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The Rachel Maddow Show, Transcript 7/20/17 Mueller Probe includes Business Transactions.

Guests: Ashley Parker, Greg Farrell

Show: THE RACHEL MADDOW SHOW Date: July 20, 2017 Guest: Ashley Parker, Greg Farrell

RACHEL MADDOW, MSNBC HOST: Joy, I laughed out loud when your guest said the president should get an A in gym.


MADDOW: I was like, you know what, I had not thought about that.

JOY REID, MSNBC HOST: I thought you were going to say the honeycomb hideout.

MADDOW: Honeycomb hideout just made me hungry. Thank you, my friend. I appreciate it.

Thank you at home for joining us this hour.

OK. Ready? Once upon a time a RICO lawsuit was filed in New York City. We think of RICO lawsuits, racketeering lawsuits as relating to the mob usually. But it`s actually a broad definition. Basically, RICO laws get used against people who are participating in an organization that is engaging in criminal acts. So, typically, that`s the mob but it could be other stuff, too.

And in 2011, a RICO lawsuit was filed in a federal court in the southern district of New York about an alleged financial scheme that involved a whole bunch of Ukrainians and Russians and one guy who ended up running the Donald Trump for president campaign in 2016, and he denied having anything to do with it. And the suit ultimately did not succeed, but it has -- the terms of that lawsuit, the scheme that was alleged in that lawsuit has continued to resonate in the news for a few years now.

And right now, with tonight`s news, it is ringing like a loud bell on a cold night. The scheme sketched out by this lawsuit, this RICO lawsuit said that Vladimir Putin`s Russian state run gas company, Gazprom, made a ridiculous deal with a Ukrainian oligarch, and technically the deal involved that guy buying and selling gas between Russia and Ukraine. Buying gas from Russia and selling it Ukraine.

But what the deal really was, was a way to dump zillions of dollars into the pockets of that Ukrainian oligarch for a specific purpose. The way it worked was pretty simple. Instead of Gazprom just selling gas from Russia to Ukraine, they put this other guy in the middle. And what happened was Gazprom sold that guy in the middle of the gas, and they sold it to him for almost nothing and then that guy turned around and he sold the gas to Ukraine at a massively marked up price.

And so, the difference between what he bought the gas for and what he sold it for, that difference between those two prices, it all went in his pocket. And it was billions of dollars. And that deal ripped off the people of Russia, right, because it was their national gas company that was selling their gas for nothing, and it ripped off the people of Ukraine because their government had to buy gas at this gigantic marked up price from this dude in the middle who was making billions of dollars off of the arrangement. This arrangement that had been set up by the Putin government.

So, that was the deal. That was the corrupt deal. It was basically just a huge -- it was sort of disguised as a business deal, but what it really was is a huge transfer of money to this guy in the middle screwing the people of both countries arranged by the Putin government.

Well, the guy in the middle, the guy in this case, the guy who made all the money was a Putin-connected oligarch named Dmitry Firtash. He also had a minority partner in the deal, a member of parliament in Ukraine named Ivan Fursin.

And according to this RICO lawsuit that was filed in New York in 2011, a chunk of the gigantic amounts of money they made in that scheme, that money that Putin basically showered on them, a chunk of that money ultimately got shipped to the United States for cleaning. That Gazprom money from Russia, at least a multimillion dollar chunk of it, got sent to the United States to be invested in New York real estate, as a money laundering thing.

So, Gazprom money goes to the oligarch guy. He invests it with an American partner who sets up real estate deals for him in New York City. Those deals make money or they don`t, but then the point of the lawsuit, the point of the scheme -- the reason a Ukrainian politician filed this RICO lawsuit in 2011 is that she alleges that the whole point of this arrangement, the whole point of cleaning those ill-gotten gains through New York real estate deals was just to disguise the fact that this was money from Gazprom, money from Russia, money from Putin and the reason they had to disguise the origins of that money is because the point of that money, the destination ultimately of that money, the whole point of this arrangement was to shovel that laundered money back into Ukraine, into politics, into the campaign coffers and into the pockets of pro-Putin, pro- Russian and politicians and political parties in the Ukraine.

So, I mean, if there`s one thing we as citizens have all had to learn as part of following politics now, the whole point of money laundering is to make things seem complicated, right? Whenever you`re following a money laundering story, you look at, the money went here and then here and then there was another person, and then a minority partner. That`s the point. That`s money laundering.

The whole idea is that the trail of the money is supposed to seem complicated. You`re supposed to lose track of where the money is going and where it came from. That is money laundering.

As a money laundering scheme, though, what was alleged in this RICO lawsuit, this one was pretty simple, right? This is money from Putin, from the Russian government that ultimately gets spent on buying pro-Putin, pro- Russian government officials to run the nation of Ukraine, right next door to Russia, of great concern to Vladimir Putin.

And yes, they washed that money and tumbled it dry through allegedly through this gas company and the gas deal and the oligarch and the New York real estate and yadda, yadda, yadda, but that was just intentional complication. The point was for Putin to us government money to buy himself a friendly, pro-Putin government in neighboring Ukraine. And that was basically how Russia managed its relations with Ukraine for years. That`s how Russia and Ukraine had good relations, that`s -- that`s why Putin was so comfortable with the Ukraine government for so long because he bought it himself.

And that plan, it worked for a while until it didn`t anymore, because ultimately Ukrainians rose up and overthrew their corrupt, pro-Putin government in a revolution that freaked Vladimir Putin out like you cannot believe. And Ukraine`s pro-Putin dictator had to flee the country and go hide in Moscow where he remains.

For a while there, though, before the revolution, before people rose up, the Russian plan really did seem to be working. And while it was working, a lot of people made a lot of money out of that scheme and not just the oligarchs and dictators. "The New York Times" had this report over the weekend about Donald Trump for president campaign chair Paul Manafort and him finally retroactively registering as a foreign agent this year for the work he did years ago for pro-Putin political parties and politicians in Ukraine.

When Paul Manafort finally retroactively registered as a foreign agent, he reported that over two years, 2012, 2013, the pro-Putin political party in Ukraine that he worked for paid him nearly $17 million. Now, the reason that`s weird is because over that same two-year period, that party reported that they actually didn`t spend $17 million on anything. They didn`t spend $17 million on everything combined. They say their budget didn`t total up for everything to what Manafort said they paid him.

But, you know, there is that RICO lawsuit from back in the day that alleged that pro-Putin political parties in Ukraine, like the one that Paul Manafort bilked and worked for, they actually secretly had tons of money because they were secretly being funded by money from Putin that was stolen through corruption and at least partially laundered through New York real estate deals that were arranged between the oligarch who got the deal in the first place, and his American partner before his American partner started running the Trump campaign.

So, you know, we don`t know exactly why Paul Manafort is the guy who Donald Trump picked out of a hat when it came time for him to put somebody new in charge of his presidential campaign. And honestly, the circumstances of Paul Manafort leaving that campaign last summer still drive me nuts. They really -- those circumstances of him leaving and what happened after he left, the agreement he may or may not have made in the campaign around the circumstances of his departure, that remains totally unreported. It doesn`t make sense on its face. There remains a story to be told there.

But you can see, even with all of those question marks and the stories untold, you can see why the intrigue around Paul Manafort has grown over time since he left the campaign, and since congressional investigators and special counsel Bob Mueller have started an investigation a full blown investigation into the Trump campaign and its ties to Russia.

"The Wall Street Journal" reported earlier this week that a new round of subpoenas has just gone out from the Manhattan D.A.`s office about some unexpectedly huge loans that went to Paul Manafort from a small bank in Chicago run by a prominent Trump supporter. Those loans were made in November, around the time of the election and in January, around the time of the inauguration.

And it would appear that those loans were for way more money than it looks like that little bank could afford. That follows previous reporting that Paul Manafort`s real estate transactions and investments were being investigated by the FBI. That follows previous reporting that Manafort`s domestic banking records had been subpoenaed by a federal grand jury in the eastern district of Virginia. That follows previous reporting from the nation of Cyprus, which has been a notorious conduit for money laundering, reporting from Cyprus that Paul Manafort`s offshore banking records in Cyprus have also been requested by U.S. investigators and handed over to them.

And, you know, maybe the business practices and the personal finances of the Trump presidential campaign chairman, you know, maybe his money isn`t any of our business. And when this all bears out, we will come to realize this has all been his personal stuff and his business stuff that has nothing to do with him running the Trump campaign and nothing to do with the Trump campaign`s relationship with Russia and Russian attack on our election, and all the rest of it. That may yet prove to be the case.

But last night, just before "The New York Times" published its very controversial interview with the president, they also published this report which says that in the months right before Paul Manafort joined the Trump campaign and became chairman, he was, apparently, very seriously in debt to the tune of about $17 million. The people he owed, according to "The Times" and these banking records they reviewed from Cyprus and their reporter Mike McIntyre disentangling all this stuff, according to them, the folks that Manafort owed millions of dollars to right before the Trump campaign started and he joined as chairman, the people he owed were the minority partner guy from that Gazprom deal back in the day, that Gazprom deal that allegedly funneled all that Russian money into Ukrainian politics. That guy is a pro-Putin, pro-Russia member of parliament from that party that Manafort used to work for.

So, Manafort apparently owed him millions of dollars, like $10 million. And the other guy he appeared to owe money to, according to his records, is an oligarch named Oleg Deripaska.

He`s another Ukrainian oligarch. He`s close to Putin. He`s one Putin allowed to control the aluminum market, which was remunerative.

Deripaska is also the person who reportedly, according to "The A.P." signed Paul Manafort to a $10 million a year contract for Manafort to promote the interest of Vladimir Putin and the Putin government in countries around the world, including in the United States. Oleg Deripaska and Paul Manafort are also known to have gone in together on several big investments, including a Ukrainian TV concern that they called Black Sea Cable.

It sounds funny, even when you`re talking about big corrupt deals and people who are trying to fix the system and rig the system. Even when you`re talking like worst case scenario for international corruption, it`s funny, even in those circumstances, things do sometimes still fall apart. I mean, Manafort definitely did get paid millions of dollars from somewhere for his work on behalf of the pro-Putin political party in Ukraine. That is definitely money he took home. And we know that because he just declared it formally to the U.S. government now, while federal investigators were breathing down his neck his glasses are fogged up and he can`t see forward.

So, I mean, he did make zillions of dollars doing that. And "The A.P." reports that he did sign that multimillion dollar annual contract with Oleg Deripaska to promote Putin`s interest around the world, including here. And Manafort confirmed to "The A.P." that he worked for Deripaska, although he contested their characterization of the work that he did for them.

So, Paul Manafort clearly a rich guy who has made lots of money in recent years. But he didn`t make money on everything that he tried. And the investment deals that he did didn`t always work out.

That Gazprom money out of Ukraine, that was allegedly supposed to end up in a huge real estate deal Manafort arranged that was going to tear down a big hotel in New York City and create a Bulgari Tower. That deal that was supposedly going to be -- allegedly, according to this RICO lawsuit that was intended to be a money laundering effort for all that money taken out of Gazprom, that Bulgari Tower deal in New York City never happened.

And "The Times" reports that he also ended up owing money to one of the Gazprom guys, a lot of money, like $10 million. That Black Sea Cable TV investment he was going to do with Deripaska, the aluminum oligarch, that never happened either. And that Black Sea Cable thing, when that deal fell apart, it really fell apart hard.

Oleg Deripaska sued Paul Manafort over that deal. He alleged in his lawsuit that Paul Manafort basically took the money and ran. He says he took millions of dollars from him that were intended for that cable deal, and then Manafort never said anything about what he did with the money, and the money just disappeared. That lawsuit was filed against Paul Manafort in 2014.

Well, "The New York Times" now reports that as late as December 2015, as the presidential campaign was starting, banking records "The Times" found in Cyprus continue on show Paul Manafort being millions of dollars in debt to Oleg Deripaska. And then this really interesting thing happens, depending on who you ask, "The Times" says it`s late 2015, "The A.P." says it`s early 2016. Sometime in there, Deripaska stops going after Manafort for all the money that Manafort owes him.

Deripaska has been in business with Manafort. Manafort has been doing this very highly paid pro-Putin political work for him like for years. They`ve got deals going on for years.

Things go sour. Manafort appears to have huge multimillion dollars debts to Deripaska. Deripaska is actively suing him over those debts. But then for some reason, it all just stops. Late 2015, early 2016, he`s no longer trying to get his money back.

And as of December 2015, Manafort still on paper owes that dude millions of dollars. But the legal action to try to collect from Manafort that just stops, and then Manafort takes the job running Trump`s campaign while he appears to be millions of dollars in debt and he takes the job of running the Trump campaign without a salary. He says he`ll do it for free.

It seems like a magnanimous gesture at that time, right? The kind of thing like a super rich guy will do for another super rich guy. Manafort took on the job of chairman of the Trump campaign and said he would do it for free, and that`s very nice. That`s a nice thing to do for anyone.

But it`s a weird thing to do if at the time, you are millions of dollars in debt to two different Russian connected pro-Putin guys, right, at the exact time that he took on the job. So, that`s news that just broke in the "New York Times." Trump campaign chair, Paul Manafort, $17 million in debt to pro-Russian interests in the months immediately before he took on the job of running the Trump campaign whereupon he said he didn`t need to be paid to take on that job. Huh?

That job also apparently coinciding with at least one of the Russians Manafort owed that money to, stopping his efforts to try to collect the debt that Manafort owed him. And again, it is not our business if this is just Paul Manafort`s personal business. But if this is at all related to his time running the Trump campaign, it`s about to get very important to find out if he still owes those pro-Putin interests all that money or if he paid it back.

And if he paid it back, did he pay it back in money or some other way? Why did that one Russian connected oligarch stop pursuing Paul Manafort for all that money he apparently owed right before Manafort took over the Trump campaign?

"The Wall Street Journal" reports tonight that in addition to the other New York and federal investigations into the Trump campaign chairman`s finances, "The Wall Street Journal" reports tonight special counsel Robert Mueller is also looking at Paul Manafort for potential money laundering.

It`s been reported previously that Paul Manafort was the subject of a federal money laundering probe that was being run out of the U.S. attorney`s office in the southern district of New York. We`re told tonight that that is now being folded into the special counsel investigation that`s being run by Robert Mueller. He has taken that over.

We`ll be speaking that reporter who broke that news today. And that news comes amid multiple new reports that the president himself is now having his finances reviewed by investigators. "Bloomberg" reporting, according to what it calls a person familiar with the probe, "Bloomberg" reporting that investigators are looking into Trump transactions as diverse as the Russian money connections to his Trump Soho project in Manhattan and Russians buying Trump properties, and his involvement in the Miss Universe pageant in Moscow and him making tens of millions of dollars in 2008 when he sold to a Russian oligarch a house in Florida that he bought only a few years earlier, and that neither of them ever lived in.

On top of that, "The New York Times" reports that Deutsche Bank, to which the president owes hundreds of millions of dollars, his biggest creditor by far, Deutsche Bank, is now reportedly in contact with federal investigators and they say they are expecting to have to provide information on their dealings with Trump to the special counsel, to Bob Mueller. According to "The Times", banking regulators are already going through Trump`s Deutsche Bank dealings, hundreds of millions of dollars worth.

Last night, the president was asked in this exclusive interview with "The Times" if it would be a red line for him if the special counsel Robert Mueller started, quote, looking at your finances and your family finances unrelated to Russia, the president responded by saying, yes, yes, I would say yes, I think that`s a violation.

If the president does want to fire Robert Mueller because of the Russia investigation or because the Russia investigation now feels differently -- feels different to him because it has now led to the finances and business dealings of his campaign chair and to the finances and business dealings of the president himself. If he either with renewed urgency or newly wants to stop the Russia investigation because he sees it as a violation or anything else he might call it, the president cannot directly fire Robert Mueller, the special counsel.

There`s been a lot of wonder and exasperation today over the president starting to talk smack about his attorney general, Jeff Sessions, right, the Trump loyalists of all Trump loyalists. The president last night accused Jeff Sessions of basically lying to the Senate in sworn testimony. He said he wishes he never picked Jeff Sessions as attorney general. He`s basically asking for Jeff Sessions` resignation.

There`s been a lot of consternation and exasperation and wonder over the president`s turn against this guy who he was so previously close to. But you know what? None of us are inside the president`s head. I don`t actually know how the president feels about Jeff Sessions, and neither do you. But I do know that if the president is freaked out at all by the Russia investigation turning intensively to money and business dealings, and the president is concerned enough about that that he really, newly wants to try to stop this investigation, the only way he can do that is by getting rid of Jeff Sessions, whether or not he loves him or hates him, because Jeff Sessions is recused from overseeing the Russia investigation now, right? That means Jeff Sessions as attorney general, can`t do anything related to Robert Mueller.

If Jeff Sessions left as attorney general either because he quit or because Trump fired him, if he`s out as attorney general, Trump would get to name a new attorney general. Presumably someone who would not recuse himself or herself from overseeing the investigation, and then that new person would become the person at the Justice Department overseeing Bob Mueller and the Russia investigation he`s leading. And then that new person, that new attorney general absolutely could fire Robert Mueller, cooking up some cause for doing so.

If you want to fire Bob Mueller, you`ve got to get rid of Jeff Sessions, even if you love him.

Money laundering, foreign business and political deals, foreign real estate investment, offshore banking, right, that is apparently where this investigation is going now.

And Jared Kushner is doing his first interview with congressional investigators on Monday. And if Jared Kushner has potential criminal liability around his security clearance application, so does his wife, the president`s daughter, Ivanka, because those questions on that application for security clearance asks if you or a member of your family, blah, blah, blah. If he`s got problems about leaving stuff out on his form, so does she.

And the president`s eldest son, Donald Trump Jr. is due to testify, on TV, in open session on Wednesday. And the one and only Paul Manafort is scheduled to testify on TV and in open session next week, Wednesday.

If there is a panic button for the president with regard to this investigation, this is the time you might think he`d consider hitting it, which I think probably more than anything explains what we just heard about him last night -- heard from him last night about Jeff Sessions. If he is hitting the panic button, that`s what he`s considering doing here, that means things may start to move very, very fast now. Hold on.


MADDOW: You know, it`s weird. I swear I didn`t plan this you know how I said before the commercial break things are going to start going very fast now. So, in the commercial, we just got new news from "The Washington Post." And I can`t say we didn`t see this coming. I -- even as I was warning you, I didn`t think things would go quite this fast. I have been telling people in my personal life that I thought we would start to see news like this by the end of the summer, but we see it now.

All right. Can we put up -- can we put up the story that just broke in "The Washington Post"? Will we be able to make a full screen out of it? Yes. OK.

Trump`s lawyers seek to undercut Mueller`s Russia investigation. I`m just going to read the lead. Again, this has just been posted by "The Washington Post".

Some of President Trump`s lawyers are exploring ways to limit or undercut special counsel Bob Mueller`s Russia investigation, building a case against what they alleged are his, meaning, Mueller`s conflicts of interest. And here`s the part I thought we wouldn`t get to until the end of the summer, and, quote, discussing the president`s authority to grant pardons, according to people familiar with the effort.

Quoting again from "The Times", excuse me, from "The Washington Post", Trump has asked his advisers about his power to pardon aides, family members, and even himself in connection with the probe, according to one of those people he asked. A second person said Trump`s lawyers have been discussing the president`s pardoning powers among themselves.

This is byline tonight just moments ago from "The Washington Post" by Carol Leonnig, Ashley Parker, Rosalind Helderman and Tom Hamburger. So, heavy hitters at "The Washington Post" reporting this out. They say without a quote, but citing advisors that, quote, the president is irritated by the notion that Bob Mueller`s probe could reach into his and his family`s finances.

Trump has been fuming about the probe in recent weeks as he has been informed about the legal questions that he and his family could face. His primary frustration centers on why allegations that his campaign coordinated with Russia should spread into scrutinizing many years of Trump deal-making. He has told aides he was especially disturbed after learning that Bob Mueller would be able to access several years of his tax returns.

Again, this just out moments ago from "The Washington Post."

Joining us now is one of the reporters who has just broken this story, Ashley Parker -- oh, excuse me, we`re getting Ashley Parker on the phone right now. A little tease ahead there.

In terms of "The Post" reporting here, obviously, their headline is about trying to attack Mueller`s investigation going after Mueller`s conflicts of interests. The thing that jumps off the page is the president is looking at what his pardon power is.

I should tell you, there`s one other nugget here. We`ve been reporting in recent days on some of the difficulties, some of the apparent shakiness on the president`s legal team here, both involving some of the individual lawyers seeming a little shaky and the way they`ve been handling information about this probe and the way they put stuff out to the public. "The Post" is reporting tonight that the spokesman for the legal team representing the president, spokesman Mark Corallo, tonight has resigned that post.

Now, joining us by phone is one of the reporters who just broke this story in "The Washington Post," Ashley Parker.

Ms. Parker, thank you for being with us on short notice. I know that you`re just breaking this story. Appreciate your time.

ASHLEY PARKER, REPORTER, THE WASHINGTON POST (via telephone): Yes. Thanks for having me.

MADDOW: So, let me ask you first about the pardon discussions that you guys are reporting now. You say Trump has asked his advisers about his power to pardon aides, family members, and even himself. You cite a second person saying that Trump`s lawyers are discussing the president`s pardoning powers among themselves.

Are you reporting that the president has made decisions about these things? Is this being floated as a trial balloon? Do you have any sense about where they are in this decision making process?

PARKER: Sure. So, the way it was explained to us is that certainly the president has made no decisions. It`s more that the president is an avid consumer of news, he reads all these articles, he watches television and he`s reading about both the expanding Russia probe and also about a president`s pardoning authority.

And as part of that, he`s just sort of become curious in understanding -- well, you know, what is actually the reach of my authority as president? What could I do? How would it work? How would this go? It was him doing his diligence and expressing curiosity, not that he`s floated specific names.

MADDOW: On the specific question of whether the president can pardon himself, obviously that`s an arguable, that`s like a classic law school debate topic.


MADDOW: Do we know what kind of advice the president has received from his lawyers or which way his lawyers are leaning on that question as to whether they believe the president can issue himself a pardon?

PARKER: So, you`re right. It is a very sort of confusing question and one that it feels like from us just talking to outside legal experts may end up, if he were to ever do that, getting kicked to the Supreme Court. As of now, we just know that it is something that the president`s team is discussing. I don`t know that they have necessarily reached a conclusion.

MADDOW: OK. Let me ask you about one other element of your reporting tonight, which is just stunning. I`m just going to quote to you what you guys have in your piece tonight. Some Republicans in frequent touch with the White House say they viewed the president`s decision last night to publicly air his disappointment with Attorney General Jeff Sessions as a warning sign that the attorney general`s days were numbered. Several senior aides were described as stunned when Jeff Sessions announced this morning that he would stay on at the Justice Department.

It sounds like what you -- basically what you are reporting there is that the president intended to ask for Jeff Sessions` resignation with his comments last night.

PARKER: To be clear, I don`t know that the president intended to ask for his resignation. I think if the president intended to ask for his recognition, he would have done that. But also talking to people, the president is incredibly savvy. He knows what he`s doing when he talks to "The New York Times", says what he said about his attorney general and, frankly, other members of the Justice Department and says, you can put this all on the record.

He absolutely knows what that means, what sort of message that is sending. And that is why a lot of his senior aides, to be clear, some of them didn`t know the president was going to do the interview. It`s not like it was a well-planned out strategy. But after seeing this, many were stunned when they saw Sessions today say he was going to continue on as attorney general.

MADDOW: Is it your sense, this is something that`s not touched on in your piece as far as I know. But I was just talking moments ago before your news came out about the importance of the president having this political divorce with his attorney general. It would seem to me that getting rid of Attorney General Sessions, replacing him with a new attorney general, would be an important step toward firing Robert Mueller if that was the president`s intention.

Obviously, with Attorney General Sessions recused from the Russia investigation, he can have nothing to do with what Robert Mueller is doing if there were a new attorney general in place, that would be an attorney general that didn`t have a reason to recuse, that attorney general could then fire Robert Mueller. That`s just me doing the math in terms of what I understand about how these things are put together.

Is that potential chain of events part of this consideration as far as you know or as far as you`re able to report in terms of why the president and Sessions are at loggerheads?

PARKER: Well, the president and Sessions have been at loggerheads basically since Sessions recused himself with giving no heads up to the president. And the president thinks it`s always to fight, fight, fight. So, I think the president was upset with his attorney general just starting for that moment and things went downhill from there. The president and a lot of his team see it as sort of an inception point that him -- Sessions recusing himself set the stage for Rod Rosenstein to appoint Mueller and on and on and on.

I do have to say, this is in our story, the president`s legal team there is an effort to basically try to limit and undercut Mueller`s probe. And they are building the case quite deliberately, publicly and privately of basically, you know, among other things trying to cite conflict of interests and trying to make the case that Mueller is potentially exceeding the reasonable scope of what he was tasked to do, and those all, if I understand it correctly, although I`m not a lawyer, could be reasons the president could give for starting the process to fire the special counsel.

MADDOW: Right, because there`s no reason for you to make a -- I mean, just speaking theoretically here, there`s no reason for you to make a case against what the special counsel is doing because the special counsel operates independently and can`t have his probe shaped by people complaining about it from the White House. The reason you`d come up with those undercutting arguments is to justify having set in motion a chain of events that would fire him. Yes.

PARKER: Right. And a conflict of interest is one of the possible reasons that an attorney general can cite to remove a special counsel under DOJ regulations.

MADDOW: Exactly.

Fascinating reporting. Ashley Parker at "The Washington Post", who`s bylined on this piece tonight, along with Carol Leonnig, Rosalind Helderman and Tom Hamburger. Ashley, thank you for joining us on zero notice.

PARKER: Thank you for having me.

MADDOW: I appreciate it. Thank you very much.

So, this is really a big deal. Again, this has just been reported by "The Washington Post" in the last few minutes. As Ashley Parker was just explaining there, the headlines says Trump`s lawyers are looking for ways to undercut the Mueller probe, there`s no way to undercut it in terms of the way these things work procedurally.

If you`re coming up with reasons to discredit it, those are reasons you`re coming up with to explain after the fact why you have fired him, why you have put somebody in place who can fire him, and the president asking about his power to pardon himself, his family members and others. Sometimes you get so far away from historical precedent of these things that the actual historical precedent for these things is that opposite of this one happened.

I`ll explain what that means with presidential historian Michael Beschloss when we come back.


MADDOW: So, as we followed the breaking news tonight, consider briefly that we are now in territory so weird, the only American historical precedent for what we`re going through right now is actually the opposite of what`s happening now. What`s happening now has never happened before. The opposite happened once, though.

J. Howard McGrath is a former U.S. attorney general. He was fired as attorney general. He was a big deal guy. He`d be been a governor. He`d been a senator. He was relatively high profile A.G. He was attorney general from 1949 until President Harry Truman fired him in 1952.

There had been an investigation into corruption in the Truman investigation. That investigation got bogged down. The attorney general, A.G. McGrath, refused to cooperate with some of the corruption investigation, and that`s why Truman fired him, because he didn`t cooperate well enough in the investigation enough into Truman`s investigation, and Truman was disgusted.

Historical comparisons, you know, typically can only get you so far. In this case, you have to see them as the reverse of what`s happening now.

I will tell you, though, there is one lingering piece of advice from that 1952 experience, that the current incumbent attorney general might do well to heed right now. Right after the president Truman fired McGrath in 1952, J. McGrath sent a telegram to the guy that was picked to take his job.

This was the text of the telegram. Quote: My hardiest congratulations and I suggest you bring -- I suggest you bring a pair of asbestos trousers with you.

"The Washington Post" reported moments ago that the spokesman for the president`s legal team has just resigned. But the president is querying his legal team on the extent of his pardon powers, including the question of whether he can pardon himself, and "The Washington Post" reporting that the White House is exploring ways to cast aspersions on the special counsel investigation that is looking into the president`s campaign and its connections with Russia.

Joining us now is Michael Beschloss. He`s NBC News presidential historian and he`s the guy who we went to to find out if there was any precedent like this today.

Mr. Beschloss, thank you for being here.


MADDOW: This is, I know already, not like anything that`s ever happened before.


MADDOW: But let me just ask you about the pardons issue that has just been reported on by "The Washington Post."


MADDOW: They`re saying that the president has reportedly been asking whether he can pardon his staffers, his family and himself and the attorneys are considering those matters. What should be our historical reference point for thinking about that?

BESCHLOSS: Well, in keeping with your theme tonight, Rachel, of doing the opposite of what happened before, you know, Richard Nixon who was enmeshed in Watergate, is thought to this day in some quarter to be sort of the definition of dishonorable behavior. He was advised by his people, why don`t you pardon yourself. Save yourself the danger of being indicted after you leave office and maybe going to prison? And Nixon said, A, you know, the ability of a president to pardon himself that`s not been established but, B, it would be dishonorable and I will not do that.

Some of Nixon`s aides, Bob Haldeman, his chief of staff, called him up just the day before he resigned in August of 1974, begged him to pardon him before he left office and Nixon wouldn`t do it because he thought that was dishonorable. Obviously, very different than what we`re seeing tonight. If Donald Trump thinks he can easily pardon himself and his aides and children and limit the Mueller investigation, perhaps fire Mueller and/or, you know, Jeff Sessions and Rosenstein, we are on our way if that happens to seeing a constitutional crisis that will make Watergate look like a minor event by comparison.

MADDOW: Michael, one of the things the president said last night, which I felt like was kind of a spotlight for where he might go, for what his thinking is about, for what he hasn`t done but he is at least considering doing, is he talked about the FBI and the fact that it`s sort of an historical anomaly or maybe inappropriate that the FBI director reports up the chain to the Department of Justice, to the deputy attorney general and to the attorney general.

He said that the FBI director should report directly to him as president, then immediately thereafter he said we`re going to have a very good new FBI director. That nominee to be FBI director was, in fact, approved unanimously by the Senate Judiciary Committee today. And he was citing what he described as historical example in terms of explaining why the FBI director should report directly to him.

Was he correct in that?

BESCHLOSS: No, he was not. I found his suggestion of an FBI director working directly for the president, reporting to him. That is absolutely blood chilling.

The history of the FBI, you know, J. Edgar Hoover from 1924 to 1972 when he died, you know, it`s the example of an FBI director who behaved badly and did bad things for presidents. Presidents from Roosevelt to Nixon asked Hoover to investigate their enemies and harass them, in politics, to try to harass senators who gave them trouble, harass journalists who wrote or said bad things about them. That`s what we`ve been trying to get away from since 1972. That was the purpose of a ten-year term that a president could not fire an FBI director which Donald Trump has done.

So, what we`re seeing is, he`s suggesting turning back the clock so that presumably he would have the ability to order the FBI to investigate, let`s say, Dean Heller who might give him trouble on health care. You saw what he said to him yesterday at that lunch at the White House. Or journalists who are unhappy with various things that Donald Trump is doing.

This is the period that we thought we were getting away from.

MADDOW: Michael Beschloss, NBC News presidential historian, thank you. I have talked to you about a lot of things over the years. I have never before heard you say the words blood chilling. It`s sobering and this is serious stuff. Thank you, my friend. It`s nice to have you here.

BESCHLOSS: Thank you. Thank you, my friend, and I don`t say that easily.

MADDOW: Yes, I know. That`s what freaks me out.

All right. I have to tell you, we`ve got -- as I mentioned, we`ve got this breaking news from "The Washington Post" tonight that the president`s spokesman for his legal team has resigned, that advisors to the president, people in communication with the president say they were shocked that Jeff Sessions, his attorney general, did not resign when he spoke this morning at the Department of Justice after what the president said about him last night. And the president is speaking to his legal team about his pardon powers. That`s from "The Washington Post".

"The New York Times" posted a new piece just moments ago that suggests that at least part of the investigation into the president and his campaign may be taking a criminal turn that we did not know about before. We`ve got that breaking news for you next.


MADDOW: We`re juggling some breaking news tonight. We told you earlier this hour about new breaking news from "The Washington Post."

Few pieces from that. Number one, the president and his legal team are reportedly discussing his pardon powers, including whether he can pardon not just his family members and his staffers but also himself. "The Post" also reporting that the spokesman for the president`s legal team has resigned.

"The Post" also reporting that the president and the White House are talking about ways to try to discredit Bob Mueller and his special counsel investigation. That presumably would be used either to retroactively explain actions that they set in motion to fire Bob Mueller or to try to make the case to Deputy Attorney General Rod Rosenstein if he stays in his post that he should fire Bob Mueller. That reported by "The Washington Post."

Moments ago, we also just got new reporting from "The New York Times." I`ll read you the lead here. President Trump`s lawyers and aides are scouring the professional and political backgrounds of investigators hired by the special counsel, Bob Mueller, looking for conflicts of interest they could use to discredit the investigation. So, this is a variety of the same information that "The Washington Post" is also reporting this evening.

According to "The Times", some of the investigators hired by Mueller have vast experience prosecuting financial malfeasance and the prospect that Mueller`s inquiry could evolve into an expansive examination of Trump`s financial history has stoked fears among the president`s aides.

Mueller`s team -- and this is new -- has begun examining financial records and has requested documents from the IRS related to Mr. Trump`s former campaign chair, Paul Manafort. The records are from a criminal tax investigation that had been opened long before Trump`s campaign began. Paul Manafort was never charged in that case.

"The New York Times" also just reporting moments ago that Marc Kasowitz, who previously had been the president`s lead lawyer in his Russia representation, will be taking a significantly reduced role in that team.

Also Bloomberg has reported today -- this is the news that really drove the day -- Greg Farrell and Christian Bertelsen at "Bloomberg" today reported that the investigation into the Trump campaign`s relationship with Russia not only has folded in a pre-existing investigation of Paul Manafort that was in place before this Mueller investigation started, but the Mueller investigation and other investigators are also now looking at the president`s finances and his business transactions directly.

Greg Farrell is the lead reporter on that for "Bloomberg". He joins us now.

Mr. Farrell, thank you very much for being here.


MADDOW: It`s a lot to summarize. There`s a lot to absorb.

FARRELL: Yes, absolutely.

MADDOW: The new information that you`re putting to the fore, which seems to be freaking the White House out, if I read this right, is that the president`s business dealings and personal finances are in the bull`s-eye now for these investigators.

FARRELL: Yes. What we now know, what we weren`t sure before, is how expansive a view of his mandate Bob Mueller would take. And it`s clear just in this initial two months that he`s looking back beyond a decade to apartment sales to Russian nationals here, to a beauty pageant in Moscow in 2013, to a 2008 sale of a Florida property that you`ve spoken about before for the sale for twice the price to a Russian oligarch in 2008.

Anything that -- any financial transactions involving Russians, particularly those like the Florida one that seemed not to make sense at first glance.

MADDOW: The -- that -- I`m glad you mentioned that one, the Palm Beach house sale. One of the president`s lawyers, Jay Sekulow, tonight singled that out to "The Washington Post" as something that they`re complaining about with regard to the Mueller investigation, saying this years ago house sale couldn`t conceivably related to the campaign or to any investigation into whether there was a connection between the Trump campaign and Russia. They`re singling that out as something that`s ridiculous to be focusing on.

What do you think the rebuttal will be? Why would investigators be looking at that?

FARRELL: Well, any influence that the Russians might have had in the election last year through the Trump campaign didn`t just begin on January 1st, 2016. Relationships get built up over time, and the reason, I think, that Mueller`s team needs to look back a decade or more is to see if there`s a consistent flow of either money, influence, some kind of pattern that would indicate someone feels indebted to someone else.

So, that`s why it can`t be built, you could say for the past two years everything is fine and if you stop in 2015, there`s absolutely no interactions with Russia. Yes, but previous interactions might have led to a certain place where a neutral observer would think otherwise.

MADDOW: When we have spoken before, one of the things we talked about before was access to information, whether investigators can get their hands on everything they need. Do you know if there`s any problems with that regard?

FARRELL: So far, not that I know of. It`s early enough that I think the White House is also finding out what`s going on and what`s happening. So, we`re not at a place now that I`m aware of any wrangling over we`re not going to give this.

One area that will be difficult, and it`s going to take some time, and these are seasoned investigators who I`m sure they started right on this in late May and early June, is requesting bank records from foreign banks. Here in the U.S., you issue a subpoena, and that compels the bank to comply and turn over records. But as we`ve seen in other DOJ investigations involving European banks, you have to go through a certain treaty.

MADDOW: And that can take some time.

FARRELL: Yes, (INAUDIBLE) treaties, that can take months and depending on how cooperative certain nations are going to be, it could take many months.

MADDOW: Greg Farrell, investigative reporter at "Bloomberg" news, really important work. Thanks for helping us understand it.

FARRELL: Thank you so much.

MADDOW: Appreciate it, Greg.

We`ll be right back. Stay with us.


MADDOW: So this has been a night of some sort of disturbing breaking news out of Washington in terms of how radical it looks like the president`s defense is going to get on this Trump/Russia investigation.

I do have some good news, though. Lawrence O`Donnell is live right now for "THE LAST WORD WITH LAWRENCE O`DONNELL." And, frankly, there`s nobody I`d rather hear from in the world right now than Lawrence O`Donnell.

Good evening, Lawrence.