarky and propane court filings produced by
Prigozhin`s lawyers in this case. They have quoted the movie “Animal
House”. They have quoted cartoon characters. They have used curse words.
They had made increasingly florid allegations about the special counsel`s
investigation more broadly and about Robert Mueller personally.

You might have seen reference in the last week or so to a sort of joking
reference in a court filing to a nude selfie that may exist in the Mueller
case. That came from one of the super snide, deliberately provocative
filings from Prigozhin`s lawyers.

But all the attitude from Prigozhin`s lawyers and I think, admittedly,
deliberately provocative nature of the way they argued this case for their
Russian clients, doesn`t mean they aren`t doing something serious here. I
mean, they have attempted to mount a serious challenge to Mueller`s
authority. They`re trying to get the special counsel`s investigation
shutdown.

Specifically, they have structured their defense strategy in this case to
try to get something that the Russian government might want out of the
special counsel`s investigation. They have structured their defense
strategy in this case to try to obtain massive amounts of information about
the operations of the U.S. government and specifically, the operations of
the special counsel`s office. They have tried to use their role as a
defendant in this case, to get information about what the special counsel`s
office has turned up while it`s been looking into Russian interference in
our election.

And, of course, the Russian government would love to get their hands on
that information, right? So, there`s been a very serious litigation battle
going on related to this case where Prigozhin`s lawyers have been arguing
in federal court in Washington that they want to use the discovery process
in this case to obtain tons of information, like decades worth of
information about the operations of the U.S. government. They want to
obtain decades worth of information about operations of U.S. foreign
policy, U.S. military policy, U.S. intelligence agencies, U.S. operations
overseas. They want to obtain as much information about as they can about
the U.S. government, particularly as it pertains to Russia, and about the
special counsel`s office and what Mueller`s investigation has turned up
thus far.

And specifically, one of the things they have been fighting about in court
is that they want to not only obtain that information as part of this court
case, they want to then provide that information to Yevgeny Prigozhin,
Putin`s chef, right? The oligarch back home.

And Prigozhin himself has no intention of coming to the United States and
getting arrested and facing trial, but his lawyers are arguing that all of
this information, all of this sensitive national security information,
sensitive information about the investigation should be extracted from
Mueller and extracted from the U.S. government and sent to Prigozhin in
Russia. And that of course would be a serious thing, right? That would be
just the same as sending all of that sensitive information correctly to the
Kremlin.

So that`s what this litigation fight has been about. The national security
division of the Justice Department is involved. Special counsel is
involved. The U.S. attorney in D.C. is involved. It`s been interesting
litigation.

But that`s what made it amazing today in federal court in D.C. when the
federal judge who was presiding over this case, presiding over all of this
legal wrangling basically decided to stick a pin through Prigozhin`s
lawyers and pull the dude`s wings off. We got the transcript from today`s
proceeding.

Quote, the judge: all right, I scheduled today`s status conference for
several reasons. First, I would like to set a hearing date to hear
argument on Concord`s motion for approval to disclose discovery. Concord
is Prigozhin`s company. So, the defense council is representing Concord
Management.

Second, I want to discuss the firewall counsel process to make sure that
we`re on the same page. Finally, I want to discuss Concord`s pending
motion to compel discovery which is now ripe. Due to the grand jury
material that is the subject of the motion, I will address the merits of
the motion in a sealed proceeding.

But then the judge says this to Eric Dubelier, who is the lawyer for
Concord Management, for Prigozhin`s company. The judge says this, quote:
Mr. Dubelier, I will tell you now that I found your recent filings,
particularly the reply brief that you filed on Friday to be unprofessional,
inappropriate, and ineffective. In a few weeks, once Concord`s motion for
approval to disclose sensitive discovery is ripe, I will again consider
arguments that Concord previously raised about the scope of discovery
that`s been provided to its officers and employees. I have issued several
rulings on all of Concord`s pretrial motions and I hope to discuss the
timing for trial date on this case at our next court date.

But, Mr. Dubelier, you will prevail on your motion for release of sensitive
discovery if and only if the facts and the law are on your side. Meritless
personal attacks on the special counsel, his attorneys, other members of
the trial team and firewall counsel will play no role in my decision on
your motion nor will inappropriate and what you clearly believe to be
clever quotes from movies, cartoons, and elsewhere. Your strategy is
ineffective. It is undermining your credibility in this courthouse. I
will say it plain and simple, knock it off.

Direct quote from the judge. Knock it off.

And at that point in the proceeding, the judge goes into a sort of lengthy-
ish back and forth with prosecutors about whether certain proceedings
should happen in open court or whether they should happen with the
courtroom cleared and under seal. After that back and forth, she then
turns back to Eric Dubelier, the lawyer for Prigozhin`s company for Concord
Management. The judge says, quote, Mr. Dubelier, why shouldn`t requests to
share sensitive discovery with attorneys, paralegals, translators, and
other individuals why should that not be litigated in open court?

Mr. Dubelier says, quote: Your honor, I`m not prepared to address this or
any of the other issues you`ve raised without consulting with my client.
You`ve accused me of being unprofessional and inappropriate.

The judge: And I think you have been.

Dubelier: All right. Well, that`s what you have accused me of. I need to
go now and discuss with that my client and see if my client wants to
continue to retain me to represent them in this matter, seeing as there
appears to be a bias on the part of the court against me.

The judge: There`s no bias on the part of the court, Mr. Dubelier.

Dubelier: Well, when you personally say to someone in public that they`re
unprofessional and inappropriate I take that –

The judge: and what have you been personally saying about the special
counsel and the trial team in open court?

Mr. Dubelier: I have been telling the truth. Every pleading I have filed
before this court, I have told the truth.

The judge: Mr. Dubelier, you have had many inappropriate remarks in your
filings and you know it.

Dubelier: Your honor, that`s your opinion. That`s your opinion. I
disagree with you. But that`s your opinion. You`re entitled to it.

What I am entitled to do is discuss that with my client before I can go any
further.

The judge: You are certainly entitled to discuss that with your client but
I`m going to direct you and the government to sit down and meet once you
have spoken with your client and assuming you`re still representing your
client and work through some of these issues with a protective order.

Mr. Dubelier: We tried to do that, your honor, early on and the governments
answer to everything is no.

The judge: I`m directing them to sit down with you again and try to work
through some of those issues pursuant to my order. Understood?

Mr. Dubelier: Yes, understood.

So at a very basic level, the way the whole oligarch thing works under
Putin, if you`re the right kind of guy, it`s always guys. There`s no lady
oligarchs, right? If you`re the right kind of guy, Putin will let you get
rich, really rich, fabulously rich. He will happily and profoundly rip off
the Russian people, rip off the Russian government, rip off the assets of
the Russian nation to make you personally fabulously wealthy.

But then he owns you and you serve him. You, as a fabulously wealthy
person serve the interests of Vladimir Putin and the interests of Russia
and the Russian government as defined by Vladimir Putin. In the case of
Yevgeny Prigozhin, a system was devised mostly involving Russian defense
contracts that would make Yevgeny Prigozhin spectacularly wealthy, and he
is.

The apparent bag man who ran that operation for Prigozhin was allowed
himself to skim off $150 million in cash over just two years. He is now
sitting in a jail cell in North Carolina where prosecutors are pursuing him
not only for the lurid double murder for hire plot that he apparently
carried out against the guy he thought was shtupping his wife, they`re also
going after him for the massive theft from the Russian people and the money
laundering operation that followed that allowed him to accumulate such
astronomical wealth and then try to stash and spend it in the United
States.

The Russian government appears to be fine with that, but U.S. federal
prosecutors are not. Now that they`ve got him, what threads does that
guy`s case pull, right? Prigozhin for his part, in terms of his service to
Vladimir Putin and the Russian government, he ran part of the election
interference intelligence operation for the Russian government during 2016,
according to Mueller`s prosecutors. He ran all the Internet Research
Agency, all the social media stuff that targeted our election to try to
swing it toward Trump.

Prigozhin has since tried to turn his own indictment in that case to the
advantage of the Russian government by using the U.S. court system to try
to extract sensitive national security information from the government and
from the investigation of the special counsel. Well, this afternoon, a
U.S. federal judge, a Trump appointee brushed that effort way back with a
public dressing down and honestly, a public humiliation of the American
lawyer who was trying to carry out that effort and make a public spectacle
of it at the same time. Depending on what happens next here, it looks like
that lawyer is maybe out and that may indicate even weirder turns to come
in this case. This is already one of the weirder story lines in the whole
Russia scandal, in the whole Mueller investigation.

That said, new weird stuff happens all the time. I`m sure we have not hit
the bottom on weird. And for what it`s worth, the federal judiciary as a
whole is due to run out of money in four days. As of the end of today, the
federal government shutdown we are now enduring is the second longest one
in U.S. history. If the shutdown persists through the end of the week, the
U.S. federal court system announced the U.S. federal judiciary will be out
of money and will have to start triaging it`s operations as of Friday this
week If the shutdown persists beyond that, if it goes on through Saturday,
that will make this the longest U.S. government shutdown in American
history.

The consequences of the shutdown are becoming increasingly serious and
expensive. As we head into our third week of this. That`s not just for
federal workers and their families, that`s for whole swathes of the U.S.
economy that basically crank down and stop working when the federal
government does too. We have had government shutdowns before. But again,
this is becoming one of the longest ones ever.

One of the things we are learning in this one is that it matters when
there`s a shutdown whether or not the government is generally being well
run or poorly run. That can make a difference as to how well the shutdown
goes too. And that is why one particular White House proposal about the
shutdown is putting a real shiver down people`s spines for how much worse
this whole thing could get and quickly.

That story is next. Stay with us.

(COMMERCIAL BREAK)

MADDOW: As the government shutdown hits its 18th day as of midnight
tonight, the president has announced he plans to give his first ever
national address from the Oval Office at 9:00 p.m. Eastern Time tomorrow to
talk about the border and the shutdown.

Welcome to 9:00 p.m. Eastern, Mr. President. Come on in. The water`s
fine.

As we get ready for that, there`s rising concern that the president might
decide that he might even use the speech to announce he`s declaring a
national emergency to theoretically set the stage for him to try to
reallocate existing resources from the Pentagon to try to rebuild the wall
on the southern border, even if Congress won`t appropriate any money for
that. Given the legal novelty of that kind approach, the controversy
around that kind of approach if the president decides to go that way, what
kind of a situation would that put the military in when it came to whether
or not to cough up that money and whether or not to assign active duty
soldiers to carry out orders related to that? If this emergency
declaration from the president were ultimately considered to be illegal,
would the actions of U.S. troops or officials who are ordered to carry it
out also be illegal acts?

This potential dilemma arrives at a time when things between the White
House and the military seem to be hard to figure out. In the immediate
aftermath of the resignation of Defense Secretary James Mattis, it was not
clear whether there might be an exodus at the Pentagon following him out
the door.

Over the weekend, we learned that the chief of staff to Secretary Mattis
was resigning, Pentagon chief of staff. But now, “The Wall Street Journal”
is reporting that his resignation was not voluntarily. “The Journal” is
reporting that Kevin Sweeney did not leave the Pentagon on his own accord.
He was forced out.

Quote: The chief of staff for the Pentagon has been forced out of his post
by the defense department`s new acting head, said multiple U.S. officials.
Sweeney had worked alongside Mattis at several points during his career.
Quote: The bond was a source of concern to the White House, U.S. officials
said, adding that the appointment of Pat Shanahan as acting secretary by
President Trump last month was seen as an opportunity to remove Mr.
Sweeney.

Quote: Sweeney had expressed a desire to stay on at the Pentagon as
recently as last week. As recently as last week, and they pushed him out.
We all expected or anticipated or at least wondered if one of Mattis
leaving would be that officers and senior civilian staffers who are running
things under Mattis might go in his wake as well.

And we have seen some high level departure since Mattis left but if that`s
not the full story, if part of what`s happening now is the White House and
the new Trump appointing acting defense secretary, they`re instead going
off and picking off people at the Pentagon who are Mattis-like and getting
them out of the Pentagon behind Mattis` departure, well, that`s kind of an
entirely different dynamic, isn`t it?

Joining us is Congressman Adam Smith, chairman of the House Armed Services
Committee.

Congressman Smith, Mr. Chairman, thank you very much for being with us.
It`s nice to see you.

REP. ADAM SMITH (D-WA), CHAIRMAN, HOUSE ARMED SERVICES COMMITTEE: Thanks
for the chance, Rachel. I appreciate it.

MADDOW: So, “The Wall Street Journal” reports that the Pentagon chief of
staff didn`t resign. He was pushed. I wanted to ask your response to that
and if you`re at all concerned about senior staffing at the Pentagon in the
wake of Secretary Mattis` resignation?

SMITH: Well, I am because I`m concerned about Secretary Mattis departing
because – I mean, we`ve all read the story. He was the adult in the room,
right? He could check some of the president`s worst impulses, obviously
not all of them, but Secretary Mattis had so much credibility with the
military and our national security and just as a person that his word
carried a lot of weight. He has a lot of allies and friends in the
Pentagon.

And when Secretary Mattis resigned, he says he could no longer work for
President Trump, because he didn`t – not only not agree with his
decisions. So, I think the more important part is he didn`t agree with the
way the president made them in such a chaotic, off the top of his head way
that were not well thought out and didn`t seem to have any plan behind
them.

So the last table people that are at the Pentagon, the more nervous we
should all be. Secretary Mattis leaving is a huge blow. But we need to
keep as many people there as possible to understand the way things are
supposed to work. Clearly, the president does not.

MADDOW: With the government shutdown now becoming the second longest ever
and no real end in sight, the president has announced this primetime
address to the nation as first from the Oval Office tomorrow night. How
serious do you take the sort of crescendo of discussion we`re hearing about
the president considering a declaration of an emergency so he can take
funds from the Pentagon and essentially use those funds to build his wall
or do whatever else he wants to do without Congress appropriating the money
to do so?

SMITH: Well, I take it very seriously, precisely because this president is
so unpredictable. I mean, he changes his mind depending on who talked to
him last or what story is done on Fox News. So, the fact that he might
want to do this is a distinct possibility and I think it would be a
colossal waste of money for one thing. The building a wall is not even
going to help with border security and we don`t have a border security
crisis.

So, we`re talking about $5 billion, $6 billion in this dispute that the
president has shutdown the government over. But if he`s actually going to
build this wall he keeps muttering about, it`s going to cost between $20
billion and $30 billion and if you take that much money out of the
Pentagon, and it comes specifically, the emergency clause that he`s
referencing would come specifically out of the military construction budget
in the Pentagon. This would undermine the readiness of our national
security. It would take money away from building the facilities that our
troops need to be equipped and prepare for the mission we want to send them
on and spend it on the wall.

And I think the president, you know, we`ve seen, he makes decisions like
this all the time. There`s a risk that he could do it and it would be a
huge waste of money. Now, I think he`d be subject to a court challenge
very quickly. As I understand it, this authority has been used to build
things in Iraq and Afghanistan.

Basically, once money is obligated within the Pentagon, the president can`t
decide to change it, unless he declares an emergency. So in Iraq and
Afghanistan, a few times, the presidents did that because they needed to
build something in those places in light of our troop presence there but to
do it for a wall on the southern border, where`s the emergency? I think
the courts would overturn this quickly except, of course, for the fact that
as we all know, the Supreme Court is a rubber stamp for Trump`s agenda and
they have forgotten about the fact that they`re supposed to be a judicial
branch.

So, there`s a risk they would let him get away with it and a distinct risk
that he would do it.

MADDOW: Congressman Adam Smith, new chairman of the House Armed Services
Committee – sir, you have a big weight on your shoulders and a huge
responsibility with that new job. Thanks for talking to us tonight. I
hope you`ll come back in weeks and months ahead. I know you`ll have a lot
on your plate.

SMITH: Anytime. Thanks, Rachel.

MADDOW: Thanks very much. All right. Much more ahead tonight. Stay with
us.

(COMMERCIAL BREAK)

MADDOW: So, this isn`t getting at ton of attention yet, but I think that
probably cannot last. For the past couple of – I know we`re just out of
the holiday and everything, but this is important.

For the past couple of weeks, including over the holiday, we have been
watching what looks like a concerted effort by the Democratic leaders that
now control the U.S. House of Representatives, a concerted effort by them
to overturn a bit of conventional wisdom. I`m not sure if people are
picking up on the importance of this yet. But I think it`s clear what`s
going on, what they`re trying to do.

Leading Democrats in key positions of the new Congress are actively trying
to disabuse us the public of the notion that a sitting president cannot be
indicted. On this show last month, Congressman Jerrold Nadler, who`s the
chair of the Judiciary Committee, he told us on this show that he doesn`t
believe that Justice Department guidance on that question is correct.
That`s a big deal, right? He`s the guy that would take the lead on any
impeachment proceeding. He runs the Judiciary Committee.

And he`s saying publicly, no, no, no, the president doesn`t have to be
impeached. That`s not the only remedy. The president absolutely can be
indicted.

Then, just last week, the new Democratic speaker of the House, backed Jerry
Nadler up on that. Nancy Pelosi telling NBC News in an interview that
whether a president can be indicted is, quote, an open discussion in terms
of the law, saying that the OLC memos from the Justice Department that say
that a president can`t be indicted, she does not believe those are
conclusive.

I mean, this is something people have been treating as a settled issue,
right? Justice Department rules say a president can`t be indicted, but the
new speaker of the House, the new head of the Judiciary Committee, they`re
both saying that they disagree.

And now, another top Democrat has joined them.

(BEGIN VIDEO CLIP)

JAKE TAPPER, CNN ANCHOR: There`s an Office of Legal Counsel memo in the
Department of Justice, I think it dates back to the Nixon years but maybe
I`m wrong. But it states that a sitting president shouldn`t be indicted.
That`s not a rule. That`s not a law. But it`s a suggestion from the
Justice Department.

REP. ADAM SCHIFF (D-CA), CHAIRMAN, INTELLIGENCE COMMITTEE: I think
actually when you look at the OLC opinions, there`s a powerful case being
made that you can indict a sitting president. It`s more difficult to make
the case that they should be tried while they`re in office because that
would be disruptive of the president`s responsibilities, but the only
argument and it was not the focus of attention in those prior OLC opinions,
the only argument was that it was stigmatize the president.

Well, the Justice Department already crossed that when they said individual
number one, the president was implicated in these two crimes. So, that has
already – that bar has already been passed.

(END VIDEO CLIP)

MADDOW: Congressman Adam Schiff is the chair of the Intelligence Committee
is speaking there about those two crimes. That`s the two campaign finance
felonies to which the president`s long time lawyer pled guilty last year,
in which federal prosecutors said in court filings, President Trump
directed him to commit. Congressman Schiff went on to say that if
prosecutors have a solid case against the president on those felonies, not
only can the president be indicted but prosecutors by rights should go
ahead and indict him now to make sure he doesn`t run out the clock on the
statute of limitations of any crimes he has been charged with while he is
in office.

Meanwhile, another Intelligence Committee Democrat, Congressman Eric
Swalwell of California, he has been saying in recent days that he thinks
it`s possible that prosecutors in the Southern District of New York may
have already indicted the president and it is a sealed indictment.

So, top Democrats are going out of their way to signal that when it comes
to the criminal investigation surrounding the president, you shouldn`t rule
out an indictment for President Trump while he is still serving as
president. Among other things, that could have major implications as to
whether House Democrats are planning on ever starting impeachment
proceedings against him.

I mean, if Democratic leaders have decided that indicting the president is
possible after all, is that effectively a way of getting impeachment
questions off the table. Are we seeing the Democrats punt to the special
counsel and federal prosecutors to let them handle this issue instead? If
so, is that a good idea?

Hold on, more coming.

(COMMERCIAL BREAK)

MADDOW: Quote: The United States has never had a president as demonstrably
unfit for the office as Trump. And it is becoming clear that 2019 is
likely to be dominated by a single question. What are we going to do about
it?

“New York Times” editorial page went big, 3,000 words big this weekend with
a long and potent argument from the columnist David Leonhardt making the
case that the president`s, as he argues, unfitness for office, should call
to question now as to how the president should be removed from office, now.

Quote: The easy answer is to wait to allow the various investigations of
Trump to run their course and ask voters to deliver a verdict in 2020.
That answer has one great advantage that would avoid the national trauma of
overturning an election result. Ultimately, however, waiting is too
dangerous. The cost of removing a president from office is smaller than
the cost of allowing this president to remain.

Joining us now is David Leonhardt, columnist for “The New York Times”.

David, thank you very much for being here.

DAVID LEONHARDT, COLUMNIST, THE NEW YORK TIMES: Thank you for having me,
Rachel.

MADDOW: This is provocative and powerful as an argument. I felt like I
sort of had heard every argument about the damage that could be done from
this president remaining, and you have put this out there very potently. I
wanted to ask you, why now? What makes you feel like you need to break
glass in case of this kind of emergency?

LEONHARDT: I feel like the last two months, since the midterms of 2018, we
started to see more of the risks, what feel like the beginning of the tail
end risks of the Trump presidency come to the fore. I mean, you shut down
the government essentially because some cable TV news hosts, and nothing
against cable TV news hosts but they shouldn`t be running the government.

MADDOW: If I ever tell anybody to shutdown the government, feel free to
ignore me.

LEONHARDT: Fair enough, basically told them to, right? And he has pulled
the United States troops out of Syria and beginning to do so because of
Turkish autocrats suggested he do so. And we`ve seen Jim Mattis, his
defense secretary, who is kind of seen as one of the last bastion of sanity
leave and criticize the president on the way out.

And so, I think the risk of the damages that he can do are growing. And
so, I`m not suggesting that we may talk about this, impeach him now. I
think we need to come to terms with the fact that we should do anything we
can to get him out of this very important job.

MADDOW: Do you think that – when you talk about these tail end
consequences that we can see, do you think that some of the danger that
you`re describing there, some of the increased danger is because of the
president`s increased liability of the investigations that surround him.

LEONHARDT: Yes.

MADDOW: Because they lead him to more desperate situations.

LEONHARDT: Yes, and I think there was this fiction that existed for
awhile. It was sort of – it was unprovable there was fiction until the
midterms, that he was politically invulnerable, that somehow he had a magic
sauce, right, and he would defy the polls. And then we saw the midterms
and he got trounced.

I mean, the Senate is tricky, look, because so many of the races were on
Republican soil. But in the House, the Democrats won the national house by
9 percentage points. He got trounced.

And so, I think what you`re starting to see if he realizes he has some
vulnerability. Republicans have some vulnerability. And Mueller seems to
be to one degree or another closing in. And so, what I worry about are
one, as Mueller continues to close in or as he fights for his re-election,
he could do many worse things.

I also think we are not paying attention to the possibility that something
terrible external happens – war, a financial crisis, a terrorist attack, a
terrible national –

MADDOW: A non-self-inflicted externality.

LEONHARDT: Yes. And, look, I`m not the biggest fan of George W. Bush`s
presidency, but George W. Bush remained a competent president to the end
and he had none of the ethical issues that Trump does. And if you think
about what Bush did in his last two years, he managed the disaster in Iraq
responsibly and he managed the financial crisis extremely responsibly.

I`m not saying that he doesn`t deserve blame for what happened before but
imagine Donald Trump trying to manage a natural disaster or a war or a
financial crisis. I find it frightening and I worry we would look back and
say, how did we not get rid of him beforehand?

MADDOW: There`s one element of how this is or may be proceeding that I
want to ask you about which is I think a new spin on how the prospect of
impeachment and the prospect of indictment are interacting with each other?
Can you hold on and have that discussion when we come back?

LEONHARDT: Of course.

MADDOW: We`ll have that discussion when we come back.

David Leonhardt is here for “The New York Times”. We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: Joining us once again is David Leonhardt, “New York Times”
columnist who wrote this column, “The People Versus Donald J. Trump” in
Sunday`s paper. It`s a 3,000-word argument about the urgency of the need
to remove this president from office.

And in part, David, I think you`re trying to change the common wisdom a
little bit about whether or not Republicans would ever support the removal
of this president from office.

LEONHARDT: Yes.

MADDOW: You think that`s something that is sort of ticking in the
direction of removal?

LEONHARDT: Potentially, right? I think there`s a lot of conventional
wisdom that Donald Trump`s approval rating is 40 percent. It`s never gone
below that roughly, and it`s not going below that.

And I think that`s wrong. I think if you look at the history – I mean,
look, you know the history of Spiro Agnew better than anyone at this point.

MADDOW: “Bag Man”, yes.

LEONHARDT: If you look at Agnew, if you look at Nixon, they had
unbelievably solid support in `73 and then it went away. So I think as
more allegations and more revelations come out, I think it`s possible that
Republicans will decide it is no longer in their own personal political
interest to support Trump. I wish I thought they would do it on the
merits. I think that`s probably unlikely, but I do think it`s possible
that they`ll look at this and they`ll say this is a bad deal for us.

MADDOW: So, you`re describing a couple of different times just since we
have been talking, describing continued revolutions from the Mueller
investigation, from other criminal probes as potentially being an engine
driving broader political considerations around the president. That
whatever the investigation can do in it`s own terms, when it exposes
potential wrongdoing by the president, that will change the political
realities on the ground.

There`s a really serious question, though, as to whether or not the
investigation itself might produce some sort of actionable eject button
from this president. Whether the president could be indicted, whether or
not the president has been indicted already under seal, as Congressman
Swalwell from the intelligence committee is now suggesting.

What do you take that dynamic as Democrats in positions of leadership
increasingly highlight their view that apparently they think the Justice
Department policy precluding an indictment might be soft, might be
overturnable?

LEONHARDT: I mean, I guess I`m a little small C conservative on that,
because I think there`s enough debate about whether a sitting president can
be indicted. I don`t think there`s any good substantive debate about
whether Donald Trump is fit to be president. I think he is not, right?

So I guess I would rather see the attention focused on the things he has
done wrong. The ways he has violated his constitutional oath and broken
the law and I think pressure needs to be put on Republicans to eventually
get rid of him, and I`m then open to the question of whether a sitting
president could be indicted or whether he could be indicted when he left
office. But I guess I worry a little bit, his sins have been so bad, I
would rather keep attention on that rather than on the procedural questions
of what do we do about the terrible things that President Trump has done?

MADDOW: David Leonhardt, columnist at “The New York Times”, calling the
question on this in a very eloquent way. Thank you for being here.
Appreciate it.

LEONHARDT: Thank you, Rachel.

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

(COMMERCIAL BREAK)

MADDOW: That does it for us tonight. Thank you for being with us.

We will see you again right here at this time tomorrow. But keep in mind,
the president, 9:00 p.m. Eastern tomorrow is going to be giving his first
address to the nation from the Oval Office. You will want to be here with
us for that.

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

Good evening, Lawrence.


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