Brennan clearance revoked. TRANSCRIPT: 8/15/2018, All In w Chris Hayes.

Guests: John McLaughlin, Eric Swalwell, Elizabeth Holtzman

Show: ALL IN with CHRIS HAYES Date: August 15, 2018 Guest: John McLaughlin, Eric Swalwell, Elizabeth Holtzman

CHRIS MATTHEWS, MSNBC HOST: Well, today we witness a President calling his rival a dog. What`s happened to this country? And that`s HARDBALL for now, really is. Thanks for being with us. "ALL IN WITH CHRIS HAYES" starts right now.

(BEGIN VIDEO CLIP)

ALI VELSHI, MSNBC HOST: Tonight on ALL IN.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I`ve decided to revoke the security clearance of John Brennan, former Director of the Central Intelligence Agency.

VELSHI: The President retaliates against one of his detractors.

JOHN BRENNAN, FORMER DIRECTOR, CIA: Revoking my security clearances is his way of trying to get back at me.

VELSHI: Tonight, John Brennan responds.

BRENNAN: Is this an effort to try to cow individuals?

VELSHI: As the President`s enemies list grows.

SANDERS: I`m evaluating action with respect to the following individuals, James Clapper, James Comey --

VELSHI: More former officials

SANDERS: Michael Hayden, Sally Yates, Susan Rice, Andrew McCabe --

VELSHI: Threatened by the White House.

SANDERS: Peter Strzok, Lisa Page and Bruce Ohr.

VELSHI: What`s really going on here?

UNIDENTIFIED MALE: This really has the feel of someone simply trying to distract from another damaging political event that`s going on with Ms. Omarosa.

VELSHI: Plus, day 12 and the Manafort case heads to the jury.

UNIDENTIFIED MALE: Mr. Manafort was very happy with how things went today.

VELSHI: What it all could mean for the Mueller investigation.

RUDY GIULIANI, LAWYER OF DONALD TRUMP: Manafort hold trial nothing about Trump`s.

VELSHI: ALL IN starts right now.

GIULIANI: You don`t know anything about us.

(END VIDEO CLIP)

VELSHI: Good evening from New York I`m Ali Velshi in for Chris Hayes. As a jury prepares to deliberate on the fate of his former campaign chairman, a former White House aide threatens to release more secret tapes and the special counsel keeps closing in, the President of the United States appears to be trying to change the subject by using his office to retaliate against his political opponents. In an unprecedented step in the history of this country, the kind of move we associate with authoritarians and despots, the president today revoked the security clearance of former CIA Director John Brennan who served in that role under President Obama following a decades-long nonpartisan career in intelligence.

Now, a senior national security and intelligence analysts for an MSNBC and NBC News, Brennan has become one of the President`s most prominent critics tweeting at him just yesterday it`s astounding how often you failed to live up to minimum standards of decency, civility, and probity. Seems like you will never understand what it means to be president nor what it takes to be a good decent and honest person. So disheartening, so dangerous for our nation.

As CIA Director Brennan was also one of the first officials to blow the whistle on Russia`s interference in the 2016 election and later he entertained the real possibility of collusion with the Trump campaign.

(BEGIN VIDEO CLIP)

BRENNAN: I know what the Russians try to do. They try to suborn individuals and they try to get individuals including U.S. persons to act on their behalf either wittingly or unwittingly. And I was worried by a number of the contacts that the Russians had with U.S. persons and so therefore by the time I left office on January 20th, I had unresolved questions in my mind as to whether or not the Russians had been successful in getting U.S. persons involved in the campaign or not to work on their behalf. Frequently individuals who go along that treasonous path do not even realize they`re along that path until it gets to be a bit too late.

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VELSHI: Reading a statement from the President today, the White House Press Secretary laid out the rationale for stripping Brennan`s clearance threatening to do the same to a number of the President`s agonists.

(BEGIN VIDEO CLIP)

SANDERS: Any benefits that senior officials might glean from consultations with Mr. Brennan are now outweighed by the risks posed by his erratic conduct and behavior. Mr. Brennan has recently leveraged his status as a former high-ranking official with access to highly sensitive information to make a series of unfounded and outrageous allegations, wild outburst on the internet and television about this administration. As part of this review, I`m evaluating action with respect to the following individuals: James Clapper, James Comey, Michael Hayden, Sally Yates, Susan Rice, Andrew McCabe, Peter Strzok, Lisa Page, and Bruce Ohr.

(END VIDEO CLIP)

VELSHI: NBC News reports that the president`s own Director of National Intelligence Dan Coats was left out of the loop on today`s announcement as were other senior intelligence officials. Asked for evidence that Brennan has actually abused his security clearance, the White House declined to provide any.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Does the Administration have any reason to believe or evidence to suggest Brennan has misused classified information or monetized his access to it as was alleged earlier by this administration?

SANDERS: Again, I`ve laid out the reasons for the decision that was made on this specific instance. I will continue to review the other actions.

UNIDENTIFIED MALE: Is the reason by the absence of you not saying those things you didn`t find in the evidence bag?

SANDERS: No. I wouldn`t make any assumptions. I`m telling you what the decision was based off on in this case.

(END VIDEO CLIP)

VELSHI: In a phone call with MSNBC this afternoon, Brennan condemned the President`s action and vowed that he won`t be silenced. Here now an extended portion of Nicole Wallace`s exclusive interview with former CIA Director John Brennan.

(BEGIN VIDEOTAPE)

BRENNAN: I do believe that Mr. Trump decided to take this action as he`s done with others to try to intimidate and suppress any criticism of him or his administration and revoking my security clearances is his way of trying to get back at me. But I think I have tried to voice the concerns of millions of Americans about Mr. Trump`s failures in terms of facility responsibilities of that sacred and solemn office of the presidency.

And this is not going to deter me at all. I`m going to continue to speak out. But I am very worried about a message that it appears that Mr. Trump is trying to send to others and including those that currently hold security clearances within the government. I think he included Bruce Ohr a current Department of Justice official among those whose clearances he`s reviewing.

Is this an effort to try to cow individuals both inside and outside of the government to make sure that they don`t say anything that is critical at Mr. Trump or with which he disagrees. And I`ve seen this type of behavior and actions on the part of foreign tyrants and despots and autocrats for many, many years during my CIA and national security career. I never ever thought that I would see it here in the United States.

And so I do believe that all Americans really need to take stock of what is happening right now in our government and how abnormal and how irresponsible and how dangerous these actions are. So again if Mr. Trump believes that this is going to weave me to just go away and be quiet, he is very badly mistaken.

NICOLE WALLACE, MSNBC ANCHOR: Let me ask you an uncomfortable question. The President today described you -- your conduct as erratic. They said this is a retaliation for erratic conduct and behavior. He is trying to diminish your credibility. What do you know that you haven`t shared yet that he would want to take your credibility down a notch? You were highly regarded by Democrats and Republicans but it seems like as he`s done with Jim Comey, as he`s done with Robert Mueller, your credibility is something he sees as important to diminish. What do you know that he`s afraid of?

BRENNAN: Well, I think he is concerned about the criticisms that I`m voicing publicly. I think he hears those types of criticisms. I think he fears individuals who could damage him, damaged his standing on the American people. Look at the way he`s been referring to Bob Mueller. Bob Mueller who is a national treasure, an icon within the law enforcement and justice communities was doing his level best to investigate Russian interference in the election. And the denigration of Bob Mueller, as well as his team of investigators, is reprehensible. It really is.

BRENNAN: And so, I think when I speak out about some of his practices and his what I think are flawed policies -- now we can all have policy disagreements and differences, that could make this country great, but I must tell you that Mr. Trump`s dishonesty, his lack of integrity, his nastiness, his mean-spiritedness, the types of things that he has just tweeted out over past 72 hours, the terms that he uses this is not what I think of American presidents nor of America. We`re better than this. We have to be better than this. We have been a shining example to the world and Mr. Trump is letting this country down.

WALLACE: Do you -- do you believe he`s motivated by a desire to please someone other than the American public, and by that we`ve had a lot of conversations about his relationship with Vladimir Putin after Helsinki, even some of his closest allies and I understand even some members of the White House staff started to scratch their head and wonder if maybe there is something there. Do you think his conduct in office, the fact that he is almost to a -- an item to a to-do list carrying out Vladimir Putin`s wishes for the American democracy the divisions, the polarization, the pro- Russia policies and that and the disparagement of our longest closest and most trusted allies, do you think there`s something more going on than incompetence and debasing the office of the presidency?

BRENNAN: Well, he may very well have a guilty conscience about the types of things that he has done in the past. I don`t know. He is the one who has to account for those previous actions and whether or not those actions ran afoul of ethics and of the law. And I don`t know what he may be concerned about in terms of what might be divulged as part of this investigation or others, but as I have said repeatedly I find his attitude and behavior toward by the Putin and the Russians very, very puzzling and very, very irrational.

And so I don`t know what it is that is behind that but I think that`s why it`s critical it could be important that Bob Mueller and his team of investigators be allowed to continue their work unimpeded by Mr. Trump or anyone else the administration. It`s important that Rod Rosenstein stays in charge of that investigation from a Department of Justice oversight perspective.

But clearly I think Mr. Trump is getting more and more concerned, more and more desperate, I would say more and more frightened as there is closer and closer magnification of some of the things that those around him have been involved in, those who may have been concealing illegal activities as had been admitted by a number of individuals that were associated with the Trump campaign. So I do think it`s important that I can speak out.

I know some things that the Russians were involved in but I certainly don`t know all the things that Mr. Trump has been involved in over the years and I do not pretend to have that knowledge. He is the one but clearly, his actions are those of somebody who is seeking to prevent the full light of day being shone upon his past.

WALLACE: You`ve talked about a guilty conscience and you`ve talked about the importance of Robert Mueller being able to complete his work. You must know that Robert Mueller is perhaps the most frequent punching bag from this President in his Twitter feed. I wonder if you could you know, having some familiarity with how Bob Mueller runs an investigation and how he thinks about prosecutions and investigations, I wonder if you think that the president is at this point a target in the obstruction of justice investigation or the conspiracy investigation around collusion with Russia and if you think that that that`s a semantic game at this point if you think that it`s the fact that perhaps Mueller is adhering to Justice Department policy which says you can`t indict a sitting president, do you think but for that the president is a target of the obstruction investigation or the collusion investigation?

BRENNAN: I have no knowledge about what Bob Mueller and his team have uncovered and what they are pursuing but what I do know about Bob Mueller and those investigators is that they are exceptionally thorough, exceptionally meticulous, and will continue to look for any evidence of criminal wrongdoing whether that was to conspire with foreign governments against this country, whether it was to defraud this country as a result of financial transactions that were hidden or obstruction of justice.

And over the last year plus, when Bob Mueller has been involved in this effort and the previous year where the FBI was investigating the Russians appearance, I am confident that they have looked at all these different angles and I know that Bob Mueller is not going to give anyone a pass in terms of any type of criminal conduct that might have been uncovered.

So again, I have no knowledge about what the status of that investigation but I just know that the quality of Robert Mueller and his team is one that all Americans should be proud of and all Americans whether they support Trump or not should want this investigation to be brought to completion.

(END VIDEOTAPE)

VELSHI: For more reaction to the President`s unprecedented retaliation against the former CIA Director I`m joined by MSNBC Global Affairs Analyst John McLaughlin, former Deputy Director of the CIA and former Acting Director of the CIA. John, this afternoon you were kind enough to get on the phone with me when this news first broke to talk it through. Now that we`ve had a few hours to listen to it, you`ve heard John Brennan`s own words, what are your thoughts on what happened today?

JOHN MCLAUGHLIN, FORMER ACTING DIRECTOR, CIA: Well, you know I`ve thought a lot about it, Ali, since we had that first conversation and I can`t find any way to describe this as anything other than a transparent attempt to muzzle free speech. Actually, when I looked here at the 26-page executive directive that governs standards for classification for clearances and for revoking them there were 13 reasons in there for revoking a security clearance and not one of them matches anything close to the reasons given in the White House statement.

I don`t know that they`ve read this but it was signed out during President Trump`s Administration so he owns it. So I see it as nothing less than that a vindictive way to mete out punishment for something that the President has heard and does not like and then to use that as a way to intimidate others that he considered -- that he says he`s considering taking the same action.

VELSHI: But will it achieve that goal of intimidating others? The -- Sarah Huckabee Sanders listed names -- bunch of names, Michael Hayden, James Comey, Andrew McCabe, Susan Rice, Sally Yates. John Brennan doesn`t seem to be too moved by this whole thing. He`s offended by it, he`s troubled by it, but in the end, as a punitive measure is it going to backfire to the President and just make him look petty and punitive?

MCLAUGHLIN: I think it`s going to backfire on him. And frankly if it gets into an administrative or court proceeding, I`m not a lawyer but I`ve talked to a few since this afternoon, I don`t think it would hold up. I don`t think it would stand. There`s procedure for the President has the authority to do this but I think the gravest mistake, gravest error a president can make is to deny an American citizen their rights.

And this president in this kind of action is not behaving like the elected president of a vibrant democracy. It does have the feel of what an authoritarian tyrant does. And the White House is not very -- they`re not very clever about this. They`re very transparent when you listen to what they`ve said they have not given a reason that matches anything in the laws of regulation commensurate with what`s required to deny security clearances.

VELSHI: So let me ask you this because Senator Mark Warner has a more sinister view of this whole thing. This is what he said as it relates to today`s decision and the Mueller investigation. Let`s listen together.

(BEGIN VIDEO CLIP)

SEN. MARK WARNER (D), VIRGINIA: I worry whether this precedence is going to somehow lead to the President trying to take away Mueller and his whole team security clearances. This is clearly another effort to silence critics and not allow the Mueller investigation and for that matter our Senate Intelligence Committee investigation to get to the bottom of this.

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VELSHI: It`s an interesting take. What do you think of that John?

MCLAUGHLIN: Well, I wouldn`t rule it out. You know, this president has not lost the ability to astonish us every single day with something that we wouldn`t think of because it`s such improper behavior for a president so I wouldn`t rule that out. Although I think it may give them a little more credit than they deserve given that this directive was dated as someone pointed out today way back in July so clearly used today as a sort of an opportunity to put it out and probably to distract from the Omarosa affair and so forth.

But I wouldn`t rule out anything at this point from the President because I`ve sensed in the last week or two a kind of quickening panic on the part of the President and people around him about the way that walls are closing in and this has the feel of an act of desperation particularly when you see how transparent it is.

I mean, essentially it`s denying Mr. Brennan is his First Amendment rights, I think. But not denying his First Amendment rights -- let me -- I don`t think -- he still has his First Amendment rights, it`s just punishing him for exercising them and that`s an important point and I think that`s -- I don`t see how you can put any other construction on it because there`s not been a reasonable persuasive reason given by the White House for the action they`ve taken.

VELSHI: Careful John McLaughlin. That kind of talk would get you labeled erratic by the White House.

MCLAUGHLIN: I`ve been called worse, believe me.

VELSHI: Good to see you, sir. Thank you for joining me again twice today, John McLaughlin. For more on what the President did today and what he`s trying to accomplish I`m joined by MSNBC Political Analyst Ben Rhodes former Deputy National Security Adviser under President Obama, also someone who helped me out earlier today to make sense of this.

And Ben, at the time it was very hard to make sense of this. I asked you if in the Obama administration because you had enemies there too, there were people who criticized Barack Obama. Did you consider action like this at any point?

BEN RHODES, MSNBC POLITICAL ANALYST: Absolutely not. And look I sat across the hall from John Brennan for four years, we never would have politicized national security clearances in this way. It`s totally unprecedented in the history of our country to say we`re going to take this mechanism, the granting of national security clearances and use it to punish our political enemies. That is something you`d expect to see in the (INAUDIBLE) dictatorship not in the world`s greatest democracy.

VELSHI: In places where they rename the airports and the roads and all of that kind of stuff when there`s a change.

RHODES: What Trump would like, yes.

VELSHI: Senator Kennedy today of Louisiana mentioned something about the politicization of intelligence. I`d like you to listen to this with me and tell me your thoughts.

(BEGIN VIDEO CLIP)

SEN. JOHN KENNEDY (R), LOUISIANA: I`ve made my feelings known about Mr. Brennan. I think -- I think most Americans look at our national intelligence experts as being above politics. Mr. Brennan has demonstrated that that`s not the case. He`s been totally political. I think I called him a butthead and I mean it. I think he`s given the national intelligence community a bad name.

(END VIDEO CLIP)

VELSHI: Evaluate that for me Ben Rhodes. John Brennan is not currently serving as an intelligence official. Had he done that in the service of a president, I think we`d be having a different discussion. He`s a private citizen being critical of a president.

RHODES: I would be very clear about this. I was called into John Brennan`s office in 2011 and told that we had a beat on Bin Laden. John Brennan oversaw the operation out of the White House that killed Osama bin Laden. So for that member of the Senate to stand up and calm the but head is completely offensive. And frankly what has he done or what has Donald Trump done that is as consequential as leading the operation from the White House that took out Osama bin Laden.

VELSHI: I`m going to actually see if we`ve got that photo because you`ll see there he is John Brennan standing there on the right of that photo. That`s the famous photo of the night of the Osama bin Laden raid. You actually tweeted something interesting about this today. You said John Brennan was the point person in the Obama White House on the operation that killed Osama bin Laden. He knows a lot more about defending our nation than someone who uses security clearance to punish his political adversaries. There`s a deeper point here been that that this is a guy who you want to keep close to you. Even if he`s critical of the president, this is a guy who actually knows something about some of the biggest threats faced in this country right now.

RHODES: Yes. He served for decades, presidents of both parties. You know, it`s more about terrorism than just about anybody in this country which is a great threat to the American people you would want him as a resource. And let`s be very clear about what`s happening here. You asked about motivation. Donald Trump his associates are under investigation for potentially conspiring with a foreign adversary to undermine our democracy.

That investigation has already produced guilty pleas, their prosecution`s that are underway and that circle is closing around Donald Trump, his family members and his closest associates. So what he needs is villains. He needs to throw up villains to stir up his base to distract from what is happening to him and from what the real facts are.

John Brennan is a patriot and intelligence professional, somebody who served this country with honor for decades and we have a President in the Oval Office who`s being investigated for potentially having conspired with Russia and Vladimir Putin who he seems to have nothing but nice things to say about in order to essentially undermine our democracy. That`s the real story here and what Trump wants is it to be he said she said, John Brennan is a villain, Sally Yates as villain. No, there`s one person and one a group of people who were under investigation here for potential undermining our see and they`re the people in the White House it`s not John Brennan.

VELSHI: It`s not John Brennan, it`s not Mueller, it`s not James Comey. All right, Ben thanks very much for joining me twice again today, Ben Rhodes. All right still ahead the news the White House would rather everyone not talk about including the Manafort trial headed to the jury, Robert Mueller closing in and Omarosa wreaking havoc. And next Congressman Eric Swalwell on the implications and the timing of the President`s move against John Brennan right after this.

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BRENNAN: I get so upset when I hear Mr. Trump denigrate the work of national security and intelligence professionals when I know that they have a very, very challenging job and juggling their professional responsibilities along with the personal responsibilities. So this is I think a sad time.

(END VIDEO CLIP)

VELSHI: The former CIA Director John Brennan had his security clearance revoked today by a president he criticized.

(BEGIN VIDEO CLIP)

WARNER: To me, this had an eerie memory of an enemies list. These people were being singled out to have either the clearances revoked or in the process of being revoked to me smacks of Nixonian type practices of trying to silence anyone who`s willing to criticize this president. That puts us again in uncharted territory.

(END VIDEO CLIP)

VELSHI: Senator Warner isn`t the only one deeply concerned by the President`s actions today. I`m joined by another person in charge of overseeing the nation`s intelligence activities, Congressman Eric Swalwell, Democrat from California, Member of the House Intelligence Committee and Ranking Member of the CIA Subcommittee. Congressman, on one hand, I hear people who are saying this is petty, this is punitive, it`s distraction, it`s got more to do with Omarosa than anything else. The memo was dated July 26th and brought out today. It`s all weird but it`s kind of more scary than weird.

REP. ERIC SWALWELL (D-CA), HOUSE INTELLIGENCE COMMITTEE: Good evening, Ali. It`s certainly more scary than weird and it`s all of those things but worse and I think the big picture here it makes us less safe. The security clearance is not to benefit John Brennan, it`s not to benefit any of the other administration officials from the Obama administration it`s to benefit us so that as people like Gina Haspel the CIA Director or Mike Pompeo or General Mattis consider threats against the United States and actions they have to take today, they`re able to reach back and talk to people who have faced the same threats and able to get their candid advice. That`s why it`s in place.

And Ali, I called a former secretary from a prior administration and I told him, I said am I overreacting in my response to what the president is seeking to do and he said no he said I all the time would call on prior administration officials to get their advice so it makes us less safe that`s what`s most important.

VELSHI: And John McLaughlin made an interesting point a few minutes ago that -- and Ben Rhodes made the point that John Brennan was in the room. He was in on the decision to go after Osama bin Laden. He was there on the night of the raid. This is actually a guy in a world where terrorism is one of our greatest threats that you`d want to tap into.

SWALWELL: That`s right. And there`s a lot of people just like John Brennan who are speaking out against the President who now may make this enemies list. And that means for our national security that the list of advisers who can consult the administration for the greatest threats that we face will shrink to only include sycophants of the president. And again, that makes us less safe.

And as somebody who looks at these threats every day on the Intelligence Committee, Ali, I can tell you that there are a number of decisions that have to be made that include information that prior administration officials had access to and where we would want their input if it came to a life-or-death situation.

VELSHI: So you and I have had a similar conversation several times in which I`m trying to get to the bottom of the degree to which congressional oversight. You are our representatives. You are the voice of the people in the nation`s capital. The degree to which congressional oversight can play a role here because last month somebody asked Paul Ryan what he thought about the threat when this threat first came out about revoking clearances. Here`s what Paul Ryan had to say about it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The President has said that he wants to revoke security clearances from some former national security officials who still hold them and who have made political remarks. Is it dangerous to go down that road?

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE OF REPRESENTATIVES: I think he`s trolling people honestly.

(END VIDEO CLIP)

VELSHI: I bet before I get in trouble that wasn`t somebody, that was Casey who asked that question. But Congressman, you know, that`s what happens. Paul Ryan says he`s trolling. Don`t take it too seriously. It`s not really that big a deal and then it happens. And then we`re left wondering this is really a big deal.

SWALWELL: It is a big deal. It`s time for Paul Ryan to stand up to this President. And we`ve all been waiting for him to do that.

Also, Senator Corker when this was proposed by the president, he said this is something that would be done in Venezuela. And so now I ask Senator Corker and Senator Flake, other people who have honorably spoken out against the president what are you going to do actionwise to make sure that this type of behavior no longer continues?

Because we are slipping toward Banana Republican, and they have the power, we are not helpless, to stop that from happening.

VELSHI: Congressman, the official statement from the White House today said that Mr. Brennan has recently leveraged his status as a former high ranking official with access to highly sensitive information to make a series of unfounded and outrageous allegations, wild outbursts on the internet and television about this administration.

Wild outbursts, things about this administration, erratic, outrageous, this -- as you said, we are sliding toward a Banana Republic. This is the kind of stuff that you become accustomed to in dictatorships where new governments come in and cleanse the place of anybody who criticizes them.

SWALWELL: He is a private citizen now. He has the right to say it. And again, Ali, this clearance does not benefit former Director Brennan, it benefits our national security experts who may need to call on former director Brennan.

VELSHI: Congressman Eric Swalwell, always good to see you. Thank you for joining me tonight.

SWALWELL: My pleasure.

VELSHI: Still to come, the growing number of headaches the Trump administration tried to distract from with the announcement today, including the most recent: the Omarosa tapes. The new fallout from that next.

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VELSHI: Donald Trump revoking of the security clearance on one of his toughest critics has two immediate effects today. First, it served to punish John Brennan and put Trump`s other detractors on notice.

And second, it accomplished one of Trump`s specialties, it grabbed the headlines back from what has been an otherwise disastrous news week for this administration. Between Omarosa Manigault Newman`s book tour, the Mueller probe, and the trail of former Trump campaign chairman Paul Manafort.

Alas, we are wise to that sort of thing around here. Jennifer Rubin, MSNBC political analyst and Washington Post opinion writer joins me now as does Associated Press White House reporter Jonathan Lemire.

Jennifer, I have to say, at some point, we are just not all fools. We can cover the story of what Donald Trump did today. We can talk about the implications of it. But it doesn`t suddenly make us all forget about the fact that Omarosa has tapes, Mueller`s investigation continues, and Manafort`s trial is going to the jury tomorrow.

JENNIFER RUBIN, THE WASHINGTON POST: That`s exactly right. If we`ve learned anything from the Manafort trial, it is that facts matter. Things are going to happen in the world. They are not going go away simply because Donald Trump does another thing that is outrageous.

I will say this, however, I think he is making the predicament of Republicans even worse, because each time he does one of these things in advance to the midterms, he reminds people what spineless, unfit people these Republicans are. To hear John Kennedy, to hear other Republicans defend this move, is really shameful.

So, in essence, he`s not simply trying to detract for his benefits, he is also I think harming his own party`s chances, which he does just about every day.

I was surprised at Senator Kennedy`s responses to this. But Jonathan, Giuliani, in a series of interviews, one he did with Fox and one he did with Bloomberg, to Bloomberg he said about Mueller in the investigation, if he doesn`t get this done in the next two or three weeks, we will just unload on this like a ton of bricks. He added, write the damn report so we can see it and rebut it.

So, what tend to happen is these things tend to come in clumps, right. The administration starts to feel a little bit emboldened. Does a few things here and there to let the public or the Mueller investigation or whomever know we`re on the offensive.

JONATHAN LEMIRE, ASSOCIATED PRESS: And Giuliani is a great quote if nothing else.

That`s exactly right. The people in the White House right now, they see the escalation of the probe. And certainly the president himself, the reporting that we have done, suggests he is very anxious about two different things. He is watching the Paul Manafort trial, which though technically not about Russia he sees -- it is the special counsel, he feels like it is a warning shot toward him. He is worried about where that goes.

He is also concerned about the legal fortunes of some of the people very close to him, particularly his eldest son, Don Junior. He`s told people around him he fears that he could be next.

So we do see this, when they feel the pressure build, the White House tends to go on the offensive. Often, at least in recent months, that means Rudy Giuliani on the attack, or an attempt to change the conversation, which we saw today.

And it must be pointed out, the official letter put out by the White House about John Brennan`s security clearance being moved, is dated July 26. Today is August 15. So this was three weeks ago. The question is why drop it now if not to be some sort of distraction to change the story?

VELSHI: Right. So, Jennifer, it`s almost like like there is a filing cabinet or a closet or a bag of distractions at the White House which is kind of interesting because in the press briefing yesterday, Sarah Huckabee Sanders said nobody except the people in this room care about this Omarosa thing, but the president has tweeted about her endlessly this week.

So, if they`ve got a problem with the news cycle being in the wrong place, they need to look to the president.

RUBIN: Exactly.

And in point of fact, they actually really don`t have anything else to talk about. The economy is sort of baked into this election cycle. The president isn`t doing anything, frankly, between now and the end of the year, so all they do have to talk about are these things.

And I just want to pick up on something that John was saying, I think what is significant about the trial is I think the president correctly sees that in this case, a prosecutor armed with the facts up against a defendant who is simply screaming unfair is a formidable factor. I think he is seeing the handwriting on the wall.

It`s not simply that Paul Manafort is close to him, it`s that he is seeing what an actual case looks like when all of his theatrics, when all of his nonsense are completely ineffective, and you`re just there up against the facts, up against the documents. And I really do think he is intimidated.

I think, by the way, we should all stop listening to and taking direction from Rudy Giuliani. The notice that they`re going unload on him. What does that mean, like they haven`t unloaded on the special prosecutor beofre? This is the sort of piffle that he passes off as legal advice.

VELSHI: But at some point, Jonathan, we in the media have to figure out what we do when the president attempts to change the news cycle. I mean, I have all sorts of people say, well, why do you even cover his tweets? Because he tweets, that how this guy communicates, frustrating though it is that`s what he does.

We can probably expect more of the same over the coming few days. There might be more in that file of three-week letters or whatever memos that the president has got to distract us.

LEMIRE: Sure, it`s a challenge for every news organization. These tweets are presidential statements. They can`t just be ignored. Now, you can judge each one on their merit, whether...

VELSHI: Some of them are sort of nonsensical.

LEMIRE: Of course: "no collusion."

But, you know, you can do -- we have to make a decision what is news.

But what he -- this is what he does, he changes the subject. He goes on the attack. He plays to the base. And it`s not just this -- let`s remember, it was only 10 days or so ago before the Omarosa stuff, where he had those tweets out of nowhere about Lebron James. He watched that interview and he attacked the intelligence of I`d argue the second most prominent African-American man in the nation. And that in itself with coded language infuriated some people, probably delighted others, or at the very least you played to what they already thought about the president, and it just rolled off and 24 hours later we`re talking about something else.

That is what he does. The challenge for us is to make sure we keep it all in context and it`s very clear the Mueller probe as it advances on the West Wing is what hovers over the White House throughout. And that is what he is focused on, and we will be too.

VELSHI: Jennifer, there has been a sense with the tweets and the comments coming out of the White House this week that, you know, every week looks different from the one before but that there is a level of desperation setting in with them.

RUBIN: Yeah, I think they`re running out of arguments. You can only have Rudy Giuliani on television hollering nonsense so often. And then what do you do the next day?

So the problem is that their act does get stale. And they really don`t have either legal arguments or factual arguments.

So, in some sense, I also think, frankly, that this is the pressure he is feeling that he -- if you think about it, is most likely in the final months of a Republican congress. And when the congress, and I think the House almost inevitably flips now -- you have 60, 70 seats that are in play. They will have the subpoena, they will have oversight power, and his life is going to become a lot more complicated, a lot more difficult, so he he better enjoy this freebie when he gets it, because come January, I suspect life is going to be a little bit more difficult.

VELSHI: Jennifer Rubin, Jonathan Lemire, thanks both of you for your time tonight.

All right, coming up, jury deliberations are set to begin just hours from now in the trial of former campaign chair Paul Manafort. I`m going to talk to Julia Ainsley about what it all means for Manafort, for Trump, and for the nation next.

(COMMERCIAL BREAK)

VELSHI: While the president of the United States used his executive power to retaliate against a former CIA director who would dare to criticize him, the first trial in the era of special counsel Robert Mueller wrapping up with closing arguments on this day 12 of the trial of Paul Manafort.

In summing up his case against Trump`s former campaign manager, Paul Manafort, the lead prosecutor said, quote, "Mr. Manafort lied to keep more money when he had it and he lied to get more money when he didn`t. This is a case about lies," end quote.

But Manafort`s defense said the prosecution hadn`t done its job.

(BEGIN VIDEO CLIP)

KEVIN DOWNING, ATTORNEY FOR PAUL MANAFORT: Mr. Manafort was very happy about how things went today. His defense team got to address the jury, point out the shortcomings in the government`s case. And explain the government has not met their burden of proof.

(END VIDEO CLIP)

VELSHI: For the highlights of today`s closing arguments, I am joined by NBC News national security and justice reporter Julia Ainsley who was in the courtroom.

Julia, the defense`s closing argument was really its best, it`s last best chance. How did it go for them?

JULIA AINSLEY, NBC NEWS: Not quite as well as the prosecution did, Ali. They didn`t really seem to have a succinct theme. They were kind of picking and choosing around the edges here. One of the things they said that might have stuck if the judge hadn`t instructed the jury to ignore it was the argument that we would only be in this courtroom, it were only in the courtroom because of the special counsel, that the government had choices it could have audited Mr. Manafort, that banks could have complained, that they had been lied to, his tax preparer could have picked up the phone, none of those people chose to report it, because they didn`t think it was a problem. We are only listening to this case, because of the special counsel.

That argument, though, is not something that the jury is supposed to consider, because the judge, and this is a judge who has not been kind to the prosecution, as you know, actually said that you shouldn`t think about the Justice Department`s motivations here, and just because someone has not been the subject of an audit does not preclude them from becoming part of a federal criminal investigation.

So, he laid that out in his lengthy jury instructions today. And of course a predicted piece of go after Rick Gates. They wants to paint him as someone who had his fingerprints all over everything. At one point Kevin Downing, who you saw just there, told the jury, look, did you find it surprising that Rick Gates could name off all but two of the 31 foreign bank accounts run by Paul Manafort and by Davis Manafort partners? It`s obvious he had his hands all over this.

But I felt the prosecution had a good rebuttal to that where they said, well, wouldn`t it just be so lucky? We should all be so lucky as to have someone who would set up foreign bank accounts so we could benefit from as well as Paul Manafort did, and that got a little chuckle.

So I think the prosecution really laid out a good case here. I think at best for the defense, there could be one or two counts where there are some hold out jurors who don`t think that it meets the legal bar. But in whole I think the prosecution really hit home when they said the star witness in this case is the documents. If you don`t want believe anything Rick Gates says, just look at the documents they corroborate what they said. And this is really a case about documents.

VELSHI: This judge, as you mentioned to me before, tries to get everybody home for dinner, so he didn`t allow deliberations to start to tonight. Is that the first thing that happens in the morning?

AINSLEY: Yes, that`ll start at 9:30 tomorrow morning. You know, it`s not perfect for either side that they made their closing arguments (AUDIO GAP)

(COMMERCIAL BREAK)

VELSHI: We`ve got some breaking news tonight. The Washington Post reporting just a short time ago Trump`s lawyers say they`ve nearly completed a memo opposing a potential subpeona from Robert Mueller for Donald Trump to answer questions about possible obstruction of justice.

And, they say, they are prepared to fight their case all the way to the Supreme Court.

The news follows closing arguments today in the trial of Paul Manafort, Trump`s former campaign chairman. Regardless of the outcome of that trial, Trump`s lawyer Rudy Guiliani is demanding that Mueller end his investigation soon, telling Bloomberg, quote, "if he doesn`t get it done within the next few weeks we will just unload on him like a ton of bricks."

Guiliani is pointing to an informal Justice Department policy against employees taking actions, quote, to interfere with or affect the result of an election.

(BEGIN VIDEO CLIP)

GIULIANI: We are running into a real big problem for them. If they try to drag this thing much into September, you have a got very clear violation of the Justice Department policy not to interfere with elections.

(END VIDEO CLIP)

VELSHI: It looks like, brace yourselves for this, by the way, Guiliani is wrong. Current and former U.S. officials tell Bloomberg that Mueller can continue his inquiries, and even issue new indictments up to and after November 6 without violating policy.

While many legal analysts expect a guilty verdict in the Manafort trial, the question remains about what would this mean for the Mueller investigation? Are they farther ahead as a result. Will Manafort tell the feds something they want to know once he`s staring a long jail sentence in the face.

Former Democratic congresswoman Elizabeth Holtzman of New York, who helped draft the rules that formalize the appointment of what was then known as a special prosecutor, and who voted to impeach President Nixon as a member of the House judiciary committee joins me.

Also with me, NBC News National Security contributor Frank Figluzzi, former assistant director for counter intelligence at the FBI.

OK, both of you, thank you for being here.

Frank, let me just start with you, Rudy Giuliani somehow manages to convince people he wasn`t really a good prosecutor when he says nonsense like this. That informal Justice Department rule is not actually about somebody investigating serious crimes, it`s about people fiddling in an election.

FRANK FIGLUZZI, FORMER ASSISTANT DIRECTOR FBI: It`s about -- that`s exactly right. Nor, by the way, is there any hard and fast documented regulation that would be violated. There`s a guideline. There`s a suggestion. There`s an unwritten understand that you don`t mess with an election by starting an investigation or by announcing something during an election period, but there`s nothing here to be violated.

VELSHI: Elizabeth, let`s talk about what happens tomorrow, maybe as early as tomorrow. Maybe we get a verdict in this trial. Let`s say, as some expects say, that it`s guilty.

So now Paul Manafort has a conviction. What does the government do at that point? What does the Mueller investigation do with that, because they can`t unconvict him at that point as part of any deal they make with him?

ELIZABETH HOLTZMAN, FORMER CONGRESSWOMAN, NEW YORK: Well, he`s facing another trial. So, they can try to work something out with him. But the point is Manafort has held out all this time. Why has he done that? I personally think it`s because he`s waiting for a pardon from the president.

So, I think he is just going to -- I think likely he`ll be convicted, but in any case he has another trial.

So, what Mueller has in terms of leverage over Manafort is a huge number of years for a conviction in the Virginia case and then a huge number of years for a conviction in the D.C. case.

Is Manafort going to break? He`s 69 years old. Does he want to spend the rest off his life in prison? I think he`s enjoyed life outside prison too much.

VELSHI: Apparently. We learned that in the last few weeks.

HOLTZMAN: Very much. I mean, he`s not going to get any more ostrich...

VELSHI: Yeah, jackets.

HOLTZMAN: ...jackets, but he`s going to -- I think he likes being out of prison. Most people do.

So, I think the government has a huge amount of leverage of him. And he`s got very important things to tell the government.

Right now we have an issue as to whether Donald Trump knew beforehand that the Trump Tower meeting was going to take place and did he approve it?

VELSHI: Right. And Manafort would know that information, because he was in that meeting.

HOLTZMAN: Correct.

So, Manafort is key.

Richard Gates is key.

So, Manafort has a lot to tell about that and there may be other issues with respect to the Russians and there may be other things that he knows.

So, Mueller needs him. Mueller is putting together his case brick by brick by brick and is very methodical and very careful and the noose is tightening.

VELSHI: So, Frank, listening to Elizabeth -- there are a lot of people who say, hey, Manafort is convicted -- Guiliani said it tonight, Trump`s name was not mentioned. It had nothing to do with Trump. This is nothing to do with Trump. I`ve heard this from people. But Elizabeth is saying is taht if Manafort is convicted this make the Mueller case stronger.

FIGLUZZI: Yeah, so, look, a verdict in the Manafort case is not an all or nothing equation for the special counsel, but it`s absolutely important. And it`s important for at least three reasons. First, as you already discussed, is the possibility that Manafort at some time, even post conviction, could indeed flip. He could have enough of the baloney sandwiches and the protein loaf in prison and decide I`ve had enought. I`ve seen it happen many times. And he could get a sentence reduction for significant cooperation.

Secondly, Gates -- so to the extent that the Manafort case used Gates as a key witness, Gates still is important for the next Manafort trial, which is about being a foreign agent. And I think Gates has volumes to say about that, so if we lose the first trial, if the special counsel gets an equittal, it weakens Gates as a credible witness.

And then third is the public perception issue. A loss in the Manafort case will be a drumbeat for the president, and Giuliani, and others to say there is nothing here. They can`t put a case together. And that all important public perception is about what impeachment becomes and proceedings and articles of impeachment.

So, an essential verdict for the special counsel.

VELSHI: Is there any -- Rudy Guiliani continues to have deadlines for Robert Mueller and talk about what they`re going to do and how they`re going to fight it to the Supreme Court. Do you think any of this has any influence on Robert Mueller whatsoever?

HOLTZMAN: Not at all. In fact, I think he has got a little checklist of every time Guiliani says something like -- gives him a threat, like we are going to come down on you unless you listen to us. You can`t tell a prosecutor how to handle a case. You can`t tell a prosecutor to cut short his investigation. We don`t know what Mueller is looking at. Maybe he has another 32 Russians ou there to indict.

Guiliani wants him to cut that investigation short. Mueller has got a little list of these things and they could be all obstruction of justice.

VELSHI: Frank, what`s the decision tree for Mueller as of tomorrow? Obviously, they don`t have any information that anybody isn`t going to have. We are going to hear the jury and their verdict all at once. But what`s he thinking? If there is a conviction tomorrow, what`s the next step?

FIGLUZZI: So, I think he becomes emboldened and makes a move on this interview -- potential interview with the president. I think we will see that after -- if there is a conviction in the Manafort case. We will see a strong move towards demanding an interview, or even heading toward a grand jury subpoena of the president. And that`s headed right to the Supreme Court.

VELSHI: I was going to say, Liz, that is going to get messy. There is no way the president is just going to say, sure, let`s sit down, when and where?

HOLTZMAN: Well, and by the way, who would then be interfering with an election? The president could short circuit that by complying with the subpoena. Of course, he`s not going to do that, because I don`t think he`s -- I think he`s too afraid and too much of a coward ever to appear before Mueller.

VELSHI: That would get us to a place in the Supreme Court that we haven`t seen before. It`s been tested. We`ve seen it with Nixon. We`ve seen it with Clinton, but it`s never gone to the idea of an actual sit-down subpoena.

HOLTZMAN: Yeah, but the theory is still the same. We have a criminal justice system. The president is not above the law. If he has got critical information then he has to give it. And it`s not that much of an interference.

VELSHI: Frank, how do you see -- as you said it goes straight to the Supreme Court. How do you see this playing out in the short term, though, because we`re 80 some odd days to a midterm election. This obviously would become central to that election.

FIGLUZZI: Yeah, it is going to be front and center, and boy is this -- we are in for an ugly time.

But trying to get inside Mueller`s head and his team`s head, what I`ve come up with is, look, they would be remiss and extremely criticized if they just acquiesced to a denial of interview by the president. They`re going to have to push this. And they need to do it, win or lose, they`re probably going to move ahead and try to get a subpoena if he says no.

VELSHI: How does that look. They insist, so they ask first.

HOLTZMAN: Well, they`ve been asking for how many months? Eight months already.

VELSHI: So, now it`s a subpoena. He`s got subpoenas in hand. He actually subpoenas the president? Is that how it works?

HOLTZMAN: Yes. And then the president will say, no, I can`t be subpoenaed. I`m the president of the United States. You can`t dear subject me to the process of the court, I`m above everything.

VELSHI: Yeah, they will base it on executive privilege?

HOLTZMAN: I don`t know what he`s going to base it on. Who knows what arguments he -- I don`t want to predict what kind of arguments will come out of his mouth or Guiliani`s mouth, or whatever, but will the Supreme Court even take it? Who knows? Maybe they will rely on precedence here.

VELSHI: Frank?

FIGLUZZI: What could be interesting is he could assert a Fifth Amendment right of self-incriminating, and that, of course, would say, look, I`m guilty and I can`t talk about it.

VELSHI: That would be interesting. But the issue is going to be jurisdiction, whether -- the president is going to argue that he can`t be caused to sit down. In Nixon`s case they argued that the court doesn`t have that jurisdiction, the court overruled that.

HOLTZMAN: The court says, you have a subpoena from a grand jury. That takes precedence over a president`s arguments about national security or executive privilege. We have a criminal justice system that has to function in this country and that`s first.

VELSHI: Liz Holtzman, thanks for joining us tonight. Frank Figluzzi, always great to see you. Thank you both for being with me tonight.

That`s it for ALL IN this evening. "THE RACHEL MADDOW SHOW" starts now.

END

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