Trump-backed candidates locked in tight races. TRANSCRIPT: 8/8/2018, Hardball w Chris Matthews.

Guests: Nicholas Confessore, Shelby Holliday, Michelle Goldberg, Philip Rucker, Astead Herndon, Shelby Holliday

Show: HARDBALL Date: August 8, 2018 Guest: Nicholas Confessore, Shelby Holliday, Michelle Goldberg, Philip Rucker, Astead Herndon, Shelby Holliday

ARI MELBER, MSNBC HOST: That does it for THE BEAT. I will be back tomorrow 6:00 p.m. eastern. But more importantly, HARDBALL WITH CHRIS MATTHEWS is up next.

STEVE KORNACKI, MSNBC HOST: A New York congressman and Trump ally arrested. Let`s play HARDBALL.

Good evening, I am Steve Kornacki in for Chris Matthews.

We begin with breaking news from Buffalo, New York. That is where Congressman Chris Collins is expected to speak any minute now about his arrest today. Collins, of course, was he first member of Congress who actually endorsed Donald Trump for president back in 2016. He also then served as the congressional liaison to the Trump transition team. He is now facing charges of insider trading and lying to the FBI.

In an indictment that totaled 30 pages, the government alleging that Collins tipped his son off about a failed drug test at a bio tech company. Innate Immunotherapeutics where the congressman served on the board of directors. Family and friends then sold their stock in the company before the news broke saving them more than $768,000 in losses.

This morning, the U.S. attorney for the southern district of New York noted that no one is above the law as he laid out the charges against the congressman.

(BEGIN VIDEO CLIP)

GEOFFREY BERMAN, U.S. ATTORNEY FOR THE SOUTHERN DISTRICT OF NEW YORK: Congressman Collins cheated our market and our justice system. These charges are a reminder that this is a nation of laws and that everybody stands equal before the bar of justice.

(END VIDEO CLIP)

KORNACKI: Now Collins has pleaded not guilty to the charges. In his statement, his lawyers said quote "we are confident he will be completely vindicated and exonerated."

In the meantime, House speaker Paul Ryan called for a prompt and thorough investigation. Said Collins will no longer be serving on the House energy and commerce committee.

According to the indictment, Collins was actually on White House grounds at a congressional picnic when he received word about that failed drug test.

For more in all of this, I am joined Laura Nahmias as New York political reporter for "Politico." Paul Butler, a former federal prosecutor and MSNBC legal analyst. And Jason Johnson, politics editor for theroot.com.

Laura, just the back story here in terms of the basics of what is being alleged, this is sort of an insider trading deal here. It seem to come out of nowhere today. Was there any hint that something like this was coming?

LAURA NAHMIAS, NEW YORK POLITICAL REPORTER, POLITICO: Absolutely. The congressman had actually been under investigation by the office of congressional ethics for a while now. We didn`t know that federal prosecutors were looking at this and they wouldn`t say exactly how the case was referred to them or how they picked it up. But the news about the stock trade and the news about his making recommendations of other members of Congress to buy stock of this company of which he was a member of the board has been public for more than a year.

KORNACKI: What does this case look like to you, Paul, as a prosecutor talking a look at this? What does it look like the government has put together?

PAUL BUTLER, MSNBC LEGAL ANALYST: It looks like a slam dunk. So this is a 30-page indictment that says that this man is on the board and the largest shareholder in this pharmaceutical company. He gets this bad news that its main product, the trials haven`t gone well. Basically, the company is going to go out of business. And so, (INAUDIBLE) at the White House, he calls his son seven times saying sell the stock, sell the stock when he finally gets in touch with the son apparently, because the son does sells the stock. His other friends (INAUDIBLE) sell their stock before the news has public. Again, they saved $700,000. This is a classic what you don`t do if you have insider information. You are not allowed to use it to benefit your voice.

KORNACKI: We are waiting, as we said, we are expecting to hear from the congressman Chris Collins. We are expecting to hear from him out in Buffalo, New York any minute now. You are looking at the podium here. It is all set. This thing has already been delayed a little bit from what was planned. So we are going to see what he has to say. What kind of statement he puts together again. His lawyer out there saying he is going to be vindicated. He enters the plea of not guilty.

I want to ask you this, Paul, though. He has an office. He is a member of Congress. Is this a situation - is that a potential bargaining chip with prosecutors for somebody in his position? Is there a situation here, as this happen, where basically, there is an agreement to give up the seat, to give up the office in exchange for leniency of some sort?

BUTLER: You know, it is bargaining chip if you actually have something that the prosecutor wants. So this guy is up for reelection in November. So that is significant in part because the prosecutors bringing the case now probably because the justice department has this 60-day rule, 100-day rule, you don`t bring charges within that length of the indictment because it might affect the election. So President Trump got to be keeping his eye on this.

I would also be concern about the U.S. attorney, same U.S. attorney who is investigating Michael Cohen. U.S. attorney says today, if you are a high official, and you abuse the public trust, we take that very seriously. Again, not good news for President Trump.

KORNACKI: Yes.

And Jason, he de-named Chris Collins - you know, I think if you are a close political watcher, you are somebody watching this now, you certainly have seen him over the last couple of years, first Republican to endorse Donald Trump, first Republican member of Congress who did that back in 2016. Had that role with the transition. So there is certainly some prominent there. I think a lot more people learning about him tonight for the first time.

But in terms of the midterms, we are just a couple of months away. Democrats are running on this message of, you know, it is time to sort of clean House there in the House. Does this factor in of what Democrats are trying to say in terms of a message this November?

JASON JOHNSON, POLITICS EDITOR, THE ROOT: Definitely, Steve. This is the worst unforced error possible. I mean, I always thought that the only thing that could stop the Democrat success thus far would be a party wide scandal.

Individual members of Congress can get in trouble all the time. It doesn`t necessarily matter. That becomes a local issue. But Collins is not only caught for being sort of a swamp creature in using insider trading to make himself rich, he is connected to Trump and he told several other members. So in the process of this investigation, this may connect to four, five, six, seven other members of Congress that he may have delivered this information to. It could take all of them out. And this is sort of party- wide scandal that is going to have an impact this fall. This is just Mana from heaven for the Democrats right now. And Republicans need to be really concern. And many of them will probably calling their broker right now.

KORNACKI: It is interesting, too, if you think that the last time Democrats picked up the House from Republicans in 2006, one of the issues that powered them that year, there were a series of corruption scandal.

JOHNSON: Right.

KORNACKI: Many of about Republican members of Congress there. Democrats certainly harnessed that year.

As Laura was saying a minute a go, this is not the first time Collins trading practices has been reported on. In January of last year, Jake Sherman from "Politico" wrote overheard in the capital, New York representative Chris Collins talking loudly into a phone just off the House floor bragging about how many millionaires I made in Buffalo in the last month. He was bragging about a stock tip he had shared with people.

I mean, the word that was used here at this press conference, Paul, was brazen. We are hearing about a White House picnic. We are hearing about just off the floor. All of this stuff is going on within an earshot of some pretty powerful influential people.

BUTLER: We are hearing about a high-level politician that people`s representative who apparently believe he is above the law. He is hiding in plain sight. He is flagrantly violating the law and apparently believes he is not going to get caught. Well today, he got (INAUDIBLE).

KORNACKI: Tell us Laura, about his reputation, before all of this his reputation as a politician. Buffalo area, you know, western New York. We say first Trump supporter. The district he is from is one of those districts that really swung toward Trump in 2016. Chris Collins, the politician, what is his reputation there?

NAHMIAS: Well, the district was redrawn and it was made more conservative and he is reasonably well-liked up in own district. But I will tell you, who doesn`t like him as Governor Andrew Cuomo, the Democratic governor or New York. Chris Collins was rumored to be considering a run for governor in the past couple of cycles. The governor and Chris Collins have gotten into fights over Medicare funding. So that is one person who I think is happy to see the news today or at least flatting something in response.

KORNACKI: And Collins` arrest could also, we talk about the political implications here. Another way it could play in to the hands of Democrats heading this November as "Politico" writes, Democrats have tried to find ways to paint House Republicans as the creatures of the Washington swamp. There is that term again, corrupt political figures who are taking advantage of their station in public right. Democrats seem to be getting handed that theme on a silver platter.

Jason, you were just talking about that. The other thing to look at here, though, look. We were just were talking last night about this special election out in Ohio, it is still officially too close to call. Not sure the Democrats are actually going to pick that one up right now. But Democrats try to chip away at the number of 23 seats. If they do, they get the majority.

Here is a district that was on nobody`s radar in terms of being competitive this November. I think Trump won this thing by 24 point in 2016. One of the reasons we are interested in this press conference right now is Collins about to come out and say, hey folks, I am fighting the charges and I`m running for reelection. I`m staying on the ballot and I`m staying in this race.

Because even given how Republican that district is, we have seen politicians get jammed up like this and lose in districts they otherwise would never lose in.

JOHNSON: Definitely. This is that kind of last minute scandal that ends up waking up the opposition. You know, whatever the Democrat is like, what a minute, here is my chance. And if he decides to fight is - here is what the problem is, Steve. This becomes part of the overall noise about this administration. You have got Manafort, you have his assistants, you got all of these people. You got three or four guys running - all running the VA.

All of this sounds like just sort of politicians gone wild in Washington D.C. And this is not the kind of thing that Republicans need to be battling as they are also trying to keep their messages separate from Trump.

This has a potential to be as big as the House banking scandal which pretty much cost the Democrats the House in the early `90s. If this spreads, if you got several people coming forward and saying, well, I kind of got information from him but I didn`t - but I didn`t make that much money. This has the opportunity to drag down several Republicans regardless of what the Democratic candidates are that they are going to be facing this fall.

KORNACKI: Yes, Paul. It is that sort of cryptic specter there of other members of Congress. You look at this indictment today, you look at what you heard from the prosecutors, what is the metastatic potential of this in terms of other members being brought in?

BUTLER: Collins himself, apparently, has no defense. What his lawyers says so far was well, he didn`t actually make any money from this insider information. Yes his son did. Yes, his future son-in-law did, actually, his fiance`s father made money but not him. That is not a legal defense. And so, the prosecutors would be interested in what he knows, what Collins knows about other Congress people if he tipped them off. And if they illegally benefited from this information.

And of course, longshot, but he knows anything about President Trump, he was the first congress person to endorse him, we can expect Trump to pull what we call a Papadopoulos or Manafort, meaning Trump will go Congressman Collins who? He was my coffee boy. I barely know him.

But if that is not true, if Collins has got any goods on the President, again, that a stretch. But if he does, that is bargaining power for Collins. And again, prosecutors do want to make deals where they say OK, you have abused the public trust. You need to quit right now and we will count favorably in terms of what we recommend to the judge.

KORNACKI: Yes. Look, a lot of things we are waiting. We want to see what Donald Trump says when he finally presumably at some point, he will talk about this. And again, we are waiting on the press conference.

Here is what we are going to do. We are still waiting on Chris Collins` arrival to see what he has to say. We are going to squeeze in a quick break as we keep monitoring the situation. We will bring you that as soon as he steps onto the podium.

For now, I want to thank Laura Nahmias, Paul Butler, Jason Johnson.

And coming up, about last night, President Trump taking credit for a race that we say is still too close to call. Republicans may be avoiding embarrassment in Ohio 12 but should they be celebrating right now.

Plus, we are going to go over to the big board. We are going to dig deep into those results from Ohio last night. A rural suburban divide, maybe more of a chasm between rural and suburban parts of that district. What does it mean for the bigger picture across the country in November?

And also President Trump`s legal team rejecting Robert Mueller`s latest terms for an interview. Is it just a stall tactic to avoid a decision? The HARDBALL roundtable is going to weigh in on that.

And a new report that claims Trump gave his Mar-a-Lago buddies sweeping control over the department of the veterans affairs.

Finally, a roundtable will tell me something I don`t know.

This is HARDBALL where the action is.

(COMMERCIAL BREAK)

KORNACKI: Multiple sources have told "The Daily Beast" that former White House aide Omarosa secretly recorded conversations with President Trump on her smartphone and then she has played the audio for people. The former reality TV star is coming with a new tell-all book about her experience with the White House titled "Unhinged." She is not responding to a request for a comment on that story today. But before her book comes out next week, Omarosa will join Chris right here on Hardball. That is Monday the 13th. You are probably not going to want to miss that one. We will be right back.

(COMMERCIAL BREAK)

KORNACKI: Welcome back to HARDBALL.

That special election out to Ohio last night, the last special election before the November midterms and it strongly suggests that blue wave Republicans fear, it may well be building. Now, the reason officially remains too close to call. Republican Troy Balderson, he is clinging to a lead right there you see of 1,564 votes over Danny O`Connor, the Democrat of course, the backdraft at districts here that President Trump won by 11 points in 2016.

There are still balance being counted also, a piece of news, we can tell you about. Just a couple of hours ago, Franklin County, the largest part of this district, officials there say that accounting error will drop Balderson`s lead by 190 votes. When we are talking about something this small, that is potentially significant there. That certainly increases the possibility of a recount in this district.

Now, despite potentially, averting a disaster there in Ohio for his party, President Trump today tried to take a victory lap writing on twitter, as long as I campaign and or support Senate and House candidate within reason, they will win. If I find the time which I must, we will have a giant red wave.

Trump also claimed his eleventh hour appearance over the district was the golden ticket in race writing, when I decided to go to Ohio for Troy Balderson, he was down in early voting, 64-36. That was not good. After my speech on Saturday night, there was a big turn for the better.

Now, not everybody agrees with that assessment. Republican pollster Frank Luntz noting, I`m sure Republicans will celebrate tonight but a one-point victory in that district is nothing to commend. The GOP have to do something really significant in September if they want to keep the House in November.

For more, I`m joined by Michelle Goldberg, columnist for "The New York Times," Noelle Nikpour, Republican strategist and Philip Rucker, White House bureau chief for "the Washington Post."

Thanks to all of you for being with us.

And Noelle, let me just ask you, the Trump factor.

NOELLE NIKPOUR, REPUBLICAN STRATEGIST: Right.

KORNACKI: He claimed in the district and there is a revolt afoot against Donald Trump in the suburbs of that district and I think a lot of the suburbs in this country. There is a lot of affection for him in the rural areas and there are some talk that maybe he helped Republicans there.

NIKPOUR: Right.

KORNACKI: But that`s conundrum (ph) for Republican candidates this fall, isn`t it?

NIKPOUR: Right. You know what? And something you brought up to my point is that the fact that when President Trump came in, who is to say that it didn`t push the opponent`s numbers up because of people that don`t like Donald Trump. So they feel more energized to get out and vote against --.

KORNACKI: The backlash.

NIKPOUR: Right.

KORNACKI: Sure.

NIKPOUR: So it is kind of --.

KORNACKI: So what do you do, if you are a Republican candidate, you are one of these competitive races. The President saying, hey, I want to come to your district this fall, what do you tell him?

NIKPOUR: It is the same catch 22 as when Obama was trying to do campaigning with people running on the Democratic ticket, I don`t want him to campaign for me. The same thing when Bush was getting out of office and we have a lot of surrogates running and people like what you like, you know, George W. Bush camp there like we do not. So I think it depends on where you are.

What is really interesting about Ohio is the fact that it is usually red, red, and the fact that we have not moved the needle with big numbers and that is scary. And although, you know, I know President Trump and Republican Party, everybody is taking a victory lap. I don`t think -- I agree with Frank Luntz on this. You don`t need to take a full out pop the champagne huge celebration on this because we need to look at these numbers.

We need to look at the candidate and see where -- if there was a fail within the candidate specifically, or we need to look at what`s behind this and see, are we in trouble?

And I think that Ronna Romney McDaniel, when she came out and said, this is a victory, this is great, we`re -- celebration, I think that`s great. And I love her. I think she`s great.

But I think that one of the things, this was a great opportunity to use her platform and say, listen, Republicans, we can`t have things is close. Although we`re going to celebrate a victory maybe, we need to make sure we get out this vote.

KORNACKI: Speaking of getting out the vote, the thing that jumped out at me, Michelle, looking at these results last night, it was the suburbs. It was right -- it was in Columbus and immediately outside of it.

Danny O`Connor won 65 percent of the vote and had astronomical turnout. If just looked at that part of the district, you said, it`s over, the Democrat wins. There was a lot of rural support for the Republican.

But that told me the enthusiasm is on the Democratic side here.

MICHELLE GOLDBERG, "THE NEW YORK TIMES": Right.

And I have seen it all over the country. Every single place I have been in this country over the last year-and-a-half, you meet these women who had always voted before, but had never canvassed, who -- I have met women who have cut back at work to devote themselves to anti-Trump activism, I mean, people who wake up in the morning and say, what can I do to flip this district, whose husbands kind of barely recognize them?

And you can see it in the numbers, right? You can see the complete collapse of college-educated white women in the Republican Party. They`re also underwater now with college-educated white men, although less so.

And, I mean, there -- I think there are people all over this country who would crawl over broken glass to vote against...

(CROSSTALK)

NIKPOUR: But is that the message for the Democrat Party, just anti-Trump?

GOLDBERG: I don`t think it has to be the message. And I don`t think that -- I think most of these candidates have -- most of these candidates don`t even have to talk about Trump that much, because it`s implicit.

The candidates are out there talking about health care or talking about higher minimum wages, talking about economic issues. And they barely need to mention Trump, because there`s all of these activists out there for whom it`s implicit.

KORNACKI: Well, and speaking of mentioning Trump, that name did happen to come up last night at the Republican -- they said it`s a victory celebration. They`re claiming victory.

Troy Balderson had plenty of gratitude to go around. Let`s listen to what he said.

(BEGIN VIDEO CLIP)

TROY BALDERSON (R), OHIO CONGRESSIONAL CANDIDATE: I would like to thank President Trump.

(CHEERING AND APPLAUSE)

BALDERSON: I would also like to take the time to thank Vice President Pence. There`s many others. I could just keep going on and on.

Over the next three months, I`m going to do everything I can to keep America great again.

(END VIDEO CLIP)

KORNACKI: Notably there, though, Balderson did not think the governor of Ohio, the former congressman from that district, John Kasich, who came through with a key endorsement of Balderson late in that campaign.

But, of course, Kasich criticized the decision of Trump to come in there and campaign at the end.

And, Philip, let me bring you in on that.

The president trying to take credit for this.

PHILIP RUCKER, "THE WASHINGTON POST": Yes.

KORNACKI: The role he`s going to be playing when we get into September, October, very early November, how active is he going to be going into these districts?

RUCKER: Steve, he wants to be very active.

White House advisers that I have talked to in recent weeks say the president is hungry to get out there, he wants to play in all these races. There`s a clear effort by his advisers, as well as by the congressional leaders, to keep him focused on places where he adds value on the trail, go to some of those -- those red states with Senate races, like Montana, like North Dakota, like West Virginia.

Get him to West Virginia all the time, but they don`t really want in campaigning and some of these suburban districts. The president, on the other hand, thinks that he`s added value anywhere he goes. He wants to be out there. He wants these Republican candidates to run under his banner.

He wants the midterms to be about him. And I think he`s going to be active both on the trail, but also expressing his thoughts on Twitter about these campaigns as they heat up.

KORNACKI: And, Philip, in terms of Republicans, the Republicans there in D.C. trying to save the House, have they come up with any kind of a strategy for how they`re going to integrate Trump into their effort, how they`re going to sort of just -- just deal with the volatility of what`s he going to tweet this morning?

RUCKER: Well, they can`t control what he`s going to tweet. I think they wish they could. And they definitely can`t.

Look, they`re going to try to find some places where he can go. They`re actually using Vice President Pence a lot on the House races. He for months now has been doing a lot of campaigning in some of these House districts, as well as raising money for some of the House candidates and some of the other -- other groups.

But, look, the president is going to go where he wants to go. He wants to be campaigning, and I think the White House is trying to keep him focused on the Senate.

KORNACKI: Michelle, I mean, there`s the school of thought -- and I tend to subscribe to it -- that when you`re the opposition party in the midterm, you almost don`t need a message. The message is just, hey, if you have any issue with the president, use us as a check, use as a vehicle.

And looking at that pattern -- and we have got some numbers will show later, though -- with such concentrated Democratic strength right there around Columbus, is there a longer-term issue for Democrats here, that support just being too concentrated around cities in immediate metro areas?

GOLDBERG: Well, I think that it`s -- because it`s not just metro areas, right? It`s also metro suburbs.

So if you start winning, say, the suburbs of, like, Houston and some of these other big cities, that -- that`s a governing majority, right? You can kind of live without the hardest-core rural areas.

I think that eventually there might be some tension, in that you have -- because the opposition to Trump is so broad, and it`s kind of a big tense, you have candidates in Orange County who are sort of fiscally conservative, socially moderate. Then you have some of these economic populists in Michigan, for example.

That might cause tension later on, but I think that those things -- those are luxury problems to have, a party that`s too big, and that stuff can be resolved in time after the midterms.

KORNACKI: All right, Michelle Goldberg, Noelle Nikpour, Philip Rucker, thank you all for joining us.

And, again, the waiting game continues there in Buffalo. We are waiting on Congressman Chris Collins, arrested, indicted. He`s supposed to speak to the press. At least, that was the plan. I think this was originally supposed to happen an hour ago. Keeping an eye on it. We will let you know what happens if and when he does step forward.

And, again, as we continue that wait, I am going to head over to the Big Board. We`re going to go deep on that -- we call it a divide. It`s so much deeper than a divide -- rural and suburban in Ohio 12 last night. It`s a story for that district. It`s a story for America right now in the Trump era.

This is HARDBALL, where the action is.

(COMMERCIAL BREAK)

KORNACKI: All right, welcome back to HARDBALL.

In 24 hours -- it was 24 hours ago I stood in this exact position. And I said, the polls are closing in Ohio and, very soon, we`re going to know who won the special election. Hey, 24 hours later, we still don`t know who won the special election. NBC News is calling this too close to call.

And I just want to take you through. First of all, there has been movement today. And I just want to show you what it means. It`s a small number. But when you`re in a situation like this, small numbers can be very big.

So the gap this morning in this district, the lead for Balderson sat at 1,754. There were some uncounted votes, it turned out. There was a precinct that they had not had tabulated, they had not added to the county count in Franklin County.

That`s where O`Connor ran up the score. So, that 1,754 tonight comes down to 1,564. That is significant, because, first of all, you can see what it does. The gap shrinks. It was a 0.9-point lead. Now it`s down to 0.8.

Why am I obsessed with these small numbers? Because if that gets down to 0.5, we go into a recount. That`s the state law. No one`s declared the winner. You got to go through a recount.

And the other reason to keep an eye on that, as we have been saying, provisional ballots, you got 3,435. They`re just sitting there. They`re not going to be counted for 10 days. And there are also about 5,000 -- 5,048, to be exact. They are uncounted absentee.

A lot of these are ballots that were mailed out. They haven`t come back yet. Some of them will come back. Some of them are in the mail now. If they were postmarked by Monday, they will be counted. So there`s opportunities here.

You expect the provisional vote to break Democratic, a bit of a wild card here, but you only have to take a couple hundred off that, and you fall under that 0.5, and you go into a recount.

So that`s why we`re keeping a close eye on this. Hey, and surprises happened. They find votes. Well, lo and behold, we got a race. So there`s that.

And the other thing we wanted to talk about -- we have been teeing this up earlier in the show -- it is one of the big stories to come out of this in this district and nationally. We talk about the Trump era, the divide between the suburbs and rural areas.

Remember, traditionally, suburbs were a Republican area. Well, not anymore, not in the Trump era. Look at -- I will take two counties here, a tale of two counties in this district.

First of all, Franklin County, part of Columbus` immediate suburbs, suburbs that a lot of ways look like a city. In 2012, Barack Obama won by three points in this part of the district. In 2016, Trump comes along. The margin explode for Democrats. It goes from three up to 18 for Hillary Clinton.

Last night, special election in the Trump era, it continues to explode, goes all the way up to 31 points. Democrats now winning in the suburbs here by 31 points.

Now, culturally, let`s take a trip to a very different part of the country, really, the state of Ohio in sort of, culturally speaking, the country. Muskingum County out here. This is Zanesville. It`s a small older city surrounded by rural areas.

How about this for a transformation in the Trump era? In 2012, Barack Obama won this part of the district. He won by a hair, 0.15. But this was blue in 2012. In 2016, Donald Trump comes along and suddenly Republicans win it by 29 points.

Last night, we have the special election, and Balderson wins it by 33. These areas were voting almost the same in 2012. And here we are six years later, and they`re 64 points apart. That is -- when I say a divide, that is something much bigger than a divide.

It`s a little exaggerated here because it`s O`Connor`s home county and Balderson`s home county, but you get the idea. We`re seeing this in Ohio. We are seeing this everywhere, rural-suburban divide.

Question is, where`s the energy for the midterms this year? The answer here, even though Balderson maybe going to win this thing, the reason it`s so close is because there`s more energy right now in that Democratic suburban area.

Take a quick break.

Up next: Rudy Giuliani calling on Mueller to wrap up the Russia probe, after rejecting the special counsel`s latest terms for a Trump sit-down. We`re going to get into that and much more with our Roundtable. That`s straight ahead.

You`re watching HARDBALL.

(COMMERCIAL BREAK)

KORNACKI: Welcome back to HARDBALL.

A confrontation between President Trump and the Office of the Special Counsel just might be coming to a head.

"The New York Times" reporting that President Trump`s lawyers have rejected the special counsel`s latest request for an interview.

The president`s team proposed a counteroffer. They would accept a limited scope of questions, a scope that does not include anything related to obstruction of justice.

Rudy Giuliani addressing the next steps while joining his co-counsel, Jay Sekulow, on his radio show today.

(BEGIN AUDIO CLIP)

JAY SEKULOW, ATTORNEY FOR PRESIDENT DONALD TRUMP: Mayor, I know you have said and I have said this -- we want to see this come to closure soon here.

Mayor?

RUDY GIULIANI (R), FORMER MAYOR OF NEW YORK: Yes, we do.

It`s about time that it ends. I also think -- and I hope the special counsel is as sensitive to it as we are -- we do not want to run into the November elections.

So, you back up from that, this should be over with by September. So you back from that, this should be over with by September 1.

We have now given him an answer. He -- obviously, he should take a few days to consider it, but we should get this resolved. If there`s going to be an interview, let`s have it. If there`s not going to be an interview, then let him write his report.

(END AUDIO CLIP) KORNACKI: For the latest, I`m joined by the HARDBALL Roundtable, Shelby Holliday, a reporter with "The Wall Street Journal," Nick Confessore, a political reporter with "The New York Times," and Astead Herndon also a reporter with "The New York Times."

Two from the same paper.

SHELBY HOLLIDAY, "THE WALL STREET JOURNAL": Two against one.

KORNACKI: This is like you`re ganging up here on "The Wall Street Journal" reporter.

So, because there`s only one "Wall Street Journal" reporter, Shelby, I will start with you tonight.

HOLLIDAY: Thank you.

KORNACKI: That seems like a heck of a stumbling block if the issue is, can he -- can Mueller or can he not ask about obstruction of justice?

HOLLIDAY: Well, that is a big part of the investigation. That`s something we have been hearing recently.

The lawyers have been negotiating this since January. That was not really on the table at first. Originally, we heard we don`t want President Trump to talk about his business dealings. Obstruction is now coming into the picture.

I also think it`s very interesting that Rudy thinks this probe could be wrapped up by September, because there is a Paul Manafort trial in September. I think -- I believe there`s a Maria Butina hearing in September.

There`s no way that`s possible. He seems to be wanting to pin that on the special counsel, saying they need to wrap it up, and if they don`t, that`s their fault.

But we know the special counsel wants to interview Trump. We have a list of questions that he wants to ask. We know Trump says he wants to interview with the special counsel. So if this doesn`t happen by September, that is Rudy Giuliani and his team`s fault.

KORNACKI: And we have heard all sorts of the predictions, maybe wishful predictions, about when this is going to be over so far. Some of those dates, I think, have come and...

HOLLIDAY: Back in February, right.

KORNACKI: Yes, I think they have come and gone by now.

But, Nick, what is Rudy doing here? Is there an actual -- does he see a scenario where Trump sits down and he`s trying to work towards it? Is he just playing for time here? What`s he trying to achieve?

NICHOLAS CONFESSORE, "THE NEW YORK TIMES": Well, to your point, through several lawyers, the president`s lawyers have put out timelines saying, it should be over by then, and then by then and by then.

They`re always trying to shorten the timeline. And it`s arbitrary. And what they`re doing is trying to set up the idea that it should be done by a certain time, and if it`s not, it`s desperate or illegitimate.

What everybody is playing for now including the mayor`s two lawyers on one of the lawyers own radio show, which is kind of fascinating, what they`re playing for is the end game here.

This is all going to be decided in Congress and before the American people. There`s probably not going to be an indictment of a sitting president. And what they`re trying to do is establish a predicate that Mueller is being unreasonable.

But everything we are hearing -- this is very important -- everything we are hearing is coming from the president`s team and people around him. We do not know how long Mueller has left or what he`s found, what more he wants to do, or even how important this interview is to his investigation.

STEVE KORNACKI, MSNBC HOST: Shelby said it a second ago, we keep hearing that the president wants to sit down and talk with Mueller`s team. What`s your read on that? Is that something that he would actually -- would he overrule his lawyers and say that`s it, I`ll sit down.

Would Giuliani strike some kind of a deal where there`s a limited scope and then Trump`s in there and his lawyers are worrying about, you know, is he just going to start kind of talking and go outside the terms of that? What do you think the possibility of them actually sitting down is?

ASTEAD HERNDON, POLITICAL REPORTER, THE NEW YORK TIMES: Well, it`s hard to know. Sometimes, we`ve seen the president say you know I would be happy to sit down and I`ve got nothing to hide, and then another points, especially through his lawyers, they`ve tried to create that limited scope.

I think what Nick said is really important in that this is clearly just another effort on the have behalf of the president`s team to murky this -- to murk up this investigation. And so, what we have now is a situation where there are creating arbitrary deadlines and they know that they`re the only ones speaking to the media. They understand that special counsel`s team is operating in the shadows.

And so, the public hears their side of it and they`re speaking to their own audience, to signal to them that this is continuously a, quote/unquote, witch-hunt and that no matter what evidence may be coming forward in the future they`re already setting the parameters for their folks to this. Is that -- Nick is saying too about this is about the court of public opinion those kinds of messages, it`s about the court of public opinion. Is it working?

SHELBY HOLLIDAY, REPORTER, THE WALL STREET JOURNAL: It`s working, yes, among a certain percentage of Trump`s base I do think it`s working. I`m constantly talking to Trump supporters who say this whole Russia thing, they use the same language as the president they call it a hoax. They think it`s really disgusting. They even -- some of them think we need to be friends with Russia.

So they kind of echo the president and the president`s lawyers` comments. I do think it works for some people. Obviously, it`s not going to work when it comes to the special counsel and, legally, I`m not sure it will matter so much.

But, you know, I think that`s also going on simultaneously with a with a trial of the president`s campaign manager that is not looking good for the president. I think it`s also a big distraction. It`s a look over here. Don`t mind what`s going on in Virginia. Check out -- check out this radio show, check out Fox News tonight, listen to us.

And yes, I do think it distracts, but ultimately is it going to work? I don`t think so.

KORNACKI: And, Nick, do we have a sense how the midterm calendar factors into this we were just talking about with Chris Collins, the congressman there, the idea that -- you know, is that 60-day window on announcing a new prosecution on charging somebody before an election, is that going to start sort of interfering with developments here in this whole Russia, you know, matter?

CONFESSORE: No, because the guidelines don`t apply to you if you`re not actually a candidate for election and the president is only two years into his term. Look, the fact that they bought the case against Chris Collins and we`ll talk more about a few minutes, but the fact that they brought that so close the election shows how slam dunk that they think it is in their minds, how straightforward and how necessary it was.

So, I doubt the election is going to be weighing on Mueller.

KORNACKI: All right. And again you see in the corner of your screen, speaking of Chris Collins, we continue to wait -- we thought we`d hear from him at the top of the hour, heck, we thought we`d hear from him last hour. The podium still an empty there, but we keep hearing that he is on his way out imminently. The congressman arrested today under indictment, supposed to step forward and make his first public statement. We`ll bring it to you if and when he does.

Meanwhile, up next, they weren`t elected, they weren`t appointed, they weren`t confirmed by Congress and they`re not veterans. So, why are Trump`s buddies at Mar-a-Lago telling the Veterans Administration what to do? A very interesting new report.

You`re watching HARDBALL.

(COMMERCIAL BREAK)

KORNACKI: After months of delay, the Trump administration now slapping new sanctions on Russia in response to the poisoning of former spy Sergei Skripal in the U.K. Secretary of State Mike Pompeo says that Russia violated international law by using a nerve agent to poison Skripal and his daughter back in March. The Trump administration had been criticized by fellow Republicans in the Senate for its lack of response to that nerve agent attack.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: One of the commitments I`ve made is that we`re going to straighten out the whole situation for our veterans. Our veterans have been treated horribly. They`re waiting in line for 15, 16, 17 days. Ike Perlmutter has been very, very involved, one of the great men of business, and we`re going to straighten out the V.A. for our veterans. I`ve been promising that for a long time.

(END VIDEO CLIP)

KORNACKI: Welcome back to HARDBALL.

That was President Trump announcing that his friend Ike Perlmutter, the chairman of Marvel Entertainment, was going to be, quote, very involved in the Veterans Administration.

Well, according to a new report in "ProPublica", Trump followed through with that promise. Perlmutter, along with Dr. Bruce Moscowitz and lawyer Marc Sherman, are part of, quote, an informal council that is exerting sweeping influence on the V.A. from Mar-a-Lago. None of them has ever served in the U.S. military or government, according to "ProPublica".

Mar-a-Lago crowd spoke with V.A. officials daily reviewing all manner of policy and personnel decisions. They prodded the V.A. to start new programs and officials travel to Mar-a-Lago at taxpayer expense to hear their views.

We`re back now with the HARDBALL roundtable. Shelby, Nick and Astead.

And so many issues are getting tangled up in this. This is the people who are not going through any kind of confirmation, exerting some sort of policy role reportedly here. This is taking place at a private business that the president owns. There`s taxpayer expense, there`s quite a bit involved in this story here.

HERNDON: Yes, there are so many threads and a lot of it speaks to the kind of chief concerns that many folks have about this administration. You have an administration that has closed long-standing ties with many of these billionaires people who have president Trump has worked with.

But the question of does that mean they get to overlap into public policy, especially when they`re not being held accountable have taken those confirmation, you know -- or can be spoken to by the American people. That seems fairly undemocratic. But, you know, this is part of what Democrats are trying to do in painting this administration as people who are grifters, people who care only about their fellow elite. And this story will only help that effort.

KORNACKI: And it`s interesting, too, Nick, though that the question also is how many people are going to notice a story like this? I`m thinking back -- I think it`s about 10 years ago, a previous administration there was a V.A. scandal, and it got constant weeks-long attention in this country.

We live in an age right now where the president could tweet five provocative inflammatory things by the time I finish this sentence, and suddenly, we`re talking about something else. This is the sort of thing that happens in Washington right now that maybe gets attention for a few minutes and then everybody was on to something else.

CONFESSORE: You know, possibly, Steve. But look, there is one group that will pay a lot of attention to this and that`s the veterans, who actually want good health care from the V.A., who care about its management. And, you know, some of them are going to be very angry to learn that the reform of their institution has been delegated to a bunch of rich friends of the president, who just happen to be members of his private club and they`re paying him for the privilege of weighing in on this policy.

It is unprecedented in American history. I can`t to give any example like this in modern history at least, and it just goes to show you -- I think with this president and this administration when they came in and they couldn`t attract top-level talent and experience, they started outsourcing these jobs and these tasks to people who were friends with the president. And what you end up with is something like this.

KORNACKI: That word Nick used though, unprecedented, how many times have I heard that in connection with Donald Trump, with the administration?

HOLLIDAY: Right. I can`t count -- I certainly don`t know how many times you`ve heard that word. But what also -- if you look at the big picture, what also just baffles people is how does this accomplish the president`s goal of draining the swamp. And I`m not calling these three men the swamp, but he wants the money, the influence all the stuff that comes with bad policy out of Washington, D.C.

And it almost -- it almost seems as if he is relocating the swamp in one way or another, because he wants his rich friends with influence to be weighing in on policies, and they have never served in the U.S. military. So, we can all sit here and talk about it.

I would love to get a table full of veterans or of active duty service members to weigh in on this because it`s their health care. It`s their lives. It`s their decision to serve this country that`s ultimately on the line here.

And it`s interesting too, just the role that Mar-a-Lago has played in this presidency and in the questions that are raised by. We`ve had presidents who`ve had the sort of summer retreat, the vacation retreat, but they`re not usually active country clubs at the president owns.

HERNDON: Right, it`s an avatar of the excess of President Trump. And you have now a situation in which people can pay to get that type of access. What this report shows is that access is officer might be coming with influence, with policymaking, and that`s even an escalation that we`ve seen before.

We`ve had ethics chief sounding the alarm so president -- against President Trump since he didn`t release his tax return, since he didn`t divest from his businesses. And I think that even though Republicans may not be whole -- may not be speaking out about this, this is something that motivates Democrats even further. They look amongst themselves and VIP people who set out 2016 or thought that Hillary Clinton might have been, quote- unquote, corrupt are now seeing something like this and saying maybe I should get in in the game.

KORNACKI: And it`s interesting. We were talking about this earlier. It connects with that that we are seeing in the lower right of your screen. We`re waiting on that -- keep saying it -- that Chris Collins, a statement, we do still expect that.

But the idea, Nick, of Democrats running against -- you know, we`ve heard these terms culture of corruption running on that idea, President Trump said it in 2016, drain the swamp. Maybe Democrats would repurpose it here in 2018. They ran -- Democrats ran on draining the swamp when they won back the House in 2006.

This is almost a standard thing that you hear in politics being applied right now perhaps with some very unusual context.

CONFESSORE: But I think it actually helps Democrats when the profusion of scandal comes full circle, and there are so many --

KORNACKI: Nick, I`m going to interrupt you. We are going to listen to Chris Collins. Here we go.

(START VIDEO)

REP. CHRIS COLLINS (R), NEW YORK: Thank you all for coming today. Before I get started, most of you here know my wife Mary of over 30 years. Thanks for being here.

National press may not know Mary Sue as well as our local press does.

So, over the years, I`ve often talked about the American Dream. I`m extremely fortunate and that I have lived it. It started for me when I borrowed and started scraping together every dollar I could to buy the Westinghouse Gear Division here in Buffalo, and move it to Niagara Falls under a new name, Nuttall Gear. I`m proud that we put hundreds of people to work who are still working there today.

After selling Nuttall Gear in 1997, I ran for Congress in 1998 up in the Niagara Falls area, knowing that my business experience would benefit the citizens of New York and offer a new perspective in Congress. After being humbled in that race, I spent the next 10 years as an entrepreneur, investing in and helping to stabilize dozens of bankrupt and financially distressed companies saving and creating hundreds of jobs hear in western New York.

In 2007, I was recruited to run for Erie County executive, to turn around the effective bankrupt county. I was elected. And by applying the principles of Lean Six Sigma, turned around the county finances in 18 short months, all the while honoring my campaign pledge to work for $1 a month.

One of the many companies I invested in was a small drug company, Innate Immunotherapeutics, that was working on a unique cure for HIV patients suffering with AIDS. Ultimately, that focus shifted to a treatment for secondary progressive multiple sclerosis, which is one of the deadliest autoimmune diseases known to mankind.

My affiliation with this company is why we`re here today. I`ve been an avid, an unwavering supporter of Innate Immunotherapeutics for more than 15 years, long before I came to Congress or was elected county executive here in Erie County.

Over this time, my affiliation with Innate Immunotherapeutics has prompted attacks on me, my integrity, and my investments by my political opponents. I believed in the company and still do, and in the potential of a drug that had the real possibility of improving the treatment options for secondary progressive multiple sclerosis patients, which is about the most debilitating disease known to mankind, and something that I saw firsthand affect a close family member.

Over the years, I invested heavily in Innate, became the company`s largest shareholder, and an uncompensated member of its board of directors. Without my investments and steadfast financial support, the company would have gone under, bringing with it a premature end to a drug I truly thought would revolutionize treatment options for secondary progressive MS.

Of all the things I wanted to accomplish in my life, finding a cure for secondary progressive MS was at the top of the list. After years of blood, sweat, and tears, we firmly believed we were on the verge of a medical breakthrough. Sadly, despite showing great initial promise, the drug was ultimately shown to be unsuccessful, which is a setback for all those suffering from this deadly disease.

Many have speculated about my relationship with Innate. Here are the simple facts. My connections with the company are well-known. I believe I acted properly and within the law at all times with regard to my affiliation with innate.

Throughout my tenure in Congress, I have followed all rules and ethical guidelines when it comes to my personal investments, including those with Innate. When it became clear that the drug I and others believed in fell short of our hopes and examinations, I held on to my shares rather than sell them. As a result, the significant investment I made in the company worth millions of dollars were wiped out. That`s OK. That`s the risk I took.

My real concern lies with the millions of people suffering from secondary progressive MS who to this day struggle without life-saving treatments for their deadly disease. I`ve said it before and I`ll say it again. I am proud of my affiliation with Innate. I may have lost most of the money that I invested in the company, but I took the chance to bring relief to those who deal with the dreadful disease of secondary progressive MS every day.

The charges that have been levied against me are meritless, and I will mount a vigorous defense in court to clear my name. I look forward to being fully vindicated and exonerated, ending any and all questions relating to my affiliation with Innate.

I`ve spent the last 10 years in public service as the Erie County executive and as a member of Congress. I`ve also spent many years volunteering to give back to my community. Whether it was a member of the Federal Reserve Bank, small business advisory council, member of the board of trustees of Kenmore Mercy Hospital, or as a long-time mentor to small business at the Center for Entrepreneurial Leadership at U.B., the public knows my dedication to Western New York. Because my focus is to defeat the charges in court, after today, I will not address any issues related to Innate Immunotherapeutics outside of the courtroom. As I fight to clear my name rest assured I will continue to work hard for the people and constituents of the 27th Congressional District of New York and I will remain on the ballot running for re-election this November. Thank you very much and have a great night

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END

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