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The Rachel Maddow Show, Transcript 3/14/2017

Guests: David Cay Johnston

Show: The Rachel Maddow Show Date: March 14, 2017 Guest: David Cay Johnston

CHRIS HAYES, "ALL IN" HOST: So without further ado, I pass the baton to my friend and colleague, Rachel Maddow.

Your show starts now. Good evening, Rachel.

RACHEL MADDOW, MSNBC HOST: Good evening, Chris. It`s been a hullabaloo around here. I apologize for being flustered.

HAYES: People literally were tweeting at me, "Shut up, get to Rachel."


MADDOW: Well, you can`t before 9:00 because I`m not sitting here until 8:59:58.

HAYES: I`m going to go watch.

MADDOW: Thank you, Chris. Appreciate it.

And thanks to you at home for joining us for the next hour.

You may have heard we`ve got some significant breaking news tonight. Donald Trump`s tax returns have surfaced -- at least a portion of Donald Trump`s past tax returns.

What we have tonight has been turned the over to a reporter. These are returns for one year. It`s a federal return. This is the first time we believe any federal tax returns for Donald Trump have been obtained by anyone, certainly by any news organization since he became a presidential candidate let alone president.

I want to tell you that the way we got this document, the way we got this Trump tax return is through David Cay Johnston, David cay Johnston is a Pulitzer Prize-winning investigative journalist. He`s a specialist on tax issues and financial reporting. David Cay Johnston and his reporting shop (ph),, that`s who obtained this return.

And tonight, we have their first look at what they`re they have obtained. In just a second, we are going to show you exactly what it is we`ve got. We`re going to walk through it with David cay Johnston. We`re going to get context on it. We`re going to get some explanation of what it means. Importantly, we`re going to get explanation and discussion about what further avenues for reporting this may open.

But let me tell you first that part of what`s very important about this story, about this new document we`re able to bring into public discussion, part of what`s most important about it is that for some reason that we cannot discern, this document has been made available. This document has surfaced. It has been handed to a reporter and that`s an important part of this story. That may be the most important part of this story.

When Donald Trump declared as a presidential candidate that he would not release his tax returns, he became the first president since the Watergate era to refuse to release his returns. When Richard Nixon said, "I`m not a crook", he wasn`t talking about Watergate. He was talking about his taxes.

And, in fact, he was kind of a crook in his taxes. He handed them over in 1973. In April, 1974, the IRS ordered him to pay almost a half million dollars in back taxes because, in fact, President Nixon had taken improper deductions and he hadn`t paid enough. I mean, that was the least of his problems in the end but that was, in fact, one of his problems. And presidents and presidential candidates have released their taxes ever since.

Donald Trump`s opponent in the presidential campaign this past year, Hillary Clinton, she released every year of her tax returns back to 1977. But Donald Trump refused to release any. He made history by insisting that he would not, that indeed he could not release his tax returns.

And it never much made sense on factual grounds. When candidate Donald Trump said he would love to release his tax return but he couldn`t because his tax returns were under audit, that never made sense because even the initial precedent for presidents releasing their tax returns, even Richard Nixon, was under audit when he released his tax returns and since we later learned he was cheating on his taxes, it seemed like that was an audit well spent.

The IRS has let it be known that there`s no legal reason why somebody under audit can`t release their taxes. And, in fact, since Watergate, every single president and every single vice president has been audited by the IRS every year of their time in office. And they all still routinely release their tax returns to the public every year. So, that excuse from Trump and the Trump campaign, it never made sense. Being under audit is not excuse for not releasing your tax returns as a candidate or certainly as president.

Also, the audit excuse never made sense for his past tax returns. I mean, even if Donald Trump wanted to release nothing under current audit -- well, what about years for which the audits are completed and closed? I mean, any year of his taxes before, say, 2008, any year that was audited before then, those years would presumably be done being audited by now. Those would be closed. So, why not release those earlier tax returns even if you don`t want to release the current ones for which there isn`t really an excuse not to do anyway?

Whether or not you are a supporter of Donald Trump in general, whether or not you care what`s in his tax returns, it ought to give you pause that his explanation for why he couldn`t release them, why he has to make history by being the first person in decades to hold this office without releasing them, it ought to give you pause that his explanations have never made any factual sense.

I mean, think about it. The "I`m under audit" excuse makes no sense. And if the "I`m under audit" excuse doesn`t make any sense, then what does explain why the president hasn`t released tax returns?

When you get an excuse from them that doesn`t make sense, you have to look for another reason. All right. The stated explanation here makes no sense. What`s the real explanation?

Well, choose your own adventure.

Here`s an example. This is a home that Donald Trump purchased for just over $40 million in 2004. Less than four years later, a Russian oligarch paid him almost $100 million for that same house.

Could Trump tax returns shed light on whether any reasonable outlay of expenses on Trump`s part might explain why somebody would suddenly want to pay Donald Trump more than double what he paid for that property after only a few years, at a time when housing prices were dropping and not rising? I mean, if this wasn`t just some Russian oligarch dumping almost $60 million into Donald Trump`s pocket for no discernible reason, couldn`t Trump tax returns clear that up? Wouldn`t Trump`s taxes show whatever reasonable real estate inflow and outflow might explain what otherwise really does look like a bizarre dump of tens of millions of dollars of Russian money into Donald Trump`s coffers? Right at a time when Donald Trump owed tens of millions of dollars to Deutsche Bank and Deutsche Bank was breathing down his neck to get it?

That Russian oligarch who spent that money on that property and never moved into it and ultimately tore it down, he`s also a large shareholder in a bank called the Bank of Cyprus, which has been implicated in Russian money laundering. The chairman of the Bank of Cyprus is the former CEO of Deutsche Bank, to which Donald Trump owed all that money at the time he conveniently got this very large influx of cash from a Russian guy. The vice chairman of that bank until recently was our new secretary of commerce, long time Trump friend, Wilbur Ross.

Couldn`t the tax returns sort this out for us?

If there are inexplicable dumps of foreign money into the president`s coffers that cannot be explained in normal business terms, that`s potentially a huge problem for somebody who`s serving as president of the United States, right? I mean, the interest in Trump`s tax returns is not a picayune thing. It`s not a partisan thing.

If people, if interests have inexplicably given him a lot of money in recent years, why did they do it? What do they want for that money now? Is the president in a position where we need to watch to make sure he is not paying off his past benefactors with our country`s resources, with U.S. policy, with decisions he can make as president? That`s part of why we need to see his tax returns.

And I raise this issue of this particular Russian oligarch, Dmitry Rybolovlev, I`ve been practicing, Rybolovlev. Rybolovlev. Rybolovlev? Rybolovlev.

Dmitry Rybolovlev, the guy who paid Trump all that money for that house. I raise him only as an example because we haven`t had any meaningful financial disclosures, any tax returns from the president, and because of that, this Russian oligarch is one of the continuing sources of intrigue about whether our president now has foreign ties that could conceivably be motivating his actions as president. And I say it`s ongoing concerns because it`s ongoing concerns. It`s not just interesting stuff that happened in his past that we have to worry about in the past. I mean, during the presidential campaign, Dmitry Rybolovlev`s private plane was spotted at least twice at local airports when Donald Trump campaign events were happening nearby.

At least once, his private plane was spotted on the tarmac right alongside Donald Trump`s private plane while Donald Trump was doing a campaign even. Rybolovlev insists to us that that is a coincidence. But tonight, the "Palm Beach Post" reports that this weekend, Rybolovlev`s yacht was parked alongside the yacht that`s owned by Robert Mercer, who is the single largest financial backer of the Trump for president effort, the single largest financial backer of Breitbart and the person who basically installed both Kellyanne Conway and Steve Bannon at the top of the Trump campaign after Paul Manafort was fired for his ties to Russia and Ukraine.

Dmitry Rybolovlev denies to us tonight that he has had anything to do with Robert Mercer or with Donald Trump other than paying him almost $60 million over the price Trump paid for that house.

But once you`re the president of the United States, the people of the United States need to know if you`ve got significant unexplained sources of income, particularly of income that has a foreign origin. Hence the need to see Trump`s tax returns. Hence the appetite for it.

Has he received money from foreign sources? Has he received loans from foreign sources?

One of the things you have to declare on your U.S. federal taxes is whether you have paid taxes in foreign countries. Does the president have foreign bank accounts? If so, which banks?

The more I know about the Bank of Cyprus, for example, the more I want to know about whether there are other ties, other Trump ties to that troubled bank aside from his hand-picked commerce secretary and the guy who inexplicably paid him that money for that house and the newly installed chairman from the bank that holds more of his debt than any other financial institution.

When the Trump administration, when the president and his attorney general inexplicably moved on Friday to fire all of the U.S. attorneys, all of a sudden, on Friday, no warning, "get out, you`re done by midnight" -- the Preet Bharara firing in New York was of note and particular concern because President Trump and Attorney General Jeff Sessions had both previously told Preet Bharara he could continue to hold that job. It is a particularly newsworthy firing that they did an unexplained U-turn on that because of Bharara`s jurisdiction.

Bharara`s office is pursuing a federal case against Deutsche Bank for Russian money laundering. That office also has jurisdiction, geographical jurisdiction over Trump Tower and the Trump Organization. Ethics watchdogs last week wrote to Preet Bharara, asking him to investigate whether the president was receiving money from foreign governments through his business, through the Trump Organization. If he is receiving any income that originates with foreign governments, that would be unconstitutional.

Two days after receiving that letter from those ethics watchdog groups asking him to look into that possibility, Preet Bharara was told to resign. The day after that, after he refused to resign, he was fired.

I mean, these are the reasons people want to see his tax returns. What is his relationship with Deutsche Bank? What is his relationship with foreign sources of income? Is he receiving any money through his business from foreign sources? Is he receiving any money through his business or through any of his real estate deals that can be traced back to foreign governments? I mean, his tax returns should show any income he has received from investment partnerships.

This strange-shaped building was a Trump project in Azerbaijan where the Trump Organization partnered with family members of a notoriously corrupt Azerbaijani government official who also has had business ties to the Iranian Revolutionary Guard.

The president`s tax returns are of interest because if he has received income from foreign sources, as he did in that Azerbaijan deal, the origin of that income may have national security implications. If by any chance it follows those same contours back to the Iranian Revolutionary Guard, which is a sanctioned organization in this country because of its links to global terrorism.

The unanswered questions around Michael Flynn, the fired former national security adviser. He last week retroactively registered as a foreign agent. He declared retroactively that he worked during the campaign and during the transition as a lobbyist for the interests of the government of Turkey.

We still do not understand why the Trump administration hired him to be national security adviser after they were advised that he was working for a foreign power. We still do not understand their cageyness around Flynn and his firing. Why, for example, the White House said they fired Flynn because he lied to the vice president but they didn`t fire him until almost three weeks after they learned about those lies?

We still have no idea why the vice president says he was completely unaware that Flynn was on the Turkish government payroll. Because he, as head of the transition, was repeatedly notified about it, including by Flynn`s own lawyers, so why would he say now that he had no idea, he`d never heard of it until this past week?

What explains the Trump administration`s cageyness around Michael Flynn and specifically around Michael Flynn`s financial ties to Turkey? Well, you know what? It would be helpful to see the tax returns.

I mean, what kind of income as Trump Towers Istanbul provided to President Trump through his business? Is any of that income for the president from the Turkish government? Did Turkey have a financial relationship with the president? Do they continue to have a financial relationship with the president? Is there anything about the president`s financial and business entanglements that is potentially driving presidential actions around the issue of Turkey, the unexplained questions and cageyness that is yet to be explained around the issue of Michael Flynn and his firing?

There are definitely personality-driven and petty reasons to seek the president`s tax returns. Is he not as rich as he says he is? Is he not as charitable as he says he is?

Was he, in fact, under audit when he was using that as an excuse to not release his tax returns? Was that worse than just a bad excuse? Was he really being audited?

There`s small reasons to be interested, right? But whether it`s for small reasons or big reasons, there has been an unrelenting demand by people to see his tax returns. More than a million people have signed a White House petition demanding that he release his tax returns. In 19 states, legislation has been now filed that would keep him off the ballot in 2020 unless he releases his tax returns before the reelection campaign.

On tax day this year, next month in Chicago, activists are raising money right now to fly a 16-foot inflatable chicken with Trump`s hairdo over their Tax Day protest as a helium balloon. They`re demanding that the president stop being so chicken about releasing his tax returns.

Literally today in Missouri, these protesters were outside Senator Roy Blunt`s office demanding that the president release his tax returns. That sign in the front there says, "Is your refund listed in U.S. dollars or in rubles?"

There`s a reason that people unrelentingly want to see his tax returns. There`s a reason there are decades of precedent for presidential candidates all releasing them. There is genuine curiosity as to whether they will bear out what he has said about himself in terms of his income.

Honestly, there`s genuine concern as to whether he will pursue tax policies that are designed to personally benefit himself and his family -- which we won`t know about until we`ve seen his tax returns.

There are also concerns just about bookkeeping. There`s reason for concern about whether in his FEC financial disclosure form, which is all we`ve got from him, there`s reason for concern, reasons -- there are indications in the paperwork that he may have given wildly inflated valuations of the worth of his golf course properties abroad, when you compare what he said in the FEC document versus tax filings he made on his properties in the U.K. where he declared them all as losing money. Incidentally, lying to the FEC is a crime for which you can go to prison for five years.

But with all of that, the concerns about whether he`s going to be self- dealing in his tax policies, concerns about whether he might have lied or misrepresented his own financial circumstance during the campaign, concerns about whether or not he might have misstated things to the FEC -- with all of that, there looms over all of this the big national security worry, right? The big almost existential worry, the greatest concern, the worry that this president may be financially beholden to an individual, to an institution, to a country. And now that he`s president, we won`t know if he tries to use the resources and power of our country to pay off that entity to whom he is beholden.

We can`t know any of that without getting his tax returns. That`s why presidents release their tax returns. That`s why there will continue to be unrelenting pressure to find Donald Trump`s tax returns, to expose Donald Trump`s tax returns, and that pressure will remain every single day that he remains as president. Unless and until he releases them, the pressure will never let up.

And that`s why somebody has decided to leak a portion of his 2005 tax return, which is how and why we got it tonight. And I`m sure it`s only the start but it`s a start and our little piece of it, we just got it. We`ll go through it, next.


MADDOW: What I have here is a copy of Donald Trump`s tax returns. We have his federal tax return for one year for 2005. I believe this is the only set of the president`s federal taxes that reporters have ever gotten ahold of.

What we have are these two pages, front and back, from the same 1040 form that you might have filled out when you file your taxes. In terms of what`s on here, let me give you the basics.

Aside from the numbers being large, these pages are straightforward. He paid $38 million -- looks like $38 million in taxes. He took a big write down of $103 million, more on that later.

If you add up the lines for income, he made more than $150 million in that year, mazel tov.

We got these pages, we got this document today from a Pulitzer Prize- winning investigative journalist who`s better on financial matters than almost anybody else in the business. His name is David Cay Johnston. These pages turned up the other day in his mailbox. David will join us live here in just a moment.

But because nobody has had the president`s taxes before, we didn`t know what to expect when we showed this 2005 return to the White House to ask them if it`s real. We sent this over to the White House tonight and the White House responded basically with "Yup."

I`m going to read you the White House statement on this tonight. Quote, "Before being elected president, Mr. Trump was one of the most successful businessmen in the world with a responsibility to his company, his family, and his employees to pay no more tax than legally required. That being said, Mr. Trump paid $38 million even after taking into account large-scale depreciation for construction on an income of more than $150 million, as well as paying tens of millions of dollars in other taxes such as sales and excise taxes and employment taxes and this illegally published return proves just that. Despite the substantial income figure and tax paid, it is totally illegal to steal and publish tax returns.

The dishonesty media can continue to make this part of their agenda, while the president will focus on his, which includes tax reform that will benefit all Americans."

White House statement for tonight.

For the record, the First Amendment gives us a right to publish this return. It is not illegally published. Nor are we fake. Pinch me. I`m real.

But good on the White House for acknowledging the return as proof of what the president made and paid that year.

Here`s the thing, though. A full tax return for someone like Donald Trump would be a lot longer than two pages that we have here. There are all kinds of schedules and notes and attachments that could be involved all containing information about the president and his money.

Why will he not release his taxes, his full taxes the way other presidents have done? Why not let the public see the information for themselves?

We have obtained this, but this is all we`ve got. This tells us something but he still has disclosed, apparently willingly disclosed nothing compared to all other modern presidents.

Joining us is David Cay Johnston. He`s editor and founder of, which has posted this document as of a few moments ago. He`s also the author of "The Making of Donald Trump" and the Pulitzer Prize-winning financial reporter who found the president`s 2005 returns in his mailbox.

David, thank you for being here.


MADDOW: First of all, congratulations on this scoop.

What can you tell us about how -- how you got these pages? How you got this document?

JOHNSTON: Came in the mail over the transom, and there is absolutely nothing improper about journalists if you haven`t solicited something, getting it over the transom.

And, by the way, let me point out, it`s entirely possible that Donald sent this to me. Donald Trump has over the years leaked all sorts of things. The very sleazy girl-on-girl pictures of the first lady in the "New York Post" may have come from Donald. The front pages of the state tax returns that we had that were sent to the "New York Times" and the "New York Daily News" last fall may have come from Donald.

Donald has a long history of leaking material about himself when he thinks it`s in his interests.

MADDOW: Do you believe -- do we have reason to believe that those documents you just described there were leaked by him or is it just a possibility?

JOHNSTON: It`s a possibility and it could have been leaked by someone at his direction.

MADDOW: Uh-huh.

JOHNSTON: But with Donald, you know, you never know. Donald creates his own reality and he says things that aren`t true. He says things and then denies he said them. He lives in this world that isn`t the world of you -- where you and I live, of verifiable facts.

So, yes, I think I have to include that in the list of possibilities where it came from.

MADDOW: Uh-huh. When you look at this document, when you look at these numbers, obviously, we don`t have the supporting schedules and the sort of appendices that you get in big tax returns. Do these numbers seem right to you? Obviously, the White House statement to us is reiterating the $150 million income number and the $38 million paid number.

Those numbers seem right to you?

JOHNSTON: Yes. And they fit the things we know from other public records about how Donald does business. For example, the dividends he gets are primarily not what are called qualified dividends that suggest they come from not big companies like ExxonMobil but privately held enterprises.

They show almost no tax-exempt interest, about $49,000. That would imply at the time maybe $900,000 of municipal bonds. Not much -- I mean, lots of college professors out there my age who have $900,000 in municipal bonds.

What`s most important about this tax return, though, Rachel, is that under the regular tax system -- when we have two tax systems, well-to-do people, you and I, file -- effectively calculate our tax twice, the regular tax system and the alternative minimum tax. If we didn`t have the alternative minimum tax, and Donald Trump in writing wants to end the alternative minimum tax, he would have paid taxes at a lower rate than the bottom half of taxpayers, the poor in this country who make less than $33,000.

Now, think about that, $153 million almost of income, he would have paid a little over $5 million, less than 3.5 percent, less than the half of taxpayers who make under $33,000. As it is, because of the alternative minimum tax, he paid $36.5 million, not the $38 million the White House statement says. They`re counting his self-employment tax which is payroll taxes.

MADDOW: Uh-huh.

JOHNSTON: Thirty-six and a half million, he paid 24 percent. You know who pays 24 percent in this country? Married couples with two incomes like my wife and I who make about $400,000 a year. Donald Trump and his wife that year made $418,000 a day.

And the point of this is -- the top in this country, people at the top, are not burdened the way we suggest. I was in --

MADDOW: Let me stop you and let me restate some of that back to you because you`re a tax expert.


MADDOW: And those of us who just pay taxes and aren`t experts in them, I want to say back to them and you tell me if I`m getting it right.

If there weren`t the alternative minimum tax -- you can tell from this 1040, from his two pages from his tax return in 2005, if there weren`t an alternative minimum tax he`d be paying what percent?

JOHNSTON: It`s right on line 44. He would have paid $5.3 million, which is 24 percent of his $152.7 million of positive income. And that`s in large part because he was able to say he had negative income of $103 million.

MADDOW: OK. So, because he -- because there is an alternative minimum tax --

JOHNSTON: They disregarded most of the negative income.


JOHNSTON: He had to pay taxes -- he had to pay more in taxes but he still got a benefit. You know why? Because at the top, people are supposed to be paying 35 percent that year, 39.6 percent this year. But if you`re in the alternative minimum tax, you only pay 28 percent.


JOHNSTON: That`s a 20 percent discount on your taxes. Would you like a 20 percent discount on your taxes? That`s what Donald Trump got here.

MADDOW: So the issue that -- I mean -- I tried to lay out at the top of the show reasons why people are so interested in his tax returns. The White House has made this issue and saying it`s only reporters who care, people don`t care, this was litigated in the election when he didn`t release his tax returns and people voted for him anyway.

There are a number of reasons to be interested in his tax returns and I think a number of reasons why people continue to be.

JOHNSTON: And most importantly, what we don`t have here, which is this describes the types of income but not the sources.


JOHNSTON: That`s what we need to know.

MADDOW: We need --

JOHNSTON: Who is the president getting money from?

MADDOW: Well, we need to know: (a), sources of his income, whether or not he`s beholden to somebody. We also need to know whether all the things he said about himself and his wealth and his charitableness and all those things are true. But we also need to know if he is going to take actions as president in terms of tax policy that are going to benefit him.

And you`re saying --

JOHNSTON: Or benefit his benefactors.


JOHNSTON: Yes. And this is a very complicated tangled issue.

I mean, here`s a simple question to ask. Every other president has released his tax returns. We have Hillary Clinton and Bill Clinton`s tax returns back to the 1970s. Why is it that Donald Trump is so insistent that we`re not to see his tax returns? What -- there must be something hiding in his returns.

I`ve been at this for 50 years. I started as a teenager doing investigative reporting. And every time some high-level politician wants to hide something, it always turns out there`s a reason. They`ve got something to hide.

I have -- lots of things we can think of that Donald Trump has to hide, including sources of income and his connections to the Russian oligarchs who are essentially, Rachel, a state-sponsored network of international criminals. And you`ve got to think about them that way and understand that`s their position in the world.

And Donald Trump really is desperate that we don`t see where his money comes from. And this is a man who we know was very deeply involved with one of the biggest drug kingpins in America, in the 1980s. He risked his casino license just to show his loyalty to that man.

He did business with the biggest mobsters in New York. For years, he traveled with a -- the son of the head of the reputed Russian mob boss, himself a twice convicted felon. He says, "I wouldn`t know if he was in the room" -- even though they were together all the time traveling.

And many other criminals he has associated with them throughout his life.

So, it`s particularly relevant for us to say, where did you get the money?

MADDOW: David Cay Johnston is the editor and founder of He`s the one who obtained this Donald Trump tax return 2005. David, can you stay with us for a moment?


MADDOW: We`re going to bring Chris hays into the discussion and I want to get back to the issue about the sources of Trump`s money and also the source of this document tonight. We have published this 2005 tax return from the president on We`ve also linked to David Cay Johnston`s extensive reporting on this on David is back with us in a moment.

Stay with us.


MADDOW: This is Republican Congressman Steve Knight. Mr. Knight has represented California`s 25th district since 2015. Here`s Congressman Knight addressing his constituents at a town hall just over a week ago.


REP. STEVE KNIGHT (R), CALIFORNIA: I believe that President Trump should release his tax returns.



MADDOW: I believe that President Trump should release his tax returns. Crowd goes wild.

You can see Congressman Knight`s constituents very happy with that answer. Americans overwhelmingly tell pollsters now that President Trump should release his tax returns.

I should mention, though, three days after Congressman Steve Knight said that to his constituents at that town hall in his home district, three days after that, he voted against forcing Donald Trump to release his taxes.

Congressman Knight was one of 226 house Republicans who voted in favor of keeping Trump`s taxes under wraps. The only Republican to vote in favor of the public seeing Donald Trump`s tax records is this guy, Walter Jones of North Carolina, he`s the only one, the only Republican for what it`s worth.

Congressman Mark Sanford of South Carolina, he had the courage to vote present in that vote. Courage.

Over in the Senate, there have been Democratic attempts to get President Trump`s tax returns released through a vote in the Senate but Republicans have blocked those from even coming up for a vote.

Bottom line, though, tonight, we`ve got them -- at least we`ve got two pages of them from an anonymous source through David Cay Johnston at

David joins us now along with my friend Chris Hayes, host of "ALL IN".

Thank you both for being here.

David, let me ask you, in terms of what you were just describing a moment ago about the most important thing we could learn from President Trump`s tax returns, the sources of his income over the years, obviously you got this 1040 leaked to you, we`ve had a few other individual pages of state tax returns that have been seen, sent to the "New York Times," you reviewed some of that for your earlier reporting on Donald Trump and taxes from `70s.

What would we have to see? What would we hope to get in the mail if we were going to get to the meat of Donald Trump`s potential foreign financial ties?

JOHNSTON: Well, you want to see the sources of income which will be shown in his business returns. He has over 500 business entities. You want to know who the partners are in those entities and what they show about the income.

You also, by the way, want to show the interest he`s paying and the fees he`s paying to other people to know who he`s paying. I mean, we`ve talked about the income he has taking in, but what about people he`s paying?

MADDOW: Right, and you only pay interest to people to whom you owe money.


JOHNSTON: You owe money, and by the way, one of the biggest places he owes money to? The communist government of China`s Bank of China, which is also the single biggest tenant in Trump Tower.

I mean, I grew up in the Cold War. The thought that Republicans would defend the president who has been involved for 30 years with the Russians, not Russia, Russians, who are around Putin and would be borrowing money from Beijing --

MADDOW: All of which we knew before we got this tax return.

Chris Hayes, looking at this and considering the scope of this, what`s your reaction?

HAYES: So, two things come to mind. One is that actually, right, disclosure -- there`s an idea like they have something to hide because they`re acting like they have something to hide, right? Their taxes.

It`s possible disclosure could benefit them in this way one, right? There was speculation after we got the state taxes in `95 from the "New York Times" that this magnitude of the write-down could have prevented paying taxes for 18 years.

MADDOW: OK, slow down, explain that for a second.

HAYES: So, the 1995 taxes showed an enormous loss. That loss was able to be carried forward year after year.

MADDOW: He took almost a billion dollars for a real estate loss.

HAYES: That`s right.

JOHNSTON: A loss he shouldn`t have been able to take because it was the loss of the banks. He bought a tax shelter -- Republicans in Congress, as soon as they learned about it, they shut down. So, there was double deduction of that and he got the benefit as to the banks of the tax --

MADDOW: But by taking that $900 million, that set him up to essentially stack that up against income tax he might have to pay anytime for the next 18 years, and it would cancel out any income tax he had to pay.

HAYES: And again, there was speculation he had paid nothing for 18 years. Well, we have this, he paid something --

JOHNSTON: He encouraged that speculation. When Hillary Clinton said, you know, you`re not paying taxes, he said, "Because I`m smart." So, which is it? You really did pay a lot of taxes and you`re tricking us, or you`re not paying taxes?

MADDOW: Now we know, he paid over 20 percent taxes.

JOHNSTON: That`s right.

HAYES: We should note this is a man who has a fortune. The U.S. has never elected someone from private office and this kind of business dealings, and who would stand to benefit or lose from changes to the tax code that he himself was pushing, for instance, the current plan that is being floated would eliminate the alternative minimum tax, which is responsible for him paying a whopping amount of money here.

JOHNSTON: Most of the tax (INAUDIBLE)

HAYES: So that`s another reason for disclosure.

And the third thing I keep coming to is they are going to is they are going to -- April 15 is coming up. We`re going to file our taxes. Some people are going to file extensions. I presume the White House will file an extension and the reason I think they will is because they cannot use the audit argument with taxes they`re filing now.

I can guarantee you one year of Donald Trump`s taxes that are not under audit. They are the one he is would file this year. They cannot be under audit --

JOHNSTON: The ones he filed last year aren`t under audit either.

HAYES: Right. So, that argument gets thinner and thinner and thinner, and he is now reaching the frontier where it no longer is applicable.

MADDOW: The story here to me is that, (a), that we have obtained this, (b), that this stuff is obtainable.


MADDOW: There has been a lot of report -- interesting reporting recently on if you work at the IRS, it is not likely you would be able to see a return for somebody who you aren`t involved with --

JOHNSTON: The president`s tax returns are put in a special vault in the commissioner`s office.

HAYES: Really?

JOHNSTON: And if you work at the IRS and call up Rachel Maddow`s tax returns, an inspector will be at your desk like this.

You know, we`ve seen the CIA hacked. I`ll be very shocked if we see the IRS hacked. They have better system.

MADDOW: And with that knowing the security with which these things are treated, Donald Trump has been an adult and filing taxes for a very long time. And, you know, when you file for a mortgage, when you file to apply to different things, you have to show lots of tax returns. Versions of his tax returns have ended up all sorts of places, whether it`s casino license applications, personal applications of any kind, and for some reason, somebody who had access to this one wanted it to be known.

I believe this will not be the end of that.

Sit right there, we`ll be right back.

Again, tonight, we are releasing -- we have posted Donald Trump`s 2005 federal tax return. David Cay Johnston of is the man who obtained this. He stays with us as does Chris Hayes. We`re going to be joined by Michael Beschloss in a moment to talk about the historically unprecedented nature of this.

Stay with us.


MADDOW: So, we have obtained Donald Trump`s tax returns tonight, his 1040 from the year 2005, the first time his federal tax returns have been made public, have been obtained by any news organization since he is a presidential candidate, let alone since he was president. They were obtained by investigative reporter David Cay Johnston and his reporting shop

These tax returns raise very interesting questions about how much the president`s own proposed tax policies would improve his own personal bottom line. But they raise even more questions about what we haven`t yet seen.

Trump is the first president since the Watergate era to refuse to release his taxes of his own accord which makes this release -- who knows where it came from -- both an interesting news development and potentially a historic one.

Joining us now, bringing into the conversation, NBC News presidential historian, Michael Beschloss.

Michael, thank you for coming on the show tonight on short notice. We really appreciate you being with us.

MICHAEL BESCHLOSS, NBC NEWS PRESIDENTIAL HISTORIAN (via telephone): Thanks, Rachel. Nice to talk.

MADDOW: So, I tried to sum up why the release of presidential tax returns has become such a mainstay of our politics. Why did it start with Nixon? Why has it stayed important since them?

BESCHLOSS: Well, in the time of Watergate, Richard Nixon got into big trouble because it emerged he had backdated the gift of his vice presidential papers and taken a deduction for that, which was illegal. There were a lot of other things happening at Watergate but that was one of them.

And the result was people said, "Gee, it must be pretty important that in the future we looked at the president`s tax returns", and as you`ve said since the time of Jimmy Carter, every single president has released his tax returns every single year and there`s a reason for that. You know, the reason is so that you don`t have a lot of mystery about possible sources and possible conflicts of interest.

In Donald Trump`s case, it makes you really wonder whether it`s worth it to him to have not released his tax returns given the kind of mystery we`re seeing culminate tonight and a lot of interest in these tax returns you`ve got.

MADDOW: Michael, one of the issues that Trump himself has raised when he has been repeatedly and repeatedly and repeatedly asked about his tax returns. Number one, he`s said people don`t care about it, only reporters care about it. That`s not borne out by the polling data and indeed by the persistent activism around this issue.

The other issue he`s raised is, yes, yes, it`s been a tradition since Nixon, but it wasn`t before then and I want to go back to what it was like before Nixon.


MADDOW: Was there controversy around presidential taxes, around questions of self-dealing and presidential financial disclosure before Nixon that we should see as materially informing these kinds of decisions tonight?

BESCHLOSS: Not in modern times. You had something like Warren Harding at the time of the Teapot Dome Scandal, when not the president, but people around him were wheeling and dealing, and some of them got into very big legal trouble over that.

But in Donald Trump`s case, you know, we got something unusual, which is -- as you and I said many times before, first president who never had military experience or government experience. So, this is someone whose career at least in recent years has been more opaque than it would be if you had someone who was in public service.

The other thing that`s really interesting is that we`ve got a House Intelligence Committee investigation, with hearings that are going to be opening extremely soon. So, the timing of this is interesting as well.

MADDOW: NBC News presidential historian Michael Beschloss, joining us on short notice tonight -- Michael, as always, thank you for your time. Really good to have you with us.

BESCHLOSS: Thank you, Rachel. Awfully interesting.

MADDOW: Super interesting.

Chris Hayes, to your last point of the House Intelligence Committee and the Senate Intelligence Committee looking into potential Russia ties -- obviously, the big unanswered question in those potential investigations is, did the Trump campaign collude?

HAYES: Right. Yes.

MADDOW: Did they do along with it? Did they know what Russia was doing and helped them? Was it with their support? And is there any continuing relationship between Donald Trump and the Russian government? That`s one of debt or being beholden or anything like that we need to worry about in terms of our own going national security? Do tax returns become apart of that investigation for that reason?

HAYES: I mean, look, they could be. I mean, the point right now of what we are watching is a sort of political escalation slowly from the people on that committee, particularly Lindsey Graham, right, in the Senate generally, right? The folks in that committee, Richard Burr, who`s in the Senate, and Devin Nunes have been incredibly solicitous of the president`s support and also protective of the president.

If the shoe were in the other foot, if this is for Hillary Clinton, they could be -- they could be the opposite. And the fact of the matter is, the Congress of United States has tremendous amount of power to compel things from the White House. Now, there are certain things that are protective by presidential privilege. Those are going to be fought over.

If those committees wanted to get to the bottom of this, they could have a fight over that.

MADDOW: And is it the right thing for them to go for if they wanted to get --


JOHNSTON: Yes, absolutely.

And, you know, Richard Nixon said, people have got to know their president is not a crook. In the case of Donald Trump, we have to ask that and we have to know whether he has divided loyalties to a foreign government or governments.

But we shouldn`t be doing this in the intelligence committees. There should be a select bipartisan commission with senior investigators not swept under the secrecy rug of the intelligence committees. Do it in the open, tell people what`s there and get everyone of those tax returns going back to the 1970s.


MADDOW: David Cay Johnston is the editor and founder of He`s a Pulitzer Prize-winning financial reporter and he`s the guy who got Donald Trump`s 2005 federal tax returns and allowed us to preview them exclusively here tonight.

David Cay Johnston, congratulations.

JOHNSTON: Thank you.

Our website has crashed. But people -- tomorrow, I hope it will be back up.

MADDOW:, set a bookmark. You can also see this document tonight at

My friend Chris Hayes, thank you.

HAYES: Thank you.

MADDOW: We crashed our own website, too. Oh, we crashed our own website, too.

Come back, set a bookmark.

We`ll be right back.


MADDOW: Again, tonight, we are breaking news. We have published Donald Trump`s tax returns from 2005. It`s two pages. It`s 1040 form from his federal tax returns that year.

Joining us now is NBC News White House correspondent Hallie Jackson.

Hallie, it is great to have you with us. I know you are only able to join us by phone. I want to talk with you about the White House reaction to this news tonight and how hard have they fought from stopping something like this from seeing the light of day?

HALLIE JACKSON, NBC NEWS WHITE HOUSE CORRESPONDENT (via telephone): Well, what I can tell you is this, Rachel, you have these statements I believe earlier on the show from the White House about this, confirming some of the numbers that are in that tax returns. I can speak to what the president and as a candidate have been pressed on repeatedly on the campaign trail again during his transition and then his team has been asked about this as well after the inauguration which is, when will the president release his tax returns? Is that going to happen?

You know, there is a line from the president that`s consistently been, as a candidate, that he will not released his return because he`s under audit. You might remember that shortly after the inauguration, Kellyanne Conway seemed to say that the president would not be releasing his returns at all because people didn`t care, and then later on Twitter indicated that in fact, it was because of the audit.

The president himself was asked about this. We actually asked him about this of his first press conference after -- during the transition. It was in January -- about whether he will release it and why wouldn`t he? He said, "Americans don`t care. You talked about the poll numbers about it. We actually asked Sean Spicer about it again last week, the press secretary whether the president is still under audit and will he commit in releasing his 2016 tax returns when those are completed.

The press secretary that as far as he knows, the president is still under audit, that nothing has changed. He said he will follow up on the question about whether the president would release the 2016 returns. And I am told by White House officials today that they have not made an announcement on that just yet.

So, still questions obviously remaining about this. But the president is a candidate that was not consistent of his reasoning and we have seen no change as yet from the White House, Rachel.

MADDOW: White House correspondent Hallie Jackson joining us tonight from Washington -- Hallie, thank you very much.

So, this -- this was a little bit of a crazy night. But tonight, thanks to investigative journalist David Cay Johnston, the world is getting its first look at a federal tax return from Donald Trump. Again, this is his two page form 1040 from the year 2005. Incidentally, this is a matter of trivia. This is the year that he got married to his current wife, Melania Knavs, at the time. And she`s listed on here. It is a joint file for the two of them.

And you can see some real stuff here. And you can see, for example, that the president reported more than $150 million in income that year.

David Cay Johnston got this tax return in his mailbox. He tells us that it came across the transom.

The White House tonight confirmed to us that this return is real. They threatened us and told us that it was illegal for us to publish it.

It is not illegal for us to publish it, but we`ll take the threat in a spirit with which it was intended.

Watch the questions that this revelation tonight brings forward. If somebody was able to release this report, this 1040 report, and get into reporters` hands, I think it is reasonable to expect that there`s more out there and that we will see more of this coming out.

You know how much the president made and paid in that one year. We only have two pages. But there is still a long list of questions that could be answered by the president if he wanted to release more or if anybody else does what this source did tonight to get this into our hands.

Thanks very much for being with us tonight. That does it for us tonight. We will see you again tomorrow.


Good evening, Lawrence.


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