updated 9/15/2011 10:43:17 AM ET 2011-09-15T14:43:17

Guests: Ed Rendell, Richard Engel, Elizabeth Warren, Spencer Ackerman

RACHEL MADDOW, HOST: Thank you very much, Lawrence. I`ve been very,
very excited about this interview to the point where I think I have over-
prepared and now will not know what to say. So, it should be a
catastrophe. It will be fun.

LAWRENCE O`DONNELL, "THE LAST WORD" HOST: Well, we won`t miss a
second.

MADDOW: Thank you. And thanks to you at home for staying with us for
the next hour.

(BEGIN VIDEO CLIP)

SEN. SCOTT BROWN (R), MASSACHUSETTS: As always, I rely on Gail`s love
and support and that of our two lovely daughters. So, I want to thank Ayla
and Arianna for their help as well.

(CHEERS AND APPLAUSE)

BROWN: Just in case anybody is watching throughout the country, yes,
they`re both available.

No, no, no. No. Only kidding. Only kidding. Only kidding. Only
kidding. Arianna definitely is not available. Ayla is.

This is Arianna. This is Ayla.

Oh, I can see I`m going to get in trouble when I get home.

(END VIDEO CLIP)

MADDOW: You know, Massachusetts is an old state. Massachusetts has
been a state since 1788. Massachusetts is so old it`s not even a state.
It`s a commonwealth.

When the Pilgrims landed in America, they landed at Plymouth Rock in
Massachusetts. Massachusetts has the world`s oldest functioning written
constitution. That`s Massachusetts. It`s old.

By the time we got around to forming a Congress in this country and
sending people to it, Massachusetts had a delegation of ten members, eight
in the House and two, of course, in the Senate. And the 223 years that
Massachusetts has existed as a state -- I mean commonwealth --
Massachusetts has sent 465 people to Congress, I think. That`s what I was
able to figure out today.

Of those 465 people, a grand total of four of them have been women.
That`s it. Four women in the entire history of Massachusetts sent to
Congress -- 461 men, four women.

In the special election to replace Democratic Senator Ted Kennedy,
Democrats did choose a woman in 2010, Martha Coakley, as their nominee.
But, as you saw, and to the great momentary embarrassment of his daughters,
Scott Brown did end up winning that night.

Since Scott Brown was elected to the United States Senate, he has
mostly followed the wise counsel that lots of new senators get which is to
keep your head down, try not to make too much noise or too much news.
We`ve been asking for interviews with Senator Brown for more than a year
here at this show when we frankly have not gotten anywhere with those
requests. But it`s not just us, though.

The most press that Senator Brown has done in the time he`s been a
senator has been to promote his glossy autobiography. That`s been the most
of the press he`s gotten. When he has been forced to weigh in on national
political issues, it has sometimes been a little weird in the sense that it
has been hard to follow his positions sometimes. He doesn`t always seem to
have a great grasp of either the policy issues that he is talking about or
in some cases -- which is the weird part of it -- he does not have a good
grasp of what his own position is on those issues.

Take, for example, the Paul Ryan Republican kill Medicare budget.
When the Paul Ryan budget was heading toward a vote in the Senate in May,
Senator Brown told an audience in Massachusetts, quote, "The leaders will
bring forward Paul Ryan`s budget and I will vote for it." I will vote for
it -- that`s what he said.

A few days after saying that, staffers for Senator Brown explained
that that statement, I will vote for it, was not in fact a statement about
how the senator would vote on that legislation. It was just a statement
that he would vote on it. He was talking about having the opportunity to
vote on that bill even though what he explicitly said was, I will vote for
it.

Ultimately after saying, yes, he wanted to vote for the Paul Ryan plan
to kill Medicare and after that, his staffers say they didn`t know whether
or not he wanted to vote on it to kill Medicare, Scott Brown eventually
settled on no, as a no vote on that legislation. So, it was yes, then it
was I have no idea, ignore what I said and then it was no -- all in the
span of 10 days.

That`s been sort of what it`s like talking to Scott Brown about
national issues when he is willing to talk about them, even though mostly
he`s just not willing to talk.

The single most distinguishing factor, though, about Scott Brown`s
tenure in the senate thus far has been more unexpected than that. It was
not seen as a big Massachusetts issue necessarily. It was certainly not
what he campaigned on. It was not what I think most people either who
supported him or who did not support him did not expected of him when he
went to the Senate.

But in the 19 months that he has been in Washington, Scott Brown has
emerged as arguably the most Wall Street of all 100 U.S. senators. And I
don`t mean that in a stylistic way or a critical way. I just mean it in
terms of the math. Out of all 100 U.S. senators, Scott Brown ranks number
one right now in campaign contributions, campaign contributors from hedge
funds.

Scott Brown is also the senator who has received the most campaign
money from the venture capital industry. Scott Brown is number two among
all U.S. senators in receiving money from private equity and investment
firms. He`s also number two in money from the securities and investment
industry.

Look at his top campaign contributors right now. Fidelity, that`s
listed as FMR Corp., Goldman Sachs, Mass Mutual Life Insurance, Bank of New
York Mellon.

Scott Brown has taken so much money in from Wall Street in the short
time in Washington that "Forbes" magazine last year put him under the
headline "Wall Street`s Favorite Congressmen."

You know, we maybe should have seen this coming. Maybe Wall Street
and Scott Brown knew something nobody else did before he was elected. In
the six days before his special election victory last year, Scott Brown in
six days took in nearly half a million dollars from the financial industry.

The return on Wall Street`s investment, the payoff they have gotten on
what they have spent on Scott Brown, is the kind of margin that makes Wall
Street guys drool on to their tasseled loafers. As the Wall Street reform
bill was being crafted in the Senate, it was Scott Brown who saved Wall
Street firms $19 billion that they would have otherwise paid back to the
taxpayers. He stripped out a fee that was included in that bill that was
meant to have the guys who broke the financial system pay to fix it so that
taxpayers didn`t have to bear the whole burden.

Wall Street`s investment in Scott Brown really paid off. I mean,
think about that -- $19 billion they didn`t have to pay because of him
specifically.

And even though Scott Brown is not facing re-election until 2012, the
gratitude of Wall Street for what the bank of Scott Brown has done for them
in the U.S. Senate is a major reason why he is sitting right now on nearly
$10 million in campaign contributions already. Even now many quarters out
from this election in 2012, his latest fundraising figures show he`s
raising hundreds of thousands of dollars from the financial industry every
quarter -- now, even before he has technically started running for re-
election.

If you want to know why the stock market has been all over the place
recently, everybody`s been sort of trying to peg things going on in
American politics to what`s going on with these giant swings in the stock
market right now, people are trying to make those connections I think are
doing so at their own peril.

The real reason the stock market is swinging and going nuts is
actually because of what`s been going on in Europe. Europe is starting to
look like how the United States looked three years ago at this time. At
this time exactly three years ago, the U.S. financial system was beginning
to collapse, at the end of the George W. Bush administration. That is what
caused the Great Recession here.

I mean, we had the controversial bank bailout to stop us from going
into an immediate Great Depression at that time. The damage done to us by
the Wall Street collapse, the collapse of the financial system of Wall
Street firms is what put us into the mess that we are still unable to get
out of.

The determinative thing in American life and American politics that is
clouding out everything else going on, all other political activity,
frankly, all other factors is this economy, right? This economy still not
recovered from the Wall Street collapse. The Wall Street collapse that
Wall Street brought on itself by its own behavior and that we are all still
paying for.

And so, this is an open question. I think this is an open question.
I do not know the answer. Does an electorate angry about the economy
chiefly motivated by anxiety about the economy and wanting the economy to
get better -- does that electorate want Wall Street`s favorite to be their
senator? Is anger about what happened to the economy at all directed
toward Wall Street which is where this problem came from? Or have
Republicans succeeded in redirecting anger about the economy on to
Washington, and specifically on to Democrats? And on to the Obama
administration that has tried to drag us out of the pit that Wall Street
threw us in with frankly not enough success to make anybody feel good about
it?

The person who led the charge for Wall Street reform, the person whose
signature Washington achievement is a new agency to protect individuals and
families and regular people from conniving ways that Wall Street wants to
cheat us, that person is Elizabeth Warren. And Elizabeth Warren has just
entered the race to run against Scott Brown for the United States Senate in
Massachusetts.

Joining us for her first national interview since announcing her
candidacy today in Massachusetts is Elizabeth Warren.

Ms. Warren, thank you very much for coming back on the show.
Congratulations on your announcement.

ELIZABETH WARREN (D-MA), RUNNING FOR SENATE: Thank you very much.
Thank you for inviting me here.

MADDOW: There have been rumors swirling around for months that you
were thinking about jumping into this race. What was the deciding factor
that made you say I need to do this?

WARREN: You know, I was getting out and talking to families all
around in Massachusetts -- families who said, "We`re in real trouble here
and we need someone who`s going to talk about these issues." And so, after
I talked lots and lots of families here in the commonwealth, I decided that
this was the right thing to do. And that`s why I`m doing it.

I`m out here to speak for middle class families and I`m out here to be
part of the families who are going to start pushing back.

MADDOW: I know that you were out today on your announcement day, for
12 hours today, meeting people across Massachusetts. I want to quote to
you one of the people who you spoke to, a 25-year-old woman later said this
to a reporter.

She said, "She told me that she really wanted to fight for the middle
class, that they`ve been hammered on for a very long time and if things
didn`t start to change we`d be in big trouble. But I`m not sure if any one
candidate is able to turn things around for an entire group of people
especially with the way things are in Washington right now."

What`s your response to that young woman who you met today? How do
you overcome that hopelessness about D.C. that exists among so many people
right now?

WARREN: You know, I`ve been told a lot of times about what`s not
possible. I grew up in pretty tough circumstances and I fought all my life
for everything I`ve gotten to do. I was told when I was down in Washington
we couldn`t have a Consumer Financial Protection Bureau and the reason was
because the largest lobbying force ever assembled on the face of the earth
have said no, they said they`ll kill it, they said it won`t happen.

And, you know, my view on that just meant then you stand up and you
push harder. You push back. You don`t step down.

Now, we`re talking about the whole future of the middle class. I
mean, things are really tough out there. And my view on this is that means
we just have to fight back. I am not giving up on this. I am ready to
take this fight all the way to the floor of the United States Senate.

MADDOW: Scott Brown`s campaign has already bought a derisive web
address to use against you, queenelizabethwarren.com, which I don`t exactly
know what that means. I guess they`re trying to portray you as a rich
person or representing rich people or maybe being a foreign person -- I
don`t know.

What are you anticipating about how your opponents -- I mean, you`ve
talked about the opponents you faced in your fight for the middle class in
the past. What to you anticipate from how your political opponents will
run against you?

WARREN: You know, I don`t know. Let the name-calling begin. It`s
obviously already started.

But I faced off against the largest banks on Wall Street who said,
look, this is how it`s going to be. And I pushed back and I didn`t step
down and I`m not going to step down here.

I grew up -- look, I started baby sitting at 9. I started waiting
tables at 13. I got married at 19. I graduated from a public university,
started teaching elementary school.

My family didn`t have much of anything, but I grew up in an America
that invested in me. And that`s how I got to do a lot of things. But what
I mostly got to do is I got to keep fighting for families like mine. And
that`s now what I want to keep on going.

You know, there was a time -- we came out of the Great Depression. We
wrote a set of economic rules and we spent 50 years growing America`s
middle class, making it stronger, making it more vibrant. Every generation
said, my kids are going to do better than I did. And starting about 30
years ago, we really lost our way on that -- so that now we are in a place
where middle class families have just been hammered for a generation.

It`s not just what has happened in the last few years. It`s been
going on now for a long time. And it`s the case that nobody seems to get
this -- nobody in Washington.

Washington has been wired now for the big institutions, for those who
can hire an army of lobbyists. It`s not working for middle class families.
And that`s what I care about. That`s why I`m going step up on this one.
Why I`m ready to fight back.

MADDOW: It is Washington wired as you say, for those interests
because Washington has been bought. I mean, we`ve always had a problem of
big money and lobbyist influence in Washington, but with the Roberts court,
we have seen those forces really unleashed in terms of unlimited campaign
donations and anonymous campaign donations if you`re fortunate enough to
get the Democratic nomination. Scott Brown is already sitting on $10
million, a huge proportion of it from the forces you have been fighting.

How do you compete with that?

WARREN: You know, I`ll put it this way -- I can be outspent but I
can`t be outworked. I`m getting out there. I was -- today, I was all
across the state. I met with people -- it was like meeting with family,
all the way throughout Massachusetts.

Thousands of people have come to the Web site, elizabethwarren.com and
they`ve said, I want to be part of this. And that`s what I really think
this is about.

This isn`t going to be just about me and this isn`t going to be just
about money. This is going to be about a lot of people pulling together
and making some change, some change that they -- that we really need.

MADDOW: One of your main opponents for the Democratic nomination is
the mayor of Newton, Massachusetts, Setti Warren. He has experience in
government in Massachusetts, as a mayor.

You don`t have experience as an elected official. Do you see that as
a disadvantage for you, something you need to explain to voters?

WARREN: You know, all I can do is say to voters across the state of
Massachusetts, I`ve been working on this set of issues pretty much all of
my life. I`ve been out there taking on special interests and I`ve stood up
against them.

And that the end of the day, we`re now going into an election, I`m
willing to get out there and work my heart out for this. This is something
I want to do because I think it`s the right thing to do.

And I`ll be there day in and day out working. It`s all I can do. I
can offer what I am and what I`ve done and that`s -- that`s it. I`m going
to work for this.

MADDOW: Elizabeth Warren, Democratic candidate for the United States
Senate in Massachusetts as of today. Thank you for making the decision to
be with us tonight on your announcement day. I know that`s a hard decision
to make. And I really appreciate your generosity with that. Good luck to
you.

WARREN: Thank you.

MADDOW: All right. "Best New Thing in the World" is coming up at the
end of the show tonight.

Also, Richard Engel will be joining us in studio just tonight. We
have a big show tonight. Please stay with us.

(COMMERCIAL BREAK)

(VIDEO CLIP PLAYS)

MADDOW: President Obama is a very fit and very athletic person. He`s
very good, for example, at basketball, which is his favorite sport.
However, he is not very good at bowling. He is, in fact, bad at bowling.

Which if you remember momentarily during the `08 presidential primary
campaign, him being bad at bowling turned into a cipher for why he wasn`t
going to be able to get white people to vote for him. Remember that
theory? About being bad at bowling meant no white electorate would vote
for him and then he wins Idaho and Nebraska and everybody remembers, hey,
didn`t he win Iowa, too? It become sort of untenable analysis.

But, still, he is in fact bad at bowling. We learned that in March
`08 when candidate Obama visited this bowling alley in Blair County,
Pennsylvania and got some size 12 shoes.

In the 2008 election, President Obama, ultimately the man who would
become President Obama, won Pennsylvania pretty easily. He actually won by
more than 10 points in Pennsylvania.

But he did not win in Blair County where he went bowling. He lost by
24 points in Blair County. He still did win the state as Democratic
presidential candidates have been doing in Pennsylvania for almost 20 years
now.

And in 2008, that won him 21 electoral votes over John McCain. You
only need 270 total. Pennsylvania gave him 21 of those.

Republicans now control both houses of the state legislature and
governorship in Pennsylvania. And they have just proposed a change so that
if Barack Obama performs the same way in the next election as he did in
`08, he would not get 21 electoral votes like he did last time or 20 which
is how many Pennsylvania will get this time around.

If Barack Obama does in Pennsylvania what he did the last time, this
time he would get a net gain of maybe one electoral vote under a new set of
rule the Republicans are considering. Even if he wins the state, they
might just give the Republican nominee more electoral votes anyway. Nice,
right?

The Republican plan is to stop awarding all of Pennsylvania`s
electoral votes to whoever wins the state`s vote overall and instead to
award most of them district by congressional district.

In 2008, Barack Obama won the state by more than 10 points. If you
look at the map district by district, if you squint at it, if you sort of
squint that, it looks like John McCain might have won.

And John McCain did win more congressional districts in that race. He
won 10 out of the 19. He was able to pick up the Republican areas of the
state, as you`d expect, places like Blair County, home of that bowling
alley. But he won his districts by smaller margins. So McCain lost the
popular vote statewide by a lot.

Pennsylvania Republicans think it`s going to go like that again in
their state in 2012, the Republican narrowly carrying a bunch of Republican
districts but losing the whole state. In this new plan being considered by
the Republican-controlled legislation with support from the Republican
governor, which means it very well could become law, in this new plan, a
replay of the `08 presidential race in Pennsylvania with the new this plan
in place would mean the Republican nominee with those 10 districts John
McCain won would be winning 10 electoral votes. Barack Obama with his nine
districts would win nine electorate votes, plus two bonus electoral votes
for winning the state`s overall popular vote.

So, President Obama`s overall net gain from this Pennsylvania win
would not be 21 electorate votes like it was in `08, it would be one
electorate vote. Barack Obama would get 11. John McCain would get 10.
That`s what Barack Obama would get for trouncing the Republican nominee in
Pennsylvania by more than 10 points like he did last time. He`d get one
net electoral vote.

So, by persuading no more people, by winning no more votes, by winning
no more congressional districts than they did the last time, Republicans in
Pennsylvania might have just figured out a way to add 20 electoral votes to
the Republican side of the margin in the next presidential race. Not by
getting anymore votes. Not by persuading anymore people. Just by changing
Pennsylvania`s rules so they would benefit the Republican candidate.

This is how Republicans in the states rule this year. This is what
they`re doing with control of the state legislatures and the governorships.
Unions give money to Democratic candidates and do get out the vote for
Democratic candidates, and then unions have to be destroyed by state law.

Democrats count on newly registered voters turning out for Democratic
candidates, then it must become much, much harder to newly register voters.

Democratic voters are disproportionately minorities and students who
disproportionately don`t have official photo ID, then official photo ID
will be required to vote by state law. And now, in Pennsylvania,
Republicans can`t figure out how to win the state, but they can figure out
how to narrowly win some districts. So, then, by golly, they`ll change
that state law, too.

This is called using public policy for partisan outcomes. This is
called putting your thumb on the scale.

Joining s now is former Pennsylvania Governor Ed Rendell, former chair
of the Democratic Party and now a MSNBC political analyst.

Governor, thank you for being here. It`s nice to see you.

ED RENDELL, MSNBC POLITICAL ANALYST: Nice to be here.

MADDOW: Let me just ask you what your position is on this new plan in
your state, this Republican plan to divide up the state`s electoral votes.

RENDELL: Really, Rachel, it`s shameful. It`s absolutely shameful.

First of all, it violates the spirit if not the letter of one person,
one vote. Think about it. In Philadelphia, which is a city that`s about
83 percent Democratic registration, let`s say the vote follows registration
-- well, Philadelphia, Barack Obama would carry 83-17. That would get him
three electoral votes. There are three congressional districts.

But in the three suburban districts, let`s say the Republicans carry
each district narrowly, 51 to 49, they would get three electoral votes.
So, your vote in a suburban area counts a whole lot more than a citizens`
vote in an urban area where there`s a concentration of minority voters.
And I think opens up to the possible legal challenge to this maneuver,
number one. But it`s unfair. It violates the spirit of one person, one
vote.

Secondly, it is bad for Pennsylvania, because, right now, as you know,
Rachel, Pennsylvania is one of the big three --Florida, Pennsylvania, and
Ohio -- where elections are decided. We get the most money spent during
the election campaign, the most attention from the candidates and the
campaigns. And year in and year out, month in and month out, we have a lot
of clout down in Washington. People don`t want to truck with Pennsylvania
because of its power in an election.

Why should we unilaterally disarm? Why should Ohio, with a Republican
governor, Ohio keeps all of its, let`s say, 19 electoral votes going to the
winner and keeps its clout. In Pennsylvania, a rout in Pennsylvania would
be something like 11-7. So, we pick up four electorate votes. That would
be the whole ball of wax. No one would pay nearly as much attention to
Pennsylvania as they did now.

And, lastly, it`s blatantly political. If you`re going to do this in
Pennsylvania and the Republicans are going to pick up electorate votes,
what about Texas? We`d like to pick up electorate votes in Texas. If you
did it by district in Texas instead of getting shut out, Democrats would
gain electorate votes.

It`s silly. It`s partisan. It`s unfair. They should be ashamed of
themselves.

MADDOW: One of the sort of internal dynamics at work here,
Politico.com reported on this today, that some Republicans in Pennsylvania
in the state legislature are actually against this, because they think it
will make it harder for some Republicans to get re-elected if national
Democrats are competing more all over the state in Republican areas.

Are you seeing Republican resistance to this, too, or are Republicans
most onboard?

RENDELL: No, I think there`s nervousness on the Republican side.
They`re in pretty good shape in the legislature. They`re pretty hesitant
to screw with the status quo. You know, politics begins at home, number
one.

So -- it might not pass. And we`re going to have an all-out assault
against it, particularly in the southeast. We`re going to make voters
understand the unfairness of it and I think it might not pass.

But you know what would be delicious irony? If let`s say Mitt
Romney`s their candidate. He carries Pennsylvania. But Barack Obama comes
in very close and gets, let`s say, nine of Pennsylvania`s 20 electoral
votes and Barack Obama becomes president by five electorate votes.
Wouldn`t that be nice? Wouldn`t that be nice?

MADDOW: It would be nice.

RENDELL: Be careful what you wish for.

MADDOW: Be careful what you wish for, but you got to enjoy being the
person who likes watching the funny movie "Over the Edge of the Abyss" and
be willing to get that close to it.

RENDELL: Absolutely. But it`s shameful. It`s not fair. It`s
undemocratic and we should put it aside real fast.

MADDOW: Former Pennsylvania Governor Ed Rendell -- thank you very
much for joining us tonight, sir. It`s nice to have you here.

RENDELL: My pleasure.

MADDOW: Thanks.

Carmageddon is what they called it when they shut down a freeway in
Los Angeles this summer. Remember that? It was going to be the worst
thing ever. And then it turned out to be fine. The "Best New Thing in the
World" today is a comprehensive upgrade on everything about carmageddon,
including the name and the merchandise.

Please stay tuned right at the end of the show.

(COMMERCIAL BREAK)

MADDOW: Tonight, we had the first national interview with Elizabeth
Warren since she has announced she`s running for the United States Senate
against Scott Brown. Very excited to have had that.

But tonight is a big show. We`ve also got next an exclusive scoop
from wired.com about something apparently crossing over kooky far right
conspiracy theory world to the FBI. Breaking exclusively here. That story
is next.

(COMMERCIAL BREAK)

MADDOW: At the last Republican debate in Tampa, Florida, this
happened -- a plane flying over the venue trailing a banner that read
"Where is the real birth certificate?" This also happened at the Ames,
Iowa, straw poll last month, only instead of an airplane, it was a
billboard carrying that same message, "Where is the real birth certificate
?" in all caps. Naturally.

If you thought the birthers were gone, if you thought conservatives
were over this thing about President Barack Obama`s birth certificate,
they`re not. At least the hard core birthers at "World Net Daily" are not
over it. They`re the ones who are paying to fly the all capital letters
real birth certificate banner over major Republican events now.

You can read their own coverage of their continuing birther crusade at
their Web site today right under their exclusive expose that President
Obama`s Social Security number has been revealed as a fake. And that`s
right under their crack reporting on how they have proven by definition,
being a liberal means you are mentally ill.

So, yes, "World Net Daily" is still around. They will be around,
still trying to make a buck off the more gullible elements of the
conservative base I think for quite some time.

They`ve been around a long time before they got on to the birther
thing, though they have always been on the conspiratorial ragged edge of
the right wing.

In 2006, for example, "World Net Daily"`s crusade was that U.S.
military would never succeed in post-9/11 war unless we treated those wars
as more of an actual crusade. Here`s a ""World Net Daily"" interview with
a counterterrorism expert in 2006 who told them, quote, "Muhammad`s mindset
is a source for terrorism." Muhammad as in the Prophet Muhammad.

Quote, "United States and an increasing number of other governments
are beleaguered by an expanding array of states, groups and individuals
whose goals, actions and norms are animated by Islamic values."

It is not terrorism that is beleaguering the United States. It`s
Islamic values, having Islamic values, being a Muslim, that is the threat.

Since the Prophet Muhammad, himself, his mindset is a source for
terrorism -- that`s the kind of stuff that "World Net Daily" was pitching
before they were pitching the birth certificate thing.

Spencer Ackerman`s scoop at wired.com tonight is that the Muhammad`s
mindset is a source for terrorism guy from "World Net Daily" is now doing
training for the FBI`s counterterrorism officers.

In July, last month, or in July of this summer, Spencer reported FBI
trainees were being taught things from the weirder edge of the right wing
anti-Muslim fake expert movement with training materials saying things like
Islam "transforms a country`s culture into seventh century Arabian ways."
That was an instruction the FBI trainees that the Arabic mind is, quote,
"swayed more by words than by ideas and more by ideas than by facts."
Which is the kind of thing you sort of expect to hear from your racist old
uncle after a few too many cups of eggnog at the family event, it is not
the kind of thing you expect from the nation`s elite federal
counterterrorism force at the FBI.

The FBI responded to Spencer`s story in July by saying, quote, "This
presentation in question was a rudimentary version used for a limited time
that has since been replaced."

But it turns out there`s more. With Spencer Ackerman now reporting on
another set of FBI training materials dated March of this year, bylined by
the aforementioned Muhammad`s mindset guy from "World Net Daily" interview.

His chart for training FBI counterterrorism officers showing how over
time since the founding of Judaism, Christianity and Islam, over time the
more pious and devoted you were as a Jew or a Christian, the less prone you
were to violence. As Spencer put it, as time goes on the followers of the
Torah and Bible move from violent to nonviolent. That`s not so for
devotees of the Koran.

See that bottom line that just goes straight to the right? That shows
over time religiously adherent Muslims stay as violent as ever. In other
words, as Spencer puts it, religious Muslims have been and always will be
agents of aggression.

Joining us now is Spencer Ackerman, senior reporter for "Wired"
magazine.

Spencer, thank you so much for joining us tonight. Congratulations on
the scoop.

SPENCER ACKERMAN, WIRED.COM: Thanks for having me, Rachel.

MADDOW: Any sense of how widespread this training is or whether this
is an isolated incident?

ACKERMAN: The FBI, as you might be surprise to know, decided they
didn`t really want to tell me that. What they did tell me is that this was
training that agents who had two to three years of experience in
counterterrorism have gone through and they said to me that this is just
the opinions of this one particular author who you introed very well.

We`re still trying to find out the extent of this training.

MADDOW: I don`t want to ask you, of course, who your sources are.
Why do you think someone is getting you this material from FBI training?
Is it because this is upsetting people inside the FBI?

ACKERMAN: It`s very deeply upsetting to counterterrorism experts
inside the FBI. They`re very concerned about two related issues which are
counterterrorism and civil rights. And those two go hand in hand, because
as you remember the great Jimmy McNulty said on "The Wire" a cop isn`t
anything without his sources of information. And unless there`s community
buy-in, in American Muslim communities and other communities around this
country, law enforcement can`t do its job. It can`t learn about what`s
happening and alert to threats.

And if millions of American Muslims feel they`re being treated by the
FBI like a target to be watched for aggression instead of Americans whose
civil rights are to be respected and protected, you`re not going to
cooperate with law enforcement. And that`s what their dedicated
counterterrorism professionals inside the FBI are very disturbed by these
briefings about.

MADDOW: Hearing the reaction is coming from inside the FBI is
comforting if you`re worried about the content of this material. Do you
think that -- when I summarized that in that introduction, did I summarize
the worst of this? Is there more you`ve uncovered or have been uncovering
about this training that is even more sketchy?

ACKERMAN: There`s tons of dozens of pages of documents that we`ve
acquired at wired.com, stuff that talks about Muhammad as a cult leader,
stuff that talks about obscure version -- obscure passages in the Koran as
being weird guide posts to aggressive behavior, stuff that talks about an
obligation to give charity in the Muslim community as millions of Americans
do, as being simply a mechanism to fund combat. There`s a lot of stuff
here that I think a lot of people will find disturbing.

MADDOW: Spencer Ackerman, senior reporter for "Wired" magazine --
Spencer, thanks for letting us break this on TV tonight. It is your scoop.
And we`re glad to have you here to help us cover it. Appreciate it.

ACKERMAN: Thanks.

MADDOW: We now turn to Richard Engel, NBC chief foreign
correspondent.

Richard, it`s great to have you here. Thank you.

RICHARD ENGEL, NBC NEWS CHIEF FOREIGN CORRESPONDENT: It`s great to be
here with you again.

MADDOW: You reported in the 9/11 documentary we did together about a
market for Islam experts producing some pretty non-mainstream radical
training for local law enforcement about the country.

ENGEL: This isn`t the first instance of this. There have been many.
It`s happened with local police departments. I don`t know the details of
specifically of what this report from wired.com found out about the FBI.
But there is a market for so-called experts who are painting themselves as
counterterrorism experts and many of them are just peddling racism.

MADDOW: In terms of how widespread that is -- I know that so-called
expert who we profiled in the documentary, I know that he is a guy who
travels all over the country and does this intensively with local law
enforcement. Do you have the sense that this has infiltrated higher ranks
or more broadly, or even into non-law enforcement areas?

ENGEL: Yes, yes it has. There are people who are presenting
themselves as Islamic experts or Muslim world experts saying things exactly
like were quoted in that article, that Islam naturally leads to violence
and if you read the Koran that you`re going to become a terrorist and that
giving charity is a fund-raising mechanism for groups like al Qaeda.

And that is a major problem. It has emerged over the last decade.
This association in people`s minds between the religion of Islam and
terrorism and I can understand why some of the association might be there.
But this association, if it`s penetrating law enforcement agencies, and it
is penetrating law enforcement agencies, then you`re going to have the
exact backlash that he talked about where the people on the ground, the
sources of information to actually prevent terrorism aren`t going to
cooperate.

MADDOW: So, that`s the practical impact of it, that it actually has -
-

ENGEL: And it`s stupid and wrong. I mean, that cartoonish slide -- I
hope that wasn`t being used to train the FBI. It is shockingly disturbing
if it is being used to train the FBI with the Bible and the Koran pointing
up toward peace -- the Bible and the Torah painting up toward peace and the
Koran pointing into some dark abyss. It`s just ridiculous. If that`s
given forward as expert advice, it is a very sad statement.

MADDOW: Richard Engel, NBC chief foreign correspondent, it`s nice to
have you here. Thanks for your expertise on this, Richard. Appreciate it.

We will be right back.

(COMMERCIAL BREAK)

MADDOW: Hey, programming note. We`re going to be doing this show
live from Atlanta tomorrow because I`ll be doing the first cable interview
with former President Jimmy Carter with his White House diaries being
released in paperback this week. That will be exclusive here at 9:00 p.m.
Eastern tomorrow here on MSNBC. We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: Back in January, you may recall someone planted a bomb in a
backpack along the route of the Martin Luther King Day parade in downtown
Spokane, Washington. Workers spotted the backpack and its potentially
fatal contents a half hour before the MLK parade. A bomb squad equipped
with specialized robots moved in and in a bomb squad`s words, quote,
"successfully disrupted the device."

The Martin Luther King, Jr. parade got rerouted that day in Spokane
but it did still take place even as the hunt for the bombing suspect began.

Now, this part is a little bit creepy. It turns out the suspect was
in the parade. He slipped into the crowd. He marched along with his
intended victims. That`s him there in the orange baseball hat there,
trying to scoot out of the frame. He appears to be carrying a camera to
document the destruction he hoped he was about to cause. You can see him
more clearly here.

FBI agents arrested Kevin Harpham, a neo-Nazi in Washington state in
march two months after finding the backpack bomb at the parade. This is
his mug shot. He pleaded guilty to two counts, including attempting to use
a weapon of mass destruction. He also admitted that the attack was
motivated by race. Harpham faces more than 30 years in prison.

The FBI did a lot right here. From day one their very aggressive
statements on this showed they were taking this very seriously. Those
strong statements from the FBI, I have to say, were part of why we covered
this story right from the beginning. They made no bones about playing this
down. They said it was a big deal from day one.

To catch the perpetrator in this case, they relied on some terrific
shoe leather investigation. Check this out. The hunt began, of course,
with the backpack found along the parade route. The bomb inside was made
of steel pipe filled with black explosive powder, as well as shrapnel
coated in rat poison.

Rat poison is an anticoagulant. So, the bomber wanted to make it
harder for the people he hurt to stop bleeding from their injuries.

The bomb was wired to a remote car starter. The kind you activated by
pushing a button on your key chain. The shrapnel in the bomb, the stuff
coated in rat poison, we now know was a bunch of fishing weights, just
ordinary fishing weights like ordinary non-violent, nonwhite supremacist
people get to use their fishing lines to stay under water so the fishing
bait can attract the fish.

The FBI found the same kind of fishing weights sold in packs of 10 at
a Wal-Mart. They then went through the sales records of 72 Wal-Mart stores
in the Pacific Northwest starting in 2010. And they found what they were
looking for, an unusual number of quarter-ounce fishing weight with sold in
packs of 10 in one week in November in one particular Wal-Mart store. And
look who bought a large number of quarter-ounce fishing weights in November
from that Wal-Mart.

Kevin Harpham -- he bought four packs of fishing weights in November
1st, 2010, along with some Kraft brand jet puffed marshmallow cream, some
milk and some food items. He also bought a food chopper.

He returned two days later and bought six more packs of those weights
so that`s 60 more pieces of shrapnel and four days after that, 30 more
weights, plus some more milk. And more marshmallow cream, because you get
really hungry when you make a bomb and the sugar makes you thirsty? I
don`t know.

The FBI also found the camera that Kevin Harpham bought so he could
take pictures at the Martin Luther King, Jr. parade. They still have the
pictures that he took of himself on that camera, although he had tried to
delete them. They also were able to isolate Kevin Harpham`s DNA on the
straps of the backpack that he put the bomb in.

Earlier on the show tonight, we talked about some FBI counterterrorism
training that seems to have gone very badly wrong, training materials for
FBI agents telling them they should think of Islam as an under-evolved
religion, that they should think of being religious as a sign of violent
tendencies when it comes to Muslims -- far-right conspiratorial stuff being
treated like real training at FBI. So, that was the bad news today about
the FBI and counterterrorism, as scooped by Spencer Ackerman for wired.com.

But while we are on the subject of FBI and counterterrorism, it is
frankly also worth pointing out something that the FBI got really, really
right. Congratulations on closing the Spokane, MLK Day bomber case and
thank you.

(COMMERCIAL BREAK)

MADDOW: OK. "Best New Thing in the World" today? It`s back, yes.

"Best New Thing in the World" today is a "making lemonade out of
lemon" situation. Some enterprising Americans figuring out a way to turn a
really bad situation into something that is --it it`s not less bad but it
is at least cute.

Here`s the situation. More than one out of every three bridges in
Mitch McConnell`s home state of Kentucky are structurally deficient or
functionally obsolete. More than one in three, they need fixing, including
urgently this one. This is the Sherman Minton Bridge. It`s a major artery
into and out of Senator McConnell`s home city of Louisville, over the Ohio
River to southern Indiana.

The Sherman Minton Bridge was closed on Friday, suddenly, with no
warning, when an inspection found a very important crack in a very
important load-bearing part of the bridge.

President Obama`s American Jobs Act that he has been stumping for
around the country would, if it passed, fast-track about 700 million bucks
to Indiana and about 500 million bucks to Kentucky right away, specifically
to do stuff like fixing broken bridges. But Kentucky senator, top Senate
Republican Mitch McConnell, has denounced the American Jobs Act as not
serious.

His Mitch McConnell plan for dealing with more than one in three
Kentucky bridges needing to be replaced is apparently so serious I he`s
keeping it secret.

But I promise a best new thing here and there is one. In the face of
rather monstrous traffic and detour adversity, like what is being faced in
southern Indiana and in Kentucky right now, in the face of that kind of
adversity, Americans innovate. That means a brand new every 45 minutes $1
ferry service across the Ohio River right now that did it not exist before,
which is particularly handy if you work right at the bridge abutment.

But still better, another option for getting across the Ohio River
there with Sherman Minton shut down. But it also means another kind of
innovation in the form of branding and merchandising.

When we first talked about the emergency shutdown of the Sherman
Minton Bridge on the show and the proverbial bomb that it was dropping on
Louisville area traffic, I described it as that region`s version of
"carmageddon," right? Los Angeles had what it called "carmageddon" one
weekend this July because L.A. had to shut down the 405 Freeway in both
directions for construction work.

Carmageddon went off without a hitch in the end because there are was
lots of warning, lots of advance publicity, and ultimately, it only lasted
a couple of days. In Louisville, though, I noted their Sherman Minton
Bridge version of "carmageddon" came with no warning and is indefinite.
Nobody knows how major the needed repairs are going to be to this bridge.
Nobody knows where the money is going to come from, particularly if
Kentucky`s home state Senator Mitch McConnell is now against fixing
bridges.

But when the Sherman Minton Bridge`s occasions a version of
carmageddon -- had I been as smart as two Louisville born engineer
brothers, I would have realized that this infrastructure disaster over the
Ohio River should not be called carmageddon but should be called
Shermageddon, for the Sherman Minton Bridge. They snapped up the domain
name, shermageddon.com where there`s a Shermageddon t-shirt, a Shermageddon
travel mug, there`s a Shermageddon bumper sticker, which seems particularly
apt, and naturally, there`s a Shermageddon trucker cap.

We tried desperately to get ourselves an official Shermageddon trucker
cap today from David and Michael Harp in time to show you one in the flesh.
Ours is apparently in the mail, due to arrive soon.

But in the meantime, we made our own mock-up of it in anticipation.
It`s not nearly as nice as the real thing, and for the "Best New Thing in
the World" Shermageddon brothers, I bow to your superior news-related
nickname-bestowing skills. Drive on.

That does it for us tonight. We`ll see you again tomorrow night.

Now, it is time for "THE ED SHOW." Good night.

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

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