Hardball with Chris Matthews, Transcript 8/3/17 WSJ: Mueller impanels DC Grand Jury in Russia Probe

Guests: Eli Stokols, Joyce Vance, Ezra Klein, Greg Miller, Jeanne Shaheen

Show: HARDBALL Date: August 3, 2017 Guest: Eli Stokols, Joyce Vance, Ezra Klein, Greg Miller, Jeanne Shaheen

CHRIS MATTHEWS, HOST: A Trump grand jury.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

There are new developments in the special counsel`s probe into Russian meddling in the 2016 campaign, into potential Kremlin collusion with the Trump campaign and possible obstruction of justice by the president himself.

"The Wall Street Journal" is now reporting today that Robert Mueller has empaneled a grand jury in Washington, D.C., a move that legal experts say suggests he believes he will need to subpoena records and take testimony from witnesses.

"The Journal" says that the grand jury, which reportedly began its work in the last several weeks, is a sign that his inquiry is growing in intensity and entering a new phase. NBC News has not independently confirmed "The Wall Street Journal`s" reporting.

On his way to board Marine One tonight at the White House, the president did not respond to questions shouted over the noise of the helicopter about whether he would now decide to fire Robert Mueller.

(BEGIN VIDEO CLIP)

QUESTION: Mr. President, are you considering firing Robert Mueller?

QUESTION: Will you hold a news conference again?

QUESTION: Are you going to fire Mueller?

(END VIDEO CLIP)

MATTHEWS: Well, this hour, the president will take the stage at a campaign-style rally in Huntington, West Virginia. We`ll be listening for any real news in his speech tonight.

Joining me right now, however, is Eli Stokols, White House correspondent with "The Wall Street Journal," Robert Costa, national political reporter with "The Washington Post" and an MSNBC political analyst, and Joyce Vance, a former U.S. attorney. Thank you all for joining us.

First of all, give us the story "The Journal`s" reporting tonight about this D.C.-based grand jury working for Mueller.

ELI STOKOLS, "WALL STREET JOURNAL": Right. It seems like it`s been -- was empaneled a couple weeks ago. And the difference -- there was a grand jury, is a grand jury working on the Flynn investigation that`s based in Virginia. This is a different one and a sign to a lot of people who -- who know a lot about this stuff, have seen this over several decades, that you don`t do this if, you know, you`re investigating a jaywalking charge.

This is a serious -- a sign that this is a serious probe, that it`s just getting started, that they want to use this grand jury to really subpoena a lot of information, get information from people, find evidence, and that they`re going to do it in a manner that makes it easier on Bob Mueller, who works in Washington, and on his team of attorneys working on that case.

And the people who look at this just say, Look, you never know where these grand juries lead. But this is really a sign that this is something that is in the beginning phases and that maybe expanding somewhat and growing in scope. The president set down sort of a red line...

MATTHEWS: That`s his red line.

STOKOLS: ... a couple weeks ago -- right. It was his red line...

MATTHEWS: It`s not Mueller`s red line.

STOKOLS: ... saying, Focus on Russia. Don`t look at my finances.

You know, earlier, just a few days ago, we heard news of an attorney joining Mueller`s team who is a, you know, high-profile highly paid white collar crimes defense attorney. Looking at white collar crimes, that -- now this grand jury (INAUDIBLE) probably -- you know, seems pretty clear that this is not just going to be a narrow focus on...

MATTHEWS: It sounds big to me.

STOKOLS: ... on Russia.

MATTHEWS: Joyce, give a sense about the importance of empaneling a grand jury given the mandate of this special counsel. His mandate is to take up any matter that arose or may arise directly from the investigation. Any aspect of dirt he sees, anything that looks interesting or a problem, under the law, he can go after.

JOYCE VANCE, FORMER U.S. ATTORNEY: I think that`s right. And this move to using a grand jury that`s been empaneled in the District of Columbia is particularly important because it signals that he`s moved past investigating only allegations regarding perhaps General Flynn and Paul Manafort, and now he`s moved on to allegations where the venue, where the events, took place in the District of Columbia.

That means he might have expanded the investigation to look perhaps at obstruction of justice and events that occurred inside of the White House, false statements that were made by people either on their security clearance papers or on other paperwork submitted to the government, perhaps false statements made in the course of interviews with the FBI. This signals a broadened investigation.

MATTHEWS: Well, as Eli mentioned, the news of a grand jury comes after President Trump warned Special Counsel Mueller last month that any investigation into his personal finances would be -- here`s Trump`s word -- a "violation." Here`s the president in his Oval Office interview with "The New York Times."

(BEGIN AUDIO CLIP)

MICHAEL SCHMIDT, "NEW YORK TIMES": If Mueller was looking at your finances or your family`s finances unrelated to Russia, is that a red line?

MAGGIE HABERMAN, "NEW YORK TIMES": Would that be a breach of what his actual (INAUDIBLE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I would say yes. I would say yes.

SCHMIDT: If he was outside that lane, would that mean he`d have to go?

HABERMAN: Would you consider...

TRUMP: No, I think that`s a violation.

SCHMIDT: What would you do?

TRUMP: I can`t answer that question because I don`t think it`s going to happen.

(END VIDEO CLIP)

MATTHEWS: Well, of course, Mueller`s probe is authorized to investigate, as I said a moment ago, quote, "any matters that arose or may arise directly from the investigation."

Robert, you know this president pretty well. He seems to believe for some reason there is a red line, that somehow, Mueller`s scope of his investigation only includes the Russia stuff.

ROBERT COSTA, "WASHINGTON POST," MSNBC POLITICAL ANALYST: It`s hard to speculate about what the special counsel is up to with the grand jury because it is a grand jury investigation.

But we can discuss the political cost for this president and this White House. This news comes as the new chief of staff, General Jack Kelly, is trying to get this White House moving in a different direction. And he knows, according to my sources in the West Wing, that the president has been tempted in the past to fire Bob Mueller. He has the right, as president, to do so. And this White House, many people inside of it, do not want the president to move in that direction.

Can they rein him in as he sits in the White House tonight, watching cable news coverage, digesting this information that Mueller once again is at the forefront of national news? Can the president resist going after him?

MATTHEWS: But we`ve seen this, Eli -- we`ve watched -- if you`re the president -- put yourself in his shoes. I try to do this sometimes. In this case, I`m thinking, Oh, my God, it`s almost like "Macbeth." The armies are coming towards the wall of your castle. They keep advancing. You see the fires lit. You see the movement toward -- the siege towers coming at you. (INAUDIBLE) do anything about it or let it happen?

STOKOLS: Yes, the...

MATTHEWS: Donald Trump doesn`t seem like the kind of guy lets anything happen.

STOKOLS: Well, he`s talking about witches, a witch hunt. But you know, this is a real thing, as we know from the news today. And Bob is right. This is something that agitates him. It eats on him when he...

MATTHEWS: Well, it should.

(CROSSTALK)

MATTHEWS: He`s under investigation by a counsel who has unlimited scope!

STOKOLS: But the problem is he oftentimes puts himself in an even tighter straightjacket by sort of wanting to react, wanting to do something, believing that, Look, this is a political problem that I`ve got to solve right now.

And so he tweets. You know, a few months ago, what did he do? He went and fired the FBI director. That`s what snowballed into the appointment of a special counsel in the first place. So it is probably a nerve-racking time for the new chief of staff to sort of, you know, cross his fingers and really try to implore the president not to act rashly.

MATTHEWS: Well, Joyce Vance, let me ask you a couple things. As this case advances, as it`s clear that the grand jury is being empaneled and that Mueller is on the hunt and he`s trying to get subpoenas to bring in more evidence, more business news -- I mean, business documents -- it could be the taxes he`s after, the tax returns. We know that has always been a target of usefulness for him.

Does there become a point where it becomes harder for Trump to move because of obstruction of justice issues?

VANCE: It`s really I think we`re at that point now. This news about this new grand jury is out there in the public. It would be a mistake for Trump`s team to forget that Bob Mueller has a track record on the Hill. These are people who are used to being briefed by Mueller. They know Mueller. He has a high level of credibility with them.

And when we hear people talk about the rule of law and that America is a rule of law-based democracy, what that really means is that no person is above the law, not even the president. For the president to try to cut off an investigation that went not only to his associates or his family, but perhaps reached him personally, that would be the absolute bare bones example of a president violating the rule of law.

I don`t think the folks on the Hill will let him do that, certainly not by firing Bob Mueller.

MATTHEWS: Well, the prospect that President Trump may actually attempt to Robert Mueller has prompted lawmakers to take steps to actually protect the special counsel from being unfairly dismissed. Earlier today, Republican senator Tom Tillis of North Carolina and Democrat Chris Coons of Delaware introduce legislation letting any special counsel for the Department of Justice challenge his or her removal in court.

If passed, the bill would apply retroactively back to May of `17 -- may of this year, the day Mueller was actually appointed. It`s a sign of the growing bipartisan consensus, you could say, that the Mueller investigation must continue unobstructed. Asked today what would happen if Mueller was fired, Republican senator Jeff Flake of Arizona said Congress would take action to reappoint him.

(BEGIN VIDEO CLIP)

SEN. JEFF FLAKE (R), ARIZONA: I think that if he were to be removed, however it`s done, by the assistant attorney general or a new one, Congress would assert its prerogatives, and that would mean hiring a special prosecutor that might even be Bob Mueller.

(END VIDEO CLIP)

MATTHEWS: You know, Robert, it just seems that -- interesting things Washington as they develop into a reality. It seems like both parties, with some exceptions, are accepting the fact that Mueller is legitimate, that his mission, his mandate is legitimate, that he has to get to the bottom of this Russian connection, if there was one in the campaign, possible collusion, but also the whole question about this has to be dealt with.

It seems like you can`t put your hand up now and say, Stop Mueller, and be legitimate as a politician in this country, neither party. It`s getting there.

COSTA: There`s a genuine stand-off happening right now between congressional Republicans and the White House. And it goes beyond just Robert Mueller and the special counsel. Look at how Republicans on Capitol Hill are acting on the sanctions legislation. They`re saying to the White House and the president, You sign what we want. We`re shaping foreign policy on this, not you.

MATTHEWS: Could they -- if he fired Mueller somehow, went through the route that Nixon went through, fire, fire, fire, until you fire the guy you want to fire -- Eli, let me ask you that question. Does the Congress have the juice right now to say, We`ll override with you a veto and reestablish an independent counsel?

STOKOLS: I think they`re starting to feel like they may. You know, six months ago, when this was supposed to be the dawn of a new Republican era of dominance in Washington, D.C., there was a lot of optimism and less willingness to sort of rock the boat and to step (ph) to this White House. Everybody wanted to get along and accomplish some big ticket things. That hasn`t happened.

This investigation thing continues to sort of spiral and snowball. And so what you`ve seen, I think, in the last week or two in particular is more of a willingness to stand up to this White House.

MATTHEWS: Yes.

STOKOLS: You saw it on the sanctions bill. You saw how much that upset the president to feel boxed in and have to sign that thing. And so -- and I think the president, too, is eager to distance himself. You know, he put the onus on health care on Republicans. He kept saying, They have to do this, they have to do this. And so you do see greater distance.

MATTHEWS: Yes. And the more he punches him in the ears, if you will (INAUDIBLE) cauliflower ears listening to this guy beat them up. He`s always beating up the Congress. They feel there`s a we-they situation. They`re not together on this thing with Russia. The Congress has no stake in defending the president...

(CROSSTALK)

COSTA: ... got a real challenge because they look at the president`s falling poll numbers nationally, and they see a weak president. But look at his numbers among Republicans, and they say he still has the bait (ph).

MATTHEWS: Oh, I think that`s (INAUDIBLE)

COSTA: So if you break with him here in D.C., what`s the cost you pay back home?

MATTHEWS: I`m not sure. We don`t know yet.

Anyway, President Trump`s legal team is weighing in on the breaking news reports that special counsel Mueller has empaneled a grand jury. Here`s the president`s attorney, Jay Sekulow. Let`s listen.

(BEGIN VIDEO CLIP)

JAY SEKULOW, TRUMP LEGAL TEAM: With respect to the empanelling of the grand jury, we have no reason to believe that the president is under investigation here.

(END VIDEO CLIP)

MATTHEWS: Well, there`s a bit of Baghdad Bob in that guy. Anyway, NBC News confirmed in June that President Trump is under investigation for possible obstruction of justice. Already done, Jay. This guy, Jay, is unbelievable! He is -- I don`t know if he -- he reminds me of the some of the guys defending Bill Clinton in the old days, like Lanny Davis. They don`t even have to talk to their guy, they just say he`s innocent every (ph) hour (ph).

STOKOLS: And he got the job because he`d go on TV and just...

MATTHEWS: And say that stuff.

STOKOLS: ... and say that stuff, yes.

MATTHEWS: He`s basically a television lawyer.

STOKOLS: Yes.

COSTA: I don`t disagree with that. In fact, some people around President Trump have looked to the Clinton experience in the late 1990s as a model for how they`re proceeding.

MATTHEWS: (INAUDIBLE) deploying of those people out there just to defend him cold.

COSTA: Because you don`t see the lawyers out there -- you don`t see the lawyers who are actually the litigators. We see the people who are kind of lawyer-slash-spokespeople on television.

STOKOLS: The problem is this plays out so much in the court of public opinion, on television...

MATTHEWS: I know.

STOKOLS: ... in the papers, and you`ve got this guy out there saying things like, you know, The president had nothing to do with that Don, Junior, statement. Well, then news comes out that he did. They get entangled in so many...

MATTHEWS: I agree.

STOKOLS: ... so many lies, and then that`s all in the public realm. And there just -- there`s diminished trust.

MATTHEWS: Eli and Robert, let me get back to Joyce Vance, who`s been a prosecutor. Joyce, it seems to me that if I were a prosecutor and I`m all -- I`ve got a long career behind me, and in fact, a fabulous resume, I must say, like Bob Mueller, who`s done everything right in his life -- here`s the cap of his career, perhaps the last professional chapter, and there`s this guy getting ready to make this case.

I would think every time I heard any of this flackery coming from the White House or its lawyers, all this denial of the obvious, I`d just get a little more juice when I got up in the morning and say, I want to get the job done here despite all that.

VANCE: A great thing about being Bob Mueller is that you have nothing to prove. And that`s true of a lot of the people on his team, as well. These are people who`ve had storied careers. They`re legends inside and outside of the Justice Department.

My suspicion is that they`re really not paying a lot of attention to what`s going on in the White House. Instead, they`re waking up every morning. We know now that Mueller`s group is divided into teams, looking at different allegations, different potential crimes. They`re compiling evidence, putting it onto a timeline, now going to a grand jury for whatever witness support or whatever documents they need. And they`ll be focused on getting to the end of this investigation as quickly as possible. That`s what the American people deserve right now.

MATTHEWS: When would you see in a normal course of an investigation -- this has got all the elements (INAUDIBLE) like an archipelago. I mean, there are so many tributaries to this story.

VANCE: Right.

MATTHEWS: Especially with the Trump empire out there and all the possible bribery, possible whatever went on with money laundering, all the possibilities, what he came into the office with or he came into the campaign with -- when do you see a climactic month. Is it a year from now? When can you see it heading up to a -- to a reckoning?

VANCE: It`s really hard to predict that. With all investigations of this nature, you start at the core. You move out to the periphery. Investigations can morph. In fact, you expect them to change maybe in scope or in focus a little bit as you uncover more information.

I don`t think we can say Mueller will be done next month or in a year. He`ll be done when he`s done. That`s a tough answer for people to hear, but that really is the truth in this regard.

MATTHEWS: I think it`s a tough thing for the man in the White House to hear. Anyway, thank you, Eli Stokols, sir. Thank you. Congratulations to your newspaper on this, "The Journal," "The Wall Street Journal." Robert Costa, as always, sir, and Joyce Vance, thank you for your expertise, Joyce Vance.

Much more ahead on the Trump-Russia investigation, including a new report that the acting director of the FBI told top FBI deputies, officials around him, they may be asked to testify against Trump. And one law enforcement official said this is no longer Comey`s word against Trump word. It`s the FBI against Donald Trump, and that`s ahead. He told all his deputies what Trump said to him. This is very dangerous for the president. There`s contemporary accounts now of what Trump said to his FBI director before he sacked him.

Plus, "The Washington Post" obtains the transcripts of President Trump`s phone calls with the leaders of Mexico and Australia. While they reveal a lot about this president, they also raise questions, let`s be serious, from both right and left about leaks of such documents. Can you keep your conversation with any president now secret? Apparently not.

And President Trump has been playing to his base, the people who put him in the White House. Tonight, he`s giving them more of the red meat out there in West Virginia with a campaign-style rally, where his approval ratings are some of the highest in the country.

Finally, let me finish tonight with "Trump Watch." He won`t like it. I think he`ll like West Virginia more than my "Trump watch."

This is HARDBALL, where the action is.

(COMMERCIAL BREAK)

MATTHEWS: Just a short time ago, President Trump`s lawyer weighed in on reports that he may be looking to fire special counsel Mueller, especially given the reporting that Mueller has empaneled a grand jury. Let`s listen.

(BEGIN VIDEO CLIP)

SEKULOW: The president is not thinking about firing Bob Mueller, so this is just -- the speculation that`s out there is just incorrect. I mean, that would -- that would...

UNIDENTIFIED MALE: And would you advise him, even regardless of a grand jury, that that would be a bad idea?

SEKULOW: Well, look, my job is to -- my job is to deal with what? I`ve got to deal with the facts as we have them and the case as we have it. The decisions the president were to make on Bob Mueller is a decision that we`re -- I`m not involved and would not be involved in. And frankly, the president has not raised with me, with our legal team, the dismissal of Bob Mueller.

(END VIDEO CLIP)

MATTHEWS: As I said, Baghdad Bob.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL.

With the president under criminal investigation now for possible obstruction of justice, there are new signs today that the case against him is stronger than was previously reported.

The news site Vox is reporting that, after the firing of James Comey, acting FBI Director Andrew McCabe told several of the highest-ranking members of the bureau -- that`s the Bureau of Investigation -- they should consider themselves possible witnesses in any investigation into whether President Donald Trump engage in the obstruction of justice.

According to investigators, as many as 10 and possibly more of the nation`s most senior law enforcement officials are likely to be questioned as part of the investigation. The witness list and possible -- and breadth of possible action could add up to a much stronger obstruction of justice case than Trump could have ever imagined.

Why? Because James Comey actually shared detailed accounts of his Trump conversations with some of his top FBI directors in real time, as the events occurred, which gives it tremendous authenticity.

Since abruptly firing Comey in May, the president has repeatedly tried discredit the former FBI director as a self-promoter, a leaker, and implicitly a liar.

(BEGIN VIDEO CLIP)

QUESTION: Mr. President, why did you fire Director Comey? Why did you fire Director Comey?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Because he wasn`t doing a good job, very simply. He was not doing a good job.

Director Comey was very unpopular with most people.

Look, he`s a showboat. He`s a grandstander. The FBI has been in turmoil. You know that. I know that. Everybody knows that.

No collusion, no obstruction. He is a leaker. James Comey confirmed a lot of what I said. And some of the things that he said just weren`t true.

(END VIDEO CLIP)

MATTHEWS: And never forget he told the Russians, of course, including the former minister of Russia, that the reason he got rid of Comey is because he was on the Russia story, he was going after the Russia investigation. That`s the truth, finally.

Why do only the Russians get the truth from this guy?

Anyway -- anyway, Trump`s defenders have argued that it`s the president`s word against Comey`s, one-on-one kind of thing.

But as one senior law enforcement now says: "This has never been a case of the word of Donald Trump against what James Comey had had to say. This is more like the Federal Bureau of Investigation vs. Donald Trump."

I`m joined right now by Ezra Klein, founder of Vox.com.

Ezra, thanks so much for joining us tonight.

This is one heck of a story, because, you know, the fact that Comey -- and this is in your report -- it`s the heart of it -- went around after he talked to Trump on all those many occasions on the phone or in person, and made a point, like good FBI agents do, of basically documenting the experience and the wording he got from Trump and sharing it in the moment and, at one point, letting somebody else on the phone to listen to the president.

Tell us all about the story.

EZRA KLEIN, CO-FOUNDER, VOX: This is a fantastic story by Murray Waas. He`s a great investigative reporter.

And what he found out is that, from pretty early on, James Comey -- and James Comey has said this, by the way, in public testimony in a different way. James Comey realized something was wrong. He was having these conversations with Trump.

They were unnerving him. He`s an FBI guy, and he knows when things are wrong. And so he began reaching out to a circle of lieutenants pretty early on and sharing very detailed information about the conversations he was having with Trump.

In one case, his chief of staff was actually in the room when Donald Trump called him, and he stayed in the room and listened to Comey`s side of the conversation.

Now, the reason this is important is that the Trump administration has been saying, look, even if this does get down on some kind of court case, it is just Donald Trump vs. James Comey, and who are you going to believe, the president or the showboat?

But now where we`re going is that, in fact, there were a lot of people in real time who will be called on by this grand jury, or likely to be called on by a jury, to say, hey, did James Comey say any of this to you? Do you have contemporaneous accounts?

We know, in some cases, they were taking notes of what Comey told them as well. So, now you have notes on notes on notes on notes. And FBI officials are very good at testifying in front of juries. They are respected. They come from an institution that commands pretty broad public trust. And they`re not novices at this. Donald Trump is.

MATTHEWS: Right.

You know, in horrible cases like rape and cases like that you hear about, a woman, for example, that was molested or raped, something horrible, and actually used to be a capital crime, and she will tell somebody about it. And she will tell a couple people about it at the time.

And that gives tremendous credibility to her account. And it is critical in many cases to have someone else who says, yes, I know it happened because she told me about it right at this moment.

But here you have a case -- and tell me more about this -- the FBI agents become sort of collateral witnesses, because these men and women, that`s what they do. They testify. They document. They know how to put documents together. They know how to make cases.

He has got a bunch of these people around, you said in your story as many as 10, who are willing to corroborate his evidence, and it is his evidence, now shared by others, that the president tried to influence him.

KLEIN: So, if a grand jury is trying to deal with the question, if any kind of jury is trying to deal with the question, is James Comey credible, is what he is telling us credible, they are going to look for signs along the way that there`s corroborating evidence, that other people heard what he said, that his story was the same from early on.

And what is interesting about this is, this should not be a surprise. We know James Comey was taking notes from very early on. And he came out and he said in his testimony before the Senate that he was doing that because he realized something was wrong.

So, we know from Comey`s notes, which have now been shared and put to the press, that, from early on, Comey was trying to create a paper trail, that he began to sense that he might actually need corroboration. So it is actually not shocking that he was also going to his top lieutenants.

The other thing, by the way -- and this is important -- he wasn`t just going to them to tell them what was going on, to cover himself. He was going to them to actually discuss, what should he do?

In a couple of the cases that we know about, he was actually going to his top lieutenants and say, do we go tell somebody? Do we go to the DOJ and talk about what Donald Trump is doing? Is there some way for us to stay out of trouble here? Should we accede to Trump`s requests to say that the investigation is not about him?

So, part of conversations he was having with his inner circle were also a normal matter of course within the agency, which is part of why they were taking notes, part of why there was a document trail, because they actually had to make decisions about what the FBI should do in order to protect its own credibility.

But now a grand jury can look at that and say, OK, these guys were actually trying to think of something in real time here. There is some evidence of it.

MATTHEWS: That`s great.

KLEIN: And all of it points in the same direction, which is that these conversations really did happen, presumably, if this is what the witnesses are saying, if it`s what the paper trail says, in the way James Comey said they did.

MATTHEWS: Solid, clear, understandable, great reporting.

Ezra Klein of Vox, thank you so much.

KLEIN: Thank you.

MATTHEWS: Up next: more damaging leaks coming from people connected to the White House. Today, "The Washington Post" published transcripts of the president`s telephone conversations with the presidents of Mexico and Canada. It raises the question -- actually, Australia -- who is doing the leaking?

This is HARDBALL, where the action is.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: We will build a great wall, and Mexico will pay for the wall, 100 percent.

Yesterday, the top person, president of Mexico, said, we will never, ever pay for that wall. Do you know what I said? I said, the wall just got 10 feet higher. That`s right. It`s true. It`s true.

(CHEERING AND APPLAUSE)

TRUMP: And we will build a wall. Don`t worry. We will build. I promise. We`re building the wall. And Mexico will pay for the wall. I promise.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Throwing red meat into the cage there.

Welcome back to HARDBALL.

Nothing was more dramatic in Donald Trump`s campaign than his promise to build that big, as he called it, beautiful wall on the border with Mexico.

Well, newly released transcripts of the president`s actual conversation with the Mexican president this January, the issue of the wall was more like a nuisance he had to deal with.

According to "The Washington Post," which obtained a transcript of the January 27 call, the president said: "You and I both have a political problem. My people stand up and say, Mexico will pay for the wall. And your people probably say something in a similar, but slightly different language."

I would say.

"But the fact is, we are both in a little bit of a political bind, because I have to have Mexico pay for the wall, and I have to. I have been talking about it for a two-year period. And the reason I say they are going to pay for the wall is because Mexico has made a fortune out of the stupidity of U.S. trade representatives."

Well, President Trump added: "Believe it or not, this is least important thing that we`re talking about, but, politically, this might be the most important to talk about. But in terms of dollars or pesos, it is the least important thing."

Well, "The Post" also obtained a transcript of a call, a television -- a telephone call, President Trump had with the Australian prime minister.

And Greg Miller is the reporter who broke the story today for "The Washington Post."

OK, let`s just talk about the politics of this thing.

What does it tell you when you came across these gems about the president`s politics here at home? What is he up to, talking to this guy about don`t talk about the wall?

GREG MILLER, NATIONAL SECURITY CORRESPONDENT, "THE WASHINGTON POST": Well, to me, there`s a huge disconnect, right, between what he`s saying publicly about the wall and what he`s saying privately at the very outset of his administration in his first conversation with the Mexican president.

He is basically trying to enlist the Mexican president in a political charade here. Everybody knows you are not really going to have pay for the wall, but I cannot deal with it if you keep saying that you will not pay. I need you to help me maintain this fiction for my base.

MATTHEWS: See, in other words, if he really was going to make the Mexican government pay for the wall, you can say it`s ludicrous, but if he was really intending it, he wouldn`t ask the guy to hush up, because there`s no reason for him to hush up on it.

MILLER: No.

MATTHEWS: Because he was going to get nailed with the costs.

MILLER: He makes no effort in this conversation to try to nail down Pena Nieto on what -- how Mexico is going to pay for the wall, what you`re going to end up contributing, or how any of that is going to work.

The bulk of the conversation is focused on trying to pressure Pena Nieto to stop issuing defiant statements that embarrass Trump.

MATTHEWS: So continue the charade.

Anyway, the leaked transcript shows intense conversation with Australian Prime Minister Malcolm Turnbull over an Obama era deal to take in refugees that Australia turned away.

According to the transcript, that transcript of the January 28 call -- these are both in January -- President Trump said: "Malcolm, why is this so important? I do not understand. This is going on kill me. I`m the world`s greatest person that doesn`t want to let people into the country, and now I am agreeing to take 2,000 people. And I agree I can vet them, but that puts me in a bad position. It makes me look so bad. And I have been only here a week."

Well, President Trump called the refugees bad. That`s an 8-year-old talk.

Anyway, the call ended with a sour note. President Trump: "I have had it. I have been making these calls all day, and this is the most unpleasant call all day. Putin was a pleasant call. This is ridiculous."

Well, the two men thanked each other formally and then ended the call.

What does that tell you? We have always been pretty good friends with the Aussies. I mean, we were together with them in World War II and Vietnam and Korea. We have always been pretty close.

MILLER: Going on a century now.

MATTHEWS: Yes.

MILLER: And there`s no nod to any of that history here.

And in some of the transcript, portions of the transcript you just showed, you see Trump referring to himself over and over: This makes me look bad. This looks -- this is embarrassing to me.

This is all sort of looked at through the prism of how it reflects on him.

MATTHEWS: Are you saying he`s a narcissist?

(LAUGHTER)

MILLER: Well...

MATTHEWS: Anyway, thank you, Greg Miller. Great reporting.

MILLER: Thank you.

MATTHEWS: Well, during his call with Mexican President Enrique Pena Nieto, the president -- well, President Trump defended the need for a wall at the border in order to keep drugs out of the country. That was his argument.

He said -- quote -- "We have a massive drug problem where kids are coming - - becoming addicted to drugs because the drugs are being sold for less money than candy. I won New Hampshire because New Hampshire is a drug- infested den."

Well, one note. Hillary Clinton actually won New Hampshire by nearly 3,000 votes. That`s a fact.

Joining me right now is Senator Jeanne Shaheen of New Hampshire.

SEN. JEANNE SHAHEEN (D), NEW HAMPSHIRE: Good evening.

MATTHEWS: You do have a -- you do have a problem up there with drugs. Apparently, you`re the second worst state in terms of people dying from overdoses, according to my checking today.

What was wrong what with Trump said, before -- besides being obnoxious? What did he do? Did he get the facts wrong?

SHAHEEN: Well, what he said was an outrage, to say that about New Hampshire or any state in the United States of America.

It is an insult to all of those people who have been dealing with this epidemic for years, who -- the treatment providers, law enforcement, the families who have lost loved ones.

And the president came here and campaigned and said he was going to help New Hampshire and other states in the country deal with the heroin and opioid epidemic.

And what he`s done as president is just the opposite. He`s tried to take away health care which provides treatment for people with substance use disorders. He has called for defunding programs that help law enforcement to go after the drug traffickers.

We don`t need insults. What we need is the president to provide help for states like New Hampshire that are dealing with this epidemic.

MATTHEWS: Well said.

Anyway, Senator Brian Schatz of Hawaii tweeted: "I am alarmed at leaks of conversations between two heads of state. It doesn`t matter what I think of this president. This is terrible."

What do you make of this, the fact that -- I mean, reporting can get a lot of good stories through good tradecraft. But what do you make of federal officials allowing these transcripts to go public? It does put a president in a situation he can`t have a private conversation.

SHAHEEN: Well, it does.

But my experience is that, when people feel like they need to leak something like that, it is because they have concerns about what`s going on. And I think that`s one of the challenges.

When we have a president who tries to make national security policy or foreign policy through tweeting, then we have a problem. And my guess is, that`s why people are leaking this kind of information, because they want the public to know how serious the situation is.

MATTHEWS: OK.

Thank you so much. It`s always great having you on, Senator Jeanne Shaheen of New Hampshire.

SHAHEEN: Thank you. Nice to be with you.

MATTHEWS: Up next: President Trump has been keeping his conservative base pretty happy in recent days.

And, tonight, it`s no different. He`s out in West Virginia, where he`s holding another one of those -- there it is -- they look alike, don`t they -- another raucous campaign-style rally, except this is a presidency -- this isn`t a campaign -- just as we`re learning that the special counsel, Robert Mueller, has impaneled a grand jury into the Russia investigation.

That rally isn`t going to stop the investigation.

You`re watching HARDBALL.

(COMMERCIAL BREAK)

CHRIS MATTHEWS, MSNBC HOST: Welcome back to HARDBALL.

President Trump is currently in the wild and wonderful state of West Virginia -- it`s actually a great state -- addressing thousands of cheering supporters. He is back in that state which he won by 42 percent last November in order to gin up support for his base, of course.

The trip comes at a time when the president has been tossing red meat to his base on issues like cutting legal immigration, banning transgender people from serving in our military, reporting plans to sue universities over affirmative action policy that may hurt white applicants.

Let`s bring in the HARDBALL round table. Ayesha Rascoe is White House reporter for "The New York Times", Jeremy Peters is political reporter for "The New York Times" and an MSNBC contributor, and Erica Werner, who`s congressional correspondent for "The Associated Press".

Thank you.

Let`s try to put into reality why Trump does it. Does he do it for visuals on television? Does he do it because it makes him end joy life more? He can`t be doing it to shake up Bob Mueller, because Bob Mueller is pretty cold hearted figure and he`s going ahead and going ahead here.

AYESHA RASCOE, REUTERS: No, I think he enjoys it. This is something that like really energizes him. I think this is a part of the job that he really loves doing. He is always talking about crowds. I mean, even, you know, when he comes back, he`s talking to reporters. He`s like, look at all the supporters I had on the street and things like that. It`s very important to him.

So, I think that this is something that he really likes to do. I don`t -- they haven`t been very focused in trying to get their message out in these rallies. But I mean, this is something that Trump likes.

MATTHEWS: Put this together with Trump`s identification, or lack of identification with the Republican Party itself and his ability to wield control. I think he`s done a pretty decent job, you know, getting 40 -- what did he get, 49 out of 52 Republicans on the health care fight, the reckoning vote. That`s not bad, 49 to 52. It`s not enough.

JEREMY PETERS, MSNBC CONTRIBUTOR: No, he`d like more Republicans and that`s why he`s going to West Virginia.

MATTHEWS: How many more can he get by going to West -- is going to get John McCain by going to West Virginia?

PETERS: No, but there`s an important Senate race there next year. So, he hopes to pick up Joe Manchin. I don`t know if that`s going to work, but the Koch brothers are going to go after Joe Manchin, the whole Republican conservative machinery is gong to go after Joe Manchin. Trump --

MATTHEWS: Does that explain why they don`t want any bipartisan deal? Because Manchin would be part of a bipartisan deal.

PETERS: Yes, I mean, I think it`s -- if you`re a bipartisan deal wouldn`t do enough to fulfill their promise, to totally repeal and gut Obamacare. But there`s another newsy element to this tonight, as my colleague Jonathan Martin reported earlier. The governor of Virginia is going to announce that he`s switching to the Republican Party.

MATTHEWS: Is that the big thing? He promised us, early in the day. And then it leaked, of course.

ERICA WERNER, CONGRESSIONAL REPORTER, ASSOCIATED PRESS: Right. Well, that`s definitely a big deal. And picking up on what Jeremy was saying, part of what Trump accomplishes with these rallies, he reminds members of Congress that the base is still with him and how much they get off on him. And that he`s still --

MATTHEWS: Nice phraseology there. But I think it`s true. Twenty states, Hillary Clinton didn`t bring 40 in. Six states, she didn`t get past 30. So there are bastions of support for Trump right to this day I`m sure.

WERNER: Yes, and senators are losing patience with him, Republican senators, but the base is still there and he`s proving that again tonight.

RASCOE: Yes, and he`s been able to divide himself from Congress. He -- when he speaks, he`s saying the Congress is not even giving you health care. They`re hamstringing me on Russia, he`s talking about they`re another --

MATTHEWS: OK. Suppose you`re Bob Casey of Pennsylvania, or you`re somewhere like that, or you`re Donnelly in Indiana, and you watch these big rallies of the country folks. You get a little nervous, don`t you? Or do you? Or do you think you already lost those people?

(CROSSTALK)

PETERS: Absolutely. I can tell you right now, Republicans looking at the polling data aren`t looking at Trump`s 38 percent approval rating among most Americans right now. They`re looking at his numbers among Republicans in states like West Virginia, Indiana --

(CROSSTALK)

MATTHEWS: Let me tell you, 38 ain`t much different than what it was night before the election, OK?

PETERS: No --

MATTHEWS: I`m not a big believer in these polls.

PETERS: It`s not. But do you know what else isn`t that much different? His support among conservatives and Republicans is just about where it was on inauguration day.

MATTHEWS: Let`s take a look at this. Moments ago, President Trump once again went after the Democrats and the Russia investigation. Let`s listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The Russia story is a total fabrication. It is just an excuse for the greatest loss in the history of American politics. That`s all it is.

(CHEERS)

It just makes them feel better when they have nothing else to talk about. What the prosecutors should be looking at are Hillary Clinton`s 30,000 deleted e-mails.

(END VIDEO CLIP)

MATTHEWS: There you go, Yamiche. The Hillary hatred that is just waiting out there to be lit on fire every time somebody -- Ayesha, just saying the name.

RASCOE: Yes, it`s the oldie but goody. And, you know, it keeps -- you know, it has, you know, something that just revs up the crowd.

MATTHEWS: Reach back into that stack of old oldies. The group was nodding at everything he said. That group is just waiting for the match to be lit.

WERNER: That said, even apart from the reaction of a group like that, we hear from lawmakers of both parties, including liberal Democrats, that when they go home, people do not care about Russia. So, you know, we`re obsessed with it in the bubble.

MATTHEWS: Do you know who cares about Russia?

WERNER: Bob Mueller?

MATTHEWS: He`s investigating it.

PETERS: The grand jury.

MATTHEWS: I think if you`re waiting to be prosecuted, I would be more worried that the prosecutor than the fan base. Go ahead.

PETERS: No, but -- I mean, this is all part of broader --

MATTHEWS: By the way, Watergate -- a lot of the Republican faithful said, I remember the bumper stickers, get off his back -- until it got later on.

PETERS: Until the day Nixon resigned, he still had 50 percent approval rating among Republicans. So, I mean, the support among the conservative base should not be surprising. But at the same time, it also shows you that Trump is going to have a certain amount of durability going into 2018 and 2020 even. I just don`t, their strategy is protect the base, keep what you have, and attack your opponent mercilessly.

MATTHEWS: I think got a point. But I think part of that is the loss of newspapers in many parts of the country. I was in the west with my wife. We were driving around in Colorado and Utah and Wyoming. There is no local big serious newspaper.

The Denver papers, you don`t pick it up in the morning when you go down the drive way, or whatever, the mailbox. There`s not a newspaper that tells you what`s going on nationally. Their local newspapers are OK but the days when people had a pretty good newspaper to read.

So, how do you keep one Russia? If you`re slightly interested, there`s no story for you to read. That`s a fact.

WERNER: That`s a bigger issue, right? The bifurcation of the party and where we get our sources of news that`s just confirmation bias.

But picking up on Jeremy`s point, for any Republican, the road to a victory including a general election victory, for a House member or a senator goes through the base. It requires the base. So, their fear is that Trump takes the base with him and turns on them.

MATTHEWS: Yes.

WERNER: So, he really is proving a point with these rallies that the base is still with him.

MATTHEWS: When will that base turn against an incumbent Republican --

(CROSSTALK)

MATTHEWS: It was first question. How does he leverage this kind of raucous rallying, screaming, I love this guy, how does he turn that against Heller or someone who is not agreeing with him? Or McCain -- not McCain, but someone else like that, or a Collins, or a Murkowski?

PETERS: He`s going to find villains, right? I mean, Trump is always good at blaming --

(CROSSTALK)

MATTHEWS: -- general like if a Democrat win?

PETERS: It`s Mueller. You should see the right wing Twitter today, it`s all about firing Bob Mueller. If Donald Trump has shown nothing else, nothing else, is extraordinarily deft at finding people to villainize and his base will follow him there and villainize them right back.

MATTHEWS: Why does he go back to Hillary?

RASCOE: Well, I mean, it`s a safe place for him and it`s something that I think -- I don`t know that he has totally gotten over the election himself. And I think it`s just -- it`s a way of saying, look, don`t look at me. Look at what they did. They`re trying to talk about me, look at this other person, and what she did. And she is kind of -- she`s easy to villainize.

MATTHEWS: You know how (ph) that Trump is thinking. We all try on figure the guy out. I think he`s thinking, if I can hold close to 40-ish percent, then I`ll just go into the ring against the opponent next time around and beat the heck of them.

PETERS: That`s exactly --

MATTHEWS: And I`ll beat them one on one. Not by merit because I`ll just smash them. But all I need is about 40, but I need about 40. He had 42 in the latest polling. Anyway --

PETERS: It`s not going to be hope and change.

MATTHEWS: No, it`s not going to be positive campaign. Here`s Trump continuing to attack on the Russia investigation tonight in West Virginia. Let`s watch.

(BEGIN VIDEO CLIP)

TRUMP: Most people know there were no Russians in our campaign. There never were. We didn`t win because of Russia. We won because of you, that I can tell you.

(CHEERS)

(END VIDEO CLIP)

MATTHEWS: Good home cooking.

Anyway, the roundtable is sticking with us. And up next, these three will tell me something I don`t know. This is HARDBALL, where the action is.

(COMMERCIAL BREAK)

MATTHEWS: The legendary college football coach Ara Parseghian has died. At Notre Dame, he became far more than a coach. He was seen as savior. Parseghian took a beleaguered Fighting Irish program and returned it glory. In his 11 seasons as coach of Notre Dame, his teams won 95 games, lost just 17 and tied just four.

They were twice voted the national champions. It is no wonder the Notre Dame student body saw him as all powerful. When the weather turned foul in South Bend, they used to chant in the grandstand, Ara, stop the rain! Ara, stop the snow.

The great coach died yesterday at age 94, a man who for more than a decade let us a live a legend of old Notre Dame.

(COMMERCIAL BREAK)

MATTHEWS: We`re back with the HARDBALL roundtable.

Ayesha, tell me something I don`t know.

RASCOE: Well, we were talking earlier about appealing to the base and today, Attorney General Sessions once again said that sanctuary cities will not be allowed to participate in this federal program that is basically provides training for crime reduction. He singled out four cities, including Baltimore and also San Bernardino. And basically, this is another way of Sessions showing that he is doing what Trump wants him to do and he is fighting, you know, illegal immigration.

MATTHEWS: He is making his bones.

RASCOE: Yes.

MATTHEWS: Go ahead, Jeremy.

PETERS: So, what`s been focused on a lot in a transition over to General Kelly as chief of staff has been, you know, how he will control Trump, how he will tell Trump to stop doing things. But I`m told that that`s actually not General Kelly`s strength and management.

MATTHEWS: It ain`t stopping leaks. That`s for sure.

PETERS: It certainly isn`t. But Trump as many aides, former aides now have learned, does not like to be told no. So, General Kelly from what I`m told is very skilled at giving Trump options and saying, OK, this might be a better course of action. Choose from this. Instead of going out and telling him, no, you can`t do this. No, you can`t do that, because if there`s one thing that`s going to make Trump react in a negative way, is going to be to tell him not to do something --

MATTHEWS: This could be --

(CROSSTALK)

PETERS: -- threaten to fire the attorney general, for example.

MATTHEWS: OK.

WERNER: That`s actually a technique that I used on my toddlers. But I was going to mention that Interior Secretary Ryan Zinke and Senator Lisa Murkowski of Alaska had a beer summit following Zinke`s threats against her over the health care bill. And now, according to photos he`s posted on Twitter, at least, they`ve kissed and made up and all is good.

MATTHEWS: Nice to know.

Thank you, Ayesha Rascoe of "Reuters", Jeremy Peters of "The New York Times" and Erica Werner of "The Associated Press".

And we`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Trump Watch, August 3rd, 2017.

As Donald Trump wallows in West Virginia applause, the reckoning with special counsel Robert Mueller advances. Nothing that happens out on the political stump, not the one liners, not the tired old shots at Hillary and the media and the capital city he called the swamp will wash away the tracks Mueller and his bloodhounds are on to.

You hear the words grand jury, you think about the subpoenas Mueller`s people are set to issue. You hear the phrase business documents, you think about those years of income tax returns Trump has been holding tight to him.

This is the course the special counsel now follows back into the 2016 campaign, back into the business ties that his people, Paul Manafort, the odd Carter Page, the unsettling Roger Stone, that he Donald Trump, that his son and namesake have had with the Russians, who now figure so large in this case, so wide in scope and tributaries it resembles that country`s notorious archipelago.

I recall a bit of graffiti from the days of Richard Nixon`s downfall. Watergate is in India and warned, pointing to its mysteries and dark and side streets. We now know what looms now before us in all its vastness. Russia. Russia itself.

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

"ALL IN WITH CHRIS HAYES" starts right now.

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