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'The Rachel Maddow Show' for Tuesday, July 14

Read the transcript to the Tuesday show

Guests: Dahlia Lithwick, Lawrence Wilkerson, John Ralston, Elizabeth Warren, Kent Jones

RACHEL MADDOW, HOST:  Good evening, Keith.  I have to tell you, I‘ve always been terrified by the idea of mermaids.  So.

(LAUGHTER)

(CROSSTALK)

KEITH OLBERMANN, “COUNTDOWN” HOST:  Take 15 seconds and explain this to me.  Why?

MADDOW:  Mermaids are always just one of those things that I felt like there‘s something deeply, deeply terrifying about them.  Everybody else thinks they‘re mystical and nice.  I‘ve always felt threaten by the idea of mermaids.  I‘m with Brownback on this.

OLBERMANN:  Ha!

(LAUGHTER)

MADDOW:  Thanks.

OLBERMANN:  You‘re welcome.

MADDOW:  All right.  Well, most awkward segue ever.

Hey, thanks for tuning in.

Colonel Lawrence Wilkerson will be here this hour to help us try to unravel the mystery of what exactly Dick Cheney was up to with the CIA program that he allegedly directed should be hidden from Congress.

There‘s also incriminating news tonight about Governor Mark Sanford.

There‘s some stunning news about Senator John Ensign of Nevada.

And there‘s some outrageous news about Goldman Sachs.

Elizabeth Warren will be here with us this hour as well.

That‘s all coming up.

But we begin tonight with what is starting to feel like the Jeff Sessions show—even though it‘s supposed to be the confirmation hearings for Supreme Court nominee Sonia Sotomayor.  In the absence of any real drama, suspense, about whether or not Judge Sotomayor will actually be confirmed to the Supreme Court—it sort of seems like an unavoidable conclusion that she will—the hearings are instead turning into a showcase for the Senate, rather than a showcase for her.

The Republican opposition to Judge Sotomayor is still steering largely clear of her judicial record, except for one case, Republicans have characterized as a pro-affirmative action ruling and they‘re criticizing that one a lot.  Beyond that, the opening statements and questions from the committee, seven Republicans, and particularly from their leader, Jeff Sessions, have been much more revealing of the political beliefs of Republican senators than they have been of the judicial beliefs or temperament of this nominee.

Who you will be surprised to hear is not a person named Miguel Estrada.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  We who would have picked Miguel Estrada.

SEN. ORRIN HATCH ®, UTAH:  Miguel Estrada would be a U.S. circuit judge today.

SEN. JEFF SESSIONS ®, ALABAMA:  I said I had a letter earlier from Miguel Estrada.

HATCH:  He‘s a brilliant, universally-respected lawyer.

GRAHAM:  He was a Honduran immigrant.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA:  I‘m puzzled as to why Mr.

Estrada keeps coming up.

GRAHAM:  And we all would have voted for him.

SESSIONS:  The Miguel Estrada case.

GRAHAM:  I don‘t think anybody on that side would have voted for Mr.

Estrada.

SEN. PATRICK LEAHY (D), VERMONT:  Mr. Estrada is not the nominee here.

(END VIDEO CLIP)

MADDOW:  No, Mr. Estrada is not the nominee.  Miguel Estrada was rejected by the Senate after George W. Bush nominated him for a federal judgeship.  Like lots of other people were rejected by the Senate after being nominated by George W. Bush—dozens of people, in fact.

So, why is he the one they keep bringing up?  Among all the many failed George W. Bush nominees, what is it about Miguel Estrada in particular that warrants so much comparison from the Republicans of him and Sonia Sotomayor?  Hmm.  A mystery.

Maybe this next revealing moment from the hearings today will provide us a clue.

(BEGIN VIDEO CLIP)

SESSIONS:  The circuit voted and you voted not to reconsider the prior case.  You voted to stay with the decision of the circuit.  And in fact, your vote was the key vote.  Had you voted with Judge Cabranes, himself of Puerto Rican ancestry, had you voted with him, you could have changed that case.

(END VIDEO CLIP)

MADDOW:  I‘m sorry, what‘s relevant about Judge Cabranes in this decision?

(BEGIN VIDEO CLIP)

SESSIONS:  Judge Cabranes, himself of Puerto Rican ancestry.

(END VIDEO CLIP)

MADDOW:  Do you see the important point that Jeff Sessions has just drilled down to here?  It‘s very subtle.

(BEGIN VIDEO CLIP)

SESSIONS:  Judge Cabranes, himself of Puerto Rican ancestry.

(END VIDEO CLIP)

MADDOW:  OK.  You see?  Judge Cabranes is totally Puerto Rican—so is Judge Sotomayor.  And yet, she did not vote the same way as Judge Cabranes, the other Puerto Rican.  See what I‘m getting at here?  Yes.

When Jeff Sessions was himself trying to become a federal judge back in 1986, he, at that time, in those confirmation hearings, admitted to calling a white lawyer a, quote, “disgrace to his race,” because that lawyer represented black clients.  Now, that same Jeff Sessions is the Republican Party‘s standard bearer on who‘s qualified to be a judge or not, and he‘s making very clear what he sees when he looks at a nominee like judge Sonia Sotomayor—what about her most predicts how she would vote as a judge in his mind; who he sees as her peers, the appropriate people to compare her to.

(BEGIN VIDEO CLIP)

SESSIONS:  The Miguel Estrada case.  I said I had a letter earlier from Miguel Estrada.  He was nominated by President Bush.  Had you voted with Judge Cabranes, himself of Puerto Rican ancestry, had you voted with him, you could have changed that case.

(END VIDEO CLIP)

MADDOW:  There was a moment today that was not just about race, though.  Senator Sessions did go out on a limb today and suggest that Judge Sotomayor could also be compared, unfavorably, of course, to another female judge.  And in so doing, we got today‘s inadvertently revealing Republican moment number three.

(BEGIN VIDEO CLIP)

SESSIONS:  I believe in Judge Cedarbaum‘s formulation.  And she said, and you disagreed, and this was really the context of your speech, and you used her harsh statement as sort of a beginning of your discussion.  And you said, she believes that a judge, and no matter what their gender or background, should strive to reach the same conclusion, and she believes that‘s possible.  You then argued that you don‘t think it‘s possible in all, maybe even most cases.

(END VIDEO CLIP)

MADDOW:  One rule of thumb when you‘re choosing someone to be your ally against somebody else, make sure your chosen ally agrees with you.  And isn‘t say, sitting in the hearing room in support of the person you‘re trying to use them to attack.

(BEGIN VIDEO CLIP)

JUDGE SONIA SOTOMAYOR, SUPREME COURT NOMINEE:  My friend, Judge Cedarbaum, is here this afternoon.  And we are good friends, and I believe that we both approach judging in the same way, which is looking at the facts of each individual case and applying the law to those facts.

(END VIDEO CLIP)

MADDOW:  In fact, Judge Sotomayor‘s one-time mentor and long-time friend, Judge Miriam Cedarbaum, was in the hearing room.  She then tag-teamed that attempted Jeff Sessions‘ smackdown by telling “The Wall Street Journal,” quote, “I don‘t believe for a minute that there are any differences in our approach to judging and her personal predilections have no effect on her approach to judging.  We‘d both like to see more women on the courts.”  Which, I guess, means that Senator Jeff Sessions should stop quoting that particular judge as a means of attacking Sotomayor.

The Sotomayor hearings are expected to go on for two more days, which may or may not mean two more days of Republican Party public implosion on the issue of race.

Joining us now is Dahlia Lithwick.  She‘s legal correspondent and senior editor for Slate.com.  She‘s been covering the nomination hearings from Washington.

Dahlia, thanks for coming back on the show tonight.

DAHLIA LITHWICK, SLATE.COM:  Hey, Rachel.  Thank you for having me.

MADDOW:  You got to watch all of these rounds of questions in person today.  Yesterday, you said, after opening statements, that it seemed like the opposition strategy against Sotomayor was really, in a basic sense, about issues of race.  Was it day two of that today?

LITHWICK:  A lot of it really was.  I was surprised, actually, how many times we heard the “wise Latina woman” thing came up.  I thought, yes, maybe, we‘ll go to that well once, maximum twice, but we went there many, many times today.

And many, many times, what we were told is, sure, you have this impressive 17-year record as a judge and we can‘t find much to complain about, but here‘s what we know.  We know that your speech, your “wise Latina” speech somehow gives us a truer sense of who you really than that entire record.

So, it‘s always sort of trying to bifurcate who she is holding herself out to be and who she really is because of this one sentence.  So, it‘s interesting.  It‘s sort of a way of framing it as this is the real issue and everything else is just kind of wallpaper.

MADDOW:  I was happy today, though, because there were a few questions about Sotomayor‘s judicial record other than the Ricci case, a few questions that weren‘t about speeches.  Senator Grassley asked her about eminent domain.  Senator Kyle asked her about a Second Amendment case.

What were those lines of questioning like?  Did those raise substantive issues without a good back-and-forth?

LITHWICK:  They were both very funny colloquies, Rachel, because in both cases, you have her record, which is pretty modest in both the guns‘ case that they talked about and the taking case they talked about.  She didn‘t get to the big issues.  She looked at a much narrower issue.

And so, in both these cases, you have, you know, Grassley saying to her, why didn‘t you get to the big issue from the Kelo—you know, the famous Connecticut eminent domain case, why didn‘t you get to that?  And she would say, well, the guy just didn‘t file his appeal on time.  It was a question of statue of limitations.  I didn‘t have to get to the big constitutional questions.

Same thing in the guns‘ case.  You have this angry, angry Republican saying to her—you know, Orrin Hatch is saying, “Why didn‘t you get to this big, huge issue in Heller?  You know, why didn‘t you get to whether the Second Amendment is incorporated against the states?”  And she says, “Well, because the Supreme Court told me not to.  In Heller, the Supreme Court expressly said, we‘re not getting to this issue.  So, I‘m not going to get to this issue.”

So, you have this weird inversion where they‘re like, why aren‘t you more activist, Judge Sotomayor?  And it was sort of surreal, when they do get to her cases, it‘s to say: you shouldn‘t be so humble and modest.  That‘s so John Roberts.

MADDOW:  Well, watching on TV today, it is—I mean, even though there‘s sort of a foregone conclusion here, this is riveting.  It‘s a Supreme Court nomination hearing, and the way that it‘s covered on TV, is that, you get close-ups of Sotomayor at the table, at the witness table, and you got close-ups of the senators while they‘re talking, and you can sort of get into the drama back and forth.

But I wonder, you‘re there and you‘ve been there in person.  And seeing who all is in the room, and not just who‘s talking at any one second, does that give all of this a different feel?  Either the combativeness that we saw especially, for example, of Lindsey Graham today and Jon Kyl today, or specifically the talk about race and prejudice—does it have sort of a different feeling when you‘re in the room?

LITHWICK:  You know, I‘m glad you asked that.  I have the sense that this is playing really different at home than it is in the room.  Because you need to understand, the first couple of rows behind her—you can probably see this on TV—they are her family.  They are her supporters.  They are her friends.

There are a lot of people who are not white men sitting directly behind her.  And there are many, many reporters, for instance, who are only Hispanic reporters, working for Hispanic publications.

And so, things that might play really well if you were just talking to Joe the Plumber or Sarah Palin, just kind of elicit a little bit of a sense that—of a bridge too far.  And I thought her little exchange with Lindsey Graham, where he was saying, “You‘re a big bully, and I don‘t think like bully judges,” and, you know, telling her that maybe she needed a little time for reflection and the sort of just the very, “You go to time out, young lady, and really think about your ‘wise Latina‘ comments.”

The way it played, at least, among the people around me was like, huh?  You know, do you really want to go there?  So, I don‘t know.  I mean, I think Graham did what he had to do and, you know, he does it with his buttermilk smile and he‘s so sweet and lovely that he can get away with it.  But I don‘t know that they understand that they just can‘t talk to Joe the Plumber anymore.

MADDOW:  Dahlia Lithwick, chief legal correspondent and senior editor at Slate.com, and our connection to the hearings today, on these last couple of shows—thanks very much for joining us tonight, Dahlia.  I really appreciate it.

LITHWICK:  Thank you.

MADDOW:  Have you noticed this week that we haven‘t heard beep from former Vice President Dick Cheney?  After doing interviews with every conceivable news outlet, not named THE RACHEL MADDOW SHOW, the former vice president has been very, very quiet since it has been alleged in Washington this week that he personally ordered that Congress not be informed about some post-9/11 program that is yet to be described.

Colonel Wilkerson was chief of state to the Secretary of State Colin Powell during the first term of the Bush administration.  He will join us next to talk about this story.

Stay with us.

(COMMERCIAL BREAK)

MADDOW:  It has now been five full days since we first got news that the CIA had been operating some sort of secret program that it was actively hiding from the Congress.  It‘s been three days since that allegation that the CIA was hiding that program at the direction of former Vice President Dick Cheney—in what would appear to be a direct violation of federal law.

Since the story broke, there has been lots of speculation about what the secret program was that Cheney didn‘t want Congress to know about.  And while all the speculation is really titillating and makes for great headlines, it does seem—when you start to look more closely at it—that there‘s something not quite right here, at least something is yet unexplained.

Here‘s what we‘ve seen: “Newsweek” says, “CIA squads to track and kill al Qaeda terrorists.”  “The Wall Street Journal” says, the program “was looking for ways to capture or kill al Qaeda chieftains.”  “New York Times” says, “CIA Had Planned to Assassinate al Qaeda Leaders.”  Liz Cheney, her own very special voice of America, described the program as “ways that we could capture or kill al Qaeda leaders.”

The reason that doesn‘t make sense is because this strategy of capturing and killing top leaders of al Qaeda, it‘s not exactly classified.  It‘s not exactly a secret plan.  That‘s the war on terror.  That‘s the war on terror strategy we heard articulated again and again and again by the Bush administration.

(BEGIN VIDEO CLIP, MARCH 23, 2004)

GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES:  We have been chasing down al Qaeda ever since they attacked us.  We‘ve captured or killed two-thirds of their known leaders.

Hundreds of Taliban and al Qaeda fighters have been captured or killed.

Two-thirds of known al Qaeda leaders have been captured or killed.

(END VIDEO CLIP)

MADDOW:  Capturing or killing members of al Qaeda, it‘s not some secret operation.  It‘s essentially the simplest construction of the whole idea of the war on terror.

So, this secretive “don‘t tell anyone” program that Leon Panetta shut down immediately upon learning of it last month had to be something other than just capturing and killing members of al Qaeda.  Was it capturing or killing them in inconvenient countries, like countries that we are allies with?

Well, technically, Pakistan is our great ally in the war on terror, but we kill people there on a really regular basis.  For example, June 23rd, “U.S. drone fires more missiles into Pakistan.”  July 4th, “U.S.  Drone attacks said to kill 17 at Taliban outposts in Pakistan.”  July 8th, “U.S. Drone Attack Kills 12 in Northwest.”

How many times have you read headlines about drone attacks killing Pakistani civilians while we were targeting al Qaeda suspects in that country?  If killing al Qaeda suspects inside the borders of our ally, Pakistan, doesn‘t even make the front section of the newspaper anymore, then a plan to kill al Qaeda suspects inside the borders of other countries hardly seems like something that would stop the presses in Washington the way that this program has and that would send the director of the CIA all but sprinting to Congress after calling the program off as soon as he heard about it.

Joining us now is retired Army Colonel Lawrence Wilkerson.  He‘s former chief of staff for Secretary of State Colin Powell.  He served during the first term of the Bush administration.

Colonel Wilkerson, thank you very much for coming back on the show. 

It‘s nice to see you.

COL. LARRY WILKERSON, RET., U.S. ARMY:  Thank you, Rachel.

MADDOW:  We‘ve heard all this speculation, all these leaks about what this program might have been.  You were there in the first term of the Bush administration.  Does any of this ring any bells in terms of what you knew about it at that time?

WILKERSON:  It does ring some bells.  We—very early on, after 9/11, at the State Department—learned from our ambassadors in the field that there were teams being dispatched to their cities, to their countries, and these teams were clandestine and they were essentially aimed at capturing al Qaeda leaders or al Qaeda affiliates and interrogating them and so forth.

So, the fact that it might have gravitated over to the CIA or the CIA might have joined in, which is something that happens a lot these days with Delta Force and other special operators is no surprise to me.  But I take your same surprise—isn‘t that what we‘re supposed to be doing?

What I suspect has happened is what began to happen while I was still in the government, and that was we‘re killing the wrong people—and we‘re killing the wrong people in the wrong countries.  And the countries are finding out about it, or at least there was a suspicion that the countries might find about it—find out about it, and so it was shut down.  That‘s my strong suspicion.

MADDOW:  When you, at the time, attempted to find out what was going on or at least to get answers to these ambassadors that you were hearing from around the world—how much were you able to find out about who these operators were, what their goals were, and who might have been—who might have been running that program?

WILKERSON:  Well, at that time, Secretary Powell, of course, called Dr. Rice.  She was the national security adviser and got virtually nowhere, and so, he wound up calling Secretary Rumsfeld.  And after some hemming and hawing—which was Rumsfeld‘s forte—he finally admitted that he had dispatched some of these teams.

I don‘t think we ever got a handle on every place he dispatched them.  I think he‘d sent them to the Horn of Africa, to Maghreb.  He‘d probably sent them to Afghanistan and Pakistan.  He probably sent them to Indonesia, Southeast Asia in general, and he was after everyone from Abu Sayyaf to al Qaeda.  As Doug Feith points out in his book, “War and Decisions,” they were taking on every terrorist they could get their hands on.

So, I don‘t think, at State, we ever knew the full range of his deployments.  And in most cases, I think it was Delta Force.  It was probably weren‘t directly through the Special Operations Command commander in Tampa, didn‘t go through the combatant regional commanders.  In other words, they didn‘t even know it was happening either.

They didn‘t go through the ambassadors; didn‘t even go through the CIA station chief, until later when I believe the CIA became involved in it.  And then, of course, it became both a military and an intelligence agency operation.

MADDOW:  The whole reason that this has turned into a huge story is because of the claims from people with knowledge of what happened inside those intelligence committee meetings at the end of June that Leon Panetta came in and said, “I didn‘t know about this program until 4 ½ months into my tenure at the CIA.  It is now over and it was kept from Congress covertly on direct orders from Vice President Cheney.”

We are told that that‘s what Leon Panetta said.  And so, there is a degree of hearsay here.  But it seems to be confirmed by multiple sources.

If this is something where we‘re talking about Delta Force operators, we‘re talking about military personnel doing this sort of thing, how does it fit in that Dick Cheney would be ordering the CIA not to tell Congress about it?  That‘s the part I don‘t get.

WILKERSON:  Well, I think that‘s pretty clear.  If you know the history of the CIA, you know that presidents have told the CIA to do things since 1947 that the CIA then lied to Congress about.  It‘s laughable that the CIA has never lied to Congress.  They lie to Congress on a routine basis.  It‘s part of their portfolio.

However, it‘s usually the president—in fact, I won‘t say usually—it‘s always been the president who directs the CIA to do these things and then takes the fall if—like Eisenhower sending U2s over the Soviet Union, suddenly Gary Powers is shut down and Eisenhower‘s plans and his activities are revealed and he has to take the blame for it.  This is unprecedented.

Now, we have a vice president who has apparently authorized these activities—whether or not the president knew or not is anyone‘s question.  I don‘t think he probably did.  The division of labor in the White House in that first term was Cheney gets everything that‘s important and I get everything that‘s easy, if I am Bush.

So, Cheney was making most of the national security decisions, most of the domestic decisions that mattered, and he was certainly making most of the decisions that involved lethal action in the war on terror.

MADDOW:  And the inclination of Mr. Cheney, as we know, is towards secrecy.  That might explain why he felt it had to be overtly kept from Congress?

WILKERSON:  Absolutely.  And that‘s not an uncommon thing, either, as I said.  But it‘s the president that normally directs and it the president who takes the fall.

MADDOW:  I suppose it‘s immaterial that in 1974, President Ford issued that executive order banning assassinations by the CIA.  But, you know.

WILKERSON:  I‘m sorry; but predators have been assassinating people under CIA and military guise for some time now.

MADDOW:  It‘s always both good and tremendously alarming to talk to you.

Retired Army Colonel Lawrence Wilkerson, chief of staff to Secretary of State Colin Powell during the first term of the Bush administration—thank you so much for your time tonight, sir.

WILKERSON:  Thank you, Rachel.

MADDOW:  Let‘s say you‘re a politician and it became public that your parents paid off your mistress to the tune of $96,000.  Most people might resign from office at that point.  Nevada Senator John Ensign?  Not most people.

We‘ll have more on that in a moment.

(COMMERCIAL BREAK)

MADDOW:  Coming up: Scandal-plagued Senator John Ensign of Nevada, has made an odd decision for a U.S. senator—he has announced that he will be running for re-election in 2012, but he will be running with a running mate.  His running mate, of course, will be the sex, money, and ethics scandal that continues to dog the Nevada conservative.  New details today - including a remarkable statement of nonsupport for the senator from his own political corner in his own home state.  That is coming up.      

But first, it‘s time for a couple of holy mackerel story in today‘s news.

Just how far did still-South Carolina Governor Mark Sanford hike up the Appalachian Trail, so to speak?  It turns out he went very far.

In response to a request made through South Carolina‘s Open Records Law, the paper “The State” has received more than 600 pages of documents related to the time period in which the governor was absent without leave.

In way more detail than we wanted, the documents reveal two damning details in terms of “ye oldie (ph)” abdication of responsibility.  First, Mr. Sanford‘s chief of staff, Scott English, phoned his boss 15 times while the governor was in Argentina visiting the woman with whom he was having his hike.  Governor Sanford never picked up—and those 15 calls were never returned.  Hope none of those calls was about something important.

Secondly, Governor Sanford also chose his extramarital excursion over an opportunity to meet with a company that said it was hoping to expand its operations in South Carolina.  Expand operations at the very least implies create new jobs in South Carolina—which kind of makes Governor Sanford‘s mid-life love life resuscitation a very specific sort of jobless recovery.  We will stay on this story.

And in Iraq, amidst still way too much violence and a pullback from Iraqi cities by U.S. troops, there was a very, very bright spot in Iraqi culture last night.  It was the return of soccer. 

Last night the Iraqi national soccer team played its first home game in Baghdad in seven years.  Until now, the team had had to play out of the country, out of concern for player‘s safety. 

And while the home team was actually finally home at last in Baghdad last night, the only visiting team that‘s thus far been willing to visit Iraq to play the Iraqis were the Palestinians.  Iraq won the match four to nothing.  If you want to set your DVR for the next home game, Iraq will host Tanzania on August 12th

In other empathetically overwhelming Iraqi sports news for an American audience, I have to tell you that this man is a member of Iraq‘s national baseball team.  They have a national baseball team. 

You will notice that while he is wearing a baseball shirt, it is a baseball shirt from a Japanese team.  That‘s because the Iraqi national baseball team does not have enough money to have uniforms.  They don‘t even have enough money to have a copy of the baseball rule book, nor a proper baseball diamond.  They play on a soccer field. 

The national team is so broke the players are playing with a grand total of three baseballs between them, nine old gloves that they share and one five-year-old softball bat.  McClatchy reports today that the Iraqi national baseball team was founded a few years ago by three Iraqis who had been living in the United States when they took a visit to Baghdad. 

And despite death threats, serious enough to have made the previous baseball club disband, the greatest threat the current team now faces is financial.  The Iraqi Olympic committee refused to budget money for the team, instead giving it a one-time charitable donation that mostly just covers their entrance fees to the International Baseball Association so they can technically have some hope to have someone to play against if they can ever get it together. 

Right now, the team‘s major aspiration is to play in a baseball tournament in September that‘s being held in Afghanistan, of all places.  Right now, the major aspiration of THE RACHEL MADDOW SHOW staff is to figure out how to raise money and figure out the logistics to ship these guys a case of baseballs and a bunch of brand-new gear. 

We started working on these logistics this afternoon.  We haven‘t totally figured it out yet.  It‘s complicated, but we will keep you posted.  I promise.

(COMMERCIAL BREAK)

MADDOW:  A most unexpected development today in the sex and money and ethics scandal that continues to engulf Republican Senator John Ensign of Nevada.  While there remain unanswered questions and un-followed leads, Ensign took a big leap today, declaring not only that he‘s not planning on resigning, but that he will also run for re-election three years from now. 

In an interview with “The Las Vegas Sun,” Sen. Ensign said, quote, “I fully plan on running for re-election.”  Of his supporters, he said, “I‘m going to work to earn their respect back.” 

Sen. Ensign‘s process of earning back the respect of Nevada voters will, maybe, take some time.  After calling on President Clinton to resign for having an affair while he was in office, after calling his Senate colleague, Larry Craig, a disgrace when Craig was caught in an airport public sex sting, calling on Craig to resign as well, by saying, “I wouldn‘t put myself, hopefully, in that kind of position, but if I was in a position like that, that‘s what I would do,” Sen. Ensign himself admitted to an affair with the wife of his former chief-of-staff. 

He then said his mom and dad had given his mistress and her family a gift of $96,000 after Sen. Ensign told his parents about the affair.  Still unanswered are questions about other cash deals associated with the affair. 

The National Republican Senatorial Committee still not apologizing for or commenting on the fact that Ensign put the 19-year-old son of his mistress on the Republican Party‘s payroll during the time he was sleeping with the young man‘s mother.  He then took the young man on the payroll once the affair ended. 

Also, Doug Hampton, Sen. Ensign‘s former top aide and the husband of his mistress said in an interview that his wife was paid more than $25,000 severance by Sen. Ensign when the senator asked her to leave that job. 

The payment never turned up on campaign finance disclosure forms.  If it did happen and it was paid out of campaign funds, that would be an illegal payment that would put the senator on the hook for up to five years in prison. 

And there are still unanswered questions about the nearly $100,000 cash payoff to the mistress and her family from Ensign‘s mom and dad.  According to Ensign‘s lawyer, quote, “Sen. John Ensign‘s parents each made gifts to Doug Hampton, Cindy Hampton, and two of their children in the form of a check totaling $96,000.  Each gift was limited to $12,000.  The payments were made as gifts, accepted as gifts, and complied with tax rules governing gifts.” 

So the scenario the senator has asked us to believe about that payment is that Sen. Ensign‘s mom and dad each gave their son‘s mistress a payment of $12,000.  His mom and dad each also gave the husband of their son‘s mistress a payment of $12,000.  And mom and dad each gave $12,000 payments to two of their son‘s mistress‘s three children. 

If we‘re expected to believe this wasn‘t really just one big cash payoff to the mistress, this really was a gift to the kids for the kids‘ own use, then what did the poor third child do to deserve getting left out of all the loot? 

Mom and dad got each two $12,000 checks.  Child one and child two each got two $12,000 checks.  But the third child?  The third child wasn‘t deserving of money from the parents from mom‘s secret boyfriend? 

Sen. Ensign has thus far not publicly bothered with answering any of these questions.  He says that he has support from the leadership of both parties in the Senate.  And others are telling him, quote, “Keep your head up.  This thing will pass.” 

That‘s not exactly what Senate minority leader Mitchell McConnell has said about this scandal, addressing it in his weekly news conference today. 

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL(R-KY), SENATE MINORITY LEADER:  Well, I think Sen. Ensign will have to speak to those issues himself and you can ask him about it. 

(END VIDEO CLIP)

MADDOW:  When asked again, Mr. McConnell turned around and walked out.  Republican Gov. Jim Gibbons today, in a statement to THE RACHEL MADDOW SHOW said, quote, “I am sure this is a very difficult time for Sen. Ensign and his family.  There has been a lot of attention that has been given to this matter and I will not fuel anymore speculation.” 

It‘s not a statement of condemnation, of course, from the governor; also not a statement of support.  Meanwhile, we are still unable to get any statement of support for the senator‘s pledged re-election campaign from either Sen. John Cornyn, head of the National Republican Senatorial Committee or from Brian Krolicki, the second-ranking Republican in the state of Nevada - he‘s the Republican lieutenant governor there. 

But John Ensign does say he‘s running again.  I wonder who his chief-of-staff is going to be? 

Joining us is now John Ralston, columnist for “The Las Vegas Sun” and the host of “Face-to-Face with John Ralston.”  Mr. Ralston interviewed Doug Hampton exclusively last week.  John, thanks very much for coming back on the show. 

JOHN RALSTON, HOST, “FACE-TO-FACE WITH JOHN RALSTON”:  Hi, Rachel. 

MADDOW:  You‘re much closer to this story than I am.  You‘ve talked to some of the principals involved.  Do you agree that there are still some important loose ends to tie up or at least explain here, like the payments from Ensign‘s parents? 

RALSTON:  Well, of course you‘re right on about that, Rachel.  I mean, you just described it and you wonder about the third child.  But my point on that would be, why should we believe anything that John Ensign‘s lawyer has said? 

No one has produced canceled checks.  Doug Hampton, as you pointed out on my program, said his wife had received more than $25,000, well over.  Is that the $96,000 he was referring to?  Was it given to her by John Ensign?  Or was it a pass-through from Mike and Sharon Ensign?  Were those really gifts? 

I mean, you had the sarcasm that I had that no one believes this was the generosity of the Ensign family.  And if it by some chance was, what other generosity did they show toward the Hamptons or other people during John Ensign‘s U.S. Senate career? 

I mean, this whole thing is barely worthy of the “Jerry Springer Show,” Rachel.  And you haven‘t even given some of the more sordid details of this, thank god.  And I guess what I‘d say is why should we believe anything John Ensign or his surrogates say about this until he is willing to answer questions and produce the evidence to back up these claims. 

MADDOW:  In terms of answering questions and providing evidence, Sen.  Ensign has been laying low, obviously.  What have been you been able to find in terms of support for Sen. Ensign from other Republicans, from other political powers-that-be in Nevada that might make a difference as to his political future? 

RALSTON:  There isn‘t much out there.  Certainly, publicly.  And I‘ve heard from a lot of Republican operatives that most of the Republican elected officials would rather see him resign, but they‘re afraid to say it publicly for whatever reasons. 

I think that the reason that people in the state and in

Washington on the Republican side are not coming out are what John Thune and others essentially have said, which is they don‘t know the facts here.  They don‘t know what the next shoe might be that drops if there are any more shoes. 

John Ensign won‘t answer questions.  I‘m sure whatever he said to his colleagues has probably not reassured them, because it‘s probably very, very vague in general.  You know, he says, as you pointed out in that “Sun” story, that he has support from both sides. 

You mentioned the Mitchell McConnell statement.  The question he was asked there, Rachel, was John Ensign is running for re-election, will you support him?  And he would not even say he would support John Ensign.  I think the Republicans here, certainly, and probably in Washington too, are just scared to say too much because they don‘t know if the story is over yet. 

MADDOW:  Sen. Ensign did say that he is going to be running for re-election, which is, of course, a weird thing to say three years before that election would have to happen.  I imagine that was an unexpected announcement, even from the perspective of somebody covering this very closely.  Did you know that was coming?  Do you have any interpretation of that for us? 

RALSTON:  I have to tell you, I did not.  And Lisa Mosquero(ph) has been very intrepid from “The Sun” on this.  When I saw that in the newspaper, Rachel, I have to tell you, I laughed out loud.  Now, I‘ll tell you why. 

First of all, who takes anybody seriously who announces they‘re running for re-election three years in advance?  But think more about it.  Here is a guy who is essentially saying, “If I don‘t say this, then number one, I‘m a lame duck and no one‘s going to pay attention to me.” 

And secondly, really, I think he sees if he says he‘s not going to run for re-election is some kind of admission of wrongdoing, that he did something wrong.  And he‘s unwilling to say that beyond the fact of his initial statement that he made at that press conference weeks ago. 

I don‘t think we should take that seriously either.  I don‘t believe he‘s actually fully engaged, going for re-election.  I believe he thinks he has to say that, lest he show some kind of weakness or some admission that something else might be out there. 

MADDOW:  And with each passing day, the silence from Republican colleagues, both NRSC, people who would have to be part of this re-election campaign but also just the powers-that-be gets more and more deafening here.  John Ralston, columnist for “The Las Vegas Sun,” host of “Face to Face with John Ralston,” an important part of this story in terms of his interviewing.  Thanks very much for coming on the show tonight, John. 

RALSTON:  Thank you. 

MADDOW:  The investment bank Goldman Sachs posted huge second quarter earnings of over $3.4 billion.  I guess all that TARP money of ours is really paying off, huh?  The banking industry is so grateful to the American people that they are making it their top priority to kill president Obama‘s consumer protection program. 

Thanks for all that money.  Elizabeth Warren, the chair of the Congressional Oversight Panel for TARP Funds will be here next.  Stay tuned. 

(COMMERCIAL BREAK)

MADDOW:  They got $10 billion taxpayer dollars from TARP, $13 billion taxpayer dollars from AIG.  And today, Goldman Sachs, the country‘s most powerful investment bank, or whatever they‘re calling them now, posted second quarter earnings of over $3.4 billion. 

An additional $6.7 billion is going to employees of the bank, which puts the average Goldman Sachs staffer on pace to earn nearly $1 million each - average.  If you average out for the whole company, everybody‘s making almost $1 million.  Good times.  Now, that‘s a bailout.  One might suppose that an industry whose near-death was averted by the largesse of regular people working regular jobs might humbly accept some sort of government regulations to sort of help out those same regular people who helped them, right? 

Of course not right.  As Wall Street bankers count their taxpayer subsidized profits right now, they are also fighting one element of the Obama financial rescue plan that‘s specifically intended to protect regular individual Americans who don‘t have comma capital I-N-C period after their name. 

It‘s the Consumer Financial Protection Agency.  Among its responsibilities, setting standards for mortgages, stopping risky loan practices and protecting credit card customers from predatory companies.  In the words of Treasury Secretary Tim Geithner, it has, quote, “only one mission, to protect consumers.” 

And according to the “New York Times,” the financial industry made killing this project its top priority. 

Joining us now is one of the progenitors of the Consumer Financial Protection Agency.  She is Elizabeth Warren, Harvard Law School professor.  She currently chairs the Congressional Oversight Panel for TARP Funds.  She suggested the idea of an agency devoted to protecting consumers from financial industries back in 2003.  Professor Warren, thanks very much for joining us again. 

ELIZABETH WARREN, CONGRESSIONAL OVERSIGHT PANEL FOR TARP FUNDS:  Thank

you for having me. 

MADDOW:  You suggested this idea of a consumer protection agency six years ago.  What would this kind of agency actually do?  What kind of difference would it make in our lives? 

WARREN:  You know, it would make a huge difference by just actually doing something pretty small.  Take, for example, a credit card, a typical credit card contract today is more than 30 pages long.  Back in 1980, it was about 1 ½ pages long. 

Now, that additional 28 pages is mostly full of tricks and traps.  That‘s the point.  The pricing model has shifted from, you know, “Should I lend to these people because I think they‘ll pay me back?” over to, “We‘ll hold out an interest rate and a free gift and an advertisement about how warm and fuzzy it is to do business with us and put what the industry calls revenue-enhancers in the back,”  which means all the tricks and traps and fees and penalties, and that‘s where the big profits come from. 

What this agency would say in effect is, “No.  We are going to go back to agreements that people can read.  So there is going to be a plain vanilla off-the-shelf for most people, 1 ½ pages credit card agreement.  The company can fill in its interest rate or its penalty rate or what triggers a penalty. 

But you can make comparisons and you can quickly say, “Hey, that‘s the one.  That‘s the cheapest one.  You know, that is the dangerous one.  That‘s how much my free gift is really costing me.”  The idea really is just to make this stuff clear and to let consumers make choices.  That‘s not going to be so profitable for the industry. 

MADDOW:  Are you worried that the industry is going to be able to kill this in the crib?  Reporting has been it‘s their top priority to get rid of it. 

WARREN:  My gosh, I have to tell you, it‘s like they are stampeding in the halls already in Washington - you know, the Gucci loafers.  These guys have built up a huge war chest.  They‘ve been interviewing public relations firms to see who can come up with the next “Harry and Louise” ad to explain to the American people why they are better off with credit cards that nobody can read, hundreds of pages of mortgage documents that nobody can read.

The idea is you‘re better off with how things are.  Forget all the stuff that happened over the last few years.  And we promise to keep things up just like we did before.  I just can‘t believe they are trying to sell that to the American people. 

MADDOW:  Professor Warren, when you look at the relationship between these bailed-out firms and their political agenda right now, do you think there‘s a case to be made that they have an ethical responsibility, essentially to protect consumers, since it was regular American consumers who bailed them out? 

WARREN:  You know, I won‘t even go to an ethical responsibility to protect them.  I just want a level playing field.  I really do.  I‘m not asking that they have to be extra-protective.  I‘m just saying, look, if you can‘t explain it so the person on the other side can understand it, then you shouldn‘t sell it to them. 

The bottom line is, you need to explain your products in a way that‘s clear to the customer and so the customer can compare one product to another.  Now, the reality is that‘s going to push down profits in that industry and put - leave more money in the hands of middle-class families. 

But I don‘t see how you fight that.  I genuinely truly don‘t.  What argument do you make that says, in effect, to the American people, “We want to be able to continue our tricks and traps pricing and you‘re going to love it”?

MADDOW:  Yes, we are about to see it.  Elizabeth Warren, chair of the Congressional Oversight Panel on TARP, wish we had more time with you.  I hope you‘ll come back soon.  It‘s great to have you on the show. 

WARREN:  You bet. 

MADDOW:  Coming up on “COUNTDOWN,” Keith finds out who is protecting us from dreaded mermaids and manimals.  Next on this show, my friend, Kent Jones, takes on “Harry Potter” movie mania.

(COMMERCIAL BREAK)

MADDOW:  We turn now to our muggle affairs correspondent.  Hi, Kent Jones.

KENT JONES, POP CULTURIST:  “Harry Potter and the Half Blood Prince” opens tonight at midnight.  So psyched. 

MADDOW:  Yes.

JONES:  So psyched.

MADDOW:  Cool.

(BEGIN VIDEO CLIP)

JONES (voice-over):  The wait is over, Planet Potter.  Time to get your Snape on.  In episode six, Harry, Ron and Hermione square off against Voldemort‘s evil minions and their own rampaging hormones.  Merlin‘s beard. 

MICHAEL GAMBON, ACTOR (as Albus Dumbledore):  I‘d like you to see her.

JONES:  Good news, Gryffindors, it‘s getting fantastic reviews.  “Rotten Tomatoes” gave it an insanely high 98 percent fresh rating.  The movie even got a rave from, of all places, the Vatican newspaper.  “L‘Osservatore Romano” gave “Half Blood Prince” a four star review, saying it promoted friendship, altruism, loyalty and self-giving. 

And this is a story about wizards and witchcraft.  Expecto secular humanismo.  At this stage, the whole “Potter” phenomenon has morphed into something bigger than just movies and books. 

There are Potter-themed wizard rock bands like Harry and the Potters. 

(MUSIC PLAYING)

Draco and the Malfoys -

(MUSIC PLAYING) 

And my favorite, the Hungarian Horn Tails. 

(MUSIC PLAYING)

And Potter-philes have even formed to play quidditch, which is a kind of magical rugby on broomsticks.  Here in Muggle-land, quidditch is more like a bunch of dudes playing dodge ball in capes and industrial goggles.  OK, so they can‘t fly.  I won‘t tell them if you won‘t. 

MADDOW:  Kent, I have to go get in line. 

JONES:  Yes, absolutely.

MADDOW:  “COUNTDOWN” starts right now.  Bye-bye. 

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

END   

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