The Beat with Ari Melber, Transcript 10/4/17 Trump-Russia dossier might be credible

Guests: Jesse Eisinger, Paul Henderson, Byron Dorgan, Catherine Rampell, Jeff Merkley

Show: THE BEAT WITH ARI MELBER Date: October 4, 2017

Guest: Jesse Eisinger, Paul Henderson, Byron Dorgan, Catherine Rampell,

Jeff Merkley

CHUCK TODD, MSNBC HOST, "MTP DAILY": And sometimes he simply played with his moustache. And by the way, I would always be playing with my moustache, if it was to look like that. All in the name of drawing attention to forced arbitration clauses that are used throughout the financial industry.

The groups that organized the protests say those clauses are get-out-of- jail-free cards, which, of course, the monopoly man also had with him today. Anyway, it was pretty clever. All I`d like to say is it`s made me - whatever happened to season three of Mr. Robot?

Anyway, that`s all for tonight. THE BEAT with Ari Melber, though, starts right now.

ARI MELBER, MSNBC HOST, THE BEAT: Chuck, people forget the get-out-of-jail- free card, that is the pardon power in the game of monopoly.

TODD: There it is. That`s right. There you go.

MELBER: I want to get involved.

TODD: I have a feeling you`re setting yourself up for something.

MELBER: Maybe. I wanted to get involved. Chuck Todd, thank you for that look at that hearing.

Here`s a message that is new today. "The Russians did it, they`ll do it again, but there is no final answer yet on whether the Trump campaign helped them. That was essentially the urging and bipartisan message we heard today from the leaders of the Senate investigation into Russian meddling.

They don`t hold this kind of briefing very often and we mentioned it to you on the show earlier this week. And the top Republican offered findings that directly contradicted President Trump on Russia while avoiding a direct confrontation with Trump when pushed by a reporter.


UNIDENTIFIED MALE: The president has said repeatedly that any talk of collusion is a hoax. And you`ve gone through all these documents, you`ve interviewed all these people, at this point, is the president right, is this a hoax?

SEN. RICHARD BURR (R), NORTH CAROLINA: I`m going to let you guys quote the president and ask him questions about what he said. It`s not going to be the committee where we`re going to -

UNIDENTIFIED MALE: But do you have any evidence to suggest to rule out that the president knew anything about any of these contacts that occurred between any of his associates and the Russians?

BURR: Let me go back and say. I thought I was pretty clear that the issue of collusion is still open, that we continue to investigate both intelligence and witnesses.


MELBER: Still open. Meaning Senate investigators are not ruling collusion in or out. Now, that was the biggest headline from this briefing today

Then Sen. Burr turned to the infamous dossier.


BURR: As it relates to the Steele dossier, unfortunately, the committee has hit a wall. We have, on several occasions, made attempts to contact Mr. Steele, to meet with Mr. Steele, those offers have gone unaccepted.

The committee cannot really decide the credibility of the dossier without understanding things like who paid for it, who are your sources and sub sources. And though we have been incredibly enlightened at our ability to rebuild backwards, the Steele dossier, up to a certain date, getting past that point has been somewhat impossible.


MELBER: The translation there is that the Senate cannot get the dossier`s author to talk. Now, maybe Mueller will have better luck.

If there was a bipartisan note today, it was these intel leaders from both parties coming together to warn the Russians will be at it again.


SEN. MARK WARNER (D), VIRGINIA: The Russian active measures, efforts did not end on Election Day 2016.

BURR: What I will confirm is that the Russian intelligence service is determined, clever, and I recommend that every campaign and every election official take this very seriously.


MELBER: Take it seriously. Today, I`m going to speak to Sen. Jeff Merckly about today`s news and whether he`s taking it seriously. He, of course, represents a state that was targeted by Russian hackers in the 2016 election.

Now, let`s get right to it, though, with Elise Jordan. She worked for Secretary of State Condi Rice and was a communications director for the National Security Council and Mieke Eoyang, a former staffer to members of the Intel Committee and a staff member of the House Armed Services Committee.

Elise, the issue of collusion is still open. What does that mean to you?

ELISE JORDAN, MSNBC POLITICAL ANALYST: That means that today Sen. Burr didn`t outright dismiss this probe as a hoax, as President Trump has called the Russia probe. I also - I found very revealing today that he said he expects this to be ongoing.

And though he`s had this aspirational timeline of ending this at the end of 2017, it`s very likely to be ongoing throughout 2018 and they want to give a report hopefully before the 2018 mid-terms. MELBER: Aspirational timeline, is that the kind of word choice you use when you were a speechwriter? That`s a very nice way of saying this is going to take -


MELBER: It`s going to take a long time.

JORDAN: It is going to take a long time. And I think that the nuance language that Sen. Burr used today reflects the difficult position that he`s in among some Republicans, who really would like to see this Russia probe just go away.

MELBER: And, Mieke, you`ve worked real up close to this, more than most people on the congressional side. They have a lot of power, particularly when there is a bipartisan process, right? And they have subpoena power and they can make people talk up to a point.

They`re a predator when it comes to hunting information. But they are not the apex predator. They are not Bob Mueller. What did you make of Sen. Burr, as I just played, showing his reporting, his assessment of the fact that some answers aren`t attainable if people won`t talk to them.

MIEKE EOYANG, FORMER CONGRESSIONAL INTELLIGENCE STAFFER: So, I think Sen. Burr was sending a very clear message to potential witnesses to this probe. You either cooperate with us and come in and we`ll let you do this the nice way, or if you`re going to resist, we`re going to do it the hard way and we`re going to drag you in front of the cameras.

And if you`re going to take the Fifth, we`re going to make this as uncomfortable for you as possible. And that`s a message to everyone. You better come and start talking.

MELBER: And I want to ask you about the way he threaded the needle on both contradicting Donald Trump, basically providing the evidence, the facts, what they call, the term of art, the primary findings such as they are, that Russia is involved, which everyone respectively involved in intel has already said - and this is the Republican chairman - while declining to actually fact-check the president personally.

And, of course, we all know, but here it is, Donald Trump saying so many times things that require being fact checked.


DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES: As far as hacking, I think it was Russia. But I think we also get hacked by other countries and other people.

UNIDENTIFIED MALE: You don`t think it`s troubling that they - the Russians tried to meddle in the election.

TRUMP: That I don`t know.

I`ll go along with Russia. It could have been China. It could have been a lot of groups.

If Russia hacked, if Russia did anything having to do with our election, I want to know about it.

UNIDENTIFIED FEMALE: Will you once and for all, yes or no, definitely say that Russia interfered in the 2016 election?

TRUMP: Well, I think it was Russia and I think it could have been other people in other countries. Nobody really knows. Nobody really knows for sure.


MELBER: Richard Burr today said he knows. Mieke?

EOYANG: Yes. That`s right. Richard Burr said it`s very clear. He and Sen. Warner believe the intelligence community`s assessment that this absolutely was Russia. And he refused to give the president the one thing that the president has been asking everyone for, which is that he was clean on this.

The president really wants to be exonerated. And when asked the direct question, Sen. Burr said I can`t give you that answer.

MELBER: And so, Elise, when you look at where it goes from here, if it does take longer, the other piece, the other disagreement I heard was Mark Warner saying, well, there are things we can do, look at these Russian ads.

And Burr said, oh, well, that`s already illegal. There was a bipartisan mood and style, but underneath it, you could see there are different ideas about whether anything more has to be done.

JORDAN: Well, I think this is the tension that we`re going to see over the next month before Facebook and Twitter and Google execs, if they agree to it before they testify in open committee hearing in front of Sen. Burr and Sen. Warner and all their fellow members of the intel committee, this tension of what exactly happened with this political advertising that was bought on the behalf of the Russians.

MELBER: And if it was legal, as so many bad things can be legal, then that would mean, if Congress wants to stop that you do have to act. And Richard Burr wasn`t ready to go that far either.

I want you to hang with me. But I want to get to one other big thing today. The intel leaders, as I mentioned, mostly in agreement. But there was this area, here it is, Democrat Mark Warner hitting much harder.


WARNER: It has been very disappointing to me and I believe the chairman as well that it took 11 months for the Department of Homeland Security to reveal those 21 states.


MELBER: Some local voting officials saying that the feds there, the Trump administration, make their jobs much more difficult with that big delay about which states were targeted by Russian hackers.

Now, I want to turn to one of those officials right now. Alex Padilla is California`s secretary of state and joins me exclusively here on THE BEAT tonight.

Is the Trump administration getting this right? Were you warned in time?

ALEX PADILLA, SECRETARY OF STATE OF CALIFORNIA: Ari, thanks for having us. So, we`re here to express frustration that, no, when it takes nearly a year for the Department of Homeland Security to share cyber threat information with elections officials, at the state or local level, that`s not on a timely basis for us to do something about it in real-time.

And unfortunately, what`s also come about is you have Wisconsin, California and Texas at a minimum who have questioned the quality of the information that is being shared. So, we certainly need to improve upon our communication and our protocols going forward.

MELBER: Do you know why they waited so long to warn you?

PADILLA: No clear answer as to why. I mean, some partial reasons including, for example, clearances. If it is indeed sensitive or classified information, and secretaries of state have not been cleared to obtain certain intelligence reports from Homeland Security, NSA, FBI or others, that does cause a delay.

And I know there`s both an administrative as well as legislative efforts underway to provide those clearances for state elections officials.

MELBER: Are you getting what you need from the feds? Are you confident that you`re going to be able to withstand any meddling, hacking and intrusions in the next election?

PADILLA: You hit it right on the nose here. It is not just about debating what did or did not happen in 2016 because that picture is pretty clear. But every day that goes by, that either the White House or the Department of Homeland Security doesn`t act with a sense of urgency on doing this better, is one less day that we have to prepare for 2018.

So, I`m eagerly awaiting this October 14 meeting where Department of Homeland Security will formalize a coordinating council. DHS representatives, elections officials and others at this state and at the local level to formalize the protocols that should be in place going forward.

MELBER: Alex Padilla, California secretary of state, I want to thank you. I want Mieke to respond. You hear the secretary of state here. He`s saying, on the one hand, there are particulars and they need to continue to work with the feds. But the feds in the senate are concerned about us getting hit again.

EOYANG: Yes. That was a very interesting moment at the end of the press conference today where Sen. Burr said they would do things differently than what DHS is currently doing. The DHS is run under this administration and they are going to make some recommendations for things DHS needs to improve.

So, it`s very interesting that senators are much more proactive about responding to and preparing for the 2018 elections than this president.

MELBER: Elise, I mean, this is the weird part. Again, I don`t like to put these voting officials on blast because I spoke to one from Wisconsin last week who also said, well, look, I am concerned, but, look, I`ve got to work with these guys. And I get it. They`re in the middle of having this working relationship. But no one in the Trump administration or elsewhere has given a really great reason for this 11-month delay. And we`ve shown the president running the administration, giving doubt to the whole issue.

JORDAN: This is a dereliction of duty on the part of the Trump administration and of the Obama administration for not taking a stronger, more proactive stance when the extent of Russian meddling became clear.

This is both sides of the aisle. The executive leadership has to be demonstrated to protect the integrity of our elections.

Elise, hang with me. Again, my thanks to California Secretary of State Alex Padilla and Mieke Eoyang. Coming up -

PADILLA: Thank you.

MELBER: How closely is Bob Mueller coordinating potentially with Congress on the probe? We have news on that tonight.

And the Trump real estate deal that almost potentially led to felony fraud charges. Prosecutors were looking at both Ivanka Trump and Donald Trump Jr. I have an exclusive interview with the reporter who broke that story today.

And later, NBC reporting that Rex Tillerson called Donald Trump a "moron". I have reaction from the Democratic senator I mentioned on the Foreign Relations Committee.

I`m Ari Melber. You`re watching THE BEAT on MSNBC.


BURR: Everybody has their jurisdictional lanes. My hope is that they stay within those lanes. We talk, I won`t say regularly, but when we need to with the special counsel. The special counsel was focused on criminal acts. We`re not focused on criminal acts. If we find one, then they`re the first phone call we make.


MELBER: That`s not what you want to hear if you are a suspect in the Russia investigation. The leader of the senate inquiry saying if they find evidence of crimes, they`re calling the cops. In this case, the federal cops, specifically Bob Mueller.

And in today`s briefing, investigators also said they`ve been gathering lots of evidence, working six and seven-day weeks. They detailed in this unusual briefing over 100 interviews, 250-plus hours, almost 4,000 pages of transcripts and 100,000 pages of documents reviewed by the committee.

Mueller, working on his own track, interviewing current and former White House staff.

Meanwhile, twist in another case relating to Paul Manafort. His estranged son-in-law accusing him of trying to mislead a federal court about real estate investments.

Meanwhile, Jared Kushner dealing with all that blowback from his private email accounts, new reports he not only had three of them, but he routed some of the traffic to Trump organization computers.

As for one of Mueller`s star witnesses at the briefing, today, they said anything relating to Jim Comey and his memos is now up to Mueller.


WARNER: The last one I want to cover is the Comey memos. This topic has been hotly debated and the committee is satisfied that our involvement with this issue has reached a logical end as it relates to the Russia investigation.

Now, again, this is not something that we`ve closed. Questions that you might have surrounding Comey`s firing are better answered by the general counsel or by the Justice Department.


MELBER: By the justice department. Well, I`m joined now by a former senior official with the Justice Department under Obama, Eric Columbus. Elise Jordan back with me.

Eric, at the top of the show, we were covering this unusual press conference and what we gleaned about it for intelligence and Russia. I come to you now on what it means for the special counsel`s inquiry. What did you hear today that is relevant to Bob Mueller`s open inquiry?

ERIC COLUMBUS, FORMER SPECIAL COUNSEL TO THE GENERAL COUNSEL, US DEPARTMENT OF HOMELAND SECURITY: Well, I don`t think there was a tremendous amount that was necessarily relevant to Bob Mueller here.

This was more a status report. And the status report -

MELBER: Well, let me interrupt you right out of the gate. I just played sound where Sen. Burr said, if you`ve got questions about Jim Comey, go talk to Mueller, don`t talk to us. The indication being that the issues around the potential criminal obstruction in this Russia case - obstruction, by the way, the historical matter, was an issue in the articles of impeachment drafted against two different presidents. If you have obstruction questions, go talk to Mueller.

COLUMBUS: Exactly. And that`s what I meant that this is not - Burr was explicitly saying, this is not their lane. This is not the intel lane. They`re focusing more on what did Russia do in the election and who, if anyone, helped them.

And anything else beyond that, subsequent time, the obstruction piece is being examined by Mueller and maybe by the Senate Judiciary Committee.

MELBER: An is Mueller better equipped to get at the dossier than these Senate investigators?

COLUMBUS: That`s a good question. It depends. It depends on who else was involved in it. Who else among US persons were involved that might be able to be turned to get Steele. Steele is not a US person. He`s British. So, it`s harder to get access to him.

Mueller, obviously, is very good at this and will certainly try, if he finds that it is relevant. And we don`t know that.

MELBER: Yes. How do you do that? For viewers who are wondering, OK, there are sometimes crimes that involve foreign nationals, how do you get a foreign national here if he was an observer or a documentarian.

I mean, Steele is a guy who allegedly know the lot or at least intersected with key people who gathered the intel. He`s not, as far as we`ve ever reported, involved to the degree that they could pursue him as any kind of suspect. So, how do you do that as a prosecutor?

COLUMBUS: To some degree, you are depending upon the cooperation of a foreign national. To some degree, you are looking at perhaps whether the foreign national has committed any acts that might be subject to a separate investigation.

MELBER: Right. You need a hook. You need a hook.

COLUMBUS: You may need a hook.

MELBER: That`s the issue, Elise, is that writing the dossier makes you potentially the most interesting person in the world to some people, but we`re not hearing from him yet. And Burr venting that frustration.

Meanwhile, on the flip side of all of this, "POLITICO" is reporting that a lot of Trump loyalists and supporters think the Republican party is basically misplaying this. They say, "losing patience with Republican leaders over the wide-ranging Russia probes creeping into Trump`s inner circle," saying Speaker Ryan and McConnell have allowed the investigations to hobble the White House for months.

Politically, are we going to see more pressure here from Republicans who actually think this is a problem?

JORDAN: This is absolutely unsurprising as the tack that Team Trump is going to take to contest this investigation. Blame it on Mitch McConnell, blame it on Paul Ryan.

That`s what they`ve started doing -

MELBER: They are trying to move it over to them.

JORDAN: - about everything. So, by pushing the blame on to the GOP leadership, which unpopularity is lower than Trump`s right now, that`s just an easier tack and an easy out instead of actually having to own up to any of the problems that might be revealed because of these investigations.

MELBER: And, Eric, last question, of course, I have to ask you about private personal e-mail accounts business that just never goes away. In this case, not going away, because, apparently, Jared Kushner has set up three of them. How would prosecutors look at something like that, and particularly the timing, that reportedly he was setting up forwarding and doing White House business on all of these accounts after hearing inquiries from the federal prosecutors?

COLUMBUS: Well, it depends what`s in them. I think that it`s likely that Kushner`s own lawyers may be eager to turn stuff over and share them with the special counsel, if they feel that there`s nothing in there that implicates them.

The very fact that he was using a private e-mail account is not necessarily indicative of nefariousness or even that he was necessarily breaking the law, as long as he was forwarding those e-mails to his government account as his lawyer claims that he did.

MELBER: Why three? Why three?

COLUMBUS: Well, I think one was his, one was his wife`s, and the third one - you got me. There are possibly innocent explanations for this. Sometimes logistics. But it`s definitely something that the special counsel and, I believe, Senate Judiciary Committee folks will be looking at to determine whether there is anything suspect.

MELBER: Eric Columbus, a careful and thoughtful former prosecutor, always appreciate that. And Elise Jordan, always good to see you.

After the break, this is another big story breaking today. Ivanka Trump, Trump Jr., and a real estate deal that prosecutors were looking at as a felonious fraud indictment they were considering. The reporter who broke this story is here for an exclusive on THE BEAT.

Also later, Rex Tillerson not denying he called Donald Trump a moron and he is not the only cabinet member undercutting his boss. We`ll explain why it matters later.


MELBER: Now, to an exclusive interview on THE BEAT. New revelations, prosecutors explored fraud charges against Ivanka and Donald Trump Jr., including written evidence that Trump children engaged in lies and a cover- up. And this case was closed after Trump associates donated money to the prosecutor`s office, money that is now being returned in response to this report by Jesse Eisinger. And he joins me in a moment.

This all matters more now because some of the key players are implicated in the Russia investigation. The dispute began with Trump SoHo, but it did not begin in SoHo because Trump SoHo was not technically in SoHo. That`s one of a series of falsehoods, exaggerations or lies, depending on who you believe in this tale, which led to an investigation of how the Trump kids allegedly lied to sell those Trump SoHo condos in 2008.

"The Trumps discussed how to coordinate false information they`d given to prospective buyers." And Donald, Jr. spoke reassuringly to a broker concerned about the false statements, Don, Jr. saying nobody would ever find out.

He was wrong. New York prosecutors dug into how the Trumps claimed the condos were 60 percent sold when they were only at 15 percent.

And this new report opens a window into the tough tactics that Trump used when under investigation. Through the front door - when they went through front door, they had typical defense lawyers. But in the side door came this man, Marc Kasowitz, a famous face from his brief stint as Trump`s lead attorney on Russia.

And some of that Kasowitz money made it into the prosecutor`s campaign funds, other parts of the donations did not. Now, head prosecutor Cyrus Vance in New York says he`ll return the money that he got four years ago. He also denies that any of this impacted his decision to close the Trump case.

He suggests even if the Trumps lied about Trump SoHo, not all lies are crimes.


CYRUS VANCE, NEW YORK COUNTY DISTRICT ATTORNEY: At the end of the day, I have to look at all the evidence and weigh all the factors. By the way, not every lie is a crime.


MELBER: Now, this whole tale is a long ways from Trump`s vision for Trump SoHo when he launched it on "The Apprentice" in 2006.


TRUMP: Located in the center of Manhattan`s (INAUDIBLE), the Trump International Hotel and Tower in SoHo is the site of my latest development. When it is completed in 2008, this brilliant, $370 million work of art will be an awe-inspiring masterpiece.


MELBER: Art is in the eye of the beholder. The Trump SoHo was always a half truth. A Trump property not in SoHo. And the new report notes only a third of its units have sold and it was seized by creditors, making it neither Trump nor SoHo.

With me now exclusively on THE BEAT is ProPublica`s Jesse Eisinger, one of the authors of this report. What is the most important takeaway?

JESSE EISINGER, SENIOR REPORTER, PROPUBLICA: Well, there are two. One is that Ivanka and Donald Trump Jr. were targets of a criminal probe. We didn`t know that until this report.

And the second is that, after this unusual intervention from Marc Kasowitz, the case was dropped after Cyrus Vance, the Manhattan D.A. overruled his prosecutors. His prosecutors, the lying prosecutors, his -- the lying prosecutors, supervisors, all the way up to the Director of Investigations, wanted to indict here. And Vance overruled them, reverse them, that`s the big deal.

ARI MELBER, MSNBC HOST: So the people working the case thought they could feloniously indict both Trump (INAUDIBLE).

EISINGER: They were confident about it. Now -- you know, all white collared cases are difficult and there were complications here but they believed in the case and they wanted to bring indictments. In fact, in the spring of 2012, they were escalating the case and that`s when Kasowitzs and helped to shut it down.

MELBER: You say Kasowitzs help to shut it down, your evidence shows that there was money given. You can`t prove why they made the decision.

EISINGER: We don`t -- we don`t allege that and as you`ve said, Vance said he made the decision on the merits. What happened -- we do know that in -- at one point, Kasowitzs becomes one of Vance`s major donors. Then right ahead of the meeting, Vance returns that initial $25,000 donation. Then he meets and three months later they -- Vance close the investigation overruling his prosecutors. A month later, Kasowitzs gets back in touch with Vance`s people and says I would like to donate --

MELBER: So you have -- you have all of these linkages and then you have links --

EISINGER: That`s the fact --

MELBER: Yes, then you have links to the Russian reading here, "Two Soviet- born businessmen, Felix Sater and Tevfik Arif. Sater had a history of running afoul of the law in 1998 and plead guilty to a count of racketeering for a $40 million securities fraud scheme. And Felix Sater has been someone implicated in a lot of machinations around the 2016 potential Russian meddling and potential collusion.

EISINGER: Exactly. He is a felon. He stabbed a guy in the neck with a margarita glass stem as one does in a bar fight. And since then, he was helping to market a Trump property during the election in Russia and said to e-mail the Trump lawyer Michael Cohn and said, we can get our boy elected here.

MELBER: Stay with me. I want to bring in a veteran prosecutor Paul Henderson. Pretty fascinating piece of reporting here and a lot of it now, how do you view it, Paul?

PAUL HENDERSON, FORMER PROSECUTOR: Well, I think what`s really interesting is the story behind the scene in terms of how those decisions got made and then what is the actual behavior of Ivanka and Donald Trump Jr. I mean, to me, the -- in terms of our first approach is, what is the standard that the D.A. used to make the decisions that he made and I can tell that you the standard stays the same. It`s whether or not you believe that you can prove this case beyond a reasonable doubt. Now, that`s the standard but it`s subjectively interpreted. And so, in this case where you have the elected, Vance, making the decision over his prosecutors that are conducting the investigation and presumably, would have been making a charging decision on their own, having that decision taken away from them by the elected official, that doesn`t happen very often but it does happen. And when that elected official makes that decision, this is what the result is.

MELBER: Right. And that`s -- you`re saying that can certainly happen in the normal course and not be anything (INAUDIBLE) that I want to read briefly in fairness from the prosecutor, they basically say, look, there was never sufficient evidence to support criminal prosecution. And they add that the luxury apartment purchasers who were at issue, he reversed course. Basically, the type of people who would have been witnesses ultimately said hey, no biggy.

HENDERSON: Well, that`s true but the caveat to that is, one, they hadn`t finished collecting all the information from the grand jury where people would have been testifying and presumably, would have been subject to possibly perjury charges. And then, there`s the behavior itself which is proven that we already know about from the e-mails passed back and forth from Ivanka and Donald Trump Jr. indicating that they were aware of, agreed to, and had disseminated themselves the statements. And then the issue becomes, are these statements mere puffery or false statements? And if they`re false statements, then it opens the door to criminal prosecution and potential civil liability. So that`s the real issue and that`s the concern.

MELBER: And Jesse -- and mere puffery Jesse, you`re saying, it`s -- in Soho when it`s just in a hole in the tunnel, you don`t to go jail for that. Did the Trump kids -- we`re out of time -- the Trump kids talk to you for this story?

EISINGER: No. They did not. Their lawyer gave us a statement.

MELBER: Jesse Eisinger and Paul Henderson, thank you both. A very interesting reporting, Jesse. Coming up, NBC exclusive reporting that Secretary of State Tillerson called Trump a "moron" and the deeper questions that raises about Trump`s leadership.


MELBER: Many people pressed President Trump to go to Puerto Rico to help the island. The Presidential visit brings focus, maybe even commitments which seem to start to happen when Trump suggested yesterday he`d wipe out Puerto Rico`s debt.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, we`re going to work something out. We have to look at their whole debt structure. You know, they owe a lot of money to your friends on Wall Street and we`re going to wipe that out. That`s going to have to be -- you know, you can say goodbye to that.


MELBER: But what if the President`s word doesn`t mean anything and what if that is established by his own Budget Director because this happened.


MICK MULVANEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: We`ll deal with rebuilding, repair, debris removal, getting the electric grid up, getting the water back running and so forth. We are not going to be offering a bailout for Puerto Rico or for its current bondholders.


MELBER: Or Trump recently blasted the Iran deal.

TRUMP: The Iran deal was one of the worst and most one-sided transactions the United States has ever entered into. Frankly, that deal is an embarrassment to the United States.


MELBER: Which his Pentagon Chief undercut this week.

ANGUS KING (I), MAINE: Secretary Mattis, very quick short answer -- question, do you believe it`s in our national security interests at the present time to remain in the JCPOA? That`s a yes or no question.



MELBER: I do. That`s a yes to the Iran deal. This type of interplay is not normal. And it is concerning no matter what you think of Donald Trump. For opponents, it`s another sign of bumbling, failed leadership and for supporters, it forces everyone to choose between the experts Trump chose and Trump himself. And that is just Trump`s appointees in public. In private, Rex Tillerson calling Trump a "moron" with other officials present this summer as NBC reported today. And Tillerson says this is all petty but he declined the easy chance to deny it.


UNIDENTIFIED MALE: Did you address the main headline of this story that you called the President a moron? If not, where do you think these reports are --

REX TILLERSON, SECRETARY OF STATE, UNITED STATES: I`m not going to deal with petty stuff like that.


MELBER: This story is embarrassing for Trump but that`s not what makes it important. The larger import is the breakdown of basic policy and consistency on matters of potential life and death in the United States. With me now is Byron Dorgan, a former Democratic Senator for North Dakota and Catherine Rampell from the Washington Post. Senator Dorgan, you`re always a serious man. Sometimes you give us optimism. What can you give us here?

BYRON DORGAN, FORMER SENATOR, NORTH DAKOTA: Well, I don`t know. This is the most bizarre thing I`ve ever watched. I`ve been around presidents for 30 something years and this must be some sort of creative tension at design or maybe it is all an accident. But a president undermining a cabinet, cabinet members undermining the president. Let me give you another example. You just mentioned the ones about Puerto Rico and Tillerson. You know, I was in Iowa. I wrote the Renewable Fuel Standard. I was Iowa the day that President Trump showed up and spoke at the same conference.

And he said to Iowans and the rest of the American people, you can count on me on renewable fuels. I`m going to help build the renewable fuels industry. Last week, Scott Pruitt, the Administrator of the EPA says, it doesn`t matter much to me. He said I`m thinking of shrinking the renewable fuels industry. So, you know, what do you believe? Is it just words or is it something more than words? I hope the President made the right choice when he was in Iowa. But you know, this goes on and on with case after case of undermining, back and forth.

MELBER: Well, and that`s the problem. You say you`ve dealt with Presidents before. Senator, you may be familiar with the expression, word is bond.


MELBER: Well, is the President`s word bond to anyone and how much harder does that make it for his officials that we`ve shown or people like you, people in the Senate, people who need to deal with him to try to get somewhere on solutions, if nothing, he says hold on his own people undercut it?

DORGAN: Well, Mr. Mulvany said today with respect to the Puerto Rican debt issues and you can`t just go word for word in terms of what this President said. Look. this President has a significant credibility issue. That`s just a fact. So you really have to understand not just what he says but what does he mean, and that`s very difficult -- you know, onward through the fog here because that`s very difficult to discern.

MELBER: Catherine?

CATHERINE RAMPELL, OPINION COLUMNIST, THE WASHINGTON POST: Look, is it really so surprising that Trump is contradicting his own subordinates when Trump contradicts Trump all the time? I mean, he`s completely inconsistent on almost everything from DACA to taxes to health care. He changes his mind all the time. And even when he thinks he is being consistent, half the time he is contradicting something else that he said. So of course, his word is not his bond and of course, he is going to butt heads with the members of his cabinet. I think it doesn`t really matter to him though when members of his cabinet or others White House officials contradict him on policy matters. He does seem to care a lot if he`s you know, embarrassed in some sense because of a particular private or public insult, that`s in the case of Tillerson.

MELBER: Well, you say -- you say embarrassed. You know, Catherine, feelings matter a lot in life.

RAMPELL: Trump is a snowflake. True.

MELBER: Well, is he -- you say -- is he snowflake? Do you think he was hurt by Rex calling him a moron? Do you think this is going to affect their personal relationship?

RAMPELL: Of course. But it their personal relationship was already frayed, to begin with, right? I mean, long before this story came out and was broken by NBC, Tillerson was supposedly threatening not to come back to D.C. because he was upset about comments that Trump had made to the boy scouts. Tillerson himself having been an eagle scout because Trump had undermined him on Iran, on Qatar, on North Korea on basically every issue that is -- that is important under the sun.

MELBER: And Senator, final word. There is another cabinet vacancy over at HHS. What do you advise people who would consider filling these posts?

DORGAN: Well, walk softly. I mean, Price got fired or I guess "resigned" not because of what he did so much, because of the optics of what he did, how it looked. And the fact is, this President doesn`t want -- he doesn`t want to be somebody who appears embarrassed by his staff. So you know, it`s all about optics. So whether he looks bad or not, that ought not to be the standard in my judgment.

MELBER: Right. And it raises the question of whether electing someone who`s famous for branding leads to do a branding driven presidency, a question we`ll continue to explore. Senator Dorgan, Catherine Rampell, thank you, both.

RAMPELL: Thank you.

DORGAN: Thanks.

MELBER: Ahead, this warning from a top Republican that Russian hacking will continue into 2018. Senator Jeff Merkley is here live. And I have something to say to Mark Zuckerberg about fake news and his civic obligations. That`s our closing thought tonight.


MELBER: Leaders of the Senate Intelligence Committee today saying they`re still investigating this possible collusion between the Trump campaign and Russia. And not only that, as we`ve been reporting Russian hackers targeted the election systems or Web sites in 21 states, today a warning they could be back in 2018.


RICHARD BURR (R-NC), CHAIRMAN, INTELLIGENCE COMMITTEE: I will confirm is that the Russian intelligence service is determined, clever, and I recommend that every campaign and every election, officials take this very seriously, as we move into this November`s election, and as we move into preparation for the 2018 election.


MELBER: With me now, Democratic Senator Jeff Merkley who sits on the Foreign Relations Committee. Your state, Oregon, one of those 21 states targeted. You`ve expressed these he concerns before, also about possible collusion. Walk us through how Oregon and these states get ready for its (INAUDIBLE) call from your colleagues today and any thoughts you want to share on the collusion part of the investigation.

SEN. JEFF MERKLEY (D-OR), FOREIGN RELATIONS COMMITTEE: Sure, you bet. One of the most vulnerable parts of Oregon is our voter database. And that is why we care for -- back-ups are kept so that it can be restored if it was successfully hacked. But our voting system which involves vote by mail is basically impossible to hack. The ballots are mailed out. Citizens have two and a half weeks the return them. They are counted by a system and tallied without being connected to the internet. So everybody in the country who wants a system that is resilient to such hacking should look at Oregon`s system s.

MELBER: So you have that confidence, then on collusion, yes sir.

MERKLEY: Yes, in return to the collusion, well, the plot just gets thicker. We now know thanks to information released today that very carefully crafted targeting was done in Michigan and in Wisconsin. Michigan which had a vote difference of 10,000 votes, Wisconsin 22,000 votes, in both cases, less than 1 percent. And how did this sophisticated targeting occur? Who provided the insight to Russia on how to target --

MELBER: Are you saying, Senator -- are you saying that the circumstantial evidence suggests they would have need American expertise to do that?

MERKEY: Yes. That is certainly the likely result. They had their ads targeted in the concept of attacking issues related to race. Certainly, they were engaged in other strategies --

MELBER: So you`re saying -- Senator, you`re saying the open question is which Americans -- we talk a lot about which campaign. You`re saying it looks like some Americans helped the Russians and the bigger question is just whether they were affiliated with Donald Trump or not.

MERKLEY: As I`m saying, it`s very likely. That`s very likely and we need to get to the bottom of who was involved here.

MELBER: And Senator, because your Committee oversees the State Department, I have to ask you about these reports. The Secretary of State Called the President a moron. Your view of how that affects diplomacy or our standing in the world.

MERKLEY: Well, it doesn`t affect it as much as the continuous undermining of our Department of State on the most serious issues, including Iran and North Korea and Qatar in the Middle East. On North Korea, there is no military option. North Korea has a significant deterrent capacity conventionally as well as having nuclear weapons. And when our President demeans and tries to undo any effort to apply pressure to provide a nonmilitary outcome favorable to our national security, he is doing great damage to our nation. And I think Tillerson was trying to find the correct right path to apply pressure. And have the President undermine him is a huge mistake on the President`s side.

MELBER: All right. I don`t want to diminish the complexity, but it sounds a little bit more like you`re more team Tillerson than team Trump at least as it relates to the policy orientation.

MERKLEY: In this case, yes.

MELBER: In this case. Senator Jeff Merkley, a busy day for you. And you made some news here I think as well. I appreciate you joining us.

MERKLEY: Thank you, Ari.

MELBER: Coming up, a message to Mark Zuckerberg about fake news.


MELBER: Today`s Senate Intelligence Russia briefing focused on Collusion. But the top Democrat there also said tech companies are finally stepping up to their responsibilities after Russian meddling.


MARK WARNER (D-VA), RANKING MEMBER, INTELLIGENCE COMMITTEE: I think the companies are increasingly understanding that their actions need to match their public statements that they realize how important it is to maintain the integrity of our democratic process.


MELBER: That is true, it is certainly a long ways from Mark Zuckerberg`s first response to his company`s role in spreading fake news after the election.


MARK ZUCKERBERG, CEO, FACEBOOK: Personally, I think the idea that, you know, fake news on Facebook of which it`s a very small amount of the content included the election in any way I think is a pretty crazy idea.


MELBER: A pretty crazy idea. Now, Zuckerberg has walked that statement back. The company is now cooperating with investigators. But how is Facebook stepping up to its civic obligations rights now? Well, it`s again a conduit for fake news, this week spreading falsehoods in the wake of the mass murders in Las Vegas. In fact, even the company`s official safety check page for the shooting displayed a false item from alt-right news which incorrectly identified the shooter describing him as quote a Trump hating liberal. Yes, this week, Facebook promoted fake news with a political agenda in the midst of this emergency when Americans badly needed vetted facts.

And Facebook responded by blaming their algorithm. "We`re working to fix the issue that allowed this to happen in the first place and deeply regret the confusion this caused," the company said. Google also prominently spread fake news this week about Las Vegas. Look at this false headline about the shooter. I`m showing it to you to fact check that this is not true. But it falsely claims, "Las Vegas shooter reportedly a Democrat associated with anti-Trump army." Again, that`s not true but that false account of this gunman in the midst of this terrible week spent hours at the top of Google`s search results for that man`s name. So if Google were a T.V. channel, that would be the equivalent of running the false story on the screen for hours and hours after the shooting on Monday.

And of course, we all know, Google is not a T.V. channel. It actually reaches way more people. Now that false claim came from trolls from 4Chan, a notoriously toxic online message board which vocal far-right contingent which has spent the night scheming how to pin the shooting on liberals, that according to reporting in the New York Times. We only know about all of that this week because of journalists tracking it down. That`s the plot that Google and Facebook said their algorithms couldn`t catch. It`s the same pattern though as the Russian ads. These companies, we know, they`re drilled. They boast to investors about their ability to target, to pinpoint, to monetize everything. And then when it comes to their civic responsibility, they act like rookies (INAUDIBLE) who can`t handle their own algorithms. And these companies want to be neutral.

As we`ve reported on THE BEAT, they want to be neutral because it`s profitable. But you can`t be neutral about lies. You can`t be undecided about spreading lies in the middle of the emergency we faced this week. You know, in the movie The Social Network, the fictional Mark Zuckerberg character argues sometimes technology reveals truth. He has this line where he says, you don`t need a forensics team to get to the bottom of this, he says that to those guys suing him over Facebook. He says, "If you guys were the inventor of Facebook, you would have invented Facebook." Now that fictional line on this fictional story may apply to some truths. If Facebook really wanted to get to the bottom of this, they`d have gotten to the bottom of this. Here`s looking at you, Mark. That does it for this hour. Also a programming note, at 9:00 p.m. Eastern tonight, I will be in for Rachel Maddow, if you want to tune in. And I`ll be back here tomorrow at 6 p.m. Eastern. As for right now, "HARDBALL" with Chris Matthews is up next.




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