All In with Chris Hayes, Transcript 5/26/2017

Guests: Michael Daly, Cornell Belcher, Liam Donovan, Lizzie Widdicombe, David Cay Johnston

Show: ALL IN with CHRIS HAYES Date: May 26, 2017 Guest: Michael Daly, Cornell Belcher, Liam Donovan, Lizzie Widdicombe, David Cay Johnston

STEVE KORNACKI, MSNBC HOST: A very busy hour. Azi Paybarah, Michelle Goldberg, Evan Siegfried and our cast of thousands for this hour, thanks everybody for joining us. Happy Memorial Day weekend, obviously we will follow all of this throughout the evening here on MSNBC. And "ALL IN" with Chris Hayes starts right now.

CHRIS HAYES, MSNBC HOST: Good evening from New York, I`m Chris Hayes and we once again have breaking news tonight about the Trump campaign and Russia, and it is a doozy. The Washington Post citing U.S. officials briefed on intelligence reports reporting that Jared Kushner and Russia`s Ambassador to Washington, Sergey Kislyak, discussed the possibility of setting up a secret and secure communications travel between Trump`s transition team in the Kremlin using Russian diplomatic facilities in an apparent move to shield their pre-inauguration discussions from monitoring. According to the Post, Ambassador Kislyak said Kushner suggested using Russian diplomatic facilities in the United States for the communications and reportedly Kislyak was taken aback by the suggestion of allowing an American to use Russian communications gear at its Embassy or Consulate, a proposal that would have carried security risks for Moscow as well as the Trump team. So it appears that Jared Kushner met with the Russian Ambassador in secret, reportedly to set up a back channel possibly in Russian diplomatic facilities. Kushner then omitted this meeting on his SF86 Security Clearance Form. And when he was called on it months later in April of this year, his lawyers called it an error. But if Kislyak`s account is accurate, how likely is it that Jared Kushner just forgot about a cloak and dagger meeting with a foreign agent to set up a secret back channel? How likely is it that his omission of that meeting to U.S. officials was simply an oversight? Jared Kushner could have read on the clearance form he filled out that knowingly falsifying or concealing information is a felony punishable by up to five years in prison. Joining me now by phone is one of the authors of that report, Washington Post Reporter Greg Miller. Greg, put some context for this. How unusual is this?

GREG MILLER, WASHINGTON POST REPORTER (via telephone): It`s hard to even assess how unusual it is. I mean I just can`t think of any scenario in which an incoming administration, a senior adviser and, in fact, a relative of an incoming President would want to - would suggest this sort of secret back channel communication with Moscow, let alone doing so using Russian communications facilities.

HAYE: What is the context of this meeting?

MILLER: Well, so it comes in early December, so about a month after the election. So this is before, you know, the Flynn meetings that were - the Flynn conversations he got the National Security Adviser ultimately pushed out of office. And it`s at a time when both sides, Russia and the Trump transition team, are sort of still, you know, preparing for a warming of relationships.

HAYES: And does this meeting happen in Trump Tower in New York?

MILLER: Yes. so the meeting happened in Trump Tower on December 1st or 2nd. The White House hasn`t been clear on the specific date. And we`ve known about that meeting for quite a while. We`ve known that Kushner and Flynn met with Kislyak there and then. We didn`t know until tonight that they had discussed in that meeting setting up a secure, secret, separate channel for communications coming out of that session.

HAYES: And we know that your reporting suggests based on intelligence intercepts of a report on the conversation that Kislyak sent to other Russian officials, is that correct?

MILLER: That`s right. And that`s an important point here. So this is Kislyak reporting back to Moscow. This is not the U.S. monitoring this meeting at Trump Tower, eavesdropping on U.S. officials in the U.S. This is Kislyak calling Moscow or communicating with Moscow about what happens during this meeting. And of course, we know pretty well now that Kislyak and his communications are under heavy surveillance by the United States.

HAYES: We also know - I mean just a detail I think that it strikes me as important about this meeting, that was a period of time in which lots of people were coming to Trump tower and generally coming in the front, and there was a kind of almost like c-span camera in that front lobby where you could basically see the comings and goings. This clearly happened in a way in which Kislyak entered the building without being caught on camera, correct?

MILLER: Yes. We`ve spent a lot of reporting energy trying to locate evidence of this - of this visit, and you`re right. So it appears in this case, Kislyak didn`t go through the same front door that so many other people did to meet with this Trump team.

HAYES: So what is the response from the White House or from the Kushner attorneys?

MILLER: So a very limited response from the White House on this one. You see in our story there is a - there`s a no comment from the White House. I can only tell you that there was significant back and forth from the White House. We gave them every opportunity to provide an explanation for what happened here, and they declined to do so, on the record.

HAYES: One of really interesting detail in your story is that the story says that this information was first brought to your reporter`s attention by an anonymous letter, is that correct?

MILLER: Yes, that`s right. So quite some time ago, we got this letter in the mail. My colleague Ellen Nakashima actually got it. It just came in her mailbox and it was typed, it had no signature, it gave no means of tracing this back to the source, but it had a lot of information in it about things that had been happening in Trump Tower. And it appeared to be from somebody inside the transition or inside Trump Tower who was concerned about what this person was seeing. And a lot of what`s written or conveyed in this letter has sort of come - become true over time. It`s taken a while for a lot of this stuff to surface, including this detail about this discussion over a back channel or a private channel of communications with Moscow.

HAYES: Again I just want to - I`m trying to sort of bend over to read this as charitably as possible. So I mean, is it possible that they were setting up lots of different back channels with lots of different foreign leaders?

MILLER: Well, we don`t - I mean I suppose it`s possible. They - clearly they were in communication and meeting with a lot of leaders, a lot of foreign leaders. Most of them, as you point out, were coming through the front door, not the back door. The behavior here is part of what`s interesting and newsworthy, I think, right? The way this was all handled. And I mean of the context here, of course, is that these are meetings with Russian officials just weeks after an election that Russia had spent months in an unprecedented sort of campaign, attempting to upend or interfere with. So, I mean, it`s really - I mean, there`s - on the one hand, you can argue sometimes that it`s appropriate for incoming administrations to have contact with foreign governments and so forth.

HAYES: Certainly.

MILLER: But this - this was extraordinary.

HAYES: Yes. Greg Miller, remarkable reporting and thank you for your time tonight. Really appreciate you hopping on the phone.

MILLER: Absolutely. Thank you.

HAYES: Joining me now, Sabrina Siddiqui, Political Reporter for The Guardian, and Axios Editor Nicholas Johnston. I`m almost out of words, Sabrina, I mean, I don`t know what to make of this. This seems bizarre and certainly incriminating.

SABRINA SIDDIQUI, THE GUARDIAN, POLITICAL REPORTER: Yes. I think that so far, a lot of the leaks have pretty much provided more specificity to what we already knew, that there were communications between members of the Trump transition team and Russian officials but this is the first time that we`re seeing one of the President`s senior-most advisers actively seeking a back channel with Moscow and also deliberately or what we - you know, they`re saying it was an oversight, but we do know leaving this off of - this meeting off of his request for a security clearance. And the question is, was this just another sign of the complete inexperience that this particular administration had coming in, or was there something more nefarious going on? I think the investigators are really going to hone in on the fact that Kushner did not disclose these meetings previously and also the fact that he has held other meetings such as with a Russian bank that was subject to U.S. sanctions at a time when this administration, on its way in, was advocating for a shift in U.S. policy toward Russia.

HAYES: Nicholas, there`s also to me, what`s so important about this story is the centrality of Kushner. I mean, yesterday there`s reporting saying that he`s the person that investigators looking at, not the subject of the investigation but looking at. You know, we`ve had other names in the Trump orbit that have been circulated. Obviously Flynn crucially, Manafort who`s that campaign manager and apparently still advising the President and then sort of more - slightly more peripheral figures Roger Stone and a very peripheral figure seems Carter Page. This is the most central figure in the administration calling the shots here according to this reporting.

NICHOLAS JOHNSTON, AXIOS EDITOR: Right.

HAYES: It doesn`t get closer to the President.

JOHNSTON: That`s exactly right. As my good friend Mike Allen wrote today on Axios this morning, there is no one like Jared Kushner who is as close to the President, who has his hand involved in so many issues with the President. So, just - and the news that was an hour ago that I was going to come in here and talk about that, he was a person of interest in this case just meant that this is going to be a huge sort of time suck for the White House having to deal with these - to deal with these kinds of issues. and remember that the person of interest that the FBI - what the FBI was looking at with what was happening in that meeting, just trying to get more information and I`m thinking what actually done wrong, well now we know it was in the meeting which only made it even more interesting and sort of strange. I think the line that the post quoted with the Russian Ambassador that he was taken aback by this request is just absolutely incredible.

HAYES: Yes, using that Russian facilities, I mean, you don`t have the words for how anomalous or abnormal that would be. And Nicholas, let me ask you this, I mean, because you do a lot of reporting about what happens in that White House. The story from the White House about General Flynn`s calls to Kislyak on sanctions day, calls that the White House and Flynn did not tell the truth about, the nature of which they did not tell the truth about. The story from Donald Trump is that he didn`t tell Flynn to talk to Kislyak about sanctions, but it was fine, and he would have if he hadn`t, right? That`s the Donald Trump line. Given the relationship between the President of the United States and his son-in-law, Jared Kushner, how plausible is it that Jared Kushner sets up a meeting with the Ambassador to Russia to set up a secret back channel without the knowledge of the President-elect?

JOHNSTON: I don`t know how plausible it is, but what we do know is that it wasn`t on that form. They said it was an oversight. And I think what we`re learning, that the White House is coming to deal with, what we reported that they`re building this war room to fight against, is that as this investigative apparatus spins up to look at these kinds of things, they`re going to find all of these kind of discrepancies, every little oversight like this will be found by investigators and some of it might be leaked in the press and that`s going to become a steady drumbeat every day at 5:00 p.m. just like what we`re seeing it Friday, holiday weekend. It`s still coming out, and the White House knows they need to deal with this to be able to respond to it.

HAYES: Yes. I want to play what Sean Spicer said about Kushner`s omission. This is really crucial. I mean, the clearance process is a serious process. People have to fill out those forms. At the top of the form, it says very clearly that if you omit knowingly or withhold the truth, you`re committing a felony punishable by up to $10,000 dollars in fines and five years in felonies. Jared Kushner has very good, very adept, expensive lawyers so he knows what he`s doing. He omitted this meeting from that form, when they were caught omitting it, this is what Sean Spicer had to say about it.

(BEGIN VIDEO CLIP)

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: Throughout the campaign and the transition, Jared served as the official primary point of contact with foreign governments and officials. You`re acting as though there`s something nefarious about doing what he was actually tasked to do.

(END VIDEO CLIP)

HAYES: I mean, Sabrina, what`s nefarious, to this understanding nefarious is that here you now have Flynn and Kushner in really intense contact with the Russian Ambassador -

SIDDIQUI: Right.

HAYES: - not telling - lying about it - lying about it.

SIDDIQUI: Right. You have both Flynn and both Kushner while seeking security clearance, failing to disclose the extent of their contacts or communications with Russian officials. As you note, that is a felony offense that is punishable by up to five years in prison. And I think that to Sean Spicer`s point, on the question of whether or not there`s something nefarious going on, well, this latest report that Kushner was seeking this backchannel in order to communicate with Moscow directly undermines actually the rationale that the White House has put forward for a lot of these meetings. If you recall throughout the last couple of months as these revelations have come forward, they have said that, well, look, this is just a routine part of the job that any incoming administration sits down with foreign dignitaries, and there`s nothing nefarious or inherently wrong with doing that. Well, there is some things certainly nefarious or wrong with seeking to keep out of the - to shield, I should say, your communications with officials in Russia, and I think that this truly is, compared to a lot of incremental updates that we`ve seen in recent weeks, a significant development with respective inquiry into Russia.

HAYES: I completely agree as someone who - following this full-time, 16 hours a day at this point, and mapping little - this is a - this is a very major development, an extremely salient and important bit of information that we learned tonight. Really, really remarkable Sabrina Siddiqui and Nicholas Johnston, thanks to you both. So I want to give the context for this Washington Post report tonight because the meeting described between Kushner, Flynn, and the Russian Ambassador is just one of several contacts between members of the Trump team and Russian officials both during the transition and during the campaign, interactions they seemingly did not want anyone to find out about.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS CHANNEL HOST: Was there any contact in any way between Trump or his associates and the Kremlin or cutouts they had?

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: I joined this campaign in the summer, and I can tell you that all the contact by the Trump campaign and associates was with the American people.

WALLACE: I`m just trying to get an answer.

PENCE: Yes. Of course not. Why would there be any contacts between the campaign?

(END VIDEO CLIP)

HAYES: Of course not. Why would there be any contacts? That claim made on the record, on air, by the Vice President of the United States, Mike Pence from January, is simply not true. It is false. Last week, Reuters reported the Trump campaign had at least 18 undisclosed contacts with Russian officials. Jeff Sessions met twice with the same Russian Ambassador, Sergey Kislyak, who keeps popping up, last year. Sessions didn`t disclose those meetings and had to recuse himself from the Russia investigation after they became public. Michael Flynn had repeated and largely undisclosed contacts with the same Russian Ambassador last year. He was eventually fired for lying about the content of their conversations. And Jared Kushner met with both the Russian Ambassador and a Russian banker named Sergei Gorkov, a graduate of Russia`s spy school, whose bank is controlled by members of Vladimir Putin`s government. Kushner also did not initially disclose those meetings. Even putting aside the disclosure issue, it`s just really weird for a campaign to have so many contacts with officials of the Russian government. Last week, Paul Begala, who worked on Bill Clinton`s 1992 campaign at a very different time of U.S.-Russia relations of course, just asked fellow campaign veterans, "how many contacts they had with Russia in their campaign?" Adding, "zero for Clinton-Gore." Matthew Dowd responded "zero for me in both Bush-Cheney campaigns and all years before and after. Steve Schmidt said zero on Bush 04, zero on McCain 08 and Romney 2012 that Stuart Stevens responded simply, "nyet." Joining me now, Ivo Daalder former Ambassador to NATO, President of Chicago Council and Global Affairs and Malcolm Nance, MSNBC Terrorism Analyst, author of The Plot To Hack America. Ivo, as someone who is familiar with diplomacy, familiar with international relations, and the protocols by which governments talk to each other, perhaps incoming governments may talk to each other, what do you make of this story?

IVO H. DAALDER, FORMER AMBASSADOR TO NATO: Well, it`s a remarkable story, and as the press and the investigators figure out what was happening, we will - we will get to the bottom of it. It is true that during transitions, I was a member of the - of the Obama-Biden transition in `08- `09, that during transitions it is not unheard of for incoming officials to have contact with foreign governments. Certainly, that happened in our case. We did it with allies. We talked to the French and the Brits and the Germans, and it might be appropriate to have one or so conversations with other countries, including an important country like Russia. The idea of establishing a separate, outside the mainstream communication channel, which is what is reported in The Washington Post, really is something different. It takes a President-elect who has no formal authority, none whatsoever, and starts the process of having relations and in this case secret relations with another country, presumably not only not because they want to hide it from the Russians, but they want to hide it from the U.S. government, and that is different, to say the least, if not strange.

HAYES: Yes. Malcolm, you`ve been covering this, and to me part of what`s so incriminating really for lack of a better word - and I don`t want to say that there`s necessarily something underneath it all necessarily obviously. This is circumstantial, but it`s the deception. I mean, if you`re meeting - look, you can say relationships with Russia are important, they`ve become dysfunctional, our administration ran openly and publicly on setting a new course of Russia relations, that was clear. That was not hidden. And we want to talk to the Russians, and we want to talk to the Russian ambassador because we want to get off on a good foot. They could have done that in the open.

MALCOLM NANCE; MSNBC TERRORISM ANALYST: And of course, they have the right to do that in the open because they are the incoming government of the United States. There is nothing wrong with that. I`d like to put this into a better perspective for the audience because I understand that, you know, everyone wants to be a little cautious about this, and we should be cautious about it. It needs to have the amount of respect that`s due, due to this breaking news. But had any individual other than these individuals who worked immediately for President Trump, performed these actions at any time in the SF86 security clearance process, they would have immediately had their clearances pulled, they would have had their jobs terminated. Some of these contacts are so suspicious that they would have warranted their own counterintelligence investigation. This nation is in a counterintelligence investigation. They are in a spy hunt over at the FBI, and now we have this story. Should it prove true, of an American citizen who is the senior adviser to the President of the United States, attempting to establish what we call in the intelligence community covert communications with a hostile nation`s potential intelligence agency or senior leadership? That brings you - that crosses the line to the espionage act of 1917. This cannot be explained. Put aside the other 18 contacts with Moscow. This one incident requires Jared Kushner and all of his immediate staff to have their clearances pulled right now and to have the FBI descend on there and to determine whether this is hostile intelligence in the White House one step from the President.

HAYES: Have you experienced in your time when there had been revelations of someone omitting something as salient as this on their clearance form?

NANCE: Yes. I`ve had that happen, and not myself, but I`ve seen people who have inadvertently left off contacts with Germans, who left off contacts, you know, with people in the course of their duties. Their clearances were temporarily suspended as a matter of course. The counterintelligence agencies and the counterintelligence divisions of all of the intelligence agencies take these omissions very seriously. They`re almost as bad as leaving off you know, very bad financial data, which is blackmailable, which is why they take this seriously. Just because this is the office of the President, does not give them a pass. And right now I am way beyond believing that this is suspicious. I am pretty far beyond this to the point that this is now sinister. There is no way that this can be explained. I mean from the intelligence perspective.

HAYES: Yes.

NANCE: You know, from the diplomatic perspective, perhaps but there just is no way that if this is true that he wanted covert communications with the Russian using Russian cryptographic systems in the hopes that we didn`t have those things broken, then this is now espionage.

HAYES: Ivo, I mean, to go back to your point there, and I think this (INAUDIBLE) is repeating. I mean, having firsthand experience of this, being in a transition, which, again, transitions are strange, right? Because at one level, it`s not (INAUDIBLE) the incoming government, there`s some degree to which you have the capacity to talk to foreign governments, you want to hit the ground running, but also you have no formal vested constitutional powers. I mean, you would never, ever, ever, ever have a meeting in which you would suggest to a foreign ambassador to use their diplomatic facilities to evade American intelligence detection, right?

DAALDER: No, because our transitions don`t tend to be hostile takeovers from one government to the next. They`re transitions and we move from a process of having one person elected and taking the time for the government to get - to get in place and the idea of hiding from the - from your own government what you`re trying to do is definitely something new. And it may reflect a suspicion that clearly the President-elect and his team had for the intelligence services. Remember during the campaign and during the transition, he had some choice words for them and it may be that out of naivete, they decided to do this. I`m not prepared to come to any conclusion here. We have an investigation ongoing, the FBI for sure will look into this as well as everything else but from a larger diplomatic standpoint, there is this very strange time, the 72 days between election and inauguration when one government is fully and 100 percent in control, but it`s leaving, and another team is - has no control whatsoever, but it will on January 20 at noon take full responsibility for everything that happens.

HAYES: Let me ask one more question. Malcolm, I want to come back to you on that because I want to ask you about the precedent in all this. But Ivo, let me just follow up one thing because you wrote, you know, part of the subtext here and I just said this to Malcolm, you know, this candidate, candidate Trump, was quite clearly more disposed to be pro-Putin and pro- Russia and that we should get along with Russia and that was a, you know, public policy stance he took, it`s a public policy stance he took while the Russian government was engaged in fairly significant act of measures to engage in criminal espionage and sabotage. But you wrote about the NATO meeting in which here he is, you know, six months after having become the President of the United States, still essentially doing some of the things that Vladimir Putin would hope for him to do in terms of his relationship to NATO and what he said at that meeting.

DAALDER: Yes, clearly he`s pursued a very consistent policy when it comes to Russia. He has - did during the campaign made very clear that he thinks Vladimir Putin is someone you can deal with, that he can deal with, at least trying to have a positive relationship with Russia was worth having. And he`s continued to have that position as President, even to the point that coming to NATO headquarters where many of the allies he was greeting there now see Russia as their greatest security threat, frankly ignoring the Russian threat and even omitting any sign that the United States under Donald Trump is committed to the collected defense provisions of the NATO treaty. It`s consistent with his campaign and what has happened since. It is inconsistent with the narrative that somehow he is turning around and becoming more mainstream, more moderate on these kinds of issues.

HAYES: Malcolm, I want you to stay with us and Ivo, I want to also bring in Paul Butler, a form Federal Prosecutor at Justice Department, Professor at Georgetown Law. And to Malcolm`s point there about security clearance for revocation. And to me, when - some of the biggest news tonight is that a very strong case that Jared Kushner may have committed a felony on his clearance form. I mean, what do you see as the sort of legal exposure here, Paul?

PAUL BUTLER, FORMER FEDERAL PROSECUTOR: I think you`re right, Chris. This afternoon, Jared Kushner was a long way away from being prosecuted. Now, this evening, I think he`s about two steps away. He`s probably a subject of the FBI Special Counsel investigation. Why? Because what was he trying to keep secret? That`s the kind of thing that raises prosecutor suspicions. He wanted to have these top-secret, private conversations with the Russians. Who didn`t he want to know? Now, he has plausible deniability. He could say that he was suspicious of the Obama administration but if that`s true, why didn`t he disclose that with his security clearance forms? Every public prosecutor - corruption prosecutor, including me, has prosecuted cases like this. When people intentionally withhold information, that`s a felony.

HAYES: And, Malcolm, you`re murmuring in agreement. You also said that you thought under the espionage act. What did you mean by that, Malcolm?

NANCE: Right now, let`s just take it from the perspective of every intelligence watch officer in the world who is watching this program right now.

HAYES: And we have millions of them.

NANCE: And that`s millions. There`s thousands of people who are out there, who are on duty right now watching this, who have top secret SCI, special access program clearance, knowing that in one instance, even a fraction of this would lose their clearances, will have to ask themselves the question that they would ask in any counterintelligence environment, and that is simply this. Why? What is the motivational device that Jared Kushner, should this story be true because we don`t know if it`s entirely true? We don`t even know what the source of this was. The Russians themselves could have leaked this story in order to create chaos. But why would he want to hide, covert his communications from the U.S. government, believing that he would want to be able to use a facility obviously that would have more secure communications to create a back channel that U.S. cryptologic collection couldn`t get? That right there alone is covert communications. That is indicative of espionage activity of an American citizen that is working in league with a hostile government. And right now there is no FBI counterintelligence officer in the world right now that does not believe that if this story is true.

HAYES: And, Paul, it strikes me true in terms of the legal exposure for Jared Kushner. There`s now a question about the President, and the President obviously doesn`t have legal exposure in the way that non- Presidents do because our remedy for Presidents that break the law is impeachment. But, you know, Jared Kushner works for the President of the United States and worked for the President-elect at the time, and has been reported about 100 times a day as his closest advisers. You got to wonder that investigators have to be looking at the President at this point, right?

BUTLER: Yes. You know, so before Mike Flynn was the key to the big fish, and the big fish was either the President, the Vice President, or someone high up in the White House, like the President`s son-in-law and Senior Adviser. So we know that Mike Flynn has a story to tell. At least that`s what his lawyer claims. He wants to snitch, but he`s not going to talk unless he gets immunity. Immunity is a long way away but with Kushner`s involvement, that`s a lot more incentive for the Special Counsel to try to turn Flynn to see if he`s got the goods on both Kushner and the President of the United States.

HAYES: This is a - this is a maybe a silly technical question, but is that - is immunity the kind of thing that Special Counsel Robert Mueller is invested with the authority to offer?

BUTLER: Absolutely. The problem is, so is the Senate Intelligence Committee. So there`s got to be negotiations between the House Committee, the Senate Committee, and the Special Counsel. The Special Counsel should get priority, but, you know, in the Oliver North case, the case got messed up. His conviction got overturned because of this confusion about immunity.

HAYES: Well, that`s a good thing - good lesson for all those folks to learn. Ivo, there`s no talk about sanctions, right? So this is the sort of shoe that seems like perpetually about to drop. We had an interesting situation, which of course there`s a policy agenda here. And in some ways, the words from Donald Trump have been quiet sort of Russia-friendly, but there hasn`t been significant or substantive alteration of policy in terms of sanctions particularly. Gary Cohn, Adviser to the President, seems to indicate that possibly that was up for renewal or reconsideration. He walked that back. How significant would A, meeting with Putin be under these circumstances and B, a revocation of any of the sanctions under these circumstances?

DAALDER: Well, I think a meeting between the U.S. President and the Russian President, which is already on the agenda for July when both of them are at the G20 meeting in Hamburg is perfectly appropriate. The United States and President Trump has met with many leaders, and it`s appropriate to have a meeting with Vladimir Putin even given what is going on here at home.

As long as the investigation is going on and we don`t have anything more than an investigation, it`s up to the president of the United States to continue to govern and to run the foreign policy of our country, which includes the potential for meeting and having dialogue with the Russians.

That said, the issue of sanctions is a little different. Sanctions were imposed, and there are a whole set of them - there`s one set of sanctions that was imposed after the annexation of Crimea, there is a second set sanctions that were imposed after it became very clear that the Russian forces were directly engaged in Eastern Ukraine in military activities, and of course a third set of sanctions that was imposed by the Obama administration in late December of last year in retaliation for Russian interference in our elections.

And these are U.S. sanctions. They`re not NATO or anybody else`s sanctions, though Europeans have similar sanctions as well. And lifting any of those without a fundamental change in Russian policy strikes me as sending absolutely the wrong signal at this point.

The Russians are still in Ukraine. They still have annexed Crimea. They are still in violation of every norm of international behavior by interfering not only in our, but many other elections. And the least we can do is to keep the kind of sanctions and keep the kind of pressure that we`ve had for the past few years.

HAYES: All right. Ambassador Ivo Daalder, Malcolm Nance, and Paul Butler, thank you all for joining us.

Ahead, more on the breaking news tonight where for the second night in a row, all eyes turn to Jared Kushner. That after this two-minute break.

(COMMERCIAL BREAK)

HAYES: All right. We continue to follow the breaking news of this hour. The Washington Post reporting that President Trump`s top adviser and son- in-law, Jared Kushner, proposed setting up a secret and secure communications channel between Trump`s transition team and the Kremlin during a meeting with the Russian ambassador, Sergey Kislyak, at Trump Tower last December.

Prior to the last two days, all eyes were on Trump associates Michael Flynn, Paul Manafort and Carter Page and their ties to Russian officials. But now the focus is squarely on Jared Kushner.

Joining me now, Lizzie Widdicombe, contributing writer and talk of the town editor at New Yorker, author of Ivanka and Jared`s Power Play, which is a great profile of the couple; and David Cay Johnston, columnist at the Daily Beast and author of The Making of Donald Trump.

Lizzy, it is a fantastic profile that you wrote.

LIZZIE WIDDICOMBE, THE NEW YORKER: Thanks.

HAYES: I guess the question is like how -- who is this person at the center of this? It seems to me this is a person who has now been charged with a set of responsibilities that he is, from all outside perspective, entirely unprepared for.

WIDDICOMBE: I think that`s true.

I think he`s had definitely a unique life up to this point. His - I mean something that strikes me as like almost as sort of Greek tragedy aspect of this is that the defining event in his life, which happened I guess when he was 24, was his dad being under federal investigation and being sent to jail, which forced him -- he was a law school student -- and he then became the head of this family real estate business, ran that business for a couple years.

HAYES: While his father was in prison?

WIDDICOMBE: Yeah. He became the head of the family, the head of the business while his dad was in prison, and flew down to Alabama every weekend to be with him.

HAYES: His father was prosecuted for a somewhat bizarre set of circumstances in which his father essentially attempted to trap a sibling with sex workers. Is this correct?

WIDDICOMBE: Yeah, it`s something like that. It is a -- I don`t know. Like it`s a very baroque...

HAYES: Yes. We don`t have to get the details but...

WIDDICOMBE: It`s definitely one of the more New Jersey stories I`ve ever read in my entire life.

But his dad was -- is a very successful real estate mogul in New Jersey, and he ran a business started by his father, Jared`s grandfather. And there was a family feud essentially between Charles Kushner, Jared`s dad, and his brother. And it escalated into a bizarre sort of revenge plot that involved Jared`s dad paying a prostitute to seduce his brother-in-law, which was then taped and sent to his sister.

HAYES: And this is blown up. It`s investigated by the FBI, prosecuted by Chris Christie of all people.

WIDDICOMBE: Yeah, so Chris Christie was the federal...

HAYES: U.S. attorney at the...

And David Cay, I mean, the idea that this -- there`s something just remarkable about the fact that Jared Kushner, you know, is engaging all this, having seen firsthand the force of law of the federal government, right? I mean to omit something from your security clearance form, having the experience that he has had.

DAVID CAY JOHNSTON, THE DAILY BEAST: Right. Well, hubris is absolutely a central element in this. But Jared Kushner is not naive here.

As Lizzie pointed out, and it is an excellent profile she wrote, he ran the family business. He`s negotiated a number of deals, including the most expensive building exchange ever in New York City, a nearly $2 billion deal. This is a cutthroat business that requires a great deal of attention to detail. And to suggest that, you know, Jared Kushner didn`t understand the consequences of proposing this back channel meeting, I mean I`ll tell you what, I`m willing to excuse a drunk in a bar or a 13-year-old boy. Jared Kushner, no way.

Their excuse, however, is going to be for sure, well, he didn`t really understand. Yeah, well, then why isn`t it on your disclosure form? And why in the world did you want a back channel to begin with?

WIDDICOMBE: I mean, one thing I will say that`s a characteristic of his dad and of Donald Trump and a lot of real estate people is a huge appetite for risk, which he took by getting behind this campaign and running it, and which his father took by spending $1.8 billion on an office building in Manhattan.

HAYES: Which is now leveraged to the hilt.

WIDDICOMBE: Yeah, so which is in trouble financially.

HAYES: Yeah.

JOHNSTON: Chris, let me...

HAYES: I want you to follow up on that.

JOHNSTON: If I can just make one other point.

HAYES: Please.

JOHNSTON: That there is not a hundredth of an inch of separation between Donald Trump, Jared Kushner, and Mike Flynn even after he was fired. So I think it`s perfectly reasonable to then figure that Donald Trump was not the unwitting victim of this meeting that Kushner and Flynn had with Ambassador Kislyak.

HAYES: Lizzie Widdicombe and David Cay Johnston, many, many thanks. Appreciate it.

Joining me now, one of his soon to be colleagues, one of the colleagues of the newly elected Montana congressman, a story that we were going to get to tonight that we have blown out because of this news is, of course, Maxine Waters of California,

Congresswoman, your reaction to the news from The Washington Post tonight?

REP. MAXINE WATERS, (D) CALIFORNIA: Well, my reaction is perhaps one of sadness rather than of kind of I told you so.

I just -- I`ve always known that with the proper investigation, connecting the dots, you know, illuminating the facts, that we were going to find out that there certainly was collusion. I named a number of the allies of this president early on. I did not name Jared Kushner. I didn`t quite understand what his role was. But now, it`s very, very clear.

And his attempts to establish this back channel and to use Russian facilities to do it certainly speaks to criminality. And his inability to understand that he absolutely had to disclose his meetings and his involvement with Russians, and now trying to claim that he just overlooked is not acceptable and not believable.

And so I`m a little bit sad because I see us moving steadily to the point where we`re going to unveil all of this collusion, all of those persons that were involved, and it leads right to the president of the United States, which I`ve always believed.

And so let the investigations go on. Let the information unfold. The fact of the matter is right in the midst of this campaign, the transition team, all of that, we have had these allies, including Manafort and Flynn and Carter Page and Jared Kushner, all of them have been involved for quite some time with the Kremlin, with Putin, and with the Russian government.

So I`m -- I`m a little bit sad about it, but it`s going to unfold. It`s going to be revealed.

HAYES: Congresswoman, the DNC, I believe, has called for Kushner`s security clearance to be revoked, and I`ve seen similar calls from some of your colleagues. And I talked to someone last night, he said, look, this is a professional decision. It shouldn`t be the subject of political interference. This is for professionals to review. What do you think about it?

WATERS: Well, first of all, we shouldn`t have to call for it. It should darn near be automatic that his clearance is revoked. There`s no way that we could know at this point -- and I believe The Washington Post would not have revealed this unless they absolutely had done everything that they needed to do to vet all of this information.

And so his security clearance should be automatically revoked. We shouldn`t have to fight for it. We shouldn`t have to demand it. It should be just done.

HAYES: You talked about the president. We have not heard from the president directly in quite sometime. He is on a trip. He did not have any press conferences. It`s been quite a while since he has sort of faced questions, particularly in the wake of all these revelations. Do you think it`s important the president himself speak to this?

WATERS: Yeah, of course I do, of course we can`t believe anything that he has to say. You know, he has consistently lied just about everything. But, yes, I would want the president to come forward and say something because he has to know by now that this is close to him, that you cannot be his son-in-law and be his top adviser and not know what he was doing.

And so I`d like to know what he would say about this and see if he would at least attempt to tell the truth. I don`t think so because if he does, that would cause him to be leading right into impeachment, I believe.

HAYES: All right, Congresswoman Maxine Waters, thank you for your time as always.

WATERS: You`re certainly welcome.

HAYES: Much more to come after this quick break.

(COMMERCIAL BREAK)

HAYES: All right. In some other big news, Republican Greg Gianforte won Montana`s special election, the congressional election last night, one day after he was charged with physically assaulting a reporter and one day after his campaign issued a statement lying about the incident.

And for 24 hours, that false statement was Gianforte`s only response until his victory speech, at which point he apologized.

He did not apologize before his victory, which is honestly what integrity would have demanded, but after it was safe to.

(BEGIN VIDEO CLIP)

GREG GIANFORTE, (R) REPRESENTATIVE-ELECT MONTANA: Last night I made a mistake, and I took an action that I can`t take back, and I`m not proud of what happened. I should not have responded in the way that I did. And for that I`m sorry.

UNIDENTIFIED FEMALE: And you`re forgiven.

(CHEERS)

GIANFORTE: I should not have treated that reporter that way, and for that, I`m sorry, Mr. Ben Jacobs.

(END VIDEO CLIP)

HAYES: Note what was missing there. There`s no indication whatsoever he reached out personally to Ben Jacobs to actually apologize. No apology for defaming him with a statement from his campaign that read, in part, and I quote here, Jacobs grabbed Greg`s wrist and spun away from Greg, pushing them both to the ground.

Both Ben Jacobs and another reporter who witnessed the assault, of course, categorically denied that happened and said the only aggressor was soon to be Congressman Gianforte, an assertion backed up by the audio of the assault and, of course, by Gianforte`s belated apology.

But the false statement actually placed the blame for the assault on the victim of the assault. Quote, it`s unfortunate that this aggressive behavior from a liberal journalist created this scene at our campaign volunteer barbecue.

Now, that statement, which we now know from every single party in the room, unambiguously was a complete and total lie, a fabrication, that was issued by a person by the name of Shane Scanlon, Gianforte`s spokesperson. That`s Shane right there.

And we asked Shane to come on the show tonight, and we`ve reached out to the Gianforte campaign for comment with no reply.

Now, right now Shane Scanlon, as far as we know, has not apologized for his defamation. He has not apologized to Ben Jacobs for maligning him in public and lying about him, and he has not apologized to everyone who published or broadcast the ficticious, duplicitous statement that he put his name to.

One hopes for his own sake that he surely did not give that version of events to the police because if he did, that`s a crime.

Greg Gianforte is going to be a member of congress. And if he takes Shane Scanlon to Washington with him, anyone who has business with the office of Montana`s only congressman should know that if you`re dealing with Shane Scanlon, you`re talking to a liar. If he`s willing to lie about a violent assault committed in front of witnesses, he will be willing to lie about anything, which means that anything Shane Scanlon says to reporters, to voters, to anyone else, is completely worthless.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: Thank you, Gracias.

UNIDENTIFIED MALE: Thank you. Thank you.

TRUMP: A great win in Montana.

UNIDENTIFIED MALE: Oh, thank you.

(END VIDEO CLIP)

HAYES: While in Italy for a meeting with NATO leaders, the president congratulates Greg Gianforte unprompted for his win last night. While Vice President Mike Pence, who endorsed and even campaigned for Gianforte, then curiously fell silent after Gianforte was cited for body slamming a reporter.

Pence`s press secretary telling Politico, quote, "we aren`t going to comment."

Pence, however, tweeted today, congrats, Greg, on great win and gracious speech. Look forward to having you help Donald Trump make America great again.

Joining me now, Michael Daly, writer for The Daily Beast, Liam Donovan, contributor for the National Review. And Cornell Belcher, Democratic pollster and president of Brilliant Corners Research and Strategies.

Michael, let me start with you. You`re a veteran reporter. You covered politicians. You ever seen anything like that?

MICHAEL DALY, THE DAILY BEAST: No. But I mean things are so crazy now, my first thought was it probably helped him. I mean, that`s the thing. You hear Kelly -- you know, Trump gets a sword, and Kelly says, oh, you could use it on the media. You hear Lindsey Graham down in congress talk about to the photographers back in your cages. I mean...

HAYES: And you had Greg Abbott today, Governor of Texas, joking about using a gun on reporters as well.

DALY: Enemies of the people, right. We`re supposed to be enemies of the American people, that`s what they`re saying.

And this Ben Jacobs, I don`t know if you`ve met him, he`s the nicest guy.

HAYES: He`s a sweet guy, yes.

DALY: And what everybody - noone stopped to think about, is what was he asking this guy about? He wasn`t asking him about his marriage or, you know, drugs or - he was asking him about health care.

HAYES: About a budget projection.

DALY: Yes. I mean, but think about it, that`s what got him nuts.

And I think that maybe the problem with the health care thing is that a fact arose, that millions of people are going to get thrown off health care, and that makes a guy really uncomfortable.

HAYES: You know, Liam, it felt to me like we crossed the rubicon last night with Gianforte, because you saw a lot of people made a lot of excuses for Donald Trump. But Donald Trump always seemed a sui generis figure, that he was unique, that people would forgive anything for Donald Trump.

LIAM DONOVAN, NATIONAL REVIEW: That`s right.

HAYES: Here`s Gianforte, no one - who cares about this guy except for the fact that he`s running for congress, and people were able to marshal the same muscles that they`ve exercised in excusing Donald Trump to excuse this guy.

DONOVAN: It is pretty remarkable. And I think part of it was the fact that this is less than 24 hours out from the polls closing. And I think that partisan motivated reasoning is a pretty strong thing.

It`s a little bit spooky, and I wonder, you know, in the wake of the election, as Gianforte apologizes, if you talk to the people on my Twitter mentions, I think they would say he`s got nothing to apologize for.

HAYES: Well, that was the other weird thing of it, because the line had been, everyone saw that the statement was transparently fabricated. That wasn`t what people said. What they said instead was that he -- you know, he had it coming. You know, there was some excuse for the violence.

And Cornell, to Michael`s point, my sense is that actually the performance in the early vote, which is about 75 percent of votes, and the same-day voting election day, wasn`t actually that different.

CORNELL BELCHER, DEMOCRATIC POLLSTER: One of the things I think we`ve got to be careful about is reading too much into special elections. That said, I`m going to read a lot into the special election.

The - what I think you see consistently is happening across the board here, even though - and this is a really red place, and - but what you see consistently happening in these elections that have happened since Trump is that the Republican margins are shrinking. You`re taking these 20-point districts and you`re making them into a 7-point district, which I think ultimately means more districts are in play, right, because Democrats can spread resources and put more into play.

And the fact that Republicans had to spend so much money in a place like Montana, a place where Trump won by 20 points, to get a 6-point victory, I think bodes well for Democrats.

But to this point I think we`re seeing little by little the romanticism about the American voter being eroded away, because they are accepting this kind of behavior, and they`re rewarding this kind of behavior.

HAYES: Yeah, Michael?

DALY: I mean, it`s just decency. I mean, it`s the thing you teach your kids. It`s - if you go to the playground where Donald Trump used to run around in Queens, is, you know, keep your hands to yourself, don`t insult people -- I mean, there`s a whole list of rules.

HAYES: In the playground?

DALY: Yeah, for 4-year-olds.

And here we got people running for office, but it`s really -- I do think he`s right about -- to look at this election, the Republicans didn`t do quite as well as you might think. But the Democrats didn`t have much of a candidate, you had a folk singer. I guess they were figuring, well, Trumpians will like a folk singer in a cowboy hat.

HAYES: And he was - nad here`s what I would say, he was authentic to the state. He`s not a carpet bagger, he`s traveled the state. He`s a real Montanan, but he has no political experience and he`s never been for (inaudilbe).

DALY: He hadn`t paid hi bills, he`s like me. So, I mean, if I ran for office...

HAYES: I`d vote for you for mayor. I`d vote for you for mayor.

DALY: But not in Montana and not against the guy who made millions in his basement making, you know...

HAYES: Let me ask you this, I want to pivot to this, because it seems weird not to bring this into the conversation about the news tonight.

For you, Liam and Cornell, who are both sort of acute observers of political trends. I mean, my sense, Liam, there`s two things happening here. One is that Republicans are not going to distance themselves from the president regardless of whatever the latest Russia revelation is, because they`ve made a political calculation that, as Ben Franklin said, we must hang together or surely we`ll hang separately.

Do you think that`s accurate? That`s right?

DONOVAN: Something like that. I think the presence of this special counsel now sort of gave them a little bit of breathing room, a little bit of out, something of a catch-all answer when asked about this sort of thing. We`ll see if that prevails through this newest revelation. But I think that will be their catch-all answer.

The way I look at this is, if you see Republicans start to back away from the president, and I wrote a piece about this in Politico.

HAYES: Yeah, it was very good.

DONOVAN: I think it`s a function of them cutting bait on the legislative agenda. And while the legislative dream is still alive, they sort of feel they`re in the red zone, they`re not going to pass up that opportunity.

HAYES: That point about the red zone is clear, is key, because basically I think the thinking here is as you spell out in that is that you get unified government once every 25 years, maybe. That`s your shot to pass your stuff. And so whatever Donald Trump does and whatever is revealed about him...

DALY: Yeah, I think, when is the next time they`re going to get a shot at eviscerating Medicaid?

(CROSSTALK)

DALY: There`s not many times you get a chance to leave disabled people on the street, so let`s get at it, let`s not worry about Donald here.

HAYES: Cornell, there`s been a really interesting -- some interesting data about how much people are paying attention to Russia as opposed to the domestic legislative agenda that Liam just mentioned and that Michael just mentioned. And my sense is that the Russia stuff is really hurting the president`s approval ratings, but in special election districts when the president himself is not on the ballot, that things like the AHCA are more salient. What do you think of that?

BELCHER: I do think the domestic stuff is more salient. However, listen, you don`t want to go into a midterm with a president who has really horrendous approval ratings. You can see the midterm elections and what happens when the president`s numbers are down.

The problem for Democrats is, his numbers aren`t going to get any -- his numbers are already at historic lows. This idea that just a bad sort of unpopular disapproval number of Trump can help us win? I think that is a blind spot of Democrats.

HAYES: Huh, interesting.

BELCHER: We have to also be about something, right? I think some of our economic populism that we`re hanging so much our hat on, I think, you know, it had some traction in Montana but I don`t think we`re going to win these red districts that we need simply about sort of railing about the elites and economic populism. We`ve got to be more aspirational. We`ve got to have something to say about our values to these red district voters.

DALEY: That`s a really smart guy.

HAYES: I say that every time Cornell Belcher is on.

DALY: That`s a really smart guy.

HAYES: I say that every time.

Michael Daly, who has my vote if he runs for mayor, Liam Donovan, and Cornell Belcher, thank you all for joining us.

DONOVAN: Thanks, Chris.

HAYES: All right, that is All In for this evening.

The Rachel Maddow Show starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END