updated 12/10/2008 10:57:34 AM ET 2008-12-10T15:57:34

Guests: Michael Isikoff, Maria Mitchell, Ana Marie Cox

RACHEL MADDOW, HOST:  Thank you, Keith.

(LAUGHTER)

MADDOW:  And thank you for staying with us at home for the next hour. His name is long; his list of misdeeds is even longer.  Tonight, the amazing story of the once great Illinois governor, Rod Blagojevich. (voice over):  Sick and tired of hearing about the lousy economy?  Well, hear ye, hear ye.  The economy is no better but today‘s news is old-fashioned, curse word-laden, unveiled by FBI wiretapping, political corruption.  I present to you the man who still insists he intends to remain Illinois governor, Rod Blagojevich.

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH, (D) ILLINOIS:  If anybody wants to tape my conversations, go right ahead.  Feel free to do it.  I appreciate anyone who wants to tape me openly and notoriously.

(END VIDEO CLIP)

MADDOW:  They did.  And they‘re glad they did.

(BEGIN VIDEO CLIP)

PATRICK FITZGERALD, U.S. ATTORNEY:  Governor Blagojevich has taken us to a truly new low.

ROBERT GRANT, FBI AGENT:  If it isn‘t the most corrupt state in the United States it‘s certainly one hell of a competitor.

FITZGERALD:  The conduct would make Lincoln roll over in his grave.

(END VIDEO CLIP)

MADDOW:  Rod Blagojevich, a man whose name most Americans couldn‘t pronounce until this morning, is accused of trying to sell the United States Senate seat left opened by President-elect Barack Obama of Illinois.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT:  I was not aware of what was happening. 

And as I said, it‘s a sad day for Illinois.

(END VIDEO CLIP)

MADDOW:  “Newsweek‘s” Michael Isikoff on the potential fallout for the Obama team.  “Chicago Sun-Times” columnist, Mary Mitchell on what happens now. Plus, a RACHEL MADDOW SHOW enhanced history reenactment event: Rod Blagojevich‘s greatest wiretap hits.

(BEGIN AUDIO CLIP)

BLAGOJEVICH:  Unless they get something for real good for Senate candidate one, (BLEEP), I‘ll just send myself, you know what I‘m saying.

(END AUDIO CLIP)

MADDOW:  Meanwhile, on the lame duck watch, President Bush continues his—victory lap?

(BEGIN VIDEO CLIP)

PRES. GEORGE W. BUSH, UNITED STATES:  I am disappointed I could not bring the commander-in-chief‘s trophy with me.  However, you just get the commander-in-chief.

(APPLAUSE)

(END VIDEO CLIP)

MADDOW:  Wait—there‘s a trophy? To cap it off, the still president issues talking points about what a bang-up job he‘s done as president.  Ana Marie Cox examines the day in quack-itude. All that—plus, Las Vegas cranks up a dormant volcano for a motorcycle stunt.

THE RACHEL MADDOW SHOW starts now. (on camera):  It was just yesterday that we reported on Illinois Governor Rod Blagojevich threatening to end all of his state‘s business with Bank of America unless the bank extended loans to recently shut down Republic Windows & Doors Company and its laid-off workers who were sitting in at their idle factory on the North Side of Chicago.  Now, at best, that looked like leverage.  In less favorable light, it sort of looks like extortion. Well, today, it‘s one of the few things that didn‘t get Rod Blagojevich arrested this morning on federal corruption charges.  Blagojevich was arrested along with his chief of staff, by FBI agents on charges in layman‘s terms, of being a one-man kickback and bribery machine, who had put Barack Obama‘s recently vacated Senate seat up for the highest bidder. U.S. attorney, Patrick Fitzgerald, the dispassionate debutee (ph) of “Law and Order” who spun the million “I heart fits (ph)” blog post during the Scooter Libby scandal, he held the most dramatic press conference this morning, the most dramatic press conference in the country since—well, since those Scooter Libby pressers from three years ago.

(BEGIN VIDEO CLIP)

FITZGERALD:  It‘s a very sad day for Illinois government.  Governor Blagojevich has taken us to a truly new low.  Governor Blagojevich has been arrested in the middle of what we can only describe as a political corruption crime spree.

GRANT:  But I can tell you one thing, if it isn‘t the most corrupt state in the United States, it‘s certainly one hell of a competitor.

(END VIDEO CLIP)

MADDOW:  If proven, Blagojevich‘s innovative money-making schemes will surely put Illinois at the top of its weight class.  He allegedly threatened to withhold state aide to the ailing, now bankrupt, Tribune Company unless they fired editorial page writers who had written critically of the governor. He‘s alleged to, also, have tried to shake down an executive at a children‘s hospital.  The complaint reads, quote, “Intercepted phone conversations indicate that Rod Blagojevich is contemplating rescinding his commitment of state funds to benefit children‘s memorial hospital because hospital executive one has not made a recent campaign contribution.” And then, there are the series of conversations with aides about what the governor could get from Barack Obama or other politicos in return for picking one of their favorites to fill Obama‘s Senate seat.

(BEGIN VIDEO CLIP)

FITZGERALD:  But the most cynical behavior in all this, the most appalling is the fact that Governor Blagojevich tried to sell the appointment to the Senate seat vacated by President-elect Obama.  The conduct would make Lincoln roll over in his grave.  The governor‘s own words describing the Senate seat, quote, “It‘s a bleeping valuable thing, thing you just don‘t it away for nothing,” close quote.

(END VIDEO CLIP)

MADDOW:  In fact, the governor came up with a list of coveted jobs and favors which he considered an appropriate payoff for him for his decision about who would fill that Senate seat.  Among these, allegedly, an ambassadorship.  We know from the transcripts that the governor is nearly fluent in the language of any country that uses the F-word. Also, Health & Human Services secretary—yes, that makes the whole children‘s hospital funds withholding thing a little awkward.  Secretary of Energy?  One deputy told the governor it pays the most but he might be at a disadvantage for the job because he‘s not from Texas.  Yes, I‘m not kidding. How about head of a nonprofit funded by Warren Buffett or Bill Gates?  Nonprofit for Buffett and Gates—profit for Blagojevich.  He considered becoming head of a private foundation doing something, or a really high-paying job with organized labor somewhere.  Anything paying $250 large a year, frankly, would have been fine. Blagojevich also allegedly said he was interested in appointments for his wife, which at least means that he‘s a family man. For his part, Barack Obama‘s name has shown up exactly the way one would want to be mentioned, in the worst alleged corruption scandal caught on tape in recent memory.  The governor, on a wiretap, allegedly said of Obama‘s favorite to succeed him in the Senate, quote, “They‘re not willing to give me anything but a appreciation.  Bleep them.” Fitzgerald made a point of saying explicitly that Obama was unaware of the wrongdoings of the Illinois governor.

(BEGIN VIDEO CLIP)

FITZGERALD:  We make no allegations that he‘s aware of anything, and that‘s as simply as I can put it.

(END VIDEO CLIP)

MADDOW:  And guess who may have been the guy who blew the whistle on Blagojevich‘s Senate seat auction?  That would be Illinois congressman-turned-Obama chief of staff, Rahm Emanuel.  Now, this is not confirmed but a Chicago FOX affiliate reporter says that after Blagojevich, quote, “reached out” to Rahm Emanuel regarding the Senate seat, Emmanuel then reached out to Patrick Fitzgerald.  NBC, I repeat, has not confirmed that report, it is according to a FOX reporter in Chicago. Today, while seated at a table with the past and future vice presidents, President-elect Barack Obama sounded sadly, suddenly familiar.

(BEGIN VIDEO CLIP)

OBAMA:  As this is an ongoing investigation involving the governor, I don‘t think it would be appropriate for me to comment on the issue at this time.

(END VIDEO CLIP)

MADDOW:  You know, that‘s the most Bush administration phrase ever, isn‘t it?  I mean, even if it‘s true, did he have to say it exactly like that?

(BEGIN VIDEO CLIP)

OBAMA:  I had no contact with the governor or his office.  And so we were not—I was not aware of what was happening.

(END VIDEO CLIP)

MADDOW:  That is definitely a little bit better.  But, you know, Barack Obama cannot be happy, personally, to have the governor of his state from his own party, the man responsible for picking his Senate replacement at the center of all of this alleged criminality and embarrassment. Has Rod Blagojevich materially ruined Barack Obama‘s political honeymoon? Joining us now is “Newsweek‘s” investigative correspondent, Michael Isikoff. Michael Isikoff, thanks for joining us.  Nice to see you.

MICHAEL ISIKOFF, NEWSWEEK:  Good to be with you, Rachel.

MADDOW:  Is there a risk that this scandal could stick to the president-elect?  Is there any connection here other than proximity?

ISIKOFF:  Well, there—I mean, look, there‘s no allegations of wrongdoing against Obama or any Obama people here.  But, this has to be extremely uncomfortable for Obama and will become very uncomfortable for the Obama Justice Department come January.  There are a web of interconnections between the Blagojevich‘s world and Obama‘s world. The Senate candidate who Blagojevich was talking about, naming if he would get the money he wanted, was Valerie Jarrett, a very close Obama adviser.  One name that is prominent in that criminal complaint and will become more prominent in coming months, is Tony Rezko, he‘s identified as Blagojevich‘s chief fundraiser in the criminal complaint.  He also happened to have been Barack Obama‘s chief fundraiser for many years.  And, of course, they bought that—they were in that property deal together in South Chicago. Rahm Emanuel is the—who is Obama‘s chief of staff, filled Blagojevich‘s congressional seat when he became governor of Illinois. So, you have this web of interconnections.  What this really means, I think, because this is such rank corruption, in fact, it‘s probably the most, you know, naked corruption caught on tape since Abscam.  This now becomes a much bigger deal, a much more high-profile investigation which means every whiff, every allegation, that every whiff of an allegation will have to be vigorously investigated by the FBI and the U.S. attorney. And that means if anybody in this very wide-ranging case says word “Boo” about Obama or anybody close to Obama, the FBI will feel obligated to investigate it to the hilt.  So, we may get, at a minimum, FBI agents showing up at the White House wanting to question people about allegations that come up in the course of this investigation.

MADDOW:  So, even though there is nothing specific thus yet, the fact that this is going to be unsprawling (ph) over into the future, and this involved so many Illinois political faces, could mean this stays on Obama‘s doorstep for quite some time. Let me ask you about one specific thing.

ISIKOFF:  Sure.

MADDOW:  Obama‘s senior advisor, David Axelrod, said that Obama talked to Governor Blagojevich about his Senate replacement.  He has said that in the past.  Today, the transition team said that Axelrod misspoke about that.  Do you have anything to make of that?

ISIKOFF:  Well, yes, no, that sort of leaped out at a lot of people after Obama said he had not spoken to Blagojevich.  People who went back and looked at Axelrod‘s public comments on November 23rd, in which he said they had.  The transition team was very quick to say Axelrod misspoke. I mean, one, you know, implication of this is, we know, from the criminal complaint today, that since late October, the FBI had all of Blagojevich‘s conversations on tape.  So, if he spoke to Obama or anybody in the Obama world, those conversations would be on tape. We have to presume at this point that they did not speak.  Obama says they didn‘t and they said Axelrod did not.  But if you look closely at the complaint, there‘s pretty good reason to believe that Rahm Emanuel spoke to Blagojevich.  Now, maybe he tipped off Fitzgerald, we don‘t know.  That‘s an unconfirmed report.  But if he did, it would certainly be a reasonable presumption that that conversation was caught on tape as well.

MADDOW:  Michael, one last question.

ISIKOFF:  Yes.

MADDOW:  In addition to being called a mother bleeper and being called a number of other string of expletives by the governor, allegedly in these wiretaps today, the other thing that you would wanted if you were Barack Obama, the other way that you would want to surface in this investigation is by finding out that somebody close to you turned him in, had something to do with him getting caught.  And that as you say, that is an unconfirmed report about Rahm Emanuel.

ISIKOFF:  Right.

MADDOW:  . tipping off Patrick Fitzgerald.  Have you reported anything or heard anything any further on what might have given rise to this investigation and whether any of that can be tied back to Washington?

ISIKOFF:  Well, no.  We know that a Blagojevich fundraiser, Mr. Wyma, had cooperated with the FBI.  I think Fitzgerald‘s account is that they got, you know, information that this kind of, you know, blood sale auctioning of the Senate seat might be taking place and then they got a court order to wire Blagojevich‘s conversations. But, just having covered many of these sorts of cases, there‘s always many, many wrinkles and layers to them that you don‘t learn until we start seeing court—evidence put into court, transcripts introduced, and other evidence that gets out there.

MADDOW:  “Newsweek‘s” investigative correspondent, Michael Isikoff, thank you so much for your time tonight, Mike.

ISIKOFF:  Thank you, Rachel.

MADDOW:  The best part of this morning‘s press conference was hearing the ever serious Patrick Fitzgerald read Governor Blagojevich‘s phone calls verbatim.  Of course, he toned them down for family consumption.  Ahead:  What the governor really, actually said in the first-ever RACHEL MADDOW SHOW enhanced history reenactment event. And, what happens now to the most radioactive Senate seat in America?  “Chicago Sun-Times” columnist, Mary Mitchell, will be joining us to discuss that in just a moment. Plus, as always, we are on lame duck watch.  Ana Marie Cox joins us shortly to talk about President Bush‘s—media victory lap? But first, just one more thing.  It is bad enough Governor Blagojevich was indicted a day before his birthday, but today, also happens to be International Anti-corruption Day.  Ouch!  In 2003, the United Nations designated this day, December 9th, as a day to raise awareness about combating corruption.  Apparently here in America, we can celebrate it as “international irony day.”  Enjoy the contradictions.

(COMMERCIAL BREAK)

MADDOW:  It took a little while, but there is actual, real breaking news about the emergency loans asked for by the Big Three American automakers.  Within just the last few minutes, NBC‘s John Yang confirms that there‘s an agreement on the concept and on the way forward between the government and the automakers.  That is John Yang reporting just in the last few minutes.  The “Associated Press” reports that the deal would provide $15 billion in assistance to G.M., Ford, and Chrysler. In tonight‘s lame duck watch, the president‘s role in this rescue deal, it is bigger than we thought it could have been.  How did that happen?  Ana Marie Cox will be here with us.

(COMMERCIAL BREAK)

MADDOW:  Get used to hearing this statement about Rod Blagojevich. He‘s innocent until proven guilty.  And he is. Patrick Fitzgerald‘s press conference and the criminal complaint he filed today were full of Blagojevich‘s alleged words, complete with extra salty and seemingly incriminating language.  If it were a Hollywood movie, you‘d call it over the top, and give it a thumb‘s down.  But it‘s Illinois politics, so they just call it Tuesday. How did Patrick Fitzgerald come up with all these allegations?  It started with a little wiretap which, as of yesterday, didn‘t seem to scare the Gov.

(BEGIN VIDEO CLIP)

BLAGOJEVICH:  I don‘t believe there‘s any cloud that hangs over me.  I think there‘s nothing but sunshine hanging over me.  I don‘t care whether you tape me privately or publicly.  I can tell you that whatever I say is always lawful.

(END VIDEO CLIP)

MADDOW:  You know, you are innocent until proven guilty.  But I got to tell you, looking at the transcript, doesn‘t read like it‘s lawful.  Maybe it sounds more lawful than it reads? In the name of multimedia analysis, we now represent a review of some of the charges against Rod Blagojevich with audio enhancement, to fair it out whether a Governor Blagojevich impersonator saying this stuff could maybe sound more lawful than it looks in print.  It‘s the first ever RACHEL MADDOW SHOW enhanced history reenactment event. One advisory here: The margin of error on our dramatically-imagined and produced Chicago accent is plus or minus 100 percent. One of the charges against Blagojevich has to do with his alleged shake-down of the Tribune Company which was seeking to sell Wrigley Field, home of the Chicago Cubs.  According to the complaint, the governor‘s assistance would come with a high price. The criminal complaint says this, quote, “On November 4th, 2008, Rod Blagojevich talked with John Harris.  Rod Blagojevich discussed ‘The Tribune‘ editorial suggesting that Rod Blagojevich be impeached and told Harris that they need to have a conversation with Tribune financial adviser.” Rod Blagojevich stated that.

(BEGIN AUDIO CLIP)

BLAGOJEVICH:  Our recommendation is fire all those (BLEEP) people and get them the (BLEE) out of there and get us some editorial support.

(END AUDIO CLIP)

MADDOW:  And the governor‘s wife allegedly had his back on the issue of “The Tribune” and Cubs.  From the complaint, quote, “On November 3rd, 2008, Rod Blagojevich and Deputy Governor A discussed an editorial from the “Chicago Tribune” calling for a committee to consider impeaching Rod Blagojevich.” During the call, Rod Blagojevich‘s wife can be heard in the background telling Rod Blagojevich to tell Deputy Governor A.

(BEGIN AUDIO CLIP)

PATRICIA BLAGOJEVICH, GOV. BLAGOJEVICH‘S WIFE:  To hold up that (BLEEP) Cubs‘ (BLEEP) them.

(END AUDIO CLIP)

MADDOW:  Then, there‘s the alleged effort to sell Barack Obama‘s vacant Senate seat.  See if this sounds lawful to you.  We begin the day before Barack Obama is elected president.  November 3rd, 2008, Rod Blagojevich spoke with adviser A, by this time, media reports indicated that Senate candidate one, an adviser to the president-elect, was interested in the Senate seat if it became vacant, and was likely to be supported by the president-elect. During the call, Rod Blagojevich stated.

(BEGIN AUDIO CLIP)

BLAGOJEVICH:  Unless I gets something real good for Senate candidate one (BLEEP), I‘ll just send myself.  You know what I‘m saying? I‘m going to keep this Senate option for me a real possibility, you know?  And therefore, for I can drive a hard bargain, you hear what I‘m saying?  And if I don‘t get what I want and I‘m not satisfied with it, then, I‘ll just take the Senate seat myself.

(END AUDIO CLIP)

MADDOW:  According to the wiretapped transcripts, Blagojevich said the Senate seat.

(BEGIN AUDIO CLIP)

BLAGOJEVICH:  Is a (BLEEP) valuable thing, you just don‘t give it away for nothing.

(END AUDIO CLIP)

MADDOW:  And then on November 5th, speaking to adviser A, Rod Blagojevich stated.

(BEGIN AUDIO CLIP)

BLAGOJEVICH:  I‘ve got this thing in its (BLEEP) golden.  And I‘m not just giving it up for (BLEEP) nothing.  I‘m not going to do it, and I can always use it.  I can parachute me there.

(END AUDIO CLIP)

MADDOW:  And, getting back to the complaint, on November 11th, 2008, Rod Blagojevich talked with John Harris.  Rod Blagojevich said he knows that the president-elect wants Senate candidate one for the Senate seat.  But.

(BEGIN AUDIO CLIP)

BLAGOJEVICH:  They are not willing to give me anything except appreciation (BLEEP) them.

(END AUDIO CLIP)

MADDOW:  You know, this thing didn‘t read lawful in print and it doesn‘t sound lawful either.  Maybe we‘ve got the accent wrong. So, why would Blagojevich say so many things that don‘t read or sound lawful?  According to Patrick Fitzgerald‘s filing, which has yet to be proven, the governor wanted money.  From the complaint, again, quote, “On November 7th, 2008, Rod Blagojevich discussed the opened Senate seat in a three-way call with John Harris and adviser B, a Washington, D.C.-based consultant.” Rod Blagojevich stated.

(BEGIN AUDIO CLIP)

BLAGOJEVICH:  I want to make money.

(END AUDIO CLIP)

MADDOW:  At least he‘s clear about that.  Being governor for two more years without getting paid additionally for the Senate appointment, allegedly, was not going to cut it dollars-wise.  November 10th, Rod Blagojevich said the consultants are telling him that he has to suck it up for two years and do nothing and give this.

(BEGIN AUDIO CLIP)

BLAGOJEVICH:  Mother (BLEEP) president-elect, his senator.  (BLEEP) him.  For nothing?  (BLEEP) him.

(END AUDIO CLIP)

MADDOW:  Did he just call Barack Obama a—yes.  You know, that‘s not illegal but still.  The governor ultimately summarized what was driving his pick for the open Illinois Senate seat.  See if this sounds lawful to you. On November 12, 2008, Rod Blagojevich stated that his decision about the open Senate seat will be based on three criteria in the following order of importance.

(BEGIN AUDIO CLIP)

BLAGOJEVICH:  Our legal situation, our personal situation, and my political situation.

(END AUDIO CLIP)

MADDOW:  Oh, noble.  You know, this is not a legal proceeding or findings here are not scientific. The governor told us yesterday that everything he says is lawful—didn‘t read that way in black and white and it doesn‘t sound that way when we test out his words out loud.  And as for Rod Blagojevich‘s legal situation, personal situation, and political situation, I would say, “dicey, troubled, and over” come to mind. More on what comes next of Blagojevich, Obama, and the U.S. Senate, in a hot minute.

(COMMERCIAL BREAK)

MADDOW:  In 1991, the “Chicago Sun-Times” ran a front page story commemorating a very important landmark achievement.  A whole year had passed with no aldermen being indicted or convicted.  Celebrate good times.  Come on. Coming up: We will talk about the rich, sleazy history of public corruption in the great state of Illinois. First, though, it‘s time for some underreported holy mackerel news in today‘s news.  On last night show, we highlighted the plight and fight of the employees of Republic Windows & Doors on Chicago‘s North Side.  After Bank of America cut off financing for their employer, the employees were given just three days notice last week that they‘d be out of a job, no severance, no vacation pay, no nothing, by the end of the week. The workers union picketed in front of the bank in Chicago on Wednesday, to no avail.  The factory closed on Friday, and the workers refused to leave.  They‘ve essentially been sitting in at the factory for the past five days, trying to get what they think they are owed. Indeed, the federal Worker Adjustment and Retraining Notification Act seems to indicate that companies have to give employees 60 days notice before closing plants or laying all their workers off.  The workers at Republic got three days. Bank of America, for its part, says it does not have control over whether or not the company pays its workers.  The politicians weighing in on the side of the workers, they‘ve said, hey, that maybe true but weren‘t those $25 million taxpayer dollars that just went to B of A supposed to facilitate?  I don‘t know, loans to American businesses who need them? Since being on our show last night, it‘s been sort of a good news/bad news thing for the workers at Republic. The bad news first: One of the politician who sided with them really publicly and, in fact, said he would pull all his state‘s work with the Bank of America if they didn‘t get what they wanted, to the tone of possibly hundreds of millions of dollars?  That was Rod Blagojevich.  Yes, we do know the man likes to play hard ball. But good news for the sitting in workers at Republic Windows and Doors is that Bank of America did announce today that they will provide some limited loans to the company.  B of A expressed concern about Republic‘s failure to pay their employees and said in a statement, quote, “Bank of America is prepared to make these additional loans despite the fact that Bank of America is not obligated to pay Republic‘s employees or make additional loans to Republic.” They went on to say it‘s up to Republic‘s management to negotiate with the employees regarding their claims.  There, see?  See what a difference five days occupying the factory 24 hours a day, national media attention, support from the President-elect and extortion threat and the handcuff arrest of a governor can make?  That makes all the difference in the world.

(COMMERCIAL BREAK)

MADDOW:  Teen idol prosecutor Patrick Fitzgerald today called the charges against Illinois Governor, Rod Blagojevich, “staggering.”  Eric Zorn of “The Chicago Tribune” took it a few steps further.  He sees Fitzgerald staggering and raises him, stunning, eye-popping, gob-smacking, jaw-dropping and appalling.   Zorn‘s commentators at “The Chicago Tribune” Web site wrote in today and added their own, mortifying, nauseating, socio-pathetic, hil-hairious - which is a nod the governor‘s stupendous hairdo.  And my favorite, oy vayovich.   The Senate-seat-for-sale corruption scandal here maybe all of those adjectives and more.  But you know what it‘s not?  It‘s not totally out of the ordinary.  By which I mean that, if in fact, Blagojevich is convicted of these charges he will be the fourth of the last eight Illinois governors to follow that path.  In other words, the people of Illinois statistically speaking are sitting on a 50/50 chance of electing a governor who will go to prison.  Blagojevich‘s immediate predecessor, in fact, is still in prison for corruption.  Blagojevich, just a couple of weeks ago, called for President Bush to issue former Governor George Ryan a pardon.  Now, as for Blagojevich himself, if convicted of these charges, he stands ready to gain entry into this not-at-all exclusive club known as the Illinois political corruption hall of fame.  Here‘s the hall of fame‘s governor‘s wing where Blagojevich would join.  As I‘ve said, former Republican Governor George Ryan, currently serving six and a half years for racketeering and fraud.  Also, former Democratic Governor Dan Walker, who was convicted of bank fraud after leaving office.  And former Democratic Governor Otto Kerner, who got three years for bribery, conspiracy and perjury. But again, that‘s just the governor‘s wing of the Illinois political corruption hall of fame.  The last time “The Chicago Sun Times” took inventory of corrupt politicians in its state, they found at least 79 current or former Illinois or Chicago-area elected officials being found guilty of a crime since 1972.  That means, in my lifetime, an average of two Illinois politicians are convicted every year.  I think Robert Grant, the FBI agent in charge of Chicago, said it best.  

(BEGIN VIDEO CLIP)

ROBERT GRANT, CHICAGO‘S FBI SPECIAL AGENT IN CHARGE:  I don‘t have 49 other states to compare it with.  But I can tell you one thing.  If it isn‘t the most corrupt state in the United States, it‘s certainly one hell of a competitor.  

(END VIDEO CLIP)

MADDOW:  Now, there is something different with this case, something that really sets Governor Blagojevich apart from the standing members of the Illinois political corruption hall of fame.  Blagojevich is still in charge of filling the United States Senate seat vacated by the President-elect Barack Obama.  As I read it, I think the Illinois state constitution says that unless Blagojevich is incapacitated, he‘s still got the power.  He is the only person who has the power to appoint a new U.S. senator, even - I think - even if he has to do it from the courtroom or the holding cell.  Imagine being a politician lucky enough to be appointed from the holding cell.  Cloud of suspicion, anyone?  Ultimately, somebody does need to be appointed to the seat.  And one of the unresolved questions here is whether any of the people under consideration for the seat have been tarred with Blagojevich‘s brush here.  The indictment, Senate candidate number five, for example, may be in trouble.  Senate candidate number five is described the governor and his footmen as having approached them with an offer to raise campaign money for Blagojevich in exchange for the Senate seat.  Now, again, it‘s all allegedly here.  But as long as Blagojevich is still governor, it is still his job to pick the next U.S. senator from Illinois.  Talk of impeachment is already underway but that takes time.  And while the calls for resignation have been coming fast and furious all day, Blagojevich‘s attorney told reporters today, quote, “He didn‘t do anything wrong.  A lot of this is just politics.”  When asked specifically if the governor planned to resign, his attorney said, “Not that I know of.”  But as it happens, Illinois Senator Dick Durbin has a plan B.  

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D-IL):  I think the Illinois general assembly should enact a law as quickly as possible calling for a special election to fill the Senate vacancy of Barack Obama.  No appointment by this governor under these circumstances could produce a credible replacement.  

(END VIDEO CLIP)

MADDOW:  True, that.  And Democrats being willing to put this seat up to a vote, risking the chance that there could be a Republican who wins instead of getting an assured Democratic pick is a relatively, partisan-ly, selfless thing to do at a time that probably calls for that.  The Illinois State Senate president Emil Jones is all over this idea.  He says he plans to call the Senate back into session - the state senate, back into session to work on legislation for a special election.  But can the legislature legally wrest that power away from the governor?  Will Blagojevich try to cling to office as long as possible and to this specific power that his office gives him?  Will the ensuing battle be as dramatic as the opening salvo was this morning?  Is it all embarrassing or is it also just a little bit exciting today to be an Illinois politics watcher?  Joining us now is Mary Mitchell who is an editorial board member and columnist for “The Chicago Sun Times.”  Ms. Mitchell, thank you so much for coming on the show tonight.  

MARY MITCHELL, EDITORIAL BOARD MEMBER AND COLUMNIST, “THE CHICAGO SUN

TIMES”:  Thank you.  I‘m a huge fan.  

MADDOW:  Oh, thank you.  The state Senate may draft a law that would allow the state to fill Obama‘s Senate seat with a special election, essentially wresting that appointment away from Blagojevich.  Do you think that they can do that and do you think they will try? 

MITCHELL:  Of course, they will try, because right now, this is - not only is it embarrassing, it is the kind of thing that will come back and bite every last one of them, every last legislative leader in the behind down the road.  I would be surprised if citizens wouldn‘t go to the State Capitol, march in there and drag Blagojevich out to get this thing done.  The whole process has been tainted.  It‘s given Illinois - we already had a bad reputation in terms of corrupt officials.  But you‘d think this is a new day.  You know, everybody is thinking, you know, that there is a new day and there‘s hope in the air.  But now, we have this hanging over our heads.  So I think the legislative leaders would do it very quickly.  They will get it done.  They will get him unseated or they will change the law so that he no longer has the power to appoint. 

MADDOW:  Is anybody in Illinois, at this point, sticking up for Blagojevich further than saying he is innocent until proven guilty?  Anybody other than his attorney and himself standing up for him so far? 

MITCHELL:  Everybody is running for cover.  First of all, he‘s a very unpopular governor.  Since he‘s been in office, there hasn‘t been one budget process that went smoothly.  He has been a major bully in terms of federal - of state funding. 

And I think people don‘t like him very much.  So I don‘t think he‘s going to find any friends at this point.  People are running and they‘re hiding and they‘re ducking and they‘re hoping that their name isn‘t mentioned. 

MADDOW:  Now that Governor Blagojevich is charged with trying to sell Obama‘s Senate seat, does anybody who was under consideration for that seat before still stand a chance at getting that appointment?  Or is it all dependent on the process from here on out? 

MITCHELL:  I think process outlined by Sen. Durbin seems to be the best solution here.  Have an election at this point.  Let them put their names on a ballot.  Let them campaign for it and let the citizens vote for the person that they want to send to the Senate, because any other process is going to be tainted.  I find it very interesting, for instance, that Illinois Senate President Emil Jones is making all this noise about coming in and passing law.  His name is on the list.  Just a day ago, he decided to come out and say he was interested in the job.  So how is he going to be over the process?  I think the only thing we can do now is hold an election.  And that‘s the shame of it, that Illinois - they‘re struggling to pay its bills like every other state is going to have to spend money now for a special election because of these charges. 

MADDOW:  This is going to be one of those situations in which the crime, to a certain extent, defines the political problems of the state until the solution defines the political problems of the state.  The way that Illinois finds its way out of this is going to say more about the people and the political capacity of Illinois‘ leaders than anything Rod Blagojevich could ever do.  One last question for you, Mary, and that is the speculation about who the infamous Senate candidate number five is, the one who at least Blagojevich and his henchmen said was willing to offer money to Blagojevich in exchange for the seat.  Lots of speculation, presumably, in Chicago on who Senate candidate number five is? 

MITCHELL:  There are lots of speculation.  But you know what?  I don‘t want to be one of those people who speculate because that person‘s reputation is going to be tainted.  I would rather wait to see what happens with Fitzgerald whether he‘ll come back and actually charge that person with bribery, you know, in connection with this case.  

MADDOW:  Mary Mitchell, “Chicago Sun Times” editorial board member and columnist, thank you so much for joining us tonight.  I look forward to having you back on the show again some time soon.

MITCHELL: Thank you.  

MADDOW:  Coming up next, the “Lame Duck Watch” continues.  And it‘s sort of better than good tonight, by which I mean bad.  The White House has reportedly sent a memo to cabinet members with official talking points about President Bush‘s sterling record as decider-in-chief.  Among his alleged achievements?  Maintaining the honor and dignity of his office, apparently commuting the sentence of the vice president‘s chief-of-staff is a new late addition to the definition of dignity.  Ana Marie Cox is along, next. But first, just one more thing about another political scandal and the law.  Remember old Larry Craig, Republican senator from Idaho whose political demise began with the great Minneapolis Airport bathroom sex thing of 2007.   Since pleading guilty to disorderly conduct in that men‘s room in that incident, Sen. Craig has tried to withdraw his plea and has vehemently denied being either guilty or gay.

Today, a Minnesota appeals court ruled on at least one of those points.  According to State Court of Appeals, Larry Craig is still guilty of disorderly conduct.  He can‘t withdraw his plea.  Craig says that he is considering appealing that decision to the Minnesota Supreme Court.  A friendly nudge, Senator?  Just let it go.

(COMMERCIAL BREAK)

MADDOW:  The White House and congressional Democrats have reportedly reached an agreement in principle to speed $15 billion in government loans to our big three automakers.  The plan could see a vote as early as tomorrow but may face obstacles from congressional Republicans who have not yet approved it.  Why did the negotiation over emergency loans take so long?  And why is the deal for $15 billion instead of for $25 billion or $34 billion?  Well, with only 41 days left until inauguration day it seems that still-President Bush has decided to flex his soon-to-be-atrophied political muscles in order to force the Congress to bend to his will.  And Congress appears to be letting him bend them.  Anybody else reminded of warrant-less wiretapping here - the Iraq War?  On the big-three rescue, Bush won the argument that the bailout money should not come from the $700 billion troubled-asset relief plan, the TARP, but instead from another loan program that‘s helped the auto industry make fuel-efficient vehicles.  President Bush also effectively determined the amounts of money to be loaned to the big three - $15 billion, not $25 billion or $34 billion, as requested by the companies.  And finally, perhaps most surprisingly, President Bush gets to appoint the car czar to oversee the auto industry restructuring.  Why does Mr. 23-percent approval rating get to appoint anything, get to make such an important decision with less than seven weeks left in office?  It‘s time once again for THE RACHEL MADDOW SHOW‘s “Lame Duck Watch,” because somebody‘s got to do it.  President Bush continued his PR legacy campaign today at West Point where he once again tried to sell himself as the savior of the Middle East, facts be damned.  

(BEGIN VIDEO CLIP)

GEORGE BUSH, UNITED STATES PRESIDENT:  We removed the Taliban from power.  We liberated more than 25 million Afghans.  We acted with the coalition of nations to protect our people and liberate 25 million Iraqis.  Instead, we‘re doing the tough work of helping democratic societies emerge as examples for people across the Middle East.  

(END VIDEO CLIP)

MADDOW:  I‘m sorry, Mr. President, I couldn‘t actually hear that last part over the sound of Mullah Omar‘s latest message to the world sent from the safety of wherever it is he is.  And also, the sound of the Taliban rumbling back into 72 percent of Afghanistan.  Couldn‘t quite make out what you said there.  While the president travels the country effortlessly inventing his own legacy, the White House is offering assistance to the people closest to him.  Today, we learned that the Bush administration is sending a two-page memo to cabinet members with official talking points meant to guide his closest associates as they speak of the man himself.  The memo obtained by “The Los Angeles Times” is called the speech topper on the Bush record.  Speech topper.  Here‘s some of the talking points.  President Bush has kept the American people safe.  He has lifted the economy through tax cuts.  He has curbed AIDS in Africa.  He has responded with bold measures to prevent an economic meltdown.  Wow.  And even better, he has maintained the honor and the dignity of his office.  That‘s the one where whatever you‘re drinking comes up through your nose.  Maybe there‘s like an asterisk there that‘s supposed to encompass the phrase “uranium from Africa, Valerie Plame Wilson‘s CIA career, Scooter Libby‘s commutation, torture and New Orleans, Guantanamo, the second great recession/depression.”  All in one asterisk.  It‘s a big asterisk.  Joining us Ana Marie Cox, a contributor “The Daily Beast” Web site.  Ana Marie, nice to see you.  Thanks for joining us again. 

ANA MARIE COX, CONTRIBUTOR, “THE DAILY BEAST”:  And Rachel, before we get started on Bush, can I just say something along the lines of wishful thinking for a second? 

MADDOW:  Yes, yes. 

COX:  For years, I wanted to hear Patrick Fitzgerald talk dirty to me.  And I just never thought it would come about this way. 

MADDOW:  There was a lot of dirty talk, a lot of cussing. 

COX:  Salty, I think, is how some people described it. 

MADDOW:  You know, when Blagojevich talked about getting wiretapped when he spoke at the factory where the sit-in workers and everything - and he said, “Sure, go ahead and wiretap me.”  The one thing he warned us about that proved to be true is he said you might hear some words you don‘t usually hear. 

COX:  Yes.

MADDOW:  He was self-conscious about his language, if not the whole bribery thing. 

COX:  He didn‘t want the kids to hear but apparently thought what he was doing was lawful.  We can talk about Bush if you want.  That‘s fine. 

MADDOW:  All right.  All right.  Yes.  Kids don‘t want to hear the F-word but they definitely don‘t mind $800 million being withheld from children‘s hospital in exchange for a campaign contribution.  All right.  Sorry.  All right.  Bush. 

COX:  All that what‘s the dirty. 

MADDOW:  Yes, exactly.

COX:  What you hear counts as obscene.  All right.  Back to Bush here.  Is it possible that we do not think the same thing that they think when they say the phrase “honor and dignity?” 

COX:  I think maybe so, speaking of obscene.  Because, you know, actually, during the 2000 campaign, honor and dignity - restoring honor and dignity at the White House was sort of code for the Lewinsky scandal. 

MADDOW:  Right.

COX:  And that‘s what he kept saying whenever he was referring to Clinton - “I will restore honor and dignity to the White House.”  So I think what he‘s saying here - I think he‘s asking us to judge him by what is kind of a low bar.  He did not have sex with an intern. 

MADDOW:  In the Oval Office. 

COX:  In the Oval Office.  Congratulations.  And the thing is, I think I would have preferred him having sex with an intern to, like, condoning torture, starting an illegal war, letting people drown in New Orleans.  There are a lot of things I‘d be willing to forgive if all he wanted to do was have sex with an intern. 

MADDOW:  Besides not having sex with an intern in the Oval Office - I mean, obviously he‘s trying to brag on his record on international AIDS issues.  He‘s trying to brag on his record that there was not another 9/11 after the first 9/11.  But are there other things that he really - that he could make a good case for himself and his legacy?  Are there other things you should be having people focus on? 

COX:  Well, actually, the AIDS issue not a terrible one.  I do think we‘re judging him by an extremely low bar but he has done some things on the AIDS issue.  And we have not had another terrorist attack.  That perhaps is something we should just go ahead and be thankful for, not look too closely.

MADDOW:  Other than the anthrax attacks and the Washington sniper stuff and  you know, I mean -

COX:  Domestic terrorism. 

MADDOW:  Right.

COX:  Not the same.  Not the same.  But I actually would say something he didn‘t point out which I‘m surprised that he‘s actually done.  His administration has actually done pretty good work on homeless policy, which when you think about it, is good because apparently, there might be a lot more homeless now because of the economic situation.  So that‘s sort of a - you know, maybe he just broke even on that one. 

MADDOW:  One last quick question.  We have had some breaking news tonight on a deal in the auto bailout, the auto emergency loans.  President Bush, surprisingly powerful in these negotiations, from all appearances, getting lots of what he said he wanted that Democrats said they didn‘t want.  Why are Democrats doing what Bush wants right now? 

COX:  Well, you know, I think this has a lot to do with Bush‘s power than about a lack of consensus with Democrats and about just how controversial all of these bailouts are.  And to do a small bailout with the president‘s backing right now, that sort of a stop-gap measure actually just pushes this on forward to Obama‘s plate. And it looks like he‘s willing to take it on.  Again, I don‘t think this has much to do with Bush‘s power so much as it does with sort of a willingness of the Democrats to go ahead and kick the can down the road, as they say. 

MADDOW:  Ana Marie Cox, contributor to “The Daily Beast” Web site, thank you very much. 

COX:  Thank you.

MADDOW:  Next, I get just enough pop culture from my friend, Kent Jones.  Condi and Hillary met for dinner at the Watergate.   I will have the Clams Nixon and Unitary Executives Salad.

(COMMERCIAL BREAK)

MADDOW:  Now, it‘s time for “Just Enough” with my friend, Kent Jones.  Hi, Kent.  What have you got? 

KENT JONES, POP CULTURIST:  Good evening, Rachel.  Now, how‘s this for a times-have-changed moment.  Last night, Condoleezza Rice hosted Hillary Clinton for a two-hour private dinner at Rice‘s apartment at, of all places, the Watergate or what I think of now as “evening meal-gate.”  I‘m sure the conversation between the two power brokers got all “transition-y” and “secretary of state-y.”  But here was the menu - sea bass, wild rice, mushroom soup and fruit.  They then enjoyed a sorbet of cracked glass ceiling and with no presidents in the room running their mouths, it was a pretty sweet evening, but not for the sea bass.  Next from the strip in the fabulous Las Vegas, Nevada, the Mirage Hotel reopened their giant lava-spitting volcano last night in a spectacle of fire and water to a custom soundtrack co-written by former Grateful Dead drummer Mickey Hart.  Fire, fire.  It gets better.  On New Year‘s Eve, Robbie Knievel, son of Evel, will jump the refurbished Mirage volcano on his motorcycle.  Now, if you‘re a fan of metaphors, Obama - Knievel.  The volcano - Blagojevich.  Stick to landing.  And finally, in Australia, the government sent out a kit designed to help teachers help students with their social and emotional well-being.  For instance, so as not to damage a students‘ fragile psyche, one of the suggestions for grading is don‘t mark it in red pen which can be seen as aggressive.  Use a different color. Right wingers in the parliament, who did their contempt, one of them calling it “kooky, loony, loopy, lefty policies.”  OK.  Let‘s do a little experiment.  Now, which one of these do you consider more aggressive?  Here‘s one in red.  Now, here‘s one without the red.  You know.  Math was hard for some people, and a rainbow would have been nice.  Rachel. 

MADDOW:  Thank you, Kent.  Thank you for watching tonight.  We‘ll see you here tomorrow night.  “COUNTDOWN WITH KEITH OLBERMANN” starts right now.  

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