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'The Rachel Maddow Show' for Tuesday, May 28th, 2013

Read the transcript to the Tuesday show

THE RACHEL MADDOW SHOW
May 28, 2013

Guest:

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

On Friday night, we opened the show with the news of that very
dramatic and very scary bridge collapse on Interstate 5 in Washington
state, that highway bridge collapsing into the Skagit River, bringing down
a few cars with it. Miraculously, nobody was killed in that collapse, but
there were some injuries. That was Friday night.

Then, this weekend, there was another highway overpass collapse. This
one caused by a chain reaction of sorts. A train derailment sent a bunch
of speeding railroad cars slamming into the support pillars of an overpass,
a highway overpass bridge, and that then collapsed the overpass and sent,
again, cars crashing down, in this case under the highway below. Again,
nobody was killed, but there were injuries. That one happened in Chafee,
Missouri, in the southeastern part of the state over the weekend.

Then, today, just outside Baltimore and visible from downtown
Baltimore, there was this huge explosion which was caused by yet another
train derailment. A freight train crashed into a trailer and derailed into
an industrial park outside of Baltimore. It did damage some nearby
buildings. It shut down U.S. Route 40 and it caused that huge explosion
that could be felt miles away. We will keep you posted as we learn more.

But we do know that a 20-block radius around the crash was evacuated
once it happened this afternoon and that hazmat teams were on-site, in part
because the train was to be known to be carrying chemicals of some kind.
That said, the Baltimore County fire chief is saying if it had been a
significant toxic chemical release situation, then that evacuation area
would`ve had to be much larger than 20 blocks. At this point, they`re just
working on trying to put out that fire in Rosedale, Maryland.

In presidential politics today, President Obama spent the afternoon on
the Jersey shore, with his old pal, Republican New Jersey Governor Chris
Christie. They were highlighting the recovery efforts post-hurricane
Sandy.

On the boardwalk at the shore, the two men played "throw the football
at the thing" kind of game, which the governor turns out was much better at
than the president. Still, though, the president got a bear. It is nicer
to win the bear yourself, but sometimes has to be your friend who wins you
the bear.

So, in a very quiet but important policy news today, the most populous
state in the Union, California, today released details on the insurance
plans you can sign up for now in California -- thanks to Obamacare. These
are the insurance plans, private insurance plans that you can get through
the exchange that has now been set up in the state of California.

And apparently, this is a big political secret that has no political
consequences whatsoever and it must not be discussed, but those insurance
plans that you can get now through Obamacare in California turns out they
are way more reasonably priced and comprehensive than everybody expected.
So, lots more people are going to have pretty good health insurance -- kind
of seems like this whole big idea`s working. Don`t tell anybody.

But we need to start tonight at the beginning of time. At least, at
the beginning of political time as measured on the Internet.

The very first election in which there were presidential campaign Web
sites was the year at President Bill Clinton was running for reelection.
He had beaten, of course, a sitting president in 1992 to win his first
term.

And then, in 1996, he was running for his second term. And he was
running against the grand old man of the Republican Party. And I do not
mean that in a negative way about Senator Bob Dole`s age.

I mean it in the sense that he was the household name of his party.
He was the eminence grise, right? He was the trusted, widely respected
Republican of all Republicans. He was a leader in his party for decades.

Bob Dole was not seen as a maverick who liked to buck his party the
way that John McCain was sometimes seen. Bob Dole was not seen as a
moderate. Bob Dole was not seen as bucking his party really in any way.
He was the guy who stood for the Republican Party.

He was essentially what it meant to be a Republican. He was a
conservative. He had led his party`s legislative agenda as the
Republicans` top man in the Senate for a decade.

But that presidential election in 1996 did debut this wacky new way of
reaching the kids out there. The first ever campaign Web sites.

And you could tell when you look back at the archive version of these
Web sites that the campaigns are sort of excited to show how hip they are
with the new Internet web machine site thing.

But you can also tell they don`t really have any idea what they should
be using this for or what`s neat about it.

From the press release announcing the Clinton campaign`s awesome Web
site. It says, "It has a couple of innovative features for those of you
who are familiar with the Internet and the World Wide Web. It`s not very
common to have this kind of ticker, it says, with a changing message at the
bottom constantly moving or to have a server pushing new pictures on to the
page with regularity, right to your own computer." Right to your own
computer.

This is not that long ago. But it really does feel like the beginning
of time in some ways. I mean, the Dole/Kemp site from that year is still
live. You can still go there right now. It`s Dole/Kemp96.org. You can
journey back to the days when "in box" was two words.

But nowhere is it more clear that this is really the beginning the
time. That so much has changed since the first web campaign ever than when
you look at what these guys were running on. You look at the issues page,
right? I mean, this is the Republican Party from 1996. Their presidential
ticket, what they thought they could brag to the country about in terms of
their positions on stuff.

So, here`s Bob Dole bragging about his support for the Safe Drinking
Water Act, and the Clean Water Act, and the Endangered Species Act, and the
Clean Air Act. Here`s some bragging about securing full funding for the
Violence Against Women Act. And all the money that he got for day care for
mothers who want to work but need help caring for their children.

Here he is bragging about the instrumental role that he played in --
we go one more? One more reveal there. Instrumental -- there we go.
Instrumental role he played in extending the Voting Rights Act.

And, of course, his signature issue was the Americans with
Disabilities Act.

Stumbling across the Dole/Kemp campaign Web site which is still live
from 1996, finding that it is still there online right now like a time
capsule, that realization for me today was almost as amazing as realizing
how impossible it would be to call this a Republican campaign Web site
today. I mean, there`s Dole and Kemp bragging about the instrumental role
in passing the Clean Water Act.

The Republicans in the last Congress passed legislation to essentially
get rid of the Clean Water Act. And here`s Bob Dole bragging about fully
funding the Violence Against Women Act. We didn`t have a Violence Against
Women Act in effect for the last year because Republicans in the last
Congress were not sure they were for it anymore. Most of them still voted
against it.

Bob Dole ran for president in 1996 as the Republican who radically
expanded the food stamp program. Republicans all over the country in every
state where they`re in control right now are cutting food stamps, trying to
cut them federally. The evils of food stamps are essential to the whole
Republican narrative of what`s wrong with America today.

This was not that long ago. But one of the two major parties in the
United States has changed so much so rapidly that when you talk policy,
there`s no way to know this was the Republican Party. There`s been an
unrecognizable change in the party over the course of less than 20 years.

(BEGIN VDIEO CLIPS)

FORMER SEN. BOB DOLE (R), KANSAS: I`ve worked on the food stamp
program proudly and the WIC program and the school lunch program.

I`ve learned in my own life, from my own experience, that not every
man, woman or child can make it on their own. And that in time of need,
the bridge between failure and success can be the government itself.

(END VIDEO CLIP)

MADDOW: That was him accepting the nomination. The bridge between
success and failure can be government itself. How far do you think that
sacrilege would go in today`s Republican Party?

FOX News over the weekend aired a new extensive interview they`ve just
done with Bob Dole.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS: Could people like Bob Dole, even Ronald
Reagan, could you make it in today`s Republican Party?

DOLE: I doubt it. Reagan couldn`t have made it. Certainly, Nixon
couldn`t have made it because he had ideas. And we might have made it, but
I doubt it.

(END VIDEO CLIP)

MADDOW: On the right, the reaction to those comments from Bob Dole
has been that they tell you all you need to know about that old squish Bob
Dole, too moderate, right?

What`s important here is not that he said it. So, it`s somebody who
is in a party delivering a critique to his own party, right? That`s always
exciting when it happens. But the important thing, I think, here is that
it`s kind of quantifiably true.

You can prove what he`s saying there because the history of Bob Dole
as the standard bearer is not that long ago. It is even online. And he is
right that his policies from less than 20 years ago as a conservative
leading his party are in many ways anathema to what his party stands for
today.

And that says something that I think is important about American
politics which is maybe too big of an issue to focus on. It`s an issue of
framing because we never talk about it. It is the context in which we
operate rather than the thing that`s happening newly each day that you can
report on.

But over the course of a very short period of time, one of the two
parties in American politics has really changed a lot, has shifted very far
away from the previous self and in the process has abandoned a lot of the
policies that it used to openly espouse.

Is that a done deal? Is that irreversible? Is that process still
underway? Is it slowing down?

This past December, Bob Dole was back on the floor of the Senate where
he had been the Republican Party`s leader for a long time. And, again, he
is retired now, you see him in a wheelchair.

But his time in Congress, his time in the Senate was not so long gone
that he was not there among friends. I mean, Bob Dole served alongside a
lot of senators who were still there -- Harry Reid and John McCain and Pat
Leahy, and Carl Levin and Dianne Feinstein. He served a lot of people who
are still in the Senate. Bob Dole did not serve with the current senior
senator from Kansas, Pat Roberts, but he was a lifelong mentor to Pat
Roberts.

According from "The Wichita Eagle", Pat Roberts who met Dole decades
ago when Dole was in Congress, and Roberts was a marine, Pat Roberts calls
Bob Dole the great man and spent years calling himself Dole`s bucket toter.

Pat Roberts is the man whom Elizabeth Dole calls every time her
husband is hospitalized. Pat Roberts will oversee Bob Dole`s funeral
arrangements when the time comes. They`re very, very close.

And that day on the Senate floor, the reason Bob Dole was there at the
Senate was because the Senate was voting on something that was very
important to him. This voting on the U.N. convention on the rights of
people with disabilities, which would take the rules that were established
here in this country by Bob Dole`s landmark Americans with Disabilities Act
and it would set out those rules as that model for the rest of the world to
say we did this here and it works for us. This should be emulated
elsewhere. We believe it could work elsewhere the way it worked here and
it would be an advance for human rights.

And while Bob Dole sat there and they all greeted him and walked past
him in order to cast their vote, 38 Republican senators voted against him.
And it failed. And among those voting no was the current senior senator
from Kansas, the man who has been Bob Dole`s friend for decades, a man
who`s close enough to Bob Dole that according to the local press, he is the
man who will oversee Bob Dole`s funeral when he dies.

Pat Roberts walked past him that day and voted no on this U.N. treaty
to expand the Americans Disabilities Act, to be a model for the world. He
voted no, because the Republican Party has changed that much.

Is this forever? And where does this end?

Joining us now is Steve Schmidt, Republican political strategist,
former senior strategist to the `08 McCain-Palin campaign.

Steve, thank you for being here.

STEVE SCHMIDT, REPUBLICAN STRATEGIST: You bet, Rachel. Great to be
here.

MADDOW: What was your reaction to hearing Bob Dole`s critique? I
feel like it`s quantifiably true in that a lot of the policies that
identify him with would not fly in today`s party.

SCHMIDT: Look, I think it was offered with love and I think it ought
to be listened to seriously. The Republican Party despite all of the
problems that the Obama administration is having, those don`t mean that the
Republican Party is doing better. If we look at our approval levels, we
look where the Republican brand is, it`s at a very, very low point over the
modern history of the Republican Party.

And we will need people who can step forward under the Republican
banner, communicate to women, to Hispanics, to African-Americans, and make
our party a big tent party again, because when it is, we do well in
presidential elections. We`ve lost now the popular vote and five out of
the last six.

MADDOW: When I -- the thing that struck me in coming across that Web
site was that it was the Internet age. It wasn`t that long ago. It wasn`t
the beginning of time. It was the beginning of Internet time, right?

And so -- this process in the Republican Party has happened fast. It
makes me wonder where the momentum is now. You`ve talked about the need,
essentially, for not just more diverse Republican Party to come to the
floor, but for moderates to come to existence within the Republican fold.

When have you started looking for signs of that yet? When do you
think that happened?

SCHMIDT: Look, I think that all parties have an opportunity to be
reborn and to reform in the context of a presidential election. We talk as
Republicans often that what we need is another Ronald Reagan. I think you
can make the argument fact that what we need as Republicans after losing
the popular vote in five out of the last six elections is a Bill Clinton.
We need someone to take a party that has grown unelectable for national
office in the eyes of the American people and make it appealing again.

Bill Clinton challenged lot of the orthodoxies in the Democratic
Party, from his position on the death penalty to being someone who is for
free trade. He made the Democratic Party after they lost in 1988, 1984,
all the way back with the exception of Carter to McGovern. Bill Clinton
reformed the party and the Democratic Party has been prospering to a large
degree ever since.

MADDOW: What do you think the processes are in the Republican Party
that are driving it into sort of unelectable alley that you`re describing.
What is the mechanism that keeps pulling it?

SCHMIDT: Well, I think it`s a complicated question. There are a
number of things driving that. One of it is campaign finance reform. We
declare that there are different categories of money. Some bad, some good.

But chiefly, we have removed money away from the political parties and
the from political campaigns. Political parties have always been
moderating influences in American politics. We`ve now pushed all this
money to these outside groups. They`re ideological groups, they`re about
enforcing issues discipline. They`re the people threatening to primary you
if you make a wrong vote.

So, both parties are more ideological than they used to be. And we
also have the hyper partisanship of the Internet. We have a conservative
entertainment complex in the Republican Party that used to be the tail on
the dog but now, it`s the tail who is wagging the dog and you have our
political leaders responsive to talk radio hosts. They, you know, tremble
in fear at their boots, scared of being criticized on any given issue.

We have had a strange cast of characters out on the stage in front of
the American people if you look at the last presidential election. It
looked like a reality show on any given debate night.

So, we have a number of structural issues, not the least of which is
the party that has its base in the South, doesn`t win presidential
elections. And the Republican Party cannot be a Southern party. It has to
be a party that has broad regional approach.

If you look at where we were 20 years ago, 1988, George Herbert Walker
Bush won the state of California. We`re not competitive anymore in the
state of California. Not even a pretense of being competitive. We`re not
competing in states like New Jersey that Ronald Reagan and George Herbert
Walker Bush run a generation ago.

So, we need to reinvigorate the party in the Northeast and the West
and we can`t lose ground, for example, in the Rocky Mountain West. The
country is changing demographically and the Republican Party cannot
represent a time in the eyes of the American people that is long gone and
never coming back. We have to have solutions to today`s problems. We have
to have reality-based-solutions, not just a bunch of rhetoric and not just
the angry musings of talk radio hosts all for the American people.

MADDOW: I think the thing that Bob Dole contributed to that critique
this weekend -- and I`m not a Republican, but I can see thanking him if I
was interested in the health of the future Republican Party is that he`s
talking about there being a realistic past to look back to where you don`t
have to look back to too far to see where it did work.

The idea, when it gets to, when you make that critique right there, I
think other people making that critique in the party are talking about
inventing a new Republican Party that`s impossible to imagine. But you`re
right, it`s not, it`s a past that we shouldn`t be out of touch from.

SCHMIDT: Absolutely. Look, the notion that Bob Dole was anything
other than a conservative is just crazy. He was a conservative for his
entire life, for his entire governing career. He`s a solid conservative
mainstream Republican. And the party would be better off if we had more
Bob Doles in it today than some of the other characters running around.

MADDOW: Seeing him get denounced as this squish and this legendary
moderate --

SCHMIDT: It`s just this crazy talk.

MADDOW: It is crazy. Steve Schmidt, I always love talking about this
stuff. Thanks, man.

SCHMIDT: Good to see you, Rachel.

MADDOW: All right. For the first day back after a long weekend,
today was sort of unexpectedly newsy, including one big mystery from Alaska
that has nothing to do with Sarah Palin, Steve, and has been solved.
That`s next.

Stay with us.

(BEGIN VIDEO CLIP)

WALLACE: What do you think of your party, of the Republicans today?

DOLE: I think they ought to put a sign on the national committee
doors that says "closed for repairs."

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MADDOW: Mystery solved, sort of.

Less than a month from today, June 25th, there`s going to be a big
Senate election, Massachusetts voters are going to decide who will replace
John Kerry in the United States Senate. The Democratic candidate in that
race is a current member of Congress, Ed Markey, and the Republican
candidate in the race is a private equity guy and a former Navy SEAL named
Gabriel Gomez. Massachusetts, of course, is tough sledding most of the
time for Republicans, but the national Republican Party`s campaign
committee for the Senate announced last week that they`re sending a bunch
of staffers to Massachusetts to try to help Gabriel Gomez.

That said, they will not disclose the details of their plan to help
him. Quote, "Announcing our strategy to win in Massachusetts is a recipe
for defeat. So, we will leave punditry to the pundits." In other words,
if we told you what our game plan was, then it would not work.

The biggest splash the Republican candidate has made in the race thus
far was when he called his opponent "pond scum". He called Ed Markey pond
scum last week.

Gabriel Gomez has turned out not to be a good campaigner, hence the
fifth grade insults. But his whole line more recently, since the pond scum
thing and maybe this is the influence of the national staffers, who knows?
He`s been trying to pivot this critique that Ed Markey doesn`t really do
anything, doesn`t get anything done as a member of Congress. He`s
essentially inconsequential and therefore, he should not be promoted to the
Senate. That`s the new line.

In the middle of Gabriel Gomez making that argument about Ed Markey.
Today, Ed Markey won a huge political fight and helped solve a really
strange mystery on the issue that he`s the senior Democrat in the House on,
which is energy. And it all goes back to this image which you have seen
before on this show.

This is an oil rig stuck on an island. It is a giant Shell drilling
rig that got beached. It ran aground in Alaska at the beginning of the
year. And there has been since this mystery as to how and why that
drilling rig ended up stuck on that island.

The Obama administration over the last four years has been very pro-
offshore drilling. They have sought to expand drilling wherever they can.
But on this sensitive issue of drilling in the Arctic, the Obama
administration gave the green light, very specifically, the only permits
that they handed out to start drilling in the Arctic were to one particular
oil company, to Shell Oil.

Shell was thought to be the gold standard. Shell supposedly had the
best track record of doing stuff that nobody else was able to do. So, if
anybody can drill the Arctic, Shell can.

So, Shell`s the company that got the permits and then this is what
happened. Shell sent two rigs up there to start drilling. One of them
ended up under criminal investigation, ended up being detained in port
after the Coast Guard boarded it and noticed more than a dozen potential
safety violations, one of their two rigs. And the other one ended up
beached on an island.

Shell was in the middle of trying to tow that rig from Alaska to
Seattle when it encountered a very terrible winter storm, ran into 30 foot
seas and 50 knot winds and that caused that oil rig to lose control and
ultimately run aground on New Year`s Eve, on December 31st.

And that accident gave rise to two mysteries. This is the Arctic,
right? It`s no secret that bad weather happens. So, mystery one, why
didn`t Shell put equipment up there that could handle that kind of weather?

But also, mystery number two, knowing that the rig could not
necessarily handle that kind of weather, why did they put that rig out in
that storm in the first place? Why were they trying to tow it through that
storm?

The National Weather Service essentially predicted exactly what was
going to happen weather wise at the end of December. Shell`s explanation
at the time was that they had access to other weather forecasts. They
believed in their weather forecasting, that they had a two-week window of
awesome weather through which they could deliver their apparently very
fragile drilling rig. Everything would be fine. The weather was going to
be great.

And the guy who called bullpucky on that explanation really early on
was the top Democrat in the House on energy issues who is Congressman Ed
Markey. Ed Markey got all up in Shell`s face and said that explanation
made absolutely no sense, that Shell should explain why they really took
this huge risk, why they put this rig out there, which can`t handle storms
in this terrible, terrible storm that had been totally forecast ahead of
time.

Ed Markey confronted them about a week after the accident on January
9th and he said, come on, you know why you really moved that thing. You
moved it to avoid paying taxes. Come on, admit it.

(BEGIN VIDEO CLIP)

MADDOW: In this letter, Congressman Markey raises another potentially
explosive issue. He says, quote, "It does appear that Shell could have
been exposed to tax liability on the rig had it remained in the state on
January 1st. Shell could`ve potentially been exposed to state tax
liability on the rig in excess of $6 million."

So you got that? If Shell did not get their rig across the state
border by January 1st, they would have been on the hook for 6 million bucks
in state taxes. January 1st, that`s when they need to get their rig out of
Alaska. The rig ultimately ran aground on December 31st.

So, Shell says we only move the rig when we did because the weather
looked so good. The weather did not look good. And oh, by the way, had
they not moved the rig when they did, that would have been $6 million in
taxes, please.

(END VIDEO CLIP)

MADDOW: When Shell was first confronted with that accusation, that
they moved the rig when they did in order to avoid taxes, Shell denied it.
They totally denied that was the case. At a press conference the day after
the grounding, they said taxes were not the reason they were moving that
rig when they did, they were just trying to move it so it could get
repaired. That`s what they said at the time.

That`s what Ed Markey called bullpucky on. And this past weekend,
Shell admitted that Ed Markey was right after all. Shell revealed that the
reason they moved that rig when they did was, yes, to avoid paying taxes.

A Shell official acknowledging that in testimony before a Coast Guard
inquiry into that accident. Quote, "Our preference for the timing was to
be gone before the end of the year. It was driven by economic factors.
The end of the year, to my understanding, was when the tax liability would
have become effective."

Tada! Mystery solved.

And that proves three things. Number one, oil companies lie. Number
two, if Shell is considered the best and the brightest in the oil industry,
if that company offers the world the best chance there is for safely
drilling in the Arctic -- then hey, maybe we cannot safely drill in the
Arctic. But it also proves that Ed Markey was right, again.

He was right after the Deepwater Horizon spill happened when he proved
all the oil spill response plan from all the companies were essentially
carbon copies from each other, including phone numbers for the same dead
guy to call for help in the event of a spill.

He was right after Fukushima, when he called for an accelerated look
at the state of our nuclear reactors in this country. Just this morning,
yet another nuclear reactor, this one in Pennsylvania, was shut down due to
a faulty generator.

And Ed Markey was right about Shell`s accident in the Arctic. The
reason it ended up beached on the island with all of the endangered species
and all the rest of it is because Shell was trying to avoid paying taxes.

I do not know if Ed Markey`s Republican opponent is getting anywhere
with calling him pond scum. But calling him an inconsequential member of
Congress is probably not the right tact. I mean, whether or not you agree
with the consequences that Ed Markey causes or not, the dude is causing
consequences.

(COMMERCIAL BREAK)

MADDOW: So on Sunday night, the mayor of Rio de Janeiro punched a guy
in the face. He was out to dinner at a Japanese restaurant. Apparently
like in restaurants here, you cannot smoke inside restaurants at Rio. So,
the mayor stepped outside to have a smoke and fairly short order, the mayor
ended up slugging a guy right in the mouth. A guy who sings in a rock
band.

And it turns out that is not the most interesting act of alleged
street crime by a big-city mayor in today`s news. No, that story is still
ahead tonight.

Stay with us. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Last Memorial Day, I
stood here and spoke about how for the first time in nine years Americans
were no longer fighting and dying in Iraq. Today, a transition is underway
in Afghanistan and our troops are coming home. Fewer Americans are making
the ultimate sacrifice in Afghanistan and that`s progress for which we are
profoundly grateful. And this time next year, we will mark the final
Memorial Day of our war in Afghanistan.

(END VIDEO CLIP)

MADDOW: President Obama marking Memorial Day this year and using the
occasion of Memorial Day as a sort of milestone for talking about the wars
he has presided over as president. The one he ended in Iraq and the one he
is in the very slow process of ending now in Afghanistan.

While the president made those remarks over the Memorial Day break,
the man he defeated in order to become president in the first place was
taking a secret trip to the Middle East himself to try to get this
president to start a new war there. Senator John McCain this weekend
meeting with some of the rebels fighting against the government in the
civil war in Syria, and once again repeating his John McCain insistence
that the United States get involved in that war, on the side of the rebels,
because, you know, what could possibly go wrong.

It was Memorial Day for us yesterday, but it was business and
government as usual for the rest of the world. And the European Union
yesterday made the decision to drop its ban on sending weapons into the
civil war in Syria. That does not mean that Europe is going to send
weapons to the rebels right away, but now, the ban has been lifted and so
now, it could happen.

Taking the other side in this fight, of course, is a little country
called Russia. And once Europe made that move last night in support of the
rebels, Russia responded by making a move for the other side. Russia moved
in support of the government that the rebels are fighting against. Russia
announcing now that it will send Syria a whole new class of sophisticated
anti-aircraft missiles.

Think about that for a second. Anti-aircraft missiles? The rebels
don`t -- I mean, what does Syria need anti-aircraft missiles? The rebels
do not have airplanes. The rebels are street fighters.

So, why send the Syrian government anti-aircraft missiles? It`s not
to fight the rebels. It`s to fight us, presumably -- or to fight any other
country that might be tempted to use air power to help the rebels by say
setting up a no-fly zone or something, like what John McCain has been
arguing for.

And Russia is being explicit about why they`re doing this. Asked why
they`re sending these anti-aircraft missiles to Syria, the deputy foreign
minister in Russia says, quote, "We believe that such steps to a large
extent help restrain some hot heads considering a scenario to give an
international dimension to this conflict."

So, Europe is moving toward arming the rebels, Russia is sending
missiles to Syria so the Syrian government can shoot down the aircraft of
any foreign countries who try to help the rebels. Israel says what Russia
is doing with these missiles is that a threat that Israel cannot tolerate.

The Israeli defense minister telling reporters today, "Clearly, this
move is a threat to us. The shipments have not been sent on their way yet
and I hope they will not be sent. But if, God forbid, they do reach Syria,
we will know what to do."

Oh, yes, and also the militant army of Shiites in Lebanon, Hezbollah,
now says that they will fight completely and to the death against the
rebels to make sure the Syrian government stays in power.

So, that`s Syria, Lebanon, Israel, Russia, the European Union and John
McCain. All in the soup together now, all working on the theory that more
weapons and faster escalation is the right way forward now.

This does not seem to me like it is going to end well. But what do I
know?

Joining us now from Beirut in Lebanon is NBC News chief foreign
correspondent Richard Engel.

Richard, thank you for staying up into the middle of the night for us.
Again, it`s great to see you.

RICHARD ENGEL, NBC NEWS CHIEF FOREIGN CORRESPONDENT: It is great to
see you and it`s hard to see how this is going to end well or how it is
going well right now. There are really no good options here, because the
conflict is spreading. It is already inside Lebanon. It is certainly
inside Syria, it is certainly in Iraq, a country you didn`t mention where
there were just about a dozen car bombs the other day.

So, something needs to happen. Whether it`s the maximalist approach
that John McCain is pushing for, whether it is diplomacy that the White
House is pushing for, whether it is the continued option, which Israel
wants of being able to go into Syria with its planes, which is why it
doesn`t want Russia to give Syrians any anti-aircraft missiles because
Israel wants the option to go in when it has to and when it wants to and
pick out specific targets.

There are many different possible approaches here and I think it`s the
choice of picking the least worst option.

MADDOW: Seeing all these different sides choosing different armed
approaches towards trying to further their side of the conflict makes me
wonder about the third way, right, which is the idea of peace talks. And I
know that you have not been very optimistic about the prospect for any
diplomatic solution, but these peace talks are due to get underway in
Geneva.

Do you see any hope for anything positive coming out of that?

ENGEL: The problem is there are several different groups within the
opposition. The main body is right now meeting in Istanbul, Turkey, and
we`ve been in touch with them today and they are fighting among themselves
because they can`t come up with the final list of who would go to the peace
talks in Geneva.

So they can`t decide who among themselves should represent them. They
also can`t decide on the agenda. There`s part of the group that wants to
go to these talks, only if they`re to be discussing Bashar al Assad`s
departure, there are other members of the opposition who fear if they go to
the talks, they will lose any kind of credibility that they might have
inside Syria, because already the people who we`re talking about who are
divided aren`t necessarily represented inside the country.

When you go inside Syria and you see these people fighting and
believing that they are being attacked by chemical weapons and dying and
dying in very large numbers at least 80,000 is the latest estimate, and
that is generally considered a conservative estimate. When you talk to
them, they say who are these people who are the Syrian opposition living in
hotels in Istanbul or Cairo or Qatar, who elected them?

And those people who don`t have a lot of credibility can`t even decide
among themselves who should represent this shadow government in talks in
Geneva with Russia, by the way, which is saying that it is sending weapons
to the country.

So, these talks are being sponsored by Russia even as Russia is
announcing these weapons shipments.

MADDOW: Richard --

ENGEL: So, yes, to answer your question, I`m not overly optimistic
about the talks.

MADDOW: Well, and, yes, and if we can`t figure out who is going to be
talking that`s usually a bad sign of expecting those talks to get anywhere.
But, Richard, in terms of that divided opposition and in terms that, you
know, different parts of the opposition standing for different things and
having different levels of credibility, how does that translate in terms of
the military conflict? We`re hearing the rebels say if they don`t get some
help soon, they could lose a key strategic city.

Based on your reporting, what were you able to see about the fighting
situation on the ground and whether or not that claim from the rebels holds
water?

ENGEL: They`re very concerned about losing the city of Qusayr, and
that is why you`re seeing so much activity in Lebanon right now. The city
of Qusayr is not far from the Lebanese border and it sits along a highway
that effectively connects the Shiite militants, Hezbollah, and the Syrian
regime in the city of Homs.

And Syria wants to keep this flow open. It wants to be able to have
connectivity between Hezbollah and between key government posts inside
Syria. And Qusayr, which has been long held by the rebels, sits right in
the middle of this pipeline, if you will, or this supply line.

And now, Hezbollah is sending more fighters in. There were several
funerals just today for Hezbollah fighters who have been dying in Qusayr.
And that`s why you`re hearing Hezbollah talk so much more about it because
it`s very close to the Lebanese border and it is considered strategic by
Hezbollah, which likes to keep connectivity with the Syrian regime, and
Syria which believes it needs Hezbollah to have its sophistication to have
its weapons and to have its men.

MADDOW: Richard Engel, NBC News chief foreign correspondent, Richard,
I can see you drawing the map in your mind as you are explaining that to
me. And so, we will do you a favor, because it`s the middle of the night
there, we will post a map showing the strategic location of Qusayr tonight
on our Web site, so everybody can wake up with it, at least.

Richard, thank you so much. I appreciate you being with us, man.

ENGEL: No problem.

MADDOW: All right.

Tonight`s heist news -- you know there would be some heist news.
Tonight`s heist news comes in the form of a giant cash pile of $6 billion.

Heist. That`s coming up.

(COMMERCIAL BREAK)

MADDOW: We were going to do an update on the story of the Toronto
mayor of whom there`s allegedly a video of him smoking crack, but the
bottom line of that is still nobody has seen the video. And Gawker did
raise $200,000 to try to buy it from the guys who made the video, but they
don`t have the video. I was going to do the whole story on that, but
that`s basically what you need to know.

The reason I am killing that story, we have breaking news from
Anaheim, California, tonight. There was an explosion at the Disneyland
theme park in Anaheim, California, tonight, just a little bit more than an
hour ago, 5:30 local time, 8:30 East Coast Time. It apparently happened in
Toontown area of the park. There are no reports of injuries, but Toontown
attraction was evacuated as precaution.

Authorities are telling "The Los Angeles Times" that the explosion at
Disneyland tonight appears to have been a dry ice-related explosion,
although we are not sure what that means. In general terms, of course, I
can tell you that if you combine dry ice with hot water, in a confined
space like a sealed plastic bottle, that sort of thing can explode. That
can happen either accidentally or by design. But at this point, police say
they`re at the park gathering evidence.

Again, it is an explosion that according to authorities talking to
"L.A. Times" is dry ice related. It happened at Disneyland about an hour
ago. Right now, no injuries, but the police say they`re investigating and
they are on the scene.

We will give you more news about this story as we get it.

(COMMERCIAL BREAK)

MADDOW: Heist. One of the more notable heists that we have reported
on in the news recently is the $45 million bank heist, where the money was
taken out largely through ATM withdrawals in more than two dozen countries
simultaneously, including more than $2 million that was taken out of ATMs
in cash in Manhattan.

Today, the very busy federal prosecutor in Manhattan took some time
away from his usual job of busting a different member of the New York state
legislature every day, to instead announce a huge, huge new bust that may
also explain what happened to all that money from the bank heist.

And while the basic crimes that we commit as humans have pretty much
been the same since the dawn of humanity -- lying, cheating, stealing,
violence -- that`s pretty much what we do as a species, the latest
evolution as thieves and cheats, they can sometimes be hard to keep up with
as technology keeps up with our lying and cheating and thieving, right? It
is however totally fascinating, this latest stuff, if you actually figure
out what it is that they are doing.

One basic problem of stealing money or making money illegally on a
big, grand scale is that money as a physical object can be big, it can be
heavy, physically, money can be an awkward physical thing to have too much
of. If you had a million dollars in dollar bills sitting in a bag on your
kitchen table, that million dollars in that bag on the kitchen table would
weigh more than a ton. Your kitchen table would end up in splinters.

The other problem with cash money that you earned by illegal means is
that you earned it by illegal means, and sometimes people can tell and that
can get you in trouble.

So, say hypothetically that I, Rachel Maddow, am a crack dealer, a
profoundly successful crack dealer. I`m having a great hypothetical crack
dealing year, spent some time up in Toronto maybe. I`ve been traveling
around. I`ve really got an avid customer base.

I made buckets of money hypothetically. I in fact have made a million
dollars, and I`ve got it all in wadded up filthy $5 bills I got off my
crack customers.

So, in one hand, that`s great for me and easy to the extent that I
want to buy things that I can buy using $5 bills. Hello, crankbait.

But if I want to do something keeping with my self image, now that I`m
so successful in my crack dealing business, I wanted to buy a Ferrari or
something, right? There are few large scale purchases like that, that you
can make in $5 bills.

Also, I plan on continuing to make this kind of big money, which means
that the money piles up in a mountain. And I cannot live an entirely cash
life-style. So I have to get that money out of my living room and put it
somewhere.

Obviously, I don`t want to pay taxes on it, because I am a crook. I
certainly can`t just take it to the bank, because taking huge piles of
wadded up filthy $5 bills to my friendly local bank for deposit will
ultimately get me reported to the proper federal authorities for doing
something sketchy with large amounts of cash.

What I really need is a safe place to put my dirty money, so nobody
can tell any more where it came from. So this is my dirty money, I am
going to put it in this black box. Drop my money into the black box, I
swish it around, then when I go to go back to get my money, oh, look, it is
all clean.

My money has been laundered. Nobody has any idea where this came
from. It used to be drug money, now it is money money.

You can do it yourself to have access to the funds. You can be the
person taking the laundered money you put in.

You can also let somebody else take it out as a form of payment from
you. But the point of the black box is that nobody has any idea where this
money started. The origin of the money, me back on the street hustling
crack to the political luminaries of North American large cities, that
disappears in this box. What goes in dirty comes out clean. It is the
second oldest trick in the criminal book, making origins of illegally
gotten money go away.

Only these days, the origins disappear through the means of an
invented Internet only currency that doesn`t exist in the world, that
supposedly makes the machinations of this black box seem sort of legal.

This is a Web site of the company that got busted today by federal
prosecutors. The company called Liberty Reserve, standing by to help you
with all your money moving around needs.

Well, Liberty Reserve`s Web site after the bust now looks like this.
This domain name has been seized. It has all of these law enforcement
shields. The indictment today says this company, Liberty Reserve,
essentially has been a way to make the origins of money disappear and the
anonymity, functioned to create the world`s most seamless and infinitely
expandable way laundering machine in a way that Al Capone would have just
died for.

That`s the allegation. Instead of "Bugsy Malone", here you have
"Russian hackers" in the indictment as one of the counts. Or also another
count that was just called "Hacker Account", or "Joe Bogus", who signed up
with the address of 123 Fake Main Street, completely made up city, New
York, which if trying to not get noticed turns out to be a fail.

Prosecutors are now charging seven people. They say this may be the
biggest money laundering scheme ever in the history of the world, $6
billion with operations based in Costa Rica, but with 10 roles (ph) in
Cyprus, Russia, Hong Kong, China, Morocco, Spain, Australia, and other
places.

We on THE RACHEL MADDOW SHOW has a special place in our hearts for a
great heist story. But this -- the heist story is a whole new
technological level of heist.

Now, it`s for "THE LAST WORD WITH LAWRENCE O`DONNELL." Thanks for
being with us.

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

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