Texas Church Shooting Transcript 11/6/17 The Beat with Ari Melber

Guests: Ron Nehring, Jon Swain, Kyle Pope, Joyce Vance

Show: THE BEAT WITH ARI MELBER Date: November 6, 2017 Guest: Ron Nehring, Jon Swain, Kyle Pope, Joyce Vance

KATY TUR, MSNBC HOST, "MTP DAILY": That's all tonight. Chuck will be back tomorrow with more "MTP Daily". And THE BEAT with Ari Melber starts now. Hi there, Ari

ARI MELBER, MSNBC HOST, THE BEAT: How are you doing? I've been tracking those Comey tweets myself.

TUR: They are interesting. You never know what he might say on there. You never know when he might respond to the president, although I imagine he won't.

MELBER: It's not his style.

TUR: It's not his style.

MELBER: He seems very -

TUR: Controlled?

MELBER: Like, philosophical, as you were alluding to.

TUR: Also controlled.

MELBER: Also controlled. No, you were right the first time. Katy Tur, thank you as always.

We have a big show tonight. Bob Mueller has evidence to bring more charges in the Russia probe. The spotlight now turning to Mike Flynn and his son. Mueller's team probing potential crimes in Flynn's foreign lobbying. This is according to multiple sources familiar with the investigation.

The issues are his alleged lies, his potential money laundering and his push to deport or even kidnap a man in Pennsylvania, who is an opponent of the Turkish government.

Now, it's not a surprise that Flynn's attorney, the White House and Mueller's spokesperson all had no comment on this developing story.

Now, why would Trump's national security adviser push this seemingly outlandish plan to take out the rival of the Turkish president? I mean, this is a weird one even by the standards of the rabbit holes in this inquiry.

But Mueller is investigating specifically whether it was money that Flynn was paid last year or even an illegal bribe.

Now, let's review what we know about all this. Flynn did publish an op-ed that can only be described as bizarre. On election day, it was attacking that same Turkey critic in Pennsylvania. It said "we need to adjust our foreign policy to recognize Turkey as a priority."

And it argued this critic was not a moderate because, if he were, he would not "excite the animus" of the Turkish government. In other words, on election day, in a hotly contested campaign, you have Trump's campaign adviser saying take Turkey's word for it.

What you see there are the payments that were later revealed. Flynn filing paperwork, saying he got in total about $0.5 million, consulting essentially for Turkey's interests.

What we can tell you today, Mueller has now interviewed former CIA Director James Woolsey about Flynn's meeting with Turkish officials. Many reports about suspicious activities out there during the Trump campaign. There is that famous Putin/Flynn meeting.

But this is a new report tonight about activities during the Trump administration. So, when you understand what's going on now, where Mueller may be headed and why this is such a big deal, remember one thing. Flynn is under scrutiny tonight for what he did in power, not what he did just to get power.

Let's get right to it. I've got "Wall Street Journal's" Shelby Holliday back on THE BEAT, "POLITICO's" Josh Gerstein, and former US attorney under President Obama Joyce Vance.

Josh, I want to start with you and we didn't even get to some of your reporting about the pushback against Mueller here. But your understanding of where Flynn fits in and this entire Turkish caper.

JOSH GERSTEIN, SENIOR WHITE HOUSE REPORTER, "POLITICO": Well, you're right, Ari. I mean, that's what makes this so sensitive, is that it does actually involve using government power.

One of the concerns I've always had about stories about, for example, changing the Republican Party platform is that's not even an official document when we have stories like that coming out.

But when you're talking about money that could have affected decisions that somebody made or was expected to make as national security adviser, then you really do get into the world of potential bribery, illegal gratuities and things along those lines, which are more serious charges than lobbying people might have done before they took office.

MELBER: Joyce, I don't know how to put this nicely, but how stupid and reckless do you have to be to come into government and in your first weeks - I mean, this isn't like, oh, they got - power corrupts, they got lazy. I mean, he had served prior. But in his first weeks as national security advisor, he apparently engaged in this alleged plot?

JOYCE VANCE, FORMER US ATTORNEY UNDER PRESIDENT OBAMA: There are some things that even a southern girl can't put nicely, Ari. And I think you're dead on the money here.

It looks a little bit like Flynn was the dog chasing after the car. He didn't really expect to end up in the White House. The election day op-ed had a little bit of a feel of angling for some employment after they lost the election.

Suddenly, he was in the White House. He was the national security adviser. He was so entangled in a series of inappropriate, potentially illegal relationships that, I think, he couldn't extricate himself.

And, ultimately, like Josh says, we're looking at all sorts of potential bribery, illegal gratuity type situations. It's just really, in hindsight, amazing that the Trump administration allowed him to stay in office for 24 days after Sally Yates' warning.

MELBER: But you're saying this is kind of the plot of "The Producers" with higher stakes. And the reason why it looks so, as I put it, bizarre is because he didn't think he'd have to make good on the beginning of it when he did the election day appeal?

VANCE: I think that's correct.

MELBER: Shelby, when you look at all of this, and you've rejoined THE BEAT from your usual Monday perch after a week traveling -

SHELBY HOLLIDAY, REPORTER, "THE WALL STREET JOURNAL": Thankfully.

MELBER: Happy to have you back.

HOLLIDAY: Thank you.

MELBER: What do you see beyond the law in the big headlines and how this is roiling Washington?

HOLLIDAY: Well, politically, it's a problem because Flynn was actually in the White House. And as you said, he's in trouble for actions he took while he was in the White House.

But this investigation gets closer to Trump. If Flynn is actually charged with crimes, not only does that cause a lot of expensive and time-consuming and distracting legal issues for people in the White House, but it also makes the case for obstruction of justice stronger.

Because of President Trump - we know that - or James Comey said at least, former FBI director, that President Trump asked Comey to lay off Flynn. Then he later fired Comey. So, if Flynn actually is charged with crimes, the big question is, what did President Trump know, what crimes is he charged for? And did the president obstruct justice in trying to help Flynn and perhaps help himself?

MELBER: And every time we say Flynn thus far, Josh, we've been referring to Mike Flynn, the general. His son also implicated because he was on the transition team.

And Bob Mueller has hired lawyers, who in the Enron case, as Joyce knows, and other cases have gone very aggressively after family members. Obviously, they have to make the case. So, the facts have to support the charge, but they've also done it quite clearly to dial up pressure. We may be seeing that maneuver here.

Take a listen to Mike Pence falsely minimizing the junior Flynn's role in the transition.

(BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: Gen. Flynn's son has no involvement in the transition whatsoever.

UNIDENTIFIED MALE: He has a transition e-mail.

PENCE: Well, he has no involvement in the transition whatsoever.

(END VIDEO CLIP)

MELBER: So, Josh, put that in context.

GERSTEIN: Well, I mean, it's pretty clear that Gen. Flynn's son, Michael Flynn, Jr., was basically acting as his right-hand man, not only before the election, but after the election. And we've seen him out on Twitter in the last few days sort of taunting his critics and saying, he's not going to jail and they're going to look dumb at the end of all this.

But, you're right, Ari, that we have seen sort of - you might call them aggressive or even strong-arm tactics, in other cases, even white-collar cases, where people will go after a spouse or a child and then perhaps try to reach some kind of global resolution where a plea deal is done that maybe takes the more vulnerable parties in that transaction off the table.

HOLLIDAY: I would also add too. He's not just under scrutiny for being part of the transition, but according to "Wall Street Journal" reporting, Flynn's son was also perhaps helping look for Hillary Clinton's e-mails. And that brings up a whole host of questions surrounding, of course, collusion with Russia.

MELBER: Right. And again, goes, Joyce, to the reckless piece of this, which is - this is, as Shelby alludes to, someone who also was involved in some very controversial and damaging online conspiracy theories, including the discredited Comet Pizza one, which ended very unhappily and tragically with a fairly deranged individual going off the conspiracy theory online, going into a pizza shop in Washington and shooting people.

Walk us through how, when you look at the mental states, something we've covered on this show, it's not enough to just wind up in the wrong room, you have to have some sort of intentionality, and yet there's a voluminous public record of Mike Flynn, Jr. at least showing some intent to some questionable things.

VANCE: So, mere presence in a room where criminal conduct occurs isn't enough to expose Mike Flynn's son to criminal liability. He, as you say, has to have been an intentional participant.

I'm always a little bit surprised when I hear people talking about overly aggressive prosecutorial tactics. I think this is just fair game, right?

The younger Flynn is involved in activity. That activity is arguably criminal. I think it's fair game to go after him. It's fair game to indict him. If at end of the day, his father chooses to cooperate with the investigation in order to get a lighter sentence or no sentence for his son, that's a permissible approach to the investigation.

But as far as Gen. Flynn's son goes, his conduct here has almost been egging the prosecution team on to go after him.

MELBER: And then, Josh, before I let you go, we've got to get to your reporting. We do this thing on the show where you tell us about your article, so we don't have to read it.

But you had a piece making some waves because you really documented the push and pull over Mueller. Explain.

GERSTEIN: Well, we talked about how there are a variety of moves being deployed against Mueller's special prosecution team. Some of them, we've seen already, back room privilege fights that have gone on before the grand jury that we're only learning about in the last few days.

And then, we also tried to show historically what's gone on with these types of investigations with all kinds of challenges that they tend to face from defendants not only for the substance of the charges, but even for the very creation of the office.

Has Mueller gone beyond his mandate? And we're expecting to see those kinds of challenges as the motions begin to flow in, at least in the Gates/Manafort case over the next few weeks and months.

Josh Gerstein, as always, thanks for your reporting. Shelby Holliday on THE BEAT on our Monday. We like that. Joyce Vance, stay with me. I have more questions for you.

Before we move on to some of these other updates because there is a lot more on Russia, we have, of course, an update on the other horrific study today. A few details coming in on that shooting at the church in Sutherland Springs, Texas.

I want to tell you, as you may have heard, 26 people confirmed dead. The victims ranging in age from just 18 months old all the way up to 77 years old.

Investigators today saying the gunman had this history of violence and may have been motivated by family issues.

(BEGIN VIDEO CLIP)

FREEMAN MARTIN, REGIONAL DIRECTOR, TEXAS DEPARTMENT OF PUBLIC SAFETY: There was a domestic situation going on within this family. The suspect's mother-in-law attended this church.

This was not racially motivated or was it over religious beliefs. There was a domestic situation going on within the family and in-laws.

(END VIDEO CLIP)

MELBER: Before we move on, I also want to tell you that, back in 2012, we're learning that the 26-year-old Devin Kelley was court martialed from the Air Force about assaulting his wife as well as his baby stepson.

Now, officials say he had been denied permit to carry guns within Texas, but was still able to buy this assault rifle used in the attack. We will have more on that story as warranted later tonight.

Let me tell you what else is coming up on the show, though. There was a quid pro quo question about what happened at that infamous Donald Trump, Jr. Trump Tower meeting. Some new reporting in "Bloomberg" and some denials from the White House. Interesting they're speaking out at all about it.

Also later, revelations about how the Kremlin's interference in the Republican primary had started earlier than anyone thought. I have an exclusive from one of the campaigns that squared off against Trump.

And then, something I want to share with all of THE BEAT viewers, a special report tonight on the Russian and Kremlin financing of Facebook. What did Mark Zuckerberg know? Why does it matter?

I'm Ari Melber and you're watching THE BEAT on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: All I can say is that I have nothing to do with Russian collusion. Nothing whatsoever. And everybody knows it.

I'll be honest with you, no collusion.

I am truly not involved in any form of collusion with Russia. Believe me.

(END VIDEO CLIP)

MELBER: Questions about Russian collusion trailing Donald Trump all the way to Asia. He's insisting he didn't collude. But "The Washington Post" has a new report that the number of Trump's inner circle, who had contacts with Russia has grown to nine. You can see them right there. It's quite a list.

And also, new details about some of the contacts, like Manafort/Don, Jr. Trump Tower meeting with Russians linked to the Kremlin.

(BEGIN VIDEO CLIP)

DONALD TRUMP, JR., SON OF DONALD TRUMP: I was probably present because the pretext of the meeting was, hey, I have information about your opponent. In retrospect, I probably would have done things a little differently.

Again, this is before the Russiamania. This is before they were building it up in the press. For me, this was opposition research.

(END VIDEO CLIP)

MELBER: "Bloomberg" now reports, Don, Jr. wanted that opposition research to include potentially financial documents, which he requested from the Russians, allegedly also discussed rolling back an anti-Putin law.

Now, that is according to sourcing from the Russian lawyer from the Trump Tower meeting. Interesting that she says that we don't view everything she says as credible.

The story, though, big enough to draw a specific rebuttal from a Trump lawyer telling NBC, "nothing was exchanged at Trump Tower."

Now, the other new Trump name with a Russia issue is billionaire Wilbur Ross. Newly leaked financial records show he kept a stake in a company tied to the Kremlin. Ross says there's nothing wrong with a company doing business with a Russian state firm and that the only issue was "a misstatement that I did not disclose those holdings in my original form."

Now, these were over $2 billion. He listed over 80 entities on those disclosure forms. Now, his emphasis on forgetting to disclose one asset completely is basically the drake defense. I don't know how much I actually made, I forgot, it's a lot.

And you know what? That can actually be a valid legal defense of omission without the intent to mislead. It can be. But critics are still asking why does every forgotten meeting or asset always seem to go back to Russia.

I'm joined now by Jennifer Rodgers, a former federal prosecutor and an expert at Columbia Law school; and Niall Stanage. He is White House columnist for "The Hill".

I start with you and the drake issue because it goes to intent. If you forgot how much you have and you made an omission in that way, it's not as bad as if he was trying to conceal something Russia.

JENNIFER RODGERS, FORMER FEDERAL PROSECUTOR: Well, that's true. You can't charge him if he doesn't have the intent. So, that's what they would be looking for, the prosecutors, if, in fact, they are going to try to pursue this failure to disclose on his forms.

MELBER: Do you buy it though?

RODGERS: The defense? It's hard to say. These financial holdings are very complicated. There are a lot of them/ I don't know what counsel he was receiving at the time that he was filling them out. So, it is very hard to say.

It would be very risky to try to do this intentionally and leave those off because, as we know, leaks happen. And the leaks that happened today in these Paradise Papers are not that surprising, I think, given kind of what is going on.

So, it would be very risky. Intentional or not, it's hard to say.

MELBER: More broadly, when you look at "The Post" reporting and the names and the contacts, right, there is a sort of a cascade here. And it doesn't mean it's a criminal cascade. And it may mean that this is just unusual Republican administration that is warmer towards Russia than others.

We pointed out on the show that some people want a warm relation with Cuba or Iran or all sorts of controversial countries. Where do you draw the line between unusual foreign policy and a bigger problem?

NIALL STANAGE, WHITE HOUSE COLUMNIST, "THE HILL": Well, I think there's an issue here because we're seeing suggestions of there being perhaps quid pro quos involved. That is different from saying someone is sympathetic to this foreign policy position or that foreign policy position.

The other point here, Ari, is that we started off saying this was a kind of drip, drip, drip matter. It's becoming a deluge where we have all these people involved. And the pattern consistently is people having to come back and disclose that they had more contacts with Russia than they first admitted. That in itself is a problem, I think.

MELBER: And, Jennifer, while I have you here as our ethics and federal prosecution expert, it's interesting to hear Sen. Warner, who is leading this effort for the Senate on the Democratic side, fall back on this term collusion, which isn't actually a crime.

Here he was on "Meet the Press".

(BEGIN VIDEO CLIP)

SEN. MARK WARNER (D), VIRGINIA: The Russians had what appeared to be a fairly organized effort in terms of trying to reach out to folks affiliated with the Trump campaign.

We're trying to make sure that we find out what happened in 2016. Was there collusion?

(END VIDEO CLIP)

MELBER: Was there collusion says the senator, but what is the legal question?

RODGERS: The legal question is, was there a conspiracy to actually commit a crime. Even conspiracy just means agreement. You have to agree to do something illegal, which is of course the $100,000 question here.

If they weren't agreeing to do something illegal and it's not illegal to try to win an election, you have to be talking about computer intrusion, using stolen information, those sorts of things. Even putting out fake propaganda is not going to good enough if it's not illegal. So, that's really what you're looking for, agreement to commit crime.

MELBER: And what else are you watching for this week?

STANAGE: I think just a sense of, are there going to be more of these disclosures, more of these additions that there are closer contacts than are being effaced up to (ph). And at what point does that become a pattern?

The other point not directly related to any of these disclosures is there's always been a question, will Mueller look at President Trump's finances. And he has such sensitivity about that. We're seeing him looking into other people's finances now. Does that extend to the president and what does that potentially turn up?

MELBER: And when you're in your home country, do they think that you sound as smart as we do here? Because everything I'm feeling it at a deeper level.

STANAGE: I don't have the drake quotes. They don't go over so well in Ireland.

MELBER: You got it. You got something going on. Niall Stanage and Jennifer Rodgers giving us some expertise on the foreign policy and the law. Thank you.

Still to come, as mentioned, the Russian support for Trump actually started earlier than anyone knew before. I have an exclusive interview with someone who is up close firsthand and wants to tell.

Also, new reporting on secret documents revealing Facebook's Kremlin trail. That's my special report tonight.

Jared Kushner failing to disclose his own company with a Russia link. Someone who worked for Kushner says he's not surprised. And he'll be on THE BEAT later tonight.

(COMMERCIAL BREAK)

MELBER: Many Trump allies ask why American politics seems obsessed with Russians. But there's a new report suggesting the opposite. Russians obsessed with our politics, and specifically with helping Trump.

The new report showing that long before Trump was seen as a viable GOP nominee, Russian-backed accounts were mobbing the Internet to boost Trump. That is earlier than publicly reported.

And "The Wall Street Journal" documenting Kremlin accounts pushing Trump in July, within just weeks of his announcement. Now, that matters for two big reasons. One, this was six months earlier than our intelligence agencies have reported any of this began.

And, two, it was at a time that the bipartisan conventional wisdom across the United States was that Trump could never win, among Republicans, Democrats, media elites.

Take this telling moment from a Sunday show panel that July. Top Republicans like Matt Dowd and Anna Navarro, as well as top journalists like "The New York Times" Maggie Haberman and George Stephanopoulos at "ABC" literally laughed at the prospect of Trump winning. The only person predicting it was Keith Ellison.

(BEGIN VIDEO CLIP)

REP. KEITH ELLISON (D), MINNESOTA: All I want to say is that anybody from the Democratic side of the fence who thinks that - who is terrified of the possibility of President Trump better vote, better get active, better get involved because this man has got some momentum and we'd better be ready for the fact that he might be leading the Republican ticket next -

UNIDENTIFIED MALE: I know you don't believe that, but I want to go on.

UNIDENTIFIED FEMALE: Sorry to laugh.

(END VIDEO CLIP)

MELBER: Ha, ha, ha. While Washington laughed, though, we learn today the Russian operation was already slamming Trump's Republican rivals. Boom, down goes Jeb Bush, wrote one account. They went ten to one for Trump online.

And this new reporting jives with what some Republicans say they observed during the primaries, like a Ted Cruz campaign spokesman Ron Nehring speaking out. He told THE BEAT that he was repeatedly bombarded during the primaries with messages he found odd and seemed to be of foreign origin.

(BEGIN VIDEO CLIP)

RON NEHRING, TED CRUZ CAMPAIGN SPOKESMAN: This type of hysterical language that was being used, always very much over-the-top, very much out of the ordinary for your typical conservative activist. And the language, very often, by the way, was not very good English.

It was very often written - it almost sounded as though this is a non- native English speaker who was trying to speak in ways that they think Americans speak.

(END VIDEO CLIP)

MELBER: Ron Nehring back with me. That was when we spoke in October. Now, new journalistic accounts say that what you were talking about is backed up by a very early intervention from Russia on behalf of one specific candidate out of 16. Your reaction?

NEHRING: Well, it doesn't surprise me because we did see this bizarre pattern of online behavior. At the time, no one had any reason to believe that it was the Russians. No one had discussed Russian involvement in anything until July or so when they helped to derail the Democratic National Convention after hacking the Democratic National Committee.

But, now, in hindsight, it appears that some of that activity may have had its origins not anywhere in the United States, but in an office park in St. Petersburg.

MELBER: So, what were you thinking at the time when you saw these messages?

NEHRING: I have been a conservative movement activist for 29 years. And I know our conservative activists. They are good, solid, patriotic people.

But the tweets that you would see, the activity on Twitter in particular that we would be flooded with after every - just about every time after I stepped off of an appearance like this one during the campaign, my Twitter would be flooded with tweets where I was tagged, with this over-the-top language, very often either racist in nature or otherwise hysterical in nature, imitating conservative activists, but they clearly were not conservative activists because they didn't talk the way conservatives do.

And, therefore, it looked to us like - to me, at least, like something was wrong, there's something going on here, somebody is messing with us, but it wasn't clear as to who. But what it did look like is that this is not the typical conservative activist online.

It could have been perhaps somebody running a number of Twitter bots domestically, but if that was the case, if it was an American doing it, I assume that person would have stepped forward.

MELBER: Here was Donald Trump in 2013 talking about his Putin relationship.

(BEGIN VIDEO CLIP)

TRUMP: I do have a relationship. And I can tell you that he's very interested in what we're doing here today. He's probably very interested in what you and I are saying today and I'm sure he's going to be seeing it in some form. But I do have a relationship with him.

He's done an amazing job. Lot of people would say he's put himself at the forefront of the world as a leader.

(END VIDEO CLIP)

MELBER: In your view, does this new report that shows that it was in a number of weeks that the Russian support helped materialize online for Trump, does that change your theory of this case? Do you think it's suspicious for Donald Trump and the kind of immediate foreign support he appeared to get?

NEHRING: Well, I don't want to engage in speculation in that regard. I do think, however, that it's important that all of us support getting to the bottom of this. Because you have to assume that the Russians will get better at this. They'll improve their English, they'll improve the quality, they'll improve the ability to cover their tracks.

And in the future, we better be able to recognize and stop this type of interference -

MELBER: Just to be clear, as a Republican, though, you don't look at getting to bottom of this as witch hunt?

NEHRING No, it's -- absolutely not. It's absolutely clear that the Russians engaged in messing with our elections. The Russians, for example, took direct action which resulted in the resignation of the Chairwoman of the Democratic National Committee on the eve of their convention. There's no doubt that that had an impact on the flow of the campaign. It doesn't necessarily mean that it changed outcome of the election but it did -- it did impact the flow of the campaign. And we -- and as conservatives, we should take great offense that anytime a foreign power would interferes in our sovereign election process. And if we don't raise our guard up against this, we may as well hold campaign meetings in Moscow because that's ultimately who will have a lot of sway as -- in American politics going forward. If we don't fully understand it, we raise awareness as to what they're doing, and that we erect defenses against it.

MELBER: Ron Nehring from the Cruz campaign, thank you for sharing your experience and expertise with us.

NEHRING: Thank you.

MELBER: Up next, wait no longer. As I mentioned, we are going to do my BEAT special report. Newly revealed secret documents show how the Kremlin invested millions in Facebook. What did Mark Zuckerberg know? What are the questions remaining? He's actually praised the very investor behind this who's also tied to guess who, Jared Kushner. Can't make it up, I have the reporter on who help break the story and a former top editor who worked for Kushner and my own questions for Mark Zuckerberg right after this break.

(COMMERCIAL BREAK)

MELBER: Now to our special report on those new leaks revealing a trail from the Kremlin to Facebook. You know, for regular investors, the Facebook story starts in May 2012, when the company went public and regular people could buy a share. But for big insiders, for billionaires, the story starts years earlier when Mark Zuckerberg handpicked who would get to put real money to get a piece of his coveted start-up.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm here with Mark Zuckerberg, CEO, and Founder of Facebook and new investor Yuri Milner from Digital Sky Technologies. Hey guys! First of all, congratulations to both of you, you've got more money Mark and Yuri, you've got a piece of Facebook.

(END VIDEO CLIP)

MELBER: That reporter's voice is a tech reporter who is introducing Mark and his big new investor Yuri Milner who first bought a stake in Facebook all the way back in 2009. Now Mark touted Milner's global perspective and said this was the best partner for Facebook.

(BEGIN VIDEO CLIP)

MARK ZUCKERBERG, CEO, FACEBOOK: When we were thinking about doing this, we had optionality as to pick the partner that would be best for us, find the terms that would make the most sense for us. And (INAUDIBLE) the investments and portfolio that Yuri and DST have, were really attractive for us in terms of the insight and understanding they have in the space.

(END VIDEO CLIP)

MELBER: Milner didn't just have understanding of the space, he had the kind of money that could be tied up for years, hundreds of millions of dollars. And Milner went on to make wave in the valley. He had a hundred million dollar mansion and a social life cultivating some of the most powerful millennial billionaires in Silicon Valley. Zuckerberg even went to Milner's wedding in 2011. But until now, the public didn't know how Milner had so much money for Facebook or for houses. This paradise papers leak which is driving all these stories today about Wilbur Ross and Apple taxes. This leak also is revealing something brand new about Milner's Facebook money. It came directly from a Putin-run company.

How much will the amount? Over $900 million routed from the Kremlin's Gazprom Oil Company to another company in the British Virgin Islands which bought most of Milner's company. It's a financial line that eventually reaches Facebook. And you don't need to be a Kremlin expert to know you don't get that kind of money from Putin's own companies without at least keeping in touch. Now, to be clear, we don't know what Milner's doing with the Kremlin right now. We do know he's worked with Putin's number two Dmitry Medvedev, specifically on tech issues. It's the same Putin official who met with Zuckerberg in person in 2012. Zuckerberg even dressed up for that meeting wearing a tie and he brought the man who now serves as Putin's Prime Minister a Facebook t-shirt.

(BEGIN VIDEO CLIP)

ZUCKERBERG: We got a shirt for you.

(END VIDEO CLIP)

MELBER: That's nice. This isn't in the news today because of Facebook's vaunted transparency, it's not even in the news because of the probes into Russian collusion. This is only in the news tonight because of a giant pretty much-unrelated leak of law firm's secret files. Now, I can report to you that Milner is downplaying this. He says he was "Not aware that Putin's Gazprom backed the stake in Facebook. And Facebook tells the Guardians the stake was sold five years ago. So they reject the idea they failed any obligations of due diligence. But even if both those defenses are true, they don't really address the problem for our national security.

The money could be old news to Facebook, Milner may be ignorant or willfully blind of exactly how his Kremlin connection is funded, but he knows he's down with the Kremlin. And now we see one newly exposed link from Kremlin money to Mark Zuckerberg. And it runs right through Yuri Milner. So keep that in mind, Kremlin, Milner, for context about investments, Jared Kushner failed to disclose because they were linked to Yuri Milner. In July, Kushner had to revise forms about his assets including a tech company called Cadre.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This weekend Kushner revised his financial disclosures yet again, having inadvertently omitted 77 assets worth at least $10 million.

UNIDENTIFIED FEMALE: It turns out he found more than 75 different assets that his lawyer says he plumb forgot to declare before.

UNIDENTIFIED FEMALE: Two of the omissions stood out to me because they happen to be among his most valuable assets. First a tech company called Cadre which is an elite --

(END VIDEO CLIP)

MELBER: A tech company called Cadre was the end of that report there. Now that company founded by the Kushner family was the one he apparently forgot to list. Oops, we founded this company but forgot it exists and didn't list it. That was exposed in July. Now, before he was busted, Kushner's lawyers made a big show of how many assets he disclosed and divested. Now, this is actually an important footnote. There's a lot of Trump defenders you may hear who say gosh, it feels like the media is always slamming the mistakes or the conflicts of interest around Russia. But the very first disclosure, we actually filed the freedom of information request to review Kushner's e-mails on ethics.

And based on the divestments he did make, I reported that it looked like Kushner was doing things by the book. By the book, credit from the media, that was in our report in February. But it didn't last because by July, this Cadre problem surfaced with Kushner reporting he actually held between 5 million and $25 million, now, failing to disclose millions of dollars in a company your family founded not by the book. And here comes Russian investor Yuri Milner, because he put $850,000 into Cadre which the company has noted in official documents.

Now, you could argue there's nothing wrong with getting some money from a Russian investor tied to the Kremlin and working around Putin's allies. You could argue some of the money is not even linked to the Kremlin or you could argue, hey, any non-sanctioned Russian can legally fund business in the U.S. But that's not what not what Kushner has been arguing. Recall his only public remarks at the White House when he went further asserting he doesn't use Russian funds for businesses.

(BEGIN VIDEO CLIP)

JARED KUSHNER, SENIOR ADVISOR TO PRESIDENT DONALD TRUMP: I have not relied on Russian funds for my businesses and I have been fully transparent in providing all requested information.

(END VIDEO CLIP)

MELBER: Yes, you have relied on those funds. Unless Kushner's lawyers told him he could deny relying on Russian funds so that everyone had listening thought he was denying taking Russian money, but then they were parsing the word rely to mean say, be dependent on, so they could later argue if they had to in court that while he use some Russian funds, he wasn't reliant or formally dependent on them. This is why lawyers are so annoying. The questions for Jarred here are the same as always, why are your financial forms wrong so often? Why are your diplomacy forms wrong so often? And when you update them, out of the 193 countries in the world, why are the undisclosed meetings and assets on forms so often linked to Russia? As for the questions for Mark, they are building.

Questions like, did you have any evidence Milner's money linked back to the Kremlin or did you prefer just not to know Mark? Did you know that he talked tech with Putin's Prime Minister just like you did? And Mark, would you take that investment again? Do you think still think it was "the best investment partner for Facebook? And Mark, I got to ask you. Do you think if you ignore all these issues and all these questions, they'll just go away? Has it ever occurred to you that in a socially connected world these questions might just get louder and louder? I have a special panel on this important topic including an exclusive with someone who worked directly with Jarred Kushner. But I begin with John Swain who broke this story for the Guardian and who we are indebted to in the history we just wandered through. It's a lot but the headlines are there is a Kremlin money trail. What else should people know if their head is spinning as we digest all these new leaks?

JON SWAINE, SENIOR REPORTER, THE GUARDIAN: One thing people should know is that while Facebook as what you have been talking about, Twitter too took $191 million that we know of from a separate Russian institution, VTB bank. VTB Bank's ties to Russian intelligence and Russian government and Kremlin are even stronger arguably than Gazprom. And again it was Yuri Milner and his investment (INAUDIBLE) that that money flowed through towards social media in Silicon Valley.

MELBER: The bank you're talking about is more directly linked to Putin espionage?

SWAINE: It has been. You know, the head of the bank is reported to have been a former Russian intelligence officer. Several of the senior intelligence chiefs in Russia have relatives working at the bank. And you know, that's a source of interest to people analyzing it.

MELBER: Can you tell if these tech companies knew and kept it quiet or just didn't want to know?

SWAINE: Well, as you said, they say to us that they weren't aware. But the Facebook explanation that you mentioned doesn't actually make sense if you -- if you sort of parse it. They say it can't be said that we didn't do due diligence because this was sold five years ago. There are sort of two unrelated facts. We asked them what they meant by that, they didn't answer. And so I think as you said, the questions about exactly how much due diligence they did are mounting?

MELBER: Stay with me. I want to broaden this out. Kyle Pope actually worked directly for Jared Kushner as Editor of the paper he owned, the New York Observer. He's writing about that time in the Columbia Journalism Review in a piece called the Jarred Bubble. And Back with me former U.S. Attorney Joyce Vance. Kyle, based on your knowledge of Jared Kushner, what do you think of his failure for example to disclose Cadre, which was a company that his family literally created.

KYLE POPE, EDITOR, COLUMBIA JOURNALISM REVIEW: Well, I'll leave it to John and his team to serve good through these documents. What I can tell you from my experience with Jared, he didn't seem to sort of hover above the rules that normal people live by. He -- it's almost like you know, they didn't quite apply to him. And you know, we saw that at the -- at the Observer when he would try to you know, have -- get stories in about either people who he liked or alternatively people he didn't like. Which obviously sort of counter the normal rules of how journalism is supposed to work.

MELBER: And Joyce, when you look over all of this, where does Bob Mueller go with this kind of linkages?

JOYCE VANCE, FORMER U.S. ATTORNEY: The paradise papers are a real treasure trove for prosecutors. There are a lot of interesting linkages. This idea that Kremlin money flowed into Facebook and Twitter doesn't necessarily mean that there is criminal liability. I suspect that the Special Counsel's team will be interested in looking and at tracing this -- the movement of this money. It could be honest money coming in to make good investments, it could be money laundering frankly. It could violate European, E.U. or British money laundering law as well as United States money laundering law if its proceeds from criminal activity --

MELBER: Does Mueller have a handle -- does he have a handle on these oligarchs about when they're acting as business people or when they're actually more or less trying to pursue the interests of a foreign government which is obviously going to be relevant to investigation of foreign government meddling?

VANCE: So I think if he needs to develop that expertise, he'll have access to witnesses and maybe other government resources that will help him get there. but that may well be the critical inquiry in regards to this money and these transactions.

MELBER: And Jon, just reading from your piece. You say it's unclear if Moscow saw political interest in funding stakes in Facebook or Twitter or if the acquisitions were intended only to make money. Sources familiar with the situation say that Facebook could carry out a discrete internal review of Russian investments before the IPO in 2012 and it didn't draw firm conclusions. Does that mean they were worried specifically about this country or they were just looking at whether other foreign countries, in general, could be a problem for Facebook?

SWAINE: Our understanding is that it was Russia specifically. And I think (INAUDIBLE) back to those times. It was 2011, 2012, but even then there were reports that Russian intelligence in their own -- in their own country were exploiting social media to put down social protest, put down an arrest against Putin. So I think the social media companies were wise for the possibility that this could be a problem.

MELBER: And Kyle, your final view of all this given Jared Kushner's wide portfolio and his pension for forgetting things that relate to Russia?

POPE: Yes, it will be interesting to see how much of this you know, where it sticks and how it sticks. I mean, this is somebody who sort of glided through life pretty easily so far. So I wouldn't -- I wouldn't count him out but yes, it's significant -- it's significant.

MELBER: Do you think he is enough of a novice that he would make deals with Russia that could be illegal or you doubt he would ever have that kind of liability? He does have a law degree.

POPE: I'm not (INAUDIBLE) that he's such a novice. I think he's pretty sophisticated and it think I've sort of been impressed as I watching him in the Trump administration, sort of how he's operating. He's certainly been effective on this sort of P.R. strategy where he sort of kept him and his wife --

MELBER: Right. I'd be remiss -- although we had a lot of details -- I'd be remiss if not to mention he also solved Middle East peace.

POPE: He did.

MELBER: And that's a big -- that's a big win.

POPE: That's for tomorrow.

MELBER: That's -- I mean, Joyce, I'm not going to make you comment on it, but obviously, when you say you're going to do something like that and you deliver, you got to factor that into the coverage. Jon Swaine, Kyle Pope, and Joyce Vance, thank you all for digging deep on this important story. Coming up, millions of American kids are on the verge of losing their health care because of a fight in Republican-led Congress. It's a story we brought you before and we have an update, that's next.

(COMMERCIAL BREAK)

MELBER: Time is running out for nearly nine million American children who will lose their health care if something is not done. We've been reporting on and tracking the children's health insurance program known as CHIP. You can see the countdown clock here on the screen. This affects a lot of people's lives. As you may have heard, over a month ago the Republican-led Congress blew right past the deadline that forces states now to dip into emergency funds to even provide this health care for children. Our update for you tonight, the U.S. House has now moved and passed a vote to reauthorize the federal funding. That sounds like good news. But they're doing something different than the way this has always been funded before. Republicans holding the children's funding hostage to pick a fight with ObamaCare.

And the entire issue will move to the Senate. Now the GOP is saying the only way to give the children the care here is to take away billions of dollars in need for other health care programs. Now in the past, this hasn't been a partisan issue, to be honest, and we don't really view it that way. There are 9 million children whose health care hangs in the balance. And four states will actually start to run out of funding by the end of this year. In Congressional calendar time, that is very short. One of them is Minnesota. Before the deadline expired, Emily Piper, who runs the Department of Human Service there's sent a warning letter to Minnesota's delegation about the urgency, saying her department must take extraordinary measures to keep these kids covered. And just before this vote that happened that we're updating you on, I spoke to her. I asked what she's hearing from families in her community.

(BEGIN VIDEOTAPE)

EMILY PIPER, COMMISSIONER, MINNESOTA DEPARTMENT OF HUMAN SERVICES: Well, thanks for having me today. I think you know, families are just -- that receive CHIP and kids that receive CHIP are just like every other family. They want to make sure that they can take their kid to the doctor when they need to, that if they're pregnant, you're not pregnant on a month by month basis, so they want to make sure they have prenatal coverage for themselves and for their babies. And they want their family to be healthy. And they want the programs that we provide to work for them.

MELBER: As we've been covering, this used to be a bipartisan thing. Credit used to go to Democrats and Republicans for it. Now all of the sudden it's the Republican Congress that blew, as you know, blew through the deadline. And so the money that we've been tracking here, one of THE BEAT producers found these figures. Minnesota got $3.5 million as extra just to get through this patch period along with some other states. How does that work? Are you -- are you blowing through that money? Are you worried about what happens when you run out of it?

PIPER: Well, we're spending that money and we got an emergency appropriation for the month of October. We'll get another one for the month of November but we have to make a decision this month as to how we're going to try and pay for this really important program as a state and for how long can we based on moving money around and changing how we budget for as long as we can to ensure that people have coverage that they need.

MELBER: Yes, I mean, this is the thing about it, Emily, it's like I get budgeting. I worked in the Congress, and there are times where you say on a one-year or a ten-year plan, can you make cuts? But this isn't, that right? This isn't a larger discussion. This is people who claim they support the children's health care, and now it's getting delayed and kicked around by politicians. I mean, I guess the big question to you is, is this any way that Washington should be governed?

PIPER: Well, I don't think anybody thinks this is the way that Washington should be governed. And you know, I think ultimately, we all want programs that work for people. We spend a lot of money on human services programs and one thing that we want is good outcomes for families. And funding on a month-by-month basis basic health care for in Minnesota about 125,000 kids is no way to accomplish the end goal that we want to achieve for those families, and that they want for themselves. And so Congress's dysfunction actually is acting in its own worst interests when it does things like this, making states, forcing states to lurch month by month through these crises that they're creating themselves.

MELBER: Emily Piper in the thick of it, we're going stay on this story on the children's health care program. Thank you for joining me.

PIPER: Thanks for having me.

(END VIDEOTAPE)

MELBER: We'll be keeping an eye on CHIP all this week. But when we come back, I have a story about what you guys think about these pens and how to get one. That's next.

(COMMERCIAL BREAK)

MELBER: There's something a lot of people talk about on THE BEAT.

(BEGIN VIDEO CLIP)

JOY REID, MSNBC HOST: I'm taking my swag with me.

MELBER: Is that cleared? Because we always have to ask.

REID: Yes.

MELBER: You got it cleared? Oh, nice, both of them.

UNIDENTIFIED MALE: You got notepads?

MELBER: We got these notepads.

UNIDENTIFIED MALE: Can we get -- we need last word notepads. Who do I talk to?

MELBER: Somebody call somebody. We'll be right back.

UNIDENTIFIED MALE: I didn't know this.

(END VIDEO CLIP)

MELBER: Not just people who work here. Our viewers, you guys have strong opinions. Douglas posting, anything for a pen. Michelle adding really enjoyed the show, I want a pen. And Bill wrote in to say I would love a pen, how about one of those --

END

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END

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