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DOJ watchdog releases report on Clinton probe. TRANSCRIPT: 06/14/218. The Rachel Maddow Show

Guests: Adam Schiff, Elizabeth Warren

Show: THE RACHEL MADDOW SHOW Date: June 14, 2018 Guest: Adam Schiff, Elizabeth Warren

CHRIS HAYES, MSNBC HOST, "ALL IN": That is "ALL IN" for this evening.

THE RACHEL MADDOW SHOW starts right now.

Good evening, Rachel.

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

HAYES: You bet.

MADDOW: Thanks to you at home for -- hi, Senator Brown.

HAYES: The senator wants to say hi.

MADDOW: Hi. Can we do a little crossover?

SEN. SHERROD BROWN (D), OHIO: I don`t know where I am. I know it`s in the building. If you give me directions I`ll show up.

MADDOW: I`m over here. Hi, Senator. Nice to see you.

BROWN: Jump through the screen. Thank you, Rachel. Thank you, Chris.

MADDOW: All right. Thanks to you for joining us. Thanks to our interloper from the other show. That was nice.

So, did I not say there was going to be a ton of news this week? We knew in advance this week was going to be nuts in terms of big national news. But boy howdy was that an understatement.

All right. So, there`s lots to get to tonight. There are a lost ways to get yourself an advantage in an election. You can, for example, get an edge on your opponent if you are great on the issues, if you`re great at explaining your positions, so you win all the arguments, you win all the debates, and you thereby win the race.

You can sometimes win if you`re an incumbent and people like the job you`re doing, so they`re generally inclined to keep you around, and incumbents tend to win more often than they lose. So that`s one way to win. You can also win by spending your opponent into the ground.

You can win by being lucky. You can win because your opponent turns out to be a creep and everybody can tell that the other guy`s a creep before they go vote. So, there`s lots of above-board more or less kosher ways to win an election.

In a circumstance where there`s no incumbent and nobody`s a creep and you`ve both got money and you`re both pretty good at explaining your appealing take on the relevant issues, well, maybe in that case, maybe you just win because you outhustle your opponent. You run harder. You run a smarter, more efficient campaign.

I mean, there`s lots of ways to get a leg up. There`s lots of ways to win. Some of them are nicer and more fair than others.

But obviously you`re not allowed to win a national election in the United States because you`ve got the help of a foreign adversary, right? That`s not allowed. That`s what the special counsel Robert Mueller is investigating when it comes to the Donald Trump presidential campaign.

But in addition to that, today we got chapter and verse on two other ways you`re really not supposed to get help to win an election in this country. But in this blockbuster day of news we just had, we learned that President Trump benefited from both of these things to get him where he is today, which is in the White House.

The first one was that you`re not supposed to benefit from illegal expenditures by your fake supposed charity, which is in fact not a charity at all but is disguised to look like one so it can function as an arm of your campaign. We will have more on that story in a moment tonight. But that`s one way you`re not supposed to get a leg up in an election, is with a fake charity illegally contributing to your campaign. Donald Trump apparently benefited in his campaign from his fake charity doing just that. We learned that today.

In addition to that, number two, you are also not supposed to get help in your election bid from the FBI, from the FBI breaking its own rules in ways in that designed to or at least that have the effect of hurting your opponent and helping you. But in this -- in this remarkable day of news that we have had today, the inspector general`s report from the Justice Department and this new lawsuit, this criminal complaint by the attorney general of the state of New York into what the A.G. calls the persistently illegal Donald J. Trump Foundation.

The attorney general for New York says the Donald J. Trump Foundation was use the illegally to benefit Trump`s presidential campaign. It was also used illegally to benefit Trump himself. The A.G. is demanding that the Trump Foundation be shut down, that it be dissolved, that its assets be seized and given to other real charities.

The A.G. is demanding that the president himself should pay almost $3 million in restitution from money that was illegally mishandled through his foundation. And she wants the president himself and others involved in his foundation, she wants them all banned from appearing on the board of any other actual registered charity in New York state because of their bad behavior associated with the Trump Foundation.

And the A.G.`s lawsuit also comes with federal criminal referrals for alleged tax crimes to the IRS and to the Federal Election Commission for alleged criminal violations of campaign finance laws.

So, we got that allegation from the New York state attorney general today, and that was a surprise. We`ve got Senator Elizabeth Warren here tonight live and in studio. We`re going to be joined momentito by the top Democrat on the Intelligence Committee. We will talk about that A.G. lawsuit with both of them.

But we will also talk about this report from the Justice Department. I feel like today, both from that New York lawsuit and from this I.G. report from the Justice Department. I feel like today, with these two huge pieces of news we got information about possibly illegal or improper ways that this president got help in his presidential campaign.

We also today, I feel like we finally got a ton of stuff settled. We got official determinations on so much stuff today that we have reported and discussed and fought over for more than a year now. So, there`s a lot to get to.

But let`s start with the long-awaited Justice Department inspector general report into whether or not the FBI and the Justice Department followed the right policies and procedures during the 2016 election, when they investigated Hillary Clinton for having used a private e-mail server when she was secretary of state. The I.G. also investigated whether any of the Justice Department or the FBI`s decisions about the handling of that case were based on improper considerations or bias of any kind.

And honestly, the origin of this report from the Justice Department inspector general was the repeated claim by the -- by Donald Trump and by his campaign in 2016 and by pro-Trump Republicans ever since that Hillary Clinton should have been locked up, that the FBI was somehow infected with a pro-Hillary Clinton bias that resulted in them not being criminal charges against her for her use of a private e-mail server when she was secretary of state.

Well, the inspector general has now investigated basically what those crowds have been chanting for a year and a half. And what they found was that the opposite was true. On the question of whether or not Hillary Clinton should have been criminally charged, quote: we found no evidence that the conclusions by prosecutors were affected by bias or other improper considerations. We determined that they were based on the prosecutors` assessment of the facts, the law, and past department practice.

So, the Justice Department inspector general says the reason Hillary Clinton was not charged in the e-mail scandal, despite all the "lock her up, lock her up" stuff. Despite all that, the reason she wasn`t charged is because there wasn`t reason to charge her over the e-mail scandal. Inspector general has investigated that quite thoroughly and has found that that decision not to charge Hillary Clinton, it wasn`t based on bias, it wasn`t based on political intentions of any kind, it was based on the law and past Justice Department practice and all the things that prosecutors are properly supposed to consider when making a decision like that. That doesn`t bode well for the whole "lock her up" thing Republicans have been running with for the last year and a half, two years since the Trump campaign started down this road.

Where the inspector general did find serious fault is with the decisions made by former FBI Director James Comey during the presidential campaign when he decided to make public statements about the Clinton e-mail investigation, public statements that hurt her campaign and helped Donald Trump. The first time he did that was in July 2016, when Comey announced that there would be no charges brought against Clinton because of the e- mail investigation but he only announced that at the very end after he spent the whole rest of his time in this big nationally televised press conference criticizing Hillary Clinton anyway and calling her extremely careless.

That led to months of attacks on Hillary Clinton. Yes from Republicans but also from the press. All bolstered by this bizarre, unprecedented, very critical statement about her from the FBI director. Well, the inspector general finally put out the definitive report on that and called James Comey`s decision to make those public statements, quote, an unjustified usurpation of authority. He called James Comey, quote, extraordinary and insubordinate in that instance.

Quote, Comey`s announcement was unusual in that it concentrated in substantial part on criticizing former Secretary Clinton`s uncharged conduct. This was contrary to longstanding department practice and protocol. Witnesses told us that criticizing individuals for conduct that does not warrant prosecution is something that the Justice Department simply does not do.

For example, the head of a national security division at DOJ stated, we don`t say we`re closing something but let me tell you some bad stuff that we saw along the way, but it doesn`t rise to the level of bringing a case. We just don`t do that. Another prosecutor characterized the negative comments about former Secretary Clinton as declining to prosecute someone and then sort of dirtying them up with facts that you develop along the way.

Quote: several witnesses acknowledged that one major purpose of including negative comments about former Secretary Clinton was to send the message that the FBI wasn`t condoning her conduct, essentially to protect the FBI from criticism that it failed to recognize the seriousness of her conduct and was letting her off the hook. We recognized that this investigation was subject to scrutiny not typical of the average criminal case, but that does not provide a basis for violating well-established department norms and essentially trashing the subject of an investigation with uncharged misconduct that Comey, every agent, and every prosecutor agreed did not warrant prosecution.

Such norms exist for important reasons, and none of the justifications provided by witnesses for why such criticism was warranted in the Clinton e-mail investigation provided legitimate reasons to depart from normal and appropriate department practice. So, that`s the inspector general talking about James Comey`s decision to hold this press conference. In July, right in the heat of the campaign, July 2016, to talk smack about Hillary Clinton and her private e-mail server. Even while he was announcing there wouldn`t be any charges against her, he still went out of his way to be extremely critical about what he thought about what she had done.

So that`s the criticism that the inspector general levies against that statement he made in July. This is what the inspector general says about his decision several months later, eight days before the election, month make -- excuse me, 11 days before the election to make yet another public statement about the Clinton e-mail investigation.

You`ll remember that this time it was in October 2016, right before the election, and that`s when Comey went back to the issue again and notified Congress that he was reopening the Clinton investigation to look at some more e-mails, e-mails that turned out to be absolutely nothing. This, by the way, was the action by James Comey that the Clinton campaign believed cost them the election. Not just because of its content, because of how close it was to the actual vote.

Here`s what the inspector general says about that. Quote, far too little was known about those e-mails in October 2016 to justify departing from department norms, policies and precedent. Instead of referring to and being guided by long-standing department and FBI policies and precedent, Comey conducted an ad hoc comparison of the risks and outcomes associated with each outcome. He described the potential consequences of concealing the existence of the e-mails as catastrophic to the FBI and the department because it would subject the FBI and the department to allegations that they had acted for political reasons to protect Hillary Clinton. Instead Comey said he chose the option that he assessed as being just really bad.

Even within the flawed analytical construct that Comey set up, he did not assess risks evenhandedly. He assigned paramount significance to the risk that he and the FBI would be unfairly accused of hiding the e-mails to protect candidate Clinton. But he appears to have placed no comparable value on the corresponding risk for making a public statement that he and the FBI would not only be accused of violating long-standing department and FBI policy and practice but that he would also be unfairly accused of hyping the e-mails in a manner that hurt candidate Clinton.

And that`s -- that`s the big I think political lesson here, right? I mean, the inspector general isn`t finding that James Comey did what he did during the campaign specifically because he wanted to hurt Hillary Clinton`s campaign and try to elect Donald Trump. That`s not the claim here.

The inspector general finds that James Comey just didn`t care if he might be seen as acting in a way that might hurt Hillary Clinton`s campaign. He didn`t care if it looked like he might be hurting Hillary Clinton. But he really, really, really cared and he took great extraordinary action to avoid appearing like he might be helping Hillary Clinton in any way.

That`s how he weighed those two consequences. If it looks like I`m hurting Clinton, don`t care. If it looks like I`m helping Clinton, that`s a disaster. That`s how he weighed those two considerations.

That`s why I`m saying this is the big political point here, because this isn`t just about 2016. This isn`t just about Donald Trump getting a little boost from the FBI to win the election. You wonder why the president and Republicans today are attacking the FBI and attacking the Justice Department all the time? This is why.

I mean, if you can just hit them hard enough, if you can just use conservative media to attack them hard and consistently enough, then you can make the Justice Department and the FBI worry about the perception that they might be perceived as soft on Democrats. It might make them overcompensate, right?

Once they`re worried about that perception, you`re halfway there to make them bend over backwards for you and in this case break policy for you to make sure they definitely don`t help the Democrats and they thereby help the Republicans instead. And so, why did the -- you know, closed, no prosecution, no there there Clinton e-mail investigation get all of this exhaustive public attention and this extraordinary public disclosure and public criticism of the candidate from the FBI during the campaign? While the simultaneously ongoing investigation of Russia`s intervention to help Trump win the election and the Trump campaign`s involvement in that, that got no public disclosure from the FBI during the campaign whatsoever, they never mentioned it?

Why`d they talk about the Clinton thing and they didn`t talk about the Russia thing? Both candidates were under investigation. Clinton`s turned out to be nothing. Trump`s turned out to be something. How come they only talked about the one that turned out to be nothing?

It turns out the inspector general has looked into that. Quote: "In both the July announcement about Clinton`s e-mails and that second announcement Comey made about it in October, Comey engaged in ad hoc decision-making based on his personal views, even if it meant rejecting long-standing department policy or practice.

For example, we found unpersuasive Comey`s explanation as to why transparency was more important than departmental policy and practice with regard to the reactivated Clinton e-mail investigation while by contrast, department policy and practice was more important to follow with regard to the Russia investigations.

Yes. Department policy and practice says don`t talk about ongoing investigations. We`d better follow that I rule when it comes to the Russia thing and Trump. Department policy says we`re not supposed to talk about ongoing investigations. Eh, let`s talk about it when it comes to Clinton.

And the FBI made this decision. James Comey made this decision. The American people had to know that Hillary Clinton`s e-mails were of grave concern to James Comey even though there weren`t going to be any charges in that case.

But the American people apparently couldn`t be allowed to know about the other major party candidate being the center of a counterintelligence investigation that thus far has led to 20 indictments including the candidate`s campaign chairman and five guilty pleas including by the candidate`s deputy campaign chairman and his foreign policy adviser and his top national security aide. And that`s just thus far.

The inspector general report today did find evidence that some FBI employees expressed political opinions in their private communications. At one point, FBI attorney Lisa Page said in a text message, quote: Trump`s not ever going to become president, right? Right? And FBI agent Peter Strzok responded, No. No, he won`t. We`ll stop it.

And the I.G. was very critical of that. But the I.G. also concluded there was no evidence those political opinions affected the agents` work.

Quote: we did not find documentary or testimonial evidence that improper considerations including political bias directly affected the special investigation -- excuse me -- the specific investigative decisions we reviewed. Our review did not find evidence to connect the political views express pd in these messages to the specific investigative decisions that we reviewed. Rather, we found that these specific decisions were the result of discretionary judgments made during the course of an investigation by the agents and prosecutors and that these judgment calls were not unreasonable.

So, now, we`ve got the findings, right? No one at the FBI or the DOJ did any particular thing in any particular investigation because they were pursuing a political agenda. That said, according to the inspector general, the Clinton e-mail investigation was mishandled. It was mishandled by James Comey in terms of his public statements that hurt Hillary Clinton`s campaign.

And what`s important for us now, not just in looking at the DOJ and the FBI and James Comey and Hillary Clinton versus Donald Trump and what happened in 2016, what`s important for us now is that that mishandling of the Clinton e-mail investigation, those statements about that ongoing investigation which resulted in no prosecutions, those statements that James Comey made which hurt Clinton`s campaign, potentially fatally, those happened basically because of the Republican pressure campaign on the FBI and the DOJ. It worked.

Anti-Clinton public pressure on law enforcement led James Comey to bend over backwards to in fact break the rules, to rough up Hillary Clinton in public in order to prove wrong the Republican criticism against the FBI, that the FBI was somehow too soft on her. It worked.

And Democrats even today keep expressing shock, shock that the Trump White House and Republicans keep attacking and keep pressuring and keep criticizing and berating law enforcement. Law enforcement generally right, the Justice Department, the FBI, and the special counsel. They`re just going after them hammer and tongs.

Democrats are continually outraged and bewildered that the Republican Party, the supposed law and order party, keeps attacking law and order. Well, there`s a reason why they do it. It works, it turns out. The bullying, it works.

That`s the political bottom line of the inspector general report. You make the FBI feel paranoid about whether or not it`s too soft on Democrats, they`ll go harder on Democrats. They`ll even break the rules to do so.

The bullying that you are now seeing by the Trump White House, by the president himself and by the Republicans more broadly against the FBI, against law enforcement, against the special counsel-s bullying that has an intended outcome. And in our lifetimes, we now know that same bullying pushed the FBI director to push the last election to help elect Donald Trump.

That`s how it happened. It worked. That`s why they`re still doing it now.

Elizabeth Warren is the interview tonight. Adam Schiff is here with us next. A lot to get to tonight.

Stay with us.


MADDOW: We were told it would be over 500 pages. I personally expected small type. I expected my beleaguered little office printer to be getting quite a workout. I expected to give myself eyeball strain.

I did not expect this. "Page left intentionally blank." And there was a whole bunch of them, actually. Blank pages intentional and explicitly so.

I thank you truly from the bottom of my heart. This puppy, this long- awaited Justice Department inspector general report is 568 dense pages about the handling of the Clinton e-mail investigation during the 2016 presidential campaign. It is leavened by a few intentionally blank pages.

Bottom line, the I.G. says there was no political bias infecting the investigation itself. But the I.G. concludes the then FBI Director James Comey basically seriously screwed up when he made the public statements that he did about the Clinton investigation. The I.G. seriously implies that those were made basically in response to criticism of the FBI, public criticism of the FBI, for not being hard enough on Hillary Clinton.

Here to help us understand it is Congressman Adam Schiff, the ranking member of the House Intelligence Committee.

Congressman, thank you for joining us. Appreciate having you here tonight.


MADDOW: This is a remarkable window into the behavior of the FBI and the Justice Department. You heard what my bottom line takeaway is from this report. I`m curious as to what yours is.

SCHIFF: Well, it`s very much the same. I think there`s no question that Director Comey and the FBI were reacting to these constant Republican attacks, you`re being too easy on Hillary, you`re being too easy on Hillary.

And there was one other thing, of course, and that is that James Comey thought that Hillary Clinton was going to win. And I think that also informed his decision-making. But you`re right to point all this out because we`re at risk of making the same mistake again. As you have the Republicans once again beating up on the Department of Justice, you also have them demanding information in the name of transparency.

And one thing that the report really didn`t go into is that part of James Comey`s mistake, part of his maximalist transparency policy outweighs the department rules and regulations, was providing information to Congress, providing witness interviews, 302s to Congress, testifying about the details of a pending or closed case or a soon to be reopened case. All of that at the time he called transparency, and at the time I remember saying what you`re calling transparency will soon come to be known by another name, and that is mistake. But we are at risk of that mistake again.

MADDOW: In terms of the interactions between the Justice Department and Congress, this issue of transparency, handing stuff over about ongoing investigations, I have to ask you about a briefing that I believe you attended today from senior intelligence and law enforcement officials, briefing leadership in Congress including yourself as the top Democrat on the Intelligence Committee, about aspects of the Russia investigation.

This was a follow-up briefing to an earlier transmittal of information that Republicans had demanded. What can you tell us about that briefing today and whether you think it was proper?

SCHIFF: Well, this is the parallel that I was mentioning, Rachel, where in the Clinton e-mail investigation you had then again Republicans in Congress demanding information about the investigation so that they could make it public and they could continue to beat up the Justice Department and tear down Hillary Clinton.

Here you have Republicans on the intelligence committee, government reform committee and the judiciary committee, likewise demanding information from the FBI, the Department of Justice which they hope to use against the department, which they hope to use to support and defend the president, and which Rudy Giuliani has said he fully expects to get his hands on.

But that`s even more gross an abuse than perhaps we saw during the Clinton e-mail investigation and congressional behavior there. But all I can tell you in terms of the substance of our meeting today is that the conclusion we reached after the last briefing that the president`s claim of politically embedded spies was bogus remains bogus. There is still no evidence to support that.

MADDOW: Is there anything that`s being handed over in these briefings that is likely to give the president`s defense or people who are potential important witnesses in the case surrounding the president, an improper look at the ongoing investigation or what prosecutors are pursuing?

SCHIFF: Well, this is the kind of information, and I can`t go into any specifics, but it`s not the kind of information that is normally turned over to Congress during a pending investigation. And this is why it raises such alarm bells with me. What`s more certainly in our committee and I think with Mr. Gowdy in the Government Reform Committee, the whole purpose of seeking it is not to try to do oversight, it`s to try to help the president`s legal defense.

So, it comes out of an improper motive. But in terms of whether it will ultimately have that impact on the investigation, that depends on whether those that receive the information abuse it. I have to hope that they won`t, but the record of some of the people who are making the request is not very fortuitous in that regard.

MADDOW: Congressman Adam Schiff, the top Democrat on the Intelligence Committee, thank you very much for your time tonight, sir. It`s good to have you here.

SCHIFF: Thank you.

MADDOW: All right. Lots more to get to tonight on what as I said has been a blockbuster news day. Senator Elizabeth Warren is going to be here live in studio in just a moment.

Stay with us.


MADDOW: One weird stunt that Donald Trump pulled off as a presidential candidate was right before the Iowa caucuses. So, it was the end of January 2016. Fox News is about to host a Republican primary debate in Iowa with all gazillion contenders for the Republican nomination.

But Trump said he wasn`t going. Instead, he held his own competing event. And he billed it as a fund-raiser for veterans. It was kind of a telethon slash rally where instead of going to the debate, Trump announced to the crowd every time a rich friend of his pledged a big donation to veterans. In the end, Trump announced that the event had raised over $6 million for charities for U.S. veterans.

Then over the next few days leading up to the Iowa caucuses in which he was competing, Trump traveled around, handing out brig novelty publisher`s clearinghouse style gigantic checks to veterans groups from his charitable foundation. See, it says the Donald J. Trump Foundation there right on the big check.

And there were lots of things that were weird about that spectacle. I mean, for starters, the Trump campaign was never really able to account for where all the money went.

David Fahrenthold at the "Washington Post" went on to win a Pulitzer Prize for his reporting on Donald Trump`s supposed but never really charitable giving. Fahrenthold was never able to track down the self-proclaimed $6 million Trump had said he raised for veterans. Eventually, the Trump campaign admitted they hadn`t actually raised $6 million.

But they also couldn`t document how much they did raise nor could they account for what they gave out. The campaign even refused to offer any evidence that Trump himself had followed through on his personal pledge that he would donate a million dollars of his own money to veterans.

All the charities Fahrenthold spoke to that had actually received money, none of them got money from Donald Trump. What happened to his million bucks?

So, Trump skipped the debate to raise money for veterans gambit, it was always a little shady and opaque. But now today, according to a new lawsuit filed by New York`s attorney general, she alleges that that whole scheme was also totally illegal.

New York`s new acting attorney general is Barbara Underwood. She`s been a legal superstar for a very long time, although she`s only been New York A.G. for a hot minute. Today, she filed suit against the Trump Foundation, against Donald Trump himself, and against his children, Ivanka, Eric, and Don Jr., who were all on the board of the foundation.

The lawsuit accuses them of a pattern of illegal conduct that includes improper and extensive political activity and repeated and willful self- dealing transactions. The attorney general`s investigation, quote, revealed that the foundation was little more than a checkbook for payments to not for profits from Mr. Trump or the Trump Organization. This resulted in multiple violations of state and federal law because payments were made using foundation money regardless of the purpose of the payment.

Trump uses -- excuse me -- Mr. Trump used charitable assets to pay off the legal obligations of entities he controlled, to promote Trump hotels, to purchase personal items, and to support his presidential election campaign.

To support his presidential campaign? Yes. Quote, the foundation and its directors and officers violated the law by, quote, making expenditures to influence the outcome of an election, which is something you are not allowed to do with your charitable foundation. That`s illegal. You are not allowed to weaponize your charitable foundation to be part of your campaign, to help you get elected president. There are state laws that violates, which is (AUDIO GAP) petition to have the Trump Foundation (AUDIO GAP). To force Donald Trump himself to repay the foundation double the money he allegedly improperly spent from it, and to prohibit Trump and his children from being officers of any other charitable organization in New York based on how they behaved with this one.

There are also federal laws against using your charitable foundation to help yourself get elected, which is why the New York A.G. has notified the IRS an the FEC concerning potential violations of the tax code and federal election law. That may subject the foundation and its directors and officers to substantial penalties or fines.

The evidence the New York attorney general puts forward in this remarkable lawsuit is remarkably straightforward. That e-mails she`s put forward as part of this suit appear to show that even though donations for veterans` groups were solicited by and collected by the Trump Charitable Foundation, that money once they got it was entirely controlled and definitely disbursed not by the foundation but by the Trump for president campaign. So, they took it in for charity. They didn`t give it out for charity.

Here`s Trump campaign manager at the time, Corey Lewandowski, writing to the guy at the Trump Organization who was responsible for the checkbook for the foundation. This is right before the Iowa caucuses. He says, quote: Is there any way we can make some disbursements this week while in Iowa? Specifically on Saturday.

Because that would be three days before the vote and that would be a big help to the Iowa campaign. If you could arrange to hand out the checks from the charitable foundation in Iowa in the days right before the vote. Get those checks cut, hey, ASAP right before the vote, OK? That`s illegal.

Lewandowski writing the same day, quote: here`s the list of veterans organizations that Mr. Trump has approved to get the money.

Today`s lawsuit says that list was put together by the campaign and approved by the candidate. This all allegedly adds up to in kind contributions of $2.8 million by the foundation to the Trump campaign.

With respect to these transactions, Mr. Trump`s conduct was willful and intentional in that as president and ultimate decision maker of his foundation and presidential candidate whose election the foundation`s in kind contributions sought to influence he was fully aware of and intended the benefits he would derive from the foundation`s in kind contributions.

It`s supposed to be a charity. You can`t use your charitable foundation as a personal slush fund. And you certainly can`t use it to boost your presidential campaign. And if you are going to do that, you shouldn`t do it so obviously. And leave a big paper trail. And so we will be waiting for this new New York lawsuit against Donald Trump and his children to be adjudicated.

We will also be waiting to see if any federal charges result from the referral by New York`s attorney general or if the president tries to pressure those federal agencies into how they will respond.

This New York attorney general has been in office less than a month. What`s she going to do next?


MADDOW: Very please to say that joining us now for the interview here live in person in studio is Massachusetts Senator Elizabeth Warren. She serves on the Banking Committee. She serves on the Armed Services Committee. And she will not like to hear me say this, she`s also on the list of Democrats, who a lot of Democrats around the country are hoping will run for president in 2020.

Senator Warren, I`m sorry for that.

SEN. ELIZABETH WARREN (D), MASSACHUSETT: I`m running for Senate, Massachusetts, 2018.

MADDOW: OK. That`s before 2020.

WARREN: Less than five months, less than five months.

MADDOW: I`m not going to ask you about that because I feel like I know the answer to your questions about that.


MADDOW: But I want to ask you about some of the stuff that`s broken today that I`m still having a hard time getting my head around.

Let me ask you first about this remarkable and I think unexpected lawsuit that was filed by the New York attorney general today concerning the president`s charitable foundation.

Now, the attorney general is asking for a number of remedies. She wants the foundation dissolved. She wants Donald Trump and his children to not be allowed to serve on any charitable board again. She wants Donald Trump to pay back double the money that she says was mishandled. She wants criminal referrals to federal agencies in terms of the mishandling of those funds.

Have you seen that lawsuit and what`s your take on it?

WARREN: So, look, the laws around charities are pretty clear about what you can and can`t do. This is not -- this is not deeply obscure law. It`s the money comes, in the money is supposed to go for the charitable purpose. And there are quite reasonably penalties put in place if you don`t do that.

What gets me about this is not that he was fooled by this. It`s the shamelessness of it. It`s turning around and saying I know, let`s take a trust and, boy, if that`s helpful to Donald Trump personally, Donald Trump`s family, let`s do it.

To use veterans like that -- you know, all three of my brothers are veterans. My oldest brother was career military. He served 288 combat missions in Vietnam. My other two brothers served.

There`s just something to me about the notion -- I get that we`re talking about a grifter, someone who`s always watching out for himself. But doing this with veterans, pushing veterans out front and claiming I`m doing this just for the veterans, and then turning it around just to break the law and take care of himself.

And then on top of that, I get there`s been this kind of strutting, you know, shameless about everything, but shameless about illegality, about things that are clearly wrong? It`s a reminder that we have somebody leading our government right now who -- it truly is. It`s only all about him. It`s not about our country. It`s not about our veterans.

It`s not about rule of law. It`s not about anything else except him, him, him. And that`s costly to all of us.

MADDOW: So this -- with the charity issue it remains to be seen exactly what`s going to happen here. The attorney general saying this violates a whole bunch of laws about charities in New York state. But in terms of pursuing criminal penalties here, one of the things the A.G. has done is written a formal detailed well footnoted letter to the IRS saying these are the federal tax laws that were broken here and writing to the FEC saying this is the way the president used this foundation, essentially to illegally finance his campaign.

Do you believe that federal agencies are fairly and robustly assessing allegations of criminal conduct against the president or has he infected that with his public pressure on law enforcement?

WARREN: Well, let`s start with the baseline, and that is that no one is above the law, not even the president of the United States. Everyone is subject to the law. And now the question you`re really asking is just how corrupt has this government become? How much will people back off, how much will agencies back off from carrying out their duties?

And that`s part of what we`re going to see over the next several weeks and several months. But it`s what we`re seeing all the way through government right now. An Environmental Protection Agency that not only won`t do its job on behalf of the American people but in fact is out there helping the polluters saying, hey, listen, if it`s cheaper for you to dump your crud in the river go ahead and do it. Because they don`t see it as their job to make sure that we can breathe the air and drink the water.

The Consumer Financial Protection Bureau, someone in charge right now who wants to change the whole mission statement to say oh, but we`re also here to help the creditors, right? Wait a minute. This is the agency that`s supposed to make sure people don`t get cheated on their mortgages, on their student loans, on their credit cards. That`s the whole reason that agency`s there. And just trying to hollow that out from the inside and turn it around.

A Department of Education where the head of the department of education, what`s your job at the Department of Education? It`s to promote public schools, to try to be helpful to public schools. To protect our students who are being cheated on student loans and make sure that doesn`t happen. Put good regulations in place and monitor it.

And what`s happening? We`ve got someone, Betsy DeVos, heading up the Department of Education who`s hiring, bringing on board people who work for those for-profit colleges that have cheated students and just recently announced, hey, we`re going to put somebody in charge who is going to get the right again to be able to sign off on which schools are eligible to get federal loans after having been decertified because they signed off for a bunch of for-profit colleges that were caught cheating students, costing the taxpayer and taxpayer and costing those students both time and in some cases an enormous amount of money.

And you can just keep watching this all the way through the government. It`s the corruption of not just the Trump administration. It`s the twisting government. Not to work anymore for the people but to work for the powerful, to work for the rich, to work for a narrower and narrower --

MADDOW: But they`re doing that on purpose. It`s a feature of what they`re trying to do. It`s not a bug.

The thing that I find more shocking, more surprising, I guess, is that when they`re getting caught, they`re not getting in trouble. You mentioned Scott Pruitt, Scott Pruitt now has been documented to use staff to try to get his wife a couple of different jobs, in one case successfully. That`s blatantly illegal but as far as I know, he`s still going to work every day and doesn`t seem to be afraid he`s going to jail for it.

WARREN: But look, he`s delivering for big oil. He`s delivering for the energy companies that want him there. He`s in bed with his buddies. And no, they`re not going to get rid of him over personal corruption. Are you kidding?

MADDOW: But when it`s violating the law, isn`t that something that`s supposed to have a corrective in law enforcement -- even if you`ve got the reins of power in terms of the White House and Congress?

WARREN: But every part of this, what you`re asking me if we`re a country that still adheres to the rule of law?

MADDOW: Basically, yes.

WARREN: Yes, exactly, and the answer is: I hope so. But the problem we`ve got is the people who have to enforce that law, they`re the ones on the front line and we`re going to see a measure of how deep the corruption goes. But it raises the question about what we`re going to expect in 2018 in the election.

MADDOW: I want to ask you about that when we come back.


MADDOW: Senator Elizabeth Warren, Democrat of Massachusetts, is our guest.

We`ll be right back. Stay with us.


MADDOW: Joining us once again is Elizabeth Warren, Democratic senior senator from Massachusetts.

Senator Warren, thank you for sticking around.

WARREN: I`m delighted to be here.

MADDOW: You`re up for reelection in 2018.


MADDOW: Do you believe that the Democrat party is going to win control of either House of Congress in the midterms? And how do you make that assessment?

WARREN: So, look, you probably need a pundit for this one. I really, really want us to do that, I`m going to work really, really hard to make that happen and I run every day filled with terror that it won`t, because if Donald Trump remains in control of the House and the Senate and the Republicans won`t stop him, I don`t know what happens in the next two years.

But I think the Democrats have got a really terrific chance. And the reason for that is because I feel democracy changing out there. I think that we`re honing this down to the core things that matter.

What`s the difference between a Democrat and Republican? Look, the Republicans went behind closed and locked doors and said we`re going to give a trillion and a half dollars away to billionaires and giant corporations. That`s what it is. Who did they let in the room? Only Republicans and lobbyists and Republican donors and they delivered that package.

They said it`ll trickle down on the rest of you and it will all be fine. Democrats say, wait a minute, if you`ve got a trillion and a half dollars to spend, there are a lot of things that we value and care about, like let`s keep down the cost of health insurance, let`s make it so people can actually afford their health insurance. Let`s take care of the opioid problem in America.

Republicans say, hey, listen, I`d really like to do that, but we just don`t have any money for that. Let`s take care of the student loan debt crisis. There`s $1.5 trillion that young people owe right now and it keeps them from getting their lives started. They`re being crushed from this debt.

Or how about we really do an infrastructure plan? How about we put the money in to repair our crumbling infrastructure and build an infrastructure for a 21st century economy and an infrastructure that is hardening us, getting us ready for what`s coming from our oceans from the fires out west. That`s good jobs now and it`s investing in good jobs in the future.

In other words, the Republicans think you give the money to the billionaires, somehow it`s going to trickle down for everybody else. Democrats think that what government should do is work for the people and help us make investments in the future. Rachel, we could be the first generation whose kids don`t do better than we did.

The first generation that says it`s more important to invest in a billionaire than it is to invest in our kids and our grand kids. And we have a chance to keep driving that home, to say your healthcare matters more than a billionaire getting richer.

MADDOW: Even if Democrats get both houses in Congress in 2018, Donald Trump is still going to be in the White House, and he`s not going to sign practical that Democrats sign, at least he`s not inclined toward that now, maybe you could change him if you won both houses of Congress.

WARREN: Maybe he would see that as winning to sign off on bills that come to his desk.

MADDOW: I can`t get inside the man`s head, and I`m uncomfortable trying.

You gave a speech last week where you talk about corruption. You talked about corruption in the United States. You were just talking about it. Moments ago, we were talking about it, we were talking about the rule of law, the threat to the rule of law and whether or not the powerful are above the rule of law.

Let`s say the Democrats are able to get the Senate or Democrats are more likely to get the House. With control of one part of Washington, can Democrats make a significant difference on that core issue while Trump is still in the White House?



WARREN: They can do it partly by stopping some of the bleed, right? They can do it partly by saying, no, we want to hold the investigatory hearings. We want to make this public.

Because -- where Democrats` power really lies is in the truth, is getting more people engaged, getting more people looking at it. Getting more people understanding what`s going on. But it was the women`s march, the largest protest rally in the history of the world.

It was the fact that when Donald Trump said no more Muslims coming to America that people rushed out to the airports. It was the scientists who marched to protect our earth. It was -- it`s now the kids who`ve come off the sidelines and said, gun violence has to stop. We want our voices heard.

It`s the teachers in Oklahoma and West Virginia and Colorado and Arizona who have said, I want my voice heard in this government. We get Democrats back in control of the House and the Senate, we can amplify. We can help direct. We can energize the voice of the people, as democracy itself takes this government over again. I believe that.

MADDOW: Senator Elizabeth Warren, Democrat of Massachusetts, thank you very much.

WARREN: Always good to see you.

MADDOW: Great to have you here.

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


Lawrence, I`m sorry I ate your 33 seconds.


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