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Prosecutors move to seize 40-foot catamaran. TRANSCRIPT: 9/18/19, The Rachel Maddow Show.

Guests: John Garamendi, Maura Healey

CHRIS HAYES, MSNBC HOST:  All right.  Michelle Goldberg, and Dave Weigel -- thank you both for being with me. 

That is ALL IN this evening. 

"THE RACHEL MADDOW SHOW" starts right now. 

Good evening, Rachel. 

RACHEL MADDOW, MSNBC HOST:  Chris, I promise that in all of the time that you and I share adjacent shows on this TV network, we will never have a crossover like the one you just played from Fox. 

HAYES:  My God.  My God. 


The thing -- the thing -- I mean, I think I`d heard something about that.  I heard it existed. 

HAYES:  I could talk about this for an hour, not 30 seconds. 

MADDOW:  But you nailed the thing that was scariest about it was the distance between the facial expressions and the conversation.  I mean, that was like hide under a table this is a scary family fight. 

HAYES:  That`s exactly what it was.  It had real family fight vibes to it. 

MADDOW:  Anyway. 

HAYES:  I hope everyone is making up and making amends. 

MADDOW:  Yes.  I want the best for everybody if only because I feel afraid by proxy. 

HAYES:  My strong feeling, too. 

MADDOW:  Thank you, my friend.  I appreciate it.  Eek. 

And thanks to you at home for joining us this hour. 

So, I have congratulations to offer.  Congratulations, you guys.  We are getting a new boat. 

Not right away.  We have to wait and see if, in fact, there is a conviction.  But if there is, look at what we are getting.  Now when I first read this in the indictment I thought, oh, we`re getting a little sailboat thingy.  It said it`s a catamaran that we`re getting and then it gave a whole number, I figured that meant like a little training sailing boat. 

Full disclosure, that misconception on my part might be because I know nothing about boats.  I do own a canoe, but I still don`t even understand how to control that.  If I tried to do it myself, I would go around in circles.  The only way I can operate is if Susan wants to paddle me around in which case I catch gigantic fish like that. 

I don`t even try to drive the canoe.  I can`t.  So, like grain of salt here, I don`t get boats. 

But I`m reading through this part of the indictment and it describes that we, the American taxpayers, are about to get a catamaran.  And so, to me, no boat concepts, that seems no big deal. 

But then you look the thing up by the hull number that is in the indictment, the catamaran hull number and it turns out it`s not just some little training sailboat.  It`s a 40-foot-long catamaran.  And it`s basically a big speedboat thingy. 

And it is really, really -- do we have a picture?  There, thank you very much. 

This is it.  This is a 40-foot catamaran.  It`s this gigantic, plush speedboat thingy.  This is what we are getting.  Which is very nice, right?  Congratulations are in order.  We`re getting one of these.  It`s a 2018, brand-new.  Nice brand. 

We`re also getting a 2018 Ford F-150, also a trail they`re goes with it.  And I think we`re also going to get these two items from Caterpillar.  This is the first one. 

I don`t think of these things as the sort of thing people bring home for personal use, but how fun would this be?  This one, a model just like this is described in the indictment as a tractor.  But when you look it up based on the model number in the indictment, I think more specifically, it`s what Caterpillar calls a small dozer, which would be fun.  Imagine tooling around on that on your back lawn. 

Also, we`re getting one of these.  It`s a model 320 medium sized Caterpillar hydraulic excavator.  Not the blue thing, the yellow thing.

We, the American taxpayers, are getting one of these to play with, plus about $5 million in cash.  Because if it turns out you were only able to obtain all that cash and all of those things, that surprisingly large boat and the small dozer and all the rest of it -- if you were only able to get all of those great things because of your crimes, specifically in this case because of your bribery of the main official charged by the Trump administration with overseeing the rebuilding of Puerto Rico`s infrastructure and power grid after Hurricane Maria, well, then if you are, in fact, convicted of those crimes for which you are now accused, you will have to give up the fruits of those crimes. 

You will have to give up the loot, the cash, right?  You`ll also have to give up the amazing medium sized hydraulic excavator and the very fast 40- foot long catamaran and the boat and the trailer and the truck and all the rest of it. 

In any other presidential administration, after 3,000 Americans were killed in a catastrophic hurricane and a botched federal disaster response thereafter, it would be the scandal of the year.  It would be a presidency defining, if not presidency-ending scandal, if the top person who the federal government put in charge of infrastructure rebuilding after that hurricane got arrested and charged with ten felonies for allegedly taking bribes from the contractor who got huge contracts to do that work.  Oh, and by the way, the work still isn`t done and it`s still an ongoing disaster. 

The contractor himself was charged with eight felony counts.  He will have to hand over his surprisingly fast boat and the bulldozer and the truck and the cash and all the rest.  In addition to him, a FEMA deputy chief of staff charged with three felony accounts for allegedly setting herself up with a private sector job while working on FEMA contracts for the company she was getting to hire her at something roughly approaching triple her FEMA salary and, of course, there`s the deputy regional administrator in FEMA -- for FEMA in Puerto Rico, who was designated the sector lead there for power and infrastructure following the Hurricane Maria disaster. 

Do you remember why all those people died after the hurricane had blown through?  Right?  With no power, including no power to the hospitals and all the rest of it? 

That Trump administration official is now facing ten felony charges, bribery, conspiracy, honest services, wire fraud.  In terms of this ongoing disaster, you may remember how some of this shook out, you might remember that the first contractor who got a gigantic, inexplicable FEMA contract from the Trump administration to rebuild the power grid in Puerto Rico, this thing on which -- you know, thousands of people`s lives were hinging, the first contractor who got that huge contract from FEMA to rebuild Puerto Rico`s grid was a mysterious, previously unheard of contractor from Montana who seemed to have links to the Trump administration maybe. 

It was a firm that appeared to have basically no employees.  They had two full-time employees.  They were based on a Suburban truck house.  And after lots of controversy over who they were and how they got this very, very important and remunerative gig, they ultimately lost the gig when they couldn`t explain, among other things, why they were planning to charge the U.S. taxpayers an hourly rate for all the linemen who would be working on electrical lines in Puerto Rico, they`d be charging an hourly rate for those linemen of $300 per hour, per lineman. 

And so, that contract fell apart in scandal.  That was the first contract they gave out after Hurricane Maria to set up the grid.  That one -- then they brought this other contractor onboard. 

Through FEMA, this other contractor called Cobra, they were going to get paid $1.8 billion as the plan B second choice contractor to rebuild Puerto Rico`s electrical grid.  They ended up getting paid $1.1 billion before their contract, too, was canceled because of mysterious irregularities discovered only after $1.1 billion had already been dispersed to them. 

Those irregularities are less mysterious now that we can see this litany of bribery charges laid out in black and white in this federal indictment. 

So, this has been a disastrously managed manmade catastrophe from beginning to end and it continues.  And the people of Puerto Rico have paid and are paying the human price for it.  And now, we`ve got these three arrests and depending on how the prosecutions turn out we, the American people, may not only see some people in jail for these alleged crimes, we may get ourselves a new boat and some other new stuff, too, by virtue of the forfeiture section of this bombshell indictment. 

But it turns out that this is a story that just keeps getting more astonishing by the day.  You probably heard about this indictment already, right?  Well, get this. 

So, the high-ranking FEMA official who was just arrested, turns out she had a deputy at her position for FEMA in Puerto Rico.  She was the Trump administration`s sector lead for power and infrastructure in Puerto Rico.  Her number two was the deputy sector lead for power and infrastructure in Puerto Rico. 

What`s his background?  As first reported by CBS News, it turns out that he, too, the deputy, has recently been arrested in a totally different giant U.S. government bribery scandal.  He was a Navy officer who was suspended from his Navy command over his alleged involvement in the Fat Leonard scandal which we`ve covered quite a bit on the show. 

The biggest Navy bribery scandal ever.  It`s this big, sprawling, lurid scandal involving lots of money and lots of classified information and lots of hookers and lots of really expensive meals at terrible sounding restaurants. 

This guy was suspended from his Navy command because of his alleged involvement in the Fat Leonard bribery scandal in the Navy.  Nevertheless when the Trump administration took office in 2017, they decided that that`s the guy they would hire to the senior role at FEMA. 

Now, did they ask the military why it guy had been suspended from his navy command by any chance before they hired him?  I don`t know.  But any mystery around that part of the guy`s past would have been cleared up this past year in August when he was indicted by a federal grand jury for his alleged involvement in that Navy bribery scheme.  He was arrested thereafter. 

So, think about this for a second.  The number one person who the Trump administration assigned to oversee restoration of power in Puerto Rico, the restoration of the power grid in Puerto Rico, that person has now been arrested on ten felony counts for bribery. 

Her deputy on the job has also been arrested and indicted on multiple federal counts for alleged bribery.  But in his case, it`s a whole different bribery scheme.  I mean, they must have gotten along so well at the office, right? 

Secret Santa, and their corner at FEMA headquarters must have been like -- oh, look, you got me a ski mask.  Is that a fingerprint removal kit?  Oh, my God.  Who wants the fake ID for opening Swiss bank accounts?  I`ll trade you that for the lock picks. 

I mean, what was going on?  How do you end up with -- if you were aiming at hiring multiple felony bribery indicted -- I mean, the -- and the -- but don`t worry.  The Trump administration has decided to shake things up and get control over there. 

Earlier this year, the Trump administration announced President Trump`s new nominee to be the new head of FEMA.  Now they announced him in February.  They formally announced him a couple months later.  It`s been six months since they announced that he`s a Trump administration pick.  Six months, whatever happened to that nomination.

Well, in recent days, there have been these, sort of, vague, slippery reports that there might be something going wrong with this nomination.  "Politico" reporting recently that there was something personal, there was a personal issue in the nominee`s background that was tripping up his nomination process.  Nobody was willing to say what the personal issue was or why it didn`t surface when he went through his confirmation hearing and was cleared by committee, why it might only be surfacing as his nomination should have been heading to the floor for a final Senate vote. 

It was later reported the personal issue might have had something to do with an altercation.  OK.  But still no specifics on that. 

Given the Republican controlled Senate`s willingness to confirm basically anybody from the Trump administration for any purpose, the holdup with this guy started to seem a little worrying.  I mean, think about all the people they`ve let through, right?  We don`t know what`s holding this guy up, but it is holding him up.

Now, it emerges from reporting done by NBC News investigative producer Laura Strickler that this guy who Trump has nominated to be the new head of FEMA, whatever his personal issues may be, whatever the altercation was, I don`t know, whatever else is going on with him, turns out he was the person at FEMA headquarters who was personally, individually the point of contact at FEMA headquarters in D.C. for the official who just got arrested on ten felony counts for bribery. 

She is charged with alleged crimes that started right after Hurricane Maria, in October 2017.  According to the indictment her alleged crimes started in October 2017 and continued through April of this year, April 2019. 

We have obtained an April 2019 FEMA org chart.  And as you can see, here right in the center, here is deputy regional administrator for the Caribbean area, as it says at the top of the chart there.  That`s the person who just got charged with ten felony counts for bribery.  And as you can see, there is one line that shows where she connects to FEMA headquarters.  So, the line that goes to the right out of her little box and there`s one guy`s name in that box that she connects to and that is the guy Trump nominated to be the new head of FEMA. 

According to a statement FEMA gave us tonight, quote: The dotted line on this organization at chart represents a coordinating relationship. 

OK.  I mean, separate and apart from whatever the personal issue with this nominee to run FEMA and whatever the altercation may have been with this guy if there was one.  I mean, but they have to give the guy a redo confirmation hearing at this point? 

So, Mr. Byard, tell us more about the billion dollar federal bribery scheme in region two?  Did they coordinate that with you?  How were your other regions?  Did you know the person just arrested in the bribery scheme had a deputy recently arrested in another gigantic bribery scheme involving the U.S. government?  Was that a problem in the office?  Was that a red flag at all?  And you`re going to run the whole agency now. 

Well, apparently, we can now report that Mr. Byard does not want a redo confirmation hearing.  There has just been reporting in the last hour from several outlets that the White House is pulling this new nomination to run FEMA, including from "The New York Times" which reports that the issue was a, quote, barroom altercation. 

We can report exclusively here tonight that Jeff Byard actually sent a letter to the acting director of homeland security last Thursday, formally requesting his nomination be withdrawn or at least we can tell you about the existence of a letter written to the acting director of homeland security that is dated last Thursday.  I don`t know when it was written but it is dated September 12th. 

Here is the letter.  I think this is exclusive, the first anybody has seen this letter as far as we are aware.  Quote: Secretary McAleenan, sir, please accept this as my formal request to withdraw my nomination to serve as administrator for the Federal Emergency Management Agency.  I feel like it would be best for me entirely on pressing issues related to my current rule as the associate administrator for response and recovery.

So that is that apparently.  I should tell you that we have been communicating with FEMA about the Byard nomination for several days, and we`ve had a lot of back and forth with them about the official who was arrested, her deputy who was also arrested on different bribery charges, on Byard`s role as the person at FEMA headquarters who had a coordinating relationship with her, the only person on the org chart who was connected from FEMA administrators directly to her office. 

We`ve been talking about that for a couple days now and a lot today.  And I just want to tell you in the interest of full transparency, they called us literally five minutes before show time tonight to tell us that actually Jeff Byard had withdrawn his nomination last Thursday.  They didn`t mention his withdrawn -- we`re asking about Byard for days.  They didn`t say anything about his nomination being withdrawn.  Five minutes before show time today they said, oh, yeah he`s been gone for a week. 

Make of that what you will.  The letter they gave us tonight is dated last week.  It is dated September 12th. 

Tonight, "Axios" reports that although Jeff Byard`s nomination was not formally withdrawn, President Trump had a new guy in mind already.  I`m sure he`ll be great if that is, in fact, the new pick.  I`m sure he`ll be great.  And I`m sure he`s been carefully vetted, otherwise they wouldn`t put his name out there. 

And at one level, this is just another on the pile of Trump related criminal indictments, right, since he has been president.  At another level, it is the umpteenth sequel in the ongoing career-destroying, soul- sucking horror movie that is the Trump administration`s either refusal or complete inability to vet people for senior jobs or even not so senior jobs in the U.S. government.  On yet another level, this is a fairly keen insight into just how well the Trump administration has taken care of the people of Puerto Rico.  Especially in the aftermath of the natural disaster that would not have claimed 3,000 American lives had it not been so drastically botched as a disaster relief effort, most particularly when it comes to infrastructure and power grid of Puerto Rico. 

But if you look at it from the Trump administration`s own perspective in terms of what they care about and what they want to be known for and what they want to be seen doing, I mean, there`s President Trump today at the border in California signing a piece of the border, literally writing his name on a piece of the border.  And here`s the Trump administration happily defying the Pentagon and Congress and a million lawsuits and lots of very reasonable concerns, including national security concerns to instead take money from wherever the president can, including the U.S. military, because it has to go instead to the border, because the border must be secured because homeland security is everything. 

Well, this is the stuff they most care about.  This is the stuff they most want to be judged on.  This is the stuff that where they`re putting all of their effort, to the detriment of even other stuff that has real political cost when they low ball it, right? 

Well, the Department of Homeland Security is now led by an acting secretary who is supported by an acting deputy secretary.  You might have seen the news today they just fired the general counsel of the Homeland Security Department as well, the top lawyer in the department.  Quote: We thank John for this service and we wish him well. 

He`s the top lawyer in Homeland Security.  They pushed him out so suddenly yesterday that the Trump administration still doesn`t know who is going to replace him.  The White House says it`s one guy.  The Department of Homeland Security says some other guy.  Who knows?  We haven`t bothered to get our story straight, but he had to be fired immediately. 

And whoever is going to come in to be the new general counsel will be acting, too.  So, there`s acting secretary, acting deputy secretary, now, they`ll be an acting general counsel, or maybe two.  Who knows?

The sort of chief operating officer of the Department of Homeland Security is the undersecretary of management.  That`s an acting person right now as well.  Customs and Border Patrol, that`s an acting commissioner.  ICE, that`s an acting director.  U.S. Citizenship and Immigration Services, that`s an acting director.  And, of course, FEMA, where do I begin. 

Like I said, I`m sure the new guy, the new, new guy will be great.  I mean, I wonder who they`ll find to replace the folks against whom all the felony bribery charges are pending.  I mean, I don`t think -- from our back-and- forth with FEMA today, it seemed like they were trying to assure us that those people would not be staying on while charges pend, like while they`re out on bail? 

FEMA, I think, was assuring us that that wouldn`t happen.  But, you know, it is hard to get good people these days.  And this is what they want to be best at.  This is what they want to be seen working on to the exclusion of everything else. 

And now, tonight, as the FEMA director`s nomination is pulled in very weird circumstances, tonight there is new news of what is just now falling apart in the plan to take money from the military to pay for the wall instead.  We`ve got brand-new news on that front, next.  Stay with us. 


MADDOW:  So, we have breaking news right now on a mystery we have been following over recent days.  "The Washington Post" has just posted a fairly jaw dropping story on a subject we have been trying to cover for the past few days.  This just broke while I was doing the "A" block within the last couple of minutes.

This is about the whistleblower that we first learned about Friday night from the House Intelligence Chairman Adam Schiff.  He released a letter he had sent to the acting director of national intelligence.  A whistleblower had apparently come forward from inside the intelligence community with an urgent and credible complaint. 

The director of national intelligence was refusing to turn that complaint over to Congress despite federal law that said he had to do so within seven days.  The DNI blowing through the deadline is something that no director of national intelligence had ever done before. 

Now, the director of national intelligence said he wasn`t handing over the complaint despite the law because he claimed it contained potentially privileged material.  He also took the unusual step of consulting with the Justice Department about what to do about this complaint.  The Justice Department should be totally outside this process. 

All of those strange circumstances led Chairman Schiff to conclude the whistleblower complaint might have something to do with the president or senior administration officials close to the president.  Well, tonight, "The Washington Post" has just broken this news.  A scoop that suggests Chairman Adam Schiff was on to something. 

The headline is this: Trump`s communications with foreign leaders are part of whistleblower complaint that spurred standoff between spy chief and Congress. 

Here`s the lead.  The whistleblower complaint that has triggered a tense showdown between the U.S. intelligence community and Congress involves President Trump`s communications with a foreign leader, according to two former officials familiar with the matter.  Trump`s interaction with the foreign leader included a promise -- promise is in quotes -- a promise that was regarded as so troubling that it prompted an official in the U.S. intelligence community to file a formal whistleblower complaint with the inspector general for the intelligence community. 

It was not immediately clear which foreign leader Trump was speaking with or what he pledged to deliver, but his direct involvement in the matter has not been previously disclosed.  It raises new questions about the president`s handling of sensitive information. 

Now in terms of what the information was or how it came into the hands of this whistleblower, one former official is telling "The Washington Post" the communication in question was a phone call.  So, a phone call between President Trump and a foreign leader.  In terms of who it might have been - - well, according to "The Post" tonight, the complaint was filed with the inspector general`s office on August 12th. 

On August 12th, that`s a date on which President Trump was at his golf resort in New Jersey.  White House records indicate Trump had conversations or interactions with at least five foreign leaders in the preceding five weeks.  Among them was a phone call with Russian President Vladimir Putin which was initiated by the White House on July 31st.  In that same time period, Trump also received at least two letters from North Korean leader Kim Jong-un.  Trump also had meetings with other foreign leaders at the White House in July, including leaders from Pakistan, the Netherlands and Qatar.

But, again, according to one source speaking with "The Washington Post", the troubling communication by the president was a phone call.  And in terms of Trump`s phone calls with foreign leaders, at least one of the phone calls in that period was with Vladimir Putin. 

We don`t know what the troubling promise was.  We also don`t know how this whistleblower would have known about the contents of the president`s phone call with the foreign leader. 

But joining us now by phone is "Washington Post" reporter Carol Leonnig who contributed to this just breaking story from "The Post."

Carol, thanks for joining us on short notice.  I really appreciate it. 

CAROL LEONNIG, INVESTIGATIVE REPORTER, THE WASHINGTON POST (via telephone):  Of course, Rachel.  It`s a pretty sensational event tonight learning about this which we`ve been trying to chase for the last few days since Adam Schiff`s letter and now this new information has come to our great "Washington Post" colleague. 

MADDOW:  Yes, Greg Miller, Ellen Nakashima and Shane Harris, I should mention, the lead reporters on this.  Carol, you contributed to this. 

I want to -- first, I should ask you if I hit the high points there.  It seems to me this information was a communication by the president, it was a communication by the president with a foreign leader, it was a troubling promise that he made, in that it was a conversation by phone.  It does seem like if those are all clues that "The Post" has been able to ferret out it should be able to narrow it down in terms of the time frame and the potential things that could be within those realm of factual four corners that this could be. 

LEONNIG:  Yes.  I mean, it does mean -- keep in mind, Rachel, the president speaks to a lot of foreign leaders every day.  And some which are not obvious to us or recorded for posterity, meaning there have been a lot of stories about the president having conversations that are not -- there are no note takers.  We don`t know for certain exactly whom he was speaking to. 

But the sources are saying that these are the critical pieces.  Somebody who used to work at the White House and now has returned to their intelligence agency has complained to the inspector general that this is such a serious and flagrant abuse that they want it on record, they want it noted.  And the inspector general has also made it clear that this is something the Gang of Eight would normally be briefed about under the statute. 

So, it`s serious.  It`s not a small thing.  The sources are also saying and stressing that this is some sort of promise the president made. 

Meanwhile, White House sources are saying to me that we have to keep in mind the president is the ultimate sort of declassifier in the government, and if the president decided that he wanted to share something sensitive or provide something sensitive or promise something sensitive, that he has full authority under the law to do that.  The public may not love what he promised, if these sources are correct.  But he does have the authority under the law to do that if that`s what`s happened. 

MADDOW:  Although, Carol, correct me if I`m wrong, the whistleblower process, particularly within the intelligence community going through the intelligence communities inspector general is such that something being classified shouldn`t be a barrier toward it being treated as a whistleblower matter through this process, right, at every step of the way here both with the I.G. and with the director of national intelligence and with the intelligence community -- intelligence committees in Congress.  They`re supposed to be able to handle classified information no matter how classified it is, if it is still, nevertheless, a matter of concern or grave abuse. 

LEONNIG:  Oh, absolutely.  I mean, it`s not something the gang of eight can`t know about.  Remember that one of the big clues here is that someone along the way, either the Justice Department or the White House or both were consulted and there was some issue of privileged communications outside the intelligence community, an agency other than the intelligence community with some sort of privileged communications that they felt made this that couldn`t be shared with Congress. 

That immediately screams out to a lot of reporters is some sort of White House executive privilege.  We don`t know the answer to that yet. 

When I raise the issue of classified material, I`m just saying that say the president provided, promised, suggested he was going to provide something that was very sensitive, say intel sources and methods.  That would make a lot of people rear up their heads and be very concerned if the foreign leader was an adversary or the information could be exploited, could put our national security or our allies at risk. 

Still, the president has the authority to declassify as he chooses.  He`s the ultimate power there.  I`m not saying that you couldn`t share this kind of whistleblower complaint with Congress as a result of some of the information being classified. 

MADDOW:  And, Carol, to the point -- it`s interesting the point you`re raising about the Gang of Eight.  Obviously, again, the process in terms of intelligence oversight is that they`re supposed to be able to see everything and they`re supposed to be briefed on everything no matter its sensitivity. 

Are there -- forgive my ignorance here, are there issues where the Gang of Eight has been deprived access to information about the government`s own behavior or toward the president`s own behavior on the basis of privilege in the past?  Is that grounds on which things are kept secret even from them? 

LEONNIG:  I have not seen that before.  I don`t expect that -- it`s impossible it`s happened before.  I`m not aware of it happening before. 

Of course, I`m drawing on fairly limited knowledge on breaking news deadline, not researched it extensively. 

I would say this to your smart question, though, Rachel -- this White House has been far more aggressive in its claims that congressional oversight can be limited, curbed and constrained by the executive`s desire to keep things under wraps, and you`ve seen that in the efforts to even just review the findings of the Mueller investigation, and in an effort to talk to witnesses in that probe and the privileges that have been cited, the ideas of vague confidentiality or White House interests that can`t be compromised.  It`s a pretty aggressive strategy and all White Houses try to limit how the oversight peers into their world, but this one`s gone more conservatively in the direction of keeping the curtain closed. 

MADDOW:  Uh-huh.  And thus -- and perhaps the confrontation with what the intelligence community has set up in terms of its own very controversial, very rigorous, very well-earned oversight strictures from the post- Watergate era.

Carol Leonnig, "Washington Post" reporter, joining us on very short notice, contributor to this new reporting from "The Post" tonight -- Carol, thank you very much for helping us understand.  I really appreciate it. 

LEONNIG:  My pleasure.  Good luck, Rachel. 

MADDOW:  Thank you.  Again, the headline tonight, just breaking from "The Washington Post", President Trump`s communications with foreign leader are part of a whistleblower complaint that spurred standoff between spy chief and Congress.  We have been watching this unfold since late on Friday night when the intelligence committee chairman, Adam Schiff, first let it be known he was aware somebody within the intelligence community have come forward through proper channels to the inspector general for the intelligence community and said, I`ve got a serious problem. 

The inspector general looked at it and said, this is credible and this is urgent.  That set in motion stuff that`s supposed to happen by rote without any pushback.  They forwarded it to the head of a relevant agency, in this case, it was determined that should be the director of national intelligence.  The DNI was then supposed to give it to the Intelligence Committees in Congress within seven days.  The DNI refused to do that.  And that has sparked this controversy.

We knew that the inspector general is going to be in a -- there was going to be a closed session tomorrow in the Intelligence Committee.  Closed doors.  And we won`t be able to see it as the public about this matter.  There`s been threats of subpoenas from the Intelligence Committees if they need to get this and fast. 

Now, "The Washington Post" is first to substantively report what this may be.  If, in fact, the president, as is claimed in "The Washington Post" reporting tonight, made some sort of claim to a foreign leader, a, quote, promise, a promise that was regarded as so troubling that it prompted an official in the U.S. intelligence community to file a formal whistleblower complaint, I imagine that this one person is probably not the only person who knows what the promise was.  They`re coming forward on this matter now that the country knows how serious this might be, I imagine, will be the start of the story. 

We`ve got much more ahead on this ahead.  Stay with us.


MADDOW:  You might remember early on in the Trump administration the first summer he was in office, there was a bombshell leak of a number of transcripts of the president`s phone calls with foreign leaders, including the president of Australia and the leader of Mexico, including the president saying sort of embarrassing, ignorant and disparaging things both to those leaders and about those calls. 

A lot of scandal around the fact "The Washington Post" obtained those transcripts.  They were created by White House staff.  One of the changes the Trump administration made thereafter is they stopped putting note takers on calls between the president and foreign leaders.  There stopped being formal and detailed readouts about what happened in those conversations.  Presumably the idea they didn`t want another leak of what was going on in those calls, even if the initial leaks this been essentially people trying to let it be known how the president was behaving to foreign leaders in a way unprecedented to what we`ve seen from any previous president. 

Well, now, tonight, that makes it all the more remarkable "The Washington Post" has a new scoop that has just posted within the last half hour or so.  That the president may have had a phone call with a foreign leader in which he made a promise that was regarded as so troubling that it prompted an official in the U.S. intelligence community to file a formal whistleblower complaint with the inspector general for the intelligence community. 

This is a whistleblower complaint that has triggered a very intense showdown between the Trump administration and the Intelligence Committee in the House in particular.  They`re supposed to get whistleblower complaints like this.  There have been threats of subpoenas.  There`s been a real standoff over this. 

"The Post" is the first to report what this complaint might have been about is the president saying something very, very troubling to a foreign leader in a way that at least some in the intelligence community became aware it have and went through channels to raise a flag about what happened. 

Joining us now, again, on short notice, is Congressman John Garamendi, who`s the chair of the House Armed Services Subcommittee on Readiness.

Mr. Garamendi, I have to tell you, every time we book you to talk about something going on in your area of expertise, something else bongo -- that is a bombshell and totally gonzo breaks in your area for expertise.  So thank you for doing this for us. 

REP. JOHN GARAMENDI (D-CA):  Yes.  Happy to be with you, Rachel. 

This is just astounding what`s going on here.  Certainly the incident itself, whatever it might be is extremely troublesome, but it`s one more brick in the wall that the president is trying to build around himself to stonewall the Congress of the United States and the American people from things that he has done as president and before he became president. 

In his own words, he said under no circumstances will his people ever comply with a subpoena.  Well, here we go one more step on that.  And this could be extraordinarily important because there are things at play right now that may very well have been the promise.  One of which I`ve been dealing with as chairman of the Armed Services Committee. 

MADDOW:  When you say the promise, we don`t know in terms of what "The Washington Post" is reporting here, right? 

GARAMENDI:  That`s correct. 

MADDOW:  "The Washington Post" says it`s -- Trump`s interaction with the foreign leader included a promise that was regarded as so troubling that it prompted an official to file this formal whistleblower complaint.  One former official telling "The Times" that the communication was on a phone call.  We know the whistleblower complaint was filed in August, August 12th. 

So, that narrows it down in terms of what communication it might have been. 


MADDOW: I have to say, just thinking about this from a process standpoint, if this was the worst case scenario, if this is something that the worst thing we could possibly imagine, what else is this whistleblower supposed to do besides go through this process that the Trump administration is still bottling up? 

GARAMENDI:  Well, apparently, the law is absolutely clear.  The information has to be made available to the intelligence community, the Gang of Eight. 

But I`ve got to tell you, I`m worried about the promise if there was one and if it was the president.  If he was talking to Putin one month after that August 12th period of time, the president removed $770 million from the European Deterrence Initiative which is specifically money to push back on Russia`s incursion into Ukraine and annexation of Crimea.  God help us if that was what the discussion was about. 

But it is troubling -- it is troubling when you start stacking all of these things up.  $5 billion out of the coffers and the work the military does to build his border wall.  It was nice he went down and signed that steel post.  But that happened to have been a fence that was already in place before he ever got there, before he ever became president. 

It`s one thing after another.  This administration, its stonewalling, its refusal to be held to account, it just -- is beyond anything that anyone has ever seen in the history of this nation. 

MADDOW:  Do you have confidence, sir, especially given your role in oversight of the U.S. military, do you have confidence in the military?  Do you have confidence in the inspector general`s system so that when the most egregious things happen, that the supposedly legally protected channels for people letting us being -- letting it be known what`s happening and why, that those channels will be held open, or do you think that the system is failing? 

GARAMENDI:  I think there`s an entire attitude of laxity with regard to activities, proper activities.  It begins at the White House.  The leader is clearly corrupt.  There`s no other way to describe it. 

The leader is clearly a liar.  A leader has no use for the truth and will say anything at any time that advances his particular interest at that moment.  And so, that tends to sift down through the entire administration. 

You gave a long dissertation just in the early part of this hour about what`s going on in FEMA and the tragedy in Puerto Rico as a result of the corruption, as a result of the laxity to laws and just ignoring the normal correctness that ought to occur at every level. 

The military is outstanding.  These are all very, very good people.  But when the top makes it clear that they welcome -- the president when he welcomes on to his property literally millions of dollars of taxpayer money to support him at Mar-a-Lago and at his other resorts, it doesn`t surprise me that all across, in this case the military, that they see, well, why don`t we go ahead and book some rooms at the resort at Turnberry in Scotland?

It`s just -- this whole thing is just a corrupt administration.  It sifts down.  I don`t believe there was any intentional wrongdoing on the part of the military.  But the laxity of standard, it`s endemic in so many places. 

And as representatives of the people of America, the 535 of us in the House and in the Senate, we have the obligation to hold the administration accountable, to uncover the deflects, to uncover the fraud, the corruption, and to let the American people know there is three branches of government, and the administration cannot do anything it pleases to do even though it apparently has courts now that will let it do it.  But we`re still the representatives of the people and we have an obligation here to investigate and to let the public, our constituents, the American people, know what`s going on. 

MADDOW:  California Congressman John Garamendi of the House Armed Services Committee, the chair of the Subcommittee on Readiness, sir, I appreciate your time tonight.  Thank you for being here.


MADDOW:  And for always be a harbinger of breaking news.  I really appreciate it.

GARAMENDI:  Take care.

MADDOW:  All right.  We`ve got more ahead.  It`s turning out to be a very busy night.  Stay with us.


MADDOW:  News tonight, a story we`ve been following closely on the show, Purdue Pharma, the company behind the mega opioid OxyContin, which is charged with fueling the epidemic that has claimed the lives of 400,000 Americans. 

Purdue is currently in bankruptcy court trying to settle thousands of lawsuits brought against the company, filing for bankruptcy almost automatically puts all of those lawsuits against the company on hold.  But crucial point, that doesn`t stop the mounting pile of lawsuits against the family behind Purdue Pharma, the Sackler, which was enriched to multibillion dollar effect by the sales of OxyContin and that has taken billions of dollars out of the company as the company approached bankruptcy. 

So, bankruptcy stops the lawsuits against the company but not against the family.  Except now, tonight, lawyers for Purdue are asking the bankruptcy judge to also put on hold all the lawsuits against the Sacklers personally, which, of course, is an effort to try to shield the family wealth from these lawsuits.  Lawyers as of now are asking for an injunction against lawsuits against the Sackler family personally because they say they are related parties to Purdue in the overall bankruptcy case. 

Now, this is a highly unusual move.  It suggests that by filing for bankruptcy, the Sackler family is looking to protect themselves too not just the company as a way to protect their own personal billions of dollars. 

My next guest is the first attorney general to sue the Sackler family personally.  Maura Healey is the attorney general from Massachusetts.  She wrote a blistering op-ed in "The Washington Post" this week explaining why she and 20-plus other state attorneys general are rejecting Purdue`s settlement offer. 

She said in that op-ed in part, quote: Accountability means making the Sacklers reaching into their own pockets.  It means telling the full truth.  It means shutting down Purdue for good, and accountability means listening to the families who are calling for justice. 

Joining us now is the Massachusetts A.G. Maura Healey.

Madam Attorney General, thank you very much for joining us tonight.  It`s good to have you here. 


MADDOW:  So we`ve been watching the legal accountability issue for the opioid crisis sort of spread out as the companies and the families enriched by the companies` behavior try to make their legal liability come to an end.  They try to sort of cut these things off and try to protect themselves. 

What`s your big picture view of where we are right now in terms of legal accountability for the crisis? 

HEALEY:  Well, you nailed it, Rachel.  This is about accountability.  Look, Purdue going out of business is a really good thing.  But the Sacklers can`t and shouldn`t use the bankruptcy proceeding as a vehicle to shield themselves from liability, and from accountability, and ultimately, that would be wrong for the more than 400,000 families across this country who have lost someone to this deadly epidemic. 


MADDOW:  Go ahead.

HEALEY:  Well, I just think as background here, I want to be really clear.  I mean, we were the first state to file a lawsuit naming the Sacklers because the Sacklers directly controlled and operated Purdue for many, many years.  In the course of those years sucked billions and billions of dollars from Purdue. 

Now, what`s happened now is there have been hundreds of lawsuits filed now against Purdue and the Sackler family and, of course, Purdue has now filed for bankruptcy.  Again, the Sacklers are trying to use that as a vehicle to shut down litigation against them.  And we say, no. 

I also want to be clear with the American public about what this bankruptcy deal is about and what it isn`t.  This deal wouldn`t require the Sacklers to pay back a dime from the profits they made.  All of it would be funded from future sales of OxyContin which is so offensive to me. 

MADDOW:  Wow.  Yes. 

HEALEY:  That settlement would be funded by the sale of the very deadly and addictive drug that has ravaged communities across this country.  And, you know, the Sacklers have done a good job over the years of hiding the truth from the American public.  And this settlement would allow for that story, that truth to stay hidden forever. 

And so, I think those are fundamentally some of the injustices here and why the deal just isn`t right. 

MADDOW:  If the deal isn`t right and if you and your fellow attorneys general who are saying no to this carry the day, and they go through with this bankruptcy proceeding as they are trying to do, what`s the other alternative?  Is this a high risk move?  Is there a possibility that communities and states and families around the country that are victims here won`t get anything if they don`t get this? 

HEALEY:  You know, Rachel, I am so sympathetic to the needs of our states and our cities to get relief, to get money, to help with the damage created and caused in so many ways by Purdue and the Sackler family. 

But I`ll tell you what.  Fundamentally, the question here is who`s going to pay for this?  Is it going to be the Sacklers or is payment going to come from future and continued sales of Oxy? 

And to me, the answer is clear.  It should come from the Sacklers.  It shouldn`t come from the continued sales of a drug known to cause such damage. 

We`re going to continue to fight this and will be in bankruptcy court opposing the proposed settlement and deal and will continue in our own state court.  In fact, today, Rachel, my office won a big case, won a big decision from a judge here where Purdue tried to dismiss our case and the judge said, no.  Go ahead. 

So, we`re prepared to fight.  We`re prepared to see this through.  Bankruptcy isn`t for billionaires and hopefully the courts will see through to allowing us to proceed against the Sacklers. 

And, ultimately, we`ve got to do everything we can so the story is told and so that justice is obtained.  And that`s really my job as a state attorney general to make sure we follow the facts, make sure we follow the law, and make sure we seek justice on behalf -- especially on behalf of the so many families in this country who have been so devastated by what is in our time the nation`s largest public health crisis. 

MADDOW:  Maura Healey, attorney general for the great state of Massachusetts, thank you so much for your time tonight.  I really appreciate you being here.

HEALEY:  Great to be with you.

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


MADDOW:  This has been a wild night for breaking news. 

We were first to report right at the top of the show that the president`s nominee for director of FEMA has withdrawn his nomination.  They are telling us tonight that he did so last week but, OK.  It`s breaking news as of tonight. 

Then, came news on this mysterious whistleblower case we`ve been following.  "The Washington Post" saying tonight that an intelligence community whistleblower was so disturbed by something President Trump said to a foreign leader on the phone, the whistleblower was so disturbed by some sort of promise in that interaction, that the whistleblower filed a formal complaint. 

This is something we`ve been trying to follow, trying to suss out over the last few days.  Intelligence Chairman Adam Schiff announcing today that the acting inspector general, excuse me, the acting director of national intelligence will testify in open session on this matter next week. 

But even sooner tomorrow morning, they`re going to have the inspector general for the intelligence community behind closed doors talking to the committee about this.  I don`t know what kind of read out to expect we`ll get from that testimony tomorrow but wow.  We are trying to get Chairman Schiff on the show tomorrow night to tell us what he can.  What a wild night for news. 

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


Good evening, Lawrence.

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