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Mueller: Trump not a criminal target. TRANSCRIPT: 04/03/2018. The Last Word with Lawrence O'Donnell

Guests: Robert Costa, Ron Klain, Neera Tanden

Show: THE LAST WORD WITH LAWRENCE O'DONNELL Date: April 3, 2018 Guest: Robert Costa, Ron Klain, Neera Tanden


And Democrats are sometimes accused of not paying enough attention to races like that. It look likes this one did get the right level of attention.

RACHEL MADDOW, MSNBC HOST, TRMS: Well, yes, this is -- it was interesting. There were a bunch of national endorsements here. Rebecca Dallet had an endorsement from Joe Biden and from this -- the Eric Holder/Barack Obama group and from lots of other ambitious Democrats around the country, including people like Cory Booker. So, that national Democratic attention in this case seems to have -- certainly didn't hurt. It may have helped.

O'DONNELL: We're going to be continuing discussion of this "Washington Post" breaking news story tonight. You had Carol Leonnig on in your hour. We have Robert Costa, the co-author of that piece joining us this hour with the latest --

MADDOW: Very good.

O'DONNELL: -- on what they're learning about the president being a subject of the investigation. And President Trump actually thinking that's pretty great.


O'DONNELL: That he's just a subject instead of target. Any other president of the United States being told you're the subject of a prosecutor's investigation would just be horrified that it had come to that.

MADDOW: Yes. And you can't -- I mean, I feel a little embarrassed admitting this, but you can't really help thinking it's strategic. Like tell him he is the subject. He likes being the subject.

O'DONNELL: We're going discuss with some people who have experience in this just how often that occurs, that there is a little bit of shading of it when they're just on the verge of switching you into target. They're still -- you're a subject. But we'll get into it.

MADDOW: All right. Thanks, Lawrence.

O'DONNELL: Thanks, Rachel.

Well, as I said, the president of the United States is now officially a subject of special prosecutor Robert Mueller's investigation, according to a breaking news report tonight in "The Washington Post." One of the authors of that report will join news a moment, Robert Costa.

Your status in a federal criminal investigation is often clarified by your lawyers when investigators want to question you, as we know Robert Mueller has been seeking to President Trump for months now. And there are three possible status levels for someone prosecutors want to interview. They are witness, subject, and target.

Witness is the least dangerous status. Target is the most dangerous status. Target is exactly what it sounds like. Witness means you have something useful to say, but are not implicated in a crime.

You're the driver for a limo service and you drove O.J. Simpson to the airport at a particular time. And it's very important to the investigators to know exactly what time you picked up O.J. That's all they want to know. They are not investigating anything about you, the driver. They just want to know what time you picked up O.J. that's the most innocent status, witness.

Subject is the middle status. Subject is more than a witness. Subject is someone whose conduct is being investigated, but at this time is not apparently guilty of a crime.

But subject is a very dangerous, dangerous status because when subjects go in to testify under oath, they sometimes become targets, because they end up giving prosecutors the kind of information that changes their status from subject to target. They could also instantly become targets of perjury investigations if they don't tell the truth under oath.

So, you don't ever want to hear that you are a subject of an investigation because subjects can always become targets, which is the only thing worse than being a subject. Targets then usually become accused defendants. And so far, in Robert Mueller's investigation, that usually means they plead guilty.

"The Washington Post" is reporting tonight in private negotiations in early March about a possible presidential interview Mueller described Trump as a subject of his investigation into Russia's interference in the 2016 election.

"The Washington Post" tonight contains other news that could be much more damaging to the Trump presidency. It is this. The special counsel also told Trump's lawyers that he is preparing a report about the president's actions while in office and potential obstruction of justice, according to two people with knowledge of the conversations.

If the special prosecutor believes that President Trump committed obstruction of justice in the presidency, he might decide that the best way to deal with that is to leave it to Congress to consider as a possible cause for impeachment and the way special prosecutors deliver their findings to Congress for impeachment is through a written report.

"The Washington Post" has more. Mueller's investigators have indicated to the president's legal team they are considering writing reports on their findings in stages with the first report focused on the obstruction issue, according to two people briefed on the discussions. Under special counsel regulations, Mueller is required to report his conclusions confidentially to deputy attorney general Rod J. Rosenstein who has the authority to decide whether to release the information publicly. They said they want to write a report on this to answer the public's questions, and they need the president's interview as the last step, one person familiar with the discussions said of Mueller's team.

Leading off our discussion now by phone is one of the reporters who broke that story tonight, Robert Costa, national political reporter for "The Washington Post" and an MSNBC political analyst.

Robert, you're also reporting in this that the president's reaction to the news that he is a subject of the investigation is that he is relieved.

ROBERT COSTA, REPORTER, THE WASHINGTON POST (via telephone): That is correct, Lawrence, and good to be with you. You laid it out very accurately at the beginning of your program. The president is relieved, we're told by our sources, that he is a subject. But he is still a subject.

And this has become a point of disagreement among his advisers and lawyers. Some are saying, including the president, because he is only a subject, he would like to engage with the Mueller team and sit for an interview.

But others are telling him this is a very risky situation legally. You should not sit down with the Mueller investigation if you are a subject, as Mueller told Trump's lawyers in early March.

O'DONNELL: And, Robert, your reporting on how this divides within the legal team. Who is advocating submit to the interview, and who has been advocating do not submit to the interview?

COSTA: Generally speaking, based in our reporting with Carol Leonnig, my colleague, we learned that the president's in-house lawyer on the Russia probe, Ty Cobb, has been supportive of the idea of sitting down with Mueller. He is a veteran Washington lawyer. His perspective based on our reporting is one shared by the president, that if he sits down with Mueller and his investigators, he will maybe be able to conclude this probe and bring it to a quicker end.

But then John Dowd the president's recently departed Russia attorney, he's also a veteran Washington lawyer. He has worked and interacted with Robert Mueller for a long time. He has been telling the president do not put yourself at legal risk. You are a subject.

Remain a subject. If Mueller wants to move forward, it's his decision not for you to have to answer questions sitting down in a room.

O'DONNELL: Lawyers like Dowd and others have seen subjects move to targets as a result of doing these kinds of interviews. And that could be part of his advice perspective.

But also, Robert, I really want to emphasize the written report that you're talking about in your reporting tonight. And it indicates that the first report that the special prosecutor wants to issue is a report about Donald Trump's conduct in the presidency concerning the possibility of obstruction of justice.

COSTA: That is correct. It was difficult as reporter, Lawrence, to really figure out how to balance all the news we have discovered over the past week because this report is a major piece of news. Yes, the way Mueller is phrasing things to Trump's lawyers is important, and we need to take note of it. At the same time, we have nailed down that the Mueller team is working on different tracks.

They're working on the Russia investigation in terms of Russian interference. But they also are working on a specific report they would like to come out with in June or July of this year that has different conclusions about the president's conduct, his behavior while in office, looking at key decisions like the firing of former FBI Director James Comey. And he believes that he has to figure out the president's intent.

And that's the missing piece. They know about the action. They have the documents. But they want the figure out, did the president have a criminal intent, a different kind of intent? They're not sure within the Mueller investigation.

And that's what they're trying to get him to sit down. This is all part of a negotiation between these two sides.

O'DONNELL: Robert Costa, thank you very much for joining us tonight with this breaking news. Really appreciate it.

COSTA: Thank you.

O'DONNELL: Now joining the discussion, Chuck Rosenberg, former senior FBI official and former U.S. attorney. He is an MSNBC contributor.

Ron Klain is with us, former chief of staff to Vice Presidents Joe Biden and Al Gore and a former senior aide to President Obama. He is also former chief counsel to the Senate Judiciary Committee and he was the chief of staff to Attorney General Janet Reno.

And, Chuck Rosenberg, I want to go to the last point that Robert Costa was talking about there, and that is the written report about obstruction of justice involving the president and that issue of intent that Robert has emphasized to us on the phone as being part of this, of Mueller's objective now. Wouldn't that then suggest in the defense of Donald Trump that there is a strong argument to be made to not submit to the interview because it is through the interview that Mueller would be able to establish intent, and without the interview, Mueller doesn't have intent?

CHUCK ROSENBERG, MSNBC CONTRIBUTOR: Well, I wouldn't go so far as your second point, Lawrence. There is lots of ways to establish intent.

It is the hardest thing to establish. But it doesn't only come from a subject or target's own mouth. You can get it from other people.

If Mr. Trump told his chief of staff or one of his aides that he was going to fire Jim Comey, to kill the Russia investigation, essentially the same thing he told Lester Holt -- well, that's evidence of intent.

And so, there is lots of ways to prove it. There are ways to infer it. You can draw it out from circumstantial evidence. You don't -- it doesn't need to come solely and literally from the mouth of the target.

O'DONNELL: And, Ron Klain, I want to get to this written report that Mueller has told the president's lawyers they are writing, a written report concerning the obstruction of justice issue. And that sounds to me like a report that is being written for Congress.

RON KLAIN, FORMER CHIEF OF STAFF TO VICE PRESIDENT BIDEN: Yes. I mean, I doubt they're taking the time to write a report that just says the words nothing happened here. And so, you know, if they're working on this report, it's because they believe they have assembled evidence that the president engaged in a conspiracy to obstruct justice in the investigation, perhaps of General Flynn and others involved in the White House and the campaign.

Now, that report would first go to the deputy attorney general who theoretically has the power to keep it confidential. But it's inconceivable in this environment that if they wrote up a report, if Mueller writes a report saying that he believes Donald Trump obstructed justice, there is a reason Donald Trump obstructed justice, that that would simply go into the deputy attorney general's file drawer and never see the light of day.

So, I think ultimately that report will find its way to Congress and will be the basis for some congressional review of his behavior.

O'DONNELL: Let's listen. We just heard from Robert Costa, who is the co- author of this report tonight with Carol Leonnig.

Let's listen what Carol Leonnig told Rachel in last hour about John Dowd, the criminal defense lawyer who just left the Trump team.


CAROL LEONNIG, REPORTER, THE WASHINGTON POST: John Dowd, according to close friends of the president, was counseling the president that he should absolutely not do the interview, all caps. Do not do the interview with Bob Mueller's team.


O'DONNELL: And, of course, Chuck Rosenberg, the flaw in that approach is if you don't do the interview, you then submitted the president to the possibility of being subpoenaed to then testify under oath, under what are much more strenuous circumstances.

ROSENBERG: That's right, Lawrence. Look, this is an act, not a science. And so, we shouldn't be surprised that defense attorneys take a different view of whether or not the president should sit down voluntarily with the Mueller team.

That said, you're right, he could still be compelled in theory. But the U.S. attorney's manual, the guidelines for federal prosecutors, and I was one for a long time, also instructs federal prosecutors that they do not normally subpoena a target to a federal grand jury. So, there are some limitations there. But the Mueller team has options, they absolutely have options.

O'DONNELL: Ron Klain, going back to the written report, it strikes me as something that if Robert Mueller has his staff working on that written report, handy is working in close coordination and the supervision of Rod Rosenstein, that Rod Rosenstein has in effect preauthorized the written report reserving the right to decide when he finally reads it in its entirely whether or not to release it.

KLAIN: I think that's right, Lawrence. I mean, I think, as I said before, I think there is zero percent chance that a report like this gets written and it doesn't see the light of day.

And I also agree with your earlier point. I mean, it's an interesting little twist here. Chuck is certainly right that the U.S. attorney's manual says you don't bring targets of investigations before the grand jury, but of course, as we just learned, Donald Trump is a subject, not a target yet. And so, that could be the basis to say if you won't agree to this interview, he will have to appear before the grand jury without the benefit of his crack legal team.

And so, look, I think that the water is rising here for president. And I think the biggest point is what you said at the outset. The idea that Donald Trump thinks it's some kind of vindication that he is not a target, that he is the first president in our history that is the subject of a federal criminal probe related to foreign tampering in our elections is disgraceful, and there is going to be a comeuppance for that.

O'DONNELL: Chuck Rosenberg and Ron Klain, thank you for guiding us through the legalisms of tonight's big breaking news. Really appreciate it.

ROSENBERG: Thank you.

O'DONNELL: Well, the president wants the American military to do the impossible, and it's impossible because it is illegal and it has been illegal since 1878.

And if you try to hurt the stock price of a company by knowingly lying about the company publicly and repeatedly, that is called stock fraud. What is it called when the president of the United States does it?


O'DONNELL: As we all know, President Trump's problem is that he watches too much TV. Well, OK. That's just one of his problems.

His other problems include the inability to read books and the inability to listen to anyone who is not speaking on Fox News. And it seems now the only input that moves the president is television. And unfortunately, he is not watching the right television. If he spent a few hours with Ken Burns' Vietnam documentary, he would have a better grasp of the American government's and the American military's history of overestimating its capacities and wasting American lives in hopeless faraway wars.

And if he just watched four minutes, four minutes of the NBC drama "The West Wing" now available on Netflix, specifically the first four minutes of the season finale of season 3 of "The West Wing," President Trump would hear these words written by Aaron Sorkin and spoken to the fictional president played by Martin Sheen to talk him out of a bad idea.

Quote: The Posse Comitatus Act of 1878 prohibits the military from civilian law enforcement.

Because Donald Trump does not know that, today he said this --


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Until we can have a wall and proper security, we're going to be guarding our border with the military. That's a big step. We really haven't done that before, certainly not very much before.

So what we are preparing for the military to secure our border between Mexico and the United States. We have a meeting on it in a little while with General Mattis and everybody. And I think that it's something that we have to do.


O'DONNELL: And surely at the meeting with Defense Secretary James Mattis, the president learned that it is against the law for the American military to arrest or detain anyone on American soil. And I mean anyone. That includes anyone they see run across the border into the United States.

If the American military sees someone run across the border into the United States, the only thing they are legally empowered to do is what you're empowered to do, call border patrol agents and tell them what they saw and where they saw it and wish the border patrol agents luck in catching up with whoever they saw running across the border. And that is actually a role that the American military has played on our southern border occasionally. It has never been very effective.

Imagine Donald Trump's rage when he discovered he lives in a country where the military is not allowed to arrest anyone. There are plenty of little countries around the world where the military acts as the local police, including places where they don't even have local police. The president's statement today reportedly took military officials by surprise. They were also taken by surprise by the president saying this.


TRUMP: As far as Syria is concerned, our primary mission in terms of that was getting rid of ISIS. We've almost completed that task, and we'll be making a decision very quickly.

I want to get out. I want to bring our troops back home. I want to start rebuilding our nation.

Think of it: $7 trillion over a 17-year period, we have nothing, nothing, except death and destruction. It's a horrible thing. So it's time. It's time.


O'DONNELL: It's time. He wants to get out.

You will recall Donald Trump, the candidate during the campaign said the very worst thing you could possibly do is what he just did, the very worst thing you could possibly do is say that you want the withdraw from military action.


TRUMP: We should have never ended it the way they ended it. By ending it the way he ended it, and he got everybody out, and he let them know when and we're leaving, and they just sat back. They just sat back and they went in.

And I'll tell you what. Barack Obama, number one, is incompetent.


O'DONNELL: And while he was at it today, the president continued to commit stock fraud that is to tell lies about a publicly traded company with the expressed intent of affecting the stock price.


TRUMP: The Post Office is losing billions of dollars, and the taxpayers are paying for that money because it delivers packages for Amazon at a very below cost. And that's not fair to the United States. It's not fair to our taxpayers.

And Amazon has the money to pay the fair rate at the post office, which would be much more than they're paying right now. So Amazon is going to have to pay much more money to the Post Office. There is no doubt about that.


O'DONNELL: And, of course, Amazon pays the same package delivery rate of every other company that delivers packages through the mail, including all of the products sold by Trump family members that are delivered through the mail. And the Post Office makes a profit on its delivery business with Amazon. The Post Office makes a profit on Amazon.

Amazon is actually helping to subsidize the public's use of the Postal Service. And Amazon pays state sales taxes in every state that has sales taxes, something else Donald Trump has been lying about for days now, and apparently in the process, helping to drive the Amazon stock price down. The founder and biggest owner of Amazon, Jeff Bezos, is, of course, the owner the "Washington Post," the newspaper that reports on Donald Trump accurately, and therefore is an unbearable torture for Donald Trump to be subjected to.

Joining us now is Neera Tanden, president of the Center for American Progress, and Ron Klain is still with.

And, Neera, feel free to pick any one of those from the menu of today's rants by the president to his now calling himself his own best adviser, given that many of the advisers have left the building.

NEERA TANDEN, CENTER FOR AMERICAN PROGRESS: I mean, the one I would really point so and I think we'll see more of it is his language around immigration and just sort of made up fantasy that he can call the military. But I do think -- call on the military to enforce the border.

But I do think this goes to a key issue which is I think he recognizes that the fact that a Republican Congress did not pay for the wall means that one of his core promises to his base is never going to happen. And so he's going to talk about other plans. He is going to threaten Mexico to pay for the wall. He is going to continually talk about other things.

At the end of the day, I think it's really important that Democrats remind Trump voters that this core promise he made could not even be delivered on when the Republicans control the other side of Pennsylvania Avenue. It means it will never happen, and that he lied to them like he lied on so many other issues.

O'DONNELL: And, Ron Klain, he combines that with a lie about what happened in the budget bill where there was a bill and a half dollars for the southern border, but none of it was for the construction of new Trump wall. All of it was for the maintenance and repair of existing fencing.

KLAIN: Yes. And you asked -- you said, you pointed to stock fraud, and you asked what do we call it when the president of the United States lies about a major U.S. corporation to try to drive its stock price down? And the answer to that in the Trump era is we call it Tuesday. Because you know, that's what happened on Monday. And it will probably happen again tomorrow on Wednesday.

I mean, the president believes that it's his right, his opportunity to use his office to reward his friends with corrupt benefits and to punish his political enemies with threats and intimidation. And so, I hope that some point in time the president takes a few hours, fires up Netflix, watches "The West Wing", Lawrence, but also watches the movie "The Post" because I think he see there's what happens when the president tries to bully "The Washington Post." I don't want to ruin it for him, but it has a very bad ending for president.

O'DONNELL: "The Post", co-written by Oscar winner Josh Singer, a "West Wing" writing staff graduate. We squeezed in as many West Wing promos as we can here.

KLAIN: There you go.

O'DONNELL: Let's listen to what Donald Trump had to say today about just how tough he has been on Russia.


TRUMP: Nobody has been tougher on Russia than I have. And you can -- and I know you're nodding yes, because everyone agrees.

With that being said, I think I could have a very good relationship with President Putin, I think. It's possible I won't. And you will know about it, believe me. This room will know about it before I know about it.

It's a real possibility that I could have a good relationship. And remember this: getting along with Russia is a good thing.

So I think I could have a very good relationship with Russia and with President Putin. And if I did, that would be a great thing. And there is also a great possibility that that won't happen. Who knows?


O'DONNELL: So, Neera, he is saying he could have a great relationship with Vladimir Putin and nobody's been tougher on Russia than I have.

TANDEN: I mean, it is okay to just cackle at this and laugh out loud?

O'DONNELL: You can. Sure you can.

TANDEN: At the ridiculousness of the -- I mean, you see the lunacy right there. Just to point out the president just rolls out that he might exit Syria. Do you know who would love for us to exit Syria? Russia, because Russia is on the other side of us on Syria.

I mean, I know it's a little bit of an awkward thing to point out, but Russia literally poisoned British people on British soil just a few weeks ago, and he is joking around about how he may get along well with Russia, which is just a ludicrous statement because obviously we have never had a president who has so fraternized, admired, been in a fan club of a country that is essentially our chief adversary today, and has obviously wounded us by infecting our elections.

O'DONNELL: And, Neera, we might some day if the Kremlin decides to tell us discover what Vladimir Putin said to Donald Trump about Syria on their -- in their recent phone call.


TANDEN: Yes, because he won't tell us. But they certainly will.

O'DONNELL: They might. Ron Klain, Neera Tanden, thank you both for joining us. Appreciate it.

KLAIN: Thanks, Lawrence.

TANDEN: Thanks.

O'DONNELL: Up next, it's the corruption stupid. That is the extraordinary coffer of "New York" magazine, its cover story on the ongoing corrupt practices of Donald Trump and the Trump administration, which "New York" magazine has cataloged in multipage detail. The author of that cover story, Jonathan Chait, will join us.


LAWRENCE O'DONNELL, MSNBC HOST: Lost among the many strange things President Trump tweeted and said today was this insight into what he thinks constitutes a conflict of interest.


UNIDENTIFIED FEMALE: Mr. Trump, speaking about economy, about economical cooperation with my country, Latvia, what is your message for investors in Latvia? And what is your opinion the investment in Latvia?

DONALD TRUMP, UNITED STATES PRESIDENT: I think all three would be great places to invest. Stable governments, incredible people, hardworking, industrious people. I think they would be great places to invest. I would have no problem with it. Although I think as President of the United States, they would call that a slight conflict of interest, perhaps. You might be hearing from these people.


O'DONNELL: Any other president of the United States when asked about the investment climate in another country would understand that that question was asked generally, as a macroeconomic question. Only Donald Trump would take it as a microeconomic question about his own business investing in Latvia. And yes, it is a conflict of interest for the President of the United States to knowingly personally invest in any foreign country. Of course, Donald Trump thinks Latvia is a good place for him to invest.

As the Guardian reported last week, he unsuccessfully tried to build there back in 2011. Both the Latvian government's anti-corruption bureau and the FBI eventually looked into those plans. This week's arresting New York Magazine cover says, "It's The Corruption, Stupid: Why Trump's self-dealing is his biggest political liability." The magazine lists President Trump's many conflicts including operating a hotel in Washington, D.C. where millions of dollars of profits have already been delivered directly to President Trump from many lobbyists and foreign governments paying to use that hotel, which has been able to raise its rates dramatically during the Trump Presidency.

Jonathan Chait, the author of the New York Magazine Cover story says Robert Mueller and Stormy Daniels are unlikely to separate Trump from his base as effectively as Trump himself can do by breaking the deal that he made with his voters.

Trump's core proposition to the public was a business deal. If he became President, he would work to make them rich. Jonathan Chait argues that the best campaign tactic for democrats is to "demonstrate that Trump is failing to uphold his end of the deal." After all, the students of Trump University once constituted some of the biggest Trump fans in America, until they realized Trump had conned them. Then they sued to get their money back.

Jonathan Chait, the author of the New York Magazine cover story, "It's The Corruption, Stupid," will join us next.



TRUMP: My whole life, I've been greedy, greedy, greedy. I grabbed all the money I could get. I'm so greedy. But now I want to be greedy for the United States. I want to grab all that money. I'm going to be greedy for the United States.


O'DONNELL: Joining our discussion now, Jonathan Chait, Columnist for the New York Magazine, author of the cover story, "It's The Corruption, Stupid." And Jonathan, it is quite a catalog.


O'DONNELL: And you remind us of what would be the biggest story every day, every night about this Presidency were it not being crowded out by Stormy Daniels', special prosecutor, legislative stories when those are happening like tax reform. And there was Donald Trump saying something you quote at the beginning of your piece about bragging about how greedy he is as a selling point to voters.

CHAIT: Well, that's exactly right. You know, he took this image that everyone had of him from his television show and his role in popular culture, and he kind of flipped it around. He said this mean, nasty businessman guy, I'm going to stop being that guy, and I'm going to start being him working for you. I'm going to take this total u-turn in my career once you elect me. And that was a really important promise that he made.

He wasn't going around saying, I'm going to be the same guy I always was. I'm going to keep running my business. I'm going make myself richer. I'm going to make my kids rich. No, he really said he was going to totally change. And so the fact that he hasn't changed, the fact that he is still the same Donald Trump running the same Trump businesses is a real problem I think for those people who trusted him.

O'DONNELL: And Jonathan, whenever you're reading an analysis that says, you know, this is the way current Trump voters will turn on him, it's always -- you always kind of feel like oh, yeah, sure. They're not going to -- he is still going to be best racist they ever voted for. He is still going the hate everyone south of the border and share those feelings. But when you got to the Trump University example, I have to say that was a very convincing example. Because someone enrolling in Trump University had to be kind of a super Trump fan, like a Trump super delegate in effect. And those people turned on Donald Trump.

CHAIT: Yes, that's exactly right. I think that's a pretty good metaphor for how Trump has conned his fans. And it's a good metaphor for his critics to use and to think about how they're going to go about separating him. But I also think that it's not just a matter of scandals and corruption, but this is I think a way of talking about Trump that ties in his legislative agenda, right? Because it's about making himself rich. It's about making his family and his friends rich. And that's something he is not only doing through his behavior and the way he is running his business, it's a way his cabinet is behaving, the way that they're helping themselves to the public till constantly across the government. And it's what they're doing in Congress, it's the tax bills they're voting on, it's the health care bills, it's the regulation. It's all about protecting their own economic interests.

O'DONNELL: Yes. So your recommendation to Democrats campaigning, as I read it in your article, is forget about Stormy Daniels. The voters always knew that that's Trump's kind of way of behaving. Forget about Robert Mueller's investigation, what will happen will happen and it's too complicated to explain at a campaign rally. But you say Democrats should be saying things like why is Trump giving rich people in corporations a huge tax cut? Why has he been threatening to take away your health insurance? Why is he letting Wall Street and big oil write their own rules?

CHAIT: Yes, and I think these are very simple points to understand. And I think they connect in a very intuitive way with the small scale bits of corruption that in normal administrations are huge stories, right. What was the story about the Pentagon toilet seat that cost $500 or $900, or whatever it was from the '80s. People still talk that, right?

So when the Secretary of Interior spends thousands and thousands of dollars on doors, when Ben Carson orders a $31,000 dining set for HUD, these are very accessible, easy to understand instances that make people understand who the people in government are really looking out for.

O'DONNELL: And you make a point about the Trump Cabinet and the kind of corruption that's been occurring there. You have Scott Pruitt saying that he paid $50 a night to stay in a lobbyist's condo. And by the way, we don't know that he paid that. We haven't seen the canceled checks that say he actually even did pay the $50. But that would be a gift. That would be an illegal gift, according to any reasonable interpretation of it because that was worth a lot more. But you say in here that Donald Trump has exactly the people he wants. He wants people who can stomach the kind of sleaze in business and in his own business dealings while in the White House that Donald Trump has been up to. He doesn't want anybody coming in here with high ethical standards.

CHAIT: That's right. And I think that's the thing you actually have to credit him for being good at. He knows how to talk to people and to read people and find anyone who is really going to put up a moral fuss about his behavior. He drives them away right away. He knows how to sift people out and attract people who are around him for the -- for what Trump considers the wrong reasons or what Trump considers the right reasons and we would say is the wrong reasons. He really is a magnet for greed and venality.

O'DONNELL: And David Cay Johnston also has an accompanying piece to yourself listing almost dollar for dollar everything that has been happening in terms of Trump income during the presidency with a heavy focus on that hotel in Washington.

CHAIT: Yes. The hotel in Washington is a big deal. The international travel is a big deal. And people sometimes forget that Trump made specific promises during the campaign about how he was going to clean all this stuff up. Drain the swamp wasn't just a line. He actually had a program of how he was going get the lobbyists out of government. He was going have these good government reforms. Not only has he not done anything like that, he has gone in the opposite direction, he's got lobbyists crawling through the government. They're just working hand in glove with (inaudible) in a way that that really would have shamed previous presidents.

O'DONNELL: Jonathan Chait, thanks very much for your reporting. Thanks for joining us tonight.

CHAIT: Thank you.

O'DONNELL: And up next, President Trump is always accused of trying to change the subject when bad news is coming his way. It's called the wag the dog phenomenon. And that of course is in honor of Barry Levinson's movie Wag the Dog about a President who was trying to hide from a sex scandal that broke out two weeks before an election. Barry Levinson is going to join us with his perspective on what we're seeing now.



TRUMP: Thank you, everybody. Thank you.

UNIDENTIFIED MALE: Mr. President. Do you have any response to Stormy Daniels?


O'DONNELL: The last words the President heard today as he left that press conference were Stormy Daniels who the President is now suing in Federal Court for violating a confidentiality agreement that she signed two weeks before the presidential election. The film Wag the Dog by Oscar Winning Director Barry Levinson imagined a fictional President hit with a similar sex scandal two weeks before election day. And here is that President's campaign operative, Robert De Niro, coming up with a scheme to distract the public's attention from the president's sex scandal.

CONREAD BREAN, FICTIONAL CHARACTER, WAG THE DOG: Don't worry about it. It's nothing new. During Reagan's administration, 240 marines killed in Beirut. 24 hours later, we invade (Beirut). And hat was their MO, change the story, change the lead. It's not a new concept. Wake me when we touchdown. We'll talk more about it.

WINIFRED AIMES, FICTIONAL CHARACTER, WAG THE DOG: I'm leaving. We can't afford a war.

BREAN: We're not going to have a war. We're going to have the appearance of a war.

AIMES: We cannot afford the appearance of a war.


AIMES: But they would find out.

BREAN: Who's going to find out, the American people?

AIMES: Exactly.

BREAN: Who's going to tell them? What did they find out about the Gulf War? One video of one bomb falls down a chimney blows up the building. The building could have been made out of Legos.


O'DONNELL: Joining us now, Barry Levinson whose new film Paterno staring all Oscar winner Al Pacino is premiering Saturday night on HBO. Barry, when you hear Robert De Niro in that moment of well who's going to tell them. That is the Trump theory of how to deal with the news media.

BARRY LEVINSON, MSNBC CONTRINUTOR: Yeah. You just kept building stories and stories and distractions and distractions as you get further and further away from where the actual subject was.

O'DONNELL: And little did you know when you were doing Wag the Dog how easy it would actually be. I mean Donald Trump doesn't have to invent wars. He just does a tweet to you know insult somebody to change the subject.

LEVINSON: You can just do that or you can which no ever thought to do before just you know lie all the time.

O'DONNELL: Yes, just relentlessly.

LEVINSON: Just lie about it. I'll just say anything I want to say and that will be OK. And if someone criticizes it, that's what's fake. But I'm real and that's fake.

O'DONNELL: What does it feel like when a phrase like Wag the Dog takes on its own life. There are people who use it who don't even where it comes from now because it's old enough. But it's one of those phrases that in politics takes on its own life now.

LEVINSON: Yes, because it's almost 20 years.

O'DONNELL: Yes, yes, by the way, I bring Donald Trump. I want to bridge Donald Trump into your new film about Joe Paterno which is about the big scandal that broke out at Penn State and Jerry Sandusky and what happened there. And here is Donald Trump campaigning in Pittsburgh April 13th, 2016. He thought this was the thing to say there. Let's listen.


TRUMP: I went to school in this state, right? We know that, right? So I know a lot about Pennsylvania and it's great. How's Joe Paterno? Are we going to bring that back, right? How about that whole -- how about that whole deal?


O'DONNELL: It's unclear to me whether he knew then that Joe Paterno had been dead for a few years or whether he was talking about the Joe Paterno Statue at Penn State that had been removed.

LEVINSON: Yeah, well it really doesn't matter.

O'DONNELL: Yes, in his case.

LEVINSON: I'll just say that. How about that? How about that Joe Paterno?

O'DONNELL: Well he seemed to think that there were two sides to what he thinks is the Joe Paterno story which is to say a child molestation story at Penn State. There's two sides of that. And his voters were on the side of Joe Paterno, which by the way we see was a very real thing in the movie at the time the scandal broke. Students at Penn State really protesting any idea of getting rid of Joe Paterno.

LEVINSON: Well, because there was the emotional aspect of it, you know, to those students, he is like a Joe Pa. He was the father. He had been there forever. And the idea that he is now being fired was an emotional reaction of which things went completely haywire in one night. And then there's the rational part of what is Paterno's situation and what did he know, what didn't he know, what should he have done, what didn't he do, and that whole aspect, which is more complex. The riot which is frightening is there is that emotional explosion in one night, which we depict in the film.

O'DONNELL: Yeah, you know, it occurs to me when I was watching it that and I've been wondering about the lives of Matt Lauer, Charlie Rose, Harvey Weinstein, Louis C.K., these people who in an instant their world collapses and they're gone. That kind of happened to Joe Paterno in this story. And this is the first movie after this era, this year where we've seen all these lives collapsed instantaneously. It's the first movie that looks at one of those, completely different context, completely different context. But I felt, so here's a moment backstage in the life of someone whose entire career is collapsing instantaneously.

LEVINSON: Yes. Yes. And the situation is what would have happened if that first, you know, young boy who basically came forward and that wasn't basically covered up by the university and that would have been out and would have been done. There wouldn't have been other boys that had been sexually molested and that would have been the end of it. But trying to cover it up and cover it up and eventually it exploded. And then the culpability of all those and why didn't they do more.

And the complexity of it is you understand the university. You know it's a billion dollar kinds of business you know right in terms what football represents to colleges. But then where does Paterno fit in that because he's the coach of the team. And what did he do or didn't do or could have done? And you're saying here's a man. It wasn't just a coach supposedly who wanted to win games. He believes in education. He graduated 85 percent of his football players. And so he believed in all of those good things and honorable and ethical things. And yet what happened, and that's the I think what (inaudible).

O'DONNELL: It also reminds me of Republicans in Congress in Washington now who know or feel that they should maybe be standing up to Donald Trump, but have not. They say a little something here and there.


O'DONNELL: And that's what you see in the Paterno records. There's a moral obligation that he fails to meet under pressure and we're watching that happening every day in Washington.

LEVINSON: Well, that's what is so terrible in the sense when you think about our Congress. For them to basically stand by and not actively do something, I mean, look, you take Watergate compared to now. There is Republicans and Democrats together in that committee that wanted the truth. You can't even get them to do that nowadays. And you say our entire system is literally coming apart and not doing what it needs to do and not doing the work that they were put in there to take care of, that they basically are not responding to something that is dangerous. Forget in terms of Republican or Democrat. I mean morally, it is reprehensible.

O'DONNELL: Barry Levinson, thank you very much for joining us, really appreciate it.


O'DONNELL: Tonight's Last Word is next.


O'DONNELL: That's tonight's Last Word. Up next the president did not want to let American reporters to ask any questions today in his press conference. And that it has been over a year since the President held an official news conference. One of the NBC reporters in that room today joins Brian Williams, the 11th Hour with Brian Williams starts now.


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