Summary
Department of Justice released the redacted version of the affidavit used to search former President Trump`s Florida residence justifying the raid. It revealed the FBI`s investigation referred from the National Archives regarding highly classified documents. Rep. Eric Swalwell (D-CA) answers questions regarding Trump`s mishandling of highly classified materials and the request of Democrats in Capitol Hill for a damage assessment from the intelligence committee to check our national security. Dems slam Trump`s reckless handling of classified documents.
Transcript
ALEX WAGNER, MSNBC HOST: Neither men has responded to request for comments tonight from "The Washington Post." That does it for us tonight. Rachel will be here on Monday and I will see you back here on Tuesday. Now it is time for "The Last Word." Ali Velshi is in for Lawrence tonight. Good evening, Ali.
ALI VELSHI, MSNBC HOST: I have a big smile on my face because of what you just said. I`m thinking to, myself we are not going to -- we can be waiting a long time before those people respond and you can`t say something about that. It`s kind of wild how everybody has gone suddenly silent on this thing.
WAGNER: When you lost Carl Rove, you know you are in trouble.
VELSHI: Yes. You`ve lost the game. Alex, you have a great weekend and we`ll see you next week.
WAGNER: Have a great show, Ali.
VELSHI: Alright. Well, tonight, we are seemingly one step closer to a criminal prosecution of former President Donald Trump. The possibility of the twice impeached insurrectionist, former president of the United States standing trial in federal court seems enormously more plausible today than it did just a week ago.
Today, the U.S. magistrate, Judge Bruce Reinhart, who authorized the search warrant of Donald Trump`s Florida home released the redacted affidavit. That`s what you`re looking at. The black is the redactions. It was used by the FBI to support the search.
The affidavit says, quote, "There is probable cause to believe that evidence of obstruction will be found at Donald Trump`s Florida home." The redacted affidavit gives us a window into what the FBI expected to find and found during their search of Mar-a-Lago, quote, "The FBI`s investigation has established that the documents bearing classification markings, which appear to contain National Defense Information were among the materials contained in the 15 boxes and were stored at the premises in an authorized location. Further, there is probable cause to believe that additional documents that contained classified NDI or that are Presidential records subject to retention requirements currently remain at the premises," end quote.
Now, the affidavit describes how the Department of Justice sought to search Donald Trump`s Florida home after retrieving an initial batch of classified documents that contained information about, quote, "clandestine human sources, information relating to human intelligence activities, capabilities, techniques, processes, and procedures."
Now, these documents should have been kept in a secure location. But the affidavit explains how the most incompetent and dangerous president in history allowed classified information to be, quote, "unfoldered, intermixed with other records, and otherwise unproperly identified."
But here`s the thing. Documents that were released with the affidavit explain how it can be viewed as a roadmap for the criminal prosecution of the former president with probable cause that the former president actually obstructed justice.
Here is an example, quote, "Although the public is now aware that the government executed a search warrant at the premises owned by the former president and seized documents marked as classified, the affidavit is replete with further details that would provide a roadmap for anyone intent on obstructing the investigation. Maximizing the governments access to untainted facts increases its ability to make an informed -- a fully informed prosecutive decision."
No president in the history of the United States have ever been criminally prosecuted after leaving office. However, the Department of Justice, the FBI, and Judge Bruce Reinhart believed that there was real cause that actual crimes were being committed by the former president that warranted a search of his private residence.
There is even more evidence of the legal danger Donald Trump faces. In that same memo that was released with the affidavit, in the explanation for why the redactions were necessary, quote, "The materials the government marked for a redaction in the attached document must remain sealed to protect the safety and privacy of a significant number of civilian witnesses, in addition to law enforcement personnel, as well as to protect the integrity of the ongoing investigation and to avoid disclosure of grand jury material in violation of the Federal Rules of Criminal Procedure."
A significant number of civilian witnesses. An ongoing investigation to avoid disclosure of grand jury material. These are phrases that can only add to Donald Trump`s growing fear that he could finally face actual consequences, because this should be enough proof for Attorney General Merrick Garland to criminally prosecute Donald Trump.
Tonight, in an article titled, "Donald Trump is not Above the Law," "The New York Times" editorial board writes, quote, "No matter how careful Mr. Garland is or how measured the prosecution might be, there is a real and significant risk from those who believe that any criticism of Mr. Trump justifies an extreme response. Yet it is a far greater risk to do nothing when action is called for."
[22:05:03]
We are joined on this important and historic night by our panel of legal experts. Barbara McQuade, a former United States attorney and law professor at the University of Michigan Law School, Jill Wine-Banks, who served as an assistant Watergate prosecutor, both of them are MSNBC legal analysts and co-host of the podcast "Sisters in Law." Mark Zaid is an attorney who specializes in national security and security clearances.
Thank you all for being with us tonight. Barbara, I don`t know how many days and nights this team has spent thinking about these things and ways in which the former president may have had transgressions of the law or at least of norms. But this -- there is stuff in this redacted affidavit that is about lives, that is about danger, that is about national security.
We are past the point of this was carelessness or this was a bad record keeping. There is something in here that has led people to believe that this could actually be the thing that Donald Trump is prosecuted for.
BARBARA MCQUADE, MSNBC LEGAL ANALYST: Yeah, I think there are some things that are disclosed in this affidavit that makes me agree with you that it`s more likely today than it was before that there would be a prosecution. One of the things we now know is that as far back as May of 2021, the National Archives was involved in a dialogue with Donald Trump to get these documents back.
So, he`s been on notice for all that time that he had documents that didn`t belong to him, that were classified, that contains national defense information, that was lying along Mar-a-Lago. We learned today also that they found these documents, not just in the storage room, but in something called the residential suite and something called the 45 office, and something called the Pine Room. I mean, what is that? The place for people to have a drink after they play golf? I don`t know.
But it`s, you know, beyond careless, reckless. And we also learned the nature of these secrets. It includes signals intelligence, human intelligence, that`s the stuff where we`ve got assets in foreign countries being managed by case officers of the CIA. And FISA material, that`s information that is collected that by definition, includes counter intelligence information and terrorism information.
So, these are some really, really sensitive documents. They are lying around all over the place at Mar-a-Lago and Trump is on notice for more than a year that he has these things and needs to return them. I can`t see how he evades criminal charges, unless there`s something in those redactions that is exonerating.
VELSHI: Jill Wine-Banks, you have watched everything that Donald Trump has done in this presidency, but you also watched something that a different president did. And there is a Watergate-ness to this, in the bumbling-ness of it, the intermixing of documents with I don`t know what, (inaudible) and underwear and other things, makes it seem like it`s not a serious as it is.
But what Barbara just said is that there is stuff in here that had no business being in the president`s house. And it`s been there for 18 months. We have no idea what those NDI`s, what that information about human intelligence, what those FISA documents? Who has seen them? Where they might have been? Who might have photocopied them? We just don`t know. It seems dumb, but this might be the most serious thing yet.
JILL WINE-BANKS, MSNBC LEGAL ANALYST: This is very serious. And I say that not just as a Watergate prosecutor, but a former general counsel of the Army, familiar very much with human intelligence, signal intelligence, and national security. And this is stuff that was some of it was in the hallway going to the public pool. Anybody could have done gone past it. It wasn`t locked up appropriately.
And besides the national security implications, all of this belongs to the American people, to the National Archives. Even the things that are just presidential records, that aren`t classified should not be at Mar-a-Lago. They are not Donald Trump`s documents. They are the people`s documents. They are there for history to study.
And so, it`s really a shame that he has those. And one of these laws would bar him from ever running from office should he be convicted of that particular offense. But all of them are very serious offenses and all of them put at risk our national security. And he knew he had them. As you pointed out, he is known for a long time, the National Archives has been saying, please return our documents. You have classified documents.
They removed classified documents. They removed 15 cartons of them. And now they just took away 25 cartons more after he said, well, there is nothing left. I have given you everything. That wasn`t true. They obviously got recent information from someone that cost them to be alarmed and to go in there.
VELSHI: It`s lost on no one that Jill`s pin tonight as a padlock. Mark, let`s talk about some of these things because there is a general view amongst people in intelligence and political critics of the intelligence operations in the United States that the stuff is over classified.
[22:09:58]
And there is some argument that at lower levels of stuff that`s otherwise exist in the public domain, someone would have testified about it in congress, but these documents remained classified and sometimes they don`t get unclassified in enough time for people and researchers and journalists to get access to them.
That`s not what we`re talking about in some of these cases. There are markings on some of these things that were taken from Mar-a-Lago that I am unfamiliar with and I was not familiar with until today. They are at a high level of intelligence that does possibly lead to exposure of people like intelligence gatherer or spies, people who work in other countries.
MARK ZAID, NATIONAL SECURITY ATTORNEY: No, exactly. So, I have spent 30 years challenging the classification system of the U.S. government to declassify information because even the most senior government officials will testify before Congress that probably up to 50 percent of information is over classified.
But I also represent some of the most covert operatives who work for our government, both assets, foreign assets, who work overseas, and also our people, who if they were caught in their foreign countries could be executed. And what this affidavit showed us in particular, we knew about, okay, SCI information, sensitive compartmented information was received. That`s bad.
But then to read about these dissemination controls on the documents, such as human, HCS, human intelligence as Barbara talked about, that`s talking about my clients who could be potentially at risk or the FISA material from the Foreign Intelligence Surveillance Act court, which is trying to counter foreign agents who are operating here in the United States. To think that these records were willy-nilly floating around Mar-a-Lago for a year and a half is unthinkable.
VELSHI: So, here`s the thing, Barbara, there are lots of people who have been writing about this like you all who actually know about these things, who have said tonight that this actually could lead to a prosecution. And for some people that`s a fever dream that one day Donald Trump would be prosecuted for something.
But what we have to get to, and I don`t know what you think about this, is whether or not this was reckless and careless and I don`t know what, or whether this is dangerous de facto? In other words, is there something nefarious and that may have been going on with these documents or this information, and does that matter?
MCQUADE: So, I think a technical violation is probably already established just based on the facts that we know. But as we learned during the Hillary Clinton investigation when James Comey famously made a statement about why the FBI was recommending no charges there, is that the Justice Department typically declines to prosecute unless there is a willful violation of the law.
When people are merely negligent and they make a mistake and they bring something home and they didn`t know it was theirs, typically, that person may get fired. They may lose their security clearance. They may be disciplined. But they`re typically not prosecuted. But here we do have what appears to be a willful violation because as we just said, Donald Trump has been battling with the Archives for 18 months over this. So, he`s been on notice of it.
But I imagine part of the ongoing investigation that is referenced in the search warrant is to answer some of those questions, Ali. Why did he have this? Have any copies been made and disseminated to anyone else who don`t have access to this search, shouldn`t be looking at this material? Was it being used for some improper purpose? Was it being sold? Was it given to any of our adversaries? Those are the kinds of questions I think that would matter in making a charging decision through the egregious level of violation here.
VELSHI: Alright, so you talk about making a charging decision. Jill Wine- Banks, 18 U.S. Code 793 is about gathering, transmitting, or losing defense information.
It reads, "Whoever being entrusted with or having lawful possession or control of any document, writing, or information, relating to the national defense, (1) through gross negligence permits the same to be removed from its proper place of custody or (2) having knowledge that the same has been illegally removed from its proper place of custody and fails to make prompt report of such laws, theft, abstraction, or destruction, to superior officer, shall be fined under this title or imprisoned not more than 10 years or both." How does this relate to what we learned today?
WINE-BANKS: Well, as Barbara just pointed out, we know for sure that there is at least a technical violation. He has the documents that are presidential records, and that are also national defense information. So, he`s violating laws by just possessing them. And in this case, he is on notice that he possesses them. And he is saying, I`m not giving them back anyway.
That is a deliberate and nefarious conduct. That is the kind of thing that if it isn`t prosecuted leads to further repetition by other malign actors. So, I think that in this case what you started with in your introduction, is that it would be far worse to do nothing.
[22:15:04]
And I have long believed that even a sitting president could be indicted. I argued for that during Watergate and I certainly argued as soon as Richard Nixon resigned, that a former president could be indicted. And Donald Trump is a former president who is not above the law, whatever you think about indicting a sitting president.
He is an ordinary citizen now who is in possession of documents that he shouldn`t have even had at his private residence while he was president. It needs to be in a SCIF. It needs to be secured. It needs to be locked up. And I`m not even sure that he currently has the kind of security clearance that would allow him to view these documents at all even if he was in a SCIF.
VELSHI: Mark Zaid, something Jill just said there that if you don`t prosecute this, it could lead to further action by malign actors. Again, I just want to underscore what you said earlier. This is very real for you in some of the people you represent. This is not an abstraction that, alright, it was an accident. He took stuff he shouldn`t have taken.
We don`t know what happened in 18 months, whether people you represent or know of were named and their information was either given or sold or exchanged for some future benefit.
ZAID: We have no idea and right, there was news breaking today about someone who was a fake heiress walking around Mar-a-Lago and taking photos with the president. And Chinese spies or perceived Chinese agents have been at Mar-a-Lago. Barbara was right about how these cases are usually handled.
I`ve been involved in Espionage Act cases, both administratively and on the defense side. Most of these cases are handled administratively, security clearance laws, termination. Very few cases are prosecuted. The times when those cases are prosecuted are generally when the information is so massive like a hoarder, or where someone deliberately leaked it to the media or certainly to a foreign power.
Where I`m a little bit more conservative than some of my colleagues who comment on all the networks, other than I supposed that one network, is that I`m not yet there about Donald Trump himself. I think this affidavit today is making some one or more persons a lot more nervous than before.
Clearly, I do think crimes are committed. I am yet not there to know about the answers to questions about Donald Trump per se. What did he do? Did he touch these documents? What access did he have? When we saw the information from June to then led to the search earlier this month, with the lawyers saying, oh, we gave you everything. We have nothing left.
Clearly, someone was either misled or lying. Was that the president? Maybe. Well, I`m sure we`ll find out. But there is someone, one or more people that clearly have committed a variety of crimes and those may be the people we see indicted first before we get to Donald Trump.
VELSHI: I want to thank you all for your time and your analysis. We are a lot smarter for it. Barbara McQuade, Jill Wine-Banks and Mark Zaid, we appreciate it.
Alright, still ahead, as we learn the true depth of just how much sensitive classified material the former president of the United States had in boxes at his Florida resort, one phrase you can bet was heard a lot today among D.C. lawmakers, damage assessment. Congressman Eric Swalwell, member of the House Intelligence Committee joins us next.
(COMMERCIAL BREAK)
[22:20:00]
VELSHI: Damage assessment. Those are the two words reverberating around Capitol Hill today after the unsealed affidavit laid out in detail the alarming level and amount of classified information that Donald Trump took to Mar-a-Lago, at least amongst Democrats, that is. Democrats on several committees denounced Donald Trump`s mishandling of information and urged the intelligence committee to conduct a damage assessment, to see how badly Donald Trump has threatened national security.
The House Intelligence Committee Chair Adam Schiff said, quote, "The redacted affidavit makes clear Trump kept highly classified national defense information at the public resort. If that wasn`t alarming enough, some of it wasn`t even in folders, merely intermixed with news clips and other debris."
The Senate Intelligence Committee Chair Mark Warner, who noted his committees` requests is made on bipartisan basis, stress that the Department of Justice`s investigation must be allowed to proceed without interference.
House Oversight Committee Chair Carolyn Maloney also demanded a damage assessment adding, quote, "Trump`s reckless handling of our country`s most sensitive documents placed our national security at grave risk and blatantly violated the Presidential Records Act."
Congressman Eric Swalwell, a member of the House Intelligence Committee, who will join us next, made this observation, quote, "Why did he take them? Unclear. But we know the same guy traded military aid to get dirt on Biden."
Now, Republicans have remained largely quiet today with some criticizing only the lack of transparency in the redacted affidavit. Not clear what exactly they wanted unredacted there, but one Republican not keeping quiet is of course, Donald Trump, who attacked the investigation as surprise, surprise, a witch hunt.
Joining us now is Democratic Congressman Eric Swalwell of California. He is a member of the House Judiciary, Intelligence, and Homeland Security Committees. He also served as an impeachment manager in the second impeachment trial of Donald Trump. Congressman, good to see you. Thank you for being with us tonight.
REP. ERIC SWALWELL (D-CA): You too. Thanks, Ali.
VELSHI: Damage assessment. Are we talking about Donald Trump and the damage he`s done to the institution by taking things like this or are we talking about what Mark Zaid and I we`re just talking about, that there are people whose lives might be in danger tonight because information that should never have been anywhere close to the public was sitting around in Mar-a- Lago for 18 months, apparently?
SWALWELL: Real lives are at risk. I`m talking U.S. troops, most importantly, because in the affidavit they referred to national defense information.
[22:25:02]
That means U.S. troops, their movements, their locations, and that has been jeopardized by Donald Trump. It also means, as was referenced, sources, people who helped the U.S. government obtain or achieve our national security objectives. And just tonight, "The New York Times" is out with a new piece about a CIA memo regarding the loss of human sources. I can`t comment, you know, on that memo. But the story, at least, highlights the concern that if Donald Trump has this information about U.S. sources, it jeopardizes their lives.
So, these are real lives that are at risk. And again, Ali, what is so interesting here or so telling, Donald Trump, four years as president, was the first president in modern history who chose not to receive an intelligence briefing when every other president, and Joe Biden did and does receive intelligence briefings.
So, why would he take that information now? We can only conclude the worst because he`s acted the worst in the past. He leveraged U.S. military aid to Ukraine to get dirt on Joe Biden. So, you have to assume the only one with that information to help himself, if he ever needed.
VELSHI: I know you can`t tell me about details about things you know, but one of the things we`re all learning about that people like you know about, are the names, the markings on some of these documents. We`ve all heard classified and as we were discussing, issues about whether there is overclassification of documents.
But in the list of classified documents found at Mar-a-Lago, written in the affidavit, which means the last round of stuff, 67 documents marked as confidential, 92 documents marked as secret, 25 documents marked as top secret, 184 documents there. And a lot of them had designations that, like I said, I never heard of before, but describe whether they are human intelligence or signals intelligence, or things like this. Again, this is not accidental memorandum souvenir stuff that would find its way out of where it`s normally supposed to be, right?
SWALWELL: And Ali, think about, you`re absolutely right. Think about the Russia war on Ukraine, our ability to stay one step ahead of them, that was because of the exquisite intelligence that our community, CIA officers, NSA, you know, intelligence officials had been able to collect and share with our allies and helped us stitch together. That was the glue. Our intelligence was the glue that brought NATO and allies all over the world together.
So, if we lose our ability to do that because Donald Trump is holding on to this information, is not even if he has to compromise any information. It`s the perception that sources have that maybe their ability to work with us or their cooperation with us is not as secure as they thought. That could also have a chilling effect on future sources.
VELSHI: Lindsey Graham tweeted today that this fall is well short of any meaningful transparency. We`re going backward not forward when it comes to explaining this raid on former President Trump`s home. Lindsey Graham is a lawyer. He is a guy who has dealt with a lot of foreign governments. So, it surprises me because, again, the affidavit proves that this wasn`t a raid. That that have asked for this information over and over again. Carl Rove said on Fox, seems like the Department of Justice kept asking for this.
So, he is spinning a story here. But what sort of -- what would Lindsey Graham be talking about when he says this not meaningful transparency? Does he mean he didn`t want as much stuff redacted? Wanted more stuff out there?
SWALWELL: It`s just politics, Ali. And we`re 80 days out from the midterm elections. And this could not give the American people a clearer choice. One side, the Democrats is advocating for people, the people who are affected by Donald Trump`s recklessness, the people that have benefited by our advocacy for them and the legislation we passed.
And the other side is entirely interested in politics. And they`ve given us this frame because they have shown themselves and the way that they are willing to fall over themselves and do anything to defend Donald Trump, that if they win the majority this fall, they will go to Congress and fight entirely for Donald Trump.
And democrats have shown, with this, and what we`ve done, that if we are given the majority again, we will go back to Congress and fight for people. And it could not be clearer, and this just shows that in a very, very pronounced way.
VELSHI: Well, do you think any of this affects that outcome? Obviously, there has been some wind shifting at the last few weeks that are making some people think that control of Congress and the Senate is now a toss-up, when earlier this year, they thought Democrats wouldn`t control either House. Do you think this kind of thing has any effect? Is there anybody out there in America who is saying defending Donald Trump`s actions here is a bridge too far?
SWALWELL: Yes, because it again shows Democrats we`re fighting for women`s reproductive freedom. We`re fighting for your kids to be free from gun violence in school. We are fighting for paycheck freedom and lowering the costs of prescription drugs. They have no agenda. They don`t have the contract of America in `94. They don`t have repeal and replace in 2010.
Their entire agenda is that they`re going to bring chaos to Washington because they`re going to focus entirely on fighting for Donald Trump.
[22:30:00]
We`re going to fight for you. I think that choice is clear and we`re going to win with that choice.
VELSHI: Congressman, good to see you again. Thank you for joining us tonight.
SWALWELL: You too. Thanks Ali.
VELSHI: Congressman Eric Swalwell of California.
Coming up, while there is a lot we still do not know about the sensitive top secret documents Trump stashed on a property, that also has croquet courts, and something called the Trump boutique. What we did learn today truly shocked national security experts -- two of them. Clint Watts and Matthew Miller join me next.
(COMMERCIAL BREAK)
VELSHI: As much as the former president would like to frame the search of Mar-a-Lago, that he calls a raid, as nothing more than a political attack on him, the redacted affidavit today makes it clear that this is anything but.
The case was referred to the Justice Department by the National Archives in February of this year, more than a year after Trump had left office in disgrace when the Archives already had retrieved 15 boxes from Trump`s Florida home containing 184 individual documents with various levels of classification markings.
The National Archives` initial review of the contents of those 15 boxes were covered before the FBI search warrant, quote, "indicated that they contained newspapers, magazines, printed news articles, photos, miscellaneous printouts, notes, presidential correspondence, personal and post presidential records, and a lot of classified records. Of most significant concern was that highly classified records were unfoldered, intermixed with other records, and otherwise unproperly identified".
Now, a lot of Donald Trump scandals over the years have been a little hard to understand, if you`re not a lawyer. But this one isn`t, at all.
Would you leave your most sensitive personal information in a drawer where pretty much anyone can get access to it? Intermingled with all of your stuff? No, of course not.
Unfortunately, that is what it`s starting to look like Donald Trump has been doing with the nation`s most sensitive information. And you have likely already heard the terms -- confidential, secret, top secret -- that were used to describe some of the material that Donald Trump kept at Mar-a- Lago.
But today, we got some new ones. The affidavit says that after looking over the documents in those 15 boxes, the original 15, quote, "the FBI agents observed markings reflecting the following compartments dissemination controls -- HCS, FISA, ORCON, NOFORN, and SI".
The affidavit`s author then writes, "Based on my training and experience, I know the document classified at these levels typically contain NDI."
I`m not a national security expert, better than I was a few hours ago but some of those terms used by the DOJ throughout the affidavit jumped out at me.
That last one -- NDI, stands for National Defense Information. And it`s exactly what it sounds like. It`s classified information related to national defense. Or as it`s described in the United States legal code, information relating to, quote, "essential defense, industrial, and military emergency energy requirements relative to the national safety, welfare, and economy, particularly resulting from foreign military or economic actions", end quote.
This is serious stuff.
How about some of those other abbreviations? SI, that stands for Signals Intelligence. It refers to communications that have been intercepted by our intelligence service, generally speaking electronic phone, email, texts, that kind of thing.
HCS, it stands for Human Intelligence Control System. It`s a designation for a report by an intelligence officer that`s based on confidential human sources. Or as my colleague Andrea Mitchell, put it plainly earlier today, spies -- actual American people who are putting their lives at risk for our country. And if details about them, even just their identity were to get out, they could be killed.
Joining us now Clint Watts, a former special agent with the FBI and distinguished research fellow at the Foreign Policy Research Institute. He is the author of "Messing with the Enemy: Surviving in a Social Media World of Hackers, Terrorists, Russians and Fake News".
Joining us as well, Matt Miller, former chief spokesman for the Department of Justice, and former special adviser for the National Security Council. They are both MSNBC analysts.
Gentlemen, good to see you tonight. Thank you for being with us.
Clint, let me start with you. I just want to -- I want to go through a few things that have happened at Mar-a-Lago, because there might be people saying no big deal, they took some stuff. It was there.
February of 2017, Donald Trump was president, club members remember -- report over hearing Donald Trump discussing North Korean missiles -- a North Korean missile launch happening at the time with the former Japanese Prime Minister, Shinzo Abe.
May of that year 2017, journalists probe the club`s Wi-Fi networks with weak encryption.
November, 2018, a college student sneaks into Mar-a-Lago.
April, 2019, a Chinese woman attempted entry carrying suspicious electronic devices.
January of 2020, a Connecticut woman breaches security checkpoints in an SUV.
This is not the safest place in the world it seems for anything, let alone really, really important stuff that has lives attached to it.
CLINT WATTS, MSNBC ANALYST: That`s right. It`s where you host a wedding. It`s not where you secure classified documents. And I think that`s what`s consistent through all of this is Mar-a-Lago was -- it was target number one if you are a foreign country wanting to do espionage, targeting the U.S. government because they knew President Trump was there. They knew that he used it not just as a residence, but as a place to conducted official White House business.
[22:39:52]
WATTS: And not only that, he had classified documents there which had the nation`s secrets, and which were not secured which we don`t have any idea what the access to it was. I think they came out in both the affidavit and recent news reporting.
The FBI had said, who was securing this? How is it being over watched? How is it being locked down? Who has access to these things? This would be normal in Washington, D.C. circles, to keep control of classified information.
I think the biggest part is that we don`t even know who accessed these documents that were classified at the top levels that had our nation`s most precious secrets and they were unsecured.
And who had a cell phone? I mean, if anybody was around these with a cell phone in an unclassified environment, none of this, I mean, not one thing about this, Ali, would be acceptable in the United States government.
If you or I are mad, or any of us were involved in a situation like this, we would -- number one, lose our clearances immediately. Number two, we would definitely be investigated, and really probably be prosecuted for such reckless behavior with such top national security secrets.
VELSHI: And Matthew again, for a lot of people, all of this is an abstraction, right? Because I`ve never seen a secret, top secret or classified document in my life, nor have I ever been invited to Mar-a-Lago.
But there are actual examples of how this stuff can be compromised. There was an example of a woman who claimed to be a member of the Rothschild family. One year before the raid of the former president`s seaside home, the woman whose real name is Inna Yashchyshyn (ph), a Russian-speaking immigrant from Ukraine, made several trips into the estate, posing as a member of the famous family, the Rothschild family, while making inroads with some of the former presidents key supporters.
The ability of Miss Yashchyshyn, the daughter of an Illinois truck driver, to bypass the security at Mr. Trump`s club demonstrates the ease with which someone with a fake identity and a shadowy background can get into a facility that one of America`s power centers and the epicenter of Republican Party politics.
How do you connect these two things? How do you make this abstraction into a reality for people who say, what are you making such a big deal of? There`s just stuff he took, and it didn`t -- it didn`t meet the right process.
MATTHEW MILLER, MSNBC ANALYST: Yes. Look, you don`t have to make too many jumps to realize how many people at Mar-a-Lago and the type of people at Mar-a-Lago who could potentially had access to these documents, the place is filled with foreign nationals. It`s filled with the type of grifters who have always flocked to Donald Trump and have always tried to get close to him because they see opportunities.
And when you look at the types of government -- of documents that were floating around the estate, they are the types of documents that would be a gold mine for foreign intelligence services that would be valuable to sell or provide to foreign intelligence services.
The signals intelligence -- the signals intelligence if exposed, turns out valuable information sources for U.S. intelligence. If a foreign government official realizes that his phone has been tapped he`d stop using that phone and we lose a valuable source of information.
But it`s really -- the thing that`s most shocking to me is that he has documents derived from human intelligence at Mar-a-Lago. You know, from spies or assets that spies had gotten to turn over information to the U.S. government for them at great personal risk, in many cases.
The idea that you would take that out of a secure government facility, the only place on earth where you are supposed to view that kind of information and just have it kind of willy-nilly floating around the private residence, defies everything that you are taught inside the national security establishment.
And as Clint says, if anyone else did this, we would be prosecuted in a heartbeat. And I think ultimately, it`s why this case, when you look at all the factors, probably, does end up with an indictment because the government has to look at this.
The Justice Department, I know when I was there, we would prosecute mishandling classified information cases, or leak cases. Often the criticism would be you only prosecute low-level leakers. You only prosecute low-level employees. You never prosecute anyone serious.
If he isn`t prosecuted for this, it will prove that statement to be true, and will make it harder for the government to ever prosecute anyone again for similar violations.
VELSHI: Clint, give me the visceral reaction because among the three of us, you were in the field. You were actually one of those people who did things and spoke to people, where that information being out there again, not an abstraction, real danger.
What do you think about this? What are you thinking tonight? There are probably a lot of people around the world, as Matt just mentioned, some of them might be world leaders, some of them might be another government, some of them might be spies who are not sleeping well?
WATTS; Yes, not only are they not sleeping well, I just wonder what authoritarians are just laughing, if they already knew about this. I mean did they know these documents were down there?
Two things that kind of Matt hit on both of them. One, human sources and signals intelligence. Signals intelligence, by the way, for our taxpayers, they pay millions, or even billions of dollars to develop capabilities. So, if they can actually gain sources and methods, which bring us to the Secret Service (ph) -- which help protect the country. If those really get out, that is a massive loss to the public.
[22:44:52]
WATTS: The second one is for human sources. Human sources are often the most valuable. They refine the intelligence. They give you that context and nuance to understand. It`s from all other sources, what`s going on. It`s the hardest to develop.
And now think about that in the context of our foreign partners. We tend to rely on the E.U. and NATO to, you know, share information with us and we do the same. Would you want to do that today, realizing that they`re just setting some sort of unsecured structure down at Mar-a-Lago with a president that at times, depending on what country you`re in has been very adversarial.
Former President Trump, very adversarial with several European partners. Would you want that? So I think the damage, you know, it`s hard to even measure or understand. And when I look at crosses (ph), it`s also just a great disservice to the millions of Americans, really over the course of this recent history of this country, and the thousands that serve every day, who work so hard to protect these sources and methods, to then watch how sloppy this is being done out there.
VELSHI: Matt, let me ask you this. There are a lot of people who have written tonight, as you said, this has got to lead to a prosecution of some sort. Almost every one of them has come to the conclusion that doing so will further polarize this country, and actually could lead to more violence, as the initial search at Mar-a-Lago did. What do you make of that? And what do you think of it?
MILLER: You, number one, cannot give in to threats of violence, and shy away from doing the right thing and following the law, because you`re worried about violence.
And number two, you cannot give a pass to anyone, no matter who they are, because of the office that they used to hold, or the fact that indicting them may be controversial. There are a lot of people that if you indict they might be controversial.
You have to do the right thing anyway. And if you -- if you look the other way, when everything tells you, when the law tells you to indict, when the facts tells you to indict, and you look the other way, because you`re worried about violence, or you`re worried about politics, you are really giving a veto to some of the worst elements in this country.
And I will say, I`ve been heartened that one thing that Merrick Garland made clear in an interview last month, is that, they are only -- this was in reference to the January 6th case. But I think it applies here just as well. They are only going to look at the facts and the law and none of these other considerations are going to enter into their mind, enter his mind, when he makes these types of decisions.
VELSHI: Well, in decision that some people who blame Merrick Garland for his soft touch may come to help in a case like this, where he says, I haven`t been swayed by any politics until now. Why would I start?
Thanks, guys. I appreciate you taking time for us tonight. Clint Watts and Matthew Miller.
Coming up, there was other news today, believe it or not, what we learned about our economy, and what it could mean for the prices you are paying for everything from groceries to the price you pay to borrow money to buy a house.
[22:47:31]
(COMMERCIAL BREAK)
VELSHI: There is some good news on inflation today. According to a Commerce Department report that`s closely watched by the Federal Reserve, consumer prices rose less in July than they did in June. Last month, they were up 6.3 percent, compared to a year earlier. And that is down from the 6.8 percent in June.
But all of this is still far higher than where inflation needs to be. And trying to get record inflation under control, while avoiding a recession is a hard thing to do.
Today, the Federal Reserve chair Jerome Powell issued a stark warning, that the Fed`s plan to fight inflation is likely to cause, quote, "some pain".
(BEGIN VIDEO CLIP)
JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring something to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.
(END VIDEO CLIP)
VELSHI: So, avoiding that far greater pain means a potential small uptick in unemployment, and economic growth may slow down. Borrowing cost will continue to rise as the Federal Reserve raises its benchmark interest rate.
I want to introduce Talmon Joseph Smith, he`s a "New York Times" economic reporter. Tal, good to see you. Thank you for being with us tonight.
TALMON JOSEPH SMITH, "NEW YORK TIMES": Thanks for having me, man. I`m a long time fan of your reporting on the economy.
(CROSSTALK)
VELSHI: Well, you are very kind. And by the way, anybody who knows anything about the economy knows that if the Federal Reserve chairman says that interest rates are going to go up, some things are going to happen.
The market dropped a thousand points. The Dow dropped a thousand points today, which leads me to believe sometimes the market is just stupid. But that shouldn`t be all that surprising, right? Inflation is there. The Feds got to fight it. Unfortunately, they don`t have a ton of tools. They can increase interest rates.
SMITH: Right, and so we saw the market fall today. The markets go up and then go down, we`ve seen that all year. It`s been very choppy. In the end, as usual, particularly the mega indices like the S&P 500 and the Dow, they`re going to eventually go up.
The real stakes today, and why this is a seminal moment in monetary policy is that the Fed chair, essentially as you said, admitted that they have a limited set of tools.
And so, at the end of the day, the Fed has increased the risk premium. Government bonds are now creating higher yields. And so, that makes some more risky investments less attractive. It also means that the borrowing cost for a lot of businesses has gone up.
And you know, we`ve seen SPACs, NFTs, some of these more speculative investments that were very hot last year, come down. We`ve seen mortgage rates go up. Many of the channels that they have, available to them have already been used up. And essentially, what is left as the Fed chair reference there when he said some pain, is really having these effects of high interest rates, or higher interest rates to the labor market by unemployment.
[22:54:55]
VELSHI: And you are right about the fact that over time, every ten-year period, markets go up. and that will ultimately fix itself. And if you got enough years, you are fine.
The problem is inflation is actually a tax on people, right? You just -- you pay more for things that you, you know, you were buying before. Interest rates are the way you fight it, but it`s the same problem. You are paying more, particularly if you are a borrower. They`re trying to avoid a recession. Did you get some sense that that will be successful?
SMITH: You know, it`s really up in the air. We certainly have seen the panic about there being potential recession declines, in say, late spring. We`ve seen major indicators come in, suggesting that consumers practically on the higher end, the upper middle class and the affluent, are holding up well where as maybe those on the lower end have seen more of their income go to food and to gas. They struggled a bit more.
And also, it`s just one of the cases that our economy, in terms of share of spending, you see the middle class, the upper class, and the rich contributing more to consumer spending, which is 70 percent of the economy.
So the fact that we have folks that saved up during the pandemic, and now are still using those savings to produce economic growth, that`s a good, overall. And the problem, however, like you said, there is a double whammy win in which inflation hits those at the bottom the hardest, and yet interest rates tend to affect those who are the last in when the economy is growing, and will be the first out, when the economy has peaked, and starts to tumble.
VELSHI: It`s an interesting time. We hope what Jerome Powell said does work to help us avoid a recession because it`s hard to have both inflation and high interest rates, or rising interest rates at the same.
Tal, good to see you. Tal Joseph Smith of the "New York Times".
We`ll be right back.
[22:56:51]
(COMMERCIAL BREAK)
VELSHI: And that`s tonight`s LAST WORD.
"THE 11TH HOUR" starts right now.