2nd Circuit decision, Beto back on the trail. TRANSCRIPT:8/15/19, The Rachel Maddow.

Guests: Kelly Flood, Laura Rosenberger

ALI VELSHI, MSNBC HOST:  That is ALL IN for this evening. 

"THE RACHEL MADDOW SHOW" starts now. 

Good evening, Rachel.

RACHEL MADDOW, MSNBC HOST:  Good evening, Ali.  Thanks very much.  Much appreciated.

On that last point that Jay Inslee was just discussing there with Ali Velshi on the idea that Donald Trump is going to buy Greenland and turn it into a golf course now that all the ice is melting, can I -- I just -- I am not planning on spending a lot of time this evening talking about that.  I mean, this is news in "The Wall Street Journal" tonight that the president has reportedly been inquiring about the prospect of buying Greenland.  I mean, you`ve heard discussion about this already tonight on MSNBC, presumably you`ve heard some buzz about this today and tonight since this broke, since "The Wall Street Journal" published this. 

I mean, I`m already sort of against my better judgment that I`m talking about it at all.  The reason I don`t want to spend too much time on this is because I feel like this is kind of mean.  I feel like somebody is -- not mean to Greenland, I mean, mean to the president.  I feel like somebody is playing a joke on the president and he doesn`t know it.  I feel like somebody is trying to make him look dumb, right? 

So us talking about it, I feel a little bit like we`re being complicit in that other person`s mean trick.  Now, we don`t know who that other person is who`s playing this joke on President Trump.  The way "The Wall Street Journal" describes it as such. 

Quote: At a dinner with associates last spring, Mr. Trump said someone had told him at a roundtable that Denmark was having financial trouble over its assistance to Greenland.  That person suggested he should consider buying the island.  What do you guys think about that, the president asked the room.  Do you think it would work? 

And you know what, that is a mean thing to do to a gullible person.  I mean to say to them like in all seriousness totally deadpan, hey, you know, big guy, you could buy Greenland. 

But according to "The Wall Street Journal", the joke still doesn`t quite make sense to President Trump.  He may not have grasped exactly what was going on in that moment.  I mean according to people familiar with the discussions, "The Wall Street Journal" says Mr. Trump has repeatedly since then expressed interest, since whoever this was first suggested to him, hey, big guy, maybe buy Greenland, he has apparently repeatedly expressed interest in actually trying to do so. 

Quote: In meetings at dinners and in passing conversations, Mr. Trump has asked advisers whether the U.S. can acquire Greenland. 

So, I know -- sometimes I have a hard time with the news.  And I know that this is like the number one trending topic worldwide right now.  I know it is a very popular topic of conversation this evening for all of the obvious reasons. 

But I will just say, if you know the president, if you are -- you know, you go to dinners with him, you go to roundtables with him, whatever, if you are in position to play this kind of a mean joke on President Trump, understanding the contours of his mind and his ego and knowing he might not really get that it`s a joke and he might really run off with it and think he could do it -- I mean, just do the country a favor and make it a more constructive joke.  I mean, you could have just as easily told him, hey, Don, I heard Greenland is looking for a king.

  They want a new monarch with dictatorial powers and you get like 10 planes, I heard.  I heard you could totally do that if you gave up being president and you went there and asked them.  I heard they`re super interested in you. 

I mean, if you`re going to play a joke on him, right, tell him that.  Tell him there`s like a secret compartment in the presidential limousine that always has hot Big Macs in it or quarter pounders.  Either one, whichever you want, there`s a secret compartment there.  It`s right on the back of the driver`s compartment, you haven`t found that yet? 

All the other presidents have been eating fresh hot Big Macs in the presidential limousine for decades.  You haven`t found that compartment yet?  It`s a touch compartment.  You just have to like touch it, it opens up.  Tell him that.  Sit back and wait for him to sneak off to play in the limousine to try to finding the hot burgers. 

I mean, if you know how his mind works, if you are going to play a joke on a president for whom nothing is off limits and nothing is ridiculous as long as it might provide him something he wants, then pick something that would help the country, or that at least would be harmless or funny in the long run.  I mean, now, this guy is actually going to go try to buy -- I mean, he`s due to go to Denmark next month.  Right now, it appears he actually thinks he can buy Greenland and he might try to on behalf of the United States of America in real life, and that would make for an excellent plot for a Simpsons episode.  I`m sure some day this will make a hilarious off-Broadway musical, right?

I mean, choose your jokes carefully with this particular mind.  He will believe what you tell him.  The fail-safes won`t work, right?  The intelligence community will show up to brief him that, sir, it`s not actually possible for you to buy Greenland, and he`ll dismiss them and call them the deep state, and the only hope for shaking this idea loose out of his head will be a "Fox & Friends" can somehow be drafted on behalf of the nation to fact check this someday to break the sad news to him.  I mean, like how else do we get out of this problem now?  This is our life now. 

Anyway, let`s talk about something else.  Let`s talk about the federal courts.  Most federal court cases don`t get to the Supreme Court, right?  The Supreme Court gets all the attention but they don`t get that many cases.  Every year, the Supreme Court gets asked to take 5,000 or 10,000 cases.  They only take about 100 of them, maybe 150 of them in a particularly busy year. 

So, if your case is in federal court, any kind of case, that will be before a federal district court judge.  If you don`t like the ruling that district court judge gives you and you want to appeal that ruling, your appeal gets kicked upstairs to the federal appeals court, which is called the circuit court.  There`s about a dozen federal circuit courts around the country.  They`re regional courts. 

And if the circuit court decides that they`re going to take up your appeal in your federal case, it will be circuit court judges that review your case.  For the vast, vast, vast, vast majority of federal court cases, that is as far as you are ever likely to go.  I mean, even if you don`t like the circuit court ruling that you get, if you want to take it further and you want to appeal it all the way to the Supreme Court, you are statistically speaking really not likely to get there. 

For federal cases, I mean, if you`re going to get anywhere, the circuit court is almost always the end of the line.  The Supreme Court, again, gets all the attention but it`s these federal appeals courts, these circuit courts that do the vast majority of the appellate work in the federal system.  So, these circuit courts are really powerful.  They`re really important. 

I mean, they`re important for individual humans, individual federal cases but also for big important policy matters that end up in the courts for one reason or another.  The circuit courts are the highest that the vast majority of those cases will ever go. 

Circuit courts are also important because of the judges that sit on them.  The circuit courts are the location from which presidents of both parties like to pluck young promising appeals court judges when they`re looking for a Supreme Court nominee.  So, circuit court judges have an important job.  They also particularly when they are young and first nominated, they`re really important decisions for presidents because those are seen as the sort of bench from which Supreme Court nominees are chosen. 

And one of the most consequential but also most boring political stories of the Trump era, the Trump era and the McConnell era, is that the top Republican in the U.S. Senate, Mitch McConnell, not only held a Supreme Court seat open during the Obama presidency, so President Obama wouldn`t be allowed to fill a vacancy on the Supreme Court, Mitch McConnell also held open dozens and dozens and dozens of other seats on federal courts across the country, including dozens of seats on these very important circuit courts, these appeals courts, so President Obama couldn`t fill those seats either. 

And Mitch McConnell did that specifically so the next Republican president could appoint those judges instead.  And that is how we got to the point where two something years into his time in office, President Trump is closing in already on the total number of circuit court judges that President Obama was ever able to appoint in his whole eight years in the White House. 

They just didn`t let Obama appoint judges.  They held those seats open on federal courts, including the appeals courts, these circuit courts, and now because they held them open throughout Obama`s presidency, now Trump is very quickly filling them up and these are lifetime appointments.  As I said, this is a huge, super consequential and often very boring story of the Trump and Mitch McConnell era.  Except for the days when it is not boring. 

Part of the way the Republican Party both in the White House and in the Senate has handled this great power that they have given themselves by manipulating the judiciary this way, part of the way they have dealt with this power is they have been a little punch drunk with it.  And with pretty good frequency they have appointed wildly unqualified people to try to become federal judges, including some people who are literally explicitly rated unqualified by the American Bar Association. 

I mean, they have nominated people who have never tried a case, people who have never been involved in any way in litigation, literally people who have never stepped foot in a courtroom, they have appointed to lifetime roles on the federal bench.  At one point, they tried to nominate a guy who was a famous ghost hunter.  Sure, he was married to somebody who worked in the White House.  They figured that was good enough. 

They also gave a lifetime appointment to Louisiana Senator David Vitter`s wife who during the course of her nomination basically blew off her Senate questionnaire about her background inexperience, who totally bungled her confirmation hearing, including refusing to say whether she thought Brown versus Board of Education was a good idea, whether we should go back to legally mandated segregation.  Her nomination and particularly her confirmation hearing was such an embarrassing disaster, it actually looked like they were going put her nomination on ice for good. 

Mitch McConnell only took it off the trash heap and rushed it through in a hurry after the nominee`s husband, former Senator David Vitter, lobbied Mitch McConnell to drop sanctions on a Russian oligarch.  As soon as McConnell did that, Vitter came back to McConnell`s office to let him know that the oligarch`s firm was going to write a $200 million check to a new enterprise in McConnell`s home state of Kentucky.  Right after that, Mitch McConnell suddenly discovered, hey, David Vitter`s wife`s judicial nomination hadn`t gone through after all and he pulled it out of the circular file and rushed it through and now, Wendy Vitter is going to be on a federal bench until the end of her working life. 

So, I mean that`s how they have used this power.  They have had some doozies with great unfettered power comes wild irresponsibility, always and ever. 

But this next document I`m about to show you, this is something -- I have it here, don`t I?  Yes.  This document, this is something that I never expected to have to read as part of my day job.  It is a law review article that is titled ethnonationalism and liberal democracy.  Ethnonationalism.  Ethnic nationalism.

Like we have been talking a lot in this country in recent weeks for obvious and terrible reasons about white nationalism, which is the new branding that domestic terrorists are using in this country for white supremacy.  Here`s the thesis statement of this ethnonationalism law review article. 

Quote: This article argues that ethnonationalism remains a common and accepted feature of liberal democracy that is consistent with current state practice and international law.  Hmm.  This is a long piece, it`s over 60 pages. 

It was published in the University of Pennsylvania Journal of International Law in 2010.  And it takes a sort of international tour of ethnonationalism through the ages.  But it ends with this sort of war cry about how a country can`t work, how definitely democracy can`t work unless the country is defined by a unifying race. 

Quote: The idea that a sovereign Democratic government represents a particular ethnonationalistic community has its root in the principle of self-determination of peoples.  He quotes the philosopher Jon Stuart Mill and Mill`s definition of the sentiment of nationality.  The author says that sentiment, which facilitates democratic government, rests upon ethnocultural ties.  Ethnonational communities, ethnocultural ties.  Are you talking about what I think you`re talking about? 

Oh, yes, you are.  He gets right to it at the end.  Quote: Self-government requires a political partnership in which individuals are willing and able to regard one another as equal members of a political community.  Democratic self-government depends on national fellow-feeling, the capacity of citizens to identify with each other. 

Ethnic ties provide the groundwork for that social trust and political solidarity.  Oh.  At the same time, social scientists have found that greater ethnic heterogeneity is associated with lower social trust.  Ethnically heterogeneous societies exhibit less political and civic engagement, less effective governing institutions, and fewer public goods. 

The sociologist Robert Putnam has concluded that greater ethnic diversity weakens social solidarity, fosters social isolation and inhibits social capital.  These findings confirm that the solidarity underlying democrat politics rests in large part on ethnic identification. 

Surely, it does not serve the cause of liberal democracy to ignore this reality.  The Ethnonational identification of liberal democratic states is becoming more, not less significant.  Liberal democracy requires a national community if it is to become more than an ineffectual abstraction. 

And by national community, yes, he`s talking about everybody having the same ethnicity. 

I mean, this is the law review/academic wordy bird argument that you can`t really have a country.  At least you can`t have a country that works if you`ve got all sorts of different people in it.  Surely, it does not serve the cause of liberal democracy to ignore this reality. 

That`s how you know this is a high brow argument for racial purity in the nation state when they say things like surely, everyone must admit this.  Don`t you just feel it in your gut? 

The author of this slightly blood-curdling, very serious law review article is named Steven Menashi.  I think how you say it.  The reason you need to know it is because Donald Trump just nominated him to be a federal appeals court judge.  Just nominated him to sit on the Second Circuit Court of Appeals, which is the federal appeals court that covers New York state and other parts of the Northeast. 

And you might wonder how the Trump administration finds the academic drum major for ethnonationalism to become a federal appeals court nominee, one level below the U.S. Supreme Court.  I tend to think that in academia and politics, these people on this fringe of racial thinking, they tend to find each other like magnets and iron filings do. 

Do you remember how back in the 2016 campaign, Trump used to tell this totally made up story about the way we used to get rid of terrorism is that we`d dip the bullets in pig`s blood and wrap up the Muslim bodies in pig skins and that`s how we got rid of Muslim terrorists in the past and now we`re too wussy to do that.  There`s a little controversy in the 2016 campaign that he just made up that story. 

Well, you know what?  This guy who has just been nominated to be a federal appeals court judge has also made that same argument that Trump made on the stump in 2016.  He has told that same fake story in the course of his academic career.  I mean, this was crazy enough to hear candidate Trump run with this, this completely made-up story during the 2016 campaign. 

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  They took the 50 terrorists and he took 50 men and he dipped 50 bullets in pig`s blood.  You heard that, right?  He fit -- he took 50 bullets.  And he dipped them in pig`s blood. 

And he had his man load his rifles and he lined up the 50 people and they shot 49 of those people and the 50th person he said, you go back to your people and you tell them what happened.  And for 25 years, there wasn`t a problem.  OK?  Twenty-five years, there wasn`t a problem.  All right?  So, we better start getting tough. 

(END VIDEO CLIP)

MADDOW:  Total bullpucky.  Not true at all.  That story was not true when then candidate Donald Trump pulled it out of his proverbial fortune cookie and riled up that crowd in South Carolina with it during that campaign. 

It was also not true when Second Circuit Court of Appeals nominee Steven Menashi argued it in a paper that he published at Stanford University`s conservative think tank.  Look, same thing.  Same made-up story. 

His forces captured some of the militants, executed them with bullets dipped in pig fat.  Oh, not pig blood.  Pershing`s approach is probably no longer in the army`s counterterrorism repertoire but the result was that the guerrilla violence ended.  The American response to Islamic extremism has not always been so harsh or as effective. 

OK.  I mean, it is one thing to have this fantasy.  Let`s buy Greenland, you know, made up, self-serving clap-trap come out of the mouth of an anti- Muslim candidate who then becomes president of the United States.  It actually feels like it might be worse to have the exact same clap trap, that same let`s buy Greenland level of thinking come from somebody who has just been nominated for a lifetime seat on the federal appeals court one level below the United States Supreme Court. 

But hey, just in case you thought that the problem in this country was that we didn`t have enough out loud proponents of ethnonationalism on the federal appeals court, you`ve got to start somewhere so why not with him. 

Today in El Paso, Texas, former Congressman Beto O`Rourke gave what I think was a pretty eagerly anticipated speech about white nationalism, about white supremacy, about domestic terrorism in this country.  This was a speech that was eagerly anticipated in part because we knew in the speech he would announce his plans for moving forward a week and a half after he left the presidential campaign trail because a young man ranting about an invasion of immigrants and ranting about wanting to kill as many Hispanics as he could and trying to save America for white people only, that young man drove ten hours across Texas and slaughtered 22 innocent people at an El Paso Walmart two weekends ago. 

Beto O`Rourke has been off the presidential campaign trail since then.  He has been home in El Paso.  He`s faced a lot of pressure even since the start of his presidential campaign that maybe he should stay in Texas.  Maybe he should stay in Texas so he can run for Senate again there and he should drop out of the presidential race to do so. 

Beto O`Rourke acknowledged the questions and the pressure that he has received about that today, but he said in this speech, quote, that would not be good enough for this community.  That would not be good enough for El Paso.  That would not be good enough for this country.  We must take the fight directly to the source of this problem, that person that has caused this pain and placed this country in this moment of peril, and that is Donald Trump. 

Beto O`Rourke rejoining the presidential campaign trail today with those remarks. 

In Colorado, former two-term governor John Hickenlooper has faced the same kind of pressure that Beto O`Rourke has.  Both of those men are from states that have relatively vulnerable Republican incumbent U.S. senators who are up for re-election in 2020.  Hickenlooper and O`Rourke are both seen as real potential contenders to take those seats away from Republican senators and thus help get Mitch McConnell out of control in the U.S. Senate. 

Hickenlooper has faced that kind of pressure.  He has not said definitively if the Colorado Senate race is where he`s going to end up, but as of today, we do get to poof John Hickenlooper off our Democratic candidates list.  Are you ready?

We haven`t even able to do this for many times yet.  But here we go -- 3, 2, 1, poof. 

As governor, John Hickenlooper announced the end -- excuse me, as governor, John Hickenlooper announced the end of his presidential run today and made it clear he`s thinking about a Senate run in Colorado instead, whether or not he`s going to jump in, we can now take him off our list of the Democrats who are in contention for the presidential nomination for their party. 

Now, I should note for the record that there are a whole bunch of other Democrats who are already in that super hot U.S. Senate race in Colorado to unseat Republican Cory Gardner.  I should also tell you that John Hickenlooper`s own wife is already on record to a maxed out of donor to one of the Democrats who is a declared candidate in that Senate race.  She is maxed out to a former Obama administration diplomat who`s running, a man by the name of Dan Baer. 

A new national poll is out today, that`s a qualifying poll in terms of Democratic candidates trying to get into the next round of debates.  As you can see there in the third column, John Hickenlooper polled in this new national poll as an asterisk, which means he was at less than one-half of 1 percent in terms of his support, so perhaps that goes some distance to explaining why he got out of the presidential race today. 

But all of these guys, all of these six guys polled as asterisks in this new national poll that`s out today, all of them.  If you hum a few bars, they kind of look like an acappella group at homogenous high school, right? 

While Hickenlooper is the only one of these six who`s polling as an asterisk right now, who`s the only who`s getting out, the other five are saying they`re still in the fight, including one of them, Massachusetts congressman and Iraq war veteran, Seth Moulton, on the bottom row in the center there, who tonight is launching a whole new bunch of ads for his candidacy.  The ads focus specifically and somewhat surprisingly on the issue of impeachment. 

(BEGIN VIDEO CLIP)

REP. SETH MOULTON (D-MA), PRESIDENTIAL CANDIDATE:  We are at a crucial moment.  The president continues to break the law every day.  If you or I do that, we go to jail.  When a president breaks the law, he must be impeached. 

I understand the politics will be hard, that the polls may not be with us.  But isn`t it time to just do the right thing?  Leaders don`t follow polls.  Polls follow leaders. 

(END VIDEO CLIP)

MADDOW:  Massachusetts Congressman Seth Moulton who is a very long-shot candidate for the Democratic nomination, he didn`t make the first two debates and he is not on track to make the third, but he`s still in the running.  This new set of ads that he`s running all focused on impeachment is somewhat surprising area of focus for him. 

But I think something is going on quite broadly in the race here.  And I think you can see it from pretty much any angle now.  From guys with Seth Moulton`s kind of standing in this race, up to and including guys that are doing much better like Beto O`Rourke, the focus increasingly in these campaigns right now at least is not just on why these guys say they should be in the White House, why they would be a good president, the focus right now across the board from the top of the tiers to the bottom is on why the guy who`s currently in the White House needs to get out, for the good of the country. 

Much more to come tonight.  Stay with us.

(COMMERCIAL BREAK)

MADDOW:  It was the last day of the session.  It was the last few hours that lawmakers would be there for the legislative session that year.  A bill came through at the very last second that would put $15 million in taxpayer money toward some unidentified economic project.  The bill came with a big push from the governor`s office for whatever this project was. 

Here`s how "The Lexington Herald Leader" newspaper described lawmakers trying to find out what the whole thing was about.  Quote: Democratic lawmakers who pressed for details were told that little could be revealed at this time in order to keep Kentucky competitive against another state vying for the project. 

Little could be revealed.  Just vote on it. 

As you can see there, the House did record the vote at 10:46 p.m. on the last day of the Kentucky general assembly in 2017.  They voted $15 million for something, tell you later what it is.  The bill somewhat amazingly passed unanimously in both chambers 38-0 and 90-0. 

Well, now, it turns out we know what that was for.  That money bought, for Kentucky taxpayers with their own money, shares in a new aluminum mill that someone was promising to build in the eastern part of that state.  But the entrepreneur who wanted to build it, he hasn`t actually at that time lined up all the financing, all the stuff he needed to actually try to build the thing. 

For that, we would require the services of Senate Republican leader Mitch McConnell, proud son of Kentucky, who went on to very soon thereafter kill a popular bipartisan bill in Washington that would have kept a giant Russian aluminum producer under sanctions, along with the oligarch who ran that company who was being investigated for his role in Russia meddling in the 2016 elections. 

There really was a ton of bipartisan support for keeping those sanctions on the oligarch and his company because of what happened in 2016.  But Mitch McConnell nevertheless stepped in to make sure those sanctions would be dropped.  And soon thereafter, the company that Russian oligarch founded put $200 million into that project, into Mitch McConnell`s home state of Kentucky. 

And if you think about it, that meant that all of a sudden the people of Kentucky, the citizens, the taxpayers, found themselves to be co-owners with the Russians of a planned northeast Kentucky aluminum mill. 

One of the Kentucky state lawmakers who was part of that last-minute unanimous vote to approve that public funding told "The Washington Post" yesterday that now she regrets that vote.  She said, quote: It is not okay that we`re turning to Deripaska given the damage he`s done to our democracy.  Rusal`s reputation is now ours.

Joining us now is Representative Kelly Flood of 75 district in Kentucky.  She serves on the Appropriations Committee.

Representative Flood, thank you so much for joining us tonight.  I really appreciate you coming in. 

STATE REP. KELLY FLOOD (D), KENTUCKY:  Thank you so much, Rachel. 

MADDOW:  So let me ask if I got anything wrong there just in terms of how this went through the legislature.  From the outside, it looked like this was a very, very last-minute thing and that you didn`t have very much clarity on what exactly Kentucky taxpayers would be investing in here. 

FLOOD:  You`re accurate.  And then your average listener might say why did you vote yes?  Several reasons why.  It was a unanimous decision. 

This is in one of the most distressed areas of our great state, the northeast corner of Appalachia region.  And this is a county, Greenup County, that had lost up to 1,000 people over the course of several years from A.K. Steel`s employment.  It was decimated locally. 

And when we had a project come to us in the last hour, if you will, at the legislative session by the governor for what was termed an economic incentive package, it was pretty common language and not uncommon for a governor to come in at the last minute with this kind of request.  For that particular region, we were asked to, if you will, give the governor the benefit of the doubt that he had put together a working package that we would learn very quickly much more about. 

And it was one of those times, when you -- and several of us were opposed to doing it but we also understood that at this moment the people of Ashland needed to know that we had their back. 

MADDOW:  Uh-huh -- when it -- when it was put forward to you in those sort of vague terms, when you ultimately discovered that Kentucky wasn`t just giving a tax break to the mill, which would be a more typical economic incentive but rather Kentucky was actually buying shares, Kentucky taxpayers were buying part of it, how did that affect your opinion of the spending, particularly when it emerged, that one of the other major shareholders there would be the Russians? 

FLOOD:  It made me very angry.  It reconfirmed what many of us had suspected, which is that Governor Bevin had lied to us.  And I don`t even mince words there because I believe he knew exactly what was going on in terms of what the project was and how he intended to invest these dollars. 

This is not what we have done in the past.  We`ve offered economic incentives that the company then pays back to the state over an extended period of time.  For us to cherry-pick which companies our very poor state, $15 million from our taxpayers now going into a company we know nothing about and that later is revealed only after pressure by our local press journalists, saying you must reveal your shareholders and the attorney general upholding that decision, we then finally learn that there isn`t an enormous package yet put in place and so this competition that was ostensibly going on was a ruse. 

And instead, at the end, what we got is Rusal investing at an astronomical rate and changing the whole dynamic of this project, really, finally -- your reporting showed -- putting our country at risk now with a company formally owned by Deripaska, a known criminal in terms of the work in the world to make it more democratic, he has not been on our side. 

MADDOW:  Democratic State Representative Kelly Flood of Kentucky -- thanks for being with us tonight.  I know this is a really controversial issue in your home state.  The national attention to it right now I`m sure complicates everything in terms of the in-state dynamics, but thanks for helping us understand what you`ve seen there.  I really appreciate it. 

FLOOD:  Thank you, Rachel. 

MADDOW:  All right.  We`ve got a lot more ahead tonight.  Stay with us. 

(COMMERCIAL BREAK)

MADDOW:  Ever since we got those two stories yesterday from the "Washington Post" and "Time" magazine about what Mitch McConnell did, about how Kentucky Senator Mitch McConnell killed sanctions on a company owned by a Russian oligarch who was investigated for his role in the election interference in 2016, and then that oligarch`s company immediately turned around and dumped $200 million into McConnell`s home state, ever since we`ve had this new reporting about how exactly the state of Kentucky came to be business partners with a Russian aluminum company whose founder is under U.S. sanctions, and we saw the evident regret of lawmakers who didn`t know their state would end up being co-owners with a sanctioned Russian oligarch.

We did that long piece on it last night on the show.  We just followed up with one of those lawmakers who is expressing regret about her vote in Kentucky to go ahead with this.  But part of the reason I`m sticking with this is that there is a piece of the story that I feel like is stuck to me, which is about why Russia is doing this.  The part of this reporting, these revelations about what Mitch McConnell is actually doing with his control of the U.S. Senate, it is like when you`re a little kid and you`re super gluing something and you stick your fingers together by accident.  That`s what`s happening with this story. 

And it`s in part because of this quote from the "Time" magazine coverage of the story.  Quote: Oligarch owned companies have helped the Kremlin influence politics across Europe.  Since Putin came to power in the year 2000, Russia has used economic leverage to force a change in policy or undermine governments in at least 19 different European countries. 

Joining us now is Laura Rosenberger.  She is a veteran of the Obama National Security Council.  She`s the source of that bracing analysis that was quoted in "time" magazine`s coverage of this story.

Ms. Rosenberger, thank you very much for being here.  I really appreciate your time. 

LAURA ROSENBERGER, FORMER MEMBER OF OBAMA`S NATIONAL SECURITY COUNCIL:  Thanks for having me, Rachel. 

MADDOW:  So, you have looked systematically, globally, at the way Russia has used economic sort of intrusion, economic -- investments economic infiltration in other countries` economies as a way to either hurt the governments of those countries, to hurt those countries more broadly, or at least to change political outcomes.  Is that a fair summary of this part of your work?  And the reason "Time" was quoting you on the story? 

ROSENBERGER:  Yes, absolutely, Rachel.  I mean, I think, you know, to take a step back here and connect the dots with some of the things you`ve talked about last night.  You know, since the 2016 election, we`ve had so much conversation about Russia interference and democracies, Russian efforts to undermine democracies.  We know that the Russian government and its proxies use as range of tools.  We`ve talked about social media influence operations.  We`ve talked a lot about cyber attacks. 

But one of the things I think in the U.S., we haven`t been talking enough about is Russia`s use of economic coercion and maligned financial influence which are two other really key parts of the tool kit that we have seen the Russian government using across the transatlantic community using for nearly two decades.  And it is something we need to be much more aware of as we look at the broader strategy that Russia is employing to undermine and attack our democracies. 

MADDOW:  Can you give us an example?  Even a hypothetical example of how that works.  What is economic coercion?  And how does Russia use to it get the things that it wants from other countries? 

ROSENBERGER:  Yes, absolutely.  So, in a lot of cases, you know, I think one of the things we need to understand is we often think about, you know, companies as if they`re private and deals as if they`re purely commercial.  But in the Kremlin ecosystem, you know, there -- a lot of the Russian companies basically have to, and the oligarchs that back them, they need to keep the Kremlin, Putin, the Russian government sort of happy.  So they do that by oftentimes working to secure deals that the Kremlin believes will be in its interest. 

And so, that`s often by investing in the kinds of things that they think Putin will be pleased with, that will advance, you know, the Russian government`s interest.  But it`s also by doing things like, as you noted, investing in places where they will gain leverage with particular elite.  So, one of the most frequently cited cases is actually in Germany where one of the former chancellors of Germany has joined the board of a Russian state-owned energy company, former German chancellor, Gerhard Schroder. 

It`s so commonly cited as the phenomenon where they basically capture an elite through economic and commercial means that it`s got its own term, Schroderization, for when you actually basically capture an elite, bring them into the political circuit.  So at that point, they begin to advocate for the interests of not Germany but the Kremlin. 

MADDOW:  In terms of what is happening in Kentucky right now, obviously, this is still an evolving situation there.  But we are already seeing right now that because of Deripaska and Rusal`s interest in this aluminum concern in Northeastern Kentucky, that is already sort of being leveraged in Washington.  Regardless of the circumstances of how that investment got there, now that Rusal is a big investor in that potential project, they`ve already signaled to the U.S. Senate that if this deal is going to be reviewed, that if the sanctions, the lifting of the sanctions on Rusal are going to be reviewed, if the sanctions on Deripaska are going to be reviewed -- well, that might be reason for them to pull out of Kentucky, thus costing hundreds if not thousands of potential jobs in that region that really needs the jobs. 

That to me already sort of feels like Russian leverage over American decision-making. 

ROSENBERGER:  Yes, that`s exactly part of it, right?  So you get a foot hold in.  You then influence policy decisions and political calculations from within by taking what appears to the surface to be a commercial deal, a commercial interest.  But then obviously, political interests get, you know, wrapped up in all of that. 

And so, that is exactly what a lot of people are raising concerns that in this particular case.  And I think it is against the back drop of understanding the tactics that Russia has used in other countries and seeing many similarities and needing to be very mindful of that. 

I think it`s also really important that we understand the ways in which these different kinds of deals often operate in this kind of gray zone.  I know you talked about this last night, Rachel.  That a lot of these tactics that the Kremlin uses aren`t necessarily illegal.  They don`t violate laws, but they look for places where they see vulnerabilities, they look for places where we don`t respond with force, I don`t mean military force but in terms of a forcible pushback, right?

They look for places where they see soft edges.  When they see that, they push harder and that`s one of the things that really concerns me right now is when we see these kinds of deals going forward, when we see concerns like this being raised and we don`t see pushback from political leadership, that`s only going to further embolden Russia, Russian companies, and their proxies, to take more steps like this to seek out more political leverage. 

You know, the Russian company involved here, Rusal, has already put out requests to a number of other states seeking these very same kind of deals.  I think that that`s exactly the kind of thing that frankly I would expect if I were using the Russian playbook.  And, you know, when we see this happening in other countries, there is interesting work by my colleagues looking at thresholds where you can actually get to a point of what they call state capture, where a government -- you know, a certain threshold to the economy becomes so dependent on Russian investment that the state actually becomes captured. 

Now, in the U.S., we are far, far from those thresholds but I think that it is that kind of slippery slope that we need to be extraordinarily careful of.  And mindful about what is actually behind these deals.  Again, there is a strategic aspect to this for the Russian government.  It is about weakening the respond to Russian tactics.  It`s about trying to influence policy decisions from within.  It`s about creating leverage and bringing elites over to their side. 

MADDOW:  Laura Rosenberger, director of the Alliance for Securing Democracy, a senior fellow at the George Marshall Fund, a veteran of the Obama National Security Council -- this is exactly why I wanted to talk to you about this tonight.  I`m so glad you`re able to make time to be here. 

I really, really appreciate it.  Super clarifying.  Thank you. 

ROSENBERGER:  Thank you so much, Rachel. 

MADDOW:  All right.  More news ahead tonight.  Stay with us. 

(COMMERCIAL BREAK)

MADDOW:  In a federal court in Washington, D.C. today, the trial of a very, very famous lawyer got under way.  Gregory Craig has the distinction of being the only member of a Democratic administration to be indicted in any case that is derived from Robert Mueller`s Russia investigation.  Greg Craig was President Obama`s first White House counsel.  What he`s an trial now for allegedly lying to the Justice Department about work he did later in private practice on behalf of Ukraine in 2012, specifically work he did for Paul Manafort who would later become President Trump`s campaign chair and who is now prisoner in federal custody for roughly the next seven years. 

The trial for Greg Craig finally got under way today in federal court in D.C. And it turns out when you are a very, very famous D.C. lawyer, sometimes things go hilariously awry when you turn up in a very familiar federal courthouse except this time, you`re there as a defendant. 

That story of what happened on day on of Greg Craig trial is next.  It`s totally unbelievable. 

Stay with us. 

(COMMERCIAL BREAK)

MADDOW:  The great Josh Gerstein at Politico.com put it, the jury selection in this case gave a whole meaning to the phrase jury of ones peers.  In the trial of Greg Craig, which started today, Obama`s former White House counsel who was caught in the one of the Paul Manafort scandals in Ukraine, of the 100 potential jurors for the Gregory Craig trial, there were at least two former White House officials in the jury pool, also a D.C. policy expert, also a D.C. speechwriter, also a data guru with the Department of Health and Human Services, also an account with the Defense Department, also somebody who said her boyfriend was covering the Mueller report for "The New York Times", and also someone who described herself as a CIA analyst who expertise is Ukraine, which is what Greg Craig was working on in the case that got him into trouble here and these criminal charges. 

Quote, from Gerstein`s piece: Few potential jurors seem to know much about Ukraine or the political rivalry that led to the work Gregory Craig did that resulted in this criminal case.  But as josh says, one potential juror was concerned she might know too much.  A CIA analyst who covers Ukraine. 

The CIA analyst says to the judge, quote: I know large amounts of classified information about Ukraine.  The judge says back to her, would you be able to turn your CIA analyst brain off and focus on just what you hear in the courtroom?  The analyst responds, well, what if somebody says something about someone and I know something about it?  Obviously, I can`t say anything because obviously she can`t share the highly classified information she has in her brain about this topic as a CIA analyst. 

But you might think this would be like the best possible reason to get bounced out of the jury pool, right?  But you would be wrong. 

Quote: To the judge`s apparent surprise neither the prosecution nor the defense objected to the seating of that juror.  So, the CIA analyst remained in the jury pool.  And then today, that CIA analyst was chosen as one of the actual jurors. 

So, the CIA analyst who`s an expert on the nuances of this country that produced the Gregory Craig trial was not only in the jury pool but volunteered what her job was to the judge and she still got picked and now, she`s on the jury.  Now, this is totally normal. 

(COMMERCIAL BREAK)

MADDOW:  We started off our show tonight in part with reporting on that highly anticipated speech today from presidential candidate Beto O`Rourke.  You don`t have to take my word for it.  Beto O`Rourke himself is about to be live with Lawrence O`Donnell right here right now on "THE LAST WORD."

So, do not change that dial.

  Good evening, Lawrence. 

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