Rick Gates testifies in Greg Craig trial. TRANSCRIPT: 8/22/19, The Rachel Maddow Show.

Guests: Josh Gerstein, Letitia James

RACHEL MADDOW, MSNBC HOST:  Rehearsing blocking? 

CHRIS HAYES, MSNBC HOST:  Yes.  How we shoot different things.  We have to do set changes.  We have to like figure out where the steady cam is in relation to me, in relation to the audience. 

MADDOW:  Wow.

HAYES:  So, there`s a lot -- a lot of blocking and tackling, to use a football metaphor, that has to happen, that has to happen. 

MADDOW:  I was struck by fear by proxy today when it occurred to me in the middle of our meeting, I was like, what`s Chris going to wear for pants?  None of us have to think about that. 

HAYES:  We`ve solved that problem, and I will be in pants.  Those pants have been purchased. 

MADDOW:  You have purpose bought pants for the live show? 

HAYES:  I do pants for the live show.  Live show pants. 

MADDOW:  I would like to put in a bid to buy them for the MSNBC primetime 2019 museum when you`re done with it. 

HAYES:  All right.  You are the first and last bidder probably on that. 

MADDOW:  Well, now that we put it out there, you would be surprised, my friend.

Thanks, Chris.  Good luck tomorrow.

HAYES:  Thanks, Rachel.

MADDOW:  All right.  And thanks to you at home for joining us this hour. 

OK.  The first one who dropped out was Rick Perry.  Interestingly enough, in the Trump presidency, it would eventually somehow be decided that good old Rick Perry was exactly the right person to be put in charge of America`s nuclear capability.  Oops. 

But way back in September 2015, Rick Perry was merely the first Republican candidate to leave the Republican presidential primary for the 2016 race.  He was the first candidate to go poof.  And when Rick Perry dropped out, we drummed up this fancy new animation to show that Rick Perry had poofed out of the race. 

And that turned out to be kind of a thing on this show.  After Rick Perry, just ten days later, the next candidate to go poof was another high profile Republican governor. 

(BEGIN VIDEO CLIP)

MADDOW:  Scott Walker is quitting, which means we get to poof him off the list.  Ready?  Scott walker going bye-bye in three, two, one.  Poof.  Gone. 

(END VIDEO CLIP)

MADDOW:  Poof.  We started doing this for candidates in the gigantic Republican presidential primary in 2015 and 2016, I think we didn`t really think through the fact that I was actually signing us up to do that over and over and over again, to do a lot of poofing, because once you start, you can`t stop.  Can`t poof just one.  And so, it became this thing we had to do all the time for months. 

(BEGIN VIDEO CLIP)

MADDOW:  Good-bye Mike Huckabee.  Poof. 

Rick Santorum.  Rick Santorum, are you ready?  Three, two, one, poof. 

Chris Christie, poof.  Carly Fiorina, poof.  And Jim Gilmore, poof. 

(END VIDEO CLIP)

MADDOW:  All in all, in 2015 and 2016, we ended up tracking the demise of 16 different Republican primary candidates right down to the bitter, bitter end. 

(BEGIN VIDEO CLIP)

MADDOW:  Are you ready?  Are you ready?  Here it goes. 

Senator Ted Cruz dropped out last night.  Thank you for your time.  Sir, poof. 

Then this morning, Ohio Governor John Kasich, the last man to be poofed get poofed.  And that leaves alone among the smoking wreckage, he who will not be poofed.  Donald Trump.  You win. 

The poof machine is retired.  All gone but one.  The Republican primary is over. 

Now I want something new to poof. 

(END VIDEO CLIP)

MADDOW:  That was this show on May 4th, 2016, same outfit. 

But it has taken this long, it has taken more than three years to find something new to poof.  But we do, of course, now have that new responsibility once again.  As the impossibly large presidential field this time is on the Democratic side. 

And we are already in August of 2015, we are already arriving at that time in the race, when the first few contenders are deciding, they no longer want to contend. 

Eric Swalwell of California became the first guy to leave the race back on July 8th.  So, three, two, one, poof.  He was the first one poofed off the list.  Congressman Swalwell was the very first one. 

Last week, we got to second one.  It was John Hickenlooper.  Poof. 

And now here last night on this very program, Washington State Governor Jay Inslee became the third presidential primary candidate to get out of the race.  And so now, for the first time, three, two, one -- poof. 

Adios, Governor Inslee, from the presidential race.  I thank you kindly for coming to talk to us to make your announcement here last night about why you had decided to get out. 

And so, now, here`s where we`re at.  There is still a big, huge field of Democrats out there.  But the win knowing process has started. 

And the stuff these candidates are leaving the presidential in already interesting.  Even with only a few guys out.  As he hinted about in his announcement here last night that he was leaving the presidential lace, Washington Governor Jay Inslee today confirmed to the people of Washington that he is going to run for a third term as governor of Washington state. 

There are not term limits for governors in Washington state, so, he can run for a third term.  He is popular.  There`s nothing that went so wrong in his presidential campaign other than him not winning.  Nothing from his campaign that should give him too much baggage for that third term gubernatorial run.  But we now know officially that that`s what Governor Inslee is going to be doing.

And Colorado Governor John Hickenlooper announced today that he, too, is going to keep running, even though he`s no longer running for president.  After initially saying no way, no way, no way, after lots of people including me asked him during his presidential run why he wasn`t running for Senate instead, since there`s a vulnerable incumbent senator in his home state, he said, no, no, no, wasn`t considering it, he would make a terrible senator. 

Well, as of today, John Hickenlooper has officially jumped into the race for U.S. Senate in Colorado.  He will be targeting that vulnerable Republican incumbent, Cory Gardner.  What you are seeing is part of the launch video for that Senate campaign today. 

Because Cory Gardner is seen as so beatable in the Senate race next year, and because Colorado is shading to the bluer and bluer side of purple all the time now, John Hickenlooper is a highly anticipated contender for the Democratic nomination in that race.  But he`s going to be jumping into a primary where there`s already a crowded field and a pretty well-funded field of Democrats. 

For example, John Hickenlooper`s own wife is a maxed out donor to one of the other Senate candidates who is already in that race besides her husband.  Hickenlooper is in as of today.  He is popular in Colorado. 

As a theoretical Senate candidate, there was polling that showed him way, way, way out ahead of every other Democrat in that field, like 50-plus points ahead of any other Democrat.  Now that he is an actual candidate and not just an idea, that fight might get a bit closer.  We shall see. 

I think politico.com won today for the best headline on the story of John Hickenlooper jumping from the presidential race to the Senate race today.  Their headline about that today, look, was, Hickenlooper goes from David to Goliath, meaning he wasn`t that big a deal in the presidential race, it turns out, but in the Senate race, he is a very big deal.  We will see about John Hickenlooper making that late change and trying to be the goliath in that U.S. Senate race that the Democratic Party sees as absolutely winnable. 

We will also see about Jay Inslee going for a third term as governor in his home state of Washington.  But watching Inslee and Hickenlooper make those leaps today, I think only puts a fourth spotlight on what we`re expecting to come in days ahead.  Right now, I think smart money says we`re going to see a few other iterations on this theme in the next few days.  And that`s simply -- you know, it`s not that I have any intel on any individual candidate, it`s because, simply, the deadlines are rolling in.  And the middle of next week is the deadline for Democratic candidates to qualify for the next Democratic presidential debate.  And they need to qualify both by fund-raising numbers and by polling. 

And so far, this whole list of Democratic presidential contenders has not yet qualified for the next debate.  They are all trying to get there, but they`ve only got until the middle of the next week to do it.  Some of them aren`t even close.  And some of these folks, it should be said, may try to gut it out and stay in the race, even if they don`t make the next debate. 

But a bunch of them likely will not.  This is likely to be a cut bait moment for more candidates than just the two who have dropped out within the past week.  And so, over these next few days, I think for some number of these folks, we may see them looking for the kind of off-ramp, this kind of onward and upward next big thing that John Hickenlooper and Jay Inslee both pulled out of their respective hats today. 

I mean, ultimately, all but one of the Democrats is going to go poof.  Only one of them is going to be the nominee.  All the rest of them are going to have to figure out what they`re going to do instead.  There`s better ways and worse ways to get out of the race. 

I think Inslee and Hickenlooper think they`ve timed it well and picked the right next thing to do so that their presidential campaign isn`t going to hurt them or at least not too much.  A bunch of the Democratic candidates right now staring down that deadline in the middle of next week, they are looking for the strongest, most constructive, most dignified way to get out of the race.  So, you know, I`m not -- again, I don`t have any intel on any individual candidate, but I think that`s what we are all expecting to happen over these next five days. 

I will tell you right now that tomorrow night on this show, after Chris Hayes does his special live audience show with his specially bought pants and the rehearsed blocking and everything, we`re all very excited about it, right after Chris` special live audience show tomorrow here on this show, we`re going to have our own sort of special, it`s not a live audience.  It`s still a live show here in studio.  I`m not taking off or anything. 

But tomorrow night, we`re fog to have a special show that is focused on the 2020 race specifically and on this crucial question of the strength of the Democratic field.  Individual strength of individual candidates and their strength as a field and whether or not their competition is building a better nominee to ultimately take on Donald Trump.  We are working on that special show tomorrow already.  I`m very excited about it. 

So, that`s to look forward to.  On tonight`s show, we`ve got a bunch of stuff cooking.  First of all, I should tell you that New York`s Attorney General Tish James is going to be our guest live in studio tonight. 

Being the attorney general of the state of New York is always a big deal job, in particular, because of the stuff that New York as a state uniquely has jurisdiction over that makes a lot of New York state cases and New York state sort of attorney general crusades, things of national significance.  It is always a big deal job.  It`s always a very high-profile job, usually the highest profile state job in the country. 

But in the Trump presidency, all that has been even heightened.  In the Trump presidency, being New York state`s attorney general means that stuff it didn`t used to mean before.  It means getting sued by the president.  It means suing him right back.  It means fighting for subpoenaed documents from the president`s banks and financial institutions he`s dealt with and his various businesses. 

As of right now, being New York`s attorney general also means suing the administration specifically over their new anti-immigrant policies.  So, Tish James is here in just a moment.  She is right at the center of a bunch of stories of national significance where she is taking on the Trump administration and the president and his business history in a way that nobody else is positioned to do it.  I`m super happy to have her here. 

But before we get to that, there is one other story that I want to talk about first and it`s a story that broke late this afternoon.  And the reason I want to get to it off the top because we have somebody that is going to be joining us in just a second who was there in the room when it happened today.  All right, and by the room, I mean the courtroom.  This is a legal drama that unfolded today in a way that I don`t know anybody thought to expect. 

The deputy chairman of President Trump`s campaign, who was also the deputy chairman of the president`s inaugural committee, a man by the name of Rick Gates, Rick Gates is currently awaiting sentencing on two felony charges to which he has plead guilty. 

While he awaits sentencing, he has been a cooperating witness for prosecutors and it turns out they have been using him for multiple criminal cases.  Rick Gates, for example, was the star witness in the federal criminal trial against the president`s campaign Chairman Paul Manafort.  When Manafort went up on trial in the Eastern District of Virginia, Rick Gates spent three days on the witness stand explaining the various financial schemes he said he had been involved in with Manafort or even at Manafort`s expense. 

Rick Gates admitted on the witness stand in that trial to stealing money from Paul Manafort, even as the two of them were busy defrauding other people and institutions to effectively steal money from others.  Honor among thieves and all that. 

Well, today, the illustrious alumni reunion of the president`s campaign continued in court, with good old Rick Gates back on the witness stand again as a star witness for the prosecution.  But this time, he was testifying in the trial of Greg Craig, the former Obama White House counsel.  Craig is the only member of a Democratic administration to get caught up so far in one of the prosecutions that has derived from Mueller`s investigation. 

Prosecutors say Greg Craig lied to the Justice Department about his work on a Paul Manafort project in the Ukraine which took place after he left the Obama White House a few years before the 2016 election.  The basic allegation against Greg Craig is that he didn`t want to have to register as a foreign agent being paid to work for a foreign country, because that might interfere with future jobs he might be able to get in the U.S. government and because it would mean having to report way too much shady and embarrassing detail about this Ukraine scheme he was involved in with Paul Manafort and how much everybody was getting paid and by whom. 

I think the good news for Greg Craig today on what is by far been the most dramatic day of his trial, the good news for Greg Craig today is that the star witness against him, I mean, really is this guy, Rick Gates, deputy chairman of the Trump for president campaign, who is not exactly a paragon of virtue or of truth.  I mean, if you had to pick the star witness against you, you might want a guy who had to admit to tons of crimes while he was also testifying about bad things he said you did, right? 

On the witness stand today, Rick Gates described a little bit of what his life has been like as a cooperator.  He mentioned at one point that he`s unemployed.  He said he has met with federal investigators about, hmm, 40 times since he`s been a cooperating witness, 40 meetings with prosecutors? 

Defense attorneys made Rick Gates today admit to the court that he was testifying in this trial as part of his cooperation deal, because he hopes his cooperation with the government would result in him not having to serve prison time for the felonies to which he has already plead guilty.  The defense lawyer cross-examining Rick Gates at one point said, quote, you also, under the plea agreement, get a promise you won`t be prosecuted for other crimes.  And you`ve committed a few.  Excuse me, you`ve committed quite a few, to which Rick Gates replied, yes. 

Right?  That`s a dark moment, even when you are a cooperating witness for the government.  Yes, yes, yes, I have committed quite a few crimes.  Are we going to go through them all?  Oh, we are?  OK. 

But even as Rick Gates is forced under cross examination to admit that he has committed quite a few crimes, today, he also appeared to accuse a lot of other people of committing quite a few crimes, as well.  Under oath, on the witness stand, where his own tuckus staying out of prison depends on this totally, today Rick Gates not only testified against Greg Craig to support prosecutors allegations that he lied to the Justice Department about the work he did for Manafort in Ukraine.  Today, surprise, Rick Gates also testified that there were more D.C. bigwigs who were in on that scheme -- specifically more D.C. bigwigs who knew they were working for a foreign government -- because he, Rick Gates, says he told them they were working for a foreign government. 

Prosecutor says to Gates, quote, did you tell them who the client actually was?  Gates, yes.  Prosecutor, and who was the client?  Gates, the government of Ukraine. 

Before the 2016 campaign ever happened, President Trump`s campaign chairman ran this scheme in Ukraine.  President Trump`s campaign chairman in prison now.  His deputy who was trying to stay out of prison now is acting as a cooperating witness in part by unraveling this scheme in open court. 

The scheme itself now threatens to put in jail President Obama`s first White House counsel.  It has caused President Obama`s first White House counsel`s super fancy law firm to enter into a formal non-prosecution settlement with the Justice Department. 

And now today in court, Rick Gates started implicating multiple high-end D.C. lobbying firms in the scheme, as well.  Firms run by Democrats and by Republicans.  And, you know, part of the story is that the sitting president of the United States turns out to have hired some amazing people along his way to the White House.  Quite a number of whom have since been sent to prison or are awaiting sentencing. 

But this part of it, about this scheme in Ukraine, that preceded the campaign, that involved all -- I mean, this part seems to be metastasizing all across high power Washington. 

Joining us now is Josh Gerstein, senior legal affairs contributor at "Politico", who was, as I said in the room as it happened today. 

Josh, it`s great to have you here.  Thanks for joining us. 

JOSH GERSTEIN, SENIOR LEGAL AFFAIRS CONTRIBUTOR, POLITICO:  Hey, Rachel.  Good to be with you. 

MADDOW:  So, let met ask you, when Rick Gates on the witness stand today started saying, yeah, these lobbying firms, they knew definitely that they were working for a foreign country and the reason I know that is because I told them directly, did it seem to you that that was a surprise in the courtroom?  Was there reaction in the courtroom to that exchange? 

GERSTEIN:  Well, it came at the tail end of his testimony, so, it came at a point where we didn`t really expect we`d be getting much new out of him.  I think, you know, for those who were attending, it wasn`t as crowded as the last time Rick Gates testified, when it was definitely sort of a capacity almost standing room only crowd.  There aren`t as many people interested in Greg Craig as there were in Paul Manafort. 

It did come as something of a surprise, kind of a collateral damage kind of thing that we weren`t exactly expecting.  Now, it should be said, there have been court filings and other articles and stuff, obviously, indicating that the lobbying groups involved here, the Mercury is one of them, and the Podesta Group is the other.  But there hasn`t been as much sort of directly pointing at specific individuals, which is what happened today, the head of Podesta, Tony Podesta, and a top lobbyist at Mercury, Vin Weber, who is a former Republican congressman, Gates saying directly they knew they were working for the government of Ukraine, yet they went ahead and basically told the federal government they were just working for sort of a private sector think tank. 

MADDOW:  Does it seem like -- you use the phrase collateral damage.  I mean, we know a little bit about this Ukraine scheme.  We know Manafort engaged this white shoe very fancy law firm, Skadden, where Greg Craig was working, where Alex Vander Swann, who`s another person went to jail, a Mueller related investigation was working.  We know that he engaged PR, at least one PR firm.  We know that he engaged lobbying firms, as well. 

It`s starting to feel like everything who touched this, everybody who worked with Manafort on this particular gig, has got some sort of exposure or at least a lot of hassle in terms of the kind of work this was and the fact that the Justice Department is newly interested in prosecuting people for potentially working for foreign governments without registering as foreign agents. 

GERSTEIN:  Yes, they definite have hassle, and there`s no question the Justice Department has poured through all kinds of emails and other communications.  I think that the notion that prosecutors would tie a case specifically to someone like Rick Gates -- in other words, would they build a case where they don`t think they could quite prove it, but with Rick Gates, they think they could prove it?  I`m a little doubtful of that. 

I mean, he listed, as you were saying earlier, Rachel, so many lies that he`s told over the last several years, so many deceptions, so many crimes.  At times, he was sort of arguing with one of the defense lawyers about whether he told this particular lie or not.  It seemed he couldn`t keep them straight. 

So, I don`t think he`s the kind of guy that you would bring in unless you thought you had a pretty strong case to start with.  If it`s just a matter of Rick Gates word that, you know, I told these people that and maybe later I told them something different, prosecutors are going to want something pretty solid and corroborative to go with that. 

MADDOW:  Briefly, Josh, though, am I right that Gates, however trustworthy as he is in the human, has every incentive in the world to not be caught out telling an untruth on the stand right now, in part because the judge who is about to sentence him, taking into account his cooperation and how truthful he has been and how effective he has been as a cooperator for the government, the judge who will sentence him is the same judge who is overseeing this trial right now against Greg Craig and before whom he was testifying today. 

GERSTEIN:  Right.  And it seemed today, Rachel, there were two cases being heard at the same time, Craig`s case, which is almost completely removed from what we were just talking about with Weber and Podesta.  But also, sort of a dry run, maybe, for the sentencing of Rick Gates, because he was sitting there, eight or ten feet away from the judge.  She was watching him very closely. 

And it seemed to me like he was actually impressing her, despite the history of lies.  At several point, she defended him during this hearing, you know, blocked defense lawyers from -- I think she thought they were hectoring him a little bit and told them to back off.  So, if his intent was to try to stay on her good side, it seemed to me he had done that successfully.  Whether that means he gets away with probation, as he`s hoping for, that`s something we`ll have to see when he comes up for sentencing in a few months. 

MADDOW:  Amazing.  Josh Gerstein, senior legal affairs contributor at "Politico", your dispatches from the court are the next best thing from being there.  Josh, thanks very much helping us understand.

GERSTEIN:  Thanks, Rachel. 

MADDOW:  All right.  Much more to come tonight, including New York`s state attorney general, Tish James, is going to be here live shortly. 

Stay with us. 

(COMMERCIAL BREAK)

MADDOW:  So, federal law says that the Ways and Means Committee in Congress is allowed to see anybody`s tax returns that they want to, even the president`s.  It is black letter, clear claw.  It`s not legally controversial.  There`s plenty of precedent to support it, even getting the president`s tax returns that way.  It`s been that way forever.  It`s been that way for, like, a century. 

Well, a few months ago, in April, Democrats in the house decided they would use that power.  The chairman of that committee, Ways and Means Committee, Massachusetts Congressman Richie Neal, told the Treasury Department he was going to invoke that authority.  And he, therefore, requested from the treasury department six years of president Trump`s tax returns.  Chairman Neal set a deadline for them to respond, then another deadline, the Treasury blew through them. 

So, then, the House Democrats decided they would subpoena the Treasury Department to get the president`s tax returns.  Treasury basically blew that off, too. 

In response, last month, the committee filed a federal lawsuit to enforce the subpoena.  And ever since, that case has been sort of, you know, plunking along, slowly, slowly.  Until this week, suddenly, there was, like, this confetti cannon of new activity, new filings. 

Richie Neal`s committee asked the judge for expedited consideration and a summary judgment because, quote, there are no genuine issues of material fact at issue in this case.  On the other side of it, the Trump Justice Department told the judge to go slow, not fast.  They`re claiming that there are complex constitutional issues at stake.  They told the judge this week there`s no reason to bring these proceedings to a gallop.  This is a horse that would prefer to trot and go very slow. 

So, this is a case, as I`ve said, it`s been plodding along, you know, methodically moving its way.  All of a sudden, though, this week, there`s been a ton of action in this case you and a ton of paper, literally, a ton of paper.  For the motion from Congress this week, the one that asked the judge to go ahead and rule, asked for a summary judgment, there were 54 attachments filed to that motion.  I decided I would print them out, which was a bad move. 

Except, turns out, tucked in there, if you read enough of them, you eventually get to exhibit QQ.  You have to use letters twice once you get past -- right.  It`s exhibit QQ.  It`s a letter from Ways and Means Chairman Richie Neal to Treasury Secretary Steven Mnuchin. 

Dear Secretary Mnuchin, on July 29th, 2019, the committee received an unsolicited -- the word unsolicited is underlined -- an unsolicited communication from a federal employee setting forth credible allegations of evidence of possible misconduct, specifically potential inappropriate efforts to influence the mandatory audit program, meaning the mandatory program that requires the audit of the income tax returns of a sitting president. 

So, what the committee is saying here is that they didn`t ask for it, but a whistleblower came forward to them from inside the government to give them information, to give them credible allegations of something having to do with the way the IRS is handling Trump`s taxes and the audit of Trump`s taxes. 

This whistleblower has come forward, according to the committee, with evidence of possible misconduct related to the inappropriate efforts to influence the audit of President Trump`s taxes.

Back to the letter.  Quote: In light of the serious and urgent concerns raised by this new information, I have requested a rolling production of certain documents and communications of specified Treasury and IRS employees.  Thank you in advance for your prompt attention to this matter. 

So, it`s kind of amazing in this news environment.  I mean, this -- is the only -- exhibit QQ, this is the only thing we have seen about this ever, right?  I mean, the issue of President Trump not handing over his tax returns, the first president since Watergate to not hand over his taxes, I mean, that`s one of the highest profile and longest-standing controversies about him as a politician. 

But it`s being pursued as an oversight matter in the House now by one of the quietest and lowest key committee chairmen.  Richie Neal of Massachusetts is not on television ever for a reason.  He likes to do this all very, very quietly, very, very methodically. 

And so, here is this eyebrow-raising claim that a whistleblower has come to the committee with credible allegations that there have been inappropriate efforts to influence the auditing of the president`s taxes, and it is buried literally as exhibit QQ among a 1 other attachments to an unheralded court filing that they didn`t even put a press release about. 

Now, we really don`t know what this is about.  We don`t know what this whistleblower has alleged and we don`t know what these, according to the committee, credible allegations are.  We don`t know what this whistleblower says has been the inappropriate effort to influence the audit of Trump`s taxes.  We don`t know. 

But the judge in this case may find out soon.  If you go down to the footnotes, quote, the committee is prepared to submit to the court the materials that led to Chairman Neal`s request.  So -- you know, just another day in the president`s finances.  Now, it`s a federal judge being offered information from a congressional committee about an unsolicited whistleblower who has come forward with credible allegations of inappropriate efforts to influence the handling of the president`s tax audit inside the IRS. 

So, that is now on the burner.  And now tomorrow, first thing tomorrow morning, another pot is about to come to a boil.  And that story is next with our guest, Tish James, the attorney general of the state of New York. 

Stay with us. 

(COMMERCIAL BREAK)

MADDOW:  Here`s something to keep an eye on tomorrow morning.  Ten a.m., before the Second Circuit Court of Appeals in New York, federal appeals court that sits in New York, there will be oral arguments in the case of Donald J. Trump and Donald J. Trump Jr. versus the Committee on Financial Services.  This is the president trying to block Democrats in the House from getting his financial records. 

In April, two committees in the House subpoenaed Capital One and Deutsche Bank to gain access to financial records related to the president.  The president`s long-time personal attorney general Michael Cohen had testified under oath that the president inflated his assets and lied about the value of things that he was in control of in order to secure bank loans or for insurance purposes.  The way Michael Cohen described it, he said those things could potentially amount to criminal bank fraud or criminal insurance fraud. 

Cohen`s testimony led to the subpoenaed by House Democrats to pry loose the president`s financial information from his bank and accounting firm to see if documents from those institutions might corroborate his allegations.  Even since then, there have been more allegations of that kind.  "The Huffington Post" is now reporting that the president filed financial disclosure statements that appear to misstate the value and profitability of his golf courses in Scotland by just a little bit, by just $165 million. 

He said in his American public filings that those properties were each worth $50 million.  At the same time, he told authorities in the U.K. that those properties weren`t worth anything like that.  They were, in fact, $65 million in debt.  Well, they could be either, but they can`t be both. 

What`s lurking in the president`s financial and business records that Congress has been working so hard to get?  I mean, that fight is on.  It`s this red-shot fight, waged in large part by the president to try to keep anybody from knowing what`s in his taxes or his financial records. 

So, we`ll see arguments in federal appeals court in New York tomorrow at 10:00 a.m. over whether or not Trump is going to be able to get Trump`s bank records, and that`s just one of the lawsuits that president has engaged in to try to stop Congress from getting his taxes and financial records.  There`s a whole bunch of them.

But, you know what?  Whatever happens with all of those federal cases and his fights with Congress, President Trump has another thing on his hands when it comes to a totally different adversary and inquisitor, the New York state attorney general. 

In March, New York Attorney General Letitia James subpoenaed Deutsche Bank for the Trump Organization`s financial records, including those related to the schemes that Michael Cohen described in his testimony.  Tish James is also leading an incredibly potent investigation right now into a key Trump political ally, the NRA.  That`s an investigation that has already plainly managed to freak out the NRA and its leadership. 

And just this week, Tish James launched a new lawsuit against the Trump administration over its recent immigration policies.  What have you been doing with yourself this summer? 

Joining us now is New York State Attorney General Letitia James.

Madam Attorney General, I`m really happy you`re here.  Thank you for coming in.

LETITIA JAMES, NEW YORK STATE ATTORNEY GENERAL:  Thank you so much for having me. 

MADDOW:  I know that summarizes only a tiny piece of what and your office are doing right now.  But that`s some of the stuff I have been trying to keep up with. 

JAMES:  Seventeen cases since I took office eight months ago, one every two weeks. 

MADDOW:  Really? 

JAMES:  Yes. 

MADDOW:  Tell me about the financial piece of this first.  It has been interesting to me to watch the president fight tooth and nail.  He hired a whole new raft of lawyers that are only trying to keep his taxes and financial information secret.  And he`s got a bear of a fight over that, both in his taxes and his financial documents with multiple committees in congress. 

But he also seems to have a real fight with you on that.  Can you tell us about the progress on that? 

JAMES:  So, Rachel, before I get into the litigation, let me just tell you about who I am and let me just set the table for you. 

MADDOW:  Please?

JAMES:  We are a country of laws and rules, and it`s really critically important that we adhere to those laws and rules.  And what guides me and my principles is, I believe in equality and I believe that the law should apply to all of us and no one is above the law.  Those are simple concepts and simple principles that I believe in. 

And I also believe that as the attorney general of the great state of New York, that I cannot sit idly by and allow someone to basically subvert the United States Constitution or the Constitution of the great state of New York.  And that explains all of the litigation we`ve been involved in. 

We have a federal government which unfortunately has been engaged in retrenchment, a federal government which is closed.  And so, all of these lawsuits are defending the rights of immigrant, the rights of women, the disabled, the rights of individuals and their health care, the environment.  And the list goes on and on and on. 

And if we, again, are to continue the progress that we`ve made in this nation, if we are to believe in the simple concepts of equality for all and justice for all, then you`ve got to fight and you`ve got to stand up.  You have to use the law both as a sword and as a shield. 

Getting to your question.  So, there are a number of investigations going on in our office as a result of the testimony of Michael Cohen.  They raise some legitimate concerns. 

Now, the president of the United States has complained that I`m engaging in some sort of political witch hunt, that I`ve got some personal vendetta against him, that I campaigned against him. 

That is not true.  I`ve not politicized the office.  Mr. Cohen raised questions and some issues that I am obligated as the attorney general of the state of New York to pursue.  And so, we are following the facts and the evidence. 

And some of these cases, unfortunately, I cannot divulge, I cannot give you a status or update where they are.  I can only tell you that the office of the attorney general is standing up for the law, and, again, no one is above the law, including the most powerful individual in this country, and that is the president of these United States. 

MADDOW:  The financial issues in particular, one of the things that we can watch in those federal court fights that are happening between the president and various congressional committees, is that we can see how the president filing individual lawsuits, the president employing the Justice Department in some cases to come in on his side in those lawsuits against Congress and them trying -- we can sort of see how his legal strategy has stopped those inquiries or at least slowed them down for now.  In terms of the way that he has fought you on these matters, do you feel that you have been stopped or that you have been diverted from anything that you`re pursuing because of his work? 

JAMES:  By no means.  See, the president of the United States uses the lawsuits, he hides behind the law.  And what we need is accountability and transparency.  For instance, the Trust Act.  The Trust Act was an act passed by the New York state legislature, which basically says that the three committees in the United States Congress can ask for the president`s tax records in the state of New York, his state taxes. 

So, we`re in litigation right now, because the president individually and personally filed a lawsuit against me, the ways and means committee of Congress as well as New York taxation and finance, basically blocking his taxes.  And as you know, Rachel, every president has offered up their taxes.  Their state and their federal taxes, but not this president. 

Why shouldn`t the law apply to him?  Why shouldn`t he be held accountable?  Why shouldn`t he provide transparency to me and individuals who would like to see his taxes? 

MADDOW:  Let me ask you -- this is a naive question.  You can tell me I`m dumb for asking it. 

JAMES:  I would never do that. 

(LAUGHTER)

MADDOW:  I might deserve it sometime.  Don`t rule it out.  But on that last point that you were just making about this New York state law that says under certain circumstances, a person`s state -- the president`s state tax returns could be handed over to the appropriate members of Congress, if that gets to the end of the line, in terms of the president trying to sue you and trying to block that in court and trying to fight that out through litigation, and the president just decides, you know what, I`m going to flunk that law, what is New York going to do, arrest me? 

I mean, where does that end, if the president decides that`s a state law and he just doesn`t feel bound by it, even if he loses in the court? 

JAMES:  So, the reality is, we are fighting this case, one, because it was filed in the District of Columbia, and we believe New York is not subject to the jurisdiction of the District of Columbia and the case should be heard here in New York.  And, two, he`s arguing that the Trust Act is in violation of the First Amendment and we are somehow retaliating against him because of his political views and nothing can be further from the truth. 

If, in fact, he loses and, right now, the case is being held up until we resolve these just jurisdictional issues, if we win, and if Chairman Neal of Ways and Means requests his state taxes in furtherance of congressional responsibilities and duties, and then we have -- we will turn over those state taxes.  And so, Chairman Neal has yet to ask us and so it`s really premature to bring this lawsuit and I`m confident that his lawsuit against me, against taxation and finance and against Chairman Neal will be dismissed because it is premature. 

MADDOW:  One other matter I want to ask you about, but we`re going to take a quick break.  You appear to be driving the National Rifle Association to distraction right now with your investigation that involves their -- potentially their nonprofit status, I`d like to ask you about that when we come back. 

JAMES:  Sure. 

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

(COMMERCIAL BREAK)

MADDOW:  Joining us once again is New York State Attorney General Letitia James.  Attorney General James, thank you for staying with us.  Much appreciated. 

A few days ago on the show, I talked about you being sued, once again, in your official capacity as attorney general.  And in this case, I was just puzzled by it, because the NRA was suing you, your office, I know, has launched an investigation into the NRA, looking into the group`s financial dealings, looking into whether the group may have abused its nonprofit status, they are chartered here in New York state. 

And as I understood it, and as explained it to our viewers, the NRA was suing you because you had subpoenaed Oliver North, the former president of the NRA, you were planning to depose him pursuant to that subpoena, and the NRA was suing you because they wanted their own lawyers in the room while you deposed him. 

JAMES:  Correct.  And they lost. 

MADDOW:  Ah.  OK.  Why did they sue you over that? 

JAMES:  They were suing me basically saying that it was in violation of certain privileges, attorney-client privilege.  And they lost.  And so, we will be deposing Oliver North and we will be looking into the NRA and their finances to determine whether or not they violated not for profit law in the state of New York. 

There`s been a number of allegations and there`s been a number of individuals who have stepped forward who serve on their board who want to cooperate with our office.  So, clearly, we have a responsibility and a duty to ensure that individuals who contributed to the NRA, that it has been done in accordance with New York state law. 

MADDOW:  So, I know that your office subpoenaed something like 90 people who, including a lot of current and former board members --

JAMES:  Correct. 

MADDOW:  With the NRA.  Some of the people who either served in the past or currently serve on the board are helping with your investigation? 

JAMES:  A number of individuals have reached out to us with respect to the NRA. 

MADDOW:  In terms of the NRA`s nonprofit status, they are chartered in New York state.  That means it is in your jurisdiction in terms of whether or not they hold on to that status.  Is that specifically what is at risk for them if these allegations are born out or are their other potential ways they might be on the hook? 

JAMES:  Because they are chartered in the state of New York and because we have a responsibility and duty to ensure that all not-for-profits in the state of New York, adhere to the laws of the state of New York and protect individuals who contribute to not for profits, and they follow the law, we are assigning and ensuring they comply with the laws, as all of the nonprofit laws have to do in the state of New York. 

MADDOW:  OK.  Attorney General Tish James of the great state of New York, I feel like every story that I cover has a Tish James angle, so, any time you`d like to come in and either correct me or help me understand it.  Please?

JAMES:  Well, the president of the United States says that I am bludgeoning him.  And so, to me, that`s a badge of honor. 

MADDOW:  Wow.

JAMES:  And -- but again, he needs to understand the rule of law applies to him as well and no one is above the law and the law should be used as a sword and a shield to protect vulnerable and marginalize people and project the great state of New York.  So, I`m doing that.  And believe it or not, I can`t believe I`m standing up for states rights.  That`s sort of ironic.  That`s what I`m doing.

(LAUGHTER)

MADDOW:  In a very specific way. 

JAMES:  Exactly.

MADDOW:  Attorney General, thank you so much. 

JAMES:  Thank you. 

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

(COMMERCIAL BREAK)

MADDOW:  One thing I want to mention about something we just talked about with Tish James, and also something I talked about at the top of the show.  I mentioned at the top of the show that former presidential hopeful John Hickenlooper, two-term governor of Colorado, announced today that instead of continuing his presidential race, he is going to run for U.S. Senate seat in Colorado.  Currently, that Senate seat is occupied by freshman Republican Cory Gardner, who was widely considered to be among the most vulnerable Republican senators who is up for re-election in 2020. 

If Democrats are ever going to take the Senate and remove Mitch McConnell from his job as Senate majority leader, there probably isn`t a path to do that that doesn`t involve a Democrat beating Cory Gardner and taking his seat.  And that is why you should see this. 

In addition to John Hickenlooper joining that primary field against Gardner, in addition to this newly upped pressure on Gardner from the Democrats who want to replace him, we just exclusively got this new ad from every town for gun safety, which is about to turn the pressure on Cory Gardner up another notch. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Lone gunman opens fire in Aurora, Colorado. 

UNIDENTIFIED FEMALE:  Newtown, Connecticut.

UNIDENTIFIED MALE:  Orlando. 

UNIDENTIFIED FEMALE:  Las Vegas. 

UNIDENTIFIED MALE:  Parkland. 

UNIDENTIFIED MALE:  Pittsburgh. 

UNIDENTIFIED FEMALE:  Mass shooting in El Paso. 

UNIDENTIFIED MALE:  Dayton, Ohio. 

ANNOUNCER:  It seems like every day, there`s another shooting.  This isn`t normal.  It`s time our elected officials did something about it. 

Tell Cory Gardner and Mitch McConnell to stand up to the gun lobby and pass bipartisan background checks and red flag laws to keep guns away from people who pose a danger to our communities. 

(END VIDEO CLIP)

MADDOW:  Again, we got that exclusively from every town for gun safety.  That ad is part of a national campaign pushing on Republican senators around the country, and in that one targeting Gardner on an issue where they think he may lose votes and be vulnerable in Colorado.  And so, yes, I mean, the top of the ticket always seems like the spot worth fighting for, but as this Democratic presidential field narrowing down, these candidates may be heading back to really real fights that are playing out back at home and Democrats do seem increasingly confident that part of the way they`re going to win hard races is by going hard on the issue of gun reform. 

We`ll be right back.  Stay with us. 

(COMMERCIAL BREAK)

MADDOW:  That does it for us.  We will see you again tomorrow, when again, we`re going to be doing a special show focusing on the strength of the Democratic 2020 field.  Very excited about that.  But I`ll see then.

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