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Shepard Smith leaves Fox News. TRANSCRIPT: 10/11/19, The Last Word w/ Lawrence O'Donnell.

Guests: Michael McFaul, Evelyn Farkas, Joshua Geltzer, Michael Schmidt,Julia Ainsley, Jonathan Alter, Jennifer Rubin, Gabe Sherman


RACHEL MADDOW, MSNBC HOST:  In the last couple of minutes since we have been on the air, we just got a new report from the "New York Times." In looking it at one way, this is our fourth report I think that the president`s attorney, Rudy Giuliani, is under some kind of criminal investigation for his work in Ukraine.

CNN was first to report that then ABC and Bloomberg had similar reports. All of those reports have tied the reported investigation into Giuliani to the arrest and indictments yesterday of these two people he`s been working on -- been working with. They were arrested on campaign finance related charges.

But "Times" tonight adds a new wrinkle. The headline is "Giuliani Is Said to Be Under Investigation for Ukraine Work." But in the description is specific. Prosecutors are investigating whether the president`s lawyer broke laws meant to prevent covert foreign influence on the government.

That would imply that Rudy Giuliani is under investigation not necessarily or in addition to campaign finance related charges, but also for lobbying laws and potentially foreign agent laws when it comes to this work he`s been doing in Ukraine.

The news is still poring in this late on a Friday night. I`m telling you, this weekend is going to be like the last couple of weekends. No rest for the wicked. That does it for us tonight, at least for now. See you again soon. Now it`s time for the "Last Word." Ari Melber is in for Lawrence tonight. Good evening, Ari.

ARI MELBER, MSNBC HOST:  Good evening, Rachel. One question before you go, also lovely to see you in my home town of Seattle. I hope everyone is treating you great.

MADDOW:  It`s great.

MELBER:  You look at this and one line that jumps out in this brand new "New York Times" story is it says Mr. Giuliani finds himself under scrutiny from the same U.S. Attorney`s office he led in the 1980s where he rose to prominence as a "tough on crime prosecutor."

And as you just pointed out, it appears that there`s more that one statute that he`s up against. And so I guess the question becomes given that great knowledge, is that something he probably completely disregarded or hurts him because he ought to know better?

MADDOW:  Well, I mean, I think people who have followed Rudy Giuliani`s career have seen it as a sort of bifurcated or trifurcated thing. When he was a New York prosecutor and New York mayor, you could sort of define him in one way and see his actions if you didn`t agree with him or if you did. They`re at least rationally connected.

Then he went through the period in which he became a national Republican political figure. And now he`s this new thing. And there doesn`t seem to be much of a connection between his behavior now and his life starting as a prosecutor. I don`t know.

I mean, this is a very dramatic turn it in his biography, but it almost seems like the obvious next step in this impeachment inquiry. If the guys he was working with have been arrested now on conspiracy charges and if he has been admitting publicly that he`s been doing work in Ukraine to try to, I mean, he`s walked and talked himself into this.

It will be remarkable to see the former U.S. attorney from the Southern District of New York get indicted by the Southern District of New York, but it does feel like that`s where we`re going.

MELBER:  Yes. If that`s what happens, it`s extraordinary. You mentioned Michael Schmidt breaking the story. I`m lucky to say we have him live phoning it at this hour, which I know you didn`t know yet because we just figured that out.

Rachel, I know you had a very long and busy week and I know you`re busy out there. Everyone should check out the book and have a great time in Seattle.

MADDOW:  Thanks a lot. I appreciate it.

MELBER:  Absolutely. Have a great weekend. It is Friday night. There is this breaking news out of the White House which is topping what has been a busy day of surprises in the impeachment inquiry of President Trump where Rachel was just mentioning and what we`re going to report on with this "New York Times" story crossing the wire here late Friday night.

So we have all of that, but this whole day really began with a live drama of whether the former ambassador to Ukraine would testify before these House committees today. Marie Yovanovitch did show up flanked by her attorney and tonight, we`ll report on what she said including why the Trump administration tried and, yes, failed to silence her.

This week also just ended today late in the afternoon with live drama on Fox News -- the surprise announcement from Shepard Smith that after 23 years today was his last show. Smith saying he asked to leave, but his departure comes after this public feud with Tucker Carlson and with Donald Trump himself attacking the same network over at least some of their coverage.

Then Trump was shouting out certain anchors by name, not Smith, at his first rally since the whole Ukraine scandal broke. And Gabe Sherman, who`s a deeply sourced journalist inside looking at Fox News, he`s here tonight with his reporting on that including the questions about the timing with Attorney General Barr meeting the head of the entire Fox News corporate parent on Wednesday.

So, we have lot to get to tonight when we talk about big stories this week. But we begin with this story, another diplomat breaking their silence, the ambassador, in the growing Ukraine scandal detailing today an unflinching indictment of President Trump and a devastating portrayal of what she described as Donald Trump`s very provable diplomatic and national security failings.

This being detailed from someone inside the administration, first-hand knowledge. Marie Yovanovitch is the former ambassador of Ukraine and you saw her later today, walking in to give a deposition to these House impeachment investigators for what turned out to be a very detailed over nine-hour session -- a deposition the Trump administration tried and failed to block.

And here, simply put, is how Democratic Congressman Denny Heck described what he heard from her right after walking out of that deposition today.


REP. DENNY HECK (D-WA):  I just sat through eight hours that went like a New York second. Well, it was that amazing, that powerful, that impactful, and I just feel very fortunate to have been there.


MELBER:  Fortunate to bear witness to that. Now, we don`t have all eight hours of transcripts in the newsroom, but we do have our opening statement which says she was incredulous, "The U.S. government -- that`s the Trump administration -- chose to remove an ambassador based, as best as she can tell, "unfounded and false claims by people with clearly questionable motives."

That is a reference to the man who as of 10 minutes ago the "New York Times" says is under investigation by the New York feds, Rudy Giuliani and his allies who were trying to make money profiting off U.S. foreign policy.

Back to the ambassador, she says in this written statement, "Individuals who have been named as contacts of Giuliani may well have believed that their personal and financial were stymied by our anti-corruption policy in Ukraine."

Yovanovitch said that she was forced to leave Kiev the very next plane when she got these orders this spring and the State Department`s number two told her although she had done nothing wrong -- this is her account -- the president had simply lost confidence in her, "He added that there had been a concerted campaign against me and that the Department had been under pressure fro the president to remove me since the summer of 2018.

Yovanovitch was name checked by the president on the now infamous phone call with the president of Ukraine, which is the heart of the impeachment matter. The president had said then that it was, "bad news and the people that she was dealing with in Ukraine were also bad news, so I just wanted to let you know that."

Think about this very simply. Trump was expressing that view in what he thought in that moment was a private secret call that would remain secret like most of those high-level foreign calls.

He couldn`t have known that it would soon leak or that it would tip off the impeachment probe to a new height or that she would know what he said and strike back today speaking to this Congress and these investigators considering the impeachment of Donald Trump.

But that is what happened. That`s what she did today. And she said, "Our efforts were intended and evidently succeeded in thwarting corrupt interest in Ukraine, who fought back by selling baseless conspiracy theories to anyone who would listen. Sadly, someone was listening, and our nation is the worse off for that."

I`m just going to pause to tell you, when public servants speak like that in a public forum, they are taking a risk. They are writing off their most recent boss and recommendation and everything else from the Trump administration.

But like other whistleblowers and other officials, there is clearly something they`re trying to tell us tonight. And late this afternoon we also learned that Ms. Yovanovitch had to be subpoenaed in order to even get that stark assessment out to the public.

She`s balancing between the orders she gets from the government and then another part of the government, the administration and the Congress. So the House chairs on the Democratic side said, "The State Department at the direction of the Trump White House directed her not to appear and thus, the House Intelligence Committee issued a subpoena to compel her testimony this morning.

And next week, these committees have a string of high profile officials scheduled to give depositions that includes the Trump Russia advisor, Fiona Hill. NBC reporting she plans to tell Congress Giuliani and E.U. Ambassador Sondland circumvented the National Security Council and White House process to pursue a "shadow policy on Ukraine."

A familiar source tells NBC and that E.U. ambassador, Mr. Sondland, the one who spoke to Trump after being told by a diplomat that their whole plot was "crazy" and that withholding security assistance from Ukraine to go after the Bidens was "crazy."

Well, he also plans to testify next week in defiance of those initial Trump efforts to silence him. That`s a lot coming down the pike. And there`s more. Intelligence Committee Chair Adam Schiff writing to colleagues tonight -- I`ll put it up on the screen so you exactly what the news is.

He says, he will be expecting to announce new testimony from the relevant witnesses in the coming days and prepared to compel testimony through dually authorized subpoenas as appropriate. Here he was right after today`s deposition.


REP. ADAM SCHIFF (D-CA):  I also want to express my appreciation for not just what a great champion she was over the rule of law in Ukraine, but also the respect she has for the rule of law here at home, and her willingness, when served with compulsory process, to follow the law and testify. And I think she is a courageous example for others and I think all the members were extraordinarily impressed with her testimony today.


MELBER:  Let`s get right to it. On breaking news Friday night, former U.S. Ambassador of Russia, Michael McFaul, joins me. He has actually known Ms. Yovanovitch for 30 years. Evelyn Farkas, who was Deputy Assistant Secretary of Defense in the Obama Administration. Evelyn and Ambassador McFaul are both National Security analysts here for us.

And also joining us tonight, Joshua Geltzer, former senior director for counter-terror at the National Security Council. He`s also the executive director of the Institute for Constitutional Advocacy and Protection.

Ambassador, McFaul, what does it mean to hear so starkly from this former ambassador today and what does it mean to have her point her finger in a measured way, but nonetheless point her finger at Giuliani and his associates when we`re learning from the "New York Times" moments ago that he also is under criminal scrutiny?

MICHAEL MCFAUL, FORMER U.S. AMBASSADOR TO RUSSIA:  Well, first I just want to underscore what you said earlier, Ari. We`ve only seen her prepared testimony, right? We have not heard the nine hours of what she revealed today in that setting. But the prepared text, I just urge all of your viewers to go and read it.

It is profound. It is shocking. She is saying very bluntly that I was trying to do my job as a U.S. official. I took an oath of office to the United States of America. And other private people and Mr. Giuliani, first and foremost, were trying to interfere into the diplomatic work that she was trying to do. It`s just very clear, very blunt, very diplomatic, but I was really shocked at what was in that statement.

MELBER:  Evelyn.

EVELYN FARKAS, FORMER DEPUTY ASSISTANT, SECRETARY OF DEFENSE:  Yes. I mean I agree 100 percent with what Mike just said. I found it not shocking so much because we`ve gotten so much from the whistleblower and from the transcript of the phone conversation.

And there were a lot of whispers about the fact that Ambassador Yovanovitch was essentially pushed out because she was standing up against corruption in Ukraine.

What we didn`t know, those of us who follow Ukraine, is this other back story of the fact there were these rogue Americans who were trying to influence Ukrainian policy and working essentially behind her back or in front of her, but, you know, not paying any heed to her so making her ineffective and also breaking the law.

So, I mean, she`s a courageous person. She`s a straight arrow. I also worked with her in the administration and then afterwards when I was a think tanker and consultant traveling to Ukraine when she was ambassador.

She`s a straight arrow. She`s very well respected. The good thing about her I think is because she`s so senior she really has the strength of the whole Foreign Service behind her. You know, that bureaucracy has a very strong union almost in terms of how they handle personnel issues.

So I think that helps in contrast to for example Andrew McCabe and the Department of Justice where he really turned out to have really lost when he came forward and tried to confront his organization.

MELBER:  I want to play for you what we`re hearing from the president who isn`t known to have the deepest grasp of every, you know, public official, every ambassador (inaudible) country, but has certainly drilled down on Ukraine as a matter of interest and was criticizing this very person. Take a look.


UNIDENTIFIED FEMALE:  Why did you recall the U.S. Ambassador to Ukraine? Was she a problem? Why did you recall her?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  I heard very bad things about her and I don`t know if I recalled or somebody recalled her, but I heard very, very bad things about her for a long period of time. Not good.


MELBER:  Evelyn?

FARKAS:  Well, again, I mean we know now from the transcript that he was relaying things that he -- and from the whistleblower, that he was relaying basically gossip that he had heard from Giuliani.

And I think the other thing that Ambassador Yovanovitch makes very clear in her testimony if you read it, is that you have to understand what`s happening in Ukraine. There are all kinds of factions and I can know Mike McFaul knows this very well, Ambassador McFaul.

You know, there are all kinds of factions inside Ukraine. They were using Giuliani as much as he was trying to use them and she understood who the good guys were and who the bad guys were and the people who were trying to throw dirt on Joe Biden were not good guys.

MELBER:  josh?

JOSHUA GELTZER, FORMER SENIOR DIRECTOR FOR COUNTERTERRORISM, NATIONAL SECURITY COUNCIL:  What President Trump calls bad things most of us would regard as good things. That`s what our former ambassador was doing there as her testimony today, at least the part of it we`ve been able to read makes clear.

She was trying to do what any U.S. ambassador should do, which is push a country away from corruption. And the irony is, while Trump has claimed that his dealings with the Ukraine has been his efforts to rid out corruption, in fact, it was his lawyer, Rudy Giuliani, who was injecting corruption into the system.

MELBER:  And Evelyn, when you look at all these together, do you see this as Donald Trump`s impeachment stonewall strategy loosing out? I mean, we`re talking about diplomats and other types who are known for their discretion, who might want to speak and at times, disagree with the advice not to speak or the request not to but they honor it. There`s something different happening here when we see what is now failings of officials planning to speak out.

FARKAS:  Yes, 100 percent Ari because before, the people that they were preventing from going to testify in the Mueller investigation instance were Don McGahn, a guy who really didn`t want to come forward and be a whistleblower and didn`t want to testify.

So he chose to pretend that this White House ban on him testifying was something real and legal and he hasn`t come forward, right? And some of the other folks that they said that they were going to subpoena and I don`t know, some of these things maybe even tied up in the courts, they agreed to pretend that the White House could block them.

And what the ambassador did today, what Ambassador Yovanovitch did today was to prove that that`s all a bunch of hot air. If you want to testify, even if you are still working for the U.S. government, you can.

MELBER:  So Ambassador McFaul, when you take this together, the way that the actual Ukraine issue is shifting, at a certain point if we just simplify it, there`s a lot of names, there`s a lot of details to it. Is this a scandal that started out looking like an international Watergate but now also has some elements of Iran Contra?

MCFAUL:  Those are hard dots for me to connect. I just want to -- but I do think it`s really important to keep it simple. What was happening here --

MELBER:  Well, let me follow up and then let you go. The dots being that the Biden stuff is just abusive power for electioneering in a debate over whether that happened.

MCFAUL:  Right.

MELBER:  But if there`s a broader national security intrigue, it might be both worse and that it would involve a lot of other people being pressed to do things that are not part of the National Security process as it is supposed to work,

But also gets very convoluted and complex if people say, well, the fact that Giuliani`s buddies wanted something that people in Ukraine also wanted, doesn`t meant it was automatically contra U.S. interest. Maybe they just agreed there`s a lot of money that splashes around international foreign policy. Unpack for us where these lines are.

MCFAUL:  So, I think at the base, Giuliani was trying to help one of his clients, the president of the United States, to dig up dirt on his electoral opponent, Joe Biden and his son, and he brought in a couple of other free agents, these two guys that have just been arrested.

And the quid pro quo for getting their help was some other financial interest that those two gentlemen, Mr. Fruman and Mr. Parnas had. And so you have this mixing of both the electoral private interest of the president and possibly, I just want to say we need to know the facts, but possibly the private economic interests of those guys and all of it is not in the American national interests.

MELBER:  Well that`s one clear way to put it and much appreciated. Ambassador McFaul, Evelyn Farkas, and Joshua Geltzer, I want to thank each of you. And because of the breaking news, we`re going to keep going right now. No breaks.

We have the "New York Times" with a late Friday night story reporting, "Federal prosecutors of Manhattan are investigating whether Trump`s personal lawyer, Rudy Giuliano, broke lobbying laws in his dealings with Ukraine." That`s according to two people familiar with the inquiry.

"New York Times" says investigators are examining Giuliani`s efforts to undermine the American ambassador, Marie Yovanovitch, who we`ve just been discussing, that`s according to one of the "Times" sources.

As I was discussing with Rachel moments ago, we are now joined by the "New York Times" reporter who broke the story, Michael Schmidt, Washington correspondent. Thanks for jumping on the line.


MELBER:  What it did you find?

SCHMIDT:  Well, basically the same office that Giuliani led and helped, you know, make him rise to prominence in the `80s is looking at his conduct in connection with Ukraine, whether he was properly lobbying and had properly registered to do that.

And how were -- what was behind his efforts to oust the United States ambassador in Kiev? Was it simply because he was trying to root out corruption or was he doing that on behalf of Ukraine who wanted her out? What was it that was behind it?

MELBER:  And the quotes you have from Mr. Giuliani tonight here, these are new responses to your reporting. Is that correct?

SCNIDT (via telephone):  Correct.

MELBER:  Let me read this for the viewers and then get your analysis, Michael. So, you`ve got this real blockbuster story that Rudy Giuliani is under criminal investigation by the very office you say he used to run.

You reached Giuliani and he tells you, the "New York Times," "You could try to contort it into anything, but if they have any degree of objectivity or fairness, it would be ridiculous to say I was doing it on Lutsenko`s behalf when I was representing the president of the United States.

Explain to me what that means in the context of what you`ve learned about this investigation and your understanding of what kind of defense that is.

SCHMIDT (via telephone):  Well, I`m not sure what it means. I think what he`s trying to say that he was acting on the president`s behalf to try and get information that would help clear the president`s name. Remember, Giuliani heads down this sort of Ukraine rabbit hole in an effort to clear Trump`s name.

He thinks it has been sullied by the Mueller report, by the investigations of Michael Cohen, and this is the only way that he could sort of help Trump coming into 2020. It`s to go to Ukraine and to find things that would help him.

And he thought that perhaps this ambassador was something that was standing in the way of rooting out that corruption and it ties back in, obviously, to the call the president had with the Ukrainian president in July where he`s asking for those types of investigations.

Giuliani was frustrated with the ambassador and thought the ambassador was sort of stopping or not doing enough to help move the Ukraine forward on it.

MELBER:  Michael, you have covered a lot of sensitive criminal congressional investigations in the Trump era, which some would note is a target rich environment. I`m curious based on what you can tell us or what you do know what kind of case this looks like to you.

Does this look like a complex multi-year case or does this look like something where the New York Feds have just arrested Giuliani`s associates. They have a fact pattern that also overlaps with the congressional impeachment inquiry and they might move swiftly one way or the other?

SCHMIDT (via telephone):  We`re not sure but I think what has gone on here is that Giuliani really hasn`t hidden a lot of his work. He`s sort of been open about it. He goes on television and talks about it. He talks to newspapers about it. He tries to put different documents out about it.

And if you talk to those folks that are experts in the lobbying laws and the foreign lobbying laws, they have sort of looked at this and said, you know, this doesn`t make sense.

And the fact that Giuliani put all this out there, my guess, has hade it easier for the investigators as they try to understand what he has done. He has really been an open book on this and he believes he`s done nothing wrong and believes that, you know, this is the best way to try and help Trump coming into 2020.

MELBER:  Yes. Michael, I mean, if what you`re saying is you`re reporting on the case, suggests that Mr. Giuliani`s public incriminating statements, at least according to the Feds and his statements on television have hurt him, then I guess this is a classic situation of like president, like client.

Two individual whose have certainly drawn attention with public admissions. I know it`s a busy night for your, busy Friday. Michael Schmidt from "New York Times," thanks for jumping on the line, sir.

SCHMIDT (via telephone):  Thanks for having me.

MELBER:  Appreciate it and appreciate the reporting. And we`re going to keep on going with context. Jonathan Alter, a columnist for "The Daily Beast" and MSNBC analyst right here for us. And Jennifer Rubin, opinion writer at the "Washington Post," also an MSNBC contributor.

Good evening to both of you. We`re digging deeper into this story from the "Times" which is different than what we though a few hours ago when we had drama. It`s that kind of Friday night. Jennifer, your reaction to the story?

JENNIFER RUBIN, MSNBC CONTRIBUTOR:  It is the ultimate fall from grace, that the guy who is tough on law prosecutor and the tough on criminals sort of mayor, is now himself being investigated by the Southern District. The irony, if you will, cannot be lost.

It is also the case that Giuliani is now caught in this web of schemes he has sort of created and both gotten involved in. On one hand, he is trying to find evidence for this crack pot theory that Trump was really done in by the Ukrainians.

It was they who were investigating and looking to make trouble in 2016, not the Russians, for which there is no support whatsoever. Plus, whatever he thinks that is out there about Hunter Biden, again, nothing out there.

But as he is doing this, he`s also seems to be playing the game going the other direction with these two associates that were arrested. Part of what they`re being arrested for, what they`re being accused of is that they are funneling money back to an American politician, a congressman from Texas.

And that somehow on the rebound, they`re going to get rid of this ambassador.

MELBER:  And the Trump pack.

RUBIN:  Exactly. So, this is getting to be an extremely complex web but it doesn`t really make any sense to say that Trump was directing him in all of his dealings. Trump only had one part -- one interest in one part of that.

MELBER:  And I might add, if Michael Cohen`s precedent is any indication, it`s not clear that defense will hold. A presidential defense requires the president still staying on board with it, and there isn`t that dual loyalty that we`ve seen much.

And that brings me to whether Giuliani will continue to be out as public and televised advocate for the president. Today or earlier today, the president famously saying he wasn`t sure Rudy is his lawyer.

I`ll note the new Schmidt story that we just got from the "Times," has Giuliani asserting that he believes he is still his lawyer. They`re not 100 percent agreement on that.

But I did speak just earlier this week, Jennifer, to someone who is undoubtedly the president`s lawyer, that`s Jay Sekulow. And we went back and forth as these interviews do, but the time when he gave the most ground seem to come in anything revolving around what Giuliani was up to, which was interesting and actually, I think, might be even more interesting tonight. Take a look


JAY SEKULOW, LAWYER OF PRESIDENT TRUMP:  It was out of my jurisdiction. It wasn`t anything I was engaged in.

MELBER:  When did you learn that Rudy Giuliani was asking these foreign governments to investigate Joe Biden?

SEKULOW:  You know, I learned when -- I guess when you did because I was not involved -- that was not in my jurisdiction --

MELBER:  Well, you don`t know when I did.

SEKULOW:  -- I was focusing on the --

MELBER:  I`m asking when you knew. You don`t know when I learned it.

SEKULOW:  Well, I didn`t know anything about it until all this got really public. I mean, I didn`t know any of this Dubai --

MELBER:  You learned about it when it spilled into the public reporting?



MELBER:  Jennifer and then Jonathan?

RUBIN:  These people are really rotten in answering questions that they don`t want to answer. You need to get rid of the pauses and the blinking eye lashes. I think what they are doing is the proverbial throwing Rudy under the bus.

Pompeo has an interest in separating himself from Rudy. The president has a motive for separating himself Rudy. Sekulow has motive for separating himself from Rudy. Bill Barr does. And if it`s all of those people saying, hey, I don`t know what he was doing out there, then the primary defense which he`s throwing out which is I was doing this all for the president seems to kind of go away. And this sounds like he`s being kicked to the curb.

MELBER:  Jonathan?

JONATHAN ALTER, MSNBC ANALYST:  Well, Rudy is thrown under the bus by Donald Trump. Stop the presses, you know. This is the kind of behavior that we have expected from Donald Trump for a long time.

But I think what`s changed tonight, Ari, is the involvement of Geoffrey Berman. Now, this is a name a lot of Americans don`t know. He is the U.S. Attorney for the Southern District of New York. He is the one who had these two side kicks arrested yesterday and has launched an investigation of Rudy Giuliani.

He was not stopped from doing that by his boss, Bill Barr, which suggests that Barr recognizes that he has some jeopardy to. If he would intervene to stop this investigation, he would have a problem.

So Berman now has free reign, and what that means is that we now have a parallel investigation for the impeachment investigation. This whole matter is now the subject of a criminal investigation. And so --

MELBER:  Translation, Jonathan. I think you`re underscoring an important point, which is a lot of times people define this by is there a special counsel or not.

ALTER:  Right.

MELBER:  The special counsel has the same powers as a U.S. Attorney.

ALTER:  That`s correct.

MELBER:  You`re saying Mr. Berman is here and so in some ways you`re saying this is as intense or more so than Mueller?

ALTER:  It is very similar to Mueller except that he has a permanent staff of crack investigators. This is the most prestigious U.S. Attorney`s office in the country. And it was icing on the cake for Democrats who had a very good day today because there were a lot of court decisions that were very harmful to President Trump.

MELBER:  A lot here. We`ve been in breaking mode. We haven`t had a single break in the hour since I got the toss from Rachel. I have to fit one in and I want to thank Jonathan and Jennifer so much for the expertise.

After this quick break, more breaking news. There is a new member of the president`s cabinet out tonight. We`ll tell you who and what it means as well as more on this breaking Giuliani story right when we come back.


MELBER: More breaking news tonight. President Trump announcing on Twitter that the Acting Homeland Security Secretary, Kevin McAleenan, has resigned. He took over the department after Kirstjen Nielsen was forced out in April and has a difficult relationship with Trump over the immigration policy of the administration.

Now, on Monday, he walked off stage during a speech on immigration at Georgetown University after protesters had drowned him out with chants of "immigrants are under attack." Last week, McAleenan also told The Washington Post his concerns about what he called the tone, the message, the public face and approach of immigration policy widely seen as an indictment of the way the President does those things.

Now, given this is a breaking story, I`m joined also by phone by Julia Ainsley, National Security and Justice Correspondent for NBC News. Thanks for hopping on the line.


MELBER: Yes. What happened here?

AINSLEY: So we understand that McAleenan resigned. He was not necessarily forced out of it. But the writing had been on the wall for him for a little while. It was widely known that Ken Cuccinelli who is now the acting head of U.S. Citizenship and Immigration Services is thought to be kind of auditioning for this job as DHS Secretary.

He`s someone who is much more vocal, much more in line with the President and Stephen Miller`s thinking, does not hold back on some of their brash ideas about immigration. Kevin McAleenan has been at DHS a long time. He actually served in Customs and Border Protection during the Obama administration, sees himself much more kind of an operational man than a policy/politics man, and Ken Cuccinelli is the antithesis of all of that.

And so, for a long time, I think he saw Cuccinelli as someone who wanted his job. At first, Cuccinelli`s name was floated as kind of an immigration czar before he got this current job. And so McAleenan has been kind of eyeing the exit. They say that maybe he could spend more time with his family. He told Chuck Todd earlier this week that he would look forward even to going back to his role at Customs and Boarder Protection.

MELBER: Yes, I think we have that. Let`s take a look at that. We`re going to play him talking to Chuck Todd. Oh, we don`t have it.


Well, he said that - I have it in front of me just for context, I`ll tell you, he said U.S. Customs and Boarder Protection is my home, my agency, my dream job, but I`m honored to serve in the role in its tremendous (ph) capability at DHS, we can continue to improve.

And then asked about whether he would go permanent, he didn`t really sound that enthused. To your point, Julia, and so I guess that goes to the larger point for viewers who might not even keep track of every single name, what does it say about policy in the United States right now on the President`s stated priority of immigration that the Acting Secretary never became permanent, now is out, and there will be presumably another Acting Secretary, is this any way to run a government?

AINSLEY: Yes, it says a lot about how the President and his immigration policy and kind of how extreme he wants it to be. It`s not that Kevin McAleenan said no to much. In fact, he offered a memo that allowed for the separation of children at the border, that policy in this summer of 2018.

He is someone who oversaw some of the harshest asylum policies we`ve seen to date where immigrants are told that they have to claim asylum in a country like El Salvador before they can asylum in the United States where they`re forced back across into Mexico to wait for the court dates in the U.S.

It`s not that he was someone who was softer on immigration and is resigning because of that. It seems that he really got upset with the messaging, and now that he sees that the numbers are going down, this seems liking a safe time to exit. But question is, where does Ken Cuccinelli takes this next. It could be more extreme than we`ve already seen.

MELBER: Yes, you say extreme. And for those keeping track, Ken Cuccinelli was famously considered too extreme and too Right Wing for the Republican Senate to confirm him, which is why he`s been moved by the administration in an unconfirmed post. Julia Ainsley, thank you so much.

We have so much breaking news tonight. And so, what we are going to do is fit in one more break and then we have Gabe Sherman on this surprise news today about Shepard Smith leaving Fox News. We`re going to show you the proof that it was a surprise in this busy Friday night. Stay with us.


MELBER: Welcome back on this breaking news. I have Jonathan Alter and Jennifer Rubin with me. Jonathan, you just mentioned something that jumps out to you about the President announcement the DHS Secretary - Acting Secretary leaving by tweet. Go ahead.

JONATHAN ALTER, CONTRIBUTING CORRESPONDENT FOR MSNBC: First of all, the President is abusing his power by having all these acting secretaries. The constitution says they only service with the advice and consent of the Senate confirmation. So, if he puts in Ken Cuccinelli in now, he`s already been turned down for confirmation.

He knows that the Senate isn`t approving. This is unconstitutional, it could end up, since there is a pattern of one of the - part of the abusive power article of impeachment. But there was another huge development today in immigration.

The President, you remember, was trying to take money from the Pentagon and use it on an emergency basis to build his wall. He got slapped down by the court, said that he cannot do that. What dictators do in Banana Republics is they declare an emergency. The courts have now pushed back.

This is a very, very good day all around for the Republic. It`s like Jimmy Breslin who co-directed this film about recently. He wrote a book after Watergate called " How the Good Guys Finally Won." Today, we`re getting an indication with the Yovanovitch`s testimony and these court decisions the good guys are going to win eventually. We just got to hang in.

MELBER: Jennifer, I wonder what you think about all of this, including Jonathan`s point, that while sometimes Trump`s news distracts from other Trump news and people say oh it all gets convoluted. Here Rudy Giuliani`s problems have otherwise obviously crowded out what Jonathan just outlined, which is for one thing the courts standing up to Trump on that wall money grab.

RUBIN: I think the walls are just closing in wherever you look, pardon the reference to walls. But not only that decision, but the so-called public charge decision saying that they were going to try to make essentially Green Cards condition on people`s ability never to have taken any benefits whatsoever. That also got slapped down.

I think what you`re seeing on the personnel front is that everybody single person who has an ounce of credibility, who has an ounce of expertise, who`s been in government is either being forced out or is leaving in droves.

And what you have is the hackery that has now taken hold in every department, whether it`s in state, whether it`s in NSA, whether it`s Homeland Security, and the people who are left are people who really have no loyalty, no expertise, other than the ability to suck up to Trump. And what that means for us, for the good guys, is those people who are professionals, who may have gone along with some of the stuff are now going to be free agents to talk publicly about what they know and that`s bad news for Trump.

MELBER: Jonathan, that is striking. And one of the questions, what happens if you run a government like this, how long can you only use Acting Directors, how long can you pressure and bully and retaliate against people?

But as Jennifer says, a lot of these people are speaking back in, what Ambassador McFaul said earlier tonight, was the most patriotic of ways.

ALTER: Yes, Trump calls them the Deep State. That might now become a positive word. These are patriots, these are people who step forward and they tell the truth. And every time one does it, it encourages the next person to do it. Bravery breeds more bravery.

And so, you`re seeing a situation where I don`t think he`s going to be able to plug the holes in the in the ship of state. He`s going down one way or another, because every day brings another revelation or another person testifying against him.

MELBER: Jonathan Alter and Jennifer Rubin, thank you so much, really fascinating on this big night. Coming up, the surprise announcement I`ve been telling about at Fox News. You`re going to see it with your own eyes. Shep Smith`s 23 year career ended there abruptly today.

Well I gave Sherman, author of the book about Fox News is here later with what`s going on behind the scenes.


MELBER: Sometimes the news that breaks on air is actually about the news. Today, the longtime chief news anchor at Fox News, Shep Smith, made a surprise announcement he`s leaving after 23 years.


SHEPARD SMITH, FOX NEWS HOST: This is my last newscast here. Together with my colleagues, we`ve written a first draft of history and endeavored to deliver it to you while speaking truth to power without fear or favor in context and with perspective.

I am eternally grateful for the opportunity. Even in our currently polarized nation, it`s my hope that the facts will win the day, that the truth will always matter, that journalism and journalists will thrive.


MELBER: That surprise left some Fox News anchors stunned, including Neil Cavuto who took the handoff from Smith and sat in stunned silence for several seconds, offering that he didn`t know what to say.

Chief White House correspondent John Roberts said they`re losing Smith who had been with Fox since they launched, said this was like getting hit by a subway train. Smith often stood out for his fact-checking of Donald Trump.


SMITH: It`s absolutely crazy. He keeps repeating ridiculous throwaway lines that are not true at all and sort of avoiding this issue of Russia, as if we`re some kind of fools for asking the question.

Our reporting begins this Monday with President Trump`s latest misleading and xenophobic eruption of distraction and division. He cries fake news that isn`t and disseminates fake news that is. Think China pays the tariffs, the wall is going up, historic inauguration crowds, Russia probe is a witch hunt, you need an ID to buy cereal, noise from windmills causes cancer, it`s endless.

And now, the Sharpie map that hurricanes Alabama. The president and his allies have been suggesting that the whistleblower or their sources got something wrong. Today, the President did exactly what he`s accused of doing, this time on live television.


MELBER: Trump hasn`t liked that and he rushed away in on the news late today making an accurate (ph) attack on Smith`s ratings which we`re not going to repeat. But Shepard Smith is not the only one on the attack.

Smith`s own colleagues like Tucker Carlson had attacked him on air, the two were feuding, and that was the last straw, according to The Washington Post, this report says Smith had grown uncomfortable with the Trump friendly tone in the network. The departure was attributed to an accumulation of that unease, combined with those public insults.

Now the rift inside Fox News is about something larger than media. This overlaps the rift across conservatism right now. Consider the 20% jump in support for impeachment probe among Republicans, a growing volume in the criticism of Trump on some national security issues, at the very time that Trump faces this potential existential threat to his Presidency.

As Gabe Sherman reports in Vanity Fair, Fox has often taken a nothing to see here approach to Trump`s scandals, but impeachment is a different animal. It`s a management bedlam, a Fox staffer tells, "This massive thing happened and no one knows how to cover it."

And Trump has pushed back fiercely a strategy that may use a simple premise, to hold the Republican Senate, you don`t just persuade Republican Senators, they try to hold on to their constituents AKA Fox`s audience.

Trump`s not the only one reaching out either, The New York Times reporting that William Barr of all people just met privately with News Corp - Fox Corporation Chairman Murdoch at his home in New York just two days ago.

And what do these moves mean, is Fox doubling down on his Trump base, as Smith makes this surprise departure, is there more to the story? Well, that journalist I mentioned, Gabe Sherman, joins us after the break to discuss what it all means for Fox News and Donald Trump.


SMITH: Recently, I asked the company to allow me to leave Fox News. After requesting that I stay, they obliged. Under our agreement, I won`t be reporting elsewhere at least in the near future, but I will be able to see more of Gio and Lucia and our friends and family. Then we`ll see what comes along.

This is my last newscast here. Thank you for watching today and over the decades, as I traveled to many of your communities and anchored this program Studio B and Fox Report, plus endless marathon hours of breaking news. It`s been an honor and my pleasure.


MELBER: Fox News anchor Shepard Smith with his surprise announcement today he is leaving Fox News amidst these growing tensions over how to cover Donald Trump`s impeachment. Smith was a rare piece of internal dissent for a channel that`s long been criticized as the musician Nas once put it in a song about Fox News "When does the ignorance stop, watch what you`re watching, Fox News feeding us toxins, start thinking outside of the box."

Joining us now is Gabe Sherman, Vanity Fair Special Correspondent as well as an MSNBC contributor, and the leading journalist on so many pieces of intrigue inside Fox News. Jumping on via Skype on a Friday night, thank you sir.


MELBER: You look at this surprise announcement, what does it mean in the larger tensions within Fox, with Shep`s on-air feud with Tucker Carlson and the direction of this channel at such a critical time for Donald Trump`s Presidency?

SHERMAN: Well Ari, as you can see, I`m in my sweater, I was traveling for the long weekend. But my phone started blowing up from sources and I jumped on it and made calls. And from what I`ve heard from multiple people inside the network that this was a decision that was in motion several weeks ago.

Shepard Smith had grown increasingly uncomfortable with the blanket pro- Trump tenor of the network, the Tucker Carlson feud of course being the final straw, and he hired a high-profile attorney to negotiate an exit out of his contract. And Fox News management decided, rather than doing a messy public fight, to let him out of the deal.

So this is clearly a very vivid example of the civil war that has been taking place inside Fox News about how they cover Trump. I mean the Mueller Report was one thing, but as I reported in Vanity Fair, impeachment is the existential threat to a Presidency.

MELBER: Yes, and they`re covering it in very different ways, Gabe. I want to give viewers a sense of this. You say it`s weeks in the works, but it was clearly a surprise even to very close insiders. Take a look at this brief clip in the hand-off - news viewers know how the handoffs work.

Here was Neil Cavuto at the end of that Shep announcement.


NEIL CAVUTO, FOX NEWS HOST: I`m Neil Cavuto and like you I`m a little stunned and a little heartbroken. I don`t know what to say.



SHERMAN: Yes, that is - I mean that`s a genuine one of these live TV moments. I mean Neil Cavuto like Shepard Smith was at Fox since the beginning. Clearly, he was blindsided by Shep who commands a lot of loyalty inside the network. This was something that was handled in my understanding at the very highest levels.

Shep kept his cards very close. No one inside the network that I spoke to knew that this was coming. So when he announced it on air, it was actually a piece of news that he himself was breaking. So it was capital J journalism out the door.

MELBER: And finally, you mentioned impeachment. We see the rising support at least for an impeachment probe among some Republicans. How is this different for Fox, and does Donald Trump rejoice with Shep out?

SHERMAN: Well, as I reported, Fox News really is the firewall. So if Fox News` coverage changes, which we don`t really see signs that it is, I mean Shep`s departure clearly is a victory for Donald Trump. But the degree to which other journalists at Fox actually cover what is happening with the Ukraine scandal, that will erode Donald Trump`s base.

Donald Trump cannot afford to lose Fox News. As you mentioned at the top of the segment, he can maybe lose some Republican Senators, but the key constituency that he has to hold is the fox News audience. And so, that is why we saw him jump on this news and celebrate Shepard Smith`s departure.

MELBER: And that`s why it`s so much more than a media story at least in Donald Trump`s television Presidency, it is the ultimate constituency story. As I mentioned, Gabe, you`re one of several intrepid reporters and experts who`s jumped in on a Friday night for us, really appreciate it sir.

SHERMAN: Thanks Ari, thank you.

MELBER: Thank you and good luck out there reporting this weekend. I want to tell you all one other thing, a programming note for this weekend. With everything going on, I am hosting a special this Sunday night at 9:00 p.m. Eastern on Trump and Ukraine, the impeachment crisis.

We have a deep look of where the impeachment probe is headed. I`ll be joined by some very special guests, including a Federal Appeals Court Judge and a U.S. Senator who cast a vote on impeachment.

So we`re going to go big and deep, I hope you`ll join us 9:00 p.m. Eastern on Sunday night. And right afterward, Richard Engel`s On Assignment, Trump and Ukraine fact and fiction, which looks to be very relevant with everything happening with Rudy Giuliani this weekend.

That is tonight`s Last Word, thank you for watching. Don`t go anywhere, The 11th Hour with Brian Williams is up next.