updated 8/6/2009 11:19:11 AM ET 2009-08-06T15:19:11

MADDOW

August 5, 2009

THIS IS A RUSH TRANSCRIPT.

THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

Guests: Michael Snider, Frank Pallone, Joel Sawyer

RACHEL MADDOW, HOST: Good evening, Keith. Thank you very much for that.

And thank you at home for staying with us tonight.

There are Russian nuclear-powered submarines hovering off the eastern seaboard of the United States-and yes, it's 2009. That story is ahead.

Plus, the coal industry gets itself in trouble over fraudulent, stolen letterhead letters sent to members of Congress.

Plus, the man who had the single hardest job in political public relations this year, Governor Mark Sanford's communications director during the whole Appalachian Trail to Argentina thing, he is leaving the governor's office. Today was his last day at work for Governor Sanford and he will join us live tonight.

That is all coming up this hour.

But, we begin with the latest attempt to convince Americans that health care reform is really just a big secret plot to kill old people. MSNBC's own Pat Buchanan making that case in a column published today. And now, the conservative organization Club for Growth has launched a nationwide ad campaign to try to mainstream the idea that reforming health care is a secret plot to kill your grandparents.

(BEGIN VIDEO CLIP)

NARRATOR: That's wrong for America. Life and death medical decisions should be made by patients and doctors, not politicians and bureaucrats. Tell your members of Congress to oppose government-run health care.

(END VIDEO CLIP)

MADDOW: Like Medicare.

For the record, what's being proposed in Washington is not government-run health care. And for the record, the health care reform as a "secret plot to kill old people" conspiracy theory is based on the fact that health legislation being debated now would cover living wills. So, if you wanted a living will, the process of getting one would be covered. That provision was introduced into the health care debate by Republicans, including Senator Johnny Isakson of Georgia.

And having a living will where you say how it is you'd like decisions to be handled at the end of your life, where you make your own decisions about that ahead of time-that is something the federal government has formally encouraged by legislation for at least 20 years, without controversy.

But politically, the facts don't really matter, right? Not if they can be distorted to scare people, particularly if they can be distorted to scare old people.

What's becoming clear now is that there is a connection between the two big things that we have observed recently about the health care fight. On the one hand, are these crazy, disprovable, but nevertheless, endlessly stoked conspiracy theories that health care reform is communism, that it's a secret plot to kill your grandpa, that it's a government takeover, it's something called Obama-care. It's going to mandate abortions. It's going to mandate sex change operations.

I would make up something that could be the next crazy thing, but everything I could think of that is that crazy has already been actually used by these people.

There are these crazy conspiracy theories about health care reform on the one hand. And on the other hand, there are these organized efforts to shut down political debate about health care, by using angry crowds to take over town hall meetings and chase congressmen through parking lots. These two observable facts about the anti-health care reform forces, it turns out, are really one big thing.

Do yourself a favor if you have a moment and you're online, and go to the Web site RecessRally.com. It's a very nice Web site. It's very slick.

It's got a big "stop" sign right there in the middle, above the list of all the town hall rallies they expect you to go to and disrupt. The tag line up there, you can see, is: "We the people say no to socialized health care."

We the people-that's how the Republican Party has been describing these town hall takeovers, too, putting out a statement today saying that Democrats should stop being so upset about them. Quote, "What Democrats call mob rule, the average American calls democracy. These kinds of despicable characterizations of middle-class Americans smacks of elitism."

The Republican Party says the town hall takeovers, the bullying and the intimidation we've been seeing, these are just average middle-class Americans spontaneously expressing their feelings.

Conveniently, the average middle-class Americans bringing you RecessRally.com are actually listed at the bottom of that Web site. If you scroll down to the bottom of the page, you can see there, national coalition of sponsors. You can see-there's like Michelle Malkin, she's one of the people on FOX News. There's Smart Girl Politics. That actually sounds very nice. RedState, a fairly prominent right-wing blog.

OK. So, those are sort of recognizable, or at least of interest, but who are all the other groups? Here is one called American Majority. Hmm! You know, the average middle-class Americans behind American Majority include the organization's president, Ned Ryun. He's a former speechwriter for President George W. Bush.

The executive director of American Majority's Minnesota office-kowinky dink, regional field director for Bush-Cheney '04. Executive director of their Kansas office would be a former Republican state legislator; executive director of their Oklahoma office, a former Washington, D.C. conservative lobbyist-you know, just your average middle-class Americans.

That organization, American Majority, is an offshoot of another Recess Rally sponsor, which is called the Sam Adams Alliance. Now, don't get your hopes up. It's not about beer.

The president of the Sam Adams Alliance is the former executive director of the Illinois State Republican Party. Sam Adams Alliance is also led by a former Dow Chemicals engineer who's also president of the nation's largest conservative state-level policy think tank-just your average middle-class Americans concerned about health care.

Who else have we got behind these recess rallies? Well, here's another one. They're called Let Freedom Ring. That sounds nice. The founder of that group is the moneyman behind the super offensive TV ads from the last election cycle that exploited the burning wreckage of 9/11 to help promote the Iraq war.

One of the other groups that's been promoting the town hall meeting sites and bragging about shutting them down also happens to be the same group that brought us the Swift Boat ads that attacked veteran John Kerry's war record. These are just totally disinterested, average middle-class Americans. It's very grassroots, really.

Here is another one, and maybe this one is the most illustrative of all. It's a group organizing the recess rallies that's called Americans for Prosperity. They've not only represented themselves as Americans for Prosperity here, they also are listed on the RecessRally.com page under the name of their own subsidiary, Patients First.

Now, who's Americans for Prosperity? Well, the director of Americans for Prosperity is a man named Art Pope. Art Pope. Art Pope.

Why does that name sound familiar? Oh, right! That's the headquarters of the North Carolina Republican Party. That building is named after Art Pope because Art Pope is a multi-millionaire far-right activist who's given the Republican Party in North Carolina so much money over the years that they could think of no grander gesture than to name their headquarters building after him. You know, just like other average middle-class Americans.

The national chairman of Americans for Prosperity is the 19th richest man in the world. A man named David Koch. He and his brother run Koch Industries, the largest privately-held oil company in this country, and prolific founders of far right-wing causes. They're just your average middle-class Americans-who also happen to be the 19th richest man in the world.

Americans for Prosperity in turn runs a group called Patients United Now and Patients First. These groups are currently busing people across the country to-you guessed it-demonstrate against health care reform. This is what these groups do. They're experts at fake grassroots campaigns that promote corporate interests.

Americans for Prosperity is the group that ginned up anti-stimulus rallies earlier this year. They also organized the Hot Air tour, to campaign against the whole idea of global warming. They were the ones who sent Joe the Plumber around the country to rail against the Employee Free Choice Act which is pro-labor legislation.

This oil industry and Republican operative millionaires' club is, according to the Republican Party spokesman today, just average, middle-class Americans-just regular American folks sitting around the kitchen table, thinking about whether they can get away with saying that the government continuing its long standing policy of encouraging living wills is really a secret plot to kill old people.

One other thing about Americans for Prosperity-their most visible spokesman is a man named Tim Phillips. He is the president of the organization and we've asked him to come on the show to talk with us about the group. Tim Phillips got his start in fake grassroots at a firm called Century Strategies run by Ralph Reed. Century Strategies is famous for having duped Christian groups into lobbying for energy deregulation-you know, like the Bible said? They were doing that at the behest of Century Strategies client Enron.

Tim Phillips and Ralph Reed were later made even more famous in the Jack Abramoff scandal, for duping Christian groups into lobbying against gambling, but only in areas where these guys happen to have competing gambling interests as clients. These guys are the pros. This is an industry.

Americans are showing up at these events to shout down the discussion and to chase their congressmen and they are enraged. And they're enraged at least in part because they're being riled up by over the top, fabricated conspiracy theories about health care. And they're being directed and orchestrated by the corporate interests that do this for a living and do it very well.

RecessRally.com is not some organic outgrowth of American anger. This is how corporate America creates the illusion of a grassroots movement to support their own interests. This is what they do. They are professionals. This is an industry.

To talk about these town hall events as some organic outpouring of average American folks who have concerns about health care is to be willfully blind as to what is really going on-which is professional P.R. operatives generating exploitive, manufactured, strategically deployed outrage in order to line their own pockets. These P.R. spinmeisters get paid a lot of money for doing it. The corporations they work for get to kill legislation that would hurt their profits.

And the real people who they launch into these town hall settings after they're told that health care reform is a secret commie plot to kill old people and to mandate sex changes-those real people get more and more and more angry, and more and more and more alienated. And ultimately, they get left, like the rest of us, with a health care system that is broken and doesn't work in the interests of the American people, but does work in the interests of the corporations that profit from the way the system is now.

This is professional, corporate-funded, Republican staffed P.R., and it should be reported as such.

(COMMERCIAL BREAK)

MADDOW: The anti-health care reform forces have been grabbing all the headlines recently, and you know that tends to happen when your tactics include having large groups of people scream incoherently at members of Congress in public to the point where local police feel that representatives need physical protection from the angry mobs.

But while this hooliganism has grabbed all the attention recently and understandably so, pro-health care reform forces are also spending lots of money and doing lots of organizing, trying to bring attention to their side of the debate.

Now, it is the awkward truth in Washington today, of course, that Republicans just aren't that relevant to policy outcomes, to what passes in either house of Congress. They got really, really, really badly trounced in the last election and therefore they are now a really, really, really small minority in both houses of Congress. So, Republicans don't matter that much. And that means that even the pro-health care reform forces are targeting Democrats-conservative Democrats.

Whether it's because conservadems are sympathetic to the insurance or drug or medical supply companies, or because they're simply ideologically opposed to health care reform for some reason, conservative Democratic senators, like Ben Nelson of Nebraska, have cast themselves as swing voters on health care, the ones who will make or break this chance at reform.

Accordingly, here's an ad being run right now by two progressive groups. It's being run both in D.C. and in Senator Nelson's home state of Nebraska.

(BEGIN VIDEO CLIP)

MICHAEL SNIDER, SMALL BUSINESS OWNER: For six years, I've owned the Syzzlyn Skillet here in Ralston, Nebraska. Last week, my health insurance agent called. He told me my rates are going to go up 42 percent from last year. I can't afford that. I told him I may have to cancel the coverage. I'm just going to pray that my kids don't get sick.

When President Obama proposes a public health insurance option that would force the private insurance companies to compete at lower rates, that's exactly what my family needs. Now, I hear that Ben Nelson, the senator that I voted for, is leading the charge to delay health reform this summer-that's exactly what they want. The health and insurance companies that have given Senator Nelson over $2 million know that if they can stall reform, they can kill it.

I have to ask: Senator, whose side are you on? If you're on my side, stay at work. My family can't wait for reform.

(END VIDEO CLIP)

MADDOW: It's definitely not as scary as shutting down a town hall meeting with a screaming tantrum. It's also not without substance.

What happened after this ad went up in Nebraska may be the real story here. Senator Nelson called Michael Snider, owner of the Syzzlyn Skillet and star of the ad that was running against him. Mr. Snider joins us now from Omaha after graciously allowing our staff to pester him through the lunch rush at his restaurant, at the Syzzlyn Skillet.

Mr. Snider, thanks very much for joining us here tonight.

SNIDER: Thanks for having me, Rachel.

MADDOW: I know that you supported Senator Nelson politically in the past. You voted for him. What moved you to do this ad? I don't imagine it was an easy decision.

SNIDER: You mean besides the fact that my insurance rates went up 42 percent?

(LAUGHTER)

SNIDER: That was one of the major motivations. And the second motivation was the fact that it looked like we were starting to make some progress and Senator Nelson decided that he was going to stand up and slow the process down. And I thought we were going to go someplace.

MADDOW: After the ad was released, I understand that Senator Nelson called you personally. How did that conversation go? Did he-did he make you feel any differently about anything that you said in the ad?

SNIDER: He didn't change my mind. We basically had a debate on the telephone. I think, he-I don't know what the purpose of him calling me was other than the fact I think the ad kind of got his attention. And he felt like he had to call me and he did. But what he did was he started telling me his side of the story, which is fine. There's always supposed to be two sides of a debate. But he was telling me how bad the public option would be while trying to tell me at the same time that he supported it. And it just didn't-it was a -it was a tough conversation to have, but I had it with him.

MADDOW: People who are opposed to health care reform often cite small business owners such as yourself as potential victims of any change to the system. So, what-when you talked to Senator Nelson, just talking right now, what is your perspective as a small businessman on whether or not health care reform would be a help to you in your business? Why is it so important to you?

SNIDER: Well, it's important to me-number one, because my premium is almost as much as it costs me to put a roof over my head. That's one of the main reasons that I'm concerned about it. Number two, as a small business person, I don't-that argument doesn't make any sense to me because if health care costs come down it's going to benefit small business people. It has to.

And it's, actually if they come down, smaller businesses are going to be able to offer health care to their employees. So, you know, that's a fake argument.

MADDOW: Yes. I think what you just articulated there is the big idea and just punctured a lot of people's balloons with the myths they've been hearing about this.

Let me ask you one last thing about how this has all gone down. After the ad ran and presumably after Senator Nelson spoke to you, he put out a statement that said, "If this is an indication of the politics going into August, health care reform might be dead by the end of August." The groups paying to run this ad that features you then announced that they would triple the amount of money that they're spending to run the ad. They're both sort of raising the stakes on one another.

What do you make of the way this is being fought out? Do you feel like it's constructive enough or-how do you feel about it?

SNIDER: I'll tell you exactly how I feel about it. I think my position represents the Democratic wing of the Democratic Party. Barack Obama was elected in this country and under his platform was to get health care done, and I think we need to get it done.

MADDOW: Michael Snider is the owner of the Syzzlyn Skillet restaurant in Ralston, Nebraska. I don't know if I'm ever going to get to Ralston, Nebraska, but if I do, I'm going to leave a really large tip when I eat at your restaurant.

Mr. Snider, thanks very much for being on the show. I really appreciate it. Good luck to you sir.

SNIDER: Thank you.

MADDOW: All right. So, Vladimir Putin-he keeps taking his shirt off in front of camera crews. He keeps doing that. But now, for the first time, he has timed his semiannual strip off for the cameras to coincide with news that his country has also sent nuclear-powered submarines to hover off the American east coast. That's so many different types of creepy all at once that it stretches the definition of the word "creepy."

Stay with us.

(COMMERCIAL BREAK)

MADDOW: Still ahead, those little lumps of coal that sang Christmas carols this year, they're back with an argument I'm nominating for this year's "single most jaw-dropping argument made about an American political issue with a straight face." When I first read this, I thought it was something from the onion. Stay with us.

But first, it's time for a few holy mackerel stories in today's news.

After weeks of protests in the streets, defiant crowds, shocking police and paramilitary violence against civilians, and the American people showing a huge amount of un-cynical interest in an international news story that really wasn't at all about us-today was finally inauguration day in Iran. Mahmoud Ahmadinejad, who the government says was re-elected in the elections held June 12th, was sworn in to office for another presidential term today.

Under heavy security and asphyxiating restrictions on reporting, we're not able to give you much more detail on the protests of the inauguration today other than to say that we know that protests happened. We know that because-as has been true from the beginning of the antigovernment uprising in Iran-ordinary Iranians are documenting their demonstrations themselves, and then e-mailing them out of the country or uploading them online so the world will know what they're doing even if reporters aren't actually allowed to commit journalism inside Iran anymore.

I do want to show you one quick clip that was picked up by "The New York Times" today. It's just about 20 seconds long. These 20 seconds of tape I think are worth many more than a thousand words in terms of what's really going on there. The tape starts with a newspaper being held up to the camera-and I don't read Farsi, but I think it's so you can see that it's being shot today. I think it's today's newspaper. That's where it starts-check it out.

(BEGIN VIDEO CLIP)

(INAUDIBLE)

(PEOPLE CHANTING)

(END VIDEO CLIP)

MADDOW: You can see all the people marching. You can see the people also holding up cameras and phones filming at the same time that they're marching, documenting the protests on their own phones and cameras.

What they're chanting at the end there-and again my Farsi is a little

rusty-but what I'm told people are chanting there at the end is, "Back

us up. Back us up. Brave Iranians, back us up.'

They're calling on bystanders and maybe even police to stand with them in their ongoing protests against the government. And, you know, the protestors did get a little backup today. Two former presidents and dozens of Iranian legislators just didn't show up for Mahmoud Ahmadinejad's inauguration today, and a significant number of legislators who did show up walked out as soon as Ahmadinejad started talking. He's in trouble.

As several of our Iran expert guests have told us over the last couple months, this thing going on in Iran has a very, very long timeframe to it. But it appears that the uprising lives. We will, of course, stay tuned.

And, in another story of international news becoming American news -

Russia has apparently had two nuclear-powered submarines stationed off our coast for the past few days. The U.S. Navy has reportedly been using aircraft and ships and underwater sensors to track the Russian subs. They're submarines of what NATO calls the Akula class-though in Russia they call them the Nerpa submarines, N-E-R-P-A.

I only bother to spell that out because it might be helpful for googling if you want to find out what Nerpa submarines are famous for. They're famous for a bad reason, which is that when Russia was testing one of them last November, 20 Russians were killed and 21 more were hospitalized because the fire extinguishing system onboard the sub inexplicably released a bunch of Freon gas and it asphyxiated everyone onboard.

Now, that's: A, the second time I've used asphyxiated in one show which is pretty impressive, but, B, that type of accident has been, if not par for the course, at least way too close to par for the course for the Russian navy post-USSR. The Russian navy has been a disaster, particularly their subs.

Part of the reason this news about Russia having subs off our coast is sending eyebrows so high is because it indicates that Russia's navy maybe isn't such a disaster anymore. They at least have figured out how to sail their Nerpa subs without accidentally killing everyone onboard with a fire extinguishing system.

As far as most defense experts were concerned, the Russian navy wasn't even capable of operating this far from home. But here they are, off the coast, showing off. Passive-aggressive militaristic taunting has become a Russian specialty in recent years. Over the last few years, Russia has with increasing frequency even flown nuclear-capable bombers just along the edge of NATO borders.

Of course, nuclear subs and nuclear capable-bombers aren't the only powerful weapons that Russia has in its arsenal. Should the occasion arise, the mighty nation could also bring out its really big guns. Russia's former president and current prime minister, Vladimir Putin, held his own sad little gun show this week when he posed for pictures and for a film crew while vacationing in Siberia. Putin had himself photographed shirtless, riding a horse, breaking a stick, fishing, swimming and doing a particularly menacing version of the butterfly.

So now we know.

Russia's subs are working again and Vladimir Putin wishes he had been one of the village people. I mean, think about it - cop, construction worker, Native American, leather guy, Russian. Why not?

(COMMERCIAL BREAK)

MADDOW: The drip, drip, drip of new details continues in the coal industry lobbyists posing as minority groups via the U.S. mail scandal. I'm going to have to get that one an acronym, I think. Tonight, we are following the latest developments about this letters to members of Congress which appear to be from legitimate interest groups and constituents but they were actually works of fraud.

They were from a lobbying firm working for the coal industry. The extent of the fraud is evident here. You're looking at the letterhead of a local Virginia Hispanic group which was stolen and then used to fake a constituent letter opposing the climate change bill.

Now, as we reported last night, that particular letter and a handful of similar forgeries purporting to come from local NAACP chapters were sent to the Democratic Congressman Tom Perriello of Virginia whose staff figured out that the letters were fake.

But we now know of at least 12 letters and they didn't all go to Congressman Perriello. Forged letters were also dispatched to Representatives Kathy Dahlkemper and Chris Carney, both Democrats of Pennsylvania. And both of them, unlike Congressman Perriello, voted the way these fraudulent letters told them to vote, against the cap-and-trade climate change bill.

Now, Congresswoman Dahlkemper's office says that the letter did not influence her vote. Her spokesman sent us a statement today that says, quote, "To be sure, this is an unfortunate incident involving several out of thousands of letters that Rep. Dahlkemper received regarding this important issue. At the end of the day Rep. Dahlkemper voted in the interest of the third district of Pennsylvania and her constituents."

Congressman Carney's office has had no comment. No comment on whether he knew the letters were fake before he voted against the climate bill. No comment on whether the fake letters influenced his vote. He's just had no comment.

Nevertheless, we are learning more today about the timeline behind the forgeries. Thanks in part to Congressman Ed Markey who is chair of the House Select Committee on Energy Independence and Global Warming. He is investigating these fraudulent letters.

Congressman Markey sent out a letter today addressed, not to the Bonner and Associates, the lobbying firm responsible for the forgeries and a group that's famous for exactly this kind shady strategy. But instead, he sent the letter to America's Coalition for Clean Coal Electricity, the coal industry front group for whom the forger or forgers at Bonner and Associates were hired to work.

This coal industry group has now admitted to knowing that this fraud was being perpetrated by its subcontractor as of June 24th. Now, that's relevant because that's two days before the vote on the climate bill in the house.

Get the problem here? The coal industry knew what it was paying for, fraud, meant to aid its own cause. But they didn't contact members of Congress who received the fraudulent letters before the vote even though they knew they had been sent.

In fact, the coal industry didn't address the fraud at all until the Charlottesville, Virginia "Daily Progress" made it public late last week and kudos to them for the scoop. Then, of course, after it was public, the coal industry said they were outraged.

So one part of the coal industry's current lobbying effort might just be mail fraud, but that is not their only political strategy. After all, the battle over the climate change isn't over. It just moved to the Senate.

"Politico" reports today that the coal industry is readying a barrage of Web and radio and TV and print ads that will target Senate Democrats in their home states over the August recess.

Also, they're busy doing media interviews including having one of their spokesmen make what I honestly believe is the most jaw-dropping argument I have seen anyone make about an American political issue all year with a straight face.

His name is Joe Lucas. He is the spokesman for the coal industry group that we're talking about here. And he told "The Guardian" newspaper yesterday this, quote, "I can take you to places in eastern Kentucky where community services were hampered because of a lack of flat space to build factories, to build hospitals, even to build schools. In many places, mountain-top mining, if done responsibly, allows for land to be developed for community space."

You know, it is true. Cutting off the tops of mountains does create more flat space in that horribly hilly part of the world. You know, maybe it's those darned hills that explain why the Appalachian marble shooting team has never won a tournament. They're also really bad at billiards. Everything is tilty. Don't West Virginians deserve more flatness? That's their heir argument.

Joining us now is Democratic Congressman Frank Pallone of New Jersey who has introduced a bill to restrict coal companies' dumping. Congressman, thanks very much for coming on the show.

REP. FRANK PALLONE (D-NJ): Thank you.

MADDOW: Let me just start by giving you a chance to respond to the argument that mountain-top mining is awesome because it creates more flatness.

PALLONE: Mountain-top mining is a disaster and it creates pollution and has a negative impact on the communities and people's health. And it's just a - I think it's a disaster for the environment.

MADDOW: Describe what mountain-top removal is. I mean, is it really the full scale shearing off of the tops of hills?

PALLONE: Well, basically, they blast the top of the hill, if you will. And they take the waste and dump it into the stream, you know, rivers or streams nearby. And they pollute those streams.

MADDOW: You bring the valleys up and the peaks down.

PALLONE: Right. And the water is polluted and, you know, people drink it or use it for other purposes. And it affects them in a negative way.

MADDOW: Do you think that the issue of forged letters and this made-up opposition that the coal industry has been caught doing now - do you think that will be enough to interest Congress or the Justice Department to investigate? Is it something that could potentially be a criminal matter?

PALLONE: I think it's possible and I'm sure they will. And they certainly should investigate because, you know, we rely, and I think democracy relies on a certain amount of truth that when people are writing to you that they are what they purport to be. And I think it is a form of fraud that should be investigated.

MADDOW: Do you think that this scandal, such as it is, and I realize there are a lot of scandals competing for attention right now. But being caught in this way, while the industry is still aggressively lobbying to kill the climate bill in the Senate, does the scandal hurt their chances of getting what they want?

PALLONE: Oh, I think so. I mean, first of all, you know what, Rachel, I should point out that, you know, in the climate change bill there were a lot of measures that actually helped the coal industry. So I'm not sure I understand, you know, what this was all about and why they were even doing this but I think it hurts their cause. They're no longer credible.

MADDOW: How credible and how responsible have they been as part of the debate over energy issues over the year? I mean, the reason I keep talking about the clean - this clean coal group is because they keep doing stuff like having lumps of coal re-record "Silent Night" and other like, hymns in order to make them songs that are pro-coal.

I mean, the tactics they've been involved in there, to my eye at least, what seems to be feigned outrage over the Bonner group, doing exactly what the Bonner group has done over the years famously, implies to me that they're just not an actor to be trusted in the debate. Is that how they're seen in Congress?

PALLONE: No. I don't think they have been seen that way. I think this is going to really hurt them. Actually, during the climate change debate, they worked very actively to try to make the case that we should do research and invest money for clean coal energy.

And I think they were actually taken rather seriously. So I think this hurts them a lot because it does go against their credibility.

MADDOW: Do you think cap and trade is going to survive the Senate?

PALLONE: I think so. I mean, I don't know what form but it is very important and I think that, you know, from what we hear, the Senate is going to take it up in September and October. And we're hopeful it will be a bill that's just as strong as the House bill.

MADDOW: Congressman Frank Pallone, Democrat of New Jersey, somebody who has a lot of interesting coal issues. Thanks very much for joining us tonight. I really appreciate it.

PALLONE: Thank you, Rachel.

MADDOW: OK. Today is the last day on the job for man who served as communications director for South Carolina Governor Mark Sanford, including the whole Appalachian-Trail-to-Argentina period. How will he be spending his first night as not a Mark Sanford employee? He'll be spending it right here talking to us about why he quit. Stay with us.

(COMMERCIAL BREAK)

MADDOW: It didn't look good when then Congressman William Jefferson of Louisiana was found to have wrapped $90,000 cash in tin foil and stuffed it into pie crust containers in his freezer.

In related news, "it didn't look good" has officially been inducted into the euphemism hall of fame. Mr. Jefferson's rank corruption and cartoonish money-stashing methods came home to roost today when a federal jury found the former nine-term Democratic congressman guilty of conspiring to use that freezer money to bribe an official from Africa.

Mr. Jefferson, seen here accepting a suitcase of soon-to-be genuinely cold cash, was also found guilty of 10 other charges including bribery, racketeering and money laundering.

Prosecutors say he was using his office to broker telecom deals in Nigeria, oil concessions in Guinea and satellite transmission contracts in Botswana among other things.

The jury spared Mr. Jefferson on five of the 16 counts but he still faces up to 150 years in prison and forfeiture payments of nearly $500,000. Sentencing is scheduled for October when we will all surely break out all the appropriate puns about freezers and cash and pie crusts once again.

(COMMERCIAL BREAK)

GOV. MARK SANFORD (R-SC): I've been unfaithful to my wife and as a consequence, I hurt her. I hurt you all. I hurt my wife. I hurt the boys. I hurt friends like Tom Davis. I hurt a lot of good folks. And all I can say is that I apologize.

(END VIDEO CLIP)

MADDOW: Six weeks ago, South Carolina Governor Mark Sanford came home after a mysterious six-day disappearance. The governor returned to South Carolina, much to the relief of his wife, his staff, the citizens of South Carolina, many of whom were driven nearly to distraction wanting to know where he had been. After all how does an entire state just lose its governor?

The strangest of political sex scandals began on Thursday, June 18th, when Gov. Sanford told his staff he was going hiking on the Appalachian Trail. The next three days - Friday, Saturday, and Sunday, Father's Day - came and went with no word from him.

Rumors ricocheted around South Carolina. And on Monday, June 22nd, Mr. Sanford's wife, Jenny, told the Associated Press that she didn't know where he was. And she added, quote, "He was writing something and wanted some space to get away from the kids." On Father's Day.

South Carolina lawmakers demanded to know where Gov. Sanford had gone and why he hadn't been in touch with his office. Gov. Sanford's communications director, Joel Sawyer, told the AP that the governor was hiking and released a statement that said this, quote, "Gov. Sanford is taking some time away from the office this week to recharge after the stimulus battle and the legislative session and to work on a couple projects that have fallen by the way side."

The next day after widespread confusion about Mr. Sanford's whereabouts, Mr. Sawyer released this statement that said, quote, "Gov. Sanford called to check in with his chief-of-staff this morning. It would be fair to say the governor was somewhat taken aback by all of the interest this trip has gotten. Given the circumstances and the attention this has garnered, the governor communicated to us that he plans on returning to the office tomorrow."

And that's when some of the questions started to get answered. Tuesday night, the SUV Gov. Sanford had taken to go hiking was found at the Columbia Metropolitan Airport with hiking gear inside. On Wednesday, June 24th, a reporter for the state newspaper in South Carolina tracked down Gov. Sanford at the Atlanta airport and broke the news that the governor had just arrived from Argentina.

When he arrived at the State Capitol, Sanford gave an emotional, honestly rambling press conference that answered some questions and raised some new ones. At the end of that almost 19-minute session?

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UNIDENTIFIED MALE REPORTER: Are you resigning as governor? Joel, is the governor going to resign?

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MADDOW: Joel. That Joel who was asked if the governor is going to resign gave his own resignation three weeks later. And today was his last day on the job as communications director for South Carolina Governor Mark Sanford.

Joining us now for an exclusive interview is that same Joel - Joel Sawyer, as of tonight, the former communications director for the governor. Mr. Sawyer, thank you very much for joining us. I really appreciate it.

JOEL SAWYER, FORMER COMMUNICATIONS DIRECTOR FOR GOV. MARK SANFORD: Thank you, Rachel. I appreciate you having me on. That was a real trip down memory lane there.

MADDOW: Let me start by asking you if you think that was a fair summary of the way things happened over that very difficult time.

SAWYER: That was the facts. I mean, that is what happened. That is why they reported it. That is the way I remember it.

MADDOW: In listing your statements there, sort of on the time line, I couldn't help but think that, you know, close friends of the governor knew about this affair. His wife knew. His spiritual adviser knew. He says that members of a religious group in D.C., called C Street, knew.

But you were responsible for communicating the truth about the governor to the people of South Carolina and you did not know, and you say things that were not true. How does it make you feel when you hear those statements again knowing that to be the case?

MADDOW: Well, look, I mean I was disappointed like everyone else. But on the staff level, our job was to disseminate information. Now, you know, after the fact, the disseminated information was obviously not the case.

But, yes, I was disappointed like everyone else, but I plowed through it. I had a job to do. And even though I was disappointed with the governor on a personal level, I still did and still, even though I've left the office, very much believe in the things he's trying to do there. And so you just - you take it day by day. You take it as it comes and deal with it as best you can.

MADDOW: When you said that he was hiking, when you made the statements that you made, had you heard from the governor false information? Or had you not heard from the governor anything and you were just making those statements up?

SAWYER: Oh no, he told us Thursday. He told the staff on Thursday before he left that he was going up to the Appalachian Trail. You know, the reason for the gaffe, frankly, was because we were waiting to see if he was going to check in and to update us on a little more precisely where he was.

That didn't happen. So he said, well, you know - he has relayed to us that he's on the trail. We needed to just let the press know he's on the trail. And that's what we did. And you know, as I said, I didn't know that was not the case.

MADDOW: When you made the decision to leave the governor's staff, and I

know you have had been with him for a very long time, was part of the -

SAWYER: 6 ½ years.

MADDOW: 6 ½ years and you're a young man. That's a big portion of your adult life working in politics. Was part - did it factor into your decision that he gave you false information to deliver to the people of South Carolina, than you looked like - well, you in fact were not telling the truth, even if it was through no fault of your own?

SAWYER: Well, you know, obviously, that wasn't intentional. And I think people I have talked to that I deal with on a day-to-day basis in the press that know me know that we were doing the best job we could with the information that we were given. Did it factor in? Not directly - no.

Even during this, it was a very difficult decision for me to make because I very much believed in the things that he is trying to do. He was dead right on the stimulus battle. I believe in what he was trying to do in terms of limiting government, restructuring government, school choice - you go down the list.

And so from that standpoint on a professional level, it was a tough decision to make. I wasn't out looking for a job. It was somebody who approached me with an opportunity. It was something that was going to give me a lot of flexibility in terms of going out and finding additional contracts, identifying additional businesses.

And I think it's something that's going to be - prove to be a good move for me financially and on a personal level as well, just in terms of being able to spend more time with my family.

MADDOW: Do you have trouble reconciling the governor's admission of an affair and his decision not to resign with his call in 1998 for President Clinton to resign because he was having an affair?

SAWYER: Well, he didn't call for President Clinton to resign because he was having an affair. He called for President Clinton to resign because he lied -

MADDOW: He said he's that President Clinton broke -

SAWYER: He lied - hold on, he lied under oath about having an affair. I think there's a very substantive difference there.

MADDOW: But Gov. Sanford made this very eloquent statement about how the reason that President Clinton was in trouble is because he had broken the oath of his marriage.

SAWYER: And, you know - fair enough. But I think that the larger reason, and the reason if you go back and actually look at his votes on the impeachment, it was going back to the larger issue of lying under oath.

You know, that's ancient history. I think, you know, the governor has asked for forgiveness. And I think that, you know, one of the strongest statements out there was his own wife, you know, who is the real victim in all of this, has said that she's willing to forgive.

I think if she's willing to forgive, and if the people like me who were on his staff and who continued to be on his staff are willing to forgive, hopefully, the people of South Carolina will be able to as well.

And I think, frankly, he can have a very productive last 16 months of this session. He's talked a lot about how even though he - how he believed in these ideas. He may have approached some of them stridently at times and he said himself that he's learned in all of this.

And going back to the notion of making good from bad to approach the legislature and approach state leaders with a more contrite and humble spirit. And I think if he follows through on that, you're going to see a very productive last 16 months of his administration.

MADDOW: Joel, you are - it sounds like you're still on the clock. You're

doing a great job defending him. But I do -

SAWYER: No, I appreciate that. I do believe in him.

MADDOW: Well, I do just have to say, I don't mean to press you. And I know you're moving on to things beyond Mark Sanford, but the hypocrisy issue isn't ancient history. I mean, the hypocrisy issue is why people care about him having an affair. I don't think people are all that interested in who he's sleeping with.

It's that he left the state in a lurch. He lied to you and you had to lie to the people of South Carolina on his behalf. And he's got this huge cloud of hypocrisy hanging over his head because he campaigned for public office in part on saying his morals were better than those of people who were having affairs and breaking the oaths of their marriage. So I do think the governor is going to have to answer to that. He's won't able to use (UNINTELLIGIBLE).

SAWYER: No, he can - I'll back up -

MADDOW: Yes, go ahead.

SAWYER: I understood that. I mean, but I think what he campaigned for office on was about lower taxes, smaller government, school choice, restructuring government, more efficient government.

And, you know, in terms of his personal issues, everybody's made mistakes. Some mistakes are bigger and worse than others. But you know, I believe in the idea of forgiveness. I think most people in South Carolina believe in the idea of forgiveness, too. And hopefully, we can look forward and not backward.

MADDOW: Joel Sawyer is the former communications director for the South Carolina Governor Mark Sanford as of today. Joel, good luck with your new communications firm. Good luck with all your future endeavors. And thanks very much for taking time to talk with us tonight.

SAWYER: Thank You, Rachel. I appreciate you having me.

MADDOW: All right. Coming up on "COUNTDOWN," new questions about Blackwater, including whether the contractor made money off of illegal arm sales in Iraq. We'll be right back.

(COMMERCIAL BREAK)

MADDOW: We've got a very special "Just Enough" coming up on tomorrow's show. Kent Jones is on assignment right now doing some investigative work about the real threat posed by health reform. You will not want to miss that on tomorrow's show. But right now, it's time for "COUNTDOWN" with Keith Olbermann. Have a great night.

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

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