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updated 1/28/2013 11:27:18 AM ET 2013-01-28T16:27:18

THE RACHEL MADDOW SHOW
January 25, 2013

Guest: Eliot Spitzer


ED SCHULTZ, "THE ED SHOW" HOST: That is "THE ED SHOW." I`m Ed
Schultz.

THE RACHEL MADDOW SHOW starts right now.

Good evening, Rachel.

RACHEL MADDOW, HOST: Good evening, Ed. Thank you, my friend.

And thanks t o you at home --

SCHULTZ: You bet. Have a great weekend.

MADDOW: I will.

SCHULTZ: Thanks to you at home for joining us. Happy Friday.

The Detroit Lions used to play in this building, the Pontiac
Silverdome in once prosperous Pontiac, Michigan. After the Detroit Lions
left the Silverdome in `02 and the Pontiac factory moved and the town of
Pontiac went broke, they`re tried to sell the stadium to the highest
bidder.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The field has seen monster truck rallies, soccer
games. If it can happen on a field, it can happen here.

UNIDENTIFIED MALE: Out here at the Silverdome, we have anything
ranging from your dirt shows, snow cross shows, home and garden shows,
trade shows, concerts, all the way down to anything you would like to do on
top of a field football, soccer, indoor football, arena football, you could
have lacrosse down here.

(END VIDEO CLIP)

MADDOW: A Canadian tycoon eventually bought the Silverdome in 2009.
Not for lacrosse, though.

The place cost $55 million to build when they first built it. He got
it for a half million dollars. The tycoon had wanted to put a casino in
there. But last year, voters said no to that.

Well, this is Pontiac`s formally $55 million Silverdome right now.
Look at that.

Over the past week, wind storms have shredded the Silverdome`s
inflatable roof. So now the weather comes right in.

But do not worry. The new owner said they were going to build a new
roof anyway. He said the Silverdome in tatters in the brief Michigan
winter is not really the disaster it looks like. It`s more like a very,
very rough phase 1, the demo phase for his next big plan to make money ion
the dome that nobody wanted and that is so broke and the state that is
often really just so much crazy.

Michigan is amazing. Michigan Republicans, you in particular are
amazing. On Inauguration Day this week, while the president was being
sworn in for the start of his second term, Michigan Republicans back home,
they spent the day talking about turning an island in the Detroit area into
a new independent country. It would be ruled based on the fictional pseudo
economic novels of Ayn Rand, the patron saint of Paul Ryan.

That`s what they spent Inauguration Day doing. Good luck with that.

Right after the election this year, after insisting publicly over and
over again that there was no need to strip union rights in the state of
Michigan, Michigan Republicans, surprise, passed a bill doing just that,
and Governor Rick Snyder signed it. The whole thing was opened, passed,
and shut within a week, never mind what we said before, we`re doing it.
Surprise.

Michigan is amazing, right? I mean, Michigan is the state with the
Republican law to let the state fire all your locally elected officials and
unilaterally abolish your town if they want to on their own say so, no
matter how you vote.

In November, this past election, Michigan voters repealed that with a
direct vote, the will of the people. The month after that, Governor Snyder
and the Republicans in the legislature gave the voters of Michigan a big
Michigan Republican one-finger salute. They decided to pass and sign into
law a new emergency manager law to replace the one that the voters just
killed. Except this new one can`t be killed by the voters.

What`s that you say? The will of the who now? I`m sorry, have we
met?

You know those really funny videos about the honey badger and about
how the honey badger don`t give a bleep? Michigan Republicans are the
honey badgers of electoral politics. They do not give a bleep.

And because Michigan Republicans do not care what anyone thinks of
them, certainly not the press, but apparently also not the voters, Michigan
is my personal nominee. Michigan is my nominee for the one state that is
shameless enough to actually do what a whole host of other states finally
today are starting to get too embarrassed to go ahead with.

Usually the outlier in American normal politics is Florida, right?
Florida`s generally considered to be our weird state. Florida is so weird
that on the home page of weird, Fark.com, the site is divided into sections
like sad, strange, weird, scary, or Florida. You can click on the Florida
tag and you just get the stuff that it seems could only happen in Florida.
Enough said, right?

If the headline starts with "naked Florida man" and the story includes
doctors being unable to determine what drugs he is on, welcome to your
newfound celebrity status, good sir. That one turns out to be the Florida
story of an alleged naked burglar who is a carnie whose alleged malfeasance
is such that I`m going to let you read the headline itself rather than
attempt to say it myself on TV.

OK? We expect this from Florida, right?

It`s not just true crime, though, that makes Florida so weird. It`s
politics too. Florida politics are often the political equivalent of the
naked pooping carnie burglar, right? The 2011 debacle, Katherine Harris,
the butterfly ballot, all the nice old Jewish people in south Florida
inadvertently voting for Uncle Pat Buchanan? Yes.

The congressman, David Rivera, his scandal, right? Hiring fake
candidates to run in sham elections, and then reporters getting water
thrown in their face when they go to investigate.

Electing the guy that was forced out of the company with the largest
Medicare fraud fine in history because he said as governor he would crack
down on all the health care fraud.

I mean, that`s Florida, right? Florida has always been seen as the
shameless American state. This year in the 2012 election, there were
incredibly long lines for voting in Florida, on purpose, because the
governor, Rick Scott, signed a law to cut early voting days in half. The
latest academic analysis of the impact of that says at least 200,000 people
did not vote in 2012, who otherwise would have voted because they couldn`t
wait in the eight-hour-long lines that Rick Scott created and then defended
as the right thing to do.

Florida`s electoral failure this year was so spectacular, it got a
shout out from the president on election night, and a huge round of
applause when he talked about those long lines and said, "We have to fix
that."

That same Florida fail has become a rallying cry for the newly
Democratic Florida politician Charlie Crist, as he mounts what might be a
challenge to Rick Scott as governor. And all that attention, we think of
Florida as being un-embarrassable, right? But all that attention has maybe
made even unembarrassable Florida little embarrassed about the way they`re
doing their politics right now.

Since the election, Governor Scott has backed down on his cut in early
voting days, which he had previously been defending. He now says he`ll put
the early voting days that used to be there back.

Florida Republicans actually got embarrassed, and they caved on the
early voting thing that same dynamic may now be a work in the latest
national shamelessness exercise in electoral tilt the playing field
shenanigans. This one started with RedMap. RedMap was the national
Republican Party project this past year targeting specific blue states.

The plan was to aggressively redistrict those states` electoral maps
to make election essentially a lock for Republicans. And the Republicans
are not embarrassed by this. They are bragging now that this scheme is the
only way they held on to the House, even though more people voted for
Republicans than Democrats for the House this year.

Since RedMap, Republicans have followed up on RedMap`s success by
considering a way to push that scheme even further. They`re trying to
change the rules state by state to start electing the president using the
same gerrymandered maps that won them the House, even though they got less
votes than the other party for the House. They`ve been plotting a way to
overturn the Electoral College winner-takes-all system in these blue
states, to instead allocate electoral votes by congressional district, by
the congressional districts that they have aggressively redrawn to be a
lock for Republicans.

It`s ambitious, right? It is ambitious, but it started off I`m sure
deliberately as a very quiet effort. And because it was being done quietly
in disparate states, it was not getting much attention in the national
news.

Now, though, it has become a front-page story. Now, it`s getting tons
of national attention all of the sudden. It was the conservative -- it was
the D.C. paper, "The National Journal" that first picked up on this
Republican plan last month. It was their reporting that we flagged early
last week when we said hey, beltway, wake up. This is happening.

Since that, since we`re trying to draw people`s attention to it, the
coverage of it really has taken off. It began percolating the very next
day on some of the more influential lefty blogs. Think Progress, Daily
Kos, Talking Points Memo. From there, it ended up hitting the mainstream.

"The Associated Press" ran with this headline late last week,
Republicans eye new election laws. The inside the Beltway news
organizations then started to run their own stories on this plan.

This was the front page above the fold headline in "The Washington
Post" today. Look at that. Front page, above the fold, right-hand column.
"GOP is pushing electoral changes. Virginia among states at issue."

It`s now becoming big national news. And then tonight, the big
kahuna, it hit the national newscasts.

(BEGIN VIDEO CLIP)

BRIAN WILLIAMS, NBC NEWS ANCHOR: Seeing red. A push by Republicans
to change the way we elect a president. If these had been the rules across
the map in November, we`d have President Romney.

REPORTER: If the whole country adopted plans now being considered in
Virginia, Michigan, Ohio, Pennsylvania, and Wisconsin, instead of Obama
winning 332-206, the electoral map would have gone from blue to red, Romney
over Obama.

(END VIDEO CLIP)

MADDOW: As this story goes national, as this story gets national
attention and goes sort of big-time as news goes, Republicans in the states
that have been pushing this plan seem to be getting a little embarrassed.

In Florida, the previously unembarrassable Florida, where Rick Scott
backed off the early vote long lines disaster just last week, the
Republican speaker of the Florida House now says no way are they going to
do this Electoral College rig the vote thing. Do not pin that tail on him.

Quote, "To me, that`s like saying in a football game, we should only
have three quarters because we were winning after three quarters and they
beat us in the fourth. I don`t think we need to change the rules of the
game. I think we need to get better."

OK. It looks like it`s going nowhere in Florida.

How about Virginia, where Republicans moved a bill to act on this
change earlier in the week? Well, in Virginia, two crucial Republican
senators are now saying no to this idea. Also, Virginia`s governor,
Governor Ultrasound Bob McDonnell, he also now definitively saying no, he
is opposed to making the change.

Republicans floated the idea before in Pennsylvania, before the
election. And Governor Tom Corbett in Pennsylvania was enthusiastic about
the idea. But now, ah, now, with all this attention, now Republicans in
Pennsylvania are sitting on their hands. The chairman of the Pennsylvania
Republican Party saying he didn`t really like the idea the first time
around either.

In Ohio, it was about five minutes after the election when the
Republican secretary of state there John Husted began stumping for this
idea of making the Electoral College change. Hey, it`s just an idea,
right? But now it`s very, very quiet in Ohio.

And that leaves Michigan. Oh, Michigan. Michigan, my nominee for
incapable of being embarrassed. Move over, Florida.

Michigan has a bill on the way with the Republican sponsor who is
quite unembarrassed by the attention now or his failure to pass the same
kind of bill last year. Quote, "The bill got no traction last year. There
were people convinced Romney was going to win. And that might take
electoral votes from him."

But now, now that Romney lost, now maybe -- even Rick Snyder, the
governor is warming up to the idea this week and saying so publicly.
Governor Snyder now saying it is fair to change the rules since the
election is not for a few more years yet.

We started this week with six states on the map where Republicans were
talking about changing the rules to elect the president so you could use
the gerrymandered congressional maps to make the presidential election go
the way the House vote went this year where Democrats got more votes but
Republicans still held the office. We started with a map of six. Two of
those states have now put the idea in the deepest part of the deep freeze
where they can reach without falling in.

Most of the other states on this map appear to be putting the idea on
ice, putting it on the ice floe, saying, "Good luck, you`re on your own."

But Michigan -- in Michigan, they appear to be just warming up.
Michigan is my bet for actually doing this thing that most of Republican
America is now too embarrassed to go ahead with. Michigan is not like the
other states anymore. What will not work anywhere else, they think works
there.

So what if the Silverdome roof is in tatters or if voters reject a law
or if Republicans in those other blue states are suddenly too embarrassed
to turn democracy into just another fist for a fistfight. Does even an
avalanche of public shaming embarrassed Michigan Republicans?

Do they get embarrassed? Or do they just get on with it? Now, that
we finally got national attention to this scheme, now we are about to find
out just how much of a honey badger Michigan Republicans really are.

(COMMERCIAL BREAK)

MADDOW: A man named Saxby Chambliss announced that he is retiring
today. As a U.S. senator, he is up for reelection in 2014, but he is not
going to run. He was about to get primaried, challenged from the right
from within his own party. He doesn`t say this is why he is quitting, but
now, he is quitting rather than face that challenge.

Now, that he is quitting, who is going to be the Republican nominee
for that Senate seat in 2014?

(BEGIN VIDEO CLIP)

HERMAN CAIN (R), FORMER PRESIDENTIAL CANDIDATE: They asked me who is
the president of ubek-beki-beki-stan-stan, I`m going to say I don`t know.
Do you know?

(END VIDEO CLIP)

MADDOW: Herman Cain has run before in Georgia. But, alas, he said
today that even though everybody is asking him, he is not going to run for
Saxby Chambliss` seat.

The other names that floated immediately to the top were this guy.

(BEGIN VIDEO CLIP)

REP. PAUL BROUN (R), GEORGIA: All this stuff I was taught about
evolution, embryology, Big Bang theory, all that lies straight from the pit
of hell.

(END VIDEO CLIP)

MADDOW: Congressman Paul Broun. He is on the House Science
Committee, straight from the pit of hell.

He also says he does not know if President Obama is a U.S. citizen.

Also on everybody`s short list for the Saxby Chambliss Senate seat is
this guy, Congressman Phil Gingrey, who says Todd Akin got a bad rap on
that whole legitimate rain thing. Todd Akin was pretty much right about
that.

And rounding out the short list -- remember when the Susan G. Komen
Breast Cancer Foundation decided to go after Planned Parenthood and it was
a huge disaster for them? The woman whose that idea that was, she
apparently is also on the Republican short list for the Saxby Chambliss
Senate seat.

So, Republicans are looking at maybe choosing among the birther,
"science is a lie from the pit of hell" guy; the one who says Todd Akin was
right; and the woman who was so anti-abortion she managed to get a cancer
charity in P.R. trouble.

Saxby Chambliss would have very likely been re-elected to this seat if
he was running for it again. But instead, one of these guys? Seriously?

This is the exact Republican strategic formula that resulted in
Democratic Joe Donnelly getting the Indiana Senate seat that had been held
by Republican Dick Lugar for 35 years. It`s the same formula that got
Democrat Claire McCaskill to hold on to her seat in Missouri when nobody
thought she could hold on to it.

It`s the same formula that got Harry Reid to hold on to his seat when
nobody thought he could hold on to his seat that year. And Democrat Chris
Coons in Delaware, and Democrat Michael Bennett in Colorado.

This is the formula. This is a familiar scenario for a reason. And
it is still going on right now in 2013 in the Republican Party.

The last Republican presidential nominee did not come to the
presidential inauguration this week. Mitt Romney is the first losing
presidential candidate since Michael Dukakis in 1989 to not go to the
inaugural. He did go to the trouble of leaking to the press that he
probably wouldn`t even watch the inauguration on TV, which is classy.

But Mr. Romney did actually go to Washington today to attend a
luncheon in his own honor at the Washington Marriott Hotel. There`s a
certain awkwardness to this trip, right? To come to D.C. not for the
inauguration, but for something honoring yourself.

That perceived ungraciousness, though, is not just a one-way street
there is a certain amount of ungraciousness that honestly is being shown to
Mr. Romney right now by his own party. The Republican Party this week has
been making a big show of publicly de-Romney-fying themselves, cleansing
themselves of all traces of the Romney presidential nomination.

Remember the empty chair that Clint Eastwood famously ranted at during
prime time at the Republican convention this year? It`s now being used as
a physical symbol for the Republicans of what went wrong with this
presidential nomination. The chairman of the party told the press this
week that he keeps that chair in his office. He pointed it out to
reporters as a sign that he is committed to never forget the mistakes of
2012.

A Republican strategist telling "The Washington Post" this week,
"There is no Romney faction or Romney wing of the Republican Party keeping
the flame alive. No one tailors their policies because it was what Romney
supported in the 2012 campaign. No one feels like they need to be loyal to
the Romney position on any issue."

And in the conservative media this week, quote, "Some Republicans
believe the RNC ceded too much control of the party`s message to the Romney
campaign, which was happy to run the show in the confidence that Romney
would soon be elected president. The result was catastrophic."

Republicans are even talking about undoing the procedural rules that
Mr. Romney established for the delegate process, and they`re putting news
of that effort out into the press. The Republicans want you to know that
they`re getting rid of everything Romney. They are taking a hot bleach
shower.

They are making a very public display of expunging all evidence of his
candidacy, because he obviously was the problem with the Republican Party.
He must have been. Everything else has been awesome. And that`s why
they`re keeping everything else.

The other thing that happened in Republican politics today is that
they reelected Reince Priebus as chairman of the party. Even more amazing,
he ran unopposed. It`s the guy who was in charge of the Republican Party
is keeping his job, no question about it, nobody even competing with him.

And meanwhile, the purification process of killing off, even very
conservative Republican incumbents in favor of ever more doctrinaire
further right challengers who are further outside the mainstream, that is
claiming new scalps even today. Still even in the United States Senate,
with Saxby Chambliss, a guy who in his last election year got an A-plus
rating from the NRA and a 100 percent rating from the National Right to
Life Committee, he is being forced out. He is not far right enough.

Thank goodness they got that Mitt Romney guy out of the way. Now,
they can go back to all the winning.

Joining us now for insight is Michael Steele, MSNBC analyst, former
chairman of the Republican Party and as always a good sport.

Mr. Steele, it`s nice to see you.

MICHAEL STEELE, FORMER RNC CHAIRMAN: It`s good to see you, Rachel.

MADDOW: Do you think there is really no imprint at all that Mitt
Romney should have left on the Republican Party? They`re just trying to
pretend like he was a bad dream.

STEELE: Well, that`s just silly. And the fact of the matter is that
Mitt Romney went through a primary process in which delegates and activists
around the country voted overwhelmingly for him. And so to now sit back
and say, well, there may not be a Romney wing of the party, but certainly
as our nominee, he did -- he did have some stature. He did leave an
imprint and an impression.

And you can`t whitewash that. You can`t just say it didn`t happen, it
didn`t exist. And if we ignore it and pretend it never did, then
everything else we do will be better.

And so it`s just silly and it`s just typical crap that these guys
throw around to put the blame some place else, instead of looking at the
internal processes that are much more focused on anything other than
grassroots, you know, would take care of our vendors, we take care of our
consultants. What are they doing on the ground with state party
organizations?

There is no reason, Rachel, why this party was not prepared after
everything that we had done between 2009 to elect Chris Christie in New
Jersey, Bob McDonnell of Virginia, to pick up those House and Senate seats
around the country, that they didn`t have that ground game already in place
that they like to vilify before, but got folks elected.

MADDOW: Well, when try to understand what is going on in the
Republican Party, looking at very broad strokes movements inside the party,
I feel like we had Bush and Cheney. We had the McCain/Palin campaign. And
that was a primary campaign. That was decided pretty early on. So, the
party really unified around McCain and Palin.

And then we essentially had the Tea Party movement. The Tea Party
movement was manifest as a purification process, primarying even very
conservative incumbents for people who were further outside the mainstream,
further to the right.

I thought that ended with the Romney era. But it seems like
Republicans still think that was a good idea.

STEELE: Well, actually, Rachel, it ended during the first few months
of my campaign, of my chairmanship. We sat down with a lot of Tea Party
activists after the Scozzafava race in New York 23 in the spring of 2009.
Largely a lot of other nomination processes had started, and that effort
was under way.

So what we tried to do is get in front and say, look, let`s cooperate,
let`s work together, because you can`t go after our incumbents in states
like Delaware and Colorado and Utah and elsewhere where, you know, but for
this individual, we would not have this seat. And so, we negotiated a
peace, if you will, for further campaigns and worked cooperatively with Tea
Party activists around the country. That clearly had not happened over the
last couple of years.

We saw what happened to the Ron Paul campaign and how he was treated
at the national convention. Not allowed to speak. His delegates not given
a voice on the floor. And now, they`re trying to make nice with these guys
and pretend that that didn`t happen.

Well, the grassroots activists have very long memories. So your words
are nice, but your actions say more. And I think that the party has put
itself in a very difficult position, and will see itself challenged if we
do not get on the ground and work with these organizations and individuals
who are very fired up and passionate, but put that energy in a very
constructive way to support incumbents that we have, particularly in those
tough districts or states that we can barely hold on to, like a Georgia.

I mean, that seat could come in play, depending who that nominee is.
And the party has to give that some great consideration.

MADDOW: That substantive critique from you and the different strands
of substantive critique about what happened in 2012 and what`s wrong inside
the party and the structure of the party makes it so remarkable to me that
Reince Priebus was unopposed. I just -- I find it astonishing.

STEELE: Yes, me too.

MADDOW: Yes, I figured.

Michael Steele, MSNBC analyst, former chairman of the party -- thank
you for your time tonight. It`s great to see you back.

STEELE: All right, Rachel.

MADDOW: Thanks, Michael.

All right. President Obama has made his choice to run the SEC, the
agency that is supposed to police Wall Street. There are very few people,
like maybe zero people who know more about the nominee or the job of the
nominee than our special guest tonight, former New York governor and
attorney general, Eliot Spitzer, is here. Yes!

Stay tuned.

(COMMERCIAL BREAK)

MADDOW: Some eye catching reporting this week about anonymous
liberals making the case against President Obama`s nominee for defense
secretary. Anonymous liberals. Why would they be anonymous?

(SIREN)

MADDOW: I know what this is. Do not be alarmed. This is a RACHEL
MADDOW SHOW bullpuckey alert. Remain calm. We have the situation under
control. We`ve been training for this all year.

Stay tuned. This is a bullpuckey alert code 3. Stand by. We`ll take
care of this shortly.

(COMMERCIAL BREAK)

MADDOW: November 26th, 2008. We began to hear news late that night
about something going very wrong in one of the busiest parts of one of the
busiest cities of the world, the city of Mumbai, Bombay in India was under
attack. But at least at first, it was hard to figure out what was going
on. And once we figured out what was going on, it was hard to believe that
it could be possible.

There were explosions at a lot of different heavily populated places
around the city -- a train station, a cafe, two hotels, a state bank of
India building. There were multiple attackers at multiple sites
simultaneously, killing people with machine guns and grenades. And it just
kept going on and on and on. The gunman had stormed two hotels. They had
taken hostages. People were barricaded in their rooms.

And when November 26th turned into November 27th, and there was still
no end in sight, it was still ongoing -- it became clear that this was an
unusually well-coordinated, highly-researched, highly-planned terrorist
attack. By the time the three-day siege had ended, 11 different locations
had been struck around the city.

There were 10 attackers. They killed 166 people. The majority of the
people they killed were Indians, but among the dead were six Americans,
including a 13-year-old American girl.

Even once it was over, it seemed impossible that this had actually
happened and had gone on for so long in such a big city in such a
cosmopolitan place with so many different attackers and so many targets and
so many people killed. It was almost impossible to get your head around.

And for Americans, in particular, what remains almost impossible to
get our heads around is that one of the main planners of that attack is an
American guy. His name is David Headley. He was born in the United
States. His mother is American. His father is from Pakistan.

The thing that made David Headley most valuable to the terrorist
groups that trained him was that he was an American, which meant that he
could travel easily all over the world without attracting suspicion --
thanks to his American passport.

When the 10 attackers arrived in India for the Mumbai terrorist
attack, none of them had ever been to that city before, but they were able
to pull off this highly-coordinated, highly-mobile multisite attack in a
strange city they didn`t know because of David Headley. They knew exactly
where to go because David Headley had scouted everything for them. He had
given them meticulously prepared videos and reports and GPS coordinates
about how to wage that assault on that city in November 2008.

David Headley was not arrested until almost a year after the attack in
October 2009. U.S. officials picked him up at O`Hare Airport in Chicago
when he was en route to Denmark in the midst of planning a second Mumbai-
style attack. The attack in Denmark was going to involve terrorists
storming a newspaper office in Denmark, beheading the employees and
throwing the heads out of the window of the newspaper office out on to the
street. They were going for the highest level of horror possible. That`s
the terror in terrorism.

American David Headley was in the process of scouting locations for
the Danish attack, just as he had done for Mumbai when he was arrested in
Chicago.

And then, yesterday, David Headley was finally sentenced to 35 years
in prison. He was sentenced in Chicago. The only reason he didn`t get
life is because he turned state`s evidence in what prosecutors say was a
big way. Only one of the actual gunmen from the Mumbai attack survived the
attack itself. He was hanged in India last year.

But as an orchestrator of the attack, David Headley was tried here in
the U.S. and you may recall that precisely nobody complained that it was
too dangerous to try David Headley here even though he was a terrorist
involved in a complicated international terrorism plot. Arrested here,
questioned here, he turned against his former comrades and helped the U.S.
catch more terrorists. He even testified against some of his fellow co-
conspirators.

And now, he has been sentenced here. And he will do what is likely to
be the rest of his life in prison here in federal prison.

Despite the high-pitched whining about the need for Guantanamo,
terrorists get prosecuted here all the time. American prosecutors do it.
These cases can take years to build, but they can be done, and people go to
federal prison. These things have been done even in the highest profile
terrorism cases.

And they have often been done by this person. This is Mary Jo White.
When it came time to prosecute the people who carried out the 1993 attack
on the World Trade Center, the person who led that prosecution was Mary Jo
White. That was Ms. White`s first year on the job as the U.S. attorney,
the federal prosecutor for the southern district of New York. She is the
only woman who have ever had that job in the 200 years that job has
existed.

One of the first things she did her first year was help prosecute the
people who bombed the World Trade Center in `93. That same year, her
office prosecuted the Blind Sheik, Omar Abdul Rahman for his role in
conspiring to bomb the U.N. and other places in New York City.

In the wake of the Blind Sheik case, Ms. White created a terrorism
unit in her office. No other U.S. attorneys office had one at the time.
She was the first to do that.

Mary Jo White also led the prosecution against mob boss John Gotti.
She won the conviction that put him in prison for the rest of his life.
Several other prosecutors had tried to do that, but had failed to it. She
did it.

In 1996, she helped convict Ramzi Yousef for his attempt to
assassinate the pope and blow up multiple planes in flight. He was the
nephew of Khalid Sheik Mohammed.

In 2001, her office prosecuted four of the men who`d helped
orchestrate the embassy bombings in East Africa.

Yesterday, President Obama nominated Mary Jo White to be the next head
of Securities and Exchange Commission, which is essentially the top cop of
Wall Street.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: As one former SEC
chairman said, Mary Jo does not intimidate easily, and that`s important,
because she has a big job ahead of her. There is much more work to be done
to complete the task of reforming Wall Street and making sure that American
investors are better informed and better protected going forward.

(END VIDEO CLIP)

MADDOW: Mary Jo White`s experience as a federal prosecutor of high
profile terrorism cases is not the only thing you should know about her
career given this nomination. There`s also the matter of her decade as a
defense attorney, not a prosecutor, but a defense attorney. When she left
the prosecutor`s office in `02, she went to a private law firm. She
started prosecuting cases and started defending defendants. Among her
areas of focus at that law firm, why collar criminal defense and white
collar internal investigations.

From that side of the legal aisle, Mary Jo White defended the giant
global financial firm Morgan Stanley. She defended the CEO of Bank of
America. She defended JPMorgan Chase and cases dating back to the big
financial crisis that almost swallowed whole the nation`s economy.

If she is confirmed, her new job would be to oversee some of those
former clients of hers to make sure they follow the rules.

She is an interesting choice, right? A highly qualified but
interesting choice.

If you are the kind of Wall Street guy who can`t believe you didn`t go
to prison for what happened in `08, who can`t believe what you guys got
away with when you crashed the national economy by knowingly breaking all
the rules -- if you`re that guy on Wall Street tonight and you`re still
behaving that way when you go to work every day, are you happy to hear that
this Wall Street white collar defense attorney is going to be the new top
cop on Wall Street? Are you happy about that?

She defended the Bank of America CEO.

Or are you scared because the cop who put away John Gotti and the
Blind Sheik might be coming for you on Wall Street next?

Which is it? Are you bummed or are you psyched?

The one and only Eliot Spitzer joins us next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: It`s not enough to change the law. We also need cops on the
beat to enforce the law. And that`s why today I am nominating Mary Jo
White to lead the Securities and Exchange Commission.

Over a decade as a U.S. attorney in New York, she helped prosecute
white collar criminals and money launderers. In the early 1990s, she
brought down John Gotti, the head of the Gambino crime syndicate. And she
brought to justice the terrorists who are responsible for bombing the World
Trade Center and the American embassies in Africa.

So I`d say that`s a pretty good run. You don`t want to mess with Mary
Jo.

(END VIDEO CLIP)

MADDOW: You don`t want to mess with Mary Jo if you are a terrorist or
a mobster. But if you are the CEO of Bank of America, or if you`re
JPMorgan Chase, Mary Jo White has not been nearly as scary as she has been
to those other different, very different types of bad guys.

Does President Obama nominating Mary Jo White to be the top cop of
Wall Street at the SEC mean that we`re going to get a new tough cop on Wall
Street, or does this mean that Wall Street is still being trusted to police
itself?

The person I most want to ask about this is the former New York
governor and New York attorney general who earned himself the nickname "The
Sheriff of Wall Street" while he was in office. He, of course, is Eliot
Spitzer.

Governor, thank you for being here.

ELIOT SPITZER (D), FORMER NEW YORK GOVERNOR: My pleasure. And it`s a
joy to be here on the set with you. Thank you.

MADDOW: Mary Jo White spent the last two years defending JPMorgan
Chase, in cases that dated back to the bank`s behavior during the financial
crisis.

SPITZER: Right.

MADDOW: Now, she is slated to run the agency whose job it would be to
investigate JPMorgan Chase if the bank were breaking the law. That really
sounds like a problem to me.

SPITZER: It sounds like a problem. And to answer your question, are
the CEOs thrilled or terrified? The answer is both.

MADDOW: OK.

SPITZER: Because we don`t know until we watch what she does, whether
she has internalized the defenses she made on their and a half. What do I
mean by that? She is tough. The president is right.

She brought down prosecutors. She brought down John Gotti. She
brought down terrorists. She knows how to use the law in a creative,
aggressive way.

The question is over the years representing the Ken Lewises of the
world, the CEO of Bank of America, has she begun to believe her own
rhetoric? That`s what happened to Harvey Pitt. Harvey Pitt, former
chairman of the SEC, a disaster.

He first came in and said, "I want the kinder, gentler SEC." He
destroyed the place.

Mary Jo has the capacity to step up to the plate and show us that she
can turn that broken agency around.

Here interest three metrics that I think we judge her by:

One, what cases does she bring and bring quickly? Use the Clayton
documents which showed the knowledge within the banks of the corruption of
what they were doing about the underlying mortgages. Use those documents
to make structural cases.

Two, seek remedies that go way beyond money. Reorganize the banks and
the way they do business. Remedies has been the problem of the SEC, even
when they prove guilt, they say pass a little money and we go away. That`s
not enough.

And, three, the rule-making capacity. And I don`t just mean rules
about how they issue their proxy statements. I mean rules that empower
shareholders to finally run the companies on the behalf of shareholders,
not on behalf of the CEOs.

Those are the three different metrics I`m looking for.

MADDOW: Two questions about her which I think you know the answer to.
One is her organizational capacity.

SPITZER: Right.

MADDOW: Because it`s not that she is out there, arguing -- litigating
every single case inside of the SEC.

SPITZER: Right.

MADDOW: You need to be able to run the agency.

But, two, her understanding of the implications, the moral
implications and legal implications of complex financial doings. Is she
capable over doing it?

SPITZER: Look, she is as smart as you will find anybody to be. She
understands all of this. I`ve been on panels with her. We have sometimes
jousted about the proper remedies in some of these issues, because she was
back at the voice of representing these guys.

But she gets it. And I think if she takes that enormous innate talent
she`s got to understand what these companies did to the markets and to the
economy that we depend upon, she can be a remarkable force at the SEC.

MADDOW: I don`t mean raw intellectual power, though. I mean, does
she have the technical understanding of what they`re doing? These people
have counted on people not understanding their business.

SPITZER: Yes. She has that the capacity to understand it the way
anybody that smart would. But what you`re saying at a deeper level is she
doesn`t make the cases individually. She doesn`t sit behind the desk and
say, you know, I`m going to invest A, B or C. She`s got to infuse the
organization with the energy, the creativity, the spirit and bring into the
organization the people who can do it.

Now, a lot of people say revolving door. She comes from the other
side of the aisle. Revolving door is a better metaphor than diagnosis.
And what I mean by that is we all love the imagery of the revolving door as
a major problem. Some of the real dead wood at the SEC are folks who have
been there forever. They`ve never been in the private sector, and
likewise, some of the best people who have reformed our financial markets
like Gary Gensler came from Goldman.

So it`s not so much where you came from, it`s what`s up here. In
other words, do you have the energy and independence to break with wherever
you have been to say this has got to change?

MADDOW: Don`t you think the incentive change of the revolving door
metaphor, though, makes sense?

SPITZER: Yes.

MADDOW: That people who are not at the top of the agency, but the
agency may be thinking -- you know what, I would love you guys to hire me
maybe, later, I want you to have positive associations with me when I give
you my resume?

SPITZER: Absolutely. But Mary Jo doesn`t respond to that. First, I
don`t mean to pass judgment. She is independently wealthy at this point.
She`s made a load of money. Her husband is very successful as a lawyer.

Money is not what drives Mary Jo. She values the integrity of what
she`s going to do. Not to say necessarily she is going to be good. It
doesn`t -- but as I said a couple of moments ago, she brings the cases,
seeks the remedies and changes the rules to empower shareholders. She can
be transformational. She has the intellect and capacity to do it.

We will have to wait and see. That`s why being agnostic about what we
expect is the better approach. And the CEOs who are out there should be
kind of having a drink tonight, saying I don`t know if I should be happy or
terrified, in answer to your question.

MADDOW: So they should have one, not 10, because they`re not
celebrating or drowning their sorrows. They have to work tomorrow to get
their act together in case she is coming after them. Fair enough?

SPITZER: Yes, I think that`s right. Try to think of something
clever, I don`t know what their tolerance is. But you`re right.

I`d rather not be drinking at all, when they get drunk, they do
dangerous things to the economy. But we`re going to keep them sober.

MADDOW: Former attorney general, former governor, Eliot Spitzer, it
has been too long since we had you here. I know you had been doing weird
stuff.

SPITZER: I was on a TV network. I don`t know what happened to it.

MADDOW: I don`t know either. I`m glad you`re back. It`s great to
see you. Thank you, sir.

SPITZER: Thank you so much.

MADDOW: All right. So, I`m sorry to say, but there is reporting in
respected corners of the news media tonight that seems to me like
bullpuckey -- maybe I`m wrong, but maybe it is time to call bullpuckey on
TV, with the siren and everything. That`s next.

(COMMERCIAL BREAK)

MADDOW: There is something going on in the news right now that I
think is bullpuckey. Not that I`m opposed to it or offended by it, but I
think it is not true. I think it`s a lie. I think we are being swindled,
snookered. And I want to call bullpuckey.

So, here it goes:

It`s about one of President Obama`s nominees for his second term
cabinet. The nominations for key staff in the president`s second term
happen just about every day now, usually around lunch time.

Yesterday, the president picked Richard Cordray to lead the Consumer
Financial Protection Bureau. And as we just discuss with Governor Spitzer,
he picked Mary Jo White to run the SEC.

Today, foreign policy adviser Denis McDonough got the nod to be the
president`s chief of staff. He and the president are known to be
personally very close. He was physically very close to the president. In
the most famous photo from the president`s first term, that`s him two seats
over from the president, right next to Hillary Clinton during the raid that
killed bin Laden.

In his previous life, as senior adviser to then top Democrat in the
Senate, Tom Daschle, Denis McDonough helped craft the resolution that
authorized the Iraq War, which is the kind of baggage that might prove
troubling at a confirmation hearing. But a chief of staff nomination is
not the kind that the Senate has not to confirm. Not like, say, secretary
of state.

John Kerry is the president`s nominee for that post. He had his
confirmation hearing yesterday. And a greater love fest has never been
seen before in something less than a PG-rating. The full Senate will vote
on Senator Kerry`s nomination on Tuesday. Honestly, the only surprise will
be if it is not unanimous. And no, Rand Paul`s vote doesn`t count.

Really, there are just two nominations thus far that had any suspense
with them at all. One is John Brennan, to be director of the CIA. Right
now, he is the president`s counter-terrorism adviser. He has many, many
allies in the administration. They are lobbying hard against any perceived
opposition to his nomination.

The reason they worry is that John Brennan is the de facto face of the
Obama administration`s drone program.

And before that, he was chief of staff to CIA Director George Tenet,
in the George W. Bush era, bad old CIA torture days. That`s why John
Brennan didn`t get the nomination to run the CIA in the first time around.
So his confirmation hearings this time around, on February 7th, should be
very interested. So, that`s one where there`s some controversy there.

The other nomination, for which there are at least used to be some
suspense, is former Republican Senator Chuck Hagel as the nominee for
defense. I say there used to be suspense about this nomination because
questions about whether there would be a fight against him from the left
have largely dried up.

Democratic Senators Frank Lautenberg, Joe Manchin, Chris Coons, Jeanne
Shaheen all now say they have met with Mr. Hagel this week, and he assuaged
their worries about his nomination. Ditto for Senators Kirsten Gillibrand
and Charles Schumer of New York.

Senator Hagel also directly addressed criticism of his hard-line anti-
gay and anti-abortion political past. And he addressed that criticism in
which that it`s largely neutralized those objections to him from the left.

And so, yes, ahead of his confirmation hearings on Thursday,
Republicans are still making noises about Chuck Hagel. But honestly, while
John McCain still rooms the earth, those kind of noises are probably
inevitable and therefore not that important.

The only strange remaining might be evidence of any interesting and
therefore important resistance to Chuck Hagel is probably this ad, you
might have seen from an unknown group called "Use Your Mandate".

(BEGIN VIDEO CLIP, "USE YOUR MANDATE" AD)

AD NARRATOR: Chuck Hagel, he`s been nominated to be secretary of
defense. And President Obama nominated him with the best of intentions.
But it is still a bad choice. Hagel is anti-woman, anti-choice, anti-
Israel, anti-gay, and pro-assault weapons. That`s just not what we voted
for in November.

Chuck Hagel doesn`t share our values. There are other people who can
do the job, why do we need someone like this?

(END VIDEO CLIP)

MADDOW: So that ad ran on the three-network Sunday shows last week,
not to mention this network, MSNBC, apparently multiple times. We don`t
see the ads here when we`re on TV, but that`s what they tell me. So, NBC,
ABC, CBS, MSNBC -- basically, everywhere but FOX News.

It`s not a huge ad buy, but they are counting on lots of free media
coverage of this to further their message. Free conservative media
coverage, in particular, free enthusiastic conservative media coverage.

So, in "The National Review", look, "Liberal Group`s Anti-Hagel Ad
Hits TV Screens."

At Breitbart, "Liberal Group Releases `No on Hagel` Ad."

"The Washington Free Beacon," yes, I`ve never heard of it either, but
apparently it`s a right wing thing -- "Democratic Group Airs Ad Blasting
Hagel."

Supposedly these ads are being run by liberals and Democrats, against
Chuck Hagel. But these supposed liberals and Democrats opposed to Chuck
Hagel are anonymous. They are telling the press that they are, quote,
"allies with the Obama administration," who are staying anonymous because
they "fear retribution or fear from the White House."

Your Scooby sense tingling yet?

This whole thing just seems off, right? I mean there are obviously
two intentions with setting it up like this. They`re trying to convey the
impression that this is a White House who attacks and ruins anyone on its
own side who dares to disagree with them on anything. Yes, right. That`s
the way the right likes to think about this White House.

That is not the way they actually operate. They may be more effective
if they did, but that`s not what they do.

More broadly, they`re asserting there is broad Democratic opposition
to Chuck Hagel, we`re just not allowed to know who it is. I`m not buying
it. I call bullpuckey. I say it`s even money that this is the right
running ads against Hagel while pretending to be left. I might be wrong,
but I call bullpuckey.

And if I am wrong, there`s an easy way to prove it. Come out. Come
out, whoever you are. If you`re not Bill Kristol or Liz Cheney or the Log
Cabin Republicans or someone like that, I will be the first to admit that
I`m wrong.

But I do not think I`m wrong. This is not a liberal group. It`s a
right-wing group. You`re trying to look like liberals and we can tell.

That does it for us tonight. We`ll see you again Monday night.

Now, it`s time for "THE LAST WORD."

Have a great weekend.

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

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