updated 1/24/2012 10:32:10 AM ET 2012-01-24T15:32:10

Guests: Michael Isikoff, Alan Grayson, Craig Schneider

RACHEL MADDOW, HOST: Good evening, Ed. That`s going to be fun
tomorrow. We`ll be here -- I`ll be anchoring in New York, and we`ll be
going to you at the rotunda for the on the scene response.

ED SCHULTZ, "THE ED SHOW" HOST: You get a feel a real -- before you
get a real feeling of how much they really love him and how they don`t like
what`s being said. I`ll look forward to that. Thank you.

MADDOW: That`s right. Me, too. Thanks, Ed.

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

Breaking news: presidential candidate Newt Gingrich has this evening
just released the contract he entered into with the federal housing agency
Freddie Mac. NBC investigative correspondent Michael Isikoff has these
newly released documents. He has been going through them. He`ll be
joining us in just a moment to tell us what exactly has been released
tonight and whether the story told by those documents comports with Newt
Gingrich`s previous explanations of exactly how he earned that money from
Freddie Mac.

Conservatives, of course, have developed a critique of what happened
during the financial meltdown at the end of the Bush presidency, a critique
that plays down the importance of the deregulation of Wall Street and plays
up the importance of Freddie Mac and Fannie Mae and other government
instruments promoting home ownership.

And so, it has been a conservative line of attack against Mr. Gingrich
that he took consulting fees from a housing-related public agency. He was
under contract with Freddie Mac for roughly six years. Mr. Gingrich has
done himself no favors in responding to that conservative criticism when
his first instinct was to say that he wasn`t paid for lobbying or really
for consulting, he was more paid as a historian.

(BEGIN VIDEO CLIP)

JOHN HARWOOD, CNBC: Your firm was paid $300,000 by Freddie Mac in
2006. What did do you for the money?

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I offered advice. My
advice as a historian when they walked in and said to me, we are now making
loans to people with no credit history.

(END VIDEO CLIP)

MADDOW: Historians all across the country at that point crying out
how many hundreds of thousands? How do I get a gig like that?

The historian line also led to this attack ad in Florida by Mitt
Romney against Mr. Gingrich.

(BEGIN VIDEO CLIP)

NARRATOR: While Florida families lost everything in the housing
crisis, Newt Gingrich cashed in. Gingrich was paid over $1.6 million by
the scandal-ridden agency that helped create the crisis.

GINGRICH: And I offered advice, my advice as a historian.

NARRATOR: A historian? Really?

(END VIDEO CLIP)

MADDOW: Now, the micro context of this release tonight is that Mr.
Gingrich seems to be attempting to nip this criticism in the bud by having
his former consulting company release these Freddie Mac contracts right
away, basically as soon as he was asked for them. The slightly larger
context of this, though, is that the demand that Mitt Romney release his
tax returns is still an outstanding demand.

After changing his position on the tax returns a lot, Mr. Romney now
says he will release the 2010 tax returns and an estimate of the numbers of
his 2011 returns tomorrow. But for the moment, tonight, that request about
Mitt Romney`s tax returns is outstanding. And we still don`t know if he`ll
release any other years.

So Gingrich trying to shut up criticism of his Freddie Mac deal, A.
Gingrich also trying to make Mitt Romney look like the only guy who`s
hiding anything, B.

But the even wider context here is that Mitt Romney himself has yet to
come up with a really salable position on the housing crisis, because
Florida`s housing crisis is really, really awful. Ands Nevada`s is even
worst, and that`s the next contest.

And so far, Mitt Romney`s most notable statement on the record about
the housing crisis is this one.

(BEGIN VIDEO CLIP)

ROMNEY: As to what to do for the housing industry specifically, the
things that you can do to encourage housing, one is: don`t try to stop the
foreclosure process. Let it run its course and hit the bottom.

(END VIDEO CLIP)

MADDOW: But the macro level of context here, yes, there is another
level of context, give me a break -- I had some caffeine today -- the macro
level of context or the widest level of context is that the Republican
establishment is freaking out, freaking out, that Newt Gingrich might be
their nominee.

(BEGIN VIDEO CLIPS)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: We all know the record. I mean,
he was run out of the speakership by his own party. He was fined $300,000
for ethics violations. This is a guy who`s had a very difficult political
career at times and has been embarrassment to the party.

UNIDENTIFIED MALE: All across the country this morning people are
waking up who are running for office as Republicans, from dog catcher to
Senate, and they are saying, good God, Newt Gingrich might be at the top of
this ticket.

BRIT HUME, FOX NEWS: Believe me, Republicans in Congress will be
terrified to run with this man for fear they will lose the House and Senate
are, they will begin to do what they can to try to defeat him because they
fear he can`t win the election and moreover may drag many of them down to
defeat with him.

UNIDENTIFIED MALE: The reason liquor sales in the last 24 hours have
quadrupled in Washington is truck loads of champagnes are going over to
Pelosi office and hard whiskies are going to the Republican office because
Newt Gingrich cannot carry in a general election a swing state that were
made of feathers. This is a fact of politics.

(END VIDEO CLIPS)

MADDOW: The champagne and whiskey and the feathers, I totally get it.

If that was not clear enough, here was the "Wall Street Journal"
editorial page today. Did you see this? Quote, "If GOP office holders had
a better candidate, they should have rallied behind one to get in the race"
and they still could if the primary contest drags on without a clear
winner.

"Wall Street Journal" op-ed page still trying to recruit new
Republican candidates after three primaries are already done.

When Newt Gingrich was surging before Iowa, the Republican
establishment shut down that surge by having establishment figures come out
and talk a lot of smack about him and by burying him in an avalanche of
money, in the form of negative ads from the Mitt Romney campaign. But more
specifically, from the Mitt Romney super PACs. They thought that Newt
Gingrich was politically dead after they threw all that at him.

But now, he is reanimated. Gallup, the same polling organization that
described Mitt Romney`s national support as collapsing over the weekend,
today shows national support for Governor Romney collapsing even further.
In Florida specifically, Mr. Gingrich posting bigger leads over Mr. Romney,
according to today`s polls.

What killed the Gingrich momentum before was the establishment coming
out to attack him and direct fire from Mitt Romney. But honestly, in terms
of the direct fire, this housing stuff that Mitt Romney is trying to hit
him with in Florida sort of makes Mitt Romney look worst than Newt
Gingrich. It`s pretty weak tea.

And the establishment? Well, I guess this is going to be the test of
their power to control Republican outcomes. There is no way I could put
this better than what Republican strategist Steve Schmidt said about it on
our air on Saturday night when it became clear that Newt Gingrich was
running away with it in South Carolina. I thought he might explode on
camera.

(BEGIN VIDEO CLIP)

STEVE SCHMIDT, MSNBC POLITICAL ANALYST: We`re probably moving towards
a declaration of war on Newt Gingrich by the Republican establishment. And
if Newt Gingrich is able to win the Florida primary, you will see a panic
and a meltdown of the Republican establishment that is beyond my ability to
articulate in the English language.

(END VIDEO CLIP)

MADDOW: Joining us now with the newly released Newt Gingrich Freddie
Mac contract in hand is NBC investigative correspondent Michael Isikoff.

Mr. Isikoff, thank you for joining us.

MICHAEL ISIKOFF, NBC NEWS INVESTIGATIVE CORRESPONDENT: Great to be
with you, Rachel.

MADDOW: First, just give us a sense of what this document is. What
it describes, and who has released it?

ISIKOFF: The Center for Health Transformation, which is an arm of the
Gingrich Group, which is the consulting firm founded by Newt Gingrich that
had the contract with Freddie Mac released it today, tonight, just a couple
hours before the NBC News debate, and this is in response to the sort of
mounting drumbeat from the Romney campaign saying, show us what you did for
Freddie Mac, show us your contract, show us everything you`ve got.

And at the same time, of course, Gingrich had been pressing for
release of Romney`s tax returns. So, in order to, I think, to sort of
basically help support Gingrich`s drumbeat for disclosure by Romney, he
preemptively released this contract, or had his former consulting firm
release this contract.

But I have to say, it raises more questions than it answers. First of
all, it provides no light on what Gingrich actually did for Freddie Mac.
The contract itself provides for $25,000 a month, $300,000 a year in 2006
to provide consulting and other services. Nothing in the contract gives
you any hint of what that consulting consisted of or what Gingrich did.

To side ways to that, we know that this 2006 contract was a follow-up
to an earlier 1999 contract that Gingrich first had with Freddie Mac. When
I asked, where`s the 1999 contract, I was told by the center spokeswoman,
they can`t find it, nor can they find the renewal of the 1999 contract from
2002.

So, there`s the earlier arrangement that has not been released. And
then I asked for what about the written documents, reports that Gingrich
group may have provided for Freddie Mac, where are those? And I was first
told there were no written reports, there were no produced reports.

And then later, when I pressed them further on that, with a big
question mark, huh? They were told they are not authorized to release
written reports.

So, the big question at the center of it, what did Newt Gingrich
actually do for Freddie Mac?

We know he got paid a lot of money. If you add up all those
consulting contracts, it adds up to about $1.6, maybe more than that, up to
$1.8 million. Depending when the original `99 agreement was signed, but we
don`t know what he actually did.

MADDOW: Briefly, Michael, part of the reason there is controversy
because he`s essentially trying to say, I didn`t lobby. And it`s true that
he was never a lobbyist -- registered lobbyist.

But is there anything that we can tell about like who he was reporting
to at Freddie Mac that would explain how he was functioning within their
organization?

ISIKOFF: Well, funny you should ask. Yes, we can.

The contract the first page shows that he was reporting to the
director of public policy for Freddie Mac, a man by the name of Craig
Thomas, who in fact was one of Freddie Mac`s top lobbyists. So, the
consulting work that Newt Gingrich was doing was for the Freddie Mac top
lobbyist, but Gingrich insists it did not consist of lobbying.

Now, actually, if you read closely, the lobbying disclosure law and
how it defines lobbying activities, it does say lobbying activity consists
of work in preparation for lobbying or work as background material that`s
intended to help lobbying. So, I think again, the fact that he was
reporting to a Freddie Mac lobbyist does raise the further questions what
he was actually doing.

MADDOW: NBC News national investigative correspondent Michael
Isikoff, thank you for helping us explain all this. It`s complicated, but
I actually feel much more clear about it than I think people are. Thank
you.

ISIKOFF: Thank you.

MADDOW: $1.6 million to $1.8 million to report to the lobbyist at the
organization. How close to lobbying is that?

OK. Still ahead, former Congressman Alan Grayson of Florida who
admitted is the Florida politician you most want to hear from right now.

And some big and unexpected news out of Washington state, and out of
Indiana, ahead of the Super Bowl there in two weeks. That`s all ahead.

(COMMERCIAL BREAK)

MADDOW: When Newt Gingrich won South Carolina on Saturday night, he
gave a speech, but it took him a long time to actually get to the venue and
get to the podium to make the speech. It was a full 19 minutes between the
time we were told Mr. Gingrich was about to give his speech and when he
finally did it.

Now, I do not know if there was any booze at the Newt Gingrich victory
party, but by the time he started speaking, based on the sounds out of his
audience, it kind of seems like there might have been some beer mixed in
with the pure thrill of victory.

(BEGIN VIDEO CLIP)

CROWD: Newt, Newt, Newt, Newt, Newt, Newt.

(CHEERS)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: What makes us different
from virtually every other country in the world is that we are free -- you
have to wonder how out of touch reality this administration is.

UNIDENTIFIED MALE: He`s clueless.

(END VIDEO CLIP)

MADDOW: The Newt Gingrich crowd, angry, happy, angry/happy -- you
know how that feels. Happy, angry. Angry, happy.

It`s good for them, they had a great night.

There was one Newt Gingrich victory speech crowd moment, though, where
it was hard to tell in the moment what they were saying. It really only
became clear later.

(BEGIN VIDEO CLIP)

GINGRICH: Rick Santorum showed enormous courage in Iowa when he had
no money, nobody covered him and he kept campaigning.

(CHEERS)

GINGRICH His --

(INAUDIBLE)

(END VIDEO CLIP)

MADDOW: What they are yelling, it turns out what they`re saying after
Newt Gingrich mentions Rick Santorum? The crowd is yelling V.P., V.P.., as
in Mr. Gingrich, since you`re going to be the Republican Party presidential
nominee, please pick Rick Santorum to be your running mate.

And as you can see, look at the way he sort of responds to the crowd
when they`re doing that. He gets this grin, he sort of eggs them on about
it. He seems to sort of like this idea.

(BEGIN VIDEO CLIP)

GINGRICH: I rest my case.

(END VIDEO CLIP)

MADDOW: I rest my case.

At this point in the presidential nominating contest, Rick Santorum
does not look like he is going to win. A grain of salt, I didn`t think he
was going to win in Iowa, either. It turned out I was wrong.

But he`s just not doing very well right now. After winning Iowa, he
came in fifth place in New Hampshire. He came at a very distant third
place in South Carolina.

And right now in Florida, he`s polling at 11 percent.

Mr. Santorum just doesn`t seem to have the momentum, the lift even
after winning Iowa that you would expect him to have if he were going to
win. Again, anything is possible but it doesn`t seem like Mr. Santorum is
on a path toward winning at this point. If he`s not on a path toward
winning, what is his effect on the race?

Republican voters know they have an establishment candidate.
Republican voters know that their choice is essentially Romney or not
Romney. The more not Romneys there are, the better Mitt Romney`s chances
are. So, Newt Gingrich`s would love for Mr. Santorum to get out. Mr.
Romney, of course, would love for Mr. Santorum to stay in and keep
splitting the anti-Romney vote.

That`s why you got this big grin from Newt Gingrich to the V.P., V.P.
cheers, right, and fulsome praise for Rick Santorum in the speech itself.

What can I offer you, my dear friend?

(BEGIN VIDEO CLIP)

GINGRICH: Here is a guy who articulates the values of social
conservatism, articulates the importance of manufacturing and who may have
been as right about the dangers of Iran as anybody in this country in the
last 10 years.

(CHEERS)

(END VIDEO CLIP)

MADDOW: Please get out of the race!

Mr. Santorum on Saturday night praised Mr. Gingrich right back in his
speech saying good job, buddy.

But Santorum has not kept up with the praising of Newt Gingrich. In
fact Mr. Santorum in an op-ed in "The Wall Street Journal" today excoriated
Newt Gingrich for not prioritizing social conservative issues, specifically
abortion, for trying to push those issues to the bottom of the Republican
Party`s agenda. On this op-ed today, on the occasion of the anniversary of
Roe versus Wade, Mr. Santorum describes fighting against abortion rights as
the cause to which he has dedicated his life.

Right. I mean, if anybody knows anything about Rick Santorum, it`s
the man on dog thing, and it`s also the abortion issue. That`s what your
hole reputation boils down to, Senator, the central challenge of your
candidacy is to broaden your appeal beyond those issues to convince people
that you can speak to some other issues besides just being really anti-gay
and being really anti-abortion.

If this is just a contest about who is the most anti-abortion, then
congratulations, Rick Santorum, you are running away it. You may have
gotten destroyed overall in New Hampshire, you came in fifth in New
Hampshire.

But looking at the exit poll results, one group of voters you won were
voters who said that abortion was the most important issue motivating their
vote.

Also in South Carolina, again, you got destroyed. But the one group
of voters where you did awesome, where you won a majority of the vote,
voters who said that abortion was the most important thing motivating their
vote.

The only other group Mr. Santorum did even close to that well with was
voters who said the most important quality in a candidate was strong moral
character.

Ron Paul came in second on that one. And you can see Mr. Gingrich and
Mr. Romney way down the field on that one.

So, because he has already locking up the anti-abortion vote, but that
is not enough to help do well overall, it is a little strategically strange
that Rick Santorum chose to do a big high profile "Wall Street Journal" op-
ed today doubling down on what`s already his single issue of abortion.

Dude, you are already winning the anti-abortion primary. What you`re
supposed to be trying to win is the race for the Republican nomination --
unless the race for the Republican nomination sort of is the anti-abortion
primary.

So far, the dirty tricks we know about in this campaign, the nasty
anonymous smears that South Carolina Republicans in particular are known
for, the dirty tricks so far have been about abortion. With flyer left on
the windshield of cars denigrating Rick Santorum`s wife, on the issue of
abortion. The fake CNN e-mail denigrating Newt Gingrich on the issue of
abortion. I can tell you what the allegations are in these dirty tricks,
but that would be helping them do their work.

So, suffice to say, nasty allegations related to the issue of
abortion.

So, the dirty tricksters believe abortion is important enough to sway
the race. Further evidence that the Republican nominating contest is the
anti-abortion primary -- well, the next contest is in Florida, and the
Republicans in the Florida legislature last year filed 18 different pieces
of anti-abortion legislation for their state. By our count, they took some
sort of action on at least nine of those bills and five anti-abortion
measures were signed into Florida law. They just have started a new
legislative session, and there`s already an anti-abortion cue. Three anti-
abortion bills are on the docket for tomorrow.

And Florida is not alone in prioritizing abortion above else. On the
occasion of Roe versus Wade anniversary, the anti-abortion movement is just
crowing about what a great year they had restricting abortion rights.

The president of Americans United for Life telling "The Washington
Post" today, quote, "While the headlines were all about the changing
command in the House of Representatives, what we were seeing was a tidal
wave of new pro-life legislators in state houses. When we saw this big
wave come in, we were ready to grab the ball and ran with it. Last year,
28 laws that we were involved with passed. It was breath taking."

The anti-abortion movement taking its own breath away with its success
since the Republican victories in 2010.

Today, in an anti-abortion march in Washington, the antiabortion
movement was treated to a speech from the speaker of the House, John
Boehner, who said he`s working to overturn the Roe versus Wade decision.

It`s been a breath-taking year of watching abortion rights disappear
in the United States. There have been more rollbacks of abortion rights
since the 2010 elections that in anytime since Roe versus Wade was passed
39 years ago.

And this massive, coordinated offensive against abortion rights by the
Republicans has frankly been aided by the fact that Republicans love to
campaign on this issue, Democrats don`t love to campaign on this issue.
Being pro-choice is not a litmus test for the Democratic Party the way
being pro-life is for the Republican Party. There are lots of elected
Democrats who are opposed to abortion rights.

But even Democrats who are not opposed abortion rights have not been
very willing to stand up and say that, much less to campaign on being pro-
choice. But perhaps by virtue of the fact that Republicans have gone so
far, both with anti-abortions laws and put their campaign promises on the
issue, we`re finally seeing some real Democratic push back in a big way.

And from the top, I sort of can`t believe this did not get any press
today, but this is remarkable. Look at this. It`s an e-mail from Obama
for America, which is the Obama reelection campaign. It`s signed by deputy
campaign manager Stephanie Cutter. It`s not just on the issue of abortion.
It`s also on the issue of contraception and other women`s health issues.

But look at this, you never see something like this. On Friday, the
Obama administration announced that soon, women won`t have to pay out of
pocket for birth control. Starting August 1st, many insurance plans
nationwide will be required to fully cover contraception without co-pays or
deductibles -- thanks to the Affordable Care Act, more women can make
health care decisions based on what`s best for them, not their insurance
company, all while saving hundreds of dollars every year.

Think about how different that it is from what the candidates on the
other side would do. They`ve all vowed to repeal the Affordable Care Act.
And Mitt Romney even said he would have signed the constitutional amendment
in Massachusetts to define life as beginning at conception, similar to the
notorious state level personhood amendment that could ban many forms of
contraception and even in vitro fertilization.

It goes to explains how under health reform mammograms and other
health screenings are now free, how 1.1 million young men are now covered
by their parents` health insurance plans, and then it goes back on the
attack.

"At the same time, our opponents have been waging a war or women`s
health, attempting to defund Planned Parenthood, overturn Roe versus Wade
and everything in between. The president has stood firm against these
attacks on women`s health. But if we`re going to protect our progress and
have a chance to take even more steps forward, we need to show we have his
back now when the heat is on.

Then they ask you to sign a petition, which then, of course, gives
them your email address, and puts you on their radar presumably for raising
money for you for the president`s reelection campaign and targeting your
for get out the vote.

With Rick Santorum or without Rick Santorum, the anti-abortion
movement has so taken over the Republican Party now that they have turned
the Republican Party`s presidential nominating contest essentially into an
anti-abortion primary. They might think that is good politics for them but
it leaves Democrats wide open to lock up every pro-choice vote in the
country and then some. And it seems like now they are finally trying to.

Joining us tonight is former Congressman Alan Grayson, represented
Florida`s 8th district from 2009 to 2012.

Congressman Grayson, it is nice to see you again. Thank you for
joining us.

FMR. REP. ALAN GRAYSON (D), FLORIDA: Thank you.

MADDOW: How central is rolling back abortion rights to what Florida
Republicans are all about right now?

GRAYSON: I think it is quite central.

Our polling shows locally and this is true throughout the state, that
around 10 percent of the Republican voters are strictly anti-choice vote.
And by the way, about 10 percent of the Democratic vote is a pro-choice
vote. So, of course, they are relatively equal.

The difference is the Republicans have nothing else going for them.
If you ask the Republicans what`s your policy to get people back to work,
hear blah, blah, pretty much nothing.

If you ask them, what you`re going to do about the real estate crisis,
foreclosures, homelessness -- nothing.

If you ask them about what they`re going to do about health care,
allowing people to see a doctor when they are sick -- nothing.

So, what they do is they use the abortion issue to distract people.
They can`t give them bread so instead they give them the circuses.

MADDOW: Florida`s vote is going to be the first primary this year
that is closed, it`s Republicans only, there aren`t going to be Democrats
or independents participating in it.

From your up close and personal perspective in central Florida, what
do you think we should understand about the Republican mindset in Florida?
Not just in terms of predicting the outcome of this contest, but in terms
of what`s in the forefront of these voters` minds when they head in the
polls?

GRAYSON: Well, there`s really four different elections going on at
the same time, and they are geographically spread. There`s a Republican
vote in the Panhandle, Republican vote on the I-4 corridor, from Daytona
Beach to Orlando to Tampa. A Republican Cuban and Republican Jewish vote
in south Florida.

And they are entirely different. I think you`ll see Mitt Romney do
well in the Orlando-Tampa area. I think he`ll do well in the southwest
part of the state. I think he`s going to have a lot of trouble with the
Cuban vote, he did in 2008. He`s going to have a tremendous amount of
trouble with the Jewish vote in South Florida. And in the Panhandle, I
think you`ll see them split evenly, but I give the edge to Gingrich and I
think also you will see other candidates do well in the Panhandle.

MADDOW: Why do you think that prominent Florida Republicans like
Marco Rubio and Jeb Bush and Governor Rick Scott aren`t endorsing anybody?

GRAYSON: Well, because they all look in the mirror each morning and
they say to themselves, this guy looks like a vice president or even a
president to me. And nobody wants to take a chance of guessing wrong.
That`s why.

MADDOW: So, when Lindsey Graham was the only guy who didn`t endorse
in South Carolina, he`s the guy who won in South Carolina because all the
rest of the establishment voted for Mitt Romney and the state went against
him?

GRAYSON: Well, I think Lindsey Graham probably has the same thing in
mind when he looks in the mirror. But I don`t think that`s going to
happen.

MADDOW: Do you think that if Rick Santorum dropped out, that his
votes would go to Newt Gingrich at this point, is that the way things are
splitting?

GRAYSON: Yes, I mean, I see a bloc of sort of semi-rational people in
the Republican Party who seem to, for the most part, support Mitt Romney.
I see Wall Street and small business support Mitt Romney.

I see a tremendous amount of fundamentalist Christians, whose vote is
now split between Gingrich and Santorum, which is odd since they`re both
Catholics, and almost all of them in Florida are Protestant. But that`s
the way it goes, I guess.

And then I see the libertarians voting for Ron Paul.

So, I think that Gingrich and Santorum are fighting over the same
vote, and that vote will consolidate for one or the other.

MADDOW: Back to the abortion issue. Obviously, the anniversary of
Roe versus Wade, was this weekend. There`s always a big anti-abortion
rights march around that time, there`s always a lot of promises and sort of
crowing from the anti-abortion movement.

But we`ve really have seen a remarkable year. And in a remarkable
year of restricting abortion rights, Florida stands out. I mean, 18
different pieces of anti-abortion legislation including five new anti-
abortion restrictions passing in the state.

What accounts for that taking the forefront of the Republican agenda,
even as it popped up and was popular everywhere, Florida seemed to have
gone nuts?

GRAYSON: I think it`s because Democrats here in Florida for some
reason reluctant to make the case for pro-choice. I think that`s what it
comes down to.

I have no trouble telling people I think the most fundamental right is
the right to control your own body. But I hear very few others saying
anything like that. So, we basically left the playing field, and I think
that`s a shame.

MADDOW: Former Congressman Alan Grayson of Florida, it is nice to
have you back on the show, sir. Thank you for joining us tonight.

GRAYSON: Thank you.

MADDOW: All right. Still ahead: heroes, patriotism, parades?

Stay with us.

(COMMERCIAL BREAK)

MADDOW: Here`s what you need to know about the State of the Union
Address this year. It is tomorrow night. Our special coverage of the
State of the Union starts right here on MSNBC at 8:00 p.m. Eastern. We
will have the president`s address and Republican Party`s official response,
which will be given this year by Indiana Governor Mitch Daniels.

Our special coverage of the State of the Union, including the big
special event night desk and everything, starts tomorrow at 8:00 p.m.
Eastern.

We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: We learned this very happy weekend which teams are going to
the Super Bowl. The New York Giants will represent the NFC after an
unfortunate and now presumably very lonely San Francisco 49er fumbled two
punts that he was trying to catch. That`s how the Giants punched their
ticket for the Super Bowl in Indianapolis. My beloved Patriots won as
well, when I think an even more unfortunate and now at least as lonely
Baltimore Raven missed a field goal from close in, thereby unwillingly
winning the gratitude of millions of New Englanders who had been sitting
with their noses pressed up against their TVs, and also me.

So, the games that decided who is going to the Super Bowl were weird
games. Both took place yesterday.

But the Super Bowl is not this upcoming weekend. The Super Bowl
doesn`t happen until two weekends from now.

You want to know what happens next weekend? St. Louis happens. This
is what is happening in America this weekend. This upcoming Saturday. St.
Louis, Missouri, is set to be the first city in the United States to host a
welcome home parade for the veterans of the Iraq war.

For 125 years, America has publicly commemorated the end of the wars
with parades, to welcome home the veterans. It is one small thing we have
historically done to show our appreciation, to say welcome home. Thank you
for serving in this war. We`re so glad you`re back home.

The war in Iraq officially and finally ended last month. There has
not been a parade in New York, or in Washington, D.C. The Afghanistan war
after all is still going on.

But a grassroots effort, a really grass roots effort in St. Louis has
put the nation`s first end of the Iraq war welcome home parade on the
calendar for this upcoming Saturday.

(BEGIN VIDEO CLIP)

CRAIG SCHNEIDER, PARADE ORGANIZER: Yes, I think we`re going to make
it. I think St. Louis is not only going to make it. We`re going to lead
the way for country. We`re going to set an example for the entire, for all
the United States. This is what you do when your veterans come home.

The city is motivating in real time on Facebook. Problems that take
months to solve are being solved in minutes interactively by -- from
everyone, from the mayor`s office to volunteers to housewives, to -- it`s
amazing. It`s amazing what`s happening right now. It`s really made us
believe that impossible thing was nonsense.

(END VIDEO CLIP)

MADDOW: By day, the guy you saw there, Craig Schneider, works in
educational technology in a suburban St. Louis school district. He puts
the schools` computers together and make sure they keep working. That`s
what he does by day.

But by evening and by night and by early in the morning, he has been
raising money for this parade, and getting veterans groups together to
welcome the troops at the end of the parade.

Craig and another friend with whom he has been doing the organizing
have raised just north of $25,000 so far on their Facebook page. It`s
called Make January 28th Welcome Home the Heroes from Iraq Day. We have
link to it at the Maddow Blog today if you haven`t seen it yet.

After parade on Saturday, groups that work with returning veterans
will set up information tables for a day-long event. Craig and the other
volunteers also hope to link up veterans aid groups from all 50 states.
So, if you`re helping troops in North Dakota, say, Craig the computer guy
says let him know, he will fix up with a table, and a flag and live-
streaming video.

Craig says he gets inspiration from a couple of sources. One was from
his friend who won a Bronze Star in Iraq for heroism. The other was seeing
the city of St. Louis organized a parade overnight for the Cardinals after
they won the World Series. That, of course, showed that the parade thing
could be done even on very short notice.

Joining us now for the interview is Craig Schneider. He`s an
organizer of the St. Louis parade to welcome home veterans of the Iraq war.

Craig, congratulations and thanks for making time to talk to us about
this. I`m sure this is a pretty busy week for you right now.

SCHNEIDER: It is busy. Thank you for having us, Rachel. I`m a fan
of your brain. Thanks for having us on.

MADDOW: Oh, thank you. I`ll send it over to you, I haven`t been
using it recently.

SCHNEIDER: We`ll take it, we`re taking donations.

MADDOW: You don`t want that one.

Let me ask you about the basic start of this, how you got the idea to
do it? And once you got the idea, why you thought it was possible?

SCHNEIDER: We knew it was possible. We got the idea because no one
else was doing it and someone could, someone could do it if they stepped
up, and we knew we could. My friend Tom Applebaum (ph) and I and some
friends at dinner we were notice that the Cardinals did it in short order,
we can do it now.

We love our heroes from the baseball team. But we got some even
bigger heroes coming home now, and they deserve a parade, too. And more
than a parade, which is kind of the Veteran Resource Village thing.

MADDOW: Well, tell me about the Veteran Resource Village. I know
that one of your partners in organizing this is a resource center for
veterans, that essentially says to veterans, I was reading up on them
today, their mission to veterans is to tell veterans they are still needed.

SCHNEIDER: It`s -- we paired up with the St. Louis organization, they
are a national organization but they`re based right here next to us. It`s
called the Mission Continues. And they just do amazing work, they do
exactly what we want to do with this.

They don`t just give the soldiers a big war welcome home, which they
do, but then they turn around and they put them to work on jobs, on things
that we need on reinvesting in the community, their motto is, "This isn`t a
charity, it`s a challenge." And that`s exactly what this whole event
about, it`s about a challenge.

MADDOW: Why do you think that this -- you have been able to make this
happen in St. Louis and we`re not seeing it happen in New York City and in
Washington, and some other big cities. I know part of the discussion
nationally has been concern that with the Afghanistan war still going on,
you don`t want to be welcoming people home who are still being deployed,
there`s awkwardness around that. But still, I think that you`re tapping
into something that people felt like ought to be done.

Why do you think it`s happened in St. Louis?

SCHNEIDER: I think it happened here because it had to start
somewhere, and St. Louis, we`re in the middle of the country, we`re just a
small town city that knows how to get things done. We know how to stop
saying that`s impossible, and if we have to get everything together,
including the mayor down to make something happen that`s positive, then
this is a town with a great reputation for doing that. We knew this would
be perfect for it. It`s the perfect place to do it.

MADDOW: What about the ongoing war in Afghanistan? I imagine you
have been not just talking with veterans resource centers but also talking
with veterans themselves. Have you had discussions about that as sort of a
complication for this?

SCHNEIDER: It is a complication. What we are basically doing is
beginning a process that`s not going to begin and end on January 28th.
We`re putting the people together and the people in place to start this as
a regular routine to welcome home, and we know that we still got a lot of
folks that we miss a lot that are in Afghanistan tonight. The work we do
now will help us make sure we are ready to welcome them home when they come
home, too. They are not forgotten.

Believe me, everyone is involved in this knows if you were in Iraq,
you were probably in Afghanistan too, and we understand that and we`re
sensitive to it but it`s got to start somewhere. So, we started it now.
We`ll be ready when they come home, we promise.

MADDOW: Craig, I don`t mean to ask you a leading question, people can
make donations on the Facebook page?

SCHNEIDER: I really hope they do. Yes. Grassroots is an overused
word, but we`re paying as we go. We are. And we`ve got two big goals out
of this. First of all, money aside, we have to pay for the party, help us
do that, we hope you do, we hope you come to the web page and help.

But we`re really focused on the vets. We want this is their day,
before we get in questions like that, Tom and I and the organization are
going all out, let`s have a parade for vets, by vets, full of vets, vets
families, not St. Louis. If you served in the Iraq war, if you served in
the post-9/11 wars, come on out. Come to the parade, bring your family,
we`ll find a place for you. If we can`t get you in the parade, we`ll get
along side, we`ll get you to union station. This is America`s party, we
want everybody here for this.

MADDOW: Craig Schneider, one of the organizers of the St. Louis
parade for Iraq war veterans next week -- thank you for doing this. Thank
you for talking to us about it. Keep us apprised this week as you`re
getting set up, OK?

SCHNEIDER: I will. And actually, when you`re off air, I got a
question for you, but it`s not for your show.

MADDOW: Oh, how provocative. OK, thanks, Craig.

All right. And reminder, there is more information about this event
on our Web site, MaddowBlog.com. Now I need to talk to Craig off air. I
don`t know about what.

Right after this show on "THE LAST WORD," Lawrence O`Donnell breaks
down the Republican debate fresh and hot, don`t miss it. And here, the
most moving piece of video I have seen in a long time. That`s next.

(COMMERCIAL BREAK)

MADDOW: We don`t usually do this on this show, but today and in this
case I think it`s warranted. By now, you have heard the news that
Congresswoman Gabrielle Giffords of Arizona is stepping down. Just over a
year ago, of course, an apparently crazed kid with a Glock handgun and an
extended magazine full of bullets tried to assassinate Congresswoman
Giffords. He killed six other people, he wounded 13 people.

Gabby Giffords was shot in the head. She was grievously wounded.

The congresswoman has recovered, amazingly since then. But she has
now decided to step down from Congress to focus on her continued recovery.

As I said we don`t usually do this. But have you seen what she did to
announce she is stepping down? It`s very short, and in my opinion, you
totally owe it to yourself to watch this.

(BEGIN VIDEO CLIP)

REP. GABRIELLE GIFFORDS (D), ARIZONA: Arizona is my home, always will
be. A lot has happened over the past year. We cannot change that, but I
know on the issues we fought for, we can change things for the better --
jobs, border security, veterans. We can do so much more by working
together.

I don`t remember much from that horrible day, but I will never forget
the trust you placed in me to be your voice. Thank you for your prayers
and for giving me time to recover.

I have more work to do on my recovery. So, to do what is best for
Arizona, I will step down this week.

I`m getting better. Every day my spirit is high. I will return and
we will work together for Arizona and this great country.

Thank you very much.

(END VIDEO CLIP)

MADDOW: That`s the video made by Congresswoman Gabby Giffords to
announce that she is stepping down from Congress. Seeing her now and
seeing that interspersed with video of her before this madman shot her is
very, very moving.

Congresswoman Giffords met with other victims of the shooting today.
She will attend the State of the Union Address in Congress tomorrow, as
will her husband, astronaut Mark Kelly, who will sit with the first lady in
her box seats at the address.

And then on Wednesday, we have just found out that the House will take
up Gabrielle Giffords` final bill and they`ll take it up under expedited
terms. It`s a bill to crack down on ultra light aircraft used in cross
border smuggling. And then by June at the latest, Arizona will pick
somebody new for Gabrielle Giffords` seat in Congress.

So, I think probably forever it will be the Giffords` seat in
Congress.

(COMMERCIAL BREAK)

MADDOW: In Indiana today, the state Senate Republicans decided to
welcome the Patriots and the Giants to the Super Bowl in Indianapolis in
two weeks by voting to strip union rights in the state. The NFL players
association, the players union has put itself loudly on the side of the
state`s Democrats and others who are fighting Mitch Daniels` union-
stripping plan there.

Even while the vote was still pending today, a breakaway group of pro-
union rights Republicans, a group called the Lunchpail Republicans,
announced plans to run pro-union rights primary challengers against two
Republicans in the legislature, who are going along with the union-
stripping plan. And if the prospects of protests including the NLF players
association at the Super Bowl were not high-profile enough around this
issue, well, then, Republican Governor Mitch Daniels is giving the
Republican Party`s official State of the Union response tomorrow night --
to put that much more of a spotlight on his state and how his union-busting
agenda seems to be tearing apart both his state and his party.

And meanwhile, as the Republican candidates for president fight to
out-gay -- out-gay each other, that would be a totally different thing --
fight to out-antigay each other, with the Mitt Romney for president
campaign, for example, denying the authenticity of these pro-gay pride
flyers his campaign distributed when he ran for governor in Massachusetts,
with Rick Santorum pledging to not just oppose gay rights, as he always
has, but to go back in time and annul people`s existing marriages, same-sex
marriages, if he`s elected president. Mr. Santorum also pledging to try to
re-closet the military by un-repealing "don`t ask, don`t tell." With Newt
Gingrich going so far to sign a marital fidelity oath, pledging himself to
not just to overturning gay rights, but to not cheating on his wives, his
wife, anymore, despite the copy out the nose ridicule that such a pledge
earns him.

With the Republican presidential candidates fighting to out-antigay
each other in the blue states, if you`re pro-gay rights, it proves that
things get better. Maryland`s Democratic Governor Martin O`Malley
introducing a bill today in his state to legalize same-sex marriage in
Maryland. This follows closely on the heels of Washington state`s
Democratic governor, Christine Gregoire announcing her support for same-sex
marriage rights and her introduction of state marriage equality
legislation.

Today in Olympia, Washington, at a legislative hearing on this issue,
a Democratic state Senator named Mary Haugen announced that she would
support the bill. She said, "I know this announcement makes me the so-
called 25th vote, the vote that ensures passage."

In a statement she said she need time to make up her mind on the
issue, to, quote, "reconcile my religious beliefs with my belief as an
American, as a legislator, and as a wife and a mother who cannot deny to
others the joys and benefits I enjoy."

"This is the right vote," she said, "and it is the vote I will cast
when this measure comes to the floor."

And, meanwhile, also today, we had some serious and worrying news from
the family and the office of Republican Senator Mark Kirk in Illinois.
Senator Kirk was elected in 2010 to the Illinois Senate seat, previously
held by President Obama. Mr. Kirk is 52 years old. He`s a former naval
intelligence officer.

On Saturday, Senator Kirk checked himself into a Chicago hospital
because he was experiencing dizziness and headache. Doctors at that first
hospital diagnosed a stroke, caused by a problem with a carotid artery
that`s apparently blocking the blood flow to the senator`s brain. So that
checking into hospital was on Saturday. On Sunday, they transferred him to
a different hospital and rushed the senator into surgery because of
swelling on the right side of his brain.

Doctors say in the three-hour surgery, they removed a four-inch by
eight-inch section of his skull to relieve the pressure that was caused by
the swelling. The doctor who performed Senator Kirk`s surgery told
reporters, fortunately, the stroke was not on the left side of the brain,
in which case that would affect his ability to speak, understand, and
think. As it stands, with the swelling having been on the other side of
his brain, doctors say the stroke will likely affect the senator`s ability
to use his left arm and possibly his left leg and may also cause some
facial paralysis.

Senator Kirk`s surgeon also says Senator Kirk is young, is in very
good shape, and is very healthy. All of those things are in his favor.

We`ll keep you posted as we learn more about Senator Kirk`s progress,
but in the meantime, of course, all of our thoughts and best wishes are
with the senator and with his family tonight.

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

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