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Bizarre political ads of the 2018 election campaign. TRANSCRIPT: 10/19/2018, The Beat w Ari Melber.

Guests: Wilmer Valderrama; Alexi McCammond; Steve Clemons; Nick Kristof, Ted Lieu; Howard Fineman; Betsy Woodruff

Show: THE BEAT WITH ARI MELBER Date: October 19, 2018 Guest: Wilmer Valderrama; Alexi McCammond; Steve Clemons; Nick Kristof, Ted Lieu; Howard Fineman; Betsy Woodruff

ARI MELBER, MSNBC HOST: Good evening, Chuck. I don`t want to make you talk too much with your voice, but we do enjoy seeing you on the road and we love seeing you back in the home court advantage. We`ll be watching this Sunday.

CHUCK TODD, MSNBC HOST: I will take it. That`s it. Voice gone. Out.

MELBER: See you, Chuck Todd.

We have a lot to get to in our Friday night show. Donald Trump speaking out late today about his support for illegal violence against a journalist. An important story later in the show.

Also, tonight, President Obama`s point person on health care is here with the facts about GOP ads that are backing at least part of Obamacare. Kathleen Sebelius on THE BEAT. I`m looking forward to that.

And later, a definitive breakdown on midterm ads with Rob Reiner and the comedian Joe Mandy.

But we begin with breaking news on election interference. News breaking today. Federal prosecutors are indicting a Russian national for interfering in this election. The 1 in 18 days. Now, if that sounds like a new and significant development, it is. And here`s why, very simply.

First, this is the first criminal charges for election interference in 2018. You`re hearing that right. What you`re seeing on your screen, this is happening. Second, the defendant, a Russian named Elena Kuvshinova has links to Putin and was posing as an American to try to trick voters here in our country.

Third, this ongoing effort doesn`t just repeat 2016 tactics with those attacks on American politicians. It also includes attacks on the very probe into those 2016 tactics with public criticism designed to trick Americans into having trust issues, you might say, with Bob Mueller. We`ll get into that in a moment.

The new charges come from main justice, the DOJ, not the special counsel. And the charges are sowing division and discord in the U.S. political system, creating and amplifying a divisive social media and political content and trying to elect or defeat particular candidates. That part echoes what we have seen before.

And I want to be clear as we unpack all of this. There are no indications in this new filing that this particular effort has links to American collusion or Trump, to be certain. But having said that, I want you to look and note how this strategy that has been uncovered today plays so clearly off Donald Trump`s rhetoric.

Because the feds are charging that this effort was trying to hype up scandals of Robert Mueller, telling Americans he`s a puppet of the establishment who is damaging to the country with "proven connections" to the U.S. Democratic party. Mueller, of course, is a Republican who rose in Republican administrations before a stint in the Obama administration. Now this Russian effort, a blatant remix of Donald Trump`s material.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Mr. Mueller has a lot of conflicts also directly yourself so you know that. Mr. Mueller is highly conflicted.

I can say that the people that have been hired are all Hillary Clinton supporters. Some of whom worked for Hillary Clinton. I mean the whole thing is ridiculous.

I call it the rigged witch hunt. I think that really hurts our country and it really hurts our relationship with Russia.

(END VIDEO CLIP)

MELBER: So that is big, the DOJ moving forward on these 2018 election charges.

Meanwhile, there`s a related scene playing out today in a courtroom in Alexandria, Virginia, where Mueller`s investigation into the 2016 campaign continued with its most high-profile guilty convict, Paul Manafort, arriving at this hearing in a wheelchair. That`s the first time we have seen that.

Reporters noted he was wearing only a left shoe, that he looked visibly grayer. He was in his green prison jumpsuit with the words Alexandria Inmate on the back. And the judge was dismissing those 10 deadlocked counts from his first trial, setting a new sentence date for February 8, which means that Bob Mueller has plenty more time to talk to Manafort. He is cooperating pursuant to his guilty plea.

And also, look at this. The "Wall Street Journal" today reporting Mueller is probing WikiLeaks contacts with Conservative activists. Meanwhile, former Trump fixer Michael Cohen, who has been talking to Mueller, had this to say about the stakes of the upcoming election.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: How have you been?

MICHAEL COHEN: I`m OK.

UNIDENTIFIED FEMALE: Yes?

COHEN: OK. Here`s my recommendation. Grab your family, grab your friends, grab your neighbors. Get to the poll because if not, you`re going to have another two or another six years of this craziness. So make sure you vote.

(END VIDEO CLIP)

MELBER: Make sure you vote. Two to six years of crazy. Let`s break it down.

Congressman Ted Lieu from the Judiciary Committee is here on set with me. NBC news analyst Howard Fineman who has been covering this story and has some new reporting about Roger Stone, and the "Daily Beast" Betsy Woodruff, who as always is all over the Russia probe. My thanks to all of you for being here.

Congressman Lieu, Americans watching would be permitted for wondering what did I just hear? Why does this keep happening? What does it mean when you look up on the news going into the midterms and people are being indicted in real time, innocent until proven guilty, but indicted for new meddling?

REP. TED LIEU (D-CA), JUDICIARY COMMITTEE: I think this indictment of the Russian operative is significant for at least three reasons. First, it`s not just Russian interference in our elections in 2016, it`s now in 2018. Second, this was not a small operation. Based on public reporting, we`re talking about at least $35 million. And this is one of many operations the Kremlin engages in.

And third, I think what`s interesting is you have the Department of Justice, the head of the FBI, putting country over party. Clearly, this is not a topic Donald Trump wants to talk about. But yet, you have these Trump officials putting this out before the American people because they realize that interference in our elections is so important.

MELBER: Which you view as a positive at a time when we`re told so many things aren`t working, you view that as working. And this would be a kind of potential exception to the attempt, not just by the special counsel, but DOJ writ large to stay quiet before the midterms, but you can`t be quiet about an ongoing effort if you think it`s illegal and is designed to subvert the midterms.

LIEU: That`s correct. So there`s what Donald Trump thinks and then what everybody else thinks. And in his administration, they realize the Russian threat to our elections is real. They`re trying to stop it, and they want to warn Americans that that Facebook post or Twitter post you see may be coming from the Kremlin, not from someone down the street.

MELBER: Betsy Woodruff, how do you view this in the context of the wider reporting you do on the Russia probe? As always, we can talk about the caveats. Nothing here about collusion and nothing here that ballparks the scale of this. Any crime, any single crime is bad. Crimes that have a mass impact are worse. But with those caveats said, how do you view this and what does it say about what the DOJ is doing?

BETSY WOODRUFF, POLITICAL REPORTER, DAILY BEAST: The important thing to remember that this new indictment highlights but which we knew before is that Russian meddling didn`t stop on election day 2016. The Russians had been endeavoring to influence American politics prior to the 2016 election. They dramatically amped up that activity during the 2016 election. And they kept it going in the subsequent months and now as this indictment indicates, in the subsequent years.

That`s because the Russians` project based on everything we know, both what the intelligence community has found, what reporters have found, what we understand from talking to people who are close to the Kremlin, who understand the way the Kremlin works is that the project wasn`t solely or even simply trying to get Trump elected but broadly trying to show a lack of confidence, trying to undermine confidence and faith in American democratic institutions.

One of the top priorities of Putin and his government is making Democracies around the world sort of doubt their competence, doubt the integrity of their governments. We see this not just in the United States but in the Baltics, in Ukraine, in Georgia, throughout Eastern Europe and other countries that are in Russia`s sphere of influence.

So it shouldn`t surprise anyone that this malign activity has been continuing. And frankly, we should expect to see these efforts from the Russians continue, honestly, for years to come.

MELBER: Before I turn to Howard and turning the page to Roger Stone, Congressman, I want to ask you about one more piece of this, which is with foreign crimes, you always have the gavel which is what our justice system can do, and the hammer which is the full foreign policy power of the United States. And so moving apart from the DOJ, the wider concern here is that, as Betsy said, this will continue. But it will continue even more aggressively if there is a view that the United States under Donald Trump never uses the hammer on Russia.

I want you to take a look at something Frank Figliuzzi, who has a lot of experience in this, said in response to, not the old indictments, but the new stuff. Take a look.

(BEGIN VIDEO CLIP)

TRUMP: Had nothing to do with my campaign.

FRANK FIGLIUZZI, FORMER ASSISTANT DIRECTOR FOR COUNTERINTELLIGENCE, FBI: They continue to do it because they feel they have impunity. They feel that there`s a president here that`s not going to call them out on it. He`s not stopping them. We have had over two dozen Russians and Russian intelligence officers indicted for meddling, for hacking, for social propaganda. We have tied it directly to at least the colonel level of the Russian GRU and yet our president does not come out and call them out on it and demand they stop.

(END VIDEO CLIP)

MELBER: Do you think Frank is right that the president not ever using the hammer is basically provocative and brings these attacks on us?

LIEU: He is absolutely right. There was a bipartisan outrage when Donald Trump kowtowed in front of Vladimir Putin at the Helsinki Summit. But what the Russians see from that is that the president of the United States is not going to do very much against the Russians for meddling in our elections.

When Donald Trump keeps saying this is a hoax, this is a witch hunt, that just incentivizes the Russians to keep trying to attack us, and that`s why they have been so brazen. And I`m pleased that at least the Department of Justice officials under Donald Trump see this differently. They`re going to go after these Russians and try to do what they can to stop this meddling.

MELBER: And while that`s going on, Howard, the Russia probe continues the investigations. The reporting we had this week that Manafort, who was, as I mentioned, in court today, is being asked about Roger Stone. And walk us through what you know from your reporting, the history of their relationship and what you heard from Mr. Stone today.

HOWARD FINEMAN, ANALYST, NBC NEWS: Right. Before I get to that, if you don`t mind for one quick second, I would say to bring it back to the United States, not just the Ukraine and Baltic and Balkans and so forth. What we`re seeing here, every time I think I have seen everything, I see something new in this.

What`s happening here is the offshoring of obstruction of justice. By interfering in the Mueller probe, the Russians are basically doing the administration`s bidding in terms of trying to obstruct justice. And that`s amazing. And not to mention the fact that the same money guy in Russia who was behind the 2016 efforts, apparently, is also the guy behind the activities that were indicted, that led to the indictment today.

As for Roger Stone and Paul Manafort, they have known each other since the `70s, literally. They have had an on again, off again relationship personally, but they basically have been allies in terms of politics and money for all that time. If there`s anybody on the planet who can explain Roger Stone, it`s Paul Manafort.

Paul Manafort has spent 50 to 60 hours at least talking to the investigators. At least partly, I`m assuming, about Roger Stone. And don`t forget, Roger Stone indicated, seemed to indicated that he had some advanced knowledge of what was coming down about the e-mails. Roger Stone has flatly denied that in a way, over and over again.

But he also sent me a text today when I asked him about it that I thought was interestingly and carefully worded. He said, "Manafort knows nothing whatsoever to contradict what I have said previously. There`s no collusion, et cetera." And the fact that he said that Manafort knows nothing to contradict what I have said sounds to me at least a little bit carefully worded here.

And really, one could argue that Donald Trump himself was inviting publicly the Russians to interfere, and I think in the famous statement that he made about how, you know, please, Russia, if you`ve got those e-mails, let`s see the e-mails. That, to me, and I think probably in Mueller`s mind, in and of itself is evidence of collusion. And if anybody would know about that, it would be Roger Stone.

MELBER: And so Howard, you talk about their link. The director of Get Me Roger Stone, who obviously picked up on a very newsworthy subject in his profile, was on THE BEAT last night talking about how it was Roger who elevated Manafort and be careful what you wish for. Take a look.

(BEGIN VIDEO CLIP)

MORGAN PEHME, DIRECTOR, GET ME ROGER STONE: Ironically, even though this was Manafort`s opportunity to get back on the national stage in an extremely important role, it ultimately has proven to be his undoing.

(END VIDEO CLIP)

MELBER: You have done some hard reporting there. I would like you to do some soft speculation if you`re willing. It is television, Howard.

FINEMAN: Yes.

MELBER: What is going through Donald Trump`s mind as he thinks about these two people, one being wheeled into a courthouse today with Bob Mueller controlling his future. The other on the outside, still talking tough, Mr. Stone and what they know.

FINEMAN: Well, I was covering the campaign when Manafort came into the picture. I think it`s probably fair to say that Roger Stone had something, not definitive power, but had some role in suggesting that Paul Manafort would be a good guy to run the campaign at that time. When Roger did that, you know, he knew that he was going to get a guy in power there, in the campaign that he, Roger Stone, had worked with on and off for 40 years.

So I think that`s a relationship that`s got to be one of the things that Mueller is looking at very carefully. As you said, Roger Stone flatly denies that he had any involvement in any kind of collusion and so forth. But it`s Bob Mueller`s job and his assignment to pick apart every detail to set up the timeline, to figure out what Roger knew when he knew it. And I think that is going to be more important in the long run than perhaps we might have thought at the very beginning.

MELBER: Betsy, final thought on all the above.

WOODRUFF: The important thing to remember with the Mueller probe is that it`s simultaneously a criminal investigation and a counterintelligence investigation. There are two different silos. As these indictments come out, and if any future Mueller indictments come out, they will cast significant light on the ways the Russians try to influence the election process in 2016.

However, Mueller`s also gathering an enormous amount of information that will never see the light of day because it`s going to be related to the way that the United States monitors foreign espionage. Much of it is going to be highly classified. So as people are trying to make sense of the probe and to figure out what impact it will have on American politics going forward, everything we know from Mueller`s team is very much going to be the tip of the iceberg.

MELBER: My special thanks to Betsy Woodruff and Howard Fineman. And Congressman Lieu, we`ll be seeing you as part of MSNBC`s programming in Politicon in L.A. tomorrow. I want to move to another news item. So thanks to all of you.

Turning to breaking news from Saudi Arabia. We can report tonight, Saudi Arabia`s state news agency is now conceding formally that "Washington Post" reporter Jamal Khashoggi is dead. While that has been reported widely in western media, this is significant because it is actually, believe it or not, the first official confirmation in the Saudi government that they are publicly admitting Khashoggi is dead.

Saudi prosecutors also state that 18 Saudis have been detained in connection with all of this. This comes one day after President Trump, facing significant criticism for his ongoing response to the controversy, publicly said that it appeared to him that Khashoggi had died. We`ll have more on that story as warranted. We wanted to bring you that as soon as it broke.

Pinning a break and when we come back, the GOP`s midterm problems on Obamacare, why they are for it after being against it, Obama`s Health Secretary, Kathleen Sebelius on THE BEAT.

Also, Donald Trump doubling down on violent rhetoric about attacking journalists. This time inside the United States.

And we`re going to speak with award-winning director Rob Reiner about the best and worst ads of 2018, including what happens when life imitates "Veep".

(BEGIN VIDEO CLIP)

SEN. JOE DONNELLY (D), INDIANA: The liberal left wants to chop defense spending. No way.

UNIDENTIFIED MALE: Well, someone is chopping back. Selina Meyer thinks she can chop our prosperity, our dignity.

DONNELLY: I`m about giving our troops the edge.

(END VIDEO CLIP)

MELBER: You can`t make it up because "Veep" already did.

And then later tonight, fallback Friday. The first time we paired Sinbad with Richard Painter. That`s tonight.

I`m Ari Melber. You`re watching THE BEAT live from Los Angeles on a day where we should note that Trump`s baby blimp is flying over the skies of Southern California. We`ll be right back.

(COMMERCIAL BREAK)

MELBER: We are back with more on the breaking news from Saudi Arabia. The state news agency there has now admitted what has been widely reported for many days. "Washington Post" reporter Jamal Khashoggi is dead. This is a development given their past inability to state the obvious in many in the west.

I`m joined now by Congressman Ted Lieu who serves in the Judiciary Committee. Now, we were speaking about some of the foreign policy issues at the top of this show with this indictment today. What we see here is a movement by Saudi Arabia. More important for foreign policy implications and for the underlying facts. What is your view?

LIEU: Well, first of all, I`m pleased that Saudi Arabia has finally realized that when you cut up a human being into little pieces, they will, in fact, be dead. I think it is outrageous that President Trump continues to defend Saudi Arabia. This was a murder of a journalist inside a Saudi embassy by a hit team sent from Saudi Arabia.

Clearly, the crown prince is either implicated in that or responsible. It is his government, and he has a lot of explaining to do. Congressman Jim McGovern and I introduced a bill today that makes it easier for the House of Representatives to halt arms sales. We seriously need to look at these arms sales pending to Saudi Arabia. They need to suffer consequences so they don`t do this again.

MELBER: And stay with me, Congressman.

MSNBC`s Ayman Mohyeldin is joining me by phone. Ayman, I want to get your analysis as well. This question to both of you starting with the congressman. I`m going to read more from the statement because while it acknowledges the death, it also puts forward what you can charitably call a theory of the case, and what many critics would be calling a cover-up.

It says that there were -- this is from the general prosecutor of the Saudi Press Agency. Discussions occurred between Mr. Khashoggi and the persons who met him while he was in the Consulate in Istanbul. And then it says, and I`m reading, this is again for listeners and viewers of our program, this is not reading the fact, this is reading their allegation and statement.

"That led to a quarrel and fighting by hand with Jamal Khashoggi, which led to his death." Reading that again and then I`ll get both of your responses. The Saudi prosecutor saying there was a quarrel, fighting by hand with Khashoggi, which, "led to his death."

LIEU: Again, that is on its face ridiculous. The public reporting is that they brought a bone saw to interrogation. You don`t do that unless you expect to dismember the human being. In addition, Khashoggi is facing up to 15 highly trained Saudi killers. He`s not going to get into a fist fight with 15 people. That is absurd on its face.

MELBER: And Ayman Mohyeldin joining us by phone. Your view of this new statement from the Saudi government.

AYMAN MOHYELDIN (via telephone): Yes. I mean this is obviously a story that is developing quite rapidly, Ari. We`re getting now information on a few different levels officially from the Saudi Press Agency which is the official spokes agency if you want to call it, the media agency of the government.

Here`s what we`re learning interestingly enough. They`ve identified 18 people that are now being subject to investigation, according to the public prosecutor`s statement, that is being broadcast. In addition to that, interestingly enough, we now have two individuals that have been named as part of this investigation who have been removed from pretty senior positions within the Saudi government.

First of all, the deputy head of general intelligence, General Ahmed al- Asiri. It`s a name that has been floating around in the media for some days now, but we now know that he`s been removed by role from his position. That`s a pretty powerful position, and pretty senior. He`s in the intelligence structure of the Saudi government. In addition to that, a royal adviser court -- a royal court adviser Saud Al-Qahtani has as well been removed from his position.

Now, why those two names are significant, because there have been questions as to how high up the chain of command this investigation would go and who would be held responsible. Now, immediately, a lot of people are going to be questioning how is it possible that the deputy had -- of intelligence-- the deputy general of intelligence carried out an operation like this or perhaps carried out some kind of botched operation, had he not been given a clear command from somebody within the royal court.

So those are going to be questions that I think a lot of people are going to be watching closely in the coming hours and the coming days. But what we do now know from the prosecutor`s statement is that 18 individuals are being investigated from in addition to how this has initially played out, as you were just reporting, that Jamal Khashoggi was somehow involved in a brawl of sorts with --

MELBER: A quarrel, yes.

MOHYELDIN: -- individuals inside -- yes, a quarrel, with individuals inside the Saudi Consulate. So again, it is certainly on the surface seems to be addressing some of the initial questions that a lot of investigator or a lot of journalists were asking. But at the same time, it immediately raises a new round of questions that I just outlined.

MELBER: Ayman, stay with me. As we have been reporting here, the Saudi government for the first time both acknowledging the death of the U.S. resident journalist Jamal Khashoggi, that occurred inside the Consulate but also putting forward a brief description of what they say happened.

Ayman Mohyeldin, he is part of this breaking coverage as is Congressman Ted Lieu. I want to add to our discussion Howard Fineman, an NBC analyst.

Howard, do you see the headline here that under pressure, the Saudis have acknowledged what others knew and said and reported which was the death? Or do you see the headline that we are seeing them settling on a kind of a cover story that says that there was a "quarrel and fighting by hand which led to his death"?

FINEMAN: Well, I have been struck, Ari, by the fact that over the last two or three days, multiple reports and multiple media outlets have been reporting on what the Saudis were going to cook up as their cover story. I mean it`s, again, one of those things that you never thought you would see, active reporting on how they were going to construct their story.

I have a really good source who knows the royal family very well and says MBS that he`s a kind of Jekyll and Hyde character who on the one hand loves the approval of the west in terms of trying to modernize certain aspects of Saudi society but a guy who can run off the rails at any time. So that`s one branch of the story that`s going to be pursued. The other is the, frankly, ludicrous story that`s just been put out that`s not going to withstand the light of day for, you know, 10, 12, 24 hours.

And then, most important for Americans is the question of Donald Trump and moral leadership in the world. Do Americans care that a president of the United States seems to be willing to look the other way? Not only look the other way but perhaps actively cover for the kind of autocratic characters that he seems to favor.

And this may crystalize that question in the minds of Americans. Does that mean it`s going to be pivotal on the midterm elections? Probably not. But does it mean that the larger question of Donald Trump`s leadership is going to be on the table? Absolutely. That`s the American political perspective. And that is just going to be a growing story, not one that`s going to end with this story put out by the Saudis.

MELBER: Stay with me, Howard.

Ayman Mohyeldin, who has been part of our coverage by phone, are you still with me, Ayman?

MOHYELDIN: Yes. I`m with you, Ari.

MELBER: So, Ayman, you hear the breakdown there on the domestic side. What else can you tell us and tell viewers about why this is happening now. What pressure was brought to bear? Obviously, this is a very sparse statement. And you don`t have to be a foreign policy expert to say, well, if the guy went into the building and that was on tape and didn`t come out of the building and your best cover story is they got into a fight, which sort of adds some doubt to it, why now?

MOHYELDIN: Yes. I mean -- and that`s a really good question, Ari. But the short answer to that is without a doubt, it is the international pressure that has mounted since October 2 when Jamal Khashoggi disappeared. And just as because this information continues to trickle out, I think one of the important things to emphasize, Ari, real quickly if I may, is that what we`re also witnessing this evening is a massive shakeup of the Saudi intelligence apparatus.

There have now been several positions that have been announced just in the last few minutes that I have been on the air with you. Several senior figures of the Saudi Intelligence Agency that have now either been dismissed or have been removed from their positions. So what we`re seeing right now is a massive undertaking by the Saudi government to clear out, if you will, some very senior officials of the Saudi Intelligence Agency.

Now, that in itself is going to raise a lot of questions. But going back to your point as to how we got to this point, it really began with the disappearance of Khashoggi and the international pressure that mounted shortly after that, beginning with the Turkish government which made very clear early on that not only did Khashoggi, according to their initial assessment, not only was he killed inside the Saudi Consulate but they had overwhelming evidence to support that conclusion.

Now, although they never made any of that evidence public, they slowly began to release it and leak it to Turkish Media and share it, according to Turkish sources with their allies. Now, did they release the recording? Nobody that we have spoken to that the Turks say they have, nobody that we have spoken to was able to actually confirm that they heard an audio recording. But it was enough to change the international momentum, to really put pressure on the Saudis.

Now, keep in mind, the Saudi government very early on, the crown prince himself said that they believed Jamal Khashoggi walked out of that Consulate alive. So they did not have any reason from their perspective to feel or fear that he had been killed. Now, obviously, that was certainly something that a lot of the international community did not believe. We started getting reports from the U.S. that the intelligence community in the U.S. was drawing their own conclusions that he was not alive.

We also heard that from President Trump over the course of the past several days. The growing conclusion was he was not alive and there was mounting pressure as to whether or not the Saudi leadership, all the way from the king to the crown prince, was going to thoroughly investigate this. Here is the interesting part in all of this. The news from this evening as well, and there are a lot of questions as to how the politics of the Saudi royal family may play out with the crown prince himself be pushed aside, would somebody else take that position? What would we see in terms of the shakeup of the royal court?

It seems as of now, as of this evening, nothing is happening inside the royal court so far with the exception of the removal of a senior adviser and most of the dismissals have been taking place on the intelligence side or the general intelligence agency of Saudi Arabia. That`s where all of the shakeup seems to be happening this evening. And the timing of this, Ari, should not be lost on anyone. You`re talking about Friday at the end of the week. It`s 1:00 a.m., 2:00 a.m. here now in this part of the region, in Saudi Arabia, and this news is just beginning to trickle out, coming out. This is in Western standards would be considered a Friday news dump in the middle of the night.

ARI MELBER, MSNBC HOST: Ayman Mohyeldin making several important points there, both about the internal dynamics in Saudi Arabia as well as timing. It is Friday night here, even later there. Stay with our breaking coverage. If you`re following us here at 6:30 p.m. on the East Coast, 3:30 on the West Coast, the news development is about a scandal that has really overtaken foreign policy in the Trump White House. Saudi Arabia now confirming the U.S. resident Jamal Khashoggi was basically killed, is dead, and putting forward a theory for what happened.

I`m joined by Chief White House Correspondent Hallie Jackson, who has been reporting on the Trump Administration`s efforts to deal with this, the changing story line. You`re there on a Friday night in front of the White House. What is the latest from your reporting?

HALLIE JACKSON, MSNBC CHIEF WHITE HOUSE CORRESPONDENT: So Ari, nothing yet from either the National Security Council or from President Trump in the White House here, but keep in mind where he will be in actually almost to the minute three hours from now. He`ll be on a stage in Arizona. He`s at a campaign swing out there, and the president may find that to be the forum during which to address this breaking news now, coming out from Turkey and Saudi Arabia about the death of the presumed death of Jamal Khashoggi.

A couple points to note here. The president when he was in Arizona a couple hours ago was fairly chatty about this. After acknowledging, as Ayman has pointed out and you pointed out, that he did believe, he saw no other option than Khashoggi is dead, as the Saudis are now for the first time acknowledging. He also today opened the door to what exactly these new punishments might be against the Saudis if he deems that is what`s appropriate. He said that Congress would end up heavily involved in that. He said they -- members of congress would be consulted closely on what he would do.

He also opened the door to the possibility of sanctions. We have talked about this $110 billion arms deal and the president closing the door on anything happening there, but it is coming at a time when there`s that major conference in Riyadh next week. Business conference, business leaders, international leaders from around the world will be attending; not Treasury Secretary Steven Mnuchin.

However, "The Washington Post" is now reporting Mnuchin may still go to Saudi next week for a separate counterterrorism conference. I was told by sources close - actually in the White House that the reason for that is the counterterrorism is a huge focus and effort for some of the Treasury Department`s portfolio and obviously the center happens to be in Riyadh and that`s where Mnuchin has to go, but it`s interesting timing particularly given what we`re hearing tonight.

I think we will hear more from the West Wing, Ari. Listen, it`s a Friday night, and the president is out of town. He`s in Arizona, but it doesn`t mean that the White House is not still looking at this, obviously, as is the National Security Council. I have been struck by based on my sources they really let this be a diplomatic effort so far. C is involved in this in briefing the president. Chief of Staff John Kelly as well, but it`s really Secretary of State Mike Pompeo who`s been taking the lead.

MELBER: Right. Taking the lead and taking the lead in the changing tone, because this is certainly different, both the building you`re standing in front of as well as what we`re hearing late in the middle of the night in Saudi Arabia tonight. Hallie Jackson, thank you for your reporting.

As we mentioned, the Saudi government confirming for the first time Jamal Khashoggi was killed inside that consulate, putting forward a theory as to why. We`ll stay on the story as warranted. Up next, we are going to take a turn and return to our midterms coverage and a bunch of other important story on "The Beat" when we come back

(COMMERCIAL BREAK)

MELBER: Welcome back. As mentioned, we`re going to keep an eye on the developments out of Saudi Arabia, where that country has confirmed the death of Jamal Khashoggi for the very first time, but there`s a lot of other news going on, including, of course, the midterms. Donald Trump sowing fear 18 days out from election day, accusing Democrats of mob rule. Of course, this is hours after applauding a Republican Congressman and candidate who attacked a reporter.

(BEGIN VIDEO)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Any guy that can do a body slam, he`s my candidate. He`s my guy.

The Democrats don`t like being called an angry mob, but really, that`s what they have become. They`re losing it, and they shouldn`t be.

(END VIDEO)

MELBER: Question there, critics asking, who is acting more like a mob leader? There`s also fears being stoked over immigration. Attacks on a caravan of Honduran migrants drawing closer to the U.S. border. In a moment, I`m going to get reaction from actor and activist Wilmer Valderrama, star of course of the hit show, "That 70`s Show." He`s also on "NCIS". His family immigrated from Venezuela when he was 14, and he has been outspoken proponent of immigration reform, and joined us on "The Beat" before. I`m also joined right here at the table with "Axios" Political Reporter Alexi McCammond. I want both of you before we get going here to just take a listen to Donald Trump`s claim that someone is secretly paying this migrant caravan to cross the border.

(BEGIN VIDEO)

TRUMP: Now we`re starting to find out, and I won`t say it 100 percent, I`ll put a tiny question mark at the end. But a lot of money has been passing through people to come up and try to get to the border by election day. Because they think that`s a negative for us. They wanted that caravan, and there are those who say that caravan didn`t just happen. It didn`t just happen. All caused because of the illegal immigration onslaught brought by the Democrats.

(END VIDEO)

MELBER: Wilmer?

WILMER VALDERRAMA, ACTOR: Okay, so this is like a very old traditional dinosaur tactic of scaring the general public in the midterm elections on what`s really going on. This is really another way to distract and divert the real topic, which is answering questions about the economy and health care, which is what people want to hear about in the midterm election. They continue to, you know, focus on things like look this way, don`t ask these questions. I mean, it`s literally just old tactics. It happens every cycle. They have the same recipe, and it doesn`t scare anyone.

ALEXI MCCAMMOND, "AXIOS" REPORTER: Can I just take us back to October 2016? Right before the 2016 election, that`s when Donald Trump introduced the phrase bad hombres and ramped up his immigration rhetoric, vowing to deport all the bad hombres.

VALDERRAMA: That`s right.

MCCAMMOND: He also made the false claim that border patrol agents were illegally allowing immigrants into the country just so they could vote in the 2016 election. That was in October of 2016. We now see that same exact strategy happening ahead of the 2018 midterms because he knows the Republican Party is in trouble and he thinks that stoking this fear or fear of loss is going to turn out Republican base voters.

VALDERRAMA: No, the big thing for them, and I brought numbers because I think it`s important for people to know, Florida has now a record, 2.1 million Latino voters making up about 16.4 percent of the state electorate. Now, that`s something that historically, now, Florida is experiencing a moment in time where something can really drastically change. Texas has about 41 percent of Latinos who are eligible to vote are between the ages of 18 and 33. So you know, furthermore, 60 percent of Latinos have not been reached out to by any campaign. When you look at the actual potential and what`s really going to happen in the midterms and all the scare tactics are really not going to get anybody to stay home. They`re actually going to be turning out.

MELBER: You think it`s mobilizing.

VALDERRAMA: I think it is.

MELBER: You know, we talk a lot about the clich‚ this is a nation of immigrants. Eric Trump was leaning into that, but more as a defense of their rhetoric. Take a listen to Eric Trump on all this.

(BEGIN VIDEO)

ERIC TRUMP, SON OF U.S. PRESIDENT DONALD TRUMP: This isn`t an American problem this is a you problem. You take care of your own problem. Make sure this doesn`t show up on our southern border.

UNIDENTIFIED FEMALE: People would say that`s heartless.

E. TRUMP: It`s not heartless. It`s not heartless at all. You have to come into this country legally. Guys, I`m the product of immigration. My mom wasn`t born in the United States. My father`s current wife wasn`t born in the U.S., but the difference was they came into this country legally.

(END VIDEO)

VALDERRAMA: You want to - you want to go first?

MCCAMMOND: What I will say about that is that I will make the argument that on both sides, Democrats and Republicans, we saw earlier this year there was no real incentive for either party to reach comprehensive legislation on immigration. To come to an agreement, because they knew it would be politically savvy. That`s not to say some lawmakers didn`t genuinely want to find an agreement, but Donald Trump has no incentive to find an agreement on immigration legislation, so when Eric Trump is talking about doing it legally, the president himself is not talking about it. He`s talking about building a border wall, which doesn`t have extreme support, he doesn`t have the money for, and that`s not comprehensive legislation to find a legal comprehensive path to immigration.

VALDERRAMA: That`s right. Also, you talk about being a businessman. You know, and you want to deport $56 or $50 plus billion in Social Security that they will never see, and the actual taxes that the illegal, really undocumented immigrants are actually paying to this country, and imagine if you are given the ability to get a real minimum wage and actually be taxed lie all of us, I mean, where would the economy be, in many of the states where they take the jobs you don`t see.

To me, it`s, again, pivoting, look at this thing. Here`s a problem they created, but really, the truth of the matter is we`re not thinking about the reform. We`re not thinking about the road to solution, and how can we be more proactive and more efficient with the situation we have. I think that it`s really silly to think that, you know, that you`re going to deport all these immigrants and now question residents and other citizens that were naturalized here. You know, and their contribution to this country.

MELBER: And finally, I have about 30 seconds and then we`re going to an update from our own Richard Engel on this other big Saudi story. When you look at these people saying, well, midterms, young people are never that interested, you have a following. What do you say to young people about voting next month?

VALDERRAMA: You have a moment right now to make history. This is the moment where march of our lives and young people connected, you know, when you see what happened with march for our lives and see how they connect and mobilize. Understand that that passion and that fire has now strategized. The movement is the midterms.

We have a coast-to-coast movement going on right now and I`m involved in a number of them, some with Latinos and a number of other incredible organizations. I`m going to El Paso election weekend. I`m going to Miami, and I`m going back to Houston. And we`re getting together. We`re going to show up. I think that`s something that people are going to be not only surprised, but it`s going to be historic. You have the power to not only pivot, but Texas is going to look different in five or ten years.

MELBER: Wilmer Valderrama, very interesting to hear an update on your work. A lot of people interested. And Alexi, good to have you here reporting on set. We`re going to take a break as I said, so my thanks to both of you. But we continue our coverage of this breaking news out of Saudi Arabia. Richard Engel, NBC News Chief Foreign Correspondent, is able to join us live from Istanbul. Richard, the latest on your end?

RICHARD ENGLE, NBC CHIEF FOREIGN CORRESPONDENT: Well, this is something we have all been waiting for for a long time. This is something that the U.S. government, President Trump, has demanded an explanation from the Saudis. What happened to Jamal Khashoggi?

Over two weeks ago, the Saudi journalist walked into the Saudi consulate in Istanbul where I am right now and was never seen to emerge, even though his fianc‚e was waiting for him outside. Turkish officials have said time and time again that they believe he was murdered inside the consulate, that he was interrogated, tortured, his body dismembered.

The Saudis until now have been saying they don`t know what happened to him, until now. A short while ago, the Saudi state television quoting a state prosecutor said that Khashoggi did in fact go into the consulate. We all know that. But they say that he got into a fight once he was inside; a fist fight that resulted in his death. They also said that 18 Saudi nationals have been arrested in association with this incident, as they were describing it. And in another statement on Saudi television, they announced that the Deputy Head of Saudi Intelligence has been removed from his position. He would be the most senior Saudi official to be punished for this crime. That`s their explanation. There are some holes in it, but that`s what they`re saying.

MELBER: And Richard, how do you split the difference there between the emphasis in the statement that they claim they have all these people under arrest, which suggests some sort of rogue operation or people committing crimes, with the cover story, as I`m calling it, that somebody got into an altercation and just mysteriously died and it took this long to even say that much?

ENGLE: Well, they`re not exactly saying that it was a fight that happened between two people. There have been some suggestions, hints really, coming out in Saudi influence media that this may have been an attempt to capture Khashoggi. That this was a rendition and that a fight broke out, then the fight story fits with that narrative.

So they`re not saying exactly -- they`re saying very little. This statement was just over a paragraph. When you compare it with all the other things that have come out, it seems like the Saudi narrative, which I think is going to emerge more thoroughly in the coming days, is that this was an attempted rendition. Again, they haven`t said that so far. They just say it was a fight, and during that operation, a fight broke out and the fight resulted in his death. Now, the problem with that story is, as you were suggesting, is that the Turks who have been saying for several weeks now that a 15-member Saudi hit team flew in, including a forensics expert, a medical expert, who had a bone saw, who was prepared to dismember the body.

And Turkish police are searching -- well, they`re starting to look at surveillance cameras anyway, two areas where they think body parts may have been disposed of. So that does suggest more than a fight. But we are starting to hear a Saudi explanation emerge.

MELBER: Richard Engel, who has been on the story from the beginning, staying up late for us in Istanbul. Thank you for your reporting. We have a lot more on "The Beat" when we come right back.

(COMMERCIAL BREAK)

MELBER: Welcome back. We continue our breaking news coverage. The Saudi government confirming for the first time that U.S. resident and journalist Jamal Khashoggi did die inside their consulate. The official statement states that he was killed in a quarrel. I`m joined by phone by Steve Clemons, Washington Editor at large for "The Atlantic," and "New York Times" journalist Nick Kristof. Steve, put this in context for our viewers, particularly as U.S. media has reported for some time what the Saudis now acknowledge.

STEVE CLEMONS, EDITOR FOR "THE ATLANTIC": Well, the U.S. media has not acknowledged that Jamal Khashoggi was killed in a fistfight, that this was an interrogation gone bad. This is a contrived lie, Ari, and I think it`s very important in establishing context to understand that from both Turkish intelligence and Turkish press sources which have been reporting which the western press has been catching up. We pretty much have a fairly good understanding of what happened, that men laid in wait for Jamal Khashoggi when he entered the consulate. He was quickly murdered. He was dissected, and his body was done away with. And so it doesn`t hold with the truth. And I think that right now what you see is an elaborate cover-up that the king is trying to preserve the equities of his son, who is now crown prince, and tried to demonstrate that they`re trying to place blame on others in this process. And I think we also need to face the fact that the United States has not been a help in getting to the truth. It`s actually help assist in helping them come up with a contrived fabrication of what happened.

MELBER: And stay with me, Steve. Nick Kristof, your view?

NICK KRISTOF, "THE NEW YORK TIMES" JOURNALIST: Well, so they effectively acknowledge having lied for 17 days, and now they`re shifting to another narrative that is also a lie. And I just find it infuriating dishonoring Jamal in one more way. I mean this notion that he was killed in a fistfight gone wrong when they brought a bone saw to this event, it`s absurd.

And the crown prince himself it seems is going to head a commission that is going to investigate this. You know, that`s like putting O.J. Simpson in charge of an investigation he was involved in. This is just one more indication that they don`t feel under sufficient pressure from the United States and international community and that they think they can get away with an effort to preserve the crown prince and shift the blame to various fall guys. And it`s just an insult to Jamal and to the world.

MELBER: And with that in mind, Nick, what do you think is incumbent on the Trump Administration to do? We just heard from Hallie Jackson in front of the White House, the president on the road. They haven`t at this moment had a reaction yet, but what`s incumbent on them to do in response to what you and others have identified as a pretty blatantly false cover story?

KRISTOF: Well, since it`s patently absurd, I think the U.S. and other NATO countries -- since this happened in a NATO country, I think there is some reason for NATO countries to act together, to call for an investigation under the auspices of the U.N. The Security Council could call for it, the general assembly could call for it, or the U.N. Human rights council could call for it. Any of those would be feasible. And then the NATO should jointly expel Saudi ambassadors and suspend weapon sales to Saudi Arabia. I think we could also quietly advise King Salman and -- it`s a little unclear how with it the king is, but certainly advise the royal family that as long as MBS is the crown prince, then Saudi Arabia is going to be completely isolated in the world, and that they need to find a new crown prince who is not a murder.

MELBER: Put very starkly, but it makes a lot of sense. Nick Kristof, stay with me as part of our breaking coverage you called in. Steve Clemons is on the phone. Steve, for you and our viewers, I want to play one of the more incriminating things we heard from the president. Very clearly, this is before this news broke this hour, but well after what the president said was flatly contradicted by available media reports, to say nothing of private intelligence. Here he was talking about whether perhaps it was not the Saudis but quote/unquote, "rogue killers" who carried out this execution. (BEGIN VIDEO)

D. TRUMP: The king firmly denied any knowledge of it. He didn`t really know. Maybe -- I don`t want to get into his mind, but it sounded to me like maybe these could have been rogue killers. Who knows? We`re going to try getting to the bottom of it very soon. But his was a flat denial.

(END VIDEO)

That flat denial has given way to a partial acknowledgment of the cover story tonight. Steve Clemons, having heard that, that was the president on Monday with the final minute that we have. Your thoughts.

CLEMONS: Doesn`t he remind you of the 400 pound blogger that might be in the couch in his or her home hacking into Hillary Clinton`s e-mails? It is part and parcel what President Trump has brought to his job, which is basically, kowtowing and acquiescing to the autocrats in the world and believing them more than his own intelligence service, believing them more than his own allies, believing them more than logic would bear. This has made so many of us -- I happen to know Jamal Khashoggi, but it`s far beyond that. This is a green light to autocrats around the world, including Erdogan. Turkey is no cruise ship for journalists to jail, harass, and even kill those of us that are trying to create accountability in political systems around the world.

MELBER: Right.

CLEMONS: It`s outrageous for President Trump to engage as he has with Kavanaugh and others and have respect for those who deny, deny, deny. The President of the United States is the most powerful man in the world and he should call out liars and he did not in this case.

MELBER: My thanks to Steve Clemons and Nick Kristof. As part of our breaking coverage. The items we didn`t get into the show that were preempted we`ll bring you next week, but the special live coverage of this unfolding scenario continues right now in "Hard Ball" with Chris Matthews.

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

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