Michael Cohen raid and first day in court. TRANSCRIPT: 04/16/2018. The Rachel Maddow Show

Guests: Mimi Rocah, Peter Stone

Show: THE RACHEL MADDOW SHOW Date: April 16, 2018 Guest: Mimi Rocah, Peter Stone

RACHEL MADDOW, MSNBC HOST: You`re getting me all stressed out.

CHRIS HAYES, MSNBC HOST, "ALL IN": Don`t be stressed, dude. You got it. It`s going to be awesome.

MADDOW: Have you ever known me in all the time we`ve worked together, have you ever known me to not be stressed out?

HAYES: I have not known you to not be stressed out, particularly about big interviews, which you tend to really throw your back into.

MADDOW: Thanks, my friend.

HAYES: Good luck.

MADDOW: Yes, cheers.

Oh, great. That`s a great way to start, isn`t it? Now, I`ve been stressing about that interview already.

Anyway, happy Monday. Thanks for joining us this hour. Happy to have you here.

I will say, this is going to be sort of an interesting show tonight. There are a number of things that happened in important national news today that frankly I`m not quite sure how to talk about them. But we`re going to do it. This is a weird time in the news. There`s no time to shy away from the weirdness. You`ve just got to dive right in.

Let`s start with a subpoena. Let`s say you get subpoenaed by prosecutors. That subpoena directs you to hand over documents and materials. Now, you can fight that subpoena. You can argue over it in court.

But ultimately, the point of a subpoena is that you`re being asked, you`re being directed to hand stuff over that is responsive to the prosecutor`s demands.

Now, let`s say prosecutors have reason to believe that you can`t be trusted to do that. They do want documents and materials from you because of some investigation that you`re relevant to. They intend to get those documents and materials, but they don`t trust you. They have reason not to trust you.

They think if they issue you a subpoena, if they give you a demand to hand this stuff over, they think -- they have good reason to believe that you might instead of handing them over, you might destroy those things. Or you might hide them or you might otherwise mess up the evidence that prosecutors are after.

If that`s the case, if prosecutors have reason t to believe that you cannot be trusted to respond to a subpoena, they can kick it up a notch. They can go to a judge and ask a judge to approve a search warrant instead. With a search warrant, prosecutors are no longer asking you for anything. They`re going into your home, your office, wherever, and they are taking what the warrant says they can take.

Between a subpoena and a search warrant, a subpoena is definitely less intrusive. You are asked to hand stuff over, told to hand stuff over. With a search warrant, they`re not asking, they`re not telling, they are going in and taking it themselves.

Well, last week, prosecutors in the Southern District of New York, federal prosecutors, decided that they wanted to obtain materials from the president`s personal attorney, from Michael Cohen, not by asking Cohen for those materials or telling Cohen to hand those materials over. They decided they were going to get those materials by taking them themselves. And they explained why to the court.

Quote: Given that the crimes being investigated involve acts of concealment by Michael Cohen, the U.S. attorney`s office in the Southern District of New York sought and obtained a search warrant rather than using a subpoena so that it would not have to rely on Cohen to accurately make such a production.

So, this is the federal prosecutor`s office in New York City saying that Michael Cohen, former Trump Organization executive and sometimes personal attorney to Donald Trump maybe, they`re saying he`s under criminal investigation and the kinds of crimes for which he is under investigation justify getting a search warrant instead of just sending him a subpoena, basically because they don`t trust him to respond to a subpoena. They say the crimes they`re investigating him for involved acts of concealment.

What are those acts of concealment? What are those crimes they`re investigating him for? We don`t know. Those are the parts that are redacted in the court filings. And it`s always the most intriguing stuff that`s redacted.

Quote: on April 9th, 2018, agents from the New York field office of the FBI executed search warrants for Michael Cohen`s residence, hotel room, office, safety deposit box, and electronic devices. The searches were authorized by a federal magistrate judge who had found probable cause to believe that the premises and devices searched contained evidence, fruits and instrumentalities of conduct for which Cohen is under criminal investigation, namely, the big black box, redacted, redacted, redacted.

Quote: each warrant was supported by a detailed affidavit and authorized by a federal magistrate judge who found probable cause to believe that the subject premises and devices contained evidence of" redacted, redacted, redacted.

The U.S. attorney`s office in the southern district of New York had good cause to execute search warrants at Cohen`s premises and seized certain electronic devices in lieu of less intrusive means.

Why did they have that good cause to go after the stuff with the search warrant instead of less intrusive means? Redacted, redacted, redacted.

Quote: Accordingly, the nature of the investigation and the nature of the offenses weighed heavily in favor of the decision to execute search warrants. Furthermore, in the course of its investigation the U.S. attorney`s office in the southern district of New York has learned that, redacted, redacted, redacted.

As a result, absent a search warrant, these records could have been deleted without record.

So, they have very specific reasons, they say, why they had to go after Michael Cohen with a search warrant. Why they used a search warrant, they didn`t just subpoena Michael Cohen and tell him to hand this stuff over. They have very specific reasons why they had to go that much more aggressive route. And we have no idea what those specific reasons are, because it`s all redacted.

But, you know, the judge in this case knows what those reasons are. And these filings are not redacted for her. And in fact, the whole different judge who issued the search warrants in the first place, that judge, that federal magistrate judge also heard prosecutors` evidence for why Michael Cohen in their estimation could not be trusted to hand over documents and materials on his own, but had to instead go this more aggressive route, go in and take stuff themselves without warning and without getting his permission.

We do not know what those details are. We don`t know what crimes he is suspected of. We don`t know what they found in their initial investigation which led them to believe that had they not gone in and taken those records, he might have destroyed them. They have got evidence that they gave to these judges, but we can`t see it.

So, there is this riveting spectacle and scandal here, right? We the public can see the fight happening. And in fact, on a day like today, we can see that it was becoming a desperate fight, including by the president.

But we can`t necessarily tell what is leading to the desperation. We can`t tell what`s in those black boxes. That appears to be freaking everybody out so much.

"The New York Times" over the last few days has described this fight over Michael Cohen and the FBI raiding his office. "The New York Times" is describing this based on multiple sources as something that the president perceives to be a more imminent threat to him than the special counsel investigation led by Robert Mueller. Imagine knowing what we know about the Robert Mueller investigation and then deciding that there`s a legal threat that`s worse than that.

This case has led to strange revelations already, including the fact that the president`s lawyer, Michael Cohen, now says he facilitated a gigantic $1.6 million payoff to the mistress of a Republican donor whose name has already come up nine ways to Sunday in conjunction with the Mueller investigation and who just resigned as deputy finance chair of the National Republican Party. Incidentally, Michael Cohen himself is still a deputy finance chair of the National Republican Party, even though we now know that he`s under federal criminal investigation and getting raided by the FBI.

At some point, will the RNC see it as a problem, that one of their deputy national finance chairmen paid a -- arranged a $1.6 million hush money payment for the mistress of another one of their national finance co-chairs and the one with the mistress resigned, but the one who arranged the payment and is under federal criminal investigation, he`s still on the RNC? At some point, the National Republican Party should probably have to at least explain that if not explain it away.

We also learned today that Michael Cohen admits to having only three clients in his legal practice over the past year. He admits to having President Trump as a client. Also, the Republican Party finance co-chair guy with the mistress, Elliott Broidy.

And the third client of his one-man law firm, he tried today to keep secret in court, saying his third client had directed him to appeal any effort to make his name public. But then in court today we got the name of Cohen`s third client made public. And honestly, don`t even ask me to tell you what it means, that it`s Sean Hannity. But it`s Sean Hannity from the Fox News Channel.

Mr. Hannity has apparently been covering Michael Cohen`s role in this story, in this scandal for months, including the FBI raid on Michael Cohen last week, without ever disclosing that Michael Cohen is his lawyer. Again, don`t even ask me. I have no idea.

This is like every day you get up, take a shower, get dressed, you go out to the driveway to start the car. Every day`s the same, you do this every single day of your life except today you got in the car, you put the key into the -- to start the engine -- you put the key into the dashboard, you went to turn it to start the engine like you do every day, and today, this time the engine didn`t start and instead terrifying circus music started playing and the hood flew up and clowns and monkeys and elephants flew out instead. Like what? It`s who? You know, sure, go ahead, make sense of that, why don`t you?

So, the news has gone weird. When the going gets weird, the weird turn pro. But the law is still pretty orderly, and I have to tell you, we just got the transcript of what happened in this insane court hearing today.

There`s no cameras. There`s no recordings of what happens in federal court. But we`ve got the transcript here. And in a way, it`s sort of -- I don`t know if it`s comforting.

It is nutty that the personal lawyer of the president of the United States is under criminal investigation. And it`s nutty that criminal investigation or at least the effort by federal prosecutors to obtain documentation related to that investigation reportedly includes the porn star who the president`s lawyer says he paid off right before the election to keep her from talking about her alleged sexual relationship with the president and both Stormy Daniels and Michael Cohen were there in court today in person at the same time.

And then the prosecutor`s case for why it was OK for them to have raided this lawyer for the president it is the prosecutor`s contention that, A, they really need to raid the president`s lawyer and B, honestly, he`s not doing much lawyering anyway. And part of the way that all gets spelled out in correlate was with the president`s lawyer revealing his previously secret dealings with the over-the-top pro-Trump cable news host and the deputy finance chairman of the RNC and his mistress and her abortion. It`s all nuts. It`s nuts.

But I will tell you it is an odd little bit of comfort that in court, even in a case this crazy, it at least all gets sorted out in a sort of orderly fashion.

Quote, Judge Kimba Wood: With respect to the client`s name being withheld, that is not in accord with the law in this circuit. If you have a reason for that client`s name to be treated under seal, you`ll tell me. Yes.

Then Steve Ryan stands up, who`s representing Michael Cohen: Your Honor, Steve Ryan. With respect to that client, the client is a publicly prominent individual. The representation was legal in analysis. With regard to naming that person now, the concern was that even if we put it in a sealed proceeding right now, that it might be released. If we could count on that not being released to the public, at this point, no one would want to be associated with the fact that they were a client in this way because of the notoriety around this search warrant.

We`re protecting the identity of that person but not from the court and not from an in-camera review by the court. I can give you that name right now in a sealed envelope and provide it to the court. The client was contacted over the weekend and asked that we not disclose their name, and further that we take an appeal if the court was going to make that name public.

And the judge says: What`s the legal ground for withholding the client`s name?

Steve Ryan says: the legal ground, your honor, is first of all Mr. Cohen`s duty to the client under the bar codes that we`ve presented the court with.

The judge says: Well, remember that what we deal with here is federal law and Second Circuit law.

Mr. Cohen`s lawyer says: No, no, understood. I`m talking about the bar rules, meaning legal ethics rules that govern Mr. Cohen`s conduct in terms of releasing the name.

The judge said: Well, if I order that it be released, he has no problem with respect to his own ethics.

Cohen`s lawyer says, quote: If we give it to you and I have some assurance that we`re not violating that client`s right not to be disclosed publicly today, then I can do this. I can write it down and put it in an envelope right now.

The judge says: All right. If you hand the name up, I`ll maintain it under seal. But it seems to me the government, perhaps just Mr. McKay, the leader prosecutor, should know who it is so he can identify whether that person had any responsive documents.

And now in the transcript, new character. Mr. Balin. Who are you?

Mr. Balin: Your Honor, I apologize for interrupting. I`m a lawyer representing the press. ABC, "The New York Times", "Associated Press", CNN, and "Newsday".

The judge says, quote: I think you`d better come to the podium.

Mr. Balin says, quote: I think I`d better too, your honor. I`ve sat and listened until we got to the point where I realized there`s a public access issue here. Your honor, I`m Robert Balin from Davis Wright Tremaine. Thank you very much.

He says: There is no credible claim that this client`s mere identity is attorney-client privileged information. Michael Cohen makes the argument that it would be embarrassing to be associated with what he terms a raid at a house, in a home. Your Honor, I hardly need to remind the court of the intense public interest in the issues that are currently before this court. I look around and I see that every other seat is occupied by a member of the press.

Ultimately, however your honor rules -- excuse me. Ultimately, however your honor rules, the public is going to want to know the basis for your honor`s ruling. That`s the very nature of the First Amendment access right, so that we the people and the press can monitor our institutions and have a rational basis for agreeing or disagreeing. And I hesitate to add, your honor, that I suspect, no matter how you rule, those in the public will agree or disagree. That`s what we do in society.

Finally, your honor, I would make one last point. It was Justice Burger who I think put it well. People in our open society do not demand infallibility from their institutions, but it is difficult for them to accept what they are prohibited from observing. That was in Winston newspapers v. Virginia many years ago.

Your honor, I see no basis for denying public access. If your honor is going to order disclosure of this name, I see no basis for denying public access to that name.

Drama. So we get this new character in the middle of -- the guy just pops up, hey, your honor, can I be heard here?

This is the lawyer for news organizations coming in and pressing this point. The judge at this point has basically agreed that she`s going to take the name in a sealed envelope. The lawyer for the press comes in and says, if you`re going to take that name, there`s no good argument, there`s no good legal precedent for keeping that name from the public. The secret name of Michael Cohen`s secret third client in his legal business, if that`s going to be disclosed to the court, it should be disclosed to the people.

And they go on in the transcript, they argue about it for a few more pages at that point, but ultimately, the judge makes the call right there in front of everybody in the courtroom today, which leads to everybody in the courtroom gasping.

Quote, the court, said the judge, quote: I just don`t understand the argument that just because this undisclosed client consulted Michael Cohen, that that is somehow embarrassing or an invasion of privacy. That`s not enough under case law. And I don`t understand it factually. I understand that the client doesn`t want his name out there. But that`s not enough under the law.

Mr. Harrison arguing for Mr. Cohen: I understand, your honor. We understand Mr. Cohen and frankly derivatively our ethical obligations to be as we laid them out on our letter of 10:00 a.m. But if the court disagrees and rules against us, we`ll do whatever the court directs us to do.

And then the judge says, quote: I`m directing you to disclose the name now. Steve Ryan, representing Michael Cohen, stands up and says: do you want me to stand and say it or should I give you the piece of paper that you told me to write? The judge says: whatever you`re most comfortable with -- whereupon Steve Ryan, representing Michael Cohen says: the client`s name that`s involved is Sean Hannity. And the judge says: thank you.

NBC reporter Tom Winters report from inside the courtroom at that point. I`ll just read you what he -- he sent us like a dispatch from the court.

Quote: When Steve Ryan, attorney for Michael Cohen, disclosed the name of the mysterious third client, Sean Hannity, those gathered in the courtroom gasped. The mouths of reporters dropped open, some struggled not to laugh.

I still am struggling not to laugh. This has been a very weird day in the news. One of the anchors at the major pro-Trump news network has had an undisclosed relationship with the president`s lawyer all this time while Fox has not told that to its audience and while Mr. Hannity and Mr. Cohen have apparently spent considerable effort trying to keep that relationship secret. What? That`s just lurid.

But then there`s also the matter of this ongoing legal proceeding which does appear to be freaking the president out.

Here`s my questions: Is there good reason for the president to be freaked out, for the president to be more concerned about this legal matter involving Michael Cohen than he is about the Mueller investigation? I mean, the president did succeed last week in finally hiring a new lawyer. But he hired that new lawyer for this Michael Cohen case, not for the Russia investigation. So, that`s one question. Is the president right to be as alarmed by this case as it seems like he is?

Second question: now that prosecutors got all this material from Michael Cohen with a search warrant, how much does it matter if they now have to show that material to the president and/or Michael Cohen? That`s what the bulk of today`s fighting was about. Now that they`ve got all that material seized by search warrant, how important is it if it goes to the president and Michael Cohen in addition to prosecutors being able to review it themselves?

And how important is it to this case and to the president`s potential legal jeopardy here if prosecutors are right and Michael Cohen may have a law degree but he isn`t really doing much lawyering these days? How crucial is that to how much trouble the president might be in here? All answerable questions, it turns out.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: In federal court in New York today, lawyers for the president and for his own long-time personal lawyer Michael Cohen argued before a federal judge that prosecutors shouldn`t be allowed to see documents and recordings that the FBI seized last week from Cohen`s office, home, hotel room and safe deposit box. Federal prosecutors in the southern district of New York are reportedly looking into Cohen`s business dealings and finances potentially related to bank fraud, wire fraud, maybe even violations of campaign finance laws.

And after that search warrant was executed and Cohen`s premises were raided, attorneys for Michael Cohen and for president Trump argued in court today that they should be able to review the material that was seized in the raid before federal prosecutors get a look at it because they said they need to make sure that they can protect any materials that should be kept confidential because of attorney-client privilege.

The judge in this case today in this remarkable hearing, Judge Kimba Wood, she denied their request for a temporary restraining order but she did leave open the possibility at the end of the day today that she`s going to appoint a new person, a special master, to look at all of the seized documents to see if in fact any of them should be kept away from prosecutors. That sounds like the sort of thing I`ve heard of before. I don`t know how normal or abnormal that is. And I don`t know how to think about whether or not the president should be treated like a normal party to a lawsuit like this or whether he should be seen as somebody treated differently because he`s the president.

Joining us now is a former prosecutor with the U.S. attorney`s office for the Southern District of New York, Mimi Rocah.

Ms. Rocah, thank you very much for being here.

MIMI ROCAH, FORMER ASSISTANT U.S. ATTORNEY, SOUTHERN DISTRICT OF NY: Thanks for having me.

MADDOW: A special master being appointed to look at stuff, to see whether or not prosecutors can ultimately look at it themselves, I`ve heard the term special master before, so I know this is not something they`re inventing for this process. How unusual would it be in this case?

ROCAH: It is unusual, but not unprecedented. I think the case that was spoken about a lot today in court and maybe people have read about it in the newspaper a little bit, is the Lynn Stewart case. That was a case where there was a special master appointed but it was a very different case and the government today spent a lot of time distinguishing in court why the Lynn Stewart case is different, because in that case, not only in that case was the lawyer being criminally prosecuted but she had a lot of real criminal clients which Mr. Cohen doesn`t have, who were criminal defendants in cases before -- pending in the Southern District of New York. So, there was a lot of potential for real attorney-client privilege issues to arise.

And so, I`m summarizing it, but there were a lot of valid reasons to have a special master in that, to review all the materials in the first instance. That`s not the case here. And, you know, I think that the government made that case, and it seems like the judge has agreed with that in large part because she seems to be denying the request in the first instance for the defense to review the materials.

She has not said no to a special master although my sense is that she`s looking at it in kind of a combination, like she`s not going to have a special master in the way it was in the Lynn Stewart case where the special master reviews everything in the first instance, but more she`s going to let the party start doing the review, the filter team and the defense, kind of simultaneously on a rolling basis. It seems like she said the government has to turn over the materials that they`ve taken to the defense so they can start reviewing them and they can start making their claims, if you will, or motions is usually the way it`s done.

But here, they would sort of -- this body of documents is privileged. And then maybe go to a special master to say, OK, we have a dispute over these documents, these set of --

MADDOW: I see. So, as a neutral party at that point the special master could be not brought in when there`s a point of contention.

ROCAH: Correct.

MADDOW: I see.

ROCAH: And judges always want parties to try to work things out as much as they can between or amongst themselves. Doesn`t seem like there`s a lot of possibility of that here, but maybe, you know, by having the parties starting to do that on their own and then bringing the really disputed ones to the special master and there will be some where the special master could say this is easy, not privileged. And there might be somewhere it`s a closer call and then maybe Judge Wood is the one to make the call on that.

MADDOW: So it does sound a little bit to a non-lawyer, it does sound a little like appointing a mini judge whereas this stuff could maybe just be handled with a judge.

ROCAH: That is a great analogy.

MADDOW: And the other way in which we`ve got an interesting overlap between like real life and legal life here is that there is all of this sort of salacious and occasionally embarrassing detail about Michael Cohen not being much of a lawyer, about him not having very many clients. We have had very unusual strange disclosure today that one of his three clients is a cable news host who has been covering --

ROCAH: I heard that.

MADDOW: It was an unusual moment. The other two clients he admits to are the president and this Republican donor who he says he handled mistress hush money payment thing for. So, we`re getting all this detail about Michael Cohen`s legal practice. And the reason we are getting it is because it seems to me prosecutors are trying to say not much of a lawyer.

So, when we raid this guy`s stuff, we`re not going to get a lot of legal documents.

ROCAH: Exactly.

MADDOW: So, I feel like the real world impact of that is a lot of embarrassment to a lot of people but the legal reason for it is basically because prosecutors want to be able to say, don`t treat this guy like a lawyer, we should be able to look at all this stuff.

ROCAH: Yes, they`re basically trying to put -- you know, show the sham, if you will. They`re saying, judge, they`re -- he`s trying to use the fact that the main target here is a lawyer as a shield and that`s a phrase that`s often used in law and in courts. You can`t use it as a shield.

MADDOW: Legitimate attorney-client privilege is a narrow thing. Just having a lawyer in the room doesn`t mean you can commit a crime with nothing being discoverable.

ROCAH: And this comes up a lot, I hate to say it, in organized crime cases. That is something people are talking about. But it does come up a lot because people in organized crime families do tend to try to shield themselves from, you know, scrutiny of investigators by having a lawyer in the room. And they really do seem to think that just having the lawyer in the room or having a lawyer pass a message or something like that will protect them. And it doesn`t because the attorney-client privilege is usually important and prosecutors and judges take it extremely seriously but it is narrow.

As you say, you have to have a real attorney-client confidential relationship where I`m seeking legal advice. It does not seem -- and I`m sure it`s not that it`s never happened. But it doesn`t seem like Mr. Cohen is someone that you go to when, you know, you have a real legal tough problem that you want an answer to. It just doesn`t seem like it.

And beyond seeming, they`re really showing that --

MADDOW: Yes.

ROCAH: -- in the nature of the few clients that he has, the type of representation matters he`s been involved in, which is not legal representation, but more being this fixer and almost a businessman really. And, you know, just because you have a law degree, if you`re acting like a businessman, though, it doesn`t -- it doesn`t shield you.

MADDOW: Then the law`s going to treat you like a businessman.

ROCAH: Exactly.

MADDOW: Mimi Rocah, former prosecutor with the U.S. attorney`s office in the Southern District of New York, which now has quite a spotlight -- thank you for helping us through this. Much appreciated.

ROCAH: Thank you.

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

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

AD ANNOUNCER: Trump wants us to think he`s Mr. Tell-It-Like-It-Is. But he has a record. And it`s very liberal. He`s really just playing us for chumps.

Trump, just another politician.

(END VIDEO CLIP)

MADDOW: The conservative Never Trump movement spent millions of dollars on ads like that trying to avert a Trump win during the presidential contest. One of the people who was at the center of that Never Trump campaign was a Republican pollster and political strategist named John Lerner.

Despite his Never Trump history, though, John Lerner ended up getting a job in the Trump administration. Apparently, you can see him here at a White House briefing on Thursday. He is seated behind U.N. Ambassador Nikki Haley over there at the Trump end of the table.

John Lerner as a pollster helps Nikki Haley get elected governor in South Carolina back in 2010. Now that Nikki Haley has moved to the U.N. where she`s U.N. ambassador, he has gone to the U.N. with her. He`s her deputy in that job.

The same day as that picture was taken in the Situation Room, we learned that John Lerner was also up for a new job. He was up for a second job that he was going to add on to his old one.

Quote: John Lerner, deputy to Nikki Haley, will lead Vice President Mike Pence`s foreign policy team and advise him on all national security issues. Significantly, Mr. Lerner will also keep his job working for Nikki Haley, dividing his time between the two principals and coordinating between the two teams. The two officials will have the same key adviser on national security.

The vice president reportedly picked John Lerner for this job, quote, after months of searching.

According to this telling, Vice President Mike Pence spent months searching for a new national security adviser and after this months-long search, he found a new national security adviser who has no national security experience. Who did you consider and reject? But he did find a guy who has done a tremendous job of getting Nikki Haley into positions of power and who did his best to defeat Donald Trump during the 2016 campaign.

The president apparently went bonkers over the news that a pollster involved in the Never Trump campaign would now have a prominent place in the vice president`s office as Vice President Pence`s national security adviser. The Website "Axios" reports a furious President Trump saying, "Why would Mike do that?"

Did not seem to matter that this pollster, Mr. Lerner, had the support of other top officials, including John Bolton, the president`s national security adviser, and Mike Pompeo, who is the ex-CIA chief and is now a nominee to be the next secretary of state. It also apparently did not matter that Mr. Lerner has since vocally backed Mr. Trump`s "America First" agenda.

If you were ever a Never Trump guy, that meant you were the Never Trump guy. Never Trump meant the Never Trump pollster.

Last night, the incoming national security adviser with no experience in national security, the one Vice President Pence spent months searching for, the one he meant to share in a job share with the U.N. ambassador, today that would-be double job holder instead took himself out of contention. Mr. Lerner will not be taking on that gig. The vice president expressed his deep gratitude for Mr. Lerner`s willingness to consider joining the vice president`s team. But he won`t be joining it after all.

"New York Times" says John Lerner will continue working for ambassador Nikki Haley and will just informally advise the Pence team, which, of course, will still make the next White House briefing he attends just this side of awkward. Just saying.

(COMMERCIAL BREAK)

MADDOW: There`s been a lot of time and energy and ink spilled over the last 15 months or so over what the term "collusion" actually means. But the allegations about Michael Cohen that are contained in the Christopher Steele dossier, the allegations that Donald Trump`s personal attorney Michael Cohen met with Russian officials in Prague during the presidential campaign to facilitate payments to Kremlin-controlled hackers who were interfering in the election to help Trump, I don`t care how good you are at linguistic gymnastics. I think we could all agree that that would absolutely be collusion.

If you were trying to come up with a case study to prove to somebody that collusion could be a thing, it`s the kind of thing you would admit. Let`s say the president sent his personal lawyer over to a third country to go meet with Kremlin guys to go pay off the people who were doing the dirty work to help Trump in the election. I mean, that`s what you`d invent in order to explain here`s how collusion might work.

But that allegation about Michael Cohen in the Steele dossier, it remains just an allegation. Along with lots of other things in the dossier that are just still allegations. From the very first day Christopher Steele`s dossier became public, Michael Cohen had a very simple rebuttal to that allegation about him in Prague. And helpfully, he knew a guy who could help him get his rebuttal out there.

Today, we learned that that guy is also one of Michael Cohen`s clients. It would have been good to know that before, but we finally found out today.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS HOST: In the report posted on "BuzzFeed" it claims that Trump`s lawyer, Michael Cohen, met with Kremlin representatives in Prague in August of 2016. One small little itsy-bitsy problem, Michael Cohen has never been to Prague. Ever.

Wait a minute. Am I allowed to look at it? I don`t want to joke about it because it`s serious in your life.

MICHAEL COHEN, TRUMP PERSONAL LAWYER: It`s very serious in my life.

HANNITY: But this is your passport.

COHEN: Yes, it is.

HANNITY: Let`s go back to yesterday. You got called by --

COHEN: Mr. Trump.

HANNITY: And Mr. Trump asked you?

COHEN: Were you ever in Prague?

HANNITY: And your answer was?

COHEN: Never.

HANNITY: In your whole life?

COHEN: I -- no. I`ve never been in Prague.

HANNITY: And he wanted to see your passport.

COHEN: So, he said Michael, I really need to know. I said Mr. Trump, I have never been to Prague. He said to me, OK. I said do you want to see my passport? I live close to the office.

HANNITY: Right.

COHEN: And he said, yes. Do you mind if I see it? I said of course not. You`re the president-elect. I`ll be there in about two minutes.

HANNITY: I don`t mean to laugh, but it`s just -- these people -- I did an opening monologue just in the last segment how journalism is dead. It`s buried.

(END VIDEO CLIP)

HANNITY: Dead. It`s buried.

Do you think that was a billable hour for Michael Cohen? I mean, he has -- he has a meeting with Sean Hannity, right? That`s Sean Hannity meeting with his lawyer on national television without disclosing that the guy he was interviewing was actually his own lawyer. Did somebody bill for that? Journalism is dead.

This is where things have stood for the last 15 months or so on this allegation against Michael Cohen. That`s in the Christopher Steele dossier. I mean, Michael Cohen`s passport, even if we could see the inside of it, it wouldn`t prove one way or another if he had ever been to Prague, but certainly nobody`s been able to disprove his assertion that he`s never been there.

And that`s been a sort of central talking point for calling the entire dossier into question. People who say that the dossier is a bunch of lies, it`s all disproven. There`s very few specific things that anybody says that definitely didn`t happen and it`s in the dossier. But Michael Cohen saying he never went to Prague, that`s kind of the one big factual rebuttal that anybody has come up with about what`s wrong with the Steele dossier.

Well, that definitely didn`t happen. Cohen says he`s never been to Prague. Therefore, the dossier`s in question.

That`s why this story by Peter Stone and Greg Gordon at "McClatchy" has ended up being such a big deal. You might have missed this story when it came out on Friday. It came out right before president Trump announced he was bombing Syria.

The piece says this, quote: the Justice Department special counsel has evidence that Donald Trump`s personal lawyer and confidant Michael Cohen secretly made a late summer trip to Prague during the 2016 presidential campaign according to two sources familiar with the matter. Confirmation of the trip would lend credence to a retired British spy`s report that Cohen strategized there with a powerful Kremlin figure about Russian meddling in the U.S. election.

Investigators have traced evidence that Cohen entered the Czech Republic through Germany, apparently during August or early September 2016, as Steele reported. Cohen would not have needed a passport for such a trip.

This weekend, in a tweet, Mr. Cohen again denied that he has ever been to Prague. But if this central claim that he and his allies have been making for months and months and months about why the whole dossier is a mess, if that central claim is falling apart, you can understand why maybe that raid on Michael Cohen by federal investigators last week might have the president so on edge.

Joining us now is Peter Stone, special correspondent for "McClatchy", one of the reporters who broke this story.

Mr. Stone, I really appreciate your time tonight. Thank you for being here.

PETER STONE, SPECIAL CORRESPONDENT, MCCLATCHY: Thank you. It`s a pleasure.

MADDOW: So your story came out on Friday in what was a more insane than normal news cycle. That was the day -- the night that the president announced the new military action against Syria. I`m talking to you about this on Monday. This story has now been out there for a few days. Michael Cohen has since reiterated his denial that he`s ever been to Prague.

I have to ask if you stand by your reporting and what you make of his denial.

STONE: Well, we do stand by the story. We actually worked on it on and off for a few months and put a lot of time and energy into locating two sources who we trusted who were familiar with the inquiry. And we believe that the story is solid. We noted that this was evidence that the FBI and special counsel had. There were still questions to be answered. And I think the story stands up on that basis.

I don`t think Cohen has explained his whereabouts in this time period that the dossier alludes to. He`s as you say said repeatedly and vehemently that he`s not ever been to Prague. The evidence he`s provided thus far is a six-day period in late August where he claims he was in L.A. with his son from August 23rd to 29th. But he hasn`t provided solid information to investigators, at least as far as we know, that indicated where he was in that broader time period of three or four weeks. I don`t think his claim that it`s -- the trip has been disproven by what he`s shown stands up at all.

MADDOW: Based on your reporting, you said you`ve got a couple of sources who are familiar enough with the investigation to be able to tell you that the FBI and special counsel`s office have evidence of Cohen`s trip to Prague in this specific time period. Are you also able to tell us anything about what is known about Mr. Cohen`s actions there, about his behavior, what he was doing there, who he may have met there, whether anything else that`s described in the dossier might track with the evidence that the FBI now has?

STONE: So far, we don`t have that confirmed. I think it`s a fairly major revelation that we`ve now found out based on a couple of sources that he did indeed go to Prague. We found out how he entered the country without detection, that is, going through Germany to enter the Czech Republic.

It`s unclear whether the other parts of the allegations in the dossier about a meeting with Russians and hackers is fully -- is confirmed. The dossier has a lot of detail about that, rather startling detail, indicating, you know, the origins of some of the hackers. One or more were from Romania supposedly. The Russian who was there allegedly was a quite prominent figure in the Russian legislature. All of that still needs to be verified as far as we know.

MADDOW: Peter Stone, special correspondent for "McClatchy", thank you for helping us understand this reporting. I`ll look forward to the -- I look forward to what you find out next, sir. Thanks very much for being here.

STONE: Thanks very much. Bye-bye.

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

(COMMERCIAL BREAK)

MADDOW: SCIF, S-C-I-F, stands for sensitive compartmented information facility. The White House information room is a SCIF. It`s probably the most famous one.

In order for something to be called a SCIF, it has to meet a ton of technical requirements. The whole point is it`s safe and protected from any attempted surveillance or eavesdropping. So it has to meet strict requirements to make sure that`s the case. Sensitive compartmented information facility, SCIF.

Last year, "The Washington Post" reported that Scott Pruitt installed a private sound booth in his office as EPA administrator. First reports were it cost around $25,000. It actually ended up costing taxpayers about $43,000.

Now, cabinet officials are not allowed to spend tens of thousands to upgrade their offices. By law, they get $5,000 a year to like switch out the curtain and buy a new desk lamp or whatever. So, when "The Washington Post" broke the news about Scott Pruitt installing a $43,000 cone of silence in his office, that was a problem. The way they pushed back against people calling this problem was by saying, OK, yes, maybe we spent money but it was not a new lamp and a new set of curtains.

Their push back was that that $43,000 paid for a SCIF because the EPA administrator needed one in his office to do his job.

(BEGINB VIDEO CLIP)

REP. DIANA DEGETTE (D), COLORADO: The press account said you installed a $25,000 soundproof booth in your office at EPA headquarters. Is that -- is that true?

SCOTT PRUITT, EPA ADMINISTRATOR: It`s a secure phone line.

DEGETTE: So, it`s a SCIF, what we call a sensitive compartmental information facility.

PRUITT: Yes.

DEGETTE: Did you do that because part of the EPA`s mission involves classified information?

PRUITT: Yes, ma`am.

DEGETTE: OK.

PRUITT: Part of that, but also communications at the White House. There`s secure conversations that need to take place at times --

DEGETTE: So, you believe it`s appropriate to use the SCIF to talk to the White House.

PRUIT: I believe that there are secure conversations that need to take place that I didn`t have access to.

(END VIDEO CLIP)

MADDOW: OK, so it`s a SCIF. Yes, it`s a SCIF.

Now, the EPA already has a SCIF at their headquarters before Scott Pruitt ever got there, they had one. It`s still there. As far as we know, it`s not broken. But Pruitt argued that separate and apart from the SCIF that EPA already had, he needed his own. He needed to spend over $43,000 of taxpayer money so he could have his own, in his office, next to his desk for EPA security emergencies.

Well, today, the Government Accountability Office put out a report about Scott Pruitt`s magic sound booth. They determined that the EPA broke the law when they installed that $43,000 bat cave because it did go over that $5,000 spending cap that he had for changing stuff up in his office.

But then they also arrived at a much more difficult to explain conclusion. That super pricy state-of-the-art SCIF that Scott Pruitt says he needs to do his job to protect his EPA secrets, it might not actually even be a SCIF. Quote: The EPA did not state whether the booth has been certified as a SCIF.

Ever since the EPA started defending this expensive sound booth to the taxpayers, the sound booth you and I bought for Scott Pruitt, nobody at the EPA has been able to explain what makes this thing a SCIF, nobody has been able to show any proof that it even qualifies as a secure, safe, un- hackable place where Scott Pruitt can take all those secret phone calls from the White House that he says he gets.

Saying the word SCIF over and over doesn`t just make something a SCIF. But they`re trying.

(COMMERCIAL BREAK)

MADDOW: We started off the show tonight with the transcript from this remarkable court hearing that happened in federal court in Lower Manhattan today, federal district court judge hearing arguments in this criminal case involving the president`s personal lawyer, Michael Cohen. It was not only a remarkable case because we got the disclosure that one of Cohen`s previously undisclosed legal clients is a cable news host who talks about Mr. Cohen all the time without ever disclosing that Cohen is also his lawyer.

It was also remarkable because in the room at the same time as Michael Cohen was Stormy Daniels and her lawyer, there in the same room all together at the same time since the Stormy Daniels hush money settlement became such a gigantic legal headache for the president.

Stormy Daniels` lawyer, Michael Avenatti, will be joining "THE LAST WORD WITH LAWRENCE O`DONNELL" which starts right now.

Good evening, Lawrence.

END

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