updated 1/22/2010 11:56:51 AM ET 2010-01-22T16:56:51

Guests: Rep. Barney Frank, Elizabeth Warren, Erroll Southers, Kent Jones

RACHEL MADDOW, HOST:  Good evening, Keith.  Thank you.

           

And thank you at home for tuning in on a day, as Keith said, a Supreme Court ruling that may change politics in this country more dramatically than anything else this court has done in generations.

Barney Frank will join us to talk about that in just a moment.  We‘ve also got an exclusive interview tonight with Errol Southers, the man who just withdrew his candidacy to be head of the TSA.

Elizabeth Warren, who oversees the TARP bailout for Congress, will join us on President Obama picking a big fight with big banks.

And despite appearances from today‘s headlines, there are some glimmers of some hopeful news.  For instance, something very bad and very stupid about U.S. military equipment has been fixed, one good thing.

All coming up—I promise.

But we begin tonight with a rather ominous sign in Washington.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  We have serious other structural things that have to be done, systemic changes that have to happen to again hold the insurance companies accountable, make—have we - - did we get a new clock or have we not been here at this time of day?  Oh, it‘s 10:00.

UNIDENTIFIED REPORTER:  The bell tolls for thee.

PELOSI:  Must be Eastern Time, western, some time, other time.

(END VIDEO CLIP)

MADDOW:  Some other time.  Today, a bell tolling ominously in the background as Democratic House Speaker Nancy Pelosi dealt a major blow to the prospects for health reform.  The speaker saying today that she does not have the votes in the House to pass the bill, the health reform bill, that was just passed by the Senate which, of course, is the one way that health reform could get passed and signed into law right now.

Democrats have been trying to do health reform for—oh, say conservatively 60 years.  This time with huge majorities in Congress, a new president who ran on doing it, and a recognition across the country that if we don‘t reform health care, the costs of our health system will essentially cannibalize the American economy, this was the best chance at actually achieving health reform that we‘ve had in that whole 60 years.

The House has passed a bill.  The Senate has passed a bill.  We‘ve never been anywhere near this close to it before.  That does not mean, though, that the people who profit from the broken system now, either politically or financially, it doesn‘t mean those people are going to roll over and let it happen.

Republicans in Congress decided from the very beginning that even though many of them campaigned on the necessity of health reform, they would be determined in Congress to stop it by any means necessary.  They were totally open about their strategy, which was to slow it down, delay.  That‘s the traditional way to stop big, important legislation—just make it go as slowly as possible.  Hope for the worst.

Health reform was originally supposed to pass in August.  That obviously didn‘t happen.  Then it was going to pass by Thanksgiving.  It didn‘t happen.  Then it was going to pass by Christmas.  It didn‘t happen.

Now, it‘s supposed to pass by the State of the Union.  Maybe.

Republicans have played this slow-down game to great effect.  It‘s a game they continue to play today.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), MINORITY LEADER:  Listen, our goal is to stop this monstrosity.  We need to stop.  Scrap the bill.  And start over.  And start over in a bipartisan way.

(END VIDEO CLIP)

MADDOW:  Republicans profit from the broken system staying the way it is because they really don‘t want Democrats to get credit for fixing it.  If they can stop the Democrats from getting something they‘ve pursued, well, who cares about what happens to the health care system?  What‘s most important is that it will politically hurt the Democrats.

(BEGIN AUDIO CLIP)

SEN. JIM DEMINT ®, SOUTH CAROLINA:  If we‘re able to stop Obama on this, it will be his waterloo.  It will break him.

(END AUDIO CLIP)

MADDOW:  It will break him.

As Republicans try to kill health care reform in order to metaphorically kill the president, corporations sidled up alongside Republicans to kill reform in order to just make a killing on the broken system.  Health insurance companies themselves reportedly secretly funding third party TV ads against reform—corporate-funded ostensibly grassroots groups holding events for health insurance reforms magically transformed into “death panels,” analogized to the Holocaust and say Pol Pot.

Disgraced hospital CEOs are organizing and giving out talking points for angry, screaming town halls against health reform.  Corporate interests have done everything possible to stop health reform, and the Republican Party has reaped the electoral benefits of slowing it down and politicizing it thus far.  Their win Tuesday night in Massachusetts in part attributed to the doubts and confusion and anger they‘ve been able to sow about health reform as it has dragged on for months and months and months.

And now, a bolt of lightning has struck the entire American political

system.  And it seems to have hit the prospects for health reform dead on -

unless Democrats find the strength to push health reform through roughly now.

           

The Supreme Court today swept away rules that go back more than a century—rules that have constrained the way that corporate interests can influence the American political system.  In 1907, Congress passed a law banning corporations from donating money directly to politicians.  Over the next century, Congress passed a number of laws aimed at stopping corporate money from completely controlling America‘s political debate.

They‘re laws that have been upheld multiple times by the Supreme Court.  Like in 1990 when the Supreme Court ruled it was constitutional to restrict corporate political spending.  Or 2003, when the Supreme Court ruled specifically that the McCain/Feingold corporate campaign finance rules were OK.

Well, today, in one of the most radical Supreme Court actions in years, Justice Roberts and Alito and their five-member conservative majority overthrew at least a decade of settled law and congressional action and multiple Supreme Court precedence to wipe those laws away.  Corporations are free to inject unregulated billions, absolutely unlimited money into the political system now.

If you are a regular person who‘s ever made a campaign donation before, forget about ever having to do that again.  What‘s the point in individual people trying to influence politics with donations if Exxon or some other company can quite literally match and therefore cancel out the combined donations of every single individual donor in the nation whenever it wants in one check?  And it can do it every year, in every campaign, in every state, in every race.

Going forward, corporations will be able to use unlimited money to support or oppose candidates in federal office.  This isn‘t CEOs, individual rich guys using their private money.  It isn‘t people forming political associations to do political work.  It is big business being allowed to use its profits to flood the airwaves with ads against one candidate or for another.

So, if you‘re, say, a giant health insurance company who doesn‘t want the current system to change because you‘re making a killing, there‘s now nothing stopping you from tapping into your company‘s millions of dollars of profits to try to defeat a candidate who will vote against your interests.  And you can do it without limit.  If you have $2 billion in your company bank account, and you see stopping health reform as an existential (ph) issue for your company, you can and your shareholders probably think you should spend all $2 billion of those dollars running ads against health reform directly.  Feel free.

This ruling rolls back decades of protections against corporate interference and control of governance.  Justice John Paul Stevens read from the bench his scathing 20-minute dissent of the court‘s decision today.  He said, “The court‘s ruling threatens to undermine the integrity of elected institutions across the nation.  It‘s a rejection of the common sense of the American people who have recognized a need to prevent corporations from undermining self-government since the founding.  While American democracy is imperfect, few outside the majority of this court would have thought its flaws included a dearth of corporate money in politics.”

Today‘s ruling affects everything going forward.  If this ruling is not curtailed somehow through legislation, I personally think it is impossible to overstate the impact this will have on American politics.  Every major issue that our government deals with will change because the field has just been dramatically tilted, like 90 degrees tilted toward corporate interests.

So, will health reform be the first casualty?

Joining us now is Democratic Congressman Barney Frank of Massachusetts, chairman of the House Financial Services Committee.

Mr. Chairman, thanks very much for coming on the show tonight. 

Appreciate your time.

REP. BARNEY FRANK (D-MA), HOUSE FINANCIAL SERVICES CMTE.:  You‘re welcome, Rachel.  It‘s an important set of issues.

MADDOW:  What‘s your reaction first of all to the Supreme Court ruling?

FRANK:  One, you correctly call it radical.  You know, the conservatives talk about not having interference with the democratic process.  They have overturned more laws, this conservative group led by Scalia now joined by Roberts and Alito and the others, than the liberals have.  And in fact this is a—as you documented—a very radical repudiation of dozens of laws passed by Congress.  This is judicial striking down of the law.

Fortunately, there is an approach we can take.  And as chairman of the committee of financial services, I preside over a committee that has jurisdiction over the laws that govern corporations.  Corporations are not natural beings.  They only exist by law.  That‘s why it was so odd that the court found that they had this constitutional right.

What we can do that‘s perfectly statutorily possible and constitutionally I believe on the syllable (ph) is to impose restrictions as a matter of corporate law on what corporations can do.  They argue special treatment.  They have liabilities that are limited.  They have all kinds of privileges.

We have traditionally conditioned those privileges on rules.  And I talked today to a couple colleagues and when we get back in on—in session I‘m going to designate a couple colleagues on the financial services committee to begin working to prepare a package of legislation that will put some restraints on this.

So, yes.  In the current absence of—you can‘t do the statute the Supreme Court said because they said it.  Remember, they are not final because they are infallible.  They are infallible because they are final, as one justice once said.

But we can limit what corporations do and we limit it not as a matter of campaign finance regulation per se, but as a matter of corporate law, and we will be pushing very hard, and I hope within the couple months, we‘ll have legislation through the House that will put some restraints on this—because otherwise, as you say, democracy doesn‘t mean anything.

And, by the way, if you need to have this to have free speech as the right wing majority of the court says, then there‘s no free speech anywhere else in the world because no other country that I am aware of, no functioning democracy, allows this unlimited corporate spending in campaigns.

MADDOW:  Would you expect the president to also act through some sort of executive order?  Would you expect administrative action to try to work on this?  The president said today, of course, he‘s looking to work with Congress.

FRANK:  Yes, he‘s a good constitutional lawyer.  Unfortunately, it‘s probably going to take a statute.  I do not think the president can, by executive order, do this.  We will be consulting with the Securities and Exchange Commission.

We have the power in the public sector to regulate the behavior of corporations.  And, you know, we are going to be ordering them to rein in some of the compensation for example.  We‘ll have a hearing on that tomorrow over the Republican objection.

We do other things that regulate what corporations can do, but I don‘t think it can be done by executive order.  We will be cooperating with the Obama administration in drafting the toughest possible constitutional legislation to prevent the drowning of American democracy in corporate dollars.  There‘s no other way to say it.

MADDOW:  On Tuesday night, when Scott Brown was elected to the Senate in Massachusetts, you released a statement on health care saying you thought it was no longer appropriate for the House and Senate to try to merge their health reform bills.  You then released a second statement sort of withdrawing parts of the first one.

Why did you change your mind and what do you think is going to happen on health care next?

FRANK:  Well, as I said, I overreacted.  And when you make a mistake, you acknowledge it.  I was obviously disappointed on Tuesday.

I was fearful that some people would be talking about trying to pass a health care bill in ways that would not be appropriate.  For example, there was a suggestion, I never thought it had a chance, to hold off on seating Scott Brown, having a vote before he could take his seat.  That would have been undemocratic, manipulating the reconciliation procedure.  I don‘t like the filibuster.  I think it should be a great crusade now to try and change that rule which the Senate can do by a majority at the opening of the Senate.

But I was fearful that we were going to look—Democrats—as if we were contemptuous of the whole process.  I realized when I made the statement that I overstated it.  There are legitimate ways to try and get health care through, getting the votes will be difficult.

So, I put out a second statement making it clear that what I was objecting to was suggestions that we take procedural shortcuts which, A, wouldn‘t have succeeded and, B, would have made people angry.  We‘d have had the worst of both worlds.  No bill and more fodder for the right-wingers trying to claim that we were being unfair, and in some cases, some of the tactics would have been unfair.  So, I did want to clarify that I am trying to work something out.  It‘s going to be difficult.

One of the questions we‘re going to have to ask is of people like Senator Snowe of Maine, Senator Collins of Maine, who described as moderates—do they want to be in their political careers known as people who are responsible for preventing any reform in health care, for preventing any end of the abuses of the insurance companies?  You know, the Republicans were in an easy position, politically, when they were simply criticizing our efforts to resolve the problem.  Being responsible for the continuation of the problem unreformed, some of them may not be so happy about that.

So, I am in favor of us working to see what we can do.  I happened to speak to the president about it today when I was in the White House on the corporate reforms—the financial reform stuff.  But I did on Tuesday night want to caution people and reassure people that we weren‘t trying to do anything that was razzle-dazzle or flimflam.

But then I realized that I—I meant to talk about procedure the way I had written.  It was Tuesday night and I wasn‘t in the best mood I‘ve ever been in, and it was late, and I should have waited until the morning.  And so, that‘s what I did.

MADDOW:  Congressman, one last point on that issue of health reform.  I keep hearing hope from various members of the Democratic Caucus, both in the House and the Senate, that a Republican or two, some Republicans will decide that they have to follow their conscience and vote for health reform and that‘s how we‘ll get something done.

I really don‘t think that‘s going to happen.  I think the Republican Party is going to enforce discipline like it never has before, because they felt such political success from saying “no” to absolutely everything.  If there are zero Republican votes, does that mean the end of health reform or should this be pursued in a way that can happen with zero Republicans?  I think that‘s what you‘re going to get.

FRANK:  Well, I think you have to first try or at least hold out the hope of the Republicans.  I agree with you.  I‘m not optimistic.

I do think that there are people, moderates, independents, who vote for Republicans on the ground that they are moderates.  And they ought to be very clear that moderate Republicans, if they allow the health care bill or they try to kill the health care bill unanimously—then let‘s say the moderate Republicans are no longer an endangered species, they were an extinct species.  They talk one way, but when the pressure comes on their party, they fade.

We are working on how to try to do this.  There are complications.  There are some easy things to do in the sense of getting large majorities to discipline the insurance companies, but to get them done without there being increases in costs, you want to broaden the insurance pool, and, yes, people are working seriously on this.

So, there were two tracks.  One may be a couple of moderate Republicans will rediscover the moderation.  I, like you, am skeptical.  They have not shown the willingness to stand up to this intense right-wing pressure and the fear of losing to the teabaggers in primaries.  And so, we are working on this, but it‘s very important—as I said—that we show that we‘re doing it in the procedurally appropriate way.  There are ways to do this and that‘s what‘s now being explored.

MADDOW:  Democratic Congressman Barney Frank of Massachusetts, chairman of the House Financial Services Committee—thanks for your time, sir.  I really appreciate it.

FRANK:  You‘re welcome.

MADDOW:  President Obama decided to climb into the ring to slug it out with Wall Street, on the very day the Supreme Court put gold bars inside Wall Street‘s boxing gloves.  Elizabeth Warren is here next.

And on the interview, an exclusive.  Errol Southers, yesterday, withdrew his name yesterday from consideration to be head of the TSA.  Republicans did a victory lap immediately thereafter.  Mr. Southers joins us for his first TV interview since withdrawing—coming up.

(COMMERCIAL BREAK)

MADDOW:  An exclusive interview with Errol Southers, President Obama‘s former nominee to head the TSA.  He withdrew his name from consideration for the position yesterday, too much hullabaloo.  We will ask him why.  That‘s coming up.

Plus, Elizabeth Warren.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  My message to leaders in the financial industry is to work with us and not against us on needed reforms.  I welcome constructive input from folks in the financial sector, but what we‘ve seen so far, in recent weeks, is an army of industry lobbyists from Wall Street descending on Capitol Hill to try and block basic and common sense rules of the road that would protect our economy and the American people.  So, if these folks want a fight, it‘s a fight I‘m ready to have.

(END VIDEO CLIP)

MADDOW:  President Obama proposing aggressive measures to limit how big banks can get and what they can do with your money.  Issuing a forceful challenge to the banks themselves, either get onboard or prepare for a political battle.

Of course, the president issued that challenge to the financial industry within about 90 minutes of news that the Supreme Court had handed business—including, of course, the very rich banking industry—more political power than they‘ve had in, say, a century.

The White House responded directly to news of the high court‘s ruling by calling it “a green light to a new stampede of special interest money in our politics.  It‘s a major victory for big oil, Wall Street banks, health insurance companies, and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.  We are going to talk with bipartisan congressional leaders to develop a forceful response to this decision.”

What that response might entail remains to be seen.  We just heard Barney Frank from the banking committee and the House say that maybe some changes could be made in corporate law to try to get back some of the ground that was ceded to the Supreme Court today.

What also remains to be seen is how the president will get new financial reform through Congress now that the Supreme Court has told the financial industry that it‘s cool if they want to just sort of buy Congress.

Joining us now is Elizabeth Warren, Harvard law professor and chair of the Congressional Oversight Panel for the TARP bailout funds.

Professor Warren, thank you so much for coming on the show. 

Appreciate it.

ELIZABETH WARREN, TARP CONGRESSIONAL OVERSIGHT PANEL CHAIR:  It‘s good to be here.

MADDOW:  I‘ve read that you met with David Axelrod and Valerie Jarrett yesterday before this announcement today.  What—what exactly is the president proposing and how important do you think it is?

WARREN:  Well, it‘s really important.  Let‘s put a little context around what today‘s announcement was about.

Remember, October 2008, Secretary of the Treasury Paulson comes in and says in effect, “The economy is about to crash, give me $700 billion or it won‘t be here next Monday.”  And so, the American people did.  They put up the money.

And now, here we are.  We‘ve bailed them out.  The big financial institutions are back on their feet.  The bonuses are back.

They‘ve paid the money back, some of them.  The rest of them are beginning to.  And we‘re winding out of TARP.

But what will remain after the last dollar is paid and the last formal guarantee has been canceled is the reminder that, you know, when it comes right down to it with these very large financial institutions, we will throw as many taxpayers under the bus as it takes to save them.  That‘s known as the implicit guarantee or too-big-to-fail.

And so, what President Obama was talking about today is he said, we just can‘t do that anymore.  What we‘re going to have to do on a going forward basis is we‘re going to have to break apart financial institutions that would otherwise be too-big-to-fail and we‘re going to have to say for those that take deposits, the ones we‘re really going to have to guarantee, they can‘t engage in high-risk trading.  We‘ve got to dial that back out of the system, because without that, quite frankly, our economy just can‘t function.  Those big banks really will own all of us.

MADDOW:  The reforms that were on the table before this announcement today were already under assault.  I mean, not only by Republicans in Congress and—but by the financial industry.  I mean, tens of millions of dollars spent lobbying against even the existing proposed regulations before this tough new ones announced today.  The creation of a consumer protection agency, something you‘ve been a key advocate for, has been that particular target.  The White House now is saying that agency is now nonnegotiable.

How are you feeling about the politics here?  Obviously, it seems like you got more support—overt support from the White House than you had in the past.

WARREN:  You know, I always say about politics—remember, I‘m a teacher.  I‘m not a politician and I don‘t always understand what goes on in Washington.  But I feel better than I‘ve felt in a long time because what I heard the president saying on the Consumer Financial Protection Agency is it‘s not going down.  I‘m here.  I‘m not giving up on it.  There is not going to be a compromise to cave in on it.

I heard him say we‘re going to tax those large financial institutions and we‘re going to make them pay back all of the money under TARP.

And then today, I heard him say, we‘re going to break apart too-big-to-fail and we‘re going to have an answer so that every financial institution, if it makes big enough mistakes, if it takes big enough risks and loses, every one of them can, in the end, die.

And what I hear in that is that, you know, the financial institutions have pushed him hard.  They‘ve pushed Congress hard.  He‘s pushing right back.

MADDOW:  In terms of those specific changes that you just described—and we‘ve all been reporting on this and hearing about it for so long that I think everybody understands those changes even if we didn‘t think of ourselves as financially savvy people a year ago—how can all of those changes be made?  Are those all made through legislation?

Do they all get made at once?  Does it have to happen piecemeal?  Are some regulatory or administrative changes?  How fast can this be done?

I‘m asking because I‘m trying to figure out how possible it is in this political environment.

WARREN:  Right.  You know, I—the way I understand this is, look, it took 30 years to get us into this hole.  Think about consumer finance by itself.  Basically what happened was that the big banks started in in the early 1980s and they captured the regulatory agencies that were supposed to be the cops on the beat.  They then poured money into Washington to make sure that no one put any new cops on the beat.

And then they started selling deceptive products all over the country.  As we all know, that then brought down a lot of households and ultimately brought down the entire economy.  They demanded a bailout and got it.  And where we really are, is in the last chapter of that story and basically, the next chapter of our—the rest of our lives.  And that is the banks are really in control here or are we going to be able to do something for the people.

And what I see is that the president is now going to go straight to the people and he‘s not going to let deals be cut in the backroom.  He‘s not going, you know, to take people off the hook so there are no hard votes.

You know, the time is upon us.  Either you vote for the banks and do you it in a big, public way, or you vote for the people.  And we‘ll have it.  We‘ll count up at the end of the day where that puts everyone in Washington.

MADDOW:  Boy, does he need this kind of political win right now if he can pull it out.  And even if he can‘t pull it out, boy, does he need to look like he‘s having this kind of political fight right now.  I can tell that from here.

Elizabeth Warren, Harvard law professor, chair of the Congressional Oversight Panel for the TARP bailout funds—as always, it is an honor and a pleasure to have you on the show.  Thank you.

WARREN:  Thank you.

MADDOW:  A former FBI agent named Errol Southers was the Obama administration‘s choice to head up the TSA.  He withdrew his name from consideration following a storm of protest from the party that‘s not even close to being in power in Washington.  Mr. Southers joins us for the interview.  It is a TV exclusive.  We are the first show he is talking to since withdrawing his name.

It‘s very exciting.  And that‘s next.

Please stay with us.

(COMMERCIAL BREAK)

MADDOW:  President Obama‘s nominee to head up the Transportation Security Administration yesterday withdrew his name from consideration.  Errol Southers was a candidate with arguably the perfect resume for the job. 

Here, in a landmark moment for THE RACHEL MADDOW SHOW, we‘ll let Sen. Joe Lieberman run you through it.  This is what he had to say about Southers‘ qualifications back in November. 

SEN. JOE LIEBERMAN (I-CT):  To this job, you bring nearly three decades of experience in public safety, homeland security and intelligence carried out at all levels of government and, indeed, in academia.  You have had responsibility for the security of Los Angeles‘ four area airports. 

Previously, Mr. Southers taught Homeland Security and Public

Policy at the University of Southern California and served as deputy

director of California Governor‘s Office of Homeland Security, also worked

as an FBI special agent and as a police officer - 

(END VIDEO CLIP)

MADDOW:  Given those kinds of qualifications, Mr. Southers‘ nomination was passed unanimously out of that committee.  But then, South Carolina Senator Jim DeMint decided to personally block Mr. Southers because Mr.  DeMint said he was worried about the threat of unions - no, not unions! 

For TSA employees. 

On the same day Mr. Southers withdrew his nomination, the heads of homeland security, the FBI, the director of National Intelligence, and director of the National Counterterrorism Center all testified on Capitol Hill about the security and intelligence lapses that allowed the Christmas Day bomber to load his underpants with explosives and hop on a plane to America. 

One might think that would have been an occasion for Democrats to be up in arms about a Republican senator keeping the nation‘s airline security agency from having anyone in charge so that he could score theoretical political points about unions, of all things, while the underwear bomber was in the skies. 

One might think, right?  One would be wrong.  Here was the extent of the Democratic outrage over Republicans blocking this appointment.  Here it was.  Don‘t blink.  You‘ll miss it. 

(BEGIN VIDEO CLIP)

SEN. JAY ROCKEFELLER (D-WV):  Madame Vice Chair, if I can just say that I‘m sure that our colleagues all know that Errol Southers withdrew his name for head of TSA today.  It‘s a real shame.  It‘s a real shame. 

(END VIDEO CLIP)

MADDOW:  Maybe a shame.  It‘s a lot of other things besides.  Joining us now for his first television interview since withdrawing his name from consideration is the administration‘s former nominee to head the TSA, Mr.  Erroll Southers. 

Joining us now for his first television interview since withdrawing his name from consideration is the administration‘s former nominee to head the TSA, Mr. Errol Southers.  Mr. Southers, thank you so much for joining us.  I really appreciate the chance to talk with you. 

SOUTHERS:  Thank you for having me, Rachel. 

MADDOW:  So why did you withdraw your name from consideration? 

SOUTHERS:  I withdrew my name because I had become a lightning rod for the administration.  I was engaged in a political process far beyond what I thought it was going to be. 

As you were well aware, the union issue really took on its own life, and quite frankly I was really concerned that had I been confirmed, that the attacks would not have stopped. 

I was looking forward to taking the agency, a maturing agency to the next level, and I don‘t believe I would have been able to do so moving forward and looking backward at people who were going to continue to dog me over the union issue. 

MADDOW:  Yesterday I on this show called the circumstances surrounding your withdrawal—I think I used the phrase the embodiment of Democratic political weakness, that there is no reason a Republican senator like Jim DeMint should have won a fight against you on an issue like this union issue.  I can‘t imagine that it sounds good to hear that right now, but I wonder how you feel about the politics around your nomination.  Do you feel that you were fought for adequately? 

SOUTHERS:  I felt like I was on my heels constantly.  I would have preferred to be able to be more aggressive, leaning forward.  The union issue quite frankly was a no-win with Senator DeMint.  A yes response to unions, of course, would have resulted in a hold.  A let me consider all of the aspects involved of unionization with the largest component of DHS would have resulted in a hold, and that was of course my suggestion.  And then a no unions would have gone against Senator Obama‘s letter to Jim Gauge (ph), the head of the AFTE (ph), when he was running for the presidency, where he specifically in October, 2008, said that collective bargaining rights for transportation security officers would be a priority in his administration if he were elected president. 

So, yes, maybe, and no result in a hold from Senator DeMint. 

MADDOW:  Which means he picked a good political issue, particularly because he got away with it. 

Let me—let me be frank.  You are a security and law enforcement and counterterrorism professional.  You are not a politics guy.  You‘ve made that very clear throughout this process.  But there are a lot of people in the country who look at the politics of your nomination and want this administration to have fought for you, to have made an example of Jim DeMint for dismissing national security in favor of this no-win dog-and-pony show about unions, to have recess-appointed you if need be, to have made a fist-pounding speech about it to ward off any other obstructionist shenanigans like that.  If the administration hypothetically had second thoughts and decided to renominate you and handle it like that, would you do it?  Would you try it again? 

SOUTHERS:  It was a very, very challenging process.  But I want to say this—I believe I was the right man, with the right qualifications.  I had very interesting and productive conversations with Secretary Napolitano about moving forward.  I believe we could have developed the TSA, a maturing organization, into the best transportation security organization in the world. 

Yes, I would do it.  I‘m committed to the mission.  I tried to convince Senator DeMint it was about the mission. 

We need to address the threat that‘s facing this country.  The politics need to be aside.  And as you mentioned earlier, I am apolitical.  This is about terrorism and not about politics. 

MADDOW:  Well, hearing that, yes, you would do it, I don‘t know that the White House is ever going to reconsider how they handled this, but if they did, knowing that you would consider it I think would be heartening. 

On the substance of airline security, I would have liked to have heard from you today in those hearings on Capitol Hill about what you think the appropriate response should have been to the attempted Christmas day bombing.  What do you think our response should be?  Obviously you don‘t want to fight the last war, but given that that vulnerability has been exposed, what should TSA and the government be doing next? 

SOUTHERS:  I think what we should probably do is understand we‘re dealing with a transnational threat.  I think that the response should have been global in its perspective.  It would have been probably preferable to sit with our international partners, assess the intelligence that we had available, determine what we should do, collectively, and not individually to address this threat. 

One of the things that everybody must understand is that this attack was debriefed by the foreign terrorist organizations that sent Mr.  Abdulmutallab over here.  They learned a great deal.  We need to reverse-engineer what happened and think about what we would do to counter the emerging threat instead of yesterday‘s attack, and having policies that are then driven and being reactive instead of really being thought out and being comprehensive in their scope. 

MADDOW:  In looking into some of your record and what you‘ve worked on in the past today and preparing to talk to you, I know that some of the work that you‘ve done specifically is about those types of explosives.  What are the detection hopes for those types of explosives?  I know that they‘re very popular among the people who most want to harm America, who would most like to do something like take down an airliner.  How are we ever going to be able to find that stuff? 

SOUTHERS:  Well, TATP, which has been used before—and I‘ve worked with Professor Ehud Kanaan (ph) in Haifa—there are detection devices for that.  Canines can be used for TATP, but they are very effective on PETN, which is what Mr. Abdulmutallab and Richard Reid had in his attack.  So, canines are quite useful.  We have actually evolved into a pilot at LAX where we are using canines to ward off that kind of attack. 

The technology is good.  But again, technology has got to be used to enhance the performance of our people.  And much as they do in Israel, it‘s the people and the staffing and their commitment to the issue and the mission that is going to stop terrorism and not just technology. 

MADDOW:  Mr. Southers, barring the possibility that the White House decides it‘s in a fighting mood and decides to bring you back and try over and do it in a tougher way, if that doesn‘t happen, what‘s next for you?  What are you going to do next?

SOUTHERS:  I‘m looking forward to first reengaging at the Los Angeles International Airport.  We have the largest airport police department in the United States.  We are very interdisciplinary in our approach.  We have randomized a number of methodologies and counterterrorism strategies, and I look forward to doing that.

I also look forward to returning to the university.  I‘m associate director of the Center for Risk and Economic Analysis of Terrorism Events, running the executive program, teaching, and being part of the solution to this problem of terrorism in the country instead of a political football for people that want to decide that it‘s not quite important enough to move forward. 

MADDOW:  Erroll Southers, former TSA nominee who heads counterterrorism efforts for Los Angeles‘s airports, the nation‘s largest aviation law enforcement agency, and a man who I would recess-appoint if I could.  Mr. Southers, I really want to thank you for taking—for talking to us and talking to us first.  And I‘m sorry for what a trial this has been.  Thank you for your service. 

SOUTHERS:  Thank you, Rachel.  Pleasure to be here. 

MADDOW:  All right.  Up next, Haiti.  The international response to Haiti and a really specific piece of good news about something potentially catastrophic that was being done to Haiti by the international community in the wake of the earthquake that was really, really worrying and that now has been fixed.  Yes, it‘s true.  Stay with us.  We‘ll be right back.

(COMMERCIAL BREAK)

MADDOW:  Coming up there are plans for a new professional basketball league.  Here‘s a hint about it.  The All American Basketball Alliance could be divided into the Lester Maddox division and the David Duke division.  Not really, but almost. 

But first, while Haiti continues to grapple with disaster, countries around the world are considering what they can contribute, not only to the rescue in Haiti, not only to relief in Haiti, not only to rebuilding in Haiti but also to the hope of Haiti ever recovering, ever possibly thriving as a country. 

This earthquake in Haiti is one of the world‘s worst humanitarian disasters in decades.  U.N. special envoy to Haiti, Bill Clinton, has said there were modest hopes and a real plan for Haiti‘s government and its economy before the quake. 

But after the quake, one of the few things that can be predicted with certainty about Haiti‘s government and economy is that Haiti isn‘t going to be paying off any of its debt any time soon.  And frankly, it seems crazy that anyone would expect them to. 

The Paris Club, a group of countries to which Haiti owes money, has called on all Haiti‘s creditors to forgive the debt even after a lot of debt forgiveness already Haiti still owes about $891 million mostly to the World Bank, International Monetary Fund, and the Inter-American Development Bank. 

We reported on Monday that the IMF offered to add another $100 million to Haiti‘s debt in the form of a disaster relief loan just after the quake - $100 million good, as a loan, not so good. 

But then, get this - a breakthrough.  Yesterday after pressure around the globe, the IMF made a huge announcement.  They said that the new hundred $100 million debt they just gave Haiti would be canceled. 

So Haiti gets to have the money for disaster relief.  They won‘t be expected to pay it back.  It‘s a little hinky to explain in terms of the complicated financials.  But the bottom line is, the IMF is essentially making its loan to Haiti a grant instead.  Grants, not loans. 

Right.  The IMF also now working with all of Haiti‘s donors to cancel all of its debt.  The World Bank, for its part, says it is waiving any payments on the $38 million that Haiti owes the World Bank for the next five years.  And World Bank says it is trying to find a way to just cancel that debt altogether. 

Naomi Klein who is author of the book “Shock Doctrine,” which is in part about how catastrophes are used to economically victimize traumatized countries and people.  She welcomed this big news about Haiti. 

She told “The Nation” magazine that this is unprecedented in her experience and shows that public pressure in moments of disaster can seriously subvert shock doctrine tactics. 

When is the last time you heard Naomi Klein react to an IMF announcement by saying, “Hey that‘s good?”  All in all, this is good news.  It‘s good news in very dark days for the hope of Haiti‘s recovery.  We‘ll be right back.

(COMMERCIAL BREAK)

MADDOW:  The sluggish supply line of relief supplies for Haiti sped up slightly today when the port at Port-au-Prince was partially restored albeit to a very delicate state. 

The port had been closed after the quake destroyed docks and cranes, dumping debris into the harbor and leaving ships at risk of running aground.  After divers made some repairs and cleared the harbor, the city‘s smaller south pier opened today. 

They‘re delivering supplies there.  It‘s still a little dicey.  Authorities are only allowing one way traffic on the pier so one truck in loads up and drives out, but no traffic coming back in.  Hope is that two-way traffic can happen by tomorrow. 

American military divers continue to make repairs.  According to “The Washington Post,” they are so concerned about the fragility of the pier that when a French ship, loaded with cargo docked, quote, “One of the Navy divers said, ‘Put on your life preservers.‘  He wasn‘t kidding.  Nearby, the civilian engineer for the Navy had made a pendulum out of a piece of string, a twig, and a weight, a half-full plastic eye dropper.  He told a sailor to keep an eye on the pendulum.  He said, ‘If it starts to swing, run.”  We‘ll be right back. 

(COMMERCIAL BREAK)

MADDOW:  On last night‘s show, we reported on a new basketball league that‘s reportedly starting up, calling itself the All-American Basketball Alliance.  They want teams in 12 cities in the American south.  And the all-American Basketball Alliance will be explicitly a whites-only basketball league, for real. 

The statement put out by the league‘s organizer says, “Only players that are natural-born United States citizens with parents of Caucasian race are eligible to play in the league.”  Whites only need apply. 

A whites-only sports league in our country.  This year, after assuring ourselves that we are not being punked by this story, we asked Kent Jones to investigate for yesterday‘s show.  Sadly, he was on strike yesterday.  National day of Strike - what the Tea Party Patriots called the greatest confrontation in the modern history of America, yesterday‘s tea party strike. 

Kent today seems to be back and dressed for work this time. 

Kent, good to have you back. 

KENT JONES, MSNBC CORRESPONDENT:  Hi, it was a one-day thing. 

MADDOW:  Oh, good.  

JONES:  Yes, the All-American Basketball Alliance is taking the game into a new century, the 19th century. 

MADDOW:  Yes. 

JONES:  Take a look. 

(BEGIN VIDEOTAPE)

(voice-over):  Basketball is one of America‘s greatest exports, a democratic team sport played and loved by all races in every corner of the globe - Africa, China, Russia, South America.  You name it.  Planet earth loves them some hoops. 

American racists, can you do something about this?  Enter boxing and wrestling promoter Don “Moose” Lewis who imagines the All-American Basketball Alliance as a glorious return to fundamental basketball and not the, quote, “street ball played by people of color.” 

Commissioner Moose told the “Augusta Chronicle,” quote, “Would you want to go to the game and worry about a player flipping you off or attacking you in the stands or grabbing their crotch?” 

He was quick to add, quote, “I don‘t hate anyone of color.  But people of white American-born citizens are in the minority now.  People will come out and support a product they can identify with.” 

So how is the support going?  The mayor of Augusta said no way to an AABA team in his town while the athletic director at Augusta State University said, quote, “It‘s so absurd, it‘s funny.  But it gives you an idea of the sickness in our society.” 

Still, Moose remains upbeat saying, quote, “I‘m the spoken minority right now.  But if people will give us a chance, it‘ll work.  The white game of basketball, which is essentially a fundamental game, works.” 

(END VIDEOTAPE)

Good seats still available, I‘m sure. 

MADDOW:  Yes. 

JONES:  You can imagine the marketing opportunities, though.  You can have a jersey with a hood.  We haven‘t seen that. 

MADDOW:  Instead of hoodies and jerseys, you can just have hooded jerseys. 

JONES:  A whole different thing.

MADDOW:  And they come way down with eyes.  Yes.  Bad peripheral vision but still quite unique.  Damn.

JONES:  Yes.

MADDOW:  Damn.  Unbelievable. 

JONES:  Awful.

MADDOW:  Thank you, Kent.  Appreciate that very much.  All right.  Coming up on “COUNTDOWN,” Keith‘s special comments on today‘s revolutionary Supreme Court decision.  Next on this show, Jesus rifles - separating church and state, specifically separating church and the military.  A very weird end to a very weird story.  That‘s coming up next.  Stay with us.

MADDOW:  A follow-up to a story we covered earlier this week about biblical references on rifle scopes issued to U.S. troops, particularly to U.S. troops used to train Iraqi and Afghan forces. 

The scopes are considered really good scopes.  They‘re called ACOGs.  The Michigan company that manufactures them imprints references to Bible verses next to the model number right on the side of the scope. 

John 8:12 and II Corinthians 4:6 - just what every Muslim trainee wants to be inspired by, right when he‘s training to defend his homeland which is populated mainly by other Muslims. 

Since the issue was first raised by the Military Religious Freedom Foundation and covered on ABC News and then on this show, the U.S.  Marine Corps Systems Command in Quantico expressed concern with how this may be perceived telling the AP that they would meet with the vendor to discuss future sight procurements. 

Meanwhile, David Petraeus said this week that he found the issue disturbing.  He described it as a “serious concern to me.”  After initially defending the decision to put Bible verses on their weapon scopes, the company that makes them has now changed its mind announcing they will no longer put the Bible references on the weaponry.  And they will provide the military with kits to remove the bible verse references on ACOGs that are already in use - presumably little files? 

The Military Religious Freedom Foundation, which first brought the Jesus-rifles issue to light reacted by saying, it‘s about time.  Trijicon‘s outrageous practice of placing Bible verse citations on military-issued gun sights for weapons was an unconstitutional disgrace of the highest magnitude and an action that clearly gave additional incentive and emboldenment to recruiters for our nation‘s enemies. 

Case closed, right?  Weird one, huh?  Actually, no.  Still weird and not closed.  The TV host on the Fox News Channel is now defending the Bible verse rifles.  Seriously. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE FOX NEWS HOST:  My wife made a good observation yesterday when we were talking about this story.  Hey, wait a minute, the Taliban and the extremists - what is it they say just before they blow themselves up or kill somebody, they say, “Allah Akbar.”  So if anybody is making this a religious thing, they started it. 

(END VIDEO CLIP)

MADDOW:  They started it.  Right.  Right.  They started it.  They want this to be a religious war.  They want the whole Muslim world, all 1.2 billion Muslims in the world, to see themselves as at war with the United States. 

And they want us to feel that way back.  They started it.  That‘s what they want.  So we can either sign up for what terrorists want or we can say no to what terrorists want and instead do things on our own terms like Americans, like as if we were Americans, OK?  OK.  Wow.  “COUNTDOWN” with Keith Olbermann starts right now. 

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