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Russian money trail hits Michael Cohen. TRANSCRIPT: 05/09/2018. The Beat with Ari Melber

Guests: Hdeel Abdelhady, Tim O`Brien, Maya Wiley, Brian Wice, Eric Swalwell

Show: THE BEAT WITH ARI MELBER Date: May 9, 2018 Guest: Hdeel Abdelhady, Tim O`Brien, Maya Wiley, Brian Wice, Eric Swalwell

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

There are several breaking stories today which build on the bombshell that Stormy Daniels` lawyer dropped last night. Those records suggesting a new money trail from a Russian-linked company to the secret plot to pay off Stormy Daniels.

So what`s been going on since all this happened? Well, reporters have been verifying different parts of the story. Companies who paid Cohen now confirming these allegations while also trying to do their individual damage control.

But here is what`s most telling tonight. We are basically one night out from something that could be an inflexion point and I don`t use that point lightly. Here`s what you need to know right now.

Donald Trump and Michael Cohen, they are not really punching back on this story. They are not releasing their own financial materials to rebut these allegations. No. Tonight, the first personal lawyer to a president to ever announce he would plead the fifth to invoke his right to silence in court is now basically taking that same strategy to the streets where he has virtually no comment.


UNIDENTIFIED FEMALE: Any comment about Michael Avenatti? Any response? Any response to Avenatti?

MICHAEL COHEN, TRUMP`S PERSONAL ATTORNEY: His documents is inaccurate.


MELBER: But the Cohen-Trump camp is not offering much proof for that little rebuttal there of quote "inaccuracy." In tonight`s news, he is raising profound questions about, yes, potential evidence of Russian collusion.

The Russian billionaire behind the firm that secretly funded Cohen now publicly claims he was not involved in the payments to Cohen. But is that what he told Bob Mueller? Because, of course, Mueller`s investigators questioned him earlier this year. We don`t know the answer to that yet.

Cohen also facing heat for over $4 million of payments from these other companies, as I mentioned, they are explaining them, not denying them. But what were they paying Michael Cohen for? He didn`t represent them in court. He doesn`t say he registered as a lobbyist for them. Well, today one of the companies, trying to get ahead of the scandal says it was Cohen who reached out to them promising access.


MICHAEL AVENATTI, STORMY DANIELS` LAWYER: You`ve got millions of dollars that are being deposited in this account. Michael Cohen appears to be selling access to the President of the United States.


MELBER: You know the face you just saw, that is Michael Cohen`s opponent or at this point maybe nemesis Michael Avenatti. He is behind these leaks. He has been pushing the case. And as we always emphasize, because we want to give you the context. He has his own perspective in this. But you will note what that company said is the same thing Michael Avenatti said, that is two different sources saying Cohen was trying to sell access and that would be a separate crime.

So the company that said that, Novartis, basically got a pulled into potential a scheme. And it would have a legal and fiduciary duty to tell the feds about it. As I just mentioned they are now saying tonight that this was something Cohen offer them for access to Donald Trump, to the government.

I can tell you and I think you might agree, this is the kind of thing Bob Mueller would want to know. Well, we have more for you tonight. The news that had not leaked when this all first came out last night. That company`s staff has already told Bob Mueller about all of this over half a year ago. And that`s according to Novartis officials speaking out today emphasizing their cooperation.

Up until last night, there were no public financial documents linking Trump world this directly to the Putin oligarchs, tonight there are. Up until last night, there were no entities who work with Trump`s lawyer publicly disclosing their cooperation with Bob Mueller, tonight there are/. Up until last night, there was no sign that Cohen`s incriminating records would leak like this.

And tonight I can report something else for you. The U.S. treasury department now investigating if someone leaked those sensitive baking records, which on the one hand is important because those records are supposed to be private, but also further suggests those records are real records, accurate.

Meanwhile, as all of this goes on, everything I just ran through, Donald Trump`s legal team continues its slow motion convulsions over the fallout from Rudy Giuliani`s contradictory defenses of the money paid to Stormy Daniels.

And while few want to relive those odd Giuliani interviews, they do look different in light of these disclosures tonight.

If Rudy Giuliani knew exactly how bad this money trail was, maybe that`s why he was in such a rush to change Donald Trump`s story about it, even clumsily, even ad hoc, even in a rush and even if it meant admitting that Michael Cohen and Donald Trump had, yes, been lying about this same money trail all along.

I`m joined now by Maya Wiley, a former council in New York City`s mayor and legal analyst for us here on THE BEAT as well as Jack Quinn, a former White House counsel to Bill Clinton.

Maya Wiley, is there a link here between what looks so bad for Cohen, what I just went through as being piecemeal verified and why Rudy Giuliani seemed to be in that clumsy rush?

MAYA WILEY, FORMER COUNCIL TO NEW YORK CITY MAYOR: You mean why Giuliani talked about funneling money?

I mean, we are certainly seeing in these records are a suggestion that there was certainly funneling of money. I think the question that we do not have the answer to yet Mueller might have much more of an answer to it, is whether there was a relationship between say the $500,000 that Columbus Nova, right, the company that the Russian oligarch was connected to, actually -- what happened with that money and whether or not that was related to any payments that benefitted Trump in protecting his election campaign.

MELBER: So you are saying the money in is suspicious and the money out could form a crime?

WILEY: It`s unclear.

MELBER: Jack Quinn, funneling money, funny money, what`s your verdict?

JACK QUINN, FORMER WHITE HOUSE COUNCIL UNDER PRESIDENT CLINTON: Well, you left out one thing we knew and that was that Michael Cohen brought a very modest client tell to this business before he was able to line up, you know, a major drug company, a foreign aerospace company, that was interested in having him rework their accounting systems and so on.

Up until now, we knew that he was working on funneling money to Stormy Daniels. We knew that he represented a Republican donor who had impregnated a playboy playmate and Sean Hannity. Now, you know, I have been in this town a very long time and doing this kind of work for most people is based on experience, expertise, yes, relationship, but relationships that are based on a long history of trust based on the kind of experience and trust I talked about.

And Michael Cohen brought none of this to the table. So it`s concerning. It raises the red flags, but none more than the Viktor Vekselberg access here. The fact that they were paying this kind of money and I understand, it was a subsidiary of a related company and but still, it ties together the Michael Cohen legal story with the Russia investigation and --

MELBER: Do you think, I mean, just to pause on that point, do you think it`s so stupid as to be hard to believe?

QUINN: It`s breathtakingly -- I mean, look.

MELBER: I mean, you open a shell company to pay off Stormy Daniels on October 2016. A shell company is just that. You could open a second or a third. And you literally start using the same shell company to funnel money from this Russian-linked firm while the Mueller probe is opened.

QUINN: Right. Maya have a different view on this or no more than I do. But I suppose that is the reason why the suspicious activity reports included transactions involving otherwise legitimate corporations.

MELBER: Yes. And we are going to get to this in various activity reports. I mean, before we get there, Maya, it just -- it just burgles the mind and there can be stupidity or there could be desperation or it is possible, and we have mentioned this on this show before, it`s possible that all these people who talk tough maybe aren`t tough and all those people that talk about being rich maybe aren`t rich and maybe they weren`t just stupid, they were desperate because they literally didn`t have the cash flow to deal with these problems.

WILEY: Right. One of the things we know about Michael Cohen is he started taking credit of up to a quarter of a million dollars during the Presidential campaign apparently in order to take care of these problems that Trump might have along the way. That raises serious questions about what he was telling banks about what he was either what the value of the property was he was using for collateral.

So there are all kind of legal issues there. But I think it`s also critically important to recognize that this Russian oligarch was someone who Michael Flynn sat with at that meeting with Putin in 2015. He was the same person who was also at the inauguration for Donald Trump and the person who runs the company that funneled, that paid the $500,000 to Michael Cohen`s essential consultancy was literally also a campaign Clinton to Donald Trump. To the tune of $150,000 and there might be a question about that money as well. So all there is to say you know if your neighbors live in a swamp, where do you live?

MELBER: Jack Quinn. I know where you live, more or less in the swamp. But you might not be of the swamp. Not everyone in Washington is. I guess the final question for you, sir, is you were just outlining why it`s suspicious to get so much money when you don`t have a lobbying practice and you don`t have the experience and it`s not clear why such big companies would come to Cohen in the first place. It seems to me that the implied and careful implication you are drawing is that these may have been elicit payments. What do you see is the legal line for prosecutors to actually try to prove that?

QUINN: I don`t think, you know, most of these companies who are hiring him because he had a relationship with, you know, newly elected President Trump, I don`t think that that makes their payments elicit. You know, that is not against the law to hire somebody because they have a relationship.

MELBER: What if you fire I hire them and they don`t do any work and you are seeking a government favor in return, for example, preferential treatment on a merger? I mean, certainly, there are theories of the case that could involve, and I`m not alleging that. Because I`m not the prosecutor. But as a legal analysis, it is more problematic when you are paying a fixer bag man to a secret account. It doesn`t look as good when you hire a lobbying firm to do registered business.

QUINN: Exactly. Look, Cohen has a problem here on the registration side. But to your question, you know, if there was any kind of quid pro quo, obviously, everybody`s got a serious legal problem. But there is no indication that that kind of quid pro quo was there. All we know so far is that people working for some of these companies wasted the company`s money.

MELBER: Right, what you are saying is not to be rude, but at a minimum, you know that Michael Cohen`s services were literally worthless.

QUINN: As I said, he had a modest business in getting involved with these companies. He didn`t improve upon his portfolio.

MELBER: No, I think it is -- you know, I don`t want to be too literary here. But there is a lit crunch in his narrative rather than one of great uplift of his career, which is going to be accurate.

Former White House counsel Jack Quinn, always appreciate your insights. Mia Wiley, I want to come to you later in the show for another special set of questions.

I turn to now directly to California congressman Eric Swalwell on the intelligence committee. He interviewed Michael Cohen last fall. You know more than we do and some of it you told us before you are not at liberty to discuss. What does stand out to you about what has now become public on this very strange case?


Well, just like most Trump family members or Trump employees or Trump campaign team members, you know, any tree that you shake in this Trump forest, a Russian falls out. And that`s what we are seeing here. Of course, there was a Russian involved.

Now, what we were not able to find, and this is all the more reason it was premature for us to ends our investigation, there were a lot of questions around Michael Cohen`s finances and his dealings with Russians. We had asked for bank records, travel records, phone logs and the Republicans were unwilling to use the subpoena power they had to force Mr. Cohen to deliver that to us or to answer questions around it. He was able to you know hide behind the voluntary construct that the Republicans set up.

I think now, Ari, frankly the President is in a position where he and his lawyer are deceiving the American people. President who lies is a President who is weak. And the best thing he can do is open up the books for the public so that we can put this to bed.

MELBER: Do you think that the federal prosecutors in New York or special counsel`s office have Michael Cohen`s tax returns?

SWALWELL: Yes. I think they are taking an MRI of the finances of the Trump organization of the campaign and the individuals from the President down to Michael Cohen and his assistance. And that`s the way that you run an investigation. The American people deserve to hear that from our investigation, too.

And Ari, the difference the daylight between our investigation and Bob Mueller`s is that the public will only learn through Bob Mueller`s investigation, what he can prove beyond a reasonable doubt criminally.

Our investigation brought up a lot of facts and would produce a lot of facts that may not be able to be proved beyond a reasonable doubt but that would still I think demonstrate conduct that the American people want to know as it related to Trump family members, Trump business members and the Russians.

MELBER: And you mentioned Russians falling out of the proverbial tree. What if what is ultimately discovered here are domestic crimes that don`t involve an act says with Russia but include the government you a because of government power, bribery, a quid pro quo which is one of the things that is immediately raised when you see these kind off the book slush funds, whether or not they originate with the shell account that was to pay off a porn actress.

In that case, if that ensnares Michael Cohen and Donald Trump, do you think that`s something that Bob Mueller should pursue and the Congress it should be interested in or that goes out of the 2016 collusion jurisdiction, should be left to the side?

SWALWELL: You know, no person is above the law, Ari. And this investigation just like any investigation, investigators are allowed to investigate crimes that are in plain view. And if they go into a house looking for guns and they see drugs, they don`t have to close their and not seize the drugs. I think Bob Mueller appropriately referred some of these investigations to the southern district of New York, but there may be other issues particularly campaign finance issues relating to the President that will fall under his purview. It may ultimately come to the house Judiciary Committee. That is the other committee where I sit. And I hope that, you know, we are able to conduct thorough investigations. Ones that Republicans are fought willing to do right now so we can tell the American people whether this President is acting outside the rule of law and assure the American people we would make sure he would be held accountable.

MELBER: I take you are referring to any potential shift in six months with the mid-terms. You also closed this out with a plain view exception reference to fourth seizure laws.

SWALWELL: I hope I get CLE (ph) credit for that.

MELBER: We don`t do CLE credit here. Thankfully, we were past that. That that`s a reference to continuing legal education for anyone who is not already turned off by the number of legal references.

Congressman Eric Swalwell, thank you, sir.

SWALWELL: My pleasure.

MELBER: Coming up, the Russia connection, this new reporting on Putin`s oligarchs. We are going to show you the history that shed so much light.

Also, how investigators are following the money. I have an expert on the actual finance (ph) Trump`s world.

Also, did you know that the first person convicted in the Mueller probe is going to prison today and he is a lawyer? We`ll explain why that matters.

And we are going to dig into last night`s personal and public victory for a woman who accused Donald Trump of sexual misconduct and is now running for office.

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


MELBER: Trump lawyer Michael Cohen facing heat for half a million dollars he took from this Russian oligarch. Tonight, many asking if it was a scheme going rogue or if it was a part of a larger plot that could involve Vladimir Putin, Donald Trump or both of them.

Now the oligarch in question is Viktor Vekselberg. His firm denies that he was behind these money payments. Bob Mueller`s investigators have questioned him which means they think he must know something and they know that Putin holds his way over many parts of the Russian economy. That includes, for example, a pricey favor Vekselberg did to help Putin.

You are looking right there at something very expensive. He plot $100 million into a special plan to get nine Faberge (ph) eggs returned to Russia back in 2004. He also meets with Putin, did that most recently, just three months ago. And publicly praises the leader as a detail oriented man concerned with Russia`s well-being.


VIKTOR VEKSELBERG, RUSSIAN OLIGARCH: In Russia, it is last. I think mostly like ten years, we become to very efficient shape of communication between private business and government. It lead (INAUDIBLE) minimum two times a year. We share with our president our concern about the business, political issue. What most important is very person who has extreme intention to (INAUDIBLE). Sometime, you were to feel so he knows subject better than you.


MELBER: Former intelligence officer Malcolm Lance is the author of the "plot to hack America, how Putin cyber size and WikiLeaks stride to steal the 2016 election."

When we see someone like this pop up in the news, obviously the Mueller questioning is notable, but we don`t know automatically where he fits in. What is your view of the significance? Is this some guy or more than that?

MALCOLM NANCE, MSNBC TERRORISM EXPERT: Well, first, you have to understand just exactly are the oligarchy fits into the Russian chain of command. They are civilians. They are captains of industry, the robber barons of the former Soviet Union who became rich after the Soviet Union collapsed and when Russia liquidated all of its assets and became a capitalist society.

These men became insanely rich. Vladimir Putin, himself, was sort of like a junior oligarch when he helped liquidate the city of St. Petersburg and used ex-KGB assets and Russian intelligence assets to bring if line the mafia.

When he moved on into the Kremlin, that`s when he realized that he would bring under control all of the richest people in Russia in order to maintain power and make sure he could get affected what he wanted affected. And for those who didn`t go along with that plan, these oligarch, he just ruined them.

(INAUDIBLE), he just sized there assets and put them in prison or exiled them. And so the oligarchy of Russia, itself, is sort of like a support base made up of these individuals who have over $200 billion, more money, the entire Russian federal budget who Vladimir Putin has operational control over when he needs them.

MELBER: See, you make an important point. And you mentioned the billionaires who crossed Putin have not done well so our tendency is kind of like our country would lead our analysis astray here, if this was the story about bill gates of Canada. That might be an independent person so to speak. Whereas these folks according to analysis are not. Khodorkovsky is someone who would appear on THE BEAT. And as you mention, was exiled over crossing Putin. Well, let`s look at his view of Putin.


MIKHAIL KHODORKOVSKY, RUSSIAN OLIGARCH JAILED BY PUTIN (through translator): This is a man with a very particular view of life, a view difficult of special services operative or gangsters. If I cross the Russian border, I would be arrested and sentenced to life in prison.


MELBER: So what does this tell you about Putin`s invisibility on something that, if I want to play devil`s advocate, people would argue look smallest by their standards a small amount of money going to a Trump lawyer?

NANCE: Well, if you view it as these operations as an extension of the Kremlin`s influence, where he uses not just his special security services, as the Russians like to call them. His intelligence agencies, but he uses these civilian billionaires to do his bidding. Then what you have here is a circumstance where the Kremlin always has a cutout. Always has an organization or a body or an individual who can channel money, influence, prestige and you have to understand, these people have insane quantities of money.

These are people, you know, Donald Trump is personally jealous of because of the (INAUDIBLE) of real actual capital that they hold in this lavish global lifestyles, for that an ex-spy master like Vladimir Putin always has people who will do his bidding like a mid-evil king with all of his tribal, you know, chiefs around him who will get things done without his finger prints.

MELBER: Malcolm Nance, thank you very much for joining me on this story.

NANCE: My pleasure.

MELBER: When we come back, I`m going to look inside this money trail with Michael Cohen. What the investigators are looking at now, who connected could have legal exposure. And we are going to do something special. We have every single angle on the money covered with different experts when we get back in just 60 seconds.


MELBER: Our other view on the top story tonight is something hopefully a little special. We want to go through a map showing how all these new revelations about Michael Cohen may fortify a case against him and his associates.

So to handle for stake pieces of this, I`m about to do some separate interviews with four different experts steeped in the money trail the law and the road ahead for criminal defense. Of course, we all know in Watergate, they said follow the money. In Trump land, it turns out many people who claim to be rich don`t have that much money on hand and Mueller may be following the debt.

Consider the news this week that Cohen put up assets against the loan for his $9 million home. And Mueller has been probing another way Cohen was gathering cash, those lump payments from the drug giant Novartis, which says he came to them promising access to Trump and got a million dollars for it.

Meanwhile, AT&T today, the bill was $600 grand. The company says it was not buying access. All of this raises a question that we want to dig into. What did they get for their money?

Consider that on the eve of this leak for Michael Avenatti, he hinted of what was coming with a provocative question to none other and former Trump aide and Mueller witness Sam Nunberg.


MICHAEL AVENATTI, STORMY DANIELS` LAWYER: In the year after the elections of 2017, obviously, Michael was asked not to join the administration. Did go to Washington. I mean, did he undertake any business dealings along the line of selling access to the President? Or did you get the impression he was trying to put himself out there as a guy that could people in touch with the President?

SAM NUNBERG, FORMER TRUMP AIDE: No, I hadn`t contacted Michael.


MELBER: You know, like selling access on the eve of that bombshell.

Tim O`Brien is here from Bloomberg, has reported extensively on Donald Trump`s what, his money or his lack of money?

TIM O`BRIEN, BLOOMBERG: His money, his debts, the cartoon cast of characters that have advised him over the years.

MELBER: Yes. Sort of like his money and his not money.

O`BRIEN: That`s right. Or lack thereof.

MELBER: Just to be clear. And another expert first time on "THE BEAT," (INAUDIBLE), an expert on corporate finance, thanks to both of you for being here.

UNIDENTIFIED FEMALE: Thanks for having me.

MELBER: Absolutely.

Tim, what do you glean from this kind of secret financing operation and does it have anything to do with Donald Trump?

O`BRIEN: Well, I don`t know how secret it was, clearly Michael Cohen was walking out with a single out almost the moment Trump got in the oval office and he was selling access. While the numbers appear on paper I think to be big to the uninitiated for the corporations that were paying Michael Cohen, these aren`t actually huge amounts. And I think you get the sense they were spreading their bets around a Washington that had suddenly become very swampy despite the President`s promises to drain the swamp. Almost everyone in his orbit was trying to make a fast buck, including Michael Cohen.

I think the issues of the U.S., Swiss and Korean corporations were trying to get access to the President through Michael Cohen on policy issues, may not present any danger at all to Trump. I think the Viktor Vekselberg thing is significant because it gets to the issue of quid pro quo.

MELBER: Right. And it gets to the issue of what the money was being used for.

Hdeel, as you know, Rudy Giuliani sound bites, they evolve over time. And so I want to play one that I think is actually more revealing now than during the madness. Listen very closely to his emphasis on what matters about the money.


RUDY GIULIANI, LAWYER, DONALD TRUMP: That was money that was paid by his lawyer, the way I would do out of his law firm funds or whatever funds, it doesn`t matter, the President reimbursed that over a period of several months.


MELBER: He go ahead and throw up the W. Whatever funds, not a legal term, you`re a finance expert, is this a kind of whatever type situation or is Rudy wrong and it could matter?

HDEEL ABDELHADY, PROFESSOR, GEORGE WASHINGTON UNIVERSITY: No, it`s not a whatever kind of situation. Yes, that`s not a technical legal term that I`m familiar with, whatever funds. There are a number of questions that are raised here. The first, of course, and this has been covered whether there is a campaign finance violation and what matter is that the payment was made by Cohen not necessarily that it was reimbursed by the President from his personal funds. So that`s the first issue on the campaign finance front. The other issue is given what`s been revealed in this Avenatti executive summary, assuming it`s accurate, there are a number of questions of terms of where payments, for example, from Vekselberg as we go mentioned ultimately ended up and who was the ultimate beneficiary of those payments and there are questions, of course, regarding lobbying and whether appropriate registrations were made by Cohen.

MELBER: And let me -- let me ask you and that given your expertise, how does that work? How would investigators go about finding where this money went?

ABDELHADY: Well, in the Avenatti executive summary, we have links between for example First Republic Bank, that is the Avenatti bank. We know that for example there was a standards chartered bank involved at some point with overseas entities. There is a bank in California I believe. It`s Citibank I believe or City National Bank. And so there is already apparently a money trail and a bank-to-bank trail and of course financial transactions, whether it be a wire, ACH payment or some other electronic payment. There is a record of those through the banks and those can readily be obtained by prosecutors, including if there is a shell company involved, such as essential consultants or some other entity. Where there is a shell company, there maybe a difficulty in locating the ultimate beneficial owner, for example, especially if it`s layered. But here it seems that we don`t have that kind of complex structure. So whether financial institutions are involved, that money should be traceable as a general matter.

MELBER: Hdeel and Tim, thank you for being a part of our special coverage here. I`m going to turn now to another guest who`s an expert on the kinds of crimes and statutes that can be implicated. When you look at everything that`s come out, there are at least seven different categories of potential violations, from money laundering, bank fraud, to bribery and conspiracy. Now, some of this is at the federal level, some of it is at the state level. We`re just talking about New York and California which could depending on what the facts ultimately show have their own potential jurisdiction, which is important when you think about potential presidential pardons. I`m now joined by Maya Wiley, former Counsel to New York City`s Mayor. Let`s go through a couple of these because you are always a clear handicapper of the legal issues. What do you see as the key statutes implicated by what heave learned?

MAYA WILEY, FORMER COUNSEL TO NEW YORK CITY`S MAYOR: Well, what we know so far, we actually knew back in April when the FBI got the warrant and actually went into Michael Cohen`s offices and his home that they were looking at bank and wire fraud. And that actually makes a lot of sense in terms of the payments to Stormy Daniels, to the -- Karen McDougall.

MELBER: So on bank wire fraud, what are the prosecutors have to prove as we break it down?

WILEY: Well, they have to show Michael Cohen lied to the bank in order to get money. And we know he got loans. He could have, for example, potentially lied about the value of the properties that he was using in order to get as collateral in order to get those loans. That would be one example.

MELBER: Or if he lies about the purpose.

WILEY: Or if he lies about the purpose. So there`s ---

MELBER: So what about -- let me put it back -- let me put it back up. What about taxes, where again have you federal and state issues?

WILEY: Well, this will go back to what he reported and how he reported it, depending on what he said the money, how he got it and what it was for, right? So it`s a money that was through a corporation was it actually corporate money or is there some possibility that there was benefit that he was evading taxes on. We don`t know.

MELBER: Do you have time? Do you want to do conspiracy as well?

WILEY: Well, there`s always conspiracy so any time you conspire, for instance, if Michael Cohen was taking payments and funneling them to use Rudy Giuliani`s words, to influence the President of the United States on behalf of someone a quid pro quo. He could be a part of a conspiracy that would be to violate the laws of the United States.

MELBER: And so these are all things that the feds are presumably delving right into and based on the lead time that Mueller has, whatever reasons that this has started to leak, they`ve already been building -- if they are building -- have been building their case. We know that from the search warrants.

WILEY: We actually know that the feds have been interested in Michael Cohen for a very long time. This is a man who even back when he had taxicabs was actually purported to have relationships with Russian and Ukrainian mobsters. So there`s frankly nothing new about the feds being interested in Michael Cohen. What is new is that it`s both direct that he has now had to assert the Fifth Amendment and that he is a close adviser to the President of the United States and his fixer. So what it really does is implicate Donald Trump and raise a lot of questions about what Donald Trump knew and what he didn`t know.

MELBER: Maya Wiley, thank you and stay with me. I want to turn to a criminal defense attorney to discuss the other development that would have been bigger news today if not for all of this, Bob Mueller sending his first convict in the Russia probe to jail. This is happening today. Lawyer Alex van der Zwaan begins hard time in the federal prison in Pennsylvania. He serves a month for admitting to lying to the Special Counsel about his contact with Rick Gates who of course pled guilty. The law firm that he worked for was linked to Paul Manafort. All this comes as we`re learning about Van der Zwaan`s connection to, yes, Russian oligarch, his father in law is a Russia billionaire German Khan, whose business partner is, wait for it, there it is, Viktor Vekselberg, part of Putin`s inner circle and now tied to Michael Cohen for the half million dollars. We didn`t plan for it all to happen today this way, it`s just did. We did plan for Criminal Defense Attorney Brian Wice. He represented Tom DeLay in a conspiracy and money laundering appeal and is an all-around criminal wiz. Is that fair to say, sir?

BRIAN WICE, CRIMINAL DEFENSE ATTORNEY: Close enough for government work, Ari.

MELBER: When you look at this today, what does it mean that there is a lawyer headed to a jail today under Bob Mueller`s direction here?

Well, Ari, anybody who watches this show or saw Sunday night`s episodes of billions recognizes that the lifeblood of the criminal justice system is leveraged cooperation. A prosecutor`s ability to take a defendant and turn him or her into a witness, and whether you`re cracking the mob or a drug cartel or dealing with some white collar chuckleheads who think they`re a cross between Tom Hagen and Gordon Gekko, nobody -- (INAUDIBLE) the word "nobody" is better than trading up in the perpetrator draft than Bob Mueller and his crew. And what they have today is exhibit A. You`ve got this 33-year-old kid who was on the partnership track at Skadden Arps who is now on his way to the machine shop at Allenwood. And whether or not you are Paul Manafort or Michael Cohen or the next man up so to speak in the scheme, you`ve got to look at 30 days, which my clients tell me frequently they can do on their head, knowing that your bid may be 30 months or 30 years. Trust me, he got a lot of folk`s attention today, Ari.

MELBER: Right. And a lot of folks who are in and around this because you`ve got all the accountants, and the lawyers, and the fixers that we hear about, and this seals to be a sign of where he`s starting as you say not where he`s ending. None other than Rudy Giuliani back in the day talked about how you build pressure by going sequentially stronger and stronger in convictions. Take a listen.


GIULIANI: We have to continue to keep this pressure on and continue to bring case after case after case and hopefully at some point, we will see them either destroyed or vastly reduced in power and influence.


MELBER: He was talking about going after the mob in case after case after case. How does that experience inform his view of what`s coming at his clients or his main client in Donald Trump right now?

WICE: It`s -- and it`s interesting that you played that clip because I think it speaks volumes of the before and after picture of Rudy Giuliani. The Rudy Giuliani back in the day, I`m old enough to remember actually broke down a crooked politician on the stand during cross and got him to confess. The Rudy Giuliani that we see now, Ari, is like Willie Mays playing for the Mets. It`s like somebody`s crazy uncle who they don`t let out at Thanksgiving. But Rudy back in the day, and now if he`s not too far gone understands that you`re building this case, any case, whether in the SDNY or whether it`s the Mueller crew from the bottom up. And every time another shoe drops, every time you break news on this show about the latest in this imbroglio, it means that the footsteps are getting louder the collars are getting a little bit tighter on some of the people on this morality play. Ari?

MELBER: Speaking of breaking news, Brian, I`m going to cut in because I have a little more. I want to thank you, Brian Wice, for joining us. I want to bring Maya Wiley back in. I was just handed the first most detailed response of Michael Cohen and his legal team here to all these allegations from Mr. Avenatti. And I want to just tell you what we have and we`ve been promising we would bring this as soon as we got it. This is the first full response. It says, number one, Avenatti has published numerous incorrect statements regarding Mr. Cohen, alleges errors for example of saying that they`ve misidentified at least one wire transfer to a different Michael Cohen, a Canadian citizen. It says, number two, in this, Maya, I`m curious, your view of this. It seems a little more significant. Again, brands new response from Cohen`s lawyers. It says while much of this report is inaccurate, they allege, Mr. Avenatti has published some information that appears to be from Mr. Cohen`s actual bank records and Mr. Cohen has no reason to believe Mr. Avenatti is in lawful possession of these records. That`s a legal two-parter, Maya. Walk us through the significance. It seems that what you have here, and this is a letter to the presiding judge, Kimba Wood. It seems to say, on the one hand, some of this must be accurate. It`s not fake news and fake records if it`s based on real bank records, but number two, it seems to suggest that Mr. Avenatti has obtained something that he`s not supposed to have and that may be inappropriate.

WILEY: Well, certainly bank records are confidential records. So somebody gave those records to Mr. Avenatti who has said publicly that he will not reveal his source. He himself though, we don`t know whether Mr. Avenatti would be guilty of doing anything wrong. It may be that someone else gave confidential information to Mr. Avenatti that should not have been given. To your point, from your standpoint of whether or not there is evidence of a crime, that`s based on the bank records, themselves, and merely sharing them inappropriately just means someone else may be in trouble, not whether or not there`s those records, themselves, are accurate.

MELBER: And another piece of this that it looks to me like an escalation here. Again, this is brands new. It`s a response in detail to this Avenatti dossier, if you will, this Avenatti report, but it is in the federal proceeding which makes it more significant than a simple press release. Maya, I`m reading from Mr. Cohen`s lawyers. It says, "We have no reason to belief Avenatti is lawful possession of bank records. If Mr. Avenatti wishes to come before this court, that`s actually now -- I believe this is the first time I`ve seen this, an invitation of sorts from Michael Cohen`s lawyers to get Avenatti into the federal case. The last time he was there was just down on the steps doing press conference. This says, if Mr. Avenatti wishes to come to court, he should be required to explain to this court, to the feds how he came to possess this information, the details of when Cohen was paid by these business clients, names are not released to be made public, have no relation to the litigation in which he represents Ms. Clifford or the reported reasons he may have to appear before this court." Mr. Avenatti in public and on television challenging Cohen, calling his bluff saying, you released your records. This seems to be an escalation to the other direction. Cohen`s lawyer saying to Mr. Avenatti, why don`t you come to federal court and explain how you came into possession of this material.

WILEY: The gloves are off. So the stakes have gotten higher the gloves are coming off. What Mr. Avenatti has been doing is playing a brilliant public relations game and ensuring that he has kept his client`s story in the news. He`s done it in a way that has escalated the pressure on Michael Cohen, at least in the court of public opinion, and now what you have is to protect because quite frankly, Michael Avenatti is right when he says, well if this isn`t true, prove it. I`d like to see Donald Trump`s tax records personally. Secondly, I think what the lawyer for Michael Cohen is doing is a perfectly good way of trying to put Michael Avenatti back on the defensive, which is to say -- which is to say, you don`t have any privilege that attaches to how you got these documents that we know of. So, therefore, you don`t have any way to keep this a secret. That`s -- I`m assuming that`s essentially what they`re saying.

MELBER: Well, I appreciate your live action legal analysis because I know you had no time to prepare for it because we just got this. It is another fascinating turn. It does seems like an escalation and goes to questions that at least the Cohen`s side wants Avenatti to answer. And again, I said I would report as soon as we got more detailed information from them. It took a little while but these are complex matters. I`m reporting here for your knowledge to the viewers. This response from Cohen`s lawyers, challenging the act, we see parts of the report and challenging how Avenatti got the information that he got while apparently acknowledging some of it is true. That`s the breaking news. Thanks to our expert panel. I`m going to fit in a break. But coming up, a Trump accuser who said his lies inspired her to run for public office. She just became a democratic nominee. We`ll explain.


MELBER: Rachel Crooks is one of 19 women who have accused Donald Trump of misconduct. Today she says she formally became the Democratic Party Nominee for the Ohio State Legislature.


RACHEL CROOKS, DEMOCRATIC NOMINEE, OHIO STATE LEGISLATURE: Mine was a story all too common for women so I had a choice to make. I could either keep quiet or speak up. I spoke up. I said, MeToo. They deserve a government that values openness and cooperation over anger, divisiveness, and fear. Maybe I can`t fix what`s wrong in Washington, but I can make a difference right here where I live.


MELBER: Rachel Crooks is now the Democratic Nominee in Ohio for the State Legislature and Krystal Ball who ran for Congress and is my former colleague joins us for some perspective. Obviously, there`s a lot going on, there were these races last fight. What do you think this candidacy means?

KRYSTAL BALL, MSNBC CO-HOST: You know, I honestly think it`s a very healing moment for a whole lot of women because while we know Rachel`s story and you know, what she has said happened with the President and you know that really has motivated her in this race. We also know that a lot of the other women, if not all of the other women who are running and have been inspired to run and are winning in so many place, many of them have had similar experiences with powerful men, with men in the workplace. I think it really is this moment where women are feeling like I`m not just going to sit back and take it. I love that Rachel didn`t try to say, well, this is about the President. She really put her story front and center and said this is a part of who I am, this is part of why I`m running and I`m going to keep telling my story until people believe it. I think that resonates with a whole lot of women who have been in very similar experiences.

MELBER: And Krystal, something I know that you`ve worked on both in media and politics is gender diversity in candidates. And as you know, and I want to put up on the screen, there`s a big gap here when you see, first of all, less women run than men for all variety of reasons. But then, within the parties we are seeing here, Democrats having 30 percent of women candidates, 35 -- up to 35 percent in the Senate. It`s basically tripled what it is for Republicans. What does that tell you?

BALL: Well, I think that a lot of women are really energized right now by this moment and by the Trump presidency. But I also -- I just want to pick up on that point of diversity because I think it`s really important. This isn`t just about checking some box and saying wouldn`t it be nice to have more women, wouldn`t it be nice to have more women of color in particular? This is about having different experiences at the table. It is no accident that in America we have been you know, under -- controlled by men, the government largely, for all of our history and we have this culture of sexual harassment and sexual assault that we are only now just beginning to uncover and deal with and talk about. So it`s not just nice to have women there, it`s essential if we want a government that`s actually going to be of the people, for the people, by the people. We had a wonderful African- American woman named DD Adams at my organization People`s House Project supported who ran and won in North Carolina`s Fifth Congressional District. She`ll be taking on Virginia Foxx in the general election. And this is a woman who was a teamster, she was a blue collar worker. She got her first professional job. She had to lie -- to put on her resume DD instead of Denise so that they would -- couldn`t tell her gender. That`s how she broke into the workplace and those are the sorts of candidates who are truly going to change D.C.

MELBER: Crystal ball, thank you for your perspective as we look at these new candidates and we will be right back.


MELBER: Breaking news right now. Stormy Daniels` lawyer Michael Avenatti responding immediately to that court filing we just reported from Michael Cohen`s lawyers. Cohen alleging Avenatti got some facts wrong about the money flowing from his shell company to Stormy Daniels saying he even misidentified a different Michael Cohen at one point. Avenatti tweeting just now that this filing is baseless and improper and doesn`t address 99 percent of what he released. Meanwhile, Cohen saying Avenatti should reveal his sources. We will be right back.


MELBER: That`s our show, "HARDBALL" with Chris Matthews starts now.


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