EPA's Scott Pruitt engulfed in scandal. TRANSCRIPT: 04/03/2018. All In with Chris Hayes

Guests: Frank Figliuzzi, Barbara McQuade, Ben Wittes, Zerlina Maxwell, Nick Confessore

Show: ALL IN with CHRIS HAYES Date: April 3, 2018 Guest: Frank Figliuzzi, Barbara McQuade, Ben Wittes, Zerlina Maxwell, Nick Confessore

CHRIS MATTHEWS, MSNBC HOST: That's HARDBALL for now. Thanks for being with us. I'll be back in Washington tomorrow night. "ALL IN" with Chris Hayes starts right now.

(BEGIN VIDEO CLIP)

CHRIS HAYES, MSNBC HOST: Tonight on ALL IN.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I've always found Paul Manafort to be a very decent man.

HAYES: A bombshell from Robert Mueller confirming he is investigating Trump's Campaign Chair for collusion crimes.

PAUL MANAFORT, CAMPAIGN CHAIRMAN, TRUMP CAMPAIGN: That's what he said, that's what I said, that's obviously what our position is.

HAYES: As the first person heads to jail in the Russia probe, we'll look at who could be next.

TRUMP: Only time will tell.

HAYES: Plus, the latest on a shooting at Youtube's headquarters and the slew of stories engulfing Trump's EPA chief in scandal.

UNIDENTIFIED MALE: Scott Pruitt, sir, do you support Scott Pruitt?

TRUMP: I hope he's going to be great.

HAYES: Tonight Democrats and Republicans calling for Pruitt to be fired.

UNIDENTIFIED MALE: There's a change coming, and there's a change coming --

HAYES: When ALL IN starts right now.

(END VIDEO CLIP)

HAYES: Good evening from New York, I'm Chris Hayes. One of the most infamous members of Donald Trump's cabinet, the one living in a lobbyist's house in Washington, D.C., EPA Head Scott Pruitt now appears to be hanging on to his job by his finger nails after a swirl of negative stories all increasing the perception the Trump administration as a whole is an ethical mess. According to Politico, the White House has been actively considering firing Pruitt behind the scenes possibly following the release of an Inspector General's investigation into Pruitt's lavish travel which we've covered here but which for the record is not even the scandal of the moment.

Because this morning, the White House claimed that Pruitt is still in the President's good graces. An administration official telling NBC News Trump called Pruitt last night to tell him to keep his head up and keep fighting and that the administration has his back. Of course, a supportive call from Trump isn't worth much. Last week Trump called now fired V.A. head David Shulkin for a friendly chat on the very day that Shulkin got the ax.

(BEGIN VIDEO CLIP)

DAVID SHULKIN, SECRETARY, VETERANS AFFAIRS: He was very inquisitive about the things that we were working on making sure that we were focused on the job at hand.

HAYES: Wait, that's before you were fired?

SHULKIN: That's correct.

HAYES: You spoke to him. He made no mention of the fact he was about to terminate you?

SHULKIN: That's correct.

(END VIDEO CLIP)

HAYES: At a photo op today Trump was well, non-committal when asked about Pruitt's status.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is Scott Pruitt staying. Is Scott Pruitt staying?

TRUMP: Thank you.

UNIDENTIFIED MALE: Scott Pruitt, sir, do you support Scott Pruit, sir?

TRUMP: Thank you all very much. Thank you.

UNIDENTIFIED MALE: Scott Pruitt, sir, do you support Scott Pruitt?

TRUMP: I hope he's going to be great.

(END VIDEO CLIP)

HAYES: I hope he's going to be great. Meanwhile, the calls for Pruitt to go are growing. Today two Republican members of Congress Carlos Curbelo and Ileana Ros-Lehtinen said Pruitt needed to be removed. And all this comes as the stench of the scandal around the administrator just keeps getting worse. Last week, of course, we learned that Pruitt got a sweetheart deal to live in this Capitol Hill condo with his adult daughter for low, low price of 50 bucks a night and crucially he only had to pay that when he actually slept there. So who would give him such a ridiculous deal? Well, the condo just happens to be co-owned by the wife of a top energy lobbyist, someone very interested in the goings on at Pruitt's EPA.

Now, the EPA rushed out a defense of the arrangement as perfectly ethical which was already an absurd position even before an avalanche of new revelations that makes the whole thing look even more corrupt. For instance, we know Pruitt's lobbyist landlord also funded his Oklahoma Attorney General campaign, even hosted a fund-raiser for Pruitt and that the condo served as a hub for Republican lawmakers hoping to raise money for their congressional campaigns while Pruitt was living there. So you've got the head of the EPA, right? The largest environmental watchdog in the whole government getting a sweetheart deal from a lobbyist with whom he has a long relationship to live in a condo that doubles as a hub for Republican fundraisers? It doesn't get much swampier than that.

Oh, but there's more. While the EPA vehemently denies any quid pro quo arrangement involving the condo, the New York Times reporting that last year the EPA signed off on a pipeline expansion plan from a Canadian called Enbridge even though the Obama administration had previously moved to fine Enbridge, that same company $61 million in connection with the 2010 pipeline episode that sent hundreds of thousands of gallons of crude oil into the Kalamazoo River in Michigan and other waterways. And can you guess who Enbridge was paying to lobby the government? None other than the same energy lobbyist whose wife co-owned the condo where Scott Pruitt was staying.

I'm joined now by the author of that Times piece, New York Times Investigative Reporter Eric Lipton along with MSNBC Political Analyst Sam Stein, Politics Editor from The Daily Beast who broke the news about the GOP fundraisers at the condo. Eric, let me start with you and your reporting. You guys took a look and what you find are places that were being represented by this lobbyist in question had business before the EPA during this very time.

ERIC LIPTON, INVESTIGATIVE REPORTER, NEW YORK TIMES: We found nearly half a dozen cases where there were companies that were represented by Williams and Jensen, Oklahoma Gas and Electric and oil and gas -- another oil and gas company from Texas, Colonial Pipeline and Enbridge that had matters pending before the EPA. ExxonMobil is another company represented by them that you know, that the EPA was considering regulatory matters at the same time that Pruitt was living in a condo owned by the -- owned by the wife of the chairman of that firm. And so, what we don't know that Pruitt was asked explicitly to do anything or that the agency did anything on those -- on those clients' behalf, it creates a question as to you know, how much was the process compromised in any of those decisions. That -- you know, even if we don't know that there was a quid pro quo, him living in that unit at the same time as his agency had matters before that are related to their clients undermines the integrity of that process in a way is not helpful for the agency.

HAYES: I mean, this is why frankly if had he gone through a proactive ethics review before he took the lease, no one would have signed off on it because whether you get market rate or not market rate or whatever, like just avoid that. Go live somewhere else. Don't live in the condo of an energy lobbyist, Sam, and not just any condo, right? I mean, you guys had great reporting on what exactly was going on there.

SAM STEIN, MSNBC POLITICAL ANALYST: Well, where else can you get a $50 a night rental? You know, you can't -- some deals are too good to pass up, Chris. No, obviously -- you know, it's almost refreshing this is such a classic corruption scandal. It's not unlike the usual Trump scandals which aren't sort of the traditional Washington scandals. This one we have the guy who was the chief environmental watchdog staying at a condo that was dubbed by the people on Capitol Hill as the Williams and Jensen's condo. Williams and Jensen is the firm of Steven Hart and Vicki Hart is the wife who owned the place. And basically, this is not a place where people traditionally live. It's a hangout, it's a hub and it's close to Capitol Hill and members of Congress and Senators would go down the street a few blocks and they would host fund-raisers there. And so what we discovered at The Daily Beast yesterday was at least four members of Congress had held fund-raisers at this exact address during the exact time that Scott Pruitt was living there.

HAYES: What's key to me about this is you know, having covered D.C. for a while, Sam, and was there at the same time you were for a while, you know, access is so much, right? You've got -- you've got like a five-minute pitch about some regulatory issue or some pet amendment of the omnibus and you want five minutes of the EPA administrator's time and lo and behold he comes home from work to the building where you're there for a fund-raiser like that matters.

STEIN: Yes, it's funny. People you know, people look at lobbying registration and rightfully so because lobbyists are chiefly responsible for pitching legislation or political agendas. But truly, what it comes down to is access. And that's why a lot of what we think of as lobbying is done by people who aren't registered as lobbyist because they don't put most of their time into actual the form of act of lobbying. In this case, having the guy who runs the EPA in your house as you are raising money for a member of Congress is effectively the same thing as being able to lobby the guy.

HAYES: Eric, there was -- there was a memo that was put out by the Deputy General Counsel of EPA who I should say is a career attorney, Kevin Minoli I believe his name is essentially saying this is fine, it passes ethical muster (AUDIO GAP) essentially on the day the story broke. What's your reaction to that?

LIPTON: Yes, I mean, it was actually the day after the story broke. So I mean, retroactive ethics you know, is sort of like what does that mean? I mean, you don't retroactively deem that a lease from 2017 in March of 2018 was kosher when it isn't an apparent that they actually had done such a review at the time that the lease was considered and that he was actually living there. He has not live there for quite a while so he's no longer a tenant that have condo. And so -- I mean, that is inexcusable to think there was not such a document that existed at the time that the lease was entered into that evaluated it. To do it retroactively after the ABC breaks the story really undermines you know, any suggestion that this was an arm's length kind of evaluation of the appropriateness of him being there and that the market rate. It looks like something they threw together in a day to try to defend what he had already done and looked really bad.

HAYES: And I should note that the author of that is the Deputy General Counsel Kevin Minoli who is a career person. I think he's been there 12 years. It was striking to me he put his name to that memo because he now owns that as a kind of independent career judgment about the ethical probity there and one wonders under what circumstances that was written given the way that the arrangement obviously flies in the face of sort of common sense. You've also got a story, Sam, in the Daily Beast that the Scott Pruitt lied to Congress about using private e-mail -- have I ever heard of that before -- using private e-mail to talk to big oil as Oklahoma Attorney General. What's up there?

STEIN: Yes, this is -- it all comes back to e-mails I suppose. In this case, they're looking into whether he actually lied to lawmakers about his use of private e-mail and it just adds to what is a litany of corruption and ethically dubious behavior that is plaguing Scott Pruitt. I mean, we have the expenditures on things like a soundproof phone booth, we have revelations that he traveled first class in that his own staff entertained the idea of leasing a private jet which in any prior administration would have been a firing offense. And I'm struck by this because you referenced David Shulkin in your interview with him last night. David Shulkin was axed ostensibly for far less than this, why is Scott Pruitt sticking on. And the only real explanation right now is that Scott Pruitt is doing a more effective job of carrying forth the Trump agenda. While this is all happening, we are now talking about what was a major EPA announcement that happened today which is the ending of the fuel emissions standards for cars that was put in place under the Obama administration's EPA. That is being done even as Scott Pruitt is being dogged by all these revelations.

HAYES: It's a really point to talk about that precise issue with our next guest and also good point that these ethical lapses so far are orders of magnitude greater than David Shulkin. We'll see what the I.G. says. And I have a funny feeling we're going to hear some more things coming out. Eric Lipton and Sam Stein, great reporting both of you. Thank you.

STEIN: Thanks, Chris.

HAYES: All right, with me now Congressman Ted Lieu, a Democratic of California who sent a letter today to request the EPA's Inspector General investigate Pruitt's sweetheart condo deal. And Congressman, what you do - - what do you make of this news?

REP. TED LIEU (D), CALIFORNIA: Thank you, Chris, for that question. Let me first say that what Scott Pruitt did is part of a pattern of corruption in the Trump cabinet. We've seen Ben Carson order a $31,000 dining table, Ryan Zinke spent $139,000 on office doors and Treasury Secretary Mnuchin spent over a million dollars of taxpayers money to fly military jets that he did not need. But what Pruitt did goes a whole another level. He received a personal monetary benefit from the lobbyists and that's the reason that Don Beyer and I wrote this I.G. investigation letter because now it affects the credibility of EPA decisions over any issues that Williams and Jensen lobbies on.

HAYES: Two Republican members of Congress, both from Florida, both I would say, people who have political reasons, Ros-Lehtinen is retiring and Curbelo is in a district I believe Hillary Clinton won or at least with close political reasons to be concern about this. Do you think we'll see more calls from Republicans for him tore fired or resign?

LIEU: I do because Scott Pruitt conduct is indefensible. So we're learning in addition to getting this below market rate lease on his condo, he also used one of his staff members to go look for housing and then by the way, gave that person a massive raise by using the safe drinking water act which I think is probably the only environmental law Scott Pruitt might actually like to bypass the White House which was not going to give that person a raise. This is just not acceptable conduct by the EPA administrator.

HAYES: Yes, this is the person that went to go find him housing, and then when he succeeded in doing that, he then got a raise using a provision in the clean water act that allowed the bonus to go through without the -- without the White House signing off, right.

LIEU: Correct.

HAYES: So here's my question though substantively, right? I mean, you heard Sam Stein say look, he's still there because he's doing the President's agenda. Huge announcement today having to do with your state. They are -- they are wanting to yank back fuel efficiency standards and want to go after California which sets a higher standard and other states. So the sort of state's right argument out the window. They want to yank California back from its current fuel emission standards. What do you think of that?

LIEU: It is a decision that is going to take us backwards. States like California and others have shown us the future and that's where the world is heading. And when oil prices start to rise again as they inevitably will, foreign automakers are going to eat our lunch if our domestic automakers cannot deal with these new standards.

HAYES: We have been there before. Everyone remembers 2008 when the 0gas prices spiked that summer absolutely decimated big auto here in the U.S. which then got crunched by the financial crisis. It also strikes me that fuel efficiency standard are kind of a win-win. I mean, consumers pay less money for gas, the air is cleaner and healthier, bigger carbon reductions in terms of climate change, like, what's not to like?

LIEU: It also creates additional jobs. And you have lots of people working in the clean energy industry. This is where the world is heading. Coal is not coming back. Really fuel inefficient cars are not coming back. And to sort of put this out there when consumers are not even demanding it is really taking us a step backwards. That's something the Trump administration should not do. And by the way, Republican who's oppose climate change and want to get rid of efficiency standards, they're a dime a dozen. The President doesn't need Scott Pruitt to do this. He can stick any Republican in there to do the same thing.

HAYES: Please find a less corrupt climate denier says Congressman Ted Lieu to the President, many thanks. Next, breaking news in the Russia investigation. Robert Mueller has reportedly told Trump's lawyer the President remains under investigation. More on that new story in two minutes.

(COMMERCIAL BREAK)

HAYES: All right, we've got breaking news tonight in the Mueller investigation. Literally just a few minutes ago, the Washington Post reporting the Special Counsel told the President's attorney last month that Trump is still under investigation but is not currently a criminal target. This comes as Mueller sheds new light on his case against the President's former Campaign Chairman Paul Manafort. Documents filed late last night revealing for the very first time that Deputy Attorney General Rod Rosenstein specifically signed off on two areas of investigation, the payments Manafort received for his work in Ukraine which are already the subject of a 32-count indictment and crucially potential collusion with Russian government officials to interfere in the 2016 election. Jennifer Rodgers and Renato Marriott are both former U.S. Attorneys. We also have Robert Costa from I believe from the Washington Post on the phone. Bob, are you there?

ROBERT COSTA, MSNBC POLITICAL ANALYST: I'm here, Chris.

HAYES: Fill me in on this story you just broke.

COSTA: So Carol Leonnig and I at the Washington Post just broke a big story that we've been working on for a week which is an update on the Mueller investigation. And we know based on our reporting that Bob Mueller has personally informed President Trump's attorneys that he is -- he remains under investigation, he is not a criminal target at this point. He's the subject of the investigation. And that means he still wants to have an interview with the President. So there's negotiations that are on- going whether the president will sit down and he's by no means in the clear but he's not about to get charges either according to Mueller.

HAYES: That's according to your sources who have learned about this communication from Mueller to the President's attorneys. Is that correct?

COSTA: Correct. That is correct.

HAYES: And this is in the context of negotiating the terms under which the President gives testimony to Robert Mueller's investigators and they're saying that he is the subjects of an investigation but not a criminal target?

COSTA: That's right. But that, of course, could change if the President stumbled in an interview. And it is clear in our reporting that Bob Mueller at this moment based on our reporting and our sourcing is working on a report about potential obstruction of justice by President Trump looking at President Trump's conduct in office, looking at things like the firing of former FBI Director James Comey. He is going to prepare a report in the coming weeks perhaps likely by June or July that's going to look at what did the President do while he was in office, was it obstruction of justice or not and he wants to understand the President's intent. What was the President's intent? Was it criminal or not. He says for now, the President is not under criminal investigation at all but he wants to figure out the intent. That's why there's a big disagreement in the President's circles about whether to do this interview or not.

HAYES: The disagreement in the President's circle is whether to agree to a specific set of terms or whether to do it at all?

COSTA: There's a real disagreement because you had President Trump's top attorney John Dowd decide to quit the legal team. He's someone who's pushing the President not to do the interview. There are other people in the White House who are urging the President to do the interview to try to close up the investigation.

HAYES: So I'm a little unclear just because it doesn't seem like they have recourse get out of it, right?

COSTA: At this point, the President because he's just a subject of the investigation, he is not compelled, it's not a subpoena to come sit down. But Mueller is trying to signal to come talk to us --

HAYES: I see.

COSTA: But he's not saying at the same time you're totally in the clear. So it's a complicated legal challenge for the President. But Mueller is saying you're not just -- you can't just walk away from us right now. You have to sit down. But he's trying to do it in a cooperative way.

HAYES: That's interesting. OK, Robert Costa of the Washington Post with that story breaking that news about the President's attorneys being informed by Robert Mueller that the President of the United States is subject of his investigation but currently not a criminal target in the context negotiation about the President giving an interview to his investigators. Robert Costa at the Washington Post, thank you that. Thank you for breaking that story. And I want to bring in Jennifer Rodgers and Renato Marriotti, who as I said earlier, both former Federal Prosecutors. This is the turn of our subject first, criminal target. Break it down, Jennifer, what's the difference?

JENNIFER RODGERS, FORMER FEDERAL PROSECUTOR: Well, a subject is someone who is of interest and who you want to speak to but isn't yet someone who you have criminal evidence against who you're about to charge basically. So I'm not surprised to hear that the President isn't a target on the collusion side of the house. I am a little bit surprised if the Special Counsel was so clear as to say he's not a target of my obstruction investigation. I feel like --

HAYES: Who could obstruct?

RODGERS: Exactly. He is really the only target of that investigation and even if the special counsel doesn't feel like he has enough evidence yet, it still seems to me that that's the direction that they're heading into the extent they continue to investigate this. So that surprises me a little bit and makes me wonder whether he was more careful about you know, which investigation he was -- he was talking about. But you know, I don't know. I mean, as you pointed out earlier, they were just talking about an interview at this point. So technically they're answering the question about a subpoena that's been issued but Mueller is a stand-up guy. I mean, he's not going to try to mislead them about where he's going here.

HAYES: What's your reaction, Renato?

RENATO MARIOTTI, FORMER FEDERAL PROSECUTOR: You know, I have a slightly different view of it, Chris. A target under the U.S. Attorney's manual, the guidelines that federal prosecutors use is somebody who the prosecutor views as what's called a punitive defendant. In other words, someone that the prosecutor currently intends to charge, somebody who is a subject is somebody whose conduct is within the investigation. So you know, a lot of the criminal defense attorneys say on the federal side that a non-target letter isn't worth the paper that it's printed on because the prosecutor can just decide two days after he writes the letter that he wants to -- now he made up his mind to charge you. I think what this means you know --

HAYES: Wait, wait, stop right there. I want to make sure I understand this because you also did defense work in federal courts and other places. So you're saying like getting a letter saying like you're subject but not a criminal target. You should talk to us, that from a defense attorney standpoint it's like what -- that's not -- no one's writing that in stone.

MARIOTTI: I mean, that doesn't mean anything really. I mean, it's very little to me. Now that I'm on the other side and I'm representing people who are subjects of criminal investigations, that would not give me much comfort at all. All it means is that the investigation hasn't wrapped up yet because a prosecutor is not going to make those final decisions about whether to indict or not until they've collected all the evidence and interviewed everyone. But you know, so what this tells me -- what this would tell me as a -- as a criminal -- the federal criminal defense attorney and a former federal prosecutor is that my client is his conduct is under investigation but they haven't made up their minds yet about an indictment. And that doesn't mean he's out of the woods yet at all.

HAYES: I want to read from the Washington Post piece which sort of (INAUDIBLE) of that. Other advisers noted the subjects of investigations could easy by become indicted targets and expressed concerns the special prosecutor was baiting the Trump in an interview (INAUDIBLE) and create a legal peril. It seems like there's twos dynamics here that I still don't feel like I have a really great grasp of. One is like what Mueller is doing. What the subject of the negotiation is and then the kind of psychodrama on the Trump team side about like whether we do it or not. With that latter question, this feels like an emanation of that, right? Like we're finding out about this because there's still having this fight.

RODGERS: Yes, I mean, you know, look they're all trying to decide what he should do and if he goes in, there is a pretty decent likelihood that he will get into the legal trouble because we know he's you know, the kind of witness who will exaggerate and make things up or hide things or what have you. You know, on the other hand, I think Mueller would be hard pressed to try to charge him with obstruction based on evidence that doesn't include anything from that interview if he's now basically said he's not a target at my investigation as of now. I mean, I understand Renato's point is that --

HAYES: I see what you're saying that should he interview the President and not get information in that interview would be hard to then go back and charge him with something or issue a report recommending that.

RODGERS: That's my view. And you know, look, I think they want some assurances. They're not going to get the assurances they want because as you said, I mean, if he gives them anything in the interview, you know, the game is up and he switches over to a target. But you know, obviously, they're just -- they're just trying to get what they can now, they're trying get these assurances before he walks in there.

HAYES: Also, Renato, what is the -- what's the timeline here? Like I feel like we've been covering the story now for weeks and weeks and weeks. Maybe six weeks or so, or something in that, you know, Mueller obviously wants to talk to the President. His lawyers going back and forth and John Dowd leaves, like at a certain point, something's going to happen, right?

MARIOTTI: Well, certainly, this decision as to whether to sit for interviews is a really important one. And I will tell you as a lawyer in this area, knowing what I -- knowing even as little as I know about what's happening, I'm sure the President's team knows more, I would never let President Trump sit for this interview. I think they would be crazy to do it. The only reason to do it would be political reasons. And I think they're really weighing the political costs. And what Mueller is probably trying to do here is send him a signal that hey, the risk is manageable here. It's worth taking the risk so that this way they'll sit for the interview because that's in his interests. I think, you know, prosecutors always want to interview everyone as a subject of an investigation if they're willing to sit for an interview. Usually, there's a dance and the person on the other side wants to take the Fifth. And that's really the question that Trump needs to decide here, is he going to ultimately take the Fifth or not.

HAYES: All right, that's clarifying because -- right, there's no other way. Like you either take the Fifth or you go to court to fight it because you have some sort of presidential superpower that says you can't be brought before a subpoena. There's no other option other than that. Jennifer Rodgers and Renato Mariotti, thank you both. All right, we have much more on this breaking story as well as a number of other things happening in the Mueller investigation front including the first person to be sentenced in connection to the Mueller probe. All of that is next.

(COMMERCIAL BREAK)

HAYES: Dutch lawyer Alex Vanderzwan was sentenced today to 30 days in prison and a $20,000 fine, the first person to receive jail-time as a result of the special counsel's Russia probe. Now, Vanderzwan pleaded guilty to a single count of lying to investigators about his contacts with Rick Gates, a former Trump campaign official and business partner to Paul Manafort and a Ukrainian associate identified only as person a whom the FBI believes to be a Russian intelligence operative.

Vanderswan is one of many characters at the fringe of the Russia story who look more important as time goes by. And we've got our expert panel here to break down this and other developments in the investigation. Barbara Mcquade, a former federal prosecutor and MSNBC justice analyst; Frank Figliuzzi, former assistant FBI director for counterintelligence and an MSNBC national security analyst; and Benjamin Wittes is editor-in-chief of the Law Fair blog and also an MSNBC legal analyst.

Let me start with you, Frank, on the Vanderzwan sentencing and then I want to move to this Manafort filing. What do you interpret as the reason to hammer this guy? In the way that Mueller did?

FRANK FIGLIUZZI, FORMER ASSISTANT FBI DIRECTOR: So an even bigger story than the 30-day prison sentence, which to most people would seem like small potatoes for lying to Mueller's team, is what Vanderzwan lied about. And that's the message that Mueller is sending. If you're lying about pertinent information here? Vanderzwan lied about conversations between Rick Gates, the deputy campaign manager, and this person a, believed to be a Russian intelligence operative, with connections right up to the campaign to the Russian intelligence services. That's a big deal. You can't lie about that because that's what Mueller's investigating is Russian intelligence, Russian government connections to the campaign.

And that's what the message is tonight: you lie to me about my investigation of Russian collusion, you go to prison.

HAYES: Yeah. And we should say that that person, who we believe is Konstantin Kilimnik is trained in the GRU and of course was Manafort's kind of deputy in Ukraine. He's the person who received that infamous email saying, hey, has this Russian oligarch, Oleg Deripaska, who I owe a lot money to, has he seen the news that I'm on the Trump campaign? Can we use this to get made whole?

Let's talk now about Paul Manafort, about the person who sent that email, Barbara. There was this part of the filing yesterday that was fascinating to me. And it was unredacted. And it was the Mueller team saying here's why it's OK for us to bring this prosecution in the scope of our -- what we're allowed to do as a special counsel. Basically saying, look, we are not investigating him because people have made allegations that he was involved in the collusion. What do you make of that?

BARBARA MCQUADE, FORMER FEDERAL PROSECUTOR: Yeah, it's very interesting. I think to date, you know, certainly because of the public filing and charges, we were all aware that Paul Manafort was charged with these financial crimes, with acting as an agent of Ukraine without registering, but there was a specific mission from Rod Rosenstein to also investigate collusion with Russia. And so I think that's something new. I suppose many of us could speculate that that investigation has gone on, but it makes me wonder the status of that investigation is? Has there been some indictment that's filed under seal.

And I think the other fascinating piece of that document, that memo that sets out in greater detail what Rod Rosenstein tasked Robert Mueller to do is there's almost an entire page of the document that's been redacted. So he listed a number of different things that he was tasking Robert Mueller with investigating we don't know yet. And so as much as what we know in that document is fascinating, I think what we don't know is even more fascinating.

HAYES: Ben, what was your reaction to that document.

BEN WITTES, MSNBC LEGAL ANSLYST: Well, so I agree very much that it's interesting any shedding light on the collusion component of the Manafort probe, which has not been what we've focused on to date. I also think, frankly, it was a clever bit of lawyering by Mueller to get that specific letter from Rosenstein early on.

HAYES: Right.

WITTES: That lays it out in much more detail than was in his general public appointment letter. And that really inoculates him now from the suggestion that Manafort has made in this motion that he is straying beyond the mandate that he was given.

And he gets to turn around and say no, no, back at the beginning, here's the letter that Rod Rosenstein gave me and here's what it says I'm entitled to do. And so I think it's actually an important document in publicly clarifying his authority.

HAYES: It's a great point, right. It's like sort of the showing of receipts, which was a real James Comey special during the entire time that he and the president were going back and forth. Like, no, I actually have the document from last summer that says yes, go look into this.

Frank, can we talk about what the news that just broke, to sort of come back around obviously, because the president sits at the top of this. It was his campaign that's being investigated. Paul Manafort worked for him. Rick Gates worked for him. He is the one who sat atop the enterprise that is the subject of a criminal investigation. The news that Mueller communicated that he is subject to that investigation, but not a criminal target in the context of discussions about getting him to talk to them. What do you make of it?

FIGLIUZZI: So here's how to read this. It's not that oh, thank goodness if you're in the White House the president's not a criminal target. It's oh, my, the president is a subject of this investigation. That's how I look at this. And everything else is lawyering with regard to trying to give some comfort level to the White House that hey, hey, we're negotiating with you for an interview. No problems. We want to sit down with you. You're not a criminal target yet, Mr. President.

But as been said previously on your show, you're a day away from that. You don't it's only as good as the paper it's been written on. So, he's the subject of an investigation. He's not yet a criminal target. He could be tonight, tomorrow or whenever Mueller chooses to say he's got the evidence.

HAYES: And you're nodding your -- yeah.

WITTES: The most important element of that story is not the distinction between subject and target. The most important element of that story is the disclosure that the special counsel is preparing a report on the president's conduct and wants an interview so as to assess his state of mind at the time that he did certain things. And that's a reflection of the fact that the primary vulnerability on the part of the president is not a vulnerability to criminal charges right now, it's a vulnerability to impeachment. And so the relevant, the most relevant issue is not the distinction between being a target and being a subject, it's between being the subject of a report that is presumably either going to be made public or sent to congress or sent to somewhere. And not, right?

And I think that's the stunning fact in that Washington Post story.

HAYES: You know, Barbara, it also occurs to me, this is somewhat uncharted territory. I mean, obviously there was Archibald Cox and there was Nixon. But, you know, if you had a normal non-presidential person who you're dealing with, you know, you might charge them, you might not. It's unclear whether you can charge the president of the United States. So, we'll see a memo saying you can. It's unclear whether that still stands or whether can be contested. But how do you navigate this if you're Mueller?

MCQUADE: Well, I think one of the things that Robert Mueller was directed to do at the beginning was to comply with all policies of the Department of Justice just as if he were any other U.S. attorney. And so I think because of that, it is likely that he will comply with that OLC memo. And as you said we don't know how the Supreme Court would decide this.

But I think he is likely to comply with that directed memo that does give the opinion that a sitting president cannot be indicted and instead the only remedy is impeachment.

So, it is my guess, as Ben has said, that what might likely happen is a report that goes to congress for them to decide whether they think impeachment is appropriate.

HAYES: Well, it's a fascinating thing to contemplate now that we know a report is being written according to reporting that just broke just a few minutes ago that Ben was referencing earlier, the idea that the output of it all, vis-a-vis the president has a report that says, here, we believe you did this. Take away congress.

And the question of where that would go is going to be a very fascinating one if that's exactly how it turns out.

Barbara McQuade, Frank Figliuzzi, and Ben Wittes, great to have you all.

Still to come, the president continues to use his position to settle his personal vendettas, escalating his attacks against Amazon. I'll explain ahead.

Plus, tonight's Thing One, Thing Two starts next.

(COMMERCIAL BREAK)

HAYES: Thing One tonight, President Trump has been stewing in anti-Amazon rage in recent days, tweeting up a storm about how he thinks the retailer is hurting the U.S. Post Office.

Take a look at his latest tweet on the subject from just this morning, "I am right about Amazon costing the United States Post Office massive amounts of money for being their capital D delivery capital B boy."

"Amazon should pay these costs plus and not have them borne by the American taxpayer."

Now, first of all, of course, the United States Post Office is Amazon's, quote, delivery boy. It is literally their job to deliver items to people, it's not because they're like new on the job and low on the totem pole. It's what they do.

Secondly, Amazon is getting a deal on shipping costs from the post office, but the Postal Service makes money on the deal, badly needed money for an agency that has been losing billions of dollars a year for the last decade.

Now, if Amazon gets their drone delivery service off the ground, then President Trump could really start worrying about the Post Office. Amazon has been working on Prime Air since 2016, which would deliver packages to customers in 30 minutes or less, and unfortunately the Postal Service drone race with the Russians has already begun. And that's Thing Two in 60 seconds.

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HAYES: Russia debuted its first delivery drone today, a $20,000 hexicopter. That looks pretty dope, actually, emblazoned with the Russian Post logo, meant to carry a small package from one village to another.

(inaudible) held a ceremony to mark the drone's maiden voyage, the crowd gazing up in awe at the future of Russian package delivery.

Oh, man. Well, I hope that package wasn't fragile. The drone only made it several seconds in the air before losing control and crashing into a residential building with speed falling to the ground in pieces. Thankfully, no one was injured. The building wasn't damaged. And officials said more than 100 wi-fi connections in the area it could have disrupted the flight, or it could have been Russian meddling.

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(BEGIN VIDEO CLIP)

ANDRE CAMPBELL, SPOKESPERSON SAN FRANCISCO GENERAL HOSPITAL TRAUMA SURGEON: Once again, we are confronted with the specter of mass casualty situation here in the city and county of San Francisco where we now have three victims who have come in that we've taken care of. This is unfortunate, and it continues. You think that after we've seen Las Vegas, Parkland, the Pulse nightclub shooting that we would see an end to there, but we have not.

(END VIDEO CLIP)

HAYES: Less than seven weeks ago, the horrific shooting in Parkland, Florida focused the nation on the tens of thousands of gun deaths every year in this country, something for which there is no corollary in any other nation as rich of ours.

And today, news broke of another shooting, this time San Bruno, California campus of YouTube. Employees were evacuated with their hands up, familiar scenes we've time and time again. People tweeted about being barricaded inside with coworkers and seeing blood on the floor, which we have seen time and time again.

Three people are now being treated for gunshot related injuries. The suspected shooter, a woman in her 30s, is dead. Police think she killed herself.

Senior law enforcement officials tell NBC News, they don't believe there was any terrorism connection. The shooting was related to a domestic dispute, instead.

This was, thankfully, not another Parkland, but is still yet another episode of gun violence in America, what has become, what is a daily occurrence across the nation day after day leading to more than 10,000 firearms homicides every year. This was not another Parkland, but it is nonetheless exactly what the students from Parkland are talking about, the daily bloodshed that has simply no counterpart in any similarly wealthy nation.

And it wasn't just the Parkland students calling attention to the simple brutal fact about America, but thousands upon thousands upon thousands of people all across the country, people who filled the streets just a week- and-a-half ago marching to put a stop to gun violence.

Gun violence is a kind of American exceptionalism that cannot end soon enough.

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(BEGIN VIDEO CLIP)

TRUMP: You take a look at the Post Office, and the Post Office is losing balls of dollars and the taxpayers are paying for that money, because it delivers packages for Amazon at a very below cost and that's not fair to the United States, it's not fair to our taxpayers.

(END VIDEO CLIP)

HAYES: Basically, all of that is untrue, like just every little detail. President Trump is factually wrong about the Post Office losing billions because of Amazon packages. As we told you earlier, the postal service makes -- says it makes money on the deal. In fact, as Politifact notes, in 2006 Postal Accountability Enhancement Act, which by the way is a bad piece of legislation, made it illegal for USPS to price parcel delivery below its cost.

Trump, however, continues to repeat the false claim over and over again, using his position to bully and threaten Amazon, which he also falsely calls the, quote, Amazon Washington Post.

The president's behavior draws from the kind of playbook we've seen around the world. It's very common from autocrats like Turkey's Erdogan, Russia's Putin, et cetera.

MSNBC political analyst Nick Confessore is a reporter for the New York Times and MSNBC political analyst Zerlina Maxwell, senior director of progressive programming for Sirus/XM.

I wanted to have you on, Nick, because I wanted to ask you about what the Republican donor class thinks of this.

Like, you have done a lot of great reporting about money in politics for years and I just think about like your average rich Republican donor in any other context this would be a nightmare. They would be screaming about how Hugo Chavez in Venezuela with the president attacking a private citizen whose got a successful business, because he doesn't like the fact they own a newspaper.

NICK CONFESSORE, NEW YORK TIMES: I spent six years hearing donors on the right talk about how he can't pick the winners and losers in the economy, we have to have a neutral government policy. And now there is a president who taking their money, who talks down stocks of companies he doesn't like, and attacks individual companies in a very specific way and often makes up things about them.

This thing with Amazon is classic Trump trope, right. He says we're being screwed by this party. We're being -- it's a bad deal, and it's not true.

HAYES: Right. And then, you know, again, everyone has to go around saying like, well, here is the actual context of the deal, but there's also -- it's like it's one thing when he goes after private companies, which again, I feel mixed about that like I think it's OK sometimes for a president to do that, but this is specifically an attack on the free press, like it is about the fact that the guy owns a newspaper that reports things he doesn't like.

ZERLINA MAXWELL, SIRIUS/XM: Right, he's using the bully pulpit to bully a private citizen, essentially, because Jeff Bezos owns the Washington Post, not Amazon. And so he's attacking the company when he's really mad at an individual person.

Beyond that, though, I think it's actually a dangerous precedent to set for the president of the United States to attack a person in this particular way just because he doesn't like what the newspaper is reporting.

HAYES: Yeah.

MAXWELL: And I also think that the president, you know, he's lying in that clip, of course, but also, I think it's important for us to understand the president, you know, when he's attacking people in this particular way and lying about it, that has a dangerous precedent in that the consequences of the lies are what can actually be real in real life, right?

HAYES: Well, there are millions of people who now think that's true.

MAXWELL: Amazon loses money because he's lying about what the company is actually doing and how they have a relationship with the USPS.

HAYES: Plus, in this case -- you know, sometimes what people talk about, like he's all talk, which is true, often, you know, like he's like -- Jess Sessions, you should...

MAXWELL: He'sl flailing about.

HAYES: He's just like -- he's like the guy at the bar. But in this case, it's like the talk is the act. You know, Jonathan Chait I thought had a good point of this. He said survival of vital source of independent reporting, now hangs upon a billionaire's willingness to sustain financial loses over a matter of principal -- no offense to Bezos or other capitalists -- but the moral conscience of a billionaire is a precarious branch upon which to fasten something so weighty as the freedom of the press.

CONFESSORE: John is right and The Washington Post is a great paper and doing great work, but there is no substitute for readers supporting a publication.

I think it's really important and helpful to the cause of a free press.

But the president, though, is doing -- he is talking down his opponents. He's now talking, as well, behind the scenes, about preventing Amazon from getting a Pentagon cloud computing contract.

So, this is not about a policy issue, this is personal peak expressed as talking down a stock.

HAYES: What do you think of the idea -- I've seen this, because Amazon, there are a lot of problems with Amazon. There are all kinds of things they are doing to the economy that are very significant and problematic from a labor perspective, from a monopoly perspective. I've seen some people on the left and liberals being like, well, he's sort of got a point about Amazon.

MAXWELL: Well, I think that the agencies that regulate those issues will be independent and not be led by the president off to investigate or overregulate this industry.

The other piece of this, too, and I've been thinking about this all day. I think he's actually mentioning the taxpayer issue, because of the corruption in his own cabinet. Often, he uses the same language that is in pieces that are negative.

HAYES: Yep.

MAXWELL: About him in attacking his opponents. And so I think it's interesting that he's using the idea that it's a waste of taxpayer money in attacking Amazon because his cabinet is buying expensive dining room tables and private phone booths and taking first class flights.

CONFESSORE: And so it's also -- it's very important to understand the president comes from a culture in which the owners of newspapers actually use them as political instruments. He thinks that Bazos uses The Washington Post the way his friend David Pecker used the National Enquirer over the years to buy stories and shut tome down. He sees the media as owned by its owners. He's not used to have a paper that does what it's supposed to do.

HAYES: Slash he's thinking about like if I, Donald Trump, own a newspaper I, of course, would use it entirely as a vessel to pursue my political projects and attack my enemies and he's projecting that outward.

Nick Confessore and Zerlina Maxwell, that was great. Thank you.

That is All In for this evening. The Rachel Maddow Show starts right now. Good evening, Rachel.

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

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