updated 3/18/2014 12:00:41 PM ET 2014-03-18T16:00:41

THE RACHEL MADDOW SHOW
March 17, 2014

Guests: Michael McFaul, Sarah Bajc

RACHEL MADDOW, MSNBC HOST: Good evening, Chris. Thank you.

And thanks to you at home for joining us this next hour.

I want to tell you right upfront near that on the interview tonight,
which happening a little later on this hour, we`ve got a really big deal
guest, here for the interview. The Malaysian Airlines plane that went
missing had three American citizens onboard. Two of them were little kids,
toddlers. One of them is a 50-year-old IBM executive named Philip Wood.

Philip Wood is one of the people on that missing plane. And his
partner, his girlfriend is going to be joining us live this hour. That is
the interview tonight.

I want to make sure you know that`s coming up this hour. It`s a big
deal tonight that we get to speak to her. So, I hope you will be here for
that.

But we start tonight in Mayflower, Arkansas. It was almost a year
ago. It was last March 29th when this happened, when an ExxonMobil
pipeline burst under the ground in Mayflower, Arkansas.

Now, the people who lived in that town had no idea they were living
on top of an oil pipeline, but they were. And when it burst, it suddenly
became very, very, very clear how much of a mess they were in.

That massive spill caused Exxon to shut down the whole length of its
Pegasus pipeline which runs not just through Arkansas, it runs all the way
from Illinois, all the way down into the Gulf Coast, all the way down to
Texas.

That spill more than just shut down Mayflower, Arkansas. Exxon ended
up buying out some of the people who lived there in the spill zone. Just
buying their houses and tearing them down. And Exxon then embarked on and
paid for a solid year of dirty, toxic cleanup work in Mayflower, Arkansas.

Well, as of this weekend according to "The Arkansas Democrat
Gazette", ExxonMobil said they`re done, all taken care of. They had
completed the cleanup of contaminated soil stemming from the burst pipeline
last year.

It seems like part of the reason they want to declare it is over is
because they want to open their pipeline up again. They put in a formal
request to restart the 200 miles of that runs through Texas.

But, you know, it`s awkward for them. Texas is right next to
Arkansas. This is what Exxon did to Arkansas with that pipeline. You can
understand it`s a rather sensitive matter.

Even as ExxonMobil, though, is saying they are done with their
environmental cleanup in Arkansas, the company does admit there may be some
trailing ends in that town. The company saying now even though it would
like to wrap up what they`re doing, they`re planning to come around once
week or so to monitor whether there is still an oil sheen on what used to
be an awesome fishing lake nearby called Lake Conway. They`ll come by
wasn`t a week to see if there`s an oil sheen on that lake, and if so, they
promise to skim it off. They also say they will come by within 48 hours
after it rains to scoop more of the oil off the lake after it presumably
washes into the lake from the nearby soil and trees.

They`ve also promised to leave trails of boom around the water ways
in Mayflower, Arkansas. Ah, yes, boom. The oil industry`s most flaccid
and pivotal reminder of how they have invested basically nothing in
improving the technology to clean up oil spills even as they as an industry
have invested billions and billions and billions in learning how to drill
more oil.

Getting it out of the ground, no expense spared. Cleaning it up,
we`re still using technology we had in the `60s.

ExxonMobil in Mayflower, Arkansas, says they will leave some boom
laying around. They say they`ll leave it in the water and promise to come
by every three months to pick up that boom once it`s sullied with oil.
That`s their leaving plan. That`s what Mayflower, Arkansas, can expect
from ExxonMobil.

And, you know, maybe this is the industry standard when something
like this happens. Maybe this is the best that Exxon can do. But it is
hard not to expect more from the richest company in the history of
companies, from a company as massive and as powerful and as rich as Exxon.

Exxon holds the all-time record in the United States for quarterly
profits for a corporation. Ever. To achieve that record, they had to beat
out themselves since Exxon also held the previous record for the most
profitable corporation in any one quarter ever.

Last year, Exxon`s $45 billion profit, profit, $45 billion take home,
last year, Exxon`s $45 billion in profit ranked it number two on the
Fortune 500 list of the most profitable U.S. companies. So, that $45
billion profit last year represents a down year for Exxon.

Steve Cull`s really excellent book about Exxon which is called
"Private Empire" describes an empire that`s so big and so rich, that it`s
adopted an internal corporate philosophy that`s not just global in outlook.
It`s not just transnational. It`s basically post national.

Internally, the ExxonMobil ethos is governments come and go.
Countries come and go. But Exxon needs to think bigger than that because
Exxon will survive even when countries and governments don`t. Hence,
private empire.

You`ll never know from the way they`re treating little Mayflower,
Arkansas, right now. The way they are walking away from that disaster in
that little town, just leaving some boom behind they plan to check
quarterly.

But ExxonMobil is absolutely massive in corporate terms. They are
historically huge. But they are not the hugest. Last year, ExxonMobil was
surpassed as the world`s largest oil company by these guys, Rosneft.

Right before the Olympics, you might remember that Russian President
Vladimir Putin put on a show of letting dissidents and political prisoners
out of prison ahead of the Olympics? Remember that? He released two
imprisoned members of the band Pussy Riot who had been in prison two years.

The other really high-profile prisoner he released ahead of the
Olympics was this man, Mikhail Khodorkovsky. He was once Russia`s richest
man.

When he was still free, he decided to use his economic power to fund
and help lead an opposition effort against Vladimir Putin and his seemingly
permanent reign in Russia.

Well, the payback for that was that Vladimir Putin not only had him
jailed for over a decade before he released him just before the Olympics
and this pre-Olympics amnesty. But Putin and the Russian government also
seized the assets of Mr. Khodorkovsky`s company, seized the assets of Yukos
Oil. That`s the company that had made Mikhail Khodorkovsky so rich.

So, they jailed the guy, they took his company and they made the
assets of his company part of Rosneft. And it is by gobbling up other
companies and trading for other companies` assets that Rosneft is the
biggest now in the world. They have surpassed ExxonMobil to become the
largest oil company on the globe.

And if it is hard to imagine a company bigger than ExxonMobil,
imagine a new joint venture between the company that is even bigger than
ExxonMobil and ExxonMobil. The two largest oil companies in the world,
larger than anything ever before seen in the history of capitalism are now
doing a joint venture together.

They`re due to start drilling any moment now. Their first joint well
in the Arctic is tick, tick, tick, due to start this year, sometime soon.
This joint venture will have them building a natural gas export terminal in
Russia`s Far East. They`ll be drilling a new deep water well in the Black
Sea. They`ll be fracking shale fields in Siberia and they`re going to be
drilling oil in an area of the Arctic that is larger than size of Texas.

That deal between, basically between the mother of all oil companies
and the mother of the mother of all oil companies, that deal was signed at
Vladimir Putin`s house, literally at his vacation home in Sochi. That`s
where they signed the deal in 2011.

Last year, the CEO of Exxon, Rex Tillerson, he went to St. Petersburg
in Russia so Vladimir Putin could bestow upon him this medal. It`s called
the Order of Friendship. Russia has been giving out this medal since 1994.
Sometimes, they give it to Russian citizens, but more often, they give it
to foreigners who Russia sees as having made the world better for Russia,
essentially.

This medal as I said, has existed -- has existed since 1994. Before
that, it also existed under a different name. It was called the Order of
Friendship of Peoples, instead of just the Order of Friendship. Under the
Soviet Union, they called it the Order of Friendship of Peoples.

See they sort of kept the basic shape. Star with a little
circumstance circle inside it. Little stripy ribbon. They did drop the
hammer and sickle, though. On the new one, tweaked the name very slightly,
but it`s basically the same deal.

At the ExxonMobil Web site, the official bio for Rex Tillerson, the
Exxon CEO, lists proudly he`s been awarded the Order of Friendship by
Vladimir Putin, president of the Russian Federation.

Today, the European Union announced individual targeted sanctions
against 21 people in Russia and in Crimea who the E.U. says were
instrumental in trying to break Crimea off from the nation of Ukraine and
make it part of Russia instead.

Those 21 individuals will be banned from travel to any European Union
country and any assets they have in any European Union country as of today
are frozen.

That list is the product of negotiations by the various countries in
the European Union, all their foreign ministers had to agree.

But the United States also announced sanctions today because of U.S.
law, we do it differently. The decision on American sanctions in our case
was just made by President Obama. He didn`t have to consult with Congress
or anybody else. He could just make the decision as an executive action.

And in his executive action today the United States named seven
Russian officials and four Crimean officials, so 11 people altogether.
They`ll be subject to a visa ban from the United States, which means like
E.U. sanctions, these people on the U.S. list will not be allowed to travel
to the United States. Also an asset freeze. Any assets they have in the
United States as of today are frozen.

How serious is this as an economic move today? How tough are these
sanctions?

For what it`s worth, stock markets around the world went up today
upon the announcement of those sanctions. They went up especially in
Russia, which is not a sign anybody thinks Russia just got hurt or this is
any serious economic punishment.

On a sunny side, though, this does mean there`s plenty of room to
escalate sanctions, right? If the European Union and the United States
want to make the sanctions hurt more, if they really do want them to hurt
enough to dissuade Russia from the course it`s on in Crimea and Eastern
Ukraine, there`s a lot more they could do. They could add more people to
the list.

The European list is 21 people. American list is 11 people. There
are four people who are on both lists who are -- they overlap. They are
sanctioned by the European Union and the U.S.

So, those lists could expand. They could start to be more overlap
between the two lists which would make things harder for the people on
them.

It would not be unprecedented to extend the sanctions list by adding
not just those individuals or more individuals, but also their entire
families. That has been done before. Not only makes the sanctions wider
ranging. It also stops one of the easiest ways that people can use their
own family members to evade those personal sanctions.

President Obama also announced today that he signed an executive
order giving himself the authorization to sanction businesses.
Specifically, he mentioned people involved in the Russian arms trade.

It would sharply increase the bite of sanctions to essentially stop
the international economic activity of individual Russian businessmen and
businesswomen and Russian companies operating abroad.

In the years of ratcheting up sanctions against Iran, what ended up
being the most devastating escalation of those sanctions was when those
sanctions went after Iranian banks. They essentially cut off all Iranian
banks from doing any international transaction. That isolated Iran`s
economy from the world in a way that was absolutely crippling and it
happened almost immediately.

That`s not just any other kind of sanction. That`s kind of an
economic death blow. And that is, in theory, at least, on the menu of
choices for the Europeans and for the United States.

Those kind of things work best if you coordinate. I mean, they could
do that to Russian banks. It could take a lot of international
coordination. It would take a lot of diplomacy. It would take a lot of
determination, but it would basically in one blow backhand Russia about 40
years into the past in terms of its economy.

And then there`s also the matter of not just Russian companies and
Russian banks, but American companies and European companies. It is
illegal for U.S. companies to do business in Iran right now except in very
limited circumstances. As the U.S. and the world look at their menu of
options for trying to stuff Russia back in its box essentially, to stop
Russia from what looks like an expansionist march west toward NATO, should
it be legal for European countries, for American countries to keep doing
business inside Russia?

Companies like Boeing and Ford and Pepsi have huge stakes inside
Russia including lots of Americans working for those American companies
inside Russia. But you know what, nobody has anything like Exxon. If you
really wanted to make Vladimir Putin take notice, the thing you would
probably want to rattle first is that largest oil deal in the history of
oil deals which was literally signed in his living room. You want to get
to something he cares about? He cares about that.

Nobody expects an actual shooting war between the West and Russia
over their behavior right now. No matter how much Senator John McCain
might want one, nobody expects one.

But an economic war started today. The U.S. and the E.U. fired the
first economic shots today, and Russia is apparently firing back by saying
it, too, might sanction and freeze Russian assets for a number of U.S. and
European officials. There`s some reporting today that could happen
tomorrow. That Russia will announce its own sanctions against U.S.
officials.

How far and how fast is this war going to escalate? And ultimately,
how far can an economic war escalate before it eventually starts to get
very close to being a shooting war?

Joining us now is Michael McFaul. He`s a former U.S. ambassador to
Russia. He`s currently a professor of political science at Stanford
University.

Professor McFaul, thank you very much for being with us.

MICHAEL MCFAUL, FORMER U.S. AMBASSADOR TO RUSSIA: Sure. Thanks for
having me.

MADDOW: Let me ask you about the range of sanctions, range of
economic options I just laid out there. Do you think that is the actual
realm of what`s possible? Is that the menu of options that American and
European officials could consider?

MCFAUL: Yes. I think you laid it out quite eloquently, frankly. I
was wondering what I could add.

But to say a few things, I think you rightly said these were the
first shots, right? It`s clear to me that the Europeans and the Obama
administration are preparing for further sanctions should there be further
actions by President Putin.

It was clear as day that President Obama in signing this new
executive order was giving himself more authority to go after those not
just for their behavior related directly to Crimea, but to their standing.
That is to their position in the government and to their position in the
economy. And I think they`re holding those now, but if Russia does annex
Crimea and go forward with that, I think you`ll see further sanctions.

MADDOW: This may be a naive question, but it struck me today that
the ousted president of Ukraine, Viktor Yanukovych, was on the list. But
President Putin is not, although there are other high-ranking officials.
Why was that?

MCFAUL: I don`t know exactly. My guess is having participated in
previous sanctions debate when I used to work for the government, is that
the president wants to be able to meet with President Putin. He wants to
be able to deal with him in a direct way on a range of issues.

And therefore, there are certain categories of people that will not
appear on the list. However, you alluded to I think will be the critical
decision for the Europeans and the United States, which is do they go after
economic actors, individuals that run these large corporations?

Including Rosneft as you mentioned just earlier. That`s run by
somebody close to Vladimir Putin, Igor Sechin is his name. That would be a
dramatic move. That would be a very dramatic move to go after that joint
venture.

MADDOW: When American economic interests are involved, I talk about
Exxon as an American economic interest, I guess, in technical sense.
They`re headquartered in Irving, Texas. So, technically, they`re an
American company, although I think they think of themselves more as a
global entity.

What -- how does that manifest in the U.S. government? When
decisions are made for diplomatic or security or political reasons in terms
of our relations with other countries and potentially has an impact
economically on American businesses, how do they make themselves known?
How do they lobby on international issues like this? I`m just trying to
think what Exxon is doing right now, worrying over the prospect of
sanctions.

MCFAUL: Well, of course, I don`t know if the technical term is
lobbying, but I have no doubt that if they are reaching out to government
officials in the executive branch, in Congress.

I worked with ExxonMobil very closely as the U.S. ambassador to
Russia. I know all their people. In fact, I was just staying in the hotel
in Sochi with the presidential delegation and we happened to be in the same
hotel with Rosneft and ExxonMobil. So, we saw them at the bar just a
couple weeks ago.

They, of course, are making their argument. It`s clear what they`re
saying, that, look, yes, this is a problem, but don`t mess with the
American economy, don`t mess with the European economy. And that`s what
these sanctions will do.

So that`s their argument on one side. They have certain people that
will listen to that.

And on the other side, within the government, are people saying,
there has to be a real price for this outrageous behavior. I have no doubt
that that`s exactly the debate happening at the White House right now.

MADDOW: I tell you, one other thing I`ve read today and I`ve heard
today, people talking about this that makes no sense to me is the great
fear that Russia could strike back economically in a way that would hurt
the world as much as the world could help Russia. I mean, Russia is a big
country. It doesn`t have a giant economy when it comes to contrasting it
with, say, the United States or China or some major economies in the world.

It`s hard for me to imagine that in an economic war, there`s much
that Russia could do to us. It seems like most of the things they could do
would be to hurt the countries they`re hurting, with the kind of aggression
they`re showing on the ground. Is that naive?

MCFAUL: I think it`s basically right because there`s an inner
dependence there, right? If Russia, for instance, shuts off the gas to
Europe, that hurts the revenues of the Russian government. It`s a petro
state. Let`s be clear. They depend on that.

But there`s a difference between capacity and will, right? And if
you`re very motivated and you answer to nobody and you don`t answer to your
citizens, as President Putin doesn`t right now, he may be more motivated to
take the economic hits in this tit for tat escalation. That`s the
difference.

Whereas Western leaders have to listen to ExxonMobil, they have to
listen to their constituents. They have to listen to shareholders. They
have to listen to those whose pensions will be affected by economic
sanctions. And that is a more complicated game in a democratic political
system.

MADDOW: Former U.S. ambassador to Russia, Michael McFaul, thank you
very much for helping us understand this. It`s really invaluable to have
you here. Thanks.

MCFAUL: Thanks for having me.

MADDOW: All right. There remains mainly total mystery about the
missing Malaysian Airlines 777. A tiny bit of information today and a ton
of wild speculation.

Coming up, we`ve got the facts in evidence as distinguished from the
speculation, but also a distinguished guest tonight. An American woman in
Beijing whose loved one, whose boyfriend is missing on that airplane.
That`s the interview tonight and that`s coming up.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: Life being what it is, I do not say this often, but check
this guy out. His name is Kemp Burdette. Kemp Burdette, he`s a river
keeper, which means he watches out for the health of a river. In his case,
the health of the Cape Fear River in North Carolina.

On Thursday last week, Mr. Burdette traveled up a canal that runs
into the Cape Fear River. He traveled up that tributary, so he and his
friends could take samples of something that was seeping down into it. But
particularly interested in this orange stuff, whatever it is, leaving this
orange trace along the banks.

At the top of that canal, it connects to an old shutdown coal burning
power plant that belongs to Duke Energy. That plant went dark in 2012.
You can still see the leftovers from the coal that got burned there over
the decades.

The site has three ponds for the leftover coal ash which is filled
with toxins and heavy metals like arsenic. We asked Duke Energy today why
the water in the coal ash ponds is so weirdly teal blue. The spokesperson
said he did not know but had seen the sky blue color in lakes and rivers
sometimes. OK.

Last week, Kemp Burdette and crew of Cape Fear River keepers took an
old flat bottom metal boat for a ride on what they believe is a public
canal. They wanted to get a closer look at the coal ash ponds that are so
close to the river.

But as you can see, once they were out on the boat, the nice people
from Duke Energy and local sheriffs department came out to get a closer
look at the river keepers.

Watch this -- the guy in the blue jacket is Peter Harrison. He`s the
river keepers` attorney. The other guy in the discussion here, obviously,
is the law.

(BEGIN VIDEO CLIP)

OFFICER: What y`all got going on today?

PETER HARRISON: Just cruising.

OFFICER: Why when these gentlemen tell you not to go any further,
y`all keep going?

HARRISON: I thought we had the right to use the water.

OFFICER: You do, but what`s the point of going all the way up there?
Fishing or anything? Or --

HARRISON: We`re just looking around.

OFFICER: OK. Well, y`all have your IDs or anything on you?

HARRISON: Yes.

OFFICER: Just need to see those real quick.

HARRISON: Have we done something wrong?

OFFICER: No, I`m just checking your IDs, man, you all coming up.
This is all the power plant. This is all the power plant`s property.

HARRISON: Including the water that we`re boating on?

OFFICER: Pretty sure. I can get wildlife out here. They`ll scratch
you a ticket. I`m not going to scratch you a ticket for nothing. I`m
going to check your IDs and let you go ahead and go back down there and
tell you not to come back.

(END VIDEO CLIP)

MADDOW: Go on down there and do not come back.

When you are the river keepers and Duke Energy is the power company,
very often the power company wins. But not always.

Last week, the river keepers didn`t just take their John boats out on
the canal, they also flew over the coal ash ponds and from above, they took
these aerial photographs of the weirdly blue ponds filled with toxic ash.

And look what they found. What`s going on by that pickup truck down
there? The Cape Fear River keeper spotted Duke Energy pumping water out of
the bizarrely blue ponds with the toxic coal ash in them and into the canal
-- the canal that feeds into the Cape Fear River, which incidentally
supplies drinking water downstream.

They spotted Duke pumping water out of this pond and also out of the
next coal ash pond over, the next pond over.

They took these pictures Monday, a week ago today. Duke Energy
moving water directly from the coal ash ponds into the canal and into the
woods.

After they posted those pictures, the story got written up in "The
New York Times" and "The L.A. Times." This is national news now what`s
going on in North Carolina, ever since Duke Energy`s coal ash pond on the
Dan River in Eden, North Carolina, broke loose on Super Bowl Sunday and
coated the river bottom for 70 miles.

Having something like 40,000 tons of toxic sludge fouling the river
and threatening drinking water has a way of forcing an issue, not just in
that one place, but everywhere.

This weekend, Duke Energy told "The New York Times" the pumping at
the coal ash ponds along the Cape Fear River was just part of routine
maintenance. The company said they had notified state regulators last fall
they were doing it and it was a perfectly legal action.

State regulators said, no, that`s not how it went. State regulators
said they only learned of the pumping when they stumbled across it last
week as part of their statewide tour of coal ash pits after the Dan River
mega spill.

When we asked Duke Energy about it today, they told us this kind of
routine maintenance happens all over the state, all across North Carolina,
wherever they need to do it and wherever their permits allow for it.

The state plans to be out there inspecting the coal ash ponds again
tomorrow. They say they`re still investigating whether the pumping into
the canal was legal. They say it might have been legal. When they figure
it out, they will let the public know.

The public in North Carolina has learned a lot recently about these
30-odd coal ash ponds across their state. Scattered across 14 different
sites in North Carolina ever since the contents of the Dan River pond
washed away down that river.

First, "The Associated Press" reported the administration of Governor
Pat McCrory blocked environmental groups that were trying to sue Duke over
those coal ash ponds, so instead the state could work out a settlement with
the company. The settlement called for a minnow-sized fine and no promise
from Duke that they would ever actually clean up their pollution.

Pat McCrory spent nearly 30 years working at Duke before he became
governor. Last year in his first year in office, he fired, he cleared out
the state`s entire Environmental Management Board so he could stack that
board with members of his own choosing. Today, "The Associated Press"
further reported that that move set the stage for a change in state law
that let Duke Energy pollute larger areas around their coal ash pits
without having to clean them up. Thanks, Governor McCrory.

"The Associated Press" is not letting this story go. They are
staying on it. And I think their work and the work of other reporters
around North Carolina is having an effect.

The week after the "A.P.`s" expose about the state`s sweetheart deal
with the governor`s former boss, the week after that, the U.S. attorney`s
office in North Carolina opened a federal criminal investigation into the
state`s handling of coal ash. Federal prosecutors subpoenaed Duke Energy
and subpoenaed the McCrory administration, 18 separate staffers of the
McCrory administration`s environment agency.

Prosecutors specifically asking those staffers for details about
money or items of value they might have exchanged with Duke Energy. Well,
those subpoenas call for testimony, testimony, in-person testimony before a
federal criminal grand jury in Raleigh, North Carolina, starting tomorrow
at 9:00 a.m. and possibly continuing through Thursday of this week. That
testimony happens in closed court starting tomorrow morning.

North Carolina`s environmental agency tonight said they wouldn`t
confirm whether the hearing is still scheduled for tomorrow or how many
staffers they expect to testify. So what happens before that grand jury
could remain a mystery, or the details may keep spilling out, as they have
been with this story -- still on the front pages day after day after day.

Watch this space.

(COMMERCIAL BREAK)

MADDOW: There`s obviously been a lot of speculation on the
whereabouts of Malaysia Airlines Flight 370 in the days since its
disappearance. Lots of disproven leads, baseless theories, irresponsible
speculation, disputed reports from across the world.

But there is some data about what happened to that plane after it
took off, some data that we now know for sure. At least it seem like we
know it for sure.

And for some people who have a very personal connection to this
potential disaster, this new information is cause for hope. And that is
ahead tonight on a very special edition of the interview.

Please stay with us. This is a big deal.

(COMMERCIAL BREAK)

MADDOW: One rule of thumb that the rest of the world is learning
over the courses of what is now more than a week that Malaysian Airlines
Flight 370 has been missing is that if a Malaysian government official or a
specific aspect of the Malaysian government is breaking new news about the
missing plane, don`t be so sure about what they`re saying.

It`s not like anybody has been breaking all that much real new news
about the missing plane. There are still only a handful of verifiable
facts about the loss of that aircraft amid the sea of speculation. But the
Malaysian government has contradicted itself on so much now. They started
by contradicting themselves on when and whether the plane flew West,
dramatically off course after departing from its flight plan.

First, the government said that it had. Then it said that definitely
that did not happen. Then they said they didn`t know if that happened.
And now, a review of that data by officials from other countries, including
the United States seems to indicate that, yes, the plane did turn hard to
the west. Far off its original flight plan.

The Malaysian government has also contradicted itself now, about what
seemed this weekend to be crucial and damning information about the pilot
of the plane. The Malaysian defense minister said this weekend that after
one of the communication systems onboard the plane had been manually shut
off, the pilot thereafter made voice exact with air traffic controllers on
the ground and said, good night and never mentioned that there was a major
communication system onboard the plane that had been shut off.

That seemed damning because it would seem to indicate that the pilot
effectively deceived controllers about something important that was going
on onboard the plane.

Malaysian authorities coupled that revelation this weekend with an
announcement that the investigation into the missing plane was now being
handled as a criminal matter. As soon as that bombshell started to sink
in, though, the Malaysians were changing the story, again, clarifying that
actually there is no indication that a communication system had been shut
down onboard the plane before that last communication from the cockpit --
oh, and by the way, it might not have been the pilot anyway. It might have
been the co-pilot.

The Malaysians have also contradicted themselves about whether or not
the pilot and the co-pilot were being investigated after the plane went
missing. Malaysian officials had said initially that the pilot and co-
pilot`s homes were being searched. That was part of "The Wall Street
Journal" supposed scoop last week that it had to be walked back when it
turned out that engine maintenance data was not the source of reporting
that the plane had stayed aloft for a long time after its communications
stopped.

Malaysian authorities first said the pilot`s house and co-pilot`s
house in Kuala Lumpur were being searched by local authorities. Then,
though, the Malaysian government denied any such searches have taken place.
And now, today, the defense minister says, actually, of course, there have
been searches of those homes, those searches took place right after the
plane went missing.

You have to feel for anyone who the world is looking to for answers
right now and what is still an utterly unanswerable question of what
happened to that plane. But when it comes to dramatic announcements of new
leads and new lines of inquiry, when those announcements come from the
Malaysian government, basically the new rule of thumb we`ve all been
learning is not to get your hopes up about whatever it is they`re saying.

Yes, hope, but verify. Try to get multiple sources. Don`t be
surprised if what is announced as true right now is apologized for or just
flat-out denied tomorrow.

With all that said, the new data the Malaysian government is standing
by right now, and they say that other agencies including the American FAA
and NTSB who are basically the international gold standard for
investigating these things, the new data the Malaysian government is
standing by right now is that a commercial satellite that made minimal
contact with the plane was still making that minimal contact with the plane
past 8:00 in the morning on the day that it took off. The plane took off
at 12:41 a.m. They now say that somehow that plane was still evident to
that commercial satellite more than seven hours later.

Two transponders on the cockpit stopped transponding within 40
minutes or so of takeoff, but there was reportedly something about the
plane that was evident to a commercial satellite run by a company called
Inmarsat seven hours and 30 minutes after takeoff.

The plane was fueled for a planned flight to Beijing that was
supposed to be a roughly six-hour flight. If the plane was, in fact, aloft
for more than seven hours, did it run out of fuel? Could it have been
landed at that point somewhere in the world, light on fuel and with a
skilled pilot at the helm?

Our guest for the interview tonight is the partner, the longtime
girlfriend of the one adult American who was onboard that missing flight.
She says she believes the plane was not lost, but that it was brought down
deliberately. She says she does not believe it has crashed. She believes
there are survivors.

And she is here for the interview, next.

(COMMERCIAL BREAK)

MADDOW: The girlfriend of the one adult American onboard Malaysian
Airlines Flight 770 joins us live, next.

(COMMERCIAL BREAK)

MADDOW: Late this afternoon, we got new video related to the missing
Malaysia Airlines Flight 370. This is CCTV footage which I should say has
not been independently verified by NBC News.

What it appears to show, though, is the pilot and co-pilot of
Malaysian Airlines Flight 370 going through airport security right before
they boarded that plane. This, of course, is more than a week ago. And
honestly, as you can see from the footage, there is not new and useful
information in this video even if it does turn out to be what it seems to
be.

It`s notable only because it`s one of the only scraps of publicly
available information that has become available to us since the plane
disappeared.

After a long list of what we thought was going to be new information,
new leads that ended up being nothing. Where it was the supposed leads
about oil slicks that turned out not to be connected to the plane or the
supposed sightings of debris in the Gulf of Thailand. One of those turned
out to be logs tied together, another turned out to be the floating lid of
a large crate.

The Chinese government at one point released satellite images taking
near the plane`s intended flight path, showing something floating in the
South China Sea. Large pieces of what might be debris from a plane.

But then the Chinese government said that releasing those images was
a mistake. They shouldn`t have been released. They showed nothing related
to the plane.

After a long period of conflicting reports about it, we do now know
after all communications ceased from the cockpit of the plane, military
radar did detect the plane moving west far off its planned course.

And now, the authorities in Malaysia say, and they say it`s also
verified by the American FAA and the NTSB, they say that even though the
plane`s signaling systems were disabled, the plane was still communicating,
just a ping with no identifying information. The plane was still in
communication with a commercial satellite 7 1/2 hours after takeoff. The
last pulse or ping was sent at 8:11 a.m. and, no, they don`t know where the
plane was at that point.

And, yes, that is longer than the scheduled flight of the plane that
day. It was scheduled to land in Beijing about six hours after taking off
from Kuala Lumpur and apparently it was still aloft 7 1/2 hours after
takeoff. It was still aloft 7 1/2 hours later, somewhere.

There were three American citizens onboard Malaysia Airlines Flight
370. Two little kids. Two toddlers. And this man, 50-year-old IBM
executive Philip Wood.

His partner, Sarah Bajc, lives in Beijing. She teaches economics
there. Sarah Bajc says there is no reason to conclude, no reason to assume
that the plane necessarily crashed. That it is possible the plane has been
brought down and landed somewhere.

That even though that would mean something obviously went terribly
wrong, it should also mean there is no reason to give up hope.

Joining us now from Beijing for the interview is Sarah Bajc. Her
partner Philip Wood was a passenger on Flight 370.

Ms. Bajc, thank you very much for being willing to talk to us. Thank
you for being here.

SARAH BAJC, PARTNER OF PASSENGER OF MISSING PLANE: Rachel, thank you
for taking me on the show and for applying your factual and logical
reporting style to something that so many other news agencies are just
sensationalizing.

MADDOW: Thank you for saying that. And I think that`s an important
part of this.

I mean, for those of us just watching this story from afar, the
conflicting information, the disproven and in many cases very irresponsible
speculation -- I mean, it`s been hard to follow, hard to understand. I
can`t imagine how hard it has been to handle from your perspective with
your personal connection here trying to understand what may have happened
to Philip and to understand what may have happened to Philip and what you
need to know about the plane.

How have you been handling your own information about what happened?

BJAC: Well, it`s been an excruciating process, but the way to handle
it is to think first and let your heart guide your mind but to focus on
what could only possibly be true.

And as early as Sunday, just a day after the flight disappeared,
already amongst my group of friends, we were already talking about the fact
that a crash didn`t make any sense, that this clearly looked like an
abduction.

And, you know, without evidence of them doing something immediate and
visible with that very powerful tool of a big plane filled with people,
that they have to have a future purpose for it. You know, if they just
wanted to, you know, make a statement, they could have crashed it into the
Petronas Towers. That clearly could have been within their power.

But they didn`t do that. So I believe this is just one step in a
bigger plan. And sooner or later we`re going to learn what that is.

MADDOW: In terms of the way this has been approached not just with
the reporting but the way that governments in the region and also the
American government, governments around the world have tried to look for
it, have prioritized searching and resources toward trying to answer this
mystery.

Is there something -- given what you think may have happened, is
there something you wish was being done differently and the way governments
were responding to this and devoting resources to it?

BAJC: Well, I like to think that our government is a lot smarter
than it`s behaving right now. Same thing for China. Same thing for
Malaysia.

So, you know, I have to trust that we`re just being misled in this
cycle. You know, if there`s something else going on and if they are indeed
investigating that path, then the easiest way to keep us out of the way
would be to provide evidence or false evidence at least that would keep us
distracted so that they can be focused on the real problem.

MADDOW: There is immense international focus on this issue. I went
out of my way over the weekend, hoping that I was going to get a chance to
talk to you today to try to check this news out around the world to see if
this is just an American media story or if the world is riveted as
everybody in this country is. And it does seem to be a story of global
interest.

I have to ask if watching this from China, watching this from
Beijing, if there is a different narrative on the ground, a different
popular understanding where you are than what you`re seeing in the American
media.

BAJC: Well, I don`t really read the Chinese news. What`s the point?
It`s just all packaged messaging from the government anyway.

But if you talk to people on the ground and what they think, the only
access to real information that people here have is the international news
sources, which are often blocked. So within hours almost of this process
starting, so Saturday morning, already my Internet was crashing. I
couldn`t get through to anything.

You know, I had to go to great extents to get access to some
alternate more private Internet connection. I`m sure my phone is being
monitored.

You know, they`re trying to keep it quiet. And China has been taking
an almost incendiary approach with the way they`re managing their own
people, which I think is very damaging. It`s a very immature and
irresponsible approach.

The Chinese families are being whipped into a frenzy. It`s bordering
on violent behavior. And that`s not going to help anything.

What we need to do is find a way to be part of the solution, not to
be aggravating the situation because it`s just a giant distraction.

I`ve kept myself as separate from that as I can. I`ve refused to go
down to the counseling centers that they`ve got set up down in the city and
basically stayed holed up in my apartment. Fortunately, I work for an
international school with a very secure ground. And they`ve offered me
just amazing protection and privacy. So I can try to keep my attention
focused on seeing how I might be able to be part of helping the situation,
not hurting it.

MADDOW: Sarah Bajc, it is hard to imagine what you`re going through
both emotionally just -- and spiritually in terms of this lack of
information.

I really appreciate your willingness to talk to us tonight and I hope
if there`s at any point any time you would like to talk to us again that
you won`t hesitate to be in touch. We`d love to stay in touch with you
during this process.

BAJC: Great. Thank you, Rachel.

MADDOW: Thank you.

Sarah Bajc, her partner Philip Wood was a passenger on missing
Malaysia Airlines Flight 370. Obviously, we all of course continue to hope
for the safe return -- however unlikely the passengers and crew in this
unbelievable mystery.

We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: "At least we have explained the counter-narrative." That`s
a newly released text message from former port authority executive Bill
Baroni to New Jersey Governor Chris Christie`s campaign manager at the
time, Bill Stepien. That text message is in reference to Mr. Baroni
telling the New Jersey legislature that had some traffic study explained
why access lanes had been closed onto the George Washington Bridge. We now
know that was an untrue cover story.

This new exchange in these text messages comes from court filings by
the New Jersey legislature. They show Bill Stepien texting Bill Baroni the
day after his now proven to be false testimony.

He texts him, "Hey, great job yesterday. I know it`s not a fun topic
and not nearly as fun as beating up on Senator Frank Lautenberg," which is
a reference to a heated exchange Bill Baroni had with Frank Lautenberg in a
hearing in 2012 in the U.S. Senate.

But the text message continues, "But you did great, and I wanted to
thank you."

Mr. Baroni responds, "Thanks, William." William Stepien. "Loretta
and Wiz," meaning New Jersey Senator Loretta Weinberg and Assemblyman John
Wisniewski, "will keep up their nonsense but at least we will have
explained the counter-narrative." The counter-narrative, aka the cover
story.

So, Bill Stepien who`d been Chris Christie`s campaign manager tells
Bill Baroni great job about his cover story, and Bill Baroni celebrates
having sold the counter-narrative.

Also disclosed today are e-mails that show Bill Stepien, then in the
midst of running Chris Christie`s re-election campaign being made aware of
the infamous traffic problems in Fort Lee and Fort Lee`s mayor being upset
about it, the same week that the traffic problems were happening.
Contemporaneous to the lane closures, Bill Stepien was in on it.

Chris Christie`s campaign manager was being made aware of the
situation.

These new texts are part of the latest court filings for a superior
court judge in New Jersey to consider whether or not Bill Stepien and
Bridget Kelly have to comply with the committee`s subpoena or whether they
can still refuse to hand over documents to the legislature. A ruling is
expected on that matter at the end of this month, but almost daily new
revelations in the story are expected to continue basically every day in
the meantime.

Watch this space. We`ll keep you posted.

That does it for tonight. We`ll see you again tomorrow night.

Now, it`s time for "THE LAST WORD."

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

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