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Dem bill to end Shutdown. TRANSCRIPT: 1/24/2019, All In w. Chris Hayes.

Guests: Elizabeth Warren, Wendy Sherman, Ana Vanessa Herrero, Mimi Rocha, Glenn Kirschner

Show: ALL IN with CHRIS HAYES Date: January 24, 2019 Guest: Elizabeth Warren, Wendy Sherman, Ana Vanessa Herrero, Mimi Rocha, Glenn Kirschner

CHRIS MATTHEWS, MSNBC HOST: Leadership is an interesting aspect of human behavior and it`s easy to detect. A leader is someone with lots of people following her. Trump sees it. The whole country sees it. And that`s HARDBALL for now. "ALL IN" with Chris Hayes starts right now.



UNIDENTIFIED MALE: There are reports that there are some federal workers who are going to homeless shelters to get food.

WILBUR ROSS, SECRETARY OF COMMERCE, UNITED STATES: Well, I know they are and I don`t really quite understand why.

HAYES: The Trump shutdown drags on.


HAYES: As Trump world fiddles.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: It`s just the let them eat cake kind of attitude or call your father for money.

HAYES: Tonight, my exclusive interview with Democratic presidential candidate Elizabeth Warren on Wilbur Ross, the Trump shutdown, and her brand-new proposal for a wealth tax on the super-rich. Then the Senate will force Michael Cohen to testify.

UNIDENTIFIED MALE: Michael Cohen will speak.

HAYES: The diplomatic crisis for America amid chaos in Venezuela.


HAYES: And the unbelievable reason Florida`s Secretary of State just resigned.

ANDREW GILLUM, FORMER GUBERNATORIAL CANDIDATE, FLORIDA: I`m not calling this a DeSantis a racist I`m simply saying the racists believes he`s a racist.

HAYES: When ALL IN starts right now.


HAYES: Good evening from New York I`m Chris Hayes. The President is losing the fight over the government shutdown, the longest and potentially most damaging in this nation`s history. And the more he tries to make his case, the bigger the hole he dig for himself and for the country. Two different Senate measures to reopen the government failed today as expected. The surprise was that in the Republican-controlled chamber where the GOP holds of commanding six-seat majority, the Democrats bill got more votes than the President`s.

The vote was more evidence that the President`s position is only getting weaker the longer the shutdown drags on. And as the situation grows increasingly desperate for thousands of families scraping by without the income they`ve earned, a security concerns mount especially over the nation`s strained aviation system, the Trump administration also knows it is being blamed for the situation probably in no small part because the President said on camera basically you should blame me for the situation.

It`s clear the White House gets this because the worse things get the more they try to minimize the shutdown`s effects. It`s hard to imagine a more tone-deaf message than a bunch of multimillionaires downplaying the hardships that working families have been forced to face. Though in fairness to those millionaires, they probably have no clue what it`s actually like to miss paycheck.

According to the president`s chief economic adviser, the shutdown is no more than a glitch and unpaid workers are simply volunteering.

LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: As soon as this thing goes, the switch will be turned on, the payments will be made. We go back to normal. This is just a glitch. I may not net with my individual staff members, and God bless them, they`re working for free. They`re volunteering.

UNIDENTIFIED MALE: How are they volunteering? How are workers who`ve been called without pay volunteering?

KUDLOW: They`re coming -- workers, they`re showing up.

UNIDENTIFIED MALE: That`s not volunteering, if you`re forced to work without pay and of you don`t show up you lose your job, sir. That`s volunteering. That`s not what volunteering means.

KUDLOW: You know, I`m not even going to go there.


HAYES: OK. Now, that`s after the President`s daughter-in-law and campaign booster Lara Trump paid live service the "little bit of pain that some workers are going through."


L. TRUMP: It`s not fair to you and we all get that, but this is so much bigger than any one person. It is a little bit of pain but it`s going to be for the future of our country. So I would just tell them please stay strong. We pre appreciate everything that you`re sacrificing. We`re behind you and we`re going to do everything we can. I know the President is doing everything he can to resolve this quickly.


HAYES: But perhaps no one, no one is more out of touch with the real world impact to the shutdown than the President`s Commerce Secretary Wilbur Ross. A man who has gotten caught lying to Congress and on his financial disclosure forms both under penalty of perjury. He`s a man who`s been known to wear $600 velvet slippers -- I`m not making this up. You can see the photo -- customized with the logo of the Commerce Department.

And when even the CNBC reporters who are at Davos while their interview you are cringing, you know you`re in bad territory.


ROSS: It`s kind of disappointing that the air traffic controllers are calling in sick in pretty large numbers depending on the week --

UNIDENTIFIED FEMALE: Many of them can`t afford to support their families though.

ROSS: Well, remember this. They are eventually going to be paid. The banks and the credit union should be making credit available to them. When you think about it, these are basically government guaranteed loans because the government has committed these folks will get their back pay once this whole thing gets settled down.

So there really is not a good excuse why there really should be a liquidity crisis. Put it in perspective. You`re talking about 800,000 workers and well, I feel sorry for the individuals that have hardship cases, 800,000 workers, if they never got their pay which is not the case, they will eventually get it. But if they never got it, you`re talking about a third of a percent on our GDP. So it`s not like it`s a gigantic number overall.

UNIDENTIFIED MALE: Mr. Secretary but -- Mr. Secretary, they report that there are some federal workers who are going to homeless shelters to get food.

ROSS: Well, I know they are and I don`t really quite understand why.


HAYES: I`m not surprised you don`t understand why. I can`t imagine a better person to react to all this than Senator Elizabeth Warren who`s been the scourge of the Davos set since she was the special advisor for the Consumer Financial Protection Bureau in the Obama ministration. She is now running to be the next president of the United States. Senator, welcome.

I know you have a big announcement about wealth tax and I want to dig into that because I think it relates in many ways to what we`re seeing. But I wanted to first get your reaction both to Wilbur Ross and then what the President had to say defending Wilbur Ross` remarks. Take a listen.


D. TRUMP: I haven`t heard the statement but I do understand that perhaps you should have said it differently. Local people know who they are when they go for groceries and everything else and I think what Wilbur is probably trying to say is that they will work along. I know banks are working along. If you have mortgages, the mortgages -- the mortgage -- the folks collecting the interest and all of those things, they work along. And that`s what happens in time like this.

They know the people. They`ve been dealing with them for years, and they work along, the grocery store. And I think that`s probably what Wilbur Ross meant. But I haven`t seen the statement. No.


HAYES: What do you make of that?

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: Yes. This is the kind of thing that just reminds you, these folks have never lived paycheck to paycheck and they have no understanding of what the lives are like for people who expect to get a paycheck regularly, go out work for it, and build their whole budgets around that, build their whole lives around that. And instead, you know, for Donald Trump, for Wilbur Ross 800,000 federal workers are just pawns in a political game for them.

That is fundamentally wrong. It`s wrong in human terms and it`s the kind of thing that just makes us realize these are not the guys who should be running our government.

HAYES: Let me -- I want to ask you one more follow up on this. You -- the first book here as I read which is called Two-Income Trap which you co- wrote with your daughter, it`s a really interesting book, is literally about the situation these workers are facing right. It`s about the fact that people with decent paychecks and good steady jobs in America still find themselves stretched, still, don`t have savings.

WARREN: That`s right.

HAYES: Why is it that there`s such a representational gap in this country between those people and their live reality and what the Commerce Secretary and the President and so much of the sort of Washington class says?

WARREN: So actually, I`m glad you asked about it because Two-Income Trap, you`re exactly right. It`s the book I wrote in the early 2000s with my daughter, and what we talked about in that is how many tens of millions of families live their lives so close to the financial edge. And contrary to popular wisdom at the time we wrote this book, it`s not because they overspend, because they have affluenza which is what people were writing about at the time.

It`s because flat wages and rising expenses for housing, for health insurance, to educate your kids had just put a terrible squeeze on families and that squeeze has gotten worse. And that fits right into what I`m talking about today with a wealth tax. You`re right. These pieces line up.

Look at it this way. For years now, for decades now, rich people have gone to Washington and said just tilt the playing field in our favor just a little bit. And then they come back and say, tilt it just a little bit more. And the next year tilt it just a little bit more, just a little bit more, just a little bit more until today in America, the top one-tenth of one percent has amassed about as much wealth as 90 percent of America.

Upper middle class, middle class, working class, working poor, and the poor poor, and the consequence of having amassed that much wealth is bad for our economy. Tiny group of people making decisions that always tend to favor a lot of big corporations and bad for our democracy because it means just like you hear, it`s now a democracy that is influenced by the wealthy, the well-connected and is not working for you the people.

HAYES: So you have this proposal today, it`s a wealth tax. It`s very interesting. It`s not -- it`s not income, right? So incomes are flows. You know, everyone -- money coming in two people a year and that`s usually how we tax things. Wealth is sitting there. It`s a stock. It`s a thing that`s sitting there and a wealth tax is a novel idea in the American context. It`s on the very richest households with $50 million or more in assets. It`s about 75,000 households. It would bring in a lot of money, $275 billion a year. So this is a lot. There`s also a tax for billionaires.

Here`s my question you. The first thing I hear when I look at this and talk to other people is they`re going to get out of it. If you pass this and you try to go to Wilbur Ross` assets or you try to come after Donald Trump`s assets or any of these people, they are going to find a way to get out of it. What do you say to that?

WARREN: I say, you think I didn`t see that one coming? So the way that this is written is to say first of all, it`s going to tax all your assets wherever located around the globe. So if you were planning to move them to Switzerland or some Island, it doesn`t make any difference. They are all going to be taxed. The second part of it is we`re going to build right into the administration of this tax that it has a very high rate of monitoring, of auditing so rich people on the ultra-millionaire tax.

So we`re going to be out there counting them and watching them. And the third part of it is you know, once you identify these assets, it`s actually not that complicated in the heart because unlike some other places that tried to build this, this one isn`t going to have a bunch of exceptions. This one says all your assets wherever located and we`re going to keep counting. And you`re going to have to pay if you have more than $50 million in assets, this is the ultra-rich, you`ve got to have to pay two percent a year of that amount over $50 million.

And here`s the deal about the money though. I want to underline this part. It`s to use that money to build opportunity for the rest of America. So this is the kind of money. Think about this over the next decade we could produce just short of $3 trillion. That`s what kind of money where we could pay for child care, high-quality childcare for all of our kids.

It`s the kind of money where we could do real relief on student loan debt. It`s the kind of money well we could make a real start on a green new deal. It`s the kind of money where we could bring down the cost of health care. It`s the kind of money where you give somebody else in this economy a chance. A government that`s not just working for the tippy-top, a government that starts to work for the rest of America.

HAYES: So there`s been this -- I think that Overton Window as they call it the sort of center of this conversation is really shifted. Alexandria Ocasio-Cortez had floated a 70 percent top marginal rate. You`ve come out with this wealth tax idea which has not -- which doesn`t have a history in the U.S. unlike the top marginal rate.

WARREN: No, this is brand new.

HAYES: It`s brand new. Although I will note to people out there who own a home, you`re paying the wealth tax right now called property taxes so it does exist in America. I guess a question is there are -- there is a sense that this is crossing some line, right? You see this in Davos where they`re laughing at this idea and you see it on Trump T.V. where they say this is the death of the American Dream, that there`s something un-American about coming after the billionaires and their millions, and what do you say to that?

WARREN: So let me -- let me think about this in terms of just basic fairness. Look, I believe in a progressive income tax but basic fairness compared two people. One has inherited $500 million and has paintings and yachts and airplanes and brings in $50,000 a year in doing some work. The other one, public school teacher, doesn`t have anything in savings and makes $50,000 a year. Currently, in America, they get taxed exactly the same. That`s a tax system that is really helping the rich and the powerful.

HAYES: Wait, wait a second, though.

WARREN: Not -- I don`t want get too easy, but the person who`s sitting on $300 million has some passive income coming off those that they`re going to pay some taxes on. Not if they have paintings, not if they have --

HAYES: OK, right.


HAYES: It`s a Wilbur Ross who have all their money in slippers and paintings.

WARREN: Exactly right. Exactly. Yes, he has it all in slippers. But the -- but the real point is when we`re only taxing income, we`re taxing two people who may have the same income but are in wildly different economic circumstances. And here`s the deal. Think about the lead up to this. Rich folks for a long time have been pushing Washington. They`ve been lobbying Washington. They`ve been making campaign contributions. They`ve been doing bought and paid for experts to get all of the rules just tilt it a little more and a little more and a little more in their favor. That`s how they`ve amassed this wealth. And that`s how it is that it has gotten so wildly out of proportion.

I understand not everybody`s going to make the same, I get that. But we are now in an America where one-tenth of one percent has about the same wealth as 90 percent of America. And here`s the deal, 40 percent of America today can`t come up with $400.00 on an emergency.

HAYES: That`s why folks are in the red line.

WARREN: That`s right. That is not an economy that is sustainable, and it`s not a democracy that`s sustainable.

HAYES: I want to -- I want to ask you before I let you go because you`re here and you`ve got a shutdown that`s happening right now it`s where we started this conversation. There`s some talk of some movement, people seemed -- the White House seems to be aware now that it is for lack of a better word, getting its butt kicked on this. What do you see happening? What`s your sense? You`re in the Senate.

WARREN: Look, the Republicans in the Senate have made clear that they are afraid of Donald Trump. They`re not willing to cross him. So the question is when is Donald Trump got to feel enough pressure that he`s going to get this government back and running. Because that has to be the starting point for anything. People are hurting. We need the government functioning.

The idea that there are tens of thousands of people who are working and not getting paid, that`s not what we do in this country. And thousands and thousands and thousands more who have been locked out of work and can`t get paid, that`s not what we do in this country. Our federal workers are not pawns in Donald Trump`s political game. We need to get this government open.

HAYES: All right, Elizabeth Warren is the Senator from Massachusetts, also running for president this year. Thank you for making some time to stop by. I appreciate it.

WARREN: Thank you for having me.

HAYES: All right, next, as the Trump shutdown is set to cost government workers their second paycheck, signs the President is losing his bargaining power by the minute and Republicans support. The latest in two minutes.


HAYES: One of the most oddly surprising events of the entire Trump presidency came last night when the president admitted defeat and acknowledged he could not deliver the State of the Union in the House chamber. Nancy Pelosi had told Trump he could not give the speech in the House until he agreed to reopen the government and after some hemming and hawing, Trump finally admitted that quote that`s her prerogative. He even spelled it right.

Then today Trump watch as a Democratic bill to reopen the government with no money for his wall gotten more Senate votes than a GOP bill which included money from the wall. Neither passed, they needed 60 votes but that outcome was especially bad news for Trump seeing his Republicans of a six-seat advantage in the Senate.

The President`s bargaining power appears to be falling along with his poll numbers as the shutdown and flicks more pain and suffering and his allies offer up tone-deaf dismissals of the damage that Trump is brought. Now, there are signs he might finally just maybe be willing to free the hostages. Chuck Schumer and Mitch McConnell are now negotiating a bill that would fund the government for three weeks.

In a statement, Sarah Sanders said the bill would only work if there is a large down payment on the wall. It is hard to know if a White House would really insist on that down payment. Here`s Trump this afternoon when he was asked about a possible deal.


UNIDENTIFIED FEMALE: If Mitch McConnell and Chuck Schumer can come to some sort of agreement, will you support the result of this agreement?

D. TRUMP: Well, it depends on what the agreement is. I mean, yes. But if they come to a reasonable agreement, I would support it, yes.

UNIDENTIFIED MALE: Even if it has no wall money? Or does it have to have wall money?

D. TRUMP: I only -- look, I have other alternatives if I have to.


HAYES: Joining me now for more on where things stand, Joy Reid, the Host of MSNBC`s "A.M. JOY," Jim Manley former Chief Spokesperson for then-Senate Majority Leader Harry Reid. Something seems to have changed to me, Joy.


HAYES: It`s -- both in the reporting with these bills going up and then losing by a larger margin than the Democrats version, and then you`ve got this piece that just was published in the Hill that was behind the scenes with Pence and the Senators where GOP Senators read Pence the Riot Act before the shutdown votes in which they`re basically saying you -- we are screwed here.

REID: Yes. Except that they still didn`t vote to open the government.

HAYES: Right. Well, some of them. They got five defections, six defections.

REID: I mean, I do wonder how these people sleep at night. I have to be honest with you. The more you hear these stories of people who don`t have food in the fridge and we`re afraid they`re getting evicted, I`m sorry, you know, five is not enough. Anywhere -- I would love to hear a Republican be interviewed on camera about their rationale for still being dutiful butler`s to a President who he himself has already capitulated meekly on the State of the Union.

And you could just see in his demeanor, he gets it right? He`s learning "no" for the first time. HAYES: That`s exactly right.

REID: Nancy Pelosi is teaching him the word no. And he`s not used to it but he`s learning it faster than the rest of his party.

HAYES: It`s really -- that is well said, Jim because you can see it. What Joy just said, you can see it and you could hear it and you can smell the desperation coming off this White House now where they realize that that the President`s magic powers aren`t working. Now they have to get out of it. What does that look like?

JIM MANLEY, FORMER CHIEF SPOKESPERSON FOR THEN-SENATE MAJORITY LEADER HARRY REID: Well, you know, I`ve been making phone calls from the greenroom quite frankly and as far as I could tell, this is all about right now at this point in time trying to find whatever fig leaf that can give Trump to get him on board. As the Speaker pointed out this afternoon, you know, his down payment or whatever that was, you know, that`s not going to work but you know, they`re struggling to find something that can bring them on board, a fig leaf but you know, unless they get real quick, this is going to take a while.

HAYES: Well, here`s the problem the fig leaf, and here`s the problem the whole shutdown. No one knows what the shutdown is about because what the shutdown is about changes. Its slats, it`s a wall, it`s concrete, it`s bricks that they`re raising money with. Its see-through, its invisible, you could -- I know, seriously. It`s -- it is a metaphor and an applause line that got turn into policy that now the government has been shut down.

And so this is Nancy Pelosi answering a question today about this because the chief obstacle is no one knows what it is. Here`s Nancy Pelosi answering what exactly is the President talking about.


UNIDENTIFIED FEMALE: He`s now saying he wants a large down payment for the wall. Is that --

PELOSI: That is -- that is not a reasonable agreement between the Senators.

UNIDENTIFIED FEMALE: Do you know what he`s talking about? What size down payment he`s asking for?

PELOSI: I don`t know if he knows what he`s talking about. Do you?


REID: If Republicans gave a damn about building a wall, when they had unified control of the government, they would have given Donald Trump $25 million, $50 million, $100 million. They are so sort of slavish li devoted to him as you saw by all but five of them still feeling like we got to give him a fig leaf. We`ll be you know, destroyed by our MAGA base at home if we don`t give him a fig leaf.

They`re so afraid of him that if a wall matter to anybody, they`d already be paying for it. No one knows what he`s talking about because he doesn`t know. Maybe someone should ask Roger Stone since Roger Stone manned up.

HAYES: Right, to make them remember --

REID: To make him remember to bash immigrants. And the -- and the -- and the fig leaf line, Jim, is so important here because fundamentally this is about the President`s ego and saving face at this point.

MANLEY: Exactly. So that`s why the word fig leaf is so interesting. I mean, it`s going to have to be -- again, their messages is all over the place. First of all, they said they want a down payment, then they said later on. In another statement, they wanted a significant down payment. You know --

HAYES: A pure rated down payment which is also --

MANLEY: Pure rate down -- yes, me and you both, pal. So -- but again, if they think they`re getting something significant out of this, you know, they got another thing coming. Again, I`ve been watching both the House and Senate and especially after the votes this afternoon in the Senate, there`s no give -- there`s no will to cut a deal with this guy.

Now, having said that, to be clear, the House is going to unveil a proposal tomorrow. We`ll see what it looks like. We`ll see if Trump bites at it, but in the meantime, Schumer and McConnell are still talking this night -- tonight as far as I could tell and we`ll see what they can come up with as well.

HAYES: Although the thing about the House proposal is to Jim`s point, the House proposal will have to not give him a fig leaf right because it`s Nancy Pelosi and the Congressional Democrat`s proposal. So it would be, here`s some money for more judges and more humanitarian aid at the border and more -- you know, maybe some more border security or whatever but it will not be wall.

REID: Yes.

HAYES: Right?

REID: Well, yes. And here`s the thing is Donald Trump is getting this sort of rolling real-time education in what the Constitution says. He obviously doesn`t know. But Nancy Pelosi has decided that in addition to being the Speaker of the House, she`s going to be his tutor. She`s already taught him who controls the chamber of the House, her. Who controls the c- span cameras, her. Who decides how our tax money is spent? Who writes the legal language that restricts the way that the money can be spent, her. Right? The House --

HAYES: The chamber.

REID: The chamber not her, but the House. So the House decides. You can`t just say just give me $5 billion then he suddenly spends it on wall. No. That`s not the way it works. The money is -- this isn`t layaway money where he can get $5 billion now and then come back and get some more money to take it out of layaway. That`s not how anything works.

HAYES: By the way, I also think, Jim, that it is not a coincidence that the day after he had to acknowledge defeat on the State of the Union where he says, you`re right. I can`t give it. I`ll give it when the shutdowns over, that they`re looking to cut a deal. Because the whole idea behind Pelosi denying him that platform wasn`t to punish him or show it off, I think she thought rightly. He doesn`t care about the 800,000 workers and he doesn`t care about the air traffic controllers saying hitting the alarm button. He cares about people applauding human being in front of cameras and so take that away and maybe you get a deal.

MANLEY: Yes. I mean, that`s absolutely correct. And more and more -- in a different level, more and more Democrats are being very upfront and saying we cannot give in to this hostage taking.

HAYES: Right.

MANLEY: We got to put a stop to it. Now, the problem here, folks, is that what they`re talking about is still only you know, a couple of --

HAYES: Three weeks.

MANLEY: So we could be back at this at another time. That`s why it`s so important for the leader and for Schumer to set down some heavy markers now to tell this guy that no more, we`re done with this.

REID: Except that you can really see a scenario including Mitch McConnell`s own history that they could reopen the government for three weeks then just forget that was only three weeks, and just not shut it down again, right? It`s in their power --

HAYES: And just sort of move something along.

REID: And just move on. Because the idea --

HAYES: And pretend it never happened.

REID: Right. Down payment means there`s more money coming. There isn`t any more money coming.

HAYES: Joy Reid and Jim Manley, thank you both for being with me.

REID: Thank you.

HAYES: Next, we have exclusive reporting tonight just breaking from NBC News about Jared Kushner and the serious problems with his security clearances. It`s just been published on -- Ken Dilanian is here with that breaking news next.


HAYES: Breaking news tonight, exclusive reporting from NBC News about Jared Kushner`s security clearance and the long mysterious process surrounding it. According to two sources, Kushner`s application for a top secret clearance was rejected by two career White House security specialists after an FBI background check raised concerns about potential foreign influence on him.

But their supervisor overruled the recommendation and approved the clearance.

Joining me now with more is one of the reporters who broke that story, NBC News investigative and national security reporter Ken Delanian.

Ken, what do we know about when this happened and what the FBI background check flagged?

KEN DELANIAN, NATIONAL SECURITY REPORTER, NBC NEWS: Chris, I want to give full credit to my colleague, investigative producer Laura Strickler (ph), who is instrumental in digging this information out.

And the bottom line here is that Jared Kushner got special treatment.

He wasn`t the only one, though, we`re told that 30 other people had recommendations, flags, arguing that they shouldn`t have a security clearance, were overruled by this one supervisor in the office. And this happened in 2017, going into 2018.

And in Kushner`s case, you know the concerns about him are well known, Chris, foreign entanglements, foreign -- alleged foreign influence. He`s got business investments abroad. His companies do business abroad. And there`s been reporting that foreign governments have targeted him for influence.

And the FBI came back with a report detailing some of that, as we understand it. And two career officials in the White House office of personnel security looked at this information and said, you know what, he doesn`t deserve a top secret clearance. But their supervisor overruled them and recommended that he get the clearance and then it had to go to the CIA, because Jared Kushner is a high government official. He wanted an even higher clearance for sensitive compartmented information, and our reporting, Chris, is that the CIA looked at this FBI report and balked, and went back to the White House and said how did you even give him a top secret clearance?

And our reporting is that he does not to this day have that highest SEI clearance, which is what entitles you to look at NSA intercepts and CIA reporting.

HAYES: SEI is the highest, so he got top secret in overruling the FBI. So there is these red flags come in. The two career officers get this back from the FBI background check. They say there`s no way we can give this guy clearance. They are then overruled and then he tries to get the highest level and the CIA says no way, which he still doesn`t have.

Here`s my question, who overrules him? Is that a career person or is that a Trump administration official?

DELANIAN: It is a career person who was hired by the Trump administration. It`s a man named Carl Klein (ph), who is a former Pentagon official. He was brought in by the Trump administration in a lateral move. And our sources tell us the people in the office had a lot of issues with the way he did business.

And it`s really unprecedented. They told us that before he came in only once in three years had their recommendations been overruled, sources familiar with this process tells us.

HAYES: OK, so once in three years, he comes in and there are 30 cases that -- that your reporting says there 30 cases the FBI does background checks and brings it to the career officers who only do this for a living, this is all they do, they clear people. And in 30 cases of them saying this person should not get a clearance, they were overruled?

DELANIAN: That`s right. And what we`re told is that the Trump administration was unusual in that the kind of people that came to work and applied for security clearances had very complex business backgrounds, many of them had not been in government before, so this was an unusual situation, and there was a lot of red flags. And the FBI does not maybe a ruling, the FBI simply says here is the information, here are the concerns we flagged, these are the kind of issues, and then the White House officials, who have doing this for years, some of them, take a look at it make an adjudication, and in fact they were overruled in many cases.

And other than Jared Kushner, we don`t know the names of those 30 individuals, Chris.

HAYES: And so the concerns -- were they other concerns with those -- in those 30, do we know, were they similar a categories? I mean, we know Rob Porter, for instance, there were concerns about the fact that he had been accused of spousal abuse by both of his ex-wives. Were these sort of in in that bucket or more foreign influence, monetary issues?

DELANIAN: It`s all of the above, Chris. You know, 30 people, it could be a variety of different things, but those are exactly the kind of things that could disqualify a person.

Anything that would make one vulnerable to blackmail, so criminal issues, debts, financial problems, spousal -- alleged spousal abuse and then of course foreign contacts are a huge deal.

And what legal experts tell us are regular people who had these issues, and don`t forget Jared Kushner initially failed to disclose many foreign contacts and many debts and business entanglements on his financial disclosure statement -- regular people would never get a clearance, it just wouldn`t even be a conversation. And Mr. Kushner was treated very differently.

HAYES: All right, Ken Delanian, thank you for joining me.

There`s going to be a bunch more on this breaking news coming up on the Rachel Maddow Show right at the top of the hour. Definitely stay tuned for that.

But, first, Michael Cohen will be forced to testify after all following a subpoena from the Senate Intel Committee. That`s next.


HAYES: Michael Cohen is not yet off the hook when it comes to Capitol Hill testimony. He announced yesterday he was postponing his February 7 testimony before an open house hearing, citing threats to his family from President Trump.

But today news broke that Cohen has been subpoenaed by the Senate Intelligence Committee, that was not announced. NBC News learned of the subpoena from a source with direct knowledge of the matter who says that Cohen will testify February 12. That is, of course, the committee that Cohen has already been convicted of lying to about the Trump Tower Moscow. He starts a three year prison sentence March 6. You can imagine why they would want to have him back.

Now there`s still an open question about whether Cohen will testify before the House and in what forum? House Dems say they will still expect Cohen to appear before their committees.


UNIDENTIFIED MALE: And you haven`t decided you`ll subpoena him?

REP. ELIJAH CUMMINGS, (D) MARYLAND: I have not decided exactly how we will go about it, but I promise you we will hear from him.


HAYES: Meanwhile, there is a growing concern on Capitol Hill about the president`s very obvious witness tampering. What experts are describing as mob tactics in front of all of our faces.

Joining me now are Mimi Rocha, former assistant U.S. attorney in the Southern District of New York, and Glenn Kirschner, former federal prosecutor, both are MSNBC legal analysts.

Let`s start on the witness tampering part of this, Mimi. There`s -- you know, people have used very strong language, mob tactics is something that members of congress have said. I talked to Jackie Speier last night on this program who said it`s witness tampering, it`s a crime. As a federal prosecutor, what do you think?

MIMI ROCHA, FORMER ASSISTANT U.S. ATTORNEY, SDNY: It is absolutely mob tactics. I do not think that`s hyperbole. I did mob cases, worked on mob cases for 16 years, and this is right out of their playbook.

HAYES: Would you ever -- would it ever be the case that someone, say, who is implicated, right -- so you had a cooperating witness, and someone else would like publicly tell that person.

ROCHA: Well, this is why it`s a little harder for people to maybe see. So I think Glen and I have both used this analogy, this hypothetical to sort of explain it. If I were prosecuting a mob boss and one of his capos, or soldiers, was cooperating against him, and the mob boss was out on bail, the capo is out on bail, and they met in the bathroom during trial or somewhere during a court proceeding...

HAYES: I`m seeing the scene in my head.

ROCHA: And things like this have happened, and the mob boss said to the cooperating witness, you know, I can tell about your father or something like that, and that cooperator came back and told us -- whether the father was or was not implicated in criminal conduct no the point, the point is that cooperator would take that as a threat.

Now that`s said in private in that setting, it`s more obvious. Is Trump talking -- who is he talking to when he says it publicly? He is talking to Michael Cohen, he`s just doing it publicly because one, that`s what Trump does, two he doesn`t have access to Michael Cohen privately. I also think he`s talking to the Department of Justice who he would like nothing more than to focus on Michael Cohen`s father...

HAYES: An investigation.

ROCHA: And they may be, they may not be, we don`t know. But that is not the point. The point is Trump`s intent, I think, is clear. And I think a reasonable prosecutor could differ with that as to whether you could actually prove that intent beyond a reasonable doubt. I think there`s varying degrees of certainty about that. In my mind, I would charge it.

HAYES: You would.


HAYES: Glenn, same?

GLENN KIRSCHNER, FORMER FEDERAL PROSECUTOR: Exactly. I`m with Mimi. This is not just witness tampering, this is President Trump taking a chapter out of the book witness tampering for dummies.

And here`s why, Chris, because there`s no legitimate or benign reason to put a command at the end of your text the way the president did on January 18. That command is, quote, "watch father-in-law, exclamation point." He blasts that out to his millions of followers.

Chris, I`ve had this exact thing when we would monitor calls of the defends and the defendant would say you know that guy who flipped on me, I want you to watch his father-in-law. Under those circumstances, as a prosecutor, I would do two things. One, I would immediately invite the father-in-law in and I would say, sir, I`m sorry to inform you we have come into information that we believe constitutes a threat so I`d like to lay out the different witness protection options that you have available to you.

Second thing I would do is I would draft an indictment for obstruction of justice for witness tampering.

HAYES: OK, well that`s -- that`s very strong for both of you guys. I mean, that`s the way it looks to me. He`s doing it -- and then just and a day goes by, but there may be some reckoning with this.

What do you think on the subpoena of Michael Cohen? He`s going to go back. It looks like he`s going to comply, which to me is just a testament of the fact that the House is issuing a subpoena, he`s probably going to show up too, right?

ROCHA: Yeah, I mean, look, he`s in a tough spot because he`s already plead guilty to crimes, so he doesn`t have the broad fifth amendment immunity problems that other people could claim.

HAYES: Right, because if they called me tomorrow, I could just go in and say I take the fifth. I don`t have to answer your questions.

ROCHA: Yes, if you had committed all sorts of crimes and not plead guilty to them you could say -- now, there could be certain grants and immunity, but he has less of that shield to sort of hide behind.

HAYES: Although, Glenn, it looks like this will be behind closed doors. Do you think prosecutors are worried about open testimony?

KIRSCHNER: Yeah, I mean, prosecutors never want a potential trial witness to go on record anywhere else. But because Michael Cohen is not a formal cooperating witness, he entered that sort of unusual plea agreement that makes him a quasi-cooperator, it`s not necessarily the prosecutor`s call to make.

So, we`ll have to see how it plays out, whether it`s behind closed doors or in public. I do think that the public is thirsty for more information, and I suspect Michael Cohen has a lot to tell us beyond what we know about Donald Trump.

HAYES: Yeah, put me in that category of wanting more information and publicness. Mimi Rocha and Glenn Kirschner, thank you both.

Still to come, the man that Ron DeSantis chose as Florida`s secretary of state, that story just ahead.



UNIDENTIFIED MALE: We meet a Therence and Victory Tunsen (ph), swimming up to their chins, a young married couple who say they need to find their father stranded at home.

UNIDENTIFIED MALE: My dad, he`s trapped in a house.

UNIDENTIFIED MALE: Slowly, we reach their street and it`s suddenly clear this neighborhood is packed with people who never left.

We finally see Victoria`s father. He`s built a raft out of the back door and uses it to get to our boat.

Finally on dry ground, Victoria and her father are lucky. They`ll try to get to family in Houston, but the hard part is all too clear, missions like this are going to have to happen again and again and again.


HAYES: I remember where I was in the summer of 2005 watching the utter desperation in New Orleans and the Gulf. And I think all of us who watched it unfold remember the way that it ripped our heart out of our chest to see people drowning in front of our eyes.

And so you have to ask, what kind of person would, two months after Katrina hit, go to a Halloween party dressed in mocking blackface as a Katrina victim, quote, "wearing red lipstick, earrings and a New Orleans Saints bandanna with the words Katrina victim scrawled across his fake breasts."

Well, the secretary of state of Florida, that`s who, or at least the man who until he resigned today in the wake of those photos being made public.

Now, new Florida Governor Ron DeSantis has to appoint a new secretary of state, and he`s already been dogged by his associations with racists in the past, as his opponent in last year`s race, Andrew Gillum, famously pointed out.


ANDREW GILLUM, (D) CANDIDATE FOR GOVERNOR OF FLORIDA: First all of, he`s got Neo-Nazis helping him out in this state. He has spoken at racist conferences. He`s accepted a contribution, and would not return it, from someone who referred to the former president of the United States as a Muslim N-I-G-G-E-R. When asked to return that money he said no. He`s using that money to now fund negative ads.

Now I`m not calling Mr. DeSantis a racist, I`m simply saying the racists believe he`s a racist.


HAYES: Since being sworn in as governor, DeSantis, his ears clearly still ringing from that debate moment, has made some very high profile moves to reach across the racial divide. And no move will be more scrutinized than his next secretary of state appointment, since that individual will be tasked with the re-enfranchisement of as many as 1.5 million of Florida`s felons who just won their right to vote back this fall.

Which means, everyone will be watching very carefully who he appoints. Let`s hope he finds a better caliber of person than his first pick.


HAYES: The Trump administration is hurdling toward as confrontation with Venezuela that could put American diplomats in grave danger. Yesterday, amidst massive street protests in Venezuela against the government of the increasingly flailing and autocratic Nicolas Maduro, the U.S., along with Canada, Brazil, and others, made the provocative move of recognizing opposition leader Juan Guaido, as the legitimate president of Venezuela.

The problem is that Maduro still controls the country and the armed forces and he responded by ordering all U.S. diplomatic personnel out of Venezuela in 72 hours.

Secretary of State Mike Pompeo responded with a blistering statement saying the United States does not recognize the Maduro regime as the government of Venezuela, and refused to comply. The U.S. has now ordered non-emergency employees to leave the country, but it appears some diplomatic staff remain, facing a less than a 48-hour deadline and the chilling prospect of even more escalation.

Here to talk about this very complex situation, MSNBC global affairs contributor Ambassador Wendy Sherman, former undersecretary of state; and joining me on the phone from Caracas is The New York Times reporter Ana Vanessa Herrero.

Ana, if I can go to you first, if the line is good, what is the situation in Caracas like right now?

ANA VANESSA HERRERO, NEW YORK TIMES: Well, thank you for having me. Right now in Caracas we are seeing protests again, overnight protests in the slums, in poor neighborhoods. This is something I want to be very clear, because this is something so much different 2017, 2015 where the middle- class was taken the streets.

Right now we`re seeing something completely different. We`re seeing people from poor areas taking the streets overnight asking for their rights, telling Nicolas Maduro that he has to leave, that he has to step back and to allow opposition.

This has been happening for the past three days. And that is something actually that it`s not possible -- we don`t think it is going to stop, at least not today, not tomorrow.

Also we`re seeing clashes with security forces. And so far, according to local NGOs, we have more than 22 people killed during protest and as far as 200 people arrested during protests, since this Monday.

HAYES: Ana, thank you for that.

I want you to stay on the line. Ambassador, you know, this is a different situation I think in the past, what Donna was saying about a sort of a broader swath of Venezuelan society uniting against the regime and it has been disastrous several years in Venezuela in terms of food consumption, in terms of outflow of migrants and refugees. The question, though, is. What the U.S. did yesterday in Canada and Brazil and others is a very kind of brinksmanship kind of move. What do you think about it?

WENDY SHERMAN, FORMER UNDERSECRETARY OF STATE: I think it`s an extraordinary brinksmanship kind of move, and I think we have two big concerns. First of all, Americans who are in Venezuela, Congressman Engle, chairman of the House Foreign Affairs Committee, along with Congressman McCaul, the ranking member, Republican, wrote a letter to the president saying they want to be briefed continuously to make sure Americans are safe.

As you noted, non-emergency personnel have left, but there is a lot of Americans in the embassy as well as who work in Venezuela who may be at risk in the changing circumstances that Ana just reported on.

And secondly, we don`t know where this is headed. And we don`t know whether the Trump administration is fully prepared for all contingencies here. This decision seemed to be made quite quickly, though one expects that something was happening behind the scenes before the decision was announced. We have got a State Department that is not up to full speed. There are many furloughed workers in Washington, and I think 40 percent of the diplomats around the world. And in a situation like this, you want to bring everybody together.

Secretary Pompeo has called for a UN Security Council meeting on Saturday. I think it`s quite contentious.

And the last thing I want to say, Chris, is that we may be at sort of a cold war style confrontation with Russia who is a very big supporter of Venezuela. Venezuela, as you know, has huge oil reserves, very important to the rest of the world, and Russia has really come in quite tough against the United States and other countries.

Mexico interestingly has not stood against a Maduro and with the United States and I think a lot more is to come. And when John Bolton said today, he said all options are on the table I think made a lot of people quite nervous.

HAYES: Well, that`s -- I mean, so Mexico -- we should note Mexico, Uruguay and the Vatican call for a kind of a negotiated talks between Maduro`s government government and the opposition. Maduro I think made some noises today he would accept that. That`s a very different formulation than the U.S. and others.

Just recognizing someone as a leader, which to be clear, right, is not a thing we do often. I mean, for very -- for the obvious reason that if you recognize a leader who doesn`t have control of the country, you`re kind of hanging out there now, because if it doesn`t work, if it doesn`t switch the loyalty to the military, which this seemed designed to do, then what do you do?

SHERMAN: Right, and I think -- and Ana probably has a good ear for this, whether the rank and file in the military start to break with the generals -- we`ve seen a little of that, but certainly not enough of it. And you`re quite right, Chris, the U.S. doesn`t generally do this. We don`t interfere in these kinds of decisions. But I think the Trump administration, and with support from many in congress on both sides of the aisle, that the plight of the Venezuelan people has just been quite a horror show, to say the least.

HAYES: Yeah, I guess the question now becomes given the U.S. history in the region, which has been a lot of intervention and internal affairs, including military support, support of coups, including a support of Chavez, Maduro`s predecessor, himself, by the Bush administration, which was short lived, the degree to which this -- Ana, maybe I`ll ask you this question, the degree to which U.S. involvement casts a shadow on the popular movement that seems quite organically against Maduro.

HERRERO: Well, actually, no, the U.S. support it`s just backing up everything that is being made here in the country, because let`s -- I mean, Nicolas Maduro is the only one right now that is just addressing the U.S. I mean, he`s specifically talking to the U.S. and talking to Trump, but that is not the situation with the opposition and with the people in these demonstrations, with the people that support the national assembly. They are talking about international opinion, maybe. They are talking about only some. They`re talking about Canada, UK -- they were expecting the European Union. They are talking about the Lima Group (ph). And this is something they feel -- they feel supported right now.

But, no, I mean, no one -- right now, no one is stopping to think, OK, what is behind, you know, Trump`s support, because Trump is not the only one.

HAYES: Yeah, there is a coordinated...

HERRERO: And that...

HAYES: There`s a coordinated international effort...

HERRERO: ...made it a movement.

HAYES: Ana Vanessa Herrero, who is in there in Caracas, thank you very much. Wendy Sherman, thank you both for making some time tonight.

That is ALL IN for this evening. "THE RACHEL MADDOW SHOW" starts right now.