'The Rachel Maddow Show' for Wednesday, February 5th, 2014

THE RACHEL MADDOW SHOW
February 5, 2014

Guest: John Reitmeyer, Rebecca Smith

RACHEL MADDOW, MSNBC HOST: MSNBC`s Steve Kornacki has been reporting this
week on how the Christie administration in New Jersey has been basically
falling behind, has not been following the state`s own laws about hurricane
Sandy relief funds, specifically when it comes to transparency, the means
by which the public is supposed to be able to track what funds are coming
into the states and how they are being spent and whether there are
protections that the Sandy relief funds are not abused or stolen or
misappropriated.

Steve`s reporting on that issue this week led to this rather blistering
editorial today from New Jersey`s largest paper. Quote "Governor Chris
Christie reminded hurricane Sandy victims again this week, that with nearly
$40 billion in damage from the storm, there have been more needs than
resources to go around. This has led to some frustration, he
acknowledged." The governor said, quote "we don`t live in a fair world."

The "Star Ledger" then goes on to say, this is true, and up that sad fact
of life is also observable in Governor Christie`s personal steering of $6
million in federal Sandy relief funds to Belleville, a town with hardly any
storm damage. But with a Democratic mayor willing to endorse his own
reelection.

In a fair world that money would have gone to actual victims of hurricane
Sandy. There`s no question that the administration can`t meet every Sandy
need because it doesn`t have enough federal aid to do so. But isn`t that
all the more reason not to use what money we do have as a political slash
fund? Instead of simply telling hurricane Sandy victims that the world is
not fair, why won`t Governor Christie do the very minimum required to help
ensure that it is?

When that is how the state`s largest newspaper is treating your handling of
what is supposed to be your signature accomplishment as governor and the
reason you should be president, that is not a good thing.

The Sandy funding issue at least appears to be the focus of the federal
prosecutor`s investigation in New Jersey which we know has led to subpoenas
so far about the city of Hoboken and Governor Christie`s office and
Governor Christie`s reelection campaign and the Republican Party of the
state of New Jersey.

The spreading criticism now of the transparency issue, the transparency
with which Sandy relief funds are being allocated is part of that scrutiny.
In part because of New Jersey`s essentially rapacious history, rapacious
experience with public corruption, that issue of transparency of letting
the public know how government money is being spent, that`s a really potent
issue, because corruption and no show jobs and patronage hiring, those kind
of things have been such an issue in the state of New Jersey.

And one happy by product of that legit public concern about corruption in
New Jersey is that if you want to know about who`s been appointed to work
at say a sprawling cushy multi-billion dollar agency like the port
authority, right now can you just look it up and get the information
directly without having to request it from anyone.

The port authority of New York and New jersey, every year since 2008 has
posted its employee payroll information on their publicly available web
site. So just pick the year you want, download the whole payroll and there
it is, job by job, name by name, salary by salary. You can sort by the
person, you can sort by their department, you can sort by what they get
paid.

This is the employee pay role document of 2013. It shows, as you can see
here, Bill Baroni, the deputy executive director who has since resigned his
job in the bridge scandal. It also shows Phillip Quan, Chris Christie`s
unsuccessful nominee for Supreme Court in New Jersey who he then installed
at the port authority as the first deputy general counsel once he didn`t
get the court job. And of course, then there`s David Wildstein, the
director of interstate capital projects, getting paid as you can see there
an annual salary of $150,000 plus change. That`s him on the payroll in
2013. This is the same payroll document from the year before that, from
2012. There he is again making the same, $150,000. The director of
interstate capital projects. Also in 2011, same deal. David Wildstein,
$150,000. Same deal back in 2010, there he is.

Here`s the thing, though. If you go back one year further than that, if
you go back to 2009, David Wildstein is not there. He`s not listed.
That`s because David Wildstein couldn`t get that job at the port authority
until Chris Christie was sworn in as governor in 2010. So, David
Wildstein, in the 2009 records, not on the payroll.

And here`s the really interesting part, before David Wildstein joined the
payroll at the port authority in 2010, not only was he not there, his job
was not there either. There was no job called director of interstate
capital projects. If that job had existed before he was there, where that
red arrow is, is where that job title would have been listed in the payroll
records which are all public for this agency in New Jersey. If that job
existed in 2009 it would be there, but it did not exist before him. And
that`s because in order to hire David Wildstein at the port authority, once
Chris Christie became governor, they had to invent that job for him there.

So, they created this job. They invented this job title, the director of
interstate capital projects. They assigned the job a $150,000 salary, and
then they just put David Wildstein in it. This is a job that was custom
built for him.

The "Star Ledger" reported in December that that job created for David
Wildstein has no job description. Had no job description on file. Look,
quote, "in his campaign to transform itself into a model of government
transparency, the port authority turned over a stack of resumes and job
descriptions for employees hired in a salary of $100,000 or more during
Governor Chris Christie`s first two years in office.

For most of the 50 names, 50 employees getting paid six figures, most of
the 50 names on that list quote "the agency provided both a resume and the
positions corresponding job description and requirements." But not in
David Wildstein`s case, David Wildstein`s case, no job description, no
resume with the paper notes which the paper notes makes it impossible to
gauge whether his experienced or qualifications actually met the
requirements of the job, this job that was invented just for him.

A spokesman for Governor Christie defended hiring David Wildstein as well
as his lack of an official job description, asserting in a statement that
quote "he`s in that job because he`s well suited to the task of playing a
role in reforming the port authority in accordance with the governor`s
goals."

So whatever that job was, whatever he was doing there for four years in
accordance with the governor`s goals, David Wildstein is gone from that
agency now. He resigned in December and he`s now pleading the fifth to
avoid testifying about his role in shutting down access lanes to the
busiest bridge in the world as part of some yet unexplained scheme to
inflict punishment on the town of Fort Lee New Jersey.

And now today, exactly 60 days after he became the first Chris Christie
ally or staffer to resign in this bridge scandal, today, we learn that the
port authority is eliminating the job that they created for him. They are
eliminating the job that he once held. According from the "Star Ledger"
today, in all the vast history of the sprawling bureaucracy known as the
port authority of New York and New Jersey, there`s never been a job like
it, it came with no actual job description. It had only one occupant. And
he didn`t have to submit a resume, nobody seemed to have the vaguest idea
what he was really doing, but he was paid $150,000. The job of director of
interstate capital projects, a special niche created for David Wildstein
has been officially been abolished, the port authority confirms.

A spokesman for the port authority would not say why the agency has
eliminated the interstate capital project`s directorship. This means that
David Wildstein will forever be known as the first and last appointee to
that made up job.

Why was that job created in the first place? David Wildstein was installed
in that job at that agency by the Christie administration for something.
What was he put there for? Quote "no one seemed to know what business he
was supposed to be doing. E-mails and other revelations seemed to indicate
his job title may have just been a cover for serving the political interest
of Governor Christie. One formal official who requested immunity told the
Star Ledger, on many occasions, I heard he and Bill Baroni say they had
only one constituent, Chris Christie.

So, whatever the ostensible reason that taxpayers paid David Wildstein a
half million dollars over four years that he was there. We now know that
what he did at that job, no job description, nobody could tell what he was
doing, the one thing we know he did was shut down access lanes on what
appear to be orders from a staffer in order to create some traffic problems
in Fort Lee.

Well, now he`s gone and the job is being eliminated in his wake. Because
apparently they didn`t need that job as long as he was going to do it. And
the port authority is not explaining why that job was created for him.

In a related matter, Governor Christie himself in a little noticed comment
appears to have unveiled a new explanation this week about his own role in
this scandal. The governor, of course, continues to say that he had no
advanced knowledge of what was going to happen on that bridge. He also
says that despite these allegations from David Wildstein to the contrary,
the governor says he also had no knowledge of what was going on that bridge
while it was underway, while it was happening. The governor says he only
found out what was going on with the shutdown in those lanes after it was
over.

But this week, this week we believe for the first time Governor Christie
has announced a new explanation for how he responded to this event. He
says now that as soon as he heard about the lane closures on the bridge
after it was over, he says he read about it in "the Wall Street Journal,"
in an article published October 1st.

He now says that as soon as he read that article on October 1st, the
governor says he dispatched his two most senior staffers to go to the port
authority and figure out what was going on. Governor Christie has not
previously said he did this, but now he says that`s what happened and
that`s what he did. This is new, watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I do just have one question about the bridge.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Yes.

UNIDENTIFIED FEMALE: Why when it was closed down, and traffic was backed
up in New Jersey, our state, why didn`t you call at is that time to find
out what the issue was?

CHRISTIE: Well, first of all, Carol Ann, I didn`t know about traffic, as I
told you. And as soon as I was aware of the fact that there was a problem,
which is when Pat Foye`s e-mail came out, I had my staff say -- go find out
what`s going on at the port authority, why are they fighting with each
other over this, and what happened?

So, I did call Carol Ann and I asked my staff to find out what was going
on. So, to answer Carol Ann`s question again directly is, as soon as I
knew there was some issue here, I asked my staff to get to the port
authority and find out what was going on.

Now, when did I first know about the lane closures? The fact is, the first
time this really came into my consciousness as an issue was when Pat Foye,
the executive director of the port authority`s e-mail was leaked to the
media and reported on. And that was the first time that I got a sense that
there might be some issue here.

UNIDENTIFIED MALE REPORTER: And who brought that to your attention? Was
that your staff/

CHRISTIE: no. It was news accounts.

UNIDENTIFIED MALE REPORTER: You read them personally or did somebody bring
it to your attention?

CHRISTIE: No, I read it. I read it in "the Wall Street Journal."

And it was that day then when I read that that Pat Foye was saying, this
wasn`t -- I didn`t know about this. This wasn`t cleared through me, you
know, whatever else he said in that e-mail. That`s when I asked my chief
of staff and chief counsel, would you look into this and see what`s going
on here?

(END VIDEO CLIP)

MADDOW: We are currently going through all known previous statements from
Governor Christie on this matter to see if he ever before mentioned that in
October, he sent his chief of staff and his chief counsel to go to the port
authority to investigate the lane closures on the George Washington bridge.
So far we have found no previous instance in which Governor Christie ever
mentioned this before he said so this week.

I mean, the governor was pressed on this issue on December 2nd, that`s when
he lashed out and said, yes, it was me moving the traffic cones. He was
asked about it repeatedly at his press conferences on December 13th. He
was pressed repeatedly on when he first found out about this, and how he
reacted. He never mentioned that as soon as he found out about the lane
closures, he dispatched his general counsel and his chief of staff to go to
the port authority and investigate. At least as far as we can find, but
now looking back on it now he says that`s what he did. It`s odd, right? A
whole new story.

Later on in the process, said his apology to our press conference on
January 9th, the governor said he assigned the same two top staffers to
talk to his own staff in the governor`s office, to ask if his own staff had
any knowledge of what happened on the bridge. The Governor says there was
top two staffers told him no, they checked with everybody else in the
office, nobody knew anything.

We now know that that story was not true. Several of the staff in the
governor`s office definitely knew about this thing at the time the closures
were underway, and one of his top staffers appears to have ordered it to
happen. But the governor`s chief counsel and his chief of staff, he says
they went and interviewed everybody. The talked to everybody on staff to
find out if they knew anything. And when they did those interviews, when
they did that investigation in the governor`s own office, they were not
able to fair it out that people were lying. They were not able to fair it
out that people did know. They reported back. The governor says they
reported back to him all was well, nobody knew nothing.

The governor also now this week says for the first time that those same two
men, his chief of staff and his chief counsel also were sent by him to the
port authority right after the shutdown came to light and there too, they
were hoodwinked. They were sent by Governor Christie to the port authority
to investigate what happened on the bridge. And again, they came back with
some untrue smoke screen cover story that isn`t what actually happened.
They came back and told him it wasn`t a traffic study. It was a traffic
study.

It is kind of lame, right? I mean, best case scenario, the governor`s
chief counsel and his chief of staff, best case scenario, they were duped
twice. They were duped by the port authority in October and then they were
duped again by the governor`s senior staff in his own office in December.

These guys were just rubes right? They were sold the billing goods and the
bought it happily and brought that back to the governor and told him
something that wasn`t true because they couldn`t tell what actually
happened. He assigned them to investigate. They couldn`t figure it out
and they brought him back false information. That`s the best case
scenario. Worst case scenario, they weren`t duped. They knew the truth
and helped cover it up, or even worse than that, they were in on the scheme
from the beginning.

Those are basically the options, in terms of the governor`s top two
staffers who he says he dispatched to investigate his own office and the
port authority, not good options, right? Who are those guys? Who are
those top two guys? One of them is his current nominee to be the next
state attorney general of the state of New Jersey, Kevin O`Dowd, And one
of them has already been put in charge of the governor`s top priority for
second term as governor, New Jersey schools.

Kevin O`Dowd was his chief of staff. He is now nominated to be the edgy,
to be the top law enforcement official in the state. And Charlie McKenna
was the governor`s chief counsel. He is now the chief of New Jersey`s
school development authority.

Why is there now, this week, a whole new explanation from Governor Christie
for how he responded to the bridge shutdown? And if these top two staffers
of his were at best twice duped about what really happened in that
shutdown, why has the governor entrusted them with such critical and
important new jobs. Hold that thought.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHRISTIE: Now, when did I first know about the lane closures? You know,
the fact is that the first time this really came into my consciousness as
an issue was when Pat Foye, the executive director of the port authority`s
e-mail about this incident was linked to the media and reported on. And
that was the first time that I got a sense that there might be some issue
here, that`s when I asked my chief of staff and chief counsel, I said,
would you look into this and see what`s going on here?

(END VIDEO CLIP)

MADDOW: Joining us now is John Reitmeyer. He is state house reporter for
New Jersey`s Bergen Record newspaper. John has been doing a lot of great
reporting on this from the beginning. Thanks for being here.

JOHN REITMEYER, STATE HOUSE REPORTER, BERGEN COUNTY RECORD: Thank you.
Happy to be here.

MADDOW: Governor Christie said this week that as soon as he learned of the
shutdown of those lanes on the bridge, from an article that he said he read
in "the Wall Street Journal," so back at the beginning of October, he says
he dispatched his chief of staff and his chief counsel to go to the port
authority to find out what happened. Is this an explanation of the
governor`s own reaction to what happened on that bridge that you have heard
before he articulated this week?

REITMEYER: I can`t say specifically that I remember him saying it in that
language, and there`s been a lot of different versions or languages
involved as this whole story has evolved. I remember him saying he wanted
to get to the bottom of it when he learned about that aspect, whether he
said before, he actually dispatched his, you know, two top lieutenants to
go to the port authority and try to get the bottom of it, I don`t remember
that. I`ve been at all the press conferences, you know, including the two
hour ones. So, there`s some memory going on there, but no, I don`t recall
that specifically.

MADDOW: Do you feel like from the way the governor has talks about his own
reaction to this story. Do you feel like you have a handle, a clear
handle, that he`s given indication of a clear time line of events in terms
of what he knew and when he knew it and what he did in response?

REITMEYER: Yes. And I think if you get out the scorecard, can you go
through going back to this December 13th press conference, he was
specifically asked did you know about the lane closures during the time on
the lanes were closed? And he said he did not. It wasn`t until well after
that he learned. And he pointed to that October 1st "Wall Street Journal"
story as the likely indicator that this has occurred.

Then you go a little bit later in December, on this radio show, and he said
he learned in September from press accounts, then we fast forward to the
January 9th, the marathon press conference. And he gets -- it was press
accounts, may have been October, may have been September, may have been
"The Wall Street Journal," may have been (INAUDIBLE), maybe in his column,
but it`s definitely press have counts, definitely after.

Then we get to Friday, and we get this, the bomb shell letter that says
evidence exists from the letters from David Wildstein`s attorney, that
Christie knew during the lane closures. So here, all of the sudden, there
seems a contradiction.

Fast forward to Monday, radio show and Christie was able to explain why
it`s both. And that is, he said that traffic reports, that`s fairly
regular, he certainly must have heard about traffic in front of the George
Washington bridge that week, because that`s something that happens in New
Jersey all the time.

MADDOW: Right. You hear about traffic, sure.

REITMEYER: The new element was that it was not meaningful or memorable for
him until October when he learned about this for the first time, the leaked
e-mail from Pat Foye, the executive director of the port authority, this
potential political retribution plot against the Fort Lee mayor came up for
the first time, and that`s when we saw the reference from the governor.
That`s when we said it started to become meaningful for him. So, that`s
how he -- his comments on this statement have sort of evolved, but that`s
how he says it can be both.

MADDOW: Right, and then his own actions in response to it, he was
previously very emphatic about talking about how he had his chief counsel
and chief of staff to interview his own staff to make sure he didn`t know
anything about it, now it seems, and we may find in the record he`s made
reference to this in some other place, we have not been able to find it
yet. Now, it seems he`s also saying that back in October, he dispatched
those same two staffers to go to the port authority and investigate?

REITMEYER: And remember, also in early December when he was pressed on
this, he said he made a joke, he said, you know, I was out there personally
--

MADDOW: Moving the cones.

REITMEYER: Yes, I mean, absolutely. And then as the follow-up to that, he
said he had directed Charlie McKenna and Kevin O`Dowd to do this internal.
You know, you have an hour to tell me what you know. I`m going to go out
in a press conference. You have you to come clean and no one did. And
these are two high level staffers, one who`s about to potential become our
attorney general.

MADDOW: It is a -- the story is a remarkable story in its own terms, now
trying to understand what the governor says he did in regard to the scandal
is becoming almost harder to track than anything else.

John Reitmeyer, state house reporter for the Bergen County Record thank you
for helping us figure this out. It`s important to have you here. Thank
you.

REITMEYER: You`re welcome.

MADDOW: All right, more ahead, stay with us.

(COMMERCIAL BREAK)

MADDOW: Tomorrow will be one month since complaints first started coming
in of a strange lick rash odor near the Elk river in Charleston West
Virginia. The sweet syrupy smell wafting through the neighborhoods along
the river was the scent of a virtually unregulated chemical, leaking from a
virtually unregulated above ground storage tank. The chemical was leaking
into the water that provides drinking water to one in six West Virginians.

The chemical is used in the processing of coal. And when it leaked into
the river, it rendered the water not drinkable and toxic for roughly
300,000 people in nine counties. Do not use order was issued. West
Virginia was in the state of emergency for days until the water company and
the state started lifting the do not use order in phases.

And if that is where you left the story, if you figured, water`s back on,
that must be the end of it, what you missed in the story, was the situation
going from really bad to even worse to oh, my God how is this happening?

Two days after telling people that their water was OK to drink if their
pipes were flushed, that directive changed. Pregnant women in West
Virginia were cautioned not to drink the water after all, even after the
all clear order had been given, even traces of the chemical could be
dangerous for them. So OK, pregnant ladies, un-drink the water you drank
over the last two days.

ON the day the waster company announced that all of the water had finally
been properly flushed, they then discovered that one county`s water
actually had not been. And so, they then reissued a new water ban in that
county. Following that reversal, the governor of West Virginia declared,
you know what, it`s your call whether you want to drink the water. The
governor announced that it is your own personal decision as to whether or
not you think the water is safe to drink. You make the call.

And then weeks into the disaster, the company responsible for the leak
informed state officials that it was not just one chemical that leaked into
the river, it was actually two.

This has been worse than an accident in West Virginia. This has been a
disaster. And now today, new reporting that this continues to be a
disaster of the ongoing variety.

Today a month after the spill, we learned that two schools in Charleston,
West Virginia, are reporting the return of the syrupy smell in their water.
It was first detected last night, they started re-flushing the water
overnight into the morning at those schools. But when students arrived for
school today, Charleston kids started getting sick, started reporting
symptoms associated with exposure to the chemicals -- lightheadedness,
burning eyes and nose.

One student and one teacher were hospitalized. Classes were canceled today
and those schools will be closed tomorrow as well. Some local doctors in
the Charleston area are also now advising that children under 3 years old
should not drink the water at all. Other physicians are advising specific
patients like people on dialysis or people with other liver or kidney
issues to avoid the water completely.

In a Senate hearing yesterday, on water safety, West Virginia`s secretary
of state explained the kind of practical effect this is having on West
Virginia families. Still.

(BEGIN VIDEO CLIP)

NATALIE TENNANT, WEST VIRGINIA SECRETARY OF STATE: I have families telling
me that they are melting snow just to be able to give their children baths.

(END VIDEO CLIP)

MADDOW: To try to get a handle on this ongoing terrible situation in West
Virginia, a bunch of federal agencies including the EPA and the CDC
returned to Charleston today to meet with state officials. After their
meeting, the governor and the various agency heads had -- held a big press
conference where they claimed that everything is under control, we did
everything, the water is safe to drink, but that message ran headlong into
some very dogged local reporters.

Watch this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: Governor, unless I heard wrong, I`m not convinced
that the water is 100 percent safe. Is the water 100 percent safe to drink
and bathe in? And are you currently and your administration drinking the
water, sir?

GOV. EARL RAY TOMBLIN (D), WEST VIRGINIA: We are, or at least I could
speak for myself and my staff. We are using the water, Bob. I don`t have
any problem. I`ll tell you, it`s 100 percent.

UNIDENTIFIED REPORTER: This morning, after a hearing, doctor (INAUDIBLE)
state health officials said if you smell water coming out of your shower
that might smell funny, it might be a good idea to run it a little longer
before you get in. And that`s something that we had never heard before, at
the same meeting, the local health official said, I`m not sure the water is
safe.

Why are getting different things from different officials?

(CROSSTALK)

UNIDENTIFIED REPORTER: Is it supposed to smell like black licorice?

UNIDENTIFIED MALE: No. No.

UNIDENTIFIED REPORTER: The big issue in the community there`s no faith --
there`s no faith in the water. There`s no faith in the system. Clearly
one of the issues is people would like their homes tested. They`re worried
about the pipes. If the state has to leave, you in particular as one of
the boss here, can you tell the agencies to go out and make sure this
happens, they test the homes so that people can get their faith back?

TOMBLIN: I`m not sure that I could tell you that we`re going to go out and
test 100,000 homes.

UNIDENTIFIED REPORTER: Not 100,000.

TOMBLIN: I don`t have a problem. Been looking at testing samples.

(END VIDEO CLIP)

MADDOW: We`re not going to test all of those homes? That was what the
governor said during that press conference. Then a few hours later he
directed his team to actually look into the possibility of testing people`s
homes.

This is a month after the leak. Weeks after residents were first told that
the water was good to go. And Charleston, West Virginia, kids were sent
home again today. No school because there is no water. It is not safe.
It`s amazing.

This thing is a long way from over. We will continue to bring you more on
this story as it surely continues to develop.

(COMMERCIAL BREAK)

MADDOW: In an effort to combat the recent wintry weather across this
country, one Indiana man has come up with a brilliant solution.
Stopthesnow.org. Sign a petition to stop the snow. Hoosiers are fed up.
Over 1700 people have already signed up to stop the snow via petition.

And it`s all very funny, of course, to sign a petition against weather.
Unless the snow isn`t just weather. Unless the snow was sent by the
federal government to mess with your head. Illuminati. In which case,
you`re going to need to do a lot more than sign a petition, schiple (ph).

More on what that actually entails coming up.

(COMMERCIAL BREAK)

MADDOW: This next thing is kind of hard to see. It`s a little difficult
to make out what it is on screen. But you could still tell, it`s
surveillance video here from California, just south of San Jose. The
bright flashes that you see in the video, those are gunfire in the middle
of the night. And what the shooters are aiming at is a substation, part of
the electrical grid that powers Silicon Valley. They`re shooting on
purpose at that power station.

This is from about 1:00 in the morning on April 16th last year. And here`s
the first report from the Santa Clara County Sheriff`s Office. 3:25 a.m.,
that same morning, quote, "Type of crime, vandalism." The sheriff and the
police department, quote, "received multiple phone calls of gunshots in the
area." By the time the officers got there the suspects have fled, quote,
"no suspect information available at this time."

This incident, this alleged vandalism took place at the Metcalf Substation.
Again near San Jose, California, a little ways out of town but hugely
important to the Silicon Valley, with all the tech companies there and also
just to the people who live there.

The idea that somebody would pull up to the substation in the middle of the
night and start blasting away is weird. It`s kind of hard to believe. But
it`s also scary because it turns out that whoever did this appears to have
had a plan beyond just putting a few bullets into a power plant.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: Millions of people in Santa Clara County are being
asked to conserve electricity. That`s because someone sabotaged
underground cables and fired a gun at a PG&E substation.

Joe Vasquez is there.

Now, Joe, this just sounds crazy.

JOE VASQUEZ, REPORTER: Yes, this is very unusual, and very serious. The
sheriff says saboteurs struck above and below ground. First around 1:30
this morning, it lifted up heavy manhole covers and cut the underground
AT&T fiber optic cables. About 15 minutes later up the road gunshots rang
out. The sheriff says somebody fired a high powered rifle into PG&E`s
Metcalf substation, damaging several transformers and related equipment and
causing an oil leak.

UNIDENTIFIED FEMALE: We believe that the perpetrator or perpetrators were
familiar with systems. They knew where to go for the fiber optic, they
knew where to cut, they also were able to take out some very, very critical
parts of the PG&E substation.

UNIDENTIFIED REPORTER: Is this a sabotage?

UNIDENTIFIED FEMALE: I think it`s really too early to tell. We believe it
was an intentional act.

(END VIDEO CLIP)

MADDOW: We believe it was an intentional act. So, yes, someone first got
underground and underground they cut the cables that hook up 911 service,
landline phone service at the substation, some cell phone service and some
Internet access. But a few minutes later they started shooting up the
power plant. That caused the transformers at the plant to crash in a way
that threatens the electrical supply for the whole region.

And then whoever did those things just disappeared into the night. It took
27 days to get the repairs done, to get that substation back online. The
story remained a mystery, basically a complete mystery for months. It
happened in April -- it should be noted it happened one day after the
Boston marathon bombing.

It happened in April, there were no suspects. In June the sheriff`s office
released that surveillance video we showed you hoping to shake something
lose about the case. AT&T even then put up a quarter million dollar reward
to try to find the people responsible, but nothing happened. They had
these few grainy images of bullets hitting the fence and nothing more.

Unsettling as it was, that mystery remained a mystery. Sort of faded from
the headlines. But behind the scenes if you knew where to look, you could
find plenty of anxiety over this kind of thing.

The commissioner at the time of the Federal Energy Regulatory Commission
was this man, John Wellinghoff, and even before whoever it was shot up that
California power plant, John Wellinghoff had been warning that a
coordinated attack could cause a nationwide blackout. The year before the
attack he had warned, quote, "There are ways that a very few number of
actors with very rudimentary equipment could take down large portions of
our grid."

Commissioner Wellinghoff is essentially trying to say, wake up and fix
this, without giving other people instructions for exactly how to do this
kind of thing. Without giving too much away to potential attackers. He
delivered that kind of vague warning in 2012 which came before the
California shooting.

Then last year, after the California shooting in December, California
Congressman Henry Waxman mentioned that San Jose area attack at a
congressional hearing. Mr. Waxman said he did not want to reveal
particular details about that particular case, but he urged the committee
to schedule a closed door briefing with the FBI on issues like this, that
was early December.

We asked Congressman Waxman today whether the House Energy Committee has
yet to schedule that FBI briefing. Mr. Waxman`s office told us that the
committee agreed to hold the briefing with the FBI, but no, it has not yet
been put on the calendar.

Just after Christmas, though, someone described as a senior U.S.
intelligence official provided some new details on that attack to foreign
policy magazine. In that same report in foreign policy, a former official
with the power company in San Jose said, quote, "These were not amateurs
taking potshots." Quote, "My personal view is that this was a dress
rehearsal for future attacks."

In those three accounts, in the former power official`s statement that this
was a dress rehearsal, and the congressman`s call for an FBI briefing, and
the commissioner`s sort of quasi prophetic call for better defense at power
plants, in those accounts you can hear people who are in a position to know
trying to sound an alarm here. And I think you can also hear the seeds of
some very real frustration that more has not been done about this real
threat to our national infrastructure.

Because today, John Wellinghoff, now a private citizen, has helped the
"Wall Street Journal" piece together a very detailed timeline of the attack
in California and the paper published it in this morning`s paper. We know
from "The Journal" that the attack began with the cutting of those fiber
optic cables for 911 and Internet service. That was shortly before 1:00
a.m. Then they started shooting, started shooting sniper style at the
substation.

They shot for 19 minutes, leaving behind dozens of the kind of casings that
are ejected by an AK-47. The shooters seemed to have been aiming at the
station`s cooling units.

Into a frightening extent their strategy worked. Reporter Rebecca Smith
from "The Journal" says they surgically knocked out 17 giant transformers
that funnel power to Silicon Valley. And then they got away, the suspects
are gone. But the threat remains very present. And former commissioner
John Wellinghoff telling Rebecca Smith today that he is still haunted by
what happened that night in California. And so he`s now made a hobby of
checking on power substations and seeing whether anyone stops him to ask
why he is there.

He does not sound at all comforted by his observations. He says, quote,
"What keeps me awake at night is a physical attack that could take down the
grid. This is a huge problem," he says.

Joining us now is Rebecca Smith, she`s an energy reporter for the "Wall
Street Journal."

Miss Smith, thank you for being with us. Congratulations on this very
scary story.

REBECCA SMITH, WALL STREET JOURNAL: Thank you so much.

MADDOW: Has anything like this ever happened before in this country?
Either an attack of this type or that has had this type of effect.

SMITH: I haven`t spoken with anyone who recalls any incident, anything
like this, the comprehensiveness of the attack was unusual, the fact that
they got away was unusual. The fact that months later we still don`t know
their identities of course is extraordinarily unusual.

MADDOW: Who is responsible for ensuring the security and the resilience of
the grid as critical American infrastructure?

SMITH: One of the problems, Rachel, is there is no single federal agency
with clear jurisdiction, and this is why Mr. Wellinghoff was going around
Capitol Hill last year trying to get traction on this issue, trying to get
the Department of Homeland Security, Department of Defense, Department of
Energy, anybody to intervene and to try to get some action.

He was unsuccessful. And his agency did not have the power to order the
kinds of improvements that very likely are needed.

MADDOW: The improvements would be done by the industry, presumably because
they felt it was in their own interest to do so, or because they were
required to do so as a regulatory matter, if there isn`t an agency that
would be in charge of actually making these improvements.

Is there an agency or could there be some sort of instruction from the
federal government that the industry has to meet certain standards that are
tougher than what they have to meet now?

SMITH: One of the proposals is that there might be action by Congress to,
let`s say, anoint FERC, that`s the agency Mr. Wellinghoff worked for, to
anoint it as an agency capable of putting in place temporary rules. They
would set out at some point in the future. During that period permanent
rules would be worked on, and this obviously requires collaboration with
industry. Because you want to wind up with something that is effective.

MADDOW: I was struck by that giant reward that was announced by AT&T in
this case. Obviously AT&T was not the only agency or company that was
affected here by this multi-variety attack. But when they got their cables
cut, they seemed quite upset about it. $250,000 reward hasn`t been enough
to shake out any suspects but it shows that they took this very seriously.

I wonder if that reflects the fact that industry has really freaked out
about this, even if they haven`t want to talk about it too much in order
presumably to avoid inspiring copycats.

SMITH: Yes, it`s interesting that AT&T took this action. They`ve had
cables cut before. They really don`t like it. But you didn`t hear a peep
out of the utility whose substation was attacked. And that`s because they
and others are very afraid of copycat attacks. And they`re, of course,
always afraid that if they discuss an incident, it will telegraph to
malefactors ways that they can attack the grid.

MADDOW: I don`t mean to put you in a spot here, but was that a
consideration for you and "The Journal" in publishing this? I mean, you
did publish a very detailed attack of how this happened. Did you worry
about concerns in publishing this piece that you might be inspiring people
to try this sort of thing around the country?

SMITH: Well, of course there`s always a worry. And we certainly want --
don`t want to provide information that would give someone who hadn`t
thought about it the means to launch an attack. On the other hand, this
attack did happen.

MADDOW: Right.

SMITH: And it needs to serve as a wake-up call.

MADDOW: Rebecca Smith, energy reporter for the "Wall Street Journal."
It`s a fascinating story. I knew because I`m from the bay area. I had
read local reports about this happening. I had not at all pieced it
together the way that you did for this remarkable piece today in "The
Journal." Congratulations on this and good luck with the story.

SMITH: Thank you.

MADDOW: Thank you.

All right, did somebody tell you that it snowed outside this week? Did you
believe them? Don`t tell me you fell for that. Stay with us.

(COMMERCIAL BREAK)

MADDOW: It is February in the northern hemisphere, which means it is
winter which means there`s snow and ice. I`m very sorry. This cell phone
snapshot is what it looks like this morning at the dog run where my dog
gets his yayas out.

All that talk about the town of Hoboken and the Chris Christie scandal in
New Jersey, that`s Hoboken over there. My dog`s view through the snow
today at his happy fun time place.

But wintertime snow and ice on the eastern seaboard is just the weather.
It`s not really news. Where the weather this winter really has become
legitimate news is in the south. The snow and ice storms that absolutely
flummoxed places like Atlanta and Birmingham and Hattiesburg and Virginia
Beach.

Those storms led to 20-hour traffic jams and those amazing images of people
abandoning their cars on the interstate and just hiking to the nearest
place they could take shelter, even if it meant just meant sleeping on the
floor of the nearest grocery store. Kids kept overnight at schools cared
for by their teachers because neither their school buses nor their parents
could get to them to get them home.

It`s been truly amazing scenes. Too amazing. Because this is the way our
country is now. One of the reactions to the snow falling in the south this
past week has been that it can`t really have been snow. It must be a
government conspiracy to make you think it`s snow.

Quote, "There is no doubt in many minds that there is some sort of geo
engineering going on across the nation. What we do not know is the
specifics behind it and what the purpose is. We do know, though, that the
strongest military weapon a military could possess is one that can
manipulate the weather at will."

See, it`s not snow, it`s a military attack on the south that looks like
snow. That chemical attack of some kind. Or maybe zillions of tiny
nanobots that looked like snow but right now they`re crawling into your
back teeth to bug you later.

The Web site Newsies noticed the trend of people in the south worrying over
this mysterious unknowable white substance falling from the sky, or
apparently falling from the sky. But really Newsies` best contribution to
understanding this conspiracy theory right now is the videos they -- they
compiled of people home-brewing their own experiments to prove that what
fell in the south this past week isn`t really snow.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The last few days have seen scores of videos like this
from skeptics who claim the snowflakes aren`t the real deal.

UNIDENTIFIED FEMALE: I have a sample of, quote, unquote, snow. Leaving
the snow unmelted.

UNIDENTIFIED MALE: The conspiracy reasoning goes like this. The snow is
unusual in Georgia and other southeast areas, and doesn`t melt when burned.
Therefore it must be fake snow distributed by government as a diversion
from big government tyranny.

UNIDENTIFIED MALE: We`re being distracted by all fronts. You`re
preoccupied and they`re up there signing bills, the government, to pretty
much take away more of your rights and freedoms.

(END VIDEO CLIP)

MADDOW: Makes sense, right? See, the government planted fake chemical
snow all over the south to distract the schiple from the fact that they`re
passing bills and everything.

God bless America.

You want to know why the snow behaves like that when you try to burn it on
YouTube in Georgia? We sent our own in-house fake doctor Nicholas Tuths to
study the behavior of some legitimate New York City snow today. The RACHEL
MADDOW SHOW Institute of Science chem lab you`ll see also doubles as our
office kitchen so forgive the atmospherics here.

But watch what happens.

(BEGIN VIDEO CLIP)

NICK TUTHS, RACHEL MADDOW SHOW: And you`re seeing the snow kind of melt
away from the flame, but the water is being reabsorbed into the snowball so
it`s not dripping off. It`s turning it into a slush ball.

(END VIDEO CLIP)

MADDOW: Even in New York City, where the snow is definitely real snow and
not a conspiracy, unless it`s been a conspiracy every year since winter
started. You still can`t easily melt the snow here with a flame. If you
don`t believe us, behold Phil Plate from slate.com`s Bad Astronomy blog.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You can see the water line. There it is. And as more
of the snow melts from the bottom up, the water gets sucked into the snow
itself. See? It`s turning into a slush ball. And that is what`s
happening in those videos. That`s where the water is going. It`s going
into the snowball itself. Not dripping away as you might expect.

(END VIDEO CLIP)

MADDOW: Slush ball. That`s why there`s no dripping and no puddle when you
try to burn a snowball. Yes, but the burn marks. What about the burn
marks? Water conspiracy. The burn marks on the snow are from your
lighter. You`re burning up butane in the lighter and it`s making soot,
soot, the powdery black substance consisting largely of carbon produced by
the incomplete burning of the hydrocarbon in your lighter fluid.

The soot is sticking to the snow. That`s the burn mark. Either that or
what looks like winter is actually a weapon. Because Kenya? New Black
Panthers? You know how many times the IRS commissioner went to the White
House? Do you? No, seriously, do you?

Happy February, America. There are a few weeks yet left of winter. Please
stay calm.

That does it for us tonight. We will see you again tomorrow. Now it`s
time for "THE LAST WORD WITH LAWRENCE O`DONNELL." Have a great night.

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

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