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Trump DOJ may indict key Mueller witness. TRANSCRIPT: 04/19/2018. The Beat with Ari Melber

Guests: Peter Stris, Tony Schwartz

Show: THE BEAT WITH ARI MELBER Date: April 19, 2018 Guest: Peter Stris, Tony Schwartz

ARI MELBER, MSNBC HOST: Good evening, Chuck. Thank you very much.

Our top story tonight is a potentially serious turning point in the legal cloud that is hanging over the Trump presidency. The Trump justice department tonight is considering charging a key witness in the Russia probe with a crime. Potential target is the former deputy to James Comey, Andrew McCabe. He is a central figure, of course, because he is one of the few people who can corroborate James Comey's accounts of alleged misconduct by Donald Trump. You probably heard his name because he was the first deputy FBI director to be fired in American history in that unusual secretive Friday night process overseen by attorney general Jeff Sessions, involving a topic investigating Hillary Clinton, which Jeff Sessions had claimed he was recused from.

And that firing came after months of public attacks from Donald Trump himself. You see there, who argued McCabe was racing to retire with pension benefits. McCabe losing effectively those benefits because of the DOJ firing over an alleged lack of candor for his conversations with the press about Hillary Clinton.

Now this week, Donald Trump is blasting McCabe's old boss James Comey and calling for him to go to jail.

So this is very serious what we are reporting here at the top of our show tonight, what's happening right now. The President of the United States, attacking law enforcement, calling for the jailing of a witness to his own potential obstruction, while also 11 Republicans in Congress are calling for charges against Comey, McCabe, Lynch, and Hillary Clinton. And at this moment, the Trump DOJ is now going way past that firing of McCabe over the supposed or alleged lack of candor and now considering indicting him, NBC reports.

If he is indicted, McCabe would be a far less effective witness in any future case brought by Bob Mueller. If this former FBI official, McCabe, is convicted and jailed, well, he would be a less available witness to say the least.

I want to tell you something, tonight, it looks like we are entering into the truly uncharted territory.

Now the news was breaking as James Comey sat for one of his many book interviews today where he addressed the allegation that his former deputy lacked candor.


JAMES COMEY, FORMER FBI DIRECTOR: I have read the report. I'm not the judge in the case. I'm not the discipline decision-maker in the case. I think it is accountability mechanisms, working and they should work. Because it's not acceptable in the FBI or the justice department for people to lack candor.


MELBER: Not acceptable to lack candor. He is referring to the personnel report.

The charges issue is the new big thing. Now, McCabe, of course, had assumed James Comey's job after Trump fired Comey. And McCabe kept his own memos about Donald Trump, surely of interest to the White House and he assured Congress his loyalty was only to America.


UNIDENTIFIED MALE: Have you been asked for a loyalty oath by the President?

ANDREW MCCABE, FORMER DEPUTY FBI DIRECTOR: I have taken an oath already to the United States of America to protect and defend the constitution. That is the only oath I will take.


MELBER: So consider this from what you just saw there. In a matter of months, the Trump administration moved McCabe from being the top law enforcement officer in our nation to, tonight, a potential defendant. The hunter becomes the hunted.

Now no one knows if DOJ prosecutors would ultimately move forward and charge this former FBI official. The referral reportedly made months ago, but, yes, this news is breaking tonight at the very time Donald Trump is making moves, adding lawyers to his legal team, including his long-time adviser Rudy Giuliani. NBC confirming that tonight.

And I can report here on THE BEAT, that Trump is now taking legal advice from another former lawyer of his, on Russia, explicitly, Jay Goldberg. I have an exclusive report from my new conversation with him later in the show. So there is a lot going on.

These moves, though, to be clear, are happening as the feds continue to bear down on a lawyer that Trump cannot rely on anymore, Michael Cohen, who also just folded in a separate legal case he had brought against people associated with the Russia dossier. And all these moves are happening as Republicans press Mueller's boss, Rod Rosenstein. They are threatening him with contempt this week.

And as reports break tonight that Rod Rosenstein assured Donald Trump that he is not a target of the Mueller probe at this time. And as Congress is getting its hand on James Comey's famous memos about Trump. I didn't make it up. We didn't make it all happen. Those are also being handed over to Congress tonight.

So that's a lot. And some of it is happening as sheer drama. Some of it looks like it's happening as an element of distraction. Note that this Giuliani news is breaking within hours of the far more significant leak that the Trump DOJ may indict a key witness in the Russia probe.

As I often say as we go through these times, there is a lot we still don't know and that we have to figure out. But before I turn to Maya Wiley and my panel tonight, let's reflect on this.

We do know the Trump administration is under a very serious criminal investigation for obstruction of justice. And now we know that during that very probe, take it all together, Donald Trump has tried to fire the lead prosecutor, Bob Mueller. He has talked about firing Mueller boss, Rod Rosenstein. He did fire the FBI director. He pushed for the ousting of the deputy FBI director. He has raged publicly against his own attorney general for not taking more control of this obstruction probe. And tonight, add to all that, we learn the Trump justice department may try to jail that same deputy FBI director.

This is not normal. I'm joined now by Maya Wiley who is a former counsel of New York City mayor and a practicing attorney, as well as Matt Miller who has worked at the justice department under Eric Holder and former federal prosecutor Renaldo Mariotti.

Maya, I begin with you and the notion that Andy McCabe may have made a personal failure, a bad decision at work, which was the debate up until today, but whether this former FBI director himself should be charged with a crime over this. Does this sound right to you?

MAYA WILEY, FORMER COUNCIL TO NEW YORK CITY MAYOR: This sounds like politicizing the justice system to me. If you look at the allegations are against Andrew McCabe, which essentially boils down to, we were investigating whether or not you spoke to a journalist and revealed the existence of an investigation and then were less than forth coming with us when we asked you about it. Violating internal policies and certainly giving that under oath, that we're going to take that, where even James Comey himself did not make a statement that said that he did not have legal authority to reveal what he revealed, right, to Barrett (ph), to the reporter for "The Wall Street Journal." I mean, that suggests that what we really have here is much ado about nothing. And when I say much to do about nothing, I mean, when you are talking about the criminal justice system --

MELBER: Right. Would jailing a potential witness in the Mueller probe for political reasons be as big a deal as trying to fire Mueller?

WILEY: Well, I would say that it's a huge deal to fire Mueller. I would say that tainting the credibility of a witness for your own ends is certainly problematic. That doesn't mean that's how the decision would be made. And let's be real here. There is -- it is Hillary Clinton, her case was referred for investigation from the oversight from the watchdog of her agency, which is what kicked off the email investigation. And she was not charged with a crime.

So simply the fact that it was referred is not uncommon and does not mean he will be tried or I mean, will be investigated and charged with a crime. Given the facts of this case, it would be kind of startling to me that he was.

MELBER: Right. And a big difference, Renato, in contrast to the Clinton case, is the sitting President at the time was not on a war path, publicly attacking and impugning a person. The process played out in a slightly more normal way at least until James Comey got involved. We can get into that. We covered that on the show. Does this concern you, Renato, and do you think there is a case for indicting Andy McCabe?

RENATO MARIOTTI, FORMER FEDERAL PROSECUTOR: Well, first of all, going to that public attack that you talked about, Ari, that actually would be something that McCabe could use to his benefit if there ever was an indictment in this case. He would argue that the President tainted the jury pool.


MARIOTTI: You have Donald Trump out there saying --

MELBER: And I got to argue that - I got to argue though, I'm asking you, whether there's a case against McCabe.

MARIOTTI: Yes, I mean, there is a case. It is just, I think it's weak. It's not something you could prove beyond a reasonable doubt. It ultimately comes down to Comey and McCabe say different things about what was happening. And there's some corroborating evidence to suggest Comey was right. If you read the report, that's basically what it comes down to. And typically, on a case like this, you don't charge based on a he said/he said in terms of false statements.

MELBER: Right. And yet, what we see here, Matt Miller, if one wants to take a somewhat skeptical or even (INAUDIBLE) view, is that two key witnesses, James Comey and Andy McCabe, against potentially Donald Trump in the obstruction matter, are now having a public feud with the potential looming threat of jail, which certainly would seem to re-downed to Donald Trump's benefit, the subject of that other probe.

You know, a lot of people underestimate him. It seems like he is pretty good right now at getting this to look a certain way. We are not just about how it looks here. So let me read two legal points and get your response, Matt.

Number one, the standard for lack of candor definition, which is knowingly providing false information but does not necessarily require the intent to deceive. Which is to say, it is a lower bar.

Then when you look at the actual false statements thing, which is the type of law you would get if you were talking about charges, it's falsifying or concealing a material fact or materially false statement, which as you know is much higher. Your analysis?

MATT MILLER, FORMER DEPARTMENT OF JUSTICE CHIEF SPOKESMAN: Yes. Look, every year the FBI puts out a disciplinary report of agents, not by name, but they will list cases where the previous year, agents have been disciplined or fired for actions. Lack of candor comes up over and over, agents being fired for that offense, as Andy McCabe was. I'm not aware of any of those agents that are prosecuted for lack of candor when talking to internal FBI investigators.

Now the President has put a cloud over this entire matter just as he put a cloud over McCabe's firing and made it impossible to really, you know, disentangle and find out whether he was fired for appropriate reasons or because the President was putting pressuring the justice department.

Now, I believe this referral came from the inspector general. I don't have any reason to think the inspector general is acting in bad faith. And if it's handled the way these cases are usually handled, it will go to the U.S. attorney for the District of Columbia.

MELBER: Right.

MILLER: That person --.

MELBER: I don't know about bad faith and I will let you continue with your analysis on the D.C., but before we get to that, you are talking about Michael Horowitz who is the inspector general, who is a career person. But we have reported this on the show. And tonight is an inflection point, whether or not there's bad faith as a reporter, I cannot say. I can report that this was a highly unusual way to do the disciplinary process. That the underlying investigation which was initially requested by James Comey was for the criticism and concerns around his handling of the Clinton email case. And before that was ever concluded, and Lord knows it's been a long time now, they parceled out just this separate report on Andy McCabe, just in time for what the President of the United States had called for, which was beating the pension clock on twitter. So there's certainly some unusual things, whatever faith or reason they come from, Matt.

MILLER: That is absolutely right. And because of the President, as I said at the outset, the President's repeated attacks on Andy McCabe, his calls for him to be fired, his calls for him to be stripped of his pension, his called for him to be prosecuted, it's hard to trust from the outside that the department is acting completely appropriately.

Now, what I was going to say about the U.S. attorney for the District of Columbia? That U.S. attorney Jessie Lew (ph), a long-time career federal prosecutors, well respected by both sides of the aisle. Had a lot of Democrats who supported her for that position. The President did take the unusual step of interviewing her personally. But I don't have any reason to question her incredibly or her integrity.

I would suspect left to her own devices, she would make an independent call about whether this prosecution should go forward. But that's the key question, is whether she was left to make this decision on her own. I think as the, you know, whatever outcome we get, the public, the press, members of Congress, are going to have to put some scrutiny on the justice department and say, was this prosecutor allowed to follow the usual course? Or was there pressure that came from above from the attorney general or the President himself that led to an outcome?

MELBER: Right. And the President is out there talking about jailing these people. I mean, that's where we are. It's almost as if some people wanted to just sort of not look at that. And that's where we are.

Renato, Jake Tapper did a very solid interview with James Comey, pressing on some key points, and at one point raised the issue of whether he could become a witness in this separate potential case. Take a listen.


COMEY: Given that the I.G.'s reports reflects interactions that Andy McCabe had with me and other FBI senior executives, I could well be a witness.


MELBER: What do you think of the way James Comey is weighing in on this, which is all about, again, something that he started? As I mentioned, it was the Clinton matter that led to the I.G. investigation and he seems to be slightly turning on his deputy.

MARIOTTI: Well, I think what it really shows, Ari, is that Comey and McCabe aren't part of some grand conspiracy to harm Donald Trump. They are two men who don't always agree on everything. In this case, actually, they made contrary statements to each other and that's a part of the basis for the referral of McCabe.

I actually think what it shows is that both of these men are independent decision-makers. And frankly, you know, it speaks to Comey's credibility, that he is not just, even though he likes McCabe and they are friends and they work together, that he is saying what he believes to be the truth. I actually think -- I'm not -- I'm not in lock step with everything Comey's done. I don't agree with him a hundred percent on everything, but I think this speaks to his character.

MELBER: Well, we have a lot of evidence and public record and corroboration about James Comey's roles in these events, more than we normally would in investigations. And I will say his judgment has been highly questioned by a lot of credible people. His honesty On the Record and his ability to actually report facts has not really been questioned. And so the factual part of this is interesting as you said. For him as what we would call, a fact witness, separate from the ongoing debate about the judgment.

I want to fit in a break. Maya, stay with me because I want to ask you about another big breaking legal story. Matt and Renato, thank you both for being a part of our coverage tonight.

I have upcoming a Special Report on Michael Cohen's legal problems and why he is now dropping his big attack, his lawsuit, on the Trump dossier.

Also, what might we hear from the former play boy playmate who had this alleged affair with Trump. She also benefitting from the Cohen raid because she is free to talk. I'm going to interview her attorney live tonight on THE BEAT.

Also I have exclusive news about the Trump team and who is advising him in the Mueller probe.

Plus later, a live interview with Tony Schwartz, co-author of "the Art of the Deal," talking about why people believe Trump's lies.

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


MELBER: The FBI raid on Trump's lawyer Michael Cohen has put incredible pressure on Donald Trump, and obviously cost him his most trusted lawyer and fixer. Well, tonight, we can report Trump is filling the vacancy. He added Rudy Giuliani to his legal team today. And I can report, as promised exclusively here on THE BEAT, Trump is also now getting privileged legal advice from a lawyer who represented him at one point for a 20-year span, Jay Goldberg. Now, you may actually recognize him from a recent appearance on THE BEAT where he said the feds have a major hammer over Michael Cohen.


JAY GOLDBERG, FORMER TRUMP'S ATTORNEY: The bank fraud carries a penalty up to 30 years and a $1 million fine. That's a very big hammer to hold over a person.


MELBER: That is the man, of course, who preceded Michael Cohen as Trump's key lawyer.

I also spoke to Goldberg late today. And he broke some more news about the Trump legal team. He tells me, he is not a former lawyer to Trump. He says he is currently giving President Trump legal advice on the Russia probe. In fact, I was asking him about James Comey and he told me he currently has attorney/client privilege with President Trump.


MELBER: What about Comey?

GOLDBERG: No, I can't, because that's attorney/client privilege. Right? He called me for advice.

MELBER: Are you currently representing him?

GOLDBERG: I haven't been retained, but I have never been retained by him in the 20 years.

MELBER: Are you giving him legal advice on the Mueller matter?

GOLDBERG: Well I gave it.


MELBER: That's an audio recording of our phone call. He is telling me that he has current attorney/client privilege. And Goldberg says he is advising Trump now to Mueller. And that led us to some more topics.

Goldberg telling me that he is warning Trump that Michael Cohen may flip on him. And not only that. He told me the pressure of an effective basically potential life sentence would be so hard on Michael Cohen's family. He says, when a guy goes to prison, his family goes to prison. And he notes the feds might even lead Michael Cohen to say misleading things to hurt Trump, that the pressure would make him think of the ways quote "he has been screwed," the manner in which he's left holding the bag, and why should other people be absolved when he is quote "innocent."

And that's not all. Goldberg also brought up how Trump should be afraid of one of Mueller's toughest prosecutors, Andrew Weissmann. His name well- known to Trump defenders.


UNIDENTIFIED MALE: Weissmann is a notorious lawyer, known for abusive tactics, and for weaponizing the law in a ruthless and often unprincipled quest to convict.

UNIDENTIFIED MALE: He is a legal thug and has a long history of abusive tactics. Weissmann should resign immediately or be fired immediately.

SEAN HANNITY, FOX NEWS HOST: Andrew Weissmann, not only needs to be fired but fully investigated.


MELBER: So people who talk to Trump a lot are talking about Weissmann. He has made his own headlines for being a tenacious federal prosecutors and flipping witnesses. Now tonight, again, more from this interview, Goldberg telling me, and this is the first time this has ever been reported or alleged. He says that Trump's White House lawyer, Ty Cobb, got an agreement from Bob Mueller to keep Weissmann away from Trump, which would be very unusual. And here's this exchange in full.


GOLDBERG: Mueller has agreed not to have Weissmann involved in any investigation of the President. That's a little known secret, but I found that out.

MELBER: Who told you that?

GOLDBERG: Somebody on the President's staff.

MELBER: That was a White House lawyer or a staff member?

GOLDBERG: Yes, a White House lawyer.

MELBER: Was it Ty Cobb?

GOLDBERG: Well, yes.


MELBER: Yes. I'm joined by Natasha Bertrand, staff writer for "the Atlantic" and Maya Wiley back with me.

Maya, what do you think of this news?

WILEY: Well, one, I think it's good that Donald Trump is getting legal advice. As we know he needed some more personal lawyers, not just the lawyers he had inside the White House.

I think obviously there's a lot in here that we don't know. So, for instance, its a few too many layers of hearsay for me to say that, and believe that necessarily we know what Mueller is doing with his team and who's assigned to what.

MELBER: Well, I think what's significant is, number one, this is another lawyer who goes on TV who is advising the President, according to this lawyer. "The Wall Street Journal" and others have confirmed that he spoke to Donald Trump within the last few days. He is going to be, I should mention, on TV again. So he is out there in a very kind of authorized way.

I will mention in my caveats that the White House declined to comment for this, which also means they declined to publicly deny it. And the special counsel's office, Bob Mueller's office declined to comment as is their practice almost every time we reach out.

WILEY: And if it's true that Mr. Goldberg actually advised the President to fire Rod Rosenstein, that is also significant.

MELBER: Do you think that it is telling that there is so much concern about Andrew Weissmann?

WILEY: I think it's telling that there's concern about how aggressive the investigation is related to Donald Trump. Because I don't think it's all really about one attorney on a very high level, talented team that has a very deep bench.

MELBER: Natasha, here was the same lawyer, Jay Goldberg on "THE BEAT" talking about Weissmann.


GOLDBERG: If the deputy chief, Andrew Weissmann, is behind the asking of the questions, then it's for the purpose of setting him up. Because among the people he has indicted, there will be one or two people who will be cooperating in former witnesses.


MELBER: Other legal experts we spoke to said it would be highly unusual, if not inappropriate, for a prosecutor's office to make their personnel decisions based on what the subjects of a probe wanted.

NATASHA BERTRAND, REPORTER, THE ATLANTIC: Right. It would be surprising, but there's also a way that Trump's lawyers would finagle their way into keeping Weissmann away from the President. There were communications that were folia that indicated that Weissmann emailed former deputy attorney general Sally Yates, congratulating her for opposing the travel ban. There's also evidence, according to "the Wall Street Journal," that he attended Hillary Clinton's victory party, or, you know, what would have been her victory party the night of the election.

So there may be some allegations of potential bias there that Trump's lawyers may be using in order to keep Weissmann away. And the reason they are keeping him away from the President, they are terrified of him. He is known --

MELBER: Why are they terrified of him?

BERTRAND: He is known as an absolute pit bull. He is known to be brilliant. And he, of course, was one of the top prosecutors of all the mob bosses in New York City. He also was very instrumental in taking down all of the players in the Enron scandal. So he has a pretty pristine reputation, and the place where he could run into some trouble is these credible -- these potential allegations of bias that may taint his part of the investigation.

MELBER: The other piece to this is that he's reportedly business with the Manafort case. So it is possible that Mueller's team would say something true, like, no, he is not currently involved and plans to interview the President or do the personal power with the President because he is on Manafort without it being an agreement. What do you think of that theory?

BERTRAND: Right. It's definitely possible. He, of course, oversaw the raid into -- on Paul Manafort's home last July, the big raid that saw the FBI agents going in and taking all of the documents, and ultimately that helped lead to his indictment. So this is something where they could have Weissmann put on the Manafort angle of this and not need him at all for the President angle. That does not mean, of course, he's going to be taken off the investigation entirely, it just means he is going to be focusing on something separate, which, of course, would not diminish his importance in any way to the overall probe.

MELBER: Excellent points and a lot to get to.

Natasha, thank you very much. And Maya, stay with me.

I have another interview coming up right now, but I want to mention my good friend Lawrence O'Donnell has Jay Goldberg, TV lawyer, as a guest tonight, 10:00 p.m. eastern.

Now to a very interesting development, it is also coming out of the Michael Cohen raid. There was that other big legal matter. Karen McDougal's fight to say that she wanted to be released from any secrecy agreement about what she alleged was an affair with Donald Trump. It was "the National Enquirer" company that reached this deal with McDougal that now basically will allow her to talk about that relationship. It comes after the raid where the FBI agents were seizing materials including information about Cohen's role arranging for the Enquirer to by her story which included effectively by her silence.

I'm joined now by Karen McDougal's attorney, Peter Stris.

Thanks for being here.

STRIS: Thank you for having me.

MELBER: Why did you get such a good outcome for your client?

STRIS: I mean, I think the short answer is, this is not a case that AMI wanted to fight. And there's a real risk to them that they have to engage and discovery and the things we allege would be established. And so they folded. And it is a total victory. Basically, everything we wanted at the beginning they gave us. And so, when that happens, you have to just sign on the dotted line.

MELBER: Did the FBI heat on Cohen help you get to this point?

STRIS: I think it probably helped. But I actually think it wouldn't have mattered. I think it's so clear the issues that we presented were there and were a problem. The minute the federal election commission started investigating them, I think we were going to get there.

MELBER: If your client made this deal with "the National Enquirer," why was Michael Cohen involved?

STRIS: I mean, it's the $64 million question.

MELBER: Or is it the $130,000 question, depending on the case?

STRIS: Yes, 150 in ours.


STRIS: I mean, at the end of the --.

MELBER: You don't know?

STRIS: We don't know, no.

MELBER: Do you think it's nefarious?

STRIS: Of course it's nefarious.

MELBER: Of course, it is nefarious. Because in the complaint here, you say that AMI worked secretly in corroboration with Cohen and McDougal's own lawyer. And now in your new settlement, very interesting, nothing in this agreement releases any claim that McDougal, you guys have or may have, against Keith Davidson or Michael Cohen.

STRIS: Yes. Let me tell you what we know for sure. Keith Davidson went on TV and he said, and this was him defending himself, he said, I called Michael Cohen. And I told him that the deal was done, as a professional courtesy. I have never heard of such a thing. You strike a confidential deal for your client and then you call someone who is not involved in the deal as a professional courtesy.

MELBER: Was "the National Enquirer" acting as the arm of Donald Trump and Michael Cohen? And if so, was there something wrong with that?

STRIS: We strongly suspect they were.

MELBER: Can you prove it?

STRIS: Well, if the lawsuit had continued, we would have been able to prove it. But this is important for anyone criticizing the settlement, and things that anything other than a total victory, they need to understand what Karen stood to gain or lose by the case. This was a situation where, if we win, at the end of the day, Karen gets released from the contract. And she gets her life rights back. And she probably would have to pay the $150,000 back, which she was willing to do. The settlement gives her her life rights back, period, and she doesn't have to pay anything back.

ARI MELBER, MSNBC HOST: Are you going to sue Michael Cohen?

STRIS: I think we're taking it day by day to see what happens. Right now, Karen is just excited to move on and not have to worry about being under the --

MELBER: I'm not sure that I completely believe that answer. You strike me as an able attorney who plans ahead. So you probably have an idea about whether you're going to sue Cohen or not. You just don't want to say?

STRIS: No, you asked directly, I'll give you a direct answer. If Michael Cohen or Donald Trump or Keith Davidson takes steps, which I would not put past them, to put Karen in an uncomfortable position, we will sue them.

MELBER: So you have that move cocked, but you're not necessarily going to do it?

STRIS: Yes, that's exactly right. At the end of the day, we represent Karen and we've said this from day one, she wants to be able to defend herself and have a normal, functional life. And so, we're responding or being reactive but that's the right thing for her.

MELBER: Well, look, it's 6:30 p.m. on the East Coast, and this is the time where I turn to Maya Wiley and say, what do you think of this lawyer?

MAYA WILEY, FORMER COUNSEL TO NEW YORK CITY MAYOR: He's a great lawyer. He delivered for his client.

MELBER: Do you think he's getting results for her?

WILEY: He just said it. If he -- if she's not returning $150,000 in exchange for getting this release reversed, that's a win and that's a significant win and I think that's exactly the right way to think about it. And I think the very, very blunt statement about whether and when there might be a suit against Michael Cohen is also very honest because he's now said very publicly that if they don't come for her, he's not coming for them. And I think very rarely do lawyers make that kind of public statement.

MELBER: All right. Well, you got a good grade and it's a fascinating case.

STRIS: Well, we appreciate that. That's -- we're really happy where we've ended up.

MELBER: Peter, thanks for coming in. Thanks for taking the questions. Maya Wiley, great to have you throughout the show as always. Up next, I turn to my special report, the threat that Michael Cohen does pose to Trump, and what happens when a fixer can no longer fix things?


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Michael, thank you, not only for the introduction but also for a beautiful speech. I think Michael worked very hard on that speech.


MELBER: Also tonight, my interview with the co-author of the art of the deal on Trump gas lighting.


MELBER: Tonight is not a good night to be Michael Cohen. For years, Trump's personal lawyer cultivated an image as the ultimate fixer. He even compared himself to the T.V. character Ray Donovan who does anything to protect the boss.


UNIDENTIFIED MALE: We've done bad things, Ray. I've asked you to fix things that should never have been fixed.


UNIDENTIFIED MALE: Terrible things.


MELBER: Terrible things. Kind of funny that you'd make that comparison yourself, but Cohen leans into it. He even tweeted, #loyalty, #RayDonovan, #Fixer. But in these ten days, since the feds raided Cohen's home and office, the fixer can't fix his own problems and they are stacking up. Consider the wider implications of just the wider 24 hours. The man who preceded him as Trump's lawyer publicly revealing, he's warning Trump Cohen will flip. We talked about that tonight. The National Enquirer now giving up and settling with the former Playboy model who says Cohen tried to keep her quiet. We just interviewed her lawyer about that problem. And Cohen dropped his libel suit against BuzzFeed and Fusion GPS over what he claimed was defamation in the infamous Russia dossier. That decision is key. Remember, the dossier alleges that Cohen secretly me met with Kremlin officials in Prague to clean up the mess left by Manafort and then to talk about, "how deniable cash payments were made to hackers in Europe who worked under Kremlin direction against the Clinton campaign. I read that to you, it's not verified, but that is what collusion would look like if it were true. And I report to you accurately, Cohen has denied it all. But almost a year later here, after BuzzFeed publishes that dossier and after he sues for defamation, which at the time, got him a lot of praise.


UNIDENTIFIED MALE: Enough is enough. President Trump's personal lawyer taking legal action against that, "fake Russian dossier."

UNIDENTIFIED MALE: He's a private citizen doing his job and they accused him not of jaywalking, they accused him essentially of treason. And I think he should defend himself.

GREGG JARRETT, HOST, FOX BUSINESS NETWORK: It's a legitimate defamation lawsuit, a false statement and clearly the dossier is false that damages somebody's name and reputation.

SEAN HANNITY, HOST, FOX NEWS CHANNEL: I'm glad Michael Cohen is fighting back. Truth does matter.


MELBER: Truth does matter. And if it is a legitimate defamation suit, you could continue it and maybe win it even during this criminal investigation. That just changed. This is super important. Cohen is not fighting back anymore. In fact, while Cohen claims that his basic suit there would have merit, he says he now doesn't have the time to do this case. The decision to drop the lawsuit comes, though, just days after a report that Mueller is confirming part of the dossier's claims about Cohen. We haven't confirmed that here at NBC. If Cohen did meet with Russian officials in Prague, if the claims in the dossier are even partly true, then obviously he has no defamation case. BuzzFeed says Cohen's decision shows, he "no longer thinks an attack on the free press is worth his time." Fusion adds, Mr. Cohen can focus on his many other legal travails which he has. Prosecutors investigating him for bank fraud, wire fraud, campaign finance issues which is why Jay Goldberg, Trump's lawyer before Cohen says there's no question Cohen will flip.


JAY GOLDBERG, FORMER LAWYER OF DONALD TRUMP: Well, I don't think Michael Cohen comes to Trump's office with some sterling record -- background that's would be attractive to me. So I don't know whether he's ever handled litigation for Trump.

MELBER: Do you think that Donald Trump made a mistake in putting so much faith in Michael Cohen?

GOLDBERG: Well, that remains to be seen.


MELBER: That remains to be seen. You're not just looking at any legal commentator there by the way. As we've emphasized in our reporting tonight, you're looking at the man who was literally the predecessor to Michael Cohen and is currently advising President Trump. And he's questioning the loyalty of this man who really defines himself with loyalty to Trump.


MICHAEL COHEN, LAWYER, DONALD TRUMP: Donald Trump is this Uber billionaire real estate developer, possibly the greatest negotiator in the history of this planet.

I'm obviously very loyal and very dedicated to Mr. Trump.

I'll do anything to protect Mr. Trump, the family.


MELBER: Cohen didn't just flatter, he took on opponents with relish.


COHEN: You're talking about an adult versus a whining baby.

He's a horrible human being, as far as I'm concerned.

Let's talk about file gate, pardon gate, China gate, travel gate. You and I should go into business buying gates, right, when it comes to the Clintons.

UNIDENTIFIED FEMALE: You guys are down and it made sense that there would --

COHEN: Says who? Says who?

UNIDENTIFIED FEMALE: Most of them. All of them.

COHEN: Says who?


MELBER: There were facts there he wasn't willing to deal with. And while his lawyers have been in court lately, Cohen famously was hanging out with friends smoking cigars. In fact, we looked into this. If you look at the company he's keeping here, ABC News has identified some of the people in this picture. The man in the blue jacket and glasses is a real estate developer who attended the Miss Universe Pageant in Moscow with Trump in 2013 and was reportedly part of Cohen's attempt to build a Trump Tower there. The other man, again, this is who he's hanging out with during all of this this week, is a former executive for Deutsche Bank which fronted Trump hundreds of millions of dollars. Now, Cohen can talk to whomever he wants. But in the middle of an investigation sparked by the Russia probe, those are interesting choices. And it makes it appear he's not worried even if his friends are.


UNIDENTIFIED MALE: I think it's a very high threshold to get that warrant. And so I would -- if I were Michael, I would be a little concerned about that.

SAM NUNBERG, FORMER AIDE, TRUMP CAMPAIGN: I worry about Michael. I'm not going to say Michael's going to lie. I worry about Michael.


MELBER: I worry about Michael. If Michael Cohen's friends, his Trump allies were worried about him back before the FBI raid, how are they feeling tonight? Now, we have more in the show. Coming up, he's known Donald Trump for decades. He now says Trump is reaching into a bag of tricks on the Russia probe. Tony Schwartz, the Co-Author of the Art of the Deal here live when we're back in 90 seconds.


MELBER: President Trump has been using attacks on the Mueller probe as a kind of partisan witch-hunt.


TRUMP: This was really a really hoax created largely by the Democrats, as a way of softening the blow of a loss, which is a loss that frankly, they shouldn't have had. This is a hoax.


MELBER: That's new, but it's not the first time Trump has slammed the probe as a kind of Democratic hoax.


TRUMP: It's a Democrat hoax that was brought up as an excuse for losing an election that frankly the Democrats should have won.

TRUMP: I didn't make a phone call to Russia. I have nothing to do with Russia. Everybody knows it. That was a Democrat hoax.

UNIDENTIFIED FEMALE: -- described investigators as 13 hardened Democrats. Some big crooked Hillary supporters, and zero Republicans.


MELBER: Zero Republicans except for the two men in charge of the whole probe, one of them appointed by Trump. My next guest though says this kind of misleading material is the whole point. Tony Schwartz famously Co- Authored The Art of the Deal. He says Trump is using his attacks not by appealing to truth or logic but appealing to voter fantasies and the desire to see a partisan witch hunt. It's similar to a marketing technique describing The Art of the Deal. "The final key to the way I promote is bravado. I play to people's fantasies, I call it truthful hyperbole." Mr. Schwartz arguing that Trump's approach works chiefly because of an actual scientific phenomena known as confirmation bias. I'm joined by Tony Schwartz, who as we've mentioned before was much more than just that book. He's also the author of The Way We're Working Isn't Working and the CEO of the Energy Project. What do you mean by this confirmation bias?

TONY SCHWARTZ, CO-AUTHOR, THE ART OF THE DEAL: Confirmation bias, which runs across every ideology is the instinct to see new information as confirming what you already believe.

MELBER: When you look at that in this context, do you have to be in on it to abuse it? Would Donald Trump, who you know, would he be familiar with this term?

SCHWARTZ: He wouldn't be familiar with the term, I would suspect, but he would be very familiar with the technique, to play to people's confirmation bias. So he knows that, for example, the core base that he's always appealing to, the big confirmation bias they have is that the bad people are out to get them, that it's not their fault, that somebody else is to blame. And so he goes into a second technique, which is gaslighting. He says, what you see as blue is actually red. And then he repeats that over and over and over again until people begin to doubt their own reality.

MELBER: You're saying something really important, because if it works as gaslighting, in your theory, it both appeals to the people who feel in on it, while maddening or even confusing a lot of other people.

SCHWARTZ: Yes, I think it first confuses those people whose bias it reinforces. It confuses them because even though they have that bias, in order to make it OK, they have to tell themselves that what is true is not true and what is not true is true. The opposition is outraged because it isn't true. And what's so difficult for all of us who are stunned by the power of deceit from Trump, is that he can get away with it and it puts us into an emotional state, it puts us into a fear state. And so he's kind of got the fear of -- aroused in the opposition and the confusion aroused in those who believe fundamentally that the worldview he's expressing is true, even though the facts he's expressing are not true.

MELBER: Is that something that is unique to people who really don't care about the facts or is it something that anyone can abuse?

SCHWARTZ: It's an enormous advantage if you don't care about the facts, because what's happening with Trump right now, as the circle closes and as he sees the confirmation bias that always works on Trump is that the world is out to get him, that he either creates fear or he succumbs to fear. And right now, that's the way he's seeing the world and so everything that comes along reinforces that. And if you've got very few good things happening and a lot of bad things happening and you have that personality and that confirmation bias, what you're doing is you're getting more and more paranoid, you're getting more and more detached from reality.

MELBER: So the ethics of that which is something that your work is focused on, and calling that out, saying, that's wrong, let's deal with it. Then there's the strategic utility of it, which is you're describing something in a fascinating way that appears to be working. There is an oppositional resistance movement against Donald Trump that is powering an incredible amount of energy and attention in the country right now. But what you're describing is a process whereby he has maintained an oppositional environment for him and his supporters even though they're in charge of everything.

SCHWARTZ: The -- what Democrats and opponents of Trump get wrong over and over again is to try to argue the merits, is to try to prove that the lie is a lie instead of recognizing that what they need to appeal to is the bias in the people who are supporting him. What they need to do is be able to say, we're better at getting those bad people that are out there after you than Donald Trump is and to have them feel that. Trump himself is so aggrieved, is so angry, that they can relate to him as one of them because they're angry too. So reason actually becomes undermining to your argument.

MELBER: It's -- I'm doing the -- it's amazing when you say it that way because I was just reading James Comey's book and one of the things he does is the very mistake you just identified, which is trying to use merit to win over bad faith liars. And it's fascinating to hear him -- reading him years later still explaining why he was going to win these people over like he doesn't understand they're liars out to get him and that's part of what you're identifying so --

SCHWARTZ: Let me say one last thing.

MELBER: Yes, sir.

SCHWARTZ: What we say to leaders, Trump's a leader, we can't say it to him but what we say to leaders every day is, the key to your being able to manage in a complex world is to ask yourself over and over two questions. One, what am I not seeing? Two, what else might be true? That's how you expand your world.

MELBER: I love that. And you've -- I've heard you say, what am I not seeing is always the question that is the enemy of the ego because ego tells you you've already seen everything.

SCHWARTZ: Confirmation bias.

MELBER: Sir --

SCHWARTZ: It's nice to see you again.

MELBER: Tony Schwartz, we'll have you back again. Thank you very much. Still ahead, why is Ted Cruz suddenly praising Donald Trump despite (INAUDIBLE) like this?


SEN. TED CRUZ (R), TEXAS: This man is a pathological liar. The man is utterly amoral.


MELBER: Donald Trump may have coined the term Lying Ted but now he's getting a glowing shout out from that same Senator he used to humiliate. Ted Cruz writing a flattering piece today about Trump for Times' 100 List comparing him to a flashbang grenades scaring the heck out of Washington establishment and hailing his "achievements" on behalf of ordinary Americans. The words of praise despite bad blood during the campaign.


TRUMP: Lying Ted, Lying Ted. He's a lying guy. He can lie with the best of them.

CRUZ: Donald, you're a sniffling coward. Leave Heidi the hell alone.

TRUMP: Everybody hates Cruz. Lying Ted Cruz.

CRUZ: Donald is a sore loser.

TRUMP: He's like a basket case. This guy is a pain in the ass.

CRUZ: This man is a pathological liar, the man is utterly amoral.


MELBER: Speaking of pathology, was the things that they were saying then true or the things they're saying now true and why? Well, I'll show you just a little bit of data. A new poll has Cruz just three points ahead of a Democratic challenger in the very red state of Texas. He needs the GOP base, which as we know right now is still especially in Texas, a Republican base. So we will keep an eye on this relationship as it evolves and we'll be right back.



RACHEL MADDOW, MSNBC HOST: James Comey, live April can put it in your datebook now.

MELBER: Rachel, I have it. I have 4/19. I wrote it down. And I got to say as someone who's interested in your reporting and James Comey's career, I could not be more interested in what you're going to do on April 19th.


MELBER: On April 19th. I still got it. It was a month ago and it's here tonight. Take a look. You will see former FBI Director James Comey with my colleague Rachel Maddow at 9:00 p.m. Eastern tonight if you tune in. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END