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Hardball with Chris Matthews, Transcript 1/10/2017

Guests: Kathleen Clark, Aaron Blake, Andrew Rice, Megan Murphy, Dan Rather, Bob Herbert

Show: HARDBALL Date: January 10, 2017 Guest: Kathleen Clark, Aaron Blake, Andrew Rice, Megan Murphy, Dan Rather, Bob Herbert



Wow. Good evening. I`m Chris Matthews in New York.

A big developing story, a hot one involving Donald Trump and his relations with the Russians. Two U.S. officials with direct knowledge told NBC News that briefing materials prepared for President-elect Trump included information that initially circulated among Trump opponents and was passed (ph) to U.S. intelligence agencies making damaging allegations about Trump`s dealings with Russians. Neither of the officials said that the FBI was actively investigating the information, which has not yet been verified by U.S. agencies. The sources would not comment on the nature of the actual allegations themselves.

NBC`s Ken Dilanian is with us now from Washington. Ken, what is it that the Russian have on Donald Trump?

KEN DILANIAN, NBC CORRESPONDENT: Well, Chris, our sources are not -- are not telling us, frankly. They`re not -- they`re not discussing what the material is. They are saying it`s personally damaging information that was presented in the briefing materials as a way of making sure that the president-elect was aware that it was out there.

And they`re not saying that the FBI is necessarily investigating this information or that it`s active or that`s it`s verified or it`s proven, it`s just that there was damaging information gathered that the Russians were aware of and it was passed on to U.S. intelligence agencies and it was -- it was in the briefing material presented to the president-elect, the president and senior members of Congress, Chris.

MATTHEWS: Let me go to Andrea Mitchell. You stayed (ph) there. Andrea, let me ask you about this. I`ve been looking at reports all afternoon, or late afternoon, about this. Is it personal? Is it financial? How would we describe it, or can we?

ANDREA MITCHELL, NBC CORRESPONDENT: Well, it`s been described...

MATTHEWS: This information that the Russians hold.

MITCHELL: We should say it`s unverified raw intelligence that has been briefed to both the president and to the president-elect. But the underlying allegations have not been confirmed by U.S. intelligence.

So I`ve talked to top officials at the White House and the State Department who have both read this dossier. It`s been floating around Washington for a number of weeks now. You know that Senator Reed (ph) was referring to this somewhat obliquely. It was raised obliquely at a number of hearings, including the hearing today.

We do know that it is not considered important enough or serious enough to be, quote, "under investigation" by the FBI. That`s from Peter Williams`s sources.

MATTHEWS: Well, let me go back to Ken. I mean, if you gather information on someone, you don`t usually do it to help that person. You use it to perhaps influence that person. Is that a fair assumption here, that the Russians were gathering information on Trump not necessarily in his interests?

MITCHELL: Yes, that`s our understanding. And the reason that it was passed on, my understanding, is because it was in the possession of U.S. intelligence agencies, and they wanted the president-elect to be aware of it. And they`re not sure of the significance of it and -- or even whether it`s true. But it`s something that was briefed to both Trump, or at least was presented in the briefing papers to Trump, to the president, and to the "gang of 8," senior members of Congress.

MATTHEWS: Can we say or do we know if it was personally embarrassing to Trump, this information? We don`t know that, or do we know that?

DILANIAN: We understand that it was personally embarrassing and damaging, but we don`t know the details.

MATTHEWS: OK, thank you very much, Ken Dilanian and Andrea Mitchell. We`re going to continue to follow those developments of this story throughout this hour.

Now to the hot conflict here on the home front today. Call it latest battle of the Civil War. Historic fighters for Civil Rights and human rights go to war with the man -- the man Donald Trump wants to be our attorney general, or certainly his attorney general. It`s the cause of Eric Holder and Coretta -- and Loretta Lynch against the old ways of Senator Jeff Sessions of Alabama, who faced tough grilling today in Senate confirmation hearings.

Sessions is known for his hard-line conservative views on immigration, gay rights, voting rights and other issues. Today, he said he would uphold the laws of the country.


SEN. JEFF SESSIONS (R-AL), ATTORNEY GENERAL NOMINEE: You know that I am a man of my ward and can be trusted to do what I say I will do. You know that I revere the Constitution, that I`m committed to the rule of law, and you know that I believe in fairness and impartiality and equal justice under law.

I abhor the Klan and what it represents and its hateful ideology.

I have no belief and do not support the idea that Muslims as a religious group should be denied admission to the United States.


MATTHEWS: Well, Senator Dianne Feinstein of California, the ranking member on the committee, judiciary, outlined a very different view of Sessions. She explained why liberals are very nervous about the prospect of Sessions as our attorney general. Here she is.


SEN. DIANNE FEINSTEIN (D), CALIFORNIA: He voted against each of three bipartisan comprehensive immigration bills. Twice, he voted against the DREAM Act. He voted against efforts to prohibit the use of waterboarding.

Senator Sessions voted against the Matthew Shepard (ph) and James Bird Hate Crimes Act. Arguing against the hate crimes law in 2009, he said this. "Today I`m not sure women or people with different sexual orientation face that kind of discrimination. I just don`t see it," end quote.

Well, this senator, regretfully, sees it.


MATTHEWS: Well, the hearing was extremely highly charged. it was interrupted multiple times by protesters, including at one point by two men dressed in KKK sheets, who accused Sessions of being a racist. That was the action on the Hill today.

Nearly 700 miles away, of course, in Chicago, President Obama is preparing right now to deliver his last major speech as president of the United States. According to "The Chicago Tribune," President Barack Obama`s farewell address tonight is not intended as a victory lap, but a call to action to the next generation of leaders.

Well, the White House released excerpts just in the last hour. The president will say, in part, "Chicago is where I learned that change only happens when ordinary people get involved, get engaged and come together to demand it. After eight years as your president, I still believe that. And it`s not just my belief, it`s the beating heart of our American idea, our bold experience in self-government."

Well, we`ll get to all of that in a moment. It`s a big night here in New York and in the country. I`m joined now by "Washington Post" columnist and MSNBC political analyst Eugene Robinson, and editor of the "Bloomberg Businessweek," Megan Murphy.

Gene, it`s great to have you on for the big stuff.


MATTHEWS: (INAUDIBLE) we`re going to get back to that Russian story as it develops, but that could be the blockbuster...


MATTHEWS: ... of course, if the Russians were gathering information, as it seems, and that our -- our spooks, our intel people, told that to Trump on Friday, that they`d been digging stuff up on it. I`d be worried, if I were Trump, what they have because you don`t dig up stuff on your friends.

ROBINSON: Well, exactly. There seemed to be a message here both from the Russian and also from the intelligence officials to Trump, you know, This stuff is out there, you better be careful.

MATTHEWS: Well, let`s hope it gets out because you don`t want them holding onto anything that might embarrass the guy because that would be influence peddling of the worst kind!

ROBINSON: Well, yes, that`s called blackmail...


ROBINSON: ... actually. Yes.

MATTHEWS: Extortion.


MATTHEWS: Well, we don`t know enough yet to get into the details of how bad it is.

Let me ask you, Megan -- do you want to comment on that? Because I want to get to the hearings today.

MEGAN MURPHY, "BLOOMBERG BUSINESSWEEK": (INAUDIBLE) because of this Putin issue and sort of how he`s cozied up to him, how much he`s drawn (ph) the administration. Everyone`s being examined for their ties to Russia. It`s interesting as this reporting has developed (INAUDIBLE) it could be personal information, it could be business information, as well. That`s something that everybody is looking at...


MATTHEWS: Well, the word "embarrassing" is there already. And by the way, Putin is -- I wouldn`t put anything past him. And he certainly -- he wouldn`t trust his allies for a minute. He`d like to keep them...

MURPHY: The judo master of judo masters.

MATTHEWS: (INAUDIBLE) rumor that LBJ used to say that, I like to have his thing in my pocket.


MATTHEWS: I want to make sure I have control over the guy.

Let`s talk about the hearings today. You grew up in the South, in South Carolina. You went through all the `60s personally, all through that. What do you -- what did you make of the defense put forward by Mr. Sessions, Senator Sessions about his past, 30 years ago, whatever? It`s a long time, but...


ROBINSON: Look, he was categorical in saying, That`s -- you know, The way I was represented or portrayed back when I was up for a judgeship, that`s not me. This is who I am. So in terms what he said, you know, I don`t think you can find a whole lot of fault there.

There is -- there are a couple of issues. First of all, to go from Eric Holder, perhaps the most aggressive...


ROBINSON: ... attorney general on Civil Rights issues -- you know, Loretta Lynch...

MATTHEWS: Loretta Lynch.

ROBINSON: ... for a little while, you know, almost equally aggressive, and then to Jefferson Beauregard Sessions...

MATTHEWS: Oh, you`re doing this, too! You guys all -- but I understand why you do it!


MATTHEWS: ... Jefferson Beauregard Sessions...


ROBINSON: You see the Spanish moss!

MATTHEWS: ... a confederate -- it sounds like a Confederate cavalry officer!

ROBINSON: You see the Spanish moss...


ROBINSON: Now, you know, in fairness, there is a -- there is a salient issue, which is the issue of voter suppression, and that was touched in the hearings today. That was a big issue for Eric Holder and for Loretta Lynch. And it`s unclear whether Jeff Sessions believes it`s an issue at all.

MATTHEWS: Yes, there`s this sort of old seggie aroma about anybody who`s a Southerner, I guess, who lived through that period. He wasn`t an active Civil Rights fighter, OK? He was -- he as passive, let`s put it that way. I`m not knocking the guy. He was a passive person of that era. He wasn`t one of the new breed.

But you look about what -- what Gene said. Think about this. Eric Holder`s sister-in-law, you know, Sharon Vivian Malone (ph), was one of the two students that had to get past George Wallace...

ROBINSON: Exactly.

MATTHEWS: ... at the schoolhouse door in 1963 in June. She was (INAUDIBLE) had to be escorted in by federal -- you know, federal -- not federal marshals, I think it was...


ROBINSON: Nicholas Katzenbach and...


ROBINSON: ... and -- and the...

MATTHEWS: The National Guard guy, the big, tall guy they brought in there to jam them -- the two kids past. That`s how things have changed. Her brother-in-law is attorney general the last couple years. So I think the - - we`re talking about -- are we going back to pre-`60s attitudes about voting rights, human rights, gay rights, women`s rights?

Are we going back -- by the way, why would he pick a guy with that kind of history to be attorney general without making a statement?

MURPHY: I think...

MATTHEWS: It is making a statement.

MURPHY: It`s making a statement, but it`s also making a statement of who supported him and who supported him early on in his candidacy, and he`s rewarded a lot of his friends and a lot of them are up for primetime positions.

And I think what you saw today was -- I think he did, actually, a very credible job at hitting back at those allegations.


MURPHY: I think the bigger issue is exactly as you`re saying. How much does this bring to the forefront what people are most concerned about, not just about (INAUDIBLE) Jefferson Beauregard Sessions, but what they actually are worried about in terms of the tenor that that administration is going to take towards women`s right, towards gay rights, towards transgender rights, and does this really -- is it a throwback in terms of how much progress -- we cannot forget how much progress has been made just in the past eight years under an Obama presidency.

ROBINSON: I mean, I will say this. We heard Senator Feinstein giving sort of a laundry list of issues. Some of these are just issues on which she disagrees with Jeff Sessions, right? And so, you know, elections do have consequences and -- and if that`s that the president believes...

MATTHEWS: OK, let me...

ROBINSON: ... and what the president wants, you know, maybe he has a right to...


MATTHEWS: ... in so many ways. Do we need hate crimes legislation? I think you believe that.


MATTHEWS: He says we don`t. He says guys aren`t endangered, even though Matthews Sheppard was...

ROBINSON: Well, exactly. No, I do think...

MATTHEWS: ... killed because of this...

MURPHY: To be fair, he said that quite some time ago. That comment is quite...


MURPHY: He`s not been an active (ph) out there. He`s been anti- immigration...

MATTHEWS: He said gays don`t face discrimination.

MURPHY: Well, gays certainly do face discrimination...


ROBINSON: But voter suppression -- that`s an active issue. I think that`s an active issue.

MATTHEWS: I`m very big on that because I think everybody should have the right to vote, and it shouldn`t be the most difficult thing to do in your life.

ROBINSON: Exactly.

MATTHEWS: Anyway, here`s what Senator Sessions said when he was asked about voter ID laws. Let`s watch.


SESSIONS: There`s going to be a debate about it. Courts are ruling on it now, and that is a voter ID and whether or not that is a improper restriction on voting that adversely impacts disproportionally minority citizens. So that`s a matter that`s got to be decided. On the surface of it, it doesn`t appear to me to be that. I have publicly said I think voter ID laws properly drafted are OK. But as attorney general, it`ll be my duty to study the facts in more depth.


MATTHEWS: The Voting Rights Act of 1965 opened the door to voting, and LBJ, President Johnson, believed that was the key.


MATTHEWS: If you get to vote, you get to change things.

ROBINSON: And then people could vote -- and black people could vote in my home town, so it`s very -- very personal to me. And -- and you know, the - - the Shelby decision knocked out the sort of prior approval requirement of the Voting Rights Act so that...


ROBINSON: Exactly. The Southern states would have to -- had to seek approval from the Justice Department before they changed their laws. And after that decision, a whole bunch of states -- North Carolina, Texas and others, and Alabama -- you know, rushed to put in place very, very tough voter ID laws. In the North Carolina case, the court found -- you just look at the factual record of that case. The court found that it was -- it was expressly targeted to keep African-American and Latinos from voting. I mean, you know...


MATTHEWS: ... in Pennsylvania. Let`s not be regional about it. Pennsylvania, we had two top Republicans...

ROBINSON: Pennsylvania, exactly.

MATTHEWS: We have Pennsylvania we had two top Republicans admitted it. But by the way, when you say you don`t like Sunday voting, when there`s this modern tradition of African-Americans going to church, and then in the buses, if you will, heading off to the registration areas -- it`s called "souls to the polls" -- when you black that out, when you say, No more of that, it`s pretty targeted.

MURPHY: It`s...

MATTHEWS: It`s pretty clear what they...


MURPHY: It`s targeted. And as Eugene said, you just have to look at the history of these specific cases and why these laws were drawn up. What you should -- what they should be asking Jeff Sessions is, What is actually the affirmative case for voter ID laws? Where`s the voter fraud? Where`s the fraud that we see at the ballot box (INAUDIBLE) people trying to get to the polls that have ever been shown to actually...


MURPHY: ... need these laws in place? They`ve been constantly challenged. This case is an important one. And again, for him to say publicly -- I actually thought that was one of the most controversial bits in the hearing, when he said he`s been public about that. He does support voter ID. That`s a big thing to say right now.

ROBINSON: And I would ask him specifically about that North Carolina law because there is a court record on it. You know, the legislators -- and before they passed law, said, Give us a breakdown. How many black voters versus white voters vote early? You know, and when do they vote?


ROBINSON: How many -- how many Latino voters versus white voters...

MATTHEWS: OK, well, this...

ROBINSON: ... vote out or their -- I mean, it`s...

MATTHEWS: But see, you`re old enough to know the carnival that went on in the attempt of whites in the South, who felt they were losing their power - - they were -- over -- can you say this in Greek? I mean, so-called literacy laws...

ROBINSON: Yes, of course!


ROBINSON: Of course, and the Voting Rights Act was meant to end all that.

MATTHEWS: And -- you know, and paying to vote.


MATTHEWS: The poll tax. All that stuff was aimed at one thing, keeping the franchise to the elite, to the land-owning elite.

Let me ask you about -- let`s get positive now. We got to think hope now. (INAUDIBLE) see if the hope poster`s up again.



MATTHEWS: Because I don`t mind admitting that I was -- and you because of where you grew up and how you grew up -- to see Barack Obama elected president was to me emotionally and physically stirring. I don`t think I`ve been through anything that since maybe the fights over the Vietnam war and stuff, emotionally.

ROBINSON: Yes, no, I felt the same way. I wrote a column the day after that election in an office, in this building, actually, because I had been up here on this desk that night, and you know, I cried through the entire writing of the column. So you know, it was very emotional for me.

It`ll be fascinating. You know, he had his eight years, so it`s not as if he could stick around longer. It`s not as if he`s leaving early. It`s just, this is the end of this era. I`ll be fascinating to hear what he says tonight. And I hope it`s a forward-looking speech. I mean, we`ll have -- you know, he`s talked about his -- his -- - his legacy. I hope it -- I hope it points toward the future. I`d love to hear him on that subject.

MATTHEWS: Well, it`s always incremental. He talked about being transformational, and he was on health care and saving our economy in `09. And by the way, the Republicans will be doing jumping jacks right now if they had tripled the Dow average and gotten unemployment down to where...


MATTHEWS: By the way, if a Democrat -- I`ll say it again -- had gotten help from the Russians, a former KGB agent, in an election...


MATTHEWS: ... they`re be stringing up Hillary Clinton by now!


MATTHEWS: Stringing her up!

MURPHY: But what Eugene said on this message and how he`s going to craft this -- one think I think that is so important about tonight is he`s not really focused on his legacy, frankly, I think, as much as he is really trying to instill that hope and optimism and message to people to get involved, the same message Michelle has been making in speech after speech about how getting on your local school council, even doing small things, join the PTA, join your school board, really make your voice heard, stand out, be a voice of change, be a voice of optimism. That is what he is going to carry forward tonight.

I think there`s going to be a lot of not dry eyes in the house tonight. And I think a lot of people will be looking at that presidency, looking at that administration, and tonight, at least, focus on a lot of things he got done, a lot of what`s still on the table to get done and whether or not what`s going to happen when you juxtapose it with Jeff Sessions in front of the Senate today...


MURPHY: ... it`s a very -- it`s very...


MATTHEWS: He might even be as good as you`ve just been the last couple minutes!


MATTHEWS: That was pretty rousing, wasn`t it, Gene?

ROBINSON: Very good.


MATTHEWS: You were good at explaining what I think it will be tonight, which I think it`s going to remind us of how great he was when he came in. I`m still -- I went back and watched (INAUDIBLE) on the show, at the end of the show, the stuff that got to me. It was so -- it was a little bit black church. It was a little bit something else. But it was so hopeful! It was something else!

MURPHY: It`s going to be a little bit of South Carolina.


MATTHEWS: Anyway, Eugene Robinson, great. You`ve been here for the big stories. We`re going to find out more about this Russian connection, what the Russians and Putin may have -- looks like they`ve got something on Donald Trump, which is always scary to have something on a president who`s coming in.

By the way, he`s putting in son-in-law, who does have power, into the West Wing, Jared Kushner, his first attempt, I would argue, to ignore the law. Anyway, Trump`s betting on no one calling him out on this. But that`s not going to happen here tonight. We`re going to call him out. That`s ahead.

And we`ve got an all-star HARDBALL roundtable tonight as we preview President Obama`s -- it`s a farewell address. This is the biggie tonight in Chicago.

And this is HARDBALL, where the action is.



QUESTION: Will you tell me what the role you expect Jared Kushner to have in your administration?


QUESTION: Jared Kushner.

TRUMP: Oh, we will talk about that on Wednesday.


MATTHEWS: Well, anyway, welcome back to HARDBALL.

By naming his son-in-law, Jared Kushner, to a senior adviser position in the White House, legal experts say the president-elect, Donald Trump, is willfully ignoring the federal anti-nepotism law, which bars officials from naming their relatives to government positions.

As the statute states -- quote -- "A public official may not appoint, employ, promote, advance, or advocate for appointment, employment, promotion, or advancement, in or to a civilian position in the agency in which he is serving or over which he exercises jurisdiction or control any individual who is a relative of the public official."

Well, Kushner`s lawyer, former Deputy Attorney General Jamie Gorelick, asserts that the statute only refers to agencies within the executive branch and not the White House itself.

As Gorelick told "The New York Times" today: "I`m not saying that there isn`t an argument on the other side. I just think we have a better argument."

Joining me right now is Aaron Blake of "The Washington Post." Kathleen Clark is professor of law at Washington University in Saint Louis. And Andrew Rice is a journalist with "New York" magazine. He wrote the cover story on Kushner in this week`s issue titled "President-in-Law."

Well, that`s fairly scary.

I have to start with my concerns about this. This son-in-law has so much power. He gets to blow Governor Christie out of the campaign, out of the transition. He gets to blow anybody Governor Christie recommends, like Mike Rogers to be head of CIA, or anything like that. He has the kind of power to do that. He has apparently the power to pick our ambassador to Israel. And apparently, by all means, according to Trump, he is going to run our Mideast policy out of the White House.

Strong stuff, a guy not to be messed with. I think this is an important issue to talk about.

Let me to Kathleen Clark.

Talk about the spirit of the anti-nepotism law passed by Congress after Bobby Kennedy was named by his brother to be attorney general.


Congress passed this anti-nepotism statute in 1967, and it`s very clear. It says that the president and other federal officials are not allowed to hire their relatives, including sons-in-law.

So we have a clear federal prohibition, and we have president-elect Trump apparently trying to get away with violating this statute.

MATTHEWS: And let me ask you. Let me bring in Aaron in.

I think he wants to muscle through this. Of course it`s controversial. Of course it looks like it`s breaking with certainly the spirit of the law. Now, Jamie Gorelick is maybe of one of the best lawyers in the country. He is lucky there, fortunate to have her. She can make the case effectively that it doesn`t -- it only refers to agencies.

And, of course, if you look at the federal budget, the executive office of the president is treated as an agency. It`s funded by the United States government. You would think it would be under the jurisdiction of a law that says no agency can have this situation where the head of the agency can name somebody to it who is a relative.

But, anyway, your thoughts about the politics of this, Andrew -- I mean -- sorry -- Aaron.


You`re right. I think This is a really great test case of the Trump administration, the Trump transition team`s ongoing kind of testing of the limits both ethically and now legally of what they are allowed to do.

President-elect Trump is fond of saying a president can`t technically have a conflict of interest. That may be true legally, but it`s less true ethically and appearance-wise. This transition team has already confronted a number of conflicts of interests.

There`s the idea that his kids will be running his business, which ethics experts have already raised concerns about. This seems to be them kind of -- the rubber hitting the road, them really putting this before the courts and seeing if anybody is going to stop them.

MATTHEWS: Let me go to Andrew about this, because I think it tells me a couple things. One, Trump doesn`t care what anybody like me thinks. He thinks, if he can get the law and get the right lawyer and make the case, he is clear.

Why is it so important to him to have Jared Kushner, his 36-year-old son- in-law, basically his consigliere, to use a good term, in the White House on domestic policy and most importantly Mideast policy? This guy has a wide sway of authority apparently coming his way.

ANDREW RICE, "NEW YORK": I think that Donald Trump`s paramount value is loyalty. And the loyalty that he takes most seriously...

MATTHEWS: Does he owe a job in the White House to his son-in-law?

RICE: I don`t think he owes a job to his son-in-law, but I think he wants to give a job to his son-in-law. And I think he listens to his son-in-law more than he listens to anything else perhaps in the entire world, certainly on issues of policy and on issues of politics.

MATTHEWS: Well, I mean, everybody would like to be surrounded by family their in government. That`s why they passed the anti-nepotism law. It`s very comforting to have your son-in-law, who is married to your daughter, around. But that`s why they passed these laws.

RICE: Well, sure.

And it`s quite possible that he ultimately won`t have a presidential title. But I think what my article demonstrates is that the reality of the matter is, is that Donald Trump likes to take a lot of advice from people. He doesn`t necessarily listen to anyone.

And I don`t think he`s going to necessarily get too hung up on who has a title or who doesn`t.

MATTHEWS: Well, my concern is, we had a president named W., George W. Bush, who didn`t have a foreign policy before he was elected. All of a sudden, he met Dick Cheney, who took over the foreign policy. And all of a sudden, we had a foreign policy, a guy who said there was nuclear weapons in Iraq.

And we went to war over that issue. It was a lie. Never told that by any of the intelligence people. He just made it up and got out into a war.

Anyway, Kushner`s lawyer, on the other side of this argument, points to language in a 1993 circuit court decision that found that the president`s spouse, then first lady Hillary Clinton, could be considered a federal employee in connection with her work on a health care task force. We all know that.

The judge in that case wrote that -- quote -- "Although the anti-nepotism statute defines agency as an executive agency, we doubt that Congress intended to include the White House or the executive office of the president."

That`s that judge`s opinion.

Let go to professor Clark on that.

Jamie Gorelick argues, the lawyer for president-elect Trump, that they have a right to pick anybody they want because the sweeping authority given to them in a law later on that superimposed itself on the anti-nepotism law said a president can pick anybody they want for anything. What do you think of that?


Well, so Jamie Gorelick I think has referred to that 1993 decision by the D.C. Circuit, by Judge Silberman. And that decision recognized that Congress acknowledged that a presidential spouse is different.

But a presidential son-in-law is not exempted from the laws, the way a presidential spouse is given a special status under that statute.

MATTHEWS: Because you`re living there. You`re in the White House. That`s where you are. You bring a brother-in-law in or a son-in-law in because you want to bring them in. You bring your suppose in because they belong with you. They`re supposed to be living with you .

They`re supposed to be part of your life. They`re supposed to be talking to you every night.

CLARK: No, that`s right.

And what Congress has done, as a practical matter, it has recognized that a presidential spouse has had official duties, not just ceremonial duties. And so in that court decision in 1993, the court said that a presidential spouse is a de facto employee.

MATTHEWS: I see, because first lady is such under our tradition of having male presidents.

CLARK: Correct. Correct.

MATTHEWS: Let me go back to the expert here, Andrew, great piece, everybody talking about it in "New York" magazine.

Talk about Jared Kushner. He seems to be a bit of a hawk on foreign policy, to put it lightly. He is very much a Netanyahu guy. He wants to the United States Embassy to move to Jerusalem, which is going to -- who knows what is going to happen. King Abdullah is really scared about what could happen. All the Sunni nations could say all of a sudden the United States has decided where it stands on the future of Jerusalem, including East Jerusalem, which we have never done before, because Trump is president and Jared Kushner is influencing him.

RICE: Well, Kushner is very much a hawk on Israel policy.

I mean, this goes all the way back to his family experience. His grandparents were actually Jewish resistance fighters in the forests of Belarus against the Nazis. And so they`re very, very hawkish on Israel.

And I don`t think -- this is one area in which -- I think some people have speculated that Kushner is a liberal on some issues, but on Israel, I don`t think that there is any daylight between him and...

MATTHEWS: Netanyahu.

RICE: Netanyahu.


MATTHEWS: That just raises the question of his power if he sits in the White House, where Trump doesn`t have much sophistication on the Middle East, to put it lightly, probably doesn`t have a position.

But Trump did run and got a lot of votes and support on the argument we are getting too engaged and too aggressive in the Middle East, too hawkish, if you will. And the neocons, he basically ran against. He said, look, I don`t want to get us involved in any more wars over there.

But moving the embassy and supporting all those settlements in the West Bank could well ignite trouble. I think everybody knows that. Does he know it?

RICE: I don`t know if intellectual consistency is necessarily going to be one of the bedrock principles of this administration.


Let me go to Kathleen.

Professor Clark, who has standing to sue the president if he picks -- if he goes ahead and makes this appointment?

CLARK: Well, a court has indicated that no one has actually standing to challenge it.

But what I want to point out is that there is an office within the executive branch that has the responsibility to investigate allegations of violations of this anti-nepotism statute. That`s the Office of Special Counsel.

And it will be up to the Office of Special Counsel to do that investigation. But then it will be up to Congress and the American people to decide whether or not it objects to and raises a ruckus essentially, the same way last week the people raised a ruckus when House Republicans attempted to the gut the Office of Congressional Ethics.

We will have to see.

MATTHEWS: Well, that was a good ruckus, because it worked. It stopped them in their tracks.

But I guess one thing I would argue is House members and senators cannot hire their relatives in their own offices because they passed a statute that stops them from doing it. You would think they would be keeping their eyes open to see Trump do the same thing they say they don`t think is right for themselves.

Thank you, Aaron Blake. Thank you, Kathleen Clark. And thank you, Andrew Rice. Again, congratulations on your story in "New York" magazine.

Up next, just over an hour from now until President Obama gives his farewell address out in Chicago. We have got an all-star roundtable coming here next, as we get ready for the president`s -- well, this is a biggie, the farewell address of President Barack Obama.

Plus, the latest on our top story tonight, the information U.S. intelligence has shared with Donald Trump that contained damaging allegations about Trump and his dealings with the Russians that the Russian now hold. Wow.

You`re watching HARDBALL, where the action is.


MATTHEWS: Back now to our top story of the night, the information U.S. intelligence shared with Donald Trump that contained damaging allegations about Trump and his dealings with Russians.

NBC`s Ken Dilanian is standing by with the latest.

Ken, give us an update on what we know about what the Russians hold in terms of information that may be damaging to Donald Trump.

KEN DILANIAN, NBC NEWS NATIONAL SECURITY CORRESPONDENT: So, Chris, we don`t know a lot of the details of what that information is.

What we know, according to multiple U.S. officials at this point telling NBC News, that president-elect Trump and President Obama were both presented with a two-page summary of unsubstantiated allegations said to be personally damaging about Trump and embarrassing presented in the intelligence briefing about Russian hacking and Russian interference in the election.

We also are told that the FBI has not verified the claims that were in this document, is not necessarily investigating them, but it`s the kind of thing that was explosive and that the intelligence community wanted the president-elect to know that it was out there and that they had the material.

MATTHEWS: Can we say or do you know whether it was conversations overheard that allowed -- or talked about this kind of information in the hands of the Russians? How was the information gathered? Was it electronically picked up from the conversations?

DILANIAN: We don`t have that reporting at this point, Chris.

MATTHEWS: OK. Thank you for coming on again tonight.

Malcolm Nance, of course, is MSNBC intelligence analyst. He`s our guy. And David Corn is the Washington bureau chief for "Mother Jones."

I want to come up with Malcolm first.

Malcolm, what do you know that you can add -- not add to this, confirm with this? Let`s stick to what we can report.

MALCOLM NANCE, NBC TERRORISM ANALYST: Well, sticking to what we can report, I find it very interesting that they would add a two-page supplement to a highly classified, top-secret SCI briefing for the president-elect of the United States and present it to the president of the United States.

Now, why would that be done? And some of this reporting, as I understand it, may come from David Corn, one of our next guests. They would add that so that they could protect their own sources and methods. They may have information that is out in the either that is highly classified that goes right to individual agents in the field, and they would not want to release that.

What they can do is release information that is identical, parallel and scrubbed of that source material and then put it into this report as uncorroborated. But that`s the only reason I can see why they would add this information to this high level of briefing.

MATTHEWS: Let`s talk to David Corn, who have I great respect for, in terms of your reporting ability and your zeal in getting it.

What should the average American out there who voted for Trump or against Trump be concerned about in this information? What is concerning here to a reasonable person?


What happened was a counterintelligence operative, official, from another service outside the United States had generated a bunch of memos during the summer while doing opposition research on Donald Trump in which he came to the conclusion that the Russians had mounted a five-year-long operation to co-opt or cultivate Trump.

And these memos involved some personal details saying that the Russians had gathered compromising information on Trump. But they also talked about contacts between people in Trump`s inner circle and Russian officials or Russian businesspeople.

So, it was a wide variety of information from his own network of sources. And that information, he passed along to the FBI throughout the summer. That information -- it`s several dozen pages of reports -- seemed to have been compressed into two pages that were presented to Donald Trump and to Barack Obama.

Again, the FBI says it has not confirmed the information and the allegations within this material, but it`s information and allegations that were quite troubling. I reported on this a week before the election, without getting into some of the details, because I didn`t think it was fair to publish and post unconfirmed allegations about Donald Trump or anybody else.

But this is something that the FBI has had for months now. And clearly they felt that the president-elect and President Obama needed to know about this. And what remains unclear, Chris, is to what degree this material has been investigated by the FBI.

MATTHEWS: Well, just to get back to what you said, just a kernel of it, it sounds like a carrot-and-stick operation, that they gave -- they cultivated him with blandishments and saying good things about him, but they also perhaps dug some stuff on him that would be something they could use to control him with.

CORN: Well, that was the -- one of the allegations in these reports did say that they had gathered compromising material on Donald Trump during his visits to Moscow.

Now, whether that`s true or not, we don`t know. And we don`t know to what degree the FBI has investigated and either confirmed or denied it.


MATTHEWS: That`s the KGB trick, right, to compromise people that come to their country.

Anyway, Malcolm, go ahead.

CORN: Well...

MATTHEWS: Go ahead, further thought.

CORN: No, I`m just saying it is very clear that when Donald Trump went to Moscow in 2013 in November for Miss Universe or any other time, he would have been under surveillance.


CORN: So, that just would have happened as a matter of course.

NANCE: Absolutely.

MATTHEWS: Malcolm, your thoughts. It sounds like we have heard -- been to this story before with different people.


MATTHEWS: Your thoughts.

NANCE: Well, it`s interesting, because, in my book "The Plot to Hack America," I wrote the exact same analysis without David Corn`s source, just extrapolating the intelligence that we already knew about Donald Trump, this operation would have had to take place no less than five years ago, not to cultivate him as an agent or a spy or anything like that, excuse me, but to cultivate him as a friendly person to Russia`s goal. And that was done. We all know that. He`s adopted their ideology to a certain extent.


NANCE: But the way that you recruit a person is through the MICE acronym - - money, ideology, cooption or coercion, and ego.

If they -- when he went to Russia, he would have been under intense, multi- spectrum surveillance. Telephones, video, you know, his phone is unclassified, unsecure, they would have had access to every word that he said. They could have put him under full scale surveillance. Would have every person that he met, his television, his room would have been bugged with video. They could have immense amounts of data on him that would have care carried on after he left Russian, because he`s such a high profile person.

MATTHEWS: But he wasn`t running for president back then either.

Anyway, thank you, Malcolm Nance, the old rule, and, David Corn, when you go to bed with dogs, you get flees.

Anyway, that`s a live picture right now of McCormick out of Chicago, and that`s where President Obama will be delivering his farewell address, just like George Washington, Ike Eisenhower, a farewell address, coming up at 9:00 Eastern on MSNBC.

We`re going to talk about the president`s legacy coming up in just a minute, and his call to arms to expect to hear -- we`ll be expecting to hear from him about the future tonight.

This is HARDBALL, where the action is.


MATTHEWS: Welcome back to HARDBALL.

When President Obama delivers his farewell address tonight at 9:00 Eastern, he will be tenth president to formally say good-bye to the American people. The first farewell, just of course, written by George Washington, just write back then, remains one of the most influential statements in American history.

Our first president warned that factions or political parties could threaten our unity and warned future president they should steer clear of permanent alliances. Boy, I`m with him on that.

Following in the footsteps of George Washington, Ronald Reagan, and Bill Clinton, tonight`s speech will be an opportunity to look back at some of President Obama`s successes, and there also have been a few of them.

When he took office, unemployment was over 7 percent, in its way to 10 percent. Ten percent in the spring of 2009. Today, it`s a little over 4 percent.

When he took office, the Dow Jones had a 12-year low, nearing 6,500, I should. Today, it`s near 20,000, three times. You think Republicans would be dancing in the streets if one of their guys did it? They`re just getting rich over it. If you want to live like a Republican, vote (ph) like a Democrat, they use to say.

Health insurance for 49 people, 49 people didn`t have it, now only 29, I shouldn`t say only, but 29 don`t have it -- 29 million.

Anyway, four states had marriage equality back in 2009, 50 do now, thanks to the Supremes.

It also be a final chance tonight for the former community organizer, if you will, to call on future generations of leaders to get involved, in fact, become leaders.

For me, let`s bring super round table. Joy Reid, of course, host of MSNBC`s "A.M. JOY" which the guest the best Fridays in our timeslot in history. We pay attention to ratings.

Dan Rather, anchor of AXS TV, and Bob Herbert, I read all the time, distinguish senior fellow at Demos, and also writes for "The Times" very often.

So, let`s go across the room. What`s the biggest story tonight, is it speech of the president going away? Is it the problems that Jeff Sessions is having over his civil rights history? Is it the Russians have some dirt on Donald Trump? I know what you think.

JOY REID, A.M. JOY: Yes, I think it`s latter. But I think it is also the pivot. It is quite a pivot to go from President Obama who, you know, E.J. Dionne and I have a new book out about his speeches. We both agree that the idea of perfecting the union, a more perfect union, has always been this guiding principle, both in his speeches, as well as just in his vision.

So, you look at that litany of things you ticked off. We need universal health care. We want to get to a place where gay and lesbian folks are equal.

He`s also talking about perfecting the union. It`s a very sort of -- it`s an encouraging vision that no matter how divided we seem, we all do believe in the core principles of the country.

MATTHEWS: Have you checked this with him?

REID: I mean, anyone you talk to around him. I have interviewed tons and tons of the people who know him, and this is what he actually believes. I mean, he really does believe in the guiding principles that the country was founded on, that even when the founders themselves were not able to live up to that same perfection, he really believes in the experiment.


REID: You`re going from that guy who believes in his core, in the American experiment in this more perfect union, to a guy who couldn`t be more opposite, who believes the experiment has failed. The whole --

MATTHEWS: It`s always going to be a war between those who want --


REID: Right. And now, you have somebody who compromising that. You know, what we`ve learned about Trump, it is troubling and it is quite a bit --

MATTHEWS: Dan Rather, what`s the big news tonight that you think is worth commenting on as you sit here?

DAN RATHER, AXS TV: Two things. First of all, I`m a breaking news guy. And these allegations, and I underscore the word, these allegations about what the Russians may or may not have on Donald Trump, in many ways whether it`s true or untrue, a lot of damage has already been done, because it raises new questions about who this man is, who`s coming into the presidency. So, tonight`s breaking news just broke a few hours ago --


RATHER: -- I would be over that like a hawk on a rabbit. But --

MATTHEWS: Where do you get that from, hawk on a rabbit?


RATHER: But big picture, big story for story, is here once again, we`ve had a peaceful transfer of power, under pressure, tension, division, and the American experiment and a constitutional republic based on the principles of freedom and democracy, and is continuing ability to have peaceful transfer of the ultimate power at the top, is the ongoing big story of our beloved United States of America, surely this week.

MATTHEWS: Let me ask you, if Donald Trump had won the popular vote by 3 million votes and had lost in the Electoral College, would it have been peaceful?


MATTHEWS: OK, thank you.

BOB HERBERT, DEMOS: I think the Russian story, and the latest allegations, and you`re right, there`s just allegations at this point, I think that`s the big story. I think it`s a continue -- this advances this Russian story that we have been following day-by-day, anyway. So, that`s one story that`s the big story.

MATTHEWS: Is that because you were like us wonder about what Putin is up to? He`s a KGB top guy.


MATTHEWS: He thinks in terms of intelligence and how he can manipulate people or scare or kill them with information.

HERBERT: The question becomes whether the president of the United States is compromise in terms of making decision that are in the best interest of the people and the government of the United States, or whether there`s something holding him back from making what are the best decisions. So, I think that`s one story.

I think the other story is, and this goes back to what Joy was saying -- we`re going to go through a real culture shock in this country now. These two presidents, one going out and one coming in, are so different.

One in terms of behavior. Obama is like this thoughtful, dignified, the epitome of what you think --

MATTHEWS: Clean. Can we say clean? Because he is. There hasn`t been a scandal in eight years.

HERBERT: No scandals. I mean, so he`s the epitome of how one thinks a president should behave.

Trump is the opposite. He`s quite different.

MATTHEWS: He`s messy.

HERBERT: We all know what Trump is like.

But then there`s going to be the culture shock in terms of policies. So, Obama has been this, you know, moderately progressive president who came in under terrible circumstances and I think has done a really good job, maybe not a perfect job, but a really good job over eight years. And Trump is going to try and turn all that around and I think the public is, one, going to be shocked by that and much of the public is not going to be happy.

MATTHEWS: Why is he doing it? I don`t think he has ideology. Is he just selling out to people like Jeff Sessions? He owes them votes?

HERBERT: It`s hard for me to get into Donald Trump`s --

MATTHEWS: Trump`s not a right winger, I don`t think, at all.

HERBERT: My feeling is that he doesn`t really even understand the major issues facing the country right now and I think he`s clearly not qualified to be president.

MATTHEWS: You don`t think he`s pro-life or anti-gay or any of those sentiments. I don`t think he shares any of them. He`s just put together a coalition which requires that.

REID: I don`t think Donald Trump has spent ten minutes thinking about any of the great issues of the day.

MATTHEWS: Social issues, yes.

REID: I don`t think he thinks about it, anything other than how to aggrandize and advance the persona of Donald Trump. I think that`s the only thing and all of his biographers are unanimous on it. He cares about one thing -- aggrandizing Donald Trump and causing the world to praise Donald Trump.

RATHER: I think that`s right on. If you want to state it more gently, he`s all about brand.


RATHER: The Trump brand. It`s all about brand. Almost nothing else matters.

MATTHEWS: You don`t include narcissistic rage in that?

RATHER: I would include narcissistic rage. Remember, I`m a former network television anchor person. I know about narcissistic rages.


MATTHEWS: Going after Meryl Streep, you have to wonder if that helps him.

RATHER: When Donald Trump`s feet hit the ground every morning, what he aspires to, his distant guiding star and a way he wants to be, what Obama has accomplished. Obama, whether you like him, don`t like him, however you feel about him, he`s a candidate to be -- his portrait will be on currency or on a coin in the future because he was the first person of minority to be elected president. So, that`s assured. That`s what Trump wants.

MATTHEWS: I think the Jackie Robinson motto was there, too, he had to be perfect.


MATTHEWS: Anyway, in an exclusive interview with my colleague, Lester Holt, President Obama previewed his speech. Here`s what he told Lester aboard Air Force One.


LESTER HOLT, NBC NEWS: Tonight, you`re going to talk to the American people. Is this a hard one? Do you know what you`re going to say?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know what I`m going to say. I got to make sure I get through it properly.

You know, when you reflect back on eight years, for all the highs and lows, the one thing is that is a constant is the incredible dedication of the people who got you there. And who helped you do your job. Everybody from the staff at the White House to the folks who make sure this airplane flies, to supporters who would write me notes, you know, when things weren`t going well, to the people who would say that the work we did made a difference.

And so, I think that sense of gratitude that I feel for those folks, I just hope I`m able to express that.


MATTHEWS: Thermostat question. Is he too cool or not hot enough? Or that`s the same question? On temperature, should he have been hotter as president, the first African president?

REID: I think there were moments when he should have been hotter as president on issues regarding race, but I don`t think he couldn`t. He was Jackie Robinson.

MATTHEWS: Too cool or not?

RATHER: I think you got it just about right, not too cool and not too hard. There are certainly times you could argue about it. But in general, you got the tone right.

HERBERT: I wanted him a little hotter because I wanted him to push back more against the Republicans, and then when they were obstructing I wanted them to use the bully pulpit more.

MATTHEWS: I like that idea. Anyway, Joy Reid, thank you, as always. Thank you, Dan Rather, my hero, and Bob Herbert who I read.

And when we return, let me finish the president who is leaving.

You`re watching HARDBALL, where the action is.


MATTHEWS: Let me finish with the president who is leaving. I was there in those high school assembly halls and college field houses when Barack Obama moved across the country in 2007 and 2008 speaking of hope and change, and I as I said at the time, was moved by his words, emotionally moved.

I`ve never apologized for it because what he said was about our country and its greatness. What a person born here can achieve. Why every person who has come here has done better than they did before, that this America of ours is not just great but it`s the land of greatness. It`s our politics that has held us back, the endless backbiting and stall games. That instead of one party being the watchdog of the other, keeping it out of mischief, each party instead spends its best efforts keeping the other party from getting anything done for fear it might gain credit.

Well, tonight, leading up to the president`s farewell address is a bit. I`m going to give you a bit of when then-Senator Barack Obama said at the University of Wisconsin on February 12th, 2008.


OBAMA: It`s a game where Democrats and Republicans fail too come together year after year after year while another mother goes without health care for a sick child. That`s why we`ve put -- we have to put an end to the divisions and distractions in Washington so that we can unite this nation around a common purpose, around a higher purpose. It`s a game where the only way for Democrats to look tough on national security is by talking and acting and voting like Bush/McCain Republicans while our troops are sent to fight tour after tour of duty in a war that they should never been authorized and should have never been waged.


MATTHEWS: Looking back and listening to those words I can see why I was thrilled. Mr. President, thank you for having the courage to stand up for this country.

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

"ALL IN WITH CHRIS HAYES" starts right now.