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New York Times publishes investigation. TRANSCRIPT: 10/2/2018, The Rachel Maddow Show.

Guests: Susanne Craig, Frank Montoya

Show: THE RACHEL MADDOW SHOW Date: October 2, 2018 Guest: Susanne Craig, Frank Montoya

RACHEL MADDOW, MSNBC HOST: Good evening, Chris. Thanks, my friend. Much appreciated.

And thanks to you at home for joining us this hour. Happy to have you here.

We`re watching a few different stories develop tonight. "The Wall Street Journal" and the "New York Times" and now NBC News all reporting that the expanded FBI background investigation of Trump Supreme Court nominee Brett Kavanaugh, that could be wrapped up and finished as soon as tomorrow or possibly even tonight.

The Senate, of course, had given the FBI a deadline of Friday this week to complete that investigation, but amid lots of contradictory and sort of opaque news reports that don`t quite tell us exactly what the FBI is allowed to look into as part of this investigation, there are now these multiple reports tonight that the FBI is going to wrap up early.

Attorneys for Dr. Christine Blasey Ford say that the FBI has not spoken with her client at all as part of the Kavanaugh background investigation, not this week and not ever.

An attorney for Deborah Ramirez, who made another allegation about Brett Kavanaugh that dated to his time as an undergraduate at Yale, her attorney says that Deborah Ramirez herself did meet with the FBI and she also gave the FBI agents who interviewed her a list of other witnesses who could corroborate elements of her story. According to Ramirez`s attorney, though, nothing ever seems to have become of that list. According to her attorney, quote, they are not aware of the FBI ever affirmatively reaching out to any of those witnesses, not to any of the names that were given to them on that list.

So, that raises real questions as to the scope of this FBI review. It renews questions about whether or not the FBI has been operating under tight constraints for this investigation set by the White House or by the White House counsel`s office, restraints on what they were allowed to look and who they were allowed to talk to. Again, there`s been conflicting, contradictory reports on this, and we do not have a clear window on those restraints at all.

There are also open questions now about whether or not we the public will be allowed to see any of the report prepared by the FBI as a result of this fairly quick investigation, whether that report is ready tonight or tomorrow or by the end of the week we don`t know if any of it will be made public.

Senate Majority Leader Mitch McConnell said today that only senators will be allowed to see the FBI report. That said, other senators, including other Republicans in leadership have said there should be some public release of the report. So as I say, lots of unanswered questions.

We are expecting that story about the Kavanaugh background investigation to develop further, perhaps while we are on the air tonight. We`re keeping an eye on that. We`ll also have more on that coming up later on in the show.

We`re also looking at a couple of developing stories related to the Robert Mueller investigation. has had two interesting scoops about the Mueller investigation just in the last 24 hours. They reported tonight that two prosecutors from Mueller`s team, Brandon Van Grack, my favorite name in the whole scandal, Brandon Van Grack, veteran counterespionage prosecutor and also Kyle Freeny, who is a money laundering expert at the criminal justice department, those two prosecutors are reportedly leaving the Mueller team and going back to their old jobs at Main Justice in the national security division for Van Grack and the criminal division for Freeny.

This means that the initial team of 17 prosecutors working under Mueller in the special counsel`s office will shrink with these departures to 13. Another couple of prosecutors left earlier this summer. So, we went from 17, to 15 earlier this summer, and now apparently down to 13.

And we don`t know what that means for the overall scope of the special counsel`s office and Mueller`s work, but it does seem interesting, if not important, that Mueller`s team is getting smaller and not bigger at this point in the proceedings. So, "Politico" broke that news tonight.

"Politico" was also first to break the news about a case that is being newly referred to Mueller and the special counsel`s office, referred from the cyber division at the FBI. This one is a real mystery. I am not ashamed to tell you, I am fascinated by this story.

The alleged criminal behavior in this case involved going after anti-Trump conservatives, sort of never Trump Republicans during the presidential election, someone trying to get information out of them about their anti- Trump activities, trying to get that information out of those activists by using false pretenses and fake identities. There also appears, though, to have been a hacking effort that succeeded in breaching the personal e-mail account of one of those anti-Trump conservatives that was targeted in this campaign.

Now, up until now, there has never been any suggestion that this might have had anything to do with Russia or with anything related to the Russia investigation. It seems like a totally separate thing. But now for some reason, apparently this month that case has been handed over to Robert Mueller and his team.

How come? I have no idea. But we`ll have more on that story coming up. As I said, I am absolutely riveted by this story, even though I`m not sure we understand the implications of it yet.

But then this afternoon, "The New York Times" published a freaking 40-page- long, 13,000-word mind-bending expose about the president, specifically about his money and how he got it, which turns out to be a 180-degree different story of the president`s own account of how he made his money. The story also potentially implicates the president in pretty substantial fraud and tax evasion.

So -- OK. Everybody on the staff here on the show, we now have these little poker chips. Our show just had our ten-year birthday, which we`re very happy about it. It`s a big milestone for us. Nobody makes it to ten years.

And to celebrate, my sweetie Susan bought everybody these little poker chips. Can we hold one up to the camera? Can we show it there? Yes, there we go. Look, it can even focus.

It says THE RACHEL MADDOW SHOW on one side and then the other side, it says lucky ten, because we made it to ten years. It`s very sweet, right? This is our staff present for turning ten. I love it.

And it turns out tonight, it wouldn`t take long to help tell this story.

All right. December 1990, Donald Trump owns a casino called the Trump Castle in Atlantic City. He has done a very bad job running that casino. He has way overspent on renovations, otherwise dumped way more cash into it than the business could keep up with.

And on December 17th, 1990, his casino, the Trump Castle needed to make a payment, a multimillion-dollar interest payment on a big loan they had taken out for that failing casino. Just hours before that payment was due, it really looked like Trump was not going to make it, which would have dire consequences. And so, his dad, who was then 85 years old, sent a bag man to this casino, to Donald Trump`s casino in Atlantic City. The dude he sent, his name was Howard Snyder, walked into Trump`s casino in Atlantic City. He went up to the cage where all the cashiers work on the casino floor and he handed them a check for $3.35 million.

The cashiers verified that the check was good, and the casino promptly handed over to Howard Snyder a big pile of poker chips. Here you go. Each worth $5,000, $3.3 million worth of poker chips.

Howard Snyder took those poker chips, put them in a bag and left. He did not play poker with them. He did not gamble with them. He just took the poker chips away.

Apparently, the next day, it turned out that that $3.35 million wasn`t enough. Donald Trump is still in trouble. Still not going make the interest payment. Trump`s dad the next day wired another $150,000 to that casino.

Once again, they checked that the wire was good. The money there was from Trump`s dad. They issued another $150,000 in poker chips, $5,000 a chip. Dude picked them up, put them in a bag, did not gamble with those chips. He just took them and he left the building.

Poker chips are awesome. Take it from me, I now have a new habit of playing with them all the time now because we have them for the show as little tchotchkes. They`re fun. But in December 1990, Donald Trump`s dad spent $3.35 million and then $150,000, so $3.5 million just buying a big bag of these that he got to take home. And they`re neat, but they don`t actually have integral value unless you`re going spend them at the casino. He just got a big bag of chips and left with it, $3.5 million worth. That was illegal. But it was also handy in the moment when Donald Trump was up against that big deadline from the bank that $3.5 million in that moment, it sort of ostensibly looked like gambling income for the casino that came in just in time so the casino could make its interest payment.

Of course, it wasn`t gambling income for the casino. It was just Donald Trump`s dad transferring $3.5 million to his son without paying any taxes on it, to bail his son out so he could pay off the bank.

Ultimately, they got actually caught for that by gambling regulators. They had to pay a $65,000 fine for having pulled off that scheme with the poker chips that they did not gamble with. But in the end, $65,000 fine, who cares? Small potatoes, right? The whole scheme worked.

And this is one of the many anecdotes that "The New York Times" recounts today about how Donald Trump`s entire life has been bankrolled to spectacular effect by his dad, which he has always denied. This anecdote about the poker chips is actually one that we`ve seen reported before. Actually, shortly after it happened, this happened in December 1990. "The Wall Street Journal" wrote a story about it in January of 1991, and it`s interesting. There is even a little bit of foreshadowing for all of us in the way that story was initially reported.

"Wall Street Journal" broke the story about the poker chip scheme and Donald Trump`s dad`s bagman in January of 1991. At few months later, by that summer, "The Wall Street Journal" had actually taken that reporter off the Donald Trump beat, because unbeknownst to the editors at "The Wall Street Journal" at the time, that reporter had once taken some boxing tickets off Trump, tickets specifically to the Evander Holyfield/George Foreman fight that year in Atlantic City.

Editors at "The Wall Street Journal" found out that their reporter had done that, had taken those tickets when Trump himself called the editors of the paper to complain about their negative news coverage of him. Having compromised this reporter by slipping him some boxing tickets that he`d have to keep secret from his bosses, Trump then dropped the guillotine, right? He narced that reporter out to his editor, for taking the tickets, and then he got that dude taken off the Trump reporting beat. Bleh, right?

It`s gross. Like both the story that they were initially reporting on and that kind of management of the press thereafter, I mean, that was 1990, 1991. But that`s the bubbling toxic stew we all live in now when it comes to covering not just this presidency, but the federal government he now controls.

What "The Times" has documented in this new blockbuster piece of reporting on Trump`s finances is that that scummy little anecdote, when Trump`s dad sends in a bagman to illegally and secretly bail out his son and evade taxes, that was not a one off. That was emblematic of a pattern and a indeed a plan that shows us a wildly different story about the president`s wealth and his business history than anything that he has ever admitted to publicly. It also appears to implicate him, as I mentioned, in tax evasion, fraud, and other potential criminal behavior.

Part of the reason this behavior and this larger pattern of the president`s financial history hasn`t come to light before now is because "The Times" somehow for this story obtained hundreds of thousands of previously unseen documents from the Trump family and their businesses and their financial entities. No, they still did not get Donald Trump`s personal tax returns, but they apparently did get his dad`s. And reams and reams and reams of family business documents both from public sources and also apparently from private files. So, that`s one reason this story has never come to light before, this documentation has never been used for journalistic purposes before.

But the other reason this story about Trump`s financial story hasn`t really been told before, at least not in this level of detail is because what "The Times" quite candidly describes as the history of Trump getting uncritical press coverage, particularly around his finances. He has not been a financial genius. He has not been a great deal maker. He has not been a great business mind, but he has been great at convincing the credulous press to describe him as such over a period of decades.

And that big blustery PR effort was effective at disguising this blatant con that he played on the public for years, pretending to be some kind of self-made millionaire or even self-made billionaire when apparently he really isn`t anything of the sort.

Here is the lead from "The Times" tonight. Quote: President Trump participated in dubious tax schemes during the 1990s, including incidents of outright fraud that greatly increased the fortune he received from his parents. Mr. Trump won the presidency proclaiming himself as self-made billionaire. And he`s long insisted that his father provided almost no financial help.

But "The Times`" investigation based on a vast trove of confidential tax returns and financial records reveals that Mr. Trump received the equivalent today, excuse me, received the equivalent today of at least of $413 million from his father`s real estate empire, starting when he was a toddler and continuing to this day. Quote: In every era of Mr. Trump`s life, his finances were deeply intertwined with and dependent on his father`s wealth. By age 3, Mr. Trump was earning $200,000 a year in today`s dollars from his father`s empire. He was a millionaire by age 8.

Soon after Mr. Trump graduated from college, he was receiving the equivalent of a million dollars a year from his father. The money increased with the years to more than $5 million annually in his 40s and 50s. Fred Trump, Donald Trump`s father, was relentless and creative in finding ways to channel his wealth to his children.

He made Donald not just his salaried employee but also his property manager, his landlord, his banker, and his consultant. He gave him loan after loan, many of which were never repaid. He provided money for his car, money for his employees, money to buy stocks, money for his first Manhattan offices and money to renovate those offices.

He gave Donald Trump three trust funds. He gave him shares in multiple partnerships. He gave him $10,000 checks at Christmas time. He gave him laundry revenue from his buildings.

But being a young man who was just living off his dad`s considerable wealth, just being on the receiving end of his dad giving him tons and tons of money and paying for everything in his life, that apparently was not the public image that Trump wanted for himself or that Trump`s dad wanted for his son. And so, the selling of a contrary and untrue public image about Donald Trump himself being some sort of self-made business maven, that is something that Trump orchestrated, but the press really helped him out. He couldn`t have done it without them.

And this is where "The Times" gets very candid, even about its own role in its part about this public lie of Donald Trump. Quote: He`s tall, lean and blond with dazzling white teeth and he looks ever so much like Robert Redford. He rides around town in a chauffeured silver Cadillac with his initials, DJT, on the plates. He dates slinky fashion models, belongs to the most elegant clubs, and at only 30 years of age, estimates that he is worth more than $200 million.

So began a November 1, 1976 article in "The Times," one of the first major profiles of Donald Trump and a cornerstone of decades of myth making about his wealth. How can he claim to be worth more than $200 million when he would divulge later to casino regulators that his taxable income that year in 1976 was actually $24,594 for the whole year?

But "The Times" in 1976 apparently bought it hook, line and sinker, and then they turned around and sold to it public.

Quote, in the chauffeured Cadillac, Donald Trump took "The Times`" reporter on a tour of what he called jobs. He told her about the Manhattan hotel he planned to convert into a Grand Hyatt. His father guaranteed the construction loan. He took her the Hudson River rail yards that he planned to develop. The rights were purchased by his father`s company.

He showed the reporter, quote, our Philanthropic endeavor, the high-rise for the elderly in East Orange, New Jersey. That too was bankrolled by his father. Also, an apartment complex on Staten Island, which was owned by his father.

What he called their, quote, flagship Trump Village in Brooklyn, that too was owned by his father. And finally, Beach Haven apartments which were also owned by his father. Quote: Even the Cadillac was leased by his father.

But he didn`t talk about his father`s ownership of any of those things. He passed it all off as his own, and then he boasted to "The Times" and they dutifully printed, so far I`ve never made a bad deal.

As "The Times" concludes today, now knowing that everything he was passing off as his own was actually owned by his dad, "The Times" concludes today, quote, it was a spectacular con.

And they`ve got all this detailed reporting that just makes the story get worse and worse and worse. Quote: Weeks after "The Times`" profile ran, Trump set up still more trust for his children, seeding each with today`s equivalent of $4.3 million.

Even into the early `80s, when Trump was already proclaiming himself one of America`s richest man, he was still on his father`s payroll, drawing an annual salary of $260,000. Meanwhile, Fred and his company has also began extending large loans of credit to Donald Trump.

Consider 1979, when he borrowed in January from his dad $1.5 million. In February, $65,000. In March, $122,000. In April, $150,000. In May, $192,000. In June, $226,000. In July, $2.4 million. And in august, $40,000.

He borrowed all of that money month after month after month after month, all from his dad.

Quote: In theory, the money had to be repaid. In practice, records show many of these loans were more like gifts.

But the column of bundled nerves that runs down the spine of this story is not just that Trump took over $400 million from his father and lied for decades about having built some sort of business empire on his own when really what he was doing for decades was just cashing his dad`s checks, the stuff that rings like a bell in this reporting, not just for what you might have thought about Donald Trump in the past, but for him now, it`s not just about the lying and the false public persona that became his political persona when he decided to turn it into that. The tough stuff here is about crime. It`s about potential criminal fraud and criminal tax evasion and being on the hook for that even now. That`s next.


MADDOW: In the late 1990s, about a year and a half before President Trump`s father passed away, Donald Trump and his siblings restructured his father`s huge very profitable business empire and his considerable assets. They restructured those assets and his business holdings so that the four siblings could inherit well over a billion dollars from their father while dodging taxes that would have otherwise amounted to somewhere in the neighborhood of $500 million.

In the end, by the time he died, on paper it looked like Fred Trump only had a few buildings left from previously what had been a gigantic real estate empire. When he died, Trump and his siblings said they told tax authorities that their dad`s real estate holdings amounted to about $41 million total in value. So that`s what they paid taxes on, buildings that they said were worth about $41 million.

How do you know they weren`t worth around $41 million? Well, over the course of the next decade, those exact same buildings that they had valued at $41 million for tax purposes, they were sold off for, quote, more than 16 times that amount.

That incident alone with their father`s estate really look likes President Trump and his siblings were, quote, dodging hundreds of millions of dollars in gift taxes by submitting tax returns that grossly undervalued those properties. That is a story told tonight in "The New York Times" that has never been told before. It`s laid out in great granular detail in this huge new investigation in "The Times" tonight.

Also never told before, the story of a fake company that Trump and his siblings set up, specifically to siphon money out of their dad`s business, to siphon that money out of dad`s business to pay themselves without ever paying tax on it.

They set up this company on August 13th, 1992. They called it All County Building Supply and Maintenance. "The Times" calls this scheme around this company, quote, the most overt in Trump`s business history. According to "The Times", All County`s ostensible purpose was to be the purchasing agent for Fred Trump`s buildings, buying everything from boilers to cleaning supplies. Records and interviews show, though, that the company did no such thing.

All County had no corporate office. Its address was the home of John Walter, a favorite nephew of Fred Trump`s. "The Times" found All County`s main purpose was to enable Fred Trump to make large cash gifts to his children and disguise them as legitimate business transactions, thus evading the 55 percent tax he would have otherwise had to pay on those large cash gifts.

With incredible detail, "The Times" lays out this fairly simple fraud scheme that Trump and his siblings ran for years through this fake building supply and maintenance company. Basically, it worked like this. Fred Trump built and ran buildings in New York. Whenever he needed to buy something for the company, let`s say a building needed a boiler or something, they`d go out and they`d buy a boiler for 10,000 bucks, but then this fake company, this fake building supply and maintenance company would put a new price tag on that boiler. They would take a look at that $10,000 boiler and say actually that is a $50,000 boiler.

And then Fred Trump would have his company pay $50,000 to this fake company for something that was really only worth $10,000. What happens to the $40,000 markup? That $40,000 pure profit that was built in just by that markup and nothing else? That went directly to Donald Trump and his siblings.

It`s like if you went to the go to the corner store to buy a loose cigarette. Everybody knows that`s like a buck or two bucks or something, right? And you paid a thousand dollars for that loose cigarette.

Somebody would know that that was not a very valuable cigarette, but instead you were using that false transaction as a way to dump money on that vendor for some other reason, right? It`s just money laundering.

It`s just in this case tax evasion. When you move money from one party to another under a cover story that makes it look sort of like a real business transaction, but it`s not at all. It`s a business transaction that makes no financial sense. It`s a business transaction that only exists to disguise that flow of money from one party to the other and to avoid taxes on that flow of money.

This is what we`ve all had to learn in great details in the Trump presidency. How does tax evasion and money laundering work? This is how it works.

So, all of this reporting in "The New York Times" tonight is new. We still don`t know how "The Times" obtained all of the previously secret business documents and tax documents that they used to build out this mammoth 40- page long 13,000-word story tonight.

They did obtain a lot of tax returns that relate to Trump`s family and his father and his father`s businesses. President Trump`s tax returns, though, still have not become public. You may remember that we got two pages of one of Trump`s federal tax returns from 2005.

We got those two pages from reporter David Cay Johnston in March of last year. A few months before that in 2016, "The New York Times" got one page each from three different state tax returns from Donald Trump from back in the `90s. They got those anonymously in the mail the summer before the 2016 election. But those are all the Trump tax returns, the Donald Trump tax returns that have come to light.

Now, however, they did it. Somehow these reporters at "The Times" have received hundreds of thousands of documents that have never been seen before, and these documents show, this reporting shows bottom line that the president appears to have been involved in some financial fraud and tax evasion schemes that formed the basis of a substantial portion of his wealth and below even that bottom line, "The Times" documents 295 different streams of revenue that Fred Trump created over a period of five decades to continually enrich his son Donald, including some streams of revenue that continue almost to this day.

President Trump has frequently bragged that he only ever got a $1 million loan from his dad. He always says his dad didn`t run a very successful business. Oh, and by the way, that little measly $1 million he got, he had to pay it back with interest.

Actually, it looks like Trump received more than $400 million over decades out of his dad and his dad`s business, and that that actually is kind of the extent of his business success. It`s nice work if you can get it. As long as it`s not illegal and provided that you haven`t built your whole adult life around a completely false opposite story that ultimately led to a political career.

There is a lot going on tonight. Of course, we`re watching the Kavanaugh story develop. We`re expecting the FBI report on Kavanaugh`s background to be completed tonight or maybe tomorrow. Maybe ahead of this Friday deadline that was set by the Senate.

We`re watching developments in the Mueller investigation, including a couple of really intriguing ones tonight.

But honestly, "The Times" has sort of blown everything up with this huge investigative report on the president`s deep lies about his financial history and his business success and his potential involvement in criminal tax evasion and fraud. I have a lot of questions for "The Times" about this.

How did they do it, right? This is one of their longest investigative pieces that they have ever published. How long did it take? How did they get these documents?

They also allege explicitly that there appears to be evidence of criminal activity by the president here, in terms of dealing with his family taxes. That obviously raises big statute of limitations issues. But is that true both at the federal and state level?

New York state tax authorities today have already put out a statement saying they`re looking into the allegations made in this article.

As a related matter, if there are criminal implications of this reporting, is it possible that not just the president but his siblings may be in trouble, too? I ask that mindful of the fact that his sister, who appears not infrequently in this piece, she is a respected federal judge.

The White House has continued to respond to this report throughout the afternoon and into this evening, including recently a rather furious denial this evening from White House Press Secretary Sarah Sanders.

One of the reporters who broke this news joins us straight ahead. Stay with us.


MADDOW: This "New York Times" scoop tonight, this ginormous special investigation into how Donald Trump took hundreds of millions of dollars from his dad and his dad`s businesses over a period of decades and apparently helped construct a number of different schemes to dodge taxes on that money for years, as laid out in this new reporting, the tax dodges themselves amount to hundreds of millions of dollars.

But there is a lot here. This is 40 pages long. It`s over 13,000 words. It`s one of the largest investigative articles ever published in "the New York Times."

When it dropped this afternoon, we got fairly quickly this statement from New York state tax authorities. Quote: The Tax Department is reviewing the allegations in "The New York Times" article and is vigorously pursuing all appropriate avenues of investigation.

Joining us now is Susanne Craig, investigative reporter for "The New York Times," one of the bylines on this piece.

Ms. Craig, congratulations on this. Thank you.


MADDOW: First, let me just ask if I screwed anything up in describing some of your reporting here. This is an opus.

CRAIG: No, keep going. No.


MADDOW: How long of a project was this? You give us a little hint when the president over a period of weeks did not respond to a request for comment.

CRAIG: Yes. Well, it`s interesting. The story actually started with -- our investigation started the night that you had the tax returns from 2005 on your show. We came in the next day and were really surprised that he had made money that year, because the last time we left off with him was in 1995 and we had three pages of his tax returns that showed a billion -- almost a billion dollar loss in 1995. And we were like, what happened in this period?

And so, we just sort of started looking around and we realized one of the main events that happened the year before was the sale of his father`s empire that had almost no publicity. There was one or two stories on it. And we just started looking around at that, and we started to pull the string on that.

And from that, we realized what was under it was all this stuff. And that was sort of the beginning moment of it was that night on your show.

MADDOW: So, the year -- we had that -- couple of pages from the 2005 report.

CRAIG: Yes, yes.

MADDOW: And as you said, they showed a large amount of income.

CRAIG: We were like, it doesn`t make sense. He had a billion dollar loss. He had so much that he could have sheltered taxable income for the next 20 years. And all of the sudden, in 2005, he`s --

MADDOW: He`s got a huge amount of income.

CRAIG: We`re like, what happened here?

So, from that, we just sort of -- at the beginning, just started to look at Fred Trump`s empire and just got deeper and deeper into it, and realized that just the relationship between Donald Trump and Fred Trump and how much money Fred Trump had given Donald Trump, there`s just so much more than anybody thought.

And then as we started to look at the money, then we realized all these tax schemes were behind it, just incredible reporting journey of sort of one revelation after another. Sometimes you do these projects and you spend weeks where you`re sort of thinking, we`re at the end of the road. We never, ever had two or three days where we thought OK, we`re running out here. We had so many roads to go down, and there is even more left.

Like, it was just an incredible, just discovery, and once we got these documents, it just opened up. It was, you know, an Alice in Wonderland moment for us where we were just like, wow.

MADDOW: And going at it through that route that you`re describing with the Fred Trump empire and the surprises and Donald Trump`s finances around the timing of that sale and stuff, clearly that led you to public facing documents that were -- you could get to through the Fred Trump business empire.

CRAIG: Well, the great thing about real estate is public documents.


CRAIG: This is where we started, and then we started to see, for example, in Beach Heaven, when we looked back at this one property he has out in Brooklyn, that the land underneath it was in a trust for his children established in 1949. So, we start to see all these things where he is, you know, a young man and he`s building this real estate, and he`s already providing for his children and he has put this land in a trust. And we see a trust for Donald Trump.

So these are sort of the breadcrumbs with the public documents that started to make it really clear. And then companies started to percolate up, names we had never heard. And then we started to put all this together initially through public documents.

MADDOW: But there are some nonpublic documents that you also obtained.

CRAIG: A lot of non-public documents.

MADDOW: At one point, you describe a Trump relative who is involved in one of these financial schemes where, as you describe it, they set up basically a fake company to hide money transfers from the father to his children. That relative died earlier this year, and in the piece you guys say he had a basement crowded with boxes of old Trump financial records.

CRAIG: He did.

MADDOW: So that`s some hint as to how we get the Trump financial records? I guess -- you don`t have to.

One of the things that is striking here, in terms of the president, Donald Trump being president now is the contrast between how he`s described his own financial journey and what you guys describe. Him being, making $200,000 a year by the time he was 3 and being a millionaire by the time he was 8.

CRAIG: He spun a fantastical story that there is hardly a grain of truth in it.

MADDOW: You also say, though, the money that his father set up to the revenue streams his father set up for him continued until he was in his 50s.

CRAIG: Well, it`s continuing to this day. He is going to get a payment from Starrett City. An investment his father made in 1972. He and his siblings are getting that into this year. He`s getting payments into the White House from what Fred Trump did.

Starrett City is the largest public housing project in the country. And in 1972, Fred Trump invested $5 million and another million was invested from a partnership that Donald Trump and his siblings owned. And they inherited their father`s investment when he died, and they still have this initial investment from a company that they were partners in when they were quite young.

He`s still going to get payments from that today because Starrett City was just sold and he`ll cut a check. Part of it has been paid and another part will be paid.

MADDOW: I have one other question for you about how this has upset the White House today. Can you hold on for just one second?


MADDOW: All right. We`ll be right back with Susanne Craig, investigative reporter at "The New York Times." You might remember in 2016, "The Times" told this dramatic story about receiving some Donald Trump tax returns in a plain envelope in a mailbox at the paper -- that was her. And now she is involved in this blockbuster reporting today.

We`ll be right back with Susanne Craig right after this.


MADDOW: Joining us again is Susanne Craig, investigative reporter at the "New York Times." Thank you again for sticking with us.

You say just a couple of paragraphs into this big piece tonight, quote: According to tax experts, it is unlikely that Mr. Trump would be vulnerable to criminal prosecution for helping his parents evade taxes because the acts happened too long ago and are past the statute of limitations. There is no time limit, however, on civil fines for tax fraud.

I`m not a tax law expert and I don`t necessarily understand how law enforcement works around tax measures like this.

Is the president potentially facing legal jeopardy over some of the things that you have reported out with your colleagues?

CRAIG: Well, I think New York state could come in and look at some of this. They already announced tonight they`re going to do a review of it.

One of the interesting things we found on, and you talked earlier about all county and this scheme that they had going to drain their father`s estate of cash so it wouldn`t be hit with the 55 percent death tax, and they were draining the money out through that company. What they did with that, which is very interesting is, they not only did that, they then turned around and used the padded receipts that they created to apply for rent increases in New York for their rent-stabilized buildings.

MADDOW: So, like, in my hypothetical about that scheme, buy a $10,000 boiler, put a $50,000 price tag on it. So, the -- that`s a way of transferring $40,000 through this company to Trump`s kids. In that case, they would then use that inflated $50,000 price tag to say, hey, tenants, we`re going to raise your rents now because costs have gone up?

CRAIG: Yes, and they applied to the state for it and things like mail fraud and other things come in and not -- I don`t know if the state going to go after it, but that`s certainly an area.

MADDOW: Because those were rent-controlled, or rent-regulated business?

CRAIG: Yes, they were rent-regulated apartments and they used the padded receipts, false receipts to justify the rent increases on their tenants.

MADDOW: Well, that`s a fraud on the tenants.

CRAIG: It`s also mail fraud and a potentially other things. And they admit to doing this in part of the story we have depositions that they gave previously on depositions.

In one of them, Robert Trump, Donald Trump`s brother, admits to submitting these false receipts to the state. We also went to the city and the state and we actually got some from the city. We saw that they submitted them, but in addition, we have the Trumps in their own words saying this is what they did.

MADDOW: Admitting that they were inflated and admitting they used the inflated prices to raise rent.

CRAIG: Yes, it was a benefit to them that they could do this.

MADDOW: Susanne Craig, investigative reporter at "The New York Times." Congratulations again to you and your colleagues for this piece. This is a really big deal.

All right. Much more to get to tonight. Stay with us.


MADDOW: The FBI background investigation into Supreme Court nominee Brett Kavanaugh that was reopened a few days ago to such fanfare, we are awaiting word tonight on whether that background investigation is now suddenly complete well ahead of schedule. "Wall Street Journal," "The New York Times", and now, NBC News reporting the FBI could be wrapping up this investigation very soon, perhaps by tomorrow, maybe even as early as tonight.

That`s surprising, not only because they have until the end of the week, but it`s particularly surprising given how many potential witnesses and other people with potentially relevant information have reported over the past few days that they`ve been trying to reach the FBI, to offer them information for this investigation, but no one from the FBI has gotten back to them.

Lawyers even for Christine Blasey Ford, who accuses Brett Kavanaugh of assaulting her in high school, her lawyers wrote to the FBI director today saying they haven`t gotten any response to their offers of an interview and other information. The lawyer for Deborah Ramirez, another Kavanaugh accuser from their time in college, that lawyer said his client was interviewed by the FBI, but it doesn`t appear that agents followed up with any of the corroborating witnesses that she provided corroborative information about.

We did get news just in the last hour of one more interview the FBI has completed. "The Washington Post" now reports that Tim Gaudette, he was a high school classmate of Kavanaugh, he was interviewed today. But then there is Elizabeth Rasor, former girlfriend of Mark Judge. Mark Judge is the high school classmate that Christine Blasey Ford says was in the room when Kavanaugh allegedly assaulted her. Ms. Rasor, again, his college girlfriend, his attorney tells us today that they made several attempts to contact the FBI because Rasor has information that could be helpful to the FBI`s inquiries. Her attorney Roberta Kaplan calls it, quote, extremely unusual that the FBI would not follow-up after their repeated attempts to contact them, given the relevance of what her client has to say.

This attorney Robbie Kaplan took a further step today of releasing to us the sworn affidavit her client has signed, laying out what she wants to tell the FBI. Now, as far as I`m aware, this affidavit has not been made public before right here tonight. But we have it for you. Here it is.

Quote: I, Elizabeth Rasor, being duly sworn hereby depose and say I make this affidavit based on my personal knowledge. I have a bachelor`s degree in English literature from Catholic University and a masters degree in special education from Teachers College at Columbia University. I first met Mark Judge in or around the fall of 1986 while we were both students at Catholic University.

We engaged in a serious romantic relationship for approximately two years beginning in 1986 through 1988. We dated exclusively during much of that time period and attempted to reunite several times in the months afterward until I moved to New York from Washington, D.C. in 1989. While we were dating, I spent time with Mark`s friends from Georgetown Prep and attended a couple of social gatherings at which they were present.

I met Brett Kavanaugh at a couple of social gatherings on or around 1987. Brett continued to socialize with Mark and their friends from Georgetown Prep during this time. At the parties that Brett and Mark attended during this period, there was frequent and widespread alcohol consumption.

In or around 1988, in the context of the conversation we had about how we lost our virginities, Mark told me in a voice that seemed to convey a degree of shame about an incident that had occurred a few years prior where he and several other boys from Georgetown Prep took turns having sex with a woman who was drunk. It was Mark`s perception that the sexual activity was consensual.

To the best of my recollection at the time of the conversation, I and I believe Mark were sober. After this initial conversation, Mark and I never discussed this again. Mark did not share with me any names of other individuals involved in this incident and I do not have any information to suggest one way or another that Brett was -- excuse me, that Brett was one of them.

Mark and I broke up toward the end of 1988. I last spoke with Mark in or around 2013. We met for lunch at Georgetown University to catch up, and I brought my son.

I solemnly swear or affirm under the penalties of perjury the matters set forth in this affidavit are true and correct to the best of my personal knowledge, information and belief. And it is dated September 26th, last Wednesday.

Elizabeth Rasor is one of several people with information that would seem to have a bearing on the FBI`s investigation of these matters. At the very least, you would think the FBI might just want to compare the recollections of someone like Elizabeth Rasor with Brett Kavanaugh`s insistence that nothing like what she is describing ever happened when he was in high school. But as I said, this was dated September 26. That`s because she`s been trying to get the FBI to take her statement.

Apparently, that FBI investigation, though, may be done any minute and they are not interested in hearing from her.

How should we understand what is going on inside this FBI investigation right now?

Joining us now is Frank Montoya, former FBI special agent.

Mr. Montoya, it`s nice to have you here tonight. Thanks very much for making time.


MADDOW: I just want to get your response to that affidavit. I believe that we`re making that public for the first time tonight. That`s obviously somebody who believes she has information that maybe of use to the FBI and its inquiries but she has been frustrated in her effort to reach them and they apparently don`t want to hear it.

What`s your reaction to that?

MONTOYA: All of this is surprising and you`ve mentioned it a couple of times. All of this is really surprising. It defies anything I know about in terms of experiences, whether it`s a criminal investigation or a background investigation where, if people have information to volunteer, that the FBI is not welcoming it.

It`s not including it in its reports and assessing it. And if, you know, necessary, following up on it. So, it doesn`t make a lot of sense to me at this point in time.

I would mention about this particular affidavit that it is about Mark Judge and perhaps not about Brett Kavanaugh and so, the challenge there is relevance. But at the same time, this whole background process is to determine if there is derogatory information that indicates the candidate for the job is not suitable.

MADDOW: In terms of finding that derogatory information, obviously, this is not a criminal investigation. This is a background investigation. The client here, we keep being told, is the White House and this is about figuring out if somebody is suitable for a big job promotion, basically.

But we have these reports now from Christine Blasey Ford that she`s never spoken to the FBI, despite her public testimony in the Senate, the FBI has not been interested in talking to her.

Deborah Ramirez did speak with FBI agents. She gave them information, contact information for other witnesses who she says could corroborate what she has to say. According to Ramirez`s attorney, the FBI has not been interested in following up with any of those witnesses.

Are there bright lines that the FBI would draw in terms of figuring out where relevance ends and how many degrees of separation you can get from the immediate subject before you`re talking to people who aren`t related to this investigation?

MONTOYA: Well, you know, it`s like the last story that you had, you know, about the things going on in New York right now. In an investigation, it doesn`t matter if it`s criminal or it`s a background. You pull on the strings until the string runs out.

And so, you know, in terms of bright lines or red lines, the only thing I can think about, in that regard, is that there have been very severe restrictions placed on how the FBI can proceed with this thing, that it can only focus on certain kinds of things and not other kinds of things. But that, again, it betrays why we do background investigations in the first place, and that is to determine if there is derogatory information or not that indicates that the individual is unsuitable for the position.

So, I -- it doesn`t make a lot of sense that they would be curtailing a lot of these pursuits just because it`s been dictated to them. It`s counter to an investigator`s instincts. So it just doesn`t make sense.

MADDOW: Frank, as I mentioned at the top of the show, we`ve had a lot of contradictory news reports and just a lot of opacity in terms of whether there are restrictions on what the FBI can do, whether they are operating under instructions from the White House counsel`s office or from the White House more broadly that they`re not allowed to do specific things, or they`re not allowed to follow specific leads.

If that is the case -- and I don`t pretend to know and the reporting is very contradictory -- if that is the case, if there are basically restrictions on them that are preventing them from really getting to the bottom of this the way they might otherwise do that, would you expect somebody at the FBI to whistle blow about this or would you expect some sort of public notification from senior FBI officials that those were the kind of constraints that they were operating under?

MONTOYA: You know, or the word would get out some other way. I think that part of the challenge here for the bureau is that it got thrown another political football in a no-win situation. And folks are struggling with how to deal with that.

It is a big problem that we got thrust into this in such a highly charged environment. I mean, you think about it from this perspective, to matter what they come up with, somebody`s going to be critical about it.

So, yes, they`re human becomes, and I think that`s going to have an effect on how they proceed. At the same time, is it outrageous enough that somebody will speak up or at least tell somebody who is on the outside so that they can speak up about it? You would hope so.

MADDOW: Frank Montoya, former FBI special agent -- thank you, sir. It`s always really good to have you here, particularly tonight. Thank you.

MONTOYA: My privilege, thank you.

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


Good evening, Lawrence.


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