The Beat with Ari Melber, Transcript 8/1/17 Still no White House guidance on Transgender Policy

Guests: Rod Wheeler, Douglas Wigdor, Joel Benenson, Steve Schmidt, Mark Jacobson, Daniel Hoffman

Show: THE BEAT WITH ARI MELBER Date: August 1, 2017 Guest: Rod Wheeler, Douglas Wigdor, Joel Benenson, Steve Schmidt, Mark Jacobson, Daniel Hoffman

CHUCK TODD, MSNBC HOST, "MTP DAILY": This Robert Kennedy would join John Kennedy in the US Senate. No, not this former senator John Kennedy. This John Kennedy, the Republican senator from Louisiana. And guess what, again, no relation to any of the Kennedies that have been mentioned.

That`s all for tonight. THE BEAT with Ari Melber starts right now. Ari, I hope at some point we will put out a programming note to help people identify all the various Kennedies.

ARI MELBER, MSNBC HOST, THE BEAT: It`s a lot of Kennedies and names matter in politics, Chuck, as you well know. Have a good night.

TODD: Take it easy, Ari.

MELBER: Appreciate it. Donald Trump Jr.`s Russia meeting back in the news tonight for one reason. His father insisted on getting involved.

Donald Trump Jr. hired a criminal defense attorney like many officials under scrutiny in the Russia inquiry, but these new reports are revealing that when he faced the biggest legal test for his contacts with Russians offering election help, it was President Donald Trump who insisted on being criminal defense attorney in chief.

The White House confirming today President Trump did have something to do with crafting that statement on his son`s secret meeting with Russians.

"The Washington Post" reporting that the president personally dictated it. Lawmakers on both sides now demanding answers and the White House`s answer so far is that the president`s past denials either weren`t totally true or weren`t the whole story because the president did weigh-in like "any father would."

(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The statement that Don Jr. issued is true. There`s no inaccuracy in the statement. He certainly didn`t dictate, but he - like I said, he weighed in, offered suggestion like any father would do.

The president didn`t have knowledge of this story. The White House didn`t have any involvement in the story.

(END VIDEO CLIP)

But multiple sources are telling "The Washington Post" in that story that he did dictate. Trump personally dictated statement, in which Trump Jr. said that he and the Russian lawyer had primarily discussed a program about the adoption of Russian children when they met in June 2016.

And the president`s lawyer whose last statement on all this is undermined by the White House today, offered this rebuttal, "apart from being of no consequence, the characterizations are misinformed, inaccurate and not pertinent."

Let`s deal with this. There is plenty of debate over the exact accuracy of these reports and President Trump is certainly entitled to explain why he thought it was constructive to guide the description of a meeting that he did not attend and that the White House claims he knows almost nothing about.

But his lawyers` new claim today that this is not pertinent is just silly. The White House is doing damage control once again because the meeting with the Russians, promising election help, is not only pertinent, it is the possible element of a crime.

Now, in a moment, we`re going to get into all of that with former Watergate prosecutor and a former advisor to the Trump campaign. Stay with me, gentlemen.

But first, I want to speak with a major expert to break all this down. Justin Levitt is an election law expert. He`s prosecuted civil rights cases as deputy assistant attorney general for the United States Justice Department.

Appreciate you being here. And my question to you first is, do prosecutors care if someone recommends a potential witness offers misleading answers like this, even if out-of-court.

JUSTIN LEVITT, FORMER DEPUTY ASSISTANT ATTORNEY: So, sometimes they do very much care. It`s actually a separate federal crime to willingly mislead a law enforcement agent or to willingly mislead others, so as to delay information getting to a law enforcement agent.

Generally, when the FBI or when the Department of Justice or when other law enforcement agents come calling, they want the truth and they want it straightforward.

And so, yes, it`s not a good idea to dissemble when there`s a federal investigation going on into some underlying conduct, people called into question.

What do you mean by dissemble? Well, the words of the statement that were offered, whether with or without the president`s help, attempted to say that the primary subject of meeting was adoption and that it had nothing to do with the campaign issue.

We know since then it`s come out that - if adoption was discussed, it certainly wasn`t the only item on the agenda and that the reason for the meeting was in many ways to find out about a very live campaign issue.

And whether that`s technically a lie or not, what people will focus on is whether this was meant to mislead those who were investigating further.

MELBER: Right. And as you point out, the purpose of the meeting was not to discuss adoption.

If Donald Trump was doing what the White House says is what any father would do, which is a debate that fathers across America can simply have tonight, what is the purpose of coaching someone on something that you proclaim you literally know nothing about?

LEVITT: Well, it`s been very clear that the president likes to manage and likes to manage a lot of affairs down to very small details. Whether he is the best manager in those circumstances is, I think, really open to question.

And his apparent attempt to influence what the public learned and what the press learned could well have been an attempt to divert attention from the real point of the meeting, the really important bit.

I also want to point out by the way that these reports that have come out about President Trump`s involvement not only implicate President Trump, but show that there are sources inside the White House who want very much not to implicate themselves.

That is, there are people who are running scared on the other side of this, and that`s important to remember as well.

MELBER: That`s a fascinating point that you raise here at the end, that the leaks are coming from people in a position to know that "The Washington Post" has verified, who are in the inner circle, some of whom may be even current White House officials.

Justin Levitt, I appreciate your expertise and your precision. A very welcome way to start off our broadcast.

I want to get right to what was promised. Nick Akerman, a former assistant special Watergate prosecutor; Barry Bennett, co-founder of Avenue Strategies, and you may recognize him as a former senior advisor to the Trump campaign during many busy periods.

Barry, you look at this, is Donald Trump the president helping or hurting his son?

BARRY BENNETT, CO-FOUNDER, AVENUE STRATEGIES, AND FORMER SENIOR ADVISOR TO THE TRUMP CAMPAIGN: Well, I think he thought he was helping, but I don`t think he helped.

Then again, where was the senior staff in the room saying, Mr. President, you shouldn`t do this, let`s call the attorneys. That`s one thing I`m very excited about. Gen. Kelly now being on the scene.

There`s been far too much of this, far too many people answering questions they really didn`t know the answer to on the record, which was a mistake. Far too many amateur mistakes. And I hope Gen. Kelly to fix that.

MELBER: Very interesting to hear you say that you don`t think it was helpful because the White House line, as you know today, is that this was still just the fatherly role.

I want to play for you because you know - go ahead, sorry.

BENNETT: I agree that it was the fatherly role and he was trying to be helpful. But, I mean, again, we we`re still talking about this because we still haven`t got all the facts out about this.

This is, what, day five or six of this story. This is not helpful.

MELBER: And, Barry, I want to play for Donald Trump himself on this because there is this idea that we hear about staffing and then there`s the idea of what does the commander-in-chief think is important.

And there was a very odd exchange in his "New York Times" interview where he went back to the adoption issue. This new "Post" report puts it in a different light. Take a listen.

(BEGIN VIDEO CLIP)

DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES: He was very interesting. We talked about adoption.

MAGGIE HABERMAN, REPORTER, "THE NEW YORK TIMES": You did?

TRUMP: Russian adoption, yes. I always found that interesting because, you know, he ended that years ago. And I actually talked about Russian adoption with him, which is interesting, because that was part of the conversation that Don had in that meeting.

(END VIDEO CLIP)

MELBER: As you may recall, his defense of the meetings with Putin involve looping in the very controversial Russia meeting, which at the time was very hard to understand even for deep Trumpologists, like Maggie Haberman at "The Times".

Now, with this new report, Barry, walk us through your thinking, but it looks like this is further indication that the president thinks the adoption thing is some kind of get out of jail free card.

BENNETT: Well, I mean, what`s clear is this Russian woman, the lawyer, assuming she`s a lawyer, I don`t really know, but her entire purpose in life is to try to get this oligarch out of sanctions. And she uses Russian adoption as a carrot to try to accomplish that.

Now, she hasn`t been successful. I mean, she told a bunch of fibs in order to get a meeting, but the meeting was about trying to help this oligarch, which is what she wanted and didn`t happen.

MELBER: Nick?

NICK AKERMAN, FORMER ASSISTANT SPECIAL WATERGATE PROSECUTOR: This meeting was nothing more than just part of Donald Trump orchestrating his plot to obstruct justice.

You can`t look at this just in terms of the meeting - of what Donald Trump Jr. statement was. You also have to look at it - you have to look at it in terms of what also Jared Kushner said.

If you take both of those statements and put those together, you can see that one person very surgically mapped out a story that took both of them out of the soup.

And that is absolutely what happened here. Donald Jr. said, oh, it was just about adoption and nothing happened afterwards. And then you`ve got Kushner - Jared Kushner saying, oh, I came into the meeting late, so I didn`t hear anything that was incriminating that was said. And, oh, by the way, I left early, so I didn`t really know what was going on.

What you have here is somebody atop, it`s not the lawyers, it`s Donald Trump, who is basically orchestrating this entire plot.

MELBER: I want to be clear on what you`re alleging and then I`m going to go back to Barry for response. You`re saying - you`re alleging that this type of public misleading was actually designed to ultimately interfere with an ongoing proceeding?

ACKERMAN: Absolutely. Because all of these people have now appeared before Senate committees, they`ve appeared before congressional committees.

One would expect that Mueller is going to ask them whether or not what they said in their statement was true. And I guarantee you, they all will say that the statement was true and they`ll go by that statement.

In fact, if you look at Jared Kushner`s statement that was a written statement provided to the Senate committee, it pretty much parroted the same thing that we knew all along, but all of it is very surgically designed to obstruct this investigation and to keep both of these individuals out of the soup, including Donald Trump.

MELBER: Barry?

BENNETT: On a scale of 1 to 10, that`s pretty bad crap crazy. I mean, he knows the frame of mind of everybody involved, which is pretty amazing.

I don`t know if he`s using some kind of psychic friends network or how does he gets that information. That`s just crazy. I mean, it`s not even worthy of a discussion.

ACKERMAN: It is worth discussing because -

BENNETT: No, no, it`s not a discussion. It`s a crazy (INAUDIBLE).

ACKERMAN: Donald Trump specifically said that he got rid of Comey because he wanted to stop the Russian investigation. He admitted to Lester Holt on national TV. He also aired it to the Russian ambassador in the Oval Office.

If ever there was corrupt intent to try and stop this investigation, you`ve got it in spades here. You also have Donald Trump trying to force out his attorney general because he wants to put in a puppet, so he can get rid of Mueller.

What he knows is, by setting up these phony stories that he put together, that he`s putting both of these individuals, both of his relatives at risk, because ultimately he doesn`t know all the evidence. All of this evidence is going to come out and it`s going contradict those statements, so time is not on his side. And that is why Donald Trump is razor focused to try and get rid of Mueller as quickly as possible.

MELBER: Barry, final thoughts from you. And you know Donald Trump. You worked directly for him in the campaign. You have heard him speak publicly about Russia in all of this, and that was part of the changes he said he wanted to make at the FBI.

BENNETT: Listen, these people that are speculating that know the facts that Mueller doesn`t know or they know what was in Donald Trump`s mind or Donald Jr.`s mind, that`s just crazy.

I mean, you`re not helping your own cause here. You`re just being crazy. You can`t do that. Please. Let`s stick to the facts. Speculation is fine, but crazy summation is not.

MELBER: Barry Bennett and Nick Akerman, I appreciate you both talk with me and talking to each other and we will stay on the facts. Appreciate it.

Still ahead, this explosive lawsuit makes a claim that the White House was involved in a now-retracted and false Fox News story about a horrific incident, the murder of a DNC staffer, and it includes claims that are reverberating everywhere tonight.

The allegation, President Trump personally advance reviewed the Fox News story. We have a live interview here in studio with the plaintiff and his lawyer in this case on THE BEAT tonight. So, stay tuned.

And, first, we will break down Jared Kushner`s new off-the-record defense about why the Trump campaign couldn`t even have possibly colluded with the Russians. Steve Schmidt is also here for his debut on THE BEAT.

And later, big news about how key parts of the government may be ignoring claims that Donald Trump says about what the government should do, where else, on Twitter?

I`m Ari Melber and you`re watching THE BEAT on MSNBC. We`ll be right back.

(COMMERCIAL BREAK)

MELBER: There`s a saying that generals tend to fight the last war, applying old lessons instead of adapting to the next challenge. But in the Trump White House, new challenges tend to be about the last war. Like the president`s war with his own aides about Russia or his war with himself on whether to tweet or not to tweet.

And if the Trump White House was hoping to get a reset with his chief of staff, the president`s own actions and tweets have put Russia back on the front burner. That`s the challenge that Chief of Staff Kelly faces now, day two, with these new reports that Trump dictated his son`s misleading depiction of a Russia meeting.

And signs of while Kelly did swiftly dispatch Trump`s mini-me Anthony Scaramucci, dispatching the original Trump may be harder.

Associates of Kelly doubt he would approve the new Trump tweets about fake news, among other things, nor do Kelly`s careful public remarks match the Hail Mary that Jared Kushner just threw out on Russia, arguing the Trump campaign could not have colluded with Russia because they couldn`t pull off a sophisticated crime.

"Foreign Policy Magazine" detailing that Kushner told an audience of interns the Trump team was too disorganized to collude with Russia. That`s one reason not to do it.

Now, if you are keeping track, the White House defense on this has gone from I didn`t do it to if I did it, it`s not a crime to now I couldn`t do it because it was too hard.

Steve Schmidt served as a longtime Republican strategist, including advising the 2008 McCain. Karine Jean-Pierre is the spokesperson and senior advisor at MoveOn.Org. Welcome to you both.

Steve, walk us through this general, who he is, who Donald Trump is, and whether the circle can be squared.

STEVE SCHMIDT, FORMER REPUBLICAN STRATEGIST AND MSNBC POLITICAL ANALYST: He is a remarkable public servant, a four-star Marine officer, spent his career in the United States Marine Corps, whose motto is honor, courage, commitment.

He lost his son, killed in action. He gave one of the most remarkable speeches that an American will have heard in the 21st century four days after his son was killed in action at the American Legion.

And he offers a vision and a conception in this remarkable speech that`s so opposite Trumpism.

And when you look at Gen. Kelly`s life, his virtues and the virtues that he stands for, the character that he is, it is so oppositional to who Donald Trump is and to what Trumpism stands for.

And as this comes into contact, this man`s character with Donald Trump`s character, we see it today. President of the United States, as we find out, dictates the statement, purposefully lying, assaulting truth -

MELBER: You think the president was lying in what he asked his son to say about the meeting.

SCHMIDT: Clearly. The statement was designed purposefully and premeditatedly to mislead the American people. It is not a truthful statement. We know that.

And what we see is the non-stop lying in this White House. Here`s why it matters. In a democracy, when truth is under assault, liberty is threatened. Liberty requires truth. Freedom requires truth. Like we require air and water.

And so, we`ve never seen a level of purposeful lying like we`ve seen in this White House. And so, now, as we`re on this hour, as the details begin to become clear on this Seth Rich issue, what happened?

Is it possible that the president of the United States was involved in the planting of, in the dissemination and collusion with a news network, a fake story to distract from this investigation that was purposefully, premeditatedly devastating to a tragic death of a young man to his family and his parents? Is that possible?

MELBER: Right. The allegation that you`re talking about, a slander built on a murder, is what you`re talking about.

SCHMIDT: And so, Gen. Kelly`s chief mission, of course, is to clean up this White House staff, which seems to function like the Jersey Shore cast at its moments of peak idiocy.

But his real fundamental challenge here has to be to stop the lying because it is a threat to the country and it is against everything he stands for.

MELBER: Let me bring in Karine. A, serious case made by Steve Schmidt that there is a constitutional foundational issue with the repeat mendacity coming out of the White House, and this being a claim made here by a Republican, we should note.

B, Karine, an analogy to the Jersey Shore, except instead of GLT - gym, laundry, tan - maybe it`s GLT - gym, laundry, tweet.

But your view of both those issues and the contrast to Gen. Kelly.

KARINE JEANPIERRE, SENIOR ADVISOR AND NATIONAL SPOKESPERSON, MOVEON.ORG: Look, I totally agree with Steve.

I think John Kelly has clearly a distinguished career. But he`s going to have a hard time. Donald Trump is a 71-year-old man. He`s not going to change. He wants to tweet, lie and spin his way out of political messes, out of legal messes.

And it`s one thing when you`re trying to spin your second divorce to a New York tabloid. It`s a whole different thing when you`re trying to run a government, a federal government.

So, I think he`s going to have a tough time.

And let`s not forget, there was a long line of people before John Kelly who have tried to change Donald Trump and failed. Look how many chiefs of staff he`s had in just six months. Look how many campaign managers he had during his campaign.

It is a tough job. And I just don`t think he`s going to be able to do it.

MELBER: And, Karine, you make a point, I think, that dovetails with what Steve is saying, which is a lot of people removed are the communicators.

He may not be as interested in policy, so the undersecretary spots don`t even get filled once, let alone filled, removed and refilled. The communicators keep getting ousted.

Take a listen, Steve, for your response, to a Republican Congressman here saying, one way to fix this problem is to fire the kids.

(BEGIN VIDEO CLIP)

REP. BILL FLORES (R), TEXAS: I`m going out on a limb here, but I would say I think it would be in the president`s best interest if he removed all of his children from the White House, not only Donald Trump, but Ivanka and Jared Kushner.

(END VIDEO CLIP)

SCHMIDT: Of course. This is why we have nepotism laws. This isn`t normal.

JEAN-PIERRE: Exactly.

SCHMIDT: Look, it`s important to understand that we keep sight of normal. It`s like being out on the ocean. And we`re moving past the point where the land is visible. That land, for purposes of this metaphors, is what`s normal in our politics.

The president`s daughter shouldn`t be sitting at a table with head of states at the G20 Summit. It`s grotesquely inappropriate.

The president`s son-in-law, who is 34 years old, a capable young man, but he`s in charge of Middle East peace, he`s in charge of the opioid epidemic in the country because, why, he`s an expert in these things?

This America is the oldest constitutional republic in the world. It`s not a family business. And Gen. Kelly, if he`s going to be successful, is going to have to restore normalcy, which means the kids are out of there, and they are out of there pretty soon.

MELBER: Karine, final thoughts.

JEAN-PIERRE: Yes. I just wanted to add there, look, Ivanka and Jared spun this whole story on day one that they were going to be the moderating force for Donald Trump, that they were going to help manage their father-in-law and their father, but what it turns out to be is a big old farce.

They`ve become enablers, especially to his worst - Trump`s worst instincts. Example, Comey firing. That was a Jared thing.

But the problem is that he`s never going to fire his family and it`s going to be really tough for John Kelly. And I just don`t see that happening. And until they stay there - as long as they stay there, it`s going to continue to be dysfunctional.

MELBER: And, Karine, you put your finger on why the laws were passed in the first place. It`s not because you shouldn`t love your family. It`s because the Congress felt it was improbable to ask a president to choose between country and family. So, if those interests collide, it was an improbable situation.

Donald Trump found a loophole for that by avoiding cabinet appointments and putting them in the White House. And now, we`re all living on that type of -

Steve Schmidt, I want you to stick around. There is something else I want to ask you about. Karine Jean-Pierre, thanks for joining THE BEAT. I hope you`ll come back.

JEAN-PIERRE: Absolutely. Thank you, Ari.

MELBER: A new lawsuit alleging "Fox News" concocting a false story and that President Trump was personally involved. That`s the allegation. The plaintiff is here for a cable news exclusive.

Stay with THE BEAT on MSNBC.

(COMMERCIAL BREAK)

MELBER: A detective who worked on researching an explosive " Fox News" story is today taking the channel to court. Alleging they defamed him in a deliberate effort to help Donald Trump deny Russia was behind the election hack.

Now, all these at this point are just claims. They need to be proven. He says he has evidence, including texts and voicemails.

But first, the context. DNC staffer Seth Rich was murdered in July 2016. Police say it was likely from a botched robbery.

In May, though, "Fox News" touted a supposed break in the case. What you`re about to see is a story they have not proven, which fell apart after airing and which "Fox" has partially retracted.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Another "Fox News" alert. A huge bombshell in the murder of this DNC staffer.

UNIDENTIFIED MALE: An investigator now says Seth Rich was in contact with WikiLeaks before he was murdered.

UNIDENTIFIED MALE: So, if that is true, and we don`t know yet, looks like Russia didn`t give it to WikiLeaks.

UNIDENTIFIED MALE: So, it was Seth Rich perhaps.

(END VIDEO CLIP)

MELBER: Perhaps. "Fox News" claiming maybe Russia didn`t do the hacking, which would undermine the felony at the heart of Mueller`s investigation and perhaps exonerate President Trump.

But they didn`t have evidence for that bizarre claim. And this lawsuit drives another nail in that coffin because the investigator, who we`re about to hear from, who worked on the case, says "Fox News" made up the few false quotes they had for this story, alleging Wheeler`s reputation destroyed by defendant`s decision to defame him.

And that`s not all. Wheeler also says the White House was in on all this and he has the evidence to prove it. Wheeler saying a key volunteer "Fox" investigator left him a voicemail saying, "we have the full attention of the White House on this; tomorrow, let`s close this deal, whatever we`ve got to do."

And texting "Not to add any more pressure, but the president just read the article. He wants the article out immediately. It`s now all up to you"

Wheeler argues that was true and the White House was involved in the retracted story. But if this was not true, well, that would help the White House but not Fox News if their volunteer investigator was lying while teeing up this story or if the investor in all of this was lie, but that is one side of the case. Fox is fighting this case today and denying all of these allegations saying, "the accusation that foxnews.com published a story to help detract from coverage of Russia collusion is erroneous. The retraction of the story is still being investigated internally and we have no evidence that Rod Wheeler was misquoted." And the White House said this today.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Did the president know about the story pre-publication and did he have an influence on the way that the story was written?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The President had no knowledge of the story and it`s completely untrue that he or the White House involvement in this story.

(END VIDEO CLIP)

MELBER: I want to be clear with you as we proceed. There`s two sides to this story. We hear at THE BEAT have invited the White House on this show to elaborate an open invitation this week. Tonight we have another side of this story. Rod Wheeler, the plaintiff in the case and Douglas Wigdor, Rod Wheeler`s Attorney. Rod, what are you claiming and when did this entire incident change for you because initially, you were voluntarily involved?

ROD WHEELER, FOX NEWS LAWSUIT PLAINTIFF: That`s right. Well, I was asked to get involved in conducting an investigation, a murder investigation of Seth Rich. And that`s why I got involved so I could try to find out who killed this guy. During the course of my investigation, there was a lot of things that came up. There was a lot of suspicious information that I was learning as far as possible even the DNC being involved to some degree. I don`t know. But what I decided to do was to you know, take all the information I got and give it to Police Department like you should do in any case and go from there. But half way through the investigation and then up until the point in which this article was released by Fox, there were these quotes in there from me supposedly saying that I knew for a fact that Seth Rich, the deseeded had been in contact with WikiLeaks e-mailing them e-mails. Well, that was not true.

MELBER: Let`s pause, let`s pause. Fox News reporting you as the source linking the DNC staffer to this hacking. You`re saying at time that was false.

WHEELER: Right. The reporter from Fox News, Malia Zimmerman, she wrote that story. I immediately challenged her and I said, Malia, that`s just simply not true. You and I both know this isn`t true and she said, well, her boss has told her to leave those quotes in there. And I say why would you leave something in an article that you know is not true? And that`s why we`re here today.

MELBER: Why do you think as you alleged they made quotes from you?

WHEELER: Well, I think - I know for a fact that Ed Butowsky who was the individual that was funding my investigation, he had been in contact with people from the White House and he was the one that was pushing this Russian hacking narrative by the way I didn`t know a whole lot about because I wasn`t yo know, trying to debunk a narrative or support a narrative, I was trying to find the murderer. I do know that and Ed even admitted himself. And then I think the bottom line with all of this Ari, is that fact that the reporter, herself, from Fox News, she even admitted that she lied and put those quotes in there. I mean, she admitted that but at the same time to this day they have not retracted that. As a result of those quotes and her story, it`s done damage my credibility and my integrity.

MELBER: Let`s look at Fox News when you did go on with Hannity.

(BEGIN VIDEO CLIP)

WHEELER: There was a federal investigator that was involved on the inside of the case, a person that`s very credible. He said he laid eyes on the computer and he laid eyes on the case file. When you look at that with the totality of everything else that I found in this case, it`s very consistent for a person with my experience to begin to think, well perhaps there were some e-mail communications between Seth and WikiLeaks.

MELBER: If you were so concerned at the time, why did you go on Fox News and make that claim?

WHEELER: Well, I think that claim was true. Think about it. If this investigator, this FBI investigator that was developed by the Fox News person, if that person, what they are saying is true coupled with everything else that I had been finding in my investigation then any investigator would say to themselves well, maybe his death was a result of something related to his job.

MELBER: So you`re saying - I just want to be clear - you`re saying at that moment you were telling the truth because you were lying on misinformation. So in your mind it -

WHEELER: Exactly.

MELBER: When did you change your mind?

WHEELER: Well, I never actually changed my mind. See, I never backtracked anything because I actually never made those statements, those quotes in the first place. The day after that story was released is immediately I confirmed that reporter and I told her you need to take these things out of article. She never did that.

DOUGLAS WIGDOR, ROD WEELER`S LAWYER: So, I mean, really, the difference between what you just played and what was in the May 16th article is that in the clip, he`s talking about a source that allegedly existed. We don`t even know if the source existed. This is what Ed Butowsky and Malia Zimmerman said. When they did the May 16th article, they attributed everything to Rod having seen these e-mails. And he never sees the e- mails. And as he said, both Malia Zimmerman and Ed Butowsky both admitted that these quotes weren`t right. In fact, Ed Butowsky said, you know what, these are words that you never said but you`re going to win an award for having said them -

MELBER: Right. I mean, the best - the best legal defamation point here is whatever happened, we`re now at place where everyone including Fox News said part of this was wrong. Then you have the other part of your complaint which is this documentary evidence and text that the President of the United States was personally involved in reviewing this story before it was published and pushing it out. When did you learn about that and why do you believe that to be the case?

WHEELER: Right. I learned about that from Ed Butowsky. Ed Butowsky, he is the one that sent me an e-mail, which I you know, have shown. And I mean, I saw the e-mails and have shown them and voice mails where he said the President has reviewed the story. This is the story that the reporter was going to release. This is before the story was released. This is what he sent to me. The President has reviewed this story and wants it out there.

MELBER: Wow. So, hold on.

WHEELER: Now, this comes from Ed Butowsky.

MELBER: What did you think when you got that text?

WHEELER: Well, first of all, I`m thinking why would the President have to review a story pertaining to a death - to a murder of a guy in D.C.? Why would the President even be involved in this? But at that point, Ari, it was obvious to me that they actually lured me into this investigation. They meaning, this Fox News Reporter and Ed Butowsky to substantiate this Russia Narrative thing or to debunk that when in fact they told me that I was really getting involved just to solve a murder. All I want them to do is correct the record.

MELBER: Right. Your - I mean, this is why this is a weird one but you have some texts here that make it more than a theory. Your argument is that they pulled you in to use you in part of this investigation and that Fox News and the White House were advanced planning it. And I want to read from one of the e-mails that you have in your complaint basically showing the plan in advance. "One of the big conclusions that the Fox volunteer here said, we need to draw from this is that the Russians did not hack our computer systems and steal e-mails and there was no collusion like Trump with the Russians." Why is that important and what did you think then if you learn that that was part of the goal not solving the murder?

WHEELER: Why would they have me then be investigating this thing as a murder when in fact, their alternative motive was to debunk a Russian hacking narrative which was you know, which was unfair to me because as a result of that story, like I said, it killed my credibility. It made it seem like I was backtracking on something. But if you think about it, I never backtracked because I never said those quotes.

MELBER: And Douglas, I want to ask you a question with the time we have.

WIGDOR: Sure.

MELBER: The arguments just made will be tested in court for their veracity based on whether they were lying to you, lying to the public and whether that meets a defamation standard. You also though, in this complain have these explosive allegations about the White House. You don`t need those to win your case thought, do you? Why are they this there?

WIGDOR: We don`t need them but it`s the backdrop for why they defamed Rod. And you know, it`s really interesting because you read the statement by Fox. They say that our claims are erroneous but then they go on to say that they`re still investigating it. So how can they conclude they`re erroneous if they are still going through an investigation? You know, we`re going to take discovery in this case. We`re going to see the e-mails or texts or phone calls or visits to the White House between Ed Butowsky and President Trump and other people in the White House and we`re going to get even more information in this case. And what`s really amazing, last point is that the general counsel of 21st Century Fox Gerson A. Zweifach was in England trying to convince the regulators in England that they should be able to purchase Sky and that they met the broadcasting standards by implementing new policies the day before this article came out.

MELBER: Rod, final question. Is there anything you want to say to President Trump who is named in your suit with regard to reviewing this article and number two, anything you want to say to Mr. Rich`s family?

WHEELER: Well, you know, I`ve already expressed my apologies to the Rich family that this thing even went in the direction that it did. And the only thing I would say to the President and to the Democratic Party is to butt out of police investigations and let the Police Department conduct their own homicide investigations because I don`t think we would be here today if the DNC would not have been involved to some degree with this investigation with the D.C. Police Department.

MELBER: How was the DNC involved with the Police Department?

WHEELER: Well, you know, I said before on a Fox show that when - during my investigation when I first reached out to the Police Department, Donna Brazile was the one they contacted the Rich family wanting to know why I was snooping around. Why would Donna Brazile even be involved in the situation if this was just a street murder? So I do think the DNC needs to butt out of this police investigation and Ed Butowsky and the Republican Party as well. You know, I don`t know for a fact Ari, I know that we don`t have much time. I don`t know for a fact that President Trump even knew about all of these things going on, but if I was to base it off of what Ed Butowsky said, then I would say, yes he did. I don`t know that for a fact but I think politicians need to butt out of police work and let cops do their jobs.

MELBER: Rod Wheeler, thank you for taking some time to explain your case and Douglas Wigdor your attorney. I appreciate you both. We were going to stay on this important story as we look at the angle regarding these allegations regarding President Trump and new reports he might be hiring a very senior Fox News Executive forced out during the Roger Ailes scandal.

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(BEGIN VIDEO CLIP)

WHEELER: Ed Butowsky, he is the one that sent me an e-mail, which I you know, have shown. And I mean, I saw the e-mails and I have shown them and voice mails where he said the President has reviewed the story. This is the story that the reporter was going to release. This is before the story was released. This is what he sent to me. The president has reviewed this story and wants it out there.

First of all, I`m thinking, why would the President have to review a story pertaining to a death - to a murder of a guy in D.C.? Why would the President even be involved?

(END VIDEO CLIP)

MELBER: That was Rod Wheeler moments ago on our show talking about his suit against Fox News. Steve Schmidt and Joel Benenson here, from the left and right. Joel, the significance of the allegation that the President was reviewing Fox News articles about murdered DNC staffers in advance.

JOEL BENENSON, CHIEF STRATEGIST FOR HILLARY CLINTON: Well, look, I think there`s a lot we have to learn about this Ari, but what`s remarkable is that this is incredible that the President sitting in the White House would engage in something like this. And what`s happened over the last six months and the way this President and his administration has behaved makes it completely plausible. And their pattern of continually denying and dodging on the outrageous things they`ve done including the other day just yesterday, whether the President been in fact massaged the statement from Donald Trump Junior regarding his meeting with the Russian, the fact we`re sitting here and debating this is critical is shocking and it`s dangerous for our country.

MELBER: And Steve, I want to play you some sound from Sean Hannity who we know Anthony Scaramucci was upset about leaks with Hannity and Bill Shine, a former Fox Executive were meeting with President Trump. The Times reporting today, he may hire Bill Shine. Here is Sean Hannity pushing this story.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS HOST: Also tonight, another massive breaking news story. Explosive developments in the mysterious murder of former DNC staffer, Seth Rich, that could completely shatter the narrative that in fact WikiLeaks was working with the Russians or there was collusion between the Trump campaign and the Russians.

(END VIDEO CLIP)

MELBER: Steve?

STEVE SCHMIDT, REPUBLICAN STRATEGIST: Well, if the allegations made the lawsuit turn out to be sure it will - it will likely in my view be the largest journalism scandal of our - of our generation involving the President of the United States, the dissemination of propaganda, the subordination of the editorial judgment of the news network, really functioning like state TV taking dictation from the President of the United States and not to mention to the family. And I just think about this through prism of apparent the extraordinary cruelty towards the parents of Mr. Rich just extraordinary and chilling to think about.

MELBER: Right. Because this was built on a young man`s murder, an unsolved murder, we should mention. And Joel, I want to reiterate what we said in our set up to this story in the last block. This is one side of the case. We`ve invited the White House on and they have denied aspects of this. As for Mr. Butowski, the figure sort of caught in between, I want to read, he - reporting from NPR today says he never actually shared drafts of the story with Trump or his aides and to explain the claim that he did, he says he was joking. But nothing in the text - and I reviewed the entire complaint today suggest any bonhomie or emojis or anything likely at, so this is their best explanation after prep and it`s weak one I got to say.

BENENSON: And think about the fact that they`re not refuting the notion that he was meeting with Sean Spicer in the White House that`s confirmed. It is confirmed. Like those pieces of the puzzle fit together in way that is not very good for Mr. Butowsky or the folks in the White House.

SCHMIDT: Look, what we - what we know is that every instance where a piece of news like this has come forward the White House has prevaricated about it. They have not been truthful. The story unravels. There`s certainly no one has claimed to be you know, any type of master criminal there. What`s interesting about the White House lies is there are little kid lies. Like little kid with the cupcake all over his face, right? Hey, did you eat the cup cake? No, (INAUDIBLE) icing all over them. Of course, he did. The point is this unravels so quickly, so easily. And I - and we`re going to get to the truth. What has been a constant every time the White House lies about something, then a couple of days more information comes forward that exposes the lie, invalidates the accusation.

MELBER: Steve Schmidt and Joel Benenson on a busy day. Thank you for joining. I want to turn in to another important policy issue. There are only eight days left now for President Trump to sign that Russia Sanctions Bill. What is the weight? We turn now to Democratic Senator Jeff Merkley of Oregon on the Senate Foreign Relations Committee. Senator, I want to ask you about Russia. If you have any comment on this other story, I`ll give you an opportunity on that as well.

SEN. JEFF MERKEY (D) OREGON: Well, Ari, good to be with you and congratulations on your new program.

MELBER: Thank you.

MERKLEY: I do think that we are looking at a situation where the President doesn`t want to sign this legislation. He came into office wanting to get rid of the sanctions. His team had conversations with the Russians about getting rid of the sanctions. It`s been place where Democrats and Republicans together have felt that that is absolutely, totally unacceptable because of Crimea, because of Ukraine, because of the hacking of our election.

MELBER: And then, you look at that in the backdrop of Jared Kushner`s new comments made to Congressional interns, hardworking young people that I know you interact with. And it`s all great to have those conversations but he - I guess made some news saying quote, people thought we colluded but we couldn`t even collude with our local offices. How do you view that from a Russia investigative standpoint as a possible defense?

MERKLEY: Well, not very strong. I must say we`ve learned more and more. I mean, when you had that meeting that included a fixer close to Putin, a Russian attorney close to the Russian Secret Service, the son`s - President`s son, son-in-law, the Head of his campaign, the President`s campaign. When you had that collective group meetings specifically to discuss how to sabotage Hillary Clinton`s campaign, you know that there were conversations before that and conversations after that. We`re going to learn a lot more. There`s nothing about the kind of the small amount of defense put forward that are almost immediately found to be - to be false.

MELBER: And if the President does use the next week or so to sign the sanctions bill, in your view, as a supporter of the policy, what message are you sending as a Congress to Russia?

MERKLEY: Well, I can tell you that the President is sending the message that he`s doing this very reluctantly if he signs it at the end. And that`s not the message he should be sending. He should be sending the message that we are - he is going to be a watch dog for America not a lap dog for Putin, that the Russian interference in our campaign was completely 100 percent unacceptable. If it ever happens again in any form, there will be significant retaliation, that certainly we stand firm behind our position regarding the Crimea and Ukraine. That the message. We need the President to stand up and be strong about Russia instead of being Putin`s lap dog.

MELBER: Strong words. Senator Jeff Merkley, thanks you for your time today.

MERKLEY: You`re welcome. Thank you.

MELBER: A new story up next. The federal government finding a reason to ignore orders from the President because they`re not orders. We will explain, that`s next.

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MELBER: If the President tweets a policy and the federal government ignores it, did the tweet make a sound? President Trump making waves when he purported to announce that transgender ban, many in Congress greeted the Presidential statement as a new policy. But then the Pentagon announced the military policy was not going to be changed by a tweet even a Presidential tweet. "There will be no modifications to the current policy until the President`s direction has been received by the Secretary of Defense and so far the White House has not practiced what it tweeted. We can tell you tonight, NBC`s Pentagon Reporter Courtney Kube, noting the guidance has not yet materialized and the Pentagon`s approach here of calling the President`s bluff may be spreading. Consider this other announcement from the President, the dramatic guidance that might be interpreted as either an order or as theater.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I said, please don`t be too nice. Like when you guys put somebody in the car and you`re protecting their head? You know, the way you put your hand? Like don`t hit their head and they`ve just killed somebody, don`t hit their head? I said you can take the hand away, OK?

(END VIDEO CLIP)

MELBER: You can take the hand away. But in response, the current DEA Head said a memo to staff around the world saying DEA agents would not be following that as guidance writing, "I write because I have an obligation to speak out when something is wrong." Joining me now is Mark Jacobson, a former Senior Adviser to Secretary of Defense Ash Carter as well as Daniel Hoffman, a former Chief of Station at the CIA. Mark, obviously the chain of command is important. No one is suggesting defying lawful orders but the Pentagon wants to be clear, I suppose here, about what is an order?

MARK JACOBSON, FORMER SENIOR ADVISOR TO SECRETARY OF DEFENCE ASH CARTER: Absolutely. Ambiguity is not good when it comes to the military. And you have a President who`s not only being unhelpful and unwise but has gone out there saying that, well, you know, it`s okay to kill terrorists` families. It`s OK to maybe abuse a prisoner in custody. And then said well, it`s a joke. I`m not really committed to that idea. So I think General Dunford is absolutely clear that he wants to make sure what the policy is. And plus this would be difficult to implement and it`s not even clear if it`s legal. So kudos to the Pentagon for checking the President and making sure that the White House means what they say they mean.

MELBER: Daniel, are we witnessing sort of an improvisation of how agencies respond to a different President and is that a good thing?

DANIEL HOFFMAN, FORMER CIA CHIEF OF STATION: Well, I can tell you that in my experience of serving in the government for over 30 years, deploying with U.S. military to war zones, serving in Embassies with other agencies including State Department and FBI, that when the Secretary of Defense or the Director of CIA or the President, the Ambassador, gave a speech, that was considered Commander`s Intent and that was the approach that we were going to take and it was the mission we were going to try to achieve and we took those words very seriously.

MELBER: Meaning what? I don`t follow what you`re saying. Are you saying then that this is a bad thing because we`re departing from that intent tradition or you`re saying that this is a President who doesn`t live up to that standard so this is a good way to deal with it?

HOFFMAN: Well, what I`m simply saying is that`s the experience that I`ve had serving in the U.S. government. And that`s really what I think most U.S. government employees are conditioned to expect which is a Commander`s Statement of Intent from your superior whether all the way up to the President. And it`s clear Commander`s Intent which we would follow and if there`s something that`s questionable about it, then we would follow up with some questions afterward to receive some clarifications before proceeding.

MELBER: Sure. So Mr. Hoffman, should the military then begin implementing the transgender ban as intent?

HOFFMAN: Well, I wouldn`t want to be so presumptuous with this as to speak on behalf of the military but I would say that in my own experience, if I had a question about the intent, then I would seek some clarification before proceeding.

MELBER: Mark, I`m not trying to be presumptuous either and I understand Mr. Hoffman is careful and we care a lot about civilian control. But it seems to me, what we`re observing is a shift because of the nature of the word choice of this particular President. So Mark, is it good - are we basically seeing a new world order where you have to double check whether things are in order because the President may want a new cycle instead of a policy?

JACOBSON: Look, let me be clear. I mean, this was about politics as the bad thing. The President shouldn`t do it again. Hopefully, General Kelly will get him in the right place here. But words matter and I think this issue of intent and order is very significant. For the military, there`s an obligation as you stated earlier to follow a lawful order. But this isn`t new. A very famously during Reagan administration, Secretary of the Navy John Lehman had inserted into Reagan`s speech a call for a 600 ship navy. This was something the (INAUDIBLE) had no intention of putting in there. He was blindsided by it.

And so the Pentagon slow rolled and went back for clarification. So there`s a political angle to this. My worry is not necessarily what happened the other day, despite my disagreement with the President`s policy. My worry is what if he does this on something like North Korea or an attack or the need to give serious life and death orders? That`s my concern. So the President needs to stop it now and go back to a normal relationship with a direct chain down to the Pentagon.

MELBER: Understood. Mark Jacobson and Daniel Hoffman, appreciate both of your expertise based on - expertise based on years of service. That is THE BEAT today. We`ll see you tomorrow night 6:00 p.m. Eastern. You can always find us on Facebook and Twitter @thebeatwithari and "HARDBALL" starts now.

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