Trump appeals Federal Judge's order. TRANSCRIPT: 5/21/19, The Last Word w/ Lawrence O'Donnell.

Guests: Eric Swalwell, Neera Tanden, Laurence Tribe, Katie Porter, JulianCastro

LAWRENCE O`DONNELL, MSNBC HOST:  Good evening, Rachel. 

And if you really can`t wait to hear the arguments, why don`t you wait a few minutes and hear Harvard lawyer professor Laurence Tribe talk about the arguments we`ve already heard in the case that the president lost and in the case that the president is probably going to lose tomorrow. 

RACHEL MADDOW, MSNBC HOST:  I mean, yes, it`s -- it`s so interesting to me that the lawsuits were almost twins.  Were almost filed like carbon copies of each other but there`s different laws -- there`s different lawyers arguing the two lawsuits.  Obviously, there are two different jurisdictions and what does it mean, what does the pressure got to be for the president`s lawyers who are going to be arguing this thing in federal court tomorrow seeing the way the same argument was just destroyed, lit on fire, and stomped on by that federal judge in D.C. just yesterday?  I mean, the pressure. 

O`DONNELL:  Yes, well, at least they kind of know what the judge is going to say to them. 

MADDOW:  Yes. 

O`DONNELL:  Since they`ve already seen the transcript of the previous proceedings. 

MADDOW:  Yes. 

O`DONNELL:  This is probably going to mirror it in many ways. 

MADDOW:  Yes.  I mean, it`s going to be -- it`s going it be fascinating to see.  This is really -- what we know in the document production that Deutsche Bank had prepared before it was blocked by this lawsuit.  It`s -- it`s the stuff that the president least wants out in in the world. 

O`DONNELL:  Well, we`re lucky enough to have Professor Tribe with us tonight. 

MADDOW:  Great. 

O`DONNELL:  Perfect night for this. 

MADDOW:  Looking forward to it.

O`DONNELL:  Thank you, Rachel.

MADDOW:  Thanks, Lawrence. 

O`DONNELL:  Presidential candidate Julian Castro will join us at the end of the hour tonight.  Not because he`s a presidential candidate, actually because he`s a former secretary of housing and urban development.  That`s important today because it was housing and urban development secretary`s turn today in the Trump administration to show us just how incompetent the Trump cabinet is, and Ben Carson did that in a hearing today where he was questioned by Congresswoman Katie Porter who will also be joining us in this hour. 

We will get former Secretary Julian Castro`s reaction to Ben Carson`s surprising, to put it mildly, testimony today.  And we`ll get Julian Castro`s reaction to the reported death of a 16-year-old boy who was being held in custody by the Trump administration at the southern border. 

But first tonight, the subpoena battle continued today between the president and the House Judiciary Committee.  Committee Chairman Jerry Nadler issued two more subpoenas at the end of the day to former Trump White House staff, Hope Hicks and Annie Donaldson.  Annie Donaldson is a key player here.  She`s a former deputy White House counsel and chief of staff who White House counsel Don McGahn who this morning refused to show up for his hearing at the House Judiciary Committee. 

Don McGahn defied the committee`s subpoena on orders from the president, claiming that the White House staff -- former White House staff are all immune from congressional subpoenas.  In a brief meeting of the judiciary committee this morning with the witness chair empty, Chairman Nadler said this. 

(BEGIN VIDEO CLIP)

REP. JERRY NADLER (D-NY):  Let me be clear: This committee will hear Mr. McGahn`s testimony even if we have to go to court to secure it.  We will not allow the president to prevent the American people from hearing from this witness.  We will not allow the president to block congressional subpoenas, putting himself and his allies above the law.  We will not allow the president to stop this investigation and nothing in these unjustified and unjustifiable legal attacks will stop us from pressing forward with our work on behalf of the American people.  We will hold this president accountable one way or the other. 

(END VIDEO CLIP)

O`DONNELL:  The committee`s subpoena also includes a subpoena for Annie Donaldson`s notes.  Page 86 of volume 2 of the Mueller report tells us why the committee wants to hear from Annie Donaldson and to see her notes.  The report describes the scene on a Saturday in June of 2017 after President Trump twice called Don McGahn to order him to fire special counsel Robert Mueller. 

Quote: McGahn recalled feeling trapped because he did not plan to follow the president`s directives but did not know what he would say the next time the president called.  McGahn decided he had to resign.  He called his personal lawyer and then called his chief of staff Annie Donaldson to inform her of his decision.  He then drove to the office to pack his belongings and submit his resignation letter. 

Donaldson recalled that McGahn told her the president had called and demanded he contact the Department of Justice and that the president wanted him to do something that McGahn did not want to do.  McGahn told Donaldson that the president had called at least twice and in one of the calls asked, have you done it?  McGahn did not tell Donaldson the specifics of the president`s request because he was consciously trying not to involve her in the investigation but Donaldson inferred that the president`s directive was related to the Russia investigation.  Donaldson prepared to resign along with McGahn.

As the president continues to take unprecedented legal steps to try to block testimony to the House Judiciary Committee, according to one member of the committee, most of the Democrats on the House Judiciary Committee now are ready to move to impeachment even if their leadership is not. 

(BEGIN VIDEO CLIP)

REP. STEVE COHEN (D-TN):  The judiciary committee as a whole is for at least an inquiry of impeachment.  It`s been discussed by several members and I don`t think any member -- there might have been two members that were particularly close to Speaker Pelosi that kind of were not on board, but most, I`d say, 80 percent, 90 percent of the committee`s on board to go forward. 

(END VIDEO CLIP)

O`DONNELL:  "Politico" reports Representatives David Cicilline of Rhode Island, Jamie Raskin of Maryland, and Joe Neguse of Colorado, all members of the Democratic leadership, pushed to begin impeachment proceedings during a leadership meeting of Pelosi`s office, said the sources.

Pelosi and Representatives Rosa DeLauro of Connecticut, Ben Ray Lujan of New Mexico, Hakeem Jeffries of New York, and Cheri Bustos of Illinois, some of her key allies, rejected their calls saying Democrats` message is being drowned out by the fight over possibly impeaching Trump. 

Two more Democratic members of the House Judiciary Committee endorsed impeachment proceedings today.  The Judiciary Committee Vice Chair Mary Gay Scanlon said in a statement: The president`s refusal to produce evidence or permit witness testimony defies not only the rule of law but the basic protections of our Constitution.  No one is above the rule of law.  The time has come to start an impeachment inquiry because the American people deserve to know the truth and to have the opportunity to judge the gravity of the evidence and charges leveled against the president. 

Judiciary committee member Jamie Raskin told the "Washington Post", I think overwhelming evidence has been presented to us in the Mueller report and outside of it, too, of high crimes and misdemeanors and we should launch an impeachment inquiries.

Other House members not on the Judiciary Committee are now publicly breaking with the Democrat leadership on impeachment. 

(BEGIN VIDEO CLIP)

REP. ALEXANDRIA OCASIO-CORTEZ (D-NY):  I believe we have come to the time of impeachment.  Think that at a certain point, this is no longer about politics but this is about upholding the rule of law. 

(END VIDEO CLIP)

O`DONNELL:  It has become all the more difficult for the Democratic leadership to contain the momentum for impeachment after Republican Congressman Justin Amash in a dramatic series of tweets over the weekend came out in favor of impeachment, saying in one of those tweets: Mueller`s report reveals that President Trump engaged in specific actions and a pattern of behavior that meet the threshold for impeachment.

Leading off our discussion tonight is Democratic Congressman Eric Swalwell of California.  He is a member of the House Judiciary Committee and House Intelligence Committee.  He is also a Democratic candidate for president. 

Congressman Swalwell, your reaction today to Don McGahn not showing up at the Judiciary Committee, committee issuing more subpoenas while the president continues to fight subpoenas. 

REP. ERIC SWALWELL (D-CA), PRESIDENTIAL CANDIDATE:  Good evening, Lawrence.  I think it`s time empty witness chairs results in empty witness pockets, and we should fine these lawless individuals every single day until they show up.  I think immediately we should move to impeach Attorney General Barr and move to impeach Secretary Mnuchin.  They`re front door obstructers to the information we need to hold the president accountable.

And I`ve certainly not taken off the table impeaching the president.  But those two immediately should be impeached so that we can get the information we need. 

O`DONNELL:  What do you see happening within the Democrats and the House of Representatives?  We see more and more members coming out and calling for direct -- going directly to impeachment now in the House Judiciary Committee.  That was something that virtually no one was doing just a few weeks ago. 

SWALWELL:  You know, we`re frustrated.  Pissed off, frankly, because the rule of law in this country is the main ingredient that holds our democracy together.  It`s like the flower.  It allows free ideas, free markets, freedom to dream, for every person and this president not only defies it, he just puts his middle finger up to it.

And I`ll tell you, Lawrence, no one can question, you know, where I`ve stood against this president since the day the Russians attacked us and the work I did to help us get the majority over two years and electing new members of Congress. 

I`ve tried to show restraint.  I`ve tried to say, well, let`s get the witnesses in.  Let`s get the full Mueller report.  Let`s subpoena these documents and not just jump right to impeachment.

But this president, he`s given us almost no other option than impeaching him and I think that`s a road we`re going down and it`s a frustration that my colleagues and I have. 

O`DONNELL:  You know, I think we saw in the presidential campaign that Donald Trump relies on tradition.  In other words, he relies on other people observing traditions.  He relied on the news media and press to behave a certain way.  He relied on TV interviewers to behave a certain way with presidential candidates and he steam steamrolled right across all of those traditions in ways that benefited himself. 

He seems to be relying on the restraint that you just proudly talked about, demonstrating yourself.  He seemed to be relying on Congress` restraint when it comes to matters of moving to impeachment and his reliance on that means that he probably believes that he can drag out this process so that there can never be impeachment. 

SWALWELL:  That`s absolutely right.  What he does is he brands first and then has everyone catch up because we would have said, you know, years ago when Attorney General Barr said, no collusion, no obstruction, we would have said, well, he better be right if the Mueller report shows otherwise.  And then we all realized, wait, no, this is just the new Trump era where you brand it first and have everyone else catch up. 

I still believe in the rule of law.  I believe that when we turned out in 2018, we defied that Trump concept of just being lawless and the rule of law worked.  We took the majority.  I think ultimately, that`s where we`re going to end up is an impeached Donald Trump.  I`m going to follow the rule of law to get there. 

What I fear, though, Lawrence, I want to tell you, the effect of this is not just a lawless administration.  When you look at what`s happening in Alabama, in Georgia, and Missouri, with women`s rights, it`s not just because they know they may have a court that protects them, they see an administration that doesn`t respect the law anymore so they figure, what the hell, why don`t we just pass a ban on abortion because laws don`t matter in this country?  So you`re seeing this land of lawlessness that this president is leading. 

O`DONNELL:  Congressman Eric Swalwell, thank you very much for leading us off tonight. 

SWALWELL:  My pleasure. 

O`DONNELL:  Really appreciate it. 

And joining our discussion, John Heilemann.  He`s national affairs analyst for NBC News and MSNBC.  He`s co-host and executive producer of show time`s "The Circus."

Also with us, Neera Tanden, president of the Center for American Progress. 

And, John, we have been watching and wondering how long the Democratic leadership`s grip can hold the party together in the House all singing the same tune on impeachment.  That`s over.  That has completely collapsed. 

And now, "The Washington Post" reporting that at the very top, it seems to have collapsed.  This is a report about Steny Hoyer.  They`re quoting Steny Hoyer tonight saying: We are confronting what might be the largest, broadest cover-up in American history, Majority Leader Steny Hoyer told reporters.  If a House inquiry leads to other avenues, including impeachment, the Maryland Democrat said, so be it.

JOHN HEILEMANN, MSNBC NATIONAL AFFAIRS ANALYST:  We can say at this hour a little bit after 10:00 Eastern Daylight Time on this day that the president`s going to get impeached, I think now.  And there`s obviously a large question of what happens after that, what happens in the Senate, but I think we now know that Democratic resistance has crumbled and we saw it happen with astonishing speed. 

I think you rightly pointed out that Justin Amash is going to prove when the history of this is written to have been the trigger, the catalyst.  And people looked at him and said, you know, it`s not bipartisan -- he`s only one Republican, he`s an outlier, he doesn`t matter. 

He mattered a lot and he mattered a very specific way.  He mattered in that he crystallized the question that arose yesterday about 24 hours ago when it became this guy has gone further than the speaker of the House.  This guy has gone further than the House leadership.  How can a Republican be more unequivocal and more clear-eyed about the need to impeach Donald Trump than the whole of the Democratic leadership? 

Once it was formulated that way, Nancy Pelosi`s position, Steny Hoyer`s position, any Democrat who is dragging their feet, that`s what they were doing, they were dragging their feet because they were afraid of the political risks of going after him with impeachment.  All of them started to look foolish and became impossible for Alexandria Ocasio-Cortez to maintain a position to the right of Justin Amash.  Impossible.

O`DONNELL:  She was catching up to Justin Amash today. 

HEILEMANN:  Right, yes, yes.  And that`s not -- 

O`DONNELL:  You know most likely she wanted to be there long before. 

HEILEMANN:  Of course.  Of course.  She didn`t quantity do defy her leader. 

But once that Republican had taken that position, it became politically untenable for someone as powerful as she has become as representative of the progressive wing of the Democratic party as she is, that -- it was not a tenable position for her to continue to be with Nancy Pelosi.  And once she shifted, given the power that she has undoubtedly in terms of social media, in terms of the base of the party, as powerful a Democrat as that is in the House of Representatives right now, once she shifted, it was a sign of a broader shift and you could see Pelosi`s position crumbling in her hands over the course of the last 24 hours.  It`s now gone. 

O`DONNELL:  Neera Tanden, where are we?

NEERA TANDEN, PRESIDENT, CENTER FOR AMERICAN PROGRESS:  I think I -- I would disagree slightly with John.  I think the real question is whether they will start an impeachment inquiry.  I actually listened to Eric Swalwell and others who say I do think there`s a big interest in moving to an impeachment inquiry because there`s an understanding or belief that that will make the arguments to get the materials quicker. 

What`s really frustrating everyone, every single Democrat, is that Democrats won in November to be a check and balance on Donald Trump.  We had a Mueller report that actually found obstruction of justice.  It lays out a pretty compelling case for obstruction of justice.

And what is Donald Trump`s response?  To obstruct the investigation so that there will be no further airing of his obstruction of justice.  And so, I think that is incredibly frustrating to moderates, liberals, and very liberal members of the House. 

So I think the question in front of Nancy Pelosi and she will actually be at the CAP Ideas Conference, I`ll happen to be interviewing her tomorrow.  But I think --

O`DONNELL:  What time, Neera?  What time?  We got to be taking notes. 

TANDEN:  It`s -- might be around 1:00. 

O`DONNELL:  OK. 

TANDEN:  After she meets -- after infrastructure, the infrastructure meeting at the White House. 

I think the central question is an impeachment inquiry at this time, what is the argument against an impeachment inquiry? 

HEILEMANN:  Right. 

TANDEN:  Because, look, I do think they should hear from Mueller.  I do think they should hear from Don McGahn and all the witnesses to make a decision because I think the evidence the -- she`s right that you can build political will for impeachment if we have a full hearing process that seems fair to the American people. 

O`DONNELL:  But, John, the Justin Amash tweets say there is enough information in the Mueller report right now, tonight, to go to impeachment from that report.  You don`t need any more to go to impeachment. 

HEILEMANN:  Neera, I --

O`DONNELL:  By the way, by impeachment he means impeachment hearings, all the people Neera just mentioned would testify. 

HEILEMANN:  Neera and I -- I don`t think Neera and I disagree.  The reality is when I said that the president is going to get impeachment, I think that once you`ve taken the step to start an impeachment proceeding, what Democrat doesn`t believe Donald Trump has obstructed justice?  Neera believes Donald Trump obstructed justice.  She just said it. 

TANDEN:  I agree.  I think he obstructed justice. 

(CROSSTALK)

HEILEMANN:  So, if Donald Trump has obstructed justice and the Mueller report has laid that out, as Justin Amash has pointed out and as every Democrat currently believes, it is now inevitable that if we start an impeachment proceeding, we`re going to end up with impeachment.  How can that not be the outcome? 

O`DONNELL:  Neera --

TANDEN:  I think what she`s --

O`DONNELL:  Go ahead. 

TANDEN:  I think what she`s trying to do here, I obviously could be wrong, but I think the argument or the idea is that political will in the country will grow for impeachment. 

HEILEMANN:  Sure. 

TANDEN:  And it has grown over the last several weeks. 

HEILEMANN:  Sure. 

TANDEN:  It`s not that it`s, you know, it`s not like a 10 percent or 20 percent position, it is growing.  But the political will for impeachment will grow to a majority once you hear the full evidence.  And I think --

O`DONNELL:  Neera --

TANDEN:  I think my own view is that that`s likely. 

O`DONNELL:  As a former campaign -- Democratic campaign operative, yourself, and presidential campaigning --

TANDEN:  Sounds terrible. 

O`DONNELL:  -- what would you -- what would you advise Speaker Pelosi on this impeachment question at this point?  All our reporting indicates, let me take my own, my own reporting dealing with people in Congress indicate that for over a year, Speaker Pelosi has feared the politics of impeachment and she has read those politics as negative for the Democrats, hurting the Democrats in maintaining their victory margin in the House, hurting the Democrats in winning the White House.  And that`s been the primary concern of hers as she approaches this. 

What would you tell her about that? 

TANDEN:  My own view is that there is a fear.  There is a fear that Trump will use impeachment to organize his base, to engender opposition.  I think there are really two things to say to that.  First, what`s really at stake here is the Constitution, and Leader Pelosi has said -- Speaker Pelosi has said before that the Constitution is what should govern. 

It`s very clear that there is a separation of powers and that Congress should have oversight ability over the executive branch and essentially what Trump is doing is trying to stop that.  You have to think through what the issues are and most importantly Democrats were elected on overseeing and offering a check to Trump.  And if they`re stymied by that, I think people will smell weakness and Donald Trump, himself, will smell weakness and become more emboldened. 

O`DONNELL:  Neera Tanden gets the LAST WORD in our opening segment tonight.  Neera Tanden, John Heilemann, thank you both very much for joining us tonight.  Really appreciate it. 

And when we come back, Harvard law professor Laurence Tribe will join us on this night when we really need him as the impeachment war and the subpoena wars continue between President Trump and the House of Representatives. 

Also, former Housing Urban Development Secretary Julian Castro will join us tonight to show us what a Housing and Urban Development secretary is supposed to know after Ben Carson demonstrated something in a House hearing today that we have never seen before from a HUD secretary.  And one of the members of Congress who was questioned today, Katie Porter, will also be joining us. 

(COMMERCIAL BREAK)

O`DONNELL:  President Trump is trying to roll back the tide of history, and that is what a federal judge said yesterday.  The law does not allow president Trump to do, in his opinion are crushing the president`s attempt to block a House oversight committee subpoena to an accounting firm to obtain president Trump`s financial records.  Judge Amit Mehta wrote: This court is not prepared to roll back the tide of history.  The judge said the subpoena must be obeyed and Donald Trump`s lawsuit does raise, quote, serious legal questions. 

Today, the president filed an appeal of that case in the District of Columbia Circuit Court of Appeals where the chief judge is Merrick Garland who was President Obama`s last nominee to the United States Supreme Court, a nomination that Senate Republicans blocked for a year and held the seat open so that President Trump could appoint Neil Gorsuch to the Supreme Court. 

We do not yet know whether Merrick Garland will be one of the three judges on the appeals court panel that will hear the Trump case.  Tomorrow afternoon, a federal judge in Manhattan will hold a hearing on a very similar attempt by the Trump legal team to block House subpoenas directing deutsche bank and Capital One to turn over the president`s banks records. 

To discuss this, joining us now is Laurence Tribe, Harvard law professor of constitutional law.  He is the co-author of "To End A Presidency: The Power of Impeachment."

Professor Tribe, thank you very much for joining us tonight.  Really appreciate it. 

I want to get your reading of this very important case yesterday that seems to possibly be the precedent-setting case, actually, picking up and carrying the precedent that has been with us for many years in into now the enforcement of subpoenas against president Trump. 

LAURENCE TRIBE, CONSTITUTIONAL LAW SCHOLAR:  Well, that decision by Judge Mehta, very carefully written 41-page opinion, that was delivered just seven days after the argument, is on a rocket straight up to the Supreme Court.  There`s no doubt that that decision that he rendered saying that the subpoena to the president`s accounting firm must be obeyed is going to be upheld by the D.C. Circuit.  There`s no serious legal argument to the contrary. 

The only suggestion to the contrary, and I`m boiling it down, was basically it`s none of Congress` business what the president`s business is all about, but, of course, as the judge explained, it is very much the people`s business.  It`s related to legislation that might have to be enacted to enforce the ban on presidential receipt of foreign bribes and emoluments.  It`s related to possible corruption.  It`s related to the Ethics in Government Act.  There`s no basis to deny that subpoena.

And so, the court refused even to say its decision.  When it gets to the Supreme Court, I would expect that all nine justices, and I mean all nine, would follow the law.  This is not a close case.  It`s not rocket science. 

So the president`s attempt to stonewall Congress by preventing those who have the critical financial records from turning them over is going to fail.  Just as I think the president`s attempt to prevent Don McGahn from testifying is going to fail.  It`s only a matter of time, and the president clearly has a plan running out the clock. 

But I think that courts are going to speed up these matters.  The court has held in previous occasions that it`s especially important to move quickly when a whole branch of the United States government is being stonewalled, when subpoenas are being defied, and all of the precedents point to a clear conclusion, the jig is up. 

O`DONNELL:  Professor, I`m surprised to hear you say you expect a unanimous decision by the Supreme Court on this.  I think people out there who have seen Donald Trump get two nominees confirmed are surprised by that. 

If that`s the case, is it possible that this court, if they`re unanimous in that view, that they wouldn`t even hear the case if the president appeals it from the Circuit Court of Appeals? 

TRIBE:  It`s quite possible.  It`s possible that they would just duck.  If the Circuit Court does what any self-respecting Circuit Court would do, and that is affirm this obviously correct decision, they might simply deny, or might put the thing on a very fast track and rule against the president. 

But the reason, it`s not that I`m -- I`m not without my own cynicism.

And I do think that there are a lot of ideologically contentious issues like abortion on which the president`s nominees are likely to do what many people fear they will do, but the reason I don`t think it`s a problem, in this case, is that the law is just slam dunk.

Congress has the power to investigate not only in connection with impeachment but as Judge Mehta said, even when it is not contemplating impeachment, here it plainly is going to be.  Even when it`s not contemplating impeachment, it has a function of finding out what happened, what the truth is, so that it can legislate, make sure that the executive branch, which is supposed to enforce and not defy the laws of the United States, is doing so honestly and not corruptly.

It`s all very clear and very simple.  The only precedent that the government was able to rely on is an 1880 decision that the Supreme Court has since said ought not to be taken without a whole barrel and not just a grain of salt.

It was a decision that said when Congress is investigating just to expose purely personal and private affairs, rather than to carry out its functions, then there`s a limit that can`t be crossed, but that`s not this case.  The government`s interest in knowing about the president`s finances especially after Michael Cohen testified as he did and then pleaded guilty to helping the president cover up hush payments that violated the finance laws and when he testified under oath in a way that certainly didn`t advance his own interest, that the president would overstate his assets and his wealth when it helped him to do that and cheap banks and cheap -- and cheap insurance companies and lenders and understate in other cases, it`s clear that Deutsche Bank is going to have to comply with its subpoena just as the accountants are going to have to comply with theirs.

O`DONNELL:  Professor Laurence Tribe, I think giving a lot of people hope out there that justice is going to prevail even possibly in a unanimous opinion of the Supreme Court.  Professor, thank you very much for joining us tonight.  Really appreciate it.

TRIBE:  Thanks, Lawrence.

O`DONNELL:  And when we come back, Congresswoman Katie Porter did it again, this time questioning Ben Carson in a hearing today.  You have to see it to believe it.  And Katie Porter will be our next guest.

(COMMERCIAL BREAK)

O`DONNELL:  We have some disturbing video of a congressional hearing again tonight that you really need to see because the most incompetent president in history has appointed the most incompetent cabinet in history.  Today, it was Housing and Urban Development Secretary Ben Carson`s turn to show what the Trump cabinet does not know.

(BEGIN VIDEO CLIP)

REP. AYANNA PRESSLEY (D-MA):  Do you believe the substandard public housing conditions pose a risk to tenants` physical, mental, and emotional health?

BEN CARSON, SECRETARY, HOUSE AND URBAN DEVELOPMENT:  You already know the answer to that.

PRESSLEY:  Yes or no?

CARSON:  You know the answer.

PRESSLEY:  Yes or no?  I know the answer.  Do you know the answer?  Yes or no?

CARSON:  Reclaiming my time.

PRESSLEY:  You don`t get to do that.

UNIDENTIFIED FEMALE:  The time belongs to the gentlelady.

(END VIDEO CLIP)

O`DONNELL:  That was freshman Congressman Ayanna Pressley of Massachusetts.  Here is Congresswoman Nydia Velasquez of New York.

(BEGIN VIDEO CLIP)

REP. NYDIA VELASQUEZ (D-NY):  Secretary, do you know how many people are in the waiting list for public housing on Section 8 vouchers?

CARSON:  In your district, you mean?

VELASQUEZ:  No, no, no, nationwide.

CARSON:  There are hundreds of thousands.

VELASQUEZ:  No, there are 4.4 million people, by the way.

(END VIDEO CLIP)

O`DONNELL:  That`s a number he should know.  Secretary Carson`s wild guess is that there are hundreds of thousands of people on the waiting list for public housing in America, but it`s actually 4.4 million.  Ten times more than he thought.

He is supposed to be serving those people, but he does not even know that they exist.  And then came freshman Congresswoman Katie Porter and Secretary Carson literally did not know what she was talking about.

(BEGIN VIDEO CLIP)

REP. KATIE PORTER (D-CA), FINANCIAL SERVICES COMMITTEE:  I`m not asking you what the interest rates.  Sir, I`m asking you about the venture interest curtailment penalties.

CARSON:  Explain.

PORTER:  So FHA uses different servicing and conveyance procedures than the GSEs do.  And the result is this, is that the cost of servicing, mortgage servicing at FHA, for a nonperforming mortgage is three times the cost of doing the equivalent servicing at the GSEs for a nonperforming loan.

That tripling of cost in servicing, which then has the effect of reducing the credit availability to the American people, because when you drive up servicing costs, then servicers overlay with cost overlays and it makes the loans more expensive for the very homeowners that FHA is designed to serve.  So my question I`m trying to drive at here is --

CARSON:  OK.

PORTER:  -- why is FHA, to use a term that I think we can both understand, lousy at servicing mortgages?

CARSON:  OK.  I have not had any discussions about that particular issue but I will look it up, find out what`s going on.

PORTER:  So as you look it up, I`d also like you to get back to me, if you don`t mind, to explain the disparity in REO rates.  Do you know what an REO is?

CARSON:  An Oreo?

PORTER:  R -- no, not an Oreo.  An REO.  R-E-O.  REO.

CARSON:  Real estate --

PORTER:  What`s the O stand for?

CARSON:  The organization.

PORTER:  Owned.  Real estate owned.  That`s what happens when a property goes to foreclosure.

(END VIDEO CLIP)

O`DONNELL:  Joining us now is Congresswoman Katie Porter, Democrat from California.  Congresswoman Porter, thank you very much for joining us tonight.  We really appreciate it.

What was it like to be speaking to the secretary of Housing and Urban Development and basically having to apparently teach him the elementary aspects of his job?

PORTER:  It was disappointing and, frankly, it was frustrating.  Look, these are real people`s lives that he`s supposed to be improving through providing quality housing, and affordable housing, and FHA loans and he doesn`t understand.

And, in fact, he thought it was my job to teach him.  You saw the clip where he told me to explain it to him, which I obliged him, but he also told me that I was welcome to come into HUD and explain everything to him and his staff.

And this is not my job.  It`s his job.  And I really wish he`d take it seriously for the sake of the American people.

O`DONNELL:  Well, we had reports just from him this week that he has illegally spent $8,000 on a dishwasher for his office, $40,000 in China and dishes and different things for a dining room at his office.  And so that clearly demonstrates a real attention to things like that in his office.  But I listen to a lot of the testimony throughout the hearing, not just his answers to you, I couldn`t find anything that the secretary actually knew anything about in what is his jurisdiction.

PORTER:  No, I think he literally gave zero competent answers today.  I think this was -- there is competition for this, as you know.

O`DONNELL:  Yes.

PORTER:  But I think this was the worst performance that I have certainly seen to date in financial services and just incredibly disappointing.  I mean there are people who are facing foreclosure, people who are facing homelessness, people who are on wait lists for low-income housing.

I represent Orange County, California.  And we have a real affordable housing crisis in Coastal California and our HUD secretary has made very clear that the only details he cares about are the details that affect his life, the price and functioning of the $8,000 dishwasher.

O`DONNELL:  What should the HUD secretary be doing for your district?

PORTER:  The HUD secretary should be addressing the affordable housing issues that we`re facing.  So I spent over a decade studying families in foreclosure.

And even in a strong economy like this, even with low rates of unemployment, some families are still going to get in trouble.  They`re going to become disabled.  They`re going to fall behind on their mortgage loans.

He should be making sure that when families fall behind that his agency, FHA, is doing its job of assisting borrowers and helping them get back on their feet to stay in the houses if they can.  And if those houses do have to go to foreclosure, making sure that he`s minimizing the losses to the taxpayers and to the banks and ultimately to the American borrowers in public that FHA is supposed to serve.

O`DONNELL:  Congresswoman Katie Porter, you did it again today.  You certainly take full advantage of your five minutes in those hearings and we`re really grateful that you came to join us again tonight.  Really appreciate it.

PORTER:  Thank you.

O`DONNELL:  And when we come back, a former Housing and Urban Development Secretary and Presidential Candidate, Julian Castro, will join us with his reaction to what he saw in that hearing room today.

(COMMERCIAL BREAK)

O`DONNELL:  Here is the secretary of Housing and Urban Development today, again, refusing to answer a question from Congresswoman Ayanna Pressley.

(BEGIN VIDEO CLIP)

PRESSLEY:  Yes or no?  If left unaddressed, do you believe the substandard public housing conditions pose a risk to tenants` physical, mental, and emotional health?  If left unaddressed.

CARSON:  Yes or no, can you ask me some questions, yourself --

PRESSLEY:  You don`t get to dictate what my line of questioning is.  Reclaiming my time.

(END VIDEO CLIP)

O`DONNELL:  Joining our discussion now, former Secretary of Housing and Urban Development, Julian Castro.  He is also a former mayor of San Antonio, Texas, and he`s now a Democratic candidate for president.

And, Secretary Castro, I want to first of all just speak to you in your former capacity as a secretary of Housing and Urban Development and get your reaction to what we saw in that hearing today and what it means for the Department of Housing and Urban Development.

JULIAN CASTRO, 2020 PRESIDENTIAL CANDIDATE:  Well, it`s a classic case of, you know, it would be funny if it weren`t so sad because as you pointed out, and Representative Katie Porter and others pointed out today, there are 4.4 million people who are waiting for housing assistance, who are not being served who need it.

At the same time, the Trump administration proposed over a 16 percent cut to HUD`s budget that already is only serving one out of every four Americans who qualify for housing assistance.  And on top of that, you add the performance that we saw today which is really a window into the fact that Secretary Carson, two and a half years into his term doesn`t have any kind of command over some of the basic things about HUD.

And, you know, the picture that it paints is an administration that doesn`t care, leadership at the agency that`s not committed to the mission or at least not committed enough to even try to understand it.  And so, you know, we can`t change this administration out soon enough when it comes to meeting the housing needs of Americans out there.

O`DONNELL:  You said today that as president, you will appoint judges who unequivocally recognize the precedent set by Roe V. Wade, and a cabinet, a cabinet that`s entirely pro-choice.  What, for example, what difference would it make if the secretary of Housing and Urban Development is pro- choice?

CASTRO:  Well, I think it`s about folks who have progressive values and we did a whole bunch of things to work with.  For instance, the Department of Health and Human Services on the link between health care and housing.  We expanded things like the equal access rule which afforded protections to the LGBTQ community.

So all of that his is to say that there are a lot of intersections that happen between the work that HUD does, the work that Health and Human Services does, the work a whole bunch of agencies do that isn`t directly obvious from their name.  And I believe that we ought to appoint people who have progressive values including to stand up and defend a woman`s right to choose which is clearly under attack from what we`ve seen lately in Alabama, in Missouri, in Georgia.

O`DONNELL:  I want to get your view as a presidential candidate of our lead story of the night which is now what is becoming a developing story within the House of Representatives of every day, almost every hour now, another Democrat coming out saying that the Democrats supports moving straight to impeachment.  The leadership isn`t there yet.  Where are you on impeachment?

CASTRO:  I said very early on, Lawrence, that I think that this president should be impeached.  The Mueller report, as you know, and your audience knows listed 10 different instances where the president either obstructed justice or tried to obstruct justice.

And Congress has said, the leadership has said, that they`re going to subpoena Bob Mueller, that they`re going to do further inquiry.  Obviously, the administration is stonewalling the committees on information that it needs to do that inquiry.

But at the end of the day, I think what they`re going to get back to is those 10 instances that Mueller pointed out.  And on top of that, you add the stonewalling.  I believe that this president should be impeached and that it`s a mistake not the move forward with impeachment.

And I imagine that some folks think that it might be a political error to go forward and try to impeach the president because it`s going to go over to the Senate and probably Mitch McConnell will just let it die and so he may not actually get removed from office.

But at the same time, I believe that the message that you send if you don`t impeach this president is that he has a clean bill of health and when election time comes, that nothing was wrong.  He`s going to say, you know what, if there had been a problem, don`t you think that these folks would have impeached me?  And when they didn`t, they didn`t because I didn`t do anything wrong and they even knew that I didn`t do anything wrong.

And that couldn`t be further from the truth.  They need to stand up for the rule of law and show the American people that nobody, including and really especially the president of the United States, nobody is above the law.

O`DONNELL:  I want to change the subject to an urgent issue in immigration but we also have a commercial break structure to deal with here.  Can you stay with us across a commercial break?

CASTRO:  Sure.

O`DONNELL:  That way, we won`t be interrupted.  It will be our final commercial break.  And I want to talk to you about this report of the 16- year-old boy who died in the custody of the Trump administration at the southern border.

We`ll do that after this commercial break.  We`ll be right back.

(COMMERCIAL BREAK)

O`DONNELL:  And we have breaking news at this hour on the border wall funding.  Congress appropriated $1.5 billion last year for border fence construction on the southern border and that money has been used in full to build 1.7 miles of that fence.  That`s almost a billion dollars per mile.

And Presidential Candidate Julian Castro is back with us.  And Julian Castro, that is now what we`re seeing as the cost of the Trump wall, just about a billion dollars a mile.  They have built 1.7 miles at $1.57 billion.

CASTRO:  Can you imagine what a waste of money?  What a waste of money.  I`ll tell you, if you want to better spend the money and be more effective, we could really get to the root cause of why 92,000 people last month came to the southern border and invest basically in the 21st Century marshal plan for Central America.

All those folks are coming to the United States border because they can`t find safety and opportunity in their home country.  So if we really want to get to the root because of the problem, what we need to do is partner in a mutually beneficial way with Honduras, with El Salvador, with Guatemala so that people can find safety and opportunity there instead of trying to come here to find it.  And that would be more effective and cheaper than this border wall.

O`DONNELL:  I just want to get a word from you before we go about yesterday`s 16-year-old Carlos Vasquez as the fifth migrant child to die in U.S. custody at the southern border in the last six months.  Your reaction to that.

CASTRO:  Well, that it`s sad, that our prayers go out to his family, that it`s another example that this administration does not really have regard for this human life.  And if my memory serves me correctly, Lawrence, it had been since -- well, since December, there have been five migrant children ranging from the 16-year-old to a two-and-a-half-year-old just recently who passed away in U.S. custody.

It had been 10 years since that had happened and it`s happened five times since December.  That`s how terrible and incompetent this administration is when it comes to what`s happening at our border.

O`DONNELL:  It`s also in a report that the Trump administration has now identified about 1,700, 1,712 children that it did not previously know that it had separated from their parents.  So that`s in addition to the 2,800 that they already knew about.

CASTRO:  I would just say that folks out there should not ever fall into the trap that this president wants us to fall into of believing that in order to have a secure border that we need to choose this cruelty over compassion and over the best ideals of this country.  I believe we have a border that is more secure than it`s ever been.

We have 654 miles of fencing, thousands of personnel.  We have boats.  We have planes.  We have security cameras.  We have helicopters.

We can maintain its security. But we don`t need to separate little children from their parents.  We don`t need to put people in cages.  We don`t need to have five children die in a few months under our watch.  We can do better than that.

LAWRENCE O`DONNELL, MSNBC ANCHOR:  Julian Castro gets tonight`s LAST WORD.  And thank you very much for joining us tonight, I really appreciate it.

CASTRO:  Thanks a lot.

O`DONNELL:  "THE 11TH HOUR" with Brian Williams starts now.

  THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END