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Hardball with Chris Matthews, Transcript 9/5/17 Mueller pulls IRS unit

Guests: Al Franken, Susan Page, Adam Schiff, Betsy Woodruff, Jonathan Swan, Ayesha Rascoe, David Catanese

Show: HARDBALL Date: September 5, 2017

Guest: Al Franken, Susan Page, Adam Schiff, Betsy Woodruff, Jonathan Swan, Ayesha Rascoe, David Catanese

CHRIS MATTHEWS, HOST: Trump`s got trouble.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

Obama`s back, and he`s going to cause some trouble. He has stayed mostly quiet since leaving office, but that changed today after President Trump said he would remove the protections for hundreds of thousands of young immigrants known as Dreamers. The move was announced by Attorney General Jeff Sessions today. Let`s watch.


JEFF SESSIONS, ATTORNEY GENERAL: I`m here today to announce that the program known as DACA that was effectuated under the Obama administration is being rescinded.

The executive branch through DACA deliberately sought to achieve what the legislative branch specifically refused to authorize on multiple occasions. Such an open-ended circumvention of immigration laws was an unconstitutional exercise of authority by the executive branch.


MATTHEWS: Well, in a statement today, President Trump said, I do not favor punishing children, most of whom are now adults, for the actions of their parents, but we must also recognize we are a nation of opportunity because we are a nation of laws.

Well, the move fulfills a campaign pledge Donald Trump made, but since taking office, he has softened his rhetoric a bit on the Dreamers, promising to, quote, "show great heart."

He was asked about that today. Let`s watch.

Let`s watch.



DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, I have a great heart for the folks we`re talking about, a great love for them. And people think in terms of children, but they`re really young adults. I have a love for these people, and hopefully, now Congress will be able to help them and do it properly. Really, we have no choice. We have to be able to do something. And I think`s going to work out very well. And long term, it`s going to be the right solution.


MATTHEWS: Well, as I said, former President Barack Obama responded rather dramatically. In a statement, he said, This is about basic decency. Quote, "To target these young people is wrong because they have done nothing wrong. It is self-defeating because they want to start new businesses, staff our labs, serve in our military and otherwise contribute to the county we love. And it is cruel. What if our kids` science teacher or our friendly neighbor turns out to be a Dreamer? Where are we supposed to send her, to a country she doesn`t know or remember, with a language she may not even speak?"

Well, there were other protests across the country in reaction to the announcement from the White House, and now the question is, what will Congress do? Will it pass a bill saving those who were brought here in their youth?

For more on this, and lots of other things, I`m joined by Senator Al Franken of Minnesota. Anyway, thank you, and congratulations on your book, "Giant of the Senate," appropriately titled.

Let`s get to this thing.


MATTHEWS: It seems like Trump is throwing a hot potato. He didn`t want to say, I`m going to give these kids the chance that Obama gave them to stay here, even though they were brought here not against their wills, but -- against the will but by their parents. I`m going to let them stay and not be prosecuted. He`s saying, Let Congress do it. What do you make of that? Why`d he do it that way?

FRANKEN: Well, first of all, the executive order that President Obama gave on this was actually lawful. President Reagan did a similar thing. George H.W. Bush did a similar order. So that`s bogus.

I guess he was doing it to appeal to his base, which is really the only people who are for getting rid of DACA. It`s -- 2 to 1, the American people are for it because they know that these are people who came to America as children. Their parents brought them here. And in many cases, probably in most cases, America is the only country they know. And I think everything that former President Obama said is absolutely true. These -- these...

MATTHEWS: If all that`s true and it`s a legitimate bill, a legitimate law by executive order, why not Congress just pass it tomorrow morning? Why not the Hill just pass it both houses, send it to the president, move on?

FRANKEN: Well, I hope we can. I don`t know if it will be tomorrow. We have to get the votes for this, but...

MATTHEWS: Well, is it hard to get 50 votes for DACA, do you think?

FRANKEN: I actually think that we`re going to be able to do this, and it depends on what bill we pass. But I know that Senator Durbin has been the leader on this for his...

MATTHEWS: Well, are you going to offer a rider, some -- attach it to some bill and just move it, I would think?

FRANKEN: Well...

MATTHEWS: I have an old memory of how things used to be done on the Hill. I don`t know why it`s so damn hard to do something everybody thinks is the decent thing to do.

FRANKEN: Well, I`m not sure everybody thinks it`s a decent thing to do. We have a lot of Republicans who don`t think -- or for some reason...

MATTHEWS: Well, screw `em!

FRANKEN: Well...

MATTHEWS: If they vote against this, you`ve got them nailed. You`ve got the moderates of the suburbs finished. Charlie Dent`s not going to vote against this. All the suburban Republicans would not want to be known as the bad guys on this baby. Would they?

FRANKEN: I think that you`re right. I think...

MATTHEWS: Maybe Barletta...

FRANKEN: I think we are going to find the votes for this. And I hope we do this soon so that those people don`t have to live in this kind of peril.

MATTHEWS: OK. I think you could be president someday. That`s just my view. You don`t have to confirm or deny because I think you got the wit and the brain to do it.


MATTHEWS: What would you do with North Korea right now? Because I don`t think it is all Trump`s fault.

FRANKEN: That`s why I don`t want to be president because I`d have to be deciding...

MATTHEWS: What do you do with this guy?

FRANKEN: Look...

MATTHEWS: Kim Jong-un -- he`s -- apparently, he says he`s blown up a -- he`s exploded a hydrogen bomb. It took the Soviets a number of years to get that. And now this guy`s got one.

FRANKEN: There are no good options with North Korea. They have conventional weapons, as you know, artillery pointed at Seoul. There are 20 million people who live in Seoul. We have 28,000 American troops there. We have over 100,000 Americans living in South Korea. There`ll be millions of people killed immediately if we took some kind of military action.

MATTHEWS: Well, if we did a surgical strike even and hit them right on the nose, with all the -- didn`t kill anybody else, they`d just launch, right?

FRANKEN: I think they would. And Kim Jong-un cares I think only about himself. And this is the point. We`re dealing with someone here who we don`t know his entire mental state. And the worst thing that we can do is create a miscalculation. And I think that that`s why we have to -- that`s why President Trump`s rhetoric, I think, has been very dangerous.

Look, we`re in the U.N. now trying to get energy sanctions against them. China needs to cooperate with that...

MATTHEWS: Is he hard to blame?

FRANKEN: Who, President Trump?

MATTHEWS: Trump, for this crisis, for this brinkmanship.

FRANKEN: I think that he has escalated the brinkmanship. He`s not to blame for their having a nuclear program. He`s -- don`t -- you know, you don`t blame everything on Donald Trump. But to me, the scariest part thus far of this in many ways has been that we know from past crises that what you don`t want is a miscalculation and caused by this kind of...

MATTHEWS: Do you trust Jim Mattis, the secretary of defense, to hold off on keeping the president from moving...

FRANKEN: I think the fact that...

MATTHEWS: ... impetuously?

FRANKEN: I think that the secretary of defense is a good influence there, and so is the national security adviser. I think he understands what the - - what would happen if we attack.

MATTHEWS: You don`t think this is a "Wag the Dog" situation, do you? When the president`s creating a situation...

FRANKEN: No, I don`t -- no, no. This is -- the "Wag the Dog," if you remember the movie, didn`t involve millions of people being killed.

MATTHEWS: Yes, it wasn`t real. Let`s ask (INAUDIBLE) let`s talk about something we know is getting real, which is special prosecutor Bob Mueller, Robert Mueller. If you look at all the reporting -- and the reporting`s been excellent in the major papers, the metropolitan papers, "The Times," "The Post" mainly, but also "The Journal" -- you`re getting a look at a guy who`s getting close to the bone. He seems like he`s getting into criminal tax problems, getting into the real financial interstices of the Trump operation and also looking at obstruction.

I mean, is it getting too late for Trump to fire this guy? He`s gotten already so far, or can he just pardon everybody?

FRANKEN: Well, his way of firing him would be a Saturday night massacre. I mean, he couldn`t -- you know, he`d have to go through Rosenstein because Sessions has recused himself. I don`t think that`s going to happen, but you -- I -- you can`t...

MATTHEWS: Do you Republican colleagues back you on that? Do you ever hear them in the cloakroom saying, You know, if Trump does that, that`s the red line for me, if he fires this guy, if he fires...

FRANKEN: I`ve heard discussion. I don`t go into their cloakroom usually.

MATTHEWS: Don`t they go...

FRANKEN: Sometimes I`m looking for somebody, I go in there.

MATTHEWS: ... yours ever?

FRANKEN: Yes, they do. Actually, we do, actually. But I -- look...

MATTHEWS: That could be a problem. That could be the problem. You don`t go into each other`s cloakrooms. Go ahead.

FRANKEN: Bob Mueller has the trust of everybody I think...

MATTHEWS: Looks real.

FRANKEN: ... in Congress and Washington. He was confirmed 100 to nothing twice to be FBI director. He is going to see where the facts go. And I think people should be patient. I think they should be patient.

MATTHEWS: Do you think he`s got Trump`s taxes?

FRANKEN: I don`t know. I think he should. I think he should get them. I thin that there`s obviously some financial relationship between the Russians and Trump. That`s what his son Donald, Junior, said in 2008, when he said there`s a disproportionate amount of money coming from the Russians. It`s in the business in the United States. This is how the Russians traditionally sink their hooks into people. They did this in Eastern Europe. That`s called the Kremlin playbook. This fits a pattern. And I think that -- yes, I think that Mueller will be looking at the -- his financial...

MATTHEWS: If Donald Trump approved a letter that said the reason he was firing Comey was to be dealing with the Russian matter, would you consider that obstruction? If that was the reason he was firing him and that was in the letter that he approved -- he didn`t send but he approved that letter, apparently.

FRANKEN: Yes. I hear there is a letter out there that may go further to proving obstruction. He actually said it was because of Russia.


FRANKEN: That`s what he said in the interview on this network, or on NBC. And I don`t know if that amounts to obstruction.

MATTHEWS: Well, approving a letter to go to the guy you`re firing and saying it`s about Russia would be to me pretty close to...

FRANKEN: Well, how about saying it in an interview is the same thing, as far I`m concerned.?

MATTHEWS: OK. Speaking of interviews and stagecraft of politics, Hillary Clinton has had a couple of chances the last couple weeks to push the book. And I know how you push books. Sometimes you push a book...

FRANKEN: Go on your show.

MATTHEWS: Sometimes that helps, by the way. Your book...

FRANKEN: Al Franken, "Giant of the Senate."

MATTHEWS: Let`s talk about Hillary...


MATTHEWS: ... a couple things, but one of the things that grabbed a lot of people`s attention was going after -- well, let`s watch. Let`s watch what happened here and what she said about what happened with her opponent, Donald Trump.


HILLARY CLINTON (D-NY), FMR. PRESIDENTIAL NOMINEE: We were on a small stage, and no matter where I walked, he followed me closely, staring at me, making faces. It was incredibly uncomfortable. Do you stay calm, keep smiling and carry on as if he weren`t repeatedly invading your space? Or do you turn, look him in the eye and say loudly and clearly, Back up, you creep. Get away from me. I know you love to intimidate women, but you can`t intimidate me. So back up.


MATTHEWS: So he pulls the Godzilla number, comes up behind her like he -- I don`t know (INAUDIBLE) He obviously wanted to make her uncomfortable. She said she felt uncomfortable, maybe professionally uncomfortable, meaning, I shouldn`t have to have put up with somebody doing this to me.

What do you make of it? What are politicians, male or female, supposed to do when some lug comes at you?

FRANKEN: Well, first of all, Al Gore`s not a lug, but you`ll remember...

MATTHEWS: He did the same thing.

FRANKEN: ... in the 2000 debate, he came up, he invaded George W. Bush`s space.

MATTHEWS: What about...


FRANKEN: But wait a minute. But Bush was talking, and he went...

MATTHEWS: He checked him.

FRANKEN: He just went like this. Hi. You know? And...

MATTHEWS: Could Hillary Clinton have done that to Trump standing behind her? How do you (INAUDIBLE)

FRANKEN: She could have. I mean, obviously, in the book there, she`s saying, Or should I have done this?

MATTHEWS: It`s an open question.

FRANKEN: And I think the answer to that is yes, you should have done some version of that.

MATTHEWS: Well, let`s talk about...



FRANKEN: Doesn`t have to be exactly what (INAUDIBLE)

MATTHEWS: You know what`s happened to American politics under Trump, and if he runs again, it`ll happen again. It`s not about resume or qualifications necessarily, or preparation or seriousness. It`s about how you behave in the states. He gets somebody and calls him "Little Marco" and makes fun of him sweating too much, and he`s off the stage. He calls somebody else, Hillary, "crooked Hillary." It`s on the stage. It`s in the moment.

How do you take on a guy like Trump in the moment without just being more of a smartalec than he is?

FRANKEN: You know, very often...


MATTHEWS: ... be a smartalec, but I think that is the answer is you got to take him on!

FRANKEN: I`m not sure that you have to beat Trump to beat Trump. You know, very often, the president who gets elected is the opposite of the last guy. If you think about Obama beating...


FRANKEN: ... succeeding Bush -- W. was a guy who went with his gut, wasn`t necessarily the most articulate guy. You got a guy who was "no drama Obama" and who was incredibly eloquent and well spoken. That`s followed by the opposite, Trump. So maybe the next person to run against Trump shouldn`t feed into your narrative there, which is always a mistake, Chris.

MATTHEWS: (INAUDIBLE) the last war.



FRANKEN: Don`t feed into his narrative.

MATTHEWS: Well, Trump will be there again.

Anyway, you announced today that you`re going to oppose the president`s nominee for U.S. district court, U.S. circuit court, David Stras...


MATTHEWS: ... who`s from your state. Why are you against him?

FRANKEN: Look, I believe in an independent court. Trump has nothing but contempt for the federal judiciary. He`s shown that with, you know, questioning the ethnicity of judges, you know, other decisions...

MATTHEWS: Mexican-American president (ph), yes.

FRANKEN: We -- they did not follow the normal consultation with us. And this guy, Stras, who -- and I shouldn`t call him "this guy," Justice Stras -- good guy, nice guy. But his jurisprudence -- he was a Clarence Thomas clerk. He said Thomas was his mentor. He was chosen by the right-wing Heritage Foundation and the right-wing Federalist Society as part of the short list for the Supreme Court. We were not consulted on this. That is the normal process. This is different than the process has been.

That`s how you get consensus judges. The court shouldn`t lurch from one extreme to another. That -- this has been in place for decades and decades where the White House consults the senators in this case, and they did not...

MATTHEWS: Could you stop him?


MATTHEWS: They only need 50 votes. Can you stop him?

FRANKEN: Well, we have a tradition called the blue slip. Chuck Grassley, the chairman of the committee...

MATTHEWS: The hold.

FRANKEN: ... wrote a -- wrote an op-ed in "The Des Moines Register" about how important the blue slip is...

MATTHEWS: Means a home state senator can do it?


MATTHEWS: OK. It looks like you`re going to do it. Are you?

FRANKEN: I have said I`m not going to turn in my blue slip on Judge Stras...

MATTHEWS: And they -- they...

FRANKEN: Justice Stras, Justice...

MATTHEWS: Senator Al Franken, author of "Giant of the Senate," still way up there on the best-seller list.

For more, by the way, on today`s news, I`m joined by "USA Today`s" Washington bureau chief, Susan Page.

Susan, let me ask about the Dreamer issue. I know we`re all talking about -- everybody`s talking about it here. It seems, if you`re outside of Washington (INAUDIBLE) say, Well, it seems pretty popular. (INAUDIBLE) human. These kids came here because their parents came here. They speak (INAUDIBLE) American accents, if you will. They feel like Americans. As the president -- former president said, they are Americans except they`re not actually Americans under the law.

Why wouldn`t that get a quick vote in both the Senate and the House and a signature by the president who says he would sign it?

SUSAN PAGE, "USA TODAY": Well, you`d think so because they`re really sympathetic people. We saw a Dreamer die rescuing people in Houston after the floods there the other day. In one recent poll, more than two thirds of Americans said they support the idea of letting Dreamers stay in this country one way or the other.

But it runs right into politics. And it`s -- you know, Senator Franken was, I thought, surprisingly optimistic that there would be the votes to enact a Dreamer program.

But here`s my -- here`s my question. Are Republican, control the House and Senate, willing to go back to their Republican voters and say, Here`s what we did. We couldn`t repeal "Obama care," but we did codify the Dream Act...


PAGE: ... which was one of Obama`s big legacy items. I`m just skeptical that they`re going to be willing to do that.

MATTHEWS: It only takes about 25 Republicans to join the Democrats in a straight -- if you get a clean vote, do you still see it going down? Even if there`s a clean vote on a clean bill to simply continue and codify making the law, the DACA executive order, you think it would fail if it came to an up or down?

PAGE: Well, it`s possible it would pass. But I`m -- when you saw that Senator -- Senate Majority Leader McConnell today listed their three top priorities for the Senate, it didn`t include DACA. And when you heard the White House talk about this, they indicated the president would not sign or indicated he wouldn`t sign a stand-alone DACA bill, that he wanted comprehensive immigration reform, which means also funding for the wall. Is that something Democrats are going to agree to?

MATTHEWS: No. No, I think. But I think there`s a tremendous push for a big portion of our population now which comes from the Latin American, many people, and a lot of people who sympathize with the people who came here, especially as young kids who didn`t think they were breaking any law -- in fact, they aren`t really part of that decision. They want to give them a break. I really mean that, and I don`t mean it lightly.

Anyway, I`ve just been hearing the tremendous pressure and passion for this. Susan, thank you so much, Susan Page of "USA Today."

PAGE: Thank you.

MATTHEWS: Coming up, President Trump`s own Justice Department refutes his claim that Obama wiretapped Trump Tower. His own FBI and his Justice Department said it didn`t happen.

There`s growing evidence, by the way, that the special counsel investigation is picking up speed now, including a new report that Bob Mueller has enlisted a secretive branch of the IRS to help with the Russia investigation. They`re going to on the tax issue. They`re going to after his finances. This is the -- we`re getting close to the bone of Donald Trump. We`re going to talk to Congressman Adam Schiff, the top Democrat on the House Intelligence Committee.

Plus, the Trump administration warns that North Korea is begging for war following the country`s claim that it successfully tested a hydrogen bomb. How should the president be responding to that? And how can we -- what -- what can we do to walk this all back from the brink?

And after a brutal summer, Trump braces for an even tougher fall. Though bounced from the White House, Steve Bannon -- that`s him -- is back and warning the Republicans to brace for a bloody September as the president`s far-right base prepares to do battle against the Republican Party.

Finally, let me finish tonight with "Trump Watch."

And this is HARDBALL, where the action is.


MATTHEWS: Vladimir Putin responded today to a growing diplomatic strain between the United States and Russia. The Russian president said he was not happy with the, quote - his word - boorish way in which the United States ordered the closure of Russian diplomatic properties last week.

In the same news conference, Putin was also asked how he would feel if President Trump were to be impeached. Putin said it would be absolutely wrong for Russia to comment on U.S. politics.

He went on to say, however, that Trump is -- quote -- "not my bride, and I am not his groom.


We will be right back.


MATTHEWS: Welcome back to HARDBALL.

Well, there are signs right now that special counsel -- that`s Robert Mueller -- is making some inroads in the ongoing Russian probe, especially when it comes to possible financial crimes and obstruction of justice.

One potential piece of evidence reported on Friday is a draft termination letter written by White House aid Stephen Miller which President Trump intended to use to justify firing former FBI Director James Comey.

According to "The Wall Street Journal," one of the issues cited in the letter was that -- quote -- "Mr. Trump wanted Mr. Comey to publicly state the president wasn`t personally under investigation," something that Comey had told him privately, apparently.

Well, the letter was ultimately scrapped by the White House counsel, Don McGahn.

And as "The New York Times" reports, "McGahn`s concerns about Mr. Trump`s letter show how much he realized that the president`s rationale for firing Mr. Comey might not hold up to scrutiny."

Well, meanwhile, The Daily Beast reports that Robert Mueller has -- quote - - "enlisted the help of agents from the IRS` Criminal Investigations unit," noting that "its 2,500 agents focus exclusively on financial crime, including tax evasion and money laundering."

I`m joined right now by the ranking Democrat on the House Intelligence Committee, Congressman Adam Schiff of California.

Congressman Schiff, first of all, this letter. If you get to intent to obstruct, we`re talking about it here, a letter the president apparently approved which would have gone to Comey to say, I`m getting rid of you because you wouldn`t publicly clear me of the Russian involvement.

That sounds like intent to obstruct.

REP. ADAM SCHIFF (D), CALIFORNIA: Well, I think it`s certainly evidence of potential obstruction.

And it`s something that in Congress we want to take a look at as well. We wrote to the White House on a bipartisan basis some weeks ago, you might remember, Chris, asking when the president`s claim to have tape-recorded conversations with Comey, not only if he had tapes, but if he any kind of memorialization of conversations with Comey.

And from the public reports, this letter does memorialize conversations with Comey. That should have been produced. We wrote to the White House twice. It is more than time, I think, for the committee to subpoena those documents.

And the response we got from the White House was I think at best very misleading. So, that is important evidence that we need to see, but also that Bob Mueller will need to consider.

MATTHEWS: Let`s talk about obstruction.

You`re an attorney. What is obstruction in the context of what we have seen and what is leading toward the suspicion there might have been obstruction by this president involving the Russian investigation?

SCHIFF: Well, when it come to the president of the United States, I think the standard is not whether obstruction meets the elements of some prosecutable offense, but rather whether it rises to the level of removal from office.

And there, in addition to sort of a legal standard of whether a crime or misdemeanor has been committed, you have the very practical question about whether in a Republican-controlled Congress, the president`s efforts, if they amount to obstruction, rose to the level where Republican members could go back home and say that they warranted his removal from office, and that this wasn`t just nullifying an election that other people didn`t like.

That`s a very practical and a very high bar that would need to be met here. But certainly from the purposes of Bob Mueller and his investigation, it is something that I think he needs to look into and he needs to form his own conclusion about, as we do as well in Congress.

MATTHEWS: Back in the presidency of John F. Kennedy, Mortimer Caplin, the head of the IRS, was very helpful in going after rackets, bad guys, criminals, just like they got Al Capone on tax evasion.

Right now, it looks to -- according to the latest reporting we`re getting over the weekend, that the Bob Mueller operation, the special counsel, is using tax information to question whether there was any criminality by this president.

What do you know about that?

SCHIFF: Well, I can`t speak to what Bob Mueller may or may not be investigating.

But I can say that I think the scope of his jurisdiction is broad enough to include any financial entanglement between the Russians and the Trump Organization and it`s anything that arises from that.

It is among the most serious allegations I think that we need to be investigating as well, because this is, I think, the most powerful potential form of compromise, not the salacious video which I think has limited power, given how limited the "Access Hollywood" tapes apparently -- what limited effect they had.

But if the Russians were engaged in business transactions, let alone illicit ones like money laundering, that is something that could be very well held over the head of the president. And we also need to consider, Chris, that we saw publicly disclosed just within the last couple weeks that, contrary to what the president said, he and his organizations were seeking business in Russia.

So, if they`re not going to be honest about that, we obviously can`t rely on their representations about whether the Russians previously did business with them, let alone whether that business was legal.

MATTHEWS: Well, you mentioned the dossier.

And late today, "The Washington Examiner" reported that the House Intelligence Committee, your consulate, has subpoenaed the Bureau of Investigation, of course, the Justice Department, for documents relating to the dossier, the FBI`s relationship with dossier author Christopher Steele.

However, both the FBI and the Department of Justice did not turn over the subpoenaed documents by the September 1 deadline and have been granted an exception.

Are your colleagues concerned that Donald Trump may be actually involved in that hotel scene that was very colorfully and graphically described in that report, that dossier? Is that part of what you mentioned as any embarrassment he may have -- should have suffered because of his language in the "Access Hollywood" tape? Do you think there`s actually a plausible truth to that dossier report in that regard?

SCHIFF: Well, I don`t know, Chris.

But I will tell you this. I do have concerns with the majority issuance of these subpoenas to the DOJ and FBI. That was done over our opposition in the minority. We have a practice in the committee that has only been departed from once, and again on a partisan basis.

And that is, we request information voluntarily before we ever contemplate a subpoena. Here, those requests for documents were never made in letter form or written requests to the department.

Instead, the first the department got was a subpoena. That is just not good practice. It was uncalled for, in my view. And considering that we have requested the White House compliance more than once, multiple occasions, and still have not gotten the majority`s approval for a subpoena of the White House, this kind of disparate treatment concerns us greatly.

There`s an effort to discredit Christopher Steele, rather than looking into how many of the allegations he wrote about were true. What we should be most concerned about is whether those sources of information in the report are true, not in discrediting the author of that report.

MATTHEWS: Why would the subpoenas -- and you say they have been issued -- why would they cause a discrediting of the dossier?

SCHIFF: Well, I think it is part of an effort to discredit the author of the dossier.

And I think there`s a view, if they can discredit Christopher Steele, they can discredit the whole Russia investigation or the whole Russia involvement in our elections.


SCHIFF: It doesn`t quite make sense to me, frankly, because no one on our committee disputes Russia`s involvement and what Russia did. So I`m not sure that I understand the thought behind it.

But I think that`s the goal. But, again, it makes little sense to be subpoenaing the department, when we haven`t voluntarily asked for their records. And it`s also concerning when there`s an apparent double standard between what we are willing to subpoena in the case of the department and what we are not willing to subpoena in the case of the White House.

MATTHEWS: Who do you trust more, Christopher Steele or President Trump?


SCHIFF: Well, I don`t know Mr. Steele.

I would like the opportunity to speak with him. And we hope to have him come before our committee. Mr. Conaway and have also expressed a willingness to go to London to sit down with him.

But I do think that, on the question of Russia, we have seen the president repeatedly issue false statements, and indeed try to mislead to committee, as when we requested information about any documents that memorialized his conversations with Comey.

We got a tweet in response, and we got a letter from the White House which was also misleading and merely cited the tweet. So, it is clear we can`t rely on the statements from the White House about the Russia investigation.

MATTHEWS: Thank you so much, U.S. Congressman Adam Schiff, ranking Democrat on the House Intelligence Committee. He`s also from California. He is from California.

Anyway, I`m joined right now by Betsy Woodruff of The Daily Beast, who reported that special counsel Robert Mueller has teamed up with the IRS.

Let`s talk about this.

I mentioned the fact that in the Kennedy administration, Robert Kennedy, they really went and used the IRS quite openly to get the bad guys.



MATTHEWS: Tell me how Mueller is doing it now to get who he thinks might be the bad guys around Trump.

WOODRUFF: Mueller is working with investigators from what is called the Criminal Investigation Unit of the IRS.

This is a very small, very tight-knit, secretive, elite group of investigators. It has been around for decades. These were actually the IRS investigators that helped nabbed Al Capone. They have just a very narrow specialization.

And that is tax crime and money laundering. The fact that Mueller is working with them is a really strong indicator that he believes someone in the president`s circle, one of the folks who is included in his mandate, committed some sort of tax crime.

We also know Mueller is a big fan of the IRS criminal investigators. When he was a U.S. attorney, he worked closely with them. He really admires their work. So, the fact that he has them on board is something that, in my understanding, is generating a lot of chatter among D.C. attorneys.

MATTHEWS: Are they going after him for something they believe he did wrong? Or are they looking after -- try to find something he did wrong?

In other words, he went after Capone because he was a killer and a bad guy and a hit man and an awful human being, a criminal in every way. So, let`s get him on taxes because we know he`s guilty of other stuff that is worse.

In this case, are they going after what they believe he did wrong or going after some way to nail him for what they don`t like about him?

WOODRUFF: That`s a good question.

My understanding is that the folks in the IRS Criminal Investigations Unit are incredibly nonpartisan, would not be comfortable going on a fishing expedition.

MATTHEWS: It`s not a fishing expedition.

WOODRUFF: Exactly.

MATTHEWS: But what do they believe he did wrong to start with? What leads them into the belief? And I`m open to this answer. What do they like they don`t smell -- the smell they don`t like about Trump`s operation that leads them to think there is criminality there?

WOODRUFF: My understanding is, one of the biggest concerns is about Paul Manafort, particularly the fact that there have been reports he may have used foreign banking accounts for some of his finances.

If that`s true, and if he didn`t reveal that he had those accounts when he filed his tax returns with the IRS, he can be prosecuted. It is a liability.

MATTHEWS: OK. That`s simple. That`s well done. Thank you, Betsy. Great reporting.

Up next: It`s a scenario that once seemed unimaginable, that North Korea could strike the United States mainland with a nuclear weapon. With North Korea`s latest test, is the country charging toward that capability? So, how would President Trump respond or any president who is president right now deal with this very difficult situation, in fact, scary?

This is HARDBALL, where the action is.



QUESTION: Mr. President, will you attack North Korea?



MATTHEWS: Welcome back to HARDBALL.

That was President Trump on Sunday after North Korea conducted its largest ever nuclear explosion, what it says was a hydrogen bomb.

Well, the president also weighed in on Twitter pointing a finger at China and South Korea, writing: "North Korea is a rogue nation, which has become a great threat, an embarrassment to China, which is trying to help, but with little success."

The president went on to add: "South Korea is finding, as I have told them, that their talk of appeasement with North Korea will not work. They only understand one thing."

Well, at a U.N. Security Council meeting on Monday, U.N. Ambassador Nikki Haley suggested enough is enough.


NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: His abusive use of missiles and his nuclear threats show that he is begging for war. War is never something the United States wants. We don`t want it now.

But our country`s patience is not unlimited. We have kicked the can down the road long enough. There is no more road left.


MATTHEWS: We`re joined right now by Richard Engel, NBC News chief foreign correspondent. He`s in Seoul, South Korea.

Richard, you know what we want to know. We want to know how much danger there is, what, if anything, can be done by this president or anyone who is president right now, or could be president, to relieve it.


It seems that, at this stage, North Korea has a hydrogen bomb. The Japanese said that what the North Koreans exploded this weekend very likely was a hydrogen bomb, like the North Koreans claimed. And they have a long- range missile capability.

So, when you combine these two things together, they do have, it seems to be, a nuclear weapons capacity that could threaten U.S. territory, if not the United States mainland.

But it is still a fairly crude system. It is still one that is in limited numbers and is still one that the U.S. feels that it could potentially deal with through missile defense or through a first strike scenario.

It is not the mutually assured destruction of the old Soviet days. That`s what the North Koreans keep saying it is. And if you listen to the North Korean propaganda, they keep saying: The game is over. We are a nuclear power. We can never be touched. We are invincible.

But the U.S. -- according to officials I`m speaking to -- do think that there`s still a window that, if they needed to act, they could act, and at least set the North Korean nuclear program back several years.

But that would mean a military strike. It would have enormous cost, and it would have enormous cost specifically for the city where I am right now, because, should the United States attack to protect American security, this city would pay a price with a likely onslaught from artillery and rockets, and potentially face World War II-level damage.

So, it is...


ENGEL: It is a very tense situation, where there`s a window, and that window is -- is closing and getting narrower with -- with passing time.

MATTHEWS: Would any leader, much less Kim Jong-un, stand by and have a surgical strike knock at his nuclear capability and not attack the South with his conventional forces?

ENGEL: It`s possible. And I think that is the calculation, or these are the kind of calculations that war planners are going through in the NSC right now. That if the U.S. took some sort of action against the nuclear facilities, hit the test site, Punggye-ri, in the mountains and then follow one a threat saying we hit these sites, we`re not going to go any further.

But if you unleash those missiles on Seoul, and those rockets are pointing at this city, with a flight time that is very short, the U.S. will follow one with a devastating attack. Would North Korea hesitate? Would they take that attack on the chin, knowing that the regime was at stake?

That`s an unknown. And that`s what makes this situation so dangerous. What I`m told is the U.S. wants to have a diplomatic solution, wants to go through China, would like to get Russia on board, but Vladimir Putin said today he`s not interested in the process. He sees the problem very differently.

But that if this diplomacy doesn`t work, then there might have to be some sort of military strike from the U.S. perspective before the window closes and North Korea has many intercontinental ballistic missiles hidden in hardened bunkers with nuclear weapons attached to them and it is truly an irreversible situation.

So, we`re living in this window and it`s dangerous and there`s danger of miscalculation. There`s danger of the U.S. thinking it can slip in and attack before the window closes and the situation going badly. So, it`s a lot of calculations to be made.

MATTHEWS: Well, it has to be closely run. And I`m not sure this president can do it.

Anyway, thank you, Richard Engel, for that cold, cold, factual report.

Up next, Bannon is back. New reporting that the president`s former chief strategist has met with a top conservative U.S. congressman from North Carolina and is said to be laying the groundwork for an all-out war. This is a freedom caucus war with the Republican leadership in the House and the Senate with the backing of Steve Bannon. There he is, Mr. Hardball.

You`re watching HARDBALL.


MATTHEWS: Welcome back to HARDBALL.

President Trump is entering a very dangerous autumn. Steve Bannon, the president`s former chief strategist, has met with conservative U.S. Congressman Mark Meadows who is chairman of the House Freedom Caucus.

According to the Website "Axios", the two plotted for nearly two hours on the agenda for the month ahead, with an emphasis on the Breitbart-Freedom Caucus war against the Republican leadership on multiple fronts.

And one source told NBC News that the GOP should brace for a, quote, "Bloody September".

For now, I`m joined by Jonathan Swan, national political reporter for "Axios", Ayesha Roscoe, White House correspondent for "Reuters", and David Catanese, who`s senior politics writer for "U.S. News & World Report".

In order, down the row here -- how ballistic is this going to get? Forget about North Korea if you can for five minutes. How ballistic -- how crazy is it going to get if Steve Bannon hooks up, links up with the Freedom Caucus and decides that he`s going to demolish anything Trump tries to do in trying to get Harvey relief, with debt ceiling, any clever gain in the leadership polls, he`s going to blow it apart.

JONATHAN SWAN, NATIONAL POLITICAL REPORTER, AXIOS: Two hours in the "Breitbart" embassy with Matt Boyle, who is probably the most feral political reporter in Washington, Steve Bannon --

MATTHEWS: What does feral mean?

SWAN: Feral means off the chain. He is truly --

MATTHEWS: What animal does that refer to?

SWAN: What`s the fiercest attack dog that you know, Chris?

MATTHEWS: What species of animal is that, feral?

SWAN: Probably a species we haven`t seen in actual --


MATTHEWS: So you think they`re dangerous?

SWAN: I think that they`re going to fight leadership based on the conversation they had on Monday, on every turn.

MATTHEWS: OK. Jump ball here, what is the advantage of blowing up everything so the government doesn`t pay its bills? The government doesn`t continue to operate. Nothing gets -- nobody gets help down in Harvey, because of Hurricane Harvey, nothing happens. Who benefits from that?


MATTHEWS: Besides the Democrats I suppose in a weird way?

RASCOE: Well, that`s the thing, nobody benefits. I mean, you always get these terms with Steve Bannon, Bloody September. It`s always like some war movie, but there are real things at stake here.

And the question is, what do you get from just not getting anything done?

MATTHEWS: What`s the answer?

RASCOE: I mean, I guess you get points for the Freedom Caucus. You can say you stirred up your base. Other than that, there seemed like there will be some repercussions for what they do.

DAVID CATANESE, SENIOR POLITICS WRITER, U.S. NEWS & WORLD REPORT: You get standing on principle. Some of these guys believe this. They want spending cuts. They want structural reform, entitlement reform, things that are important to fiscal conservatives, deficit hawks, guys who ran on this going back to the Tea Party years in 2010 promised this, instead of just continuing on raise the debt ceiling.

Some of these guys do believe it but I do think there`s going to be the Bannon and Trump factor and who are they going to be more loyal to, the president or Steve --

MATTHEWS: You`re laughing.

CATANESE: Oh, I`m not laughing.

MATTHEWS: You are. You`re laughing. There are people out there who are enjoying absolute chaos.

CATANESE: They proved their force in the health care debate, right? Meadows was the main player and he was the guy that Trump had to deal with trying to get votes. They barely got it through the House. Then it obviously didn`t work through the Senate.

So, I think he is going to be --

MATTHEWS: OK, let`s get the numbers here. About 33 percent in all the polls say they`re sticking with Trump through hell and high water. We get that. I know the strategy, I think it is, is hold that 33 percent and then add 10 percent by beating the heck out of whoever he runs in two or three years, just to humiliate little -- no, not little Richard.

CATANESE: Little Marco.

MATTHEWS: Little Marco, Little Richard was a musician.

Just trashing them, he figures he can win that way. But what`s in it for the country when the 33 percent shrinks even further? I mean, the Freedom Caucus, how many do they represent if they blow up everything?

In other words, the government becomes a deadbeat. The United States -- the dollar doesn`t mean anything. Our debt doesn`t mean anything. It`s a joke. We become a banana republic, not to knock banana republics. Who benefits from that?

RASCOE: Well, I think when you talk about the health care debate. That`s the perfect example. You have the Freedom Caucus and they drove that health care bill further and further to the right and made it more and more conservative. And then you didn`t get anything.

And that issue is still ongoing. We`re not talking about health care. But that`s not because the issue has been solved.


RASCOE: There`s just not support to get it done.

MATTHEWS: Who`s happy about how that was left?

SWAN: Chris, they can`t --

MATTHEWS: You`re right.

SWAN: I think what we`re going to see over the next month is a governing majority made up of Republican leadership, moderates and Democrats. Now, that`s going to hurt Paul Ryan and Mitch McConnell politically. Trump is not going to be happy about it. But that`s what you`re going to see.

MATTHEWS: That`s not going to happen.


MATTHEWS: In other words, no more Hastert Rule. Just get Democrats --


SWAN: It will be a heavy Democrat bill.

MATTHEWS: OK. We`ll see. By the way, you said Democrat. Not Democratic. Is it an adjective or a noun?

SWAN: You`re American. You should tell me.

MATTHEWS: OK, thank you. The roundtable is sticking with us. And up next -- it`s Democratic. These three will tell me something I don`t know. Be right back.


MATTHEWS: Well, we continue to monitor protests all around the country in response to the president`s decision to end the program that has protected hundreds of thousands of so-called DREAMers.

Earlier today, thousands took to the streets in cities from coast to coast. In New York City, dozens were arrested in protest in front of Trump Tower. There you go.

And we`ll be right back.


MATTHEWS: We`re back with the HARDBALL roundtable.

David, tell me something I don`t know.

CATANESE: President Trump is going to North Dakota tomorrow to pitch his tax plan. On Air Force One with him will be Democratic Senator Heidi Heitkamp, who is up for election next year. She wants to work with the president.

Last week, he is in Missouri. He whacked at Claire McCaskill publicly.

The Democrats are going to have to pick a side. Do they want to be whacked by the president in public or ride on Air Force One with him and reap the wrath of liberals?

MATTHEWS: It sounds like mob movie.

Thank you so much, Jonathan Swan, Ayesha Rascoe and David Catanese for a great time tell me something.

When we return, let me finish with Trump watch. He definitely should learn from the one tonight, if he`s learnable.

You`re watching HARDBALL.


MATTHEWS: Trump Watch, Tuesday, September 5th, 2017.

Of all the odd claims of Donald Trump, none has been more provocative than his promise to, quote, make America great again. I believe that that requires that we put a few facts on the table. They are what has constituted America`s greatness over these many decades.

One is the first principle of our national compact, that all of us are created equal under the law and before the country. We`re not divided between those Trump calls the winners and what the ones he calls the losers. We`re equal among each other just as we are equal created in the eyes of God.

Second, we are not by nature a divided country. Our ideal is and has been national unity. We come from many to one, e pluribus unum.

Third, we are most of us descended, some surprisingly recently, from immigrants. We did not come from rapists.

Fourth, our country`s beliefs are those the world has prized -- a free press, an independent judiciary, a belief in rule by law. Isn`t it odd that Donald Trump promises to make America great again by deconstructing the very forces that build us in the first place, that have held us up and together since the founding days?

We are a great country, Mr. Trump. We must also be a good country. That is a fact we need to hold firm as we face threats to our beloved republic from without but also from within.

And that`s HARDBALL. Thanks for being with us.

"ALL IN WITH CHRIS HAYES" starts right now.


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