McDougal suing to break silence on Trump. TRANSCRIPT: 03/20/2018. Hardball with Chris Matthews

Guests: Jennifer Rodgers, Michael Schmidt, Issie Lapowsky, Eliza Collins, John Brabender

HARDBALL March 20, 2018 Guest: Jennifer Rodgers, Michael Schmidt, Issie Lapowsky, Eliza Collins, John Brabender

ARI MELBER, MSNBC HOST: That`s later tonight. I`m going to ask him about this news and the lie detector test and her claims that this means she was truthful about her claims. So if you want that, it`s tonight at 10:00 p.m. eastern.

Don`t no anywhere now, though, HARDBALL WITH CHRIS MATTHEWS is up next.

CHRIS MATTHEWS, MSNBC HOST: Lie detector. Let`s play HARDBALL.

Good evening, I`m Chris Matthews in Washington.

Here are three stories Donald Trump didn`t want to see today. First, adult film actress Stormy Daniels who is suing to get out of a secrecy agreement underwent a polygraph test back in 2011. She was asked about an alleged sexual relationship with Trump. The White House denied the allegation but the person who administered the polygraph test concluded Daniels was telling the truth about having unprotected intercourse with Donald Trump in July of 20 -- actually 2006. According to the report, the probability of deception was measured to be less than one percent.

Meanwhile as first reported by "The New York Times," a former playboy model who claims she had an affair with Donald Trump, sued on Tuesday, to be released from a 2016 legal agreement requiring her silence. Karen McDougal was paid $150,000 by the "National Enquirer" in h 2016 according to the lawsuit. Donald Trump is friend with the chief executive of the "Enquirer`s" parent company. A spokesperson for McDougal`s lawyer confirmed to NBC she filed a lawsuit.

And then there is this. The "Washington Post" reports a New York judge said Tuesday that a defamation lawsuit against President Trump related to an allegation that he sexual harassed a former "Apprentice" contestant may go forward. Summer Zervos sued Trump last year after he accused her of making up claims against him.

Here is how she previously described her encounter with Trump.

(BEGIN VIDEO CLIP)

SUMMER ZERVOS, FORMER APPRENTICE CONTESTANT: He put me in an embrace and I tried to push him away. I pushed his chest to put space between us. And I said, come on, man, get real. He repeated my words back to me, "get real," as he began thrusting his genitals. He tried to kiss me again with my hands still on his chest and I said, dude, you are tripping right now. Attempting to make it clear I was not interested.

(END VIDEO CLIP)

MATTHEWS: Well, Claire Atkins is senior media editor for NBC News. Katie Phang is an MSNBC legal analyst. Jonathan Lamire is a White House reporter for the "Associated Press" and MSNBC political analyst. And Jonathan Capehart is an opinion writer for the "Washington Post" and, of course, an MSNBC contributor.

I want to start with Claire, I think, feel free as both attorney and as person who`s watching this story as a narrative, where are these three together now going to add up, to more trouble, more mishigans (ph) for Trump? I wonder how many lawyers he can deal with on one day. Three lawyers here. Teams of lawyers. Then lawyers to fight Mueller, on all the questions of obstruction, collusion, and possible business misbehavior.

CLAIRE ATKINSON, NBC NEWS SENIOR MEDIA EDITOR: Yes. I mean, I hate to use a phrase from the Clinton era, but it really feels like there`s a bimbo eruption going on. There`s an awful lot of negative news today. The lady problems are mushrooming. The Stormy Daniels lie detector test today was one of our top performing stories on the Web site. So there`s huge, huge interest in what these women have to say. And passing the lie detector test obviously suggests that Stormy`s telling the truth.

One other interesting thing to talk about, Chris, is the idea of American media trying to stop Karen Douglas, the playboy model, from telling her story. Catch-and-kill is a common practice in tabloid journalism. It happens all the time in London where your rival has a great story, sorry, somebody has a great story out, you don`t want your rivals to get it and so you buy the story and you kill it. That`s what happened to Karen.

She wants the right to go out there and tell her story to anybody, you know, she is fighting nondisclosure agreements and trying to release herself from those legal problem problems and tell whatever her story is.

MATTHEWS: Let me go to Katie. You have been great on this on the legal front. Let`s start with the legal front, Katie.

It seems to me that these people are very live witnesses against Trump. They are out there doing lie detector tests. They exist. They go on television. They are persistent and in the case of Stormy Daniels, she may be as good a manipulator of the media as Donald Trump, himself. That`s saying something. Her lawyer is certainly as good as his lawyers, Avenatti. It doesn`t -- I thought these stories would go away like the bus conversation would go away with Billy Bush. I mean, we all learned nobody on the Trump side seems to care. He still holds his numbers in the high 30s or low 40s now. Politically, it doesn`t seem to matter in the short run, but legally, is this going somewhere, these three cases combined?

KATIE PHANG, MSNBC LEGAL ANALYST: Yes, absolutely. So all three of these plaintiffs are successfully trying their cases in the courts of public opinion before they even actually hit the ground truly running in the legal arenas that they are each individual wily in.

Now, obviously, Summer Zervos hit a home run today when a New York Supreme Court justice basically said quote "no one is above the law," speaking directly to Donald Trump.

But in terms of the legal power that`s behind this, the reason why these cases remain and the reason why they are so interesting is because they are going to collectively chip away at the Trump defense. Chip away at the Trump armor eventually exposing. Because think about it, the more that you sue him, more you take him to court, the more chances you have cha judge is going to agree either an NDA doesn`t apply, the confidentiality is gone and this President of the United States has to sit for a deposition and to answer for what he has done.

MATTHEWS: Well, what`s more likely that he has to sit for a deposition the way President Clinton had to do in the Paula Jones case which got him into all that trouble, or the fact that these two other women, Stormy Daniels and Karen McDougal, get to tell their stories on places like "60 Minutes." And in, perhaps, magazine articles, other interviews, movies, perhaps, I don`t know. What`s more likely? All three?

PHANG: So Stormy Daniels has that potential threat of the binding confidential arbitration that she is staring down upon. Karen McDougal`s lawsuit is unusual. She is claiming her lawyer actually was involved in deceiving her.

MATTHEWS: Right.

PHANG: And that creates a whole new world of potential discovery because if her lawyer was involved in cahoots with Michael Cohen and AMI, then that is not going to go to arbitration from what we can see. And then finally, with Summer Zervos, her lawsuit is a defamation lawsuit and there is no binding arbitration there. So the discovery process is open to the public. But, of course, there`s an appellate process that Summer`s case is probably going to take and make it sometime before deposition ever happens. But as you also mentioned, Chris, Mueller is knocking at his door, too. It isn`t like these are the only people that wanted to get He`s got a lot of problems, he being Donald Trump.

MATTHEWS: Well, thank you, Katie.

As I mentioned NBC News confirmed the news former playboy model Karen McDougal, you just looked at her pictures there, fought a lawsuit against AMI, that`s parent company of the "National Enquirer."

She said in a statement, AMI lied to me, lied to me, made empty promises and repeatedly intimidated and manipulated me. I just want the opportunity to set the record straight and move on with my life free from this company, its executives and its lawyer.

Jonathan Capehart, a couple compelling arguments here. One, I mean, you can argue Stormy Daniels and the President deserve each other. I don`t think there`s any hero in that particular story. But the McDougal story, she tried to sell her story to the "National Enquirer." They bought it then killed it. It is called catch-and-kill. So she was, I think, manipulated, I would argue. And the other one, I did think Stormy, the fact that Stormy is wanting to take a lie detector test, that gives her credibility with most people that she wanted to take a lie detector test and according to the expert passed it.

JONATHAN CAPEHART, OPINION WRITER, WASHINGTON POST: Right.

MATTHEWS: So those two seem to be getting --. Zervos, I`m not sure I figured out that case yet. Give me your thoughts.

CAPEHART: So when it comes to Stormy Daniels and the lie detector test, in a court of law, it`s up to the judge`s discretion whether to use it because lie detector tests can be manipulated, but in the court of public opinion, where the American people have been feeding on a diet of law and order and CSI, and all of these courtroom dramas, a lie detector test means something. It means someone was willing to sit there, be asked these questions and if it comes out and says they are telling the truth, by in large, people are going to believe them. So that, between the --

MATTHEWS: Well, Trump won`t take one.

CAPEHART: Well, there you go. But between the "60 Minutes" interview that we are going to see this coming Sunday and the lie detector test and the way as you pointed out, Michael Avenatti has been just out there in a public relations blitz on behalf of Stormy Daniels, she is a credible witness. So when it comes to Karen McDougal -- mixing them all, Karen McDougal or Summer --

MATTHEWS: Karen McDougal.

CAPEHART: Karen McDougal is the one who is suing because she was hoodwinked by AMI.

MATTHEWS: Bad lawyer.

CAPEHART: And her lawyers. That`s dirty dealing that, again, will make her a sympathetic litigant against the President, or at least puts the President in a space where he is going, doing battle with someone --

MATTHEWS: OK. Here`s the toughest question, to Jonathan Lamire, the toughest question of all. Does this matter to Trump supporters? Any of it?

JONATHAN LAMIRE, WHITE HOUSE REPORTER, ASSOCIATED PRESS: None of it has yet. You know, his poll numbers among his core supporters, that includes evangelicals --

MATTHEWS: He`s at 43 percent now.

LAMIRE: Right. If you were to draw up just a blind -- no name, but just list all these revelations and hand that to your average evangelical voter they would probably be aghast. But Donald Trump, they still support him. They believe in his mission. They think he is getting things done for their cause even if they don`t necessarily approve of his personal behavior.

But what this does do, it puts pressure on Republican lawmakers on Congress -- on Capitol Hill. They have to face more questions. It is another distraction.

MATTHEWS: Does it make them want Mike Pence?

LAMIRE: I mean --

MATTHEWS: I`m serious. Does it make them want Mike Pence? Which means would they just as soon get this guy out of there and go to Pence who they can defend?

LAMIRE: For some it might. But we have seen to this point a lack of guts from the Republicans to stand up to the President, who still --.

CAPEHART: Yes. They are not making any moves to look like they are opposing the President or even setting up vice President Pence.

(CROSSTALK)

LAMIRE: And they are afraid of his twitter account. But this is -- the image here, though, of Stormy Daniels in the polygraph is a powerful one. And this is -- as you say, like, the part of why this is -- this is starting to stick is that she is out there. She`s a real person. You know, we can hear - we are going to hear her interview. We can see her pictures. I wouldn`t recommend Google searching her at work. But you are seeing --

MATTHEWS: In other words, you are recommending it.

LAMIRE: Right.

MATTHEWS: Anyway, let`s take a look at the (INAUDIBLE).

Summer Zervos came to a former contestant on "Apprentice" and suing President Trump for defamation. During the campaign of 2016, she was one of more than a dozens of women who accused Mr. Trump of sexual assault or misconduct. Here are some of their accounts.

(BEGIN VIDEO CLIP)

JESSICA LEEDS, TRUMP ACCUSER: It was a real shock when all of a sudden his hands were all over me. He started encroaching on my space. And I hesitate to use this expression, but I`m going to, and that is he was like an octopus. It was like he had six arms. He was all over the place.

JILL HARTH, TRUMP ACCUSER: He pushed me up against the wall and had his hands all over me and tried to get up my dress again. And I had to physically say, what are you doing? Stop it. It was a shocking thing to have him do this.

KRISTIN ANDERSON, TRUMP ACCUSER: The person on my right who unbeknownst to me at that time was Donald Trump put their hand up my skirt. He did touch my vagina through my underwear.

KARENA VIRGINIA TRUMP ACCUSER: He then walked up to me and reached his right arm and grabbed my right arm. Then his hand touched the right inside of my breast.

(END VIDEO CLIP)

MATTHEWS: Well, Trump called the claims against him, those, totally and absolutely false. And he attacked the women making them. Anyway, let`s watch. Those who made the attacks. Let`s watch.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: These events never, ever happened, and the people that said them meekly fully understand. You take a look at these people, you study these people, and you will understand also.

These people are horrible people. They are horrible, horrible liars. I have no idea who these women are. Have no idea. When you looked at that horrible woman last night, you said, I don`t think so.

All of these liars will be sued after the election is over.

(END VIDEO CLIP)

MATTHEWS: Well, Katie, that hasn`t happened. There`s been no litigation by him.

PHANG: No.

MATTHEWS: He hasn`t tried to keep these stories alive. They have stayed alive of their own volition and power. What about the defamation charge, he could have just said I didn`t do it, but he didn`t do that? He tried to destroy them.

PHANG: Yes, so it`s very similar to the Bill Cosby defamation things that have occurred. As you know, Bill Cosby is looking at his retrial last month for his own criminal charges. But as you will recall, there was a huge slew of defamation lawsuits that came from his victims because he didn`t just say, I didn`t do it, he went one step further which is exactly what you heard in all of those clips from Donald Trump. Instead of just letting it go and saying it didn`t happen or maybe even saying no comment, he went so far as to accuse them of being liars and horrible, horrible people. And as a result, thereof, he is looking at a defamation lawsuit from Summer Zervos.

And again, as we heard today, judge said I don`t care that you think this case needs to be dismissed or stayed until you are done serving your Presidential term, you are going to be an active litigant in this lawsuit, Donald Trump, and that was the ruling from a judge today.

MATTHEWS: Claire, I thought this wasn`t going to grow. It`s growing. I thought, you know, people after the bus incident, that conversation he had with Billy Bush, that his people would take anything and the press can`t keep covering this same story, but this seems to metastasize. I get - I guess there will be more people coming forward because of the comfort level that now the three of them are going to give anybody else who has a story like this.

Claire, what do you make of the future, two to three weeks, and that we have talking at this level or we have been talking serious action by the courts or what?

ATKINSON: I think it`s a good point. You know, let`s not forget we are in the middle of the Me Too movement where women are stepping forward every day accusing powerful men of terrible things. And for the most part, they are getting justice except for the likes of Summer Zervos who is saying I have been defamed, even if he is denying it, calls me a liar.

And so, I think this keeps going. I think these women should take heart. We will see what Stormy has to say on "60 Minutes" on Sunday. And you know, maybe we will be looking at real evidence come Monday morning as to who`s telling the truth in all these situations.

MATTHEWS: I think the more evidence, the more details, the more, as we say in our business, tic-tac, of what actually happened, the better it is for the people making the claims. People begin to realize this really did happen because it has the sense of veracity that people begin to understand, yes, that probably happened. Yes, I can see that happening. And it looks bad for Trump. I don`t think this is going away.

Claire Atkinson, Katie Phang, Jonathan Lamire, and the other Jonathan, our own Jonathan Capehart.

Coming up, as Trump`s legal problems pile up, he is struggling to shake up his legal team in the face of the Russia investigation. He has added one new high-profile lawyer, but another star attorney Trump wanted to hire will not join the team, it seems. And it`s as if the only person Trump trusts right now is Trump. And that`s a sorry condition. And that`s ahead.

Plus, big trouble over the big data firm that helped Donald Trump win the victory in 2016. Cambridge Analytica is under fire now for allegedly stealing 50 million social media profiles and weaponizing them to win the election for Trump. And now Robert Mueller wants answers to that.

And as the Russia probe closes in, Trump and his allies are pushing wild conspiracy theories about Mueller`s probe. They are looking for a way to discredit the Russia investigation. It`s Trump`s, I believe, last wall of defense. The final battle he hopes will save his presidency.

Finally, let me finish tonight with a very bad national memory of 15 years ago today. Look it up. But I`ll be back with that.

This is HARDBALL, where the action is.

(COMMERCIAL BREAK)

MATTHEWS: In an exclusive new interview with NBC`s Pete Williams, FBI director Christopher Wray addressed reports that he threatened to resign after being pressured by the White House to fire some senior individuals. Well, early this year, numerous allies report that Wray was pressured by the Trump administration to get rid of former FBI deputy director Andrew McCabe.

Here`s FBI director Wray speaking to NBC`s Pete Williams.

(BEGIN VIDEOTAPE)

PETE WILLIAMS, NBC NEWS HOST: Do you feel any political pressure from the White House?

CHRISTOPHER WRAY, FBI DIRECTOR: No.

WILLIAMS: President`s never asked you to say anything about it or clear him?

WRAY: About the Russia investigation?

WILLIAMS: Yes.

WRAY: He`s never asked me to do anything with the Russia investigation.

WILLIAMS: It`s been reported that you threatened to resign over being urged to fire people. Is that correct?

WRAY: You know, I have been very clear from the minute I was nominated, to the minute I walked in the door, to countless opportunities since then, that I am unwaveringly committed to doing this job by the book, independently, following our rules, our processes, free from political or partisan influence.

WILLIAMS: So it sounds like you`re saying those reports are not wrong.

WRAY: I`m not going to talk about specific conversations.

(END VIDEOTAPE)

MATTHEWS: We will be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL.

As the president`s recent attacks on the special counsel suggest, Trump is going it alone, adapting a more aggressive legal strategy to deal with the Russia probe, despite the potential consequences.

And now "The New York Times" is reporting that Trump`s legal defense team is collapsing and that the president`s ignoring the advice of his lawyers.

According to "The Times," Trump`s lead lawyer, John Dowd, "has contemplated leaving his post because he has concluded he has no control over the behavior of the president." Big surprise for him.

Dowd made headlines over the weekend when he said for the first time that the special counsel`s probe should be shut down. Dowd later modified his statement, saying he was only speaking for himself. However, "The New York Times" now reports that he was, in fact, acting at the president`s urging when he called for it to be shut down.

Furthermore, "Mr. Trump has weighed aloud whether to dismiss his lawyer Ty Cobb who had pushed most strongly a strategy of cooperating fully with the special counsel investigation."

Aside from his handlebar mustache, Cobb is best known for the failed promises he made to the president last fall, telling him the Russia probe would end by a certain date. First, he said it was Thanksgiving. Then Christmas. Then the new year. And it`s still going on.

However, as "The New York Times" reported last month, those assurances were "primarily aimed at keeping Trump from antagonizing Mr. Mueller."

Well, joining me right now is the co-author of that "New York Times" article, Michael Schmidt. And Jennifer Rodgers is a former assistant U.S. attorney.

Thank you both.

It looks to me like one of those courtroom scenes where the guy doesn`t trust his lawyer anymore, because he`s losing.

MICHAEL SCHMIDT, "THE NEW YORK TIMES": I think the president is looking for a magic bullet here to get himself out of this.

He has seen that cooperation, at least in his eyes, has not gotten him out of this. Here we are, more than a year into the presidency. The investigation looks like it`s intensifying, certainly not over. Lawyers tell him one thing. He is a guy that gets frustrated easily.

And he`s looking around for other folks to come in. Who can help him get out of this? The problem that the president has is that he thinks he`s his best spokesman and his best lawyer and strategist. And he believes he can drive this by himself.

The problem is, is that the lawyers are very afraid about what he could do if he were to go and sit down with Mueller, what he would say, what more problems he could get himself into.

MATTHEWS: Well, if he gets into a deposition situation, he could put himself out of the White House.

SCHMIDT: The president is someone who believes he can explain everything, but he often doesn`t stop talking. He will talk about many different things over a very short period of time.

He will often say things that are outlandish, things that are not true. And you just can`t do that when you`re sitting down with Bob Mueller.

MATTHEWS: Well, "The Washington Post" also describes chaos among the president`s team, reporting that: "Lawyers tasked with defending Trump are increasingly operating with conflicting information and are feuding internally. Sources say Trump`s attorneys are not only working on his defense, but are also serving as Trump`s publicists and therapists."

Furthermore, "The Washington Post" reports that: "Trump is not consulting with top advisers on his Russia legal choices or his comments about the probe. He`s instead watching television and calling friends."

Well, separately, "The Washington Post" reports that Trump`s legal team has attempted to hire the high-profile veteran attorney Ted Olson, the former U.S. solicitor general. However, Olson has rebuffed the offer, as Ted Boutrous, one of his partners at Gibson Dunn, said, "Olson will not be representing President Donald Trump."

Let me go to Jennifer.

This -- it just seems like Trump is -- there`s only two people, it seems to me, really knew what Trump did, Trump. I think he`s got a good memory of what`s done. But he doesn`t know the illegality of what he`s done probably. Mueller knows pretty much what Trump has done and knows all about the illegal -- or the illegalities involved.

So how does a lawyer represent Trump when they don`t have that information that both -- that is shared -- that is shared basically now just by Mueller and his team, the opposition, the enemy, and Trump? You think Trump levels with these lawyers?

JENNIFER RODGERS, FORMER ASSISTANT U.S. ATTORNEY: Well, I think he has to if he`s smart. I mean, it`s unclear. Of course, what he`s telling them, all of it will be protected by attorney/client privilege. And I`m sure they`re emphasizing to him that he has to come clean with them, or they can`t help him.

You know, I think they also will be speaking to other people within the attorney/client privilege veil and trying to figure out what happened that way, too. But it`s always been unclear how candid he is with his lawyers. It`s always been unclear what that relationship is like.

We know some things, but not very much. So, I just think this is a critical juncture for him. And if he wants to try to do the best job of defending himself against this investigation, he will have to start working with his lawyers ASAP.

MATTHEWS: Do you think it`s possible, Michael, that he has told his attorneys about the relations between his family members, Donald Jr., Jared, his son-in-law, and the Russians?

Do you think that basic information on the probe here, so critical to it, do you think he would tell that to his lawyers, oh, yes, I talked to Jared about it, he talked to Kislyak, and he talked to the other lawyer that came to the tower that day?

I can`t imagine Trump admitting that.

SCHMIDT: They have to prepare for those questions for going in.

Look, they -- you have to remember, they`re at a juncture here where they have to decide, are they going to sit down with Mueller or not? And if they`re going to do that, they`re going to have to come up with answers to those questions. So, they`re certainly going to have to have those discussions.

But you have to remember, from the beginning Trump, told his lawyers, I did nothing wrong. How can we get rid of this as quickly as possible? And they said, cooperate.

That`s what you have seen. Now, the problem is, is that not -- if the president did do something wrong, then they have cooperated themselves into that problem.

MATTHEWS: Well, anyway, "The Washington Post" is now reporting tonight that President Trump ignored specific warnings from his national security advisers when he congratulated Russian President Vladimir Putin today on his reelection victory.

Trump`s briefing materials included a section in all capital letters that read, "Do not congratulate." But Trump ignored that guidance and congratulated Putin anyway.

"The Post" also reports that Trump decided not to heed his aides` talking points instructing him to condemn Putin about the recent poisoning of a former Russian spy in the U.K., the United Kingdom.

Earlier today, Trump called his conversation with Putin a very good call.

Michael, you`re one of the hottest newsmen around on this whole thing. Does Trump realize, by letting it go, what our closest allies in the world, the British do, by failing to back them up on this in this conversation with Putin, he`s going to be the bad guy in this?

SCHMIDT: Donald Trump has said a lot of...

MATTHEWS: A real bad guy on this.

SCHMIDT: Donald Trump has said a lot of nasty things about a lot of people, but almost nothing nasty about Vladimir Putin.

MATTHEWS: Which tells you?

SCHMIDT: Very, very, very few comments...

(CROSSTALK)

MATTHEWS: Which normally would tell you in journalism what?

SCHMIDT: It`s a curious -- it`s a curious thing.

MATTHEWS: Not that curious to you, Michael.

(LAUGHTER)

SCHMIDT: I...

MATTHEWS: What has he got in cahoots with Vladimir Putin? What do they share that he doesn`t want shared with anyone else?

SCHMIDT: You have to ask Bob Mueller that question. He`s got some more powers than I do to figure that out.

MATTHEWS: That`s what I think.

Anyway, thank you so much. Jennifer, thank you for joining us for your expertise, Michael Schmidt, for your reportage.

Up next: One of the firms that helped power the Trump presidential campaign is in hot water tonight, accused of stealing private data from more than 50 million Facebook users. This appears to be of interest to Mr. Mueller.

And this is HARDBALL, where the action is.

(COMMERCIAL BREAK) MATTHEWS: Welcome back to HARDBALL.

Cambridge Analytica, the data firm hired by Jared Kushner to help Donald Trump during the 2016 election, is coming under increased scrutiny after a series of investigations have exposed its practices.

NBC`s British partner ITN Channel 4 conducted a number of undercover reports about the firm. The videos show a reporter posing as a prospective client of Cambridge Analytica and executives bragging about using bribes and prostitutes to entrap politicians.

It comes just days after both "The New York Times" and "The Guardian" reported that the firm, which was created by Republican mega-donor Robert Mercer and Steve Bannon, had access to data of more than 50 million Facebook users without their permission.

In another undercover video released today, the company`s CEO is heard bragging about the firm`s work on behalf of the Trump campaign. Let`s watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Have you met Mr. Trump?

ALEXANDER NIX, CEO, CAMBRIDGE ANALYTICA: Many times.

UNIDENTIFIED MALE: You have?

NIX: We did all the research, all the data, all the analytics, all the targeting. We ran all the digital campaign, the television campaign, and our data informed all the strategy.

(END VIDEO CLIP)

MATTHEWS: Steve Bannon, who`s co-founder of Cambridge Analytica, as I said, introduced the CEO, Alexander Nix, to the Trump campaign.

The firm was officially hired by Jared Kushner in June of 2016. The company provided Trump campaign with data, polling and research services.

In a statement, Cambridge Analytica denied that its or its affiliates -- quote -- "use entrapments, bribes, or so-called honey traps."

It added that the company "has never claimed it won the election for President Trump. This is patently absurd. We are proud of the work we did on that campaign and have spoken in many public forums about what we consider to be our contribution to the campaign."

Well, late today, the board of Cambridge Analytica suspended CEO Alexander Nix, pending an investigation.

And according to "The Wall Street Journal," Robert Mueller has taken an interest in the company`s activities during the campaign and has requested the firm "turn over the e-mails of any Cambridge Analytica employees who worked on the Trump campaign."

For more on that, I`m joined by Issie Lapowsky, senior writer for "Wired."

Issie, thank you for coming to us and helping us crosswalk to most people the big deal here. I want to ask you my favorite question. And you can go at it with all your guns blazing. So what?

ISSIE LAPOWSKY, "WIRED": Well, I think the big issue here is data privacy, right?

A lot of people are trying to boil this down to the 2016 election. But what we have here is a massive unauthorized access of 50 million Facebook users` data. I think a lot of people would be upset about that.

We consider in this country the vote to be a private thing. And to know that the information that can sort of intimate how you might vote is just being freely bought and sold on the Internet and passed along to people who you never knew were part of the bargain to begin with is really an outrage to a lot of Americans.

MATTHEWS: But we all -- a lot of us, you know, cheered when we heard about the microtargeting of the Obama campaign in `08, Jim Messina and the rest of them, how they brilliantly found exactly who drives a Toyota, who drives a -- you know, a Mercedes or what that tells you, or who likes whatever, chocolate cake over devil`s food or whatever, angel food.

I don`t know what these things do, but they somehow tell you how you`re going to vote. And we thought that was fun and great. Now, what`s the difference here? LAPOWSKY: I think that we`re in, A, a different time with regard to tech companies. I think the public discourse around big tech is changing, in part because we saw how these tech platforms were used and abused during the 2016 election.

The other difference with what the Obama campaign did is, at least when they were taking all this data, which they were -- you`re very right -- they had apps that they asked people to sign in through Facebook, and they would get millions and millions of people`s data -- at least those apps were connected to the Obama campaign.

In this case, with Cambridge Analytica, they hired a researcher who created an app that said, I will predict your personality. Just take this quiz.

It had no connection to politics. It was supposed to be for academic purposes. And add to all of that what we`re seeing in the Channel 4 news broadcast. You had all of this data being passed to a firm that seems to use really underhanded tactics to get what it wants, or at least talks about using those tactics.

MATTHEWS: Was it stolen? Is that the difference? Did the information that the people freely gave up for use of the Obama campaign -- in this case, the information was stolen and metastasized, because they not only took your information, but all your Facebook colleagues, everybody you knew. They grabbed all that, too.

Was that a theft? That`s the tough question.

LAPOWSKY: I want to be clear. At the time, this was completely in agreement with Facebook`s terms. At the time, they said, if you`re an app developer, you not only get access to the data of the people who download your app, but also all of their friends. This was called the Facebook social graph API.

MATTHEWS: Yes.

LAPOWSKY: They changed that in 2015. So, I wouldn`t call it a theft necessarily.

But what happened and that wasn`t supposed to happen was this third-party researcher who created the app was never supposed to pass that data on to anybody else. That was supposed to be his and his alone.

Cambridge Analytica, SCL, they were never supposed to be part of the equation. As soon as Facebook found out that they were, as soon as they were alerted by the media, they told Cambridge, they told SCL and the researcher, get rid of this data.

And what the new reporting is suggesting is that that didn`t necessarily happen.

MATTHEWS: They still have it, don`t they? The Trump people have the 50 million people`s profiles.

LAPOWSKY: Well, I want to be clear. The Trump campaign says that during the campaign, they were working with Republican National Committee data. They had Cambridge Analytica data analysts in their office, but the data that those analysts were crunching was from the Republican National Committee.

But the speculation is that Cambridge or SCL still has that data.

MATTHEWS: Yes.

Give me one example of how you would find a Trump voter through the Facebook information, the data we`re talking about. Give me one indicator that would say, this is a Trump voter.

LAPOWSKY: Well, I mean, for instance, you get access to what people like. So, maybe they`re liking a lot of conservative news outlets. Maybe they`re liking some conservative politicians. Maybe they`re commenting a lot or attending events that have to do with conservative causes.

So, there`s a million different indicators. And, you know, there`s other demographic information, of course, as well that would indicate, you know, your general age range, probably your gender, and where you live. And all of that gets merged with other data sources from around the Internet, including, you know, your credit card data.

So they mix all of this together, and suddenly they have a pretty good portrait of who you are. MATTHEWS: Well, it doesn`t feel too good to be manipulated.

Thank you, Issie Lapowsky, for your expertise.

Up next: With the Mueller probe closing in, the president and his allies are spouting wild conspiracy theories as Trump`s last defense, last redoubt, I would say, to discredit the Russia probe, so that the base doesn`t accept the special counsel`s findings when they inevitably arrive.

You`re watching HARDBALL.

(COMMERCIAL BREAK)

CHRIS MATTHEWS, MSNBC HOST: Welcome back to HARDBALL.

As Robert Mueller`s investigation closes in on the president, the president, himself, and his allies are waging a disinformation campaign aimed at shutting the whole thing down. The latest line of attack, officials within the Justice Department and FBI are supposedly engaged in a conspiracy to take down Donald Trump. That`s the theory espoused by Joseph diGenova, the latest lawyer to join Trump`s legal team.

Here`s what he told Fox Business two weeks ago.

(BEGIN VIDEO CLIP)

JOSEPH DIGENOVA, FORMER U.S. ATTORNEY: This was a plot, a brazen plot, to exonerate Hillary Clinton in the e-mail server case, to make, to ensure that she became president. And if by chance she lost, part of the plot was to frame Donald Trump with a false crime. This is the single most important scandal of the last 50 years because senior DOJ and FBI officials engaged in conduct that was designed to corrupt an American presidential election.

It wasn`t the Russians who corrupted the presidential election. It was the American officials at the Department of Justice and the FBI.

(END VIDEO CLIP)

MATTHEWS: Well, there you have it, the message that the Trump people want everybody to have when Mueller comes out with his report. In other words, don`t believe a word of it.

DiGenova joins a host of Trump allies calling for investigation into those conducting the Russia investigation. Let`s watch.

(BEGIN VIDEO CLIP)

REP. MATT GAETZ (R), FLORIDA: I think there`s a lot more investigating to do, and it may very well be that you had an informal cabal functioning in secret with a societal goal of hurting President Trump without any evidence.

UNIDENTIFIED MALE: That sounds like a massive conspiracy theory.

GAETZ: It may have been a massive conspiracy at play.

MARK LEVIN, FOX NEWS HOST: Now, Comey is like the mob boss of the operation. All this was happening under him.

LOU DOBBS, FOX BUSIENSS HOST: This is a -- this is beyond a network of corrupt politicized cronies. This is -- this is something close to some sort of organized criminal element within Department of Justice.

UNIDENTIFIED MALE: It`s a conspiracy.

DOBBS: Working against the very purpose of the department.

UNIDENTIFIED MALE: Lou, it`s a conspiracy.

(END VIDEO CLIP)

MATTHEWS: Yes, I`m sure they both agree.

Today, we got striking new evidence that the disinformation campaign is already working. That`s coming up next with the HARDBALL roundtable.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL.

President Trump`s defenders argue there are officials within the Justice Department and the FBI engaged in a mass conspiracy to bring down this president. They contend that it`s part of a so-called deep state, a group of unelected government officials manipulating policy.

A new Monmouth University poll found 72 percent, almost three-quarters of Republicans, believe a deep state definitely or probably exists. Compare that to a "Washington Post" poll out just last year, in April of 2017, it found only 45 percent of Republicans believe in a deep state.

Well, the percentage of Democrats who believe in a deep state who also skyrocketed within the last year with 72 percent now believe -- this is Democrats believe this.

Let`s bring in the HARDBALL roundtable. This is confounding.

Eliza Collins is reporter for "USA Today". Cornell Belcher, of course, is a Democratic pollster and an MSNBC political analyst. And John Brabender is a Republican strategist.

Is there a deep state, John?

JOHN BRABENDER, REPUBLICAN STRATEGIST: Well, I would --

MATTHEWS: Are you with Joseph diGenova on this?

BRABENDER: I would describe deep state different than most people do. I think there is. But I think as a culture of Washington, that is lobbyists, bureaucrats who have been here through different administrations, media consultants, everybody, and in some sense, we feel like we own D.C. and --

MATTHEWS: Do they meet?

BRABENDER: No.

MATTHEWS: They don`t meet? They don`t have meetings?

BRABENDER: I think it`s a culture. In this case, I think there is a group within some of the bureaucrats that were pro-Obama, pro-Hillary who believe --

MATTHEWS: You belief the FBI is infested with liberals?

BRABENDER: I believe there are people who feel the last election was a mistake.

MATTHEWS: The FBI?

BRABENDER: I believe there were people within the FBI who think they were mistakes.

MATTHEWS: Ten days before the election, they announced Hillary Clinton`s under investigation again.

BRABENDER: Can I ask a question? Right. All the Democrats were claiming that that was a political move. If the Democrats are willing to say that Comey was political, why can`t the Republicans --

MATTHEWS: Because you claim it`s systemic.

Anyway, Cornell, there`s a difference in the charge here. I think the Democrats -- Lanny Davis was on this show yelling about the fact -- I think he has a point, ten days out, Comey comes out with this report that Hillary is still under investigation. I think that turned votes.

CORNELL BELCHER, MSNBC POLITICAL ANALYST: The idea -- well, it did. I mean, you can see in the data when that broke, I mean, a lot of Clinton people, and a lot of us watching data, when that broke, you did have movement right, in the wrong direction.

The idea that the FBI is trying to fix it for the liberals and for the Democrats is so preposterous, it makes my head explode, right? You know, this is really about undermining --

MATTHEWS: This guy believes it.

BELCHER: -- some central institutions. I actually don`t think -- I don`t think he believes in a deep state the way that FOX News and Donald Trump are trying to roll it out because what they`re trying to do is really undermine central institutions, right? They`re trying to muddy up the waters. So, Mueller and these departments do come out with their report, then they have sort of a way out of it, right, because they`re all in cahoots.

MATTHEWS: Isn`t that the strategy, Eliza? It looks to me like this is the last redoubt, which everybody has to have, a plan B. When everything else fails, they have to be ready with an argument. OK, don`t believe a word this guy says no matter how intricately involved it is, on collusion, or obstruction or business dealings or any of it, don`t believe any of it because it comes from a bad source, the deep state.

ELIZA COLLINS, REPORTER, USA TODAY: Well, I think there are two things at play. President Trump has been cooperating and seen this has not gone away, so he`s getting increasingly frustrated. So, this weekend was the first time he actually was calling Mueller out by name. He`s attacking him.

But his allies have been saying this all along.

MATTHEWS: Deep state?

COLLINS: Deep state. This is not new. They believe that there was corruption at the FBI. I mean, Andrew McCabe.

MATTHEWS: Well, they said they believe.

COLLINS: They said they believe that there was corruption in the FBI --

MATTHEWS: You never know what a politician believes. You can only go by what they say they believe.

COLLINS: But they`ve been planting this all along to sort of help ally themselves with the president, especially when they`re on Fox, that`s his audience.

BRABENDER: But here`s the big problem --

MATTHEWS: But what do you think Trump`s going to do if it comes to down to it, supposedly kids, his kids, one or two, his son-in-law, are facing indictment. They are indicted. What is he going to do?

BRABENDER: Well, I don`t think you`re going to see any case where he`s going it get rid of Mueller. He might criticize him but he`s not going to get --

MATTHEWS: He pardons the kids, then?

BRABENDER: I have no idea.

(CROSSTALK)

BRABENDER: But here`s the problem --

MATTHEWS: OK. You won`t answer my question. What`s he going to do?

BRABENDER: But here`s where I understand. We keep talking about Russia. It`s three different things. It`s collusion where there`s been no proof. Did they change the outcome of the election where there`s no proof? We all know they played yet nobody is spending enough time talking about that.

Here`s the real tragedy of all this --

MATTHEWS: It only takes one to bring them down.

BRABENDER: What Russia wanted to do was create political chaos in this country, and that they have achieved every day. I would argue today, it`s more the Democrats` fault than anybody else, that they are playing into --

(CROSSTALK)

MATTHEWS: John Brabender here, you`re on television saying that the country should have just let it go with the Russians?

BRABENDER: No, absolutely not. I think where we should be concentrating on is how they impacted our elections, how they`re going to pay a penalty and how we`re going to make sure it never happens again.

MATTHEWS: Who worked with them?

BRABENDER: Ii don`t think anybody necessarily worked with them.

MATTHEWS: How do you know that without an investigation?

BRABENDER: I don`t know that. But all I know is that this investigation is going on forever.

(CROSSTALK)

MATTHEWS: I think we have to know.

Anyway, the roundtable is sticking with us. And up next, these three will tell me something I don`t know. Be back.

(COMMERCIAL BREAK)

MATTHEWS: We`re back with the HARDBALL roundtable.

Eliza, gets to answer the question. Tell me something I don`t know.

COLLINS: So, Conor Lamb who won the Pennsylvania district last wee, that`s the 18th congressional district, today he filed for the 17th congressional district.

MATTHEWS: Is that the suburban one, the good one for him near Pittsburgh?

COLLINS: Yes, so his chances are better because of the redrawing of the map.

MATTHEWS: What about the loser, where`s he`s going?

COLLINS: I`m not sure if he filed yet, but it would be the 18th district turns into the 14th district which will be more conservative.

BELCHER: "New York Times" extensive study out yesterday done by Stanford and Harvard shows that inequality can be explained by what`s happening between our black boys and our white boys. And much of the inequality cannot be explained by traits or what`s happening in the household. Race matters.

MATTHEWS: Even kids of millionaires?

BELCHER: Even kids of millionaires. Race matters most and all these progressives --

MATTHEWS: Of men, not women?

BELCHER: For men, not women. That`s the whole point.

MATTHEWS: What did that tell you as an expert? Is it prejudice?

BELCHER: That tells you that your bias that you have against black men is different. It`s fundamentally different and it`s a burden that I have to - -

MATTHEWS: Let`s come back and talk about that in the show.

BRABENDER: In 2010, the Democrats wanted to create havoc in the Republican primary in Senate Louisiana. So, they put an ad in Craigslist asking for an adult film star to get into the Republican primary. One person responded and got into the Republican race, Stormy Daniels.

MATTHEWS: Jesus. Anyway, thank you, Eliza Collins, Cornell Belcher. He`s a comedian as well. John Brabender.

Let me return. When I do, I`m going to finish with a very bad memory of 15 years ago this day. You`re watching HARDBALL.

(COMMERICAL BREAK)

MATTHEWS: Let me finish tonight with a very bad memory.

Today marks the 15th anniversary of the beginning of the American war on Iraq. I meant that the way I said it. It used to be that we Americans made war on the aggressors, countries who invaded other countries. They were the bad guys. We were among the countries who fought against aggressor nations.

But in March 2003, we attacked Iraq, took the country over by force, killing or taking prisoner any Iraqi national who got in our way. We took over control of that country, occupied it and sought to control its future.

I try to keep count of those who backed that invasion of Iraq starting with President George W. Bush and Vice President Dick Cheney, who lied about it having nuclear weapons, lied to our country for the specific purpose of selling us on that invasion.

What scares me still about that aggression by us is that it was championed by a president of so little ability, certainly not an historic figure by any account. And what disappoints me more but doesn`t surprise me is the lemming-like way in which so many Democrats fell into line, particularly and practically all of the big names, certainly all of the presidential candidates serving in the Congress.

Why did they do it? Was it the money they got from hawkish contributors? Was it fear of being called weak on the Middle East? Was it the high schoolers fear of daring to be out of step with what was happening? Or was it the gung-ho cheerleading for established names in the media for -- catch this -- Operation Iraqi Freedom.

Whatever the combination, I hope never to forget that Senator Ted Kennedy for one called his vote against that stupid war the most important of his entire career.

Why stupid? A, morally, because it broke with our country`s prideful self- image of being opposed to aggression, and for what in this case. B, strategically, because knocking off Saddam Hussein removed the one great Islamic counter to ayatollah-led Iran. And now, the only thing separating Iran from Israel and from us is nothing.

For this I blame the stupidity of the Bush people, the ideology of the neocons and not the least the cowardice of those who went along with the war for the simple reason they were afraid not to, afraid not to stand up for what America at our best has been proud all these years to stand up for.

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

"ALL IN WITH CHRIS HAYES" starts right now.

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