DHS transferred funds from FEMA to ICE. TRANSCRIPT: 09/11/2018. The Rachel Maddow Show

Guests: Jeff Merkley, Bob Woodward

Show: THE RACHEL MADDOW SHOW Date: September 11, 2018 Guest: Jeff Merkley, Bob Woodward

RACHEL MADDOW, MSNBC HOST: That was very nice.

Thanks to you at home for joining us this hour.

I`m very happy that you are here, particularly tonight. I`m going to be joined here on set in just a few minutes by the legendary journalist, Bob Woodward. You have probably heard about some of the things that are in his new book about the Trump White House, which is called ominously "Fear."

But that book actually came out today. It is finally available for you to read if your local bookstore is not sold out of it already, which they probably are. We`re going to get to ask Mr. Woodward all about it in just a few moments. Boy, do have I questions. Some very specific questions.

But we`re going to start tonight on America`s southeast coast, where evacuations are under way in advance of Hurricane Florence. There are mandatory evacuation orders in effect for coastal areas and islands in North Carolina, and South Carolina and Virginia. Officials expect well over a million people to be under mandatory evacuation orders and out of the way ahead of this storm.

People who are not evacuating are trying to prepare, people stocking up on gas and food and water and sandbags and boarding up whatever they can board up. The National Weather Service has issued hurricane warnings and storm surge warnings for the Carolinas. Florence is a category 4 hurricane, which is huge. It`s got winds of 140 miles an hour.

Forecasters say it could very well strengthen beyond that tonight and into tomorrow. It is ultimately expected to weaken at least somewhat before it hits the United States proper, but it`s still expected to be at least a cat 3 when it makes landfall some time Thursday night. So, forecasters warning of damaging winds and torrential rainfall for the Carolinas, possibly record-setting storm surge. We`re talking about heavy rain and flooding both inland and at the coast that could persist into the weekend in the Carolinas and Virginia.

One possibility that is worrying forecasters is that Florence might stall once it hits the coast. It may just start to hold still. That could either batter the coast itself and cause enormous coastal damage or it could stall further inland and dump epic amounts of rain on areas that are already saturated from recent rainfall, which of course could lead to dangerous flooding and things like landslides.

Hurricane making landfall in the U.S. as a cat 4 is very rare. A hurricane that Florence is drawing the closest comparisons to is Hugo, Hurricane Hugo, which hit the Carolinas in September 1989 with high winds and a massive storm surge. If you`re old enough to remember that, you definitely remember that.

(BEGIN VIDEO CLIP)

TOM BROKAW, NBC NEWS ANCHOR: Good evening. Hurricane Hugo is a monster tonight. Today, it grew rapidly from a category 2 to a category 4 hurricane. It now has winds of 135 miles an hour. That`s very dangerous, especially since it is expected to bring very high seas, a storm surge.

This is the latest satellite photo, and as you can see, Hugo is rapidly approaching landfall. The first winds and rain from Hugo have already arrived. This is the scene tonight in Charleston. The historic city hard by the sea is hunkered down, getting ready for the Hugo invasion.

REPORTER: The barrier islands of South Carolina were no barrier to Hurricane Hugo. These tiny bits of land are exposed to the ocean and were the first hit by the storm. Hugo came ashore here at high tide with 135- mile-per-hour winds and slammed a wall of water 20 feet high across the beach and on to beachfront property.

An entire marina, yachts, docks and all were pushed aside as if by some giant hand, stacking boats on each other like toys, as many as six high. A massive swing bridge linking one of the islands to the mainland was manhandled by Hugo, a testimony to the incredible power of the hurricane.

REPORTER: Historic Charleston is hurting. Officials have closed the hard- hit city to outsiders and called a dusk-to-dawn curfew. This after storm damage the mayor characterizes as unprecedented in local memory.

Hundreds of vehicles smashed by trees. Boats lifted out of the water and deposited on streets. The roof blown off city hall. Workmen rushing to repair it. Communications with nearby islands cut off.

UNIDENTIFIED FEMALE: I`ve been through storms, but not like this one.

UNIDENTIFIED MALE: I was scared to death during this hurricane.

(END VIDEO CLIP)

MADDOW: Hurricane Hugo in 1989 killed dozens of Americans, cost billions of dollars in damage.

Today at a hurricane briefing at the White House, the director of FEMA called Hurricane Florence, the one that is bearing down on the Carolinas right now, quote, very similar to Hurricane Hugo, as FEMA director urged residents in the storm`s path to listen to local authorities and evacuate if you`re told to.

Hugo is not the most recent category 4 hurricane to hit this country, though. The last category 4 hurricane to hit this country made landfall less than a year ago in Puerto Rico. Hurricane Maria roared into Puerto Rico with winds over 150 miles an hour, demolished thousands and thousands of wood frame homes and building in Puerto Rico, left the island reeling with flash floods and mudslides.

It plunged all 3.5 million U.S. citizens on Puerto Rico into total darkness. The island`s entire electric grid failed. Residents started rituals of standing in line for hours to try to get gas or diesel for power generates. Cell phone service collapsed across the island as Maria took out cell phone towers.

People also began waiting in lines for water, including people setting up makeshift water stations at streams and springs that opened up in landslides after the storm, which led to all kinds of health problems down the line, right? Much of the running water, houses that still had it, their water was contaminated anyway. People did what they had to do.

A week after Maria hit, the U.S. Defense Department said nearly half the population of Puerto Rico still didn`t have drinking water. You cannot live without drinking water. There was a deadly outbreak of the bacteria Leptospirosis on the island from contaminated water and soil. The Lepto outbreak alone may have been responsible for dozen of deaths.

Most of Puerto Rico`s hospitals did not have enough fuel to keep their generators running. People in the intensive care unit started dying. The U.S. government finally dispatched a medical ship to the island, but it didn`t arrive until nearly two weeks after Maria hit, and it never ran at anything close to capacity. Despite the need on the island, they never got people on to the ship.

A week after the hurricane, thousands of containers of supplies were sitting at port because nobody bothered to organize drivers to truck those supplies out of the ports and out to needy communities all over the island, despite the supposed massive federal response and coordinating effort run by the Trump administration. There was also no clear effort to clear the roads so those trucks could get through if they did have drivers for them. Reporters on the ground describe an air conditioned convention center where officials from FEMA and other government agencies were milling around, unsure what to do while communities in the interior of the island remained just completely cut off, literally out of food and water indefinitely.

Puerto Rico`s electric power authority claimed to have finally fully restored electricity just last month, although some residents say even now it`s still not completely restored. And after nearly a year of holding the official death toll for Maria at just 64, two weeks ago, following a study commissioned by the island`s government, Puerto Rico finally raised the official death toll attributed to the storm to 2,975. That puts it almost exactly at the death toll of Americans killed 17 years ago today in the attacks of 9/11.

And tonight, BuzzFeed news reports that of more than 2,000 Puerto Ricans who applied to FEMA for funeral assistance for loved ones who died as a result of Maria, FEMA approved just 75 of those more than 2,000 funeral assistance applications. In a letter to Senator Elizabeth Warren, FEMA Director Brock Long wrote, quote, as of July 30th, his agency had received 2,431 requests for funeral assistance for Puerto Ricans related to Hurricane Maria. FEMA approved just 75 of those requests, meaning 97 percent were either rejected or haven`t received a decision yet almost a year after Maria hit the island.

FEMA`s funeral assistance is intended to help people who lost loved ones in disaster situations, to help them pay for funeral costs including caskets, mortuary service, burial plots, and cremations. Although FEMA Director Brock Long did not give a specific reason in his letter for the rejections, he pointed to FEMA requirements for funeral assistance. To qualify, Puerto Ricans had to provide a death certificate or letter from a government official. That, quote, clearly indicates the death was attributed to the emergency or disaster either indirectly or directly.

But getting that information was of course impossible for many families because as the Puerto Rican government recently admitted, officials until now weren`t correctly counting hurricane-related deaths.

Today in the Oval Office, as his FEMA director briefed him on Hurricane Florence currently barreling towards the United States, President Trump was asked by a reporter how he will apply the lessons he took from Puerto Rico. The president replied, quote, I think Puerto Rico was incredibly successful. I actually think it was one of the best jobs that`s ever been done. I think that Puerto Rico was an incredible unsung success.

Nearly 3,000 American citizens died.

And now on that front, we have some breaking news. Tonight, Senator Jeff Merkley of Oregon has gotten his hands on a document that has never been seen publicly before which appears to show that Donald Trump`s Department of Homeland Security requested to transfer about $10 million out of the budget for FEMA this year and into the coffers of ICE to support ICE`s detention and deportation programs for immigrants.

Senator Merkley`s office believes the transfer of these funds happened this summer just in time for hurricane season. Senator Merkley will join us live in just a minute. But I want to show you the document that his office has obtained. I have it here. I think we can put it on screen. Thank you.

It`s titled, as you can see, Department of Homeland Security fiscal year 2018, transfer and reprogramming notifications. In other words, this is the whole list of money that Homeland Security took from one agency and moved to another.

And the practice of transferring monies between agency, that is not unusual in itself, but it is unusual to see in one of these documents a whole column full of money being deleted from the FEMA budget less than a year after Hurricane Maria on the cusp of this year`s hurricane season, apparently to bolster the government`s ability to lock up and deport immigrants. Nearly $10 million taken out of FEMA, almost all of it going to ICE in order to fund more detention beds and ICE`s transportation and removal program.

Again, this is all according to this budget document obtained by Senator Jeff Merkley`s office. Senator Merkley is on the Appropriations Committee. He is not on the Homeland Security Subcommittee there, so he doesn`t necessarily have direct oversight here, but Senator Merkley`s office tells us tonight they believe this document is authentic. They believe these budget transfers out of FEMA instead to ICE, that these budget transfers they believe did happen this summer.

Just before air time, the Department of Homeland Security, in our efforts to independently verify this document, we did finally get a response to them, and they all but confirmed that Senator Merkley is right here. Just a few moments ago, Department of Homeland Security just confirmed to us that these monetary transfers out of the FEMA budget were made.

A DHS spokesperson didn`t dispute the authenticity of the document to us, and instead told us that the money didn`t come from any of our disaster response and recovery efforts. But again, it appears that it did come from FEMA. We couldn`t get any elaboration on that. The spokesperson said that`s all they could tell us on such short notice, but we`re happy to at least have that.

Joining us now is Senator Jeff Merkley, Democrat of Oregon. He is a member of the Appropriations Committee.

Senator, thank you for joining us tonight.

SEN. JEFF MERKLEY (D), OREGON: You bet, Rachel.

MADDOW: Thank you for letting us know you received this document. We`ve been doing our own due diligence, trying to sort out what this means.

What`s your understanding of what this means, bottom line?

MERKLEY: Well, it means that just as hurricane season is starting, because it generally starts June 1st, the administration is working hard to find funds for additional detention camps, and, of course, this is all part of the child separation policy. And that`s how this information came into my hands, because of my work on this issue of trying to stop the child separations.

But in fact, so $10 million comes out of FEMA when we`re facing a hurricane season, knowing what happened last year, and then look what we`ve had since, a hurricane just barely missed Hawaii. A tropical storm that almost became a hurricane hit Mississippi, and now we have this Hurricane Florence bearing down on the Carolinas. I find it extraordinary.

And by the way, Rachel, the chart you put up is the same chart I have in my hand right here. It says that money came from response and recovery right on it. So, I would dispute the statement that this has no bearing on addressing the challenges from hurricanes.

MADDOW: I am looking at the same document as you said that you are, and you`re right. The list of -- the list of areas from which it comes -- from which the money comes includes response and recovery. And then response and recovery, recovery and response from recovery response, also preparedness and protection, mission support, mitigation, regional operations, all areas that FEMA has apparently partially defunded in order to instead send the money to ICE.

Now, as you mentioned, Senator, this document and your understanding about what this means comes in part from your work on the family separation policy. You did groundbreaking work exposing that to the public. You were the first person to come out and say that you`d been able to get into one of these facilities and seen kids in cages.

Is it your understanding that the Trump administration`s policy to start separating families, to start taking kids away from their parents, to start that new effort that they did this year, that that might have necessitated this increase in funds because they didn`t otherwise get that funded by Congress?

MERKLEY: Yes, absolutely. It seems very connected because it was in a speech in May 7th that Jeff Sessions announced this new policy. It actually started a little bit earlier, a month earlier. But clearly, they were saying, if we`re going to start arresting as a criminal matter and detaining people, we need to have much bigger detention camps. Oh, well, we better -- we better get some more money into that.

And now, the administration has just put out a draft regulation in which they intend to establish internment camps so that to lock up children behind barbed wire. So, we`re going from the horrendous policy of ripping children out of their parents` arms, and of course, we`re still trying to reunify all those families, to a new strategy of building internment camps that would be funded through the same account that these funds would go through ICE.

MADDOEW: Internment camps for kids who have been accused of crimes? Of kids who are in trouble in the judicial system because of some criminal behavior, or simply kids who are immigrants?

MERKLEY: Kids who simply are part of a family. So this is family internment camps. And we haven`t done anything like that since World War II.

It`s absolutely comes from a dark and evil place in the heart of this administration. They`re going from one strategy of inflicting trauma on children to another a new strategy that they`re trying to implement to inflict trauma on children, all to send, as Jeff Sessions says, a message of deterrence to discourage people who are fleeing persecution from ever considering arriving on the shores of the United States of America.

MADDOW: Senator, let me ask you one sort of technical question here, but one that may be important to the future of what happens next now that you have exposed this document. And again, what this document indicates and what homeland security is confirming to us tonight is that nearly $10 million has been taken out of the budget of FEMA right in advance of hurricane season, and instead transferred to ICE for who appears to be detention programs for immigrants.

Are there potential legal issues here? I mean, I know there is some flexibility in budgeting and that`s sort of baked into the way the government runs. But is there a legal problem here of Congress specifically appropriated Homeland Security funds instructing the administration on how to spend money in this area, and then the administration ignored those instructions and decided to spend this money on something else?

MERKLEY: I believe that this movement of funds is within the flexibility the administration has. They have to do a report to Congress. And if the amount is over $5 million, they have to notify the chair of the Appropriations Subcommittee, in this case the Homeland Security Subcommittee. And I believe that the committee chair has to sign off, though I`m not 100 percent clear on that.

But essentially, this is the notification document that would have come to the Appropriations Committee, specifically, to the chair of Homeland Security. And that apparently was done. I think this is probably within the law.

MADDOW: Senator Jeff Merkley, a member of the Appropriations Committee -- thank you for your time. Thank you for sharing this document with us so we could tell people this is happening.

MERKLEY: Thank you so much, Rachel.

MADDOW: We would not have known that without you, sir. Thank you very much.

MERKLEY: You`re welcome.

MADDOW: All right. Again, that breaking news tonight. Senator Jeff Merkley obtaining a document which he shared with us which we did our own due diligence on and the Department of Homeland Security has now confirmed its authenticity as a category 4 hurricane is bearing down on the Carolinas and the Virginia coast as the president today is bragging about the A-plus job he did in Puerto Rico just under a year ago with the hurricane response effort that resulted in nearly 3,000 Americans dead.

We now have evidence that in advance of hurricane season this summer, as hurricane season was getting ready to start, the Trump administration does appear to have transferred $10 million out of FEMA to instead fund detention facilities for immigrants on the border. Again, the statement that we got from homeland security tonight was that this money that was taken out of FEMA by the Trump administration was not out of response and recovery operations. The document that we have obtained appears to indicate that response and recovery in fact were among the line items that got robbed in order to instead lock up immigrants.

All right. We`ve got a big show tonight. As I mentioned, Bob Woodward is here live in studio for an interview. His book "Fear", about the Trump White House, is out today.

We`ll be right back with him right after this.

(COMMERCIAL BREAK)

MADDOW: Bob Woodward is here for the interview tonight. His new book is I think intentionally ominously called "Fear: Trump in the White House." You`ve undoubtedly heard a lot about it.

The excerpts started leaking last week. The book is officially out today. There is a whole bunch of news in it.

But part of the reason I want to talk to Mr. Woodward about the book, instead of just marinating in it like I have been for the last few days is because in my reading of this book, a lot of the holy guacamole, that seems important moments, it seems to me they are raised. They are (AUDIO GAP) but then (AUDIO GAP) they go.

And they`re sort of left for you to ponder. And that`s not at all a criticism of Mr. Woodward or the book. What it means I think is that this is meant to be a jumping off point for more (AUDIO GAP). And frankly, for calls for explanation from people who are quoted in the book in relation to these provocative but open-ended assertions.

Let me give you an example. This is from page 230 of the book. Quote, on July 25th -- this is 2017, last year -- the president again berated national security adviser H.R. McMaster. He had no interest in allies, Trump said. He didn`t want any troops in South Korea, even when reminded about the differential between the seven seconds it would take to detect a North Korean ICBM launch from there as opposed to the 15 minutes it would take to detect such a launch from Alaska.

On the colonnade outside the Oval Office, McMaster spoke with Gary Cohn, the economic adviser, and rob porter, the White House staff secretary. McMaster said that at 6:03 a.m., Trump had tweeted Ukrainian efforts to sabotage Trump campaign, quietly working to boost Clinton. So where is the investigation, Attorney General?

Quote: It was clearly Russian propaganda, McMaster said. He and the National Security Council and intelligence experts had concluded that, but the president had picked it up and shot it out. And then the next line is, quote, McMaster said he wasn`t sure how long he could stay.

So, page 230 of the book, we learn that the National Security Council and the national security adviser to the president concluded last summer that the president had somehow, quote, picked up Russian government propaganda and started tweeting to it the American people. The national security adviser knew about it. He told for some reason the White House economic adviser and the White House staff secretary, and he told them that it was confirmed both by him and his shop and by intelligence experts that the president had obtained and was distributing Russian government propaganda.

Oh! That seems like a story. I would like to know more. Were there consequences of that? How did the National Security Council handle that? How did the president get the propaganda?

Was he -- I have -- here`s another one. This is from chapter 10.

Quote, on January 26th, 2017, so right after the inauguration, Deputy Attorney General Sally Yates had come to White House. She told White House counsel Don McGahn that intercepts showed that Mike Flynn, the first national security adviser, had not been truthful about contacts with Russian and was worried that Flynn could be a blackmail target.

White House chief of staff Reince Priebus calculated that Mike Flynn had denied discussing the sanctions with the Russians at least 10 times. Priebus tracked down White House counsel Don McGahn. Priebus asked McGahn if they could get the transcripts of the conversations that Flynn had had with the Russian ambassador.

Yes, McGahn said, of course. Soon he had the highly classified transcripts of three communications between Flynn and Ambassador Kislyak that the FBI had intercepted during routine monitoring of the Russian ambassador. McGahn and Priebus were joined by Vice President Mike Pence in the Situation Room to review those transcripts. Pence had backed Flynn`s denial publicly.

In all three transcripts, Flynn and the ambassador discussed the sanctions. In the last call, initiated by Ambassador Kislyak, the ambassador thanked Mike Flynn for his advice on the sanctions and said the Russians would follow that advice. And Woodward continues: That nailed the story. And it explained Putin`s curiously passive response to the sanctions.

Normally, the Russian president would be expected to retaliate, expelling some Americans from Russia. But the day after Obama announced the sanctions during the presidential transition, Putin announced that he would not retaliate. President-elect Trump praised Putin, tweeting: Great move on delay by Vladimir Putin. I always knew he was very smart.

And then Woodward says this: The sequence suggested that Trump might have known of Flynn`s role, but it was unclear what Flynn had said to the president about his conversations with Kislyak.

So, new detailed reporting on who, what, where, and when in terms of figuring out that, yes, the national security adviser Mike Flynn was having conversations with the Russian government that he was lying to everybody about, right? Got it. The vice president personally going down to the Situation Room to review the transcripts of the intercepted phone calls between Kislyak and Flynn? OK, that`s interesting. The vice president`s assertions about what he knew about Mike Flynn and when on Flynn`s calls to Russia, on Flynn`s discussions about sanctions with Russia, on Flynn`s work as a foreign agent during the campaign, on Flynn bringing his son on board during the Trump transition, on a lot of different things between Pence and Flynn, it has all been super tenuous in terms of the vice president`s knowledge and his public statements.

So, placing the vice president personally in the Situation Room, personally analyzing and reading Flynn`s transcribed calls with the Russians, that`s fascinating. But, hey, this is dangling out there as a thread to pull now. I mean, Woodward is indicating here that the president may well have known about Flynn talking to the Russians specifically about sanctions at the time he did it, which would put the president right in the middle of what Flynn ended up pleading guilty to as a felony criminal charge for which he is now awaiting sentencing.

That seems like a story, right? Especially since the White House waited 18 days to fire Flynn after the Justice Department warned the White House about those conversations he was having with the Russians and Flynn potentially being compromised by the Russian government. I mean, if the president knew all along all about those conversations that Flynn had had and that Flynn was lying to everyone else about -- well, like I say, that`s a story. Tell me more.

Here`s just one more. There`s been a bunch of attention so far, including here on this show, to the very first excerpts of the book that were leaked last week, which included this amazing line from the president`s previous Russia lawyer John Dowd. He is quoted in Woodward`s new book saying, quote, I wish I could persuade you, talking to the president. Quote, don`t testify. It`s either that or an orange jumpsuit.

You have seen that quote everywhere. I know John Dowd today put out a statement today saying I never said orange jumpsuit. But here`s what comes right before that in the book, literally on the same page. So, this is still, still John Dowd. There is a lot of John Dowd in the book, page after page after page of direct quotes from John Dowd.

But here is how he reportedly quit being Donald Trump`s Russia lawyer. And herein another story I want to know about. All right. Hear from the book.

Quote: Once more on Air Force One, Trump called his lawyer. Are you happy?, the president asked. No, Dowd said, I`m not happy. Mr. President, I feel like I failed. I failed as your lawyer.

I know, that John. I know you`re frustrated, says the president. Dowd responds, I am. I don`t mind telling you, I regret the day I ever recommended Ty Cobb.

Now, just brief refresher here, John Dowd, the guy who has lots and lots and lots of real estate in the Woodward book, he is the Trump Russia lawyer on the left. Ty Cobb is the Trump Russia lawyer on the right, the one with the amazing mustache. Both men are now gone from the White House. Both had a long time in the White House working on the Russia investigation.

One of the main points of contention and drama in the John Dowd parts of this book is that John Dowd doesn`t want Trump to testify to Mueller, and Cobb is portrayed as wanting that and he, in fact, says the president should and will do that. So, from page 353 of the book, Dowd says, quote, I regret the day I ever recommended Ty Cobb, and I can`t believe that he undermined me. Well, says president Trump, I asked him to speak out and show that the president was not afraid to testify.

John Dowd replies, he should have declined that request from you, Mr. President. He is a government employee. And by the way, they can call him as a witness. He has no privilege with you, meaning no attorney-client privilege in his conversations with the president. To which the president gives this reply: Jesus, Trump said, sounding worried. Quote, I`ve talked a lot with him.

The president worried to learn very late in the game, this is March of this year apparently, that the Russia lawyer he has talked to a lot about the scandal in the White House is someone who can be called as a witness by prosecutors. If Woodward`s reporting here is correct and the president wasn`t kidding, that implies that the president really didn`t have any idea that was true the whole time Ty Cobb was working in the White House, running the White House response to the Mueller investigation.

He didn`t know his conversations with Ty Cobb weren`t privileged? He didn`t know that Ty Cobb could be a witness against him? Really, really, really? Really? That is the story. And I could go on.

That`s kind of -- that`s what this book is like. Amazon had to delay its shipments of Bob Woodward`s new book today on its publication date because they sold out instantly at Amazon. His publishers upped the initial print run to a million copies, and still some major sellers are already out day one.

Bob Woodward joins us here live, next.

(COMMERCIAL BREAK)

MADDOW: Joining us now is the author of "Fear: Trump in the White House," one of his 19 books, associate editor at "The Washington Post," legendary American journalist, Bob Woodward.

Mr. Woodward, thank you for being with us.

BOB WOODWARD, AUTHOR, "FEAR: TRUMP IN THE WHITE HOUSE": Thank you.

MADDOW: I know you have every choice about where to be, thanks for being here.

WOODWARD: Thank you for inviting me.

MADDOW: Let me ask you first about the title of the book.

WOODWARD: Yes.

MADDOW: I didn`t sort of cue to the title until I read the book, and then I realized oh, there is a reason this word is on the cover. And it first comes up in page 175. Trump gave some private advice to a friend who had acknowledged some bad behavior towards women.

Real power is fear. It`s all about strength. Never show weakness. You`ve always got to be strong.

You`re writing about the president`s view of power here.

WOODWARD: Never admit. Never acknowledge.

MADDOW: Yes.

He thinks that if you are powerful, evidence for that is that people are afraid of you, or you have to scare people in order to get power?

WOODWARD: Well, I think it`s a tactic, but I think it`s also a mindset, isn`t it? I mean, he told Bob Costa and myself two and a half years ago when we`re discussing power, which, of course, that`s what the presidency is about, isn`t it? And what`s real power?

And Obama said some things about real power being not using violence. And we asked Trump about that, and he finally said, well, real power is -- I hate to use the word. I don`t like to use the word, fear.

And this was in Trump Tower in his -- I`m sorry, Trump, in the hotel he had on Pennsylvania Avenue. It was undergoing renovation at the time. So, it`s a very kind of rough set.

And we get to this moment. It was almost Shakespearean. It was almost like him turning to the audience as an aside. This is what it`s really about.

MADDOW: My sense --

WOODWARD: Yes.

MADDOW: -- of your perspective on Trump, you talked to hundreds of sources, dozens of people who have worked closely with the president is that fear also expresses some trepidation that you see in the people who have been working closely with him, and maybe you even came to yourself. Fear as in there is something to be afraid of here in terms of this man and the presidency.

WOODWARD: Well, my feeling is people need to wake up and realize that this is the behind-the-scenes story. And you see -- I call it a war on truth, that whatever happens, well, let`s deny it. And Trump`s actions to not protect the national security when he should, to have meetings in the National Security Council, and you don`t get a window into that that often --

MADDOW: Uh-huh.

WOODWARD: -- where Trump is concerned about all the expense of deploying troops in South Korea or in Europe, and General -- Secretary of Defense Mattis is saying to him, you know, this is the best bargain we have. These troops are here to protect us, not South Koreans or Europeans. And then Trump persists.

And finally, Mattis says -- I think one of the most bracing lines in the book, he says, we`re doing this to prevent World War III. Now, that`s number one job for the president. I`ve talked and I`ve written jobs about eight presidents before this, and they all kind of get it. They have to make sure we don`t have World War III.

And here, the secretary of defense has to say this to the president? I mean, can you imagine Dick Cheney when he was defense secretary having to tell George Bush Sr. Oh, we`re doing all this to prevent World War III.

MADDOW: I mean, to break that down, and you talk about it as bracing, and you`ve seen a lot.

WOODWARD: Yes.

MADDOW: It matters to me.

But the president actually questions about troop deployments and expense and whether we`re getting bang for our buck and whether it`s the right use of our national security. Those questions seemed right. The thing that`s absurd --

WOODWARD: No, no, but he --

MADDOW: -- is he doesn`t understand the answer when it`s given to him. They talk about his inability to learn. So, it`s not just that he just doesn`t automatically come into the job knowing why we got troops in South Korea, is that once he is told, he still doesn`t get it.

WOODWARD: Yes, that`s part of it. But he also says oh, we could be so rich if we were so smart. And we`re being played by -- we`re being played as suckers by NATO and all these countries who are having us foot the bill. And, of course, the military is saying as in one scene, it is Secretary of State Tillerson back last year saying -- telling the president this -- what we`ve done, that`s why we`ve had 70 years of peace.

And the president`s angry about the cost and angry about this old order that he inherited. You know, he is a disrupter and so forth. But you can`t go into the house and break all the furniture and turn it over if you`re going to have to live there.

MADDOW: I feel like as a citizen, I am less worried about a president who is wrong than I am worried about a president who is sort of wrong in the head. And I don`t mean to say that in a snarky way. The president having -- being ignorant about certain things or having bad policy ideas or being unable to learn things quickly is worrying, that you would want somebody more capable in the job.

But there are suggestions that it`s worse than that. At one point you say the president is emotionally overwrought, mercurial and unpredictable.

I worry in particular about the emotionally overwrought part of it. Do you mean by that he is out of control?

WOODWARD: No. I mean by when confronted with evidence. For instance, there is a scene in the book where he starts talking about the World Trade Organization, which is an organization that actually gives us great leverage if there is unfair trade practice in the world. And he said this is the worst organization in the world and the advisers who are experts in there say no. And Trump says, well, we lose our cases there.

And they bring out the document, no, we win 85.7 percent of the cases, not just 85 percent, but 85.7. And Trump says no, that`s not true.

And they said bring in your trade representative. Call him. Ask him. Trump, I don`t want to. I won`t do that.

He closes his mind to the information that makes it possible for the president to weigh arguments and data. And there is one point where he is literally saying -- they`re saying where did you get these ideas? I`ve had them for 30 years.

MADDOW: Yes.

WOODWARD: That`s it. You`re wrong. That`s it.

Now, that`s got to -- if you are the most ardent Trump supporter, that has got to give you pause that the White House and the government are being managed this way.

One of the lessons that I have learned and seen in writing about eight presidents, now nine, 20 percent of the presidents we`ve had in this country is that you have to learn. You have to grow. You can`t just kind of say, well, that`s the way it is, even though I have this power.

Presidents -- I think the power of the presidency has grown each president I`ve written about from Nixon to Trump. And presidents can do wonderful things, and they can do disastrous things. The process really matters.

It finally gets to a point in the book where General Kelly, whose the chief of staff, sits down with Rob Porter who is the staff secretary and says we need to write-up rules and we need to tell the president that if he makes one of these seat-of-the-pants decisions, it`s not final. We have to sit down and have a process where the president will actually literally sign a document, a decision memo.

And they say, it`s not final. You can`t run around and do these things. There`s got to be a process. You`ve got to hear arguments.

And time and time again -- I mean, sometimes he does. But time and time again, he doesn`t, and he just decides, oh, we`re going to impose steel tariffs when everyone has argued, don`t do this. And he brings the steel executives to the White House early. And General Kelly doesn`t even know that they`re coming to the White House, and he announces steel tariffs.

And there is a lot of economic data and arguments here in the book, but the Pentagon and the State Department are saying no, no, we don`t need steel tariffs. The Pentagon literally tells the president, look, we have -- we use in the Pentagon for the military 1/2 of 1 percent of the steel in this country. There will be plenty. We are not going run out of steel.

There`s not a national security argument for it. But Trump`s got it in his head that tariffs are good things and that you can win this tariff war.

MADDOW: We`ll be right back with Bob Woodward who is the author of "Fear: Trump in the White House" which is already selling out at your local bookstore. We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: I`m here once again with Bob Woodward who`s the author of "Fear: Trump in the White House."

Mr. Woodward, thank you again for being here.

WOODWARD: Thank you.

MADDOW: You have a lot of reporting in the book how they tried to prepare the president for questions in the Mueller investigation about the Mike Flynn firing.

WOODWARD: Yes.

MADDOW: Was it clear to you from your reporting for the book why they waited 18 days after getting that warning about Flynn from the Justice Department?

WOODWARD: I think some things -- sometimes decisions are not made, but they did fire him.

MADDOW: Ultimately.

WOODWARD: Yes. And he did plead guilty and is a witness.

No one that I`ve been able to find can explain exactly what happened. There is what`s called the Mike Flynn mystery in the investigative reporting world. And, you know, so, we presumably at some point will see.

But I was saying, I thought at the beginning you were talking about things and you wanted something more --

MADDOW: I wanted something more. You raised the prospect that the president knew when Flynn was talking to the Russians that he was talking to the Russians and what he was talking to them about. You raise that as a suggestion.

WOODWARD: Yes, yes.

MADDOW: Do you believe that happened? The president knew?

WOODWARD: I don`t know the answer, but I think when you don`t know the answer, you have to pull back and kind of say, OK, here`s the data I`ve been able to accumulate, and there is detail, chapter and verse in the book, of actions people took, snatching papers from his desk, trying to keep him from signing an order getting out of the North American Free Trade Agreement, which is one of the vital things that goes back to the Clinton administration.

I wrote about it in one of the books I did on Clinton and it has helped our economy, it`s helped the Mexican economy, the Canadian economy. And we`re going to just tear it up? And so people say, let`s stop him.

MADDOW: One of the -- one small recurring theme I noticed in the book -- you didn`t devote a chapter to it, but it came up in a bunch of different places in the book was sensitivity around the issue of Jared Kushner`s finances.

WOODWARD: Yes.

MADDOW: You said that Steve Bannon had speculated that that`s upset over that is why the president fired James Comey. He said that Ivanka had talked to her father about -- with concerns about the FBI. He said that Reince Priebus had told the president to fire Jared because of concerns over his finances. It comes on a number --

(CROSSTALK)

WOODWARD: Or let him go. I think he wasn`t going to fire the son-in-law.

MADDOW: He said the reason there are nepotism laws.

WOODWARD: Yes.

MADDOW: You mentioned that when John Dowd was asking hard specific questions of the Mueller team about whether they were investigating the president`s finances. You say, quote, Dowd was careful not to stray to ask about possible investigations of Jared`s finances. It seems like it`s a point of sensitivity.

WOODWARD: It clearly is, not surprisingly so. But I think that as we now know, Jared Kushner got his top secret clearance back, and that is an important event. They almost never, to my understanding, will give out top secret clearance to somebody who is under serious investigation. So, that suggests that that may not be one of the investigative trails that lead somewhere.

MADDOW: I love following you down these paths. This is so great.

WOODWARD: What (ph), there are so many paths.

MADDOW: I know.

WOODWARD: I`ve never -- I`ve done this for 47 years. I`ve never seen so many paths and I`ve not -- and I`ve never seen so, so much of a -- well, as I say, I want to repeat myself. There is a war on truth, and that -- you know, we have a contest in this country, not just a political one, but a moral one, a religious one about what`s true, right?

And people debate it and argue very intensely about it. And that`s kind of the life force of democracy, isn`t it?

MADDOW: Bob Woodward is the author of "Fear: Trump in the White House" -- thank you for your time, sir.

WOODWARD: Thank you. Thank you.

MADDOW: Congratulations on this. Thanks.

WOODWARD: Thanks.

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

(COMMERCIAL BREAK)

MADDOW: I`m sorry I ran through all the commercials.

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

Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL" while I go talk to people who are supposed to have this company making money.

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

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