Trump says media trying to convince public there will be a recession

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Trump says media trying to convince public there will be a recession

Reaction from Fox News contributor Jessica Tarlov and Fox Business senior correspondent Charles Gasparino.

This is a rush transcript from "The Story," August 28, 2019. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, ANCHOR: And you do an excellent job at that and we continue it right now. Bret, thank you very much.

So, a Fox News "ALERT" tonight with breaking news. As we get ready for the imminent release now of the inspector general's report on the origins of the Russia probe, a new bombshell as we learn now that the inspector general has another surprise first.

He will be releasing, reports say, a separate assessment on the actions of fired FBI director James Comey. Specifically, with regard to his riding and then leaking memos to the press.

Comey himself revealed his action and thinking in this attention-grabbing moment back in the summer of 2017.

(BEGIN VIDEO CLIP)

JAMES COMEY, FORMER DIRECTOR, FEDERAL BUREAU OF INVESTIGATION: I woke up in the middle of the night, on Monday night, because it didn't dawn on me originally, that there might be corroboration for our conversation. There might be a tape. And my judgment was, I needed to get that out into the public square.

And so I asked a friend of mine to share the content of the memo with a reporter. Didn't do it myself for a variety of reasons, but I asked him to because I thought that might prompt the appointment of a special counsel.

(END VIDEO CLIP)

MACCALLUM: All right. So, we know that the Department of Justice decided not to prosecute James Comey. But he is there some kind of perhaps, talking to reprimand coming in the form of this for releasing those FBI memos that may or may not have been considered classified. That is all to be revealed.

In moments, former acting Attorney General Matt Whitaker on all of this. But first up, Jason Chaffetz, former Oversight Committee chairman, now a Fox News contributor, and author of the brand-new book, Power Grab the Liberal Scheme to Undermine Trump, the GOP, and Our Republic. Good to see you tonight, Jason.

JASON CHAFFETZ, CONTRIBUTOR: Thank you.

MACCALLUM: So, that's the first question, why since the Department of Justice has made it clear that they are not going to prosecute James Comey for anything? Why is there were no, and how did this come about that they are going to release a separate report on his activities?

CHAFFETZ: If they do so, I think it would catch a lot of people by surprise. You have to look back a number of weeks ago. The deputy assistant director was reprimanded, if you will, by the inspector general, and called him out for releasing sealed court documents.

He recommended prosecution, but the Department of Justice decided not to prosecute. And a lot of us were scratching their head. Why not do that? And so, now, you have Mr. Comey, again releasing potentially classified information out into the public square.

But remember, the Department of Justice wouldn't prosecute Clinton and anybody else. And so, the big key question, the seminal question for the Department of Justice which is really a shift in the last 24 months, are they going to prosecute the mishandling of classified information or sealed documents? It looks like the answer is no.

But what is -- what Mr. Comey has done is -- in the Department of Justice, is try to prosecute people like Flynn and Papadopoulos for lying to prosecutors. And McCabe, remember he is the number two person.

MACCALLUM: Right.

CHAFFETZ: The acting of FBI director at one point, for lying multiple times under oath to Department of Justice officials. That seems to be something that they might prosecute. And so, they're going to have to kind of separate out Comey, separate out the deputy assistant director, a different person.

MACCALLUM: But what -- my question is where is this -- you know if there's going to be a separate report on Comey's activities, where is the motivation for that coming from? Is that -- is that the attorney general saying to Horowitz, perhaps? You know, we'd like to see what your findings were here.

We're not going to prosecute, but we want to know if there's anything that was -- you know, that was out of whack here.

CHAFFETZ: The inspector general can do pretty much whatever report they want. They have autonomy, but they --

(CROSSTALK)

MACCALLUM: So, you think it comes from Horowitz, he's the genesis of this.

CHAFFETZ: When I also think there's a lot of pressure from Congress, I think particularly the Republicans both in the House and the Senate, people have been pushing for this. Jim Jordan, the Mark meadows, Trey Gowdy, when he was there.

These people have been pushing for this and they has to be some answer from the inspector general.

MACCALLUM: All right. So, with regard to the second -- I want to stick with the James Comey question for one minute here. Just to remind everybody at home, you know, what might have been the problem?

They just saw that sound bite where he says that he released some of his memos, and we remember that he met with President Trump, and then he got into the FBI vehicle, and open to the FBI laptop which is part of the issue at hand here. And started taking notes on his discussions with the president.

Then, he made it perfectly clear. He released some of that information to the press, found a way to get that out because he wanted to provoke a special counsel. Is there anything wrong with that?

CHAFFETZ: Yes.

MACCALLUM: That thing?

CHAFFETZ: Yes, you cannot. And no matter if you're the FBI director or so some low-level person at the Department of Interior, you cannot take government records and just unilaterally put them out there, particularly, if they have a degree of classification.

MACCALLUM: But he would absolutely disagree with you because he said it in an -- in testimony in front of Congress.

CHAFFETZ: But, and this is where his area of most vulnerability is. That's why people like John Radcliffe and the others have been saying, no you can't do that. But think -- but they've pretty much, the Department of Justice has given a pass to people on doing this in the past. They certainly did with Clinton and her whole team.

But the question is, are they going to prosecute people for lying to cut -- to federal investigators? That's why the McCabe part of this is so critical. And so, if this news is correct that this report on Comey is coming, it does open up this lane to say, what are we going to do with Mr. McCabe?

MACCALLUM: Here's one other potential issue that came up. This is on December 9th. James Comey said this about the way that they approached Michael Flynn. Watch this.

(BEGIN VIDEO CLIP)

COMEY: Something we -- I, probably wouldn't have done or maybe gotten away within a more organized investigation, more organized administration. And so, if the FBI wanted to send agents into the White House itself to interview a senior official, you would work through the White House Counsel, and there'll be discussions and approvals, and who would be there. And I thought it's early enough, let's just send a couple of guys over.

(END VIDEO CLIP)

MACCALLUM: Let's just send a couple of guys over because they don't know what they're doing over there. And it won't be a problem. Is there anything unethical or illegal or wrong about what he did?

He says it wasn't our fault. You know, if they're willing to answer the questions, then, then so be it.

They work for the President of the United States. It was the same James Comey who said, he doesn't do sneaky stuff, that he doesn't do leaking, he doesn't do -- he does all of those things.

And not only is it ethically, I think, across the line, but there's -- what was the predicate to do that? Why were they doing that? This president had been in office for literally hours before they started to hatch this plan.

MACCALLUM: Yes, and that goes back to Bill Barr's phrase if it was adequately predicated. Predicated. Thank you very much, Jason Chaffetz.

CHAFFETZ: Thank you.

MACCALLUM: I want to bring in another take on this breaking story tonight. Former acting Attorney General Matt Whitaker. Matt, good to see you tonight. Your reaction to the potential for this Comey memo, Comey report?

MATTHEW WHITAKER, FORMER ACTING UNITED STATES ATTORNEY GENERAL: Well, I think it's going to lay bare a lot of sort of the rumors or innuendo we've heard. It's going to say specifically what Jim did leak? And how he leaked it? And I think one of the things it's also going to lay bare once you hear the story of Comey and McCabe told together is that there was a culture of leaking in the -- in the senior offices at the FBI that really - - was out of control.

And these folks were running their own plays, they were not -- they did not believe that they were in the chain of command at the Department of Justice. And, you know, Jim is really demonstrating why he was fired, quite frankly.

MACCALLUM: You know, I mean the thinking was at the time and there were a numerous stories that were written about this. That they were desperate to get this stuff into the bloodstream. That they were afraid that there would be -- you know, sort of a changing of the guard with this new president.

They had found all of this stuff that they thought was so damning. And they wanted to make sure that it didn't die with them if they left their positions, right?

WHITAKER: Well, they did believe that. But they also believed that somehow that they were above the law or that they only knew best. And it was really a dangerous culture. And I think, you know, this the inspector general report, both about Jim and about the origins of the investigation together with what we expect to happen to Andy McCabe, in the coming days.

I think it's going to really demonstrate the how backwards the director and the deputy director in the Comey FBI really ran that operation.

MACCALLUM: Yes. So, Ben with us, who's a friend of James Comey's, and he writes Lawfare blog which is a widely read blog inside of this community. He says that it, it really looks like the writing is on the wall that Andrew McCabe will be prosecuted because he says there's no other reason for that meeting between his top-level attorneys and the Department of Justice other than, you know, a last-ditch effort to sort of say, look, there is a way to back away from this.

Is that you're -- do you agree with that?

WHITAKER: I do. And what I know having been both the acting attorney general and chief of staff, and a U.S. attorney is that there is something that sophisticated defense lawyers know as a -- was someone's a dag appeal or a deputy attorney general appeal.

Where if you disagree with the U.S. Attorney's Office, in this case, the district of the District of Columbia Jesse Liu was the attorney, if you disagree with their decision, sometimes you can get a hearing or an audience with the deputy attorney general to lay out your case as to why your client shouldn't be charged.

I have not seen a dag appeal be successful, I have seen them many times with again, with sophisticated defense lawyers, but this is usually when somebody is eminently going to be charged, they try to get to the deputy attorney general and plead their case.

MACCALLUM: All right, he also -- what is also went on to say that he thinks that it would be unprecedented for an employee to be reprimanded in form of prosecution. And he thinks that that would be a bridge too far.

So, we will see what happens. Matt Whitaker, thank you very much.

WHITAKER: Thank you.

MACCALLUM: Jason Chaffetz, good to see you both tonight.

So, coming up next, trouble tonight for Lawrence O'Donnell after he made an allegation which he now admits was without proper sourcing.

(BEGIN VIDEO CLIP)

LAWRENCE O'DONNELL, HOST, MSNBC: Donald Trump's loan documents there show that he has co-signers. That's how he was able to obtain those loans and that the co-signers are Russian oligarchs.

RACHEL MADDOW, HOST, MSNBC: What?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT: The fake news of which many of you are members is trying to convince the public to have a recession. Let's have a recession. The United States is doing phenomenally well.

(END VIDEO CLIP)

MACCALLUM: Indeed, consumer confidence in America is at a 19-year high right now. But the president says that commentators are talking the economy down.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: All these recession fears that we've been hearing about, and that the President has been angrily blaming the media for.

UNIDENTIFIED MALE: A recession would be very worth getting rid of Donald Trump and these kinds of policies.

UNIDENTIFIED MALE: It's possible that the best thing that you could hope for is a recession, as painful as that might be for the American people, but it might be less painful than four more years of Mr. Chaos.

(END VIDEO CLIP)

MACCALLUM: So you get the idea. Tonight, a new Quinnipiac poll shows that for the first time ever, more voters see the economy as getting worse and not better during this current administration. Now the latest numbers show a record hiring streak continued wage growth and an unemployment rate that is holding at a 40 year low.

Clete Willems is a former Deputy Assistant to the President for International Economic Affairs, and former Deputy Director of the National Economic Council. Clete, good to have you here tonight.

CLETE WILLEMS, FORMER DEPUTY ASSISTANT TO THE PRESIDENT FOR INTERNATIONAL ECONOMIC AFFAIRS: Thank you.

MACCALLUM: You know, so what's the truth? Is there the possibility of a recession? I guess there's always the possibility of a recession. In fact, it's kind of odd that the expansion has gone on for as long as it has. But what odds do you put on it?

WILLEMS: Well, I think these fears about an imminent recession are a little bit overblown. As you mentioned, we are in a historically strong period. A lot of this is due to the President's policy, to the tax cuts to the deregulation, but some of the numbers that you put up there are extremely telling. I mean, let's look at people working.

We've got an unemployment rate that's basically as low as it's been since the 1960s, across all demographic groups, and you've got jobs being created, in the manufacturing sector, over half a million jobs in the last two years. You've also got wage growth going up not only for white-collar workers, but for blue-collar workers.

It's that means that people have more money in their pockets. And you see some of that manifested in greater saving, greater spending, and still really strong numbers and consumer confidence. So I do think some of that is overblown. You know, that said, the administration always needs to be vigilant, always needs to be thinking about ways that continue to improve the economy. And you know, there's a lot of things that they can do --

MACCALLUM: So -- excuse me, the President believes that the Fed sort of popped, you know, a bubble in a way and that is the reason that there are some concern that the growth slowed down a little bit, the President had said it was going to get to four percent, maybe even five percent. It went from 3.2 I think down into the two range.

He thinks that's the feds' fault. Other people point to these trade tensions, that that is what is sort of cooling the heels of this very hot economy right now. That's something that you worked on very closely. Is there any hope that the trade issue gets resolved in a way that eases these recession fears?

WILLEMS: Well, there's a lot going on internationally. We are in a global economy and these trade issues are part of what is going to help our economy continue to grow, or to go in a different direction. And what I was going to say is, I think one of the most important things that we can do is Democrats and Republicans need to get together and pass the USMCA agreement.

I think that is something that could be very positive for our economy. It's something that's predicted to create almost 200,000 jobs in the United States, a lot of jobs in the automotive sector, and it really hits all the major democratic priorities on labor and environment and things like that.

MACCALLUM: What do think of the likelihood of that happening? How likely is that?

WILLEMS: I've heard good things. I've heard that, that the Democrats on the Hill, Speaker Pelosi has been working well with the team at USTR so I'm optimistic. Obviously, there's also the China stuff going on, which is an area where we need to take this on for long term economic growth.

We just cannot be in a situation where we go another decade, China continues to get away with intellectual property theft and stealing our jobs. And so the administration is right to deal with this and I think --

MACCALLUM: I hear that across the board. Everybody agrees that it is something that needs to be dealt with. It just seems like people don't want to go through the pain that it takes to deal with it. And we'll see you know, whether or not they will and whether or not we're going to deal in the short term. Clete, thank you very much. Nice to have you here tonight.

WILLEMS: My pleasure.

MACCALLUM: Joining me now Charlie Gasparino Fox Business Network Senior Correspondent and Jessica Tarlov Senior Director at research -- of Research at Bustle.com and a Fox News Contributor. You know her well, we know them both well. Great to see both of you tonight.

JESSICA TARLOV, CONTRIBUTOR: Thanks, Martha.

MACCALLUM: Jess, let me start with you because I know that you have argued that people feel like the economy is headed in the right direction, but none of the numbers that just were laid out support that idea.

TARLOV: Well, this is a new poll. As you pointed out, this is a change or reversal there. The President still the only area in which he's in the -- in the positive area in terms of managing is the economy, not immigration, not health care. So you pointed out the consumer competence number is very good, it dipped a little over the last month.

I think where you're really seeing the issues right now in terms of sentiment is that there are a bunch of banks that are running about up to a 33 percent chance of going into recession, you have contractions in manufacturing and business investment, the trade deficit and the fear of a trade war and what that will do to the American economy when we know that individual taxpayers are the ones bearing the brunt of those tariffs.

Those are things that make people economically pessimistic. I'm not in the Bill Maher camp here, but when the president says continually, you know, this is why I'm on Twitter, look at my Twitter account to know what I'm thinking what I'm doing. If you read his Twitter account on Friday, which was completely schizophrenic going after Jay Powell starting -- thank you, Charlie, for the little chuckle there. You know, I mean, President Xi --

CHARLIE GASPARINO, FOX BUSINESS NETWORK SENIOR CORRESPONDENT: No, I was saying he's the first president to go --

MACCALLUM: Go ahead, Charlie.

GASPARINO: He's not the first President to go after the Fed chair.

TARLOV: Not like that, Charlie. Who's worse, President Xi or Jay Powell?

GASPARINO: Listen, listen, I will say this. President Trump is unique in many ways, but he's not first president to go after the Fed chair, not even -- the saintly Ronald Reagan did it all, often through surrogates, but he did it when Paul Volcker had rates at very high levels.

Listen, I'll say this. You know, I can't tell you where the -- where the economy is going. No one really knows whether the tax cuts, deregulation will sort of overwhelm any of the trade concerns. People might be reacting fundamentally to the markets. The markets are going nuts right now.

The reason why both the bond and the stock market, because investors are having a quarrel. They don't know whether we're going into reception -- recession and they are trading based on some thinks that we are some think we're not. And that's kind of where we are now.

But I will say this. If you look at the numbers themselves, we're not even close to a recession right now on any level.

TARLOV: What about the inverted yield curve though?

MACCALLUM: It keeps --

GASPARINO: By the way, that's part of the debate that's going on.

MACCALLUM: Yes.

GASPARINO: Some days, it's inverted, and some days, it's not.

MACCALLUM: And when it stays inverted, Charlie, correct me if I'm wrong, but if it stays inverted for a long period of time, that usually signals that a recession is going to happen 22 to 24 months out.

GASPARINO: Right.

MACCALLUM: So that's a really long time during which a lot of things could happen.

GASPARINO: Right. What does it mean to be -- an inverted yield? I know it's crazy to say this. It means people are buying bonds because they're worried about the future, maybe a recession. Bonds do better during recession. But my point is, they're betting. They're not -- none of these are indicators. The indicators will be GDP, corporate earnings, unemployment --

(CROSSTALK)

MACCALLUM: I think medium household income is at its highest.

GASPARINO: When those start -- when those start turning -- when those start turning negative, then that's when you start thinking recession.

MACCALLUM: OK.

GASPARINO: And those aren't negative right now.

MACCALLUM: So Jessica, real quick. You know, your other takeaway from the polls here, because they've had the President down against every major Democratic candidate in this Quinnipiac poll, very difficult time with women voters and with black voters and Biden's going to feel happy about this poll compared to the Monmouth one which had him you know, losing ground.

TARLOV: Well, Monmouth pollster who is extremely well respected and no one is certainly criticizing him for the methodology. Their head has even published a note saying this is clearly an outlier. We've had three national polls since then that show us back to normal with Biden up about even 12, 13 points.

But the 16 point edge and the head to head with President Trump certainly has the Biden camp smiling there, and he's almost at 50 percent with African American voters. I can't emphasize enough. How important is that people consider the fact that the road to the Democratic nomination and to victory in 2020, runs through communities of color for the Democratic Party.

And Elizabeth Warren is surging, but she has not surging with that community and you can't get there without it.

MACCALLUM: All right. And I just want to change gears here for just a moment and ask Charlie a question, because you've done a lot of reporting on the President's taxes, on the Deutsche Bank relationship.

GASPARINO: Some of that --

MACCALLUM: So last night, Lawrence O'Donnell comes out with what he says is this bombshell headline. And here's what he said. Watch this.

(BEGIN VIDEO CLIP)

O'DONNELL: No one knows more about this subject than you do. so I want to get your reaction to what it could mean if true, and I stress if true, because this is a single source. Donald Trump's loan documents their show that he has co-signers. That's how he was able to obtain those loans, and that the co-signers are Russian oligarchs.

MADDOW: What?

(END VIDEO CLIP)

MACCALLUM: What? So Lawrence O'Donnell tweeted today, last night I made an error in judgment by reporting an item about the President's finances that didn't go through our rigorous verification and standards process. I shouldn't have reported it and I was wrong to discuss it on the air. I will address the issue on my show tonight. Charlie, what do you say about that story?

GASPARINO: Well, as a journalist -- first off, we all make mistakes. Woodward and Bernstein made a bunch of mistakes on the road to Watergate that were pretty bad so just remember that. Lawrence O'Donnell, you know, I when you kind of unpacks this, he did say it was a single-source story. He did say if true. I still don't think he should went with it.

I think -- and by the way, he should have been like an adult in a room. Like we reporters are all -- we love our sources, right? We think our sources always telling us the truth. But usually there's an adult that says wait a second, single source, let's not go with it. And I think you know, he should -- he did fess up so give kudos for that. But it's really the person that approved that story and it's got to be a producer or somebody that runs the show.

MACCALLUM: I doubt it. I would imagine that you know, he decided that he wanted to go with it but as you say, he came out and corrected it today because no doubt there was some pressure --

GASPARINO: Well, someone made him apologize.

MACCALLUM: Yes, so we'll see.

TARLOV: It might have been the President's potential lawsuit that made him apologize.

MACCALLUM: All right, guys, I got to go. Thank you so much.

TARLOV: Thanks, Martha. Bye, Charlie.

MACCALLUM: Good to see you both. So a doctor says that Congresswoman Ilhan Omar stole her husband. But the story is also kicking up some serious questions about congressional payments, and how her campaigns spent their money. For that side of the story, stick around.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So they had OxyContin beach hats that they were given. And this was the CD of (INAUDIBLE), "Swing in the right direction with OxyContin." You know, you wouldn't have a beach hat that says morphine on it, or you wouldn't have a beach hat that says heroine on it.

(END VIDEO CLIP)

MACCALLUM: No, you would not. The Sackler family made billions off of OxyContin. Now, their company, Purdue Pharma, is trying to settle the myriad of cases against them all across the country for their role in the nationwide opioid crisis that took 72,000 lives just over the course of the last year alone.

Now, Purdue says that it didn't initially realize the drug was being abused. In fact, in a newly released deposition from 2015, Richard Sackler, Purdue's former chairman, claimed that doctors and patients were giving OxyContin rave reviews.

(BEGIN VIDEO CLIP)

RICHARD SACKLER, FORMER PURDUE PHARMA CHAIRMAN: When I did speak to physicians at meetings, I didn't go on sales calls. Some meetings and conferences, they were extremely enthusiastic about the effectiveness and the safety and the reception their patients had, response they had to the product.

(END VIDEO CLIP)

MACCALLUM: But a confidential Justice Department memo recently obtained by The New York Times tells a much different story. It shows Purdue Pharma knew what was happening with OxyContin shortly before the drug was introduced and concealed the information as the drug made them mountains of money and people were dying from painkiller addiction.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: According to the federal investigators, they found at least 117 reports where produce sale reps were telling the company that OxyContin had become effectively a popular drug of abuse.

UNIDENTIFIED MALE: Really? I have not seen that information before. But it could have made a real difference.

(END VIDEO CLIP)

MACCALLUM: Joining me now, Jonathan Novak, former DEA attorney. Jonathan, thank you very much for being here tonight. You know, what -- what are your thoughts as you look at this perhaps settlement that is coming in the $12 billion-range that is going to restructure this company? You know, where is the money going to go from that, do you think?

JONATHAN NOVAK, FORMER DEA ATTORNEY: Oh, this is a really -- a really interesting question that we've been asking all along in these lawsuits.

MACCALLUM: Yeah.

NOVAK: You know, we saw in the tobacco litigation, for instance, that money came and it went directly to the states and to the state legislatures, money that was supposed to help the communities, and it got diverted to roads and vanity projects.

And part of this entire process here for the plaintiffs is trying to make sure that that doesn't happen again. We want to make sure that money is actually going to the communities where the problem is occurring.

MACCALLUM: So, you know, you have an idea about how it should be divided up specifically. And when we have talked to people who have family members that they have lost to this day, they say, "We don't have these treatment centers. And the treatment centers don't keep people long enough. They keep them for 12 months, and then they go back on it. It doesn't work."

These are really practical things that could be done with this money. Is that going to happen?

NOVAK: I mean I'm going to do everything I can to help make that happen. The problem is you've got -- you've really got two areas where the money is needed. And the first is going to be exactly that, treatment programs.

Something that people don't really understand about opioids is a 28-day program doesn't do anything. And people who don't have health insurance might not even get 28 days.

The groups that are putting out actual good programs right now, they are running one to two-year long-term inpatient programs. That takes a lot of money.

But you have to balance that against the fact that communities that are hit with this problem, they spent the last 20 years, they got unfunded mandates to carry Narcan, they had the higher more first responders, they had to increase their police force, they had to hire more attorneys and prosecutors --

MACCALLUM: So expensive of all across the board.

NOVAK: Right, so this money needs to be able to go to that, too.

MACCALLUM: I think there are valuable lessons to be learned from what happened with the tobacco companies because it's so similar in terms of their inability or decision not to admit what they understood about the addiction, and then they had to pay the price. Let's go back to 1994 and watch a moment from this hearing on the Hill.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Yes or no, do you believe nicotine is not addictive?

UNIDENTIFIED MALE: I don't believe that nicotine or our products are addictive.

UNIDENTIFIED MALE: I believe nicotine is not addictive.

UNIDENTIFIED MALE: I believe nicotine is not addictive.

UNIDENTIFIED MALE: I believe nicotine is not addictive.

UNIDENTIFIED MALE: And I, too, believe that nicotine is not addictive.

(END VIDEO CLIP)

MACCALLUM: Did they know then that it was?

NOVAK: Yes, absolutely.

MACCALLUM: I mean you worked on that, right? I mean, you were involved in all of that. Why have we not learned these lessons, right? You wonder what's next. What is the thing that is being hidden now that is dangerous to society, that some of these companies might know about? What are the lessons from what we learned with tobacco?

NOVAK: I think the lessons we learned from tobacco are, number one, we need to stay vigilant on these things, but number two, we can't trust our state legislatures to help us with these problems. And I think we always have to be looking for what's next.

It seems that companies are out there looking for ways to take advantage and looking for ways to skirt the laws, and basically make as much money as they can as quickly as possible.

MACCALLUM: Mr. Novak, thank you very much, good to speak with you tonight.

NOVAK: Thank you for having me.

MACCALLUM: Yeah, absolutely. Thank you.

So an incoming freshman on his way to Harvard was suddenly stopped by border patrol and barred from entering our country. What they found and what his explanation is are raising a ton of questions tonight. That's next.

(COMMERCIAL BREAK)

MACCALLUM: So an incoming freshman on his way to Harvard was stopped by border patrol, and he was barred from entering the country, just days before he was supposed to start classes. Why? That's what a lot of people are trying to figure out tonight.

Immigration activists are crying foul, and the DHS is very tight-lipped on this case. Breaking news correspondent Trace Gallagher has the story for us tonight. Hi, Trace.

TRACE GALLAGHER, BREAKING NEWS CORRESPONDENT: Hi, Martha. So far, all the information of the story is coming from one source, the student himself, 17-year-old Ismail Ajjawi, a Palestinian raised in Lebanon.

Ajjawi told The Harvard Crimson that when he arrived at Boston Logan Airport last Friday night, he was questioned by immigration agents for eight hours. And when they checked his social media history, they found that people on his friend's list had posted political points of view that opposed the United States.

And now free speech and immigration groups are crying foul, saying, it's unfair to blame the student for things his friends said. Again, we don't know if Ajjawi's allegations are accurate or unchallenged because Customs and Border Protection isn't allowed to comment on individual immigration cases.

We have called and emailed CBP a number of times and there has been no response beyond saying that Ismail Ajjawi was deemed inadmissible, quoting here, "Applicants must demonstrate they are admissible into the U.S. by overcoming all grounds of inadmissibility including health-related grounds, criminality, security reasons, public charge, labor certification, illegal entrants and immigration violations, documentation requirements, and miscellanies grounds."

It's a long list. But CBP adds there are multiple layers of review before admission is denied. Meantime, Harvard is now working closely with Ajjawi's family and the non-profit that awarded him the scholarship, and they hope to get him into school before classes begin next week.

We should note just a few months ago, Harvard President Lawrence Bacow wrote a letter to Secretary of State Mike Pompeo, saying that foreign scholars are increasingly getting postponements and disruptions for what traditionally had been routine immigration procedures. Martha?

MACCALLUM: Let's stay on it. Trace, thank you very much for that report.

GALLAGHER: Yup.

MACCALLUM: So what does the country look like when patriotism is on the decline? We've seen that in a study this week, and Mike Huckabee joins us, next.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I hate this country.

UNIDENTIFIED MALE (voice-over): Why?

UNIDENTIFIED MALE: It's a terrorist state (ph), basically.

UNIDENTIFIED FEMALE: I think it's really difficult to, you know, be proud to be American.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

MACCALLUM: Congresswoman Ilhan Omar may be in some trouble after a watchdog group filed an FEC complaint, alleging that she used campaign funds for personal use. David Spunt has the details tonight from Washington. David?

DAVID SPUNT, CORRESPONDENT: Hi, Martha, good evening. This is the complaint that was actually filed earlier today, the Minneapolis-based congresswoman accused of having an affair with a married political consultant based right here in Washington.

Congresswoman Omar, also married, and the wife of the political consultant came forward alleging the affair. Now, the woman came forward this week alleging that her husband, Tim Mynett, you see him right there, the man who worked on Omar's 2018 campaign, was having an affair with the congresswoman.

The National Legal and Policy Center, a conservative leaning non-profit government watchdog, filed a formal complaint about Omar with the Federal Election Commission just this morning, arguing that she violated a 1971 law.

I took a look at that complaint today. The group alleges that Omar's campaign paid Mynett's company, E Street Group, thousands of dollars to cover travel expenses. According to the filing, Ilhan for Congress paid the group north of $21,000 for travel from April to June of this year. Those expenses were not itemized in the proper way.

We got a response from counsel that apparently is representing both E Street and Omar's campaign. I want to read part of it, quote, "Any accusation that our clients acted to skirt the law in any way is absolutely false and completely unfounded. The complaint is nothing more than blustering to attempt to create the appearance of legal jeopardy, when there is none. The parties have at all times complied with federal campaign finance law."

FEC rules do not allow candidates or sitting members of Congress to use campaign funds to pay for personal travel. If they do, personal funds must be used to reimburse the campaign. We will continue to follow this one. Martha, back to you.

MACCALLUM: All right. Good to have their statement there. David, thank you very much.

So also tonight, J.D. Vance wrote the blockbuster bestseller "Hillbilly Elegy" about his roots, growing up poor in Appalachia, an area riddled with drug addiction and instability, as one review put it, but he was pushed by his loving grandmother to keep up his studies and eventually made it out of his deeply dire circumstances.

In fact, he made it to Ohio State and then all the way to Yale Law School. He's clear-eyed in the book in his assessment of living on welfare and the relentless poverty cycle, and argues that he knows there's a way out through hard work because he says he found it. The film, big movie coming out in 2020, will start Amy Adams.

So this is Vance with his wife, whom he met in law school. And together, they have a little boy named Ewan. Vance is a speaker. He is a commentator. In a recent speech, he said something that got the attention of an editorial writer at The Washington Post with this headline: "How white nationalists aligned themselves with the antiabortion movement."

The writer used this line from Vance's speech to suggest that white nationalists are pro-life and that J.D. Vance is a mainstream connection to that because he was arguing. She said that our population is declining and therefore white nationalism, as I said, is now main stream and that populating the earth with more white people was the goal of what he said.

"Our people aren't having enough children to replace themselves," he said. "That should bother us."

So this caused a big hullabaloo. The editor later took the quote out of the piece, noting that Vance probably meant our people, meaning Americans, not white people. Essentially, when that piece came out of the article, the editorial, it kind of caused the premise that it was written about to collapse.

Here now, Mike Huckabee, former Arkansas governor and Fox News contributor. Good to see you tonight, governor. It's a pretty tenuous line to draw in this editorial, and yet that's the way it was done.

Sort of brandishing him with this label and connecting him to white nationalists because he suggested that the population is on the decline and it needed to be replaced. What do you think about all of this?

MIKE HUCKABEE, CONTRIBUTOR, FORMER ARKANSAS GOVERNOR: It is one of the most outrageous things, and The Washington Post can do some pretty crazy stuff. This was crazy. Clearly nobody was looking at this and editing it.

It's a good thing they finally took it down and took away the smear job on J.D. Vance, which was just outrageous. It's kind of like saying, OK, J.D. Vance is pro-life, somewhere we found a white supremacist who is pro-life. Therefore, J.D. Vance must be a white supremacist.

It's as ridiculous as saying that we found a suicide bomber who likes peanut butter. There were some democratic candidates for president who like peanut butter. Therefore, they are all suicide bombers. That's an outrageous lie. It's just as outrageous to say something about J.D. Vance and try to attach this to white supremacy.

It really was absurd. I will tell you, the thing that makes this most ironic, most of the abortions that happen in this country overwhelmingly and disproportionately happen to African-American babies. They are the ones were being killed at a much greater level, a disproportionate level, than white babies. MACCALLUM: All right. I want to get your thoughts on another story because this week, we covered the survey that came out of The Wall Street Journal that showed that there was a decline in young people in patriotism and religion and their desire to have children. Here's a sound bite from some of them. Let's listen to this and then we will get your reaction.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: A lot of these institutions, whether marriage or religion or what have you, they start to seem archaic.

UNIDENTIFIED MALE: I have this country.

UNIDENTIFIED MALE (voice-over): Why?

UNIDENTIFIED MALE: It's a terrorist state (ph), basically.

UNIDENTIFIED MALE: I'm happy that there's a decline in patriotism.

UNIDENTIFIED FEMALE: I think it's really difficult to, you know, be proud to be American when so many Americans are getting deported and are attacked for being who they are when they have no choice in the matter.

(END VIDEOTAPE)

MACCALLUM: Pretty sad. Pretty depressing, really. What do you think?

HUCKABEE: Well, it's not only sad, but it's depressing when you realize these are people that must've gone to school at some point in their life. And to say that Americans are getting deported, Martha, there are no Americans being deported. Americans don't get deported.

People who are illegally here and who have not properly come, they might get deported. People who committed a crime who aren't citizens might get deported. But no Americans are getting deported. That's ridiculous.

What troubles me, though, is this idea that somehow America is a bad country. I would simply ask these people this. If we are such a bad country, how come people are trying to break into America, not break out of it? If we are that bad, how come the wall isn't being built to keep people in?

MACCALLUM: Governor Huckabee, always good to see you. A lot of food for thought there. Thank you, sir.

HUCKABEE: Take care, Martha.

MACCALLUM: You bet. So when we come back, a live update on Hurricane Dorian, which is now setting its sights on the southeast coast of the United States of America. We got brand new numbers, look at the track when we come back.

(COMMERCIAL BREAK)

MACCALLUM: So Hurricane Dorian growing stronger tonight as it whips past Puerto Rico on a trajectory towards Florida where Governor DeSantis has already declared a state of emergency. Here now, chief meteorologist Rick Reichmuth. Rick, what are you seeing here?

RICK REICHMUTH, CHIEF METEOROLOGIST: I'm glad he did that already because --

MACCALLUM: Yeah.

REICHMUTH: -- I think we have a really significant story for Florida on our hands. We have great news that it didn't make a direct impact for Puerto Rico. Great news for Puerto Rico. But had it gone over Puerto Rico, there are a lot of mountains there and that can oftentimes can rip a storm apart. It stayed overwater, did not rip the storm apart at all.

Just last couple images, we are getting some indication that it is now going through a strengthening process. The storm in the last couple days was in the north-eastern Caribbean. Martha, that's kind of a dead zone for hurricanes. Oftentimes, it breaks apart or at least it can't strengthen. It didn't happen. It held itself together, strengthened a little bit.

Now, it's heading toward the Bahamas. Conditions are much more favorable for strengthening of the storm now. Because of that, we have the official guidance. In fact, most of our major model guidance brings it to major hurricane status. We will see some fluctuations if there is Category 2, 3, 4.

We can't really say what it will be at that point it makes landfall. But we should have a very significant hurricane somewhere along the Florida coast. It could be still Georgia and the Carolinas. But most of our model guidance is coming into better agreement that it is a Florida first storm.

One thing we are really concerned about is if this hits directly into Florida, stay somewhere in that central coastline, I can't say exactly where, but then potentially pulls back in towards the gulf. The water in the gulf is incredibly warm.

We could be having this as a major hurricane on the coast of Florida, go back into the gulf, increase back to a major hurricane, make another landfall again, somewhere on the Florida panhandle, over towards Louisiana, the storm we are probably be talking about for about the next eight to nine days, so get ready. You have the time now to prepare in Florida --

MACCALLUM: And when is the landing date for Florida there?

REICHMUTH: Sometime Sunday, Monday.

MACCALLUM: Yeah.

REICHMUTH: Can't say exactly, but it is coming.

MACCALLUM: Very tough. Thank you, Rick. Thanks for being here. We will be following up with your help. That is “The Story” of Wednesday, August 28th, 2019. But as you know, “The Story” goes on. So we will see you back here tomorrow night.

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