New questions about Roger Stone. TRANSCRIPT: 02/01/2019, All In w. Chris Hayes.

Guests: Ted Lieu, Ian Bassin, Jack Reed, Aisha Moody Mills, Cristina Beltran

Show: ALL IN with CHRIS HAYES Date: February 1, 2019 Guest: Ted Lieu, Ian Bassin, Jack Reed, Aisha Moody Mills, Cristina Beltran

CHRIS MATTHEWS, MSNBC HOST: Does this president know the danger he`s flirting with? That`s HARDBALL for now. "ALL IN" with Chris Hayes starts right now.

(BEGIN VIDEO CLIP)

CHRIS HAYES, MSNBC HOST: Tonight on ALL IN.

UNIDENTIFIED MALE: We love you, Roger.

HAYES: Roger Stone warned by the court.

UNIDENTIFIED FEMALE: Did you ever talk to him about WikiLeaks because that seem to be what Mueller --

HAYES: As the President breaks his silence.

UNIDENTIFIED FEMALE: You never had a conversation with him.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No. I didn`t. I never did.

UNIDENTIFIED FEMALE: OK. And did you ever tell him --

HAYES: A familiar denial from the President.

UNIDENTIFIED FEMALE: Did you ever tell him to -- or other people to get in touch with him?

TRUMP: Never did.

HAYES: And the mystery of Roger Stone WikiLeaks and the Access Hollywood tape.

TRUMP: Hey, when you`re a star, they`ll let you do it. You can do anything.

HAYES: Plus, the President pulls America out of an arms treaty with Russia.

UNIDENTIFIED MALE: This is not standing up to Russia, this is giving them a gift.

HAYES: The exploding controversy over the Virginia Governor`s appearance in a racist yearbook photo. And Cory Booker makes it official.

SEN. CORY BOOKER (D), NEW JERSEY: I`m Cory Booker and I`m running for President.

HAYES: Will the New Jersey Senator`s call to rise together move Democrats?

BOOKER: People in America are losing faith that this nation will work for them.

HAYES: When ALL IN starts right now.

(END VIDEO CLIP)

HAYES: Good evening from New York I`m Chris Hayes. President Trump is now on the record to deny that he never told Roger Stone to get involved with WikiLeaks. The problem for the President is that his denials are worth nothing. In a wide-ranging interview with the New York Times, Trump said that Rod Rosenstein told his lawyers that Trump is not a target in the Mueller investigation but when he was asked directly about Roger Stone, he said this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Did you ever talk to him about WikiLeaks? Because that seem to be --

TRUMP: No.

UNIDENTIFIED FEMALE: So you never had a conversation with him?

TRUMP: No, I didn`t. I never did.

UNIDENTIFIED FEMALE: Did you ever tell him to -- or other people to get in touch with him?

TRUMP: Never did.

(END VIDEO CLIP)

HAYES: As I listened to that audio, I could not help but recall the moment on Air Force One last year when the President was asked a similarly direct question about whether he knew about Michael Cohen`s payments to Stormy Daniels, a question we now know the answer to is yes as a matter of record in federal court and because the president has since admitted he knew.

But before any of that here`s how Trump reacted to a direct question about the hush money. Does his response sound familiar?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Did you know the $130,000 payment to Stormy Daniels?

TRUMP: No.

UNIDENTIFIED FEMALE: Then why did Michael -- why did Michael Cohen makes it if there was no truth to the allegation?

TRUMP: You have to ask Michael Cohen. Michael is my attorney and you`ll have to ask Michael.

UNIDENTIFIED FEMALE: Do you know where he got the money to make the payment?

TRUMP: No, I don`t know.

(END VIDEO CLIP)

HAYES: Never heard of it, don`t know, nope. The aforementioned Roger Stone was back in court today. Prosecutor of the Special Counsel told the judge they are looking to begin Stone`s trial in October. That`s eight months from now. The judge said she thought July or August might be more appropriate but did not rule out a false start date. She also warns Stone not to treat the criminal case against him like a book tour and added she was considering issuing a gag order to end Stone`s media blitz.

Stone did not comment publicly after the hearing but he repeated his weird Nixon thing that he has literally been doing since he was a teenager as seen here in a page from his high school yearbook exclusively obtained by ALL IN. There is still a bunch of outstanding questions about Stone and his role in the WikiLeaks e-mail dump that came on the heels of the Access Hollywood Tape being made public.

It has always been the case that it is highly suspicious that just half an hour after the worst bombshell moment of any presidential campaign in recent memory was published, WikiLeaks just happened to start releasing e- mails that furthered a damaging narrative about Hillary Clinton`s campaign, e-mails that were of course, stolen by the Russian government`s hackers.

Former Stone ally Jerome Corsi says Mueller has evidence the timing was not a coincidence and Roger Stone`s indictment says that someone from the campaign texted him well done after the e-mail is posted. The question is did stone make that happen?

Joining me now is Congressman Ted Lieu of California. He`s a member of the House Judiciary and Foreign Affairs Committee. I think I know the answer but I`ll ask it anyway, Congressman. Do you believe the President when he denies that he ever instructed Roger Stone to get involved with WikiLeaks?

REP. TED LIEU (D), CALIFORNIA: Thank you, Chris, for that question. Donald Trump has lied thousands of times. That matters both great and small. So I don`t think we can take his denial to mean very much. I`m a former prosecutor and what was interesting to me about the Roger Stone indictment is that Special Counsel Mueller included information and there totally unnecessary to the actual charges.

So this sentence that a senior Trump advisor was directed to contact Stone, that was director phrase was not necessary and I think it`s very interesting that Mueller included it because it sends a signal that there`s someone pretty high up that was in on this collusion.

HAYES: I want to play what the President had to say about both the Special Counsel investigation and the SDNY investigation of him and get your reaction to both what he`s saying and whether you think he`s telling the truth and what it would mean if he is. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Has Rod Rosenstein given you any sense over the course of the last year about whether you have any exposure either in -- or there`s any concerns or whether you`re a target of Mueller report?

TRUMP: Well he told -- he told the attorneys that I`m not a subject, I`m not a target --

UNIDENTIFIED FEMALE: He told your attorney?

TRUMP: Yes, oh yes.

UNIDENTIFIED FEMALE: Did you say that bout the SDNY investigation too?

TRUMP: About which?

UNIDENTIFIED FEMALE: SDNY investigation. Because there`s two. There`s Mueller and then there`s the Cohen investigation.

TRUMP: I don`t know. I don`t know about that. That I don`t know about.

UNIDENTIFIED FEMALE: Rod has never said anything to you about whether you`re -- you have any -- you`re a target at all in terms of what they were looking for on Cohen? Has that ever come up?

TRUMP: No, I don`t. We didn`t discuss it.

(END VIDEO CLIP)

HAYES: What do you make of that?

LIEU: Well, again, Donald Trump lies all the time so it`s unclear how much stock we can put into his denials. But there two -- actually there are multiple investigations going on, but the one with the Southern District of New York, we had Michael Cohen under oath in a federal court basically say that Donald Trump directed him to make these payments that were felony payments and Trump right now is an unindicted co-conspirator in that case. So in terms of him being a target, it`s pretty clear to me that in at least that case he would be a target.

HAYES: There`s a question now about Michael Cohen whether he`s going to testify publicly at all before a House committee. He will be testifying the House Intelligence Committee. There`s a question about Roger Stone being called back because he apparently lied to Congress. How important is it to you, and I`ve been asking everyone this, to have public hearings on these matters?

LIEU: I think public hearings are preferred and it will be very important. I`m at the House Judiciary Committee and we`re going to start holding hearings on obstruction of justice, abuse of power, as well as witness intimidation. You can`t really have those hearings if you don`t have key witnesses such as Michael Cohen or Roger Stone.

HAYES: Wait, say that again. Is that -- is that have been made public yet? They`re going to have hearings on obstruction of justice, witness tampering, and what else?

LIEU: Abuse of power. And let me sort of give the background to this. Before people can even talk about the question of impeachment, you would need to have a record. Donald Trump and his associates or presumed innocent like anybody else in America. We have right now really some newspaper articles, we`ve got some special counsel Mueller indictments.

What we need to do in the house is to have people under oath give testimony. We need to subpoenaed documents. We create this record with these hearings and then American people can decide later this year what do they want to do.

HAYES: So has that been made -- I mean, those hearings, those are not been noticed yet, right, in terms --

LIEU: Yes. That is correct. Those hearings had not been noticed. The only hearings that have been noticed are next week we`re going to have Matt Whitaker, Acting Attorney General come in on Friday and we will question him. We`re also going to have hearings on HR8, their background checks bill for guns.

HAYES: Let me ask you this about Whitaker. He said just a few days ago that it`s wrapping up. There`s this sort of consensus, there`s been reporting from my own news organization and others that it is wrapping up. And yet here you see the Special Counsel filing today saying we need till October. We need a lot of time to go through Roger Stone. What do you -- what do you make of it?

LIEU: It was completely inappropriate for the Acting Attorney General to say anything about an ongoing criminal investigation. And their reasons why you don`t want to put a timeline on it because it sends all sorts of signals to potential targets or witnesses. And as a past -- former prosecutor, I know that when you get new evidence, you might have to look at new leads and it extends whatever your timeline is.

So they had have now years of evidence from Roger Stone that they have to go through in terms of his communications. That`s just going to take some time and deck of lead to additional witnesses, additional leads, so I don`t think this investigation is going to end any time really soon.

HAYES: Congressman Ted Lieu, thank you very much.

LIEU: Thank you, Chris.

HAYES: Joining me now is Ian Bassin, former Associate White House Counsel of President Barack Obama, now the Executive Director of Protect Democracy and Glenn Kirchner, former Assistant U.S. attorney for the District of Columbia, now an MSNBC Legal Analyst. His latest piece is titled Trump Advisor Roger Stone`s Indictment in the Mueller Probe suggests conspiracy charges may still be forthcoming.

HAYES: I want to start with you, Glenn, and on Roger Stone. I want to play this thing that I thought was very interesting about Roger. Roger Stone being interviewed on Trump T.V. about his indictment on the day of his indictment. He says something like that caught a lot of people`s ears. Take a listen.

(BEGIN VIDEO CLIP)

ROGER STONE, FORMER CAMPAIGN ADVISER, TRUMP CAMPAIGN: When the President answered the written interrogatories, he correctly and honestly said Roger Stone and I never discussed this and we never did.

(END VIDEO CLIP)

HAYES: How does Roger Stone know what the President`s answers to the interrogatories were?

GLENN KIRCHNER, MSNBC LEGAL ANALYST: Because he`s colluding -- I mean, he`s having conversations with the President and the President`s legal team in what is arguably inappropriate because you know, it`s virtually target to target conversations which are at a minimum extremely unwise and they will come back to haunt both the President and Roger Stone.

HAYES: Why? Why is that extremely unwise?

KIRCHNER: Because look, when we look at these indictments, the Stone indictment for example, I`ll tell you, Chris, thirty years as a federal prosecutor, I`ve drafted more indictments than I can recall, but one thing I can tell you when we indict one person, Roger Stone, we do a relatively modest indictment.

So for example, if Roger was -- Roger Stone was indicted for a witness tampering charge, the indictment on that count would read something like you know, on January 1st, 2019 in the District of Columbia, defendant Roger Stone tampered with a witness by trying to interfere with the witness` truthful testimony before a proceeding, period.

What we have, the Roger Stone indictment, Chris, is a conspiracy indictment. There`s no conspiracy charge contained in it but it sets out the misconduct and the complicity of so many other people, of Corsi, of Credico, of Julian Assange, and of senior Trump campaign officials including somebody who directed a senior Trump campaign official to try to coordinate with Stone to get even more damaging WikiLeaks information.

HAYES: You know, Ian, we`re now -- you know, we`re at this point where the big question to me has always been that that day October 7th, the tape comes out and then the WikiLeaks dump happens. And you know, I always say if you`re a publisher, that`s a weird time to publish because you`re publishing you do this enormous story, it`s going to get swallowed up and it`s a Friday which October 7th was. Wait till Monday. Why would you publish then, right?

But if you`re trying to distract attention, if you`re trying to do an oppo dump it makes a lot of sense. And we now of Corsi saying that Stone was trying to shake the tree loose and the indictment says well done afterwards.

IAN BASSIN, FORMER ASSOCIATE WHITE HOUSE COUNSEL OF PRESIDENT BARACK OBAMA: And I think what it does is it shows the map of what is happening here. So I wish I could like pulp fiction draw a shape in the air on your show but I`m going to draw a triangle. And here`s what we know. At the top of the triangle, the Russians. We know they hacked into the DNC accounts. We know they`ve hacked into John Podesta`s accounts.

We know they gave that to WikiLeaks and it came out. We know the Russians spoke to the Trump campaign. We know those two legs the triangle. What the Stone indictment shows is this piece.

HAYES: Right.

BASSIN: That the Trump campaign was speaking of WikiLeaks. And what was the benefit apparently as you said, that that dump came out at a time that was strategically advantageous for the campaign to squash the story of the Access Hollywood Tape.

HAYES: And there`s also this question Glenn of superseding indictments and duration that I want to ask you as well that I just asked the Congressman amidst all this talk about them wrapping up. The filings of the last two days, the motion to delay this for October, what do you think that says about where the investigation is?

KIRCHNER: You know, it seems to me there`s still a lot of work to be done and I know there`s a good bit of reporting that perhaps a report is imminent. But let me tell you, there is nothing mutually exclusive about future indictments and a report being authored to Congress perhaps on a narrow issue, a more discreet issue.

But you know, to the to the sort of overall conspiracy, Chris, I went back and I pulled out the the indictment of those 12 Russian military officers from July and I keyed in on one particular one particular passage. It`s on page 16, paragraph 44, for those of you scoring at home and it talks about how the Russian co-conspirators who were indicted in that case also communicated with U.S. persons about the release of stolen documents including a person who was in regular contact with senior members of the presidential campaign of Donald Trump.

You can see the conspiracy forming when you read all of these indictments together. Bob Mueller doesn`t put those in there on a whim. There`s a purpose and the purpose is to prove the conspiracy.

HAYES: I want to ask you a question, Ian, about the sort of public nature or the lack of sort of public establishment of the facts I was talking to at the congressman Ted Lieu about. So we have this situation. Remember the block calls, right?

So Don Jr. receive this block calls right around the time he`s planning with Trump Tower meeting. The Intelligence Committee run by Republicans didn`t want to unmask them. We should let a lot of people to think that they were incriminating. There`s reporting yesterday that these were not from -- coming his father but family friends. There`s about whether they were involved. But there`s this like celebratory air right from the President and Don Jr. like aha, see there was nothing there.

And my response is, we didn`t have to play this stupid game literally a year ago. All that matters is the evidence. I don`t care if it`s inculpatory or exculpatory. Like the point is to make the evidence public and that is something that we still as of now don`t have.

BASSIN: Ben Wittes has a really interesting piece on Lawfare this week where he found a letter as the result of the unearthing of the so-called Watergate roadmap that our organization worked with Ben`s Lawfare group to get out. And this is a road map that was the gathering of evidence that the Watergate special prosecutor had assembled to the grand jury. That set of evidence was sent by the grand jury to the House Judiciary Committee.

And Ben noticed something in these documents which was that the Chairman of the House Judiciary Committee at the time Frank Rodino sent a letter to the grand jury requesting the evidence that it had for the purposes of getting that evidence in the hands of the one body that could do something with it which was the House of Representatives.

I think at this point in time Chairman Nadler should be looking at that precedent thinking about how do we get this into Congress. And here`s why, because at the end of the day public hearings are where they`re going to be necessary to restore the American people`s faith in our system. For ten years after Watergate, the American people`s faith that government was doing the right thing plummeted and didn`t recover until the mid-80s and it didn`t recover all the way. If we`re ever going to recover from this, it`s going to be through an open and transparent process.

HAYES: Ian Bassin and Glen Kirchner, thank you both. Still to come, the growing calls for the governor of Virginia to resign after a shockingly racist yearbook photo services. Next, the Trump administration hands Russia another victory today announcing America`s withdrawal from the nuclear arms treaty. Why the move could be dangerous and destabilizing after these two minutes.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The President of the United States and the General Secretary of the Communist Party of the Soviet Union signed the INF Treaty.

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: Today, I for the United States and the General Secretary for the Soviet Union have signed the first agreement ever to eliminate an entire class of the U.S. and Soviet nuclear weapons.

(END VIDEO CLIP)

HAYES: When it was signed in 1987, the Intermediate-Range Nuclear Forces Treaty was a historic breakthrough in U.S.-Soviet relations. A mutual ban on medium-range missiles which helped usher in the end of the Cold War. Years later, under President Vladimir Putin, Russia began to chafe under the INF treaty confronting the Bush administration with the possibility of withdrawing.

This as evidence began to mount that Russia may be cheating. It was until 2014 that for the first time the Obama administration formally called out Russia for testing banned missiles in violation of the treaty. John Bolton along with war crimes apologist and justifier (INAUDIBLE) took that opportunity to recommend scrapping the treaty altogether calling it obsolete even before Russia cheated.

Last year when the Trump administration said it was considering taking that advice, Reagan`s former National Security Advisor Colin Powell explained why it was a bad idea.

(BEGIN VIDEO CLIP)

COLIN POWELL, FORMER NATIONAL SECURITY ADVISOR, UNITED STATES: There are a lot of people now saying well, let`s -- we got to get out of this treaty, we got to get out of that treaty, bad, terrible mistakes which will regret because it don`t make sense.

Well, the Soviets -- the Soviet is cheating on the INF treaty so let`s get out of the INF treaty. Oh good, you do that and guess what, the Soviets aren`t cheating anymore because there`s no treaty. It doesn`t make any sense.

(END VIDEO CLIP)

HAYES: Today, the Trump administration announced that it is now following through on its threat to withdraw from INF treaty and Bolton and Putin finally got their wish. For reaction on the announcement, I`m joined by Democratic Senator Jack Reed of Rhode Island. He`s the ranking member of the Senate Armed Services Committee. Senator my sense is that you oppose this move why?

SEN. JACK REED (D), RHODE ISLAND: It`s a mistake, Chris. It`s a mistake for several reasons. First, as you suggest, it will give Russia the ability to argue that they weren`t wrong when in fact they were violating treaty. It`s the United States who withdrew from the treaty. It`s the United States who`s the one that`s disrupted arms control in the world.

And then the other reason it`s I think a mistake is that we have to negotiate hopefully an extension of the New START Treaty which expires in early 2021. And if the attitude of the administration is we don`t like arms control treaties and if that carries over to the New START, we could be for the first time in 50 years or so not having any type of significant formal controls over nuclear weapons or nuclear warheads and that encourages not only an arms race between the United States and Russia and now even China but also proliferation of other countries that have nuclear devices.

So for many reasons, this is a mistake most particularly because it could ignite an arms race and it could again justify what the Russians have done which is, in fact, they`ve violated this treaty.

HAYES: Do you think that the Kremlin, the Russians wanted out of the treaty?

REED: I think they behaved in a way consciously that they knew that they were violating the treaty but what they really wanted was essentially what the Trump Administration delivered today. They wanted us to break the treaty or to relieve the treaty so they could say, no, no, no, all of that was disinformation by the United States. We were compliant. They`re the ones that formally left the treaty.

And you know, if you look at the behavior the administration, leaving the JCPOA, the treaty with the Iranians, leaving this treaty, that does not go unnoticed by the world community, both our allies in Europe who are very nervous, but also people who are antagonist the United States about they have more liberty to sort of disregard treaties or to be more provocative in their behavior.

HAYES: Former Senator Sam Nunn and the former Energy Secretary Ernest Moniz wrote something I thought was quite interesting I wanted to get your thoughts on it. They say that getting to safer and more stable ground with Russia requires urgent action to establish a working bridge between Trump Administration in Congress on Russia and nuclear policy. A new bipartisan liaison group of House and Senate leaders and committee chairs to work with senior administration officials designated by the president.

The idea here is the President essentially has to be ignored, moved aside, or worked around to have effective American diplomacy in U.S. policy. What do you think of that?

REED: I think it`s a national idea there by Senator Nunn who`s been a leader in the arms control movement for decades along with people like the former Secretary of Defense, his colleague. All of that is I think a positive development. Every administration that I can recall has even in the depths of the cold war understood the necessity to have a serious dialogue with the Russians and or the Soviets about nuclear weapons, because if there was not this serious dialogue it was not progress there was the danger of not only proliferation but a potential apocalyptic event because weapons were out of control or one country misunderstood the intentions of another country.

So what Sam is suggesting along with as I`ve mentioned former Secretary of Defense Bill Perry is that there be a serious negotiation has to be led by the President and his team to engage the Russians seriously about arms control as President Reagan did with Gorbachev as you showed in the first part of the segment.

HAYES: All right, Senator Jack Reed, thank you for making time tonight.

REED: Thanks, Chris.

HAYES: Still to come, there are growing calls for Virginia`s governor to resign after the discovery of a racist yearbook picture. We`re going to talk about that next.

(COMMERCIAL BREAK)

HAYES: Political turmoil in the State of Virginia tonight after this 1984 surfaced of the current Governor Ralph Northam in his med school yearbook page showing a man in black face posing next to a person in a KKK robe. Beneath the photo it reads, there are more drunks and old doctors in this world so I think I`ll have another beer.

The image was first posted by right-wing Web site called Big League Politics. NBC News has since confirmed the authenticity of the yearbook, the Chairman of the Republican Party of Virginia said in a statement that Northam "should resign immediately." The governor himself just released his own statement tonight acknowledging it was him in the yearbook though which one we don`t know wearing a "costume" that is clearly racist and offensive.

He added, I am deeply sorry if the decision I made to appear as I did in this photo and for the hurt that decision caused that and now this behavior is not in keeping with who I am today. I recognize it will take time and serious effort to heal the damage this conduct has caused. I`m ready to do that important work. The first step is to offer my sincerest apology and to my state -- to state my absolute commitment to living up to the expectations Virginians set for me when they elected me to be their governor.

I`m joined now by Democratic strategist Aisha Moody Mills, Fellow of the Institute of Politics at Harvard University, Cristina Beltran Professor of Cultural and Social Analysis at NYU, Author of The Trouble with Unity, and Jelani Cobb Staff Writer for New Yorker, a Professor at Columbia Journalism school. Well, what the hell?

AISHA MOODY MILLS, FELLOW, THE INSTITUTE OF POLITICS AT HARVARD UNIVERSITY: I mean, what all the hell?

HAYES: I mean, I don`t even -- I don`t -- part of the thing that`s so weird about the statement is he doesn`t say which one it is although I think he`s the one in the black face. He`s tall. Like there`s no context, there`s no nothing. He`s 25 years old.

MILLS: Right. He`s a grown man. And I`m so tired of this narrative that`s going on Twitter right now that oh he was just a boy. No he was not. He was at med school. He was a grown man.

HAYES: Medical school yearbook.

MILLS: It`s ridiculous. White boys, white men always pull this, oh it was just a kid act right? But how many actual teenage African-American boys are being slaughtered and being thrown in jail for things that are far you know less that they should just be kind of like getting a pass at because they`re actually children. But then you know, to have this guy say oh, I was just a boy or but you know, have people say he was just a boy.

HAYES: Yes. He does not say that. I should be clear. He was -- he was not. He was 25. We`re not - he wasn`t 15. It`s not his high school yearbook. Also, Cristina, it`s not 1954, it`s 1984. I mean --

CRISTINA BELTRAN, PROFESSOR OF CULTURAL AND SOCIAL ANALYSIS, NEW YORK UNIVERSITY: 1984. So yes -- no, Jesse Jackson ran for the first time as president in 1984 right? So it makes -- but here`s the thing too. I mean, I wasn`t particularly shocked but I was like OK, like I think if you`re a Southern man of a certain age and you grew up with the south, you know, your relationship to white supremacy is going to be there.

COBB: It`s the default.

BELTRAN: It`s the default.

HAYES: Particularly if you come through Virginia Military Institute, which is founded, literally...

BELTRAN: So, am I disappoint? Is it distressing? Sure it is. But I also think at the end of the day I care about your policies more than the stupid crap you did when you were younger, so I really think one real issue here is should he resign, or would this mean that -- like if I were a civil rights group right now, I would be at his door, because they have enormous political leverage.

So, this could be a political opportunity. I don`t need to see him suffer personally. I don`t really care about the kind of self-flagellation performance.

I would like to see civil rights groups in Virginia and political...

HAYES: Go big with your asks.

BELTRAN: In Virginia to say prove to us you`re committed to something and do something...

COBB: Look, look, look, I mean, FDR in one of his elections, he`s coming up, and there`s -- one of his aides shoves a black porter in Penn Station. And the administration goes into full freak-out because they think this is going to get reported, like all the black people are not going to come out and vote and so on, and they`re calling up the black cabinet members, they`re trying to find Mary McCloud McThune (ph), they`re like in full freak-out mode. And little do they know that she`s hosting a card party with all of the black cabinet. And they`re sitting around going like, on the phone, like what should we ask for.

And they get a federal judge out of this, they get person promoted to general like these kinds of things and saying like look I don`t think -- it`s disturbing. One, it is very disturbing. I don`t think that there`s any excuse of youth that can excuse it.

But at the same time, just a pure pragmatism of politics and saying if this person is not doing this at this moment, this is 35 years ago, or whoever long it was, what do we get out of this?

MOODY-MILLS: I totally disagree. And I am generally the pragmatic progressive like at all times. Forget pragmatism, I think we need principle right now. And you know what we can get in the -- forget a negotiation of maybe he`ll pass something. What we can get is we can get a black governor...

(CROSSTALK)

MOODY-MILLS: Who is standing and waiting in the wings who was, in fact, done dirty on the campaign trail when he was removed from northern squires.

So, I think that, you know, we need to look at Virginia. And also look at the implications for 2020. Virginia is a state that has a significant African-American population that going into this Democratic primary is really going to matter.

And right now we`ve got a guy who is now known to be, you know, a racist maybe in his youth, whatever that is, and we can actually have Justin Fairfax as the governor and that changes the dynamic of how things play out.

HAYES: Let me just add -- so it has already sort of spilled over to the presidential campaign. As all things like this, Kamala Harris has called on him to resign. This is her tweet. She says, "leaders are called to a higher standard. The governor of Virginia should step aside."

Julian Castro -- wait, I want to get your reaction to that, but that loud grunt -- Julian Castro was the first -- the first presidential candidate to come saying he had to resign. The NCAACP, I think, MoveOn, Priorities USA, Daily Kos, all these -- so, there is a brewing push for him to resign. What...

COBB: Well, I mean, OK, look the Kamala Harris story is complicated and requires a lot of nuance and so on. But having said that, she might not be in the best position to say we need to come down hard on people for things they did 20 years ago, like that`s exactly what people were talking about with her criminal justice record.

HAYES: But those are different things.

COBB: But even if they are different, we`re still saying the question -- I`m not saying that this is the equivalent, but we`re talking about people saying we`re going to go completely hard. We`re going to say there`s really no gap about the (inaudible) stuff.

HAYES: OK, but let me just -- here is my feeling on this, like there are feelings on this. Like are things that are just disqualifying -- no disqualifying -- you know, like -- and I -- god -- grace, forgiveness, all those things. And honestly, I don`t know the guy at all. I don`t -- you know, he`s been a perfectly fine governor, I think, so far. But that`s disqualifying.

And, you know, it`s not -- it`s not like a costume thing that he -- like, you put that in your yearbook is clear what the message is when you`re standing next to a guy in a white hood. That`s disqualifying. And, sorry, it happened 30 years ago, you don`t get to be in politics now.

COBB: Yeah, I think...

BELTRAN: But he went into a tone. He could have brought this up when he was...

COBB: I was going to say that.

HAYES: that is the other...

(CROSSTALK)

BELTRAN: Guys, I did this. Let`s talk about it. It`s an opportunity...

HAYES: Completely agree.

MOODY-MILLS: Acknowledge this early on to say this was a failure I made and this is what it would mean for me to be a new kind of person.

COBB: I don`t think the fact he did it is disqualifying, but I will say the fact that you haven`t proactively brought it up...

HAYES: That`s right, yes.

COBB: This is a horrible thing, like that is the best argument for saying it is disqualifying.

HAYES: I always think there is a real -- you know, it`s weird I`m watching conservatives and Republicans be like -- doing the sort of meta commentary tonight, which is like, well, why aren`t they -- you know, they went after Kavanaugh`s yearbook and a -- and everyone -- a lot of people are calling for his head. I mean, they`re going to ask for him to resign.

But it`s also in the context of this -- of the presidential race, right. We have -- you know, race was a central issue in that race in Virginia, right. It was the MS-13, Ed Gillespie thing while Cory Stewart (ph) was running around from Senate.

COBB: The Charlottesville stuff.

HAYES: There was Charlottesville.

BELTRAN: The state was riven -- and, well, the country is riven in this.

But I was going to say I think that the other thing that -- I guess my push back on my feelings of what do you want to do with this is I do worry about the fact that we fetishize particular type of acts of racism, and the kind of systemic, ongoing, structural ways in which people are killed and their lives are destroyed gets sort of not thought through enough. And so like I think the question of the Democratic Party, and you are raising the issue with potentially with Harris, the question of like what is the party`s relationship to Wall Street, to the relationship to capitalism, to the last 30-year efforts to militarize the border? Like those worry me much more than somebody wearing a sombrero.

HAYES: OK, but...

BELTRAN: It`s not an either/or decision, but I just want to make sure that we have a nuanced, serious discussion about the real issues. This is a real issue, though.

HAYES: Yeah, that`s my point...

BELTRAN: It is real, it`s white supremacy. It`s visible. But I also don`t want it to become the way we just fetishize the photo and we don`t look at the policies.

HAYES: Let me also just step back and say to me the most upsetting thing about that photo is that photo sat there -- this is the doctor`s -- the future doctors of the state of Virginia. This is the milieu in which that photo sits there, right. You think about the life world wrapped around that photo. All of the eyes that went through the yearbook, they`re like oh, yeah, it`s great.

COBB: Northam...

HAYES: What a cut up.

(LAUGHTER)

BELTRAN: Hilarious. That`s good.

HAYES: And that`s the -- to me more shocking part.

COBB: Can I just say how many oppo (ph) research people fell down on the job? Like the yearbook photo is the first thing that you would look at.

BELTRAN: Tom Perriello must be so frustrated right now, because he ran a great race in that primary and like...

HAYES: He did run a great race in that primary.

BELTRAN: Great race, and the salt of the Earth great guy.

And this who ended up winning instead of him.

HAYES: And also Ed Gillespie...

(CROSSTALK)

COBB: I got beat up for my Confederate stuff. I never did this.

HAYES: That`s the other thing. Can you imagine the plot twist in that race -- in which -- remember that race was -- that race was Gillespie who is this sort of establishment lobbyist dude who went all in on Trumpism, MS13 all down the stretch, Confederate stuff. Cory Stewart is running on the other ticket. Could you imagine if a week before the election the plot twist was like oh, the Democrat is in blackface.

COBB: That`s when you pull the Barack Obama perfect union speech and you stand up and you...

HAYES: I don`t think -- I don`t think Mr. Northam has that...

COBB: Yeah, but you still lose, let`s be very clear about this.

BELTRAN: But if this can be an educational moment at all, I would ask a lot of people who are in families in the south, but everywhere, look at -- talk to your grandparents.

HAYES: Totally.

BELTRAN: Talk about the pervasiveness of this kind of racism and look in the archives of your parents and their yearbook shenanigans, you`re going to see that this is a story of the way America enjoys playing race and doing race and talk about what that means not just that he`s this evil person we can demonize, but like look at the things that...

COBBS: Grandparents, like siblings. This happens every Halloween. It was like every university is like please don`t do the blackface thing. Please don`t do the blackface thing.

MOODY-MILLS: The reason why I`m really cautious about that argument, which I completely agree with Christina, but the reason why I`m cautious it is because I`m watching play out right now Roger Stone and the whole conversation around whether there was excessive force, because this horrific criminal, this man who is criminal, he is a traitor, had a bunch of people show up at his house and let him leave like in pretty much a calm manner, whereas African-American people do not face that kind of sweet and kind ushering out of their homes when they somehow come in contact with this injust (ph) criminal justice system.

And so that kind of false equivocation...

(CROSSTALK)

MOODY-MILLS: Right, so I hate to kind of look at him and say, oh, well, this is an opportunity for us to like have a bigger conversation when the fact is he needs to resign, we need to forget about him, move on, let Justin do his thing.

HAYES: Well, I think it`s going to be -- I mean, it will be very interesting to see. I mean, the problem from a purely sort of real politic perspective is if the guy hangs on, it`s a question for every candidate, every time you go through it, do you appear on stage with him?

I think what`s very clear is the statement ain`t going to do it. Like whatever you think you should say or do, you got to come out -- you`ve got to face the music, you`ve got to explain what the heck was going through your mind at 25-years -- like all of that.

COBB: Now is the time you give speech about reparations.

(LAUGHTER)

HAYES: I`m going to stay on as governor and I`m announcing our new reparations project.

MOODY-MILLS: And he can resign and the new guy can take that on.

BELTRAN: You guys should (inaudible) already planned.

HAYES: Let me ask you this. I have you here and we were going to talk about this earlier and then it got bumped. Cory Booker has now entered the 2020 race. He is the latest top tier candidate. People widely assumed he would run. He`s got a fascinating bio. He is now the second African- American candidate in the race along with Kamala Harris. As you noted today, there`s only one black senator not running for president in Tim Scott. What do you think Cory Booker?

COBB: So, here is the thing, right. Let say this -- Kamala Harris has like a bonfire. It`s like one thing that everyone is gathered around, and that`s the criminal justice thing and there`s going to have to be a conversation about that. People are going to want to know like where she stands and she there and so on.

Cory Booker has a brush fire. There are lots of in lots of different places. People want to talk about his time in Newark, like what about the attempt to privatize the water supply in Newark? What about the vouchers and the charter school? What about that $100 million that Mark Zuckerberg gave that kind of got lost in the couch cushions? What about the private equity stuff, like what about the big pharma stuff?

Like there are a ton of things. And now they`re saying that he`s really kind of billing himself as a criminal justice reform person, but as you know his documentary with Frontline the police in Newark under Booker, Booker`s tenure. That was when the DOJ found systemic problems with excessive use of force there and the ACLU did a report finding the same.

And so with Booker, there is this big -- especially in a primary where there`s going to be a lot of attention from progressives, there are a lot of things that people are going to raise about him.

BELTRAN: And one thing that`s really important about all of this is that I think a lot of people on the left are going to be like, oh my god, there`s such anxiety about contestation and conflict in the party, because there is such a fear that we have to be united against Trump, and I agree. I will work for a pickle if underneath it says Democrat. I mean, we all agree that defeating Trump is critical, but this is also an opportunity -- elections are about political education and it`s an opportunity for us to actually have a real conversation about the direction of the Democratic Party where we`ve been, what`s happened to the neoliberal wing of the party. Do we want -- what do we want to be as a party, what is our relationship to Wall Street, what is our relationship to criminal justice, and people like Booker and Harris need to be able to make sense of here`s where I was and why...

HAYES: Well, everyone does.

BELTRAN: ...they all do. Here`s where I was and why, and here`s where we need to go going forward. And we need to have a reckoning with that. And that`s an actually grownup thing that political parties do, which is have important adult debates about important issues.

We can`t just pretend this stuff isn`t happening and have a kind of unity patina. My book is called "The Trouble With Unity." We need have an agonisic, democratic, public debate about the things we want the party to be.

HAYES: All right, Aisha Moody-Mills, Christina Beltran, Jelani Cobb, thank you for making time on this Friday night. Have a great weekend.

Coming up next, I will talk with the next head of the Democratic Governor`s Association, New Jerseys Phil Murphy, about the picture. The state`s newest presidential hopeful and New Jersey`s fight for 15. Don`t go anywhere.

(COMMERCIAL BREAK)

HAYES: Yesterday, we got the latest tax filing disclosures of the legal fund that`s been set up for allies of the president who are involved in the Russia investigation.

There is precisely one donor in the last quarter of 2018, a couple who gave $500,000, Miriam and Sheldon Adelson. That is not surprising, the casino magnate and his wife are the biggest Republican donors out there, giving $20 million to Trump`s presidential campaign in 2016. They wrote another $30 million check to a House GOP super PAC to try to keep a GOP majority in the House soon after meeting with then speaker Paul Ryan, and Allison`s total donation to conservative candidates or groups in 2018 alone totaled $113 million.

Now, that didn`t entirely work out, but still, look at the return on their investment in the Republican Party. I would argue it might be the best money anyone has ever spent.

First, in strict dollar terms, Adelson got an enormous tax cut. His company, Las Vegas Sands, reported a $700 million tax cut. And the estate tax cut provisions mean that Adelson`s heirs will see millions and millions more.

On policy, Adelson has long been an advocate of moving the U.S. embassy in Israel to Jerusalem, a provocative move that other administration, Republican and Democrat, have declined to pursue. But the Trump White House went ahead and did it and Sheldon Adelson was there at the opening ceremony right there in the front row.

Miriam Adelson, for her part, even got the Medal of Freedom, the highest civilian honor that you can get at a White House ceremony along with the likes of Elvis Presley, Babe Ruth, and Antonin Scalia. Those were all the public returns on the investment of the Adelsons, but there are other benefits to knowing the right people. A few weeks ago the Department of Justice`s office of legal counsel issued a ruling on the department`s interpretation of a law that reversed a Obama-era opinion that could end up making things much, much harder for online gambling.

You`ll never guess who`s been pushing for that exact change? In the words The Washington Post, it`s restriction long sought by GOP mega-donor Sheldon Adelson who controls one of the world`s largest casino empires.

Honestly, given all the Adelson`s have gotten out of the Trump administration and the Republican Party, it`s kind of a wonder they don`t pony up more. Something tells me that the president and his inner circle find themselves in even more legal trouble with mounting legal bills, Sheldon and Miriam will be there to help.

(COMMERCIAL BREAK)

HAYES: There are growing calls for the resignation of Virginia`s Democratic governor after deeply offensive racist yearbook photo came to light. The photograph, printed in Ralph Northam`s medical school yearbook showed two people standing side by side, one wearing blackface, one wearing a KKK hood and robe. Northam has confirmed he is in that photo, although he did not specify which one is him.

Tonight, the NAACP and MoveOn.org, the head of Priorities USA and presidential candidates Kamala Harris and Julian Castro, are all saying Northam should step down. The Virginia House Democratic Caucus just scheduled a conference call to discuss the governor`s racist yearbook photo at 10:00 p.m. Eastern tonight.

Just moments ago, the governor himself released this video on Twitter.

(BEGIN VIDEO CLIP)

GOV. RALPH NORTHAM, (D) VIRGINIA: My fellow Virginians, earlier today I released a statement apologizing for behavior in my past that falls far short of the standard you set for me when you elected me to be your governor. I believe you deserve to hear directly from me. That photo and the racist and offensive attitudes it represents does not reflect that person I am today or the way that I have conducted myself as a soldier, a doctor, and a public servant.

I am deeply sorry. I cannot change the decisions I made, nor can I undo the harm my behavior caused then and today, but I accept responsibility for my past actions, and I am ready to do the hard work of regaining your trust.

I have spent the past year as your governor fighting for a Virginia that works better for all people. I am committed to continuing that fight for the remainder of my term and living up to the expectations you set for me when you elected me to serve. Thank you.

(END VIDEO CLIP)

HAYES: I`m joined tonight by Democratic Governor Phil Murphy of New Jersey who will take over as head of the Democratic Governor`s Association in 2020. Governor, it`s good to have you here.

Governor, it`s good to be here.

GOV. PHIL MURPHY, (D) NEW JERSEY: Nice to be here, Chris.

HAYES: You just had a big policy win in your state on the minimum wage, which I want to talk about. You have a homeless state senator who is running for office, which I also want to talk about.

MURPHY: Absolutely.

HAYES: But you are sitting here where a fellow governor, this has just happened. Do you think the governor of Virginia should resign?

MURPHY: Chris, first of all, let`s say that bad -- unacceptable behavior in 2019 was just as unacceptable in 1984, number one.

Number two, we`re the party of Barack Obama. We`re the party of inclusion. We`ve got a president who wants to divide us. I`m a former member of the National Board of the NAACP. The Ku Klux Klan is a terrorist organization. I don`t see the governor has got any other choice other than to step aside.

HAYES: You do think he has to step aside?

MURPHY: I think he does. I say it with a heavy heart, because I know him and I believe he`s a good man. But this is -- as you said earlier, it`s disqualifying, particularly, particularly at this moment in time and with the division in this country -- Charlottesville, all that we`ve had to go through the past couple of years.

HAYES: I should say that you`re saying that in your personal...

MURPHY: I am.

HAYES: Not as the incoming head of the DGA, or the vice chair as you are.

MURPHY: That is correct.

HAYES: Well, that`s interesting. I`m glad you answered that straightforwardly.

Let me ask you about Cory Booker, who is running for president who you, this is notable, immediately after his announcement, he was -- you put out a statement endorsing him, Menendez put out a statement endorsing him. Why was that an easy call?

MURPHY: I love him a long -- first of all, I love him. And it`s kind of - - I got two -- I speak out of both sides of my mouth, I`ve known him since he was a member of city council in Newark. I think he`s a great leader. He`s a guy who stands for that inclusion we spoke about a minute ago. He really genuinely lives to bring us together. I know his work in Newark. I know his work as a U.S. Senator, a city councilman before.

But I also have to say if I was from the middle of nowhere, if I was I happen to know his work. I know him intimately. I know him personally for a long time, but I`m a huge fan and I would be if he were from somewhere other than New Jersey.

HAYES: You are going to sign, I believe, on Monday a minimum wage increase in your state. It`s going to bring the minimum wage up to $15 eventually.

How long is the phase in?

MURPHY: It`s going to begin in July. We`ll go to $10 in July. It`s right now $8.85. We`ll go to $11 on January 1. And each January 1 until we get there on January 2024 for most workers, $15 an hour.

So, most workers 2024, $15 an hour. How hard a political fight was that?

MURPHY: It was hard, at times frustrating, but we got there. And it`s a game-changer. You know, I grew up working poor, so the -- my aspirational life was to get into the middle class. New Jersey is the quintessential middle class state. But right now if you`re a two income household with two dependents, you`re meaningfully, dramatically, below the poverty line. This will be a game-changer. And by the way $15 isn`t nirvana either, but it`s a great first totem to get to.

HAYES: How much opposition do you -- you know, this -- how much opposition do you get from business groups, from independent businesses, small businesses, things like that?

MURPHY: Low margin retailers, restaurants, small businesses gave us a fair amount of pushback. I think importantly it`s a responsible phase in. And we did that deliberately. We took in and understood some of their concerns.

But there is a lot of myths around minimum wage. And the other places that have started on that path to $15 have proved that.

HAYES: I`m curious about that. You know, Seattle was the first city out there, if I`m not mistaken. I think actually the part around the airport started and then the city itself.

How much does those experiments matter when you`re trying to make the case that you can point to actual things that happen on the ground.

MURPHY: It matters, because the other side, the opposition to raising minimum wage will throw out things like your unemployment rate is going to go up. It affects mostly teenagers. It`s really evenly split between men and women. It doesn`t disproportionately impact communities of color. All of that is false. It`s overwhelmingly folks who are over 20 years old, most with college degrees.

In New Jersey alone, it impacts a million workers and 500,000 kids. It disproportionately will benefit communities of color and women.

So to have the evidence out there is a nice weapon for us to be able to use.

HAYES: You`re a former Wall Street guy.

MURPHY: I am, recovering.

HAYES: Yeah.

You`re a Wall Street guy, you`re a Democratic governor now. You have got unified democratic governor control in New Jersey and an ambitious agenda. How do you think about your time in Wall Street, what you learned there, where the Democratic Party is at right now?

MURPHY: I think the most important chapter for me was growing up with nothing. So I`ve been a lifelong -- I`m a Kennedy Democrat. I was born in Boston. Ii probably became -- and I worked as a banker around the world so I have got a perspective, not just from the U.S. peace, but living and working in Europe and in Asia. I`ve seen the good and bad, you know, I learned how to manage big organizations and that certainly helps me as a governor. But I`ve learned that while capitalism is still in my humble opinion, the right model, it`s got problems. It`s got -- we have to temper it. We have to manage it aggressively and if we don`t, it creates too many inequities in New Jersey. The New Jersey I inherited had those inequities.

HAYES: All right, governor. Phil Murphy of New Jersey, thank you so much for your time and for your candidness. I really do appreciate it.

MURPHY: Thank you.

HAYES: That is ALL IN for this evening. "THE RACHEL MADDOW SHOW" starts right now with Joy Reid in for Rachel. Good evening, Joy.

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