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Senator Flake joins Roy Moore resistance Transcript 12/5/17 The Last Word with Lawrence O'Donnell

Guests: David Cay Johnston, Ron Klain, David Frum

Show: THE LAST WORD WITH LAWRENCE O`DONNELL Date: December 5, 2017 Guest: David Cay Johnston, Ron Klain, David Frum


And I know you were talking about some of the protests that are going on for the tax legislation, which we have to keep reminding people has not passed, has not become law, even though the Republicans tried to pretend that`s what happened in the Senate.

"The Wall Street Journal" reporting tonight, this will not surprise you at all that, the Republican California delegation of House members are now worried that maybe they can`t vote for a bill that repeals the deductibility of state and local taxes, including income taxes. And both bills, House and Senate, both completely eliminate the deductibility of state income taxes. And now, the House Republicans from California would like to see that restored.

RACHEL MADDOW, MSNBC HOST, TRMS: And, you know, the big group of Darrell Issa`s constituents that were camped out at his office today --


MADDOW: -- made that point to him very loud and clear. Not just because he is a very vulnerable California Republican, but because throughout that state and in a number of other high tax states, these decisions are going to have an immediate very noticeable negative financial effect on all sorts of regular folks who are these members` constituents.

O`DONNELL: And the New York state House Republicans voted against it, who saw it as harmful to their state and harmful to their districts. And Darrell Issa`s district is classic. It is a very significant tax increase in Darrell Issa`s district.

If you can`t fully deduct your property taxes and you can`t fully deduct your state income tax. And Darrell Issa by now has got to know that.

MADDOW: Yes. This isn`t the sort of thing where things will get marginally worse. And you -- if you`re smart about the news, you may be able to tie it back to this one vote. Like this is -- they`re like pushing a button.

Here is money that you have to send to the government that you didn`t used to have to send to the government. And it`s because your congressman did this thing. I mean, it`s going to be a very unsubtle, immediate and significant financial blow to people. And people are going to know exactly why it happened.

And that`s the sort of accountability measure in government that we don`t always get. But when it happens, it`s a real test as to whether or not members are listening to their voters.

O`DONNELL: And the California Republican delegation in the House has enough votes in and of themselves to kill this bill.

MADDOW: Is that true?

O`DONNELL: So, we will see what happens.


O`DONNELL: Oh, yes, they have enough to kill it. We`ll have to keep watching the California delegation.

MADDOW: All right, my dear. Thank you.

O`DONNELL: Thank you, Rachel.

MADDOW: Thanks, Lawrence.

O`DONNELL: Well, tonight, news organizations that closely cover the banking business are reporting special prosecutor Robert Mueller has subpoenaed records from Germany`s largest bank, Deutsche Bank. According to "Bloomberg News", Mueller issued a subpoena to Germany`s largest lender several weeks ago, forcing the bank to submit documents on its relationship with Trump and his family, according to a person briefed on the matter.

According to a report in "Reuters", a U.S. official with Mueller`s probe said one reason for the subpoenas was to find out whether Deutsche Bank may have sold some of Trump`s mortgage or other loans to Russian state development bank, VEB, or other Russian banks that now are under U.S. and European Union sanctions. "The Financial Times" reports that Deutsche Bank has begun sending information about its dealings with Donald Trump to U.S. investigators, following a subpoena by Robert Mueller, a person with direct knowledge of the German bank`s actions told "The Financial Times".

The production of Trump-related documents had begun several weeks ago. And "The Wall Street Journal" is reporting Deutsche Bank received a subpoena earlier in the fall from U.S. special counsel Robert Mueller`s office concerning people or entities affiliated with President Donald Trump according to a person briefed on the matter. The subpoena requested documents and data about accounts and other dealings tied to relationships with Mr. Trump and people close to him, the person said.

The bank has lent more than $300 million to entities affiliated with Mr. Trump, according to public disclosures. Today, a spokesperson for the president`s criminal defense team said: No subpoena has been issued or received. We have confirmed this with the bank and other sources.

The White House press secretary echoed that this afternoon.


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: No subpoena has been issue order received. We`ve confirmed this with the bank and other sources. I think this is another example of the media going too far too fast, and we don`t see it going in that direction.


O`DONNELL: Deutsche Bank refused to confirm or deny the stories, and issued a statement saying that the bank takes its legal obligation seriously and remains committed to cooperating with authorized investigations into this matter.

Deutsche Bank has lent the Trump Organization hundreds of millions of dollars for real estate ventures, and is one of the few major lenders that has given large amounts of credit to Trump in the past decade. Jared Kushner also has financial ties to Deutsche Bank.

"The Washington Post" reported in June one month before Election Day, Jared Kushner`s real estate company finalized a $285 million loan, as part of a refinancing package for its property near times square in Manhattan. The lender was Deutsche Bank.

All of which brings us to the Trump red line. And like most political red lines, this one was created by reporters asking leading questions about red lines.


MICHAEL SCHMIDT, NYT: If Mueller was looking at your finances, your family`s finances unrelated to Russia, is that a red line?

MAGGIE HABERMAN, NYT: Would that be a breach of what his actual charge is?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I would say yes. I would say yes.

SCHMIDT: But if he was outside that lane, would that mean he`d have to go?

TRUMP: No, I think that`s a violation.


O`DONNELL: That was the president`s speaking to "The New York Times" in July. And with today`s reports about a subpoena involving Donald Trump`s banking records and banking records of his family, of course, this happened.


TRUMP: Thank you, everybody. Thank you.

REPORTER: Mr. President, has Mueller crossed a red line with Deutsche Bank? Has --

TRUMP: Thank you very much.

REPORTER: Has Mueller crossed a red line?

TRUMP: Thank you.


O`DONNELL: Joining us now: Jill Wine-Banks, former assistant Watergate special prosecutor and an MSNBC contributor, David Cay Johnston, Pulitzer Prize-winning journalist who founded, and a former chief of staff to Vice Presidents Joe Biden and Al Gore, and senior aide to President Obama, and also a chief counsel to the -- the Senate Judiciary Committee, Ron Klain.

David Cay Johnston, tell us about the Trump relationship to Deutsche Bank.

DAVID CAY JOHNSTON, PULITZER PRIZE-WINNING JOURNALIST: Well, Deutsche Bank is the one bank that will loan Donald without hiding it through other entities. He has been borrowing money from them for a long time. Deutsche Bank has been deeply involved in laundering money for the Russians for a long time. It`s paid in total somewhere north of $22 billion in fines for improper activities.

And I don`t think all the fines have been levied on them yet. And over 600 million of that was just for laundering Russian money in Moscow, in Germany, and in New York City. So, long, very deep ties and they aren`t just limited to Donald. Wilbur Ross was vice-chairman of the bank of Cyprus. The other vice-chairman was a Putin appointee, and who did they hire to run that bank? The disgraced and removed chairman of Deutsche Bank.

O`DONNELL: Jill Wine-Banks, what do you make of these subpoena reports?

JILL WINE-BANKS, FORMER ASSISTANT WATERGATE SPECIAL PROSECUTOR: I think this is the next step in the Mueller investigation. They are following the money. It`s something that I`ve been urging for a long time because I think we are going to see some connections between Russia and the Trump family. It`s not just the president, as you noted.

Jared has almost as large a debt to Deutsche Bank. And I think we can find out a lot about what might be motivating the policies of protecting Russia and praising Putin.

O`DONNELL: And Ron Klain, a lot of talk today about the red line and the possibility of Donald Trump seeing this as a reason to fire special prosecutor Mueller. What would happen if the president attempted to fire the special prosecutor?

RON KLAIN, FORMER CHIEF OF STAFF TO VICE PRESIDENT BIDEN: Well, we`d have a constitutional crisis, like we haven`t seen since the days of Watergate. If he attempted to remove bob Mueller for doing his job, investigating, as Jill suggested, where the money has gone, what the financial incentives for Trump to appease Russia and to collude with Russia might be. If he fires Mueller for doing his job, we`re going to see a conflagration, and I think the start of impeachment proceedings, and maybe even the kind of outrage that even the Republicans in Congress can`t blink at and can`t look away.

O`DONNELL: And, David, I know you`ve done a lot of reporting on Donald Trump`s finances over the years, and talked to him about it and gotten close to it and his casino businesses and all sorts of things. You know how he reacts when people get close and they start studying this.


O`DONNELL: Imagine for us the reaction in Donald Trump`s world today when he discovers the reports about this subpoena.

JOHNSTON: Oh, Donald is absolutely live livid inside about this. You know, remember, Donald creates his own reality. And something is now happening not under his control. He is also going to try to move that red line, because what they`re doing now appears to be directly connected to the Russian influence in his campaign and is not outside the scope by any means of Mueller`s charge here. But Donald`s also a guy who beat four grand jury investigations. So, you know, he is not an amateur at this.

And, by the way, I`m not as sanguine as Ron is about the constitutional crisis. I mean, look how the Republicans have moved now towards Roy Moore to stay in line with Trump. They get a real problem trying to go against Trump because they`ll get primaried the way Jeff Flake was going to be.

O`DONNELL: Jill, imagine, if you will, the president making a move of some kind to fire Robert Mueller. There is a large office in place now of prosecutors, FBI agents who are working under Robert Mueller. Did they all just disappear if the president fires Robert Mueller?

WINE-BANKS: Well, that`s an interesting question. And on the night of the Saturday night massacre, which I of course would like to point out to the president, led to a huge public outcry that caused the President Nixon to reverse course and give us the tapes and appoint a second special prosecutor.

So, that`s a warning to him. But there was a question the day of the Saturday night massacre whether the office had been abolished, whether we had been fired or only Cox. And there was a debate if we hadn`t been fired, we should quit in protest. And Archie Cox said, no, you know this case better than anyone, and unless and until you have been fired, you must stay and continue this investigation.

It turned out that the office had been abolished, but as part of the public outcry and the reaction, it was reestablished. And so, we actually never left the offices. But we had been abolished. So, the president can fire Mueller, and if he leaves the staff in place, they can continue without him or under new leadership.

But it would be I think a political mistake because I think even though the president seems to have more Teflon than any prior president in history, this might be the thing that causes the public to go enough is enough. Stop.

O`DONNELL: And, Ron Klain, there has been this controversy erupting over the president`s private criminal defense lawyer saying that the president cannot commit obstruction of justice because he is president -- an argument that we went through during the Nixon administration. And now we have a refinement on that offered by Ty Cobb, who is the inside the White House on the White House payroll lawyer whose watching all of this. And he cites Harvard law professor Alan Dershowitz on this.

Let`s listen to what Alan Dershowitz says about it.


ALAN DERSHOWITZ, ATTORNEY/PROFESSOR: You cannot charge a president with obstruction of justice for exercising his constitutional power to fire Comey and his constitutional authority to tell the Justice Department who to investigate, who not to investigate.


O`DONNELL: So, Ron, the Dershowitz position is a president can commit obstruction of justice. You can charge a president with obstruction of justice, but not for anything that falls within the president`s constitutional duties?

KLAIN: Yes. So, I think Professor Dershowitz is wrong on the merits. Presidents who do things for corrupt reasons can be prosecuted or at least called into impeachment for that. And what I`d say is the only people who believe the position that Dershowitz and Cobb and Sekulow have taken are people on Donald Trump`s payroll.

But not everyone on Donald Trump`s payroll believes that. Attorney General Sessions when Clinton was subject to impeachment said a president could be impeached for obstruction of justice. So, this is a ridiculous position. It has no broad support in the legal community and it`s not going to hold up under scrutiny.

O`DONNELL: David, tell us how you would see Donald Trump in the middle of that discussion in the White House on this issue of can the president be charged with obstruction of justice.

JOHNSTON: Oh, well, Donald would absolutely argue that he is above the law. He certainly doesn`t know his history about King Charles I, who, of course, was beheaded after asserting that the king can do no wrong.

Donald, remember, doesn`t understand the Constitution. Nobody asked him during the campaign, would you tell us the duties, powers and limits of the president? He doesn`t know what they are. He thinks that he is a dictator or should be a dictator, and that he is above the law. But, of course, Donald has thought that his whole adult life.

O`DONNELL: Jill, we`ve got to hear you on this question that Professor Dershowitz is saying, that yes, it`s possible to have obstruction of justice charges against a president, but not if it is for something that is within the president`s constitutional duties.

WINE-BANKS: Well, first of all, let me go back to something that was just said. I`d also like to say King Henry VIII, when he didn`t like things, he beheaded people or he changed the church. He got what he wanted that way. And that`s what Dershowitz is suggesting, is that the president can do anything he wants. And I agree when there is a corrupt intent, nothing is legal.

And so, Dershowitz is wrong. John Dowd is wrong. And Ty Cobb is wrong.

Not only can he be indicted for -- and the question of indictment may be an open question. But he certainly could be charged with obstruction. And he certainly could be impeached for obstruction.

And all of the things that we`ve been talking about are I believe clearly obstruction. I think there is enough evidence of acts that are intended to stop an investigation. I recently reviewed the indictments in the Watergate case. And so many of the things that I read could be changed to Trump as the defendant.

So, yes --

O`DONNELL: And, Jill, obstruction of justice was one of the impeachment counts in the House of Representatives against the President Nixon, wasn`t it?

WINE-BANKS: Yes. It absolutely was. And another was abuse of power.

So, even if you accepted the argument that it can`t be obstruction of justice, the president can abuse even his constitutional powers. I would argue that if he started to pardon everybody who was involved in this case to avoid the investigation going any further, that would be such an abuse of power, even though he has unlimited power to pardon, that would be a crime. And I don`t think we should let the president get away with crimes.

O`DONNELL: And, Ron Klain, the thing that is always inhibited presidents in these directions, like unlimited pardoning of your friends, especially first term presidents, is the desire to be re-elected. Is a notion that there are political limits to what you can do, that the electorate won`t go with you beyond some limit? And Donald Trump never seems to have observed that.

KLAIN: No, look. He does have a very strong support base. And as David said earlier, the congressional Republicans have tolerated all of Trump`s outrages thus far. But I do think that there are some lines here and some places where even the Republicans may get off the Trump train.

And if we`re talking about things, as Jill mentioned, corrupt intent, abuse of power, that may be where the line is drawn. Either way, I think it`s up to all of us to hold President Trump accountable and for this investigation, the Mueller investigation to proceed and to reach its conclusion and to let the chips fall where they may.

O`DONNELL: Jill Wine-Banks and David Cay Johnston, thank you very much for joining us tonight. Ron, please stick around.

Coming up, a report tonight that Mike Pence tried to replace Donald Trump as a Republican presidential nominee after the "Access Hollywood" video came out last year. And as scandal closes in on the president, some are wondering if Mike Pence still has his eye on Trump`s job.

And later, the strangest meeting in the White House today had President Trump sitting beside Republican Jeff Flake who the president has been attacking all year on Twitter, most recently calling him Senator Jeff Flaky.


O`DONNELL: Everyone is paranoid. That`s what a person close to the Trump White House told "Politico" this week. And into that White House paranoia steps Mike Pence.

Thanks to new reporting by McKay Coppins in "The Atlantic" who tells us that Mike Pence, in whom the Constitution vests the sole power to initiate the removal of the president under the 25th Amendment, has already tried to replace Donald Trump once before, right after the "Access Hollywood" tape went public during the campaign, showing Donald Trump bragging about his preferred methods of sexual assault.

McKay Coppins writes: It`s been reported that Pence sent Trump a letter saying he needed time to decide whether he could stay with the campaign. But, in fact, according to several Republicans familiar with the campaign, he wasn`t just thinking about dropping out, he was contemplating a coup.

Within hours of "The Post`s" bombshell, Pence made it clear to the Republican National Committee that he was ready to take Trump`s place as the party`s nominee. Republican donors and party leaders began buzzing about making Pence the nominee and drafting Condoleezza Rice as his running mate.

Joining us now, David Frum, senior editor for "The Atlantic", and back with us, Ron Klain.

And, David, we all remember how many Republicans immediately distanced themselves from nominee Donald Trump when the "Access Hollywood" video came out. And according to this reporting, behind the scenes, Mike Pence was one of them.

DAVID FRUM, SENIOR EDITOR, THE ATLANTIC: Look, this is such a terrific piece of reporting. It`s my colleague McKay Coppins. I have to say, if McKay said it happened, it happened. He is a fantastic reporter.

But the delusion in the Republican Party -- do you remember those old loony tune where the coyote would step off the cliff, assuming that he was all set and, in fact, it`s the cliff that collapses? The central fact that every Republican has to cope with is these coups can`t work because as unpopular as Donald Trump is, the regular Republican Party is that much less popular. So, there is this idea that if only you could get rid of Trump and proceed to take away everybody`s health care and cut taxes for the very rich, that that`s what America wants. But as little as they like Trump, they like Trump more than that.

O`DONNELL: Ron Klain, the intrigue in this article about the reaction inside the Republican Party when the "Access Hollywood" video came out, including a meeting in which the president -- nominee Donald Trump, asked everyone in the room what they thought was going on. Reince Priebus says you can drop out now or you can be wiped out on election night.

One of the schemes was a billionaire buyout. And I`m reading from McKay Coppins` article.

A small group of billionaires was trying to put together money for a buyout, even going so far as to ask a Trump associate how much money the candidate would require to walk away from the race. According to someone with knowledge of the talks, they were given an answer of $800 million. It`s unclear whether Trump was aware of this discussion or whether the offer was actually made.

Ron, I don`t think that offer has ever been made or discussed in any other presidential campaign.

KLAIN: No. I think the mistake they made was not making the offer in rubles because that might have gotten the job done that night and we would be rid of this problem right now.

But, look, I think the fundamental problem we have here is that, you know, Mike Pence and these other Republicans blinked at the "Access Hollywood" thing. And they got back on board by Monday. And have been on board ever since.

And Mike Pence has stood up and allowed Donald Trump to offend his wife with this behavior. He has insulted his beliefs. He has outraged his Christian views. And we learn tonight in the Hill for example, the last straw. Donald Trump said Mike Pence lacked class for bringing his dogs to the vice presidential residence. He is even insulting the man`s pets.

So, Mike Pence is basically taken it from Trump. He signed on for the duration. And clearly is now part of the Trump team.

O`DONNELL: And, David, I want to read you another part of this article which I know you know so well. But I want the audience to hear this particular way that Mike Pence has of communicating according to McKay Coppins, who has watched him do many, many of these speeches and who says he just hung up the phone with Donald Trump and he always chuckles a little bit after he says that.

And the way McKay Coppins reports it, he says, it almost as if in that brief barely perceptible moment Pence is sending a message for those with ears to hear that he recognizes the absurdity of his situation. That he know just what sort of man he is working for, that while things may look bad now, there is a grand purpose at work here, a plan that will manifest itself in due time.

How did you interpret that, David?

FRUM: Well, what McKay is describing we`ve all seen. If you watch that clip where John Dickerson of CBS asks Vice President Pence about the Russia collusion, Pence gives exactly that same warm Chuckle before proceeding to lie his head off about the contacts.

But the mistake Mike Pence is making, Mike Pence has this idea that somehow the Republicanism that he is offering is more robust, more deeply rooted than the one Donald Trump is offering. And we wouldn`t be in this fix if that were true. That Pence-style Republicanism is in trouble, and Donald Trump was the answer.

Remember, when the "Access Hollywood" tape broke, Paul Ryan did separate himself from Donald Trump. He did it very decisively. He refused to campaign with him anymore. He canceled events. He withdrew his support.

And it was Paul Ryan`s support that collapsed I believe about 20 points in ten days.

O`DONNELL: And, Ron Klain, we have Mike Pence`s wife in the article, described as saying she finds -- she has been disgusted by Trump, finds him reprehensible, just totally vile.

And we`ve had earlier reports this year that Steve Bannon actually taught the president a little something about the 25th Amendment, and how the 25th Amendment provides for the vice president to initiate a process by which a majority of the cabinet and the vice president can decide to remove the president because he is unfit to serve and install the vice president as the acting president. And that, of course, Steve Bannon took as a serious threat.

KLAIN: Well, it is a threat. But I do think that Mike Pence has knuckled under. And I think Mike Pence isn`t spending any time studying the 25th Amendment.

I think given all the lies he has told about the Russia investigation, he ought to spend some time studying the 5th Amendment. He is going to be in the tank in this investigation too.

And I think that`s the big fallacy that may be in Donald Trump`s mind, that somehow Donald Trump can fall, the Donald Trump presidency can end, and Mike Pence can rise and survive, and be the future of the Republican Party, and for reasons David said, and most of all because of pence`s deep complicity in the Trump presidency, I do not think there is a future for Mike Pence after Donald Trump.

O`DONNELL: But, David, lying to the press or saying something to the press about Trump-Russia that turns out not to be true is not something that can get Mike Pence into legal jeopardy.


O`DONNELL: What is Mike Pence`s biggest legal risk with the special prosecutor?

FRUM: I don`t know that he has legal risks. But he has a political risk. You`ve often invoked the comparison to Watergate. One of the things that Gerald Ford did, Gerald Ford, a very underestimated figure, was he managed to defend the Republican Party, defend even Richard Nixon while communicating to the American public that he was completely uninvolved with these actions and that he was a person of character and decency.

And the public was sort of ready for him to step in when the Nixon presidency collapsed. He was close to Nixon but not as close as Pence is to Trump. That`s not a legal problem, but it is a political problem.

And Ford did not have to pull the trigger on Richard Nixon. He did not have to initiate the 25th Amendment. It happened anyway. But the process that is threatening Donald Trump is one that is a political process that probably is a deadline in 2020 rather than 2019. And Mike Pence is bound to Donald Trump. There isn`t a good way out of this for him.

O`DONNELL: We`re going have to take a break here. Ron Klain, thank you for joining us tonight. And, David, please stick around.

Coming up, a report that the White House wanted to create a provide spy network to spy on, among other things, the CIA. Private spies to spy on the spies.

And also coming up, how Jeff Flake joined the resistance today, the resistance to Roy Moore.


LAWRENCE O`DONNELL, MSNBC CONTRIBUTOR: Today the first question at the Whitehouse Press Briefing was the kind of question that is supposed to get you kicked out of Whitehouse Press Briefings for being outright crazy. But this is the Trump Whitehouse. And so it turns out the question wasn`t as crazy as it sounds.


UNIDENTIFIED MALE: Is the Whitehouse or the president at any level considering creating a global or regional spy network that would circumvent the U.S. Intelligence apparatus and serve the President outside of the normal and deeply defined intelligence gathering mechanisms?

SARAH HUCKABEE SANDERS, WHITEHOUSE PRESS SECRETARY: I`m not aware of any plans for something of that definition or anything similar to that at this time.


O`DONNELL: Not that`s ridiculous, that`s outrageous, that`s impossible, how dare you even suggest it. Just I`m not aware. The intercept is reporting that current and former U.S. Intelligence officials say the Trump Administration is considering a proposal to create a, quote, global spy network that would circumvent official U.S. Intelligence Agencies.

The private spy army would report directly to President Trump and his CIA Director Mike Pompeo, and is being pitched, according to the intercept, "as a means of countering deep state enemies in the intelligence community seeking to undermine Donald Trump`s presidency." The plan is reportedly being developed by Erik Prince, the founder of Black Water and former Reagan Whitehouse official Oliver North, who was convicted of multiple charges in the Iran/contra scandal, convictions that were overturned on appeal.

Oliver North did not respond to the intercept`s request for comment. Erik Prince told the Intercept I was, am not part of any of those alleged efforts. The reporter who first broke the story for the intercept, Matthew Cole, will join us next.


O`DONNELL: We`re joined now by Matthew Cole, investigative reporter for the Intercept who co-wrote the report Trump Whitehouse weighing plans for private spies to counter deep state enemies. Also with us, Ned Price, former Senior Director and Spokesperson for the National Security Counsel and a former CIA Analyst. He is an MSNBC National Security Analyst.

And Matthew, I just want for the audience to know that your reporting has only been supported by others who have joined into this, CNN confirming much of it. The New York Times discovering tonight that the Whitehouse is now backing off of the denials and simply saying they`re moving back to the position of saying the idea has been pitched. But no sign at this point That President Trump was actually briefed on it. Matthew, what do you make of the Whitehouse`s shifting response to this?

MATTHEW COLE, MSNBC CONTRIBUTOR: Well, I think the first thing to point out sits it`s very indicative of the problem here within this story, which is that the lies that have come out of this Whitehouse thus far in 11 months have been unending. And so we need to remember that when they give a blanket denial, it just can`t be accepted on its face. It`s a, you know, in this case, it was a step by step.

The first was a blanket denial. The second was at the press briefing today was a denial by sort of semantic evasion. And then we get another news organization that confirms the story. And then the next step is sort of downplaying and which is well, maybe the proposal did get pitched to us. But it has no traction here.

And in fact, I don`t believe that`s the case. This is a very, very troubling story because although on its surface it might seem almost silly or comical given the sort of shades Oli North and Iran Contra, what it really identifies is a divide within the administration between your sort Bannon Alt-Right portion and some of your professionals. And there are people around the President who clearly for several months and as recently as last month absolutely are considering this proposal.

And believe it is something that`s necessary to provide a check on the CIA and in what they see as disloyal civil servants working for government. They basically don`t trust the spies doing the spying. And so they want something that can stovepipe past the normal intelligence community and go from the ground, as it were, directly to the director and into the Whitehouse. And I think that notion is incredibly dangerous.

O`DONNELL: Ned Price is a former CIA Analyst. What`s your reaction to Matthew`s reporting on this?

NED PRICE, MSNBC CONTRIBUTOR: Well, Lawrence, I have spoken with some former colleagues whom I trust over the course of the day today. And the story they have relayed is largely similar to what we heard from the New York Times. That it conceded that yes, there have been meetings, but this doesn`t seem to be getting off the ground, at least any time soon. What this all means it suggests to me, Lawrence, it reinforces the notion that we have an administration in power that doesn`t trust in the American system of governance and the American system of democracy.

And that`s a system that relies upon a professional cadre of civil servants, including tens of thousands of whom work in the National Security orbit, working day and night, regardless of President, regardless of the party of the President, Democrat or Republican, to serve the Commander in Chief and ultimately the American people. But with this Trump camp, with the Trump Administration we now have in power a group that distrusts this professional class, a group that casts them all as the deep state.

And we`ve seen this even since before President Trump`s inauguration. The fact that the Trump transition would not use the State Department to conduct foreign leader calls and meetings during the transition, the fact that the very same Erik Prince reportedly, at least, at the behest of the administration went to the Seychelles to establish a back channel with the Russians during the transition.

The fact that Rex Tillerson is gutting the State Department. The fact that Donald Trump says he is the only one who really matters. And the fact that Jared Kushner and Steve Bannon again reached out the Erik Prince to develop a plan for Afghanistan that relied not on U.S. forces but on black water contractors. These are all indications that this is a crew that does not trust the people that are supposed to be protecting the American people day in and day out.

O`DONNELL: And, you know, if we had a President who never indicated that he believed in fantasies and crazy ideas, this would be one thing. But a lot of this feeds into what we know Donald Trump would like to have if possible. I want to read part of your reporting, Matthew. It says the proposals would utilize an army of spies with no official cover in several countries deemed denied areas for current American intelligence personnel, including North Korea and Iran. And in order to do this, you would have to have a president who believed that they could successfully get people into North Korea and get information back from them.

COLE: Yeah. Well, there is no question that on the part of Prince and his colleagues that there may be an effort to up sell their abilities to the Whitehouse and to the President. But we have to remember that Erik Prince used to run a CIA program that was geared towards assassinating Al Qaeda targets during the Bush Administration. And although there were no known assassinations as a result of that program, the program was put together.

The spies were hired. The people were sent out. And in fact part of the way that this story first became known to us was one of the things we discovered is that Erik Prince`s team from his CIA days was being rehired by Erik Prince. And it was the first indication that things were moving and that money had been allocated.

Now we should point out that we have no idea where the money came from. The money could have been private. The money as far as the government is concerned appears that they`re not paying for it, although I don`t know that that`s a settled question yet.

So there is certainly a background here for the people involved. There is a Senior Official at the Whitehouse right now named Michael Berry who is the NSC Intelligence Director who worked with Erik directly on the CIA Assassination Program during the Bush administration.

And in fact, we have sources who said listen, Berry was in our office all the time down in Moyock working with Erik to run these things. So you have a group of people who certainly know each other well, have the familiarity, and have clearly said to the president, you know, you`re not getting the intelligence you need in North Korea. You`re not getting it in Iran. We have the solution, and it`s private. It can be privatized, and it will be stove piped directly to you. And obviously, the concern there is the potential for abuse and the ability to use intelligence for political means.

O`DONNELL: Sounds like a senate Intelligence Committee has another investigation that`s got to get started. Matthew Cole, thank you very much for joining us tonight with your reporting on this. And Ned Price, thank you as always for joining us. Really appreciate it.

COLE: Thank you, Lawrence.

PRICE: Thank you.

O`DONNELL: Coming Up, Jeff Flake`s new move into the resistance. The resistance against Roy Moore


O`DONNELL: The President had a strange luncheon meeting today with six Republican Senators who wanted to be heard on international trade. But none of the senators are on the Senate Finance Committee, which has jurisdiction over international trade. And so it was very likely a waste of time for all involved, except for the questions from the press about the about the alleged child molester running for Senate in Alabama with President Trump`s endorsement.


DONALD TRUMP, UNITED STATES PRESIDENT: Yeah I think there he`s going to do very well. We don`t want to have a Liberal Democrat in Alabama, believe me. We want strong borders, we want stopping crime.

We want to have the things that we represent and we certainly don`t want to have the Liberal Democrat that`s controlled by Nancy Pelosi and Chuck Schumer. We don`t want to have that for Alabama.


O`DONNELL: Sitting beside the President he`s endorsed Roy Moore once again was Republican Senator Jeff Flake who today wrote a check to Doug Jones for U.S. Senate showing that check on twitter that he contributed $100 to the Democrat in the Alabama race against Donald Trump`s Republican candidate.

And in the memo line of Jeff Flake`s check he wrote, country over party. And today the Republican Senate Majority leader Mitch McConnell once again suggested that if Roy Moore wins the election, Alabama will have to have another special election for the very same Senate seat next year after Roy Moore gets expelled from the United States Senate.


MITCH MCCONNELL, UNITED STATES SENATOR: I had hoped earlier he would withdraw as a candidate. That obviously is not going to happen. If he were to be elected he would immediately have an ethics committee case and the committee would take a look at the situation and give us advice.


O`DONNELL: And David Frum is back with us. David, we all remember the attack tweets from Donald Trump against Jeff Flake that he`s been doing most of the year, most recently November 19th. Senator Jeff Flakey who is unreliable, unelectable in the great State of Arizona and so on and so on and so you see, senator flake Sitting Beside The President Today and Donald Trump Just Sitting there as if nothing had ever happened between them.

DAVID FRUM, MSNBC CONTRIBUTOR: Right, half an hour before you went on the air Roy Moore tweeted out I think they`re afraid I`m going to take Alabama values to Washington and I can`t wait. Maybe one of the issues in this election is what -- is that kind of slur against the State of Alabama going to stand? These can`t be Alabama values, child molestation, those are not values anywhere. They`re behaviors, they`re not values. Jeff Flake stood up and good for him.

O`DONNELL: Yes, and, David, you see Mitch McConnell now swerving a little bit on this coming back, apparently, to the possession had before which is everything that he`s heard is stuff for the ethics committee to investigate as soon as Roy Moore comes to Washington, if he comes to Washington.

FRUM: Well, what is going on in Mitch McConnell`s mind you`d like to believe he`s standing up for good things. I think what`s going on is more calculated accommodation which is McConnell`s figuring out I can get this tax bill passed before Roy Moore seated and then I won`t need him. So I can stand up to him because he`s not going to be in Washington until January and perhaps this tax bill will be law by Christmas.

O`DONNELL: And of course as long as Roy Moore is in the Senate, even if he is under Ethics Committee Investigation he can vote on whatever tax bills they put in front of him.

FRUM: He can do more than that. He can refuse unanimous consent. No one on earth can make more trouble, as you know well, than the United States Senator. They will -- they will need -- they will have to appease him. However tough they talk now, they will have to appease him when he gets there.

O`DONNELL: Yeah, because does he have that power of one Senator to hold up whatever he wants to. But generally some someone finds themselves in the Senate Ethics Committee, they tend to behave themselves on the Senate Floor.

FRUM: Generally. And generally when 32-year-old men find themselves in the company of 14-year-old girls they drive them home.

O`DONNELL: Yes. And, again, To Jeff Flake, this is an extraordinary thing to actually write a check. I don`t know that I`ve ever seen that before. I`ve seen people in one party be signed of nod and favorable and never say anything negative about a senator running in another party. But I`ve never seen a check like that.

FRUM: Well, Flake is writing. He`s got this - Flake has this terrible connondrum. Look, he despises Donald Trump, he`s made that clear. He`s also one of the most ideologically libertarian members of the Senate. So generally on principle he approves of a lot of the things that Mitch McConnell is trying to do.

And people are demanding that he vote against his own convictions for a lower corporate tax rate and things like that in order to send a message to Donald Trump. So he`s stuck. He`s not going to blow up what he believes in to punish Donald Trump. He`s looking for ways to send a message consistent with what he believes in.

O`DONNELL: David Frum, thank you very much for joining us tonight, really appreciate it.

FRUM: Thank you.

O`DONNELL: We`ll be right back.


O`DONNELL: Time for tonight`s favorite tweet which is from See Toby Sleep. It says hey, Lawrence, or as i like to say, Pupa Bartlett, just made a Christmas K.I.N.D. donation for my mom who adores your show. P.S. please remind viewers calling their reps Rey Tax Bill to be kind to be person taking calls. #life of a house staffer.

I love everything about this tweet including the reference to my act role on the West Wing playing Jed Bartlett`s father, and most importantly making a Christmas gift to the K.I.N.D. Fund for someone on your gift list. Kids in Need of a Desk is a partnership of MSNBC and UNICEF to deliver desks to kids in African Schools where they have never seen desks.

And K.I.N.D. provides scholarships for girls to attend high school in Malawi where public high school is not free. You can donate in the name of any one on your gift list at, And the other thing I love about this Tweet is that reminder that when you call a member of Congress to make your case for or against legislation, always remember that the person answering that phone is not responsible for their boss`s vote.

And many of those people answering the phone disagree with their boss`s votes on the issues. And so, yes, please, always be kind to the people taking those phone calls and never give up in making those phone calls because this democracy is only improved when you make your voice heard. That`s tonight`s Last Word. Coming up next, Brian Williams`s coverage of the breaking news about the Trump Administration`s decision about Jerusalem.



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