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All in with Chris Hayes, Transcript 8/31/17 The Trump Moscow push

Guests: David Kocieniewski, Natasha Bertrand, Michael Isikoff, Erica Orden, Carrie Cordero

Show: ALL IN with CHRIS HAYES Date: August 31, 2017

Guest: David Kocieniewski, Natasha Bertrand, Michael Isikoff, Erica Orden, Carrie Cordero


JAMES PETERSON, LEHIGH UNIVERSITY PROFESSOR: We`re back to school this week, everyone knows that. But what is weighing on the minds of students across this nation, Charlottesville and obviously Harvey.

KORNACKI: OK, thank you, everybody. "ALL IN" with Chris Hayes starts right now.



UNIDENTIFIED MALE: How long was the meeting?


UNIDENTIFIED MALE: Paul Manafort was on his --

TRUMP JR.: On his phone.

UNIDENTIFIED MALE: The whole time?

TRUMP JR.: Pretty much.

HAYES: The NBC exclusive report about what Trump`s Campaign Manager was doing on his phone during that meeting with Russians. He was taking notes about the RNC.

UNIDENTIFIED MALE: And that meeting is emerging as a major focus of the investigation.

HAYES: Tonight, what this means for the Russia probe and why the President`s lawyers are already talking to the Special Counsel about obstruction of justice.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: I said to myself, I said, you know, this Russia thing with Trump and Russia is a made-up story. It is an excuse.

HAYES: Then, new dangers in Texas as the floodwaters cause explosions at a major chemical plant, and how to get rich in Donald Trump`s Washington. The story of how the man who promised to drain the swamp created an entirely new ecosystem.

TRUMP: Drain the swamp!

HAYES: When ALL IN starts right now.


HAYES: Good evening from New York, I`m Chris Hayes. We`ve a lot, a lot -- a lot of breaking news tonight on the Russia investigation, including a report by the Wall Street Journal that the President`s attorneys have been making the case to Special Counsel Robert Mueller that the President did not commit obstruction of justice when he fired former FBI Director James Comey. Much more on that coming up. And get this, Daily Beast now reporting Mueller has enlisted help from the IRS for his investigation which could give him access to the President`s tax returns.

But first, the exclusive reporting from NBC News that notes taken by Paul Manafort at that infamous meeting with the Russian lawyer, among others during the campaign contains a cryptic reference to political contribution. Ever since it was first revealed earlier this summer, the President and his allies have sought to obscure or downplay the significance of that meeting which took place at Trump tower in New York in June 2016 and was attended by the President`s son, Donald Trump Jr., Paul Manafort, then the Campaign Chairman, and Jared Kushner, the President son-in-law and now a White House Adviser. In an initial statement, Trump Jr. explained that he and the Russian lawyer had, "primarily discussed a program about the adoption of Russian children."

It was only after he released e-mail traffic leading up to the meeting that we learned Trump Jr. had agreed to attend on the promise of, and I quote the e-mail here, some officials documents and information that would incriminate Hillary in her dealings with Russia. Framed as part of Russia and its government support for Mr. Trump, to which Trump Jr. responded if it is what you say, I love it, especially later in the summer. Later in the summer, the hacked e-mails would be made public. According to White House, the President himself waited on that initial misleading statement about adoptions that was released by Don Jr.

And now, NBC News reports that the Special Counsel`s team is investigating whether the President was trying to hide the real purpose of the Trump Tower meeting. In their efforts to down play the meeting, both the President and his son have emphasized that Kushner left after a few minutes and Manafort was said to be on his phone the whole time.


UNIDENTIFIED MALE: How long was the meeting?

TRUMP JR.: 20 minutes or so.

UNIDENTIFIED MALE: About 20 minutes. And Jared left after five or ten?


UNIDENTIFIED MALE: Like she said. And Paul Manafort was on his --

TRUMP JR.: On his phone.

UNIDENTIFIED MALE: The whole time?

TRUMP JR.: Pretty much.


TRUMP JR.: It -- listen, like I said --


TRUMP JR.: Pretty really apparent that this was not what we were in there talking about.

TRUMP: It was a short meeting. It was a meeting that went very, very quickly, very fast. Two other people in the room, they -- I guess one of them left almost immediately and the other one was not really focused on the meeting.


HAYES: But it turns out Manafort wasn`t just playing Candy Crush. He was actually typing up notes about the meeting that he was in on his smart phone. And according to NBC News sources, those notes contained a reference to political contributions and RNC in close proximity. It is, of course, illegal for foreign nationals to donate to U.S. elections. Manafort`s spokesman responded in a statement, it is 100 - it is 100 percent false to suggest this meeting included any discussion of donations from Russian sources to either the Trump campaign or the Republican Party. Mr. Manafort provided the Senate Intelligence Committee with the facts and his notes, so the speculation and conjecture is pointless and wrong. NBC`s Ken Dilanian was one of the reporters who broke that story. Ken, what can you tell us about these notes that Manafort wrote?

KEN DILANIAN, NBC INTELLIGENCE, AND NATIONAL SECURITY REPORTER: Chris, our sources are telling us that they`re cryptic notes, you know, of one or two words. Certainly not a verbatim transcript or even a set of very good notes, actually the very hard to discern and hard to understand. But some of the words included RNC, a reference to Republican National Committee, and some reference to political contributions. Now, earlier in the day, Chris, our sources were saying that the word donations was explicitly in quotes in the notes. We`re now being told now that that word was not in there, it was a different word or set of words but the message was clear.

Actually, it`s really not clear because investigators are saying that they are not sure exactly what is going on here, but they have an obligation to and are very interested into looking into the question of whether the subject of donations from Russians to the Trump campaign was even broached at this meeting from either side. That`s a hugely important issue because, as you just said, that would be illegal. It would be illegal for the Russians to donate, it would be illegal for any political campaign to accept foreign donations. And so that has got certainly the Congressional Committees very interested in getting to the bottom of that.

HAYES: One small point that seems relevant to me here, and this is independent of what the content of the notes are is that there has been a story told by the folks in the Trump circle, Don Jr., the President of the United States and others, that this was a nothing meeting, it was a bust. They kept having to admit there were more and more people there as they went on. And one of the main issues that Paul Manafort was on his phone. It appears he was taking notes of the meeting, right?

DILANIAN: That`s exactly right. And I agree with you, that is a significant thing because it`s been portrayed that he was on his phone, paying attention to other things. And he may well have been you know, looking at e-mail but we know he was also taking these notes which have been turned over to the House and the Senate and the Special Counsel, Robert Mueller. So you`re absolutely right. He was paying enough of attention to take some notes, and those notes are now under scrutiny.

HAYES: My understanding is that when this story first broke and it was sort of shaken loose by reporters and then Donald -- at the New York Times and particularly Donald Jr. released the e-mail to sort of get out ahead of the story, that Mueller`s team didn`t know about this meeting. The reporting now suggests how important is this meeting to their investigation?

DILANIAN: It is looming really large, Chris. It`s not clear whether Mueller`s team knew about the meeting. I did see some reporting to that effect. I don`t think that question is fully answered. But what we know now is that they`re heavily scrutinizing this meeting. You know, as you know, NBC News reported a couple of days ago that one of the things they`re looking at is why President Trump crafted this highly-misleading statement on his son`s behalf, suggesting the meeting was just about Russian adoptions and it was kind of short and nothing to see here. This was before the e-mails were released. You know, in fact, it was a meeting carried out with an explicit promise as you said of help from the Russian government and there`s a lot that we don`t know about it.

And even if it was as the Russians involved assert, you know, really a meeting about the Magnitsky Act and this really sort of esoteric set of sanctions and nothing specific was offered. The fact that Donald Trump Jr. accepted the meeting with a promise of help and incriminating information about Hillary Clinton is a red flag for investigators who are wondering what else he accepted because it showed they were willing to play ball with the Russians.

HAYES: All right, Ken Dilanian, thank you.

DILANIAN: Absolutely Chris.

HAYES: The three Trump campaign officials who attended the Trump Tower meeting, you have Jared Kushner, Paul Manafort, and Donald Trump Jr., Kushner is the one who seems to have faced the least scrutiny over his participation. But that was not the only meeting with the Russian national that Kushner failed to disclose. We also know that during the transition after President was elected, he met with both the Russian Ambassador to the U.S. in a secret meeting and the head of a sanctioned Russian bank, contacts he repeatedly omitted from security clearance forms under penalty of perjury.

Today, new reporting from Bloomberg lays out what could be meaningful context for Kushner`s conduct. His family real estate business owes hundreds of millions of dollars on a 41-story office building on Fifth Avenue and has failed to secure a foreign investors to despite an extensive search. Investigative reporter David Kocieniewski co-wrote the story for Bloomberg and he joins me now. The lead of the story is arresting which is basically that Kushner wakes up every morning with this problem and what is that problem?

DAVID KOCIENIEWSKI, BLOOMBERG NEWS INVESTIGATIVE REPORTER: The problem is that they have overpaid for the building. They bought it in 2007 and set a record price at the time for any single building. And ever since, they`ve been chasing that, trying to make it work, it was highly leveraged, to begin with. They had to sell off the very lucrative portions of the building where the retail is and they later had to refinance it when it was tearing on the brink of insolvency. So they`ve been trying to find out ways to pump money into that. They brought in different partners. Vornado, the well-established and well capitalized U.S. company is there as a partner now. But even now the building is not meeting -- it is not -- in some quarters it`s losing money. So they`ve been chasing money, trying to find foreign investors and it`s a question whether they can do it before they have to -- the mortgage expires in February 2019.

HAYES: So that`s -- it`s a race against time and they need -- they need capital infusions. And that has led them at least in one instance to foray in one foreign nation which might have reasons to cozy up to the son-in-law of the President of the United States, which is China. What were they trying to do in China?

KOCIENIEWSKI: China was the deal that as far as we know got the farthest. The negotiation, was not a deal but Anbang which is an insurance company that invests in real estate and lot of development elsewhere was in negotiations with the Kushners, and they said it began in 2015, it heated up during the end of the election and after the election but before the inauguration. When Jared Kushner met with the head of Anbang, they hammered a proposal that would have had about $2 billion of Anbang`s money. There`s this plan to build a huge tower to knock down the existing tower and build this gigantic 80 story glittering tower.

And the Kushners would have got -- would have pocketed $400 million out of the deal. They would have been able to take 400 million in cash and still keep part of their stake in the building. When that was first reported, there was so much scrutiny that the -- Kushner had to walk away from the deal and Anbang walks away. So they`ve still been searching elsewhere for money and as far as we know have not yet found it.

HAYES: OK, so the context here of course is this would leave, one imagines, Jared Kushner fairly open to the possibility of manipulative influence from a hostile foreign actor, say, a Russian connected bank if he is in fact as desperate as it appears he and his family company are to make sure they can get foreign capital infusion so that this thing doesn`t go bust, right?

KOCIENIEWSKI: I think you know, that is a question people in Congress are asking. To be fair to the Kushners, there`s no evidence that there was anything asked for at the time, and the Russian meeting you mentioned, you know, Jared Kushner says that it was -- it was a diplomatic message meeting. The Russians say otherwise. The head of the bank, Sergei Gorkov said it was a business meeting. And Vladimir Putin`s spokesman said that it was a business meeting. So there`s a dispute. Jared Kushner said I did not collude, I did not mix business and my diplomatic effort, and you know, I think that`s what Congress and Mueller are going to be looking at now.

HAYES: All right. David Kocieniewski, thank you for your time tonight.


HAYES: Natasha Bertrand, a Senior Reporter for the Business Insider, Michael Isikoff is Chief Investigative Correspondent for Yahoo! News. Natasha, you`ve been very, very closely tracking all of this Russia news. I mean, one be big takeaway and from the NBC News story today about Manafort in the meeting is, any way you slice it, Manafort is at the center.

NATASHA BERTRAND, BUSINESS INSIDER SENIOR REPORTER: Yes. And I think that today with the news that Mueller has enlisted the help of Schneiderman, the New York Attorney General Eric Schneiderman to help him investigate Paul Manafort`s tax history, perhaps some financial crimes that he may have committed in the State of New York really is an indication that he is really at the center of this investigation. And it`s not -- it`s the dual purpose of Mueller kind of enlisting Schneiderman is it can help them both.

Now, Schneiderman is very much focused on the money laundering aspect. He wants to know if Manafort laundered any cash into New York City Real Estate. Mueller is very interested in whether or not Manafort was compromised during the campaign whether he was in debted to pro-Russian interests. So, in that sense, partnering with Schneiderman who can investigate these money laundering charges in depth, he can then figure out, well, where did this money come from, where did he laundered it, why, and in that sense, he can help him with the Russian investigation.

HAYES: There`s one more partner that is reported Michael Isikoff, in the Daily Beast by Betsy Woodruff as a frequent guest on this program that the sort of criminal unit of the IRS Tax Division, the Criminal Division in the IRS is now teaming with Mueller which also seems significant because that a trove of information for his investigators.

MICHAEL ISIKOFF, YAHOO! NEWS: Sure. And if you look at what all indications are that Mueller is focused on here is exactly as Natasha just said. Those real estate dealings and the business dealings that Manafort had in particular with two Russian oligarchs. One is Oleg Deripaska, who is aluminum magnate, very close to Vladimir Putin, and Mueller`s business relations with Deripaska go back to at least 2007. We reported last year on these document in the Cayman islands about the equity fund that Manafort and Deripaska had set up to invest in Ukrainian telecommunications. They later had a falling out. But that was -- that was one big source of concern and a red flag for the investigators are also going back. There`s another oligarch, Dmytro Firtash who is actually under indictment by the Justice Department and there are documents and a New York lawsuit that show Mueller and Firtash were in business, had a scheme for --

HAYES: Manafort.

ISIKOFF: I`m sorry, Manafort, Manafort, and Firtash had a scheme to buy the Drake Hotel in New York, and that was alleged to have been a scheme to allow Firtash to launder illicit funds from his business in Ukraine. So, from all indications, that`s a big chunk of what Mueller is looking at here.

HAYES: You know, so there`s sort of a -- I think it is important to think about this procedurally, which is that there are a lot of loose threads financially with Manafort, a lot of indicators. I mean, people should remember that the reason he left the campaign was because he basically discovered a ledger in Ukraine saying he got illegal payments, suggesting he got a legal payments. But then there`s -- that sort of the means to the end of getting the bottom of it. And clearly close to the bottom of this meeting, what are the questions you have as someone who has tracked this very closely about what happened after that meeting?

BERTRAND: After the Trump Tower meeting?


BERTRAND: Well, you would have to look at all of the things that happened during the summer after the Trump Tower meeting. So you would have to look at the timing of, you know, when the e-mails were released, whether there was a kind of quid pro quo that was exchanged during that meeting between Manafort, Jared Kushner and Donald Trump Jr. and these Russians who are very clearly closely connected to the Kremlin. So I think that looking through everything that happened that summer through the lens of that meeting, having occurred very early on in the summer explains a lot, or it can explain a lot depending on how you look at it.

HAYES: The fact that Manafort now faces the possibility of criminal prosecution -- we don`t know if he -- clearly he hasn`t been charged yet. What do you think the sort of calculation he`s thinking of is?

ISIKOFF: Well, he wants to know how strong a case Mueller is building against him. Look, standard prosecutorial practice is you throw the book, build the strongest case you can at Manafort, and then see if he`ll flip and cooperate in the investigation. I should say at this point so far there`s no indication that he is open to that. My understanding is that the offer`s been out there on a number of occasions and he`s rebuffed it. So, you know, that may have been the big reason why the FBI conducted that search, unannounced search of Manafort`s home a couple of weeks ago to spook him, to let him know how serious this investigation is. But, you know, these are the kind of, you know -- this is the way the prosecutorial practice works in the United States. You try to build the strongest case as you can in hopes of getting cooperation. We`re just going to have to see whether that happens in this or not.

HAYES: All right, Natasha Bertrand and Michael Isikoff, thank you both. Tonight from collusion to obstruction of justice, new reporting the President`s lawyers met with Mueller to argue that he did not obstruct justice by firing James Comey. The reporter that broke the story joins me in just two-minutes.


TRUMP: Regardless of recommendation, I was going to fire Comey, knowing there was no good time to do it. And in fact, when I decided to just do it, I said to myself, I said, you know, this Russia thing with Trump and Russia is a made-up story, it is an excuse by the Democrats for having lost an election that they should have won.


HAYES: It has become increasingly clear that separate from any possible collusion case, Special Counsel Robert Mueller is pursuing the possibility of an obstruction of justice case against President Trump. The Wall Street Journal reporting today that the President`s lawyers have met with Mueller several times in recent months and submitted memos arguing that the President didn`t obstruct justice by firing Comey and calling into question Comey`s reliability as a potential witness. Trump lawyer John Dowd told NBC News, he would not discuss his communications with Mueller. Another Trump lawyer Ty Cobb said, "we have great respect for the Special Counsel.

Out of respect for his process, we will not be discussing incremental responses." On Monday NBC News reported that Mueller`s investigators are "keenly focused on the President`s role in crafting the administration`s misleading initial response to that report that his son Don Jr. met with a Kremlin-linked lawyer during the campaign. They want to know what Trump knew about the meeting and whether he sought to conceal its purpose. One of the reporters who broke the story about the Trump`s lawyers meeting with the lawyer, the Wall Street Journal`s Erica Orden joins me now. So how does this work? They`ve been going over to Mueller`s office in person, these lawyers?

ERICA ORDEN, THE WALL STREET JOURNAL POLITICS REPORTER: They have met with Robert Mueller in person and his team. It`s unclear whether it was at Mueller`s office, presumably.

HAYES: And these memos, these are sort of trying to make the case ahead of time that the President didn`t obstruct justice.

ORDEN: That`s right. There were two memos, at least two memos we know of. The first was submitted with regard to -- it was a legal argument by the President`s lawyers concerning what they see as an argument why he can`t be charged or investigated for obstructing justice. And the second concerned their questions about Comey`s -- Jim Comey`s reliability as a potential witness.

HAYES: So the first one indicates to me that they have some reason to think that -- I mean this has been reported, but the existence of the memo coming from his own lawyers would seem to concretize the reporting that this is something Mueller is, in fact, pursuing and investigating.

ORDEN: I suppose you could interpret it that way.

HAYES: I mean, presumably they`re not just writing these (INAUDIBLE).

ORDEN: Presumably.

HAYES: Do you -- is it -- I guess my question, is that normal for this kind of interactions in these sorts of settings between defense attorneys and investigator/prosecutor?

ORDEN: It`s not unusual for criminal defense attorneys to meet with a prosecutorial team. It`s a little bit early in the process for this to be playing out, and it is a little bit -- it`s somewhat unusual that they actually submitted written arguments.

HAYES: Have you read the memos?

ORDEN: I can`t really get into that.

HAYES: You can`t answer that?


HAYES: Because what`s curious to me is that there is -- you know, there`s a level of sort of criminal exposure possibly for people involved in this, and then there`s something like very intense theoretical constitutional questions which is about what the President can and can`t be pursued for.

ORDEN: Sure.

HAYES: And I guess what do you know, what is your reporting indicate about how they`re thinking about that from the Trump legal perspective or Mueller`s team?

ORDEN: Well, from the Trump legal perspective, their arguments -- their primary argument would seem to be as far as our reporting shows that he -- that he didn`t obstruct justice because his executive authority gives him the ability to hire and fire people including the Director of the FBI at will.

HAYES: Right, this sort of fundamental idea that definitionally the President exercising the constitutional power vested in him to relieve of duty someone that works for him cannot be obstruction of justice.

ORDEN: Right. And of course, that does not speak to his intent in firing whoever he is firing which is going to be a factor in whatever consideration of charges that Mueller`s team may weigh.

HAYES: Erica Orden, thanks for your time tonight. (INAUDIBLE) your reporting.

ORDEN: Thank you.

HAYES: With me now to break all this down, former Federal Prosecutor, Department of Justice, National Security Lawyer, Carrie Cordero. What`s your reaction to this news?

CARRIE CORDERO, FORMER FEDERAL PROSECUTOR: So, it`s really interesting. The description that was just given of the memo sounds like perhaps they try to cover a couple of things. One, perhaps whether or not the President can be charged with a crime. It sounds like perhaps the memos talk about that issue. And then, second of all, it sounds like maybe the memos get into whether or not the President`s conduct constitutes obstruction. And those are two distinct legal issues.

One, whether or not a sitting President can be charged with something and constitutional lawyers disagree about that question. There are arguments that a sitting President can be charged with something and there have been counter arguments made by constitutional lawyers all over the country that he can or cannot. So that`s a disagreement. On the obstruction piece, it`s really interesting if they actually are arguing on the merits of whether or not his conduct was obstruction because if they`re only focusing -- and again, this is just speculation because we haven`t seen the memos.

But if they`re only arguing that the firing of Director Comey was not obstruction, then they`re really on their heels because that is just one piece of what a potential case for obstruction could cover. Which I would suggest would be a whole range of behaviors that the President has engaged in since last winter, that you can start all the way back with the dinner that he had with Comey trying to get the Flynn case shut down to the firing to behaviors after the firing, which include tweets that he sent about wiretapping, tweets that he sent that could be interpreted as sort of threatening former Director Comey as a witness when he said there might be tapes out there, to talking to other government officials regarding their knowledge or their ability to shut down the investigation.

So if the memo from the White House is focusing only on the firing, then -- then I think they`re missing the bigger picture because an obstruction case is part of a pattern of behavior of this President since last spring and all through this summer. And we can look to a variety of events, acts, statements, tweets that he`s made that all lend toward a case of obstruction.

HAYES: You know, I know some people -- I`ve reported on financial prosecutions a little bit. I know some folks who sort of reported on white collar defense. And they said one of the approaches of, you know, very adapt white collar defendants is to try to sort of essentially not have an adversarial posture towards prosecutors, particularly at the beginning, a kind of partnership relationship, we`re working with you, we`re giving you stuff. It`s interesting to me that`s the tone being struck by these, you know, very accomplished and highly-compensated criminal defense attorneys the President has retained.

CORDERO: Well, it might be part of the strategy of Ty Cobb who is one of the newer additions to the President`s legal team to try to see if they can work something out. But, look, you played the clip of the interview with the President with Lester Holt that took place in May. I think that was the clip that you played at the beginning. And the President basically said that his purpose in firing the Director was to make the Russia case go away. So they -- I think it can`t hurt as a strategy to try to start this off in a working type relationship, but there`s a lot of facts out there over the course of the last six months or so that -- six to eight months that are not good facts for the President when it comes to obstruction.

HAYES: All right, Carrie Cordero, thank you for bringing your expertise in all of this. I appreciate it.

CORDERO: Thanks.

HAYES: Coming up, there is money to be made in Trump`s Washington. How much? Well, it depends on how close you can get to the President. That fascinating story just ahead.


HAYES: Connecticut Senator Chris Murphy was recently so dumbfounded by a Trump administration decision that he tweeted, "This is a joke, right? Basically akin to nominating Influenza to be Surgeon General." The Senator was referring to the nominee to Head to the Division of the Education Department that`s responsible for policing deceptive practices in Higher Ed. That nominee comes from a university that was cited for deceptive practices in higher ed. Julian Schmoke will be in charge of the student aid enforcement unit. He was formerly a Dean at DeVry University which is a for-profit college which last year agreed to a $100 million settlement with the federal trade commission, alleging that they misled prospective students with ads that touted high employment success rates and income levels upon graduation. Nearly half the settlement was returned to DeVry students last month.

Now, it`s not at all unusual for federal agencies to hire people with experience in the industries they`re assigned to regulate. What is a bit more unusual is that this appointment approved by a President who himself agreed to a $25 million lawsuit to settle fraud claims against him for his for-profit education venture, trump university. Remember That?

That`s The kind of thing that`s happening right out in the open in the trump administration. Now Imagine for a second what the underbelly of lobbying looks like in Trump`s Washington. The guy who wrote perhaps the definitive piece on exactly that, joins me next.


[CHANTING: Drain the swamp. ]

TRUMP: You know when I first heard that term i hated it. I said, oh, that`s so hokey. That is so hokey, but I said let`s give it a shot. I tried it, the place went crazy. Then I said maybe we`ll try it again. The place went crazy. And now i like it.

HAYES: There you have it right there. During the campaign Donald Trump pitched himself as the outsider who would drain the swamp in Washington D.C., but as president he created an entirely new environment. That environment laid out in a fascinating new piece in New York Times Magazine by Nick Confessore. He Joins me now.

As a someone who knows what the so called swamp used to be like during President Obama`s tenure, former White House Cabinet Secretary Chris Lu.

Nick it`s a great piece, it`s really colorful. I guess the sort of top line question is like what surprised you and what`s changed about this era of influence peddling in Washington?

NICK CONFESSORE, NEW YORK TIMES INVESTIGATIVE REPORTER: So what was so new to me was that Trump, in fact, despite the fact he has hired 100 lobbyists to his different agencies, he in fact arrived in washington with this pretty short baggage train of people and obligations. He was sort of a not known to the permanent class and so no one knew who to call.

And up sprung this whole class, a small one but a potent one, of people who just happened to know who to call in the White House.

HAYES: Like -- and -- and you illustrate this. I mean even something like the -- the -- the -- you know, the New Zealand Ambassador or, you know, the government wants to get in touch with the president-elect, they just don`t have a number.


HAYES: They Don`t have a number, so in pops a guy who knows Trump and I can make the connection for you.

CONFESSORE: That`s right. And so, you know, it started that way. And then it became clear that there was so much chaos in the West Wing, that there was then a heightened market for anybody who could guide you through what was really happening. Who is up, who is down, and of course, how do I talk to the president?

HAYES: Right.

CONFESSORE: How do i deal with this guy who seems so mercurial and changes his mind, and bashes company on twitter, sometimes costing them billions of dollars in market cap.

So all of a sudden like companies wanted to know, what do I do? They felt powerless in a weird way for the first time in a while.

HAYES: Chris you served in the Obama administration and there`s a lot of I think justifiable cynicism about the economy of influence in Washington. It`s cynicism that the -- President Obama himself ran against. I mean he talked about how corrupt and rigged the system was. What do you say to people who say -- who read this article or look at the Trump administration and say ever was it thus? Like this is just the way Washington works. It`s sort of corrupt. People trade favors for influence.

CHRIS LU, FORMER WHITE HOUSE CABINET SECRETARY: Look, Chris, lobbying has been around as long as we`ve had a government. But what i`m struck about in this piece is how brazen the selling of access is. Say whatever you want about obama`s commitment to ethics, but this is really pay-to-play.

And this Is not about hiring people who have policy expertise or understand arcane set of policy. It`s selling access to the president. And now more than ever there are more ways to do that. You can sit in the lobby of the trump hotel. You can book an event at Mar-a-lago. You Can even tweet a photo of yourself with a silly baseball hat and the president might retweet that.

And this Is really not about just the insiders who are selling the access. It`s about the susceptibility of the president to flattery.

HAYES: You know there`s also the -- Chris brought up something interesting there about policy, right? A lot of the dirty secret of D.C. is that a huge amount of policy is developed by outside groups and lobbyist groups that are representing their interests. Because there`s a million things go crossing overall the time, right?

You Know, this is -- this new tax code for paper mills and so who writes that provision? Well, the paper mill -- the lobbyists have it. There`s so little policy being developed in the White House. That`s part of what was striking about the article.

Like in Chris`s point, it`s really just access. There`s no agenda there that they`re really trying to deal with.

CONFESSORE: The problem here was that the policy process was so broken in this White House. It`s probably getting better now but there was no real process to latch into for the conventional lobbyist. The big lobbyists in D.C. Have learned to be policy experts. They have relationships with polling firms and advertising. They come to you with the bill written and the coalition of trade groups to support it.

HAYES: Right.

CONFESSORE: And the polling that backs it up and they hand it to you. And they know how, you know, kind of all of the pressure points in the system. In the Trump White House there was no process. It was about who gets into the room with the president? Who can leave an article on his desk? Who happens to know what he`s watching on tv. If i can get a mention while he`s watching the shows. If I`m on one of the shows.

All of a sudden like the conventional policy process was just kind of gone and it was possible to imagine -- it was possible to imagine that a single phone call to the right person at the right time might actually just reshape the whole decision making apparatus of the White House.

HAYES: Do you think this is sustainable, Chris? I mean I remember someone famously -- I forget. Someone said this to me about getting -- you know, people in the White House talking about people in White Houses go to jail. It happens in almost every administration.

It didn`t happen in the Obama White House. But you know there are a lot of legal trip wires in this thicket that it seems to me like a lot of folks in Nick`s article are running the risk of tripping over.

LU: Well, and it`s not only the people who are trying to influence. I mean you`ve just seen in the last couple of days -- you`ve seen the GSA Inspector General looking into the Trump hotel (lease). The EPA Inspector General looking into Scott Pruitts travel. Now we have the Treasury IG who`s looking into Mnuchin`s trip to go look at a solar eclipse and so this is an administration that has not taken ethics seriously and it`s going to catch up to them at a certain point.

HAYES: Yes is -- do you think there is -- I talked to someone, a young up and coming conservative in Washington at one point who was not going to work for the administration because they were afraid they would end up with criminal exposure.

How much does the sort of -- the spectre of that loom over all this?

CONFESSORE: I`m not sure how much. I mean look, as I see it Corey Lewandowski`s office (is) one of three or four essential characters in this piece. And yes Corey has been pretty brazen in his sales and his salesmanship. But I actually take the view that Corey does what almost everyone in Washington does, but he just has the sale directly. He says, hey I`ll get you access. Everyone else in Washington is like, oh I don`t do access, I provide expertise.

HAYES: They say saying the quiet part lab is always a -- is always the theme with these folks.

Nick Confessore, Chris Lu, thanks for joining us.

Coming up, they say the only thing certain in life are death and taxes. Now Trump`s tax plan on the other hand, well that`s Thing 1, Thing 2 next.


HAYES: Thing 1 tonight, the White House has been crystal clear from the start that they have been hard at work writing a tax plan. The president saying as early as February that it`s almost ready to be released.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: So we`re doing a massive tax plan, it`s coming along really well. It`ll be submitted in the not too distant future.

UNKNOWN: We`re going to get this done by the August recess.

TRUMP: we are introducing a tax plan.

TRUMP: Before we do the tax, which is actually very well finalized.

TRUMP: Our tax reform and tax plan is coming along very well, it`s going to be out very soon.

TRUMP: The tax cut is going to be major. It`s going to be simple.

TRUMP: One of the largest tax cuts in history.

TRUMP: And the whole tax plan is wonderful.


HAYES: So on this last day of August, where does that tax plan stand?


UNKNOWN MALE: The president made a very impassioned plea yesterday, support for the tax package but many on Wall Street are a little bit confused because there is no package. Could you explain to us why there is no package or detail about rates and things like that coming from the White House?

STEVEN MNUCHIN, UNITED STATES SECRETARY OF THE TREASURY: Well first of all there absolutely is a package. Since January I`ve been working with Gary Cohn and the leadership on this plan. So we have a very a very detailed plan.

UNKNOWN MALE: But when you say there`s a package, are there numbers and rates and growth estimates and things like that in that package that we can talk about?


HAYES: The package -- what`s in the package. The Treasury Secretary`s answer to that very simple question is Thing 2 and it`s coming along really well in 60 seconds.


HAYES: In seven months the only tax policy document released by the Trump administration is literally a single double spaced sheet of paper with some broad goals and a clip art White House on the top.

Stop for months president Trump has touted his wonderful tax plan that was coming along very well. But last week Politico reported that the White House would not release a plan, leaving it instead to Congress. Today the Treasury Secretary was asked is there an actual Trump plan or not?


MNUCHIN: Well first of all as I said we`ve been working on the details.


MNUCHIN: You know we came out with a statement on the group of six when we started this process. We wanted to bring the three of us together, make sure that there was one plan with the administration, the House and the Senate. We`ve done that. The House and the Senate are now socializing the plan with their members. It -- we`re going to release a blueprint and it`s going to go to committee.


HAYES: Did you follow that? Well the Wall Street Journal clarified tonight after speaking to Mnuchin.

Although congressional committees will write the tax bill, Mr. Mnuchin indicated the administration intends to stay engaged in the debate.


HAYES: New concerns in Texas in the aftermath of hurricane Harvey. After a series of explosions add a flooded chemical plant. The plant is in Crosby which is about 25 miles Northeast of Houston and it makes organic peroxides, used in things like PVC piping and polystyrene cups.

But the compounds are highly flammable, needing refrigeration so they don`t spontaneously explode, and that`s what happened earlier this morning after floods knocked out the power and the backup power. Two tons of chemicals ignited, blasting a trailer apart, sending flames shooting into the sky and leaving behind a plume of black smoke.

People living in a 1.5 mile radius around the plant had already been evacuated, but several people went to hospital after inhaling the smoke. Now more blasts are expected because the company that owns the chemical plant Arkema, says they cannot even reach the plant, let alone stop the explosions.

This morning, just one container exploded, but there are eight more on site.


UNKNOWN MALE: We fully expect that the other eight containers will do the same thing. Water is still in our facility and preventing us from accessing the facility and we believe at this point that the safest thing to do is to allow the other eight containers, product in those to degrade and burn.


HAYES: The Crosby plant is far from the only such hazard. The Washington Post reports that quote, Harris County, home to Houston, has at least a dozen federal super fund sites, more than any county in Texas.

The are hit by Harvey is also home to a significant chunk of the nation`s petroleum industry. The country`s largest refinery shut down because of flooding and could stay closed for up to two weeks.

Now Harvey has finally left Texas and is slowly moving Northeast as a tropical depression. It destroyed 7,000 homes and damaged 87,000 more. At least 32 people were killed and that number is only expected to rise.


HAYES: When Congress returns next week lawmakers will be faced with the decision whether to once again try to kill Obama care, or just try to make it work better.

And their decision -- what they decide to do could mean the end of one era and the beginning of another. Now despite weeks of protests this summer and a failed Senate vote in July on President Barack Obama`s signature legislative accomplishment, President Donald Trump insists -- continues to insist the Congress get rid of the Affordable Care Act.

Congress could still attempt to pass a bill to kill Obamacare or the White House could simply mismanage and sabotage the health care law into the ground. But there is a third option, fixing the law.

Bipartisan group of Governors now offering proposals to shore up the Obamacare insurance markets, even as the Trump Administration as part of its continuing bid to undermine the law announce just today drastic cuts in funds to promote ACA enrollment next year.

The governor spearheading the drive to save Obamacare, Republican Governor John Kasich of Ohio and Democratic governor John Hickenlooper of Colorado told me earlier why that`s a mistake.


JOHN KASICH, GOVERNOR OF OHIO: I would prefer for them to have taken that 100 million and aimed it perhaps in a different direction. Because one of the things that we have to think about is what are the most effective programs beyond just lowering the cost of health insurance to get young people to sign up. You know perhaps States could offer bonuses. There`s a variety of ways to think about it, so to me the fact that we are paying people to do what they already should have been doing doesn`t make sense. But I would still prefer to use that money to try and create a healthier pool which then lowers the cost of health insurance for everybody that needs it.

HAYES: Yeah, so just to clarify there`s two -- there`s two line items, there`s the navigators, which I think you`re referring to, which looks like it`s getting cut 40 percent. There`s also the advertising budget which is the one being cut by 90 percent.

Governor Hickenlooper let me ask you this, are you afraid of a kind of worst of all scenarios taking shape in which the law remains the law on the books but the executive manages it in such a way that it becomes essentially expensive and unworkable?

JOHN HICKENLOOPER, GOVERNOR OF COLORADO: Well certainly that`s been discussed before and really it`s been threatened. I think right now what governor Kasich and I have been working on demonstrates that there is an appetite for a bipartisan solution on this and thus a good example. You`re marketing to try and get young people to join up and get health insurance and somehow they just don`t think it`s worth it. Well one reason is it`s a little too expensive for many of them. So as John just said, if we`re able to get more people into these exchanges -- more people in the private insurance, the overall pool gets larger and the rate goes down.

That`s part of it and then we can provide incentives or maybe bonuses as John just suggested. Maybe there are ways that we could increase the penalties a little bit and I`m not talking necessarily about the individual mandate penalties but you know people were jumping in and out and in and out of insurance. Maybe there should be a stiffer penalty in doing that even then what the Republicans had said. There might be a way to navigate this so that we don`t need as much advertising money.

But I agree with John that we should -- that right now we have other needs for that money.

HAYES: So OK -- so we`ve got -- you -- you -- the -- the broad outlines here is continue those -- those what are called CSR payments, right, which have been up in the air? A stabilization fund for two years, a little bit of changes in what essential health benefits are. Basically in the broad scope of things, not major changes.

My question to you Governor Kasich is this, A, can you imagine republicans in the House and Senate voting for this? And B if that happened would it represent some final end to the era of implacable destroy Obama care politics?

KASICH: Well Chris there`s a couple of things here. First of all, every time you attach a name to something it raises hackles. OK, this is -- here`s what we`re trying to do. We want to stabilize the insurance market so millions of people don`t lose their coverage. It`s cratering right now. So these insurance companies are uncertain about what the situation is, they want to leave the marketplace. We can`t have that. So that`s number one.

But number two is to give states the ability, the power, the authority to redesign a program within certain guardrails. So, you don`t want to have people being stripped of coverage and you want to make sure that they have comprehensive coverage and there`s ways to achieve that.

So we got to get beyond the naming of all this. The fact is is that the exchange to let people to have more choice is a good thing. Stabilize it and then move to give states what they`ve been begging for, just having some guardrails there and then move again to make sure we reward quality payments and not just quantity payments, Chris.

So yes, I think if we can do that -- that` what John and I are trying to do. It`s reasonable. It meets all the philosophy of -- if you want to keep Obama care, keep it. If you want to change things and design something that fits your population in your state, you can, just within certain limits.

HAYES: All right, Governor John Kasich and Governor John HIckenlooper thank you both.

KASICH: Thank you.

HICKENLOOPER: You`re welcome.

HAYES: That is All In for this evening. The Rachel Maddow Show starts now with Joy Reid in for Rachel.


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