The Beat with Ari Melber, Transcript 10/5/17 Reuters reports Mueller eyes Trump-Russia dossier

Guests: Maya Wiley, Joe Conason, David Berzonsky, Joan Walsh, Michael Grimm

Show: THE BEAT WITH ARI MELBER Date: October 5, 2017

Guest: Maya Wiley, Joe Conason, David Berzonsky, Joan Walsh, Michael Grimm

CHUCK TODD, MSNBC HOST, "MTP DAILY": Although Prague is pretty awesome any time of year. We`ll be back with more "MTP Daily" tomorrow. But THE BEAT with Ari Melber starts right now.

Ari, let`s go have a beer in Prague with Ivana Trump.

ARI MELBER, MSNBC HOST, THE BEAT: Sign me up, baby. Sign me up. Thank you, Chuck Todd. I appreciate it.

Now, there`s big news in the Russia investigation tonight, about what Bob Mueller is probing now. Do you remember Donald Trump`s very first press conference as president-elect? It was bizarre.

Trump tried to counter concerns about foreign governments enriching him by showing the supposed paperwork for creating new ethics rules for Trump hotels. The folders you see there were shown later to be purely voluntary ethics requirements.

He brought out a private lawyer there to press his case. And then he waded into a controversy that Jim Comey had just told him about in their first meeting at Trump tower. The dossier.


DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES: I want to thank a lot of the news organizations here today because they looked at that nonsense that was released by maybe the intelligence agencies, who knows, but maybe the intelligence agencies, which would be a tremendous blot on their record if they, in fact, did that. A tremendous blot. Because a thing like that should have never been written.

It`s all fake news. It`s phony stuff. It didn`t happen. It was a group of opponents that got together, sick people, and they put that crap together.


MELBER: That was weird. Most Americans hadn`t even heard much about the dossier at the time, but it clearly struck a nerve.

Trump`s response also unnerved Jim Comey. And it was what moved him to immediately start typing away on an FBI laptop in his motorcade leaving Trump Tower, spawning the now famous Comey memos, which Congress heard about and which helped propel the appointment of Bob Mueller as special counsel along with Jim Comey`s firing.

No one knew it then, but all those roads led back to the dossier. Now, let`s be clear. That doesn`t mean the dossier is true. Any lawyer can tell you about exciting, controversial, potential evidence that turns out to be a nothingburger.

In fact, three Russians are suing a firm behind the dossier over libel right now. But the news tonight is Bob Mueller is not yet dismissing the dossier as a nothingburger.

Bob Mueller is investigating whether it is a something-burger. He is taking over FBI inquiries into a former British spy`s dossier of allegations of Russian financial and personal links to the Trump campaign and associates, sources familiar with the inquiry tell "Reuters".

Now, Mueller`s office declined to comment and that report comes amidst the news that we brought you last night that the Republican chair of Senate intel says their pursuit of the dossier hit a wall.


SEN. RICHARD BURR (R), NORTH CAROLINA: 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.

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.

Burr`s Democratic counterpart in the House had the same problem, he told me in an interview last night.


MELBER: On the dossier, your committee also wants to talk to Steele. How do you get someone with his background abroad to talk at all?

REP. ADAM SCHIFF, (D), CALIFORNIA: Well, we made outreach to Mr. Steele and we`ve offered, Mr. Conway and myself, to go out to London to sit down with him if that`s a more comfortable way for him to participate and provide whatever information he can to the committee. I hope he will take us up on that.


MELBER: The FBI has more than hope on its side. It has a history with the dossier author, Chris Steele, including an initial plan for Steele to contract with the FBI to continue that Trump research which then fell apart.

Also, reports that the FBI got names of some of the dossier`s sources from Steele. The question is whether those names lead to something that matters.

There`s an old southern saying, the hit dog always hollers. Meaning, if you`re making a lot of noise, maybe you have a guilty conscience.

Investigators don`t know, at this hour, whether the Trump campaign has a guilty conscience. But at that first dossier press conference, there was certainly hollering.


TRUMP: It was disgraceful, disgraceful that the intelligence agencies allowed any information that turned out to be so false and fake. Out. And that`s something that Nazi Germany would have done and did do. I think it is a disgrace.


MELBER: Joining me is Katty Kay, is an anchor for "BBC World News America". Ned Price served as a spokesman and senior director at the National Security Council under Barack Obama and also worked as a CIA analyst.

Katty Kay, the dossier is back. A lot of serious people are looking at it.

KATTY KAY, ANCHOR, "BBC WORLD NEWS AMERICA": Yes. I mean, the fact that the FBI is considering this dossier, and yet we know there were some mistakes in the dossier, right? There was the name of a company that was wrong. There was a retreat location in Russia that was wrong as well.

So, some facts about this dossier seem to be wrong. But there must be enough in this dossier for investigators to be taking it seriously and for Mueller to be looking at it at all.

And the big question I think tonight is where is Christopher Steele. Clearly, the senators wanted to speak to him. Adam Schiff wanted to speak to him as well.

The senators were making it clear, we can compel you, we can get you to talk to us, and that they would very much like to interview him to find out what his sources were, in particular, and who was paying him.

MELBER: Well, he`s in a place where a lot of people speak like you do.

KAY: I`m afraid it doesn`t give me a hotline to Christopher Steele. I wish I could deliver him for you, Ari.

MELBER: Ned, your view?

NED PRICE, FORMER SPOKESMAN AND FORMER SENIOR DIRECTOR AT THE NATIONAL SECURITY COUNCIL UNDER BARACK OBAMA: Well, that`s right, Ari. I think there are some elements that have proven not to be true.

But I think when you take a look at the dossier in toto, you realize that there are some components there that have been borne out over time.

The key report in the dossier is dated June of 2016. And Christopher Steele writes in that report that the Russians will launch a multifaceted effort to denigrate Hillary Clinton and to advantage President Trump, doing so with cyber means as well as traditional means involving some Trump campaign officials, including Paul Manafort.

All of that probably sounds very familiar because as the administration first put forward in October of last year and the intelligence community piled on in January.

MELBER: You`re raising such an important point. I want to pause on it and I want to get fancy with you if you`re OK with that. The epistemological question, how did he know what he knew then? If I take your inference, you`re saying that by knowing it then and early, before everyone else did, before the media did, before it was really public, that suggests that he had good sourcing?

PRICE: Well, I think we can take a look at a couple of things to suggest he has good sourcing. First of all, Christopher Steele is a well-known entity within intelligence circles.

He was based in Russia for a long time. He was head of the Russia desk at the British secret intelligence service. To that, he is known to CIA. He is known to FBI. He actually worked with the FBI on their FIFA investigation prior to this.

So, he is someone who is trusted within the industry. So, I think that lends credence to this document. And I think you take a look at what he produced in June, and that, in and of itself, does not suggest that everything in the dossier is true.

But there is enough that has been corroborated over time that I think it begs on the part of Mueller to take a close look at this and to actually include it in his investigation to see if his team can get a better sense of those sub-sources on whom Christopher Steele relied for this information, some of which again has been corroborated.

KAY: Right. This is the key issue, right? They have to be able to talk to Christopher Steele to find out how much of this is accurate, given the inaccuracies that we know about in the moment.

And I think some of the skepticism about the dossier early on when journalists were talking about it kind of behind the scenes in Washington DC was some of the salaciousness, right? As soon as people saw, heard and read about some of the salaciousness stuff, including the video, the allegations of prostitution, they thought, wow, this is too far out there.

And I think that`s why the senators were clearly so frustrated. And I was surprised at the pointedness with which Burr and Warner were talking about Christopher Steele and the need to talk to him and their frustration about not being able to get hold of him because, without him, they can`t know how reliable those sources are.

We just don`t know that. I agree with you, Ned, there`s circumstantial evidence that suggests that he was in on something earlier than most people were in on something. That doesn`t in and of itself mean that his sources are solid, right, the way through.

MELBER: Stay with me. I want to add into our discussion here, Michael Isikoff, a chief investigative correspondent for "Yahoo! News", who has reported extensively on the dossier, including if Christopher Steele was an FBI asset who assisted with a corruption investigation, which we had just touched on.

Michael, I want to add your reporting and views to this because Donald Trump and his allies may wish the dossier would go away. But as I`ve just reported, you`ve got a Republican chairman talking about, I want to get to the bottom of this. You`ve got Mueller reports, according to "Reuters", looking at it, which you would expect, given his purview.

And then, add to this, for your analysis, the "POLITICO" headline here, the hunt for Trump dossier inflaming the probe, "two Republican House Intelligence Committee staffers" traveled to London this summer, trying to track down, guess who, also Christopher Steele. Michael?

MICHAEL ISIKOFF, CHIEF INVESTIGATIVE CORRESPONDENT, "YAHOO! NEWS": Well, I think it is worth remembering that from what we know as Christopher Steele was working on the dossier and developing this information, long before it became public, he himself reached out to the FBI.

The account he has given is that he was so concerned about what he was finding, he thought the FBI with whom he had a relationship ought to know it.

And there are at least two contacts, one in July and one later, August, September time frame, when he speaks to, meets with FBI agents with whom he had a relationship.

And so, I`m a little puzzled by why people are all excited right now that Bob Mueller would be looking for it and we need to find out his sources and sub-sources because one can presume that any FBI agent worth his salt contacted by Christopher Steele back last summer would have been pressing for that same information.

And it was information that Christopher Steele felt he could divulge without jeopardizing the lives of his sources or sub-sources, he would have given it to them then.

So, now, whether that led anywhere, whether that allowed the bureau to develop information further that corroborated or knocked down some of what Steele found or wrote, we don`t know.

But the fact is, from everything we know is Steele reached out to the FBI long ago. There was contacts. The FBI had every opportunity to question Steele about his sources.

MELBER: Well, and this goes to the point I raised at the top, Ned - bringing Ned back here - the nothing-burger or this is something-burger. Michael is saying that the FBI history here means it is a safe circumstantial bet that they`re digging into the dossier, the dossier that so upset and enraged Donald Trump that he acted in a way that Jim Comey started taking the kind of memos he never used to take before.

And so, then the question is, what is from an investigative and intelligence view, Ned, the hardest part of the dossier that Mueller would be looking at? Is it the money trail?

PRICE: Well, it`s a couple of things. It`s the money trail, but it`s also the so-called compromise, the potential that the Russians have compromising information on Donald Trump.

And this goes back to the most salacious allegations that are in the dossier and the elements that so riled up Donald Trump in that January 11 press conference.

So, it`s the fact that - if the allegation made in the June 2016 reported contained within the dossier that his campaign was colluding with the Russians, but further to that, it`s this potential for compromise that could suggest that the Russians could leverage information that they have over Donald Trump and/or his associates to extract concessions, now that Donald Trump is now the commander-in-chief.

MELBER: And, Michael, briefly, that goes back to the landing point, which is did Donald Trump understand then, and does he understand now, that the traditional role of our intelligence agencies is to serve and protect him and they gave him that information to help him. Not as he put it in the clip I just played to somehow hurt him.

ISIKOFF: Yes. I don`t think that`s how Donald Trump saw it or perceived it. Let`s remember, it was James Comey, then the FBI director, who personally delivered the dossier, or a summary of the dossier, to President Trump, then president-elect Trump, when they briefed him on January 6th.

And I think it`s a reasonable assumption that that`s what tipped Trump off at Comey and ultimately led to Comey`s firing.

Everybody else had left the room. James Clapper had left the room. John Brennan had left the room. Comey stayed back because it was decided he was going to be the one that was going to give this embarrassing, awkward information to president-elect Trump.

MELBER: Because he drew a straw so short, it was like a sub-toothpick.

ISIKOFF: And, ultimately, was fired by Trump.

MELBER: Well, that`s one theory of the case. Michael Isikoff, Ned Price and Katy Kay, thank you all for your reporting. Really appreciate it.

Coming up, did Vladimir Putin get help from Americans for the hack? New reporting tonight on that question.

And growing pressure on Jared Kushner and Ivanka Trump. I`m going to speak with Democratic Congressman who has a new call for accountability. We`ll explain.

And my live exclusive interview with the congressman who went to jail for tax evasion after threatening to throw a reporter off a balcony. He is out of jail. He is with Steve Bannon. You see there, that new picture. And he is joining me live on THE BEAT.

I`m Ari Melber and we`ll be right back.


MELBER: We have some breaking news that just came into our newsroom. Reports from NBC News reporter Ken Dilanian that investigators for special counsel Robert Mueller "recently traveled to the U.K., London specifically, to speak to Christopher Steele, the author of that infamous dossier.

Again, this news coming into the newsroom right now. Viewers of THE BEAT may recall, moments ago, I was reporting on this issue because of a related "Reuters" report about Bob Mueller working on the dossier and inheriting the FBI inquiry into it.

Minutes later, as is so often the case these days, we have this breaking report. NBC News reporting that Mueller`s office indeed has made contact with this elusive individual, Christopher Steele, behind that controversial dossier, and, of course, also the man name-checked in that unusual briefing from the leaders of the Senate Intelligence Committee yesterday when they said they had hit a "wall" in reaching him.

The news right now breaking. Bob Mueller has not hit that wall. And for more on this, I turn to Congressman Ted Lieu. He`s a member of the Foreign Relations Committee, who joins me here on The Beat.

Congressman, I`m going to read this again to you in full because I know that since the time you walked into our Washington studio, this news broke.

Let me just read it to you. Investigators from special counsel Robert Mueller`s office "traveled to London" recently to interview Christopher Steele, that dossier author. Your reaction?

REP. TED LIEU (D), CALIFORNIA: I think this is important news that shows that the special counsel is not messing around. He is tracking down all the leads.

And based on various reports, it`s clear that at least some, or perhaps many parts of the dossier, are in fact true. So, I am very pleased that special counsel Mueller had a chance, at least his investigators, to interview Christopher Steele.

MELBER: You say reports suggesting it is partly true, at least. Your view of what this says about the Mueller investigation`s view of the potential veracity and also why did they go to London? Why didn`t they try to get Steele to come to the town you`re in?

LIEU: Mr. Steele probably didn`t want to come here. But however they got to him, they did in fact get to him, and that`s good news.

You can tell a lot about the actions of the special counsel. When special counsel Mueller first came on, he looked at the evidence, and what did he do? Did he say, oh, I need to hire more investigators and look around? No. He hired a lot of prosecutors.

You hire prosecutors in order to prosecute. And then, he convened a grand jury. You convene a grand jury because you want to indict people. So, we can tell based on his actions that he sees criminal behavior happening.

MELBER: I want to get your view on another big issue, which is the conduct of Jared Kushner and Ivanka Trump, who play dual roles, family members of the president, as well as government advisers to him in the White House.

That wouldn`t normally be even legal if they were, for example, promoted as potential cabinet members, but they found a loophole, in that they are advisers in the White House.

You have been speaking out, and I believe have a new proposal about this. What is your view given the reports of their use of private e-mail and other questions about them, their access to classified information at this point in time?

LIEU: Rep. Don Beyer and I wrote a letter to White House counsel asking for Ivanka Trump`s security clearance to be revoked as well as Jared Kushner`s and that they should be investigated.

There are a number of actions they took that anybody else with a security clearance would have had their clearances revoked. They, for example, not only used private e-mail for official business, but they also tried to reroute their emails through the Trump administration in an apparent to hide those e-mails.

And this and Jared Kushner misled people in his first two security clearance forms by failing to disclose all his Russian contacts. And the "New Yorker" reported yesterday that Ivanka Trump engaged in real estate fraud in 2012.

I was in the Air Force. I had a high-level security clearance. If any of my colleagues had done half of the things Jared and Ivanka did, their security clearances would have been revoked immediately pending an investigation.

MELBER: You`re saying as a veteran, and from your experience, you believe they`re getting what, a special treatment?

LIEU: Absolutely. I don`t even know why they still have a security clearance. It makes a mockery of the security clearance process. I`m sure General Kelly is aware that they do not meet the standards for holding a security clearance.

And keeping in mind, not only does this affect their integrity, their actions they`ve engaged in, but they are compromised. So, foreign powers know that they are in trouble and foreign powers can now leverage this against Jared and Ivanka, they can threaten to leak information, whether it`s true or false, to attempt to get them to do things.

So, this is a very big problem for national security. They should have their security clearances revoked immediately.

Congressman Ted Lieu, on a busy news day, thank you for joining me. I appreciate it. I hope to see you again on THE BEAT.

LIEU: Thank you, Ari.

MELBER: And if you`re just tuning in, we have been reporting on this breaking news from NBC News that the author of the dossier, Christopher Steele, has made contact and spoke with the investigators from Bob Mueller`s Russia probe. That is brand-new breaking news. We`re going to have more on that throughout our hour.

Now, coming up, a BEAT exclusive. A former GOP congressman, Michael Grimm, is out of jail and running for office and in talks, as you see here, with Steve Bannon. But believe the dogged by this moment.


MICHAEL GRIMM, FORMER MEMBER OF THE HOUSE OF REPRESENTATIVES: Let me be clear to you. If you ever do that to me again (INAUDIBLE). No, no, you`re not man enough, you`re not a man enough. I`ll break you in half. Like a boy.


IVANA TRUMP, DONALD TRUMP`S FIRST WIFE: He`s still asking me for advice, yes.

UNIDENTIFIED MALE: What was he asking your advice about?

TRUMP: He asked me, should I tweet, should I not tweet.

UNIDENTIFIED MALE: He asked you, should he tweet?


UNIDENTIFIED MALE: And what have you told him?

TRUMP: I said I think you should tweet.


MELBER: I think you should tweet. That is new from Ivana Trump talking about her conversations with her former husband, President Donald Trump.

Meanwhile, the tweets are pouring in with fallout from NBC`S report that Rex Tillerson called Trump a moron and that he considered resigning.

Today Trump tweeted, "Tillerson never threatened to resign. This is fake news put out by NBC News. Low news and reporting standards. No verification from me."

The story, as you may recall, reported something Tillerson said that Trump didn`t allegedly know about. So, his verification would be totally irrelevant. And Tillerson did not personally deny the moron part in that unusual press conference that he held yesterday.

Today, he was out with Mike Pence. And despite other reports about a wide rift between Trump and his cabinet, there is "a reported suicide pact" forged between Mattis, Mnuchin and Tillerson whereby all three cabinet secretaries vow to leave in the event that the president makes moves against one of them.

With me now to make some moves of their own, Joe Conason is editor-in-chief of "The National Memo" and an editor-at-large at The Investigative Fund, and Maya Wiley is a senior VP of social justice at The New School and a former counsel to the mayor of New York.

Maya, I start with you. If there is a suicide pact, and it means, I believe, some kind of Trump administration career suicide, nothing more than that, what does that tell you about what it`s like? And in your time in government, did you ever have any such pacts when you were serving the mayor?

MAYA WILEY, FORMER COUNSEL TO THE MAYOR OF NEW YORK: I didn`t need a pact. Happy to say. I`d call it a survival pact, not a suicide pact.

MELBER: Interesting.

WILEY: Because actually one of the things that happens in government is you find your allies and you find ways to protect yourself to keep moving the mission. And that`s actually a strategy that happens in many administrations. And often, is about survival.

So, it may be more about the news coverage and not the actual relationship. I mean, think about the fact that there was a pact at the beginning of the administration, right, where there was Mattis and, I believe, Kelly who said they wouldn`t be out of the country at the same time, right, so they could keep the mission moving.

MELBER: So, this is more about having a squad.

WILEY: I think it is a posse.

MELBER: What would you call it?

JOE CONASON, EDITOR-IN-CHIEF, "THE NATIONAL MEMO": I think a posse sounds about right. I mean, the whole thing is so disorganized that whatever they can put together to try to protect the public interest and themselves, their own reputations - one of the problems, Ari, with Donald Trump is that he taints the reputation of everybody he touches.

We saw that this week Cyrus Vance and all the other stories, the DA of Manhattan -

MELBER: Right. Which we covered yesterday about the money.

CONASON: Who was, up until yesterday, had a sterling reputation, as far as I know. But now, it looks bad because of his association with Donald Trump`s lawyer.

So, for Mattis, Tillerson, McMaster, these are people who had excellent reputations one way or another up until now and now have to defend their reputations, but also try to defend what they see as the public interest, and it is not easy in these conditions.

MELBER: Right. And the military side of it, I think, matters because you have people who have, at least previously shown, nonpartisan credentials.

There is a very interesting tweet that I know a lot of folks were looking at from a reporter here about John Kelly yesterday, saying General Kelly was originally going to be on Air Force One to Vegas with Trump today - as of yesterday - but was pulled off the flight, I`m told, and the White house not answering questions about it. From reporter Jennifer Jacobs.

John Kelly definitely has his hands full. What is he supposed to do with, as you put it, this pact or survival plan?

WILEY: Well, part of what he has to do is hold the cabinet together. So, the last thing he wants as the chief of staff is to lose talent, not just talent, but sort of the adults of the administration that are kind of making sure not just that the mission is staying straight, but trying to do their best to do what`s right for the country.

If we think about the Iran nuclear deal if we think about North Korea where there are places where Mattis himself has also been at odds with the President along with Tillerson. So it really isn`t just Tillerson.

ARI MELBER, MSNBC HOST: Well, I think you`re making such an important point Maya, which is it`s so much broader than -- we talk about the parties. But it`s not really on a lot of these issues about parties at all, it`s about this person, Donald Trump, who is as 50 Cent said, became President by accident and acts like it, is what he said in an interview. Here is Senator Bob Corker, I want to play this sound. This is really interesting. Listen closely to the word he uses because he as a Republican, he happens to be, basically implies we need these people on the wall, we want you on that wall because on that wall these generals and such are the line, and Tillerson are the between Trump and further chaos. Take a listen.


SEN. BOB CORKER (R-TN), CHAIRMAN, FOREIGN RELATIONS COMMITTEE: I think Secretary Tillerson, Secretary Mattis, and Chief of Staff Kelly are those people that help separate our country from chaos and I support them very much.


MELBER: Joe, that quite an admission.

JOE CONASON, EDITOR-AT-LARGE, THE INVESTIGATIVE FUND: Well, yes, but it`s because these people, these -- you know, those three members of the cabinet grew up in an environment where diplomacy was valued. They understood what the different parts of government were supposed to do. They knew that military force was a last resort, not something to be joked about or tweeted about as particularly not nuclear military force. And the President, unfortunately, understands none of those things. He has no conception what diplomacy is for or how it works. He has the idea of the seriousness of the statements that he makes about the use of military force. And to these three men, and I presume McMaster, too, this is anathema. I mean, these -- we`re talking about people`s lives. And in the military, they don`t joke about this. So --

MELBER: Right. It`s like (INAUDIBLE) has thousand.


WILEY: Especially if you`re --

CONASON: How that thing to do with party. How that thing to do with party

MELBER: Out of time. Go ahead.

WILEY: And when you`re tweeting that your Secretary of State is wasting his time when he is in the midst of a diplomatic meeting that is trying to --

MELBER: With nuclear implications.

WILEY: With nuclear implications.

MELBER: Maya Wiley and Joe Conason, we always learn something from you guys and I feel a little more somber, a little more serious coming out of this. Is that a good thing? Maybe?

WILEY: I think so.


CONASON: No avoiding it.

MELBER: Thank you both. Now, the Republican-led Congress just let a health care program for 9 million children expire this week. And I have a special report next from speaking to a father who says this program is vital to his daughter`s care. And a former felon, Congressman Michael Grimm, is out of prison running for Congress again with Steve Bannon`s new interaction. That huddle you see there, my live interview with him straight ahead.


MELBER: Time is up. A key health care insurance program for nine million children in the United States just expired after Republicans in Congress failed to renew it. Now, we`re about to hear from a parent who says this program helps keep his daughter alive. Here`s the policy context though. The Children`s Health Insurance Program also known as CHIP uses Medicaid and state programs to ensure that Americans get health care. And while what`s often been a bipartisan priority in Congress, Republicans ducked out this year. They missed key deadline on Sunday to renew it and that means funding is now on pace to run out. A reporting shows that in just 56 days, the first states will lose funding for kids.

Now, there are a lot of countdown clocks in the news. I admit. Some of them are even trivial. Here is one we think that matters and that 9 million families are watching closely. 56 days left for children`s health care unless our Congress acts. As I mentioned, Republican missed the Sunday deadline showing no urgency so far. And by the way, after ignoring the deadline, they are headed for vacation for the next two weeks. David Berzonsky joins me now, he spoke out about it this week saying his nine- year-old daughter Luna who has epilepsy could lose vital healthcare coverage if Congress does not act. David, we wanted to hear from you directly as someone involved in this, affected by this with your family. What does this program do for your family?

DAVID BERZONSKY, DAUGHTER INSURED THROUGH CHIP: Well, the CHIP program is a bipartisan program that is set up about 20 years ago. And what it does is it provides health insurance, comprehensive health insurance for families of low to moderate income, which is a pretty broad spectrum of people in America because the program covers people up to almost a median income families, for us a family of four. So they provide us with our health care insurance. It`s a good health insurance, it`s a reliable health care insurance and it`s the kind of health insurance I was able to count on when my daughter began to have seizures and was able to focus on caring for her and not worrying about how it pay the costs.

MELBER: Yes. And this is your daughter Luna, she is nine now I understand.

BERZONSKY: Yes, she is.

MELBER: And we got some pictures up and I understand that you shared these with us and she also plays the piano and seems to be doing pretty well from what we`ve heard from you. As for what CHIP covers, immunizations, doctor visits, prescriptions, 39 percent of kids here covered by Medicaid or CHIP. So where does this go? What happens if your coverage does run out of Congress? It does enact as I say up in for some people, 56 days is when it hits.

BERZONSKY: Right. So if the funding runs out, then the children who are on the CHIP coverage will no longer have health insurance. And because of the way in which the Affordable Care Act is currently structured, if you are eligible for CHIP coverage, you are not eligible for being on the Affordable Care Act. So in order for those children to get any coverage at all, that would require Congress to alter the Affordable Care Act to allow for children currently on CLIP to get health insurance. So, for the most part, I think could you say pretty fairly that those 9 million children would have no health insurance at all.

MELBER: Yes, I mean, it`s very real. And hearing from you as someone who`s -- you sound very knowledgeable about the broader policy issues but also something that hits home. I wanted to add someone to our conversation if that`s alright with you.


MELBER: I wanted to mention you know, as you well know, the political roots of the program are very broad when it started. Massachusetts Liberal Ted Kennedy and Utah Conservative Orrin Hatch teamed up for this idea and President Clinton signed it in 1997. I want to bring in National Affairs Correspondent for the Nation, Joan Walsh, who has discussed this issue and the impact with me before. It used to be less than divisive. What do you see is happening now?

JOAN WALSH, NATIONAL AFFAIRS CORRESPONDENT, THE NATION: Well, Ari, I just think that this has become a ridiculously partisan issue, as we know. And I wish that families like David`s and folks who are hanging by a thread watching political games be played with the Affordable Care Act, I wish they could sue the Republican Congress for pain and suffering. Because people like David and Luna and David`s wife are now worried about something that they`ve been able to really, you know, relax about and take care of Luna`s schooling and her great piano playing and now suddenly they`re worried.

As you said, Minnesota, North Carolina, Arizona, I think the District of Columbia, they`re going to run out in December, other states will are not out by March, and there`s just --there`s no urgency. There`s less than urgency. The house is apparently playing partisan games with this where Republicans are demanding that if they extend CHIP, that they -- the money comes out of Medicare and the money comes out of the Affordable Care Act. No one is asking the tax cuts for the wealthy they paid for. No one is asking that new budgets appropriations for the military suddenly be paid for with cuts elsewhere. It is only when it comes to health care for our children and our disabled folks and our low-income folks that suddenly we got to figure out a way -- a divisive way to pay for it. So, my heart goes out to David. I really hope that Congress does the right thing here.

MELBER: David, response. Speak to that and also the insurance rate for children more than doubled under this program. So the uninsured rate, in other words, said is it dropped. Meaning through this program, which started out bipartisan, more and more American children were covered long before any debate over "ObamaCare." David?

BERZONSKY: Yes. So, I mean, the way I see it is, it`s relatively simple. Like, I want my child and every child in America to have good, solid, reliable health insurance. And I don`t think that`s really a political issue. I don`t think anybody really feels that children shouldn`t have good healthcare. And so, I would like to see our Congress do the right thing (AUDIO GAP) pass a clean (AUDIO GAP) of the CHIP program. It`s vital important for a lot of people. And you know, I can`t speak to the larger politics of the Affordable Care Act but you know, from my perspective as a father and business owner, I do see incredibly irresponsible and reckless games being played to try to score political points and I think it`s really tragic and immature really and I hope they can grow up and do their job that we put them there to do.

MELBER: David, just speaking for myself, I really appreciate you speaking out and sharing your story and sharing what you and your family is going through which I know is always can be a difficult thing. This is a huge story and if you`re watching at home and you hadn`t heard that this deadline ran, I think that`s partly our fault in the media, maybe that`s partly the politician`s fault for letting the deadline run but my thanks to David Berzonsky for putting it on the radar here and Joan Walsh for your reporting and coverage as well.

WALSH: Thank you.

MELBER: Thank you both. Now, coming up, controversial former Trump Adviser Steve Bannon is backing a new primary candidate. This time he wants Michael Grimm to get his seat back. The former Congressman served prison time for tax evasion and he`s here live on THE BEAT next.


MELBER: Donald Trump starts a lot of fights but in the first fight of his Presidency where voters weigh in, Trump lost, that bruising Alabama primary where Steve Bannon`s insurgent candidate beat Trump`s Senate Incumbent. Now Bannon is huddling with a new primary challenger Michael Grimm, a former Marine and FBI agent who became nationally known when he was indicted by federal prosecutors and pled guilty to tax evasion in 2015. Grimm was released in April after seven months in jail and whether national Republicans like it or not, he is back in the spotlight to force another potential GOP civil war with a primary challenge to get his old seat back. Ex-congressman and ex-con Michael Grimm is here on THE BEAT this evening and Grimm had a widely covered confrontation with a journalist who asked him about other legal allegations against him in 2014. In fact, Grimm threatened to throw that reporter off the Capitol balcony.


UNIDENTIFIED MALE: And just finally, before we let you go, since we have you here. We haven`t had a chance to kind of talk about some of the--

MICHAEL GRIMM, FORMER CONGRESSMAN, NEW YORK: I`m not speaking about anything that`s off topic. This only about the President.

UNIDENTIFIED MALE: Well, what about --

GRIMM: Thank you.

Let me be clear to you. If you ever do that to me again I`ll throw you off this (INAUDIBLE) balcony.

UNIDENTIFIED MALE: Why? I just wanted to ask you.

GRIMM: If you ever do that to me again --

UNIDENTIFIED MALE: Why, why, it`s a valid question.

GRIMM: No, no, you`re not man enough. You are not man enough. I`ll break you into half, like a boy.


MELBER: Michael Grimm is back in the spotlight and joins me for this exclusive interview. Thank you for being here.

GRIMM: Thanks for having me.

MELBER: You look at that clip, is that guy that we just saw there, is that the guy running for Congress or are you different now?

GRIMM: Well, no, I mean, I`m still the same person but I think any real person has a bad day and makes a mistake. I mean, for five years I dealt with reporters and never had a problem. On that day, I let my emotions get ahead of me. It was one of those days where I was dealing with Sandy taking three steps forward and five back and there`s no excuse. That`s why I apologized to him. I said something that I shouldn`t have said.

MELBER: You`re here coming out of jail for pleading guilty on tax evasion. Are you sorry for that?

GRIMM: Well, listen, I`m sorry that I had delivery boys off the books. You know, that`s -- and I have to say this you know, tax evasion makes it sound so ominous like I`m Al Capone. I guarantee you, you go to restaurants every day and every delivery boy that delivers food to this station is off the books. That`s the reality. I had three delivery boys and a dishwasher off the books. In the entire history of this city, that is a civil fine. That`s a civil matter, except for one person, Michael Grimm.

MELBER: Well, I`m not making it sound like Al Capone. I`ll read from the guilty plea that you signed. You said you --

GRIMM: Well, no, but -- the point is --

MELBER: I`m just going to read -- concealing over $900,000 in restaurant revenue and saying you knowingly made these misleading statements even though "employees had been paid in cash." That`s how you described it.

GRIMM: Right. Well, that $900,000 is not accurate. It`s a little bit less than it but that`s over many years, and that also included about 14 months that I didn`t even own the restaurant, but that was part of the deal they wanted to make because the number was too small. But the point is, again, why is it a civil matter? Over 10,000 of these fines have been given out to restaurant owners since the beginning of the history of the city of New York. I`m the first one criminally charged because the entire Justice Department was weaponized against me for political purposes. They wanted me out of office. Which -- but don`t get me wrong. I should not have had delivery boys off the books because I shouldn`t have been like every other business owner, I should have been better and I wasn`t and I regret that.

MELBER: Now you want a second chance. You want to go back Congress. Do you think that former felonies or ex-convicts like yourself should have the right to vote?

GRIMM: Someone who should been -- should never have been a felony, absolutely. Again --

MELBER: Should all ex-convicts have the right to vote is my question.

GRIMM: Not necessarily, no. But again, the crime here was the Justice Department making me a felon when I should have gotten a civil fine. There`s a big difference. OK. If you`re going to tell me that every single restaurant owner right now down the block should all be lined up and taken to prison and made felons, then that`s a valid position to have, but then change the policy. You can`t have Mayor De Blasio going out thanking business owners for hiring people off the books and then in a sanctuary city, and only singling out Michael Grimm. That`s the problem.

MELBER: Is your -- but on the voting, is your position that you can go be a convict, be an ex-con, and get back into Congress, but other people shouldn`t even have the right to vote?

GRIMM: Well, first of all, that`s a misnomer when you say they don`t have the right to vote. I have the right to vote. I`ll be voting --

MELBER: Right, it depends on the state. But like for example you -- Mitch McConnell has said, basically, states have a significant interest in reserving the right to vote to those who have abided by the social contract. Leaders in your party, do, as I think as you know, oppose the right to vote for a lot of ex-convicts like yourself?

GRIMM: Well, not like myself. I think they oppose it for people especially that do violent crimes, people that are really breaking the law, not civil matters, OK? A civil matter is a civil matter and a crime is a crime. I was an FBI agent for over you know, 11 years and I believe in the law, absolutely, but there is a big difference between a civil infraction and a felony.

MELBER: Now, you mentioned sanctuary cities is what I think you`re calling New York City. You previously voted to protect so-called DREAMers. Donald Trump promised to deport them. Was he wrong?

GRIMM: No. Well, first of all, that specific vote, if you look at the legislation, there was a poison pill in there. So, I`d have to really research that vote, but from what I remember, there was a bit of a poison pill. So when you look at legislation, it`s not always what exactly what it seems to be. If it -- if there`s a poison pill in it, that`s one of the reasons why I would vote against it.

MELBER: So, do you support deportation of DREAMers then?

GRIMM: Well, I think that the DACA issue is the one thing that Republicans have to stand firm on because it`s the leverage that we need to get real reform and to actually get, I would say, number one, let`s start with securing the borders. Number two, let`s end chain migration. Number three, let`s actually have an immigration system that works, so that good, law-abiding owners of restaurants and owners of other businesses have a robust guest worker program so that they don`t have to put a dishwasher off the books because there`s no one else coming for that job. And that`s what people don`t want to talk about. But no one shows up for the dishwasher job, except the people that are off the books. So what do you do if you own a business?

MELBER: I want to get you on guns, you`re a candidate, this is a big issue. If we could do lightning ground on a couple of them. Bump stocks, should they be banned?

GRIMM: Well, I think it`s very clear that the ATF had the jurisdiction to do that and they have to go back and re-evaluate that.

MELBER: Should they do it?

GRIMM: Yes, I think the ATF has to look at those. Absolutely. I don`t know why they didn`t --

MELBER: You think -- you sound a little bit like the President. When you say, look at those, are you for banning bump stocks? Should the ATF ban them?

GRIMM: I think the ATF should. Yes.

MELBER: OK. Assault weapons and assault-style weapons, should --

GRIMM: Well, I think they already are.

MELBER: The `94 ban expired. So would you be for reinstating a ban on assault-style weapons?

GRIMM: Fully automatic weapons, my understanding is they are banned.

MELBER: Semi-automatic assault-style, like the Senator Feinstein`s `94 bill which --

GRIMM: No, Senator Feinstein`s bill, I don`t support.

MELBER: OK. Background checks?

GRIMM: If they`re done properly, yes.

MELBER: Is that -- so would you vote for the background check bill that has been proposed, like after Sandy Hook.

GRIMM: Whose bill is that?

MELBER: The Sandy Hook --

GRIMM: There`s -- I think there`s more than one bill.

MELBER: The Senate version would be, you know, you had Chris Murphy put something forward that basically said, close these loopholes and have national background checks.

GRIMM: And again, here`s the problem why -- and I`m not dodging the problem at all. It`s just, what I have seen in almost all of this legislation is it`s way too broad. So they --

MELBER: Too broad on guns?

GRIMM: Too broad meaning they`re bringing in other things. Like, there was legislation that would have prevented veterans from getting guns unless they had a note from the doctor and they could have been there because of a myriad of reasons. They had stress because they couldn`t pay their finances and now they can`t get a gun. So no, I won`t support that.

MELBER: And final question, do you expect President Trump to come campaign for you in this primary or campaign against you?

GRIMM: No, I would expect him to stay out of this primary.

MELBER: You want him just out? Just leave it alone.

GRIMM: I`m not saying that`s what I want. I would -- you`re asking what I would expect. If I was the President, I wouldn`t get involved in the primary.

MELBER: Former Congressman Michael Grimm coming in, thank you for time.

GRIMM: Thank you.

MELBER: I appreciate it. Ahead, we have more NBC News breaking reporting, this about Rex Tillerson, up next.


MELBER: Breaking news right into our newsroom. Minutes ago, NBC reporting on Trump`s ongoing feud with Secretary of State Rex Tillerson and new details on the fallout. NBC`s National Political Reporter, Carol Lee, joins me. Carol, what do you have?

CAROL LEE, NBC NATIONAL POLITICAL REPORTER: Well, what we know is that Chief of Staff Kelly stayed back from traveling with the President to Las Vegas yesterday to -- in order to try to contain some of the fallout from NBC`s reporting on Rex Tillerson. And as part of that effort, he summoned Secretary Mattis and Tillerson over to the White House for a meeting in which they talked about how to carve out a path forward. What`s significant about that is if you recall Kelly and Mattis, the Defense Secretary were the two officials who convinced Secretary Tillerson to stay in July when he was threatening to resign, as we reported yesterday. Now, the other thing is that Vice President Pence, who was in Phoenix at the time, was very upset with what he was learning and he called Secretary Tillerson and said, you need to fix this, which is what led to Secretary Tillerson`s statement.

MELBER: Wow. This is a report that you have pushed that has shook the White House, I know. We`re out of time on THE BEAT, I expect we`ll be seeing more from you on NBC and MSNBC tonight. Carol Lee, thank you.



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