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The Rachel Maddow Show, Transcript 7/31/2017 Scaramucci Out

Guests: Carol Leonnig, Jonathan Swan, Michael McFaul, Elizabeth Esty

Show: THE RACHEL MADDOW SHOW Date: July 31, 2017 Guest: Carol Leonnig, Jonathan Swan, Michael McFaul, Elizabeth Esty

JOY REID, MSNBC HOST: Thanks very much, Chris. Have a good rest of your night.

All right. And thanks to you at home for joining us. Rachel has a well- deserved night off.

So, there`s a ton going on in the news tonight.

We`ve got the latest White House staff shake up to talk about. There`s the attempts to revive the you thought it was dead but not quite dead Republican drive to repeal and replace Obamacare. Plus, a new bipartisan plan to rework it, instead, and Donald Trump`s threats to insured people and lawmakers on that score.

So, there`s a lot to get to in this hour.

But we begin tonight with some very new news about one of the biggest stories of the entire Trump/Russia investigation. It concerns the meeting that Donald Trump Jr. had with several Russian nationals, inside Trump Tower during the campaign, in June of 2016. That meeting included campaign manager Paul Manafort and Trump`s son-in-law, Jared Kushner, and we now know multiple Russians with ties to the Kremlin.

When that story broke in "The New York Times" back in July 8th, the report included a written statement from Donald Trump Jr., describing the meeting like this.

Quote: It was a short introductory meeting. I asked Jared and Paul to stop by. We primarily discussed a program about the adoption of Russian children that was active and popular with American families years ago and was since ended by the Russian government. But it was not a campaign issue at the time, and there was no follow up.

Well, we soon learned that the meeting was much more than a short introduction and that Trump`s inner circle did not go to that meeting, expecting to hear more about adoption. Donald Trump Jr. released the e- mail chain, showing the back and forth that he had with the person who appears to have set the meeting up.

The person in question, Rob Goldstone, wrote that the top Russian prosecutor had offered to, quote, provide the Trump campaign with some official documents and information that would incriminate Hillary and her dealings with Russia, and would be very useful to your father. This is obviously very high-level and sensitive information, but it is part of Russia and its government`s support for Mr. Trump. And then, Don Jr. responded in part, if it`s what you say, I love it.

Now, obviously, that is very different from what Donald Trump Jr. -- from Donald Trump Jr.`s first pass at explaining the meeting. When he issued that statement, saying it was a, quote, short introductory meeting.

Well, tonight, we have breaking news about how that statement got drafted and by whom. And we had known that the statement was crafted by the administration, with input from the president on the flight back from the G20 Summit, immediately before the story broke.

What we did not know was that the president personally drafted the statement that is -- that`s the reporting tonight from "The Washington Post."

Quote: On the sidelines of the Group of 20 Summit in Germany last month, President Trump`s advisers discussed how to respond to a new revelation that Trump`s oldest son had met with a Russian lawyer during the 2016 campaign. A disclosure the advisers knew carried political and potentially legal peril.

The strategy, the advisers agreed, should be for Donald Trump Jr. to release a statement to get ahead of the story. They wanted to be truthful, so their account couldn`t be repudiated later if the full details emerged.

But within hours, at the president`s direction, the plan changed. Flying home from Germany on July 8th aboard Air Force One, Trump personally dictated a statement in which Trump Jr. said he and the Russian lawyer had primarily discussed a program about the adoption of Russian children. When they met in June 2016, according to multiple people, with knowledge of the deliberations, the statement, issued to "The New York Times," as it prepared a story, emphasized that the subject of the meeting was, quote, not a campaign issue at the time. The claims were later shown to be misleading.

Further down in "The Washington Post" story, quote: As special counsel Robert Mueller investigates potential obstruction as part of his broader probe of Russian interference in the 2016 election, these advisers worry that the president`s direct involvement leaves him needlessly vulnerable to allegations of a cover-up. Quote: This was unnecessary, said one of the president`s advisers, who like many other people interviewed for the story spoke on condition of anonymity to discuss sensitive internal deliberations.

Now, someone can claim he`s the one who attempted to mislead. Someone could argue the president is saying he doesn`t want you to say the whole truth.

Now, just in the past few minutes, NBC News has gotten a statement from one of the president`s outside lawyers. Responding to this reporting from "The Washington Post", attorney John Dowd calls the report: Fake news, incorrect, and misinformed and of no consequence.

Joining us now is Carol Leonnig, and she`s one of the reporters who broke this story for "The Washington Post" tonight.

So, Carol, thanks very much for joining us.

So, the president`s lawyer is saying that your story is fake news. First of all, can you tell us how many people are corroborating that this account occurred, saying that Donald Trump was the one dictating the talking points? You can`t tell us who, but tell us how many, maybe?

CAROL LEONNIG, THE WASHINGTON POST: I can tell you, it`s multiple people from lots of different walks of life, Joy, and these people have, you know, put themselves in the line, in a way, to tell the full story. I think it`s a fairly simple story. It`s that the president who believes that he`s the best politician. He`s the best advocate for himself.

And now, it`s becoming clear he thinks that he has the best sort of legal strategy, took this dilemma, as he viewed it, by the horns, and decided he would decide how it was going to be handled, and how the public would learn about this meeting, and how it would be characterized.

REID: And did the people that you talked with explain how Donald Trump settled on the idea of adoptions as the excuse for the meeting?

LEONNIG: Well, you may remember, Joy, that this meeting was a place where the Russian lawyer, Natalia Vessel -- I cannot pronounce that name --

REID: Veselnitskaya.

LEONNIG: thank you. She actually did talk quite a bit about Russian adoption and American adoption of Russian children. That was a subject that she brought up in the meeting according to people who were present.

It`s just that the reason that Donald Trump Jr. came to the meeting and the reason that he said so eagerly and excitedly, I love it, is because his trusted family liaison told him that it would be a meeting where he would get incriminating information about Hillary Clinton. Remember, this meeting happens in June 2016. It`s sort of the height of the war between the two candidates. And Donald Trump`s campaign is not doing that well, even though he`s the presumptive Republican nominee.

There are a lot of people who believe the polls at that point that Hillary Clinton is far away in the lead. And Donald Trump Jr. gets this offer and agrees to take it. What is striking about what we have learned is that the president did not want to describe the actual story of what happened. And he had not just a hand in it, but the most important hand in it.

REID: And we know that Donald Trump did, himself, use the adoptions talking point in his "New York Times" interview, when he`s asked a question about Melania sitting next to Vladimir Putin, he sort of spontaneously brings it up. So, obviously, you know, he believed in that talking point. According to your reporting, did anyone in Trump`s inner circle maybe push back on this idea of using adoptions, A, because at some point the actual contents of the Donald Trump -- you know, discussions, the Trump Jr. discussions about setting up this meeting could leak out and they could be proven to be wrong, or saying the word adoptions, would trigger questions about the Magnitsky Act?

LEONNIG: I don`t think there was a lot of concern about what words would trigger what. It was, you know, remember that the attorneys for Jared Kushner are the people who first find this information. They`re trying to respond to congressional committee`s request for information. And so, a couple of weeks before the G20 Summit, where the president decides to dictate this statement, and they deal with a question from "The New York Times," Jared Kushner`s lawyers are finding these e-mails and realizing, uh-oh, we have this meeting, and we`ve got to explain it.

So, there is a full-throated discussion about the strategy, should we give all this information to a mainstream media organization, a legal team led by the president`s outside legal team, as talking about maybe going to an online news organization, that might be a little more friendly to the administration, and to President Trump. Then there`s -- you know, there`s back and forth. And then the question actually becomes more urgent, because "The Times" reporter contacts the president or his White House team while he`s away in Europe.

And the fairly big deal here is, the president and his family members don`t have the benefit of their lawyers right there in the thick of it. They could have called them. They could have directly involved them a little bit more than they did, but the president decides he can handle it.

And he issues this statement that doesn`t provide a fulsome argument. Doesn`t explain what the meeting was really about. Doesn`t explain, in a clear way, why Donald Trump Jr. showed up that day, and why he asked Jared Kushner and Paul Manafort, the campaign manager at the time, to also to attend.

REID: Well, they don`t have the benefit of their lawyers, but they have the benefit of each other. And two of the people in that transaction, Donald Trump, Jr., and Jared Kushner, know exactly why they have a meeting. It is shocking that he would all agree that they would just invent a different reason.

Carol Leonnig, great reporting, reporter for "The Washington Post". Thank so much for joining us.

LEONNIG: Thank you, Joy.

REID: Thank you.

Now, in terms of how this "Washington Post" reporting tonight relates to the obstruction investigation that`s underway at the FBI, I want to bring in Barbara McQuade, former U.S. attorney for the eastern district of Michigan.

All right. Well, Ms. McQuade, first of all, thank you so much for joining us.

BARBARA MCQUADE, FORMER FEDERAL PROSECUTOR (via telephone): My pleasure, Joy. Thanks for having me.

REID: So, just your initial thoughts on learning that the president of the United States actually created and dictated the talking point that Donald Trump Jr. would then use to explain this meeting with several Russian nationals.

MCQUADE: Well, the statement, of course, turned out to be misleading, based on what we later learned about it. And although it`s not a crime to lie to the media or the public in any way, the story is nonetheless very significant, because it could provide additional evidence to the special counsel, Robert Mueller, in an obstruction of justice investigation. You know, a key element in obstruction of justice is that a person acted corruptly. Corruptly just means bad purpose.

And so, if we see President Trump trying to hide the truth regarding his campaign`s involvement with the Russia campaign, then his efforts to end the investigation with James Comey takes on some of that bad purpose, more evidence of that bad purpose. So, I think this is a very significant story.

REID: Yes, and the implication -- I don`t know if it strikes you the same way, the implication seems to me that Donald Trump, at least, and his advisers knew the actual contents -- knew what that meeting was about and decided to use a different story, unless he simply didn`t talk to Donald Trump Jr., didn`t talk to Jared Kushner, and invented a reason and imposed it on Trump junior. Does that make any sense?

MCQUADE: Well, you know, I would think that Robert Mueller would want to try to get to the bottom of it by talking to as many people as he could. But the fact that Donald Trump is out there, misleading the public, is what prosecutors refer to as consciousness of guilt effort. If you`re out there telling a story that later turns out to be not true, you know, people begin to ask, what were the motives for that?

And one motive might be, you were trying to conceal the truth, because you know you are guilty of a crime.

REID: And does this now set up a potential for Robert Mueller to want to interview Donald Trump, to find out whether he knew the contents of those e-mails when he invented this talking point?

MCQUADE: Well, I`m sure he would love to ask him that question, but my guess is he will refrain from doing so. Typically, what you want to do in an investigation is gather as much information as you can from documents and lower level participants in a conspiracy to learn as much as you can, so that if and when you have the opportunity to confront someone who might be considered the very big fish in a case like this, you would have it.

So, my guess is he would refrain from doing that at this point. But at some point, he may very well want to ask those questions.

REID: Well, the four people who are involved here. You have Paul Manafort, the campaign chairman at the time. You have Jared Kushner, who`s in charge of the digital and other aspects of the campaign, and you have Donald Trump Jr.

All three received this e-mail. It was in their inbox. It bounced back and they all got it and it had that headline, Russia, Clinton, highly confidential.

Would Robert Mueller want to interview each of them and then look for discrepancies in their stories or in what Donald Trump says later? And if so, if there are discrepancies, what would be the consequences?

MCQUADE: Yes, I think he absolutely want to talk with them about that. I know that Jared Kushner gave the statement that, you know, he receives many e-mails a day. He didn`t read all the way down through the chain. But the subject line itself said, Russia, you know, campaign, personal and confidential. So, it had some red flags there that I think is very difficult I think for people to ignore.

And I think someone who is seeking to learn the truth would want to ask all three of them about that. And, you know, it is a crime to provide a false statement to investigators or to commit perjury. And so if the stories don`t match up, that would certainly be cause for further investigation, to try to figure out which one`s true. And which one might be making a false statement.

REID: Wow, the heat just got hotter.

Barbara McQuade, former U.S. attorney for the Eastern District of Michigan, thanks so much for your time tonight.

MCQUADE: Thanks very much, Joy.

REID: Thank you.

And just to recap where we are right now on this mega news tonight, a bombshell report from "The Washington Post" this evening, reporting that Donald Trump himself dictated the misleading statement initially released by his son, Donald Jr., about his meeting with a Russian lawyer last summer during the campaign.

But that`s not the only big breaking news tonight out of the White House. We also learned today of a staffing shake up that set a new record. We are quite literally in unprecedented territory right now. The very latest on the shortest-serving White House communications director ever is coming up next.


REID: So, tonight, we got the breaking news from "The Washington Post" that President Donald Trump himself is the one who dictated his son, Don Jr.`s, misleading statement about his meeting with a Russian lawyer during the campaign. That breaking news is the second major development today, hinting at the chaotic world that is the Trump White House.

And we learned earlier today that the brand-new White House communications director, Anthony Scaramucci, is out, after less than a week on the job. A tenure so short it sets a new record. Seizing the title from the Reagan era, and another time of chaos and crisis, at the highest levels of government.

Ronald Reagan was the first elected Republican president since Watergate. For his supporters, he would come to symbolize the renaissance and recovery of the party from its darkest hour.

Almost to a one, Republicans today claim Reagan as a hero and a role model. But while he was in office, Ronald Reagan endured some genuine scandals. And with those, his presidency suffered seriously difficult moments. One of those was the Iran/Contra scandal which famously involved the secret sale of weapons to Iran, so the administration could fund their preferred side in Nicaragua`s civil war.

The idea was to get money from Iran and possibly the release of U.S. hostages, while also achieving the White House goals in Central America. It was a huge scandal at the time, with congressional testimony by Lieutenant Colonel Oliver North. You may know him now as a pundit on cable TV, but at the time, he was right at the center of this epic White House scandal.

As part of the unfolding of that monumental tale of possible criminality in the White House, in late February 1987, just days before a devastating congressional report on Iran/Contra, the White House was beset with infighting between the president`s top staffer and the first lady. It was also dealing with a surprise revelation about the dark past of its newly appointed White House communications director.


RONALD REAGAN, FORMER PRESIDENT: We`re saving the best stuff for the last act.

REPORTER: But the president`s closest friends are worried that there may never be any best stuff. They`re blaming his problems on chief of staff, Donald Regan. The first lady isn`t denying that Regan that has hung up the phone on her twice.

Friends say she is furious with the chief of staff and that her husband knows it. Regan was in his usual place today, riding alongside his boss. He told aides he will not resign and blamed others for the latest problem.

Questions raised about the new White House communications director, John Koehler. Press Secretary Marlin Fitzwater said Koehler did not tell the White House that as a 10-year-old, he belonged briefly to a Hitler youth group in his native Germany.

REPORTER: Today, the revelation that the chief of staff directly blames the first lady for pushing through the nomination of John Koehler as the new White House communications director. The White House was surprised when an NBC News report revealed that as a 10-year-old, Koehler was briefly a member of a Nazi youth group. Although Koehler has been defended by many prominent Jewish organizations as a victim of the circumstances of his youth, it was another embarrassing piece of news the White House didn`t need.

UNIDENTIFIED MALE: Well, it came as a great surprise to me that the White House didn`t know it. I firmly felt that they had that security file. And it seems to me that if the FBI tells the White House the guy is clean, he`s clean.


REID: Reagan`s chief of staff was fighting with Nancy Reagan and then his communications director turned out to have been in the Hitler youth as a grade-schooler.

Within days, both men would have been out of the administration. John Koehler lasted just 12 days on the job, making him the shortest serving White House communications director up to that time. Meantime, chief of staff, Don Regan, got the boot in a process that was anything but organized.


UNIDENTIFIED FEMALE: But the sequence of events that led to Regan`s resignation shows even that effort was bungled.

Thursday night at 6:30, President Reagan called Howard Baker to offer him the job. Baker, according to an aide, had already decided he would accept if asked and did not hesitate.

At 10:30 Friday morning, President Reagan told Republican congressional leaders they would be pleased with his new chief of staff. He did not reveal the name of his choice.

Dennis Thomas, a top aide to Regan, was at that meeting. Regan quickly learned that his replacement was set, which was news to him. Regan was furious.

According to that White House aide, it was Regan`s understanding that his resignation would come on Monday, at his own instigation. Regan stormed out of the White House. When he got home, he notified the White House he no longer needed the Secret Service or a car.

This morning, the White House sent a car to pick him up anyway. Regan rejected it and drove his own car in.


REID: No, thank you, I can drive myself.

White House infighting and shake ups are as old as the presidency itself. But what we`ve seen in the past few weeks from the current White House is raising the bar for infighting and shake ups.

Today, we learned the White House communications director, Anthony Scaramucci, is out after less than a week on the job. His firing came at the hands of the new White House chief of staff, John Kelly, apparently in his first official act on the job.

"Axios" reports, shortly after he was sworn in this morning, he brought Scaramucci into his office and told him that he had to go. Scaramucci`s dismissal comes just a few days after he told "The New Yorker`s" Ryan Lizza in an obscenity-filled rant that he wanted to fire everybody everyone on the communications team and start over. Now, he becomes just the way it is, to booted off the island in a Trump reality show, after serving just 10 days in the job and beating even John Koehler, the guy who served in the Hitler youth in his record of brevity by two days.

That`s even less, by the way, than Michael Flynn`s brief 24 days as national security adviser, the shortest tenure of anyone in that post. It`s certainly less than chief of staff Reince Priebus whose 189 days on the job made him the shortest serving chief of staff. And far less than the roughly six months of White House press secretary, Sean Spicer, himself one of the shortest serving people in that job.

This recent staff shake up resembles less of a merry go around than a circular firing squad. The president hires Scaramucci over the objections of Reine Priebus, Sean Spicer and Steve Bannon. And then after Sean Spicer hits the ejector seat, Scaramucci`s first task was to get rid of Reince Priebus, and get him fired. And now, Priebus` replacement, John Kelly, has fired Scaramucci. It all makes perfect sense.

Joining us now is Jonathan Swan, national political reporter for "Axios".

All right. Mr. Swan, we appreciate your time this evening. What a hot mess. Explain to us first of all, this sort of question that was left hanging in the briefing today. Does Anthony Scaramucci still have a job at the Export/Import Bank? Because I`m not clear on that.

JONATHAN SWAN, NATIONAL POLITICAL REPORTER, AXIOS: Yes, nor am I. They left it open, friends of his believe that he`s going to be looked after in some way, shape, or form, but I don`t know what that means. I know that he wants a job in the administration. Again, I just have no confirmation that he has one.

REID: Yes. So, walk us through how this happened because, obviously, General Kelly came in and wanted to have some authority. What did it come down to in terms of him being able to get rid of the newly hired Mr. Scaramucci?

SWAN: Well, I think you have to go back to Thursday night with Ryan Lizza, the conversation that Anthony Scaramucci had with him, where he suggested that Steve Bannon do various things to himself and said horrendous things about Reince Priebus.

Now, there`s a lot of like history being rewritten today. I can tell you, it`s complete nonsense that the president was offended by those comments or that the Trump women somehow -- this was some sort of apostasy and they all rose up in anguish. I mean, that`s just not true. In real-time, with we know from our reporting that the president found the remarks amusing, at first, and then later in the evening, as the negative coverage piled on, he got quite angry and told Anthony Scaramucci and told him off a little bit.

But the next day, he was joking about it. This was really John Kelly. And for General Kelly to take the job, he made the demand that he gets complete authority. And that everything goes through him.

And the way to demonstrate that is to fire someone who, by official decree in the press release, doesn`t report to him, reports directly to the president, and had been causing, from Kelly`s perspective, all sorts of problems, both cultural problems and, you know, credibility problems, by the comments he`d made to the press. So, this was a signal that Kelly`s in charge, he`s been fully empowered in a way that Reince Priebus was never empowered.

So, this was as much a symbolic act as anything else.

REID: But you mentioned the question of who Anthony Scaramucci would have reported to had he remained. Did that become an issue where he was told, you can report to Kelly and stay, or -- no --


REID: No, never even had the opportunity?

SWAN: No. Anthony Scaramucci, my understanding, from my conversations today, would have happily reported to General Kelly. And this was not some sort of a stand down, where he said, I only report to the president, that just doesn`t mesh with the conversations I`ve had today.

REID: And you also reported that Steve Bannon, who I like to always remind people, is the alt-right representative in the White House, also kept pushing to have Scaramucci let go. Is that -- explain that a little bit.

SWAN: Oh, Steve Bannon was working to undermine and destroy Scaramucci to the very end. Him and Reince Priebus, at the end of Reince Priebus`s tenure, he was basically in the bunker with Steve Bannon and a few mid- level communications staffers. There was really no one else defending him. And together they were scheming to undermine.

First, it was to block Scaramucci. And once Scaramucci was in, it was working with various people to get messages to the president that he was unacceptable. They saw "The New Yorker" interview was a great interview to try to undermine him. And Bannon, my understanding, from sources close to him, is that he`s delighted by today`s news.

REID: I`m sure he is. I mean, because otherwise, he was called a contortionist in not a nice way. Who likes that?

Jonathan Swan, national political reporter with "Axios", thank you very much.

All right. Now, the thing about making big change, like hiring a new chief of staff, is that it does create other staffing opportunities and changes inside the White House, like firing Scaramucci. In this case, hiring this particular chief of staff has raised a bigger staffing question outside the White House. And that story is next.


REID: By a quarter to a 10:00 this morning, the new White House chief of staff, General John Kelly, had been dually sworn in, putting a military leader with no political experience in a top White House staff job might not seem like the most natural fit, unless, of course, the idea is to emphasize order, rigor, and discipline, something that`s been rather lacking in this White House. Well, we now know that Kelly`s first act as the new boss of the West Wing staff was to fire the communications director, the free-wheeling, colorful and extravagantly profane Anthony Scaramucci.

The turnabout makes sense in a White House struggling to get its act together. But the arrival of General Kelly at 1600 Pennsylvania Avenue raises another question, who`s going to take his old job as head of the Department of Homeland of Security. Well, there is one name people are asking about, Jeff Sessions. You might know him as the current attorney general of the United States.

The president has been openly criticizing, blasting, and just generally complaining about his attorney general, saying how unfair and disappointing it is that Sessions recused himself from the Russia investigation. What Donald Trump cannot do without potentially causing a political earthquake inside his own party is fire Jeff Sessions. And what he cannot do by law is fire special counsel, Robert Mueller, at least not directly. Only Mueller`s boss at the Department of Justice can do that.

Which is why, just as a matter of what-if strategery, if Trump did want to find a bank shot method of getting a different, not recused on Russia attorney general in place without having to actually fire Jeff Sessions, one thing he could theoretically do is move Sessions to General Kelly`s old job at Homeland Security. After all, Sessions is a famously super hard liner on immigration, so deporting people would be a natural fit.

He already got confirmed by the Senate when he became attorney general, so the law would allow him to run a new agency for at least six months. And with Sessions out of the way, Trump could shuffle someone else into the role of acting attorney general. And that person could potentially -- wait for it -- fire Bob Mueller.

The White House today got asked about the possibility of sessions changing jobs. The answer made news in two different ways.


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: There are no conversations about any cabinet members moving in any capacity and the president has 100 percent confidence in all members of his cabinet.


REID: So, news item number one. For today, at least, Jeff Sessions is not changing jobs. And news item number two, despite everything he`s said about this A.G., the president has 100 percent confidence in him, at least for today.

Joining us now is Michael Beschloss, NBC News presidential historian.

Michael, it`s always great to talk to you. Thanks for being here.


REID: All right. So, what do you think of this strategery theory, that Donald Trump could pick up his attorney general, drop him into Homeland Security, and free himself to put someone in place to fire Bob Mueller.

BESCHLOSS: It sure is in character. It`s the way he operates. And the question is whether Jeff Sessions would go along with it. Sessions, by all accounts, has for decades wanted to be attorney general. You know, one of the most prestigious jobs in that cabinet. Department of Homeland Security, not so much. So, you know, whether Sessions would accede to that, hard to say. I doubt it.

REID: Yes. Is there a historical precedent for a president moving the cabinet around in this way, you know, that you know of.

BESCHLOSS: Yes, it happens sometimes, for instance, in 1945, Franklin Roosevelt had fired, essentially, Henry Wallace from his ticket. He had been vice president, needed a place to put him, Wallace wanted to be secretary of commerce, so Roosevelt fired the secretary of commerce, Jesse Jones, to create some space for that. But the difference was, if Donald Trump`s objective here is to shut down the independent prosecutor, Bob Mueller`s investigation, in order to save his presidency, there`s no historical precedent for that.

REID: Yes, and speaking of that, tonight, we have this huge "Washington Post" story that Donald Trump in the service of trying to end this investigation or curtail it, actually came up with the talking points that his son, Donald Jr., used to excuse this meeting with, as we know of, eight people, including multiple Russians tied to the Kremlin. What do you make of that?

BESCHLOSS: It sounds very much in character for Donald Trump. Very much like Richard Nixon. John Ehrlich, Nixon`s aide, who finally went to prison for a year and a half in the Watergate scandal said in retrospect, Nixon couldn`t keep his hands off a cover-up. He wanted to be involved. There`s no way you would have gotten him away from this.

So, I mean, the suggestion that Donald Trump is, you know, trying to pull the strings, to keep Russia from being investigated, doesn`t sound so hard to believe. And the question, of course, comes back to, what is it is that he`s afraid of? What is so terrible in terms of his involvement in Russia and that of his campaign, that he is so terrified to have it investigated?

REID: Yes, and just taking advantage of your president to ask you about everything in the world. I have to also ask you about this appointment of General Kelly. I mean, the idea in most White Houses, in the Jim Baker, for example, you bring in somebody with stature and gravitas and they get things together. Do you think that that sort of method and methodology applies with this particular president?

BESCHLOSS: Well, you know, you were talking very rightly about Ronald Reagan and Jim Baker, probably the best chief of staff of modern times. That worked, because Reagan was modest. He said, there`s all sorts of things I don`t know, especially because I haven`t been in Washington, I don`t know how to deal with Congress. Jim Baker was an expert in that. Reagan allowed himself to be managed for four years.

Can you imagine Donald Trump allowing himself to be managed? Plus, the fact is that, you know, John Kelly, General Kelly has many qualities, but, you know, political experience, he does not have.

The last general to be chief of staff was Alexander Haig, one of the interesting questions was whether Haig would, you know, resist Nixon`s effort to cover-up Watergate or would he essentially tell Nixon not to do it. Haig was the one as chief of staff on the night of the Saturday Night Massacre and during a day or two before then, he called up the attorney general, Elliot Richardson, and his deputy and said, Nixon wants you to fire Archibald Cox, the special prosecutor, this is an order from your commander in chief. I hope that`s not a precedent we see here.

REID: Yes, that`s a pretty chilling precedent. Michael Beschloss, NBC News presidential historian, always a threat. Thank you very much.

BESCHLOSS: Me too. Thank you.

REID: Thank you.

All right. Meanwhile, Moscow has now retaliated big-time against U.S. sanctions and so far, silence from the president of the United States. That story is next.


REID: It was December, 1988. The head of the Soviet Union, Mikhail Gorbachev, was visiting New York City and making his way to D.C. for a state dinner. And Donald Trump got word that Mr. Gorbachev had decided to stop at Trump`s new glittery property on Fifth Avenue, Trump Tower.




UNIDENTIFIED MALE: Just come down very briefly. We were on our way. We wanted a couple of minutes.

TRUMP: A great honor.


REID: Except that was not the real Mikhail Gorbachev. Instead, it was a renowned Gorbachev impersonator. Donald Trump had been duped.

The following day, he did get to meet the real Gorbachev at a state dinner. That was 1988. But two years earlier, things were not as friendly.


TOM BROKAW, NBC NEWS: Today, it was the Soviet`s turn once again. They kicked out of Moscow five American diplomats, their retaliation for the 55 Soviet diplomats who are expelled from the United States yesterday. They also withdrew more than 250 Soviet citizens who helped run the American embassy in Moscow. Drivers, maids, and so on.

REPORTER: In Moscow, not one of the embassy`s 260 Soviet employees turned up for work today. Diplomats began doing the maintenance jobs, which will now take up much of their time.

UNIDENTIFIED MALE: How about a hammer?

REPORTER: Volunteers staffed the embassy`s snack bar, the only place in Moscow to get a hamburger or a pizza.


REID: (INAUDIBLE) expelled five U.S. diplomats, the Soviets declared (AUDIO GAP) banned locals (AUDIO GAP) U.S. embassy in retaliation.

Coincidentally enough, in 1986, Donald Trump was reportedly angling to get President Reagan to name him as an envoy to the Soviet Union, to negotiate nuclear disarmament. The Reagan administration said no, so we never got to find out how that would have worked out.

But that 1986 episode when the Soviets expelled our diplomats and banned local Soviets from working for the U.S. is the closest historical parallel to what happened this weekend, when Russian President Vladimir Putin ordered the dismissal of 755 people from the U.S. embassy in Russia. The U.S. has approximately 345 Americans currently in Moscow, and at consulates and in other Russian cities.

According to a 2013 State Department report, a big chunk of the people who will be dismissed will be Russians, the locals, who have jobs at the American embassy and those consulates. Putin claimed that this was in response (AUDIO GAP) passed by the Senate and the House, (AUDIO GAP) to be signed by (AUDIO GAP). But these are also a delayed (AUDIO GAP) administration seizing two Russian compounds in December, and expelling 35 Russians, who President Obama said were spies.

On Friday, Putin seized two U.S. diplomatic properties, and ordered the U.S. embassy in Moscow to downsize its staff. Now, we`re learning that Putin also wants the local staff members out.

Last week, we learned that Donald Trump plans on signing that sanctions bill into law. He hasn`t done it yet, but the White House says he plans on doing so. In meantime, the president and the State Department have made no official public statements about (AUDIO GAP).

And joining us now Michael McFaul, former ambassador to Russia under the Obama administration and now professor of political science at Stanford University.

Ambassador McFaul, thanks so much for being here.


REID: So, Ambassador, how unusual is it for the president of the United States or the White House or the State Department to have made no statement about what Russia has done, in terms of telling those 575 staff to stand down?

MCFAUL: Well, first, I`ve been trading e-mails and meeting with other ambassadors today. And I think this is the largest expulsion in the history of American diplomacy. I`m glad you brought up 1986 in your setup piece, but this is, as you intimidated, much bigger and nobody can think of another expulsion this size.

And yet, the White House, the president of the United States, is silent. It`s extraordinary. I think it`s outrageous.

When I worked at the White House, I worked there for three years. We made statements on all kinds of things, much lesser things that we had in the voice of the president. He needs to begin to push back on this, because it looks like a very weak signal that he`s sending if he doesn`t say anything.

REID: Do you -- what do you make of the delay in signing the now overwhelmingly passed -- those new Russian sanctions. Because that is what Putin is reacting to, but Donald Trump haven`t even yet signed the legislation.

MCFAUL: You know, perhaps he`s trying to cut some kind of deal, you know, maybe give back those two properties that the Russians have in the United States, in return for lowering the number that they need to go home.

And the Russians that will be fired -- I`m glad you mentioned that, because that`s the real people that will be hurt by this. Those Russians, by the way, are going to have a really hard time finding new jobs, having worked at the American embassy. But to be honest, I don`t understand it, because I don`t really understand President Trump`s policy towards Russia in general.

REID: Yes.

MCFAUL: He talks nice to Mr. Putin, President Putin. This is the result. Maybe it`s time to tray a new strategy.

REID: You know, I have to also get your take on this new "Washington Post" story that Donald Trump dictated the talking points to his son, for the meeting that Donald Trump Jr. had with several Russian nationals. And what do you make of the fact that what he chose to use as the excuse was this issue of adoptions. He also brought it up in his "New York Times" interview, spontaneously, when asked a question about Melania sitting next to Putin. He again brings up adoptions.

What do you make of that?

MCFAUL: That means that the Russians were talking about lifting sanctions, because back in 2012, when I was the U.S. ambassador in Russia, we adopted a set of sanctions, a human rights sanctions against human rights violators in Russia. It`s called the Magnitsky Act, and in response, Putin not only put Americans on a sanctions list, but then he went further. And he banned adoptions by American citizens. So, when you hear adoptions, you should think this is a discussion about sanctions.

REID: All right. Well, former Ambassador Michael McFaul, thank you very much. Really appreciate your time tonight.

MCFAUL: Sure. Glad to be here.

REID: Thank you.

And if you thought the Republican mission to repeal Obamacare was over, think again. Inside the latest efforts to bring Trumpcare back from the dead.

Plus, the stealth group that`s been meeting behind the scenes, all along -- next.


REID: On Friday, at around 2:00 in the morning, a maudlin Republican Senate Leader Mitch McConnell appeared to throw in the towel. The Senate majority leader had just failed to do what Republicans had vowed to do for seven long years in which they finally seemed poised to do, repeal the Affordable Care Act. Defeat ultimately came at the hands of three Republicans, Susan Collins, Lisa Murkowski, and John McCain who broke with the rest of the party to vote no.

The Republican leader bemoaned the vote, somehow blamed the Democrats for the failure, but said that it was time to move on.

But not everyone is ready to move on. The president of the United States is now threatening to sabotage the Affordable Care Act in ways that the executive branch uniquely can, including a threat to stop paying the cost- sharing subsidies that help millions of Americans buy insurance and a new threat to cancel the insurance subsidies for members of Congress and their staff unless they repeal Obamacare.

Trump`s budget director is also out publicly saying that the Senate must repeal health care first before congressional Republicans can pursue the trillions of dollars in tax cuts that the Trump administration is seeking in their new budget. The huge cuts to Medicaid that Republicans were seeking in the various versions of the Obamacare repeal bills were supposed to help offset those tax cuts.

Meanwhile, a group of Republican senators led by South Carolina`s Lindsey Graham are already trying to revive the repeal effort by working on legislation they think could get the 50 votes needed to pass. So the fight to repeal the Affordable Care Act is not yet over in the Senate. But over in the House, a mild-mannered bipartisan approach to fixing the parts of the Affordable Care Act that everyone agrees need fixing is under way. They`ve apparently been meeting for weeks behind the scenes in case the repeal of Obamacare really did fail. Now that it has, they`ve unveiled their proposed repairs.

Joining us now is one of the members of Congress who is part of that working group, Congresswoman Elizabeth Esty of Connecticut.

Congresswoman Esty, thanks so much for being here tonight.

REP. ELIZABETH ESTY (D), CONNECTICUT: Thanks, Joy. Great to be with you.

REID: All right. So, please first explain to us what your bipartisan group -- how many of you first of all that are in this group?

ESTY: It`s about 40, 42 I think we`re at. Maybe 44.

REID: And what`s the balance, D`s and R`s?

ESTY: It`s supposed to be even.


ESTY: So, we`re right about even. It`s pretty evenly divided, 20, 22 on each side.

REID: OK. So, why don`t you explain to us sort of what are the priorities in your proposal to repair the Affordable Care Act?

ESTY: Well, we focused on an area that everyone agrees really needs work and that`s the individual marketplace. And we`ve seen premiums going up through the roof in certain states, a lot of uncertainty. And it`s really hurt by the president`s announcements that he`s just going to cut off the cost-sharing subsidies basically, the cost-sharing reductions.

And so, we know this needs to be fixed, and the uncertainty is causing premiums to go through the roof. Right now, insurance companies are getting ready to set premiums for next year, and so, we know we need to fix this. So, a group of us had decided a few months ago we wouldn`t even touch health care. Too difficult. We`d work on some easier topics. But when it was clear this might crater in the Senate, we thought we might as well start trying, see what we can do in this area.

REID: Yes. So, we`ve got a list of those priorities if we can put them up on the screen. And there are these five planks of what you guy are trying to do. One is, as you said, fund those cost-sharing reduction payments through Congress, create dedicated stability fund for states to lower premiums and limit losses, exempt small businesses from the employer mandate up to I think 500 employees, repeal the medical device tax and provide changes and clear guidelines for insurers to sell across state lines, which I know has been a big Republican priority.

Let`s go to the employer mandate piece for just a minute. A lot of people are wondering why would you let out companies with fewer than 500 employees from getting their employees insured, and what would happen to those employees?

ESTY: Well, I`ll tell you, a number of us, you know, we don`t all support all of these provisions. But what we found is this -- almost all big companies provide health insurance plans because it`s an attractive thing for their employees. But smaller companies have often found that it`s very expensive for them to do it and, in fact, their employees might be better off if they joined the individual pool and got subsidies that way.

REID: Got it.

ESTY: So the bottom line is what we`re trying to do is get everybody insured. And, you know, the more people who are insured, their health care is better, and a bigger pool, more people in the insurance pool means costs are lower for everybody. And that`s really the bottom line. We`ve got a find a way to get everybody in the system. That will lower costs across the board, and make sure nobody has to worry about, you know, getting hit by a car tomorrow or like a friend of mine`s son who was diagnosed with a brain tumor at age 22 this year.

REID: Yes.

ESTY: You shouldn`t have to worry about that.

REID: Yes. And we should remind people that this is really just 3 percent to 10 percent of the market we`re talking about here, the non-group market, not the bigger market with Medicaid, et cetera.

ESTY: It`s the individual market. That`s really where it`s so volatile. We need to fix it. It`s just fairer for people.

REID: Yes. Well, good luck. We hope that you succeed.

Congresswoman Elizabeth Esty of Connecticut, thank you so much for your time.

ESTY: Thanks, Joy.

REID: Thank you. We`ll be right back.


REID: The White House said today that the president was joking when he suggested last week that police officers not treat people they`re arresting too nicely. Speaking before an audience filled with members of law enforcement, the president said that officers putting suspects into a squad car should not take care to avoid banging the arrested person`s head on the car door. He told them, quote, you can take the hand away, OK?

Regardless of how unfunny it was when he said that, law enforcement agencies around the country have come out and said the president should not talk like that, which is why the White House has out again today claiming it was a joke.

But here`s something to watch for. Tomorrow at noon, Attorney General Jeff Sessions travels to Atlanta to address law enforcement leaders. Sessions has been under lots of heat from Donald Trump for not recusing himself in the Russia investigation.

But Sessions is also the nation`s top law enforcement official. Does he bring up what the president said about not handling suspects too nicely? Does he answer questions about it if he gets asked?

Well, that happens tomorrow at noon, and you can expect people to be watching.

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

And for now, it is time for "THE LAST WORD WITH LAWRENCE O`DONNELL".

Good evening, Lawrence.

LAWRENCE O`DONNELL, MSNBC HOST, THE LAST WORD: Good evening, Joy. I have a -- I have a $1 bet.


O`DONNELL: That Jeff Sessions ain`t going to bring it up. He ain`t going to bring it up, Joy.

REID: He`s not going to bring it up, and it was not a joke. I don`t even know how you would make a joke like that.