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updated 6/17/2009 10:59:20 AM ET 2009-06-17T14:59:20

Guests: Ali Arouzi, Trita Parsi, Nico Pitney, Chuck Todd, Michael Lewis, Kent Jones

RACHEL MADDOW, HOST: We're not-we don't have a ton of information yet about what's happening with those domestic partnership benefits and the extension that the president maybe announcing tomorrow. But we're looking for some breaking news-assistance from our team at the White House tonight. So, we'll be riding this one a little bit as it happens. We're just learning this information.

Over the course of the next hour, we've got a ton of ground to cover.

We've got three different reports coming up this hour on the situation in

Iran, including from our NBC News Tehran bureau chief, who has been working

in Tehran under incredible media restrictions. We'll be talking with him -

as well as a couple of experts on the situation.

Michael Lewis will also be here this hour to talk about President Obama's impending plan to regulate Wall Street.

And, our chief Spinal Tap correspondent Kent Jones will have a report on the new Spinal Tap album.

That is all coming up shortly.

But we start with the situation in Iran-and President Obama talking on his critics on the right here at home. As a growing chorus of conservatives and elected Republicans call on the president to publicly pick a side in the battle in the streets in Iran, to say publicly that America is on the side of the anti-government opposition, President Obama is holding firm. He's sticking to his strategy, and, frankly, he's explaining that strategy over and over and over again.

Here he was earlier today after a meeting with the president of South Korea.

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA, UNITED STATES: It's not productive given the history of U.S./Iranian relations to be seen as meddling-the U.S. president meddling in Iranian elections. What I will repeat, and what I said yesterday, is that when I see violence directed at peaceful protesters, when I see peaceful dissent being suppressed, wherever that takes place, it is of concern to me and it is of concern to the American people. That is not how governments should interact with their people.

And my hope is, is that the Iranian people will make the right steps in order for them to be able to express their voices, to express their aspirations. How that plays out over the next several days and several weeks is something ultimately for the Iranian people to decide.

(END VIDEO CLIP)

MADDOW: Something for the Iranian people to decide. In other words, obviously, America is pro-democracy, we're against the suppression of dissent, and, duh-everyone knows how the United States feels about Mr. Holocaust denier-in-chief over there and the theocratic dictatorship that hides about one inch below the myth of the will of the Iranian people.

However, we'll be less likely to get an outcome we prefer. It will be worse for the opposition forces in Iran if the United States comes out and endorses the opposition outright. That would backfire. And in case that case was not made clear enough the first time from the president, the president then put it in even stronger terms-in a brand-new interview with John Harwood on CNBC.

(BEGIN VIDEO CLIP)

OBAMA: The easiest way for reactionary forces inside Iran to crush reformers is to say it's the U.S. that is encouraging those reformers. So what I've said is, look, it's up to the Iranian people to make a decision. We are not meddling, and, you know, ultimately, the question that the leadership in Iran has to answer is their own credibility in the eyes of the Iranian people.

And when you got 100,000 people who are out on the streets peacefully protesting, and they're having to be scattered through violence and gunshots, what that tells me is the Iranian people are not convinced of the legitimacy of the election.

(END VIDEO CLIP)

MADDOW: The president is saying, in other words, that the easiest way for the reactionary forces of the government in Iran to destroy this opposition movement is to say that that opposition movement is endorsed by us.

It would be sort of the equivalent of Karl Rove and Dick Cheney giving a big, public endorsement to one of the candidates in a Democratic Party primary. That would be the kiss of death, right? That would ruin the chances of that Democrat winning that primary election.

Same deal with us endorsing-the United States endorsing anyone in Iran. This is first semester political science. This is strategery for dummies. This is impossible not to get, unless, well-

(BEGIN VIDEO CLIP)

REP. MIKE PENCE ®, INDIANA: It seems, by my lights, that this administration has yet to express the unqualified support of the American people for those who are courageously taking to the streets for free elections and for democracy in Iran. Let me say it from my heart-the American cause is freedom, and in this cause, the American people will not be silent here or abroad. If the president of the United States won't express the unqualified support of our nation, for the dissidents in the streets of Tehran, this Congress must.

(END VIDEO CLIP)

MADDOW: Because we really want to undermine them. Republican Congressman Mike Pence today introducing a resolution that would effectively declare that the battle on the streets of Iran is really the Iranian government and President Ahmadinejad against America. The opposition candidate, Mousavi and all of his supporters are just instruments of foreign government. That's helpful.

But it's not just the voices on the "I don't get it" fringe of the Republican Party, who are arguing for this unbelievable strategy. It's also the second-ranking Republican in the House of Representatives, Congressman Eric Cantor. He's released a statement saying, quote, "We have a moral responsibility to lead the world in opposition to Iran's extreme response to peaceful protests."

And then there's John McCain.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA: I think they should be condemned, and it's obvious that this was a rigged election and depriving the people of their democratic rights. It's really a sham that they've pulled off and I hope that we will act.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

DAVID GREGORY, MSNBC HOST: You talk about what the president should do. Has he not done enough? What more should he do?

MCCAIN: He should speak out that this is a corrupt, flawed, sham of an election. The Iranian people have been deprived of their rights. We support them in their struggle against a repressive, oppressive regime.

(END VIDEO CLIP)

MADDOW: Advice to consider if the president feels he ought to take direction on the appropriate nuance and tone in America's statements about Iran from this guy.

(BEGIN VIDEO CLIP)

MCCAIN: That old, that Beach Boy song, Bomb Iran.

(LAUGHTER)

MCCAIN: Bomb, bomb, bomb, bomb-anyway.

(END VIDEO CLIP)

MADDOW: Anyway.

Joining us now is Trita Parsi. He's head of the National Iranian American Council, a nonpartisan organization representing Iranian-Americans. Mr. Parsi, thank you so much for joining us tonight.

TRITA PARSI, PRESIDENT, NATIONAL IRANIAN AMERICAN COUNCIL: Thank you for having me, Rachel.

MADDOW: I almost feel like I want to start by apologizing to you as an Iranian-American for a presidential candidate having set the idea of bombing Iran to music. But the time has passed. I don't think John McCain would like me apologizing for him.

But I will ask for your response to John McCain's suggestion here. He and other Republicans want the U.S. to declare-to declare the U.S. on the side of the opposition. What would be the impact of a strategy like that?

PARSI: Well, let's first think about this, they're coming out and they're saying that they should be siding with the opposition, siding with Mousavi. I'm really curious to know if they actually have been in contact with Mousavi and asked Mousavi if he thinks that that's a good idea.

That's the test we failed in the past, in the sense that we've made up our mind of what they should want and then we act. And then, even if it doesn't work out the way we hope for, we think that is their fault that they didn't understand how genuinely positive our intentions were.

We can't do it this way. I think it's quite reckless to turn a political football into this here in the United States, where in reality, it could have severe repercussions on the streets of Tehran, if the protests are being cast as being orchestrated from the United States.

MADDOW: Is there a case to be made that Mousavi would not want the endorsement of the president of the United States, of the United States government in general? Is it possible that he would see that as a huge negative?

PARSI: I think it's quite possible, particularly if you take a look at the past history.

A couple years ago, the Bush administration put together a fund they called the Iran Democracy Fund. Critics called it the regime change/fund. And what they were doing is that they were saying they were going to give money to NGOs in Iran and then implicitly saying that it was for them to do regime change.

They never really asked the NGOs in Iran if they thought that that was something that they wanted. And the end result was that the Iranian government started to view all NGOs in Iran as potential targets and potential enemies, and there was significant clamp down on them.

And major Iranian NGO leaders, as well as human rights defenders, such as Shirin Ebadi, the Nobel Peace Prize winner, came out and said, "Please, stop this. This is not what we need." Yet, Senator Lieberman ensured that it was re-appropriated. It doesn't seem as if we're even listening to the people as to whether this is really what they want.

MADDOW: As you mentioned, Joe Lieberman is one of the people who have taken this line that the U.S. ought to be intervening, actively saying that they're in support of the opposition and against the Iranian government. Also, John McCain, also Steve Pence, also Eric Cantor.

Also Dana Rohrabacher-and I wanted to ask you about him specifically. He's not the most important Republican congressman in the country but he does have a lot of Iranian-Americans in his congressional district. He has gone so far as to directly call for regime change in Iran, in addition to saying that the U.S. government should come out overtly in support of the opposition.

What's your reaction to the comments from Dana Rohrabacher in particular?

PARSI: Well, the thing is, polls have shown consistently that the Iranian-American community overall is very negative towards the government in Iran. But at the same time, they are strongly against war. They very heavily favor diplomacy between the two countries in order to be able to resolve the differences in a peaceful manner.

And whenever the United States is saying that it will be pursuing regime change, it strikes a negative cord with most Iranian-Americans because of the very same history that President Obama referred to today. Mindful of the 1953 coup that the CIA orchestrated against the democratically-elected prime minister in Iran, Mohammad Mosaddeq, mindful for the support of the Shah and the perception that existed that the United States was ensuring that the Shah would stay in power.

To go forward now, at this very critical stage, with no sensitivity to the history, with no sensitivity that we have not actually heard from the Iranian people if this is something that they want, I think, really, is reckless.

MADDOW: Trita Parsi is head of National Iranian American Council-

Mr. Parsi, thank you so much for your time tonight. It's very helpful.

PARSI: Thank you for having me.

MADDOW: Thanks.

Well, Republicans in Washington tried to score short-term political points on the Iran situation. Mahmoud Ahmadinejad's government is still cracking down on coverage of the protests there.

Coming up next: We're going to get the latest from inside Iran with NBC News Tehran bureau chief, Ali Arouzi. He's operating under some incredibly bad conditions inside Tehran. You're going to want to see this interview. Stick around.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN ENSIGN ®, NEVADA: Last year, I had an affair. I violated the vows of my marriage. It's absolutely the worst thing that I've ever done in my life. I take full responsibility for my actions.

(END VIDEO CLIP)

MADDOW: That's the junior senator from Nevada, Republican Senator John Ensign, publicly admitting just hours ago to what his wife apparently knew about a year ago, which is that he had had an affair, he says, with a female campaign staffer who was married to someone who worked in his Senate office.

That would be the same Senator Ensign who fought for a federal amendment against same-sex marriage, citing the importance of the institution of marriage. The same Senator Ensign who demanded that President Clinton resign because of his affair with Monica Lewinsky, and the same Senator Ensign who demanded that fellow Republican Senator Larry Craig resign in the wake of that most humiliating interlude in an airport men's room. I think Senator Ensign actually called Senator Craig a disgrace at that time.

This is also the same Senator Ensign who is reportedly thinking of running for president in 2012, presumably with David Vitter as his running mate. I wonder exactly what they would want to be president and vice president of.

(COMMERCIAL BREAK)

MADDOW: The Iranian government would really prefer that you please stop paying attention to what's going on in the streets of that country. And the word "prefer" is understating things a bit. The government appears to be doing everything in its power to shut down both mainstream news coverage of the uprising in Iran, and its own citizens' disability to tell the world what they're doing and what they're seeing.

The government is now blaming foreign press for inciting anti-government protests. They've canceled all press passes. They told all foreign outlets they may not do any filming outside their offices-which is handy. You can film your own desk.

Images that you see from events in Tehran today are, therefore, either from the Iranian state-run media, which is, of course, pro-Ahmadinejad or they are from Iranian citizens who are-I think it's safe to say by self-selection, pro-opposition, the citizens who are figuring out ways to get their own photos and videos out of the country via Internet.

Just before the show today, I was able to reach NBC News' Tehran bureau chief, Ali Arouzi, in the bureau there. He's on a satellite video phone working under some incredibly difficult and intimidating conditions in order to try to get this story out.

(BEGIN VIDEOTAPE)

MADDOW: Mr. Arouzi, thank you for being up at this God awful hour and joining us. I really appreciate it.

Let me start by asking you what sort of restrictions you have been operating under right now as a journalist. Are you able to get out into the city and see what's going on?

ALI AROUZI, NBC NEWS TEHRAN BUREAU CHIEF: Good evening, Rachel.

Yes, we've been out in the city today. We have been walking around, sort of soaking up the atmosphere, talking to people on the streets, but we haven't been able to film. The government has put a blanket ban on all filming in the country. So, we've just been walking around observing.

I have to tell you now that the cross-talk we're doing with you right now is in our bureau and the picture behind me is literally a picture of Tehran. So, we're not filming anything outside.

MADDOW: Can you use any-can you use cell phones yet? Is there any text messaging available? Are you able to get online?

AROUZI: No. The Internet has been working very sporadically here.

It cuts in and out. Cell phones have been out all day.

It's almost 3:00 in the morning here now. It's just after 3:00 in the morning, so, and the cell phones are now working again. But text messaging isn't working.

One of the reasons the cell phones is working right now is because the demonstrations have died down, so the authorities here aren't worried about different groups trying to communicate with one another.

MADDOW: I know that the media is restricted in Iran. I have a lot of friends who are reporters, who have been in and out of the country, and have dealt with a lot of these restrictions over time over the years.

I have to ask, is this-is this the most severe restriction under which have you ever worked in Iran? Has it ever been this bad before?

AROUZI: Here, this has certainly been the most severe restrictions that we've seen. Usually, you know, (AUDIO BREAK) the Ministry of Islamic guidance here, you tell (AUDIO BREAK) what you want to do, the story you want to cover. They'll file all of the paperwork you need, and then you can go out and cover it. But this is an exceptional circumstance here. And it's being more tightly controlled than I have ever seen.

MADDOW: Based on the information that you are able to get from where you are, I know you're not able to film, but have you been able to get out and talk to people and walk the streets, can you give us a sense of comparing today's events versus yesterday's events-just in terms of the tone and the scale of the protests?

AROUZI: Yes, today's events were a lot more peaceful. When it started early in the afternoon, there were a few (AUDIO BREAK) Mousavi out in the streets and there were some scuffles that broke out earlier in the afternoon, because the numbers were quite small. But within hours, these few hundred protesters swelled to a few hundred thousand protesters. So, it's very, very difficult to have a violent situation on their hands.

Also, the reformist protesters that were out on the streets were very aware of yesterday's bloodshed. They didn't want a repeat of that. So, they were passing messages through the crowd saying, "Don't chant (AUDIO BREAK) that could provoke the security forces to attack us."

MADDOW: Ali, National Public Radio has reported today that there have been arrests of human rights lawyers and human rights activists. We also heard of opposition figures being detained, some of them subject to house arrest. Have you been able to document any of that? Have you heard a corroboration of any of these reports?

AROUZI: Yes, we have heard about a crackdown here. There have been dissidents that have been arrested. (AUDIO BREAK) they're trying to do this to contain the situation so they can't spread the word to incite more protests. It's definitely a very sensitive time here.

MADDOW: In terms of being there and reporting right now, do you think that journalists who have been able to stay in Tehran, people who are reporting even under these restrictions, are potentially in physical danger right now? Are people actually risking their own life and health to be there covering this story?

AROUZI: It is a very dangerous time here. There are journalists who have been arrested. There have been reports of mistreatment of journalists. So, it is a very dangerous time here. Though authorities here are also feeling very sensitive that (AUDIO BREAK) journalists are a target here.

When we went out today-I mean, we covered a lot of things in Iran over the past four years, and there's always been a slew of journalists everywhere we've gone. Today, when we were walking out in the streets, I didn't even see a photographer.

MADDOW: In terms of the politics and how this may proceed, we have heard calls today, not only from Mir Hossein Mousavi, but also from the Iranian Nobel laureate, human rights lawyer Shirin Ebadi, and we've heard from some other forces, some other figures-that there ought to be an annulment of this election. That the election-there shouldn't just be a recount, this election should be redone.

Do you get the sense that the opposition leaders maybe coalescing around this demand that the election-that there should be a new election?

AROUZI: That's exactly what the opposition wants. Mir Hossein Mousavi came out yesterday and said, "An inquiry into this election just isn't enough. It's not going to resolve the issues here. We want a re-election."

They don't think that the Guardian Council-who's arbitrating this vote dispute-is going to do enough. They are saying that these guys are just trying to buy more time so as to calm the situation down. Now, the supreme-it is unusual from the supreme leader (AUDIO BREAK) to be out like this. He is saying, "Listen, I'm trying to appease the situation."

What we have-what is key is what is going to be the result. This could sway the country either way.

MADDOW: Ali Arouzi, NBC News Tehran bureau chief-thank you so much, again, for your time again tonight, Ali. And be safe. Thank you.

AROUZI: Thank you, Rachel.

(END VIDEOTAPE)

MADDOW: This, of course, is not the first term a political uprising tried to unseat an oppressive government. But it is probably the first time it's been reported like this, uploaded, blogged, tweeted and essentially leaked to the world. The young man who is running one of the most, if not the single most essential English language source on what's going on in Iran right now, will join us in a moment to tell us how he's doing it.

And just a bit later: NBC News chief White House correspondent Chuck Todd will join us to report on President Obama's reported plan for an executive order tomorrow granting some equal benefits to same-sex couples who are federal employees. This is a surprise announcement tonight. We're only getting-we're getting less than 24 hours notice of the action. We're still trying to nail down the basic details on this breaking story.

We'll have a full report from Chuck Todd in a moment.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: Today, the State Department said it asked Twitter-the micro-blogging service-to delay taking the service offline for its scheduled maintenance, because without Twitter, people in Iran would lose one of the important ways they have to communicate with each other and the outside world about what's going on in their country right now.

A State Department official told reporters, quote, "Twitter announced they were going to shut down their system for maintenance, and we asked them not to." And, thus, the State Department confirms what anyone who's been following the story has seen-which is that Iranian government media restrictions mean this revolution might not be televised, but it is definitely being tweeted and blogged and YouTubed and Flickred.

These sources, these means of posting citizen journalism online are collectively the most comprehensive, up-to-the-minute way to follow this huge news story. The single most useful English language compilation of all of these sources and, therefore, in my opinion on the single most essential Web site for news on what's happening in Iran, has thus far been maintained around the clock by a reporter here in New York. His name is Nico Pitney. And we'll talk to him in a moment.

Mr. Pitney has been live-blogging events in Iran for HuffingtonPost.com since the protests began over the weekend. In case you haven't seen his live blog, here's a snapshot of his work today.

At 12:22 a.m., which is about 9:00 a.m. in Iran, Mr. Pitney posted video of garbage men joining in the protests in the streets of Tehran. At 12:55 a.m., he posted comments from a reader in Iran who said that Iran's state-run media were describing in the streets as seditious. At 1:58 a.m., he posted accounts of increased violence, including information from the Web site of Iran's former vice president, who says that he has been arrested.

Meanwhile, Mr. Pitney posts that someone who appears to be an Iranian

on Twitter is reporting a, quote, "big explosion" at a university in

northern Iran. And Mr. Pitney posts the account of a British reporter who

writes, quote, "A student began shouting at me in English through those

grim, black gates, 'There was a massacre.'"

At 3:01 a.m. east coast time, now 11:31 in the morning in Tehran, Mr. Pitney shares video from a reader at the protest in Azadi Square in Tehran including shots of a man climbing the Freedom Tower there. More than 12 hours later, at 3:53 p.m., which is now well after midnight in Iran, he posts video of people protesting what they say is biased reporting at an Iranian state-owned television. And at 4:06, Mr. Pitney posts striking images of the aftermath of an attack on the home of a reformist member of Iran's parliament.

Now, as traditional journalists are confined to their offices and prevented from filming on the streets and are blocked from the protests, what we're able to get to supplement their reporting is raw material, essentially - raw material from the participants in this uprising. We are 6,000 miles from Tehran, where I sit right now, but we have never been closer.

Joining us now is Nico Pitney, national editor at "HuffingtonPost.com." Nico, thanks for coming on the show.

NICO PITNEY, NATIONAL EDITOR, "HUFFINGTONPOST.COM" Thank you. And that was very nice of you. And yes, I didn't have this beard when we started all of this. It's been a long few days. But it's been, you know, very exhilarating.

MADDOW: Are you exhausted? Have you been staying up all night? I mean, I can tell from your posts, it seems like you have.

PITNEY: It's basically been like I have gone to bed at 3:00 or 4:00 and woken up around 6:00. It's been very intense. I hope to get a good night's sleep tonight.

MADDOW: Yes.

PITNEY: But honestly, you know, hearing from people either in Iran or Iranian-Americans here who have family there, it's incredibly - you know, it's very gratifying and they are so passionate about it. And, you know, it makes it such a great experience.

MADDOW: How are you able to find so many different strands to this story? Are you essentially just like scouring the far corners of the Web? Are people feeding you stuff? Are you putting out requests for information that people are answering?

PITNEY: All three of those.

MADDOW: OK.

PITNEY: But it's really - the two biggest kind of hills to get over were, one, finding the Iranians on Twitter who were reputable, who were posting regularly and descriptively, you know, where you could get some good information. And then, building kind of a stable of people who were willing to volunteer their time and be obsessive about it also.

You know, the number of people in the United States who speak Farsi, who volunteer their time to got through Web sites, read documents for me and with me. And you know, they want to get the information out also. It's incredible.

MADDOW: We are hearing some reports of imposters, saboteurs, provocateurs, essentially posing as members of the opposition, posing as activists, even posing as Mousavi himself. How do you know if somebody's really there? How do you decide if somebody is credible?

PITNEY: I think there's a lot less of that. I mean, that's not to me the biggest trouble. I mean, I think it's more, because the people who don't want this to be an issue, they don't have an incentive to be claiming, you know, there's a big massacre. There's a lot of violence.

But I have been, you know, very stringent in terms of, you know, A, avoid putting a material that I can't confirm. And if there is something where I feel like, you know, it's got a strong chance of being true, I'm always very clear about saying, I haven't confirmed it 100 percent.

MADDOW: And when you can confirm, you say how you were able to confirm.

PITNEY: Yes, exactly.

MADDOW: This jives with this and it doesn't.

PITNEY: Exactly.

MADDOW: I mean, you sort of have to be on the alert. Even if we're not talking about deliberate imposters and provocateurs, and this just isn't true for Iran, it's true for, I think, all of citizen journalism. It seems like you have to be on the alert even for well-meaning people, when people are participants in the movement, that they are documenting.

And when sources of information for them are quite limited, there has to be a risk that they're essentially going to amplify local misinformation, local rumors, even local propaganda.

PITNEY: That's true. Absolutely true. And I mean, I have tried to

keep that in mind throughout. And there's no way to guard against it. But

certainly, you know, making sure you've got multiple sources and, you know,

being patient, waiting for - you know, there may be big news there sitting

in front of you, but waiting until, you know, the facts are there to back

it up

There's a lot of information out there that can be very harmful to people. I mean, if they think that there's, you know, violence going on at their university and they're reading it on the site because we're trying to inform people and it's not true, that can have, you know, pretty damaging effects on people. So we try to be cautious.

MADDOW: I will say that if somebody's really benefited from your reporting and your work on this - I mean, a lot of what I have learned, it's been things I followed through, you bring them to my attention. So thank you.

PITNEY: Thank you, Rachel.

MADDOW: And I would also say that I was very - I mean, you're writing about your own emotion and your conflicted feelings about whether or not to post particularly graphic video that shows violence, in some cases, maybe even people dying on the screen. It's affecting - and I think it's important to put that out there. So, thanks.

PITNEY: Thank you.

MADDOW: All right. Nico Pitney has been doing his live blog at "HuffingtonPost.com." Tonight, he will be sleeping, so don't bug him.

We've got a little breaking news on to the White House tonight, where President Obama will give benefits to same-sex partners of federal employees. Chuck Todd will be joining us on what the president has decided and why and how come we're getting less than 24 hours notice of this big news. Plus, what it might mean for the Defense of Marriage Act. That's all coming up next.

(COMMERCIAL BREAK)

MADDOW: Some breaking news from Washington tonight. NBC News has learned that President Obama will extend health care and other benefits to the same-sex partners of federal employees tomorrow.

The move would come after weeks of criticism from gay rights advocates about the administration's lack of action to repeal the military's "Don't Ask, Don't Tell" policy, and for his Justice Department's inflammatory defense last week of the Defense of Marriage Act.

This past Friday that was. These details on the new executive order are scant. But it appears that the president will give partners of federal employees access to health care and financial benefits like relocation fees for moves.

These are the types of benefits that married partners of opposite sex couples who are federal employees already enjoy. This is not a benefit that will be extended to gay and lesbian couples in the United States probably, but just those who work for the federal government. The announcement is expected in the Oval Office tomorrow.

For more on this breaking story, I'm joined on the phone by our chief White House correspondent, Chuck Todd. Chuck, thanks very much for joining us. What details do we have about this announcement tomorrow?

CHUCK TODD, NBC CHIEF WHITE HOUSE CORRESPONDENT (through telephone):

Well, as you pointed out, not a lot of details. I mean, this sort of, frankly, got stuck in the daily guidance. And then, we got no heads-up that this was coming beyond that. And when you talk to White House officials, you're getting very little details. Simply, this is, you know, a memorandum that he's going to be signing.

I don't think we should quite call it an executive order. I'm getting mixed signals from folks inside the White House as to whether it's an executive order or a memorandum. And the difference may be whether this would extend beyond when the president would leave office or just take place while he is in office and head of the federal government.

So that's a detail that I still would like to get my hands on and I'm still waiting for - from them. And that's something we'll find out tomorrow. But this does have the feel, frankly, of just how you set it up.

I mean, you can't look at it, I think, through any other prism other than faced with what has been a lot of criticism of this administration that they have not followed through on some promises that he made regarding "Don't Ask, Don't Tell" and then, what they did with the Defense of Marriage Act.

I think they felt as if they needed to do something for the gay community because they were starting to feel some pressure. There was some, I think, a fundraiser that Vice President Biden's going to be going to where a prominent fundraiser asked to have their name pulled because they were upset about the lack of attention that they felt this administration was coming.

I mean, there were some folks that I talked to that thought this was going to happen early, like one of the first, you know, days of the administration that he would extend this right to federal employees.

MADDOW: Chuck, to be clear on the memorandum versus executive order issue. You're saying that if it's an executive order, it would effectively become the law of the land until another executive order or something contradicted that. But if it's a memorandum, this change would only be in force during the term that Obama was in office?

TODD: I think so, but don't hold me to it. That's why I wanted - but there is a difference between memorandum - because they are calling this a memorandum, not an executive order. And so there is - that means there is a legal difference.

I believe that's the difference, but apologize for - you know, you would think that my job is to know that immediately offhand. But you know what? We are full of transparency here at MSNBC and NBC. And I'm going to tell you, you know what? I don't have the full - but that is a clarification that I'm trying to get, which is simply, is this going to be just for the president's term? Or is this something that would take another order to overturn for it to roll back?

MADDOW: Chuck, one last quick question. As I understand the Defense of Marriage Act, which has been the source of some of the controversy last week, with the Thursday night brief filed by the Justice Department that used some of the inflammatory language to defend that law. As far as I understand it, that law specifically blocks benefits like these from going to same-sex spouses of federal employees.

It's not just about not recognizing a same-sex marriage at the federal level or in a state in which that marriage was not sanctified by the legislature.

TODD: Right.

MADDOW: They specifically blocked these benefits. Do you have any insight into whether or not this is treading on DOMA territory?

TODD: Well, and what could very well be - and I don't want to get into speculation, but the counsel's office may have realized, you know, this may have triggered why the president had to sign this thing and decide to do this, because they were worried that's exactly what it was going to do.

It was actually going to roll back rights that were already there in some places and they didn't - they're trying to avoid that issue and maybe tamp down some of the controversy that was surrounding how many viewed the Justice Department's brief.

MADDOW: Chuck Todd, NBC's chief White House correspondent - thanks for your reporting tonight, Chuck. Looking forward to figuring out more about this complicated situation.

TODD: I will. And I will promise lots of questions to Mr. Gibbs tomorrow at a minimum on this issue on motivations. Motivations, I think, are always very telling in a lot of these issues.

MADDOW: All right. Thanks, Chuck. Look forward to it.

TODD: OK. Bye-bye.

MADDOW: President Obama cites success on Wall Street and a pesky fly in an interview with CNBC's John Harwood. Bloomberg news columnist and author of "Liar's Poker," Michael Lewis, will be here in just a moment to talk with us about that.

Plus Spinal Tap is back. Kent Jones has a report on their new album, which goes all the way up to 11 in Cleveland. That's all coming up.

(COMMERCIAL BREAK)

BARACK OBAMA, UNITED STATES PRESIDENT: What we're trying to do is to increase the transparency and the openness that has been the signature characteristic of our - sorry. Sorry, I'm going to start over. I'm going to start at "I will contrast." Hey, get out of here.

JOHN HARWOOD, CNBC CORRESPONDENT: That's the most persistent fly I've ever seen. Nice.

OBAMA: Now -

(END VIDEO CLIP)

MADDOW: A fly getting a little too close to President Obama during an interview with CNBC's John Harwood today. We don't need no secret service. Once the winged offender was dispatched, the president did get down to business that has been on his agenda since before his inauguration. It's the big, new, awkward idea that there should be, you know, rules on Wall Street.

(BEGIN VIDEO CLIP)

OBAMA: What we propose is to - where were we - essentially update those regulatory tools that existed back in the 1930s, that were put in place after the Great Depression, to increase transparency and openness.

But I think everybody would acknowledge that if we've got rules of the road, that's what makes American capitalism thrive. That's why people invest in this country because they have confidence that if they read the prospectus, somebody's made sure that what's in there is true.

(END VIDEO CLIP)

MADDOW: President Obama will announce details of his prospectus tomorrow, which includes new powers for the Federal Reserve, new regulations on how much banks can leverage themselves, plus, measures to protect consumers from predatory lending.

What remains to be seen is how Wall Street will react. My totally amateur prediction is that they will not react well.

Joining us now is Michael Lewis. He's the editor of "Panic: The Story of Modern Financial Insanity," and a new book I stayed up all night to finish this weekend called "Home Game: An Accidental Guide to Fatherhood." Michael Lewis, great to see you.

MICHAEL LEWIS, EDITOR, "PANIC": Great to see you.

MADDOW: I love "Home Game."

LEWIS: Oh, thank you.

MADDOW: It's a very anti-Father's Day book, I have to say.

LEWIS: It's a little bit unsentimental. Yes, now, I know. It's a little unsentimental.

MADDOW: It's about un-romanticizing the idea of fatherhood, but I think also thereby reaching people who don't feel sentimental about it.

LEWIS: It's essentially journals I started keeping when I realized about five months after my first child was born that I was lying to other people about what it had been like the previous five months, until I just wanted to get down what it really felt like because that book had not been available to me.

MADDOW: yes.

LEWIS: And I think it's different for everybody. But when there's a gap between your experience and what you expect it to be, there's material there.

MADDOW: Yes.

LEWIS: And also a need for therapy. And so this was a combination of the two.

MADDOW: Also, just the idea, too, "I never feel what I'm supposed to feel."

LEWIS: Well, that's generally true of my life. But this was a big example of that. I mean, this took a while before I felt like father.

MADDOW: Yes.

LEWIS: When this thing comes out, yes, you are supposed to take care of it and it's making you miserable. And it's a while before you really kind of warm the attachment with it. And that was something that surprised me a little bit.

MADDOW: Well, it's a great book. I read everything you write because I think you're just a spectacular writer. And I thoroughly enjoyed it.

LEWIS: Well, thank you.

MADDOW: And I want to talk to you about this financial regulation thing.

LEWIS: Sure.

MADDOW: You have a Wall Street background of sorts. You've written a lot about trying to understand the crisis. Obama tells this noble tale about re-regulating Wall Street. Does Wall Street just sort of like lick its chops and think, "Oh, good, another opportunity to gain the system again"? Is there any chance this will actually work?

LEWIS: I don't think people think quite that way. But I do think that the minute - they are going to be regulating to prevent the last disaster rather than the next one.

MADDOW: Right.

LEWIS: And the danger is that the financial system remakes itself in some way that the regulatory system can't handle. And there's also this kind of big elephant in the room, I think.

And it's that the way they've handled the bailout by not allowing

essentially deciding not to nationalize the banks, not to require creditors to take hits. They've essentially put themselves in a position where to save these financial institutions, they have to give them money to get them through this. So they have to make sure they contrive profits for these institutions.

MADDOW: Yes.

LEWIS: The regulation, whatever they introduce, is likely to cut into profits of the regulatory system. If they reduce, for example, if they actually impose this sort of leverage requirements that a commercial bank is supposed to have on what were the investment banks, it's going to be harder for them to earn their way out of this.

So I don't know - you have to see the details, right? I mean, god knows what it looks like. We do know just generally is one, the political influence of Wall Street seems to be basically unlimited. I mean, it really is kind of incredible that the people who created the problem are so instrumental in deciding how the problem is going to be resolved. I mean, they were in the room (UNINTELLIGIBLE).

MADDOW: Right.

LEWIS: So that's one thing we have to remember. Two, the people in this and the previous administration, I think they all think it's all too complicated for people to understand so don't try to explain it.

And so there are never really satisfying explanations about why they are doing what they are doing. And from what I read of this thing - there hasn't been much revealed. But the one thing no one's mentioned and it's amazing to me, is the ratings agencies. The rating agencies are culprit number one in all of this.

MADDOW: They put their sort of seal of approval on all of the stuff (UNINTELLIGIBLE).

(CROSS TALK)

LEWIS: They created and rated all these piles of stuff and mortgage bonds AAA and thereby allowing people who could only buy AAA-rated securities to buy these things and thereby helping to create more of these things.

Without the ratings agencies doing what they did, there is no way this financial crisis would have happened the way it happened. It would have been a much more muted event. And the problem is the investment banks pay the ratings - these people who create the securities pay the ratings agencies. And that conflict is essentially federally sanctioned.

MADDOW: Yes.

LEWIS: It doesn't seem to have been addressed at all.

MADDOW: This is the issue for me overall. It's that it seems the structural changes that we need so all the incentives don't go exactly the wrong direction are structural and therefore radical changes.

LEWIS: Yes.

MADDOW: You need a sort of radically confrontational approach to Wall Street in order to push something like that through.

LEWIS: I think that's absolutely right.

MADDOW: And you don't get that when you have this team from Wall Street ...

LEWIS: No.

MADDOW: ... running your financial -

LEWIS: I think that's absolutely right. The system is riven with conflicts of interest and nobody wants to address them because it's so messy. And it's a radical - but I think - you know, I bet this is just the first crack at the problem.

MADDOW: Yes.

LEWIS: I think we have days of reckoning down the road. And this is a period where there can be great institutional change. And I wouldn't put it past this president to try it at some point if he isn't trying it now, I bet.

MADDOW: Michael Lewis, financial writer, sportswriter, author of all kinds, a tired father of three, thank you very much for joining us.

LEWIS: Thanks for having me.

MADDOW: Happy Fathers' Day this weekend.

LEWIS: Thank you. Send me a present.

MADDOW: No. Will you come back and talk to me after Obama announces this thing? And we'll talk about it.

LEWIS: I'll be delighted to.

MADDOW: OK. That's my present. I got one. All right. Coming up on "COUNTDOWN" Keith asks if the Letterman-Palin feud is finally over. Here is a hint - I don't think it is.

Next on this show, my friend Kent Jones' spinal-taps into America.

(COMMERCIAL BREAK)

MADDOW: We turn now to our hair metal correspondent Kent Jones. Hi, Kent.

KENT JONES, POP CULTURIST: Hi, Rachel. This is a day music fans have been waiting for, the return of one of the world's most beloved, influential, and if I may say, stupid bands of all time. Please.

(BEGIN VIDEO CLIP)

(voice-over): Remember spinal tap?

UNIDENTIFIED MALE: The numbers all go to 11. Look.

UNIDENTIFIED MALE: Why don't you just make 10 louder and make 10 be the top number and make that a little louder?

UNIDENTIFIED MALE: These go to 11.

JONES: Twenty-five years after the film "This is Spinal Tap," David St. Hubbins, Nigel Tufnel and Derek Smalls have released a new CD today called "Back From the Dead." Following in the foot steps of such seminal albums as "Intravenous de Milo," "Smell the Glove" and "Break like the Wind," "Back From the Dead" finds Tap in vintage form with such anthems as "Back From the Dead."

UNIDENTIFIED MALE: The song "Back From the Dead."

UNIDENTIFIED MALE: Yes. We've been tossed away.

UNIDENTIFIED MALE: Handed out.

UNIDENTIFIED MALE: We tossed ourselves away.

UNIDENTIFIED MALE: That's right.

JONES: "Rock and Roll Nightmare."

UNIDENTIFIED MALE: How come we're not releasing an early one?

UNIDENTIFIED MALE: It's prehistoric.

JONES: And "Warmer Than Hell."

UNIDENTIFIED MALE: It's called "Warmer Than Hell" and it is our

response to global warming which we feel is the work of the devil. It's

got this kind of -

(MUSIC)

UNIDENTIFIED MALE: Relentless like warming itself.

JONES: Unfortunately Spinal Tap's 2009 unstoppable tour has been

canceled. But given their touring history -

(MUSIC)

That may be just as well.

(END VIDEO CLIP)

MADDOW: Outstanding. Thank you, Kent.

JONES: Sure.

MADDOW: Much appreciated. A cocktail moment for you.

JONES: Yes.

MADDOW: When my mom retired recently from her job, she took up golf.

JONES: Great.

MADDOW: Which - well, we're like a nuns-and-fishermen family.

JONES: Yes.

MADDOW: (UNINTELLIGIBLE) family. But she loves it. She plays all the time. And today, for the first time ever, on her birthday, she hit a hole in one.

JONES: Wow!

MADDOW: For real, she actually did. Happy birthday, Mom!

JONES: Yay!

MADDOW: Thanks for watching. "COUNTDOWN" with Keith Olbermann starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END

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