Hardball with Chris Matthews, Transcript 12/20/2016

Guests: David Cay Johnston, Gregory Meeks, Chris Sgro, Yashar Ali

Show: HARDBALL Date: December 20, 2016 Guest: David Cay Johnston, Gregory Meeks, Chris Sgro, Yashar Ali

JOY REID, GUEST HOST: First family feud.

Let`s play HARDBALL.

Good evening. I`m Joy Reid in New York, in tonight for Chris Matthews.

Once upon a time, Bill Clinton and Donald Trump were friends, or at least friendly. They golfed together, Trump donated money to the Clinton Foundation, he defended Bill Clinton in the press. Bill and Hillary were even guests at Trump`s third wedding to Melania.

Then came an election where Donald Trump attacked Hillary Clinton as crooked, dishonest, unstable, unhinged, a criminal, a nasty woman, and, oh, yes, the devil. He also paraded out a series of women who had accused Bill Clinton of abuse in an attempt to humiliate him and his wife.

Yesterday, it was reported that Donald Trump and Bill Clinton spoke by phone the day after the election. Clinton was reportedly surprised that Trump acted cordial on the call, like it was 15 years ago. For Clinton, raw feelings remain. In reference to Trump, he recently told a local newspaper in Westchester County, "He doesn`t know much. One thing he does know is how to get angry white men to vote for him."

This morning, Trump did what Trump does, he hit back, tweeting, "Bill Clinton stated that I called him after the election. Wrong! He called me with a very nice congratulations. He doesn`t know much, especially how to get people, even with an unlimited budget, out to vote in the vital swing states and more. They focused on the wrong states." Later today, Clinton conceded he was the one who called Trump after the election, not the other way around.

The question remains, why is Donald Trump spending his first full day after officially becoming president-elect fighting with Bill Clinton on Twitter?

David Cay Johnston is the author of "The Making of Donald Trump," Robert Costa is a national political reporter for "The Washington Post" and an MSNBC political analyst, and Michael Steele is the former chairman of the Republican National Committee and an MSNBC political analyst.

All right, David Cay Johnston, I go to you first on this because you`ve been writing about Trump for long time? Why does Trump Trump? I feel like the question sorts of answers itself, but why does he -- why can`t he stop doing this?

DAVID CAY JOHNSTON, AUTHOR, "THE MAKING OF DONALD TRUMP": Well, because to Donald, other people are simply items and objects. They`re not human beings. Donald is entirely transactional, and whatever gets Donald what he wants, he will do. There`s no moral core to Donald Trump. So you know, not paying bills, attacking somebody as terrible whom you said just recently was wonderful -- it doesn`t have any meaning to who Donald Trump is inside.

And he`s done this throughout his whole life. You can be his friend today and you can be the worst person in the world tomorrow and you can be his friend again next week. It depends on what`s in his interest at the moment.

REID: And Robert, you know, it also seems to depend on who`s the last person to talk to him and who`s being nice to him in the moment, right? So he thought nothing well of Barack Obama until Barack Obama was actually nice to him. and then, all of a sudden, he thought Barack Obama was great.

Inside of Trump world, you know, there`s the rumors that there are two kind of camps. There`s Bannon world, which still shocks me that someone like Bannon could be near the White House, but he is, and Pence world. Do either of those camps feel concerned about Donald Trump`s inability to control himself?

ROBERT COSTA, "WASHINGTON POST," MSNBC POLITICAL ANALYST: For now, the relationship between the Bannon camp and the Priebus camp, the populists and the mainstream, seems to be pretty functional, based on my reporting that they`re both contributing to discussions behind the scenes about the cabinet picks.

But that dynamic will certainly be challenged early next year once Trump assumes office and he has to deal with governing and not just picking personnel.

REID: But are they worried that he can`t stop tweeting at people and getting into Twitter beefs?

COSTA: One of the reasons another key player, Vice President-elect Mike Pence, is well regarded within Trump`s circle is because he`s not someone who pushes Trump when it comes to the president-elect`s behavior. And one understanding, sometimes implicit of those around Trump, is you do not push the president-elect to change how he uses social media. Trump believes that`s how he communicates with his base, and even if it`s erratic or against the norms, he`s unwilling to stop doing so.

REID: Yes, clearly. Michael Steele, so in terms of the Republican, which now has complete control of the government, I think Paul Ryan assumes that means that it`s going to be a field day for Paul Ryan.

Who do you think ends up with more control over the agenda, Paul Ryan or Donald Trump, or have they now fused their agendas and both want to privatize Medicare?

MICHAEL STEELE, FMR. RNC CHAIR, MSNBC POLITICAL ANALYST: Well, I think Robert`s got his finger on it through his reporting, that it is a battle to come. Everybody is sort of kumbaya around this or that appointment, which in the long and short run really doesn`t mean that much. What it really boils down to is the policy initiatives.

So if you`re going to throw a trillion dollars on the table for infrastructure, is Paul Ryan going to sign off on that? If Paul Ryan says, Look, we do want to address Medicare and Medicaid, and the president doesn`t, does the West Wing balk at that? That`s where the bottle lines are going to be drawn.

And this -- whether it`s the Priebus camp or the Bannon camp, however you want to identify them, the reality of it is, the president`s going to have to make some really tough early decisions.

And the question then becomes, yes, you have this team of rivals sort of milieu that you`ve created around you. That may work in business. In government, I`m really curious to see if that works because it`s so personal, it`s so much about turf, and it`s so much about a lot of things that businessmen don`t waste their time on that politicians do, that you wonder if this administration starts hemorrhaging early, or do they find that smooth, slick space that they can then move through some big pieces of legislation right out of the box?

So that, I think, Joy, is going to be one of the early tests for Donald Trump and his leadership style.

REID: Well, I think since the trillion-dollar supposed infrastructure bill is mostly -- is tax cuts, so I think that`ll probably be -- something Paul Ryan will like.

Well, meanwhile today, there`s a report from the Center for Public Integrity that a Texas charity is offering access to the president-elect in return for a sizable donation. According to the report, Trump`s two sons, Donald, Jr., and Eric, are listed among the charity`s directors.

A brochure for the event on inauguration weekend in Washington lists some of the benefits that donors get in exchange for $1 million. They include a "private reception and photo opportunity for 16 guests with President Donald J. Trump and a multi-day hunting and/or fishing excursion for four guests with Donald Trump, Jr., and/or Eric Trump and team," unquote.

In a statement this afternoon, a spokesman for -- a spokesperson for the Trump transition said, quote, "The opening day event and details that have been reported are merely initial concerns that have not been approved or pursued by the Trump family," and Trump`s sons, quote, "are not involved in any capacity."

Meanwhile, a spokesperson for the event says the initial brochure was a, quote, "work in progress." A new brochure given to NBC today omits any mention of meeting Trump or his sons.

Well, Robert Costa, "The Wall Street Journal" got ahold of, and NBC News did, as well, the actual filing for the supposed foundation, the charity that was filed on December 14th, and Donald and Eric Trump are listed on it as directors.

Is there any conceivable way that their two friends or colleagues could have listed them as directors of this foundation without them having any idea?

COSTA: There`s no doubt, based on our reporting here at "The Washington Post," that the Trump family, specifically the sons, are involved with the charity, supporters of the charity, associated with the charity. The question that`s in contention right now from the Trump transition is whether they had any role in setting up this kind of charitable donation for access arrangement. There`s been that denial that`s been issued.

But it`s one of these murky territories the Trump organization and especially the family is encountering during this transition period, moving from the private to the public sector. They`re going to probably need a lawyer with them each and every step of the way.

REID: But David Cay Johnston, you know, them just saying it isn`t true is not evidence that it isn`t true. The only facts that we have on the table is the filing for the foundation with those two Trump sons name on it. So I don`t understand how them just saying, Well, we didn`t do it, gets them out of hot water here.

JOHNSTON: This is a tactic you`re going to see throughout the Trump presidency. When I saw this initially, I thought, oh, this is from "The Onion." It can`t be true. Even the Trumps are not that crass. And then I ran down the documents about it.

What you`re seeing here now is, Well, we were just discussing this. Well, why were you even discussing something like that? Particularly when Donald Trump complained about what he called pay-for-play. This is blatantly pay- for-play, and it is part of Donald Trump`s utter contempt that he expressed throughout the campaign for constitutional government.

You know, if you could get Donald Trump on your show and ask him, Well, what does the second Article of The constitution say, he wouldn`t be able to tell you.

REID: Yes. Well, throughout the campaign, to your very point, David Cay Johnston, Donald Trump did attack the Clinton Foundation, without evidence of such, for supposedly selling access to Hillary Clinton at the State Department.

JOHNSTON: Right.

REID: Let`s watch him do it.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: The veil was pulled back on a vast criminal enterprise run out of the State Department by Hillary Clinton! More than half of the meetings Hillary Clinton took as secretary of state with people outside government were Clinton Foundation donors.

Favors and access were granted to those who wrote checks. She put the secretary of state up for sale.

Hillary is the one who engaged in a corrupt pay-for-play scheme at the State Department.

We`re going to end government corruption.

Hillary Clinton ran the State Department like a failed leader in a third world country. She sold favors and access in exchange for cash!

(END VIDEO CLIP)

REID: Michael Steele, you know, if irony still has a meaning, that was it.

(LAUGHTER)

REID: I can`t -- it`s hard to believe that Donald Trump could say that a couple months ago, and then literally have these things happening. Are there any consequences for anything anymore? Does reality exist anymore?

STEELE: No. I think this is going to be, to the points that were already made, the new reality for Washington and for a lot of people who track this stuff, particularly in the press. The press corps is going to have a field day writing about this stuff, but the -- how it resonates with voters is really going to be the test of time.

Does it accumulate in such a way that people go, You know, we really do have a problem with this? You said at one point this was what Hillary Clinton did, but you`re now doing the exact same thing or something very similar. And it doesn`t right now seem to matter to a lot of people.

But there are some big red flags here. I think Robert Costa had it right that, you know, they`re going to need a lot of lawyers to deal with this. And it would not surprise me if you see someone bring some type of action to force some of this to a head for the Congress or somebody to respond because I don`t see how you can set up these types of operations long-term, Joy, and not have a consequence come from them, whether it`s a global one, as we`ve seen potentially with Russia, for example, or something closer to home, like with the foundation.

REID: Yes, you know, just the perception is out there among foreign leaders that they can buy access to the White House by giving to the Trump`s sons` foundation. It is really troubling.

One of the other things I find incredibly troubling, Donald Trump`s incoming national security adviser, Michael Flynn -- he`s been a lightning rod already for his past comments about Islam and his affinity for Vladimir Putin and conspiracy theories.

Today "The New York Times" reports he met with a right-wing group from -- a far-right group from Austria. According to "The Times," the leader of the Austrian far-right Freedom Party visited General Flynn a few weeks ago inside Trump Tower in New York. The Freedom Party was founded in the 1950s by former Nazis.

Robert Costa, you know, we`ve talked about this before. The Bannon wing of -- what is now the Bannon wing of the Republican Party and its affinity for this sort of ethno-nationalism, for these far-right European parties that are essentially white Christian nationalist parties. Now you have that being brought right into Trump Tower.

At some point, is there a reckoning for people like Bannon and Flynn, particularly for Flynn?

COSTA: Throughout the campaign, we saw Trump and Bannon to an extent associate the Trump campaign with this global populism, the visits from Nigel Farage during and after the campaign to Trump Tower, now with Flynn meeting with another far-right populist party in Europe and Austria.

You see the Trump campaign and the Trump orbit really try to engage with that world. But there are consequences, especially if you`re moving into elected office, into the presidency, to associate not just with foreign leaders and heads of state, but heads of foreign parties that aren`t really in power, and it could have very complicated, even controversial associations.

It`s a territory many incoming presidents do not wade into, but Trump, just because of who he is and who Flynn is, they seem to be willing to do it.

REID: Yes, parties founded by Nazis are a little bit more than controversial. We`ll see if that ever -- there`s any consequences for that.

Thank you very much, David Cay Johnston, Robert Costa and Michael Steele.

And coming up -- the day after three attacks in Europe, we ask, What does it mean for the U.S.? And how will Donald Trump as president deal with the new global threat?

Then later, the North Carolina General Assembly has been called into session tomorrow to possibly repeal the so-called bathroom bill. How are the Republicans there prepared -- I mean, how far are the Republicans there prepared to go to cling to power?

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

REID: President Barack Obama today took a preemptive step to protect the environment and potentially thwart the pro-drilling incoming administration, issuing a ban on all new oil and gas drilling in U.S. federal waters anywhere between the Atlantic Ocean and the Chesapeake Bay. The president has designated those areas indefinitely off-limits to future leasing.

Now, this is a joint action between the U.S. and Canada as Canadian prime minister Justin Trudeau is also placing a ban on new leases in Canada`s Arctic waters.

To get around the potential of Donald Trump simply reversing his executive order, President Obama invoked a 1953 law, the Outer Continental Shelf Lands Act, that could give his order much more staying power. Still, the issue is likely to wind up in federal court. Stay tuned.

We`ll be right back.

(COMMERCIAL BREAK)

REID: Welcome back to HARDBALL. Late today, the media arm of ISIS claimed responsibility for yesterday`s terrorist attack in Berlin, which left 12 people dead. While no proof was provided, the city remains on high alert as German authorities continue to search for a suspect.

Meanwhile in Turkey, Russian and Turkish officials have accused U.S.-based Turkish cleric Fethulla Gulen of masterminding the assassination of the Russian ambassador in Turkey.

Last night, Donald Trump, on his first full day as president-elect, swiftly condemned those incidents, plus a third in Zurich, as, quote, "terrorist attacks."

He also issued a longer statement accusing ISIS of orchestrating Berlin`s attack, saying, quote, "ISIS and other Islamist terrorists continually slaughter Christians in their communities and places of worship as part of their global jihad. These terrorists and their regional and worldwide networks must be eradicated from the face of the earth, a mission we will carry out with all freedom-loving partners."

Sean Spicer, Trump`s transition spokesman, echoed Trump`s rhetoric.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: With the new administration, how will the response to terror strikes like this change?

SEAN SPICER, TRUMP TRANSITION SPOKESMAN: Well, I think it`s going to be swift and fierce. Mr. Trump has made it very, very clear he understands the threat that radical Islamic terrorism poses to our nation, and frankly, to our friends and neighbors around the globe, and that we`ve got to be able to call it what it is and then root it out by its very -- by -- by -- by the bottom. We cannot be (INAUDIBLE) being politically correct. We`ve got to understand the threat that we face and attack it straight on.

(END VIDEO CLIP)

REID: For the latest on the investigation into yesterday`s attack in Berlin, I`m joined by Matt Bradley, foreign correspondent for MSNBC. (sic) Matt, good to talk to you. Can you give us the latest on the investigation and the search for the attacker there in Berlin?

MATT BRADLEY, NBC CORRESPONDENT: Well, Joy, it looks like the investigation is more or less back to square one. I`m not an expert on these sorts of police matters, but it seems to me that the police are going to have to start from the beginning.

Now, as you mentioned, there was a suspect that was initially detained in the moments following the attack last night, shortly after 8:00 PM, right behind me. Right where this Christmas market is normally held, normally, you`d be able to hear Christmas carols and there would be tons of tourists around, but tonight it`s all very quiet.

But that investigation seems to have stalled, but there`s still plenty more material that could come out of this. Now, remember, Joy, we`re actually - - it might help to think about it in terms of two crime scenes. There`s the crime scene where the truck crashed into the crowd of people and killed 12 and injured dozens of others. And then there`s the crime scene inside the cab of the truck itself.

That`s where the police were able to find a dead body. The Polish national who was thought to have actually been the driver of the truck originally, he`s the cousin of the man who owns the company that the truck was rented from originally and driven from Poland.

Now, this man was stabbed and shot. The revolver or the shotgun that shot him hasn`t been found. And so this smaller crime scene within the cab of that truck, this actually could yield quite a little bit more information that could help investigators to determine exactly what went on and who was responsible.

But, so far, all we have is the evidence that`s around this area right here and the ISIS claim of responsibility. Now, as you mentioned before, it`s not quite clear whether that claim of responsibility necessarily holds any water.

Now, ISIS could just simply be piggybacking onto a crime that just took place randomly or involved some other grievance. But, right now, the investigators are still moving forward and they`re combing through as much as possible to try to figure out the perpetrator -- Joy.

REID: Thanks very much, Matt Bradley, in Berlin. Appreciate it.

Let`s now bring in Congressman Gregory Meeks, Democrat from New York, and Malcolm Nance, MSNBC terrorism analyst and author of "Defeating ISIS: Who They Are, How They Fight, What They Believe."

Thank you both.

And I will -- I`m going to defer first to the congressman here.

One of the things that`s striking about the way that Donald Trump reacted to this, in sharp contrast to the way that President Obama did and that presidents typically do, is President Obama -- and this isn`t -- I won`t take credit for this original thought. I think it was in Ian Bremmer`s piece in "TIME" -- you know, President Obama came -- President Obama came out and said, the German people are our allies. We will stand behind the German people. He referenced the German people over and over again.

Trump`s statement was all about Christians vs. Islam. And he used the magic words they wanted to use, radical Islamic terrorism, because they think that that somehow will fight terrorism.

How does it strike you, as somebody who sits on the relevant committees, that approach to responding to an attack that we don`t even know who did it?

REP. GREGORY MEEKS (D), NEW YORK: The approach is exactly the wrong approach.

Words do matter. And the fact that he goes out there without, apparently, having his intelligence briefings or anything of that nature, but he just spurts words, you cannot go out and insult, as he has already, 40 percent of the world`s population.

If you think about the Muslims, the Chinese, and the Mexicans, that represents 40 percent of the world`s population. And he has already insulted all of them in a globalized world, where interconnectedness is more than it has ever been and the world is smaller than we have ever been.

So, I would hope that -- but it doesn`t seem like, as we get closer and closer to January 20, that he would understand the responsibilities of being the president of the United States of America and that words do matter. You just don`t tweet out something of that nature.

REID: Yes, he isn`t going to change, clearly, Malcolm Nance.

But you have not Donald Trump using this new playbook that some on the far right have wanted to do for a long time. They want to keep calling out -- they say that just saying radical Islamic terrorism, that, in and of itself, will help us fight terrorism.

I want you to play John Bolton, because you had Sean Spicer saying sort of the same playbook. Then this is John Bolton, and he`s talking about Angela Merkel, and essentially accusing the German chancellor, making her responsible, essentially, for what`s taking place and what happened in Berlin.

Let`s listen to John Bolton, who Trump would like to have as his undersecretary of state.

(BEGIN VIDEO CLIP)

JOHN BOLTON, FORMER UNITED STATES AMBASSADOR TO THE UNITED NATIONS: But I think the feeling that many Germans have had and are reluctant to say out loud, given German`s own history, is that they feel that they have lost control of their country.

It`s not a feeling that`s unknown elsewhere in Europe, but Merkel has been the biggest symbol, I think, across the continent of somebody who is open to this policy.

It`s by her unilateral action in allowing this wave of refugees to come into Europe. She definitely exposed Germany and others to the risk of terrorism.

(END VIDEO CLIP)

REID: So, Malcolm, there is no evidence that this person who committed this attack was a refugee from Syria.

You have got this rhetoric about Christians vs. Muslims, assuming all of those people at that Christian market, assuming their background, and, you know, sort of couching it as a clash of civilizations. And then you have this anti-Muslim rhetoric.

How does that help us in a global world where terrorism can take place anywhere?

MALCOLM NANCE, NBC TERRORISM ANALYST: It doesn`t help us at all.

As a matter of fact, this is going to evaluate the risk of massive, I mean massive, not individual, small quantities, but massive quantities of terrorism over the next four years.

We`re essentially -- what I`m hearing when I listen to their statements -- and certainly the statement from the president-elect -- is, I`m hearing them set up a -- Samuel P. Huntington`s clash of civilizations, which actually was the logic that Osama bin Laden used to carry out the 9/11 attacks.

He believes that there should be a clash of civilizations between Islam and the Christian West. What I`m seeing, and certainly from the rhetoric, it appears that they believe that Russia and the United States are this Christian axis, and that only Christians are attacked by terrorists, which is quite surprising to all of our Muslim allies since 9/11 who have been attacked and that we have been helping defend and bring about, you know, the protections for the people in the Islamic world who have absolutely nothing to do with terrorism.

This will only create a situation where ISIS will be saved. And ISIS is on the ropes there. They are literally on the last legs in Iraq and Syria. But this kind of rhetoric could literally -- could save ISIS and rise the ranks of al Qaeda at a level we haven`t seen since the invasion of Iraq.

REID: And speaking of things that might exacerbate the problems that we have in terms of terrorism and in terms of just attention around the world, Donald Trump has also signaled that a dramatic shift is coming to U.S. Middle East policy.

Last week, he named David Friedman as his choice for ambassador to Israel. Friedman has called the two-state solution to the Israeli-Palestinian conflict an illusion.

Jeremy Ben-Ami, founder and president of J Street, a liberal Jewish advocacy group, wrote a scathing opinion piece opposing Friedman`s nomination, writing: "Even though Friedman`s views completely contradict bipartisan U.S. policy for the past five decades, that`s not sufficient reason for the Senate to reject his nomination -- to accept his nomination. His lack of foreign policy or diplomatic experience -- he`s been Trump`s bankruptcy lawyer -- is also not alone a basis for rejection. But never before has a diplomatic novice been placed in this sensitive post, where a single wrong word or move could pour fuel on fires already burning in the region."

And, Congressman, talk a little bit about what we`re facing with this combination of what looks to be a walk-back from the idea of the two-state solution, the notion of moving the U.S. Embassy to Jerusalem, an incredibly provocative act, essentially dismisses Palestinian claims, and setting up this clash of civilizations sort of idea in terms of the way we deal with the Muslim world.

MEEKS: It is -- makes me very nervous.

Number one, you`re talking about a crisis that will blow up completely in the Middle East. You`re talking about migrants moving over. You`re talking about that -- where there is divisions completely in the area, but all across the world.

As opposed to trying to figure out how we work together and bring people together, this is the most divisive plan that one could come -- come up with that basically, you know, if you dig deep and look at what is being talked about, is some kind of superiority complex, it looks like, that they have, what you were talking about, Christians over Muslims, Muslims in dealing with the Jewish population, as the public is trying to figure out how we bring this thing together.

In a globalized world that we live in, we have got to figure out how to work with our allies, how do we make sure that there`s a reason why, for over five decades, we have had certain policies.

REID: Yes. Yes.

MEEKS: And we have got to make sure that just someone who talks off the top of his head without knowing what he`s talking about, we have got concerns.

And I would hope that Congress, Democrats and Republicans, will then step up and make sure that we hold this guy in check.

REID: All right, well, we shall see. And we will be watching.

Congressman Gregory Meeks and Malcolm Nance, thank you both.

And up next: North Carolina Governor McCrory calls a special session of his state legislature tomorrow again in order to repeal the so-called bathroom bill. What will happen tomorrow? We will ask our panel.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

GIGI STONE WOODS, MSNBC CORRESPONDENT: Hi there. I`m Gigi Stone Woods. Here`s what`s happening at this hour.

At least 27 people are dead and 80 others hurt after a blast tore through a fireworks market on the outskirts of Mexico City.

Security has been increased at landmarks and holiday markets across New York City following Monday`s truck attack in Berlin. However, authorities say there is no imminent threat.

And Israeli Prime Minister Benjamin Netanyahu is offering to treat Syrians wounded in the fighting in Aleppo. He says Israel has already treated thousands of Syrian civilians -- now back to Joy Reid and HARDBALL.

(BEGIN VIDEO CLIP)

GOV. PAT MCCRORY (R), NORTH CAROLINA: As I promised months ago, if the Charlotte ordinance was repealed, I would call our General Assembly into special session to reconsider existing state legislation passed earlier this year. And I`m doing just that for this Wednesday.

But it should also be noted that the whole issue of gender identity is a national issue that will be resolved by the courts and the United States Justice Department.

(END VIDEO CLIP)

REID: Welcome back to HARDBALL.

That was the outgoing Republican Governor of North Carolina Pat McCrory announcing Monday in a video message that he has called a special session of his legislature to convene in order to repeal the anti-transgender bathroom law that he signed last March.

North Carolina Republicans passed the law as a response to the city of Charlotte, which passed its own ordinance to protect LGBTQ people from discrimination. The state law overturned that ordinance and threw in a ban on cities raising their minimum wage.

But since McCrory signed the legislation, which some says legalizes discrimination against gay people, North Carolina saw a backlash from the private sector, with some major companies pulling their business from the state, including the NBA, the ACC, and the NCAA, which pulled tournaments out of the state altogether.

And so yesterday, as a result of a compromise between state and local leaders, the Charlotte City Council rescinded their ordinance in order for the state to begin the process of repealing the so-called bathroom law.

And joining me now, Yashar Ali, a contributor to The Daily Beast, and North Carolina Democratic State Representative Chris Sgro -- I hope I`m pronouncing that correct -- who is executive director of Equality North Carolina.

And, Representative, I`m going to go with you on this first.

Why did Charlotte give in, in your view, when it seemed that they were winning? I mean, you had major corporations pulling out of North Carolina. You had all of these tournaments pulling out. The damage was real, lasting, huge economic damage. Why capitulate?

CHRIS SGRO (D), NORTH CAROLINA STATE REPRESENTATIVE: Well, we all know that Charlotte and its ordinance had never been the problem.

The ordinance that existed in the city of Charlotte that protected LGBT people is a best practice employed in hundreds of other cities across the country, like Jackson, Mississippi, and Orlando, Florida.

The problem has always been HB-2. But what we also know is that every day that HB-2 is on the books means that there are no anti-discrimination protections in the state of North Carolina. And above and beyond that, this law actually proactively discriminates. It doesn`t just allow discrimination. It mandates discrimination.

So, every single day that HB-2 is on the books, LGBT North Carolinians and Charlotteans are at risk for discrimination and violence. So, while the problem has never been Charlotte, the matter before us now is the full repeal of House Bill 2. And we must get that done tomorrow.

REID: Before I come to my other guest, Chris, Representative, is the minimum wage part also being repealed?

SGRO: My understanding is that what we will consider tomorrow is the full and unequivocal repeal of House Bill 2.

REID: OK.

And same question to you, Yashar Ali, because it does seem that the momentum was on the side of the -- of Charlotte, right? And you just had Governor McCrory bounced out of office in part because of his support for that law. What do you make of this?

YASHAR ALI, THE DAILY BEAST: I`m going to put my analyst hat on. I would say to Republicans and Democrats.

It sort of reminds me of what the Trump team has been doing the past couple of weeks whenever they`re criticized: We won.

Democrats won. They won. They beat McCrory. I don`t know why they`re backing down. And it`s the equivalent -- I want to be careful when I say this -- but it`s like negotiating with a terrorist.

You don`t get into that battle, because now the Republicans -- and they have the supermajority in the legislature -- are going to hold it against them.

REID: Yes.

ALI: And I`m also old enough to remember that the whole purpose of HB-2 was to protect children and to stop sexual predators from stop putting on high heels and dresses and makeup and going into the bathroom and doing terrible things to children.

Now, all of a sudden, that threat doesn`t exist? They`re willing to give it up? Who`s going to protect the kids?

REID: Yes, good point, because that was the way it was sold, Representative Sgro.

I mean, have your colleagues on the other side of the aisle expressed any further concern that now the bathrooms are going to be this sort of horror show without the law, or are they admitting that they just passed it to stick it to Charlotte?

SGRO: Oh, I don`t think that they are ever going to admit that, Joy.

But we do know that HB-2 never protected women and children. If we wanted to protect women and children, we would have strengthened sexual predation laws. It was always about discrimination. And that`s why we have to get it off the books.

I agree with the other panelists that Charlotte shouldn`t have to repeal its nondiscrimination ordinance. But what I do know is this. For LGBT people to be protected in the state of North Carolina, we have to do three things.

We have to repeal HB-2, which we should be doing tomorrow. We needed a pro-equality governor of the state of North Carolina. And we have that. And then we`re going to need to win comprehensive nondiscrimination protections.

And, unfortunately, we can`t do that until House Bill 2 is repealed. Not just Charlotte, but Greensboro, Raleigh, Wilmington and everywhere in between can`t have the comprehensive nondiscrimination protections that the state of North Carolina needs at the municipal or state level until HB-2 is off the books. And that has to happen.

It`s an emergency that House Bill 2 be repealed for my community here in the state. We have to get that done tomorrow.

REID: All right, well, we will be watching.

Yashar Ali and Representative Chris Sgro, thank you very much. Appreciate it.

And up next: First lady Michelle Obama reveals whether she will ever run for public office. I`m not giving that away, am I? That and much more HARDBALL roundtable when we return.

And you`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, U.S. FIRST LADY: The challenges, uh, yes, there are times that, you know, frustrated me. You know, this past election was challenging for me as a citizen to watch and experience. It was painful.

If we want maturity, we have to be mature. If we want a nation that feels hopeful, then we have to speak in hopeful terms. We have to show love and empathy. If we want smart leaders, then we have to be smart voters, you know? We cannot vote from a place of fear.

(END VIDEO CLIP)

JOY REID, MSNBC GUEST HOST: Welcome back to HARDBALL.

That was First Lady Michelle Obama in a rare and candid interview with Oprah Winfrey, talking about the pain that she felt over November`s election. The first lady also answered the one question on the minds of so many Democrats since her lauded speech at the Democratic National Convention in Philadelphia last summer, in a series of inspirational campaign speeches afterward.

(BEGIN VIDEO CLIP)

OPRAH WINFREY, TALK SHOW HOST: Would you ever run for office? I have to ask it.

OBAMA: No, no.

WINFREY: No kind of office?

OBAMA: No. I -- look, that`s one thing I don`t do -- I don`t make stuff up. I`m not coy. I haven`t proven that. I`m pretty direct. If I were interested, I would say it.

(END VIDEO CLIP)

REID: For more reaction from Michelle Obama`s interview, let`s bring in the HARDBALL roundtable.

Elise Jordan is a Republican strategist and an MSNBC political analyst, Basil Smikle is a Democratic strategist, and Catherine Rampell is an opinion writer with "The Washington Post."

I get very wistful. What planet are the Obamas from that they can all be so preternaturally calm and classy? But what did you think of her response?

ELISE JORDAN, MSNBC POLITICAL ANALYST: I thought it was really disappointing that she said she wasn`t going to run for office, after everyone on the political scene this year, her campaign speeches were incredible and had some of the most memorable takeaway lines in a way you may not remember a line from Donald Trump speeches, you may not remember a line from Hillary Clinton, but you do from Michelle Obama.

REID: Wrong! You remember that line. Wrong.

(CROSSTALK)

REID: But, yes, anyone that`s covered Michelle Obama knows that she`s not a huge fan of politics. The fact that she gave those amazing speeches was surprising because she`s not like a naturally sort of -- she doesn`t enjoy campaigning. She`s not like Bill Clinton that`s into it.

CATHARINE RAMPELL, THE WASHINGTON POST: She`s very talented at it, certainly. She`s very engaging, very thoughtful, very charismatic, but she doesn`t seem to take pleasure in it. It`s something that she does because she believes in the cause, and not necessarily because she wants to be in office.

REID: Yes.

RAMPELL: And I take her at her word when she says she has no interest.

REID: I would be shocked if she ever ran for office.

But, you know, Basil, she is good at getting in that low-key shade, right? I mean, she says, we have to be mature. If we want maturity, we have to be mature, you know? And we have to smart if we want smart politics.

But, you know, who do you think that was a message to?

BASIL SMIKLE, DEMOCRATIC STRATEGIST: That was a message to Donald Trump, absolutely. You know, Michelle Obama unfiltered is the business. I mean, that is -- I love this. And I don`t think she`s going to run for office. I don`t even know if I wish she would. But what I do want her to do is be that constant voice out there for Democrats going forward.

One of the things I was most concerned about in this election is whether or not African-Americans broadly, but certainly African-American woman, would actually come out and be supportive and be energized and engaged. And she was a big part of that. And I`m glad to see that she`s doing it.

But, this was certainly a message to Donald Trump. And if she is the only one out there needling him in the near future, I think we`re all better off for it.

REID: You know, Elise, the fact when we go -- "when they go low, we go high," which is one of the really memorable lines, one of the other memorable things that Mrs. Obama said during the campaign was I think she spoke for so many women when she talked about the visceral reaction to that "Access Hollywood" video, to those words and those accusations of abuse. What do we do with the politics when that does not stop you from being president? What do women do with that?

JORDAN: Well, I think that what she did is still so necessary. She spoke with passion and conviction about why it was wrong. And you could tell that she was coming from a place of moral certitude. And it really showed in the remarks. And I think that`s why it resonated on both sides of the aisle, Democrats and Republican women, just because she was so forceful at knowing what her truth was when she was speaking.

REID: And yet, Catharine Rampell, that didn`t affect the election at all. You had -- you know, Donald Trump actually won the majority of white women. Women of color voted overwhelmingly for Hillary Clinton. But in the end, you know, for all of the bipartisan support for the first lady`s empathy and her sort of dignity, it doesn`t seem that that anymore translates into politics.

RAMPELL: Well, yes and no. I think there are a lot of women who said all men are boars and boys will be boys and I wish that were not the attitude, but I think a lot of women dismiss those comments for that reason. You know, the locker room talk explanation basically resonated.

On the other hand, if you look at exit polls, for example, or even views today, surveys today, views of Donald Trump, they`re still quite negative, right?

REID: Yes.

RAMPELL: And if you look at how people characterize him, it`s not flattering. If you look at surveys of, does he respect women? The answers are not particularly good.

REID: Yes.

RAMPELL: So I think in some sense, it was written off as, you know, we wish he were behaving better, but whatever, he`s a dude, so therefore, it`s excusable.

REID: I think Gary Hart is calling from the monkey business wondering where did it all go wrong. All he did was laugh and he was finished!

All right. The roundtable is staying with us and when we come back, the one thing that Bill Clinton and Donald Trump actually agree on.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

REID: Former Speaker of the House Newt Gingrich has an answer to those questions the Trump family`s potential involvement in their business and the government. Here`s what he said.

(BEGIN AUDIO CLIP)

NEWT GINGRICH (R), FORMER HOUSE SPEAKER: I think in the case of the president, he has a broad ability to organize the White House the way he wants to. He also has, frankly, the power of the pardon. I mean, he -- it is a totally open power and he could simply say, look, I want them to be my advisers. I pardon them if anybody finds them to have behaved against the rules, period. And technically, on the Constitution, he has that level of authority.

(END AUDIO CLIP)

REID: Remarkable.

We`ll be right back.

(COMMERCIAL BREAK)

REID: Welcome back to HARDBALL.

And we are back with Elise, Basil and Catherine.

All right. Catherine, I`m going to start with you on your reaction to Newt Gingrich saying you can just pardon the people that you want in your administration and put them in.

RAMPELL: Well, we have to remember that Donald Trump gets the best people --

REID: The best.

RAMPELL: -- and it just happens to be that the best people require being pardoned from the crimes that they`ve committed in order to do their jobs.

REID: And then it will be fine. But, I mean, Elise, we`re speculating what he could have meant by that.

What do you think he could have meant?

JORDAN: I think he`s talking about absolute power.

SMIKLE: Yes.

JORDAN: And let`s disavow rule of law when it comes to Donald Trump`s presidency. I find those comments really upsetting. The White House should be held on a pedestal, the office of the presidency, the dignity and the respect to which you accord the American people, and they`re saying, no, it doesn`t matter. I think it`s incredibly disturbing.

REID: And it does feel, Basil, like they`re sort of putting together kind of a rogue`s gallery. I mean, you look at Michael Flynn and the conspiracy theories now, meaning with some far right party that was founded by the Nazis. Bannon, who everyone sort of forgotten that he`s even there, but he is still the same white nationalist he was yesterday and the day before. He`s sort of surrounding himself with rogues. For Gingrich to then say, we`ll add more rogues. They might juts be felons.

Democrats have not responded to this. It`s been amazingly silent the Democratic Party has been. Where is the Democratic Party?

SMIKLE: I think you will hear more. I mean, we were talking is earlier. You know, we have a new chair being elected in February.

REID: It`s too late.

SMIKLE: I absolutely agree. It is too late. We should be talking about this now.

Be should be talking about how Steve Bannon enshrines all of the things that we hated about Donald Trump`s campaign.

REID: And who is the leader of the Democratic Party right now?

SMIKLE: Well, right now, it`s Donna Brazile. I mean, she still the chair and I think when have you people like a Chuck Schumer, who`s a minority leader, Nancy Pelosi, you know, I think they`re going to be fighting back. And the fact that I`m here saying that and you know, you`re looking at me like maybe not is an issue. But we should be fighting back. No question about it.

And going back to this issue of the pardon, this is why people hate politics. This is why people distrust politicians. Look at Chris Christie and abuse of governmental power there and what`s happened with his lieutenant subsequent to that. This is something that we should be standing on.

REID: And, you know, the big irony, of course, is that former President Bill Clinton who agrees on Donald Trump about exactly one thing, we teased before they agree, that he`s the one who called Donald Trump after the election. His pardon of Marc Rich is the first thing that got Jim Comey on his case.

Jim Comey then turns around, and since he blows up is the election, you know, right before it`s over. Essentially, we are in a world without norms, right? Will any of them be restored over the next four years?

RAMPELL: Only if it`s convenient for Donald Trump to restore those norms. I mean, like when we talk about conflicts of interests, we have laws, we have regulations and we have norms that help protect us from these kinds of conflicts of interest, particularly when we`re talking about the highest office in the world. And Donald Trump has basically said, none of these things apply to me.

Newt Gingrich, you know, you haven`t plays the sound bite. But one of the other things that he said in that interview on the Diane Rehm show was essentially that Congress should be helping Trump figure out how to skirt all of the conflict of interesting issues. And that they should be finding ways to help him figure out -- you know, well, he has this is enormous incredible empire around the world. There`s nothing he can do to address divestment. So, therefore, he should it be excused from it.

No, that`s not what the Congress is there to do. Congress`s job enshrined in the Constitution is to serve as checks and balances. But there are also norms in terms of oversight that apparently we`re dismissing.

REID: We`ll have you guys come back. Apparently their job is also eight Benghazi investigations.

(CROSSTALK)

REID: All right. The roundtable is staying with me.

And up next, these fine folks are going to tell me something I don`t know. You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

REID: And we are back.

Elise, tell me something I don`t know.

JORDAN: Check out a "Vanity Fair" story that talks about the missing footage from "The Apprentice", that contains the most incendiary things that Donald Trump said that a bunch of editors out in L.A. put together as a gag because they thought Hillary Clinton was going to win and they refuse to release it because they didn`t want to lose their jobs. And that is still lurking in the atmosphere.

REID: Yes. And WikiLeaks has no interest in getting it. Surprise, surprise.

JORDAN: Or they might already have it.

REID: Yes. But, you know, it would hurt Trump.

Basil?

SMIKLE: Lest we forgetting about some of the important issues discussed by Hillary and Bernie Sanders on the campaign, student debt. An article in the Chronicle of Higher Education today talks about the fact that folks over 50 who are in student debt and may have defaulted on their student loans if the government is taking money out of your Social Security check, there are a lot of seniors in poverty because of that.

REID: Catherine, quickly.

RAMPELL: So, Trump and his new OMB pick may not see eye to eye on deficits. One of them wants to close them and one wants to balloon them. There is one thing they agree, which is that they are both cool on defaulting on foreign debt.

REID: All right. There we go.

Thank you very much, Elise, Basil, Catherine.

That`s HARDBALL for now. Thanks for being with us.

"ALL IN WITH CHRIS HAYES" starts right now.

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