Giuliani ran for President TRANSCRIPT: 2/18/20, The Rachel Maddow Show:

Guests: Michael Rothfeld, Bob Bauer

JOY REID, MSNBC HOST:  Not now. I`m sorry, I`m out of time.

SEN. BRIAN SCHATZ (D-HI):  They gave up their authority.

REID:  They did.

Senator Brian Schatz, thank you so much for your time.

That is it for me this evening.

"THE RACHEL MADDOW SHOW" starts right now.

Good evening, Rachel.

RACHEL MADDOW, MSNBC HOST:  Good evening, Joy. Thank you, my friend. Much appreciated.

REID:  Thank you.

MADDOW:  Thanks to you at home for joining us this hour. Happy to have you with us. I want to say right off the bat, that tomorrow night, I will not be here at my usual time, not because I`m taking the day off. You know me better than that.

Tomorrow night, I will be here an hour earlier than usual because tomorrow night at this time, we will all be watching the Democratic presidential candidates` debate. The debate kicks off at 9:00 p.m. Eastern Time tomorrow night. You can watch it right here.

I am not one of the moderators in that debate. All the moderators are the people you see on the screen now. I will be watching the debate alongside all of you.

And in the hour leading up to the debate, from 8:00 p.m. to 9:00 p.m. Eastern Time tomorrow night on MSNBC, I will be hosting the hour that leads up to the debate.

So right off the bat, instead of being on my usual 9:00 slot tomorrow, that`s when the debate starts. I will be on at 8:00 Eastern instead.

And, you know, tomorrow`s debate is shaping up to be interesting on a whole lot of different levels. I mean, number one, as you have probably heard by now, this is going to be the first debate that includes the sort of black box unanswered question candidate of the Democratic primary field, former New York City Mayor Michael Bloomberg, who is pursuing a very unorthodox approach to trying to win the nomination.

Tomorrow`s debate is in Nevada. Michael Bloomberg isn`t going to be on the ballot in the Nevada caucuses this weekend. He also didn`t compete in Iowa or in New Hampshire and he`s not going to compete in South Carolina. He just decided to forego all of the early states and instead start competing with the other candidates on Super Tuesday, all the dozen-plus states that vote on March 3rd. That`s a strange approach.

The only other sort of big name candidate who tried to do something like that in recent years was the terrible 2008 presidential campaign of a man named Rudy Giuliani, a man who had also been mayor of New York City. That 2008 campaign where he tried to start in Florida, it was just an absolute debacle for Mayor Giuliani, a complete bonfire of cash and reputation and utter political humiliation.

So recent experience, it`s kind of the only recent experience we`ve got with this tactic. It would suggest that`s not a very effective way to run for president, even if you are a former New York City mayor. I mean, that said, Rudy Giuliani and Mike Bloomberg are two different people. And, of course, the other thing that Mayor Bloomberg is doing to run for president that nobody has ever done before, is that he has spent over $400 million already marketing himself to the nation as a presidential candidate, through more TV and digital ads than anybody could have ever imagined.

I mean, if I put my head toward imagining the entire global English language inventory of TV and digital ads, what I could imagine in my own head is smaller than the number of TV and digital ads that Bloomberg has already run. So that makes him a black box candidate. That makes him an open question. The way he`s running for president is a very unusual approach. We don`t have anything from history that helps us predict how that kind of an approach might work.

That said, he is popping in the polls in fairly significant ways. The NPR, PBS, Marist poll that came out at dawn today had Michael Bloomberg second place nationwide behind Bernie Sanders. The NBC/"Wall Street Journal" poll that came out tonight also has Sanders in first, but it had Bloomberg in third, just one point behind Joe Biden and tied with Elizabeth Warren.

Joe Biden in that debate is well behind Bernie Sanders, but, look, there`s Bloomberg and Warren and Biden all bunched together with Buttigieg as well. And Bloomberg hasn`t even competed in the first two states and he`s not competing this weekend in Nevada. With Bernie Sanders tying Buttigieg effectively in Iowa and winning narrowly in New Hampshire, and doing great in the national polls and doing great in Nevada polls, with a history of doing great in Nevada, Senator Bernie Sanders is the clear and overwhelming favorite heading into the Saturday Nevada caucuses.

But heading into tomorrow`s Nevada debate, all eyes are going to be on the new guy, on Bloomberg, because it will be the first time-out side his gazillion ads that we the country will actually have a chance to assess him live and in the flesh as a candidate running against the other Democratic candidates to try to get this nomination. So, tomorrow night as a debate should be fascinating. We`re going to have more coming up this hour on that as well as some news about one of the candidates who is still in the race who it looks like is not going to be on the debate stage tomorrow, but there is something you should know about that candidate heading into the caucuses this weekend as well.

Democratic primary is entering into a fascinating phase. If you haven`t been paying close attention to the Democratic race yet or you haven`t yet been trying to make up your own mind about who you might vote for when the primaries or the caucuses in your state roll around, this would be a good time to start tuning in. It is getting super interesting, super unpredictable. Honestly, you don`t want to wait until after Super Tuesday to start paying attention and thinking about your own equities in this race. A lot of these candidates are going to have their goose cooked by then. This is the time to watch.

And simultaneously the stage that all these Democratic candidates are trying to earn their way onto for the general election is also something that appears to be spinning and changing pretty rapidly. Democratic voters tell pollsters in state after state after state the thing they`re most looking for from a Democratic candidate is somebody who can beat the incumbent candidate, somebody who can turn Donald Trump into one term president.

But our understanding what it takes to run against Trump is evolving at the same time that this Democratic primary is getting so interesting. Because, I mean, ask yourself. At this point, at this point in the Trump presidency, at this point in the news, what do you really think the odds are that President Trump and Attorney General William Barr won`t open up some kind of federal criminal investigation into whichever Democrat Trump ends up running against in the general election?

What do you think the odds are they won`t do that? Or if they can`t wait that long, if they`re too impatient, what do you think the odds are that the president and the attorney general will do something in the primary, open up some kind of federal criminal investigation or find someone with a way to use federal law enforcement apparatus against whichever Democrat Trump least wants to run against in the general? So, they`ll figure out a way to use the Justice Department to disadvantage a particular Democratic candidate in the primary. Or maybe to disadvantage a few of the Democratic candidates in the primary so that the president can have more of his favorite choice as to who he wants to run against in the general.

I mean, I realize that scenario is crazy in the sort of long-time arc of American history, and certainly since we supposedly learned our lesson in Watergate, right, the president using American law enforcement and the Justice Department with the help of his attorney general to target his political opponents, to choose his opponent for the general election, to undermine his opponent in that election. I mean, that is dystopian, over the top, road to tyranny stuff. I know. But it kind of feels like that`s pretty much what it`s come to, just in terms of what we`ve learned and how they have behaved just since the end of the president`s impeachment trial, right? Roughly since Iowa what we`ve learned.

And I mean, I`m aware that there are rules that are supposed to prevent this sort of thing. For a long time now, the Justice Department every four years, whoever the attorney general is, circulates rules reminding Justice Department officials that politically sensitive investigations and other law enforcement actions shouldn`t happen too close to an election or they need to reach a really high -- they need to cross a really high threshold to be able to happen close to an election time. And it feels a little bit weird in principle for prosecutors to overtly be taking the political calendar in effect in terms of law enforcement decision.

But it is appropriate, right? I mean, it`s been the practice of Democratic and Republican-led administrations going back years, and the basic principle is sound, right? The basic idea is that law enforcement should take care that it is not perceived to be taking any actions that are designed to influence elections.

And so, by long-standing policy and principle within the Justice Department in the modern era, there is overt advice that some things that could have a big political impact should be delayed until after an election season. So nobody in the public is tempted to see the Justice Department as working for one candidate or another, and no candidate is ever tempted to try to use the law enforcement apparatus of the U.S. as a tool to effect political outcomes.

So, the principle is sound. And we don`t always live up to that principle. There was a little problem, you might remember with that, when it came to the 2016 election and Democratic presidential candidate Hillary Clinton. And the repeated statements by the FBI during the political campaign about that hair-brained, ultimately fruitless, totally overblown Hillary Clinton email investigation that took up residency on the front page of "The New York Times" which, nevertheless, ultimately came to nothing.

And despite that fact, the FBI kept making public statements about it all through the campaign, even though it was an election year. And by policy, they weren`t supposed to do that, even though they apparently didn`t feel compelled to make the same kind of public statements about their contemporaneous open investigations into Hillary Clinton`s general election opponent, Donald Trump, who they were, in fact, investigating at the same time, but they were keeping quiet about the investigations into him. Oh, and by the way, did I mention that all the Hillary Clinton email junk turned out to be nothing, no matter how many times they re-investigated it? Aha.

So, yes, we had a little problem with that general principle during the 2016 election. Arguably that was a significant factor and what brought us the presidency of Donald J. Trump.

But this year in 2020, this year, the Justice Department wants you to know that they have learned from those mistakes of the past presidential election year. This year, they have written a brand-new iteration of those every four years rules that we`re used to seeing from attorneys general, warning Justice Department officials of -- warning them off of law enforcement actions that might be seen as influencing an election. This time in 2020, unlike the rules that have been previously circulated by other attorneys general, this year, by orders from Attorney General William Barr, this year investigations that might potentially impact the presidential campaign -- this time, there is a new rule for those in this election year. This time, explicitly, any such investigation has to be personally approved in writing by attorney general William Barr.

He and he alone will make the decision as to whether or not the Justice Department will engage in investigations that could impact presidential campaigns and candidates in this reelection year for President Trump. So, oh, good. I mean, there`s been general rules about these things in the past, but any investigation affecting the presidential campaign has to be cleared through Bill Barr personally. That`s new for this year. That`s the way we`re all supposed to be assured that all of these things will be handled fairly and squarely and not at all in a way designed to serve President Trump`s personal political interests.

Since Attorney General William Barr changed that guidance to the Justice Department about election year investigations, that was the first week in February where he made that announcement. Just since then, we`re only in mid-February now, we`ve learned a whole lot about how he`s been conducting himself at the helm of the Justice Department and how much we should trust him to make sure Justice Department decisions are handled in a way that`s independent of the president`s personal interests.

I mean, just in the past couple of weeks, we have learned that Attorney General William Barr personally intervened in the criminal case involving this man after he was convicted by a jury on seven felony counts. Before Attorney Barr intervened personally to wipe out the sentencing recommendation for Roger Stone, we`ve never before known of any attorney general personally getting involved at the sentencing phase for a convicted felon to try to get the person off. But even before we never heard he did it for roger stone, we would soon thereafter learn heed done it before the Roger Stone case, too.

We have since learned that Attorney General Barr has also apparently intervened to reverse the sentencing recommendation that had been filed by federal prosecutors in the Michael Flynn case several weeks earlier. We then learned that Barr not only intervened to override the prosecutors and ask for a lenient sentence for Flynn, he also brought in a whole set of lawyers chosen by him personally to review the whole Flynn case and apparently sort of hijack it from the prosecutors who had been handling it from the get-go who had already secured Flynn`s guilty plea.

At the same time, we learned that that same team of people that Barr had put in place to hijack the Flynn prosecution, they`ve also been assigned by William Barr to work on a number of other cases at that same U.S. attorney`s office in D.C. They came in from outside at the direction of Attorney General William Barr specifically to take over politically sensitive cases of interest to the president, including some that of not yet been made public.

At that U.S. attorney`s office, the U.S. attorney there has been ousted. She`s been replaced with one of Attorney General William Barr`s closest aides. Four prosecutors have resigned from the Stone case. One prosecutor has resigned from the Department of Justice altogether.

The revelations have caused more than 2,000 justice officials to call for the resignation of William Barr. Donald Ayer, who served as a deputy attorney general in the George H.W. Bush administration, alongside William Barr, he`s known William Barr for 40 years. He`s gone so far as to urge a, quote, public uprising to insist that Attorney General Barr should be removed from the Justice Department.

But this uproar, this ongoing uproar is not apparently making things any better when it comes to the issue about which there is the uproar, about the use of the criminal justice system to do favors for the president, to go after the president`s enemies, to protect and reward his loyalists. I mean, each passing day since this scandal has broken open, the crisis has seemed to get a little worse, not better. We`ll be talking a little later on this hour about today`s raft of pardons and commutations, mostly for public corruption offenses.

These pardons and commutations the president doled out today with glee as a sort of rub your face in it demonstration, that even the most vile famous, uncontested, fully litigated, proven beyond a reasonable doubt, black and white cases of public corruption, they`re OK now, if President Trump says they`re OK, and the courts are powerless to enforce the law against even the worst offenders. We`ll talk about that a little bit later with somebody who knows that system very well and knows what went wrong with it today.

There`s another piece of this which I`m sort of agog, and then I think could bear some sustained attention even with everything else that`s going on. Because this real catastrophe for the rule of law that we have seen in the U.S. attorney`s office in Washington, D.C., where the functions of that office, including in cases where there`s already been, you know, multiple unanimous jury verdicts on multiple felonies, the functions of that prosecutor`s office have been taken over to instead serve the president.

So, we`re witnessing this catastrophe at the U.S. attorney`s office in D.C., but we are also learning that that`s not the only pressure point that President Trump and Attorney General William Barr have chosen for this operation. I mean, in theory, any federal prosecutor`s office could end up with a case or cases that directly impinged on the president`s interests. But outside of the U.S. attorney`s office in D.C., which of course is the seat of our federal government, the one federal U.S. attorney`s office, the one federal prosecutor`s office where cases that affect the president or the cases that have real national importance tend to end up is in New York City in the southern district of New York, largest U.S. attorney`s office in the country outside of Washington, D.C.

It`s the office that handles lots of matters of national security, any crimes having to do with anything financial since New York is the financial capital of the country. In the case of this president, SDNY is also where anything will end up that has to do with his personal home base as a lifelong New Yorker who ran his fraudulent charity and his family business here.

The Southern District of New York has long had a reputation for fierce independence, even ornery levels of independence, and unwillingness to subject themselves to direction or influence from Main Justice in Washington. They`re the sovereign district and they do whatever they want.

But under this administration, the pressure even on SDNY has been reportedly pretty intense. Erica Orden and Kara Scannell had -- at CNN had been reporting this weekend on Attorney General William Barr attempting to, quote, micro-manage numerous cases at SDNY since he`s been attorney general. And reporting on this subject has been coming in from multiple sources, coming in dribs and drabs, but it`s very worrying thing to learn about, even in small bits given the list of cases that SDNY is reportedly handling that are of concern to the president.

I mean, the attorney general trying to micro-manage cases at SDNY in particular is potentially a very big deal. I mean, there`s been solid public reporting from multiple sources on Barr personally intervening to try to stop the prosecution of a Turkish bank. SDNY was going to bring criminal charges against a Turkish bank. But Barr reportedly personally intervened to try to stop those charges from being brought after President Trump told the Turkish president that heed have bill Barr fix he`d have bill Barr fix that case for him.

SDNY is also reportedly investigating potential criminal activity related to the Trump inaugural committee. SDNY is reportedly investigating potential criminal activity by the Trump Organization, the president`s family business. SDNY is reportedly investigating potential criminal behavior by the president`s personal lawyer, Rudy Giuliani. We`ll have more on that in a moment.

SDNY put the president`s other personal attorney, Michael Cohen, in prison for hush money case including payments made to benefit the president`s campaign just before the 2016 election. "The New York Times" has reported in the last few days among the SDNY cases where William Barr has personally inserted himself is that hush money case, the Michael Cohen case, the one that resulted in charges against no one else.

Quote, while Mr. Trump`s long-time fixer Michael Cohen had already pled guilty to campaign finance violations for his role in those payments, prosecutors were still investigating whether the role of Trump`s family business had obstructed the -- whether the role of executives at the Trump family business had obstructed the investigation.

Quote, at one point during discussions about the scope of campaign finance laws, Attorney General William Barr questioned the legal theory behind Cohen`s case. He also questioned whether such cases could be prosecuted civilly rather than criminally.

According to "The New York Times," this intervention by Barr in the hush money case took place shortly after he was sworn in as attorney general last February. Well, honestly, that matches up in the time line with how the hush money case fell apart and why it is that Michael Cohen ended up being the only person who got in trouble for that, even though he clearly wasn`t the one who dreamed it up, and he wasn`t even the one who benefited from the scheme. I mean, with the benefit of this new reporting about what William Barr has been doing in the Justice Department to influence cases that relate to the president, with the benefit of this new reporting that Barr got sworn in as the new attorney general and then immediately went down to SDNY to see what he could do about the Michael Cohen hush money case and whether or not it was also going to result in charges against the president`s business.

I mean, look back now at the initial reporting about how that case got dropped. It was CNN who was first to report this summer in July, same reporters who are reporting on it now, Erica Orden and Kara Scannell, they were first to report last July that despite the fact that prosecutors had indicated more charges might be coming in that case, despite the fact prosecutors had said this was an ongoing law enforcement matter and an ongoing investigation in July. Prosecutors told the judge quietly in that case that there would be no more charges, the whole thing was over, case closed.

What CNN reported at that time when they were first to break that story is that the case had appeared to drop off a cliff several months earlier. CNN reported that at the beginning of last year, beginning of 2019, prosecutors had requested interviews with executives at the Trump Organization. But despite the fact that they had asked for those interviews, they, quote, never followed up on their initial request and the interviews never took place. Why would prosecutors ask Trump Organization executives for interviews and then never bother to follow-up even when they didn`t get an answer?

Officials at the Trump organization also told CNN that although prosecutors had been in contact with them about that case at its outset, their contact with those prosecutors suddenly ended with no explanation at the time as to why. This was July reporting from CNN. CNN said, quote, there has been no contact between that Manhattan U.S. attorney`s office and officials at the Trump Organization in more than five months.

Well, so, it kind of seems like, and five months before this reporting in July is when that case potentially involving the president`s business, that`s when it fell off a cliff. Well, five months before that article is when William Barr was sworn in as attorney general of the United States. And we now know from new reporting that as soon as he was sworn in as attorney general of the United States, he immediately set off to go to SDNY to go meet with prosecutors in that office to tell them the whole hush money case was based on a flawed legal premise and it may be shouldn`t have been brought as a criminal case at all.

And, yes, all indications are that the Trump family business was in the crosshairs of that criminal investigation until that point. But then, suddenly, the case went off a cliff. Suddenly the outstanding requests for Trump Organization executives to do interviews with prosecutors, they just -- they let them go. The ongoing communication between prosecutors and the president`s business, it just ended with no explanation.

Around the time that William Barr went to SDNY and told them what he thought about the case and quietly the case got closed. And when that case got closed, that prompted me at the time -- I remember, a bunch of other people -- to ask publicly in that moment, hey, SDNY, are you OK? Hey, famously independent, unpush-aroundable, un-influenceable, sovereign district of New York, hey, SDNY, are you OK? Could you let us know if you`re not? Could you let us know if you`re being improperly pressured by the attorney general to make law enforcement decisions in a way that benefits the president? Could you let us know?

Now, today, a new revelation, a new admission from the Justice Department shows us exactly what`s been going on there, and it is a doozy and that`s next.

(COMMERCIAL BREAK)

MADDOW:  In the southern district of New York in October, these two men who were close associates of Rudy Giuliani, working with him on his campaign to try to dirty up Joe Biden in time for the 2020 presidential campaign, they were indicted at SDNY.

Starting the day after their indictment, "The New York Times" was first to report that Rudy Giuliani was also under federal criminal investigation for his involvement into what those guys -- in what those guys had been doing in Ukraine. "The New York Times" headline on October 11th, the day after the Lev and Igor indictment was this, Giuliani is said to be under investigation for Ukraine work.

Then three days later, "Wall Street Journal," October 14th, federal prosecutors scrutinized Giuliani`s Ukraine business dealings and financing. Bloomberg News November 14th. Giuliani faces campaign probe on lobbying and finance breaches. "Wall Street Journal", November 25th, federal subpoenas seek information on Giuliani`s consulting business. "Reuters", same day, November 25, U.S. prosecutors seek information on payments to Trump lawyer Giuliani.

The president`s personal lawyer who has been running this scheme in Ukraine on behalf of the president is under federal criminal investigation. We thought.

All that news broke in October and November. We hadn`t heard much about it since November as the president`s impeachment over the Ukraine scandal took hold. What happened to that potential criminal prosecution?

Now, we may know because today the justice department released this memo. It is dated a month ago. It`s dated January 17th. Today is, nevertheless, the first we are learning of it.

But what this memo spells out is that, apparently a month ago, the Justice Department established a whole new chain of command for all federal prosecutors anywhere in the country who might be thinking about bringing any criminal charges or doing any federal criminal investigations on anything that touched on the issue of Ukraine whatsoever.

This directive was sent out nationwide from main justice to all U.S. attorneys on January 17th. Quote: There are currently several distinct investigations being handled by different U.S. attorneys office and/or department components that in some way potentially relate to Ukraine. But if you are a U.S. attorney who has such an investigation, congratulations, you will no longer have control over that from here on out. We`ll take it from here.

The memo says, quote: The department has assigned Richard Donohue, the U.S. attorney in the Eastern District of New York, which is Brooklyn, to coordinate existing matters and to investigate and address any other matters relating to Ukraine, including the opening of any new investigations or the expansion of existing ones. Quote, any and all new matters relating to Ukraine should be directed exclusively to Richard Donohue`s office for investigation and appropriate handling. Any widening or expansion of existing matters should require prior consultation -- prior consultation with and approval by my office, the deputy attorney general`s office, and Richard Donohue`s office in Brooklyn.

So, in other words, hello, SDNY hello Manhattan federal prosecutors office, which has been actively pursuing a very well-reported federal criminal investigation of the president`s personal lawyer Rudy Giuliani related to his work in Ukraine. Hello, SDNY prosecutors who have been working on that. You are no longer allowed to make any decisions related to that case. You are no longer allowed to make a decision to say, bring charges against Mr. Giuliani if that is what you had been planning to do.

Instead, for everything related to that case, you now have to run that all through us. You have to run it through main justice. You also have to run it through your rival U.S. attorney`s office in Brooklyn because that different prosecutor will now get to decide what work you are allowed to do on your own cases and whether or not you`re allowed to charge Rudy.

Whew. New policy. Think that will be enough to protect Mr. Giuliani? Would you like to get him some suspenders to go with that belt?

Over the weekend, "The Washington Post" and CNN both have this interesting, anonymously sourced stories about the fact that the criminal investigation into Rudy Giuliani is real, it`s active, there are subpoenas and witness interviews and stuff still going on. Those reports in the post and CNN kind of felt like a flare to the rest of us. Somebody throwing down bread crumbs, right? We`d have something in the public record that indicated that this Giuliani criminal exists and it`s real and there is something to it just in case anything ever happened to it or it disappeared.

Well, now today, Tuesday, we found out apparently what has happened to it. After the 2016 election, during the presidential transition, I spoke with a number of outgoing Obama administration officials about their surprise at the result of the 2016 election and about the worst case scenario that the country should prepare for. The worst thing that they could imagine having been in government, that the incoming president could do, particularly given the kind of things he had promised and threatened to do while he was running as a candidate in 2016.

I don`t know what I expected to hear in terms of the sort of doomsday scenario for what a president could do if he had the worst possible intent and a maximalist impression of presidential power. I don`t know what I expected to hear from outgoing Obama administration officials, but the answer that I got surprised me. The answer that I got was that the worst case scenario they could imagine was that the president, the incoming president, Donald Trump, would use the Justice Department as a weapon, that that is the single-most dangerous thing that a president could do to the country on his own say-so.

If he could figure out a way to tame the U.S. Justice Department and turn it into an instrument to help himself, turn it into something that helps his allies and hurts his opponents, the awesome power of federal criminal prosecution and federal criminal investigation should be seen as essentially a domestic nuclear bomb from an ill-intentioned president. That was the warning that I got from Obama administration officials when they were on their way out the door. And that`s apparently what we`ve got. And it appears to be wholesale and not even under cover when it comes to the incredibly important prosecutor`s office in D.C.

But if it`s New York, too, if it`s SDNY, too, then I don`t know where else we`re supposed to look for an entity that can stop this, that has the strength to stay independent. That can and will stand up and stop what`s happening from happening. I mean, there`s a reason this is being called a rule of law emergency. This is exactly that.

(COMMERCIAL BREAK)

MADDOW:  Joining us now is Michael Rothfeld. He`s an investigative reporter for "The New York Times."

Before joining "The Times", he worked as an investigative reporter at the "Wall Street Journal" where he and his colleagues were the ones who broke the story about the president`s hush money payments to Stormy Daniels. That story ended up putting the president`s personal lawyer Michael Cohen in prison and opened up what appeared to be a large federal criminal investigation that quietly closed under mysterious circumstances this past summer.

Mr. Rothfeld is also the co-author of a new book called "The Fixers: The Bottom Feeders, Crooked Lawyers, Gossip Mongers and Porn Stars who Created the 45th President".

Mr. Rothfeld, it`s really nice to see you. Thanks for being here.

MICHAEL ROTHFELD, INVESTIGATIVE REPORTER, "THE NEW YORK TIMES":  Nice to see you, Rachel.

MADDOW:  I want to talk to you about what`s going on in terms of the Justice Department and the president`s interests. I feel like you have seen close up in the Cohen case, in a number of these other criminal matters that have touched on the president`s interests, how these things really work in practice.

Is there -- do you see resonance with this national reporting about the way William Barr is inserting himself into these cases with how they`ve actually played out in the courtroom and in these prosecutors` offices?

ROTHFELD:  Well, I think a lot of it is behind the scenes. I mean, we have seen Barr starting with the Mueller report coming out and acting differently in terms of being more willing to protect Trump`s interests. But in terms of actual cases, it`s more situation of what doesn`t happen, you know, when Barr is watching and you know he`s weighing in. He`s going to be more scrutinizing what you`re doing.

You`re going to be more careful about what you do, and kind of have a higher standard for what you do. So there are probably a lot of things that may have happened differently if he were not there in terms of actual -- I mean cases, obviously, we saw Roger Stone`s sentencing, that was a tangible impact.

BURNETT:  The Flynn sentencing as well.

ROTHFELD:  Yes, exactly.

BURNETT:  Well, on the hush money case, which is not a D.C. U.S. attorney`s office like Flynn and Stone, it`s SDNY, which is famously independent. You can`t pressure them to do anything they don`t want to do.

ROTHFELD:  Right.

BURNETT:  You know the Cohen case very well. When prosecutors decided to close that case without bringing charges against anybody except Michael Cohen, I just as an observer of that case was surprised. I feel like now that we`ve got this new reporting about the way that Barr was pressuring the office on that case, it feels suspicious and worrying to me that they closed the case without charging anybody other than Michael Cohen.

How did you see that at the time and do you see it any differently now?

ROTHFELD:  Well, I mean, I think at the time we thought that that obstruction case would have been probably a difficult case to bring because in one respect you had Michael Cohen who was talking about others, the CFO at the Trump Organization who he said was involved with the Stormy Daniels deal, although it was his word and Cohen`s credibility, it was very poor because he had lied about a number of things. So it could have been a he said, she said, a tough prosecution.

Now in hindsight, so we have another layer, we have Barr coming in and questioning the legal theory that the Justice Department had signed off on when they charged Michael Cohen in the first place saying maybe this should have been a civil case instead of a criminal case.

So, you know, that`s undermining of the case that was brought.

MADDOW:  Yes.

ROTHFELD:  We don`t have any knowledge that he or anyone else at main justice said "close the case", but it certainly sends a message when your boss says, huh, maybe you should have done something this way, it sends a message, it`s a more subtle way of handling something.

Is that why they closed the case? I mean, like I said, I think that probably would have been a tough case to bring.

MADDOW:  Right. To me, it`s worrying to see the investigative tactics that they were using drop off without explanation at the time he was making those intervention.

ROTHFELD:  Yes, that`s a reasonable question, and I don`t know why they stopped investigating it.

MADDOW:  One last quick question for you on this. Because of the reputation of SDNY, because it is hard fought that they are independent and can`t be pushed around, do you think they are being improperly politically pressured to do things to help the president? Do you think they`d squawk? Do you think they would be some sort of public indication? Do you think it would be a quiet thing that they`d try to resist? Or would they -- would they let us know in some way?

ROTHFELD:  I think that if that happened, and it was overt and black and white, you would see people leaving because they take great pride over there in being independent and being one of the strongest prosecutors offices in the country. But, you know, in terms of like how you manage your boss, like if this were a regular job situation, you know, when somebody sends you coded messages or you know they`re watching or they`re asking for more briefings than they normally would, you`d try to handle that internally and get to your end goals that you would normally get. So I would think that that`s how they would do it.

MADDOW:  And thus hangs the fate of the republic. It`s dramatic stuff. Michael Rothfeld, investigative reporter now at the "The New York Times" -- good to see you.

ROTHFELD:  Thank you, Rachel.

MADDOW:  Thank you for being here.

All right. Lots more to come. Stay with us.

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MADDOW:  There`s public corruption and then there`s public corruption involving cheap travel storm money belts being used to carry hundreds of thousands of dollars in cash across state lines.

(BEGIN VIDEO CLIP)

REPORTER:  The past owner of the San Francisco 49ers says he met with former Governor Edwin Edwards in this diner and gave him a $400,000 payoff in cash to help get a gambling permit in Louisiana. Federal prosecutors accuse Edwards, two former aides and three others including Edwards` own son Steven, of shaking down companies that wanted to run river boat casinos, demanding more than $2.5 million to help them get state licenses.

The former football team owner Eddie DeBartolo says the former governor demanded the $400,000 saying without it, quote, there is going to be a serious problem with your license. DeBartolo says when he handed over the money three years ago at this diner in suburban San Francisco, he asked how Edwards would get it on the plane. He says Edwards pulled up his shirt and said, quote, that`s not going to be a problem, showing a money belt like these that could carry the ten pounds of cash.

Next morning, he says Edwards called to say, you got the license.

(END VIDEO CLIP)

MADDOW:  That`s not going to be a problem. I`ve stacked up money belts chest high to take the $400,000 in cash you`re going to give me and squeeze it into my airplane seat. Louisiana Governor Edwin Edwards ended up serving years in prison on charges related to that extortion scheme. Eddie DeBartolo, the guy who paid him the bribe also ended up pleading guilty in that case. He only avoided prison himself by agreeing to testify against Governor Edwards, Mr. Money Belt.

As of today, though, Eddie DeBartolo has a clean slate because he was one of 11 people granted clemency by President Trump. And to be honest, Eddie DeBartolo comes off looking like kind of the altar boy of the group compared to the others who were pardoned and had their sentences commuted by the president today, including former Illinois Governor Rod Blagojevich who was on the middle of serving up a 14-year prison sentence for essentially trying to sell President Barack Obama`s old Senate seat.

President Trump today also commuted the sentence of a woman who is serving a 35-year prison sentence for orchestrating a $105 million fraud. Then there`s the construction company owner who was convicted of underpaying his taxes by hundreds of thousands of dollars. "The Daily Beast" reports tonight that based on FEC filings, that man`s family has donated hundreds of thousands of dollars in direct contributions and in-kind air travel to the Trump victory committee. They have also made large donations to the RNC and to Donald Trump for president.

Quote: Prior to the family`s sudden significant donating spree to Trump and the Republicans, they were not seen as big campaign spenders. But they became big campaign spenders and so now they`ve got their big fat pardon. It`s weird, right?

In case after case with all these commutations and pardons today, the through line is corruption. It`s almost like the president is making a, you know, rub your face in it point that as long as he`s in charge, corruption`s fine and there`s nothing anybody can do about it, not even the courts.

But there are people who understand how these things are supposed to work and they have something to say about that. That`s next. Stay with us.

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MADDOW:  President Trump today granted pardons to seven people, commuted the sentences of four others. Lots of them like former Illinois Governor Rod Blagojevich were public figures convicted of charges like fraud and corruption. The president has the right to pardon people. It`s within his right explicitly laid out in the Constitution. But given what else is going on in the administration and the message of these pardons as a group, I thought it might be worth it to check in with Bob Bauer, former White House counsel under President Obama, president under whom pardons and commutations were handled very differently.

Mr. Bauer, thank you for being here.

BOB BAUER, FORMER WHITE HOUSE COUNSEL IN OBAMA ADMINISTRATION:  It`s a pleasure. Thank you.

MADDOW:  Let me ask your reaction about the decisions by the president today.

BAUER:  It, I think, is a norm-destroying series of decisions he made. It hooks up to what he said at the very beginning of the administration. That is to say he has absolute pardon power, he could pardon himself he once said if he wanted to. And now I think freed from some of the anxieties, no doubt he experienced during impeachment, I think the outcome -- he`s pushing forward and making really a fundamental change without accountability to the Congress, without accountability to the public in the way presidents operate.

MADDOW:  I was struck by the pardons and commutations that were corruption cases, that were really about the government being defrauded or people who were public officials taking bribes, that sort of thing. I -- what sort of damage is done to anti-public corruption efforts, to have people who have been dutifully convicted of serious corruption crimes all let off, all in a group in kind of the way the president`s done it?

BAUER:  In the way he`s done it I think is the critical point. There is a process.

Now, not all presidents all the times have followed it. There have been instances, for example, Ford`s pardon of Nixon when he didn`t go through the pardon office in the Department of Justice, but by and large presidents have respected a process located in the Department of Justice that allows for filtering out the cases that are improperly considered and recommending to the president the ones that are properly considered.

Trump is crashing that process. It`s become increasingly clear what he sees on television, what he hears from people, what his instincts tells him he should do, what the best politics for him is. That is how he is going to be thinking about the pardons that he grants. He`s really quite open about it.

So, I think in this sense it`s really quite extraordinary. And as you point out, he`s building a certain theme here, public corruption theme you mentioned. One has to think he`s laying the foundation for some other pardons that will come in the future that people have long wondered whether he would grant.

For example, Roger Stone eventually. Paul Manafort eventually. Who knows who else eventually?

Might be too angry at Michael Cohen to pardon him. Who knows? Maybe he`ll commute his sentence. Not clear.

But I think that there is a foundation he`s laying for a practice that is not consistent generally with the way presidents have approached the exercise of this constitutional power.

MADDOW:  Is it more concerning to you that he`s taking these actions while we`ve got this other crisis unraveling at the Justice Department, this incredible uproar against what Attorney General Bill Barr has done with the Stone sentencing and other matters?

BAUER:  It is very concerning because it`s a package, if you will. It`s a series of interconnected events coming immediately after the acquittal in the Senate impeachment trial that seems to be Trump saying, OK, now I`m going to return to a vision I once had of the kind of department that I want. Now, whatever Attorney General Barr`s motivation has been taking the actions that he has, he is definitely lent an appearance, a very damaging appearance that he is very attentive to the kind of the vision of the department that the president has.

MADDOW:  Bob Bauer, White House counsel under President Obama, Mr. Bauer, it`s an honor to have you here. Thank you very much.

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

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MADDOW:  Programming note, tomorrow, 9:00 p.m. Eastern, my usual time slot, I will not be here. And instead you will be watching the Democratic presidential debate before the Nevada caucuses. Again, that`s my usual time slot, 9:00 p.m.

But I will be here early a little bit here. Chris Mathews is going to kickoff our debate coverage with HARDBALL, live from Las Vegas at 7:00. I am going to anchor our live special coverage starting at 8:00 as we head into the debate, which again starts at 9:00. And then, Brian Williams and company will be here after the debate to help make sense of all of it.

So, it`s going to be a good big night, at a very exciting time in the Democratic primary. Set your DVRs, get your popcorn. I`ll see you tomorrow at 8:00.

That does it for us tonight. See you again then.

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

Good evening, Lawrence.

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