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Flynn delays Michael Flynn sentence. TRANSCRIPT: 12/18/2018, All In w. Chris Hayes.

Guests: Harry Litman, Michael Isikoff

Show: ALL IN with CHRIS HAYES Date: December 18, 2018 Guest: Harry Litman, Michael Isikoff

CHRIS MATTHEWS, MSNBC HOST: -- is the party of the working people who`s leader speak loudly and unashamedly for the needs of the people they represent. You can no doubt add to this list yourselves. The key country and the resistance to Trump is to have that list because we may need it sooner than we think. And that`s HARDBALL for now. "ALL IN" with Chris Hayes starts right now.



AMERICAN CROWD: Lock him up! Lock him up! Lock him up!

HAYES: A funny thing happened on the way to the plea agreement.


HAYES: As Michael Flynn sentencing gets dramatic --

UNIDENTIFIED FEMALE: Judge Sullivan telling Flynn "you sold your country out."

HAYES: Tonight, what we learned about what Flynn did with former CIA Director John Brennan.

UNIDENTIFIED MALE: What about the inquiry as to whether he committed treason?

HAYES: And why it`s bad news for the President.

UNIDENTIFIED MALE: The President has minimized what General Flynn has done after a judge saying he commit treason.

HAYES: Then, Russian Roulette Author Michael Isikoff on why the President was tweeting favorably about Michael Isikoff. Plus, the Trump Foundation shuts down following a "shocking pattern of illegality." And it was the image that captured the attention of a nation.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: First of all, the tear gas is a very minor form of the tear gas --

HAYES: A congresswoman who just helped this family make it into America join me live.

UNIDENTIFIED FEMALE: Your boss is our committee.

HAYES: When ALL IN starts right now.


HAYES: Good evening from New York, I`m Chris Hayes. Michael Flynn`s sentencing hearing was supposed to be a routine procedure today in a D.C. federal court. It was not. And it leaves a lot of questions that should be unnerving to say the least to the White House. It`s been just over a year since Flynn pleaded guilty to making false statements to FBI agents.

The Special Counsels team said in a recent filing that he has been very cooperative and as such recommended he served no jail time. But in their sentencing filing, Flynn`s own lawyers seem to suggest that he`d actually been duped by the FBI. An accusation that Trump T.V. and the president both ran with.


SEAN HANNITY, HOST, FOX NEWS CHANNEL: This might be part of the worst part of Flynn`s political persecution. The agents interviewing Flynn, they never thought he lied. That is such a miscarriage of justice and an abuse of power corruption scandal. One of the biggest in American history.

UNIDENTIFIED MALE: I would not be surprised a bit that the conviction of Flynn is overturned because of the Justice Department and the FBI is misconduct.

RUDY GIULIANI, LAWYER OF DONALD TRUMP: I am disgusted with tactics they have used in this case. What they did to General Flynn should result in discipline. They`re the ones who are violating the law.

JEANINE PIRRO, HOST, FOX NEWS CHANNEL: Judge Sullivan can throw out this guilty plea if he concludes the FBI intentionally interfered with their target Flynn`s constitutional right to counsel.


HAYES: But today when the hearing began, it was clear that Judge Emmet Sullivan was more concerned with Flynn than he was with the FBI. When he had Flynn before him, the judge wanted to make sure himself that Flynn was not a believer in the alleged FBI wrongdoing.

The court: do you wish to challenge the circumstances on which you were interviewed by the FBI? The defendant: no your honor. The court: at the time of your January 24th, 2017 interview with the FBI, were you not aware that lying to FBI investigators was a federal crime? Defendant: I was not -- I was aware. The court: if you want to proceed because you`re guilty of this offence, I will finally accept your plea. The defendant: I would like to proceed your honor. The court: all right, because you`re guilty of this offence? The defendant: yes, your honor.

Judge Sullivan and then laid into Michael Flynn. Remember, this is a guy the judge who has read all the redacted filings. He knows everything Flynn is implicated in. "So all along your unregistered agent of a foreign country while serving is the National Security Advisor to the President of the United States? I mean arguably that undermines everything this flag over here stands for. Arguably you sold your country out. The court is going to consider all that. I cannot assure you that if you proceed today you will not receive a sentence of incarceration but I have to also tell you that at some point if and when the government says you`ve concluded with your cooperation, you could be incarcerated.

Judge Sullivan then followed asking the prosecution whether Flynn could have been charged with treason. He also zeroed in on the strangeness of Flynn appearing to be atop the conspiracy to work for Turkey under the table that he`s not facing time for. The judge then adjourns for a brief recess. When everyone comes back, corrects himself that Flynn apparently was not acting as a foreign agent while actually in the White House. Also he clarified he was just curious as to whether or not Flynn could have been charged with treason.

That said, Michael Flynn and his lawyers clearly spooked requested a 90-day postponement. Then this afternoon after Flynn made it clear under oath that he did not believe he was wronged by the FBI, White House press secretary Sarah Sanders said this.


UNIDENTIFIED MALE: Sarah, I was in the courthouse the last hour we the Judge Emmet Sullivan basically said that he was disgusted by Michael Flynn`s crimes. He said that he had disdain for Flynn, that Flynn said that he knew that it was illegal to lie to the FBI and he was ready to accept responsibility. This was all before agreeing to a delay in his sentencing. Given that, are you in a position now, or would you like to revisit your comments earlier today, that the FBI ambushed Flynn here?

SANDERS: No. We still firmly believe -- look, the things that may have taken place, again, that`s for the judge to make that determination, whether he engaged in something inappropriate. What we do know that was inappropriate, by own self-admittance of James Comey, is that the FBI broke standard protocol in the way that they came in and ambushed General Flynn.


HAYES: Joining me now, former Federal Prosecutor in the Southern District of New York and our MSNBC Legal Analyst Mimi Rocah and Harry Litman who served as both Deputy Assistant Attorney General at DOJ and the U.S. Attorney for the Western District of Pennsylvania. What a wild scene in that courtroom today. I mean, just give me your impressions of how abnormal was that in terms of its departure from the script people thought they were going into?

MIMI ROCAH, MSNBC LEGAL ANALYST: Well, it is abnormal, but I also want to sort of push back on this idea that seems to be out there a little bit of this rogue judge. Because frankly, I think that today was a really good day for the justice system and that this judge really did his job, right?

As a former prosecutor, I can empathize a little bit that the prosecutors might have been frustrated today because they went in there with a plan and it didn`t go according to plan. I`m sure Flynn and his lawyers very frustrated we can talk about why. But the judge has a job. And his job is to independently evaluate everything what the government wants, what the defense wants, and everything that he is seeing which is much more than what we`re seeing.

And I can understand how based on all of that even not knowing all the details, he said this is too serious. This -- you have betrayed your country. And you know, he wasn`t prepared to give him no jail time.

HAYES: So then what -- so he says I`m not going to prepare to give you no jail time. Then he -- so recesses. He says, like look this is serious. I know you guys have come together and the prosecution says no jail time and you don`t want any jail time, but this is serious what you did. He recesses, then he comes back and gets -- do you want to consider postponement and the idea is you`re not completely done cooperating. Is the inducement they`re Harry that if you get all the way through and you give them everything maybe, you still have no jail time at the end of it?

HARRY LITMAN, FORMER DEPUTY ASSISTANT ATTORNEY GENERAL, DOJ: Well that`s certainly the inducement. I actually think he is pretty much done cooperating. There had been four different postponements. Mueller asserted his memo. He`s substantially done cooperating. But I think what he was saying is, would you like to take a deep breath and come back another day when this is all sort of been put behind you and they were very quick to accept it. Also, after the post --

HAYES: Sorry, just -- behind you, meaning, this kind of playing both sides stun traitor lawyers tried to pull.

LITMAN: Precisely. And that -- and the lawyers tried to pull is exactly what in fact -- they fell on their sword after. They were very quick to say this wasn`t Flynn`s idea it was ours. It was basically stupid which it clearly was. And they had tried to kind of harness the talking points that Trump and others had used. Sullivan does have a reputation for sometimes being tough this way on the government.

They thought maybe we can -- maybe we can get a little bit of this action and they got the breasts back pitch they never expected.

HAYES: Right. Yes, I mean this is the President today tweeting good luck today in court General Michael Flynn. We`ll be interesting to see what he has to say despite tremendous pressure being put on him about Russian collusion in our great and obviously highly successful political campaign. There was no capital C collusion.

ROCAH: Well, I think he was hoping Flynn would go in there and say something about you know, the corrupt FBI. I mean --

HAYES: There was a whole right wing conspiracy theory that this whole thing -- that everything was going to fall apart today.

ROACH: And again it shows that when -- you know, the Trump people do not do well in the courts of law when you`re dealing with facts and evidence and you can`t just put a stain on things. And look, you know, should people look at what the FBI did, people have done that. But what the judge did is focus on Flynn. This is about Flynn`s conduct and you can`t have it both ways. And I think cutting through these conspiracy theories is what we keep seeing happen in courts and that`s heartening.

HAYES: You know, Julian Sanchez made this point, who was a right I admire on this case who said basically you know, Flynn is broke. He`s put his house up for sale. He`s got huge legal fees. He`s hoping to fundraise off the Trump based while cooperating against the president. And in some ways the natural logic of that ended up with what we saw in court which was essentially trying to have it both ways.

LITMAN: That`s exactly right. And of course it has to do with this confluence of the political side and the legal side.

HAYES: Exactly.

LITMAN: When you go to court, now the law -- you know, now a judge actually determines but in fact there are these broader political overtones. And what was going on today, I think a big part of why Trump was touting this. Who are the two people at issue, Stroszek and McCabe?

HAYES: Right.

LITMAN: This is another way for Trump to have tried to make the point that it was all a witch hunt --

HAYES: From the FBI.

LITMAN: Yes. And I think a real effect of today`s brushback is the weakening of that point. That along with the sort of emergence in the last ten days of real evidence, facts having to do with the President I think as make -- is deflating this --

HAYES: Counter conspiracy theory.

LITMAN: Absolutely.

HAYES: You know, what do you think -- it was interesting the judge zeroed in on the thing that Rachel was talking about last night in her A-block in which a lot of people noted which is you know, you`ve got these other indictments in the Eastern District for this unregistered foreign agent thing where it`s a half a million dollars from Turkey to basically like flip around 11 days before. He`s like Erdogan, and 11 days later like, Erdogan is great, right?

And the judge basis is how is it that they`re up for so much time and you`re not even pleading to that. Like he`s sort of ask the prosecutors could he have been charged for that. They`re like yes. So like, could he faced a lot of time? Yes. He seemed to think that was a little weird. What did you think about that?

ROCAH: Look, I think that it`s part of Mueller strategy. It`s clearly been part of his strategy in getting cooperators in this case. And you know, Trump likes to say well, they get cooperators by pressuring them and getting them to lie. Actually, no. They got cooperators by apparently giving them pretty big deals.

HAYES: Right.

ROCAH: Because Flynn could have been charged with this and this is shocking conduct. I mean, there`s other shocking conduct but this really - - he really did betray his country within the first you know, weeks of being in the White House and or being part of the administration. And I think that you know, what it shows is that -- is that that he`s getting credit for that. And that means that he`s probably giving really good information.

HAYES: Well, that`s the other thing, right? I mean, everyone`s watching this thing thinking this judge has read all the redacted portions and also the indication being you must be telling them a lot if he`s going to get -- he`s going to escape on that.

LITMAN: That`s exactly right. And so it`s not that the zero to six months. From the start, when they brought him in, and remember he was the guy -- he was the exemplary cooperator cooperated from the start made -- which makes other people come forward. He got to walk on this on the -- on the fair charge. I`m really -- he was running a rogue foreign policy of great gravity you know, from within the transition office. And that`s pretty serious stuff. And remember this is the exact investigation that Trump importunes Comey to --

HAYES: Yes. It`s all about this. There is a lot there.

LITMAN: There is a lot of grist for the mill here.

HAYES: Yes. Mimi Rocah and Harry Litman, thank you both. Joining me now for more on today`s Flynn hearing is John Brennan former CIA Director. He`s now an NBC News Senior National Security and Intelligence Analyst.

What did you -- what do you think about the idea that has been put forward by Flynn`s lawyers and then kind of recanted today that Mr. Flynn was tricked, duped by the FBI agents that came to the White House?

JOHN BRENNAN, NBC NEWS SENIOR NATIONAL SECURITY AND INTELLIGENCE ANALYST: Well, I don`t believe that that`s the case. I think there`s been some acknowledgment that the White House Counsel was not informed in advance. But Mike Flynn given his extensive military career as well as being a National Security Adviser knows that when you talk to the FBI, you are talking to governments law enforcement officials and you must tell the truth.

And so under -- you know, whatever circumstances you`re going to meet with somebody particularly in the White House, if the FBI comes over and pays you a visit, you should just in a normal course of your day tell the truth, but especially to FBI officers, agents.

HAYES: Particularly, I wonder what you think about the fact that he is -- he is telling untruth. He`s lying about conversations with Kislyak that as an intelligence professional he has to know that the U.S. government is surveilling.

BRENNAN: Well, you would think that he would know the facts that he is being asked about and therefore under -- for what reason would he not tell the truth it`s still quite confounding. I know there`s a lot that goes on in the first few weeks of administration, but for something like this I think Mike just made a very, very serious mistake. He realizes it. He`s paying for it dearly.

But there should have been no excuse and there is no excuse for a National Security Adviser to lie to FBI agents who pay him a visit at the White House.

HAYES: There`s also the question of the kind of concern that was sort of going up through the chain. I think there was some in the transition while you were still in office, the Obama administration was there, and then through Sally Yates who is a holdover. I mean, how peculiar, how strange is it this scenario in which you have two FBI agents going over the White House to ask these questions about publicly false statements the national security director has made?

BRENNAN: Well, at the time there are a lot of questions about who might have been aware of any type of inappropriate behavior or engagements whether it be with the Russians or others. And so when the FBI conducts these types of investigations, they do it very, very carefully and thoughtfully so that they`re not going to compromise the investigation by discussing the matter with individuals who may, in fact, be involved.

So it has to be a very, very carefully done process in terms of interviewing people. You want to do in the right sequence. And I know that in those days of the administration, in the early days the administration there was tremendous interest in trying to understand better what was going on and who was involved in any type of inappropriate or even illegal activity.

HAYES: There were two messages that President Obama conveyed Donald Trump when he came to the White House several days after winning that surprise election. One was about North Korea and the difficulty of diplomacy and disarmament with North Korea. The other was don`t hire Michael Flynn. Why did he give him that advice?

BRENNAN: Well I think the feeling was that Michael -- though he had a very, very laudable military career in intelligence, his tenure at DIA was not his most accomplished a time and his engagements and activities after he retired from the military were of concern. They were public and there were things that he had been doing. But I think a number of people had worked with Mike over the years and President Obama sought the Council of individuals who knew Mike and President Obama did knew him as well, knew of his reputation and just said that he was not the right person to be the National Security Adviser for the Trump administration.

HAYES: Is it -- was that counsel -- did he seek your counsel?

BRENNAN: Not directly, no.

HAYES: Do you know -- you know Mike Flynn?

BRENNAN: I do. I know him well. I worked with him.

HAYES: What do you -- what do you think of the trajectory of this man who as you said is incredibly celebrated and decorated veteran in the Armed Services, seen as a consummate professional and in fact a kind of path breaker in counterintelligence and particularly counterinsurgency when he was posted in Afghanistan in other places. What do you think happened here?

BRENNAN: Well, I think Mike always had a very independent streak and did things his way. He also I think was -- came across in some respects as arrogant in terms of his thinking but again, to somebody who was respected for his accomplishments in uniform. I think though that he like others who were caught up in the Trump administration whirlwind I think got carried away and played to some of his worst instincts.

And so his performance at the Republican National Convention and other types of things that he was involved in I think really raised people`s question -- made people question what he was doing. And he`s different -- he`s -- he was a different Mike than I knew him. I had testified in front of Congress with him. I had engaged with him a number of times. But I do think that he got into that political environment and unfortunately when there`s a lack of ethics and principles at the very helm of a campaign, I think the people who fall into that campaign fall also by the wayside of ethics and principles.

HAYES: The judge today in referencing I believe Michael Flynn`s activity in taking half a million dollars in the Turkish government to secretly work on their behalf, on behalf of the interests of Erdogan and the Turkish government said to Michael Flynn you arguably sold out your country. Do you think that`s fair characterization?

BRENNAN: Well, Mike did not follow his responsibilities and obligations in terms of reporting that relationship and doing it in a rather sort of clandestine manner. I think there was there was -- there was some wrongdoing there clearly and obviously. And the judge who knows more of this case, I think as you said, he was disgusted by what happened especially somebody who was going to be responsible for this country`s national security.

There are again, some things that we expect of public officials like that and Mike fail to live up to those standards.

HAYES: All right, John Brennan, thank you so much.

BRENNAN: Thanks, Chris. Coming up, President Trump thanks Michael Isikoff of all people for his reporting on the Russian dossier. So Michael Isikoff is here to respond naturally in two minutes.


HAYES: President Trump love siding Fox News conservative op-eds to trash the Russia investigation, but today the man he`s quoting to debunk the Steele Dossier is none other than Yahoo! News Chief Investigative Correspondent Michael Isikoff. Trump Tweeted Michael Isikoff was the first to report Dossier allegations and now seriously doubts the Dossier claims.

Trump then quotes Isikoff on a podcast interview widely circulated by Conservative media. When you get into the details of the Steele Dossier, the specific allegations, we have not seen the evidence to support them. There`s good grounds to think that some of the more sensational allegations will never be proven and are likely false.

That was news to Michael Isikoff`s Russian Roulette co-author David Corn who tweeted Donald Trump, to save me some time, here`s the last page of Russian Roulette where Isikoff and I note you aided and abetted Moscow`s attack on American democracy. As for Isikoff, he said things in that interview that Trump did not choose to quote like this. In broad strokes, Christopher Steele was clearly on to something.

And for the full context I`m joined by Michael Isikoff Yahoo! News Chief Investigative Correspondent, co-author of Russian Roulette: The Inside Story of Putin`s War on America and the Election of Donald Trump.

Michael have you in fact utterly and completely cleared the President and his campaign of any wrongdoing having to do with Russia whatsoever?

MICHAEL ISIKOFF, CHIEF INVESTIGATIVE CORRESPONDENT, YAHOO NEWS: No. And in fact, I think I made clear in the -- in the interview that the president was quoting that there are serious matters and that the Steele Dossier was on to them, that there was a major Russian effort interfere in our election, that included extensive outreach to cultivate members of the Trump campaign. There were multiple contacts between the Trump campaign and people associated with the Kremlin that were never disclosed to the public.

All of that you know, it was true, is true, and will be true when we`re done. What I did say is that some of the specific allegations, some of the more sensational allegations in the Steele Dossier have not borne out. At least no evidence has come forward to corroborate them and in some respects the credibility of some of these specific allegations has gotten weaker over time, not stronger.

HAYES: Wait, are you referring -- I mean, there`s two that come to mind for me.


HAYES: One is of course the infamous idea that there is tape of the President in the Ritz-Carlton with sex workers I guess on the bed that the Obamas has stayed in, that there`s no corroborating evidence as of yet about that. Is that what you`re referring to.

ISIKOFF: No. There`s no corroborating evidence. And in Russian Roulette, the book that I wrote was with David, we cite comments by Christopher Steele and make it clear his own faith in that allegations had already diminished. He`s he told associates he believe there was no more than 50/50 that it was true which is kind of you know, should take a lot of people back who want to believe it if the guy who put it out there at first isn`t quite sure what he put out is true.

But the one that I focused on in that interview was the Michael Cohen in Prague allegation.

HAYES: Prague, that`s the big one.

ISIKOFF: Right. And when you look at the Steel dossier, that is actually one of the more serious allegations made in that -- in those memos because it directly goes to collusion to -- illegal coordination. The specific allegation is that Cohen was there to meet with Russian officials to talk about paying off hackers who hacked into the Clinton campaign. If true that`s huge.

HAYES: Right.

ISIKOFF: But in fact, Cohen adamantly denied that under oath before the Senate and the House and then he cooperated. And when he got sentenced, he was not charged with lying about that.

HAYES: It`s a great point.

ISIKOFF: He`s charged with lying about other things but he was not charged with lying about that which tells me that Mueller doesn`t have the evidence that that very sensational charge in the Steele Dossier is true.

HAYES: Yes, those were the two. The Ritz-Carlton and the Prague. And the Prague has always have been like the kind of craziest thing and it`s a very good point. You -- I want to play this interview. You`ve been covering Flynn for a long time and I think you`re sort of on to something with Flynn very early. This is really a remarkable interview that you did with him at the RNC. I think before this had become a kind of front-line issue for him where you`re talking about the fact of the Russian government or RT paid him for that trip when he went to Russia. Take a listen.


ISIKOFF: Russia has probably the greatest influence over Iran. Were you paid for that event?

FLYNN: You`d have to ask my -- the folks at that I went over there to --

ISIKOFF: No, I`m asking you. You`d know if you were paid.

FLYNN: Yes. I mean, I went over there. It was a speaking event. It was a speaking event. I didn`t take money from Russia if you`re -- if that`s what you`re asking me.

ISIKOFF: Well, then, who paid you?

FLYNN: My speaker`s bureau. Asked them.



HAYES: Of course the speaker`s bureau didn`t just come up with the money. They were paid by Russia. And what`s remarkable about that to me as here as we`re you know, awaiting his sentencing today and now it`s going to be you know, postponed another 90 days. It was all cut -- there are stuff that was just right there on the surface that he seemed unperturbed by.

ISIKOFF: Right. And actually, you know, I kind of quoted to that is in the 302 that just got put into the court record the other day in which this comes up. The FBI agents ask him about that trip to Russia and whether he was paid, and he said no, no, he wasn`t paid by the Russians. He was paid you know, through some other party. The party being this speaker`s bureau.

Now everybody knows that speakers bureaus are not philanthropic institutions. They get money from the clients which they then --

HAYES: That`s right.

ISIKOFF: -- you know, pass along to people -- person they`re representing.

HAYES: But what do you -- as someone who`s covered him and now we know more about what he has done, like what was Michael Cohen -- what was Michael Flynn up to?

ISIKOFF: You know, we have never gotten an explanation for why Flynn lied to the FBI agents and why he lied to senior White House officials about those contacts with Kislyak and the conversations he had. You know, it obviously raises a whole host of questions and one should want to see him being asked directly about this and answered.

You know, I think the really unfortunate thing about what happened today with the postponement in his sentencing is you know Flynn, Cohen, you know, all these key witnesses ought to be hauled before Congress at this point to be asked in public to answer all the questions they need that we all have about their contacts with the Russians. And because of the delay in sentencing, that makes it less likely that`s going to happen you know, rather than more likely.

HAYES: It`s a really great point. Michael Isikoff, thank you.

ISIKOFF: Sure, thank you. Coming up, Trump Foundation, the Trump Foundation is shutting down under orders from the New York Attorney General because of its and I quote here, shocking pattern of illegality. The criminal enterprise after this.


HAYES: On orders from the New York State attorney general the Trump Foundation is shutting down, and that is because, according to Attorney General Barbara Underwood, it was never really a charity at all. What it was, according to the AG, was a criminal enterprise, a fake charity that was, in reality, little more than a checkbook to serve Mr. Trump`s business and political interests.

Underwood said the foundation`s crimes included illegal coordination with the Trump campaign and repeated and willful self-dealing all amounting to a, quote, "shocking pattern of illegality."

The Trump Foundation challenged the statement as misleading. The allegations are extraordinarily damning. Just a few examples, Trump allegedly used the foundation to settle his own legal problems and after she got a $25,000 check from Foundation in Florida, Attorney General Pam Bondi, dropped an investigation into Trump University, which, by the way, giving a foundation donation to a political candidate is crazy to begin with.

And this is the best part, no expense too small or too ridiculous. It appears, for example, the foundation paid $7 in 1989 to register the then 11-year-old Donald Trump Jr. for the Boy Scouts. The Foundation paid for that.

It also paid $30,000 for a pair of portraits of Trump, including that one there on the left. Beautiful.

The foundation now has to sell those paintings off along with a signed Tim Tebow helmet that cost cool $12,000.

Trump now values the three items, which he spent $42,000 in charity money for, at a combined $975.

Trump himself did not donate a dime to the foundation between 2008 and 2015. He didn`t need to. Other donors stepped up, included wrestling moguls Vince and Linda McMahon who kicked in $5 million.

When Trump became president, he appointed Linda McMahon to lead the Small Business Administration.

Joining me now to break down now how exactly the foundation worked, WNYC reporter Ilya Marritz, co-host of WNYC and ProPublica`s Trump Inc podcast. Good to have you back.


HAYES: So, in the filing from the attorney general, what you get is this was not a foundation that did some stuff, that broke some rules, colored outside the lines, she`s saying, like, it -- root and branch it was not actually a foundation.

MARRITZ: The evidence she`s presented suggests it looked nothing like any foundation you`ve heard of that`s dedicated towards, I don`t know, curing cancer in kids or preserving wildlife. It didn`t have a very strong, clear purpose. The people who were on the board were all closely related to each other and didn`t have particular expertise in any of the areas that they wanted to make a difference in. And then there was the self-dealing. And you picked some really great examples with the painting that he bought at a charity auction and then installed in one of his hotels. The lawsuits that he settled. On behalf of his properties, he had his foundation settle lawsuits.

HAYES: That`s the craziest part. I mean, this ends up becoming basically it functions as a tax free bank account for him to pull money out of for personal or campaign expenses.

MARRITZ: That`s what it looks like from this complaint.

Now, this isn`t new. The complaint came out in June. So, my headline on today`s news is not that the Trump Foundation has dissolved, but that Donald, Don Jr., Ivanka and Eric are still the defendants in this suit from the New York Attorney General. The New York Attorney General is seeking millions of dollars in penalties and restitution. She is trying to ban them from serving on the boards in charities in New York.

It`s a civil matter, it`s not criminal. But it`s sort of a useful reminder that amid all the swirling investigations, Robert Mueller and this and that, we have a fairly simple case that really shines a very bright light on how Donald Trump ran his business, his foundation, his life.

HAYES: Under what is also clear, this is not the end of it, to your point there, right, like this is -- she wants more from them and it`s also not impossible there would be criminal referrals that would come out of this.

MARRITZ: It`s not the end of it, but it might be for a little while for Barbara Underwood because we have a new attorney general coming in who will be the third New York attorney general now to handle that -- it`s Tish James, she`s already signaled she wants to take a pretty aggressive approach with enforcement with the Trump Foundation and perhaps in other matters as well.

The Trump push-back, they would say -- I should give you their interpretation. The Trumps would say they functioned with almost no overhead, because they used the same accountants and the same lawyers and all the same people that were working at the Trump organization. Their office was at the Trump organization.

HAYES: So efficient.

MARRITZ: It was working basically out of Donald Trump`s house and therefore they had the lowest program fees. They were able to just give millions of dollars to charity.

HAYES: But here`s the thing, give millions of dollars to charity, when you buy a painting, it`s like -- he bought a painting at a charity auction, so it`s a donation, but he got out of it was a painting and then he hung it in a hotel for free.


HAYES: Right, I mean, the same thing with the settlements. It`s like the money passes through. And what`s interesting to me, too, is just that like here is a concrete example of the fact that the Trump Org and the Trump Foundation exists in a jurisdiction, in many jurisdictions, not just federal jurisdiction, but in New York State, where there is a big target painted on him and his family`s back right now.

MARRITZ: Yeah, I mean, the other thing that struck me rereading the complaint today was the whole matter with this veterans fundraiser in January of 2016, this was during the Iowa caucuses. And instead of participating in a debate, Donald Trump decided to have a veterans fundraiser and he handed out a jumbo check that actually said "Make America Great Again" on the bottom.

HAYES: There it is. Look at that.

MARRITZ: The New York Attorney General says that was an illegal campaign donation. Remind you of anything else that`s in the news lately?

HAYES: Right.

MARRITZ: You know, it`s a lot like the Stormy Daniels and...

HAYES: Right.

MARRITZ: ...and the other woman`s name.

HAYES: Karen McDougal.

MARRITZ: Karen McDougal, excuse me. So, you know, while the stakes are not as high, we`re kind of looking at the same pattern of activity.

HAYES: Yeah, what you get in both the Cohen case and what you get here is just lines crossing, total impropriety, total self-dealing and total conflicts. And no one like -- there`s no compliance officer running around there to make sure they`re not tripping over these lines.

MARRITZ: I mean, the board apparently did not meet at any date after 1999, at which point the Trump kids were still pretty young.

HAYES: Why did the McMahons, or why anyone give this foundation money?

MARRITZ: I am not entirely clear on that, and I`m also not entirely clear on what the real sources of money for the foundation were. Were they donations or were they perhaps revenues coming from somewhere else? I`m not making that accusation, but it`s something I would like to understand. I hope that that will come out in the evidence going forward.

One piece of evidence that`s already really great that`s out there for people interested, is expensive testimony from Allen Weisselberg, he`s the CFO of the Trump organization. It`s partly redacted, but a lot of it is there. He he really talks about how every check had Donald Trump`s signature on it, and how chaotic things really kind of are behind the scenes there. It`s great reading.

HAYES: Ilya Marritz, thanks for being with me tonight.

MARRITZ: You`re very welcome.

HAYES: Still ahead, an important update on the family seen in this viral image taken at the border. I`m going to talk to the California congresswoman who took action ahead.

Plus, tonight`s Thing One, Thing Two starts right after this.


HAYES: Thing One tonight, long before there was Thing One, Thing Two, there was Click Three, which is a hilarious segment in the very early days of this own show where we picked the three awesomest things on the internet that day.

Now, everybody loved Click Three, except our boss Phil Griffin who would call it pick six, and also Donald Trump who sent his one and only ever attack tweet about our show after we did this.


HAYES: The third awesomest thing on the internet today, an article explaining one of the world`s great enigmas, the origin of, or perhaps the inspiration, for Donald Trump`s hair. This is flannel moth caterpillar spotted by a biologist and wildlife photographer in Peru, and innocently posted online without the knowledge that viewers would soon dub it the Donald Trump caterpillar.


HAYES: That was just one month after the launch of this show on May 2013. The next day, Trump tweeted Chris Hayes replaced Ed show on MSNBC to increase ratings, it`s a shame Chris`s are even worse, sad to see.

Now, he was not wrong about that at that time. Our ratings were very sad to see. But here we are. I`m still on the air and that guy`s president at almost the end of 2018. And what do you know, there`s a new creature in the news, much like that caterpillar. Will Donald Trump tweet about our Thing Two? That`s in 60 seconds.


HAYES: It is truly amazing that even in our final 12 years on this planet we`re still discovering new species, and apparently when a new one is discovered sometimes the right to name that new species is put up for auction to raise money for environmental causes. This is what the rain forest trust did last week with 12 new species found in Latin America nature preserves. There were four frogs, four orchids, a forest mouse, a trap jaw ant, a salamander, and a legless amphibian called a Sicilian.

$25,000 was the winning bid to name this creature, about 10 centimeters long and shiny. It`s blind and known to bury its head in the ground. It`s also particularly susceptible to the impacts of global warming and in danger of becoming extinct.

The building materials company owner who won the bid said the creatures characteristics reminded him of a certain human, and so he named this weird new worm thing The Dermophis DonaldTrumpi.


HAYES: I would build a great wall, and nobody builds walls better than me, believe me. And I`ll build them very inexpensively. I will build a great, great wall on our southern border, and I will have Mexico pay for that wall. Mark my words.



HAYES: Yes, We all remember who`s going to pay for the wall, right? How can we forget? Donald Trump`s been making that claim in some form or another since 2015. It was even part of his official immigration platform.

But now, almost two years into his presidency, Trump is no longer demanding payment by Mexico for the wall. No. Now, he`s scrounging around his cabinet looking for loose change, as The Washington Post reports Trump has directed his cabinet secretaries to search for any stray funds that could be repurposed for the construction of a wall along the Mexican border.

Now, although it`s very difficult to legally redirect taxpayer money without congress`s approval, Trump seems to be realizing he doesn`t have the votes from his own Republican-controlled congress to support funding the wall, at least not the level he wants, which is precisely what Nancy Pelosi tried to explain to him last week in the Oval Office.


TRUMP: It doesn`t help for me to take a vote in the House where I will win easily with the Republicans.

REP. NANCY PELOSI, (D) CALIFORNIA: You will not win. Let me just say one thing, the fact is you do not have the votes in the House.

TRUMP: Nancy, I do. And we need border security.

PELOSI: Then let`s take the vote and we`ll find out.


HAYES: You`re going to need congressional approval and you don`t have the votes. It turns out that Nancy Pelosi was right and the president was wrong. And he finds himself once again backing off his new demand that Americans pay for the border wall, just like he did in July of this year and then again in April `17 and before that in January of 2017. Perhaps the president will one day see the writing on the wall.


HAYES: A remarkable scene played out at the U.S. border last night as two sitting members of congress from California went to try to help asylum seekers into the country, including the Honduran mother in this iconic photo, Maria Leila Mezacastro (ph), getting tear gassed with two of her children.

Between them, those two members of congress spent something like 16 hours trying to overcome stone-walling by U.S. officials, tweeting from the border for most of that time. But their efforts appear to have paid off. With 20 asylum seekers reportedly crossing into the United States.

Here with me now is one of the members of congress, Democrat Nanette Barragan. Congresswoman, thank you very much for joining us.

Where were you and your colleague undertaking this?

REP. NANETTE BARRAGAN, (D) CALIFORNIA: Well, we decided to go down to the port of entry, because we had heard that people were being turned away at the ports, even though they were trying to present for asylum. So we went down to Otay Mesa where we were with Maria and her children and other immigrants, trying to present themselves.

HAYES: So that`s about -- if I`m not mistaken, about 10 miles from San Ysidro, which is the sort of biggest port of entry.

What was the scene like there? What did you encounter? What did you see when they tried to come in?

BARRAGAN: Well, what we did was -- what I did was I went to visit with her beforehand and her children and talked to her before we actually made the journey to the Otay port of entry, the Otay Mesa port of entry. And when we walked up, what we saw were Customs and Border Protection officials standing near the turnstile; however, where they were standing was on the U.S. side. Two attorneys were walking in front of me.

I was there to observe, and the attorneys -- and I have to give a shout out to the attorneys and the volunteers who are the true heroes here in the story -- who said I have a client. We want to present them for asylum. Immediately, the CBP officer called for assistance and backup. And it wasn`t until later in the conversation did I start asking questions. It was when they effectively were asking her to go to another port of entry in which case we asked, you know, under what authority? Why does she have to leave?

HAYES: So the lawyers say we have someone here, Maria, who is the woman that we see in that photo. She is from Honduras, if I`m not mistaken. And you say we want to come in. We want to present legally. This is a port of entry, which is how you legally present for asylum, want to present for asylum, with lawyers.

And I want to play a little bit of sort of a back and forth with you and CBP that I think gives a flavor of how they react to this entirely -- let`s be clear -- entirely legal request under U.S. and international law. Take a listen.


BARRAGN: Are you telling me you don`t have capacity? Because I would like to come in and check your capacity then.

UNIDENTIFIED MALE: Yes, ma`am. I can show you.

BARRAGAN: OK. Let`s good in. Let`s see your capacity.

UNIDENTIFIED MALE: We don`t have a place to put (inaudible) capacity, still have to go to San Ysidro.

BARRAGAN: Well, how about you take the two members of congress to go show -- see the capacity so that we can...

UNIDENTIFIED MALE: Let me get my...

BARRAGAN: That would be fantastic.


HAYES: So their line was they did not have the capacity. So then what happened?

BARRAGAN: Well, he effectively said he was going to go talk to his supervisor and disappeared and never came back.

So the tactic here was first to try to get her and the migrants to go off of U.S. soil to go to another port of entry. When that didn`t work, because her lawyers advised her not to do that, they talked about the capacity issue.

And we simply wanted to go inside. We wanted to see the capacity issue, take two members in and show us the facility. They refused to do that numerous times throughout the evening.

HAYES: Do you think they were lying about capacity?

BARRAGAN: Well, it wouldn`t be the first time that I was misled by CBP. I`m going to give them the benefit of the doubt, but I don`t understand why they couldn`t show two members of congress the capacity issue.

HAYES: Can you tell me that Maria is from Honduras. What is her mental state, and how is she? And she must be in dire straights to make this journey to come to the U.S. given what happened when she and her children were tear-gassed.

BARRAGAN: Absolutely. You know, she is escaping violence in her country of Honduras. As you mentioned, she was photographed running from the tear gas incident. You know, when I met with her, she was very quiet. Her daughter was with her, her 4-year-old. And, you know, as a 4-year-old is, talking and trying to engage.

But there is no doubt that it is traumatizing for a family to go through what they have gone through, and then to be told they`re going back to the border again and not know what to expect, although we, not myself, but the attorneys did talk to her and make sure that she understood what might happen and might not happen.

HAYES: So you and Congressman Jimmy Gomez were there. And then what ended up happening? You stuck it out. You didn`t leave. And what happened?

BARRAGAN: Well, it got very cold. We were there for hours, hours on end. It wasn`t until probably seven hours later that they finally decided to allow them to go in and present for asylum.

But, Chris, let me tell you, CBP officers just completely ignored us for hours on end. It was cold. We were in a small, confined area, maybe 200, 250 feet to remain on U.S. soil, because they had called in Mexican immigration officials. They had called in Mexican federal officials. They also had called in CBP agents in riot gear.

So the intimidation tactics were out in full force. And they even got her to stand up at one point when they told her -- and they kept coming back to say, look, if you go to the San Ysidro port of entry, they will take care of you there. And her lawyers immediately were telling her no. You step off of U.S. soil, and Mexican officials can take you.

So it was a standoff, no doubt. Her 4-year-old daughter was crying, had to go to the bathroom. You couldn`t go anywhere. I mean, they were hungry and cold.

And one of my concerns is we just heard about a 7-year-old, Jakelin, dying under CBP custody. And here we have a situation where they completely ignore this family.

HAYES: All right, Congresswoman Nanette Barragan, thank you very much for sharing that story.

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