updated 2/14/2014 11:38:52 AM ET 2014-02-14T16:38:52

THE RACHEL MADDOW SHOW
February 13, 2014

Guests: Michael Gerrard, Andrea Bernstein


RACHEL MADDOW, MSNBC HOST: Thanks to you at home for joining us this
hour. Happy snow day.

The administration of Republican North Carolina Governor Pat McCrory
has just been subpoenaed in conjunction with a federal criminal
investigation.

Now, this is not New Jersey. This is a whole different governor.

But the language is starting to feel familiar by now. "You are
commanded to appear in this federal court. You are commanded to bring with
you the following documents."

It`s not clear yet who exactly is being investigated and for what
potential crime, but the U.S. attorney`s office for the eastern district of
North Carolina, the federal prosecutor in North Carolina is making the
general terms of this thing very clear. Quote, "An official criminal
investigation of a suspected felony is being conducted by an agency of the
United States and a federal grand jury."

This is a surprise development today. I`m not sure anybody knew this
was coming. This subpoena is dated Monday of this week, that is presumably
the date it was served as well. But the "Associated Press" and local state
WRAL just broke the news of the subpoena today when they obtained the
document and published it.

So, maybe this was more comfortable for Governor McCrory when the
subpoena of his administration was still a secret between Monday and today,
but it did become news today and it became news today on a day that was
already a really tough one in the state of North Carolina. This news of
this federal criminal investigation lands on a day when Governor Pat
McCrory and his administration are already being criticized, not just in
the state of North Carolina, but nationwide, for essentially a botched
response to the huge snowstorm that has brought the whole Southeast and the
East Coast to a standstill.

You remember two weeks ago when greater Atlanta turned into a horror
movie starring hundreds of thousands of cars stacked up on the interstates,
and major Atlanta roads, unable to go forward, unable to go backward.

People trapped in freezing conditions in their vehicles for three
hours, four hours, 10, 15, 20 hours, running their engines for warmth until
they ran out of gas and could not run them anymore. ultimately abandoning
their cars in huge numbers, grabbing the kids, grabbing the coat, grabbing
whatever else you could and walking off down the road in search of shelter.
Shelter like, say, maybe at a home depot for the night.

That was two weeks ago in Georgia. And with that terrible failure
fresh in everyone`s minds, you`d think that this even larger storm that
started yesterday, and we had plenty of warning about it, you`d think this
even larger storm would have put elected officials throughout the region in
the mindset of not repeating Georgia`s mistakes.

And Atlanta, Georgia, certainly learned the lessons from its own
mistakes for this storm, has thick ice settled in across a huge swathe of
Georgia. This time drama and trauma, and zombie movie-style car travel
apocalypse was avoided in Georgia. Instead of that happening in Georgia
this time, it happened in North Carolina. We got it in Raleigh, North
Carolina, and Durham, North Carolina, and Charlotte, North Carolina.

And, tonight, North Carolina is in a bit of a mess. If you want to
see what I mean, check out this sort of trying to be helpful advice from
the "News & Observer" from that North Carolina newspaper, telling the
readers what you can try to do today to try to find your car, to recover
your car if you had to abandon it in the ice storm gridlock traffic
disaster yesterday. If you left your car on the road or side of the road,
the state of North Carolina probably towed it away, but maybe not.

And to find it, according to the local press, you should call, quote,
"a variety of agencies depending on where you think your car might be."
So, good luck.

Yes, North Carolina has got its own very pressing problems right now
that are weather and weather-related policy-driven. But the U.S.
attorney`s office apparently did not shut down this week in North Carolina
in anticipation of this winter disaster, because reporters today have
obtained and published this federal grand jury subpoena for the
administration of Governor McCrory.

Now, specifically, it`s for the agency that`s supposed to oversee
environmental issues in the state. Even more specifically, subpoena
directs the agency`s general counsel to testify before the grand jury, sets
a date and time for that testimony. They`re not just demanding that the
administration hand over records, although they are doing that, too. They
also want in-person testimony. The Pat McCrory administration told us
today that they will, quote, "cooperate with the U.S. attorney`s
investigation."

But when we asked specifically if that means that they will send
people to testify in person before the grand jury in Raleigh, the agency`s
spokesman told us today, quote, "I can`t comment on the specifics."

What it is about is this. This disaster in a town whose name sort of
breaks your heart to even say it now because it`s called Eden, North
Carolina, and it is a beautiful place, but Eden, North Carolina, has a
really big problem because this is what has happened to it.

Eden is up by the Virginia border. It`s about 100 miles from the
capital of North Carolina. And as you can see here, this is a huge spill.
This is the third largest spill of toxic coal ash in American history.

We were supposed to be shocked as a nation into being super careful
about this coal ash stuff after the largest coal ash spill in American
history which was in 2008. That one happened in Kingston, Tennessee. It`s
about 300 miles away from the new coal ash spill.

That Tennessee spill is still being cleaned up now six years later.
The cleanup costs for the Tennessee spill, are well over a billion dollars.
That`s one of the largest super fan site of any kind anywhere in the
country, and that was supposed to be a wake-up call for us, about the risks
of storing giants amounts of this toxic sludge, especially right near
waterways.

But two weeks ago, on Super Bowl Sunday, we did it again. Or rather,
Duke Energy did it. It was their plant. It was their coal ash. It was
their spill.

That company is confirming they, too, have received a federal grand
jury subpoena in this federal criminal investigation that we found out
today, along with the McCrory administration`s subpoena.

And in the first instance, it`s going to have to be that company, Duke
Energy, and that agency, the environmental agency, who are going to have to
answer for what happened here. And the bigger picture, though, the
questions are for North Carolina Governor Pat McCrory. For the government
he leads.

Before he was sworn in as North Carolina governor, Pat McCrory spent
28 years working for Duke Energy. The "A.P." reports he`s received over $1
million in campaign contribution from duke energy and now that Duke Energy
has dumped 73 Olympic-sized swimming pools worth of toxic sludge into North
Carolina waterways, how has the governor from Duke Energy handled the
matter?

Well, the spill began on Super Bowl Sunday, on February 2nd, with tons
of coal ash gunk just glunking out from the 48 inch storm water pipe at the
downriver power plant. Those tons of sludge contain materials like lead
and arsenic and mercury, and all of that stuff flowed out of the pipe for
nearly a week.

The people of North Carolina were not told anything was wrong until a
day after the pipe had ruptured and then both the company and the state
failed to relay accurately just how big the leak was.

Governor Pat McCrory did not make any public statement about this
disaster until four days after it happened. It happened on Sunday. He
didn`t say anything on Sunday. Didn`t say anything on Monday. Didn`t say
anything on Tuesday. Didn`t say anything on Wednesday.

Thursday, oh, there`s the governor. Finally. On day four, he showed
up at the spill site and talked about how tough he`s been on the industry,
and how they`re going to have to clean this mess up.

He put out a press release that day, Governor McCrory directs Duke
Energy to bring coal ash spill under control. The governor`s press release
telling people, quote, "As of Thursday afternoon, downstream municipal
water supplies remain unaffected and reporting that drinking water in their
communities is safe to drink." That was from Governor McCrory`s office
four days in this spill.

Well, now state health officials are saying not only do not drink
water from the Dan River, do not touch water from the Dan River. Certainly
do not eat fish that have been in it. Beware of the arsenic, copper, iron,
aluminum in the water at levels above state standards for surface water
quality.

If you were going from Pat McCrory`s advice, though, right, safe to
drink, everything`s fine. It`s hard to believe it is more unsafe now than
a week closer to the spill when he said everything was safe. Hey, maybe
you can undrink anything you might have drunk and untouch any water you
might have touched in the ensuing week.

The bigger picture here may or may not be what federal prosecutors are
going after, but the "A.P." bombshell this week about how the governor with
his past at Duke Energy, how this governor handled Duke Energy since he`s
been governor is a pretty jaw-dropping story. There dumps of this coal ash
stuff like the one that spilled in 2008, like the one that spilled into the
Dan River two weeks ago, there`s dumps of this stuff all over the state of
North Carolina. And since pat McCrory has been governor, environmental
groups have sued to try to get dumps like this cleaned up and made safe.

The first one they sued over was in Asheville, North Carolina. Second
one was in Charlotte, North Carolina. In both instances, these lagoons of
toxic stuff that Duke was maintaining at these sites, those lagoons of coal
ash were contaminating the groundwater. So, that was the lawsuit, under
the Clean Water Act, you can`t contaminate the groundwater. And people can
sue in federal court if you do.

In both of those cases, though, Pat McCrory stepped in and blocked the
lawsuit. Even though those kinds of suits worked in other places to force
energy companies, even Duke Energy, to clean up sites like that, in North
Carolina, Pat McCrory`s administration stopped the suits. They stepped in.
They used their prerogative as the state to step in and replace the
plaintiffs in those cases. And instead, they, as the state, negotiated a
settlement in private with the company.

The state`s proposed settlement for contaminating the groundwater in
Asheville and contaminating the ground water in Charlotte was that Duke
would have to study the issue of how they were contaminating the
groundwater in places like that. But they would not have to clean up any
of the contamination that they had caused. And they would not have to stop
contaminating the groundwater or do anything different at those sites.
They would have to pay a fine of less than $100,000, a one-time fine, and
that would cover both sites.

If you`re keeping track at home, that`s a fine of less than 10 percent
of just what Duke Energy has given pat McCrory in campaign contributions
over the years. They`re a $50 billion company.

The "Associated Press" today says among the material the U.S. attorney
is seeking with these subpoenas is the correspondence between the state and
Duke Energy about that sweetheart proposed settlement. After the "A.P."
ran this blistering expose on that deal this past Sunday, the next day, on
Monday this week, the state asked their proposed settlement in that matter
be put on hold, at least for now.

After those two environmental cases, the Asheville one and the
Charlotte one, environmental groups tried to sue one more time. But when
they tried to sue one more time, the state moved in and this time, they
blocked the environmental groups not only from suing about another coal ash
pit in North Carolina, they blocked them from suing about any of them, any
of the 30 of these things that Duke Energy has across the state.

Well, now the state is going to have to answer for that to a federal
grand jury. At least that`s what it looks like in this surprise
development today in snowy, snowy, snowy North Carolina.

Joining us now is Michael Gerrard. He`s professor of environmental
law at Columbia Law School.

Mr. Gerrard, thank you very much for being here.

MICHAEL GERRARD, COLUMBIA LAW SCHOOL: Thank you.

MADDOW: In North Carolina, the U.S. attorney subpoenaed both the
company involved in this spill and the state government as the appropriate
regulator here. Is that typical? How unusual is this for an environmental
matter?

GERRARD: This is unusual. EPA starts about 300 criminal
investigations a year for environmental issues. Only a fraction of them go
directly to a federal grand jury, and only a small fraction of those
involve subpoenas to government agencies in addition to the companies
involved.

MADDOW: In terms of the subpoena, itself, it`s -- when I`m looking at
that, I`m looking at the specific documents that the government is being
ordered to turn over. It seems tightly focused to me on this spill. This
spill was only a couple weeks ago. It only happened on February 2nd.

Is that a very fast turnaround for an indictment? Excuse me, not for
an indictment, but for an act of furtherance like this today?

GERRARD: They`re moving very quickly on this. It`s not an indictment
yet, but they`re looking into it.

MADDOW: On the matter of what direction this investigation is going,
is there anything you can tell from looking at the subpoena in terms of
what they`re trying to discern, what they`re trying to find out, and what
federal laws might be at stake here?

GERRARD: Well, spills don`t become criminal automatically. Spills
become criminal if there was serious misconduct before the spill or serious
misconduct after the spill. The U.S. attorney may be investigating whether
the company knew that there was a problem, that there was a pipe that might
leak.

It may be investigating whether the company made full disclosures
afterwards. We just don`t know. We can`t tell from the subpoena. It`s
the Clean Water Act that`s involved.

MADDOW: The context that I gave from that "A.P." story is about Clean
Water Act lawsuits being brought against Duke Energy for coal ash pits
contaminating groundwater. And the state using its prerogative as the
state to step in and essentially replace the plaintiffs in those cases. I
understand that`s not a very unusual phenomenon for the state to come in
and take over an individual plaintiff or group as plaintiff in a case like
that.

What seems eyebrow-raising about that reporting and about those
proposed settlements is how gentle the proposed settlement is toward Duke
Energy. Am I reading that right? That`s my sense of it. How do you see
it?

GERRARD: You know, the Clean Water Act says before citizens can bring
a lawsuit against companies, they need to give 60 days` nose and the 60
days` notice gives the state a chance to step in. It`s called over-filing.
If the state then engages in diligent prosecution, then the citizens can`t
sue -- $100,000 is a relatively modest fine for an event of this sort.

MADDOW: When the state decided this week, "A.P." story came out on
Sunday, the state announced on Monday that it was withdrawing its proposed
settlement of those first two cases, the $100,000 fine and basically
nothing else for those two incidents. Withdrawing a proposed settlement,
asking the judge to no longer consider that to be the prosecution`s offer,
is that strange?

GERRARD: That is very unusual. Usually the state will think very
carefully about what kind of penalty is appropriate and will stick to it.

MADDOW: The suits that have been brought in North Carolina have been
effectively blocked, at least that`s what the environmental groups would
say, by the state`s actions here. Have suits like that actually been
effective at changing energy companies` behavior around coal ash in other
states?

GERRARD: Not necessarily about coal ash, but this suit is common
since the Clean Water Act was first passed in 1972 and it`s turned out to
be an effective way to get companies to clean up. They know that they are
vulnerable to certain kinds of lawsuits that makes them a lot more careful.

MADDOW: Very clarifying to have you here to talk about this. Thank
you, Michael Gerrard, professor of environmental law at Columbia Law
School. Thanks for helping us understand this. I appreciate it.

GERRARD: Thank you.

MADDOW: All right. We`ve got much more ahead including the
"Associated Press" tonight getting their hands on five hours of audiotapes
from emergency dispatchers during the manmade purpose-built traffic
shutdown on the George Washington Bridge this past fall. They`ve reported
what`s in those tapes. It`s amazing.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: Vice President Joe Biden was snowed in today. Thanks to the
giant winter wallop that closed down schools and roads and government, and
everything else. Vice President Biden today was unable to travel from
Washington to the meeting that he had been planning to attend in Cambridge,
Maryland. That`s where House Democrats started their annual retreat
yesterday. That`s where they plot strategy and talk policy and get to
spend time with each other outside of Capitol Hill.

But even though Vice President Biden could not get to them, the House
Democrats meeting went ahead today, anyway, and from their retreat many the
middle of the snowstorm, they lit the fuse and tossed this proverbial bomb
into Washington politics today, when Javier Becerra, member of House
Democratic leadership, announced that House Democrats have this new plan.
Listen.

(BEGIN VIDEO CLIP)

REP. XAVIER BECERRA (D), CALIFORNIA: We are prepared to submit a
discharge position to begin the process of collecting the votes it will
take in the House of Representatives to pass a bill to increase the minimum
wage to $10.10 an hour for all Americans. And we think that`s not only the
right thing to do, it`s about time to do it.

(END VIDEO CLIP)

MADDOW: House Democrats today announcing from their annual retreat
that they`re going to do a discharge petition to try to hike the minimum
wage.

Now, just yesterday, President Obama signed an executive order to hike
the minimum wage to $10.10 an hour. But that executive order applies to
people who work for federal contractors. Expected to affect a few hundred
thousand people, which is nice but it`s not everyone.

What the House Democrats are talking about is raising the minimum wage
for everyone to $10.10 an hour. That`s a very popular idea. President
Obama first talked about it in last year`s State of the Union, talked about
it again at this year`s State of the Union. And since then, Democrats have
put together legislation and a legislative strategy on this issue. And for
that, it helps that it polls really well.

Democrats love the idea of raising the minimum wage. But it`s not
only Democrats, a majority of independents like the idea, a majority of
Republicans like the idea. Everybody likes the idea of raising the minimum
wage, except elected Republicans. Elected Republicans in Congress do not
like the idea, and they will not allow it to come up for a vote.

Democrats aren`t in control of the House, so they can`t control what
comes up for a vote. The speaker has absolute power. Except for this one
weird tactic that Xavier Becerra talked about today.

The discharge position is weird enough and rare enough as a tactic
that some people think it is a myth, but I know it is true because I have
seen "Legally Blond 2."

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I just don`t think I`m cut out for this.

UNIDENTIFIED MALE: Elle, we have a plan. Two words for you:
discharge petition.

UNIDENTIFIED FEMALE: With a couple hundred signatures, we can spring
the bill from committee straight to the House floor for a vote.

UNIDENTIFIED FEMALE: I don`t know. That sounds really complicated.

UNIDENTIFIED FEMAL: You`ve come farther than any of us while
maintaining your balance and sparkle. We never sparkle.

UNIDENTIFIED MALE: None of us ever thought one person could make a
difference until you came along.

UNIDENTIFIED FEMALE: Well, if I remember correctly, isn`t that, like,
218 signatures?

UNIDENTIFIED FEMALE: It`s not that hard.

UNIDENTIFIED FEMALE: Yes, yes. I guess I know women with more shoes
than that. Wait, that`s me.

(LAUGHTER)

UNIDENTIFIED MALE: Elle, it`s time to finish what you started.

(END VIDEO CLIP)

MADDOW: And I don`t mean to spoil it in case you haven`t seen it, but
it works. It works for Reese Witherspoon in that movie. Bruser`s (ph)
bill is the bill they do it on. I don`t exactly remember what the Bruser`s
bill is, but it`s very popular and the speaker will not bring it up for a
vote. But Reese Witherspoon and her pals get around that problem of the
speaker not bringing it up for a vote by having a majority of Congress, 218
members of Congress, sign a petition saying that they would like, please,
to have a chance to vote on that bill.

That is a discharge petition and that is technically how you get
around the speaker if you`ve got a popular bill that the speaker won`t let
you vote on. This is something that`s almost never used. The last time it
worked was more than 10 years ago on an overhaul of campaign finance laws.

But at least on paper, this is an option. And House Democrats said
today that they`re going to try to. They`re going to start one. Start a
discharge petition on the minimum wage next week.

And while that was being announced today from the House Democratic
retreat, this is what the front page of "The New York Times" Web site
looked like all day long. Featuring this article about Democrats may be
using a discharge petition for something else.

New York Senator Charles Schumer telling "The New York Times" today
that the idea was circulating in Democratic circles to also try a discharge
petition on immigration reform. Remember, immigration reform already
passed the Senate last summer. In the House, it would likely get every
single Democratic vote and potentially even more than the 17 Republicans
who would be need to pass it, if it did come up for a vote. But, again,
like with Bruser`s bill and Reese Witherspoon, John Boehner will not put it
up for a vote.

So, a discharge position on immigration, a discharge position on the
minimum wage. I don`t know why Democrats floated both of these ideas in
the same day today or if it was coordinated at all, but it did happen.

The official Republican line about this tactic is it will never
happen, it will never work. Specifically the comment from John Boehner`s
spokesman today was, quote, "This scheme has zero chance of success." He
said by twirling his mustache.

Maybe that is true. Democrats would need some Republicans to go along
with this on either of these two issues. And even on these very popular
issues that would probably be a very, very, very tall order.

But you know what? In this Congress, weirder things have happened.
Democrats have decided apparently they`re going to start throwing Hail
Marys like this. Let`s see what happens.

Watch this space.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: This decision is final. There
is no opportunity for reconsideration of this decision on my part. I`m
done. We are moving.

(END VIDEO CLIP)

MADDOW: That is how a very decisive Governor Chris Christie of New
Jersey just a few months into his first term decided to junk a huge long
awaited public works project that involved thousands of jobs and that had
already begun. Nevertheless, the decision was done. He was moving on.

Now, 3 1/2 years later, the reasoning behind that decision, his
decision to halt everything after that project had already started, that`s
now getting a second look and all tied up, all of a sudden, in the current
investigation into the George Washington bridge lane closures.

The plot thickens on that tonight. As the "Associated Press" gets
ahold from audiotapes from emergency dispatchers during the bridge lane
shutdown.

What is on those tapes turns out is rather harrowing and we`ve got
both of those stories coming up. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: If I blindfolded
someone and took him at 2:00 in the morning into the airport in Hong Kong
and said, where do you think you are? They say, this must be America, it`s
a modern airport.

If I took you and blindfolded you and took you to LaGuardia airport,
you think I must be in some third world country. I`m not joking.

(END VIDEO CLIP)

MADDOW: He`s never joking.

That was Vice President Joe Biden not joking in Philadelphia about the
general problem of American infrastructure and the need to keep up
internationally. But he did make his point by talking about one specific
decrepit part of American infrastructure that`s called LaGuardia airport.

LaGuardia is one of the three major airports that serves the New York
City area and nothing against LaGuardia airport, I have many times enjoyed
an Auntie Ann`s pretzel on LaGuardia concourse.

But to the vice president`s point, LaGuardia was built in 1939. That
was the year LaGuardia officially opened. It`s amazing LaGuardia`s 75
years old, but it`s also kind of amazing to realize that it was built at
that time in our nation`s history. I mean, 1939, right? Great Depression.

And it`s not just LaGuardia that was built then. LaGuardia opened in
1939. The Triborough Bridge, that was built in 1936. The Lincoln Tunnel
between New Jersey and New York City, that was built in 1937. The famous
George Washington Bridge of Fort Lee and Governor Chris Christie fame, the
George Washington Bridge opened in 1931.

And this is true across the country, too. Everything from the Blue
Ridge parkway, to the elevated highway that connects Miami and Key West.
To the Grand Coulee Dam, to the Hoover Dam, all of these things, public
works projects were built during the Great Depression. As were all of
these cornerstones of transportation in and around the nation`s most
densely populated region. They were cornerstones then, definitely
cornerstones now.

It`s not an accident that all of that big picture, big thinking
building happened we the country was in dire economic straits during the
depression. I mean, when the economy went kablooie in 1929, the government
decided to crank up works projects to keep people employed. Private
business couldn`t keep Americans at work anymore. The government did.
They could and they did.

One of the ways they did that helped us pull through those years was
that they built these projects that became foundational to our growth as a
country and to our economic capacity. It helped us keep it together
through the depression and it laid the groundwork for our economic growth
thereafter.

And, yes, it was 75 years ago and, yes, LaGuardia is looking mighty
frowsy these days and needs an upgrade as the vice president said.

The point about investing in public works projects when the private
sector is in bad shape, the idea of investing at that time both to put
people at work during economic downturns and to build things that will be
helpful later that will make transportation easier and business easier in
the future, the salience of that idea did not die in the last Great
Depression.

Same idea made sense, made this particular kind of sense in the second
American Depression. That Great Recession that started at the end of the
Bush presidency with the collapse of the financial sector. What you`re
looking at here are pictures from the groundbreaking in November 2009 for
the largest public works project in the country at that time.

In the midst of the economic collapse that we are in the middle of in
2009, that collapse in private sector employment, this was the
groundbreaking for the first major expansion in generations for the most
densely populated part of the country.

Right now, there is one -- count them -- one train tunnel into New
York City from New Jersey. One tunnel, two tracks. It`s 100 years old.
It`s been at maxed out capacity for a very long time. That groundbreaking
you just saw footage of us to build a second tunnel. This is an artist`s
rendering.

It was two decades or more of planning for a second train tunnel. It
had more federally financing committed to it than any other transit project
anywhere in the nation ever. And it was already underway, $600 million had
already been spent starting the tunnel.

When the year after this ground breaking happened, a new governor was
sworn in in New Jersey. As a candidate, Chris Christie had supported the
tunnel project. He`d written letters to the federal government even a few
months into his first term supporting the tunnel project, saying he wanted
to go ahead with it.

But in October in his first year in office, he changed his mind.

(BEGIN VIDEO CLIP)

CHRISTIE: When you become governor and start to be presented with the
information I was presented with, you`re presented with now a choice of a
project that I do think is a worthwhile project, but that we simply cannot
afford.

(END VIDEO CLIP)

MADDOW: The new governor argued that since he had become governor,
the expected cost of the tunnel had ballooned by billions of dollars. He
said New Jersey was going to be paying a staggering 70 percent of the cost
of the tunnel and New Jersey just couldn`t afford it.

None of that was true. General Accountability Office later did a
report on this issue. They found the estimates of the cost of the tunnel
hadn`t changed at all in the two years before Governor Christie announced
that he was killing it.

Governor Christie said New Jersey was paying 70 percent of the cost of
the project. Actually try 14.4 percent.

Chris Christie sold this whole public line about why New Jersey
couldn`t do the tunnel. Remember, $600 million had already been spent
starting to build it, but the case he made for what was wrong with the
project was not a true case.

And then he kept the money, seriously. Not only did he resist paying
back any of New Jersey`s share of the money that had already been spent, he
kept billions of dollars that had been earmarked for the tunnel and didn`t
spend them on the tunnel. He just took them for New Jersey to use on other
stuff.

New Jersey has a really low gas tax, so he was out of money to do road
and bridge repair work, which he always said it would be fund with gas
taxes. He just took billions of dollars of the tunnel money and spent that
on the repair work instead and thus avoided having to raise gas taxes
because he said he wouldn`t.

See, we don`t need to use tax money. I`ve got this other money that I
found over here. It was somebody else`s money, but I`m going to take it.

Fiscal conservatism -- the same kind of fiscal conservatism that led
famous individuals in our history to pay very low taxes for years until
they didn`t anymore.

So, the tunnel never got built, and all that money for the tunnel got
swiped in a shell game. And that all happened in 2010, 2011, the GAO
report came out in 2012 about it.

But now unexpectedly, it`s all come back because the canceling of the
tunnel, including the issue of the supposed cost overruns that weren`t cost
overruns at all, though issues have been included in this new subpoena
which we obtained last night served on the Port Authority on Monday of this
week. The Port Authority is being asked to turn over documentation related
to the shutdown of access lanes on to the George Washington Bridge. That
much we knew.

But the Port Authority is also unexpectedly being asked for a ton of
information on that tunnel. On the tunnel project that Chris Christie
canceled after it was already started. And that is technically within the
remit of the legislative committee that sent the subpoenas out, but
honestly nobody saw it coming. Why is all this coming up now? What does
it mean for Chris Christie and what does it mean for the bridge-gate
investigation into him and his administration?

Stay with us. I know how to answer these questions.

(COMMERCIAL BREAK)

MADDOW: In the New Jersey bridge lane scandal, the "Associated Press"
says it obtained five hours of audiotapes from emergency dispatchers from
during the time the access lanes on to the George Washington Bridge were
closed last September, and traffic was backed up into absolute gridlock
throughout the town of Fort Lee. The "A.P." that says as far as it can
discern from the records and audio it has heard, the deliberately
orchestrated traffic jam in Fort Lee does not appear to have led to
anyone`s death, but, quote, "The lack of life or death consequences
reflects good fortune, not good planning. It would have been impossible
for anyone responsible to have predicted that such exasperating traffic
would not cause serious emergencies for police, firefighters and
paramedics."

Now, I`ve got to tell you, we`re among many news organizations that
have tried to get these recordings from emergency dispatchers and first
responders. Now that the "Associated Press" heard some of them, we`re
hoping they`ll be released more widely. In the meantime, though, we can
just tell you about the "A.P.`s" quotations from the tapes and logs
according to "A.P." reporting.

Just before 9:00 a.m., September 9th, Monday the first day of the lane
closures, one first responder says, "The George Washington Bridge is
totally gridlocked." a few minutes later a 45-year-old man calls 911 to
complain of chest pain. The dispatcher tells the man, quote, "We`ll do our
best" but has to note the emergency crew headed to the man, "is delayed in
Fort Lee."

One of the mornings of the traffic jam, early morning 911 call from a
nursing home about an elderly woman who fell and cut her face. The
dispatcher says at 6:20 a.m., "She`s been waiting for over an hour."

Again, we`re trying to obtain some of these recordings ourselves, but
that`s what "Associated Press" is reporting tonight.

In addition to the new reporting tonight, there`s the puzzle of the
unexpected reference in the new subpoenas that have gone out this week to
something basically nobody had been connecting to the bridge lane shutdown,
which is the older issue, the 2010 decision by Christie to stop the largest
public works project in the country which was already under way. He shut
down construction in progress on a train tunnel into New York from New
Jersey in 2010.

Why did that stuff turn up in the subpoenas now and should we all have
seen it coming?

Joining us now to try to sort this out is Andrea Bernstein. She`s
senior editor and investigative journalist for WNYC News Radio. Her last
name is actually pronounced Bernstein.

Thank you for being here.

ANDREA BERNSTEIN, WNYC: Good evening.

MADDOW: Didn`t I promise you because I was practicing it, I`d get it
wrong? I didn`t do that to be funny. I`m just a failure. Why do you
think the tunnel stuff is in this round of subpoenas that otherwise seems
to be about the bridge lane closures and the effort to cover up the bridge
lane closures?

BERNSTEIN: Well, there`s a link and I think that the bridge-gate
scandal has been very gripping because it`s traffic, it`s what you were
just describing. It`s people, perhaps, not getting emergency services.
It`s people not being able to get to work.

But what we are learning increasingly is that this scheme was part of
an effort by Governor Christie to use the Port Authority of New York and
New Jersey, a giant bi-state agency, really as an additional arm of this
government and a political wing to solve his political problems.

So what happened during the tunnel, and we`ve learned some of this
since bridge-gate is the same individuals, David Wildstein, Bill Baroni,
the ones who directed the lane closures, were also orchestrating from very
early on, from way before Christie publicly said there are cost overruns
here, they came in to the Port Authority literally two months after
Christie was elected and said, we basically need money, can we use this
money, is it possible to direct it to the Pulaski Skyway which is a road in
New Jersey coming out of the Holland Tunnel?

And they needed to do that because they realized the Transportation
Trust Fund, which has all the money to pay for roads, was empty and the
only way to fix roads would have been to raise the gas tax which is
something that Christie did not want to do going into a potential
Republican election.

MADDOW: So, thinking about, just thinking about the sort of short-
term political incentives there, obviously not repairing the roads is
politically disastrous, because people when they break an axle on a
pothole, they call their local elected officials. They start getting mad.

Not being able to fix them without raising taxes is a big problem,
when the trust fund is empty because of his promise not to raise taxes.

At the Port Authority, looking around for money to dump into that
trust fund so you could avoid the potholes calls, would the tunnel money
have been the biggest pot of money sitting there is.

BERNSTEIN: It was absolutely. It was $3 billion that once it was
taken out of the tunnel could be redirected to this and in fact, that is
what happened. This is not something that the Port Authority has done.

And this is something the same committee that is now looking into
bridge-gate had started to investigate. Where did that money go, how were
the decisions made? Was it transparent?

They were not getting answers. They were stonewalled. So, when it
came to this round of this round of subpoenas, they say we want to
understand this. Because essentially, the trouble with bridgegate is, is
not just the mayor of Fort Lee, but it`s that the Port Authority was being
used in a way that served Governor Christie perhaps more than it served to
do what it`s supposed to do, which is increase port activity in New York
and New Jersey.

MADDOW: In terms of those political incentives might have led to this
decision to not do the tunnel, if it was about getting Chris Christie`s
hands, New Jersey`s hands on that money, it really feels in a layman`s
sense, it feels wrong to take the tunnel money and apply it to something
that`s totally unrelated. Is it illegal? Is there a question of whether
or not that sort of transfer of funds was illegal? How will they able to
lift those billions that were earmarked for the tunnel and use them for
something that was more convenient for them?

BERNSTEIN: I`ve seen a lot of eyebrows shut up into the air. I
haven`t heard anybody say it was a crime, but what is concerning to
watchdogs is that this is not the way this money is supposed to be used.
It`s supposed to be used for the region. And that there`s a concern that
this agency became very politicized to benefit Chris Christie and New
Jersey in a way that it hadn`t been prior to this.

And that`s -- we`re talking billions of dollars. We`re not just
talking about little pots of money here and there being sprinkled around
among friends. We`re talking $2 billion going to a roadway. And that is
what is of great concern. And that`s why the committee is looking into
this, because of that concern.

MADDOW: And that concern about issues like this tunnel and all these
other related issues is how they got subpoena authority in the first place,
which is how we got the time for some traffic problems in Fort Lee e-mail,
which is how we got the bridge scandal, which is how we ended up surprised
when the subpoenas went back to the original story.

BERNSTEIN: I mean, it never smelled right. And now there`s a chance
to perhaps get to the bottom of it.

MADDOW: Andrea Bernstein, senior editor and investigative journalist
for WNYC News radio, I`ve been following your online dispatches and your
radio dispatches about this from the very beginning. It`s been great to
have your reporting on this story. But it`s really nice to have you here.

BERNSTEIN: Thanks so much. It`s wonderful to be here.

MADDOW: Thanks.

All right. We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: In 2010, the once purple state of Wisconsin went red -- very,
very red. And in that Republican wave year, the Republicans in Wisconsin
gained in both the state assembly and senate. It was the first time a
political party had won both houses of that legislature on a single voting
day in more than 70 years.

But it wasn`t just the legislature. Republicans also got the
governor`s mansion that year as well, voters electing Republican Scott
Walker. 2010 was a huge year for Republicans everywhere, but particularly
in Wisconsin. Once they were all sworn into office in Wisconsin, Wisconsin
Republicans moved almost immediately to start taking apart union rights in
that state.

You might remember. It was immediately a hugely contentious issue.
It sparked some of the largest protests that have ever happened in the
state of Wisconsin. People said it rendered the civic fabric of that state
the way they had never seen it before. It led even to division and rancor
and unprecedented political combat like Wisconsin had never seen before in
modern times. It led to attempted recall of Governor Walker, just
absolutely transformed that state.

Why was it so important to them to do that? Why did Wisconsin
Republicans go so far out of their way and cause that much drama in the
state to do it?

At the most basic level -- I mean, one way to understand the
difference between the two parties in this country is that the Republicans
represent people who sign paychecks on the front and the Democrats
represent people who sign paychecks on the back. The ones who cash them,
right?

So, the Republican Party is the party of business owners. Businesses
are anti-union because they want to have maximum leverage over their
employees and pay them as little as the market allows.

So, maybe Republicans lining up against the unions is just
ideologically motivated. Democrats stand for the workers, Republicans
stand for the business owners. Maybe that`s all it is.

But there`s also this. In the 2010 election cycle, these were the
heavyweight outside spenders across the country. These were the 10 outside
groups that spent the most money in that election cycle. Most donated big
time to the Republican side. The Karl Rove American Crossroads group, the
U.S. Chamber of Commerce, the American Action Network, just loads of
outside money, much of it corporate funded that mostly favored Republican
candidates for office.

Six of the top 10 outside spending groups spent in favor of
Republicans. The only major spenders on the side of the Democrats that
year had one thing, they were all unions. That was it. And they only made
up three of the top ten spending groups.

So, strategically speaking, if you were able to get rid of the unions,
if you were able to take them out of the game by making union membership
almost impossible, you would essentially cripple the Democrat`s party
ability to the compete in the high stakes fundraising part of the electoral
process. Yes, it`s ideological. But it also has a very, very crude
partisan interest that in reality was crucial to understanding what
happened in 2010 in the state of Wisconsin. It was about Republicans
keeping control of that state for the long run if they could.

And what we`re seeing right now in the great state of Tennessee is
like the child`s treasury cardboard picture book of how to see this dynamic
at work in the starkest possible terms. Because in Chattanooga, Tennessee,
right now, there`s an union drive under way at an auto plant, out of
Volkswagen plant. And practically every elected Republican in the state of
Tennessee is doing black flips right now to try to stop that plant from
unionizing, to convince people who work at that plant to not vote for the
union.

But the Republicans are not making that case on behalf of the factory
owner, on behalf of Volkswagen, because Volkswagen kind of wants the union.
They`re in favor of it, basically.

Yesterday, on the first day of that Volkswagen plant`s three-day
election on whether to unionize, Republican U.S. Senator Bob Corker had a
message for the workers there. He said hey, if you guys don`t go for the
union, I`ve been told there will be another car for you to build here at
this plant. Meaning, if you do vote for the union, this plant might not
get any more work from Volkswagen.

Senator Corker said that and then the company Volkswagen had to come
out afterwards and say hey, actually, that`s not true at all. And we`re in
a position to know because we`re the company. He has no idea what he`s
talking about.

Bob Corker, though, stands by it. Whatever you guys say, don`t
unionize.

This is sort of the full flowering of this issue on the right.
Volkswagen wants the union. It`s Republicans who don`t. Elected
Republicans are against union rights. They`re against workers organizing
to better their lives, even when being against those things puts them
against the businesses they claim to be defending, right?

What they`re really against is the prospect that might be more union
members in Tennessee who might pay union dues and those unions might then
support Democratic candidates.

This is partisan. Yes, it is business, but it is business as usual,
which in Tennessee and around the country means that it is partisan
politics.

That Volkswagen union election should wrap up tomorrow. We should get
the result soon thereafter. Nobody knows how it`s going to go, but the
Republicans apoplexy on this is 100 percent understandable in partisan
terms.

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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