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Texas rules Affordable Care Act unconstitutional. TRANSCRIPT: 12/14/2018, The Rachel Maddow Show.

Guests: Devlin Barrett, Elliot Williams, Jonathan Cohn, Joaquin Castro

Show: THE RACHEL MADDOW SHOW Date: December 14, 2018 Guest: Devlin Barrett, Elliot Williams, Jonathan Cohn, Joaquin Castro

JOY REID, MSNBC HOST: And thanks to you at home for joining us this hour. Rachel has the night off, but she will be back Monday.

And, of course, there is tons of breaking news to get to on this Friday night, including a huge development in the fight over your health care. Now, despite what many said on the campaign trail during the midterms, Republicans have not given up on repealing the Affordable Care Act, Obamacare, and its protections for people with preexisting conditions. And it appears they have just won a round in that fight.

Within the last couple of hours, a federal judge in Texas has declared the entire law unconstitutional. I have a copy of that ruling right here. We are trying to make sense of the ruling, and we will bring you some expert advice on what it means and what is next later in the hour.

We`ve also got some breaking news a bit earlier this evening that Donald Trump has chosen Mick Mulvaney to be his brand-new chief of staff. He announced the choice by tweet, naturally.

Mulvaney is currently Trump`s budget director and was until recently simultaneously the head of the Consumer Financial Protection Bureau that was originally the brainchild of Elizabeth Warren. The announcement that Mulvaney will get his third Trump administration position comes after Trump spent the week pretty much flailing around publicly looking for someone, anyone to take the chief of staff job, after his first choice following the departure of John Kelly unexpectedly and embarrassingly turned him down last weekend.

So, there is tons to get to tonight. But, first, after everything that happened this week, it seems fitting that this morning started with a mystery. Quote: More than a dozen reporters lined up in the hallway outside the courtroom about an hour before the first of three cases were set to be argued by U.S. Court of Appeals judges. Reporters and members of the public were free to enter the courtroom during the first two cases.

But the secrecy clampdown quickly followed as the court shifted gears to the sealed grand jury case. A security officer wearing blue rubber gloves checked the chambers for any devices left behind. The live audio feed went dead. And then the clerk kicked the journalists off the entire fifth floor. Determined to keep covering the story, reporters spread out around the courthouse and quickly set up a group e-mail chain to pool their resources and communicate about who saw what in the hallways, the elevators, staircases, and entrances throughout the building.

The media played cat and mouse with the courtroom security guards. Several reporters were reprimanded for waiting in the stairwells. This is the report from Darrin Samuelson at "Politico" this morning from the federal courthouse in Washington, D.C. Now, what all those reporters were looking for was a glimpse of someone from special counsel Robert Mueller`s team heading into that courtroom to argue a sealed mystery case before those appellate judges.

And maybe a glimpse of whoever Mueller`s deep was arguing against in that case. Because as it stands, all we know is that there has been this sealed mystery case unfolding for months in federal court. And thanks to some excellent reporting from "Politico", we know that it appears to be the special counsel`s office locked in a battle with a resistant grand jury witness. Now, we don`t know who the witness is or what the fight is about, but we do know that the case has been going back and forth between the district and appeals courts on a miraculously expedited schedule, suggesting that whatever this case is, the courts are inclined to move other things out of the way in order to address it.

Now, the other big clue was that when the full appeals court heard the case, the only judge to recuse himself was the court`s only Donald Trump appointee, who had said at his confirmation hearing that he would recuse himself from any cases involving Trump and the Russia probe.

And then today we got one more piece of evidence that this mystery grand jury dispute does indeed involve Robert Mueller, although the reporters staking out that courtroom weren`t able to see anything, about ten minutes after activity wrapped up there, CNN caught special counsel prosecutors Michael Dreeben and Zainab Ahmad rolling into Mueller`s office building. A number of keen observers pointed out today that the part of the Mueller investigation that Zainab Ahmad is known to work on is the prosecution of Trump national security adviser Michael Flynn.

So, should we assume that whoever this mystery person is whose fighting with the special counsel`s office over the grand jury, that it`s someone connected to the Flynn case? We don`t know. It`s a mystery.

But after that, possibly Michael Flynn-related drama that started out this day, this afternoon we got some definitely Michael Flynn-related drama that was unexpected, and it came in the form of a new filing in the Flynn case from the special counsel`s office. Michael Flynn is scheduled to be sentenced next Tuesday for lying to the FBI. He pleaded guilty to that crime just over a year ago and entered into a cooperation agreement with prosecutors in the special counsel`s office.

Last week, prosecutors declared themselves so happy with Michael Flynn`s cooperation over the past year that they recommended a federal judge impose no jail time on Flynn for his crime. They filed this document detailing Flynn`s 19 interviews with prosecutors and all the information that he provided to them about various cases, including all those tantalizing redactions. They hailed him for decades of, quote, exemplary service in the military.

Now, if you`re in Michael Flynn`s position, this is the kind of sentencing memo you want from the government. This guy`s great. Let`s give him zero jail time.

So earlier this week, when it came time for Flynn`s lawyer to file his response to that sentencing memo, everyone pretty much expected it to be boring. What do you say to such a nice memo from the government? Why thank you very much. I will take no jail time, please.

And there was a lot of that in Flynn`s filing. He apologized. He took responsibility for lying. He described his years of public service. He included dozens and dozens of letters from friends and colleagues attesting to his good character, and he, too, argues that he should get no jail time for lying to the FBI. But then he did something unexpected.

For that filing earlier this week, General Flynn, quote, recognizes that his actions were wrong, and he accepts full responsibility for them. There are, at the same time, some additional facts regarding the circumstances of the FBI interview of General Flynn on January 24, 2017, the one where he lied that are relevant to the court`s consideration of a just punishment.

Michael Flynn then goes on to describe how basically he feels like he was kind of railroaded by the FBI, because the FBI deputy director made it seem like the interview was just kind of a casual chat, and because agents never warned him it is in fact a crime to lie to the FBI, because who would know it`s a crime to lie to the FBI?

And Flynn named checks FBI`s Andrew McCabe and Peter Strzok, two high ranking officials who were favored right wing targets and who were eventually driven from their jobs. Well, today was the deadline for the special counsel`s office to file its reply to that Flynn filing. And once again, we didn`t really expect anything dramatic.

Prosecutors didn`t necessarily even have to file much of anything. They could have just said, OK, we said our piece. Flynn said his. We agree on no jail time. We`re good.

Well, that is not, to put it mildly, what the special counsel did today. This is how their filing today starts. Quote: In his sentencing memorandum, the defense of Michael Flynn cited circumstances surrounding his FBI interview on January 24, 2017 as factor that mitigates the seriousness of his offense. The circumstances of the defendants interview are not mitigating. Nothing about the way the interview was arranged or conducted caused the defendant to make false statements to the FBI.

The defendant chose to make false statements about his communications with the Russian ambassador weeks before the FBI interview, when he lied about that topic to the media, the incoming vice president, and other members of the presidential transition team. When faced with the FBI`s questions on January 24 during an interview that was voluntary and cordial, the defendant repeated the same false statements. The court should reject the defendant`s attempt to minimize the seriousness of those false statements to the FBI.

Going further, national security adviser, former head of an intelligence agency, retired lieutenant general, and 33-year veteran of the armed forces knows he should not lie to federal agents. He does not need to be warned. It is a crime to lie to federal agents about the importance of telling them the truth.

Well, all right, then. I mean, this firing today from Robert Mueller`s team is poquito en fuego (ph). And remember, just last week, the special counsel was singing Michael Flynn`s praises, and saying how great he is, how helpful and Michael Flynn is like, well, as long as everyone`s being so nice and all, I should point out that I was kind of set up. The Mueller team was like, no, no, you lied, liar, liar. We don`t think you should go to jail or anything, but still.

And one last thing to point out in the filing, one sentence that stands out, because this special counsel appears to be raising a question that is as yet unanswered, at least publicly. They write that Michael Flynn, quote, knowingly made false statements to FBI agents in a national security investigation. Those false statements were material, including raising the question of why he was lying to the FBI, to the vice president, and others. Yes.

Why was Mike Flynn lying to all those people? I mean, he has pleaded guilty to lying to the FBI about talking with the Russian ambassador about sanctions. He and the special counsel are now tussling over the exact circumstances in which he lied, but we still don`t know exactly why Mike Flynn and all those other Trump transition and Trump administration officials were lying about it. Another mystery, just like the mystery sealed grand jury case unfolding behind closed doors this morning in Washington.

And all this comes at the end of a week in which we got the first guilty plea from a Russian engaged in political influence campaign around the 2016 election. Lawyers for Trump`s jailed campaign chair Paul Manafort told a federal judge that they just don`t know yet how to respond to the special counsel`s allegation that Manafort violated his plea agreement by lying and committing additional crimes. The president`s lawyer was sentenced to three years in prison, partly for crimes he says were directed by the president to commit.

We learned of the media company that worked with the president`s lawyer in committing those crimes as a non-prosecution agreement with federal prosecutors. We learned that the president`s inaugural committee is under criminal investigation by federal prosecutors both for possibly accepting illegal foreign funds and it spent those funds. And we learned that the president`s daughter may have overcharged the inaugural committee for events at Trump properties in order to funnel more money into the family business.

So how was your week?

Joining us now to help make sense of this whirlwind week in Mueller investigation is Devlin Barrett, a report were "The Washington Post" who focuses on national security and law enforcement.

Mr. Barrett, thank you so much for your time tonight.


REID: So how unusual is it, just as a matter of reportage for a defendant, who is already admitted to lying to the FBI to respond to being told, well, we dent want to put you in jail by saying yes, but? How weird is the "yes but"?

BARRETT: It`s pretty unusual, but it does fit a particular type of pattern in the Mueller investigation, where you`ve seen folks who have come to plead deals with the government, folks who have gotten their since or are about to get their since and then start seemingly backsliding towards some of the, you know, weirder defenses against the government and against the FBI. So it`s not unprecedented, frankly, in the Mueller investigations, but it is pretty strange overall.

REID: And so, do we know? Because that is sort of the big mystery, is we know that Michael Flynn and a lot of other people were not honest about their contacts with Sergey Kislyak, the former Russian ambassador and with Russians in general. They all seem to be dissembling or lying outright, but we don`t know why.

Is there any reporting out there that explains why it is so many people related to the Donald Trump administration incoming were so motivated to conceal their contacts with Russians?

BARRETT: Well, look, I think you have to understand the context in which all of these questions are being raised. The Flynn contact happens in large part because there is a column in "the Washington Post" earlier that mentions these phone calls and raise what was the purpose of these phone calls and raises the possibility of whether or not Flynn violated the Logan Act, which is a very old law that is not enforced, frankly, and it may not be enforceable.

But I think part of what you see again and again, and Flynn is an example of this, is when the public questions are raised about contacts with Russians, the response seems to be from the people who had those contacts to just deny it. Just deny it and try and make the political problem go away. But if you do that with an FBI agent, you`re then taking your thing from being a political problem and making it a legal problem, and that`s worse.

And that`s what you saw happen with Flynn, and that`s what you saw happen with some of the others.

REID: You had a piece, Devlin, in "The Washington Post" yesterday, and it`s titled "Mueller`s treatment of Cooperating investigations suggest the end of the investigation may be here."

What makes you think that?

BARRETT: Well, there is an interesting feature, an interesting pattern that`s come up in the Mueller investigation. That`s for these people that Mueller has flipped, and you`re talking about Flynn. You`re talking about to a certain degree Cohen and to a certain degree Manafort and Papadopoulos, and each of those case, Mueller has moved pretty quickly to the sentencing phase. Just this week , we saw Michael Cohen get sentenced.

And normally what would happen in a case involving prosecutors, in a case involving a complex investigation, you would not sentence those cooperators until after they had provided the full service, meaning after they had testified at trial against someone else. And so, for a lot of lawyers, they`re scratching their heads about that a little bit. Some lawyers believe that`s an indication that Mueller is actually a couple months away from issuing a final report, and that these cooperators are probably never going to appear at a trial.

Other lawyers, frankly, look at this same fact pattern and say well, Mueller may be rolling the dice a little bit here, but I don`t think we should assume yet that that means that this thing is coming to a head.

REID: Right. Devlin Barrett, "Washington Post" reporter, thank you very much. Really appreciate you tonight.

BARRETT: Thanks for having me.

REID: Thank you.

And joining us now is Mimi Rocah, former assistant district attorney for Southern District of New York, and Elliot Williams, former deputy assistant attorney general at the Department of Justice and a former prosecutor.

Mimi and Elliott, thank you for being here tonight.

Maybe I`ll start with you to go back to the beginning. Is it unusual in your view for a defendant, no jail time is a sweet deal, to respond back and say, yes, I was railroaded. Was it usual for that to result in the no jail time being taken away?

MIMI ROCAH, FORMER FEDERAL PROSECUTOR, SOUTHERN DISTRICT OF NEW YORK: I think it is unusual for the defendant to do what Flynn did here. It seemed very gratuitous. I don`t understand what the strategy was, because frankly, even if the way he laid it out, if the interview did occur that way, it`s still -- it doesn`t really change anything.

And he pled guilty. He admitted to lying. There`s no question, and nothing he says takes away from the idea that he lied. So, I don`t know if it was some sort of misguided attempt to get the judge to feel bad for him, but he`s not the kind of person that you`re going to feel that kind of sympathy for.

REID: He was the head of the defense intelligence agency.

ROCAH: Right. But I just want to be clear about one thing, because there is a lot of sort of rumors out there, on the conspiracy theory side of things. FBI agents do not have to give a warning that something violates the law in this context. He was not in custody.

REID: Right.

ROCAH: They also don`t have to allow him to have a lawyer or tell him that -- they did, in fact say you can bring White House counsel. But the FBI agents didn`t do anything wrong here, by FBI policy or law. I think that`s important because there are a lot of sort of conspiracy theories going on out there.

REID: Yes.

ROCAH: I think that the fact that Mueller responded to set the factual record straight is classic Mueller, but the fact that he didn`t take away the recommendation that he had made about no jail time is also classic Mueller, because he is being a professional. He is not getting upset about this. He is just saying, look, you did what you did, and the good and the bad, and we`re still going to leave it at that. So I think once again, it shows the professionalism of the Mueller team.

REID: And, you know, Elliott, it struck me, it strikes me just in looking at the way that the Mueller team has operated, they`re not handing out huge draconian sentences here, right?


REID: They`re actually less draconian than the sentence Michael Cohen got from a different court. Do you find it unusual that people who are being caught dead to rights by the Mueller team are not being put away for long periods of time? And what does that say to you?

WILLIAMS: Well, the first thing is that the sentencing guidelines only required that Flynn would have gotten six months. And Mueller have endorsed a sentence at the low end of that range, which as we know means zero, one, or two months. And so, you know, what we`re seeing here is almost like the prosecutor is taking a principled stand, almost a moralistic one, the kind of sort that makes defense attorneys roll their eyes about digging in on this point of not wanting to appear to endorsing lying on the court.

What this all comes down to is lying and how prosecutors deal with it, how courts deal with it, and the extent to which a court can be seen embracing or endorsing a defendant`s lives. There is a lot of lying we`ve been seeing this week, from Cohen, from Mueller, from Manafort, and on through. And it`s these sophisticated defendants that sort of either don`t think they`ll get caught, or accept that they might get caught and think they`ll just get away with it and find some benefit.

So, it`s almost this web of dishonesty that is going around the president and so on. It`s almost quite troubling in terms of what we`re seeing and how it`s all converging on the president. In terms of Mueller`s activity here, though, it`s fascinating because like, you know, if you watch the TV show "The Wire," that great quote, if you come at the king, you best not miss. If you lie and you`re caught lying, you potentially -- and again, this wasn`t going to change Flynn`s sentence at all. But it`s a shot across the bow to indicate that if you start fudging the facts of your story, you could potentially be prosecuted for much more time and go away for potentially a much longer time.

REID: Mimi, if this is indeed the end game, is this like musical chairs and you haven`t been called in and you haven`t been talked to by the Mueller team, you might need a person with that chair. I`m thinking about people like Jared Kushner and people like Donald Trump Jr.

ROCAH: In ordinary investigation, I would say that that is a sign that the people who have not been sort of questioned or called in and/or called in to the grand jury are more likely to be subjects or targets of the investigation. This is not an ordinary investigation.

REID: Right.

ROCAH: And the people we`re talking about that there were other reasons why Mueller might not have wanted to question them directly because of who they are and the closest to the president, so there are other explanations here, unlike in other investigations. But yes, I would say that it certainly should give them cause for concern.

REID: Yes.

And, Elliot, what do you make of this sort of mystery hearing that we saw this morning, where something is going on, not clear what it is, it`s clear that people don`t want journalists to see it?

WILLIAMS: Yes. Your guess is as good as mine. It`s all redacted. Everything is redacted in the documents, and we just don`t know.

But obviously, it`s consequential now. Devlin`s article from earlier had indicated it seems like we`re getting close to the end of this, just based on the number of people that are being sentenced. But I couldn`t even deign to speculate about what might be going on there.

As a quick side note, what I do think is truly fascinating, though, I think it was a clever tactic on Flynn`s part to keep the name Strzok and McCabe in the news, as he indicated in the beginning, because those two names are toxic and radioactive on the right. And because this has become as much a political matter certainly for the president and many people who care about these kinds of issues as it has a legal one, simply saying the name Strzok and McCabe over and over and over again sort of inflamed the president`s supporters. And given that it`s his single handed or single-minded focus to undermine this investigation, doing that I think was a very clever legal strategy that sort of bled into the political.

REID: Yes, it`s all political and everyone is using strategery at this point.

Mimi Rocah, former assistant U.S. attorney, and Elliot Williams, former deputy assistant attorney general, thank you both for helping us sort all the this out. Thank you very much for your time.

All right. Much more to get to tonight, including the breaking news that a federal judge has just ruled that the Affordable Care Act is unconstitutional. Yes, you heard that right. That story and a key Democrat on the House Intelligence Committee will join us here live.

Stay with us.


REID: Well, because it`s Friday, could you please put up that breaking news banner, please? Yes, there it is.

We have late-breaking news tonight out of Texas. A federal judge there has ruled that the Affordable Care Act is unconstitutional. This is the judgment`s order. It`s 55 pages long.

We just got this in the last hour or so, so we`re still working our way through it, and we will have some very smart folks coming on in just a minute to help us digest what it all means. But first, let`s set the scene for how we got to this ruling today. Priority number one for Republicans both before and after they took back the White House was to repeal Obamacare.

After giving it the old college try like dozens of times over the years, Republicans tried and failed multiple times to repeal Obamacare with Trump in the White House. They did manage to make a little dent in it. Last December, Republicans repealed the individual mandate part of the Affordable Care Act. That was the part of the law that required people to sign up for insurance, or else pay a penalty. The Republicans repealed that part of the law.

And that little chip in the ACA led to this. In February, a group of Republican governors and attorneys general from all over the country filed a lawsuit in Texas against the Affordable Care Act. They argue that because the individual mandate had been repealed, the entire law was rendered unconstitutional.

If the Republicans get what they want from this lawsuit, everything about the Affordable Care Act gets thrown out the window. Millions of people lose their health insurance. It would just disappear overnight, as would protections for preexisting conditions, which is ironic, because the preexisting provisions condition was the one thing Republicans claimed that they liked about the Affordable Care Act.

They even ran on the incredibly disingenuous idea that if re-elected or elected, they would protect those preexisting condition protects. Watch.


SEN. TED CRUZ (R), TEXAS: Everyone agrees we`re going to protect preexisting conditions.

UNIDENTIFIED MALE: I`m fighting to protect preexisting conditions.

UNIDENTIFIED MALE: I`m taking on both parties and fighting for those with preexisting conditions.

UNIDENTIFIED FEMALE: I want the voters to know I`m committed to protecting people with preexisting conditions.

UNIDENTIFIED MALE: I support forcing insurance companies to cover preexisting conditions.

UNIDENTIFIED MALE: In Wisconsin, preexisting conditions are covered. And as long as I`m governor, they always will be.

SEN.-ELECT JOSH HAWLEY (R), MISSOURI: I`m Josh Hawley. I support forcing insurance companies to cover all preexisting conditions.


REID: Republicans ran on protecting preexisting conditions during the midterms. Those last three guys, their states were signed on to that lawsuit to kill the ACA, the lawsuit designed to end protections for preexisting conditions full stop.

Well, tonight the judge that that lawsuit gave his ruling. He again ruled that the entire health care law is unconstitutional because of that tiny change made by Republicans last year. Now this case will almost certainly be appealed. Obamacare could very well end up right back at the Supreme Court. Hello, John Roberts.

But for right now, the health care of millions of Americans is on much shakier ground.

Joining us now is Jonathan Cohn, a senior correspondent with "The Huffington Post."

Jonathan, thank you so much for joining us.


REID: So, this is a long ruling. You know, as I said earlier we just got it. Have you had a chance to digest it? And can you explain to us what this means?

COHN: Yes. So, like everyone else, I saw this when it came out an hour and a half ago. So this is my first reaction.

You know, the basic gist is that, you know, the judge said, look, when they wrote the Affordable Care Act, they had this mandate penalty and the rest of the pieces of it needed the mandate to work. And so, if you take the mandate out, Congress clearly intended for these pieces to work together. Now that the mandate penalty doesn`t exist anymore because they got rid of it in last year`s tax cut, we got to throw out the whole law.

Even people who oppose the Affordable Care Act, the lawyers who filed the previous lawsuits have said they think this argument is just ridiculous. And here`s the reason. The premise of his argument is that we have to listen to what Congress said. Congress wrote this law in 2010, and they wanted the pieces of the law the work together. Now we`ve taken one piece out, the whole thing has to go.

Well, you know, Congress revisited the issue in 2017. We were all there. We saw it when they proposed taking the mandate out, the debate came up.

Gee, that`s going to affect the rest of the health care law. And the Republican Congress said yeah, we know that. We`re going to debate. We`re going to take out this mandate penalty anyway.

They made that decision. We know what Congress thought in 2017. They changed their mind. Congress is allowed to do that.

For the judge now to go and say, well, I`m going to just ignore all that I`m going to good become to what they did in 2010, you know, that is -- it`s an audacious act of a judge basically substituting his interests for the rest of the country.

REID: Isn`t it the case that the original way the law was written also intended for every single state to take advantage of the Medicaid expansion? But as far as I recall, the Supreme Court ruled that no, states can opt out because many states have. Florida and Texas among them and said we`re not going to do the Medicaid expansion, but that in and of itself did not kill the Affordable Care Act.

COHN: That`s right. I mean, you know, there is a basic premise here in the courts, you know, which is that when, you know, judges are supposed to err on the side of doing less damage to the law. If there is an easy way to sort of solve a problem, they see that there is a law that`s got some constitutional issue they don`t like, they are supposed to sort of solve that problem, address that issue in the most minimalist way possible.

We`re not supposed to throw out the whole law. It`s interesting you mentioned the Medicaid expansion. I mean, that is a huge part of this law. Millions and millions of people have gotten insurance that way.

We don`t need the mandate for the Medicaid. It`s a whole separate provision. Why is he throwing out the Medicaid provision as well? Why isn`t he limiting it to just the parts of the law that work with the mandate, you know, the protections for preexisting conditions.

So, again, this is a very expensive ruling, very ambitious ruling for a sole, lone district judge down in Texas.

REID: We just found out, I`m sorry, in my ear, that the White House has put out a statement saying the law is still in place pending appeal. We`re assuming there will be an appeal.

Very quickly, Jonathan, the Trump administration is not even defending the ACA at this point, right?

COHN: Right. Very unusual. The Trump administration decided not to defend it, even though they were running around like the Republican congressmen saying we believe in preexisting conditions. They refuse to defend it.

So, it`s attorneys general from a number of states led by California that have taken up the mantle of the defense.

REID: Yes, absolutely. I think about Josh Hawley who defeated Claire McCaskill who said, oh, no, no, I`m defending preexisting conditions. What a world.

COHN: His name is on that lawsuit.

REID: It`s on the lawsuit.

Jonathan Cohn, surprise. Thank you very much for helping understand it. Appreciate it.

COHN: Thanks for having me on the show.

REID: OK. When we come back, the lingering mystery of what happened to all that money raised for Donald Trump`s administration. We`re starting to get some answers, next.


REID: OK. For the longest time on this show, Rachel and the team have been chasing this guy. His name is DJ Robbie Drums, also, these fellows who call themselves the Piano Guys, and also, the Frontman of Country. Also, these baton twirlers.

For almost two years, this show has been obsessed, obsessed with all these guys, because we`ve been trying to figure out how all of this, the Donald Trump presidential inauguration committee managed to cost $100 million. That`s how much the Trump inaugural committee raised to throw an inauguration with empty bleachers, C-list acts and tractor parades.

They spent more than double what President Barack Obama spent at his record-breaking inaugural which was far better attended and had super A- list celebrity entertainment, no offense to the baton twirlers. And the Trump inaugural committee people have been completely opaque about how they spent all that money.

The inaugural committee says that they`ve done an audit of their finances but have refused to tell the public anything about it. At least $40 million raised by the Trump inaugural committee is still unaccounted for, but maybe not for long. Last night, "The Wall Street Journal" broke the bombshell that federal prosecutors are investigating whether the Trump inaugural committee misspent some of that $100 million.

And then today "the New York Times" put another scoop on that Sunday, reporting that prosecutors are not just investigating the money that went out of the inaugural, but also the money that came in, whether foreign contributors illegally funneled money into the Trump inaugural campaign. Quote: The inquiry focuses on whether people from Middle Eastern nations, including Qatar, Saudi Arabia, and the United Arab Emirates used straw donors to disguise their donations to the two funds.

In just the last 24 hours, we learned that there is an active federal investigation looking into how the president`s inaugural committee managed to raise over $100 million, and where they chose to spend it, but they might not have to look far. Today, WNYC and ProPublica dropped this investigation into the Trump inaugural spending, revealing for the first time that one of the places all that money went was, ta-da, the Trump Organization.

Quote: The inauguration paid the Trump organization for rooms, meals, and event space at the company`s Washington hotel, according to interviews as well as internal e-mails and receipts. During the planning, Ivanka Trump was involved in negotiating the price the hotel charged the inaugural committee for venue rentals. A top inaugural planner e-mailed Ivanka and others at the company to express my concern that the hotel was overcharging for its event spaces, worrying of what would happen when this is audited.

As the office of the piece note, quote, if the Trump hotel charged more than the going rate for the venues, it could violate tax law -- which is not great news if your last name is Trump. The report also gives new details about Rick Gates, remember him? Rick Gates was the deputy chairman of the inaugural committee and a long-time associate of Paul Manafort. He has also pleaded guilty to multiple felonies in Robert Mueller`s Russia investigation and is currently awaiting sentencing.

Rick Gates has admitted that he personally may have pocketed some of the money that flowed through the inaugural committee that he helped to run, but the details of his involvement in the inauguration have always been a little cloudy, until now.

Quote: Inaugural workers had other misgivings. Rick Gates, then the deputy to the chairman of the inaugural asked some vendors to take payments directly from donors rather than through the committee, according to people with direct knowledge. The vendors felt the request was unusual and concerning.

So, federal prosecutors are currently putting the Trump inaugural under the microscope because they`re peeling apart their finances to see if they broke the law when they raised and spent that enormous amount of money. What will happen when they reach the Trump Organization payments part of the ledger?

This story is quickly becoming a live wire. Expect more sparks.

More ahead tonight. Stay with us.


REID: We are coming to the close of one of the most monumental weeks for investigations involving this presidency. From questions about Russia to revelations about Donald Trump`s business dealings, newly reported investigations into the finances of the inauguration, it is a lot to consider.

And the incoming Democratic majority in the House will be in a position to consider it all when they take over in less than three weeks.

Joining us now to talk about all of that and all of tonight`s breaking news is Congressman Joaquin Castro, Democrat from Texas, a member of the House Intelligence Committee and the incoming chairman of the Hispanic Caucus.

Congressman, thanks so much for your time tonight.

REP. JOAQUIN CASTRO (D), TEXAS: Thank you. Thanks for having me.

REID: So there is a lot on the table in terms of investigations of the Trump administration and the Trump campaign and inauguration. Give us a sense of what -- what the committee, what the intelligence committee is going to be prioritizing come January.

CASTRO: Well, as you know, this investigation that just happened over the past two years was pretty much a take them at their word investigation. The committee brought in witnesses. Some of them spoke for up to eight to ten hours, but there were a lot of unanswered questions when those witnesses left the room, and the tragedy is that the committee under Devin Nunes didn`t issue a single subpoena to get bank records or phone records or travel records to answer any of those questions that hadn`t been answered or to verify anything that was told to us by the witnesses.

So, there are about a half dozen to a dozen what we would consider important questions, unanswered questions, and we`re not going to go bring in every witness again, but we are going to try to go back and answer those very important major questions.

REID: And somebody like General Michael Flynn, who now we have a sentencing memo on, who will now reportedly not get any jail time, is it possible we could see someone like him called before the committee? Are we going to expect to see some of these major figures in the Russia investigation called before the intelligence committee?

CASTRO: There is no doubt that some of the folks that we didn`t have a chance to interview before and some that we did may be called back. So, yes, it`s quite possible that some of those folks will be called in.

REID: For you, what are the big unanswered questions? Because we talked earlier in the show that we know General Flynn lied to the FBI about his contacts with Russia, but we don`t know why. Do you have a sense we can through hearings get to that why, not only with him but other members of the Trump campaign?

CASTRO: Yes. I mean, there is basically three big areas that should cause the president concern -- issues around collusion, money-laundering and obstruction of justice. So, we`re going to be focusing on different parts of those issues. And so, one of the big questions that I know Adam Schiff has mentioned this also, gets to the issue of whether President Trump, for example, knew about the Trump tower meeting that was being set up between Donald Trump Jr. and the Russians.

So, for example, there was sandwiched between two calls to the Russians to set up that meeting, there is a call from a blocked number. Well, we know from another witness that one of the phones that Donald Trump used had a blocked number. So we wanted to subpoena AT&T, the phone company to try to find out whose number that was, and we weren`t allowed to do that.

REID: Yes.

CASTRO: It`s those kinds of issues that get to the heart about just how connected the president is to all this malfeasance.

REID: It`s going to be quite a different House Intelligence Committee with Democrats in charge.

While I have you, Congressman, I want to switch gears really quickly and ask you about a story that "The Washington Post" broke, but I know you`ve been really concerned about. Last night, we learned that a 7-year-old migrant girl from Guatemala died last week just hours after she and her father were taken into custody at the U.S./Mexico border.

Her name is Jakelin Caal. She and her father -- you see her picture there, along with 161 other migrants crossed the border into a remote part of Mexico, turned themselves into the border patrol about 10:00 at night. The next morning, Jakelin became violently ill, vomiting, running a temperature above 105 degrees, having seizures.

Despite her father asking border patrol officers for help, his daughter did not receive medical attention for another hour and a half, was ultimately unable to breathe, was airlifted to Providence Children`s Hospital in El Paso, Texas where she ultimately died. We know this is not the first reported young child dying in DHS custody and Border Patrol is saying migrants are given access to water.

But given all the outrage that this young girl`s death has caused, what can we expect from the incoming Congress in terms of investigating and hearings, doing something about it?

CASTRO: Well, the first thing is that we`re requesting an investigation by the inspector general for DHS and CBP. But the second thing is certainly in January, starting on January 3rd, you will see an investigation into this case.

We need to figure out how this happened and did she ask for food? Did she ask for water? Did her father seek medical attention? And was that provided in a timely way or not?

We need to get answers, full answers to those questions.

REID: Now we`ve learned tonight from your office that you are saying that the commissioner of the CBP, the Customs and Border Patrol, the commissioner`s name is Kevin McAleenan admitted that he knew, admitted to you that he knew Jakelin had died in Border Patrol custody when he testified before the Senate Judiciary Committee and didn`t mention that.


REID: Can you elaborate on that a little bit?

CASTRO: I was very disturbed by that answer. On December 6th, she died, and there is a federal law that says that when somebody dies in CBP custody, they`re supposed to notify the Congress within 24 hours. CBP did not notify the Congress, and on December 11th, the CBP commissioner came and testified in front of the Judiciary Committee.

Now, his argument was that he had not gotten a privacy release from the family, and that also, he didn`t want to politicize the death, but if he had -- if he had -- if CBP had notified the Congress, there would have certainly been questions that were asked, and also, even if he didn`t have a privacy release form, he could have still described that there was a 7- year-old girl who passed away without giving a specific name.

So, this is going to be a very serious problem for him and an issue that the next Congress will look into.

REID: All right. Well, Congressman Joaquin Castro, Democrat on the House Intelligence Committee, appreciate your time tonight. Please keep us updated on this case. Thank you.

CASTRO: Thank you.

REID: Thank you very much.

And over the summer, Senator Jeff Merkley led a delegation to the border in Texas to try to expose conditions migrant children were being held in. The senator from Oregon is back in Texas this weekend and he will be joining me live tomorrow morning on "A.M. JOY" from the allegedly temporary tent city for migrant children in Tornillo, Texas, the same facility that I visited with other journalists after it opened this summer and that has since expanded dramatically. That interview will air tomorrow, tomorrow at 10:00 a.m. Eastern live.

But coming up tonight, elections have consequences. At least they`re supposed to. But for some lame duck Republicans in key states, they`re saying no, no, no, not when Democrats win. And that`s next.


REID: Well, Friday night, it must be news duck time, and tonight you might call it our lame duck session. Because lame duck Republican legislatures and governors who lost in the just completed election are quite active and what they`re doing doesn`t create the greatest respect for what you might call democracy, you know, when voters decide and then the election has consequences.

Take Wisconsin for instance. Today, just ten days before Christmas, the outgoing lame duck Republican Governor Scott Walker who just lost his re- election bid to a Democrat has just 24 days to go before his job and has signed a set of bills ran through by the heavily jerrymandered Republican legislator. Those bills are designed to hobble the man who beat Walker by stripping the incoming Democratic governor and the attorney general of significant powers.

Wait, that`s not all. Republicans also took a ledge hammer to the kneecaps of Wisconsin voters by signing legislation that will limit early voting in Wisconsin from now on. Early voting in Wisconsin is kind of a big deal. Early voting in this past mid-term election shattered records and helped Democrats in this election sweep every single statewide office. And Wisconsin`s two biggest cities, Madison and Milwaukee, they had six weeks of early voting.

But not anymore, because thanks to the new early voting legislation Scott Walker signed today, that will shrink down to two weeks, squeezing the two largest and most Democratic leaning cities, and coincidentally, the ones with the most minority voters in Wisconsin, they`re making it harder for them to vote.

That is exhibit A in the not so much democracy lame duck Republicans playbook. Exhibit B took place across one of the great lakes in Michigan where it also is peak lame duck season. In Michigan, voters were supposed to have the opportunity to vote to raise the minimum wage and extend sick leave, both of which are overwhelmingly popular.

But the Republican-controlled legislator decided, well, they don`t get to do that. But it looked like a citizen petition for those initiatives had gained enough signatures to get a place on the November ballot, the Michigan legislator decided to cast the bills instead and then change them after the election. The new version of the minimum wage law delays the increase by eight years and about a million workers in the state will no longer benefit from the paid sick leave law.

And today, the outgoing Republican governor, Rick Snyder signed those bills into law on this Friday, ten days before Christmas.

Exhibit C, Florida, also peak lame duck season where even though two thirds of voters opted to restore the voting rights of 1.5 million people who have already served their sentences, the Republican Governor Ron DeSantis, and the Republican controlled legislature are looking for ways to wriggle out of it, undermining the overwhelming will of the voters of Florida. So much for the whole democracy thing.

All this evidence that around the country, Republicans are responding to the clear preferences and decisions of voters especially when those decisions are not in Republicans favor by saying basically we don`t care, we`ll continue to rule our way even when we lose. Peak lame duck and we have weeks to go before it`s done. Watch this space.


REID: That does it for us tonight. Rachel will be back on Monday. And I`ll be back here tomorrow morning and Sunday at 10:00 a.m. hosting a show with my name on it.


Good evening, Lawrence.