updated 1/20/2012 12:19:18 PM ET 2012-01-20T17:19:18

Guests: Eugene Robinson, Joel Sawyer

RACHEL MADDOW, HOST: Thank you, Ed. That`s very kind. This is
getting so good, man.

ED SCHULTZ, "THE ED SHOW" HOST: It`s the truth, too.

MADDOW: All right. Thanks, man.

SCHULTZ: You bet.

MADDOW: Thanks to you at home for staying with us for the next hour.

We`re coming to you live tonight from the great city of Chicago on
what has been an astonishing day in the world of politics. We do not get
days like this very often. We must treasure them when they happen.

All right, first, of course, he was politically dead, then he came
back to life, then he was politically dead again. But tonight, Newt-mentum
is definitely back.

We`re now just two days out from the South Carolina Republican
primary, and look at this. Look at this.

Four new polls out today show Newt Gingrich now opening up the
narrowest of leads over Mitt Romney in South Carolina. The Republican-
leaning Rasmussen poll has Newt Gingrich now up by two points there. The
Democratic-leaning PPP poll has Mr. Gingrich up by six points. The
American Research Group poll shows Mr. Gingrich up by one point, and
Insider Advantage has him up by three.

Newt Gingrich has been surfing a wave of momentum in South Carolina
ever since his debate performance there on Monday night.

And today, what was already looking to be a very good week for Newt
Gingrich turned into a great week for Newt Gingrich.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R), TEXAS: I have come to the conclusion that there
is no viable path forward for me in this 2012 campaign. Therefore, today,
I am suspending my campaign and endorsing Newt Gingrich for president of
the United States.

(END VIDEO CLIP)

MADDOW: Rick Perry did not have to endorse anybody when he dropped
out of the race today. Most of the early reporting today, in fact, was
that he was not going to explicitly endorse any of his rivals. And
frankly, this is unsolicited advice for the governor, but it probably would
have made you more valuable going forward if you withheld your endorsement
for awhile.

But in the end, he decided to endorse. It was Newt Gingrich who won
the Rick Perry sweeps stakes today.

Mr. Gingrich also got a big endorsement today from the other perceived
end of the ideological Republican spectrum sort of, Mike Campbell, son of
one of the most iconic Republican governors, officially endorsed Mr.
Gingrich today as well. Mike Campbell had been a major Jon Huntsman
supporter in South Carolina and he was previously Mike Huckabee South
Carolina state chairman back in 2008. But as of today, now, he is for
Newt.

Shortly after that endorsement, Mr. Gingrich got word that 100 Tea
Party leaders, what is a Tea Party leader? Anyway, 100 Tea Party leaders,
whatever that means, from 25 different states, are reportedly about to come
forward to also endorse Newt Gingrich. The group will reportedly form a
coalition called "Tea Partiers with Newt."

Now, if Newt Gingrich wasn`t already having the greatest day ever, all
he had to do was Google news search the name Mitt Romney today and he would
feel even better about how his day was going. I mean, there are still a
few hours left in the day, so his fortunes could turn around, but Mitt
Romney is about to wrap up what has been sort of a horrific day for him in
this race.

After creating 48 straight hours of news coverage for himself by
acknowledging that he is one of the really, really rich people in this
country who only pays a 15 percent mini tax rate and then suggesting that
$375,000 he made in speaking in a year wasn`t very much money, after all
those kinds of revelations and gaffes from Mitt Romney, after all that,
here was the headline that Mitt Romney woke up to today, "Romney`s
investments in Cayman Islands raise new questions about GOP candidate`s
fortune."

So the uber rich guy candidate who only pays 15 percent in taxes, who
doesn`t think 370 grand is all that much money, who says he enjoys firing
people -- also, by the way, parks his money offshore in the Cayman Islands.

Now, ABC News first reported last night and the "A.P." reported today
that Mr. Romney has invested part of his millions in the Cayman Islands."
This money appears to be various retirement investments that aren`t
controlled by Mr. Romney himself. Now, while the Romney campaign admits
that he does, in fact, have millions of dollars stashed in the Cayman
Islands, the campaign says, quote, look at this, look, "Aides say he never
used the location as a tax haven."

See, they are parked in the Cayman Islands not to avoid paying taxes
or anything, the thing you need to know about Mitt Romney`s millions is
that they really like to have a nice view. They like warm weather, Mr.
Romney`s millions text him constantly about their respiratory problems,
they`d like to be someplace more temperate. Please, Mitt, can we go swim
with the sting rays?

What`s your money doing in the Cayman Islands if it`s not there to
avoid taxes? Really? Is it the view? Come on.

Well, we are talking about front page headlines though, there was also
this front page about the full headline in Florida`s "Tampa Bay Times"
today. "Miami factory: one side of Bain." Hundreds lost their jobs, Mitt
Romney`s company made $242 million.

Florida`s the next stop in the Republican presidential race. How`s
that for a welcome to town Mitt Romney greeting.

But, fortunately for Mr. Romney, it was not much easier for him out in
person on the campaign trail in South Carolina today. The whole
interacting with live humans thing has never really been Mr. Romney`s
specialty as a candidate.

Here`s what that looked like today in Charleston, Carolina.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Tomorrow`s the anniversary of Citizens United.
What will you do to repeal Citizens United? What will you do to repeal
Citizens United? Marriott just gave your super PAC $1 million, what will
you do to repeal --

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: No, no, no. Hi, how are
you?

UNIDENTIFIED MALE: What will you do to support the 99 percent seeing
as how you are part of the 1 percent?

ROMNEY: Let me tell you something, America is a great nation because
we`re a united nation. If you got a better model, if you think China`s
better, or Russia`s better, or Cuba`s better, or North Korea`s better, I`d
be glad to hear all about it. America`s right and you`re wrong.

(END VIDEO CLIP)

MADDOW: America`s right and you`re wrong, thank you. Thank you.

Some people are saying that was a great moment for Mitt Romney on the
campaign trail today. Others are saying, whoa, you sure you`re handling
the stress OK, buddy? Going straight to North Korea, really?

The thing about being a presidential candidate is that you don`t have
to do this whole thing on your own, right? You not only have a campaign
staff, you have campaign surrogates who are supposed to have your back.
They are supposed to defend you. They`re supposed to essentially be your
voice in the media. You can`t be everywhere. But you`re trained political
surrogates can cover for you.

Even that did not work out for Mitt Romney today. Mitt Romney has
been under fire for months now for refusing to release his tax returns. He
now says that he might release them but not until April.

Here was the great defense of that position that Mitt Romney got today
from his highest profile campaign surrogate, New Jersey Governor Chris
Christie.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I`ve released my tax returns
every year as soon as I file them. I released them historically when I ran
for governor. I just say get the stuff out there. So, if Governor Romney
would ask my advice, just get the stuff out there. If they are interested
in your tax returns and running for the president of the United States or
governor of New Jersey, let people see them.

(END VIDEO CLIP)

MADDOW: Not helping. Worst surrogate ever. Chris Christie then went
on FOX News to encourage Mr. Romney to release his tax returns, what`s he
hiding anyway? That was a day after appearing on this network to do the
same thing.

Just in case things could not get any worse for Mitt Romney`s campaign
today, there was just one teeny tiny other thing, one other teeny tiny
detail that emerged today.

It turns out he didn`t actually win Iowa. Today, Iowa officials came
out to declare that, yes, it was actually Rick Santorum who got more votes
in Iowa. We`re going to have a lot more on that later in the show.

All in all, this was a bad day for Mitt Romney and it was probably
Newt Gingrich`s best day on the campaign trail, at least in a very, very
long time.

But because the gods of politics have evil senses of humor, even into
Mr. Gingrich`s very, very sunny day today, a little rain had to fall. And
so even as today was Newt Gingrich`s best day yet on the campaign trail,
today was also the worst possible day for Mr. Gingrich.

Heading into this year`s presidential nominating race on the
Republican side, the ginormous comfortable elephant sitting in the middle
of Newt Gingrich`s tiny little living room was the fact that he was
essentially trying to do the impossible. He was trying to win the
nomination of a socially conservative party with early nominating contests
in places like Iowa and South Carolina as a man who is on his third
marriage, a man who had tried to impeach the president over an affair while
he, himself, was having an affair and who had inveighed against those
horrible Democrats and they`re undermining of marriage while he was burning
through a hat trick of his own.

Mr. Gingrich`s second wife, Marianne Gingrich, has mostly stayed out
of the public eye since her marriage with Mr. Gingrich ended. But she did
come forward in August 2010 for an interview in "Esquire" magazine. She
told "Esquire" among other things, that when Mr. Gingrich acknowledged his
ongoing infidelity to her, quote, "he asked her to just tolerate the
affair," an offer she refused.

Well, now, just two days before the South Carolina primary, with Newt
Gingrich surging up in the polls, Marianne Gingrich has decided to go
public again, except this time she`s doing it on camera.

(BEGIN VIDEO CLIP)

MARIANNE GINGRICH, NEWT GINGRICH`S EX-WIFE: I said to him, Newt,
we`ve been married a long time. And he said, yes, but you want me all to
yourself. Callista doesn`t care what I do.

BRIAN ROSS, ABC NEWS: What was he saying to you, do you think?

M. GINGRICH: He was asking to have an open marriage, and I refused.

ROSS: He wanted an open marriage?

M. GINGRICH: Yes, that I accept the fact that he has somebody else in
his life.

ROSS: And you said?

M. GINGRICH: No, no. That is not a marriage.

(END VIDEO CLIP)

MADDOW: Not only is that interview going to air in its entirety on
ABC later tonight, but ABC saw fit to release that specific part of it
where he says that he wanted an open marriage. They saw fit to release
that specific part of it before the last Republican debate in South
Carolina before South Carolina votes -- a debate that, you should know, is
partly sponsored by the National Organization for Marriage. Tonight`s
debate was put on by CNN and the Southern Republican Leadership Conference.
The National Organization for Marriage is one of the main sponsors of the
Southern Republican Leadership Conference this year.

So put your hands together for the politics gods, ladies and
gentlemen, they have outdone themselves.

Today, NBC`s Chuck Todd tweeted that when the books are finally
written about this campaign, there will be whole chapters that are just
titled "January 19th."

Joining us now from Charleston, South Carolina is a Pulitzer Prize-
winning columnist for "The Washington Post" and a Palmetto State native,
Mr. Eugene Robinson.

Gene, is this the kind of day we live for, or am I overreacting?

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: This is the kind of day we
live for, Rachel. This is the absolute best place you can possibly be,
come down here -- unless you want to go with me to like visit Mitt`s money
in the Cayman Islands, I think that will be fun, too.

MADDOW: We can swim with the sting rays and with Mitt`s millions. We
need to swim with the sting rays while we`re down there.

Let me ask you, Gene, because you and I were both together, completely
wrong about Rick Perry. You and I both thought Rick Perry was going to be
the real threat to Mitt Romney, that he was going to be the real candidate.
And today, kaput.

Does that have any effect on the race at this point?

ROBINSON: It does have an effect on the race, Rachel. And, yes, we
were completely wrong. We saw he was really going to be a force in this
race. Look, he doesn`t bring many voters with him, right, he was down in
the single digits here in South Carolina. So, it`s not as if he`s bringing
legions into the Gingrich camp.

But doing it today, it just reinforces this idea, this reality, of
Gingrich momentum in South Carolina. And I`ll tell you, I`ve been here all
week, and he`s gaining. This momentum thing is real.

MADDOW: When you talk to people in South Carolina -- obviously,
you`re from the state, you know the state well. What do you think is
behind Newt-mentum? What is it about Newt that is driving people toward
him or what is it about Romney that`s driving people away from him?

ROBINSON: Well, you know, it`s some of -- some of column A and some
of column B. I mean, what is it about Newt? It`s the anger. It`s the
fact he is in everybody`s face and Republican voters here are looking for
somebody to be in Barack Obama`s face the way Newt Gingrich is. And the
way Mitt Romney struggles to be, you know, that little episode today, you
know, going straight to North Korea.

I mean, you don`t go straight to North Korea when you`re trying to
argue economics with Occupy Wall Street. And so, it`s part Mitt Romney.
It`s all the money stuff is really going to -- going to hurt him or rove
from the support. You have to kind of look at all of this, $370,000, not a
lot of money, Cayman Islands, gee, you know, who is this guy, and is he
really going to have our interests at heart?

MADDOW: In terms of the Newt surge and people paying renewed interest
to Mr. Gingrich, there is this new thing from his ex-wife talking about his
request for what she says -- what she describes as his request for an open
marriage. Obviously, that`s something that the Gingrich campaign had to
know what`s coming. It`s not like she`s been totally out of the public
eye, she has talked about this to a magazine in the past.

What kind of an impact do you think it`s going to have in South
Carolina? Is it a family-values electorate?

ROBINSON: Yes, it`s a family-values electorate. I frankly don`t see
a huge impact on this primary campaign.

Now, I think it`s a kind of thing as a character issue that can erode
support for Gingrich over time, so if he were to make it to the general
election, for example, this -- plus, you know, other things about
Gingrich`s personal life, I think would cost him support.

But there`s a sort of knee-jerk reaction against the media, actually,
which, of course, Gingrich is playing on. So, in the first question in the
debate tonight was about the alleged open marriage, and Gingrich frankly
knocked it out of the park by attacking the media and say, how dare you ask
me such a question, you silly media person -- and got a standing ovation.

So he knows how to play this, and in the short-term, I frankly don`t
think it`s going to hurt him.

MADDOW: Sounds like -- sounds like you think that Newt Gingrich
either is going to win or will come very close to winning in South
Carolina.

What do you think about Rick Santorum`s traction? Obviously, Santorum
got weird retroactive news that he maybe sort of won Iowa today. He`s also
getting a bunch more endorsements, particularly from social conservatives.

What do you see for Santorum`s prospects when you`re talking to South
Carolinians?

ROBINSON: You know, I think the timing for Santorum was just bad.
Social conservatives were late piling on the news that he actually won
Iowa, comes on a day when all this stuff exploding about Gingrich and
Romney, and it doesn`t have the impact that perhaps it might. You don`t
hear a lot about Santorum here, and I think he`s got to be disappointed at
this point, because this ought to be a good state for him.

I don`t think it`s going to be a very good state for him. I think
Gingrich will either come very close to winning or win this primary.

MADDOW: It`s amazing. In the Tea Party year, we get down to the
candidates that are Mitt Romney, Newt Gingrich, Rick Santorum, and Ron
Paul. There`s the fresh-faced campaign, right?

And in the big social conservative family values state, we get Rick
Santorum going nowhere and Newt Gingrich on the night that his ex-wife says
he wanted an open marriage on ABC News, we get him running off with the
South Carolina primary. I love this job.

ROBINSON: Is this a great country or what? You got to love it,
Rachel.

MADDOW: Both the country of the United States of America and the
country of United States of South Carolina.

Pulitzer Prize-winning columnist for "The Washington Post," MSNBC
analyst, and man in his element, Eugene Robinson -- thank you so much, my
friend. Have fun.

ROBINSON: OK, sure will.

MADDOW: Thank you.

All right. It says a lot about a day like today in politics that Newt
Gingrich`s ex-wife coming out and giving an interview that she says should
destroy his chance at the presidency, that happening, and Rick Perry
dropping out of the race just after he said he`d never, never, never quit,
it says a lot about a day like today in politics, that those two things,
the ex-wife and Rick Perry quitting, those were not actually the big
surprises in today`s politics news.

What was a bigger surprise than those two things is coming up next.

(COMMERCIAL BREAK)

MADDOW: You`ve probably heard about that anonymous flyer back in the
year 2000 when John McCain was running against George W. Bush in South
Carolina that said that John McCain secretly had an African-American child.
Probably heard about that.

Did you also know, though, about the fake happy Mormon holiday cards
that were sent to South Carolina voters to freak them out about a certain
Mormon Republican candidates religion? That`s dead ahead.

(COMMERCIAL BREAK)

MADDOW: In some ways, today was a good day to be Rick Santorum. He
got to appear alongside Tony Perkins of the Family Research Council at a
values voter rally in Charleston, South Carolina. So up goes his uber-
conservative street cred.

He picked up the endorsement of James Dobson, the founder of Focus on
the Family, who called Mr. Santorum the man of the hour. Mr. Dobson urged
his countrymen to join him in supporting the Rick Santorum campaign. That
was the good news in Rick Santorum`s day.

But then it got a lot better. More than two weeks after coming in
second place in the Iowa caucuses, today, Rick Santorum won the Iowa
caucuses, sort of, maybe. The Iowa Republican caucuses, as we`ve discussed
on this show before are not run by the state of Iowa. They are run by the
Iowa Republican Party.

And so this year, here`s what happened late on caucus night. The guy
you`re about to see is the chair of the Republican Party in Iowa.

(BEGIN VIDEO CLIP)

MATT STRAWN, IOWA GOP PARTY CHAIRMAN: Congratulations to Governor
Mitt Romney, winner of the 2012 Iowa caucuses. Congratulations to Senator
Santorum for a very close second place finish in an excellent race here.

(END VIDEO CLIP)

MADDOW: Mitt Romney declared the winner of the Iowa Republican Party
chairman on caucus night. Only those were not the certified results they
were using to declare a winner that night. According to their rules, we
had to wait for the certified results for a couple of weeks, but in the
mean time --

(BEGIN VIDEO CLIP)

STRAWN: Congratulations to Governor Mitt Romney, winner of the 2012
Iowa caucuses.

(END VIDEO CLIP)

MADDOW: So the Iowa Republican Party declares Mitt Romney the winner,
even while they set out to certify the results. Now, we were expecting, as
the party had announced, we would get certified results two weeks later.
See, it says right there, within 14 days.

But 14 days later, which was Tuesday of this week, the Iowa
Republicans said they weren`t ready. They said they`d certify the results
at the end of this week, that the deadline for getting precinct results
wasn`t even until a day after what we all thought was 14 days.

In any case, the following day, Wednesday, the Iowa Republicans said,
OK, they`ll release the certified results the next morning, which would be
Thursday morning, which would be this morning. So this morning, everybody
wants to know who won. Is Mitt Romney still the winner of the Iowa
caucuses now that the vote is certified?

Very early this morning, "The Des Moines Register" had an answer, sort
of. Turns out the results from eight precincts were missing, so who won
the Iowa caucuses? Chairman of the Iowa Republican Party told "The Des
Moines Register," quote, "I can`t speculate without documentation from the
missing eight precincts."

The executive director of the state Republican Party told them it`s a
split decision.

So, Iowa Republicans are telling "The Des Moines Register" that
they`ve decided Mitt Romney and Rick Perry tied the Iowa caucuses or maybe
there`s no result. Not because the candidates got exactly the same number
of votes, but because it`s unknown. They just can`t figure out who really
won.

Rick Santorum didn`t see it that way, though.

(BEGIN VIDEO CLIP)

SANTORUM: I think it`s important to understand not only did we win
the certified vote, but if you`d add all the other votes, we`d win even
more. So, this is a solid win. It`s a much stronger win than what
Governor Romney claimed to have on the day that the uncertified vote that
had him up eight.

(END VIDEO CLIP)

MADDOW: The Santorum campaign telling "The New York Times" Mitt
Romney had actually called Mr. Santorum to concede Iowa. But then
according to the Romney campaign, they said that wasn`t a concession call,
Mr. Romney was just calling to congratulate Rick Santorum on their tie in
Iowa.

Meanwhile, the Iowa Republican Party, having previously thrown up
their hands and declared that they couldn`t figure out who won, apparently
later in the day decided that there was a winner, the chairman of the party
called into a radio show to say who won.

(BEGIN AUDIO CLIP)

STRAWN: It is indisputable that the certified caucus result had Rick
Santorum winning by 34 votes. I feel I owe Senator Santorum`s supporters
and his folks an apology, because I think the fact that he was leading and
won the 1,766 precincts, I think, seemed to get lost in the focus over the
eight precincts whose forms we weren`t able to obtain at party
headquarters.

JAN MICKELSON: So are you declaring this, then, a victory for Rick
Santorum?

STRAWN: Yes, the certified vote results.

(END AUDIO CLIP)

MADDOW: You`re declaring this a victory for Rick Santorum? Yes, yes,
certified vote result. Big apology to Rick Santorum, he totally won,
there`s no tie, there`s no split, nothing like that. Rick Santorum wins,
so says the Iowa Republican Party chairman on the radio until a press
conference about an hour later.

(BEGIN VIDEO CLIP)

STRAWN: The one thing that we can`t say is we do not have the
certified -- we can`t certify every precinct in the state.

REPORTER: Can we everybody say who the winner is or do we kind of put
down an asterisk or what`s the right way to --

STRAWN: That`s a decision you have to make, and obviously, the
campaigns and pundits will make their determinations on that.

(END VIDEO CLIP)

MADDOW: So, the candidates and the pundits get to decide who won
Iowa. So says the Iowa Republican Party, which runs the caucuses.

Tell me again why these guys in Iowa are entrusted with the great
honor and privilege, not to mention the monetary windfall that comes with
first in the nation status. In 2008, the candidates are estimated to have
spent $51 million in Iowa. This time around, more than $12 million was
spent on ads alone.

Every presidential election season, Iowa gets not just millions of
dollars spent in the state, they also get a year`s worth of attention for
even their most parochial issues from the most powerful political figures
in the country and they get the whole of the national media essentially for
a year, all for something they do not take seriously enough to capably pull
off. We don`t know who won the Iowa caucuses, and the Iowa Republican
Party doesn`t really seem to care about it.

Enough, OK? Next time around, first in the nation maybe we should
draw straws, anyone?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN (R), MINNESOTA: I want to thank the Tea Party
Express and Tea Party H.D. for inviting me to speak this evening.

(END VIDEO CLIP)

MADDOW: That was Republican Congresswoman Michele Bachmann last year,
giving the second break away, rogue, Republican response to the State of
the Union Address last year. Congressman Paul Ryan gave the official
Republican response, and then there randomly was this other one, which a
Republican pr firm in California called the official Tea Party response.

There`s nothing official about it, except those of us who work in TV,
it felt like an official reminder from the heavens that you have to look in
the camera.

But despite the confusion caused by the fake official Tea Party second
Republican response a year ago, this year, they are doing it again,
upstaging the official Republican Party response again, and this year, it`s
not going to be Michele Bachmann, it`s going to be Herman Cain who does it.
And the fact that will upstage the real Republican response to the State of
the Union would in any normal year be sort of a curse for the Republican
Party.

This year, though, it might be a blessing or at least a welcomed
distraction. Why that is coming up.

(COMMERCIAL BREAK)

MADDOW: Back in the Republican primary in 2000, Arizona Senator John
McCain ran into trouble in South Carolina when somebody started a smear
campaign against him, the charge, utterly baseless, but politically potent.
It was that Senator McCain had fathered an African-American child out of
wedlock and was now posing her as one of his adopted children.

A classic whispering campaign with no head and infinite tendrils, the
smearing was carried by mysterious push polls that asked South Carolina
voters about the fake story, and also dozens of calls to talk radio, asking
talk radio hosts for their opinion on this made-up story.

In the Republican primary in 2008, more trouble in South Carolina,
more dirty tricks, this time from Mitt Romney making his first run for
president. Somebody decided to stoke evangelical fear of Mr. Romney`s
religion in South Carolina by mailing out bogus holiday cards that quoted a
book of Mormon passage about the exceedingly fair and white holy virgin and
another endorsing polygamy. The card was labeled, paid for by the Boston,
Massachusetts, temple, as in Mormon temple.

Romney campaign said they had not sent these cards and that this kind
of trickery has no place in American politics, and, of course, it doesn`t -
- except every four years in South Carolina when it comes back.

Last night, somebody put these flyers on the wind shields of cars at a
political event in the town of Greenville. The event was a forum hosted by
an anti-abortion group. "Mother Jones" reporter Tim Murphy took a picture
of the leaflet that was left on his car. It read, quote, "Do you know that
Rick Santorum`s wife, Karen, had a six-year affair with an abortionist?
This story is now hitting the news, but you can hear for yourself." Then
it quotes the doctor, the person who Rick Santorum`s wife supposedly had an
affair with as saying that Rick Santorum was, quote, "pro-choice and a
humanist," which, of course, is a terrible, terrible thing for a Republican
in South Carolina to be accused of.

The flyer includes a link to a newspaper story in really long form,
like you`re going to run home and type that all in, right, 1.100722, right?
Yes, here`s a link, click it. Oh, it`s paper. Oh, but it`s on hot pink
paper so you can tell this matter is urgent. It`s electric. It`s almost
on fire.

Run home and type in this crazy long link right now before the paper
explodes. South Carolina politics, where dirty pool is an art form, right?
Whisper campaigns are how politically operatives start trying to winnow the
field before voters get a chance.

In South Carolina, they sort of brag about this. They brag that their
politics are a blood sport, it`s where Republicans go to get tested. It`s
where they go to put hair on their chest, but the funny thing is, blood
sport South Carolina, where your smear artists get -- once your smear
artists get done putting pink flyers on windshields and the robocall stuff
and the primary voting booths open, you guys in South Carolina, y`all kind
of vote boring.

I mean, just got these really, really scummy political tradition, but
once you vote -- rough and tumble, bare knuckle, there will be mad South
Carolina Republicans turns out have a serious Jones for pretty boring,
mainstream establishment candidates. In 1980, South Carolina Republicans
who, of course, went on to win the national nomination. In 1988, they
picked George H.W. Bush, also the future nominee. In 1996, they picked
eventual nominee Bob Dole, bless his heart. 2000, George W. future nominee
and two-term president.

And in 2008, the man they treated so badly returned to South Carolina
and won, John McCain.

So yes, South Carolina Republicans, there will be mud. We have seen
that already, and then you`ll just vote for the establishment guy like
everybody else, maybe. This year, maybe not.

Joining us now for the interview is Joel Sawyer. Joel was most
recently Governor Jon Huntsman`s state director in South Carolina. He was
also former Governor Mark Sanford`s spokesman during some very trying
times. He`s the former executive director of the South Carolina Republican
Party.

Joel, it is very good to have you with us. Thanks for being here.

JOEL SAWYER, FMR. HUNTSMAN SC STATE DIRECTOR: Hey, thank you, Rachel.
You`re going to make everybody stop coming here with that intro, though.

MADDOW: I was wondering how that sounds to you. Are you one of the
people that hears people talk about the dirty tricks of South Carolina and
think yes, that`s us, we`re bad asses? Or does that history trouble you?

SAWYER: No, the things you refer to are absolutely despicable, but I
think that there are two things kind of get clouded together. One, South
Carolina has certainly been home to some really unspeakably dirty political
tricks. But at the same time what that kind of combines with is by the
time you get to South Carolina, Iowa`s done, New Hampshire`s done, the
field has been winnowed a little bit. And so, the attacks are more
focused, the elbows are a little bit sharper.

So, as much as there`s some attacks that we would all like to forget,
the candidates attacks against each on substantive points I think become a
little bit more focused. And so, it`s a lot more confrontational
adversarial primary environment you have here in South Carolina just by
nature of where we are in the process than what you had in New Hampshire
and even Iowa.

MADDOW: So, when you see stuff that every sort of acknowledged is
despicable, the kind of stuff that was used against John McCain, I would
say this flyer against Rick Santorum`s wife, who deserves none of this --
what kind of effect do you think it has in the campaign? Does -- I mean,
obviously, it gets picked up and covered, not just nationally but also in
South Carolina. What do you think the effect is?

SAWYER: Sure. You know, ultimately, I think it depends on how much
money is behind it. I mean, you know, what you saw against John McCain in
2000 was a coordinated effort with a lot of time and a lot of money put
behind it. You know, here quite candidly what happened with Santorum, not
taking anything away from its despicable nature, but it was flyers on cars
in an event in the upstate where quite honestly, I think that the media`s
coverage of the event has had far more impact than what it would have done
to the people who just walked up and picked this thing off the windshield.

So, in this case, I think because of our reputation in South Carolina,
you know, this particular incident has gotten a lot more coverage than it
would normally. I mean, there were flyers put on cars for all kinds of
things in Iowa too, but I think it is magnified here because of an
unfortunate history.

MADDOW: Joel, I was talking earlier in the show with Eugene Robinson,
who is in South Carolina, where you are tonight. He`s also from the state.
And he was saying that even though South Carolina Republican voters say
they are family-values voters, that the Newt Gingrich revelations from his
ex-wife tonight, which I know he`s already been asked about at the debate,
that those things are not going to turn Republican South Carolina voters
against him. That`s not going to hurt his chances.

I thought about asking about this when I saw that Jenny Sanford, who
was South Carolina first last to Mark Sanford, through all of that, said
today that Newt Gingrich could never get her vote.

How do you think the Gingrich marriage issue is going to resonate in
South Carolina?

SAWYER: I don`t know that it will. You know, I think that there is
going to be a phenomenon -- quite honestly, I think and this is kind of
counterintuitive, it may generate sympathy for him.

Having this kind of dirty laundry aired this close to a primary,
people don`t like that. Look, the guy`s been divorced twice. Everyone
knows he`s had extramarital affairs, hearing details of it is not going to
change people`s votes at this point.

You know, he`s talked a lot about being imperfect, talked a lot about
forgiveness -- so, you know, you mention evangelical voters, as important
as family values are to them, the idea of grace and forgiveness is very
important to them also. And because he`s been candid about having asked
for forgiveness and changing his life, you know, I think that there might
be sympathy for him over that quite honestly.

MADDOW: You know, I think that that -- there was some very good
conversations I think around the country about your former boss, about Mark
Sanford, around that issue of forgiveness when his marital issues were
dragged so brightly into the national stage, and the issue, for me, about
the newsworthiness of that was whether or not he had ever campaigned on
family values, whether or not he`d ever made the sanctity of marriage and
the superiority of his own type of marriage, versus other people`s type of
marriage, whether he`d ever made that a political issue.

Mr. Gingrich in this campaign has been signing fidelity pledges, he`s
been talking about the left undermining the sanctity of marriage and posing
a danger to traditional marriage. I mean, I recognize the redemption thing
is real and that people do -- they don`t mind a person who`s flawed.

But doesn`t it put him in point and laugh at him territory when he
tries to be sanctimonious about people`s marriages, given who he is?

SAWYER: Look, I think any time you have had the history that he has
had and then you`re saying the things that you are now, you open yourself
up to criticism -- and that`s something every voter is going to have to
take into account, you know, whether the transformation and whether the
redemption is real or whether he`s being hypocritical.

You know, that`s something every voter is going to have to render
their own judgment on.

MADDOW: Joel, let me ask you, it seems like Mr. Gingrich is surging
now. If he ends up winning in South Carolina or coming in close to Mr.
Romney, what do you think that does? How do you think that inflects the
campaign moving into Florida and moving on? How important do you think it
will be?

SAWYER: I think it will make it really, really interesting.

And, you know, the conventional wisdom was if Romney won here, that it
was going to be over. And I don`t necessarily buy that conventional
wisdom. I think it would have been true in year`s past. But here we have,
in this election, something we`ve never had before, and that`s the
existence of super PACs. And so, once you get into Florida, even if a
campaign has no momentum and is running on fumes, the super PACs can
sustain that candidate`s efforts far longer than a candidate could -- his
own could have sustained him on his own.

So, I think even if Romney wins here, we`re going to have a campaign
into Florida, possibly beyond.

MADDOW: Joel Sawyer, former director of Jon Huntsman`s campaign in
South Carolina, former executive director of the South Carolina Republican
Party and somebody who I really enjoy talking with -- Joel, thank you for
being with us tonight. It`s really nice to have you here.

SAWYER: Thank you, Rachel. Likewise. Absolutely.

MADDOW: All right.

Right after this show, on "THE LAST WORD," Lawrence O`Donnell helps to
break down the Republican debate fresh and hot, do not miss it. And here,
the Republican chosen to respondent respond to President Obama`s State of
the Union Address and the angry mess in his hometown that he`s dragging
into the national spotlight. This seriously is the best day in politics
ever. More ahead.

(COMMERCIAL BREAK)

MADDOW: I did not know if we were going to be able to find a best new
thing in the world today, because obviously, the best new thing in the
world today is what happened in politics today. But the news gods gave us
something I never would have expected, the news gods gave us Newt Gingrich
nose thief. It really is the best new thing in the world. That`s coming
up.

(COMMERCIAL BREAK)

MADDOW: President Obama will deliver the State of the Union Address
next week, and following his speech, the Republican Party will give its
response. It`s a big deal to be the person who delivers that response.
You`re addressing the nation right after the president gives this big,
important, constitutionally-directed speech.

So, parties aim to pick rising stars, right? People with the gravitas
to do the honors and people who they want to get a lot of attention.

Today, the Republican Party announced their pick to give their
Republican response to the union, it`s Indiana Governor Mitch Daniels.

And here`s why they`ve done that. Here`s what the Republicans say
about what they are communicating to the nation about choosing Mitch
Daniels. They say he has, quote, "compiled a solid record of effective
government and fiscal responsibility, making him well-suited to outline
Republicans` better solutions to the challenges Americans are facing.

John Boehner added Mitch Daniels is a fierce advocate for smaller
government and has the record to prove and he has the record to prove."

"He has the record to prove it."

You want to know what Mitch Daniel`s last job was. He was George
Bush`s budget director. Remember the budget under George W. Bush?

This is what happened to the budget while Mitch Daniels was in charge
of the budget. When he started as Bush`s budget guy, we had a nearly $130
billion budget surplus. By the time he left, we had an almost $380 billion
budget deficit. Thank you, Bush tax cuts.

Mitch Daniels` other responsibility under President Bush was
estimating the cost of the Iraq war, which he said would probably cost $50
billion or $60 billion, or so. This is the actual cost of the Iraq war,
$800 billion. Mitch Daniels estimated, and he refused to provide specifics
at the time, that it would cost less than a tenth of that amount.

So that`s the Mitch Daniels` record. That`s his fiscal record that
the Republicans want to highlight with their state of the union speaker
this year. Yes, of course, that is all in the past. That`s all Mitch
Daniels` past, that`s his resume.

What about his time since? What about his time since as Indiana
governor? Yes, what about that?

(BEGIN VIDEO CLIP)

(CHANTING)

(END VIDEO CLIP)

MADDOW: This is what it was like in Indiana during Mitch Daniels` own
state of the state address earlier this month. I don`t know if anyone
heard him give that address over the hollering and protest hullabaloo
outside the legislative chamber while he was trying to speak.

Indiana is alive with outrage at Governor Mitch Daniels`s efforts to
strip union rights now. Those efforts have even lit up a whole new part of
the Indiana Republican Party that had not been activist before, or at least
had been loyalist before, but is now pledging to go after any Republican
who votes to support Governor Daniels` union-stripping right to work
legislation.

The group, which is calling themselves Lunchpail Republicans, has
formed a PAC. They say they`ve already raised hundreds of thousands of
dollars. Today, they wrote to Indiana Republican legislators, telling them
not to be intimidated by their own party`s leadership into voting to strip
union rights.

The Lunchpail Republicans say they will financially support, they will
have the backs of any Republican who votes against Mitch Daniels on
stripping union rights in the Hoosier State.

The Super Bowl is in Indiana in a couple of weeks, Indianapolis. And
the NFL players` association has been saying very loudly and repeatedly
that they are on the side of the Democrats and the Lunchpail Republicans.
They are against Mitch Daniels` union-stripping bill.

The pro-union rights protesters at the statehouse have now started
chanting "Occupy Super Bowl," the Indiana AFL-CIO says it`s not an idle
threat. They said today that the Super Bowl is an opportunity to highlight
how inhospitable Indiana is becoming for working men and women.

But before the country turns its eyes to Indianapolis and the Super
Bowl, and its protests against the Republican governor there, supported by
the NFL players` association, before the country turns its eyes to the
Super Bowl, first, the country will turn our eyes to the State of the Union
Address, and immediately thereafter to that Indiana governor who is
dragging his state into this huge, embarrassing, and very unpopular fight.

And he`s the guy who the Republicans want to be seen as their star
player right now.

(COMMERCIAL BREAK)

MADDOW: OK. Best new thing in the world -- there will never be
another campaign image that`s as good as this one, face it. This photo of
Mitt Romney in Iowa in October of 2007 is obviously the greatest campaign
trail photo of modern times. It was taken by a photographer named Brian
Snyder (ph) for "Reuters". There will never be another campaign trail
photo as good as that photo. I mean, look at it!

And in 2008, the gettings were so good in terms of campaign trail
photos that the famous Romney Fudge photo even had a close second runner-
up, with this one. Right? Remember this one? I still have no idea what
was going on in this picture. But this, too, is a pretty amazing campaign
photo. This one was taken by Jim Bork (ph), also for "Reuters".

So between our winner and our first runner-up, obviously, 2008 will
never be surpassed in terms of genius photos from the presidential campaign
trail.

That doesn`t mean, though, that we`re not always looking for
contenders in 2012. Not that long ago, we thought we had a pretty good
possibility with this one, a friendly, slightly overactive baby sticking
his fingers in the president`s gob. That was a pretty good one, especially
because of the obliviousness of dad there, or older brother, you know, the
bald guy.

Anyway, then I had high hopes from the really animated strange speech
that Rick Perry gave in New Hampshire to that anti-gay group up there. It
was so visually stunning, that speech -- I thought for sure there would be
an important gesture or facial expression shot at that speech by a still
photographer. But there really wasn`t.

When Governor Perry -- God rest his campaign -- when Governor Perry
cuddled the syrup at the end of that speech, it was possible to get a nice
video screen grab of that, which you see there, him sort of caressing the
syrup.

But it`s just -- it`s just not the same as a brilliant still image.
And so baby`s fingers stuck in the president`s mouth, pretty good; Rick
Perry puts the move on some maple syrup, nice in theory, but not quite,
nah.

We were beginning to give up that the 2011 presidential campaign would
produce a world class, unforgettable, anti-iconic still image like the last
campaign did. We were worried until we checked the wires today.

Behold, America, we have a contender. This exists. And this exists
on the day that Newt Gingrich appears to surge into the lead in South
Carolina, right before his ex-wife`s "he wanted an open marriage" interview
airs on the night of the sanctity of opposite sex marriage sponsored
conference/debate. This exists.

And what`s going on in this picture? I don`t know. And neither do
you.

The photo was taken for the associated press by Nathan Grey (ph) of
the "Anderson Independent Mail" newspaper at Mutt`s Barbecue in Easley,
South Carolina. The caption unhelpfully explains, Republican presidential
candidate, former House speaker, Newt Gingrich, pinches the nose of Bonnie
Ellison, age 78, of Easley, South Carolina, while shaking hands with
supporters.

Yes, clearly, he is pinching -- yes, he is doing that. But why is he
grabbing her nose? I mean, other people were getting their hands shaken at
that event, but Ms. Ellison got her nose grabbed. He just reached right
out and grabbed her face?

Again, why? Nobody knows -- which is part of the wonder and
perfection of it.

America, it turns out, 2012 is going to be a contender after all. I
live for days like this in politics. I`ve got to tell you. I mean,
liberals think the best thing in the world right now is that Newt Gingrich
is back in contention, but everything about today`s news best new thing in
the world.

All right. That does it for us tonight. We will see you again
tomorrow night from New York City.

Now, it`s time for "THE LAST WORD" with Lawrence O`Donnell.

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

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