updated 3/24/2014 11:50:59 AM ET 2014-03-24T15:50:59

THE RACHEL MADDOW SHOW
March 21, 2014

Guests: John Stanton, Michael McFaul

RACHEL MADDOW, MSNBC ANCHOR: We begin tonight in an Arkansas office
building a little bit over a month ago. This is a press conference held by
a conservative political group in Arkansas. It`s not clear from the video
they posted online how many reporters showed up for this press conference,
you don`t see any reporters in the video, you don`t hear any questions from
any reporters. I have to tell you it may be that there were no reporters
there, or maybe that the reporters were crowded out of the camera`s view by
the large array of stunt groceries that the group used to style their set.
In theory, though, this is a press conference.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: First, I want to thank everyone for coming out today.
We`re announcing the launch of a new set of ads that we`re going to preview
in a couple of minutes. But we`re going to first preview the ad and then
we`ll have some remarks.

UNIDENTIFIED FEMALE: People don`t like political ads. I don`t like them
either. But health care isn`t about politics, it`s about people.

(END VIDEO CLIP)

MADDOW: Although this woman says that she does not like political ads, it
is likely that that is not true. Because it appears that she earns her
living being paid to act in political ads, so it would be weird if she
hated them. Stop thinking about politics, she says at the end of the ad,
she says stop thinking about politics, start thinking about people."
People like me who is a person who is paid to say this in a political ad.
That was a misstep by the people who made these ads.

I mean the way this whole soft focus direct to camera, low confrontation
empathetic female subject thing works in ads, is that it`s supposed to have
kind of an emotional appeal, you`re supposed to connect with the
authenticity of this woman`s personal story. So when you later hear that
actually this isn`t an authentic story, this is an actor trying to make you
feel in specific way. It not only hurts the effectiveness of ads like
this, it can actually boomerang on the people who are perceived to be
behind these ads.

That ad is the work of Americans for Prosperity, which is a group funded
and founded by the billionaire conservative Koch brothers, Charles and
David Koch. When you inherit an oil and chemical company from your dad,
you can afford to pay people to appear in ads.

And you can also afford lots of ads! The Koch brothers group has been
running versions of that same ad all around the country, months and months
and months before the midterm elections happen. You can see that same
empathetic actress in vain against Democratic candidates in Colorado, and
in Louisiana, and in New Hampshire and in Minnesota and in North Carolina,
and in Florida. And, of course, in Arkansas. Where polls show the
Democratic incumbent Senator Mark Pryor is running dead even with his
Republican challenger, Congressman Tom Cotton.

The Koch brothers are spending just enormous amounts of money on ads for
these midterm elections. They have spent $30 million already and we have
only just barely rounded St. Patrick`s Day. That - It should also be noted
that they also spent enormous amounts of money in the last election cycle
in 2012. The Koch Brothers network raised $400 million in 2012. They
raised so much money, it took until 2014 for reporters to count it all up.
The Koch brothers funded Americans for Prosperity alone, just that part of
the Koch Brothers network spent $122 million against Democrats in 2012.
And what did they get for it? Bupkiss (ph). Despite that unprecedentedly
huge pile of Koch bucks, spent on behalf of Republican candidates and
against Democrats, Republicans lost the White House again, Republicans lost
ground in Congress and Republicans failed to win back the Senate.

If the Koch brothers spent $400 million on the 2012 elections that was $400
million they might as well have poured into a trash bin and set on fire, a
really big trash bin. And these guys really can afford to spend $400
million on fire just to watch it burn. Just for the fun of it. They can
afford it. But I think it is unlikely that they like it. It is unlikely
that the Kochs actually enjoyed the outcome of their 2012 experience. The
Kochs went home from that election into a sort of dark night of the soul.
You may remember, they had to put off their beloved annual secret fund
raising retreat in the California desert. They launched a top to bottom
review to try to figure out what went wrong and how to fix it, so that the
next time they spent hundreds of millions of dollars, it would lead to them
winning and not losing.

Well, after that review, they came back with what they always had. Buckets
of money, buckets and buckets and buckets of money. That was the old
strategy, that`s the new strategy too. Check this out. "The Huffington
Post" yesterday attempted to chart spending by outside groups this year on
elections. Groups linked to the Kochs versus every group spending in the
support of Democrats.

Ready? This is the chart that came up with for the House. The green bar
on the left there is the Koch spending, the blue one, yes, the much smaller
blue bar is outside spending by all the groups supporting Democrats. "The
Huffington Post" also charted spending in key Senate races, nine contests
around the country. The Kochs lead in the spending part of the contest
almost across the board. And again, this is them versus everyone on the
other side. But the usual buckets and baskets and front loading bulldozers
full of money are not all that the Kochs have brought in their return to
politics for 2014, after losing so painfully the last time out. Money is
not all of politics and it`s not all that the Kochs have decided to buy
with their money this year. They`ve also popped the makings of an actual
ground game.

(BEGIN VIDEO CLIP)

UNIDENTIFIED PEOPLE: We are AFP!

(END VIDEO CLIP)

MADDOW: A remarkably well coordinated Americans for Prosperity watch party
in Arkansas. They put out a call for people to come down and watch this
year State of the Union address. Come watch with the Koch brothers-funded
Americans for Prosperity group. Sounds great, right? The people turned
out. We are AFP! That was in Arkansas where they have also been doing
fund banks and field offices, they have got people knocking on doors, they
have got ground game to follow up their huge ad war in that state.

The Kochs really can`t spend as much money as they want on commercials, and
also on organizers and watch parties and fancy booths in the local fairs
around the state. I mean they may get tired adding zero after zero after
zero after zero to all those checks. That`s basically the only constraint
for these guys, though, right? If two of the richest men in the world are
determined to funnel infinite amounts of cash into advertisements in
support of Republican candidates, and now they are going to add to that a
gold-plated fully stuffy, year round professional class ground game in the
states they most want to win, how does anyone fight that?

How are democrats going to respond? Over the past couple of weeks the
outlines of the Democratic response have at least started to become clear.
First, Democrats have decided on a strategy of naming the Koch brothers
funded ads as coming from the Koch brothers.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: First it was a D.C. actress pretending to be an
Alaskan, now ads attacking Mark Begich on a carbon tax have been called
false and not true. Who`s behind the attacks?

UNIDENTIFIED MALE: The Koch brothers.

UNIDENTIFIED MALE: The billionaire Koch brothers.

(END VIDEO CLIP)

MADDOW: That ad came from Democratic Senator Mark Begich in Alaska as part
of his run for reelection. We played that Begich ad when it first came out
because I think it is an unusually good Democratic ad. I don`t generally
think that Democrats are great at political ads. This is a great one. And
when we played this a couple of weeks ago, as an example of a good
Democratic ad, I wondered out loud, whether anybody else would get one of
these. Well, the answer, I can tell you now is that yes, other people are
getting ads like this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Take a closer look at those ads against Mark Udall.
This woman, she`s an actress, those behind the attacks, insurance companies
and out of state billionaires, spending a million supporting Cory Gardner.
Why? Gardner would add to Medicare`s guaranteed, leaving billions in
profits to insurance companies, but forcing seniors to pay $6,000 more a
year. The more we learn about Congressman Gardner, the more troubling it
is. Senate Majority PAC is responsible for the content of this
advertising.

(END VIDEO CLIP)

MADDOW: That ad is running in the Colorado Senate race. Right now, it`s
part of an ad buy from a group called the Senate Majority PAC. You`ve
heard that name at the end there. That`s an outside group that supports
Democratic candidates. And they have just started running those ads, in
essence naming and pointing out the out of state billionaires, the Koch
brothers. In Arkansas and in Colorado and Louisiana and Michigan and in
North Carolina. And yeah, compared to what the Kochs are spending, it is a
puny little ad buy, it`s $3 million spread across five states. The Koch
brothers lose that in the couch on a Good Friday match.

The Koch groups have spent ten times that much money already this year.
Already in the states there trying to flip - their states they are
targeting to try to flip the Senate. Still, though, it`s amazing, the
Kochs are deeply offended that the Democratic side is even trying to hit
back at what they`re doing. The Koch brothers` spokesperson told us today
that the ad buy, the Democratic ad buy naming the Koch brothers as the
finance years essentially behind the other ads, the brothers` spokesperson
told us today that this is part of a continued attempt to silence private
citizens who dare to disagree with the majority leader Harry Reid and the
current administration.

But Democrats do seem to think there is a real advantage for them in just
pointing out when that ad telling you that Obama care isn`t working is
brought to you by a couple of billionaires who themselves will never, ever,
ever have to worry about doctors` bills.

So the Democrats are putting $3 million into that effort and maybe it will
help Democratic candidates stay competitive in races that are otherwise
totally swamped by Koch money at this point in the race. Maybe. Even so,
that doesn`t solve the Democrats` biggest problem in 2014. Not at least
according to the top Democrat in the country who knows of what he speaks
when he speaks about elections. President Obama said this at a fundraiser
yesterday in Miami, according to remarks that were posted by the White
House. He said this. "The problem is not that the American people
disagree with us on the issues, the challenge is that our politics in
Washington have become so toxic that people just lose faith and finally
they just say, you know what - I`m not interested, I`m not going to bother,
I`m not going to vote." And he says that is especially true during the
midterms. The president went on to say, "during presidential elections,
young people vote, women are more likely to vote, blacks, Hispanics are
more likely to vote. And suddenly a more representative cross section of
America gets out there. And we do pretty well in presidential elections.
But - the president says - "In the midterms we get clobbered."

That`s President Obama speaking yesterday in Florida at a closed press
event to raise money for congressional elections this year, but also to
make that bigger point about turnout, specifically that fact that in
midterm elections, voters who help Democrats win presidential elections do
tend to stay home when it`s just the midterms. Key Democratic
constituencies who wouldn`t skip a presidential election for anything, do
tend to go missing when it comes time to just pick members of Congress,
members of the Senate and a whole lot of state officials. Key Democratic
voters go missing in the off-year elections by the tens of millions.

And in the emerging picture about how Democrats are planning and trying and
hoping to blunt the Koch brothers enormous spending advantage, it`s
turnout, it`s good old-fashioned voter turnout where they`re trying to
direct their efforts. Yeah, they`re going to try to match them ad for ad
where they can, but you know what - they can`t. What they are trying to
do, what the Democrats are trying to hang on to their majority in the
Senate with, is a turnout gain. They`ve launched at the DSCC, the
Democrats Senate Campaign Committee, something called the Bannock Street
Project. They are planning on spending $60 million trying to find and
motivate every last possible Democratic voter who could possibly be
persuaded to head to the polls in November.

This isn`t just ads and stuff, this is the expensive and difficult daily
work, they`re planning on 4,000 staffers - churning away in ten states in a
long term way. But in an election year like this one, where there is not a
president to pick, this may be the Democrats` best chance. It may be their
only chance, but it is what they`re trying to do. What Democrats have to
turn around in order to save their Senate majority and at least not get
clobbered in the House, is exactly what President Obama is saying, they
have to reverse this structural dynamics of voter turnout, which are in
play before anyone ever spends a dime on the campaign ad. And those
dynamics would still be in play where there are suddenly no campaign ads at
all.

Yes, at base level, it is a dollar for dollar contest, but Democrats are
trying to do a qualitatively different thing than the Republicans are right
now. Republicans are trying to excite their voters who are most likely to
turn out. Where the Democratic numbers matter the most are not the ones
that come paying for TV ads. They are the ones that tell you how many of
your voters showed up because you knocked on their door at the right time
and got them to the polls. Joining us now is John Stanton, Washington
bureau chief for BuzzFeed. Mr. Stanton, thank you for being here.

JOHN STANTON, BUZZFEED DC BUREAU CHIEF: It`s good to be here.

MADDOW: They can`t match them ad for ad, that`s never going to happen?

STANTON: No no, that`s not possible.

MADDOW: Do the Democrats conceivably have a smart enough idea and a well-
financed enough idea about turnout that they can mitigate some of the --
mitigate some of the problem caused for them in terms of the differential
their facing in the ad words?

STANTON: They do. I think they are doing two things right now that I
think are smart on the message side. They`re talking a lot about income
equality and trying to do - deal with that, which is I think helping to
motivate some young voters and some women voters. And some of these -
they`re attacking the Koch brothers. If they can make them the boogie men,
that could certainly help them. But I think unless they can tap into the
Obama campaign`s ground game, and how they were able to pull people out,
where they were able to go into, for instance, black barbershops and they
had the barbers become captains. And they made sure that that one guy that
didn`t vote in 2008, he came out and vote in the 2012. If they can find
the way to do that, then they could have a fighting chance. But right now,
the way things are, it`s going to be very difficult for them to maintain
the size of their majority and it`s going to be a tough fight to keep it at
all.

MADDOW: In terms of who`s working on this stuff, you see the Republicans
really starting - because the Republicans I think know they`re going to
have a good year, or they think they are, they`re really starting to crow
about - Reince Priebus and what he`s put in place, and what the NRCC has
put in place and you add to that what we know the Koch brothers have paid
for, which is a very expensive organization that`s been around for months
already, they feel both confident and have to be bragging about that. So,
we are getting sort of a window into who is doing that work on the
Republican side? On the Democratic side, is it the smart kids who are
working on this stuff? Or is it the leftover folks who didn`t get in on
the presidential year?

STANTON: No, I think they`ve got some very smart people over there. You
know, there`s been some concern that a lot of the Obama folks are - like
Jim Messina shop, for instance, started to pivot toward 2016 and are
looking at Hillary and are not really playing very hard then. And Hillary
and her people, I think, are a little concerned about this motion. But it
doesn`t look like they`re really throwing their weight, frankly, into 2014.
And so, there is a smaller bench, no doubt about it. But they do have some
very, very smart people over there. And, you know, again, this is pretty
early story. So things could change dramatically. I think, you know, if
they get away from some of the foreign policy issues, they get back to the
domestic, they could sort of climb back about this a little bit.

MADDOW: It is interesting, for President Obama to be making this tactics
case, he keeps going to these Democratic fundraisers and these sort of
friendly audiences and kind of giving people a hard time and saying, you
know what? We`re going to get killed here, and 2014 is going to be
terrible for us, everything is stacked against us, unless we wake up. He`s
using really blunt language. He`s kind of giving it to Democratic donors
and saying you`re not doing this right. Does he -- I haven`t seen him do
that before, except in the - campaigning for himself. Is it likely to make
a difference? Are you saying it resonate in Washington with the kind of
people who have to get off their wallets to make it work?

STANTON: A bit. So, I think - you know, the (INAUDIBLE) see in the House,
and the DSCC have done very well with their fundraising. I think this is
about him, though. He doesn`t just care about keeping the Senate and
trying to take the House. He cares about those things because he`s got two
years left in power.

MADDOW: Right.

STANTON: And he understand that if he goes into those last two years and
he has a Republican Senate and a Republican House, he`s done, essentially.
And even if he has a very narrow Senate control, he probably can`t get
anything serious passed. And this is -- he now is very much motivated by
self-interest, frankly, and that is when he`s at his best in putting the
screws to some of the money people.

MADDOW: If Democrats cannot figure out a way to run a national campaign
against the John Boehner Congress, I would like to make the John Boehner
Congress a problem for every Republican congressman in the country, then
they, well, then they`ll be Democrats.

(LAUGHTER)

MADDOW: John Stanton, BuzzFeed`s Washington bureau chief. John, thanks
for being here.

STANTON: It`s good to be here.

All right, coming up, an unusually blunt one word answer today in
Washington. Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is the Ukraine crisis prompting a fundamental
reassessment of U.S. Russia relations?

SUSANE RICE: Yes.

(LAUGHTER)

(END VIDEO CLIP)

MADDOW: The duh was implicit. A big fight just got bigger and that story
is ahead. Stay with us.

(COMMERCIAL BREAK)

MADDOW: On Friday March 1, 2002, a 20-year old man and his girlfriend were
driving home from the mall in Glen Burnie, Maryland in her red Pontiac. He
was wearing a white cap, she was driving. A group of men in unmarked car
reportedly pulled up to the Pontiac and waved for the couple to pull over.
They didn`t have sirens on, they didn`t show I.D. of any kind. Just pull
over.

So, the couple pulled over. The men that stopped them were not worrying
uniforms of any kind, they were carrying M-4 assault rifles. They ordered
the couple out of the car and the man, Joseph Schultz reportedly reached to
unlock the door. A man, one the men with an M4 rifle, opened fire on him.
Joseph Schultz was shot twice in the face. The men with the guns and no
I.D.s and no identifying insignia, turned out to be the FBI. They have
been looking for a bank robber that day, one who was reportedly wearing a
white cap and traveling in a red car with a female driver. The robber was
not Joseph Schultz, but Joseph Schultz got shot anyway. While reaching to
unlock a car door that a screaming FBI agent had told him to unlock.

What happens when FBI agent shoots somebody is that the only entity that
really investigates what happened is almost always then the FBI itself. A
few months ago, "The New York Times" used the Freedom of Information Act to
pry loose from the bureau these are records. They are records on 70 people
who FBI agents have shot and killed over a 20-year period, from 1993,
roughly to 2011. FBI agents shot and killed 70 people in that time period,
and shot and wounded 80 people. So, 150 FBI shootings altogether. In
every one of those instances, the shooting was reviewed by the FBI itself
internally, and in every one of those instances, in all 150 of those
shootings, the FBI determined that the shooting was justified. They`re 150
for 150.

But when this white hat FBI shooting happened in Maryland, the public was
understandably outraged. And once in a while, public outrage does for
someone else to act. In the Joseph Schultz case, the county police
launched their own independent reports, excuse me into the matter, raising
a number of subtle but important differences surrounding the details of the
case. Joseph Schultz sued and five years later he was awarded $1.3 million
for being wrongly shot in the face while he was doing nothing wrong. Part
of that deal is that the government admitted no wrong doing in the
shooting. 150 shootings, zero admission of wrong doing.

Last May, this young man, Ibragim Todashev, was shot and killed in his
apartment in Orlando, Florida while being interviewed by FBI agents and
Massachusetts state troopers. At first it seemed like kind of a local
story, something weird had happened in Florida with a guy who had
connections to crime in Massachusetts. Then it seemed like, maybe, a
sidebar story to the Boston bombings when we learned that the man who had
been shot was friends with the older suspect in the bombings, Tamerlan
Tsarnaev - But then there came leaks to the press about the shooting.
Presumably from law enforcement, there hadn`t been any other witnesses, but
there was a leak saying that Ibragim Todashev had lunged at agents with a
knife. Another leak said that it had just been a blade of some kind,
another leak said, forget the knife and the blade. Actually, it was a
broom stick. Or, actually - nix that - another leak said it was a
ceremonial sword or actually another leak - excuse me, another leak said
Todashev overturned a table and threw a chair. That was why Ibragim
Todashev got killed. Oh, and by the way, there`s one more leak, Todashev
was a confessed murderer. He was just about to write down his confession
to a triple murder in Waltham, Massachusetts before he went crazy and he
had to be put down. The leaks contradicted themselves. But they were all
exculpatory for the people who shot Ibragim Todashev. He attacked first.
He was a murderer.

Almost a year later now, though, we still know next to nothing official.
We have no official evidence or testimony about what happened in that
shooting. No official explanation, even the autopsy report is still being
blocked from public release by the FBI. The only reason we know Ibragim
Todashev was shot seven times, including once in the back of the head is
because his friend took photos of his body at the morgue when he was called
in to identify the body. That friend has now been barred from re-entering
the United States after having left the country to go to Todashev`s
funeral. Those unsanctioned and less than official true details, right?
And utter lack of any transparency from the FBI have led to some public
outrage in this case and some media attention. Reporters and editorial
pages in the Boston press have been sharply critical of federal
authorities, along with the ACLU, the Council on American Islamic Relations
and Ibragim Todashev`s family in Russia. They have all called for an
independent investigation. Local authorities claimed that they had no
jurisdiction either in Florida where the shooting happened or in
Massachusetts. That`s why it was a really big deal in August when the
state attorney in Florida, a state attorney in Florida named Jeffrey Ashton
announced that his office was going to conduct its own independent
investigation into the killing of Ibragim Todashev. This is a state level
prosecutor in Florida.

Unlike the 2002 case of Joseph Schultz and his girlfriend, there were no
witnesses outside of the FBI agents and Massachusetts state troopers who
were in the room, who were interviewing Ibragim Todashev when he was
killed. They claimed that he was going to confess to a triple murder. But
we haven`t seen any sort of written confession, we haven`t seen any
recording of the interview, we not heard or seen any reliable account of
what happened from anything other than anonymous sources that always seem
to say that the agents did nothing wrong.

So the Florida state attorney`s report is going to be hugely important
here. It may be the only independent information we ever get on this. We
have been waiting for that report since August. Late last month it was
announced that the investigation results would be completed by the end of
this month. It was believed that Tuesday would be the big day, next
Tuesday. And then today, oh, law enforcement leak, another big leak in the
story, and wouldn`t you know it, a big self-exculpatory leak for law
enforcement in this case. Law enforcement officials, unnamed, of course,
leaking that not only will the Department of Justice not charge anyone in
the FBI, in connection to the shooting of Ibragim Todashev, that the
shooting has been ruled at the federal level justified that the FBI needed
to use deadly force that day. We`re also being told, again, by anonymous
sources that that investigation by the independent source in Florida, by
the state prosecutor of Florida, that one we were expecting to not hear
anything about until next Tuesday, we`re also being told by exculpatory
anonymous sources that that investigation, too, will also clear the FBI.

We reached out to the Florida State Attorney`s office today to ask about
these leaks, because these leaks purport to say what`s going to be in that
official report that`s released on Tuesday. We asked, did those leaks come
from investigators in Florida? Is what those anonymous leakers saying
true? Is the FBI absolutely in the clear here? And the state prosecutor
in Florida actually told us no. Sources inside the office investigating
the Todashev shooting, at state prosecutor`s office, say that they have not
even made a determination yet about whether to charge anyone in the
Todashev killing. They say, "the release of purported information is
inaccurate and unfair to Mr. Todashev`s surviving family and the police
officers involved in the incident and their families. So a mysterious,
messed up and completely opaque incident of lethal force got weirder today.
Might today`s anonymous leaks wind up being true? Will authorities in
Florida find the FBI`s use of force was justified here? We don`t know that
yet. We`re going to know next week, when an actual independent report on
the use of lethal force against Todashev is officially made public. But we
do not yet now the answer to that question.

(COMMERCIAL BREAK)

MADDOW: Here`s the latest news on the missing plane, Malaysian Airlines
Flight 370. There is no news on the missing plane. Today is day 14 of the
search, there are no developments to report, other than another day has
gone by without more news. That`s it. We will let you know if that
changes, but we will not try to turn the lack of news in this very sad
story into something that sounds like news when it isn`t, and we`ll be
right back.

(COMMERCIAL BREAK)

MADDOW: The biggest stock exchange in the world is here in New York. The
value of the New York Stock Exchange is over $13 trillion, trillion with a
t. Hundreds of billions of dollars are traded every single day in this
city, which also happens to be home to the second largest exchange on the
planet, which is the Nasdaq. When you are talking about big money, global
trading, you have the two exchanges in New York City, you have the Tokyo
exchange in Japan, you have the FTSE exchange in London. Europe`s exchange
is called Euronext. Those are the big name stock exchanges, but the big
ones are not the only ones. This is MICEX, the Russian stock exchange
which operates out of Moscow. I think I`m saying that right. The MICEX is
worth about $750 billion, as opposed to $13 trillion traded in New York.
But the MICEX is the main stock market in Russia.

And today it cratered. It lost nearly 3 percent of its entire value today.
What happened in Russia today, the equivalent of that happening here would
be if the Dow dropped 500 points in a day. The reason the Russian stock
exchange cratered today is apparently because of sanctions, the wrench
that`s now being tightened around Russia`s economy by the United States and
Europe.

Yesterday, President Obama announced the third escalation of sanctions
against Russia. He released a list of government officials and individuals
connected to top Russian officials. In making that announcement, President
Obama said he was also prepared to escalate sanctions even further to
include whole sectors of the Russian economy. It now appears that those
sanctions and the threat of new sanctions are having at least some of their
intended effect. "The Wall Street Journal" today reporting that Russia`s
blue chip stocks, the ones that are always supposed to perform pretty well,
they saw the sharpest declines today because many of those companies are
associated with people newly added to the sanctions list.

In addition to adding a handful of politically connected Russian
zillionaries to the sanctions list yesterday, President Obama also made the
unilateral decision to cut off one Russian bank, which is considered to be
the bank of the Russian`s elite. It`s owned in large part by a businessman
who is often described in the West as Vladimir Putin`s personal banker.
Yesterday, that private bank was immediately starved of access to the
global currency that is American dollars, and today the American credit
card companies Visa and MasterCard announced that they would immediately
stop servicing the bank.

Russian President Vladimir Putin referenced that on the day his government
formally annexed Crimea. President Putin made sure he was quoted saying he
was going to immediately open a new bank account at the blacklisted bank,
he said he would have his presidential salary sent there. It was a little
unexpected though, when at the same time Vladimir Putin was publicly trying
to laugh off this new round of sanctions, his own finance minister was
telling a group of journalists today that the sanctions are already taking
a toll on the Russian economy. The finance minister said today that Russia
will likely have to cancel plans to borrow funds abroad. And as both the
S&P and Fitch ratings agencies moved to downgrade Russia`s credit rating
today, from stable to negative, the finance minister acknowledged that it`s
clear that the prices of our bonds could rise, and that, in addition to
curtailing their foreign borrowing, they might have to cut back on the
domestic version of it, too. The Russian ruble is already down 10 percent
against the dollar this year, meaning that rubles buy 10 percent less than
they used to. That phenomenon is considered likely to get worse.

But even before today`s big drop in the stock market, Russian stocks on
average were all down 10 percent before today, since the day that Putin
declared that Russia had the right to invade the Ukraine.

Most of the sanctions against Russia have come thus far from the United
States, from executive orders signed by President Obama. The U.S. has
sanctioned 31 people plus that one bank so far. With the expectation that
there is more to come. In addition to the U.S. sanctions, though, before
today, the European Union had sanctioned 21 people, but then today they
added more, and they did in a very cloak-and-dagger way. The thing about
sanctions is they are evadable if you know they`re coming. Right? If you
have money in accounts overseas or otherwise stashed overseas somehow, you
can transfer those assets home if you hear you`re about to get sanctioned.
If you have money in a bank that`s likely to be frozen or compromised, if
you hear that`s about to happen, you take your money out of that bank. You
just withdraw it or you move it somewhere else. If you know sanctions are
coming, they might not hurt.

So the Europeans today took sort of extraordinary measures to keep the new
sanctions secret until the very last moment. At the meeting where they
decided the 12 names they were going to add to the list of sanctioned
Russians today, it was only national leaders allowed in the room. No
aides, no staffers, there was no wi-fi in the room and no cell phone
service in the room. The idea was to keep the list totally secret until
financial institutions could act on the list. So the people on the list
wouldn`t have any chance to move their money out of the way before it was
too late.

European leaders also said today they were formulating a plan to quote,
wean themselves off of Russian oil and gas, hoping to have a plan
formulated by mid-year to buy energy from non-Russian sources. The energy
sector of course is Russia`s biggest economic driver, and cutting off
energy sales would potentially land the hardest blow against that country.

There have never been sanctions like this on Russia since the end of the
Cold War. George W. Bush didn`t do anything like this when Russia invaded
Georgia for example while he was president. What`s being done against
Russia is unprecedented, and it seems like it`s going to keep going,
potentially much further and much more strict. If it`s going to be the
weapon here, if it`s not going to be a military war, it`s going to be an
economic war. How do we expect Russia to react, given today`s fresh
evidence that even as they try to laugh off the sanctions, they`re already
beginning to have their intended effect? Joining us now is Michael McFaul.
He was the U.S. ambassador to Russia until last month. He`s currently a
professor of political science at Stanford University. Professor McFaul,
thank you for being with us.

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

MADDOW: So President Obama announces two rounds of sanctions, is
threatening a third. Is what he`s doing scalable in a way that we should
understand that there`s more to come and that we should have expected the
kind of economic response that we saw today in Russia?

MCFAUL: Well, first, I want to underscore something you just said about
how unprecedented this is. This kind of sanctions, this targeted sanctions
against individuals and now one bank is not something we even did during
the Cold War. This is quite unprecedented. It`s a new instrument of
foreign policy, practiced by the Obama administration when I was there
against Iran, and now you`re seeing it with targeted individuals with
Russia, and you`re seeing the results that you described.

What the president made clear, I think, in his statement the other day when
he announced this is what you see today is the punishment for annexation.
It doesn`t mean he thinks Putin is going to leave Crimea, he doesn`t think
it will change Putin`s calculus, but President Obama said there would be
punishment if this happened. That was the punishment. The new executive
order that he signed that you referred to, that he can go after sectors of
the economy, that is meant as a deterrent to President Putin from going
into eastern Ukraine. I thought President Obama made that very clear, that
if there is more escalation of violence, then he will go in that direction.

MADDOW: Does that mean, just to be clear, that the punishment phase of
this is over, that absent further Russian aggression, further Russian
action, the U.S. won`t do anything else?

MCFAUL: I`m not sure. I do not know that. I know that from my previous
time in government, putting together these lists, you have to make a case,
you have to do due diligence, and I wouldn`t be surprised if there would be
more names with respect to the punishment phase. I don`t know for sure.

MADDOW: How would you expect Russia to react? President Putin publicly is
making noises about not wanting further retaliation. I don`t tend to
believe anything he says in public, and also their past behavior suggests
that they don`t just sort of mirror western actions, they tend to react
more strongly to anything we do rather than trying to have sort of an equal
and opposite reaction. What do you think he`s going to do?

MCFAUL: There`s Putin reacting to the threat of sanctions and there`s a
lot of other Russians reacting to the sanctions that are already there. I
think we need to think about both of those different groups.

With respect to Putin, I listened closely to his speech earlier today. I`m
ready to believe that he does not have a plan to invade eastern Ukraine,
but I also don`t think he had a plan to invade Crimea. What happened was,
there was a crisis, there was an event that triggered that, that was the
fall of the government in Kiev, and so he lashed out in a tactic going into
a Crimea. And that`s what I fear the most, that if there`s violence in
eastern Ukraine, Ukrainian young guys with guns going after Russians or
Russian young guys with guns going after Ukrainians. I don`t know how it
will be. It will probably be guys, by the way, probably won`t be gals, but
if that happens and its escalates, and there`s fighting and an action-
reaction process, then Putin will be tempted to act, because he said, I`m
going to protect Russian citizens, Russians, not Russian citizens, Russians
living abroad. That`s the scenario that scares me the most.

MADDOW: When the national security advisor, Susan Rice, today was asked
the Russian military exercises that are supposedly planned right now quite
near the border between eastern Ukraine and Russia, she essentially
scoffed, she didn`t literally scoffed but she essentially did, and said we
don`t think those are just military exercises. Essentially being skeptical
that that`s going on there, that that may be cover for a planned invasion.
Is that justified skepticism?

MCFAUL: Absolutely, it is justified skepticism, because we saw earlier
things on the eve of Crimea. Moreover, these are tactics of coercion,
these are tactics of threats. The Russians still want to destabilize
Ukraine, of course, that`s part of their objective right now. And this is
part of their strategy.

MADDOW: Michael McFaul, former U.S. ambassador to Russia, thank you very
much for being with us tonight, sir. Nice to have you here.

MCFAUL: Thanks for having me.

MADDOW: All right, we`ll be right back, stay with us.

(COMMERCIAL BREAK)

MADDOW: The guy who invented protesting military funerals because he hated
gay people is no longer among us. And you`ll be surprised to know that
there is greatness in his legacy. Seriously, I swear. This will make you
happy, it`s coming up right at the end of the show with us. Stay with us.

(COMMERCIAL BREAK)

MADDOW: With very few exceptions, we do not no obituaries on this show.
And we`re not going to do one here tonight. One of the ways you can tell
that what I`m about to do is not an obituary for the head of the Westboro
Baptist Church in Kansas who died this week, one of the ways you can tell
it`s not an obituary is that there`s nothing in this story that will
require me to say his name. So I`m not going to say it.

But the Westboro Baptist Church became an object of national fascination
and revulsion when the man who was basically the cult leader for this
extended family, pseudo-religious compound in Kansas decided in about 1991
that the way he should spread his particular version of the gospel was by
trying very hard to upset people. By trolling the country, essentially.

They first showed up with their big taunting, cursing, profane signs at the
funerals of people who had died of AIDS. They also picketed the funerals
of anyone gay who had died for any reason, including picketing the funerals
of people who had been murdered for being gay. And their message was very
simple -- they just hated gay people. They cited biblical justification
for hating gay people. They wished all gay people were dead. They thought
anybody who didn`t hate gay people as much as they did were essentially
aiding and abetting the terrible moral crime of homosexuality and was
equally damnable because of it.

And that reasoning, inside that fevered cult mindset, led inexorably to the
strategy that made the Westboro cult famous outside of just the gay
community. In their quest to both demonstrate their own depth of hatred
for gay people, and to try to make the whole country that way, they started
trolling the whole country, not just the gay community. Their public
demonstration strategy moved on from directly going after gay people to
picketing funerals and picketing other events that celebrated anyone who
was a beloved American. They picketed the funeral of Bill Clinton`s
mother. They picketed the funeral of Al Gore`s dad. They picketed the
funeral of coal miners killed in a mining accident. They picketed the
funeral of Jerry Falwell, because Jerry freaking Falwell wasn`t anti-gay
enough for them. In their cult logic, there`s nothing to celebrate about
America as a nation as long as America tolerates the existence of openly
gay people.

That`s why they started targeting the funeral of soldiers. To say there`s
no such thing as an American hero as long as America is a place that
doesn`t stone gay people to death. They said thank God for the IED`s that
kill American soldiers. We pray for more American soldiers to die, since
that is God`s way of showing his disapproval of a country that doesn`t hate
gay people enough. That has been their reasoning. All along, for years.

And now that the founder of the cult, who, not incidentally, is also the
biological father of a lot of people in the cult, now that he has died, it
will be interesting to see if his 13 children and 54 grandchildren and his
growing covey of great grandchildren evolve in their strategy, too, or
whether the Westboro Baptist Church cult is going to wither away.

And you know what? Honestly, on one level, who cares. It`s like caring
about whether or not World Net Daily is going to do another "where`s the
birth certificate" book or whether or not Glenn Beck is going to tell
people that he`s found more signs of the antichrist in Wisconsin, or
whether or not Donald Trump really means it this time when he says he`s
going to have run for president. Who cares, right, who cares? Make money
however you want to make money, make a ruckus. We`re a free freaking
country. Free enough for all of you.

But there is something important, I think, and worth noting tonight about
the Westboro cult now that its founder has died. And that is that the
Westboro cult has over these past 20 years been an American inspiration.
Seriously. As they have tried to hurt people`s feelings to demonstrate
their own depth of piety and their own depth of feeling by their
willingness to wilfully hurt even the grieving families of the dead at the
funerals of their loved ones, they know that they`re being offensive,
right? That`s on purpose. They want to shock casually anti-gay religious
people in this country into hardening their beliefs. Stop being such
squishes, right? Stop tolerating an American culture that lets gay people
live and recognizes their rights. That`s what they were trying to do.

But instead, increasingly over the years, people rose up against them to
try to stop, or at least interfere with the hurt that they were trying to
cause in order to demonstrate their point. I think it probably started
with the Angels Wings folks, the people who built those huge architectural
angels wings for themselves hung with white sheets to protect the family of
Matthew Shepherd when the Westboro cult picketed his funeral in 1998. The
wings just blocked the view of those protesters. When the Westboro people
started picketing soldiers` funerals, the Patriot Guard on motorcycles
formed a loud, massive, flag-carrying human buffer between the Westboro
people and the military funeral procession and the family.

It`s also occasionally been a one-on-one thing. And occasionally a very
funny one-on-one thing. There`s the "God hates signs" rebuttal, which I
always thought was very effective. This guy, "I, too, have a sign." I
find him adorable. God hates signs. Also, "Mourn for our signs." Here is
a variant of that idea, "God hates plastic bags." This one turns up a lot.
"God hates figs." Also "God hates yeast." And there`s biblical citations
on the signs. God hates figs is a pretty popular one, and it is true, that
part of the Gospel of Mark, I looked it up today, it is really anti-fig.
Mark 11, Jesus is adamantly anti-figs.

There`s also plenty of biblical justifications for these Westboro counter-
protesters, "God hates shrimp." "God hates cotton poly blends." Not sure
what`s going on with the pirate in the foreground here, but I bet I`m for
it.

This is the man himself, the head of the cult who died this week. There
have been lots of counter-protesters like these guys on either side of him
who have made this particular point about the Westboro people. Or they
just basically used Westboro anti-gay signs as if their words are more like
prefixes rather than whole words. "Homo sex is sin-sational!" Or this guy
who looks so happy. But look how happy he is, "Homo sex is great." Their
ubiquitous "God hates fags" message has been rebutted by a dog who feels
exactly the opposite. And also apparently by God himself, who begs to
differ with the Westboro cult.

The Westboro cult, despite itself, has been an inspiration to Americans all
over the country wherever they`ve shown up. It`s weird to say, but they
have indirectly caused a lot of good works out of our own human revulsion
at their cruelty. When college football star Michael Sam came out and the
Westboro people came to the University of Missouri to protest his
existence, thousands of college students turned out in the cold and the
snow to make a human wall to wall off the protesters from the man who they
were trying to hurt.

This is not an obituary for the head of the Westboro Baptist Church. He`s
gone now, dead at the age of 84. Incidentally, there`s not going to be a
funeral for him. But lest he be remembered as someone, who despite
himself, actually did bring out the best in people. Who provided a
singular cacophonous vision of cruelty that ended up being a very, very
clarifying thing for all of us.

That does it for us tonight. We will see you again tomorrow night. Now,
it`s time for THE LAST WORD.

Have a great night.


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