Judge in DC ruled Manafort lied to special counsel. TRANSCRIPT: 2/18/19, The Rachel Maddow Show.

Guests: Maxine Waters, Ely Portillo

UNIDENTIFIED MALE:  Cory Booker, his stump speech is like a big pep talk and inspiration-type rally.  There are other candidates like, I guess, Hickenlooper, who talks much more heavily about policy, Delaney as well talked about artificial intelligence.  They are all highlighting -- every candidate is highlighting different parts of the progressive message. 

CHRIS HAYES, MSNBC HOST:  Pat Rinard (ph) and Caitlyn Berg (ph) who are in those early states where the folks are coming through.  Thank you for being with me and sharing what you guys learned.  Really appreciate it. 

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.  Happy Monday.  Happy Presidents` Day. 

On Friday night, you may recall we got the sentencing submission from special counsel Robert Mueller for Trump campaign chairman Paul Manafort.  And it was kind of a stunner, right? 

This was Friday night.  The prosecutors argued for no mitigating factors that might encourage the judge to be more lenient with Manafort, and they argued for lots of aggravating factors that should cause the judge to be harsher in sentencing Manafort.  Mueller`s prosecutors advised that judge on Friday night in Manafort`s case in Virginia that they would not object to a 19-1/2 year to 24-1/2 year prison sentence for Paul Manafort.  Plus, fines and restitution that ranged from millions of dollars to tens of millions of dollars. 

Now, keep in mind though that sentencing recommendation Friday night was just for the one judge, just for the one judge who is hearing the Paul Manafort case in Virginia.  That is not the only federal case against Paul Manafort.  By the end of this week, we are expecting Robert Mueller and his prosecutors to also make their case for the sentence that they believe Manafort should get from the other federal judge who is hearing the other federal criminal case against Paul Manafort in the neighboring jurisdiction of Washington, D.C. 

And that fairly dire circumstance, the fact that 69 1/2-year-old Paul Manafort is now looking down the twin barrels of a sentence from the federal judge in Virginia and then another sentence from this federal judge in D.C., that obviously is a crisis of his own making.  Because it was Manafort and his defense team who elected to not combine the two sets of felony charges against him into one single case in one jurisdiction before one judge. 

So, Manafort is now facing sentencing in two different jurisdictions by two different federal judges on two different sets of crimes, and, yes, he does face the prospect that the sentences in each of those jurisdictions might run consecutively, might run one after the other rather than concurrently, both at the same time. 

So, we know as of Friday night what prosecutors have advised the judge in the Virginia case, 19-1/2 to 24-1/2 years in prison.  That came out on Friday.  By the end of this week, we will see what the prosecutors are advising the other judge in his other case.  Then it will be up to those two judges in each of those two jurisdictions to decide Paul Manafort`s fate. 

The second judge, the one in D.C., who will get prosecutor sentencing submission this week within the next few days, she is the judge who has already ruled against Paul Manafort in some very materially significant ways.  On Friday night, we might remember we also got the unsealed transcript of the hearing in which that judge ruled that Manafort had repeatedly and intentionally lied to prosecutors, even after he pled guilty and agreed he would become a cooperator, in that ruling, that judge in D.C. was blunt and direct about Manafort`s lies.  Her ruling that his lies had been intentional and what she described as the implications of his lies. 

You should keep in mind this isn`t just what this judge said in a written ruling about the president`s campaign chairman.  This is what she said to his face in a court hearing where Manafort himself was present and in the room.  She said, quote, my concern is not with not answers or simply denying from Manafort, but the times he affirmatively advanced a detailed alternative story that was inconsistent with the facts. 

Quote: The record doesn`t seem to reflect the confusion and the defendant didn`t profess to be confused.  He does appear, however, to be making a concerted effort to avoid saying what really took place. 

On the issue of Konstantin Kilimnik, this guy who worked with Manafort and who prosecutors say is believed by the FBI to be linked to Russian intelligence, the judge said this about Manafort and Kilimnik.  Quote, we have now spent considerable time talking about multiple clusters of false or misleading or incomplete or need-to-be-prodded by counsel statements, all of it center around the dependant`s relationship or communications with Mr. Kilimnik.  She says, quote, this is a topic at the undisputed core of the special counsel`s investigation into any links or coordination between the Russian government and individuals associated with the Trump campaign. 

In terms of the way Paul Manafort lied about his interactions with this guy, Konstantin Kilimnik, the judge says, quote: I think it is fair to say that advancing that version of events was not just relaying what Kilimnik had said, it appears to be an attempt to exonerate him.  This is problematic attempt to shield his Russian conspirator from liability, and it gives rise to legitimate questions about where Mr. Manafort`s loyalties lie. 

So that`s the judge.  That`s the federal judge in D.C. who revoked Paul Manafort`s bail and order I had him to await trial in jail instead of at home when prosecutors brought her evidence and ultimately brought her new federal charges which said that Manafort had engaged in witness tampering while he was out on bail.  This is also the same judge who has been assigned to the GRU case, the early case in which Mueller and his prosecutors charged a dozen Russian military intelligence officers with multiple felonies for their alleged work on the Russian government`s influence operation to mess with our election in 2016 to benefit Donald Trump. 

Now, Mueller`s office subsequently told the court that that GRU indictment, it`s technically related to the more recent indictment brought against President Trump`s long-time adviser Roger Stone.  And because prosecutors have linked the Roger Stone case and that GRU case, the same judge handling the GRU case, which is the same judge about to sentence Paul Manafort in D.C., which is the same judge who revoked Paul Manafort`s bail, which is the same judge that ruled Paul Manafort deliberately lied to prosecutors, that is the same judge who`s now going to hear the Roger Stone case when he ultimately goes up on trial. 

And on Friday, it made a little bit of news when that judge, Judge Amy Berman Jackson in D.C., she rejected Roger Stone`s argument in which he said his case shouldn`t be linked to that GRU Russian military intelligence case.  That`s what he argued to her courtroom.  Prosecutors provided the judge with evidence that the GRU case and the Roger Stone case are, in fact, linked.  The judge agreed with prosecutors on that so Roger Stone lost that argument with the judge. 

That same day on Friday, that same judge also placed a gag order on Roger Stone and his lawyers, restricting their public statements about the Stone case so as to avoid tainting any potential jury pool for Roger Stone`s trial.  This was a limited gag order.  It was less restrictive than you might have expected in a case like this with a defendant like this. 

Mr. Stone, for example, while he is out on bond awaiting trial, he is blocked by this limited gag order from holding press conferences on the courthouse steps like he did after his initial arraignment, but under the terms of the limited gag order, he can still hold press conferences elsewhere or make other public statements about his case or at least he could.  It is hard to imagine that will continue now after Mr. Stone today posted on Instagram a close-up photo of the judge who is hearing his case. 

That judge who is involved in all of these other things, right?  This is the judge who is about to get her first sentencing recommendation on Paul Manafort.  She is the one who revoked Manafort`s bail.  She is the one who just ruled that Manafort intentionally lied to prosecutors.  She is the one who`s handling the Russian military intelligence GRU case, she is the one who`s been assigned to the Roger Stone case. 

That judge, Roger Stone, posted on Instagram photo of her today that included a little crosshairs, like a little target in the corner next to her head.  I`m not showing the image because if we don`t have to, none of us need to be in the business of showing pictures of federal judges with what look like crosshairs next to their heads.  But Roger Stone did that today. 

After initially posting that image online, Mr. Stone later took it down and then he reposted a few minutes later with a closer cut version of the same picture, one that crops out the crosshairs from next to the judge`s head.  But it is still the same written attack on the judge in the caption to the image. 

I don`t know if Roger Stone wants to be jailed for threatening a federal judge who is hearing his case or if he just really wants to be subject to a full gag order or I don`t know what he wants, but apparently, he`s going to be the latest fantastic float down this parade of geniuses we have seen from Russia scandal defendants in court thus far. 

Really?  The judge hearing your case?  Are you sure?  Any judge?  Are you sure? 

Late tonight just before we got on air, Roger Stone and his attorneys filed this document with the judge in his case, the judge whose picture he posted today with the crosshairs next to her head.  I kid you not, this is a real thing.  They have actually filed with the real court, this is the formal- looking headline they put at the top of their submission.  Roger J. Stone`s notice of apology. 

And then this is the filing.  Undersigned counsel with the attached authority of Roger J. Stone hereby apologizes to the court for the improper photograph and comment posted on his Instragram today.  Instragram.  Mr. Stone recognizes the impropriety and had it removed. 

Then attached to that from the lawyers is this little legal ditty from Roger Stone himself with Roger Stone`s signature attached.  Quote: Please inform the court that the photograph and comment today was improper and should not have been posted.  I had no intention of disrespecting the court and humbly apologize, extra space, to the court for the transgression. 

Concurrent with this misspelled and apparently hastily-dashed off apology to the courts under the headline "apology," concurrent with this Mr. Stone tonight has apparently dropped the second iteration of his Instagram post.  First, he just took down the crosshairs and reposted the thing that he posted again, and then he took that down, too. 

So, we will see how this works out.  This is not the sort of thing that the federal court system tends to take lightly. 

But with all of the cases related to the Russia scandal, A, it has been a parade of genius.  But, B, there is a little element of uncertainty and suspense right now as to whether things are going to change from here on out, whether things are going to proceed differently in all of the court cases than what we`ve seen before.  I mean, nobody knows quite what to expect from the new attorney general, William Barr, who is just starting his new tenure as head of the Justice Department, and incidentally, as the unrecused new overseer of the Mueller investigation. 

Just to heighten the drama and the suspense, the first few days of his tenure as attorney general since he was sworn in Thursday night have been dominated in the news by revelations from former FBI Acting Director Andrew McCabe.  He was deputy director of the FBI under James Comey.  He became acting FBI director once Comey was fired. 

And Andrew McCabe, of course, is one of a long string of senior intelligence and law enforcement officials who were involved in the initial investigations of Trump and the Trump campaign and potential ties to Russia, who have sense been targeted and/or fired in an effort to discredit them and destroy their credibility.  He is one in a long string of those officials and the list is kind of astonishing.

It is like James Comey himself, the director of the FBI, Director of National Intelligence James Clapper, Director of the CIA John Brennan, Trump`s handpicked attorney general, Jeff Sessions, his handpicked Deputy Attorney General Rod Rosenstein, head counterintelligence agent at the FBI, Peter Strzok, the top Russian organized expert at the justice department, Bruce Ohr.  They`ve all come under sustained attack from the president and honestly from conservative media and congressional Republicans. 

And that list, of course, includes Andy McCabe himself who is now doing interviews over these last few days because his book is out tomorrow.  Read it and weep. 

What has received the most attention thus far is his contention that Senior Justice Department and FBI officials were so disturbed and so concerned about what appeared to be the president`s inappropriate relationship with Russia that they considered the full range of options that might be available to them to try to handle that kind of extreme threat to the country -- this previously unimaginable possibility that somebody who was an agent of a foreign adversary had become president of the United States. 

(BEGIN VIDEO CLIP)

SCOTT PELLEY, CBS NEWS ANCHOR:  What was it specifically that caused you to launch the counterintelligence investigation? 

ANDREW MCCABE, FORMER FBI ACTING DIRECTOR:  It`s many of those same concerns that caused us to be concerned about a national security threat, and the idea is if the president committed obstruction of justice and fired the director of the FBI to negatively impact or to shut down our investigation of Russia`s malign activity, possibly in support of his campaign, as a counterintelligence investigator, you have to ask yourself, why would a president of the United States do that?  So, all of those same sorts of facts cause us to wonder, is there an inappropriate relationship, a connection between this president and our most fearsome enemy, the government of Russia?

PELLEY:  Are you saying that the president is in league with the Russians? 

MCCABE:  I`m saying that the FBI had reason to investigate that, investigate -- the existence of an investigation doesn`t mean someone is guilty.  I would say, Scott, if we failed to open an investigation under those circumstances, we wouldn`t be doing our jobs. 

(END VIDEO CLIP)

MADDOW:  And this, of course, is what has caused the White House and conservative media freak-out over Andrew McCabe`s book and what he is now publicly describing of his time as acting FBI director after James Comey was fired by the president.  And I know we like -- we`ve been marinating in this stuff for a long time, right?  When we frogs hopped into the pot together, the water was pleasantly cool.  It has been sort of an interesting but not terribly alarming situation, to feel the atmosphere getting cozier and cozier, and warmer and warmer.  Now, one of those bubbles forming at the bottom of the pot and rising to the surface, right?

But just step back for a minute.  It is an amazing snapshot in American history right now to be living through this.  To hear the guy who was the acting director of the FBI, a registered Republican with 20-plus years of service at the FBI, the senior official with this pedigree in international organized crime and counterterrorism and national security, now trying to speak for the record, to speak for history, to make the record as clear and as stark as possible so we all as citizens know that the FBI and the Justice Department at the highest levels had reason to worry.  They were worried enough about what they were seeing with regard to this president and Russia, literally they were worried enough about the threat that the president was the active agent of a hostile foreign country that they considered whether the vice president and half of the cabinet might act to remove that president from office without going through the impeachment process.  Through the sort of short-cut process to the removal of an unfit president that is spelled out in the 25th Amendment to the Constitution.  I mean, they considered whether the president should be surveilled as a potential foreign agent, as he would have been had this been any other investigation into a possible foreign agent infiltrating a sensitive national security position in the United States government. 

They had those discussions.  Ultimately, they decided what they could do at least was formally open a counterintelligence investigation into the president potentially being compromised by a foreign power, and the decision was made at the Justice Department that they would appoint a special counsel, a special counsel of unimpeachable integrity to pursue those core questions.  And this forever will be the time in American history that you live there.  Congratulations. 

But what I find fascinating about what Andrew McCabe is telling us now is something that`s not just important for us trying to get the history right here.  It is not just important in terms of us correctly understanding the origin story of what got the Mueller investigation going and all of the rest of it.  What I find fascinating about what McCabe is testifying to now is something that directly bears on what is happening right now at the FBI and the Justice Department and in our government. 

Because what McCabe is now able to describe publicly is the fact that what they set in motion and in terms of the special counsel investigation and this counterintelligence investigation into whether Trump was compromised, those things weren`t just set in motion the way they were because of the fear of the worst case scenario when it came to Trump and national security.  They didn`t just do those things because of the unimaginable prospect that the president was an active foreign agent representing some other country.  They specifically did those things and did them the way they did them because they were worried that one of the ways that worst case scenario might manifest in the Trump administration at this point in history would be that the intelligence and law enforcement leadership and institutions that were in charge of recognizing and thwarting and exposing this kind of a national security disaster would somehow be dismantled, taken apart, stymied, right?

I mean, think about it just in basic terms.  Imagine it as some other country going through this if that`s easier, right?  I mean, if a hostile foreign power played a role in installing somebody at the top of the government, somebody beholden to them at the top of a leadership job in another country`s government, one of the ways that might manifest in terms of that foreign country getting what it wanted is if that leader then moved to shut down all of the investigations, moved to shut down all of the law enforcement actions, moved to shut down all of the counterintelligence stuff that might blow up and expose what had just happened, right? 

Make sure that foreign country doesn`t get caught.  Make sure that foreign country doesn`t get punished, and make sure their conspirators and the compromised leader they installed don`t get nailed for what`s just happened. 

(BEGIN VIDEO CLIP)

MCCABE:  I was speaking to the man who had just run for the presidency and won the election for the presidency and who might have done so with the aid of the government of Russia, our most formidable adversary on the world stage.  And that was something that troubled me greatly. 

PELLEY:  How long was it after that that you decided to start the obstruction of justice and counterintelligence investigations involving the president? 

MCCABE:  I think the next day, I met with the team investigating the Russia cases, and I asked the team to go back and conduct an assessment to determine where are we with these efforts and what steps do we need to take going forward.  I was very concerned that I was able to put the Russia case on absolutely solid ground in an indelible fashion, that were I removed quickly or reassigned or fired, that the case could not be closed or vanish in the night without a trace. 

PELLEY:  You wanted a documentary record? 

MCCABE:  That`s right. 

PELLEY:  That those investigations had begun because you feared that they would be made to go away? 

MCCABE:  That`s exactly right. 

(END VIDEO CLIP)

MADDOW:  You feared that those investigations would be made to go away.  We are now a year and a half down the road from that conversation that Andrew McCabe was describing there on 60 minutes last night.  Since that conversation he was describing with the president, of course a year and a half ago, the president has, in fact, made every effort to try to make the investigations go away, including trying to destroy the careers and the credibility of every senior law enforcement and intelligence official involved in any senior way in the investigation. 

And now today with that warning from Andrew McCabe ringing in our ears, today, the Mueller investigation is, all of a sudden, under new management as a brand-new attorney general takes over and nobody knows what exactly to expect from William Barr as attorney general and whether or not he`s the guy who sent him there to make the investigations go away like McCabe feared from the beginning. 

But we do know that William Barr got the job of attorney general after sending an unsolicited 19-page memo to the White House as describing the Mueller investigation as fatally misconceived.  So, at this moment, at this sort of pivotal moment, I think sort of -- I think it is helpful for framing here in that it is Presidents` Day, right?  Focus.  But also, at this pivotal moment, I think there`s one element of all this that is one thing to watch and it has just started happening. 

And that story is next.  Stay with us. 

(COMMERCIAL BREAK)

MADDOW:  So, this is something that started to take shape in public the first week of December 2017.  December 5, 2017, which was a Tuesday. 

It was a moment that was a little bit of a fraught moment in the federal government because just a few days earlier, the previous Friday, Robert Mueller got himself his first cooperating witness when Trump national security adviser Mike Flynn pled guilty to a felony charge and signed a plea deal in which he agreed to cooperate with prosecutors from the special counsel`s office.  So, that happened, the first cooperating witness for Mueller.  That happens on Friday. 

It was the weekend, then Tuesday morning before dawn, a German publication called "Handelsblatt", I think that`s how you see it, I don`t know how to speak German, "Handelsblatt", that`s my guess, they ran this headline.  Quote: Mueller`s Trump-Russia investigation engulfs Deutsche.  Deutsche Bank has received a subpoena from the U.S. special counsel investigating possible collusion between President Donald Trump`s campaign and Russia.

It was the lead they ran that day.  Quote, Deutsche Bank has been served.  U.S. investigators are demanding it provide information on dealings linked to the Trumps, say sources familiar with the matter.  The subpoena is part of the probe by special counsel Robert Mueller and his team to determine whether the president`s campaign was involved in Russian efforts to influence the U.S. election.  Quote: It remains unclear whether Mueller requested information on President Trump`s own business dealings with Deutsche Bank or those people close to him.  Deutsche Bank apparently received the subpoena weeks ago.

So, again, that news broke in the predawn hours here in the U.S. on Tuesday, December 5, 2017.  German publication breaking that news. 

In Bob Woodward`s book "Fear," he says the day that story ran in that German publication, the president called his top Russia lawyer at 7:00 a.m. Eastern Time.  Quote, he was furious. 

The story then spread.  It was picked up by "Bloomberg" and by "Reuters" and by "The Guardian" and the "Wall Street Journal".  They all did their own reporting to follow up that scoop from "Handelsblatt". 

And the details were all a little different in each of the outlets, in each of the stories, but the basic idea was simple.  Federal prosecutors had subpoenaed the bank that held hundreds of millions of dollars in loans to President Trump, the bank that somewhat inexplicitly had done hundreds of millions of dollars worth of business with him after he was black balled by other banks in the country, a bank that perhaps coincidentally was also mired in a huge ongoing scandal over its role in a multi-billion dollar Russian money laundering scheme. 

Back in July of 2017, that summer, the president had said that any effort by prosecutors to look into his personal finances or his business finances would be a red line from his perspective, a line that could not be crossed.  We later learned months later in reporting from "The New York Times" that that day that that German newspaper broke the story of that subpoena and all of those other news outlets subsequently ran their own versions of those stories, December 5th, 2017, we learned later the president not only angrily phoned his Russia lawyer at 7:00 a.m. that day.  He also, according to "The New York Times", that day tried to mount an effort for the first time to fire Robert Mueller, to end his Russia investigation. 

Quote, in early December, President Trump furious over news reports about a new round of subpoenas from the Office of Special Counsel told advisers in no uncertain terms that Mueller`s investigation had to be shut down.  The president`s anger was fuelled by reports that the subpoenas were for obtaining information about his business dealings with Deutsche Bank.  "The Times" cited eight White House officials, eight, as it sources for that story. 

And we still don`t know why exactly that subpoena -- right, that investigative effort above all else would be the red line, that would be the thing that caused the president to move in and try to fire Robert Mueller.  But by the end of the day on Tuesday, December 5, 2017 -- it is interesting, most of the stories about that subpoena to Deutsche Bank, most of the stories had been at least partially walked back or at least softened.  Maybe there wasn`t a subpoena at all or maybe the subpoena was not about Trump himself.  Maybe the subpoena was about people just affiliated with Trump. 

I mean, if there is a financial story to tell at the heart of this scandal, for a number of reasons deutsche bank feels like the place you might start to try to figure that out.  We have never had complete clarity on what happened with those news reports back in December 2017 and the president`s reported freak-out about that story in particular and why that story ultimately got at least partially here and there walked back a little bit, at least a little softened.  Certainly it earned vigorous denials from the president and his own lawyers. 

David Ignatius at "The Washington Post", however, he now reports this.  Quote.  We`re entering a new phase of the Trump-Russia investigation in which the president`s efforts to contain the probe are failing.  Information he tried to suppress about his business and political dealings is emerging with more to come. 

Quote: A Deutsche Bank subpoena would be especially sensitive.  Trump was enraged by a December 2017 report that special counsel Robert Mueller had subpoenaed the bank`s records about its dealings with Trump.  Quote: the red line apparently held then. 

Trump lawyer Jay Sekulow told "Reuters" no Deutsche Bank subpoena has been issued or received.  According to Ignatius writing now, quote, one government source speculates that Rod Rosenstein, the deputy attorney general, blocked any attempt to compel disclosure of the bank`s Trump records to avoid getting himself or Robert Mueller fired.  That`s one government source speculating. 

I mean, honestly, we don`t know if that subpoena ever was issued or if it did get walked back somehow, and if so, if I did, by whom.  But the new phase of the investigation that David Ignatius is talking about here where he is saying that the president`s efforts to -- what did he say?  To contain the probe are failing.  This new phase of the Trump-Russia investigation he is talking about, it is not now one that is happening through the Justice Department and, therefore, it is not one that could be stopped by anyone in the Justice Department. 

It`s not one that would need to be overseen by the brand-new Trump- appointed attorney general, William Barr, who just started as the new A.G.  This new face of the Trump investigation that reflects all things that the president really doesn`t want anybody to look into, they`re not happening through the Justice Department.  These things are now happening through Congress where Democrats are now in charge in the House and where Democrats on the financial services committee started demanding Deutsche Bank records about Trump last year, actually the year before they started demanding records from Deutsche Bank. 

Without subpoena power of their own, the Democrats were never able to get meaningful response from Deutsche Bank.  But now, they`ve got subpoena power and they`re going for it.  They`re finally following that money trail.  And it appears they`re the first ones doing it. 

We know that the Senate Intelligence Committee didn`t do it.  The Senate Intelligence Committee said they hope Robert Mueller is doing it.  House Democrats say they don`t believe Robert Mueller is doing it and we saw the fiasco with the reporting that was walked back and everybody freaked out about on December 2017. 

If there`s a money trail in this story, the first steppingstone down that trail is Deutsche Bank to at least ask questions there.  Nobody has done that yet.  But now, they`re starting.  The Democrats in the House are starting, and apparently this may be the red line for the president. 

Honestly, it feels more like a red flag to a bull that`s already loose in a China shop, but that`s happening.  That is starting now and the person who is leading the effort joins us next.

(COMMERCIAL BREAK)

MADDOW:  California Congresswoman Maxine Waters is now the chair of the Financial Services Committee in the House.  Since 2017, she has been calling publicly for an investigation into the president`s business dealings, and specifically whether there could be any connection between his huge outstanding loans and his complicated business history with Deutsche Bank and Deutsch Bank`s involvement in a multimillion dollar Russian money laundering scheme. 

The president himself has called any investigation of his personal or business finances a red line that special counsel Robert Mueller should not and cannot cross, but Robert Mueller is not chairwoman Maxine Waters and Congress is a co-equal branch of government and she now has subpoena power as a committee chair, along with her counterpart on the House Intelligence Committee, Congressman Adam Schiff, Congresswoman Waters is now pursuing this financial investigation she has long called for. 

Joining us is Congresswoman Maxine Waters, Democrat from California, chair of the Financial Services Committee. 

Chairwoman Waters, thank you so much for being here tonight.  It`s really nice to have you here. 

REP. MAXINE WATERS (D-CA), CHAIR, FINANCIAL SERVICES COMMITTEE:  She is cutting out. 

MADDOW:  Oh, no. 

WATERS:  Yes. 

MADDOW:  Can you hear me, Madam Chair? 

WATERS:  Not that well. 

MADDOW:  Uh-oh.  Here is what we`re going to do.  We will take a quick break.  I will send a bunch of elves over to you to fix the audio and we will be back with you in just a moment.  We will fix this technical problem and be right back with Maxine Waters right after this. 

It`s live TV.  Sorry. 

(COMMERCIAL BREAK)

MADDOW:  Let`s try one more time.  The elves have been dispatched. 

Democratic Congresswoman Maxine Waters, chair of the Financial Services Committee in the House.  We believe we have fixed our technical gremlins. 

Madam Chair, can you hear me? 

WATERS:  Barely. 

MADDOW:  Well, I will talk loud and hope we work it out. 

WATERS:  I don`t know what`s happening. 

MADDOW:  Oh, dear.  Let me try this. 

Madam Chair, you have been asking for documents and testimony from Deutsche Bank as it pertains to President Trump basically since he was sworn in.  What are you interested in here?  What is it that you are investigating there? 

WATERS:  Rachel, would you repeat that one more time? 

MADDOW:  Sure.  We`ll give it one more try. 

Why is it that you have been asking for documents and testimony from Deutsche Bank basically since president Trump was sworn in?  What do you want to investigate there? 

WATERS:  Well, as you know, we have -- we have tried to get information from Deutsche Bank.  We have tried to get Hensarling (ph) who was the chair of the committee to hold investigations.  We have tried to get information from Mnuchin. 

MADDOW:  I am going to call an audible here and say we should bring her back when we can fix this problem because it is unfair to her to have her unable to hear to me and obviously unable to hear herself as she is speaking. 

So, I apologize on behalf of our technical gremlins who are not able to aided in the way they should have been.  We will fix this and have Chairwoman Waters back as soon as we can get this sorted. 

I will tell you while I was waiting for her to try to get her audio fixed, CNN and "Reuters" both reported that Deputy Attorney General Rod Rosenstein is going to leave the Justice Department in mid-March.  I have that bit of news for you, that has broken since we`ve been trying to sort this out. 

NBC has not confirmed this reporting at this point, but Deputy Attorney General Rod Rosenstein had been expected to leave the department when the new attorney general, William Barr, was sworn in.  Now, CNN and "Reuters" reporting that is scheduled for about a month from now in mid-March. 

All right.  We`ll be right back.  Stay with us. 

(COMMERCIAL BREAK)

MADDOW:  They laid it all out in a PowerPoint presentation.  Today was the day that state investigators laid out in North Carolina what happened to that bizarre North Carolina congressional race in November that still hasn`t been decided.  It is the race that appears to have been botched by a big criminal fraud scheme. 

In North Carolina, the state elections board today announced their findings from their investigation.  They said they found evidence of a coordinated, unlawful and substantially resourced absentee ballot scheme.  Investigators said a contractor named McCrae Dowless, who was hired by the Republican candidate in this race, he paid people to request batches of absentee ballots in that North Carolina district and then those people were paid to go door-to-door to collect those ballots. 

And that scheme is illegal in North Carolina, and the way it worked in this race was not just illegal as a technicality, today in their PowerPoint presentation, they finally spelled out how that scheme was apparently used to invent votes in this election -- certainly with the possibility that they invented enough votes to swing this election to the Republican candidate. 

One of the people who the Republican contractor paid to carry out this unlawful ballot scheme gave live testimony at the hearing today.  She actually happens to be the guy`s former stepdaughter.  She said McCrae Dowless coached her even on what she should say today at today`s hearing.  He gave her this little fortune cookie size scrap of paper telling her what to say.  It tells her essentially she should testify she had done nothing wrong and she should plead the Fifth. 

Now, she did not follow his instructions on that piece of paper.  Instead, she testified about what she described as his scheme where workers would forge signatures and fill in votes.  She says she improperly handled dozens of ballots in the ninth district herself and she says she was just one person on a team of people who was wrapped up in this effort. 

Again, the guy she was working for, McCrae Dowless, he was there at the hearing today but declined to testify unless the state board granted him immunity.  The board did not grant him immunity and that was pretty much the end of day one. 

The hearing will continue, but this is an election won by 905 votes.  I mean, it is tempting just to make this about the math, right?  Whether the result was based on wrongfully cast ballots or rightfully cast ballots that were trashed intentionally for the benefit of one candidate. 

But what this North Carolina board is being asked to decide is whether the election itself was tainted by what state investigators, again, are calling a coordinated, unlawful and substantially resourced scheme.  When the hearings conclude, the appointed state board will take a vote either to certify the results from November, which would hand the Republican the seat, or they could order a do-over, a fresh election.  Have voters pick a new winner in a new election. 

Taking any action will require at least one Republican or two Democrats to break party lines.  If they can`t do that, they can`t come to one of those two conclusions, this will ultimately go to Congress where the house itself has the power to order a new election in order to figure out which new member from the district will be seated in the House.  That`s question number one.  How does the race get decided, when and by whom? 

But, I mean, here is my other question.  Allegations of election fraud about this one Republican political operative, this guy McCrae Dowless, has circulated in North Carolina for years.  State investigators are talking openly about the unlawful activity that this scheme represents. 

So why is this not being decided in a courtroom right now with prosecutors and a jury?  Why is this still just an election board matter? 

Joining us from Raleigh, North Carolina, is Ely Portillo, a politics and government reporter for "The Charlotte Observer", who was at the hearing today. 

Mr. Portillo, it`s good to have you with us.  Thanks for joining us. 

ELY PORTILLO, THE CHARLOTTE OBSERVER, GOVERNMENT & POLITICS REPORTER:  Thanks for having me. 

MADDOW:  So, today was this long first day of hearings.  As I understand it, there`s going to be further proceedings as the state elections board tries to figure this out.  What do you think was the most substantive thing we learned today? 

PORTILLO:  There were a few things that we`ve learned today that were rumored or reported in the media for a while, but now we know that state investigators have come to similar conclusions.  For example, multiple voters told us that people came and collected ballots from them.  We`ve also heard from people in media reports that they were paid by McCrae Dowless, the political operative, to go out and get ballots.  Now we know that state investigators verified those facts.  They verified those allegations, and they are saying that, yes, this did in fact happen and this has been going on for a while hand this could have benefitted the Harris campaign. 

Also, the state told us today that there were allegations and evidence of witness tampering after the investigation started.  McCrae Dowless allegedly gathered the people he had been paying to collect ballots at his House once the investigation kicked off and according to one witness told them, if we all stick together, we`ll be OK because they don`t have anything on us.  So, those allegations are new and cast doubt on how long this has been going on after the investigation started, not just before and during the election. 

MADDOW:  What was striking to me, just watching the hearing today and reading people`s live blogs of the hearing today as y`all were covering it, what struck me was that I think from the outside in particular looking in on the race in North Carolina, a lot of it felt like process crimes.  Like in some states, it`s not necessarily illegal to collect people`s ballots and bundle them and bring them in. 

It also seems sort of like these are technical violations.  What was striking to me was hearing one of these people who are working as part of the scheme to say, yes, I filled in the votes.  I actually cast the votes.  I checked off the box or whatever it was for all of the Republican candidates where people left these things blank. 

Is this the first direct evidence, the first direct testimony we`ve had that this scheme wasn`t just to sort of undermine the way things were supposed to work, it was in fact to throw the election to a Republican candidate? 

PORTILLO:  Well, it was the first time we`ve heard someone say directly, yes, I filled in a ballot that wasn`t mine, I voted on a ballot that didn`t belong to me.  You`re right, that is in a different category than the process crime.  In North Carolina, it is illegal to collect ballots.  As you said, in states, that`s perfectly legal. 

The Mark Harris lawyers, though, they did try to make a distinction.  They asked the witness, did you ever fill in a vote for Mark Harris?  And the witness said, no, it was basically the down ballot and local races that were left blank that they filled in for Republicans. 

So, the Harris campaign is trying to draw a distinction and say, well, even if that happened, it still didn`t affect the outcome because it was Republicans, but in the down ballot local races.  So that was a point of contention today. 

MADDOW:  Fascinating.  Ely Portillo, "Charlotte Observer", politics and government reporting, I know being right now in the middle of this is pretty exciting.  It is a bizarre case.  Thanks for helping us understand tonight. 

PORTILLO:  Thank you. 

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

(COMMERCIAL BREAK)

MADDOW:  Happy Presidents` Day.  This is one of those holidays for which there isn`t generally an accepted way you are supposed to celebrate.  If you were in the Northeast, I know this was a particularly good Presidents` Day to go ice fishing.  However, if it is not your thing, I don`t really have any other recommendations. 

That said, this year for Presidents` Day, thousands of Americans did all celebrate the same way, which is that they turned out and protested the so- called national emergency that President Trump declared last Friday in order to try to build a wall on the southern border without money from Congress.  All told, there were more than 250 Presidents` Day protests all across the country today.  And it`s interesting, they were all pulled together in just the past couple of days since the president`s announcement. 

Here`s some footage from Oakland, California.  This is more than 200 people in formation spelling out the word "wall" with a blue X through it.  That is a good design. 

Cambridge, Massachusetts, they had a brass band and sing along.  Also had their brand-new Congresswoman Ayana Presley cheering them on.  In Fort Collins, Colorado, people were out despite balmy temperatures of 9 degrees.  In Detroit, Michigan, they kept warm by dressing up as the Statue of liberty and that big Trump baby head thing. 

This was Glen Falls, New York, in the snow today. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Make tacos. 

CROWD:  Not walls. 

UNIDENTIFIED MALE:  Make tacos. 

CROWD:  Not walls. 

(END VIDEO CLIP)

MADDOW:  Who among us would argue with make tacos, not walls?  Who among us? 

There were protests and good weather today, too, in Miami, Florida.  This is footage from Miami. 

Also, Yolo County, California.  I should tell you as we head to the late night hours tonight, there are actually still more of these still happening tonight and ongoing.  And since the emergency declaration, there`s been a lot of attention, and rightfully so, on the dozens of lawsuits that have been piling up at the courthouse door to try to block the emergency declaration from the president, but you can`t always tell in advance which one of these is going to apply. 

But this is turning out to be one of the Trump administration scandals that has a real citizen participation element to it, which can be a more powerful thing than you realize. 

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

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

Good evening, Lawrence.

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