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Ari questions former Michael Cohen lawyer. TRANSCRIPT: 12/17/2018, The Beat w. Ari Melber.

Guests: Mara Gay, Caroline Polisi, Lanny Davis, Jerry George, Elizabeth Spiers, Margaret Carlson, Sam Nunberg

Show: THE BEAT WITH ARI MELBER Date: December 17, 2018 Guest: Mara Gay, Caroline Polisi, Lanny Davis, Jerry George, Elizabeth Spiers, Margaret Carlson, Sam Nunberg

KATY TUR, MSNBC HOST: Oh, boy. That`s all for tonight. We`ll be back tomorrow with more MTP DAILY.

"THE BEAT WITH ARI MELBER" starts right now. Ari, are you back from Peru?


TUR: It looks fun.

MELBER: That is where I was. I guess Instagram revealed that. I feel like a lot happened.

TUR: Machu Picchu.

MELBER: Machu Picchu. Did a lot happen last week?

TUR: I want to know did you meet any aliens? Any interesting happened down there?

MELBER: You know what, this is the problem when two news anchors try to talk to each other because we`re both asking questions. You want me to take you as first?

TUR: I would like you to save mine.

MELBER: I didn`t meet any aliens. But I did see a bunch of Inca ruins like they have the -- basically, these giant circles that look like they would be drawn from aliens but apparently were all about farming research, Katy.

TUR: Very interesting. In response to your question --

MELBER: Thank you.

TUR: -- nothing happened last week. It was very calm and quiet and I`m sure your lead tonight is dull as doorknobs.

MELBER: We have a lot in the lead. I guess that`s my last question for you. If you`ll permit me another --

TUR: It`s not. A lot happened and Ari is going to break it down.

MELBER: A lot happened.

TUR: And we miss -- we honestly, genuinely missed your voice.

MELBER: I don`t know about that.

TUR: And I had --

MELBER: How do you pick when to vacation, Katy?

TUR: I try to vacation whenever I possibly can.

MELBER: Just any old time?

TUR: Just any old time.

MELBER: I had thought wrongly, and this is an example of me being wrong, it`s just not hard to find, I had thought that maybe mid-December would be a slower time.

TUR: No, no, no.

MELBER: No, not at all.

TUR: It`s always bad. You got to (INAUDIBLE) take a vacation and this is what I`ve told our bosses are the actual vacation days. So between Christmas and New Year`s, or Fourth of July, sometimes when everybody else, including the Mueller team, is on vacation.

MELBER: There you go.

TUR: Which is why I argued for next week and I got it and then --

MELBER: Congratulations.

TUR: -- Ari, they pulled me back in.

MELBER: They always do. Look, I`m going to take a vacation from this conversation.

TUR: Great. See you later.

MELBER: I appreciate your time.

TUR: Welcome back.

MELBER: Katy Tur, good to be back.

Donald Trump is now rebuking his former lawyer Michael Cohen as a rat. As I was mentioning to Katy, we have a lot of stories tonight. That is one of them, with Lanny Davis here to respond on THE BEAT. And a former "National Enquirer" executive predicting that company would flip on Trump also here tonight with an insight account of the "National Enquirer`s" secret safe. It should be interesting.

And later, the man Trump just picked to run the White House, he actually recently called Donald Trump a "terrible human being." We have a report on why Trump`s hiring process looks to be getting so desperate. But let`s get right into the top story tonight. These investigations bearing down on Donald Trump, with new indictments today. Did you hear about this? As well as a new report on Russian interference and some bizarre denials from Donald Trump`s lawyers.

Now, everything depends on how you count, but let`s start here. How many investigations does Donald Trump face right now? Seventeen into his links to Russia, according to account from "Wired Magazine". Before we go any further, consider just how unusual this is tonight. My colleague, Rachel Maddow, put this situation quite well by noting it doesn`t even matter anymore how old you are, you haven`t seen anything like this.


RACHEL MADDOW, MSNBC HOST: I mean I don`t know who you know or how old they are, but nobody else has ever lived through a moment in the American presidency like this. We`re the first.


MELBER: We`re the first, and most people haven`t seen a sitting president publicly turn on the FBI in order to try to apparently save himself. That`s exactly what former FBI Director James Comey just publicly alleged late today. He was coming out of his private testimony to Congress, but he spoke briefly to the public assembled there, some of the reporters, and he says Donald Trump`s team is willing to literally burn down the FBI and that too many members of Congress, the building where you see Comey standing there, have been basically way too silent the whole time.


JAMES COMEY, FORMER FBI DIRECTOR: The only opportunity to challenge it would be to burn down the entire FBI. To my shock and horror, they`ve tried to do just that in the face of silence from people in this building.


MELBER: Silence. Many Republicans in Congress may be silent. But these prosecutors, they`re not. New details tonight on Russia`s online misinformation effort, which continued after the election, and is still under investigation. This is a report commissioned by the U.S. Senate, and talk about an international cover-up.

It finds that these Russian efforts continue to go after Mueller directly, portraying his probe as "nonsense", claiming that Mueller and Comey were corrupt, and their propaganda, these Russian efforts, echo Donald Trump`s rhetoric, saying the entire Russian investigation was a "weird conspiracy pushed by liberal crybabies".

Also, new today, more fallout from Mike Flynn. Now, he`ll be sentenced tomorrow. Today, though, two of his colleagues indicted in federal court for conspiracy to violate U.S. lobbying laws. The case building on a Mueller pattern, investigate, indict, flip, and then deploy other prosecutors to handle the things that may go beyond his actual mandate.

Now, as this pressure builds, we`re also seeing Rudy Giuliani back on offense, which in his case, you may have noticed sometimes looks like, I don`t know, inadvertent defense. It is a big deal that federal prosecutors say President Trump directed Michael Cohen`s criminal payoff to silence women. But now Giuliani says Trump didn`t direct it, but even if he did, it`s not a crime.


CHRIS WALLACE, ANCHOR: Did Mr. Trump direct Michael Cohen to pay off these two women or not?

RUDY GIULIANI, DONALD TRUMP`S LAWYER: No, the truth is actually what Cohen testified to under oath before Congress and what he repeated numerous times on surreptitious tape recordings that he made, which is that the president didn`t know about this until sometime into it. But Chris, even if it were true, it`s not a crime.


MELBER: That may be Giuliani`s opinion. The problem is, the prosecutors and Cohen have now agreed that it was a crime. Giuliani also appeared to get tripped up over how long Trump was seeking business in Russia back during 2016 in the campaign. Now, this is something the president has already been caught lying about.


GEORGE STEPHANOPOULOS, HOST, THIS WEEK: Did Donald Trump know that Michael Cohen was pursuing the Trump Tower in Moscow into the summer of 2016?

GIULIANI: According to the answer that he gave, it would have covered all the way up to -- covered up to November of 2016. Said he had conversations with him but the president didn`t hide this. They know --

STEPHANOPOULOS: Earlier they had said those conversations stopped in January 2016.

GIULIANI: I don`t -- I mean, the date -- I mean until you actually sit down and answer the questions and you go back and you look at the papers and you look at the -- you`re not going to know what happened. That`s why lawyers prepare for those answers.


MELBER: Yes. Well, let`s go look back at the papers. Because the papers submitted in court verified by federal investigators show Cohen working on the Trump Tower Moscow deal up through June 2016 and then dropping it around the time Russian meddling became public. After Trump`s past lies, Giuliani is clearly opening the door to somebody working on that Russia deal. Maybe somebody other than Michael Cohen, all the way through November 2016, which just think about it tonight, it sounds bad.

Why would Trump`s own lawyer put it out? Is this another Rudy Giuliani gaffe? Well, maybe not. On the one hand, you always have to keep in mind the classic legal principle, which is Giuliani gonna Giuliani, which means some gaffes. But on the other hand, if someone did keep working on trying to get money from Russia for Trump all the way through November, and if Bob Mueller already knows about it, then yes, Trump`s team may keep leaking out these apparently bad things one at a time to try to blunt the impact of Mueller`s final report.

Let`s get into it. We have a great panel. OK. Maya Wiley, former counsel to the mayor of New York City and a civil prosecutor in the SDNY where Michael Cohen confessed. Mara Gay, editorial board member of "The New York Times" and Defense Attorney Caroline Polisi who represents guilty Trump aide George Papadopoulos. So a lot of expertise here.

We`re going to get to you and your client. But Maya, first, what is Rudy doing?

MAYA WILEY, FORMER COUNSEL TO THE MAYOR OF NEW YORK CITY: Making mistakes because anywhere you slice it, it`s a mistake. Either he just doesn`t know what he`s talking about and or he is literally making clear that the information we have been receiving from the White House, from their talking points are not accurate.

So it doesn`t really matter what he`s doing. Either way, it`s a problem for this administration. And when you count up all its problems, including every single entity that Trump, Donald Trump has created, under investigation by some law enforcement somewhere, that`s a problem.

MELBER: Counselor, may I push you on that a little bit?

WILEY: Yes, you may.

MELBER: You`re stipulating the view that it does not matter. An alternative interpretation though would be that if you have past lives in public, which are bad but legal and people are going in to the grand jury or Congress where lies become illegal, and you know that Mueller`s uncovered some things, you may want to fix your public story to prevent criminal lying as opposed to legal lying.

WILEY: It`s hard to correct if you said something in the context of law enforcement that was untrue. It`s hard to turn around later and correct it. So it`s not that it`s not a problem, it`s that whatever scenario we`re looking at from Rudy Giuliani, meaning he either just doesn`t know what he`s talking about or there`s actually been -- which I believe -- which is --

MELBER: You`re on theory number one, which is Rudy is going to Rudy.

WILEY: Rudy`s -- well, that Rudy`s -- no, I`m actually more on -- both these things can be true. Rudy can Rudy and people have been telling lies. All that can happen at the same time. I actually think that Rudy understands what he`s trying to do and not doing it very well.

MELBER: Well, Mara --

WILEY: We have a long history of that.

MELBER: Mara, as you know, Maya Wiley`s legal analysis can contain multitudes. So there`s layers on layers. I want to play for you the really messed up situation that America is in tonight. I don`t know any other way to put it. And James Comey just came out and blasted, which is you have public officials, I don`t care what party, the public officials and they are out defending Mike Flynn after he confesses to a felony.


MELBER: And they write the laws. They wrote the laws that say you can`t do this. Take a look at Comey today.


COMEY: And they are up here attacking the FBI`s investigation of a guy who pled guilty to lying to the FBI. He should have been warned you shouldn`t lie. He should have been told you can have a lawyer. Think of the state of affairs we have ended up in. That`s nonsense.


GAY: So what James Comey is talking about is actually something that, when you pull back, is extremely dangerous. I think we`re in an even more dangerous moment than we were or have been in for the past two years. And that`s because we have so much information about so many crimes or potential crimes that have been committed by either the president or people close to him.

And I think when you look at the 17 different investigations that are going on, there`s plenty of evidence of wrongdoing here. The dangerous moment is that we don`t know yet whether Congress actually will do its job, and bring people not necessarily to justice in their case, but hold people accountable for this.

And I also think that we have a responsibility in the media to make sure that we really take a hard look at the kind of spin that`s coming out of the White House at this moment. Because I think it`s very clear from Donald Trump`s tweets and from Rudy Giuliani`s statements, and frankly, distraction, that they are willing to call up, down, and left, right and they will go to any lengths.

MELBER: Or a crime, not a crime.

GAY: Right, exactly. And so I think we really need to try and separate for Americans the best we can facts from fiction. Because it really does become the steady drumbeat of Americans being deluged with so much information that they eventually shut off and can`t decipher what the larger narrative is.

MELBER: Which not to keep going back to the theory but that is door number two, which is that it`s not just Rudy rudying, but that they`re just trying to put this out, trickle, trickle, trickle. Now, you have a client who did cooperate with the special counsel.

CAROLINE POLISI, CRIMINAL DEFENSE ATTORNEY REPRESENTS GEORGE PAPADOPOULOS: Not technically. Right. He didn`t (INAUDIBLE) 5K1 letter but yes, he tried, he attempted.

MELBER: You`re going to come in here with the 5K1 letters. You have a client who did not resist the interrogations of the special counsel in the long run and was granted leniency.

POLISI: That`s right.

MELBER: OK. Now, you see how much time I had to -- I`m just kidding with you. But --

POLISI: I just make the distinction because I think it`s interesting when you look at the Michael Flynn, who is an actual cooperator.

MELBER: Right. He`s all the way in.

POLISI: He`s a kindler and gentle special counsel`s office as opposed to say a Michael Cohen who was a cooperator but wasn`t technically a cooperator in the terms of --

MELBER: Right. And that -- you mention that. I`m actually going to speak with Cohen`s former lawyer later tonight because the federal prosecution of New York did make a big point of that. And they say that`s why he needs more jail time. So I appreciate your expertise and your distinction on that.

James Comey was breathing hot fire at Donald Trump for what he calls rat cooperation, which I don`t think goes down to the technical degree we`re talking about, because Donald Trump was mad at your client and Michael Cohen and others for this. Take a look at Comey saying why this is so bad.


COMEY: It undermines the rule of law. This is the president of the United States calling a witness who has cooperated with his own Justice Department a rat. Say that again to yourself at home and remind yourself where we have ended up. There are a set of values that represent the glue of this country and they are under attack by things just like that.


MELBER: Given your experience practicing and litigating right in this case, in the Russia probe, and you look at Comey calling that out, is he hitting the right tone? Is Donald Trump wrong to attack people who cooperate with law enforcement?

POLISI: Well, look, it`s definitely utterly unprecedented, like it or hate it. The fact is that we have a criminal justice system that is based upon the cooperating witness. When you enter the system, you`re either exiting it behind bars or you`re becoming -- you know, in my line of business, some people tend to call them rats, you call them cooperators but that`s the facts. That`s how the system works so --

MELBER: Is it wrong for the president to call them rats?

POLISI: I think it is. I think it does definitely undermine the democracy on which our country has been founded on.

MELBER: And in your experience --

POLISI: It`s for Justice Department.

MELBER: In your experience -- without getting into the parts that are privileged, within your experience, did the Mueller probe work honestly with these people to gather information or did it, as Donald Trump alleges, somehow squeeze people into false information?

POLISI: Look, I mean again, I`m not going to get into any attorney-client privilege issues.

MELBER: I`m not asking you to.

POLISI: But I think everybody comes at it in a different perspective. I think Michael Flynn`s attorneys pushed it too far when they said that the FBI investigators had a duty to tell them that it was, in fact, a crime to tell a lie to the FBI which I think we can safely say that Michael Flynn knew that. There are a lot of investigative techniques in this country that people are not happy with. The FBI can lie to you. They can know the answer to the question that they`re asking you and that can still be a material --

MELBER: Right. But I think what we`re getting at is that`s the system.

POLISI: That`s the system.

MELBER: We can have a broad discussion about that but investigators, cops, FBI agents are going around the country playing hardball and they play hardball with a lot of kids in the inner city. They play hardball with a lot of people who have done all sorts of things or haven`t done all sorts of things. What you have here is a very selective outrage. And don`t you think that that interferes with the investigation?

POLISI: I absolutely. I think that`s the point. The point is to interfere with the investigation. I don`t think anybody is making any statement otherwise.

GAY: I just think it`s an extraordinary moment and it`s easy to lose how extraordinary it is. I think James Comey did a great job of laying out and reminding Americans to look how far we`ve fallen. Look where we are. We have the president of the United States calling a cooperating witness in an investigation against him, into him and his administration, a rat as though he`s a mob boss and not a president. He`s maligning all of our institutions, attacking them and actually weaponizing them to protect himself and his own interest. It`s a sad moment.

WILEY: I think James Comey could have gone farther. There are people who use the word rat to talk about people who cooperate with law enforcement and it`s usually mob bosses. Others have made this point, so it`s not just -- it`s not -- he`s both attacking the institution of independent law enforcement, and he`s using the language of criminals to do it, which really should tell us something.

MELBER: Right. I think that`s very well put. Finally, you based on your dealings with the special counsel`s office, do you think they`re ready for what Trump may do next, including potentially trying to do an end-run around the probe or use pardons?

POLISI: Oh, gosh. I have no idea. I do think -- I`ve heard reporting that they`re gearing up for a potential subpoena showdown. We heard Rudy say over his dead body that Trump would go and talk --

MELBER: Do you think Mueller would still subpoena for actual live testimony?

POLISI: I think if he felt like he needed it, he would absolutely do so. If he felt like the law was on his side. He`s sort of a straight-laced guy. He`s probably going to follow that office of legal counsel --

MELBER: And what`s one thing you learned about them from dealing directly with them that the rest of us might not know?

POLISI: Oh, well, they play hardball. I will say that.

MELBER: Tough?

POLISI: They are. They are tough. They are tough.

MELBER: All right.

POLISI: That`s all I`ll say.

MELBER: Well, I really appreciate you coming on the show. We always like talking to people who are right in the middle of it. And as you know, we talked to your client`s wife and maybe your client George will come on. As he knows, he`s invited.

Maya Wiley, Mara Gay, and Caroline Polisi, thanks to all of you.

Coming up, as I mentioned, Lanny Davis, Michael Cohen`s former lawyer is here. We`ll talk rats and a whole lot more. And later, we`re going to fact check some of Donald Trump`s hush money payments to women with reaction from a long-time editor at the "National Enquirer". And later, the Trump, White House lurching from crisis to crisis with these cabinet level vacancies. And now, a top aide who once called Trump a "terrible human being".

I`m Ari Melber. And you`re watching THE BEAT on MSNBC.


MELBER: Donald Trump`s former lawyer and fixer Michael Cohen is preparing for up to three years in prison after taking responsibility in court and in public for crimes he insists that he largely committed on Donald Trump`s behalf. While the president openly blasting Cohen now as a "rat," a term typically used by criminals trying to dissuade others from telling the truth about their crimes, an incriminating pattern of Trump publicly interfering in criminal investigations is obviously here for all of us to see. This is part of a larger trend, urging witnesses not to testify, which legal experts say that only builds the obstruction case against President Trump.

Let`s get right into it now. I`m joined by Lanny Davis who`s a former lawyer for Michael Cohen and a former lawyer for the Clintons. Thanks for coming on THE BEAT tonight.


MELBER: Let`s start with the larger context, not just Michael Cohen who you have previously represented, but the way that Donald Trump seems to blatantly discourage or even punish cooperation with law enforcement. What is your view of that?

DAVIS: Let`s just assume it was not the president of the United States where the issue of obstruction injustice and witness tampering could be the subject of an indictment. Donald Trump should be indicted for calling a cooperating witness a rat and for praising people who are obstructing and refusing to cooperate.

Remember, Michael Cohen is the one person fully cooperated with the special counsel, 70 hours, 7 meetings. And yet Michael Flynn gets no jail time and Michael Cohen gets called into the Southern District of New York offices on the Friday before the Monday, and he`s told either plead guilty or you`re going to be indicted.

MELBER: Well, let`s -- I want to get to that --

DAVIS: Something is off with that.

MELBER: I want to get to that, Lanny. But before we get to that, when you say your assertion here on the news tonight is you think the president is effectively committing felonies, and on that alone, what should be done about that?

DAVIS: Well, nothing but the Congress acting or when he leaves office, which I assume will be in 2021, he will be prosecuted for a number of crimes, not the least of which is paying hush money that corrupted an American presidential election. But we certainly know that calling a cooperating witness in here, the head of the law enforcement offices of the United States government, and deterring people to cooperate and tell the truth the way Michael Cohen did, is an obstruction of justice and should be penalized.

MELBER: When you say penalized if it`s an obstruction, what do you think a legitimate Congress should do about it?

DAVIS: Well, I`m not ready to decide on impeachment, unless I see evidence of a bipartisan effort. We`ve been down the road of a partisan effort on impeachment in 1868, which historians have found to be illegitimate in 1998 and `9 with President Clinton. So I need to see Republicans stand up to a president that is not only lawless, but they don`t seem to have the ability to stand up to at least demand that he tell the truth. But right now, I don`t think the country is ready for impeachment. I think Democrats need to solve the country`s problems and not focus too much on the big "I" word.

MELBER: Well, interesting for you on the "I" word and you have a lot of relationships in the Democratic Party as well. Now turning, as I promised, to your point about this debate over cooperation. For your response, let`s just read an important part of what is alleged by the federal prosecutors in New York that, some people may have missed, because they say that Mr. Cohen, your former client, declined to provide full information, wouldn`t be debriefed on the other uncharged criminal conduct as they put it, and that`s why they explained Cohen`s not being offered a cooperation agreement.

Lanny, based on your knowledge here, which is deep in this case, is that a fair characterization? Did Mr. Cohen get more time than Michael Flynn because he didn`t fully cooperate?

DAVIS: Well, I`m not sure what they`re talking about to tell you the truth. So I can`t really explain what they have said. I know that Michael Cohen asked to be heard frequently before the Friday, before the Monday, and they said no. They talked to his lawyer but he wanted to go in and talk to them about this very complicated tax charge. A bank issue that turned out to be a false statement, not a fraud charge. And then, of course, the campaign finance violation. And they said no.

Now, why would they not allow Michael Cohen to come in until on the Friday afternoon, with a gun at his head basically, you either plead guilty or we`re indicting you on Monday. They`ve never responded to that. Guy Petrillo, Michael`s lawyer, put that in the sentencing memo and none of the media picked up and asked the Southern District why wouldn`t you allow Michael Cohen to come in before you presented him with the ultimatum with three days to go.

That`s the unreported story whereas Michael Cohen did spend 70 hours with the special counsel --

MELBER: Well, that`s the contrast --

DAVIS: -- and I was hoping Mr. Mueller would tell the Southern District, listen, it`s a lot more important the focus that I have on a president that may have colluded with Russia than your bringing somebody in on a Friday and not giving them any time to talk.

MELBER: Right. Well, Lanny, I think you`re putting your finger on something important. It`s a contrast. A lot of legal experts, and I think some journalists to be fair, have noticed. I don`t know that we know the bottom of it. You mentioned Mr. Petrillo. This is what he writes.

He said, look, Mr. Cohen is wary of a long-term cooperation agreement. He wants both to remove himself and to remove his family from the glare of the cameras. But arguing as you have that Cohen did provide a lot of information. At the end of the day, what is the takeaway here? Is it that federal prosecutors in New York were tougher than Mueller or less fair than Mueller?

DAVIS: Well, I use the word in my own statement, they lacked proportionality. Michael pled guilty to the offenses he was charged with. He took ownership, personal responsibility, no excuses. That`s not my criticism of the Southern District prosecutors. My criticism is they hid the ball and they didn`t tell the media, we did not allow Michael Cohen to come in and talk with us.

And to this day, they have never explained that. To say it`s because he didn`t sign ahead of time a full cooperation agreement when he spent 70 hours with Mr. Mueller, which is full cooperation according to Mr. Mueller, who complimented him on disclosing the core issues facing both Mr. Mueller and the country, which is whether this country was compromised by the president of the United States with the Russians. I call it a lack of proportionality and poor judgment. But Michael owned up to the offenses and pled guilty.

MELBER: It is an important and fascinating part of this case after a lot of headlines have come out. We`re going to stay on it. And Mr. Lanny Davis, with a lot of experience in this field, I appreciate you coming on THE BEAT.

DAVIS: Thank you, Ari.

MELBER: Thank you, Lanny.

DAVIS: Thank you.

Up ahead, a former "National Enquirer" editor actually predicted that David Pecker would turn on Trump and he joins me and on the safe full of secrets in just 30 seconds.



GIULIANI: It`s not a crime. It`s not a crime, George. Paying $130,000 to Stormy whatever and paying $150,000 to the other one is not a crime.


MELBER: That`s Rudy Giuliani`s "not a crime" defense, but he is on his own island because federal prosecutors, Michael Cohen as we`ve been reporting and the "National Enquirer`s" own company AMI all suggests there was a criminal payment to impact the election. And the feds got cooperation from AMI so what else does that tabloid company know?

Well, my next guest could have some idea. Jerry George served 28 years as the L.A. bureau chief for the "National Enquirer" and predicted the company would flip on Trump despite their history together.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This was a magazine that, frankly, in many respects, should be very respected. I`ve always said, why didn`t the "National Enquirer" get the Pulitzer Prize?


MELBER: Big question, big question there. And now throughout the campaign, the "Enquirer" ran all sorts of damaging headlines about Clinton and Donald Trump`s primary opponents and Republican Party. The "Times" reports that some of those cover stories could be worth $3 million a month if you count them like political ads. Each cover arguably more powerful than a tweet from an account with millions of followers. But Trump`s links to The Enquirer may come back to haunt him.

AMI chief David Pecker reportedly keeping a secret safe full of all sorts of other alleged Trump`s secrets and dirt that may not have come out. I`m joined by Jerry George, longtime Editor at The Enquirer. You are certainly an insider. I appreciate you joining me on THE BEAT to talk about this, sir.

JERRY GEOGE, FORMER NATIONAL ENQUIRER: Hi Ari, thanks for having me.

MELBER: Go ahead.

GEORGE: Yes, effectively you know, David pecker sold his editorial soul for access to Trump world. And in doing so, he got closer to you know, the real power of the campaign. He did so you know, because he was always on guard looking out for the next bankruptcy. So money is always important to him.

MELBER: I thought he was really rich.

GEORGE: He is rich, but he still needs more money. He`s an acquisitions guy.

MELBER: If he was worried about bankruptcy and he`s worried about stories, and he`s working with The Enquirer, was this a typical reporter-source relationship with the ethics involved in that or was this more like a dirty business transaction?

GEORGE: Well, I think that you know David got close to the -- to the Trump -- to the Trump pals including you know, Saudi money and Jared Kushner`s you know banking friends. So he ultimately gathered some bargaining chips that he planned to use in time to get something he needed.

MELBER: Do you have reason to believe Mr. Pecker knew other incriminating things about Trump that have not come out?

GEORGE: Yes, certainly. Do you know what any of those are? I know some of them. And there are stories involving. Of course, the Trump-Kushner family, there are stories of you know, sibling rivalry with the children, backbiting discord with his wife.

MELBER: Would you describe them because obviously we`re talking about things that haven`t come out and we obviously haven`t verified them. But would you characterize them as merely embarrassing if you will, or do any of them arise -- rise to the level of being potentially criminal?

GEORGE: Well, actually both. I mean, they`re certainly embarrassing. And then when you get involved with you know, the actions of his children, including his daughter and son-in-law. We`re getting closer to criminal activity. Let me read to you -- as we talk about criminal activity, the fact that this corporation that you know well from working there got this immunity, suggested you know, to be a lawyer to know this, they needed some kind of immunity.

Now, here`s a federal prosecutor arguing of all corporations, a news company shouldn`t expect to be unscathed or the acts illegally to undermine democratic norms, tipped electoral scales -- electoral scales, excuse me. AMI used corporate resources to it illegally helped Trump`s candidacy. It should face more consequences. I understand that you worked there a long time. I`m sure there are people there that you do like and respect. But what`s your view at the end of the day here?

Do you think that AMI did act in concert with the Trump Organization -- Trump Campaign to break the law and should they be held accountable I think they did and I think there`s another shoe to drop. I mean the Special Counsels focus is now moving towards you know, the Saudis role in all of this and they may not be -- they may not be out of trouble yet.

MELBER: Wow. Jerry, stay with me. What I want to do, you mentioned Jared Kushner. I want to bring in someone who worked directly for him. And The Daily Beast has reported Kushner basically replaced Cowen as the anchor -- Enquirer -- excuse me, Trump connection. Elizabeth Spiers was Editor-in- Chief of the New York Observer which at the time was owned by Jared Kushner.

When you hear all this, first of all, what`s your reaction? Does it square with your knowledge of the facts?

ELIZABETH SPIERS, FORMER EDITOR-IN-CHIEF, NEW YORK OBSERVER: It doesn`t surprise me. You know, I also think if you look at Trump`s logic in the way that he delegates things it`s unsurprising that he would delegate the - - my relationship the Jared. He tends to look at people around him who he`s close to and he trusts who might know a little bit of information about whatever the subject hand us which is how Jared ends up with a portfolio of responsibilities that are so disparate and weird, you know.

But he did on a newspaper, so it makes sense the Trump would look at him and go you know, you`re the person who`s going to handle this media relationship.

MELBER: And one of the defenses that I`m sure you`re familiar with is the idea that Donald Trump and Jared Kushner and some of the other people just weren`t versed in this kind of stuff. So you had no idea what they were doing. That might be a problem for running things if you -- having Jared that`s your boss. I`m not sure that you love that situation, but it`s certainly to be fair can comprise a valid legal defense if you have no idea what`s going on.

Here was Michael Cohen though, in the new interview basically saying, no, they knew exactly what they were doing towards the election. Take a look.


MICHAEL COHEN, FORMER LAWYER OF DONALD TRUMP: First of all, nothing at the Trump Organization was ever done unless it was a run through Mr. Trump. He directed me to make the payments. He directed me to become involved in these matters including the one with McDougal which was really between him and David Pecker, and then David Pecker`s counsel. I just reviewed the documents in order to protect him.

You have to remember at what point in time that this matter came about, two weeks or so, before the election post the Billy Bush comments. So yes he was very concerned about how this would affect the election.


MELBER: Do you think that Donald Trump and Jared Kushner to the extent he was involved in this would be acting in that way knowingly?

SPIERS: Well, I think it would be hard to make an argument that Jared would have had no exposure or knowledge of what was happening. You know, particularly if he was managing that relationship directly, who else on the Trump team would have known about it. You know, Cohen wasn`t going to be chief of staff at that point. That`s the entire reason why Jared ended up being the conduit to the White House.

So I think it strains credulity to make an argument that Jared would have had no knowledge of that transaction.

MELBER: Jerry, what do you think?

GEORGE: I definitely think that you know, once Michael stepped aside, there was foot traffic between people in the Trump Organization including Jared into the American media organization.

MELBER: And when you say another shoe to drop, can you give us any more insight on what you`re talking about?

GEORGE: I think there`s -- I think the special that they racked last winter is particularly curious. It was racked at Walmart. It was glossy. It had the cover of the -- it had the picture of the prints on the cover. There were pictures of President Trump inside.

MELBER: The prints of --

GEORGE: And it seemed -- it seemed -- it seemingly came out of left field. It wasn`t the typical American media product.

MELBER: Which prints?


MELBER: And so you`re talking about your belief that there may be some other financial incentive for some of that coverage.

GEORGE: I certainly do.

MELBER: And you have -- I have to ask this. You have any specific evidence of that or that`s just what folks are talking about that you know at AMI. It just -- it smells fishy. In addition to shortly after that cover was racked, American Media which is a basically a cash poor company somehow came up with the funding to buy up their competitors from the Bauer Organization. Suddenly there was an influx of cash. I think that`s suspicious.

MELBER: It certainly is the kind of thing that prosecutors would investigate and your knowledge of it, your closeness to it is interesting. As we mentioned, these are investigative leads, these are not verified conclusions yet. Jerry and Elizabeth too, I would say heavyweight insiders in this wild media business. Thanks to both of you for joining us.

SPIERS: Thank you.

GEORGE: My pleasure.

MELBER: Thank you both. Up ahead, Donald Trump getting desperate about that chief of staff position so he promotes a guy who, get this, called him a terrible human being. And another cabinet secretary out after a dozen investigations show that yes, facts and ethics do matter. A lot of heat on the White House.


MELBER: A developing story tonight are these investigations that clearly hot Donald Trump also kneecapping his hiring process. Donald Trump spent a pretty embarrassing week searching for that chief of staff settling on an acting role for Mick Mulvaney who reportedly asked for that temporary acting title. And Trump who claims to be a great negotiator apparently folding and letting his staffer dictate the terms of a presidential hire because of well P.R. concerns. That is what NBC is reporting here is top choices turning him down so Trump was desperate to end the storyline that no one wanted to be his chief of staff.

And for President who prizes loyalty, there`s new video showing Mulvaney was far from pro Trump as recently as 2016.


MICK MULVANEY, DIRECTOR, THE OFFICE OF MANAGEMENT AND BUDGET: Yes, I`m supporting Donald Trump. I`m doing so as enthusiastically as I can given the fact that I think he`s a terrible human being, but the choice on the other side is just as bad.


MELBER: Just as bad. That is now the acting chief of staff calling the President, well, at the time was a candidate, a terrible human being. So maybe all the best people are not actually calling Trump to get a job as he once predicted.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I know the best people. I know the best managers. I know the best deal makers.

I have the smartest people in this country lined up. They`re calling me. These are the greatest negotiators in the world. They`re calling me. I`m going to get the best people for the job.


MELBER: As president, he`s finding that harder than he thought. In a surprise move and a Friday night news dump, Donald Trump also announced that his Secretary of Interior is out after that long battle with investigators. He had faced 15 investigations and allegations of varied misconduct. Joining the long list of Trump officials to have left Trump`s cabinet in just these two years in office. This is something an SNL skit just spoofed, all of the Trump hiring chaos.


UNIDENTIFIED FEMALE: Listen Donald, every time a bell rings someone you know quits or goes to jail.


MELBER: Here`s someone who no longer works for Trump, Sam Nunberg and has some first-hand experience in all this and Margaret Carlson from The Daily Beast who was writing about these hiring issues. Is these investigations related, is it just Donald Trump related, or is it something else?

MARGARET CARLSON, COLUMNIST, THE DAILY BEAST: Well, it`s both of those things. I mean, when you go public and offer Nick Ayers a job and you haven`t got a staff that could warn you he might not take it, you`ve got a bad staff in there and you`re not attracting staff. That was his first choice. And now he has a guy who he thinks he`s a terrible human being who`s doing it.

But there is a reluctance for people to come in. Look at -- you know, I think they`re like six separate investigations going on and Trump needs lawyers. I mean, he needs a bigger boat. Let`s put it that way. And he doesn`t have enough lawyers. And the really good lawyers like Ted Olson and Robert Bennett, they`re -- Brendan Sullivan, they`re saying no to him because they don`t want to get there. And one of the best people who would have been chief of staff on my camp named actually said it`s going to cost me $500,000 in legal fees if I go to the White House.

MELBER: You spoke to a top candidate who cited the overwhelming legal fees as a reason not to go in.

CARLSON: The exposure -- just the exposure of it.

MELBER: Yes. That`s interesting from your reporting. Sam, I want to play some more Mick Mulvaney because look, a lot of Americans could identify with a view that both candidates in 2016 were not their top choice. But that doesn`t mean that then you sell out your principles and go work for them. That`s I think what`s so fascinating about what some Republicans have chosen to do. Here was Mulvaney describing the conundrum in 2016.


MULVANEY: Should either these people be the role models for my 16-year-old triplets, no. In an ordinary universe with both of these people`s past activities disqualify them from serving for office? Yes. But that`s not the world we live in today. The world we live in today it`s either him or her. And for me, that`s still the easy choice.


MELBER: Do you think when he said that he ever imagined that he would be acting chief of staff?

SAM NUNBERG, FORMER CAMPAIGN AIDE, TRUMP CAMPAIGN: Well, I don`t think he ever imagined he was going to be OMB Director and I know that this was up for discussion, these comments that he had made. Because the President as you all know, you know monitors all media and he had discussed this in fact with Mulvaney when he interviewed according to people that I know.

MELBER: You heard that from people in government?

NUNBERG: Yes. People during the transition. Now, remember, the issue we`ve make that a lot of us were surprised about, what -- is the fact that he can be subpoenaed or he can go to Congress and testify. It`s going to be a strange hearing when he has to answer certain questions on the budget and then he says well, I want to exert an executive privilege on other issues especially with all these investigations that are going to be going on the House.

MELBER: So Donald Trump who you work for says he`s got to get the best people and he cares about loyalty. Do you buy this explanation that the reason he`s given up on both those things was they didn`t like a few days of tough coverage?

NUNBERG: I think that that was part of it. I really do. And I think the fact that look, they had settled on Nick Ayers. Nick was somebody who had been under discussion you know even earlier as late as heading into the lunch and maybe even August or so. And you know they had a press release drafted, remember, that Wednesday.

MELBER: Yes. Well, that -- and that`s all the palace intrigue. Let me -- let me come right to the strike zone with you. When you see this person that you worked for to become president, that was your goal, and you see that he can be waffled and rolled on something this important, who sets the White House and runs the policy and the staff, does that look really weak to you? Is that someone who should be President?

NUNBERG: It looks like some -- I don`t know. I think it -- I don`t look at it like that. What it looks to me is that he has a White House that is not going to be ready for what`s about to happen in terms of 2019.

MELBER: Do you -- do you think it advances -- and to both of you, do you think it advances any kind of independent strong leadership if he can`t handle a call -- I mean, talk about snowflake, if you can`t handle a couple days of tough coverage, and that`s how we`re going to make staffing decisions. I mean, I know this is one of many things right now, but this isn`t normal and it would seem to be bad.

NUNBERG: Yes. I think -- I think it was bad. I think it was bad. Look, he was advised -- he was told to fire John Kelly and he was told by certain people in the White House that Nick Ayers was going to accept that position.

MELBER: Are those people family members.

NUNBERG: They could be.

MELBER: Margaret?

NUNBERG: And this is by the way, news tonight when he was told this at first.

CARLSON: And of course, Nick was -- it was Jared and Ivanka`s choice and they should have protected their father from being rebuffed by him. Even you know, Treasury Secretary Steve Mnuchin turned down the job. And remember Don Regan was Treasury Secretary and accepted chief of staff because chief of staff is considered a great honor and you`re right in the -- in the mix of things so it`s not like a Treasury secretary offered the job by the president asked to serve wouldn`t ordinarily say yes.

But I think Mnuchin knows it`s better to be across the street in the Alexander Hamilton building and not in the White House.

NUNBERG: This is a very difficult job. I wouldn`t -- I didn`t -- remember, I`m somebody who was offered campaign manager. I wasn`t -- I didn`t have the proper experience for it, and I said we need to find our own campaign manager, perhaps to my detriment. But I also knew that I didn`t want to be the one who had to discuss certain issues with the president, then-Candidate Trump such as money for instance. Things like that.

MELBER: If you -- if you had become campaign manager, how long do you think you would have held that job?

NUNBERG: I don`t know.

CARLSON: As long as --

NUNBERG: Not the entire --

CARLSON: As long as Corey did.

NUNBERG: Not the entire campaign. I would tell you that probably. So --

CARLSON: I mean, you created your own monster in Corey because you and he -- I mean, he`s the one who you know --

NUNBERG: Back on the chief of staff.

CARLSON: Ushered you out the door. Yes.

NUNBERG: But back to the chief of staff position, I think I think a lot of us --

MELBER: You don`t like Margaret --

CARLSON: I`m sorry, Sam. I didn`t mean to bring it up. It`s Christmas. I`m so sorry.

NUNBERG: It`s -- it was fast, but I just think a lot of us --

MELBER: This is our new -- this is a new game show called two reporters operating.

NUNBERG: I think a lot of us were surprised that Mulvaney took the position in light of the fact that he is managed -- he`s OMB Director and he also manages the other -- that other department too.

CARLSON: But also, everything that Mulvaney believes in, he`s violated already at OMB. And because he`s a zero budget guy, he`s the freedom caucus guy, he`s done -- you know, he -- deficits as far as the eye can see in that job and he`s going to do even more things he doesn`t believe.

MELBER: I mean, this is -- factually, I don`t say this to be mean, but Mick Mulvaney on deficits would make Paul Ryan embarrassed.


MELBER: And Paul Ryan was a huge self-owning hypocrite on deficits. Something we`re going to cover more later this week as we look at the Tea Party legacy. A real pleasure to have you both at the table, Margaret Carlson from Washington and Sam Nunberg from Trumplandia. One more thing when we come right back.


MELBER: Something we think you might need to know. Tomorrow will be another day in court in the Bob Mueller Russia probe because Donald Trump`s former National Security Adviser Mike Flynn will finally get his formal sentence. This is in federal court tomorrow morning. Today, we note two of his former business associates indicted by the feds and they`ll be full coverage both throughout the day on MSNBC and on THE BEAT tomorrow night.


MELBER: Welcome back. Moments ago, Bob Mueller just released this, Mike Flynn`s very controversial interview with the FBI, partially redacted. But this is the substance of the crime he confessed to. We just got it, want to let you know. I`m sure there will be a lot more coverage on it throughout the night here on MSNBC. I`ll see you back at 6:00 p.m. Eastern tomorrow. But don`t go anywhere because "HARDBALL WITH CHRIS MATTHEWS" is up next.