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Trump goes back to greatest campaign hits. TRANSCRIPT: 04/05/2018. The Beat with Ari Melber

Guests: Melanie Sloan; Michael Avenatti; Hakeem Jeffries; Don Fox

Show: THE BEAT WITH ARI MELBER Date: April 5, 2018 Guest: Melanie Sloan; Michael Avenatti; Hakeem Jeffries; Don Fox

KATY TUR, MSNBC CORRESPONDENT: There you go. Virtual cherry blossoms, brought to you by MTP Daily, even though you didn`t ask, you are welcome. That`s all for tonight.

THE BEAT WITH ARI MELBER starts right now.

Ari, that harp has made me so calm.

ARI MELBER, MSNBC HOST: Calm is good. Thank you very much, Katy.

We begin with breaking news from air force one, President Trump just spoke out On the Record about Stormy Daniels. In a moment, I will have the first live reaction from Daniels` attorney.

Now here is the news. Trump speaking to reporters. He is denying that he made this now infamous $130,000 payment to her or that he knows where it came from.


UNIDENTIFIED FEMALE: Do you know about the $130,000 payment to Stormy Daniels?


UNIDENTIFIED FEMALE: Then why did Michael Cohen made it if there was no truth to the allegations?

TRUMP: You have to ask Michael Cohen. Michael is my attorney and you would have to ask Michael.

UNIDENTIFIED FEMALE: Do you know where he got the money to make that payment?

TRUMP: No, I don`t.


MELBER: Well, you just heard with something extremely unusual and certainly news-worthy. The President of the United States, denying he paid for Stormy Daniels for that secret NDA agreement. You also heard by implication the President denying that he knows where his long-time lawyer got the $130,000 to make this famous payment.

And that takes this story right now in a new direction. Because up until this hour, Donald Trump personally had no denied that he made this payment. Quite the opposite, since Trump joined the case against Daniels, seeking millions of dollars in damages against her based on, yes, this agreement and the money that would have been paid her. Trump`s lawyer, meanwhile, Michael Cohen never said or denied whether Donald Trump reimbursed him for the payment.

So what everyone thinks of Trump`s history with Stormy Daniels, the President, there on air force one just added more questions and more suspicions to this very unusual story.

Let`s get right to it here with the first response to this news is Stormy Daniels lawyer, Michael Avenatti.

I appreciate you coming on THE BEAT here on a night when I know you are in big demand. Let me ask you the first big legal question to come out of this, if Donald Trump said he didn`t make the payment and doesn`t know where the payment came from, does that call into question whether there is a valid contract in the first place?

MICHAEL AVENATTI, STORMY DANIELS` ATTORNEY: Well, first of all, Ari, let me say merry Christmas to you.

MELBER: Thank you.

AVENATTI: Because it`s a very, very merry Christmas this evening here over in our camp. You know, this is what happens when you have an undisciplined client. As you know from experience, we waited patiently. And lo and behold, Christmas has arrived.

The President`s comments on Air Force One are serious for him, serious for Michael Cohen. HO can you have an agreement when one party claims that they don`t know anything about the agreement? I mean, these guys are making it up as they go along. They don`t know what to say from day in and day out. And our case just got a whole lot better.

MELBER: When you say Merry Christmas and your case got better, you sound happy or you are sharing with our viewers that you see this as good news.

AVENATTI: No. I`m ecstatic, Ari. I`m not happy. I`m ecstatic. Let`s be clear about that.

MELBER: Clear. Claro as they say.

So if the President didn`t make the payment, in your view legally, does that mean that he may not have a right to enter into the case which he did in trying to take your client`s case out of court?

AVENATTI: Well, our position, Ari, is simpler than that which is if the President didn`t know anything about the payment, then he obviously didn`t know anything about the agreement, in which case you can`t have an agreement. And there is no such thing as an NDA, and all this blustering nonsense that we have heard from Michael Cohen through David Schwartz and others about how they are going to take my client for everything she is worth and they are going to go on an extended vacation. It`s all been proven showing to be nonsense, to be baseless.

Now, if on the other hand, what he said on Air Force One is not accurate, and I for one have serious questions as to it veracity or accuracy, they have got a whole host of problem. So, you know, we are sitting in a (INAUDIBLE) cat seat right now, Ari.

MELBER: Well, that goes to the other big question in this story, right, which is this is news when the President handles it this way and says this. It is news that it doesn`t make a lot of sense, because as we have reported previously. There are actually rules against lawyers personally funding something like this. That Donald Trump entering the case claiming to have right and forcible under the agreement which would imply that he was responsible for the payment. But then you go to weather he is telling the truth.

In your view, do these statements that we are playing, the VO, the video there of you seeing him making this unusual statement on air force one, does Donald Trump making this claim tonight in your view make it more likely that you could convince a court to sit for a deposition for him?

AVENATTI: Well, I think it does. Most certainly. And furthermore, Ari, you know, now he is effectively thrown Michael Cohen now under the bus, at least from an ethics standpoint with the state bar of New York by making these statements on air force one.

But again, you know, this is an undisciplined guy who, you know, he finally cracked. And we knew he would crack eventually. We have been patient. I have been waiting and lo and behold, who would have thought that it would have arrived on this Thursday, this glorious afternoon in New York.

MELBER: You say he cracked, you say he threw Cohen under the bus. What do you specifically mean? You are referencing the idea that if Donald Trump says as he just did in this hour, say that Michael Cohen went rogue and did this all by himself, that actually hurts Cohen within the rules for lawyers because it makes it look like he went off and did something without authority from his client?

AVENATTI: Well, that is exactly right. That he went off on his own, half- cocked, if you will, and negotiated this agreement, made the payment without any knowledge by Mr. Trump. I mean, that old saying what a tangled web we weave when we practice to deceive. Never has been more true than it is right now, Ari.

MELBER: I want to play this again both for you and for any viewers joining us because this is quite the unusual air force one statement from the President. Before I play it one more time for you. I want to ask, when you look at what he said, does it give you any more confidence about where you think this money did come from?

AVENATTI: Well, I think it`s interesting that he denied subsequent questions. I don`t know if you have that. But my understanding is that he denied a couple subsequent questions as to whether he set up a fund from which this payment would be made or reimbursed. I find that quite interesting. And I find that certainly a topic that we are going to explore in connection with his deposition which we are going to be making a petition for on Monday.

MELBER: So you are going to go ahead and - we are trying to get Donald Trump`s oppose after these comments?

AVENATTI: Absolutely. Now more than ever.

MELBER: Let me play, as promised, for folks watching. Here is the -- what we have, the full tape from these news-making comments, the President just made on air force one.


UNIDENTIFIED FEMALE: Do you know about the $130,000 payment to Stormy Daniels?

TRUMP: No, what else.

UNIDENTIFIED FEMALE: Then why did Michael Cohen made it if there was no truth to the allegations?

TRUMP: You have to ask Michael Cohen. Michael is my attorney and you would have to ask Michael.

UNIDENTIFIED FEMALE: Do you know where he got the money to make that payment?

TRUMP: No, I don`t.


MELBER: When he says I don`t know where he got the money, you know, lawyers like to parse, do you view that as a blanket denial that he`s not the source of the money, or do you see any wiggle room there?

AVENATTI: No. I think there`s certainly some wiggle room. The other thing I find interesting, Ari, is that, you know, he has doubled down now on the fact that Michael Cohen is still his attorney, still his lawyer. I mean, I guess this would be an example of one of the best and the brightest that he promised the American people that he was going to bring on board. I mean, it`s really unbelievable to me.

MELBER: Michael, stay with me, because I want to get more from you for another legal perspective as we have lawyers to the mix. I want to welcome my colleague, Maya Wiley, former counsel to the mayor of New York City. Michael will stay on the conversation.

Maya, your view of this news, and did Donald Trump as a client help or hurt himself by weighing in this way?

MAYA WILEY, FORMER COUNCIL TO NEW YORK CITY MAYOR: I`m going to agree with Mr. Avenatti. If I were sitting in Mr. Avenatti`s seat, I would be doing the happy dance. That`s and nutshell (ph). And I think he explain why.

A nondisclosure agreement is a contract. It means two parties got together, made an agreement, have something of value, what we call consideration, which in this case would be money in exchange for silence. And you`re saying Donald Trump didn`t know about it?

So, what`s the agreement? What`s the contract? And of course, the whole issue here that we are, in addition to this is the notion of with whether or not he has a campaign finance violation and is that why he is saying he didn`t know. Because I also agree it`s very, very hard to agree that you just have a purely rogue attorney who did all of this with -- for no reason because there was no affair, utilizing his own funds for a client for no reason.

MELBER: Well. And Maya, that goes to the other point, Mr. Avenatti and I have discussed and debated this legally before, which is what I have pointed out is I think a weakness to their signature argument, that missing a signature alone could invalidate the entire contract. It is not clear that is the case. Although the court ultimately will rule. But in the absence of a signature, when you have what (INAUDIBLE) consideration, when you have a payment, you say well that is like a contract, just like there`s oral contracts. It seems to me that what Donald Trump just did there whether he realized that or not was knock out that other leg of that stool in public and say on the record, well, a, there was no signature, we already knew that. B, now there was no payment allegedly, no consideration, he is not the source of the funds. And that, back to you, Maya, and then to Michael raises a question of what is left of a legally binding contract then?

WILEY: That`s exactly right. There are ways in which you could make legal arguments around whether or not there is enough indication of an agreement even in the absence of the signature. You could potentially in a case cure that not if you say you didn`t know about it.

MELBER: Michael.

AVENATTI: Ari, I`m going to go back to what I said before. I mean, you know, this is a gift from the heavens this afternoon. I mean, I could think of few things that would be better for our case than the statements that the President made on air force one.

And here`s the thing, Ari, that I find to be interesting. You know, surely he now knows about the $130,000 payment. So you know, his unequivocal statement that he didn`t know about it, I mean, just on its face, that`s not accurate. At some point he found out about it. Now, I think the correct answer would have been, if in fact he did not know about it at the time, and we believe he did. But if in fact he did not know about it, the correct answer would have been I didn`t know about it at the time, but I find out about it, you know, fill in the blank, earlier this month.

Same thing with the $130,000 payment. I mean, anyone that has been paying attention over the last month or so, notice that Michael Cohen`s position is, is that he used a home equity loan or line of credit, as absurd is that is, to make this statement. So, I`m sure the President has heard that over the last few weeks. But he didn`t clarify the answer to that question either.

So, you know, again. They don`t know which way is up, or which way is down. They are making it up as they go along. And that`s very dangerous and very problematic when you find yourself in a lawsuit especially one of this magnitude.

WILEY: Can I underscore one other point that Mr. Avenatti made earlier, Ari. Which is, you know, the one thing we know about Donald Trump is restraint is not his strong suit. The fact that he was restrained for so long, actually indicates that there may have been a reason for him to be more restrained.

Why now? It seems to me is a really interesting question. I think he was caught off guard. And I think he said something that if he had had time to think about it, he probably would have continued to stay silent for the very reason that he will now regret, which is nothing makes sense anymore.

MELBER: Right. And that he has revived it in an extraordinary way. That he didn`t need to do. You are talking about how Donald Trump operates as a client. We know that his lead criminal defense attorney in the Russia probe left allegedly over strains in whether he was following the advice and legal strategy. Donald Trump, as we point on the show, now has more private attorneys working on silencing women than he does on defending himself on the Russia probe, Maya. And so, it really goes to the question of how he deals with the counsel he gets. It`s hard to imagine any lawyer anywhere ever living or dead, who would tell Donald Trump, yes, tonight, on the air force one plane please get into this and then he said what he said.

I want you both to stay with me. I want to add to our discussion for the election law aspects of this. Melanie Sloan who is a lawyer and expert on this and joins us as well from Washington, I believe.

Melanie, as you look at these new comments from the President, and as we have reported for our viewers, it`s really the first time he` has personally said he didn`t make this payment, doesn`t know where it came from. What do you see broadly as a lawyer? And what do you see with regard to election law?

MELANIE SLOAN, ATTORNEY: Well, like Mr. Avenatti and Ms. Wiley, it`s clear that this is a wonderful day for Stormy Daniels and it certainly is not a good day for Donald Trump and his arguments about this. It also further suggests that this was in fact a campaign donation, an in-kind campaign donation. It was made right before the election. It was made to keep Stormy Daniels quiet, to help President Trump get elected. And now the President says he didn`t pay it himself. He doesn`t know anything about it. So if somebody made that payment, it was clearly to keep her quiet, to help him get elected rather than say in the case of former senator John Edwards when the issue had been also that perhaps the payment had been to keep it from his wife. It doesn`t seem like Michael Cohen would have been just so interesting in keeping this just for Melania Trump. It would have been to help President Trump become President Trump. And therefore, there has been some new life into, I think that allegations as well, that this is an in-kind campaign donation that violates the federal campaign finance law.

MELBER: Well, that is interesting. And let me go back to you on it then Michael. But couldn`t someone make actually the opposite argument and say that if true, which is a big question, we don`t know if Donald Trump`s telling the truth there, and in which case this also could backfire and hurt him in a different way. But if true and he had no idea about this, and he doesn`t know what Michael did, then wouldn`t that theory of someone just doing this rogue, make it less likely that he is on the hook or involve in this as campaign matter?

SLOAN: To me it really goes the other way. I think it is far more likely that Michael Cohen, as his long-time lawyer trying to help President Trump become the President of the United States, would have made this kind of campaign finance scam, wouldn`t made this contribution to Stormy Daniels perhaps not even realizing the campaign finance aspects of it.

Michael Cohen is not a campaign finance lawyer. He doesn`t seem to be that familiar with the ethics rules of the bar either. So, there are certainly some issues about his knowledge of the relevant law. But he certainly is now facing both ethics issues and campaign finance issues and let me say, I also think this is new and interesting for the special counsel Bob Mueller. Because the question is where did this $130,000 come from? $130,000 is a lot of money. And the special counsel has already expressed interest in the Trump campaign`s finances and some of the Trump organization`s finances now.

MELBER: Yes. Let me go to Maya on that because it also goes to whether John Dowd was right to tell Trump that no matter how bad or how guilty it looks to not do interview, you shouldn`t do it because it will be worse. This was not Bob Mueller there in the back of air force one, shutting these questions. These were relatively simple questions from reporters, but they seem to have landed Trump in some hot water, Maya.

WILEY: Yes. Even Governor Chris Christie`s advice to Donald Trump was not to talk. There was a lot of agreement that if you can`t be considered honest, truthful, and avoid implicating yourself in criminal activity, you better off keeping your mouth shut.

AVENATTI: Ari, if I could touch base on one issue? Because I think that what we saw earlier today is really part and parcel, part of a movement that we have seen in the administration for the last 10 days from in my perspective.

More and more weight is being placed on the shoulders of Michael Cohen. More and more eggs are being put in the Michael Cohen basket. And if this guy doesn`t hold up ultimately, whether it is connection with this case or with Robert Mueller, Katy bar the door, very bad things are going to happen to this administration. They are putting a lot of faith and a lot of confidence in Michael Cohen`s ability to hold up whether it be in a deposition in this case or questioning by Mueller or otherwise.

MELBER: Let me make sure I understand exactly what you are saying, Michael. Are you suggesting that what Donald Trump just did has not only hurt Michael Cohen but add to the pressure on him that could ultimately be significant because you are saying you believe that Michael Cohen knows a lot of long-term secrets about Donald Trump and his business?

AVENATTI: There`s no question. And if they ultimately, if Michael Cohen is ultimately in a position where he cannot withstand the pressure that has been placed upon him and he cracks, and rolls on the President, very, very bad things can happen. They can pierce the attorney-client privilege by way of crime fraud exemption perhaps. And there could be serious, serious consequences.

And so what we have seen over the last seven to 14 days in my view is they are setting up Michael Cohen to be the fall guy. Michael Cohen is going to be the one that is going to say I never told the President, never talked to him. And if that means I would lose my license, well, you know, I guess I`m going to lose my license, et cetera, et cetera.

And that only works so far for so long potentially with Michael Cohen. So they better have a significant degree of confidence in this guy`s ability to withstand huge amounts of pressure. As this case and Mueller`s investigation goes forward, I don`t know him personally, Ari, but from what I have seen and the statements that I have seen him make, I don`t think he has the mettle to with stand it. And that could be a very, very bad thing for the administration.

MELBER: You think the heat that`s going to be put on Michael Cohen will be too much for him now?

AVENATTI: No question.

MELBER: Well, you know, Michael, you obviously come to this as an adversary of Mr. Cohen, my job here in this chair is to remind, of course, viewers where you are coming from. But I think some of the factual legal points you make are true, no notwithstanding the fact, that you guys are adversaries.

And I will put it down like this. Bob Mueller, you mentioned the crime fraud exemption, Bob Mueller, of course, used that against Paul Manafort`s lawyer and got a judge to approve and pierce the privilege. Were that to happen to a lawyer for Donald Trump like Michael Cohen who Donald trump just said go ask him, kind of sickening the word on him. There are those air force one comments. That is something that in the criminal probe could matter.

Number two, we have reported on this show, with people who were in the room with the FBI agents working for Mueller, including Mr. Nunberg, that they are asking about payments to women, which we know from other reporting leads back to Michael Cohen.

So there is a lot here. Then you added a fact that its lawyers who sometimes are press to take the fall. John Dean, famously sent by Richard Nixon up to Camp David to work on a memo. He got half way through and realized he was going to be the fall guy. Took a U-turn back to Washington and turned on the administration. So lawyers sometimes we know can be so crucial.

Before I let everyone go, and this has been fascinating, I want to add Joyce Vance, a former federal prosecutor and legal analyst for us while I still have Michael still here.

Because Joyce, if you can join us and let me know based on what you are hearing and what you are learning, what you think of this new information both from the President and everything thus far, what stands out to you as legally important?

JOYCE VANCE, FORMER FEDERAL PROSECUTOR: This is a very surprising development. If I was the President`s lawyer, one of the principles that would have tried to pound into him would be, if you are asked about Stormy Daniels don`t respond. Nothing good happens answering a question about this from any point of view.

So now we have the President on record saying he didn`t know about the payment. And if that turns out to be in any way untrue, whether legally in terms of a criminal investigation, or in terms of the civil investigation, this may be the sort of pressure that it will be very difficult for the presidency to with stand. By boxing himself in, unless he has been scrupulously truthful, I think he`s put himself into a world of hurt.

MELBER: What I got to do is fit in a break with all these breaking news.

Joyce Vance, thanks for joining us. Stay with me, Melanie Sloan and Maya Wiley. My thanks to you for your expertise. And Michael Avenatti, there`s an old saying, you could have been anywhere in the world tonight, but you are here with us and we appreciate it given all the news. Thank you, sir.

AVENATTI: Thanks, Ari. Appreciate it.

MELBER: What we are going to do ahead is the other breaking story. Donald Trump talking about a way to get attorney general Jeff Sessions out and maybe put in embattled EPA chief Scott Pruitt. Meanwhile, new ethics allegations against him.

Also more fallout on the Stormy Daniels case and the legal implications. I have it all for you tonight.

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


MELBER: The breaking story tonight is a big one. Donald Trump still considering as recently as in the past few days according to new reports replacing Jeff Sessions, with guess who? Embattled EPA chief Scott Pruitt. All of this comes with new ethics violation allegations against him. Critics say that we are witnessing hypocrisy finally meeting some accountability for Pruitt because it is news and fact and whistleblowers that have turned him from one of Trump`s favored loyalists, that`s why he might be up for DOJ, into what is increasingly looking like a liability.

The latest headline, police projected Pruitt`s odd request for siren to help him avoid traffic in a quote "nonemergency." Meanwhile, reports of a crackdown on internal whistleblowers who spoke out against Pruitt. That means his scandals now include improper retaliation, abuse of police escorts and the original sin, this apparent air bnb hustle - I don`t know what you call it. But no matter how swampy it seems, remember, Trump is standing by his man.


TRUMP: Scott has done a fantastic job. I think he`s a fantastic person. You know I just left coal and energy country. They love Scott Pruitt. They feel very strongly about Scott Pruitt and they love Scott Pruitt.


MELBER: Pruitt had been claiming that ethics advisors cleared his air bnb rental arrangement.


SCOTT PRUITT, EPA ADMINISTRATOR: That is something that again has been reviewed by ethics officials here. They said that it`s market rate. These are career ethics (INAUDIBLE).


MELBER: That is falling apart now, two, because officials have a new memo saying they weren`t actually informed of the facts and details like Pruitt`s daughter also staying in the condo. But this story is bigger than any one cabinet member. It`s a about an administration that promise that with rich people in-charge of Washington, there would be less graft.


TRUMP: When we win on November 8th, we are going to Washington, D.C. and we are going to drain the swamp.

We are going to drain the swamp of corruption.

I see the swamp and it`s not a good place. We have begun to drain the swamp of government corruption. I said we will drain the swamp, the place went crazy.


MELBER: Pruitt joins this list of Trump officials that range from Tom Price to Ben Carson to Jared Kushner under fire for what is still probably the swampiest thing you can do abuse your office for personal game.

I`m joined now by Don Fox. He was the acting director of the office of government ethics and New York congressman Hakeem Jeffries.

First question to both of you starting with Hakeem, based on what we have learned, should Scott Pruitt get this potential promotion to DOJ, stay in his job or resign in your view, congressman?

REP, HAKEEM JEFFRIES (D), NEW YORK: He should either resigned or he should be fired. I mean, you are talking about exhibit A of the fact that a President who promised to drain the swamp has brought us an administration that effectively has become the swamp. And there`s no reason to have any degree of confidence that Scott Pruitt will be a thoughtful steward of taxpayer dollars. He is flying around the country with unnecessary security details, flying first class in some instances, using private jets in other instances. Basically trading on his position to negotiate sweetheart deals with lobbyists in order to dramatically reduce his costs of staying in a luxury condominium in Washington, D.C. I mean, the fact, Ari, that Donald Trump would even consider promoting such an individual is just the classic embodiment of the dysfunction that has been this administration since day one.

MELBER: Why do you think he would want Pruitt at DOJ?

JEFFRIES: Well, I think from my perspective, it all stems from the fact that clearly Donald Trump above all else, including the rule of law prides himself on loyalty. And he fundamentally doesn`t understand that the attorney general of the United States is not his personal lawyer.

MELBER: Right.

JEFFRIES: The attorney general is a lawyer for the people of this great country.

MELBER: Don, same opening question to you.

DON FOX, FORMER ACTING DIRECTOR, OFFICE OF GOVERNMENT ETHICS: Well, yes, it`s time for Scott Pruitt to go. Let`s just consider what we are talking about and what we are not talking about. There`s no discussion really now about whether Scott Pruitt`s policies at EPA are wise or in the best interests of the country or not. We are talking about whether the man can be trusted to do his job and will the public can actually have confidence that regardless of what you think of his policies, that he is putting the public`s interest first and rather than his own. And every indication that we have is that is not the case. He is putting his own personal interests ahead of the public`s.

MELBER: And Don, you have seen a lot of these type of stuff over in your work as the ethics advisor. You write I have the memo, you write, you and your folks write these kind of memos, now that they are saying the facts change and Pruitt looks way worse. Meanwhile, breaking in the last ten minutes curtsy of Politico, it says here and who hasn`t had this problem with Airbnb. It says, basically Pruitt fell behind on payments for the $50 a night condo rental, leading to -- and this is embarrassing, his "lobbyist landlord to pester him for payment." Now, I actually done full disclosure. Have you at Airbnb, if you have a normal arrangement, you usually have the credit card and you`re prepaid. I`ve never heard about this lobbyist- landlord side deal. But what do you make of this? It all seems incredibly cheap in addition to allegedly unethical.

DON FOX, FORMER ACTING DIRECTOR, OFFICE OF GOVERNMENT ETHICS: Well, it is. My wife and I travel back and forth to Washington not infrequently and use Airbnb. And first of all, I`ve never found the type of deal that Scott Pruitt had. If I could, we would probably try and take advantage of it. But it really doesn`t exist for anybody unless it`s offered as a special favor to a senior government official. So no, I`ve never heard of anything like this.

MELBER: And Don, from an ethics and legal view, the idea that Donald Trump might want Pruitt to replace Sessions so he can take more control of the Mueller probe, your view of that.

FOX: Well, I think the Congressman makes some excellent points about why the President might want to do that and why he might want to replace the Attorney General, but I come back to the first question you asked and that is really a question of whether Scott Pruitt is really deserving to be a public servant and be a member of the cabinet. And everything he has displayed so far, simply in terms of his ethics and how he puts his own interest ahead of those at the public seems to me disqualifies him from this position as well as being the chief law enforcement officer of the country.

MELBER: Strong take from both of you, and we see these stories continuing to break so we`ll see where it all lands. Don Fox, Congressman Jeffries, thank you very much. Up next, I have the big report at the top of the hour, Stormy Daniels` lawyer responding on THE BEAT after Trump breaking his silence in an unusual way on the story. We have more on the fallout and a key claim from Bob Mueller`s was that maybe he overstepped his authority. I have a breakdown of why the DOJ even under Trump has demolished that talking point. And later, my very special guest, co-author of Art of the Deal on why there are signs of hopes and protests tonight.


MELBER: Breaking news tonight, Donald Trump breaking his silence, this is the first time he has ever commented on the record to deny that paid Stormy Daniels $130,000 in hush money.

UNIDENTIFIED FEMALE: Did you know about $130,000 payment to Stormy Daniels?


UNIDENTIFIED FEMALE: Then why Michael -- why did Michael Cohen make it if there was no truth to the allegation?

TRUMP: You have to ask Michael Cohen. Michael is my attorney and you`ll have to ask Michael.

UNIDENTIFIED FEMALE: Do you know where he got the money to make that payment?

TRUMP: I don`t know.


MELBER: That was breaking news and then there was more news that broke within this hour on THE BEAT. Stormy Daniels lawyer responded for the very first time to those comments.


MICHAEL AVENATTI, LAWYER OF STORMY DANIELS: It is a very, very merry Christmas this evening here over in our camp. You know, this is what happens when you have an undisciplined client, as you know from experience. We waited patiently and lo and behold Christmas has arrived.


MELBER: I`m joined now by Watergate Prosecutor Nick Akerman and former Federal Prosecutor Joyce Vance who was part of that discussion with Michael. Nick, what do you see as the most important legal implication of Donald Trump`s highly unusual statements there on Air Force One?

NICK AKERMAN, MSNBC POLITICAL ANALYST: I think he`s just lost his agreement to arbitrate. I think he`s got no chance in hell of ever getting the judge to enforce that arbitration agreement. There was simply no meeting of the minds. If he had no idea that Michael Cohen was entering into this agreement with Stormy Daniels, the agreement itself explicitly says that David Dennison, also known as Donald Trump and Peggie whatever her last name was, Stormy Daniels, agreed to arbitrate, well, Donald Trump`s just given away the story. He didn`t agree.

MELBER: Right, and that sort of, again, for folks that aren`t you know, experts in contracts, it certainly not my favorite class in law school, some of this gets into a metaphysical place. But that is thing in contract debates and an NDA, a hush money agreement is a contract and it becomes is there a contract? If there is --

AKERMAN: And is there a meeting of the minds?

MELBER: Right, is there a meeting of the minds, a consideration and the contract agreement. If there is, you debate about what`s in it. If there is no contract, you all go home. And I want to play Michael Avanatti who also was driving at that legal point here tonight.


AVENATTI: If the President didn`t know anything about the payment, then he obviously didn`t know about the agreement. In which case you can`t have an agreement and there is no such thing as an NDA and all this bluster and nonsense that we`ve heard from Michael Cohen through David Schwartz and others about how they`re going to take my client for everything she`s worth and they`re going to go on an extended vacation, it`s all been proven, shown to be nonsense.


MELBER: Joyce, as I emphasize, he`s one side of the case. He has reasons for making that argument. But just on the legal argument do you buy on that point that the contract seems to be evaporating before our eyes according to Donald Trump?

JOYCE VANCE, FORMER FEDERAL PROSECUTOR: It really does seem to be maybe evaporating in just a wisp of smoke as it leaves the room. I agree with Nick 100 percent. A contract is nothing more than an agreement between a couple of parties and it`s usually backed up by something of value. And so when one party to an alleged contract knows nothing about it, it`s not much of a contract. And here`s why that matters. The real benefit that Trump gets out of this contract is the idea that it can`t be a lawsuit in open court where everyone knows all the details. What he bargained for in this NDA was the arbitration agreement. And arbitration takes place behind closed doors with no public revelation. If Trump loses the contract, he loses that sphere of privacy that would have otherwise surrounded everything about his relationship with Stormy Daniels. And Ari, it`s worth remembering that the President`s opening salvo in that matter was to say that he didn`t even know Stormy Daniels. So now we`ve got the next step in that. First, he didn`t know her, now he doesn`t know anything about the payment, it`s not much of a contract and he won`t get any benefit out of it.

MELBER: Nick, final brief thought on the point that`s been raised that Michael Cohen knows a heck of a lot and that Donald Trump just went up there and said, to the world, to all the reporters, go ask Michael Cohen. Go ask him because I don`t know anything about it.

AKERMAN: I don`t believe it for a minute. I mean, I think Donald Trump is just trying to disassociate himself from Stormy Daniels. I mean, it just seems so blatantly obvious. But he had a choice. He either keeps the contract or he admits his connection with Stormy Daniels. He decided he wasn`t going to keep the contract because he doesn`t want to admit to the relationship with Stormy Daniels.

MELBER: Nick Akerman and Joyce Vance, I don`t know that we`ve ever covered presidential comments like this. I thank you both. Meanwhile, there has been a big argument you may have heard on the right about why Bob Mueller has exceeded his authority. And now Fox News has a new chapter in that. What I`m going to do next is give you my legal breakdown on why a very key DOJ memo that came from a Trump appointee is undermining those talking points and why it matters for the future of the Mueller probe. That when we`re back in 90 seconds.


MELBER: The giant gun control marches across America are still reverberating. One million people in Washington across the nation, even more, and marches around the world. This whole push of course starting with students. Some say this is going to be memorable for the ages.


CHUCK TODD, MSNBC HOST: There`s really a handful of marches that you remember that our town remembers, the civil rights marches of the `60s, the abortion rights marches of the `80s and `90s. Tea party, a million man march I think about those things. This is right up there.


MELBER: Rare is the development in today`s politics that could get anywhere near Abraham Lincoln`s famous tribute to a world remembering not what is said but what is done. And the world remembers what was done in the Vietnam protest. Maybe not the worst to every speech or every song, but people remember Americans fighting that draft, we remember the shift, we remember students not only taking on Congress but a sitting Democratic President. You know, the establishment didn`t think LBJ was vulnerable, let alone that that consummate politician would abandon his reelection quest from inside the White House. It was young people who pushed that seeming impossibility into reality. That kind of change does not have to be organized around outrage either. Barack Obama has publicly mused on how older voters were initially skeptical of him but young people stepped up.


BARACK OBAMA, FORMER PRESIDENT OF THE UNITED STATES: I was never the likeliest candidate for this office. It grew strength from the young people who rejected the myth of their generation`s apathy. This is your victory.



MELBER: I`m joined now by Tony Schwartz. He is, of course, the co-author of The Art of the Deal but he also the author of The Way We Work Isn`t Working. And he`s runs something called The Energy Project that digs into many of these issues. Let`s start with how young people in this new gun movement are doing something that we do remember from the civil rights in Vietnam era.

TONY SCHWARTZ, AUTHOR, ART OF THE DEAL: Well, I remember being inside the building in our mutual alma mater University of Michigan taking over that building in the 1970s. so I have a very vivid memory of that and of all those marches. And I think that what`s transformationally changed the experience compared to that one at that time is the blend of the digital world and how it is a microphone and a screen to the world. So these are folks who are incredibly digitally sophisticated at 16. And we have the emotions of this particular thing. Vietnam was kind of a little abstract and thousands of miles away. This is my future, my safety, my life.

MELBER: Senator Claire McCaskill said she was feeling pressure from people to endorse Hillary, in the first 2008 primary, a fellow woman Senator and then she famously said at the urging of her 18-year-old daughter, she couldn`t sit in the bleachers anymore, felt like she needed to get on the field, fighting for what I think is so important for our country. And I would note, that was January 2008 when Barack Obama was still basically the underdog. What do you think about that, a Senator, someone who lives as a political leader, acknowledging it was -- it was her daughter that moved her?

SCHWARTZ: I think the young shall inherit the earth. I mean, I think here I am, I`m a grandfather, I can feel it -- I can feel it coming. I can feel it reverberating in my kids already. And I think the lack of cynicism of young kids, the rawness and the degree to which they`re hooked into this digital culture. I mean, you`ve got -- basically you`ve got a digital world against and an analog world.

MELBER: What do you say as someone who I`ve learned is a pretty deep thinker to the fair logical critique that there is a policy and progressive embrace of the youth as spokespersons as if it can`t be replicated when certainly it can?

SCHWARTZ: Well, are you asking is there another point of view among young people? I mean, is that your question?

MELBER: It exists. I`m saying --

SCHWARTZ: Of course it does.

MELBER: The prop, is there a concern about the movement attaching so strongly to those young people who were moving on the stage that they can become a kind of prop?

SCHWARTZ: Of course that`s a risk. But you know what, it isn`t only young people, it`s kind of extended tribe now to women in MeToo, it`s inter-city Black and Hispanics, it`s all kinds of people, to all of those people who voted for Bernie in the primary you know, two years ago. So there`s a new group that`s emerging that is coming from many different angles and that I believe is, as I said earlier an evolutionary force.

MELBER: And are they Democrats or liberals or it doesn`t matter?

SCHWARTZ: Well, kids under 30, for example, voted for Hillary by a margin of17 percent. And Hillary was not a strong candidate, and that`s far better than she did with any other demographics so -- or any other age demographic. So I do believe that if you think of this as evolutionary and you think of evolution as seeing more, having a perspective, Ari, that`s wider, deeper and longer, that is a progressive view. That is a more, if you want to call it liberal, that`s kind of a dirty word in some places, but progressive, it does seem to me that is the case.

MELBER: Right, I only want to put a word on it because you think deeply about the underlying issues here and it`s my job as a television presenter to simplify it to the point of uselessness. That`s what I do.

SCHWARTS: Yes, thank you for doing that, Ari. I appreciate it. Good to see you.

MELBER: Tony, I really appreciate you coming by as always.


MELBER: And that`s how we do it. And I want to tell you, as I mentioned, up ahead, I`m doing this special legal breakdown on the DOJ memo from inside the Trump administration that undercuts a big Fox News talking point and where Mueller is headed, that`s next.


MELBER: Now to a breakdown. A key talking point from Mueller`s critics demolished. When Bob Mueller first brought those charges against Paul Manafort last fall, there was a big attack you may have heard from the right wing that Mueller had overstepped his authority because the charges didn`t look like they were directly about Russia or collusion.


SEAN HANNITY, HOST, FOX NEWS CHANNEL: This indictment has nothing. Let me repeat, nothing to do with Trump/Russia collusion. Zip, zero, nada.

LOU DOBBS, HOST, HOST, FOX BUSINESS NETWORK: This is a sad showing it seems to me on the part of the Special Counsel. There does not appear in the case of Manafort and Gates appear to be any connection to Russia, collusion.

GREGG JARRETT, ANCHOR, FOX NEWS CHANNEL: Manafort and Gates engaged in alleged wrongdoing that had nothing whatsoever to do with Trump or Russia or collusion.


MELBER: That was the big claim. Nothing to do with collusion and thus Mueller was overstepping his DOJ authority. Now we learn this is not a matter of opinion because at the time those critics were saying that Bob Mueller`s boss, Trump appointee Rod Rosenstein had already privately authorized Mueller in writing to pursue those very Manafort charges in the context of "colluding with Russian government officials" and charges against Manafort for committing crimes arising from those Ukrainian payments. And there`s more. Rosenstein writing about other powers he gave Mueller. Now that is blacked out. What you see on the screen so we don`t know where that trail leaves. And we`re only learning about this right now because Paul Manafort`s lawyers filed a legal attack on Mueller`s authority that backfired, leading to this news as Rachel Maddow reported.


RACHEL MADDOW, MSNBC HOST: In the middle of the night, we got a new court filing from Mueller`s prosecutors. We learned from this new court filing that there was also subsequent to that public statement establishing the Mueller investigation. There was also another bit of instruction. August 2nd last year, another basically sheet of instructions from Deputy Attorney General Rod Rosenstein to Bob Mueller`s office explaining to him, confirming in writing a whole list of specific stuff that Mueller was cleared to look into as part of his investigation.


MELBER: Bob Mueller`s office doesn`t leak much but if you turn rig0ht wing talking points into a court filing as Manafort`s lawyers did, you can end up playing yourself because it turns out not all talking points hold up and Rosenstein`s clear support for Mueller`s authority may explain why for some now on the right it is Rosenstein who they see as the new Mueller in the sense he`s one at DOJ they want to get rid of.


HANNITY: Rod Rosenstein needs to be fired.

UNIDENTIFIED MALE: Let`s say this first of all about Rod Rosenstein. His conduct from the beginning of this has been a disgrace legally and every other way. He is an embarrassment to the administration.

UNIDENTIFIED MALE: Rod Rosenstein is a coward. He`s a disgrace to the Department of Justice.


MELBER: That was last night and that man you saw there speaking is a Fox pundit who became Donald Trump`s criminal defense attorney for Russia for six days. Manafort`s setback is a reminder of something that even President Trump may be slowly learning. There is a big difference between court and court T.V.


MELBER: Facebook CEO Mark Zuckerberg headed to testify before the U.S. Congress next week and then you have this other story tonight. Other countries, including the U.K. and India, cracking down on the social media giant as well, a story we`ll be watching well into next week. That does it for THE BEAT tonight. "HARDBALL" with Chris Matthews is up next.

CHRIS MATTHEWS, MSNBC HOST: Heating up the temperature. Let`s play HARDBALL.