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The Rachel Maddow Show, Transcript 8/30/17 Heads up bag thing regarding DOJ

Guests: Matt Dempsey, Josh Dawsey

Show: THE RACHEL MADDOW SHOW Date: August 30, 2017

Guest: Matt Dempsey, Josh Dawsey

RACHEL MADDOW, MSNBC HOST: And thanks to you at home for joining us this hour.

There is a lot going on right now in the news, including, of course, the ongoing weather and flooding disaster in southeast Texas, and in east Texas, and now in Louisiana. This is day six of this national level catastrophe in that part of the country. This is looking like it will be the most expensive natural disaster in American history. We`ve got a lot of coverage ahead on that ongoing story tonight.

I do want to tell you also that we`ve got a story tonight that is quite off the radar. It`s not related to the storm. It`s actually not getting any other news coverage at all, as best as I can tell. I just want to give you a heads-up that we`re going to be talking about something that nobody else is talking about tonight, and self-consciously so. It`s a story that involves the Justice Department, potentially a huge deal. It`s something that looks like it is about to happen, but it`s not done yet.

So fair warning, we`re going to be sticking a flag in that story tonight, this hour, fully cognizant of the fact that there`s a lot of other news going on, and nobody else is talking about this story, but I think it`s important enough that we`ve got to do it and we`ve got to do it tonight. So, the Justice Department story is coming up.

We also just got news about the Robert Mueller special counsel inquiry on the Trump-Russia investigation, pulling in someone new to testify before the grand jury that`s been convened in that case. We`ve got that news this evening.

We`ve also got some interesting news today about the president`s eldest son being called to testify in the Trump-Russia inquiry.

There`s also some big breaking news from, just in the past hour or so, about the course of the Bob Mueller inquiry. And a dramatic move that special counsel Robert Mueller has just made that may be designed to kind of do an end run around the possibility of President Trump pardoning people involved in the scandal. This is a very, very provocative move by Bob Mueller, if this bears out. The "Politico" reporter who broke this big story, Josh Dawsey, is going to be joining us live on that in a moment. That story just went live at just a short while ago.

So, that`s all coming up. We`ve got a big show ahead. This is like a ten- pound show in a five-pound bag, as they say. Lots of breaking news tonight on lots of different stories.

But I want to start tonight with a little city in Texas that`s called West. And despite the name, it`s not even really in West Texas. The name of the town is West. It`s between Waco and Dallas-Ft. Worth.

In 2013, they had a really serious disaster in that town. I`m going to show this -- this tape is about 30 seconds total, 25, 30 seconds. It`s shot by a man named Derrick Hurt. And what`s going on in the footage I`m about to show you is that Mr. Hurt and his daughter, they are off camera, but you can hear them.

And they`re sitting in Mr. Hurt`s vehicle and they`re watching a fire burn off a ways in the distance in their town. And so, it`s 30 seconds. Just watch the 30 seconds of this clip.

You won`t really tell why I`m having you watch it at the beginning, but trust me. I will also tell you it gets a little scary at the end. But there`s no better way to show you the magnitude of what happened there than watching this.

So, put on your seat belt. It`s 30 seconds. Just hold on until the end here.




UNIDENTIFIED FEMALE: Dad! I can`t hear! I can`t hear! Let`s get out of here!


UNIDENTIFIED FEMALE: Please, get out of here! Please, get out of here!


MADDOW: What that was, that massive fireball was a massive ammonium nitrate explosion at the town`s fertilizer plant. Derrick Hurt and his daughter were OK. Many of their neighbors were not. That explosion left a 90-foot-wide crater in West. It was as if a daisy cutter bomb had been dropped on that town.

Fifteen people were killed, more than 200 people were injured. A whole portion of that town was just missing in the wake of that explosion. Hundreds of buildings destroyed, or damaged.

I mean, given the size of the blast, it is a miracle that there were not more than 15 people killed, given that the buildings heavily damaged or totally destroyed by that explosion included an apartment building, a nursing home, and three schools. The reason that plant full of explosives was in the middle of all those schools and the nursing home and the apartment building is because there were literally no zoning laws there at all. So, put any building of any kind anywhere, no questions asked.

Also, there`s no statewide fire code in Texas at all. State law goes so far as to ban local communities from establishing their own fire codes. It`s illegal in the state to require fire alarms or fire exits or sprinklers or anything like that.

And at this fertilizer plant in West, Texas, among the schools and apartment buildings and nursing homes of the town, the explosive ammonium nitrate in that facility was stored in wooden bins, in a wooden building, with no alarm system of any kind, no firewall system of any kind and there were no sprinklers. And it went off. With a blast so epic, you almost can`t believe it.

And after that apocalyptic fireball in West, Texas, in 2013, the state did decide to change one thing in Texas about storing chemicals, like that ammonium nitrate fertilizer that almost wiped one Texas town off the map.

And Greg Abbott is now a governor of Texas. But back then, he was the attorney general of the state. He decided after the West explosion that the public would no longer be allowed to know where large quantities of explosive chemicals were stored in their towns.

For decades, companies storing significant quantities of potentially hazardous material like explosive fertilizer, they may not have had to contend with things like fire codes, but at least they had to report what they had to the state. The state had a database of that information. They would make that information available upon request, to reporters, regular citizens. You just had to ask.

And when you asked, you`d get something called a tier two report. That explained what was on site at a particular location if you asked for it.

After the West fertilizer plant explosion, Texas and Greg Abbott decided they were going to end the tier two reports being provided to the public. That decades-old public right to know, they got rid of that. That was the one policy change prompted by that explosion that killed 15 people and erased part of that town.

A couple hundred miles southeast of West, Texas, is the town of Crosby, Texas, just outside Houston in Harris County. It is, of course, one of the many Texas towns that has been battered for the last six days now by Tropical Storm Harvey. Crosby is where the Arkema chemical plant is.

The Arkema chemical plant in Crosby employs about 57 people. It`s a small plant. The plant produces organic peroxides for use in plastics. Their plant in Crosby lost power in the storm like everybody did. They planned ahead for that. They had backup generators on site to keep the plant powered up, even after central power was lost.

But unfortunately, this weekend, their backup generators also got swamped. They had no power source of any kind since this weekend at that chemical plant. After the backup generators got swamped, they went to plan C. The company moved the chemicals they had on site into refrigerated containers, where the refrigeration was powered by diesel engines. But those diesel- powered refrigerated containers, those containers got compromised by the rising water as well.

And so, now, the crisis for little Crosby, Texas, is not just that it`s under chest-deep water, the crisis in Crosby, Texas, includes the fact that at that plant, where they`ve lost the ability to keep the chemicals refrigerated, they`re expecting an explosion now, because the chemicals they use there to produce liquid organic peroxides, there is a risk of reaction by the fact that they`re no longer being kept cold.

And the chemical reaction here means fire, or explosion, and so a 1 1/2- mile radius around the plant has now been put under mandatory evacuation. That`s to prepare for the explosion they are now expecting.

Today, the North American CEO of Arkema -- Arkema is a French company, but they`ve got a North American division -- the CEO of that division held a conference call with reporters to answer questions about the situation at the plant. We tried to reach the company today hoping the CEO could join us tonight to help us explain and understand what`s going on there. We left several messages with him. But we never heard back. I`m not complaining, it`s understandable.

But he did make this public call. Today, the CEO said Arkema has removed all its staff from that plant and the area around it. He said there is now, quote, no way to prevent a possible explosion there, because they can`t get back into that plant. They can`t do anything to start cooling off those chemicals again until conditions relent.

One reporter on this call today, Matt Dempsey of "The Houston Chronicle", he`s a data journalist who works with the chronicle, he asked what seems like a pretty straightforward question in a crisis like this. I mean, given that, you know, people have been evacuated from a mile and a half around this plant, given that they said there`s no way we can prevent an explosion, that they can`t keep these chemicals cold, that the inability to keep these chemicals cold will probably result in a chemical reaction.

I mean -- given that, this reporter asked the Arkema CEO, can you tell us what`s inside that chemical plant? What are we dealing with here? Can you give us that tier two report? Which until a few years ago used to be something we could get as a matter of public record.


MATT DEMPSEY, HOUSTON CHRONICLE: I have the 2015 tier two chemical inventory for your facility. Are you going to provide an updated, the most current tier two chemical inventory for the facility to the media?

RICHARD ROWT, CEO, ARKEMA NORTH AMERICA: I don`t know that we see the need to do that. I mean, they`re all involved with the peroxides that we`re discussing.

DEMPSEY: No, I understand that. There`s a lot more detail in the tier two chemical inventories for reporters that could be useful.

Just to be clear, though, it sounds like you`re not willing to release your tier two chemicals to the media.

ROWT: I mean, again, I don`t -- I don`t -- we do not see the need at this time to do that.


MADDOW: So, they were not releasing that information. We do not see the need at this time.

And the state of Texas is not going to hand it over either, because they now treat that as confidential information, even when the town is getting evacuated because of it.

Also on that call, the CEO of Arkema was told that a professor of chemical engineering at the University of Houston just said this about the situation with the Arkema plant in Crosby. He said, quote: Frankly, this could be worse than the explosion in West, Texas.

Confronted with that, from the University of Houston chemical engineering professor, the CEO of Arkema responded that he, quote, had no indication that the explosion they`re expecting at his plant would be bigger than what happened in West, Texas. But, of course, we don`t know, because we don`t know what`s in the plant. They won`t say.

So, best guess. The reporter who asked about the chemicals in that plant, Matt Dempsey of the "Houston Chronicle," he`s an expert journalist on these issues in general, specifically on this stuff in this part of Texas, he`s been covering this story very aggressively, he`s going to be joining us here in just a moment.

But, of course, the Arkema chemical plant in Crosby is just one of the innumerable consequences from Harvey, as its effects continue to unfold across Texas. As the storm moved northeast today toward and into Louisiana. It left towns all along the Texas-Louisiana border under water. Twenty-six inches of rain fell on Beaumont, Texas, in 24 hours.

It`s one thing to get an inch an hour, it`s another thing to get an inch an hour for more than 24 straight hours, right? That city was the scene of rescues by helicopter today. South of Beaumont, the mayor of Port Arthur, Texas, declared, our whole city is under water. The mayor of Port Arthur says the devastation is like nothing she`s ever seen before.

People took shelter in the local civic center in Port Arthur last night. But then that shelter also filled up with water. One person who was there said the water started seeping into the shelter around 8:00 p.m. local time and it was inundated within 20 minutes.

In Houston today, that city began to see very, very earliest beginnings of the water receding. The rainfall`s let up in Houston, even though the forecast calls for more over the next couple of days. Some parts of Houston have gotten nearly 52 inches of rain. That`s well over four feet of rain since the storm started on Friday. That means they have destroyed the record in the Continental United States for rainfall from a single storm.

Still, the very worst of the storm in terms of new water falling, that part is certainly closer to an end in Houston. But with so much of that gigantic city and its surrounding suburbs under water, we don`t know how many thousands of homes, or tens of thousands, or hundreds of thousands of homes there are going to be uninhabitable in the short run, or how long they`ll remain uninhabitable. And that very human crisis, which we are just at the beginning of, that has been evident in shelters in the region all week.

The Brown Convention Center in Houston can hold 5,000 people. As we reported last night, as of last night, there were 10,000 people inside, twice its capacity. But also as we reported last night, the plan was to open a pair of new mega shelters in Houston, and start moving people there. That did start today in Houston. New shelters to try to relieve the crowding at the convention center to give all those families somewhere to go.

And, of course, because of what part of the country this is, and what incredible industry they`ve got there, we are continuing to keep an eye on the Houston ship channel and the refineries and chemical plants, including that Arkema plant in Crosby which we are told is at risk of explosion at any moment.

Joining us is Matt Dempsey. He`s a data reporter at "Houston Chronicles" investigations team. He just last year reported an eight-part series on chemical plants in Texas, and their dangers.

Mr. Dempsey, I really appreciate you taking the time to talk to us tonight. Thanks for being here.

DEMPSEY: Thank you for having me.

MADDOW: What is the latest on that plant in Crosby, and the possibility of a fire or an explosion there? How big of a risk do you see this in terms of your knowledge in this field?

DEMPSEY: So, from what we know right now, I just actually spoke to the Harris County fire marshal`s office. They said that they don`t expect like a shock wave kind of explosion. That`s in contradiction to what the expert says who think that we`re sitting on a powder keg type of situation here. So, I have experts on one side are saying it`s a huge thing, and I have the government officials and the company saying it might not be that big. It`s hard to tell for sure.

We do know that they`ve tried to evacuate everybody from the mile and a half area. Apparently, you can`t force people to leave their homes in Texas, so I do know there are some people in that mile and a half radius that have not -- that have chosen not to leave. So, we don`t know what`s going to happen to the homes, and the areas around it, but we do know the mile and a half radius was set to be conservative and try to protect as much people as possible.

MADDOW: Matt, you`re describing that disagreement there between the fire marshal and other experts that you`ve talked to. It sounds like they`re disagreeing on how big and what the character will be of the explosion when it happens. If I`m reading it correctly, there`s no disagreement as to the fact there`s going to be an explosion?

DEMPSEY: Oh, yes, there will be a fire or explosion. It will be very surprising if there isn`t. They don`t think they have the ability to get back into that facility for at least six days, because they have over six feet of water in that facility.

So, in the meantime, they are stuck waiting. They can`t monitor the temperature for all of the refrigerated containers that are holding the organic peroxides. So, they have no idea when the temperature is going to get too hot and then cause an explosion or a fire.

So, that`s why they evacuated everybody last night. And they`re, honestly, a lot of people are just sitting and waiting.

MADDOW: You asked that question today with the Arkema CEO about whether or not he would release the inventory essentially of what chemicals were kept on site now, that that`s no longer something that people have public access to in the state. I thought it was remarkable that he refused and he said he saw no need to do that.

Did you ask that, because you believe there might be information in that inventory which would help make decisions that would preserve human health and life here, that it would help make decisions about the appropriate radius for the evacuation, that it might help prepare for the type of explosion or chemical reaction we`d be expecting here?

DEMPSEY: Honestly, what I was doing when I was asking that question was trying to figure out if we could get an updated form. I have a tier two for 2015 for them when we did the chemical breakdown project. But when we sent out letters to that facility, because that facility was listed as one of the highest potential for harm facilities in the Houston area at the time, they told us that they reduced the amount of cumene hydroperoxide. It`s one of those organic peroxides that they have, that they said they reduced the storage of those chemicals dramatically.

When I asked them how much they reduced it, they said, we don`t want to tell you. I said, well, I can`t verify that you reduced it dramatically, if you won`t tell me. They said, well, you`ll have to trust us essentially.

So, I was hoping we can get an updated form, so I could see how much cumene hydroperoxide they had. And so, we could have a better job of seeing whether government officials were making the correct decision, whether the company was making the correct decision, whether they were being a hundred percent honest about what they have on site. I thought it was -- I`ll be honest, I was surprised as you were that they didn`t provide it.

What do they have to lose at this point? They don`t look good already because of the situation that they have.

MADDOW: Right. And I guess it`s -- I mean, it`s scary to be thinking about just waiting on this thing to explode. Putting aside the damage that may or may not occur because of a fire or explosion, what`s your sense about how damaging it may be just to have this plant be so damaged by what`s about to happen? How toxic is this stuff? What type of other facilities are around it?

Are we looking at something that`s going to be an environmental, or sort of pollution crisis even after whatever happens with the initial fire or explosion?

DEMPSEY: Right. Actually, just a bit more than two miles down the road from the Arkema facility, there`s another chemical plant called KMCO. They`re also on our high potential for harm list. That`s all based off of analysis we did with Texas A&M University.

And it`s based off of the chemicals that they had, how much of it they had, and the number of people that were located within a two-mile radius of the facility. So, that`s why we determined that plant -- that Arkema and this other plant, KMCO, why they`re considered a high potential for harm facility. So, I am kind of worried.

Their highest -- sorry, their worst case scenario that they listed with the EPA involved two other chemicals. If I remember correctly, sorry, I`m blanking right now -- I don`t want to get that chemical wrong, but essentially, there`s two other chemicals that weren`t organic peroxides. And the fear was that those tanks if they rupture would have an environmental concern.

Well, I assume if a fire/explosion happens, that those tanks might rupture. And at worse case scenario, they listed with the EPA, literally, it lists out that those were -- that worst case scenario was considering perfect meteorological conditions. We`re far past the perfect meteorological conditions at this point. So, there is a lot of concern.

Just a quick point, too, I heard from a number of experts who wondered why temperature was their only way to keep this organic peroxide safe. At least two experts that I talked to said they should have had -- it would have been standard operating procedure for a facility like this to have some sort of compound to squelch the organic peroxide, essentially make it the explosion risk, the fire risk was not there.

The problem is, it would eliminate that stock so they wouldn`t have it for product going forward. So, they didn`t do that. I don`t know why they didn`t do that, I haven`t gotten a good answer from Arkema about that at this point. I don`t know if they didn`t have a compound. Maybe they weren`t following procedure, according to these experts.

But I find it troubling that they said they planned for a worst case scenario. And the storm just ripped right through that.

MADDOW: Matt Dempsey, data reporter at the "Houston Chronicle" -- I followed your work for a long time. You always do very good work. Right now, you`re doing work that is very, very scary to hear about, even from this distance. Thank you for helping us understand it. I appreciate it.

DEMPSEY: Thank you again for having us on.

MADDOW: I will say that last point that Mr. Dempsey was making there, other people who store this stuff have a fail-safe, right? This is a chemical that will explode, or at least burst into flames if it`s allowed to rise in temperature. But there`s a way that you can treat that, stop that from happening. It does ruin the compound, so you can`t sell it anymore.

If that`s true, if they didn`t have that option, or they chose not to exert that option, and this thing does go off like a bomb, it`s going to be really hard to have conversations about making something like this not happen again, without actual government regulation that forces people to do the right thing.

All right. Much more news tonight, including a whole bunch of developing news on the Trump-Russia investigation. Stay with us.


MADDOW: Interesting breaking news tonight from concerning Paul Manafort, the Trump campaign chair who has emerged as a central figure in the Robert Mueller-Trump-Russia investigation. This just came out from "Politico" this evening. You might remember, we reported just last night that when it comes to Paul Manafort, he appears to be getting sort of, not special treatment, but specific treatment. The special counsel appears to be treating him differently from the way that we can see they`re treating everyone else. For example, Paul Manafort is the only one we know of to have had his home raided by the FBI, as part of the Mueller inquiry.

Also last night, we learned that the special counsel has issued a subpoena to one of his lawyers. Not giving a subpoena for Paul Manafort, to one of his lawyers to hand off to Paul Manafort, but literally subpoenaing the lawyer, asking for documents and testimony. That`s an unusual, to say the least, for the government to subpoena somebody`s lawyer to come testify about their client.

Special counsel also issued a subpoena to Paul Manafort`s spokesman, which itself is a strange thing. So, we knew all that as of last night`s show, talked a little bit about that on last night`s show.

Now, tonight from, we get more late breaking news concerning him and the way he`s being treated by the Mueller investigation. is reporting tonight that special counsel Bob Mueller is working with the attorney general in the state of New York, Eric Schneiderman, to look into Paul Manafort`s financial transactions.

Now, this is according to several people familiar with the matter, unnamed sources. The article says that the two teams, the Mueller team and the Attorney General Schneiderman`s office, they have begun collecting and sharing evidence related to potential financial crimes, including possible money laundering. They also have reportedly been in regular contact over recent weeks about putting together a potential case, a potential prosecution. Now, why is it particularly provocative and very interesting about this inquiry to learn that the special counsel in Washington might be working with a state level attorney general? Well, that`s because of how this might intersect with the prospect of President Trump pardoning people in the Trump-Russia investigation.

According to tonight, reporter Josh Dawsey, quote: The new cooperation could potentially provide Mueller with additional leverage to get Manafort to cooperate in the larger investigation into Trump`s campaign as Trump does not have pardon power over state crimes. So, if the flip strategy with Paul Manafort is to put so much pressure on him in terms of his potential criminal liability, that he says, uncle, uncle, OK, I`ll tell you what I know about the Trump campaign, that pressure was presumably alleviated by his hope or expectation that President Trump would pardon him and render him not touchable by the Mueller investigation in terms of federal crimes.

That alleviation of pressure doesn`t apply to the states. A federal pardon doesn`t get you out of state prosecution. If there is a potential state level prosecution for Manafort in financial crimes, then the flip strategy just got all its leverage back, no matter what the president does.

Joining us is the reporter who broke the story tonight for "Politico", Josh Dawsey.

Mr. Dawsey, thank you very much for joining us on such short notice. I really appreciate it.

JOSH DAWSEY, WHITE HOUSE REPORTER, POLITICO (via telephone): Thanks for having me, Rachel.

MADDOW: Let me ask if I understand the gist of what you`ve written. If they are working together, obviously it raises the question of whether or not Manafort may not be able to rely on a presidential pardon to get out of prosecution here. But it also means that there`s potentially legal liability for Manafort in terms of state crimes, right?

DAWSEY: Sure. We know Attorney General Eric Schneiderman has issued subpoenas for bank records, and other financial transactions in New York. We know he`s been pretty aggressive in recent months. And in the past recent weeks, the last couple of months or so, the two teams have started working together, to kind of share their evidence, to talk about what they know and discuss potential -- if charges come, should they be filed on the federal level, on the state level, who has the best evidence and which statutes apply the most, and kind of have a sense of, you know, OK, what does everyone know here? Let`s all get on the same page.

MADDOW: Is there a precedent for this sort of thing? Is this a very unusual decision by these two law enforcement officials to be pursuing it this way? I don`t know enough about how federal and state law enforcement work together to know if this is unheard of or if this is something they regularly do?

DAWSEY: Well, state and federal authorities often work together on cases, particularly in New York. You know, Attorney General Schneiderman has worked with Preet Bharara, the former SDNY prosecutor on a number of cases, the FBI often consults with local cases.

We`re not aware of previous precedent for special counsel Bob Mueller consulting with local and state authorities. Now, that`s not to say there isn`t one, but we just don`t know about it. This is the first reported that we`ve seen, and others have seen, where the special counsel is doing that.

MADDOW: Josh, do you know -- were you able to uncover how long this teamwork has been happening? How long these two teams have been working on this together? And do we know which side initiated this?

DAWSEY: We don`t know which side initiated it. I was in some reporting today, that, you know, it happened over the summer. We know there were subpoenas issued by Attorney General Schneiderman in this case, this summer. And we also know, you know, the special counsel was impaneled this summer, and the way that my sources told me today is that the cooperation has been ongoing, you know, for at least a month.

So, my sense is that probably mid, late summer, could have been early summer, but about two or three months or so.

MADDOW: Josh, one last question for you. The way this fits into my understanding of what`s going on with the Mueller inquiry is Paul Manafort isn`t just sort of at the center of the bull`s-eye, it feels like he`s his own gigantic target at this point. They really seem to be treating him differently than other people who are associated with this case -- the FBI raid, subpoenaing one of his lawyers, now this news about potentially bringing in state level law enforcement as well.

Do you have any insight into that, any sense about whether or not that perception is accurate?

DAWSEY: Well, we certainly have not seen those sorts of ratcheting up with, you know, Michael Flynn or others in the case. You know, "The Financial Times" reporting tonight that the Russian lobbyist at the Trump Tower meeting, with dirt with -- supposedly offered that Hillary Clinton had, you know, met with -- had met with the grand jury. So, we know the grand jury is working.

We do not know of any other suspects in the case who has had their house raided, who has said -- you know, the lawyers and PR folks subpoenaed. We also at this point, Rachel, don`t know who`s cooperating. So, there could be others who could be cooperating with the case, who could have a secret plea deal.

We don`t know that. I mean, there`s no reason to think that, but, you know, it`s possible. These are often sealed and under oath for several months or a year.

So, what we`ve seen is the most aggressive public posture from Mueller`s team toward Mr. Manafort. Though it`s kind of hard in these investigations, they`re a bit of a puzzle, and Mr. Mueller`s team has not leaked like some law enforcement bodies, to really know what they`re up to, with the public subpoenas and what we can kind of triangulate from various sources who are familiar with the case.

MADDOW: That`s exactly right. We`re not -- we really not getting leaks from them. We`re able to read stuff out of their publicly visible actions, but that`s it.

Josh Dawsey, congratulations on this scoop tonight for "Politico". Really, really interesting reporting. Thanks for being here.

DAWSEY: Thanks for having me, Rachel.

MADDOW: All right. Much more to come tonight. Stay with us.


MADDOW: We`ve got more ahead tonight on Harvey and the swath it continues to carve through Texas and now Louisiana. We`ve got another live report on that story coming up tonight.

I also want to get up to speed, though, on some of what has just shaken loose from the Trump Tower-Moscow story that broke this week. That story appears to have shaken loose the news that the president`s eldest son, Don Jr., will be testifying to Congress soon. We`ve got first word about that yesterday. We got really interesting development in that story this afternoon. We have a little more on that coming up later on in the show. The Don Jr. testimony plan is apparently already getting messed with by the White House and by the president personally. Again, more on that later.

And as Josh Dawsey just referenced, about the news he broke in "Politico" tonight, that Robert Mueller and the New York state attorney general, Eric Schneiderman, are apparently working together on the Paul Manafort part of the Trump Russia investigation.

As Josh Dawsey just mentioned in that interview, there`s also news tonight from "The Financial Times", from "FT", that the mysterious Russian fixer who turned up at that Trump Tower meeting last June, the one who has such an intriguing background and hacking attacks where documents are stolen from people`s computer servers and then used for good political reasons, he apparently has been called before Robert Mueller`s grand jury to give several hours worth of testimony. That happened on August 11th. We`re just learning about it today from FT. So, lots going on.

But there`s something else that I want to stick a flag in here regarding the money part of this, the banks. The bank that was purportedly going to finance Trump Tower Moscow is VTB. VTB is 60.9 percent owned by and fully controlled by Vladimir Putin, by the Russian government.

That alone is a stark detail of the Trump Tower-Moscow story we broke this week, right? While Trump was running this strange Republican presidential campaign that involved him praising Putin all the time, we now know he literally was simultaneously pursuing a giant business deal, not just with generic Russian interests, but with Putin specifically, with the Russian government.

If VTB was really the lined-up financing for the Trump Tower Moscow deal, then that was the Russian government that was going to finance that deal, to the tune of hundreds of millions of dollars. That makes the reported involvement of VTB bank in this deal really on the nose important.

It`s also a very interesting part of the Trump Tower Moscow story, because it means that VTB Bank is now the first second, third, fourth, fourth Russian bank to go streaking naked across this Trump-Russia scandal. I mean, one is interesting. Two is maybe a fluke. Three is surely a coincidence. But four? Four of them?

It`s VTB Bank now with the Trump Tower Moscow project that the president was apparently pursuing well into his presidential campaign. Before now, it wasn`t the VTB Bank. It was the VEB bank, another gigantic Russian bank, whose handpicked by Putin chief executive met with Jared Kushner during the presidential transition, which Kushner never reported until it made its way into the press.

VEB is also the bank that operated a rank of Russian spies out of its New York City office. Or spy ring that just happened to target and recruit Trump campaign foreign policy adviser Carter Page.

So, there`s VTB Bank, there`s VEB Bank, both sanctioned by the U.S. government for their close links to the Putin regime, both of those banks inexplicably tied up with Trump campaign figures.

There`s also Sberbank. Another U.S. sanctioned bank close to Putin, which is the bank that decided to hire Donald Trump`s top Russia lawyer to work for them on a legal case in New York this spring. Really, of all the guys?

And before all that, there was Alfa Bank. Alfa Bank is another big Russian bank also linked with Putin. But Alfa Bank is not sanctioned by the U.S. government. In fact, they`re trying to become a business, a big business in the West, and in the U.S. To give a little brand distance from their Russian origins, the Western interests of Alfa aren`t being called Alfa, they`re being called letter One. Get it? Letter One, alpha, letter two, beta, right?

Even with the new wink and a nod name change, though, Alfa still has a problem, because Alfa is the bank that turned in this still very strange story right before the election. Frank Foer of Breaking the news about large-scale, unexplained computer server interactions between an Alfa Bank server in Russia and a Trump organization server in Trump Tower.

These unexplained intensive computer server interactions between what appears to be the Trump Organization and Alfa Bank, those happened last summer and fall in the heat of the presidential campaign. We still don`t know what they were about.

That story broke in late fall, right before the election. Nobody really knew what to make of it at the time. But by this spring, with the Trump- Russia investigations blossoming in Washington like cherry blossoms, that server story, the Alfa Bank thing took on renewed importance. At least there are more people looking back at that and getting interested in it again.

And so, Alfa Bank hired itself some lawyers, basically to help clean this thing up. And their efforts included sending threatening lawyer letters to the computer experts who were asked for comment on the story by various reporters who were working on the story. It also included Alfa Bank launching their own independent investigations of these crazy allegations against them.

Those independent investigations that Alfa Bank arranged came to the conclusion, you`ll be shocked to hear, that Alfa Bank was totally fine. Nothing to see here. Everything`s -- you guys are blowing this all out of proportion.

One of those two investigations, I should tell you, didn`t even look at what happened during the campaign. They didn`t look at anything that happened in calendar year 2016.

And here`s how "The New York Times" described the other one. Quote: The investigation of Alfa Bank was at best cursory. According to people familiar with the review, its experts were shown metadata for the communications that took place. The content of the messages were not available to the reviewers.

Quote: Without a much deeper forensic examination, the review could not determine the purpose of the communications between the two servers. The resulting report was carefully hedged, noting that without more study, it could not give the bank a clean bill of health. Nevertheless, the bank used that report to make the case that it had been exonerated.

It`s nice trick, right? Somebody turns up something fishy in your behavior, you say, oh, I`m shocked to hear those terrible allegations, I`ll look into it. And then you don`t at all look into it, but you produce a report and you wave it around, and you tell everybody it exonerates you, nothing to see her, I checked it out. It`s fine.

The Alfa Bank server story is absolutely still live. First, because we`re now aware that Russian banks are coming up over and over and over again when it comes to contacts between Russia and the Trump organization and Trump campaign, contacts with the Trump side has been keeping secret for months and months now.

And now that we`re aware of the role of Russian banks in the Trump and potentially the Kushner business dealings that overlap with the campaign, the focus on the banks is getting hotter and hotter. But the Alfa Bank- Trump Tower server story is also still alive, because whatever those communications were during the campaign between this Russian bank and the Trump organization, it`s still unexplained all these months later. The cleanup, nothing to see here effort by these lawyers who Alfa Bank hired, it hasn`t worked. It has not been a credible cleanup effort.

But, you know, these guys do have a way of landing on their feet anyway. And now, one of the lawyers who Alfa Bank hired to do that cleanup work, one of the lawyers they brought in to oversee one of these so-called investigations of the whole Trump Tower server thing, the one that didn`t even look at anything in 2016, one of those lawyers is a man named Brent Benczkowski. And Brent Benczkowski is who the Trump administration has now nominated to lead the criminal division of the U.S. Department of Justice.

Criminal division of the U.S. Department of Justice is a big deal. Robert Mueller, the special counsel on the Trump-Russia investigation, he`s the former head of the FBI. Before he was the head of the FBI, he was head of the Criminal Division at Justice. The current FBI director, Christopher Wray, before he became current director of the FBI, he was head of the Criminal Division of Justice.

Being the head of the Criminal Division at Justice means you oversee everything from fraud, to money laundering, computer crime, narcotics, child exploitation, organized crime, public corruption. Trump has nominated for that job the lawyer who has been working up the Alfa Bank- Trump organization server story.

And Brian Benczkowski`s Alfa Bank connection has been reported before. It was the subject of discussion at his confirmation hearing. That`s how we learned it`s not like Alfa Bank has been a long-standing client of his or something. He specifically went right to work on this Alfa Bank clean up the Trump Tower server story, he went to work on that immediately after leaving the Trump transition.

But now we know that Russian banks may be at the bull`s-eye of this scandal, right? The Criminal Division of the Justice Department is a huge deal. So are Russian banks when it comes to understanding the Trump-Russia scandal.

The Senate is about to vote on whether or not those two big deals should be combined by installing the Alfa Bank-Trump Tower cleanup server cleanup lawyer at the Justice Department in that very critical job. That vote in the Senate on his confirmation is due very soon. So I guess stick a flag in that.

We`ll be right back.


MADDOW: This is one of those nights. We have more breaking news right now out of Texas.

One of the complicating factors for this storm has been a new Texas law that would target so-called sanctuary cities. Bottom line is it would make it more likely for immigrants to face deportation, particularly when they had some reason to come into contact with any public officials or law enforcement.

Well, in the middle of this gigantic disaster in Texas and in Houston in particular, the Houston mayor has had to spend quite a bit of time reassuring immigrants who live in and around Houston that it`s safe to ask for help in this storm. It`s safe to get to shelter. He said, nobody will ask for your papers. He said if anybody seeking help ends up facing deportation because they asked for help, the mayor said he would defend them himself.

Now, a big part of the reason the mayor had to quell those kinds of fears over the course of this storm is because this new anti-immigrant law in Texas, SB-4, is due to go into effect for the first time this week. It`s due to go into effect on Friday.

Well, as of a few minutes ago, that is now off. A federal judge in Texas has just blocked the state of Texas from enforcing that new anti-immigrant law.

The judge saying in this ruling tonight, quote: There`s overwhelming evidence by local officials including local law enforcement that this law will erode public trust and make many communities and neighborhoods less safe. There`s also ample evidence that localities will suffer adverse economic consequences which in turn harm the state of Texas. The court cannot and does not second-guess the legislature. However, the state may not exercise its authority in a manner that violates the United States Constitution.

And so for now, that new anti-immigrant law in Texas due to go into effect this week, it is on hold. The Texas governor has just released a statement saying he will appeal.

We`ll be right back.


MADDOW: As I mentioned earlier in the show, "The Financial Times" has just reported late tonight that Rinat Akhmetshin, the Russian fixer and former Soviet military intelligence officer who attended the Trump Tower meeting last June that involved Trump campaign officials and a whole bunch of other Russians, Rinat, according to "The Financial Times" tonight, he has just given testimony to special counsel Robert Mueller`s grand jury for several hours. On August 11th, he apparently did this testimony. This is only the second time we`ve learned about specific people who have been called to testify before the Mueller grand jury.

Rinat Akhmetshin is a naturalized U.S. citizen. He`s Russian born. He retains a Russian passport. He has numerous ties to Russian intelligence, including military intelligence. He`s also been associated with at least two previous campaigns where he`s worked for pro-Putin business figures whose opponents in financial or business or legal combat have found themselves targeted with computer hacking and stolen documents that are then turned against them in the public sphere. Just in case that sounds familiar.

Rinat Akhmetshin, we`re told, he`s separately being investigated by the Senate Judiciary Committee himself, but he has testified to the Mueller grand jury.

Now, the Senate Judiciary Committee, they`re one of the three main committees in Congress investigating ties between the Trump campaign and Russia. Today, very interesting, chairman of that committee got a very special phone call. Quote: Just had a phone call from President Trump. He assured me he`s pro-ethanol, and I`m free to, I think, tell is the world he forgot here. Free to tell the people of Iowa he`s standing by his campaign promise.

Unclear why the president thought today was a good time to reach out to the senator from Iowa to talk about ethanol, but that call did come less than one day after Iowa Senator Chuck Grassley`s committee announced that they`d set a date for Donald Trump Jr. to come testify to that committee about arranging that Trump Tower meeting.

Now, today the White House denied the Trump conversation with Grassley had anything to do with the committee`s Russia investigation whatsoever. The president just had a feeling about ethanol all of a sudden.

Meanwhile, Senator Grassley`s office says it was a two-minute call in which only ethanol, Hurricane Harvey, and former Iowa Governor Terry Branstad came up. So, there was definitely no pressure on the Russia thing, no pressure to be nice to Don Jr. Definitely not. It was barely even implied.

Still, reliable conservative publications like "The Washington Times" weren`t buying it. Their headline -- look at this. This made be laugh out loud when I saw this today. Look at their headline. Can we put it up? Do we have it? Come on.

Their headline today, there it is. Trump calls Grassley about ethanol ahead of son`s meeting with the Judiciary Committee.

Right. Even "The Washington Times" gets the importance of that call today. All right. Watch this space.

Watch this space right here literally? Watch me? By which I mean that does it for us tonight. We`ll see you again tomorrow.


Good evening, Lawrence. Sorry to be coming to you a little bit early. Something happened that I didn`t know about.

LAWRENCE O`DONNELL, MSNBC HOST, THE LAST WORD: Good evening, Rachel. It`s 9:59 and 29 seconds, and so I`m shocked to be talking to you so soon.

MADDOW: I`m very sorry. I didn`t know it was coming either.

O`DONNELL: But ready for it. I don`t have all of the White House logs for all presidents in front of me at the moment, but I have reason to suspect that a sitting president of the United States has never once picked up the phone to call an Iowa senator to say, ethanol is great. It`s something that presidents tend to mention once every four years when they`re running for president, and it never comes up again.

MADDOW: Or conceivably, if the senator from Iowa has something going on that the president really, really has strong feelings about. The president`s son getting called before Grassley`s committee less than one day before this call to Grassley about, you know, heartfelt feelings about ethanol.

It`s a little unsubtle even for this White House. Even for the conservative media that isn`t buying it, but we have to adjust our subtlety meter in this era.

O`DONNELL: So, it may be that this is the first time in history that Donald Trump picked up the phone for something other than self-interest. Just to praise ethanol.

MADDOW: Just to praise ethanol. He was just thinking warm thoughts about corn, yes. Thank you, Lawrence.



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