Show: THE BEAT WITH ARI MELBER Date: August 31, 2017
Guest: Brett Forrest, Mark Tushnet, Kathryn Ruemmler
MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: -- the Department of Homeland Security, Elaine Duke.
ELAINE DUKE, DEPARTMENT OF HOMELAND SECURITY SECRETARY: Good afternoon.
KATY TUR, MSNBC NEWS CORRESPONDENT: Vice President Mike Pence telling Texans that he and the administration are with them today, they will be with them tomorrow, and they will be with them every day for this storm effort and for the recovery afterwards.
Ari Melber takes things over now. Ari, how are you doing?
ARI MELBER, "THE BEAT WITH ARI MELBER" HOST: I`m well. Thank you, Katy. And we`ll be monitoring that and the other developments out of Texas. But we begin with breaking news on Bob Mueller`s Russia investigation. They are closing in.
New prosecutors now involved in this inquiry, Mueller coordinating with New York Attorney General Eric Schneiderman. This opens up the prospect of prosecutions that Donald Trump could not pardon. A story we first brought you on "The Beat" on Tuesday and that comes amidst reports that Bob Mueller has become putting people on the stand, including a key Russian who attended that Trump Tower meeting.
Mueller is using the secret grand jury in Washington and tonight we know he`s using it to gather key evidence on the eight people in that Trump Tower meeting last June. A Russian lobbyist, Rinat Akhmetshin, is the first person who has been publicly confirmed now as a grand jury witness. And tonight we can tell you he`s spent hours before this grand jury this month, that`s according to a new report in the "Financial Times."
Well, that`s the biggest news we`ve gotten on the Mueller probe in a long time. And it`s important for legal reasons that some people may not immediately grasp. Remember, Mueller can start anywhere. You know, he can bring in campaign staff or White House staff or he could start with no witnesses at all and look at evidence and e-mails and documents.
What we know tonight is that Bob Mueller is digging in to that June 9th meeting. And according to what we know about investigative order, we can also infer that Mueller does not view that Russian lobbyist as the criminal target. You don`t start with the target. You start with the people who may have the goods on the target.
So we know Mueller is moving his focus from one room in the Trump Tower to another room, this grand jury room. And we know Mueller runs exhaustive investigations. He won`t just hear one version of the story of what happened in that room.
There are seven other versions potentially to be told, and it`s quite likely each of those seven other people are going to ultimately join that lobbyist in the grand jury room unless they`re targets or face letters of indictment.
And while Trump may have recently learned about the pardon power, there are signs here that Mueller is way ahead of him. More news tonight on a story that we first broke here on "The Beat" on Tuesday.
(BEGIN VIDEO CLIP)
MELBER: We can report new findings from an MSNBC legal unit investigation into the other way this Russia probe could continue even after pardons, through prosecution for state crimes. The source with knowledge of one state attorney general`s preparations tells me that office is already looking at its potential jurisdiction for Russia related crimes.
(END VIDEO CLIP)
MELBER: That was Tuesday. Now, Politico reporting New York`s attorney general is coordinating with his investigation with Mueller, and this is the same attorney general who sued Trump over Trump University, many remember that civil case.
We`ve heard a lot about Bob Mueller and that`s probably not going to change, but today the legal Russia focus turning to New York Attorney General Eric Schneiderman. Tomorrow, it could be an A.G. in another state or it could be another local prosecutor like Manhattan District Attorney Cy Vance who also has jurisdiction over potential crimes in New York like if a potential crime was planned out of Trump Tower. We have more on that prospect later on the beat tonight.
But for those developments in the investigation I want to directly bring in right now the "Wall Street Journal`s" Brett Forrest. He broke that Paul Manafort story, as well as Harvard Law Professor Mark Tushnet who has studied how pardons could impact this case. Welcome to you both.
Brett, you look at all this. You look at Bob Mueller wanting to bring in someone from that Trump Tower meeting, which also included Manafort that you`ve been reporting on. Where does this head from here and why do you think this money trail is so important and reaches so far back?
BRETT FORREST, WALL STREET JOURNAL: Those are all very good questions and they just basically add to the mound of questions that remain unanswered. I mean, this is a case that stretches obviously from Russia to Ukraine to jurisdictions like Cyprus and onward from there, and obviously in our own country.
That meeting at Trump Tower has always been intriguing for us because of Natalia Veselnitskaya`s true intentions and her connection with the Russian general prosecutors. So, you know, those questions you raise are important ones to answer and we continue reporting them out.
MELBER: Let me read from your report as well as folks digest all of this because one of the questions when you have millions of dollars floating this direction, right, is well, what`s it all really for?
There is a benign theory of the case that Paul Manafort is simply an incredibly good international advocate, spokesperson, strategist, and thus is paid millions upon millions of dollars. The other theory that the investigators that here we`re looking at and as we know tonight in more than one jurisdiction would be that there was something else going on with the money.
I want to read from your piece. "Manafort`s work often involved the principle figure, Russian oligarch, Oleg Deripaska, politically connected operators whose ventures have aligned with Putin`s objectives." And you say, "Deripaska has offered to give testimony about Russian meddling in the election to those congressional committees."
Where does this all figure to Putin and do you think we actually will hear from this person?
FORREST: We`re not going to hear from Deripaska, at least in the context of the House and Senate Intelligence Committees or in the context of Mueller`s investigation. At least I don`t believe so, principally because he`s not a trustworthy guy in the eyes of American authorities.
He had a roller coaster ride, history of getting visas to the U.S. and then having them rescinded because the FBI has always been very interested in interviewing him about his alleged ties to Russian organized crime, which he has steadfastly denied over the years.
But, you know, he has promised to give the FBI information. The State Department grants him a visa. He comes over and he doesn`t tell the FBI anything. So investigators on the committees, they don`t take his offer seriously.
MELBER: They don`t take it seriously, yeah.
FORREST: No, they don`t. They don`t. And they also don`t want to get in the way of Robert Mueller`s investigation.
FORRES: So, yeah, I mean, he`s -- although this is a guy who has a mountain of interesting and valuable information, you know, he`s not really going to share it and he`s not really trustworthy.
MELBER: Right. Professor Tushnet, what does it mean that there could be these local jurisdictions, local prosecutors effectively looking into the Russia issues as well?
MARK TUSHNET, HARVARD LAW SCHOOL: The primary thing, I think, is that it takes off the table, the possibility that central figures like Paul Manafort will be able to go off scot-free with pardon from the President.
The President`s power to pardon extends only to federal crimes, and so the possibility of a state crime will remain always open. That means, in turn, that investigator Mueller and Attorney General Schneiderman have something to deal with to place pressure on Manafort that he can`t expect to be relieved by President Trump.
MELBER: I want to bring in, to add to this conversation a very special guest, Kathryn Ruemmler, was a former White House Counsel to President Obama and a former federal prosecutor.
I want to speak to you for several reasons on the news of the day, but starting with where we are right now. Your view of how it works when federal prosecutors may actually be coordinating with other local or state investigations and what that means here tonight.
KATHRYN RUEMMLER, FORMER WHITE HOUSE COUNSEL TO PRESIDENT OBAMA: Well, it can be a really effective way to precede an investigation because you can leverage the resources not just of the special counsel`s office but also of, you know, in this case as reported the state attorney general`s office.
And so, you know, we don`t exactly know what level of coordination is going on, but, you know, it can be very effective if the two teams are, you know, are collaborating and not stepping on each other.
MELBER: I want to show you the way we learn a lot about what`s on the president`s mind. And I think this is a difference between the president you worked for as a lawyer, President Obama, and the current president, President Trump, and that is a social media platform called Twitter.
These are his tweets mentioning Russia. You can see almost every other day in the months of June and July. Here we are at the end of August and he`s drastically fallen down to just five tweets. And the most recent one wasn`t even about the investigation itself, but rather two weeks ago he wrote according to a new report Obama new about Russian interference two years but he didn`t want to anger Russia.
Do you view it as a potential shift that Donald Trump`s criminal defense attorneys seem to have finally after months got him to stop tweeting about this investigation, at least over the last few weeks?
RUEMMLER: Oh, gosh. I`m sure they hope they have. I think that`s really hard to tell. I mean, the sort of Twitter habit seems to be really episodic, you know. I haven`t been able to predict any sort of pattern through it.
But, you know, I certainly -- I`m sure that they are hoping that, you know, that he`s decided to dial it back on the Twitter and, you know, if he were the President I were working for, you know, I think I`d probably be pretty heavily medicated at this point.
MELBER: Professor Tushnet, I won`t ask you about what it would take to get medication here in a stressful investigative environment, but at a certain point it seems that a lot of the other key figures are going to go into that grand jury room and talk about this July meeting -- June meeting and talk about what looks like a problem when you`re meeting with Russian people promising Hillary Clinton, but that may not make for a criminal conspiracy. What is Mueller going to look to do if those folks are going to come in and try to offer their most benign explanation?
TUSHNET: He`s going to probe the accuracy of what they have to say by comparing what one says to what another says. And he will also be in a position to in some ways start offering deals to them, most obviously to Paul Manafort, who seems to be in rather severe legal jeopardy and might not be able to escape it through the hope of a pardon.
By placing pressure on Manafort, he can get a story about what`s going on and what went on and then see whether other people confirm it, what the details are, how stories converge or diverge. Basically he wants to find out what happened in that meeting.
MELBER: And Kathryn, let me play a little bit more again from Donald Trump`s past conversations and statements about Attorney General Schneiderman because, while not everyone in the country is obviously thinking about an individual A.G., Donald Trump has thought about him a lot. They`ve tangled in New York.
He said, "Lightweight Schneiderman driving business and jobs out of New York. Only want to self publicity, total loser." And then on October 2014, "I had a great victory against lightweight A.G. Eric Schneiderman. Most of his case was thrown out or gutted. Little remains." On October 16th the nickname changed. "Read about my victory against sleazebag A.G. Schneiderman. More people should fight when they`re right."
In the long run, Trump ultimately had to personally pay out 25 million in the total related Trump University litigation. But do you expect that Donald Trump and this state attorney general are going to continue to tangle here or is this in your view based on the public evidence a back-up insurance plan for Mueller but not one that they may act on?
RUEMMLER: Well, I think it`s very hard to say. I mean, it certainly seems to be, you know, at the very least that, meaning that as Professor Tushnet said, you know, President Trump cannot pardon anybody for state crimes. His pardon authority is limited to federal offenses. And so, you know, there`s really nothing he can do there.
I think, you know, Attorney General Schneiderman, who I know personally, you know, he`s a very experienced lawyer and he is -- has pretty thick skin. And I think understands that these are just sort of personal taunts and I wouldn`t expect that in any way, shape or form to affect his professional judgment.
MELBER: And that`s my follow-up for you. You mentioned you do know Attorney General Schneiderman. A lot of people don`t. I mean, do you think he has a background to deal with in the Manafort case what are very complex, even potentially, you know, international shell corporation chains and real tough stuff. So some of what you did I know on Enron Task Force kind of stuff, which is not what frankly A.G.`s usually focus on?
RUEMMLER: But he does have a number of people in his office. You know, he`s the leader of a large team of lawyers and prosecutors in his office, many of whom do that, that kind of experience. And, you know, some of whom spent prior parts of their careers in U.S. Attorneys offices, you know, developing those types of skills.
The New York A.G.`s office also has, you know, a very broad set of authorities that they can, you know, that they can use, subpoenas and the like. In some respects even broader than what the feds have. So, you know, I think he`s got the team, experienced team to work on this kind of a case.
MELBER: Yeah. Here is what I want to do. Brett Forrest and Mark Tushnet, I want to thank you both for your analysis on this story. Kathryn, as mention, I want you to stay with me for a separate conversation I want to have with you.
Ahead, more on this breaking stories. President Trump`s attorneys now tonight in contact directly with Special Counsel Mueller and they`re sending memos making their case. The Trump defends against obstruction of justice and they say Jim Comey is surprise, not reliable.
Meanwhile, the big question we were just discussing, is there enough pressure to make Paul Manafort flip? I`m going to bring Kathryn Ruemmler back and talk about her experience. She worked with a man who is currently on the Mueller team and is a specialist in flipping witnesses.
Plus, later, a beat exclusive, a former Kushner employee joins me to discuss what she calls a hit piece that was on, guess who, Eric Schneiderman. We`ll explain on "The Beat" tonight.
MELBER: There is even more developing news tonight on Bob Mueller`s Russia investigation. New York`s top prosecutor working with Mueller on the Paul Manafort angle while Mueller is now pressuring Manafort`s family and his lawyer who drew an unusual subpoena from Mueller.
According to "Wall Street Journal" report, tonight there are signs that Trump`s lawyers, though, are pushing back. They want to change the topic from these stories about Russia`s in the grand jury room, about Manafort`s struggles, to a new topic. They want to debate Jim Comey and they`re leaking their opinion that Trump had the power to fire Comey and that it had nothing to do with obstruction.
Now, Mueller`s team will certainly assess those defenses. They`re going to read anything that Trump`s lawyers send over, but they`re not backing an inch of the pressure on Manafort.
In fact, Mueller`s have Prosecutor Andrew Weissmann who is know for his probing investigations and flipping witnesses in the famous Enron case. That was the complex fraud case.
Another key prosecutor on that team who you just met moments ago on "The Beat," Kathryn Ruemmler, once recounted how Weissmann is willing to take risks to secure witness testimony that other prosecutors might not.
Now, Ruemmler helped secure the Enron convictions and went on to serve as White House counsel to President Obama. You can see it there, the former president. A talented lawyer, himself, said that he picked Ruemmler has his top lawyer because she, "had an uncanny ability to see around corners that no one else anticipates."
Back with us is that lawyer, Kathryn Ruemmler. Appreciate you being here on such a busy night. Let me ask you since Barack Obama thought you had this skill, and I believe him, your old boss, what corners do you think Mueller is looking around now?
RUEMMLER: Well, that`s a great question. And let me just say at the outset that I have absolutely no information at all about what evidence they`ve actually collected, you know, what they`re really looking at other than what I`ve read in the papers. So, you know, my observations and opinions here are really based solely on publicly available information and, you know, knowing a number of the players involved. So I will say that at the outset.
MELBER: It`s a modest way of saying while you don`t have any secret grand jury material, you`re drawing on your experience overseeing 45 lawyers in the White House working for a president. I get it.
RUEMMLER: Yes. So, you know, look, I think that what you have embodied in the special counsel team, led by Bob Mueller, is just an extraordinary amount of experience and probably more experience, you know, within a single team or group of prosecutors than we`ve seen in recent history, you know, working on a single matter. The breath of cases that they have investigated and prosecuted over many years is really unparallel.
And so that -- it`s that experience that allows somebody to really see around corners, to anticipate the types of defenses, the types of legal challenges that might be brought against investigative actions that they`re taking, but also, you know, to really understand how people who are trying to conceal potential misconduct go about doing it. You just -- you couldn`t have, you know, just a greater wealth of experience than this team has.
MELBER: Right. And then you look at these leaks to the "Wall Street Journal" which to my legal eyes didn`t have anything really new in them. I mean, people are going to be hearing about this tonight and tomorrow. It was basically a leak saying that Trump`s lawyers think that he has the power to fire Comey.
They`ve met with Mueller in recent months, submitted memos arguing that the President has that power basically. That he didn`t obstruct justice. And they also question Comey`s reliability, which is standard operating procedure.
What I don`t see here in the report is anything new or even necessarily newsworthy, other than that it`s coming from them. And then I`ll decode this for, you know, this would -- you know, they then say to the journal, "Oh, we have no comment. We`d never comment on anything, the leaks from their memo." So obviously they either lost them in a park in Washington or they gave them to the "Wall Street Journal."
Your view of that part of the strategy, because my understanding, yours being far more important, but my understanding is the question isn`t whether you have the authority to fire Comey. That`s not in doubt. The question is whether you abuse the authority to fire him in a manner that might obstruct or impede justice under federal law.
RUEMMLER: That`s right. The motive, the why, why was he fired is incredibly important here. And, you know, that`s what in part I think what the special counsel will be investigating and looking at. So the fact that he had the inherent legal authority is relevant, but it`s not dispositive.
MELBER: Right. Well, let me turn to the other piece. So I initially invited you on to discuss, which is we`ve been mentioning Mueller and the attorney general of New York looking into the financial transactions.
Paul Manafort having received $40 million from this Russian oligarch over several years and we`re going to show you how to follow the money. 12.7 million from political work in Ukraine over two years. Since then, Manafort then, you see there in New York, purchases four properties, three of them in cash. And he purchases a mansion down there in Florida.
Now, some of those properties bought under shadow companies linked to Manafort, which then transferred the properties back to him for a zero- dollar transaction. Manafort also reportedly taking out loans on several of those properties, which can look odd if you are flush enough to have originally bought them in cash, looks like he may be facing legal jeopardy.
A former prosecutor in Illinois U.S. attorney`s office saying, "If I represented Paul Manafort, I would conclude my client has significant criminal liability." And this is an area where the liability may be for both the federal and the state crimes, money-laundering being a key example.
So walk us through this, Kathy. If Manafort is being pushed on all of this, and then he puts down a card and says, "Well, I have a get out of jail free card from the President," I think I can get it.
And now what seems to be new today is these investigators pushing back and saying, well, here`s another card. You could go to jail in New York. It could be even tougher. And then the question is, what card does Manafort`s legal team play after that?
RUEMMLER: Right. Well, we don`t know exactly what cards are being played. But it`s a pretty weak card to play with the prosecutor is that I might get a presidential pardon in the future.
And I know there`s been a lot of speculation that, you know, President Trump was sending a signal to everybody in the Russia probe with the Arpaio pardon that, you know, he was going to hand out, hand out pardons like, you know, trick-or-treat candy on Halloween.
But from your -- from a prosecutor`s perspective, if someone comes in and says that, you know, that`s just really not an enormous amount of leverage. And, you know, I`m so glad that you said follow the money, because what the team, the prosecution team is -- the investigation team is really going to be doing in significant part is following the money. That`s how you investigate these cases. And, you know, asymmetry of information is the power that the special counsel and the prosecutors have.
Paul Manafort or any other individual who is caught up in this probe, they have no idea what evidence that the special counsel has gathered. And so, you know, they`re in a way, they`re sort of flying a little blind and that`s really where the true power comes from.
RUEMMLER: And the leverage and the ability to, you know, to get a witness to sort of come to the table and tell the truth and come clean, and that`s really the goal.
MELBER: Well, you make such an interesting point. What you`re calling the asymmetry of information, right? I mean, in newsrooms we`re just learning who was brought before the grand jury secretly, weeks ago. It`s new because it`s newly revealed. But it was weeks ago that this first individual, a Russian lobbyist went into the grand jury room to talk about that meeting.
We don`t know over the next two weeks, and as to your point, Paul Manafort`s lawyers and he probably don`t know what other people from that meeting went in. And you usually don`t want to be the last one in, the seventh or eighth person talk to you about it. But as you say it`s asymmetrical, what I want to ask you about is to build on that point and also put in the context of the money.
I`m going to put it on the screen again for the viewers` benefit these shell companies linked to Manafort. You`ve got the purchased of a Trump Tower apartment, that`s how he got to know Trump initially all the way back in `06, 3.6 million, New York condo in `07, 2.5 million, Florida mansion, 1.5 million in `07, few years later, a New York City loft for 2.85 million, also a cash purchase as I mentioned, and in 2012, a Brooklyn brownstone for about 3 million in cash.
And who wouldn`t want a $3 million Brownstone in Brooklyn, it`s a great thing, a lot of properties. How do investigators look at this and say, "OK, are you just a super successful businessman who puts a lot of money down in cash? Or do you expose yourself to criminal liability for money- laundering?"
RUEMMLER: You might. I mean, what -- it certainly raises a lot of red flags, right, which is making this big purchases with cash. It might be completely legitimate, but it might not. And so with the prosecutor, what you`d want to say is, "OK, well, where did that money come from?" That`s really the key question.
And so that`s why when we talk about following the money, you want to trace it back. Where did it come from? And, you know, people don`t usually just carry around, you know, $3.65 million in cash. It`s somewhere in a bank and how did it get into that bank? And what, you know, what was the originating bank? And so, you know --
MELBER: Yeah. I don`t think Scrooge McDuck had $3.65 in coin. I mean, that`s a lot of money for cash.
RUEMMLER: Right. That`s exactly right. So a lot of money for cash, although, you know, people do, particularly in Manhattan, people do, you know, make large purchases of real estate as you know, Ari, with cash. But nevertheless, these are, you know, questions that you`d want to ask and you`d want to know.
And there are probably a whole lot of bank records that give you, you know, a very substantial trail about where the money originated from. And when you`re talking about money-laundering, what gives rise to a money laundering violation is if the money came from, you know, particular types of what the statute says, unlawful specified activity. So if there`s an underlying, you know, criminal activity --
RUEMMLER: -- that you engaged in and then you tried to conceal it through, you know, putting the proceeds of that into a real estate deal and to a condo or something, then that`s a separate offense, separate and apart from whatever, you know, whether it was a narcotics deal where you got, you know, 5 million bucks from selling however many kilos of cocaine and then you put -- tried to put it into an apartment in order to conceal that source of those funds, that`s a separate offense of money-laundering.
MELBER: Right. And that`s where you get the crimes, you know, stacking up to your point. As a former federal prosecutor who worked under Mueller`s Enron Task Force on complex fraud and as a former counselor of President Obama we are very lucky to have a lot of your expertise tonight. Kathryn Ruemmler, thank you.
RUEMMLER: It was great to be here. Thanks Ari.
MELBER: Thank you. Now coming up, a new report that indicates Jared Kushner is under much greater financial pressure than ever previously known. What does that mean for the Russian query?
And an exclusive, I`m going to speak to the former editor in chief of the "New York Observer" paper. You see it there with Kushner. She says that he at times tried to use the paper to go after Trump`s political enemies, including the New York State General Attorney Eric Schneiderman.
ARI MELBER, MSNBC HOST: Donald Trump and his family members in the west wing said they`ll forgo or donate their government salaries on the idea they don`t need the money and their wealth makes them independent. But it turns out it`s the opposite for Jared Kushner. According to a new report by Caleb Melby in Bloomberg, Kushner`s family company is failing a stressful debt, now $600 million all from a skyscraper his company bought in2007. At that time, 666 Fifth Avenue commanded the highest price ever paid for a single building. And it`s not aging well. The bill is due in under two years and the building doesn`t make enough to even cover all that rent. Bloomberg reporting that Kushner Executives unsuccessfully sought investments from all over the world. South Korea and sovereign wealth funds, France`s richest man, Israeli banks and insurance companies and even exploratory talks with a Saudi developer.
Meanwhile, federal investigators want to know if the Fifth Avenue building`s finances came up in that post-election meeting Kushner had with the head of Russia`s state-controlled development bank. With me is Caleb Melby who broke the story for Bloomberg. What did you find? And does any of this increased pressure on Kushner that could affect the way he governs or meet with foreign officials?
CALEB MELBY, BLOOMBERG REPORTER: Yes. Pressure is definitely mounting on both Kushner and his family. This debt is due February 2019. And look, they`ve already looked a lot of different places. And it`s the sort of situation where they don`t have a lot of potential investors. The plan they have to save the building involves raising it and a building, that new fancy one with a bunch of -- like a mall on the bottom, hotel on top of that, condos that would go from $9,000 per square foot.
MELBER: Yes. Can I ask you about that? Your report is so exhaustive. And right in the middle you`re like, their plan to make up the $600 million debt as I understand it, and I`m not a financial expert, their plan was to go billions more in debt, do I have that right?
MELBY: Yes. They -- to look for financing, to help them pay off their current debts and take out you know, like a $4 billion construction loan, $1 billion to buy back the stores and half the office towers that they`ve sold off --
MELBER: So, how is that different than being at the blackjack table and being down and saying but if I keep gambling I`ll make it all back?
MELBY: I mean in some ways it`s not. It`s definitely a moon shot development project, right? It`s a -- it`s a big plan that they have to save themselves on this building.
MELBER: At this point would you say as a financial matter, they are desperate or super-desperate?
MELBY: They`re facing some very steep challenges and they`re only going to keep getting worse until February 2019.
MELBER: Caleb Melby with the story everyone is talking about today, thank you for coming on the show.
We turn now to a BEAT Exclusive, Kushner facing this heat from Mueller as news breaks that the New York Attorney General Eric Schneiderman was coordinating with Mueller on potential Russia inquiry. Schneiderman previously sued Trump over Trump University and dispute that drilling Kushner as Trump firstborn, he was, "those currently doing a story on me to get even." And then he threatened more reaction. And within three months, an aggressive report on Schneiderman did come out in a paper owned by Jared Kushner alleging Schneiderman had been heavy-handed in using his power to threaten action, overlooked cases against friends and target enemies. It featured a cartoon depicting Schneiderman from clockwork orange as a kind of sociopath. The back story may be more interesting.
The New York Times reporting that the Observer`s editor at the time Ken Kurson, asked a 21 -- excuse me 28-year-old ice cream store manager, to write the article and he wouldn`t do it. And Gifford said Kurson described Schneiderman as a bad guy and a phony and send in a negative article about Schneiderman. Elizabeth Spiers ran the Observer under Kushner for a year. She departed before that piece was published. She joins me today. Says she says no serious reporter would touch that piece on Schneiderman and that it reflected an agenda by Kushner to attack Schneiderman all as pay-back over the Trump University suit. A back-story that`s even more interesting, given that Schneiderman is now working with Mueller. Elizabeth Spiers is here along with Slate`s Michelle Goldberg. Elizabeth, what was going on and did Kushner see the newspaper as a place to simply settle scores for Donald Trump?
ELIZABETH SPIERS, JOURNALIST: I`m not sure he did it as a matter of scores but one thing that`s important to remember is that the editor of the newspaper at the time was a family friend of the Kushner`s, and a former political operative. He didn`t have a traditional journalism background and so I think he understood what Jared wanted to happen or what would be in the best interests of Donald Trump. So if you read the story, which is a fairly long profile, it`s 7,000 words. I was counting on my phone how many times Mr. Trump or Donald Trump appears in that story. That`s 47 times. It`s possibly more times than the story mentions Eric Schneiderman.
MELBER: Yes, if you put it on the screen, there`s about 3,500 total words in the article there. The number of words in the observer article and a lot of them there were about sentences defending Trump in one way or the other.
SPIERS: Sure. And also, the article explicitly states that the most important thing that Schneiderman was working on at the time was the Trump University case, which is preposterous. If you understand what the New York Attorney General actually does. And it really reflected a world view that was I think coming from the Kushner camp.
MELBER: I want to ask you and then go to Michelle that, did this reflect a desire to change the legal outcome or just an emotional desire to hurt Eric Schneiderman, who is now working with Mueller?
SPIERS: Yes, I think it was just a reactionary thing. You know, I don`t think A, it would have affected the legal outcome but I think it was just an emotional backlash to what was happening. I think it also important to mention that at least before Schneiderman went out after Trump University. He had a seemingly good relationship with Jared and Ivanka. I went to breakfast in 2011 that Jared and Ivanka hosted for Schneiderman. And I didn`t get the impression that they knew each other well, but they seemed to be on good terms. And this was before Schneiderman went after Trump University.
MELBER: Right. And Jared and Ivanka had a lot of political relationships including with Democrats as his father did. You mention the denials, I want to read it here in the piece that they wrote, "Jared`s father-in-law is Donald Trump, given that family relationship, the Observer took great care to ensure fair, unbiased journalism throughout the reporting and ending of this story. As a matter of fairness, we mention they denied that this was a hit piece although we explained some of the contexts."
MICHELLE GOLDBERG, SLATE COLUMNIST: I just think it shows how ethically slippery these characters are, which matters in regards to the Bloomberg story, because this is somebody who is so deeply in debt and deeply compromised that even if he had the most bullet-proof ethics in the world, it would be very problematic to have him in this position where he`s at once the kind of the main interface between the U.S. government and various foreign leaders, with this massive portfolio that seems to span all of American interests all over the world that he`s both doing it on behalf of the U.S. government.
And at the same time desperately -- his family is desperately scrounging for foreign investments to rescue their company and their legacy. Even if you had someone who was willing to make the strongest possible ethical division between their personal interest and their professional role, this would still be a mess. And this is just -- I think this story about how he used the Observer as you know, sort of an attack dog against his political enemies shows that he has none of those ethical boundaries. I mean, the potential for corruption here is so incredibly staggering.
MELBER: Right, because he owes so much. Elizabeth, you were working with Jared Kushner at the time. Trump was getting more politically vocal. Did you ever talk to him about the birther attacks on Obama and those kinds of things? What did he think he thinks of that then?
SPIERS: Yes, I mean, we -- Trump was running in the 2011-2012 cycle, but didn`t have the traction that he had in the last cycle. And so, the paper had to cover Trump in the sense that not as much as we ever cover national politics. We were aggregating stories. So this would come up routinely. And at one point, we aggregated a relatively neutral story from the Times, but it happened to have some negative information and then Jared wanted to discuss it. And I said, well, you know, we`re just taking the neutral summary of it. And he said, well, Elizabeth, you know, if you spent time with my father in law, you`d really like him.
And I said, well, that might be true, but it really wouldn`t change the way the paper covered him. Then I said, I have to be honest with you, your father in law has done some things that I find morally repellent. And he said, like what? And I brought up the birther stuff. He said I just find it categorically -- it`s racist. And he looked at me and said, well Elizabeth, you know, he doesn`t mean any of those things, he`s just saying it because he thinks Republicans are dumb and they`ll buy it.
MELBER: Kushner said that he -- Kushner said he thought that Donald Trump thought Republicans were dumb.
SPIERS: Yes. And there`s a possibility here that Jared is lying to me because he thinks that that`s a more palatable answer. But either way, I mean, it says something about both of their characters, regardless of which version is true.
MELBER: And we`ve got to go. Was there anyone else in the room or that he just said he is proud of.
SPIERS: Yes, he just said this to me in a meeting we had.
MELBER: I learn something every time I talk to both of you. Elizabeth and Michelle, thank you, both.
SPIERS: Thank you.
GOLDBERG: Thank you.
MELBER: I appreciate it. Coming up, could President Trump actually have to testify under oath in the Russia inquiry live? I have a Democratic Congressman with an idea about that, next.
MELBER: Welcome back. I`m joined now by Congressman Eric Shawlwell, a key figure in the Democratic side into the investigation in the Russian probe. Thank you for being here on a busy night. Do you think that at this point, it`s important for your investigation to have Donald Trump himself testify?
REP. ERIC SWALWELL (D), CALIFORNIA: I thank you, Ari. And first, let me just say as we see the images in Houston that are breaking our heart. We`re going to be back in Washington in a few days and Congress must pass aid immediately. We shouldn`t do anything else. We always speak with one voice in a disaster. But moving to the Russia investigation, Ari, we need to hear from all relevant witnesses. And until we do that, we will not have a complete investigation. And what we know right now about the President is that he sought to do business in Moscow when Russia was interfering in our elections. We also know that his team was willing to receive information from the Russians in the midst of the Presidential campaign. And so at this point, it`s too early to say whether he is called in or not but if he`s a relevant witness, it shouldn`t be taken off the table.
MELBER: So you`re saying it`s on the table to potentially try to compel him to testify?
SWALWELL: And I speak for myself. You know, it`s ultimately a call of Mike Conaway our Chair and Ranking Member Schiff. But I do believe that bipartisan concern should be that this is an exhaustive investigation that understands completely the personal, political, financial nature of this relationship.
MELBER: Congressman you site the disclosure that Donald Trump`s aides were seeking help from the Kremlin to do business in Moscow during the campaign. He said the opposite during the campaign, was he lying?
SWALWELL: Yes. I hate to say that about our President, but the evidence is clear. That he went from saying there were no Russians, then we found out there were a lot of Russians, a constellation of Russians. Then he said there was no collusion. Well, now we know that the aides sought to have a working relationship with the Russians. And the President has essentially taken this, I believe, Ari to a point of so what? That`s politics. Who wouldn`t have taken the meeting? And that`s a very destructive and I think just pessimistic attitude. And I don`t think Americans are going to go for it. They care.
MELBER: Based on these disclosures, do you think it is now more likely that his tax returns reflect some deals or debts linked to Russia?
SWALWELL: Well, you know, you also have to assume that people are forthcoming in their tax returns. But I don`t see how we could conduct this investigation without fully understanding Donald Trump`s personal, financial and political contacts to Russia and that would include tax returns.
MELBER: And finally, with all these disclosures and these reports we`ve had tonight on local investigations, is your view that that is OK or that with Mueller going and your investigation going, state AGs should not be pushing forward?
SWALWELL: Well, it happens all the time, Ari, that to be efficient and when multiple jurisdictions are invoked, that they work together. I don`t think they should treat Donald Trump any differently. But if you know there were state laws that are implicated, they certainly should work together to avoid redundancies. In our investigation, Ari, we just want to have independence, credibility and make progress and hopefully do everything we can so that when we go to the ballot box in 2018, we are never in a mess like this again.
MELBER: Well, as a member of this investigative body, I think you did make some news here tonight saying number one, Donald Trump could be a relevant witness. You may potentially look to coordinate with your colleagues to have him testify. Number two, you think he was lying about not seeking business deals in Russia. Congressman Swalwell, thank you for joining us.
SWALWELL: My pleasure.
MELBER: I appreciate it. And I want to turn to the Daily Beast Betsy Woodruff and Cornell Belcher, Democratic Pollster who has worked for President Obama. What do you think we just heard there, Cornell?
CORNELL BELCHER, DEMOCRATIC POLLSTER: You know, I want to hope for the best but I got to tell you, Ari, I find it hard to believe that a Republican-controlled Congress is going to allow that to happen. I think it`s the right thing, I think most Americans probably think it`s the right thing when you look at the polling out there now with Americans concerned about Russian meddling. But in the end, I think politics is going to win out. I think it would be tremendous for Republican leaders in Congress to allow that to happen.
BETSY WOODRUFF, THE DAILY BEAST POLITICAL REPORTER: What stood out to me is what he said about the possibility of President Trump talking to Congress. I don`t think that`s likely in Congress, but I`ll honestly be surprised if Mueller doesn`t try to question President Trump. I spoke a while back with Jack Danforth, the only other person who`s been his Special Counsel under the same authority under which Mueller is working. Danforth investigated the Waco crisis during the Bill Clinton administration. And he told me that while he was running that Special Counsel probe he called Bill Clinton and they talked and it was a conversation for the purposes of his investigation even though Bill Clinton didn`t have a huge involvement in what happened at Waco. So there`s absolutely precedent for Special Counsel investigators to ask questions of the President about the issues they`re investigating, and I`d be surprised frankly if that`s not on the table for Mueller.
MELBER: And Cornell, I mean, doesn`t that also depend on whether Republicans ultimately long term in the Congress learn enough that they want to take a more adversarial approach based on what`s exposed?
BELCHER: Well, you know, we`re talking politics, right? And you`re looking at the mid-terms coming up where there are already you know, challenging political environment out there. You know, are Republicans in the House really going to put the President front and center in this conversation and have for weeks or months on going into the midterm election where they`re already really nervous about this going into a midterm election and then particularly with the base of the -- you know, the core of Trump supporters. You know, House Republicans and Senate Republicans really need the base of the Republican Party to come out in force for them. And we see any drop-offs in that and they see them coming after their guy or helping Democrats come after their guy, it is tough politically for Republicans to do that.
MELBER: And the other thing I wanted to cover, stepping away from Russia, Cornell, this is some police audio. I don`t know if folks have -- do we have this in the control room? All right, we`re going to cue up this. This is basically something folks may not have heard about yet but would be a really big story if we weren`t covering everything else. And this is dash cam audio that`s been exposed. An investigation has been ordered. But I want to play it for you here so we can assess it and get your reaction.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Now, listen to me. Call the person who`s coming to get you. Tell them they don`t need to come. All right?
UNIDENTIFIED FEMALE: (INAUDIBLE)
UNIDENTIFIED MALE: Yes. Go ahead and call them. I`m going to take you to jail and I`m going to impound the car.
UNIDENTIFIED FEMALE: I can`t call them if you don`t open the door.
UNIDENTIFIED MALE: Why can`t you?
UNIDENTIFIED FEMALE: Because I will not put my --
UNIDENTIFIED MALE: Use your phone. It`s in your lap right there.
UNIDENTIFIED FEMALE: OK, I will, I just don`t want to put my hands down. I`m really sorry.
UNIDENTIFIED MALE: Use your phone.
UNIDENTIFIED FEMALE: No, no, no. I`ve just seen way too many videos of cops --
UNIDENTIFIED MALE: But you`re not black. Remember, we only kill black people. Yes, we only kill black people, right? All the videos you`ve seen, have you seen any white people get killed? You have?
(END VIDEO CLIP)
MELBER: In Georgia there. What do you make of that, Cornell?
BELCHER: I almost don`t know -- I`m speechless, right? It is -- it is an acknowledgment by a police officer of what`s happening in this country. And for all those people who want to say that this is -- you know, black people whining and making this stuff up, no, it`s not black people whining and making this stuff up. This stuff is real. And the police out there on the force know it as well. They -- that`s basically an admission that there is two standards in America. There is a standard for when you pull over white people where they probably will -- likely that you know, you can reach for things. And a standard for black people where you cannot reach for things or you, in fact, may get shot. And I`ve got to tell you, as a black person, I don`t reach for anything when pulled over by a cop, right? I don`t - I don`t reach for anything, I tell my kids not to reach for anything. That`s as real, and it`s scary, and it`s -- and it`s disgusting.
MELBER: Well, looking at that video and seeing an officer say that in the line of duty under the cover of law, it is shocking even if you know these stories. Betsy and Cornell, thank you, both. We`ll be right back.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END