Rachel Maddow takes a look at the days top political news stories. James comey. It also only mize if the case in question is closely connected to politics. Thats whats important about the big new development. The Wall Street Journal was first on report in detail on the type of charges that federal prosecutors may be considering against the president s personal lawyer, Michael Cohen. If it is kregt, the charges he is facing from prosecutors are not related to politics at all. At least not at face value. In quote, previously unreported developments, federal prosecutors in new york are examining whether mr. Cohen committed tax fraud. Quote, federal authorities are assessing whether his income from his. At Ai Medallion Business was underreported. That includes hundred of thousands received in cash and other payments over the last five years. In addition, federal authorities have been investigating whether he made misrepresentations or
false statements on lone applications including whether he inflatd the value as collateral loans. So according to the Wall Street Journal which has been all over the case, federal investigators are looking at cohen for allegedly or potentially lying about his true financial situation. On the one hand to the irs where he allegedly underreported his income so he wouldnt to have pay taxes on it. And to banks so they would be duped or conned or schemed into giving him loans for which he didnt actually qualify. If those alleged crimes sound familiar to you, it is because youve heard the details of those exact same charges laid out against Trumps Campaign chairman, Paul Manafort in the case in virginia. In watching the case if nothing else, we now understand what a government does to prove tax
fraud and bank fraud charges. They get paper trail showing the allegedly fraudulent applications. They then get people involved. Even very low level people involved who had something to do with facilitating the alleged fraud or tax evasion. They have them admit that it was deliberate tax and fraud evasion. These may be hard to understand as crimes. You dont have to be a lawyer to get it. As long as they have the paper trail so they can authentic the documents and explain whats going on, thats the whole case. It is not a complicated way to prosecute someone. And the jail time is significant. If you can get paper trail and those witnesses together, you
can really threaten somebody with serious legal jeopardy. So the journal reported on detail. The name of the specific bank that prosecutors are looking into to figure out whether the bank might have had a confederate working with cohen. If those charges are what cohen is facing, that is a pretty Ominous Development for the president s lawyer. As is the other piece of the pus people we just got filled in today. It concern this is unfamiliar with you but admittedly quite handsome gentleman. His name is gene friedman. He is russian born. In the tabloids they call them taxi kink. In may, there may, the taxi king unexpectedly pled guilty to what seemed like some relatively minor charges and crucially he agreed to start cooperating with
prosecutors in their Ongoing Investigations. That was a surprise on a number of levels. Not least because gene friedman, the. At ai king, had facing a huge pile of fraud and tax evasion charges. And he didnt plead guilty to something all that serious. That would imply by the process of deduction that prosecutors pled him way, way down in exchange for his cooperation. He was facing a lot of legal jeopardy. He ended up pleading guilty for almost nothing in exchange for the cooperation that he offered. In what cases is his cooperation helpful . Today the Wall Street Journal reports that the taxi king, gene friedman, who is now cooperating, he and Michael Cohen apparently shared the same accountant. They both used the same guy. And that accountant we now know has been subpoenaed to testify
to the grand jury in the case. So put these together. At a fraud and bank fraud allegations. We know the government has a huge trove of documents. We have reports that at leaf one person involved in cohens finances who is linked to another person who is a cooperating witness who is facing charges, that person has testified about cohen. You put it together and you know, tick, tick, boom. If this new reporting about cohen is accurate, that is a Serious Development about his legal jeopardy. And it may well be the case that the legal jeopardy hes now facing is completely unrelated to politics. Completely unrelated to the donald trump president ial campaign. Completely unrelated to cohens work. Completely unrelated to his legal representation of the government. If that is how it goes down,
bank fraud and. At a fraud related to his taxi business, well, we know that theyll have something to squeeze him with and we can surmise that that Informal Justice Department 60day rule about not doing anything potentially politically provocative right before the forthcoming election, that may not hold in the Michael Cohen case. And that may change your summer plans. That might mean that whatever is going to unfold for Michael Cohen and his legal future, it may not have to be crammed into the next three and a half weeks before the informal deadline rolls around on labor day. That that, these things can take unexpected turns. We had thought based on prosecutors claims in court that the Paul Manafort case wasnt going to be at all about President Trump or the Trump Campaign and certainly not about russia. But today in open court, in the Paul Manafort case, boy howdy did the trial to go all of those places today. In fact, the manafort trial went a little bit, it went a little nuts today. It is not like it went nuts in that it went insane. It just veered off in a lot of directions at once. Paul manaforts attorney at one point elicited from rick gates that at some point a decade ago plrgs gates had had a secret extramarital affair on which he spent some of the money that he either earned alongside Paul Manafort or embezzled from Paul Manafort, depending on how you count the cash. Rick gates today also testified to a lot of nitty gritty details about how he help Paul Manafort lie about his income. Both to evade taxes and to obtain fraudulent loans from banks. But despite prosecutors having earlier asserted that the manafort case wasnt going to be about russia and was not going to be about trump and wasnt going to be about the Trump Campaign, the manafort trial did
veer toward those places today unexpectedly. The swerve toward russia took place while prosecutors were conducting their examination of rick gates. So rick gates is their own witness. Theyre doing a direct exam of rick gates. In that direct examination, prosecutors walked him through something we previously had not known about Paul Manaforts work in the soviet union. This is from the transcript. You testified earlier about payments from ukrainian businessmen to mr. Manafort. Did that include payments for policy work . It did. What time of policy work did he do in the ukraine . An, when victor was elected president , manafort entered into a Policy Contract. We describe it as Policy Advisory in the sense of once he was elected, he was elected on a platform of issues so manafort worked the local officials there to help implement the policy
initiatives based on those campaign promises. Question from the Prosecutor Waffle there an agreement for a twoyear Policy Contract . Or payment over a twoyear period of time . Well, it was, it started out potentially once the president was elected, it was on an annual basis. The belief was it would be for the duration of the tenure. In terms of two years, what were the material of the payments . What were continue stallment payments . Answer. The total was 4 million a year. And i think one year it was actually changed from a denomination Point Of View to 4 Million Euros per year. Thats new. And the reason that is a swerve toward russia today in this case is that what we previously knew about manafort was that he was being paid by yanukovych. We didnt know that Paul Manafort was also being paid 4
million aier or 4 Million Euros a year once yanukovych was in office to manage his policies as the leader of ukraine. The reason thats a swerve toward russia, once yanukovych was elected, it turned toward putin. The reason yanukovych was pulled out of office in an uprising, once he was in office, he turned hard line away from the e. U. And toward moss cue. Apparently while, we just learned today Paul Manafort was being paid 4 million a year to advise him on how he should govern. In the book russian roulette, they interviewed the Career State Department official who was the senior official. He asked her about what her reaction was when she learned that Paul Manafort had been named Trumps Campaign chairman
in 2016. She said her answer was this. Manafort . Manafort . She thought, quote, hes been a russian stooge for 15 years. Today we learned that manafort was not just getting pro russia politicians elected overseas. He was getting paid millions a year to manage the Policy Positions of at least one overseas Policy Position while he changed the direction of his country to align it Southwesterly Putin and russia. So that was a surprise revelation. Why did trump pick him . And then this one last thing. Again, prosecutors have gone out of their way to say that the manafort trial would not be about trump or the Trump Campaign. Thats where it went today. If youve been paying close attention to the manafort trial as it has been unfolding, you might have seen this unfolding for a while. Weve been reporting on the
disparity pieces of it as weve been paying attention to Paul Manafort. Today all of those pieces finally fit together in court. The first piece we saw was when we learned about what happened on the day that Paul Manafort quit the Trump Campaign. August 2016, under a cloud of revelations about his work in the soviet union, he quits the Trump Campaign. That same day, Paul Manafort also found time onset up a company, an llc called summerbreeze. That was weird, right . You would think he would have other priorities the day he was quitting running the republican nominees campaign for president. But he found time that day to set up summerbreeze. Then we learned that summerbreeze received multiple loans, totalling Something Like 16 million over just a few months after he left the campaign. And he got that in multiple loans from a tiny little bank in chicago. Those 16 million worth of loans
to Paul Manaforts summerbreeze were kind of a strange foray for that little bank. It represented a large portion of the loanable assets. It was set up. You could tell they would fit together but we couldnt tell how. Then in March Of Last year the Wall Street Journal gave us another piece. They were first to report on a strange detail involving the ceo of that bank that had given the Summer Breeze company the 16 million in lopez. The journal reported the ceo was lying to become trumps army secretary. Huh . That was a weird detail that made no sense for months. Then this year in february we got more, almost unbelievable laugh out loud geet that weird fact. Quote, around the time the bank made the loans if late 2016 and
early 2017, steven calk was seeking to become mr. Trumps army secretary. He was placing call to Army Headquarters asking for briefings to prepare himself for a possible job. His overtures to the army raised questions among Military Leaders as to how to respond. Hes calling the army saying im ready to be briefed for my my job. Sorry, your name is what . Then three days after that reporting about him calling the pentagon about his new job, local abc station in chicago was first to report that the sketchy loans had turned up of all places in the issues in the divorce filings of his exwife. Quote, former Trump Campaign chairman Paul Manaforts name has been dragged into a high dollar divorce case. The divorce case involved
chicago banker steven calk. Indeed, we on this show later obtained these Court Documents from that divorce case. I think these have never been shown on tv before. These documents show that as part of the Divorce Proceedings involving this banks ceo, his wifes attorneys specifically subpoenaed, quote, the entire loan file for any and all loans made to Paul Manafort or any third party on his behalf. The wifes attorneys updated subpoena to demand evidence referencing the source of funds use to fund any and all loans made to Paul Manafort, Summer Breeze llc or any agent or third party on his behalf. Why are they showing up in the divorce filings . Next piece of the puzzle came when the judge unsealed names. Two of the five witnesses granted immunity in exchange for the testimony turned out to be employees of the same little bank in smik made these loans. Why did they need immunity . So you see all of these pieces of the puzzle falling into place over the past, more than a year now. Today in court they finally all got fitted together. Rick gates on the Witness Stand gets confronted with exhibit 399. Subject, Defense DepartmentService Secretary from Paul Manafort to rick gates. Thistotal of email. Quote, rick, we need to discuss steve kauk for secretary of army. I hear the list is being considered this weekend. Signed p. I mean as crazy as it has seemed from the beginning, a its far
fetch as this allegation has seemed, ever it was it was hinted that there was a connection between Paul Manaforts weird allegations and the earl, it really looks like one of the things that happened on the donald trump for President Campaign is that the Campaign Chairman really did sell the promise of a judge running the United States army in exchange for cash. That apparently really happened. I wonder how the army feels about that . And that leaves me with one last question. Well get some expert legal advice in a second. I may be able to answer this last point. After the email was produced in court about the Trump Campaign apparently selling this would be job offer to run the army, the Defense Counsel for Paul Manafort asked Rick Gates In Open Court if anyone else from the Special Counsels office had questioned him about his own work on the Trump Campaign. Question, in terms of your cooperation with the Office Of Special Counsel after you took your plea, did you have occasion to be interviewed by other members of the Office Of Special Counsel about the Trump Campaign . Answer by rick gates, yes. Question, were you interviewed on several occasions with your time at the Trump Campaign . Interjection from the prosecutor. Objection, your honor. The judge says, all right. Do you need to come to the bench . The prosecutor says, please. The judge says all right. You may do so. And then this is the right next thing in the transcript. Pages 1399 through 1425 are filed under seal. Six pages sealed and were not allowed to see what happened next. The judge brings the lawyers to discuss it without the jury hearing. It does not end up in the transcript and we dont know what happened. Then they adjourn for a long recess there after. Paul manaforts case has back case that is in part about the
Trump Campaign. Not just because he was Trumps Campaign chair. Prosecutors went there today by essentially offering evidence in court that Trumps Campaign chairman was offering the job of running the u. S. Army for sale for cash. Why are they then also objecting to any further discussion about the Trump Campaign during this trial . I have a feeling tells us something important about what is supposed to happen next but we should get a really good lawyer here to decode it for us. We shall do so. Stay with us. Thank you. How many kids . My two. His three. Along with two dogs and jake, our new parrot. That is quite the family. Quite a lot of colleges to pay for though. A lot of colleges. You get any Financial Advice . Yeah, but im pretty sure its the same plan they sold me before. Well your situations totally changed now. Right, right. How bout a plan that works for 5 kids, 2 dogs and jake over here . That would be great. That would be great. That okay with you, jake . Get a portfolio that works for you now and as your needs change from td ameritrade
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trump surge area. And i can tell you, balderson got what he is looking for there. What we are seeing, 593 votes. Im seeing if this has changed, yes. 595. This is the story. It is a tale of two counties. Franklin county, where almost 90 of the vote is coming in. The number here democrats wanted to hit to have a chance with 60 . Oconner the running north of 60 with not a lot of votes coming in. The energy and everything you were looking for. Which is suburban, columbus, college educated, all that stuff. The energy the democrats are looking for is there and oconnor is going to get more votes. Hes going to pad more out here as the vote comes in and that will leave one question will decide this race. And it is delaware county. And you see here about 40 of the vote is in in delaware county. Oconnor won the early vote here. Weve seen it around 50 . The last few, the republican did 55. If balderson can add a couple votes to this, it will probably overwhelm the gains that oconnor made in delaware. If he cant do that, if he finishes around where he is, that would give oconnor a strength on what he is able to net out in front. That would give him a chance. So again, balderson, delaware is the key for oconnor. It squeezes as many votes as he can. And then hope youre competitive in delaware county. Hope balderson is not inching to 53, 54, 55 as the vote comes
in. Im checking to see. Oconnor, 88 of the vote in. This is a nail biter. This is going to be a fun night watching this stuff come in. We appreciate your time. Well be back soon. This is not a primary. This is a Special Election to decide who is going to congress from that district. It matters potentially as a bellwether. Thats why democrats are so excited at even having a shot. It was such a republican district. But it will decide whether a democrat or a republican represents the district in congress. When democrats are hook at trying against the odds to flip it back, every vote will count. Having an Incouple Bent would count. Even if it isnt a bellwether otherwise. Lots more to get to this busy night. [telephone ring] ahoyhoy. Alexander graham bell here. No, no, my number is one, you must want two two, i say like my father before. [telephone ring] like my father before. Ahoyhoy as long as people talk too loudly on the phone, you can count on geico saving folks money. Fifteen minutes could save you fifteen percent or more on car insurance. Teacher lets turn in your science papers. Tech vo this teacher always puts her students first. Student i did mine on volcanoes. Teacher you did . oh, i cant wait to read it. Tech vo so when she had auto glass damage. She chose safelite. With safelite, she could see exactly when wed be there. Teacher you must be pascal. Tech yes maam. Tech vo saving her time. [honk, honk] kids bye tech vo . So she can save the science project. Kids whoa kids vo safelite repair, safelite replace
every day. And thanks in large part to the judge in the case. He is about as friendly as an underfed alley cat caught in a rain storm. To be fair, there were clues that judge ellis might be testy in court like day two of the trial when judge ellis barked at prosecutors that they needed to rein in their facial expressions and not roll their eyes. It turns out it is a seriously sensitive issue for the judge. He has scolded the prosecutor for furrowing their brows. He has literally criticized them for looking puzzled. He frequently yells at them. He yelled, quote, look at me when youre talking to me. Im sorry, i was. No, you werent. You were looking down. Because i dont want to get yelled at for having a facial
expression when im not doing anything wrong but trying my case. Judge ellis, i understand how frustrated you are. In fact, there are tears in your eyes right now. Prosecutor, there are not tears in my eyes. Well, theyre watery. He literally said that. No crying in court. That wasnt the end. He has insisted that he doesnt want the word oligarch used in the courtroom. While explaining that new rule, one of muellers prosecutors glanced down, apparently. At which point judge ellis that, quote, im here, mr. Andres. The prosecutor. Im sorry, judge, im listening. To which the judge said i know, but when you look down it is as if to say thats bmp s. I dont want to liberty anymore from you. You continue to interpret our reactions in some way. We dont do that to you and
were not being disrespectful in any way. Judge ellis, all right, well then look at me. Prosecutor, fine. Judge ellis, dont look down, dont roll your eyes. Im not rolling. I dont understand how judge ellis, you may not have rolled your eyes but youre not the only person sitting on that side. The prosecutor said i would find it interesting to see that im both looking down and your noticing that i was rolling my eyes. If you are having flashbacks to a nun smacking with you a ruler in catechism class, youre not alone. They were in the courtroom for us today. Theyre going to join us next. Stay with us. Today. Right before we came to air, im it out and im terrible but bear with me. This is Trump Campaign chairman Paul Manafort. His Defense Attorney cross examining the guy that has turned into the star witness in this trial. The star witness against his trial is manaforts former deputy rick gates. So heres the defense lawyer. After all the lies you told and fraud youve committed, you expect this jury to believe you . Rick gates. Yes. Lawyer. Uncorroborated . Yes. Lawyer, do you open the Office Of Special Counsel thinks the same way . Gates, yes. Lawyer, because theyre the ones who will write you the 5 k 1 letter . The letter that will keep gates out of jail . Gates, they will. Theyre the ones who will let your lawyer say you get Probation Unopposed . Yes. Lawyer, even if you lie . Answer. But i havent. And ill here to question. And the jury is supposed to believe that . Yes. Because im here to tell the truthful im here because i made a decision to take responsibility for my actions. Mr. Manafort had the same path. Im here. From rick gates. Im here. Unlike your guy. Gosh was in court today and has been since court started. So today was rick gates second day on the stand. I think well have him on the stand at least for tomorrow morning as well. What do you think was important about his testimony . Other than the human drama . Well, there were several hours of testimony this morning that was pretty dry before we got to the crossexamination. It became pretty clear that he is intimately familiar with manaforts finances, at least with respect to the overseas company. In places like cypress, they
moved the accounts to a place in the caribbean called the glen deans. Gates seemed to recall from memory each of these entities. The name of it. And which specific oligarch. The judge didnt want to use the term oligarch so well say wealthy businessman, typically from ukraine. That portion of his testimony seemed very credible and pretty incriminating toward manafort. When i think the crossexamination started, things got more difficult because his testimony became more halting and it seemed everything more nervous. Then we got into the extramarital affair issue which would make anyone feel uncomfortable. It was brought up as color or elaboration on rick gates being a bad guy who should be seen as an enemy of manaforts . Well, i think the nominal reason was that there was this evidence that gates has admitted that he embezzled from manafort, perhaps from the oligarchs by inflating his expense accounts. It seems that the Defense Attorney was trying on discuss that some of the money was needed perhaps by gates or gates may have taken more than the several hundred thousand he admitted to because he was living what manaforts lawyer called a secret life. He said this was another rick gates. And this involved consorting with a woman in the United Kingdom on his way to and from the ukraine. That this might have been very expensive and might have explained why he was stealing so much money from Paul Manafort. It was a bit of a distraction but enough to throw a star witness off his rhythm. Weve heard, not necessarily
gossip but peoples impression thats manaforts team seemed very pleased with how it went today. That this was what they were aiming for with rick gates. The crossexamination is sort c sort of turning things in their way, as a matter of substance in terms of the evidence against manafort and what the jury will consider. Was that your impression as well . I thought that gates did okay. I thought it was sort of a middling kind of performance. I didnt feel like he fell apart on the stand. I didnt feel like it was a mistake for prosecutors to put him on. And remember that prosecutors are deliberately sandwiching gates in the middle of this case between a lot of more dry technical Documentary Evidence and more testimony to come on the other side as if to say whatever the media or other folks say gates is not the star witness, that this is still primarily a document case. So i think that prosecutors handled it that way to try to take out sort of an insurance
policy. And so they have some time to try to rehabilitate gates, they can try to do that directly in some further examination of him tomorrow morning probably, and then with some other witnesses they can kind of button up this case and really bring it home to the jury. Josh gerstein, covering the trial for politico. Com, joining us here tonight. Josh, thank you very much. Much appreciated. I now want to bring in barbara mcquade, former u. S. Attorney in michigan. These been in court as well since the trial starteded. Barb, its great to have you. Thanks for being here. Thanks, rachel. I bring greetings from all of your fans in the courtroom. Oh, that is hard to believe. But thank you. Let me ask you a legal question that i dont know wholesale to ask but i know youve been there. We have been looking at the transcript and we have been Hearing Reports from people in the courtroom about the judge really riding the prosecutors. Criticizing their facial expressions, which direction theyre looking, controlling words they might want to ask,
cutting them off in their questions. It seems like the judge is being much harder on the prosecutors than hes being on the Defense Attorneys. Whats your impression of that, and should those of us who Arent Lawyers and dont necessarily know how trials usually go, should we see this as unusual or important . I do think its unusual. Its not unusual that a judge wants to take command of a courtroom. He wants to make everyone understand that he is going to run a tight ship and he wants things to move along quickly. But i have not seen a judge be so involved in a case as this one. To me the most damaging thing he did is he interjects his own statements, he asks questions. Today at the end of the day rick gates testified Something LikePaul Manafort was very involved in all of his finances, and the judge interjected himself and said, well, apparently not that closely because you were able to steal all that money from him. You know, a jury hears that and sees this person as an independent, impartial Decision Maker whos an expense in the law. What are they supposed to take from that . I think he is far too involved in the case and could really throw a Monkey Wrench in the
works for the prosecution. And in terms of the way that Monkey Wrench might play out, i suppose either side depending on how the jury decides and what the outcome is of this case, could either side use the judges behavior here to potentially question the outcome, appeal the case on that basis . So the answer to that is no and thats why it can be so damaging to the prosecution. If the defense loses and theres a conviction the defense has a right to appeal. If the prosecution loses and the defendant is akuwaited they have no right to appeal because of the Double Jeopardy Clause of the fifth amendment. The defendant cannot twice be held in jeopardy once the jury is sworn. As a result of that you do see this from time to time where the judge is a little harder on the prosecution, keeps out some questionable evidence and sometimes theyll even say to you on the record, prosecution, im doing you a favor because youre going ton only win the battle but youre going to win the war because you dont benefit if i allow some evidence in and it turns out to be an error and you get a conviction here but it gets reversed on appeal. So sometimes judges do err on
kind of reining in the prosecution and evidence for that reason, they dont want to get a reversal on appeal. But in thins tans where they go so far overboard there isnt much recourse. There is something called a Writ Of Mandamus for really outrageous behavior. I doubt well get to that territory but i could see this having a damaging effect on the jury. You really worry about that. And the government basically has no recourse. Barb, there is one more element of this case i want to ask you about. Can i ask you to stay with us for a quick second . We need to take a quick break and then well come back on the other side and ask you about one other matter. You bet. Barbara mcquade joins us when we come back. Please stay with us. This is not a bed. And snoring . How smart is that . Smarter sleep. To help you lose your dad bod, train for that marathon, and wake up with the patience of a saint. The new sleep number 360 smart bed, from 999. Smarter sleep will change your life. But allstate actually helps you drive safely. With drivewise. It lets you know when you go too fast. And brake too hard. With feedback to help you drive safer. Giving you the power to actually lower your cost. Unfortunately, it cant do anything about that. Now that you know the truth. Are you in good hands . Joining us once again is barb mcquade, former u. S. Attorney in michigan who has been in the Manafort Trial Court since this trial started a few days ago. Barb, thank you for sticking with me. Much appreciated. You bet. I wanted to ask you about the first time it has come up at the manafort trial that manafort actually had something to do with the Trump Campaign. Prosecutors today offered evidence that manafort had tried to get a job offer, Secretary Of The Army job offer tore a Bank President who had given him what appeared to be some sketchy loans. That was introduced by prosecutors today. But then prosecutors, thereafter, shortly thereafter, objected when manaforts Defense Counsel tried to talk to gates more about whether or not hed been interviewed by the Special Counsel about his time on the Trump Campaign. That left me really wondering if the Trump Campaign is now fair game or not fair game in terms
of what else is going to be discussed at this trial, whether we should expect more references to the president and his campaign. I think if it comes in it will be very narrow. The questions that the prosecution asked about relate directly to one of the counts of bank fraud, this loan from steven cox bank. So i think thats why the piece of it became relevant. The question asked by the defense was ach broader one, which was they were going to get into what have you told the Special Counsel about your time on the Trump Campaign, which could really open the door to information about Ongoing Investigation relating to the Trump Campaign. The prosecution immediately jumped up and objected when that happened. There was a lengthy sidebar and a break. And then the next question about that related to a completely different topic. I think if it comes up it will be very narrow. When we see that happen and the judge brings the lawyers up to the bench and they talk and were not allowed to hear it, but then the conversation starts up again in a totally different direction, does that imply that the judge sustained the objection and that the defense actually isnt allowed to go there . I think so. In that scenario i think so. You know, not in every scenario,