The Rachel Maddow Show, Transcript 3/2/2017

Guests: Adam Schiff, Lee Gelernt

Show: THE RACHEL MADDOW SHOW Date: March 2, 2017 Guest: Adam Schiff, Lee Gelernt

RACHEL MADDOW, MSNBC HOST: Good evening, Chris. Thanks, my friend.

CHRIS HAYES, "ALL IN" HOST: You bet.

MADDOW: And thanks to you at home for joining us this hour.

Attorney General Jeff Sessions recusing himself from overseeing investigations into the Trump campaign and Russia. This is a big deal, right? We`ve been following this for a long time. We`ve been following this pretty intense attention.

When the attorney general recused himself today, it felt like one of those moments that was like exactly halfway between "oh my god, I can`t believe that happened" and "oh my god, I can`t believe it took this long far to happen." But that happened. We`re going to have more on that story ahead tonight, including the super serious new allegations against the FBI in this matter.

Attorney General Jeff Sessions says as of today, he`s getting out of the way in these investigations of the Trump campaign and Russia. But all this time thus far, has he been in the way of those investigations already? Has Attorney General Jeff Sessions been directing the FBI`s investigations in this matter thus far? Specifically, has he been telling the FBI to not share information about what they found with congressional investigators?

Because tonight, one very prominent congressional investigator says that the FBI is actually blocking the Trump/Russia investigation from moving forward. Did Jeff Sessions instruct the FBI to do that before finally recused himself at 4:00 this afternoon? Or -- and this might be worse -- did the FBI make a decision to obstruct the investigation on its own?

Did the FBI itself decide of their own accord to obstruct the congressional investigation into this matter in which case we have to ask if the FBI will continue to block the congressional investigation of this even now that Jeff Sessions is out will they continue to do that for their own reasons? And what happens if the FBI has to recuse itself? But, what, there`s no deputy FBI.

So -- I mean, so, yeah, among people who want a real investigation into the Trump/Russia ties, you know, the word today was, yay, Jeff Sessions is recusing himself from this matter. But now, it`s time for much harder questions than that, with much more worrying implications. Is the FBI legitimately investigating this incredibly serious national security matter or not?

I mean, beyond their own supposed investigation, is the FBI in fact blocking the other major investigation that`s supposed to be going on? One very serious, very sober person who`s in a position to know the answer to that says that is what the FBI is doing and he`s demanding to know why. That person will be joining us live here in just a few minutes.

So, that flaming comet of a story is coming up on our show tonight, in what has really been a whipsaw day in the news. But we`re actually going to do that story second tonight. We`re going to lead tonight with a different story. We`re going to lead with some news that we are going to break here exclusively.

We have obtained a document. We have now verified its authenticity. This is exclusive news, you won`t see this anywhere else.

But this new document would appear to be kind of a stake in the heart for the Muslim ban, for the new president`s travel refugee Muslim ban.

OK, here`s the story: Inauguration day was on a Friday this year. And the weekend after the inauguration, you might remember that things were a little nuts. What is believed to be the single largest day of coordinated protests in American history, well over a million people on the streets of D.C., but millions more people all over the country in small marches and in some very, very large marches, there were marches held in all 50 states, that was the first weekend of the new presidency.

Then, the second weekend of the new presidency, it happened again. More protests, again surprisingly large, except the ones on the second weekend of the Trump presidency, they hadn`t been a couple months in advance like the women`s marches the weekend before. These ones on the second weekend, they, in fact, weren`t planned in advance at all. They were spontaneous, urgent reactions to the sudden no-warning announcement that Friday, one week after the inauguration, that ended up being one of the only actual policies this administration has tried to enact thus far.

The surprise slapdash, barely coherent executive order by the new president banning travel to the United States by citizens of seven specific majority Muslim countries. I say it was a slapdash order because there was apparently no down-the-chain consultation on how to enforce this thing. They just threw it out there on a Friday night, good luck.

Does it apply to dual citizens? Does it apply to people who are legal permanent U.S. residents? Does it apply to people who are holding legal current visas that give them explicit U.S. government permission to be here?

It does? It applies to those people? Are you sure? Does it really apply to all those people? No, you`re not sure? Well, who gets in and who doesn`t?

Some people got lawyers or even members of Congress to help them at the airport and try to get them released by airport authorities. Some people just got sent back. Some people apparently got tricked or bullied into signing away their green cards, right, which is nuts, signing away your legal residency or people got tricked into signing away their legal visas giving them official government permission to be here. It was chaos.

This was the second weekend of the new presidency, and it was this ridiculous thing that was put in place amidst, I mean, this unbelievably chaotic rollout and that was what the second weekend of the Trump presidency looked like and this policy very soon started to fall apart, right? The administration said it did apply to legal residents and then it didn`t. Then it did apply to people with current visas and it didn`t.

Ultimately, it didn`t take long for the courts to start stepping in and say, oh, heck no. Please, stop this.

The first ruling that stopped the ban was from a district judge, a federal district judge in New York, hundreds of people waiting in the middle of the night outside that courthouse for that ruling. People had gone to the airport to protest on Saturday night and then they gone from the airport to the courthouse to hear the ruling. A cheer went up when the ruling was announced.

Government lawyers trying to defend that ban that night for that judge apparently -- I mean, they plainly appeared to have no idea how to defend it in court.

By Monday, the acting Attorney General Sally Yates, she had put in the writing to the new White House. She said that she didn`t believe this new Muslim ban was legal. She said she would not instruct Department of Justice lawyers to defend it because she said it was not going to pass constitutional muster.

The courts agreed. Federal judges in New York and Virginia and Washington state, they all said some legal version of no, no, no. Ultimately, it was a court one level below the Supreme Court that issued a unanimous three- judge ruling that said no, capital N, capital O, you cannot do this.

It was a mess and this really is one of the only actual policy things the administration has tried to do. It`s been a complete mess.

The president reacted to that appeals court ruling by saying, "We`ll see you in court." Remember that? We`re going to fight this all the way. Then, a week later, his administration told the court, actually we`re not going to fight you at all, we`re going to rescind our executive order.

We had the attorney general of Washington state here on this show that night basically taking a victory lap when they rescinded it, right? His lawsuit killed the Muslim ban. The only worry was that the administration said actually they were going to rescind the Muslim ban, but they were going to write a new one to replace it.

And I mean -- here`s how you know something is seriously wrong here. On February 16th, they told the court that they were going to rescind the old Muslim ban but a new Muslim ban was coming. They said it was going to happen right away. They said it was going to happen, quote, "in the near future." That was February 16th.

Five days later, the 21st, the White House said it was almost ready, it was due out right away, definitely this week. And then we got to the end of that week. By the 23rd, they were saying, OK, it`s not ready yet. We`re pushing it back. Maybe it will come the following week, which meant it was coming this week.

Then on Monday night this week, we were told, OK, definitely it`s going to come out on Wednesday.

Then on Tuesday, like around midnight, no, it`s not coming out tomorrow. It`s not coming out on Wednesday. The reason it wasn`t going to come out on Wednesday is they said the White House likes the president`s State of the Union-ish speech on Tuesday night. They didn`t want to put out the new Muslim ban the following day because that would step on the news of the speech. They wanted to let the speech breathe a little.

Literally, that`s what they told us that. The speech needed to breathe.

Remarkable sense of urgency on what`s supposed to be a desperately important matter of national security, right? We`re going to put this off for the day. We like the way the speech is breathing. The respiration of the speech is very satisfying to us.

Well, now, it`s Thursday. Where`s the Muslim ban? And the latest word from the White House is, I know we said we`re going to let it way a day, that would mean Thursday, but here, it`s the end of the day Thursday, it`s not here, OK, it`s not coming today, it`s also not coming tomorrow. Maybe we`ll have a new Muslim ban by next week, maybe.

Here`s the thing, this is one of the only things they`ve actually tried to do in terms of policy. Notice how it`s fallen apart, not gone anywhere?

Here`s the thing, they really do have a problem here and I can show you part of that problem. We have just obtained this document, which is produced by an intelligence agency. The intelligence agency that`s based inside the Department of Homeland Security. Its office is called the Office of Intelligence and Analysis.

And if that name is familiar to you, it`s because that agency, the Office of Intelligence and Analysis at Homeland Security, they were in the news a few days ago because the "A.P." a few days ago obtained a report from this same agency that was apparently spiked by the Trump administration. It was prepared by career intelligence professionals but then they spiked it, they didn`t want to let it out.

And that document leaked to the "A.P.", it was a fairly devastating blow against the Muslim ban. This was the title of the document: Citizenship likely an unreliable indicator of terrorist threat to the United States. Quote, "Department of Homeland Security Office of Intelligence and Analysis assesses that country of citizenship is unlikely to be a reliable indicator of potential terrorist activity."

Right. So, if you`re really going after terrorism, you`re really trying to spot and stop terrorists, just banning citizens of some list of countries does not make any sense in national security terms. So, that was a few days ago. That was leaked. That document from the intelligence agency inside Homeland Security, that was leaked to the "Associated Press" last week.

Yes, the Trump administration may not want this to see the light of day but we`re going to leak it. Intelligence community assessment that says banning people based on their nation of origin is national security nonsense.

So, we had that before tonight. Now tonight, we`ve got this. This is another leaked report. I`m not going to tell you how we got it, but the Department of Homeland Security has tonight confirmed to us that this is authentic, that this is real. You can see at the top of it here, I think we have it on screen. Yes.

It`s labeled, "Unclassified, for official use only". It`s dated yesterday, March 1st, 2017.

This is a report that`s from the Homeland Security Office of Intelligence and Analysis. Again, that`s the U.S. intelligence agency that`s based inside Homeland Security, and interestingly, it says it was prepared by that intelligence office. But look at that small print there, "Prepared by the Office of Intelligence Analysis", that`s the Homeland Security Agency. But it was coordinated with Customs and Border Protection, State Department, Immigration and Customs Enforcement, ICE, National Counterterrorism Center, and the U.S. Citizenship and Immigration Services. So, all those people coordinated in creating this report.

And now, here`s the title, "Most foreign-born U.S.-based violent extremists radicalized after entering homeland." Oh. What`s the key finding here? What`s the key judgment here?

This is it. Quote, "We assess that most foreign-born U.S.-based violent extremists likely radicalized several years after their entry into the United States." And why is that important? Say it again? "We assess that most foreign-born U.S.-based violent extremists likely radicalized several years after their entry into the United States, limiting the ability of screening and vetting officials to prevent their entry because of national security concerns."

Oh, right, so much for extreme vetting.

Right. The whole justification, the whole explanation from this administration for the Muslim ban was to stop people coming into this country, at least for a while, right? At least for a while, temporary travel ban so we can get the extreme vetting. So, Trump could set up his extreme vetting plan, right?

When he announced it in the first place, that`s the "until we can figure out what is going on" part of how he announced.

(BEGIN VIDEO CLIP)

DONALD TRUMP, THEN-PRESIDENTIAL CANDIDATE: Donald J. Trump is calling far total and complete shutdown of Muslims entering the United States until our country`s representative representatives can figure out what the hell is going on.

(CHEERS AND APPLAUSE)

We have no choice. We have no choice. We have no choice.

(END VIDEO CLIP)

MADDOW: You already said that.

"Until our country`s representative cans figure out what the hell is going on" a total and complete shutdown of Muslims entering the United States.

That was the initial announcement of this, right? Right? Until we can get extreme vetting in place, we have to shut down Muslim immigration. Until we can get that extreme vetting in place, otherwise, we can`t be safe from the Muslims.

Well, this intelligence community document that we have obtained tonight, now, this shows us two things. It shows us it`s the conclusion of American intelligence in consultation with the Border Patrol and ICE and the National Counterterrorism Center and the State Department. It tells us that the national security justification for the whole ban, the setting up of extreme vetting is bullpucky in national security terms. There`s nothing they can set up at the border to tell you years down the road who might become a completely different and radical and violent person years from now, because they haven`t been radicalized yet.

So, this tells us substantively, in terms of the substance of the matter that the intelligence community thinks the Muslim ban is nuts. The intelligence community on national security ground thinks the Muslim ban and whole justification for it is cuckoo. Because we have to be realistic about the politics here, though, it`s also worth talking about why we got this. I`m like -- I`m not like Sherlock Holmes. I`m not some incredible sleuth that`s like hacked this somewhere. Somebody wanted me to have this.

And that also tells us something. That tells us that people inside the government, people who have access to intelligence documents like this, they want this to be known. They want it on TV. They want this out, so no matter what the administration says about what they`re doing and why, we can see what the career intelligence people actually think about what this government is doing before presumably they submarine this stuff.

This administration -- I know there`s a lot going on and we`re going to be talking about the Sessions recusal and we`re going to be talking about the investigation in Russia. We`re going to be talking about some other stuff going on. I know there`s a lot going on.

But in terms of what this administration is actually doing, one of the only things they`ve tried to do is this Muslim ban and it`s a disaster. Even if you agree with it, it`s a disaster. And when the court shut it down, they said they would issue a new one and they`ve been pushing that back and back and back and back and back.

And I look at this and you know what I think? I think the Muslim ban is dead.

Joining us now, Andrea Mitchell, NBC News chief foreign affairs correspondent and the host of "ANDREA MITCHELL REPORTS."

Andrea, it`s great to see you. Thank you for being here with us tonight.

ANDREA MITCHELL, NBC NEWS CHIEF FOREIGN AFFAIRS CORRESPONDENT: Thank you. This is an education. You`ve shared with this with me and I`m reading into it and I`m learning a lot at what`s really going on.

MADDOW: Department of Homeland Security authenticated this for us.

MITCHELL: Right.

MADDOW: They told us that it`s a real document. It`s obviously not a complete document nor was it apparently prepared for public consumption. What-- reading through it, what`s your take?

MITCHELL: Well, the policy implications are fascinating because their conclusions here are, first of all, that people do not enter here radicalized. Second of all, that parents do not come and are not radicalized when they arrive nor do they become radicalized.

So, who becomes radicalized? The children become radicalized some 16 years later and how can we intervene?

Well, they have proposals. There are policy implications for this, that working with religious groups, working with community groups, working with adolescents could prevent the eventual radicalization of those who do become violent in years later. But they do not learn this from their parents and they do not arrive this way. Nor do their parents.

That has important implications. It means as you`ve pointed out that, quote, "extreme vetting" whatever that is, doesn`t work, isn`t necessary. And second of all, that there are things we can do in communities.

And I`m thinking back to -- you did an exit interview with Jeh Johnson. Remember the speech he gave, the first speech by a homeland security secretary in Chicago to the Muslim community gathering?

That is the approach, that`s the approach that Bill Bratton would tell you in New York. Those are things that work, not some fictional extreme vetting at the borders.

MADDOW: Right. And that kind of a constructive policy to say we need to address homeland radicalization. We need to address the fact that people who are not radical become radical living in this country through dislocation, through feeling abandoned, through feeling isolated. And those are things we can address, provided we can work particularly with Muslim communities, immigrant communities, all sorts of different kinds of religious communities.

I mean, that`s -- you know, not just anathema, that`s heresy. That`s almost swearing from the point of view of the Trump administration, and the people who leaked this to us, the people who produced it and the people who`ve now made it public by giving it to us have to know that that`s absolutely contrary to where the administration wants to take its national security policies.

MITCHELL: I mean, it`s the same psychology that -- Colin Powell was giving a speech at LIU tonight, and was speaking against the cuts that are proposed for the State Department, for diplomacy, for development, for USAID. And those have been derided in the past by General Mattis and are now being criticized roundly by others in the military.

I tried to ask Rex Tillerson about it at a photo opportunity today and he was silent. He hasn`t answered a single question at any photo opportunity since he was sworn in. He gave an impressive speech the day he arrived, but we`ve heard nothing from the State Department pushing back against these draconian cuts in foreign aid and in security, intelligence development, partnerships that we have with foreign intelligence agencies overseas. So, it`s all part of the same attitude towards soft power and towards our borders and towards Muslim refugees and other immigrants.

MADDOW: Andrea Mitchell, NBC News chief foreign affairs correspondents, host of "ANDREA MITCHELL REPORT" -- thank you for looking this over for us and for being here on short notice.

MITCHELL: Thank you.

MADDOW: Appreciate it.

You know, what Andrea is saying there about not hearing from the State Department, and -- I mean, one of the remarkable things about this is basically what we`ve heard from the State Department since Trump has been president is the dissent cable signed by more than a thousand diplomats objecting to policies of the new administration, especially the Muslim ban. and the State Department is one of the named coordinating agencies behind this intelligence report which we`re reporting exclusively tonight, blowing out of the water national security justification for that ban in the first place. They may not be saying anything out loud, but their leaks and their dissenters are speaking volumes.

We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: When Attorney General nominee Jeff Sessions told senators in his confirmation hearing, quote, "I did not have communication with the Russians", that moment didn`t seem notable at the time, at least not to reporters or the public at large. But you know what? That moment would have popped, it should have popped, it should have resulted in blaring red sirens at the FBI because at that point, the FBI was in a position to know whether or not that statement he made was true because while Senator Jeff Sessions was going through his confirmation hearing to be attorney general, the FBI was reportedly investigating his -- his contacts with Russian officials.

According to the "Wall Street Journal," the FBI had been investigating Sessions` contacts with Russian officials for months, at least since mid- November when he was nominated to be A.G.

One person familiar with the investigation telling the "Wall Street Journal" today that Jeff Sessions` contact with Russian officials while the FBI was supposed to be investigating Trump campaign contacts with Russian officials, that fact left the agency, quote, "wringing its hands" about how to proceed.

I don`t know whether or not they wrung their hands, but the way they did decide to proceed was to not peep to Congress. "The Journal" reports this, quote, "It`s unclear whether anyone in Congress knew about the investigation into Jeff Sessions` Russian interactions before Sessions was confirmed."

Just think about that for a second. I mean, whether or not you choose to think about this in the context of like Hillary Clinton`s e-mails and what the FBI chose to disclose to Congress and the public around that investigation, even just setting that aside. Congress, the Senate was voting on this man to be the top law enforcement official in the country. The FBI, because of its investigation into him knew he had contacts with the Russian government. And that he had not disclosed them, and when he was asked directly about them in his confirmation hearing, he apparently just bluntly lied to the Senate about it under oath.

The FBI in a position to know all of that and they said bupkis? They didn`t peep to Congress? Apparently, the agency didn`t think it necessary to inform the Senate about these salient details about who it was voting on?

I mean, we have seen particularly among Democrats frustration with how the FBI has been handling this matter. But more than frustration, is there something seriously wrong here?

Congressman Adam Schiff, the ranking member of the House Intelligence Committee, ranking Democrat in House Intelligence, he told me two days ago he had yet to be assured of the FBI`s full cooperation in the congressional inquiry into Trump`s ties with Russia.

"New York Times" reported last night that U.S. allies, including the British and Dutch, they have provided information on meetings between Trump associates and Russian officials. They`ve provided that information to the U.S. government. Maybe if we want to know anything, we should ask the Dutch or the British about these things, but not the FBI?

Today, FBI Director James Comey was on Capitol Hill. He met behind closed doors for over three hours with members of the House Intelligence Committee.

Speaking with reporters immediately after, after that, Congressman Schiff sounded very, very unconvinced. He`s now accusing the director of the FBI, Director Comey, of not cooperating, of not being forthcoming with the intelligence committee. He`s warning of the consequences of what he sees as continued stonewalling by the FBI.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D-CA), INTELLIGENCE CMTE RANKING MEMBER: In order for us to do our investigation in a thorough and credible way, we`re going to need the FBI to fully cooperate. At this point, the director was not willing to do that. He made it very clear there were certain questions that we were asking that he would answer and others he would not.

Again, I hope that when we next meet with the director, he will have a different point of view. I hope the department will, because we`re going to need that information and we`re better off getting that through the voluntary cooperation of the FBI than having to contemplate whether we need to subpoena the FBI.

(END VIDEO CLIP)

MADDOW: "Contemplating whether we need to subpoena the FBI." The FBI is blocking the congressional investigation into Trump and Russia? The FBI is not cooperating with the congressional investigation into Trump and Russia?

What Congressman Schiff is saying there is that lawmakers -- not just need but expect the FBI to cooperate. He says he hopes the FBI director will be more willing to answer questions the next time they meet.

Why is he not answering those questions? Why is the FBI stopping this investigation from moving forward? Was it at the request of Attorney General Jeff Sessions? Will that change now that Jeff Sessions is out of the way, or is this something the FBI is doing of their own accord? If so, what`s the remedy to that?

Congressman Adam Schiff joins us next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REPORTER: You would say you only know a fraction of what the FBI knows here?

SCHIFF: Oh, I would say at this point we know less than a fraction of what the FBI knows.

(END VIDEO CLIP)

MADDOW: That`s Congressman Adam Schiff today speaking moments after a long meeting with FBI Director James Comey.

Joining us is Congressman Schiff. He`s the ranking Democrat on the House Intelligence Committee.

Thank you for being here tonight, sir.

SCHIFF: It`s a pleasure. Thank you.

MADDOW: So, I don`t know enough about how intelligence committees work to know how much the FBI should be cooperating with you. Obviously, the FBI is within the Department of Justice. They are reportedly doing their own investigations into contacts between Trump folks and Russia. Obviously, the House and Senate Intelligence Committees are doing a legislative branch investigation as well.

How much help do you expect to be getting from the FBI?

SCHIFF: Well, there are really two ways the FBI is supposed to be communicating with us on this. The first is in the Gang of Eight, the select members of House and Senate that work on these issues, and we`re supposed to get a quarterly counterintelligence briefing where the FBI sits down with us and says these are the cases we`re looking at, these are the investigations we`re doing, you need to know about these, these are of national significance.

That hasn`t happened, hasn`t happened in the past, isn`t happening now. Not on I think what the most significant potential counterintelligence investigation of the modern era.

More than that, when the intelligence committee is doing an investigation and here on a bipartisan basis, we agreed to do this investigation, we have a detailed scope of investigation now that`s signed by the chairman and I.

We bring the director in, we`re doing our work, we`re asking pertinent questions about that investigation and the answers we got today from the director were, "I won`t answer that, I won`t answer that, I won`t answer that." And that`s --

MADDOW: And to be clear, this is speaking in a closed setting. This is not like there are reporters there and they don`t want this to leak. This is in -- this is behind closed doors?

SCHIFF: Oh, absolutely. Closed session and a hearing on the subject of the investigation.

MADDOW: What`s the basis for saying no to you?

SCHIFF: Well, I don`t want to characterize the director`s response. But I did endeavor to find out is this his position. Is this a position dictated by the Department of Justice? And I have to say I couldn`t clearly establish what part of this was the direct decision, what part of this is operating on the department`s decision or its interpretation of department`s decision. It wasn`t very clear.

But what was clear is, we can`t do our job if that`s going to be the FBI`s position. We can`t become the FBI. We need to know what have they investigated? What leads have they chased down? What have they not chased down? What more has to be done? How adequate is what they`ve done already?

If we`re going to tell the American people we`ve done a thorough incredible job, we need that information. More than that, if there`s a compromise somewhere, we need to know so we can protect the country.

We aren`t prosecutors. We`re not trying to be. But our job is to determine, is our administration or anyone else compromised in a way that threatens our national security?

We know Russia is trying to undermine our democracy. We know they`re trying to undermine our allies in Europe right now, and we need to know exactly what they`ve done and we need to know the FBI`s cooperation to do that. Today, the director wasn`t willing to give us that full cooperation and that has to change.

MADDOW: And the remedy to that is to subpoena the FBI, to try to compel them to give more information than they have so far been willing to give?

SCHIFF: Well, that is one remedy. You know, I hope that the director will go back for further consultations with the department and the next time he comes before us -- which I hope will be very soon -- he comes back with a different attitude or a different policy. But if this persists, I don`t really see what option we have left but to subpoena the director.

It`s not that there was a claim of executive privilege or anything like that. There wasn`t. So, I think this is a discretionary decision either on his part or the department`s part. And that is, I think, a poor exercise of discretion and one that just cannot persist.

MADDOW: May I ask -- I want to ask your advice on -- your take on something and if you feel like it`s outside your scope, I will respect it. But I mentioned there, that in the last segment, that reportedly, according to "The Wall Street Journal," Jeff Sessions, his particular contacts with the Russian government were under investigation by the FBI, at least for the last few months, which would mean if that`s true, that the FBI was aware he had had undisclosed contacts with the Russian government and that he had not told the Senate about them when they were asking him direct questions about that during his confirmation hearing.

Apparently, the FBI knowing that decided not to disclose it to the Senate which then voted on him to become the top law enforcement official in the United States.

Would it have been appropriate for the FBI to advise the Senate that they knew about those contacts that he wasn`t disclosing, that they knew that he had lied to them?

SCHIFF: Well, here`s the issue and I can`t comment on what particular counterintelligence investigation may or may not have been going on. But here`s the issue for the FBI: if they`re doing an investigation anyone that may join an administration or not, it -- let`s say a criminal investigation or counterintelligence investigation, they -- their priority is often developing the facts to prosecute someone. And their concern sometimes that they will jeopardize the prosecution of someone if they share information with Congress, with the administration or anybody else.

But our priority in Congress, frankly, is the protection of the country --

MADDOW: Yes.

SCHIFF: -- is our national security interests. That has to trump in a same way when we capture terrorism suspects, the information we need to gather from them takes priority, intelligence we need to gather from them takes priority over their prosecution. Similarly here, the priority for the FBI has to be protection of country first and prosecution second.

MADDOW: Yes. And after the Clinton disclosures during the campaign, that`s all the more stark.

Congressman Adam Schiff, ranking Democrat on House Intelligence -- thank you, sir.

SCHIFF: Thank you.

MADDOW: Thank you.

All right. We`ll be right back. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Behold. You own this. This is a U.S. Navy aircraft carrier. In fact, it is the single most hyped aircraft carrier in the world. It can travel at speeds of more than 30 knots, which is really fast for something that big. It can operate for two decades without having to stop and refuel. It has electromagnetic launch systems for launching jets and drones.

It`s kind of a beast. At least it will be if it ever actually gets finished. In addition to being the most hyped warship in the world, the USS Gerald R. Ford is also known as the most expensive ship in the world and the most ostentatiously unfinished one.

Construction on this ship began in 2005 -- 2005, 12 years on and nearly $13 billion later, it`s still not ready. Senator John McCain has called it, quote, "One of the most spectacular acquisition debacles in recent memory."

In 2013, the Government Accountability Office called -- just slammed it, citing, quote, "inefficient out-of-sequence work driven largely by material shortfalls, engineering challenges and delays, developing and installing critical technology systems."

The USS Gerald R. Ford is neat, but it is broadly considered to be a case study for the pitfalls of massive mismanaged military spending. And so, what better place for the president to announce his huge new increase in the military budget than on board the USS Gerald R. Ford.

The new president wearing a hat, calling today for one of the largest defense spending increases in history on board a ship that serves as the textbook picture next to the entry about the failures and embarrassment associated with unfocused massive military spending, right? On any other day, this would probably be the big story of the day.

But, today, of course, the attorney general recused himself from investigations into the president`s contacts with Russia during the campaign and with the possibility of a special prosecutor taking over the investigation, there may be a more pressing historical reference at hand when it comes to the USS Gerald R. Ford.

President Ford was one of many modern presidents to have a special prosecutor assigned to investigate him. In his case, allegations of him misusing campaign contributions. It was 1976, he was running for reelection. Election was actually only a few weeks away. These allegations arose, the attorney general and deputy attorney general recused themselves from the case. They passed it to a special prosecutor who has left over from the Watergate scandal.

That special prosecutor looked into it and decided there`s nothing here. Dropped the case. Cleared Ford of any wrongdoing and did it without much fanfare. He was praised by the Ford administration who he was investigating for conducting the investigation in the most discreet fashion possible. And then, President Ford went on to lose the election anyway.

But as the current administration begins to read the some new ground here, it turns out there is a lot of precedent, way more precedent than you`d expect for what`s happening right now and what is about to happen next. And Michael Beschloss is here with us on that next.

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ERIC HOLDER, FORMER U.S. ATTORNEY GENERAL: Oh, I think that`s the right decision given his position in the campaign and the need for the American people to think that the investigation I think has to take place about possible connections between the Trump campaign and people in Russia, has to be has to be done impartially, has to be done fairly, has to be done thoroughly. I think his decision to recuse himself was appropriate.

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MADDOW: Obama Attorney General Eric Holder today talking about the decision about the current attorney general that he will recuse himself from investigations involving ties between Russia and the Trump campaign of which Attorney General Sessions was a big part.

Joining us now is NBC News presidential historian Michael Beschloss.

Michael, it`s nice to have you with us tonight. Thanks for being here.

MICHAEL BESCHLOSS, NBC NEWS PRESIDENTIAL HISTORIAN: Thank you, Rachel.

MADDOW: So, looking at this in the historical context, did the attorney general have any choice at this point but to recuse himself? I`m struck by the fact that even just in the very recent, very tiny history of this existing administration, we`ve got the national security adviser, Michael Flynn, being fired for denying and lying about his contacts with Russia, Attorney General Jeff Sessions just recusing?

BESCHLOSS: He should have done it a long time ago. It shouldn`t have taken the controversy today to take him do that because, you know, it`s just logic. How could he possibly be expected to lead an investigation into his boss who can fire him?

MADDOW: In terms of what happens next here, lots of presidents, more than you would think, have had special prosecutors brought on at some point or another because for whatever reason, the attorney general, the deputy attorney general, had to take themselves out of the mix, a special investigator, a special prosecutor is brought in.

Is it always an earth-shattering thing, is it always, you know, the end of a presidency or potential end of a presidency when something like that happens, or is it a fairly run of the mill procedure?

BESCHLOSS: No, it was -- you know, usually or oftentimes, it`s been sort of like you mentioned with Gerald Ford, a special prosecutor was appointed, cleared him of the charge. Ford lost the election of `76 but pretty came close. One of the reasons was because he didn`t have to labor under that charge.

There was a law that was passed in 1978 that said that if there`s a serious charge of a federal offense against a president or someone who is a high official, the attorney general goes to a three-judge panel, they appoint a special prosecutor and, you know, essentially the person charged has the chance to clear his name. All the way from the time of Richard Nixon, all the way through Bill Clinton, there were special prosecutors appointed obviously that dealt with things like Iran Contra and the Monica Lewinsky episode under Bill Clinton, but also things that were smaller. The act generally worked but was allowed to expire in 1999. So, it hasn`t happened seriously since then.

MADDOW: And because that was allowed to expire, the process now of picking a special prosecutor, if that`s going to happen, obviously maybe the deputy attorney general will take this over. We only have an acting one right now. One has been nominated to be the new deputy attorney general.

But if they wanted to bring in a special prosecutor, they`d essentially just pick somebody?

BESCHLOSS: They would and that`s why the old process was so much better.

MADDOW: Yes.

BESCHLOSS: The Trump administration, especially the last few days, has been very hands on in choosing deputies in these departments that are very loyal to them. There`s a very good chance that with Attorney General Sessions recusing himself goes to a deputy, how are we sure that that deputy is also going to be independent of the White House?

MADDOW: Michael Beschloss, NBC News presidential historian, raising very difficult questions tonight. Michael, thank you for being here.

BESCHLOSS: We will see. My pleasure.

MADDOW: All right. At the top of the show, we had some breaking news tonight, some exclusive news out of the Department of Homeland security. A leaked report that we received that maybe a stake in the heart of the Muslim ban. We`ve got reaction from one of the people smackdab in the center of that fight coming up.

Stay with us.

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MADDOW: So, we started the show tonight with some exclusive breaking news. This intelligence document we obtained exclusively. It`s from the intelligence office at Homeland Security. It`s titled, "Most foreign-born U.S.-based violent extremists likely radicalized years after their entering homeland. We assess that most foreign-born U.S.-based violent extremists likely radicalized years after their entry into the United States, thus limiting the ability of screening and vetting officials to prevent their entry because of national security concerns."

So much for extreme vetting, right? Which was the justification for the new president`s travel ban and Muslim ban. The White House keeps pushing back the expected time when the president will sign a new version of that ban. Maybe that`s because the rationale for the ban is falling apart, even from inside their own government.

Joining us now is Lee Gelernt. He`s the deputy director of the Immigrants Rights Project at the ACLU.

Mr. Gelernt, thanks for being here.

LEE GELERNT, ACLU CIVIL RIGHTS ATTORNEY: Thanks for having me.

MADDOW: So, you got a chance to look at this a little bit.

GELERNT: I have.

MADDOW: I know you haven`t had a lot of time with it.

Are you surprised to hear -- to hear this argument from career intelligence officials?

GELERNT: You know, I am and I`m not. We went into court and we had declarations from former intelligence people, high-ranking in both administrations saying, look, this is not going to make us safer. In fact, it may make us less safe.

We went into court with that and the courts said, that`s interesting all these people are saying it, and turned to the government and said, where is your evidence? The government said, we don`t have any evidence.

But now it turns out, not only do they not have any evidence, but their own intelligence officials are saying, no, this ban won`t work.

So, it`s like both sides are reaching the same conclusion yet I suspect they are going to go in and litigate and say, we need this ban for national security reasons.

MADDOW: I know you`re not a judge on any of your own cases.

GELERNT: Right.

MADDOW: But since Department of Homeland Security authenticated this and told us this is a real report tonight, does that mean that this may end up being evidence? That this may end up being --

GELERNT: Oh, I think you`ll absolutely see this being put into court. And I suspect the administration will try and counter it and there was a time when they`re saying, well, this is only one agency or one part of one agency. As you said earlier in your show, no, it has other agencies on it. I suspect you will absolutely see this in court.

MADDOW: In terms of the status of the Muslim ban right now, they told the ninth circuit, we`re rescinding it. We`re going to issue it any day now. Any day now, any day now, any day now. And they keep putting that off.

Obviously, they`re impaired by trying to do this because the basic constitutionality of this idea is a great question.

GELERNT: Right, right.

MADDOW: Do we expect that we will ever see a replacement one from this?

GELERNT: You know, I really don`t know. But what I do know is the longer their wait, it`s harder for them to come in and to say to court, we desperately need you to let this ban going play because we`re urgently needing for national security reasons, we need this ban.

Well, every day they delay, it puts the lie to this ban is critical for our national security. And in fact, this week, they delayed for what seemed like political reasons. So, if they really genuinely believe the ban was necessary for national security reasons, you would have thought you have seen the revised ban much sooner.

MADDOW: And I`m not a lawyer, but my reading of the way these arguments have gone so far, as part of the reason that they`ve told the courts, that the courts have to defer to the government on this, is that courts owe deference to the executive, specifically on national security matters and especially on national security urgent matters. That`s when the court is at its weakest in its ability to stop the president from doing something.

GELERNT: Right. Right.

MADDOW: So, every time they sort of give lie to that, it hurts their ability to stand this up.

GELERNT: Exactly. The longer the delay, but also, now, with their own officials saying -- they want to ask for deference to their own officials but yet now, their own intelligence officials are saying, maybe the ban is not really what we should be doing.

MADDOW: Yes, and having to leak it to the press in order to get it out there.

GELERNT: Right.

MADDOW: Lee Gelernt, deputy director of the Immigrants Rights Project at the ACLU -- Mr. Gelernt, thank you. Appreciate you coming in on short notice.

GELERNT: Thank you so much. Thanks for having me.

MADDOW: All right. That does it for us tonight. We will see you again tomorrow.

Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL".

Good evening, Lawrence.

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

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