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'The Rachel Maddow Show'for Monday, February 2

Read the transcript to the Monday show

Guest: Scott Horton, Claire McCaskill, Paul Rieckhoff, E.J. Dionne, Kent Jones High:

Spec: Politics; Elections; Government

RACHEL MADDOW, HOST:  Good evening, Keith.  You are right.  We are paying a lot of attention to the fine print.  You never know where you‘re going to turn up in these things.  Thank you.

(LAUGHTER)

MADDOW:  Thank you at home for staying with us for the next hour as well.

Tonight, as Keith said, the thorny question of whether or not President Obama‘s executive orders on torture, on extraordinary rendition, on secret prisons, whether those have loopholes in them.  Loopholes that would let the government still got away with stuff like that.

Here‘s the thorny part of this question, if the answer is no, if the answer is that the Obama executive orders don‘t have loopholes, then are leftover Bush/Cheney loyalists putting out misinformation about Obama from inside our government?  Moles?  Saboteurs?

Attorney Scott Horton will be here to talk about that.  Senator Claire McCaskill will also be joining us.  Paul Rieckhoff from Iraq and Afghanistan Veterans of America will be here.  It‘s all to come this hour.

But first, President Obama may need some relationship advice.  There.  I said it.  Relationship advice.  Not for the truly meaningful personal relationships that shape his real life, those are not only absolutely positively none of my business and none of your business, but for what it‘s worth, those relationships do appear to be perfectly healthy.

No, the president has got a relationship problem in his political life.  And as Americans, it may be time for us to intervene, at least just start talking openly about the awkward truth here for his own good.  In short, President Obama appears to be stuck on somebody who does not feel the same way about him.  He is a in a nonreciprocal situation.  He can‘t get over the one that is hard to get—hard to get—the whole appeal.  Anybody who has ever had a crush knows how this works.

The problem with our president and this particular political crush is that the hard-to-get one is the Republican Party.  They are essentially the only group that has not fallen for him and they are the one group that he can‘t give up on.  The Democrats, they have been in love with Obama for months, they hang on his every word, no matte what he does.

You are kicking us in the teeth by having Rick Warner give the invocation at the inauguration, that‘s terrible.  I mean, we are all still showing up but—you know what I mean.  Democrats get worried if they don‘t have a text from Obama on the cell phone, at least an email from David Plouffe in the inbox.  It‘s been two days.  Do you think he‘s mad at us?

But Republicans on the other hand—not so much n.  In his first big legislative effort, the stimulus bill, President Obama showered House Republicans with attention, with gifts, tens of billions of dollars in tax cuts.  And how did they reward his courtship?  Zero votes on the stimulus bill.

He keeps giving, they keep taking.  Obama invited Arizona‘s two Republican senators over to his house, the house, the White House, to watch the Super Bowl and they blew him off.  He reached across the aisle and included a few Republicans in his cabinet, and the Republicans in the Senate thanked him by blocking or delaying some of his other cabinet picks.

And so, the tough love message for our country‘s chief executive about the opposition party is—dude, I‘m sorry, but they are just not that into you.  It‘s time to move on.  Don‘t wreck your life for these guys or your political agenda.

NBC News has confirmed tonight the President Obama will name New Hampshire Republican Senator Judd Gregg to be his commerce secretary nominee tomorrow at 11:00 a.m. Eastern.  When word of this latest instance of Obaman post-partisanship courtship made news on Friday night for the first time, it raised many eyebrows—including these.

Why was this so interesting?  Well, Senator Gregg is a Republican—right—a conservative, not necessarily president Obama‘s type, but Judd Gregg‘s replacement in the Senate will be appointed by New Hampshire‘s governor, John Lynch—John Lynch who is a Democrat, appointing a replacement for this Republican.  Now, you know why the eyebrows were raised.

Once Al Franken gets seated from Minnesota, which seems increasingly likely, a big “D” Democratic appointment from New Hampshire would mean 60 Democrats in the Senate.  That‘s the magic number, filibuster-proof.  Republican power would be zeroed out in Washington.

President Obama you rightly thing you, I underestimated you—I‘m sorry.  I‘m sorry, it‘s my producer.  Are you serious?  Apparently, the leading candidate to replace Judd Gregg in the U.S. Senate is a Republican.  J. Bonnie Newman and that‘s because Senator Gregg said in a statement today that he would not accept the commerce post if his, quote, “departure” would cause a change of the makeup in the Senate.  So, then, why on earth would President Obama want Judd Gregg as commerce secretary?

Senator Gregg is not exactly a much at political EHarmony.com.  He earned a life time rating of 4 percent from the AFL-CIO on labor issues.  According to the “Washington Post,” he voted with his party more than 83 percent of the time during the last Congress.  Do you remember the last Congress?  And, the American Conservative Union gives him a life time rating of 78.4.

So, giving Mr. Gregg the commerce secretary job, the one that was supposed to go to Bill Richardson, it puts someone way to the right of the Democratic mainstream in a crucial economy job.  It doesn‘t buy the Democrats any further power in the U.S. Senate, it is a big poke in the eye to the Democratic base and the labor movement, but it does get the president more bipartisanship bragging rights?  Those so far have demonstratively been worth exactly—zippo, zip, zero, nada.

It has been a sincere and maybe even noble courtship, understandable, even.  But all it‘s doing thus far is allowing Republicans to brag to their friends about all the stuff the president is doing for their attention.

Mr. President, as a concerned citizen, I got to tell you, they are just not that into you.  And seriously, it‘s not you.  It‘s them.  You have so much going for you.  You could do so much better.

Joining us now is E.J. Dionne, op-ed columnist for the “Washington Post” and a senior fellow at the Brookings Institution.

Mr. Dionne, thanks so much for joining us.

E.J. DIONNE, THE WASHINGTON POST:  Good to be with you.

MADDOW:  You wrote in your column that there is a rapidly forming conventional wisdom that President Obama and the Democrats will only be able to claim victory on the stimulus if it passes with some Republican votes.  Do you think that conventional wisdom is substantive or is it—I mean, is there any reasoning behind it?

DIONNE:  Well, I think Obama‘s reasoning is twofold.  One is that he believes that the economic recovery is not just about money, but also about psychology, and that if Washington looks like a partisan demolition derby, people are not going to have a lot of confidence in the future.  There may be something to that.  And Obama himself has talked about it so much that he laid that out there as a test.

But I think the question he‘s got to face now, and by the way, if you have relationship advice for me, I‘ll take it.

(LAUGHTER)

DIONNE:  But if—what he‘s got to sort of look at now is what is he getting for it.  If you give and give and give and still get no votes, that‘s not a negotiation, that‘s a sucker‘s game.  And I think when you look at what the conservatives are most attacking in the stimulus bill, it‘s the parts that are most part of the Obama program from the last campaign—expanding health insurance coverage, green energy investment, big education investments.

I think he can keep playing the bipartisanship for what it‘s worth because it does seem to help his approval rating, but he‘s got to draw some lines I think and just say, you know, “I‘m just not going to give these things up.  And by the way, guys, you want more concessions; give me a few votes, please.”

MADDOW:  Well, does political capital accrue of bipartisanship?  Do you earn the ability to do something that you couldn‘t otherwise do because of the fact that you had the opposing party vote for you on a previous piece of legislation?  I know, in theory, people kind of hypothesize about that, but have you ever seen that happen?

DIONNE:  Well, I think the theory on the stimulus bill in particular is because this is designed to get the economy moving again.  It‘s—the idea is to convince everybody you can start lending money, you can start spending money because we are on the road.  And if more people supported, if Washington seems united, then people will have more confidence in it.

Again, I think Obama‘s gotten quite a bit out of, you know, this

bipartisan image he‘s created.  I don‘t think all of this was a waste of

time.  But I think the House vote is a real sort of warning and that what -

you know, what a worry about is giving up on the fundamentals.

If this is going to be one of his best chances to make a mark in areas that he promised to do things about, if the Democrats can‘t get more people health insurance coverage, what‘s the point of voting Democratic?  So, I think there‘s, you know, now is the time to toughen up a little bit and say, “I‘m nice, but I‘m not foolish.”

MADDOW:  On the Judd Gregg nomination, which we now know is going to be announced tomorrow morning, E.J., my hypothesis on this, you heard me laid it out at the top of the segment, is essentially that this would have been a sort of awesome power move had Judd Gregg been replaced by a Democrat.  Maybe he wouldn‘t have taken the appointment had that been the eventuality.  But with Judd Gregg in all likelihood going to be replaced by another Republican, what‘s the advantage to Obama of bringing Mr. Gregg up to the cabinet?

DIONNE:  Well, the first thing, I think, is that I bet you and I have never stayed up late at night worrying about who is commerce secretary, with all due respect.  I mean, it‘s not state, it‘s not HHS, it‘s not labor.

And the second point is, I think, bipartisanship that gives up principle is a mistake.  Bipartisanship for a purpose makes sense.  Obama is trying to build a new majority.  You build a new majority by making converts.

In the exit polls, 17 percent of the people who said they voted the last time for George W. Bush voted for Obama.  That is about eight points.

I think putting Republicans in your government as FDR did, is a way of making people comfortable saying, whatever you were in the past, this is about what we‘re going to do now.  And in terms of the replacement, it would have been a great trick if he could have gotten the 60th vote by naming Judd Gregg as commerce secretary.  But, you know, there are—New England is one of the few places that still breeds moderate Republicans.

Olympia Snowe has 80 percent, a senator from Maine, a Republican, has 80 percent rating from Americans for Democratic Action, the great old liberal group.  Judd Gregg is at 15 percent.  There is a lot of room between 15 percent and 80 percent.  So, as long as it‘s commerce and not labor or a few of those other things, I‘m not sure it‘s a huge loss.

MADDOW:  We look forward to the day when we finally have a labor secretary, that‘s another one of those ones that they‘re holding up.

DIONNE:  Yes, exactly.

MADDOW:  Yes.  E.J. Dionne, columnist for the “Washington Post”—it‘s great to have your analysis, thanks for being here tonight.

DIONNE:  Great to be with you.

MADDOW:  Bank of America recently received $45 billion, that billion with a “B,” $45 billion in taxpayer bailout cash.  So, clearly, they are in austerity mode now, right?  The high life totally finished, except for that multimillion dollar party tent that B of A sponsored outside the Super Bowl yesterday.  Where did that money come from?  The federal emergency kegger fund?

In just a moment, we will be joined by Missouri Senator Claire McCaskill, who has a thing or two to say on this subject.  And our Talk Me Down topic tonight, it has worried about Bush/Cheney dead-enders inside the Obama administration, messing with Obama‘s plans on things like torture, and rendition and secret prisons.  Nefarious leaks—this is a weird story.  That‘s coming up next.

(COMMERCIAL BREAK)

MADDOW:  Time now for a tragic comic visit with the Republican Party that is searching for meaning in the political minority.  In this latest episode, the GOP learns this important truth about parties in general.  If your party isn‘t very much fun, people will leave.  It‘s true on your birthday and it‘s true for the GOP in exile.

(MUSIC)

MADDOW:  Congressman Adam Putnam of Florida has been one of the stars of the Bush era Republican Party.  At the tender age of 32, he rocketed to the top of the GOP‘s leadership ranks, ending up as the number three Republican in the House.  Well, this weekend, Mr. Putnam announced that he is quitting, he is leaving Congress to go run for agriculture commissioner in the state of Florida.  That makes Mr. Putnam at least the fourth incumbent Republican in the House to say that he is leaving instead of defending his seat.

In the Senate, at least four Republicans are quitting as well.  There is even speculation that Senator Mel Martinez of Florida may not wait until the end of his term to leave.  “Roll Call” reporting that Martinez may resign earlier and that Florida Governor Charlie Crist may appoint himself to that Senate seat.  I wonder if Governor Crist knows that everybody else is leaving the party.

(COMMERCIAL BREAK)

MADDOW:  You can call it paranoid pragmatism—encouraging hope for the best but also expectation of the worst.  You deserve every good thing, honey, but it‘s probably never going to happen.  That‘s what I tell my dog everyday while he stares at the aquarium and drools.

Less than two weeks ago, President Obama signed executive orders ordering the closing of Guantanamo, shutting down the CIA‘s so called “black site prisons” abroad, and banning illegal Bush era interrogation techniques.  The rule of law was back, except, some people, like me because sometimes I‘m paranoid, were convinced that it wasn‘t entirely true.

(BEGIN VIDEO CLIP, JANUARY 22)

MADDOW:  A big day today for the Constitution.  However, there is an asterisk on the rule of law, warm fuzzy here.

Wait a minute.  What does that mean?  Does that mean the CIA can still get their naked pyramids?

The question is: Do the Obama rules allow for the possibility of a creepy third option, some sort of continued detention without trial?

(END VIDEO CLIP)

MADDOW:  So, there I was on this show, sitting in this seat slumping like I do now, freaking out on camera right before I talked to our guest that night.  Our guest that night was Jameel Jaffer, who happens to be just the director of the ACLU‘s National Security Project.  And even as I was totally tweaking on the idea that Obama was pulling one over on us, that there was something awful in the fine print of the executive orders, Mr.  Jaffer who knows a bit about these things was not freaking out at all.

(BEGIN VIDEO CLIP, JANUARY 22)

JAMEEL JAFFER, ACLU‘S NATIONAL SECURITY PROJECT DIRECTOR:  Today is a great day for civil liberties.  In many ways, these executive orders are exactly what we have been waiting for.  And I think that it‘s worthwhile to take a moment just to recognize how far these policies are from where we were just a couple of days ago.

(END VIDEO CLIP)

MADDOW:  So, that was kind of embarrassing for me to be so paranoid in front of that guy who really knows when it‘s right to be paranoid.  But that brings me to this weekend‘s reporting in the “Los Angeles Times,” that President Obama‘s executive order actually allows the CIA to continue the Bush administration‘s policy of rendition.  The article cites anonymous current and former U.S. intelligence officials.

So, the new administration is going to continue to allow kidnapping and indefinite imprisonment and sending prisoners to countries that will torture them?  That‘s what I was worried about before but the civil liberties guys, the experts, keep telling me that it is really not like that.  So, what‘s with the anonymous leaking to the press from current and former intelligence officials trying to make it seem like Obama is keeping Bush‘s policies when I don‘t actually think that he is?

I need a talking down here.  Is Obama being undermined by Bush loyalists or others who want to make it seem like Bush‘s worst policies weren‘t so bad, that they are necessary, that they are being kept by the popular new guy.

Joining us to try to Talk Me Down now is Scott Horton.  He‘s a contributing editor for “Harper‘s” magazine.

Mr. Horton, thanks for joining us.

SCOTT HORTON, HARPER‘S MAGAZINE CONTRIBUTING EDITOR:  Great to be with you.

MADDOW:  So, my worry is that efforts are underway to falsely suggest that Obama is continuing the worst of Bush‘s terrorism policies.  Am I right to worry?

HORTON:  You are right to worry.  I mean, this has been going on for a while.  I mean, remember—we had a flurry of this when John Brennan‘s name was floated to be director of the CIA.  We again had unnamed and unidentified sources linked to the CIA saying that we were going to see continuity of policies, that we would all be surprised, we‘d see more continuity than change in the new regime and Brennan was presented as symbolic of that, in fact.

MADDOW:  So, is the idea that Bush‘s policies were somehow necessary, that Obama would end up adopting them once they got into office and that would sort of retroactively clear up Bush‘s unpopularity because these policies would be seen as not just associated with unpopular him but also with popular Obama?

HORTON:  I think that is right.  And, you know, the concern that seems to be in the background here on the part of some of these senior CIA officials and former CIA officials is over their scapegoating.  Concern that when the abuses of the Bush years are shown to the sunlight and there‘s a search for someone to prosecute or hold accountable, that it‘s going to be line officers of the CIA rather than policymakers.

But I think that‘s really a misplaced concern.  I don‘t think that‘s going to happen in the Obama administration.

MADDOW:  On the substantive claims about rendition specifically—as I understand it, rendition has been around for a long time, it‘s been around—it was around through the Clinton administration, through the Poppy Bush administration certainly, it was different though, it did not involve torture, it didn‘t involve disappearing people out of any recognized judicial system.  Those were part of extraordinary rendition under Bush, that‘s where the problematic stuff was.  And those things Obama has clearly banned.  Is that right?

HORTON:  You got it exactly right.  I think you cited the two major distinctions, the introduction of torture and the long-term detention of individuals outside of any accountability to law, no criminal charges, no arraignment, no courts.  The old rendition program goes back, you know, in some cases, even to the Reagan administration.

But think of the case of Eichmann at the end of World War II, the Nazi war criminal who fled to Argentina, who was making a life for himself there when the Israelis realizing that they wouldn‘t be able to get Argentinean authorities to cooperate with them in extradition, simply went in, snatched him, and brought him back to put him on trial in Jerusalem.  Well, that was a renditions case.  And I think that points to why even human rights advocates feel there is a limited role for renditions still.

MADDOW:  But not extraordinary rendition, it‘s an important difference.

Last quick question, Scott.  In the lame duck period, we heard about Bush staffers burrowing into jobs throughout the federal government.  Do you think that means just tactically that we should expect long-term Bush legacy polishing stuff like this from unanimous sources inside the government?

HORTON:  Well, exactly right.  I mean, I think we may see sabotage as well.  But certainly, there are going to be efforts to portray what Obama is doing as continuity rather than change to try and undermine Obama‘s message.

MADDOW:  Scott Horton from “Harper‘s” magazine—nice to see you. 

Thanks for coming in.

HORTON:  Great to be with you.

MADDOW:  Good to see you.

Wasted funds, fraud, a lack of accountability?  No, we are not talking about the banking bailout, we‘re talking about—well, that was language one official used to describe how we essentially set billions of American tax dollars on fire in the deserts of Iraq and called it contracting for rebuilding.  The good news about this story is that somebody finally might be trying to stop them from getting away with it.

Later on, I will be joined by Paul Rieckhoff from Iraq and Afghanistan Veterans of America to help us Scrub, Rinse, Repeat.

(COMMERCIAL BREAK)

MADDOW:  Remember TARP, the banking bailout?  Apparently, T-A-R-P, TARP stands for “throw a righteous party” because that‘s what the banks have been doing with the bailout money that we give them.  Missouri Senator Claire McCaskill and I will put on our angry populist hat to talk about that in just a moment.  Her angry populist hat is much more professional than mine.

First though, it‘s time for a couple of underreported holy mackerel stories in today‘s news.  An American has been kidnapped in Pakistan.  His name is John Solecki.  He‘s head of the United Nations refugee office in Quetta, Pakistan.

He was abducted on his way to work.  Police say gunmen ambushed Mr.  Solecki‘s U.N.-marked Land Rover.  They opened fire.  The Land Rover crashed.  The gunmen dragged Mr. Solecki into their vehicle and took off.  His driver was wounded in the attack and later died in hospital.

There has been a surge in kidnappings of foreign nationals in northern Pakistan.  But this was the first recent incident in this part of Pakistan, which is famous among Americans who pay attention to the old Taliban issue that just never seems to go away.  Do you remember Mullah Omar, he was the top guy in the Taliban when the Taliban were in chare of Afghanistan?  Mullah Omar is another one of those guys who was never caught.  He is thought to be hiding in Quetta along with other top Taliban leaders.

Pakistani security officials suspect that Mr. Solecki was kidnapped by pro-Taliban militants and that he maybe being held for ransom—very scary stuff.

Our second story, the new chairman of the Republican Party, Michael Steele, is undoubtedly still collecting accolades for his historic ascension to party chairman, the first time the Republican Party has ever been headed up by an African-American.  If that weren‘t enough of a reason to congratulate Mr. Steele, well, this weekend, we got one more.  Mr.  Steele now bears the distinct badge of honor of having been called a racist by David Duke.  Hah!

That‘s like—I mean, that‘s like being called a racist by David Duke.  There‘s no more hyperbolic analogy that that.  It‘s like being called “spooky‘ by Vladimir Putin, it‘s like having your hair cut criticized by Donald Trump.  What could be more ridiculous than the former grand wizard of the Ku Klux Klan calling you a racist?

Mr. Duke went on this rant on his Web site, proclaiming Michael Steele is not only a racist, but a, quote, “servile dog of Israel.”  Mr. Duke said, quote, “This will lead to a huge revolt among the Republican base.  As a former Republican official, I can tell you that millions of rank-and-file Republicans are mad as, H-E double hockey sticks, and aren‘t going to take it anymore.”

Right.  And they‘ll all start following you, David Duke.  Tell me where the line starts.  (LAUGHTER).

Congratulations again to Mr. Steele.  In addition to your achievements last week, this is an American honor to be sworn at incoherently by David Duke. 

And finally, Vice President Joe Biden is proving to be as an entertaining in the executive branch as he was in the United States Senate.  When it came time to swear in President Obama‘s senior staff, you might recall Biden joking that he was using notes because his memory is, quote, “not as good as Chief Justice Roberts,” who you will recall got Obama‘s oath wrong. 

That day, the vice president got the oath right, but notes were not enough today when Mr. Biden was called upon to swear in Secretary of State Hillary Clinton.  She was already sworn in once, but today, she got to do the ceremonial one for her family and friends.

Even though the crowd of Clinton supporters at the ceremony chanted, “Get it right!  Get it right!” before Biden started, Mr. Biden did proceed to flub the oath. 

(BEGIN VIDEO CLIP)

JOSEPH BIDEN, UNITED STATES VICE PRESIDENT:  Against all enemies foreign

and domestic -

HILLARY CLINTON, UNITED STATES SECRETARY OF STATE:  Against all enemies

foreign and domestic -

BIDEN:  That I will bear - excuse me - that I will bear true faith. 

H. CLINTON:  That I will bear truth faith -

(END VIDEO CLIP)

MADDOW:  Afterwards, Mrs. Clinton thanked her family members individually and paused.  When it was Bill‘s turn, she finally then found the right words to thank her husband. 

(BEGIN VIDEO CLIP)

H. CLINTON:  I am so grateful to him for a lifetime of all kinds of experiences. 

(END VIDEO CLIP)

MADDOW:  Awkward. 

(COMMERCIAL BREAK)

MADDOW:  Eighty-six million sports fans and anyone else looking for an excuse to eat lots of cheese-covered food watched that amazing Super Bowl last night. 

But it wasn‘t the munchies or even the game that really caught my attention.  It was a party.  This party took place just outside the Super Bowl stadium with 850,000 square feet of games and attractions.  It lasted for five days and like every good, totally over-the-top expensive outrageous party, it had a name.  In this case, it was the “NFL Experience,” reportedly cost millions of dollars paid for in part by Bank of America, which means paid for in part by you. 

This would be the same Bank of America that just received $45 billion in taxpayer bailout money.  See, it really is the Bank of America now, as in the bank made of American taxpayers‘ money.  And don‘t forget how the bank made of American taxpayers‘ money celebrated its first taste of bailout cash way back in October. 

They hosted a conference call with conservative activists in which Home Depot‘s cofounder and others laid out anti-labor plans, support Republican anti-labor candidates or else.  This was Bank of America hosting this conference call right before the election. 

(BEGIN AUDIO CLIP)

BERNIE MARCUS, HOME DEPOT COFOUNDER:  If a retailer has not gotten involved in this, if he has not spent money on this election, if he has not sent money to Norm Coleman and all these other guys, should be shot, should be thrown out of their (EXPLETIVE DELETED) jobs. 

(END AUDIO CLIP)

MADDOW:  Well, so much for that plan.  So there is Bank of America, there‘s Morgan Stanley, which received $10 billion from the taxpayers and cut 5,000 jobs last year.  They held a retreat at a lavish five-star Florida resort just last month.

And this weekend, former Citigroup CEO Sandy Weill says that he is giving up his access to Citigroup‘s jet.  Of course, this comes alongside reports he and his family flew on that jet to a Mexican resort for New Year‘s.  That‘s on top of Merill Lynch CEO John Thain‘s $1.2 million office remodeling project and news that Wall Street bigs took in more than $18 billion in bonuses for 2008.  That‘s sixth best bonus-year ever in a year in which Wall Street probably would have been better off had it been on fire. 

As the second half of bailout money goes to the banks, President Obama said this weekend, quote, “We will ensure the CEOs are not draining funds that should be advancing our recovery.  But can the government ensure that?  Because this really is about the trust of the American people. 

And so far, the story of the bailout money has too often been banks using it for their own gain - using money for their own gain that was meant for the good of the country. 

Joining us now is Sen. Claire McCaskill of Missouri.  She‘s a member of the Commerce Committee.  Sen. McCaskill, kind of you to come back on the show.  Thanks for being here. 

SEN. CLAIRE MCCASKILL, (D), MISSOURI:  Thank you, Rachel. 

MADDOW:  Last week, you took to the Senate floor to talk about executive pay and bonuses.  You said you were mad.  You described Wall Street executives as idiots.  I understand your passion on this subject, but what can practically be done to recoup money that the banks have already spent? 

MCCASKILL:  Well, we‘ve got to change the rules.  We‘ve got to make them understand with a law that as long as they are on the hook to taxpayers, there is a different reality.  It‘s not the old days.  It is a new day, and that day means that until they pay back taxpayers, I believe that no one at their companies should make more than the president of the United States.  And that‘s the law I‘ve introduced. 

And I intend on pushing that or something similar to get that law enacted so these guys understand that they can‘t keep compensating themselves when they are this close to extinction and the taxpayers are keeping them alive with their money. 

MADDOW:  Any support from your colleagues in the Senate thus far on the $400,000 proposal? 

MCCASKILL:  You know, there is support, not just with my colleagues.  But it has been amazing the response we‘ve gotten from the public.  Who would know?  Who would have figured that a little bit of common sense on the Senate floor would get this kind of reaction that our phones are ringing off the hook?  Our server is overloaded.  People all over the country saying, “Go get them.  Go get them.  You said exactly what we‘re thinking.” 

So I think that we have tapped into a vein.  And after all, we work for the American people.  We don‘t work for anybody else but the people that sent us here.  And I think we will get something done on this. 

MADDOW:  Now, the second $350 billion of the TARP money has been released.  Will it have better oversight?  Will it have more strings than the first half, or is that still a work in progress now? 

MCCASKILL:  I mean, I‘ve got to be honest.  I think it still is a work in progress.  I think it is going to be better.  I think this administration understands the anger that is out there. 

And really, Rachel, the problem is, we can‘t recover in this country until the American people have confidence.  And if you are so damn mad, you can‘t think straight.  It is hard to be confident of anything.  So we‘ve to get this fixed or people are not going to feel good about our economy and they‘re not going to start behaving in a way that will allow us to recover. 

MADDOW:  Former Labor Secretary Robert Reich has recommended mandating that 90 percent of the money that is given to the banks go toward issuing loans.  That would be a draconian string.  Would you support something like that? 

MCCASKILL:  Well, I‘m a little worried about that, because I think we got into this mess in the first place by people making loans they shouldn‘t have made.  I think that‘s how we got here. 

So - and the only way banks make money is to loan money.  So I don‘t think we need to be micromanaging what loans they are making, but we do need to micromanage what salaries they are paying themselves and what bonuses they are taking especially since it is very clear that the concept of bonus should not apply to a bank that‘s in fact ran itself into the ground with bad decision-making. 

MADDOW:  I think that, as Americans, we are sort of hard-wired to believe that businesses - all sorts of private industry - ought to be - could probably run themselves better than any government agency rather than anybody works in the public sector can tell them how to do it. 

That said, I sort of feel like my pet bunny could do a better job running the bank right now than the people who lost this many trillion dollars with the ridiculous non-commonsensical things that they did in the financial industry in the past year.  I sort of feel like nationalizing the banks at this point might be the safest thing to do. 

MCCASKILL:  Well, I‘m not sure that‘s the answer.  But it is hard to understand why there wasn‘t a turnover in the leadership in these institutions.  I mean, generally, in America, when you flame out, you lose your job.  But in this instance, the people who got us in this mess, by and large, remain in control of these very large financial institutions that control our destiny in terms of turning around the credit market. 

So that is another problem with confidence.  I would think that there would be a gut-check here at these companies and with their board of directors.  And maybe they should say, “Hey, you know, you are a nice guy.  But you know, we‘ve got to move on because people don‘t have confidence in us anymore.” 

MADDOW:  Sen. McCaskill, one last question -

MCCASKILL:  Yes. 

MADDOW:  We mentioned earlier that the president is going to be nominating one of your Senate colleagues, Republican Senator Judd Gregg to be Commerce Secretary.  Do you have any thoughts on that?  And is the Secretary of Commerce one of those jobs for which Democrat versus Republican is not an important criteria? 

MCCASKILL:  Well, I mean, I think the hard thing about this, Rachel, is that this is Barack Obama being as disciplined as president as he was when he was a candidate.  His message was sincere.  If we don‘t change the culture from Democrat versus Republican to public policy that we can believe in, then we are in trouble. 

And I think, in many ways, Judd Gregg will be a strong Secretary of Commerce if, in fact, that is the announcement tomorrow.  And we‘ve got to get away from this idea that it is D versus R, because frankly, we‘ve tried that and it didn‘t work so well regardless of whether the D‘s are in control or the R‘s are in control. 

I think we‘ve got to continue to work on that compromise that brings everybody together, because that‘s how we‘re going to tackle the really hard stuff, the entitlement programs, Social Security - all the things that we‘ve got to fix for your grandchildren, my grandchildren, everybody‘s grandchildren to have a shot at any kind of prosperity 20, 30, 40 years down the lines. 

MADDOW:  I will say looking back at economic policies over my lifetime, if I had to pick ones when the D‘s were in charge versus when the R‘s were in charge, I would pick the D‘s.

MCCASKILL:  We‘re still in charge. 

MADDOW:  Yes.

MCCASKILL:  We‘re going to hear some dissenting voices, but until Barack Obama abandons his principles that are progressive principles, then I think we all need to kind of keep our powder dry and be supportive of his efforts to work across the line. 

MADDOW:  Senator Claire McCaskill in Missouri, so great to have you on the show.  Thanks for making time tonight.

MCCASKILL:  Thank you very much. 

MADDOW:  I will actually thank Senator McCaskill twice tonight.  She sponsored the creation of a commission to investigate the massive misuse of billions of federal dollars in Iraq.  So thanks to Senator McCaskill for that and to other members of Congress who made that happen. 

Someone who had seen the Iraq boondoggling firsthand.  My friend Paul Rieckhoff from Iraq and Afghanistan Veterans of America will be joining us next to help us scrub, rinse, repeat. 

But first, one more thing about the thrilling conclusion of last night‘s Super Bowl.  Tucson, Arizona is presumably Cardinal country - Arizona and all that, which means an enormous percentage of Comcast Cable‘s 80,000 customers in Tucson were glued to their TV machines especially late in the dramatic game when the Cardinals miraculously took the lead. 

And then, with just over 2.5 minutes left in the game, all over Tucson, porn.  Pornography - pornography on the TV - 80,000 TV sets.  People completely engrossed in the best Super Bowl game maybe ever featuring the home team, and then porno for almost 30 seconds.  The company says they are, quote, “mortified by the isolated malicious act.”  And they said they are conducting a full investigation.  The company was mortified?  I‘m mortified and I was 2,500 miles away from Tucson.

(COMMERCIAL BREAK)

MADDOW: Say hello to A.G. Eric Holder, confirmed tonight by a Senate vote of 75 to 21.  Senate Republicans held up the nomination for weeks and weeks.  It has been 63 days since Mr. Holder was nominated for this job.  There remain three big vacancies in Obama‘s team. 

For Commerce Secretary, we are just now hearing of the nomination of Republican Judd Gregg.  We have long had a Labor Secretary nomination but we are still without a Labor Secretary.  Representative Hilda Solis is in confirmation limbo as Republicans fight to keep a strong pro-labor figure from heading the Labor Department, or at least to delay her confirmation uncomfortably long to show their displeasure. 

If only it were the 1880s, GOP could just put a Pinkerton in the job. 

(COMMERCIAL BREAK)

MADDOW:  It was one of the most productive committees in Senate history, saving the U.S. taxpayers billions of dollars - the Truman committee, named after its progenitor, then-Senator Harry S. Truman.  In 1941, Truman led an investigation into reports of mismanagement, waste and corruption among defense contractors who had received $10 billion in war build-up congressional appropriations the year before. 

In 1943, Sen. Truman‘s work put him on “Time” magazine‘s cover for the first time, and for the next five years, the committee Truman established held over 400 public hearings that issued more than 50 reports and they saved an estimated $178 billion of today‘s dollars. 

Perhaps, most importantly, it made one thing quite clear to war profiteers, that compromising national security for personal profit was tantamount to treason.  With historical hindsight, such an investigation seems to be a no-brainer when billions of U.S. dollars and thousands of U.S. lives hang in the balance. 

Yet, shockingly, even though the U.S. has now spent about $100 billion on military contracts in Iraq, we have not had committee like we had under Truman until now. 

It‘s time for the RACHEL MADDOW SHOW‘s special series on President Obama‘s cleanup mission, “Scrub, Rinse, Repeat,” because this is going to take a while. 

Today, the recently formed commission on wartime contracting held their first public hearing in the same Senate hearing room that was used by the Truman Committee.  Unfortunately, the location was not the only similarity.  Stuart Bowen, the top U.S. official overseeing Iraq‘s reconstruction says the largest single country relief and reconstruction project in U.S. history, most of it done by private U.S. contractors, is full of wasted funds, fraud and lack of accountability. 

Well, at least, we‘re learning from our mistakes, right?  Actually, no.  Despite the failures in Iraq, Bowen says we are making many of the same mistakes again, this time in Afghanistan. 

Joining us now is Paul Rieckhoff, executive director and founder of Iraq and Afghanistan Veterans of America.  He‘s the author of “Chasing Ghosts,” a really good memoir about his time serving in Iraq.  Paul, thanks for coming back on the show.  

PAUL RIECKHOFF, EXECUTIVE DIRECTOR AND FOUNDER, IRAQ AND AFGHANISTAN

VETERANS OF AMERICA:  My pleasure, Rachel.  Good to be with you.

MADDOW:  Does this count as a Truman Committee-type effort?  Is it worthy of that?

RIECKHOFF:  It is.  I mean, it is really ground breaking, and this is one of our legislative agenda priorities for 2007.  So it‘s good to see it come full circle led by Claire McCaskill who you just on, Sen. Jim Webb, a decorated Vietnam veteran. 

We need to get a handle on all the fraud, waste - all of this almost criminal, sometimes criminal, behavior going on inside of Iraq.  And this report has already revealed that about $3 billion - and that‘s probably on the conservative side - have been completely wasted.  That‘s $3 billion that could have gone to body armor.  It could have gone to new Humvees.  It could have gone to the G.I. Bill.  Every dollar wasted on Iraq could have gone directly to the troop on the ground or a veteran coming home.

MADDOW:  And that‘s actually - $3 billion is more than the Bush administration originally planned to spend on Iraq reconstruction at all, and that‘s the amount that‘s was effectively set on fire.  What was your experience serving in Iraq with private contractors?  Obviously, they are providing needed services but they‘re doing things that troops used to do, right? 

RIECKHOFF:  Right.  They‘re everywhere.  I mean, they are pushing supplies out into the field.  They‘re delivering food.  Sometimes, they‘re providing security.  The involvement of contractor is an unprecedented level.  They‘ve never been this involved, this deep into what we do on the ground in the combat zone. 

So I saw them doing all those things and I remember tons of cash being thrown around.  I mean, there was cash in the green zone.  Guys would come in from the CPA and hand off a bucket of cash and say, “Go pay all the people at the water treatment plant.” 

Anybody who have been on the ground, especially in ‘03, ‘04, saw that as the security situation deteriorated - especially, this stuff was rampant.  So there were a lot of people on the ground making money.  And already, there are 154 criminal investigations open right now.  So those need to be followed up on.  People need to be held accountable and people will probably go to jail.  

MADDOW:  It‘s the opportunity cost of that money being wasted rather than being spent if only on equipping our troops who were there.  But it‘s also this issue of whether there is a national security liability and us being dependent on people who can‘t - and companies that can‘t really be ordered in the same way that American troops can be.  

RIECKHOFF:  Right.  You‘ve got to have combat engineers.  You can have other military folks doing the same things that these contractors are doing.  It would take us a while to wean away from them, and I hope that we‘ll see that happen in Afghanistan as we ship troops over there. 

But the level of involvement is really unprecedented.  They are doing a lot of different things.  And there‘s also a hit on morale here.  If you‘re a young platoon leader or young sergeant in the Marine Corps and you‘re making $50,000 a year.  And there‘s a KBR contractor doing a similar job making $125,000 or $150,000 a year, you‘re going to ask yourself, “Does my country value me less than that person?”  What message does that send to our people in uniform?  It does cause a tremendous amount of tension within the services.  

MADDOW:  Do you think that veterans groups would consider supporting some sort of regulation on contractors serving on war zones in terms of their pay, in terms of them not being - those jobs not essentially siphoning off some of the best-trained, most valuable members of our own military? 

RIECKHOFF:  Absolutely.  I mean, you‘re definitely seeing them poach people from the special operations community, folks that have millions of dollars invested in their training.  Navy Seals and green berets are often enticed away from the military over to the black quarters in KBR because they can make more money.  So it‘s really eroding the strength of some of our most-prized military assets.  So I think veterans groups could definitely support that.  

MADDOW:  Paul Rieckhoff, executive director and founder of Iraq and Afghanistan Veterans of America.  How is the “Community of Veterans” Web site going? 

RIECKHOFF:  It‘s going well.  It‘s going well.  If you need help, if you‘re a veteran coming home, check it out - “CommunityofVeterans.org.”  Thanks.

MADDOW:  It‘s sort of a Facebook for veterans.  

RIECKHOFF:  Absolutely. 

MADDOW:  Thanks, Paul.  Great to see you.

RIECKHOFF:  Thanks, Rachel.  My pleasure.

MADDOW:  Coming up on “COUNTDOWN,” Keith talks to Representative Barney Frank about his plans to bring banking executives before Congress.  

And next on this show, I get just enough pop culture from my friend, Kent Jones. 

Tonight, groundhog, the revenge.  This time it‘s personal.  

(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.  Of course, big game last night.  Of course, I‘m referring to Puppy Bowl 5 on “Animal Planet.”  However, the action was disrupted by a streaker.  You know, if we don‘t get some oversight, this is the kind of thing that could make a mockery of Puppy Bowl. 

Next, the biggest snowfall in 18 years in London yesterday, idling the buses and subway trains and basically mucking everything up.  Dodgy infrastructure, it‘s not just for Americans anymore. 

Next, here is - I want to put the now-famous hat Aretha Franklin wore at Obama‘s inaugural into the Smithsonian for posterity.  So in the future, people will go to the museum and say to their kids, “You know, back in 2009, everyone wore hats like these.  Everyone.”  

JONES:  This is how we usually picture the first. First Lady, Martha Washington.  But now, based on new research, forensic anthropologists they have produced this portrait about what they think Martha looked like in her mid-20s.  So are you a Tory?  Nice. 

Finally, today is Groundhog Day where a marmot forecasts our weather.  Here‘s Staten Island Chuck not letting New York City Mayor Mike Bloomberg bribe him out of his hutch to see his shadow.  Fight the power, Chuck.  Don‘t believe the hype.  I got your third term right here, pal.  Rachel?

MADDOW:  Spectacular.  He actually looks a little afraid.  

JONES:  Oh, don‘t mess with a groundhog.  You just don‘t.

MADDOW:  Did you see the Captain Sullenberger Library Book story today? 

JONES:  No.  What‘s that?

MADDOW:  Sully Sullenberger landed the plane on the Hudson January 15th.  Apparently, in the cockpit with him when the plane went down, was a library book that he had checked out a book from the library at Cal State, Fresno. 

And after he, you know, saved the world, he called the library and asked for an extension and a waiver of his overdue fees because the book was, you know, on the plane in the Hudson.  Fresno State Library officials, according to the Associated Press, are waiving all fees even the lost book fees and they‘re placing a template in the replacement book dedicating it to him.  It was, of course, a book on professional ethics.  

JONES:  Oh -

MADDOW:  I know.  It‘s too good to be true.

JONES:  Fantastic.

MADDOW:  Thank you for watching tonight.  We will see you here tomorrow night.  “COUNTDOWN” with Keith Olbermann starts right now.  Good night. 

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

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