ANA HERRERO, REPORTER, "THE NEW YORK TIMES" (via telephone): -- something they feel supported right now. But no, I mean, nobody right now, nobody is stopping to think, OK, what is behind, you know, Trump`s support --
CHRIS HAYES, MSNBC HOST: Right.
HERRERO: -- because Trump is not the only one.
HAYES: Yes, there is a coordinated --
HERRERO: And that --
HAYES: There is a coordinated international effort.
HERRERO: Yes, coordinated movement.
HAYES: Ana Vanessa Herrero, who is in there in Caracas, thank you very much. Wendy Sherman, thank you both for making some time tonight.
That is ALL IN for this evening.
"THE RACHEL MADDOW SHOW" starts right now. Good evening, Rachel.
RACHEL MADDOW, MSNBC HOST: Good evening. Chris. Thanks, my friend. Much appreciated.
HAYES: You bet.
MADDOW: And thanks to you at home for joining us this hour.
Lots of moving parts here tonight. We are, of course, in day 34 of the government shutdown with the federal -- with federal employees warning about an air safety environment that is deteriorating by the day. That`s an alarming assessment with food stamps slated to stop altogether for millions of families across the country with the FBI warning darkly about active serious criminal and counterintelligence investigations being brought to a halt, with hundreds of thousands of employees of all kinds being required to show up for work at the risk of being fired if they don`t, even while they are not being paid, for a second month now.
The president`s top economic adviser has now said that it`s nice that these federal workers are volunteering to come to work without pay. They are not volunteering. The Trump administration is requiring them to come to work without pay or they will lose their jobs.
The president`s commerce secretary today said he is absolutely confounded as to why federal employees might be starting to go to food pantries and soup kitchens to feed themselves and their families now that they`re going into a second month with zero-dollar paychecks. Billionaire Commerce Secretary Wilbur Ross said today when he was asked if he understood that federal workers were doing that. He was asked about that today and he replied, quote, I don`t really quite understand why. Why are they doing that?
Then the president himself commented that as far as he understands, local people, that was his phrase, local people and specifically local grocery stores are undoubtedly happy to help people out in circumstances like this. If people are working for free now and they can`t pay for groceries, don`t grocery stores just give you stuff if you say you really need it, even if you can`t pay? Isn`t that how it works for you local people?
So it has been a kinetic day in Washington with renewed but still failed efforts to end the shutdown, and the president and his administration sort of falling off a cliff today in terms of their demonstrated ability to understand, let alone empathize with the kind of pain they are causing here. We`re going to have much more on that fight. Both about what happened today and about what is going to happen next. We`ll have that coming up over the course of this hour tonight.
But I have to tell you, I have bumped a little of that coverage down a few minutes in the hour tonight because just within the past hour, NBC News has broken what appears to be a very big story. This actually joke broke in the middle of Chris Hayes` hour last hour. NBC News has just posted it.
But this is a super serious story, and I want to make sure that you have seen this tonight. Again, this is broken within the last hour. It`s about something apparently quite unprecedented going on in the Trump White House when it comes to security clearances. Security clearances are how our nation makes sure that people who have access to secretive, sensitive, potentially dangerous information can be trusted with that information so that it doesn`t end up in foreign hands or in the hands of people who might use it to hurt us.
And the security clearance process has been a recurring worry in the Trump White House. There was that alarming NBC News report last year that a year into the Trump administration dozens of senior administration officials who had applied for permanent security clearances still had not been able to get them. Almost exactly a year ago, "The New Yorker" reported that senior White House adviser Jared Kushner had been unable to obtain a security clearance for at least his first year working in the White House. When the president nevertheless, among other things, was allowing that senior adviser to read the highly classified president`s daily brief every day while he couldn`t get a security clearance.
Just this week, we have been on this story. The committees in the new Democratic-led Congress are getting their membership lists square away. They`re getting their new chairmen and chairwomen elected.
As the committees get geared up we learned from the oversight committee chairman, Elijah Cummings, Democrats right now, right away, right out of the gate are pursuing from the Trump White House critical information about how the security clearance process was handled for, among other people, Trump national security adviser Mike Flynn, who, of course, has since pled guilty to lying about his conversations with the Russian government. Flynn is now awaiting sentencing.
From Elijah Cummings` letter to the White House this week, we know that Cummings and his committee, they want information on why the Trump White House didn`t yank Mike Flynn`s clearance after they were warned repeatedly and explicitly by the Justice Department that Flynn was compromised by the Russian government and he was lying about his dealings with them. After they got that warning, they took no action in terms of restricting Flynn`s access to secret, top secret or even compartmentalized information, despite the fact that the Justice Department was telling them that the Russian government had one over on him. So anything that he had access to presumably was liable to ending up at the Kremlin. Why didn`t you yank his clearance?
Elijah Cummings this week inquired with the Trump White House about the security concerns over Mike Flynn, also Mike Flynn`s son who worked on the transition. Also, Flynn`s deputy K.T. McFarland who also reportedly lied to the FBI about communications with the Russian government also another deputy of Flynn`s rejected while working as a senior figure under Flynn on Trump`s National Security Council.
What was that about? You installed this person at the top levels of the National Security Council and that person could not qualify for a security clearance? Did you put the cart before the horse there?
Cummings also inquired about Jared Kushner`s security clearance and that of the current national security adviser, John Bolton, particularly given his past interactions with Maria Butina, who has now pled guilty acting as a secret agent for the Russian government trying to infiltrate the conservative movement and the Republican Party. Did y`all check out Bolton with regard to Maria Butina before you made him national security adviser? Did that go through the clearance process? Did he disclose that? Did you know about the video he did for her group, the one with the Russian subtitles?
So we know that the security clearance issue in this White House is a serious one and a live one, but what NBC News has just broken tonight is about how the White House has apparently been subverting the whole security clearance system so that they can give clearances to people who would otherwise be rejected. And it`s not just one here or there. Apparently, according to this NBC News report tonight, it is dozens of people, including at the very highest levels of the White House, including Jared Kushner.
Here`s the lead. Quote: Jared Kushner`s application for a top secret clearance was rejected by two career White House security specialists after an FBI background check raised concerns about potential foreign influence on him. But their supervisor overruled the recommendation and approved Kushner`s clearance.
Again, this is NBC reporting just from this past hour, citing two sources familiar with the matter. Quote: Kushner`s was one of at least 30 cases in which that supervisor overruled career security experts and approved a top secret clearance for incoming Trump officials despite unfavorable information. The two sources said the number of rejections that were overruled was unprecedented and had happened only once in the three years preceding the arrival of that supervisor.
And then he did it at least 30 times? Who is this supervisor who keeps overruling all the rejections and handing out security clearances anyway? According to NBC News tonight, he is Carl Kline, K-L-I-N-E. He was reportedly installed as director of the personnel security office in the executive office of the president in May 2017. So that`s like four months- ish into the new administration. They put someone new in the Office of Personnel Security in the White House.
NBC says Carl Kline was approached multiple times for comment in conjunction with this story and he didn`t respond. But what NBC News is reporting tonight is that once -- four months-ish into this administration they put this new guy into the Office of Personnel Security in the White House. Remember, a lot of the reporting about the initial security clearance problems was that people were just working at the White House without being able to get a clearance. Well, four months in, they put somebody in who apparently tried to solve that problem for them.
Once they had that guy in there, he started overruling it when career security clearance folks said, no, no, this should be a rejection. I mean, this reporting is that 30 times, at least, this one supervisor who Trump put in there, 30 times at least this guy handed out a clearance to an incoming Trump White House person who was otherwise flagged as too risky to get a clearance approved, 30 of them, at minimum. Christ.
For very basic context here, as far as I understand it, there are basically four levels of security clearance. I mean, it`s not quite this simple. I know it`s more nuanced than this. As far as I understand it, confidential, which is the lowest level, then there is secret, the next level up.
Then there is top secret. And above that is one that`s actually quite different, it`s called sensitive compartmented information. That requires a whole different level of scrutiny.
In terms of Jared Kushner`s clearance being rejected and okayed anyway by this guy installed by Trump, here is how this new reporting explains how that went. This is -- this is a little nuts.
Quote: The White House office only determines eligibility for secret and top secret clearances. Above that level, the CIA is the agency that decides whether to grant SCI, whether to grant, what is it, sensitive compartmented information clearances to senior officials after the CIA conducts a further background check.
Quote: Initially, Kushner`s application followed the normal path for security clearance. The initial request was made by the White House and then it went to the FBI for a background investigation.
And that is where the problems reportedly arose. Quote: Kushner`s FBI background check identified questions about his family`s business, his foreign contacts, his foreign travel and meetings he had had during the campaign, the sources said, declining to be more specific.
I will just note here that this sort of comports with other reporting that we`ve got, right? We know that two days into the Trump administration, Jared Kushner initially applied for a security clearance and listed no foreign contacts. Yes, not even like the Trump tower meeting and not even like the meeting with the sanctioned Russian bank CEO. Nothing. He listed nothing.
We know that he had to revise his security clearance application more than 40 times over the course of him starting his employment at the White House. We know that "The New Yorker" and "The Wall Street Journal" last year both reported that the FBI had come to the Trump White House specifically to warn them that Jared was the target of foreign influence operations.
"The Washington Post" also reported last year in February that at least four different countries had been heard by U.S. intelligence agencies strategizing amongst themselves over ways they knew they could manipulate and compromise Jared Kushner to get him to do their bidding.
So, the FBI background check on Kushner turning up questions about him in terms of foreign influence. It`s not a stretch, right? It is not that much of a surprise, given all the other open-source reporting we have seen on that front. But what is a surprise and what is brand-new here is what NBC News says happened next.
Quote: Following the FBI investigation, the case went back to the White House office of personnel security, where a career adjudicator reviewed the FBI information, including questions about foreign influence and foreign business entanglements. On the basis of potential foreign influence, the adjudicator deemed Kushner`s application unfavorable and then handed it to a supervisor. The supervisor agreed with the unfavorable determination and then gave it to Carl Kline, the newly installed head of the office who overruled the unfavorable determination and approved Kushner for top secret security clearance.
Now, at this point, this Trump installed official being put in to run that office -- at this point, having -- having had that official grant Jared Kushner top secret clearance, this White House official appointed by Trump did that. Despite the red flags turned by the FBI, by the career people who review FBI information at the White House -- I mean, the career people who review this information at the White House at two different levels looked at what the FBI turned up on Jared Kushner and were like, no way, don`t do this. But nevertheless, this Trump installed official says, I don`t care, I`m overruling you, give him his top secret clearance anyway.
Then what did they do next? The White House decided, you know what, actually, all we can do is give him a top secret clearance, but let`s try to get him the even higher level of clearance, too. Let`s go to the CIA and see if we can get him the really good one.
Quote: As a very senior official, Kushner was seeking an even higher designation that would grant him access to what is known as sensitive compartmented information or SCI. That material makes up the government`s most sensitive secrets, and, again, getting an SCI clearance is something that the White House can do on its own. It has to be approved by the CIA and the CIA does its own background check for that.
So check this out. Quote: After Kline overruled the White House security specialists and recommended Kushner for a top secret clearance, Kushner`s file then went to the CIA for a ruling on the SCI clearance. After reviewing the file, CIA officers who make clearance decisions balked, two of the people familiar with the matter said. One called over to the White House security division, wondering how Kushner even got a top secret clearance, the sources say.
Quote: The sources say the CIA has not granted Kushner clearance to review SCI material.
So, this Trump appointee is installed four months -- four-ish months in to the Trump administration and that person overrules the career people who say, no, do not do this for Kushner`s top secret clearance. They give him a top secret clearance. Then they want to get him the next one up. The CIA handles that one. The CIA would not push over on this one, on the highest level of clearance for Kushner, and so the CIA didn`t grant him that.
But, of course, the president himself could overrule that if he wanted to. Has he? Seems to be treating this whole matter with real seriousness, right?
Joining us now is Brad Moss. He`s a national security attorney. He specializes in litigation related to national security, federal employment and security clearance law. Lucky for us, he has precisely the expertise that we need right now.
Mr. Moss, thank you for your time tonight. Really appreciate it.
BRADLEY MOSS, NATIONAL SECURITY ATTORNEY: Absolutely. Good evening, Rachel.
MADDOW: I -- part of the reason I wanted to speak to you tonight is I know you spoke with Ken Dilanian, our colleague at NBC News, as he was researching this story. I wonder if you can just give us a sense of how abnormal this is.
There is a line in this reporting from NBC News tonight that says the sort of thing happened at the White House, this overruling of career officials on the basis of FBI background information, that had happened once in three years before this particularly supervisor got there. NBC says he did it at least 30 times.
Is that as much a break from standard practice as it sounds?
MOSS: I`ll say this, in 12 years of representing people across the intelligence community, defense contractors, government personnel, military personnel, I`ve never seen this. It doesn`t mean it doesn`t happen. I`m certain there are certain exceptions of the rule. There`s been times that it`s happened, you know, over various decades that we`ve had clearances.
But the fact that it was done here, this is what we always feared. This is what we were worried was going to happen when the president broke with the custom of not having -- not bridge bringing his kids in, not bringing family. This is what we feared was going to happen.
They brought Jared Kushner in. They brought Ivanka Trump in. There were obvious clearly foreign identical concerns, foreign personal financial ties, extensive foreign contacts, extensive foreign travel, questionable judgment about how Jared handled stuff in the transition in terms of wanting to use the Russian government`s secure line to conceal it from the U.S. government.
All of those things, if it had been one of my clients, they would have been walked out the door, laughed out the room. It would never have been a consideration that they get cleared. That the two adjudicators said no makes complete sense to me.
That`s exactly what would have happened to my clients and what we expected would have happened here, that this individual, Mr. Kline, and he had the authority to do this, let`s be clear, but it`s a questionable decision as to why that he overruled them and granted the top secret clearance. Raises significant questions about whether or not there was improper political influence and what the basis for the determination is, especially as you indicated and as Ken Dilanian`s reporting show that CIA balked and said, are you kidding us? We`re not giving him SCI access.
MADDOW: The -- I feel like there are two lens to look through for this story. One of them is definitely a -- you know, this is why there`s rules against nepotism story, right? One of them is this is a very dramatic story about the president`s son-in-law being elevated to a position and then obviously begin what appears to be very special and potentially dangerous treatment in that position.
But there`s also this reporting that this supervisor has done this at least 30 times, and that to me, even if Jared Kushner didn`t exist in this story, the idea that there are 30 people working in the White House who have been red flagged as unsuitable to receive a security clearance, who have nevertheless been given these clearances, which means with those clearances they have access to the kind of information you can`t see if you don`t have one. I mean, to me, that just feels like a quivering national security disaster that we apparently have been living through since this supervisor has been there and we didn`t know it.
MOSS: Yes, I mean, I certainly would like to see eventually more reporting, some more detail on what these cases were. It could certainly be -- in this, you know, 30 cases, whatever the number was, that part of it they got backlog, caught up because so many of the people that President Trump brought in, his friends, his business colleagues have extensive business holdings, have extensive foreign ties, because of the nature of their business careers and security was struggling with it.
That`s not normally what you have with people holding security clearances. Most people don`t have that. So, it`s very possible that for at least some of it, this was just an issue of a backlog of them struggling to figure out what to do one way or another and Kline was trying to clear it out.
What I am particularly worried about hopefully as the reporting continues on and I look forward to hearing more of it is whether or not improper political considerations were brought in here, particularly for the president`s children, Ivanka and Jared Kushner, particularly for people like Michael Flynn, who we know had issues with reporting stuff on his SF- 86. We know Sebastian Gorka, at least allegedly had an interim security clearance despite having applied for a foreign government clearance.
My clients would never be considered for interim access in that situation. So, there`s certainly a lot more detail we need to find out whether or not this was Kline coming in trying to fix a logjam or if there were truly some serious improprieties here beyond the Jared Kushner situation.
MADDOW: I`m worried the darker implication of what you`re suggesting there is already spelled out in Ken`s reporting. He is saying this is at least 30 cases in which Kline overruled security clearance experts for incoming officials despite unfavorable information. So it`s not just he said short circuit this, I`m sure it`s fine, approve these guys. This is there is unfavorable information for grant no clearance and they`re granting it anyway.
That`s -- those kind of red flags, we don`t know exactly what the red flags are, as you point out in case to case, but, boy, this is a big story.
Mr. Moss, Bradley Moss, national security attorney. Thank you very much for being with us tonight. Much appreciated.
BRADLEY: Absolutely. Any time, Rachel.
MADDOW: All right. Lots to get to. Genuinely busy news night tonight. Stay with us.
MADDOW: Do you know this man? He`s in his mid-50s. He has kind of light brown hair.
He has a nice smile. Sometimes he rides trains. Sometimes he uses a cell phone outside while smiling. Sometimes he takes the escalator.
Pleasant brown haired man who may seem familiar, although he is not the most recognizable senior politician in our government. In case you don`t know, he`s Democratic Senator Michael Bennet. Two N`s, one T. The senior senator from the state of Colorado.
Michael Bennet was first elected to the U.S. Senate in 2008 and has done a lot of work in his home state and very well liked at home but not that well-known nationwide. Por ejemplo, there was some recent chatter that Michael Bennet might make a run for president in 2020.
This is how "The Hill" newspaper wrote that up. Quote: Bennet is a soft- spoken moderate with a lower profile than other senators. It is perhaps fitting with his mild-mannered quiet confidence thing that this was Michael Bennet`s response that he might run for president. Quote, I don`t have anything to say about that today.
So all of this to say is that Senator Michael Bennet is not a loud mouth. He`s not known to be much of a chatter box at all. He is an effective senator and a respected senator, but he is almost never the loudest voice in the room.
So this happened today.
(BEGIN VIDEO CLIP)
SEN. TED CRUZ (R), TEXAS: So the only thing that is necessary to pass a clean bill paying the salaries of every man and woman in the Coast Guard is for the Democratic senators to withdraw their objection, is that correct?
UNIDENTIFIED MALE: That is correct.
CRUZ: Thank you.
UNIDENTIFIED MALE: Madam President?
UNIDENTIFIED FEMALE: Senator from Colorado.
SEN. MICHAEL BENNET (D), COLORADO: Madam President, I seldom, as you know, rise on this floor to contradict somebody on the other side. I`ve worked very hard over the years to work in a bipartisan way with the presiding officer, with my Republican colleagues, but these crocodile tears that the senator from Texas is crying for first responders are too hard for me to take. They`re too hard for me to take. Because when you -- when the senator from Texas shut this government down in 2013, my state was flooded, it was under water, people were killed, people`s houses were destroyed, their small businesses were ruined forever.
This government is shut down over a promise the president of the United States couldn`t keep. And then America is not interested in having him keep. This idea that he was going to build a medieval wall across the southern border of Texas, take it from the farmers and ranchers that were there and have the Mexicans pay for it isn`t true!
(END VIDEO CLIP)
MADDOW: If you stuck today`s news cycle into like a 3-d printer or something, that image right there, that is what would come out. The mild- mannered, moderate, soft-spoken, don`t mind me senator from Colorado yelling himself absolutely hoarse on the floor of the Senate.
This is where we are now. Welcome to day 34 of the government shutdown, everybody. We`ve never had one this long and this one doesn`t look like it has an end.
Today, the Senate voted on two bills to re-open the government. Any spending bill needs 60 votes to pass the Senate before it heads to the president`s desk and the rules they used now. The first bill was put forward by Republicans. It had money for the president`s made up wall. That one died 50 votes to 47.
The Democrats then tried putting up their bill that would keep the government funded for just a few weeks with no money for the wall. That one also died, but check out the vote on that one. The Democratic bill actually got more votes. It got 52 votes.
Who controls the Senate again? Six Republicans broke ranks and voted yes with the Democrats to re-open the government without giving the president a wall between us and Mexico. You know, which is not nothing.
That means that the effort to end the shutdown, the Democrats` effort to re-open this and fight about the wall some other way, the Democrats managed to pick off six Republican senators, six, six Republicans crossed the aisle to vote with Democrats. That, of course, gets them closer to the 60 senators you would need to pass a funding bill. They got 52 votes today. They need 60 to pass the Senate.
Here`s the bigger problem though, even if all the starts aligned and you polished your lucky rabbit`s foot and danced around four-leaf clover, and got 60 members of the U.S. Senate, you got a bunch more Republicans to agree on a single bill to re-open the government, that still wouldn`t be enough, even after it passed the Senate because as long as the president doesn`t get his wall, he says he won`t sign anything, he`ll veto anything other than his wall.
That means in order to re-open the government you need a veto-proof majority. You need 67 senators, not just 60. So you can set your watches for that happening at hell freezes over o`clock.
But who knows? I mean, maybe the president will wake up tomorrow morning, let off some steam with a few early-morning rage tweets and then try to call the whole thing off, right? I mean, stranger things have happened. Honestly just today, stranger things happened.
Today, the president acknowledged reality on the whole State of the Union thing, for instance. Speaker Nancy Pelosi told him he couldn`t give the speech in the House until the shutdown is over. After lots of beating his chest about it over several days, today the president gave in to that reality and announced that he will deliver the State of the Union in the House once the shutdown ends, just like Nancy Pelosi said.
Ginned up rigmarole of national crisis died with this whimper today, right? What Nancy said. OK.
And both Senate bills failed today. Negotiations began on some new maybe short-term fix. The White House insisted that the new fix included something that the president is calling a down payment on the president`s wall, like there is somebody he is paying for it. I don`t know.
Nancy Pelosi put that one to bed right quick today.
(BEGIN VIDEO CLIP)
REPORTER: Do you know what he`s talking about, what size down payment he`s asking for?
REPORTER: What about -- would it be prorated?
REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I don`t know if he knows what he`s talking about, do you? I don`t know what that means.
(END VIDEO CLIP)
MADDOW: So to quote Senator Michael Bennet -- who knows when this thing will end. I do not know. You do not know. Congress does not know. Only the president knows because only he is the one who can make this stop.
And while we wait, we really are -- I shouldn`t say he`s the only one that can make it stop. Mitch McConnell could work his side of the aisle to get enough Republicans to cross over with the Democrats so that they could get 67 votes, so that even when the president vetoed this bill, it would be a veto-proof majority and the government would re-open. Mitch McConnell could do it.
The president could do it by admitting that the government should re-open and dropping his demand, or McConnell could work around him. But that`s kind of it. That`s it. And we really are in the coping stage, as long as neither of those two men do either of those two things.
Hundreds of thousands of government employees are about to miss their second paycheck since this whole disaster started. Some are hoping better than others. Today, the already troubled commerce secretary had his moment in the spotlight, going on TV to say he just cannot understand what the problem -- what the problem is with government employees not getting paid. He cannot wrap his brain around why people who haven`t been paid money for weeks might need to go to food banks to feed their families. Why would they do something so irrational? Does not compute.
After those comments today from Commerce Secretary Wilbur Ross today, the president suggested an alternative for federal employees who haven`t had enough money to buy food, specifically responding to what Wilbur Ross said about he doesn`t get why people can`t eat when they don`t have money to pay for food. The president today said that people should go to their local grocery store and work something out. He said we`re all just working along, he says. The stores, the banks, the people who are not getting paid, we`re all working stuff out, you know, the grocery stores.
The president, remember, also believes you need to show a photo I.D. to buy cereal.
But while the president and his cabinet muse over the merits of negotiating with your local grocer, the merits maybe of reinventing some sort of barter economy, I don`t know. The way things people are trying to keep things together are pretty stunning. In San Jose, California, today the mayor there proposed passing an emergency city ordnance that would block landlords in the city of San Jose from evicting any employees who can now not pay their rent because of the shutdown. The mayor saying today, quote, we are trying to save our federal employees from the federal government.
And this isn`t just a thing for federal employees anymore, right? This is a thing for all of us.
I mean, last night we saw that harrowing warning from the air traffic controllers saying, quote, we have a growing concern for the safety and security of our members, our airlines and the traveling public due to the government shutdown, in our risk-averse industry, we cannot even calculate the level of risk currently at play, nor predict the point at which the entire system will break. It is unprecedented. To avoid disruption to our aviation system, we urge Congress and the White House to take all necessary steps to end the shutdown immediately. When the air traffic controllers warned that the air security environment is deteriorating.
Today, U.S. airlines started chiming in warning about what happens as the shutdown continues to drag on. The CEO of JetBlue told "The Wall Street Journal" today, quote: We are close to a tipping point. The longer this goes on, the longer it will take for air travel infrastructure to rebound.
It is day 34. It`s up to one of two people to decide when this stops. It`s up to one of two people to decide when enough is enough. One person who says he wants a wall he`s not going to get and one person who says that this is not in his hands in the U.S. Senate.
Day 35 starts at midnight tonight.
MADDOW: Just after thanksgiving last year, the president`s longtime personal lawyer pled guilty to lying to Congress and nobody remembers it now, but on that exact same day in Europe, in Germany, 170 prosecutors, federal agents, police officers and tax authorities raided the worldwide headquarters of a gigantic bank called Deutsche Bank. They searched that headquarters and they searched five other deutsche bank sites.
And those two stories were a coincident in time. They both happened on the same day, but they were also both very near and dear to the president. Michael Cohen, Trump`s longtime personal attorney. Deutsche Bank, Trump`s longtime personal bank.
And that connection did not immediately ring a bell for everybody, but it was not lost on one very, very sharp member of Congress. And she joins us next with some news.
MADDOW: Starting from his dad`s low-profile but very rich New York City real estate business, managing working-class apartment complexes and middle-class outer borough housing developments, the young Donald J. Trump eventually used that start in dad`s company to become quite famous. He parlayed the wealth and assets he got from his dad`s company in a racy built for the headlines love life and his own knack for self-promotion of his perceived business acumen. He parlayed that all into a lively life as a fixture in New York City tabloids.
He parlayed that into a reality TV show gig and into assorted celebrity side projects like Trump-branded house wares and short lived Trump airline and Trump university which is, as it turns out, not a university, a fraud scheme for which he had to pay a $25 million settlement right before the inauguration.
But when it came to his own supposedly core business as a real estate developer just like dad, over his decades in that family business, Trump developed a hardcore business reputation for reneging on his financial obligations, for failing to pay back bank loans, to the point where by the time the 21st century rolled around, every bank in New York had blackballed him. Nobody would take him on as a customer anymore, except one, a big bank called Deutsche Bank.
Deutsche Bank is the bank that continued to lend him hundreds of millions of dollars, even after he was unable to pay that same bank back on some of his earlier loans. Even after he went so far as to file lawsuits against Deutsche Bank when he failed to pay them back his side of the loan. He owed them $40 million and he didn`t pay it, then he sued them, alleging that it was somehow their fault that he wasn`t paying them back and they should pay him billions of dollars.
I mean, there are aspects of the Donald Trump/Deutsche Bank relationship that have allowed seemed way outside the bounds of normal business dealings. They have been uncommonly generous to him. Not just him, it`s him adjacent, too. The whole Trump/Deutsche Bank uncommon generosity story got even more strange when Deutsche Bank also gave Jared Kushner several hundred millions of dollars worth of loans in October of 2016, right before the election.
And one of the reasons this financially inexplicable dynamic between Trump and this one big bank, one of the reasons it`s been of interest for so long is because at the same time Deutsche Bank was the inexplicably generous lender of choice for Donald Trump and his family, no matter how much he abused them, Deutsche Bank was also neck-deep in a Russian money laundering scheme. Barely a week after Trump`s inauguration, Deutsche Bank got nailed for facilitating the laundering of $10 billion in dirty Russian money and something that was called a mirror trading scheme in the business press.
Now, it turns out that that $10 billion Russian money laundering scheme, that might have been Deutsche Bank`s smaller Russian money laundering operation, sort of the bank`s jayvee league Russian money laundering operation, because Deutsche Bank now also stands accused in a completely separate scheme of facilitating the laundering of 15 times that much Russian money, $150 billion.
This was illicit cash that was spirited out of Russia through an overseas branch of the biggest bank in Denmark, randomly. For years and years, apparently nobody thought it was odd that this tiny Danish bank branch in Estonia was almost exclusively handling piles and piles of cash from customers who weren`t Danish or Estonian, they were all Russian. And the bank that handled the majority of that U.S. dollar transactions, $150 billion worth of these suspect Russian transactions, the bank that handled them was Deutsche Bank, allegedly.
Deutsche Bank has reportedly been contacted by criminal investigators in the U.S. about this. Just this week, we learned that the U.S. Federal Reserve is also investigating deutsche bank for this alleged $150 billion in Russian money laundering. And, of course, we don`t know if there`s any connection between Deutsche Bank`s voluminous money laundering troubles and the bank`s very special inexplicable relationship with the Trump family and the Trump Organization.
We do know that as early as 2017, U.S. banking regulators were looking into Deutsche Bank`s loans to Trump businesses. At the end of that year, there was a flurry of reporting that special counsel Robert Mueller had subpoenaed records from Deutsche Bank related to Trump. "The New York Times" later reported that those news reports sent the president into such a rage, he tried to fire Robert Mueller right then and there in response to those reports about Deutsche Bank.
There is something as yet unexplained about the relationship between the president and this bank. I mean, back in 2008 when things between them by all right should have fallen completely apart, when Trump owed Deutsche Bank $40 million that he had personally guaranteed and he announced that not only was he not paying them back, but they should pay him $3 billion, too, that crazy lawsuit he tried. I mean, that is like a dramatic way to break up with somebody. That is not a good basis for an ongoing let alone renewed and deepened relationship, but that`s actually what happened between him and Deutsche Bank after that stunt.
He couldn`t pay them back $40 million that he owed them. When they came for it he was like, no, I`m suing you for $3 billion. What? And they responded by loaning him a ton more money.
And the little twist in that that has always seemed inexplicable is that what Deutsche Bank did there was they moved Trump over from another part of their bank to their private wealth division. That`s how they got that $40 million payment that Trump wasn`t otherwise going to pay them. They got it by letting him borrow it from this other part of their bank. They moved him as a real estate client into this other part of their bank, this private wealth division of their bank, which doesn`t deal with real estate at all. It was always really strange.
And this is where I point out that a couple of months ago right after thanksgiving, when German police raided Deutsche Bank`s world headquarters in yet another new separate money laundering investigation that appears to be at least potentially related to Russia, the division of Deutsche Bank that authorities swooped in to search was Deutsche Bank`s private wealth management division, the weird part of that bank that they shuttled him into when they started behaving really strangely toward him.
And as I said, we don`t know if the Deutsche Bank`s Jenga tower of money laundering problems has anything to do with their relationship with President Trump. Maybe Trump just knows how to pick `em. But there`s been a lot. Many tens of billions of dollars of illicit Russian money apparently pouring through Deutsche Bank during the time deutsche bank has inexplicably mysterious pots of cash to lend to a client no bank in its right mind would seem to want, which is always seem like something we should know more about.
And now, it looks like we will. That`s our news, next.
MADDOW: Today, the Democratic chairs of the Intelligence Committee and the Financial Services Committee, Congressman Adam Schiff and Congresswoman Maxine Waters, announced that their committees will pursue a joint investigation into Deutsche Bank and its involvement in Russian money laundering and its financial relationships with the president and his businesses.
Deutsche Bank today confirmed they`ve received an inquiry from those committees on their ties to President Donald Trump. The bank had previously received inquiries from Democrats on the Financial Services Committee when they were in the minority but Republicans had refused to issue subpoenas and the bank decided they didn`t need to respond. Now, of course, the Democrats are in charge and they can issue their own subpoenas if need be.
Joining us now is Congresswoman Gwen Moore of Wisconsin who has focused on this for a long time. She actually brought this to our attention late last year as something we should have a heads up on in terms of congressional responsibilities here.
Congresswoman Moore, thank you so much for being here.
REP. GWEN MOORE (D), WISCONSIN: Oh, I`m so excited to be here, Rachel, finally, to try to get some answers.
MADDOW: Well, tell me why this is something you`ve been so interested in, what you think needs investigating here?
MOORE: Well, let me tell you. Low I.Q. Maxine Waters has been on this since March of 2017. And we could see that Deutsche Bank, you know, just follow the money and Deutsche Bank was involved in this.
Your setup was really beautiful when you described the unusual lending activity of Deutsche Bank. But it came full circle for me this week when the Russian oligarch Deripaska and the Treasury Department lifted sanctions, relieved him of sanctions. And the money that is going to go right back into the Laundromat, this VTB Bank which is connected to Deutsche Bank, is where the proceeds from this oligarch will go.
And so I`m trying to hurry up, Rachel, because I realize you`re short on time. I just want to get right to the point. We see it`s gone full circle. Donald Trump, Jared Kushner, all of them have benefited from loans from Deutsche Bank.
And this week, this Russian oligarch has been relieved, given sanction relief, and those proceeds will go right back to VTB, which is associated with Deutsche Bank.
MADDOW: And VTB, of course, is said to have been the bank that was lined up to be the financing organization for the Trump Tower Moscow project, which ended up --
MADDOW: Let me just ask you. I`m reading a lot today into the fact that the financial services committee, Congresswoman Maxine Waters` committee, and the Intelligence Committee, that one which is now run by Adam Schiff, I`m reading a lot into the fact that they`ve decided to do this as a joint operation, that they don`t see this as just a banking concern or just an intelligence concern. I see this as they`re look for the nexus here.
Do you think that`s fair for me to read it that way?
MOORE: That is very fair, because there very clearly is a nexus. When you think about it, think about Paul Manafort and what we know about him. He was very, very indebted to this Russian oligarch, Deripaska. Very indebted to him.
And he in fact is connected to VTB, which, again, is one of these sort of boutique banks that process Deutsche Bank funding. So when you think about Paul Manafort and the whole question of whether or not there was collusion with the Russians to deliver the White House to Donald Trump and you think about the indebtedness of Donald Trump to Russian oligarchs, the indebtedness of Paul Manafort and the involvement of these banks, it`s the kind of thing that makes you go hmm.
MADDOW: Congresswoman Gwen Moore of the great state of Wisconsin, thank you for contacting us late last year when these things came together to say watch for congressional oversight on this. It really activated some work on our part and helped us get our heads around it. But thank you for talking to us about it tonight, too.
MOORE: And as Rachel Maddow would say, watch this space.
MADDOW: Watch this space.
MADDOW: Thank you, Congresswoman.
We`ll be right back.
MADDOW: That`s going to do if for us tonight. We will see you again tomorrow.
Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL".
Good evening, Lawrence.
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