Rick Gates testifies against Trump campaign chairman. TRANSCRIPT: 08/06/2018. The Rachel Maddow Show

Guests: Lee Gelernt

Show: THE RACHEL MADDOW SHOW Date: August 6, 2018 Guest: Lee Gelernt

NICOLLE WALLACE, MSNBC HOST: And thanks to you at home for joining us for the next hour.

Here`s the good news: Rachel has the night off, but she will be back here tomorrow, I promise you.

We are in the dog days of summer now, but in the dead of winter, on February 22nd, Rick Gates, Donald Trump`s former deputy campaign chairman, the number two person on Donald Trump`s presidential campaign, had a very, very bad day. That`s because on February 22nd, special counsel Robert Mueller slapped Rick Gates with 23 new felony charges. That was on top of the eight felony charges he was already facing, an avalanche of charges.

If Robert Mueller was trying to get Rick Gates to blink, it worked. The very next day, February 23rd, Rick Gates made all 31 of his charges disappear when he cut a deal with special counsel Robert Mueller. At the time, Gates wrote a letter to his family and friends calling it a, quote, gut-wrenching decision. But in exchange for making those 31 charges going away, Gates pleaded guilty to two new felony charges, lying to the FBI and conspiracy to defraud the United States, charges that are nothing to sneeze at.

Now, under the sentencing guidelines, those two charges carry a maximum prison sentence of 10 years. When you factor in things like Rick Gates not having a prior record, he could be facing four to six years. And for comparison`s sake, the cooperation agreement that former national security adviser Mike Flynn got from Mueller puts Flynn`s risk of jail time at 0 to 6 months. So, Gates did not get Flynn`s sweetheart deal.

But Rick Gates does have one get out of jail free card. The court could choose to give him no jail time at all, or something like probation, but that all depends on whether Rick Gates plays by Mueller`s rules, which is a pretty good incentive for Rick Gates to spill everything he knows. Rick Gates knows a lot, and not just about Paul Manafort.

Paul Manafort and Rick Gates were the top two officials running the Trump campaign, campaign chairman and deputy campaign chairman. They were at the center stage at the Republican National Convention. Rick Gates traveled with Donald Trump on the campaign trail. When Paul Manafort got pushed out in August of 2016, Rick Gates stayed. He was there through the election and beyond.

Rick Gates was the second-highest ranking official on Donald Trump`s inaugural committee. He probably heard Rick Gates referred to as Manafort`s right hand man, or Manafort`s deputy, but that doesn`t do Rick Gates justice. Rick Gates knows a lot about Paul Manafort. He might know more about Donald Trump.

Rick Gates was right there when Paul Manafort was in a mad scramble for cash right before Manafort suddenly and inexplicably offered his services to Donald Trump for free, and Rick Gates stayed inside Trump world long after Manafort hit the exits. Meaning Rick Gates, arguably, knows a whole lot about the central question of what really went down between the Trump campaign and Russia, which explains why eyewitness accounts from inside the Manafort trial made it sound like a high noon showdown when Rick Gates took the stand. Rick Gates sitting just 20 feet from Paul Manafort, taking pains not to make eye contact with his former mentor, Gates staring straight ahead.

This was the first time we heard from Mueller`s star witness and it did not disappoint. The prosecutors asking Gates, quote: did you commit crimes with Mr. Manafort? Gates responded yes, later confessing to embezzling hundreds of thousands of dollars. And in case -- in a case where Paul Manafort`s attorneys would like the jury and court watchers to see this as a trial just about bank statements and tax returns and secret overseas accounts, in a case where we`ve been told you won`t hear the words Trump or Russia or the word oligarch, that one`s been banned, make no mistake, Russia showed up in court today in a very big way.

Joining me now is Josh Gerstein, senior reporter at "Politico". He`s been covering the Manafort case since the beginning and been in the courtroom every day of the trial.

Josh, take us through these dramatic points that are coming out in press accounts about Rick Gates, about the dynamic between Gates and Manafort and about the larger picture that`s being filled in through press accounts about Gates is an eyewitness to much more than Manafort`s crimes.

JOSH GERSTEIN, SENIOR WHITE HOUSE REPORTER, POLITICO: Well, there was more evidence about the Russia issue as you hinted out in the lead in, Nicolle, than I had expected today. I thought we`d be hearing pretty much just about the tax issues, the failure to report foreign bank accounts and things along those lines, the bank frauds that are the focus of this trial.

But we did hear some of the things about Russia, about loans, about $10 million that Manafort owed to Oleg Deripaska, a Russian oligarch. So, we could see the Russia message and the Russia theme seeping in at the edges.

But what everybody was on edge for today and what everybody was looking for was the interaction between these two men. Gates was sort of a protege of Manafort. Gates worked for him for a decade, had known him, you know, in a more distant way for almost 30 years. And, you know, Gates tried to keep a lid on any of those tensions today, as you say.

When he came in the courtroom, he made a point of not looking at Manafort. He looked at the jury and then he began responding to the prosecutor`s questions, always turning back to the jury as he answered those questions. But there were points at which he did look towards the defense table.

You have to remember, the way the courtroom is set up, the prosecutor is only one human away from Manafort. Manafort`s lead lawyer today, Kevin Downing, was sitting between Manafort and the prosecutor asking questions, Greg Andres. So, Manafort had to be there in Gates` peripheral vision.

WALLACE: Take us through some of the emotions that went through this room. Was Gates -- and did the jury pick up on any of that, was Gates acting fearful of what he was testifying to? Did Manafort seem angry? Were there any family members with any outbursts or emotions that they displayed in the courtroom?

GERSTEIN: I didn`t see any outbursts. You know, Manafort seemed very serious. At times, he had his arms folded. He looked, perhaps upset or disappointed, but his emotions were pretty much in check.

Gates, you know, he seemed, I think, a bit nervous, but he was very matter of fact in the way he delivered his testimony. There weren`t a lot of lengthy explanatory kind of sentences from Gates. A lot of it was delivered in yes or no answers, as we were hearing earlier, questions, like, did there come a time when you were working for Mr. Manafort that you became involved in criminal activity?

And that was the first big moment when Gates said yes in answer to that question. And began to describe how Manafort had directed him to transfer money from offshore accounts to pay personal expenses of Manafort`s and to become involved in these efforts to get Manafort loans.

We hear one thing after another listed and as I say, a very plain, kind of matter of fact fashion, although what did seem awkward was the fact there was a certain part of the courtroom that Gates didn`t seem to want to look at.

WALLACE: The Manafort part of the courtroom.

GERSTEIN: Right.

WALLACE: Let me ask you how they deal with explaining to a jury that someone is a cooperating witness, that they`ve already pleaded guilty to committing some crimes. Does that change or could you detect any change in any of the body language from the jury? Did they seem to -- to listen less intently or did they -- did they lean in as this was someone who had traded something?

How does that go over in a jury?

GERSTEIN: So, I was watching the jury as they were describing, or, as I said, as the prosecutors were leading Gates through a description of his deal with the government, and the jurors were watching that very intensely. I saw a number of them taking notes on the different provisions of the plea deal and I was struck by the fact that the prosecution seemed to want to get Gates` baggage out of the way as quickly as possible.

After his educational background and his time working with Manafort was laid out by the prosecutor, the very next thing they got into was his plea agreement with the government and there was more discussion later on of the same basic theme, especially this issue about embezzlement. Prosecutors seemed to want to get that out on the table very early. Folks may remember the defense brought this up in their opening argument, that Gates had apparently stolen money from Manafort, or from Manafort`s firm, and the prosecution definitely wanted that laid out before we quit court today. They wanted that out on the table and brought that out before they sort of went through chronologically the different crimes that this pair may have been involved in.

So, they were clearly trying to immunize him or inoculate him for the counterattack from the defense that is definitely coming.

WALLACE: I think Rudy Giuliani called it hanging a lantern around your problems, and obviously, that doesn`t -- that`s not limited to -- a tactic limited to one side or the other.

GERSTEIN: Right.

WALLACE: Josh Gerstein, who was covering the Manafort case for "Politico" -- thank you for covering it for us.

GERSTEIN: Thanks, Nicolle.

WALLACE: We`re grateful to have you.

Now, let`s bring in our legal power panel. Barbara McQuade, former U.S. attorney of Michigan`s Eastern District, who was also in court today. And Chuck Rosenberg, former U.S. attorney for the Eastern District of Virginia, and a former senior FBI official.

First of all, Josh just reported, Barbara, that Russia was front and center in some of the testimony from Gates today. What is the larger picture look like and how does Gates help us understand not just the Manafort piece, but the Trump campaign piece and inaugural piece and everything that happened afterward until the point where Gates sort of left the scene after he was indicted alongside his former mentor, Paul Manafort?

BARBARA MCQUADE, FORMER U.S. ATTORNEY: Well, one of the pieces of evidence that the prosecution was trying to get in today and the judge was being a little bit difficult about how much detail he would allow them to go into was when Paul Manafort and Rick Gates were working in Ukraine, they were working with these oligarchs, people like Oleg Deripaska, because they were making enormous, enormous campaign contributions, much more than we see in this country, they don`t have the kinds of rules we have in this country, because in exchange, they were expecting to get huge parts of the economy when they were done from these elected officials. Someone was going to control the energy sector and somebody else was going to control the steel sector.

So, the stakes are very high for people who are involved in political operations, and so, that`s why Paul Manafort was receiving so much money, which he then stored in these bank accounts. And so, you wonder to what extent that influence came over to this country, as well, and that Paul Manafort may have imported that practice or to what extent these oligarchs are seeking influence in this country.

WALLACE: Chuck, I understand that Gates is an important and significant witness in the Manafort trial, but his deal requires him to cooperate with everything and anything that Robert Mueller is investigating. So, what other investigative threads could Gates be useful to, and what would you surmise he`s being used for by the special counsel?

CHUCK ROSENBERG, FORMER U.S. ATTORNEY, EASTERN DISTRICT OF VIRGINIA: Right. So, great question, Nicolle. I imagine because of his role in the campaign that they are asking him lots and lots of questions about contacts with Russia and the roles not just of the president, but of other people, Roger Stone, Jared Kushner, Donald Trump Jr.

Look, this is a guy who was around the campaign for months and months, who traveled with the president, who was there for conversations, who may have read e-mails, who may have listened in on phone calls. And so, he`s not just important for Manafort. You`re exactly right.

In fact, the government could probably convict Manafort without Gates, right? This is largely a document case. Manafort -- I`m sorry, Gates put some meat on the bone, but he is going to be important to Mueller and his team in lots of other ways.

WALLACE: This is what I found curious about subjects Gates having to go through, as Josh just said, revealing what he got the deal for, having to say in court today that he committed crimes, that he embezzled money from Manafort. It seemed obvious that he is maybe apart of this, but are they telegraphing anything, the names you just ticked off, Kushner, Donald Trump, Jr., Roger Stone, they are all at that intersection of potential collusion, potential conspiracy around that Trump Tower meeting that the president tweeted about on Sunday.

ROSENBERG: Yes, that`s exactly right, Nicolle. You know, first of all, I wanted to make a point about the stuff that the government did today with Mr. Gates on the stand. They have a constitutional obligation to turn over to the defendant and to his lawyers every bad thing that Mr. Gates had done.

And so, what the government always does when they`re putting on a cooperator is adduce themselves upfront in the first all those bad things. You know, they draw the sting, essentially.

To your question, though -- right, so, there`s a whole bunch of people who are at that intersection of conspiracy or collusion or whatever synonym you want to use, but perhaps other crimes -- financial fraud, bank fraud, tax fraud. And Gates had a view of that, a perch, if you will, to see it in a way a lot of other people might not have been able to. He was at the center of this for quite awhile.

Does he know everything? Of course not. But was he around these people, these actors while they were committing crimes? Well, he was certainly around Manafort when he was committing crimes. And so, he`s a valuable witness to the governor.

WALLACE: Barbara, I don`t ever want to put Steve Bannon in the same category, in the same conversation as you, but I`m struck by something he said in "Fire and Fury," about you get these guys, and I think he meant the Trump family, and maybe even the president, was to go after money laundering. He said the line for Mueller goes straight -- I think he talked about how Andrew Weissmann, some of these guys, were money laundering guys. They prosecuted the Enron case. You go through Manafort, through Kushner and that`s how you get Trump.

Is Bannon`s -- you know, was he a canary in the mine potentially to how you could use Manafort, you could use some of the foundations being laid in this trial to get to other people in the Trump orbit? Is that why you think the president is acting out?

MCQUADE: It`s hard to know why the president is acting out, but I do think that is --

WALLACE: That`s true.

MCQUADE: I do think that is a very valid theory. I think it`s been widely reported that president Trump accepted a lot of money, investment from Russian businessmen when he was having a hard time getting loans from other sources, that a lot of his real estate was bought with catch from Russia Russians. And so, when you think about all the things that Paul Manafort is doing, he`s learning how money is flowing out of Russia.

You know, when Russia went from the Soviet Union and came out of that, there was a lot of money up for grabs that went into the hands of these oligarchs who then tried to get it out of the country and needed a place to park it. And so, a lot of that money came into this country, possibly even through to Donald Trump.

And so, yes, I think that is certainly an avenue of investigation that Robert Mueller is likely to pursue and as Chuck said, Rick Gates is someone who likely knows a lot about that and so, having him as a cooperator has a lot of value, not just what he can do in this case, but what he can do for the overall investigation.

WALLACE: You guys have a lot of value to us.

Thank you, Barbara McQuade, former U.S. attorney. Thank you for your time tonight.

Chuck, we`re going to make you stick around a little longer. I have a few more questions I`m going to ask you about later.

Rachel has a mantra for this show for covering the Trump White House. Watch what they do, not what they say. Unless what they say comes with potential legal liabilities. That story is next.

Stay with us.

(COMMERCIAL BREAK)

WALLACE: On July 9th of last year, "The New York Times" came out with a bombshell scoop, reporting for the very first time the president`s son Don Jr. had met with a Russian lawyer at Trump Tower after, quote, being promised damaging information on Hillary Clinton. Three days later, the confirmation for the president`s nominee to lead to FBI got underway.

And that`s how Christopher Wray found himself in the uncomfortable position of having to weigh in on the propriety of that meeting.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Let me ask you this, if I got a call from somebody saying the Russian government wants to help Lindsey Graham got re-elected, they`ve got dirt on Lindsey Graham`s opponent, should I take that meeting?

CHRISTOPHER WRAY, FBI DIRECTOR: Well, Senator, I would think you`d want to consult with some good legal advisers before did you that.

GRAHAM: So, the answer is, should I call the FBI?

WRAY: I think it would be wise to let the FBI --

GRAHAM: You`re going to be the director of the FBI, pal. So, here`s what I want to tell every politician. If you get a call from somebody suggesting that a foreign government wants to help you by disparaging your opponent, tell us all to call the FBI.

WRAY: To the members of this committee, any threat or effort to interfere with our elections from any nation state or any non-state actor is the kind of thing the FBI would want to know.

(END VIDEO CLIP)

WALLACE: I miss that guy. That Lindsey Graham.

Of course, we all know Don Jr. did not do that. His response to a meeting pitched to him as containing very high level and sensitive information as part of, quote, Russia and its government support for Mr. Trump was to accept the meeting and bring along his brother and law and the chairman of the campaign.

Now, the president`s acknowledgement in a weekend tweet that his eldest son did in fact take that meeting with Russians in order to get information on an opponent has many believing the president has increased his own legal jeopardy by admitting the true purpose of that Trump Tower meeting. And it stands in stark contrast to the initial statement that he dictated last year explaining that the meeting had been primarily about adoptions.

The president now claims that the meeting was, quote, totally legal. Done all the time in politics, which fits into the president`s and his allies` latest talking point that collusion is not a crime.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, PRESIDENT TRUMP`S ATTORNEY: I`ve been sitting here looking in the federal code trying to find collusion as a crime.

UNIDENTIFIED MALE: It`s not.

GIULIANI: Collusion is not a crime.

CHRIS CHRISTIE (R), FORMER NEW JERSEY GOVERNOR: Collusion is not a crime.

GIULIANI: I don`t even know if it is a crime, colluding about Russians. You start analyzing the crime, the hacking is the crime.

UNIDENTIFIED MALE: The question is, how would it be illegal? I mean, the real question is would a meeting of that nature constitute a violation, the meeting itself constitute a violation of the law?

The question is, what statute or law or rule or regulations has been violated? Nobody`s pointed to one.

(END VIDEO CLIP)

WALLACE: So, of course, accepting something of value from a foreign government in the context of a campaign is actually illegal and it appears the president is aware of this. His tweet this weekend came in reaction to this story in "The Washington Post." "The Post" reporting that, quote, Trump has expressed to confidantes lingering unease about how some in his orbit, including his eldest son, Donald Trump Jr., aren`t ensnared in the Russia probe. Quote, as one adviser described the president`s thinking, he does not believe his son purposefully broke the law, but is fearful nonetheless that Trump Jr. inadvertently may have wandered into legal jeopardy.

Joining now is Ashley Parker, White House reporter with "The Washington Post" whose byline is on that tremendous reporting.

I love all your stories and my favorite part of all them is -- I think this is when Trump reaches for his device, to start banging out his tweet. Based on interviews with 3,900 White House -- but I think it was 16 or 18 sources. Take us through what they reported about the president.

ASHLEY PARKER, WHITE HOUSE REPORTER, THE WASHINGTON POST: Sure, so, the key thing that we reported, that we heard from them that seemed to be what the president was responding to in that tweet was his unease about Don Jr.`s possible culpability in all this. And again, he doesn`t believe his son purposely broke the law. He thinks he may have sort of inadvertently done something --

WALLACE: He stumbled into conspiracy to collude with a foreign adversary.

PARKER: Exactly. Done something bad, or even in the most charitable, les nefarious explanation is that he feels guilty in a way that his son is caught up in all of this in a way he feels probably correctly his son would not be were he not his son and, of course, had he not taken that meeting.

WALLACE: Right. Well, and -- he -- there are people he can talk to if he feels guilty about that. But he responded. I mean, your reporting got so far under his skin, that he responded in a tweet attacking the story and then I saw, he retweeted out. This is the story the president is annoyed by.

But this seems to be, if you step back, this simmer that you describe, the blowing of the lid, which is how you describe him and other flash points in his presidency, really started with the Thursday morning tweet about sessions ordering him to stop the Mueller probe and I heard that he was talking about firing Jeff Sessions again that morning on the phone with friends.

Take us through this slow boil and where they go now.

PARKER: So, what was so interesting to us is there`s very much a private and a public Donald Trump. And we all sort of see both of them. And so, privately, as we reported, he was brooding, he was upset with Sessions.

He`s been increasing sort of the number of falsehoods he`s been telling. He`s been naming Mueller now publicly by name, which is something he didn`t do before. And we even sort of looked back at his tweets and he`s been using the phrase witch hunt to describe the Russia probe almost twice as much in the past two months as he was previously.

So, it`s really getting under his skin. And part of this is, you know, his former campaign chairman is standing trials. He`s watching that on a nonstop loop on cable news and he cannot stand the fact that when they`re talking about Paul Manafort, there`s another name he hears.

That name is true, and he thinks they`re doing this to spite him, you know, trying to embarrass Manafort, bring all the stuff for Manafort to embarrass him. He thinks it`s sort of a white-collar crime and it wouldn`t be treated this way were it not for Manafort`s connection to him, which on the one hand is correct.

WALLACE: But it seems to me that these spears are all pointing in towards the Oval Office. You`ve got the Cohen legal shenanigans, of Cohen now trying to get some sort of deal with the Southern District. You`ve got not just the Manafort trial, but the Gates testimony. As we talked about with Barbara and Chuck, Gates is a cooperating witness for anything that Bob Mueller is investigating. So, it`s not just what Gates says in the Manafort trial that he`s going to see him be annoyed by.

What is sort of the central -- Trump`s bad behavior is often animated by fear. What`s the central fear?

PARKER: That`s the great question. And people that are close to him say they don`t know what they don`t know, what we don`t know. But part of it is the president has made a decision. He truly believes and I`m not saying this is correct, but he truly believes that he did nothing wrong. This is getting reinforced now by Rudy Giuliani.

There were other lawyers around him previously who were giving him a different set of advice. That`s not what Giuliani is telling him. So, on the one hand, Trump believes that his biggest risk is not necessarily from Mueller, but may come from possible impeachment, if Democrats take the House.

And so, there is an element where he believes that this is a public relations battle and that he needs to discredit Mueller in case the investigation finds anything, but even if it doesn`t. And sort of lay the groundwork that as he likes to say, this is a witch hunt, collusion is not a crime, and he did nothing wrong.

But again, I have to say, we don`t know what we don`t know. We don`t know what maybe didn`t happen on the campaign, but happened when Michael Cohen worked for him, all those decades and now that Michael Cohen has flipped. That`s a risk, for instance.

WALLACE: I have to say, there was a sea change in the things that people close to him, and you talk to many more of them than I do, there was a sea change in what they thought about the president`s potential guilt on the question of collusion. They always thought, he`s too incompetent to have colluded with Russia, he couldn`t even collude between the plane and the headquarters, but obstruction, a little -- you know, he sort of was a family business, he could have done something wrong there.

But after Helsinki, there was a sea change in what people thought the president could be hiding or protecting against on the question of collusion.

PARKER: I think that`s true. I think there`s also a concern after Helsinki that, again, it`s not just maybe his family business, but that he may be getting himself in more trouble as he tries to fight this publicly. Remember, there`s the collusion and there`s the obstruction of justice and there is definitely a sense that the tweets are not helpful. These public statements are not helpful. The moods in public and private utterances are not helpful.

WALLACE: Talking about firing your attorney general --

PARKER: Not helpful.

WALLACE: Not helpful.

All right. Ashley Parker, congrats on the reporting. It`s fantastic.

PARKER: Thank you.

WALLACE: Great to have you up here in New York.

Air Force One is surprising in a lot of ways. I spent a lot of time on it. It was a privilege. It can feed 100 people at a time. Really, really good stuff.

It can project against an electromagnetic attack. It has an operating room. But there was something even more jarring aboard air force one this week.

That story is next.

(COMMERCIAL BREAK)

WALLACE: Hope Hicks is back in the news. The one-time model who started in PR for Ivanka Trump`s clothing line and within five years landed a job as President Trump`s White House communications director has re-emerged six months after resigning that post.

On Saturday, Hicks was spotted getting onto Air Force One, just before it took off for the president`s rally in Ohio. And there she is, actually in the plane with the president. But President Trump may want to get some legal advice before he swaps stories with Hope, because about two months before she resigned, Hope Hicks met with Robert Mueller, reportedly more than once.

Hope Hicks, you will remember, was also onboard Air Force once when President Trump was putting together his public statement about the now infamous Trump Tower meeting. Ms. Hicks was reportedly right by the president`s side for that project, texting back and forth with his son, Donald Trump Jr. Now, today, a source close to the Trump legal effort tells me that the president`s conduct since the Trump Tower meeting, his involvement in the crafting of a false statement about that meeting and conversations he`s had with White House aides about it point to an increasing likelihood that the president could be vulnerable to charges of witness tampering and obstruction of justice.

It also brings back into focus the ongoing legal jeopardy facing all of the individuals who have testified to Robert Mueller and his team about the crafting of the original false statement and any conversations they may have had with the president about their testimony. With this in mind, what do we think Hope Hicks and the president talked about? And do you think anybody wanted to download afterward?

Joining me now to help me answer that question is Frank Figliuzzi, assistant -- former assistant director for counterintelligence during Robert Mueller`s tenure as FBI director. And back with us again, because we can never get enough of this man, is former U.S. Attorney Chuck Rosenberg.

Let me start with you, Frank, because we started this conversation at 4:00, shortly after I heard this reporting close to the Trump legal effort that the president, even if he ended up having nothing to do with the original meeting with the Russians, all of his conduct since then, all of his involvement in dictating the false statement to the press, all of the conversations that have been widely reported by "The New York Times" that he`s had with White House aides about their interactions with Mueller`s investigators, that all of those incidents could leave him very vulnerable to charges of witness tampering and obstruction of justice.

FRANK FIGLIUZZI, NBC NEWS NATIONAL SECURITY CONTRIBUTOR: Yes, and we continue to see this unexplainable behavior, Nicolle, between what is right from a legal, strategic standpoint, which would be to not talk or be in the same room or airplane with Hope Hicks, and then the strategy, perhaps, of public perception, which is to tell the public, look, I`m thumbing my nose to all of this legalese and Bob Mueller. If I want to invite Hope Hicks on Air Force One, I`m going to do it, she`s with me, she`s on my team.

The problem with this dichotomy between what you should do legally and what you should do for public perception is he`s going down the wrong path with this. So, he`s subjected himself to yet more questioning by Bob Mueller, if that ever happens, and he`s putting Hope Hicks into a box where she`s likely to be re-interviewed, perhaps for hours again, about what transpired on that airplane, whether the president or his aides are attempting to tamper with her and her testimony, it`s all a very bad idea.

WALLACE: And, Chuck Rosenberg, we know that lies were told if we could adopt the language that politicians take on in scandals like this, there was one in the White House in which I worked where Scooter Libby was ultimately charged with obstruction of justice and perjury, and that`s often what trips up aides. And it was positive to me today that it`s possible that somebody involved in crafting that false statement repeated that lie when they went in to meet with Robert Mueller and it`s possible that one of the people that was called in and questioned about that is already in some legal jeopardy, and for the president to talk to anybody that was called in and questioned about that is not smart.

ROSENBERG: No, it`s not smart. And Frank is exactly right. Look, if you`re a defense attorney, the first thing you tell your client is, don`t talk to anybody, anybody, who might be a witness in this case. And if you need to pass something to another person, another witness, do it through me, your lawyer. All right? We can talk lawyer to lawyer without obstructing justice or tampering with witnesses. But you cannot talk witness to witness.

At the very least, it looks bad. More than that, Nicolle, it could be actual witness tampering. Imagine the president saying, hey, what`s your recollection of happened on Air Force One or, how did you describe this to Bob Mueller, did he ask you about it and what else did he ask you? And so, to the extent that Mr. Trump and his team are concerned that this is taking too long, my advice to them would be to stop creating more evidence.

WALLACE: And, Frank, we already had some evidence. I mean, there was somebody who was part of the PR side of this, Mark Corallo. He quit around this flash point of the crafting of a false statement. He quit over concerns that obstruction of justice was an area that they were all wading into.

Do you think there`s any chance that Hope Hicks was onboard Air Force One as someone who`s already a cooperating witness in the Mueller investigation?

FIGLIUZZI: Wow. I think it`s a minimal chance, Nicolle. I`m not sure the strategy would be to insert someone into Air Force One who is going to go up against the president of the United States who is represented by counsel, probably highly unlikely.

So, we`ve got a woman here who`s got her whole career and life in front of her. Her judgment, so far, has been -- as far as we know, has been rather poor. And she`s got a choice to make. She can either establish a legacy of associating herself with a president who is likely to face serious, serious charges, if not impeachment or otherwise, or she can be her own person and do the right thing.

And we`re not seeing that happen yet. In fact, we`re seeing quite the opposite.

WALLACE: And a corroborating witness, Chuck, includes everyone who has gone in and cooperated and answered questions from special counsel Robert Mueller and all his investigators. So, that, at this point, does include a pretty wide group of current White House aides. We know the White House counsel Don McGahn is technically a cooperating witness. Sean Spicer went in. Josh Raffel, former spokesman to Jared -- I mean, there are a lot of people cooperating at witnesses in the Mueller probe.

Where do you put their risks at this point? Either being drawn in. We know that the president is now being investigated under this beefed up post-Enron witness tampering law and we know that he continues to be a subject of obstruction of justice questions.

Where do you think the interaction with all these witnesses ranks on a risk scale for the president?

ROSENBERG: Well, it makes it more risky for the witnesses. It makes it more risky for the president.

But let me just draw a distinction between a cooperating witness, Nicolle, and a truthful witness. I think Frank`s point is a very important one that I want to underscore it. I also agree that Hope Hicks is a very unlikely, you know, wired up or going in as a government agent, if you will, trying to elicit admissions from the president.

That doesn`t mean she`s not a truthful witness. And the more the president talks to her, the more the government and the Mueller team is going to want to know what he said.

All these people you just described are very likely truthful witnesses, right? They don`t want to risk their own, you know, fortune, their own liberty, right, their own freedom, to lie on behalf of another person. And so, as the president continues to reach out, he`s increasing his own risk, and as long as the people to whom he`s reaching out tell the truth when they`re questioned about it, they should be OK.

Of course, like Mr. Gates and Mr. Manafort, if they have committed underlying crimes, they have a separate problem.

WALLACE: Just like Mike Flynn, too, right?

ROSENBERG: That`s exactly right.

WALLACE: Frank Figliuzzi, former FBI assistant director for counterintelligence, Chuck Rosenberg, former U.S. attorney -- thank you both so much for spending some time with us.

Still ahead tonight, Democrats are trying to pull off something that has not been done since the 1980s, and they may just do it.

Stay with us. We`ll be right back.

(COMMERCIAL BREAK)

WALLACE: Tomorrow is an important election day in the great state of Ohio. Ohio does not usually hold major elections in August, but tomorrow is a special election to till fill an open seat in Congress. The seat sits in a reliably Republican district. Donald Trump won the Ohio 12th by more than 11 points.

In normal times, this seat would be a lock for Republicans. In normal times, we would probably not even be talking about this race on the national news. These, of course, are not normal times.

For months, the Democrat in this race, Danny O`Connor, has been chipping away at his opponent`s steadily lead in the polls. And now, on the eve of the election, he has erased that lead entirely. This is the latest poll out of the Ohio 12th. The Democrat running in this deep red pocket of Ohio is now beating his Republican opponent in the polls by one point.

Now, one point is, of course, not a slam dunk, it doesn`t guarantee Democrats a win, but it`s a heck of a lot closer than Democrats ever expected they would get in a district that has not sent a Democrat to Congress since the `80s. Turning the Ohio 12th into a tossup is the political equivalent of a double rainbow. And so now that they have Republicans sweating in their own backyard, now that they`re within reach of the political upset of the year in Ohio, what can this race tell us about the Democrats chances in the midterms this November and whether they have a shot at taking back the House?

Joining us now is Robert Costa, national political reporter with "The Washington Post."

Robert, it`s great to have you with us tonight.

Let me ask you, there`s a tendency in politics when you`re on the right side of a poll like that, to overread the national implications and when you`re on the wrong side, to downplay the national implications. Which side is making the more credible argument?

ROBERT COSTA, NATIONAL POLITICAL REPORTER, THE WASHINGTON POST: Well, Nicolle, you never want to read too much into an August campaign. People are on vacation. Voter turnout may not be as engaged as it`s going to be in the November midterm elections.

But President Trump waded into this race, appearing at a rally on Saturday in the Columbus area, and so, you have this in some respect being a referendum on President Trump because the Republican candidate has embraced the president and you have the Democrat, Danny O`Connor, running against the Democratic leadership in Washington, running very much like other candidates across the country this year. This is -- if not a microcosm for the country, at least a microcosm for the Midwest.

WALLACE: And does this race have Republicans -- I mean, I don`t know that it`s possible, and I`m sure that Republicans will say anything these days, but in the good old days when I was a Republican, we used to acknowledge publicly that you could not win the White House without winning Ohio.

Do people acknowledge how nerve-wracking it is to have a district like this in a part of a state that you must win to send a Republican to the White House that this is an ominous sign for the Republicans?

COSTA: They feel like they have an impossible choice. Talking to Republican consultants in and outside of Ohio, they say, you can`t win in some areas with President Trump because of the way he may anger women voters, college educated voters, suburban voters that may have given him a chance in 2016 but have since distanced themselves from President Trump, but you can`t win without President Trump, they say, because he enthuses the Republican base.

So, you see so many Republicans like the Senate Senator Troy Balderson trying to thread the needle, talk about the tax cut, not really talk about immigration in the same hard line way as President Trump with the "build the wall" rhetoric, but still talking about immigration, because they want the Trump voter to come out.

It`s going to be a balancing act that some Republicans can handle and some Republicans cannot this year. This is a major test to see if a normal mainstream state senator type like Balderson can pull it off.

WALLACE: So, the "Cook Political Report" has identified 60 house districts that are more Democratic than the Ohio 12th. Not a good sign for Republicans.

What are the Democrats doing right in those districts? Are they nationalizing the contest? Are they nationalizing the Republican Party? Or what are they doing that has that many races that are even more favorable to them looking so promising?

COSTA: When you listen to Danny O`Connor, the Democrat in Ohio, or you listen to other Democratic candidates like him who are, let`s say, between the ages of 30 and 50, projecting themselves as a new generation of the Democratic Party, they`re actually not talking about the headline headlines we`re writing about at "The Washington Post", the Russian investigation, many of President Trump`s controversies.

They`re trying, and sometimes not that well, but trying to talk about the economy, talk about health care, core Democratic issues, because they know if they have any shot at a real wave, not just a little bit of a ripple this November, they have to activate core Democratic voters. But they`re finding their own tensions from time to time, the leftward pole of the Democratic Party in some primaries.

But for the most part, Democratic candidates are running on health care and the economy, not so much talking about Bob Mueller and President Trump or really even immigration, as a major issue. They want to really just rouse those central Democratic issues.

WALLACE: And we heard Donald Trump talking about a red wave. I don`t hear any political consultants warning about that.

Robert Costa, "Washington Post" national political reporter, always grateful to have you and your insight.

COSTA: Thank you.

WALLACE: We have a lot more to get to tonight, including what we are still learning about a critical failure of the Trump administration. That story is next. Stay with us.

(COMMERCIAL BREAK)

WALLACE: It`s been 11 days since the court-ordered deadline for the Trump administration to reunite the children it forcibly took away from their parents at the southern border. And still, between 500 and 600 children remain separated tonight. The ACLU has been fighting in court to force the Trump administration to reunite all of these families.

If you want to know how the Trump administration is faring in that court battle, consider that late last week, the administration suggested in a court filing that the ACLU should actually take the lead in locating the remaining parents whom the government separated from their children and then lost.

On Friday, the federal judge overseeing the case took the government to task, noting that as of Friday, only 12 or 13 of the around 500 parents haven be located. The judge called that unacceptable. Even worse, it appeared that there`s no plan in place for the government to find the rest of the parents.

Quote: Many of these parents were removed from the country without their child.

All of this is the result of the government`s separation and then inability and failure to track and reunite. And the reality is that for every parent who is not located, there will be a permanently orphaned child, and that is 100 percent the responsibility of the administration.

Reporters who have been covering the chaos around the Trump administration`s zero tolerance immigrant policy have raised this specter before, of permanently separated families, of children forcibly taken from their parents and never returned. But it seems so much more real now, as the Trump administration, even under federal court order, fails to take even the most basic steps towards fixing this human rights catastrophe of their own creation.

Joining us now is Lee Gelernt, the ACLU attorney who has been arguing this case.

Thank you for joining us.

And help me understand this. They now welcome your help and your capacity and your expertise, but the federal government hasn`t turned over the files or the personal information about all the parents they deported without their children, is that right?

LEE GELERNT, ACLU ATTORNEY: That`s exactly right. I mean, so, what we said is, look, it the government`s responsibility, the court made clear, of course, it`s the government`s responsibility, but they tried to wash their hands and say, you do it.

Well, that`s not right. They need to take steps to find the parents. But we are more than willing to help, and we want to help, but how can we help without any information?

Now it turns out that the government has been sitting on potentially many, many phone numbers. We could have been calling these parents for the last weeks or months and they`re not turning over the information.

And they have -- the judge basically said, what are you doing? Get a plan, turn over information so the ACLU can try and help you. They can`t help you without the information, but you, the government, also need to take steps to find these parents.

It was stunning, the position the government took.

WALLACE: And how does it actually work? Because I`m guessing someone that comes into this country and is fleeing circumstances so dire that they bring their young children, in some cases, young infants, to this country - - I`m guessing they don`t leave with a forwarding address or a doorman building or a working cell phone. I mean, what is, under the best case scenario, how do you find a mom or a dad who left their infant or their young child in basically a detention center in America?

GELERNT: Right, that`s exactly right. It`s a difficult task. But there are pieces of information that we can use and so, for example, a lot of the parents have been talking to their children from abroad.

The government has those phone numbers. We`ve been begging for those phone numbers. They have not turned over those phone numbers.

There may be addresses, the government`s turned over addresses for some, they say they don`t have addresses for all, but even those addresses sometimes just say, here`s the city where they might be. So, we`re asking for any piece of information that might help us. For example, many of the parents are in Guatemala and speak an indigenous language. Certain languages are only spoken in certain regions.

We want to know -- and the government knows what language the individuals spoke when they came here. We want to know that. We want to know their consular ID numbers in those countries. Any piece of information, if they have a phone number for a close relative. We want to know that, anything to help us.

We`re organizing groups on the ground in Central America. But they can`t just simply drive around the country aimlessly. We need pieces of information.

And the government should also say what they`re going to do. For example, they could be running PSAs in these countries in print, on the radio, maybe television, saying if you were deported without your kid, call this hotline. The government`s come forward with no plan and is also telling us they`ll get us the information about the parents when they get it to us. That`s not good enough.

WALLACE: And this isn`t just a story about the cruelty of the Trump administration policy. There are now children who are going days upon days upon days without their parents. Are you worried about long-term impacts on these children?

GELERNT: You`re exactly right about that. The medical community as filed affidavits on our case and come out overwhelmingly to say, look, these children are going to be permanently, permanently traumatized and every day that goes by, it gets worse. When I talked to one of the families which finally been reunited, a 4 and 10-year-old boy have been, the mother told me that younger child -- a 4-year-old just keeps asking her, are they going to take me away again?

That`s exactly what we`re doing to these children. You create a sense of vulnerability in them that may never leave them. It`s horrible.

WALLACE: It is horrible.

Lee Gelernt, we`re grateful for the work you are doing, deputy director of the ACLU immigrants rights project, a lead attorney on this case. Thank you for spending time with us tonight.

GELERNT: Thank you.

WALLACE: Still ahead, I have something very important to tell regular viewers of this program, it`s good news. Stay with us.

(COMMERCIAL BREAK)

(VIDEO CLIP PLAYS)

WALLACE: Wow, that was the scene outside the White House gates tonight where Broadway actors past and present belted out show tunes to protest this president, capping off a busy news day that`s just the start of a very busy news week.

The biggest event of all is happening right here tomorrow night at 9:00 Eastern. My friend Rachel Maddow will be back from vacation. How did we all get through the Maddow 2018 summer break? I don`t know how I did. I`ll be back in my suite watching her in the anchor chair.

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

Good evening, Lawrence.

END

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END

Copy: Content and programming copyright 2018 MSNBC. ALL RIGHTS RESERVED. Copyright 2018 ASC Services II Media, LLC. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of ASC Services II Media, LLC. You may not alter or remove any trademark, copyright or other notice from copies of the content.