FBI raids office of Trump lawyer Michael Cohen. TRANSCRIPT: 04/09/2018. The Rachel Maddow Show

Guests: Tom Hamburger

Show: THE RACHEL MADDOW SHOW Date: April 9, 2018 Guest: Tom Hamburger

RACHEL MADDOW, MSNBC HOST: Or maybe we won`t learn so much as we`ll continue to be bombarded with unbelievably totally unprecedented news like we`re being struck by meteors.

CHRIS HAYES, MSNBC HOST, "ALL IN": I started the day in a pool with my son in the Caribbean. And that seems so remote. That seems like an Ice Age ago or something. I cannot believe that`s where today started.

MADDOW: You actually are psychologically excused from having kind of a dislocated out of body experience. For me, I`m having that just for the distance between what happened at my news meeting today when we decided what was going to be on the show and tonight. It`s that far of a distance as well.

HAYES: All right. I`m going to watch the show.

MADDOW: Thank you, my dear. Much appreciated.

And thanks to you at home for joining us this hour. I did have a whole different show planned for tonight. We`ll do it tomorrow.

Things happen, you know? Bead up, roll off. I`m trying to be a duck about this. I`m trying to be a Zen duck. Bead up, roll off. Just let it go.

All right. We`re going to start tonight with an important thing to know about the FBI raids on the home office and hotel room of the president`s personal lawyer, Michael Cohen. Since Robert Mueller was appointed to be special counsel investigating the Russian attack on our presidential election and the question of whether any Americans were in on that crime, from the very start, Robert Mueller has been willing to use fairly aggressive tactics to get his hands on information and evidence and even people that he and his team think are relevant to their investigation.

There was famously the no-knock search warrant that the Mueller team executed on former Trump campaign chairman Paul Manafort`s house in Virginia. That was in the wee hours of the morning one day last summer. They picked the lock, they stormed in, they took binders full of documents and computer files.

Paul Manafort`s first notice that they were there was when they knocked on his bedroom door, because they didn`t knock on the front door. And then once they knocked on the bedroom door, they came in and photographed his expensive suits in his closet for evidence.

The special counsel`s team also got a search warrant in May of last year for a storage locker that belonged to Paul Manafort. According to a new court filing from Manafort`s lawyer, the way the FBI got access to that storage locker in the first place is they got a former employee of Paul Manafort`s who had a key to that storage facility. He got -- they got that employee to open up the storage locker for them. Then once Mueller`s agents saw what was in that storage locker, they went to a judge, got a search warrant, and then carted it all away.

We don`t know if that`s actually how that went down. That`s how Manafort`s lawyers say it went down in their new court filing. Manafort`s lawyers are actually asking the judge in that case to suppress the evidence that was taken from that storage locker because they say that former employee had no right to open it up in the first place, and so, that`s something that judge is going to have to rule on.

But clearly, Mueller`s team has been aggressive in executing warrants and conducting searches when it comes to Paul Manafort and others. I mean, just on Friday, we learned that the special counsel has kept on executing new search warrants related to Manafort right up to just a few weeks ago, even though Manafort`s already standing trial in two federal jurisdictions on dozens of felony charges. As of last month, they were still executing new warrants against him.

That said, when Mueller first charged Manafort, he did at least allow him to turn himself in at the local FBI office and then walk right back out again. Trump campaign foreign policy adviser George Papadopoulos was not so lucky. Mueller`s team stopped him and arrested him, right after he got off a plane at Dulles Airport in Washington. They held him overnight in a cell. They took him to court the next morning.

Then there was also George Nader, a frequent Trump White House visitor, an ex-con on child porn charges, a reported adviser to the United Arab Emirates, now reportedly a cooperating witness for the Mueller investigation. He too was stopped by FBI agents working for Mueller`s team. They reportedly stopped him at the airport, at Dulles Airport, searched his electronics, served him with a subpoena to testify to the grand jury. Eventually, he became a cooperator.

Also, an Australian businessman who reportedly knows George Nader, he also was reportedly stopped by Mueller`s team at an airport and had his electronics seized.

A right-wing writer guy who once lobbied for a job in the Trump administration said just within the last two weeks that he too was detained by Mueller`s team, in his case at Logan Airport in Boston. There are also apparently several Russian oligarchs who have been stopped and questioned by FBI agents working with Mueller`s team including at least one oligarch who had his plane and his personal electronics searched when he landed at a New York-area airport in his private jet.

Just last week, Mueller`s investigators showed up unannounced on the doorstep of some unnamed business associate of the Trump Organization. They were reportedly armed with subpoenas compelling electronic records and sworn testimony from that business associate of the Trump organization. So, we know that Robert Mueller`s office, special counsel`s office, has done all of these things, right? A no-knock predawn search warrant, arresting people as they step off of planes, showing up at people`s private planes and their houses and their offices with subpoenas to seize their phones and seize their computers and seize their records.

And that`s what we`ve seen from them so far before today. That does not appear to be what just happened today with Michael Cohen. The president`s long-time personal attorney Michael Cohen did have his New York office raided today, along with a hotel room that was apparently his temporary home. He`s staying at a hotel while his apartment is being renovated I think.

"New York Times" was first to report today that the FBI raided Cohen`s office, quote, seizing business records, e-mails and documents related to several topics including payments to a pornographic film actress. That would be the $130,000 that Cohen says he paid to adult film star Stormy Daniels right before the 2016 election in order to keep her quiet about an extramarital affair she says she had with Donald Trump.

Now, as to why Cohen`s office got raided, "The Washington Post" was the first to report today that Cohen is under federal investigation for possible bank fraud, wire fraud, and campaign finance violations. Investigators took Cohen`s computer, phone, and personal financial records as part of the search of his office at Rockefeller Center in New York City, which incidentally is where I sit right this second.

Quote: the broad seizure collected communications between Cohen and his clients, including some with Trump. So, in this case, while we know that Mueller`s team has been happy in the past, happy since the start of this investigation, to execute warrants and searches anywhere, even at very inconvenient times and at very unexpected places, this doesn`t appear to be that same thing. This doesn`t fit that pattern, because what happened today to Michael Cohen doesn`t appear to have been done by Mueller`s team.

These raids today on these premises controlled by Michael Cohen appear to have come about thanks to a referral from Robert Mueller`s team, a referral from Mueller`s team to the U.S. attorney`s office in Manhattan, in the southern district of New York. So, it appears that Mueller`s prosecutors may have come across something in the course of their investigation, they may either have concluded themselves or more likely been told that that something was outside the scope of their investigation in the special counsel`s office, but that matter still deserved to be pursued as a potential criminal issue. And so, they passed it on to the federal prosecutor in the jurisdiction where Michael Cohen lives and works and presumably where he banks.

So, this wasn`t Mueller`s team. This was a referral from Mueller`s team to a local prosecutor, the federal prosecutor in the locality where Cohen is.

We think we know of only one other instance in which the Mueller investigation has led to something like this. That time, it was about Paul Manafort. It related to some unusual loans that extended to Paul Manafort right after he left the Trump campaign, over $15 million in loans to Paul Manafort from a small regional bank in Chicago that seemed to have no business making those kind of loans.

That bank in Chicago was set up to benefit military veterans. Paul Manafort is not a veteran. The loans to him also represented almost a quarter of the bank`s total loanable assets. Why would you give away a quarter?

The president of the bank turns out to be a Trump campaign adviser. Does that look a little odd?

NBC News reported, though, that though the special counsel team looked at those loans, they didn`t see any connection to their investigation in the special counsel`s office. And so, they referred that case to the U.S. attorney for the southern district in New York. They referred that case to the federal prosecutor in Manhattan.

And, of course, it`s not like the Mueller investigation, Mueller and his team stopped looking into Manafort. They still then and are still going after Manafort on a gazillion other charges. And in fact when evidence later turned up that those loans from that little Chicago bank to Manafort, they might have been a quid pro quo. They might have demand exchange for promises to the Chicago bank they`re he could get a big job in the Trump administration.

Well, when that evidence emerged, then Mueller`s team reportedly started looking at those loans again themselves in light of that new information, to see if maybe they wanted to un-refer that case. Maybe they wanted to bring that back under their purview.

So that one thing involving that little bank and those loans to Manafort right after the election, that`s the only other time we know of that something like this has happened on a particular matter, Mueller`s prosecutors came across something they thought was potentially criminal, but not with their remit at the special counsel`s office so they kicked it out to a part of the Justice Department that`s outside the special counsel`s office for them to pursue on their own. That appears to have happened for a second time today with Michael Cohen.

Now, that seems important. At least in terms of understanding the importance of what happened it seems like a helpful distinction to grasp, because there are definitely things Michael Cohen is known to have been involved in that could conceivably be within the Mueller investigation. In October 2015, Trump signed a letter of intent to pursue a Trump Tower Moscow, even while he was insisting publicly that he had no business deals in Russia. That was a project that was spearheaded by Michael Cohen and a Trump business associate who is a convicted felon named Felix Sater.

According to e-mails obtained by "The New York Times" last year, Sater wrote to Michael Cohen about the project, quote, our boy can become president of the United States and we can engineer it. I will get all of Putin`s team to buy in on this. I will manage this process. I`ll get Putin on this program and we will get Donald elected.

A few months later in 2016, Michael Cohen -- I`m not kidding -- wrote directly to Vladimir Putin`s office, seeking Vladimir Putin`s help with the Trump Tower Moscow project, reached out to Putin`s spokesman. We don`t know if he ever heard back.

So, there is that involving Michael Cohen. There was also the Russia sanctions relief plan that Michael Cohen appears to have hatched with Felix Sater and with a pro-Russia Ukrainian lawmaker, a plan to try to get rid of American sanctions on Russia while Russia also got to keep Crimea, which would be a great deal for Russia.

Depending on what day you asked Michael Cohen about that Russian sanctions plan that he helped cook up, he either delivered that incredibly evenhanded proposal to then national security adviser Mike Flynn at his desk in the White House or maybe Michael Cohen just delivered that plan right to his home trash can. Depending what angle you ask him from you might get a different answer on what became of that Russia-related plan he was involved with.

So, the FBI has now raided Michael Cohen. There are a couple of Russia- related things where you could imagine Michael Cohen coming under the special counsel`s purview as he looks into the Russia matter.

But this raid really could be anything. Reports on the raids of Cohen`s office and his hotel room today are careful to point out that while it appears to be related to the hush money payment to Stormy Daniels, it could absolutely involve other matters as well. Michael Cohen pops up in all sorts of random Trump stuff that might conceivably have criminal implications that the southern district of New York might want to execute an office raid for.

I mean, yes, there`s that $130,000 paid to the porn star that set off all kinds of red flags at the financial institution that it was routed through. And it also raises questions about potential campaign finance violations if that payment was made to try to influence the election.

Then, there`s the matter of a "Playboy" model, not Stormy Daniels, different lady, who also claimed to have had an adulterous relationship with Trump. She also got paid 150 grand for not speaking about her story. She now contends that contract that she signed in that matter was fraudulent because the guy who she thought was her lawyer in that matter secretly behind the scenes was working with Michael Cohen.

There was also that time Michael Cohen threatened a reporter who was digging into different allegations against Trump telling the reporter, quote: I will make sure that you and I meet one day, and I will take you for every penny you still don`t have. And I will come after your daily beast and everybody else you that possibly know, so I`m warning you tread very F-ing lightly because what I`m going to do to you is going to be F-ing disgusting. I`m going to mess up your life for as long as you`re on this frickin` planet, end quote.

I mean, while we`re going down the rundown, hey, back in the day, I should tell you, Michael Cohen also lied to me, lied to us at this show about an environmental cleanup legal matter at a place that Don Jr. used to own. I mean, it really could be anything.

But what we know tonight is that Michael Cohen`s office and his hotel room have been raided by the FBI under the direction of prosecutors in the southern district of New York, working on a case referred to them from the special counsel`s office.

It`s a big deal for a couple of reasons. First, no-knock search warrants are usually only carried out when prosecutors have reason to believe that other less intrusive methods won`t work. So, prosecutors in this case presumably had to convince a judge that just subpoenaing these records that they want wouldn`t be enough, they had to go grab them, had to go get them with a search warrant.

This is also important because this appears to have been a referral from the special counsel`s office.

We`re hearing tonight that if that`s the way this went down a lot of people at various levels of the justice department would have had to sign off on this. Up to and including the Deputy Attorney General Rod Rosenstein. Stick a pin in that. We will come back to it. It`s important.

Third, seizing records from a lawyer`s office is really complicated. Lots of things are covered by attorney-client privilege, including perhaps records in Cohen`s office relating to his service as President Trump`s personal lawyer. So, the FBI and prosecutors have to proceed with a lot of caution here.

Michael Cohen`s lawyer this evening issued a statement that read in part, quote: The decision by the U.S. attorney`s office in New York to conduct their investigation using search warrants is completely inappropriate and unnecessary. It resulted in unnecessary seizure of protected attorney- client communications between a lawyer and his clients.

So, there are all sorts of reasons this raid is fascinating and potentially important today. But, of course, the primary reason this is such a big deal is the president of the United States just had the office of his personal lawyer raided by federal agents. And that doesn`t happen every day. That doesn`t even happen every lifetime. That doesn`t even happen once a country.

But tonight, the president surrounded by his senior military leadership called these raids by his own Justice Department a break-in. He said: I just heard they broke into the office of one of my personal attorneys, a good man. It`s a disgraceful situation. And then he openly mused about the possibility of firing special counsel Robert Mueller.

Joining us now is Tom Winter, reporter with the NBC News investigations unit who`s been following this all day.

Tom, I appreciate your time tonight. Thank you.

TOM WINTER, NBC NEWS INVESTIGATIVE REPORTER: Thank you.

MADDOW: So the first thing that I thought when I heard about this today was what, this is in the building and we didn`t see it?

(LAUGHTER)

MADDOW: We are in Rockefeller Center. We got no footage of the raid under way.

WINTER: No. It was -- kudos to the FBI. They did not call up ahead of time and say, hey, you guys may want to get a camera over here. So, no, we did not know about this when the agents first showed up here at the building today, and presumably, they were able to enter and leave and conduct their business without us noticing here and nobody else had a picture of it. So, yes, they were able to do their job.

MADDOW: And in terms of what -- in terms of the way this was executed, we`ve been advised today that -- and Cohen`s lawyer`s making the case, listen, you could have just asked. You could have asked for these documents, you could have subpoenaed these documents, we`ve been cooperating all along.

Why a search warrant? Do we have any indication of why a search warrant, why it was done this way?

WINTER: Well, sure. And according to the U.S. attorney`s manual, the first thing you`re supposed to do is ask. The first thing you`re supposed to do when it involves an attorney is say hey, can we get these documents, maybe follow it up with a subpoena.

But at some point, if you`re a federal investigator or a federal prosecutor, you say, you know what, we may not be getting the full story here or based on documents that they`ve received in other parts of this investigation, they may have said, hey, we`re not getting everything from Michael Cohen that we know that he has and so, we need to go to a judge, present some probable cause here and say, hey, we`re not getting everything that we need and we have reason to believe that he has files, communications, media, something on his computer or computers that we need to have a look at because otherwise we`re not going to get that material through a lawful subpoena. So, at that point, they have to go get a search warrant.

Does it send a message? A lot of people like to look at the theater of this. You know, I think anytime that you have somebody come into your property or to wherever is your realm and say, we`re taking -- physically taking some of your stuff and you can`t say anything about it because the Constitution protects our ability to go in and get this warrant and get the material that a judge approves, yes, that probably sends a message.

But it`s more the fact that it`s prosecutors here that are very good. And the public corruption unit that`s involved in this with the New York FBI field office, this particular U.S. attorneys office, which has prosecuted both Democrats and Republicans, is an office that is known for being very thorough, and if they went in, this was an effort to get all the documents that they think they can get their hands on, they can help them with this investigation.

MADDOW: There is -- there is the matter of the fact this is a lawyer`s office. Some logistics on that, right? That`s a big deal.

WINTER: Sure.

MADDOW: So, Michael Cohen for a long time was a Trump Organization employee. He is no longer a Trump Organization employee as far as we know. He had an office still operating as essentially a solo practitioner. He had an office in another law firm that was located in this building.

WINTER: Yes.

MADDOW: They described their relationship with Michael Cohen as a strategic partnership, some sort of strategic alliance where he was working in an office in their firm without being part of their firm. Today, that law firm announced that relationship has come to an end. They say they`re in touch with prosecutors and they`re cooperating in this matter.

Presumably, there`s -- I mean, presumably, you don`t want anybody working in your office that`s getting raided by the FBI.

WINTER: Exactly.

MADDOW: It`s just inconvenient. But prosecutors have to take incredible - - incredibly specific steps to make sure they`re not infringing on attorney-client privilege when they do something like this.

WINTER: They absolutely do. I mean, first off, you`ve got this right here, this is just a portion, three or four pages from the U.S. attorney`s manual. This is just a portion of what they have to do.

MADDOW: Searches the premises of subject attorneys.

WINTER: Subject attorneys, exactly. So, that`s just a little bit of what they have to in order to get approval to it. They actually have to submit this form. I redacted the information. But they have to submit this form to the Justice Department, to their headquarters in Washington, D.C., or main justice as the saying goes.

So, they`ve got to get all sorts of approvals, all sorts of sign-offs to be able to do this. And then when they get those communications, or they get the results of today`s search, then they have to set up a team, and it`s going to be an entirely separate team that`s going to look at these communications and say, OK, guys, we know the scope, what the judge has approved here, we know the scope of what you can get. And then they`ll hand over those communications to the actual trial team because what they need to protect in this case is for the people actually going to bring this potential case to trial, should he be prosecuted.

That team can`t be aware of any sort of communications that occurred as it related to attorney-client privilege. But if there were communications, and this is where this whole attorney-client privilege thing goes right out the window, if there were communications that were some sort of a favoring of a fraud or covering up of a crime, those communications are not privileged and those are the type of communications that would be made available to prosecutors, federal agents, for them to continue their investigation, to possibly continue their case and one day possibly bring charges.

MADDOW: So, they`ll have a team look at material that Cohen might say is privileged --

WINTER: Exactly.

MADDOW: -- and they may say some of that you think it`s privileged, but that`s, actually, you guys -- you negotiating a crime with your client, we`re going the to hand that over to the other side of the law.

WINTER: That`s subject to the search warrant -- exactly. That`s going to the other side of the law, but some of that other communication that may relate to Trump`s communications on all sorts of matters, most of which you`ve just discussed, those are going to stay on the other side of the law.

MADDOW: Tom Winter, reporter with NBC News Investigations Unit -- thank you for helping us understand.

WINTER: Thank you.

MADDOW: Can I keep this?

WINTER: Yes.

MADDOW: Thank you very much.

All right. Much more ahead. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REPORTER: Did the president and Michael Cohen talk about this payment at any time during the campaign or thereafter?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Not that I`m aware of. And I`d refer you to Michael on that.

RAJ SHAH, WHITE HOUSE DEPUTY PRESS SECRETARY: I`ll have Michael Cohen address any specifics regarding this. You have to ask Michael Cohen about the specifics.

SANDERS: Once again I would refer you to the president`s outside counsel.

I would refer you to Michael Cohen.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You`ll have to ask Michael Cohen. Michael is my attorney and you`ll have to ask Michael.

(END VIDEO CLIP)

MADDOW: You`ll have to ask Michael. C-O-H -- it`s C-O-H-E-N. Call Michael.

When it comes to questions about the president`s alleged relationship with adult film actress Stormy Daniels and the $130,000 payment Michael Cohen says he made to her right before the election, the White House response, the president`s response personally has been to tell reporters they need to talk to the president`s lawyer, call Michael Cohen. We`re not answering, ask him.

Well, today as Cohen`s office and hotel room were raided by the FBI, Carol Leonnig, Tom Hamburger, and Devlin Barrett at "The Washington Post" were first to report that while the FBI did today, seize records related to that payment to Stormy Daniels, what the FBI was after appears to be much broader than that.

Quote: Michael Cohen, the long-time attorney of President Trump, is under federal investigation for possible bank fraud, wire fraud, and campaign finance violations. FBI agents today raided Cohen`s Manhattan office home and hotel room as part of the investigation, seizing records about Cohen`s clients and personal finances. Investigators took Cohen`s computer, phone, and personal financial records including tax returns, tax returns, as part of the search of his office.

One person familiar with the probe said investigators have been gathering material on Michael Cohen for weeks including his bank records. Two of the potential crimes being investigated, bank fraud and wire fraud, suggest prosecutors have some reason to think Cohen may have misled bankers about why he was using particular funds or may have improperly used banks in the transfer of funds.

Joining us now is Tom Hamburger. He`s an investigative reporter at "The Washington Post" who helped break this story. Mr. Hamburger, it`s nice to see you. Thank you for being here.

TOM HAMBURGER, POLITICAL INVESTIGATIONS REPORER, THE WASHINGTON POST: Thank you.

MADDOW: I`m not sure I understand all of what bank fraud and wire fraud and tax fraud means, what those all mean in these circumstances.

Is the implication of your reporting that Michael Cohen might potentially be on the hook for all of those things, all of them related to the Stormy Daniels payment, or the Stormy Daniels payment and a lot of other things are all being rounded up together by the investigators who called for these raids today?

HAMBURGER: So, Rachel, thanks for the question. One of the first things we should do probably is acknowledge what we don`t know, and that is we don`t have the specific answers to precisely what investigators were looking for in this massive and surprising search of Michael Cohen`s law offices, personal residence and hotel room. So, we don`t know precisely.

One of the things we do know from multiple sources is that federal investigators have been looking at Michael Cohen, as you said, in connection with bank fraud, wire fraud, and campaign finance violations, and we know also that some of the materials seized today had to do with the Stormy Daniels case, the payment to the adult industry star just 12 days before the election. And so, it`s possible, it`s possible but we don`t know for sure, that all three of those areas under which Cohen is under investigation could be connected with that Stormy Daniels payment, and if so, here`s how it might work.

If there were payments that were made to a bank account, that were made under false pretenses, or in which Michael Cohen did not provide honest answers when asked about the source of funds, for example, that could be a problem. The campaign violation could kick in if the payment to Stormy Daniels 12 days before the election was seen as in effect a campaign contribution, something that was done in order to benefit the Trump presidential campaign. Michael Cohen has denied to us and to others in the past that there is any connection with the campaign.

But if there was some documentation or some reason to believe that in effect this money was somehow used to support the Trump campaign or benefit Donald Trump as a candidate it could fall under campaign finance laws.

MADDOW: Tom, late last week we saw the president for the first time personally entertain questions about the Stormy Daniels matter and specifically the payment. The president told reporters last week on tape that he didn`t know anything about the payment.

Is there any indication that that might have been a catalyst for these raids going ahead? Is that such a legally significant admission from the president that that might have kicked this into action?

HAMBURGER: Again, Rachel, I think I have to come back to acknowledge what we don`t know. What we do know is there is this coincidence in which the president just a couple of days ago, just last Friday, end of last week, acknowledges that he was unaware of this arrangement, this deal now subject to private arbitration, that he was unaware of the deal that was negotiated on his behalf by his attorney Michael Cohen. It was a stunning revelation by the president, speaking out about that. And then what we find is just a few days later, there`s this raid of Michael Cohen`s legal office, private home, and hotel room.

MADDOW: Yes. I mean, I`m not a lawyer, and I shouldn`t do armchair lawyering on these things and probably nobody should. But to have the president saying he didn`t know about that deal, to have the deal purportedly being something that Michael Cohen negotiated in his interest, obviously, there`s at least tension there. Whether or not it was significant to set this off, the story remains to be told.

Tom Hamburger, investigative reporter for "The Washington Post," it`s always a pleasure to have you here. Thank you for helping us understand.

HAMBURGER: Thanks. Good to be with you.

MADDOW: Appreciate it.

HAMBURGER: All right. Lots of ground left to cover tonight. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Today`s FBI raid on the office of the president`s personal attorney was carried out by FBI agents under the supervision of federal prosecutors in the U.S. attorney`s office for the southern district of New York. So, the Manhattan federal prosecutor`s office. But that raid came after a referral from the office of special counsel Robert Mueller.

Quote: Several law enforcement officials confirmed to NBC News that the search of Cohen`s office was not the work of Mueller`s prosecutors. It involves a matter that the Mueller team came across which the team concluded did not fall under its mandate and they passed it on to the U.S. attorney`s office in Manhattan.

That decision, though, that issue of whatever or not this -- whatever they came across within the mandate of the special counsel`s office, that decision was not ultimately made by Robert Mueller himself. The person who appears to have signed off on that decision is Deputy Attorney General Rod Rosenstein. Attorney General Jeff Sessions has recused himself from all matters related to the Russia investigation. Rod Rosenstein is the number two at the department and he`s in charge of all matters pertaining to the special counsel`s office and the Russia matter more broadly.

As "Bloomberg" reported today, quote: Mueller brought information involving Cohen to Rod Rosenstein. Rosenstein decided that the inquiry should be handled by federal prosecutors in New York.

So, that`s what we believe was the structure of this happening today. But that exact issue, what falls under Mueller`s mandate, what can Mueller do himself and what does he have to give to other people to pursue, the process of deciding what gets wrapped into his investigation and what has to be pursued by other prosecutors, you know, it`s interesting. This exact issue came up when Rosenstein testified before Congress this December.

Watch this.

(BEGIN VIDEO CLIP)

REP. ZOE LOFGREN (D), CALIFORNIA JUDICIARY COMMITTEE: It`s my understanding that under the order appointing him Mr. Mueller has the authority to investigate matters that arose or may arise directly from the investigation, which would include crimes uncovered while he is investigating the main mission. So, for example, if he is looking at the Russia investigation and he finds out that the person he`s looking at committed a bank robbery, he isn`t required to ignore a bank robbery. Would that be a fair assessment of his responsibilities?

ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL: It`s a fair assessment --

UNIDENTIFIED MALE: The time of the gentleman has expired. Mr. Rosenstein may answer the question.

ROSENSTEIN: Also, it`s important to recognize because it`s a special counsel, not an independent counsel, those issues are worked out with the department. So in the event that he came across evidence that was not appropriate for him to prosecute, he could refer it to other components of the department. So, we wouldn`t allow something like that to slip through the cracks but we would make sure to route it to the appropriate prosecutor.

(END VIDEO CLIP)

MADDOW: We wouldn`t allow something like that to slip through the cracks. We would route it to the appropriate prosecutor.

Well, in this instance, Rosenstein apparently decided that the appropriate prosecutor was the federal prosecutor in Manhattan. And that`s not only an interesting and important decision for Rod Rosenstein to have made. It also means that Rosenstein found himself in the spotlight when the president reacted to this news tonight.

(BEGIN VIDEO CLIP)

TRUMP: Why don`t I just fire Mueller? Well, I think it`s a disgrace what`s going on. We`ll see what happens. But I think it`s really a sad situation when you look at what happened.

Many people have said you should fire him. Again, they found nothing and in finding nothing, that`s a big statement. If you know the person who`s in charge of the investigation, you know all about that, Deputy Rosenstein, Rod Rosenstein. He wrote the letter, very critical, of Comey.

One of the things I said I fired Comey, well, I turned out to do the right thing because you look at all of the things that he`s done and the lies, and you look at what`s gone on at the FBI, with the insurance policy and all of the things that happened, it turned out I did the right thing.

But he signed -- as you know, he also signed the FISA warrant. So, Rod Rosenstein, who`s in charge of this, signed a FISA warrant and he also -- he also signed a letter that was essentially saying to fire James Comey. And he was right about that. He was absolutely right.

So, we`ll see what happens. I think it`s disgraceful, and so does a lot of other people. This is a pure and simple witch hunt.

Thank you very much. Thank you. Please.

REPORTER: Will Rod Rosenstein keep his job?

TRUMP: Thank you.

REPORTER: Will Rod Rosenstein keep his job?

TRUMP: Thank you all very much.

(END VIDEO CLIP)

MADDOW: You can hear the reporters asking very clearly at the end there, will Rod Rosenstein keep his job? Thank you very much. No answer from the president.

Whatever the answer is to that question is now suddenly very, very important. And we`ve got more on that ahead.

Stay with us.

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(BEGIN VIDEO CLIP)

REPORTER: Will Rod Rosenstein keep his job?

TRUMP: Thank you.

REPORTER: Will Rod Rosenstein keep his job?

TRUMP: Thank you all very much.

(END VIDEO CLIP)

MADDOW: We weren`t asking to be thanked. We were asking will Rod Rosenstein keep his -- that question directed at the president today after Deputy Attorney General Rod Rosenstein apparently signed off on sending this investigation to federal prosecutors in New York who have now raided the office and the hotel room of the president`s personal lawyer.

No answer from the president tonight on the fate of Rod Rosenstein, but clearly, that`s an important next thing for our country to understand.

Joining us now is Barbara McQuade, former U.S. attorney for the great state of Michigan.

Barbara, thank you for being here in person.

BARBARA MCQUADE, FORMER U.S. ATTORNEY: Oh, my pleasure. Thanks.

MADDOW: Let me ask first about this happening in the first place. Is this a -- is this a weird thing? We`ve got a determination by Mueller apparently under advice from Rosenstein, that this isn`t within the special counsel`s remit and instead should be handled by the special prosecutor. Is that an unusual process?

MCQUADE: Well, the whole special counsel situation is a little unusual, a little different from what we normally see in the way cases are held. But because of the mandate that Robert Mueller`s to come back to Rod Rosenstein anytime he wants to expand the scope of his investigation, he probably thought it was necessary to have a conversation with him. I don`t know whether Robert Mueller advocated to keep this piece of the case or advocated that it should go elsewhere, but nonetheless Robert Mueller said this is a valid investigation that we should pursue, but I see it as beyond the scope of your job, so we`ll farm it out to the special U.S. attorney`s office for the southern district of New York.

MADDOW: The president`s remarks and the way he talked about Rosenstein are putting a hot spotlight on Rosenstein. Is there anything about what we understand to be his behavior in this matter which would suggest that he acted either inappropriately or even controversially?

MCQUADE: No, absolutely not. I mean, he`s doing his job.

From time to time U.S. attorney`s office will compete for the same case. They`ll have, you know, various stakes in the case. Maybe, it`s a company that is located in Michigan but trades on the stock exchange in New York. And so, each of those offices has an interest in pursuing those cases.

In those instances, it is the deputy attorney general or even the attorney general himself who will make a decision that I think the equities of the case make it more appropriate to be handled in one case, in one jurisdiction versus another. So, I don`t think there`s anything other than Rod Rosenstein doing his job today and making this decision.

MADDOW: When you`re serving as U.S. attorney, as you did in Michigan, you`re making a decision as to how to secure and obtain evidence and information you that think is relevant to a case, how do you decide whether you`re going to get it by search warrant versus subpoena versus just requesting it?

Cohen`s lawyer complaining today this was unnecessary, is the word he used, saying you didn`t need to come raid this guy`s office and hotel room and home, you could have just asked, we`re happy to cooperate.

MCQUADE: Well, if you look at the language of the U.S. attorney`s manual, which governs the process in these cases, and the actual practices, you go with the least intrusive method for obtaining what you need in an investigation. And so, you`ll sit down and have a conversation. Do we think we can get this just by asking them or sending them a letter? And if so, that`s what you do because it takes fewer resources and you can get what you need.

Do we need to do something a little more severe by using a grand jury subpoena which has a little more teeth in it in case they don`t comply and we can charge them with obstruction of justice? Or if you don`t trust them to give everything that they have, if you think they will hold something back, it`s then and only then that you would use a search warrant. And for an attorney`s office, it`s a very high standard you have to get approval from the Department of Justice to explain that we`ve gone through this process and we think it`s necessary to get what we need in this case.

MADDOW: And when they elect to go with a same warrant, does that usually mean there`s some sort of time sensitivity on, this that they think they have to act with the element of surprise?

MCQUADE: It could be. There`s usually the element of surprise and there could be some concern about destruction of evidence. It could just be we`re not convinced that if we ask for this stuff, that the person`s going to turn it over for us. But when you get a search warrant, you get ten days to execute it.

MADDOW: I`m going to stalk with Michael Beschloss, presidential historian, in just a minute in part about the risk of Rod Rosenstein being targeted by the president. The president talking about him by name in a sort of rambling way. The president also talking about Mueller by name in a way he didn`t use to.

What`s your feeling, what`s your sense about the risk, of what it would mean for the country or whether it would mean anything significant for the country if the president took that kind of action?

MCQUADE: I think it would be very damaging to our institutions of government. Rod Rosenstein has shown himself I think to be a career professional who`s called -- made these calls as he`s seen them. And to be fired simply for authorizing a lawful search of someone who happens to be the president`s private attorney seems like such a nakedly political decision that I think it would be politically disastrous for the president. And so, I hope it doesn`t happen but I think if it did it would have serious ramifications for the rule of law.

MADDOW: Political disaster no longer -- no longer is an outcome that predetermines people`s actions. Barbara McQuade, former U.S. attorney for Michigan -- it`s really good to have you here.

MCQUADE: Thanks, Rachel.

MADDOW: Thanks for coming in.

All right. As I mentioned, Michael Beschloss still ahead tonight. Lots more still to get to. Stay with us.

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MADDOW: Michael Cohen is President Trump`s personal lawyer. He doesn`t work in the White House. He did not work on the campaign. He doesn`t even work for the Trump Organization anymore.

And yet, the president himself tonight had a bit of an on camera meltdown on Cohen`s behalf, describing it as disgraceful that Cohen`s office and hotel room were raided today by the FBI.

Have we ever seen a president make such a public pronouncement to shield a personal connection? In this case, the president attacking the FBI and the Justice Department saying their actions in this case were a disgrace.

Joining us now is NBC news presidential historian Michael Beschloss.

Mr. Beschloss, thank you so much for being with us tonight. I`m sure when you saw the news, you knew I was going to call.

MICHAEL BESCHLOSS, NBC NEWS PRESIDENTIAL HISTORIAN: I thought that might somehow happen.

MADDOW: Let me just ask the question as I set it up there.

Mr. Cohen has an unusual relationship with the president. He is a personal attorney. He does not represent the White House. He doesn`t work for the administration. He doesn`t work for the Trump organization anymore.

But the president say -- tonight going out, way out on a limb, attacking the Justice Department and the FBI for what he says was a disgraceful move on their part --

BESCHLOSS: Right.

MADDOW: -- to raid Mr. Cohen`s office.

BESCHLOSS: He did. And you sort of wonder what he is worried about that Michael Cohen knows or may have records of.

And, you know, what we saw tonight, Rachel, that is something we have not seen from a president. You know, to go back to Richard Nixon during Watergate, he was angry at Archibald Cox, but he didn`t in public sort of run against Cox and say this is a bad man. He is surrounded by Democrats. In fact, in private, Nixon was irritated by the fact that Cox had worked for John F. Kennedy and had Democrats on his staff, but he didn`t try to do the thing that the president did today.

It didn`t really sound like a president. It sounded to me as I was listening more like if a Martian came and heard Donald Trump speaking, it sounded more like some angry political boss in some city machine going out against the prosecutor.

MADDOW: We just heard from Barbara McQuade, former U.S. attorney from Michigan. She is a very even-keeled non-hyperbolic speaker. I asked for her reaction to the prospect that the president might take action against Rosenstein, against Sessions, against Mueller, some other thing he might try to do in order to shut this down.

She described that as potentially disastrous for the rule of law, and also something that would have politically disastrous consequences. I don`t know how to assess what a political disaster is anymore.

BESCHLOSS: Right.

MADDOW: But I guess -- I guess I`d ask you to put that in historical context, what you think the response would be.

BESCHLOSS: Well --

MADDOW: Yes.

BESCHLOSS: I did sound like an echo of the Saturday Night Massacre in which Richard Nixon said to Archibald Cox, stop coming after me and asking for my tapes or else I might fire you, and he did.

In Donald Trump`s case, I think he`s going Nixon, you know, much further, although did you hear him use that phrase "witch-hunt" tonight? That was totally out of the Nixon lexicon, that was a term that Nixon used.

But what Donald Trump was suggesting tonight I think he was suggesting that Rosenstein as a demon or a potential demon, the same thing with Mueller. I think he`s setting out the predicate, sadly, for a huge war in which he at least has the possibility of firing Mueller and then trying to wage a political war.

He is living in a different environment than Richard Nixon did. And it might be easier for him to do that. So, there might be a political crisis here. But we can`t predict.

MADDOW: Michael Beschloss, NBC News presidential historian -- leaving us out on the limb at this point.

BESCHLOSS: Sorry about that.

MADDOW: That`s where we all are. That`s where we are. Thanks, Michael. Appreciate it.

BESCHLOSS: Thank you, Rachel. Be well. We`ll talk soon.

MADDOW: We`ll be right back.

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MADDOW: EPA administrator Scott Pruitt has stepped in a hornet`s nest of scandals recently. Two of the scandals involving him got kicked up a notch tonight. Scott Pruitt has claimed he had no idea his agency used an obscure legal provision to give two of his top staffers gigantic raises after the White House refused to approve them. But "The Atlantic" magazine reports today that internal e-mails suggest Pruitt very much did know about at least one of those raises.

According to "The Atlantic", one of the staffers who got one of these giant raises wrote to HR in an attempt to confirm that her pay raise of over $56,000 was being processed. The staffer definitively stated that Scott Pruitt approves and was supportive of her getting a raise. So, Pruitt said he had no idea about those raises. Internal e-mails say oh, yes he did. That will be interesting to follow up.

Then there is Samantha Dravis, who`s one of Scott Pruitt`s closest aides, one of his senior staffers. She quit last week shortly after Senator Tom Carper of Delaware sent this letter to the EPA, asking the inspector general there to investigate reports that Ms. Dravis had not shown up for work for three months, from November 2017 to January 2018, all while getting paid the full time.

This is during the same period when Scott Pruitt took Dravis and six other staffers on that amazing trip to Morocco by way of Paris last December. So, the allegation is that she didn`t make to it work for three months, but she did make to it Morocco and Paris.

Tonight, Senator Carper got an answer from the EPA, from the inspector general`s office. Quote: After analyzing your request, we have decided to conduct the requested review. The issues raised in your letter are within the authority of the OIG to review, and we will do so. We will inform you and your staff when we complete the review.

And then I`ll inform you as soon as I hear about it. Watch this space.

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

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

Good evening, Lawrence.

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