Manafort's former business partner testifies. TRANSCRIPT: 8/6/2018, Hardball w Chris Matthews

Guests: Daniel Alonzo, Betsy Woodruff, Basil Smikle, Caitlin Huey-Burns, Basil Smikle

Show: HARDBALL Date: August 6, 2018 Guest: Daniel Alonzo, Betsy Woodruff, Basil Smikle, Caitlin Huey-Burns, Basil Smikle

ROB REINER, DIRECTOR AND ACTOR: But he will also have a lot of information about Manafort`s connection to Russia and his connection to Trump.

ARI MELBER, MSNBC HOST: Right. Rob Reiner, you can handle it. You can handle the truth. Thank you for being here.

REINER: Thank you for having me.

MELBER: That is our show, THE BEAT. "HARDBALL" starts now.

STEVE KORNACKI, MSNBC HOST: Trump feels the heat. Let`s play HARDBALL.

Good evening. I`m Steve Kornacki in New York in for Chris Matthews.

And we are following a couple of big stories tonight. In a federal courthouse in Alexandria, the prosecution`s star witness took the stand today in the trial of Paul Manafort. Rick Gates was Manafort`s protege. And today, he told jurors that he committed crimes with Manafort. We are going to have the latest on that dramatic development very shortly.

We begin, though, with Donald Trump`s story on his son`s 2016 meeting with Russians at Trump tower. On Sunday, the President again acknowledged the meeting was set up to get dirt on Hillary Clinton.

The President tweeting, this was a meeting to get information on an opponent. Totally legal and done all the time in politics. And it went nowhere. I did not know about it.

In addition to Donald Trump Jr., Paul Manafort, and Jared Kushner were also present at the meeting, which was with a well-connected Russian attorney, Natalia Veselnitskaya and four other people with Russian ties.

The President`s son was promised quote official documents and information that would incriminate Hillary."

In agreeing to the meeting, Donald Jr. said if it`s what you say, I love it. That response suggested at least a willingness to collude on Trump Jr.`s part. This even as the Trump team has continued to insist that there was no actual collusion.

When that Trump tower meeting was revealed last summer, Trump world claimed it was about adoption.

(BEGIN VIDEO CLIP)

SEAN SPICER, FORMER WHITE HOUSE PRESS SECRETARY: There was nothing, as far as we know, that would lead anyone to believe that there was anything except for discussion about adoption and the Magnitsky act.

(END VIDEO CLIP)

KORNACKI: But then there`s the President`s son, he forced to confirm that the meeting was set up under the pretense of providing information to the campaign on Hillary Clinton. Trump Jr. saying last year, Veselnitskaya quote "stated she had information on Hillary Clinton." Also, he insists no details or supporting information was provided or even offered.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS HOST: When you read the parts about the Russian government or Russia supporting your father, did that put off any sirens in your head?

DONALD TRUMP JR., PRESIDENT TRUMP`S SON: Honestly, I don`t know. I mean, I think this was just basic information that was going to be possibly there.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: My son is a wonderful young man. He took a meeting with a Russian lawyer. Not a government lawyer, but a Russian lawyer. I think from a practical standpoint, most people would have taken that meeting. It`s called opposition research or even research into your opponent.

(END VIDEO CLIP)

KORNACKI: The President`s decision to tweet this weekend reignites the controversy over that meeting and all of the questions around it which could be central to Robert Mueller`s investigation.

While the President insists the meeting with Russian interests to obtain information on his opponent would be quote "totally legal," "The Associated Press" notes that federal campaign finance law makes it illegal for a political campaign to accept a thing of value from foreign nationals. And it`s possible the AP says that opposition research, though not in and of itself illegal, could be considered in that category for these purposes.

For more, I`m joined by Robert Costa, "Washington Post" national political reporter. Susan Page, Washington bureau chief for "USA today." Michael Steele, former chairman of the RNC, and Daniel Alonzo, former federal prosecutor.

Robert Costa, let me start with you. And just what do we know, we say it`s the President reigniting this controversy with a tweet over the weekend. What do we know about the context of the tweet? Why did he decide to send it, what was his state of mind? What was the stimulus for that? What do you know about it?

ROBERT COSTA, NATIONAL POLITICAL REPORTER, THE WASHINGTON POST: The President didn`t make this tweet in a vacuum. He`s facing numerous political and legal challenges on the horizon this week, will his legal team agree to a sit-down with Robert Mueller and his investigators or not? Will Mueller issue a subpoena?

He knows the Manafort trial is ongoing. He has been increasingly frustrated about the news coverage of that whole experience based on our reporting over the weekend. And so you have a President also seeing the legal spotlight because of what Michael Cohen`s legal team is talking about privately. His son is being brought back into the headlines. It`s getting personal for President Trump.

KORNACKI: And what do you know, Robert? Do you know anything in terms of what folks around the President, specifically, I guess, his attorney, Rudy Giuliani. What do they think of tweeting? Something this explosive, is that something they are signing off on? Is that something they are warning him not to do? Is that something they are saying afterwards, please don`t do this in the future?

COSTA: I was actually just talking to mayor Giuliani five minutes ago. And he reiterates every time you have a conversation with him as a source, someone who is the President`s chief lawyer, he can`t control the President`s tweets. That we works with the President, thinks through the strategy, but he really is actually, he says, relying on President Trump to be mounting a public war against Mueller, to be the public messenger, because the White House as an operation is not really taking any kind of lead here. It`s the President, Giuliani, together with Jay Sekulow, the other lawyer in the President`s legal team, thinking through how can they take an ax to Mueller and that entire operation?

KORNACKI: So Susan Page, if that`s the strategy, if that`s the thinking here that rely on Trump, use that platform, use twitter as Robert says to try to take an ax to Robert Mueller, are they achieving that at all?

SUSAN PAGE, WASHINGTON BUREAU CHIEF, USA TODAY: Well, you know, this is not a legal strategy. This is a political strategy. And it seems to me it`s designed not to help the President when it comes to his legal troubles with Robert Mueller. In fact, it`s likely to make them worse. It`s designed to set a different kind of landscape for anything that Mr. Mueller finds out to be received, to convince at least his own supporters that nothing -- it wasn`t illegal or that everybody does that, and by the way, I didn`t know anything about it. These are -- this is an attempt to set a context where people won`t take seriously or at least won`t be convinced that if there are serious -- if there`s a serious report from Robert Mueller, which is what we expect, that they should take it with a grain of salt.

And we know from polling that President Trump`s core supporters are persuaded by this, that they are inclined to believe that this is a witch hunt. And that he is being treated unfairly whatever the findings of the special counsel turn out to be.

KORNACKI: And Dan, you look at this through the lens of yourself being a former prosecutor. How does a prosecutor, how might somebody in Mueller`s shoes look at Donald Trump`s tweet this weekend? How would they read that?

DAN ALONZO, FORMER FEDERAL PROSECUTOR: Well, it depends. I mean, for one thing, it could be seen as what they call a false exculpatory statement or could be seen as, you know, suddenly communicating a message to witnesses out there, saying, you know, this is just opposition research. And that happens with some regularity. It`s not that uncommon. You kind of ignore the rest of the equation, which is OK, fine, it`s great to get opposition research when you are a candidate, but what about the part where these are foreign nationals and federal election law says you are not supposed to get something of value from a foreign national?

Good question. Is this something of value, right? Is dirt something of value?

KORNACKI: Yes. And I think that`s the other question, then, too. Is there, from a legal standpoint here, if Mueller is taking a look at this, established now, it seems in the public record, was an intent or an openness to collude. The emails telling Trump Jr., hey, look, we got something on Clinton, and Trump Jr. saying great, let`s have a meeting. So there was an openness to it. How much of a legal standpoint hinges on whether something was actually exchanged in the meeting?

ALONZO: Well, it`s the whole thing. I mean, you could imagine the defense maybe succeeding. That Trump Jr. wanted dirt on Hillary desperately, but didn`t think for a minute that there was a problem with dealing with a foreign national. So the whole point is, is the foreign national given something of value? That might be the opposition research, it might be as creative as the opposition research cost a lot of money and so it does have a monetary value. A lot of times these cases hinge on monetary value, not on this kind of more intangible value that we have here.

KORNACKI: And when the news broke about the President`s son holding that meeting with someone promising him damaging information about Hillary Clinton, a number of the President`s aides and allies came to his defense. That first, they denied the President was at all involved.

(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: He certainly didn`t dictate, but he, you know, like I said, he weighed in, offered suggestion, like any father would do.

UNIDENTIFIED MALE: The President didn`t sign off on anything.

(END VIDEO CLIP)

KORNACKI: Eventually, those aides now has begun to walk that back. Yesterday, Jay Sekulow, the President`s personal lawyer, was asked about his earlier comments. This is what he told ABC.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Why did you deny President Trump`s involvement? When did you learn that the denial wasn`t true?

JAY SEKULOW, TRUMP`S ATTORNEY: Well, let me tell you two things on that one. Number one, as you know, George, I was in the case at that point, what, a couple weeks. And there was a lot of information that was gathering. It was Rudy Giuliani said. I had bad information at that point. I made a mistake in my statement.

(END VIDEO CLIP)

KORNACKI: And Michael Steele, again, this is about the initial explanation that was offered by Trump world, and Donald Trump apparently dictating that statement, saying hey, that meeting, it was about adoptions. Nothing to see here.

I guess it points to a bigger question. And I`m curious as a Republican looking ahead to these elections. You have what Robert costa laid out there in terms of why the folks around Trump, why somebody like Rudy Giuliani wants him publicly being out there in the middle of it, mixing it up like this.

MICHAEL STEELE, FORMER REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: Right.

KORNACKI: From a Republican candidate`s perspective this year, somebody running for office in Trump`s party, in a competitive election. How do they want him handling it? Do they see benefit to him being out there trying to sort of poison the jury or do they want him saying absolutely nothing?

STEELE: Well, it depends on how you define competitive. If you are talking about competitive in a plus 20, plus 30 congressional district, yes, you will run with Trump all day long because that`s largely where the base in the district is. And it doesn`t matter the Democratic opposition that may come. You still have -- you have the cushion, if you will, to withstand whatever they do or however they try to nationalize the election. In fact, you will likely nationalize the election yourself.

You know, if you`re talking about something where it`s a little closer, it`s a different conversation. If you are in a plus-three, plus-five congressional district, you are going to walk a little differently. You are not necessarily going to nationalize it. You are going to keep it local and you don`t want to necessarily bring the President`s problems into your district because, like we see in a number of states, including Ohio, that level of closeness in what should be arguably a Republican leaning district becomes problematic.

KORNACKI: You mentioned Ohio, special election out there for Congress tomorrow. Much more on that later on.

STEELE: That`s right.

KORNACKI: Donald Trump Jr. called in meanwhile to Laura Ingraham`s radio show earlier today. Once again said the primary issue of the meeting was adoption. Let`s listen.

(BEGIN VIDEO CLIP)

LAURA INGRAHAM, FOX NEWS HOST: Donny, did the issue of adoption, it`s near and dear to my heart because I have two Russian adopted sons.

DONALD TRUMP JR., PRESIDENT TRUMP`S SON: We spoke about it.

INGRAHAM: Did that come up?

TRUMP JR.: When?

INGRAHAM: In the meeting with Veselnitskaya?

TRUMP JR.: Well, like I said, that was the primary thing that we had spoken about in the meeting. That was -- that`s not the premise that got them in the room. And then they started -- it was essentially, you know, a bait and switch to talk about that. And everyone has basically said that in testimony already, I mean. So this is nothing new. But you know, like I said, I don`t understand that it`s an important issue to you and near and dear to people`s hearts, but this wasn`t a campaign issue to us, this wasn`t relevant to us. And it was something we weren`t going to do anything with.

(END VIDEO CLIP)

KORNACKI: And Robert Costa, Donald Trump Jr., the President`s son, being so central to this, being sort of the focus and the speculation shifting so much to him in the last couple days, is there an aspect of this, of the President feeling protective of his son?

COSTA: The President has been protective of his son throughout this entire process. And he is not just his son. In the same way that Ivanka Trump is inside of the White House, as a senior adviser to the President, you have Donald Trump Jr. now as a key surrogate for President Trump ahead of these midterm elections, traveling around to different red states, trying to rally the President`s base. He is someone who is inside, if not the White House, he is inside of the President`s circle politically. He`s an important force.

And you see him going to Laura Ingraham, someone who has been very supportive of President Trump and trying to explain his position. But at this point, what really matters is not what he says to a conservative commentator, what matters is what does Robert Mueller want to do in terms of prosecuting or not prosecuting. That`s his choice, with regard to this meeting in 2016.

KORNACKI: All right, that`s where it seems to lay with so many of the questions on this topic. We can talk about what we think, what the political world thinks, but ultimately, it matters what Robert Mueller thinks certainly seems.

Thank you Robert Costa, Susan Page, Michael Steele, Daniel Alonzo.

And coming up, week two in the Manafort trial begins as a key witness takes the stand. What we will learn from the testimony of former Manafort aide Rick Gates?

Plus, we are going to look to go to the big board and take a look at what`s at stake in that big special election. We teed it up a second ago, out in Ohio. Can Democrats pull a rabbit out of the hat? Pull off a win out there in John Kasich`s old district? What is that going to mean tomorrow and for November?

Also, the uninvited guest. Donald Trump dropped by a Troy Bolderson rally out in Ohio and leaves behind his endorsement. The problem is the GOP contender apparently may not have asked for one. HARDBALL roundtable is going to tackle that.

And the President`s bizarre attacks against Lebron James over the weekend. What does he have against the king, who happens to be pouring money into a new school for underprivileged kids in Akron (ph)? And finally, the panel will tell me something I don`t know.

This is HARDBALL where the action is.

(COMMERCIAL BREAK)

KORNACKI: At midnight tonight, the Trump administration will re-impose trade sanctions on Iran that were suspended under the 2015 nuclear deal. The move will further distance the U.S. from European allies who also signed that deal and put the deal itself in jeopardy.

In a statement on Iranian television today, Iran`s President Rouhani called for national unity in the face of impending economic hardship and warned the U.S. will regret these sanctions.

We will be right back.

(COMMERCIAL BREAK)

KORNACKI: Welcome back to HARDBALL.

All eyes are back on a Virginia courthouse where we have entered week two in the trial of President Trump`s former campaign chairman, Paul Manafort.

Today, Rick Gates, the prosecution`s star witness, took the stand and testified under oath that he and Manafort were involved in criminal activity together. Gates, who has been described as Manafort`s right-hand man, also admitted to embezzling hundreds of millions of dollars from his longtime business partner. Gates was originally charged as a co- conspirator in Manafort`s case but has been cooperating with Robert Mueller`s investigation after pleading guilty to conspiracy and lying to the FBI.

While the case will only be looking at Manafort`s business dealings, Gates also worked with him on Donald Trump`s Presidential campaign. And Gates stayed on the campaign even after Manafort left and played a significant role in the Presidential transition.

Today`s court appearance was the first time Gates and Manafort have been the same room together since Gates made his plea deal.

For more in all this, I`m joined by Betsy Woodruff, politics reporter for "The Daily Beast," and Ken Dilanian, NBC News national security reporter who was at the Alexandria courthouse today.

Ken, let me start with you and just in terms of the basics, the meat and potatoes here, what exactly is it that Gates was admitting to today?

KEN DILANIAN, NBC NEWS INTELLIGENCE AND NATIONAL SECURITY REPORTER: To everything, Steve. It was really rather remarkable. I mean, we knew most of this was going to happen, but still, to see him walk into that courtroom, Paul Manafort`s protege of ten years. Worked for him from 2006 to 2016 and sit down at the witness stand, just feet away from Paul Manafort, was something incredible. And Manafort was staring him down, and Gates tended not to look at Manafort`s direction.

Nonetheless, he was a pretty calm and compelling witness. He was a little nervous, but he testified that he had been charged with Paul Manafort in these bank and tax fraud indictments, and he admitted he was guilty of all those charges. And that he had cut a deal with the prosecution to plead guilty to a lesser charge, a charge involving lying to the FBI, in exchange for a reduced sentence if he cooperated. He laid all that out.

And then, he also explained that in the course of this plea agreement, he had to admit everything else bad he did. And that included something that the government didn`t even know about, which is that he was embezzling money, stealing money from Paul Manafort while they were on this alleged crime spree, you know, defrauding banks and committing tax evasion. Gates was putting his hand into the cookie jar in the form of bogus expense reports, essentially, and he said it was worth about a couple hundred thousand dollars. He was essentially taking advantage of his ability to wire money from Manafort`s accounts and wiring money from overseas based on false expense accounts.

So, there was that. He also admitted some other lesser things, including even being 15 minutes late for a curfew. The point of all that, Steve, is the prosecution wants no surprises when Gates is cross-examined.

They want to confront the jury with everything that`s bad about Gates and say, despite that, you should believe him, because, essentially, if he lives on the stand now, this agreement is void and he`s going to go to prison for a long time because he`s already pleaded guilty.

It was some pretty dramatic stuff. And it continues tomorrow, Steve.

KORNACKI: Yes.

And, Betsy, I guess that`s the other thing, that Ken says to be continued tomorrow. That`s probably the suspense now. How will Gates, after admitting all this, how will he hand -- how will we hold up under a cross- examination?

There`s probably a lot there that the Manafort side could hit him with?

BETSY WOODRUFF, THE DAILY BEAST: That`s right. It`s going to be bruising. And, additionally, it`s going to be personal.

There was significant friction several months back when Rick Gates was going through the process of deciding whether or not he was going to flip on Paul Manafort, whether he was going to essentially turn on a man who had been his business partner and boss for upwards of a decade.

And at the time, that caused significant consternation on Manafort` steam. There were reports that Manafort`s team up until the last moment thought Gates was going to reject a plea deal. They thought he was going to tough it out, stand by Manafort, be sort of a loyal foot soldier, be the loyal -- the loyal colleague they had always perceived, though incorrectly, had always perceived him to be.

But then, at the last minute, sort of when push came to shove, Gates decided, no, he was going to cross the line, work with Mueller and his team, and sort of abandon, if you will, his former colleague. So this isn`t just a question of legal machinations. This is also very much a personal issue for Gates, Manafort, Manafort`s legal team, Gates` legal team.

And you can expect to see that come through as Gates faces cross- examination from Manafort`s attorneys.

KORNACKI: Yes.

Ken, I mean, just in terms of the human drama of this, I think of how many mafia movies have we seen where somebody flips, they`re in the courtroom, and there`s that moment when they basically -- they`re staring, what, 20 feet away from the person they`re flipping...

DILANIAN: Yes.

KORNACKI: What was that like? You say Manafort was staring him down. Just set the scene.

We didn`t have cameras in there. What was it like to watch those two together?

DILANIAN: It was pretty dramatic.

I mean, admittedly, it`s hard for us in the courtroom to see Manafort, because we`re looking at the back of his head. But he seemed to be clearly staring Gates down. And Gates did not want to look at him.

And I was told by one of our producers that, during the break, that Gates refused to look at Manafort, even though Manafort was starting at Gates.

But let me make one other point, Steve, which is that even if Gates collapses on cross-examination, and the jury doesn`t believe a word that he says, the prosecution still has a very strong case against Paul Manafort, because this is a case about foreign bank accounts. And we had testimony from Manafort`s bookkeepers and accountants that they had no idea that he had control of all these foreign bank accounts.

They prepared his tax returns and said that there were no foreign bank accounts. That`s a felony. And there`s been reams of evidence that he was paying for all these luxury goods with money wired from Cyprus, from foreign bank accounts. And that had nothing to do with Gates.

And the only defense so far that we have seen to that is that Manafort didn`t realize it was a crime, he didn`t realize he filled out the form incorrectly. So it`s a strong case with or without Gates.

KORNACKI: Yes.

And, Betsy, we talk about, this is not -- this case we`re talking about right here, it`s the -- it`s the finances. It`s not the -- it`s not to do with the campaign. But is there a connection there between what`s being revealed, what might be revealed, the fate that might meet Paul Manafort in this trial and the questions about his role in the campaign?

WOODRUFF: Perhaps the biggest revelation that we -- that we have received from this trial from Mueller`s team is that what was initially believed to be a $10 million loan that Putin ally and Russian aluminum oligarch Oleg Deripaska made to Manafort wasn`t actually a loan.

It was actually, according to prosecutors, a payment of $10 million. Now, the fact that there Deripaska made that significant payment to Manafort raises questions about the type of work Manafort was doing for Deripaska, any loyalties that might have been there, as well as additional friction that existed between the man who would go on to be Trump`s campaign chairman and a man who was very much in Putin`s inner circle.

Deripaska subsequently has sued Manafort and Gates, has said that he thought they mishandled or stole even some of the money that he paid them. So there`s a lot of friction between those two men.

And during the presidential campaign, reportedly, Manafort reach out to Deripaska world and suggested that potentially he would be willing to give Deripaska personal private updates on how the campaign was going.

So any subsequent revelations that we get in this trial about Manafort`s relationship with Deripaska, the types of loans and/or payments Deripaska was making to Manafort, when he was making those payments, those revelations could potentially have implications for the way we view the work that Manafort did when he was working on Trump`s campaign.

KORNACKI: All right, Betsy Woodruff, Ken Dilanian, thanks to both you for being with us.

DILANIAN: You bet, Steve.

KORNACKI: And up next, I`m taking a trip across the studio over to the Big Board.

We got a big special election tomorrow out in Ohio, right around Columbus. Suddenly, it is a nail-biter. This is a longtime Republican seat. Democrats have an actual chance to flip this thing tomorrow. What could it tell us about Democrats` chances in the midterms coming up in November? We`re going to break it all down over at the Big Board. You don`t want to miss it.

This is HARDBALL, where the action is.

(COMMERCIAL BREAK)

KORNACKI: All right, welcome back to HARDBALL, folks.

Well, guess what? It is 7:29 on the East Coast. And that means that, in exactly 24 hours and one minute, polls are going to close in the last major special election test before the big midterms in November.

And this race has suddenly become a barn-burner. It`s in the 12th District of Ohio, dead middle of the state, right around the Columbus area, Danny O`Connor, the Democrat, Troy Balderson, the Republican.

We got polls showing this thing dead even now. The backdrop, this is a Republican district, the 12th District of Ohio. John Kasich, he used to represent it in Congress. In 2016, it went for Trump by 11 points. In 2012, it went for Romney by 11 points.

But if you have been following these special elections, you know Democrats have been able to make gains so far right around 10, 11 points, on average, in these House special elections.

So, what are we going to look forward tomorrow night? If it`s a dead-even race, believe me, I`m going to be at this board all night watching the returns come in.

I want to give you a little bit of a preview of what we`re going to be seeing tomorrow. Let`s take a closer look at the district, because this district is fascinating. It is really a story of the two different Americas we talk about so much in terms of how 2016 happened.

One group we talk about, we talk about college-educated, upscale, white- collar professionals, suburban knights. Well, that`s a big part of this district, at least in terms of population. It`s right here. You see, this is a sort of part of Columbus right here, upscale suburbs right outside Columbus, bleeding over into Delaware County.

Really, more than half the vote in the district is going to come out of right here. You see Franklin County. That`s Columbus. Hillary Clinton won this by 18 points. That was a big surge in the Democrats` direction. A third of the votes coming out of Franklin, that`s a Democratic base.

So, tomorrow night, the question is going to be, is O`Connor able to match or even exceed Hillary Clinton`s number there? And what`s the turnout like there? Delaware County, here, again, you`re talking suburbs.

Trump won it by 16, but for a Republican, that`s bad. These are Republicans who, some of them at least, were not comfortable with Trump. So, again, if that Republican number there is close to 55 tomorrow, that`s very good news for the Democrats.

But the rest of this district right up here sort of the northern part, right down here, Licking, Muskingum County, Zanesville, Mansfield up here, this is the other America we talk about so much, blue-collar, white, non- college white. Huge, and I mean huge, swings in 2016 to Donald Trump, while this part of the district was swinging away from Trump down here.

How about this? The portion of Muskingum County -- this is Zanesville right here -- the portion of this county, it`s in the district Barack Obama won in 2012, and in 2016, Donald Trump carried it by almost 30 points. Those are the kinds of swings we`re talking about.

So, again, that`s the other question here. For Democrats, they want to run up the score right around Columbus. They want to be right around where Clinton was in Delaware County. They want huge turnout here.

And then that`s the other question. Can they improve? Can they get back somewhere close to where Barack Obama did in the other part of that district? Can they erase that Trump surge in those non-college white, the blue-collar white part of the district?

It`s going to be a fascinating story, two very different parts of the district that went like this in 2016. Again, this is it. This is the last major special election test before the midterm. You know Democrats would dearly love to win this one. Republicans hoping they don`t have another PA 18 on their hands -- 7:30 tomorrow night, Eastern time, the polls close.

You better believe we will be right here as those results start to roll in.

Up next: Republican candidates were happy to embrace the president during the primary season. Will the same hold true heading into the midterms? We`re going to get to that with the Roundtable straight ahead.

You`re watching HARDBALL.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. JOHN KASICH (R), OHIO: I said, "Troy, why -- did you invite Trump in here, the president?

He said, "No, I didn`t."

So I think Donald Trump decides where he wants to go. And I think they think they`re firing up the base. But I have to tell you, at the same time he comes in here, I was with some women last night who said hey, you know what, I`m not voting. They`re Republicans. I`m not voting for the Republicans.

See, this is the problem the party has now.

(END VIDEO CLIP)

KORNACKI: Welcome back to HARDBALL.

That was Ohio Governor John Kasich suggesting that Republican candidate Troy Balderson didn`t invite President Trump to that rally that was held over the weekend ahead of the special election tomorrow, this in that House District, Ohio 12, that Kasich himself represented for a long time.

If that bothered Balderson, he certainly didn`t show it publicly.

(BEGIN VIDEO CLIP)

TROY BALDERSON (R), OHIO CONGRESSIONAL CANDIDATE: I was very honored and humbled to have the president of the United States here for me yesterday -- or Saturday. And to stand on stage was incredible.

(END VIDEO CLIP)

KORNACKI: Meanwhile, Trump weighed in on another one of tomorrow`s races. He tweeted his endorsement of Kansas Secretary of State Kris Kobach in the Republican primary for governor there, Kobach the former vice chair of Trump`s defunct Voter Fraud Commission and an immigration hard-liner.

"The New York Times" reports that Trump bucked advice in making the endorsement, noting: "The Republican Governors Association and a high number -- and a number of high-level party operatives counseled Mr. Trump against siding with Mr. Kobach because polls show he is unpopular with the general electorate in Kansas and would provide Democrats with an opening to take back the governorship."

I`m joined now by the HARDBALL Roundtable for tonight, Susan Del Percio, a Republican strategist, Basil Smikle, a Democratic strategist, and Caitlin Huey-Burns, political reporter with RealClearPolitics.

Susan Del Percio, let me start with you.

We just laid out the dynamics, the political dynamics in this -- in this district. And I`m looking at Kasich basically saying the president maybe is doing more harm than good for Republicans. Half this district seemed to love Donald Trump in 2016, really gravitated towards him, and the other half seemed to run away from him.

From the Republican candidate`s standpoint, was it good or bad to have Trump come in there at the wire of a close race?

SUSAN DEL PERCIO, REPUBLICAN STRATEGIST: It was very bad. It was horrible.

It is as bad as it gets in a swing district to have Donald Trump show up the day before. The only thing that -- or two days before an election. Maybe, if it was a week out, it could have been potentially worse for him, because it takes a while to kind of reach out and get voters on the other side.

But this was -- this is a swing district right now. Well, it wasn`t. But it`s in play now. It`s tied. It`s 43-44, depending on the polls you look at. Turnout is essential.

We know that Donald Trump is extremely unpopular with suburban women. And that`s the area that you showed on your map. We know that they are going to turn out in droves against Donald Trump. The other thing that you have in that district, like a lot of places, are what we call Trump triers, that, in 2016, they weren`t happy necessarily with Hillary Clinton. They said, let`s give it a shot and go with Donald Trump. What do we have to lose?

They tried him, and they decided they don`t like him.

KORNACKI: Well, Basil, in terms of the numbers for House control, if the Democrats pull this off tomorrow in Ohio, their magic number this November goes from 23 to 22. Then they got to pick off 22 Republicans. It would certainly get more doable by a factor of one.

What does it mean psychologically for Democrats if they pull this off?

BASIL SMIKLE, FORMER NEW YORK STATE DEMOCRATIC PARTY EXECUTIVE DIRECTOR: It is a huge psychological win.

I predicted the Pennsylvania race with Conor Lamb. And I certainly will predict this one in a Democratic victory here. It`s a huge momentum change for us. Number one, it`s Ohio, which is incredibly important.

But it also shows, to Susan`s point, the erosion of the kind of support that Donald Trump had in 2016, how that`s eroded going into 2018.

And there was -- there was an article in "The New York Times," I think yesterday or today, but it`s something that I have been talking about a lot. It gives us an opportunity also to not just double down on our base.

We can actually reach across a little bit more, both, yes, to independents, but certainly to Republicans who are dissatisfied with this president, to lay out a strategy going into 2020.

So, if we can pull this off -- and I think we will -- it actually bodes well for a national strategy going into the...

(CROSSTALK)

DEL PERCIO: Also, you get to appeal to more voters that typically don`t come out to vote. That`s even more...

(CROSSTALK)

SMIKLE: That`s right.

KORNACKI: The other question, Caitlin, too, is the stakes for Trump himself, not just the Republican Party, but Trump himself.

He goes out to this special election in Ohio at the last minute, maybe without an invitation. He`s injected himself into it. At the last minute out in Kansas tomorrow, he suddenly injected himself into the governor`s race. I noted by the way, about an hour after Trump made that announcement, Bob Dole, former Senate Republican leader from Kansas, came out and endorsed the other candidate in the Republican primary so that he could win in November.

What`s on the line for Trump tomorrow?

CAITLIN HUEY-BURNS, REAL CLER POLITICS POLITICAL REPORTER: Well, what`s interesting is that Trump has been doing pretty well in terms of winning the candidates he`s endorsed in these primaries winning their primaries. These two are pretty different. I mean, he is putting some of his own skin in the game here. But I talked to strategists who say that maybe he`s also thinking about his own 2020 electoral prospects, going to places like Ohio and Florida, places that he won, obviously, and wants to win again.

What`s really interesting about the Kansas race, and I was talking to a Republican operative today who was saying that the White House knew, Trump knew that Republicans did not want Kobach to win this primary. They don`t think that he is very electable in November. And the key thing about these governors` races are not just winning them but also having someone at the top of the ticket there to help in these congressional races as well. And that also puts more into play for this president in the longer term.

DEL PERCIO: But to that point, it just shows how much Donald Trump always makes it about himself. He goes into Ohio probably because he thinks it`s good for him. In the Kansas primary, going against an incumbent is crazy for Republicans. This is someone who could win.

And this is why he did it. It`s 32-32 in the polling. You have 11 percent undecided, which we`re breaking for Colyer. What happens now? Donald Trump gets involved. It probably could lead to a win for the insurgent candidate, which is exactly what Donald Trump wants to show, look, I decide the winners.

KORNACKI: Right, he wants to say I weighed in.

HUEY-BURNS: And this is why all of these campaigns are going to have to strategize and figure out where Trump is a benefit and a liability to them. You know, if you`re in a state like North Dakota or Indiana, of course, and you`re running for the senate, of course, you want Trump to come in and you want him to talk about himself because you want his voters to turn out.

But I was talking to a former campaign operative as well who was saying that this is the delicate balance. You want Trump supporters to turn out, but do they turn out for people other than Trump?

KORNACKI: And it`s so fascinating to me, too, like when we look at this Ohio district, that it is just -- it`s that split between the two different kinds of voters. It`s the voters that gravitated so strongly towards him and the ones who went -- I wonder that other half of the district we talk about, Basil, there`s been this whole debate in the Democratic Party about what`s the way forward for Democrats? Is it -- do you try to keep motivating the core Democratic base or is there a strategy to sort of win back Trump voters.

This seems to be a perfect example of it. You`ve got a county there that Obama won and Trump carried it by 30 points. If the Democrat is going to win tomorrow, has to come close to winning that county.

BASIL SMIKLE, FORMER DNC DIRECTOR, NY STATE DEMOCRATIC PARTY: That`s what I was saying. It`s a great opportunity for us to test message and test sort of the broad messaging that Alexandria Ocasio-Cortez, I got her name right today, that messages she`s been going from state to state to talk about.

One of the other things that hasn`t been addressed as much is the influence that Donald Trump has in down ballot elections. We`ve got an attorney general race here in New York, one in Minnesota with Keith Ellison. And so, you`ve got all of these other folks running within these states who are running against or at least for trying to find a way to defend the state against Donald Trump policies.

So, he`s having an effect across the board and down ballot. So what it does is not just brings out new voters, will it tamp down Republican voters who are dissatisfied?

KORNACKI: Yes, I mean, it`s the cliche to say turnout is the key, but turnout might be one of the keys tomorrow.

Meanwhile, "The Washington Post" reported this weekend that Trump is anxious about the Russia investigation`s widening fallout. Quote: The president more than ever is channeling his internal frustration and fear into a ravenous maw of grievance and infective. He`s turning out false statements with greater frequency and attacking his perceived enemies with fear.

That`s a well written paragraph there. What do you make though, Caitlin, of the president this weekend? We were talking about this earlier, the decision to bring back into the public discussion there, that meeting at Trump Tower?

HUEY-BURNS: It`s so interesting to me the way in which the president repeatedly weighs in on the Russia investigation, on the Mueller investigation, when he has a good economy, right? He should be helping people kind of feel good about everything going on. I mean, part of the reason why he does this is because he feels like this investigation is overshadowing his entire presidency.

And he`s also trying to win somewhat of a public relations front here, right? He`s trying to tell his supporters and also others that, look, you know, this is going on too long, and sweeping over everything that we want to do.

DEL PERCIO: There`s also one other thing when it comes to Donald Trump. When he starts tweeting about something that`s had controversy or there`s been a drip, drip, drip, he kind of likes to get ahead of it, so this recent tweet about Don Jr., I think was kind of a little bit of a bread crumb. He knows the story is going to come out, so let`s put it out there.

There`s also another strategy. We have heard this from Trump`s attorneys. They keep saying, well, we`re going to give him his -- our final recommendation over the next week. How is it -- about giving an interview to Mueller. How is it possible they don`t have a recommendation by now?

And not only that, this tweet with Trump also now opens up the investigation again, putting Hope Hicks on Air Force One.

SMIKLE: Yes.

DEL PERCIO: It makes the investigation grow.

So I think they are looking to deliberately delay this until after the midterms.

KORNACKI: It`s interesting, too, that question every time Donald Trump tweets, is this part of a strategy to try to get out ahead of something or is this what he watched on cable news two minutes ago? There`s always that question.

DEL PERCIO: There`s that.

KORNACKI: The roundtable is staying with us.

Up next, President Trump rips NBA superstar LeBron James, reviving criticism of Trump`s views on race.

You`re watching HARDBALL.

(COMMERCIAL BREAK)

KORNACKI: And we`ll be right back with more of the HARDBALL roundtable. You`re watching HARDBALL.

(COMMERCIAL BREAK)

KORNACKI: Welcome back to HARDBALL.

In an interview on Friday, NBA star LeBron James accused President Trump of using sports to divide the country. Let`s watch.

(BEGIN VIDEO CLIP)

LEBRON JAMES, NBA STAR: What I have noticed over the last few months, that he`s kind he`s kind of used sports to kind of divide us and that`s something that I can`t relate to because I know that sport was the first time I ever was around someone white and I got an opportunity to see them and learn about them.

DON LEMON, CNN ANCHOR: What would you say to the president if he was sitting here?

JAMES: I would never sit across from him.

LEMON: You would never. You don`t want to talk to him?

JAMES: No.

(END VIDEO CLIP)

KORNACKI: A few hours later, the president tweeted: LeBron James was just interviewed by the dumbest man on television, Don Lemon. He made LeBron look smart, which isn`t easy to do. I like Mike. Apparently referring to NBA star Michael Jordan.

"Politico`s" Annie Karni points out that Trump`s tweet came just before the one-year anniversary of last summer`s white nationalists rally in Charlottesville that turned violent, writing: The LeBron tweet served as a reminder that the president has done little to ameliorate that low water mark of Charlottesville as one of the defining images of his presidency.

We are back with our roundtable, Basil, Susan and Caitlin.

And, Basil, I mean -- the context of the president lashing out like that, remember, I saw it come in on Friday and it`s like whoa.

SMIKLE: Right.

KORNACKI: In some ways, this is a familiar thing. He has a history with Don Lemon. He once said nice things about LeBron James, but now, LeBron is going after him. He goes after LeBron.

But when people start seeing that this crosses into something racial, it`s because we just saw it in the tweet there, when he says low IQ, when he says dumb, it does seem to apply more of -- it does seem to apply to people of color more.

SMIKLE: Yes and he`s been consistent in that regard with the NFL players as well. I think at its core, this is about race. He does not like African-Americans that challenge his authority and (INAUDIBLE) over what he perceives as his control over government and of this country. It is as its core racial.

There`s another element as well. Folks that have covered him in New York know that he likes to be part of pop culture. And if you look at all the people that he`s taken shots at, these are -- these are cultural -- pop cultural icons who again challenge his authority. He feels those individuals are acting in a way that`s antithetical with sort of his own whatever political or compass or framework.

So, it`s at its core racial and I also think it`s him feeling that he`s not a part of the group that he wants to be part of.

KORNACKI: Well, that`s the other part of this too. I think it`s a broader story too I think where Donald Trump, the reality star version of him, there were Comedy Central -- he was embraced by pop culture in a lot of ways in a way that now he`s just, you know, public enemy number one to them.

DEL PERCIO: And he was successful in pop culture for a long time, but now he`s president of the United States and even as a candidate, remember he said the Mexican judge when it`s -- I mean, this is -- when he came out with the Muslim ban as a campaign idea.

Donald Trump is racist and what`s also I don`t want to say worse, but in the political realm, what he`s doing is now bringing in race to appeal, to bring forward part of his base to get him behind, not his entire base, but he is using race as a mechanism to appeal to the worst part of the Republican Party and actually use that as a unifier. And that is disgraceful. And that is not what the president of the United States should be doing, to keep talking about them in terms of pop culture and maybe as a candidate.

This is the president of the United States and LeBron James said -- you know, he talked about what divides us. This is -- this president divides us and he`s doing it in the most disruptive and dangerous way over race.

KORNACKI: The other division that was notable on this I thought, Caitlin, was within the White House because he had the first lady putting out a statement where she seemed to say I like LeBron.

HUEY-BURNS: LeBron is such a beloved figure. I mean, I went to school in Ohio. I left a family in Ohio. He is such a beloved figure there, which meant it actually separates him out from some of the other athletes that Trump has gone after who may not be as compelling as LeBron James who in the bigger point of that interview was, of course, to talk about the school that he`s opening and all of these kids` whose lives he`s going to change by virtue of him opening up this school and providing opportunities for him. So, I think the president picked a very -- picked fight that nobody wants to be engaged in. Even supporters of his in the state would, say, you know, would raise alarm about that.

What`s interesting about the NFL part, when Trump goes after that, there`s a lot of that that is strategic. And I`ve talked to Republican campaigns, Senate campaigns, who say that, yes, that`s fine. You know, that plays to a certain portion of the electorate that they want to bring out. And so, I don`t see the president stopping this kind of thing.

And also, he hasn`t faced any real political consequences for these actions a year after Charlottesville. He`s got a tax reform bill, the economy is good. The Republicans, by and large, are very supportive of him still. There hadn`t been real political consequences yet, perhaps after the midterms.

KORNACKI: Well -- and we`ll see tomorrow if -- you know, see how this special election goes. Maybe the Republicans win it, but, you know, if the Democrats were to pull this out, if it`s close, it gets to that situation where you could chuck it up to anything and there are probably be people out in the state, hey, if he didn`t go after LeBron, you don`t lose this thing.

HUEY-BURNS: Right.

KORNACKI: Our roundtable is staying with us.

Up next, these three will tell me something I don`t know. You`re watching HARDBALL.

(COMMERCIAL BREAK)

KORNACKI: And we`re back with the HARDBALL roundtable.

Basil, tell me something I don`t know.

SMIKLE: In juxtaposition that we`ve been talking with respect to Donald Trump and the one year anniversary of Charlottesville, William Frey has a book called "Diversity Explosion" which talks about the growing diversity of this country and that it actually is something that a lot of folks who fear diversity should not be afraid of. It actually portends more racial healing, more engagement and it again, in stark juxtaposition to a lot that we`ve been talking about.

KORNACKI: Susan?

DEL PERCIO: New Jersey, near and dear to you, Steve. Bob Menendez not looking like he`s going to necessarily lose, but looking like he`s going to have to spend a lot more time and that means that the Democrats are going to have -- time and money, excuse me. And Democrats are really concerned that they`re going to have to invest heavily in that race.

The corruption charge stuck. He had a primary opponent who got nearly 40 percent of the vote spending no money with no ID. He has $15 million already against him in negative ads by his challenger and he`s a wealthy Republican who could spend $25 million to $50 million --

KORNACKI: Someone poll that race. Maybe someone inside this building.

Caitlin, very quickly.

HUEY-BURNS: August primaries are going to put a handful of Republican women potentially running for the Senate in positions to make history in their states, but candidates I`ve been talking to say that they are not playing up the gender card. They have disadvantages in this election.

KORNACKI: All right. That`s it for HARDBALL tonight. Thanks for being with us.

"ALL IN WITH CHRIS HAYES" starts right now.

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