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All in with Chris Hayes, Transcript 8/3/17 WSJ: Mueller impanels new Grand Jury in Russia Probe

Guests: Elizabeth Holtzman, David Jolly, Betsy Woodruff

Show: ALL IN with CHRIS HAYES Date: August 3, 2017 Guest: Elizabeth Holtzman, David Jolly, Betsy Woodruff

CHRIS MATTHEWS, MSNBC HOST: pointing to its mysteries and darkened side streets. We now know what looms now before us in all its vastness, Russia, Russia itself. That`s HARDBALL for now. Thanks for being with us. "ALL IN" with Chris Hayes starts right now.



DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: Russia is fake news. Russia - this is fake news put out by the media.

HAYES: A new phase for the Mueller probe.

TRUMP: The entire thing has been a witch hunt.

HAYES: The Special Counsel investigating Trump and the Russians, impanels a Grand Jury in Washington, D.C.

TRUMP: Believe me, there is no collusion. Russia is fine.

HAYES: Tonight, what we`re learning about where this investigation is headed.

TRUMP: This Russia thing with Trump and Russia is a made-up story.

HAYES: The new bipartisan push to prevent the President from firing Robert Mueller.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Any effort to go after Mueller could be the beginning of the end of the Trump Presidency.

HAYES: And how the President is responding tonight.

UNIDENTIFIED MALE: Mr. President, are you considering firing Robert Mueller?

HAYES: When ALL IN starts right now.


HAYES: Good evening from New York, I`m Chris Hayes. We now have multiple reports tonight that indicate significant forward movement in Special Counsel Robert Mueller`s criminal investigation into potential collusion between Trump campaign and Russia. First to the Wall Street Journal which reports said Mueller has now impaneled a Grand Jury in Washington, D.C. and a sign that his inquiry is growing in intensity and entering a new phase. NBC News has not independently confirmed that report.

Before Mueller took over the investigation in May, federal prosecutors had been using a grand in Alexandria Virginia which law enforcement officials told NBC News was focused on two men, Paul Manafort, Trump`s former Campaign Chairman and Michael Flynn, the President`s former National Security Adviser, both of whom are key figures in the investigation. The apparent move to D.C. suggests the probe may well be expanding. Law Professor Stephen Vladeck characterizing it this way, "a sign there is a long-term, large scale series of prosecutions being contemplated and being pursued by the Special Counsel." And the President`s attorney tonight responded on FOX News.


UNIDENTIFIED MALE: Did you have any advance notice this was coming?

JAY SEKULOW, PRESIDENT TRUMP LAWYER: No but it`s - this is not a surprise because the impaneling of a Grand Jury in situations like this when you got an investigation, this is typically how they move forward. That - it is really very much the standard operating procedure when you got a situation like this. But with respect to the impaneling of the grand jury, we have no reason to believe that the President is under investigation here.


HAYES: This is just the start of the potential bad news for the President. CNN reporting tonight that Mueller has seized on Trump and his associates` financial ties to Russia as one of the most fertile avenues for moving the probe forward which squares with Tuesday`s Reuters` report that Mueller has hired Greg Andres who oversaw the fraud unit and management program that targeted illegal foreign bribery in the Justice Department`s Criminal Division. CNN also reporting the potentially explosive news that - and I quote here, investigators turned up intercepted communications appearing to show efforts by Russian operatives to coordinate with Trump associates on damaging Hillary Clinton`s election prospects.

Those communications reportedly including specific references to Paul Manafort. Meanwhile, Vox reporting that former FBI Director James Comey is far from the only FBI official likely to be questioned as part of Mueller`s probe with ten or more of the nation`s most senior law enforcement officials likely to be questioned. What you`re going to have is a potential for a powerful obstruction case a senior law enforcement official said, you`re going to have the former FBI Director testify and the Acting Director, the Chief of Staff to the FBI Director, the FBI`s General Counsel, and then others one right after the another. This has never been the word of Trump against Comey. This is more like the Federal Bureau of Investigation versus Donald Trump. Leaving the White House en route to his rally in West Virginia tonight, the President did not respond to shouted questions about whether he planned to fire Mueller.


UNIDENTIFIED MALE: Mr. President, are you considering firing Robert Mueller? Will you hold a news conference again? Are you going to fire Mueller?


HAYES: A short time ago during his campaign style speech to enthusiastic supporters in West Virginia, the President again denied any ties to Russia.


TRUMP: The Russia story is a total fabrication. It`s just an excuse for the greatest loss in the history of American politics. That`s all it is. Most people know, there were no Russians in our campaign. There never were. We didn`t win because of Russia, we won because of you. That I can tell you.


HAYES: Joining me now on the phone, MSNBC Justice and Security Analyst, former Justice Department Spokesperson Matthew Miller. Matthew, your reaction to the news.

MATTHEW MILLER, MSNBC JUSTICE AND SECURITY ANALYST (via telephone): I think it`s obviously that - it`s obvious that this is a serious investigation that is expanding and accelerating. I think it`s right. (INAUDIBLE) that it`s not going to go away soon. And I think what it does for the White House, it takes what it up to now, been a theoretical investigation and makes it very real, very personal. It`s one thing to know that Bob Mueller is conducting this investigation. It`s another thing to have White House staff subpoenaed to the Grand Jury asked about conversations they had, asked about things they said in meetings, asked about things they said in e-mails and put in legal jeopardy if they don`t tell truth. It makes this investigation much more real and much more threatening for the President and for everyone around him.

HAYES: Do you anticipate on that score that we`re going to start seeing folks from the White House, associates to the campaign, sort of being summoned before the Grand Jury, that we`re going to start getting reports about who is showing up and why?

MILLER: I think without a doubt, we will. I think the timing is still up in the air. It just - it seems he`s just convened this Grand Jury. Usually, what you`ll do is use the Grand Jury first to subpoena documents. You want have every document available before you start bringing witnesses in so you can ask them about those documents. We don`t know what he has already of course. We only know that did - that managed to be reported, that` managed to leak out. But I think it is inevitable before this investigation is over, you will see Jared Kushner go to the Grand Jury, you will see Donald Trump Jr. subpoenaed to the Grand Jury, Paul Manafort, and a number of people both from the campaign, people that no longer work for the President and people who are current White House Staffers.

HAYES: There`s a geographic element to this in so far as there was a Grand Jury that was working out of Alexandria, Virginia, reportedly focused on Flynn at the beginning, made Flynn and Manafort and has moved to Washington, D.C. Is there any significance in that move to your - to your mind?

MILLER: I think there is. Part of it is probably convenient for Mueller and his team were all there. They`re all blocks away from that Court House as were many of the witnesses. But it`s also I think a key indication to what he`s looking at. Under federal law, you have to charge crimes in the venue, the judicial venue in which they occurred and all the obstruction of justice crimes that would have occurred in this case, of course, happened after the campaign, they happened once Donald Trump became President. His conversation with Jim Comey asking him to back off, the Michael Flynn investigation happened in the White House, his calls to Mike Rogers, his call to Dan Coats, asking them to intervene with the FBI, and of course, when he fired Comey. Those are all events that took place in the White House, in Washington D.C. I think it`s a clear sign that he`s looking at obstruction of justice, that`s the - and D.C. is the appropriate venue to look at that and potentially bring charges down the road.

HAYES: What do you think about the possibility of Mueller being terminated in some way, giving the fact that the President has already expressed his frustration with it, he`s already fired the FBI Director, he made noises about getting rid of Jeff Sessions last week, although he seems to have backed off that and how safe do you think Mueller is?

MILLER: I think we are on - I think the President and Bob Mueller are on a collision course. I don`t - I don`t - it`s hard to say which will blink first. Whether Mueller will complete this investigation and wrap it up with charges or refer to Congress before the President can fire him. But every time this investigation has gotten closer to the President in the past, every time it`s escalated, he`s lashed out by trying to intervene to stop it, at works by firing someone or by publicly trying to undermine the Justice Department. I think, you know, as - with these reports, and if you do see his family subpoenaed to come testify, I think Bob Mueller`s job is potentially in jeopardy and it`s up to people in Congress, Democrats and especially Republicans to say to the President, that would be a red line you cannot cross and make it clear now before he crosses it.

HAYES: All right, Mathew Miller, thank you for your time tonight.

MILLER: Thank you.

HAYES: Joining me now, Carrie Cordero, the former Attorney with the Justice Department`s National Security Division and Nick Akerman, former U.S. Attorney, and Assistant Special Watergate Prosecutor. Carrie, let me start with you. What does a Grand Jury do in this context?

CARRIE CORDERO, FORMER JUSTICE DEPARTMENT ATTORNEY: Sure. So a Grand Jury is not like a trial jury. A Grand Jury assists the Prosecutor in actually conducting the investigation. It`s an investigative body. And what it does is it enables the prosecutor, in this case, the Special Counsel, former FBI Director Mueller to bring evidence before the Grand Jury. And if it got to the point where the facts were developed to be able to bring an indictment, the Grand Jury would approve the indictment. And so, what it do is it gives him a venue to be able to - as Matt was just describing, request documents, subpoena documents and call witnesses who the might be called to testified under oath to the Grand Jury.

HAYES: Right.

CORDERO: And that`s what`s really significant fact because the fact that these individuals - it`s very different when people are going in media or they`re making statements on TV, big difference in being in a closed session secret proceeding Grand Jury under oath.

HAYES: Nick, you worked on the Watergate Prosecution and there was a Grand Jury from the beginning of that because there was the burglary but then there were others as well. What role did they play in that investigation?

NICK AKERMAN, FORMER ASSISTANT SPECIAL WATERGATE PROSECUTOR: They play the role in every one of those investigations. I mean, if we didn`t have the Grand Jury, we wouldn`t be able to subpoena people, we wouldn`t be able to subpoena documents. It provided an opportunity to put that investigation in a context where everything was secret, that - it`s not like a Senate Committee where people are testifying out in public. It`s all done in secret. It doesn`t mean that the person who is a witness can`t go and tell everybody else what they`re saying but they don`t really know. And so -

HAYES: Why is that important?

AKERMAN: It`s important for two reasons. One is to protect innocent people, is to protect people so they`re not smeared with allegations of wrong doing when there`s no finding of probable cause which is what a Grand Jury does. And it`s also important to protect the integrity of an investigation. You want to be able to go ahead and investigate without people knowing what everybody else is saying so that they can put their stories together. I mean, you`ve seen Donald Trump put the stories of his son-in-law and his son together in a very surgical way. Now, the Grand Jury is going to break through that story because they`re going to be able to subpoena other evidence, other computers, other e-mails.

They`re going to be able to follow the e-mails string, the documents that were supposedly brought to for the Trump campaign by Rob Goldstone. They`re going to be able to follow rubles going way back to when Donald Trump was first doing the Miss Universe contest. All of these things are going to come together and all of these dots that are out there to be connected is what they`re going to be able to do in private so that the public isn`t going to see this but it gives the prosecutor the ability to dig into this without people being able to get their stories together and being able to come up with a story that makes sense, that obstructs the whole proceeding.

HAYES: Right. Carrie, the documents, and the records here, there`s a reporting CBS News that investigators want phone records related to Trump Jr. in the Russia meeting we had identified on this - on this program and some others have also identified that fact that if you read that e-mail chain, it does appear that Emin Agalarov and Donald Jr. had a phone call to broker meeting. I mean, that does seem to me a lot of - that e-mail, as the tip of the iceberg, indicates, there are - seems to be a lot of records out there that would be very helpful to investigators if they can get their hands on them.

CORDERO: Sure. And in some ways, I mean, this is a standard criminal prosecution. And federal investigators and prosecutors have a lot of tools at their disposal under the federal statutes to be able to request documents concerning communications records, other types of records, text messages, e-mails, phone logs, all sort of things like that, records that might exist and the prosecutors will be able to request that. The other issue is with respect to people being able to testify secretly into the Grand Jury.

It`s an important point because we saw earlier this summer when individuals - current government officials were testifying before Congress, we could see particularly with DNI Coats and maybe Admiral Rogers, that they had discomfort describing communications that they had with the President about whether he asked them to try to shut down the investigation or try to you know, say something publicly that would undercut the investigation. And so if current government officials are called before the Grand Jury to be - to testify with respect to any potential obstruction charge, they will be under oath and it won`t be in a public setting. And so they will answer truthfully in that particular setting.

HAYES: Obstruction, which Carrie mentioned were - and the Vox reporting indicates it`s - in some ways it seems that that case is almost further along because it all happened so quickly and so publicly.

AKERMAN: And Trump has admitted most of it.

HAYES: Essentially, yes, right. I mean, it`s sort of a question - it`s not even a question about the facts at this point so much we would seem fairly established but the interpretation thereof and whether it`s something you could even bring charges against a President for.

AKERMAN: Of course you could. I mean, Trump has already given us the interpretation of the facts. He`s admitted to the Russian Ambassador that the reason he fired Comey was to get rid of Russia investigation. He admitted to Lester Holt on national TV. I have never seen anybody in a criminal investigation make such wide ranging admissions on intent. I mean, the whole issue in obstruction of justice is whether or not the perpetrator had the corrupt intent. Did he intend to stop the investigation? He`s admitted in it spades.

HAYES: Well, then the question becomes, Carrie, I mean, this really deep sort of constitutional question. And we`ve seen people wrestling with it. There was a memo that was commissioned back when Ken Starr under the Independent Counsel Statute was pursuing President Clinton at that time about whether there`s a sort of judicial remedy for presidential wrongdoing through regular courts like an indictment. Would that be something this Grand Jury would or would not do? Do we know?

CORDERO: Well, the question would be whether the prosecutors thought that they could bring that type of evidence before the Grand Jury. It does seem that Special Counsel has brought on some people who have expertise. People who used to work in the office of legal counsel for example who might be in a position to analyze that issue for him and help him determine whether or not those are appropriate matters to bring before the Grand Jury. I do think that the - if the reporting is correct, that the Grand Jury is here in Washington, D.C., I do think the location is relevant because the Grand Jury is supposed to be impaneled in a location where the offense likely took place. And so that does speak to, what are the particular issues or offense that`s took place here in Washington that would justify bringing the Grand Jury together here. It wouldn`t just be a matter of convenience for the Prosecutors in the office of the Special Counsel.

HAYES: All right, Carrie Cordero and Nick Akerman, thank you both for joining me.

AKERMAN: Thank you.

HAYES: Next, as the investigation continues to accelerate, a new priority emerging protecting Robert Mueller, the conservative bipartisan effort to preventing the President from firing the Special Counsel after this two- minute break.



TRUMP: The Russia story is a total fabrication. It`s just an excuse for the greatest loss in the history of American politics. Democrat Lawmakers will have to decide. They can continue their opposition with the Russian hopes or they can serve the interests of the American people.


HAYES: This President moments ago calling the Russian investigation led by Special Counsel Robert Mueller a hoax. There are now two bipartisan efforts to protect the Special Counsel from any action by President Trump or his subordinates to fire him. A new Senate bill cosponsored by Republican Senator Thom Tillis of North Carolina, Democratic Senator Chris Coons of Delaware which would be retroactive to Mueller`s appointment, would give the Special Counsel the ability to challenge in court their termination. A three-judge panel would be impaneled to determined good cause for the firing. Otherwise, the Special Counsel would be reinstated. The bill`s co-sponsor Senator Tillis stressed the need for true independence in all the key Justice Department decisions.


SEN. THOM TILLIS (R) NORTH CAROLINA: So this is an opportunity to show to the American people we`re serious about independence, we`re serious about being held to a higher standard, and the Department of Justice is unique among cabinet positions because on the one hand, the President nominates the FBI Director or the A.G. but just after they`re confirmed, I want them to be very independent.


HAYES: This arrives just a week after another bipartisan effort to protect the independence of the Special Counsel one co-sponsored by Senators Lindsey Graham and Corey Booker that would block the President from firing the Special Counsel without any judge`s approval when that Special Counsel is investigating the President as is now the case. Congressman Adam Schiff of House Intel Committee tweeting, "If true that Mueller has impaneled a Grand Jury suggests his work is proceeding, all the more important that Congress protect his independence. Joining me now is Senator Richard Blumenthal of Connecticut, a Member of the Senate Judiciary Committee. How concerned are you about the President attempting to fire Robert Mueller as the investigation takes off?

SEN. RICHARD BLUMENTHAL (D) CONNECTICUT: I`m very deeply concerned because the ominous threats that the President has made about firing Jeff Sessions as a means to fire Bob Mueller and his direct threats about calling Mueller calling the investigation a hoax and a witch hunt, attacking the integrity and credibility of the team, an excellent team of 16 prosecutors that Bob Mueller has assembled and that`s why I have joined with Lindsey Graham as a co-sponsor of that measure that would provide judicial review and stop that firing if it is done without good cause.

And I am also heartened by the empanelment of a Grand Jury because remember, Chris, that a Grand Jury is an arm of the court. It`s not the just a tool of the prosecutor, it actually has a legal status under the court`s authority. And so a threat against Bob Mueller is less weighty because the Grand Jury has a degree of permanency and protection that Bob Mueller alone might not have. But this legislation is very important also because it indicates the level of outrage and opposition that would follow any attempt by Donald Trump to fire Bob Mueller.

HAYES: Something significant happened today. The Senate went into the a five-week recess if I`m not mistaken but Senator Lisa Murkowski locked in what is essentially what is called a pro forma session which is to essentially make sure that there is - for constitutional purposes, not a recess that the President could recess appoint someone, meaning that were the President to say fire Jeff Sessions, he wouldn`t be able to put a recess appointment and how significant and important is that step?

BLUMENTHAL: What`s really significant is not only that step but I think the very strong determination that there be no recess appointment in the Attorney General position. And I think again, the firestorm and potential constitutional crisis that would greet this step by Donald Trump is reflected in that in step by Lisa Murkowski, Senator from Alaska. So I think it`s important but what`s even more important is the sense, it`s a clear sense, and it is tangible that there is going to be strong opposition both sides of the aisle to this kind of abusive use of power.

And obviously, to go back to your first question, the threat is even more ominous because clearly, the Special Counsel is following the money. He`s going after financial dealing, those financial dealings are extremely relevant because the Russian play book is to enlist or engage foreign officials and create monetary incentives for them to cooperate. That is exactly what may have happened here, Bob Mueller knows it, he`s going to follow the money.

HAYES: Yes, there is reporting about those money trails and there`s also been some significant pushback from the White House on that. The President in an interview with the New York Times saying that a pursuit of financial deals prior to his campaign would be out of bounds, it would violate essentially the portfolio of the Special Counsel. Jay Sekulow sort of repeating that same notion that he would object and the lawyers for the President would object to following the trail of say, real estate deals that happened six or seven years ago. What`s your response to that?

BLUMENTHAL: They have no legal power and no moral case to try to constrain a Grand Jury. The Grand Jury has an authority that is part of the rule of law. By the way, as a prosecutor, as the United States Attorney for Connecticut for four and a half years, I`ve seen Grand Juries often develop their own questions and want to know about financial transactions. They are composed of ordinary citizens who often have very good questions. And the other reason I think this Grand Jury is going to be important to the Special Counsel is that we are dealing here with a potential indictment of the highest ranking official in the United States of America.

So Bob Mueller is wanting - going to want to know how the average citizen reacts to this evidence. It`s going to be a very good sign for him of what a jury, a regular jury at trial might react to. We`re a bit ahead of ourselves. There`s no conclusive proof of any crime here but very importantly, that Grand Jury can ask its own questions so for the President or any part of his staff to say, they`re going to draw lines is completely inappropriate.

HAYES: So simply, I want you to just clarify. When you say we`re dealing with the potential of indictment of the highest ranking official in the U.S., you mean you believe it is a possibility that - for an indictment of the President of the United States?

BLUMENTHAL: It is certainly a possibility. There`s a lot of authority that there cannot be an indictment of the President. When I say authority, there`s no real legal case law but they`re pretty good legal arguments against it. Still, if he is out of office, there could be indictments and there could be indictments of lower level officials and members of his family.

HAYES: All right, Senator Richard Blumenthal, thank you.

BLUMENTHAL: Thank you.

HAYES: Ahead, President Trump blasts Congress the day after he signed the new sanctions bill, blaming America Lawmakers for strained relations with Russia. Some heated reactions from the Hill next.


HAYES: Hours before the breaking developments in the investigation of potential collusion between Russia and the Trump campaign, the day began with a statement from President Trump about Russia. The President of the United States once again went out of his way to publicly side with Russia over American institutions. President Trump who yesterday released both assigning statement and a press statement criticizing the veto proof bipartisan package of sanctions on Russia, Iran, and North Korea, took to Twitter today to again complain about the thing he had just signed and to go one step further in his criticism, "Our relationship with Russia is at an all-time and very dangerous low. You can thank Congress, the same people that can`t even give us Hcare."

Pushback from Republicans particular in congress was swift. Senator John McCain tweeting, "Our relationship with Russia is at a dangerous low. You can thank Putin for attacking our democracy and invading neighbors and threatening our allies." Senator Richard Shelby, Republican from Alabama telling Talking Points Memo, "I think our strained relationship with Russia started in 1917, didn`t it? With the Communist Revolution? It`s ebbed and flowed since, but don`t see hot it`s Congress` fault. And Senator Tim Scott, Republican of South Carolina saying, "I think he signed it, didn`t he? The bottom line is that Russia is to blame for the relations with Russia deteriorating. But It was South Carolina`s other Republican Senator Lindsey Graham who asked the question, I think any fair minded person is forced to ask when it comes to President Trump and his behavior with regard to Russia. That`s next.



SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: The bottom line is that our relationship with Russia is defined by Russian aggression against us and our allies. And this suggests otherwise means that you`re disconnected from the threat Russia presents.

And President Trump`s problem with Russia is most Americans are scratching their head, why does he see Russia so differently than the congress?

You know, Putin has done something no American politician could ever hope to do, unite the congress. Why does President Trump have a different view of Russia? And that is going to keep people asking questions.


HAYES: Senator Lindsey Graham of South Carolina edging closer to a question many in his party might want an answer to.

Joining me now, former Congresswoman Elizabeth Holtzman who served on House Judiciary Committee during the Watergate scandal; and MSNBC analyst Josh Earnest, former White House press secretary.

Josh, I want you to talk about the closest analog that President Obama faced in his term, which was the Iran deal. And the Iran deal was with a nation the U.S. doesn`t have diplomatic relations with or a nation that has taken actions contrary to U.S interests, and a huge opposition in congress to a lot of parts of it.

And the way that it struck me as interesting to compare the way President Obama talked about that deal and the relationship with Iran, and the way this president talks about Russia. What do you think?

JOSH EARNEST, MSNBC ANALYST: Chris, I think it is an entirely relevant metaphor -- or connection to draw here, primarily because much of our discussions with congress as we are trying to bring Iran to the negotiating table and as we were trying to complete our negotiations with Iran were about what role congress was going to have in lifting sanctions.

So it is not unique for there to be a dispute between the executive branch and the legislative branch about how most effectively to implement sanctions and when to relieve them.

And there`s always a sense in the executive branch that congress may be back seat driving when it comes to foreign policy.

In this case, while we may have had our differences with Democrats -- with Republicans and even some Democrats when it came to executing the Iran deal, there is one who doubted in a very fundamental way, President Obama`s commitment to pursuing America`s interests alone.

When it comes to Trump`s dealings with Russia, there is a concern that he frankly may have conflict of interest.

HAYES: Yeah, the statement of the president this morning was sort of -- again, the thing at the core of this is if he were to acknowledge the fact, or he would to accept the findings of the intelligence community and other people that Russia did this fairly brazen thing, then you can have a conversation that sort of started with this saying yes, they did this, but we need to work with them on these different things and we can`t -- but to blame the U.S. congress for relations with Russia is a pretty remarkable thing for the U.S. president to say given what Russia did during the election.

ELIZABETH HOLTZMAN, FORMER CONGRESSMAN: Right, given what Russia did and given his reaction to it, as you pointed out. I mean, Russia interfered with our democracy, wanted to interfere. We don`t really even at this point know the full extent of that.

And for us -- for the president not to acknowledge that and not to say, OK, something terrible happened here. We`re going to stop it from happening again. We`re going to find out how it really worked. And we`re going to create mechanisms to assure the safety of our election process. He`s done none of those things.

Instead, he says it`s a hoax, it`s a witch hunt, it`s nonsense, fake news, and by the way, congress, you`re responsible if the Russians don`t like us or we`re in bad odor with them, or whatever it is. It`s you`re fault.

I mean, he has to acknowledge the reality of what happened. He has to accept the findings of our intelligence agencies. They are unanimous in this. Nobody has disputed it. And he has to come up with a solution to protect our democracy. He`s walked away from all of those issues.

So, the question is why?

HAYES: Right.

I mean, let me follow up on this. And I`ll come back to you in a second, Josh, but you were there for Watergate. And one of the things that happens in Watergate is the investigation starts going in all sorts of different directions. At the end of it, we have this picture of the Nixon White House, which is remarkable, and it shows all sorts of wrongdoing in a million different directions.

I mean, there`s violation of what little campaign finance law there was. There`s essentially you know slush funds being paid. There`s break-ins, et cetera.

HOLTZMAN: Illegal wiretaps.

HAYES: Yeah, how did you -- I mean, I guess my question is, what is your feeling about the belief on the part of the president and others that this is a witch hunt and it is just going to sprawl out endlessly and there`s something unfair about that?

HOLTZMAN: Well, I think he is completely wrong. He`s -- I mean, you have to ask yourself, why is this president fighting the reality so hard? We understand he`s worried about people not believing he was validly elected, of course he was validly elected as far as we know at this point. But the fact of the matter is we have to protect the U.S. and he`s not ready to go there.

HAYES: Josh, I thought it was very interest the president tonight goes to West Virginia. It`s a state that he has the highest approval rating, a state he won by 42 points. It`s a state I would assume that should he stand for reelection in 2020, he will win once again. And he did something I wasn`t expecting. The last time there was big news about Mueller and the investigation he was doing a rally, which I believe was in Ohio, in Youngstown a week or two ago, he basically ignored it.

Tonight, went right at, went right at it saying this is a distraction. Democrats are selling this because they don`t have a message. What do you make of him changing his tactic about how he`s speaking about this?

EARNEST: He is clearly in a position where he`s feeling much more on the defensive than he was even before. And, you know, there is a palpable sense, I think, that the sound bite that you pulled from Senator Graham is a pretty good indication that it is not just Democrats, this is no longer a situation in which it is partisans who are disputing Trump`s handling of the Russia situation. There are Republicans on Capitol Hill and other places that are genuinely concerned, not all of them, unfortunately, but some are.

And Chris, it`s troubling because we want to be in a position where we can count on the person who is entrusted with representing the United States at the negotiating table, to have our best interests at heart. We want to count on that person who is making those fateful decisions to not be conflicted by something that they have yet to disclose.

And it is a troubling thing. Even sort of setting aside my own preference in the outcome of the previous presidential election, it is troubling that we can`t put faith in the president of the United States to make sure that he is looking out for our interests when it comes to interacting with our adversaries.

HAYES: Finally to you, do you see real signs of congress sort of moving to sort of reassert itself in a sort of constitutional sense as co-equal to the president?

HOLTZMAN: Yes. They haven`t gotten there yet. And it make take them some time, and that`s OK, because we`re talking about really how to control the president and how to reassert power, so better to do it in a careful, constitutional way.

But I think congress is very disturbed at his failure to recognize the reality of the Russian interference, for his failure to protect us against that, of his attacks on legitimate investigations. This is completely wrong for a president and it could be even seen -- his attacks on Mueller could be seen as possible obstruction of justice, a crime itself.

It`s an abuse of power for a president to do that. Let the investigation go forward.

HAYES: Elizabeth Holtzman and Josh Earnest, thank you both.

HOLTZMAN: Thank you.

HAYES: Still to come, the president`s secret service moves out of their base in Trump Tower because of a lease dispute with the president`s company. An amazing report from the Washington Post ahead.

And baptized by the presient, a political conversion in Thing One, Thing Two next.


HAYES: Thing One tonight, ahead of the president`s trip to West Virginia this evening, the West Virginia Republican Party sent out a tweet mocking the state`s Democratic Governor Jim Justice, quote, "low energy West Virginia governor refuses to stop millions of dollars in contracts to companies who cheated West Virginia taxpayers. Sad!"

Very Trumpian tweet, but President Trump himself expressed a very different view of the so-called low energy governor tonight.


TRUMP: I would like to invite my good friend and your governor, Jim Justice, up to the stage to share this news with all of you.

Jim, come on up. Come on up, Jim. Look at this guy.


HAYES: Why was the West Virginia Republican Party mocking the president`s good friend? That`s Thing Two in 60 seconds.


HAYES: Democratic West Virginia Governor Jim Justice has a few things in common with Donald Trump: both men are billionaires. In fact, Justice is reportedly West Virginia`s only billionaire, richest guy in the state. And after tonight, both men will be members of the same political party.


GOV. JIM JUSTICE, (R) WEST VIRGINIA: Today, I tell you as West Virginians, I can`t help you anymore being a Democrat governor. So tomorrow, I will be changing my registration to Republican.


HAYES: That came just hours after the West Virginia Republican Party attacked Governor Justice, calling him low energy and sad. The executive director of the West Virginia Republican Party explained in a statement later this afternoon, Jim Justice`s past differences with our party and our party`s platform came while he was a Democrat.

So if you`re following along, the state Republican Party eagerly mocked him a few hours ago, but now they have a friend in Jim.


TRUMP: Having Big Jim as Republican is such an honor. I will tell you. Such an honor. Fantastic man, a fantastic guy. And thank you, Jim, very much.

All over the nation, they`re watching. And they really appreciate that.


HAYES: Another story breaking tonight, Te Washington Post reporting the Secret Service is out of its Trump Tower command post because apparently they can`t afford it.

Noting that, quote, in early July, The Post was relocated to a trailer on the sidewalk more than 50 floors below.

A Trump organization spokeswoman told the paper, it would be, quote, more cost effective and logistically practical for the Secret Service to find space elsewhere.

The Post reported that, quote, two people familiar with the discussions said the sticking points included were the price and other conditions of the lease.

Basically the Secret Service charged with protecting the safety of the president and his family have to work from a trailer on the sidewalk because President Trump`s business apparently wants to squeeze more money from the service.

The story is just the latest example of agencies and individuals around Donald Trump struggling to deal with the chaos and uncertainty that`s becoming something of his hallmark, all of which, of course, comes on top of the steady string of news about investigations into Russian interference in the 2016 election and potential collusion by the Trump campaign. Like the Grand Jury Robert Mueller has now impaneled.

All those revelations only make it that much harder for congress to focus on its actual legislating. How congress deals with the president`s once they return from the August recess, next.



SEN. JACK REED, (D) RHODE ISLAND: Has the confidence of many, many people here on both sides of the aisle. And again, on behalf of the American people, we have to get answers. And we have to get answers that will be accepted. They won`t be dismissed as partisan. They won`t be dismissed as being just convenient, they have to be conclusive. And I think Bob Mueller can do that.


HAYES: Democratic Senator Jack Reed of Rhode Island reacting to the breaking news reported by the Wall Street Journal that Special Counsel Robert Mueller has impaneled a grand jury in Washington, D.C. to investigate potential ties between the Trump campaign and Russian interference in the 2016 election.

NBC News has not independently confirmed that report, but if true, it would indicate the federal probe may be accelerating into a crucial new phase.

Now that story broke just as the Senate was wrapping up its business before the August recess. Tonight, many lawmakers are headed home for the five- week vacation where they may face new questions from constituents about the advancing Russia probe as well as other items.

I`m joined now by Betsy Woodruff, political reporter for The Daily Beast; former Republican Congressman David Jolly of Florida.

Betsy, what do you think -- how do you characterize the mood on Capitol Hill as theyhead into this August recess?

BETSY WOODRUFF, THE DAILY BEAST: I think there`s a sense of resignation. The reality is lawmakers have been dealing with Russia questions for quite some time now and my understanding is that these questions are only going to get more acute.

The strange thing is that the president being part of an investigation that`s currently being run by a former FBI director is actually the new normal., that`s the world that we live in.

I spoke with some federal prosecutors earlier in the evening -- former federal prosecutors, who said they expect it to take Mueller several more months to get this probe wrapped up. They expect it to be potentially a month or two at least before he indicts anyone, which means the Russia questions are not going to go away when recess is over, and the lawmakers have to make peace with that.

HAYES: Yeah, what do you think, David, about -- you know, you`re going back for August recess, it`s seven months and there`s no big legislative accomplishment to show for it other than the sanctions bill passed over the objections of the president?

DAVID JOLLY, FORMER REPUBLICAN CONGRESSMAN: Sure, look, it`s an embarrassing time to be a Republican having to defend your record.

But there are a couple of things that occurred. Listen, when the Senate left today, on their way out the door they handcuffed the president of the United States through some procedural moves to make sure the president could not make recess appointments while they`re gone.

And the reason that`s significant is because Senators know what the American people are feeling today. Today was a marker in history. Rarely do you see it in the administration the subject of a grand jury investigation.

And while it is not a jury, a trial jury, it is one that can ultimately issue an indictment. And it is a forum in which we could see this president or people in his administration commit perjury, it`s a forum in which we could see the president`s taxes unveiled, and frankly, it`s a form for history. This is not a light matter that occurred today. Senators know that, and they will cast a cloud over the month of September where they have critical decisions to make.

HAYES: Betsy, I`m going to ask you a little bit to play mind reader, but I know that you talk to a lot of people on Capitol Hill. You have good sources. So, I wonder what the thinking of the Republicans on Capitol Hill is about their own judgment about what might come out? You`ve got to imagine that that has shifted and changed and grown as they`ve watched the evidence like other people watching this, or people reporting it out, and I would imagine that also effects how they think about what they`re going to have to do or not do vis-a-vis the president.

WOODRUFF: Right, I think that`s a fair assessment to make over the course of the last 12 months, 18 months even. A lot of Republicans are having second thoughts about all sorts of conclusions that they`ve come to when it comes to politics.

I think one of the things that`s most important here is that over the course of the campaign, talking to Republican operatives, members one thing they would constantly bring up as an argument for Donald Trump was look at his kids, look at his family. He raised a good family.

The fact that Don Jr. is now at the center of this Russia investigation is something that just kind of undermines that entire argument.

HAYES: That`s interesting.

WOODRUFF: That case to be made for him, right.

And if there`s one thing we know about grand juries it`s that they bring out the dumbest sides of people. We know this grand jury is likely to have a lot of serious questions about the meeting that Don Jr. had with some Russian operatives over the summer of 2016 and the fact that the president`s son has now become a key part of this only raises I think broader concerns about what it means to be a Trump.

HAYES: David, do you imagine that Republican lawmakers are going to be fielding questions about this? There`s a sort of...

JOLLY: Of course.

HAYES: The story I keep seeing that no one cares about the Russia investigation, which I don`t think is true; although I also do think that people probably care more about things they feel directly affect them from a day-to-day basis, whether that`s health care or jobs. What would you anticipating if you were going back to your district right now?

JOLLY: So, look, there is some polling evidence that suggests Russia is not the most important issue to the American public, but what is is trust and the ability to know that the president is being an honest broker.

Chris, you hit on a brilliant point with your last question, and it`s this: United States Senators, Republican Senators tonight, do not do not see the president of the United States as a trusted partner. They might articulate similar policy perspectives, Republican, conservative policy perspectives, but that is now coincidence, not coordination, with this president.

They cannot trust this president as an honest broker. First, because he`s shown he`s willing to throw them under the bus, but second, they don`t know the next shoe to drop. So they might talk about similar policy agendas and policy goals, but it is not in coordination with this president, nor will it be going forward when they get back in September.

HAYES: Well, that`s a point and it raises something I`ve noticed, Betsy, which is a difference between how the Senate and the House are behaving.

The Senate has been -- I think Senate Republicans have been more independent. They`ve sort of separated themselves more from the president I thought very notable that someone like Tom Tillis, who doesn`t have some reputation for being some party bucking maverick, would be someone to introduce this legislation that the Senate majority leadership is going to keep a pro forma session.

We haven`t seen the same thing in the House. What do you make of that, Betsy?

WOODRUFF: I think part of the reason for that is just the difference in the nature of the two chambers of congress. In the Senate, the Senators have a much stronger sense of their power. Each individual Senator has a lot more influence, has a lot more clout, has much more leverage to sort of gum up the workings of Washington than the members of House do.

And, of course, House members are constantly freaking out about their reelections. You ask any House member what they`ve been doing earlier in the day, there`s a very good chance they`ve been on the phone fundraising. And that just affects the way that you think about law making and that you think about the White House.

Senators just have more breathing room. They have stronger senses of self, if you will. Plenty of them aren`t running for reelection and that makes it easier for them to buck their parties when they feel like they need to.

HAYES: That scan to you, David?

JOLLY: Chris, Betsy is right, it is power, it is independence, but fundamentally it`s courage. We`re seeing courage among Republican senators. We have not seen courage among Republican House members. That`s just the reality we`re living in right now.

HAYES: Yeah. And Paul Ryan I think at some poine, he sort of has a date with destiny because he has almost more than anyone else, high profile sort of managed to kind of deflect and evade and -- I don`t want to talk about that.

JOLLY: He`s dancing with the devil. He`s dancing with the devil. And he knows it. And he made that decision to do so.

HAYES: He sure does.

Betsy Woodruff and David Jolly, thank you both.

WOODRUFF: Sure thing.

HAYES: That is All In for this evening. The Rachel Maddow show starts right now.