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Release of redacted report expected next week. TRANSCRIPT: 4/12/19. Hardball w/ Chris Matthews.

Guests: Janet Napolitano, Charlie Sykes, David Miliband, Leon Panetta,David Cay Johnston

ARI MELBER, MSNBC HOST:  Some food for thought as we head into the weekend.  Thanks for watching.  "HARDBALL" is up next.

CHRIS MATTHEWS, MSNBC HOST:  Cruel and unusual punishment.  Let`s play HARDBALL.

Good evening.  I`m Chris Matthews in Washington.  Remember how President Trump said a week ago he was going to get tougher on immigrants.  Well, since then he`s decapitated the leadership of his Department of Homeland Security for not implementing his hard line policies.  And now, he`s found another way to air his frustrations, this time, embracing a plan to use migrants, detain migrants as pawns to retaliate against his political enemies.

The Washington Post first reported the proposal noting administration officials have proposed transporting detained immigrant to sanctuary cities at least twice in the past six months.  The report, we`re going to add, the White House told U.S. Immigration and Customs Enforcement that the plan was intended to alleviate a shortage of detention space but also served to send a message to democrats.

The President confirmed the report in a pair of Tweets saying, he was giving strong consideration to this plan.  And at the White House this afternoon, he expanded upon that.


DONALD TRUMP, U.S. PRESIDENT:  California certainly is always saying, oh, we want more people, and they want more people in their sanctuary cities, well, we`ll give them more people.  We can give them a lot.  We can give them an unlimited supply.  And let`s see if they`re so happy.  They say, we have open arms.  They`re always saying they have open arms.  Let`s see if they have open arms.

The alternative is to change the laws and we can do it very, very quickly, very easily.  Okay.


MATTHEWS:  Do you like the use of the word, supply, like supply of people.  Well, yesterday, DHS spokesperson told NBC News the proposal, Trump`s proposal, was a suggestion that was floated and rejected.  And a former DHS official familiar with the administration`s thinking said the plan was ultimately scrapped and it was determined to be so illegal.

Earlier today, House Speaker Nancy Pelosi, whose district in San Francisco was among those the White House wanted to target attacked the idea.


REP. NANCY PELOSI (D-CA):  It`s just another notion that is unworthy of the presidency of the United States and disrespectful of the challenges that we face as a country, as a people to address who we are, a nation of immigrants.


MATTHEWS:  Well, meanwhile, NBC News reports Trump advisers discussing increasing military involvement at the border, including creating ten city detention camps for migrants.

I`m joined right now by Janet Napolitano, former Secretary of Homeland Security under President Obama, an author of How Safe Are We, Homeland Security Since 9/11.

Madam Secretary, thank you so much, madam President as well, your head of the California College System and everything.  So let me ask you about this.  What do you make of Trump and what he`s up to disbursing, talking about disbursing detained migrants to cities where he wants to punish the mayors and the democrats?

JANET NAPOLITANO, FORMER SECRETARY OF HOMELAND SECURITY:  Well, I think the notion of using migrants as political pawns is inconsistent with our values and inconsistent with the law and logistically not feasible.  It`s not something that`s within the ICE budget.  What are we going to do?  Take ICE agents off the line to transport immigrants to sanctuary cities?  This seems to me a misguided and ill thought out proposal.

MATTHEWS:  What do you think about him saying, I`m going to tell McAleenan, the new guy, I`ll tell him to do something illegal.  And then if he does something illegal because I told him to, I`ll pardon him?

NAPOLITANO:  You know, I think -- first of all, I know Kevin McAleenan.  And I know that he will want to obey the law.  And for the President to even suggest that he will pardon an official in advance for any violation of the law, again, ill thought out, inconsistent with our values, just really awful.

MATTHEWS:  I`d like to go back to the norm in my head and what a centrist democrat, centrist republican, somewhere in the middle public servant president would do with the border right now with this surge going on.  Right now, we`re facing a lot of asylum seekers, most of them legitimate, perhaps, you could say, but over a million.  On an annual basis right now, they`re all coming in for whatever reason they found out that under this certain situation we are facing right now, if you come here with a child, you`re probably going to get through and you won`t have to face any kind of hearing until like 2021, what do you do?  What do we do?

NAPOLITANO:  I think there`s a number of things that can be done.  First of all, we should actually flood the border with what I think of as the rule of law.  We should be moving immigration judges and indeed other administrative law judges from other departments to the border so that we can effectively and efficiently process these asylum claims consistent with the rule of law, consistent with whether the applicants can show or demonstrate a credible fear of persecution in their country of origin.

And then we need to get away from this concept that everybody has to be detained.  We can release people into the country.  They can be required to wear an ankle bracelet.  They can be required to report back periodically until such time as they get a return court date.

MATTHEWS:  What do you think of the -- I haven`t had you on.  I want to have an expert on, especially somebody who`s not on the hard right, which you`re certainly not.  What do you do with the whole question of border control or sovereignty?  What would a reasonable, humane president do?

NAPOLITANO:  Well, first of all, I think you need to think of the border as a zone.  It`s a zone through which thousands upon thousands of trucks and cars pass every day.  Mexico is our number two or three leading trading partner.  And so you have to think about it from a strategic point of view.  You need to strengthen the ports of entry.  You need to add more technology to those ports so the traffic can be inspected and processed through ever more quickly.  You need to add manpower and technology between the ports of entry by technology there, I mean, sensors, tunnel detection equipment and you need air cover, things like drones across the entire expanse of the border.

I mean, it`s that combination of things that we deployed under President Obama, we drove illegal immigration to 40-year lows at that point in time.

MATTHEWS:  It`s great to have you on here, a great public servant.  Janet Napolitano, thank you for coming on HARDBALL.

While during a trip to Texas earlier this week, President Trump lamented that the military can tougher implementing the policies he`d like to see at the border.


TRUMP:  I`ve going to have to call up more military.  But our military, don`t forget, can`t act like a military would act because if they got a little rough, everybody would go crazy.  So our military can`t act like they would normally act or like, let`s say, another military from another country would act.


MATTHEWS:  Well, meanwhile, NBC News reports that during conversations about using the military to build tent cities for migrants, officials discussed whether the U.S. Military could legally run the camps once the migrants are housed there.  According to three officials familiar with talks, noting it was very unlikely since U.S. law prohibits the military from directly interacting with migrants.

I`m joined now by Yamiche Alcindor, White House Correspondent for MP PBS NewsHour, David Miliband, President and CEO of the International Rescue Committee and former British Foreign Secretary, and Charlie Sykes, Editor- in Chief of The Bulwark.

Let me go in this order, Yamiche first.  I think Napolitano was great because we had somebody who`s been head of Homeland Security, knows all the challenges of border control, knows that the wall is not the answer but there are a lot of other answers, also knows that we have a problem, a real challenge now facing up to a million people or more actually on a monthly basis, over a million people now trying to get into this country, probably in most cases, legitimately, but a lot of people to be handled.

YAMICHE ALCINDOR, PBS NEWSHOUR WHITE HOUSE CORRESPONDENT:  This is the President using immigrant bodies to make a political statement and to punish democrats.  We saw that first when he separated migrant families and saying, if you want to come to this country, we`re going to physically remove your child from you.  Now, he`s saying, you know what, democrats, I`m going to actually empty people into your cities.  And in some ways, people are saying and critics of this are saying, hope for the worst, hope that something happens in San Francisco and figure out what`s happening.

MATTHEWS:  Well, you look at what happened to Bill Clinton, he was governor of Arkansas for two years, the Mariel boat load was dumped on them, all those people with all kinds of problems, criminals included from Cuba, next thing, he was out of office.

ALCINDOR:  And I have talked to people in the Department of Homeland Security, both current and former officials who say, the President`s number one problem is that he wants to do something that`s actually illegal.  He wants DHS to have policies that are literally not part of international law and not part of U.S. law.

So he`s going to have to work with Congress to fix those laws or to change those laws in his mind or he`s not going to be able to do this.  White House officials have told me that they don`t want people coming to this country who live in, quote, unquote, bad neighborhoods.  That`s how the White House looks at gang violence, poverty, all the issues facing Central America.  And as a result, the President is basically trying to do as much as he possibly can to change the asylum laws but he can`t do that from the White House.

MATTHEWS:  You know, Charlie Sykes, this seems like, again, an eight-year- old, the kind of thing that happened at the back of the car when the two kids are fighting.  He`s on my side, she`s on my side.  I`m going to get her.  I`m going to push over.  I`m going to push some of these detained migrants into San Francisco.  I`ll show Nancy.  It`s like a battle between kids with him being the kid.

CHARLIE SYKES, EDITOR-IN-CHIEF, THE BULWARK:  It is.  And this is, you know, Donald Trump unchained.  And you`re seeing his pettiness, his vindictiveness, his contempt for the rule of law.  What really strikes me is that this is like a Twitter troll mimicking a policy.  It seems as much designed to trigger the libs as it is to actually solve the problem.  This is the kind of idea that Stephen Miller would come up with, you know, sitting around drinking beer at the frat house, and go, this would be great.  Imagine if we dumped all of these immigrants in Nancy Pelosi`s district.

But the fact that it`s taken a serious policy right now, and people do need to take it seriously, this is a president who, in the last week, fired the head of the Department of Homeland Security because, number one, she was not cruel enough, and number two, she refused to break the law.  So it is not amazing that within this week, we find the President pushing policies that are more cruel and that require the violation of the law.  And so he`s really getting in touch with his inner banana republicanism.

MATTHEWS:  Yes.  I`m just thinking, I don`t honestly know the full geography of the country, but I can imagine trying to flood the zone and tenderloin (ph) with the homeless people in San Francisco, let`s get a couple hundred thousand more homeless out there and see how Nancy likes that.  That`s the kind of threat he`s posing now.  Thanks for coming on.  Your thoughts.

DAVID MILIBAND, PRESIDENT, INTERNATIONAL RESCUE COMMITTEE:  I think that it`s important first of all to emphasize that we`re seeing the symptoms of crisis in the sense that the real origin of this crisis are in the northern triangle of El Salvador, Guatemala and Honduras.  The International Rescue Committee is unusual and that we`re an international humanitarian aid agency, so we`re in El Salvador.  I can testify for myself some of the conditions that people are fleeing from.

But we`re also working in the southern border.  We have teams today in Phoenix, as well as in California.  And what we`re seeing is a system who`s very essence is being undermined by policies that frankly are having a perverse effect.  I mean, remember the Twitter trolling that we`re seeing this week follows up a couple of years in which things like the abolition of temporary protected status, which protects 250,000 El Salvadorians who are already in the United States and sending remittances back to families in El Salvador.  That kind of -- the end of that policy is going to have a perverse effect.

MATTHEWS:  You mean the Dreamers?  We call them Dreamers.

MILIBAND:  Well, no.  The Dreamers are a separate category.  I`m talking about the 250,000 temporary protected status or a different group from Honduras, as well as from El Salvador, 350,000 in total.  And those of the --

MATTHEWS:  But, briefly -- I`m sorry, it`s great to have you on because you`ve just been there.  Tell me what conditions would lead a family to head up to our southern border.  How bad is it in those countries?

MILIBAND:  The simplest way of putting it is if you fear your life.  We`re an international agency, so we`re offering support and protection for people who are in fear of gangs.  We work around the world, in Syria, in Somalia, but we also work in El Salvador because the threat to life and limb is real.  And it`s the responsibility of advanced industrialized countries like this one, rich countries, to run asylum processing systems that take each case seriously and then ensure that those who are entitled to stay are able to do so.

I think it`s worth pointing out too that while it`s right that 100,000 people arrived in this country last month, Germany, Another advanced industrialized country, they had a million-and-a-half people who arrived in 2015, `16 from Syria, they`ve got an asylum processing system that takes eight to ten weeks to process a case.  In this country, it`s taking three years.  That`s about how you run your system as well as the wisdom of it.

MATTHEWS:  How is that working politically in Germany, that amount of people coming from Syria?

MILIBAND:  Well, it`s interesting.  Mrs. Merkel obviously took a very bold decision.  She`s sitting, I can tell you today, at 65 percent popularity rating, and not just because she will be retiring in a couple of years.  Yes, it`s true that there`s been real engagement, even political strife and argument about it, you can -- it`s right to be concerned that far right parties try to exploit the situation, but Germany is one of the most stable countries in Western Europe.

MATTHEWS:  Well, she`s the best.  She`s the best leader around.

MILIBAND:  Yes.  And I think it`s too easy to say, well, she lost popularity because of that decision.  Sure it was a tough decision but she was making up for the failure of the rest of the Europe to take seriously the Syrian crisis.

MATTHEWS:  Thank you, David.  As I mentioned earlier, President Trump has repeatedly threatened to shut down the southwestern border with Mexico in order to stem the flow of migrants.  The New York Times reports that during a visit to the border just last week, the President urged Kevin McAleenan, who is about to be named as acting Secretary of Homeland Security to close the southwestern border despite having just said that he was delaying a decision on this stuff for a year.

The report goes on to add, it was not clear what Mr. Trump meant by his request or his additional comment to McAleenan, rather, that he would pardon him if he encountered any illegal problems as a result of taking the action.  NBC News has not independently confirmed this report.

Charlie, this is an amazing thing.  I mean, as Janet Napolitano said, to promise somebody, I`m going to tell you something now.  I want you to do something illegally, my new DHS acting Secretary, you do something illegally.  But don`t worry.  I`m covering your rear (ph) behind on this.  I`ll pardon you afterwards.

SYKES:  Yes, that is extraordinary.  I mean, first of all, closing the border is reckless and it would be economically disastrous.  But, yes, this whole point of telling if, in fact, the President told government officials you can break the law and I will pardon you indicates that we are in a new phase.  I mean, look, remember, this is a president that`s already pardoned Sheriff Joe Arpaio for violating immigration laws.  What happens to the rule of law if, in fact, the President openly says, I will pardon you if you ignore the law.

Now, closing the border may be the bridge too far for republicans in the Senate but this is really one of those moments where I think people in the Senate, Mitch McConnell have to make it very, very clear that, no, if you start abusing the pardon authority to violate constitutional rights or federal law, that`s too far, we`re not with you on this.

MATTHEWS:  Yamiche, play god.  Is this for helping Trump politically in the next election or hurting him, this whole shebang we`re talking about?

ALCINDOR:  I think the idea is if you`re looking at his core base which is really I think what the President and sources tell me he is really focused on, and this is helping him.  It`s basically something that`s very simple that people understand, this idea that I`m going to punish the democrats by actually letting you see the migrants walk around San Francisco.

But I think the important thing is to talk about the pardon issue.  I think about back to James Comey and where the President said I want your loyalty.  This president is asking the new Head of DHS to give him his loyalty to do whatever it takes to follow through with the President`s plans, and we`re not sure whether or not, and I think a lot of people or the jury is still out whether the President gives that same loyalty back.  So even if he`s dangling this pardon, there`s no actual -- there`s no real sense that he might actually go through and actually pardon him.

MATTHEWS:  If that`s not impeachable, I don`t know what is.  A President of the United States using his authority to tell government senior officials, cabinet level people, break the law, I`ll cover you.  That to me goes right across the line of abuse of power.

Thank you, Yamiche Alcindor, thank you, David Miliband and Charlie Sykes.

Coming up, Trump`s charge of spying and treason of the democrats, the (INAUDIBLE) guys are traitors because they don`t like him.  How dangerous is that kind of talk?  I`m going to go one-on-one with former CIA Director, and former Secretary of Defense, and former Chairman of the House Budget Committee, and everything else, Leon Panetta.

Plus, political intrigue toward the Vatican, why is Trump`s guy, Stephen Bannon, going to war with Pope Francis, and he`s over there in the Vatican doing it?

And also Trump`s tax secrets, what would be so embarrassing that this president still refuses to release his taxes and he`s actually threatening the liberty of Steve Mnuchin, his Secretary of Treasury now.  How is that looming showdown with Congress going to play out?  Much more ahead.  Stick with us.


MATTHEWS:  Welcome back to HARDBALL. 

It`s been three weeks now since Robert Mueller submitted his report to Attorney General William Barr.  And, still, we have almost no idea what the roughly 400-page Mueller report actually is or says.  In its place, we`re left with the attorney general`s interpretation, as well as his opinion that the FBI spied on the Trump campaign.  That`s another thought. 

Here he goes.


WILLIAM BARR, U.S. ATTORNEY GENERAL NOMINEE:  I think spying on a political campaign is a big deal. 

SEN. JEANNE SHAHEEN (D), NEW HAMPSHIRE:  So you`re not -- you`re not suggesting, though, that spying occurred? 

BARR:  I don`t -- well, I guess you could -- I think there was -- spying did occur.  Yes, I think spying did occur. 


MATTHEWS:  Well, the president picked up on what Barr said and accused Democrats of treason, a crime, of course, punishable by death. 

Let`s watch. 


TRUMP:  You know, when the Democrats go behind the scenes, and they go into a room backstage, and they sit and they talk, they laugh, because they know it`s all a big scam, a big hoax. 

And it`s called politics.  But this is dirty politics.  And this is actually treason.  This is a very bad thing that people have done.  And I just hope that law enforcement takes it up, because, if they don`t take it up, they`re doing a great disservice to our country.


MATTHEWS:  Well, earlier today, Deputy Attorney General Rod Rosenstein gave a preview of what might be in the Mueller report.

According to Bloomberg News, during a speech to a private group today, Rosenstein said that special counsel Robert Mueller`s report describes Russian cyber-crimes during the 2016 election, and that the report would clear up questions about the Russian campaign to interfere in the election President Trump won.

For more, I`m joined by Leon Panetta, former CIA director, former secretary of defense under President Obama. 

Mr. Secretary, you left politics when it was normal.  And here you are back in a world that is not normal. 

I don`t know.  The president -- in the last segment, you were watching, he was talking about dispersing detained migrants to parts of the country he doesn`t want -- he doesn`t want them to enjoy themselves in, he wants them to have trouble in and cause trouble in.  It`s an 8-year-old. 

And now we have Barr, who I thought was a real -- something of a Washington heavyweight, now behaving more like a toady, saying things like spying, because the president chose that word, saying that the FBI was spying, when it was really doing its job of counterintelligence, which it`s there to do.

Your thoughts. 

LEON PANETTA, FORMER U.S. SECRETARY OF DEFENSE:  Chris, I think we have all gone down the rabbit hole with Donald Trump into Wonderland.

I have -- I have no idea what the hell is going on here with the president, who acts like a punch-drunk fighter, kind of striking out in all directions. 

And I guess what bothers me is, I thought that the new attorney general had some credibility, based on his past experience, and recognizes that, when you`re attorney general, you`re chief enforcer of the law.  You`re not somebody who`s supposed to act on every whim from the president of the United States. 

So I`m a little disappointed in what he said, because the reality is that there was an investigation into Russian interference in our election.  That was a legitimate investigation and one that the FBI should have conducted. 

MATTHEWS:  But there is Barr making the case that it was tainted from the beginning because it was ill-founded, that it was somehow -- it was somehow the work of bad people in the deep state that did this whole thing. 

PANETTA:  Well, I guess there`s plenty of paranoia to go around in Washington with this president.

But it worries me when the attorney general reflects that same paranoia.  The reality is that we had 18 agencies, we have had committees in the Congress all confirm that the Russians interfered in our election process.  That`s a reality.  That`s a fact. 

And the fact that they were able to determine that early on, and were trying to find out just exactly what was going on with regards to Russian interference, I think, is a legitimate area of investigation. 

And the attorney general hasn`t cited any evidence that I`m aware of to indicate that that was not legitimate. 

MATTHEWS:  Let`s talk about next week.  It looks like it`s going to be Tuesday, Mr. Secretary, Tuesday or Wednesday at the latest, we`re going to get some form of the Mueller report. 

The way that -- the way that Barr has done it, maybe with the help of Rosenstein, is to set this spin in action, almost like a preview of a movie that you watch on television every hour or two, you see the same preview.  It`s like he`s set up an expectation that it`s going to exonerate the president, it`s not going to have anything really on -- at all to deal with collusion, and it`ll be a mixed bag, probably bottom line, an exoneration on obstruction. 

By the time we actually get the document, do you think we will be able to get a clear view of it because of all this P.R. that we have gotten from the attorney general? 

PANETTA:  Well, I think it would be well for the American people and all of us to not jump to any conclusions until we have seen the Mueller investigation. 

And I mean seen the heart and soul of that investigation.  If they engage in a practice of redacting half of that report, so that we don`t get the substance of it, I think it really is going to be a miscarriage of their responsibility, in terms of providing the American people with the truth here. 

And, ultimately, let`s face it, Chris.  This report is going to come out one way or another.  It may not happen now.  It may not happen in three or four months, but this report is going to come out sometime.  And the American people are going to see exactly what the Mueller investigation determined.

And, frankly, that`s what we are entitled to. 

MATTHEWS:  Let me ask you about something.  You have worked with regular presidents.  They`re not perfect people.  You have worked with regular presidents. 

And when they`re confronted by one of their Cabinet secretaries with one of the restraints on their authority, because it is a form of limited government -- we have limited government, limited power of presidents.  What do they normally do when you say, well, the law, Mr. President, you can`t do that?  What do they normally do? 

PANETTA:  You need to -- if we had somebody who was not just an acting chief of staff, but somebody who was a real chief of staff, would stare the president in the face and say, Mr. President, you cannot violate the law. 

Your responsibility as president of the United States is to uphold the rule of law in this country.  You swear to uphold and defend and protect the Constitution of the United States.  You cannot go around, as president, telling people that they can go ahead and violate the law, and that somehow you will pardon them after they violate the law.

That goes against every responsibility and duty that a president of United States ought to exercise.

MATTHEWS:  So great you said that, Mr. Secretary, because when I was a staffer on the Hill and you were a member of Congress, that was what we said to each other about our bosses, that they need that counsel, they need somebody to say, don`t do that, this is not the right thing to do. 

PANETTA:  That`s right. 

MATTHEWS:  And you know guys that you knew who got in trouble that weren`t getting -- getting that kind of counsel. 

Anyway, back in July of 2017, President Trump announced a blanket -- a blanket ban on transgender military service, arguing our military must be focused on decisive and overwhelming victory. 

Well, today, nearly two years after the administration tried to come up with a policy that could withstand legal challenges, that ban is taking effect.  According to the new regulation, any individual who identifies as transgender will have to serve in their sex assigned at birth.

This policy reverses a 2016 decision by the Obama administration that allowed openly transgender military personnel to serve openly.

You have had the experience of dealing with rank and file, with the field rank people.  How is this -- what do you think of this decision to ban people like this, people in this situation? 

PANETTA:  I think it`s not only the wrong decision, but it really is going to, in the end, hurt, I think, morale in the military. 

But we are the strongest military on the face of the earth.  And the reason we`re strong is because we allow people to serve in the military, whether they`re women, whether they`re transgender, whether they`re gay.

And the reality is -- and I have seen it as secretary of defense -- that these people served in an outstanding fashion in uniform.  They were willing to put their lives on the line for the United States of America. 

That`s what service to this country is all about.  And when you say, oh, no, we can`t have that particular group serve in the military, you are hurting our military.  And, more importantly, you`re hurting the message we send to the rest of the world about just exactly what does the United States represent. 

MATTHEWS:  Mr. Secretary, you sound like a great American president.  Thank you so much for speaking those words to us tonight.  Thank you.  I mean it.  It`s not a -- you are.

PANETTA:  Thanks, Chris. 

MATTHEWS:  You would be a great president.  I mean it.

Thank you so much, sir. 

Up next:  Ultra-conservatives, including Steve Bannon, are out there ramping up criticism of Pope Francis and his -- for his progressive views. 

NBC News chief foreign correspondent Richard Engel has an unusual assignment tonight.  He joins me to talk about his exclusive interview with a Mr. Steve Bannon.  There they are in St. Peter`s Square.

We`re back in a moment. 


MATTHEWS:  Welcome back to HARDBALL. 

Former Trump adviser Steve Bannon, who`s currently in Europe working on, he says, building an incubator for budding right wing ideologues in Italy, he criticized Pope Francis in an exclusive interview with NBC`s Richard Engel. 

Let`s listen. 


STEVE BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST:  He`s constantly coming back and putting all the faults in the world on this populist nationalist movement.

RICHARD ENGEL, NBC CHIEF FOREIGN CORRESPONDENT:  Well, maybe he`s right.  Maybe these right-wing movements are a problem.


BANNON:  It`s absolutely nonsense. 

ENGEL:  There are people who are going to see this and think, oh, no, Steve Bannon, the guy who helped put Trump in the White House, now has his sights set on the Vatican. 


ENGEL:  Will this guy just stop?  Because it`s true, because that`s what you`re doing.  You`re trying to bring change to this institution.

BANNON:  This institution needs change.  This institution is in decline.  I think people will say that. 

ENGEL:  So this is just the beginning?

BANNON:  Oh, the very beginning, very beginning.  This is going to take years. 


MATTHEWS:  Well, Steve Bannon also criticized the pope for his handling of the ongoing sexual abuse scandal by priests in the Catholic Church. 


BANNON:  My problem with the pope today is about this crisis on pedophilia, that they are not treating this as a crisis. 


MATTHEWS:  Well, this comes after former Pope Benedict published a letter earlier this week saying the scandal was caused by a breakdown in traditional values.

I`m joined right now from London by NBC News chief foreign correspondent Richard Engel, whose full interview with Steve Bannon is going to air on Sunday here on this network, on MSNBC. 

Richard, it`s great.

An unusual assignment for you, sir.  I`m used to you in dangerous situations. 


MATTHEWS:  This is just troubling. 

The idea that Steve Bannon is going after my church and blaming it for being anti-populist, and therefore causing somehow the clerical scandal, I don`t see the connection.

ENGEL:  Well, let me set the context here. 

This is not just us giving Steve Bannon an opportunity to mouth off about the church.  We did more than just sit down and interview with him.  We -- this is an investigation.

We looked into a movement that Steve Bannon is that -- that he`s a part of that is going after Pope Francis.  And it is very much the same movement that is driving the right-wing populist movements across the United States and the same movement, the same tactics, the same strategy that helped bring President Trump to the White House. 

So there is this loose coalition of people who have grievances with Pope Francis, who think that Pope Francis is really deep down a liberal, and they don`t like him.  And Steve Bannon is doing what he always does.  He is energizing this movement, and he is front and center of this movement. 

MATTHEWS:  Well, I was at a church meeting a couple weeks ago, and I can`t talk about it.  It was off the record.  But I got to tell you, there`s a lot of anger in my church, the Roman Catholic Church, about the sexual abuse of young people, not just people who are prepubescent, young boys.

It`s not just people who are below the age of puberty.  It`s abuse of their role as priests with young boys, or young women in some cases.  And it`s been covered up.  And that`s the problem.  And who -- how does Bannon connect that cover-up with liberalism?

ENGEL:  So, Bannon is focusing on this issue.  Most of the time that I spent with him, he wanted talk about the abuse scandal. 

And he says that the church isn`t handling it, that the church has been covering it up.  And that is very legitimate criticism. 

MATTHEWS:  Right. 

ENGEL:  You hear that all the time.  You have been hearing that for many, many years. 

And what people, however, who are critical of Bannon and what he`s doing is, they say, yes, this is a real crisis.  Yes, it is something that Francis is dealing with, or maybe Francis needs to deal with better, but that Bannon and others around him are weaponizing it.  They are using a legitimate issue and using it to hammer Francis because they have other issues with him, which is that he doesn`t like the populist movement, that he`s been reaching out to gay -- the gay community, that he has been reaching out to migrants, and that they -- that that is their real problem with him. 

MATTHEWS:  Well, that is a problem with him, because that`s why I like the guy. 


MATTHEWS:  Anyway, thank you.  Those are the reasons we like him.

Anyway, but thank you, Richard Engel.

ENGEL:  We didn`t even mention the monastery.  He`s also building a monastery. 

So this isn`t just a man who`s ideologically opposed.  He is putting together a huge facility on a hilltop outside of Rome.  I went to visit it.  We had filmed over it with a drone.  It is an 800-room monastery that Bannon is using some of his own personal money to refurbish.  And this is going to be the center of his -- of his movement. 

So a lot is going on here. 

MATTHEWS:  Well, all the people I know, including people who are not Catholics, not even Christians, who are Jewish people, everybody I hang out with loves Francis, because he`s a lover of people. 

Anyway, thank you so much. 

Everybody`s got to catch this, Richard`s interview Sunday night with Steve Bannon right here on MSNBC.  It`s 9:00 Eastern.  You got to watch this one. 

Up next:  The U.S. Treasury Department missing that deadline to turn over Donald Trump`s taxes sets the stage for a huge constitutional battle that could go all the way to the Supreme Court. 

Look out, Steve Mnuchin.  The secretary of treasury is -- may have to take -- well, he may have to take the hit for the president.  What`s he hiding, the president?  And can Democrats prove they have legitimate reasons?  Well, they already have one.  They got the law.  Let`s get the tax returns. 

You`re watching HARDBALL. 


MATTHEWS:  Welcome back to HARDBALL. 

Monday is the deadline for all Americans to file their tax returns to the IRS.  And that includes President Trump, whose tax returns have been in high demand.

Last week, House Ways and Means Chair Richard Neal issued a formal request for the IRS to hand over six years of the president`s personal and business tax returns. 

But the president continues to be adamant in his refusal to release them.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  Hey, I`m under audit.  But that`s up to whoever it is.  I -- from what I understand, the law is 100 percent on my side.

I`m under audit.  When you`re under audit, you don`t do it.  But I`m under audit.

While I`m under audit, I won`t do it.  If I`m not under audit, I would do it.  I had no problem with it.  But while I`m under audit, I would not get my taxes.  There`s no law whatsoever. 


MATTHEWS:  But the decision is not up to the president.  It falls on the Treasury Department. 

The U.S. tax code makes clear that: "Upon written request, the secretary of the treasury shall furnish such committee with any return or return information specified in such request."

The problem now is that Treasury Secretary Steve Mnuchin missed the committee`s Wednesday deadline to hand them -- hand over them, saying he needs more time because of the nature of the request. 

He wrote: "The committee`s request raises serious issues concerning the constitutional scope of congressional investigative authority, the legitimacy of the asserted legislative purpose and the constitutional rights of American citizens.  Well, the legal implications of this request could affect protections for all Americans against politically motivated disclosures of personal tax information, regardless of which party is in power."

Blah, blah, blah.

But the House may ultimately see those returns.  It turns out another part of the tax code could result in severe consequences for Mr. Mnuchin if he doesn`t comply with the law. 

I will tell you about that in a minute.


MATTHEWS:  Welcome back to HARDBALL. 

Amid that looming fight over President Trump`s tax returns, Treasury Secretary Steve Mnuchin could find himself caught in a more perilous situation. 

According to Daily Beast columnist David Cay Johnston, if Mnuchin or IRS Charles Rettig fail to hand over the president`s tax returns, they could find themselves in violation of a section of the U.S. tax code that could be punishable by up to five years in prison.

Section 7214 states: "Any officer or employee of the United States acting in connection with any review -- revenue law of the United States who with intent to defeat the application of any provision of this title fails to perform any of the duties of his office or employment shall be dismissed from office or discharged from employment and, upon conviction thereof, shall be fined not more than $10,000 or imprisoned not more than five years, or both."

Joining me right now is that columnist, David Cay Johnston, author of "The Making of Donald Trump," and Paul Butler, a former federal prosecutor.

Well, you found this law.  Does the government know about this law you found, David, that you can go to jail...


MATTHEWS:  ... to prison up to five if you don`t obey this rule that says answer the demand of the House Ways and Means Committee, turn over the tax returns?

JOHNSTON:  They know about it, Chris.  I have actually taught this to my law students at Syracuse University. 

But, frankly, I had forgotten about it until one of my regular tax sources suggested I go back and take a look at it.  And it`s a very comprehensive law.  I mean, you can get in trouble for not acting, as well as acting. 

And so you got to you got to worry about your future career when you leave the government, what would happen to you if you go break the law for Donald Trump.

MATTHEWS:  Well, that`s my question when I watch people like Bill Barr, William Barr, the A.G., and I look at Mnuchin, the secretary of the treasury.  These are top Cabinet officials. 

I think they`re on closed-circuit television.  The only person they think watching is Trump. 


MATTHEWS:  And they talk for him.  But, at some point, they got to deal with the Constitution, don`t they?  And when would that come? 

BUTLER:  Well, you would hope.

I think it`s clear now that the Trump playbook for dealing with this new Democratic Congress is to run out the clock.  The clock is the 2020 election.  And what the Trump team does now is delay, delay, delay.  They`re totally wrong on the law.

Trump has to hand over his tax returns.  But, if he refuses, it goes to court, to the federal courts, which could mean months and months, if not years, of delay. 

MATTHEWS:  When Mnuchin says, I`m obeying the law, he`s not saying, I`m complying with the request. 


BUTLER:  He`s not obeying the law.

MATTHEWS:  Well, stay on just Paul for a minute.

BUTLER:  So, the law is very clear. 

The law is that, if the chair of the House Ways and Means Committee or the chair of the Senate Finance Committee request tax records of any citizen, they must be turned over. 

There has never been a situation in which those records have not been turned over.  So Trump is getting special treatment.  Again, it must be good to be the king.  This is not the rule of law. 

MATTHEWS:  David, tell us what you can about -- based upon your having seen one of Trump`s tax returns for, I think, was 2005, what is he most sensitive to about people like us knowing or fellow billionaires or millionaires?

Well, who doesn`t he -- what does he want to keep secret? 

JOHNSTON:  Well, Chris, there isn`t now and there never has been any evidence, verifiable evidence, Donald is a billionaire.  He`s not a billionaire. 

That`s one thing he`s worried about.  He`s -- secondly, he`s worried that an audit will show tax cheating.  Let`s not forget, Donald was tried twice for tax fraud, civil tax fraud, and was found in both cases to have engaged in fraud.  He was excoriated by the judges in both cases.

His own tax lawyer testified against him.  His tax lawyer said, that`s my signature on the tax return, but I did not prepare that tax return.  That`s a very strong badge of fraud. 

And you notice that his sister Maryanne Trump Barry, as soon as she came under investigation by judicial authorities, because she`s a federal judge, as a tax cheat, resigned. 

Now, if you embezzle money from MSNBC, Chris, and resign, that won`t save you from law enforcement.  But guess what?  Federal judges have rigged the system for themselves.  Just resign, and you can walk away and your dirty laundry will never be exposed.

MATTHEWS:  Let`s follow this to the end, Paul.  Where does this go?  Because it seems to me, if they`re going to run out the clock, can they have enough delays from now until end of December `20?

BUTLER:  It`s possible.

Congress can ask a judge to expedite the case, if it goes that far.  But it`s unlikely that a judge would consider this an emergency.  And so if this is a political tactic by Trump to just delay release of his tax returns until after the election, he might prevail. 

There`s precedent here.  President Nixon also refused to let Congress see his tax returns.  They eventually got them.  And what did they find?  They found that the IRS had been giving him a break.


MATTHEWS:  Yes, on the presidential papers, right.

BUTLER:  Yes, but the tax lawyer for Nixon ended up going to prison. 

So there`s a treasure trove of information in Trump`s tax returns that prosecutors in Congress would love to get a look at.

MATTHEWS:  The spin coming out of Mnuchin is that somehow it`s up to the Democrats.  They have to be simon-pure.

If they have any political purpose in this to expose the president`s reality, they`re the bad guys.  The law is clear.  It doesn`t say the Congress has to be fair.  It just says the Treasury Department shall release the tax returns to the chairman of the Ways and Means Committee. 

Why does the press -- I`m sorry.  Why does the press keep talking about political purposes here?  They are irrelevant.

JOHNSTON:  Well, Chris, part of the problem with journalism in America is that most reporters simply accurately quote whatever they`re told, and then go and get the official criticisms of that. 

And they don`t read the laws.  They don`t reach out to people to say, what`s really going on here and step back?  And Donald is the master of how to take the conventions of journalism and use them for his benefit. 

MATTHEWS:  Well said.  Well said.  He pollutes it that way. 

Thank you, David Cay Johnston, for your expertise, Paul, as always, Paul Butler, expertise in the law and the Constitution.

Up next:  Joe Biden`s long road from long-shot Senate candidate back in -- believe it or not, I was there watching it -- 1972 to Democratic front- runner for president right now. 


MATTHEWS:  In the summer of 1972, I went in with some others on a beach house in Rehoboth Beach, Delaware.

On the way to the shore on hot Friday nights, I would look up at a large billboard for a Democrat running for the U.S. Senate.  It showed the young candidate who struck me as the classic sacrificial lamb, the eager beaver you run when you know the incumbent can`t be beaten.

There was no way that guy up on that billboard was going to be a U.S. senator.  And then, that fall, while I out in Utah working for a friend who was running for Congress, I got word from our pollster that something was abrew in the state of Delaware.  This young guy Joe Biden might just pull it off. 

The tip turned out to be on the mark.  Biden blew the doors off that election night, defeating a two-term Republican senator who before that served as Delaware`s governor for two terms, and before that was a three- term member of Congress for the state.  He had done it in a Republican year, when Richard Nixon was sweeping Delaware with 60 percent of the vote.

Biden did it before he had even reached the age required by the Constitution to serve as a U.S. senator.  How could he not think he was going to be president someday?

All of which is necessary information right now about Joe Biden, a man who, no sooner had he beaten the all-out odds to begin a stellar national career, suffered a horrific tragedy, the loss of his young wife and daughter in an automobile accident.  That almost destroyed his soul. 

Well, none of this is past history to the man running to make one final run for the American presidency.  It`s who Joe Biden is. 

And that`s HARDBALL for now.

"ALL IN WITH CHRIS HAYES" starts right now.