IE 11 is not supported. For an optimal experience visit our site on another browser.

Transcript: The Rachel Maddow Show, 7/1/21

Guests: Susanne Craig, Mary Trump

Summary

Trump Organization CFO Allen Weisselberg is accused of avoiding taxes on $1.7 million in perks. Interview with Mary Trump.

Transcript

CHRIS HAYES, MSNBC HOST, "ALL IN": Zerlina Maxwell and Mehdi Hassan, thanks to have you -- great to have you both on. Thank you so much.

That is "ALL IN" on this Thursday night.

THE RACHEL MADDOW SHOW starts right now.

Good evening, Rachel.

RACHEL MADDOW, MSNBC HOST: Good evening, Chris. Thank you, my friend. Much appreciated.

And thanks to you at home for joining us this hour.

Leona Helmsley? Remember her? She went to prison. She was a multibillion, an actual multibillionaire for real. She was president of Helmsley Hotels, which was a high-end luxury group of two or three dozen hotels including the Park Lane in New York City and the Helmsley Palace.

She, herself, appeared in ads for some of her hotels, bragging about how rich she was and how exacting she was and how she needed absolutely the best service and all the most luxurious stuff, and so she insisted on it in all of her hotels and that`s why you should come and stay at her hotels. Sort of a familiar stick, I know. But it worked for Helmsley Hotels in the 1980s. Until it didn`t.

Turns out, despite being a billionaire, despite not only the image of immense wealth, but the actuality of it, Leona Helmsley and her husband had engaged in a number of chiseling tax cheats, including, having a whole bunch of renovations done at a Helmsley vacation home in Greenwich, Connecticut.

Leona Helmsley`s private home. It was renovations on that home including like putting in a dance floor and stuff, but she billed the renovations to the hotel company. She had the Helmsley Hotel company paid to do those renovations on her private home that had for her the double benefit of her not having to pay for those renovations herself and also her hotel company got to deduct the payments as a business expense, even though they weren`t. It was just stuff she wanted personally. Ta-da! Yeah, she went to prison.

The trial where she got convicted probably made her even more famous than her hotels had. This is a headline, July 12, 1989 in "The New York Times". Maid testifies Helmsley denied paying taxes. Leona Helmsley once told the housekeeper at her Connecticut home that only the little people pay taxes, the housekeeper testified yesterday at Mrs. Helmsley`s tax fraud and extortion trial. The witness, Elizabeth Baum, said the conversation took place at the Helmsley`s home in Greenwich four to six weeks after she was hired in September 1983.

Ms. Baum said that she and Mrs. Helmsley were in a back hall of the million-dollar home, I said, you must pay a lot of taxes, Ms. Baum testified. She said, we don`t pay taxes. Only the little people pay taxes.

Ms. Baum testified that staff salaries were paid by Helmsley businesses, and that her paycheck was issued by the Harley Hotel Chain, which is based in Cleveland. Ms. Baum also said she ordered groceries and household supplies for the Greenwich house from the Park Lane Hotel in New York City. The items were delivered in a hotel van, she said.

Assistant U.S. Attorney Cathy Seibel asked Ms. Baum, if she ever purchased food locally in Greenwich. She said she did so only a few times. She testified, quote, I bought something for the house that we ate. She testified that when she asked Mrs. Helmsley to reimburse her for the cost of that food, Mrs. Helmsley said to her, quote, you bought it, you pay for it.

Real peach, right? Leona only the little people pay taxes Helmsley went to prison for that scheme and more. That`s that scheme in which she used her business as a tool for chiseling petty tax fraud, which is both a crazy thing for a super-rich person to bother with, right? And it turns out it`s exactly the kind of crime that super rich people think they can get away with and that they can get caught for, particularly if they are brazen about it.

I mean, Leona Helmsley was having her business pay or provide for her personal living expenses including the salaries for her maid and other servants of her private vacation home and the renovations there, even the food there. She had the business pay for all of it instead of her paying for it. That meant nothing comes out of her pocket and the business gets to deduct all of that for tax purposes.

She was convicted on 33 counts. People sort of famously shouted at her and taunted her on the courthouse steps after her conviction. She went to prison in 1992. When she got out of prison, she had community service hours to perform. She apparently tried to get her employees to perform the community service for her. The court found out about and so then she got more hours.

Leona Helmsley died in 2007. Nearly every headline and every obituary called the ex-convict the "queen of mean" when she died.

Using a business to pay for your personal stuff as a way to avoid taxes, that`s a tried-and-true way to go to prison, and being famous doesn`t necessarily help you avoid that, being infamous or being famous. Do you remember on "Seinfeld", there was a character called the soup Nazi? We have a rule on this show, don`t talk about Nazis unless you`re talking about actual Nazis, except in the case of the soup Nazis. That was his character of the show.

He had these all really specific rules for how exactly you were supposed to order soup at this restaurant. If you didn`t follow the rule, he`ll scream at you, no soup for you. The soup Nazi on "Seinfeld" was based on a real guy, a storefront soup place on West 25th Street in Manhattan, run by a guy who really would scream at you if you didn`t order fast enough or if you didn`t stand in exactly the right place. The CFO for the soup Nazis soup company went to prison.

Turns out for years, if God forbid you worked at the soup Nazi place, you would get paid through all sorts of little chiseling off-the-book schemes designed to avoid taxes. And so, the dude went to prison.

Running your business in such a way that your business provides personal stuff to executives of the company and then writes it off like those are business expenses, compensating the employees at your business in ways that are designed to hide that compensation from tax authorities, these are tried and true paths to prison. Even if you`re not like a tax accountant, even if you`re somebody who studies these things, even if you`re not a lawyer, even if you`re somebody who just watches "Seinfeld" or read a single tabloid newspaper in the `80s.

Even for comically high-profile people, this is a tried and true way to end up in the crowbar hotel, which is why presumably most people who try to commit those crimes know that they ought to be subtle about it, mostly. Not all though, and what New York prosecutors spelled out in court today was a variety of this kind of alleged crime that was according to prosecutors not at all subtle. The word we might use in not legal terms is brazen. The word the actual prosecutor used in court before the judge today was audacious.

Prosecutor called it a sweeping and audacious illegal payment scheme. We just got in the transcript. Are you ready?

The judge: Good afternoon, please be seated.

The clerk: Calling from the 59 calendar. I don`t know what that is. Number one, the Trump Corporation, the Trump Payroll Corporation, and Allen Weisselberg.

The judge: Any reason why we cannot proceed with the arraignment? Defense lawyer: None. Prosecutor: None, Your Honor.

The judge: Arraign defendant.

The clerk: Allen Weisselberg, the grand jury of the county of New York has filed an indictment charging you with grand larceny in the second degree and other related charges. How do you plead, guilty or not guilty?

The defendant, Allen Weisselberg: Not guilty, Your Honor.

The clerk: The Trump Corporation, the grand jury of the county of New York has filed an indictment charging you with scheme to defraud in the first degree and other related charges, how do you plead?

Defense lawyer: Corporation pleads not guilty.

The clerk: The Trump Payroll Corporation, the special grand jury has filed an indictment charging you with scheme to defraud in the first degree and other related charges, how do you plead, guilty or not guilty?

Defense Lawyer: Your Honor, the company pleads not guilty. Thank you.

The judge: Very well.

And a different prosecutor rises: Your Honor, in light of the many statements that have already been made about this case, I would like to clarify briefly what this case is and is not about. As spelled out in the indictment, this was a 15-year long tax fraud scheme involving off the books payments which is the type of crime that is charged against companies and executives all the time.

Contrary to today`s assertion by the company`s former CEO, former President Donald Trump, this is not a, quote, standard practice in the business community nor was it the act of a rogue or isolated employee. Instead it was orchestrated by the most senior executives who were financially benefiting themselves and the company by getting secret pay raises at the expense of state and federal taxpayers. The chief financial officer himself avoided taxes on $1.7 million of his own income, which hardly amounts to an incidental quote fringe benefit, and the former CEO, former President Donald Trump himself signed many of the illegal compensation checks.

To put it bluntly, this was a sweeping and audacious illegal payments scheme. As noted in the indictment, the chief financial officer himself, Allen Weisselberg, directed that company records be deleted to conceal his participation in this scheme with the knowledge of the company. Yet, he remains to this day the most senior financial fiduciary in the company. Even now, there`s been no attempt to impose discipline on the people involved, to report the crimes, repay the proceeds or even to amend any of the false tax returns.

Instead, when confronted by our investigation, the company at the highest levels decided not to accept responsibility and cooperate, which is what companies do if they want to be viewed as a good corporate citizen. Instead, the company forced us into litigation for a year and a half, including two trips to the United States Supreme Court. And even after they lost those claims at every turn, they failed to comply with subpoenas before this court and have refused even to allow us to speak to any of their employees except in the grand jury.

To be clear, a company has a complete right to adopt this type of combative uncooperative approach, but having done so, it doesn`t have the right to turn around and demand the leniency and benefit that flows to a company that does cooperate. In short, contrary to the defense`s assertions, there`s no clearer example of a company that should be held to criminal account.

And finally, to address what this case is not about, this case is not about politics. This investigation which is ongoing has been thorough careful and proper and has been limited to subject matters within our New York jurisdiction. Politics has no role in the grand jury chamber and I can assure, Your Honor, it played no role here. The charges were considered by an impartial grand jury and we look forward to this court`s review of the grand jury minutes which will confirm that impartiality. Thank you, Your Honor.

The judge then nods to the defense counsel for the Trump Organization and says: Counsel.

Defense counsel rises: Thank you, Your Honor. Your Honor, I appreciate the press release, I don`t think at this point it warrants a response bit by bit, claim by claim. So I`m not going to indulge in that at this time. Thank you, Your Honor.

The judge: anything else?

The defense lawyer for Allen Weisselberg rises: Your Honor, on behalf of Mr. Weisselberg, I don`t have a microphone, should I stand?

The judge: We will hand you a microphone.

Defense lawyer: Thank you, Your Honor. I would just like to say on behalf of Mr. Weisselberg, we object to the characterization of the facts that was just given to the extent that they relate to Mr. Weisselberg, thank you.

The judge: Thank you.

And that was -- that was the meat of it. There was a subsequent discussion right after that about discovery, which means the prosecutors have to give the defense lawyers the evidence that they`ve got in the case, which they`re going to be basing their case on.

At one point during the whole discovery discussion when they`re talking about handing over the evidence that they`ve got, they note pointedly that this is as the defense lawyer -- excuse me -- as the prosecutor said in his opening statement, this is an ongoing investigation. And so, they ask for a protective order. What that means is that whatever they have to hand over to the defense lawyers in discovery so the defense lawyers can get a good look at all the evidence and everybody`s got a fair shot at defending the case on its merits, the protective order would mean that the defense lawyers can`t show any of that material either to the public or to anybody who`s not directly involved in the case.

So the defense agrees to that protective order, the judge agrees to that protective order. There`s a protective order. We will never see -- the public, we will never see the discovery in this case.

The only other real thing that happened today at this arraignment was this sort of sad moment for Allen Weisselberg.

The prosecutor says to the judge: While these charges are eligible for bail, we believe there is a flight risk associated with this defendant. So surrender of the passport is necessary to reasonably assure his return to court. This defendant has been and apparently will remain the CFO of a company with international tentacles, and the evidence on this would demonstrate an ample record of travel by private jet and defendant has significant means and connections to support himself outside the jurisdiction, including in places beyond our powers of extradition.

The surrender of the passport is the least restrictive alternative condition that would reasonably assure defendant`s return to court. It`s our understanding that defendant Weisselberg consents to this condition and is prepared to surrender the passport to our investigators.

The judge: Do you in fact consent?

Defense lawyer answers for him: Yes, Your Honor.

And then the judge just says bluntly: Turn over the passport. Turn it over, Allen.

The arraignment was today. In fact, there was no bail. Mr. Weisselberg did surrender his passport but he was released on his own recognizance. They set a status conference so the next time they`ll be in court is mid- September.

But as the arraignment was held today, the indictment was unsealed. And so, in addition to the transcript of what happened in the room we have the written account of the charges. There are 15 felony charges. It`s four counts of criminal tax fraud, first degree scheme to defraud. We`ll get more clarity on that from somebody who knows these things in just a moment.

There`s a conspiracy count, four counts of falsifying business records, four counts of offering a false instrument for filing, that`s a charge against Allen Weisselberg, the chief financial officer.

There`s another charge the Allen Weisselberg faces alone, which is grand larceny in the second degree. Grand larceny, of course, is theft. They`re accusing Weisselberg essentially of stealing an effect from the IRS by knowingly obtaining a tax refund that he was not supposed to get.

But the news here, the genuinely interesting and I think potentially surprising news is number one, this is a lot of charges. Fifteen felony charges is a more serious and extensive indictment than Trump Organization lawyers have been trying to spin to the public for the past week or so for sure. This is a heftier indictment than they prepared people for. It`s therefore a heftier indictment that I think most people were expecting.

Number two, in statements today from the D.A.`s office and from the New York attorney general`s office, remember this has essentially been a joint investigation by those two New York law enforcement entities. In statements from both of those entities and in that exchange in court that I described about why they need a protective order because you know the case is still going on, it was -- it was made clear by prosecutors speaking in court by statements from the defense sector, form the D.A. and from the attorney general, made more clear than at least I expected to be today, m that this indictment today isn`t it that in all likelihood more is coming that the investigation proceeds.

Of course, we believe that the special grand jury that we first learned about. In last month, the grand jury that`s been sitting apparently three days a week to consider the evidence in this case to consider bringing potential charges in this case, we believe that that grand jury will continue to meet for the next six months.

"The New York Times", in fact, reports tonight about what`s coming next here actually in very blunt terms. This is what it says tonight in "The New York Times`" reporting on the case. Quote: The charges against the Trump Organization and Mr. Weisselberg ushered in a new phase of the district attorney`s sweeping inquiry into the business practices of Mr. Trump and his company. While the indictment was narrowly focused on the tax scheme, the charges could lay the groundwork for the next steps in the wider investigation, which will focus on Mr. Trump.

Again that`s being reported tonight in those terms by "The New York Times". The next phase of the -- excuse me, the next steps in the wider investigation will focus on Mr. Trump. Quote, in the next phase of the broader investigation into Mr. Trump and his company, prosecutors are expected to continue scrutinizing whether the Trump organization manipulated property values to obtain loans and tax benefits among other potential financial crimes. So there had been some I think discussion and speculation that because bank fraud and insurance fraud manipulating the valuation of various assets to defraud banks and insurance companies and tax authorities, that had been reported as a focus of these investigators but it wasn`t included in this indictment, there had been some discussion today that maybe that wasn`t going anywhere, and maybe that would never be charged.

The way "The Times" was reporting this tonight it sounds like that`s what`s next, with a focus on Mr. Trump himself. We`ll see.

But number one, the initial indictment is a lot of charges, 15 charges is a lot, 15 felonies. Number two, there`s apparently more coming in the investigation that has already produced these felony charges. Number three, there`s been a lot of discussion today about an unindicted co-conspirator described in the indictment. As far as we can tell, that unindicted co- conspirator is not former President Trump himself.

Just so you understand what I`m talking about here, here`s one of the places that this unindicted co-conspirator phrase occurs in the indictment. It says, quote, operation of the conspiracy from at least 2005 through the date of this indictment, the name defendants and others including unindicted co-conspirator number one agreed to and implemented a compensation scheme with the object of enabling defendant Allen Weisselberg to underreport his income to federal authorities and thereby evade taxes and falsely claim federal tax refunds to which he was not entitled.

That unindicted co-conspirator does not appear to be former President Trump. I will explain exactly why I believe that`s the case in in just a moment.

I will tell you what would seem that there`s a better chance that that unindicted co-conspirator is more likely to be somebody like the controller of the Trump Organization. The controller is an employee of the Trump Organization, a sort of lower level employee actually who reported to Allen Weisselberg. I mentioned the controller because he has been reported already to have appeared before the grand jury. We do not know for sure if the unindicted co-conspirator is him.

We don`t know for sure. There`s a reason this person is not named in the indictment. We don`t have any reason to believe if it is the controller that he has left his employment at the Trump Organization. As far as we can tell, he`s still there. There`s always the possibility when an unindicted co-conspirator is pointed to in an indictment that that person is cooperating.

Prosecutors said that they have not been allowed to talk to any employees outside of the grand jury process. We know that controller spoke with prosecutors within the grand jury process. It remains to be seen.

The reason I say the unindicted co-conspirator does not appear to be former President Trump is because he`s described otherwise so several times in the indictment. For example, he`s described bluntly as a person who signed checks that were used to make allegedly illegal payments to pay private school tuition for some Weisselberg family members. He`s described bluntly as the person the president of the organization who rented an apartment for Weisselberg on the west side of Manhattan. Both of those expenses are described as part of the alleged illegal tax evasion scheme at the heart of the indictment. There`s no effort by prosecutors to hide Donald Trump`s identity when it comes to his involvement in those acts.

So, just logically, it wouldn`t make that much sense that they would describe him bluntly in those parts of the indictment and describe him as the unindicted co-conspirator elsewhere. But that that brings me to the next point which is that as I mentioned earlier, the conduct that`s described here is not subtle, or particularly well hidden. At least it`s no longer hidden from prosecutors.

If you feel like we`re waiting too much into the legal -- the legal niceties here, I`ll bring it back to brass tacks. Did you see "The Wire"? Do you know that scene in "The Wire" where Idris Elba`s character says are you taking notes on a criminal conspiracy, what are you thinking? Remember that scene? Classic scene, right?

(BEGIN VIEO CLIP)

UNIDENTIFIED MALE: Are you taking notes on a criminal conspiracy? What are you thinking?

(END VIDEO CLIP)

MADDOW: That worked on "The Wire".

Here`s how prosecutors worked at the Trump Organization. Pretty parallel, quote: beginning in 2005 and as part of the scheme to defraud, Weisselberg signed rental checks drawn on the Trump Corporation`s bank account. The checks were sent to the managing agent for the apartment building on Riverside boulevard where Weisselberg and his wife lived.

Similarly, Weisselberg and others directed the Trump Corporation to issue checks to pay for Weisselberg`s utility bills for the Riverside Boulevard department, including payments for electricity, phone services, Internet, cable television service. During this period of time, the Trump Corporation also paid for Weisselberg`s monthly garage expenses. At all relevant times, the payments of Weisselberg`s rent utilities and garage expenses constituted employee compensation, constituted taxable income to Weisselberg. But these payments were not booked in the Trump Corporation`s general ledger as employee compensation.

That said, quote, for certain years, the Trump Organization maintained internal spreadsheets that tracked the amounts it paid for Weisselberg`s rent utility and garage expenses. The indirect compensation to Weisselberg was not included on Weisselberg`s W-2 forms or otherwise reported to tax authorities.

So he`s effectively getting paid actually like deducted from his salary what they paid him in rent utilities and his garage expenses and all this stuff, it was definitely part of his compensation. They didn`t report it to tax authorities and they didn`t list it in the company`s books. But they did apparently describe it to the penny in an internal spreadsheet that tracked every cent of it.

Is you taking notes on a criminal bleeping conspiracy? What are you thinking?

They kept internal written records of the stuff they were otherwise very carefully keeping off the books. Really? And prosecutors apparently now have that.

Audacious and sweeping, that`s how the prosecutor described it. And here`s just one last point, this is what we`re going to talk about tonight with somebody who knows these things. The scheme to have Trump`s company pay for personal stuff for Trump Organization executives as described in the indictment, as a scheme. So not only do those executives not have to pay for those things out of pocket, they would thereby dodge taxes on that both from the company side and the employee side, right?

The indictment says that that scheme was not limited to Allen Weisselberg and his family members who are compensated in that way. They describe other people who work for the Trump organization who benefited from this allegedly illegal tax evasion scheme.

Similarly, the indictment says there were other Trump Organization executives who worked for the company but they were regularly paid in ways that were designed to disguise their payment from tax authorities. They were regularly paid in ways to make it look like they weren`t getting compensated as Trump Organization employees, they were getting paid as consultants or something it has important tax consequences both for the company and for the executive getting paid that way.

That`s all spelled out in the indictment. It`s spelled out in the indictment as a further part of the scheme to defraud. No other executives behind besides Allen Weisselberg is described as the beneficiaries of that fraud, but it is explicitly spelled out that he wasn`t the only one who benefited from that kind of a scheme.

I will also tell you that is exactly the kind of scheme described by "New York Times" reporters in September. In their Pulitzer Prize-winning expose of Trump`s financial adventures, they specifically described a scheme like that, a scheme like the one outlined in today`s indictment as it related to Ivanka Trump, the president`s daughter. "The Times" described in detail financial records they discovered that showed Ivanka Trump being paid both as an employee of the Trump Organization and as a consultant to the Trump Organization in a way that seemed custom designed to try to evade taxes both for the company and for her.

That is the executive scheme described at the end of the indictment. Prosecutors say that Weisselberg benefited from such a scheme and that other executives did, too. They are not named in this indictment, but that is the Ivanka scheme described last fall in "The New York Times". And like I said apparently there`s more to come from this investigation. We`ve got much more on that in a second. Hold that thought.

(COMMERCIAL BREAK)

MADDOW: In order to obtain this remarkable indictment today against the company of former President Donald Trump and the company`s longtime chief financial officer, New York prosecutors had to battle all the way to the U.S. Supreme Court twice to get access to Trump tax and financial documents that the president had fought to keep secret. Trump lost that fight ultimately and in February, prosecutors did finally get access to millions of pages of Trump`s taxes.

That was February when they got access. By May, they`d empanelled a special grand jury to meet three days a week to consider the evidence and to consider potential charges. Today`s indictment and the 15 felony charges that were unsealed today, that`s the first public-facing product of that process. It may not be the last. As far as we know, that grand jury is still sitting and is expected to sit until the end of the year.

Right now, there`s only two known entities that have access to millions of pages of Trump financial and tax documents to review. One of them is that prosecutor`s office which today unveiled these felony charges against the former president`s business.

The other entity is a small reporting team at "The New York Times" which obtained more than a decade`s worth of Trump tax documents and won a Pulitzer Prize for their writing about it. Since 2019, they`ve been chronicling how the former president and his family and his business have spent years among other things aggressively avoiding paying taxes.

Joining us now is a member of that reporting team, Susanne Craig, investigative reporter for "The New York Times".

Susanne, I`ve been really looking forward to talking to you about this. Thank you so much.

SUSANNE CRAIG, INVESTIGATIVE REPORTER, THE NEW YORK TIMES: Thanks for having me.

MADDOW: Reading the indictment today and knowing what prosecutors said today in court, do you feel like um you could -- you saw some of this coming? With what you were able to report on about Trump`s tax practices and business practices?

CRAIG: Yeah. You know, we`ve been looking now at his finances for five or six years, and we got a hold of his taxes and published a story that came out in 2020 around that and there are a number of discrete issues that we saw that we think still need to be surfaced. I`m not surprised about today.

It seemed actually interesting about today that it was built more around Allen Weisselberg`s taxes than it was around Donald Trump`s taxes. So I think they`re still working their way through the investigations continuing, and you know, we saw when we were going through -- through our work, you know, four or five or six discrete issues that that you know are I`m sure, and I`ve heard are of interest to the Manhattan D.A. and their investigators.

MADDOW: One of the things that caught my eye is your reporting from last fall about a scheme that you`d uncovered basically by comparing different financial documents which showed that the president`s daughter, Ivanka Trump, was paid as a consultant in a way that seemed designed to avoid paying taxes on some of her income a way that would have been advantageous both to her and also to the Trump Organization.

I wondered if you saw any reflections of that scheme that you described particularly in those later parts of the indictment where they described ongoing schemes involving multiple executives around the way their compensation was described to authorities.

CRAIG: You know it sure did feel of a piece to me. What we saw um when we were doing our work with the payments, some of which went to Ivanka Trump. You know, you`re seeing money that`s coming out and being allocated -- you know, Allen Weisselberg had some of that through a certain payment. And with Ivanka Trump what we saw and it`s others are involved as well, there was million dollars that we found in consulting fees that were being paid from entities that Donald Trump controls outward.

We couldn`t see who they were -- who they were going to, but we saw them going out and it was like wow, when we saw it, we were like where were these going? And then what we found as we went along was we were comparing the taxes to other documents, we had public documents and other documents.

And we saw some of it actually went to a company that is controlled by -- Ivanka Trump as an officer of and then paid out to Ivanka Trump. And why that was a red flag is because she`s got -- she`s an officer of the Trump Organization and has -- she`s paid more than $2 million, and she`s also getting consulting fees.

And that`s sort of something that right away should be, you know, the IRS would be looking at it and saying, hey, they`re only supposed to these sort of payments should be ordinary and necessary and you have to question why somebody who`s making $2 million at the Trump Organization is also getting consulting fees. So you`re sort of like what`s going on?

And what you know we in our reporting suspected and we reported about was that this was an attempt by Donald Trump to reduce his taxable income and to transfer money to his kids. That may also have had the effect of reducing or of him avoiding the -- a gift tax to them. So it`s a way to transfer wealth potentially from one generation to another.

We didn`t have access to other people`s tax information to see if potentially Eric Trump was getting some of these payments, if Donald Trump Jr. was getting some of these payments but they are also a member and are part of that company that was getting the money that went to Ivanka.

MADDOW: And briefly to that point, the kinds of documents that would show that if that`s the case, is it your understanding from what we can see publicly about this court case that those are the kinds of documents that the prosecutors have?

CRAIG: I think I can`t imagine that they don`t have them by now, and the New York attorney general had gone after the information from the company that received those payments called TTT. You know, for Trump Trump Trump. So they`ve got those records.

And I don`t know how much either further they`ve gotten if they`ve gotten tax returns of other members of the Trump family, but that`s a real. Just follow the money case. We were like wow when we saw it, and we you know started to work through it. We dead-ended in the tax returns, but then because Ivanka Trump had gone to the administration, she had financial filings we were able to uh to match them up.

I got to -- I know I have worked with two great reporters on it, Russ Buettner and Mike McIntyre and it was a great, great effort. Took us a long time to put all that together, but it`s there, and it`s one of the things that the Manhattan D.A. is looking at.

MADDOW: Susanne Craig, investigative reporter for "The New York Times", Susanne thank you for your time tonight and as always for your clarity on this complex stuff. I really appreciate it.

CRAIG: Great. Thank you.

MADDOW: All right. I want to bring into the conversation now, Dan Alonso.

Mr. Alonso previously served as the number two official in the Manhattan district attorney`s office under Cy Vance, the prosecutor whose office brought these charges today. It was in that role that he wrote the memo which governs the office`s current policy about how and when to file criminal charges against corporations.

Mr. Alonso, it`s really nice to make time. Thank you so much for being here.

DAN ALONSO, MSNBC CONTRIBUTOR: Thanks for having me, Rachel.

MADDOW: I am not a lawyer and I am a non-seasoned observer of New York state criminal prosecutions, and there are a number of things that spoke to me and surprised me about this indictment today in part that it was 15 charges and that the prosecutors made use pretty bold language in describing what they said was an ongoing, sort of unrepentant scheme at the company to do this in a systematic way, with significant financial and legal consequences. That just stood out to me is it just seeming heftier than I expected it to be.

I just wanted to get your reaction and maybe you could set me straight if I if my expectations were put in the wrong place.

ALONSO: Yeah, no, it`s totally understandable, right? It is 15 counts. I will say that I would focus more on the hefty language and the facts that are alleged would seem incredibly powerful than I would on the fact that there are 15 counts for reasons I won`t bore you with New York kind of requires you to separate out counts and not lump multiple things into one count as you can do in federal court.

So it might have been a more streamlined indictment in federal court but either way, it does have -- it does tell a story and it`s that story that we should be focused on, and I think that story is a very powerful one, more powerful than we thought yesterday you know based on what we had heard from the lawyers for Trump and the organization.

MADDOW: Let me raise a point that was raised by the defense lawyers by the Trump organization defense lawyers and that was actually just referenced by Susanne Craig from "The New York Times" in talking about the prospect of this executive compensation scheme that prosecutors described, which may have essentially been an ongoing scheme to pay executives in a way that was knowingly designed to evade taxes both from the company`s perspective and from the executive`s perspective.

Susanne described the reporting that "The New York Times" did as something that should have popped for the IRS, looking at executive the way that the executives were paid and then to see them get paid in this other way that didn`t make much sense given what their jobs were, including the president`s daughter Ivanka Trump. That resonated for me with alongside what we heard today from Trump defense lawyers saying, listen, if these were serious tax evasion -- if this was serious tax evasion, the IRS would have come after us for this. The IRS would have been pursuing this, not some D.A. in Manhattan.

What do you make of that charge?

ALONSO: Frankly, it seems a little silly. But I will say that in terms of what Susanne said, I get it that why wouldn`t the IRS be doing it? I will tell you that the IRS was an opaque entity even when I was a federal prosecutor. So they kind of pick up what they pick up, it takes them a long time and tax cases in federal court tend to be brought you know many years after the acts in question. So I wouldn`t put any credence into not knowing whether or not the IRS is investigating. They may well be in the normal course of things that we may hear about that.

But in terms of this criminal investigation, that`s not a defense. You can`t say, oh, geez, you know, we shouldn`t be convicted of this because some other entity really should have prosecuted us. Well, geez, if that`s the case, then the Manhattan D.A.`s office wouldn`t do any white-collar cases. They have a long tradition of doing great cases that could be brought in federal court. So this is just one of them.

So I that`s a that`s just kind of a silly defense.

MADDOW: Last brief question for you, Dan. Scheme to defraud in the first degree is a jumble of words that I`ve never necessarily heard before, but obviously that`s technically the most serious charge the Trump organization is facing. What should we understand -- in layman`s terms, what should we understand scheme to defraud to mean in terms of an alleged crime?

ALONSO: From a prosecutor`s perspective, it`s a great statute with relatively weak penalties. So it is patterned after federal mail fraud, which is basically to punish the devising of a scheme or artifice to defraud, which basically means trying to get money from people or companies or property by lying to them, by false and fraudulent pretenses et cetera. And so, it`s just it punishes a scheme rather than just a one-time transaction which is why this case can allege a 15-year scheme in one count.

Now, it requires more than one victim and I think it was brilliant of these prosecutors to include the IRS as a victim because it takes what might have been a $100,000 case and turned it into a $900,000 case which is quite a bit more uh more difficult. So, hopefully, that answered your question about scheme to defraud.

MADDOW: It absolutely does. Daniel R. Alonso, former New York prosecutor, served as chief assistant district attorney under Cy Vance. Dan, I know it`s been a long day with a lot to absorb. Thanks for being here.

ALONSO: Thank you, Rachel.

MADDOW: All right. Coming up next, I said that as soon as I saw this indictment I knew that I wanted to talk to Dan Alonso, I knew that I wanted to talk to Susanne Craig about this. The other person I most wanted to talk to about this is Mary Trump, Donald Trump`s niece and she agreed to do an interview with us here next. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Early on in the Trump presidency, "New York Times" reporters obtained more than 100,000 pages of documents detailing the finances of Trump`s business and the Trump family.

And, ultimately, "The Times" turned those into multiple several thousand- word investigations showing how for years Trump and his family participated in tax schemes, and in some instances, what appeared to be outright fraud - - schemes that saved them potentially hundreds of millions of dollars on tax bills over the years.

It was kind of a mystery when the first part of the story broke, how the reporters from "The Times" could have possibly gotten their hands on so many of those personal financial documents. It was a mystery -- until this book came out. It was written by Donald Trump`s niece, Mary Trump.

And in the book, Mary Trump revealed that she was the one who had access to those documents. And she had turned them over to reporters at "The New York Times."

And those documents were not just the source of remarkable award winning journalism, they also became the basis of a lawsuit that Mary Trump launched against her uncle, Donald Trump, in which she alleges he cheated her out of tens of millions of dollars in Trump family assets that were otherwise rightfully hers.

That lawsuit, of course, is now just one item in a growing list of legal woes for the former president and his business, including these charges brought in New York state court today.

Joining us now, I`m pleased to say, is Donald Trump`s niece, Mary Trump. She`s the author of "Too Much and Never Enough: How My Family Created the World`s Most Dangerous Man." She has also a new book coming out on August 17th, which is called "The Reckoning: Our Nation`s Trauma and Finding A Way to Heal."

Mary Trump, it is great to see you. It`s been too long. Thank you so much for coming back.

MARY TRUMP, AUTHOR, "TOO MUCH AND NEVER ENOUGH": It`s great to be here, Rachel. I`m so pleased that you asked me.

MADDOW: Let me ask your unique perspective on how you think your uncle and the people around him will react to this. This is something that for all the efforts to sort of get accountability for various things he has done, criminal charges brought against his business is something new that he`s never faced before, anything like it he`s never faced before.

How do you think he`ll react?

M. TRUMP: I`m sure he`s quite angry. I wouldn`t want to be around him right now. But unlike other people close to him who are probably extremely nervous, I don`t believe Donald will be, because he`s been getting away with this sort of thing for so long that he must feel immune, because he always has been. These are the kinds of charges that could have been leveled against him and other people in my family decades ago.

He is also, I`m sure, quite confident in Allen Weisselberg`s loyalty to him. He doesn`t believe for a second that Allen Weisselberg will flip on him.

So, unless prosecutors can find somebody else who will flip or unless they can find something else in the many millions of pages of documents they have, Donald is -- is going to be completely confident in Allen`s loyalty, for sure.

MADDOW: One of the things that has stuck me over the course of the day is the sort of very bluntly worded reporting from "The New York Times" which emerged after today`s arraignment that the next phase of the investigation. Not only is there a next phase. That -- that -- that there will be further work from the grand jury, and potentially further indictments. But that it focuses, specifically, on your uncle and that it is going to be looking at some of the things that Michael Cohen testified about to Congress, adjusting valuation of various assets to defraud -- allegedly -- to defraud banks, insurance companies, and tax authorities.

The prospect that charges wouldn`t just be targeting on Weisselberg, wouldn`t just be targeting the company but would target him, personally must feel -- must seem like a different -- sort of a different level, though.

M. TRUMP: Yeah. Sure. And it shouldn`t surprise anybody, except perhaps Donald, because there -- there are longstanding patterns here. And my lawsuit will show just how consistent those patterns are and have been since the `80s.

And the other thing that people need to understand is that -- when my grandfather was alive, Donald was involved in everything that went on. And after my grandfather started suffering from Alzheimer`s, nothing happened in the family or in my grandfather`s business or in Donald`s business, without his explicit say-so.

He was running the show. He is always the person, who knows what`s going on. And nobody does anything independently from him and that includes his siblings, as well.

So, again, he should be quite nervous. But I think, the fact that he`s gotten away with so much, for so long, including over the past-four years when he was in the Oval Office, will continue to give him a false sense of confidence.

MADDOW: Is that interrupted, at all, by the prospect that the other executives of the Trump Organization, who are his children, may be in the line of fire here? I mean, one of the -- I think, the important threads to pull from that Pulitzer Prize-winning reporting at "The New York Times" based on Trump financial records, is that, among others, it appears that, Ivanka Trump benefitted from the type of scheme that`s described within the end of the indictment today. That Trump executives were compensated, in ways that were deliberately designed to help them evade taxes, and to help the business evade taxes, on their behalf.

Allen Weisselberg is being charged for benefitting from that scheme. The indictment says, other executives also benefitted from that scheme. And now, we`ve got solid reporting that the investigation continues. That raises the prospect that further charges could be brought against his children.

M. TRUMP: Yeah, it does. And I -- again, I think they should be quite anxious right now. Donald, on the other hand, will expect the same kind and level of loyalty from them, as he expects from Allen. You know, as far as Donald`s concerned, they have what they have because of him. And they should be willing to take whatever hit they are going to take.

He doesn`t understand, I guess, how these things work. Prosecutors won`t stop at my cousins. They will be going for the bigger fish, which would be Donald, who`s been running this organization for over 30 years, now.

So I think he would be surprised to learn that I don`t believe my cousins would exert that kind of -- exercise that kind of loyalty towards him because his relationship with them and their relationship with him is entirely transactional. So -- and conditional, I should say.

So, they`re not going to risk anything for him, just as he wouldn`t risk anything for them. So, it could get really, really interesting as these things unfold, because there are so many more documents that New York prosecutors have at their disposal.

MADDOW: So, you have more confidence that Allen Weisselberg would -- wouldn`t cooperate, than you do that the president`s -- former president`s children wouldn`t cooperate?

M. TRUMP: Yeah. I think, as far as I understand it, and, you know, I`m not a lawyer. But it seems that, as -- as serious as these charges are, they may not end up with jail time or any significant amount of jail time. And the downside of cooperating with prosecutors, for Allen Weisselberg might be larger than the downside of going to jail if it`s for a short enough period of time.

So, again, it`s going to be very interesting to see just the -- the case that can be made. And the sentencing, if it comes to that, because I think that will factor in, for sure. But I`m much less sanguine about my cousins` loyalty to their father.

MADDOW: Mary Trump, the niece of the former president, the author of the number one "New York Times" best-seller, "Too Much and Never Enough: How My Family Created the World`s Most Dangerous Man" -- again, the new book comes out August 17th. It`s called "The Reckoning". Mary, it`s really good to see you. Thank you so much for being here. It`s a pleasure to have you here.

M. TRUMP: Thanks. It`s great to see you, too, Rachel.

MADDOW: All right. We`ll be right back. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Well, I said this time last night there`s going to be a ton of news today. I was right. We knew it was going to be like this but wow.

In addition to the president`s company being indicted, we had the president, today, the actual president of the United States, in Miami at the site of the building collapse there.

Tonight, just before we got on the air, Attorney General Merrick Garland announced a moratorium, a pause, on all-federal executions.

The Democrats in the House today announced their appointees to the committee that`s going to investigate the January 6th attack on the Capitol. Speaker Pelosi appointing seven Democrats and Republican Liz Cheney to that commission. No word on whether the Republicans will actually appoint anyone else, or if they`ll punish Liz Cheney for accepting that appointment.

And, of course, the day started with the Supreme Court taking a dull axe to what remains of the Voting Rights Act and minority voting rights protections. That decision is one that is going to sting for a very long time. The entity that brought that suit, in the first place, is the Democratic National Committee. DNC chairman, Jaime Harrison, is going to join Lawrence, this next hour, right now here on MSNBC.

So I am going to get out of the way. I will see you again tomorrow night.

Now, it is a time for THE LAST WORD WITH LAWRENCE O`DONNELL."

Good evening, Lawrence.