updated 2/7/2014 11:18:02 AM ET 2014-02-07T16:18:02

THE RACHEL MADDOW SHOW
February 6, 2014

Guest: Shawn Boburg


RACHEL MADDOW, MSNBC HOST: Good evening. That was fascinating stuff
on Putin. Thank you.

CHRIS HAYES, "ALL IN" HOST: Thanks a lot.

MADDOW: Thanks to you at home for joining us this hour.

Today, the New Jersey Democratic Party circulated this reprint from
the "Newark Star Ledger" from Sunday, November 17th, 1996. You can see in
the upper left hand corner there that there`s a Christmas sale at the silk
floral outlet. Down in the lower left hand corner, that`s sort of a
checking account ad. Up top, a feature of a wood carver, an angel`s head
carved out of wood. It`s very nice.

But down there on the lower right hand side, that quarter-page ad is
an apology, a public letter of apology from a New Jersey County Republican
officeholder at the time named Chris Christie. It`s titled "A statement by
Morris County freeholder", that`s like county commissioner of New Jersey,
"Morris County freeholder Chris Christie."

The following is a letter of apology and retraction which I have sent
to former Morris County freeholder Cecilia Laureys and Ed Tamm. And then,
it`s a letter to them.

"Dear Ceci and Ed, I`m writing to express my sincere apology to both
of you regarding political ads which ran during the primary election
campaign in 1994. The advertisement stated that both of you, quote, `are
now under investigation by the Morris County prosecutor.` Those statements
were not accurate. Neither of you were under investigation by the Morris
County prosecutor at any time.

I sincerely regret any harm to your professional reputations which my
ads may have caused. Those ads were not appropriate. They should not have
been part of my campaign when I ran against you. I fully intend, in any
future campaigns in which I`m involved, to be much more sensitive to the
impact of such tactics. I hope you will accept this heartfelt apology in
the spirit in which it is made. Sincerely, Chris Christie."

Well, the spirit in which that apology was made is that it was legally
required of Chris Christie after he was sued over those ads and he had to
settle the lawsuit. Mr. Christie ran those, the ads with a false claim
about his opponents being under investigation by the county prosecutor. He
ran those ads when he was making his first run for public office. You can
see how young he is there, in 1994, in Morris County, New Jersey.

That claim that he made in those ads was totally false. The people he
was running against were not under criminal investigation. But the ads
worked anyway and Chris Christie won that race. He won that seat on the
county mission, the freeholder seat.

When he got sued over those false ads, though, he ended up settling
the lawsuit. He had to pay money to the people who he`d made the false ads
about, and he had to run that humiliating quarter-page ad in the Sunday
"Star Ledger."

And ultimately none of it sat very well with the people of Morris
County, New Jersey. He ended up losing a race for a state representative
seat, badly. And then he lost that freeholder seat after holding on to it
for just single term.

And that is how Chris Christie was pushed out of public office in
scandal, in the late 1990s. New Jersey politics are a famously rough
trade. Mr. Christie was, in fact, on the receiving end of a kind of
similar campaign with kind of similar results in a later election. But
after he lost his election in 1995 and lost his election in 1997, and he no
longer had any public office, he had to make that humiliating apology, I
had to pay restitution. After all that, he was out.

Mr. Christie returned full time to his corporate law firm and became a
lobbyist. From that position, he raised hundreds of thousands of dollars
for the presidential campaign of a man named George W. Bush. And when
George W. Bush actually became president, that`s how Chris Christie got
back into public office because George W. Bush rewarded his fund-raising
efforts by naming Chris Christie to be the U.S. attorney, to be the top
federal prosecutor in the state of New Jersey.

He had almost no law enforcement background whatsoever. Never been a
prosecutor or anything like that. But he got the gig. It was almost
exactly five years between that heartfelt apology and letter of retraction
in the "Star Ledger" and George W. Bush naming him the top federal
prosecutor in his home state.

And when Chris Christie then became governor of his home state, eight
years later, he basically air lifted his whole top staff from the
prosecutor`s office to the statehouse with him to become his stop staff for
him as a new governor. That included his top two staffers in the
governor`s office. He brought with him from the prosecutor`s office, his
chief of staff and his chief counsel. He brought those guys with him.

And now, and now as the now second term governor tries to find a way
to draw a line under the scandal he`s facing now, tries to figure out a way
that this one ends, now the governor has started telling a new story about
those top two aides. And his own role in this scandal as it unfolded.
MSNBC can report tonight that the new explanation that Governor Chris
Christie has given this week about how he responded to the shutdown of
access lanes on to the George Washington Bridge is contradicted directly by
the governor`s own earlier statements on this matter from late last year.

This story has not yet been the focus of either national reporting on
the scandal or any of the local press that has been covering this story so
intently, but Governor Christie`s new claims we can report tonight,
Governor Christie`s new claims about actions by himself and his top aides
in response to the bridge lane closures do not comport with his earlier
explanations of his own behavior.

Let me show you. You`ll remember that in December, which is when we
first started covering this story, it`s when people first started to resign
in New Jersey over this scandal, when the New Jersey press was first really
starting to get all over this story.

In December, Governor Chris Christie of New Jersey was not just
dismissing this story, he was mocking reporters who had the temerity to ask
him about it. He said it wasn`t a big deal. He said it was insulting to
try to link a governor to something so small as this.

Yes, guys, it was me out there moving the traffic cones, right? He
said the whole story had been conjured up by legislators who didn`t like
him and didn`t have anything better to do.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I worked the cones, actually.
Unbeknownst to everybody, I was actually the guy out there, I was in
overalls and a hat. So, I wasn`t -- but I actually was the guys working
the cones out there. You really are not serious with that question.

Just because John Wisniewski is obsessed with this and Loretta
Weinberg, it just shows you they really have nothing to do. It`s not that
big a deal. Just because press runs around and writes about it, both here
and nationally, I know why that is and so do you. Let`s not pretend that
it`s because of the gravity of the issue.

(END VIDEO CLIP)

MADDOW: That was Governor Chris Christie speaking at a couple of
different press conferences in this past December. He`s belittling
reporters for asking about the story. Reporters nevertheless kept asking
about the story and in response to reporters` questions, the governor
repeatedly insisted that the story just didn`t matter to him. This whole
thing on the bridge, it did not matter to him and it, therefore, should not
matter to the press.

(BEGIN VIDEO CLIP)

REPORTER: You said Bill Baroni made mistakes (INAUDIBLE). Aren`t you
curious why he did this? (INAUDIBLE) Don`t you want to know?

CHRISTIE: I think he said he made a mistake. I mean, you know,
Jenna, I know, I know there`s got to be a time -- sure, it`s probably
unlikely -- that you made a mistake in a story.

By definition, you didn`t do it on purpose. It was a mistake. And
it`s difficult to explain why you didn`t do something join didn`t not do it
on purpose, right? So, Bill Baroni, Senator Baroni has characterized this
as a mistake. I am not curious, believe me, I`ve heard more about this
than I ever wanted to hear.

So if you think my curiosity isn`t satiated, my curiosity is more than
satiated at moment on this topic.

REPORTER: As a former prosecutor, have you asked for, looked for any
evidence?

CHRISTIE: Why would I? I`m not a prosecutor anymore. Why would I?

I have a lot of things to do. I know you guys are obsessed with this.
I`m not. I`m really not. It`s just -- it`s not that big a deal.

Just because press runs around and writes about it both here and
nationally, I know why that is and so do you. Let`s not pretend that it`s
because of the gravity of the issue. It`s because I am a national figure.

So, you know, I know you all think this is some issue of great, great
moment. I don`t. Mistakes were made in the way this stuff was
communicated by Senator Baroni`s own testimony. And they`ve taken
responsibility publicly, both of them, for the mistakes that were made. As
far as I`m concerned, that`s it.

You guys all want to keep chasing it around, chase it around. It`s
your business. But I`m not running around doing independent investigation.

REPORTER: What evidence makes you accept there really was a traffic
study?

CHRISTIE: Because they told me. I have no reason to believe that
they lied. They told us. I didn`t have direct conversation with them, but
they told us, they told the assembly committee that Chairman Wisniewski
chaired. I heard Senator Baroni`s testimony.

I don`t assume people are lying. Especially not people like Senator
Baroni whom I`ve known for a very long time. So, that`s why. If you`re
asking me if I`ve done independent investigation, the answer is no.

(END VIDEO CLIP)

MADDOW: That`s how the governor explained his role, and whether he
looked into this matter at all. When he was repeatedly pressed and
pressured by reporters on it in New Jersey. Now, this week, the governor
has unveiled a whole new story of how that time went.

(BEGIN VIDEO CLIP)

CHRISTIE: As soon as I was aware of the fact that there was a
problem, which was when Pat Foye`s e-mail came out, I had my staff say, go
find out what`s going on over at the Port Authority. Why are they fighting
with each other over this? And what happened?

As soon as I knew that there was some issue here, I asked my staff to
get to the Port Authority and find out what`s going on. The first time
this really came into my consciousness as an issue was when Pat Foye,
executive director of the Port Authority`s e-mail about this incident was
leaked to the media. That`s when I asked my chief of staff and chief
counsel, I said something, hey, would you look into this and see what`s
going on here?

(END VIDEO CLIP)

MADDOW: You did? You dispatched your top two staffers, you
dispatched your chief of staff and your chief counsel to go to the Port
Authority and investigate this matter directly as soon as you found out
about it? You did? That is not what you said before.

(BEGIN VIDEO CLIP)

CHRISTIE: You guys all want to keep chasing it around, chase it
around. It`s your business. But I`m not running around doing independent
investigation. I heard Senator Baroni`s testimony. I don`t assume people
are lying. Especially not people like Senator Baroni whom I`ve known for a
very long time. So, I mean, if you`re asking me if I`ve done any
independent investigation, the answer is no.

(END VIDEO CLIP)

MADDOW: Pressed repeatedly on what he had done to try to get to the
bottom of this bridge situation, Governor Christie not only never mentioned
before this week that in October, as soon as he learned what happened, he
sent his chief counsel and his chief of staff to investigate at the Port
Authority.

He not only never mentioned that before this week, he overtly said a
bunch of times I am not looking into this. I`m not investigating this. I
have done nothing to check out what actually happened. I believe what Bill
Baroni said to the legislature.

Why the new story? Why didn`t he ever mention this before? And did
his chief counsel and his chief of staff go to the Port Authority right
after the bridge closures happened on the governor`s direct orders to get
to the bottom of what happened?

And if so, what did they do when they got there, and why did the
governor never bring this up before when he was asked what he was doing to
get to the bottom of this situation? Why didn`t he ever mention this then?
Why the new story now?

Politically, Governor Chris Christie sort of tried to get away from it
all today. He flew to Texas for a fund-raising trip for the Republican
Governors Association which he runs now. He did one of these trips in
Florida also since the scandal broke. In Florida, Governor Christie did no
events that were open to the public. He took no questions from the press
while he was there. Although Florida Governor Rick Scott did agree to
appear with Governor Christie behind closed doors on the Florida trip.

On this trip today to Texas, not only did the governor do no events
that are open to the public and also didn`t take questions from the press,
on this trip it`s worse even than it was in Florida. He`s there for the
Republican Governors Association, but Texas` Republican candidate for
governor steered completely clear of Mr. Christie on this visit by a couple
hundred miles. Greg Abbott will do no events, public or otherwise, with
Governor Christie while Governor Christie is in Texas. Mr. Abbott
announced he`ll be in Houston while Governor Christie is in Dallas.

Nor will Rick Perry get anywhere near Chris Christie. Rick Perry does
not seem to have anything on his schedule today, but he didn`t go near
Chris Christie at all. Texas Democrats, of course, are delighted that
Chris Christie is there. The quote from the Texas Democratic Party
chairman to the Dallas paper today was this. Quote, "What`s happening in
New Jersey is in a lot of respects a mirror image of what you see here in
Texas with Rick Perry and Greg Abbott."

So, Texas Democrats are psyched to have Chris Christie in their state,
tarring their own state`s Republicans by guilt with not quite association.
New Jersey Democrats back home are also approaching ecstatic at this point,
now trolling the microfiche libraries to find the old evidence of Chris
Christie`s oldest political scandals to remind you that there were older
scandals as well.

But if Governor Christie is looking for the way this scandal ends,
this one is not going to end until it makes sense. Until the governor`s
explanations for what happened and why and who did it make sense, and until
his own explanations of what he did and when, his explanations of his own
role stop evolving over time. We are not there yet.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHRISTIE: As soon as I was aware of the fact that there was a
problem, which was when Pat Foye`s e-mail came out, I had my staff say, go
find out what`s going on over at the Port Authority. Why are they fighting
with each other over this? And what happened?

(END VIDEO CLIP)

MADDOW: Governor Chris Christie of New Jersey taking questions this
week on a local radio station in New Jersey, adding a whole new thing to
what he has said publicly before about the bridge incident in New Jersey,
now saying he sent two of his top-level staffers, his chief of staff and
his chief counsel over to the Port Authority to get the bottom of those
bridge lane closures as soon as he found out about them in early October.

Why is this the first time Governor Christie has mentioned that he did
that? And if his top two staffers did go investigate at the Port Authority
on his orders, right after the bridge lane closures happened, what did they
find out?

Joining us now is Shawn Boburg. He`s reporter for the "Bergen
Record." He`s been on this story from the very beginning. Mr. Boburg,
thanks for being here.

SHAWN BOBURG, BERGEN RECORD: Thank you.

MADDOW: This detail about Chris Christie sending his top two staffers
on a fact-finding mission to the Port Authority, the governor -- the
governor saying this now. He had not said this before. Do you have any
sense of why we might just be finding out about it now?

BOBURG: I don`t. And obviously this is going to be a focus of the
inquiry. There are going to be a lot of documents produced. McKenna, no
doubt the two people he asked to look into this were subpoenaed.
Presumably if they did look into this, if there was a paper trail that
indicated what they found out, it`s conceivable that this comes out.

I think the question that you`re getting at is, you know, Christie has
said repeatedly, I had no advanced knowledge of this. I wasn`t involved in
the planning. There`s a separate question and that`s was he more
interested after the fact in damage control? Suppressing this story? Or
getting to the bottom of it? So, I think this speaks to that.

MADDOW: In terms of the pace of the investigation, and the status of
the investigation, obviously, the first deadline for responding to those
subpoenas from the legislature was Monday. As far as we know, some of the
deadlines for responding to subpoenas from the federal prosecutors, that
deadline was yesterday. Is there any sense thus far about how these
documents are being handled, processed? Anything that might have emerged
already from those documents that have been handed over?

BOBURG: Hearing very little except that so far four people have
responded to subpoenas. There`s voluminous documentation that`s been
produced. Committee members will be reviewing that over the next couple
days. Simultaneously, more documents are expected to come in from
remaining individuals and organizations that have been subpoenaed.

So, this is going to be a process that evolves probably slowly. The
meeting -- there`s going to be a meeting on Monday of this joint committee
to discuss what these documents contain in the early stages. We just don`t
know yet.

MADDOW: The other thing that has emerged since last we spoke, just
over the past few days, was allegations from David Wildstein subsequently
backstopped by some reporting from "The Wall Street Journal" that a man
named Philip Kwon spent allegedly parts of four to five days preparing Bill
Baroni for his testimony to the legislature on these matters, testimony we
know was misleading, it was all a traffic study and nothing else going on.

The Port Authority for their part says the four to five days part of
this is bad counting and there should be nothing nefarious read into the
idea that he might have prepared Mr. Baroni for that testimony.

Can you give us insight into who Phil Kwon is and how he connects back
to Governor Christie?

BOBURG: Phil Kwon was a former nominee to the Supreme Court. He was
not approved for that position and then appointed by Christie to a position
as an attorney in the legal department of the Port Authority.

This is a legal department that has several attorneys. It`s a large
legal staff. Phil Kwon and at least one other attorney was recommended for
jobs at the Port Authority. So, these are people who moved from the
Christie administration to the legal department within the Port Authority.

MADDOW: And then once in the legal department for whatever reason
were tasked with prepping Mr. Baroni for his false testimony about the
traffic study.

You see why this story makes me so crazy. Let me just ask you one
last question, Shawn, in terms of what happens -- what happens next. And
what happens with Governor Christie as he`s trying to govern the state
while also managing this fallout. The timeline about the governor`s
involvement, his knowledge of what happened, what he -- who he tasked to do
what when in terms of responding to it, his earlier denials versus his
later admissions. In terms of what the way his staff was involved.

Do you get the sense that those matters are now settled or do they
continue to evolve? I know at the "Record" you`ve been trying to track the
evolution of his statements. Do you get the sense we`ve now got a firm
timeline from him?

BOBURG: We do have firm dates on certain aspects of this. I think
it`s going to move forward. To me, there are three fundamental questions.
Whether he knew before the lanes were closed. There`s the question of when
he learned about the lane closures. There`s the question of when he
learned there could be some motivation aside from a traffic study behind
these lane closures.

Now, he`s provided some dates on the end points. That is when he
first learned of the lane closures and when he first learned that there
could be political motivations. There`s a little bit of wiggling on the
central question of when he learned that these lane closures became a more
serious issue and what he did in response.

I think when you overlay those timeline points on the actions he took,
they`re going to lead to more questions and he`ll eventually have to
explain his actions vis-a-vis what we know.

MADDOW: I don`t know how he can say, I don`t care about this, how
dare you ask me, this is so stupid, and his chief of counsel and chief of
staff to be investigating it at the same time. Those things do not jibe
for me. But all we want is answers.

Shawn Boburg, reporter for the "Bergen Record", thanks for being here,
Shawn. Appreciate it. Thanks.

BOBURG: Thank you.

MADDOW: All right. More ahead, also some excellent international
swearing coming up. Stay with us.

(COMMERCIAL BREAK)

MADDOW: So, first of all, we learned today that this happened in
conversation between an American ambassador and one of the top officials at
the State Department.

(BEGIN AUDIO CLIP)

VICTOR NULAND, U.S. ASST. SECRETARY OF STATE: So that would be great,
I think, to help glue this thing and have the U.N. help glue it and, you
know, (EXPLETIVE DELETED) the E.U.

(END AUDIO CLIP)

MADDOW: First thing we learned was that that happened.

Second thing we learned is that the State Department official who said
that thing we just had to bleep spent part of her 200s working on a Soviet
fishing troller. Seriously. The State Department pointed that out today,
pointing out that history basically is a way of explaining where it is our
assistant secretary of state might have learned to swear like a sailor.

But the third thing we learned today is that, seriously, that was part
of the argument. Third thing we learned today is someone is taping the
sensitive private sweary phone calls of our assistant secretary of state
who swears like a sailor -- and that is maybe the most interesting part of
all of this.

NBC`s Richard Engel is with us live in just a moment. Stay with us.

(COMMERCIAL BREAK)

MADDOW: This is Victoria Nuland. She is U.S. assistant secretary of
state for European and Eurasian affairs. She`s a career diplomat. She`s
really highly regarded in that field.

You may remember her visiting Ukraine during the protests there and
personally handing out food to demonstrators in Kiev`s main square.

This was not like dropping off a snicker`s bar to your roommate when
he was protesting the use of Styrofoam in the college cafeteria. At the
time that Victoria Nuland made that in-person trip to the main square in
Kiev, the friction between the protesters there and police was escalating
in an increasingly violent and unpredictable way and Victoria Nuland made
it a point, nevertheless, to not just voice support for those protesters a
posing Ukraine`s crackdown but put herself right physically in the middle
of it.

Well, today, somebody anonymously posted crystal clear audio that
appears to be a phone call between Victoria Nuland and the American
ambassador to Ukraine. Whether or not you`ve been following the twists and
turns of what`s been going on in Ukraine, just hearing the high-level
diplomats at work when they have no sense their words are going to be made
public.

I mean, I feel guilty for hearing it because they didn`t intend to,
but it`s amazing to hear this honestly. Somewhere in America today, some
kid heard this surreptitiously recorded phone call and decided right then
and there to become a diplomat when she grows up.

Check this out.

(BEGIN VIDEO CLIP)

UNIDENTIFEID MALE: The (INAUDIBLE) piece is obviously the complicated
electron here, especially the announcement of him as deputy prime minister.
You`ve seen some of my notes on the troubles in the marriage right now.
So, we`re trying to get a read really fast on where he is on this stuff.

NULAND: Good. So I don`t think Klitsch (ph) should go into the
government. I don`t think it`s necessary. I don`t think it`s a good idea.

I think he`s the guy who`s got the economic experience, the governing
experience. He`s the -- you know, what he needs is Klitsch and Tony Book
(ph) on the outside. He needs to be talking to them four times a week.
You know?

I just think Klitsch going in, he`s going to be at that level working.
It`s not going to work.

(END AUDIO CLIP)

MADDOW: OK, first of all, they call him Klitschko, Klitsch. The
ambassador to Ukraine calls him "the complicated electron", and (INAUDIBLE)
they call yats. This is how they talk.

Anyway, so, this is the ambassador, the ambassador, the U.S.
ambassador to Ukraine and boss at the State Department talking with each
other about what they`re going to do with the leadership including
Klitschko, Klitsch, and how they should fit these guys into the quickly
reshuffling Ukrainian government`s future.

They`re basically strategizing about what would do best where, right?
The reason this made headlines all over the world, though, was this very
next part of what they said. Listen.

(BEGIN AUDIO CLIP)

NULAND: And, oh, one more wrinkle for you, Jeff?

UNIDENTIFIED MALE: Yes.

NULAND: Can`t remember if I told you this or if I only told
Washington this, that when I talked to Jeff Feltman this morning, he had a
new name for the U.N. guy, Robert Seary. Did I write you that this
morning?

UNIDENTIFIED MALE: Yes, I saw that.

NULAND: He`s now gotten both Seary and Ban Ki-moon to agree Seary
could come in Monday and Tuesday.

UNIDENTIFIED MALE: OK.

NULAND: That would be great I think to help glue this thing and have
the U.N. help glue it and, you know, (EXPLETIVE DELETED) the E.U.

(END AUDIO CLIP)

MADDOW: So, yes, what we had to bleep there, that`s why it became
international news. I mean, to be fair, you can hear this, I think, to be
fair to Victoria Nuland, from the tone of the phone call and the
conversation leading up to it, it doesn`t appear to be a malicious attack
on the E.U. when she says bleep the E.U. She seems to be implying, if we
can have the U.N. involved to fix this thing, who cares how much help we do
or don`t get from the E.U. Screw them for lack of a better phrase, we can
do this with the U.N.

That`s not exactly what she said. She didn`t say screw. Victoria
Nuland later apologized for her salty language.

But here`s the bigger question about this story today. Where did this
recording come from? Who recorded this? How did a conversation between
two of our top diplomats on a very sensitive topic get leaked to the
public?

Paging Edward Snowden.

White House press secretary Jay Carney was quick to point out today
the recording was first tweeted out by a member of the Russian government.
Mr. Carney basically using innuendo rather than direct accusation to say he
thinks Russia did it.

And Russia and all sorts of security issues, of course, are on
everyone`s mind today anyway with the start of the Winter Olympic Games in
Sochi, amid worries of the threat of terrorism during the games. Less
serious reports and pictures of double toilets and missing door handles and
hotel rooms overbooked or not booked at all and live wires in the shower
and questionable design choices and ongoing hey we`re not quite ready yet
try again soon construction.

Amid all of that making international press, Russia`s deputy prime
minister who`s responsible for Olympic preparations today took time out to
blame anti-Russian bias for what he called this campaign of western media
sabotage to make Russia look bad at the start of the games. The deputy
prime minister made his case to reporters today as follows.

He said, quote, "We have surveillance video from the hotels that shows
people turn on the shower, direct the nozzle at the wall and then leave the
room for the whole day." Which is good, I mean, I guess if you have
evidence these are people -- hold on.

You have videos from inside the bathrooms in the hotel -- you have
surveillance video from the hotel room shower? I`m sorry. What? Your
allegations have just been lost amid the way in which you said you got the
data behind your allegation. You have the surveillance video from the
showers, you said.

Again, paging Edward Snowden.

Now, according to "The Wall Street Journal," after that statement, an
aide pulled the reporter away, keeping the deputy prime minister away from
having to face follow-up questions about the cameras in the showers in the
hotels.

The spokesman then came out and said, quote, "There is absolutely no
surveillance in hotel bathrooms." But there was surveillance on premises
during the construction. So maybe that`s what he meant? And it was the
construction workers turning -- yes. Super creepy.

And the specter of shower cams might not -- might not even be the
scariest surveillance issue in Sochi right now. NBC`s Richard Engel has
been in Sochi for a while yet and he spent time highlighting just how
vulnerable you and your electronic devices are when you touch down in
Russia.

(BEGIN VIDEOTAPE)

RICHARD ENGEL, NBC NEWS (voice-over): One of the first things
visitors to Russia will do is log on. Hackers here are counting on it.
So, we decided to find out how dangerous that can be.

(on camera): Kyle? Welcome to Moscow.

UNIDENTIFIED MALE: Thank you.

ENGEL (voice-over): With the help of Kyle Wilhoit (ph), a top
American computer security expert and two brand new computers.

(on camera): For the purpose of this experiment, we start out with
these fresh machines. And going to see what happens when you turn them on
in Russia.

UNIDENTIFIED MALE: Exactly.

ENGEL (voice-over): Back in the U.S., Wilhoit created a fake identity
for me. Phony contact lists with fake names and addresses. The only real
detail, my name.

(on camera): So, you`re putting my profile on these computers?

UNIDENTIFIED MALE: That`s exactly right.

ENGEL (voice-over): With our new computers now loaded with
potentially attractive data, we headed for a restaurant where we used a new
smartphone to browse for information about the Sochi Olympics. Almost
immediately, we were hacked.

UNIDENTIFIED MALE: So, as you`re going to it, did you see where it
said downloading?

ENGEL (on camera): Yes, I did.

UNIDENTIFIED MALE: Right, it`s actually downloading a piece of
malware.

ENGEL (voice-over): Malicious software hijacked our phone, before we
finished our coffee, stealing my information and giving hackers the option
to tap and record my phone calls.

(on camera): Anything I say on this will endanger my financial
security, maybe even my physical security.

UNIDENTIFIED MALE: Even physical.

ENGEL: Depending on who`s listening?

UNIDENTIFIED MALE: Exactly.

ENGEL (voice-over): Kaspersky Labs, one of the largest computer
security companies in the world, is charged with protecting the games, but
experts here say visitors will bring so many devices the hackers will have
plenty of targets.

UNIDENTIFIED MALE: All this protection, of course, because every
segment of this huge, huge infrastructure can be under attack.

ENGEL: Back at the hotel, Wilhoit was using specialized software to
monitor my two computers. And sure enough, they`d also been hacked.

(on camera): You were able to tell --

UNIDENTIFIED MALE: Yes.

ENGEL: -- that very, very quickly somebody was poking around?

UNIDENTIFIED MALE: Exactly.

ENGEL (voice-over): It had taken hackers less than one minute to
pounce. Within 24 hours, they`d broken into both computers and started
helping themselves to my data.

(END VIDEOTAPE)

MADDOW: NBC`s Richard Engel has been in Sochi covering security
issues of all kinds for NBC ahead of the Winter Olympics. We`ll be joined
live by Richard Engel from Sochi right after this. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ENGEL: Security guard Nikolai Stengen (ph) took us to the trailer
park where he`s living near the Olympic venues, six men to a room.

Nikolai said he`s only been paid a fraction of his salary. When he
started to ask questions, he claims he was fired.

Other guards who didn`t want to talk on camera had similar complaints
and said they`d like to quit.

Nikolai`s employer, Angel Security, didn`t respond to an e-mail from
NBC News.

Disgruntled guards, not the best sign on the eve of the opening
ceremony with 40 world leaders expected to attend.

(END VIDEOTAPE)

MADDOW: Joining us live from Sochi is NBC News chief foreign
correspondent Richard Engel.

Richard, thanks very much for being here. It`s good to have you here.

ENGEL: It`s always good to be with you, Rachel.

And you can probably see behind me, just 13 hours or so to go until
opening ceremony, come on, get on a plane. Join us. We can make phone
calls together. Bring your computers. We`ll call Victoria Nuland.

MADDOW: Exactly. Everybody will know just if she really swears like
that all the time or saves it for the ambassador.

Richard, I`ve got to ask you with this thing about cell phones and
computers and everything. Have you ever encountered anything like that
anywhere else in the world?

ENGEL: I don`t really know, frankly. We set up this experiment to
see what would happen if we were to be hacked. It`s possible we could be
hacked in China or Russia or China or New York or other places that we
travel, but hackers here are very aggressive. A lot of cyber attacks come
from Russia.

And we had been told by numerous experts that with all of the world
leaders and athletes and journalists coming to Russia right now for the
games, that it would be a very opportune time. So we know this time
because we brought a security expert with us what happened. As soon as we
plugged our machines in and started surfing on the Internet and turned on
the phone and did a little browsing, we were quickly compromised.

MADDOW: In terms of how people can defend themselves, I guess, what
is the advice people are getting on how to travel so what happened to you
with the security expert in that controlled environment doesn`t happen in a
more widespread way?

ENGEL: Generally, if you don`t need something, don`t bring it. If
you have that extra laptop or that extra iPad and it has all your personal
information or sensitive banking data, don`t bring it. Also try not to
download anything suspicious.

What happened in our case, I turned on the computer. It was a brand
new computer. A lot of people gave me flak for the way I opened it out of
the box. But we wanted to show that these were new, fresh machines.

And we put this profile, a fake profile, on the computer so that it
would be some data. You want to have something there so people have
something that they want to steal.

And very quickly, within a minute, there were probing attacks, if you
will. People just checking out, who is this, who owns this new machine?
What kind of computer is this? How well defended is it?

Someone is checked into the room on the 14th floor of this hotel. Who
is it?

Then, a short time later, I got a very specific e-mail based on data
that was collected from this machine. "Hello, Richard Engel. We see you
are coming to Sochi to cover the games. Here is some information that you
might want."

As soon as I clicked on that, that first computer was compromised.
The other computer was a popup window that said, "oh, by the way, you`re
going to need this extra software." Each device was different, but each,
all of the attacks were quite sophisticated and once you fell for them or
went for the come-ons, your computer was compromised or phone was
compromised.

MADDOW: The international context with this today, the White House
not exactly overtly accusing Russia, but all but accusing Russia of having
carried out that surveillance on the diplomat`s phone call and having
leaked that crystal clear recording of their phone call.

Obviously, the United States is very upset about this. The United
States has taken a lot of grief for listening in on other foreign leaders`
phone calls. How is that news received in Russia? What kind of impact
does that have there?

ENGEL: Well, there was an article in a Russian newspaper earlier
today talking about how Russia`s already won the gold medal for
surveillance for these games. There is a lively debate about how much
surveillance is going on in the country. How much surveillance is
happening in the lead-up to the games.

There was a law passed in the run-up to the Olympics in which Russia
said openly that it would be collecting data from journalists, from
athletes, from judges with the idea of preventing sabotage or preventing
counterterrorism.

So, the government quite openly does some of the things that the NSA
has been revealed to do. So some people in Russia do criticize it, but the
surveillance continues. Not just from the NSA, but also here in Russia.

MADDOW: NBC News chief foreign correspondent Richard Engel, you
actually are covering sort of all the scariest part of the beat of being in
Russia but you seem to be having a great time doing it which makes me envy
you, man. Thanks very much for being here.

ENGEL: Well, there`s still time. You can be here. We`ll make the
call together and see where it goes.

MADDOW: Yes, I`m going to wash my hair. Thanks, Richard. I`ll see
you soon, man.

ENGEL: See you soon.

MADDOW: We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIPS)

JEFF MCINTYRE, WV AMERICAN WATER CO. PRESIDENT: We don`t know that
the water is not safe, but I can say it is safe.

GOV. EARL RAY TOMBLIN (D), WEST VIRGINIA: I believe that we`re at a
point where we can say that we see a light at the end of the tunnel.

DR. TANJA POPOVIC, NATL CENTER FOR ENVIRONMENTAL HEALTH: You can use
your water however you like. You can drink it, you can bathe in it. You
can use it how you like.

TOMBLIN: I don`t have a problem. I`ve been drinking the water so for
the last couple weeks and, you know, the only thing we can rely upon is
what the experts tell us. We must assume that it is safe. But I tell you,
it`s 100 percent, no.

DR. RAHUL GUPTA, HEALTH DEPT: I drank a couple of sips. It had an
aftertaste and odor I could not finish the glass. Then we had this event
and I drank the whole glass. It did have a little bit of aftertaste, but
the smell wasn`t there, and so I drank the whole glass. Obviously my wife
didn`t like that. That was very clear to me.

(END VIDEO CLIPS)

MADDOW: This is J.E. Robins Elementary School located on Beach Avenue
in Charleston, West Virginia. At 6:00 a.m. today, 6:00 a.m. this morning,
one of the cooks at the elementary school, Nicole Cart (ph), she arrived at
school, turned on the dish washer, ran the hot water into the sinks as she
usually does.

Immediately, she smelled a strong scent of black licorice and her eyes
started burning. A cook who was working with her got nauseated. By 10:00
a.m., they sent home the students from the J.E. Robins Elementary School.

This is Watts Elementary School. It`s located on Charleston`s west
side, a little more than a mile away from Robins Elementary. Same thing
happened there. Licorice scent was in the kindergarten classrooms. All
students were sent home by 11:15 a.m. this morning.

Then, it was Overbrook Elementary School, about 3 1/2 miles from both
schools, about a nine-minute drive. The syrupy smell there came
specifically from the hot water. And the same thing today, kids were sent
home by noon.

Yesterday, it was two other schools, it was Midland Trail Elementary,
and it was Riverside High, both of the banks of the river, about 20 minutes
away from the other schools. But Midland Trail and Riverside High were
closed again today.

After they started running the water yesterday morning, a teacher
fainted. Students and employees complained they felt sick and lightheaded.
Eyes were burning. Noses were burning. One student and one teacher were
hospitalized yesterday from those schools.

So, that`s three schools today, two yesterday. In total, these five
schools in Charleston were shut today. A month after what everybody
thought was a terrible accident but one that was over supposedly. This did
start as an accident, totally preventable accident, terrible obviously
terrible conditions maintained by a shady company operating at a virtually
unregulated industry.

But the lack of emergency planning for a chemical spill of this kind,
lack of sufficient planning to protect the drinking water intake for
Charleston, West Virginia and frankly the botched response after the fact
by officials who keep declaring the all clear before it`s actually all
clear, all of these things have combined to lead to a situation that the
National Science Foundation is now calling one of the largest human-made
environmental disasters in this century.

And for our fellow Americans in West Virginia, this ongoing large-
scale botch job has left the people of West Virginia with no real idea of
who to believe or why they should believe them.

The head of the local health department in Charleston explained to
reporters although he`s personally trying to drink the water at his house,
it smells pretty bad and his wife who`s also a public health doctor thinks
he probably shouldn`t drink it. He says he has twin teenage daughters.
One of them is showering in the water, but one of them will not shower in
the top water and using bottled water instead.

The head of the state bureau of public health says she`s absolutely
drinking the water. No problem. But then she unveiled kind of casually
new advice maybe West Virginians should let their showers run for a while
before they get into the hot water.

After the state announced more than 400 people had been treated at 10
local hospitals since the spill, that state public health official blamed
it on flu season saying people are getting viruses, as many do every
winter. Then, the local health department head responded to that by
saying, hey, we obviously cannot explain away the 400 people going to the
hospital by saying it`s a flu.

OK. So if you`re in West Virginia, and you`re trying to understand
how to keep yourself safe, if you`re trying to understand what just
happened here, who do you believe? And do you drink the water?

I mean, following the governor`s early assertion it`s every West
Virginian`s own personal decision to make about whether they believe their
water is safe, now it`s the CDC who sent an official to Charleston who
yesterday told reporters that pregnant women specifically should follow
their own instincts. And do what they think is good for them. And if your
instinct is to maybe ask the CDC, well, then enjoy the logic.

This is an ongoing crisis. They`re starting up bottled water
distribution in South Charleston again, a month in. Five schools are
closed today because of the water. Schools that were open as recently as
the beginning of this week but they`re closed now. Why are the exposure
issues starting up again?

They say the chemical spill is stopped at the original broken tank.
Well, is it still leaking from something else there from the ground water
or the soil on that site?

"Charleston Gazette" reports this week that still nobody knows the
extent of that contamination of the ground water and the soil at the site.
So, maybe there is new leaking from the contaminated ground water or the
soil. Maybe there is, maybe there isn`t. Nobody knows.

If it isn`t leaking, newly from the site of the spill, then is the new
exposure at these schools and continuing exposure in, say, the head of the
health department`s house, is that coming from on-site pipes and plumbing
at people`s homes and schools and businesses? Does this stuff get into
your water heater and stay there forever? If so, are people going to keep
getting sick, passing out, having to two to the hospital in West Virginia
indefinitely?

The authorities say they`re testing the fire hydrants, which is well
and good if you want to know if it`s safe to drink out of the fire hydrant.
But what about the tap in your home?

The guy at the EPA who is responsible for water protection in the
region where the spill happened confidently told the "Charleston Gazette"
on Tuesday that people`s homes are being test to see if the water is safe
there.

Actually, they`re not. "The Gazette" reporter had to tell the guy
from the EPA that neither the state nor the water company nor anybody else
is doing testing in people`s houses, of whether it`s safe for them to drink
their water. Huh. News to him. One month in.

A few hours later, the EPA spokeswoman confirmed, OK, we checked,
you`re right, the testing wasn`t happening. They just assumed it was.
Who`s in charge here? Who`s in charge not only of fixing this, but of
making sure people are communicated with honestly and clearly about what`s
fixed and what is not being fixed?

It`s not the company that caused the accident in the first place, the
water company, the local health officials, state health officials, the
federal environmental officials, the governor or anybody else you might
think you should be able to ask about this problem, one of the largest
manmade environmental disasters of this century. Our botched and
embarrassing and incompetent and confusing and unserious national response
to this disaster is as scary as the spill, itself.

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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