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Hill.TV’s “Rising” program, starting at 8 a.m., features retired Army Gen. Stanley McChrystal, former commander of U.S. operations in Afghanistan, and Rep. Eric Swalwell Eric Michael SwalwellSwalwell calls for creation of presidential crimes commission to investigate Trump when he leaves office 'This already exists': Democrats seize on potential Trump executive order on preexisting conditions Swalwell: Barr has taken Michael Cohen's job as Trump's fixer MORE (D-Calif.), who says he believes Trump can be indicted as a sitting president. http://thehill.com/hilltv

President Trump Donald John TrumpBiden on Trump's refusal to commit to peaceful transfer of power: 'What country are we in?' Romney: 'Unthinkable and unacceptable' to not commit to peaceful transition of power Two Louisville police officers shot amid Breonna Taylor grand jury protests MORE is taking charge of his own legal defense as threats mount and former allies cooperate in secrecy with federal prosecutors.

Over Twitter and in interviews on Fox News, the president is laying the groundwork for a defense he might one day make to prosecutors investigating his campaign.

On Thursday, the president made the case that election year payments made by his former attorney Michael Cohen to bury stories about alleged affairs do not constitute campaign finance violations.

“I never directed [Cohen] to do anything wrong…Whatever he did, he did on his own. …What he did was all unrelated to me except for the two campaign finance charges that are not criminal and shouldn't have been on there. They put that on to embarrass me." — Trump

Read Trump’s full Fox News interview HERE .

While special counsel Robert Mueller Robert (Bob) MuellerCNN's Toobin warns McCabe is in 'perilous condition' with emboldened Trump CNN anchor rips Trump over Stone while evoking Clinton-Lynch tarmac meeting The Hill's 12:30 Report: New Hampshire fallout MORE’s probe has received the bulk of the attention for the past year, prosecutors at the Southern District of New York, where the Trump Organization is based, have become increasingly aggressive in investigating the president’s campaign.

Late Thursday, The Wall Street Journal reported that the federal prosecutors in Manhattan launched an investigation into whether Trump’s inaugural committee misspent some of the record $107 million in donations it raised, including allegations the committee traded access for money. The New York Times is reporting that investigators are also scrutinizing foreign donations to a pro-Trump super PAC.

“That doesn’t have anything to do with the president or first lady.” — White House press secretary Sarah Huckabee Sanders

The news comes a day after Cohen was sentenced to three years in prison for a range of financial crimes and one felony campaign finance violation. Some of those crimes were discovered by Mueller but passed off to the Southern District of New York for prosecution.

Cohen will be making the rounds for media interviews before he reports to prison in March. This morning he’ll be interviewed by George Stephanopoulos on ABC’s “ Good Morning America. ”

Cohen has admitted to making an election year payment to adult-film star Stormy Daniels to stay quiet about an affair she says she had with the president years ago. He also has admitted to paying the company that owns the National Enquirer for the rights to a story from Karen McDougal, the former Playboy model who also claims to have had an affair with Trump.

Cohen says Trump ordered him to make the payments, which prosecutors have argued were an effort to influence the 2016 election and therefore amount to campaign finance violations.

The president has denied the affairs and initially denied knowing about the payments.

Now, he’s publicly making the case that the payments were not illegal because they were private transactions meant to shield him from embarrassing allegations, not to influence the election. And he’s putting the blame for the payments squarely on Cohen, even as Cohen has testified that Trump directed him to write the checks.

There are two other wild cards here. Trump’s friend David Pecker, the chairman of American Media Inc., which owns the National Enquirer, has an immunity deal with prosecutors investigating the McDougal payment. The payments came from the Trump Organization, and Chief Financial Officer Allen Weisselberg is also cooperating with prosecutors under the protection of an immunity deal.

Multiple media outlets are reporting that Trump was in the room when Cohen and Pecker negotiated the McDougal payment.

The debate raging in Washington is whether the Manhattan prosecutors would be able to convince a jury that the payments are tantamount to campaign finance violations and whether a sitting president can be indicted.

“I think the Justice Department needs to re-examine that OLC opinion, Office of Legal Counsel opinion, that you cannot indict a sitting president under circumstances in which the failure to do so may mean that person escapes justice. If it were the case that it was now or never ... that if you wait until after the president leaves office they can no longer be brought to justice, that ought to create certainly an exception to that OLC rule.” — Rep. Adam Schiff Adam Bennett SchiffPelosi, Democrats unveil bills to rein in alleged White House abuses of power Chris Matthews ripped for complimenting Trump's 'true presidential behavior' on Ginsburg Trump casts doubt on Ginsburg statement, wonders if it was written by Schiff, Pelosi or Schumer MORE (D-Calif.), likely the next chairman of the House Intelligence Committee

Schiff just days ago said Trump faces the “real prospect of jail time” after he leaves office ( CBS News ).

The OLC memo is HERE .

Perspectives and Analysis

The Hill : Intel panel expects to refer more cases of suspected lying to Mueller.

The Washington Post : Mueller’s treatment of cooperating witnesses suggests end of Russia probe may be near.

Andrew Napolitano : Payments may doom Trump’s presidency.

Hans A. von Spakovsky : Neither Trump nor Cohen violated campaign finance laws.

Renato Mariotti : Did Trump just move a step closer to unindicted co-conspirator?

James Freeman : News outlets had a different view of campaign finance law when the law was applied to others.

LEADING THE DAY





SHUTDOWN: We’re eight days away from a partial government shutdown and lawmakers are no closer to a spending agreement.

The Hill: Trump leaves GOP in turmoil with shutdown looming.

Trump is demanding any spending package include $5 billion for a border wall. Senate Minority Leader Charles Schumer Chuck SchumerCruz blocks amended resolution honoring Ginsburg over language about her dying wish Senate Democrats introduce legislation to probe politicization of pandemic response Schumer interrupted during live briefing by heckler: 'Stop lying to the people' MORE (D-N.Y.) says Democrats won’t budge from their offer of $1.3 billion ( The Hill ).

In a Thursday tweet, Trump called Democrats “absolute hypocrites” for supporting border fencing in the past.

“Let’s not do a shutdown, Democrats - do what’s right for the American people!” — Trump

Sen. Richard Shelby Richard Craig ShelbySenate GOP eyes early exit Dems discussing government funding bill into February GOP short of votes on Trump's controversial Fed pick MORE (R-Ala.), chairman of the Appropriations Committee, has floated several possibilities aimed at bridging the impasse ( The Hill ).

But if an agreement is reached, it will come just days or hours before the shutdown.

House lawmakers have already gone home for the weekend. The next votes aren’t scheduled until Wednesday, although members have been told to be on call in case that changes.

Senate GOP Whip John Cornyn John CornynThe Hill's Campaign Report: GOP set to ask SCOTUS to limit mail-in voting Liberal super PAC launches ads targeting vulnerable GOP senators over SCOTUS fight Senate GOP faces pivotal moment on pick for Supreme Court MORE (R-Texas) summed up the state of play in an interview with The Hill.

House Republicans don’t have the votes to pass a spending bill with $5 billion for Trump’s wall. If they had the votes, they would have passed a bill this week.

Advantage: Democrats, at least for now.

Remember: In the last shutdown battle earlier this year, Senate Democrats blocked a House-passed funding bill. That’s a big part of the reason they got the blame and subsequently backed down.

Bloomberg News has a rundown of what will happen if the relevant federal agencies shut down at midnight on Dec. 21.

About 400,000 employees would work without pay and another 350,000 would be furloughed. The Department of Homeland Security would be among the agencies impacted, meaning pay would be delayed for border agents and Secret Service agents protecting Trump, who is expected to be vacationing at Mar-a-Lago.





IN FOCUS/SHARP TAKES





CONGRESS: Lawmakers’ challenges to Trump continued Thursday beyond investigations and a potential shutdown. Senators voted to end U.S. support for the Saudi-backed war in Yemen, despite energetic lobbying in the Capitol against the measure by the secretary of state and defense secretary ( The Hill ).

Secretary of State Mike Pompeo Michael (Mike) Richard PompeoTreasury sanctions individuals, groups tied to Russian malign influence activities Navalny released from hospital after suspected poisoning Overnight Defense: Pentagon redirects pandemic funding to defense contractors | US planning for full Afghanistan withdrawal by May | Anti-Trump GOP group puts ads in military papers MORE and Defense Secretary James Mattis James Norman MattisBiden courts veterans amid fallout from Trump military controversies Trump says he wanted to take out Syria's Assad but Mattis opposed it Gary Cohn: 'I haven't made up my mind' on vote for president in November MORE also tried without success to persuade senators to oppose a measure that names Saudi Crown Prince Mohammed bin Salman “responsible” for the murder of Saudi journalist Jamal Khashoggi ( The Hill ).

The Senate approved the joint resolution by voice vote after it attracted the initial support of retiring retiring Senate Foreign Relations Committee Chairman Bob Corker Robert (Bob) Phillips CorkerHas Congress captured Russia policy? Tennessee primary battle turns nasty for Republicans Cheney clashes with Trump MORE (R-Tenn.), Kentucky’s Mitch McConnell Addison (Mitch) Mitchell McConnellFEC flags McConnell campaign over suspected accounting errors Poll: 59 percent think president elected in November should name next Supreme Court justice Mark Kelly: Arizona Senate race winner should be sworn in 'promptly' MORE, the majority leader, and other Republicans ( Bloomberg ).

Reuters : The Senate twice defied the president on Thursday.

McConnell this week reluctantly sided with White House wishes to bring a bipartisan criminal justice reform bill to the floor. Senators are bracing for a fight as the majority leader tries to squeeze the measure into the year-end agenda.

Despite Trump’s endorsement of the bill, Senate conservatives are working to defeat it and are drafting amendments that could force their colleagues through a series of tough votes ( The Hill ).

In the House, lawmakers sent a bill to Trump’s desk that overhauls Congress’s sexual harassment policies ( The Hill ).

The term limit proposals presented this week by Rep. Nancy Pelosi Nancy PelosiHoyer: House should vote on COVID-19 aid — with or without a bipartisan deal Ruth Bader Ginsburg lies in repose at Supreme Court McCarthy threatens motion to oust Pelosi if she moves forward with impeachment MORE, the California Democrat who is expected to be Speaker in January, expose a generational divide in her caucus ( The Hill ).

Pelosi anticipates fierce resistance from the White House and Trump’s lawyers if (or when) Democratic overseers demand the president’s tax returns, backed by subpoena power ( The Hill ).

House – guns: What to watch next year as Democrats take up bills to address gun violence and try to detour around roadblocks in the GOP-controlled Senate ( The Hill ).

***

WHITE HOUSE CHIEF OF STAFF WATCH: The president is expected to meet with his former campaign deputy David Bossie and Bossie’s co-author Corey Lewandowski Corey R. LewandowskiHow Trump can win reelection: Focus on Democrats, not himself Trump Jr. distances from Bannon group, says he attended 'single' event Bannon, three others charged with defrauding donors of 'We Build The Wall' campaign MORE, a former Trump campaign manager, for lunch at the White House ( The Washington Post) . The get-together was planned before the president announced that John Kelly John Francis KellyMORE, his chief of staff, will leave the job by Jan. 2. Bossie’s name has appeared on lists of potential picks. Trump said on Thursday he’s interviewed a handful of candidates.

Trump met with former New Jersey Gov. Chris Christie Thursday evening and considers him a candidate for the chief’s job ( Axios ). Christie, once a competitor with Trump for the GOP presidential nomination, was also in charge of an early version of Trump’s transition planning in 2016 before being removed from that role. Christie later called the transition “brutally unprofessional” ( The Guardian and author Michael Lewis in “The Fifth Risk”).

Some Trump advisers are promoting son-in-law Jared Kushner Jared Corey KushnerAbraham Accords: New hope for peace in Middle East Tenants in Kushner building file lawsuit alleging dangerous living conditions Trump hosts Israel, UAE, Bahrain for historic signing MORE, a senior adviser to the president, to lead the West Wing staff ( Reuters) , but that choice is seen as unlikely.

The Associated Press : Trump’s search for new chief of staff has reality TV feel.

And in the Christmas spirit, the president welcomed former White House chief of staff Reince Priebus Reinhold (Reince) Richard PriebusLeaked audio shows Trump touted low Black voter turnout in 2016: report Meadows joins White House facing reelection challenges Trump names Mark Meadows as new chief of staff MORE to a Thursday evening party at 1600 Pennsylvania Ave. Priebus and Kelly made merry on the state floor.

OPINION





Assad’s regime killed an American — and no one seems to care, by Jason Rezaian, The Washington Post . Layla Shweikani, a U.S. citizen with Syrian roots, was tortured and executed.

‘His dirty deeds’: Michael Cohen said Trump led him into darkness. The courts brought him into the light, by The New York Times editorial board .

The Morning Report is created by journalists Jonathan Easley jeasley@thehill.com & Alexis Simendinger asimendinger@thehill.com. Suggestions? Tips? We want to hear from you! Share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!





WHERE AND WHEN





The Senate adjourned until 3 p.m. Monday, when senators are to resume consideration of the House version of the criminal justice reform bill.

The House is out until Dec. 19, when voting will begin at 6:30 p.m.

The president and first lady Melania Trump Melania TrumpTrump privately blamed Black Americans for lacking initiative: report The Hill's 12:30 Report: Ginsburg lies in repose Melania Trump: Ginsburg's 'spirit will live on in all she has inspired' MORE will host two evening Christmas receptions at the White House.

Treasury Department Assistant Secretary David Kautter speaks at noon during a luncheon hosted by the Institute on Current Issues in International Taxation. Location: J.W. Marriott Hotel, Washington.

Secretaries Pompeo and Mattis meet with the U.S.-Canada 2+2 ministerial participants at the Department of State at 11 a.m. Pompeo holds a joint press conference at 1:10 p.m. with Mattis, Canadian Minister of Foreign Affairs Chrystia Freeland and Canadian Minister of Defense Harjit Sajjan. Pompeo delivers remarks and administers the oath of office at 2 p.m. to the 150th Foreign Service specialist class. He meets with Slovenian Foreign Minister Miro Cerar at the department at 3 p.m.

Supreme Court Associate Justice Ruth Bader Ginsburg delivers remarks at 10 a.m. at the National Archives naturalization ceremony marking Bill of Rights Day.

ELSEWHERE





> Airlines: Racist, homophobic and ageist abuse by passengers as well as sexual harassers and “inappropriate touching” are an increasing problem for commercial airlines ( Bloomberg ).

> Human trafficking: Lost girls of Indonesia are among 61,000 dead and missing migrants in Asia and around the globe ( The Associated Press ). A recent AP investigation documented more than 60,000 dead or missing migrants worldwide.

> The arts: Actress Sondra Locke, 74, and singer Nancy Wilson, 81, are among entertainers who died this year. Locke, an Academy Award-nominated actor and director, was best known for her co-starring roles with Clint Eastwood. Her death in November was first reported on Thursday ( The Associated Press ). Wilson was an iconic, Grammy-winning song stylist and torch singer who retired from touring seven years ago ( The Associated Press ).





THE CLOSER





And finally … Kudos to the winners of this week’s Morning Report Quiz — about White House chiefs of staff. No shortage of readers are savvy about West Wing senior presidential advisers through the decades. Our salutes this morning go to Rob Couhig, Chris Weston, John van Santen, David Straney, William Chittam, Dennis Cherry, Sandy Sycafoose, Joel Brill, Steven Nemerovski, B.J. Ford, Milt Mungo, Rosemarie Soriano, Larry Charles, Chloe Coniaris and Noel St. Pre.

They knew that the youngest White House chief of staff to date was Dick Cheney, who served former President Gerald R. Ford and earned high praise in that challenging role at age 34.

Former President Barack Obama Barack Hussein ObamaThe Memo: Trump's strengths complicate election picture Obama shares phone number to find out how Americans are planning to vote Democrats' troubling adventure in a 'Wonderland' without 'rule of law' MORE relied on five chiefs of staff during his two terms, topping presidential tallies.

James A. Baker III was former President Ronald Reagan’s chief of staff at the time of an assassination attempt in 1981, when the president and three others were shot and wounded.

On the morning of Sept. 11, 2001, in Sarasota, Fla., former President George W. Bush was reading to elementary school students when Andrew Card, his chief of staff, leaned in to whisper, “America is under attack.”