The Rachel Maddow Show, Transcript 7/26/2017 NYT: Manafort & Russian Interests

Guests: Allison Jaslow, Sue Fulton, Shane Ortega, Amy Klobuchar

Show: THE RACHEL MADDOW SHOW Date: July 26, 2017 Guest: Allison Jaslow, Sue Fulton, Shane Ortega, Amy Klobuchar

CHRIS HAYES, MSNBC HOST, "ALL IN": All right. Betsy Woodruff and Josh Barro, thanks for joining us.

That is "ALL IN" for this evening.

THE RACHEL MADDOW SHOW starts right now. Good evening, Rachel.

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

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

You know, this seemed like kind of an inside baseball thing at the time, but it`s starting to look like it may turn out to be important. Late last week, "The New York Times" refused to issue a correction. And they let it be known that they were saying no, when they had been asked for a correction. The thing they refused to correct or retract was this, follow the money piece that they had just published about the chairman of the Trump for president campaign.

According to offshore banking records reviewed by "The Times," right up until just before he joined the Trump campaign as its chairman, business entities tied to Paul Manafort appear to have been deeply in debt to business entities tied to Putin-connected oligarchs. One of them was this aluminum oligarch, Oleg Deripaska, who according to the "A.P." once signed Paul Manafort to a $10 million a year contract to promote the interests of Vladimir Putin`s government around the world, including in the United States.

The other oligarch was a -- or the other person to whom Paul Manafort reportedly owed money was a business partner of Dmitry Firtash. Dmitry Firtash was a major backer of the pro-Putin political party in Ukraine that Paul Manafort worked for for years. Putin`s Russian state controlled gas company, Gazprom, cooked up one of the oligarch specials for Dmitry Firtash and his business partner which shoveled billions of dollars to them by letting them take a cut out of every single fart worth of natural gas that Putin and Gazprom sold to Ukraine.

These guys then repaid Putin for that multi-billion dollar favor by funding the pro-Putin political parties and politicians that Putin wanted in power in Ukraine. So, it`s nice work if you can get it. I`m sorry I said fart.

A few days ago, we reported on a dismissed U.S. lawsuit that claimed that one of the ways those guys laundered Putin`s money before sending it back to Ukraine by Putin and government there was that it was funneled into and out of New York City real estate deals. The show case deal of that alleged scheme was an $850 million plan to tear down and redo this hotel, the Drake Hotel in New York City.

This would have been a mammoth real estate deal if it happened. The people who are reportedly going to be in on it were Dmitry Firtash, the oligarch guy who is in on the gas deal in Ukraine that Putin set up for him, Dmitry Firtash, and Paul Manafort, and a guy who made his career in New York real estate working for Donald Trump`s dad. That was the group that was going to remake the Drake Hotel, make it into a Bulgari Tower, in a deal that was worth about $850 million.

Now, for a variety of reasons, that huge deal never happened. But "The New York Times" reported last week that as of December 2015, right before Paul Manafort became chair of the Trump campaign, documents that "The Times" reviewed showed that business entities related to Paul Manafort owed business entities related to Dmitry Firtash millions of dollars. Like nearly $10 million.

Now, Paul Manafort, after "The Times" published that story, Paul Manafort was reportedly upset with that reporting. He wanted a retraction of that reporting. But "The Times" is standing by its story.

And that is starting to seem like it`s getting very important, because now there`s this -- Dmitry Firtash, the oligarch who Manafort was going to do that $850 million Drake Hotel deal with, Dmitry Firtash has been popping up in U.S. news off and on for a few months now, because the U.S. Justice Department has been trying to extradite him to the United States to stand trial. This is a fairly baroque case. It involves an alleged plot to bribe government officials in India, to allow him to mine titanium in that country, that he would then sell to Boeing for airplane parts. This is a case that`s been going on for a while.

But now, as of last night, the Justice Department has just made some new filings in the case against Dmitry Firtash, Paul Manafort`s old reported business partner. And these new filings from the Justice Department make two new very serious claims. One, which was first reported by the "Associated Press", is the Justice Department allegation that Dmitry Firtash wasn`t just trying to pay bribes in India, he was trying to pay bribes in the United States as well. That`s the first new claim.

The second new claim that the government is making, the one that`s rattling around like a ricochet inside a shooting range is newly reported tonight from NBC News, according to NBC`s review of these new court filings from the Justice Department, the Justice Department is now alleging that Dmitry Firtash, the major funder of the pro-Putin political party that Paul Manafort works for, the Putin-connected oligarch to whom Paul Manafort had contested, but reportedly very large financial dealings right up until the time he joined the Trump campaign, the Justice Department now says that Dmitry Firtash is not only wanted in the United States, they now say he is a high-ranking figure in the Russian mob.

Quote: The Department of Justice has identified a former business associate of ex-Trump campaign manager Paul Manafort as an upper echelon associate of Russian organized crime. Quote: The government says that prosecuting Firtash and his co-defendant in this alleged scheme will disrupt this organized crime group and prevent it from further criminal acts within the United States.

Now, this is the stance as of right now, of the U.S. Justice Department. And this is bad news for oligarch Dmitry Firtash, obviously, right? This is also troubling news for the White House. If the investigation into the Trump campaign and its potential ties to Russia has now taken a turn toward exploring financial connections and business arrangements, right, well, a direct financial and business and political link between the Trump campaign chair and someone who the U.S. government is now naming as a major figure in Russian organized crime, that is an unsettling thing. At least that must be an unsettling thing for the White House.

Now, when it comes to these alleged linkages, Paul Manafort is distancing himself from Dmitry Firtash. He`s playing down that Drake Hotel deal that they tried. He`s telling NBC News there was no real business relationship between them. He says, quote, there was one occasion where an opportunity was explored, nothing transpired, and no business relationship was ever implemented.

Well, the Justice Department is after this guy now. He faces up to 50 years in prison, and confiscation of all his many, many, many assets if he`s convicted. And because he has all the money in the world, courtesy of the very nice business deals that Putin`s Gazprom set him up with, Dmitry Firtash has used some of his gazillion dollars to hire a top-shelf array of the most expensive American lawyers that money can buy as the U.S. Justice Department tries to extradite him.

And so, it`s going to be a fight. And the fight will be between his very, very high-paid lawyers, and the criminal division of the U.S. Justice Department. And the criminal division of the U.S. Justice Department until now in this administration has been run by an acting director of that division, left over from the Obama administration, then left over from the George W. Bush administration before that, career person, but now, the Trump administration has picked somebody new for that job.

Running the criminal division of the Justice Department is a huge deal. It is a huge and important job. The Trump administration`s pick for that job is Brian Benczkowski. Now, thanks to reporting this week in "The New York Times" and what came out in his confirmation hearing yesterday, we now know that Brian Benczkowski after he left the Trump transition, he went to work representing a Russian bank called Alfa Bank. Alfa Bank is linked very closely with Vladimir Putin.

Alfa Bank featured prominently in a controversy last year concerning unexplained electronic communications during the presidential campaign between servers -- computer servers connected to Alfa Bank and computer servers connected to the Trump Organization. Well, we learned at Benczkowski`s hearing this week that the time, that his time working for Alfa Bank isn`t` some like long-standing relationship that`s vestigial and he now has to explain going back years. He started working for Alfa Bank this year, after all that controversy about Alfa Bank in the Trump Organization during the campaign. He started working for Alfa Bank after he left the Trump transition earlier this year.

We also learned that he was still working for Alfa Bank when the Trump administration asked him to take this very high-level job at the Justice Department. And we learned that if he is confirmed to run the criminal division of the Justice Department, he said he will recuse himself from matters involving his client Alfa Bank directly, but he will not say if he will recuse himself from any investigations, any prosecutions related to any ties between Russia and the Trump campaign.

In April, he found out he was up for this job of leading the criminal division at the Justice Department. He found out that in April. He stayed on representing this Russian bank until June, until the day he was formally nominated.

Head of the criminal division at Justice is a really big freaking deal. That -- for example, that`s the job that Robert Mueller used to have before he was FBI director. Is there really no one available for that criminal division job who did not represent a giant Putin-aligned Russian bank until last month? Especially given how many existing Justice Department prosecutions the Trump-Russia investigation is now apparently picking up like iron filings clinging onto a magnet?

There`s a lot going on right now. Just tonight on this show, we`ve got three different experts lined up for this show. All here live to talk about this civil rights and military readiness bomb that the president just threw on transgender service members.

We`ve also got Senator Amy Klobuchar live to talk through what the Republicans are doing on health care tonight as they continue to try to strip health insurance from in their new bill. The newest estimate is 16 million Americans.

But as we`re approaching all that stuff that`s going on in the news tonight, it is worth appreciating why some of this may be happening, at least in terms of stuff coming from the White House. It`s worth appreciating how much the president`s back is up against the wall on everything right now, because of this existential scandal that is getting worse and worse for him, not better, and getting closer and closer to him in terms of what matters the most to him.

This week, we have learned that his daughter, Ivanka, has hired a top-tier defense lawyer. This week, his daughter`s husband, president`s son-in-law and senior adviser, just gave two days of testimony into the intelligence communities in the House and Senate. This week, his campaign chairman Paul Manafort briefly stared down his first subpoena on the Russia issue, and then slipped in behind closed doors quietly to start talking to the Senate Intelligence Committee about the meeting he attended on behalf of the Trump campaign last summer with Kremlin emissaries who were promising dirt on Hillary Clinton that was overtly sourced to the Russian government. He reportedly handed over his notes from that meeting that he took contemporaneously. That`s all happened this week so far. And it`s only Wednesday.

And tonight`s the night we`re learning that his former business -- the Trump campaign`s former business associate is now being named by the Justice Department as a major figure on the Russian mob.

This week the president`s oldest son, his namesake, also started working out the terms of his own testimony to the investigating committee. Among the documents Donald Trump Jr. has been told to retain are any communications he had with the Alfa Bank. The Putin-connected bank allegedly linked to the Trump Organization, and definitely linked to the new guy Trump wants to put in charge of all criminal matters at the Department of Justice.

In addition to his daughter Ivanka`s new lawyer on Russia matters, Donald Trump Jr. also this week reportedly retained at least one new lawyer, in addition to the one he got earlier this month whose fees he`s already started charging to the Trump reelection campaign. That`s what your make America great again hats are buying you guys. Those hats are buying Donald Trump Jr.`s legal defense fees in the Russia scandal.

And so, the investigation into the Russia issue right now is getting very close to home for the president. Is that bothering him? I don`t know how to tell. Is that affecting his sense of risk and reward when it comes to drastic actions that he could take as president of the United States? What do you think?

I mean, this is a president who has already seen the resignation or the firing of the White House communications director, the White House spokesman, the national security adviser, the deputy national security adviser, a different deputy national security adviser, the ethics chief for the government, the acting attorney general, the deputy White House chief of staff, the vice president`s chief of staff, oh, and the FBI director.

"The Washington Post" just reported a few minutes ago that on top of all that, the current White House chief of staff, Reince Priebus, is now fighting to keep that job in part by promising that he could raise a lot of money from Republican donors for the legal defense funds of various Trump campaign and White House officials.

Quote, Priebus is fighting to maintain his influence with the president. The former Republican Party chairman has privately touted his ability to raise money from wealthy donors. Suggesting he could bring in funds to a legal defense fund.

If that is the thread that the chief of staff, the White House chief of staff is hanging by as of tonight, presumably we can put White House chief of staff, at least put him -- get ready to put him on that list as well.

But, I mean, despite all of that already, the president continues to go for it, even more aggressively and even closer to the man who`s running the Russia investigation. I mean, even with all those people gone, now he has taken to maligning and threatening the current head of the FBI, the acting FBI director, and the deputy attorney general who`s overseeing the Trump- Russia investigation by the special counsel, and, of course, he is maligning and threatening his attorney general on a more than daily basis now as well.

Now, there is a problem, though, for him with the attacks that he`s been launching against his own attorney general. The problem for him politically is that him turning against Jeff Sessions, the attorney general, however helpful that might be if he wants to ultimately train his sights on Bob Mueller, the special counsel in the Russia investigation, if Trump has to chew up and spit out Jeff Sessions in order to get at Mueller -- well, the far right social conservative edge of his base is going to hate that because they love Jeff Sessions, right? So, how do you solve that problem?

Where you really need to get rid of Jeff Sessions if you want to get at shutting down the Russia investigation? But your far right social conservative base really loves Jeff Sessions. How do you thread that needle?

Well, you could try a whole new round of vituperative anti-immigrant rhetoric that borders on violent. You could also try a brand-new out-of- the blue culture war civil rights disaster that you launched preemptively and without warning. "Politico" tonight is calling it a snap decision, a snap decision. Take a wild swing, Mr. President, see what you hit.

After enjoying facile, vapid beltway reporting during the campaign that suggested that maybe he`d be awesome on LGBT issues, the president today announced on Twitter, but apparently didn`t technically issue an order and didn`t warn the Pentagon ahead of time, but he nevertheless proclaimed on Twitter that he is now banning transgender troops from serving in the armed services.

There are thousands of transgender troops serving openly in the armed services already. Honestly, it is not at all clear to me that the president knew that when he made these announcements this morning or on Twitter. It`s also not clear that the Pentagon is going to do what he said on Twitter, because nobody understands what he`s talking about, what the rationale is for this change, or even what the change should be. So it makes no sense, it is designed to hurt currently serving active duty service members, and the military itself.

But the president appears to be betting that if, in his ongoing wave of panic, he feels like he conservative attorney general without his hard-line conservative base being too mad at him about it, the president appears to be calculating that maybe this wild punch will make them happy, no matter what else damage, no matter what other damage it does to the country. That appears to be the calculation here, that no matter what damage this does, maybe it will make the kind of people who are mad at him about Jeff Sessions, not so mad at him about Jeff Sessions anymore.

That is our best guess at what he has calculated here. But we will help him do that math, straight ahead. Stay with us.

(COMMERCIAL BREAK)

MADDOW: It took President Barack Obama nearly two years in office to get the repeal of "don`t ask, don`t tell" through Congress so he could sign it. The process included major -- a major comprehensive review by the armed services to evaluate the potential impact of the change in policy before they decided formally to go ahead with it. Another eight months would pass after the signing before President Obama officially certified that the military was ready for the full inclusion of openly gay troops in the armed forces. Even then, even once he certified that they were ready, even then, he still set the official end of that policy for 60 days after he signed the certification.

Ending the ban on gay people serving in the military openly was a long and slow and deliberative process. Sometimes painfully slow. Especially for service members who were at risk from the old "don`t ask, don`t tell" policy. Sometimes those of us watching that process thought it was moving so slowly, we thought they couldn`t possibly get it done. But people like me were wrong about that. The Obama administration and the military absolutely got that done, over time, and slowly. But they got it done.

Then last year, they started again on a new policy. After months of study by the military, Defense Secretary Ash Carter announced in June 2016 that transgender troops would be allowed to serve openly. The administration opened the way for LGB troops previously. The new policy extended equality and the right to serve openly to transgender troops. LGB, and now, T. They could all serve openly in the U.S. military according to their abilities.

With that policy in place, there are now as of right now tonight, thousands of transgender people serving in our military, many of them serving openly, many of them serving in war zones. Now as of today, that has all been thrown into policy chaos with no warning, and no prep at all from this new president.

In a series of tweets that surprised just about everybody, including Congress, including the Armed Services Committees, including the Pentagon, the new president appears to have up and ordered a brand-new policy. Quote, please be advised, as if it`s a PSA, please be advised that the U.S. government will not accept or allow transgender individuals to serve in any capacity in the U.S. military.

So, that`s the new policy now today? Does it count as a policy if he just posted it on Twitter?

It is true that the commander-in-chief could order a policy change like this, but this isn`t typically the way you do it. What does it mean for the thousands of service members who will be directly affected by this decision? What does it mean for the military leaders that have to carry out whatever it is that the president intends to have happen here? What exactly is the Defense Department supposed to do right now?

We`re going to be speaking with a transgender service member in just a moment. But joining us first are Sue Fulton. She was a member of the first West Point class to admit women. She`s the leader of the effort to repeal don`t ask, don`t tell. Joining us also is Allison Jaslow, a former army captain now executive director of IAVA, Iraq and Afghanistan Veterans of America.

Thank you both for being with us tonight. I really appreciate you both being here.

SUE FULTON, OUTSERVE FOUNDING MEMER, U.S. ARMY VETERAN: Thank you.

ALLISON JASLOW, EXECUTIVE DIRECTOR, IRAQ AND AFGHANISTAN VETERANS OF AMERICA: Thank you for having us.

MADDOW: Allison, let me start with you. Part of the reason I wanted to talk with you is that IAVA was the only major national veterans service organization that came out overtly and supported this change in policy last year when the Obama administration announced it.

Was that a tough political fight for you guys? Was there backlash? Has there been difficulty for you as an organization for the veterans that you represent since that change was made?

JASLOW: Listen, you know, this is something that a lot of people have different political opinions about. But I will tell you that the majority of our members say that this will not harm the military, and unit cohesion. So, at a principle level, easy for our organization to make sure that we are on the right side of what is going to be a policy that`s going to make our forces stronger.

MADDOW: Or at least that was going to. It may be off the rails now.

JASLOW: Well, we don`t know.

MADDOW: Yes, Sue, do you understand -- first, you`re very well-connected in these circles, I know. Did you have any idea this was coming? Did the Pentagon have any idea this was coming? Does anybody know what has just happened in terms of policy?

FULTON: As near as we can tell, no one knew this was coming. As near as we can tell, no one in the Pentagon knew this was coming. And certainly, our troops didn`t know.

So, the question is, what does this mean? I talked to one of our infantry soldiers today and -- who is worried, but whose commander pulled together leadership and said, military policy isn`t made by tweet. It`s business as usual. They`ve let that trans soldier know that she has their support.

MADDOW: That`s happening on the --

FULTON: On the ground. At the unit level, we`re hearing over and over from the chain of command -- they`re outraged. Our folks say, I came in, and they`re like, we have your back.

So there`s sort of -- I mean, you know, troops are going to be very careful. They work for the commander-in-chief. But there is a sense that, wait, we`ve now been serving for a year. We`ve got transgender folks, we`ve got commanders. We`ve got drill sergeants, pilots, submariners, special operators, doctors, marines.

MADDOW: Serving openly.

FULTON: Serving openly as transgender. And so, you`re going to pull them out of their unit. They`re battle buddies. Their commanders are going to say, this is going to have an impact on my ability to do the mission.

MADDOW: Has there -- this is for either for you. Has there ever been a -- I should know this. But I can`t think of anything. Has there ever been a policy change in the United States military where the commander-in-chief, or somebody else in a command position, ordered that a certain class of Americans was no longer eligible for military service, and had to be excluded even though they were already serving in the military? Has that ever happened before?

JASLOW: This is actually unprecedented. You know what I think about is, I think about when I was a platoon leader in Iraq, and you`re not just thinking about the service member who may be openly transgender who`s on the ground, fighting ISIS right now, but think about all the other troops that that platoon leader or that commander has to keep calm, has to keep focused. You know, the president talked about how a policy like this could be disruptive. I think what`s more disruptive is shoot from the hip tweeting and making policy decisions when our troops are on ground trying to fight in a war.

What they need to be doing is focusing on the mission, and they need to know that their commander in chief has their back.

MADDOW: Yes, but we really are in -- it`s sort of an implementation tabula rasa here. I mean, the military is a can-do organization. I think back to the implementation of "don`t ask, don`t tell." And probably, the marine corps was probably the branch of the armed services that was the most resistant to that at the leadership level, and even among the low ranking U.S. marines. But when the command came down that the "don`t ask, don`t tell" was gone, and people could serve openly, the Marine Corps was like more gung-ho than anybody else in terms of can-do.

If this is the change in policy, we`re United States Marines Corps, we`re going to get this done better than any other service.

FULTON: They execute it with excellence.

MADDOW: And so, how do you execute this?

FULTON: No one -- there`s -- look, there`s not a plan. There`s not a time line, there`s not a policy. They`ve already rolled out training. In fact, folks said it`s very good training, as a matter of fact. You`re moving a soldier from box A to box B. Male to female, female to male, and driving on.

So they`ve already incorporated this. So, there`s just -- there`s no way - - no one knows exactly how does this roll out, because you`ve got to have a plan. Like you said, the military needs a plan.

MADDOW: Honestly, is the directive to go ferret out, to go hunt out service members who may be transgender and not serving openly? I mean, is that --

JASLOW: I think the fact that there are so many question marks is concerning.

MADDOW: Yes. Sue Fulton, Allison Jaslow, thank you both for being here.

This is an unusual discussion, because we really don`t know what`s going to happen next. But stay in touch with us, and especially in terms of your members and who you`re in touch with and how this is being received.

FULTON: Roger that.

MADDOW: We have much more tonight, including someone for whom the news today was a real personal gut punch.

Plus, we`ve got Senator Amy Klobuchar on deck tonight. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Before and after. The difference between how you looked and what you wore, when you first arrived at boot camp. And then they gave you a uniform, and then a hair cut.

That distance from you on day one, standing in your very first real military lines, at the moment weeks later when they marked your transformation from recruit off the street to U.S. marine. Before and after transformation, inside and out. It`s part of joining the military.

Our next guest is U.S. military veteran who went through three distinct transformations in his military career. Shane Ortega became a U.S. marine and then he became a U.S. army soldier, while on active duty with tours in Iraq and Afghanistan, Staff Sergeant Shane Ortega came out as transgender. Sergeant Ortega left active duty a year ago in July 2016 which happened to be one month after President Obama lifted the ban on transgender people serving openly in the military.

Sergeant Ortega is now an advocate for transgender service members. He joins us tonight as this new president has just sowed chaos. The old policy that says it`s OK to serve openly in the military as transgender service member, that policy is still up on the Department of Defense website right now. Nevertheless, the president has announced on Twitter that there will be no more transgender service members, even as thousands of them currently serve in the Armed Forces. This is chaos for all of us trying to make sense of it tonight. But from having been in the middle of it, I can`t imagine how it feels.

Sergeant Ortega, thank you very much for being with us tonight. I really appreciate your time.

SHANE ORTEGA, U.S. ARMY/U.S. MARINES VETERAN, SERVED IN IRAQ & AFGHANISTAN: Oh, thank you, Rachel, for inviting me. I greatly appreciate you caring about this very important issue.

MADDOW: Oh, I do care about it. And I`m absolutely flummoxed as to what is going to happen here, what the president expects is going to happen here. Let me just get your top line reaction, how you heard about this today and how you felt about the news.

ORTEGA: To be quite frank, it was gut-wrenching. It feels like the president doesn`t appreciate any of my personal service or dedication to our country, and to the defense of our people. But, personally, I found out about this because I received a phone call from an actively acting transgender service member about 5:00 a.m. this morning Pacific Time.

MADDOW: And your friend who contacted you, any other transgender service members he`s spoken to today, can you tell us anything about their reactions?

ORTEGA: I haven`t been able to reply back to every single call, but right now I have over 90 different phone calls from different active openly serving transgender service members who are incredibly concerned about what this means not only for their service careers in the military, but they`re also highly concerned about what this means for the United States citizens, when somebody starts attacking people with this sort of discriminatory and bigoted policies.

MADDOW: Do you have any sense -- obviously, as a policy matter, we don`t really know what the president did today. He made this proclamation. He doesn`t appear to have followed it up with any other sort of formal order. Clearly, the Pentagon had absolutely no idea this was coming and certainly had done no preparation for it.

It`s the exact opposite of the kind of process that we saw in terms of the Obama administration -- for example, getting rid of "don`t ask, don`t tell" and lifting the ban on openly transgender people serving, because of that, just as a policy observer, it`s hard to tell. If the military did decide to take this as an order, and try to implement this policy, do you have any sense of how they would do it, or how they could do it if they wanted to?

ORTEGA: Well, as a retired staff sergeant, I have to think about my experience as a mid-level supervisor. This would have to be something that came down from the Department of Defense itself. They would have to write a formal policy that would therefore then be handed to the headquarter departments of each of the branches of service to interpret the policy and then begin the implementation period, so that you can`t just sort of do these idle threats, which is exactly what Donald Trump is doing right now, using social media to implement policy.

It is not in an official capacity, but it would have to be an official policy that`s concise, given to the headquarter departments to be actually implemented.

MADDOW: Do you expect that will happen? Do you -- in terms of -- I mean, you`ve been a keen observer how the policies have changed over the years thus far. What`s your expectation?

ORTEGA: Not to be sort of Machiavellian, but I was not surprised by the action taken by Donald Trump. I actually sent out a tweet on July 13th about this particular potential that was happening, because right now, Donald Trump is lashing out at any capacity that he can to bring attention to himself, and to detract from his basically incompetence in office right now. And I think that -- I`m sorry, can you repeat that one more time?

MADDOW: I was going to say, what do you think is going to happen here?

ORTEGA: I think what`s going to happen here is there`s going to be a lot of panic, you know? What we could call this is what I call a fire cell of people, where everyone is rushing to the door, trying to figure out exactly the plan of action, to not only protect the service members, but also the plan of action to protect the infrastructure and the cohesion of the military as an establishment.

MADDOW: Shane Ortega, retired military staff sergeant, now an activist working for LGBT equality in the military -- I really appreciate your time tonight, and especially because you`re in touch with so many active duty transgender members who are trying to figure out what to do tonight. I would love it if you would stay in touch with our staff and let us know what happens with folks that you know over the next few days.

ORTEGA: Absolutely. It`s so important. And I really appreciate you giving me this time. It`s really important for the American public to get involved with the policy that is happening right now.

MADDOW: Thanks, Shane. I appreciate your time tonight, man.

All right. We`ve got much more to come tonight. There`s a lot going on. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Amid speculation and I think now anticipation, that the president might be considering drastic action to try to end the Russia investigation, that he might fire the attorney general and then install a replacement attorney general while the Senate is in recess, so that replacement wouldn`t have to go through Senate confirmation. Amid those expectations, the Senate Democrats now say they`ve got to find a way to stop that. Senate Democrats now they will block any attempt by the president to do that because they have a technical way that they can block the Senate from ever technically going into recess.

The Senate doesn`t go into recess. He can`t issue a recess appointment. He couldn`t replace Attorney General Jeff Sessions without somebody having to go through the confirmation process.

This news from the Senate Democrats comes as the "Washington Post" is reporting tonight that the president is talking privately about firing Jeff Sessions and replacing him in a recess appointment. According to "The Post", several of his top advisers are warning against it, but the president is apparently discussing this option.

Even if the president doesn`t go the recess appointment route, though, and decides that he`s going to fire Jeff Sessions and appoint a new attorney general after the recess, well, tonight we`re learning that that might run into difficulty as well. The Republican chairman of the Senate Judiciary Committee, which would have to oversee the confirmation process for attorney general, Chuck Grassley, he`s just released this tweet within the past hour or so. As you can see that he tends to write kind of in like English style hieroglyphics, but you can suss out what he means here.

Everybody in D.C. should be warned that the agenda for the Judiciary Committee is set for the rest of 2017. Judges first, subcabinets second, A.G., no way.

Every time he tweets it`s like a cheer. Not people cheering for him, it`s like he`s leading somebody in a chant, you know what I mean? U-G-L-Y, you ain`t got no -- anyway.

Again, the top Republican in Senate Judiciary saying by cryptic tweet tonight that even if the president fires Jeff Sessions, and puts in somebody else, the committee that would have to consider such a nomination would not even consider that nomination for the rest of this calendar year. So, that`s just happened within the last hour or so.

Joining us next, live, is one of the top Democrats who`s on that committee. We`ll have a lot to talk about. That`s next.

Stay with us.

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MADDOW: This was the front page of the local paper in Maryville, Tennessee, today. You see the headline, page one: Hanging in the balance. Underneath that on the left is an article explaining that the Senate voted yesterday to start debate on repealing Obamacare.

On the right side under that headline with a lot more real estate is this story. Quote, Maryville mom of premature twins lobbies Congress to maintain the Affordable Care Act. That paper, "The Daily Times", is the hometown paper of Republican Senator Lamar Alexander, who has been a vocal proponent for a long time of killing the Affordable Care Act.

Last night, he voted with the majority of his party to kill the ACA, although that vote failed. Republicans then gave it another go this afternoon. They called for a vote on a straight repeal of the affordable care act with no replacement, and that vote failed for the Republicans as well. But that vote failed, thanks in part, to Lamar Alexander from Maryville, Tennessee. He actually voted for that exact same bill in 2015, but today he was one of six Republican senators to turn around and flip his vote to no.

In Philly today, Senator Pat Toomey`s constituents showed up to his office to tell him to vote no.

Dean Heller`s constituents turned out in Carson City, Nevada, today. Senator Heller was another Republican senator who voted yes to repealing the ACA in 2015, but he changed his mind today.

In Maine today, Senator Susan Collins` constituents showed up to thank her for voting no, encouraging her to keep it up.

Republicans are nevertheless apparently going to make at least one more try to kill the Affordable Care Act. The Congressional Budget Office just released their analysis of what their next try would do to the country. It says 16 million Americans would lose all health insurance and congressional staffers tell NBC News it would also result in a spike in health insurance premiums.

Well, tonight, 10 governors, six Democrats and four Republicans, have written to Senate leaders asking them not to even take up this bill. Meanwhile, Senate Democrats had planned to stall the process further by submitting hundreds of amendments to whatever bill the Republicans came up with. Now they`ve changed tact, and the Democrats say they`re refusing to submit any of their amendments until they see the final text of the Republicans` bill, which incidentally the Republicans still have not released. What should we make of that?

Joining us now, Senator Amy Klobuchar of Minnesota.

Senator, really nice to have you with us tonight. Thanks for being here.

SEN. AMY KLOBUCHAR (D), MINNESOTA: Thanks, Rachel.

MADDOW: Can you get us up to speed of where things stand? That was my little summary of where we`re at.

KLOBUCHAR: That was pretty good.

MADDOW: I don`t understand the amendments decision. What does that mean?

KLOBUCHAR: Well, that was a smart move on our part because of the fact that we don`t even know what this bill is. How can we start talking about amendments until we see the bill? They have already created chaos with all of these options, option A, B, C, D, E. We`re up to F, and you can`t get much worse of a grade than F.

They have been calling this the skinny -- the skinny proposal as you know. The skinny plan. To me, when you look at that CBO score today, the Congressional Budget Office score, this is nothing but a skin and bones plan. That`s what it leaves so many Americans with.

Sixteen million people would be kicked off their health insurance, premiums up by 20 percent. And not only that, one sixth of the American economy in complete chaos because there would be no end result because even if they passed this, they would then go home, and there would be no conference committee of course yet with the House.

And I have no idea why they`re doing this when we have people that could work together. We have opened the doors and said, let`s work on reducing prescription drug costs, strengthening these exchanges and making them more affordable. That`s what we would like to do.

MADDOW: I know that the Democrats have been a united front on this. Democrats have been voting no on all of these ACA repeal bills no matter what they are. Is it your sense, though, that the Democrats -- sorry -- that the Republicans are going to be able to put together enough votes to pass something?

My sense is that they don`t really care what they`re going to pass as long as it gives them something that they can put to a conference committee and start working on behind closed doors with the House. Do you think they`ll be able to pass something, this skinny bill or anything else?

KLOBUCHAR: I mean, I can`t tell right now. If they did have something, they would have put it forward, and they haven`t. And when you look at the votes, sometimes there`s four. Sometimes there`s eight.

Of course, we had Lisa Murkowski and Susan Collins showing such courage and standing up to all of this. But we don`t know. And they could end up passing somewhat they call skinny, but what I call, as I said, skin and bones because it leaves so many people without insurance.

And that has got to be something that we continue -- as you can see by those people showing up at offices across the country, I was on Sunday with a pair of twins, identical twins. One`s a catcher. One`s a pitcher. One has juvenile diabetes, one doesn`t.

And the mother is afraid that the girl that has that disease won`t be able to get insurance because she has a pre-existing condition, not too mention too expensive insulin. And that`s just not how America should work. It shouldn`t be a lottery system where you don`t know if you`re going to have health care if you`re the pitcher or the catcher when you`re identical twins. That`s just wrong.

MADDOW: Senator, let me ask you about some news that was made by the committee chairman on the Judiciary Committee of which you are a member tonight. Senator Grassley tweeted somewhat cryptically in his typical Twitter style that if the president tries to replace his attorney general, tries to get rid of Jeff Sessions and put another one through the confirmation process, calendars all full, sorry, won`t happen all year long.

We`ve also seen the Democrats on your side of the aisle say that if the president wants to try to do this without a confirmation process, put somebody through as a recess appointment, Democrats will just prevent the Senate from recessing and he won`t be allowed to do it that way either.

Where do you think this is going to go? What do you think will happen with this standoff between the president and his own A.G.?

KLOBUCHAR: Well, first of all, Senator Grassley is expressing the sentiments of a lot of Republicans including Senator Lee just yesterday in the Judiciary Committee came out strong, even saying he didn`t agree with Jeff Sessions on a number of things, including criminal justice reform, but this isn`t the reason to fire him.

On the Democratic side, I guess this is the point of the program where Amy Klobuchar gets to defend Jeff Sessions. As you know, I did not vote for him. I disagree with him vehemently in his positions on immigration, his position on voting rights and other things. But you don`t fire someone for following the law.

In this case, he simply recused himself from anything dealing with Russia because of his past involvement and meetings with the Russian ambassador and other issues. And he gave that job to his deputy, as is appropriate, Rod Rosenstein, who has in fact appointed a special counsel, who was an FBI director under a Republican administration, well-respected on both sides of the aisle.

And so, that is why you see Democrats saying no, the president cannot fire the attorney general. I guess he legally can, but should not fire the attorney general, joining Republicans saying this, over matters related to Jeff Sessions simply following the law. And that is all he`s done. He has recused himself and put someone in charge.

MADDOW: Yes, it`s no love letter to Jeff Sessions to say that. It`s about following the law here.

Senator Amy Klobuchar, thank you for being with us tonight. Nice to have you here.

KLOBUCHAR: It was great to be on, Rachel. Thanks.

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

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MADDOW: One of the things we are going to be watching for tomorrow on Capitol Hill is day two of the hearing that`s going to be convene by the Judiciary Committee. Senator Chuck Grassley is the chair of that committee. Today, it didn`t -- day one didn`t get much attention because the president blew up the transgender policy in the military, and the health care fight and lots of other things going on.

But tomorrow will be day two of the Judiciary Committee holding hearings that appear to be designed to make it seem like the real Russia scandal has nothing to do with the Trump Organization. The real Russia scandal is a Democratic scandal.

We`ve been talking for several days about Chuck Grassley`s efforts to try to turn the Russia/Trump scandal around and try to make it into a kind of counter-narrative, it`s all about Hillary Clinton. It`s all about the Democrats thing. That got pushed from today until tomorrow. We`ll be watching for that tomorrow on Capitol Hill.

That does it for us tonight. We`ll see you again tomorrow.

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

Good evening, Lawrence.

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