updated 4/24/2013 11:04:49 AM ET 2013-04-24T15:04:49

THE RACHEL MADDOW SHOW
April 23, 2013

Guests: James Cavanaugh, Therese Apel, Mat Honan


RACHEL MADDOW, HOST: Good evening, Chris. I can hear the televisions
turning on in Texas right now to reward you for that last statement.

(LAUGHTER)

MADDOW: Thank you, Chris.

CHRIS HAYES, "ALL IN WITH CHRIS HAYES" HOST: Not as bad as I thought.

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

There is a lot going on in the news today, including a lot of fast
breaking stories over the course of this afternoon and later.

The poisoned letters, the ricin letters that were sent last week to
the White House and to a U.S. senator, and it seemed like that story was
mostly over and done with as of a few days ago. But today, that story
broke back open in a very strange way. We`ll have more on that in just a
second.

Also today, there was a very short but deep, kind of a mini crash on
the stock market. It all happened in about two minutes. The market came
right back afterwards and ended up finishing the day way up.

But the reason for that short, deep crash is a weird and worrying one.
We`ve got the story ahead as well.

Plus, yes, more turnover announced in the U.S. Senate today where U.S.
senators apparently can`t wait to quit or require or otherwise leave on
their own terms. We`ve got news on all of those stories coming up.

But today in Boston, the investigation into the Boston marathon
bombings continues. We now know that trained FBI interrogators who work on
the high value interrogation group, they have been speaking with the
bombing suspects since the moment that he woke up in the hospital in
Boston. So far, sources in a position to know about the initial
interrogation say the suspect has said that he and his brother were not in
contact with outside terrorist groups but were motivated by their religious
beliefs.

Today, it was also reported that the suspect made specific mention of
the U.S. wars in Iraq and Afghanistan in reference to a potential motive
for the bombing.

NBC`s Pete Williams reporting that according to a senior government
official, quote, "They got instructions on how to make bombs from the
Internet."

Well, today a little more detail arose. A New Hampshire company
called Phantom Fireworks said it had sold fireworks to the older suspect,
the older of the two brothers. Phantom Fireworks discovered the sale after
going through their records following the Boston bombings.

The company says it was back in February at its store in Seabrook, New
Hampshire, when they sold Tamerlan Tsarnaev a pair of "Lock and Load" --
that was sort of a brand name -- "Lock and Load" reloadable mortar kits for
$199 apiece.

The company executive telling the report, you can see, it says there
in the script, barely legal, right above where it says locked and loaded.

The company executive told reporters today the amount of combustible
or explosive material that a person might be able to recover from this
particular fireworks kit would not have been enough to make the bombs that
were used in Boston last week. That`s just the word from that company
official, though.

In terms of fireworks being a source of explosive material for
improvised explosive devices, we are familiar with that concept in part
because of the Times Square bomber. Remember, he used fireworks powder in
his own poorly designed explosives that failed to detonate in Times Square
in 2010. He had reportedly been trained in person in Pakistan by militant
groups there.

Powder recovered from fireworks is also described in the instructions
for assembling improvised explosive devices that were published in the al
Qaeda magazine "Inspire", which is published online. During his
interrogation in the hospital, the surviving suspect in the bombings in
Boston is reported to have said he and his brother, quote, "Read the
instructions at that al Qaeda magazine."

And indeed, the whole "how to make a bomb in the kitchen of your mom"
thing, that was not an essay about bomb-making and why it`s a good idea.
That was a set of very specific, detailed instructions. And the byline on
it was a Pakistani-American guy writing in relatively accessible American-
esse (ph) English.

That said, the al Qaeda magazine, "Inspire" magazine, is not the only
source online where you can get a specific instruction manual about
explosives. Probably to the chagrin of our corporate overlords or whoever
monitors our online networks here at 30 Rock, it only took me five minutes
of Googling from my desk today to find that specific instructions on making
explosives is all over. I mean, not just discussions about making
explosives, ideological debates, people exhorting other people to do it,
but actual step by step instructions.

When I was looking today for whatever reason, white supremacists
groups seemed to have some of the most quickly accessible step by step
illustrating instructions online for how to build all sorts of bombs. This
one goes through not only how to make pipe bombs but common mistakes for
makers of pipe bombs that might result in you blowing yourself up and how
you can avoid those common mistakes.

They talk about how to make pipe bombs from nonmetallic materials to
try to sneak them through metal detectors. It`s very specific information.
I have no idea of knowing if it`s true information. I don`t know how to
make bombs.

But those specific instructions, those step by step instructions that
could make a person believe that they know how, those are not hard to find
at all.

It is newsworthy to know that now, because it is newsworthy to know
that nobody has to travel anywhere or get any specific in person training
from some expert somewhere in order to access instructions for making
explosives. Bomb-making is essentially open source information. And it
has been that way for a long time. It has been that way since before the
Internet.

In the late 1960s and early 1970s, the U.S. went through a period when
we had lots of bombings. In 1969, for example, bombs went off at Pomona
College in southern California, in San Francisco State in northern
California. Also in the Department of Commerce and the federal building
and Army induction center and a criminal court building all in New York
City. The next year, somebody bombed the University of Wisconsin at
Madison and the Portland, Oregon City Hall.

The death and injury toll was never in any high numbers for any one of
these attacks, but still in the late `60s/early `70s, bombs were going off
a lot in our country in that time in our history. Bombs set off by
politically motivated assailants.

And from the middle of that morass emerged this, "The Anarchist
Cookbook" published in 1971. "The Anarchist Cookbook" It really caused a
lot freak out when it first came out. People sent letters to the FBI,
seemingly average citizens handwriting letters to J. Edgar Hoover, the head
of the FBI. "Dear Mr. Hoover" -- look at this -- "You wouldn`t allow them
to put this book on the market, would you?"

Democratic congressman from Texas wrote into the FBI to say that his
constituents have expressed alarm and concern over this anarchist cookbook.
Quote, "I have not seen the book myself but apparently the reviews have
caused quite a controversy."

He had all those letters from citizens and lawmakers and you can see
them easily actually now because the FBI a few years ago released their big
dossier of all their communication in and oust the bureau about this book.
There is also the headlines from the papers from the time. Look, "Book
teaches do it yourself anarchy" and "Recipes for sabotage destruction."

But for all that legitimate concern expressed at the time and the FBI
wrote back to all those people who wrote to them, saying, yes, we are
concerned too. And for all those expressions of concern, there really was
no way to stop its publication.

Today, you can still buy something that is called "The Anarchist
Cookbook". You can buy it on Amazon. Amazon says it is in stock as of
this afternoon and they`ll offer to gift wrap it for you. But, also while,
you are there, you will see if you scroll down the page an author`s note
from the guy who wrote it, saying he does not want it to be published. He
has been trying for decades to have it not published and not circulated
anymore.

The copyright is apparently not in his name as its author, so he found
himself powerless to block the continued propagation of "The Anarchist
Cookbook." He is essentially imploring people, asking people to stop
buying it and stop propagating it.

Now, the fact that his author`s note is attached to a copy of the book
that is currently for sale online show that his efforts to stop the book
from circulating have been in vain. The book is still circulating.

But he also notes and this is important, he notes the circumstances
under which he wrote "The Anarchist Cookbook." He says first of all I was
19 when I wrote it. He says he wrote it mostly out of fear and anger that
he was going to be drafted into the Vietnam War.

But her also says he researched all the content of the book, including
the bomb recipes and all the rest of it, not through any specialized access
that he had through super top-secret explosives labs or something. He
researched the whole anarchist cookbook at the New York Public Library. He
says he mostly used military manuals many of which you can still get at the
New York public library.

So the information about how to do scary and violent things is and
basically always has been open source information. It is available to
those who want it. A convenient if amateurish sloppy collating of that
information into something called "The Anarchist Cookbook" that got a lot
of attention in the 1970s resulted in that information maybe being more
widely disseminated than it otherwise would have been in this country, but
the information has always been there and accessible to anybody who wanted
it.

And that has stayed true as time and technology advanced. Now, for
example, you can find things online or printed on chat books, things that
call themselves some version of "The Anarchist Cookbook". But now, they
also include instructions for all sorts of things that didn`t exist in the
early `70s. So, it`s everything from cellular phone phreaking, which is a
form of hacking, to jackpotting ATM machines, plus all the explosives and
drug stuff that used to be there. So, it`s all the stuff people used to do
in your parents` day plus the stuff people do now.

J. Edgar Hoover could not stop bomb-making from being published as
open source material for the American public in the early 1970s. There`s
no reason to believe that law enforcement can stop this information from
being published either in print or online now, wishing that were not so
does not make it so.

Sticking our heads in the sand about it and pretending it`s not
happening is not just a form of weakness, it`s a form of dumb. This
information is out there. How do we adjust?

How does law enforcement handle the fact they have to assume that
anybody out there who wants to set off bombs can learn how to easily. How
does it affect policing? How does it affect the response to bombing
incidents like what just happened in Boston that you do not need and you
really never have needed instructions from some expert out there helping
you along in your bomb making career? You can do it yourself.

Joining us now is Jim Cavanaugh. He`s a former ATF special agent in
charge.

Mr. Cavanaugh, thank you very much for being with us tonight.
Appreciate it.

JAMES CAVANAUGH, FORMER ATF SPECIAL AGENT-IN-CHARGE: Hello, Rachel.

MADDOW: Is there any difference today with bomb making instructions
available online compared to before the internet where this information was
available and around but maybe not so easily?

CAVANAUGH: It`s faster now and easier to get. You could put your
slippers on and go down with your computer and Google it.

But, you know, I started as a bomb investigator in the `70s when the
Explosive Control Act started. And, you know, you tell the history so
right here with the bombings of the `70s. I could take you back to the
16th Street Baptist Church in 1963 where a dynamite bomb killed four little
girls.

I mean, we had so many bombings in the `70s, large dynamite bombs all
over the place. We would frequently find "Anarchist Cookbook" and other
bomb manuals at the bomber`s house when we served the search warrants. It
was researched at the libraries, bought in, you know, clandestine safe
houses and stuff. It was everywhere. It just wasn`t as easy to get.

MADDOW: What did the Explosive Control Act do to make do it yourself
bomb makers jobs any harder?

CAVANAUGH: Well, what the Explosive Control Act did is it made a
stronger law so that we could stop the bombers and we could catch the
bombers and prosecute the bombers. The best way to stop it is to let
nobody get away with it.

You know, you wonder why people still bomb because who is getting away
with these cases? I mean, Eric Rudolph, Timothy McVeigh, Faisal Shahzad,
these two brothers in Boston, abortion clinic bombers? We rounded them up
in many waves.

Who is getting away with this? They think they can get it away it,
but the United States government has taken agents like ATF and FBI over the
last 60 years and taken bomb squads and we`ve become unbelievable experts
at investigating these things. I mean, it`s the worst thing to do because
we are pretty good at catching the people. Now, when you lay around the
digital age, the iPhones, the crowds, the surveillance, that`s s helpful,
too.

Of course, they`re very difficult cases on their face and that`s why
there is so much resources put into it by the government.

MADDOW: If Dzhokhar Tsarnaev is telling authorities the truth, and
that he and his brother got bomb making instructions online maybe in part
from al Qaeda`s online magazine "Inspire". I looked at the specific
instructions there and I can`t boil an egg but I think if I worked at it
long enough, I might be able to follow those instructions if I wanted to.

Do the people who follow those kinds of instructions who haven`t been
expertly trained, do they need to practice? Would you expect that you`re
going to find they`ve set off bombs out in the woods somewhere, or been
working on something so that they were able to make a working device?

CAVANAUGH: You are exactly right. You know, in many bomb cases, we
would go back and look for, probably all bomb cases, a place where they
tested their bombs. Did they own some acreage? Did their parents have a
farm? Did they have access to a rural area or a place they could test the
bomb?

A lot of times, lo and behold, we`d find a test bomb. Not in all
cases but frequently.

What "Inspire" does that`s so insidious is it gives very detailed
instructions on reliable bomb-making and it`s tested these things
themselves. So, what you have is a bomb master, if you will, somewhere in
the world, who`s made the bomb over and over again and worked the kinks
out.

And so, they give you the recipe. It`s basically a recipe. Somebody
at the cooking lab at the consumer food cooking lab has made the recipe.
They write it down and when you make the cake, wow, it`s great. You make
the cookies, wow, it`s great.

Now, it`s always better if you practice and your bomb will come out
just like your cake and be a lot better if you practice. And the
interesting thing about Boston I think is these are three pressure cooker
bombs at least. Of course, we have the improvised hand grenades, as well.
These are improvised claymore mines. That`s what these are, these three.

We had three improvised claymore mines and they all reliably detonate.
They all reliably detonate. And they`ve been carried in backpacks so
they`ve been bounced around. You`re walking down a street. The fusing and
firing system in there is being jostled a little bit.

You know, we don`t know. We don`t know until the FBI lab comes back
and the forensic ATF guys look at all. But, you know, it looks like there
is a chance -- these are remote controlled detonated and command detonated
devices.

So they are placed, if it turns out to be they`re command detonated,
which looks to me like it is based on the timing and placement and the
circuitry I`ve seen -- you know, that`s a pretty good bomb. That`s a
pretty good bomb.

So, it takes a little instruction. It takes a little training, maybe
a little practice. It`s not to say that the older brother didn`t get some
of that, some of that in the Caucasus. I think he radicalized here first
and probably went over there and maybe met some like-minded radicals, got
ensconced in what I call the al Qaeda virus. It`s what they spread around
the world. Bin Laden is dead but the virus is alive.

MADDOW: Jim Cavanaugh, former ATF special agent in charge -- Jim,
thank you very much for helping us understand this. I appreciate it.

CAVANAUGH: Thanks, Rachel.

MADDOW: We will, of course, be watching to find out if anybody is
ever connected to these guys. At this point, from the initial
investigation, from the initial interrogation, we`re told the surviving
bomber is claiming no personal connection with anybody else who radicalized
these brothers or who trained them. Who knows if that is true? Obviously,
that`s what they`re working on right now.

This story is not going to go away for a long time no matter how much
we want it to as this continues to unfold.

We`ll be right back.


(COMMERCIAL BREAK)

MADDOW: One measure of the intensity of the last week`s news cycle
has been one of the stories that essentially got kicked out of leading news
all together was that somebody sent a deadly poison ricin to the White
House and to a U.S. senator and to a Mississippi judge. Not that a threat
was made to the Senate ricin, but that the actual poison was mailed in fact
in letters and sent to those recipients. The letters tested positive for
ricin both in field tests and in subsequent lab tests.

The main reason I think that story got lost is because of what it was
competing with in the news cycle. A pair of other terrorism and disaster
stories that were unfolding at the same time.

Another reason I think the story is sort of surfaced last week but
then pretty much went away all together was because there was a big
development in the case last week that made it seem like it was over. It
made it seem like they caught the guy. That the guy they arrested was
maybe not really worrying about too much.

(BEGIN VIDEO CLIP)

TV ANCHOR: A suspect identified as Paul Kevin Curtis was arrested at
his home in Corinth, Mississippi. The FBI says he is the man who tried to
send two potentially poisoned-laced letters to President Obama and
Mississippi Senator Roger Wicker.

Curtis is a colorful character, describing himself on his Facebook
page as a karate enthusiast and Elvis impersonator. But now the stage is a
jailhouse and Mr. Curtis is facing serious charges.

(END VIDEO CLIP)

MADDOW: Elvis impersonator? Yes.

So, there was sort of a side show aspect to the arrest in this case in
Mississippi last week which I think helped it drop out of the news. The
man who was arrested had this amazing online profile as an entertainer, a
profile that involved being a country singer as you heard there an Elvis
impersonator, karate, respect the dragon stuff.

Also, the line that was reportedly printed in those ricin letters, the
line "I am KC and I approve this message", that is a line this individual
had used in online postings before. Specifically in online postings that
sometimes seemed a little nutty or a little paranoid. So the combination
of details we had made it seem like however dramatic the initial headlines
about somebody sending ricin to the White House and into a senator, the
story might basically be over.

Then, today, there was finally a press conference in the case and to
the extent that there has been any just pure spectator value to the story
simply because of its wacky factor the press conference today in
Mississippi did not disappoint.

(BEGIN VIDEO CLIP)

CHRISTI MCCODY, DEFENSE ATTORNEY: I`m holding today the order of
dismissal that dismisses the charges lodged against Paul Kevin Curtis. The
government was able to basically find another suspect who we believe is the
true perpetrator of this heinous crime. So, without further delay, Kevin
Curtis.

PAUL KEVIN CURTIS, RELEASED ON RICIN CHARGES: I would like to thank
all my family, friends, and fans for their love and support over this past
week. But most importantly, I would like to thank Jesus Chris who has been
and will always be my best friend, my bodyguard, my teacher, and my
almighty judge.

Divine Intervention led this amazing, beautiful blonde, blue-eyed
angel to my jail cell.

I would like to add that right now, I can`t really afford to pay her
the million she is worth.

MCCODY: Whatever.

CURTIS: But I am a licensed, certified reflexologist and I`m going to
start with foot massage therapy with Christi. She`s going to be my first
client and I`m going to donate 100,000 hours to community service in
northeast Mississippi to all you ladies who need foot massage therapy.

REPORTER: So, Kevin, what are your plans right now? What are your
immediate plans?

CURTIS: Find my dog Mucow (ph).

MCCODY: Yes, you got that away --

CURTIS: She got out when homeland security swarmed in on me when I
went to check my mail. I haven`t heard anything. I`m just really worried
about her. I bought a fish a week before.

MCCODY: He got Mucow.

UNIDENTIFIED MALE: He got Mucow. My brother has found Mucow.

MCCODY: Mucow is fine.

CURTIS: So, you see, you all probably know more than I know.

(END VIDEO CLIP)

MADDOW: I want to know where the story ends that starts "I bought a
fish a week ago". But they found Mucow.

So, that Mississippi press conference today was all of the things that
made the story seem more strange and less scary since the news of the
arrest first broke. Guys, it got a little sideshow element to it, right?

But the whole point of that press conference today, however,
entertaining it was, is that that`s not the guy. Authorities got the wrong
guy. It`s not the Elvis impersonator guy with Mucow. So, now, there
remains the fact that real ricin really was sent to a judge, to a U.S.
senator, and to the White House.

And the guy who authorities thought did it has been released and had
all the charges against him dropped.

So, who sent the ricin to the White House?

There have been a lot of ricin-related arrests and convictions and
incidents even just over the last decade or so. Two years ago, it was four
Georgia militiamen who are arrested and accused of plotting ricin attacks
against state and federal buildings. In `06, a survivalist in Phoenix was
convicted of trying to make ricin. In `08, a guy who seemed to be making
ricin for fun in a Las Vegas hotel room got hospitalized before he was
jailed.

Back in the `90s four Minnesota tax protesters were convicted of
trying to kill a federal marsh with ricin.

And there is an unsolved series of ricin-laced letters from a decade
ago, the so-called "Fallen Angel" cases where real ricin was sent to the
U.S. Department of Transportation. It was intercepted by the U.S. Postal
Service in Greenville, South Carolina. Ricin was also sent to the White
House by someone identity still unknown whose apparent beef had to do with
trucking regulations. That case is still unsolved.

But, again, that was not the threat of ricin. That was real ricin.
Just like this case in Mississippi. That, today, in very strange fashion,
opened right back up again.

Joining us now is the reporter from "The Clarion-Ledger" newspaper who
first broke the story in Mississippi. Her name is Therese Apel.

Therese, thank you very much for your time. It`s nice to have you
here with us.

THERESE APEL, THE CLARION-LEDGER: Thank you, Rachel. I`m glad to be
here.

MADDOW: So, do we know what exactly caused the feds to release Paul
Kevin Curtis today and drop the charges against him?

APEL: Well, all that I know of at this point, because they`re not
telling us a whole lot. But, yesterday, Christi McCody, his attorney had
made a motion to drop the case because she said none of the evidence
pointed to him. Basically, the only evidence that did was some lines in
the letters that were sent that matched up with things that he had put
online for years. He had been using the same tag line on his e-mails and a
statement that he had used several times through the last 10 years were
used in those letters.

So, they, I think, tied that to him and then they didn`t have any
other physical evidence that I`ve heard of.

MADDOW: When the law enforcement went ahead with search warrants and
searched his vehicle and his home and even went through his computer, as
far as I understand, they found no physical evidence of ricin or any
evidence that he was investigating it, looking it up. Is that right?

APEL: Right. So far, no traces of ricin or any research on it
whatsoever.

MADDOW: OK. The attorney we just heard there, obviously, she`s his
attorney, and so she`s speaking from his perspective. She asserted the
reason the charges against him, her client, were dropped is because law
enforcement authorities in this case have found somebody who is a better
suspect.

We did hear today that somebody else had their home searched today by
law enforcement authorities.

Can you tell us about that?

APEL: His name is J. Everett Dutschke. He is a former aspiring
politician. He is also a dojo master of -- a taekwondo instructor. He
once had a band as well. He is also outspoken online, very much like Kevin
Curtis.

As a matter of fact, some of the parallels, some of the things that
are similar about these two are a little funny if it wasn`t such a serious
situation like you`re talking about.

MADDOW: The parallels are weird. They seem to have been involved in
some sort of online feud, the two of them. They both claim to be members
of Mensa. They both claim to be esteemed martial artists.

There`s no reason to believe that these guys would do anything
together, is there?

APEL: Not from anything that I have seen. It appears their
relationship was nothing but contentious.

MADDOW: This is such a strange story I can hardly believe it. And
yet, we`re left with this very serious bottom line which is these weren`t
just threats about ricin. There really was poison, deadly poison sent to
the White House to a U.S. senator and to a Mississippi judge.

Therese, just in terms of your reporting on this have you had any
indication that any physical evidence has been found whatsoever in any of
the investigations so far to the actual production of ricin, castor beans
being found anywhere, anything that has turned up in terms of traces of
this poison?

APEL: I haven`t heard anything today. I know they were still
searching as of late this afternoon and I haven`t heard of anything that
they`ve turned over if they`ve released that yet or anything. I do know
that there was -- there were some situations in Mr. Dutschke`s past that
did make it appear he may have had a problem with the judge in Mississippi
that got the letter.

MADDOW: All right. Therese Apel, reporter for "The Clarion-Ledger"
newspaper -- thanks for your time in helping us sort this out tonight.
This is something I thought we were over and done with. But appreciate you
helping us figure it out. Thank you.

APEL: No problem. Thank you.

MADDOW: Thank you. Therese Apel, again, a reporter from "The
Clarion-Ledger" newspaper, who broke the story.

All right. Today on Wall Street, we found the intersection between
Twitter and crashing the economy -- a case study in unexpected
vulnerability. That`s straight ahead.

(COMMERCIAL BREAK)

MADDOW: After a long and undeserved absence, tonight, there is a best
new thing in the world. Yay! Legitimately good news from people who did a
great thing that benefits all of us and will keep some of us out of H-E-
double hockey sticks. They had the presence of mind to tape themselves
while they did this thing while still remaining sort of anonymous.

We`ve got the tape and we`ve got the story coming up right at the end
of the show. Long awaited.

Please stay tuned.

(COMMERCIAL BREAK)

MADDOW: Weird things happen in the stock market. Ask United
Airlines.

Monday, September 8th, 2008, United Airlines is flying along as normal
when unexpectedly and totally out of the blue, the value of their stock
plummets, down through the floor. Look at that spike.

That big scary jagged spike there, that was the value of United
Airlines stock falling for more than 12 bucks to 3 bucks in less than one
hour on that one day. This giant company was tanking in the stock market
and at least immediately nobody knew why it was happening. It was really
strange.

When we found out why it was happening, though, the answer was even
stranger. Look at this -- quote, "An erroneous headline that flashed
across trading screens Monday saying United had filed for a second
bankruptcy." That`s what sent the stock plummeting.

Erroneous headline, they don`t mean a newspaper got a fact wrong or
spelled something wrong in a headline, but they mean that the headline is
that that headline should never have existed on that day. What happened
was an old headline from 2002 from six years earlier somehow randomly
reappeared on the Web site of the Florida newspaper "The Sun Sentinel."

Again though, it`s a 6-year-old headline. That was not happening in
2008. That had happened in 2002. That mysteriously popped up on the
newspaper`s Web site. It became searchable and ended up getting alerted to
the stock market. And even with United issuing a statement saying, hey,
this isn`t true, this is a 6-year-old headline, what`s going on?

Even with all of that, yes, shares of United rebounded that day but
not all the way. They closed down 11 percent from where they started
because of a newspaper headline that the Internet repurposed in the wrong
year.

The stock market is weird. That United Airlines thing was September,
2008.

Then there was May 6th, 2010. That day it was not just one company`s
stock bouncing all over the place for no substantive reason. It was the
whole market. What this footage from that day. This starts with the folks
at CNBC freaking out as they get the first hint that something is a little
amiss in the market. So, they`re watching Procter & Gamble stock starting
to go off the cliff. This is the afternoon of May 6, 2010.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: P&G is now down 25 percent.

UNIDENTIFIED MALE: Well, if that`s true, if that stock is there, you
just go buy it. It can`t be there. That is not a real price.

(CROSSTALK)

Just go buy Procter and Gamble. Just go buy it.

UNIDENTIFIED FEMALE: Is this a fund liquidating?

(CROSSTALK)

MADDOW: The stocks go boink and then back up. The markets overall
still ended up over 300 points down today. But at one point, they were
down more than a thousand points.

NASDAQ and the New York Stock Exchange ultimately late in the day
decided to do something kind of amazing. They decided to cancel, to annul
all of the trades that took place in that crazy moment. They decided to
annul all of the trades between 2:40 p.m. and 3:00 p.m. Eastern if those
trades showed a fluctuation of more than 60 percent of what they were
before the flash crash.

What on Earth happened today?

(END VIDEO CLIP)

MADDOW: The 2010 flash crash. What on earth did happen that day?

There was a big report to it, so now we know. There`s lots of initial
speculation that it was a finger problem, that human error caused the big
dramatic plunge. Maybe somebody added an extra couple zeros to an order or
something.

That did not end up being true. The Securities and Exchange
Commission spent months looking into what happened. They issued a really
technical report that found essentially kind of an accidental perfect storm
of conditions. It was already an unusually turbulent day for the markets
driven mostly by stuff going on in Europe.

There was one really big trade, but it was on purpose, legit trade
that added to the volatility. Structurally, though, they said the
automation and interconnectedness and quick trade nature of the markets
essentially massively augmented the damage that was caused by those other
things coinciding. And so, for that reason, to the extent that that`s a
reason, we got the 2010 flash crash in May of that year and all of the
trades had to be annulled as if they were a fake marriage.

So, weird things happen in the market. Six-year-old headline, weird,
inexplicable volatility day and stuff getting annulled. Weird stuff
happens.

But then there was what happened to the markets today. This is CNBC
today just after 1:00 Eastern.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The markets kind of falling part her a little
bit just a few moments ago. Now, it starts all the way back up. But in a
very short period of time, take a look at the right-hand side of your
chart. We saw the Dow Jones Industrial Average go from a gain of 135
points to negative 12 in under a minute and a half.

There are all sorts of rumors the market is very jittery about. And
we`re going to follow those up.

(END VIDEO CLIP)

MADDOW: This is what -- look at that. Look. That is what happened
to the stock market. I know you`re washing dishes and just listening and
not looking. You actually have to come to the TV and look at this.

This is what happened to the stock market today. It did regain its
value but for a couple minutes there in the middle of the day it was in
freefall and for one very specific and it turns out deliberate reason.

At 1:07 p.m. Eastern Time, the official Twitter account for "The
Associated Press" tweeted this out to their nearly 2 million followers.
Breaking -- two explosions in the White House and Barack Obama is injured.

That was not true.

Five minutes later, "The A.P." tweeted that their account had been
compromised and the earlier tweet about the White House was not true. But
something like 1,500 people had already retweeted that initial very
alarming message and the market had done this.

For the rest of the day and still tonight, this is what "The A.P.`s"
Twitter account looks like right now. They have suspended their account
until they can figure out what happened and how it happened.

In the meantime, though, the very first question at today`s White
House press briefing was about the fake tweet and its fake claims about
explosions at the White House. The White House Press Secretary Jay Carney
assured everybody that President Obama is fine.

A group called the Syrian Electronic Army, which is described as a
pro-Syrian regime, pro-Assad group took credit for the fake "A.P." tweet
today. They have taken credit for doing similar things to other news
organizations like NPR and CBS News.

They have also claimed responsibility for hacking into the Twitter
account for FIFA, for the World Soccer Federation. And apparently, Twitter
keeps kicking them -- excuse me, Twitter keeps kicking off Twitter, off the
service but they keep popping up again under different names.

By the end of the day, of course, Twitters were all making fun of the
whole episode. But both the FBI and the Securities and Exchange Commission
are now launching an investigation into what happened.

Joining us now is Mat Honan. He`s a senior writer with "Wired"
magazine. He`s got some exclusive reporting for us on what happened with
that fake "A.P." tweet and its response today. Mat was also personally the
victim of a targeted hacking attack last year that took over his online
existence.

Matt, thank you very much for being here. I appreciate your time.

MAT HONAN, WIRED SENIOR WRITER: Thanks for having me, Rachel.

MADDOW: I know you`ve got reporting to share on this story in terms
of what happened and how it is being responded to. What can you tell us?

HONAN: Well, you know, I think one of the interesting things that
happened here is initially there was some speculation that the password had
been guessed but it looks like it was a spear fishing attack. "The A.P."
said that earlier, where someone had gone in, sent an e-mail to "A.P."
employees that appeared to come from another "A.P." employee and asked them
to enter their log in information online and somebody did that.

MADDOW: OK. This Syrian Electronic Army group that claims
responsibility for this attack on "The A.P.", is there a reason to believe
they in fact did it? And is that type of spear fishing approach the way
they have done this to other news agencies?

HONAN: I`m not sure what they`ve done to other news agencies but
there is a pretty good reason to think they did it. They certainly pulled
it off before. One of the "A.P." accounts retweeted something from the
Syrian Electronic Army, which you would have to think, you know, "A.P."
didn`t actually want to do, taking credit for the other hack.

They`ve shown an amazing ability to go after all of these people from
the BBC to "60 minutes" to now "The A.P." It`s been, you know, you don`t
want to condone it. It`s been kind of impressive to see.

MADDOW: You know, the reason I think this deserves national attention
is because we saw that harm done, that economic harm done on the market
today.

HONAN: Right.

MADDOW: Quickly reversed. It got me thinking though about what would
have happened if this had been hacked in a way that could not be easily
disproven, if it had been hacked in a more complicated way, in a way that
involved more addresses and seeming corroboration of an initial report like
this. It seems like this is a vulnerability in terms of at least the
market`s response to information like this that we don`t quite have a
handle on.

Is that fair?

HONAN: Yes, I think that`s true. I think it is one of the reasons
twitter has a pretty good ability to self-correct. You know, a lot of
people weigh in and say especially if from one source that this is wrong.
But I think it is one reason we need to be able to go back and correct our
tweets now. I think it`s a feature that I have called for and I`ve seen
other people call for that I`d love to see.

MADDOW: I know that one thing people are going to be looking to here,
this is not something that seems specific to Twitter in terms of the
overall vulnerabilities as pointed out in our system. But what do we know
about how Twitter is responding and their security practices? You say
you`ve called for that, people to be able to correct these things.

But what else could they do and what are they doing?

HONAN: Right. Well, one of the things people have been asking them
to do for a long time is start a two-step authentication. And all that
really means is that instead of just having a password, you have a password
and you have something else, that`s usually a code sent to some sort of
device. So instead of just, you know, if someone gets your password or
gets you to enter it in a phishing scam, you`re not totally hosed because
they still have to have the device where you get the code sent before they
can log in somewhere new.

And what I was able to learn today is Twitter which has been, you
know, they posted a job opening about this a few months ago, has that in
place and they are hoping to roll it out soon.

MADDOW: It might be a good occasion on which to get some attention
for it.

HONAN: Yes.

MADDOW: Mat Honan, senior writer with "Wired" magazine. Mat, thanks
for helping us figure this out. I much appreciate your time.

HONAN: Thank you, Rachel.

MADDOW: Thanks.

All right. Recent twens -- recent twens.

(LAUGHTER)

Now, I`m going to be talking like that for the rest of the night.
Ready?

Recent trends have me wondering if serving as a U.S. senator has
become a drag. A brand new data point to support that thesis, coming up
next. Right away.

(COMMERCIAL BREAK)

MADDOW: Seven newspapers across Montana ran this ad on Sunday,
targeting Montana Democrat Mark Baucus for voting against background checks
for gun sales last week in the Senate.

"Senator Baucus, it was wrong to vote no on stopping gun violence.
Seventy-nine percent of Montana voters support background checks. Stand
with us, not with gun manufacturers."

This is a Progressive Change Campaign Committee ad. And similar ads
ran against the other red state Dems who also voted against background
checks.

The conventional wisdom has been that these red states Dems voted
against background checks for political reasons. They`re running for
reelection in conservative states. Background checks were going to fail,
anyway. They didn`t want the NRA coming after them for this vote, so they
voted against. That`s been the common wisdom.

They had to vote no because they`re running for reelection. Except
today, we found out Max Baucus is not running for reelection. He`s up in
2014, but he`s quitting instead of running again. After six terms, he`s
quitting. He`s been in the Senate since I was five.

The retirement of Max Baucus is not exactly being met with a wailing
and gnashing of teeth on the American left.

The generally liberal-leaning "Huffington Post" made this their front
page, today, essentially telling Senator Max Baucus to not let the door hit
him on the way out, voted against the DREAM Act, background checks, cited
with banks, back Bush tax cuts, link to lobbyists, the Max Baucus health
care lobbyist complex, recommended girlfriend for federal job, delayed
health care reform, ditched public option supporters, negotiated big pharma
deal.

Yes, in other words, goodbye, Max Baucus.

David Sirota at Salon.com was even more succinct. "Good riddance, Max
Baucus."

But whatever you think of Senator Baucus` legacy as a senator, there
is a bigger question here, which is, why are they all quitting? After the
last election, the Democratic leadership in the Senate said their top goal
was to keep these senators from retiring. Jay Rockefeller, Tim Johnson,
Frank Lautenberg and Tom Harkin. Also, Carl Levin. Democrats in the
Senate said after the election, that their top goal was that none of those
five guys would retire. All of those five guys are retiring, and now Max
Baucus.

A total of eight senators have quit in this Congress already, 25 have
quite just since `09. We`re still doing the numbers in our own research,
but as far as we can tell so far, this appears to be the fastest pace of
U.S. senators quitting that job in modern American history.

Why is the U.S. senate suddenly such an awful place to work? Why are
they all quitting?

We have been trying for months now to book any of the senators who
have decided to quit from either side of the aisle. I have even offered,
which I never do, I have even offered that we would only talk about the
Senate as a place to work. We don`t even need to talk policy.

But so far, not a single one of these quitting senators has said yes.

Listen, as a country, we invest a lot of energy and money and figuring
trying to decide who is going to go to the United States Senate. Tell us
if something is wrong there. What is the secret about this place that has
you fleeing like rats from a sinking ship?

Please, any of you quitting senators, we would love to know.

(COMMERCIAL BREAK)

MADDOW: Best new thing of the week. The FBI on Wednesday last week,
let it be known, that they had identified a potentially bombing suspect on
surveillance video from Boston. But the FBI had not yet released pictures
of the suspect or the suspects.

Nevertheless, the next morning, this was the cover in "The New York
Post". Giant headline: "Bag men. Feds see these two pictured at Boston
marathon." And then, inside the paper, spread out over two pages, feds have
two men in sight, right? Pictures of men with two rings in their faces.

Except these two guys had nothing to do with the Boston marathon
bombings, nothing to do with it at all. The FBI immediately put the word
out that "The Post" had it wrong. But "The Post" decided to stand its
ground. The paper`s editor put out a statement that said, "We stand by our
story."

But "The Post" did publish an update to its story online, "Two men
probed in Boston marathon cleared by investigators." Which is nice, but
sort of cold comfort when there`s no apology. No correction and every
printed issue of that paper all but names these two guys as the bombing
suspect.

Please note that what you see on screen is us blurring the faces of
these two men because the post did not.

This all happened a couple of days after "The Post" reported that
authorities have a suspect in custody the day after the bombings. A Saudi
man, they said. That was also totally untrue and they never corrected
that, either.

They also never corrected their other false reporting that the bombing
killed 12 people. It didn`t. It killed three. But "The Post" never
corrected it because they just do not care.

But, then on Friday morning, when some people opened up that morning`s
copies of "The New York Post," they found a letter inside. That looks like
it was written by "The New York Post" editor. It looks like it was written
on company letterhead.

It says, "Dear readers, it is with great regret that I reflect on `The
New York Post`s` reporting and editorial decisions in the days following
the Boston marathon bombing. For the past four days, "The Post" has
consistently published accounts of the tragic incident and subsequent
investigation that were at best ill-informed and speculative, and at worst
intentionally misleading and harmful to the lives of those involved."

The letter then explains what "The Post" got wrong about the death
toll and the supposed Saudi suspect, and the bag men front page. It
apologizes for each of them in turn.

Then it concludes, "This week, `The New York Post` has acted
recklessly and with flagrant disregard for principles of good journalism.
I`d like to take this opportunity to sincerely apologize to our readers, to
the people of Boston and to the three men who were mistakenly identified as
suspects."

It`s amazing, right? It`s fake. The good folks at "Animal New York"
faked the letter on behalf of "The New York Post." They bought up copies
of the paper, inserted the fake letter into the paper and distributed them
around New York, including at the paper`s headquarters. The saving souls
by proxy of "New York Post" readers everywhere and possibly giving the
people who actually own that paper a glimpse of what might be, what could
be, if you ever cared.

That`s the best new thing in the world today. There is a link to the
fake letter and a video of the whole prank from "Animal New York" at
Maddowblog.com right now.

Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL."

Have a great night.

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

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