New York Times reports from 1985-1994 Trump Business. TRANSCRIPT: 5/7/19, The Rachel Maddow Show.

Guests: Ted Boutrous, Eric Swalwell

CHRIS HAYES, MSNBC HOST:  We`ve got a new podcast.  It`s Tuesday.  Tuesday is #WITHpod day.  This podcast is near and dear to my heart because it`s about the thing in politics that drives me the most insane, which is deficit talk and the hysterical hyperbole around the deficits and the hypocrisy around deficits. 

We talk to Stephanie Kelton, who is an economist who`s got a brand-new theory that`s getting a lot more adherence, which basically says the government can spend whatever it wants, don`t ask how it`s going to pay for it.  It will blow your mind.  Take a listen wherever you get your podcasts. 

That is ALL IN for this evening. 

"THE RACHEL MADDOW SHOW" starts right now.  Good evening, Rachel. 

RACHEL MADDOW, MSNBC HOST:  I hereby preemptively say that anything that makes you crazy in politics makes me crazy, too.  Just by osmosis.  You never get crazy about anything, my friend. 

HAYES:  Oh, I`m always cool as can be. 

MADDOW:  Sort of are. 

HAYES:  It`s in segment meetings when I really lose it. 

MADDOW:  I can hear those down the hall.  So, I know that`s true. 

All right.  Thank you, my dear.  Much appreciated. 

HAYES:  You bet.

MADDOW:  Thanks to you at home for joining us this hour.  We`re having another one of those nights where the news is, like, can`t stop, won`t stop, see what you can do to catch up.

So, once again just like last night, we have a whole bunch of options in terms of where we could start tonight.  I think we should start with the most galling and inexplicable story of the evening and then move our way up from there.  I`ll tell you, if you are watching me on a delay right now or if you have, like, if you`re watching me with a DVR at home and have a pause option, I`m going to give you the option to take a quick shower break after this first story.  We`ll just pause and powder. 

All right.  Just six days before the Iowa caucuses in 2016, then- presidential candidate Donald Trump got a critical endorsement from a most unexpected place.  He got a very high-profile endorsement from this man, Jerry Falwell Jr.  Jerry Falwell Jr. is known mostly for being Jerry Falwell Jr.  But also for inheriting control of his dad`s cash cow televangelist college which is called Liberty University. 

But when Jerry Falwell Jr. decided to endorse Trump in January 2016, he not only endorsed him at that key moment ahead of the Iowa caucuses, he also heaped praise on him, calling Trump, quote, a wonderful father and a man who I believe can lead our country to greatness again.  He said, quote: In my opinion, Donald Trump lives a life of loving and helping others as Jesus taught in the great commandment.

I mean, right, that is so obviously about Donald Trump.  You wouldn`t even need to see the word, Trump, there.  You`d know somebody with that kind of quote, that would be the obvious choice for that kind of endorsement.  What? 

I mean, Ted Cruz had literally launched his 2016 presidential campaign with his family at Liberty University.  He launched his campaign there, around telling the whole story of his father`s, his own father`s life as an evangelical preacher just like Jerry Falwell. 

But nonetheless, Jerry Falwell Jr. snubbed Ted Cruz and all the other candidates and threw his support to Trump instead, describing him as the most Jesus-like of all of the candidates.  Trump seen here in his cameo role pouring champagne all over the Playboy symbol on the limo in the soft porn Playboy movie he made in the year 2000. 

So, Jerry Falwell Jr. threw his support behind Trump at that key moment.  What was that all about, right? 

Well, tonight, there`s this from "Reuters".  Quote: Months before evangelical leader Jerry Falwell Jr.`s game-changing presidential endorsement of Donald Trump in 2016, Falwell asked Trump fixer Michael Cohen for a personal favor said Cohen in a recorded conversation reviewed by "Reuters".  Falwell said someone had come into possession of what Cohen described as racy, personal photographs, the sort that would typically be kept between husband and wife. 

According to a source familiar with Cohen`s thinking, the person who possessed the photos destroyed them after Cohen intervened on the Falwell`s behalf.  "Reuters" reports that Michael Cohen recounted this incident in a recorded conversation with comedian Tom Arnold, recording that "Reuters" was able to review.  Portions of that recording were first reported last month by "The Wall Street Journal". 

I want to be clear that NBC News has not had an opportunity to hear this audio-taped conversation.  So, NBC has not been able to verify it.  NBC News I should tell you have reached out to the Falwells.  They have yet to comment as yet. 

Think about what this means here.  The report goes on to say that, quote, the Falwells enlisted Michael Cohen`s help in 2015 according to the source familiar with Cohen`s thinking.  2015, of course, was the year Trump announced his presidential candidacy.  At the time, Cohen was Trump`s confidant and personal lawyer and he worked for the Trump organization. 

Quote: The Falwells wanted to keep a bunch of photographs, personal photographs, from becoming public, Cohen told Arnold.  I actually have one of the photos.  It`s terrible.  Oh, you kept one?  You made the blackmailer destroy all the rest but you kept one? 

The Falwells told Cohen that someone had obtained photographs that were embarrassing into them and that person was demanding money.  "Reuters" was unable to determine who made the demand.  The source said Cohen flew to Florida and soon met with an attorney for the person with the photographs.  Cohen spoke with the attorney telling the lawyer that his client was committing a crime and that law enforcement authorities would be called if the demands didn`t stop, according to the source.  The matter was soon resolved, the source said, and the lawyer told Cohen that all of the photographs were destroyed.  But Cohen says he kept one. 

So according to this "Reuters" report, the Falwells enlisted Michael Cohen`s help in 2015 to make this blackmail threat go away involving, what was the word, racy personal photographs.  Jerry Falwell`s racy personal photographs.  Then the following January, just ahead of the Iowa caucuses, Cohen helped persuade Falwell to issue his endorsement of Trump`s presidential candidacy at a critical moment just before the Iowa caucuses.  Might have been helpful to have that one racy, terrible, photograph in reserve when it came to being persuasive about when to issue that endorsement. 

"Reuters" says it has no evidence that Falwell`s endorsement of Trump was related to Cohen`s handling of the photo matter, but what they`re reporting is that crucial and otherwise utterly inexplicable endorsement followed basically immediately Michael Cohen taking care of a naked pictures problem for the guy who did the endorsing and Michael Cohen says he retained one of the photographs.  Ahem.

Asking for a friend, is an endorsement intended to influence the outcome of a federal election a thing of value?  And are you allowed to arrange for such a thing of value to be contributed to a campaign by quashing naked picture blackmail efforts for televangelist with added insurance of keeping some of the naked pictures for yourself as a reminder?  Is this normal? 

This is your presidency now.  Behold.  This is your life.  This is our life.  This is how we live now. 

So, yes, as promised, at this point, feel free to hit pause, take a quick shower, little eau de toilette, well freshen up, shake it off, because that story as amazing as it is, that is just the start today. 

In February of 2016, so right after the Iowa caucuses, at the height of the presidential primary for the 2016 election, "Forbes" magazine published this op-ed espousing what amounted to a pretty exotic and unpopular view at the time.  The op-ed was written by a sort of low-profile tax lawyer from a small firm in Southern California who argued in this piece in "Forbes" that presidential candidate Donald Trump absolutely should not release his tax returns, never mind the decades of precedent from every president and presidential candidate in the post-Watergate era, never mind all the other candidates in 2016 releasing their tax returns.  Never mind that tradition becoming so firmly entrenched over four decades that it was previously inconceivable that any candidate would get anywhere near the actual nomination, let alone the White House, without releasing his or her taxes. 

This random tax lawyer in southern California published this piece in "Forbes" saying, no, no, no, as far as I`m concerned, Donald Trump should not release his taxes.  When Donald Trump was elected president of the United States months later, he decided, well, when it was time to pick a nominee to become commissioner of the IRS, wasn`t there a guy who wrote an op-ed around the campaign? 

He looked around this great land of ours, full of 320 million capable souls and decided the best qualified person in the entire country to run the IRS during the Trump administration would be that random guy who wrote that period op-ed in 2016 saying, of course, Donald Trump shouldn`t release his taxes.  That`s who Trump nominated to run the IRS.  He remains the IRS commissioner today. 

Now, commissioner, of course, that`s the number-one job in the IRS.  The number-two job in the IRS is the chief counsel at that agency.  This past month, "The New York Times" reported that President Trump personally intervened with the Republican leader in the Senate, Mitch McConnell, to ensure that his handpicked nominee to be IRS chief counsel, his handpicked nominee to be the number two person in the IRS should get his nomination pushed through the Senate and quickly and as a matter of priority. 

"The Times" reported the president was so personally focused on getting that particular nominee confirmed that he told Senator Mitch McConnell, the Republican leader in the senate, that it was, quote, a higher priority than voting on the nomination of William Barr to be attorney general.  Mitch McConnell, naturally, dutifully obliged.  All Republicans in the U.S. Senate dutifully obliged.  And so, the president`s handpicked IRS commissioner who had written that op-ed during the campaign saying Trump shouldn`t release his taxes, he at the IRS was soon joined by a new number two official, by a new chief counsel who the president had personally intervened to install in that role.

It will not surprise you that it later emerged that that handpicked nominee to be chief counsel at the IRS, which the president -- the person the president personally insisted into that agency, he had previously advised the Trump Organization on tax matters and he had been partners at a D.C. law firm with Trump`s current tax attorneys. 

So that was how we set the same for this moment tonight with Republican senators and Mitch McConnell, in particular, ushering into the top two jobs at the IRS these two guys who were plucked basically from obscurity and installed at the top of the tax system in the U.S. while both having very specific ties to the president`s particular tax situation. 

And now, breaking late tonight is a bombshell story on the front page of "The New York Times" that makes as clear as it has ever been why President Trump may have been willing to move heaven and earth to block every conceivable means there might be for regular humans and investigators of all stripes to ever see his taxes.  Headline, again, this is just posted tonight at "The New York Times."  Quote: Decade in the red.  Trump tax figures show over $1 billion in business losses. 

This is from Russ Buettner and Susanne Craig, investigative reporters at "The New York Times" who recently won a Pulitzer Prize for their reporting on the president`s financial history and specifically on his tax history.  You might remember their previous reporting from a few months ago.  That`s how we learned that even though Trump had long told this self-aggrandizing tale of how he was a self-made man, the only thing he got from his family was a little $1 million loan he had to pay back to his dad, last year, this investigation in "The Times," in fact, found that Trump had received at least $413 million from his father and that appeared to be most of the story of Donald Trump`s wealth and his purported business success. 

It was all a matter of good planning.  He planned his birth perfectly to inherit nearly a half billion dollars from his father.  It was excellent acumen, right? 

"The Times" also reported last year on numerous schemes that the Trump family, including President Trump, himself, appear to have engaged in to evade taxes and defraud their tenants in the real estate empire that Trump`s dad build in the outer boroughs of New York City.  Well, that won them the Pulitzer Prize. 

Tonight, "The Times" add tons more information to what`s known about the president`s financial history and his tax history. 

Quote: By the time his master of the universe memoir, "Trump: The Art of the Deal" hit bookstores in 1987, Donald J. Trump was already in deep financial distress, losing tens of millions of dollars on troubled business deals.  Mr. Trump was propelled to the presidency in part by a self-spun narrative of business success and of setbacks triumphantly overcome.  He`s attributed his first run of reversals and bankruptcies to the recession that took hold in 1990.  But ten years of tax information newly obtained by "The New York Times" paints a different and far bleaker picture of his deal-making abilities and his financial condition.

I can remember, this is the same reporting team that last year put together that detailed financial picture of the business empire and all the financial structures and tax structures that were created by Trump`s dad.  Well, on Twitter tonight, one of the reporters on this new "New York Times" piece sort of bottom-lines the dad and lad story.  The Trump Sr./Trump Jr. dynamic now that they`ve got access to all of this new information about Trump the younger. 

Susanne Craig bottom-lines this on Twitter tonight as this, quote: Father and son, we now have tax information on Fred Trump and Donald Trump for a number of years.  The up shot, Fred always made a lot of money.  Donald always lost a lot of money.

In terms of the new information they got ahold of, Russ Buettner and Susanne Craig have obtained basically ten years of federal tax information from Trump, from `85 to -- 1985 to 1994.  Now, they don`t have his full returns.  They say they`ve got printouts from his IRS tax transcripts and they`ve got specific data from his basic federal tax form from his 1040. 

But from that information, what they`re able to piece together is just brutally negative.  Quote: The numbers show that in 1985, the first year for which they obtain new tax information from the president, 1985, Trump reported losses of $46.1 million from his core businesses.  He then, quote, continued to lose money every year for the next ten years totaling $1.17 billion in losses for the decade. 

Quote: In fact, year after year Trump appears to have lost more money than any other individual American taxpayer.  Mazel tov.  "The Times" figured this out when they compared his results with detailed information the IRS compiles on an annual sampling of high income earners.  Trump`s core business losses in 1990 and 1991, more than a quarter billion dollars each of those years, that was more than double the losses of the taxpayers in the IRS information for those years. 

And again, this is not super current tax data, right?  The latest year for which they`ve got information is 1994.  They got 1985 to 1994.  But that period is formative in terms of his image, right?  That period from the mid `80s to mid `90s is exactly when Trump built his supposed business success story that became the whole basis of his brand, that became the whole basis of his career thereafter. 

Well, now, we know what was really happening over that period.  In 1985, he lost $46 million.  In 1986, he lost $69 million. 

1987, he lost $42 million.  1988, he only lost $30 million.  That was a good year. 

1989, oh, bad year, lost $182 million.  1990 and `91 combined, he lost $518 million over those two years.  Over the next three years, he lost an additional $287 million. 

So, where do you get that much money to lose?  I mean, however, he was able to wring money out of his dad`s business, which he ate and killed, however he was able to convince banks and other lenders to give him money to use, over ten years, he lost $1.17 billion.  And, you know, maybe this explains some things because maybe the president does not want anybody to know that. 

Maybe the president does not want people to know that over this ten-year period of taxes, at least "The New York Times" has now reviewed, over ten years, President Trump only paid any income tax at all in two of those ten years.  Eight of the ten years, he paid nothing.  In 1987, 1986, he paid a little bit but other than that nothing. 

Maybe the president does not want people to know about a particularly strange anomaly that appears in his tax returns in 1989.  Out of the blue that year, "The Times" reports tonight that President Trump declared to the IRS that he made $53 million in income that one year from interest, over $50 million in interest income.  I mean, you know, like you have a checking account or savings account that pays you a little interest or have some other financial instrument that pays you some kind of interest. 

How big would those accounts or holdings have to be to pay you $53 million just in interest in one year alone?  As a standalone thing, and no other year in this entire decade does he report anything remotely close to that much interest income?  Where does it all come from in that one year? 

These financial reporters at "The Times" tonight take their best guess and they come up empty.  Quote: Taxpayers can receive interest income from a variety of sources, including bonds, bank accounts and mortgages.  High- yield bonds, though less common today, were popular with institutional investors in the 1980s.  To make $53 million in interest, for example, Mr. Trump would have had to own nearly $400 million in bonds that year that were generating 14 percent return for him that year. 

Hard data on most of Trump`s business life is hard to come by, but public findings from New Jersey casino regulators show no evidence that he owned anything capable of generating close to $53 million annually in interest income.  But nevertheless, there it is, that`s what he told the IRS he got that year. 

The president`s former personal attorney who also worked at the Trump Organization, Michael Cohen, he started a federal prison sentence yesterday on a number of felony charges, including his own tax evasion charges.  One of the things Cohen told Congress under oath before he reported to prison was that he had evidence of Trump routinely inflating his assets when trying to get loans from banks or when trying to get favorable policies from insurance companies.  That testimony from Michael Cohen led law enforcement officials in New York state to issue subpoenas to President Trump`s bankers and insurance agents. 

Those subpoenas at the state level have not been subject to blocking litigation.  Those subpoenas have gone forward.  His insurance agents and his banks are reportedly Cooperating with those subpoenas.  They are conveying information to New York state authorities including New York state financial regulators in response to those requests. 

Trump`s bankers and his accounting firm have also been subpoenaed for Trump-related financial information.  Those subpoenas are from congressional committees, telling Mazars accounting firm and Deutsche Bank and Capital One bank to hand over documentation about their financial dealings with Trump.  The financial editor at "The New York Times" just reported recently that the material that Deutsche Bank prepared to hand over in response to those subpoenas included multiple years of Trump`s federal tax information. 

The deadlines for those financial firms and banks to hand over that kind of information to Congress, they have been pushed back temporarily because the president and his adult kids, he`s a great father, have sued to stop those conversations from handing over those documents and complying with those subpoenas.  But for all the fights about executive privilege and the regular tension between the executive and legislative branches and all the other ways this stuff traditionally gets fought out, no serious legal observers seem to think those lawsuits filed by Trump and his kids trying to block the banks and accounting officials from handing over those materials, nobody seems to think those lawsuits have a prayer in the long run. 

I mean, you can`t stop a third party, you can`t stop a private entity from complying with a lawfully issued subpoena because you don`t want them to hand your stuff over.  But the president`s desperation to try to stop any of this financial stuff, any of this tax stuff in particular from being handed over, it`s so complete, it`s so exhaustive, that even those destined to be futile lawsuits, those doomed lawsuits trying to block those congressional subpoenas to those banks and accounting firm, those are apparently worth the expense to the president just because they bought him a little more delay, a little more time even though ultimately they will fail. 

There is this dam he`s trying to build here and shore up here to hold back access to his tax information and his financial information, and it is starting to spring leaks all over the place.  I mean, otherwise we wouldn`t have this headline story tonight in "The New York Times."  And it is hard to know what`s going to happen when that dam finally breaks, given the president`s palpable desperation on this issue.  I mean, right? 

He`s declared his red line.  This is his red line getting crossed.  He has installed Trump-connected figures at the top of the IRS.  He`s got the treasury secretary bluntly defying the law on his behalf.  We assume Steven Mnuchin is doing that in part on advice from those Trump-installed figures at the top of the IRS. 

We inquired with the Treasury Department tonight as to whether or not the chief counsel at the IRS was recused from weighing in on this controversy over the president`s tax returns potentially being handed over to Congress.  We asked if the chief counsel of the IRS, that number-two official in the IRS, we asked if he has been recused from the decision-making process because of his prior work advising the Trump Organization on tax matters.  We thus far have not heard back from the Treasury Department.  We will let you know if we do. 

But the fact that they tried to install those guys at the IRS in the first place tells you something about the prioritization of these matters for this president.  He`s doing everything he can, but all of these pathways are either opening up already or they are going to open up.  Whether it`s the black-letter law that says, story, Steven Mnuchin, the IRS has to turn over Trump`s tax returns to the House Ways and Means Committee. 

Yes, they`re trying to say no to that, but that`s a fight they`re not likely to win.  Yeah, there`s these subpoenas to Deutsche Bank and Mazars that they`re trying to block with a lawsuit and, again, that lawsuit has won them a delay.  Ultimately, that is not a fight they`re likely to win. 

And, again, "The New York Times" is reporting that it is a ton of Trump tax information that is included in the material that Deutsche Bank assembled and had ready to hand over and that they presumably will hand over when ultimately they`re inevitably compelled to comply with that subpoena.  It`s also, you know, it`s investigative reporting, right? 

This Pulitzer Prize-winning team had previously laid bare the Trump family finances and what they appeared to be their history of rank tax evasion and fraud, laying bare the president`s myth of having built his own business empire rather than having taken and inherited then squandered his dad`s, right?  All of these paths will open.  They`ll open, you know, in -- they`ll open in Congress, they`ll open by virtue of the law.  They`ll open through open-source reporting. 

Tomorrow, another path is going to open, too.  Tomorrow in the New York state legislature, of all place, that body is expected to pass new legislation that will allow President Trump`s state taxes to be conveyed to the Ways and Means Committee in Congress, upon receipt of request from that committee.  State tax returns and federal tax returns don`t show exactly the same information but with the president both domiciled and having his business entities headquartered in New York, the prospect of New York tax authorities, right, sending truck-fulls of Trump tax information up to Capitol Hill upon the passage of this legislation tomorrow.  I mean, that just -- it means that this story is coming out. 

The Trump tax information and financial information is coming out.  And part of the reason this is fascinating is just in the substance of it.  I mean, at the time of his life when the president was marketing himself as being the most successful businessman of his age, we now know his business record at that time was that he was on average losing $100 million a year. 

Honestly, if I had $100 million in cash and a warehouse full of matches, I could not figure out how to burn $100 million over the course of a year, let alone how to do it every year for ten straight years. 

But that is the business acumen that he had which he has nevertheless marketed to Americans as a great success story up to and including the brand that he ran for president.  So, on its substance, it`s interesting to see this information, but it`s also interesting in form because of the president`s palpable and sustained and energetic desperate maneuvering to try to stop this stuff from getting out.  I mean, yes, on the one hand, it makes you wonder what`s he so afraid of?  We`re getting more of a window into that tonight, right, with this reporting from "The Times." 

On the other hand, though, it makes you wonder what he might be capable of when this stuff ultimately does comes flooding out.  This is clearly what he cares most about.  He cares most about stopping this.  This is happening, anyway.  How will he respond to that? 

And, of course, this doesn`t happen in a vacuum.  There obviously is something special about the president`s taxes and his financial statements that cause him to behave in a specific way around this material that isn`t really true to this degree for anything else.  But at the same time, he is fighting this losing battle to keep his taxes and finances secret.  Fighting on all of these fronts to block his taxes and finances from being exposed. 

Today, we`ve also got his administration crosses all kinds of new Rubicons to try to block everything he can related to the Mueller report as well.

And we got more news ahead on that as well. 

Stay with us. 

(COMMERCIAL BREAK)

MADDOW:  Today, the White House told former White House counsel Don McGahn to defy a congressional subpoena, not just for his testimony, but for handing over documents that McGahn provided to and discussed with Robert Mueller as part of the Mueller investigation.  In addition to that, tomorrow morning, we are expecting the House to vote to find Attorney General William Barr in contempt of Congress for him defying yet another subpoena.  The subpoena he`s defying orders him to hand over the Mueller report without redactions and the underlying evidence supporting Mueller`s findings as well. 

Like with President Trump`s taxes and financial information, we are definitely seeing urgency in the Trump White House to try to block information from being made available to Congress and to the public about Mueller`s investigation.  That includes not jump the underlying evidence from Mueller`s investigation, but testimony from witnesses, documents from witnesses, testimony from Mueller, himself. 

But, again, like with Trump`s taxes and financials, it`s starting to seem clear that there are multiple paths by which that stuff might come out, no matter how hard President Trump and the Trump White House fight against it.  For example, the House Intelligence Committee today, both the Democratic and Republican leadership of that committee, they renewed their demand that the attorney general hand over to them the redacted information from the report and the underlying evidence from the report that pertains to national security and intelligence matters. 

And again, that`s a bipartisan demand from the Intelligence Committee in the House.  When`s the last time they did anything on a bipartisan basis?  It`s also not a controversial lead gambit that they are trying here.  There`s a law since 9/11 that says the intelligence committee could get that stuff when they request it.  Attorney General Barr has so far tried to ignore the request.  The committee said today they`ll resort to compulsory measures from here on out if they keep not getting a response and that presumably means more subpoenas, that presumably the attorney general and the Trump administration will try to defy as well. 

But, you know, you can only hold back this stuff for so long, especially when there are multiple paths by which any and all of it may end up being released. 

Joining us now here on set is Ted Boutrous.  He represents the Reporters Committee for Freedom of the Press, which among other things has been suing to obtain a full, unredacted copy of the Mueller report under the Freedom of Information Act. 

Mr. Boutrous, thank you so much for being here.  It`s really nice to have you here.

TED BOUTROUS, ATTORNEY REPRESENTING REPORTERS COMMITTEE:  Thank you for inviting me in.

MADDOW:  One of the reasons I wanted to talk to you is because you have suggested the law might be way more on Congress` side than even they think when it comes to their right to access material from Mueller`s investigation and Mueller`s report.  Why do you think that? 

BOUTROUS:  I think that because there`s a provision in rule 6E, the grand jury secrecy rule, it`s an exception that specifically was enacted after 9/11 to allow the attorney general and Justice Department to share information relating to a hostile foreign government attack, to foreign intelligence, to counterintelligence, that comes up in a grand jury, share that with foreign intelligence officials, government officials, who have something to do with those issues. 

Congress qualifies.  The chairman of the judiciary committee, the chairman of the intelligence committee, they are exactly the kind of people who have a right to get that information without a court order and you`ve heard Attorney General Barr say he can`t do it.  He just doesn`t want to do it.  The law says he can do it then they have to notify the court afterwards, but they can do it and Congress has a right to that information. 

MADDOW:  So this is part of the reason I wanted to talk -- have you here in person to talk about this because it has been my understanding, as a non- lawyer, that the grand jury material, which, again, is the source of a substantial proportion of the redactions from Mueller`s report, my understanding, particularly from looking at the Watergate precedent among other things is you have to have a judge sign off, you have to go to the court and so, therefore, the controversy is that Attorney General Barr won`t join the Congress in going to court and saying, yes, please release that information, please let Congress see it. 

You`re saying it doesn`t have to go to a court in the first instance.  The Justice Department should just release this material on the basis of pure statue. 

BOUTROUS:  Exactly.  It`s right in Rule 6E and says the attorney general, government lawyers may give that information to government officials who responsibility for national security --

(CROSSTALK)

MADDOW:  So that`s within Barr`s discretion then. 

BOUTROUS:  Absolutely.  Well, he has to do it. 

MADDOW:  He has to do it.

BOUTROUS:  He can do it, and Congress has oversight powers to get that information.  I think he has to do it, and with Congress` oversight powers.  When you put those two things together, there`s no basis for him not to turn that information over to Congress. 

MADDOW:   So when Devin Nunes, the former intelligence committee chairman, sort of rabid Trump supporter, Republican, now a ranking member of the Intelligence Committee and Democratic Chairman Adam Schiff, they`ve sent now this series of letters to the justice department saying we want all information, we want the whole unredacted report and all the underlying evidence and we should get it as the intelligence committee, are they laying a predicate, what would to be, for a lawsuit, if Barr doesn`t respond to this?  Is this -- this avenue also going to end up in court? 

BOUTROUS:  That could be another lawsuit.  We filed an action on April 1st on behalf of the reporters` committee seeking all the -- the court to issue an order authorizing the attorney general to release any grand jury information in the report and it was kind of our hint-hint to Congress, come in with us.

MADDOW:  Yes.

BOUTROUS:  We would love to have them -- it`s pending -- have them join our lawsuit.  They have even stronger standing, obviously, than we do representing the press in the public.  And so, I think that they -- they need to act quickly. 

You keep hearing people say, well, it will take years and years.  Courts can move quickly.  They can expedite things.  They do expedite things. 

And Congress has an urgent need for this information for the public to know what`s happening to legislate for the future, to find out what`s happening in our country.  We have a transparency emergency going on here. 

MADDOW:  Ted Boutrous who represents the Reporters Committee for Freedom of the Press, and an esteemed member of the First Amendment Bar, I looked forward to having you here for a long time.  Thanks for coming and helping us --

BOUTROUS:  Well, thank you so much.  It`s good to see you. 

MADDOW:  And this is something that I feel like I was -- it`s not that I was getting it wrong directly, it`s that I was not accounting for this post-9/11 law in the way I`ve been explaining it to my audience.  So, thank for helping me clarify (ph).

BOUTROUS:  Thank you for inviting me in.  It`s great to be here. 

MADDOW:  Appreciate it. 

BOUTROUS:  Thank you. 

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

(COMMERCIAL BREAK)

MADDOW:  So we have the extensive narrative in the Mueller report about what happened between President Trump and White House counsel Don McGahn.  We have the lawyer for Don McGahn confirming that, yes, the way that story is told in the Mueller report is correct. 

What we do not have so long as the president can keep it this way, is any follow-up congressional testimony from former White House counsel Don McGahn, himself, and we do not have the documents that the House Judiciary Committee subpoenaed Don McGahn in order to get documents about the things he testified to Mueller about for his report. 

Well, today, on the deadline where the subpoena -- the deadline established by subpoena for McGahn to hand over those documents, today, the new White House counsel, Pat Cipollone, told Congress that the material would never be landing in their inboxes. 

Quote: The White House records remain legally protected by disclosure under longstanding constitutional principles because they implicate significant executive branch confidentiality interests and executive privilege. 

They implicate executive privilege?  I mean, you can argue whether saying something implicates executive privilege is the same as the president asserting executive privilege.  We`ll have more on that in just a moment. 

But the other big question is whether the White House retains any right to assert executive privilege over McGahn and these documents and potential testimony at all.  Now that the Mueller report has been made public, including all that material that Don McGahn gave Mueller.  You either see stuff as privileged or you don`t.  If you let Mueller testify about it to - - if you let McGahn testify about it to Mueller then you let the Mueller report become public, well, you`ve admitted that the stuff is not covered by privilege. 

It`s apparently not just Democrats who are raising this question now, though.  Check this out.  This is tucked into the "Washington Post" report tonight on the White House telling Don McGahn not to comply with this congressional subpoena. 

Quote: Some in the White House see the legal arguments as dubious because the administration has already waived privilege for the Mueller report.

So it appears that even inside the Trump White House right now, they know the attempt to block Don McGahn from complying with the subpoena is a dubious legal argument, but despite that division, even in the White House, they are trying it, anyway.  When even your own White House is that divided over even trying this, how long are you likely to hold out? 

Hold that thought. 

(COMMERCIAL BREAK)

MADDOW:  The witnesses who spoke to Robert Mueller for his investigation may all end up before Congress, at some point or another.  As Congress investigates Mueller`s findings and tries to flesh out the facts described in his report. 

Well, today, the man who would have been the first star witness before Congress, former White House counsel Don McGahn, he was ordered by the Trump White House to not comply with congressional subpoena that directed him to hand over documents by 10:00 a.m. this morning.  Well, now, tonight, the Judiciary Committee chairman has responded to the White House taking this action to block don McGahn for responding to this congressional subpoena. 

Chairman Jerry Nadler telling the White House tonight in a letter, quote: McGahn is required to appear and provide testimony before the committee absent a court order authorizing noncompliance.  Otherwise, the committee will have no choice but to resort to contempt proceedings to ensure that it has access to information it requires to fulfill its constitutionally mandated duties.

Joining us now is a member of both the Judiciary Committee and the Intelligence Committee in the House.  He`s also a 2020 Democratic presidential contender, a California congressman, Eric Swalwell, joining us tonight. 

Sir, thank you for your time. 

REP. ERIC SWALWELL (D-CA), PRESIDENTIAL CANDIDATE:  Of course.  Good evening, Rachel. 

MADDOW:  So, tonight, Chairman Nadler of the Judiciary Committee is saying that Don McGahn will be held in contempt if he doesn`t respond to this document, the demand for documents under the subpoena, and if he doesn`t show up to testify on May 21st.  What should we expect to happen now, what do you think is going to happen in terms of how this will play out? 

SWALWELL:  We`re probably going to have to charter a contempt subcommittee for all the lawlessness of the folks over there, but, Rachel, it doesn`t have to be this way.  What I mean is that Don McGahn doesn`t have to follow a lawless order from the White House.  He knows.  He`s a lawyer.  He`s a seasoned lawyer. 

That the privilege was already waived when he handed those documents over to the Mueller team and also that this assertion that sometime in the future, he may be in a position that would implicate executive privilege.  It`s already been ruled on by the courts as not asserting executive privilege.  And so, he should just come and be the first person in this administration who raises their right hand and does the right thing and tells the truth. 

MADDOW:  One of the dynamics at work here is that since the Mueller report in its redacted form was made public and Don McGahn`s name is all over it and he`s listed more than 150 times, his repeated interviews with the special counsel`s office and the FBI are cited over and over and over again in terms of telling the narrative about what was happening around obstruction of justice in the White House.  Since that all came out, the president has been denouncing don McGahn as a liar, saying that he lied about all these incidents.  Things he said happened in the White House didn`t happen in the White House. 

And after saying that McGahn is a liar, that the he lied to investigators which is a crime, the White House is also saying and Don McGahn is not allowed to speak to Congress to clarify the record or to defend himself while he denounce him as a liar.  I wonder if that creates yet another dynamic here that is almost unsustainable in terms of McGahn going along with what the White House says. 

SWALWELL:  And yes, he shouldn`t, Rachel.  I`m asking him tonight, be a patriot.  Be someone who puts your country above the lawlessness of this White House. 

And again, this is a cycle that we see from Donald Trump.  I`ll show you my taxes.  I just have to wait until the audit`s over.  You`re never going to see my taxes.  I`m going to order the secretary of treasury to not give them to you. 

I was exonerated.  I was the most transparent president ever investigated.  Mueller can testify.  Mueller can`t testify.  McGahn can`t testify. 

This is just the cycle of Donald Trump.  We`re just, you know, we`re not going to put up it with it anymore because we`re not powerless.  We have subpoenas and the courts are on our side. 

MADDOW:  Congressman, if you wouldn`t mind holding on for a second, there`s another matter I`d like to ask you about, which you just referenced there.  In fact, we have some sort of bombshell new reporting from "The New York Times" which obtained tax records from ten years of the president`s tax history.  We`ve also got an aggressive move by another committee that you`re on, the Intelligence Committee, about trying to get some of the underlying Mueller documents.  I`d like to ask you about those things when we come back. 

SWALWELL:  OK.

MADDOW:  Congressman Eric Swalwell of California, Democratic presidential candidate, he`ll be with us right when we come back.  Stay with us.

(COMMERCIAL BREAK)

MADDOW:   Congressman Eric Swalwell of California is back with us. 

Again, sir, thank you again for your time tonight.  I know you`re a busy man. 

SWALWELL:  Of course. 

MADDOW:  "The New York Times" has broken a big new story tonight based on ten years of taxes they have newly obtained from the president.  It`s from the mid-`80s to the mid-`90s, and that was supposedly President Trump`s big apex as a businessman. 

But according "The Times" tonight, his taxes show him losing on average over $100 million each year of that decade.  And this is old fashioned investigative reporting from "The Times." 

But here`s my question for you about it: do you think that Mueller`s investigation looked at the president`s taxes and finances, either current or historical, when it came to assessing his potential for compromise by a foreign power or any potential corruption issues or conflict of interest issues?  Do you think Mueller went there? 

SWALWELL:  I don`t, but I do see now why the president set that as a ride line and the House Intelligence Committee is going to go there and we have good reason, because the president is either a tax cheat, in that he had all of these losses but somehow sustained himself and was able to live so high on the hog as he has and didn`t declare the true income he had or somebody else was helping him along.  Again, there are these curious interest payments -- interest accruals that he had. 

We have every reason to look and understand his finances, to take an MRI to his finances over the years, especially as he acts in such unusual ways with the Russian president.  And Mueller laid out 200 contacts without even going into the finances with the Russians, 200 pages of contacts with the Russians in the Mueller report. 

We are under -- we are undergoing that investigation right now and we will get to the bottom of that, Rachel. 

MADDOW:  Do you believe that the Intelligence Committee or the Judiciary Committee in which you sit either, in terms of the investigative powers of those committees, do you feel like you have the staff brain power and the staff expertise and the time and ability logistically to handle that kind of information?  I mean, one of the things that`s been remarkable from "The Times," seeing them win Pulitzer Prizes for this reporting in part because of the voluminous and complex nature of this data. 

If you get this stuff, which itself is a question, do you feel like you`ve got the resources to be able to process it and understand it? 

SWALWELL:  We do.  And I`m proud of the team that we have and the members who are working overtime on this.  We know what the stakes are.  That there may be ongoing national security threats that we need to know about.  That`s why we`re asking to see the full Mueller report. 

And, again, what this is really about, Rachel, is we were attacked in 2016 and the most basic function of a government is to protect its people from a foreign attack.  If the president or the attorney general are unwilling to meet that obligation, then we are not actually a government.  So, we`ll do the work ourselves on the relevant committees. 

MADDOW:  Congressman Eric Swalwell of California, a member of the House Intelligence and Judiciary Committees and a candidate for president in the Democratic Party in 2020 -- sir, thank you for your time tonight.  Great to have you.

SWALWELL:  My pleasure.  Thanks, Rachel. 

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

(COMMERCIAL BREAK)

MADDOW:  As of this moment, according to their public calendar, the House Judiciary Committee plans to vote tomorrow morning on whether they will hold Attorney General William Barr in contempt of Congress, after Barr refused to comply with a subpoena to hand over the unredacted report of special counsel Robert Mueller and the underlying evidence Mueller used to write that report.  That vote is slated to happen at 10:00 a.m. tomorrow morning. 

If the contempt citation does pass the whole House, it`s interesting, it doesn`t then go to the Senate.  This is not something that has to pass both houses of Congress and then, God forbid, go to the president for his signature.  Being held in contempt by the House is enough.  What happens thereafter is that the contempt report would go to the U.S. Justice Department for referral for possible prosecution by a U.S. attorney. 

Now, William Barr happens to be the guy who runs the Justice Department and all of the U.S. attorneys report to him, so you can imagine how that might go, at least in the first instance, but when stuff gets this far, honestly, anything can happen. 

Right now, we`re still expecting that vote at 10:00, but it`s 12 hours between now and then.  We`ll see. 

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. 

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